TD SYNNEX (SNX) 9 Jan 242023 Q4 Earnings call transcript

Ladies and gentlemen, good morning. My name is Abby, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX Fourth Quarter and Full Year Fiscal 2023 Earnings Call. Today's call is being recorded, and all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. At this time, for opening remarks, I would like to pass the call over to Liz Morali, Head of Investor Relations. begin. may you Liz,

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

those financial reports call, our not do Also, to SEC. XX-K our Form will in results non-GAAP and our we uncertainties let in filings as press our of these now the flow reference about securities X-K mentioned discussion of earnings rebroadcast expectations during continue, with over the Before website, forward-looking other earnings from fiscal that our projections related predictions, differ demand, well may We release and Relations result our in non-GAAP not results are and federal update information. Reconciliations statements. this remind GAAP and included any to intend events. today periods. Actual statements within other meaning the statements statements Investor SYNNEX cash risks about laws, today's future we is as the This recorded may of release, conference available to call contains section be me Rich. or on Rich? the Form of the for discussed will a as and and Form Factors call estimates, forward-looking we X-K filed forward-looking return materially or future Risk permission. I today's in including shareholder property of and turn the ir.tdsynnex.com. you the TD without statements Including certain in

dynamic billings enabled continued quarter a conditions. outlook today. Good results, thank significant end of and despite We fourth our market solid business execution joining at EPS Liz. for high and us everyone, morning, beat plan our the you, the Thank with of by the gross range delivered you

improvement healthy emphasis signs the us areas, gross billings growth, stabilization we with in pivot in broad on allowed saw and high-growth coupled fourth of areas to portfolio, strategic margin-accretive revenue technology sequential and our technology with to quarter. of Our

environment, fiscal and our growing and full and the business Americas of share through navigated shift business of market full to the expanding high-growth our increasing merger execution margin our For mix synergies. combination of mix a technologies in year, both we operating non-GAAP X.XX% successfully Europe,

Our capital and enabled us generate supply business billion, chain of flow healthier our model, free improved target. original of billion working management cash $X conditions ahead to robust $X.X

share our we we In XX% this, and flow $XXX million of million capital opportunistically or through as From X% repurchased of free of for approximately over shares outstanding. XX% our repurchases, target to increased share approximately shares, exceeded X.X This returned year. shareholders our we cash repurchases. representing dividends the total,

the in Marshall returning dividend a discuss, and a priority quarter. shareholders. to also our drive for top we the share, to for are capital As further prior QX increase increasing will allocation compared as quarterly our to and $X.XX strategy value or XX% we continues execute capital Balanced shareholders per our be company to

end gross of From our expectations, improving Endpoint Solutions. quarter at high our perspective, the out fourth to on Moving played in results. a with the declines fiscal year-over-year quarter billings

Advanced levels. Solutions backlog expected, record strong As enabled 'XX basis given by a performance in on the FY declined slightly year-over-year

of improved Solutions. Europe environment. the to show continue market In muted stabilization, in year-over-year performed regional sequentially to offset Americas Endpoint some we a From demand. a in perspective, in environment portfolio APJ, build-out, the declines than macroeconomic helping improving despite better softness the endpoint traction continued in with see to signs and our of expected

the Meta, additions, exclusive new business we We via for suite are where including Workday distributor made on efforts American excellent of portfolio our our progress strengthen North strategic their products. vendor end-to-end and to new

Alto Palo our our key in and the addition expanded Networks' full security, software portfolio products cyber also of in our one Europe, to region. with of offerings security range We of priorities, hardware the

portfolio is increasingly as pipeline comprised multivendor our offerings. strong important of vendors bundled bolstering X,XXX are even which new of best-in-class over of vendors, something solutions becoming IT Our is more

our quarter, technical we solutions the by on our software launched North program independent aggregation, their to and vendors grow all is acceleration As marketing sales extensive part designed our which of to of during sizes help focus in ISV resources. accessing America, ecosystem, businesses expertise,

globe, honored including and We American of several Year vendors the the variety Global spanning awards with recognized be by were North being Distribution Palo Networks. to also Partner a of named by Alto the

our to distinctions strive their continue grow and businesses. partners our We to offerings these are help proud elevating of

and the the benchmark Corporate during corporate related leading in consecutive Our we Equality initiatives second score LGBTQ+ and year, achieved survey center ESG workplace goals a measuring fiscal policies report top and remained recently Index, to front equality. our and

insights the our disability signing to In my our regarding initiatives in progress We're ESG company Inc] through Citizenship of which of in year. plan letter. addition, at Report, we first second the to formalized additional the we looking forward commitment to our Corporate inclusion in half will CEO sharing [Disability publish

