TD SYNNEX Reports Fiscal 2024 First Quarter Results; Announces New $2B Share Repurchase Authorization
-
Revenue of
$14.0 billion , within our outlook of$14.0 -$14.7 billion . -
Non-GAAP gross billings(1) of
$19.3 billion , within our outlook of$19.0 -$20.0 billion . - Gross margin and non-GAAP gross margin(1) of 7.20%, up 57 bps and 52 bps, respectively, from the prior fiscal first quarter.
-
Net income of
$172 million , and non-GAAP net income(1) of$266 million . -
Diluted earnings per share (“EPS”) of
$1.93 , and non-GAAP diluted EPS(1) of$2.99 , at the upper end of our outlook. -
Cash provided by operations of
$385 million and free cash flow(1) of$344 million , compared to cash used in operations of$103 million and free cash flow(1) of negative$140 million in the prior fiscal first quarter. -
Returned
$235 million to shareholders in the fiscal first quarter in the form of$199 million of share repurchases and$36 million in dividends, representing a 59% increase from the prior fiscal first quarter. -
Board of Directors approved a new
$2 billion share repurchase authorization, supplementing the existing program, of which approximately$197 million remains. -
Announced a quarterly cash dividend of
$0.40 per common share, up 14% from the prior fiscal year.
Consolidated Financial Highlights for the Fiscal 2024 First Quarter: |
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|
|
Q1 FY24 |
|
Q1 FY23 |
|
Net Change from Q1 FY23 |
|||||
Revenue ($M) |
|
$ |
13,975.3 |
|
|
$ |
15,125.4 |
|
|
(7.6 |
)% |
Non-GAAP gross billings ($M)(1) |
|
$ |
19,266.7 |
|
|
$ |
20,202.2 |
|
|
(4.6 |
)% |
Gross profit ($M) |
|
$ |
1,005.8 |
|
|
$ |
1,003.6 |
|
|
0.2 |
% |
Non-GAAP gross profit ($M)(1) |
|
$ |
1,005.8 |
|
|
$ |
1,011.0 |
|
|
(0.5 |
)% |
Gross margin |
|
|
7.20 |
% |
|
|
6.63 |
% |
|
57 bps |
|
Non-GAAP gross margin(1) |
|
|
7.20 |
% |
|
|
6.68 |
% |
|
52 bps |
|
Operating income ($M) |
|
$ |
302.6 |
|
|
$ |
298.2 |
|
|
1.5 |
% |
Non-GAAP operating income ($M)(1) |
|
$ |
424.6 |
|
|
$ |
442.9 |
|
|
(4.1 |
)% |
Operating margin |
|
|
2.17 |
% |
|
|
1.97 |
% |
|
20 bps |
|
Non-GAAP operating margin(1) |
|
|
3.04 |
% |
|
|
2.93 |
% |
|
11 bps |
|
Net income ($M) |
|
$ |
172.1 |
|
|
$ |
167.0 |
|
|
3.1 |
% |
Non-GAAP net income ($M)(1) |
|
$ |
266.2 |
|
|
$ |
279.2 |
|
|
(4.7 |
)% |
Diluted EPS |
|
$ |
1.93 |
|
|
$ |
1.75 |
|
|
10.3 |
% |
Non-GAAP Diluted EPS(1) |
|
$ |
2.99 |
|
|
$ |
2.93 |
|
|
2.1 |
% |
“We generated strong results in our fiscal first quarter, driven by our expansive portfolio and an improving IT demand environment. This resulted in record margins, EPS at the upper end of our expectations, healthy free cash flow and robust capital returned to shareholders,” said
Consolidated Fiscal 2024 First Quarter Highlights
-
Revenue was
$14.0 billion , compared to$15.1 billion in the prior fiscal first quarter, representing a decrease of 7.6% and within our outlook. On a constant currency(1) basis, revenue decreased by 8.3% compared to the prior fiscal first quarter. A greater percentage of our revenue was presented on a net basis, which negatively impacted our revenue compared to the prior fiscal first quarter by approximately 3%. -
Non-GAAP gross billings(1) were
$19.3 billion , compared to$20.2 billion in the prior fiscal first quarter. -
Gross profit was
$1,006 million , compared to$1,004 million in the prior fiscal first quarter. Non-GAAP gross profit(1) was$1,006 million , compared to$1,011 million in the prior fiscal first quarter. - Gross margin was 7.2%, compared to 6.6% in the prior fiscal first quarter. Non-GAAP gross margin(1) was 7.2%, compared to 6.7% in the prior fiscal first quarter. The presentation of additional revenues on a net basis positively impacted our gross margin and non-GAAP gross margin(1) by approximately 23 basis points.
