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    INGM
    Earnings call· Dec 2025(Q4 FY25)

    Ingram Micro Holding Q4 FY25 earnings call INGM

    Mar 2, 2026 Source

    Executive summary

    Ingram Micro Q4 FY25 — Strong Revenue Growth and Record Free Cash Flow

    Ingram Micro concluded Q4 FY25 with robust revenue growth across all regions and record free cash flow, driven by strong execution and the Xvantage platform. While a sales mix shift towards lower-margin products impacted gross margins, the company's strategic focus on AI and advanced solutions, coupled with operational efficiencies from Xvantage, positions it for future profitable growth and margin expansion. Management remains confident in navigating market challenges and leveraging its global reach.

    Highlights

    5

    • Q4 revenue grew by 11.5%, exceeding the high end of guidance.

    • Q4 adjusted free cash flow reached $1.6 billion, the highest quarterly level in over a decade.

    • Full-year 2025 net sales increased by 9.5% to $52.6 billion.

    • Adjusted EBITDA for FY25 was $1.36 billion, up from $1.32 billion in 2024.

    • Net debt to adjusted EBITDA leverage ratio improved sequentially from 2.2x to 1.0x.

    Concerns

    3

    • Q4 gross profit margin decreased by 51 basis points year-over-year to 6.50% due to sales mix shift to lower-margin client and endpoint solutions and higher growth in Asia Pacific.

    • AI-related project sales drove a 15+ basis point impact on Q4 gross margins.

    • Mobility subcategory within Client and Endpoint Solutions is forecast to be down year-over-year in Q1 FY26.

    Guidance & targets

    8
    CategoryTargetConfidence
    Net Sales
    $12.45 billion to $12.80 billion
    high materiality
    High
    Client and Endpoint Solutions Growth
    flat to low single-digit growth
    medium materiality
    Medium
    Advanced Solutions Growth
    low to mid-single-digit growth
    medium materiality
    Medium
    Cloud Growth
    double-digit growth
    medium materiality
    High
    Gross Profit
    $840 million to $895 million
    high materiality
    High
    Non-GAAP Diluted EPS
    $0.67 to $0.75 per diluted share
    high materiality
    High
    Adjusted EBITDA to Free Cash Flow Conversion
    well over 30%
    high materiality
    High
    IDA Revenue as % of Total Revenue
    double-digit percentage
    medium materiality
    High

    Segment performance

    10
    SegmentRevenueYoYQoQMargin
    Total Company
    Up 9.0% on an FX-neutral basis. Saw year-over-year increases across all geographic segments.
    		$52.6 billion9.5%——
    Asia Pacific
    Drove solid double-digit growth throughout the year. Gross margin averaged roughly 250 basis points less than the overall company average, but with much better cost to serve.
    		—solid double-digit growth——
    Total Company
    Up 9.1% on an FX-neutral basis. Exceeded high end of guidance.
    		$14.88 billion11.5%——
    Advanced Solutions
    Returned to growth on an FX-neutral basis, driven by server, storage, cybersecurity, and large-scale enterprise deals in GPU and AI infrastructure products.
    		—11.3%——
    Client and Endpoint Solutions
    Strong demand for notebooks and desktops as refresh cycle continued.
    		—8.8%——
    Asia Pacific
    Led geographic growth on an FX-neutral basis. Benefited from large enterprise, GPU and AI infrastructure projects.
    		—14.6%——
    North America
    Benefited from large enterprise, GPU and AI infrastructure projects. Saw strong growth in server and storage categories, and strength in client and endpoint solutions driven by PCs.
    		$5.10 billion9.3%——
    EMEA
    Up 5.9% on an FX-neutral basis, with growth across all lines of business, including strong double-digit growth in cloud.
    		$4.63 billion13.9%——
    Latin America
    Up 1.2% in constant currency, driven by strength in sales of client and endpoint solutions, partially offset by softer results in advanced solutions and cloud.
    		$1.08 billion6.6%——
    SMB
    Fourth consecutive quarter of sequential growth.
    		——sequential growth—

    Operational metrics

    27
    Non-GAAP Net Income
    $681.9 millionup 8.6% over prior year
    FY25
    Non-GAAP Diluted EPS
    $2.90
    FY25
    Adjusted EBITDA
    $1.36 billionup from $1.32 billion in 2024
    FY25
    Operating Expenses as % of Net Sales
    5.0%47 basis point improvement from 2024
    FY25

    Reflects benefits of cost reductions and Xvantage operational efficiencies.

