Okay, thanks everybody for joining. My name is Adam Tindle, Technology Analyst here at Raymond James. Very happy to have the team from Insight Enterprises here. Glynis Bryan, CFO, is going to run through some slides and presentations. For those of you not as familiar, Insight has been around for a very long time, but there has been a lot of evolution at the company. And if you're checking your stock charts, I think some of that has been reflected as well. It's been a great story, a lot of success that you've had, and a lot of interesting things on the come. So again, in terms of format, just kind of traditional slides, but I think we'd all love to keep it as interactive as possible. So if you do have a question, please feel free to raise your hand.
Yeah.
Glynis?
Perfect. Thank you, Adam. Appreciate it. I don't know. Okay. Thank you. Can everybody hear me? Is my mic on? Yeah? Okay. Awesome. I'm going to not read the disclosure statements, but please take them as having been read. I'm going to start out by talking to you about why we are such a great investment for you today. I'll walk you through the backup that supports all of this. In October of 2022, we had an Investor Day, and we talked about our ambition to become the leading solutions integrator. That implies a combination of hardware, software, and services to create solutions that actually drive business outcomes for our clients. We shared that with our investors in October, and we also laid out 2027 goals with regard to attaining that. I would say that we have been making steady progress towards achieving those goals.
When we laid out those goals, those goals were organic. But as you will see as we get through there, acquisitions have the ability to accelerate that for us. So we're global. We have the ability today to actually handle our clients' total and complete cloud and digital stack across the globe. That's not something that everybody can say. And I know that for some of you, I have another slide that I think is pretty cute. I'm going to wait until I get there to talk about it. But in general, we are not a solutions integrator, systems integrator. We're not a reseller, and we're not. We're not a distributor, just to be really clear. We actually will generate above-market growth. We have been, and we will continue to generate above-market growth. Let's be clear.
We measure that on GP, not on revenue, partly because we are a significant cloud provider and cloud is netted. By definition, our revenue is muted in terms of revenue growth. We actually encourage our investors to look at it on a total GP basis because that is more indicative of the growth dynamics of the business. One of our good competitors has started using that same moniker with regard to looking at it. It's great to be copied. It's a compliment. We're also leveraging internally what we do for our clients in terms of more automation of our infrastructure, etc. We generate a lot of cash. When hardware is not growing at 30%+, this business generates a lot of cash, which we have used to pay down debt, to invest organically, to buy back stock, and to do M&A.
So we still have $200 million remaining under our share repurchase authorization as of December. We have a good balance sheet, and we're in a good, strong position to be able to do M&A. So now, isn't this a great slide? It's an awesome slide. So there are four pillars to our strategy. First and foremost, we actually have to delight our customers every day. If we don't delight our customers every day, they don't come back, and we don't get that repeat business that we need in order to do more for our clients as we actually are in their workspace. So our typical strategy is that we have a potentially we do an assessment and we put a roadmap together for a client.
Rather than having them commit to the entire roadmap, we chunk that roadmap into smaller pieces that they can then execute on and get some value from, see the value, then we actually go to the next piece. We found that that's a good strategy for us in terms of our clients. How do we deliver the differentiation that we talk about? There are not very many people that can do hardware, software, and services at the same level at which we execute. We spent some time doing M&A. There's a chart in here that you will see. Over the last several years with regard to creating a digital universe, a digital technology set of digital capabilities and the technical talent to support those digital capabilities that we think puts us stands us ahead of the pack, specifically when it's combined with the technology capability that we have.
So if you want to look at something in your data center, most of our clients today live in a hybrid world. They will have on-prem data center. They will have data center that's in the cloud. Likely they will have two clouds. It's a multi-cloud world that is out there. So at a minimum, they would have two clouds. And we're very well-positioned to be able to execute on that. I'll talk a little bit more about it. One of the things we're particularly proud of is the culture that we have at Insight. So before you can actually take over the world, you actually have to convince your employees that you're capable of taking over the world. And your employees have to be engaged and a part of that journey as you move forward.
