TD SYNNEX Reports Fiscal 2022 Full Year and Fourth Quarter Results

FREMONT, Calif. & CLEARWATER, Fla.–(BUSINESS WIRE)–TD SYNNEX today announced financial results for the fiscal fourth quarter and fiscal year ended November 30, 2022.

“In fiscal year 2022 we harnessed our collective talent and solidified TD SYNNEX as the distribution partner of choice,” said Rich Hume, CEO of TD SYNNEX. “Through the focused efforts of our co-workers, the business has continued to perform well, and we significantly progressed our core and high-growth expansion strategy and exceeded our ambitious financial goals for both the quarter and the year, despite increased headwinds from foreign currency and higher interest rates. We are well-equipped to navigate the macroeconomic environment in 2023 and expect to continue to perform better than the overall IT industry.”

Fiscal 2022 Fourth Quarter Highlights

  • Revenue was $16.2 billion, up 4.1% from the prior fiscal fourth quarter. On a constant currency basis, revenues increased by 10.5%. Revenue growth was driven by strong demand in all three regions, primarily due to growth in our Advanced Solutions portfolio and high-growth technologies.
    • Americas: Revenues were $10.0 billion, an increase of 7.8% compared to the prior fiscal fourth quarter. On a constant currency basis, revenues increased 8.8%.
    • Europe: Revenues were $5.4 billion, a decrease of 2.5% compared to the prior fiscal fourth quarter. On a constant currency basis, revenues increased 12.6%.
    • Asia-Pacific and Japan: Revenues were $0.8 billion, an increase of 5.9% compared to the prior fiscal fourth quarter. On a constant currency basis, revenues increased 16.5%.
  • Operating income was $334 million, compared to $185 million in the prior fiscal fourth quarter. Non-GAAP operating income was $496 million in the current quarter compared to $408 million in the prior fiscal fourth quarter. Operating margin was 2.1%, compared to 1.2% in the prior fiscal fourth quarter. Non-GAAP operating margin was 3.1% in the current quarter, compared to 2.6% in the prior fiscal fourth quarter. Across all regions, operating margin expansion was driven by mix shift to high-growth technologies, cost discipline and merger synergy execution.
    • Americas: Operating income was $222 million, compared to $125 million in the prior fiscal fourth quarter. Non-GAAP operating income was $324 million in the current quarter compared to $270 million in the prior fiscal fourth quarter. Operating margin was 2.2%, compared to 1.3% in the prior fiscal fourth quarter. Non-GAAP operating margin was 3.2% in the current quarter, compared to 2.9% in the prior fiscal fourth quarter.
    • Europe: Operating income was $77 million, compared to $45 million in the prior fiscal fourth quarter. Non-GAAP operating income was $135 million in the current quarter compared to $117 million in the prior fiscal fourth quarter. Operating margin was 1.4%, compared to 0.8% in the prior fiscal fourth quarter. Non-GAAP operating margin was 2.5% in the current quarter, compared to 2.1% in the prior fiscal fourth quarter.
    • Asia-Pacific and Japan: Operating income was $35 million, compared to $15 million in the prior fiscal fourth quarter. Non-GAAP operating income was $37 million in the current quarter compared to $20 million in the prior fiscal fourth quarter. Operating margin was 4.2%, compared to 2.0% in the prior fiscal fourth quarter. Non-GAAP operating margin was 4.5% in the current quarter, compared to 2.6% in the prior fiscal fourth quarter.
  • Diluted EPS was $2.31, compared to $1.24 in the prior fiscal fourth quarter, an increase of 86.3%. Non-GAAP diluted EPS was $3.44, compared to $2.86 in the prior fiscal fourth quarter, an increase of 20.3% and $0.34 above the high end of our prior guidance range.
  • Cash provided by operations was $302 million for the quarter.
  • Returned $71 million to shareholders via repurchases of our common stock of $42 million and dividends of $29 million.

Consolidated Financial Highlights Fiscal 2022:

FY22

FY21

Net Change from FY21

Revenue ($M)

$

62,343.8

$

31,614.2

97.2

%

Operating income ($M)

$

1,050.9

$

623.2

68.6

%

Non-GAAP operating income ($M)(1)

$

1,724.0

$

902.1

91.1

%

Operating margin

1.69

%

1.97

%

(28) bps

Non-GAAP operating margin(1)

2.77

%

2.85

%

(8) bps

Net income ($M)

$

651.3

$

395.1

64.9

%

Non-GAAP net income ($M)(1)

$

1,147.9

$

595.7

92.7

%

Diluted EPS

$

6.77

$

6.24

8.5

%

Non-GAAP Diluted EPS(1)

$

11.94

$

9.40

27.0

%

Fiscal 2022 Highlights

  • Revenue was $62.3 billion, up 97.2% from the prior fiscal year, primarily due to the impact of the completion of the merger with Tech Data on September 1, 2021.
  • Operating income was $1.05 billion, compared to $623 million in the prior fiscal year. Non-GAAP operating income was $1.72 billion in the current year compared to $902 million in the prior fiscal year. Operating margin was 1.7%, compared to 2.0% in the prior fiscal year. Non-GAAP operating margin was 2.8% in the current year, compared to 2.9% in the prior fiscal year.
  • Diluted EPS was $6.77, compared to $6.24 in the prior fiscal year, an increase of 8.5%. Non-GAAP Diluted EPS was $11.94, compared to $9.40 in the prior fiscal year, an increase of 27%. Non-GAAP EPS for the fiscal year was $0.74 above the high end of our original guidance range provided in January 2022 and $0.29 above the high end of the most recent guidance range provided in September 2022, despite headwinds from interest expense and Euro devaluation.
  • Cash used in operations was $50 million for the year, due to temporary supply chain constraints as well as inventory investments to support growth in the business that we expect to begin to normalize in fiscal 2023.
  • Returned $240 million to shareholders via repurchases of our common stock of $125 million and dividends of $115 million.

The following statements are based on TD SYNNEX’s current expectations for the fiscal 2023 first quarter. Non-GAAP financial measures exclude the impact of acquisition, integration and restructuring costs, amortization of intangible assets, share-based compensation, purchase accounting adjustments, and the related tax effects thereon. These statements are forward-looking and actual results may differ materially.

First Quarter Fiscal 2023 Outlook

  • Revenue is expected to be in the range of $15.2 billion to $16.2 billion.
  • Net income is expected to be in the range of $139 million to $178 million and on a non-GAAP basis, net income is expected to be in the range of $248 million to $287 million.
  • Diluted earnings per share is expected to be in the range of $1.46 to $1.86 and on a non-GAAP basis, diluted earnings per share is expected to be in the range of $2.60 to $3.00, based on estimated outstanding diluted weighted average shares of 94.8 million.
  • The outlook for the fiscal 2023 first quarter reflects the impact of year-over-year foreign exchange headwinds on revenue of approximately $500 million and interest rate movements of $33 million.

Share Repurchase Announcement

The TD SYNNEX board of directors has approved a share repurchase program of up to $1 billion of its common stock over a period of up to three years, replacing the previous three-year program. Stock repurchases may be made at management’s discretion from time to time through open market or privately negotiated transactions, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

Dividend

TD SYNNEX announced today that its Board of Directors declared a quarterly cash dividend of $0.35 per common share, which represents a 17% increase as compared to the prior quarter. The dividend is payable on January 27, 2023 to stockholders of record as of the close of business on January 20, 2023.