TD SYNNEX (SNX) 10 Jan 232022 Q4 Earnings call transcript

Good morning. My name is Devon, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX Fourth Quarter Fiscal 2022 Earnings Call. Today's call is being recorded. [Operator Instructions]

opening to would Investor Liz for the to Relations. time, over call Morali, this remarks, like I pass At Head of Liz, begin. you may

joining With Good for Witt, Hume, CFO. you. morning, and Marshall you Thank everyone, CEO; and today's today me for call. are Rich thank us

about discussion events, or the periods. plans we laws, federal for strategy, Before today's including let including other within well statements predictions, expectations remind me forward-looking continue, projections statements securities future about the statements that estimates, as our positioning you contains meaning and of as fiscal future

Actual and from risks with update forward-looking and forward-looking may not the of section in X-K release, XX-K mentioned of statements in do intend discussed to in Form today's earnings Risk our filings Factors results these and differ Form other materially reports uncertainties in the our result today as and any We filed a SEC. the those we statements.

will non-GAAP or Form This X-K without in is our we release of our call related our the call, included and property this Relations not SYNNEX website, and may Investor reference TD earnings are the Reconciliations during financial of available recorded to results certain conference Also, press non-GAAP GAAP be ir.tdsynnex.com. information. permission. on rebroadcast

will turn over the to call Rich. I now Rich?

call first Thank new you, Liz. Good calendar morning, for joining of the earnings everyone, for our and us thanks year.

our closing truly integration relative the with out list lot We phenomenal and was merger our a fiscal the for results or having the met and what We on are pleased to began TD with exceeded year ended year objectives. our QX strong year a activities, SYNNEX. to-do

across is company merger the TD XXX along merger countries. very the $XX of few judge customers coworkers, this way, perspectives. from with billion mentioned a gone success different serving Today, has XXX,XXX a XX,XXX I've I As this well. over SYNNEX

vendor customers point view partners. of the of our from and First,

proposition service uninterrupted the And provide we've delivering consistent confirmation financial continue results are teams to we and delivered the value post-merger. to our Our to that strong are partners the market. of

the TD Next, focused our indicated high our a coworker accomplishment first benefits on recently our SYNNEX we first an largely level completed from of the have which achieve and of global to can perspective merger. year compensation, harmonization undertook a that survey, be engagement, initiatives of and large of in coworkers, hard

fiscal Finally, the looking through 'XX targets at shareholders, the set. of we the we lens merger our exceeded financial

impacts alignment, achieved to $XX.X we up For FX which revenue merger-related accounting fiscal for above 'XX, of policy the was billion, we anticipated. and year-over-year X% adjusting X% range X%

X.X%, above $X.XX Non-GAAP we high guidance earnings range we our the of of operating the despite per FX And guidance delivered call, FY expense September margin the X.X%. earnings X.X% 'XX of provided share was $X.XX and non-GAAP range high above last to targeted on year of provided end also range original for headwinds. end above our higher-than-forecasted the and January interest $XX.XX, of

towards our Finally, dividends shareholders goals. capital year, during progress medium-term repurchases fiscal via returned share we the to representing allocation million and $XXX

With we and ambitious $XXX year of by in XX%, overachieved end on we $XXX goal regard cost the realizing goal 'XX. by the in integration, the fiscal achieving merger million X set to that synergies of million

CIS, consolidation One Tech ERP the projects SYNNEX of Data's the is of platform. Americas largest into ERP the legacy integration systems

Canadian our excellent transitioned is on we progress major milestone. first, recently U.S. the underway, which having made migration, completed another transition have well We and

of Tech more than that CIS is report business and Data U.S. to XX% to happy the now moved I'm well. has SAP legacy over executing

on the within fiscal be the track of date. X merger of and plan year remainder the our complete the transitioning years to close continue will with throughout are We business largely

from QX Let past several In market with continuation in continued the the have me now over perspective. and fiscal growth expectations servers, of out many quarter, quarters. in experience a saw networking in solutions that the short, strength talk played of about the infrastructure. themes experienced Advanced trends a above we to we robust

and down phones. solutions' normalization modestly pandemic-related gross see year-over-year year's Endpoint as highs. areas was including the revenue continued PC growth, printers peripherals related saw solutions endpoint Several and of market last from to a mobile solid

experienced Our services and specialized growth quarter. in solutions solid businesses also the

revenue out and continue hyperscale fulfill from Hyve, CSP delivered our as quarter we outsized continued a infrastructure-focused our business, portfolio, to profitability strong Rounding our demand record with growth customers. robust

additional with on three We operating regional which regions constant Marshall also minutes. a strong basis margin a color basis. growth expectation currency few a business, experienced operating From revenue on profits from expansion delivered the in global will a all Hyve above provide on perspective,

