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TD SYNNEX CORP (SNX) Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY25 delivered above-high-end results: revenue $14.946B (+7.2% YoY) and non-GAAP diluted EPS $2.99, with all regions contributing; free cash flow was $542.9M and cash from operations $573.2M .
  • Both revenue and EPS beat Wall Street consensus, driven by PC refresh, software/cloud/security strength, and modest demand pull-forward; revenue beat by ~$0.63B and EPS by ~$0.28, with management estimating $100–$200M sales and ~$10M gross profit pulled into Q2 from future periods .
  • Q3 FY25 guidance: revenue $14.7–$15.5B, non-GAAP gross billings $21.0–$22.0B, non-GAAP EPS $2.75–$3.25; expected non-GAAP tax rate ~23%, interest expense ~$89M, and planned ~$175M buybacks; dividend declared at $0.44/share .
  • Key stock reaction catalysts: broad-based growth across endpoint and advanced solutions, AI infrastructure engagement via HYVE, share repurchases and sustained dividend, offset by tariff/macro uncertainty and HYVE margin/FX headwinds with expected recovery in H2 .

What Went Well and What Went Wrong

What Went Well

  • Double-digit non-GAAP gross billings growth to $21.648B (+12.1% YoY; +11.3% CC), with non-GAAP EPS $2.99 above guidance high end; CEO highlighted growth ahead of market and contribution from all regions and major technologies .
  • Software billings up ~20%, and PCs strong on B2B refresh and Windows 11; networking returned to growth after multiple weak quarters, with Europe and APJ particularly strong .
  • Cash generation and returns: $573.2M operating cash, $542.9M free cash flow; $186M returned via $149M buybacks and $37M dividends; CCC stable at 23 days .

Selected quote:

  • “Gross billings grew double digits and non-GAAP diluted EPS exceeded the high end of our guidance with all regions and major technologies contributing.” — CEO Patrick Zammit .

What Went Wrong

  • HYVE margin compression QoQ due to unrealized FX losses and program mix; CFO expects partial recovery as inventory sells through in H2 .
  • Gross margin as % of gross billings declined 21 bps YoY; HYVE pressures masked otherwise flat margins ex-HYVE .
  • Macro and tariff uncertainties drive prudent outlook; demand expected to soften somewhat in H2 despite underlying tech tailwinds .

Financial Results

Headline Actuals vs Consensus (Primary EPS and Revenue)

MetricQ4 2024Q1 2025Q2 2025
Revenue Consensus Mean ($USD Billions)$15.220*$14.790*$14.313*
Revenue Actual ($USD Billions)$15.845 $14.532 $14.946
Primary EPS Consensus Mean ($)$3.0489*$2.9056*$2.7150*
Non-GAAP Diluted EPS Actual ($)$3.09 $2.80 $2.99

Values marked with * retrieved from S&P Global.

Highlights:

  • Q2 FY25: Revenue and EPS both beat (beat) consensus; Q1 FY25 missed (miss) both; Q4 FY24 beat both. Drivers included PC refresh, software/cloud/security demand, modest pull-forward of $100–$200M revenue and ~$10M GP .

GAAP and Non-GAAP Performance by Quarter

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$15.845 $14.532 $14.946
Gross Margin (%)6.57% 6.87% 7.00%
Operating Income ($USD Millions, GAAP)$324.8 $304.5 $328.1
Operating Margin (%) GAAP2.05% 2.10% 2.20%
Net Income ($USD Millions, GAAP)$194.8 $167.5 $184.9
Diluted EPS (GAAP) ($)$2.29 $1.98 $2.21
Non-GAAP Operating Income ($USD Millions)$421.5 $398.8 $414.0
Non-GAAP Operating Margin (%)2.66% 2.74% 2.77%
Non-GAAP Net Income ($USD Millions)$263.4 $237.4 $250.5
Non-GAAP Diluted EPS ($)$3.09 $2.80 $2.99

Regional Breakdown (Q2 FY25 vs Q2 FY24)

