- Fiscal fourth quarter revenue of $14.4 billion, within the
previously provided outlook of $14.0 - $15.0 billion.
- Fiscal fourth quarter non-GAAP gross billings(1) of $19.7
billion, at the high end of the previously provided outlook of
$18.5 - $19.7 billion.
- Fiscal fourth quarter gross margin and non-GAAP gross margin(1)
of 7.07%, up 55 bps and 44 bps, respectively, from the prior fiscal
fourth quarter.
- Fiscal fourth quarter net income of $188 million, and non-GAAP
net income(1) of $286 million, exceeding the high end of the prior
guidance range.
- Fiscal fourth quarter diluted earnings per share (“EPS”) of
$2.06, and non-GAAP diluted EPS(1) of $3.13, exceeding the high end
of the prior guidance range by $0.23.
- Fiscal 2023 cash provided by operations of $1.4 billion and
free cash flow(1) of $1.3 billion, exceeding the previously
provided free cash flow(1) outlook of $1 billion.
- Returned $751 million to shareholders in fiscal 2023 in the
form of share repurchases and dividends, up 213% from the prior
year.
- Announced that the Board of Directors has declared a Q1
dividend per share of $0.40, a 14% increase to the prior
quarter.
TD SYNNEX (NYSE: SNX) today announced financial results for the
fiscal fourth quarter and fiscal year ended November 30, 2023.
Consolidated Financial Highlights for
the Fiscal 2023 Fourth Quarter:
Q4 FY23
Q4 FY22
Net Change from Q4
FY22
Revenue ($M)
$
14,407.3
$
16,248.0
(11.3
) %
Non-GAAP gross billings
($M)(1)
$
19,744.4
$
20,913.0
(5.6
) %
Gross profit ($M)
$
1,018.6
$
1,059.7
(3.9
) %
Non-GAAP gross profit ($M)(1)
$
1,018.6
$
1,077.4
(5.5
) %
Gross margin
7.07
%
6.52
%
55 bps
Non-GAAP gross margin(1)
7.07
%
6.63
%
44 bps
Operating income ($M)
$
286.8
$
334.2
(14.2
) %
Non-GAAP operating income
($M)(1)
$
426.6
$
495.6
(13.9
) %
Operating margin
1.99
%
2.06
%
(7) bps
Non-GAAP operating margin(1)
2.96
%
3.05
%
(9) bps
Net income ($M)
$
187.5
$
221.2
(15.2
) %
Non-GAAP net income ($M)(1)
$
285.6
$
329.8
(13.4
) %
Diluted EPS
$
2.06
$
2.31
(10.8
) %
Non-GAAP Diluted EPS(1)
$
3.13
$
3.44
(9.0
) %
“Excellent broad-based execution by our team, coupled with
continued progress on our margin-accretive strategic initiatives
enabled a strong close to the fiscal year,” said Rich Hume, CEO of
TD SYNNEX. “We successfully navigated a challenging market
environment in fiscal year 2023, generating robust free cash
flow(1) of $1.3 billion and returning $751 million to shareholders.
We are well-positioned to capitalize on the growth opportunities we
expect in 2024, as the IT spending environment is anticipated to
rebound.”
Consolidated Fiscal 2023 Fourth Quarter Highlights
- Revenue was $14.4 billion, compared to $16.2 billion in the
prior fiscal fourth quarter, representing a decrease of 11.3%. On a
constant currency(1) basis, revenue decreased by 13.3% compared to
the prior fiscal fourth quarter. The revenue change was primarily
driven by a decline in our Endpoint Solutions portfolio as the
industry continued to see post-pandemic declines in demand for PC
ecosystem products. A greater percentage of our revenue was
presented on a net basis due to changes in product mix, which
negatively impacted our revenue compared to the prior fiscal fourth
quarter by approximately 6%.
- Non-GAAP gross billings(1) were $19.7 billion, compared to
$20.9 billion in the prior fiscal fourth quarter.
- Gross profit was $1,019 million, compared to $1,060 million in
the prior fiscal fourth quarter. Non-GAAP gross profit(1) was
$1,019 million, compared to $1,077 million in the prior fiscal
fourth quarter.
- Gross margin was 7.1%, compared to 6.5% in the prior fiscal
fourth quarter. Non-GAAP gross margin(1) was 7.1%, compared to 6.6%
in the prior fiscal fourth quarter. The presentation of additional
revenues on a net basis positively impacted our gross margin and
non-GAAP gross margin(1) by approximately 43 basis points.
- Operating income was $287 million, compared to $334 million in
the prior fiscal fourth quarter. Non-GAAP operating income(1) was
$427 million, compared to $496 million in the prior fiscal fourth
quarter.
- Operating margin was 2.0%, compared to 2.1% in the prior fiscal
fourth quarter. Non-GAAP operating margin(1) was 3.0%, compared to
3.1% in the prior fiscal fourth quarter.
- Diluted EPS was $2.06, compared to $2.31 in the prior fiscal
fourth quarter. Non-GAAP diluted EPS(1) was $3.13, compared to
$3.44 in the prior fiscal fourth quarter, and exceeding the high
end of the prior guidance range by $0.23.
- Cash provided by operations of $211 million, and free cash
flow(1) of $168 million.
- We returned $374 million to shareholders in the form of $343
million of share repurchases and $31 million of dividends.
Regional Fiscal 2023 Fourth Quarter Highlights
- Americas:
- Revenue was $8.4 billion, compared to $10.0 billion in the
prior fiscal fourth quarter, representing a decrease of 16.8% on
both a GAAP basis and a constant currency(1) basis. A greater
percentage of our revenue was presented on a net basis due to
changes in product mix, which negatively impacted our revenue
compared to the prior fiscal fourth quarter by approximately
9%.
