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Home Distributor

4 takeways as TD Synnex returns to growth

"The focus of course is on growth", CEO-in-waiting Patrick Zammit declares

Oxygen staff by Oxygen staff
26 June 2024
in Distributor, News
TD Synnex reception
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The world’s largest distributor returned to growth in its latest quarter – at least when it came to its ultimate top line.

TD Synnex saw gross billings rise 3% year on year to $19.3bn in its second quarter ending 31 May 2024, drawing a line under several quarters of shrinking sales.

Here we round up four key talking points from the numbers.

1. Zammit gets growth wish

Asked on the earnings call to reveal his focus areas for the next 12 months, CEO-in-waiting Patrick Zammit replied “the focus of course is on growth”.

His timing couldn’t be much better as TD Synnex’s numbers began to head back in the right direction in Q2.

While net revenues were down 1% year on year to $13.9bn (following an 8% drop in Q1), gross billings – a better litmus of the ultimate top line – leapt 3% to $19.3bn.

TD Synnex expects growth in both these numbers to “further accelerate” in the second half as PC refresh and a rise in investments in areas like datacentre revive its fortunes.

Q3 revenues are set to come in at between $13.3bn and $14.9bn – up 1% at the midpoint.

2. Europe mirrors wider business

Patrick Zammit and Rich Hume, TD Synnex
Patrick Zammit and Rich Hume, TD Synnex

Did TD Synnex grow in Europe?

Again, it depends on which number you go by, with gross billings rising 1.5% to $5.9bn and revenues dipping 0.8% to $4.4bn.

TD Synnex just upgraded its IT platform in both Europe and North America, Zammit (who is currently COO) stressed, giving it the opportunity “to redeploy resources to fuel the growth on the high-growth categories”.

3. Hume says AI will hum

Outgoing CEO Rich Hume used the earnings call to talk up the AI opportunity, claiming that the “potential associated TAM expansion over time is significant”.

“A portion of that spend will come through business partner ecosystem, and we expect our business will benefit across components, devices, data center, cloud storage, networking as well as the related software applications and services,” he said on the call, a transcription of which can be found here.

During the quarter, the broadliner launched the IBM watsonx Gold 100 programme to accelerate AI opportunities for partners through enablement, training, business planning, sales acceleration, marketing, demand generation, expert services, and pre-sales support, Hume pointed out.

“We are also honoured to be named Microsoft’s Global Copilot Seats Champion for the quarter,” he added.

Rich Hume, TD Synnex
Rich Hume

Asked about the ramp up of AI PCs, Zammit said their penetration of the total PC market is currently “in the low single-digit” in both North America and Europe.

“We are waiting for the PC manufacturers to accelerate the launch of the AI PCs and so the adoption rate is for sure going to increase. And so we continue to be very confident on the prospects of that segment of the market,” he added.

4. Where Zammit is adding zest

Asked to share his vision for the company, Zammit – who will seize the reins on 1 September – highlighted three “prospects” he would pursue, the first being AI.

Secondly, there are countries where TD Synnex will invest in countries where it has a low share, the soon-to-be-CEO added.

“And third, it’s in services…. We believe that there are opportunities in services, again to support our resellers, but I see some positive prospects, which obviously will be accretive,” he concluded.

Tags: featuredTD Synnex
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