Ingram Micro Holding Q3 2026 Earnings Call Transcript

Ingram Micro Holding (NYSE:INGM) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=xg4ClnOx

Summary

Ingram Micro Holding reported a record third quarter, with net sales up over 20% year-over-year, driven by strong growth across all business lines. Advanced Solutions grew 40% due to high demand for AI infrastructure and GPUs.

The company raised its fourth-quarter and full-year 2026 guidance, indicating confidence in continued robust performance. It expects Q4 net sales between $17.5 to $17.9 billion, reflecting 19% growth at the midpoint, including the impact of an extra week in the fiscal year.

Strategic initiatives such as the Xvantage platform are enhancing productivity and operating leverage, with self-service orders and AI-driven solutions becoming significant contributors to revenue.

Operational highlights included increased customer engagement on the Xvantage platform, with revenue per customer up 39% and self-service orders accounting for 70% of the total.

The company is focusing on expanding its role beyond distribution to act as an intelligent operating system for B2B, leveraging AI to manage complexities in the technology ecosystem.

Financial metrics showed a 26% increase in non-GAAP net income on an FX-neutral basis and significant improvement in operating expense as a percentage of net sales, demonstrating effective cost management.

Ingram Micro Holding continues to see strong demand in AI and lifecycle services, with plans to optimize supply chain services and expand ITAD and repair capabilities.

The company ended the quarter with an improved net debt to adjusted EBITDA leverage ratio of 1.9 times, reflecting strong cash flow and financial discipline.

Full Transcript

OPERATOR

Welcome to Ingram Micro Holding’s third quarter 2026 earnings conference call. I’ll now turn the call over to Willa McManmon, Vice President of Investor Relations. Please go ahead.

Willa McManmon (Vice President of Investor Relations)

Good afternoon. Before we begin, I would like to remind you that today’s presentation may include forward-looking statements within the meaning of applicable securities laws. These statements reflect our current views and expectations regarding future events including, but not limited to, financial performance, strategic initiatives, market conditions, and regulatory developments. Forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control.

Actual results may differ materially from those expressed or implied in these statements due to a variety of factors including changes in economic conditions, interest rates, competitive pressures, and other risks detailed in our most recent filings and public disclosures. We undertake no obligation to update or revise any forward-looking statements to reflect new information or future events except as required by law. In addition, today’s discussion may include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in our earnings materials which are available on our investor relations website. With that, I will now turn the call over to Paul.

Paul

Thank you, Willa, and good afternoon everyone. I’m extremely pleased with our performance in the third quarter. Last quarter we delivered the best second quarter in Ingram Micro Holding’s history. This quarter we built on that momentum and delivered a record third quarter, exceeding our guidance on all financial metrics. We are also raising the fourth quarter and full-year 2026 guidance that we provided at our Capital Markets Day in September. This quarter’s execution and the increased guidance reinforces the confidence we shared in September.

Ingram Micro Holding is increasingly becoming a different company, combining unmatched global reach, deep technology expertise, and trusted relationships with an intelligent operating system that is changing how we go to market, our customers grow, and how value is created across the technology ecosystem. Mike will cover the financials in detail, but I’d like to underscore the factors that drove the strength in the quarter. First, demand remains healthy and our growth was broad based. Net sales grew more than 20% year over year with double-digit FX-neutral growth in three of our four regions and double-digit growth across all lines of business. Advanced Solutions was our strongest contributor, growing 40% year over year with another quarter of strong sales of AI infrastructure and GPUs.

Lifecycle services, which includes our renewed supply chain services and our IT asset disposition and reverse logistics and repairs business, grew 35%. Cloud grew 30% and continued to contribute a gross profit share well into the teens. Client and endpoint solutions grew 10%. Growth was also healthy across customer segments. Second, we continue to demonstrate that we are delivering both growth and operating leverage. The platform investments we have made with Xvantage are helping us improve productivity and scale the business, with operating expense as a percentage of net revenue improving even as we continue to invest in future opportunities. And third, we are seeing growing evidence that our strategy is working as we expand our role beyond traditional distribution to become the intelligent operating system at the center of the global technology ecosystem.

