TD Synnex (NYSE: SNX) has reported its fiscal 2023 fourth quarter and full-year financial results, showcasing resilience in the face of a challenging market environment. The company's fiscal fourth quarter revenue came in at $14.4 billion, within the previously provided outlook of $14.0 - $15.0 billion, while non-GAAP gross billings reached $19.7 billion, at the high end of the outlook of $18.5 - $19.7 billion. The company's CEO, Rich Hume, expressed satisfaction with the performance, highlighting the company's ability to generate robust free cash flow and return value to shareholders.
Hume remarked, "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 are well-positioned to capitalize on the growth opportunities we expect in 2024, as the IT spending environment is anticipated to rebound."
The company's consolidated financial highlights for the fiscal 2023 fourth quarter revealed key metrics: - Revenue: $14.4 billion, representing a decrease of 11.3% compared to the prior fiscal fourth quarter - Non-GAAP gross billings: $19.7 billion - Gross margin: 7.07%, up 55 basis points from the prior fiscal fourth quarter - Net income: $188 million, and non-GAAP net income of $286 million - Diluted earnings per share (“EPS”): $2.06, and non-GAAP diluted EPS of $3.13, which exceeded the high end of the prior guidance range by $0.23 - Cash provided by operations: $1.4 billion, with free cash flow of $1.3 billion
Regionally, the Americas experienced a 16.8% decrease in revenue, while Europe saw a 3.0% decrease, and the Asia-Pacific and Japan region witnessed a 0.5% increase in revenue.
Looking ahead to the fiscal 2024 first quarter, TD Synnex provided the following outlook: - Revenue: $14.0 - $14.7 billion - Non-GAAP gross billings: $19.0 - $20.0 billion - Net income: $147 - $192 million, with non-GAAP net income of $232 - $277 million - Diluted earnings per share: $1.65 - $2.15, and non-GAAP diluted earnings per share of $2.60 - $3.10
Additionally, the company announced a 14% increase in its quarterly cash dividend to $0.40 per common share, payable on January 26, 2024.
The full 8-K submission by TD Synnex is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $20,054 | $19,070 | $19,977 | $31,614 | $62,344 | $59,396 |
| Revenue Growth | n/a | -4.91% | 4.76% | 58.25% | 97.2% | -4.73% |
| Operating Margins | 2% | 3% | 3% | 2% | 2% | 2% |
| Net Margins | 1% | 3% | 3% | 1% | 1% | 1% |
| Net Income (MM) | $300 | $501 | $529 | $395 | $651 | $661 |
| Net Interest Expense (MM) | -$46 | -$74 | -$79 | -$158 | -$223 | -$302 |
| Depreciation & Amort. (MM) | $225 | $372 | $342 | $152 | $463 | $422 |
| Earnings Per Share | $7.17 | $9.74 | $10.21 | $6.24 | $6.77 | $6.95 |
| EPS Growth | n/a | 35.84% | 4.83% | -38.88% | 8.49% | 2.66% |
| Diluted Shares (MM) | 41 | 51 | 51 | 63 | 96 | 93 |
| Free Cash Flow (MM) | -$25 | $412 | $1,808 | $770 | -$167 | $1,499 |
| Current Ratio | 1.45 | 1.62 | 1.56 | 1.25 | 1.25 | 1.23 |
| Total Debt (MM) | $3,456 | $3,017 | $1,622 | $4,136 | $4,104 | $4,079 |
| Net Debt / EBITDA | 4.76 | 3.22 | 0.24 | 4.06 | 2.37 | 1.83 |
TD SYNNEX has growing revenues and no capital expenditures, irregular cash flows, and healthy leverage. However, the firm has weak operating margins with a stable trend. Finally, we note that TD SYNNEX has flat EPS growth.
