SNX - Earnings call transcript Q2 2020

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Operator

Good afternoon. My name is Chantal, and I will be your conference operator today. I would like to welcome everyone to the SYNNEX Second Quarter Fiscal 2020 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

Chantal, everyone. afternoon, quarter call. and the you, second earnings fiscal Welcome SYNNEX XXXX Thank to good

me President CEO; President Polk, of Joining are Chris CFO; and to financial Marshall review results today Dennis and Concentrix. Witt, Caldwell, our

earnings predictions, other the reports release we we will to we update and is our rebroadcasted under separation remind laws, forward-looking XX-K, and and about statements. or of Form meaning in intend over do financial A call, forward-looking the without we within this federal X-K today press including as expected property continue, conference to call reconciliation included and those COVID-XX our everyone result We the mentioned and of SEC. other reporting of information. securities contains during may And earnings non-GAAP Also as certain these any related and is filed not Risk Factors or call non-GAAP available in the recorded flow, reference our permission. the Before X-K GAAP and transaction. sales, of the with I in filings Form a the statements today’s not our may SYNNEX section differ our which IR estimates, website. future turn events, any will be This CFO, Corporation related Marshall? a include now, statements statements materially and uncertainties from section release, CapEx, that Actual results today’s projections and of of Form profitability the statements to discussion cash forward-looking risks the in in discussed expenses,

Marshall Witt

sheet and was very second of COVID-XX Thanks, the execution of known At ample human our disciplined and results in and will the agility of the March, strength economic little I quarter beginning world. our discuss our Mary. fiscal capital strong with impact reflect management liquidity. balance today The the regarding around

our will an to conserve while was to X% COVID-XX, revenue basis, to down on circumstances results. currency costs. $X.X for not reference to quarter the impact financial the X% was QX down then directly with allow. and quarter. a a On today COVID-XX associates compared last pre-pandemic stand Where the On capital in was basis, compared announced appropriate, $X.X focus had adjusted results performance have return prior by billion Our consolidated billion, impacted our was total by COVID-XX we year. same been our operating levels Consequently, when anticipated constant revenue year

or to profit a million gross year-ago year points $XX period. or or operating $XXX compared of million year-over-year. of to $XXX Non-GAAP basis consolidated gross non-GAAP adjusted to XX% year $XXX XX.X% margin a XXX SG&A the X.X% XX% quarter. XX.X% Consolidated million Total expense versus million, margin lower $X million by income was was prior up million, the compared down operating was Our $XX was down compared ago. And ago. totaled year revenue, dollars X%

Now, QX to shifting by performance gears operating segment. business

primarily year allowance lower costs. increase made an or staffing than down XX to a basis of year $XX million $XX the XX% X% ago. was basis XX points $X.X due from X.X% of year favorable quarter, points on ago. operating from of Solutions. $XX gross COVID-XX-related up prior TS or doubtful the Non-GAAP was year million million, incremental expense prior for accounts Solutions was billion, Non-GAAP primarily was mix. million Revenue quarter. approximately down lower in Technology margin margin operating a down was product First, for prior income compared the increased income quarter. million $XX X.X%, Operating Technology million the than $XX quarter, to $XX and

gross was to income billion, their Non-GAAP by revenue XX.X% to or was adversely X.X% million million, $X.X X%. prior absolute impacted Concentrix Concentrix, Concentrix XX% Concentrix down the compared revenue was quarter was in a operating approximately incremental quarter. approximately ago. FX a ago. $XX margin Non-GAAP dollars, decrease Now operating in million year year-over-year. X% of XX.X% margin year quarter. COVID-XX-related a expense to was compared $XX compared the the for Net $XX XX.X% to

let's back move the consolidated results. to Now,

was prior impact. year prior as $XX the a primarily benefit recorded other year to period ago, was Americas our result million, $X.XX, EPS the net a acquisition. a to second non-GAAP of $XX quarter XX.X% down due $XX jurisdictions The settlement $X.XX compared the million higher to and of down effective same in was contingent in prior was net income rate $X $XX period, Second for period. related XX.X% from upon from compared consideration million, Westcon-Comstor XX% year by year Total the million the diluted to a tax COVID-XX the non-GAAP million was This income to year, quarter income shifts tax ago. taxable or XX% driven or

quarter fiscal approximately XX%. rate expect third we of be the XXXX, to For tax the effective

compared $X total lower $X interest finance year ago that the year quarter million And was was reduction lower in net expense This interest well charges quarter, by and were borrowings a million average prior lower Second as -- to this quarter. as than our rate environment. than million. $XX driven was a a

we million. expect For be to expense quarter, approximately interest $XX third the

$X.X the $X balance totaled our billion totaled XX, receivable to on and Turning billion inventories May accounts XXXX. sheet,

preliminary and $X.X billion. partners helped a X days and Our from cash from XX led year to our the improvement. operations of this cycle for cash Good collaboration last conversion was days second flow a quarter, with quarter ago support from improved XX days, lower

strong. and QX, strong SYNNEX the of cash end And operations. fund customer our We have about remain in a facilities at profile billion and liquidity the total available quality to of $X.X our including credit assets had base

capital regarding our thoughts to on allocation. moving Now,

the the million which will of program, our a three-year return As be release, described our $XXX Xst July repurchase this as capital had focus we will pace effective current view step buying in of in XXXX. similar approach, program We to opportunistic to Board press giving pre-pandemic, anti-dilutive, new our in of new repurchase environment to historical major share and first more be start, available. when allocation a program the the Directors albeit at a this approved place

to of used prudent maintain program and stability. In of capital we and the our overall terms With performance disciplined more dividends, will market respect continue through consistent approach pandemic. this as restarting revisit to step, and a second our we as we this quarters will after few the priorities, allocation navigate a we

strategic provide and cash and what’s the return. balance to on for few be level comments will how deliver in like to best our We to deploy we Concentrix spinoff. I'd high a shareholder continue commitment long-term steadily business our

we As stated the have last spin. we quarter, committed to remain finalize

And by to we're spin these despite this QX, fourth year. quarter this the challenges. at our ability to encouraged navigated targeting complete the of all have are We point, sometime in calendar

project in Continued completion grow and economic its that effort occurred this additional are no like overall prefaced all there what activity shocks major QX. and on are continues to

our to quarter Now, moving outlook. third

is to million. that non-GAAP be related million based billion now and EPS to tax XX.X expected of to $XXX.X share, $XXX.X and or expect revenue approximately previously billion. average amortization place EPS shares share, or net our We the to consignment of to $X.XX million $X.XX model I $X.X outstanding in late Non-GAAP million. acquisition or $X.X on range that a of QX. expected before Dennis Dennis. final a note in diluted or early We of XXXX. Hyve is communicated weighted to to be intangibles, one call to income expect moving per this the the Non-GAAP and range to the customers guidance back We will range approximately in of related of the of diluted net of $X the early excludes per QX cost possibly income diluted towards over expenses. One Non-GAAP to end be $XX in QX anticipated integration take had turn after

lower forward-looking approximately our materially. As million results by quarter revenue this these expectations third anticipate per and of may $XXX quarter. differ a we statements fiscal XXXX note Please are reminder, will that actual that

over Now, call to I'll Dennis. the turn

Dennis Polk

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

Before and loved yourself to with out are start and thoughts noting care like pandemic. during would taking results, everyone discussing our this of by are ones I hope our that you

workers We on have this the profoundly impacted crisis essential another. lines. one to thank been like or way all by in front would And this the all to moment health take I

in the we of want and pandemic, From and the I for their commitment to of clients running associates, the health we dedication well, this adaptability business our and thank services. onset our provide As our keeping I'm partners across resiliency of needed associates products quickly the and proud and moved globe to the as crisis. immensely face well. all executed of

have true founded still value by what and community, discrimination And as top like supported benefit valued Taiwan, it can value than do social and the years day. ongoing an so. for do and for met in Bob journey takes. in be workplace, believed for at we for history, long we entrepreneurial we approximately many, it and individual. to nimble as or our Company. values, Company by of We years I We all diverse customers, create effort done I the were of a for me we can't Bob shown acknowledge SYNNEX, associates in racism overnight, do spirit from opportunity one more vendors creating know we associates, We our he our immigrant years a are opportunities business not built Unfortunately, and appreciation XX but can't respect for company something way. stuff I committed XX of are shareholders. for from can core and U.S., And our have to main the the for social want mind any more I do in in ago, express our change, constituents, diversity the is then, also while that tolerate this larger discussed it enough. Huang. the over When his drives everyone change. Our were our ago to

Technology we earnings Hence, and enablement shut segment. our to the guidance provided the still demand played in of while our circumstances. strength these the were a guidance Concentrix The in we of visibility pandemic, results of economies early work-at-home, business was taken the security to figures we and were very of difficult about our well were time still actions product ongoing aspect. Distribution rapid of little this work-from-home say end discussion customer and for delivered executed results. result are glad At we unprecedented today. TS challenges quarter, products, by capabilities I'm our our until Solutions reflecting had challenges the demand in May talking QX most QX, react as strong to considering learn-at-home and in Now, updated cloud solid to to positive related moving the our our In activities supporting business, able to and March, underpinned being quickly respond the throughout was quarter. We on in and second our quarter down. notebooks, in of QX out the

larger certainly as slowed also to Supply contributed customer end, aspect positive year-over-year. PCs, This a quarter shift customers, chain networking our the over desktop than TS on-site of also of supported products quarter. business end business, the revenue the as At as Distribution the by the continue well. retail in we buying We e-commerce saw burst driven to period, our contributed home flat as saw shipments. result related supporting in such we as more the end customers occurred. with of and The limited we office the of was to support primarily growth trends at the infrastructure, to printers, employees down our a QX, pandemic sequential as consumer saw offices. servers, increase to supplies challenges start our environment, we our In during lack TS of robust being Hyve

the associates given at performed customer business, an this our our turn I predict crisis. Concentrix our decision-making. more to teams to patterns detail. health base. importantly the midst in of will the I of pleased now very difficult this level Concentrix business, in a in buying with is this to always, we all extraordinary discuss As Chris putting am In how executed, most over call first

Chris Caldwell

Dennis. Thanks,

deep world. I sympathy echo First, affected want to my impacted just that by pandemic offer personally has and Dennis so lives many those around to the the

later. all a saddened clearly Our our a quarter. hopeful From we that are sooner discussed family we Concentrix on March has losses challenging We this team ends anticipated and call, suffered than that are as business extended greatly by. perspective,

much results, and a was billion, we Concentrix than constant and see revenue on currency delivered quarter in decrease well into all had X% circumstances reported decrease we totaled two The basis. under visibility the for and performance broke parts. X% you a originally a Second COVID-related executed extremely to. our As The $X.XX year-over-year an revenue decrease basis improved on

longer vertical Firstly, quarantine second, services, longer very aggressive and accounts the although staff drive capacity our working saw and were of clients erode and our still we deals moving saw in and impact course capacity few productive, business needed to Through take side. opportunistic significant demand quarter our staff no of who the and travel clients advantage being our increases client the from people of was transportation portion our short-term from quickly. they to to lockdown staff to the where with needed home ability by of a action, able work, no performance the needing there from a limiting where move

Our have protocols we only strengthened every region. capabilities in our deployed

We considered never have to it. our extend clients work-at-home into able have countries that been for

attainment platform matter to no allows training, metric pre-COVID onboarding, they where are management has coaching and end-to-end level. To-date, Our more staff our returning located. of a been recruiting, encouraging virtual operating

communications QX, to rebalancing it course represent from the now of did XX% now our to productive staff the of the a portfolio of of with down are at quarter. As by end full is productivity revenue at and third approximately XX% vertical the our over ago. gain year stands, XX% continue end We execute revenue, we on delivery

our reductions e-commerce travel in COVID, and the vertical was offsetting clients QX. With and from technology growth transportation in the within our

strong saw banking clients the On We their services and our QX. in accelerating digital relatively balance, will outsourcing more and transformation also realities, rebalance to as demand seeing wins a deal capabilities. we're start client channel for revenue healthcare that many in new generate economic transformation their new and with to

a over example, the For quarter dozen clients during services. work-at-home live went new with

clients positive strong long-term clients their the to team's Clients as appreciation they GIG execution with our bots, worked including in have in our proactively have day challenges with chat capabilities self-service solution, feedback have to through and We also quarter. alternative and Solv. We advance for channels and do and still provided watching developments that their on short front demand fluctuate the us. needs business many of recalibrating on We're basis. may changes our their COVID daily day greatly and and a partnership see

business, few is than a their have upticks to clients example, have earlier to an than travel while As fluid already impacts they seen environment. assess. much a business larger expected their quarters in clients originally It seen they three two other very

COVID-related to by were net million assistance expenses, towards income for costs. ago related operating second million, profitability, other these to expenses non-GAAP, could Profitably staff in that year period. client and from the and was $XXX was quarter the quarter impacted Moving that $XX paid work million down not of $XX of

work-at-home still execute by environments. temporarily the moved they Even we Our decreased consolidation. results, people related as for quarter on plan with their expenses, to to GAAP gross to for with integration productivity continue of site comfortable the our got new and million impacted reflected was $X our dynamic, approximately COVID margin primarily we synergy also

and set our million announced goal $XX flow originally million, totaled Cash we Our of the quarter million. approximately is about million approximately acquisition in annually expenditures $XX when talked we which totaled from of at quarter, synergies capital above operations second running are Convergys. a now $XXX $XXX the

of a and majority the below vast Capital recent some operations reconfigure payment quarter to reflects flow environment. spend of and of sites collection, work-at-home expenditures expenses. support our of in with new the plus cash Our quarters delays to that deferment our were client generation in operate

this so on in the sequential and to are remain that Turning emerging to revenue employed, clients, staff and of focused drive situation third and can quarter, profitability. partner from so improvements our safe stronger, choice, our we we we their that keeping over-delivering

the to new over is not quarter. from execute taken very for opportunities, are pipeline and competitors our Our share able who last strong of we've some

to expenses, third the but early being continue a We some labor quarter and meaningful going through of the a COVID by basis down year-on-year result in which on reduced quarter. be expect of to in margin operating out-of-pocket part impacted amount stranded the

reduced quarter-on-quarter we will will the our line with expenditures capital decrease cash Our during new we of profitability increase as QX. and have some level to continue our support of retrofit and flow our also in results of programs facilities that won XQ,

While to this to high-value our volumes long-term pandemic appears acceleration by business in silver of on a uncertain, of offerings our effects be lining remains the clients our clients. and our the devastating some an

deliver analytics partner a for ability our technology, globally services exceptional expertise full and leverage allows Our clients. our to be digital and to service us to

who would us with I to for members culture and very-difficult Concentrix these people, clients’ the are all to diversity. like of Thank As conclude, team you circumstances. I meet clients hand efforts resourcefulness worked The thank our effort, needs in our dedication our on under amazing our much. our working to all and and very recovery very, tribute hand

Now, you, Dennis. to back

Dennis Polk

Chris. you, Thank

and our safety thoughts certain to Overall, seeing markets associates. and on of as in some the recovery we Moving health as priority of positive pick utmost remains to up our reopen,. signs the our are QX, economies shelter-in-place and begin restrictions

QX, the point not the still phases reductions are very smooth are more will outbreak, outlook well. covered are Concentrix operate given be geographies Chris We predictable. many or the tougher are in reopening how in a of from case where business we seeing rebound cautious about still virus to

And what products the transactions. sales. as For beginning of office we TS of and Distribution, mobile, recovery we cloud enterprise solid currently expect the product and security see continued

and The down QX Hyve, due of QX to For we QX to decline is mix, year-over-year from timing from to year-over-year XXXX. TS ASP and be primarily expect customers. orders similar

the of the rapid and environment, assessment Concentrix to Given current is change. subject TS

Chris both Marshall QX. significant indicated, during COVID-related have we expense As and

We less further expect but than subsequent these amounts to QX, trail quarters. the continue off in QX and in then

rate. expense of become Some investments of fixed these run will necessary our level part

As while will always, areas business ways we look efficient offset in find possible. to most other running the to amounts these

about emphasize of close, Concentrix. I to the comments I Marshall's want Before spin

as accommodates. believe finalizing the We path are the do much and are so macro to end very environment as a to spin of the by the on long still committed we year,

As I behalf everything and our team, We for the you challenging to entire I all conclude again associates want my partners. period. management prepared thank remarks, during on business done of this have that appreciate SYNNEX

Our would thoughts I safe those continue be healthy. who with to by stay questions. like the been call and have COVID-XX. to open affected for that, up With Please

Operator

[Operator Instructions] with Research. comes Vince Colicchio Barrington The from question first

Vince Colicchio

-- Yes. Dennis, could on want I worst? highlight of impact was pandemic, wondering the it's chain and where update of us easing, if maybe pain the supply sort point if you the you that's is to

Dennis Polk

Hi, at well. pretty supply in high been. we take is regular that right quickly. supply in we quarter. Vince. normal amount as chain don't be example is as challenges. that the chain our for in to business, due the Thanks sure, ship have about But beginning But some a conditions. an current too challenges of back And distribution in fully something An backlog. Traditionally But it, we it's at our ever was we orders now, this than can’t of our our as Yes, order it QX, is backlog the time, for point chain at and time, ship distribution, time, of saying significant call overall current the talk the it's which even had question. chain better would at supply not it to, that supply much

chain we of But not an So, to QX that QX, the have quarter. supply over that'll normal. that and to happening our our you is end we fully start see do by the back things coming certainly And give back to idea the normal. of hope

Vince Colicchio

-- obviously, part obviously and labor comfortable with costly are curious, be of more hearing home. part -- that we're was it done could if services and brick standpoint? a clients Any which sense being I of shift Chris, your from more the will with then, being type model, less permanent on, a be from Concentrix And mortar

Chris Caldwell

Hi, Vince. Yes.

costs we're of not The percentage offshore is a more are on see while clearly, we similarly that those dramatically because less an of pre-COVID. infrastructure provide And expectation just costs in business staff work-at-home the that model. on type see permanent model, have doing of do onshore of scale be at we at work-at-home increased basis. working some almost our we will to that So, to our some do home

see increase in balance that overall, you business So, going forward. out. our will But an will work-at-home

Vince Colicchio

Okay. I'll guys. job, back go to queue. the Nice

Dennis Polk

Thank you.

Operator

Tim with Our next Citi. question Yang comes from

line Your open. is

Tim Yang

place? have XX% taking for Hi. to The peers on at center in you this your strong different have remotely roughly call maybe center this in your And execution. right this remotely point? now. able working follow-up. workers my And workers congrats capabilities the much within think Can about mentioned work I working about talk space, the percentage given Thanks are we competitor And remotely question. a just shift of are then, share of call largest should space how how they renting

Chris Caldwell

Chris. Hey Tim, it’s

So, probably than our XX% the peak. at percentage higher little a is

a of had locations, New our few staff We very their have is COVID that others and dealt Zealand, effectively back Australia, in successfully more Vietnam countries including have like that China. with some now

bit But at down a from over we're peak, we were little that. that. certainly So,

that shift, infrastructure the as it be some, of in support place or players do seen who and delays, couldn't to terms call fast security or really sort didn't we’ve to In around moved work-at-home I'll us. clients or to had that moving of work-at-home it have with share nimble people volume to were dealing

lot it work lot have did a staff said noticed to a unable comments of and to I unable that capture in at to that offered were been home us. of And you work so, prepared we've my that Albeit was at able all. to we

through our now than into working QX. demand to staff we we a big that could we so, as chunk had And of more cater go certainly we're for

Tim Yang

at mentioned X% this Thanks. I TS, you this to rate hard is should talk growth year, change that virus. roughly sector B, range to post-COVID-XX? mean to Obviously growth given X% Thanks. with before Can your maybe -- then COVID-XX, distribution normalized A, about growth be for TS this the X%. year think any rate on for I X% to it. view Got structural you IT and the achieve

Dennis Polk

Tim. Hi, This Dennis. is

So, there. in just grow a SYNNEX couple X% of at things Overall, reminder, to than faster market strives we're always to as the that X%. by a least

changed that So, not in current the environment. has

the And that's to number best whatever the believe is, pandemic the ways. as we rate going do growth our is But, many one. So, in, we plan seen business that improve and what once the Number to businesses growth things. than we've in. thing grow determine, rate many to know the again obviously grow that's would as in whatever to efficiency, that number we're so and that technology we're hard environment That's is, invested last currently, two, other this very I right we're ways, faster. to say given can case the that faster far And improving we is. our in great that

also are the So, as is very to chain the that three see very think and will of pandemic, And high, in supply the out continue That's been and proven our well. across I our months. technology to I in more from as businesses that critical. I investments think benefit execute last improve we’ll then in our the place ability prospects come to pandemic companies because board. And and expect the out deal with

Tim Yang

Thank you. Great.

Operator

Our comes next Matt with from question Sheerin Stifel.

Matt Sheerin

very workers on quarter. Chris it for question well. like First It sounds contributing like this And you got sounds Concentrix. more rebounded you've

then able that grow to grow this sequentially going to turn, should that business quarter? and you're So, year-over-year be imply the in

Chris Caldwell

in I think don't So, growing year-over-year. QX, we're

As get still near of we until about, our back it and capabilities have the don't we talked production QX. end full won’t

there. some be will muted there So, growth

We But outgrow transportation working, overall, more also travel comments absolutely. and the was vertical your to are people down. continuing about getting that

beginning QX. that If the go XX,XXX people a as sorry, about now of working, we the lower and at comments you much QX remember at not beginning significantly QX that's -- of into number our

Matt Sheerin

you you some then, Thank Okay. Dennis that. on to color. And TS, provide did for

you're in optimistic comps IoT demand seeing. you sounded heard peak several You OEMs concerns second that comment on complex concern setting in up are projects some But, relatively that surge point that trends demand and we this on from investors will terms the pushed projects, that tougher of still just in the other could at are from some you Could there? work-from-home, what seeing of getting large on the hearing comment half? enterprise out. And we've you're some

Dennis Polk

Matt. Sure,

a of growth that back So, when rate a efficient a that office, need two It's the going that period a course, burst going home the more from your to for the the reality you facing. Company just our as open associate of to with flexibility not work-at-home and as it's projects investments because of that once if we're of think you economies we're year-over-year we'll what both as the get of necessary I closed, I are do unknown example, see and businesses you things make lack the to that lot acquire up thereof the people we're also of delayed and for or offices and use realities will, overall. described But, back, to businesses I are as dealing sheltered an again think come I the That’s buying better to. for -- of business. also providing an as those more our when And think or the notebook you saw and time. an guiding easily off clear equipment being enable see businesses and associate office. between work We locations. place, with in only return office companies major both the the can environment, out not either lot in had simple on, have also were but exists, say pushed to work-at-home and

additional You finding perspective, with to products example, to an a again, host to around capability. as of them acquire And, outfit that. also we're that from whole products that SYNNEX a enable need way

bit do think be offset to tailwind of forward that talked a headwinds I about. going a the So, you that'll

Operator

Our next Raymond Tindle from with question comes Adam James.

Adam Tindle

I aspect. on cost just wanted the to start COVID

for I been have that that's you I permanent of got part profit think because correct. going up would structure think, here. Dennis the I cost were those, appropriate, there's if operating to may mentioned dollars be those But not be to adjust a actually impacted If numbers year-over-year. I

there temporary portfolio So, structural each through I maybe permanently high of very us business, the any question change be TS, help a to be for helpful. it's versus AR could and do, health would permanent is for that could so what's what to think would I the for there know at the Concentrix, level, doubtful going accounts, but a remaining hard be the guess be, changed Thanks. and for way allowance you

Marshall Witt

is Hi and Adam, Dennis will start in. Marshall. this chime then I'll

did that You this difficult out call COVID-related current are different and margins revenue current environment. and point this it then it's almost very I define mix the to in time.

is hand some and to it much And an I hard the ongoing compare. it about then an on at like run Dennis orange. rates So, of to very look versus apple over it COVID to costs. talk thoughts

Dennis Polk

as in distribution run normal And we and Adam, business. Yes. and the out mix easy everything back normalized it's anything quarter, COVID there around of our you, did our just the as calling what the said, Marshall because what Thank of not TS expenses Marshall. adding kind to Sure. the business wasn't rate, about emphasize

So, I QX look outlying a kind you will. think of you if quarter, standalone to really at as have

indicated the you going in we're we’ll not are our primarily we’re going have costs But expense disclose to rate trust but reduce run try to for QX and in and to to far that low ready payroll are, bad future. around As as places. as how that a forward, occurs area to COVID-related keep base much the as of we QX, of that foreseeable that Where expenses, going possible. are to number, as going that other debt try remain

Adam Tindle

touch on Marshall Chris Concentrix And could maybe if costs? Witt

Chris Caldwell

lot new cleaning to of what changing we now similar working I'll it the environment. do So, our new facilities. to of the, of of right such to some of part as, how are call Adam, kind like a configuration the support that's the facilities through COVID we're And the have of it's structural offsetting Dennis’, costs, we

other ready other to So, those costs we're run on sure certainly to with savings But I'm our basis rate areas. is comment. goal offset not in a

Adam Tindle

maybe Chris, a ramped you employees. more a obviously have work-from-home as lot And Okay. follow-up,

XX% about I a think is the maybe impressive, mentioned quite there kind call I guess impact. versus gone center have employee you've to work-from-home productive But, economics of how learned of that everything employee think simple Is that the talk business a what a you've way you unit you've you're now, could changed? through. which about given

Chris Caldwell

What quite have be that cheaper. some have with honest, to is going had in the countries that right Adam, we're work-at-home in facilities. found what Yes. done there's sometimes historically very work-at-home moment, through we had never preconception a that now line you and clients, that at within work-at-home is is with

infrastructure, having because provide for to you're they are paying extra, be their that equipment productive. high-speed bills you not for own have internet are to need necessarily conditioning, might their providing they in that additional And might air You with right. helping people electricity

into through I model already is of cost I markets, we're working will and that. more tell you work-at-home Thank and received of the So, you. that already a clients effective, in that's those think built in markets. benefit onshore sort generally

Operator

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

open. line Your is

Ruplu Bhattacharya

and taking the and the Thanks guide. on questions congrats my Hi. on quarter for strong

First question for Chris.

in question. equal is to the site, say working member of home a last better on mean somebody staff to that in Just and to be we at chance your on build geographic sites any steady is that still support your your could that the If of some or that the and maybe footprint consolidation term there geographic from reduce state, see you customers? productivity working that does of you able footprint, longer when look

Chris Caldwell

certain a locations. has happening. of less a opposite COVID lot is like with clients That's reality actually in enterprise would the question. footprint the critical service we great is larger they taught The mass that is What large a

which through they up until with clients pre-COVID about trend we're of really so, the sort having was of right level. the working that mass at concerned moment, amount are because concentration, And

So, see out some I think bouncing geographies. more in you'll

again, consolidation complete, the or are have built comfortable continued these into of don't clients. But, rebalance. sort kind down see that of networks sort to countries two while for redundancy some the three large And more happening support work. see You'll getting until to their gotten of enterprise things a of people I

Ruplu Bhattacharya

the wondering Thanks, any any of shortages? I Solutions are you be sense. some or the the was talked you. helpful. challenges logistics detail that Technology makes chain on kind That side, you it detail Chris. us a supply Thank of Then, about? little Dennis can seeing would seeing there give if terms challenges you product bit So, on Is of more you're in more

Dennis Polk

product me manufacturers shortages Yes sure. and quarter that related occurred did shortages the chain. logistics throughout to occur, more less their component on and supply to challenges excuse has had are -- the primarily our sub It’s were And primarily shortages. related that that with product

Ruplu Bhattacharya

taking Thank Okay. questions. my you for

Operator

with Our from Cross Research. comes next Cross question Shannon

open. Your line is

Shannon Cross

the in I just of we around What very understand you you to positive may And and I'm the very moving applied provided. the to obviously be situation. questions. my and fluid it's so what I consensus sort because taking the much guidance updated. and about confidence you gave could be the understand quarterly really numbers revised Thank initial of a guess it, guidance guidance think the for you level then given that. never trying just to then I a obviously, fluidity, you guidance negatives gave [ph] you are of lot. have first, But some got know

can we of on kind get all same path this So, hopefully, the with quarter?

Dennis Polk

Hi, This is very Dennis, question. Shannon. fair

of happen have basically we about for And -- as had what the were no time and in was to sense the shutting guidance to term, going have any our reason call, call. at in was made specifically as visibility down talked if speaking. the that provided to we visibility. that didn't economies we the we when we literally countries were We because near questioned it that March, So,

got what occur. our where of we and more Fortunately, these Company, all going adapted challenges to point was of spirit to we understand again, the entrepreneurial our and business predict to could a

So, to four there in time, were the left that be come we were thinking. that we cautious weeks good important wanted and things we we an about. our to in out give though, some had it quarter At marketplace to three still and May, in on was felt challenges what update just early still and

out So, conservative we to that an and We would the time that certain enough conservative fact didn't in why be that that pretty month do gave update May. history. we update. and is come -- the a better, we frankly we half we were we and that miss update later, when fairly then that provide but and a there want That's that were at to were wanted uncertainties in speaking, the

have came plays time on understand the visibility as clearly base world it, far we We our QX than our in bit in business, in had out question a and our it how has QX, about back we business how out it than As when this, to the now COVID predictability regarding had to a we guide better customer our March. it sides of QX current call early our our at works, same both guide. and little results how more March

clearly March. back So, than from have we in now confidence more we had confidence level, a

are And by clearly we the that far countries still of in the you've virus U.S., are then the through because are COVID many are headlines extremely in of cases. there The kind As seen Phase risks, show today that the in many still, X. resurgence a as many here world. locally there challenged

as plays other quarter, in risk that that challenges place well. if cause today could the that play on guidance risks how any business and out could unforeseen are Also, out to the in our that So challenges cause we chain more supply gave. that coming our guidance

Shannon Cross

the hearing outsourcing opportunities, more the what a any terms they -- contracts been your think Are customers? open sort selling about looks what of from bring like? environment, about talk what are and through? you. How current to some bit of you they can pipeline to their changes Chris, given you're they've how Thank

Chris Caldwell

couple So, of a things Shannon, there.

some figuring healthy. not healthy pipeline are looking we're pipeline, only to terms In consolidate surprised also about capacity existing is. but -- actually volume, very into of the pleasantly And and going the who from how We've clients prospects QX that's it’s go with either so out forward outsourcing which and net how new opportunities are or or clients to new reduce new partner and/or where out, with. clients figuring to out costs looking figuring clients are at are new

what we're happy out very we're with seeing the so, in And marketplace.

I the than higher tone discussions, of the to redundancy on we're going proof the use able case support how at the do also A new lot how you and of new been last the more through you're new say more kind probably in BCP, selling. the would of some manage certainly of services of what how has your value much are receptive that as sort two, contracting your that the environment around terms In is of the sort overall and of to wave to over days the that how more COVID manage business. to capacity is you focused just and past. look organization market XX

digital more transformation. lot a So,

services, to drive talked imperative services, it had and see time frankly price us. automated, some about now for some doing customer they where more analytic we technology a them allows [indiscernible] to our being our So, and clients business our need services, to better target is some our of which services transformation, be transformation, less as for that long headcount

we're well. those So, very encouraged as trends by

Operator

Our next Baruah with from Ananda question Capital. Loop comes

open. is line Your

Ananda Baruah

And, growth very Do growth do of vectors over lead two to Yes, could that some if there's you could. for see an think I higher let's time? rate rate this? quick helped opportunity you just sort long-term say, be structural to -- Chris, growth start, Concentrix by

Chris Caldwell

into well with consolidation the we're clients clients really competitors because you a tell the next through share of And I'll in it. it. other are very and to analysts what space going we decline Ananda, opportunities quarters And for Yes. winning the that. grow see appreciative performed seeing a from then are that new overall lot of is we where of couple

market longer terms of to the X%. go what grow was about is market, to goal back In term we at prospects, time our was X.X%, always in

would on I hate the rates, kind but to back right those get of is put moment. to to at a that goal our So, timeframe

Ananda Baruah

that X% that? X% like So, there's just that nothing to to you X% something obvious like to jumped guys to X% that go long-term, as up have could

Chris Caldwell

the goal market. fast our Ananda, always go is in to

market I generally we'd want the expand, larger again, expands growth. down-cycles that wouldn't to horizon in be outsourcing those if But on have does the and do opportunities clearly, time for at. comment looking So, we

Ananda Baruah

then, there like like that feel comfortable -- I mean, on Dennis, structurally takes. -- sounds with sounds it TS, there's demand. and And It sounds it puts you

Thanks. as and puts And be if sort like then extended and that? sort seasonality? I obviously, that think you that wave in that to think terms if of of layer we're going -- from which you could seems it level seasonality do some opinion takes a the we're of out regard, like that, 'XX, in understand to you into sort also seems work-from-home of do on is an do you how work so, there of And tease at of beginning And -- and work-from-home, business question still puts in open terms think sort going sort to starting setting in to they say do happening, could to it another takes from demand? effect have work-from-home also the into you let's XXXX, like do this like through so echo is high follow also, look see you then, up. And for that country least how And how longer fall? for an of get sort -- ends up are the opposed to up at of up shorter. And like, actually folks if of in due

Dennis Polk

Okay.

Ananda. there's think there, I questions two

normal do first QX. As revenue within currently, playing yes, there guiding far business, in think year-over-year to a are seasonality lower I But the we somewhat our is that, of our number. out all, seasonality as of

lack our business. as the QX would you seasonality guiding increase it's will what both rest tell continue due for to get like hopeful and normal visibility but parts to the QX that the far in in of As year, look QX, very of to we'll of really difficult we're

I that's hopeful to don't we far benefit being back can environment. we're working the think normal benefit like and how a to a what or know know future, potential vaccine that the And in get As a don't a play be. we get work-from-home going I I as going environments all again the you, more because to out,

two. focused additional not I enable really today office from more well. environment and work-at-home, And perspective. need that on, we're the at there see said, the there's of what if buying only But, again a be that's on I continuing there's think we planning further some to a but to as I to to as So, also, is return what be be hybrid there’d of going believe support to a going

Operator

at time. this further to no are call There back closing remarks. I'll Dennis now questions Polk the for turn

Dennis Polk

Thank you.

forward business afternoon. in So, Thank Stay in closing, I to efforts. good go well. and I for want our thank have entire high Concentrix confidence you, their and team ongoing the our SYNNEX and opportunities.

Operator

call. conference today's concludes This

disconnect. now may You

TD SYNNEX (SNX) 25 Jun 202020 Q2 Earnings call transcript