UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 0-25092

INSIGHT ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Delaware	86-0766246
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

2701 E. Insight Way, Chandler, Arizona 85286

(Address of principal executive offices) (Zip Code)

(480) 333-3000

(Registrant’s telephone number, including area code)

__________________________________________________________________

Not Applicable

_________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01	NSIT	The NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

The number of shares outstanding of the issuer’s common stock as of July 28, 2023 was 35,572,967.

INSIGHT ENTERPRISES, INC.

QUARTERLY REPORT ON FORM 10-Q

Three Months Ended June 30, 2023

TABLE OF CONTENTS

		Page
PART I -	Financial Information
Item 1 –	Financial Statements:
	Consolidated Balance Sheets (unaudited) – June 30, 2023 and December 31, 2022	1
	Consolidated Statements of Operations (unaudited) – Three and Six Months Ended June 30, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income (unaudited) – Three and Six Months Ended June 30, 2023 and 2022	3
	Consolidated Statements of Stockholders’ Equity (unaudited) – Three and Six Months Ended June 30, 2023 and 2022	4
	Consolidated Statements of Cash Flows (unaudited) – Six Months Ended June 30, 2023 and 2022	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2 –	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3 –	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4 –	Controls and Procedures	38
PART II -	Other Information	39
Item 1 –	Legal Proceedings	39
Item 1A –	Risk Factors	39
Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3 –	Defaults Upon Senior Securities	40
Item 4 –	Mine Safety Disclosures	40
Item 5 –	Other Information	40
Item 6 –	Exhibits	41
Signatures		42

INSIGHT ENTERPRISES, INC.

FORWARD-LOOKING INFORMATION

References to "the Company," “Insight,” “we,” “us,” “our” and other similar words refer to Insight Enterprises, Inc. and its consolidated subsidiaries, unless the context suggests otherwise. Certain statements in this Quarterly Report on Form 10-Q, including statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this report, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include: projections of, and matters that affect, net sales, gross profit, gross margin, operating expenses, earnings from operations, non-operating income and expenses, net earnings or cash flows, cash needs and the payment of accrued expenses and liabilities; our expectations regarding current supply constraints, including that supply constraints and extended lead times for networking and infrastructure products could impact results into the latter part of 2023; our expectations regarding the device market, the expected effects of seasonality on our business; expectations of further consolidation and trends in the Information Technology (“IT”) industry; our business strategy and our strategic initiatives, including our efforts to grow our core business in the current environment, develop and grow our global cloud business and build scalable solutions; expectations regarding the impact of partner incentives; our expectations about future benefits of our acquisitions and our plans related thereto, including potential expansion into wider regions; the increasing demand for big data solutions; the availability of competitive sources of products for our purchase and resale; our intentions concerning the payment of dividends; our acquisition strategy; our expectations regarding the impact of inflation, including our expectation that higher interest rates and higher interest expense will continue for the remainder of 2023, and our ability to offset the effects of inflation and manage any increase in interest rates; projections of capital expenditures; our plans to continue to evolve our IT systems; our expectation that our gross margins will improve as our mix of services and solutions increase; our liquidity and the sufficiency of our capital resources, the availability of financing and our needs or plans relating thereto; our expectation that holders of our convertible senior notes (the “Notes”) will not convert their Notes in the near term; the effects of new accounting principles and expected dates of adoption; the effect of indemnification obligations; projections about the outcome of ongoing tax audits; our expectations regarding future tax rates; adequate provisions for and our positions and strategies with respect to ongoing and threatened litigation and expected outcomes; our ability to expand our client relationships; our expectations that pricing pressures in the IT industry will continue; our plans to use cash flow from operations for working capital, to pay down debt, repurchase shares of our common stock, to make capital expenditures, and fund acquisitions; our belief that our office facilities are adequate and that we will be able to extend our current leases or locate substitute facilities on satisfactory terms; our belief that we have adequate provisions for losses; our expectation that we will not incur interest payments under our inventory financing facilities; our expectations that future income will be sufficient to fully recover deferred tax assets; our exposure to off-balance sheet arrangements; statements of belief; and statements of assumptions underlying any of the foregoing. Forward-looking statements are identified by such words as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “may” and variations of such words and similar expressions and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. There can be no assurances that results described in forward-looking statements will be achieved, and actual results could differ materially from those suggested by the forward-looking statements. Some of the important factors that could cause our actual results to differ materially from those projected in any forward-looking statements include, but are not limited to, the following, which are discussed in “Risk Factors” in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and in "Risk Factors" in Part II, Item 1A of this report:

•actions of our competitors, including manufacturers and publishers of products we sell;

•our reliance on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and in the requirements year over year;

•our ability to keep pace with rapidly evolving technological advances and the evolving competitive marketplace;

•general economic conditions, economic uncertainties and changes in geopolitical conditions, including the possibility of a recession or as a result of the ongoing war between Russia and Ukraine;

•changes in the IT industry and/or rapid changes in technology;

•our ability to provide high quality services to our clients;

•accounts receivable risks, including increased credit loss experience or extended payment terms with our clients;

•our reliance on independent shipping companies;

•the risks associated with our international operations;

•supply constraints for products;

•the duration and severity of the coronavirus strain COVID-19 pandemic and its effects on our business, results of operations and financial condition, as well as the widespread outbreak of any other illnesses or communicable diseases;

INSIGHT ENTERPRISES, INC.

