all regions delivered double-digit gross profit growth. North America grew 16% driven by cloud and core services. EMEA increased 13% driven by ongoing transactions in UAE and Saudi Arabia, where we act as the agent. And AIPAC grew 67% fueled by acquisition contributions attributable to our cybersecurity related offerings. As a result, total gross margin was 21.7%, an increase of 60 basis points. Adjusted SG&A increased 12%, primarily due to an increase in variable compensation and acquisitions. During the quarter, we implemented disciplined cost controls, including a pause in back and mid-office hiring, excluding sales and technical talent as prioritized investments in our key growth areas. This resulted in adjusted EBITDA of $190 million, dollars, up 29%, while margin expanded 90 basis points to 7.9%. And our adjusted diluted earnings per share were $3.86, up 44% in U.S. dollar terms and 43% in constant currency. For the quarter, we used $12 million of cash flow from operations, and year-to-date we generated $20 million, dollars, which was in line with our expectations and our typical seasonality. We continue to anticipate cash flow from operations in the range of $300 to $400 million. In Q2, we repurchased $75 million in shares and have $149 million in remaining authorization, which we intend to exhaust before the end of the year. The projected $299 million of share repurchases for the year would represent over 90% of our projected free cash flow. We exited Q2 with total debt of approximately $1.5 billion compared to $1.3 billion a year ago with a net leverage ratio of 1.7. The year-over-year increase in debt was primarily related to acquisitions and share repurchases. We have ample liquidity to meet our needs, and as of the end of Q2, we had access to the $2 billion capacity under our ABL facility, of which approximately $1 billion was available. Our adjusted return on invested capital for the trailing 12 months at the end of Q2 was 17.3% compared to 15.5% a year ago. Now turning to guidance. As we consider our first-half performance and the evolving operating environment, our guidance incorporates the following assumptions and considerations. For the year, we expect our corporate and large enterprise client spending to improve from last year. Hardware gross profit will be up low single digits as component costs are impacting demand, particularly for devices. We expect core services gross profit will grow in the low double digits with contribution from our recent acquisitions as well as improvement in our organic business. We anticipate cloud gross profit to grow in the high teens to low 20% range as we move past the majority of the partner program changes we have previously discussed. We will continue to prudently manage SG&A and expect growth slightly slower than gross profit. We intend to continue to pause M&A and exhaust the remaining $149 million share repurchase authorization in 2026. And finally, as we look ahead to the fourth quarter, we'll lap the acquisitions completed last year and work through the remaining impact of the Google Partner Program changes. We're also remaining prudent on our Q4 outlook given uncertainty associated with memory price increases, supply chain disruption, and macroeconomic factors. While these factors moderate the year-over-year growth profile, we continue to expect solid execution across the portfolio, with the fourth quarter representing our lowest adjusted diluted earnings per share growth of the year. Considering these factors for the year of 2026, our guidance is as follows. We are raising our gross profit growth expectations to 8 to 10 percent and our gross margin will be approximately 21.5 to 22 percent. Excluding stock-based compensation or adjusted diluted earnings per share will now be between $12.20 to $12.70. This represents approximately 16 percent growth at $12.45 midpoint compared to the 2025 adjusted diluted earnings per share of $10.75. Finally, we expect cash flow from operations in the $300 to $400 million range. Our guidance includes interest and other expenses to be approximately $95 million, an effective tax rate of 25.5% to 26.5% for the full year, capital expenditures of $20 to $30 million, and an average share count for the full year of approximately 30 million shares. This outlook excludes stock-based compensation, excludes acquisition-related intangible amortization expense of approximately $83 million, assumes no acquisition-related costs, severance, and restructuring or transformation expenses, and assumes no change in our debt instruments and no meaningful change in the macroeconomic outlook. I will now turn the call back to Jack. Jack?

