Q1 2025 TD Synnex Corp Earnings Call Transcript
Key Points
- TD Synnex Corp (SNX) reported a strong start to fiscal year 2025 with gross billings growing by 7.5% year-over-year and 9.5% in constant currency.
- Advanced Solutions and Endpoint Solutions both showed significant growth, with Advanced Solutions growing by 7% and Endpoint Solutions by 8% year-over-year.
- The company expanded its reach to 30,000 active partners and 500,000 end users transacting through its cloud marketplace.
- TD Synnex Corp (SNX) was recognized as a distribution partner of the year by multiple industry leaders, including AWS, Palo Alto Networks, Insight Enterprises, and NVIDIA.
- The company maintained a strong cash position with $542 million in cash and cash equivalents and continued to return value to shareholders through $138 million in share repurchases and dividends in Q1.
- Hyve's performance was below expectations due to a component shipment delay and demand shortfalls, which may persist for a few quarters.
- Gross profit margin declined by 40 basis points year-over-year, primarily due to challenges in the Hyve business.
- Free cash flow usage was approximately $800 million, driven by higher working capital needs, particularly in Hyve.
- Interest expenses were higher than expected at $88 million, due to increased working capital requirements.
- The company faces challenges in the peripherals market, including a decline in printing and the loss of a large, unprofitable business in North America.
Good morning. My name is Kate, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX first quarter fiscal 2025 earnings call. Today's call is being recorded (Operator Instructions)
At this time, for opening remarks, I would like to pass the call over to David Jordan, America's CFO and Head of Investor Relations at TD SYNNEX. David, you may begin.
Thank you. Good morning, everyone, and thank you for joining us for today's call. With me today is Patrick Zammit, CEO; and Marshall Witt, CFO. Before we continue, let me remind you that today's discussions contain forward-looking statements within the meaning of the federal securities laws, including predictions, estimates, projections or other statements about future events, including statements about our strategy, demand, plans and positioning, growth, cash flow, capital allocation and stockholder return as well as our financial expectations for future fiscal periods.
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