We provided our faster revenue technologies our accelerate continue the grew the in projections we at we high-growth to Investor market targeting markets as than Day. are March

quarter the our expectation, billings year We in the hyperscale excess technologies fiscal represented which cloud, achieved a fiscal full total $XX data high-growth year-over-year in greater areas, in up billion and these in This and gross XXXX, security, analytics in growth and $XX than our XXXX of infrastructure. billings include was for XXXX. gross for growth billion XX% from of

reduction backlog chain our to Despite historical compared remains supply and solutions total with saw backlog. in We level quarter improvement endpoint our when elevated the decreases meaningful the in during both norms. solutions, advanced in a

cloud-based an market. to experience multi-vendor IT sector, and level of for Our for interest needs greater with technology more a where landscape in knowledge higher customers of market the and uncertain of volatile the competitive environment is increasingly inflation, particularly need are living the requires serve This rates shift complex the the relevant even ongoing macroeconomic talent. talent and solutions and to a reality

and these others, resonates to brings reasons TD SYNNEX with For proposition value the market that our customers. the

market utility a to economic costs. to in more as becomes desire our side, vendor of cost variable the valuable their when times On route vendors uncertainty lower also

Year of recognition further Distributor the to of the Distributor of from by by by receive Global EMEA Alto privileged the including Year the Year Year the Networks, Lenovo, our XXXX AWS were CDW, the Partner we partner Nutanix. the and North of Americas and quarter, being by distributor Palo the named America community the During Partner XXXX

We on publish ESG also continue Report to Citizenship journey and this expect quarter. first our our to progress Corporate

of continued to received we awareness the Disclosure Carbon combined recently addition, a reporting. this on updates strong our to progress first In space. of grade from year forward share our Project, in We a look in achievement continuing

a the underestimated. believe optimization of XXXX, fiscal and spending about we efficiency coworker IT reasons, to XXXX. realize enabler customer think an keeper and growth for continue we experiences these outpace collaboration, will GDP nature technology as safety of critical of tool cost cyber be And to cannot in and As

service are and We industry-leading footprint to targeting on growth well we continue more market. the leverage 'XX industry capable growth our strategy fiscal above-market our even We on shaping in capitalizing innovation the executing are of and world-class the of prepared opportunities and rates IT strategy broad enter portfolio our products and to confident as being ahead. equipped and services bring global to the and trends

first making exceptional to success. world in great thank for our their efforts I Lastly, coworkers around year fiscal a SYNNEX' XX,XXX-plus TD the want

share will outlook. pass Marshall, now who our I'll over details performance more to it about and

today. joining to everyone and us for Rich, thanks Thanks,

we high in year. surpassing to significant, the revenue X% end financial target earlier Our fiscal X% provided were XXXX with year-over-year of adjusted growth accomplishments this the of X%,

power proposition came at the the to in representing These fiscal over end demonstrate performance X.X% year target. results prior margin the of business the bringing is and Our operating a that strong X.X% and above improvement value for of above our also X.X% and to model market. SYNNEX year, high the our XX% expectations the TD our reach

Please as-combined the which the beginning year fiscal of the occurred at full merger note are that prior on the comparisons an assumes versus basis, year period.

our X% in a results. $XX.X fiscal fourth the to million, revenue growth Worldwide XX%. fiscal currency. now the relating the for of XX% normalized QX for revenue year-over-year to Moving recognition When was up alignment and record year-over-year $XXX billion, constant policy quarter merger was up

by expectations impacts, regions QX. solutions both across devaluation the at solutions driven euro in all headwind was fiscal and approximately billion and or accounted Currency QX. fiscal for Revenue above year-over-year in in primarily advanced $X endpoint

timing-related driven performed demand services results strong Additionally, and to related Hyve recoveries in prior delivered QX, quarters. margin in by better-than-expected

revenue. had was profit quarter billion, approximated greater year-over-year. $X which gross in improvement The driven as record mix of margin quarter shift by and of XX our first basis well billion SG&A expense margin recoveries, gross technologies a adjusted high-growth highest to X.XX%, million, as gross X.X% of basis points non-GAAP representing Non-GAAP margin than Total $X.XX was XX $XXX points. up the

cost by operating operating Non-GAAP discipline And $XXX margin XX% a margin operating Hyve's income constant year-over-year. income outperformance, $XX driven revenue merger increased XX.X% basis, million, basis was million non-GAAP points execution. or the aforementioned synergy up recovery, year-over-year. currency non-GAAP X.XX%, On up growth, and XX was year-over-year,

was margin Excluding recovery XX%. increase Hyve, in the year-over-year

interest were QX charges expense non-GAAP and to and million $XX outlook rates. above our $XX interest higher due borrowings finance million,

the effective where mix rate the achieved. of fiscal locations were XX%, to For due non-GAAP the forecasted rate was tax QX, approximately below XX% earnings

despite ] income and EPS diluted previously the per Note [ was non-GAAP $X.XX of of that $X.XX interest contributed margin headwinds elevated our $X.XX, quarter. high for slightly been $X.XX. share EPS EPS end million the $XXX expense. have above above the range to non-GAAP net Hyve $X.XX, non-GAAP was guidance Total these, diluted mentioned of Removing our would guidance prior from non-GAAP prior recoveries approximately

turning the billion. $XXX debt quarter Now balance cash cash to of equivalents and of million ended the and sheet. with $X.X We

previously of net ratio. Xx our in Our and ratio our gross was gross with approaching leverage line target leverage Xx, communicated X.Xx leverage investment-grade and profile, was

Accounts billion, quarter. was capital the flat was QX. from The billion, inventories cash decrease quarter million Net million the in of $X.X the fourth or $XXX the quarter. And million. from of was days, $XXX end up a working prior the $XX from billion And cycle X% receivable $X.X QX. fourth quarter quarter from prior totaled operations at totaled in cash XX for approximately down billion, $X.X the conversion from $X.X

$X.XX current Directors which business the From of XX% XX, the on January increase dividend represents perspective our XX, January quarter, to from for close approved a a common Board on of is quarter. as share, of return payable has cash The prior a of shareholder the dividend record of stockholders XXXX. per XXXX,

X.X% dividend dividends, a million the full returned yield. shareholders fiscal For XXXX, via year $XXX we reflecting to

continued fiscal also in $XXX executing and our the stock for 'XX, of our million approximately year. repurchase in total our which program We $XXX quarter, repurchasing $XX million the target share million on exceeded during

authorization, that Earlier replaces in Directors repurchase approved announced new $X today, billion share expires which January prior we our a authorization. XXXX our Board and of

'XX year-over-year We progress as allocation share capital increase we target. expect medium-term repurchases to our in our fiscal towards

outlook move an provide our Before for update discussing to I on wanted synergies. to I merger-related our financial QX, cost

and tracking X XXXX, identifying, synergy of quickly job phenomenal achieve to a opportunities us did than our teams in realizing target year the mentioned, had more Rich As allowing anticipated.

fully much through achieve We achieved expect cost and QX our an fiscal synergies with savings the of $XX in $XXX coming in the additional to from system ERP 'XX to of completion million fiscal million continue half are which for ERP for continue migration, XXXX. on expect integrated track synergies. find the Americas, we and on of we revenue to one is generate to optimization Once second the opportunities system

for QX. our Now outlook fiscal moving to

We around the reflects revenue $XX which approximately This X% year-over-year in rate of range outlook the year-over-year of on be headwind growth the midpoint. billion of million at exchange $XXX and foreign movements expect constant a $XX.X million. equates interest to currency of $XX.X basis of to total to impact billion,

a euro-to-dollar based guidance $X.XX. Our on of exchange is

net million. to Non-GAAP range non-GAAP $X expected is weighted expected Interest is on expense diluted per XX.X be and $XXX to $XX for diluted EPS million approximately be expect the be based outstanding approximately million, and to $X.XX to million, range to QX average is tax rate we XX%. share the of $XXX shares of the in be to in of expected income approximately

As XXXX, to to wanted provide modeling I a points assist we few you. enter

outpace to believe As a continue spending be growth X% our GDP growth Rich on mentioned, to basis. we X% estimate in will revenue IT to reported and XXXX

margins recovery X.X%, with From is for the a an the to Hyve in expect distribution of associated margin year, is offset which from improve working year, throughout carrying contribution improvements reduce programs. Hyve. perspective by range to lower year-over-year with we operating costs of the expected these expected X.X% capital to

least toward precision current per trending challenge fiscal QX in expense first environment, While at half would of and through second slightly interest rate year with fiscal to for $XX anticipate a then it is we the our the guidance million declining the in quarter, half. forecast of

We expect tax our be to corporate approximately non-GAAP rate XX%.

line cash flow throughout in constraints our chain be top continue generate year cash perspective, this $X billion in as flow and working to fiscal supply to 'XX expect cash to source continue anticipate improves. in inventory despite to a capital excess From we free the year growth of of position a and ease

allocation demonstrated by the towards committed other XX% returned cash are progressing business approximately in to to to and share We flow free dividends a as best via of shareholders framework medium-term M&A. today's targeted capital XX% announcement and with reinvestment repurchases, targeting our

like in to hard focus our build work partnership I'd thank for best-in-class XXXX, to providing their and closing, to and In company helping our all a vendors. to fiscal cohesive dedicated support customers and coworkers

now over begin to the Operator? back the Q&A will turn the to I call session. operator

comes with first Instructions] [Operator from of Bhattacharya question Ruplu Our Bank America.

commercial how both you gets OEMs as elevated as Congrats PC on have inventory you quarter. think consumer? Can inventory about when you And levels. well channel Rich, talked PC about trending talk do see off? that worked channel the strong the

activity seeing revenue TD you in 'XX? what factored And fiscal in vendors? promotional PC and rebates SYNNEX have specifically, from additional you Are growth for

your Thank of for and Happy you New question to you. all

but So out I'll that norm. call inventory what of might of think the when our ahead I profile, comment nothing the first, that be would it about our marginally of bandwidth we

When would at category, the we PC I for backlog the profile. at that generally it's look ecosystem say

pre serviceability in So COVID sort sort that had time. the the requirements seen with of consistent we of

sort of it, of activity underway. the is if cetera, sort as I'll think earlier, flow there Yes, et and traditional some, and you business. as ebb in are I returning I pre-COVID, activity, the of to rebates, of kind say, of pre-COVID said will, terms about But that promotions

Okay.

basis, next then in question growth strong performance. followed and saw ask a I'll currency you looks by risk my Americas. XQ For It the maybe in question, on Europe regional a Asia, like on constant

New different holidays we we relative up? given fiscal coming have XQ, Year by region expect look Chinese we a to As should performance the

structural when margins And regions. three Is Europe at there? Europe something margins I amongst what the they're And to do lower? there be you to margins, look the can lowest causes that improve

Marshall. is This

QX, currency on on growth to question QX. still expect So regional a in forecasting your even basis, regards to basis, see, modest we're though in we a not constant

of being Europe, going terms in good question then to that the for still QX. And we and we're in regards structural, have to a believe quarter in Europe

I are could, it two your margin relates to as profile, Yes. And if callouts. there

more to in traditionally, country has that is First Europe profile doing of the business margin complexity. related in There's been Europe lower. cost

bit And mobile margin where the the is the second then tends thing of profile have profile. distribution phone business we, a lower for a have to of example,

have However, those lower areas attributes. with capital margins great working

ROIC are that lower have of sort margin a the those attractive. on businesses profile So

can I more one squeeze If Okay. in. just

suggested fiscal revenue for reported X% growth. you I think 'XX, X% a to

we cloud is As and at specifically your levered look cloud, overall high-growth how to CapEx that technologies spend?

past? CapEx cloud in cloud TD revenues the any great. fiscal So think 'XX, would if but done grow strong mid-teens in that on So be as is you do lower SYNNEX still revenues 'XX still can cloud you've versus thoughts

the And the Rich be and that's in. mid-teens, technology feel We can will Yes, reflect various I'll products and think segment growth that within industry still cloud I space that. that will high-growth chime Ruplu, services industry an start, comment. and then

high-growth be technology As thoughts our But we in in the the meaningfully prepared we'll growth going the of in business. it overall average Hyve I see terms think rate a on -- growth we'll said in for 'XX. it's more in my fiscal longer-term modest area, cloud, the call to remarks, above

CapEx, we the correlation our your it's question that services one in but as provide to is CapEx to just about reminder, hyperscale the not to speaking a Just customers. only correlation, regards

JPMorgan. Cardoso with Joseph from comes question next Our

one longer environment me, of among have First on your decision-making, be of cautioning OEMs customers. spending partner things other tightening from environment. highlighted IT end strings, to some seem They purse to for -- the appear

around guess, have environment your more be And growth more you I so, outlook fiscal spending similar And from to what a I then environment IT follow-up. your a are for guys customers? specifically, you seeing optimistic guys end 'XX? driving is if the and

is Sure. Joe, Rich. this

Let me that first. handle

last back adjusted quarter at double-digit -- the were I double-digit accounting currency think fourth of the in merge for the difference during the if the we reported our growth constant year, quarter half rates then teens, third you if mid think and both So about and will.

a take comment at year, you our X% relative Marshall's to when look thoughts to And the X%. around talking about preliminary he's

trajectory So from material, in change point that pretty you overall. will, of my view, there's a if

the at are one it, obviously, most The -- our business. many way to about we looked different as think or correlations, the sources we The we seen kind had we of to best best that have look many, GDP. plan correlations

Without our it the is business take and nears you Europe. very details, two those flat. regions, at all a look the the concentrated into of for Americas if getting in GDP And

think a a over And IT the couple tenths Americas outpaced I couple X and up the tenths. down about XX-year points. are has of by Europe GDP average, is of

we is our we So likely business based year. think on about -- coming for this a theory that use the this the when outcomes is in

quarter, every at somewhat has it hearing GDP. are the in that as it what look relates market volatile. I we And a would been say take we to

as to the us. continue out that we of of theme in So greater front sort plays macroeconomic at look metric

revenue like appreciate question, it. then there. earnings the expecting FX. quarter, for I commentary were I driven largely softer. you guide sounds headwinds it's It at if with from by quarter, the And bit what in my line the some rate and November a guidance February is Got the your it's color second that interest however, your for look actually

pressures P&L specifically, gross are material gross other going like not that saw you And next maybe quarter? that quarter as expecting to want the However, continue improve from I to you margins? shift to into any of benefit more just margins mix the like to this you there confirm even you're seeing areas

some about about pricing I or as as mix we And you to environment. QX abate that expect to XX I Joe, the about a or 'XX, was is think would we of 'XX. We think shift, about benefit basis in talked called factor on there so X just points other out normalize margin. gross as it earlier. think influencing

hyperscale to grow decline to technology Distribution, slightly. the business will expect specific continue we well. High-growth to Hyve

was mix probably itself triangulate the the for trying QX. profile last So of piece to the margin

the just quite to our could, execution I comments. good. businesses fundamentals the on add if of Yes, to of are The

I of an of -- relating buckets you to, think guide so three as from the called think points. perspective, kind And I softer you three earnings

And Number that's discussions. interest far year-to-year. by then X% one in is And Presuming some stable lesser is biggest future, And the euro, into sort base overall overhang. as three in FX factors. a is, the X% third is currency of in guide. a the mix, growth the it's particular, the move those second then we to that there more Hyve

But profiles we're very, in the businesses. of fundamentals very pleased our with the

Our comes Sameer next from RBC. question Kalucha with

Sameer is advanced any chain normalization. more think when as the some expect do if the supply Kalucha wondering provide over can the you Do inventory of there's normalize? calling for was demand from pull This we've color side is happening, chain just forward And partners? on solutions you normalization Ashish I in supply to or you the Sabadra. heard on this here

Yes, you Sameer, question. for your thank

benefited your is, XXX. sales here. well one growth willing in the our Number But the as accounting constant at overall when the ] to I'm all is So for of hopefully, XX% answer as number normalized certainly currency questions a [ couple one backlog things. reduction

bit are insight, that generally backlog you earlier, about seen levels PC profile more to the said businesses serviceability the When and we at I give the think for we as had pre-COVID. a little backlog ecosystem

of some have ] should we to of make categories. with advanced and my pre-COVID elevated And the get ball solutions our actions we profile point time says solutions. still in way the midyear advanced the crystal We're for serviceability by minor [ maybe the that probably majority near sort

we'll runoff QX at be a mid see the do profile. backlog advanced by year, in more that in bit I of hopefully And category. QX, So and a solutions of the

out? hear from any companies partners say, something likely you spending do structural Or being So cloud Got it's do it. term, spends a times. little quick think midterm rationalized is been or looking kind in short on players earlier bit applications, there's thing? carefully their very industry the, in try a X slowdown just We to their have they and to longer? quarters And can a will you in thoughts at follow-up. look than see and Do you X saying Hyve that playing provide rearchitect How more when are think more all that. any companies which you take of more

I more of invent We're Sure, used of value. sharpening. the of business first. create Sameer. start mean it's to trying I'll part and to pencil providing always ways

areas whether So pressure it's feel a competitive growth, whether a and environment. distribution, it's from from environment pricing time just high over will those

center of we we're beyond 'XX But data end-to-end in I provide can thoughts fiscal what seeing fulfillment. think solutions their cloud service majority more is, how the to as just and continue providers relates it to

So that? us we're I upon add continue kind of And to want creates and value margin else new And think seeing us. out. portfolio for Rich, to that of breadth to anything more premium more -- it's play don't ultimately create to that

Yes.

this core thoughts, between to break Just I distribution Hyve. and and want two

the that technology sets deployed offerings when small, cloud, like clients and medium-sized core client customer it's much remember new down its as our through distribution, First the enterprise more on overall. become rest base efficiently towards makes packaged. very more of then is first way gets And

the robust at that segmentation guess look more technology, I the -- are space rates enterprise. customer the SMB the see So because growth maybe around is that you'll evolution versus of cloud, the than my of if we

to sort for beneficial us. should total picture of that be So the relative

if view move feeling to one it the I'd that And you good thoughts time you it our share as if business, we're and is long-term CSPs. Number that know, do you. prospects, we opportunity expanding two with at will, about will. I if and within as mid-teens, will, recall through taking our Hyve have you grow advantage, portfolio, As customer you the the relates just customer services customer hyperscale for And of believe portfolio. of our expansion. really then we will

next Our Suva Citigroup. from comes with question Jim

Can Hyve the there purchasing, Or sustainable? and more detail a why over timing, was And why you profitability just the go about volatility a profitability? in little it the it changes, little true-up? bit isn't

Jim, it's within we discussed which once we out disclosed we settlements quite that Marshall. perform the programs. margin as with in any refinement have given And when perform often Yes, those year this service, the and get do associated some the well, as our in gets or we or prepared throughout cost cycle we margin or recovered. do to Hyve, or comments, plus we programs review, distribution tend those we final close final for

So achieved to QX. recognized. because call as are customers margins we're and agreed receive working that distribution that we meaningful the refining in It a as with happens was we and wanted partners making in and sure to out it well that and

of as the just demonstrate in wanted why visible. It outperformed, to was we it only wasn't So of reason one isn't was QX. that it strength part We those. that, but the

as Hyve, exceptional then, very tough for the continue The strong margin 'XX, itself think was is expect profile about And perform a to I compare will and just well. 'XX Jim, we 'XX. very,

of I think thoughts. a guide, more the share I just provide the Jim, clarity. bit to of the a with Yes. little midpoint When about couple I you overperformance maybe would would

the to on pieces we all, clarity tried talked and is, catch-up of One the provide margin as Hyve. two that. there's Marshall first to So about,

expense. of Second a distribution. business. always Then incredible within expectation over kind the core the is then our interest lumpiness we of overperformed overall [indiscernible] the talk performance our We an about business. sort And -- Hyve of in base in actually

the overperformance, then significant distribution, So in recovery elements, Hyve Hyve, overperformance [indiscernible]. it and would margin expense the be those interest core four the

question earlier Okay. that. talked things or And market and you in PC like then about Q&A, the -- the

disruptions. Just you're is there curious mobile for you from seeing phone importantly, some channel what mobile on mobile and the demand see, most but of phone demand supply How from market, phone? what kind supply were

Yes.

sure make Europe than Europe distribution within channel different are we North to have mobile So everybody understands, phone only. of in America. dynamics The are they

sort of that it's So in theater.

I we demand have anticipate Asian good really rapidly. markets, relative that out of volatility mobile to we some would phone. fully yes, seen for very the some issue supply that, saw tactically We to but say catch of up the

next Cross comes Suisse. from question Our Shannon Credit with

as you see about I'm can wondering, talk -- out end you XXXX, end then you was so wondering what are growth? just and happening, about So many biggest fulfillment. of also can both pockets right? as I And if there's demand as look at the I guess questions talk what's there you demand well from backlog

some So look can the lines, you you the to some I if call, I that point printers. up as strength backlog categories that you go from is we go through catch assume during product of we your you watch mentioned, pandemic. think, But that 'XX. at in on of just basically would if maybe could through

you, Thank Yes. Shannon.

first a see that But we here. fact, the category year, would we data in The were it year, see of sort about from embellish informed would view second actually And this point we had year we a of year more we the to played talking the had in said we of that robust going the year, a market. perspective. run PC. moderating half or a out When entire it had half of envisioned I'm bit last a yesterday. exactly we So the little call that as center

the that challenging as most the a believe Obviously, of PCs market year. will of if a be half the recovery projected, or a we expectation category will first half that there in of be -- the had look with back year, at take the this of most the we vendors had

it's previously premium it in like the And I know systems PC well ecosystem than transitions, worker been. is more had operating profile as different devices that informed as things you're given but the market, well

around And useful net there even more the desktop. of sort life of laptop, which days comments is was these a then prevailing a shorter than is

I me. of those right to think, are anecdotally, All feel things,

half first bit going to slow believe be that PC the do I in the with back a So half. a of it's opportunity in category

we'll and advanced back first And solutions more think then run solutions the moderating in then that to half. I in backlog see half the in a off continue advanced

of those themes we will So that think out. the are play big sort

things Obviously, -- is will the those for thoughts big as the us. this for the But the are based or year reality moves the ebb and economic well. on flow circumstance forward year move

as this -- And of anything. transition, least a nobody then you shift, know it's from service if soon devices will to at it's what infrastructure but can a own and a don't transactional service. talk about somewhat I Pretty

of How purchasing from from a we like through a it's feel are that And pull your out? to perspective? a how versus push you CapEx it a from P&L And still company over should customer perspective the running time? seeing about think But you shift OpEx. do play

Sure.

And start to a let in -- the lot service the as a with service, business, many and also infrastructure. those that that in see meaningful engaged me obviously, see platform on-prem but a is as service space. virtually contracts we're delivered we the relative very, today, are We very have thought. infrastructure meaningful And that of service, and infrastructure as we as material a So with as building. the traditional a

ramping. and So I of developing one see that sort

that arguably -- we years as begun had speaking, as ago. offerings many X device a Candidly service as although those provide well, discussions as

or ramp activities that We We envisioned. it, the right I'll haven't niche more space been participate way it now. -- a call around necessarily the sort of seen monetize that in, has do

than that of will the promise But the with We would play momentum out. has see service one. have one vendors infrastructure the device a as continue two, to right now more say I to to if work

XXXX pull maybe just levers Is that incremental to you then beyond Marshall, down are my is the getting for -- flow? on there cash can levels working inventory last flow. And Great. cash question any there any drive capital

we the to due is Shannon, the our be also then we being billion that last to cash management. us and at comments $X constraints in certainly of 'XX chain piece the that will a working big And think if will component a that. we around earnings do benefit. capital more become supply expect inventory we We plus, decline expect efficient be about itself made flow understand certainly

that many warehouse is the in things parts the U.S., systems. just of still of everyone One we remind have to duplicative

one goodness working inefficiencies efficiency that I ERP, felt made. that these we in some into with comments of comes so as be some And will that integrate capital

about or of the XX-XX it XX-XX of far by other use are big Shannon, Yes, working the rule, one. that. of There away, you it way and to I -- the in But inventory kind is think inventory be is is context the want the the the gained. think if efficiencies to capital some

Northcoast question Keith with from next comes Our Housum Research.

from third in want the lower which that sure expected, recovery for we year, quarter quarter. I the had the this the where just stepping I timing full on you're of back be? Is a fourth guys benefit make margin you to Just offsetting, but of really a Hyve, to difference, than more had it to exactly margin just just kind you'd probably Hyve expect understand

piece Yes, the on Keith, it's outperformance more first timing But within the in year. the strong was Hyve QX.

expected margins. and So better that from than revenue came was better expected

pieces. both [indiscernible]

to rates, interest the entire thinking you year? interest the Marshall, Got it. rate obviously, are the if And to then, go it. continuing Fed. are especially for How up, I of terms in listen you still Got believe,

I'm assuming down think guess, they that change, target your on and does how debt? leverage prioritizing are you payment here go your today. assuming for guidance I interest your is about up, of where the rates based But

XX are Yes, bps Keith, near QX. modeling another in in, we

think working our then if I inaccurate, little million to But elevated, it year. than it's that's come for and So but hopefully, we'll that stay -- that will bit $XX in spoke headwind that around lower and And of starts see the for QX. that in year-on-year. guide then QX. be will modeled to given get we that, half range to down the a cash will I we it second a the think it be efficiencies to, capital flow of benefits, And

then more the I your you'd Okay. that. where first be can -- that like been it to have But one working I exactly where we're benefit flow and you. here. the thinking is it if backlog Obviously, has a gives expect today in for you're for guidance? down here you appreciate at the sneak And you confidence quarter, about in sounds as order

guidance. we that's the in that's flow it's Yes. the the There's early our quarter, different sort order than anticipating were Obviously, materially with nothing of but than view. what

James. with next Raymond question Adam comes Tindle from Our

there? you Adam,

Can me? you hear

Yes, we can now. hear you

Okay. Yes.

you I to with fiscal What First X% adjustments renewed one, reported. on that of 'XX wanted growth? said adjusted accounting and the X% to Marshall, guidance, is in just clarify the FX

we're up as Yes, push now, for Right euro it's probably going QX, somewhat Adam, FX least at lapping about where It's difficult it's year-on-year. a a of will to to think declining because adjusted, constant being X%. currency end figure we go. out

plus minus ], it So as being through $XXX this at [ progress think end will and X $XXX quarter X. or up flat, somewhat million million or X, $XXX we year million I

Yes. adjustments And completely behind now. then the are us XXX

Rich. that at know, currency. outlook, comparison that was about looked constant last I X%. the like-for-like Good I right. growth that All think X% to year, QX in On

PC to any but particular. growth could as a lot So a feeling environment rate you're year, last on confidence give that looking from seeing perspective, January talk the worse plan you how at about relative you XX. here what similar here that time in Maybe us seems a this based especially on just you're have,

Okay.

of So couple things. a

First, when about year-on-year. we QX, was marginally or look down at solutions endpoint our segment think

the think I you tell we As about following. first would the quarter,

-- up. as our before, First, forecast bottoms process talked we've -- this we builds

a and volatile ground. pretty And usually, So we we to visibility. have certainly more what's region a go on to to now as have going the is It usual. on, global feel teams than to country the so environment that good

we obviously, pay to that. So attention

and advanced is marginally think I the as declining well of XX, that January and of growth of segment, would PC solutions our about say segment a the endpoint As specialized contributing businesses solutions theme it. the way sort we growing segment