Thank you, James. before we conclude i want to take a moment to thank our teammates our clients and our partners our strong performance this quarter reflects the dedication expertise and commitment of our people the trust our clients place in us every day and the strength of the partnerships that help us deliver exceptional outcomes at its core the one insight plan is around aligning the company around our greatest opportunities we are investing in high growth priority growth markets building a more scalable and efficient operating model, and strengthening our talent and technical capabilities. Taken together, these actions will improve agility, enhance execution, and position us to deliver stronger long-term growth and profitability. I'm proud of what we've accomplished so far, but I believe the greatest opportunity still lies ahead. While we have a lot of work to do, we are building from a position of strength, with differentiated market position, a clear strategy outstanding talent and a culture committed to winning for our clients these strengths give me confidence in our ability to execute and deliver our next phase of growth now it's all about focus and execution thank you for your continued support of insight we look forward to updating you on our progress uh next quarter this concludes my prepared remarks and i will now open the line for your questions we will now begin the question and answer session if you would like like to ask a question, please press star one to raise your hand.

To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from Joseph Cardoso with JP Morgan. Your line is now open. Please go ahead.

Hey, good morning, everyone, and congrats on the solid results this morning. Maybe for my first one, Jack, you obviously kind of laid out the number of strategic initiatives that you kind of hinted at last quarter. You also laid out last quarter encompassing investments, restructuring, and reorganization across the business, while also emphasizing kind of a North Star commitment to operating leverage. Maybe just How are you thinking about balancing those two, especially near term, just given maybe potential risk related to elevated investments or transitory disruptions, potentially pressuring the leverage in the interim? And do you even see that as a fair concern? And then I have a follow-up.

No, I mean, obviously, it is a balance, as you point out. And we have opportunities to improve operating leverage. We've identified many of them already. And our intent is to balance out about balancing the areas where we find efficiencies and reinvesting part of those efficiencies to fuel growth. And that balance, which we monitor every week, every month, every quarter, is what we've already started to do. We're going to invest within our guidance, and we will invest with a focus of always improving operating leverage. But we've identified a number of areas for operational efficiency that give us opportunity to invest in fuel for growth. So that's the balancing out the leadership team is focused on every day.

Got it. And then maybe as my second one, and maybe this is a Jack James combo question here, but just relative to the four-year guidance, when I take a look at it, it implies a deacceleration in both revenue and gross profit growth into the second half. And maybe what even appears to be a decline in operating profit and earnings, if I'm kind of doing my math right, into the second half. Maybe can you flesh out the drivers behind that dynamic into the back half and how we should think about maybe the upside and downside risks around it?

Let me start and then I'll hand over to James. As we've said for some time, we always expected a stronger first half and second half, and Q2 was always going to be a high watermark for us. We've also talked last quarter about the fact that we still have some compare on the Google site in Q4, some of the remaining M&A will come off in Q4 as well, and a tougher compare in Q4. So that is really the reasons why we always expended a stronger first half than second But also I will say we are being prudent in our guidance, just as we were last quarter, and there's still a lot of uncertainty, memory prices, macroeconomics. So, we believe some prudence here is warranted. Jay?

Yeah, I think the only thing I would add to that is, Joe, as we look at this, as we exited the first half, you know, I think the underlying demand dynamics are strong as we head into the second half. But given the factors that Jack just outlined, I think it's really important for us to maintain that prudent stance, particularly in Q4 as we think about Q4. We do expect both quarters will post growth, but the comparison for us as we think about this is as we progress through the year, they do get more challenging from a year over year perspective. So just as we look at the overall second half, I think the underlying demand dynamics remain strong but there's some there's some things that we have to navigate in uh in the second half and so i think prudence uh prudence in our guidance is is still is still important nope there guys thanks for the color appreciate the questions this morning congrats again bye thank you your next question is from adam tyndall with raymond james your line is now open please go ahead okay thanks good morning and i want to start with the congrats especially in light of peer reports uh these results are really really impressive um jack i i want to ask on sort of your

three different things to improve so a multi-part question bear with me uh but the first one you talked about was that you're too decentralized you want to be more connected the question there would be what that would entail especially from a systems standpoint are we talking about erp systems, stuff like that, and the timing to that. The second, and I'll kind of combine these two, but you talked about investing in organic and then creating greater efficiency through AI. So the question on those two would be sort of the timing and size of that investment in the net implication on margin. I imagine that, you know, there's some investment, but some offset. Are we entering into a period where margins might take a pause or, you know, have just kind of set expectations on profitability going forward. Thanks.