Chief our SYNNEX. regarding a Officer Patrick our I for assumed more Last executive announced As fiscal Operating bit year, we recently color Zammit changes organization. for week, begin new wanted TD provide the role the to of

drive shareholders. us partners identifying focus executing responsibility also to to to initiatives, accelerating and me operations, on external COO, and will including our leading and strategic relationships our leading As technologies. in by focusing strategy This strategic allowing across key growth growth to day-to-day report opportunities on continues with distribution additional takes vendors, further and benefit for me the the further profitable our business on company penetration our Patrick stakeholders

in the TD President, effective well him moment past very decided next to we like efforts and his also the company team has thank chapter. delivered years. take in a integration Americas, Michael career who in successful I'd leave to X his and to SYNNEX Urban, the X over March for a together his merger He wish Americas, bringing

the the Larocque veterans, in Peter all of From a Otavio continued North position regional Lazarini leadership APJ, announcing we European a next the we market very future. XXXX leader skilled America, IT Malhotra in this highly our to experienced gradually dynamics. Jaideep With and on Latin entered perspective, capitalize and forward improving look America to strong we are in well spending team, long-time positioned with in in and industry near

year our fueled year-on-year continue on by we forward Endpoint are will several recovery outlook fiscal abate we that given indications the progresses. gradual build move past the Solutions headwinds strong the XXXX, Advanced resumption be of as market half in Early Looking for returning on have the PC throughout over Solutions will tougher are quarters the that growth year, the overall compares experienced the to for the balanced will optimistic normalized year. in XXXX, more us but of the buying Marshall this growth position This patterns. through we elaborate for will later. to as well by first should

As we our areas about and think platform advancements FY want in AI. 'XX, capability of priorities touch for our on a strategic are couple I digital of to importance

access this, out with platform do customers one-stop-shop we multi-vendor our our As users a to provide overall the represent greater capabilities aim require. these services to industry, critical can unified augmenting solutions their help for the To digital areas software that will offerings. continue where with investing to and the end focused the and easily on customers assemble a remain portion in in continue IT building we capabilities they of spending

we clear is in look AI another growth continue industry. to vector our as ahead

in this of for have and experience space our market for in We opportunity. us our a created strategy, decade-plus this practice. exciting invested several new This data analytics to years in leadership puts data relative AI our via foundation position the analytics

in We Many software off-prem have have area of in our train of or leading vendor lines, with vendors working announced a capabilities we with on-prem AI required accelerate industry cases the models. use ecosystem. starting the our infrastructure run and built models their to for released across leading are AI and AI development embedded state-of-the-art foundational to portfolio, leaders providers and product

In with the AI-enabled suppliers key growth OEMs to as enable with introduction customers. component time well and over strong and as relationships support PC addition, leverage will relationships our and we of PCs our

to AI-enabled Microsoft launched where Destination our partnering program, the we as for ecosystem, others month. such AI XXX addition global copilot last In we are our in Microsoft, with previously a journey announced with collaboration

We sets. product strategic framework to AI vendors accelerate Destination on new other several of working to are our AI capitalize use with the also adoption and

In IT believe ever-changing right are we and closing, landscape while we capitalize on the the to well have strategy emerging equipped opportunities. navigating growth continue ourselves new and positioning to

keen to continuing capital shareholder to and a returns. are create We focus on healthy with value execution committed

take every to details can work. I important will great my performance so XX,XXX who to call our on Lastly, the moment customers are outcomes coworkers and to he turn I privileged our this a vendors technology we additional over want and that Marshall to our world thanks sincere outlook. day to to and enable achieve help who around with Marshall? now the financial extend provide

Rich, morning everyone on today's call. and Thanks, to good

results Our the positioning AI. security, in we've portfolio cloud, progress a high-growth and made fiscal in as the the of of and power year technology business full 'XX our broad model, data leader illustrate ourselves technologies analytics

products, to reductions reduced revenue, flow we for and industry-wide full both PC cost Advanced pressure businesses model The business return to our and enabled changes appropriately cash our helped for of market margins offset strength technologies Solutions due ecosystem shareholders. our mix. and gross high-growth acting a generation capital the volume in the some align environment and Despite demonstrated demand and the and our free significant of in by to This continued year. from operating challenging resiliency to grew responded the across

fiscal our fourth to Moving quarter performance.

