TD SYNNEX CORP (SNX) Q3 2025 Earnings Summary

Executive Summary

Q3 FY25 delivered record non-GAAP gross billings ($22.73B) and non-GAAP EPS ($3.58), with revenue $15.65B up 6.6% YoY and above the high end of outlook; gross margin expanded 68 bps YoY to 7.22% as mix shifted more net, while GAAP EPS was $2.74 .
Broad-based strength: Endpoint Solutions (PC refresh, AI PCs) and Advanced Solutions (software, cybersecurity, cloud) drove double-digit gross billings growth; HIVE grew mid-30s with margins stabilizing and operating profit above expectations, lifting company results .
Q4 FY25 guidance calls for revenue $16.5–$17.3B, non-GAAP gross billings $23.0–$24.0B, non-GAAP EPS $3.45–$3.95, tax rate ~23%, and interest expense ~$91M; dividend declared at $0.44 per share (10% YoY increase) .
Capital returns remained robust: $210M in Q3 (repurchases $174M, dividends $36M); free cash flow was $214M in Q3, with management targeting ~$850M FCF in Q4 and ~$800M for FY25 given elevated working capital from growth (near-term cash conversion cycle improvement expected) .
Catalysts: upside surprise to revenue and EPS versus S&P Global consensus, stronger-than-expected HIVE momentum and Q4 EPS guidance; watch for tariff/macro developments and CFO transition announced Oct 2 (David Jordan named CFO) as potential governance signal .

What Went Well and What Went Wrong

What Went Well

Record non-GAAP diluted EPS ($3.58) and gross billings ($22.7B), both above guidance; “our third quarter non-GAAP gross billings and diluted earnings per share established new records” — CEO Patrick Zammit .
HIVE strength: gross billings up mid-30s with margins returning to historical levels and operating profit exceeding expectations; customer diversification improved, with second-largest customer accelerating and networking/compute demand robust .
Mix tailwinds: software gross billings up 26% (cybersecurity, infrastructure software) and PCs strong on Windows 11 refresh and higher AI PC mix; gross margin expanded and cost-to-gross profit improved to 58% as SG&A scaled .

What Went Wrong

Cash flow trajectory: free cash flow $214M in Q3; full-year FCF reset to ~$800M (from prior $1.1B commentary), reflecting higher working capital needs, particularly at HIVE with longer cash conversion cycles .
Gross-to-net remained elevated (~31%) due to more agent transactions (HIVE) and higher software mix, dampening reported revenue versus gross billings; net treatment above prior year and slightly higher than expected .
Macro/public sector: U.S. federal demand softer, tariff uncertainty cited; management remains “cautiously optimistic” given geopolitical and trade risks .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$15.845	$14.532	$14.946	$15.651
Non-GAAP Gross Billings ($USD Billions)	$21.211	$20.718	$21.648	$22.731
Gross Profit ($USD Billions)	$1.041	$0.998	$1.046	$1.130
Gross Margin %	6.57%	6.87%	7.00%	7.22%
Operating Income ($USD Millions, GAAP)	$324.8	$304.5	$328.1	$383.7
Operating Margin % (GAAP)	2.05%	2.10%	2.20%	2.45%
Non-GAAP Operating Income ($USD Millions)	$421.5	$398.8	$414.0	$474.9
Non-GAAP Operating Margin %	2.66%	2.74%	2.77%	3.03%
Net Income ($USD Millions, GAAP)	$194.8	$167.5	$184.9	$226.8
Diluted EPS (GAAP)	$2.29	$1.98	$2.21	$2.74
Non-GAAP Diluted EPS	$3.09	$2.80	$2.99	$3.58
Cash from Operations ($USD Millions)	$561.9	$(748.0)	$573.2	$246.1
Free Cash Flow ($USD Millions)	$512.9	$(789.5)	$542.9	$213.9

Regional Q3 FY25 vs Q3 FY24 Breakdown

Region	Revenue ($USD Billions)	Non-GAAP Gross Billings ($USD Billions)	Operating Income ($USD Millions)	Operating Margin %	Non-GAAP Operating Margin %
Americas	$9.268 vs $9.090 (+2.0%)	$14.201 vs $13.026 (+9.0%)	$283.6 vs $220.9	3.06% vs 2.43%	3.63% vs 3.00%
Europe	$5.175 vs $4.591 (+12.7%)	$6.863 vs $5.971 (+14.9%)	$70.4 vs $57.4	1.36% vs 1.25%	2.07% vs 2.05%
APJ	$1.208 vs $1.004 (+20.4%)	$1.667 vs $1.285 (+29.7%)	$29.6 vs $24.6	2.45% vs 2.45%	2.60% vs 2.65%

