Jack: We will share more on our execution plan next quarter. As we look ahead to 2026, we are pleased with a strong start to the year and maintain a cautiously optimistic outlook. Given the ongoing complexity of the environment, including geopolitical risk and supply chain challenges, and the fact that I'm three and a half weeks in, we believe a prudent approach is warranted, and we are holding the 2026 guidance set last quarter. With that, I'll turn the call over to James. James?
James: Thank you, Jack, and good morning, everyone. Our Q1 results exceeded our expectations for the quarter. Net revenue was $2.1 billion, an increase of 1% in U.S. dollar terms, and a decrease of 1% in constant currency. The increase was driven by hardware and services partially offset by a decrease in on-prem software as clients shift to cloud-delivered software. As a reminder, cloud-delivered software is presented net in agent services revenue. Hardware revenue increased 7% with growth in both devices and infrastructure. Core services revenue was up 11% with growth across acquisitions and the organic business with stronger contribution from the acquisitions. Gross profit increased 14% with double-digit growth in all geos. Cloud gross profit was $139 million, an increase of 35% with growth in both SaaS and infrastructure as a service, as well as security software from our Securo acquisition. Insight Core Services gross profit was $86 million, an increase of 19% due to gross margin expansion in our organic business, as well as contribution from acquisitions. Hardware gross profit was up 3%, while gross margin declined 50 basis points due to client mix. As a result, total gross margin was 21.7%, an increase of 2.4 points. Adjusted SG&A increased 9% due to an increase in variable compensation and expenses from acquisitions. This resulted in adjusted EBITDA of $152 million, up 27%, while margin expanded 1.4 points to 7.1%. And adjusted diluted earnings per share were $2.88, up 26% in U.S. dollar terms and 25% in constant currency. For the quarter, we generated $32 million of cash flow from operations, which was in line with expectations. For the year, we continue to anticipate cash flow from operations in the range of $300 to $400 million. In Q1, we repurchased $75 million in shares and have $224 million in remaining authorization. As Jack mentioned, we are adjusting our capital allocation priorities and will pause M&A for the balance of the year. We will shift our focus to repurchasing shares and intend to exhaust the remaining authorization of $224 million 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 Q1 with total debt of approximately $1.5 billion compared to $961 million a year ago. 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 Q1, we had access to nearly all of 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 Q1 was 16.7% compared to 16% a year ago. As we consider the remainder of 2026, we continue to take a prudent approach to our outlook in light of a complex operating environment, reflecting the following considerations in our guidance. Adjusted diluted earnings per share will be more heavily weighted towards the first half. For the year, we expect our corporate and large enterprise client spending to remain subdued. Hardware gross profit will be approximately flat as component costs are impacting demand. We expect hardware revenue to grow faster than gross profit, primarily due to client mix. We expect core services gross profit will grow in the high single digits as organic business returns to growth, coupled with contribution from our recent acquisitions. We anticipate cloud gross profit to grow in the low double digits as we move past the majority of the partner program changes we have previously discussed. And we will continue to prudently manage SG&A and expect growth slightly slower than gross profit. Finally, we intend to pause M&A, and we also intend to immediately begin to exhaust the remaining $224 million share repurchase authorization in 2026. Considering these factors, for the full year of 2026, our guidance is as follows. We expect to deliver gross profit growth in the low single digits and that our gross margin will be approximately 21.5%. Excluding stock-based compensation, our adjusted diluted earnings per share will be between $11 and $11.50 with a bias towards the high end of the range. This represents approximately 5% growth at the 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 $90 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 severance and assumes no acquisition-related cost, severance and restructuring or transformation expenses, and assumes no change in our debt instruments and no meaningful change in the macroeconomic outlook. I'll now turn the call back to Jack.
Jack: Jack? Thank you, James. Before we wrap up, I want to acknowledge the tremendous work our teammates have done this quarter. There's been a lot of progress, and it reflects the focus, commitment, and collaboration happening across our company. At the same time, we're very clear-eyed. There's still a lot of work ahead of us. We have the right strategy, and strong capabilities across what we resell, design, and deliver, including leading AI services and capabilities. The priority is now focus and execution, accelerating our growth and operating with greater efficiency and discipline. I'm honored to step into this role and excited about the opportunity ahead. I look forward to spending more time with our teammates, our clients, our partners, and our investors listening, learning, and executing against our priorities. Thank you for your continued support and for joining us today. This concludes my comments and we will now open the line for your questions.
Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Adam Tindall with Raymond James. Your line is open. Please go ahead.
