인사이트 엔터프라이즈(NSIT) 2026년 3분기 실적 발표 콘퍼런스콜: EPS 34% 증가, 가이던스 상향

인사이트 엔터프라이즈(NASDAQ: NSIT)가 2026년 9월 30일로 마감된 분기에 전반적인 성장을 기록했다고 발표했다. 2026년 3분기 실적 발표 콘퍼런스콜에서 경영진은 메모리 가격 책정, 공급망 및 거시경제 환경에 대한 신중한 입장을 유지하면서도 연간 매출총이익 성장률과 조정 희석 EPS 가이던스를 상향 조정했다.

핵심 요약

• 순매출은 하드웨어와 서비스 부문의 성장에 힘입어 전년 동기 대비 22% 증가한 24억 달러를 기록했으나, 온프레미스 소프트웨어 매출 감소로 일부 상쇄됐다.
• 조정 희석 EPS는 34% 증가한 3.59달러를 기록했으며, 조정 EBITDA는 22% 증가한 1억 7,700만 달러로 집계됐다.
• 하드웨어 매출은 32% 증가했다. 경영진은 AI 관련 현대화와 시장 점유율 확대에 힘입어 인프라 부문에서 50% 이상, 디바이스 부문에서 30% 이상의 성장을 기록했다고 밝혔다.
• 클라우드 매출총이익은 SaaS, 마이크로소프트 관련 수요, 세쿠로(Sekuro) 인수를 통해 확보한 보안 소프트웨어의 견인으로 26% 증가한 1억 6,400만 달러를 기록했다.
• 경영진은 주식 기반 보상을 제외한 2026년 연간 매출총이익 성장률 전망치를 12.5%~14%로, 조정 희석 EPS 가이던스를 13.55~13.75달러로 상향 조정했다.
• 인사이트는 자발적 희망퇴직 프로그램을 통해 연간 약 3,000만 달러의 총비용 절감 효과를 기대하고 있으며, 향후 매출총이익 대비 판관비 비율을 지속적으로 낮추는 데 주력하고 있다.

주요 재무 데이터

사업 및 영업 실적

하드웨어 매출은 인프라와 디바이스 부문 모두에서 두 자릿수 성장을 기록하며 32% 증가했다. 경영진은 기업 고객들이 AI를 위해 기술 환경을 현대화함에 따라 서버, 스토리지, 네트워킹 전반에서 인프라 수요가 견조하게 유지됐다고 밝혔다. 디바이스 출하량 또한 가격 인상과 함께 한 자릿수 초반대의 증가율을 보였다.

핵심 서비스 매출은 17% 증가했다. 핵심 서비스 매출총이익은 기업 인수, 완만한 자체 성장 개선, 매출총이익률 확대를 반영해 21% 증가한 9,500만 달러를 기록했다. 경영진은 자체 성장이 4분기 연속 개선됐으나 여전히 최우선 과제라고 언급했다.

클라우드 매출총이익은 26% 증가한 1억 6,400만 달러를 기록했다. 이러한 성장은 SaaS, 마이크로소프트 부문의 호실적, 세쿠로의 보안 소프트웨어가 견인했다. 다만 파트너 프로그램 변경에 따른 인사이트의 구글 클라우드 재판매 사업 감소로 인해 성장률은 예상대로 둔화됐다.

전 지역에서 매출총이익이 증가했다. 북미는 15%, 유럽·중동·아프리카(EMEA)는 22%, 아시아·태평양(APAC)은 121% 증가했다. EMEA는 영국과 아랍에미리트(UAE)의 AI 인프라 프로젝트 수혜를 입었으며, APAC의 성장은 세쿠로 인수 효과와 자체 사업 성장을 모두 반영했다.

인사이트는 '원 인사이트(One Insight)' 혁신 전략 아래 AI 및 사이버보안 역량을 확장하고 있다. 오픈AI는 인사이트를 어드밴스드 파트너(Advanced Partner)로 선정했으며, 인사이트는 전담 오픈AI 우수센터(Center of Excellence)를 설립했다. 또한 사이버보안 솔루션 라인을 신설하고 영업 전문가, 솔루션 아키텍트, 전진 배치 엔지니어(Forward Deployed Engineer)에 대한 투자를 지속했다.

