Td Synnex Corporation · NYSE:SNX
Td Synnex — Q2 2024 Earnings Presentation
41 slides from Td Synnex's earnings presentation, Jun 25, 2024
Slide 1: Investor Presentation June 2024
Investor Presentation June 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: FQ2'2024 snapshot
FQ2’2024 snapshot Return to y/y non-GAAP gross billings(1) growth, continued margin expansion and accelerated capital returns $19.3B 6.98% 2.78% N O N - G A A P G R O S S B I L L I N G S (1) N O N - G A A P G R O S S M A R G I N (1) N O N - G A A P O P E R A T I N G M A R G I N (1) +3% y/y + 9 bps y
Slide 4: Benefited from improving IT spending environment and end-to-end technology portfolio
FQ2’2024 Benefited from improving IT spending environment and end-to-end technology portfolio Q2 FY24 B/(W) vs PY Key takeaways Revenue ($B) $13.9 (1)% / (1)%(2) Non-GAAP gross billings(1) above the mid point of the outlook range, with y/y growth across Endpoint Solutions, Non-GAAP gross billings ($
Slide 5: FQ3'2024 outlook
FQ3’2024 outlook Q3 FY24E Revenue ($B) $13.3 – $14.9 Non-GAAP gross billings ($B)(1) $18.9 – $20.1 Net income (M) $152 – $194 Non-GAAP net income (M)(1) $219 – $261 Diluted EPS $1.77 – $2.27 Non-GAAP diluted EPS(1) $2.55 – $3.05 Estimated outstanding diluted weighted avg. shares (M) 85.0 Interest ex
Slide 6: Technology and product solutions
Technology and product solutions Strategic technologies Endpoint solutions CLOUD (ES) SECURITY Advanced solutions (AS) HYPERSCALE CLOUD SERVERS NETWORKING STORAGE SOFTWARE OTHER INFRASTRUCTURE D ATA / A I / I O T HYPERSCALE INFRASTRUCTURE 6
Slide 7: Results by technology category
FQ2’2024 Results by technology category(2) Key takeaways Revenue Non-GAAP Gross profit gross billings(1) ES saw low single digit growth in Mobile, Print and PCs, offset by softness in demand for $7.8B non-GAAP $341M Peripherals and some Endpoint $6.7B revenue gross billings(1) 5% gross margin compon
Slide 8: Balanced end-to-end portfolio
Services 6% Networking Balanced end-to- 16% end portfolio Software Mobile 19% 5% Approximate % of total non-GAAP gross billings(1) by product category(2) for FQ2’2024 Peripherals 7% PCs Servers and Storage 17% 21% Other 9% (1) Non-GAAP measure. See the appendix to this presentation for definitions o
Slide 9: Well-positioned to leverage growing AI market
Well-positioned to leverage growing AI market Creating industry-leading aggregated AI solutions for the channel Strong vendor partnerships Launched IBM® watsonx™ Gold 100 Program to accelerate AI opportunities for partners, including enablement and training resources, business planning, marketing, d
Slide 10: Delivering on our plan
Delivering on our plan Expanding our presence in strategic technologies and delivering strong returns to shareholders Cash flow + Continued strategic technologies execution capital allocation Strategic technologies as a percentage of non-GAAP gross Cash returned to shareholders(2) billings(3) $523M
Slide 11: 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 7% CAGR 14% CAGR $3,900 $3,957 $3,969 $3,649 $1,724 $3,414 $1,642 $1,636 $11.94 $11.63 $1,480 $11.26 $1,294 $9.40 $7.38 FY 2020 FY 2021 FY 2022 FY 2023 Q2 FY FY 2020 FY 2021 FY
Slide 12: Strong investment grade balance sheet
Strong investment grade balance sheet Capital structure provides ample liquidity and flexibility Significant liquidity Long dated, well-laddered capital structure ($M) May 2024 Cash $1,174M Unsecured revolver $3,500M A/R securitization $1,500M Total liquidity $6,174M Investment grade balance sheet –
Slide 13: Significant FCF potential with a focus on shareholder returns
Significant FCF potential with a focus on shareholder returns Medium-term target capital allocation Return excess free cash flow after dividends and M&A through repurchases Supplement organic growth with strategic investments and M&A Repurchased $254M in stock in Q2 and have ~$1.9B share repurchase
Slide 14: Why own TD SYNNEX?
