Insight Enterprises Inc Canaccord Genuity's 46th Annual Growth Conference

It's great to be here.

Yeah. A two-minute history, and then I'll talk about the strategy, or less than two minutes. We're a 38-year-old company. Tim, our chair, started the company selling hard drives out of his garage out of college. We grew up as a VAR, and about 10 years ago, started the pivot to be a solution integrator. What that means is we want to be able to help our clients with the hardware, the software, the cloud, and all the services to help them get the results. I started about four months ago, almost to the date. My background, I was 30 years with Accenture. I was the CEO of their strategy and consulting business for a long time. I started my career in the software industry before Andersen Consulting and Accenture. This is my second earnings call last week. The team did a great job in Q1.

We had a very strong quarter and then a very strong quarter in Q2. Very pleased with the team's performance in the second quarter. We've been working since I started on our three-year plan. I called it the One Insight plan. We've had the top leaders in the company all working on it. It's not my plan, it's our plan. Everybody's been very active on it. We talked about three things in the plan. The first is our growth strategy. There are two long-term trends that we're going to align ourselves with going forward. The first is the growth in infrastructure and AI infrastructure. We had a very strong quarter in infrastructure, especially in service. Growth in servers was through the roof, but also in storage and networking.

AI infrastructure both in terms of direct and indirect impact of AI in companies' data centers and their desire to have a hybrid footprint. We see that as a continued tailwind. The second priority is AI services. Engineering, FDEs, data, cloud, and security. Those two vectors, AI infra, AI services, and we're already investing in organic talent to continue to build the depth of our engineering skills in both of those. The second priority is our OpEx leverage, our operating model. We currently stand at an OpEx leverage of around 67. We've identified an opportunity to bring that down over the next three years. We'll share more details. We'll do an Investor Day towards the back end of the year, early next year. We've got a set of initiatives underway, and have a lot of opportunities to improve our operating model.

A number of things haven't been integrated. Mid, back office especially. Improve AI deployment and being client zero. James has already done a lot of AI transformation in finance. My CMO in marketing. My HR lead in HR. We've got a lot more of our opportunities to deploy AI internally, and we continue to do that. Then more simple things. We've reviewed all our direct and indirect procurement. We're reviewing the spans and the number of layers in the organization. Our plan is to keep driving operational efficiency into the business.

Yep. Excellent. The third pillar is our talent strategy and how we compete for AI talent and align our team with our long-term strategy.

There is one component which we spent more time in our Q1 earnings call that was out of the gate when I joined this year. We are buying back about just under $300 million, $299 million worth of stock, just under 10% of the company. We have stopped M&A this year because we have a lot of improvements and opportunities in our organic business, and getting the operating model and really integrating the great acquisitions the company did over the last two to three years, especially in the AI space. Right now, we are really focused on improving our organic business.

Yeah. When you look at our hardware business, it is devices and it is infrastructure. Infrastructure is server storage networking. We have had two very strong quarters on both devices and on infrastructure. But the dynamics are a little bit different across the two. In devices, the market saw a reduction in number of units in the second quarter. We actually saw a slight increase in laptops, but a decrease in desktops and handhelds. But we expect, and most of the analysts and chip manufacturers expect a decrease in number of units going to the second half in devices, but a continued upward pressure on average selling price. So we will see growth in the device business that will be driven by price increases, and most OEMs are signaling continued upward pressure on prices going into the second half. The infrastructure business is a little bit different.

The growth in data center modernization, migrating data on-prem, that I see as a more sustained long-term tailwind. Server prices have gone up significantly. That is the number one impact of memory prices. We have seen very large increases. Our clients' desire to balance a non-cloud posture and an on-prem posture is a continued trend. People want to have the data in the right places and manage their on-prem infrastructure and grow that footprint over the next few years. We see both growth in cloud and on-prem. Both of those have tailwinds behind them, and we do not see any abatement to the growth in infrastructure.