Q4 2021 Insight Enterprises Inc Earnings Call

Speaker 1: Ladies and gentlemen, thank you for standing by and welcome to the InSight Enterprises, Inc. Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0.

Ladies and gentlemen, thank you for standing by and welcome to the insight Enterprises, Inc. Fourth quarter 2021 earnings conference call.

At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone if you require any further assistance. Please press star zero.

Speaker 1: I would now like to hand the conference over to your speaker today, CFO Glynis Bryan. Thank you. Please go ahead.

I would now like to hand, the conference over to your speaker today CFO Glynis Bryan. Thank you. Please go ahead.

Speaker 2: Thank you. Welcome everyone and thank you for joining the Insight Enterprises Earnings Conference call. Today we will be discussing the company's operating results for the quarter and full year ended December 31st, 2021. I'm Glynis Bryan, Chief Financial Officer of Insight and joining me is Joyce Mullen, President and Chief Executive Officer.

Welcome everyone and thank you for joining the insight Enterprises earnings conference call today, we will be discussing the company's operating results for the quarter and full year ended December 31st 2021, I'm Glynis, Bryan Chief Financial Officer of insight and joining me is Joyce Mullen, President and Chief Executive Officer. If you do not have a copy of the earnings release.

Speaker 2: If you do not have a copy of the earnings release or the accompanying slide presentation that was posted this morning and filed with the Securities and Exchange Commission on Form 8K, you will find it on our website at insight.com under the investor relations.

With the accompanying slide presentation that was posted this morning and filed with the Securities and Exchange Commission on form 8-K, you will find it on our website at insight Dot Com under Investor Relations section of todays call, including the question and answer appears to be webcast live and can be accessed by the Investor Relations page of our website at insight Dot com.

Speaker 2: Today's call, including the question and answer period, is being webcast live and can be accessed by the investor relations page of our website at insight.com. An archived copy of the conference call will be available approximately two hours after completion of the call and will remain on our website for a limited time.

An archived copy of the conference call will be available approximately two hours after completion of the call and will remain on our website for a limited time. This conference call and the associated webcast contain time sensitive information that is accurate only as of today February 10th 2022. This call is the property of insight.

Speaker 2: This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, February 10, 2022.

Enterprises, any redistribution retransmission or rebroadcast of this call in any form without the express written consent of insight enterprises is strictly prohibited.

Speaker 2: Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Insight Enterprises is strictly prohibited.

Speaker 2: In today's conference call, we will be referring to non-GAAP financial measures as we discuss the fourth quarter and full year 2021 financial results.

In today's conference call, we will be referring to non-GAAP financial measures as we discuss the fourth quarter and full year 2021 financial results.

Speaker 2: When discussing non-GAAP measures, we will refer to them as adjusted. You will find a reconciliation of these adjusted measures to our actual GAAP results included in either the press release or the accompanying slide presentation issued earlier today. Please note that unless highlighted as constant currency, all amounts and growth rates are discussed in U.S. dollars.

When discussing non-GAAP measures, we will refer to them as adjusted you will find a reconciliation of these adjusted measures to our actual GAAP results included in either the press release when the accompanying slide presentation issued earlier today. Please note that unless highlighted as constant currency all amounts and growth rates are discussed in U S dollar terms.

Speaker 2: As a reminder, all forward-looking statements that are made during this conference call are subject to risks and uncertainties that could cause your actual results to differ materially. These risks are discussed in today's press release and in greater detail in our most recently filed periodic reports and subsequent filings with the OECD.

As a reminder, all forward looking statements that are made during this conference call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in today's press release and in greater detail in our most recently filed periodic reports and subsequent filings with the SEC.

Speaker 2: All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update any forward-looking statements made on this

All forward looking statements are made as of the date of this call.

Except as required by law, we undertake no obligation to update any forward looking statements made on this call whether as a result of new information future events or otherwise with that I will now turn the call over to Joyce and if youre following along with the slide presentation. We will begin on slide four.

Speaker 2: whether as a result of new information, future events, or otherwise. With that, I will now turn the call over to Joyce. And if you're following along with the slide presentation, we will begin on slide four. Joyce.

Speaker 3: Thank you very much Gwyneth. Hello everyone and thank you for joining us today to discuss our fourth quarter and full year 2021 operating results.

Thank you very much glynis Hello, everyone and thank you for joining us today to discuss our fourth quarter and full year 2021 operating results I am so honored and very excited to address you today as the CEO of insight first of all I would like to thank the dedicated teammates at insight for their commitment to our clients the collaboration with our partners.

Speaker 3: I am so honored and very excited to address you today as the CEO of Insight. First of all, I would like to thank the dedicated teammates at Insight for their commitment to our clients, the collaboration with our partners, and their perseverance and focus on delivering strong results.

And their perseverance and focus on delivering strong results 2021 was a challenging and tumultuous year in so many ways and I could not be prouder to work with our teammates across the globe I will talk more about our results in a few minutes, let me start with the incredible opportunity in front of us the market demand for insight solutions is greater than ever before.

Speaker 3: 2021 was a challenging and tumultuous year in so many ways, and I could not be prouder to work with our teammates across the globe. I will talk more about our results in a few minutes.

Speaker 3: Let me start with the incredible opportunity in front of us. The market demand for insight solutions is greater than ever before, fueled by the critical need for digital transformation, which actually has accelerated over the last.

Fueled by the critical need for digital transformation, which actually has accelerated over the last two years.

Speaker 3: Many of you are familiar with the history of Insight. We entered the market as a product reseller. But a number of years ago, Ken and our leadership team saw the transformation in the IT space coming. That transformation, driven by next generation technology, required deep technical expertise.

Many of you are familiar with the history of insight, we entered the market as a product reseller, but a number of years ago, Ken and our leadership teams solve the transformation in the IP space coming that transformation driven by next generation technology required deep technical expertise today, we have a differentiated portfolio.

Speaker 3: Today, we have a differentiated portfolio of solutions to help clients transform their.

We have solutions to help clients transform their businesses, we architect implement secure and manage the solutions that maximize the value of our clients' technologies.

Speaker 3: We architect, implement, secure, and manage the solutions that maximize the value of our clients' technology.

Speaker 3: and are well positioned to help organizations with the solutions they need to drive their digital transformation.

And we are well positioned to help organizations with the solutions they need to drive their digital transformation we.

Speaker 3: We leverage our strong capabilities across our six areas of expertise.

We leverage our strong capabilities across our six areas of expertise modern workplace and modern applications, which are critical for migrating our clients applications to the cloud modern infrastructure, which is essential for operating in a hybrid multi cloud world with a complex set of options that require a high level of expertise and analysis side.

