TD SYNNEX Corporation (SNX) on Q1 2021 Results - Earnings Call Transcript
Operator: Good morning. My name is Sharon, and I will be your conference operator today. I would like to welcome everyone to the SYNNEX Merger Discussion and First Quarter Fiscal 2021 Earnings Call. Today's call is being recorded 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. Liz Morali: Thank you, Sharon, and good morning to everyone. Thank you for joining us for today's call on short notice. With me today are Dennis Polk, SYNNEX's CEO; Rich Hume, Tech Data's CEO; and Marshall Witt, SYNNEX's CFO. Dennis Polk: Thank you, Liz, and thank you to everyone joining the call. Today is important and transformative day for the technology distribution industry as SYNNEX and Tech Data come together. For over four decades we have each worked to help our customers and partners grow and achieve their strategic priorities. We have both been leaders in the space and I and the entire SYNNEX management team have the utmost respect for the team at Tech Data and what they have created. Like us, Tech Data has established a reputation for excellence and we are thrilled to partner with its 14,000 plus talented colleagues. For SYNNEX, this combination is beneficial as it accelerates our strategic growth initiatives by multiple years versus what we could have done by acquiring several smaller, geographically diverse companies. While on the surface we appear to be similar companies, we're actually very complementary to each other from a geographic perspective, OEM representation, customer segment served, and services offered. Thus, the combined company will be able to bring additional services and capabilities to our respective partners. Rich Hume: Thanks, Dennis. the transformative transaction we are about I along with our shareholder Apollo, believe combining our business with SYNNEX accelerates the momentum that was already under way to create growth opportunity that neither company could achieve independently. The combined company will deliver superior value for shareholders, offer our customers and vendors exceptional reach, efficiency, and expertise across the entire technology ecosystem and be an employer of choice in the IT industry. Importantly, together we have the portfolio, the financial strength, and the talent to enable us to achieve these objectives. The combined company will be a diversified global solutions distributor with significant breadth and depth of capabilities and the ability to accelerate technology adoption and attract the world's most innovative OEMs. We will have premier, best-in-class, end-to-end offerings through a broad diversified portfolio of more than 200,000 products and solutions. The combined company will be positioned to transform value creation from the linear model to the multi-point model, enabling collaboration among all of the ecosystem participants. This will enable us to drive effective go-to-market strategies that our vendors can capitalize on and help to deliver optimal business-oriented solutions for their customers. Our ability to orchestrate the access, interaction, delivery, and services required to solve business challenges at scale is the foundation of how we will continue to grow. As you know, change is constant in our business and this is a pivotal time in our industry. Technologies such as cloud, analytics, IoT, and security are changing our customers and their end user customers' buy, sell, consume, and finance technology solutions causing the IT ecosystem to evolve faster than ever before. This evolution has accelerated further due to the work-from-home and return-to-office trends which are contributing to explosive growth in these areas in which we are ideally positioned to serve. The combined company will have a solid financial foundation, including an investment grade profile and strong free cash flows to support investments in our core growth platforms as well as investments in these next generation technologies. Dennis Polk: Thanks, Rich. Very well said, and I'm looking forward to working with you to achieve all these benefits and also to continue to drive and support the great cultures each of the company's bring to this transaction. I will now turn the call over to Marshall to walk through the terms of the transaction and speak to the highlights of our Q1 earnings release today. Following Marshall, I'll provide my normal quarterly update and then three of us will take your questions. Over to you, Marshall. Marshall Witt: Thanks, Dennis. This transaction is valued at $7.2 billion, including net debt; and at close, SYNNEX will issue 44 million shares. Pro forma ownership will be 55% SYNNEX shareholders and 45% Tech Data shareholders. We expect the transaction to close in the second half of 2021, subject to customary closing conditions, including approval by SYNNEX shareholders and regulatory approvals. From a financial perspective, the combined company will be on very solid footing with pro forma revenue of $57 billion, healthy EPS, EBITDA, and cash flow generation. We expect the transaction to be accretive to our