INSIGHT ENTERPRISES INC - Annual Report: 2015 (Form 10-K)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2015

or

Commission File Number: 0-25092

INSIGHT ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

6820 South Harl Avenue, Tempe, Arizona 85283

(Address of principal executive offices, Zip Code)

Registrant’s telephone number, including area code: (480) 333-3000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

n/a

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based upon the closing price of the registrant’s common stock as reported on The Nasdaq Global Select Market on June 30, 2015, the last business day of the registrant’s most recently completed second fiscal quarter, was $1,102,737,373.

The number of shares outstanding of the registrant’s common stock on February 12, 2016 was 37,113,611.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement relating to its 2016 Annual Meeting of Stockholders have been incorporated by reference into Part III, Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K.

Table of Contents

INSIGHT ENTERPRISES, INC.

ANNUAL REPORT ON FORM 10-K

Year Ended December 31, 2015

TABLE OF CONTENTS

Table of Contents

INSIGHT ENTERPRISES, INC.

FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K, including statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include: projections of matters that affect net sales, gross profit, operating expenses, earnings from operations, non-operating income and expenses, net earnings or cash flows, cash needs and the payment of accrued expenses and liabilities; the effect of changes being implemented by our largest software partner to elements of its channel incentive program, including the expected financial effect in 2016; the expected effects of seasonality on our business; that there will be further consolidation in the Information Technology (“IT”) industry; our business strategy and our strategic initiatives, including our efforts to grow our core business, develop and grow our global Cloud business and build scalable services business; the availability of competitive sources of products for our purchase and resale; our intentions concerning the payment of dividends and retirement of treasury shares; our acquisition strategy; our ability to offset the effects of inflation and manage any increase in interest rates; projections of capital expenditures in 2016; the sufficiency of our capital resources and the availability of financing and our needs or plans relating thereto; the effect of new accounting principles or changes in accounting policies; the effect of indemnification obligations; projections about the outcome of ongoing tax audits; our positions and strategies with respect to ongoing and threatened litigation; our exposure to derivative counterparty concentration and non-performance risks; our ability to expand our client relationships; that pricing pressures in the IT industry will continue; the sufficiency of our facilities; our intention not to repatriate certain foreign undistributed earnings where management considers those earnings to be reinvested indefinitely and plans relating thereto; our plans to use cash flow from operations for working capital, to pay down debt, make capital expenditures, repurchase shares of our common stock, and fund acquisitions; our exposure to off-balance sheet arrangements; statements of belief; and statements of assumptions underlying any of the foregoing. Forward-looking statements are identified by such words as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “may” and variations of such words and similar expressions and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. There can be no assurances that results described in forward-looking statements will be achieved, and actual results could differ materially from those suggested by the forward-looking statements. Some of the important factors that could cause our actual results to differ materially from those projected in any forward-looking statements include, but are not limited to, the following:

Additionally, there may be other risks that are otherwise described from time to time in the reports that we file with the Securities and Exchange Commission. Any forward-looking statements in this report should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. We assume no obligation to update, and, except as may be required by law, do not intend to update, any forward-looking statements. We do not endorse any projections regarding future performance that may be made by third parties.

1

Table of Contents

INSIGHT ENTERPRISES, INC.

PART I

Our Company

Insight Enterprises, Inc. (“Insight” or the “Company”) is a Fortune 500-ranked global provider of hardware, software, Cloud and service solutions to business, government, healthcare and educational clients. We provide clients the guidance and expertise needed to select, implement and manage complex technology solutions to drive business outcomes. Through our world-class people, partnerships and services capabilities, we empower clients with Intelligent Technology™ solutions to help their businesses run smarter.

The Company is organized in the following three operating segments, which are primarily defined by their related geographies:

Insight began operations in Arizona in 1988, incorporated in Delaware in 1991 and completed our initial public offering in 1995. Our corporate headquarters are located in Tempe, Arizona. From our original location in the United States, we expanded nationwide and then entered Canada in 1997 and the United Kingdom in 1998. Over the past 10 years through a combination of acquisitions and organic growth, we continued to increase our geographic coverage and expand our capabilities:

Our Purpose and Values

We refreshed Insight’s marketplace brand in 2015, and as part of that effort, clarified our purpose and restated our company values. We believe that our new purpose, “We make meaningful connections to help businesses run smarter,” has infused new energy into our organization. We live by our core values of Hunger, Heart and Harmony, that set the tone for our business and define who we are. We describe our core values simply.

2

Table of Contents

INSIGHT ENTERPRISES, INC.

We believe that these values strengthen the overall Insight experience for our clients, partners and teammates (we refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates”).

Our Market

The worldwide total addressable market for information technology is $3.5 trillion according to Gartner, a leading IT research and advisory company, and based on our analysis of Gartner market data, we believe the top 10 most comparable global solution providers represent approximately 10% of the worldwide total addressable market. We believe our addressable worldwide market in the indirect sales IT channel represents approximately $594 billion in annual sales and for the year ended December 31, 2015, our net sales of $5.4 billion represented approximately 1% of that highly diverse market. We believe that we are well positioned in this highly fragmented global market with locations in 22 countries and the capabilities to provide clients with software provisioning and related services across the globe.

In addition to the fragmentation in the market, the rapid pace of technological innovation is making it more difficult for our clients to effectively assess alternatives and manage their IT systems. We believe that our solution offerings that combine and integrate hardware, software and services will address this need and will provide solutions to help our clients’ businesses run smarter.

Our Differentiation/Value Proposition

We consult, design, implement and manage integrated IT solutions for our clients. These solutions include services and products designed to support networking, collaboration, storage, security, Cloud, mobility, converged infrastructure and other advanced technologies. The increased complexity across the technology ecosystem, combined with the continual emergence of new trends and offerings, has made it difficult for most clients to effectively design and manage their technology systems. Clients increasingly are looking for technology providers to supply value-added expertise to help them identify, deploy and implement complex IT solutions. We believe that Insight has a unique position in the market to gain profitable market share by providing enhanced value to our clients.

We believe that what differentiates Insight from our competitors is:

3

Table of Contents

INSIGHT ENTERPRISES, INC.

Our Business Strategy

Our long-term strategy remains consistent and includes three components:

Grow our core business. We believe that there is significant opportunity for profitable growth in our core business as a global provider of integrated technology solutions to business and government clients. Our balanced portfolio of manufacturer and publisher brands, extensive e-Commerce and logistics capabilities and differentiated services capabilities allow us to tailor our offerings based on the size and complexity of our clients. In addition, our go-to-market model leverages both centralized and local market sales, technical and support resources to efficiently serve and advise our clients.

In each of our geographic operating segments, we are focused on driving our growth objectives by acquiring new clients and expanding our relationships with existing clients by increasing the types of products and services they buy from us. In North America, we have a local market presence in select cities where we have invested in sales, technical and service delivery resources to drive growth with existing and new clients, particularly in the large account client space, as well as to drive expansion in specific service/solution areas with key partners. We are also concentrating our efforts on growing our business with mid-sized and large clients in select vertical markets, including Federal government, state and local, K-12 education, healthcare and service provider, and have invested in both local market and centralized sales resources to drive these efforts. In EMEA, we are focused on increasing our share in the mid-market and public sector by increasing sales of software and select hardware categories across the business. We also expanded our services capabilities in the region and began leveraging strategic relationships with partners and service delivery vendors to bring additional software, Cloud and collaboration solutions to clients in 2015. Our APAC operating segment, which is largely comprised of software sales, is engaged in growing our sales in the mid-market and enterprise space and on the development of specialized software services, particularly in the areas of software license optimization and Cloud.

Grow services sales. We design, procure, deploy, implement and manage solutions that combine hardware, software and services to help businesses run smarter. Our services capabilities provide significant value add to our clients, driving stronger client relationships and higher margins. Our solutions can be provided through a variety of delivery mechanisms, including at the client location, remotely, or through a private, public or hybrid Cloud. The key areas of focus are:

Accelerate with Cloud. Private, public and hybrid Cloud solutions provide flexible, reliable and affordable solutions for delivering critical IT functions, such as email, data security, data center hosting and more. Cloud has become more mainstream, and adoption continues to increase across markets and verticals. Key market imperatives in the adoption of Cloud solutions are speed to market, flexibility, scalability and availability. We have invested in and will continue to invest in technical tools and resources to provide clients with the assessment, migration, integration and managed services required to simplify the Cloud adoption decision, whether that decision results in a private, public or hybrid Cloud environment.

4

Table of Contents

INSIGHT ENTERPRISES, INC.

Insight is also investing in a global Cloud management platform. Our Cloud management platform serves as a marketplace for our clients to buy and manage their Cloud subscriptions with options that enhance their Software as a Service (“SaaS”) and Infrastructure as a Service (“IaaS”) management capabilities.

Components of our Cloud management platform include:

Additionally, we have a strong global position in the service provider or independent software vendor (ISV) market. Building on our existing capabilities in this market, we plan to develop a Cloud portfolio for our service provider clients to resell to their customers, offering them revenue diversification with minimal investment. We also plan to build off of our Cloud management platform capabilities and deliver Cloud portal platforms that provide e-commerce and subscription management capabilities to our service provider clients.

Our Offerings

Our offerings in North America and select countries in EMEA include a suite of IT hardware, software and services solutions. Our offerings in the remainder of our EMEA segment and in APAC are largely software and select software-related services. On a consolidated basis, hardware, software and services represented approximately 54%, 41% and 5%, respectively, of our net sales in 2015 compared to 52%, 43% and 5%, respectively, in 2014.

Services Offerings

We have developed solutions that integrate hardware, software and services to help businesses run smarter within our focus areas. Our core solutions include:

Customer Engagement

Workforce Enablement

Infrastructure Optimization

5

Table of Contents

INSIGHT ENTERPRISES, INC.

Operational Excellence

We have invested in Cloud, mobility, big data and security capabilities and expertise to support our core solutions and continuously seek to identify client-relevant technology solutions.

Cloud. Cloud computing represents an evolution in the IT world. Cloud-based SaaS is prevalent in the Customer Engagement and Workforce Enablement solutions highlighted above. In addition, public IaaS and converged infrastructure private Cloud represent growing portions of Hybrid Cloud and Branch Infrastructure solutions. We help clients assess readiness, architect appropriate solutions and migrate to both public and private Cloud.