Speaker 3: modern workplace and modern applications, which are critical for migrating our client's applications to the cloud, modern infrastructure, which is essential for operating in a hybrid multi-cloud world with a complex set of options that require a high level of expertise and analysis.

Speaker 3: Cybersecurity, which has become vital to all organizations as information moves to the cloud and work environments shift to remote hybrid models, which are replacing the traditional office model. Data and AI, which is an area that can completely transform a business operations and customer experience.

For security, which has become vital to all organizations as information moves to the cloud and work environment shift to remote hybrid models, which are replacing the traditional office model data and AI, which is an area that can completely transform our business operations and customer experiences and the intelligent edge, which is estimated to become bigger than the public cloud.

Speaker 3: and the Intelligent Edge, which is estimated to become bigger than the public cloud today.

Today technology at the edge gathers data and processes. It in the most efficient way to enable real time decision, making an incredibly exciting space that requires expertise in vertical software hardware and services.

Speaker 3: technology at the edge, gathers data and processes it in the most efficient way to enable real-time decision-making.

Speaker 3: an incredibly exciting space that requires expertise in vertical, software, hardware,

Speaker 3: Our solutions are delivered through a broad scope of services, consulting services, which align our clients' business goals and digital strategies, professional life cycle services, which simplify the supply chain and streamline costs across global hardware and software life cycles, and managed services, which align resources and employ standardized processes and tools to deliver consistent outcomes.

Our solutions are delivered through a broad scope of services consulting services, which align our clients' business schools and digital strategies professional and lifecycle services, which simplify the supply chain and streamline costs across global hardware and software at life cycles, and managed services, which align resources and employee standardized processes and tools to.

Deliver consistent outcomes.

Speaker 3: For example, on slide five, one of Insight's existing clients wanted to unify and shift its communications applications off-premises to the cloud across 3,500 locations.

For example on slide five one of the insights existing clients wanted to unify and shifted communications applications off premises to the cloud across 3500 locations. This client also wanted to decommission one of its data centers to reduce its onsite footprint. The client was specifically seeking an as a service solution to remove the inter.

Speaker 3: This client also wanted to decommission one of its data centers to reduce its on-site

Speaker 3: The client was specifically seeking an as-a-service solution to remove the internal administrative burden and to reduce spending. This client also established a very tight timeline.

Administrative burden and to reduce spending this client also establish a very tight timeline.

Speaker 3: We designed and implemented one system for communications across all locations with centrally managed maintenance and ongoing support from Insight teams. Our client is now continuing to grow its cloud environment quickly, sustainably, and as their business demands.

We designed and implemented one system for communications across all locations with centrally managed maintenance and ongoing support from insight teams. Our client is now continuing to grow its cloud environment quickly sustainably and as their business demands they were able to reduce cost and communications burdens of internal resources every law.

Speaker 3: they are able to reduce costs and communications burdens of internal resources at every level.

Speaker 3: The client benefits from a new unified communication solutions and the ongoing management and maintenance is provided as a service by Insight. This is just one example of how we are working with clients to accelerate cloud adoption and improve client experience.

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The client benefits from our new unified communication solutions, and the ongoing management and maintenance is provided as a service by insight.

This is just one example of how we are working with clients to accelerate cloud adoption and improve client experience customer experiences.

Speaker 3: What really makes our go-to-market strategy impactful is the ability to expand adjacencies within our areas of expertise.

What really makes our go to market strategy impactful is the ability to expand adjacencies within our areas of expertise we have the ability not only to deliver immediate results for clients today, but to guide them through their longer term digital transformation slide.

Speaker 3: We have the ability not only to deliver immediate results for clients today, but to guide them through their longer term digital transformation.

Speaker 3: Slide six is an example of how we helped a large global retailer improve operations and at the same time enhance their employee experience with a modern application framework.

Slide six is an example of how we helped a large global retailer improve operations and at the same time enhance their employee experience with a modern application framework.

Speaker 3: As an existing Insight client, they wanted to drive efficiency and accuracy in customer service and stocking. At the beginning of the project, their system relied on legacy devices that were expensive and difficult to maintain and support.

As an existing inside client they wanted to drive efficiency and accuracy and customer service and stocking at the beginning of the project their system relies on legacy devices that were expensive and difficult to maintain and support.

Speaker 3: With our help, they have now put hundreds of thousands of new devices into employees' hands. The scale of this project...

With our health they have now put hundreds of thousands of new devices into employee's hands. The scale of this project is a men's giving them access to applications needed to support efficient and modern customer service today, our client has modernized and automated back end processes, while improving employee and customer experiences on the phone.

Speaker 3: giving them access to applications needed to support efficient and moderate customer service. Today, our client has modernized and automated back-end processes while improving employee and customer experiences on the front end, and Insight is managing the entire lifecycle of the profile.

And an insight is managing the entire lifecycle of the program.

Speaker 3: At Insight, every client interaction is an opportunity to create value for them. Our goal is to become their partner of choice, delivering expertise and results for them as they make their own way through their own transformation.

At insight every client interaction is an opportunity to create value for them. Our goal is to become their partner of choice delivering expertise and results for them as they make their way through their own transformation agendas.

Speaker 3: As I said earlier, in 2021, our teammates once again faced a challenging year, made much more complicated by global supply constraints and difficulties presented by the pandemic. Our teammates adeptly navigated the uncertainty of the macro environment and maintained focus on solving our clients biggest technology challenges.

As I said earlier in 2021, our teammates once against faced a challenging year made much more complicated by global supply constraints and difficulties presented by the pandemic. Our teammates are definitely navigated the uncertainty at the macro environment and maintain focus on solving our clients' biggest technology challenges that focus was reflected.

Speaker 3: That focus was reflected in our full year results. On an annual basis for 2021, we set company records for net sales, gross profit, adjusted earnings from operations, and adjusted diluted earnings per share.

And our full year results on an annual basis for 2021, we set company records for net sales gross profit adjusted earnings from operations and adjusted diluted earnings per share.

Speaker 3: During the year, we made investments in our sales and technical talent. These teammates play a critical role in driving business outcomes and delivering a great client experience. We began our multi-year program to modernize our e-commerce experience.

During the year, we made investments in our sales and technical talent. These teammates play a critical role in driving business outcomes and delivering a great client experience. We began a multi year program to modernize our ecommerce experience early early this year, our global team completed the Onboarding of all of our EMEA clients and partners teammates onto insights.