non-GAAP diluted EPS by more than 25% in year one. Given the complementary customer set and geographic footprints, we see the opportunity to generate revenue synergies as a combined company. There is little overlap among our top customers and partners, and we believe SYNNEX's deep and narrow strategy combined with Tech Data's broad customer base minimizes risk regarding diversification. Dennis Polk: Thank you, Marshall. I'm very proud of our associates and the excellent first quarter results that we have delivered. In Q1, we continued to navigate an unpredictable environment; but through it all, the team again showed flexibility, creativity and dedication to find innovative ways to support our customers and partners with exceptional service. Our results above our internal expectations were driven by healthy broad-based demand across all our businesses as remote capability and digital transformation investments continued. Similar to the past few quarters, we saw strong demand for client devices like notebooks and Chromebooks, as well as continued demand for security, cloud, collaboration solutions and related services. We also saw improvements in areas like enterprise solutions, including server and networking. Our performance came from across all our customer segments with really no exception in the contribution to the growth in the quarter. From a geographical perspective, all regions performed well, with Canada and Japan exceeding expectations by the most. Turning to our Q2 outlook. Our priority remains on the health and safety of our associates. Overall, we are encouraged about the IT and spending environment so far in 2021. As we move closer to a sense of normalcy, it appears investment, especially in IT, is following. Operator: First question comes from Ananda Baruah with Loop Capital. Ananda Baruah: Hey. Thanks, guys. Good morning. Let's say congratulations. I think shouldn't be super surprised, I guess even though you guys miss the half of the executives from your management team over the last 10 years of distribution, but still want to . Two if I could -- and Rich welcome back to the financial community, sort of, into the public sphere here. Two if I could. The first is, you guys mentioned on the call that you expect you can -- this is my language -- gain share or knowledge share inside those -- inside the customers and suppliers. Do you think that, at normalized, the combined company growth rate can be a higher growth rate longer term -- if normalized -- than with the two separate companies? One is that. And then I have a follow-up as well. Thanks. Dennis Polk: Hi, Ananda. Yeah, a bit hard to hear you. I think I got most of your question there. And thanks, we appreciate your comments about the transaction. So as far as the combined company, yeah, we do expect there is a significant opportunity to grow the company faster than market rates. As Rich talked about in his prepared remarks, we really are two very complementary businesses. We both have very solid go-to-market strategies with very good service offerings to our partners. But in each company's case, there are some limitations to what is offered. And when we bring the combination of those services and offerings together, we think our customers will enjoy the benefit of a combined company, and that will drive -- we think -- solid market growth for the combined company. Ananda Baruah: Okay, that's great. And I appreciate that. I'll just ask my follow up quickly here. You mentioned strong IT spending through the balance of this year as businesses reopen. Are you able to get a sense of -- from those businesses -- what a structural ongoing impact could be from all things hybrid related, remote work, hybrid work, things like that? And so, any structure -- and even anything anecdotal you could share, Dennis, would be great. Beyond the impact of businesses reopening, what structural tail may there be in the future years? That would be helpful as well. Thanks. Dennis Polk: Sure. Yeah. So, so far, we've seen a very good demand in our business. So our comments were around the trajectory of our business so far through Q1. But for the rest of the year, Ananda, when it comes to businesses opening back up and workforces return to the office, we do think that will provide a tailwind overall, because I think we all know the work environment going forward won't be like the work environment it was prior to the pandemic. So companies will have to invest in additional IT capabilities to handle the remote workforce either from home or at the office, and we think that's going to again be a tailwind for our business, and that should provide a good set up for us for the rest of the year and beyond. So that's part one to answer your question. Part two, just from a tactical day-to-day standpoint, we are seeing more on-premise projects occurring this quarter and the current quarter that we're in, Q2 -- prior to quarter Q1 and now the current quarter, Q2. So, that's a good tailwind as well for our business as we see some of these projects that were delayed or were halted during the pandemic are now