인사이트는 3분기 중 7,500만 달러 규모의 자사주를 매입했다. 경영진은 연말까지 잔여 승인 한도 7,400만 달러를 소진할 방침이며, 이에 따라 2026년 연간 자사주 매입 예상액은 2억 9,900만 달러에 달할 전망이다.

경영진 가이던스

경영진이 제시한 2026년 연간 전망은 다음과 같다.

경영진에 따르면 이 EPS 범위는 중간값 기준 약 27%의 성장을 나타낸다. 이 전망치에는 인수 관련 무형자산 상각비, 인수 관련 비용, 퇴직금 및 구조조정 비용, 자발적 희망퇴직 프로그램 비용, 사업 전환 비용 등 약 8,300만 달러가 제외됐다.

4분기의 경우, 경영진은 하드웨어 매출총이익이 한 자릿수 후반대, 핵심 서비스 매출총이익이 10%대 중반, 클라우드 매출총이익이 20%대 중반의 증가율을 기록할 것으로 예상하고 있다. 조정 판관비는 매출총이익보다 낮은 증가율을 보일 것으로 전망된다.

리스크 및 주시 사항

경영진은 인사이트가 2025년에 완료된 인수의 기저 효과를 맞이하고 구글 파트너 프로그램 변경에 따른 영향이 더욱 두드러짐에 따라 4분기 성장세가 둔화될 것으로 예상하고 있다.

회사는 또한 메모리 가격 책정의 불확실성, 잠재적인 공급망 차질, 광범위한 거시경제 환경으로 인해 신중한 접근 방식을 취하고 있다. 하드웨어 매출총이익률은 전분기 대비 10bp 개선됐으나, 디바이스 가격 책정 및 고객 믹스로 인해 3분기에 전년 동기 대비 100bp 하락했다.

4분기에 들어서도 수주잔고는 높은 수준을 유지했으며, 이례적인 주문 취소나 예약 취소(디부킹) 추세는 나타나지 않았다. 경영진은 분기 초 신규 수주가 출하된 주문을 효과적으로 대체하고 있다고 밝혔으나, 이러한 추세는 분기 잔여 기간 동안 면밀히 주시해야 한다고 덧붙였다.

애널리스트 Q&A 주요 내용

• 하드웨어 수요: 경영진은 3분기 호실적이 서버, 스토리지 및 네트워킹의 견조한 수요와 함께 디바이스 가격 및 출하량 성장을 모두 반영한 결과라고 밝혔다. 4분기는 긍정적으로 출발했으나, 전년도 실적 호조에 따른 기저 부담과 기타 영업상의 불확실성으로 인해 신중한 전망을 유지했다.
• AI 인프라: 기업 고객이 주요 동인이다. 경영진은 고객들이 데이터 프라이버시, 추론 요구사항, 토큰 경제성에 따라 온프레미스 인프라와 클라우드 용량을 결합하는 균형 잡힌 접근 방식을 점차 모색하고 있다고 밝혔다.
• 영업 레버리지: 인사이트는 전략적 소싱, AI 기반 자동화, 조직 단순화, 글로벌 규모를 핵심 효율성 지렛대로 꼽았다. 구체적인 내용과 3개년 재무 목표는 12월 2일로 예정된 투자자 및 애널리스트 브리핑에서 발표될 예정이다.
• M&A 및 자본 배분: 자체 성장이 당면한 최우선 과제로 유지된다. 경영진은 보다 체계적인 통합 플레이북을 바탕으로 자사주 매입과 더불어 M&A가 장기 전략의 일부로 지속될 것이라고 밝혔다.
• 번들 솔루션: 경영진은 중견기업(미드마켓) 시장에서 하드웨어, 소프트웨어, 클라우드 및 구축 서비스를 통합한 패키지에 대한 수요가 가장 강력하다고 보고 있다. 또한 고객들이 신뢰할 수 있는 소수의 공급업체로 지출을 통합하는 추세를 이어가고 있다고 덧붙였다.