•natural disasters or other adverse occurrences;

•disruptions in our IT systems and voice and data networks;

•cyberattacks or breaches of data privacy and security regulations;

•intellectual property infringement claims and challenges to our registered trademarks and trade names;

•legal proceedings, client audits and failure to comply with laws and regulations;

•failure to comply with the terms and conditions of our commercial and public sector contracts;

•exposure to changes in, interpretations of, or enforcement trends related to tax rules and regulations;

•our potential to draw down a substantial amount of indebtedness;

•the conditional conversion feature of the Notes, which has been triggered, may adversely affect the Company’s financial condition and operating results;

•the Company is subject to counterparty risk with respect to certain hedge and warrant transactions entered into in connection with the issuance of the notes (the "Call Spread Transactions");

•increased debt and interest expense and the possibility of decreased availability of funds under our financing facilities;

•possible significant fluctuations in our future operating results as well as seasonality and variability in client demands;

•our dependence on certain key personnel and our ability to attract, train and retain skilled teammates;

•risks associated with the integration and operation of acquired businesses, including achievement of expected synergies and benefits; and

•future sales of the Company’s common stock or equity-linked securities in the public market could lower the market price for our common stock.

Additionally, there may be other risks described from time to time in the reports that we file with the Securities and Exchange Commission (the “SEC”). Any forward-looking statements in this report are made as of the date of this filing and should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. We assume no obligation to update, and, except as may be required by law, do not intend to update, any forward-looking statements. We do not endorse any projections regarding future performance that may be made by third parties.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

INSIGHT ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	195,954	$	163,637
Accounts receivable, net of allowance for doubtful accounts of $13,567 and $15,161, respectively	3,666,077		3,272,371
Inventories	248,188		265,154
Other current assets	229,556		199,506
Total current assets	4,339,775		3,900,668
Property and equipment, net of accumulated depreciation and amortization of $218,300 and $214,981, respectively	201,646		204,260
Goodwill	494,979		493,033
Intangible assets, net of accumulated amortization of $155,515 and $142,297, respectively	189,383		204,998
Other assets	316,548		309,622
	$	5,542,331	$	5,112,581
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable—trade	$	2,224,378	$	1,785,076
Accounts payable—inventory financing facilities	333,096		301,314
Accrued expenses and other current liabilities	408,645		433,789
Current portion of long-term debt	347,115		346,228
Total current liabilities	3,313,234		2,866,407
Long-term debt	337,950		291,672
Deferred income taxes	32,194		32,844
Other liabilities	289,998		283,590
	3,973,376		3,474,513
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 3,000 shares authorized; no shares issued	—		—
Common stock, $0.01 par value, 100,000 shares authorized; 32,568 shares at June 30, 2023 and 34,009 shares at December 31, 2022 issued and outstanding	326		340
Additional paid-in capital	318,078		327,872
Retained earnings	1,297,558		1,368,658
Accumulated other comprehensive loss – foreign currency translation adjustments	(47,007)		(58,802)
Total stockholders’ equity	1,568,955		1,638,068
	$	5,542,331	$	5,112,581

See accompanying notes to consolidated financial statements.

1

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net sales:
Products	$	1,945,609	$	2,349,242	$	3,913,254	$	4,659,529
Services	403,987		394,135		760,289		734,698
Total net sales	2,349,596		2,743,377		4,673,543		5,394,227
Costs of goods sold:
Products	1,749,448		2,135,895		3,522,177		4,243,104
Services	166,958		169,593		326,861		334,373
Total costs of goods sold	1,916,406		2,305,488		3,849,038		4,577,477
Gross profit:
Products	196,161		213,347		391,077		416,425
Services	237,029		224,542		433,428		400,325
Gross profit	433,190		437,889		824,505		816,750
Operating expenses:
Selling and administrative expenses	318,243		306,001		628,244		603,641
Severance and restructuring expenses, net	(3,770)		692		32		2,064
Acquisition and integration related expenses	106		1,640		157		1,640
Earnings from operations	118,611		129,556		196,072		209,405
Non-operating (income) expense:
Interest expense, net	9,405		9,383		19,753		17,451
Other (income) expense, net	(60)		312		692		(2,531)
Earnings before income taxes	109,266		119,861		175,627		194,485
Income tax expense	28,784		30,677		45,173		48,670
Net earnings	$	80,482	$	89,184	$	130,454	$	145,815
Net earnings per share:
Basic	$	2.43	$	2.54	$	3.91	$	4.16
Diluted	$	2.17	$	2.42	$	3.51	$	3.95
Shares used in per share calculations:
Basic	33,101		35,083		33,403		35,028
Diluted	37,039		36,821		37,123		36,901

See accompanying notes to consolidated financial statements.

2

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net earnings	$	80,482	$	89,184	$	130,454	$	145,815
Other comprehensive gain (loss), net of tax:
Foreign currency translation adjustments	7,189		(20,601)		11,795		(18,736)
Total comprehensive income	$	87,671	$	68,583	$	142,249	$	127,079

See accompanying notes to consolidated financial statements.