occurring, and we're able to deliver product and support our customers from that perspective. Ananda Baruah: That's really helpful. Rich Hume: If I could Ananda, I'm giving you an industry perspective now, and it's my point of view, but as Dennis had said what I would call the traditional data center deployments have been slowed in one category, and I believe that there are -- there is pent-up demand there. And when we look toward the back half of the year, it's my opinion that the pent-up demand for those data center projects will start to manifest itself in demand. The second part of your question, I think, was around the hybrid nature of the world, and I think that, certainly, the cloud-delivered capabilities are -- it's clearly accelerated relative to the totality of the demand, and I would anticipate that that demand will continue to be accelerated relative to the rest of the category. It provides a great opportunity for IT distribution. Operator: Next question comes from Adam Tindle with Raymond James. Adam Tindle: Okay, thanks. Good morning, and congrats on a landmark transaction. I have a two-part question on synergies and dis-synergies, maybe for Dennis. Just starting on the synergy side, you talked about $200 million plus over two years. Maybe you could talk about the nature of those synergies. We just think of both companies as very lean operators. So, color on the nature of the synergies and areas for upside beyond that $200 million, or what you didn't include? And then secondly, you talked about being similar from a geographic perspective, OEM, customers served. Are there any dis-synergies, contemplated with the OEM and customer response? Dennis Polk: Hi, Adam. Yeah, this is Dennis. Yeah, so from a synergy standpoint, yeah there are benefits from this transaction. But you are correct, we're two very well-run companies. But when we bring the two companies together, we have an opportunity to leverage our IT systems, as you know well. I think SYNNEX has its own internal ERP system. That's been very beneficial to us, and we think that's a key area where we can garner a lot of synergy savings going forward. Additional areas are facility consolidations of the two companies. There is also quite a bit of corporate spend, but that will be saved as we bring the two companies together. So, those are the three main key areas that we think we'll garner the synergies from. But as you know, both of our companies -- we're constantly working on our businesses, working on the core aspects of our operations, and we consistently find ways to achieve efficiencies and gain savings there as well. And we think that will continue with the combined company, not just in the first and second year of the transaction, but beyond that as well. So we think there is a tailwind there from a synergy aspect on top of what we're going to start with -- from the -- bringing the two companies together. From a dissynergy standpoint, there really aren't that many. We're not really forecasting significant amount of dissynergies. There could be some customer overlap or situations where maybe we can serve the customer in totality of the two companies individually, together. But again, we see those as very small and the amount of dissynergies is not material to the transaction. Adam Tindle: Okay. Rich Hume: And then maybe Adam on the dissynergy piece, as Dennis said, there might be some level of dissynergies. It's somewhat minimized because of what he talked about earlier in terms of the complementary aspects of our business. So just to keep a simple example here, there certainly are things on the SYNNEX line card that Tech Data does not carry, and the reverse is true. So within our customer sets, we'll be able to serve sort of that incremental capability going forward. And as he also commented, our customer sets are quite complementary, so it's the customer set in totality. Yes, there is some overlap, but it isn't as significant as one might think. So I think that there is a great opportunity to offset whatever dissynergies might exist with the complementary line cards. Adam Tindle: Understood, and good to hear from you Rich. Just as a follow-up, maybe one for Marshall. If you could just talk about the financing of the transaction and different options that you've kicked around. One might say you're just 2.7 times net debt post close. You've got $200 million of synergies on the comp, why not use more debt in the deal? And then secondly, your debt pay down implies about $1 billion of cash generation over the next 12 months or so. Are there one timers in there like a high change or anything like that, or is that an accurate reflection of the combined entities normalized cash flow? Thank you. Marshall Witt: Yeah, Adam. So from a pro forma basis, we do feel pretty confident about cash flow generation. One-time cost, we think will be around, we'll call it 1 times to 1.25 times just in terms of the synergies gained. And then, yeah, we did look at the optionality of how best to structure from a capital perspective and felt like the term loan combination with the unsecured