Insight's share price surges following results announcement

Insight's share price has rocketed after posting its Q3 results.

The US reseller reported a year on year sales increase of one per cent, up to $1.9bn.

EMEA sales however fell four per cent to $341m.

Insight CEO Ken Lamneck picked out the reseller's growth in services as a highlight of the quarter.

Services sales rocketed 13 per cent to $275m, but still represent a relatively small portion of total revenue.

"The demand environment continues to be challenged but we focused on answering our clients' most pressing IT needs while helping many to plan for investments needed to support the businesses as the economy recovers," he said.

"During the third quarter, we saw a double-digit growth in services and cloud solutions which improved gross margins to a new third quarter record."

Lamneck said that he's confident that second lockdowns across Europe will not have too much of a detrimental effect on business.

In EMEA product sales for Q3 fell six per cent year on year to just under $304m, while services climbed 19 per cent to $37.3m.

"[some countries are] pretty much going back to, I think, the way the world was for them in April so it's not like we haven't seen this before and they weathered those storms pretty well back in the spring," he said.

"We're not calling for any significant change in what we're seeing there. I think they're just going back to the environment where they were, but I still believe they're all now much more functional than we were in April in regard to how we conduct business.

"So, we're not projecting or anticipating any significant decline there at least at this stage…"

The CEO said that devices have been the strong growth drivers over recent quarters, with emerging tech projects taking a back seat.

He highlighted Chromebooks especially as seeing stellar growth, particularly in the education space.

"It's clear that devices is what's driving the growth in the industry right now from a channel point of view," he added.

"There will be positive growth in devices this year and then, of course, there will be declines in server storage, networking and the other categories from a hardware perspective.

"We're still, of course, very committed to investing in the intelligent edge, the IoT areas of the business. I think that's been a little bit slowed down by COVID."

Shareholders were reassured by Insight's optimistic forecasts for Q4, at a time when some businesses had declined to offer future guidance.

Insight said that some of its hardware bookings were not realised in Q3 and so will carry through into its current quarter.

It expects Q4 sales to rise sequentially, driven in particular by the public sector.

Insight's share price rose 10 per cent yesterday, taking its valuation to $2.15bn.