NSIT 10-K & 10-Q changes, risk factors and insider trading

We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can and do change significantly in the amounts made available and the requirements year over year. 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. We typically do not have long-term contracts with our vendor partners. As such, many of these arrangements with partners are easily terminable, and 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. Additionally, we act as a paid pass-through agent in EMEA for certain clients and their vendors. There is no contractual requirement or guarantee that our clients and these vendors will continue to use us an agent in this capacity. The loss of, or change in business relationship with, any of our key vendor partners could negatively impact our business.

In addition, certain manufacturers, publishers and distributors provide us with substantial incentives in the form of rebates, marketing funds and other investments, 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, increases in client usage, 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 regularly experience partner funding program changes that reduce the incentives many partners make available to us and that change the requirements for earning such incentives. Recent changes in incentives for cloud-based solutions impacted our results. If we are unable to react timely to remediate and effectively respond to these changes in the partner funding programs of publishers and manufacturers, including the elimination of, or significant reductions in, partner funding for some of the activities for which we have been compensated in the past, the changes could have a material adverse effect on our business, financial condition and results of operations. This is especially true in connection with the incentive programs of our largest partners: Microsoft, TD Synnex, Google, Cisco Systems, and Ingram Micro. There can be no assurance that we will continue to receive such incentives in the future.

We may not be able to keep pace with rapidly evolving technological advances and the evolving competitive marketplace in which we sell our service offerings. Our success depends on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology and market demand to serve the needs of our clients. For example, cloud, security, and digital-related solutions are continuously evolving, and there is rapid development and technological evolution in areas such as IoT, edge-computing, computer vision, advanced machine learning and AI (including Gen AI and agentic AI), automation, augmented reality, blockchain and as-a-service solutions. If we do not invest sufficiently in new technologies, effectively market our capabilities with respect to such technologies, or successfully adapt to industry developments and evolving client demand at sufficient speed and scale, we may be unable to develop or maintain a competitive advantage in the market and execute on our growth strategy and initiatives, which could have a material adverse effect on our business.

General economic and political conditions, including unfavorable 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 would adversely affect our business, operating results and financial condition. A prolonged slowdown in the global economy, including the possibility of recession or financial market instability or similar crisis, or in a particular region or business or industry sector,sector related to tariffs and trade policies or otherwise, or the 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.

Worldwide economic conditions and market volatility as a result of political leadership in certain countries and other disruptions to global and regional economies and markets, including continuing increases in inflation and interest rates, the effects of tariffs and other trade restrictions, the possibility of recession, trade disputes or financial market instability, may impact future business activities. External factors, such as potential terrorist attacks, acts of war, geopolitical and social turmoil or epidemics and other similar outbreaks in many parts of the world, could prevent or hinder our ability to do business, increase our costs and negatively affect our stock price. More generally, these geopolitical, social and economic conditions could result in increased volatility in the United States and worldwide in financial markets and in the economy, as well as other adverse impacts. Potential impacts related to conflicts, such as those ongoing in Ukraine and Gaza,the Middle East, include further market disruptions, including significant volatility in commodity prices, credit and capital markets, supply chain and logistics disruptions, adverse global economic conditions resulting from escalating geopolitical tensions,tensions and tariffs, volatility and fluctuations in foreign currency exchange rates and interest rates, inflationary pressures on raw materials and heightened cybersecurity threats, all of which could adversely impact our business, particularly our European operations.

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 Armenia, Australia, Canada, France, Germany, India, the Netherlands, the Philippines, Ukraine 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. We have begun expanding our presence in the Middle East, which presents additional complications and opportunities. 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 development, adoption and use of Gen AI and agentic AI may result in increased liability exposure and competitive risk. The development, adoption, and use of Gen AI and agentic AI technologies are complex and still in their early stages, and there are technical challenges associated with achieving the desired level of accuracy, efficiency, and reliability. For example,example Gen AIthe systems that we deploy may be flawed or may be based on datasets that are biased or insufficient. In addition, any latency, disruption, or failure in our Gen AI systems could result in vulnerabilities, delays or errors in our offerings and compromise the integrity, security, or privacy of the generated content and applicable infrastructure. These limitations or failures could result in reputational damage, legal liabilities, increased regulatory scrutiny, or loss of client confidence which, in turn, could result in lower than anticipated demand and have a material adverse effect on our business, financial condition and results of operations.