KPIs and Balance Metrics

KPI	Q4 2024	Q2 2025	Q3 2025
DSO (days)	60	62	64
DIO (days)	51	57	58
DPO (days)	93	96	99
Cash Conversion Cycle (days)	18	23	23
Gross Leverage Ratio (x)	—	2.4x	2.3x
Net Leverage Ratio (x)	—	1.9x	1.8x
Cash & Equivalents ($USD Millions)	$1,059	$767	$874
Total Debt ($USD Millions)	$3,736 LT; $171 current	$3,723 LT; $382 current	$3,044 LT; $1,195 current

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q4 FY25	Not previously provided	$16.5–$17.3B	New
Non-GAAP Gross Billings	Q4 FY25	Not previously provided	$23.0–$24.0B	New
Net Income (GAAP)	Q4 FY25	Not previously provided	$204–$245M	New
Non-GAAP Net Income	Q4 FY25	Not previously provided	$281–$322M	New
Diluted EPS (GAAP)	Q4 FY25	Not previously provided	$2.50–$3.00	New
Non-GAAP Diluted EPS	Q4 FY25	Not previously provided	$3.45–$3.95	New
Estimated Diluted Shares	Q4 FY25	—	~80.7M	New
Non-GAAP Tax Rate	Q4 FY25	—	~23%	New (operational metric)
Interest Expense	Q4 FY25	—	~$91M	New (OI&E)
Dividend	Q4 FY25	—	$0.44 per share declared (payable Oct 31, 2025)	Maintained QoQ; +10% YoY

Note: Q3 FY25 actuals came in above the high end of Q2-provided Q3 guidance on revenue and non-GAAP EPS .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 FY25)	Current Period (Q3 FY25)	Trend
HIVE demand and margins	Q1: Temporary demand pause at a newer customer; portfolio mix/investments pressured margins; elevated inventory and working capital; plan to unwind over H2 . Q2: HIVE grew high teens; margins hit by unrealized FX, expected to recover; strong ODM/CM programs; supply chain down YoY .	Mid-30s billings growth; margins returned to historical levels; operating profit above expectations; second-largest customer demand rebounded; networking/compute led growth .	Improving growth and margin quality; diversified customers.
PCs and AI PCs	Q1: Mid-cycle refresh; limited tariff pull-ins; ES margins benefitted from mix and large buys . Q2: Some pull-forward ($100–$200M sales, ~$$10M GP); refresh “mid innings” .	Continued strength globally; higher AI PC mix; “mid to late innings” of refresh; minimal Q3 pull-forward .	Sustained tailwind; normalization ahead post-refresh.
Software/Cybersecurity	Q1: Strategic technologies grew double digits; distribution outperformed . Q2: Software +20% billings (cloud, security, infra) .	Software +26% billings; cybersecurity and infrastructure strong .	Accelerating growth; margin-accretive mix.
Public sector	Q2: Strong public sector including Fed; cautious on macro/tariffs .	U.S. public sector low-single-digit billings; state & local strength offset Fed softness .	Mixed; Fed headwinds persist.
Tariffs/macro	Q1/Q2: Tariff uncertainty; cautious stance; modeled softer demand historically .	Cautious optimism; monitoring July–Aug macro/trade developments .	Risk overhang; watch policy cadence.
Working capital/FCF	Q1: Elevated HIVE inventory; CCC improvement targeted; opportunistic buybacks . Q2: CCC improved 4 days; FCF $543M; aiming $1.1B FY FCF previously .	Q3 FCF $214M; FY FCF expectation ~$800M, Q4 ~$850M split earnings + 2–3 days CCC; gross cash days ~16 .	Reset lower for FY; Q4 strong inflow expected.
Digital/AI programs	Q1: Digital Bridge, PACE, cloud marketplace scale . Q2: Services supporting OEM AI infrastructure; multi-vendor enablement .	Launching Partner First unified portal; enhancing Destination AI with Agentic AI, Security for AI, AI Factory .	Building digital moat; AI-centric enablement.