- Operating income was $177 million, compared to $222 million in
the prior fiscal fourth quarter. Non-GAAP operating income(1) was
$278 million, compared to $324 million in the prior fiscal fourth
quarter.
- Operating margin was 2.1%, compared to 2.2% in the prior fiscal
fourth quarter. Non-GAAP operating margin(1) was 3.3%, compared to
3.2% in the prior fiscal fourth quarter.
- Europe:
- Revenue was $5.2 billion, compared to $5.4 billion in the prior
fiscal fourth quarter, representing a decrease of 3.0%. On a
constant currency(1) basis, revenue decreased by 9.0% compared to
the prior fiscal fourth quarter. A greater percentage of our
revenue was presented on a net basis due to changes in product mix,
which negatively impacted our revenue compared to the prior fiscal
fourth quarter by approximately 4%
- Operating income was $79 million, compared to $77 million in
the prior fiscal fourth quarter. Non-GAAP operating income(1) was
$117 million, compared to $135 million in the prior fiscal fourth
quarter.
- Operating margin was 1.5%, compared to 1.4% in the prior fiscal
fourth quarter. Non-GAAP operating margin(1) was 2.2%, compared to
2.5% in the prior fiscal fourth quarter.
- Asia-Pacific and Japan:
- Revenue was $838 million, compared to $834 million in the prior
fiscal fourth quarter, representing an increase of 0.5%. On a
constant currency(1) basis, revenue increased by 1.3% compared to
the prior fiscal fourth quarter.
- Operating income was $31 million, compared to $35 million in
the prior fiscal fourth quarter. Non-GAAP operating income(1) was
$32 million, compared to $37 million in the prior fiscal fourth
quarter.
- Operating margin was 3.7%, compared to 4.2% in the prior fiscal
fourth quarter. Non-GAAP operating margin(1) was 3.9%, compared to
4.5% in the prior fiscal fourth quarter.
Consolidated Financial Highlights for
Fiscal 2023:
FY23
FY22
Net Change from FY22
Revenue ($M)
$
57,555.4
$
62,343.8
(7.7
) %
Non-GAAP gross billings
($M)(1)
$
77,246.1
$
80,633.2
(4.2
) %
Gross profit ($M)
$
3,956.8
$
3,900.2
1.5
%
Non-GAAP gross profit ($M)(1)
$
3,971.9
$
3,996.3
(0.6
) %
Gross margin
6.87
%
6.26
%
61 bps
Non-GAAP gross margin(1)
6.90
%
6.41
%
49 bps
Operating income ($M)
$
1,078.0
$
1,050.9
2.6
%
Non-GAAP operating income
($M)(1)
$
1,642.3
$
1,724.0
(4.7
) %
Operating margin
1.87
%
1.69
%
18 bps
Non-GAAP operating margin(1)
2.85
%
2.77
%
8 bps
Net income ($M)
$
626.9
$
651.3
(3.8
) %
Non-GAAP net income ($M)(1)
$
1,053.6
$
1,147.9
(8.2
) %
Diluted EPS
$
6.70
$
6.77
(1.0
) %
Non-GAAP Diluted EPS(1)
$
11.26
$
11.94
(5.7
) %
Consolidated Fiscal 2023 Highlights
- Revenue was $57.6 billion, compared to $62.3 billion in the
prior fiscal year, representing a decrease of 7.7%. On a constant
currency(1) basis, revenue decreased by 7.5%, compared to the prior
fiscal year. The revenue change was driven primarily by a decline
in our Endpoint Solutions portfolio as the industry experienced a
post-pandemic decline in demand for PC ecosystem products. A
greater percentage of our revenue was presented on a net basis due
to changes in product mix, which negatively impacted our revenue
compared to the prior fiscal year by approximately 4%.
- Non-GAAP gross billings(1) were $77.2 billion, compared to
$80.6 billion in the prior fiscal year.
- Gross profit was $4.0 billion, compared to $3.9 billion in the
prior fiscal year. Non-GAAP gross profit(1) was $4.0 billion in
both the current and prior fiscal year.
- Gross margin was 6.9%, compared to 6.3% in the prior fiscal
year. Non-GAAP gross margin(1) was 6.9%, compared to 6.4% in the
prior fiscal year.
- Operating income was $1,078 million, compared to $1,051 million
in the prior fiscal year. Non-GAAP operating income(1) was $1.6
billion, compared to $1.7 billion in the prior fiscal year.
- Operating margin was 1.9%, compared to 1.7% in the prior fiscal
year. Non-GAAP operating margin(1) was 2.9%, compared to 2.8% in
the prior fiscal year.
- Diluted EPS was $6.70, compared to $6.77 in the prior fiscal
year. Non-GAAP diluted EPS(1) was $11.26, compared to $11.94 in the
prior fiscal year.
- Cash provided by operations of $1.4 billion, and free cash
flow(1) of $1.3 billion.
- We returned $751 million to shareholders in the form of $621
million of share repurchases and $130 million of dividends.
Regional Fiscal 2023 Highlights
- Americas:
- Revenue was $34.6 billion, compared to $38.8 billion in the
prior fiscal year, representing a decrease of 10.9%. On a constant
currency(1) basis, revenue decreased by 10.5% compared to the prior
fiscal year. A greater percentage of our revenue was presented on a
net basis due to changes in product mix, which negatively impacted
our revenue compared to the prior fiscal year by approximately
5%.
- Operating income was $737 million, compared to $734 million in
the prior fiscal year. Non-GAAP operating income(1) was $1,108
million, compared to $1,141 million in the prior fiscal year.
- Operating margin was 2.1%, compared to 1.9% in the prior fiscal
year. Non-GAAP operating margin(1) was 3.2%, compared to 2.9% in
the prior fiscal year.
