0001628280-25-043406
SEC filingTD SYNNEX reported strong Q3 with 6.6% revenue growth and 68bps gross margin expansion, driven by portfolio growth and favorable mix.
TD SYNNEX delivered robust results for the third quarter ended August 31, 2025. Consolidated revenue increased 6.6% year-over-year to $15.65 billion, driven by growth across both the Advanced Solutions and Endpoint Solutions portfolios. The reported revenue growth was partially offset by a $810 million negative impact from a higher percentage of sales presented on a net basis due to product mix. Gross profit rose 17.6% to $1.13 billion, with gross margin expanding 68 basis points to 7.22%—aided by the net revenue presentation effect and margin expansion in Endpoint Solutions. Operating income grew 26.7% to $383.7 million, and operating margin improved to 2.45% from 2.06%, reflecting the gross margin expansion despite higher personnel costs. Net income increased to $226.8 million, and diluted GAAP earnings per share rose to $2.74 from $2.08. On a non-GAAP basis, diluted EPS was $3.58, up from $2.86.
All three geographic segments contributed to the revenue growth. The Americas segment posted a 2.0% revenue increase to $9.27 billion, with operating margin improving to 3.06% from 2.43%, driven by portfolio growth and margin expansion. Europe delivered a 12.7% revenue increase to $5.17 billion, with operating margin slightly up to 1.36% from 1.25% due to product mix. APJ led with 20.4% revenue growth to $1.21 billion, while operating margin held flat at 2.45% as favorable mix effects offset lower strategic technologies margins. Each segment faced headwinds from net revenue presentation, most notably in the Americas where the impact was approximately $620 million (7% of segment revenue).
While MD&A does not provide quantitative guidance, management outlined strategic imperatives centered on expanding the portfolio, targeting new customer segments, and investing in services—particularly in cloud, security, and AI. The recent acquisition of Apptium Technologies (July 2025) underscores the commitment to enhancing the company's cloud commerce platform. Management highlighted ongoing macroeconomic risks including inflation, tariff uncertainty, and foreign exchange fluctuations, but expressed confidence in the company's liquidity position and ability to fund operations through cash flows and credit facilities. The focus on diversifying offerings and accelerating services growth is expected to support long-term value creation.
Cash and cash equivalents decreased to $874.4 million from $1.06 billion at November 30, 2024, a decline of $185.0 million. Total debt (current and long-term borrowings) stood at $4.24 billion, up from $3.91 billion at year-end 2024, driven by net borrowings on revolving credit facilities. The company’s accounts receivable securitization program had no outstanding borrowings at period end, with $1.5 billion in maximum capacity. Inventory increased to $9.14 billion from $8.29 billion, reflecting seasonal build and growth in the Europe and APJ segments.
The company disclosed $2.9 billion in obligations outstanding under supplier finance programs as of August 31, 2025, down from $3.2 billion at November 30, 2024. These are included in accounts payable. Additionally, the company is contingently liable for repurchase obligations under customer inventory financing agreements, though losses have been insignificant historically. A French antitrust fine of €24.9 million was paid in fiscal 2022, with an ongoing appeal; the company believes the likelihood of material loss from related civil litigation is remote.
Share repurchases totaled $426.8 million during the nine months ended August 31, 2025, at a weighted-average price of $127.58 per share. The March 2024 $2.0 billion buyback program had $1.4 billion remaining. Dividends declared were $0.44 per share quarterly, up 10% from $0.40 in the prior year, totaling $110.4 million paid YTD. Capital expenditures were $104.0 million, or 0.23% of revenue. Net debt increased by $331.4 million, primarily from revolver draws; no new long-term debt was issued, and $15.5 million of principal payments were made on existing term loans.
For the three months ended August 31, 2025, the Americas segment generated $9.27 billion in revenue (59.2% of total) and $283.6 million in operating income (3.06% margin). Europe contributed $5.17 billion (33.1% of revenue) with $70.4 million operating income (1.36% margin). APJ reported $1.21 billion (7.7% of revenue) and $29.6 million operating income (2.45% margin). Year-over-year, Europe revenue grew 12.7% and APJ grew 20.4%, while Americas grew 2.0%. Operating income increased 28.4% in Americas, 22.6% in Europe, and 20.5% in APJ.