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TD SYNNEX CORP SNX reported non-GAAP earnings of $2.80 per share for the first-quarter fiscal 2025, which missed the Zacks Consensus Estimate by 2.44%. The bottom line declined 6.4% year over year due to rising expenses.
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SNX’s revenues increased 4% year over year to $14.53 billion but missed the consensus mark by 1.78%.
On a constant-currency (cc) basis, revenues represent 6% year-over-year growth, driven by advancements in the Endpoint Solutions and Advanced Solutions portfolios.
TD SYNNEX Corporation Price, Consensus and EPS Surprise
TD SYNNEX Corporation price-consensus-eps-surprise-chart | TD SYNNEX Corporation Quote
After the results were announced, TD SYNNEX's shares dropped sharply 14.28% on March 27. This decline can be attributed to disappointing results and guidance, as well as rising expenses, which heightened investor concerns and led to a sharp drop in the stock price.
TD SYNNEX’s Q1 Details
Categorically, revenues from Endpoint Solutions reached $7.1 billion, reflecting 5% year-over-year growth. Revenues from Advanced Solutions reached $7.4 billion, mirroring 3% year-over-year growth.
The non-GAAP gross profit decreased 0.8% year over year to $998 million, whereas the gross margin contracted 33 basis points (bps) to 6.87% due to higher margins in the prior year in strategic technologies and product mix.
Adjusted SG&A expenses increased to $599.2 million from the year-ago quarter’s $581.2 million. As a percentage of revenues, SG&A expenses remain flat on a year-over-year basis.
The fiscal first-quarter non-GAAP operating income was down 6.1% to $398.8 million. The non-GAAP operating margin contracted 30 bps on a year-over-year basis to 2.7%.
Non-GAAP gross billings were $20.7 billion in the fiscal first quarter, up 7.5% on a year-over-year basis. On a cc basis, non-GAAP gross billings increased 9.5% from the prior-year quarter.
TD SYNNEX’s Balance Sheet & Cash Flow Details
As of Feb. 28, 2025, TD SYNNEX’s cash and cash equivalents were $541.9 million compared with $1.06 billion as of Nov. 30, 2024.
The long-term debt was $3.74 billion for the reported quarter, unchanged from the prior quarter.
The company used $748 million of cash for operational activities in the fiscal first quarter compared with a $562-million cash inflow in the previous quarter. SNX reported a negative free cash flow of $790 million in the fiscal first quarter compared with a positive free cash flow of $513 million in the previous quarter.
In the first quarter of fiscal 2025, SNX returned $138 million to stockholders with $101 million of share repurchases and $37 million of dividend payments.
For the first quarter of fiscal 2025, TD SYNNEX announced a 10% increase in its quarterly cash dividend, raising it to 44 cents per share. This move indicates the company's commitment to returning value to shareholders amid current financial challenges.