- Europe:
- Revenue was $19.4 billion, compared to $20.3 billion in the
prior fiscal year, representing a decrease of 4.3%. On a constant
currency(1) basis, revenue decreased by 5.1% compared to the prior
fiscal year. A greater percentage of our revenue was presented on a
net basis due to changes in product mix, which negatively impacted
our revenue compared to the prior fiscal year by approximately
4%.
- Operating income was $236 million, compared to $227 million in
the prior fiscal year. Non-GAAP operating income(1) was $422
million, compared to $481 million in the prior fiscal year.
- Operating margin was 1.2%, compared to 1.1% in the prior fiscal
year. Non-GAAP operating margin(1) was 2.2%, compared to 2.4% in
the prior fiscal year.
- Asia-Pacific and Japan:
- Revenue was $3.6 billion, compared to $3.3 billion in the prior
fiscal year, representing an increase of 9.1%. On a constant
currency(1) basis, revenue increased by 12.7% compared to the prior
fiscal year.
- Operating income was $105 million, compared to $90 million in
the prior fiscal year. Non-GAAP operating income(1) was $113
million, compared to $102 million in the prior fiscal year.
- Operating margin was 3.0%, compared to 2.7% in the prior fiscal
year. Non-GAAP operating margin(1) was 3.2%, compared to 3.1% in
the prior fiscal year.
Fiscal 2024 First Quarter Outlook
The following statements are based on TD SYNNEX’s current
expectations for the fiscal 2024 first quarter. These statements
are forward-looking and actual results may differ materially.
Non-GAAP gross billings(1) include the impact of costs incurred and
netted against revenue related to sales of third-party supplier
service contracts, software as a service arrangements and certain
fulfillment contracts, and the remaining non-GAAP financial
measures exclude the impact of acquisition, integration and
restructuring costs, amortization of intangible assets, share-based
compensation, and the related tax effects thereon.
Q1 2024 Outlook
Revenue
$14.0 - $14.7 billion
Non-GAAP gross billings(1)
$19.0 - $20.0 billion
Net income
$147 - $192 million
Non-GAAP net income(1)
$232 - $277 million
Diluted earnings per share
$1.65 - $2.15
Non-GAAP diluted earnings per share(1)
$2.60 - $3.10
Estimated outstanding diluted weighted
average shares
88.4 million
Dividend
TD SYNNEX announced today that its Board of Directors declared a
quarterly cash dividend of $0.40 per common share, which represents
a 14% increase as compared to the prior quarter. The dividend is
payable on January 26, 2024 to stockholders of record as of the
close of business on January 19, 2024.
Conference Call and Webcast
TD SYNNEX will host a conference call today to discuss the 2023
fiscal fourth quarter results at 6:00 AM (PT)/9:00 AM (ET).
A live audio webcast of the earnings call will be accessible at
ir.tdsynnex.com and a replay of the webcast will be available
following the call.
About TD SYNNEX
TD SYNNEX (NYSE: SNX) is a leading global distributor and
solutions aggregator for the IT ecosystem. We’re an innovative
partner helping more than 150,000 customers in 100+ countries to
maximize the value of technology investments, demonstrate business
outcomes and unlock growth opportunities. Headquartered in Fremont,
California, and Clearwater, Florida, TD SYNNEX’s 23,000 co-workers
are dedicated to uniting compelling IT products, services and
solutions from 2,500+ best-in-class technology vendors. Our
edge-to-cloud portfolio is anchored in some of the highest-growth
technology segments including cloud, cybersecurity, big
data/analytics, AI, IoT, mobility and everything as a service.
TD SYNNEX is committed to serving customers and communities, and
we believe we can have a positive impact on our people and our
planet, intentionally acting as a respected corporate citizen. We
aspire to be a diverse and inclusive employer of choice for talent
across the IT ecosystem. For more information, visit TDSYNNEX.com
or follow us on LinkedIn, Facebook and Instagram.
(1)Use of Non-GAAP Financial Information
In addition to the financial results presented in accordance
with GAAP, TD SYNNEX refers to revenues on a constant currency
basis which adjusts for the translation effect of foreign
currencies so that certain financial results can be viewed without
the impact of fluctuations in foreign currency exchange rates,
thereby facilitating period-to-period comparisons of our
performance. Financial results adjusted for constant currency are
calculated by translating current period activity using the
comparable prior year periods’ currency conversion rate. TD SYNNEX
uses non-GAAP gross billings, which adjusts revenues to exclude
costs related to sales of third-party supplier service contracts,
software as a service arrangements and certain fulfillment
contracts. Non-GAAP gross billings are a useful non-GAAP metric in
understanding the volume of our business activity and serve as an
important performance metric in internally managing our operations.
TD SYNNEX uses non-GAAP gross profit and non-GAAP gross margin
which exclude purchase accounting adjustments. TD SYNNEX also uses
adjusted selling, general and administrative expenses, non-GAAP
operating income, non-GAAP operating margin, non-GAAP net income,
and non-GAAP diluted earnings per share, which are non-GAAP
financial measures that exclude acquisition, integration and
restructuring costs, the amortization of intangible assets,
share-based compensation expense, purchase accounting adjustments,
legal settlements and other litigation, net, the related tax
effects thereon and an income tax capital loss carryback benefit.
Further, the Company uses adjusted earnings before interest, taxes,
depreciation and amortization (“Adjusted EBITDA”) which excludes
other income (expense), net, acquisition, integration and
restructuring costs, share-based compensation expense and purchase
accounting adjustments. In prior periods, TD SYNNEX has excluded
other items relevant to those periods for purposes of its non-GAAP
financial measures.