-
Operating income was
$303 million , compared to$298 million in the prior fiscal first quarter. Non-GAAP operating income(1) was$425 million , compared to$443 million in the prior fiscal first quarter. - Operating margin was 2.2%, compared to 2.0% in the prior fiscal first quarter. Non-GAAP operating margin(1) was 3.0%, compared to 2.9% in the prior fiscal first quarter.
-
Diluted EPS was
$1.93 , compared to$1.75 in the prior fiscal first quarter. Non-GAAP diluted EPS(1) was$2.99 , compared to$2.93 in the prior fiscal first quarter, at the upper end of our outlook. -
Cash provided by operations of
$385 million , and free cash flow(1) of$344 million , compared to cash used in operations of$103 million and free cash flow(1) of negative$140 million in the prior fiscal first quarter. -
We returned
$235 million to shareholders in the form of share repurchases and dividends, up 59% from the prior fiscal first quarter.
Regional Fiscal 2024 First Quarter Highlights
-
Americas :-
Revenue was
$7.9 billion , compared to$8.6 billion in the prior fiscal first quarter, representing a decrease of 8.5%. On a constant currency(1) basis, revenue decreased by 8.6% compared to the prior fiscal first quarter. A greater percentage of our revenue was presented on a net basis, which negatively impacted our revenue compared to the prior fiscal first quarter by approximately 4%. -
Non-GAAP gross billings(1) were
$11.5 billion , compared to$12.0 billion in the prior fiscal first quarter, representing a decrease of 4.5%. -
Operating income was
$160 million , compared to$180 million in the prior fiscal first quarter. Non-GAAP operating income(1) was$240 million , compared to$266 million in the prior fiscal first quarter. - Operating margin was 2.0%, compared to 2.1% in the prior fiscal first quarter. Non-GAAP operating margin(1) was 3.0%, compared to 3.1% in the prior fiscal first quarter.
-
Revenue was
-
Europe :-
Revenue was
$5.1 billion , compared to$5.5 billion in the prior fiscal first quarter, representing a decrease of 7.3%. On a constant currency(1) basis, revenue decreased by 9.5% compared to the prior fiscal first quarter. A greater percentage of our revenue was presented on a net basis, which negatively impacted our revenue compared to the prior fiscal first quarter by approximately 2%. -
Non-GAAP gross billings(1) were
$6.6 billion , compared to$7.0 billion in the prior fiscal first quarter, representing a decrease of 5.4%. -
Operating income was
$108 million , compared to$88 million in the prior fiscal first quarter. Non-GAAP operating income(1) was$148 million , compared to$143 million in the prior fiscal first quarter. - Operating margin was 2.1%, compared to 1.6% in the prior fiscal first quarter. Non-GAAP operating margin(1) was 2.9%, compared to 2.6% in the prior fiscal first quarter.
-
Revenue was
-
Asia-Pacific andJapan :-
Revenue was
$955 million , compared to$966 million in the prior fiscal first quarter, representing a decrease of 1.2%. On a constant currency(1) basis, revenue increased by 1.7% compared to the prior fiscal first quarter. -
Non-GAAP gross billings(1) were
$1,159 million , compared to$1,177 million in the prior fiscal first quarter, representing a decrease of 1.6%. -
Operating income was
$35 million , compared to$30 million in the prior fiscal first quarter. Non-GAAP operating income(1) was$36 million , compared to$33 million in the prior fiscal first quarter. - Operating margin was 3.6%, compared to 3.2% in the prior fiscal first quarter. Non-GAAP operating margin(1) was 3.8%, compared to 3.4% in the prior fiscal first quarter.
-
Revenue was
Fiscal 2024 Second Quarter Outlook
The following statements are based on TD SYNNEX’s current expectations for the fiscal 2024 second quarter. These statements are forward-looking and actual results may differ materially. Non-GAAP gross billings(1) include the impact of costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts, and the remaining non-GAAP financial measures exclude the impact of acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation, and the related tax effects thereon.
|
|
Q2 2024 Outlook |
Revenue |
|
|
Non-GAAP gross billings(1) |
|
|
Net income |
|
|
Non-GAAP net income(1) |
|
|
Diluted earnings per share |
|
|
Non-GAAP diluted earnings per share(1) |
|
|
Estimated outstanding diluted weighted average shares |
|
86.8 million |
Share Repurchase Announcement
The TD SYNNEX Board of Directors has approved a share repurchase program of up to
Dividend
Conference Call and Webcast
A live audio webcast of the earnings call will be accessible at ir.tdsynnex.com and a replay of the webcast will be available following the call.
