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TD Synnex (SNX) is modeslty higher after delivering a strong Q2 (May) report this morning and guiding Q3 well above expectations, reinforcing that demand remains robust across both its core Distribution business and Hyve infrastructure platform. SNX delivered another large EPS beat, while revenue growth accelerated to 31% yr/yr, reaching $19.57 bln and comfortably exceeding expectations. For Q3, SNX expects adjusted EPS of $4.25-4.75, revenue of $18.2-19.0 bln, and gross billings of $27.2-28.2 bln. At the midpoints, the outlook implies growth of roughly 26%, 19%, and 22%, respectively.

• Billings: Gross billings increased 33% yr/yr to $28.9 bln, well above the high end of SNX's guidance and accelerating sharply from 24% growth in Q1. Strength was driven by continued momentum across both Distribution and Hyve.
• Distribution: Distribution revenue increased 28% yr/yr to $16.6 bln, while gross billings rose 22% to $23.4 bln. Advanced Solutions led with 43% revenue growth, while Endpoint Solutions increased 17%. Billings growth was broad, led by servers and storage at 35%, networking at 26%, PCs at 24%, and software at 22%.
• Hyve: Hyve Solutions revenue increased 49% yr/yr to $3.0 bln, while gross billings surged 117% to $5.5 bln. Growth was driven by new programs and higher manufacturing volumes with existing customers, alongside continued strength in supply-chain services. Hyve operating income increased 89% to $181 mln.
• Operating leverage: Adjusted operating income increased 49% yr/yr to $615 mln, outpacing gross-billings growth of 33%, while adjusted operating income as a percentage of billings expanded 22 bps to 2.13%.
• Customers wins: Management said growth is being supported by new customer wins, expanded vendor partnerships, and greater share of wallet with strategic relationships. Hyve has now secured at least one program with each of the top five U.S.-based hyperscales, with two newly onboarded customers expected to ramp in late FY26 or early FY27.

Briefing.com Analyst Insight

SNX has been on a sharp run, with shares up more than 80% YTD. As such, expectations were elevated heading into this report, likely explaining why SNX has given up much of its early gain despite delivering another encouraging quarter. Nevertheless, the report continued to reinforce healthy demand tied to AI infrastructure buildouts, enterprise data-center modernization, and AI-capable devices across both Distribution and Hyve. Distribution growth remained broad across every major technology category, with Advanced Solutions benefiting from continued infrastructure and security demand, while PC growth included higher selling prices and mid-single-digit unit gains. Hyve stood out, with new programs and higher manufacturing volumes from existing customers driving triple-digit billings growth. Accelerating billings are also translating into faster profit growth, while expanded hyperscaler relationships and more than one million square feet of planned U.S. capacity provide additional runway. Overall, this was another encouraging report, but the reversal suggests much of the upside was already anticipated.