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TD Synnex 8-K Report, Financial Results (Jun 25, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed June 25, 2024
Period End
June 25, 2024
Security
SNX
In the record · 2016–202610-K1110-Q338-K163

SNX filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 163 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Oct ’18Oct ’18
  2. Deal closed8-K · Dec ’20Dec ’20
  3. Leadership change8-K · Sep ’22Sep ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed June 25, 2024. Cited figures are marked; the original filing is the authoritative source.

TD SYNNEX Corporation (NYSE: SNX) reported fiscal second quarter 2024 results for the period ended May 31, 2024, in a press release furnished as Exhibit 99.1.

Revenue was $13.95 billiona, down 0.8% from $14.06 billion in the prior-year quarter, and within the company's outlook of $13.3 to $14.9 billion. The company attributed the decline to a greater share of revenue being presented on a net basis, which reduced revenue by approximately 4%. Non-GAAP gross billings rose 3.1% to $19.30 billion, at the upper end of the $18.4 to $19.6 billion outlook.

GAAP net income was $143.6 millionb, or $1.66 diluted EPS, versus $1.41 a year earlier, and non-GAAP diluted EPS was $2.73 compared with $2.43. CEO Rich Hume said the IT spending environment is improving, with a return to year-over-year gross billings growth driven by Endpoint and Advanced Solutions and mid-teens growth in Strategic Technologies. Cash used in operations was $114.7 million in the quarter, and free cash flow was negative $152.5 million, which the release attributes to strong growth at Hyve, part of Strategic Technologies, as new business ramped.

The company returned $288 millionc to shareholders in the quarter, including $254 million of share repurchases and $34 million of dividends, and declared a quarterly dividend of $0.40 per common share, payable July 26, 2024. For the fiscal third quarter ending August 31, 2024, TD SYNNEX guided to revenue of $13.3 to $14.9 billion, non-GAAP gross billings of $18.9 to $20.1 billion, and non-GAAP diluted EPS of $2.55 to $3.05. Regionally, Americas revenue fell 1.6% while non-GAAP gross billings rose 3.5%, Europe revenue fell 0.8% with billings up 1.5%, and Asia-Pacific and Japan revenue rose 6.9% with billings up 8.7%.

02—Key points

Key Highlights

  1. Revenue of $13.95 billion fell 0.8% year over year but landed within the company's $13.3 to $14.9 billion outlook; a greater share of revenue presented on a net basis reduced revenue by approximately 4%.
  2. Non-GAAP gross billings grew 3.1% to $19.30 billion, at the upper end of the $18.4 to $19.6 billion outlook, and management said gross billings returned to year-over-year growth.
  3. GAAP diluted EPS rose to $1.66 from $1.41; non-GAAP diluted EPS rose to $2.73 from $2.43.
  4. Free cash flow was negative $152.5 million, which the company attributed to strong growth at Hyve as new business ramped.
  5. Shareholder returns totaled $288 million in the quarter ($254 million of buybacks and $34 million of dividends), and the quarterly dividend was raised to $0.40 per share, up 14% from the prior fiscal second quarter.
  6. Fiscal Q3 2024 outlook calls for revenue of $13.3 to $14.9 billion and non-GAAP diluted EPS of $2.55 to $3.05.
  7. Asia-Pacific and Japan revenue rose 6.9% and non-GAAP gross billings rose 8.7%, while Europe and Americas revenue declined modestly.

03—Questions

Frequently Asked Questions

  1. How did TD SYNNEX perform against its own outlook this quarter?

    Revenue of $13.9 billion fell within the $13.3 to $14.9 billion outlook. Non-GAAP gross billings of $19.3 billion were at the upper end of the $18.4 to $19.6 billion range. Net income of $144 million and non-GAAP net income of $237 million were within the outlook, as was non-GAAP diluted EPS of $2.73.

  2. Why did revenue decline while gross billings increased?

    The filing states that a greater percentage of revenue was presented on a net basis, which reduced revenue by approximately 4% compared with the prior fiscal second quarter. On a constant currency basis, revenue decreased 0.5%. Non-GAAP gross billings, which include costs netted against revenue, rose 3.1%.

  3. Why was free cash flow negative this quarter?

    The company reported cash used in operations of $115 million and free cash flow of negative $153 million. Management attributed this to strong growth at Hyve, part of Strategic Technologies, as new business ramped.

  4. What are the company's capital return plans?

    TD SYNNEX returned $288 million to shareholders in the quarter through $254 million of share repurchases and $34 million of dividends. The Board declared a quarterly cash dividend of $0.40 per common share, payable July 26, 2024 to holders of record on July 12, 2024.

  5. What does the company expect for the fiscal third quarter?

    For the quarter ending August 31, 2024, TD SYNNEX expects revenue of $13.3 to $14.9 billion, non-GAAP gross billings of $18.9 to $20.1 billion, net income of $152 to $194 million, and diluted EPS of $1.77 to $2.27 (non-GAAP diluted EPS of $2.55 to $3.05). It assumes an estimated 85.0 million diluted weighted average shares outstanding.

04—Continue

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