We have a substantial amount of indebtedness, which could have important consequences to our business. We have a substantial amount of indebtedness. As of December 31, 2024,2025, we had $864.1$1,361.3 million of total long-term debt outstanding, as defined by U.S. generally accepted accounting principles (“GAAP”), and an additional $217.6$225.0 million of obligations outstanding under our inventory financing agreements. At December 31, 2024,2025, $332.9$493.1 million of our outstanding debt relates to theour Convertible6.625% Senior Unsecured Notes that are convertible at the option of the holders and mature in FebruaryMay 2025,2032 and(the as"Senior a result are classified as a current liability. Additionally, pursuant to an indenture, we issued an aggregate principal amount of $500.0 million in senior unsecured notes due 2032.Notes"). We also have the ability to borrow an additional $1.8$1.1 billion under our senior secured credit facility.facility as of December 31, 2025. Our substantial indebtedness could have important consequences, that could have a material adverse effect on our business, financial condition and results of operations, including the following:

Our acquisition strategy may increase our outstanding debt and interest expense and decrease the availability under our financing facilities, all of which could have a material adverse effect on our results of operations and financial condition. To fund our acquisition initiatives, we increase our total borrowings from time to time, such as with the recent acquisitions of SADAInspire11 and Infocenter.Sekuro. These additional borrowings have the effect of increasing our future interest expenses and require escalating amortization payments. Additionally, certain of our financing facilities have interest rates that vary based on market conditions and on utilization, which increases our exposure to interest rate fluctuations and may result in greater interest expense than we have forecasted.

Contractual disputes or collection matters with our clients and third-party suppliers could be costly, time-consuming, and harm our business and reputation. Our business is contract intensive and we are party to contracts with our clients and suppliers in all of our regions. Our contracts can contain a variety of terms, including passthrough terms from our suppliers, data security and privacy obligations, indemnification obligations, and regulatory requirements. Contract terms may not always be standardized across our clients and suppliers and can be subject to differing interpretations, which could result in disputes from time to time. Our contracts with clients may also include indemnification provisions under which we agree to indemnify for losses incurred as a result of claims of third-party intellectual property rights infringement or other violations of intellectual property rights, damages caused by us to property or persons, or other liabilities relating to or arising from sale of our solutions or the resale of our suppliers’ hardware, cloud, software, and services. Large contract damages payments could harm our business, reputation, operating results, and financial condition. Any dispute or collection matter with respect to such obligations could have adverse effects on our relationships with existing or potential clients and suppliers, and harm our business, financial condition, reputation, and operating results.

We depend on certain key management personnel and our ability to attract, train and retain skilled teammates to satisfy client demand, including highly skilled technical resources with experience in key digital areas. We rely on key management and qualified engineering, marketing, and sales teammates to execute our strategy to grow profitable market share. Competition for skilled and non-skilled workers in the IT industry is intense and there are risks of sustained labor shortages in key digital areas across various regions. If we are unable to continue to attract and retain highly qualified executives, management, sales, service and technical teammates, it could have a material adverse effect on our business, financial condition and results of operations. In addition, we are in the process of recruiting and hiring a new Chief Executive Officer and will be subject to risks related to the Company being able to attract a qualified candidate and management risks in transitioning to a new Chief Executive Officer, once hired. We make significant investments, and incur significant costs, in the recruitment and development of our leadership team, sales executives, solution architects, services engineers, project managers and other IT resources. 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 teammates, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, if we are unable to maintain an environment for teammates that is competitive and appealing, it could have an adverse effect on engagement and retention, and a material adverse effect on our business.

