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TD Synnex Q3 results show signs of industry recovery

Distributor TD Synnex’s CEO talks of an improving market after sharing numbers for the third quarter that included revenue improvements across all geographies

TD Synnex has struck an optimistic note after sharing third-quarter numbers, which the distributor described as an indication that the tech market is recovering.

The distie shared numbers for the three months ended 31 August showing a 5.2% increase in revenues to $14.7bn, which was at the upper end of the firm’s outlook. Non-GAAP gross billings of $20.3bn were above the high-end outlook.

The improvements in revenues were largely driven by growth in the Advanced Solutions and Endpoint Solutions portfolios.

Endpoint Solutions grew by 5%, helped by sales of PCs, components, mobile and services. Advanced Solutions improved by 12%, with Hyve, Hybrid Cloud, Software and Services fuelling that growth.

The business saw revenues improve across Europe from $4.2bn to $4.6bn, increasing by 8.6%. Non-GAAP gross billings were $6bn, compared to $5.5bn in the prior fiscal third quarter, representing an increase of 9.6%.

Revenues were also up in the Americas by 2.4% to $8.9bn, and was up substantially by 17.6% in Asia Pacific and Japan, coming in at $1bn.

“Q3 was a strong quarter, reinforcing our optimism regarding IT market recovery. In particular, we saw significant growth across geographic segments and in both our Endpoint and Advanced solutions businesses. Additionally, gross billings in Q3 grew 9%, coming in above the high end of our range,” said Patrick Zammit, CEO of TD Synnex.

“These results underscore that our broad global reach, extensive line card and effective execution of our strategy are helping us grow slightly ahead of market,” he added.

Speaking to analysts after the results dropped, Zammit said the firm was feeling confident about the prospects for its fourth quarter.

“Looking ahead, I’m excited about the trajectory of TD Synnex. Based on our Q3 results and Q4 expectations, we believe the market is returning to growth. And we are uniquely positioned to expand our coverage and services and deliver value-added solutions to our customers,” he said.

Marshall Witt, chief operating officer at TD Synnex, echoed those views about the prospects for the end of the fiscal year and beyond.

Zammit indicated that Strategic Technologies, which included AI, were also increasing and it was benefitting from its Hyve hyperscale digital infrastructure organisation, putting the distie in a good position to tap into emerging opportunities.

“We expect IT spend demand will continue to expand in Q4 and into fiscal ’25, which will result in increased working capital and an increase in cash days, but is expected to result in accretive returns as these investments fell through in fiscal ’25,” he told analysts.

“We believe we remain well-positioned to benefit from the IT market recovery and have a strong balance sheet to fund our unique capabilities, allowing us to be the global partner of choice in IT distribution,” he added.

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