3

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
	Shares	Par Value		Shares	Amount
Balances at March 31, 2023	33,261	$	333	—	$	—	$	317,283	$	(54,196)	$	1,310,178	$	1,573,598
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes	27	—		—	—		(1,083)		—		—		(1,083)
Stock-based compensation expense	—	—		—	—		9,767		—		—		9,767
Repurchase of treasury stock	—	—		(720)	(99,980)		—		—		—		(99,980)
Retirement of treasury stock	(720)	(7)		720	99,980		(6,870)		—		(93,102)		1
Excise tax on stock repurchases	—	—		—	—		(1,019)		—		—		(1,019)
Foreign currency translation adjustments, net of tax	—	—		—	—		—		7,189		—		7,189
Net earnings	—	—		—	—		—		—		80,482		80,482
Balances at June 30, 2023	32,568	$	326	—	$	—	$	318,078	$	(47,007)	$	1,297,558	$	1,568,955
Balances at March 31, 2022	35,072	$	351	—	$	—	$	321,959	$	(25,229)	$	1,242,110	$	1,539,191
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes	21	—		—	—		(104)		—		—		(104)
Stock-based compensation expense	—	—		—	—		5,427		—		—		5,427
Foreign currency translation adjustments, net of tax	—	—		—	—		—		(20,601)		—		(20,601)
Net earnings	—	—		—	—		—		—		89,184		89,184
Balances at June 30, 2022	35,093	$	351	—	$	—	$	327,282	$	(45,830)	$	1,331,294	$	1,613,097
Balances at December 31, 2022	34,009	$	340	—	$	—	$	327,872	$	(58,802)	$	1,368,658	$	1,638,068
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes	193	2		—	—		(9,007)		—		—		(9,005)
Stock-based compensation expense	—	—		—	—		16,663		—		—		16,663
Repurchase of treasury stock	—	—		(1,634)	(217,108)		—		—		—		(217,108)
Retirement of treasury stock	(1,634)	(16)		1,634	217,108		(15,537)		—		(201,554)		1
Excise tax on stock repurchases	—	—		—	—		(1,913)		—		—		(1,913)
Foreign currency translation adjustments, net of tax	—	—		—	—		—		11,795		—		11,795
Net earnings	—	—		—	—		—				130,454		130,454
Balances at June 30, 2023	32,568	$	326	—	$	—	$	318,078	$	(47,007)	$	1,297,558	$	1,568,955
Balances at December 31, 2021	34,897	$	349	—	$	—	$	368,282	$	(27,094)	$	1,167,690	$	1,509,227
Cumulative effect of accounting change	—	—		—	—		(44,731)		—		17,789		(26,942)
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes	196	2		—	—		(6,703)		—		—		(6,701)
Stock-based compensation expense	—	—		—	—		10,434		—		—		10,434
Foreign currency translation adjustments, net of tax	—	—		—	—		—		(18,736)		—		(18,736)
Net earnings	—	—		—	—		—		—		145,815		145,815
Balances at June 30, 2022	35,093	$	351	—	$	—	$	327,282	$	(45,830)	$	1,331,294	$	1,613,097

See accompanying notes to consolidated financial statements.

4

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net earnings	$	130,454	$	145,815
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	29,148		26,769
Provision for losses on accounts receivable	2,585		2,743
Non-cash stock-based compensation	16,663		10,434
Deferred income taxes	(1,231)		(575)
Amortization of debt issuance costs	2,430		3,268
Other adjustments	(2,801)		1,810
Changes in assets and liabilities:
Increase in accounts receivable	(368,612)		(734,971)
Decrease (increase) in inventories	14,596		(56,811)
Increase in other assets	(34,877)		(53,802)
Increase in accounts payable	420,349		223,198
Decrease in accrued expenses and other liabilities	(20,744)		(9,875)
Net cash provided by (used in) operating activities:	187,960		(441,997)
Cash flows from investing activities:
Proceeds from sale of assets	15,515		1,350
Purchases of property and equipment	(13,202)		(47,256)
Acquisitions, net of cash and cash equivalents acquired	—		(68,248)
Net cash provided by (used in) investing activities:	2,313		(114,154)
Cash flows from financing activities:
Borrowings on ABL revolving credit facility	2,259,356		2,592,440
Repayments on ABL revolving credit facility	(2,214,246)		(1,924,965)
Net borrowings (repayments) under inventory financing facilities	30,848		(62,119)
Repurchases of common stock	(217,108)		—
Earn out payments	(10,748)		—
Other payments	(9,161)		(6,938)
Net cash (used in) provided by financing activities:	(161,059)		598,418
Foreign currency exchange effect on cash, cash equivalents and restricted cash balances	3,050		(8,606)
Increase in cash, cash equivalents and restricted cash	32,264		33,661
Cash, cash equivalents and restricted cash at beginning of period	165,718		105,977
Cash, cash equivalents and restricted cash at end of period	$	197,982	$	139,638

See accompanying notes to consolidated financial statements.

5

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.    Basis of Presentation and Recently Issued Accounting Standards

We help our clients accelerate their digital journey to modernize their business and maximize the value of technology. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 35 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions at every opportunity. Our company is organized in the following three operating segments, which are primarily defined by their related geographies:

Operating Segment	Geography
North America	United States and Canada
EMEA	Europe, Middle East and Africa
APAC	Asia-Pacific

Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments are largely software, certain software-related services and cloud solutions.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly our financial position as of June 30, 2023 and our results of operations for the three and six months ended June 30, 2023 and 2022 and cash flows for the six months ended June 30, 2023 and 2022. The consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated balance sheet at such date. The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with the rules and regulations promulgated by the SEC and consequently do not include all of the disclosures normally required by United States generally accepted accounting principles (“GAAP”).

The results of operations for interim periods are not necessarily indicative of results for the full year, due in part to the seasonal nature of our business. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the related notes thereto, in our Annual Report on Form 10-K for the year ended December 31, 2022.

The consolidated financial statements include the accounts of Insight Enterprises, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Additionally, these estimates and assumptions affect the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to sales recognition, anticipated achievement levels under partner funding programs, assumptions related to stock-based compensation valuation, allowances for doubtful accounts, valuation of inventories, litigation-related obligations, valuation allowances for deferred tax assets and impairment of long-lived assets, including purchased intangibles and goodwill, if indicators of potential impairment exist.