About
(1)Use of Non-GAAP Financial Information
In addition to the financial results presented in accordance with GAAP,
Acquisition, integration and restructuring costs, which are expensed as incurred, primarily represent professional services costs for legal, banking, consulting and advisory services, severance and other personnel-related costs, share-based compensation expense and debt extinguishment fees that are incurred in connection with acquisition, integration, restructuring, and divestiture activities. From time to time, this category may also include transaction-related gains/losses on divestitures/spin-off of businesses, costs related to long-lived assets including impairment charges and accelerated depreciation and amortization expense due to changes in asset useful lives, as well as various other costs associated with the acquisition or divestiture.
TD SYNNEX’s acquisition activities have resulted in the recognition of finite-lived intangible assets which consist primarily of customer relationships and vendor lists. Finite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s Statements of Operations. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets does not directly relate to the sale of the Company’s products. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets, along with the other non-GAAP adjustments, which neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.
Share-based compensation expense is a non-cash expense arising from the grant of equity awards to employees and non-employee members of the Company’s Board of Directors based on the estimated fair value of those awards. Although share-based compensation is an important aspect of the compensation of our employees, the fair value of the share-based awards may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share-based awards and the expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Given the variety and timing of awards and the subjective assumptions that are necessary when calculating share-based compensation expense,
Purchase accounting adjustments are primarily related to the impact of recognizing the acquired vendor and customer liabilities related to the merger with Tech Data at fair value. These adjustments benefited our non-GAAP operating income through the third fiscal quarter of fiscal 2023 based on historical settlement patterns with our vendors and in accordance with the timing defined in our policy for releasing vendor and customer liabilities we deem remote to be paid.
Trailing fiscal four quarters ROIC is defined as the last four quarters’ tax effected operating income divided by the average of the last five quarterly balances of borrowings and equity, net of cash. Adjusted ROIC is calculated by excluding the tax effected impact of non-GAAP adjustments from operating income and by excluding the cumulative tax effected impact of current and prior period non-GAAP adjustments on equity.
Safe Harbor Statement
Statements in this news release regarding
These risks and uncertainties include, but are not limited to: the unfavorable outcome of any legal proceedings that have been or may be instituted against us; the ability to retain key personnel; general economic and political conditions; continued or increased weakness in information technology spending; seasonality; the loss or consolidation of one or more of our significant original equipment manufacturer, or OEM, suppliers or customers; market acceptance and product life of the products we assemble and distribute; competitive conditions in our industry and their impact on our margins; pricing, margin and other terms with our OEM suppliers; our ability to gain market share; variations in supplier-sponsored programs; changes in our costs and operating expenses; the timing and amount of returns to our shareholders via repurchases of our common