IT solutions integrator Insight Enterprises (NASDAQ:NSIT) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 3.2% year on year to $2.09 billion. Its non-GAAP profit of $2.45 per share was 0.7% below analysts’ consensus estimates.
Is now the time to buy Insight Enterprises? Find out by accessing our full research report, it’s free.
Insight Enterprises (NSIT) Q2 CY2025 Highlights:
- Revenue: $2.09 billion vs analyst estimates of $2.14 billion (3.2% year-on-year decline, 2.4% miss)
- Adjusted EPS: $2.45 vs analyst expectations of $2.47 (0.7% miss)
- Adjusted EBITDA: $138.2 million vs analyst estimates of $139.5 million (6.6% margin, 0.9% miss)
- Management reiterated its full-year Adjusted EPS guidance of $9.90 at the midpoint
- Operating Margin: 4.1%, down from 6.1% in the same quarter last year
- Free Cash Flow was -$181.9 million, down from $33.62 million in the same quarter last year
- Market Capitalization: $4.53 billion
"Our results in the second quarter met our expectations as we navigated a challenging environment driven by the partner program changes” stated Joyce Mullen, President and Chief Executive Officer.
Company Overview
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ:NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $8.36 billion in revenue over the past 12 months, Insight Enterprises is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s challenging to maintain high growth rates when you’ve already captured a large portion of the addressable market. For Insight Enterprises to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.
As you can see below, Insight Enterprises struggled to increase demand as its $8.36 billion of sales for the trailing 12 months was close to its revenue five years ago. This shows demand was soft, a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Insight Enterprises’s recent performance shows its demand remained suppressed as its revenue has declined by 7.2% annually over the last two years. 
This quarter, Insight Enterprises missed Wall Street’s estimates and reported a rather uninspiring 3.2% year-on-year revenue decline, generating $2.09 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 8% over the next 12 months, an improvement versus the last two years. This projection is healthy and indicates its newer products and services will fuel better top-line performance.
Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.
Operating Margin
Insight Enterprises’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 4% over the last five years. This profitability was lousy for a business services business and caused by its suboptimal cost structure.
Analyzing the trend in its profitability, Insight Enterprises’s operating margin might fluctuated slightly but has generally stayed the same over the last five years, which doesn’t help its cause.
This quarter, Insight Enterprises generated an operating margin profit margin of 4.1%, down 1.9 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Insight Enterprises’s EPS grew at a solid 10.4% compounded annual growth rate over the last five years, higher than its flat revenue. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Insight Enterprises, its two-year annual EPS growth of 2.8% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q2, Insight Enterprises reported adjusted EPS at $2.45, down from $2.46 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Insight Enterprises’s full-year EPS of $9.36 to grow 8.2%.
Key Takeaways from Insight Enterprises’s Q2 Results
We struggled to find many positives in these results. Its revenue missed and its EPS fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 2.3% to $141.42 immediately after reporting.
Insight Enterprises didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.