6

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Recently Issued Accounting Standards

In September 2022, the Financial Accounting Standards Board ("FASB") issued ASU No. 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50)”. This standard is intended to address requests from stakeholders for information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity, and cash flows. The guidance was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on roll-forward information requirement, which is effective for fiscal years beginning after December 15, 2023. The Company adopted this standard effective January 1, 2023, with the exception of the roll-forward information requirement. The adoption did not have a material effect on the Company's disclosures.

There have been no other material changes in or additions to the recently issued accounting standards as previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022 that affect or may affect our current financial statements.

2.    Receivables, Contract Liabilities and Performance Obligations

The following table provides information about receivables and contract liabilities as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Current receivables, which are included in “Accounts receivable, net”	$	3,666,077	$	3,272,371
Non-current receivables, which are included in “Other assets”	163,567		161,837
Contract liabilities, which are included in “Accrued expenses and other current liabilities” and “Other liabilities”	113,030		102,057

Changes in the contract liabilities balances during the six months ended June 30, 2023 are as follows (in thousands):

	Increase (Decrease)
	Contract Liabilities
Balances at December 31, 2022	$	102,057
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied	(43,949)
Cash received in advance and not recognized as revenue	54,922
Balances at June 30, 2023	$	113,030

During the six months ended June 30, 2022, the Company recognized revenue of $55,380,000 related to its contract liabilities.

7

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table includes estimated net sales related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2023 that are expected to be recognized in the future (in thousands):

	Services
Remainder of 2023	$	65,593
2024	42,352
2025	18,051
2026 and thereafter	8,925
Total remaining performance obligations	$	134,921

With the exception of remaining performance obligations associated with our OneCall Support Services contracts which are included in the table above regardless of original duration, remaining performance obligations that have original expected durations of one year or less are not included in the table above.  Amounts not included in the table above have an average original expected duration of nine months. Additionally, for our time and material services contracts, whereby we have the right to consideration from a client in an amount that corresponds directly with the value to the client of our performance completed to date, we recognized revenue in the amount to which we have a right to invoice as of June 30, 2023 and do not disclose information about related remaining performance obligations in the table above. Our time and material contracts have an average expected duration of 22 months.

The majority of our backlog historically has been and continues to be open cancellable purchase orders. We do not believe that backlog as of any particular date is predictive of future results, therefore we do not include performance obligations under open cancellable purchase orders, which do not qualify for revenue recognition, in the table above.

3.    Assets Held for Sale

During the three and six months ended June 30, 2023, we completed the sale of our properties in Montreal, Canada and Sheffield, United Kingdom for total net proceeds of approximately $15,476,000. We recognized a net gain on sale of approximately $7,623,000, reported in severance and restructuring expenses, net. During the three and six months ended June 30, 2022, we had no assets held for sale.

8

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

4.    Net Earnings Per Share

Basic earnings per share ("EPS") is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock units (“RSUs”) and certain shares underlying the Notes and the warrants relating to the Call Spread Transactions. A reconciliation of the denominators of the basic and diluted EPS calculations follows (in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Numerator:
Net earnings	$	80,482	$	89,184	$	130,454	$	145,815
Denominator:
Weighted average shares used to compute basic EPS	33,101		35,083		33,403		35,028
Dilutive potential common shares due to dilutive RSUs, net of tax effect	234		199		275		265
Dilutive potential common shares due to the Notes	2,516		1,539		2,413		1,608
Dilutive potential common shares due to the Warrants	1,188		—		1,032		—
Weighted average shares used to compute diluted EPS	37,039		36,821		37,123		36,901
Net earnings per share:
Basic	$	2.43	$	2.54	$	3.91	$	4.16
Diluted	$	2.17	$	2.42	$	3.51	$	3.95

For the three and six months ended June 30, 2023, 67,000 and 76,000, respectively, of our RSUs were excluded from the diluted EPS calculations because their inclusion would have been anti-dilutive. For the three and six months ended June 30, 2022, 38,000 and 26,000, respectively, of our RSUs were excluded from the diluted EPS calculations and certain potential outstanding shares from the warrants related to the Call Spread Transactions were excluded from the diluted EPS calculations because their inclusion would have been anti-dilutive.

9

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

5.    Debt, Inventory Financing Facilities, Finance Leases and Other Financing Obligations

Debt

Our long-term debt consists of the following (in thousands):

	June 30, 2023		December 31, 2022
ABL revolving credit facility	$	337,913	$	291,599
Convertible senior notes due 2026	347,094		346,199
Finance leases and other financing obligations	58		102
Total	685,065		637,900
Less: current portion of long-term debt	(347,115)		(346,228)
Long-term debt	$	337,950	$	291,672

On July 22, 2022, we entered into the Third Amendment to the Credit Agreement (as amended, the "credit agreement") to modify our senior secured revolving credit facility (the “ABL facility”), increasing the maximum borrowing amount from $1,200,000,000 to $1,800,000,000, including a maximum borrowing capacity that could be used for borrowing in certain foreign currencies of $350,000,000 and extending the maturity date. From time to time and at our option, we may request to increase the aggregate amount available for borrowing under the ABL facility by up to an aggregate of the U.S. dollar equivalent of $750,000,000, subject to customary conditions, including receipt of commitments from lenders. The ABL facility is guaranteed by certain of our material subsidiaries and is secured by a lien on certain of our assets and certain of each other borrower’s and each guarantor’s assets. The ABL facility now provides for an uncommitted first-in, last-out revolving facility in an aggregate amount of up to $100,000,000. The interest rates applicable to borrowings under the ABL facility are based on the average aggregate excess availability under the ABL facility as set forth on a pricing grid in the credit agreement. The ABL facility now matures on July 22, 2027. As of June 30, 2023, eligible accounts receivable and inventory permitted availability of the full $1,800,000,000 facility amount, of which $337,913,000 was outstanding.

