TD SYNNEX improves profitability on middling revenue as Patrick Zammit prepares to take the reins

CEO Rich Hume said he was optimistic about market conditions as distie reported a one per cent decrease in revenue

Distributor TD SYNNEX reported revenue of $13.9bn, within its projected outlook of $13.3bn - $14.9bn, despite a slight 0.8 per cent decrease from the same quarter last year.

Outgoing CEO Rich Hume, who recently named COO Patrick Zammit as his successor, expressed optimism about the improving market: "We continued to see an improving IT spending environment, with a return to year-over-year gross billings growth driven by strength in our core business across both Endpoint and Advanced Solutions and mid-teens growth in Strategic Technologies."

Non-GAAP gross billings reached $19.3bn, marking a 3.1 per cent increase from the same quarter last year.

This growth was particularly notable given the challenging comparison to the previous year's strong performance.

The company's profitability showed significant improvement.

Gross margin rose to 6.98 per cent, up 13 basis points from Q2 FY23. Net income increased by 7.9 per cent to $144m, while diluted earnings per share (EPS) grew 17.7 per cent to $1.66.

TD SYNNEX repurchased $254m in shares and paid $34m in dividends, representing a substantial 210 per cent increase from the prior year's second quarter. Additionally, the board approved a 14 per cent increase in the quarterly cash dividend to $0.40 per common share.

Regional performance varied.

The Americas and Europe segments experienced slight revenue declines of 1.6 per cent and 0.8 per cent respectively, primarily due to changes in revenue presentation.

However, the Asia-Pacific and Japan region saw robust growth, with revenue increasing by 6.9 per cent (11.0 per cent on a constant currency basis).

A standout performer was the company's strategic technologies segment, which includes Hyve. This area experienced strong growth due to new business expansion, although it temporarily impacted cash flow due to increased working capital requirements.

Looking ahead, TD SYNNEX said it remains confident in its growth prospects for the second half of the fiscal year.

Hume added: "We have returned over $500m to shareholders this fiscal year and remain confident in our growth prospects for the second half amidst a recovering market backdrop."

Hume is set retire as TD SYNNEX CEO on 1 September 2024, with COO Patrick Zammit lined up to take the top job.