TD SYNNEX (US:SNX)2026-01-08 15:02Financial Data and Key Metrics Changes - For the full year, the business excluding Hive saw gross billings increase in the high single digits year over year, with improvements in both gross margin and operating margin [5] - In Q4, non-GAAP gross billings reached $24.3 billion, a 15% increase year over year, or 13% in constant currency, while non-GAAP diluted earnings per share rose 24% year over year to $3.83, setting new records for the company [5][6] - Net revenue for Q4 was $17.4 billion, up 10% year over year, with gross profit increasing 15% to $1.2 billion [17] Business Line Data and Key Metrics Changes - The Endpoint Solutions portfolio increased gross billings by 12% year over year, driven by demand for PCs due to the Windows 11 refresh [15] - The Advanced Solutions portfolio saw a 17% increase in gross billings year over year, with Hive contributing over 50% growth primarily from server and networking rack builds [16] - Hive's operating income also grew significantly year over year, becoming a larger portion of the overall mix [6] Market Data and Key Metrics Changes - North America experienced steady growth supported by demand across key customer segments and increased security requirements [7] - Europe outperformed expectations with growth driven by infrastructure software and PC device upgrades, despite a slow macroeconomic backdrop [7] - Asia-Pacific and Japan remained key growth engines, driven by rapid cloud expansion and strong demand from digitizing economies [7] Company Strategy and Development Direction - The company is focusing on four strategic pillars: omnichannel engagement, specialized go-to-market, best-in-class enablement, and expanding brand visibility [8][13] - Investments in the Partner-First Digital Bridge and AI capabilities are aimed at enhancing customer engagement and simplifying transactions [8] - The company aims to strengthen its competitive position as a strategic business partner, focusing on sustainable long-term growth [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value proposition of Hive and IT distribution, highlighting substantial untapped market opportunities [14] - The company anticipates continued growth in the PC market, driven by ongoing refresh cycles and AI compatibility [62] - Management remains focused on generating sustainable free cash flow and improving return on invested capital [22][24] Other Important Information - Free cash flow for FY25 was $1.4 billion, marking the third consecutive year of over $1 billion in free cash flow [19] - The company returned $742 million to shareholders over the fiscal year, representing approximately 61% of free cash flow [20] - The board approved a cash dividend of $0.48 per common share, payable on January 30, 2026 [22] Q&A Session Summary Question: Growth in Europe and Asia-Pacific - Management noted that growth in Asia-Pacific is driven by significant market share gains and investments in high-growth segments, particularly in India [27][28] - In Europe, the company is gaining market share by targeting technologies and customer segments that offer higher growth than the market average [30] Question: Impact of Component Costs on Demand - Management confirmed that while memory prices have increased, they have not seen demand destruction, and guidance reflects a bottom-up assessment from regions [34][37] Question: Visibility for Hyve Programs - Management expressed confidence in the margin profile of Hyve and noted ongoing investments to expand capabilities and capacity [51][60] Question: Net Revenue Conversion Dynamics - Management explained that the increase in gross-to-net adjustments is influenced by a higher mix of software and certain Hive programs, which are netted [70][71]