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01/10 04:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates strong growth in strategic technologies and partner expansion, with a positive outlook for Q2 net revenue and non-GAAP net income. Shareholder returns are robust, with significant share repurchases and dividends. The Q&A section reveals cautious optimism due to macro uncertainties but highlights strong demand and growth in key areas. Despite some uncertainties, the overall sentiment is positive, with expectations of continued growth and financial health improvements. The commitment to a $1.1 billion free cash flow target and strong performance in APJ further support a positive outlook.
Gross Billings $21.6 billion, up 12% year-over-year (11% in constant currency). Growth attributed to strong performance across all regions and major technologies, and customers advancing forecasted purchases due to economic volatility.
Net Revenue $14.9 billion, up 7% year-over-year. Growth driven by higher mix of software and increased high transactions where the company acts as an agent.
Endpoint Solutions Portfolio Gross Billings Grew 13% year-over-year. Growth driven by ongoing PC refresh cycle and customers advancing forecasted purchases.
Advanced Solutions Portfolio Gross Billings Grew 12% year-over-year (10% excluding Hyve). Growth driven by demand for data center infrastructure, cloud, security, AI, and other high-growth technologies.
Hyve Gross Billings Grew in the high teens year-over-year. Growth attributed to strength in programs associated with server and network rack builds.
Gross Profit $1 billion, up 7% year-over-year. Gross margin as a percentage of gross billings was 5%, consistent sequentially but declined 21 basis points year-over-year. Decline due to unrealized FX losses and program mix.
Non-GAAP SG&A Expense $632 million, representing 3% of gross billings and an 11 basis point improvement year-over-year.
Non-GAAP Operating Income $414 million, up 7% year-over-year. Operating margin as a percentage of gross billings was 2%, a 10 basis point decline year-over-year.
Non-GAAP Net Income $251 million. Non-GAAP diluted earnings per share was $2.99, both above the upper end of guidance range.
Free Cash Flow $543 million. Improvement attributed to a 4-day improvement in cash conversion cycle quarter-over-quarter.
Shareholder Returns $186 million returned to stockholders, including $149 million in share repurchases and $37 million in dividend payments.
Software: Experienced 20% billings growth fueled by cloud, cybersecurity, and infrastructure software.
PCs: Strong growth driven by the refresh cycle.
Networking: Growth observed after multiple weak quarters.
Advanced Solutions portfolio: Includes Hyve, which grew gross billings in the high teens, driven by server and network rack builds.
Global distribution partnerships: TD SYNNEX was recognized as HPE's global distribution partner of the year and received multiple honors from NVIDIA, CrowdStrike, Dell, Lenovo, NetApp, and Fortinet.
Customer segments: Broad-based demand across SMB, MSPs, and public sector, all growing double digits.
Digital capabilities: Developed an integrated and automated operational model for a U.S. customer, driving efficiencies and exponential sales growth.
Services initiatives: Engaged in building data center solutions and deploying AI infrastructure solutions for an advanced solutions OEM.
Strategic imperatives: Focused on unifying reach, targeting new customers, market expansion, diversifying offerings, and accelerating services.
Cash allocation: Excess cash allocated to high-return opportunities for sustainable shareholder value creation.
Macroeconomic Uncertainty: The company acknowledges ongoing macroeconomic uncertainty, which could impact demand and customer purchasing behavior.
Volatile Economic Environment: The CFO highlighted a volatile economic environment, particularly with respect to global trade, which could affect the company's financial performance and outlook.
Unrealized FX Losses: The company experienced unrealized foreign exchange losses, which impacted gross margins and may continue to pose a risk until the product is sold through.
High Transactions as Agent: An increase in high transactions where the company acts as an agent led to a higher gross-to-net adjustment, which could affect revenue recognition and financial metrics.
Program Mix Impact on Margins: Changes in program mix contributed to a decline in high gross margins, which could affect profitability.
Interest Expense: Interest expense and finance charges were higher than expected, which could impact net income and financial flexibility.
Global Trade Developments: Ongoing developments in global trade were cited as a risk factor, potentially affecting supply chain and operational efficiency.
Gross Billings: For the third quarter, TD SYNNEX expects non-GAAP gross billings in the range of $21 billion to $22 billion, representing growth of approximately 6% at the midpoint.
Net Revenue: Net revenue is projected to be in the range of $14.7 billion to $15.5 billion, translating to an anticipated gross to net adjustment of 30%.
Non-GAAP Net Income: Non-GAAP net income is expected to be in the range of $227 million to $268 million.
Non-GAAP Diluted Earnings Per Share: Non-GAAP diluted earnings per share is forecasted to be in the range of $2.75 to $3.25 per diluted share, based on weighted average shares outstanding of approximately 81.8.
Non-GAAP Tax Rate: The non-GAAP tax rate is expected to be approximately 23%.
Interest Expense: Interest expense is projected to be $89 million.
Share Repurchases: The company plans to execute approximately $175 million of share repurchases during the quarter.
Dividend Payments: $37 million in dividend payments were made in Q2.
Dividend Declaration: A cash dividend of $0.44 per common share has been approved for Q3, payable on July 25, 2025, to stockholders of record as of July 11, 2025.
Share Repurchases: $149 million was spent on share repurchases in Q2.
Future Share Repurchase Plan: Approximately $175 million of share repurchases are planned for Q3, with an opportunistic strategy to return excess cash to shareholders.
The earnings call summary highlights strong financial performance, significant market share gains in APJ and Europe, and robust growth in Hyve and AI investments. Despite concerns about component costs, no demand destruction was observed, and optimistic guidance was provided. The Q&A session revealed sustainable growth strategies and positive market sentiment, with Hyve's strong margin profile and strategic technology growth as key factors. Overall, the positive elements outweigh the concerns, suggesting a positive stock price movement.
The earnings call summary highlights strong financial performance, with record high revenue and earnings growth, exceeding guidance. The Q&A section confirms sustained demand and growth in key areas, such as Hyve and PCs, with positive expectations for Q4. Shareholder returns through dividends and buybacks further support a positive outlook. Despite some uncertainty in management's responses, overall sentiment is positive, indicating a likely stock price increase of 2% to 8%.
The earnings call summary indicates strong growth in strategic technologies and partner expansion, with a positive outlook for Q2 net revenue and non-GAAP net income. Shareholder returns are robust, with significant share repurchases and dividends. The Q&A section reveals cautious optimism due to macro uncertainties but highlights strong demand and growth in key areas. Despite some uncertainties, the overall sentiment is positive, with expectations of continued growth and financial health improvements. The commitment to a $1.1 billion free cash flow target and strong performance in APJ further support a positive outlook.
The earnings call revealed mixed results. While there was growth in gross billings and net revenue, issues like component delays and a decline in profit margins were concerning. The Q&A highlighted management's vague responses about Hyve's demand challenges, adding uncertainty. However, the dividend increase and share repurchases provide some positive sentiment. Overall, the combination of positive and negative factors suggests a neutral stock price movement in the short term.
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