TD SYNNEX (US:SNX)2025-04-02 20:01Financial Performance - For the three months ended February 28, 2025, the company's revenue was 100% of total revenue, with a gross profit margin of 6.87%, down from 7.20% in the same period last year[111]. - The cost of revenue increased to 93.13% of total revenue compared to 92.80% in the prior year, indicating rising costs impacting profitability[111]. - Operating income for the period was 2.10%, slightly down from 2.17% year-over-year, reflecting ongoing challenges in maintaining margins[111]. - The company reported a net income of 1.15% of total revenue, a decrease from 1.23% in the previous year, highlighting a decline in overall profitability[111]. - Consolidated revenue for the three months ended February 28, 2025, was $14,531,707, representing a 4.0% increase from $13,975,253 in the prior year[118]. - Revenue for the three months ended February 28, 2025, was $1,004,604,000, an increase of 5.2% compared to $954,905,000 for the same period in 2024[139]. - Net income for the three months ended February 28, 2025, was $167,537,000, down from $172,128,000 in the prior year[147]. Strategic Initiatives - The company plans to invest in strategic technologies such as hybrid cloud, security, data analytics, AI, and hyperscale infrastructure to enhance its service offerings[108]. - The merger with Tech Data Corporation was completed for a total consideration of $1.6 billion in cash and approximately $5.6 billion in SYNNEX stock, aimed at expanding capabilities and market reach[110]. - The company is focused on expanding its global footprint and enhancing operational excellence across its businesses[108]. - The strategic focus includes strengthening the end-to-end portfolio of products and services, including technology-as-a-service and recurring revenue models[108]. Cost and Expenses - Selling, general and administrative expenses increased by 3.1% to $692,485, representing 4.77% of revenue, slightly down from 4.81%[126]. - Operating income decreased by 28.1% to $24,845,000 from $34,565,000 year-over-year, primarily due to a decrease in strategic technologies gross margins[139]. - Non-GAAP operating income also decreased by 25.6% to $27,108,000 from $36,441,000[139]. - Interest expense and finance charges increased by 15.8% to $87,880,000 compared to $75,891,000 in the prior year[141]. - Provision for income taxes decreased by 8.4% to $47,346,000 from $51,669,000, reflecting lower income and a slightly lower effective tax rate[145]. Revenue Breakdown - Revenue in constant currency increased by $840.2 million, driven by growth in Endpoint Solutions and Advanced Solutions portfolios, partially offset by a negative impact of approximately $490 million due to changes in product mix[119]. - Americas revenue increased by $486.2 million to $8,389,338, with a constant currency increase of $552.5 million, despite a negative impact of approximately $150 million from product mix changes[120]. - Europe revenue increased by $20.5 million to $5,137,765, with a constant currency increase of $219.2 million, negatively impacted by approximately $200 million from product mix changes[121]. - APJ revenue increased by $49.7 million to $1,004,604, with a constant currency increase of $68.5 million, negatively impacted by approximately $130 million from product mix changes[122]. Cash Flow and Financing - Net cash used in operating activities was $748.0 million, a significant decrease from net cash provided of $384.7 million in the prior year[153]. - Net cash provided by financing activities was $288.6 million, compared to net cash used of $311.2 million in the prior year, driven by increased short-term borrowings[155]. - The company entered into a $750.0 million Term Loan Credit Agreement, maturing on September 1, 2027, to repay a portion of the TD SYNNEX Term Loan[161]. - As of February 28, 2025, the company had total outstanding borrowings of approximately $4.3 billion, including Senior Notes of $2.4 billion and term loans of approximately $1.3 billion[164]. - The company had $1.3 billion of trade accounts receivable sold to financial institutions under purchase agreements as of February 28, 2025, with discount fees totaling $12.0 million for the three months ended February 28, 2025[165]. - A new $2.0 billion share repurchase program was authorized in March 2024, supplementing the previous $1.0 billion program, with $1.7 billion available for future repurchases as of February 28, 2025[166]. - The company repurchased 0.7 million shares for $100.5 million in the three months ended February 28, 2025, compared to 2.0 million shares for $199.2 million during the same period in 2024[166]. - As of February 28, 2025, the company had a borrowing capacity of approximately $566.0 million, with $201.0 million outstanding at a weighted average interest rate of 5.78%[162]. Compliance and Risk Management - As of February 28, 2025, the company was in compliance with all material financial covenants related to its credit facilities[167]. - The company has historically renewed its accounts receivable securitization program and parent company credit facilities prior to expiration, maintaining good credit standing[163]. - There were no material changes to the company's critical accounting policies and estimates during the three months ended February 28, 2025[168]. - No material changes in market risks have occurred since November 30, 2024, as disclosed in the company's Annual Report[170].