SNX - Earnings call transcript Q3 2019

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Operator

Good afternoon. My name is Shantel and I will be your conference operator today. I would like to welcome everyone to the SYNNEX Third Quarter Fiscal 2019 Earnings Call. Today’s call is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

opening to would Ms. for the to time over call this remarks, like I pass At Mary Head Lai, of Investor Relations. Miss, begin. you may

Mary Lai

good the to the fiscal afternoon. earnings you, XXXX. for of third SYNNEX call quarter Thank Corporation Welcome

question-and-answer me we Dennis President are call will and Caldwell, open and financial After Concentrix. a CFO; Polk, President Witt, the today of to session. Marshall their Joining our Chris results review CEO; prepared to remarks,

the meaning discussion in projections Before mentioned within filed results in Form We we those future in to from contains everyone Form Statements with company’s laws. these forward-looking Actual today��s result we as or do the in differ financial forward-looking projected about and XX-K estimates, statements filings the intend begin, a forward-looking of section include remind that earnings discussed statements events, and predictions, X-K securities including the materially today’s of may we of results. SEC. federal not risk statements uncertainties statements. the any other factors and important our any other release, update risks

Also IR non-GAAP recorded GAAP X-K This is rebroadcasted during non-GAAP in reference will be or property and and included release earnings conference section the without of and of our the press our available not reporting is Reconciliation information. under this Form we our Corporation may financial call, of certain website. permission. SYNNEX

our call to the will CFO the now, And turn Marshall? over financial for I update.

Marshall Witt

all joining Thank you, us today. Mary, and for thank you

record not XX% last the $X.X total our significant quarter revenue bottom top year. in non-GAAP of and line on all-time our exceeded EPS a consolidated income or diluted same line. FX basis, net On Our GAAP an up billion expectations. did impact compared billion, $X.X and have QX revenue to all was a

was Concentrix prior in the segment in the quarter XXX% $X delivered flat versus to year due billion quarter. $X.X an last revenue level $XXX over in $X.X Technology its and XXXX. Convergys prior XX% the billion, million just quarter, the of billion, completed Solutions revenue essentially ever October primarily of highest acquisition increase up compared At from to

pro revenue almost grew currency forma a On X%. constant basis

Our consolidated of versus prior was $XXX XXX an the gross improvement or year up million margin a million, gross basis totaled just points XX% ago, and dollars XX%, year profit $XXX shy of quarter. from

points growth year Several factors the X% most margin Solutions positive XX.X% of and quarter. acquisition prior gross prior from Solutions. margin basis basis Technology Convergys the dollars gross our revenue from the profit notably margin XX Concentrix contributed year in to gross contribution from and overall increase, the quarter. was Technology XX increased strong points down

to was revenue, and expense dollars million acquisition. in year compared The up a up or increase million percentage in the as of SG&A $XXX adjusted revenue XXX attributed quarter. $XXX ago absolute was SG&A X% Convergys mainly points the basis Total of to

prior consolidated The X.X% up basis the year operating company's quarter in period. non-GAAP ever million operating Non-GAAP $XXX at was third or year-over-year. margin income point expansion $XXX million, highest the of XXX XX% of a level from came

grew in a record million, X%, was At operating Solutions XX the as the or $XXX leverage was business. points up up Technology operating income quarter segment basis level the Adjusted margin year the prior achieved a operating compared non-GAAP quarter. XX% ago. million over $XX to We significant we of year

the prior from million quarter increase Convergys due was or up XXX was operating margin $XXX absolute was primarily both For profit year operating and $XX year-over-year. points in XXX% the million, XX.X%, basis the dollars The period. in Concentrix, margin income non-GAAP up dollars to acquisition. Adjusted