실적 발표 콘퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Thank you for joining us, and welcome to the Insight Enterprises Third Quarter 2026 Operating Results. [Operator Instructions]

I will now hand the conference over to Ryan Miyasato, Investor Relations Director of Insight. Please go ahead.

Ryan Miyasato

Welcome, everyone, and thank you for joining the Insight Enterprises earnings conference call. Today, we will be discussing the company's operating results for the quarter ended September 30, 2026. I'm Ryan Miyasato, Investor Relations Director of Insight, and joining me is Jack Azagury, President and Chief Executive Officer; and James Morgado, Chief Financial Officer. If you do not have a copy of the earnings release or the accompanying slide presentation that was posted this morning and filed with the Securities and Exchange Commission on Form 8-K, you will find it on our website at insight.com under the Investor Relations section.

Today's call, including the question-and-answer period, is being webcast live and can also be accessed via the Investor Relations page of our website at insight.com. An archived copy of the conference call will be available approximately 2 hours after the completion of the call and will remain on our website for a limited time. This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, November 5, 2026. This call is the property of Insight Enterprises. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Insight Enterprises is strictly prohibited.

In today's conference call, we will be referring to non-GAAP financial measures as we discuss the third quarter financial results. When discussing non-GAAP measures, we will refer to them as adjusted. You will find a reconciliation of these adjusted measures to our actual GAAP results included in both the press release and the accompanying slide presentation issued earlier today. Please note that all growth comparisons we make on the call today relate to the corresponding period of last year, unless otherwise noted. Also, unless highlighted as constant currency, all amounts and growth rates discussed are in U.S. dollar terms.

As a reminder, all forward-looking statements that are made during this conference call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in today's press release and in greater detail in our most recently filed periodic reports and subsequent filings with the SEC. All forward-looking statements are made as of the date of this call and except as required by law, we undertake no obligation to update any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

With that, I will now turn the call over to Jack. Jack?

Jack Azagury

Thank you, Ryan. Good morning, everyone, and thank you for joining us. I am pleased to report another very strong quarter with broad-based momentum across the business. Gross profit increased 20%, adjusted earnings from operations grew 23% and adjusted diluted earnings per share increased 34%. Importantly, we saw strong performance in our growth priority areas where we are concentrating our investments and resources. Infrastructure hardware gross profit increased more than 50%, supported by demand for servers, storage and networking as clients modernize their technology environments for AI. Cloud gross profit increased 26%, with exceptional performance in our Microsoft business, and core services gross profit grew 21%.

At the same time, our core business continues to perform well. Devices revenue increased more than 30%, reflecting market share gains and strong execution by our teams. These results, together with my conversations with more than 130 clients and partners since I joined, have reinforced my conviction in the opportunity ahead and validated our business model based upon long-term relationships, the depth of our engineering capabilities and our ability to solve complex technology challenges and get to ROI at speed by combining hardware, software, cloud and services. The opportunity is significant and the team's commitment to focus and execution is yielding results.

We are moving with greater speed and discipline on our One Insight transformation centered on the 3 pillars, which I shared last quarter, accelerating growth in AI infrastructure and AI services, including security; building a more integrated One Insight operating model and investing in the talent and capabilities required to win.

Let me give you a few examples of the progress we are making under those 3 pillars. Our first pillar is accelerating our growth in AI infrastructure, AI services and cybersecurity. During the quarter, we reached another important milestone in the development of our AI capabilities when OpenAI named Insight an advanced partner. This services-focused relationship expands our ability to help clients adopt, build and scale solutions using OpenAI technology. To capture that opportunity, we have established a dedicated OpenAI Center of Excellence and are investing in talent across sales, solution architects and forward deployed engineers. The opportunity becomes most apparent when you see what these capabilities can do for our clients.

For example, we recently helped a major construction contractor apply OpenAI technology to high-value business processes. We developed an AI-powered safety investigation solution designed to bring greater consistency and rigor to manual root cause analysis. The solution is expected to reduce investigation time, standardize methodology and protect the client's strong safety record, resulting in $20 million of insurance premium savings. This is the type of AI opportunity we are targeting, applying cutting-edge technology to important business processes where the value to the client is tangible and measurable.