Mobility. Our clients must engage with their customers and enable their workforce whether they are at work, at home or on-the-go. We help clients do so through solutions such as in-store mobile Point of Sale (mPOS) and customer mobile commerce applications in the retail industry or mobile trading applications for brokerage customers in the financial services industry.

Big Data. Our clients are deluged with data that they struggle to interpret. We help turn this data into actionable insights with solutions such as weather-based predictive analytics to drive weekly marketing campaigns for consumer products and patient-based intake and health outcomes analysis to optimize nurse staffing. The explosion of sensors for Internet-of-Things will only fuel this data overload and drive further demand for these solutions.

Security. All of these solutions must be delivered without compromising customer, company or employee private information. We offer services for identity and access management, single-sign-on (SSO) and mobile-device-management (MDM) to protect end users. In addition, we provide network security and Security Incident Event Management (SIEM) solutions to secure our clients’ infrastructure.

Hardware Offerings

We offer our clients in North America and select countries in EMEA a comprehensive selection of IT hardware products. We offer products from hundreds of manufacturers, including such industry leaders as Cisco, HP, Lenovo, Dell, EMC, NetApp, Apple and IBM. Our scale and purchasing power, combined with our efficient, high-volume and cost effective direct sales and marketing model, allow us to offer competitive prices. We believe that offering choices from multiple partners enables us to better serve our clients by providing a variety of product solutions to address their specific business needs.

The four hardware technology categories we have identified as key to our clients’ Intelligent Technology™ solutions are:

In addition to our distribution facilities, we have “direct-ship” programs with many of our partners, including manufacturers and distributors, allowing us to expand our product offerings without increasing inventory, handling costs or inventory risk exposure. As a result, we are able to provide a product offering with billions of dollars of products in virtual inventory. Convenience and product options among multiple brands are key competitive advantages compared to manufacturers’ direct selling programs, which are generally limited to their own brands and may not offer clients a complete or best-in-class solution across all product categories.

6

Table of Contents

INSIGHT ENTERPRISES, INC.

Software Offerings

Our clients acquire software applications from us in the form of licensing agreements with software publishers, boxed products, or through SaaS, whereby clients subscribe to software that is hosted either by the software publisher or a dedicated third-party hosting company. We offer products from hundreds of publishers, including such industry leaders as Microsoft, Adobe, VMware, Symantec, McAfee, Citrix, IBM Software and Red Hat, as well as newer entrants, such as Box and 8x8.

As software publishers choose different models for implementing licensing agreements, businesses must evaluate the alternatives to ensure that they select the appropriate agreements and comply with the publishers’ licensing terms when purchasing and managing their software licenses. In addition to software provisioning, we offer holistic software solutions, including software licensing optimization and implementation consulting, to help our clients better understand their software needs, evaluate their existing software and provide options to optimize their assets.

The four software and licensing technology categories we have identified as key to our clients’ Intelligent Technology™ solutions are:

Our Information Technology Systems

We have committed significant resources to the IT systems that we own and use to manage our business and believe that our success is dependent upon our ability to provide prompt and efficient service to our clients based on the accuracy, quality and utilization of the information generated by our IT systems. Because these systems affect our ability to manage our sales, client service, partner relationships and programs, distribution, inventories and accounting systems and our voice and data networks, we have built redundancy into certain systems, maintain system outage policies and procedures and have comprehensive data backup. We are focused on driving improvements in sales productivity through upgraded IT systems to support higher levels of client satisfaction and new client acquisition, as well as garnering efficiencies in our business.

We operate under a single, standardized IT system across North America and APAC and a separate, single IT system platform in all countries in our EMEA operations.

For a discussion of risks associated with our IT systems, see “Risk Factors – Disruptions in our IT systems and voice and data networks could affect our ability to service our clients and cause us to incur additional expenses,” in Part I, Item 1A of this report.

Our Competition

The IT hardware, software and services industry is very fragmented and highly competitive. Our competition includes:

7

Table of Contents

INSIGHT ENTERPRISES, INC.

The competitive landscape in the industry is continually changing as various competitors expand their product and services offerings. In addition, emerging models such as Cloud computing are creating new competitors and opportunities in messaging, infrastructure, security, collaboration and other services offerings, and, as with other areas, we both resell and compete directly with many of these offerings.

For a discussion of risks associated with the actions of our competitors, see “Risk Factors – The IT hardware, software and services industry is intensely competitive, and actions of our competitors, including manufacturers and publishers of products we sell, can negatively affect our business,” in Part I, Item 1A of this report.

Our Partners

We partner with the top technology brands. During 2015, we purchased products and software from approximately 3,600 partners. Approximately 66% (based on dollar volume) of these purchases were directly from manufacturers or software publishers, with the balance purchased through distributors. Purchases from Microsoft, Cisco and Ingram Micro (a distributor) accounted for approximately 27%, 11% and 11%, respectively, of our aggregate purchases in 2015. No other partner accounted for more than 10% of purchases in 2015. Our top five partners as a group for 2015 were Microsoft, Cisco, Ingram Micro, HP and Tech Data (a distributor), and approximately 65% of our total purchases during 2015 came from this group of partners. Although brand names and individual products are important to our business, we believe that competitive sources of supply are available in substantially all of our product categories such that, with the exception of Microsoft, we are not dependent on any single partner for sourcing products.

During 2015, sales of Microsoft, HP and Cisco products accounted for approximately 27%, 13% and 11%, respectively, of our consolidated net sales. No other manufacturer’s products accounted for more than 10% of our consolidated net sales in 2015. Sales of product from our top five manufacturers/publishers as a group (Microsoft, HP, Cisco, Lenovo and Dell) accounted for approximately 64% of Insight’s consolidated net sales during 2015.

We obtain incentives from certain product manufacturers, software publishers and distribution partners based typically upon the volume of sales or purchases of their products and services. In other cases, such incentives may be in the form of participation in our partner programs, which may require specific services or activities with our clients, discounts, marketing funds, price protection or rebates. Manufacturers and publishers may also provide mailing lists, contacts or leads to us. We believe that these incentives (or partner funding) and other marketing assistance allow us to increase our marketing reach and strengthen our relationships with leading manufacturers and publishers.

We are focused on understanding our partners’ objectives and developing plans and programs to grow our mutual businesses. We measure partner satisfaction regularly and hold quarterly business reviews with our largest partners to review business results from the prior quarter, discuss plans for the future and obtain feedback. Additionally, we host annual partner forums in North America, EMEA and APAC to articulate our plans for the upcoming year.

As we move into new service areas, we may become even more reliant on certain partner relationships. For a discussion of risks associated with our reliance on partners, see “Risk Factors – We rely on our partners for product availability, competitive products to sell and related marketing funds and purchasing incentives,” in Part I, Item 1A of this report.

Our Teammates

As of December 31, 2015, we employed 5,761 teammates, of whom 2,420 were engaged in sales related activities, 1,797 were engaged in management, support services and administration activities, 1,418 were skilled, certified consulting and service delivery professionals and 126 were engaged in distribution activities. Our teammates in the United States are not represented by a labor union, and our workforces in certain foreign countries, such as Germany, have worker representative committees or work councils with which we maintain strong relationships. We believe our relations with employees are good, and we have never experienced a labor related work stoppage.

For a discussion of risks associated with our dependence on certain personnel, including sales personnel, see “Risk Factors – We depend on certain personnel,” in Part I, Item 1A of this report.

8

Table of Contents

INSIGHT ENTERPRISES, INC.

Our Seasonality

We experience some seasonal trends in our sales of IT hardware, software and services. For example:

These trends create overall seasonality in our consolidated results such that sales and profitability are expected to be higher in the second and fourth quarters of the year.

Our Backlog

The majority of our backlog historically has been and continues to be open cancelable purchase orders. We do not believe that backlog as of any particular date is predictive of future results.

Our Intellectual Property

We do not maintain a traditional research and development group, but we do develop and seek to protect a range of intellectual property, including trademarks, service marks, copyrights, domain name rights, trade dress, trade secrets and similar intellectual property, relying for such protection on applicable statutes and common law rights, trade-secret protection and confidentiality and license agreements, as applicable, with teammates, clients, partners and others to protect our intellectual property rights. Our principal trademark is a registered mark, and we also license certain of our proprietary intellectual property rights to third parties. We have registered a number of domain names, applied for registration of other marks in the United States and in select international jurisdictions, and, from time to time, filed patent applications. We believe our trademarks and service marks, in particular, have significant value, and we continue to invest in the promotion of our trademarks and service marks and in our protection of them.

For a discussion of risks associated with our intellectual property, see “Risk Factors – We may not be able to protect our intellectual property adequately, and we may be subject to intellectual property infringement claims,” in Part I, Item 1A of this report.

Available Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the reports of beneficial ownership filed pursuant to Section 16(a) of the Exchange Act are available free of charge on our web site at www.insight.com, as soon as reasonably practicable after we electronically file them with, or furnish them to, the Securities and Exchange Commission. The information contained on our web site is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K.

The IT hardware, software and services industry is intensely competitive, and actions of our competitors, including manufacturers and publishers of products we sell, can negatively affect our business. Competition in the industry is based on price, product availability, speed of delivery, credit availability, quality and breadth of product lines, and, increasingly, on the ability to provide services and tailor specific solutions to client needs. Many of our manufacturer and publisher partners are also our competitors, as many sell directly to business customers, particularly larger corporate customers. There can be no assurance that manufacturers and publishers will continue to sell both through the reseller channel and directly to end users, or that they will not limit or curtail the availability of their products to resellers versus end users. In addition to the manufacturers and publishers of products we sell, we compete with a large number and wide variety of providers and resellers of IT hardware, software and services. We believe our industry will see further consolidation as product resellers and direct marketers combine operations or acquire or merge with other resellers, service providers and direct marketers to increase efficiency, service capabilities and market share. Moreover, current and potential competitors have established or may establish cooperative relationships among themselves or with third parties to enhance their product and service offerings. Accordingly, it is possible that new competitors or alliances among competitors may emerge and acquire significant market share.

9

Table of Contents

INSIGHT ENTERPRISES, INC.