We think that based on the awards that we've received as well as the feedback that we get from our teammates, more importantly, actually than the awards, is the feedback from teammates. We now have a very engaged workforce. I think he's not raising his hand. I think he's doing something with his computer. No question from you? Okay. We believe in championing our culture and maintaining that culture, albeit we're now in this remote hybrid world in terms of working from home and in the office. All of that is around driving profitable growth for the business so that as we go forward, we will continue to expand our gross margins, our EBITDA margins, and clearly ultimately our EPS. This is my great slide about not being a systems integrator. We are not an Accenture.
We can do stuff that Accenture does, but Accenture doesn't have the technology background that we have with regard to products that are required in our clients' infrastructure, and that is a part of our value proposition as we move forward. We have moved way past being a reseller, and we were never a distributor. Although we still get that question. I'm going to move on. So how do we do this? So when you look at Insight, if you look back five years ago, you would have seen that products on the right-hand side. On the right-hand side, when you look at products, products would have been greater than 50% of our overall GP.
Over the last several years, particularly through the pandemic, we've actually made a change in the underlying infrastructure of our business, and now services, which is a combination of Insight delivered services, cloud, as well as agent hardware warranty, software assurance, etc. Those are things that are classified as services from a U.S. GAAP perspective. All of those, the combination is now greater than 54%. Much of the growth there has come from InsightCore Services as well as the cloud and all aspects of the cloud. When you look at us by revenue, just in terms of revenue offerings, you'll see the difference. Services, 17% of our revenue. That equates to 54% of our GP. Software is 28% and hardware is 55%. That is what is subsumed in the product GP of 46% that you see there. This is the revenue side, to be clear.
Revenue by geo, North America by far, the behemoth here at 80% with EMEA at 17% and APAC at 3%. We recently bought a company in Europe that gives Europe the capability to actually have the same digital capability and technology that technical standards that we have here in the U.S. Before U.S., the Europe EMEA was primarily hardware, software services in the U.K., and then in continental Europe, it was software and software-related services, but they really didn't have the digital capability to wrap around the Azure product and GCP as we move forward. So did solve that problem last year in August, and we'll look to do a couple more small deals like that as we move forward. Revenue by customer, we're a large enterprise and corporate shop. Think about that as being large enterprise, greater than 10,000 seats. Think about it that way.
Corporate being kind of 2,500 to that 10,000 mark, potentially. And then what we call commercial is like 250-2,500, 1,000, 2,000 seats. And then we have a small public sector, which is again FED, SLED, and a little bit, very little of education in there. Going to move on? No questions? Oh, sorry.
I'll ask one. When we look at the revenue by customer, obviously, predominantly enterprise and corporate. On your previous cute slide, you talked about not being a systems integrator, not being an Accenture, but it looks like the customer base likely overlaps quite a bit with the traditional GSI who would serve a large enterprise. So I guess the question would be, are you most often competing or partnering with the Accentures of the world? And if and when you do compete with them, how do you win or what services do you deliver when you partner with them?
Okay. We don't typically end up competing with them because they play at the very high, high end of the market. So I would categorize great, great company, but they play at the kind of Fortune 100 and above, maybe 150 or 200 and above. They're looking for clients where they can have annual spend with them of about $100+ million a year is really where their sweet spot is. Our sweet spot is in the mid-corporate to kind of lower end of large enterprise. We're not at the very high end of large enterprise. So as an example, we don't provide cloud and digital services to like a Wells Fargo. But if you were a I don't know, a Regions Bank or some other regional, regional bank, smaller bank, yes, you would come to an Insight for those services.