Future sales of the Company’s common stock or equity-linked securities in the public market could lower the market price for our common stock. In the future, we may sell additional shares of our common stock or equity-linked securities to raise capital. In addition, a substantial number of shares of our common stock are reserved for issuance upon the exercise of outstanding stock options,options uponand the vesting of outstanding restricted stock units,units uponas conversionwell ofas thefor Convertiblefuture Notesissuances andunder uponour exerciseequity ofincentive the Warrants.plan. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price for our common stock. The issuance and sale of substantial amounts of common stock or equity-linked securities, or the perception that such issuances and sales may occur, could adversely affect the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked securities.

Today, every business is a technology business. At Insight, we accelerate transformation by unlocking the power of people and technology. We helpturn ourcomplexity into clarity, helping clients accelerateachieve theirmeaningful digitalbusiness journey to modernize their businessesoutcomes and maximizedrive thereal valueresults ofat technology.scale. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutionsSolutions integrator,Integrator, we enabledeliver secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 3637 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways. Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.

•We reported gross profit of $1.8 billion and record gross margin of 20.3%,21.4%, primarily driven by margin expansion in North America.America and EMEA.

•Gross profit of $1.8 billion increasedwas 6%relatively flat compared to 2023.2024.

•Consolidated gross margin expanded approximately 210110 basis points to a record 20.3%21.4% of net sales in 2024.2025. This increase reflects expansion in margin from services net sales, primarily from growth in Insightother Deliveredagency servicestransactions and cloudInsight solutionCore offerings.services.

•Our effective tax rate in 20242025 was 25.0%,30.3%, which comparescompared to our effective tax rate of 25.6%25.0% in 2023.2024.

Throughout the “Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit,profit,earnings sellingfrom operations and administrative expenses andAdjusted earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates, which are also considered to be non-GAAP measures. We believe providing this information excluding the effects of fluctuating foreign currency exchange rates provides valuable supplemental information to investors regarding our underlying business and results of operations, consistent with how we, including our management, evaluate our performance. In computing the changes in 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. The performance measures excluding the effects of fluctuating foreign currency exchange rates should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

During 2024,2025, we generated $632.8$303.8 million of cash from operating activities and primarily utilized cash for strategic acquisitions, to repurchase shares of our common stock, to repay debtdebt, to fund the cash settlement of a portion of warrants (the "Warrants") relating to certain hedge and warrant transactions (the "Call Spread Transactions") entered into in connection with the issuance of our convertible senior notes that matured in 2025 (the "Convertible Notes") and for payment of earnouts and other acquisition related payments. We had net repaymentsborrowings of $554.1$818.8 million under our ABL facility and issued $500.0 million in principal amount of Senior Notes.facility. We ended the year with $259.2$358.0 million of cash and cash equivalents and $864.1$1,361.3 million of debt outstanding under our long-term debt facilities, including $332.9 million related to the Convertible Notes that are classified as a current liability at December 31, 2024.facilities.

Supply ChainChain, ConstraintsDemand and Inflation Update

InflationWe believe inflation contributed to highersustained high interest rates on all of our variable rate borrowing facilities inthroughout 20242025, comparedconsistent towith 2023.the prior year period. While these interest rates are expected to eventuallycontinue decrease,to moderately decrease going forward, we continue to anticipate higher than historical rates throughoutin most of 2025.2026. We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chainchain, demand for our products whether due to tariffs or otherwise and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity. We are also mindful of the potential impacteffects these conditions could have on our clients, partners and prospects inas 2025we andenter beyond.2026.

Our gross profit across the business and related to product versus services sales are, and will continue to be, impacted by partner incentives, which can and do change significantly in the amounts made available and the related product or services sales being incentivized by the partner. Incentives from our largest partners are significant and changes in the incentive requirements, which occur regularly, could impact our results of operations to the extent we are unable to effectively shift our focus and efficiently respond to them. For example, recent changes in incentives for certain cloud-based solutions adversely impacted our results of operations in 2025. For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can and do change significantly in the amounts made available and the requirements year over year,” in Part I, Item 1A of this report.