Generally, pricing is very aggressive in the industry, and we expect pricing pressures to continue. There can be no assurance that we will be able to negotiate prices as favorable as those negotiated by our competitors or that we will be able to offset the effects of price reductions with an increase in the number of clients, higher net sales, cost reductions, greater sales of services, which are typically at higher gross margins, or otherwise. Price reductions by our competitors that we either cannot or choose not to match could result in an erosion of our market share and/or reduced sales or, to the extent we match such reductions, could result in reduced operating margins or inventory impairment charges, any of which could have a material adverse effect on our business, financial condition and results of operations.

Some of our competitors in each of our operating segments may have greater technical, marketing and other resources than we do. In addition, some of these competitors may be able to respond more quickly to new or changing opportunities, technologies and client requirements. Many current and potential competitors also may have greater name recognition and engage in more extensive promotional activities, offer more attractive terms to their customers and adopt more aggressive pricing policies than we do. Additionally, some of our competitors have higher margins and/or lower operating cost structures, allowing them to price more aggressively. There can be no assurance that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations.

We rely on our partners for product availability, competitive products to sell and related marketing funds and purchasing incentives. We acquire products for resale both directly from manufacturers and publishers and indirectly through distributors, and the loss of a significant partner relationship could cause a disruption in the availability of products to us. There can be no assurance that manufacturers and publishers will continue to sell or will not limit or curtail the availability of their product to resellers like us.

In addition, certain manufacturers, publishers and distributors provide us with substantial incentives in the form of rebates, marketing funds, purchasing incentives, early payment discounts, referral fees and price protections (collectively, “partner funding”). Partner funding is used to offset, among other things, inventory costs, costs of goods sold, marketing costs and other operating expenses. Certain of these funds are based on our volume of sales or purchases, growth rate of net sales or purchases and marketing programs. If we do not meet the goals of these programs or if we are not in compliance with the terms of these programs, there could be a material negative effect on the amount of incentives offered or paid to us by manufacturers and publishers. We continue to experience adverse program changes, and we anticipate that in the future the incentives that many partners make available to us may either be reduced or that the requirements for earning the available amounts will change. If we are unable to react timely to any fundamental changes in the partner funding programs of publishers or manufacturers, including the elimination of, or significant reductions in, funding for some of the activities for which we have been compensated in the past, particularly related to incentive programs with our largest partners, Microsoft, HP and Cisco, the changes could have a material adverse effect on our business, financial condition and results of operations. There can be no assurance that we will continue to receive such incentives.

Changes in the IT industry and/or rapid changes in technology may reduce demand for the IT hardware, software and services we sell or change who makes purchasing decisions for IT hardware, software and services. Our results of operations are influenced by a variety of factors, including the condition of the IT industry, shifts in demand for, or availability of, IT hardware, software, peripherals and services, and industry innovation and the introduction of new products. The IT industry is characterized by rapid technological change and the frequent introduction of new products and changing delivery channels and models, which can decrease demand for current products and services and can disrupt purchasing patterns. If we fail to react in a timely manner to such changes, we may experience lower sales and, with respect to hardware, we may have to record write-downs of obsolete inventory. In addition, in order to satisfy client demand, protect ourselves against product shortages, obtain greater purchasing discounts and react to changes in original equipment manufacturers’ terms and conditions, we may decide to carry inventory products that may have limited or no return privileges. There can be no assurance that we will be able to avoid losses related to inventory obsolescence on these products. Additionally, if purchasing power within our clients shifts from centralized procurement functions to business units or individual end users and we are unable to react timely to any such changes, these shifts in purchasing power could have a material adverse effect on our business, financial conditions and results of operations.

10

Table of Contents

INSIGHT ENTERPRISES, INC.

The Cloud and “as-a-service” models are transforming the IT market and introducing new products, services and competitors to the market. In many cases, these new distribution models allow enterprises to obtain the benefits of commercially licensed, internally operated software with less complexity and lower initial set-up, operational and licensing costs, increasing competition for us. There can be no assurance that we will be able to adapt to, or compete effectively with, current or future distribution channels or competitors or that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations.

Our future operating results may fluctuate significantly. Our operating results are highly dependent upon our level of gross profit as a percentage of net sales, which fluctuates due to numerous factors, including changes in prices from partners, changes in the amount and timing of partner funding, volumes of purchases, changes in client mix, management of our cash conversion cycle, the relative mix of products and services sold during the period, general competitive conditions, and strategic product and services pricing and purchasing actions. As a result of significant price competition and our higher concentration of large enterprise clients, our gross margins are low, and we expect them to continue to be low in the future. Increased competition arising from industry consolidation and low demand for certain IT products and services may hinder our ability to maintain or improve our gross margins. These low gross margins magnify the impact of variations in revenue and operating costs on our operating results. In addition, our expense levels are based, in part, on anticipated net sales and the anticipated amount and timing of partner funding, and a portion of our operating expenses is relatively fixed. Therefore, we may not be able to reduce spending quickly enough to compensate for any unexpected net sales shortfall, and we may not be able to reduce our operating expenses as a percentage of revenue to mitigate any further reductions in gross margins in the future. If we cannot proportionately decrease our cost structure, our business, financial condition and results of operations could suffer. In addition, a reduction in the amount of credit granted to us by our partners could increase our need for and cost of working capital and have a material adverse effect on our business, financial condition and results of operations.

General economic conditions, including unfavorable economic conditions in a particular region, business or industry sector, may lead our clients to delay or forgo investments in IT hardware, software and services. Weak economic conditions generally or any broad-based reduction in IT spending adversely affects our business, operating results and financial condition. A prolonged slowdown in the global economy or similar crisis, or in a particular region or business or industry sector, or tightening of credit markets, could cause our clients to have difficulty accessing capital and credit sources, delay contractual payments, or delay or forgo decisions to upgrade or add to their existing IT environments, license new software or purchase products or services (particularly with respect to discretionary spending for hardware, software and services). Such events could have a material adverse effect on our business, financial condition and results of operations.

Economic or industry downturns could result in longer payment cycles, increased collection costs and defaults in excess of our expectations. A significant deterioration in our ability to collect on accounts receivable could also impact the cost or availability of financing under our accounts receivable securitization program.

There are risks associated with our international operations that are different than the risks associated with our operations in the United States, and our exposure to the risks of a global market could hinder our ability to maintain and expand international operations. Outside of the United States, we have operation centers in Australia, Canada, France, Germany and the United Kingdom, as well as sales offices throughout EMEA and APAC. In the regions in which we do not currently have a physical presence, we serve our clients through strategic relationships. In implementing our international strategy, we may face barriers to entry and competition from local companies and other companies that already have established global businesses, as well as the risks generally associated with conducting business internationally. The success and profitability of international operations are subject to numerous risks and uncertainties, many of which are outside of our control, such as:

11

Table of Contents

INSIGHT ENTERPRISES, INC.

In addition, changes in policies and/or laws of the United States or foreign governments resulting in, among other changes, higher taxation, tariffs or similar protectionist laws, currency conversion limitations or the nationalization of private enterprises could reduce the anticipated benefits of international operations and could have a material adverse effect on our business, financial condition and results of operations.

We have currency exposure arising from both sales and purchases denominated in foreign currencies, including intercompany transactions outside the United States, and we currently conduct limited hedging activities. In addition, some currencies are subject to limitations on conversion into other currencies, which can limit the ability to otherwise react to rapid foreign currency devaluations. We cannot predict with precision the effect of future exchange-rate fluctuations, and significant rate fluctuations could have a material adverse effect on our business, financial condition and results of operations.

International operations also expose us to currency fluctuations as we translate the financial statements of our foreign operations to U.S. dollars.

Breaches in the security of our electronic and other confidential information could materially adversely affect our financial condition and results of operations. We are dependent upon automated information technology processes. Privacy, security, and compliance concerns have continued to increase as technology has evolved to facilitate commerce and as cross-border commerce increases. As part of our normal business activities, we collect and store certain confidential information, including information about teammates and information about partners and clients which may be entitled to protection under a number of regulatory regimes. In the course of normal and customary business practice, we may share some of this information with vendors who assist us with certain aspects of our business. Moreover, the success of our operations depends upon the secure transmission of confidential and personal data over public networks, including the use of cashless payments. Any failure on the part of us or our vendors to maintain the security of data we are required to protect, including via the penetration of our network security and the misappropriation of confidential and personal information, could result in business disruption, damage to our reputation, financial obligations to third parties, fines, penalties, regulatory proceedings and private litigation with potentially large costs, and also result in deterioration in our teammates’, partners’ and clients’ confidence in us and other competitive disadvantages, and thus could have a material adverse effect on our business, financial condition and results of operations. In the past, we have been subject to information security attacks. Although we do not believe the attacks resulted in the misappropriation of sensitive data, we have been, and expect to continue to be, subject to electronic data attacks and threats.

Disruptions in our IT systems and voice and data networks could affect our ability to service our clients and cause us to incur additional expenses. We believe that our success to date has been, and future results of operations will be, dependent in large part upon our ability to provide prompt and efficient service to our clients. Our ability to provide that level of service is largely dependent on the ease of use, accuracy, quality and utilization of our IT systems, which affects our ability to manage our sales, client service, distribution, inventories and accounting systems, and the reliability of our voice and data networks and managed services offerings. If our current technology is determined to have a shorter useful life or the value of our current system is impaired, we could incur additional depreciation expense and/or impairment charges. Some of our IT systems are subject to ongoing IT projects designed to streamline or optimize the information systems. There is no guarantee that we will be successful in these efforts at all times or that there will not be implementation or integration difficulties. In addition, a substantial interruption in our IT systems or in our voice and data networks, however caused, could occur and could have a material adverse effect on our business, financial condition and results of operations.

The failure to comply with the terms and conditions of our commercial and public sector contracts could result in, among other things, damages, fines or other liabilities. Sales to commercial clients are based on stated contractual terms, the terms and conditions on our website or terms contained in purchase orders on a transaction by transaction basis. Sales to public sector clients are derived from sales to federal, state and local governmental departments and agencies, as well as to educational institutions, through open market sales and various contracts and programs. Noncompliance with contract terms, particularly to highly regulated public sector clients, or with government procurement regulations could result in fines or penalties against us or termination of contracts, and, in the public sector, could also result in civil, criminal, and administrative liability. With respect to our public sector clients, the government’s remedies may include suspension or debarment. In addition, almost all of our contracts have default provisions, and substantially all of our contracts in the public sector are terminable at any time for convenience of the contracting agency. These possible actions or the adoption of new or modified procurement regulations or practices, could have a material adverse effect our business, financial position and results of operations.

