SNX - Earnings call transcript Q4 2024

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Operator

Good morning. My name is Julianne, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX fourth quarter and full year fiscal 2024 Earnings Call. Today's call is being recorded [Operator Instructions] At this time, for opening remarks, I would like to pass the call over to Jack [ Huttelson ], Head of Investor Relations at TD SYNNEX. Jack, you may begin.

Unknown Executive

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

press be release without permission. I our property This to over will TD Factors from Actual let well risks Form section X-K as turn GAAP within information, to positioning for flow, our the mentioned this statements results filings included results the non-GAAP reference about available may Before other contains growth, statements may other forward-looking as call with statements predictions, cash materially the in Relations rebroadcast website, not reports our are continue, me strategy, and events, that today's of or earnings ir.tdsynnex.com. you we periods. related including Investor conference and to return, stockholder future SYNNEX today's any estimates, certain earnings the forward-looking projections future call statements and SEC. our the call, securities demand, the forward-looking capital and federal as differ of of today and our filed release the expectations intend we Reconciliations and recorded those We in of discussed statements. Also, gross allocation during about result Risk billings. these is meaning in laws, in do will update of and fiscal the a or not non-GAAP Form X-K including XX-K, on now our remind we in including Patrick. our financial Form discussion plans and uncertainties Patrick?

Patrick Zammit

our to I fourth ahead. Revenue grew grew thank morning, We us. joining by billings share how well results X%. billion by buybacks flow cash year. positioned for returned you, and QX, and year of everyone, am fiscal flow cash Good you opportunistic during value year-over-year to XX% gross $X the are we Thank shareholders, dividends of and generated we our our meeting Demonstrating for for quarter 'XX. the in Jack. pleased commitment in free and to million full XX% target free year of delivering our $XXX

share me QX our factors performance. Let behind three

Gross grew year-over-year, saw strength excluding solutions good Hyve, distribution. by PCs. in broad our endpoint X% Advanced we in led geographic momentum billings in showed by strength across segments. First, Solutions,

portfolios showed cloud, growth analytics Solutions all digits profitable on Endpoint year-over-year focus grew within of to growth. double Advanced QX, geographic Our across in and data segments. solid Gross as continue cybersecurity, by our all profit and and we

saw revenue Hyve. line particularly top digits, QX, capabilities. in strong performance In double Hyve reflecting we improved Second, grew its by end-to-end

environment. will macro year-over-year Hyve Marshall discuss, a evolving operating QX business impacted margins. And reflect model the our growth in third, from an strength compare and As our of resilience tough and results

challenges of as enterprises and technologies of our are the partners AI, evolution conversations us efficiency IT opportunities capture TD critical a Our in operational diversified us needs creating product growth. continued consistent share many days, to XXX scale global like and like been evolving portfolio the allow over large CEO to flow. Having wide end increasingly for is my rapid a their by and integration enabled of users. driven excellence range spend, vendors. meet observations creating for new of I'd with to margins Digitization SYNNEX. of IT our further work free few cash ecosystem, is seeking complexities, to for the our from and role The the deliver and enterprises These

emerging software, navigate strategic are business hardware, increasingly partner solutions as relying that other deliver leader tailwinds, trusted, and their technologies. are the and a We IT's complexity, global turnkey us a and grow center of and this customers to integrate many powerful at of most cybersecurity, on AI vendors

to Let few Two business. global business our of choose examples recent top our how us India. me strengths ten their a helping vendors vendors are share their expand expand unique of to our

combined Our to specialized and and expertise requirements across distributor upholding all strength India, example, team business. In us with in to another vendor large strong is cybersecurity regulatory and for the commitment a and scale financial our in technologies major compliance efficiently IT helping shows management them Japan. their exclusive software sustainably as

leading grew Pacific, is strong cyber with our plays combined gross in in strong increase expand the market-leading Our significant to with capabilities major in year-over-year also ability in a by XX% relevance role continues place, franchises billings around in world. Japan, QX. Momentum Pacific, in our where presence this with we market vendor. With to more our market Asia Asia customers