Acquisition, integration and restructuring costs, which are
expensed as incurred, primarily represent professional services
costs for legal, banking, consulting and advisory services,
severance and other personnel-related costs, share-based
compensation expense and debt extinguishment fees that are incurred
in connection with acquisition, integration, restructuring, and
divestiture activities. From time to time, this category may also
include transaction-related gains/losses on divestitures/spin-off
of businesses, costs related to long-lived assets including
impairment charges and accelerated depreciation and amortization
expense due to changes in asset useful lives, as well as various
other costs associated with the acquisition or divestiture.
TD SYNNEX’s acquisition activities have resulted in the
recognition of finite-lived intangible assets which consist
primarily of customer relationships and vendor lists. Finite-lived
intangible assets are amortized over their estimated useful lives
and are tested for impairment when events indicate that the
carrying value may not be recoverable. The amortization of
intangible assets is reflected in the Company’s Statements of
Operations. Although intangible assets contribute to the Company’s
revenue generation, the amortization of intangible assets does not
directly relate to the sale of the Company’s products.
Additionally, intangible asset amortization expense typically
fluctuates based on the size and timing of the Company’s
acquisition activity. Accordingly, the Company believes excluding
the amortization of intangible assets, along with the other
non-GAAP adjustments, which neither relate to the ordinary course
of the Company’s business nor reflect the Company’s underlying
business performance, enhances the Company’s and investors’ ability
to compare the Company’s past financial performance with its
current performance and to analyze underlying business performance
and trends. Intangible asset amortization excluded from the related
non-GAAP financial measure represents the entire amount recorded
within the Company’s GAAP financial statements, and the revenue
generated by the associated intangible assets has not been excluded
from the related non-GAAP financial measure. Intangible asset
amortization is excluded from the related non-GAAP financial
measure because the amortization, unlike the related revenue, is
not affected by operations of any particular period unless an
intangible asset becomes impaired or the estimated useful life of
an intangible asset is revised.
Share-based compensation expense is a non-cash expense arising
from the grant of equity awards to employees and non-employee
members of the Company’s Board of Directors based on the estimated
fair value of those awards. Although share-based compensation is an
important aspect of the compensation of our employees, the fair
value of the share-based awards may bear little resemblance to the
actual value realized upon the vesting or future exercise of the
related share-based awards and the expense can vary significantly
between periods as a result of the timing of grants of new
stock-based awards, including grants in connection with
acquisitions. Given the variety and timing of awards and the
subjective assumptions that are necessary when calculating
share-based compensation expense, TD SYNNEX believes this
additional information allows investors to make additional
comparisons between our operating results from period to
period.
Purchase accounting adjustments are primarily related to the
impact of recognizing the acquired vendor and customer liabilities
related to the merger with Tech Data at fair value. These
adjustments benefited our non-GAAP operating income through the
third fiscal quarter of fiscal 2023 based on historical settlement
patterns with our vendors and in accordance with the timing defined
in our policy for releasing vendor and customer liabilities we deem
remote to be paid.
Legal settlements and other litigation, net includes a benefit
recorded in other income (expense), net during the fourth quarter
of fiscal 2022 resulting from a decrease in our accrual for a legal
matter in France.
In connection with the merger with Tech Data, the Company
restructured its foreign financing structure, as well as select
legal entities in anticipation of legally integrating legacy Tech
Data and SYNNEX foreign operations. In addition to the treasury
efficiencies, these restructurings resulted in a one-time domestic
capital loss which would offset certain domestic capital gains when
carried back under United States tax law, resulting in an income
tax capital loss carryback benefit.
Trailing fiscal four quarters ROIC is defined as the last four
quarters’ tax effected operating income divided by the average of
the last five quarterly balances of borrowings and equity, net of
cash. Adjusted ROIC is calculated by excluding the tax effected
impact of non-GAAP adjustments from operating income and by
excluding the cumulative tax effected impact of current and prior
period non-GAAP adjustments on equity.
TD SYNNEX also uses free cash flow, which is cash flow from
operating activities, reduced by purchases of property and
equipment. TD SYNNEX uses free cash flow to conduct and evaluate
its business because, although it is similar to cash flow from
operations, TD SYNNEX believes it is an additional useful measure
of cash flows since purchases of property and equipment are a
necessary component of ongoing operations. Free cash flow reflects
an additional way of viewing TD SYNNEX’s liquidity that, when
viewed with its GAAP results, provides a more complete
understanding of factors and trends affecting its cash flows. Free
cash flow has limitations as it does not represent the residual
cash flow available for discretionary expenditures. For example,
free cash flow does not incorporate payments for business
acquisitions. Therefore, TD SYNNEX believes it is important to view
free cash flow as a complement to its entire Consolidated
Statements of Cash Flows.
TD SYNNEX management uses non-GAAP financial measures internally
to understand, manage and evaluate the business, to establish
operational goals, and in some cases for measuring performance for
compensation purposes. These non-GAAP measures are intended to
provide investors with an understanding of TD SYNNEX’s operational
results and trends that more readily enable investors to analyze TD
SYNNEX’s base financial and operating performance and to facilitate
period-to-period comparisons and analysis of operational trends, as
well as for planning and forecasting in future periods. Management
believes these non-GAAP financial measures are useful to investors
in allowing for greater transparency with respect to supplemental
information used by management in its financial and operational
decision-making. As these non-GAAP financial measures are not
calculated in accordance with GAAP, they may not necessarily be
comparable to similarly titled measures employed by other
companies. These non-GAAP financial measures should not be
considered in isolation or as a substitute for the comparable GAAP
measures, and should be read only in conjunction with TD SYNNEX’s
Consolidated Financial Statements prepared in accordance with GAAP.
A reconciliation of TD SYNNEX’s GAAP to non-GAAP financial
information is set forth in the supplemental tables at the end of
this press release.