bonds and then having the dry powder made the most sense for us. We expect to have 4.5 of liquidity ready and available to us and felt comfortable that the 2.7 times leverage at close being well below 3 times was a good place to start with confidence to get below or at 2 times within 12 months. Adam Tindle: Is that liquidity, something that you're planning to do something with, or is there a need for the ongoing business, maybe just what the working capital needs of the business? Marshall Witt: Yeah. Given working capital, and as both Rich and Dennis said, we expect to grow. We expect that the combined entities are going to be in position to need that extra dry powder to ensure that we've got what we need from a growth perspective in the business. Operator: Next question comes from Ruplu Bhattacharya with Bank of America. Ruplu Bhattacharya: Thanks for taking my questions, and congrats on the merger announcement. Maybe the first question for Rich. When Tech Data went private, I think you had intended to invest $750 million in digital transformation through 2025. Can you give us an update on where you stand on that? And do you intend to continue on that path? And how does this deal change that, if it does? Rich Hume: Well, thank you very much for the question. So yes, when you think about the investments that we had under way, when we get into the executory period, we'll have the opportunity to do some planning and -- at a top-level -- look at one another's assets and determine as we combine those two -- our two companies, what it is we might need going forward. But I would tell you that our joint vision is to provide the leading customer and vendor, as well as stakeholder -- I'm sorry, our colleague and associate experience within our category. So the long story short is, we'll continue to invest in our business, but it might not be aligned with what we originally planned to deploy because we might be picking up a lot of that capability from SYNNEX as we come together. Ruplu Bhattacharya: Okay, thanks for that Rich. That makes sense. Maybe for my second question, I'll ask you about the combined line card for the company. I think from what I remember, Tech Data had about 50% of revenue from endpoint solutions like PCs and phones and printers and advanced solutions was the other half of the business, which was storage and networking. I think SYNNEX also has peripherals, about 25% to 29% of revenues. So when you look at the combined line card, do you have an overall initial sense of where you want how much of revenues from -- where do you see like hardware versus software versus services? Any kind of -- any thoughts initially on the combined line card, where your strengths would be and what you might want to add? Rich Hume: Yes. So I think you have an accurate portrayal of, characterization of Tech Data being nearly 50-50. When we take a look at combining the line cards, the first and I think very, very critical point is we believe we'll have absolutely the most comprehensive portfolio within the market with over 200,000 offerings. As it relates to where our interests are going forward, first, we absolutely need to make sure that we're servicing our core business today as we know it, but we share a common vision in the future relative to where we'll incrementally invest and that would be, as I said in my prepared remarks, in the area of cloud, business analytics, security, IoT. As you probably well know, within the IT market, they offer accelerated growth opportunities and we're going to make sure that we're able to support vendors and customers with those needs moving forward. So I would think of this in the context of continuing to invest to keep our endpoint and advanced solutions business very healthy and robust and at the same time really setting our targets toward these continued emerging market opportunities and invest, maybe a little bit more heavy weight into those categories. Operator: Next question comes from Matt Sheerin with Stifel. Matt Sheerin: Yes, thank you. Good morning and hello, Rich, and the SYNNEX team. A lot of good details about the merger. One question, I guess there just regarding the branding and go-to-market strategy for the company. Obviously, SYNNEX and Tech Data are well known, Tech Data specifically, obviously, in Europe, but could you talk about that? And also in terms of conversations you've had with your very big vendors and very big reseller customers and the reception that you're getting, or concerns you're getting from them? Rich Hume: Sure. Maybe I'll take the first half and then Dennis can take the second half of the question. So as it relates to branding and headquarters and those type of matters, very honestly, we have not even embarked in those discussions. We're going to use the executory period to flesh that out and certainly we'll rely upon market insights, market data, customer data, vendor data as we take those decisions. And that's really that the timeframe where those things will come together. And so maybe Dennis can comment on the back half of your question, Matt, and then we can go