Our results of operations include the results of Amdaris,Infocenter, SADAInspire11 and InfocenterSekuro from their respective acquisition dates.

The following discussion should be read in conjunction with the condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. We refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates.”

On a consolidated basis, for the three months ended MarchJune 31,30, 2026:

•Net sales of $2.1$2.4 billion increased 1%15% compared to the three months ended MarchJune 31,30, 2025. The increase was primarily due to increases in serviceshardware and hardwareservices net sales as well as continued net revenue recognition in instances where Insight is the agent, partially offset by a decrease in software net sales. Excluding the effects of fluctuating foreign currency exchange rates, net sales decreasedincreased 1%14% compared to the firstsecond quarter of 2025.

•Gross profit of $462.2$521.6 million increased 14%18% compared to the three months ended MarchJune 31,30, 2025, primarily driven by increases in cloud solution offerings and Insight CoreDelivered Services.services. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 11%17% compared to the firstsecond quarter of 2025.

•Compared to the three months ended MarchJune 31,30, 2025, gross margin expanded approximately 24060 basis points to 21.7% of net sales in the three months ended MarchJune 31,30, 2026. This expansion reflects higher margin contributed by services net sales, including both cloud solution offerings and Insight CoreDelivered Services,services, compared to the same period in the prior year.

•Earnings from operations increased 19%,51%, year over year, to $71.7$131.0 million in the firstsecond quarter of 2026 compared to $60.1$86.5 million in the firstsecond quarter of 2025. The net change reflects an increase in gross profit, partially offset by an increase in selling and administrative expenses. Excluding the effects of fluctuating foreign currency exchange rates, earnings from operations increased 17%50% year over year.

•Net earnings and diluted earnings per share were $30.0$77.6 million and $0.97,$2.57, respectively, for the firstsecond quarter of 2026. This compares to net earnings of $7.5$46.9 million and diluted earnings per share of $0.22$1.46 for the firstsecond quarter of 2025. The increase in net earnings was primarily due to an increase in earnings from operations in the firstsecond quarter of 2026 and the revaluation of warrant settlement liabilities recorded in the first quarter of 2025.2026. Diluted earnings per share increased more than 100%76% year over year, primarily as a result of an increase in net earnings and a decrease in dilutive shares outstanding in the firstsecond quarter of 2026. Excluding the effects of fluctuating foreign currency exchange rates, diluted earnings per share also increased more than 100%74% year over year.

In discussing financial results for the three and six months ended MarchJune 31,30, 2026 and 2025, the Company refers to certain financial measures that are adjusted from the financial results prepared in accordance with United States generally accepted accounting principles (“GAAP”). When referring to non-GAAP measures, the Company refers to them as “Adjusted.” See the "Use of Non-GAAP Financial Measures" section below for additional information and a reconciliation of such non-GAAP measures to the most directly comparable GAAP financial measures.

Details about segment results of operations can be found in Note 9 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this report.

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

We believe inflation contributed to sustained high interest rates on all of our variable rate borrowing facilities in the first quarterhalf of 2026 consistent with the prior year. Interest rates are expected to hold steady and continue to remain higher than historical rates throughout most of 2026. We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chain, demand for our products whether due to tariffs or otherwise and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity. Currently, our supply chain is impacted by the global memory chip shortage, which has resulted in lower overall supply and increased pricing and may result in further constrained overall supply and upward pressure on pricing. Additionally, international conflicts, including the war in Iran, may impact supply chain and increase inflation. We are mindful of the potential effects these conditions could have on our clients, partners and prospects in 2026 and beyond.

Our condensed consolidated financial statements have been prepared in accordance with GAAP. For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. The preparation of these condensed 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 estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.

The following table sets forth certain financial data as a percentage of net sales for the three and six months ended MarchJune 31,30, 2026 and 2025:

Net Sales. Net sales of $2.1$2.4 billion for the three months ended MarchJune 31,30, 2026 increased 1%,15%, year over year, compared to the three months ended MarchJune 31,30, 2025, primarily reflecting increases in all our EMEA and APAC operating segments,segments partiallywith offsetthe bymajority aof decreasethe inincrease from our North America segment. Net sales of $4.5 billion for the six months ended June 30, 2026 increased 8%, year over year, compared to the six months ended June 30, 2025, reflecting increases in each of our operating segment.segments with the largest increase in North America.