12

Table of Contents

INSIGHT ENTERPRISES, INC.

We rely on independent shipping companies for delivery of products and are subject to price increases or service interruptions from these carriers. We generally ship hardware products to our customers by FedEx, United Parcel Service and other commercial delivery services and invoice customers for delivery charges. If we are unable to pass on to our clients future increases in the cost of commercial delivery services, our profitability could be adversely affected. Additionally, strikes, inclement weather, natural disasters or other service interruptions by such shippers could adversely affect our ability to deliver products on a timely basis. Such events could have a material adverse effect on our business, financial condition and results of operations.

We depend on certain personnel. We rely on key management teammates to execute our strategy to grow profitable market share. The loss of one or more of these leaders, or a failure to attract and retain new executives, could have a material adverse effect on our business, financial condition and results of operations. We also believe that our future success will be largely dependent on our ability to attract and retain highly qualified management, sales, service and technical teammates, and we make significant investments in the training of our sales account executives and services engineers. If we are not able to retain such personnel or to train them quickly enough to meet changing market conditions, we could experience a drop in the overall quality and efficiency of our sales and services teammates, and that could have a material adverse effect on our business, financial condition and results of operations.

Changes in, interpretations of, or enforcement trends related to, tax rules and regulations may adversely affect our effective income tax rates or operating margins and we may be required to pay additional tax assessments. We conduct business globally and file income tax returns in various U.S. and foreign tax jurisdictions. Our effective tax rate could be adversely affected by various factors, many of which are outside of our control, including:

The determination of our worldwide provision for income taxes and other tax liabilities requires estimation, judgment and complex calculations in situations where the ultimate tax determination may not be certain. Our determination of tax liabilities is always subject to review or examination by tax authorities in various jurisdictions. Any adverse outcome of such review or examination could have a material adverse effect on our financial condition and results of operations

We may not be able to protect our intellectual property adequately, and we may be subject to intellectual property infringement claims. To protect our intellectual property, we rely on copyright, trademark and trade secret laws, unpatented proprietary know-how, and patents, as well as confidentiality, invention assignment, non-solicitation and non-competition agreements. There can be no assurance that these measures will afford us sufficient protection of our intellectual property, and it is possible that third parties may copy or otherwise obtain and use our proprietary information without authorization or otherwise infringe on our intellectual property rights. The disclosure of our trade secrets could impair our competitive position and could have a material adverse effect on our business, financial condition and results of operations.

In addition, our registered trademarks and trade names are subject to challenge by third parties. This may affect our ability to continue using those marks and names. Likewise, many businesses are actively investing in, developing and seeking protection for intellectual property in the areas of search, indexing, e-commerce and other Web-related technologies, as well as a variety of on-line business models and methods, all of which are in addition to traditional research and development efforts for IT products and application software, and non-practicing entities continue to invest in acquiring patent portfolios for the purpose of turning the portfolios into income-generating assets, whether through licensing campaigns or litigation. As a result, disputes regarding the ownership of and the right to use these technologies are likely to arise in the future, and, from time to time, parties do assert various infringement claims against us, either because of our practices or because we resell allegedly infringing hardware or software, in the form of cease-and-desist letters, licensing inquiries, lawsuits and other communications and demands. If there is a determination that we have infringed the proprietary rights of others, we could incur substantial monetary liability, be forced to stop selling infringing products or providing infringing services, be required to enter into costly royalty or licensing agreements, if available, or be prevented from using the rights, which could force us to change our business practices or hardware, software or services offerings in the future. Additionally, as we increase the types of services provided under the Insight brand, there is a greater likelihood that we will encounter challenges to our trade names, trademarks and service marks. We may not be able to use our principal mark without modification in all geographies for all of our offerings, and these challenges may come from either governmental agencies or other market participants. These types of claims could have a material adverse effect on our business, financial condition and results of operations.

13

Table of Contents

INSIGHT ENTERPRISES, INC.

Not applicable.

Our principal executive offices are located in Tempe, Arizona. We believe that our facilities will be suitable and adequate for our present purposes, and we anticipate that we will be able to extend our existing leases on terms satisfactory to us or, if necessary, to locate substitute facilities on acceptable terms. At December 31, 2015, we owned or leased approximately 1.3 million square feet of office and warehouse space, and, while approximately 70% of the square footage is in the United States, we own or lease office and warehouse facilities in 11 countries in EMEA and we lease office facilities in five countries in APAC.

Information about significant sales, distribution, services and administration facilities in use as of December 31, 2015 is summarized in the following table:

In addition to those listed above, we have leased sales offices in various cities across North America, EMEA and APAC. These properties are not included in the table above. Substantially all of our owned properties secure our senior revolving credit facility. A portion of the client support center that we own in Tempe, Arizona included in the table above is currently leased to Revana, formerly known as Direct Alliance Corporation, a discontinued operation that was sold to a third party in 2006. For additional information on operating leases, see Note 7 to the Consolidated Financial Statements in Part II, Item 8 of this report.

14

Table of Contents

INSIGHT ENTERPRISES, INC.

In November 2014, we relocated our sales and administrative operations that were housed in a property that we own in Bloomingdale, Illinois. The property is classified as a held for sale asset, which is included in other current assets in the accompanying consolidated balance sheet as of December 31, 2015 and 2014. For additional information on held for sale assets, see Note 10 to the Consolidated Financial Statements in Part II, Item 8 of this report.

For a discussion of legal proceedings, see “Legal Proceedings” in Note 17 to the Consolidated Financial Statements in Part II, Item 8 of this report, which is incorporated by reference herein.

Not applicable.

PART II

Market Information

Our common stock trades under the symbol “NSIT” on The Nasdaq Global Select Market. The following table shows, for the calendar quarters indicated, the high and low sales prices per share for our common stock as reported on The Nasdaq Global Select Market.

As of February 12, 2016, we had 37,113,611 shares of common stock outstanding held by 68 stockholders of record. This figure does not include an estimate of the number of beneficial holders whose shares are held of record by brokerage firms and clearing agencies.

We have never paid a cash dividend on our common stock, and we currently do not intend to pay any cash dividends in the foreseeable future. Our senior revolving credit facility and our accounts receivable securitization financing facility contain restrictions on the payment of cash dividends.

Issuer Purchases of Equity Securities

Although we did not repurchase shares of our common stock during the quarter ended December 31, 2015, on February 10, 2016, our Board of Directors authorized the repurchase of up to $50 million of the Company’s common stock. The Company’s share repurchases will be made on the open market, through block trades, through 10b5-1 plans or otherwise. The amount of shares purchased and the timing of the purchases will be based on working capital requirements, general business conditions and other factors. The Company intends to retire the repurchased shares.

15

Table of Contents

INSIGHT ENTERPRISES, INC.

See further information on our share repurchase programs in 2015, 2014 and 2013 in Note 16 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Stock Price Performance Graph

Set forth below is a graph comparing the percentage change in the cumulative total stockholder return on our common stock with the cumulative total return of the Nasdaq US Benchmark TR Index (Market Index) and the Nasdaq US Benchmark Computer Hardware TR Index (Industry Index) for the period starting January 1, 2011 and ending December 31, 2015. The graph assumes that $100 was invested on January 1, 2011 in our common stock and in each of the two Nasdaq indices, and that, as to such indices, dividends were reinvested. We have not, since our inception, paid any cash dividends on our common stock. Historical stock price performance shown on the graph is not necessarily indicative of future price performance.

16

Table of Contents

INSIGHT ENTERPRISES, INC.

The following selected consolidated financial data should be read in conjunction with our Consolidated Financial Statements and the Notes thereto in Part II, Item 8 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report. The selected consolidated financial data presented below under the captions “Consolidated Statements of Operations Data” and “Consolidated Balance Sheet Data” as of and for each of the years in the five-year period ended December 31, 2015 is derived from our audited consolidated financial statements. The consolidated financial statements as of December 31, 2015 and 2014, and for each of the years in the three-year period ended December 31, 2015, which have been audited by KPMG LLP, our independent registered public accounting firm, are included in Part II, Item 8 of this report.

17

Table of Contents

INSIGHT ENTERPRISES, INC.

18

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Part II, Item 8 of this report. Our actual results could differ materially from those contained in forward-looking statements due to a number of factors, including those discussed in “Risk Factors” in Part I, Item 1A and elsewhere in this report.

Overview

We are a Fortune 500-ranked global provider of hardware, software, Cloud and service solutions to business, government, healthcare and educational clients in North America; Europe, the Middle East, Africa (“EMEA”); and Asia-Pacific (“APAC”). Our offerings in North America and select countries in EMEA include hardware, software and services. Our offerings in the remainder of our EMEA segment and in APAC are largely software and select software-related services.

Although weakness in major global currencies against the U.S. dollar dampened our reported results all year, full year 2015 financial and operational highlights included:

On a consolidated basis, for the year ended December 31, 2015, our net sales of $5.4 billion increased 1% compared to 2014, up 6% year over year excluding the effects of foreign currency movements. Our resulting gross profit also increased by 1%, or $3.9 million, compared to 2014, up 5% year over year excluding the effects of foreign currency movements. Consolidated gross margin declined approximately 10 basis points to 13.3% of net sales in 2015, due primarily to results in North America, where our profitability was affected by a higher mix of device sales to large enterprise and public sector clients and the effect of lower fees earned on software enterprise agreements. However, our team executed well to optimize partner funding under core partner programs and increased the mix of higher margin services gross profit in the portfolio, which helped mitigate some of the margin compression. Selling and administrative expenses increased $7.9 million, or 1%, in 2015 compared to 2014 due to the costs of our global investments in our sales and services resources. We reported earnings from operations of $126.5 million in 2015, a decrease of 3% compared to the prior year, which represented 2.4% of net sales, compared to 2.5% in the prior year. Our effective tax rate in 2015 was 36.4% compared to 39.1% in 2014 and 38.0% in 2013. Net earnings and diluted net earnings per share were $75.9 million and $1.98, respectively, in 2015. In 2014, we reported net earnings of $75.7 million and diluted net earnings per share of $1.83. In 2013, we reported net earnings of $71.0 million and diluted net earnings per share of $1.64.

The results of operations for 2015 include the following items:

19

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

The results of operations for 2014 include the following items:

The results of operations for 2013 include the following items:

Throughout the “Overview” and “Results of Operations” sections of “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit and selling and administrative expenses on a consolidated basis and in EMEA and APAC excluding the effects of foreign currency movements. In computing these change amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period.