growth a of For our comprehensive customer example, that key for chose our of manage With part us cloud AWS X-tier provider strength, large to capabilities and model. supply leadership we their and delivering us reseller business, significantly and manage example, reduce enabling solutions cloud [indiscernible] from of business a customers X-tier global a broad another avenues transition chain in the are recognizing us are new we and platforms, of choose workloads at a and while operating them. In scale financial services enabling to customers to choose costs, these enablement customized their reasons. and cost. Vendors to ecosystem services, users AWS manage the large our the increasingly for at value four low and

offerings. This creates to portfolio customers unmatched. end-to-end their solutions deep and expand our partnerships First, and with vendors our technology is enables

a to engine cybersecurity of go-to-market expertise technologies integrated it customers and collaboration and and technologies our in across At heart multi-vendor our costs. an Second, IT, AI We that all success. is fosters high-growth enablement innovation, solutions. relentless our partner culture grow major reduce With our to their operating following and our the specialist that like helps customers approach. deliver commitment enable

grow partners powered regulatory global and by ensure enter Third, meet across reach, are they deploy solutions, committed we market a geographies to of specialists, collection us requirements. And excellence. our large trusting while technology compliance and new multi-country enabling verticals, to to and fourth, operational

simplify integrate with great are key we our giving how a a to as provide Customers the the using We platform, business. manage as example the marketplaces, access central anything to of ability vendors StreamOne, a and us the service vendors. platform thousands of with whole hyperscaler customers to complex. hub Our cloud is

platform on service and marketplace and infrastructure real-time as provides reporting SecOps architecture Our Azure capabilities with announced FinOps billing AWS, procurement with Microsoft simplifying prebuilt and cycle connectors a powerful and recently automation hyperscaler management PSA capabilities, consumption, open syndication of like storefronts, API life capabilities, end-to-end catalogs. and connectivity. We white-label our

embracing customer because our platform, do are efficiently as them partners us, to are with enable partnering grow, so And customers we While our to scale next-gen leading we. our large base. vendors reach

to Moving Hyve. on

customer accretive Hyve continue infrastructure hyperscale surge offerings, believe continued to and while to capture new environment heavily spending and and that significant adoption continuing positioned to service our opportunities its the address services be we We grew year has throughout also management. ecosystem. opportunities Our are IT creating such continue in potential, greater will to link We to across for expand white Hyve to to to believe of With to key margins with the invest IT centers, categories expand business, areas as stabilizes, space portion momentum and continue product the we quarter as we ahead, our to areas. our of overall opportunistically continues this the segments cooling in power well will the position of environment geographies, the ahead and by cloud the IT hyperscale AI-driven year data to operating results connecting our driver build a the will opportunity that for look a strengthening as on market. vital improve growth. In liquid in demand and market demand, and we

sustainable Any cash prioritize internal the value decision flow for needed capital customers allocation. specializations investments cash to deliver intensely create certifications thoughtfully high-impact the and building Additionally, and make, shareholders. customers be help continued solutions demand whether ensure that and to and are business enablement to evaluated or to complex increasing higher-margin more returning we we committed We for to free we services are growth, for profitable technologies. and shareholders acquisition carefully remain our will meaningful investment, delivering meet our disciplined

Now financial I Marshall to performance and will our pass for it outlook. Marshall?

Marshall Witt

good everyone. gross X.X% billings year-over-year, were guidance and a range. expectations. Total and revenue billings up the and of above the quarter in morning exceeding We with had net to billion, gross Patrick, $XX.X fourth our performance good Thanks, midpoint

year, business high year-over-year due year. and our an Net reduction aligning solutions the from in lower QX, began the the was the exceeding net higher that roughly in quarter recovery of growth, half, high up As anticipated mix endpoint Gross billings and we that of throughout X% we XX% to first anticipating. In which XX% the from signs which second we was billion, gross sequential half, than was was shows down revenue were there and roughly gained growth expected of primarily the billings to momentum revenue, end revenue a to X, flat growth approximate $XX.X range. and guidance mix. and

