INGM Q2 Deep Dive: Platform Investments Offset Margin Pressures Amid Cyber Incident

August 12, 2025 at 03:16 AM EDT

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IT distribution giant Ingram Micro (NYSE: INGM) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 10.9% year on year to $12.79 billion. On the other hand, next quarter’s revenue guidance of $12.13 billion was less impressive, coming in 1.1% below analysts’ estimates. Its GAAP profit of $0.16 per share was 59.8% below analysts’ consensus estimates.

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Ingram Micro (INGM) Q2 CY2025 Highlights:

Revenue: $12.79 billion vs analyst estimates of $12.02 billion (10.9% year-on-year growth, 6.4% beat)
EPS (GAAP): $0.16 vs analyst expectations of $0.40 (59.8% miss)
Adjusted EBITDA: $293.9 million vs analyst estimates of $296.7 million (2.3% margin, 0.9% miss)
Revenue Guidance for Q3 CY2025 is $12.13 billion at the midpoint, below analyst estimates of $12.26 billion
Operating Margin: 1.1%, in line with the same quarter last year
Market Capitalization: $4.42 billion

StockStory’s Take

Ingram Micro’s second quarter saw revenue rise year-over-year, driven by strong performance in client and endpoint solutions, advanced solutions, and continued growth in cloud services. Management highlighted that enterprise customer demand outpaced small and medium business (SMB) growth, with particularly robust momentum in North America and Asia Pacific. CEO Paul Bay pointed to increased operational efficiency and the impact of the Xvantage platform as key factors, while noting a competitive pricing environment and mix shifts toward lower-margin sales put pressure on profitability.

Looking ahead, management’s guidance for the next quarter reflects caution tied to the recent ransomware attack and less optimistic sales expectations, especially in smartphones. CFO Mike Zilis explained that conservatism is built into forecasts due to possible lost opportunities during system downtime, though early signs suggest business is returning to normal. The company expects more modest growth in client and endpoint solutions, with advanced solutions and cloud services contributing higher-margin revenue. As Bay emphasized, ongoing investments in the Xvantage platform and automation are expected to enhance operating leverage and support strategic transformation.

Key Insights from Management’s Remarks

Management attributed Q2 performance to demand in desktop and mobility categories, expansion of the Xvantage platform, and regional growth patterns. Portfolio rationalization and the aftermath of a ransomware incident also shaped the quarter.

Xvantage platform adoption: The Xvantage digital platform saw significant user engagement growth, with self-service orders up nearly 200% year-over-year and a doubling of quotes created, driven by improvements in advanced search and quoting features. The Intelligent Digital Assistant (IDA) within Xvantage generated thousands of new sales opportunities for partners, indicating improved customer activation and sales cycle efficiency.
Regional sales dynamics: Asia Pacific delivered the highest net sales growth, mainly from mobility device sales in China, while North America also posted double-digit gains, especially in servers, storage, and cybersecurity. EMEA experienced more modest expansion, and Latin America returned to growth, led by smartphones and tablets.
SMB and enterprise trends: Enterprise customers continued to outpace SMBs in revenue contribution, though SMBs showed a return to modest growth after several quarters of declines. Management noted that SMB growth remains a potential leading indicator for broader business recovery.
Portfolio divestitures: The company began divesting two noncore operations, including CloudBlue and an underperforming North American unit, as part of a strategic portfolio review. Management retained key intellectual property from CloudBlue to support the unified Xvantage platform strategy.
Cyber incident response: In early July, Ingram Micro experienced a ransomware attack. While the incident did not impact Q2 results, management emphasized rapid restoration of operations, ongoing investigation, and increased focus on cybersecurity resilience. The event led to cautious forward guidance, anticipating some business loss during system downtime.

Drivers of Future Performance

Management’s outlook centers on cautious growth expectations, reflecting the impact of the cyber incident and shifting product demand patterns.

Normalization in client and endpoint demand: The company anticipates slower growth in smartphones compared to earlier quarters, while desktop and notebook refresh cycles, influenced by Windows end-of-life, are expected to support steady sales. This normalization is likely to affect revenue mix and margin trends.
Advanced solutions and cloud growth: Management expects improved growth rates in advanced solutions—such as servers, storage, and cybersecurity—and higher contributions from cloud services. These segments typically carry higher margins and are expected to help offset pressures from lower-margin mobility sales.
Ongoing platform investment and risk management: Continued automation and enhancements to Xvantage aim to drive operational efficiencies and customer engagement. However, potential headwinds include macroeconomic uncertainty, competitive pricing in markets like India, and residual impacts from the ransomware event, all of which could affect both top-line and margin performance.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be watching (1) the impact of Xvantage adoption on customer engagement and sales productivity, (2) the pace of margin recovery as advanced solutions and cloud become a larger share of the mix, and (3) the resolution of any lingering effects from the ransomware incident—including system security and client retention. Progress on portfolio optimization and further automation initiatives will also be important signposts.

Ingram Micro currently trades at $18.80, in line with $18.84 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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