Safe Harbor Statement
Statements in this news release regarding TD SYNNEX that are not
historical facts are “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking
statements are inherently uncertain, and shareholders and other
potential investors must recognize that actual results may differ
materially from TD SYNNEX expectations as a result of a variety of
factors. These forward-looking statements may be identified by
terms such as believe, foresee, expect, may, will, provide, could
and should and the negative of these terms or other similar
expressions. These forward-looking statements include, but are not
limited to, statements about our strategy, demand, plans and
positioning, capital allocation, as well as guidance related to the
first quarter of 2024. Such forward-looking statements are based
upon management’s current expectations and include known and
unknown risks, uncertainties and other factors, many of which TD
SYNNEX is unable to predict or control, that may cause TD SYNNEX
actual results, performance, or plans to differ materially from any
future results, performance or plans expressed or implied by such
forward-looking statements.
These risks and uncertainties include, but are not limited to:
the unfavorable outcome of any legal proceedings that have been or
may be instituted against us; the ability to retain key personnel;
general economic and political conditions; continued or increased
weakness in information technology spending; seasonality; the loss
or consolidation of one or more of our significant original
equipment manufacturer, or OEM, suppliers or customers; market
acceptance and product life of the products we assemble and
distribute; competitive conditions in our industry and their impact
on our margins; pricing, margin and other terms with our OEM
suppliers; our ability to gain market share; variations in
supplier-sponsored programs; changes in our costs and operating
expenses; the timing and amount of returns to our shareholders via
repurchases of our common stock and dividends; changes in foreign
currency exchange rates; increased inflation; increased risk in the
banking system; changes in tax laws; risks associated with our
international operations; uncertainties and variability in demand
by our reseller and integration customers; supply shortages or
delays; any termination or reduction in our floor plan financing
arrangements; credit exposure to our reseller customers and
negative trends in their businesses; any incidents of theft; the
declaration, timing and payment of dividends, and the Board’s
reassessment thereof; and other risks and uncertainties detailed in
our Form 10-K for the fiscal year ended November 30, 2022 and
subsequent SEC filings. Statements included in this press release
are based upon information known to TD SYNNEX as of the date of
this release, and TD SYNNEX assumes no obligation to update
information contained in this press release unless otherwise
required by law.
Copyright 2024 TD SYNNEX CORPORATION. All rights
reserved. TD SYNNEX, the TD SYNNEX Logo, and all other TD SYNNEX
company, product and services names and slogans are trademarks or
registered trademarks of TD SYNNEX Corporation. Other names and
marks are the property of their respective owners.
TD SYNNEX Corporation
Consolidated Balance
Sheets
(Currency and share amounts in
thousands, except par value)
(Amounts may not add or
compute due to rounding)
(Unaudited)
November 30, 2023
November 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,033,776
$
522,604
Accounts receivable, net
10,297,814
9,420,999
Receivables from vendors, net
964,334
819,135
Inventories
7,146,274
9,066,620
Other current assets
642,238
671,507
Total current assets
20,084,436
20,500,865
Property and equipment, net
450,024
421,064
Goodwill
3,904,170
3,803,850
Intangible assets, net
4,244,314
4,422,877
Other assets, net
729,870
585,342
Total assets
$
29,412,814
$
29,733,998
LIABILITIES AND EQUITY
Current liabilities:
Borrowings, current
$
983,585
$
268,128
Accounts payable
13,347,281
13,988,980
Other accrued liabilities
2,407,896
2,171,613
Total current liabilities
16,738,762
16,428,721
Long-term borrowings
3,099,193
3,835,665
Other long-term liabilities
498,656
501,856
Deferred tax liabilities
893,021
942,250
Total liabilities
21,229,632
21,708,492
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000
shares authorized, no shares issued or outstanding
—
—
Common stock, $0.001 par value, 200,000
shares authorized, 99,012 and 98,696 shares issued as of November
30, 2023 and November 30, 2022, respectively
99
99
Additional paid-in capital
7,435,274
7,374,100
Treasury stock, 10,343 and 4,049 shares as
of November 30, 2023 and November 30, 2022, respectively
(949,714
)
(337,217
)
Accumulated other comprehensive loss
(507,248
)
(719,710
)
Retained earnings
2,204,771
1,708,234
Total stockholders' equity
8,183,182
8,025,506
Total liabilities and equity
$
29,412,814
$
29,733,998
TD SYNNEX Corporation
Consolidated Statements of
Operations
(Currency and share amounts in
thousands, except per share amounts)
(Amounts may not add or
compute due to rounding)
(Unaudited)
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Revenue
$
14,407,306
$
16,247,957
$
57,555,416
$
62,343,810
Cost of revenue
(13,388,727
)
(15,188,238
)
(53,598,587
)
(58,443,611
)
Gross profit
1,018,579
1,059,719
3,956,829
3,900,199
Selling, general and administrative
expenses
(685,187
)
(675,504
)
(2,672,562
)
(2,627,007
)
Acquisition, integration and restructuring
costs
(46,638
)
(50,053
)
(206,235
)
(222,319
)
Operating income
286,754
334,162
1,078,032
1,050,873
Interest expense and finance charges,
net
(66,130
)
(80,148
)
(288,318
)
(222,578
)
Other income (expense), net
6,485
11,210
(206
)
(1,165
)
Income before income taxes
227,109
265,224
789,508
827,130
Provision for income taxes
(39,567
)
(43,993
)
(162,597
)
(175,823
)
Net income
$
187,542
$
221,231
$
626,911
$
651,307
Earnings per common share:
Basic
$
2.06
$
2.31
$
6.72
$
6.79
Diluted
$
2.06
$
2.31
$
6.70
$
6.77
Weighted-average common shares
outstanding:
Basic
90,077
94,839
92,572
95,225
Diluted
90,371
95,102
92,853
95,509
TD SYNNEX Corporation
Regional Financial Highlights
- Fiscal 2023 Fourth Quarter
(Currency in millions)
(Amounts may not add or
compute due to rounding)
Q4 FY23
Q4 FY22
Net Change from Q4
FY22
Americas
Revenue
$
8,356.2
$
10,039.1
(16.8
) %
Operating income
$
177.2
$
222.3
(20.3
) %
Non-GAAP operating income(1)
$
277.6
$
323.7
(14.2
) %
Operating margin
2.12
%
2.21
%
(9) bps
Non-GAAP operating margin(1)
3.32
%
3.22
%
10 bps
Europe
Revenue
$
5,212.8
$
5,375.0
(3.0
) %
Operating income
$
78.7
$
77.1
2.1
%
Non-GAAP operating income(1)
$
116.6
$
134.6
(13.4
) %
Operating margin
1.51
%
1.44
%
7 bps
Non-GAAP operating margin(1)
2.24
%
2.50
%
(26) bps
Asia-Pacific and Japan
Revenue
$
838.3
$
833.8
0.5
%
Operating income
$
30.8
$
34.7
(11.2
) %
Non-GAAP operating income(1)
$
32.3
$
37.3
(13.4
) %
Operating margin
3.68
%
4.17
%
(49) bps
Non-GAAP operating margin(1)
3.86
%
4.47
%
(61) bps
(1) A reconciliation of TD SYNNEX’s GAAP
to non-GAAP financial information is set forth in the supplemental
tables at the end of this press release.