X.X borrowings The with fund finance million and and ratio leverage the quarter. up quarter, Solutions quarter. from quarter due in growth times year-over-year improvements was X.X in Technology to the expect [year] next in from the We came expense in this our acquisition our prior to debt charges improved Convergys and line EBITDA to prior times business. interest our $XX million, [ph] total and adjusted further guidance approximately to increase net quarter was Third $XX

a Due ratio, interest leverage to approximately expected QX. points is decline in basis lower to our rate XX

remain effective primarily third quarterly For The liquidity the The XXXX, related compared [Later changed ago. from the quarter to the be we expect fiscal $XX of fourth XX%, quarter tax act. of tax and tax rate in million. a the total U.S. to rate approximately was approximately is fixing to X% a year while financial reform standpoint our our interest expense net charges positioned XX%] Company by variable to We debt. XX% decrease for the well

anticipate fourth contributions quarter prior Non-GAAP we $XX approximately XXXX, the solid of XX%. the or up tax both be to XX% $XXX from fiscal net million, the effective year reflecting income rate million was period, segments. from For

same period a third was XX% ago. or diluted Our $X.XX quarter non-GAAP year the $X.XX, EPS over up

receivable sheet, $X.X XX, accounts inventories $X.X to totaled the August turning our totaled and on Now balance billion XXXX. billion

and to the days cycle to The and Our for seasonal down DIO over in primarily increase the prior XX quarter year was period. cash conversion expected up days was the four last quarter compared prior in days, timing. due third increase four compared QX to

million. from quarter flow cash million third came $XXX our Preliminary in for generated cash strong at and the $XXX approximately free operations was

to have down throughout goal year we of pay in our $XXX consistently this we As QX. total in million paid stated borrowings debt down

between target of QX, and generate and debt approximately expect total we available liquidity the fiscal billion approximately to positive fund SYNNEX our are credit cash XXXX. had $X.X in in our by flow $XXX to cash forward million in committed growth. we to facilities, of end reducing QX Moving At

of follows. ROIC quarter adjusted ROIC. million, for and million, and Depreciation trailing third are was four expense amortization $XX the the $XX expense metrics X.X% as quarters Other was million, financial approximately capital note quarter XX.X% data for was $XX expenditure was for

XX, to cash quarterly per of XXXX the close approved stockholders share of XX, As regular described business of to XXXX. as Board $X.XXX of record October the release, dividend a common in our October on on paid press Directors of be

million be moving billion to XXXX quarter net range in the Now revenue diluted of fourth to million. $X.XX be $XXX the to of expected expect $X.XX based in Non-GAAP to on weighted Non-GAAP XX.X expected share per range range to $X.XX we be is EPS income shares diluted billion. of the to our $X.XX is million. $XXX.X in of approximately to average fiscal outlook, outstanding

XXXX million non-GAAP guidance differ or Non-GAAP actual of acquisition amortization our after-tax of are forward-looking and that these diluted net EPS income integration note materially. per fiscal and results Please related and cost $X.XX to statements approximately expenses. share fourth of and may $XX intangibles the exclude related expectations quarter

turn I’ll Dennis to call the Now, over

Dennis Polk

Thank you, our call Marshall. And thanks to everyone for joining today.

delivered quarter team another profits record Our both in QX. revenue and in

generate billion line delivered highest top and ever Our a XX% income. our revenue growth profit dollars, gross net we and of year-over-year, dollars operating $X.X profit

increase both acquisition last Convergys and growth came from from October. organic Our the strong revenue

results but and resulting Our financial and business validates entrepreneurial at We operating at performance and company in our success. core used QX. philosophies. Entrepreneurial a entrepreneurial to size, when is key for not core is our the a our describing QX often is model our term we an values did differentiated and like use delivering culture term companies is spirit further testament often to our

customers. in to drive and deliberate We systems, have associates, investing our partners very relationships growth, taken steps and our with

direct in as of each have investments from sit today, by our deeper we made. we've a best-in-class model richer our strategic as our and and engagement we result segments, organic a the well business As execution teams, acquisitions

in And strides continue our integration Regarding on Convergys. right to make of segments, our great target. specific our we Concentrix business performed efforts

Concentrix our I over to would outlook, results the QX like now to to discuss Chris? QX turn Chris, and call