Cybersecurity is another area where we see significant opportunity for growth. We recently established a dedicated cybersecurity solution line and hired Valerie Abend, who brings significant industry experience, most recently as CEO of FS-ISAC, an organization focused on sharing cyber and physical threat intelligence within the financial services sector and previously a Senior Managing Director at Accenture. Our mandate is to build on our existing cybersecurity expertise and accelerate the development of an integrated portfolio of security solutions.

One recent example is Insight Managed Exposure Defense, or IMED, which I shared on the last earnings call, and helps clients simplify security operations and maximize their existing technology investments. A leading specialty health care provider selected Insight to replace an incumbent provider and consolidate multiple managed security services, including extended detection and response, continuous threat exposure management, penetration testing and patching, all as part of one bundle. This is the model we are replicating, leveraging our client zero experience, supporting our clients with differentiated technical talent and building packaged solutions to get to predictable outcomes at speed.

Our second pillar is building on One Insight operating model that brings us -- that allows us to bring the full strength of our capabilities to clients with greater speed and consistency. As part of that work, we are creating a global solution and partner organization that will enable us to create productized solutions and offerings, continue to industrialize our delivery capabilities and leverage best practices globally. This group will be led by Adrian Gregory, who will transition from his role as EMEA President to lead this organization beginning January 1. Our new EMEA leader will be announced prior to January 1.

Our objective is straightforward, operate more consistently on a global basis, simplify how we bring capabilities and productized offerings to market and more seamlessly integrate our solutions to solve our clients' challenges. This model will also help us to continue to reduce our SG&A to gross profit ratio by leveraging our global scale.

Our third pillar is our talent transformation. During Q3, we initiated a voluntary separation program focused primarily on mid- and back-office functions as one component of our broader transformation. This is about more than cost reduction. It is about reallocating resources towards our highest growth opportunities, streamlining how we operate and building a more focused organization that can move faster and execute more consistently. At the same time, we are investing in the skills we believe will drive Insight's future. We now have more than 600 teammates certified with Anthropic and OpenAI -- or OpenAI and more than 100 with NVIDIA.

We will continue to invest in certifications and technical skills in the areas where we see the greatest growth -- opportunities for growth. We also continue to build our FDE community. For example, we worked with a global logistics leader seeking to simplify access to HR and support services for a workforce of more than 400,000 employees. Using our rapid AI framework, our FDEs moved from discovery to a functioning prototype running on Claude in just 10 days, demonstrating how AI can streamline service delivery, improve employee experience and support the client's broader digital transformation.

This engagement gave the client tangible evidence to inform its investment decisions. For us, it demonstrates the value of combining deep technical capabilities with speed of execution to help clients move from AI concept to business outcomes. This combination of investment and cost discipline is important. We intend to invest aggressively behind our growth priorities while creating operating leverage across the broader organization and reduce SG&A as a percentage of gross profit every year. Getting that balance right is critical to how we are managing the business.

And as we execute against these priorities, we continue to see external validation of the capabilities, partnerships and culture that support our strategy.

Recent industry and partner recognition includes being featured in the Gartner Magic Quadrant for Public Cloud IT Transformation Services and the IDC MarketScape for Worldwide Cloud Professional Services in the AI Era. Dell naming Insight its Data Center Excellence Partner of the Year and Palo Alto Networks naming us its 2026 North America Growth Partner.

Our people and culture have also been recognized, including Time Magazine naming Insight one of America's Best Companies for 2026, Forbes recognizing Insight as one of the world's best employers and numerous Great Place to Work awards.

Turning to the remainder of the year. Our capital allocation priorities remain clear. We believe the highest return opportunities today are investing in Insight's organic growth priorities and repurchasing our shares. We intend to complete the remaining $74 million of our current share repurchase authorization this year. Our performance through the first 3 quarters reinforces that conviction. Demand has remained healthy across our key markets. Execution has been strong. Our focus on organic growth is gaining traction and backlog remains elevated.