That positioning is a result of years of building an AI-native platform with 8 patents approved and more than 30 pending, a real-time data mesh capturing roughly 250 million events a day, and more than 400 AI and machine learning models that turn those signals into intelligence and ultimately business outcomes. At Capital Markets Day, we described this evolution simply: Scale is our advantage. Intelligence is the multiplier. We are moving from traditional distribution to becoming the industry’s first intelligent operating system for B2B. Our reach spans more than 165,000 customers and over 1,500 vendor partners across six continents with the ability to serve 90% of the world’s population. And our intelligence allows us to provide solutions to our customers at the speed of change.

And speed matters because the industry keeps evolving. Distribution began with hardware—vendors to distributors to resellers to end customers—with a model built around buying, holding, and selling inventory. Next came cloud, subscriptions, and consumption, which required new ways of doing business and a higher services element. Now AI is adding another layer of intricacy. Vendors are becoming customers, customers are becoming vendors, and businesses need solutions that combine infrastructure, software, cloud services, and financing.

Complexity is rising faster than the industry can absorb, and we are building an intelligent operating system to solve for this ever-growing complexity for our customers. For decades, distribution connected supply to demand. Today, Xvantage, powered by the data and signals flowing through it, connects demand to supply, turning these activities across the ecosystem into actionable opportunities. This has been a deliberate multi-year journey, and we are executing it in two phases. The first phase is Xvantage, the platform that connects our vendors, our partners, and their customers and digitizes and automates how they do business with us on global scale.

The second phase is our intelligent operating system built on that platform foundation. Every transaction on Xvantage creates context, and our intelligence layer connects that context to real-time signals such as renewals, buying patterns, and recommendations. It turns those signals into proactive demand generation, action, and ultimately outcomes. We are no longer just processing transactions, we are capturing intelligence, and that makes every interaction smarter for our vendors, our customers, and Ingram Micro Holding.

In Q3, we continue to see strength in the platform foundation across our 22 platform countries. Average revenue per customer on Xvantage increased 39% year over year. Self-service represented nearly 70% of orders, up more than 10 percentage points. Email-to-order volume increased 33%, processing approximately $1.6 billion of revenue, and time spent per visit increased 40%. Additionally, our Intelligent Digital Assistant, IDA, continues to scale as an important part of our model, with IDA-driven revenue hitting our goal of 10% of global revenue.

These results demonstrate deeper customer engagement and show that Xvantage is becoming increasingly embedded in how our customers operate. The significance is straightforward: Greater self-service lowers transactional costs, deeper engagement expands selling opportunities, and more intelligence improves the quality and speed of commercial decisions. We are now applying this intelligence to improve pricing, prioritization, and demand generation. During the quarter, we launched ordering via Model Context Protocol, or MCP, across 12 countries so customers can interact and transact with Ingram Micro Holding through AI assistants such as ChatGPT, Claude, Gemini, and Copilot, or through their own agents. With the controls and auditability built into Xvantage, anyone can use MCP, but what makes ours different is it connects securely into Xvantage, giving customers’ agents access to the global data and intelligence we have built.

As one of our customers, Cloud Managed Networks, put it, the real differentiator is the intelligence it provides, and customers actively using MCP are growing their business with us at nearly four times the rate of those that are not integrated with our platform. That’s the shift from digital commerce to agentic commerce, where intelligence moves from insight to action. Turning to AI, we continue to see strong demand for GPUs and AI infrastructure. Our customers are moving into high-performance computing while focusing on governance, compliance, and security to implement real-world AI use cases. Through Enable AI, Xvantage, and our relationships with hyperscalers and technology vendors, we are helping customers move from exploration to deployment through our own services and certifications.

We are focused on three areas of opportunity: (1) reselling and managing AI consumption, (2) attaching professional services around deployment, governance, adoption, and operations, and (3) developing new agentic services, including the custom agents we are already building for our SMB customers. This quarter, AWS validated Ingram Micro Holding’s competencies within AI, machine learning, and data services, among others, demonstrating that we have the skills and the track record to deliver AI solutions at scale.