Net of tax amounts referenced above were computed using the statutory tax rate for the taxing jurisdictions in the operating segment in which the related expenses were recorded, adjusted for the effects of valuation allowances on net operating losses in certain jurisdictions.

During 2015, we generated $180.5 million of cash flows from operations, an increase of 64% compared to 2014. These results exceeded our historical average annual cash flow generation of $80 million to $120 million due to a single significant receivable collected from a client in the fourth quarter of 2015 for which the related payment to the supplier was due and paid in January 2016. We repurchased $91.8 million of our common stock and utilized $44.2 million, net of cash acquired, to fund the acquisition of BlueMetal. We ended the year with $188.0 million of cash and cash equivalents and $89.0 million of debt outstanding under our long-term facilities.

Details about segment results of operations can be found in Note 21 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Our discussion and analysis of financial condition and results of operations is intended to assist in the understanding of our consolidated financial statements, the changes in certain key items in those consolidated financial statements from year to year and the primary factors that contributed to those changes, as well as how certain critical accounting estimates affect our consolidated financial statements.

20

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Critical Accounting Estimates

General

Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of this report. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ from our estimates. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.

We consider the following to be our critical accounting estimates used in the preparation of our consolidated financial statements:

Sales Recognition

Sales are recognized when title and risk of loss are passed to the client, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable and collectibility is reasonably assured. Our standard sales terms are F.O.B. shipping point or equivalent, at which time title and risk of loss have passed to the client. However, because we either (i) have a general practice of covering client losses while products are in transit despite title and risk of loss contractually transferring at the point of shipment or (ii) have specifically stated F.O.B. destination contractual terms with the client, delivery is not deemed to have occurred until the point in time when the product is received by the client.

We leverage drop-shipment arrangements with many of our partners and suppliers to deliver products to our clients without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-shipment arrangements on a gross basis when the product is received by the client. We recognize revenue on a gross basis as the principal in the transaction because we are the primary obligor in the arrangement, we assume inventory risk if the product is returned by the client, we set the price of the product charged to the client, we assume credit risk for the amounts invoiced, and we work closely with our clients to determine their hardware and software specifications.

We make provisions for estimated product returns that we expect to occur under our return policy based upon historical return rates. Our manufacturers warrant most of the products we market, and it is our policy to request that clients return their defective products directly to the manufacturer for warranty service during the manufacturer’s warranty period. On selected products, and for selected client service reasons, we may accept returns directly from the client and then either credit the client or ship a replacement product. We generally offer a limited 15- to 30-day return policy for unopened products and certain opened products, which are consistent with manufacturers’ terms; however, for some products we may charge restocking fees. Products returned opened are processed and returned to the manufacturer or partner for repair, replacement or credit to us. Subject to some manufacturers’ restrictions, certain products cannot be returned to the manufacturer for warranty processing. We resell most unopened products returned to us. If we accept a return from a client that we cannot return to the partner, we try to mitigate our losses by selling to inventory liquidators, to end users as “previously sold” or “used” products, or through other channels.

Revenue is recognized from software sales when clients acquire the right to use or copy software under license, but in no case prior to the commencement of the term of the initial software license agreement, provided that all other revenue recognition criteria have been met (i.e., evidence of the arrangement exists, the fee is fixed or determinable and collectibility of the fee is probable).

21

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

We sell certain third-party service contracts and software maintenance or subscription products for which we are not the primary obligor. These sales do not meet the criteria for gross sales recognition and, thus, are recorded on a net sales recognition basis. As we enter into contracts with third-party service providers or vendors and our clients, we evaluate whether the subsequent sales of such services should be recorded as gross sales or net sales. We determine whether we act as a principal in the transaction and assume the risks and rewards of ownership or if we are simply acting as an agent or broker. Under gross sales recognition, the selling price is recorded in sales and our cost to the third-party service provider or vendor is recorded in costs of goods sold. Under net sales recognition, the cost to the third-party service provider or vendor is recorded as a reduction to sales, resulting in net sales equal to the gross profit on the transaction, and there are no costs of goods sold.

We recognize revenue for sales of services ratably over the time period over which the service will be provided if there is no discernible pattern of recognition of the cost to perform the service. Billings for such services that are made in advance of the related revenue recognized are recorded as deferred revenue and recognized as revenue ratably over the billing coverage period. Revenue from certain arrangements that allow for the use of a product or service over a period of time without taking possession of software are also accounted for ratably over the time period over which the service will be provided.

We recognize revenue for professional services engagements that are on a time and materials basis based upon hours incurred as the services are performed and amounts are earned.

Additionally, we sell certain professional services contracts on a fixed fee basis. Revenues for fixed fee professional services contracts are recognized based on the ratio of costs incurred to total estimated costs. Net sales for these service contracts are not a significant portion of our consolidated net sales.

In certain arrangements, we may provide a combination of hardware and software products and the provision of services. Services that are performed by us in conjunction with hardware and software sales that are completed in our facilities prior to shipment of the product are recognized upon delivery, when title passes to the client, for the hardware sale. Net sales of services that are performed at client locations are primarily service-only contracts and are recorded as sales when the services are performed. The total consideration for an arrangement with multiple deliverables is allocated to all deliverables that represent a separate unit of accounting using the relative selling price method.

Partner Funding

We receive payments and credits from partners, including consideration pursuant to volume sales incentive programs, volume purchase incentive programs and shared marketing expense programs. Partner funding received pursuant to volume sales incentive programs is recognized as it is earned as a reduction to costs of goods sold. Partner funding received pursuant to volume purchase incentive programs is allocated as a reduction to inventories based on the applicable incentives earned from each partner and is recorded in costs of goods sold as the related inventory is sold. Partner funding received pursuant to shared marketing expense programs is recorded as it is earned as a reduction of the related selling and administrative expenses in the period the program takes place if the consideration represents a reimbursement of specific, incremental, identifiable costs. Consideration that exceeds the specific, incremental, identifiable costs is classified as a reduction of costs of goods sold. Changes in estimates of anticipated achievement levels under individual partner programs could have a material effect on our results of operations and our cash flows.

See Note 1 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of our accounting policies related to partner funding.

Valuation of Long-Lived Assets Including Purchased Intangible Assets and Goodwill

We review property, plant and equipment and purchased intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. If such events or changes in circumstances indicate a possible impairment, our asset impairment review assesses the recoverability of the assets based on the estimated undiscounted future cash flows expected to result from the use of the asset or the asset group plus net proceeds expected from disposition of the asset or the asset group (if any) and compares that value to the carrying value. Such impairment test is based on the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the carrying value exceeds the undiscounted future cash flows, an impairment loss is recognized for the difference between fair value and the carrying amount. This approach uses our estimates of future market growth, forecasted net sales and costs, expected periods the assets will be utilized and appropriate discount rates.

22

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

We perform an annual review of our goodwill in the fourth quarter of every year, or more frequently if indicators of potential impairment exist, to determine if the carrying value of our recorded goodwill is impaired. We continually assess whether any indicators of impairment exist, and that assessment requires a significant amount of judgment. Events or circumstances that could trigger an impairment review include a significant adverse change in legal factors or in the business climate, unanticipated competition, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, significant declines in our stock price for a sustained period or significant underperformance relative to expected historical or projected future cash flows or results of operations. Any adverse change in these factors, among others, could have a significant effect on the recoverability of goodwill and could have a material effect on our consolidated financial statements.

The goodwill impairment test is performed at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (referred to as a “component”). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and management of the segment regularly reviews the operating results of that component. When two or more components of an operating segment have similar economic characteristics, the components may be aggregated and deemed a single reporting unit. An operating segment shall be deemed to be a reporting unit if all of its components are similar, if none of its components is a reporting unit, or if the segment comprises only a single component. Insight has three reporting units, which are equivalent to our operating segments.

We may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform a quantitative two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. In completing a quantitative test for a potential impairment of goodwill, we first compare the estimated fair value of each reporting unit in which the goodwill resides to its book value, including goodwill. Management must apply judgment in determining the estimated fair value of our reporting units. Multiple valuation techniques can be used to assess the fair value of the reporting unit, including the market and income approaches. All of these techniques include the use of estimates and assumptions that are inherently uncertain. Changes in these estimates and assumptions could materially affect the determination of fair value or goodwill impairment, or both. These estimates and assumptions primarily include, but are not limited to, an appropriate control premium in excess of the market capitalization of the Company, future market growth, forecasted sales and costs and appropriate discount rates. Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. Management evaluates the merits of each significant assumption, both individually and in the aggregate, used to determine the fair value of the reporting units. If the estimated fair value exceeds book value, goodwill is considered not to be impaired and no additional steps are necessary. To ensure the reasonableness of the estimated fair values of our reporting units, we perform a reconciliation of our total market capitalization to the estimated fair value of all of our reporting units.

If the fair value of the reporting unit is less than its book value, then we are required to perform the second step of the impairment analysis by comparing the carrying amount of the goodwill with its implied fair value. In step two of the analysis, we utilize the fair value of the reporting unit computed in the first step to perform a hypothetical purchase price allocation to the fair value of the assets and liabilities of the reporting unit. The difference between the fair value of the reporting unit calculated in step one and the fair value of the underlying assets and liabilities of the reporting unit is the implied fair value of the reporting unit’s goodwill. Management must also apply judgment in determining the estimated fair value of these individual assets and liabilities and may include independent valuations of certain internally generated and unrecognized intangible assets, such as trademarks. Management also evaluates the merits of each significant assumption, both individually and in the aggregate, used to determine the fair values of these individual assets and liabilities. If the carrying amount of our goodwill exceeds the implied fair value of that goodwill, an impairment loss would be recognized in an amount equal to the excess.

See further information on the carrying value of goodwill in Note 3 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Income Taxes

Our effective tax rate includes the effect of undistributed foreign earnings for which no U.S. taxes have been provided because such earnings are planned to be reinvested indefinitely outside the United States. If there are material changes in our estimates of cash, working capital and long-term investment requirements and it becomes apparent that some or all of the undistributed earnings of a subsidiary will need to be remitted in the foreseeable future, but U.S. income taxes have not been recognized by Insight, we would be required to reassess current and future income tax expense attributable to that subsidiary. A determination that we will no longer assert indefinite reinvestment in one or more foreign jurisdictions could affect our assertion on our other foreign entities.