Speaker 3: Early this year, our global team completed the onboarding of all of our EMEA clients and partners and teammates onto Insight's common core IT systems, tools, and processes. Our focus on culture, teammate well-being, diversity and inclusion, and leadership development continued to be acknowledged with key recognitions this year. We're on the Forbes World's Best Employers list in 2021. Insight ranked 95th overall, 12th for IT companies, and number 140 for diversity.

Common core it systems tools and processes.

Our focus on culture teammate wellbeing diversity, and inclusion and leadership development continued to be acknowledged with key recognitions this year or on the Forbes world's best employers list in 2021 insight ranked 95th overall, 12th for I T companies and a number of 140 for diversity. We also achieved a.

Speaker 3: We also achieved a perfect score on the Human Rights Campaign Foundation's 2022 Corporate Equality Index, and we achieved notable recognitions from our partners around the globe, as shown on slide seven.

Perfect score on the human rights campaign Foundation's 2022, corporate equality index and we achieved notable recognition from our partners around the globe as shown on slide seven and eight.

Speaker 3: While we are very proud of these accomplishments, we are focused on the opportunities ahead of us. We will be hosting an Investor Day in the fourth quarter. But in the meantime, our four primary business goals on slide nine are first, earn client loyalty.

Well, we are very proud of these accomplishments we are focused on the opportunities ahead of us we will be hosting an investor day in the fourth quarter, but in the meantime, our four primary business goals on slide nine our first earn client loyalty. This business is a people business and we earn loyalty by being client obsessed and delivering except.

Speaker 3: This business is a people business, and we earn loyalty by being client-obsessed and delivering exceptional client results.

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Speaker 3: Second, lead with innovative services and solutions. We deliver differentiated client outcomes by leveraging our broad solutions portfolio, spanning our six areas of technical expertise, our solution skills.

Lead with innovative services and solutions, we deliver differentiated client outcomes by leveraging our broad solutions portfolio spanning our six areas of technical expertise our solution skills and our partner relationships third drive profitable growth through high value solutions supported by operational excellence and integral.

Speaker 3: Third, drive profitable growth through high-value solutions supported by operational excellence and integrated global...

Global systems, and sports champion people leadership and culture, we invest in our teammates so they have the opportunities to grow in their professional and personal lives.

Speaker 3: And fourth, champion people, leadership, and culture. We invest in our teammates so they have the opportunities to grow in their professional and personal lives.

Speaker 3: These four goals all contribute to a better, stronger insight that delivers greater value to our clients, partners, teammates, and shareholders on our transformation to becoming an industry-recognized solutions integrator.

These four goals all contribute to a better stronger insight that delivers greater value to our clients partners teammates and shareholders on our transformation to becoming an industry recognized solutions integrator our.

Speaker 3: Our values of hunger, heart, and harmony are the foundation for the purpose-driven culture of our company. We believe that technology is our greatest resource for doing good, magnifying noble causes with an incomparable ability to scale, automate, innovate, and communicate. We remain committed to living up to the principles of protecting human rights, fair labor practices, anti-corruption, and sustainability.

Our values of hunger heart and harmony are the foundation for the purpose driven culture of our company. We believe that technology is our.

Our greatest resource for doing good magnifying noble causes with an incomparable ability to scale automate innovate and communicate we remain committed to living up to the principles of protecting human rights fair labor practices anti corruption and sustainability.

Speaker 3: We recently posted our annual corporate citizenship report. You will gain a better understanding of Insight's culture by reading the stories about our teammates living the best versions of themselves and making a positive impact on their.

We recently posted our annual corporate citizenship report citizenship report you will gain a better understanding of insights culture by reading the stories about our teammates living the best versions of themselves and making a positive impact on their communities I am so proud to be part of a team that embraces servant leadership and the diversity of our global community.

Speaker 3: I am so proud to be part of a team that embraces servant leadership and the diversity of our global community.

Speaker 3: Now I will turn the call back over to Glynis to review our quarter and our full year financial

Now I will turn the call back over to Glynis to review our quarter and our full year financial results. Thank.

Speaker 2: Thank you, Joyce. In the second year of the pandemic, we continued to focus on helping our clients forecast their needs and ensured that they were in the queue for supply as it became available. This led to rapid bookings and backlog levels exiting.

Thank you Joyce and the second year of the pandemic, we continue to focus on helping our clients forecast their needs and ensured that they were the cheaper supply as it became available.

Led to record bookings and backlog levels exiting 2021 for 'twenty to 'twenty two industry analysts expect low single digit growth in hardware. However, in our first quarter, we're seeing hardware bookings in North America improved double digits year over year compared to the first quarter of 'twenty 'twenty. One also we exited the fourth quarter 2021.

Speaker 2: For 2022, industry analysts expect low single-digit growth in hardware. However, in our first quarter, we're seeing hardware bookings in North America improve double digits year-over-year compared to the first quarter of 2021. Also, we exited the fourth quarter of 2021 with elevated backlog, primarily in North America. We expect that this

With elevated backlog, primarily in North America, we expect that this will benefit the first half of 2022 movie.

Speaker 2: Moving on to slides 11 through 14 for a consolidated result.

Moving on to slides 11 through 14 for our consolidated results.

Speaker 2: Our net sales in the fourth quarter were $2.6 billion, up 12%.

Our net sales in the fourth quarter were $2 $6 billion up 12% in constant currency and also in U S dollars compared to the fourth quarter of 2020. This represented net record net sales for insight gross profit of $385 million increased 12% year over year and gross margin was 15%.

Speaker 2: and also in U.S. dollars, compared to the fourth quarter of 2020. This represented...

Speaker 2: Gross profit of $385 million increased 12% year-over-year and gross margin was 15%.

Speaker 2: SG&A expenses were up 12% year-over-year in constant currency and up 13% in U.S.

SG&A expenses were up 12% year over year in constant currency and up 13% in U S dollars as a percentage of net sales adjusted SG&A was 11% consistent with prior year and as a percentage of net sales SG&A on a GAAP basis was also was 11, 3% also consistent with prior year.

Speaker 2: As a percentage of net sales, adjusted SG&A was 11.

Speaker 2: Consistent with prior year and as a percentage of net sales SG&E on a gap basis was also with 11.3% also consistent

Speaker 2: Adjusted earnings from operations was $103 million, up 12% year-over-year, also up 12% on a gap basis to $93 million.

Our adjusted.

Adjusted earnings from operations was $103 million up 12% year over year also up 12% on a GAAP basis to $93 million.

Speaker 2: And the adjusted earnings per share was $2.03, up 15%, and $1.69 per share.

And adjusted diluted earnings per share was $2.03 up 15% and $1 69 per share on a GAAP basis, an increase of 13%.

