Four things we learned from TD SYNNEX's fiscal FY23 results

CEO Rich Hume talks AI as revenues take a hit owing to a continued decline in endpoint solutions

Distribution giant TD SYNNEX has posted its fiscal fourth quarter and fiscal year earnings ended 30 November, 2023 which saw revenues fall.

The NYSE-listed distributor blamed the slump on the continued struggle of its endpoint solutions portfolio that has been plaguing past quarterly results.

But that's not all that was discussed in the company's fiscal Q4 and FY23 results as CRN breaks down the key points.

Revenue down but met expectations

Fourth quarter revenue came in at $14.4bn, compared to $16.2bn in the prior fiscal Q4, representing a decrease of 11.3 per cent.

However the figure is still within the previously provided outlook of $14bn- $15bn.

Net income fell 15.2 per cent to $187.5m.

Revenue also dipped three per cent in Europe to $5.2bn.

While in FY23 TD SYNNEX saw revenue drop 7.7 per cent from $62.3bn to $57.6bn.

FY23 net income shrank 3.8 per cent to $626.9m while European revenue also fell 4.3 per cent to $19.4bn.

Predicting its fiscal 2024 first quarter results, TD SYNNEX expects revenues to come between $14bn - $14.7bn in Q1 representing a decline of five per cent on a year-on-year basis at the midpoint.

Endpoint solutions recovery

The distributor titan blamed the revenue decrease on a decline in its endpoint solutions portfolio as the industry experienced a post-pandemic decline in demand for PC ecosystem products.

However, TD SYNNEX CEO Rich Hume told listeners on an earnings call the group enters 2024 well positioned to capitalise on the gradually improving IT spending market dynamics.

"Looking forward on our outlook for fiscal 2024 we are optimistic that the market headwinds we have experienced over the past several quarters will continue to abate as the year progresses," he said.

"Early indications are that the gradual recovery in endpoint solutions will build throughout the year, fueled by the resumption of more normalised PC buying patterns.

"This will be balanced by tougher year on year compares for advanced solutions, given the strong growth in the first half of 2023 but should position as well for returning to overall growth as we move through the year."

New Europe boss in ‘very near future'

New TD SYNNEX chief operating officer Patrick Zammit officially assumed his role last week, Hume said on the call, stepping up from his former position as European president.

The distributor boss also took the time to thank Americas president Michael Urban for his efforts in the company, as he is due to leave effective March 1.

In an update on Zammit's replacement, Hume said he looks forward to announcing the next European leader in the "very near future."

AI

Any technology company update would be remiss to mention artificial intelligence, and of course TD SYNNEX is no different.

"AI is another clear growth factor as we continue to look ahead in our industry. We have invested for several years in this space via our data analytics practice," Hume said.

"This created the foundation for our AI strategy. And our decade plus of experience in data analytics puts us in a leadership position relative to this new exciting market opportunity."

Hume added the company has built a strong vendor portfolio required to run and train AI models, with many of its leading software vendors releasing embedded AI capabilities in their product line.

"In addition, we will leverage our strong relationships with PC OEMs to support and enable the introduction and growth of AI enabled PCs over time," he added.