Insight seeing ‘good momentum’ in hardware and AI spend says CEO despite Q1 shortfall

Joyce Mullen maintains confidence in the long-term drivers of the industry and believes volatile market dynamics represent an opportunity for the solutions integrator

Revenues were slow for Insight Enterprises in Q1, but hardware and AI spend is seeing good momentum.

Revenue fell short of expectations, dropping 12 per cent to $2.1bn for the quarter ended March 31, 2025.

Following the earnings announcement, Insight’s stock fell by 2.55 per cent in pre-market trading.

The stock’s decline reflects investor concerns over the revenue miss and broader market volatility.

"While the current macro environment is uncertain, we remain confident in the long-term drivers of our industry,” said Joyce Mullen, CEO of Insight Enterprises (pictured).

"We’re seeing good momentum in hardware spend. We’re seeing good momentum in AI interest and spend.

“We were pleased with the continued hardware momentum led by commercial and corporate demand and our gross margin expansion. Although gross profit was slightly below our expectations primarily due product related services performance, effective expense management allowed us to achieve our profitability target.”

Other parts of the NASDAQ-listed firm’s business saw growth in Q1, Mullen revealed in an earnings call.

Hardware revenue met expectations with good performance in servers and storage along with continued recovery in devices.

Success in cloud also reflected Insight’s predictions, while underlying SaaS and Infrastructure as a Service gross profit grew 17 per cent, offset by partner programme changes.

On-prem software revenue was down 32 per cent due to a large transaction in Q1 of last year, making the comparison difficult.

Insight Core Services revenue dipped two per cent, below Insight’s expectations as large enterprise clients delayed services projects due to lack of market clarity.

Since the group’s last earnings call, Mullen said the outlook for the macro environment has deteriorated, resulting in increased volatility and uncertainty.

However, she added that volatile market dynamics represent an opportunity for Insight, given its “low share position in a large and fragmented market”.

“For example, as clients look with increased skepticism at complex contracts and entrenched service partners, we take a different approach,” she said.

“We provide targeted solutions to specific business problems, deliver results fast, and earn the right to do more. This approach resonates with clients. For the year, our primary focus is accelerating profitable growth.”

Full year guidance

For the full year 2025, Insight expects adjusted diluted earnings per share to be between $9.70 and $10.10.

The services provider also predicts it will deliver gross profit growth in the low single-digits and expects gross margin will continue to be approximately 20 per cent.