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TD SYNNEX (NYSE: SNX) reported a revenue of $14.5 billion for the first quarter of fiscal 2025, marking a 4% increase from the same period last year. On a constant currency basis, revenue rose by 6%, driven by growth in both the Endpoint Solutions and Advanced Solutions portfolios. The company achieved non-GAAP gross billings of $20.7 billion, a 7.5% increase from the previous year, reaching the upper end of their forecast.
This growth was supported by contributions from all regions and major technologies. The gross profit for the quarter stood at $998 million, a slight decrease from $1,006 million in the previous year. The gross margin was 6.9%, down from 7.2% last year, primarily due to higher margins in strategic technologies in the prior year and changes in product mix. Operating income was reported at $305 million, reflecting a modest increase from $303 million in the prior year. The operating margin was 2.1%, compared to 2.2% in the previous year. The company’s diluted earnings per share (EPS) for the quarter was $1.98, a 2.6% increase from $1.93 in the previous year.
However, the non-GAAP diluted EPS was $2.80, down from $2.99 in the prior year. The company returned $138 million to stockholders through share repurchases and dividends, and announced a quarterly cash dividend of $0.44 per share, a 10% increase from the previous year.
TD SYNNEX’s First Quarter FY’25 Results Fall Short of Expectations
TD SYNNEX’s performance in the first quarter of fiscal 2025 fell short of market expectations. Analysts had anticipated an EPS of $2.91 and revenue of $14.79 billion. The actual EPS of $1.98 and revenue of $14.5 billion were below these expectations. The non-GAAP diluted EPS also missed the expected mark, coming in at $2.80 compared to the anticipated $2.91.
Despite the shortfall in EPS, revenue growth was supported by a 6% constant currency increase, driven by the company’s strategic focus on its Endpoint Solutions and Advanced Solutions portfolios. However, the presentation of a greater percentage of sales on a net basis negatively impacted revenue by approximately 4%, contributing to the shortfall against expectations.
The gross margin decline from 7.2% to 6.9% was another factor that contributed to the variance from expectations. The decline was attributed to higher margins in strategic technologies in the prior year and changes in product mix. Operating income showed a slight increase, but the operating margin decreased from 2.2% to 2.1%, reflecting the challenges in maintaining profitability amidst changing market conditions.
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Guidance for Q2 Fiscal 2025
Looking ahead, TD SYNNEX has provided guidance for the second quarter of fiscal 2025. The company expects revenue to be in the range of $13.9 billion to $14.7 billion. Non-GAAP gross billings are projected to be between $19.7 billion and $20.7 billion. The expected net income is forecasted to range from $137 million to $179 million, with non-GAAP net income projected between $205 million and $247 million.
The company anticipates diluted EPS for the second quarter to be between $1.64 and $2.14, while non-GAAP diluted EPS is expected to range from $2.45 to $2.95. The guidance reflects the company’s cautious optimism amidst ongoing market uncertainties and the impact of foreign currency fluctuations. TD SYNNEX continues to focus on its strategic initiatives to drive growth and improve operational efficiency.
The company also announced a quarterly cash dividend of $0.44 per share, payable on April 25, 2025, to stockholders of record as of April 11, 2025. This reflects TD SYNNEX’s commitment to returning value to shareholders while maintaining a strong financial position to support future growth initiatives.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