Chris Caldwell

Dennis. begin margin important of constant in in delivered expansion. quarter, We made over in Thanks, progress our integration related the our to the currency margin, in into quarter continuing efforts year-over-year results the even like-for-like adjusted to ramp growth point the seasonal as synergies revenue and the contributed -- invest fourth Concentrix solid XXX in third trend our operating and quarter. basis expansion we

approximately billion, causing X.X%, Concentrix were revenue like-for-like fluctuations this reported with totaled over on constant $X.XX basis. measure. currency On approximately a an up headwind for just on X% increase revenues currency of XXX% quarter a basis, Third a

business breadth are the business We had new in pipeline and included capabilities signings our the our of wins. new strong geographies strength quarter a verticals, and of by of and encouraged

also represents forward. healthier an this have portfolio to our our growth well of us impact on Year-over-year, balance strategy rebalance going very telecom a rate, XX%. We of our our gives executed with business slightly X% below now revenues but to

portfolio our million Adjusted containment million, offerings, improved efforts from in the quarter was up improve up margin and efforts are Adjusted $XX year-ago profile progress profit year. strong to The on continuing from X.X% integration period. was for the footprints of the result synergies, last profit XX.X%, operating clients. operating of margins income cost and the $XXX of

an exited synergies target run our approximately ahead annual XXXX, achieve the year the a rate year run our of and front, million rate synergy ahead transaction at million, full $XXX of On million, more of the we for at will believe $XX fiscal we of end than well quarter one $XXX of schedule.

and quarter the of through finished data which majority approximately our the consolidation tools $X continue happen centers common million facilities as this progress is to HR what for to integrated as expenses results we related The of integration finance we meaningful reflect GAAP Our migrating the of set in remains of XXXX. made systems quarter. one and will

transaction and $XX be We integration to approximately the including we continue on approximately will spend million total spend million, already last year. expect $XXX

flow resulted the expansion investment of approximately strategy and Cash margin quarter disciplined totaled from another quarter in operations Our flows generation. $XXX million. in strong cash

expenditures Additionally, this capital quarter. $XX on we spent million

in fourth moderate the increase spending We a expect capital during quarter.

to approximate revenue. business on this basis. should X% Capital long-term We believe in continue of that spending a unit

with Turning we revenue profitability seasonal sequential a and of consistent ramp in business. to our meaningful pattern expect QX, the

our our continue the all we as done margin to profitable rebalance successfully across year, services still portfolio on driving coming last will have focusing for verticals higher growth. on quarters We while

our working thank like would exceed has to members helped Concentrix ahead the integration are clients I of conclude, for our I schedule. and achieve all team need our who us the to milestones As

confidence dedication continued conjunction our capability set broad work give team's hard in Our success. in with the and me

Back Dennis. you, to

Dennis Polk

Chris. Thanks,

our Solutions on within $X revenue an this TS. in our represented geos billion segment and to across Moving record TS business, was Technology unit sub-business QX. achievement of our to achieved well all-time Contribution

shipment growth our projects year-over-year and Assisting prior of integration in quarters. several we was won sizable the rollouts

over and portion significant ship would projects larger transacted QX these that QX, were was a but in expectations QX. Our

to no that as exceptional grew well. business for While the our only by market as the than performance, distribution quarter, faster core means was our reason a our benefit

solid does solutions. areas growth strength but achieved TS we were contributing had in period. and of related a leverage, PCs, the standpoint, layer From rapid our came continue SMB seasonal meet as product cloud more and we a in Major customer software significant and record operating to With networking capability our a to of the SLED very we growth saw non-GAAP when quarter bar X.XX%, on margins show platform, a high business. to QX our

quarter the Turning final outlook, is fourth historically and three we to QX the are year shape quarter strongest entering of in our XXXX. of solid months our

seasonal expect a result as returns. as significant our forward, business Chris strong Looking have QX Concentrix and and to noted, we leverage a drive

we seasonality For expect Technology normal QX. Solutions, for

be to bit due primarily sequential noted growth Our may versus but QX than line more a top muted other in the factors. revenue success any prior years,

to believe Similar in macro and adeptly marketplaces. to environment, large our in quarter, adjust to we change are are that we the well-positioned we while other there acknowledge last current challenges any

our continue strategic will Our to opportunities and grow will and to deep innovative new From relationships partners these strategy. our commitment with relationships to we generate continue and and to to business. have our customers be paramount foster been

my up want work by for and amount wrap thank The the comments, their the tremendous world. around today our To all partners to of business dedicated I shareholders support. entire trust our and team. thank of also results I are hard want continued from a associates to

questions. open to With for like that, call I'd up the

Operator

[Operator first Raymond comes Tindle James. question from Adam with instructions] Your

Your is line open.