What matters most to our customers is this: they don’t need to build an AI practice before they can sell an AI project. They own the end-customer relationships and we deliver the solution. We also have an attractive opportunity as we expand our lifecycle services business. We are returning to supply chain services by optimizing capacity within our existing infrastructure rather than investing in additional warehouse space. We are also expanding our ITAD and repair capabilities to help customers recover value from existing technologies while meeting strict data security and sustainability requirements. What excites me most is that all of the transformations I just discussed are happening while the core business continues to perform and we enable our customers to transform with us.

We are growing in some of the most important technology markets in the world, investing in Xvantage, cloud, AI, and lifecycle services, creating new routes to market, and maintaining the financial discipline necessary to generate attractive returns. As we look ahead, I remain highly confident in our strategy and the opportunity in front of us. The scale, portfolio, and capabilities we have spent years building are producing tangible outcomes for Ingram Micro Holding and our customers. Our customers sit at the center of everything we do, and we serve as an extension of their businesses. Together with us, they are entering markets faster, completing work in seconds that historically took days or weeks, and using our intelligence to compete more effectively and accelerate their growth.

We are beginning to see the evidence in deeper platform engagement, more proactive selling, and scalable demand generation. In summary, the opportunity to use our unique intelligence to drive demand, our ability to enable our customers to monetize AI and other high-value services, and the expansion of our lifecycle services business provides us with further runway to grow, and our three-year plan supports this, demonstrating growth in operating profit at more than two times the rate of revenue growth. Our success would not be possible without the trust of our customers and vendors or the execution of our teams around the world.

And with that I’ll turn the call over to Mike.

OPERATOR

Thank you. We’ll now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from Joseph Cardoso with J.P. Morgan.

Joseph Cardoso (Analyst at J.P. Morgan)

Hey, thanks for the question here and congrats on the results. Maybe just for the first one, wanted to touch on obviously the strong growth in advanced solutions, but maybe just curious any way that you can frame the growth rate if we X out GPU AI sales there and maybe where you’re seeing the strong growth and how we should be thinking about potential contributions from pricing or ASPs and how you guys are thinking about momentum heading into 4.2.

And then I do have a follow-up there.

Mike

Yeah, so I can start. This is Mike. Yeah, I think, well, as we talked about, we saw the GPU and AI infrastructure piece grow from about 700 million last year to 1.8 billion this year. So you can see the math there. But we did see healthy growth, double-digit growth across the remainder of advanced solutions and still seeing pretty solid strength across server, networking, storage. Overall specialty lines also fairly solid. So good, pretty widespread growth on that front.

Joseph Cardoso (Analyst at J.P. Morgan)

Okay, got it. And then maybe just wanted to touch on, you know, over the past couple quarters, GPU and AI sales appear to have driven a meaningful share of the upside to the guidances that you guys provided. And maybe, you know, I think each quarter you talked about layering in maybe a more prudent outlook there just given kind of the lumpiness. Can you just talk about the visibility that you have in the pipeline around that business today? And should we think about this as becoming a more durable revenue run rate as we go forward where visibility improves, or is this going to kind of remain in this like handful of large projects or orders with less predictable timing? I’m just trying to think about how we should think about this business maturing over time and if there is kind of a roadmap or a runway essentially in terms of improving visibility here and predictability.

Paul

So this is Paul, jump in. And so your question around durability is—and Mike talked about it a little bit in our guide—and I think we’re being more transparent about the overall revenue in this business, and we’ve seen it for multiple quarters now. As we look at the pipelines, we do get visibility to the products that are coming through. But again, as we’ve noted previously, sometimes there’s a bit of a flush at the end of the quarter that we benefit from.

So we actually built that into Q4 where we see that revenue coming from. So I think it’s long term and durable. It’s appearing that way in terms of the revenue and where we keep experiencing the growth quarter over quarter. So it’s appearing that it’s going to be continuing, and that’s what we’re seeing at least through Q4. And again on Mike’s point, we pull that out, we look at all the products net of the AI deals, and we did see—as I define our core business in networking, storage, and server—good growth excluding the AI deals.