stock and dividends; changes in foreign currency exchange rates; increased inflation; changes in tax laws; risks associated with our international operations; uncertainties and variability in demand by our reseller and integration customers; supply shortages or delays; any termination or reduction in our floor plan financing arrangements; credit exposure to our reseller customers and negative trends in their businesses; any incidents of theft; the declaration, timing and payment of dividends, and the Board’s reassessment thereof; and other risks and uncertainties detailed in our Form 10-K for the fiscal year ended
Copyright 2024 TD SYNNEX CORPORATION. All rights reserved.
|
||||||||
Consolidated Balance Sheets |
||||||||
(Currency and share amounts in thousands, except par value) |
||||||||
(Amounts may not add or compute due to rounding) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,030,946 |
|
|
$ |
1,033,776 |
|
Accounts receivable, net |
|
|
8,902,803 |
|
|
|
10,297,814 |
|
Receivables from vendors, net |
|
|
914,910 |
|
|
|
964,334 |
|
Inventories |
|
|
7,091,146 |
|
|
|
7,146,274 |
|
Other current assets |
|
|
640,901 |
|
|
|
642,238 |
|
Total current assets |
|
|
18,580,706 |
|
|
|
20,084,436 |
|
Property and equipment, net |
|
|
459,093 |
|
|
|
450,024 |
|
|
|
|
3,902,232 |
|
|
|
3,904,170 |
|
Intangible assets, net |
|
|
4,162,437 |
|
|
|
4,244,314 |
|
Other assets, net |
|
|
695,561 |
|
|
|
729,870 |
|
Total assets |
|
$ |
27,800,029 |
|
|
$ |
29,412,814 |
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Borrowings, current |
|
$ |
926,739 |
|
|
$ |
983,585 |
|
Accounts payable |
|
|
12,372,749 |
|
|
|
13,347,281 |
|
Other accrued liabilities |
|
|
1,955,444 |
|
|
|
2,407,896 |
|
Total current liabilities |
|
|
15,254,932 |
|
|
|
16,738,762 |
|
Long-term borrowings |
|
|
3,082,367 |
|
|
|
3,099,193 |
|
Other long-term liabilities |
|
|
493,031 |
|
|
|
498,656 |
|
Deferred tax liabilities |
|
|
867,524 |
|
|
|
893,021 |
|
Total liabilities |
|
|
19,697,854 |
|
|
|
21,229,632 |
|
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
99 |
|
|
|
99 |
|
Additional paid-in capital |
|
|
7,438,820 |
|
|
|
7,435,274 |
|
|
|
|
(1,138,919 |
) |
|
|
(949,714 |
) |
Accumulated other comprehensive loss |
|
|
(539,072 |
) |
|
|
(507,248 |
) |
Retained earnings |
|
|
2,341,247 |
|
|
|
2,204,771 |
|
Total stockholders' equity |
|
|
8,102,175 |
|
|
|
8,183,182 |
|
Total liabilities and equity |
|
$ |
27,800,029 |
|
|
$ |
29,412,814 |
|
||||||||
Consolidated Statements of Operations |
||||||||
(Currency and share amounts in thousands, except per share amounts) |
||||||||
(Amounts may not add or compute due to rounding) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Revenue |
|
$ |
13,975,253 |
|
|
$ |
15,125,371 |
|
Cost of revenue |
|
|
(12,969,487 |
) |
|
|
(14,121,804 |
) |
Gross profit |
|
|
1,005,766 |
|
|
|
1,003,567 |
|
Selling, general and administrative expenses |
|
|
(671,545 |
) |
|
|
(654,223 |
) |
Acquisition, integration and restructuring costs |
|
|
(31,649 |
) |
|
|
(51,182 |
) |
Operating income |
|
|
302,572 |
|
|
|
298,162 |
|
Interest expense and finance charges, net |
|
|
(75,891 |
) |
|
|
(80,200 |
) |
Other expense, net |
|
|
(2,884 |
) |
|
|
(156 |
) |
Income before income taxes |
|
|
223,797 |
|
|
|
217,806 |
|
Provision for income taxes |
|
|
(51,669 |
) |
|
|
(50,786 |
) |
Net income |
|
$ |
172,128 |
|
|
$ |
167,020 |
|
Earnings per common share: |
|
|
|
|
||||
Basic |
|
$ |
1.94 |
|
|
$ |
1.76 |
|
Diluted |
|
$ |
1.93 |
|
|
$ |
1.75 |
|
Weighted-average common shares outstanding: |
|
|
|
|
||||
Basic |
|
|
87,891 |
|
|
|
94,259 |
|
Diluted |
|
|
88,203 |
|
|
|
94,539 |
|
|||||||||||
Regional Financial Highlights - Fiscal 2024 First Quarter |
|||||||||||
(Currency in millions) |
|||||||||||
(Amounts may not add or compute due to rounding) |
|||||||||||
|
|
|
|