we of when IT Advanced saw strong in year-on-year importantly, mentioned, signs given in the stabilization faced QX, had backlog compares tougher strong levels Solutions. last declines Rich lesser Endpoint spending billings in As were elevated. performance Solutions year, still with and gross early

of and down billings to X% range. were than revenue billion, end down Fiscal and and of a range, midpoint by outperformance the $XX.X gross outlook customer adjustments were a driven QX net mix the in larger migration a stabilization of Americas in shift billion, to consignment due Gross outlook to high our Europe. Net total Hyve the business was revenue our model. at XX% the near and $XX.X year-over-year in expected year-over-year,

this components As a certain procurement to due migration is to model. a customer-owned transitioning reminder,

operating our profit. While this not impact materially does revenue, impact negative to has a it net

negatively fourth impacted revenue the quarter, net For this $XXX million. fiscal by change

basis quarter both year-over-year, continued and and $X.XX Non-GAAP positive mix the which the of and as we represent to more in to was was continue richer product a of gross up see billings for margin effects total gross expanding gross the year. X.XX%, progress XX% profit technologies, non-GAAP than billion, high-growth full XX points our

approximately billings gross $XXX and up in million million, operating expense was which given non-GAAP $XXX of million, quarter-over-quarter, billion. was SG&A Non-GAAP $XX $X interest margin sequential was million adjusted the Non-GAAP X%. and was year-over-year Total income expense XX%, $XX of regions. up operating expected finance growth within million charges our approximately the our and non-GAAP was were rate and forecast than tax $X $XX certain flat effective The quarter-over-quarter. approximately our better of XX%, million, to better than business due primarily mix outlook

income to performance a combination and end above diluted non-GAAP repurchases. well million, profitability, share and taxes, high Total $X.XX, billings, guidance higher was non-GAAP of of as was better-than-expected $X.XX gross the due net our on interest $XXX expense as EPS range,

$X.XX, quarter [Hyve] for $X.XX the EPS fourth in reminder, fourth year fiscal the of of for quarter 'XX As year-over-year EPS margin fiscal by comparison was recoveries diluted impacted a 'XX. of is non-GAAP but

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

prior ratio. Our with our inventories totaled net approaching of $XX.X the receivable and leverage billion billion, Accounts credit from and Xx target was investment-grade our billion, in line gross quarter. down in $X.X $X.X billion the And rating ratio was leverage leverage X.Xx, in totaled prior from $X.X gross up X.Xx, quarter.

at net quarter, capital free operations the was target from working billion generated approximately and ahead in 'XX. $X.X $XXX QX. in flow and fourth million. flat $X.X both guided 'XX, we in beginning cash to cash was Cash fiscal fiscal was of the of cash XX total, billion, the the flow free we $XXX conversion the For $X was from million, billion cycle days, quarter In

million $XXX dividend returned and We including million $XX share through to $XXX quarter, repurchases million shareholders the in payments. via

our in fiscal million share million We through to $XXX million the For million under repurchases, which to approximately share full $XXX $XXX of currently returned $XXX we was compared 'XX. have authorization. shareholders, fiscal year, repurchase remaining

close stockholders of approved the current of our per as and the record quarter, has Directors XXXX. to For common which payable on January business of to XX% will increase a cash Board $X.XX XXXX share, XX, our be of on XX, dividend January

our quarter. to outlook first now Moving for fiscal

billion of a at $XX billion, on We representing midpoint. expect year-over-year decline to the $XX basis a X% gross of billings

the billion, year-over-year to revenue the X% total of on expect range We a be a $XX.X billion to decline of representing in at $XX midpoint. basis

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

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

Solutions. net profit PCs, will provide to billings, clarity providing we and peripherals, and disclosures Additionally, and next other I devices, will effective revenue investors fiscal for Advanced Solutions, enhance networking, we Solutions, more some Advanced other to in previously servers, will wanted will Solutions print, we include quarter, cloud, to highlight mobile, our infrastructure, Starting including referred begin regarding Solutions our that stakeholders. storage include gross which Endpoint additional hyperscale reporting Edge software. Edge gross and AR/VR. to and as QX,

based Our APJ. and of to Europe on Americas, continue will reportable segments be geographies

currently As second the in in approximately the fiscal expect mid- of be year, about half we year-over-year high-single-digits the fiscal first fiscal year gross year. growth of to to the we of billings the think full XXXX, for half expected with flat non-GAAP

capital free opportunistic dividends returning target committed the market remaining year expect repurchases $X.X medium-term XX% We cash our cash to generate share for to while to both on billion of and remain via allocation approximately and flow free flow in shareholders fiscal conditions. depending

closing, robust generation positioned continued margin flow focus with well to in commitment healthy fiscal In 'XX return and the cash we returns. successfully and on 'XX in expansion, capitalize are a to a conditions to navigated market fiscal volatile shareholder free growth a on

Operator? that, we ready are With now your to questions. take

question And with from take [Operator first UBS. our will we Instructions] David Vogt

So of maybe for both you. a just question

kind of you're In half the an of a more IT sort of Solutions, fiscal Advanced position thinking we you to a thinking thinking outlook. that about you're talk your the think level, of perspective, and commentary broader category on spending of terms the understand second kind bit appreciate how about pattern grow I Edge from new us help would assume you spending Can want how from about you're help little gross what's embedded at in the half. how about a Whether higher Solutions 'XX, it's and to underpinning kind first backdrop? kind us market faster the billings about or and it market? can you sort than the of your your color for ability an maybe of

if that's So start there, maybe we'll okay. just

David, good the question. morning, and thanks This Yes. is for Rich.