Management Commentary

“Our performance is a clear result of our teams’ strong execution, a differentiated go-to-market strategy, and a global, end-to-end portfolio of products and services that is unrivaled.” — CEO Patrick Zammit .
HIVE: “Gross billings increasing in the mid-30s… margins returned to historical levels, and operating profit exceeded expectations… customer mix is shifting favorably; substantial growth beyond our top customer.” — CEO .
Portfolio momentum: “Software continued to be a standout, experiencing a 26% increase in gross billings… continued demand in PCs driven by a higher mix of AI PCs and the Windows 11 refresh cycle.” — CEO .
Margin/operating leverage: “Gross margin… increased 23 bps YoY… Non-GAAP SG&A expense was $655M, or 3% of gross billings… cost-to-gross profit was 58%… Non-GAAP operating income increased 21% YoY to $475M.” — CFO .
Q4 outlook: “Gross billings $23–$24B… net revenue $16.5–$17.3B… non-GAAP net income $281–$322M… non-GAAP diluted EPS $3.45–$3.95… tax rate ~23%… interest expense $91M.” — CFO .

Q&A Highlights

HIVE sustainability and drivers: Management cited broad program/customer growth, second-largest customer demand returning, and stronger supply chain services; growth skewed to networking and traditional compute (GPU projects in pipeline) .
PC pull-forward and refresh: Q3 pull-forward minimal; demand driven by Windows 11 refresh and rising AI PC mix; refresh in “mid to late innings” .
Free cash flow recalibration: FY25 FCF now ~$800M; Q4 ~$850M, split between earnings and 2–3 day CCC improvement; medium-term net income-to-FCF conversion ~95% intact .
Macro/tariffs: Team remains cautious given tariff and geopolitical uncertainty; guide implies prudent stance vs Q2 commentary .
Customer diversification: Pipeline healthy across hyperscalers (“Super 6”) and sovereign opportunities; continued investments in U.S. manufacturing/SMT and engineering to move up the value chain .

Estimates Context

Q3 FY25 actuals vs Wall Street consensus (S&P Global):

Metric	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Revenue Consensus Mean ($USD Billions)	$15.220*	$14.790*	$14.313*	$15.111*
Revenue Actual ($USD Billions)	$15.845	$14.532	$14.946	$15.651
EPS Consensus Mean ($USD)	$3.049*	$2.906*	$2.715*	$3.046*
EPS Actual (Non-GAAP, $USD)	$3.09	$2.80	$2.99	$3.58

Q3 FY25 delivered a revenue beat (+$0.54B vs $15.11B consensus) and a strong EPS beat (+$0.53 vs $3.05 consensus); Q2 also beat both metrics, while Q1 was below EPS consensus amid HIVE mix/FX dynamics .
Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Strong beat-and-raise setup: Revenue and EPS exceeded consensus; Q4 EPS guidance midpoint (~$3.70) implies continued double-digit YoY profit growth — a near-term positive for sentiment and potential multiple support .
HIVE momentum and margin stabilization reduce prior risk; diversification beyond top customer and networking/compute strength underpin Q4 expectations despite lumpy dynamics .
Mix-driven economics: Elevated gross-to-net reflects more agent transactions and software mix; however, this structure supports higher gross margins and operating leverage via lower SG&A-to-billings .
PC refresh and AI PCs remain a tailwind through Q4; monitor cadence into FY26 as refresh normalizes and pricing benefits fade .
Free cash flow path: FY FCF reset to ~~$800M with targeted CCC improvements in Q4; strong Q4 cash inflow (~~$850M) is critical for capital return capacity and de-leveraging .
Capital returns intact: $210M returned in Q3 (repurchases/dividends) and $0.44 dividend declared; repurchase opportunism likely continues given cash generation plans .
Watch risks: Tariff/geopolitical uncertainty and HIVE lumpiness; governance continuity post CFO transition (Oct 2) appears managed with internal appointment (David Jordan) .

Why Results Moved

Upside was driven by: stronger HIVE programs (networking/compute), broad-based software/cybersecurity growth, and continued PC refresh/AI PC mix; net presentation lifted margins while reported revenue converted lower from billings .
Management execution and cost discipline improved cost-to-gross profit; SG&A efficiency and higher gross margins expanded operating margins despite elevated interest costs .
Guidance reflects confidence in sustained demand (gross billings +~11% QoQ midpoint), stabilized HIVE margins, and contained tax/OI&E assumptions .

Appendix: Additional Context

Q3 balance sheet/cash: Cash $874M; total assets $31.68B; LT borrowings $3.04B; current borrowings $1.19B; equity $8.45B .
Regional constant currency impacts: Consolidated revenue CC $15.34B (down ~$316M FX), with Europe CC revenue reflecting FX headwinds; Americas/APJ modest CC adjustments .
Corporate updates: CFO transition announced Oct 2 (David Jordan appointed CFO) — timing post-quarter; operational continuity highlighted by CEO .

All data and quotes sourced from TD SYNNEX’s Q3 FY25 8-K press release and earnings call, and prior two quarters’ filings/transcripts as cited.