Adam Tindall: Okay, thanks. Good morning and congrats, Jack, on joining the company. Looking forward to working with you. I thought your background was particularly interesting with Accenture and services, and I wonder if you might just spend a little bit of time You know, talking about the opportunity that you see at Insight and what you may bring from your experience at Accenture, particularly around the services portion of the business. And also, do you think, you know, there's opportunity there more organic or inorganic? I know, obviously, acquisitions are paused for this year, and that makes a lot of sense. But maybe just kind of describe how you see that services business evolving. Thanks.
Jack: Adam, thank you and thank you for the partnership and the relationship. So yes, I started my career in the software industry and then over 29 years at Accenture with a variety of roles, including leading our global consulting business, our industry programs and functional programs over the last three and a half years. Obviously, when we look at the portfolio at Insight, This is not an either-or strategy. Hardware, software, and solutions are critical to our growth, and we'll be focusing both on the resale business and the services business. We have tremendous capability in services. We've done some tremendous acquisitions, have been very positively embraced by the capabilities, and for the remainder of the year, my focus is on the organic growth of our business. I will be spending a lot of time with our services business, making sure we have the right offerings. We invest in areas like cloud, data, AI, security, as well as some of the hybrid scale capabilities, including merging that together, linking our services and our hardware capabilities and engineering capabilities. This year, my focus is on the organic business, getting additional organic growth. And, you know, we have a lot to build upon here, some great capabilities, and we need to invest in them, and I will be focused on getting organic growth through the remainder of the year.
Adam Tindall: Got it. Okay, that's helpful. And maybe just kind of continuing that thought, obviously, you know, this year is going to be focused on share repurchase, but as investors, kind of get a feel for your philosophy going forward. I wonder if you might reflect on some of the acquisitions that you've kind of studied at Insight, you know, granted, understand you're very early here, so maybe an unfair question, but as you kind of parse through the various acquisitions over the years at Insight, are there ones that, you know, seem to make kind of more sense and less sense going forward, just as, you know, kind of investors think about the potential for future acquisitions? You know, where would you particularly focus and where might you kind of, you know, move a little bit further away from?
Jack: Yeah, I'm pleased with the capabilities that have been acquired over the last few years, whether it's InfoCenter or SADA or Securo in Asia Pacific or Aspire 11. All are very much pointed into the AI space and helping our clients get value from AI. They're very aligned with the areas that I'm going to be prioritizing. And again, we're going to point a lot of our focus and investment into helping our clients get value from AI. And so cloud, data, AI, security, hybrid cloud and the infrastructure that goes with it, those are going to be the priority focus areas. The acquisitions we've made, I continue to be impressed the more I meet with clients and our teammates understanding the capabilities, the engineering capabilities, the knowledge of our hardware and software partners' technologies. But I'm pleased with the acquisitions we have, great capabilities, and now the focus on really leveraging what we have to the best of our ability.
Adam Tindall: Okay. Just a quick clarification for James. As you thought about guidance for the year, maybe just speak to what you're seeing in terms of current trends, especially related to the potential for demand being pulled in, given the memory cost issues, supply issues, and potential for future price increases, and how that informed your thoughts on the full year guide. Thanks, guys.
James: Yeah. Thanks, Adam. You know, we're maintaining a similar approach to what we had last quarter, which is we continue to take a prudent stance on our outlook for the year. Q1, as we mentioned, exceeded our expectations. It was a strong start to the year. So we're pleased with that. In the cloud space in particular, real strength in the quarter. The comparison are a little easier in Q1. They do get more challenging as the year progresses, kind of across the board, but you'll see it in the cloud space in particular. But we did really, really well in cloud, and I like the momentum that I'm seeing there, at least as it moves into Q2. Hardware, you know, it was largely on our expectations in the quarter. We exited the quarter with strong backlog. It's actually More than elevated, I would say it is similar to the levels that we had exiting COVID. So it's the most elevated that it has been in multiple years. So we're carrying that into Q2. Bookings were strong in Q1. The bookings have started with similar patterns in Q2. The challenge that we have there is really determining when that backlog will flush through and when we'll realize it from a revenue standpoint. Memory prices have not settled. You know, there's still a lot of noise with memory and cost increases and then extended lead times as well. So that creates a lot of just complexity when it comes to the hardware space. And then on core services, you know, good, obviously very strong GP growth. Some of that is driven by gross margin. But the underlying revenue was 11%. That is also strong. There's strong contribution from the new acquisitions. We're still focused on the organic business, and as Jack and I have looked at that, we still have work to do on the organic services side of the house, and we're prepared to do that. But that's what's gone into the guidance and the outlook. You know, I would expect Q2 to moderate from the Q1 levels, just for nothing else, just based on the comparison to last year. But we're pleased with the start of the year. We're really focused on Q2, Adam. We want to deliver a strong Q2 and have a good setup for the second half. But we're going to maintain that prudent approach as of now, and we'll come back to you at the end of Q2 and give an update on what we see for the rest of the year.
