TD SYNNEX Corp. Q1 FY2025 earnings call

• Strong momentum in Q1 with gross billings growth across regions and technologies. - Hive faced temporary softness but expected to normalize. - End-to-end strategy, global reach, and specialist go-to-market approach enabled growth ahead of the market. - Launched Digital Bridge Microsoft Teams app and PACE platform, gaining traction. - Named distribution partner of the year for multiple industry leaders.

Gross billings grew by 7.5% year over year in Q1, reaching $20.7 billion, with 9.5% growth in constant currency. Advanced Solutions grew by 7% year over year, reflecting demand for integrated IT solutions. Endpoint Solutions grew by 8% year over year, driven by PCs and mobile. Hive was below expectations due to component shipment delays to Q2 and demand shortfalls. Latin America and APJ grew double digits in constant currency. Net revenue was $14.5 billion, up 4% year over year. Gross profit was $1 billion, 4.82% of gross billings, with a 40 basis point year-over-year decline primarily due to Hive.

• Second quarter gross billings expected to be in the range of $19.7 to $20.7 billion (midpoint +5% growth). Net revenue range $13.9 to $14.7 billion. Non-GAAP net income range $205 million to $247 million, diluted EPS $2.45 to $2.95. - Fiscal 2025 committed to mid-single-digit gross billings growth and $1.1 billion free cash flow. - Investor Day scheduled for April 10th in New York City.

• Hive facing component shipment delays and demand shortfalls lasting a few quarters. - Macroeconomic uncertainties including impact of tariffs on business operations.

Q: Dig in on Hive, component shortages and demand backdrop A: Patrick mentioned a large business shipment delayed to Q2, temporary demand pause, but expected to normalize. Marshall added about a customer demand pause and commitment to skilled resources.

Q: Pull-in or pre-buying to avoid tariffs, Q3/Q4 billings growth, billings to revenue reduction A: Patrick said limited impact on PC growth, Marshall noted mid-single-digit growth expected, and gross to net adjustment around 29%.

Q: Price increases from vendors, impact on demand A: Patrick said some vendors have price increases, limited so far, and will pass through if accelerated.

Q: Quantify Hive issue, cash flow, capital allocation A: Marshall talked about portfolio mix and labor commitments, cash flow usage due to inventory and payables, expecting recovery.

Q: Broader geographic exposure, Europe dynamic, operating expense efficiency A: Patrick discussed global reach and share gains, Marshall on SG&A efficiency, Europe mix impact.

Q: Peripherals performance A: Patrick said printing market challenged, loss of a large unprofitable business, focusing on SMB for higher margins.