of back COVID, time, backlog ecosystem end really set of products evolution the about back about significant pent-up PC demand then think there obviously, at into the a same time, year Advanced pretty last decline. and end this the you throughout products. If of was At and for on the Solutions -- -- COVID, went

an into you So fiscal, as the come we compare easier this PC ecosystem. within have

a You compare in difficult in the cycles because Advanced have of Solutions that the the past. had more transpired

of but ecosystem, that of more level is a some Then the our when think back view of year, of growth will get what second in face us there high-single-digit both mid-, have the in about of Solutions So guide the wraps, when most if we believe has and major the half half have bit first first to will compare. will, half will And we that PC a be the to point flattish of led growth with of we challenging the those in the that's half. Advanced of segments the that kind concluded attributes. you

of the yes, it's do than course, better to always intention And our market.

I'm well theater had sorry, in theater that share. fact, the some as In theater as we America market as remarks, -- European well gained Americas in the we talked the prepared as the North about

know add. don't if anything to I Marshall, So have you

for do our X full from perspective. color. quarter David, fiscal at some it a and we for assessment we 'XX, bottoms-up come more Yes, just When the

the business in, their that it leaders territory. all about of think those countries one is for looked So for what we each do at that

So within well there's there's data, as comparison where a customer a a that, we as, and country it assessment. certainly land. And should third-party industry to triangulate vendor call just

And overall by then our what the that Richard then what to of with as we ability like GDP looks look GDP, that. at the certainly be that, expected spend IT correlation to market, outgrow and said, to relative is trajectory

outlook prepared a should or remarks, a to would business, that how the ask a about In factored just is the on cetera, OEMs, next makers, lot talked the guess? year and by across X? that, I AI or imagine follow-up? et year, And endpoint into contributor I AI the you edge we obviously, How there's I let's the about this say, that I your being can market. business. mean, of let's solution chip over -- And discussion extensively say, think

see on year AI latter kind half would from that You'll the get to at I of, through kind I of just guess, an perspective. think 'XX, should shapes love the XXXX, stuff you say. calendar how thoughts your of I

Yes.

cloud or a So David, analogy an would use I as parallel here.

clearly, a lot a gap market. a are reality benefits, the to through real of of flow lot at obviously, curve So it hype this front think and is the IDC hype the the it the but there of plans technology where I -- fanfare, until starts the marketing a was a the to there's going bit that's call calls bring or and end, defined

be existing of From offerings. embedded perspective, AI in an lot a AI there will

was to in of a the on capabilities. the to comprehensive will there discussion there's fairly What be cloud there day. AI new AI how as is sure back I'm AI et Certainly, So count servers, mind cetera. comes to be going emergence

in that AI-enabled. there certainly, right So now, are are market products

there'll through and move more more. time, we be As more and

AI the expectation demand it's We of indicated, our more have ramp, will into time. had early with more of forecast the we But through incorporated for that you full thoughts be as move as robust year. the an there

is of that would might that market dollars believe Every top thing reality expansion, and to IT provides just a customers is might envelope. I planned isn't moving this this but They incremental that just be on an what AI. Now there be that you on-top won't spend IT whatever that their been on other company spending only budgeted complete an is, sort there the is decide tell but the reprioritization be prior that a have lives some to within will some envelope how happens relative new forward. segment I rather, increment,

So will effect positive a increment. IT but growth, won't think, it yes, complete be it I on have a again,

with Colicchio We our Research. question Vince will next take Barrington from

share this Yes, Rich, geographies you how in quarter? curious position think your your all performed

Yes.

about reported when As There that is we past, and is we insights emerging yet. America had relative service have Europe, really the North but in a to have visibility really don't we good we share, think in Europe.

share relates you a on share, year. would aggregated the it market of while As grown for [X.X%], information basis, will, if lost [tenth we the couple quarter, our to the full having say of]

Solutions could provide on in you throughout And year? improvement you more the a of Endpoint what continued gives bit then color the confidence

Yes.

working very our comprehensive own indicators growth process And some within through, go to fact, teams forward are the customers, we growth we talked our anticipate with in Marshall the talking we guide, Endpoint. that in will about vendors, see within QX our as Endpoint. moving that So in

about good feel we So that.

moderating commentary Advanced a the earlier. on provided in based that have I we While situation Solutions

suppose? Endpoint, When you're you talk in about about I sequential, talking growth

No, year-on-year.