Speaker 2: On an annual basis for 2021, as Joyce mentioned, we set company records for net sales, gross profit, adjusted earnings from operations, and adjusted diluted earnings per share. Annual net sales of $9.4 billion were up 13% year-over-year. We maintained focus on leading with services, which also grew 13% year-over-year. Our gross profit of $1.4 billion was up 11%.

On an annual basis for 2021 and as Joe Just mentioned, we set company records for net sales gross profit adjusted earnings from operations and adjusted diluted earnings per share.

Annual net sales of $9 $4 billion were up 13% year over year, we maintained focus on leading with services, which also grew 13% year over year, a gross profit of $1 $4 billion was up 11% from 2020 gross margins for the full year was 53% compared to last year was $15.

Speaker 2: Gross margins for the full year was 15.3% compared to last year of 15.3%.

6% our services gross profit was 49% of consolidated gross profit compared to 848% in 2020.

Speaker 2: Our services gross profit was 49% of consolidated gross profit compared to 48%.

Speaker 2: gross, cloud gross profit in 2021 grew 21%.

Gross how gross profit in 2021 grew 21% driven by sad and infrastructure as a service with a combined gross profit growth rate of 35% year over year.

Speaker 2: driven by SAS and Infrastructure as a Service with a combined gross profit growth rate of 35% year-over-year.

Speaker 2: SG&A expenses were up 7% year-over-year in constant currency and 10% in U.S. dollars. As a percentage of net sales, adjusted SG&A was $11.5 billion.

SG&A expenses were up 7% year over year in constant currency and 10% in U S dollars as a percentage of net sales adjusted SG&A was 11, 5% down from 11.7 in 2020 and below our guidance of 11, 7% for 2021 .

Speaker 2: down from 11.7% in 2020 and below our guidance of 11.7% for 2021.

As a result of net sales.

Speaker 2: SG&M on a gap basis was down 11.8%, down 36%.

Net SG&A on a GAAP basis was down 11.

8% down 30 basis points year over year.

Speaker 2: Adjusted earnings from operations were $362 million, up 12% year-over-year, compared to $322 million and a 22% increase in earnings from operations on a gap year.

Adjusted earnings from operations were $362 million up 12% year over year compared to $322 million and a 22% increase in earnings from operations on a GAAP basis.

Speaker 2: And the Jeff Good value did earnings per share was $7.10.

And adjusted diluted earnings per share was $7 intentions up 15% versus $5 95 per share on a GAAP basis, an increase of 22%.

Speaker 2: up 15% versus $5.95 per share on a gap basis, an increase of 22%.

Speaker 2: Our cloud gross profit results for the quarter and full year were 17% and 18% of consolidated gross profit, respectively. This compares to 16% and 17% in the prior year, respectively.

Our cloud gross profit results for the quarter and full year were 17% and 18% of consolidated gross profit respectively. This compares to 16% and 17% in the prior year respectively.

Speaker 2: We're presenting our cloud results exclusive of any peer-to or cloud service provider NetSales, which were previously included in our stated cloud results. For more comparability, we're reporting cloud service provider NetSales as part of our software product catalog.

Representing our cob results exclusive of any tier two or cloud service provider net C House, which were previously included in our stated cloud results for more comparability, we're reporting cloud service provider net sales as part of our software product category. This aligns with our historical and ongoing U S GAAP financial reporting.

Speaker 2: This aligns with our historical and ongoing U.S. GAAP financial reporting and increases the focus on the faster-growing cloud-related issues.

And increases the focus on the faster growing cloud related elements.

Speaker 2: Moving on to the results of each of our operating segments, and starting with North America operating results on slide.

Moving on to the results of each of our operating segments and starting with North America operating results on Slide 15 fourth quarter net sales were $2 $1 billion a record for insight up 13% year over year, driven by a 19% increase in hardware in that sales.

Speaker 2: Fourth quarter net sales were $2.1 billion, a record for Insight up 13% year-over-year, driven by a 19% increase in hardware.

Speaker 2: Gross profit in North America in the fourth quarter increased 13% year-over-year and gross margin of 14.7% was relatively flat year-to-year.

Gross profit in North America, the fourth the fourth quarter increased 13% year over year and gross margin of 14, 7% was relatively flat year to year.

This was driven by the mix of products and services in the quarter as I mentioned, we exited the year with elevated backlogs in our business.

Speaker 2: in the quarter. As I mentioned, we exited the year with elevated.

Speaker 2: Selling at administrative expenses increased 14% year-over-year driven by higher personnel and variable compensation costs resulting from higher net worth.

Selling and administrative expenses increased to 14% year over year, driven by higher personnel and variable compensation costs, resulting from higher net sales.

Speaker 2: Adjusted earnings from operations grew 9% year-over-year to $85 million. Gap earnings from operations grew 8% year-over-year to $77 million.

Adjusted earnings from operations grew 9% year over year to $85 million GAAP earnings from operations grew 8% year over year to $77 million.

Speaker 2: Moving on to the Mayans, slide 16. Net sales in the fourth quarter grew 7% in comparison to the first quarter.

Moving onto slide 16, net sales in the fourth quarter grew 7% in constant currency gross profit also increased gross profit also increased 10% in constant currency faster than net sales primarily due to an increase in higher margin services, partially offset by a net decrease in margin product margin.

Speaker 2: Gross profit also increased 10. Gross profit also increased 10.

Speaker 2: faster than net sales, primarily due to an increase in higher margin services, partially offset by a net decrease in margin on product sales.

Speaker 2: Adjusted earnings from operations were 13.2% up 27% in constant currency. Gap earnings from operations grew 35%.

Adjusted earnings from operations were 13, 2% of 27% in constant currency GAAP earnings from operations grew 35% year over year to $12 $5 million.

Speaker 2: Now on to APAC on slide 17, net sales of $54 million and gross profit of $14 million in the fourth quarter increased 19% and 22% respectively, year-over-year in constant currency, primarily due to higher sales across all categories.

And I went to APAC on slide 17, net sales of $54 million and gross profit of $14 million in the fourth quarter increased 19% and 22% respectively year over year in constant currency, primarily due to higher sales across all categories in the region.

Speaker 2: This led to adjusted earnings from operations of $14.7 million in the quarter. Gap earnings from operations was $4.4 million. Moving on to our tax rate. Our effective tax rate in 2021 was 20.0%, compared to 24.4% in 2020.

To adjusted earnings from operations of $14 $7 million in the quarter GAAP earnings from operations was 11 was $44 million.

Moving on to our tax rate.

The tax rate in 'twenty, 'twenty or 'twenty, one was 20.0 per cent compared to 24, 4% in 2020, the net increase in our <unk>.

