TD Synnex Third-Quarter Earnings Boast Growth, Validate Merger

TD Synnex just released its third-quarter fiscal 2022 results. The company, formerly known as Synnex Corporation, changed its name after the acquisition of Tech Data Corp. back in September of 2021. Since this merger, TD Synnex has realized significant financial growth.

TD Synnex held a conference call with investors on Tuesday, the company’s third fiscal quarter 2022 financial analyst meeting. Hume stated that the year since TD Synnex was formed has validated the value proposition that led to the merger.

Financial Growth

For the fiscal third quarter, the company reported revenues between $14.5 billion and $15.5 billion. The Zacks Consensus Estimate for quarterly revenues comes in at $15.11 billion. This indicates a tremendous 190.2% jump from the prior-year period.

TD Synnex’s Rich Hume

“The strength of our combined organization was evident in fiscal Q3, as our teams once again demonstrated solid execution, with revenue growth and increased profitability in an uncertain macroeconomic environment,” said Rich Hume, CEO of TD Synnex. “During our first year together as TD Synnex, we made significant progress on our merger integration, exceeding our targets for non-GAAP EPS accretion and cost synergy attainment. The rationale for our merger is even stronger today than one year ago, and we believe that we are well-positioned to continue raising the bar on the value we bring to our customers, vendors, and shareholders.”

Contributing Factors

According to Yahoo! Finance, the jump in demand for hardware and tools, which support hybrid working, is guessed to have boosted TD Synnex’s revenues during the quarter. This burgeoning hybrid working trend has been driving the sales of software, communication, networking, consumer electronic products, etc. Such demand likely contributed to TD Synnex’s top line in the fiscal third quarter.

This trend, along with the upped usage of online and e-commerce services, has been fanning the need/demand for cloud storage and services. As a result, data center operators are leaning in, bolstering their capacities to accommodate the demand spike. Because of this, TD Synnex’s data center servers and storage solution businesses nudged up in the fiscal third quarter.

The newly merged Tech Data Corporation business also likely had an impact on TD Synnex’s third-quarter performance. Rapid digital transformation has led to an upward tick on IT spend, also likely boosting the company’s top line. This is seemingly despite potentially diminishing aspects, such as supply chain and foreign exchange issues.

TD Synnex has also gone ahead and released its current expectations for the fiscal 2022 fourth quarter. 

“Non-GAAP financial measures exclude the impact of acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation, purchase accounting adjustments, and the related tax effects thereon. These statements are forward-looking and actual results may differ materially,” stated the company.

Fourth Quarter Fiscal 2022 Outlook