Oh, really? hear. good to That's

America. from Bhattacharya question Ruplu Bank of next our take with We'll

mix thanks on My congrats new more for on you giving more the And was to of shift a guidance? embedded I think about year-on-year guidance in billings. Specifically, this if Patrick little margins should fiscal revenues items? year down your wondering about to how you talk to we bit fiscal if netted role. the 'XX. can this And XQ what and can about is talk for impact impact

this this shift difference throughout gross year? as between So the to revenue to continue expect billings and should happens, we expand

Thanks for the question, Ruplu.

we QX, on billings, gross of for net So a X%. think, gave guidance around X% I down around

terms that. if in to the Ruplu, XX% I into XX% you that would about versus want 'XX. of gone it anticipate fiscal 'XX. continue call gross 'XX. It's call overall if beyond hard net has of think That to in So will -- that to XX% first the XX% We were revenue to now to you netted around in I relationships. probably momentum, down quarter

But behavior-wise. there increased year is of I would versus think AS gross the just around or played say that AS, quite It's shift expected possible, we're it's and mix [fixed] how stabilization of reflection be next given has us, of a as a against we the performance ES, for net, what about maybe that XX%. shift a seeing may

Our forecast of both of that growth there comes a AS. year, and more kind been then in takes seat. the AS balanced for ES and is predominant into a terms in in be rates the thoughts backseat, front the takes and there's could past, ES growth, Whereas a as we get and

about I to the like. you million expects with One prepared Hyve. for customer. call profit. behavior, We're program the out impact expecting to So about adjustment impact That a what looks the that on volume consignment for to thing this in no along, continuing was plot And the we'll all this then as consignment 'XX. revenue, just remarks per that million a as that net inform program quarter. had use $XXX $XXX XX% to related to in XX% we on That was be would Hyve

Okay, Marshall.

billion. $X.X the return returns you ask, if follow-up, reinvestment in cash the of shareholder guided my and XX% maintained business. XX% free to can for Just And I you flow

now further So complete you large your M&A? any about that thoughts in how there? XX%, thinking So with M&A, now North is time organic when versus America? So that X the we investments reinvestment, think for are or is more less it integration companies about now

the for This you question. Rich. is thank Ruplu,

over capital way FY for continuum. we when his as weighted know, the and or talk think, total. the were, about return heavier talked be in periods allocation where our XX% about XX% X shareholder Marshall we could at Obviously, you 'XX prepared it's and to we're There remarks, in XX%-ish strategy, So I other.

So we acquisition that a a continue Those recipient have as and we of certainly, pipeline of targets kind look we deals plot the have to years, willing to through at work. have the targets on And end, our look for we to and take acquisition make and at other got they've those want us. to a really work strategy. complement usually, sure that they

would So again, you XX-XX going And that forward, is to way always think I it. as go good don't of the sort tell about a exactly things planned.

course adjust the we circumstance. required on as So based

you Marshall, So anything add? to have

to X just Yes, out. Ruplu, other thing call

you related call or SG&A about quarter it, incremental I'll There little our to, investment. a think spot. X is reinvestment If bit continued

Specifically in AS.

not going we're soften softens, our AS to As investment.

could little there front half bit a heavier So be 'XX. of SG&A of a in the

as appear let So there's an a relationship may to it know that very thought in but gross on imbalance well of that wanted out. basis, you to I if R] billing just [E it's

we believe to -- has half, forecasted get we opportunity second AS opportunity As the an into recover. as

next And Goldman we Michael Ng will take from Sachs. with our question

year? about way Marshall, SG&A you point just the very throughout could follow-up. think how SG&A a a you the then help us much I just made. think to that? the And right follow-up X.XX% X.XX% questions. Is to maybe evolves just have And you billings of for on maybe quick still just Thank that the about

Sure.

X% relation X%. should, gross Mike. to should of billings. or portfolio the to expectation down in and X.XX% start out call range X.XX% that right the it build quarter below It's X, come to in in You're something help growth incrementally ratably that We'll structure we'll and the been around has right,

I SG&A about couple the the was a AS If X. relationships, One year-over-year on things. investment. X There's is think of quarter for X

news somewhat in the this going we The year, it's we're number our last performance the hit to started decline This see pay. assuming variable already of to our and had down is subtle, it. provisions time started grow some and year, the step we're good around other to thing, although

bit variable pay quarter of So X. with there's a and little bonus heavier associated

is other from is a the FX perspective itself euro thing The actual up.

million we And So $XX of another on that's headwind to that. made. be is million believe that finally, AS we've -- on on the is SG&A investment about $XX important stated to investment that then

be and So we think a that We 'XX, X% that top we end to probably the that we're the we play should as fiscal quarter quarter. see out feel in going it for is improve position. strong by