So we’ve got a really good healthy balance across the revenue base across the countries and regions. And with that we’re seeing more of these AI-type deals showing up in different parts of the world too for a number of different reasons. So we’re seeing a balanced revenue diversification in some of these deals coming not just in a couple of countries, but more popping up through all of the four regions.

Mike

Yeah, I think the only thing I would add—we’ll continue to give that transparency on how things really wrap up the quarter. As Paul did hit on and you’ve heard us talk about in the past, it is a little bit spotty during the quarter and you see some lumpiness that can be a little bit harder to predict just given the constraints on the product themselves. But we’re seeing good pipeline, so it’s encouraging.

Joseph Cardoso (Analyst at J.P. Morgan)

Got it. Thank you both.

OPERATOR

Our next question is from Katherine Murphy with Goldman Sachs.

Katherine Murphy (Analyst at Goldman Sachs)

Thank you very much. I wanted to ask quickly just if there’s anything you could help share on the top line expectations by segment when we think about the fourth quarter. And then I have a quick follow-up.

Mike

So I can go first on that. And I won’t do this by segment; I’ll actually talk about our lines of business. I think that’s probably what you meant more than the regional segments, but I can certainly speak to regions too if that helps. But on the lines of business, I think we’re talking about 17% to 20% rough growth rate in our guide. You have to remember again there is that extra week in the quarter, and that’s encompassed in there. But inclusive of the extra week, we’re expecting client and endpoint to probably be lower double digits, similar to where it was in the quarter just completed to some degree, but healthier double digits when you get into advanced solutions. And our lifecycle business also growing nicely. And then lastly, cloud being probably the stronger double-digit spectrum, similar to what it’s been throughout the year. And back to the question on GPU and AI, that is built into that advanced solutions number, with that piece probably growing a little bit more than the overall average of advanced solutions, but still healthy growth across the rest.

Katherine Murphy (Analyst at Goldman Sachs)

Great, thank you very much. And then just to follow up—and I know we touched on this with the prior question a little bit—but by my back-of-the-envelope math, mid-teens growth in the core advanced solutions. You had previously talked about mid-single-digit to high-single-digit growth there in your prior guide. Anything you can share on what drove the outperformance relative to plan in that core advanced solutions product offering, and if that reflects into your outlook into fiscal 4Q as well?

Thank you.

Paul

Yeah, I’ll talk—this is Paul—I’ll talk a little bit. So we had very strong networking growth. The year-over-year compares were a little easier, though. So last year in Q3 our networking had very low single-digit growth, and now we’re seeing solid refresh with AI infrastructure, higher bandwidth, Wi‑Fi 7 campus modernization, security, and other factors. So we had very solid double-digit revenue growth in the quarter, and that’s what I defined through that core business minus the AI products.

So we’re very pleased with the networking business, especially in Q3. And the server business was good also, which I would say even stronger considering the double-digit growth that we had in Q3 of 2025, and that’s being driven by the AI servers, GPU demand spending, agentic AI, and to some extent the higher memory and component cost. So we’re pleased with those two categories, minus the AI deals that came in. Very healthy in Q3.

Katherine Murphy (Analyst at Goldman Sachs)

Thank you, Paul. Thank you, Mike.

OPERATOR

In the interest of time, we ask the participants limit themselves to one question and one follow-up. Our next question is from Ruploo Bhattikarya with Bank of America.

Ruploo Bhattikarya (Analyst at Bank of America)

Hi, thanks for taking my questions. The main question is on client and endpoint solutions. The segment grew 10%. How do you see the sustainability of PC demand both in the December quarter and heading into next year? And if you can talk about demand trends in SMB versus mid-market customers versus larger customers, what are some of the things that can sustain demand in the PC business? And I have a follow-up. Thank you.

