Insight Enterprises 2025 Q2 Earnings Misses Targets as Net Income Drops 46%

Insight Enterprises (NSIT) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025.

Insight Enterprises fell short of expectations with declines in both revenue and earnings compared to the previous year. The company reported a 3.2% decrease in total revenue and a significant 46.3% drop in net income. Despite current challenges, Insight Enterprises maintains its full-year guidance, expecting earnings per share to be between $9.70 and $10.10. The forecast suggests gross profit will remain flat compared to 2024, amid cautious optimism for improved conditions in the latter half of the year.

Revenue
Insight Enterprises saw its total revenue decrease to $2.09 billion in 2025 Q2, down from $2.16 billion in 2024 Q2. The hardware segment generated $1.19 billion, showing growth despite overall declines. Software revenue stood at $474.26 million, and services contributed $426.19 million, reflecting challenges in those areas.

Earnings/Net Income
Insight Enterprises's earnings per share (EPS) dropped significantly to $1.48 in 2025 Q2, compared to $2.69 in 2024 Q2. The company experienced a 46.3% decline in net income, totaling $46.93 million in 2025 Q2, down from $87.44 million in 2024 Q2. The declining EPS indicates challenging financial performance.

Price Action
The stock price of Insight Enterprises has tumbled 14.78% during the latest trading day, has plummeted 17.91% during the most recent full trading week, and has tumbled 14.13% month-to-date.

Post-Earnings Price Action Review
The strategy of buying Insight Enterprises shares on the day following quarterly revenue announcements and selling them after 30 days has historically delivered strong returns over the past three years. With a notable 195.14% return, this approach significantly outperformed the benchmark return of 85.57%, showcasing an excess return of 109.56%. This strategy's focus on revenue announcements has provided valuable buying opportunities, achieving a compound annual growth rate (CAGR) of 24.36% and demonstrating robust risk-adjusted performance. Supported by a Sharpe ratio of 0.82 and manageable volatility of 29.69%, the strategy highlights its effectiveness in navigating market fluctuations. This historical success suggests that the strategy could continue to offer favorable outcomes, particularly in periods following positive revenue announcements.

CEO Commentary
Joyce A. Mullen, President and CEO, emphasized that Insight Enterprises navigated a challenging environment, achieving growth in hardware revenue for the second consecutive quarter and reaching record profitability milestones. She noted, "We are adapting our ambition to become the leading AI-first solutions integrator," highlighting the firm’s focus on integrating AI into its services portfolio. Mullen mentioned that while macroeconomic factors impact client investments, the company is positioned to grow as conditions improve. She expressed cautious optimism regarding the second half of 2025, anticipating increased purchasing from corporate and large enterprise clients, driven by hardware demand and a recovery in infrastructure spending.

Guidance
For the full year, Insight Enterprises expects gross profit to be approximately flat from 2024, with an adjusted diluted earnings per share guidance of between $9.70 to $10.10. The company anticipates capital expenditures of $30 million to $35 million and projects that hardware gross profit will grow in the mid-single digits. Insight also expects cloud performance to improve, but overall cloud results are forecasted to be flat to slightly down. The effective tax rate is expected to be between 25% to 26%, alongside interest expenses of $75 million to $80 million for the year.

Additional News
Insight Enterprises has not announced any major mergers or acquisitions recently. However, the company continues to focus on optimizing its existing portfolio and enhancing profitability through strategic positioning. While there have been no changes in C-level positions, Insight Enterprises remains committed to integrating AI solutions and maintaining its leadership in technology solutions. There has been no news regarding dividend changes or stock buybacks within the last three weeks. The company's emphasis on AI adoption and service integration reflects its strategic approach to navigating market challenges and positioning itself for future growth.