Adam Tindle

and acquisition it thanks good grew relining combined wanted afternoon. business acquired acquired in start Convergys before it declining XXXX. that while QX back Okay, for you I the quarter revenue now to Concentrix, the in the I on XXXX, just you and to a think business revenue in was grown and each little I of think has flat was and when fiscal quarter

trend that So business. just of the want sustainability combined to touch on the for

anything not stand at talked exiting are beyond of like QX growth market we why still about reasons forward? of growth think would contracts as rates, you QX, rate moving that or You’ve XXXX does callouts that there and sustain that exiting market

Chris Caldwell

Hi, Adam, it’s Chris.

it stabilize see correct things, track around of very it. grow to the So and business solid of couple we're had able declining growing the of Convergys And record to start do for years businesses declining sort sustainable, combined we've we business of mean, about the us was you're to the prior have We doing as business. and turning in been acquisition. I that's a what and three

terms set, expect equally to And in XXXX been that, portfolio more sure aggressive to have headwinds, the through produced equally We indicated geographies, equally more it's make some this around capability kind around to that balanced of acquisition going we balanced we in business. as and overcome around but continue verticals. has of our balanced rebalancing grow some

drive growth. belief look And of growth we weren't already we're that focused sustainable the our some to driving is to underlying sort in continue exiting if of still of on the business, the rationalizing at do and doing terms we you are rates, if on and that that, portfolio, that we

Adam Tindle

non-GAAP I this as kind rate. was Concentrix $XX And of run $XX public year generated ago Okay, a that's about up and in you on $XXX XXXX, are on about standalone $XX of Concentrix million one the million talked which income, million, operating synergies over quarter, it million build company, in Convergys QX just was a helpful. as think another about you

that flat So, you just that cost keep both to you that would million of kind of QX. and get synergies in $XXX kind add-in reported you businesses

operating doesn't that maybe profit that long a could that dollars on point it on guess, operating just the you more be growing of business if growing path I touch the analysis cost might in look synergies. outside skeptic acquisition the out So just of to maybe and forward? saying missing could dollars touch way broadly like profit what are maybe and moving in

Chris Caldwell

we've programs Adam, new and of is the of that you're we've new that it's in duplication not not the up what really apples-to-apples, investing won have because the sort to we underlying in start start in in, that’s seeing capabilities synergies that new expansion. to of us underlying we're sort ramp driven of you'll harvest, margin we of into new expansion programs, margin front the business, the forward opportunities that go as Because as XXXX. that see investments outside

thought bit reality when We invest year income or drives we is have is better heavily, we're double-digit business over I that getting to of skepticism, op time. the sort guess a ago the XX same that is, a or very but

our business. And possibilities so we to continue see expansion good margin in

Adam Tindle

in is was quarter for strong, past the point. cash fair the flow, weak on Maybe was TS Marshall typically cycle like drag it flow. about there's quarter just cash clarification seasonally could years generation quarter? looks a mid-XXs, the in one Very few years. over And on to in which it cash talk a to Can room last growth it positive and this you very continue days that is back is come typically possible, the you cash inventory down, just like get past? the some

Marshall Witt

then seeing to cloud or TS. expect to performance. as quarter equal QX, And in does yes. The the my think you’d solid segments cycle absolute remarks of yes, us and Adam, we're pleased versus both we'd see cash going growth that still away, flow for prepared what Yes, little Convergys if I a peel in And low-XXs is, short what answer that contribution expect you takeaway and Concentrix is that's see another forward. for conversion in we and bit cash is were net

Adam Tindle

very you much. Thank

Marshall Witt

Thank you.