Yeah, so on the One Insight operating model, there are multiple levers. We already just in the first three or four months I've been here are operating as a much more globally integrated leadership team across the globe, bringing the strength of our EMEA, APAC, and North America teams together, leveraging best practices, looking at things that have been done multiple times and doing them one way with best practices. There have been many opportunities, including, for example, our AI sales coach. We had multiple efforts underway. We have now one, leveraging the best AI engineering and capabilities and developing one. And just like that example, there are many that our team is already focused on. We are looking at global processes and transforming a number of our systems over the next few years to harmonize our data and harmonize our processes in a number of areas. So, you know, we've improved the use of our CRM system globally already just in the first three months. So it's a combination of, you know, the culture of the team coming together, the operating model, which we've got, you know, we've got more work to do, and our systems and processes. So we're looking at all levers to make sure we operate as an integrated team. But first, it starts with culture. In fact, I've been very, very pleased with how our team has come together in the first three or four months globally to really collaborate and work to the best, you know, to drive the best results for our clients, our shareholders, and our partners. The second part, Adam, can you – so the second part, Adam, was on margins, is that Yeah, basically, combining – Go ahead.

Go ahead. Yeah, just combining, like, the investment piece versus the cost savings piece, you know, Are we entering into a period of more investment where margins might take a pause, or do you have AI offsets, just to kind of set expectations on margins for investors?

Yeah, yeah. Our focus is on improving our operating leverage, you know, continuously every year. And so any investments we make will be in the context of improving our margins and our operating leverage. And we believe there is ample opportunity for us to do both at the same time and not we are not going to compromise operating leverage in the fuel investments. We believe and we have now proof points and initiatives to execute against that and drive the operating leverage that I've mentioned on the call, while at the same time finding investments in areas like cloud and data and security and building our technical and engineering talent and, you know, adding account executives where we need more coverage and so on.

And Adam, I would just add a little bit to that on the operating expense leverage side. You know, certainly Q2 marked a very strong OPEX leverage. As a percentage of gross profit, our operating expenses were just a little north of 65%. That's a good number based on Insight's historical performance. But if I look overall at the first half, we are just a little north of 67%. there is my view is that there's plenty of room in the operating expenses as we drive efficiency to not only reinvest some of those dollars back into the priority areas that Jack has mentioned, but also be able to pass that directly and continue to expand EFO margins. So I think that that footprint certainly gives us the ability to do both, especially as I look out over the shorter term period of time.

That's great, Connor. Thanks, James. Maybe just to follow up, Jack, the decision to continue to pause M&A and focus on share repurchase. I think I can't hold my cards too close to the vest. You probably know how I feel about that. But maybe just take us through that decision. And I am kind of interested. It obviously makes sense now, But as you evaluated the M&A portion, there was probably things that down the road could make sense. I just wonder if you kind of like squint your eyes and give us a little bit of preview on, you know, where in M&A over time, obviously not right now, but over time it could make sense for, to focus on M&A. And James, if you could just dovetail in the free cash flow inflection and the back half to this, you know, what's driving that. It's just a big improvement. So just give us confidence on that.

Yeah, so my first four months, Adam, have been solely focused on our organic business and building our three-year plan. And, you know, our three-year plan, I believe in building plans that are organic plans. M&A comes on top if and when you find it. But you fundamentally, you know, as a company, we're going to have a three-year plan that is organic. And then if and when in the future we find M&A opportunities that will be, in addition, They will support the plan and drive, but we're building it, and, you know, first and foremost, you have to have an organic business that is working well, and that's been my sole focus. I have spent no brain cycles on M&A in my first four months. Now, at some point in the next, you know, years, do we embark on M&A? We will see. We will look at opportunities. When we look at opportunities that will be aligned to our strategic priorities, which I had loud on the call. But right now, I haven't put any brain cycles on M&A. We've got plenty of work to do on our three-year plan, and that's what I'm focused on right now. Yeah.

On the operating cash flow, Adam, it's in line to my expectations. So if we look at the overall first half, it was positive $20 million. Last year, at the same time, we were negative, pretty close to 100 million negative. So we generated just a little over 400 million in the second half last year. So when I think about our first half performance and what we have in front of us, I think it's my overall guidance of 300 to 400 makes sense. It's more of our typical linearity. And the reason of that is particularly around Q2 and the timing of large partner payments that impact the cash flow in Q2, that we then generate a significantly more amount of cash in the second half. So everything I see on cash flow, I think, makes sense in terms of what we would generate in the second half.