TD SYNNEX Corporation
Regional Financial Highlights
- Fiscal Year 2023
(Currency in millions)
(Amounts may not add or
compute due to rounding)
FY23
FY22
Net Change from FY22
Americas
Revenue
$
34,573.9
$
38,791.1
(10.9
) %
Operating income
$
736.6
$
734.1
0.3
%
Non-GAAP operating income(1)
$
1,108.0
$
1,141.4
(2.9
) %
Operating margin
2.13
%
1.89
%
24 bps
Non-GAAP operating margin(1)
3.20
%
2.94
%
26 bps
Europe
Revenue
$
19,422.3
$
20,289.2
(4.3
) %
Operating income
$
236.5
$
227.2
4.1
%
Non-GAAP operating income(1)
$
421.6
$
480.6
(12.3
) %
Operating margin
1.22
%
1.12
%
10 bps
Non-GAAP operating margin(1)
2.17
%
2.37
%
(20) bps
Asia-Pacific and Japan
Revenue
$
3,559.3
$
3,263.5
9.1
%
Operating income
$
105.0
$
89.5
17.3
%
Non-GAAP operating income(1)
$
112.8
$
102.1
10.5
%
Operating margin
2.95
%
2.74
%
21 bps
Non-GAAP operating margin(1)
3.17
%
3.13
%
4 bps
(1) A reconciliation of TD SYNNEX’s GAAP
to non-GAAP financial information is set forth in the supplemental
tables at the end of this press release.
TD SYNNEX Corporation
Reconciliation of GAAP to
Non-GAAP financial measures
(Currency in
thousands)
(Amounts may not add or
compute due to rounding)
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Revenue in constant currency
Consolidated
Revenue
$
14,407,306
$
16,247,957
$
57,555,416
$
62,343,810
Impact of changes in foreign
currencies
(315,531
)
—
99,152
—
Revenue in constant currency
$
14,091,775
$
16,247,957
$
57,654,568
$
62,343,810
Americas
Revenue
$
8,356,228
$
10,039,117
$
34,573,859
$
38,791,102
Impact of changes in foreign
currencies
823
—
148,146
—
Revenue in constant currency
$
8,357,051
$
10,039,117
$
34,722,005
$
38,791,102
Europe
Revenue
$
5,212,809
$
5,375,015
$
19,422,297
$
20,289,211
Impact of changes in foreign
currencies
(323,153
)
—
(168,747
)
—
Revenue in constant currency
$
4,889,656
$
5,375,015
$
19,253,550
$
20,289,211
Asia-Pacific and Japan
Revenue
$
838,269
$
833,825
$
3,559,260
$
3,263,497
Impact of changes in foreign
currencies
6,799
—
119,753
—
Revenue in constant currency
$
845,068
$
833,825
$
3,679,013
$
3,263,497
TD SYNNEX Corporation
Reconciliation of GAAP to
Non-GAAP financial measures
(Currency in
thousands)
(Amounts may not add or
compute due to rounding)
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Non-GAAP gross billings
Revenue
$
14,407,306
$
16,247,957
$
57,555,416
$
62,343,810
Costs incurred and netted against revenue
related to sales of third-party supplier service contracts,
software as a service arrangements and certain fulfillment
contracts
5,337,057
4,665,011
19,690,672
18,289,369
Non-GAAP gross billings
$
19,744,363
$
20,912,968
$
77,246,088
$
80,633,179
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Non-GAAP gross profit and non-GAAP
gross margin
Revenue
$
14,407,306
$
16,247,957
$
57,555,416
$
62,343,810
Gross profit
$
1,018,579
$
1,059,719
$
3,956,829
$
3,900,199
Purchase accounting adjustments
—
17,720
15,047
96,128
Non-GAAP gross profit
$
1,018,579
$
1,077,439
$
3,971,876
$
3,996,327
Gross margin
7.07
%
6.52
%
6.87
%
6.26
%
Non-GAAP gross margin
7.07
%
6.63
%
6.90
%
6.41
%
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Adjusted selling, general and
administrative expenses
Selling, general and administrative
expenses
$
731,825
$
725,557
$
2,878,797
$
2,849,326
Acquisition, integration and restructuring
costs
46,638
50,053
206,235
222,319
Amortization of intangibles
73,166
75,080
293,737
299,162
Share-based compensation
20,021
18,563
49,273
38,994
Purchase accounting adjustments
—
—
—
16,564
Adjusted selling, general and
administrative expenses
$
592,000
$
581,861
$
2,329,552
$
2,272,287
TD SYNNEX Corporation
Reconciliation of GAAP to
Non-GAAP financial measures
(Currency in
thousands)
(Amounts may not add or
compute due to rounding)
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Non-GAAP operating income and non-GAAP
operating margin - Consolidated
Revenue
$
14,407,306
$
16,247,957
$
57,555,416
$
62,343,810
Operating income
$
286,754
$
334,162
$
1,078,032
$
1,050,873
Acquisition, integration and restructuring
costs
46,638
50,053
206,235
222,319
Amortization of intangibles
73,166
75,080
293,737
299,162
Share-based compensation
20,021
18,563
49,273
38,994
Purchase accounting adjustments
—
17,720
15,047
112,691
Non-GAAP operating income
$
426,579
$
495,578
$
1,642,324
$
1,724,039
Operating margin
1.99
%
2.06
%
1.87
%
1.69
%
Non-GAAP operating margin
2.96
%
3.05
%
2.85
%
2.77
%
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Non-GAAP operating income and non-GAAP
