Insight Enterprises (NASDAQ: NSIT) reported Q4 EPS of $1.76, $0.26 better than the analyst estimate of $1.50. Revenue for the quarter came in at $2.29 billion versus the consensus estimate of $2.11 billion.

Highlights include:

• Net sales increased 8% to $8.3 billion for the full year
• Gross profit increased 14% to $1.3 billion with gross margin expanding 90 basis points to 15.6% for the full year
• Earnings from operations increased 13% to $271.6 million and Adjusted earnings from operations increased 14% to $322.4 million for the full year
• Diluted earnings per share increased 10% to $4.87 and Adjusted diluted earnings per share increased 14% to $6.19 for the full year
• Cash flow provided by operations was $355.6 million for the full year 2020 compared to $127.9 million for the full year 2019

In the fourth quarter of 2020, net sales were flat, year to year, while gross profit increased 1% and gross margin expanded 30 basis points compared to the fourth quarter of 2019. The increase in gross profit and gross margin reflects our continued emphasis on growing our higher margin cloud and services businesses. Diluted earnings per share for the quarter was $1.50, up 25%, year over year, and adjusted diluted earnings per share was $1.76, up 12%, year over year.

“During the fourth quarter, we drove double digit growth in cloud and warranty solutions, which pushed gross margins to 15%,” stated Ken Lamneck, President and Chief Executive Officer. “And, when combined with the positive effect of the acceleration of our PCM integration, including cost synergies, this helped us achieve adjusted earnings from operations growth of 12% year over year,” stated Lamneck.

For the full year 2020, consolidated net sales were $8.3 billion, up 8% year over year. The benefit from including PCM in the full year results was partially offset by a decline in overall client demand and certain supply challenges as a result of the COVID-19 global pandemic. Gross profit increased 14%, year over year, with gross margins increasing 90 basis points to 15.6% for the full year. Earnings from operations grew 13%, year over year, to $271.6 million. Cash flow from operations was strong at $355.6 million.

“As we look back at our business for the full year in 2020, we are pleased with all we accomplished under trying circumstances, being responsive to the difficult demand landscape, and proactive in our approach. We are positioned well to help our clients solve complex IT challenges,” stated Ken Lamneck, President and Chief Executive Officer. “We believe that the strategic investments we made in our go-to-market solution areas over the last several years, as well as the investments in our sales and technical talent in 2020 have positioned us well to execute our business goals in the new year,” stated Lamneck.

GUIDANCE:

Insight Enterprises sees FY2021 EPS of $6.60-$6.80, versus the consensus of $6.46.

For the full year 2021, the Company expects to deliver net sales growth in the 4% to 8% range and Adjusted diluted earnings per share is expected to be between $6.60 and $6.80.

This outlook assumes

• interest expense between $25 million and $28 million;
• an effective tax rate of 25% to 26% for the full year 2021;
• capital expenditures of $75 to $85 million, including approximately $60 million for the build out of our new corporate headquarters; and
• an average share count for the full year of approximately 36 million shares.

This outlook excludes acquisition-related intangibles amortization expense of approximately $32 million and the non-cash convertible debt discount and issuance costs, reported as part of interest expense, of approximately $12 million and assumes no acquisition-related or severance and restructuring expenses. Due to the inherent difficulty of forecasting some of these types of expenses, which impact net earnings and diluted earnings per share, the Company is unable to reasonably estimate the impact of such expenses, if any, to net earnings and diluted earnings per share. Accordingly, the Company is unable to provide a reconciliation of GAAP to non-GAAP diluted earnings per share for the full year 2021 forecast.

For earnings history and earnings-related data on Insight Enterprises (NSIT) click here.