The Accentures of the world, you're too small for them. They don't actually have the resources to go that far down, or they have chosen not to go down to that level within the client space. We actually do really well in that segment because number one, they can't actually hire the technical talent that they need because they just don't have other people that look like them. We went through that earlier when we were trying to build out our digital capability before we determined we actually had to buy a nucleus and then build from there. Those companies face exactly the same issues, and we do really well in that space. It's smaller but large enough with an IT spend that's large enough that you can get repeat business. You can do a project for them.
You could give them a roadmap and complete that roadmap for them. At the end of that roadmap, we could manage their infrastructure for them as a part of that. But even if we don't get to managing the infrastructure for them, we have multiple projects that we can do along the way. And by the time we're getting to the end of a project, a new one is starting up. That's because we've delivered the value that we think is important. You're welcome. Thank you. Just a little bit of a geo. We used to say we're in 19 countries, and now we say we're in 26 countries. We don't physically sell into 26 countries, but we have 5 countries that are kind of leveraging our back office. So India would be one.
We have a couple of centers in Eastern Europe that came with the Amdaris acquisition that we're also leveraging. So overall, we're in 26 countries, not from a sales perspective, but from a combination of sales and back office perspectives. We have over 6,000 highly skilled technical teammates that produce the great results that we have. We have 100 patents pending. Those patents are not something that we sell to our clients, but those patents help support the solutions, the speed at which we can deliver the solutions, and the agility, which how we interact with the clients in terms of pulling data out of their systems that we can analyze to figure out what is the most effective solution for us to propose going forward.
And many of these tools are developed by our technical guys in terms of as they're working with clients, ways that they have determined they can more quickly get to an answer for a client in a more timely manner. And you may think that that goes counter to a services approach, but that is part of what makes Insight different. We're looking for best value for the client, and sometimes that's doing something more quickly as opposed to elongating it to earn more money, but earning the right then to do more for that client as we move forward. We've done acquisitions over several years. I'm not going to take you back to the dawn of time. I'm actually going to focus on the last several years kind of under the solutions integrator moniker at the very end.
We did an acquisition in 2022, Hanu in India, that really was all around getting us an Indian footprint with regard to how we could grow a low-cost, highly technical talent base in India so that we could actually be more competitive with a lot of the Indian SIs who are operating here in the U.S. doing rollouts. We found that we were doing proof of concept for clients, but we were losing out on the rollout because we were more expensive because much of our labor was U.S.-based and wasn't competitive ultimately with the SI. Sometimes they did come back to us after not getting quite the response they wanted, but in general, we prefer to get them, have them just stay with us because we're cost-effective and competitive with regard to other rates that are out there.
I told you a little bit about Amdaris in the U.K., getting them the capability in EMEA that they need in order to be able to better leverage the overall Microsoft stack with our clients. And SADA, we bought here in December last year. It's a GCP partner. It is the largest independent GCP partner. It's a six-time America slash global GCP winner with Google. We acquired them primarily because, one, we are a heavy Microsoft shop. We had a small GCP practice. We had a slightly larger AWS practice. But if we wanted to be truly multi-cloud, we needed that capability. This asset was on the marketplace, and it was a good asset for us to acquire in terms of Google is they don't like when I say this, but they're the end cloud, right?
You have Microsoft in your infrastructure, and then you have Google, the GCP brand that actually comes through and they're great at data and analytics. So when you put those two together, you can really create a better scale for your client without kind of cannibalizing either side of the equation. We're a big Microsoft shop. We're now a big Google shop. We need to make sure that we don't cannibalize each other. And actually, we found a good mousetrap for that. Now, this is just an overview of how we think about the specific capabilities that we're focused on in terms of what we're driving going forward. Can I just say that this is the largest audience I've ever had at this conference? Thank you. Just a little side.
