TD SYNNEX Corporation SNX reported non-GAAP earnings of $5.68 per share for the third quarter of fiscal 2026, beating the Zacks Consensus Estimate by 22.4%. The bottom line increased 58.7% year over year. Revenues of $21.56 billion surpassed the consensus mark by 14.8% and rose 37.7% year over year.
The strong performance reflected broad-based momentum across Distribution and Hyve Solutions. Non-GAAP gross billings climbed 40% year over year to $31.83 billion, with both businesses growing above management's expectations.
SNX's Distribution Business Maintains Strong Momentum
Distribution revenues totaled $17.76 billion, up 35% year over year. Non-GAAP gross billings increased 27% to $24.82 billion, reflecting double-digit growth across all regions and most major technologies. Data center infrastructure was a notable area of strength.
Distribution non-GAAP operating income jumped 55% to $483.5 million. Non-GAAP operating margin, measured against gross billings, expanded 35 basis points to 1.95%. Management attributed the improvement to strong gross billings growth and disciplined expense management despite some pressure from customer and product mix.
Within the Distribution business, Advanced Solutions revenues increased 57% year over year to $8.5 billion, supported by infrastructure, software and AI-related technologies. Non-GAAP gross billings rose 37% to $14.5 billion.
Endpoint Solutions revenues advanced 20% to $9.3 billion, while gross billings increased 16% to $10.3 billion. PC demand benefited from higher average selling prices despite a modest decline in units. Within Distribution, servers and storage posted 67% year-over-year growth in gross billings, the strongest growth among the disclosed product categories.
TD SYNNEX Corporation Price, Consensus and EPS Surprise
TD SYNNEX Corporation price-consensus-eps-surprise-chart | TD SYNNEX Corporation Quote
TD SYNNEX's Hyve Growth Remains Robust
Hyve Solutions generated revenues of $3.80 billion, up 51.7% year over year. Non-GAAP gross billings surged 117.5% to $7.01 billion, driven by higher manufacturing volumes and continued strength in supply-chain services. Manufacturing grew more than 130%, while supply-chain services advanced more than 90%.
Hyve's non-GAAP operating income increased 55.8% to $253 million. However, non-GAAP operating margin based on gross billings contracted 143 basis points to 3.61%. The decline reflected a greater contribution from large AI rack programs, which are profitable but carry lower margins than the Hyve average.
TD SYNNEX Posts Growth Across All Regions
Americas Distribution revenues climbed 39.9% year over year to $10.32 billion, while gross billings increased 28% to $14.98 billion. The growth was driven primarily by servers and storage, software and PCs.
Europe Distribution revenues rose 30.2% to $6.37 billion, with gross billings up 26% to $8.16 billion. Asia-Pacific and Japan Distribution revenues jumped 21.7% to $1.07 billion, while gross billings advanced 26.1% to $1.67 billion. Europe recorded particularly strong operating leverage, with non-GAAP operating income rising 116.4%.
TD SYNNEX's Q3 Profitability
Gross profit increased 26.2% year over year to $1.43 billion, while gross margin contracted 61 basis points to 6.61%, reflecting business mix, including higher Hyve contributions and lower-margin AI infrastructure programs.
Non-GAAP operating income climbed 55.1% to $736 million. Non-GAAP operating margin expanded 39 basis points year over year to 3.42%, supported by higher business volumes and improved Distribution operating margins. Disciplined cost management also helped operating profit grow faster than gross profit.
SNX's Cash Flow and Shareholder Returns
TD SYNNEX ended the third quarter with $749.3 million in cash and cash equivalents and $3.60 billion in long-term borrowings. Operating cash outflow was $916.7 million, while free cash flow usage totaled $975.6 million. The cash use mainly reflected higher inventory and working capital investments to support Hyve's new customers and programs.
For the first nine months of fiscal 2026, operating cash outflow was $2.08 billion, while free cash flow usage totaled $2.24 billion.
TD SYNNEX returned about $138.7 million to shareholders in the third quarter through roughly $100.3 million in share repurchases and $38.4 million in dividends. During the first nine months, SNX repurchased $292.4 million of common stock and paid $115.6 million in dividends.
TD SYNNEX Provides Strong Q4 Guidance
For the fourth quarter of fiscal 2026, TD SYNNEX expects revenues between $21.8 billion and $22.6 billion. Non-GAAP gross billings are projected between $31.4 billion and $32.4 billion.
Non-GAAP earnings are expected between $5.65 and $6.15 per share. Management expects Hyve gross billings to increase sequentially as new customer programs ramp and anticipates positive cash generation as recently deployed working capital begins to normalize.
SNX’s Zacks Rank & Other Stocks to Consider
TD SYNNEX currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Telos TLS, Vertiv VRT and Taboola.com TBLA. Telos sports a Zacks Rank #1 (Strong Buy) at present, while Vertiv and Taboola.com each carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Telos’ 2026 earnings is pegged at 16 cents per share, up a penny over the past 30 days, indicating a year-over-year rise of 77.8%. Telos shares have plunged 20.2% year to date (YTD).
The Zacks Consensus Estimate for Vertiv’s 2026 earnings has moved northward by 5 cents to $6.69 per share over the past 30 days and calls for a year-over-year increase of 59.3%. Vertiv shares have jumped 51.4% YTD.
The Zacks Consensus Estimate for Taboola.com’s 2026 earnings has been revised upward by 81.8% to 60 cents per share over the past 30 days, implying a year-over-year increase of 15.4%. Taboola.com shares have fallen 25.2% YTD.
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