|
|
|
|||||
|
|
Q1 FY24 |
|
Q1 FY23 |
|
Net Change from
|
|||||
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
7,903.1 |
|
|
$ |
8,638.7 |
|
|
(8.5 |
)% |
Non-GAAP gross billings(1) |
|
$ |
11,506.3 |
|
|
$ |
12,043.9 |
|
|
(4.5 |
)% |
Operating income |
|
$ |
159.7 |
|
|
$ |
179.5 |
|
|
(11.0 |
)% |
Non-GAAP operating income(1) |
|
$ |
240.3 |
|
|
$ |
266.4 |
|
|
(9.8 |
)% |
Operating margin |
|
|
2.02 |
% |
|
|
2.08 |
% |
|
(6) bps |
|
Non-GAAP operating margin(1) |
|
|
3.04 |
% |
|
|
3.08 |
% |
|
(4) bps |
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
5,117.3 |
|
|
$ |
5,520.4 |
|
|
(7.3 |
)% |
Non-GAAP gross billings(1) |
|
$ |
6,601.4 |
|
|
$ |
6,980.9 |
|
|
(5.4 |
)% |
Operating income |
|
$ |
108.3 |
|
|
$ |
88.2 |
|
|
22.8 |
% |
Non-GAAP operating income(1) |
|
$ |
147.8 |
|
|
$ |
143.4 |
|
|
3.1 |
% |
Operating margin |
|
|
2.12 |
% |
|
|
1.60 |
% |
|
52 bps |
|
Non-GAAP operating margin(1) |
|
|
2.89 |
% |
|
|
2.60 |
% |
|
29 bps |
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Revenue |
|
$ |
954.9 |
|
|
$ |
966.2 |
|
|
(1.2 |
)% |
Non-GAAP gross billings(1) |
|
$ |
1,159.0 |
|
|
$ |
1,177.3 |
|
|
(1.6 |
)% |
Operating income |
|
$ |
34.6 |
|
|
$ |
30.5 |
|
|
13.4 |
% |
Non-GAAP operating income(1) |
|
$ |
36.4 |
|
|
$ |
33.1 |
|
|
10.0 |
% |
Operating margin |
|
|
3.62 |
% |
|
|
3.15 |
% |
|
47 bps |
|
Non-GAAP operating margin(1) |
|
|
3.82 |
% |
|
|
3.42 |
% |
|
40 bps |
|
|
|
|
|
|
|
|
|||||
(1) A reconciliation of TD SYNNEX’s GAAP to non-GAAP financial information is set forth in the supplemental tables at the end of this press release. |
|
|||||||
Reconciliation of GAAP to Non-GAAP financial measures |
|||||||
(Currency in thousands) |
|||||||
(Amounts may not add or compute due to rounding) |
|||||||
|
|
|
|||||
|
|
Three Months Ended |
|||||
|
|
|
|
|
|||
Revenue in constant currency |
|
|
|
|
|||
Consolidated |
|
|
|
|
|||
Revenue |
|
$ |
13,975,253 |
|
|
$ |
15,125,371 |
Impact of changes in foreign currencies |
|
|
(102,478 |
) |
|
|
— |
Revenue in constant currency |
|
$ |
13,872,775 |
|
|
$ |
15,125,371 |
|
|
|
|
|
|||
|
|
|
|
|
|||
Revenue |
|
$ |
7,903,096 |
|
|
$ |
8,638,704 |
Impact of changes in foreign currencies |
|
|
(10,843 |
) |
|
|
— |
Revenue in constant currency |
|
$ |
7,892,253 |
|
|
$ |
8,638,704 |
|
|
|
|
|
|||
|
|
|
|
|
|||
Revenue |
|
$ |
5,117,252 |
|
|
$ |
5,520,437 |
Impact of changes in foreign currencies |
|
|
(119,360 |
) |
|
|
— |
Revenue in constant currency |
|
$ |
4,997,892 |
|
|
$ |
5,520,437 |
|
|
|
|
|
|||
|
|
|
|
|
|||
Revenue |
|
$ |
954,905 |
|
|
$ |
966,230 |
Impact of changes in foreign currencies |
|
|
27,725 |
|
|
|
— |
Revenue in constant currency |
|
$ |
982,630 |
|
|
$ |
966,230 |
|
||||||
Reconciliation of GAAP to Non-GAAP financial measures |
||||||
(Currency in thousands) |
||||||
(Amounts may not add or compute due to rounding) |
||||||
|
|
|
||||
|
|
Three Months Ended |
||||
|
|
|
|
|
||
Non-GAAP gross billings |
|
|
|
|
||
Consolidated |
|
|
|
|
||
Revenue |
|
$ |
13,975,253 |
|
$ |
15,125,371 |
Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts |
|
|
5,291,480 |
|
|
5,076,822 |
Non-GAAP gross billings |
|
$ |
19,266,733 |
|
$ |
20,202,193 |
|
|
|
|
|
||
|
|
|
|
|
||
Revenue |
|
$ |
7,903,096 |
|
$ |
8,638,704 |
Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts |
|
|
3,603,247 |
|
|
3,405,240 |
Non-GAAP gross billings |
|
$ |
11,506,343 |
|
|
12,043,944 |
|
|
|
|
|
||
|
|
|
|
|
||
Revenue |
|
$ |
5,117,252 |
|
$ |
5,520,437 |
Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts |
|
|
1,484,128 |
|
|
1,460,494 |
Non-GAAP gross billings |
|
$ |
6,601,380 |
|
$ |
6,980,931 |
|
|
|
|
|
||
|
|
|
|
|
||
Revenue |
|
$ |
954,905 |
|
$ |
966,230 |
Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts |
|
|
204,105 |
|
|
211,088 |
Non-GAAP gross billings |
|
$ |
1,159,010 |
|
$ |
1,177,318 |
|
