Maya Neuman

Maya Neuman asked about the dynamics of TD SYNNEX's HIVE business, specifically questioning the potential for a decline in the fiscal forecast given previous cautious outlooks, and seeking insights into HIVE's strong Q3 results, robust Q4 guidance, and the broader momentum in Cloud CapEx trends, as well as the outlook for the next fiscal year.

Answer

CEO Patrick Zammit explained that HIVE's overperformance was driven by significant growth across all programs and customers, a strong rebound in demand from their second-largest customer, and higher-than-expected demand for supply chain services, with these positive dynamics anticipated to continue into Q4. CFO Marshall Witt added that TD SYNNEX continues to invest in HIVE's skill sets, engineering capabilities, capacity, and manufacturing to stay ahead of requirements.

Maya Neuman noted a discrepancy between HP's enthusiasm for AI PCs and feedback from CIOs, asking for specific examples of industries, regions, or use cases driving adoption. She also inquired about Windows 11 refresh trends in the SMB segment and the potential for delays.

Answer

CEO Enrique Lores pointed to actual results, with AI PCs exceeding 25% of the mix a quarter ahead of plan. He cited growing software support from partners like Adobe and Zoom leveraging on-device NPUs as a key driver. He explained that companies are buying AI PCs now to future-proof their fleets. Regarding SMBs, he stated that adoption typically follows enterprise, consistent with past refresh cycles, representing a future growth opportunity.

On behalf of Eric Woodring, Maya Neuman from Morgan Stanley asked for quantification of success with screen printing customers and an explanation for the deceleration in trailing twelve-month impression growth to 5%. She also inquired about how growth trends differ by customer segment.

Answer

CEO Ronen Samuel explained that the 5% trailing twelve-month impression growth figure was artificially low due to a calculation method. For customers not on the Kornit Connect platform, impressions are estimated from ink shipments. The recent inventory destocking by key customers led to lower ink shipments in Q2, which skewed the calculation. Samuel asserted that actual production growth is "much more" than 5%, with top customers showing strong double-digit growth. He did not quantify revenue from screen printers but noted strong adoption of both Apollo and Atlas Max systems.

Maya Neuman of Morgan Stanley inquired about quantifying the impact of the Q2 pull-forward in accessories and materials sales ahead of tariffs and asked about Cricut's mitigation strategies for new tariffs on its Southeast Asia supply chain.

Answer

CFO Kimball Shill explained that while the pull-forward of accessories and materials shipments benefited Q2 results, he would not quantify the exact amount. He noted the company is monitoring sell-through data to understand if it was a timing shift or incremental demand. Regarding future tariffs on goods from Malaysia and other Southeast Asian countries, Shill stated they are assessing a combination of responses with a focus on consumer affordability and expect the primary impact to be felt later in Q4 2025 and more significantly in 2026.

Maya Neuman of Morgan Stanley inquired about Cricut's strategies to mitigate tariff headwinds, including potential price increases, and whether the company has observed any order pull-forward. She also asked for more detail on user engagement trends and the expected timing for improvement from current initiatives.

Answer

CFO Kimball Shill explained that Cricut's supply chain, with hardware made in Malaysia and most consumables outside China, offers a competitive advantage. He stated that while the margin impact is uncertain, the company expects to remain profitable and will use a mix of reduced promotions and targeted price increases. He confirmed some order pull-forward from U.S. partners post-quarter. CEO Ashish Arora added that pricing actions will be deliberate. On engagement, Ashish acknowledged challenges from aging user cohorts and lower activity from new users. He outlined a three-part strategy: improving the onboarding experience, scaling a new personalized marketing platform, and re-architecting the Design Space software around specific use cases to simplify creating.

Maya Neuman, on behalf of Eric Woodring at Morgan Stanley, asked for details on the April-May demand weakness across customer segments and geographies. She also questioned if the updated guidance assumes stable or incrementally softer demand and inquired about the implementation of and customer reaction to recent price increases.

Answer

President and COO John Bruno stated the demand pressure was more pronounced in Federal and SLED accounts, while enterprise was relatively stable. He noted some high-end declines were intentional portfolio simplifications, highlighting the new Kyocera partnership as a strategic move. CFO Mirlanda Gecaj confirmed the back-half guidance incorporates conservatism on equipment demand. Bruno added that price increases were implemented to partially offset tariffs, seeing success on equipment and transactional revenue despite some pushback on contractuals.

Maya Neuman from Morgan Stanley asked about the expected timeline to reach the company's long-term 7-10% top-line growth target and requested quantification of how much US price increases would contribute to Q2 revenue growth.

Answer

CEO Hanneke Faber stated there is no crystal ball for reaching the 7-10% growth target but noted the company was at +7% last fiscal year, showing it's achievable even with core categories. She mentioned new verticals like healthcare and government will take longer to contribute materially. CFO Matteo Anversa clarified that the expected positive pricing impact in Q2 is 200 basis points at the gross margin level, while Faber added that Q1's 5% net sales growth was driven almost entirely by volume.

Speaking for Erik Woodring, Maya Neuman asked about the current pricing landscape and whether competitive pressures could risk CDW's ability to pass through potential tariff-related cost increases to customers.

Answer

CEO Christine Leahy highlighted the company's resilient gross margin as evidence of its ability to maintain profitability and expressed confidence in passing along price increases. CFO Albert Miralles added that the market remained orderly and that as a cost-plus provider, CDW successfully passed through impacts while maintaining its margin structure.

Maya Neuman of Morgan Stanley inquired about the performance expectations for Advanced Solutions, specifically in servers and storage, looking ahead to 2025 beyond the anticipated rebound in PCs and networking.

Answer

CEO Paul Bay responded that headwinds in the networking category are expected to ease in Q4. He also noted that the notebook and desktop refresh cycle has shown consistent quarterly improvement throughout the year and that this momentum is anticipated to continue, though perhaps at a more gradual pace than some industry analysts predict.