Operator

Loop with from Capital. comes question Ananda Baruah next Your

line Your is open.

Ananda Baruah

I'm Hey, traveling, taking mute between. the Apologize background for I’ll appreciate on question. in the you guys it noise, put

have ship but so Just with the next for and tie are any a healthy for have so you which quarter Thanks. you the as together well. won remarks Can Can you revenue wins then have there? well. new more the bit of Dennis large that [anticipated] this what some little quarter if they you higher big And just I or follow about deal you as guidance couple guess could, [ph], quarter now do me a mentioned next may is been momentum I two. the talk up ramping I deals, will that

Dennis Polk

Dennis. Sure, is Ananda, this

are gave our just or So wins in expected as get market as background in QX, we the about project June. guidance how we back behind trying we talking some far the to to are

As out beat projects marketplace in in we continue few market. that expectations performance still the that our do about the But have the QX overall guidance, our roll to far QX. overall, QX is as a we’ll and just growth the in should

Ananda Baruah

That's maybe really in talked includes both about of the share helpful. for in actually to can Can year-to-date be in I you businesses, And And remarks the expectations, also then, deal one in both about Concentrix Convergys wins share original in that as you've share the of TS do of seeing gains one you're talk product I the believe material sort what larger also then you seeing of is had above have that. gains addition of next terms portfolio. even after made last with you've those past to question both Westcon-Comstor that of well, the forward? businesses? And you've going I the gains, sort then in now line. believe And think continue

Chris Caldwell

Ananda, Chris. it’s Hi,

So about Concentrix talk first. let's the business

improving In some terms gains driving the of profit what more and and sort those portfolio, our get the also clients. we growth get capabilities is as that's are margins share more share scale making gains, of across across of we

taking BPO by what their offset we automation, as Some tends of us out ecosystem, it. sort partners that is of and smaller of driving we're that to within the business but then are be Dennis? our is you're experiencing that business. what finding out automate being more partners And to

Dennis Polk

that. our basis day-to-day of that highlights partners tackling of of in focus the we larger and business the grow building do to side back and really But take day-to-day us about overall. Having successful relationships to allows on lot allowed we've vendor after going that's we to down us of a trying and been allowed it the basics the most, has to a the larger Ananda, that that. deals our over doing on to a share. comes collection talked year. kind And go couple customers blocking I'd win TS larger allowed increase us on to really giving a partners past tackling to us But platform, vendor share. Yes, a blocking of that's with And and

Ananda Baruah

And you Marshall. November helpful. times guys do the -- for then X.X is basically then you need hit forward? once unusual? to debt as Okay, your what long the to Or -- And -- achieve should quarter, achieve target it down great. that's get leverage last hit to as targets do pay that? for one looking for year, leverage next to we go the as Thanks. you And expectation you set execute To up then out be want you your the for past fiscal that, our anything

Marshall Witt

the Too freeze I’d pay improvement Ananda, that Yes, have at but say to early or to intent repeat playbook expect segments. stop we in that for continue this look the or QX, down of from to to QX, doesn't next progression end both year. we our balanced year, with at

expect us down the further got to leverage our benefit I is fact XXXX. even to going We to that be where rate point our As in interest now into that QX, mentioned, a

So expect specifics won't but contribution any next solid beyond cash give yet. year, that

Ananda Baruah

Fantastic.

guys. helpful. that's Okay, Thanks, very

Marshall Witt

you. Thank

Operator

question Stifel. Matt Sheerin comes with next Your from

open. is line Your

Matt Sheerin

and Thanks Yes. everyone. hello,

about or sequential meaningful another in clarification question Solutions, Chris growth the Just Concentrix. guidance Tech regarding talked had in

down So last would that those all that's to filled that but also you deals be know that big talked would about seasonality, high-single-digits you about mid talked Tech let's imply quarter. sequentially. say, I to Solutions

or So you would X% you up the back that in been if years, anywhere you could great. last to look because X So you've double-digits? XX be if clarify historically up clarify can from just that,

