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TD Synnex beats expectations in Q3
Revenues rise as channel player enjoys growth across its products portfolio and geographies
TD Synnex has delivered a strong third quarter thanks to demand for cloud infrastructure, security and its Hyve offering, enabling it to come in ahead of expectations.
The distributor also enjoyed continued demand for PCs, and saw MSP [managed service provider] and SME [small and medium-sized enterprise] growth across all geographies, with enterprise demand remaining stable.
Revenue of $15.7bn was 6.6% up on last year’s $14.7bn, and above the high end of the outlook for the three months ended 31 August. Non-generally accepted accounting principles (non-GAAP) gross billings climbed by 12.1% to $22.7bn, which again were at the top end of the forecasts. Gross profit was $1.1bn compared with $961m in the same period a year earlier.
In terms of European performance, revenue improved by 12.7%, coming in at $5.2bn, and non-GAAP gross billings climbed by 14.9% to hit $6.9bn.
Speaking on a results webcast, Patrick Zammit, CEO of TD Synnex, was buoyant over the performance, noting that its wide portfolio and global position paid off, and that it continued to introduce fresh vendors to the channel and develop more partner relationships.
“Our third-quarter non-GAAP gross billings and diluted earnings per share established new records for our company; our performance is a clear result of our team’s strong execution, the differentiated go-to-market strategy, and a global end-to-end portfolio of products and services that is unrivalled,” he said.
“The majority of our technology products and services and endpoints and advanced solutions experienced an increase in gross billings year over year, highlighting a few key areas; software continued to be a standout, experiencing a 26% increase in gross billings fuelled by cyber security and infrastructure software,” said Zammit. “Additionally, we are still experiencing strong demand in PCs, driven by a higher mix of AI-PC in the Windows 11 refresh cycle, we experienced healthy momentum across each of our regions.”
Small and medium customer base
Zammit said the core small and medium customer base, supported by managed service providers, had been particularly strong in the quarter.
“We’re experiencing broad-based strength in SMB and MSPs, which grew substantially above the company average in most of our geographies,” he said. “By developing bespoke value propositions and deploying dedicated commercial teams with deep industry knowledge, we have successfully positioned ourselves as a trusted partner for this strategic customer segment. Enterprise demand remains largely stable, with balanced revenue growth throughout the majority of this customer base.”
Zammit added that the channel player was committed to developing its portfolio and widening its vendor relationships, as well as providing partners with support, and its activities around AI were a good example of that strategy in action.
“We are continuing to onboard cutting-edge vendors and help accelerate the adoption of new technologies in the market,” he said. “As the adoption of AI technology evolves, we are enhancing our distribution AI enablement programme to include three strategic focus areas that are designed to help our partners adopt scale and secure AI solutions, agentic AI, security for AI and AI factory.
“Launching next week, these programmes will deliver comprehensive solution support such as designing modern architectures that blend multiple AI technologies and enable hybrid deployment models that deliver flexible intelligence, threat detection, prevention and responses,” said Zammit.
Source of knowledge
The distie’s CEO also praised its Hyve programme, and indicated it would continue to invest in positioning itself as a source of knowledge on datacentres, appealing to both hyperscalers and cloud providers.
Zammit finished the webcast discussing its latest initiative to improve life for partners, introducing the Partner First portal in North America, with plans to roll it out globally in the coming quarters.
He described the offering as “a unified portal that optimises the partner experience by combining commerce, services, education and community in a single digital environment”.
“Partner First marks an important milestone in TD Synnex omnichannel strategy, using AI automation and advanced analytics to enhance our operation and streamline the buying journey,” said Zammit.
