TD SYNNEX Q3 Revenue Rises 38% as Hyve Billings Double

TradingKey
09/25

TD SYNNEX Corp. (NYSE: SNX) reported sharp fiscal third-quarter growth as strength across its Distribution operations combined with a more than doubling of Hyve Solutions gross billings. Revenue rose 38% year over year to $21.56 billion, while non-GAAP diluted earnings per share increased 59% to $5.68. The company expects momentum in both businesses to continue into the fourth quarter.

For the three months ended Aug. 31, 2026, non-GAAP gross billings increased 40% to $31.83 billion, or 40.5% in constant currency, exceeding the high end of the company’s guidance. Non-GAAP operating income climbed 55% to $736.4 million, with growth reflecting higher business volumes, an increased contribution from Hyve and improved operating margins in Distribution.

Non-GAAP operating income represented 2.31% of gross billings, up 22 basis points from a year earlier. Measured against revenue, the non-GAAP operating margin expanded to 3.42% from 3.03%.

On a GAAP basis, operating income rose to $642.9 million from $383.7 million, while net income increased to $416.2 million from $226.8 million. Diluted earnings per share was $5.18, compared with $2.74 in the prior-year quarter. Non-GAAP net income advanced to $455.9 million from $296.2 million.

Distribution growth spans regions and technologies

The combined Distribution business generated $24.8 billion in non-GAAP gross billings, up 27%, while revenue increased 35% to $17.8 billion. Non-GAAP operating income rose 55% to $483 million. Operating income as a percentage of gross billings improved by 35 basis points to 1.95%, which the company attributed to billings growth and disciplined cost management.

Advanced Solutions revenue increased 57% to $8.5 billion, with non-GAAP gross billings up 37% to $14.5 billion. Endpoint Solutions revenue rose 20% to $9.3 billion, while gross billings grew 16% to $10.3 billion. TD SYNNEX said demand was broad-based across its Distribution technologies, with reported product-category growth ranging from 16% to 67%.

All three geographic Distribution segments posted higher billings. Americas gross billings increased 28% to $15.0 billion, led primarily by servers and storage, software and PCs. Europe rose 26% to $8.2 billion, supported mainly by servers and storage and peripherals. APJ also grew 26%, reaching $1.7 billion, with contributions from servers and storage, networking and PCs.

Europe recorded the largest improvement in profitability, with non-GAAP operating income more than doubling to $155.3 million and operating income as a percentage of gross billings increasing 79 basis points to 1.90%. The Americas generated $305.6 million of non-GAAP operating income, up 36%, while APJ produced $22.6 million, up 38%.

TD SYNNEX also expanded its IBM footprint into 20 additional countries across Europe, the Middle East and Africa, Asia-Pacific and Japan, and Latin America.

Hyve billings more than double

Hyve Solutions remained the fastest-growing part of the portfolio. Revenue increased 52% to $3.8 billion, while non-GAAP gross billings surged 117% to $7.0 billion. Non-GAAP operating income rose 56% to $253 million.

Manufacturing growth exceeded 130%, primarily because of increased volumes from existing customers. Supply Chain Services grew more than 90%, supported by component demand associated with customers’ infrastructure deployments. Hyve also secured customer programs expected to use manufacturing capacity that TD SYNNEX expanded in the preceding quarter.

Hyve’s non-GAAP operating margin measured against revenue increased 17 basis points to 6.65%. However, operating income as a percentage of gross billings declined 143 basis points to 3.61%, reflecting the substantially faster increase in billings than operating income.

Fourth-quarter outlook calls for continued growth

For the quarter ending Nov. 30, 2026, TD SYNNEX forecasts non-GAAP gross billings of approximately $31.9 billion, plus or minus $500 million. The midpoint would represent 31% year-over-year growth. Revenue is expected to be about $22.2 billion, plus or minus $400 million, implying 28% growth at the midpoint.

Management projects non-GAAP net income of approximately $474 million, plus or minus $20 million. Non-GAAP diluted earnings per share is expected to be about $5.90, within a range of $5.65 to $6.15 and representing 54% year-over-year growth at the midpoint. The outlook assumes approximately 79.2 million diluted weighted-average shares.

Cash use and balance-sheet position

TD SYNNEX returned $139 million to shareholders during the quarter, including about $100 million of share repurchases and approximately $38 million of dividends. It ended the period with $749 million in cash and cash equivalents and a net debt-to-adjusted EBITDA ratio of 1.9 times.

Cash generation remained a constraint during the period. Free cash flow was negative $975.6 million in the third quarter and negative approximately $0.8 billion for the trailing 12 months. Net working capital stood at $6.5 billion, while the gross cash conversion cycle was 22 days.

The fourth-quarter projections are based on management’s current expectations and remain subject to demand, market, foreign-exchange and execution uncertainties, as well as other risks described in the company’s regulatory filings. TD SYNNEX also noted that its non-GAAP measures are not necessarily comparable with similarly named metrics used by other companies.

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