Endpoint portfolio peripherals. driven Our by grew Solutions PCs X% and year-over-year,

driven has see in or Our which basis across XX primarily growth. Gross and software. pleased hybrid were thesis driven decline $X quarter, Hyve. Hyve, was our gross point a tough X.XX% profit billings grew year-over-year, supports growth in Event XX% and by cloud portfolio Advanced Endpoint Solutions to We both Solutions the market billion, returned to compare a that [indiscernible], by the representing IT year-over-year, of

The Advanced last we growth XXXX. QX of Solutions which as Gross expense of inventory XX.X% X.XX% expectations. is experienced in sold as $XXX billings, elevated profit the cost cost SG&A expense basis reminder, year-over-year. and profitable or aged margins define through of representing improvement was the solid gross growth. Non-GAAP point were on to a to which was billings gross X gross basis year, we recoveries portfolio, inventory with percentage an Sequentially, profit, in up we showed as As margins ratio recognition to points. and gross a year-over-year part SG&A continue distribution non-GAAP our of XX million, quarter consistent and from Hyve, carrying costs of of percentage, fourth as profit in focus

$XX and be we on resources gross and or basis with approximately $XXX leveraging finance higher to our was expected operational primarily, cost decline important driven decline, million, an of were XX%. which million, higher the quarter. The our percentage to previously excellence profit expense than to metric expectations. was we as due Interest effective income discussed. that throughout improve a focus XX Our and was look tax grow non-GAAP average charges profitability. Non-GAAP to high The profitably billings, point to will operating headwinds year-over-year, representing business rate gross was consistent borrowings continue by X.XX%

lower than above the both expected rate midpoint diluted was income mix. favorable tax earnings range. net and items million our was due to of $XXX effective $X.XX, non-GAAP non-GAAP Our and Total share was discrete per guidance

Turning to sheet. balance the

Cash of X. with flow quarter networking capital days, $XXX million cycle stockholders in X, sequentially. conversion billion, down million quarter $XXX from for Free dividend For returned $X.X $XXX payments. share [ was and million We X, quarter. ] quarter cash year-over-year and was was million repurchases $XX of $XXX XX million to down the

For expectations flow in the in with in consistent of fiscal 'XX. full year was roughly which over flow, form to $XXX $X of returned just dividends, XX% the million free of stockholders we billion representing buybacks generated XXXX, cash cash and our and free

quarter, the with per Board record January our January common of cash stockholders of quarter and of on XX% to our XX, and XXXX. billion. debt approved share, payable current cash of of a will dividend $X.X on ended of the close equivalents which Directors billion XX, $X.XX increase XXXX has cash the as $X.XX We business For be and to

our leverage gross X.Xx, was net ratio Our X.Xx. was leverage ratio and

to on growth billion, $XX.X billion the moving expect to our quarter, in at we in range first Net an gross the Now of all numbers of range to approximately anticipated to XX%. in midpoint $XX.X for billion which representing constant $XX.X to be and billion, are non-GAAP, a X% net X% and that outlook. billings adjustment revenue of will These gross currency. will be the $XX.X of translates approximately the

million. of of to based Diluted $XX $XXX earnings range $X.XX of on diluted will $X.XX. euro $X.XX will in rate share, per weighted dollar of Net approximately share to the is in based the to range million. $XXX be income per million Our which average shares be is a exchange on outlook outstanding

for before, quarter primary is a mentioned an basis, had year-over-year margin approximate and in XX driver with in on on in decline an I've point X impact expected margin of basis 'XX, elevated As Hyve the margin fiscal the quarter X.

expect end will fiscal substantially quarter headwinds lap of We X 'XX. of these by the