Speaker 2: The net increase in our rate was a result of tax benefits made available by the CARES Act in 2020, partially offset by increased...

It was a result of tax benefits made available by the cares Act in 2020, partially offset by increased tax credit.

Speaker 2: Turning to the details of our 2021 cash flow performance on slide 18. Our operations generated $164 million of cash in 2021 compared to 356 million.

Turning to the details of our 2021 cash flow performance on slide 18, our operations generated $164 million of cash in 2021 compared to $356 million.

Of cash in 'twenty.

20.

Speaker 2: As we have highlighted previously, our cash conversion cycle is inverted, meaning we pay our partners on terms shorter than we receive payments from our customers.

As we have highlighted previously our cash conversion cycle is inverted, meaning we pay our partners on terms shorter than we receive payments from our clients. This allows us to drive more cash flow and hardware sales decline well in periods of growth more cash is used in operations in 2021 hardware girls recovered significantly returning our business.

Speaker 2: This allows us to drive more cash flow when hardware sales decline, while in periods of growth, more cash is used in our operations.

Speaker 2: In 2021, hardware growth recovered significantly, returning our business to a more historical range of annual cash flow generation.

As to a more historical range of annual cash flow generation.

Speaker 2: In the fourth quarter, our cash conversion cycle is 30 days, flat, year-over-year. Factors in our cash conversion cycle...

In the fourth quarter, our cash conversion cycle was 30 days flat year over year.

And our cash conversion cycle included the following strategic inventory procurement and support of client projects, partially offset by improved DSO and deferral of payments to certain vendors in 2020 , one we invested $52 million in capital expenditures, mainly related to facility and technology investments. We also received 31.

Speaker 2: strategic inventory procurement in support of client projects, partially offset by improved DSO, and deferral of payments to certain vendors.

Speaker 2: In 2021, we invested $52 million in capital expenditures, mainly related to facility and technology investments.

Speaker 2: We also received $31 million in proceeds from the sale of real estate.

And proceeds from the sale of real estate assets.

Speaker 2: Lastly, we spent $50 million to repurchase shares of our common stock in Q2 of 2021. We continue to have $75 million remaining under our share repurchase authorization.

Lastly, we spent $50 million to repurchase shares for common stock in Q2 of 'twenty 'twenty. One we continue to have $75 million remaining under our share repurchase authorization.

Speaker 2: As of December 31, 2021, we had almost all of our $1.2 billion capacity available under our ABL facility, and we have ample capacity.

As of December 30.

<unk> 31, 2021, we had almost all of our $1 2 billion dollar capacity available under our ABL facility and we have ample capacity to fund future growth at the end of the year, we had a cash balance of $104 million of which $84 million was resident in our foreign subsidiaries we.

Speaker 2: At the end of the year, we had a cash balance of $104 million, of which $84 million was resident in our foreign subsidiary.

Speaker 2: We had $362 million of outstanding debt, including our senior convertible note, at the end of the quarter, compared to prior cash balance of $182 million and total debt of $4.5 million.

We had $362 million of outstanding debt, including our senior convertible note at the end of the quarter compared to prior cash balance of $182 million and total debt of $439 million.

Speaker 2: Moving on to liquidity on slide 9, we exited the quarter with a leverage position at less than 1.0 times debt-to-cash flows, or EBITDA, which is well within our level of confidence.

Moving on to liquidity on slide nine we exited the quarter with a leverage position at less than 1.8 times debt to cash flows or EBITDA, which is well within our level of comfort.

Speaker 2: Under our ABL agreement, our primary compliance covenant is a fixed charge coverage.

Under our ABL agreement or primary complaints covenant is a fixed charge coverage ratio, which includes trailing 12 month EBITDA coverage over capital expenditures taxes and cash interest.

Speaker 2: which includes trillion 12-month EBITDA coverage over capital expenditures, taxes, and cash interest. As of December 31st, we're at 4.1 times the minimum requirement of 1.0 times, and we're confident we can support our capital requirements and liquidity.

As of December 31st we're at four one times the minimum requirement of 1.0 times and we're confident we can support our capital requirements and liquidity needs.

Speaker 2: For the full year 2022 guidance on slide 20, we expect to deliver mid-September.

For the full year 2022 guidance on slide 20, we expect to deliver mid single digit.

Net sales growth, we expect diluted adjusted diluted earnings per share for the full year of 2022 to be between $7 65 and.

Speaker 2: We expect diluted, adjusted diluted earnings per share for the full year of 2022 to be between $7.65 and $7.99.

And $7 85, this outlook assumes interest expense between $30 million to $35 million and effective tax rate of 25% to 26% for the full year of 2022 capital expenditures of $75 million to $80 million, including final completion of our new corporate headquarters.

Speaker 2: This outlook assumes interest expense between $30 to $35 million.

Speaker 2: an effective tax rate of 25 to 26% for the full year of 2022, capital expenditures of $75 to $80 million, including final completion of our new corporate headquarters, and an average share count for the full year of 35.6 million shares. This outlook.

Average share count for the full year of 35 6 million shares this outlook excludes.

Speaker 2: Acquisition-related intangible amortization expense of approximately $31 million, and assumes no acquisition-related risk severance and restructuring expenses.

Acquisition related intangible amortization expense of approximately $31 million and assumes no acquisition related or severance and restructuring expenses.

I'll turn the call back to choice.

Speaker 3: Thank you, Glynis. In closing, I want to thank our teammates again for their hunger, heart, and harmony. I want to thank our clients for trusting Insight to help them transform their businesses.

Thank you glynis and clothing I want to thank our teammates again for their hunger heart and harmony I want to thank our clients for trusting insight to help them transform their businesses and I also want to thank our partners for their collaboration and support in building innovative solutions that deliver differentiated results inside had an incredible year and there is so much more opera.

Speaker 3: And I also want to thank our partners for their collaboration and support in building innovative solutions that deliver differentiated results. Insight had an incredible year, and there is so much more opportunity. This concludes my comments, and we will...

Attunity.

This concludes my comments and we'll now open the line for your questions.

Speaker 1: At this time, if you would like to ask a question, please press star one on your telephone keypad. Again, that's star one to ask a question. To withdraw your question, press the pound key. We will pause for just a moment to compile the Q&A roster.

At this time, if you would like to ask a question. Please press star one on your telephone keypad again that star one to ask a question. So withdraw your question press the pound key.

Pause for just a moment to compile the Q&A roster.

Yeah.

Speaker 1: Your first question is from the line of Matt Sheeran with The Steeple.

Our first question is on the line of Matt Sheerin with Stifel.

Speaker 2: Yes, thank you. And good morning. I'm sorry, Matt, can I just make a correction before you start your question? Sure. I recently said the tax rate for 2021 was 20%. It's actually 25%.