Paul

Okay, I’ll take this. Lou, it’s Paul. We saw solid double-digit revenue growth in our PC year over year in Q3. That’s coming off of a big Q3 2025, a very solid double-digit growth. We would define we’re in the later innings, but we’re not done yet. PC growth still remains durable, still driven by the refresh. Although the units were down low double digits, the increase in ASP significantly offset that unit decline. We’re also seeing AI PCs—because I’m sure the question will come up relative to what percentage of our business was AI PCs—it continues to grow and was roughly 50% of our PC revenue in Q3, which we believe is consistent with other reports from our vendors and the industry analysts as people are looking at their infrastructure and how they can run AI workloads. So we continue to see demand, to answer your question, going into Q4 to a lesser extent, but still suggesting the refresh cycle will extend into Q4.

To answer your second question, kind of some broad-based themes or what we’re hearing from customers. So let me give you some color around the categories from a customer standpoint and the segment. So our enterprise was up solid double digits, our core VAR business was flattish, and our SMB business was up in the teens. So we saw pretty good growth as I mentioned in my prepared remarks. And so there’s a number, I think, of different investment cycles that are playing out right now in the enterprise: the AI data centers.

We continue to talk about infrastructure modernization, everything wrapped with security. And our partners are telling us they’re bullish right now near term with large pipelines in data center networking and compute. And the focus being, for the enterprise customers, on AI infrastructure and really building out across compute capacity, storage, the server workloads, and network capacity to connect all those systems. A little bit of a different story in SMB. SMB continues to tend to be a little bit more price sensitive. They seem to be extending their PC refresh replacement cycles and are going to remain an important source for the remaining refresh. Some SMBs are going cloud-first, as we’ve mentioned previously, and then moving the workloads when the budget and timing are right. We’re seeing some SMBs tending to go in phases—cloud first, then quick adoption, then networking, then compute and storage—and then some that are looking to go with a more kind of standardized offering and integrated stack approach on the AI business, and then services.

So I guess I would say in SMB it’s a little bit of a mixed bag depending on kind of where those end customers are on their maturity cycle, which played across the trends and reflected our results in terms of the broad growth across all of our categories.

OPERATOR

Our next question is from Eric Woodring with Morgan Stanley.

Eric Woodring (Analyst at Morgan Stanley)

Hey guys, thank you very much for taking my questions. Paul, you guys are crushing it this year. I think for the full year you’re guiding to about 17% growth if I take the 4Q midpoint. If I take that in the context of your kind of long-term guide from the analyst day, can you help us kind of understand how to think about the shape or trajectory of revenue growth as we think about into next year and beyond? Because obviously your comments imply that there is clear durability to this growth.

But just help us pair those together—17% growth this year, 5% growth over the next three years. Just help us understand maybe what the trajectory could look like. And then a quick follow-up please. Thanks.

Mike

Yeah, so Eric, as I said in this is Mike and, you know, in the capital markets day we touched on this a little bit that, you know, when we look at 27, you know, we have a couple comparative factors. We certainly expect ASPs, you know, still have some legs of increase, but if you look at IDC or other data that’s going to come to some sort of flattening over some period of time here and it’s already probably starting a little bit more in the PC space.

We also see a PC refresh that, as Paul said earlier, has some legs, but that’s not going to have that similar duration. And then lastly, just mechanically we have an extra week in the current year. So that 4 to 6% CAGR that we disclosed on the capital markets day was assuming probably a lower single-digit growth next year, but that would imply certainly higher single digits for the outlying two years in that CAGR. So we’re still seeing pretty good durability of demand and a long-term cycle of growth here.

You just have to be thinking about those couple of factors that play in there. And then most importantly, what we’re really focused on is the fact that our long-term CAGR is even faster growth in gross profit and on the bottom line, more than 2x growth of that revenue pace. So that’s really what we’re focused on also is the quality of revenues and where we drive the business in the right direction.

OPERATOR

Our next question is from Adam Tyndall with Raymond James.