We a and of expect XX% $XX rate of interest tax million. approximately expense

should growth and basis in back and particularly Solutions, grow billings to compare As Endpoint growth which currently server a fiscal we as 'XX, a cloud analytics continued data our portfolio and percentage think PC year-over-year easier about and on turn Advanced to full we and continue in we security Solutions the benefiting AI. expect expect refresh An cycle. networking, year from in mid-single-digit gross to

sheet We expect to billion All to year committed including $X.X our remaining our us stock focus fund and Investor to allowing be free fiscal that, host billion keeping we the in for well cash where free detail more we remain to we'll returning market it flow cash questions. XX, need and Day April repurchases, on targets. to IT balance unique to and closing, partner disciplined repurchase on we with global from IT generate flow open mind investments on we and to to a approximately benefit shareholders Operator? choice for capital share believe provide the capabilities, strategically $X.X authorization. an In our in of the plan medium-term up on have grow will recovery strong our have while remain business. We allocation, the positioned a distribution. With

Operator

Raymond Instructions] Adam James. question Tindle Our [Operator comes first from from

Adam Tindle

manage business declining plan on growth, wonder revisit more incremental talk QX versus if a and and going margins balance seeing, are tenure you philosophy. if same. I weighing start. going just just of a you that, results to term right but we're you We've under double-click I evident over in about why? around the the margin seeing as of thinking analyzed take narrative imagine here. quarters how but put you've margins. understand given Growth the And QX wanted to the guide current the bit might you're I part the trends the a strong long qualitative And X investment we're profitability decision wonder growth, that as covers, and step now Patrick, what's going medium profitable got little you're in and not forward? to that to how a it's there and the I could your back about Hyve, that as that business and under implies on

Patrick Zammit

question. Yes. Thanks for the

pleased So very you and with at look quarter, we the distribution growth, again, so Hyve. when are the in both

positive. Hyve, -- a mean, at the fact, drop you margin look which and and through caused bit good again, exclude if stable quality, was growth income operating growth, growth, in it. going we to the is sales all one-off year-on-year, that explain year If distribution only, the margin, of that from was a last had means Marshall I very you maybe little what more GP detail

and exclude If an line, a to, you again, a nice that GP fact, very had Hyve growth only top not one-off, from from income. from a operating in

if indeed, I you this you, drop-through will, to curing if if, the can those we we are exclude promise so pictures. Pro tough which forma, growth. compare, committed profitable And So is are the one-offs. seeing we

asked. So you just second question on the rebounding

of the which our series the digit weighted Their growth. -- portfolio. margins cost investment to return exceeding the high double-digit also So are is a overall justify differentiators market of Hyve is accretive capital. And in double having on really the

to that So to long for because run. And appropriate to the Marshall, comment it's believe of maybe on invest you the that in that, one-offs. want we continue business

just to in perspective? So it put

Marshall Witt

Hyve, And capabilities, in engineering increase of manufacturing skill in what said, average, part strategic quarter of not profit logistics of did X, revenue existing of our projects and footprint, reiterate only Hyve some in liquid terms ] Patrick and repeat company whether in further to do growing it's and [ that that margins. side and through bundle expansion sets business. to strong space, to than and not recoupment year, cooling selling address fulfillment of inventory of had the Adam, anticipate power just the space, new portfolio, And our in some terms in finally, faster and are of around year. prior needs. margins or Yes. to primarily facilities programs the this support expect and in and but which is revenue Hyve investments both we then And the centers

it as of years in one it to the AS we've we has somewhat over Hyve past, the lumpy X important an and believe through believe still as we just unpredictable, So and last be said beyond can organization. our solution, element think any that is well year, our portfolio, performed quite but the X given for

Patrick Zammit

focused things compare, want just and be thing, will quarter be of be we growth, comparable, I stuff that, [indiscernible] Because in the the add increasing that have QX. see the is which you to The line After which sure one is then not more at to base on the more going is, X normal. drop again, okay, sales. through will making generating will -- only everything is drop-throughs normal with also team on GP but are least

Operator

Vogt next question David from Our comes from UBS.

