Td Synnex Corporation · NYSE:SNX
Td Synnex — Q3 2024 Earnings Presentation
42 slides from Td Synnex's earnings presentation, Sep 26, 2024
Slide 1: Investor Presentation September 2024
Investor Presentation September 2024
Slide 2: Safe harbor statement
Safe harbor statement Statements in this presentation regarding TD SYNNEX that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward- looking statements are inhere
Slide 3: FQ3'2024 snapshot
FQ3’2024 snapshot Continued y/y non-GAAP gross billings(1) growth, solid EPS growth, and robust free cash flow (1) $20.3B N ON-GA AP GR OSS B I L L I NG S ( 1 ) 2.68% $2.86 N O N - G A A P O P E RA T I N G M A R G I N N O N - G A A P D I L UT E D E P S ( 1 ) + 9% y / y ( 1) ( 1 6 ) b p s y / y +3% y
Slide 4: Benefited from improving IT spending environment and end-to-end technology portfolio
FQ3’2024 Benefited from improving IT spending environment and end-to-end technology portfolio Key takeaways Q3 FY24 B/(W) vs PY GAAP Revenue ($B) $14.7 5% / 6%(2) Non-GAAP gross billings(1) grew 9% driven by significant growth across Endpoint Solutions, Advanced Operating Income ($M) $303 26% Soluti
Slide 5: FQ4'2024 outlook
FQ4’2024 outlook Q4 FY24E GAAP Non-GAAP (1) Gross billings ($B) $20.5 – $21.5 (2) Gross to net % (27.2)% (2) Revenue ($B) $14.9 – $15.7 $14.9 – $15.7 Net income ($M) $162 – $205 $239 – $282 (2) Estimated outstanding diluted weighted avg. 84.5 84.5 shares (M) Diluted earnings per share $1.90 – $2.40
Slide 6: Technology and product solutions
Technology and product solutions Technology and product solutions Strategic technologies CLOUD Endpoint solutions (ES) S E C U RI T Y Advanced D A T A /A I/ I O T solutions (AS) HYPERSCALE I N F R A S T RU C T U R E C L OU D SERVERS N E T W O RK I NG ST OR AGE S O F T W A RE OT H ER HYPERSCALE I NF
Slide 7: Results by technology category
FQ3’2024 Results by technology category(2) Key takeaways Revenue Non-GAAP Gross profit gross billings(1) Endpoint Solutions non-GAAP gross billings(1) grew by 5% driven by $8.1B non-GAAP growth in PCs, Components, Mobile Endpoint $6.9B revenue $330M and Services gross billings(1) 5% gross margin sol
Slide 8: Balanced end-to-end portfolio
Services 7% Networking Balanced end-to- 19% end portfolio Software Mobile 19% 4% Approximate % of total non-GAAP gross billings(1) by product category(2) for FQ3’2024 Peripherals 10% PCs Servers and Storage 17% 19% Other 5% (1) Non-GAAP measure. See the appendix to this presentation for definitions
Slide 9: Delivering on our plan
Delivering on our plan Expanding our presence in strategic technologies and delivering strong returns to stockholders Cash flow + Continued strategic technologies execution capital allocation Strategic technologies as a percentage of non-GAAP gross Cash returned to stockholders(2) billings(3) Contin
Slide 10: Attractive long term growth in profitability
Attractive long term growth in profitability Gross profit(1) Non-GAAP operating income(1,2) Non-GAAP diluted EPS(2) 4% CAGR 6% CAGR 13% CAGR (1) Figures are on a combined basis assuming the merger occurred at the beginning of the period (2) Non-GAAP measure. See the appendix to this presentation for
Slide 11: Strong investment grade balance sheet
Strong investment grade balance sheet Capital structure provides ample liquidity and flexibility Significant liquidity Long dated, well-laddered capital structure ($M) Aug 2024 Cash $854M Unsecured revolver $3,500M A/R securitization $1,469M Total liquidity $5,823M Investment grade balance sheet – F
Slide 12: Significant FCF potential with a focus on stockholder returns
Significant FCF potential with a focus on stockholder returns Medium-term target capital allocation Return excess free cash flow after Target 2x gross leverage ratio dividends and M&A through repurchases As of August 2024, 2.3x Gross Leverage 1.8x Net Leverage Optimize cost of capital and target adj
Slide 13: Why own TD SYNNEX?
