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D Synnex has delivered a set of second-quarter numbers that have shown some of the impact of the recent decline in the PC market.
The distributor reported a 7.9% decrease in revenues, coming in at $14.1bn for the three months ended 31 May. In Europe, the decline was 4.1%, with revenue coming in at $4.5bn. In the Americas, the drop was 11%, and in Asia-Pacific and Japan, there was a 7.3% climb to hit $901m.
The distie pointed the finger at a decline in its endpoint solutions business as the PC industry continues to struggle post the highs of the pandemic period. The firm did see growth in its Advanced Solutions business, with strong demand from cloud and datacentre technologies, but this was not enough to completely offset what was happening in other parts of the business.
The firm also highlighted that the shift in product mix had resulted in a greater percentage of its revenues being presented on a net basis, which negatively impacted the numbers year-on-year to the tune of approximately 3%.
Operating income of $253m was flat year-on-year for the business globally, and it was the same picture in Europe. The Americas region saw a decline to $187m from $193m, but the picture was better in Asia-Pacific and Japan, where it improved to $26m from $19m in the prior year.
“Our unparalleled, end-to-end line card of products and services allowed us to realise growth in Advanced Solutions and high-growth technologies, as the industry continued to be impacted by post-pandemic declines in demand for PC ecosystem products,” said Rich Hume, CEO of TD Synnex.
“The resiliency of our business model was evident, as we expanded margins, generated significant free cash flow and returned $93m to shareholders,” he added. “As we enter the second half of our fiscal year, we are focused on pursuing an additional $50m in cost savings and accelerating our shareholder returns via opportunistic share repurchases.”
Security and networking sales
Some of the decent results from TD Synnex’s rivals have included revenue growth driven by security and networking sales, particularly at the likes of Exclusive Networks and Westcon-Comstor, but those businesses are not exposed in the same way to the PC market.
Although a recovery is expected in the PC world towards the end of this year, and gaining momentum into 2024, the current state of the market is a challenging one, with year-on-year shipment declines in both the first and second quarters.
Speaking earlier this month, the UK channel boss at Dell said they were expecting that a Windows 11-driven refresh would kick in later this year, and other senior industry figures, including from Lenovo, have voiced similar views.