23

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We consider past operating results, future market growth, forecasted earnings, historical and projected taxable income, the mix of earnings in the jurisdictions in which we operate, prudent and feasible tax planning strategies and statutory tax law changes in determining the need for a valuation allowance. If we were to determine that it is more likely than not that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period such determination is made. Likewise, if we later determine that it is more likely than not that all or part of the net deferred tax assets would be realized, then all or part of the previously provided valuation allowance would be reversed.

We establish liabilities for potentially unfavorable outcomes associated with uncertain tax positions taken on specific tax matters. These liabilities are based on management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. There may be differences between the anticipated and actual outcomes of these matters that may result in subsequent recognition or derecognition of a tax position based on all the available information at the time. If material adjustments are warranted, it could affect our effective tax rate.

Additional information about the valuation allowance and uncertain tax positions can be found in Note 11 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Contingencies

From time to time, we are subject to potential claims and assessments from third parties. We are also subject to various government agency, client and partner audits. We continually assess whether or not such claims have merit and warrant accrual. An accrual is made if it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such estimates are subject to change and may affect our results of operations and our cash flows. Additional information about contingencies can be found in Note 17 to the Consolidated Financial Statements in Part II, Item 8 of this report.

RESULTS OF OPERATIONS

The following table sets forth certain financial data as a percentage of net sales for the years ended December 31, 2015, 2014 and 2013:

24

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

2015 Compared to 2014

Net Sales. Net sales increased 1%, or $56.9 million, in 2015 compared to 2014. Our net sales by operating segment for 2015 and 2014 were as follows (dollars in thousands):

Net sales in North America increased 7%, or $260.8 million, in 2015 compared to 2014. Net sales of hardware, software and services increased 7%, 5% and 20%, respectively, year over year. Net sales in the hardware category were up due to higher sales of client devices and networking and server products to large enterprise and public sector clients, including server sales resulting from the end of life of Microsoft Windows Server 2003 and the completion of a number of multi-quarter network deployments during 2015. Software sales comparisons reflect growth driven from stronger demand for business productivity and security solutions, particularly in the public sector, where we added new clients and continued to grow our existing portfolio. Services sales improved with additional consulting services engagements and technical deployments performed during 2015, reflecting the benefits of expanding our solutions capabilities, including the acquisition of BlueMetal in the fourth quarter of 2015.

Net sales in EMEA decreased 11%, or $168.8 million, in U.S. dollars, in 2015 compared to 2014. Excluding the effects of foreign currency movements, net sales increased 2% compared to the prior year. Net sales of services were up 9% year over year, while net sales of hardware and software were down 7% and 14%, respectively, year to year, all in U.S. dollars. Excluding the effects of foreign currency movements, net sales of services, hardware and software increased 24%, 2% and 1%, respectively, year over year. The increase in services net sales was due primarily to increased sales of Cloud solutions and third-party services to new and existing clients across the region. The increase in hardware net sales (excluding the effects of foreign currency movements) was due primarily to higher volume in sales with our corporate and public sector clients, with year over year growth most notably in the server hardware category. The increase in software net sales (excluding the effects of foreign currency movements) was driven by higher volume with our public sector and service provider clients, primarily for business productivity solutions, earlier in the year, offset by the effect of certain large software transactions in the fourth quarter of the prior year that did not recur in 2015.

Net sales in APAC decreased 16%, or $35.1 million, in 2015 compared to 2014. Excluding the effects of foreign currency movements, net sales decreased 5% compared to the prior year due to lower volume as a result of a softer economy and a higher mix of software maintenance sales, which are recorded net of related costs within the net sales line item of our financial statements, during 2015 compared to 2014.

Net sales by category for North America, EMEA and APAC were as follows for 2015 and 2014:

25

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Gross Profit. Gross profit increased 1%, or $3.9 million, in 2015 compared to 2014, with gross margin decreasing approximately 10 basis points to 13.3% of net sales. Our gross profit and gross profit as a percent of net sales by operating segment for 2015 and 2014 were as follows (dollars in thousands):

North America’s gross profit in 2015 increased 5% compared to 2014, but as a percentage of net sales, gross margin decreased by approximately 30 basis points year to year. The decline in gross margin was due primarily to a 21 basis point decrease in margin contributed by agency fees from enterprise software agreements due primarily to partner program changes and a 20 basis point decrease in product margin, which includes partner funding and freight. The decrease in product margin reflects a higher mix of device sales to large enterprise and public sector clients at lower margins, as well as the negative effect on the year over year comparison of a reduction in costs of goods sold in the prior year of approximately $4.1 million associated with the settlement or recovery of previously disputed sales tax amounts during 2014. These decreases in margin were partially offset by a 17 basis point increase in sales of higher margin services.

EMEA’s gross profit decreased 7% in U.S. dollars in 2015 compared to 2014. Excluding the effects of foreign currency movements, gross profit was up 6% compared to the prior year. As a percentage of net sales, gross margin increased by approximately 60 basis points year over year. The increase in gross margin was due primarily to a 49 basis point increase in product margin, which includes partner funding and freight, and a 12 basis point increase in sales of higher margin services. The primary driver of the increase in product margin during 2015 compared to 2014 was the favorable effect of certain large, low margin software transactions in the prior year period that did not recur in 2015.

APAC’s gross profit decreased 19% in 2015 compared to 2014. Excluding the effects of foreign currency movements, gross profit decreased 7% compared to the prior year. As a percentage of net sales, gross margin decreased by approximately 40 basis points, due primarily to a 69 basis point decrease in margin driven by lower fees from enterprise software agreements resulting from partner program changes. This decrease in margin was partially offset by a 21 basis point increase in sales of higher margin services.

Operating Expenses.

Selling and Administrative Expenses. Selling and administrative expenses increased 1%, or $7.9 million, in 2015 compared to 2014. Selling and administrative expenses increased approximately 10 basis points as a percentage of net sales in 2015 compared to 2014. Selling and administrative expenses as a percent of net sales by operating segment for 2015 and 2014 were as follows (dollars in thousands):

North America’s selling and administrative expenses increased 6%, or $23.7 million, in 2015 compared to 2014, but, as a percentage of net sales, selling and administrative expenses decreased approximately 10 basis points to 10.4% of net sales in 2015. As discussed in Note 10 to the Consolidated Financial Statements in Part II, Item 8 of this report, our results for 2015 and 2014 include non-cash charges of $800,000 and $5.2 million, respectively, to reduce the carrying amount of our owned real estate in Bloomingdale, Illinois that is currently held for sale to its estimated fair value less costs to sell. Additionally, salaries and wages and contract labor increased $15.2 million year over year due to investments in sales and services personnel, variable compensation increased approximately $6.3 million year over year as a result of improved net sales and gross profit performance and teammate-related expenses increased $2.5 million year over year due primarily to an increase in healthcare benefit costs due to increased claims under self-insured programs.

26

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

EMEA’s selling and administrative expenses decreased 7%, or $12.9 million, in 2015 compared to 2014, but, as a percentage of net sales, selling and administrative expenses increased approximately 50 basis points to 12.1% of net sales in 2015. Excluding the effects of foreign currency movements, selling and administrative expenses increased 5% compared to the prior year. The increase was primarily driven by higher salaries and wages from investments in sales and services related headcount to support services and Cloud growth across the region.

APAC’s selling and administrative expenses decreased 11%, or $2.8 million, in 2015 compared to 2014, but, as a percentage of net sales, selling and administrative expenses increased approximately 80 basis points to 12.6% of net sales in 2015. Excluding the effects of foreign currency movements, selling and administrative expenses increased 3% compared to the prior year. The year over year increase is primarily driven by higher salaries and wages from an increase in teammate-related expenses, partially offset by lower variable compensation based on net sales and gross profit performance year to year.

Severance and Restructuring Expenses. During 2015, North America and EMEA recorded severance expense, net of adjustments, totaling $1.1 million and $3.8 million, respectively, related to a continued review of resource needs in North America and additional restructuring activities in EMEA. In North America and EMEA, $1.5 million and $4.0 million, respectively, in new severance costs were offset by $418,000 and $182,000, respectively, of adjustments to prior severance accruals due to changes in estimates during 2015. During 2014, North America, EMEA and APAC recorded severance expense, net of adjustments, totaling $971,000, $3.4 million and $106,000, respectively. In North America and EMEA, $1.5 million and $3.9 million, respectively, in new severance costs were offset by $492,000 and $531,000, respectively, of adjustments to prior severance accruals due to changes in estimates during 2014. See Note 8 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of severance and restructuring activities.

Non-Operating (Income) Expense.

Interest Income. Interest income for 2015 and 2014 was generated from interest earned on cash and cash equivalent bank balances. The decrease in interest income year to year is primarily due to lower average interest-bearing cash and cash equivalent balances and lower interest rates earned on such balances during 2015.

Interest Expense. Interest expense primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facility. Interest expense increased 20% in 2015 compared to 2014 due primarily to higher average daily balances under our inventory financing facility in 2015 compared to 2014, resulting in an increase in imputed interest under the facility from $2.4 million in 2014 to $3.4 million in 2015. For a description of our various financing facilities, see Notes 5 and 6 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Net Foreign Currency Exchange Gains/Losses. These gains/losses result from foreign currency transactions, including foreign currency derivative contracts and intercompany balances that are not considered long-term in nature. The change in net foreign currency exchange gains/losses is due primarily to the underlying changes in the applicable exchange rates, partially mitigated by our use of foreign exchange forward contracts to offset the effects of fluctuations in foreign currencies on certain of our non-functional currency assets and liabilities.

Other Expense, Net. Other expense, net, consists primarily of bank fees associated with our cash management activities.

Income Tax Expense. Our effective tax rate for 2015 was 36.4% compared to 39.1% in 2014. The decrease in the tax rate from 2014 to 2015 was primarily due to reduced losses in certain foreign jurisdictions in 2015, resulting in less of an increase in the valuation allowance for deferred tax assets related to these foreign operating losses. The effective tax rate in 2015 was higher than the federal statutory rate of 35.0% primarily due to state taxes in the United States as well as the increases in the valuation allowances in certain foreign jurisdictions. These increases in our effective tax rate in 2015 were offset partially by lower taxes on earnings in foreign jurisdictions. See Note 11 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of income tax expense.

