Insight Enterprises Q3 Sales Rise 22% as Adjusted EPS Grows

Insight Enterprises, Inc. (Nasdaq: NSIT) reported a 22% year-over-year increase in third-quarter 2026 net sales, while growth in services and cloud gross profit helped lift adjusted earnings. GAAP results moved in the opposite direction, however, as earnout revaluation charges, severance and restructuring expenses, and other excluded items weighed on reported profit.

Net sales for the quarter ended September 30 rose to $2.44 billion, and gross profit increased 20% to $523.2 million. Gross margin narrowed by 30 basis points to 21.4%. Services net sales advanced 20% to $511.9 million, while services gross profit rose 23% to $322.2 million and carried a 63% gross margin.

Adjusted earnings from operations increased 23% to $166.9 million, with the adjusted operating margin unchanged at 6.8%. Adjusted EBITDA rose 22% to $177.4 million, and adjusted diluted earnings per share increased 34% to $3.59.

On a GAAP basis, earnings from operations fell 26% to $68.7 million, net earnings declined 57% to $22.2 million, and diluted earnings per share dropped 54% to $0.74. The reconciliation between GAAP and adjusted results included a $38.6 million change in the fair value of earnout liabilities, $25.7 million of severance and restructuring expenses, $20.9 million of acquired-intangible amortization and $11.8 million of stock-based compensation expense, among other items.

Services and cloud support gross-profit growth

Cloud gross profit increased 26% to $164 million. Gross profit from Insight Core Services, defined as services the company delivers and manages, rose 21% to $95 million. Agent services gross profit increased 24% to $227 million.

Hardware provided much of the quarter’s sales growth. Hardware revenue reached $1.51 billion, compared with $1.14 billion a year earlier, and hardware gross profit rose to $178.6 million from $147.9 million. Software revenue declined to $422.4 million from $433.5 million, while software gross profit fell to $22.4 million from $24.6 million.

Insight said its strategy is to become a leading solutions integrator for the age of AI, combining hardware, software and services across cloud, edge, cybersecurity and modern technology platforms. The company highlighted AI prototyping and managed-security deployments as examples of its focus on scalable and recurring service opportunities. It had more than 6,600 skilled and certified consulting and service-delivery professionals.

Regional performance varies

North America generated $2.0 billion of quarterly net sales, up 22%, and $393.6 million of gross profit, up 15%. Its gross margin declined 130 basis points to 19.8%. Adjusted earnings from operations increased 13% to $132.0 million, while GAAP operating earnings rose 1% to $84.1 million.

In EMEA, net sales grew 7% in constant currency to $338.0 million, and gross profit increased 23% to $90.5 million. Gross margin expanded 360 basis points to 26.8%, while adjusted earnings from operations rose 53% in constant currency to $18.4 million.

APAC net sales increased 93% in constant currency to $120.0 million, and gross profit rose 109% to $39.0 million. Adjusted operating earnings reached $16.5 million, up 148% in constant currency. The region nevertheless recorded a GAAP operating loss of $22.3 million, reflecting adjustments that included a $36.9 million change in the fair value of earnout liabilities.

For the first nine months of 2026, Insight recorded net sales of $7.0 billion, up 12%, and gross profit of $1.5 billion, up 17%. Adjusted diluted earnings per share increased 35% to $10.32, while GAAP diluted EPS rose 33% to $4.28. Net cash provided by operating activities was $128 million in the third quarter and $149 million for the nine-month period.

2026 outlook

As of November 5, Insight expected full-year 2026 gross profit growth of 12.5% to 14.0%, a gross margin of approximately 21.5%, and adjusted diluted earnings per share of $13.55 to $13.75. The outlook also assumes about $95 million of interest and other expenses, an effective tax rate of approximately 25.5%, capital expenditures of $20 million to $30 million, and an average share count of roughly 30 million.

The forecast excludes approximately $83.4 million of acquisition-related intangible amortization and assumes no acquisition or integration-related, transformation, severance or restructuring expenses, net. It also assumes no significant change in Insight’s debt instruments or the macroeconomic environment, including changes related to tariffs. The company said it could not provide a GAAP earnings-per-share reconciliation for the full-year forecast because some excluded expenses cannot be reasonably estimated.

Insight’s forward-looking expectations remain subject to assumptions and uncertainties that could cause actual results to differ materially. In addition to macroeconomic and tariff-related uncertainty, the quarter’s sizable earnout revaluation and restructuring adjustments underscore the gap that can arise between the company’s GAAP and adjusted performance measures.