So we have three types of services that we provide: consulting, top of the pyramid for us, managed, and ultimately professional life cycle services. Professional life cycle services wrap around pretty much the product side of the business in terms of hardware deployments, whether it's devices or infrastructure in the data center. And then we usually do consulting projects across a variety of problems, I guess, potentially that a client has, trying to determine what a possible business outcome would be and how do we get them to that business outcome. So on the right-hand side, the left-hand side for me, you see a couple of the key areas: Modern Workplace, Modern Apps, Modern Infrastructure. Modern Workplace is kind of collaboration tools and technologies that you use within the office or in this remote hybrid environment that we all work in now, even better and more required there.
Modern Apps are applications that our team develops that you can actually leverage within your workspace in terms of what it is you're trying to enhance or improve on a go forward basis. Modern Infrastructure is really looking at the 80% of data that is actually still on-prem and helping clients determine how should they address that, what should they move off-prem, what should they move to the cloud, which cloud should they move it to? Do they need to be in a multi-cloud solution? Should they remain hybrid? Most of the clients in our space, that corporate enterprise space, have data centers and they have individuals who run and operate those data centers. We may consolidate data centers from 10 to 1 or 2, but they're not typically eliminating all of their data centers and moving everything to the cloud.
They're going to keep the data center, and we're, that's a good thing because we actually sell them hardware associated with what's in the data center, as well as the consulting project about how it is they should go about migrating it, giving them that roadmap to migrate it, and then helping them with that migration as they move forward and then potentially managing it for them on the back end of all of that. Intelligent Edge is going to become. It's actually the fastest growing area today in IT, but very, very small. It's going to become more important, I think, as Generative AI takes off because it requires a lot of compute power.
It requires a lot of compute power in terms of how it is you approach it, and you can make a decision that you need it on-prem, but at the edge where the actual compute is occurring, or you may determine that it's not so critical about latencies and so critical, and you could still have it at the edge, but in the cloud. And we can do both. That makes us, you know, puts us in a pretty good spot. Data and AI, we've spent a lot of time on. I think it's part of our core DNA since 2016, I think, 2015, the first company we acquired that was data-oriented. And we bought companies to build that capability because we couldn't hire in the people. Now we're actually a preferred employer. People want to work at Insight because we work on sexy projects. They think they're cool.
I would like to be more not quite so bespoke each time, a little bit more standardization, but at the end of the day, we have a reputation for working on very cool projects that attract good talent to the company and we figured out a different way to finesse making them repeatable and scalable. Cyber is embedded in everything we do. It's here separate, but the reality is it is embedded in everything that we do. It's not a separate practice per se. Going to move on. Maybe the best way to illustrate what it is that we do is by giving you a little bit of a client example. This is a large global consumer products company and they actually had a cyber attack that caused a breach. They had offshore and onshore resources and when this breach occurred, everything failed, everything collapsed.
The onshore resources were not available to actually help them. They were a client, not in this space. We did not have anything to do with the attack that occurred or anything, but we are helping them with regard to solving it, how to actually solve this problem. It's already solved because these things have to be solved pretty instantaneously because every day that your system is down is dollars that you're actually not generating. So this company was motivated and worked with our team in terms of determining where the breach occurred, not just Insight. There are many other parties that get involved when a breach occurs in a company.
Many other parties involved in that breach in terms of remediating that breach, in terms of fixing that breach, in terms of giving them some advice with regard to how to structure their environment on a go forward basis so that the next time a breach could occur, it wouldn't be quite as impactful internally and externally as it was this last time around. We gave them that roadmap.
We're working with them now in terms of executing against that roadmap, but it's an example of how being in a client environment, not that they necessarily reached out to us, but it was public so you could see that something had occurred and then you can actually have the opportunities to go in and say, hey, we can help you through this, and the client actually acknowledging that we're a great help ultimately and work and us continuing to work with them with regard to that kind of stuff. I guess most of you would say, I never knew you did anything about cyber. Most of you are thinking that, right? You're wrong. Quickly on 2023 results. I'm going to address the elephant in the room. Yes, revenue did decline 12%. It's $1.3 billion. All of that was related to hardware.