That's a great caller. Thanks, gentlemen.

Thank you. Thanks, Adam.

Your next question is from Luke Morrison with Canaccord Genuity. Your line is now open. Please go ahead. Hey, guys.

Thanks for taking the question here. So maybe just starting on hardware, obviously, it's been a bright spot, driving a lot of the momentum here. A lot of that is presumably ASP-driven. Can you help us just decompose what you saw in the quarter between price and unit volume and how that compares to the low single-digit unit decline you framed coming into the year?

Yeah. Look, let me start. Let's break down devices from infrastructure. On the devices side, we have very strong growth. We do see a slight decline in units, and still we see average selling prices up. The strength was especially in laptops, much more than desktops or peripheral. The strength for us really was in the laptop business. And we continue to see revenue growth going forward, but the number of units I think will be continuing to decline for the next few quarters, but supported by new strength and average selling price. And we still see momentum in Windows 11 refresh, but also clients moving to AI PCs that are now a meaningful portion of the purchases. On the infrastructure business, that we see both strength in units as well as very strong strength in selling price. We see that as a stronger momentum for a longer period of time. I think we're going to see, especially in servers and storage and networking, strength for some time here, and our clients modernizing their on-prem capabilities and balancing out with their cloud platform. We see strong growth in cloud and on-prem cloud outpacing, but the clients are definitely investing in their data center, and we don't currently see a pause in that investment. James?

The only thing I would add to that is we do – you know, Jack mentioned this, but we do expect, you know, unit decline as it pertains to devices offset by higher ASPs in the second half, but we do expect devices will still grow. It will just moderate from the strong levels we're seeing in Q2 when we look at the overall second half. And just, Jack mentioned this, but just to be clear, in Q2, we saw in the device side, you know, units were down very, you know, very low single digits, but specifically around notebooks, we actually saw an increase in units and notebooks. So the overall devices were driven more by declines in units and in handhelds and desktops.

Got it. Super helpful. And then maybe just to follow up here and this kind of tries to get at sort of like how durable this cycle might be you know there's a view in the market that uh enterprises are pulling ai workloads back on premise for you know security latency cost reasons um surrounding ai and that this is driving a structurally stronger longer term server cycle i'm curious are you seeing that discussion in your own pipeline as sort of a genuine workload shift there, or does it look more like simply supply-driven pull forward to you?

No, we see strength. The server business is very, very strong, and we see continued momentum in the server business. I would agree with your first hypothesis there. That's what we're seeing as well.

Yeah, and, Luke, I would just add that, I mean, this is the great position that we currently have. If workloads do start significantly repatriating, we have, you know, the ability to architect, deploy, and manage those with our customers. And then, you know, if cloud is – we fully expect cloud to remain strong for quite some time, you know, what I would say is the underlying demand metrics there are healthy. And we can obviously demonstrate our strength there as well. So Insight is, I think, positioned to take advantage regardless of where the trend goes.

Got it. That's great. And maybe if I can just flip one more in, you know, just on the E7 launch partner agreement, can you just help us understand sort of the monetization opportunity there? Is the near-term opportunity mostly resale economics? You know, is it services attached and deployment attached on that? what's like a time frame for that becoming material, just thinking through that partnership.

Yeah, we had a very strong quarter with Microsoft on the back of a strong quarter in Q1. You know, we see strong strength in Azure, in Co-Pilot, E7 with Agent 365, which is a very, very strong tool and capability to discover and manage your agent landscape. I think most companies deploy it and find out they have a lot more agents in their environment that they now need to manage and manage the consumption associated with the agents and the security associated with it. So our clients are embracing the solution. Co-Pilot is now a very, very strong product. We've deployed it, obviously, internally and have almost all of our employees, you know, trained and using it. So we see strong demand there, and certainly Q2 with Microsoft was very strong. And for us, it's strength in resale, but also all the associated services, deploying co-pilot, migrating workloads to Azure, migrating data to Fabric, deploying Agent 365, five, the security associated with it. So we see strength for us both in the resale, but also in the services to help our clients get to value with this.

Understood. Thank you. This brings us to the end of the question and answer session, which concludes today's call. Thank you so much for attending. You may now disconnect.