Yes, Thank you and good luck.

Good morning.

I'm, sorry, Matt because I can sneak a question before you start your question.

Originally the tax rate for 2021 it was 20% it's actually 25%. So I just wanted to get that correction out there.

Speaker 4: Okay, okay, fair enough. So, so thank you. I wanted to ask you regarding your your outlook for the year of mid single digit growth. It sounds like

Okay, Okay fair enough.

So so thank you I wanted to ask you regarding your outlook for the year mid single digit growth it sounds like youre going to be off to a fairly strong start it sounded like there's backlog to ship too. So I'm just it looks like youre going to be growing faster than that in the first quarter and maybe in the second quarter.

Speaker 4: you're going to be off to a fairly strong start. It sounds like there's backlog to ship to. So, it looks like you're going to be growing faster than that in the first quarter, maybe the second quarter. So, are you being conservative? Are there issues like component constraints factored in there? Why the conservative guide relative to the start for the year?

Sure.

So or are you being conservative or there are issues like component constraints factored in there why the conservative guide relative to the start for the year.

Speaker 3: Thanks, Matt, for the question. I'm comfortable with our guidance for a couple of reasons. First of all, we expect to grow faster than the market, a couple hundred.

Thanks, Matt for the question I'm comfortable with our guidance B and for a couple of reasons first of all we expect to grow faster than the market couple of hundred a 300 basis points faster than the market in mid single digits or hardware, you're absolutely correct. We have a very strong we expect very strong hardware growth, particularly.

Speaker 3: 300 basis points faster than the market in mid-single digits. You're absolutely correct. We expect very strong hardware growth, particularly in the first half.

Early in the first half and we expect that to mute in the second half for a couple of reasons. One is we have some pretty.

Speaker 3: And we expect that to mute in the second half for a couple of reasons. One is we have some pretty.

Speaker 3: significant compares, and also we expect the backlog to start to subside a bit, although backlog is still increasing, as you noted, in the first half, or in the first quarter. We also expect to see improved growth in services, which will yield margin expansion, and we expect improved SG&A leverage.

Significant compares and also we expect that backlog to start to subside a bit although backlog is still increasing as you noted in the first half or in the first quarter. We also expect to see improved growth in services, which will yield margin expansion and we expect improved SG&A leverage so.

Speaker 3: So I'm comfortable with our guidance. We do expect it to be a bit different in the first half from the second half, largely due to hardware.

I'm comfortable with our guidance, we do expect it to be a bit different than the first half on the second half largely due to hardware.

Speaker 4: Okay. And relative to that, those mixed expectations on gross margin, which essentially was flat or down maybe a little bit from last year, how should we expect that to play out this year?

Okay and relative to that those mix expectations on gross margin, which essentially was flat.

We're down maybe a little bit from from last year, how should we expect that to play out this year.

Speaker 3: Yeah, we expect some gross margin expansion because of the increased mix in services as hardware growth. You know, we won't see the same levels of hardware growth that we saw this past year. And so we expect that to result in gross margin expansion overall. So, Maddie, if you look at our hardware specific results, last year we grew 16%, a lot of that in the second half of the year. We're expecting to grow low single digits in the first half.

Yeah, we expect some gross margin expansion because of the increased mix in services.

As hardware growth as you know we won't see the same levels of Parker growth that we saw this past year and so we expect that to result in gross margin expansion overall goodness you want it.

And if you look at our hardware specific results last year, we grew 16% a lot of that in the second half of the year.

We're expecting to grow low single digits for the first half and.

Speaker 2: kind of middish in the second half of the year, and that is the moderator, so hardware is growing at a slower pace in 2022, services growing at a faster pace in 2022, and that results in gross...

Kind of mid ish in the second half of the year and that is the moderator. So hardware is growing at a slower pace in 2022 services growing at a faster pace in 2022 and that results in gross margin expansion.

Speaker 4: Okay, well, I think, did you say that the hardware would be growing faster in the first half versus the second half? Yes, yes, because of backlog and because of cost, right?

Okay, well I think did you say that the hardware would be growing faster in the first half versus the second half, yes, yes cause a backlog and because of the comps right the conflict.

Okay.

Speaker 4: Got it. Got it. And are you having issues on the supply side? Is that why the backlog is strong?

Got it got it and.

And are you having issues on the supply side is that right. The backlog is strong.

Speaker 3: So, yeah, I think we're seeing some improvement in the device lead time, so that is definitely improving, albeit not quickly and not 100% consistently across all the device space. We haven't seen much improvement in the infrastructure space, though, especially networking. And we don't expect that to improve until probably it'll be the second half of the year.

So yeah, I think I think we're seeing some some improvements in the device lead time, so that that is definitely.

Improving, albeit not as quickly and not 100% consistently across all the device space, we haven't seen much improvement in the infrastructure space, So, especially networking and we don't expect that to improve until this probably it'll be the second half of the year.

Speaker 4: Okay. Okay. And just lastly, just regarding the balance sheet in Glynnis, you talked about the strength there. It's been over two years since your last major acquisition. What is the pipeline there in terms of your M&A strategy?

Okay, Okay, and just lastly, just regarding the balance sheet and Glenn as you talked about the strength there.

It's been over two years since the last major acquisition.

What is the pipeline there in terms of your M&A strategy.

Speaker 2: So Matt, we think of M&A as being one of our core competencies and we continue to look at deals and evaluate deals. The market is a little frothy right now with regard to...

So Matt we are we think of M&A as being one of our core competencies and we continue to look at deals and evaluate deals. The market is a little frothy right now with regard to to multiples that the companies are in the market for that has actually come down a little bit from a market perspective. So we anticipate maybe there'll be a little bit of headwinds in.

Speaker 2: to multiples that companies are in the market for. That has actually come down a little bit from a stock market perspective. So we anticipate maybe there'll be a little bit of that following in the private.

Following in the private.

Speaker 2: market arena, but we continue to look at acquisitions in the areas of building up our technical capability and some geographic hole gaps that we may have, as well as looking at scale acquisitions. As you know, we don't control the timing specifically of the scale acquisitions. That's much more related to...

Market Arena, but we continue to look at acquisitions in the areas of building out our technical capability and some geographic holes gaps that we may have as well as looking at scale acquisitions. As you know we don't control the timing specifically of this scale acquisitions, that's much more related to a.

Speaker 2: courtship process that we go through with the company before they may agree to be acquired by Insight. So we are continuing all those efforts, and that has not let up.

Our courtship process that we go through with the company.

Before they may agree to be acquired by insight. So we are continuing all of those efforts and that has not let up.

