In This Article:
-
Gross Billings: $20.7 billion, up 7.5% year-over-year, 9.5% in constant currency.
-
Net Revenue: $14.5 billion, up 4% year-over-year.
-
Gross Profit: $1 billion or 4.82% of gross billings.
-
Non-GAAP SG&A Expense: $599 million or 2.89% of gross billings.
-
Non-GAAP Operating Income: $399 million or 1.92% of gross billings.
-
Non-GAAP Net Income: $237 million.
-
Non-GAAP Diluted Earnings Per Share: $2.80.
-
Free Cash Flow Usage: Approximately $800 million.
-
Cash and Cash Equivalents: $542 million.
-
Debt: $4.3 billion.
-
Gross Leverage Ratio: 2.5 times.
-
Net Leverage Ratio: 2.2 times.
-
Dividend: $0.44 per common share.
Release Date: March 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
TD Synnex Corp (NYSE:SNX) reported a strong start to fiscal year 2025 with gross billings growing by 7.5% year-over-year and 9.5% in constant currency.
-
Advanced Solutions and Endpoint Solutions both showed significant growth, with Advanced Solutions growing by 7% and Endpoint Solutions by 8% year-over-year.
-
The company expanded its reach to 30,000 active partners and 500,000 end users transacting through its cloud marketplace.
-
TD Synnex Corp (NYSE:SNX) was recognized as a distribution partner of the year by multiple industry leaders, including AWS, Palo Alto Networks, Insight Enterprises, and NVIDIA.
-
The company maintained a strong cash position with $542 million in cash and cash equivalents and continued to return value to shareholders through $138 million in share repurchases and dividends in Q1.
Negative Points
-
Hyve's performance was below expectations due to a component shipment delay and demand shortfalls, which may persist for a few quarters.
-
Gross profit margin declined by 40 basis points year-over-year, primarily due to challenges in the Hyve business.
-
Free cash flow usage was approximately $800 million, driven by higher working capital needs, particularly in Hyve.
-
Interest expenses were higher than expected at $88 million, due to increased working capital requirements.
-
The company faces challenges in the peripherals market, including a decline in printing and the loss of a large, unprofitable business in North America.
Q & A Highlights
Q: Can you provide more details on the Hyve component shortages and demand outlook? A: Patrick Zammit, CEO, explained that Hyve experienced a temporary delay in component shipments, which impacted Q1 results. The demand shortfall is expected to be temporary, with shipments anticipated to resume in Q2. Marshall Witt, CFO, added that a specific customer had a temporary demand pause, but overall demand is expected to recover in the coming quarters.