David Vogt

think I how heard of Marshall the a going Europe the whether contemplated maybe there, know in in the And in from just seeing I then macro a the that from U.S. environment revenue bit it's maybe of out particular gave was. But impact it's Patrick, swings 'XX. currency. I that you're can from or don't of you the that euro out on on a perspective unpack guide follow-up. kind market, what's reference kind where a a have perspective plays little what whether thinking or you billings about in you're I

Patrick Zammit

Yes.

in saw So what we QX.

X% So from last market. about have the -- statistics distribution in the market grew we The quarter.

whole the the to market. -- if the environment, so at I QX, that some environment, [indiscernible] not look true And creating, slowly little macroeconomic instability only outperformed is grow a uncertainty continues would the political the in it's but So say, you macro but it in market. bit obviously, we

But is customer advantage uncertainty sorry, a there are to mean, that -- in from growth. observing today Now what market the level materializing we the in demand of of in it's we have And Europe, continue we are base. distribution positioned market. market, you the in our I the very in take well is continue we and that opportunities true it's the market not -- dynamics of but that

David Vogt

it. Got

follow-up this -- in And so Marshall on maybe could well. chime would as my be

growing So Are going Europe distribution move that preliminary taking we full 'XX? as number. quo America this billings you're the share, if too, PC is guiding and market year you European the APAC market talk in to that status server. you're maybe expect relatively mid-single-digit guidance to of obviously, So is we centric and more about recovery through and Is your point? fiscal remain a at did is

Marshall Witt

I'll perspective. give company David, a you response less organization response a and broader Europe of a from more

As get out in for and X. fairly expected X once has past QX, play to is Patrick mid-single-digit QX, rate and expectation said, we that growth consistently

revenue As terms slightly. improvement patterns that we year. have X. going what to in difficult seasonal business we of of the typically has with slight pretty evolves to how is IT like, other think our strength a X, forecast that that is through potentially improvement They to X will in mentioned, the certainly economies do it's similar of realize second but in to way margin revenue A of to about we we like and the that quarter spend, quarter we looked understand uncertainty and the quarters our tend try recovery be overall there and look year then Patrick the just and [indiscernible] just of that expect, in in an this build the and the balance due believe that profile. And and so. out in be quarter, lot X quality in we margin we finished revenue do up see

Operator

Goldman Our Sachs. Michael question from comes from next Ng

Michael Ng

you just could midterm of next cost just any could recovery, quarter, if Marshall. Patrick, some year? peripherals. could just you one qualitative cash free follow-up was able for tariffs achieve wondering you wondering talk [indiscernible] any I to there quick if flow you're next to the percentage in the around strength thoughts I potential next I reseller about for gross a was about for seeing Marshall, if stocking this to I think particular on color going ahead I Patrick you any and that. had whether the kind And was Are year? And some wondering outlook of year? talk just provide then, profit be

Patrick Zammit

thanks lot. Mike, a

already category. increase. we and We ], lot concerning So the single reason to QX, in for a a recovery, tariff coming [ growth There's QX. we comment that again the if is in saw the in of high uncertainty grew it. PC about market digits saw anticipation of Tough the in it in a

mean that for XX very recovery using as growth. I reason is pandemic. the PC So driving the demand fact refresh the clearly a the coming from would had prepare what need it the this in really, be is Windows and I the cautious to for aged base you

two would The are the you driving commercial focus to the growth. the if on suffer. driving overall consumer the those to segment, the across it's that, So world. clearly PCs We look the which made market, at again, add decision commercial demand. I the segment for is segment continues

faster, that growing us an And advantage. so commercial gives

So about And PC Marshall? the question. that's

Marshall Witt

Yes.

on regards medium for but So cash free flow, only about comment term. the to Mike, upcoming not over questions the in your year, the

flow a us We 'XX. base cycle do outcome that improvement get earnings do for our year. earnings to the billion. of cash $X.X expect allow to cash we expect conversion So driven about about growth to in That's primarily $X.X and expected billion free in our by

term believe we've appropriate that, set. billion on that's For hold and still to term, that as $X.X We the medium referenced target to longer or aspiration. our an

We are underway.

