TD Synnex Corp

TD SYNNEX reported third-quarter non-GAAP gross billings of $31.8 billion, up 40% year over year, or 41% in constant currency, and above the high end of guidance. Non-GAAP operating income was $736 million, up 55% year over year, and non-GAAP EPS was $5.68, up 59%; GAAP operating income was $643 million, up 68%, and GAAP EPS was $5.18, up 89%. Distribution non-GAAP gross billings were $24.8 billion, up 27%, with gross profit of $1.15 billion and non-GAAP operating income of $483 million; Hyve gross billings were $7 billion, up 117%, with gross profit of $276 million and non-GAAP operating income of $253 million. For Q4, management guided to gross billings of about $31.9 billion, plus or minus $500 million; revenue of about $22.2 billion, plus or minus $400 million; non-GAAP net income of about $474 million, plus or minus $20 million; and non-GAAP diluted EPS of about $5.90, plus or minus $0.25. They also said they expect Hyve gross billings to increase sequentially and cash generation to improve as working capital normalizes.

Patrick Zammit said the quarter showed broad-based strength across geographies, technologies, customers, and programs, with notable demand in data center infrastructure. He emphasized that enterprise AI is moving from experimentation toward production-scale deployments and that TD SYNNEX is benefiting from the complexity customers and vendors need help navigating. He also highlighted digital engagement, vendor expansion such as IBM into 20 additional countries, and the view that these trends expand the company’s addressable market and long-term earnings power.

David Jordan highlighted that both Distribution and Hyve grew above market and that operating income and EPS grew faster than gross billings. He cited the key figures: $31.8 billion in gross billings, $736 million in non-GAAP operating income, and $5.68 in non-GAAP EPS, plus cash flow consumption of about $1 billion, networking capital of $6.5 billion, a 22-day gross cash conversion cycle, and $749 million of cash and cash equivalents with net leverage at 1.9x. He said the cash use was driven mainly by Hyve inventory and program ramps, but that most of the working capital investment is now in place, Q4 should generate cash, and the company returned $100 million via share repurchases and $38 million via dividends.

Analysts focused on Hyve margins, data center spending risk, margin mix in Distribution, cash needs into 2027, the Amazon warrant agreement, and PC demand. Management said Hyve’s newer programs are predominantly neutral to accretive, margins have stabilized, and margin improvement should follow as programs mature; on data center demand, they said they remain cautiously optimistic and see no sign of concern in backlog or forecasts. On cash, they said Q4 should be cash generative and that mature Hyve programs produce free cash flow. On PCs, they said units were down as expected, but ASPs and mix improved, and AI PCs are now close to 50% of TD SYNNEX’s PC revenue.