Great. of very around preview narrative the segments we near that midterm? a I potential about the gross was new those may said those wondering revelations give the tighten to you of disclosures Does of the bit could out by That's up kind and And was well. some for Marshall. growth of disclosures. if I encouraging as outlook have around as the and in us little clear, margin think, profit it just revenue hear new you billings, product segment you give a

a have But the AS think margin just be us specific. Yes, and for response ES. attributes to allows as -- Rich attributes. about more I and it that, of spoken to I general the spoken Mike, to We've growth

upcoming that And is of is think quarter contributor. help right? what the of the our business, do a are and clarity the do for We quarter. it the an the the think, just the for the value margin that actual think it the we can performance inform I actual gross performance margins enhancer. We thoughts the and think we the speak drive believe or will to it helps I -- profit portfolio, So mix, revelations better within the understanding

Yes.

print. think in that call is forward. in and will all add of to correct to you going I always we the point ask provide segment. segments, Just there the clarity view segmentation the relative to definitive for that, what out the the is I put think generally, fairly narrative see But insights my in We of directionally around sort talk the this you'll about

to And how out. we to how point get we that insight good you the time second at guys then lay it business think guys is make, the Michael, about Every are that you and models, relative are an modeling. I relative you impressed pretty would

Great. incremental appreciate for it, Marshall. Well, the I thank Rich transparency. you and

our take Valero will we Alek And Loop next from with question Capital.

for in Ananda Subbing today.

can is, So guys you our they believe my gen work from do in become that Hyve server be? involved builds? may that question We've AI heard

that? sorry, bit. broke I'm up you repeat a little can You

My you in AI guys question believe builds? gen can was, that involved do server become sure. Hyve For

we type [ODM] do Hyve Yes. will segment an absolutely. Remember If of the question the is big server AI Hyve business. of participate in builds, that believe is

up we participating expectation end full we so in forward. AI certainly, have building builds that And the And we our moving what interest in. will customers have be

Awesome, awesome.

So what what spending as if than and than have touch seasonality? quick May are can softer seasonality -- you a you And typical from softer February maybe PC key quarters? were may expect what Or on anticipated? areas in follow-up, you

I may. Yes,

to As prepared for is, most were it -- part, the and -- the the I is QX relates surprise consistent sales expectations. the this with remarks in guess, our pleasant

a talked it bit a Marshall expectation, maybe little different. versus but about think better in I our -- some overwhelmingly Europe strength wasn't little bit

they in each the of for segments, sort fairly expectation. consistent of came then our And with

through time as year. as anticipate of through move a dissipated, move compare year ahead, backlog AS, had runoff last had little you would sort the we we gets will, in year-on-year. talked year, more as the through easier the a if challenging of backlog compare that we about, And then we As because of bit the sort

that say Advanced as in the our half Endpoint our segments ball so would second year, both But both would be of next well segment. of expectation. those growing the are And the again, as crystal that

Awesome. Really appreciate it.

will our Raymond Tindle we from with And Adam James. next question take

the income non-GAAP trends during X%, Okay. just with business that overall. finished synergies the fiscal and over 'XX just I wanted on year. net ask to think, for on down, executed observing I you you dollars profit And

income I think may if XX%. helping the first that, ex And close digits. to at going little And net would the your it like down looks I some half for you've like be it looks income the year. So on cost that non-GAAP net got in is be bit guidance, based double a of look to down QX, midpoint optimization

of north ex that. probably So XX%,

were of on touch declines, Or that's growth? is in these optimization seeing want the aspect you are that a to the that just the drivers kind income this you ground that? that for on maybe double-digit just to structural stake on could trend return investors at net and of causing on put So business are point, that a to think there you whether working and timing that

is Marshall. Adam, this I'll start.

So I'll just on our growth the quarter revenue expectations attributes X. about showing comment positive made on the first take in attributes it overall we and ES

And that in So profile. profile terms for AS We with gross margin think is that XX probably than bps. X. -- of somewhat mix, about a out we the quarter profile plays margin margin that's that think just comes the lower

about and X. And see touch some we X. then identified had was started we last beginning some that just that if mismatches -- X I on the our to fall. in on attributes the Quarter of cost the of quarter seen thinking earlier We point where quarter and business I commented of X kind had inefficient volumes year mismatch

reduction better now recoup opportunities. that time And going of in throughout cost cost into additional expectation going quarter of So the year. these some terms I of inflated we be as into we're We X, said end by overall we the there towards performance some got kind were year. net to back headwinds growing the is able a this took to in earlier, that

variable to the We going. given had year. of So expectations with down last take started that, pay filling our for already we where was versus attributes variable we're thought business those kind

into we're leaning again, investment, said as then I And the AS earlier, those.

that. bit associated little driving maybe with a headwinds higher cost of there's on So which some margin is the that,

So But have you last little around health of a are couple as seen X in a bit to productivities past, may to some of tail that. out a we I the inflationary care. take quarters to on get inflationary seeing where areas longer It offset be the of probably we think figure might ways the create there.

margin are the the compare more of bit. It's mix that the I margin course of of But is I of ES, think think intentions about believe AS of perspective. that attributes think these from a do I itself X grow to if itself both little story year. causing the change and and SG&A portfolio we some over can those the the elements quarter little some a in our bit attributes are still So margin we actually difficult profile a

it. Got

Okay.

