TD SYNNEX reported third‑quarter fiscal 2026 results that exceeded analysts' expectations. Non‑GAAP earnings per share came in at $5.68, up 59% year‑over‑year and $1.04 above the $4.64 consensus forecast. GAAP diluted EPS rose 89% to $5.18. Revenue reached $21.6 billion, beating the $18.79 billion estimate by $2.81 billion, a 15% premium.
Non‑GAAP gross billings grew 40% to $31.8 billion, with a 41% increase in constant currency terms. Operating income rose 55% year‑over‑year to $736 million on a non‑GAAP basis, while GAAP operating income climbed 68% to $643 million. Distribution gross billings were $24.8 billion, up 27%, and Hyve gross billings surged 117% to $7 billion. Endpoint Solutions billings increased 16% and Advanced Solutions billings rose 37%, driven by infrastructure, software and AI‑related sales.
Distribution gross profit expanded 22% to $1.15 billion, with non‑GAAP operating income of $483 million, representing a 1.95% operating margin, up 35 basis points. Hyve posted a gross profit of $276 million, up 47%, and non‑GAAP operating income of $253 million, a 56% increase, though its operating margin fell to 3.61% from 5.04% a year earlier. Hyve manufacturing grew more than 130%, accounting for roughly two‑thirds of Hyve billings, while Hyve supply‑chain services grew over 90%.
Free cash flow was negative by about $1 billion, reflecting inventory and working‑capital outlays. Working capital stood at $6.5 billion, with a cash conversion cycle of 22 days, five days longer sequentially. Cash and cash equivalents totaled $749 million and net leverage was 1.9 times. The company returned $100 million via share repurchases and $38 million in dividends. A cash dividend of $0.48 per share was approved, payable on October 30, 2026.
Despite the strong operating metrics, the stock fell 9.42% to $260.77 from $287.89, within a 52‑week range of $142.22 to $298.77. Valuation metrics included a price‑to‑earnings ratio of 20.77 and a PEG ratio of 0.32, with a year‑to‑date return of 93%.
Guidance for the fourth quarter of fiscal 2026 projects non‑GAAP gross billings of $31.9 billion (±$0.5 billion), revenue of $22.2 billion (±$0.4 billion), non‑GAAP net income of $474 million (±$20 million) and non‑GAAP diluted EPS of $5.90 (±$0.25). The company expects a gross‑to‑net adjustment of roughly 30%.
Strategic partnerships were highlighted. TD SYNNEX and Mach3 Systems signed an agreement to support an NVIDIA AI factory powered by Vera Rubin NVL72 systems. IBM expanded its relationship with TD SYNNEX into 20 additional countries across Europe, Asia‑Pacific and Latin America. Hyve announced the ramp‑up of three new hyperscalers, and a seven‑year warrant agreement with Amazon was noted.
CEO Patrick Zammit described the quarter as a “record” period, emphasizing continued enterprise AI adoption and data‑center modernization. CFO David Jordan noted that large AI rack programs had been strategically important but dilutive to Hyve margins, a mix headwind that he believes has stabilized. He also said the company expects all businesses to become sustainable cash generators by 2027.
