Chief Executive Paul Bay is leading tech distribution giant Ingram Micro into a digital future designed to shed time-consuming tasks and boost sales and margins.
The Irvine-based company is betting that its AI-powered Xvantage platform will improve the industry’s traditional sales model. The platform is designed to streamline the process of buying, selling and managing technology products and services for the electronics and technology distributor, its customers and partners, automating key functions such as quote creation, order management and real-time tracking.
“It is the future of us becoming a platform, the journey to becoming a platform company,” Bay told the Business Journal on June 19.
The platform manages cloud, hardware, software and services.
Ingram Micro recently returned to Wall Street, which has remained doubtful, sending the shares down about 13% since the offering last October.
The firm is in an industry — distribution — that has gone out of favor as tech companies use the cloud to transmit new products to their customers. It traditionally has had profit margins around 2%, far lower than tech giants like Google-parent Alphabet, Apple and Meta where profit margins often top 30%.
While Ingram Micro is by far Orange County’s largest company by revenue – $48 billion in 2024 – it only has a $5 billion market cap (NYSE: INGM). It is the second largest tech company headquartered in Orange County by market cap, after the $12 billion at chip colossus Skyworks Solutions Inc., which recorded $4.2 billion in sales in fiscal 2024.
Investors and analysts are watching to see if Xvantage will be the game changer for Ingram Micro.
“They are in a strong strategic position going forward if they can continue to effectively overcome their weaknesses (persistent friction in channel operations) and make investments and launch initiatives like Xvantage, Cloud Conduit and improve their partnerships,” industry analyst Rob Enderle told the Business Journal.
“The cloud distribution ecosystem is quite crowded, and Ingram will face fierce competition.”
Revenue Mojo Back
For years, Ingram Micro held the position of Orange County’s largest company by revenue, even though it slipped from $54.5 billion in 2021.
This year, the company is expected to grow 4.4% to $50.1 billion, according to the average estimate of 15 analysts who follow the firm.
Bay, who succeeded longtime chief executive Alain Monié in 2022, said he’s not worried about the revenue slip, saying changes in accounting rules have caused some of the lower numbers.
“I think we have our mojo as it relates to revenue,” he said adding he sees profitability going up.
In fact, first-quarter revenue rose 8.3% to $12.3 billion. For the current quarter, the company is targeting somewhere between $11.8 billion and $12.2 billion, implying a 4.3% growth at the midpoint from a year ago. First quarter net income was $69.2 million.
The public listing is the second for Ingram Micro, which traces its beginnings to Santa Ana in 1979 (see story this page).
Ingram Micro is in an industry with two other major publicly listed competitors: Fremont-based TD Synnex, which has an $11.6 billion market cap (NYSE: SNX) and Arrow Electronics Inc., which has a $6.6 billion market cap (NYSE: ARW).
Automating Repetitive Tasks
Ingram Micro has invested over $600 million in its cloud platform.
Xvantage automates deals, analyzes data and makes recommendations that both simplify and accelerate buying decisions. It links technology experts and vendors with the company’s employees across six continents to boost business growth.
Xvantage takes the complexity out of the sales transactions, according to Sanjib Sahoo, Ingram Micro’s global platform group president. Sahoo says the company has about 1,500 vendors and more than 161,000 customers or resellers.
“It saves them time,” Sahoo told the Business Journal in the June 19 joint interview with Bay.
“Ultimately we are connecting the demand and the supply.”
Bay said the system frees sales teams to be more proactive in aiding customers and helps automate repetitive tasks like billing and order tracking.
Bay on June 17 held a key webinar to help explain the advantages of Xvantage, which was introduced in 2022.
“We’ve been public since Oct. 24 of last year, now is the right time after a couple of quarters to be able to show it more to the investment community,” said Bay.
While the transformation is under way Ingram still bills itself as a “global technology distributor” and Bay says the old selling and buying model is still “critical.”
“We’re taking stuff that used to take in our industry hours and days and sometimes months and we’re turning into minutes and seconds in many instances,” according to Bay.
“Now you can come to one area on Xvantage and be able to buy hardware, software, services and cloud.”
Maggie Nolan, a research analyst at William Blair, gave an upbeat view of Xvantage saying it “brings significant operating efficiencies, and has enabled the company to eliminate tedious tasks like order status calls, resulting in over $200 million in operating expense savings over the last nine quarters.”
“Cloud, though still small at only 1% of revenue, is growing at a low-double-digit clip, and accounts for 15% of Ingram’s gross profit dollars today. Over time, we expect higher margin cloud and advanced solutions sales to become a bigger piece of the pie,” she said in a note to investors on June 5.
The Global Advantage
Ingram Micro’s reach is enormous — about 200 countries served with more than 23,500 workers, reaching more than 90% of the world’s population. About 20 countries are on the Xvantage platform.
Analyst Enderle said Ingram’s vast global footprint is an advantage when working with multinational vendors and clients.
He said the Xvantage platform has earned “substantial recognition” from the industry.
“If Ingram uses it effectively it could eliminate potential lapses in coverage which would otherwise damage their reputation,” he said.
“I’d bet their upside is stronger than their downside and predict growth; however, the current tech environment is anything but stable and every tech company is at risk of uncertainty.”
Irvine Workforce Totals More than 1,000
Ingram Micro traces its beginnings to Santa Ana in 1979. Ingram previously went public in 1996 and was taken private in 2016 by China’s HNA Group for $6 billion.
After years of rumors and varying reports, Tom Gores’ Platinum Equity bought Ingram Micro in 2021 in a $7.2 billion deal. Ingram Micro went public in October.
Ingram Micro has often been ranked among the world’s largest technology distributors by revenue.
The company has more than 1,000 employees in Irvine where its headquarters totals 179,000 square feet of space.
“This is our world headquarters,” Paul Bay, chief executive of Ingram Micro, told the Business Journal.
“We’re very happy with being in Orange County and being one of the largest companies in Orange County.”
—Kevin Costelloe
Ingram Micro Taking Trump Tariffs in Stride
American businesses are bracing for the impact of President Donald Trump’s tariffs on foreign goods, but Ingram CEO Paul Bay hasn’t seen a major impact on the Irvine-based company so far.
He noted that in the first quarter there wasn’t any “pull-forward” of buyers seeking to get goods before the duties go into effect.
Plus, Bay added that “we pass through tariffs.
“If my computer that’s sitting in front of me costs a thousand dollars and there’s a 10 dollar tariff, now our customers are paying a thousand and 10 dollars,” he says.