Shares of TD Synnex (SNX) plummeted 20.73% in pre-market trading on Thursday after the IT services company reported first-quarter earnings that fell short of analyst expectations and provided weaker-than-anticipated guidance for the second quarter.

For the fiscal first quarter ended February 28, 2025, TD Synnex reported revenue of $14.53 billion, up 4% year-over-year but below the analyst consensus estimate of $14.79 billion. Non-GAAP earnings per share came in at $2.80, missing the $2.91 expected by analysts. The company's operating margin contracted to 2.1% from 2.17% in the same quarter last year.

Adding to investor concerns, TD Synnex provided second-quarter guidance that fell short of Wall Street expectations. The company forecasts Q2 revenue in the range of $13.9 billion to $14.7 billion, below the analyst consensus of $14.72 billion. Non-GAAP earnings per share are expected to be between $2.45 and $2.95, also below the $3.03 per share analysts were anticipating.

Despite the disappointing results, TD Synnex CEO Patrick Zammit highlighted the company's ability to grow ahead of the market in Q1, citing the strength of their business model and end-to-end strategy. However, the market's reaction suggests investors are more focused on the near-term challenges and potential headwinds facing the IT distribution sector.