Adam Tyndall (Analyst at Raymond James)

Okay, thanks. Good afternoon and congrats on the results. I did want to acknowledge obviously the very strong growth rates, but ask about a little bit more on gross margin. I was kind of going back through my notes in Q3 of last year and gross margin was down 30 basis points year over year, citing mix. So, point being, the comparison in this Q3 was not particularly difficult. And if I looked at the growth by product category, I mean, wow, advanced solutions growing off the chart, cloud growing off the chart, inclines and endpoint, which would typically be lower gross margin, you know, at a fraction of growth rates of those higher-margin categories.

Yet gross margin down another 30 basis points year over year. So I hate to set up the question that way, but I just wanted, you know, to maybe press a little bit more to address what’s going on from a gross margin standpoint and why there would be pressure. Thanks.

Mike

Yeah, so I’ll start on this and Paul will add. I think the starting point I would say is just calling again out the GPU and AI infrastructure. As we said, it was 700 million last year; it was nominal, really nothing in the prior year. So that created a part of that mix compare, although I think we’ve gotten a little bit more transparent in disclosing as we get into this year the more specific data on that, which now has grown in this Q3 to 1.8 billion.

So that’s part of the reason we called out. When you look at our gross margin, excluding that outsized growth of that GPU and AI infrastructure, our gross margin this quarter was 7.06%. It was 7.10% last year, so 4 basis points, roughly flat. From a comparative perspective, there are other mix factors that you have to think about. That has continued to be the case on a year-over-year basis. Still healthier growth in large enterprise customers, although we are seeing SMB growth happening for sure, as Paul hit on earlier.

And we’re also seeing outsized growth on an ongoing basis in Asia Pacific, which was a smaller share of our overall revenues last year and certainly the year before than it is today, now in the high 20s, or even cracked the 30% barrier last quarter. So, you know, those are probably the other things I would call out that you just have to think about in the dynamics of gross margin. But on a like-for-like basis things are trending, you know, pretty normal on that front.

And the only other thing I would say is in Q3 we had a little bit more demand in our smartphone, kind of the refresh that’s going on. So as we know, that’s efficient and again this gives us a good return to the bottom line, and we know how to manage the working capital and we got free cash flow out of it. So I’d say those are the factors. Strong AI, kind of PC refresh was still, you know, good. It was healthy, as I mentioned in the previous question, mobility and a little bit of large customers.

Even though the SMB business was up, as I mentioned, we still had our large enterprise customers growing too. Those are the factors that we saw in the quarter.

OPERATOR

Our next question is from David Page with RBC Capital Markets.

David Page (Analyst at RBC Capital Markets)

Hi, thank you for taking my question. Congrats on the great results. Mike, Paul, I want to ask first question on free cash flow. Should we still expect a hockey stick in 4Q? This year has been a little bit different than, you know, prior years. And then I have a follow up.

Mike

Yeah. So yeah, David, I think we do expect to see a pretty solid cash flow in Q4. You know, one other thing that I’ll just reiterate a little bit: what we said back in mid-September at Capital Markets Day was we were really striving to see, you know, positive cash flow for this year, which would represent a pretty solid cash flow for the second half. And we’re really happy with where we closed Q3, seasonally—quite, not just seasonally better, but with our second-best Q3 ever.

So a good performance there as we work through the working capital key points. But again, you have to think about also the simple growth of double digits—that takes working capital. With our Q4 guide, our implied growth for the year is in the mid to upper teens. So, you know, there is working capital investment that needs to happen there. Therefore, getting the positive free cash flow for the year may be challenging, but we do expect to see healthy cash flow in Q4 for sure.

David Page (Analyst at RBC Capital Markets)

Great, thanks. And then just on Xvantage, obviously good to see, you know, metrics keep growing and improving. Just I’m trying to think through the large enterprise customers and then growth in SMBs. Are the large enterprise customers using Xvantage more, or SMBs are using it more? I’m just trying to figure out, you know, how that drops through operating leverage. Thank you.

Paul

Yeah, yeah. So Dave, this is Paul. It’s more in SMB, and that’s where we’re seeing the growth—again, self-service orders representing 70% of the orders, revenue per customer again in our SMB and what we call our growth customers. Some of the smaller end of the SMB emailed the order. So all people are transacting increased 33%, and people are spending more time on it to run their business, too. And I think it’s important to know, too, why is that happening?