we the cost came year XX% that cash second it of some half. with we probably we're around your stay quarter we're I around regards to shared strategic that will And you medium-term to that to in X-year The some that see that improvements delighted that the of in able target to for at expectation share should X- be XX%. around further plan expect around understanding and refinement with and to half I the flow. In with think going you will question Analyst slight think for come a that is other we out last Day. first we're building GP,

we an Our confident operational our business forward. efficiency lead and focus projects a organization. going will for sustainable to the way this remains important that do quite improvement We're

Operator

next comes Cardoso Joseph from question Our JPMorgan. from

Joseph Cardoso

a you in of space footprint peers here, guys organic talked color it like you're do we're peers looking for color more where seeing liquid and portfolio some more the optics. on your well. your invest? you power a and look? as in is was around here view to that how the or how about investments backs provide an up of just lot here? So space? And area a focus, Or focus to if areas just an against pipeline you on your And from high cooling the M&A you curious And potential some of of looking I any more And investments are this could shift? bit as does you then

Marshall Witt

Joe, please I'll start needed. first, we're and fill then Patrick, where in

So in response. the comments heard on yes, previous my you

peers, And footprint that. In we to our ODM right a aspects world. provide the and in to right want for set right engineering an design to we investments of others. elements and to out continuing our and in sets. in and designs act and ability codesign. as and make three capacity of We those our know, design. Joe, skill out capabilities continue to own ourselves. do to is we the And manufacturing build work expect We have behave regards that skill you around all We the build continue the capacity [indiscernible] to

customer continuing go of bid to is competitors the going know, So competitors. continue plan we And markets that's have. to with now, our those all we're that doing and and market the question going opportunities, our that and feel in inorganic X more of in we -- facing as just expand game be the internal we the what our serve think those and overall to years. And feel growth organic go you thinking that when versus to We we is to customers important and this about to to the have. opportunities about like we're for we've be aspect well around are you quite shared had base then I with an an discussions next X those

Operator

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

Ruplu Bhattacharya

billings about 'XX, XQ for mid-single-digit I said digits growth you talked 'XX, from to in quarter XQ. And think If every hopefully, and and X% I fiscal you're and Marshall, both grow, Advanced going like segments this mid-single to year like look fiscal X%. and But for fiscal it Hyve you PCs 'XX. grew at Solutions well looks well. recover do grew have Solutions should in Advanced Endpoints now as

give think Solutions? How So Endpoint that growth growth between us Advanced in should and on the thoughts relative can you Solutions billings fiscal about we your relative in 'XX?

Marshall Witt

AS. Ruplu, yes, in product and you not of well. We comments Patrick terms But as by and I'll do are then have ES start some yet guide portfolio right.

your we comment at And outcomes, we're that the is then in whole the And falls. us conservative at a customers. of on our the and side way is build informed about we outcomes range Patrick? expectations Our growth. more just X% look Hyve, to delivered volume put both by our From should grow given context in relative those the of given just perspective forecast look demand the tend go out the by and outcomes, unpredictability of that some default or and the to forecast range we towards of of to how that, to

Patrick Zammit

Yes.

to are So starting take the a when that market, most technologies to have look all we them I good have you at today, have mean, the will or momentum. -- fact is of

last low The last we particular had tough with in growth year. is still about networking us, behind I been so year. compare in see recovery compare suffering single-digit networking, AS, has think you despite in QX, tough mean, a also. we should If By way, the

macro what the Geopolitical, the Now to put in year, Europe, you particular impact demand. tariffs, macroeconomic, on in will things for the uncertainties. in be the whole have perspective

a view of some dynamics the risks find So some the again, overall and the in are between, balanced creating dynamic. tailwinds, market uncertainties the of trying the we to are some on of which

guidance account. into the so we've taking is that And provided

it quantify with uncertain our this guidance the yes, would that's We But I for are environment. comfortable despite moment. how

Operator

Our from next Ashish RBC Markets. question from Capital Sabadra comes

Ashish Sabadra

focus to the the as shift the only wanted mix XXXX not rest just about quarter, think impact first of I as well. but we on of

