TD Synnex Corp

TD SYNNEX reported non-GAAP gross billings of $28.9 billion in Q2, up 33% year over year, with non-GAAP operating income of $615 million, up 49%, and non-GAAP EPS of $4.85, up 62%. GAAP operating income was $519 million, up 58%, and GAAP EPS was $4.15, up 88%. Distribution gross billings were $23.4 billion, up 22%, with non-GAAP operating margin of 1.9% (+19 bps); Hyve gross billings were $5.5 billion, up 117%, with non-GAAP operating margin of 3.3% (-50 bps). For Q3, the company guided to gross billings of about $27.7 billion +/- $500 million, revenue of about $18.6 billion +/- $400 million, non-GAAP net income of about $361 million +/- $20 million, and non-GAAP EPS of about $4.50 +/- $0.25. Management said the Q3 outlook does not assume material contribution from newly onboarded Hyve customers, which are expected to ramp in late fiscal 2026 or early fiscal 2027.

Patrick Zammit emphasized that the quarter reflected broad-based execution across distribution and Hyve, with AI becoming a larger part of the mix. He framed TD SYNNEX as a global, hard-to-replicate platform that helps customers navigate pricing pressure, supply constraints, and faster technology transitions. He repeatedly stressed that demand remains healthy, especially in infrastructure, networking, storage, and AI-related builds, while noting PCs could be more elastic if ASPs keep rising.

David Jordan highlighted record financial performance, including $28.9 billion in gross billings, $615 million in non-GAAP operating income, and $4.85 in non-GAAP EPS. He said distribution margin benefited by roughly 5 to 10 basis points from strategic inventory purchases, while Hyve’s 3.3% margin was down 50 basis points mainly from mix as manufacturing represented about two-thirds of the segment. He also noted free cash flow consumption of about $330 million, net working capital of $4.9 billion, cash and equivalents of $1.1 billion, net leverage of 1.6x, and Q2 capital returns of $112 million in repurchases plus $39 million in dividends.

Analysts focused on whether higher component costs and supply constraints were causing demand destruction; management said it had not seen that, and noted price increases are still working through the channel. Questions also centered on Hyve’s capacity buildout, and management said the more than 1 million square feet of expansion should start contributing in Q4 fiscal 2026 and more likely Q1 fiscal 2027, with roughly $100 million of Hyve fixed-asset investment this year. Analysts also pressed on strategic inventory, and management said the margin benefit is real but small, likely one-time in nature and fading over time.