At the same time, we continue to monitor a mixed and evolving macroeconomic environment and remain disciplined in how we manage the business. But we are encouraged by what we are seeing. As the year has progressed, we have sharpened our focus, strengthened execution and continue to deliver strong financial results. Given our year-to-date performance and confidence in our ability to execute, we are raising our 2026 outlook again for gross profit growth and adjusted diluted earnings per share. James will provide additional details on our updated guidance in a moment.

We have more work ahead, and we are still early in our One Insight transformation, but we are making progress against our priorities and building the capabilities, operating discipline and execution we believe are necessary to capture the opportunity ahead.

With that, I'll turn the call over to James. James?

James Morgado

Thank you, Jack, and good morning, everyone. Our Q3 results demonstrated broad-based strength across our business and exceeded our expectations for the quarter. Net revenue was $2.4 billion, an increase of 22% in U.S. dollar and constant currency terms. The increase was driven by hardware and services, partially offset by a decrease in on-prem software as clients shift to cloud-delivered software. As a reminder, cloud-delivered software is presented net in agent services revenue.

Hardware revenue increased 32% with double-digit growth in both infrastructure and devices. Infrastructure was up over 50% and devices over 30%. Core services revenue increased 17%, reflecting contributions from both acquisitions and the organic business with stronger growth from acquired businesses. Organic growth has improved modestly for the last 4 quarters. While we are encouraged by the progress, there is more work to do and strengthening organic growth remains an important priority.

Gross profit increased 20%. Cloud gross profit was $164 million, an increase of 26%, driven by growth in SaaS as well as security software from our Sekuro acquisition. As we anticipated and communicated throughout the year, growth moderated due to the expected decline in our Google Cloud resale business. Insight Core Services gross profit was $95 million, an increase of 21%, driven by contribution from acquisitions, modest and improving organic growth as well as gross margin expansion. Hardware gross profit was up 21%, while gross margin declined 100 basis points due to device pricing and overall client mix. Sequentially, gross margin improved 10 basis points.

From a geographic perspective, all regions delivered strong gross profit growth. North America grew 15%, with strong performance across all solution lines. EMEA increased 22%, driven by ongoing AI infrastructure build-outs in the U.K. and UAE, where we act as the agent in the transactions. And APAC grew 121%, fueled by our acquisition of Sekuro as well as our organic business. As a result, total gross margin was 21.4%, a decrease of 30 basis points due to revenue mix and a decline in hardware margin, partially offset by cloud growth.

Adjusted SG&A increased 19%, primarily due to an increase in our variable compensation tied to our strong year-to-date performance as well as expenses related to acquisitions without a comparable expense in 2025.

During the quarter, we initiated a voluntary separation program as part of our ongoing focus on operating efficiency. We expect approximately $30 million in annualized gross savings. Our commitment is to reduce our SG&A to gross profit ratio over the coming years. We will share additional details at our investor and analyst briefing on December 2.

These results drove EBITDA -- adjusted EBITDA of $177 million, up 22%, while margin was flat at 7.3%. And our adjusted diluted earnings per share were $3.59, up 34% in U.S. dollar terms and 36% in constant currency. For the quarter, we generated $128 million of cash flow from operations, and year-to-date, we generated $149 million, which was in line with our expectations. For the year, we continue to anticipate cash flow from operations in the range of $300 million to $400 million.

In Q3, we repurchased $75 million in shares and have $74 million in remaining authorization, which we intend to exhaust before the end of the year. The projected $299 million of share repurchases for the year would represent over 85% at the midpoint of our projected operating cash flow.

We exited Q3 with total debt of approximately $1.5 billion compared to $1.4 billion a year ago with a net leverage ratio of 1.6. We have ample liquidity to meet our needs. And as of the end of Q3, we had access to the $2 billion capacity under our ABL facility, of which $1 billion was available. Our adjusted return on invested capital for the trailing 12 months at the end of Q3 was 18.1% compared to 15.8% a year ago.

Now turning to guidance. As we have discussed throughout the year, we expect our growth rate to moderate in the fourth quarter as we lap the acquisitions completed last year and work through the impact of the Google Partner Program changes. We're also taking a prudent approach to our outlook given uncertainty associated with memory pricing, supply chain disruption and the broader macroeconomic environment. These factors are reflected in our fourth quarter expectations and we continue to expect solid execution across the portfolio.

