Q2 2024 TD Synnex Corp Earnings Call Transcript
Key Points
- TD Synnex Corp (SNX) reported a 3% year-over-year increase in gross billings, reaching the high end of their guidance range.
- The company delivered strong financial results with double-digit growth in non-GAAP earnings per share and robust capital returns to shareholders.
- TD Synnex Corp (SNX) returned over $520 million to shareholders in the first two quarters of the fiscal year, representing nearly 70% of the total return to shareholders in fiscal 2023.
- The company is well-positioned to benefit from the AI era, with significant potential for growth across components, devices, data center, cloud storage, networking, and related software.
- TD Synnex Corp (SNX) launched the IBM watsonx Gold 100 program to accelerate AI opportunities for partners, establishing Centers of Excellence in four global locations.
- Net revenue was down less than 1% year-over-year, impacted by increased gross-to-net revenue adjustments due to a higher proportion of software-as-a-service offerings.
- The networking segment remained soft, affecting overall gross margins as networking typically has a higher gross margin profile.
- The ramp-up of new customers in the Hyve business created margin pressure due to significant upfront investments, impacting short-term profitability.
- The company's gross leverage ratio increased to 2.6 times, with net leverage at 2 times, due to the timing of recent debt issuance.
- There is a potential short-term constraint on PC purchases as customers await the availability of more AI-enabled PCs, which could impact near-term revenue growth.
Good morning. My name is Briana, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX second-quarter fiscal 2024 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 Liz Morali, Head of Investor Relations. Liz, you may begin.
Thank you. Good morning, everyone, and thanks for joining us for today's call. With me today are Rich Hume, CEO; Patrick Zammit, COO; and Marshall Witt, CFO.
Before we continue, let me remind you that today's discussion contains forward-looking statements. within the meaning of the federal securities laws, including predictions, estimates, projections, or other statements about future events, including statements about demand, positioning, growth, cash flow, and shareholder return as well as our expectations for future fiscal periods. Actual results may differ materially from those mentioned in these forward-looking statements as a result of risks and
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