And again, we’ve been strategic and deliberate. You’ve heard us, Mike and I, talking about this for the last couple of years. And we first had to get that first phase, which was the operating model with Xvantage in the center—that was about automating everything, transactions, getting—connecting customers. And now we’re really on this intelligent operating model where we’re building on the foundation of Xvantage, where we’re turning all those signals now into being proactive and providing demand generation and action.

Just to note, without that first step that we took in the first phase, the second one doesn’t work.

OPERATOR

Our next question is from Keith Howsom with North Coast Research.

Keith Howsom (Analyst at North Coast Research)

Good morning, guys, and congratulations on the quarter as well. Hey, you know, we’re hearing more and more from different guys that the supply chain constraints are starting to kind of creep up. Are you guys seeing anything on the horizon that might concern you or might limit the guidance that you’re providing?

Paul

No, nothing. I would say nothing out of what we’ve been operating in throughout the year and exiting last year. Our pipeline and our back orders haven’t dramatically increased in terms of the supply chain. I actually think there’s some better visibility if you would have looked back a couple of quarters ago, because our solution providers now—some people have moved from 14 days and to not being able to be priced out for a period of time—now a lot of them have 30 days.

So you actually have a little bit more consistency and predictability when they actually go to their end users. So I’d say nothing out of the ordinary right now.

Mike

Yeah, Keith, the only thing I would add, just remember, although we didn’t reiterate the couple of points that we made last quarter that go into that 2 to 3%, you know, net impact to supply constraints, but that is the ASPs as well as any potential pull forward, although really we aren’t seeing a whole lot of that pull-forward factor or evidence of it in this most recent quarter we just finished. But then that does also take into account the partial offsets of just it takes longer to get the product and some of the demand elasticity.

So that’s all in that calculus. And we’re expecting, you know, as we said also in our guide for Q4, a similar kind of 2 to 3% net impact.

Keith Howsom (Analyst at North Coast Research)

Okay, if I could just follow up, more of a modeling question here. Just because all weeks are not created equal, but as we think about the extra week for the fourth quarter, are you thinking that’s going to be like a 7 to 8% impact on the guidance or perhaps a little bit less?

Mike

I would use that as a proxy. You’re right, not all weeks are created equal, but we’re not necessarily going to try to get down to that level of granularity. So I think you’re using a pretty good proxy there.

Keith Howsom (Analyst at North Coast Research)

All right, thank you.

OPERATOR

Our next question is from Ellie Dyke with William Blair.

Elian (Analyst at William Blair)

Hi, this is Elian for Maggie. I wanted to ask about the midpoint of the gross profit guidance for next quarter. I think it implies a little bit lower than this quarter. So could you just provide some color on the drivers there and anything assumed in that.

Mike

Yeah, so Q4 typically is a lower margin quarter just on mix factors. We don’t do a lot of retail/etail, but you see a little bit more in that category to the extent we do still have it. So PC and certainly mobility factors in there and even the mix factors as far as how projects close. But the other thing I would say—and we noted this in our guidance—is that we’re still seeing a healthy pipeline and expectation on that GPU and AI infrastructure piece.

So that healthy double-digit growth we have in advanced solutions probably has even a little bit more growth of the GPU/AI piece. And our guide for Q4 has margins in the high sixes, if you take that out of the equation, which would be relatively comparable to Q4 of last year.

Elian (Analyst at William Blair)

Great, thank you. And then just a follow up with client and endpoint, the growth differed in different regions. Are there any differences in customer purchasing behavior that explains that—like it was up in North America but down in EMEA?

Mike

Yeah, I don’t think there’s really much we would call out on the customer front as far as difference in behaviors around the world. It’s been pretty consistent.

Paul

It’s consistent. This fall it’s been very consistent in terms of the growth rates around the different regions.

Elian (Analyst at William Blair)

Thank you.

OPERATOR

Our next question is from Alec Valera with Loop Capital.