27

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

2014 Compared to 2013

Net Sales. Net sales increased 3%, or $171.9 million, in 2014 compared to 2013. Our net sales by operating segment for 2014 and 2013 were as follows (dollars in thousands):

Net sales in North America increased 3%, or $92.0 million, in 2014 compared to 2013. Net sales of hardware, software and services increased 2%, 4% and 1%, respectively, year over year. Hardware sales grew sequentially in each of the last three quarters of 2014, ending the year with strong growth in sales of notebooks and desktops and in server sales as we helped clients address outdated server technology related to the end of life of Microsoft Windows Server 2003. Software sales followed typical seasonal trends during 2014 with growth driven from stronger demand for business continuity and virtualization solutions. Services sales improved with additional consulting and technical services engagements performed during 2014.

Net sales in EMEA increased 5%, or $70.8 million, in U.S. dollars, in 2014 compared to 2013. Excluding the effects of foreign currency movements, net sales increased 3% compared to 2013. Net sales of hardware and services were up 14% and 7%, respectively, year over year, while net sales of software were flat year over year. Excluding the effects of foreign currency movements, net sales of hardware and services increased 9% and 5%, respectively, while net sales of software were relatively flat year over year. The increase in hardware sales was due to higher volume with all of our client groups, particularly public sector and mid-market clients. The increase in net sales of services was due primarily to new client engagements and higher volume with existing clients.

Net sales in APAC increased 4%, or $9.1 million, in U.S. dollars, in 2014 compared to 2013. Excluding the effects of foreign currency movements, net sales increased 10% compared to 2013 due to higher volume with mid-market and public sector clients as well as lower software maintenance sales, which are recorded net of related costs within the net sales line item of our financial statements, during 2014 compared to 2013.

Net sales by category for North America, EMEA and APAC were as follows for 2014 and 2013:

Gross Profit. Gross profit increased 2%, or $13.5 million, in 2014 compared to 2013, with gross margin decreasing approximately 20 basis points to 13.4% of net sales. Our gross profit and gross profit as a percent of net sales by operating segment for 2014 and 2013 were as follows (dollars in thousands):

North America’s gross profit in 2014 increased 1% compared to 2013, but as a percentage of net sales, gross margin decreased by approximately 20 basis points year to year. The decline in gross margin was due primarily to a 38 basis point decrease in margin contributed by agency fees from enterprise software agreements due primarily to partner program changes. The decrease in margin was partially offset by an 8 basis point increase in sales of higher margin services and a 7 basis point increase in product margin, which includes partner funding and freight. The increase in product margin reflects a reduction in costs of goods sold of approximately $4.1 million associated with the settlement or recovery of previously disputed sales tax amounts during 2014.

28

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

EMEA’s gross profit increased 4% in U.S. dollars in 2014 compared to 2013. Excluding the effects of foreign currency movements, gross profit was up 2% compared to 2013. As a percentage of net sales, gross margin remained flat at 13.0% year over year. A decrease in margin resulting from lower fees from enterprise software agreements of 14 basis points due to partner program changes and a decrease in software product margin of 13 basis points were partially offset by a 16 basis point increase in sales of higher margin services. Year over year increases in hardware product margin during 2014 compared to 2013 were offset by decreases in partner funding resulting from software partner program changes year to year.

APAC’s gross profit decreased 1% in 2014 compared to 2013. Excluding the effects of foreign currency movements, gross profit increased 3% compared to 2013. As a percentage of net sales, gross margin decreased by approximately 90 basis points, due primarily to an 88 basis point decrease in margin driven by lower fees from enterprise software agreements resulting from partner program changes.

Operating Expenses.

Selling and Administrative Expenses. Selling and administrative expenses increased 2%, or $12.1 million, in 2014 compared to 2013. Selling and administrative expenses decreased approximately 20 basis points as a percentage of net sales in 2014 compared to 2013. Selling and administrative expenses as a percent of net sales by operating segment for 2014 and 2013 were as follows (dollars in thousands):

North America’s selling and administrative expenses increased 3%, or $10.6 million, in 2014 compared to 2013, and, as a percentage of net sales, selling and administrative expenses increased approximately 10 basis points to 10.5% of net sales in 2014. As discussed in Note 10 to the Consolidated Financial Statements in Part II, Item 8 of this report, our results for 2014 include non-cash charges of $5.2 million, including an impairment loss of $4.6 million and accelerated depreciation of $620,000, to reduce the carrying amount of our owned real estate in Bloomingdale, Illinois that is currently held for sale to its then estimated fair value less costs to sell. Additionally, salaries and wages and contract labor increased $4.7 million year over year due to planned investments in our sales organization, including the addition of over 160 teammates in North America focused on services, software, key vertical markets and field sales in core geographic markets, and teammate benefit expenses increased approximately $3.6 million year over year due to higher healthcare costs in 2014. These increases in selling and administrative expenses were partially offset by reduced spending in other expense categories, such as professional services, which declined $2.7 million during 2014 compared to 2013.

EMEA’s selling and administrative expenses increased less than 1%, or $804,000, in 2014 compared to 2013, and, as a percentage of net sales, selling and administrative expenses decreased approximately 50 basis points to 11.6% of net sales for 2014. Excluding the effects of foreign currency movements, selling and administrative expenses decreased 2% compared to 2013. Higher variable compensation expense on increased gross profit and investments to support services and Cloud growth initiatives were more than offset by a decrease in support salaries and wages due to restructuring actions in prior periods.

APAC’s selling and administrative expenses increased 3%, or $697,000, in 2014 compared to 2013, and, as a percentage of net sales, selling and administrative expenses decreased approximately 20 basis points to 11.8% of net sales in 2014. Excluding the effects of foreign currency movements, selling and administrative expenses increased 9% compared to 2013. The year over year increase was primarily due to increases in variable compensation and expenses resulting from our investments in the new IT system in the region.

29

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Severance and Restructuring Expenses. During 2014, North America, EMEA and APAC recorded severance expense, net of adjustments, totaling $971,000, $3.4 million and $106,000, respectively, related to a continued review of resource needs in North America and additional restructuring activities in EMEA. In North America and EMEA, $1.5 million and $3.9 million, respectively, in new severance costs were offset by $492,000 and $531,000, respectively, of adjustments to prior severance accruals due to changes in estimates during 2014. During 2013, North America and EMEA recorded severance expense, net of adjustments, of $3.3 million and $9.4 million, respectively. See Note 8 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of severance and restructuring activities.

Non-Operating (Income) Expense.

Interest Income. Interest income for 2014 and 2013 was generated from interest earned on cash and cash equivalent bank balances. The decrease in interest income year to year is primarily due to lower average interest-bearing cash and cash equivalent balances and lower interest rates earned on such balances during 2014.

Interest Expense. Interest expense primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facility. Interest expense decreased 5% in 2014 compared to 2013 due primarily to lower average daily balances on our debt facilities in 2014 compared to 2013. Imputed interest under our inventory financing facility was $2.4 million in 2014, compared to $2.5 million in 2013. For a description of our various financing facilities, see Notes 5 and 6 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Net Foreign Currency Exchange Gains/Losses. These gains/losses result from foreign currency transactions, including foreign currency derivative contracts and intercompany balances that are not considered long-term in nature. The change in net foreign currency exchange gains/losses is due primarily to the underlying changes in the applicable exchange rates, mitigated by our use of foreign exchange forward contracts to partially offset the effects of fluctuations in foreign currencies on certain of our non-functional currency assets and liabilities.

Other Expense, Net. Other expense, net, consists primarily of bank fees associated with our cash management activities.

Income Tax Expense. Our effective tax rate for 2014 was 39.1% compared to 38.0% for 2013. The increase in the tax rate from 2013 to 2014 was primarily due to higher losses in certain foreign jurisdictions in 2014, resulting in an increase in the valuation allowance for deferred tax assets related to these foreign operating losses, and the recognition of certain tax benefits related to the re-measurement or settlement of specific uncertain tax positions during 2013, which decreased the prior year rate, offset partially by lower taxes on earnings in foreign jurisdictions. The effective tax rate in 2014 was higher than the federal statutory rate of 35.0% primarily due to these increases in the valuation allowances and to state taxes in the United States. These increases in our effective tax rate in 2014 were offset partially by lower taxes on earnings in foreign jurisdictions. See Note 11 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of income tax expense.

Liquidity and Capital Resources

The following table sets forth certain consolidated cash flow information for 2015, 2014 and 2013 (in thousands):

30

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Cash and Cash Flow

Our primary uses of cash during 2015 were to fund working capital requirements, repurchase shares of our common stock, acquire BlueMetal and fund capital expenditures. Operating activities provided $180.5 million in cash in 2015, a 64% increase from 2014. The 2015 results are affected by a single significant receivable collected from a client in the fourth quarter of 2015 for which the related payment to the supplier was due and paid in January 2016, as discussed in more detail below. We had net combined borrowings on our long-term debt facilities of $28.0 million during 2015. We repurchased $91.8 million of our common stock and acquired BlueMetal for $44.2 million, net of cash acquired. Capital expenditures were $13.4 million in 2015, a 34% increase from 2014, reflecting higher IT investments year over year. Cash and cash equivalent balances in 2015 were negatively affected by $16.7 million as a result of foreign currency exchange rates, compared to a negative effect of $16.6 million in 2014.

We anticipate that cash flows from operations, together with the funds available under our financing facilities, will be adequate to support our presently anticipated cash and working capital requirements for operations as well as other strategic investments over the next 12 months. We currently do not intend nor foresee a need to repatriate any foreign undistributed earnings. We expect existing domestic cash and cash flows from operations to continue to be sufficient to fund our domestic operating cash activities and cash commitments for investing and financing activities, such as capital expenditures and debt repayments, for at least the next 12 months.

Net cash provided by operating activities. Cash flows from operating activities reflect our net earnings, adjusted for non-cash items such as depreciation, amortization, stock-based compensation expense and write-offs and write-downs of assets, as well as changes in asset and liability balances. In 2015, the increases in accounts receivable and accounts payable reflect increased sales and associated costs of goods sold, respectively, in 2015 compared to 2014. However, the 2015 results are also affected by the single significant receivable collected from a client in the fourth quarter of 2015 for which the payment to the supplier was due and paid in January 2016, noted previously. The increase in other assets was primarily a result of our deferral of costs for certain payments made or payable to partners at December 31, 2015, in advance of our being able to recognize the related revenue. As a result, cash flows from operating activities in 2015 exceeded our historical average annual cash flow generation of $80 million to $120 million.

