TD SYNNEX Corp. (NYSE:SNX) reported fiscal second-quarter results Thursday that topped Wall Street expectations on both revenue and earnings, driven by strong growth in its Hyve AI infrastructure business.

Revenue increased 31% year over year to $19.58 billion, exceeding the analyst consensus estimate of $16.80 billion. On a constant-currency basis, revenue rose 29.1% and finished well above the high end of the company’s guidance.

Earnings And Margin Performance

GAAP diluted earnings per share rose to $4.15 from $2.21 a year earlier. Non-GAAP diluted EPS increased 62.2% to $4.85, topping analysts’ estimate of $4.14.

Net income climbed 80.7% to $334 million, while non-GAAP net income increased 55.8% to $390 million.

Gross profit rose 28% to $1.34 billion. Gross margin, however, declined to 6.84% from 7.00% a year earlier.

Operating income increased 58.3% to $519 million. Non-GAAP operating income rose 48.5% to $615 million.

Non-GAAP gross billings climbed 33.4% to $28.9 billion, or 31.7% in constant currency, also exceeding the company’s outlook.

Hyve AI Business Drives Growth

TD SYNNEX said its distribution business includes IT hardware, software and systems, while Hyve provides traditional and accelerated compute, cloud and connected infrastructure solutions.

During the earnings call, management said distribution gross billings increased 22% to $23.4 billion. Endpoint Solutions grew 13%, supported by higher average PC selling prices and mid-single-digit unit growth. Advanced Solutions rose 31% on strength in infrastructure and security.

Hyve gross billings more than doubled, rising 117% to $5.5 billion. Manufacturing represented about two-thirds of the segment’s business.

Chief Executive Officer Patrick Zammit said Hyve has secured at least one program with each of the top five U.S.-based hyperscale cloud providers. The company is adding more than 1 million square feet of U.S. manufacturing capacity to support program launches expected in late fiscal 2026 or early fiscal 2027.

Management said it has not seen demand weaken because of higher prices but continues to monitor PC demand elasticity. It also cited memory and CPU supply constraints as potential third-quarter risks and said Hyve’s rapid growth will continue to consume cash in the near term.

Zammit said the company has “not seen any destruction of demand because of the price increases,” adding that businesses continue to invest in infrastructure and AI initiatives.

TD SYNNEX also said it has not seen material changes in vendor incentives, while demand across its product portfolio, including PCs, servers and networking, remained healthy heading into the fiscal third quarter.

Cash Flow And Shareholder Returns

Operating cash flow for the first six months was negative $1.16 billion, while free cash flow was negative $1.26 billion.

Cash and cash equivalents declined to $1.09 billion from $2.44 billion at the end of fiscal 2025. Current borrowings totaled $1.13 billion, while long-term debt stood at $3.59 billion.

The company returned $151 million to shareholders through dividends and share repurchases. TD SYNNEX also raised its quarterly dividend 9% year over year to 48 cents per share.

Outlook

For the fiscal third quarter, TD SYNNEX expects revenue of $18.2 billion to $19.0 billion, above the analyst consensus estimate of $16.83 billion.

The company forecasts non-GAAP gross billings of $27.2 billion to $28.2 billion, GAAP diluted EPS of $3.40 to $3.90, above the $3.04 estimate, and non-GAAP diluted EPS of $4.25 to $4.75, exceeding the consensus estimate of $4.03.

TD SYNNEX said geopolitical uncertainty, weaker IT spending, inflation, currency fluctuations, tariffs, supply constraints and changes in supplier programs remain key risks to its outlook.

SNX Price Action: TD Synnex shares were down 0.70% at $281.23 at the time of publication on Thursday. The stock is approaching its 52-week high of $296.47, according to Benzinga Pro data.

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