The ABL facility contains customary affirmative and negative covenants and events of default. If a default occurs (subject to customary grace periods and materiality thresholds) under the credit agreement, certain actions may be taken, including, but not limited to, possible termination of commitments and required payment of all outstanding principal amounts plus accrued interest and fees payable under the credit agreement.

Convertible Senior Notes due 2025

In August 2019, we issued $350,000,000 aggregate principal amount of Notes that mature on February 15, 2025. The Notes bear interest at an annual rate of 0.75% payable semiannually, in arrears, on February 15th and August 15th of each year. The Notes are general unsecured obligations of Insight and are guaranteed on a senior unsecured basis by Insight Direct USA, Inc., a wholly owned subsidiary of Insight.

Holders of the Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding June 15, 2024, under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day (the “market price trigger”); (2) during the five business day period after

10

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

any five days consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call any or all of the Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after June 15, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, the holders may convert their notes at any time, regardless of the foregoing circumstances.

The Notes exceeded the market price trigger of $88.82 in the second quarter of 2023 and as such, the Notes are convertible at the option of the holders through September 30, 2023. All of the Notes remain outstanding at June 30, 2023. The notes are convertible at the option of the holders at June 30, 2023 and, if converted, we are required to settle the principal amount of the Notes in cash. As such, the Notes balance net of unamortized debt issuance costs are classified as a current liability. If the Notes continue to exceed the market price trigger in future periods, they will remain convertible at the option of the holders, and the principal amount will continue to be classified as current.

Upon conversion, we will pay cash equal to the principal amount of the Notes, plus shares of our common stock for any additional amounts due. The conversion rate will initially be 14.6376 shares of common stock per $1,000 principal amount of the Notes (equivalent to an initial conversion price of approximately $68.32 per share of common stock). The conversion rate is subject to change in certain circumstances and will not be adjusted for any accrued and unpaid interest. In addition, following certain events that occur prior to the maturity date or following our issuance of a notice of redemption, the conversion rate is subject to an increase for a holder who elects to convert their Notes in connection with those events or during the related redemption period in certain circumstances.

If we undergo a fundamental change, the holders may require us to repurchase for cash all or any portion of their notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of June 30, 2023, none of the criteria for a fundamental change or a conversion rate adjustment had been met.

The maximum number of shares issuable upon conversion, including the effect of a fundamental change and subject to other conversion rate adjustments, would be 6,788,208.

The Notes are subject to certain customary events of default and acceleration clauses. As of June 30, 2023, no such events have occurred.

The Notes consist of the following balances reported within the consolidated balance sheets (in thousands):

	June 30, 2023		December 31, 2022
Liability:
Principal	$	350,000	$	350,000
Less: debt issuance costs, net of accumulated amortization	(2,906)		(3,801)
Net carrying amount	$	347,094	$	346,199

In January 2022, we filed an irrevocable settlement election notice with the note holders to inform them of our election to settle the principal amount of the Notes in cash. As a result of this election, at period ends where the market price, or other conversion triggers are met, the Notes will be classified in our consolidated balance sheet as current.

11

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The remaining life of the debt issuance cost accretion is approximately 1.62 years. The effective interest rate on the principal of the Notes is 0.75%.

Interest expense resulting from the Notes reported within the consolidated statement of operations for the three and six months ended June 30, 2023 and 2022 is made up of contractual coupon interest and amortization of debt issuance costs.

Convertible Note Hedge and Warrant Transaction

In connection and concurrent with the issuance of the Notes, we entered into the Call Spread Transactions with respect to the Company’s common stock.

The convertible note hedge consists of an option to purchase up to 5,123,160 common stock shares at a price of $68.32 per share. The hedge expires on February 15, 2025 and can only be concurrently executed upon the conversion of the Notes. We paid approximately $66,325,000 for the convertible note hedge transaction.

Additionally, we sold warrants to purchase 5,123,160 shares of common stock at a price of $103.12 per share. The warrants expire on May 15, 2025 and can only be exercised at maturity. The Company received aggregate proceeds of approximately $34,440,000 for the sale of the warrants.

The Call Spread Transactions have no effect on the terms of the Notes and reduce potential dilution by effectively increasing the initial conversion price of the Notes to $103.12 per share of the Company’s common stock.

Inventory Financing Facilities

We have an unsecured inventory financing facility with MUFG Bank Ltd (“MUFG”) for $280,000,000. During 2022, we increased our maximum availability under our unsecured inventory financing facility with PNC Bank, N.A. (“PNC”) from $300,000,000 to $375,000,000, including the $25,000,000 facility in Canada (the "Canada facility"). We also increased our unsecured inventory financing facility with Wells Fargo in EMEA (the "EMEA facility") to $50,000,000. The inventory financing facilities will remain in effect until they are terminated by any of the parties. As of June 30, 2023, the Company transitioned the reference rate for invoices issued in U.S. Dollars under the PNC facility from LIBOR to the Term Secured Overnight Financing Rate ("Term SOFR") benchmark provisions. If balances are not paid within stated vendor terms (typically 60 days), they will accrue interest at prime plus 2.00% on the MUFG facility, Canadian Dollar Offered Rate plus 4.50% on the Canada facility and Term SOFR, EURIBOR, or SONIA, as applicable, plus 4.50% and 0.25% on the PNC (other than the Canada facility) and EMEA facilities, respectively. Amounts outstanding under these facilities are classified separately as accounts payable – inventory financing facilities in the accompanying consolidated balance sheets and within cash flows from financing activities in the accompanying consolidated statements of cash flows.