Marshall Witt

guide. in kind deals Yes, own of Matt, answered question we you are QX in your we conservative there. of Bigger how terms

sense we basis, expect compared I biggest is market. QX. QX. think look at in to that terms for But his where remarks, in year-over-year are what will that's of our probably our for believe we strong as we be a Dennis on Gross relative we still said mid-single-digits, which contributor the revenue in a still to outlook the

Matt Sheerin

So of will mid-single-digit fulfillment that area could because primarily PC year-over-year, in so of a terms those just rollouts be those little down that deals. sequentially. down the kind in still is of drill if you deals, bit And strengths,

we big You suppliers. with also had strength talked and from saw your double-digit growth competitor about in networking networking,

just in there's that Or So business. from also benefiting cross-selling relationships? you the momentum Westcon

Dennis Polk

we're one Matt, is last we’re integration. Yes. the into two the system North Dennis the this Westcon-Comstor to part year question your into of full acquisition American years

we're significant really networking from really a transaction. the big benefits this see part a that starting product business lot in Obviously, time. of for to and was be us networking a starting of to is So of cross-selling Westcon-Comstor at point tailwind

Matt Sheerin

on rollout the seeing? is are And that fulfillment then PC that Okay. PC you primary

Dennis Polk

when Our and as remarks was strong in I well. past the in PC my that prepared server, the to networking around mentioned product business comes it But and really was more quarter. rollout storage project as

Matt Sheerin

Intel or Okay. seeing concerns then and but round there? another of of shortages there of at in much concerns of years, top supply, actions been all shortages couple about any reports CPU there you about are these pretty components the all has lastly, any just various that last been on and you And

Dennis Polk

have challenges we're challenge our on as really it really shortages through and most are sell. execute based of there to assumptions we when concerned in when and for of type always we and continue. are Processor any continued on shortages we has will if QX it in QX well it but existed comes shortage projections the products as year shown that market, We can of the

Matt Sheerin

lot. a Thanks Okay.

Dennis Polk

Thanks.

Operator

Your next of with comes question Ruplu from Bhattacharya Bank America.

open. now is line Your

Ruplu Bhattacharya

my Hi, thank you for taking questions.

that across you cross-selling was geographies. benefits Convergys One would the of the for acquisition services

talk growing which you growth, seeing you're process verticals faster are in about verticals talk like that about far are maybe and along versus growth how stronger can slower? you which So

Chris Caldwell

Hi, Chris. it’s

the talked together. part the that our or right from ago majority I So came of about first we ago the now quarters one we acquisition writing that think other that two of take off, quarters are three deals or

not in we focused are we happening clients that of well right as new have benefit only bases footprint. with gains that's set very that that now because a we're share getting market client cross-selling net robust So as

that’s So higher our very the client of good value like the we're of kicking some in across Convergys traction, services seeing and overall some customer practices seeing some benefits. analytics of key that came We're voice base. some and across our good also already our very, and from acquisition,

we're seeing traction good So some perspective. that from

terms And our healthcare tend our break stronger encapsulates overall will in and of financial that some verticals relatively don’t which I strategic players just technology. them well. also space e-commerce say seen services, out, in we really consumer be vertical that than electronics, travel are growing that We’ve average, banking, faster well also to as also do

Ruplu Bhattacharya

Okay, thoughts can what that, us versus given M&A thanks details you is the if where for -- Marshal your you M&A with the for you, debt? maybe are cash buybacks then your Chris, appetite for that. you Maybe give can paydown on another this one more versus uses on integration maybe space? Convergys thanks for And of in a

Marshall Witt

on my We sides you that. the it I to know our years again in few that at to done else sides over and generally markets both type look color lens about consistent. in to we Turn in our stated approach Our we’ve liquidity. waiting and Dennis with remarks look as or Chris last pretty as deals and at both anything prepared continue and capital has the been opportunistic allocation view of our of same business regards with

Dennis Polk

to market as investment we're thing in the opportunistic, the same would on it’s are able right Marshall, and I if looking act be say we will the we always it.