As we consider our year-to-date performance and the evolving operating environment, our guidance incorporates the following assumptions and consideration. Hardware gross profit will be up high single digits with growth in both infrastructure and devices. We expect core services gross profit will grow in the mid-teens. As a reminder, we have lapped the acquisitions we completed in early Q4 2025. We anticipate cloud gross profit to grow in the mid-20% range as we move past the majority of the partner program changes we have previously discussed. Adjusted SG&A will grow slower than gross profit growth. And finally, we intend to exhaust the remaining $74 million share repurchase authorization in 2026.

Considering these factors, for the full year of 2026, our guidance is as follows: we are raising our gross profit growth expectations to 12.5% to 14%, and our gross margin will be approximately 21.5%. Excluding stock-based compensation, our adjusted diluted earnings per share will now be between $13.55 to $13.75. This represents approximately 27% growth at the midpoint. Finally, we expect cash flow from operations in the $300 million to $400 million range.

Our guidance includes interest and other expenses to be approximately $95 million, an effective tax rate of approximately 25.5% for the full year, capital expenditures of $20 million to $30 million and an average share count for the full year of approximately 30 million shares. This outlook excludes stock-based compensation, excludes acquisition-related intangible amortization expense of approximately $83 million, assumes no acquisition-related costs and excludes severance, restructuring and voluntary separation program expenses as well as transformation costs, and assumes no change in our debt instruments and no meaningful change in the macroeconomic outlook.

I will now turn the call back to Jack. Jack?

Jack Azagury

Thank you, James. Before we conclude, I want to thank our teammates, our clients and our partners. Our performance this quarter reflects the dedication of our people, the trust our clients place in us and the strength of our partnerships. I'm proud of what we've accomplished together. More importantly, I'm encouraged by the progress we are making on our One Insight transformation and the opportunity ahead.

On December 2, at Noon Eastern, we plan to host a virtual investor and analyst briefing, where we'll provide a deeper perspective on the industry landscape, Insights' position in the market, our strategic priorities and our 3-year financial targets.

Thank you for your continued support of Insight. We look forward to speaking with you at our briefing and updating you on our progress next quarter. This concludes my prepared remarks, and we will now open the line for your questions.

Operator

[Operator Instructions] Your first question is from Joseph Cardoso with JPMorgan.

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Joseph Cardoso

Maybe I just wanted to first touch on the demand in the quarter as well as kind of what's implied in the guidance, particularly on the hardware side of the business. Maybe first part of the question is just help us think through how you guys are -- or what you guys are seeing from a contribution standpoint between pricing and underlying units in the quarter and maybe how you thought that trended as you kind of progressed through the quarter into 4Q today?

And then obviously, the implied outlook there, James, that you gave kind of embeds a little bit of a slowdown here in the fourth quarter. Maybe just walk us through what you guys are embedding there as it relates to the hardware business? And maybe what's the puts and takes there that we should be contemplating as we're thinking about that outlook? And then I do have a follow-up.

Jack Azagury

Thanks for the question. So a few points. Let me talk about hardware, first of all in Q3, both devices and infrastructure were very strong. We actually saw device units up low single digit in addition to price increase, a very strong quarter in devices. And obviously, a very strong quarter in infrastructure with a very strong demand across servers, storage and networking.

When we look at Q4, a few things. First of all, we're pleased with the start of the quarter. The second, when we look at our guidance for Q4, firstly, I want to keep a prudent stance in my guidance. So that's first. The second thing is this will be the first quarter in a long time that is primarily an organic quarter. We're also hitting harder compares compared to Q4 of last year. We had signaled the impact of the Google Partner Program changes in Q4. As you know, we signaled that. I think even in my first earnings call in Q2, we started to signal that maybe even earlier. So we knew this was coming. This is not a surprise, but that obviously dampens things. So those are the primary drivers for our guidance. James, anything you want to add?