Why own TD SYNNEX? Attractive core business Significant cash flow capitalizing on strategic Target shareholder engine creates technologies return of 15-20% financial flexibility Industry leader levered to Strong investment grade Target TSR of 15-20% secular IT spending growth and megatrends balance
Slide 15: A differentiated investment
A differentiated Leading global IT Central role in IT ecosystem solutions distributor with investment significant breadth and depth of capabilities positions us well for future models of consumption opportunity… Attractive cash-generative Portfolio squarely aligned business model supported by with t
Slide 16: Appendix
Appendix
Slide 17: TD SYNNEX
TD SYNNEX Connecting the global IT system G L O B A L I T P L AT F O R M S SPECIALIZED SKILLS 17
Slide 18: Well positioned to benefit from industry evolution
Well positioned to benefit from industry evolution Linear Model Solutions Aggregation Ecosystem Orchestration OEM TD SYNNEX Reseller End User Inventory financing Reduces solution building cost for resellers Expands ecosystem addressable market Logistics management Accelerated time to market As a ser
Slide 19: Attractive business model with variable cost structure and limited capital intensity
Attractive business model with variable cost structure and limited capital intensity Illustrative Business Model Highly Variable Cost Structure TTM Adj. EBITDA less Capex ($M)(1) OEM 91% conversion ~2% Back- $960 $20 end Margin $1,747 $(161) $1,586 Opex <5% COGS ~4% Front- ~65% ~35% >95% 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 23 Dot com bubble Global financial crisis COVID-19 pandemic 53 65 59 54 49 50 0 (75) (84) (91) (86) 2000 2001 2002 2003 2008 2009 2010 2020 2021 2022 2023 2022 2023 Q2
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 Revenue in constant currency May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 May 31, 202
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 Non-GAAP gross billings in constant currency May 31, 2024 May 31, 2023 May 31, 2024 May 31,
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 May 31, 2024 May 31, 2023 Revenue $ 13,947,908 $ 14,062,124 Gross profit $ 973,547 $ 963,410 Pur
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 Non-GAAP operating income and non-GAAP operating margin May 31, 2024 May 31, 2023 Revenue $ 13,947,908 $ 14,062,124 Operating income $ 263,948 $
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 Six Months Ended Free cash flow May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Net cash (used in) provided by operating activities $ (114,7
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 Non-GAAP income before income taxes, non-GAAP provision for income taxes and non-GAAP effective tax rate May 31, 2024 Income before income taxes
Slide 29: 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) May 31, 2024 February 29, 2024 November 30, 2023 August 31, 2023 Diluted EPS(1) $ 1.66 $ 1.93 $ 2.06 $ 1.49 Acquisition, int
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) 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 31: Calculation of financial metrics
Calculation of financial metrics TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) ROIC May 31, 2024 Operating income (trailing fiscal four quarters) $ 1,093,507 Income taxes on operating income(1) (220,648) Operating income after taxes $ 872,859 Total invested capit
Slide 32: 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 August 31, 2024 Net income and diluted EPS(1) Low High Net income $ 152 $ 194 Amortization of intangibles 75
Slide 33: 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 August 31, 2024 Non-GAAP gross billings Low High Revenue $ 13.3 $ 14.9 Costs incurred and netted against revenue related to sales of th
Slide 34: Calculation of financial metrics
Calculation of financial metrics TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Leverage ratio May 31, 2024 February 29, 2024 November 30, 2023 August 31, 2023 Total borrowings (a) $ 4,595,698 $ 4,009,106 $ 4,082,778 $ 4,079,182 Less: cash and cash equivalents (b)
Slide 35: TD SYNNEX results
TD SYNNEX results TD SYNNEX (Currency in millions) (Amounts may not add or compute due to rounding) Three Months Ended May 31, February 29, November 30, August 31, May 31, February 28, November 30, 2024 2024 2023 2023 2023 2023 2022 Revenue $ 13,947.9 $ 13,975.3 $ 14,407.3 $ 13,960.6 $ 14,062.1 $ 15
Slide 36: 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 37: 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 38: 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 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) Trailing Twelve Months for Periods Ended November 30, November 30, November 30, November 30, 2023 2022 2021 2020 Reven
Slide 40: 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 May 31, Adjusted EBITDA less Capex 2024 Operating income $ 1,093.5 Adjustments Acquisition, integration and restructuring e
Slide 41: Thank you
THANK YOU Liz Morali Investor Relations TD SYNNEX Corporation 510-668-8436 IR@tdsynnex.com IR website: ir.tdsynnex.com