What I really want you to focus on, though, is that we grew services GP. We grew cloud GP 26%. We expanded gross margins by 250 basis points to 18.2%, and SG&A as a percentage of revenue declined by 100 basis points. So I would say that total gross margins on a revenue decline of 12% expanded, so gross profit expanded by 2%, and our EPS went up by 6%, $9.69. $9.69, sorry, accustomed to the points and millions. I think it's a good result. We don't consider it a great result, but we think it's a good result and demonstrates that we have the capability to flex and manage our business even in what is probably the most severe hardware downturn that we have seen in my time, and my time is a lot longer than yours. Some records that we got. Gross margin of 18.2%.
That is a record for us. Cloud gross profit of $429 million, up 26%. That is a record for us. Core Insight gross profit of $273 million. That is a record for us. Adjusted diluted earnings per share of $9.69, also a record for us, and operating cash flow at $620 million, also a record for us. Now, I will say that the normalized operating cash flow is probably more in the $300 million-$400 million range. I say that because in 2023, we benefited from the decline in hardware. Hardware is a working capital drain for us when it's kind of operating in the 20%+ growth range. When it's in the 7%-10% growth, it's normal. We can capture that and manage that within our infrastructure. So on a normalized basis, we think we're in the $300 million-$400 million cash flow range. No questions?
In 2027, these are the results we shared in terms of what we expected to accomplish in 2027 when we went to our investors in 2022. 2022 is the base year for this. All the metrics that we showed for 2027 are organic. They did not include any M&A, but we said that we would likely do M&A and that would accelerate attainment of those objectives. We also said that they weren't all going to be linear up and to the right every single year. They would be some puts and takes as we navigated through it, but in general, we expected we'd get to the five-year CAGR for cloud of 16%-20%. We're doing better than that, as you can see. Core Services GP growth of 16%-20% also. We have to make up some ground there, and we will.
Adjusted EBITDA margin of 6.5%-7%. Now, Adam will remember that five years ago, our EBITDA margin started with a 3%. So we actually have made significant improvement. And many are saying, yes, but you're still below CDW. Yes. Huh? And our valuation is below CDW, and that is the advantage that we have. Because we have room to grow, expand, increase valuations, and increase our gross profit, our gross margin, and our EPS growth rate. We actually believe that that is achievable for us, and it's not even far in the distant future achievable. It is something that we have worked towards, that we are showing progress towards, and even Adam, who has been a skeptic, will acknowledge that. Just saying, just saying. So our full year 2024 outlook, this is what we guided in February.
We said gross profit growth was going to be in the mid to high-teens. Now, we did do an acquisition in December of 2024, and we did Amdaris earlier in August of, sorry, December of 2023 and August of 2023. Amdaris is very small. SADA is a little bit more significant, and it specifically is going to be impactful and helpful to getting to that high mid-teens growth rate and also getting to the 19% total gross margin. And like last in 2022, we were 15.7, I think, so pretty significant increase in terms of how we're driving to that number. Diluted EPS growth, EPS of $10.50-$10.80. At the midpoint, that's about a 10% growth rate next year. Interest expense essentially flat and our effective tax rate at 26%.
Capital expenditures, as we complete the build-out of a new client-facing center, integration center in Texas, that's going to be about 40, that's going to be about $50 million-$55 million. So a good place to be all around. This is our capital allocation philosophy. I think I'm coming to the end of my time. Yep. One minute. Organic growth, first calling capital. Second calling capital for us in this environment is M&A in terms of the metrics that we have. We will buy back stock in terms of increasing returns to shareholders to the extent we have free cash flow. And we believe that we are in a period with debt where we will be able to pay down our debt on a consistent basis.
So as we do an acquisition, we envision we'll take on debt, but we'll pay that debt down pretty quickly as we move forward. Thank you very much for your interest.
All right. We're going to continue the conversation downstairs in a breakout session, but that was a great overview. Thank you, Glynis.
Thank you, Adam.