James Morgado

Yes. I think those are -- that's spot on in terms of the dynamics that we've been calling out all year as we enter in Q4. I would just -- from a hardware standpoint, the backlog is still very healthy as we enter the quarter. And as Jack mentioned, bookings have progressed well, seen that both, by the way, across devices and infrastructure. We had very strong performance in both of those in Q3. As Jack mentioned, on the device side, units -- units were up. And based on all the measures we see, market was actually down from a unit perspective.

Around the cloud, cloud remains healthy. You saw -- and I called this out in the prepared remarks, but you saw a little bit of a slowdown in cloud signaling around the Google Partner Program changes that, that becomes more acute in Q4. But the underlying cloud business, particularly around the Microsoft side has remained really healthy and really strong. I would argue that all year, we've taken share in the Microsoft space as well. That demand also continues into Q4. We just have these -- these other items that we have to contend with specifically in Q4. But all the signals that I see entering the quarter, the demand profile remains strong, but it is important for us to keep that prudent stance.

Joseph Cardoso

No. Got it. That's fair. And then maybe as my follow-up, Jack, you spent a fair bit of time in the prepared remarks talking about a focus on continuing to drive operating leverage. And obviously, this year, you guys made great progress. I think the guidance implies something like exiting the year in kind of the high 60% as a percentage of total GP there. So maybe just wanted to touch on there in terms of your conviction around maybe medium, longer-term outlook in terms of being able to drive that on an annual cadence or consistently through the forecast or looking outward longer term, just given that you're also benefiting from a very strong top line this year. Maybe just walk us through like how you guys are thinking about that longer term and the conviction to kind of continue to drive this improving operating leverage in the business?

And then maybe a second part, too, as you guys think about that and putting that out there, are you guys also contemplating M&A and being able to consistently do that even and maybe if that were to engage there in terms of the M&A pipeline?

Jack Azagury

Yes. So let me start with operating leverage. And when we get together in December for the Investor Day, we'll provide a 3-year view on operating leverage. But I have strong conviction that we can continue to drive operating leverage. We implemented a voluntary separation program. We've also mostly frozen all mid- and back-office hiring for some time now. We're looking at a number of levers that I outlined on maybe my first or second earnings call around. We've got a strategic sourcing program, which is well underway. We kicked that off within a few months of me joining. We have tremendous opportunities with AI and monetization of technology and automation.

Our One Insight operating model provides opportunities to get better scale from our global presence. We're looking at the spans and layers in the organization to accelerate and simplify decision-making. So we have a very strong plan. We know what to do, and we'll be executing. We'll provide a 3-year view of how we plan to execute on that in December.

On M&A, we will -- as I said, this is not -- this was not a focus this year. Our focus this year is on the organic business. And whatever we do in M&A, our priority is making sure we have a healthy, strong and high-performing organic business. But we will be looking at M&A as part of our strategy going forward. We've already started to work on our integration playbook to make sure if and when it happens, we execute with discipline. And so it will be part of, I'm sure, in some way, shape or form of how we execute over the next 3 years.

James Morgado

And Joe, I would add things to this. One is I certainly am with Jack in terms of we have a big opportunity around our operating expense leverage. I think we are in a unique position to both drive leverage as well as continue to invest in the core areas that will drive the growth priorities for us. And that's investments that will take the shape in terms of sales and technical talent.

And then on the M&A front [Technical Difficulty] more about our capital allocation priorities because we do believe that share repurchases will have a strong place in those capital allocation priorities along -- along with the M&A side. But we'll outline that more holistically on December 2.

Operator

Your next question is from Luke Morison with Canaccord Genuity.

Lucas Morison

Congrats on the great results. So I wanted to dig on the infrastructure segment a little bit. The number there really stood out. Gross profit is up more than 50%. I'd love to just get more color on sort of the underlying drivers of that. As I think about the inflection here, is it mainly enterprises just getting their own environments ready for AI? Or are you also participating directly or indirectly in larger build-outs for cloud and AI-focused providers? And then as that business grows, how are you thinking about where it makes sense to lead with services versus where you're comfortable with a purely more transactional reseller role?