from there. Dennis Polk: Yes. Thanks, Rich. Thanks, Matt. Yeah, now, we did have a chance through a diligence process and all the way through moments before this call to talk to a very good cross section of our partners, both customers and vendors. And the feedback has been overwhelmingly positive across the board. So we see a lot of excitement and support for this transaction from our customer and vendor base. Matt Sheerin: Okay. All right. Thank you. And then just a couple of questions just regarding the SYNNEX business, specifically in your guidance. One, regarding the ongoing PC supply constraints that we've been hearing about. Is that impacting revenue at all, or does it give you a longer runway here with this upgrade cycle given the backlog? And then second, you've talked about the high business moving to a consignment-only model with your large customer there. Could you tell us the timeframe? Any updates there? Thanks. Dennis Polk: Thanks, Matt. So I'll hand the first part, and turn it over to Marshall for the second. As far as the supply chain, the challenges are still there from a product shortage standpoint, from extended SLAs from just be able to get product from our vendors in a timely manner. I think those are well documented and very well explained from our vendor partners. So right now, our backlog is very consistent with what has been the past three quarters. We've talked about in the past, we rarely have much of the backlog. So that consistent and high backlog will tell you that there are still supply chain challenges in the market. But as always, we do our best to work through those and deliver a very good service to our customers, and you can see through our performance in Q1 we've done a very good job in doing so. Marshall Witt: And then Matt, I'll take the second part. No change from what we said last time we connected. Still expect the Hyve customer to transition to consignment in Q3. It's reflected in our thoughts for the full year. And as we said, it's not a light switch. It will turn-on in Q3 and probably fully ramped for Q4. Operator: The next question comes from Shannon Cross with Cross Research. Shannon Cross: Thank you very much for taking my question. I'm curious, and I'm sure we'll get more information when the Form-10 comes out of proxy. But how did the transaction come about? What were the thoughts around the valuation and the split of ownership? If you can just sort of talk us through how Tech Data and Apollo versus SYNNEX sort of thought about it? And where you're coming out? And then I have a follow-up. Thank you. Dennis Polk: Hi, Shannon. This is Dennis. I'll start off with that one. So we've had conversations over the past few months, Tech Data and SYNNEX. Obviously we are both always evaluating opportunities for growth in our businesses and enhancing the way we deliver value to our customers and vendors and colleagues and investors. And through the conversations that we've had, we realized the combination of these two companies could really deliver a lot of value, and that's why we're talking here today. We're very excited about this transaction and very excited to get to close and operating the two companies together. With regards to all the other details, yeah, we'll let the proxy be filed and you'll see the roll-up of how things got to where they are today. Okay? Shannon Cross: Okay. But I guess I'm just trying to figure out from an EBITDA multiple perspective how you thought about it and came up with it? I don't know if there's any other details you can give us in terms of the valuation in that, given, I mean, Apollo was at $6 billion in June when they closed the deal? Dennis Polk: Right. Sure. So this is Dennis. I can take that one again and I think maybe Rich will want to add some comments. From a multiple standpoint, the multiple that -- of this transaction is consistent with multiples that have been paid in similar transaction in our industry, including our most recent TS transaction the Westcon-Comstor. It's also similar to the multiple that was paid for when Apollo took Tech Data private. I think the key thing to realize is that, since the announcement of Tech Data and Apollo back in 2019, Tech Data has grown and improved its business since then. So that's added to the value of the company and that's what we factored in when we had our negotiations with the company. Rich, over to you with any other comments. Rich Hume: Yeah, I think it's important to note, since Dennis had talked about the ownership of Apollo as a shareholder is approximately 45%. And so they view their engagement with IT distribution as sort of a journey here, and certainly this is just part of that journey and they'll continue to be a meaningful investor as we move forward. So, I think the comments Dennis made around the multiples etc. are accurate, and I think the big message here is they see this as a great investment opportunity as well as they move into the future. Shannon Cross: Okay. And then that kind of answers my second question was -- which was, Apollo is long-term committed, obviously, with Board seats. But