RegionRevenue ($USD Billions) Q2 FY24Revenue ($USD Billions) Q2 FY25Non-GAAP Gross Billings ($USD Billions) Q2 FY24Non-GAAP Gross Billings ($USD Billions) Q2 FY25Operating Income ($USD Millions) Q2 FY24Operating Income ($USD Millions) Q2 FY25Operating Margin (%) Q2 FY24Operating Margin (%) Q2 FY25
Americas$8.558 $9.009 $12.247 $13.346 $209.3 $252.6 2.45% 2.80%
Europe$4.427 $4.890 $5.862 $6.843 $34.4 $50.3 0.78% 1.03%
APJ$0.964 $1.047 $1.195 $1.459 $20.3 $25.2 2.11% 2.40%

Notes:

  • Mix shift to net presentation reduced revenue reported vs gross billings by ~5% overall, with region-specific impacts (Americas ~4%, Europe ~6%, APJ ~13%) .

KPIs and Cash Metrics

KPIQ4 2024Q1 2025Q2 2025
Non-GAAP Gross Billings ($USD Billions)$21.211 $20.718 $21.648
Gross-to-Net % (Non-GAAP)(25.3%) (29.9%) (31.0%)
Cash from Operations ($USD Millions)$561.9 $(748.0) $573.2
Free Cash Flow ($USD Millions)$512.9 $(789.5) $542.9
Cash Conversion Cycle (Days)18 27 23
Adjusted EBITDA ($USD Millions)$450.5 $427.1 $444.3

Guidance Changes

Q3 FY25 Guidance vs Prior (newly issued)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)Q3 2025—$14.7–$15.5 Initiated
Non-GAAP Gross Billings ($USD Billions)Q3 2025—$21.0–$22.0 Initiated
Net Income ($USD Millions, GAAP)Q3 2025—$159–$200 Initiated
Non-GAAP Net Income ($USD Millions)Q3 2025—$227–$268 Initiated
Diluted EPS (GAAP) ($)Q3 2025—$1.93–$2.43 Initiated
Non-GAAP Diluted EPS ($)Q3 2025—$2.75–$3.25 Initiated
Est. Diluted Shares (Millions)Q3 2025—~81.8 Initiated
Non-GAAP Tax Rate (%)Q3 2025—~23% Maintained (framework)
Interest Expense ($USD Millions)Q3 2025—~$89 Maintained (framework)
Share Repurchases ($USD Millions)Q3 2025—~175 planned Initiated
Dividend ($/share)Q3 2025$0.44 (Q2 declared) $0.44 payable July 25, 2025 Maintained

Q2 FY25 Guidance vs Actual (for context)

MetricPeriodGuidance (from Q1)ActualOutcome
Revenue ($USD Billions)Q2 2025$13.9–$14.7 $14.946 Above high end (beat)
Non-GAAP Gross Billings ($USD Billions)Q2 2025$19.7–$20.7 $21.648 Above high end (beat)
Non-GAAP Diluted EPS ($)Q2 2025$2.45–$2.95 $2.99 Above high end (beat)
Non-GAAP Net Income ($USD Millions)Q2 2025$205–$247 $250.5 Above high end (beat)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Data Center Infrastructure & ServicesBuilding momentum into FY25; portfolio positioned for high-growth segments Deep engagement building AI infrastructure solutions; certified to build for OEMs; HYVE grew high-teens; ODM/CM up ~45% on largest customer Strengthening engagement; expanding scope
PC RefreshEarly signs; Windows 11 tailwinds forming Strong B2B demand; mid-cycle; supports endpoint margins Strengthening; mid-innings
Software/Cloud/SecurityGrowth in strategic tech; software strength Software +20% billings; public cloud double-digit; security bright spot Accelerating
NetworkingMixed/soft comps previously “Networking back to growth” modest low-single-digit; also strength within HYVE Inflecting positive
HYVE Margins & FXInventory/working capital heavy; demand push-out from a customer (Q1) Margins down QoQ due to unrealized FX and program mix; expected recovery in H2; stabilization underway Stabilizing; recovery expected
Regional TrendsAPJ strong in FY24; Europe steady Europe +10.5% revenue; APJ +8.7%; India and Japan drivers; Americas solid Broad-based strength
Macro/TariffsMonitoring trade policy; Q1 commentary cautious Volatile environment; tariffs decision in July; prudent guidance; expect some H2 demand softening Uncertain; cautious stance
Cash Flow/Working CapitalFY24 strong FCF; Q1 working capital heavy CCC improved; HIVE working capital unwinding; reaffirming ~$1.1B FY25 FCF target Improving per plan