operating margin - Americas
Revenue
$
8,356,228
$
10,039,117
$
34,573,859
$
38,791,102
Operating income
$
177,235
$
222,290
$
736,605
$
734,103
Acquisition, integration and restructuring
costs
43,163
34,091
165,845
137,055
Amortization of intangibles
42,336
44,752
169,569
175,371
Share-based compensation
14,879
13,591
35,955
29,717
Purchase accounting adjustments
—
8,985
—
65,117
Non-GAAP operating income
$
277,613
$
323,709
$
1,107,974
$
1,141,363
Operating margin
2.12
%
2.21
%
2.13
%
1.89
%
Non-GAAP operating margin
3.32
%
3.22
%
3.20
%
2.94
%
TD SYNNEX Corporation
Reconciliation of GAAP to
Non-GAAP financial measures
(Currency in
thousands)
(Amounts may not add or
compute due to rounding)
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Non-GAAP operating income and non-GAAP
operating margin - Europe
Revenue
$
5,212,809
$
5,375,015
$
19,422,297
$
20,289,211
Operating income
$
78,684
$
77,132
$
236,477
$
227,249
Acquisition, integration and restructuring
costs
3,341
14,522
37,091
76,634
Amortization of intangibles
30,211
29,677
121,680
121,220
Share-based compensation
4,404
4,540
11,255
7,906
Purchase accounting adjustments
—
8,735
15,047
47,574
Non-GAAP operating income
$
116,640
$
134,606
$
421,550
$
480,583
Operating margin
1.51
%
1.44
%
1.22
%
1.12
%
Non-GAAP operating margin
2.24
%
2.50
%
2.17
%
2.37
%
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Non-GAAP operating income and non-GAAP
operating margin - Asia-Pacific and Japan
Revenue
$
838,269
$
833,825
$
3,559,260
$
3,263,497
Operating income
$
30,835
$
34,740
$
104,950
$
89,521
Acquisition, integration and restructuring
costs
134
1,440
3,299
8,630
Amortization of intangibles
619
651
2,488
2,571
Share-based compensation
738
432
2,063
1,371
Non-GAAP operating income
$
32,326
$
37,263
$
112,800
$
102,093
Operating margin
3.68
%
4.17
%
2.95
%
2.74
%
Non-GAAP operating margin
3.86
%
4.47
%
3.17
%
3.13
%
TD SYNNEX Corporation
Reconciliation of GAAP to
Non-GAAP financial measures
(Currency in thousands, except
per share amounts)
(Amounts may not add or
compute due to rounding)
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Adjusted EBITDA
Net income
$
187,542
$
221,231
$
626,911
$
651,307
Interest expense and finance charges,
net
66,130
80,148
288,318
222,578
Provision for income taxes
39,567
43,993
162,597
175,823
Depreciation(1)
30,232
31,643
124,578
164,203
Amortization of intangibles
73,166
75,080
293,737
299,162
EBITDA
$
396,637
$
452,095
$
1,496,141
$
1,513,073
Other (income) expense, net
(6,485
)
(11,210
)
206
1,165
Acquisition, integration and restructuring
costs
45,511
42,963
188,871
157,965
Share-based compensation
20,021
18,563
49,273
38,994
Purchase accounting adjustments
—
17,720
15,047
112,691
Adjusted EBITDA
$
455,684
$
520,131
$
1,749,538
$
1,823,888
(1) Includes depreciation recorded in
acquisition, integration, and restructuring costs.
Three Months Ended
Twelve Months Ended
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Non-GAAP net income and non-GAAP
diluted EPS(1)
Net income
$
187,542
$
221,231
$
626,911
$
651,307
Acquisition, integration and restructuring
costs
47,139
52,317
213,585
231,008
Amortization of intangibles
73,166
75,080
293,737
299,162
Share-based compensation
20,021
18,563
49,273
38,994
Purchase accounting adjustments
—
17,720
15,047
112,691
Legal settlements and other litigation,
net
—
(10,792
)
—
(10,792
)
Income taxes related to the above
(42,294
)
(44,302
)
(144,994
)
(166,129
)
Income tax capital loss carryback
benefit
—
—
—
(8,299
)
Non-GAAP net income
$
285,574
$
329,817
$
1,053,559
$
1,147,942
Diluted EPS(1)
$
2.06
$
2.31
$
6.70
$
6.77
Acquisition, integration and restructuring
costs
0.52
0.55
2.28
2.40
Amortization of intangibles
0.79
0.78
3.14
3.11
Share-based compensation
0.22
0.19
0.53
0.41
Purchase accounting adjustments
—
0.18
0.16
1.17
Legal settlements and other litigation,
net
—
(0.11
)
—
(0.11
)
Income taxes related to the above
(0.46
)
(0.46
)
(1.55
)
(1.73
)
Income tax capital loss carryback
benefit
—
—
—
(0.09
)
Non-GAAP Diluted EPS(1)
$
3.13
$
3.44
$
11.26
$
11.94
(1) Diluted EPS is calculated using the
two-class method. Unvested restricted stock awards granted to
employees are considered participating securities. For purposes of
calculating Diluted EPS, net income allocated to participating
securities was approximately 0.9% and 0.8% of net income for the
three and twelve months ended November 30, 2023, respectively, and
was approximately 0.8% and 0.7% of net income for the three and
twelve months ended November 30, 2022, respectively.