As of June 30, 2023, our combined inventory financing facilities had a total maximum capacity of $705,000,000, of which $333,096,000 was outstanding.

12

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

6.    Income Taxes

Our effective tax rates for the three and six months ended June 30, 2023 were 26.3% and 25.7%, respectively. Our effective tax rates were higher than the United States federal statutory rate of 21.0% due primarily to state income taxes and higher taxes on earnings in foreign jurisdictions, partially offset by excess tax benefits on the settlement of employee share-based compensation and tax benefits related to research and development activities.

Our effective tax rates for the three and six months ended June 30, 2022 were 25.6% and 25.0%, respectively. Our effective tax rates were higher than the United States federal statutory rate of 21.0% due primarily to state income taxes and higher taxes on earnings in foreign jurisdictions, partially offset by tax benefits related to research and development activities.

As of June 30, 2023 and December 31, 2022, we had approximately $13,268,000 and $14,814,000, respectively, of unrecognized tax benefits. Of these amounts, approximately $1,667,000 and $1,642,000, respectively, related to accrued interest. During the three months ended June 30, 2023, we reduced our unrecognized tax benefits by $3,250,000 as a result of a recently concluded IRS audit. There was no net effect on income tax expense or our effective tax rate as a result of the audit. However in the future, if recognized, the remaining liability associated with uncertain tax positions could affect our effective tax rate. We do not believe there will be any changes to our unrecognized tax benefits over the next 12 months that would have a material effect on our effective tax rate.

We are currently under audit in various jurisdictions for tax years 2015 through 2020. Although the timing of the resolutions and/or closures of audits is highly uncertain, it is reasonably possible that the examination phase of these audits may be concluded within the next 12 months, which could increase or decrease the balance of our gross unrecognized tax benefits. However, based on the status of the various examinations in multiple jurisdictions, an estimate of the range of reasonably possible outcomes cannot be made at this time, but the estimated effect on our income tax expense and net earnings is not expected to be significant.

7.    Share Repurchase Program

On September 19, 2022, we announced that our Board of Directors had authorized the repurchase of up to $300,000,000 of our common stock, including $50,000,000 that remained available from our previous authorization. On May 18, 2023, we announced that our Board of Directors authorized the repurchase of up to $300,000,000 of our common stock, including $100,000,000 that remained available from our previous authorization. As of June 30, 2023, approximately $200,020,373 remained available for repurchases under our share repurchase plan. Our share repurchases may be made on the open market, subject to Rule 10b-18 or in privately negotiated transactions, through block trades, through 10b5-1 plans or otherwise, at management’s discretion. The amount of shares purchased and the timing of the purchases will be based on market conditions, working capital requirements, general business conditions and other factors. We intend to retire the repurchased shares.

During the three months ended June 30, 2023, we repurchased 720,175 shares of our common stock on the open market at a total cost of $99,980,000 (an average price of $138.83 per share). During the three months ended June 30, 2022, we did not repurchase any shares of our common stock.

During the six months ended June 30, 2023, we repurchased 1,633,620 shares of our common stock on the open market at a total cost of $217,108,000 (an average price of $132.90 per share). During the six months ended June 30, 2022, we did not repurchase any shares of our common stock.

13

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

8.    Commitments and Contingencies

Contractual

In the ordinary course of business, we issue performance bonds to secure our performance under certain contracts or state tax requirements. As of June 30, 2023, we had approximately $27,984,413 of performance bonds outstanding. These bonds are issued on our behalf by a surety company on an unsecured basis; however, if the surety company is ever required to pay out under the bonds, we have contractually agreed to reimburse the surety company.

Management believes that payments, if any, related to these performance bonds are not probable at June 30, 2023. Accordingly, we have not accrued any liabilities related to such performance bonds in our consolidated financial statements.

Employment Contracts and Severance Plans

We have employment contracts with, and severance plans covering, certain officers and management teammates under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in control. In addition, vesting of outstanding nonvested RSUs would accelerate following a change in control. If severance payments under the current employment agreements or plan payments were to become payable, the severance payments would generally range from three to twenty-four months of salary.

Indemnifications

From time to time, in the ordinary course of business, we enter into contractual arrangements under which we agree to indemnify either our clients or third-party service providers from certain losses incurred relating to services performed on our behalf or for losses arising from defined events, which may include litigation or claims relating to past performance. These arrangements include, but are not limited to, the indemnification of our clients for certain claims arising out of our performance under our sales contracts, the indemnification of our landlords for certain claims arising from our use of leased facilities and the indemnification of the lenders that provide our credit facilities for certain claims arising from their extension of credit to us. Such indemnification obligations may not be subject to maximum loss clauses.

Management believes that payments, if any, related to these indemnifications are not probable at June 30, 2023. Accordingly, we have not accrued any liabilities related to such indemnifications in our consolidated financial statements.

We have entered into separate indemnification agreements with certain of our executive officers and with each of our directors. These agreements require us, among other requirements, to indemnify such officers and directors against expenses (including attorneys’ fees), judgments and settlements incurred by such individual in connection with any action arising out of such individual’s status or service as our executive officer or director (subject to exceptions such as where the individual failed to act in good faith or in a manner the individual reasonably believed to be in, or not opposed to, the best interests of the Company) and to advance expenses incurred by such individual with respect to which such individual may be entitled to indemnification by us. There are no pending legal proceedings that involve the indemnification of any of the Company’s directors or officers.