In 2014, the increases in accounts receivable and accounts payable reflect increased sales and associated costs of goods sold, respectively, in 2014 compared to 2013. The increase in inventories is primarily attributable to an increase in inventory levels at December 31, 2014, to support specific client engagements as well as to hardware sale transactions in transit to clients as of December 31, 2014 such that delivery was not deemed to have occurred until the product was received by the client in early January 2015. The decrease in accrued expenses and other liabilities in 2014 was primarily due to the relative timing of sales tax and VAT payments year over year.

In 2013, the decreases in accounts receivable and accounts payable reflect the effect of a single significant sale transacted with a public sector client late in December 2012. The increase in other assets in 2013 was primarily a result of our deferral of costs for certain payments made or payable to partners at December 31, 2013, in advance of our being able to recognize the related revenue.

Our consolidated cash flow operating metrics for the quarters ended December 31, 2015, 2014 and 2013 are as follows:

31

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Our cash conversion cycle was 20 days in the fourth quarter ended December 31, 2015, a decrease of four days from the fourth quarter of 2014, due primarily to an increase in DPOs in North America driven by a single significant payment to a supplier that was due and paid in January 2016, after the resolution of certain invoicing issues with the supplier. Although we did not pay the supplier until after year-end, we collected on the accounts receivable from the client in the fourth quarter of 2015 under normal credit terms.

Our cash conversion cycle was 24 days in the fourth quarter ended December 31, 2014, an improvement of three days from the fourth quarter of 2013, due primarily to higher DPOs in North America driven by the timing of payments to suppliers during the quarter ended December 31, 2014 offset by a one day increase in DIOs due to the increase in inventories discussed above.

Our cash conversion cycle was 27 days in the fourth quarter ended December 31, 2013, up three days from the fourth quarter of 2012, due primarily to lower DPOs in North America driven by the timing of payments to suppliers during the quarter ended December 31, 2013. The year to year decreases in both DSOs and DPOs reflect the effect of a single significant sale transacted with a public sector client late in December 2012.

We expect that cash flow from operations will be used, at least partially, to fund working capital as we typically pay our partners on average terms that are shorter than the average terms we grant to our clients in order to take advantage of supplier discounts. We intend to use cash generated in 2016 in excess of working capital needs to repurchase shares of our common stock and support our capital expenditures for the year and to pay down our debt balances. We also may use cash to fund potential acquisitions to add select capabilities.

Net cash used in investing activities. Capital expenditures of $13.4 million, $10.0 million and $19.0 million in 2015, 2014 and 2013, respectively, were primarily related to technology and facility enhancements. We expect total capital expenditures in 2016 to be between $10.0 million and $15.0 million, primarily for technology and facility related upgrade projects.

During 2015, we acquired BlueMetal for $44.2 million, net of cash acquired.

Net cash used in financing activities. During 2015, we had net combined borrowings on our long-term debt under our senior revolving credit facility (“revolving facility”) and our accounts receivable securitization facility (“ABS facility”) of $28.0 million and made net repayments under our inventory financing facility of $16.5 million. In 2015, we also funded $91.8 million of repurchases of our common stock. During 2014, we had net combined repayments on our long-term debt under our revolving facility and our ABS facility of $5.5 million and had net borrowings under our inventory financing facility of $7.5 million. In 2014, we also funded $50.4 million of repurchases of our common stock. During 2013, we had net combined repayments on our revolving facility and our ABS facility of $13.5 million and had net repayments under our inventory financing facility of $1.6 million. In 2013, we funded $57.8 million of repurchases of our common stock.

Financing Facilities

As of December 31, 2015, our long-term debt balance consisted of $89.0 million outstanding under our $200.0 million ABS facility and no amounts outstanding under our $350.0 million revolving facility. As of December 31, 2015, the current portion of our long-term debt relates solely to our capital lease and other financing obligations. Our objective is to pay our debt balances down while retaining adequate cash balances to meet overall business objectives.

While the ABS facility has a stated maximum amount, the actual availability under the ABS facility is limited by the quantity and quality of the underlying accounts receivable. As of December 31, 2015, qualified receivables were sufficient to permit access to the full $200.0 million, of which $89.0 million was outstanding at December 31, 2015.

32

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Our consolidated debt balance that can be outstanding at the end of any fiscal quarter under our revolving facility and our ABS facility is limited by certain financial covenants, particularly a maximum leverage ratio. The maximum leverage ratio is calculated as aggregate debt outstanding divided by the sum of the Company’s trailing twelve month net earnings (loss) plus (i) interest expense, excluding non-cash imputed interest on our inventory financing facility, (ii) income tax expense (benefit), (iii) depreciation and amortization, (iv) non-cash stock-based compensation and (v) extraordinary or non-recurring non-cash losses or expenses (“adjusted earnings”). The maximum leverage ratio permitted under the agreements is 2.75 times trailing twelve-month adjusted earnings. We anticipate that we will be in compliance with our maximum leverage ratio requirements over the next four quarters. However, a significant drop in the Company’s adjusted earnings would limit the amount of indebtedness that could be outstanding at the end of any fiscal quarter to a level that would be below the Company’s consolidated maximum facility amounts. Based on the maximum permitted leverage ratio as of December 31, 2015, the Company’s debt balance that could have been outstanding under our revolving facility and our ABS facility was reduced from the maximum borrowing capacity of $550.0 million to $469.3 million, of which $89.0 million was outstanding at December 31, 2015.

Our revolving facility and our ABS facility contain various covenants customary for transactions of this type, including limitations on the payment of dividends and the requirement that we comply with maximum leverage, minimum fixed charge and minimum asset coverage ratio requirements and meet monthly, quarterly and annual reporting requirements. If we fail to comply with these covenants, the lenders would be able to demand payment within a specified period of time. At December 31, 2015, we were in compliance with all such covenants. Further, the terms of the ABS facility identify various circumstances that would result in an “amortization event” under the facility. At December 31, 2015, no such “amortization event” had occurred.

Notes 5 and 6 to the Consolidated Financial Statements in Part II, Item 8 of this report also include: a description of our financing facilities; amounts outstanding; amounts available and weighted average borrowings and interest rates during the year.

Undistributed Foreign Earnings

Cash and cash equivalents held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation to the United States. We do not provide for U.S. income taxes on the undistributed earnings of those of our foreign subsidiaries where earnings are reinvested and, in the opinion of management, will continue to be reinvested indefinitely outside of the United States. As of December 31, 2015, we had approximately $158.8 million in cash and cash equivalents in certain of our foreign subsidiaries where we consider undistributed earnings of these foreign subsidiaries to be permanently reinvested. As of December 31, 2015, the majority of our foreign cash resides in the Netherlands, Canada, Australia and the United Kingdom. Certain of these cash balances will be remitted to the United States by paying down intercompany payables generated in the ordinary course of business. This repayment would not change our policy to indefinitely reinvest earnings of our foreign subsidiaries. The undistributed earnings of foreign subsidiaries that are deemed to be indefinitely invested outside of the United States were approximately $88.9 million at December 31, 2015, compared to $79.6 million at the end of 2014. We intend to use undistributed earnings for general business purposes in the foreign jurisdictions as well as to fund our capital expenditures and potential acquisitions.

Off-Balance Sheet Arrangements

We have entered into off-balance sheet arrangements, which include guaranties and indemnifications. The guaranties and indemnifications are discussed in Note 17 to the Consolidated Financial Statements in Part II, Item 8 of this report. We believe that none of our off-balance sheet arrangements have, or are reasonably likely to have, a material current or future effect on our financial condition, sales or expenses, results of operations, liquidity, capital expenditures or capital resources.

33

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Contractual Obligations

At December 31, 2015, our contractual obligations for continuing operations were as follows (in thousands):

The table above excludes $3.0 million of unrecognized tax benefits, including $296,000 related to accrued interest, as we are unable to reasonably estimate the ultimate amount or timing of settlement. See further discussion in Note 11 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Although we set purchase targets with our partners tied to the amount of supplier reimbursements we receive, we have no material contractual purchase obligations with our partners.

Acquisitions

Our strategy includes the possible acquisition of or investments in other businesses to expand or complement our operations or to add select services capabilities. The magnitude, timing and nature of any future acquisitions or investments will depend on a number of factors, including the availability of suitable candidates, the negotiation of acceptable terms, our financial capabilities and general economic and business conditions. Financing for future transactions would result in the utilization of cash, incurrence of additional debt, issuance of stock or some combination of the three.

Inflation

We have historically not been adversely affected by inflation, as technological advances and competition within the IT industry have generally caused the prices of the products we sell to decline and product life cycles tend to be short. This requires our growth in unit sales to exceed the decline in prices in order to increase our net sales. We believe that most price increases could be passed on to our clients, as prices charged by us are not set by long-term contracts; however, as a result of competitive pressure, there can be no assurance that the full effect of any such price increases could be passed on to our clients.

34

Table of Contents

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Recently Issued Accounting Standards

The information contained in Note 1 to the Consolidated Financial Statements in Part II, Item 8 of this report concerning a description of recent accounting pronouncements, including our expected dates of adoption and the estimated effects on our results of operations and financial condition, is incorporated by reference herein.

The information contained in Note 12 to the Consolidated Financial Statements in Part II, Item 8 of this report concerning a description of market risk management, including interest rate risk and foreign currency exchange risk, is incorporated by reference herein.

35

Table of Contents

INSIGHT ENTERPRISES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

36

Table of Contents

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Insight Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of Insight Enterprises, Inc. and subsidiaries (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Insight Enterprises, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Insight Enterprises, Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 19, 2016 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Phoenix, Arizona

February 19, 2016

37

Table of Contents

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Insight Enterprises, Inc.:

We have audited Insight Enterprises, Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Insight Enterprises, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A (a), Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Insight Enterprises, Inc.’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Insight Enterprises, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Insight Enterprises, Inc. and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2015, and our report dated February 19, 2016 expressed an unqualified opinion on those consolidated financial statements.

38

Table of Contents

INSIGHT ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

See accompanying notes to consolidated financial statements.

39

Table of Contents

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

See accompanying notes to consolidated financial statements.

40

Table of Contents

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

See accompanying notes to consolidated financial statements.

41

Table of Contents

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)