Rich. last Got it. And one, the just

Americas revenue mentioned upon ERP. synergy completion You of

at to Just quantification come to this, revenue any sort you forward of timing, terms do of think we early going when look do ballpark in that's that synergy or an of to materializes? have What customers? look vendors from

Yes.

of we to over Data in CIS. SAP comments, on all, our XX% Tech moving legacy of first So talked prepared about

rounding, strategic of CIS the XX% X/X in in platform the to the Americas. roughly So our business now is on

now there. So it's that's chunk good in a

in we aren't what have you of prepared will and/or of other as of in if off the we We to as sort think some those grow a of quantification couple we're sales comment complementary that And see to grow start milestones which or relative lanes, it visibility. the and side one We will. more provide to take a were metrics build, that vendors begun, before to which is. throughout move Adam, to the way year. we the But to pass of a

of we'll view regard occurring, But details, that as transactions as sales right And forward. the see I said, moving we to up now, teams, et kind how it see I to are cetera. with product getting real plans, goes speed sales

Our next Luke Bruha Capital [ Ananda with question comes from ].

I there simplistically, on was of QX, bracketing just line I revenue year? could. softer. Just bit a super of EPS totally sort guidance sort if is The right a the And guess, and outlook the couple, Is guide little in for mix Street. the

set sort little inappropriately And so was just maybe as Marshall, with other of are well? think components the What Street it is sounds like of interest you bit a that rates. Or the...

million, for $XXX you expense. $X.XX then to which us, the is QX compare it's about QX interest higher When million to FX for impact $X.XX. And is $XX

at to, discussion contribute largely two compare least the and the those year-on-year. So

to mix commentary distribution, momentum with think momentum. And show of to technology then for on the 'XX, the we outlook And when just those think to high-growth thoughts expect majority into the around our when guided you continue QX. having But way that show continue about consideration, we expect we will had we still, will to Hyve we 'XX. out a we mix infrastructure/Hyve, plays for grow. the take hyperscale tough the But real compare

medium-sized? the you debt the helpful. wouldn't I'm I sort year? you again? get you would about like All active where active M&A with super big the active we And on and get in in because getting guess M&A That's of assuming anything stack But guys are thinking where right. in each other. M&A then in tuck-in And do of are versus you kind might this integration of

Yes. Ananda, thanks for the question.

transaction the is have pipeline and would that the had us a is the stated not strategy. or and you of around we're But to case, a at usually targets prospecting size merger M&A necessarily accelerate our allow I As the that's looking the something forecast. -- that predominantly as looking to on always company radar would of

And so of come sort two in, they categories. in

that. in investment accomplish the The the time so that, first a we allow cloud the capabilities to IP won't we explaining are I And accelerating find right consider being interested Then one, also spend lot would along that in one of traditional us we very way. the that our platform. would if

Europe relates to strategically, consolidated. it obviously, And as interest less then our is

even consolidated. is less Asia Pacific

So in theaters, something were they those to of interest. appear would be

think consistent we how talked we that's with M&A, pretty the So about previously. about what

comes Our next Sheerin Matt question with from Stifel.

questions business? product PCs. pricing year, your of couple across price pricing One, increases saw for a Last We're And solutions Just just on hardware me. terms pressure on flow about the through. your of on and how or other any advanced come memory line PCs, all particularly we categories, does environment. through including component What's that costs hearing your take impact top as in there? and your

thanks Matt, question. Yes, the for

of to return the chain of to those overall I see levels. suggest PC ecosystem, that to pre-COVID in we're pricing profile would returning dynamics the with pre-COVID for sort sort supply So levels going

return believe in And you some, normal. that by earlier, of get forward. My year. mid will pricing I to that PC the happen category, ample we extent may solutions the more shorts, going the within had that to the pricing a longs, going time is, will, PC. is be there to dynamics year that supply to would some limited overall bit last if mentioned for what to that's the activity environment when I But As those but advanced someone ecosystem in view there's there's dictate would that compared suspect

down. commented Just we in Americas the to would endpoint traditional as I one ASPs stability a the back that, first even in point quarter, ball. the there's on time point year-to-year as marginally backdrop with that In speculate the get but still after think up that dynamics crystal that where both were basis, had would it. say Europe, kind QX, would last ASP then a maybe over I actually, But we're lapse of in segment was be there's of QX. solutions well note. my some we I that in in and that of

Okay. ahead you're regarding synergies, plan. then cost And the of

how should of because think ERP Is P&L How we your the about year? implementation? $XX million that more back-end flows You've through got left. loaded this this

efficiency two also correct. complete that in costs half And the in should is with the should ERP around then that of One comes And elements. That's is that go play second 'XX. The expected two then is systems, system-related duplicative the and costs second away. primarily supporting half. to two the through

further call. are concludes today's at There which questions time, no this

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