I think you just confirm that, is that correct? Rich Hume: Yeah, certainly, they are meaningful investors and they do have some of the Board seats. That's correct. Shannon Cross: Okay. Thank you very much. Operator: Next question comes from Vincent Colicchio with Barrington. Vincent Colicchio: Yes. I'm sure this one is for Marshall or Dennis. I missed what you said earlier on the IT systems. Will it be any complexity with that sort of that integration? Dennis Polk: Hi, Vince. Dennis here. Yes, with any large integration resulted from a merger, there is complexity around the integration of IT systems. But as we said in our prepared remarks, both companies have been through quite a few transactions over the years and have shown that they can transition IT systems very well. SYNNEX has a very, very good history of doing so, and Tech Data has a similar one. So we realize it's a big job in front of us, but with our experience and know-how, we're very confident that we'll move through this aspect of the integration very well. Vincent Colicchio: And then on the existing business, you had mentioned all regions are strong and Canada and Japan exceeded expectations. Can you give us more color on that? Dennis Polk: Yeah. So really it was a across the board, every division, every country strong performance to our expectations, specifically in Japan. In Japan there is an ongoing one PC per school age child, and that's been playing to our numbers throughout the past three or four quarters, because we've been a pretty big participant in delivering those PCs and Chromebooks to students across Japan. And that should play out for another quarter or so in our business. So that's why Japan had a nice solid performance. In Canada, it's just been really continued execution over the past year plus that's caused our Canadian team to deliver above expectations on a consistent basis. And that really, again, it's just from the hard work that the team has done to build a very good base of solutions and offerings, and that's turned into significant wins with customers and produced solid results that we're talking about today. Operator: And we do not have any telephone questions at this time. I will turn the call over to Mr. Dennis Polk. Dennis Polk: Thank you. So in closing, I want to thank the SYNNEX team for all their ongoing efforts. I want to thank Rich and the Tech Data team for their help in making today happen. I have ongoing confidence in our business and look forward to the coming year and eventual combination of success of the merger with Tech Data. Stay well, and thank you. Operator: This concludes today's conference call. You may now disconnect.
Loop Capital Raises TD Synnex Target on Strong IT Demand and Growth Momentum
Loop Capital raised its price target on TD SYNNEX (NYSE:SNX) to $160 from $150 while reiterating a Buy rating, citing the company’s robust performance in IT distribution and hyperscale solutions, as well as continued momentum across key segments.
The firm highlighted TD Synnex’s better-than-expected May quarter results, which featured 7% year-over-year revenue growth and a 10% increase in EPS. Endpoint Solutions gross billings rose 13% YoY, benefiting from an ongoing PC refresh cycle that SNX believes is only halfway through, with additional demand expected as organizations adopt Windows 11.
Advanced Solutions, excluding Hyve, grew 10% YoY, supported by strong activity in data center infrastructure, cloud, security, and AI technologies. Meanwhile, Hyve posted high-teen gross billings growth, including a 45% surge in its ODM/CM business driven by its largest customer and recovering orders from a key second customer.
While Hyve’s gross margin dipped sequentially due to FX impacts and product mix, management signaled stabilizing margins and future improvement thanks to strategic investments and a broader customer base. Loop Capital’s increased target reflects confidence in SNX’s ability to sustain growth and capitalize on secular trends in IT modernization and cloud infrastructure.
TD Synnex (NYSE:SNX) - A Leading IT Distributor with Strong Growth Potential
TD Synnex (NYSE:SNX) is a leading global distributor and solutions aggregator for the IT ecosystem. The company provides a wide range of technology products and services, catering to various industries. As a major player in the IT distribution sector, TD Synnex competes with other large firms like Ingram Micro and Arrow Electronics.
On June 25, 2025, David Paige from RBC Capital set a price target of $145 for SNX, which was trading at $137.79 at the time. This suggests a potential price increase of approximately 5.23%. The analysis, published by Benzinga, highlights the growth potential of TD Synnex, despite facing short-term margin pressures.
The company's recent upgrade to a "buy" rating follows its strong second-quarter 2025 results. These results demonstrated broad-based growth, strong execution, and improved demand visibility. The turnaround of Hyve and new transparency have resolved significant overhangs, with demand resuming from major customers, contributing to clear growth.