    Non-GAAP Net Income
    $226.7 millioncompared to $213.1 million in the comparable period last year
    Q4 FY25
    Non-GAAP Diluted EPS
    $0.96compared to $0.92 in the same period last year
    Q4 FY25

    Above the high end of guidance range.

    Adjusted EBITDA
    $430.9 millioncompared to $418.1 million in the comparable period last year
    Q4 FY25
    Gross Profit as % of Net Sales
    6.50%down 51 basis points from the same period last year
    Q4 FY25

    Driven by continued heavy sales mix in lower-margin client and endpoint solutions, higher business growth from Asia Pacific, and impact from AI-related project sales.

    Operating Expenses as % of Net Sales
    4.41%compared to 5.15% in the same period last year
    Q4 FY25

    74 basis point improvement in operating leverage reflects continued benefits of Xvantage optimization and automation, and positive recovery via insurance proceeds.

    Adjusted Income from Operations Margin
    2.35%compared to 2.29% in the same period last year
    Q4 FY25
    Net Working Capital
    $3.6 billioncompared to $4.1 billion at the same point last year
    Q4 FY25

    Reflecting significant reductions in working capital investment.

    Working Capital Days
    24 daysimproved from 26 in the same period last year
    Q4 FY25
    Cash and investments balance
    $1.86 billion
    Q4 FY25

    Cash and cash equivalents.

    Net Debt to Adjusted EBITDA leverage ratio
    1.0ximproving sequentially from 2.2x
    Q4 FY25
    Interest Expense
    $35.8 million loweryear-over-year
    FY25

    Primarily as a result of debt paydowns.

    Term Loan Repayments
    $125 million
    FY25

    Paid down $125 million of term loan balance.

    Term Loan Repayments
    $1.89 billion
    since beginning of 2022

    Total repayments on term loans.

    Term Loan Repayments
    $200 millionincremental
    February 2026

    Repaid an incremental $200 million in February of this year.

    Xvantage Self-service Orders Growth
    over 100%versus a year ago
    FY25

    Improving productivity and enhancing customer experience.

    Xvantage Average Revenue per Customer Growth
    14%sequentially from Q3 to Q4
    Q4 FY25
    Xvantage Average Revenue per Customer Growth
    over 30%year-over-year
    Q4 FY25
    IDA Proactive Engagements
    over 0.5 million
    2025

    Assisting customers in converting opportunities.

    IDA Opportunities Converted to Orders
    over 100,000
    2025

    Worth billions of dollars.

    IDA Conversion Ratio Multiplier
    almost 3xnormal conversion ratios
    2025

    Multiplier effect on partners' outcomes.

    IDA Higher-Value Product Inclusion
    almost twice as oftennon-IDA transactions
    2025

    Solutions contain higher-value advanced solutions and cloud products.

    Share Buyback Authorization
    $100 million
    current

    Authorized for purchasing additional shares from Platinum, adjacent to follow-on offerings.

    Dividend Increase
    2.5%sequentially raised
    per quarter

    Continued to drive return to shareholders.

    Industry KPIs

    3
    MetricValueDetails
    Recurring software services mix—
    Supply demand imbalance lead times—
    End market revenue mix organic growth—

    Product announcements

    3
    ProductTypeDetails
    ETO (E-mail to Order)milestone
    Enable AIlaunch
    Sales Brief Agentexpansion

    Risks & headwinds

    6
    Sales mix shift to lower-margin productsQ4 FY25

    Q4 gross profit down 51 basis points year-over-year

    Mitigation: Expect mix to improve favorably from a margin perspective as client and endpoint solution sales moderate and we execute on advanced solutions and cloud initiatives.

    Impact of AI-related project sales on gross marginQ4 FY25

    drove an impact in Q4 of more than 15 basis points on gross margins

    Mitigation: These projects are strategically important for long-term AI accessibility and complementary services capabilities that yield greater profit.

    Tariffs, interest rates, and geopolitical uncertaintyFY25

    navigated through complex issues

    Mitigation: Tariffs are passed through; company has a track record of navigating uncertain markets due to global reach and scale.

    Cybersecurity incidentJuly [2025]

    effectively remediated within days

    Mitigation: Effectively remediated within days, demonstrating resilience.

