TD SYNNEX (US:SNX)2026-04-02 20:01Financial Performance - For the three months ended February 28, 2026, the gross profit margin increased to 7.30% from 6.87% in the same period of 2025[122]. - Operating income rose to 2.85% of revenue, up from 2.10% year-over-year[122]. - Net income for the quarter was 1.90%, compared to 1.15% in the prior year[122]. - Consolidated revenue increased by $2.6 billion to $17.16 billion, representing an 18.1% growth compared to the previous year[133]. - Revenue in constant currency rose by $1.9 billion to $16.45 billion, reflecting a 13.2% increase year-over-year[133]. - Americas distribution revenue grew by $702.9 million to $7.77 billion, a 9.9% increase, driven by Advanced and Endpoint Solutions[134]. - Europe distribution revenue surged by $1.3 billion to $6.24 billion, a 25.8% increase, supported by favorable currency impacts[135]. - APJ distribution revenue increased by $229.2 million to $999.6 million, a 29.8% rise, attributed to growth in Endpoint and Advanced Solutions[136]. - Hyve Solutions revenue rose by $418.4 million to $2.15 billion, a 24.2% increase, driven by manufacturing and assembly sales[137]. - Gross profit increased by $254.1 million to $1.25 billion, a 25.5% growth, with a gross margin of 7.30%[138]. - Operating income rose by $184.9 million to $489.4 million, a 60.7% increase, with an operating margin of 2.85%[146]. - Non-GAAP operating income increased by $190.8 million to $589.6 million, a 47.8% growth, with a non-GAAP operating margin of 3.44%[146]. - Revenue for the three months ended February 28, 2026, was $2,150,996, representing a 24.2% increase from $1,732,557 in the same period of 2025[155]. - Operating income increased by 65.6% to $155,474 compared to $93,857 in the prior year, driven by strong growth in manufacturing and assembly sales[156]. - Non-GAAP operating income rose by 66.0% to $158,926 from $95,756, with operating margin improving to 7.23% from 5.42%[155][157]. Expenses and Financial Obligations - SG&A expenses increased by $69.2 million to $762.8 million, a 10.0% rise, but as a percentage of gross profit decreased to 60.9%[142]. - Interest expense and finance charges decreased slightly by 1.5% to $86,534, with a percentage of revenue at 0.50% compared to 0.60% in the previous year[158][159]. - Provision for income taxes increased by 101.7% to $95,493, reflecting higher income and a slightly higher effective tax rate of 22.61%[163][164]. - Total outstanding borrowings amounted to approximately $4.7 billion as of February 28, 2026, compared to $4.6 billion as of November 30, 2025[182]. - The weighted average interest rate on outstanding borrowings was 5.98% as of February 28, 2026, compared to 5.72% as of November 30, 2025[182]. - Obligations under Supplier Finance Programs were $3.4 billion as of February 28, 2026, down from $3.7 billion as of November 30, 2025[184]. Cash Flow and Liquidity - Net cash used in operating activities rose to $895.9 million from $748.0 million, mainly due to increased inventory and accounts receivable[172]. - Cash and cash equivalents decreased to $1.6 billion from $2.4 billion as of November 30, 2025, indicating a reduction in liquidity[176]. - The company had $2.0 billion of trade accounts receivable sold to financial institutions under purchase agreements as of February 28, 2026, up from $1.8 billion as of November 30, 2025[183]. - Discount fees for accounts receivable purchase programs totaled $20.8 million for the three months ended February 28, 2026, compared to $12.0 million for the same period in 2025[183]. Shareholder Actions - The company repurchased 512 thousand shares of common stock for $79.7 million in the three months ended February 28, 2026, compared to 707 thousand shares for $100.5 million in the same period of 2025[185]. - As of February 28, 2026, the company had $1.1 billion available for future share repurchases[185]. Strategic Initiatives - The company aims to expand its portfolio in both mature and developing markets through a targeted go-to-market strategy[119]. - The company actively seeks strategic acquisitions to enhance capabilities and expand geographic footprint[121]. - The company plans to expand operations through investments or acquisitions, which will be funded by existing cash, borrowings, or securities issuance[171]. Market Conditions - Economic conditions such as inflation and elevated interest rates may impact demand for IT products and overall business activity[120]. Accounting and Compliance - Non-GAAP operating income excludes costs related to acquisitions, integration, and restructuring, providing a clearer view of operational performance[125]. - The company was in compliance with all material financial covenants as of February 28, 2026[186]. - There were no material changes to critical accounting policies during the three months ended February 28, 2026[187]. - No material changes in market risks have occurred since November 30, 2025[189].