Q2 2026 TD Synnex Corp Earnings Call Transcript
Key Points
- TD Synnex Corp (SNX) delivered a record quarter with non-GAAP gross billings of $28.9 billion, a 33% increase year-over-year.
- The company experienced broad-based strength across both Distribution and Hyve, with Distribution non-GAAP gross billings up 22% year-over-year.
- Hyve's non-GAAP gross billings increased by 117% year-over-year, driven by new programs with existing customers.
- TD Synnex Corp (SNX) has secured programs with all five US-based hyperscalers, indicating strong strategic partnerships.
- The company is expanding its manufacturing facilities by more than 1 million square feet to support future growth and customer needs.
- Rising component costs and supply constraints pose challenges, potentially impacting future demand and growth.
- The company experienced negative free cash flow of approximately $330 million due to accelerated growth in Hyve.
- Inventory levels increased by 30% sequentially, raising concerns about working capital management.
- There is potential risk of demand destruction due to component cost increases, particularly in the PC segment.
- The company faces geopolitical uncertainties and complexities in the macro environment, which could affect future performance.
Good morning. My name is Tracy, and I will be your conference operator today. I'd like to welcome everyone to the TD SYNNEX second quarter fiscal 2026 earnings call. Today's call is being recorded. (Operator Instructions) At this time, for opening remarks, I would like to pass the call over to Nate Friedel, Head of Investor Relations at TD SYNNEX. Nate, you may begin.
Good morning, everyone, and welcome to TD SYNNEX's Fiscal 2026 second quarter earnings call. Joining me on today's call are Chief Executive Officer, Patrick Zammit; and Chief Financial Officer, David Jordan. Before we continue, let me remind you that today's discussion contains forward-looking statements within the meaning of the federal securities laws, including predictions, estimates, projections or other statements about future events, including statements about our strategy, demand, plans and positioning, growth, cash flow, capital allocation and stockholder return as well as our financial expectations for future fiscal periods.
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