Alec Valera (Analyst at Loop Capital)

Hey guys, how’s it going? Congrats on the quarter. So my first question on margins—so I know you guys kind of already answered it when you spoke about Xvantage—but what I wanted to ask about was I know you guys are talking about the phases in Xvantage. When do we start seeing phase three pricing and IDA levers start to show up in the margins?

Paul Bey

So this fall we started to see that, and Mike touched on it. I did a little bit in our prepared remarks. So that third phase of the platform journey, where we’re using the data, the context, and intelligence to drive that margin growth through pricing, bundling capabilities, and really calibrating towards margin optimization, we started to actually see positive signs of that, particularly in North America. But it was late in the quarter when we really started these initiatives.

So, you know, we like the signs that we’ve seen in the couple of months that we were running that and where we were targeting those programs. And so we’re starting to see that phase three really starting to land in North America with positive results.

Mike

Yeah, I can start on that. I mean, I think we saw in the quarter we just finished, pretty consistent with what market indicators are saying, a low double-digit decline in PC units, but ASPs still continuing to offset that. While ASPs are going up at a lesser rate now than they were a couple quarters ago in PCs, they are still going up, generally speaking. And that mix of AI PCs creates some legs of demand because we’re only at about 50% of PCs sold are in that kind of AI-enabled category.

So that could create also some smoothing on both pricing as well as demand levels as we get into Q4. But yeah, we are seeing the units. You know, our unit numbers are pretty in line with what industry numbers are saying right now.

OPERATOR

Our next question is from Amit Daryanani with Evercore ISI.

Kaden (Analyst at Evercore ISI)

Hi. Congrats on the quarter, guys. This is Kaden on for Amit. I guess you pointed out the hockey stick free cash flow for Q4. Could you touch on maybe just 2027, what your expectations are on how that plays out a little bit? Thank you.

Mike

Yeah. I would look to what we said in September and Capital Markets Day. You know, we expect if, you know, as we get into a more kind of normalized growth pattern in the single digits as we laid out in our plan versus what’s been double digits now for quite some time, we see a little bit more predictability in the working capital investment needs and so forth. But our target is, on an annual basis, to generate free cash flow equivalent to 30% or more of our adjusted EBITDA.

And I think in some quarters it could be decently more. But again, that’s an annual number. You just have to make sure you don’t think about that necessarily being the case quarter to quarter because there is some seasonality to cash flow for sure.

OPERATOR

Thank you. Our last question is from Carl Ackerman with BNP Paribas.

Ari (Analyst at BNP Paribas)

Hi, this is Ari for Carl here. Client and Endpoint Solutions grew on notebooks and desktops. Could you discuss the split between units and price for Client and Endpoint in the quarter? And also, how are you managing your go-to-market approach given a pretty large PC CPU maker noting PC volumes should remain challenged through the first half of 2027? Thanks.

Mike

So as we mentioned, from a PC refresh standpoint, again we kind of looked at the categories. We put Advanced Solutions and Specialty together, and we still saw what I would say, networking, server, good revenue growth in that business, up modestly across all those categories. And specifically in Client and Endpoint Solutions PCs, the growth was more than offset by the low double-digit decline in units.

OPERATOR

Thank you. There are no further questions at this time. I would like to hand the floor back over to Paul Bey for any closing remarks.

Paul Bey

Thank you, operator. Before we close, I’ll highlight three drivers of the quarter. Healthy, broad-based demand growth with operating leverage and mounting evidence that our strategy to become the intelligent operating system at the center of the technology ecosystem is working. In the quarter, we exceeded our guidance across all metrics with strong Q3 cash flow. We’re raising our Q4 and full-year guidance and remain excited about our initiatives to sustain growth and diversity in our business.

Thank you for your continued interest in Ingram Micro Holding and thank you for joining us today. We extend our sincere thanks to our team members worldwide, our customers, and our vendor partners for their ongoing support. Have a great day.

OPERATOR

This concludes today’s conference. You may disconnect your lines at this time. Thank you again for your participation.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.