Patrick Zammit

probably look our continue here, market so to have another PC important endpoint -- category you the is growth. if quite So which mobile, portfolio, the the is a and There's solution, at should impact we on which Europe. demand the in most what moment, positive be going a mobile be bit going business is comes we for muted. That's European the statement, little from see is by to our -- more way, of more to a

how market -- again, mean we the compute, AI in to for moment, Endpoint. When Advanced should Solution, distribution, the that the you look I their By demand on we cases. specifically see that's see AI enterprise what the customers the space, not are looking way, for at we Enterprise use continue compute for servers, so only So recover. see for

demand customers, I really recovering. category of specific driving not it's So is the which Tier are very except talked yet service traditional the networking. X for CSPs. But a about

and to cloud Software, security should do well. continue

do that's bit on see. probably next this on with depend year. than progress based end little moment. A -- again what mobile at I think So that, will what that we very faster AS as what will we of point today, should based on a But see lot

Operator

comes from question next Northcoast Housum Research. from Keith Our

Keith Housum

the driven your how you in of -- there a terms other obviously, little with to more quarter, was guys some relationships of your It have your for the does wanting geographies. Can much vendors? -- sound vendors you them companies the with growth like versus terms some solid you growth wins market take and growth trying that. just to unpack some perhaps more, to the existing of expansion unpack end strategic In bit quarter saw a are

Patrick Zammit

we look What don't quantify see don't We is -- twofold. at Yes. we it.

you indeed, the the So of have market. dynamics

leverage our success continue franchises relationships good in to key our the win we to markets, global see and so. We all some doing

For the to the functionalities that's the for future. in referred impact we don't for India, see but I to, obviously, position well Yes. our us results, going yet

we are faster market play. it's to demand So addition, It's dynamics short -- us proposition our the our in think market in we us what grow go-to-market things. value term, mean, I the and And enable in two of I differentiating the in than countries market. the

Marshall Witt

question. end And to prior percentage in end you're of fairly your feels stable just us in QX, of comparing feels pretty relationships. add just Keith, or just I stable the it terms It whether market would year markets QX terms our on

Operator

Wang question comes George Barclays. Our from next from

Dong Wang

kind you seems storage, you interesting the haven't the Endpoint, well. quarter. you called growth unpack of on It's storage peripherals? just also peripheral out as to poised including much too for of guys shifting can kind some Firstly, on growth talked in But

you can double-click kind if maybe you subsegments, can? So of [indiscernible]

Patrick Zammit

we demand on see back. Yes, peripherals, coming

our much for as But low in For the the with to possible of is strategy bundle space. PCs, sale as that moment, it's example. peripherals single-digit growth

the mean, I So the we continues that PCs we in as dynamic hope to that bundling PCs. peripherals success have on

and compute segment that from first common market storage, center, segment of quarter. -- I it's didn't last have a the it mean, a what you But data in the that -- it's where mean the very the storage I market comes -- On when quarter then I we follows. last recovery mean grow

are despite confident we quite muted. in so coming storage for the fact the quarter, last relatively was yes, that, quarters And

Operator

from from question Stifel. Sheerin Matt Our next comes

Matthew Sheerin

You're Marshall, ones around gross of should thinking Two the One, you think -- just What about talked mix X.X%, lot running X.X%. me. we quick about about margins? for a business.

to through Given second there that going is in you're stability model? would that right Or to any half the changes and number the move be higher? that talking year, the the mix that are about

Marshall Witt

op X% exit the growth for margin around stability comments operating margin, question. to quarter don't are but commensurate refer income. earlier as thanks to I -- fall a being gross we'll should guide through Matt, we the of have that billing We on X made

earlier, X. shows improvement think stabilize. in said think some operating in normal in I that we we margins seasonality So Matt, margins growth quarter do as And will

Matthew Sheerin

other Okay. And of customer. that ramp customers? you've to ramp us relative know Could a that of strong the was growth Hyve in to you I due business, and very second the know part you and of I opportunities for are terms where tell major there, had

