- Record Q4 FY2025 Performance: Non-GAAP gross billings rose 15% YoY to $24.3B, with diluted EPS up 24% to $3.83.
- HIVE Growth Outpaces Core Business: HIVE’s gross billings surged over 50% YoY, compared to 10% growth for the company excluding HIVE.
- Strong Financial Metrics: Net revenue grew 10% to $17.4B, gross profit 15% to $1.2B, and non-GAAP operating income 18% to $497M.
- Free Cash Flow and Shareholder Returns: Generated $1.4B in free cash flow and returned $209M to shareholders in FY2025.
- Q1 FY2026 Guidance Resilient: Anticipates 12% gross billings growth to $22.7–23.7B, despite potential demand headwinds from higher component costs.
Segment Performance
The company's business, excluding HIVE, saw gross billings increase by 10% year-over-year, while HIVE grew its gross billings by more than 50%. HIVE's growth was driven by investments in leadership, engineering, and capabilities, with strong growth in supply chain services. The company's omnichannel engagement and specialized go-to-market strategies contributed to its success.
Guidance and Outlook
For the first quarter of fiscal 2026, TD SYNNEX expects non-GAAP gross billings of $22.7 billion to $23.7 billion and non-GAAP diluted earnings per share of $3 to $3.5. The guidance reflects a 12% billings growth, despite potential end-market demand destruction from higher component costs. The company remains focused on delivering long-term value to shareholders through stable growth, margin expansion, and consistent cash generation.
Valuation and Metrics
With a P/E Ratio of 14.38 and an EV/EBITDA of 5.93, the company's valuation appears reasonable. The ROE of 9.94% and ROIC of 7.78% indicate a decent return on equity and invested capital. The Free Cash Flow Yield of 11.34% is also attractive, suggesting a potential upside. Analysts estimate next year's revenue growth at 4.0%, which is relatively modest compared to the company's historical performance.
Market Outlook and Prospects
The PC market is expected to continue growing, driven by commercial refresh and AI-compatible upgrades. TD SYNNEX is confident about the prospects of the PC market, with AIPCs performing well. The company's progress in winning new programs and potentially new customers for HIVE is also a positive sign. Overall, the company's strong financial performance, diversified business, and growth prospects make it an attractive investment opportunity.