Why own TD SYNNEX? Attractive core business Significant cash flow capitalizing on strategic Target stockholder engine creates technologies return of 15-20% financial flexibility Industry leader levered to Strong investment grade Target TSR of 15-20% secular IT spending growth and megatrends balance
Slide 14: A differentiated investment opportunity
A differentiated Leading global IT investment solutions distributor with significant breadth and Central role in IT ecosystem positions us well for future opportunity… depth of capabilities models of consumption Attractive cash-generative Portfolio squarely aligned business model supported by with t
Slide 15: Best line card in the industry to take advantage of AI growth
Best line card in the industry to take advantage of AI growth Enabled via first to market Destination AI channel program AI-Enabled Independent Software Vendors (ISVs) AI AI Accelerators Accelerators Core AI Core AI Software/Platforms Software/Platforms AI Infrastructure 15
Slide 16: Appendix
Appendix
Slide 17: TD SYNNEX
TD SYNNEX Connecting the global IT system G L O B A L I T P L AT F O R M S S PE C IA LIZE D SK ILLS 17
Slide 18: Well positioned to benefit from industry evolution
Well positioned to benefit from industry evolution Linear Model Solutions Aggregation Ecosystem Orchestration OEM TD SYNNEX Reseller End User Inventory financing Reduces solution building cost for resellers Expands ecosystem addressable market Logistics management Accelerated time to market As a ser
Slide 19: Attractive business model with variable cost structure and limited capital intensity
Attractive business model with variable cost structure and limited capital intensity Illustrative Business Model Highly Variable Cost Structure TTM Adj. EBITDA less Capex ($M)(1) 90% conversion OEM ~2% Back- $960 $20 end Margin $1,742 $(169) $1,573 Opex <5% COGS ~4% Front- >95% ~65% ~35% end Margin
Slide 20: Stable cash conversion cycle with countercyclical benefits
Stable cash conversion cycle with countercyclical benefits Steady cash conversion cycle (days) Countercyclical cash generation 23 23 21 Dot com bubble Global financial crisis COVID-19 pandemic 0 (75) 200 0 200 1 200 2 200 3 200 8 200 9 201 0 202 0 202 1 202 2 202 3 2022 2023 Q3 FY24 DSO DIO DPO Duri
Slide 21: ESG highlights
ESG highlights Environmental Social Governance Commitment to Science-Based Target initiative Company: Seeking to increase our gender diversity Strong corporate governance based on our values (SBTi) Business Ambition Pledge with net zero with 50% of our workforce and 40% of leadership of Inclusion, C
Slide 22: Non-GAAP financial measures
Non-GAAP financial measures In addition to the financial results presented in accordance with GAAP, TD SYNNEX refers to revenues on a constant currency basis which adjusts for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuati
Slide 23: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Consolidated Americas Europe Asia-Pacific and Japan August 31, August 31, August 31, August 31, August 31, August 31, August 31, August 31, Reve
Slide 24: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Consolidated Americas Europe Asia-Pacific and Japan August 31, August 31, August 31, August 31, August 31, August 31, August 31, August 31, Non-
Slide 25: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Non-GAAP gross profit and non-GAAP gross margin August 31, 2024 August 31, 2023 Revenue $ 14,684,712 $ 13,960,615 Costs incurred and netted agai
Slide 26: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Adjusted selling, general and administrative expenses August 31, 2024 August 31, 2023 Gross profit $ 961,048 $ 971,273 Selling, general and admi
Slide 27: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Non-GAAP operating income and non-GAAP operating margin August 31, 2024 August 31, 2023 Revenue $ 14,684,712 $ 13,960,615 Costs incurred and net