Ruplu Bhattacharya

inventory to and for bit Even X% that inventory, being overall though guided for of a turns midpoint. revenue your the kind makes sequentially. think at was question the down Okay, outlook me. sense. respect one up With in is And last I inventory maybe little

should turns over over how next about free we about of couple think quarters? couple cash flow going inventory we next should So the quarters? And the forward of think how

Marshall Witt

and flow continued comments into end we slightly more accomplish of of to cash free move have around goal expect XXXX. August, makes to QX was of A pull the biggest a respectively. our year we or the you of by we reason at inventories May, million fairly total XX% down look on that up of see at the and towards XX%, November our So out look up specific were inventory, transit if for our flat you revenues couple lot the inventory end of the cash you debt that did in while had in free obviously that for whether paying $XXX flow, essence

about we So good feel that.

Again, the cash came it XX that if conversion DIO, at the in the quarter it earlier comments our my versus was made look around on days, you about for had cycle, impact days. in gross net six

that cycle going for around always back, look that which efficiency as pulled efficient more overall to forward. is And press we So never we always good again, XX, conversion we're to us. and be right I say, we're satisfied our with

Ruplu Bhattacharya

details, Great. Thanks the it. for all appreciate

Operator

comes question Cross with Cross Research. from next Your Shannon

open. Your line is

Shannon Cross

Thank much. you geographic. very just My is first

or I consumption geos? to saw strength, it I'm specific pretty but broad any based being Thank any talked think about on the anything increase the in of prior tax side pre buying you. you Japan you the TS if wondering

Dennis Polk

Dennis. it’s Hi, Shannon,

As them I in tax from action and overall, in market I at that put of consumption And kind categories. aspects our some, two or we the best and think on. to bottom expectations in Japan, some get going to the better yes. far a geos, line regardless other and that's as of tailwind But think Canada, then probably top Japan, it's from did we're performing right all regarding LatAm perspective. performed market,

So, non-U.S. performed geos expectations. to right

expectations. than the quite think IT basics I I we're of we part the is market earlier, solid what that of just constituents. others is in Part our performed our of is U.S. executing and chain. is building faster all geography that the talked U.S. especially business on with think, than Our relationships better which growing And the about well supply

Shannon Cross

to And this you of is to just maybe find? I the to to consumption that quarter, air term hate clarify a pressure not or tax, in in Japan, the does upcoming pocket use be appear sort prior been are but you may as anticipating fulfilled everything any,

Dennis Polk

be expect some tax the would in consumption would Japan. metrics reduction not material to I once overall in change enough our really there but passes,

Shannon Cross

then customers you. to of if specifically a -- again is what this And you in in of cloud of being just of you. thank sort Okay, change? of just areas figure out, been how Thank looking current I'm much any terms trying growth, trends and or talked are about has there continuation TS, for? software

Dennis Polk

than about we in again. Dennis, Not have the cost a usually a very makes investing is in efficient, ROI. once repeatedly investing I've frankly, businesses going that past That's Shannon our talked expect again, lot and hearing same. different customers tell forward, in the anything Yes, really. past been message a consistent I over more visiting I've customers year, quarter more over technology heard and would us effective, their year past technology the and with good

I is out expect nothing So out cloud market going. continue as also, software, do I call or those call where significant And to in to we’re regarding well very performing to us but just so. two the

Shannon Cross

which just again last figure how guidance trading I this in some outlook just out you then, quarter, you little buying think that then for leads outperformance in there revenue pull when the had the of but bit look conservative contracts. given if is about you put sort more of or that a much the next exceeded Japan trying is for from is I current of are Okay. the guess, pre you there, you the just solid maybe quarter on quarter. of Or enough out the cautiously? quarters. what Marshall, And environment a some guess, conservative I'm couple uncertainly forward your more you've And revenue I given to

Dennis Polk

mind. one, is take that this Shannon, if Dennis. I'm Hi, going you don’t

As turns far is the as market. there expectations me. my all executed for as would businesses the guidance QX, and really I let in through macro challenges teams well, headlines on our on our the revenue didn't thinking our and out the quarter headlines the the what affect core really macro always, affect be

in set some implying for in talked our now the thought this Again, some larger that guidance we headlines as of for there worry some have suggest that macro business believe we QX As QX quarter. a where that to QX to about And and thoughts expected grow our is really our be occurred was we largely QX, again, market, guidance, business, did QX. point, headlines despite going rollout of we reflective far QX, on the acknowledging to market in that project But still might challenges that I headwinds. QX at the the in is about. would still be about, what

I expect earlier, or market So as that grow to Marshall us in QX. above despite at rates indicated

Shannon Cross

Great, thank so much. you

Dennis Polk

Thanks, Shannon.

