Ingram Micro’s Xvantage platform is increasingly acting as a “competitive moat”, its CEO claimed as it registered another double-digit quarterly sales uptick.
The world’s second-largest distributor saw net sales hike 13.7% year on year to $13.96bn in its first quarter ended 28 March, with the tally up 10% in constant currencies.
That compares with the 18.1% net revenue rise registered by arch-rival TD Synnex in its most-recent quarter, and the 11.5% net sales jump Ingram recorded in Q4.
Ingram’s Q1 sales uptick was led by a 14% FX-neutral advance in its Advanced Solutions business, which was bolstered by some big AI and GPU deals towards the end of the quarter. Cloud sales were up 25% on an FX-neutral basis.
Sales at its Client & Endpoint Solutions arm rose by “nearly” 8% on an FX-neutral basis.
“Xvantage is not a marketplace”
On the earnings call, CEO Paul Bay once again riffed on the role Xvantage is playing in Ingram’s “transformation” from a “traditional IT distributor into a platform company”.
Ingram’s Xvantage journey has now progressed through the first two phases – building the foundation and automating workflows/reducing friction – to scaling intelligence through capabilities like its Intelligent Digital Assistant (IDA), Bay said.
IDA is “well on its way” to generating a double-digit proportion of sales in 21 countries in which Xvantage has launched, CFO Mike Ravenna said.
“Xvantage is not a tool or a marketplace. It is the operating system for B2B,” Bay said on the call, a transcript of which can be found here.
Net gain on memory crunch
Bay claimed Xvantage is also helping its reseller partners assuage the current memory crunch by “better recommending substitute configuration, bundle product solutions, alternative vendor suppliers”.
UK partner leaders last week expressed fears that AI datacentre-fuelled memory shortages could linger until at least 2030.
Product shortages and rising prices had a double-edged impact on Ingram’s Q1 results, Ravenna acknowledged.
Although the distributor benefited from “some instances of pull forward of demand to get ahead of pricing”, in a few limited cases projects were “indefinitely deferred” because the kit was not available or “decisions are being made to alter project scope or delay spending”.
“Combined, we estimate the net positive impact of all of these factors on our year-over-year net sales comparison for Q1 to be approximately 2%-3%,” Ravenna said.
“Certainly, the situation in the Middle East is exacerbating this with shipping delays,” he added.
Hyve mindset
Noting the growing investor interest in TD Synnex’s Hyve arm, an analyst on the call asked whether Ingram’s AI infrastructure success signals plans to build a similar “ODM-like” business.
“To be ODM-like, that is not in our plans today,” Bay responded.
“What we’re doing is looking at our partners and where the technology opportunities are. A lot of it, if you look at from an AI infrastructure standpoint, and GPU chips, so it’s GPUs, it’s AI infrastructure product which touch server networking storage product sets.
“Many of these large ones are going for proof of concepts and/or are specific builds for very, very large enterprises. We’re able to help facilitate that.”