TD Synnex's aggressive capital returns through buybacks and dividends are supporting the stock. These actions are aiding in achieving the company's target of double-digit EPS growth. The stock has experienced a price change of $0.91, reflecting a percentage increase of 0.66%, with a current price of $137.79.
The stock has fluctuated between a low of $133.75 and a high of $138.08 today. Over the past year, SNX has reached a high of $145.10 and a low of $92.23. The company's market capitalization is approximately $11.56 billion, with a trading volume of 1,569,971 shares.
TD SYNNEX Tops Q2 Estimates, Stock Gains 5%
TD SYNNEX (NYSE:SNX) reported solid fiscal second-quarter results that exceeded expectations on both the top and bottom line. As a result, the company’s shares rose more than 5% intra-day today.
Adjusted earnings per share came in at $2.99, beating the $2.71 analyst consensus. Revenue grew 7.2% year-over-year to $14.95 billion, also topping forecasts of $14.3 billion. Non-GAAP gross billings rose 12.1% to $21.6 billion, while the company maintained a stable operating margin of 2.8%.
CEO Patrick Zammit credited the strong performance to continued momentum in IT distribution and hyperscaler markets, as well as disciplined execution that allowed TD SYNNEX to outperform industry growth.
Looking ahead, the company issued Q3 guidance for adjusted EPS in the range of $2.75 to $3.25, straddling the $2.96 consensus. Revenue is expected between $14.7 billion and $15.5 billion, slightly above Wall Street’s $15.02 billion estimate at the midpoint.
Regionally, the Americas led with $9.0 billion in revenue, up 5.3%, while Europe climbed 10.5% to $4.9 billion. Asia-Pacific and Japan posted an 8.7% increase to $1.0 billion, reflecting broad-based growth.
Despite the positive results and outlook, the stock’s modest decline suggests investors may be weighing near-term volatility or margin pressures against the company’s longer-term trajectory.
TD SYNNEX (NYSE:SNX) Earnings Preview: Key Financial Insights
- Earnings per Share (EPS) estimate is set at $2.69 with projected revenue of approximately $14.3 billion.
- Analysts forecast a 1.5% decline in EPS year-over-year, despite a 2.7% increase in revenue.
- The company's price-to-earnings (P/E) ratio is 15.19, and its price-to-sales ratio stands at 0.18, indicating a moderate to low market valuation.
TD SYNNEX (NYSE:SNX) is a leading global distributor and solutions aggregator for the IT ecosystem. The company provides a wide range of technology products, services, and solutions to its clients. As SNX prepares to release its quarterly earnings on June 24, 2025, Wall Street analysts have set their sights on an earnings per share (EPS) estimate of $2.69 and projected revenue of approximately $14.3 billion.
Analysts expect SNX's earnings per share to decline by 1.5% year-over-year, despite a 2.7% increase in revenue to $14.3 billion. This mixed outlook reflects the company's ability to grow its top line while facing challenges in maintaining its profit margins. Over the past month, the consensus EPS estimate has been revised upward by 1%, signaling a positive shift in analysts' expectations.
The market will be closely monitoring SNX's performance to see if it can exceed these estimates. Surpassing expectations could lead to a rise in the stock price, while failing to meet them might result in a decline. The company's price-to-earnings (P/E) ratio of 15.19 suggests a moderate market valuation of its earnings, while its price-to-sales ratio of 0.18 indicates a relatively low market valuation compared to its sales.
SNX's enterprise value to sales ratio stands at 0.24, reflecting its total valuation in relation to revenue. However, the enterprise value to operating cash flow ratio is notably high at 167.32, which may indicate a premium valuation or lower cash flow generation relative to its enterprise value. The company's earnings yield of 6.58% provides insight into the return on investment for shareholders.
With a debt-to-equity ratio of 0.54, SNX maintains a moderate level of debt compared to its equity, suggesting a balanced approach to financing. Additionally, the current ratio of 1.27 indicates that the company has a reasonable level of liquidity to cover its short-term liabilities. As SNX approaches its earnings release, investors will be keen to see how these financial metrics influence the company's future performance.