Adam Tindall: Makes sense. Thank you so much.
James: Thanks, Adam.
Adam Tindall: Thanks, Adam.
Operator: Your next question comes from the line of Joseph Cardoso with JP Morgan. Your line is open. Please go ahead.
Joseph Cardoso: Hey, good morning. Thanks for the questions. Maybe for my first, if I could, Jack, nice to hear from you and appreciate all your early remarks here. But given where you're coming from, you know, I'm just curious if you could share a bit more specifically with fresh eyes on the business, you know, where do you see the one or two biggest low-hanging opportunities at Insight that you think are underappreciated and
Jack: can really go after relative to the priorities that you outlined in your prepared remarks and then i have a follow-up uh thank you joe so uh let me touch on three things the first one is organic growth uh we have tremendous opportunity we're going to continue to invest in the capabilities we've purchased and i mentioned the aries cloud data ai security hybrid cloud We're going to continue to use AI to support our sales execution. There's tremendous opportunity there, and continue to invest in enabling our sales, pre-sales, and engineering capabilities to be even more impactful in front of our clients. So that's priority number one. We've got opportunities on organic growth. I'm still not pleased with where we are in our organic growth in the services business, but we've got great capabilities. We've got to leverage them in the right way, and that'll be a key focus The second area is operating leverage, and we're going to continue to focus on that, be it the use of AI and technology internally. We've done a lot of progress there, but there's more work to do, as you can imagine, deploying AI to automate and and drive much more flawless execution throughout the entire enterprise. We're going to continue to leverage our global delivery centers that we've built in multiple locations. We're going to continue to look at our operating model. I've talked to our teammates about OneInsight and leveraging our global scale more efficiently. So that's part number two, operating leverage. And three is obviously capital allocation, and I've talked about that. We think investing in our stock right now So that's going to be our focus for the year. So those are the three areas, Joe.
Joseph Cardoso: No, appreciate it. And then maybe James, if I could just want it to circle back on the cloud outlook here. You know, I appreciate the hard comps as you kind of progressed through the year, but as we think about the starting point here in the March quarter, you know, if I look back historically, typically you, you're able to deliver roughly like 20% ish. of the total gross profit in the first quarter itself. You know, maybe if we take a step back, because I know there's a lot of moving pieces, is there anything that we should be keeping in mind around the seasonality of the business as we think about 2026? Just because I think if we were to extrapolate that data point, it would imply a pretty strong 26. So I'm just trying to make sure that I'm not misthinking anything, just given some of the moving pieces that we've seen over the past, you know, 12 months plus or so.
James: Yeah. Yeah, it's a great, great, great question, Joe. And, you know, seasonality for us, particularly in the cloud space, has changed a bit, especially since the SADA acquisition. If you rewind prior to the SADA acquisition, it very much followed Microsoft with a very strong Q2. That is historically what we've seen. Post the SADA acquisition, it balanced more out between Q2 and Q4. Um, and then last year with the partner program changes really created noise in, in the seasonality with those partner program changes being more heavily weighted towards the first half of the year. So the, there, there is, if you look over the last couple of years, there really is no, really not a pronounced seasonality per se. Um, but I would still expect just generally, if you, if you wipe out the compares. On a normalized basis, Q2 and Q4 would typically be our stronger quarters, just from a total volume standpoint. In Q1, in particular, what we saw is real strength in Microsoft and CSP in particular. And that's representative, I think, of the strong pivot that we have made in the Microsoft business. I would say Google, and I called this out, I would say in our Google practice, There's still work to do. We are still building, you know, that corporate and mid-market base in cloud. And so there's a little bit with SADA, there will be a little bit of a, if you will, still an impact in the second half, in particular in Q4 as we continue to build the base because of the seasonality associated with Google now with that business in Q4. And so good start to the quarter, to the year, I would say, Joe. I think we're carrying momentum into Q2, but there is still some noise in the second half, even as it pertains to cloud.
Joseph Cardoso: Got it. Appreciate all the thoughts. Thank you.
Operator: Okay. There are no further questions at this time. This concludes today's call. Thank you, everyone, for attending. You may now disconnect.