Speaker 4: Okay. All right. Great. Thanks for asking and answering the questions. Thanks.

Okay, alright, great. Thanks for asking asking answering the questions.

Thanks.

Your next question.

Speaker 1: Your next question is from the line of Katherine Huntley with Raymond Jeans.

Your next question is from the line of Catherine Huntley with Raymond James.

Okay.

Speaker 5: Hey, everybody. Thank you so much for taking our questions today. This is Catherine. I'm for Adam. Joyce, if I could start with you. Did you experience any price increases in the quarter given the component shortages? And were you able to pass these along? And what was the reaction of customers?

Hey, everybody. Thank you so much for taking our questions. Today. This is katherine on for Adam.

George if I could start with you did you experience any price increases in the quarter given the component shortages.

And were you able to pass these along and what was the reaction of customers.

Speaker 3: Yes, we did see some price increases in the quarter. We were able, generally, to pass those along to our clients. And I think there's enough clarity around the supply constraint.

Yes, we did see some price increases in the quarter, we were able to generally to pass those along to our clients and I think there's enough.

Clarity around the supply can't strained.

Speaker 3: supply chain constraints, that customers are pretty accepting of those price increases. I should note, though, when we talk about supply chain constraints, easy for me to say, we are shipping more product than we have ever shipped before. So while the demand is higher than supply, we continue to ship more product than ever before. So the market is responding, it's just trying to keep up with the increased demand.

So the supply chain constraints that customers are pretty accepting of those of those price increases I should note, though when we talk about supply kits straight toboggan chain constraints easy for me to say, we are shipping more product than we've ever shipped before so while the demand is higher than supply we continue to ship more product than <unk>.

Ever before so the market is responding it's just trying to keep up with it with the increased demand.

Speaker 5: Okay, perfect. Thank you so much for that color. And then dovetailing off of what you just said about that margin point, the implied guidance for the year is mid-single-digit revenue growth, but if you look at the EPS midpoint, that implies high single-digit growth, implying that there could be a margin drop-through. Would that be from price increases or from what you alluded to in a previous question, which was services growth?

Okay perfect. Thank you so much for that color and then Dovetailing off of what you just said about the margin point the implied guidance for the year as mid single digit revenue growth, but if you look at the EPS midpoint that implies high single digit growth, implying that there could be a margin drop through would that be from price increases or from what you alluded to in our <unk>.

Previous question, which was services growth.

Speaker 3: You know, I do expect that ASPs will be a bit higher, but I think the biggest driver of that is in change in the mix, so we expect to see more services in our portfolio as a percentage of our overall revenue, which will yield margin expansion. And SG&A leverage will also help with that.

You know I do expect our Asp's will will be a bit higher but I think that's the biggest driver of that has been change in the mix. So we expect to see them more services in our in our portfolio as a percentage of our overall revenue, which will yield margin expansion expansion.

And SG&A leverage will also help with that.

Awesome. Thank you so much.

Speaker 1: Your next question is from the line of Anthony Lebozinski with Thedotian Company.

Your next question is from the line of Anthony <unk> with Sidoti <unk> Company.

Speaker 6: Good morning and thank you for taking the questions. So I guess first just to follow up about the price increases Can you just perhaps the quantify the extent of the price increases that you took in the fourth quarter? And how should we think about 2022 just from a price increase perspective?

Good morning, and thank you for taking the questions. So I guess supposed to just a follow up about the price increases can you just quantify the extent of the price increases that you took in the fourth quarter Ed.

Should we think about 2022, just from a price increase perspective.

Speaker 2: Um, I actually, Lineth, do you have an idea of how big the price increases were in aggregate? I don't, I can't answer that question specifically, Anthony. I think that in terms of our overall results for Q4, price increases were not as significant.

I actually cause Lynn if you have an idea of how big the price increases were in aggregate I I I I don't I can't answer that question, specifically, Anthony I think that in terms of our overall results for Q4 price increases were not a significant driver.

Speaker 6: Got it. Okay. Thanks for clarifying that. And then, you know, just in terms of the tight labor market, can you talk about your ability to attract and retain talent? How is that going for you guys? And, you know, whether you expect any changes for that here?

Got it okay. Thanks for clarifying that and then.

Just in terms of the tight labor market can you talk about your ability to attract and retain talent.

How's that going for you guys.

And whether you expect any changes for that here.

Speaker 3: Yeah, thank you. So certainly the labor market is tight.

Yeah. Thank you that so certainly the labor market is tight, but there's really sort of two pieces of this first of all we have to retain the highly talented team that we have and we're doing a very good job at that I would say, but much better than market and we expect that to continue we have seen a slight uptick in <unk>.

Speaker 3: But there's really sort of two pieces of this. First of all, we have to retain the highly talented team that we have. And we're doing a very good job at that, I would say, but much better than market. And we expect that to continue. We have seen a slight uptick in attrition, but as I said, quite significantly below market.

Christian but as I said quite quite significantly below market and yes, we've been technical talent is always pretty competitive specifically in the cloud and the digital but digital space. We are seeing that we'd have to be more aggressive around offers and they are more expensive, but they help build us built solution.

Speaker 3: And yes, technical talent is always pretty competitive, specifically in the cloud, in the digital space. We are seeing that we have to be more aggressive around offers. And they are more expensive, but they help build solutions. And in most circumstances, we're able to pass on the increased cost for that labor through our services contract.

And in most in most circumstances, we're able to pass on the increased cost for the that labor through our services contracts.

Speaker 3: And we also find that being flexible around work from home and hybrid work is really helping with our recruitment, but that's a lot of hard work. So it's a combination of retaining our talent and then making sure we have a really tremendous opportunity available to a talent we're trying to attract.

And we also find that the you know being flexible about around work from home and hybrid work is is really helping with our with our recruitment, but you know that's a lot of hard work. So its a combination of retaining our talent and then making sure we have a really really tremendous opportunity available to a talent.

Tried to attract.

Speaker 6: Gotcha. In terms of your different vertical markets, can you talk about what you saw in the fourth quarter and as the country opens up hopefully more as the year progresses, how should we think about that?

Gotcha.

In terms of.

You'll have a different vertical markets.

Can you talk about you know what.

As you saw in the fourth quarter and as the country opens up hopefully more as the year progresses.

How should we think about that.

What are you guys.

Speaker 6: So are you asking, as offices reopen, how do we think about the impact on our business? Is that what you're, is that the net of the question? Yeah, pretty much. Yeah, yeah, net, net, yeah. But basically into just talking, if you could just kind of address maybe your main vertical markets as well, how does that impact the, how did that perform in the fourth quarter? And if you could just go through that, that'd be great.