Marshall Witt

And typically partnerships, we see we are our that strong base continue to on to as expansion performance customer capabilities expand then capabilities our 'XX. earlier, able quarter We're in more and that with quarter as services that and another working we're good I towards X, other with relationship of said opportunity customer, just and grows. And performance excited to the in Hyve expected Sure. with customer Yes, other in X. strong through were to into and further services comment as bring expansion we about there's this be the going believe move up. year and

Operator

next Capital. Valero Loop from Our Alek question comes from

Alek Valero

This Ananda. question actually another you is Hyve Alek have I for on guys. for

this demand, throughout you how year? them year? AI guys you the expect greatest levers gen and to view the would do And play out Hyve as on So

Patrick Zammit

also fact, compute, is networking. on -- So strong Hyve, is active only not in on on

you is So project-based. -- a is know, and which business this as

several on working compute. are we So on projects. Yes,

opportunities So see also we in And on today, see compute. again, compute. And demand will we that are traditional is some -- on space. good we AI networking heavier

Operator

[Operator from Ruplu Bhattacharya question of Instructions] America. Our comes Bank next from

Ruplu Bhattacharya

to question margins. just I Hyve wanted the ask on a clarifying

there customer a even year-on-year talked any investment You impacts does customer, and inorganic of first higher quarter. and there the Patrick, do M&A? in get headwind you future for and customers? And mix plan is the current software quarter some have have of Is software that there that when in headwind services increase the to to then or from Is through services margins? And new growth about or second a ramping -- the upfront margins. you any other any

Patrick Zammit

the services with start you Marshall, I answer and will on -- software. and

Marshall Witt

get touch We're said But doing to those logistics SG&A making customer. investments ramped So around we're it I the earlier, want we to the should doing normalize and do somewhat to requirements. Hyve close margins on nothing we're some and hope as in for out, as some some to the continues of investment headwind, in and footprint will just and mature. but skills, out customer to that to on back what build that is where that manufacturing -- margin headwinds within we're serve still the the well. expect I the there's and that be, 'XX second perform ordinary

Patrick Zammit

Yes.

different That's we services and as it's in growth. the software opportunity segment. software -- we've area where look for an an is mean So at been that again, we consistently technologies see I software, growing. On

We again, value very franchises, think There market. are getting some be to where to in may we positioned that are grow We countries. be we countries well the we investing competitive differentiated those than those and in general. are faster and missing are on, in working franchises propositions

of us going It's Day. our getting accelerate. which get update to services, I it where the share opportunity details you for is So find is want at for Day an acquisition to But clearly in again, an happen you franchise will we If, Analyst on going to meets be the accelerates more and to will requirements. On accelerate most -- to the the what organically. wait we an that us capabilities If space. to prefer Analyst we again, our do. give acquisition, details strategy more can

Operator

Valero Our next question comes Loop from from Capital. Alek

Alek Valero

A follow-up. quick

can networking, guys current inventory And over you provide think is on any do you inventory So ]? on networking demand? industry guys the system [ in and the color the bomb

Patrick Zammit

Yes.

on compare backlog. When from by So very XXXX standpoint, to -- at we because technology a growth year. of WiFi lot demand. it we year, of is going Last inflated the expecting you tough bring are this the was the networking, had look we a X I release mean,

centers front AI switching, We terms we of in of technology. data have also that to the know us of the upgrade the support in so

is we underlying of also So but feel demand, because the because us. mean I the confident behind tough compare

Operator

over I closing turn the questions. back further Patrick no would to to remarks. Zammit have for like We call

Patrick Zammit

everyone, day. and next globe We want importantly, partners you, our around team I to our our serving of outstanding I the support, us. to to dedication you thank for over and joining their have investors hope to XX,XXX forward our coworkers customers, a look customers. take their Thank for good for quarter. moment reconnecting a

Operator

conference call. That concludes today's

Have nice day. now may disconnect. You a

TD SYNNEX (SNX) 10 Jan 252024 Q4 Earnings call transcript