Jack Azagury

Thanks. So on infrastructure, our primary focus and the primary driver of our numbers is selling to the enterprise. That is the bulk of our numbers. And what we're seeing with our clients is, while we see very, very strong cloud growth, many of our enterprise clients are seeking a balanced posture with data and compute on-prem, and leveraging the cloud for their workloads and for AI. And so a lot of our clients are opting for a balanced posture.

And so when I look at the market outlook for the next few years, I see very strong growth in cloud, but there are also strong growth on infrastructure. It's going to have clients seek that balanced posture. And I think with token costs and token economics, every client is looking at how do they balance that, what do they do on-prem, what inference on-prem, what data do they need for privacy or other reasons. And so we see a dual approach at many of our clients between the cloud and their on-prem. And that's what's driving -- that's what's driving our business in infrastructure.

The second one on services. One of the things that is central to our strategy. And a lot of people ask me, especially with my services background, is the focus resale or is the focus on services? And the answer is yes. For us to execute, both resale and services are critical. Our strategy is to be the solution integrator. That means bringing the hardware, the software, the cloud and the services to drive results.

And so, we're very focused on making sure we have the right motions on resale, the right motion on services and making sure we complement those to get to faster solution for our clients to get them to ROI. And so when you look at our engineering talent, it's both advising our clients on how to structure what they're going to buy in terms of software, hardware, very complex architectural decisions, but then advising on the implementation and how to make it happen and how to build their AI use cases on top of that infrastructure. And so our strategy is very much rooted on having that resale and services complement each other. It's not either/or, it's both together.

Lucas Morison

Got it. Makes a lot of sense. And then maybe just for my follow-up, last quarter, you described backlog as clean, no double ordering, cancellations were mostly rebookings, hardware sales are up 32% this quarter. Maybe just update us on where backlog stands today? Is it still building? Is it starting to convert down? And then if anything has changed in the mix or lead times that's worth flagging?

James Morgado

Yes. Thanks, Luke. The backlog still remains quite healthy. We don't see any unusual trends around debookings or cancellation of orders. So as healthy as it has been in previous quarters. From -- as we entered Q4, backlog was still at an elevated level going back to, if you rewind, we said this earlier in the year that Q2 was at historic levels back all the way from the COVID time. It is still at elevated levels as we enter in Q4. And then the bookings thus far in Q4 would indicate that anything that is shipping is effectively being rebooked.

Now we have to watch to see if that trend continues through the quarter, and we will update you, of course, as we get into the outlook for next year in February. But the trends to start the quarter have continued to be healthy.

Operator

Your next question comes from Vincent Colicchio with Barrington Research.

Vincent Colicchio

Jack, part of your strategy, are you seeing customers increasingly purchase bundled solutions that include hardware, software and implementation?

Jack Azagury

Yes. Especially in the mid-market, that's where the full integrated solution, integrated proposition resonates the most. We have many clients that come to us for resale, be it of their cloud capabilities, their infrastructure, their server, storage, networking and then wanting the implementation service, be it help them build the AI use cases, migrate their data to the right platform, secure the enterprise. That is -- we very much see that with our clients.

One of the things that I've been very pleased to find out over the last 6 or 7 months is the length and depth of our relationships. We, as a company, have not treated our clients' relationships as transactional. These are long term. We have account executives in positions for 10, 15 years, sometimes longer. And the clients consistently tell me we love working with Insight. We love the long-term relationship. That's something we have to preserve. And that builds the trust and the trust leads to clients trusting us with that bundle of services to help them solve their complex technology and AI problems.

Vincent Colicchio

And then as a follow-up, are customers consolidating spending with fewer providers? And are you benefiting from that trend?

Jack Azagury

I would say, just anecdotally from my client discussions, it is a fairly common theme that clients want a few trusted providers. I believe we do benefit from that trend. I would say -- the clients have probably been saying this for some time. So I don't think this is a new trend. I think this is an ongoing thing where clients want to be disciplined about their expenditure. Budgets are under pressure, and they want to invest in AI and therefore, they need the discipline in other areas of their IT budget. And so I do hear a lot of clients that want to consolidate with us. And usually, that's a positive discussion for us.

Operator

There are no further questions at this time. Thank you so much for attending. This concludes today's call. You may now disconnect.