TD Synnex Corp (SNX) Reports Fiscal 2023 Fourth Quarter and Full Year Results
Revenue: Fiscal Q4 revenue of $14.4 billion, a decrease of 11.3% year-over-year.
Non-GAAP Gross Billings: Reached $19.7 billion, at the high end of the outlook.
Gross Margin: Improved to 7.07%, up 55 basis points from the prior fiscal fourth quarter.
Net Income: Fiscal Q4 net income of $188 million, with non-GAAP net income of $286 million.
Diluted EPS: Reported at $2.06, with non-GAAP diluted EPS of $3.13.
Free Cash Flow: Exceeded expectations with $1.3 billion for fiscal 2023.
Shareholder Returns: $751 million returned to shareholders in fiscal 2023, up 213% from the prior year.
On January 9, 2024, TD Synnex Corp (NYSE:SNX), a leading global distributor and solutions aggregator for the IT ecosystem, announced its financial results for the fiscal fourth quarter and full year ended November 30, 2023. The company, which operates in high-growth technology segments such as cloud, cybersecurity, and big data/analytics, released its 8-K filing detailing its performance amidst a challenging market environment.
Fiscal 2023 Fourth Quarter and Full Year Financial Performance
TD Synnex Corp (NYSE:SNX) reported a fiscal fourth quarter revenue of $14.4 billion, a decrease of 11.3% compared to the same quarter in the previous year. The decline was primarily attributed to a reduction in demand for PC ecosystem products within the Endpoint Solutions portfolio. Despite the revenue downturn, the company achieved a gross margin of 7.07%, marking an increase of 55 basis points year-over-year, and a non-GAAP gross margin of the same percentage, up 44 basis points from the prior fiscal fourth quarter.
The company's net income for the quarter stood at $188 million, with non-GAAP net income reaching $286 million, surpassing the high end of the prior guidance range. Diluted earnings per share (EPS) were reported at $2.06, with non-GAAP diluted EPS at $3.13, exceeding the high end of the prior guidance range by $0.23.
For the full fiscal year 2023, TD Synnex Corp (NYSE:SNX) generated a revenue of $57.6 billion, representing a 7.7% decrease from the previous fiscal year. The company's gross profit increased slightly to $4.0 billion, with a gross margin improvement to 6.9%. Operating income for the year was $1,078 million, and the company achieved a non-GAAP operating income of $1.6 billion.
TD Synnex Corp (NYSE:SNX) demonstrated strong cash flow management, with cash provided by operations amounting to $1.4 billion and free cash flow exceeding the outlook at $1.3 billion. The company also significantly increased its return to shareholders, repurchasing shares and paying dividends totaling $751 million, a 213% increase from the prior year.
Challenges and Outlook
Despite the robust free cash flow and improved gross margins, the company faced challenges including a decline in demand for PC ecosystem products and the impact of foreign currency exchange rates. The company's revenue was also affected by the presentation of a greater percentage of revenue on a net basis due to changes in product mix.
Looking ahead, TD Synnex Corp (NYSE:SNX) provided an outlook for the fiscal 2024 first quarter, expecting revenue between $14.0 and $14.7 billion, and non-GAAP diluted earnings per share in the range of $2.60 to $3.10. The company's Board of Directors declared a quarterly cash dividend of $0.40 per common share, a 14% increase compared to the prior quarter.
CEO Rich Hume commented on the results, stating,
Excellent broad-based execution by our team, coupled with continued progress on our margin-accretive strategic initiatives enabled a strong close to the fiscal year. We successfully navigated a challenging market environment in fiscal year 2023, generating robust free cash flow of $1.3 billion and returning $751 million to shareholders. We are well-positioned to capitalize on the growth opportunities we expect in 2024, as the IT spending environment is anticipated to rebound."
TD Synnex Corp (NYSE:SNX) remains committed to maximizing the value of technology investments for its customers and is poised to leverage growth opportunities in the coming fiscal year.
Explore the complete 8-K earnings release (here) from TD Synnex Corp for further details.
This article first appeared on GuruFocus.