TD SYNNEX Sinks 16% After Earnings Miss and Weak Q2 Guidance
TD SYNNEX (NYSE:SNX) shares plunged over 16% intra-day today, after the company reported disappointing fiscal first-quarter results and issued underwhelming guidance for Q2, sparking investor concern about near-term performance.
For Q1, the company posted adjusted earnings per share of $2.80, falling short of analyst expectations of $2.91. Revenue came in at $14.53 billion, below the $14.79 billion consensus, as growth momentum slowed.
The outlook for the current quarter further weighed on sentiment. TD SYNNEX projected Q2 adjusted EPS between $2.45 and $2.95, well below the $3.03 expected by analysts, and revenue in the range of $13.9 billion to $14.7 billion, compared to forecasts of $14.72 billion.
Management pointed to its broad IT portfolio, global scale, and targeted go-to-market strategy as drivers of long-term competitiveness. However, the immediate focus for investors remained on the earnings shortfall and cautious guidance, which signaled a more tepid environment for IT spending in the months ahead.
TD SYNNEX Sinks 16% After Earnings Miss and Weak Q2 Guidance
TD SYNNEX (NYSE:SNX) shares plunged over 16% intra-day today, after the company reported disappointing fiscal first-quarter results and issued underwhelming guidance for Q2, sparking investor concern about near-term performance.
For Q1, the company posted adjusted earnings per share of $2.80, falling short of analyst expectations of $2.91. Revenue came in at $14.53 billion, below the $14.79 billion consensus, as growth momentum slowed.
The outlook for the current quarter further weighed on sentiment. TD SYNNEX projected Q2 adjusted EPS between $2.45 and $2.95, well below the $3.03 expected by analysts, and revenue in the range of $13.9 billion to $14.7 billion, compared to forecasts of $14.72 billion.
Management pointed to its broad IT portfolio, global scale, and targeted go-to-market strategy as drivers of long-term competitiveness. However, the immediate focus for investors remained on the earnings shortfall and cautious guidance, which signaled a more tepid environment for IT spending in the months ahead.
TD SYNNEX Corporation (NYSE:SNX) Analysts' Expectations and Financial Performance
- The consensus price target for TD SYNNEX Corporation (NYSE:SNX) has increased by approximately 10% over the past year, indicating growing confidence in the company's business model and market position.
- Despite a more conservative view from analyst Matthew Sheerin with a price target of $130, the company's recent financial performance, including a 10% year-over-year revenue increase in the fourth quarter of 2024, supports the optimistic sentiment.
- TD SYNNEX's financial health is highlighted by its impressive quarterly free cash flow and reduced restructuring costs, alongside stock repurchases signaling confidence in future financial performance.
TD SYNNEX Corporation (NYSE:SNX) is a prominent player in the IT solutions and business process services sector. The company has been expanding its offerings and capabilities, which is reflected in the positive shift in analysts' expectations. Over the past year, the consensus price target for SNX has increased by approximately 10%, from $141.78 to $156, indicating growing confidence in the company's business model and market position.
Despite the positive outlook, analyst Matthew Sheerin from Stifel Nicolaus has set a lower price target of $130 for SNX. This suggests a more conservative view compared to the consensus. The company's recent financial performance supports the optimistic sentiment, with a 10% year-over-year revenue increase in the fourth quarter of 2024, driven by advancements in solutions and endpoint solutions.
TD SYNNEX's financial health is further bolstered by its impressive quarterly free cash flow and reduced restructuring costs. The company is also engaging in stock repurchases, which often signals confidence in future financial performance. However, potential risks such as new tariffs, dependency on key suppliers like Apple and HP, and low operating margins should be considered by investors.
The company's reliance on international revenue is a crucial factor in assessing its financial stability and growth prospects. This global focus could significantly influence SNX's stock price performance. As TD SYNNEX prepares to release its first-quarter fiscal 2025 results on March 27, 2025, investors and stakeholders should monitor any developments that could impact analysts' price targets and the stock's performance.
