TD SYNNEX Corporation Q2 FY2025 earnings call

• Strategic imperatives: Unifying reach, targeting new customers, distribution market expansion, diversifying offerings, and accelerating on services. • Honors: Received over 40 channel honors including HPE Global Distribution Partner of the Year, NVIDIA's Americas Distributor of the Year, etc. • Partnership: Developed integrated automated operational model for a customer to drive efficiencies. • Services: Engaged with a leading advanced solutions OEM in building data center and AI infrastructure solutions, certified to build solutions for direct and indirect channels to improve time to cash.

In Q2, Endpoint Solutions portfolio grew gross billings 13% year over year, driven by the ongoing PC refresh cycle. Advanced Solutions portfolio grew gross billings 12% year over year, 10% year over year when excluding the impact of Hive, with Hive growing gross billings in the high teens. Software experienced 20% billings growth fueled by cloud cybersecurity and infrastructure software. PCs were driven by the refresh cycle, and networking saw growth after multiple weak quarters. Endpoint Solutions contributed through PC growth, Advanced Solutions via data center and high-growth tech, Software through cloud and security, etc. Revenue contribution percentages weren't explicitly stated but regions and technologies all contributed to growth.

• Third quarter non-GAAP gross billings expected in range of $21 billion to $22 billion, representing growth of approximately 6% at the midpoint. • Net revenue expected in range of $14.7 billion to $15.5 billion. • Non-GAAP net income expected in range of $227 million to $268 million, non-GAAP diluted earnings per share in range of $2.75 to $3.25 per diluted share. • Expect to execute approximately $105 million of share repurchases during the quarter. • Board approved cash dividend of $0.44 per common share payable on July 25, 2025.

• Macro economic uncertainty. • Global trade developments. • Tariff impacts. • Middle East situation posing potential risks to demand and operations.

Q: Color on demand pull forward, particularly on PCs and ES/AS mix?

A: Patrick and Marshall discuss that there was a pull forward of ~$100 million to $200 million in sales, with PCs benefiting, and expect the impact on margins was around $10 million incremental to the quarter, and expect ES/AS mix to be equal in the second half.

Q: Q3 guidance and seasonality?

A: Marshall and Patrick talk about the pull forward impact, the cautious outlook due to macro uncertainty, public sector being strong but also considering the tough base in Q3 last year and macro factors, and the Analyst Day guidance for the second half.

Q: Detail on demand linear in the quarter, from April into May and June?

A: Marshall says within the quarter, saw strength in March and April (mid teens growth), softened a bit in May but still good, and June is in line with guidance; Patrick adds software, public cloud, security, PCs, networking are strong with positive regional trends.

Q: Improvement in Hive issues (demand shortfall and inventory/working capital)?

A: Marshall states Hive had strong quarters, demand shortfall was muted, and working capital improvement was driven by Hive, expecting it to unwind throughout the year.

Q: Detail on Hive billings, margin mix, and orders?

A: Patrick and Marshall discuss Hive's strong billings in the high teens, margin mix lower due to FX and program mix, and orders for the ramping customer are back though slightly below expectation, with margins expected to improve in Q3.

Q: Tariff regime assumption?

A: Marshall says there's still uncertainty with tariffs, difficult to forecast impact on July 9 and beyond.

Q: PC refresh cycle stage?

A: Patrick states they are in the middle of the PC refresh cycle.

Q: Margin improvement in ES business and sustainability?

A: Marshall and Patrick discuss increased demand, stronger pricing environment, mix of products (PCs and components with better margins) contributing to margin improvement, with sustainability expected though some temporary aspects.

Q: APJ strength and sustainability?

A: Patrick says APJ had strong quarter with India and Japan contributing, and they have an aggressive growth plan focused on margin reach customer and product segments, expecting solid growth.

Q: Distinction between ODM/CM growth and Hive growth, and work with hyperscalers?

A: Marshall explains the difference in growth rates, Patrick discusses working with hyperscalers on data center and AI solutions, and margin improvement from moving up the value chain; also mentions networking improvement with Hive contributing.