Contingencies Related to Third-Party Review

From time to time, we are subject to potential claims and assessments from third parties. We are also subject to various governmental, client and partner audits. We continually assess whether or not such claims have merit and warrant accrual. Where appropriate, we

14

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

accrue estimates of anticipated liabilities in the consolidated financial statements. Such estimates are subject to change and may affect our results of operations and our cash flows.

Legal Proceedings

From time to time, we are party to various legal proceedings incidental to the business, including preference payment claims asserted in client bankruptcy proceedings, indemnification claims, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, employment claims, claims of alleged non-compliance with contract provisions and claims related to alleged violations of laws and regulations. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determine if accruals are required. If accruals are not required, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made. Although litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the work required pursuant to any legal proceedings or the resolution of any legal proceedings during such period. Legal expenses related to defense of any legal proceeding or the negotiations, settlements, rulings and advice of outside legal counsel in connection with any legal proceedings are expensed as incurred.

In connection with the acquisition of PCM, the Company assumed responsibility for various litigation matters related to PCM’s acquisition of certain assets of En Pointe Technologies in 2015 (the “PCM Earnout Litigation”). The seller of En Pointe Technologies and related entities providing various post-closing support functions to PCM asserted claims regarding the sufficiency of earnout payments paid by PCM under the asset purchase agreement and the unwinding of the support functions post-closing. PCM rejected and vigorously responded to those claims and pursued various counterclaims. The PCM Earnout Litigation was being heard by multiple courts and arbitrators in several different jurisdictions including California, Delaware and Pakistan. In May 2023, the Company settled all claims related to the PCM Earnout Litigation and the parties began the process of dismissing each of the related claims and counterclaims in the various courts and jurisdictions. On July 14, 2023, the Company funded an escrow pursuant to which $10,550,000 would be paid to the plaintiffs over a period of 36 months beginning after all of the cases have been dismissed. The full amount of the settlement payment had been previously reserved. The Company is not involved in any pending or threatened legal proceedings, including the PCM Earnout Litigation, that it believes would reasonably be expected to have a material adverse effect on its business, financial condition or results of operations.

15

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

9.    Segment Information

We operate in three reportable geographic operating segments: North America; EMEA; and APAC. Our offerings in North America and certain countries in EMEA and APAC include IT hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments are largely software, certain software-related services and cloud solutions.

In the following table, revenue is disaggregated by our reportable operating segments, which are primarily defined by their related geographies, as well as by major product offering, by major client group and by recognition on either a gross basis as a principal in the arrangement, or on a net basis as an agent, for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30, 2023
	North America		EMEA		APAC		Consolidated
Major Offerings
Hardware	$	1,165,127	$	132,220	$	12,926	$	1,310,273
Software	417,327		196,060		21,949		635,336
Services	314,712		63,446		25,829		403,987
	$	1,897,166	$	391,726	$	60,704	$	2,349,596
Major Client Groups
Large Enterprise / Corporate	$	1,321,876	$	289,519	$	26,849	$	1,638,244
Commercial	359,750		3,609		18,138		381,497
Public Sector	215,540		98,598		15,717		329,855
	$	1,897,166	$	391,726	$	60,704	$	2,349,596
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)	$	1,767,933	$	352,085	$	50,630	$	2,170,648
Net revenue recognition (Agent)	129,233		39,641		10,074		178,948
	$	1,897,166	$	391,726	$	60,704	$	2,349,596

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

	Three Months Ended June 30, 2022
	North America		EMEA		APAC		Consolidated
Major Offerings
Hardware	$	1,559,474	$	155,384	$	16,258	$	1,731,116
Software	377,007		212,997		28,122		618,126
Services	310,963		57,950		25,222		394,135
	$	2,247,444	$	426,331	$	69,602	$	2,743,377
Major Client Groups
Large Enterprise / Corporate	$	1,597,988	$	306,389	$	31,430	$	1,935,807
Commercial	448,974		19,312		17,452		485,738
Public Sector	200,482		100,630		20,720		321,832
	$	2,247,444	$	426,331	$	69,602	$	2,743,377
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)	$	2,126,656	$	389,421	$	58,927	$	2,575,004
Net revenue recognition (Agent)	120,788		36,910		10,675		168,373
	$	2,247,444	$	426,331	$	69,602	$	2,743,377

	Six Months Ended June 30, 2023
	North America		EMEA		APAC		Consolidated
Major Offerings
Hardware	$	2,320,766	$	295,110	$	23,242	$	2,639,118
Software	812,124		410,621		51,391		1,274,136
Services	598,240		112,999		49,050		760,289
	$	3,731,130	$	818,730	$	123,683	$	4,673,543
Major Client Groups
Large Enterprise / Corporate	$	2,615,409	$	598,582	$	48,251	$	3,262,242
Commercial	731,775		8,399		35,163		775,337
Public Sector	383,946		211,749		40,269		635,964
	$	3,731,130	$	818,730	$	123,683	$	4,673,543
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)	$	3,493,110	$	753,428	$	104,514	$	4,351,052
Net revenue recognition (Agent)	238,020		65,302		19,169		322,491
	$	3,731,130	$	818,730	$	123,683	$	4,673,543