Slide 28: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Nine Months Ended Free cash flow August 31, 2024 August 31, 2023 August 31, 2024 August 31, 2023 Net cash provided by operating activities $ 385
Slide 29: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Non-GAAP income before income taxes, non-GAAP provision for income taxes and non-GAAP effective tax rate August 31, 2024 Income before income ta
Slide 30: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Per share amounts) (Amounts may not add or compute due to rounding) Three Months Ended Non-GAAP diluted EPS (1) August 31, 2024 May 31, 2024 February 29, 2024 November 30, 2023 Diluted EPS(1) $ 2.08 $ 1.66 $ 1.93 $ 2.06 Acquisition, in
Slide 31: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures TD SYNNEX (Per share amounts) (Amounts may not add or compute due to rounding) Fiscal Years Ended November 30, November 30, November 30, November 30, 2023 2022 2021 2020 Non-GAAP diluted EPS (1) Diluted EPS $ 6.70 $ 6.77 $ 6.24 $ 6.46 Acquisition
Slide 32: Calculation of financial metrics
Calculation of financial metrics TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) ROIC August 31, 2024 Operating income (trailing fiscal four quarters) $ 1,156,153 Income taxes on operating income (1) (234,970) Operating income after taxes $ 921,183 Total invested c
Slide 33: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in millions, except per share amounts) (Amounts may not add or compute due to rounding) Forecast Three Months Ending November 30, 2024 Net income and diluted EPS(1) Low High Net income $ 162 $ 205 Amortization of intangibles 7
Slide 34: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in billions) (Amounts may not add or compute due to rounding) Forecast Three Months Ending November 30, 2024 Non-GAAP gross billings Low High Revenue $ 14.9 $ 15.7 Costs incurred and netted against revenue related to sales of
Slide 35: Calculation of financial metrics
Calculation of financial metrics TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Leverage ratio August 31, 2024 May 31, 2024 February 29, 2024 November 30, 2023 Total borrowings (a) $ 4,050,202 $ 4,595,698 $ 4,009,106 $ 4,082,778 Less: cash and cash equivalents (b)
Slide 36: TD SYNNEX results
TD SYNNEX results TD SYNNEX (Currency in millions) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 29, November 30, August 31, May 31, February 28, November 30, 2024 2024 2024 2023 2023 2023 2023 2021 Revenue $ 14,684.7 $ 13,947.9 $ 13,975.3 $ 14,407.3
Slide 37: Legacy SYNNEX results
Legacy SYNNEX results SYNNEX CORPORATION (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, August 31, May 31, February 29, 2021 2021 2021 2020 2020 2020 2020 Revenue $ 5,207.1 $ 5,856.8 $ 4,939.0 $ 6,11
Slide 38: Legacy Tech Data results
Legacy Tech Data results TIGER PARENT (AP) CORPORATION AND SUBSIDIARIES (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, August 31, May 31, February 29, 2021 2021 2021 2020 2020 2020 2020 Revenue $ 9,1
Slide 39: Combined legacy SYNNEX and legacy Tech Data results
Combined legacy SYNNEX and legacy Tech Data results Combined (Legacy SYNNEX and Legacy Tech Data) (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, August 31, May 31, February 29, 2021 2021 2021 2020 20
Slide 40: Combined legacy SYNNEX and legacy Tech Data results
Combined legacy SYNNEX and legacy Tech Data results Combined (Legacy SYNNEX and Legacy Tech Data) (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Trailing Twelve Months for Periods Ended November 30, November 30, November 30, November 30, 2023 2022 2021 2020 Reven
Slide 41: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in millions) (Amounts may not add or compute due to rounding) Trailing Twelve Months for Periods Ended August 31, Adjusted EBITDA less Capex 2024 Operating income $ 1,156.2 Adjustments Acquisition, integration and restructurin
Slide 42: Thank you
THANK YOU David Jordan TD SYNNEX Corporation 510-668-8436 david.jordan@tdsynnex.com IR website: ir.tdsynnex.com