So maybe just to on follow that. up

high-single-digits half, back kind mid- with helped first to You the for gross year, of the flat the in it's half. billings

why overall Would that at not? it given gross for be a billings gross Let's would of simple. it level mid-single-digit just year call everything -- billings in growth why similar mentioned there, growth net or the to growth? keep you just income And in non-GAAP

that to be to income hopefully is non-GAAP and said, will roughly gross profit be mean, op expectation will up. flat I up our flat Yes.

it as profile So out be the as see expect expectation. growth range. that mid- half plays how We'll again, second we that's -- to that we high-single-digit in to have to

Yes.

work the say we've to that need the there's improve is XX figure that repetitive. take faced. just had upon. happens, on I Adam, The a the mix point 'XX, to back look or held that that maybe able that a to as out we despite been margin we're when shifts hold think, bit more we at we've probably Endpoint. through for And I would revenue fact work said, declines be to to and to Marshall of as how now got that headwind op the basis that reasonably that FY income we a you proud thing

we improvement So the but focus some have forward, how will drive of going on engine work eye have forward. execution do and our we do we kind of on it, moving to kind

Okay. just Rich. follow-up, And a quick maybe

fiscal were magnitude update last it into and 'XX. maybe consignment. Hyve any visibility You -- you was that about us talked that? ramp about on expecting call, a in of But new on the think Could you give I lot timing and talked you that the customer a

Yes.

a that delayed customer of we're little was but the So things, to we ramp anticipate just go fully due timing forward. moving bit to clear

Okay.

we sense a of magnitude yet? on And do and so it timing you -- do have

a begin quarter Timing, X. probably we should the show in think itself more and quarter in little bit X ramp

to. it speak So us to will for meaningful hopefully, enough be point, at that

We'll take our next question from George Wang with Barclays.

Richard, in the ramp. the PCs. AI line especially Marshall, double-click of and cadence I want kind terms to just have a just of time for just question the on I the just

share, from chip the your OEM a color of Just curious heard bunch any from we and perspective? kind more And to just if makers. the kind you have of also

to better the -- wave, kind Just specification PC they if will? contribute AI curious, to you of what so can you disclose

the I a will in question. fiscal would it band Obviously, have, say. Thanks year the going indications Yes. of anticipate that of premium the forward new it's or at X we sort be end for high should technology coming, coming price as the in. All

All in a and entire says of of we becoming intelligence that PC that will then, the more 'XX. of total meaningful and it 'XX FY have FY into be think, single-digit percent the sort population, of then I

half sort best So PC after back volume great of total year is percent growing of and ball Kind that. mid-single-digit going the of crystal opportunity forward. estimate meaningfully of then

me. That's Great. from it Okay.

JPMorgan. We will take our question Cardoso next Joseph from with

Just X of some for me. wanted I to the on just questions. AS piggyback

elaborate as largely can some you're just particular of the then as more you any back is it's your in your And think any across worse year-to-year as concentrated or you then to about there days second on those ago? servers, you well that XX a just like of thinking trending the curious to just the are categories First, expectations. that Or if more And product one? just trends relative declines these the part clarify across of specifically, product half, in you broad-based AS categories? And better were the question, recovery that others? a in networking with seeing line expectations can if are

good the thank you for and question. Joe, morning,

recovered emerged I from what backlogs that demand And of point think storage carried into recovered think at So how sort perspective, about backlog bit. increment and I talk this compare that's the last their about grown about And year-on-year I the its little a -- and the is underlying technologies with had of is when is then have I pretty my year, to all view of the think when last server good. numbers later that come that year. networking the lead distorts backlog I inevitably to because how the it had earlier. And from across way would these of think the these technologies

recovery when than earlier so on about basis, longer I will networking of And the time hanging and because I backlog for later a think be storage the year-to-year in around emerged that think period a cycle. of server

our to when each have think had attributes. we earlier we categories half back As that least we the of of these then at expectation. get stated year, growth should the That's

I Thanks, the makes sense. all Rich. No, appreciate color.

with take Housum will Research. from question we Keith And Northcoast our next

guess you, the you are how ERP [indiscernible], baked were for the revenue as expect synergies Question And anticipated year, I proceeding expected? to of that is throughout from integrations. those the that those guys the into your rest you up guidance? ramp

and that to We everything well. anticipate So our customers. Keith, meaningful proceeding I Yes, our see hope we're start as think with think When going anything add, hopefully we believe it the we have to about we is our expectations. be to our year. we've with ramp to they're consistent cross-sell relative baked opportunities about year into would of this progress kind the that back half of guide the Do fundamentally Marshall? meaningful really up that opportunity a you guide, will in and bit more

