Sep 24, 2026 earnings call — Record quarter, Hyve ramp and Distribution strength
TD SYNNEX reported record non-GAAP gross billings of $31.8 billion, increasing 40% year-over-year, driven by Distribution and Hyve strength.
Revenue $21.6B (est $18.9B) · EPS $5.68 (est $4.70)
Key quotes
"As enterprises evaluate next-generation platforms, we are seeing growing demand for partners that can simplify complexity and accelerate implementation through their enablement capabilities."
"Our previously announced programs with new customers have progressed as planned, with shipments expected to begin in our fiscal fourth quarter."
"Earlier this quarter, IBM expanded its relationship with TD SYNNEX into 20 additional countries across Europe, Asia-Pacific, and Latin America."
Analyst Q&A 10
Why Hyve margins improved
Q (Speaker 4 · JPMorgan): They asked what is driving the improved margin discipline at Hyve and whether that improvement is sustainable as competition for AI infrastructure grows.
A: David said Hyve is ramping three new hyperscalers with multiple programs and that the new programs are predominantly manufacturing and are neutral to accretive. He said as programs mature they find ways to improve margins and that gives confidence Hyve's margins have stabilized and should improve.
"As we look forward, one of the comments that we made is the new programs that we have won, which are predominantly manufacturing, are neutral to accretive to Hyve." — David Jordan (CFO)
Data center demand outlook
Q (Keith Housum · Northcoast): They asked how management sees the data center market over the next year or two and whether there is a risk of a spending pullback or constraints. They also asked if the Hyve business wins are cancelable.
A: Patrick said they remain overall positive about market prospects and expect to grow a little bit faster than the market, noting hyperscalers still support frontier models for training and enterprises are investing in agentic AI. David said programs are longer-term but can have cancellation rights; they can take about a year to ramp, can last a few years, and volumes can move around, yet Hyve is well positioned and the backlog shows no sign of concern.
"We continue to be overall positive about the market prospects, and we expect to continue to grow a little bit faster than the market." — Patrick Zammit (CEO)
Reasons for margin decline
Q (Ruplu Bhattacharya · BofA): They asked what mix changes caused the reported gross margin decline, and whether anything unique in Advanced Solutions or Americas Distribution drove the weakness.
A: David said in Distribution the mix impact was largely product related, with a few larger infrastructure build-outs in North America that have slightly lower gross margins. He also said Hyve ramped a large AI server program that is profitable but at margins slightly below the average Hyve margin, which caused the year-over-year decline for Hyve.
"When you look at the overall margins, if we just focus on Distribution for a second, the mix that we are referring to is largely product related." — David Jordan (CFO)
Advanced Solutions margin drivers
Q (Erik Woodring · Morgan Stanley): They asked to confirm whether Advanced Solutions margin pressure was just mix (large orders, AI infrastructure) and whether like-for-like margins were stable year over year.
A: David said margins are relatively stable on a like-for-like basis and the quarter impact was from a couple large transactions that tend to be slightly lower margin plus selling AI infrastructure, but all are profitable. Patrick added they review margins monthly by geography, technology, vendor and customer segment, take corrective measures, and see structural resilience in margins.
"When you look at the overall margins, if you really start to double-click them, they are relatively stable." — David Jordan (CFO)
Cash flow outlook into 2027
Q (David Vogt · UBS): He asked how to think about the company's cash flow needs as the business is much larger and as Hyve continues to grow, including how much cash they want on the balance sheet.
A: David said they expect to generate cash in Q4 and expect a couple of days improvement in gross cash days quarter-over-quarter, driven by momentum and Hyve programs ramping to become cash generative. He said FY 2026 was a hypergrowth year with front-loaded working capital investments, but they expect all businesses to be sustainable cash generators going forward; Patrick added mature Hyve programs generate free cash flow when they reach maturity.
"As you think about 2027 or more beyond, we expect all of our businesses to be sustainable cash generators." — David Jordan (CFO)
Hyve program mix and timing
Q (Katherine Murphy · Goldman Sachs): She asked for more detail on the mix of Hyve programs in the quarter, outlook for traditional server, networking and storage in new engagements, and timing for when legacy engagements may roll off.
A: Patrick said Q3 had a large GPU program and networking was very strong. He said new programs they have won are primarily networking at a good margin, they started to ramp this quarter, and they expect acceleration in Q4 and Q1.
"If you look at the quarter, Q3, we had this large GPU program, and networking continued to be very strong." — Patrick Zammit (CEO)
Amazon deal impact and manufacturing mix
Q (Guy Hardwick · Barclays): He asked whether the Amazon agreement affected revenues this quarter and if any portions were netted off revenue, and he asked to clarify whether manufacturing growth caused a negative mix effect.
A: David said they announced a seven-year warrant agreement with Amazon that they expect to be mutually beneficial but it is too soon to say exact specifics for the quarter. He said the AI server manufacturing program caused some year-over-year margin decline and many new programs are also manufacturing, which has been a headwind this year, but as new programs ramp many are neutral to accretive to Hyve.
"As you know, we announced a warrant agreement with Amazon, and what we shared at that time is we expect this to be mutually beneficial to both of us." — David Jordan (CFO)
PC refresh and demand
Q (David Paige · RBC): He asked about the PC refresh cycle, the demand environment, and what management sees going forward for PC demand.
A: Patrick said PC revenue grew double digit while units were down mid to high single digit as they forecasted, which was offset by price increases and mix. He said component price increases and a shift to mid- and higher-range PCs raised ASPs, the refresh is not over, and AI PCs now represent close to 50% of their PC revenue and may be important for running AI workloads.
"AI PCs continue to grow and represent now close to 50% of the total revenue for us." — Patrick Zammit (CEO)
Customer consolidation and share
Q (Vincent Colicchio · Barrington): He asked if customers are consolidating distribution relationships as technology becomes more complex and whether the company is gaining wallet share.
A: Patrick said they have grown faster than the market consistently for many quarters and attribute that to a specialist approach and a strong value-added proposition by technology that helps customers deliver complex outcomes. He also said vendors are rationalizing go-to-market and reducing resellers and distributors, and because of their value proposition and relationships they expect to continue to benefit from that trend.
"As you have noticed, we grew faster than market, and we've done that now consistently for many quarters." — Patrick Zammit (CEO)
Enterprise priorities and networking
Q (Alek Valero · Loop Capital): He asked what enterprise customers are prioritizing and where the company is best positioned, and then asked for color on networking growth and puts and takes.
A: Patrick said on compute there is a refresh to new generation servers with fewer units but significantly higher average value, and demand is rising for both general compute and AI compute across large and mid-size companies. He said storage modernization is accelerating because language models need well-shaped data and that drives storage investment and growth in units and value; on networking he said last year was challenging but now there is a massive refresh (Wi-Fi 7, switches for AI), unit growth and some price increases, making the category strong.
"Important aspect if you want to get the full benefit of your language models, you need to have the data in a good shape, and that means investing in storage." — Patrick Zammit (CEO)