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

	Six Months Ended June 30, 2022
	North America		EMEA		APAC		Consolidated
Major Offerings
Hardware	$	3,010,793	$	366,007	$	27,904	$	3,404,704
Software	718,554		485,399		50,872		1,254,825
Services	582,602		106,358		45,738		734,698
	$	4,311,949	$	957,764	$	124,514	$	5,394,227
Major Client Groups
Large Enterprise / Corporate	$	3,036,717	$	660,293	$	52,859	$	3,749,869
Commercial	890,133		37,733		32,111		959,977
Public Sector	385,099		259,738		39,544		684,381
	$	4,311,949	$	957,764	$	124,514	$	5,394,227
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)	$	4,097,577	$	896,283	$	105,945	$	5,099,805
Net revenue recognition (Agent)	214,372		61,481		18,569		294,422
	$	4,311,949	$	957,764	$	124,514	$	5,394,227

All significant intercompany transactions are eliminated upon consolidation, and there are no differences between the accounting policies used to measure profit and loss for our segments or on a consolidated basis. Net sales are defined as net sales to external clients. None of our clients exceeded ten percent of consolidated net sales for the three and six months ended June 30, 2023 or 2022.

A portion of our operating segments’ selling and administrative expenses arise from shared services and infrastructure that we have historically provided to them in order to realize economies of scale and to use resources efficiently. These expenses, collectively identified as corporate charges, include senior management expenses, internal audit, legal, tax, insurance services, treasury and other corporate infrastructure expenses. Charges are allocated to our operating segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the operating segments.

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following tables present our results of operations by reportable operating segment for the periods indicated (in thousands):

	Three Months Ended June 30, 2023
	North America		EMEA		APAC		Consolidated
Net sales:
Products	$	1,582,454	$	328,280	$	34,875	$	1,945,609
Services	314,712		63,446		25,829		403,987
Total net sales	1,897,166		391,726		60,704		2,349,596
Costs of goods sold:
Products	1,416,637		301,240		31,571		1,749,448
Services	137,387		18,439		11,132		166,958
Total costs of goods sold	1,554,024		319,679		42,703		1,916,406
Gross profit	343,142		72,047		18,001		433,190
Operating expenses:
Selling and administrative expenses	252,285		54,913		11,045		318,243
Severance and restructuring expenses	(4,685)		867		48		(3,770)
Acquisition and integration related expenses	106		—		—		106
Earnings from operations	$	95,436	$	16,267	$	6,908	$	118,611

	Three Months Ended June 30, 2022
	North America		EMEA		APAC		Consolidated
Net sales:
Products	$	1,936,481	$	368,381	$	44,380	$	2,349,242
Services	310,963		57,950		25,222		394,135
Total net sales	2,247,444		426,331		69,602		2,743,377
Costs of goods sold:
Products	1,754,799		340,177		40,919		2,135,895
Services	142,379		16,607		10,607		169,593
Total costs of goods sold	1,897,178		356,784		51,526		2,305,488
Gross profit	350,266		69,547		18,076		437,889
Operating expenses:
Selling and administrative expenses	243,868		51,372		10,761		306,001
Severance and restructuring expenses	485		207		—		692
Acquisition and integration related expenses	$	1,640	$	—	$	—	$	1,640
Earnings from operations	$	104,273	$	17,968	$	7,315	$	129,556

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

	Six Months Ended June 30, 2023
	North America		EMEA		APAC		Consolidated
Net sales:
Products	$	3,132,890	$	705,731	$	74,633	$	3,913,254
Services	598,240		112,999		49,050		760,289
Total net sales	3,731,130		818,730		123,683		4,673,543
Costs of goods sold:
Products	2,804,599		648,873		68,705		3,522,177
Services	268,245		36,922		21,694		326,861
Total costs of goods sold	3,072,844		685,795		90,399		3,849,038
Gross profit	658,286		132,935		33,284		824,505
Operating expenses:
Selling and administrative expenses	501,105		104,818		22,321		628,244
Severance and restructuring expenses	(1,598)		1,569		61		32
Acquisition and integration related expenses	157		—		—		157
Earnings from operations	$	158,622	$	26,548	$	10,902	$	196,072

	Six Months Ended June 30, 2022
	North America		EMEA		APAC		Consolidated
Net sales:
Products	$	3,729,347	$	851,406	$	78,776	$	4,659,529
Services	582,602		106,358		45,738		734,698
Total net sales	4,311,949		957,764		124,514		5,394,227
Costs of goods sold:
Products	3,380,574		789,809		72,721		4,243,104
Services	281,025		33,638		19,710		334,373
Total costs of goods sold	3,661,599		823,447		92,431		4,577,477
Gross profit	650,350		134,317		32,083		816,750
Operating expenses:
Selling and administrative expenses	479,088		103,698		20,855		603,641
Severance and restructuring expenses	789		1,275		—		2,064
Acquisition and integration related expenses	1,640		—		—		1,640
Earnings from operations	$	168,833	$	29,344	$	11,228	$	209,405

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following is a summary of our total assets by reportable operating segment (in thousands):

	June 30, 2023		December 31, 2022
North America	$	5,418,822	$	5,219,480
EMEA	1,216,362		939,327
APAC	209,790		153,232
Corporate assets and intercompany eliminations, net	(1,302,643)		(1,199,458)
Total assets	$	5,542,331	$	5,112,581

We recorded the following pre-tax amounts, by reportable operating segment, for depreciation and amortization in the accompanying consolidated financial statements (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Depreciation and amortization of property and equipment:
North America	$	5,495	$	4,729	$	11,143	$	9,149
EMEA	603		668		1,199		1,475
APAC	102		154		211		316
	6,200		5,551		12,553		10,940
Amortization of intangible assets:
North America	7,766		7,356		15,551		14,704
EMEA	408		430		820		887
APAC	111		118		224		238
	8,285		7,904		16,595		15,829
Total	$	14,485	$