TD SYNNEX Corporation
Reconciliation of GAAP to
Non-GAAP financial measures
(Amounts may not add or
compute due to rounding)
Three Months Ended
Twelve Months Ended
(Currency in thousands)
November 30, 2023
November 30, 2022
November 30, 2023
November 30, 2022
Free cash flow
Net cash provided by (used in) operating
activities
$
210,668
$
302,189
$
1,407,373
$
(49,604
)
Purchases of property and equipment
(42,590
)
(38,527
)
(150,007
)
(117,049
)
Free cash flow
$
168,078
$
263,662
$
1,257,366
$
(166,653
)
Forecast
Three Months Ending February
29, 2024
(Currency in millions, except per share
amounts)
Low
High
Net income
$
147
$
192
Acquisition, integration and restructuring
costs
18
18
Amortization of intangibles
75
75
Share-based compensation
17
17
Income taxes related to the above
(25
)
(25
)
Non-GAAP net income
$
232
$
277
Diluted EPS(1)
$
1.65
$
2.15
Acquisition, integration and restructuring
costs
0.20
0.20
Amortization of intangibles
0.84
0.84
Share-based compensation
0.19
0.19
Income taxes related to the above
(0.28
)
(0.28
)
Non-GAAP Diluted EPS
$
2.60
$
3.10
(1) Diluted EPS is calculated using the
two-class method. Unvested restricted stock awards granted to
employees are considered participating securities. Net income
allocable to participating securities is estimated to be
approximately 0.9% of the forecast net income for the three months
ending February 29, 2024.
TD SYNNEX Corporation
Reconciliation of GAAP to
Non-GAAP financial measures
(Amounts may not add or
compute due to rounding)
Forecast
Three Months Ending
(Currency in billions)
February 29, 2024
Non-GAAP gross billings
Low
High
Revenue
$
14.0
$
14.7
Costs incurred and netted against revenue
related to sales of third-party supplier service contracts,
software as a service arrangements and certain fulfillment
contracts
5.0
5.3
Non-GAAP gross billings
$
19.0
$
20.0
TD SYNNEX Corporation
Calculation of Financial
Metrics
Return on Invested Capital
(“ROIC”)
(Currency in
thousands)
(Amounts may not add or
compute due to rounding)
November 30, 2023
November 30, 2022
ROIC
Operating income (trailing fiscal four
quarters)
$
1,078,032
$
1,050,873
Income taxes on operating income(1)
(222,018
)
(223,384
)
Operating income after taxes
$
856,014
$
827,489
Total invested capital comprising equity
and borrowings, less cash (last five quarters average)
$
11,510,953
$
11,668,007
ROIC
7.4
%
7.1
%
Adjusted ROIC
Non-GAAP operating income (trailing fiscal
four quarters)
$
1,642,324
$
1,724,039
Income taxes on non-GAAP operating
income(1)
(371,130
)
(403,050
)
Non-GAAP operating income after taxes
$
1,271,194
$
1,320,989
Total invested capital comprising equity
and borrowings, less cash (last five quarters average)
$
11,510,953
$
11,668,007
Tax effected impact of cumulative non-GAAP
adjustments (last five quarters average)
1,068,366
620,266
Total non-GAAP invested capital (last five
quarters average)
$
12,579,319
$
12,288,272
Adjusted ROIC
10.1
%
10.7
%
(1) Income taxes on GAAP operating income
was calculated using the effective year-to-date tax rates during
the respective periods. Income taxes on non-GAAP operating income
was calculated by excluding the tax effect of taxable and
deductible non-GAAP adjustments using the effective year-to-date
tax rate during the respective periods.
TD SYNNEX Corporation
Calculation of Financial
Metrics
Cash Conversion Cycle
(Currency in
thousands)
(Amounts may not add or
compute due to rounding)
Three Months Ended
November 30, 2023
November 30, 2022
Days sales outstanding
Revenue
(a)
$
14,407,306
$
16,247,957
Accounts receivable, net
(b)
10,297,814
9,420,999
Days sales outstanding
(c) = ((b)/(a))*the number of
days during the period
65
53
Days inventory outstanding
Cost of revenue
(d)
$
13,388,727
$
15,188,238
Inventories
(e)
7,146,274
9,066,620
Days inventory outstanding
(f) = ((e)/(d))*the number of
days during the period
49
54
Days payable outstanding
Cost of revenue
(g)
$
13,388,727
$
15,188,238
Accounts payable
(h)
13,347,281
13,988,980
Days payable outstanding
(i) = ((h)/(g))*the number of
days during the period
91
84
Cash conversion cycle
(j) = (c)+(f)-(i)
23
23
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240109503550/en/
Liz Morali Investor Relations 510-668-8436 ir@tdsynnex.com
Bobby Eagle Global Corporate Communications 727-538-5864
bobby.eagle@tdsynnex.com
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