    Mobility subcategory declineQ1 FY26

    forecast to be down year-over-year

    Mitigation: Offset by continued strong demand in PC refresh and growth in advanced solutions and cloud.

    Price increases and supply constraintsQ1 FY26

    ASPs increase

    Mitigation: Working with OEM partners on strategic buy-ins; exploring alternative solutions like build-to-order to minimize pricing impacts and leverage current inventory.

    What to watch in Q1 FY26

    5

    PC Refresh Cycle Duration

    next quarter
    Currentmiddle to back half, could go well into 2026
    Targetcontinued strong demand and unit replacement

    Why it matters

    The duration of the PC refresh cycle impacts Client and Endpoint Solutions revenue and overall mix.

    I would define it as we're in the middle to the beginning of maybe the back half of the refresh. There's still hundreds of millions of units that need to be replaced out there, which implies that there's still a refresh that could go well into 2026.

    Q&A highlights

    8

    Unpack the exact drivers for Q1 revenue guidance, specifically regarding PC refresh, AI/GPU sales, and Asia Pacific.

    Q1 Client and Endpoint Solutions (CES) growth is flat to low single-digit due to strong PC refresh comparables and a forecast decline in mobility sales. Advanced Solutions (AS) is expected to grow low to mid-single digits, driven by server, storage, and cyber, with no notable large GPU deals assumed. Cloud is guided for double-digit growth. ASPs are increasing, but supply constraints might offset some revenue growth.

    “But the compare is certainly a much bigger compare to Q1 of last year, where we also saw great strength in that category. We also had quite a bit of mobility sales in our Q1 of last year. So our mobility subcategory, which is the second biggest, we don't break out the specifics of the subcategories, but it's the second biggest within CES, and that's actually forecast to be down year-over-year.”

    asked by Erik Woodring · answered by Michael Zilis

    2 min read5 chapters

    Detailed Narrative

    01

    Xvantage Platform Evolution and Impact

    Ingram Micro's Xvantage platform, built over three years with proprietary data, a real-time global data mesh, and over 400 embedded AI/ML models, is central to its digital transformation. The platform is progressing through three phases: OpEx efficiency, top-line growth, and data-driven margin enhancement. In 2025, it meaningfully scaled critical enablement capabilities, with self-service orders up over 100% and average revenue per customer on Xvantage increasing 14% sequentially and over 30% year-over-year.

    02

    AI Strategy and Monetization

    The company is leveraging its AI Factory for product ingestion, data enrichment, intelligent pricing, forecasting, and agentic workflows, improving sales productivity and cost to serve. Its intelligent digital assistant (IDA) enabled over 0.5 million proactive engagements in 2025, converting over 100,000 opportunities into billions of dollars in orders, with a nearly 3x normal conversion ratio and higher-value products. The new Agentic Assistant, Sales Brief Agent, is being expanded globally in H1 2026 to identify new opportunities and assist with value proposition development.

    03

    PC Refresh Cycle and Market Dynamics

    The PC refresh cycle continued strongly through Q4 FY25, with double-digit growth, and is expected to extend well into 2026, as hundreds of millions of units still need replacement. However, the company is monitoring price elasticity and potential impacts from rising component costs. Management is working with vendors on alternative solutions like build-to-order to minimize pricing impacts and leverage existing inventory, benefiting from its global reach to navigate supply and demand dynamics.

    04

    Geographic Performance and Mix Shift

    In Q4 FY25, all four regions experienced FX-neutral growth, led by APAC with 14.6% year-over-year growth and North America with 9.3%. Full-year 2025 net sales increased 9.5%, with APAC driving solid double-digit growth. The company noted a significant sales mix shift towards lower-margin client and endpoint solutions and higher growth from Asia Pacific, which has lower average gross margins but also lower cost to serve.

    05

    Capital Allocation and Debt Reduction

    Ingram Micro maintained its capital allocation strategy, focusing on debt reduction, organic investment in Xvantage, and shareholder returns. The company repaid an additional $200 million of its term loan in February 2026, bringing total repayments to $1.89 billion since early 2022. This deleveraging improved the net debt to adjusted EBITDA ratio to 1.0x. The dividend was also sequentially raised by 2.5% per quarter, and a $100 million share buyback was authorized for additional shares from Platinum.

    AI-generated summary of the company’s earnings call. Not investment advice.