||||||||
Reconciliation of GAAP to Non-GAAP financial measures |
||||||||
(Currency in thousands) |
||||||||
(Amounts may not add or compute due to rounding) |
||||||||
|
|
|
||||||
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Non-GAAP gross profit & non-GAAP gross margin |
|
|
|
|
||||
Revenue |
|
$ |
13,975,253 |
|
|
$ |
15,125,371 |
|
|
|
|
|
|
||||
Gross profit |
|
$ |
1,005,766 |
|
|
$ |
1,003,567 |
|
Purchase accounting adjustments |
|
|
— |
|
|
|
7,450 |
|
Non-GAAP gross profit |
|
$ |
1,005,766 |
|
|
$ |
1,011,017 |
|
|
|
|
|
|
||||
Gross margin |
|
|
7.20 |
% |
|
|
6.63 |
% |
Non-GAAP gross margin |
|
|
7.20 |
% |
|
|
6.68 |
% |
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Adjusted selling, general and administrative expenses |
|
|
|
|
||||
Revenue |
|
$ |
13,975,253 |
|
|
$ |
15,125,371 |
|
Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts |
|
|
5,291,480 |
|
|
|
5,076,822 |
|
Non-GAAP gross billings |
|
$ |
19,266,733 |
|
|
$ |
20,202,193 |
|
|
|
|
|
|
||||
Selling, general and administrative expenses(1) |
|
$ |
703,194 |
|
|
$ |
705,405 |
|
Acquisition, integration and restructuring costs |
|
|
31,649 |
|
|
|
51,182 |
|
Amortization of intangibles |
|
|
72,877 |
|
|
|
73,023 |
|
Share-based compensation |
|
|
17,490 |
|
|
|
13,074 |
|
Adjusted selling, general and administrative expenses |
|
$ |
581,178 |
|
|
$ |
568,126 |
|
|
|
|
|
|
||||
Selling, general and administrative expenses as a percentage of revenue |
|
|
5.03 |
% |
|
|
4.66 |
% |
Adjusted selling, general and administrative expenses as a percentage of non-GAAP gross billings |
|
|
3.02 |
% |
|
|
2.81 |
% |
(1) Includes acquisition, integration and restructuring costs, which are presented separately on the Consolidated Statements of Operations. |
|
||||||||
Reconciliation of GAAP to Non-GAAP financial measures |
||||||||
(Currency in thousands) |
||||||||
(Amounts may not add or compute due to rounding) |
||||||||
|
|
|
||||||
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Non-GAAP operating income & non-GAAP operating margin - Consolidated |
|
|
|
|
||||
Revenue |
|
$ |
13,975,253 |
|
|
$ |
15,125,371 |
|
|
|
|
|
|
||||
Operating income |
|
$ |
302,572 |
|
|
$ |
298,162 |
|
Acquisition, integration and restructuring costs |
|
|
31,649 |
|
|
|
51,182 |
|
Amortization of intangibles |
|
|
72,877 |
|
|
|
73,023 |
|
Share-based compensation |
|
|
17,490 |
|
|
|
13,074 |
|
Purchase accounting adjustments |
|
|
— |
|
|
|
7,450 |
|
Non-GAAP operating income |
|
$ |
424,588 |
|
|
$ |
442,891 |
|
|
|
|
|
|
||||
Operating margin |
|
|
2.17 |
% |
|
|
1.97 |
% |
Non-GAAP operating margin |
|
|
3.04 |
% |
|
|
2.93 |
% |
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Non-GAAP operating income & non-GAAP operating margin - |
|
|
|
|
||||
Revenue |
|
$ |
7,903,096 |
|
|
$ |
8,638,704 |
|
|
|
|
|
|
||||
Operating income |
|
$ |
159,682 |
|
|
$ |
179,505 |
|
Acquisition, integration and restructuring costs |
|
|
27,372 |
|
|
|
35,133 |
|
Amortization of intangibles |
|
|
41,453 |
|
|
|
42,414 |
|
Share-based compensation |
|
|
11,798 |
|
|
|
9,362 |
|
Non-GAAP operating income |
|
$ |
240,305 |
|
|
$ |
266,414 |
|
|
|
|
|
|
||||
Operating margin |
|
|
2.02 |
% |
|
|
2.08 |
% |
Non-GAAP operating margin |
|
|
3.04 |
% |
|
|
3.08 |
% |
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Non-GAAP operating income & non-GAAP operating margin - |
|
|
|
|
||||
Revenue |
|
$ |
5,117,252 |
|
|
$ |
5,520,437 |
|
|
|
|
|
|
||||
Operating income |
|
$ |
108,325 |
|
|
$ |
88,205 |
|
Acquisition, integration and restructuring costs |
|
|
3,952 |
|
|
|
14,583 |
|
Amortization of intangibles |
|
|
30,802 |
|
|
|
29,985 |
|
Share-based compensation |
|
|
4,763 |
|
|
|
3,176 |
|
Purchase accounting adjustments |
|
|
— |
|
|
|
7,450 |
|
Non-GAAP operating income |
|
$ |
147,842 |
|
|
$ |
143,399 |
|
|
|
|
|
|
||||
Operating margin |
