Technology company Ingram Micro focused on the impact of the October phaseout of the Windows 10 operating system as well as artificial intelligence during its most recent investor call.
The Aug. 7 presentation was only the second for the company since going public last fall, after a previous attempt in 2022.
Representing the complementary side of its Lifecycle ITAD business, Ingram’s Client and Endpoint Solutions sees continuing tailwinds from the upcoming end-of-life for the Windows 10 operating system.
“We’re still seeing strength on refresh of desktops and notebooks as we look towards the end of life of Windows and so forth, carrying out into even the early part of Q4,” said CFO Mike Zelis during the Aug. 7 investor call.
The company’s North American net sales were nearly $5 billion, higher by 13.7% on the year. The increase was driven by higher sales of server and storage products in the U.S., as well as in sales of notebooks and desktop computers in the U.S., with the end to support for Windows 10 “continuing to spur the refresh cycle,” Zelis said.
Latin America net sales increased less dramatically, by 0.8% to $0.9 billion, led by growth in smartphones and tablets, as well as growth in cloud-based solutions that was partially offset by a decline in sales of servers, specialty products and networking, according to a press release.
Overall, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for Q2 rose by 5.5% on the year to $294 million, and first-half adjusted EBITDA also rose by 2.8% to $585 million.
As for the impact of artificial intelligence developments, Ingram Micro has yet to see a significant impact of AI-driven product refreshes. “A majority of the refresh on PC so far for us have not been AI-driven,” said CEO Paul Bay during the call. “I think we’re in the early days of that, still early innings.”
He added that most device refreshes so far have centered on aging systems and the Windows end-of-life. Earlier this year, an industry trend report from insurance provider Assurant predicted that the availability of AI-compatible devices could encourage consumers to start upgrading phones at a faster pace.
However, Ingram Micro is seeing strength in sales of graphics cards, or GPUs, relating to AI-related demand, particularly in Asia.
In addition, the company recently detailed its strategy for the Xvantage platform, launched in 2022. The company is rolling out the platform’s second phase, which incorporates AI-driven analysis and process automation. The third phase will leverage AI to match supply and demand, and use data to drive growth and improve margins, Bay said during the call.
