TD SYNNEX CORP - 10-Q Summary (Q2 FY2026)
Business Context and Reporting Period
Company: TD SYNNEX Corporation (SNX)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended May 31, 2026
Business Overview: A leading global distributor, solutions aggregator, and original design/contract manufacturer connecting the IT ecosystem. Operations span the Americas, Europe, and Asia-Pacific/Japan (APJ), with a fourth reportable segment, Hyve Solutions, operating globally.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue | $19.57 Billion | $14.95 Billion | $36.74 Billion | $29.48 Billion |
| Gross Profit | $1.34 Billion | $1.05 Billion | $2.59 Billion | $2.04 Billion |
| Gross Margin | 6.84% | 7.00% | 7.05% | 6.94% |
| Operating Income | $519.4 Million | $328.1 Million | $1.01 Billion | $632.6 Million |
| Operating Margin | 2.65% | 2.20% | 2.75% | 2.15% |
| Net Income | $334.1 Million | $184.9 Million | $661.0 Million | $352.5 Million |
| Diluted EPS | $4.15 | $2.21 | $8.19 | $4.19 |
| Cash & Equivalents | $1.09 Billion | $2.44 Billion (Nov 2025) | N/A | |
| Total Debt (Current + Long-term) | $4.72 Billion | $4.61 Billion (Nov 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenue increased 31.0% year-over-year (YoY) for Q2 and 24.6% YoY for the six months ended May 31, 2026. Constant currency revenue growth was 29.1% (Q2) and 21.3% (YTD).
- Profitability: Operating income surged 58.3% YoY in Q2 and 59.5% YoY YTD, driven by revenue growth and operating leverage. Net income increased 80.7% YoY in Q2.
- Segment Performance:
- Hyve Solutions: Revenue grew 49.1% YoY (Q2) and 37.5% YoY (YTD), with operating income up 89.0% (Q2). Growth driven by Manufacturing and Supply Chain Services.
- Americas Distribution: Revenue up 27.5% (Q2) and 19.0% (YTD).
- Europe Distribution: Revenue up 29.2% (Q2) and 27.5% (YTD).
- APJ Distribution: Revenue up 28.5% (Q2) and 29.1% (YTD).
- Working Capital: Inventory increased significantly to $13.89 billion (from $9.50 billion at Nov 2025) to support business growth, contributing to a net cash outflow from operating activities of $1.16 billion for the six months ended May 31, 2026.
- Foreign Currency: The strengthening of the Euro against the U.S. dollar had a favorable impact on reported revenue and gross profit.
Guidance, Outlook, and Risks
- Outlook: Management expects to continue expanding operations through investments and acquisitions. The company believes current cash balances, operating cash flows, and credit availability are sufficient to fund operations, working capital, and debt obligations (including $700 million in Senior Notes due August 2026) for the next 12 months.
- Capital Allocation:
- Share Repurchases: Under a $2.0 billion program authorized in March 2024, the company repurchased $112.4 million of stock in Q2 and $192.1 million YTD. Approximately $1.0 billion remains available.
- Dividends: Declared a quarterly cash dividend of $0.48 per share, payable July 31, 2026.
- Key Risks & Contingencies:
- Legal Proceedings: Ongoing appeal regarding a French Competition Authority fine (reduced to €24.9 million, paid in FY2022). A related civil lawsuit was dismissed in November 2024, though an appeal by the plaintiff is pending.
- Market Risks: Exposure to foreign currency fluctuations, interest rate changes, and geopolitical instability. The company utilizes derivative instruments to hedge these risks.
- Concentration: Apple Inc. accounted for 11% of consolidated revenue in both Q2 and YTD 2026. No single customer exceeded 10% of revenue in the current period.
- Unusual Items:
- Warrant Issuance: In May 2026, the company issued a warrant to Amazon.com NV Investment Holdings LLC for up to 3.24 million shares. 215,871 shares vested immediately; the remainder vest based on qualifying payment thresholds.
- Investment Gains: Recognized a gain on investments of $33.1 million in the six months ended May 31, 2026, from the sale of equity securities.
Investor Verification Checklist
- Inventory Build: Verify the sustainability of the $4.4 billion increase in inventory over six months and its impact on future cash conversion cycles.
- Debt Maturity: Confirm refinancing plans or cash availability for the $700 million Senior Notes maturing in August 2026.
- Amazon Warrant: Assess the potential dilution and revenue recognition impact of the warrant issued to Amazon, specifically the vesting conditions tied to qualifying payments.
- Margin Pressure: Monitor gross margin trends, particularly in Hyve Solutions, where product mix and net revenue presentation significantly impact reported margins.
- Legal Exposure: Track the status of the appeal regarding the French Competition Authority fine and the eBizcuss civil lawsuit.