|
|
2.12 |
% |
|
|
1.60 |
% |
Non-GAAP operating margin |
|
|
2.89 |
% |
|
|
2.60 |
% |
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Non-GAAP operating income & non-GAAP operating margin - |
|
|
|
|
||||
Revenue |
|
$ |
954,905 |
|
|
$ |
966,230 |
|
|
|
|
|
|
||||
Operating income |
|
$ |
34,565 |
|
|
$ |
30,452 |
|
Acquisition, integration and restructuring costs |
|
|
325 |
|
|
|
1,466 |
|
Amortization of intangibles |
|
|
622 |
|
|
|
624 |
|
Share-based compensation |
|
|
929 |
|
|
|
536 |
|
Non-GAAP operating income |
|
$ |
36,441 |
|
|
$ |
33,078 |
|
|
|
|
|
|
||||
Operating margin |
|
|
3.62 |
% |
|
|
3.15 |
% |
Non-GAAP operating margin |
|
|
3.82 |
% |
|
|
3.42 |
% |
|
||||||
Reconciliation of GAAP to Non-GAAP financial measures |
||||||
(Currency in thousands, except per share amounts) |
||||||
(Amounts may not add or compute due to rounding) |
||||||
|
|
|
||||
|
|
Three Months Ended |
||||
|
|
|
|
|
||
Adjusted EBITDA |
|
|
|
|
||
Net income |
|
$ |
172,128 |
|
$ |
167,020 |
Interest expense and finance charges, net |
|
|
75,891 |
|
|
80,200 |
Provision for income taxes |
|
|
51,669 |
|
|
50,786 |
Depreciation(1) |
|
|
27,742 |
|
|
31,654 |
Amortization of intangibles |
|
|
72,877 |
|
|
73,023 |
EBITDA |
|
$ |
400,307 |
|
$ |
402,683 |
Other expense, net |
|
|
2,884 |
|
|
156 |
Acquisition, integration and restructuring costs |
|
|
31,254 |
|
|
45,029 |
Share-based compensation |
|
|
17,490 |
|
|
13,074 |
Purchase accounting adjustments |
|
|
— |
|
|
7,450 |
Adjusted EBITDA |
|
$ |
451,935 |
|
$ |
468,392 |
(1) Includes depreciation recorded in acquisition, integration, and restructuring costs. |
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Non-GAAP net income & non-GAAP diluted EPS(1) |
|
|
|
|
||||
Net income |
|
$ |
172,128 |
|
|
$ |
167,020 |
|
Acquisition, integration and restructuring costs |
|
|
31,649 |
|
|
|
53,424 |
|
Amortization of intangibles |
|
|
72,877 |
|
|
|
73,023 |
|
Share-based compensation |
|
|
17,490 |
|
|
|
13,074 |
|
Purchase accounting adjustments |
|
|
— |
|
|
|
7,450 |
|
Income taxes related to the above |
|
|
(27,921 |
) |
|
|
(34,756 |
) |
Non-GAAP net income |
|
$ |
266,223 |
|
|
$ |
279,235 |
|
|
|
|
|
|
||||
Diluted EPS(1) |
|
$ |
1.93 |
|
|
$ |
1.75 |
|
Acquisition, integration and restructuring costs |
|
|
0.36 |
|
|
|
0.56 |
|
Amortization of intangibles |
|
|
0.81 |
|
|
|
0.76 |
|
Share-based compensation |
|
|
0.20 |
|
|
|
0.14 |
|
Purchase accounting adjustments |
|
|
— |
|
|
|
0.08 |
|
Income taxes related to the above |
|
|
(0.31 |
) |
|
|
(0.36 |
) |
Non-GAAP Diluted EPS(1) |
|
$ |
2.99 |
|
|
$ |
2.93 |
|
(1) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.9% and 0.8% of net income for the three months ended |
|
||||||||
Reconciliation of GAAP to Non-GAAP financial measures |
||||||||
(Amounts may not add or compute due to rounding) |
||||||||
|
|
|
||||||
|
|
Three Months Ended |
||||||
(Currency in thousands) |
|
|
|
|
||||
Free cash flow |
|
|
|
|
||||
Net cash provided by (used in) operating activities |
|
$ |
384,709 |
|
|
$ |
(102,795 |
) |
Purchases of property and equipment |
|
|
(41,088 |
) |
|
|
(37,278 |
) |
Free cash flow |
|
$ |
343,621 |
|
|
$ |
(140,073 |
) |
|
|
Forecast |
||||||
|
|
Three Months Ending |
||||||
(Currency in millions, except per share amounts) |
|
Low |
|
High |
||||
Net income |
|
$ |
139 |
|
|
$ |
183 |
|
Acquisition, integration and restructuring costs |
|
|
18 |
|
|
|
18 |
|
Amortization of intangibles |
|
|
75 |
|
|
|
75 |
|
Share-based compensation |
|
|
11 |
|
|
|
11 |
|
Income taxes related to the above |
|
|
(24 |
) |
|
|
(24 |
) |
Non-GAAP net income |
|
$ |
219 |
|
|
$ |
263 |
|
|
|
|
|
|
||||
Diluted EPS(1) |
|
$ |
1.59 |
|
|
$ |
2.09 |
|
Acquisition, integration and restructuring costs |
|
|
0.20 |
|
|
|
0.20 |
|
Amortization of intangibles |
|
|
0.86 |
|
|
|
0.86 |
|