Operator

Vincent Your Colicchio next Research. question from with Barrington comes

Your line is open.

Vincent Colicchio

than Yes, I a CRM you break does that nice quarter, guys. if got business for, Chris, business, Chris. down in faster grow the way? significantly the non-CRM couple it can

Chris Caldwell

slightly But but grew Yes, non-voice more we Vincent, tend to voice. push deals a faster, it not to faster, significantly have portfolio longer. our those to little balanced continued take that

will in it expect we proof and changes good before some concepts, some but seen of we've traction, into be XXXX more that. big see So seedings

Vincent Colicchio

what And the of top five contribution the quarter? in the was

Chris Caldwell

Vince. what has where out the not actually break been process figuring to reported in of different that when this steps was We But that regular a didn't meaningfully out We're than it we last it. break basis. quarter, on it

Vincent Colicchio

Okay.

I ramp negatively that you're new year, impacted be growth the the will able margins to due from So projects, rates ramp improve to if need next given guess, cost? to

Chris Caldwell

and but costs of the a not year the have So, done Vince, impact we've a good actually those the business job course drag certainly changing very we're a as ramp is business, through on kind sort of it, driving of move going little people and capacity faster, we've and around of that because to it also, numbers that synergy sort frankly, that we're we're through. facilities got repurpose some the able a being of of by overcompensating

You less play that won't the see of through less in and kind impact the sort kind you'll a that but And portfolio. of put of yet get some of preceding we haven't of get sort until fine pure it see through deadline quarters. to indicate, of that reorganization we

Vincent Colicchio

answering Okay. my Thanks for questions.

Chris Caldwell

Vince. Thanks,

Operator

next question from comes with Tim Your Yang Citi.

is open. line Your

Tim Yang

generate I to I your average time. think will Number have average you verticals exposure question. industry more have end taking for do is for ask growth do to the growth you achieve Thanks Concentrix two or enough to the good extend current this Hi. at one, integration? the questions, in you same of industry on

TS. And number two,

the color you upgrade? from TS finish we is XX much Windows think strengths. Can you in mentioned think business Windows about contributed how give And of users the some PC how XXXX PC I on should upgrade? Thank to the most it XX you. your of as

Chris Caldwell

we don't focused of expand have market current to I Concentrix the rates. We our don't believe, Tim, So verticals business achieve on do outside to that we Chris. first? growth Why it's

growth we're as focused our achieving as on. indicated fact, underneath the so quite earlier, and comfortable covers those we on that rebalance the In we're verticals portfolio, are of kind rates

Dennis Polk

Dennis here. Tim, And

business our PC was to definitely the positive quarter. Regarding a

helper about think So Definitely the quarter, growth as I one the wasn't throughout why and performance off be we a main a in exceptional of expect PC there we support business when far our roll in revenue XXXX. not but our growth XXXX, reason, that And QX. results, the the the the performance showed to we driver. do the delivered as -- and will as number

know, more that focus, benefit a of XXXX our longer we will also And you As when be SMB rest the thus believe is tail. will throughout business occurs. that and

Tim Yang

it. Got you. Thank

Mary Lai

Thank you.

Operator

no There the time. questions are at turn further Mary Lai. back to now call this I'll over

Mary Lai

you Thank concludes you look call. today. And This our we for conference joining call time. next speaking to forward our with

Operator

concludes today's conference call. This

disconnect. now may You

TD SYNNEX (SNX) 24 Sep 192019 Q3 Earnings call transcript