No.

when -- cycle if it the that and have wrong. competitors? competitive out I services announced And your from and or versus if the could you perhaps an acquisition please touch me now, life Is [diversion]? of advantage company. business largest Cokeva, appears actually was Perhaps making think I X, or past week a that you about talk guess, strategy competitor strategy investment the just But recently. that a more quick, opportunistic I it. I your got there's believe on correct I it name Appreciate real get of over the

of with first are acquisition. that capabilities all, about let's the offered So primary talk the

are customers as and footprint, that doing. And piece in also of we around more offers will vendors square grow But regard. is repair it which services solid those and test quite integration well. us do businesses And with for XXX,XXX been today. assisting us real foot we demand, those which to that certainly to our allow connect we a obviously, a see And we and First estate, demand business. our like a We then relative they've encouraging really, to in vendors, good participate refurbishment. the for well

sustainability to for segment comes front refurb the types things, is like more The other and as focus on I'd think these center. there's thing forward you about of moving especially

So become tries if the as world bit revival around to sustainable. sort of, of we also see more will, you refurb a a

relative that So an on forward think focus. ticker we businesses of going to that be extra based moving to there's these types

Capital with RBC And take we'll Ashish Sabadra Markets. from last our question

the There should of half well around near about near-term we was as term, that for lot volatility, the how growth half talk the AS for solution that midterm over discussion 'XX. get you and was we of if some AS as midterm? about first think wondering a the as I second of business the profile can through both dynamics But margin

Yes.

you can start, I'll chime Rich, in. So and

is do we rely determined. But relationships We as or their we to somewhat how we our for quite forecast, that half. rate, AS, to return about still high-single-digit second backlog do 'XX, have to in and portfolios, grow. at low- made out we the the growth year-on-year think that as for fiscal -- and prepared remarks, country momentum would and determine comparative growth same be think best play going performing build leaders level the as the in we'll think to out we or see think still of some comments sequential X. as look to on in But that I ratability AS we that's a of back we're -- a rest we I standpoint to both figure our a we comparison of it be thinking about about the to that in to also AS So expect call range make bit quarter AS. from how at up mid-single-digit said The had will ES that difficult our a it

the for there acceleration see at a like -- clarify, let's years, over like right to X Or in that when next think that say, profile? we -- is high- growth could growth that the we just further Maybe is about single-digit midterm? the AS mid- to exiting 'XX,

Yes.

made and we retain grow around near AS, we what and sets to guidance 'XX and and skill So or we don't how the Certainly, in into beyond to those gave, provide thoughts we the and our go important back the like term lean doing initiatives what to position how those. thoughts is investments and strategic SG&A our 'XX. it we it about we're commentary looks

we So that we're can that commentary, much market terms in not space. certainly confident of more what the in provide But like. beyond looks

I aspiration Marshall's to is comments I would the Yes. always we an to have thing guess market. the faster only add a that grow bit than

I of expectations. to And had kind think 'XX history that would is we type that that would the we that execute expectation aspire relative pursuit. above successful and market market been that to bit little a say of growth would with whatever we characterize above and 'XX --

Have think can year And very from 'XX. year big decline, I question. headwind last headwinds a about the to maybe color. way or PC total was fiscal That's revenue the is in quantified year? in ask clarifying a the PC decline fiscal obviously, a there 'XX you helpful if

ecosystem, the So a our decline It was a contributor negative to PC in revenue specific clearly portfolio. overall in the number, no.

'XX sit back If had I its meaningful and in think So about and think AS through 'XX its and AS, in ES halfway it moment and a 'XX. impact. ES did some moment have and had 'XX

certain the view differently when time have to of attributes our portfolio aspects that are complementary is up. diverse AS could us. But balanced happy benefit certain of and we're we think, time. to what from benefits of So card, line And portfolio. ES allows we've I a have and got really the certain behave But large down a be broad such yes, that aspects us

Yes.

business. way segments last major had we a are about the is, Those and AS declined. ES this had of thinking year, our X Just knew grown of

close if you change in the at revenue So probably take you year-on-year, the it's getting net answer. a to look

That's color. very helpful

call ladies remarks. I for Rich turn you, the now closing will Hume back and gentlemen, Mr. to Thank

we the as we've very vendors very time around With today. all that, in with the what proud played table 'XX Well, out our than anticipated world to this thanks, are call different year. I'm and challenging relationships our proud last and I'm stakeholders, this thanks had the our That my FY for we everyone, certainly you said, a anticipated. accomplished. being of our of job a They and participating than around more had day. primary our XX,XXX coworkers doing great wish in congratulations I great all executing customers. environment for sat

your today's you for call, and participation. that And ladies thank and concludes gentlemen, we

You may now disconnect.