Our net sales by operating segment were as follows for the three and six months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

Our net sales by offering category for North America for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (dollars in thousands):

Net sales in North America decreasedincreased 1%,15%, or $17.8$254.4 million, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily driven by decreasesincreases in hardware and services net sales of 20% and 19%, respectively. The increase was partially offset by a decrease in software net sales of 28%. The decrease was partially offset by increases in services and hardware net sales of 12% and 6%,8%, year overto year, respectively.year. The net changes for the three months ended MarchJune 31,30, 2026 were the result of the following:

•The increase in hardware net sales was primarily duedriven toby higheran volumeincrease ofacross salesclient tosegments, led by growth from large enterprise and corporate clients, partiallyand offsetsupported by lowerhigher volumeaverage ofselling sales to commercial and public sector clients.prices.

Net sales in APACEMEA increased 20%,8%, or $12.2$56.6 million, for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APACEMEA increased 11%,3%, year over year. Net sales of hardwareservices and serviceshardware increased by 106%17% and 64%,and15%, respectively, year over year. These increases wereyear, partially offset by a decrease in software net sales of 28%,2%, year to year. The net changes for the threesix months ended MarchJune 31,30, 2026 were the result of the following:

•The increase in hardware net sales was primarily due to higher volume of sales to large enterprise and commercialcorporate clients.

•The decreaseincrease in softwareservices net sales was primarily drivendue byto athe continued migrationacquisition of on-premise software to cloud solutions, reported netSekuro in servicesNovember net sales.2025.

The percentage of net sales by category for North America, EMEA and APAC were as follows for the three and six months ended MarchJune 31,30, 2026 and 2025:

Gross Profit. Gross profit increased 14%,18%, or $55.7$79.3 million, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, with gross margin expanding approximately 24060 basis points to 21.7% for the three months ended MarchJune 31,30, 2026 compared to 19.3%21.1% for the three months ended MarchJune 31,30, 2025. Gross profit increased 16%, or $134.9 million, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, with gross margin expanding approximately 150 basis points to 21.7% for the six months ended June 30, 2026 compared to 20.2% for the six months ended June 30, 2025.

Our gross profit and gross profit as a percentage of net sales by operating segment were as follows for the three and six months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

North America's gross profit for the three months ended MarchJune 31,30, 2026 increased 11%,16%, or $33.9$56.0 million, compared to the three months ended MarchJune 31,30, 2025. As a percentage of net sales, gross margin expanded approximately 22020 basis points to 21.0%,20.5%, year over year. The year over year net expansion in gross margin was primarily attributable to the following:

•An increaseexpansion in services margin of 25087 basis pointspoints, partially offset by a contraction in product margin of 2064 basis points.

•The increase in services margin is primarily thereflects resultan ofincrease increasedin margin contribution from cloud solution offerings.offerings and Insight Core services, partially offset by a contraction in warranty and partner delivered services.

•The contraction in product margin is primarily thereflects resultchanges in hardware mix, including a higher proportion of lower-margin sales atcompared lower margins than into the prior year period for both hardware and software.period.

APAC'sNorth America's gross profit for the threesix months ended MarchJune 31,30, 2026 increased 46%,14%, or $6.9$89.9 million, year over year (increasing 35% when excluding the effects of fluctuating foreign currency exchange rates), compared to the threesix months ended MarchJune 31,30, 2025. As a percentage of net sales, gross margin expanded 530approximately 120 basis points to 30.4%,20.7% yearfor overthe year.six months ended June 30, 2026. The year over year net expansion in gross margin was primarily attributable to a net expansion in services margin of 735 basis points due to the acquisition of Sekuro, partially offset by a contraction in product margin of 203 basis points.following: