Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, good morning. My name is Abby, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX First Quarter Fiscal 2023 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 Investor Liz for the to Relations. time, over call Morali, this remarks, like I pass At Head of Liz, begin. you may

Liz Morali

joining With Good for Witt, Hume, CFO. you. morning, and Marshall you Thank everyone, CEO; and today's today me for call. are Rich thank us

mentioned plans Before let statements statements predictions, including estimates, from you or other me positioning that forward-looking including discussion contains and laws, we within federal the as Actual strategy, for securities future well continue, about about events, fiscal statements future materially meaning those any with in the results Factors other remind our today's of intend section as the earnings forward-looking projections differ may expectations periods. today's release, filings result a in XX-K not to reports update of the and our the of Risk Form statements. we as and and risks in Form our SEC. uncertainties today in these and do discussed X-K forward-looking We statements filed

call, this certain Investor This without are Reconciliations recorded GAAP our earnings we reference during Web related our is X-K ir.tdsynnex.com. call rebroadcast Also, of property Relations and the SYNNEX may information. available press not results site, in our Form on to included and conference non-GAAP of TD or the non-GAAP financial release will be permission.

I will now Rich. call over turn the Rich? to

Rich Hume

everyone, for us joining thanks today. morning, and Liz. Good Thank you,

to technologies, QX capture environment. Our flexible despite market in business changing high broad model rapidly growth and us advanced allowed a solutions portfolio across industry-leading and growth

for EPS end return towards to areas meaningful deliver and us our This showed basis, a market flexible to and range previously Our to the of pivoting growth to non-GAAP constant on allowed the guided margins, currency well, remaining to high growth. quarter cash expand ability the shareholders. our team grow revenue execute of conditions

and than for the declined we quarter, North America impacted related and the sharply our pronounced. PCs environment demand more in less a perspective, declines Japan From demand to regional Relative market both were the expectations, the and Asia-Pacific, Europe had macroeconomic forecasted. products during in

top post forward, Looking solutions many the half year, such demand. that the drivers season portfolio government refresh as second PC education and anticipate with indicate cycle spending of a vendors stable pandemic of the we endpoint in our and more the dueling could

this quarter Nevertheless, strength strategy diversifying portfolio. our highlighted the invest to of our in

cloud, data across the and investments are hyperscale build set infrastructure, categories robust infrastructure and with the analytics, we center with we pleased off see a paying Our continue hybrid to QX. in out are along cybersecurity, networking of momentum offerings those of data for and in

for technologies, highlights total, users these projects in basket with and discussed term aligned quarter. In the we've the to grew previously and growth growth mid their category. our of strategic importance teens the longer is for growth Hyve, customers our high rates end of including our This this

that Europe advanced overall that IDC in quarter. saw reports in Overall indicate track grew context and is for and use first regions America in the distribution in we QX. billings helped constant and the fiscal participation growth market high X% worth those technologies offset noting in and currency in solutions the share to North our market overall business endpoint gross It strength growth solutions, the to declines

board experienced supply continue in decline and in a improvement From quarter, see backlog quarter-over-quarter. we chain perspective, we the the our to across

allows our serve demand us positive levels. historical are areas a backlog overall While is to our timely customers more The balanced supply approaching a chain levels few of in environment the there as normalization a constraint, fashion. for remain a sign isolated more

to than more the America and in remaining the year. report transition a deliberately will and to as of disruption reduce I've business been has business risk CIS. ERP and sentiment our pleased continue throughout previously, mentioned of our vendor to make taken XX% customers have the positive, of the North around to we continue now to systems distribution approach Customer We is on measured And our we excellent steady progress vendors. migrate and migration. I'm transacting portions that our

proud Also corporation. during the publish first being to to our Report quarter, demonstrating our Citizenship a we are very commitment responsible Corporate

We have to progress look and set clear in areas. these on social to goals and our described as report, forward in continuing you important environmental we the update

confident to succeed the dynamics in which the second in to in is high rapidly commitment technologies market quarter, any navigate changing cost quarter, industry. in we structure, seventh are diversified our We allows enter ability merger our post and our portfolio, As investing growth condition. variable we market to our believe us

In closing, in advanced solutions in the and continuation in first we continued for fiscal of a endpoint we likely pressure saw for seeing expect QX, out play with and growth continued growth the trends solutions quarter demand opportunities to technologies. our see high

our leveraging towards We to margin in dynamic pivot the ability and navigate growth of broad are confident our pockets environment expansion. portfolio by to

to turn now over to and about Marshall, I'll our Marshall you. some additional over for outlook. comments QX QX it

Marshall Witt

to today. Thanks, everyone for joining Rich, us thanks and

disclosures. a review reported introduced gross our we as I that is as when have today. in book get performance, billings in measure We important quarterly represents I Before filings sales our business, billings Beginning consider down we line. this evaluating business, total our including added new of the it wanted to gross highlight an revenue one the of netted believe quarter, that our to our metric

have the across cloud for reminder, we software, the reported profit services in captured line. businesses Thus, is As those our represents gross and across report the of virtual not security, we of earn the only the revenue revenue net growth offerings performed. many a net totality we for

software larger fully and scope of services will trends net providing allow associated moves a investors the a that growth our to we and underlying revenue to portion be on business. billings gross of reported will in As appreciate believe basis, our rate the

reporting investors metric value our a requests response to from this disclosure was who from new This also in perspective.

expected quarter, than endpoint technology softer during As particularly several solution from we demand North saw the categories, in across America. February you heard Rich,

grow additional technologies, basis growth allowed lower the this despite our expand pressure, us revenue diversified accretive and and portfolio, margins, currency margin than quarter. high coupled the on on growth to gross constant Despite revenue expected our billings a broad in with focus

America's in gross down currency. constant and in year-over-year, QX Now Worldwide, billion, at net results. declined billings up and while a XX.X revenue and year-over-year constant moving currency. Europe while regional came in billion, increased currency, to X% constant X% APJ XX%, all X% X% up was year-over-year XX.X up increased From X% perspective, revenue in X%

deceleration strength and declines in growth partially by advanced including solutions, solutions the region demand significant growth in growth we In offset and Hyve. APJ, high saw high solutions. services solutions products, technologies. in outperformance Americas, endpoint endpoint Europe, advanced In from outperformed by technologies, the forecast severe in growth the for advanced In our driven less partially in solution offset by came

Non-GAAP high gross up profit and solutions X.XX by year-over-year. second basis driven The is non-GAAP improvement in consecutive points an X advanced was technologies. was margin margin than our was gross billion, shift quarter X.XX%, mix greater growth and XX to which gross billion increased primarily

Non-GAAP synergy million was and attainment. to XX mix million, Total basis adjusted year-over-year, operating was margin high growth driven XXX up points primarily operating up and or representing year-over-year, SG&A XX shift was X.X% cost income million, revenue. X.XX%, technologies of a by XXX non-GAAP expense X.X% increased

On increased finance year-over-year. million expense million, outlook. interest one a charges basis, XX operating X% above income were non-GAAP Quarter constant X non-GAAP currency our and

range was which QX, million For XX%. the for was $X.XX, and Total diluted our non-GAAP tax guidance rate income was was the EPS high non-GAAP of the XXX effective approximately end non-GAAP communicated quarter. net previously at

Now quarter and balance and billion. the with turning sheet. of ended We million to the XXX cash X.X of debt cash equivalents

X.Xx is grade and profile Xx ratio. in line ratio net approaching leverage leverage Our was with previously and investment which communicated gross gross target was leverage X.Xx our of our

billion the X.XX in million. trends. days, Accounts X.X of quarter was billion, conversion of from totaled four, quarter due up billion, the receivable and and or first prior XXX end XXX approximately increase operations working the prior cash quarter days XX the seasonal was Net three quarter million in inventories an to X.XX first cash capital down X.XX cycle from totaled at XXX The was billion, used for from QX the in the quarter down X% million quarter. from

our share XXXX. close payable common shareholder a the Directors of stockholders perspective XXXX of on dividend per of return for XX, quarter, has the of current Board April to on as approved From April $X.XX XX, a of cash record business

on During dividends continued our share XX million and of approximately by executing repurchase our stock. program XXX we million buying the quarter, paid in

through cash on million share repurchase We remaining flow three-year year further to our have expect the authorization, continue and approximately repurchases with our aligned share generation. XXX

million in have XXX quarter, our million good merger-related make to total cost recognizing to synergies an XX of remaining date on achieved We the continued additional target. and progress over million XXX we the

Now moving fiscal to outlook two. for quarter

expect see advanced and mentioned, to a weighting had trends with of high As towards Rich continuation first we the stronger growth saw in solutions technologies. a quarter we the

the on expect We flat basis billings currency approximately billion in to a XX year-over-year XX.X billion, midpoint. constant gross of at

of outlook the the high XX is net growth currency decline approximately impact year-over-year year-over-year solutions as billings. a reflects adjustment which revenue decline year-over-year, a equates exchange and revenue we to X% gross We headwinds continue by total expect of of grow XXX and XXX approximately to on million X% to range to revenue million in gross basis to to be The the constant foreign midpoint. incremental of at in in This an advanced billion driven billion, XX technologies. also to net

a on X.XX. based is guidance to Our dollar rate exchange of euro

of outstanding is be the be based expected expected share $X.XX expect per approximately EPS average to in XX%. $X.XX is to two the approximately on range and to of range to XX is we Non-GAAP income be to million. net Non-GAAP weighted non-GAAP to and expected quarter of million expense million, the million tax XX.X be diluted diluted rate for approximately shares interest XXX in XXX

from two non-GAAP Our interest fiscal of represent guidance year-over-year a headwinds which EPS to quarter XXXX. expense headwind versus share is collectively per inclusive and euro $X.XX of devaluation,

approximately items, perform the EPS solidly. midpoint continues Excluding these business to our growth discrete as our implies non-GAAP of at outlook underlying X%

our is quarter our thoughts and to volatile, our for the for ability but market to be market growth and which year the pivot that this business our guidance continues our Regarding believe performance the in QX. of differentiation to XXXX, in we clear on pockets impact full may of

margins and We deliver to we feel the our on to we will are seeing through and expect in confident fiscal which plus large be returned billion X continued free guided and share buybacks flow, of continue quarter a dividends. consistent previously provided to outlook portion year shareholders to we stable last cash

back Operator? session. call Q&A begin the turn to now will over the operator to I the

Operator

Instructions]. with [Operator Northcoast our you. we take And Thank Housum will Keith from Research. question first

line open. Your is

Keith Housum

here. Good opportunity I morning, guys. appreciate the

and than Europe the [indiscernible]? share in specifically, saw there you Or Marshall, is Are that guys of you strength you Asia-Pacific the America? a of little feeling what market a talk there is just stronger Is it about seeing can bit in terms here North you're In please that? taking there?

Marshall Witt

Yes.

in I'm ready So question. the -- Keith, thanks and to jump away. of well, morning the prepared first all, right for remarks good in

the in our good. revenue our stated is in service And APJ feel we don't market So absent in market prepared and in quite first, strength we've remarks, readily obviously Europe. America participation had remarks, that reason APJ. commented And have line North a share market APJ America position. we grown on that and North clearly, I as But as in in the was the reports in Europe our if for top

And So theme declining less that's just solutions. for Part had less. in that said have endpoint advanced declined were Europe, growing performance, say our endpoint we on advanced that If is And characterize let me we due the the to solutions, had the and globally European this that mix had where company grew the segment. on declining it endpoints we first the point. we to I endpoint, it more. the of of

part might You Europe have as as recall, endpoint in we an the of mobility segment example.

of we the less. So had therefore, why things mix terms of endpoint decline in were the those of some

So overlying that's the major really theme.

Keith Housum

Okay, that. appreciate I

Rich Hume

the comes about more on that high for you'll that thing was that [ph] compares year-on-year. the see release technology Europe decline, in that is regionals the often growth press One

Keith Housum

second that guess appreciate Okay. expect on agree guess you up, you'll an devices. my improvement endpoint And just half second the question customers device that. with is, I noted that following that Rich, vendors I you I see improvement there, do and assessment endpoint a the your that commentary in in half?

Rich Hume

I There's of would important. yes, here I think are Keith. parameters that generally, that say couple a

because season, was year before So government year, the there or you first, about what a government the that spending the prior experienced in season, if purchase we think the of buying tepid that. pretty two COVID had is huge

a there'll believe we rebound there. So be

we'll know Windows declines starting of about the see They so is, is, the basically XX, third we when pandemic overall. in that the in had compares some back And will refresh kick cycle candidly, third to quarter, year second so of easier. the the the post in. all The begin half is the to wrap begun start are

Keith Housum

right, All guys. you. Thank I luck. appreciate Good it.

Rich Hume

Keith. you, Thank

Operator

our question will RBC. next take we Sameer with And Kalucha from

line is open. Your

Sameer Kalucha

okay? hear you Can Hi. me

Rich Hume

Yes.

Sameer Kalucha

was Okay, little all right great. rage flattish market number So year? the curious of we gave them Thanks big now, how your by drive underpinned going the the views new expect quarter, are the full what what one. high from are from about GDP for given in growth forward? they I'm you And the portfolio year the AI, in bit And the generative the number solutions different AI/ML GDP curious, When the two, taking as was Thanks. how we part? given are outlook. guidance to of in you last part are questions. I do beginning for like a a technologies, on that's growth outlook conditions where saw the

Rich Hume

you thank comments. your for Well, Yes.

we think First, GDP, the exists in have weeks as there's the in might that that we'll GDP flattish. their participate probably relates couple have wait as out that Last to reported, the the for see last that and you're some be outcome economists that and as flow reflected of reports events things I when real-time to markets it GDP, aware, we thought be. those well so that and do what yet to aren't would played job through been

data then now there. we second question, So and your cybersecurity, talk about growth which technologies, data then high analytics. we'll strategy, infrastructure, our see And when and analytics hyperscale go from and includes And where about would things foundation, on core we see looking or we when more become revenue of our work been that's its going at meaningful backward, of that had of the My themselves I artificial intelligence, emergence the really becomes the and has pure will, material analytics, AI predominance to for analytics, yet. it of a the on. a technologies entire sale you if new lot of market, sort say around or portfolio part think although stream hasn't experience they'll the they manifest emerge engagement which way medium or with in is through get first a and of make through our call their of kind what packaged then offerings our most I'll And time, where the directed. down customers customers, is first. smaller been our

As you and the all into accuracy the well it's know, the data when data. about you AI, of get

market. that solutions. is, in being greatly a projects, expectation believe and given the custom of artificial cycle development the through making intelligence go then might new I But similar my emergence way lot of as the be So first the will into package we its of that cycle whole deployed condensed

Sameer Kalucha

Thank Got you. it.

Operator

Joseph from question next our Cardoso take will with we And JPMorgan.

Your line is open.

Joseph Cardoso

guys. questions, the for Thanks Hi.

PC one least chain inventory So me. the seen over, relates months at it We've to points two data the in last like to some supply for just levels. positive one as

relates guys Just various as least date on then curious having about I'm the conversations seeing in some think XH your later just a any in more demand that of are to hear points. or becoming side, actually your with should customers, we seeing the to that you of partners those of at are just year? to data inventory. on channel tangible and you recovery suggesting -- you suggested you're that kind what it And

Rich Hume

the were precision should that through discussion our say with believe was lot out visibility that of true. I I there inventory led it Keith's fundamentally left broadly had brought we work extra an But vendors I within all PC down. inventory that's don't question. to call the channel. that's I of earlier was I'll to believe of the held the a We when And the the with by there discussed ecosystem to the anecdotally, visibility was inventory by for regard question, fact Thanks anecdotally, had resellers. have there off or And evidence

part green to ahead the question second months I So that answer currently. of you for year. To explicitly, do realignment, we if seen believe believe yet? No, sprouts there your I beginning do the of the haven't. as we half the will, have that's are opposed

Joseph Cardoso

appreciate color. Got it. I the Thanks.

Operator

And we Tim will question take from our Barclays. next Long with

Your line your line button. check open. Tim, is Please is open. your mute

Tim Long

about Sorry questions that. could. if here, I Two

the at look we're meaningful the decline. technology market, talk price pricing could then across advanced memory if and businesses, and you if in of the changes, inflated. pretty storage the First, PCs you business obviously seeing were server impact cost And device

curious So we a rest if you you. then bit talk up the showing how starting secondly, to in cycle cash to maybe conversion that any of and that your the And about year? if numbers? think see you're about can Marshall little of Thank

Rich Hume

the then for you part A Thank Okay. Marshall B. part I'll will question. and handle

So this bit in have seen by region, a PC. we activity price but varies little

we that situation around as if Given segment. expectation stabilizes will, be is PC you earlier, the about the activity, spoke supply supply that lesser there'll

We reductions. commodities of with flow through seen solutions, long a your It's we And which would since thoughts seen of have, within are good have around bill price we been we has yes down, emerge. time the as begin big there that, of obviously reductions activity prices price some a consistent been occur. have of anticipate to but those price the advanced coming materials part the commodity

held get that, that lot category the of when call The to rich a times these it early I'll too that down, customers commodity put take, go the configurations. with it, come while tell in ASPs more is of should other along of question I'll kind

economic leaner we will out configurations? or or that's have enough circumstance, the in see will evidence information next accept play that XX on I So but will that we the see customers, that yet, don't will given something probably be, question days. the

Marshall Witt

the if conversion saw that quarter had you the fiscal. similar beginning couple one, I to for for do did our given of to days feel still around assumption year, improvements, question, of around at of chain the capital XX. clear, reiterate the great. the get then saw going we And continue confidence to said we think at working We cash we decline on inventory power the what good billion my can cash hit stable in earnings the about And days-ish, improve I cycle that. that to X QX In of to XX and flow the plus. supply XX-ish. the would Ideally, expect to improve organization to by were you to rest to and the around or that being I that channels a be remains we're comments, continued free expect we be

Tim Long

you, Thank guys. Okay.

Rich Hume

you. Thank

Marshall Witt

Thank you.

Operator

Bhattacharya And with we our next America. of will Bank Ruplu from take question

is line Your open.

Ruplu Bhattacharya

Thank benefited advanced had Hi. Good my you morning. margins. strong quarter that also you looks for it solutions questions. like another Rich, taking and probably for

solutions changes? solutions the advanced for look And like? how did backlog structure weakens in do like? orders see And And from need if advanced benefit half, look in cost do much the quarter? So the what incremental would what trajectory reduction the margin you second

Rich Hume

of Lots questions there.

at one me So time. it let take a

the believe First, growth down solutions. backlog has running been advanced that it has that for assisted as in I certainly, our do

year. advanced approximately growth in it about rates have of half really higher began think when back overall, to was last you when Second, solutions the

the half the will bit a back comparison solutions. So advanced more challenging in for be therefore,

would were growth previously. So expect they as be the that rates wouldn't we

our as and of the new all to relative very spend, world think about and forward focused understand ensuring adjust year. the dollar very, actions, every region at we it We of measured. being and accordingly, to sure talked is about cost to being the we're calls all every spend look relates economic that ebb it flow our make us change very on cost on continuous discretionary of to of that structure the single hires in a prescriptive look our As and And as relates back couple we'll last of we've half think basis. the of to

that's And thanks way, it. Ruplu, for So we think about question. the the

Ruplu Bhattacharya

question details to you for just a reported Okay, reported also be you ask Did in I you've the on be I X% it that I teens. clarification. Rich. that, this, looks that, have combined that. on quarter? was It full is quarter, before company like A you ROIC. to a an Thanks in growth for I a year X% it basis. year this mid wanted talked not the wasn't if can had question ask maybe but Marshall, just you clarify on this last may a I basis. to missed XXXX may my missed quarter. ROIC XX.X% then there. have about Maybe But ago, And I it revenue because confirm apples-to-apples on guess

to So about of what And to X% X% Thanks. you for happen the above range? WACC, long of end ROIC we to in target high the get the how needs should to that think ROIC term?

Marshall Witt

is Sure. as address further that's how denominator calculated do have which merger, five continues capital average from come the quarter mechanics we first, that around so grow, the growing, is to Ruplu. ROIC the is we expected. The investment a away I'll

clearly, question the rates expectations. your in have interest with So is increased. our line on XX.X To WACC,

That on didn't, opportunity. we that in the investments externally terms Rich capital. how end around lot the be come our uncertainty remarks increased to out, the To basis our just of get to into at do has of our see that second make and roughly make interest it and to continues investments of for average see WACC our for to at just touch due It X.X% the a around right. what of the of for as with then again QX requirement prepared not We rates. returning currently experiencing. gave lot has and points We're we of WACC. and rising a for did volatility the overall M&A back of the We about we're guidance that hasn't above this that changed look when A to So cost does a weighted we what part year. what half give and with is XXX quarter X%, into XXX we you're guidance in guidance said question certainly we revenue we QX. threshold to in of business and rethought play want that his

Ruplu Bhattacharya

Thank Okay. I the you all for details. appreciate it.

Operator

And Tindle question take from James. our we Adam will with next Raymond

Your line open. is

Adam Tindle

$XX to Okay. an of a around all understand just Thanks. margin, Good to year. actual looking below of but morning. you that that that's sort for expand maybe guidance I half come the kind a this to year. based to and Marshall, operating X% X.X% conclusion of gross just the have would on want your that Obviously, made. on expanding I the all I first on of year-over-year not point we earnings it, on of net stripping X% you at for and where revenue X.X% out landed versus the piece of think comments stuff earnings for company, the for basis the growth, year tracking you're that of

switch that the something to what probably on earnings we're XXs of makes Is be going question we that sense low based look to see more closer And terms rates, Thanks. earnings you since So the year. guidance? current for you has that you're an maybe we more of right just seeing could to last to if at gave question wondering, what changed if to run that now? in

Marshall Witt

to allow start I'll Rich provide then commentary. and Yes,

of endpoint we said what in down with solutions we about what start we'll we majority year-on-year on just think the softer the a the I regions basis in and that experienced performed. quarter,

we'll So probably of income operating it driver I decline. think biggest the is revenue the itself call

being said, within and it more to market our I use position either was. more business for to To what share situation. we're that's as trying we the times, economic providing good like our anything We're is feel about better spend at X.X don't more in uncertain range. these that of the it position this market in of if that to efficient to allowing the ways to at profile the implies partners certainly or we As the and margin organization. about proud us, figure want be We and structure else uncertain X.X Rich, where know than with to our you us during they're in that. out us strategically also

Rich Hume

bit we financial think only profile add, a as that thing as talked The Marshall stated, I'd market is strong. And opposed time. this view else. all with engagement and more a we this is to to is about, a I comfortable as uncertainty, macroeconomic the with model our that repetitive, feel at XH providing the very and the participation challenge don't regard And just with it's anything had

Adam Tindle

the All any then of in cash quarters right. repurchase, you that billion forward, layer Thanks. that talked more buckets it'd going you And what and of think the coming generation. might up follow going the talking flow. volatility, to I to allocation for that's allocation, billion year, would said just gives secondly, year. kind you confidence? share that QX how capital negative that X since more thinking as cap about increase you're were through and from, some I cadence be think with cash the that guess be create Might for a and how on great? out And given Presumably about how we the and aligned Maybe Marshall, maybe can specifically, should remaining that's about translate you about that X

Marshall Witt

improves on as tends consume cash itself. days a Typically, Yes, days as in we probably I you XXX I'll answer on the what previous to that being just QX it goals strategies, probably flow. in And to would mentioned you our on cash of QX, could hasn't And I to of so perspective Q&A, the is I saw, of just saw, the reverse think cash question first million to cadence over we a Sure. QX. couple that being regards begins QX, three four, and allocation, positive in changed. end some that to think overall form flow similar capital basis and about from think and cash that QX. expect it Adam, equal up improvements and thinking

cash our XXXX. and feel in XX/XX free that returns back allocation know, allocate shareholders, reinvestment back about you between that business flow good for how the we As we still and cash flow to

cash desire it had to year. as Our reach forward. expectations, And about step has XX% that we'll if around we going attainment. continue to exceed our look for positive we feel at be where this mentioned opportunistic flow certainly expect to mentioned initial is we've And historically, up certainly aligned generation. XX% do for to we will you We And XXXX. repurchases and hopefully,

Adam Tindle

you. thank Great,

Marshall Witt

you. Thank

Operator

take Sheerin our next with from Stifel. question we And will Matt

Your open. line is

Matt Sheerin

bars, in comment sector? stabilizing? Europe. thanks. customers my selling And And of versus the but another you're you Yes, little drill about on what demand that of the And hearing you as versus in SMB sell in from advanced question, channels everyone. was those to terms the public solution that your had Good Rich, down you same when resellers bit think North morning, side, into, a various growing in as just large first Could strong thing terms weakness it those because they America. talked question. not it's

Rich Hume

the the a bit so think that this would for sentiment far, things I the I cycles. Thanks like words elongating of to of in tell Marshall. we through you terms seen as to bit question, a we a words evolve sell with in have change share relative the years Matt. cautious, that I'll like more customers

playing is sentiment. of a that economic of think circumstance in out, I a there sort is bit change So the as

what is macro that see level. from we the So

the be I relates Marshall, that seeing insights right say any provide it maybe But, are particular can fairly overlying sentiment channels? from no, some we differences to, much seems not As so numbers. to you would that consistent. between

Marshall Witt

look at we with consistent, it, sector, of is remained have large, the our and between aspects the public when medium, bar fairly go all great. small, that so retail, Matt, percentage buckets those Yes. allocation which

spend. to probably say, there's So you allocated, our at and know, I board, resilient SMB, portfolio as been if would look very you it generally this a quarters. how stayed fairly Rich of it just important last we've as is over three consistent aspect the these less across two stayed But said, market. throughout

Rich Hume

my more as other spend outlier. a jogging the but talking, the memory Marshall relative robust segments, sort was that's Yes. bit I being One only we was exception from think -- of to see I government

Matt Sheerin

it Okay, great. double of a in year-over-year. sneak quick up just And ones. digits like you said Hyve One, if couple I sounded was could that

you there? with the or and short-term also you what XX interest and bringing If on do anything cash to that through we And down down our modeling clarify that? borrowings expense seeing flow closer year, to your work or Marshall, free then the line, be like that should you're or so could expect million that

Rich Hume

decline think high if In about that that think we to quarter of or around at assembly XX% as Hyve the continue still you performance community, -- for saw than margin were strong. perform two a loose strategic reason work great, categories. and in into those is quarter we programs play lower growth, well performed three the shortage quarter but saw the type some continued for design, to two, has to terms one out. guiding somewhat look better performance perform still And one. buys, finally, good services, center about power more for or Hyve breaks you the that margins, well. in distribution-like at of expectation constrained. business of the part that's and spares, then expectation, quarter the quarter of and there's you there performed as in They're very Hyve expectations was but parts part to been good down It be provides, the of above quarter that revenue whether know, profile, that one And hyperscale, why continue it's resilient. data business said, With

there then expense, the getting to still elevated. interest been fulfill. yes, out to And some there just us it's for is So demand

somewhat QX generation You the the expectation flow see quarter XX the take in of that. It's and Matt, almost it in the of wouldn't of that It interest down off I two, in the quarter better gets probably expense that second I would at but can up paying half little I think revolver that doubled the down year-on-year. cash XX. tap year, we brings still much quite throughout assume million-ish meaningful. bit but a

Matt Sheerin

enough. so Thanks fair much. Okay,

Marshall Witt

because we as our but that and gross gross organization. portfolio. overall grew obviously mid in beginning meaningful, about growth want And of overall continue a just there, high particular XX% greater double is to refer add, I we around the technologies this than to be the Yes. Hyve had digit to productivity more when think becomes to billings, why entire think billings we're about we

Matt Sheerin

Okay. Thank you.

Operator

We will Shannon Cross take with Credit our next question from Suisse.

open. Your line is

Shannon Cross

a much. you had well. couple I Thank as very

terms obviously, end and what wondering within challenges challenges sector at, conversations layoffs. sector, in they're have any their financial I where the Thank about in just your I'm just pockets from the hearing of there's I'm you're as up. customers any follow I'm wondering, of what in there's tech First, And growth or can you. you're of with hearing and talk seeing you bit of the demand, seeing? with a verticals well? a then if your customers, some

Rich Hume

Yes.

that than it's end end don't we system. verticals around or particular the planning the what within Perhaps say in an technologies high around foundational Anecdotally, common maniacal are theme rest technologies focus vertical would the more really making people constraint a growth Shannon, the And the demand of be there's So or that not sure what hyperscale our call set. would purchase. customer of outlier all the then I sets of the on the have of and would foundation each very is I are infrastructure. their and that careful in a with fairly

statement. digital So all It of was seems dynamics a uniform end around the markets. type to of horizontal around more transformation offerings be

Shannon Cross

PCs inventory it for maybe are inventory little you of or the can you're was where normalized you about was on Okay. of costs purchases, Thank any more I it I'm decline what component where see Hyve? terms more you in but guess Hyve strategic what terms in some you think, there? did you because drove the a be just in composition have think you. of And the also, getting for strength inventory? maybe kind of know I given opportunities And levels Just close, you. you are? had in wondering maybe And side? I specific Thank curious inventory, then

Rich Hume

purchases the the on of with scrap all last on business. first sides start I'll Yes, inventory, question

clearly in stopped. a primarily around those scrap North element that's are America So aspect haven't little bit an and larger,

around the needed requirements within to that have to continue us question fast what purchase producing how Hyve, that out. and for We scrap to fell still purchases play that is and same the flowing They're quite of through. of continues kind discipline well. Shannon to about your

overall it that If year. think will this demand, was of think for somewhat the about I rest I elevated. continue inventory So

it's and that in starting quarter, unwind to Hyve think a that last As came said start one, regards into and to investment some collected had billed for quarter Europe And I Hyve and And is in and we were will made improvement still true we decisions then what QX consistent QX. down the board. the work that continue in inventory and Asia we fairly the that be year do to that there larger pockets as we itself Americas, that's I elevation across expectations will improvements? think our expect last it to was any to answer in are saw QX comment.

Shannon Cross

Thank you.

Rich Hume

Thanks, Shannon.

Operator

to time. call at Mr. turn there for remarks. Rich further the will I And this back closing Hume questions are no

Rich Hume

XX,XXX appreciate day. globe dedication SYNNEX. helping I'd Well, each to TD in thanks I'd And thank your joining our partners around and the like and thank today. proceed coworkers like our for you. their and very and And to thank vendors We us you customers focus in much. interest for every

Operator

concludes conference That call. today's

disconnect. Have nice now may day. a You

TD SYNNEX (SNX) 28 Mar 232023 Q1 Earnings call transcript