Share-based compensation |
|
|
0.12 |
|
|
|
0.12 |
|
Income taxes related to the above |
|
|
(0.27 |
) |
|
|
(0.27 |
) |
Non-GAAP Diluted EPS(1) |
|
$ |
2.50 |
|
|
$ |
3.00 |
|
(1) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. Net income allocable to participating securities is estimated to be approximately 0.9% of the forecast net income for the three months ending |
|
|
Forecast |
||||
|
|
Three Months Ending |
||||
(Currency in billions) |
|
|
||||
Non-GAAP gross billings |
|
Low |
|
High |
||
Revenue |
|
$ |
13.3 |
|
$ |
14.9 |
Costs incurred and netted against revenue related to sales of third-party supplier service contracts, software as a service arrangements and certain fulfillment contracts |
|
|
5.1 |
|
|
4.7 |
Non-GAAP gross billings |
|
$ |
18.4 |
|
$ |
19.6 |
|
||||||||
Calculation of Financial Metrics |
||||||||
Return on |
||||||||
(Currency in thousands) |
||||||||
(Amounts may not add or compute due to rounding) |
||||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
ROIC |
|
|
|
|
||||
Operating income (trailing fiscal four quarters) |
|
$ |
1,082,442 |
|
|
$ |
1,126,595 |
|
Income taxes on operating income(1) |
|
|
(222,351 |
) |
|
|
(237,869 |
) |
Operating income after taxes |
|
$ |
860,091 |
|
|
$ |
888,726 |
|
|
|
|
|
|
||||
Total invested capital comprising equity and borrowings, less cash (last five quarters average) |
|
$ |
11,405,681 |
|
|
$ |
11,857,925 |
|
|
|
|
|
|
||||
ROIC |
|
|
7.5 |
% |
|
|
7.5 |
% |
|
|
|
|
|
||||
Adjusted ROIC |
|
|
|
|
||||
Non-GAAP operating income (trailing fiscal four quarters) |
|
$ |
1,624,021 |
|
|
$ |
1,735,073 |
|
Income taxes on non-GAAP operating income(1) |
|
|
(364,991 |
) |
|
|
(401,326 |
) |
Non-GAAP operating income after taxes |
|
$ |
1,259,030 |
|
|
$ |
1,333,747 |
|
|
|
|
|
|
||||
Total invested capital comprising equity and borrowings, less cash (last five quarters average) |
|
$ |
11,405,681 |
|
|
$ |
11,857,925 |
|
Tax effected impact of cumulative non-GAAP adjustments (last five quarters average) |
|
|
1,172,514 |
|
|
|
742,036 |
|
Total non-GAAP invested capital (last five quarters average) |
|
$ |
12,578,195 |
|
|
$ |
12,599,961 |
|
|
|
|
|
|
||||
Adjusted ROIC |
|
|
10.0 |
% |
|
|
10.6 |
% |
(1) Income taxes on GAAP operating income was calculated using the effective year-to-date tax rates during the respective periods. Income taxes on non-GAAP operating income was calculated by excluding the tax effect of taxable and deductible non-GAAP adjustments using the effective year-to-date tax rate during the respective periods. |
|
||||||||
Calculation of Financial Metrics |
||||||||
Cash Conversion Cycle |
||||||||
(Currency in thousands) |
||||||||
(Amounts may not add or compute due to rounding) |
||||||||
|
|
|
|
|
||||
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
|
|
||
Days sales outstanding |
|
|
|
|
|
|
||
Revenue |
|
(a) |
|
$ |
13,975,253 |
|
$ |
15,125,371 |
Accounts receivable, net |
|
(b) |
|
|
8,902,803 |
|
|
9,357,059 |
Days sales outstanding |
|
(c) = ((b)/(a))*the number of days during the period |
|
|
58 |
|
|
56 |
|
|
|
|
|
|
|
||
Days inventory outstanding |
|
|
|
|
|
|
||
Cost of revenue |
|
(d) |
|
$ |
12,969,487 |
|
$ |
14,121,804 |
Inventories |
|
(e) |
|
|
7,091,146 |
|
|
8,372,834 |
Days inventory outstanding |
|
(f) = ((e)/(d))*the number of days during the period |
|
|
50 |
|
|
53 |
|
|
|
|
|
|
|
||
Days payable outstanding |
|
|
|
|
|
|
||
Cost of revenue |
|
(g) |
|
$ |
12,969,487 |
|
$ |
14,121,804 |
Accounts payable |
|
(h) |
|
|
12,372,749 |
|
|
12,997,681 |
Days payable outstanding |
|
(i) = ((h)/(g))*the number of days during the period |
|
|
87 |
|
|
83 |
|
|
|
|
|
|
|
||
Cash conversion cycle |
|
(j) = (c)+(f)-(i) |
|
|
21 |
|
|
26 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240326922145/en/
Investor Relations
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