Management Commentary

  • “Our strategy and the execution of our team are enabling us to grow ahead of market... non-GAAP diluted EPS exceeded the high end of our guidance with all regions and major technologies contributing.” — CEO Patrick Zammit .
  • “In Q2, there was approximately 31% reduction from gross billings to net revenue... driven by an increase in HYVE transactions where we act as an agent and a higher mix of software.” — CFO Marshall Witt .
  • “HYVE gross margins declined from Q1 due to unrealized FX losses and program mix. We expect a portion of the unrealized FX losses will be recovered as we sell through the product in the back half of the year.” — CFO Marshall Witt .

Q&A Highlights

  • Demand pull-forward magnitude and impact: ~$100–$200M revenue and ~$10M gross profit pulled into Q2; refresh expected to remain strong with ES/AS mix roughly equal in H2 .
  • Seasonality vs guidance: Management prudently models softer H2 demand amid tariffs/macro; Q3 guided slightly above analyst day framework; Q4 modeled at typical 3–4% growth sequentially .
  • Free cash flow trajectory: Reaffirmed ~$1.1B FY25 FCF; CCC improvement of 4 days in Q2; targeted further 2–3 days in Q3 and 1–2 in Q4; HYVE working capital unwinding as planned .
  • Linearity: Mid-teens growth in March/April; softer but still positive in May; June tracking guidance .
  • HYVE detail: ODM/CM up ~45% YoY (largest customer), second customer demand returning; margins pressured by FX/program but stabilizing; portfolio mix 6% ODM/CM and 2–4% spares supply chain of gross billings .

Estimates Context

  • Q2 FY25 beat: Actual revenue $14.946B vs $14.313B consensus; Non-GAAP EPS $2.99 vs $2.715 consensus (beat on both) *.
  • Q1 FY25 miss: Actual revenue $14.532B vs $14.790B consensus; Non-GAAP EPS $2.80 vs $2.906 consensus (miss on both)*.
  • Q4 FY24 beat: Revenue $15.845B vs $15.220B consensus; Non-GAAP EPS $3.09 vs $3.049 consensus (beat on both)*.

Drivers for upward estimate revisions:

  • Strength in PC refresh, software/cloud/security, and networking inflection; HYVE expected margin recovery in H2; ongoing share repurchases and sustained dividend .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Broad-based growth with operational execution: Q2 revenue and EPS above guidance high end; mix shift to net presentation masks underlying volume captured by gross billings (bullish for top-line quality) .
  • HYVE is a swing factor but improving: FX/program headwinds pressured margins in Q2; management expects recovery and sees pipeline expansion (ODM/CM, sovereign opportunities) (medium-term margin tailwind) .
  • Cash generation on track: Reaffirmed ~$1.1B FY25 FCF; CCC improvements and HIVE working capital unwind accelerate cash return capacity (supports buybacks/dividend) .
  • Guidance is prudent amidst macro/tariffs: Q3 outlook solid with planned ~$175M buybacks and $0.44 dividend; maintain awareness of July tariff decisions and geopolitical risks (risk management) .
  • End-market tailwinds: Software, cloud, security, and PC refresh remain strong; networking turning positive; Europe/APJ broad strength provides diversification (demand resilience) .
  • Trading implications: Q2 beat likely supports near-term sentiment; watch HYVE margin trajectory and tariff headlines; Q3 prints vs guidance and execution on FCF will be key stock drivers .

Additional reference data:

  • Balance sheet at Q2: Cash $767.1M; total debt (current+long-term) ~$4.106B; equity $8.342B; gross leverage ~2.4x, net ~1.9x (as cited) .
  • Dividend declared: $0.44 per share, payable July 25, 2025 .

Press release developments (context):

  • TD SYNNEX acquired Apptium to accelerate StreamOne and XaaS capabilities, strengthening cloud commerce and AI/SaaS orchestration for partners .

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