TD SYNNEX 2025 Q2 Earnings Beats Expectations as Net Income Surges 28.8%

TD SYNNEX reported a strong fiscal 2025 Q2, with revenue reaching $14.95 billion, marking a 7.2% year-over-year increase. The company's net income rose by 28.8% to $184.92 million, surpassing expectations. Earnings per share (EPS) also exceeded forecasts, climbing 32.9% to $2.22. Looking ahead, TD SYNNEX projects Q3 revenue between $14.7 billion and $15.5 billion, with non-GAAP gross billings anticipated to reach $21.0 billion to $22.0 billion. The company expects non-GAAP net income between $227 million and $268 million, maintaining a steady outlook despite macroeconomic uncertainties.

Revenue

TD SYNNEX achieved robust revenue growth in fiscal 2025 Q2, reaching $14.95 billion, a 7.2% increase year-over-year. The company benefited from demand pull forward, particularly in PCs and software, contributing to its strong performance. The revenue exceeded the high end of TD SYNNEX's outlook, with constant currency adjustments showing a 6.3% rise.

Earnings/Net Income

TD SYNNEX's fiscal 2025 Q2 earnings saw a remarkable increase, with EPS rising 32.9% to $2.22 compared to $1.67 in the previous year. Net income also grew significantly, reaching $184.92 million, up 28.8% from $143.60 million in 2024 Q2. The company's consistent profitability underscores strong operational resilience, marking a successful quarter.

Post-Earnings Price Action Review

The strategy of buying TD SYNNEX (SNX) shares following a quarter-over-quarter revenue increase on the financial report release date and holding them for 30 days resulted in a 26.72% return, which underperformed the benchmark by 31.46%. The strategy's compound annual growth rate (CAGR) was 8.29%, with a maximum drawdown of -36.09% and a Sharpe ratio of 0.27, indicating significant volatility and moderate returns. While the approach yielded positive returns, the volatility and underperformance compared to the benchmark suggest that investors should exercise caution when utilizing this strategy. The post-earnings price action reflects the company's growth prospects and market dynamics, emphasizing the importance of considering broader market trends and aligning investment strategies with individual risk tolerance and financial goals.

CEO Commentary

Patrick Zammit, CEO, expressed excitement about TD SYNNEX's strong second-quarter performance, noting a 12% growth in gross billings with contributions from all regions and major technologies. He highlighted the continued strength in the IT distribution and hyperscaler markets, driven by demand pull forward, particularly in PCs and software. Zammit emphasized the execution of strategic imperatives aimed at above-market growth, including targeting new customers and diversifying offerings. Despite macroeconomic uncertainties, he maintained an optimistic outlook, stating, "Our North Star remains generating profitable growth and free cash flow while being a valued partner to our vendors and customers across the world."

Guidance

For the third quarter, TD SYNNEX expects non-GAAP gross billings between $21 billion and $22 billion, translating to approximately 6% growth at the midpoint. Net revenue is anticipated in the range of $14.7 billion to $15.5 billion, with a gross to net adjustment of 30%. Non-GAAP net income is projected between $227 million and $268 million, with diluted earnings per share expected to range from $2.75 to $3.25. The company aims to execute about $175 million in share repurchases during the quarter, maintaining a focus on returning excess cash to shareholders.

Additional News

Recently, TD SYNNEX announced a quarterly cash dividend of $0.44 per common share, reflecting a 10% year-over-year increase. The dividend will be payable on July 25, 2025, to stockholders of record as of July 11, 2025. Additionally, TD SYNNEX was recognized with over 40 industry honors, including Distributor of the Year awards from major partners such as HPE, Nvidia, CrowdStrike, Dell, Lenovo, NetApp, and Fortinet. These accolades underscore the company's commitment to excellence and its strong position within the IT distribution sector. Furthermore, TD SYNNEX plans to execute approximately $105 million in share repurchases during Q3 FY2025, demonstrating its ongoing strategy to return excess cash to shareholders and enhance shareholder value.