So are you asking what as as offices reopen how do we think about the impact on our business is that what you're is that now that the question you are pretty much for that.

Yeah, basically into just talking to physicians.

Kind of address maybe your vertical.

Vertical markets as well how does that impact how did that perform in the fourth quarter.

If you could just go through that that'd be great.

Speaker 2: You know, Anthony, what I would say is that we don't really talk about verticals, we don't discuss verticals as part of our overall operating results. There's no one vertical for us that's predominant.

So you know Anthony what I would say that we don't really talk about verticals. There's a we don't discuss verticals as part of our overall operating results Theres no one vertical for us. It's predominantly I guess is what we have said in the past. So I don't know that I wouldn't necessarily be able to answer your question from a vertical perspective from a return to the.

Speaker 2: I guess is what we have said in the past. So I don't know that I would necessarily be able to answer your question from a vertical perspective. From a return to the office perspective, it's a mix of some clients being back in, some clients not being in, some clients preparing to go back in.

This perspective, it's a mix of sometimes being backend some clients not being in some clients preparing to go back in.

Speaker 2: Sometimes those have been pushed off for in-office.

Sometimes those have been pushed off for in the in office.

Speaker 2: work that requires our teams to be on site, and that is related to the Omnicron, I guess.

Work that requires our teams to be on site and that is related to the omics on omnicom I guess out there, but I say that I think that in general our anticipation is that one of two things will happen. We live in a hybrid world where clients are going to be in the office and they're also gonna be remote and theyre going to be continuing to.

Speaker 2: out there, but I think that in general our anticipation is that one of two things will happen. We live in a hybrid world where clients are going to be in the office and they're also going to be remote and they're going to be continuing to upgrade their infrastructure, their bandwidth in particular from the networking side to be able to handle and have better collaboration capability with their teammates and with their clients.

Upgrade their infrastructure their bandwidth in particular, indeed from the networking side to be able to handle and have better collaboration capability with their teammates and with their clients.

Speaker 6: Gotcha, OK, well thanks for the color. Best of luck going forward.

So that's yeah, okay, well thanks for the color best of luck going forward.

Thank you.

Speaker 1: Your final question is from the line of Vincent Colicchio with Barrington Research.

Your final question based upon the line of Vincent Colicchio with Barrington Research.

Speaker 7: Yes, good morning, so could you give us some sense of what services should be strongest in the second half?

Yes, good morning.

So what could you give us some sense of what services should be strongest in the second half.

Speaker 3: Yeah, sure. So, you know, we expect, we have a fairly significant, we see some really nice bookings for growth and services across the entire portfolio. As Glynis just mentioned, as clients start to come back to the office, we expect to see more of our modern workplace offices, offers sort of kick in. We've seen some nice growth in those bookings and now we will start to deploy those this year.

Yeah sure. So you know we expect we're seeing we have a fairly significant we see some really nice bookings growth and services across the entire portfolio as Glenn just mentioned as clients start to come back to the office, we expect to see more of our modern workplace offices.

Or is it sort of kick in we've seen some nice growth in those bookings and were now we will start to deploy those this year in it at a higher rate lots of as Glenn has also mentioned there's a lot of networking projects that have been a bit delayed. So we have them on our books, we're ready to go but we're waiting for <unk>.

Speaker 3: at a higher rate. Lots of, as Glynis also mentioned, there's a lot of networking projects that have been a bit delayed, so we have them on our books. We're ready to go, but we're waiting for product. So we expect that infrastructure, modern infrastructure, those modern infrastructure solutions to be quite...

So we expect about infrastructure modern infrastructure, those modern infrastructure solutions to be quite.

Speaker 3: We expect those to increase this year as well. And you know, I think we're seeing a lot more focus and emphasis on modern applications. So really across the portfolio, and I should mention cyber security as well, cyber security is also growing at a very significant rate. So we're seeing pretty solid strength across the portfolio, which is exciting.

We expect those two to increase this year as well and you know I think we're seeing a lot more focus and emphasis on modern application so really across the portfolio and I should mention cyber security as well as cyber security is also growing at a very significant rate so what.

We're seeing pretty solid strength across the portfolio.

It is exciting too exciting to note.

Speaker 7: And what product categories on the hardware side offer the most opportunity to gain share in the first half?

And what product categories.

On the hardware side offer the most opportunity to gain share in the first half.

Speaker 3: Well, the biggest category for us is devices, and we continue to focus on that sort of hybrid work environment and making sure that the productivity solutions that we offer to our clients are effective. We have a significant backlog there, and then I have to say networking is a very significant opportunity for us.

Well you know the biggest category for us as devices and we continue to focus on that sort of hybrid work environment and making sure that the productivity solutions that we offer to our clients are in fact that we have a significant backlog there and and then I have to say networking is a very significant opportunity for us and.

Speaker 3: The backlog is definitely record-setting from a networking gear point of view. And so, as I said, there's a lot of opportunity for us to deploy that gear when we can get it and that'll drag a lot of services along with it.

The backlog is as a definitely record setting from a networking gear point of view and so as I said, there's a lot of opportunity for us to deploy that gear. When we when we can get it and that will drag a lot of services along with it.

Speaker 7: And, Glynis, I think you talked, per prior question, you don't talk too much about verticals, but how about client segments, enterprise, for example, versus midsize clients? How did some of those, within those categories, how did things perform in the quarter?

And Glenn I think you've talked.

Her prior question you don't talk so much about verticals, but how about client segments enterprise for example versus midsized clients.

Some of those within.

Within those categories, how things perform in the quarter.

Speaker 2: Actually, in both categories, large, small, large enterprise, and mid-market. We don't really have small, we have mid-market corporate. Performance was good.

Actually in both categories large small large enterprise and mid market. We don't really have small we have a mid market corporate performance.

Performance was good.

Speaker 2: was very strong. It was a little bit muted in public sector. I was down on a year-over-year basis in Q4. Kind of flat for the year, but in Q4 it was down. But the large enterprise and mid-market slash corporate space performed really well.

So it was just very strong there's a little bit muted and in public sector and that was down on a year over year basis in Q4 kind of flat for the year, but in Q4, it was down but the large enterprise and mid market Slash Cork corporate space performed really well.

Speaker 7: Okay, thanks for answering my questions in a nice quarter.

Yes.

Thanks for answering my questions and a nice quarter.

Thanks, Tim I appreciate that.

This concludes the insight Enterprises, Inc. Fourth quarter 2021 earnings conference call. Thank you for your participation you may now disconnect.

Yes.

Yeah.

Speaker 8: The.

Okay.

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