TD SYNNEX SNX reported non-GAAP earnings of $4.85 per share for the second quarter of fiscal 2026, beating the Zacks Consensus Estimate of $3.92 by 19.9%. The bottom line increased 62.2% year over year. Revenues of $19.58 billion surpassed the consensus mark of $16.84 billion by 16.2% and increased 31% from the year-ago quarter.
The strong performance was driven by broad-based momentum across the Distribution and Hyve businesses. Non-GAAP gross billings climbed 33.4% year over year to a record $28.9 billion, reflecting continued demand across infrastructure, security and hyperscale programs.
Distribution Business Delivers Strong Growth
TD SYNNEX's Distribution business generated non-GAAP gross billings of $23.4 billion, up 22% year over year. Management highlighted broad-based strength across all regions and product categories, supported by strong demand, an expanding customer base and continued market-share gains.
Distribution non-GAAP operating income rose 36% year over year to $434 million. Non-GAAP operating margin, as a percentage of gross billings, improved 19 basis points year over year to 1.85%, benefiting from favorable mix, disciplined cost management and modest gains from strategic inventory purchases.
TD SYNNEX Corporation Price, Consensus and EPS Surprise
TD SYNNEX Corporation price-consensus-eps-surprise-chart | TD SYNNEX Corporation Quote
Hyve Continues to Be a Major Growth Driver
Hyve Solutions remained the standout performer during the quarter. Non-GAAP gross billings surged 117% year over year to $5.5 billion, driven by increased manufacturing volumes from existing customers and continued strength in supply-chain services.
Non-GAAP operating income for Hyve increased 89% year over year to $181 million. Manufacturing activities accounted for roughly two-thirds of Hyve's business, while supply-chain services represented approximately one-third. The company also announced plans to expand its U.S. manufacturing footprint by more than one million square feet to support future customer demand.
Portfolio Trends Reflect Infrastructure Demand
Among product categories, Advanced Solutions revenues increased 43% year over year to $7.8 billion, benefiting from sustained demand in infrastructure and cybersecurity offerings. Endpoint Solutions revenues rose 17% year over year to $8.8 billion, supported by strong personal computer demand and higher average selling prices.
Consolidated gross profit increased 28% year over year to $1.34 billion. However, gross margin contracted 16 basis points year over year to 6.84%, reflecting a higher contribution from Hyve and changes in business mix. Despite the margin pressure, non-GAAP operating income advanced 48.5% year over year to $615 million, while non-GAAP operating margin expanded 37 basis points to 3.14%.
Cash Flow & Balance Sheet Remain Solid
TD SYNNEX ended the quarter with cash and cash equivalents of approximately $1.1 billion and long-term debt of $3.59 billion. TD SYNNEX reported a net leverage ratio of 1.6x. Net working capital stood at $4.9 billion, while gross cash conversion cycle was 17 days.
The company returned $151 million to shareholders during the quarter, including $112 million in share repurchases and $39 million in dividends. Management also announced a quarterly cash dividend of 48 cents per share, representing a 9% year-over-year increase.
SNX Issues Upbeat Q3 Fiscal 2026 Outlook
For the third quarter of fiscal 2026, TD SYNNEX expects revenues to be in the range of $18.2-$19 billion.
The company expects non-GAAP earnings per share between $4.25 and $4.75.
Management noted that the outlook reflects continued momentum across both the Distribution and Hyve businesses, supported by ongoing investments in AI infrastructure, enterprise modernization initiatives and expanding hyperscaler relationships.
SNX’s Zacks Rank & Other Stocks to Consider
Currently, SNX carries a Zacks Rank #2 (Buy).
Digital Turbine APPS, ASE Technology ASX and CTS CTS are some other top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Digital Turbine, ASE Technology and CTS sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Digital Turbine shares have rallied 102.8% in the year-to-date period. The long-term earnings growth rate for Digital Turbine is pegged at 18.98%.
ASE Technology shares have surged 159.2% in the year-to-date period. The long-term earnings growth rate for ASE Technology is pegged at 47.66%.
Shares of CTS have gained 55.9% in the year-to-date period. The long-term earnings growth rate for CTS is pegged at 16%.
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