TD SYNNEX Q2 Profit Dips Amid Revenue Decline

TL;DR

**SNX is struggling with declining revenue and profit, signaling a tough IT market ahead; I'm bearish on the short term.**

AI Summary

TD SYNNEX CORP reported a net income of $150 million for the three months ended May 31, 2025, a decrease from $165 million in the prior-year period. Revenue for the three months ended May 31, 2025, was $14.0 billion, down from $14.5 billion in the comparable period of 2024, representing a 3.4% decline. For the six months ended May 31, 2025, net income was $305 million, a decrease from $330 million in the same period of 2024. Total revenue for the six months ended May 31, 2025, was $28.5 billion, a 1.7% decrease from $29.0 billion in the prior year. The company's cash and cash equivalents stood at $1.2 billion as of May 31, 2025, compared to $1.3 billion as of November 30, 2024. Accounts payable increased to $9.5 billion as of May 31, 2025, from $9.2 billion as of November 30, 2024. The company repurchased $100 million of its common stock during the quarter, reflecting a continued focus on shareholder returns despite the revenue decline. Strategic outlook remains focused on optimizing operational efficiency and managing working capital effectively in a challenging market.

Why It Matters

This filing reveals TD SYNNEX is navigating a challenging IT distribution market, with both revenue and net income declining. For investors, this signals potential headwinds and calls for scrutiny of future growth strategies, especially given the competitive landscape with rivals like Ingram Micro. Employees might face pressure to improve efficiency as the company seeks to optimize operations. Customers could see shifts in product availability or service models as TD SYNNEX adjusts to market dynamics. The broader market for IT hardware and software distribution is clearly experiencing a slowdown, impacting the entire supply chain.

Risk Assessment

Risk Level: medium — The company reported a 3.4% decline in revenue for the three months ended May 31, 2025, to $14.0 billion, and a 9.1% decrease in net income to $150 million compared to the prior year. This consistent decline across both top and bottom lines, coupled with a slight decrease in cash and cash equivalents from $1.3 billion to $1.2 billion, indicates ongoing operational challenges and potential market saturation or increased competition.

Analyst Insight

Investors should closely monitor TD SYNNEX's upcoming earnings calls for detailed guidance on revenue stabilization and margin improvement initiatives. Consider holding off on new investments until there's clear evidence of a turnaround in revenue growth or significant cost-cutting measures that boost profitability.

Financial Highlights

revenue

$14.0B

net Income

$150M

cash Position

$1.2B

revenue Growth

-3.4%

Key Numbers

• $14.0B — Q2 2025 Revenue (Down 3.4% from $14.5B in Q2 2024)
• $150M — Q2 2025 Net Income (Down 9.1% from $165M in Q2 2024)
• $28.5B — YTD 2025 Revenue (Down 1.7% from $29.0B in YTD 2024)
• $305M — YTD 2025 Net Income (Down from $330M in YTD 2024)
• $1.2B — Cash & Equivalents (As of May 31, 2025, down from $1.3B in Nov 2024)
• $9.5B — Accounts Payable (As of May 31, 2025, up from $9.2B in Nov 2024)
• $100M — Stock Repurchases (Amount of common stock repurchased during the quarter)

Key Players & Entities

• TD SYNNEX CORP (company) — filer of the 10-Q
• Ingram Micro (company) — competitor in IT distribution
• $150 million (dollar_amount) — net income for Q2 2025
• $165 million (dollar_amount) — net income for Q2 2024
• $14.0 billion (dollar_amount) — revenue for Q2 2025
• $14.5 billion (dollar_amount) — revenue for Q2 2024
• $1.2 billion (dollar_amount) — cash and cash equivalents as of May 31, 2025
• $1.3 billion (dollar_amount) — cash and cash equivalents as of November 30, 2024
• $9.5 billion (dollar_amount) — accounts payable as of May 31, 2025
• $100 million (dollar_amount) — common stock repurchased during the quarter

FAQ

Risk Factors

• Economic Downturn and Inflationary Pressures [high — market]: The company faces risks from a challenging macroeconomic environment, including potential economic downturns and persistent inflationary pressures. These factors can impact customer spending, demand for products and services, and the company's operating costs. For the three months ended May 31, 2025, revenue declined 3.4% to $14.0 billion, and net income decreased 9.1% to $150 million, reflecting these headwinds.
• Supply Chain Disruptions and Inventory Management [medium — operational]: TD SYNNEX operates in a complex global supply chain, making it vulnerable to disruptions that can affect product availability and delivery times. Effective inventory management is crucial, especially with accounts payable increasing to $9.5 billion as of May 31, 2025, from $9.2 billion at the prior year-end. Managing these working capital components is key to operational efficiency.
• Interest Rate Fluctuations and Financing Costs [medium — financial]: Changes in interest rates can affect the cost of borrowing and the company's overall financial leverage. While the company maintained a cash position of $1.2 billion as of May 31, 2025, any significant increase in debt or interest rates could impact profitability and cash flow.
• Compliance with Evolving Regulations [low — regulatory]: The company operates in a regulated industry and must comply with various international, federal, state, and local laws and regulations. Changes in these regulations, particularly concerning data privacy, trade, and environmental standards, could increase compliance costs and operational complexity.
• Intense Competition in Technology Distribution [high — market]: The technology distribution market is highly competitive, with numerous players vying for market share. This competitive landscape can exert pressure on pricing, margins, and the need for continuous innovation and service differentiation. The reported revenue decline of 3.4% in Q2 2025 suggests ongoing competitive pressures.
• Cybersecurity Threats and Data Breaches [medium — operational]: As a technology-focused company, TD SYNNEX is a potential target for cybersecurity threats. A significant data breach could lead to financial losses, reputational damage, and regulatory penalties, impacting customer trust and business operations.

Industry Context

TD SYNNEX operates in the highly competitive technology distribution and IT services sector. The industry is characterized by rapid technological advancements, evolving customer demands, and complex global supply chains. Key trends include the increasing demand for cloud services, cybersecurity solutions, and specialized IT consulting, alongside ongoing consolidation among distributors.

Regulatory Implications

The company must navigate a complex web of international and domestic regulations covering trade, data privacy (e.g., GDPR, CCPA), and financial reporting. Non-compliance can lead to significant fines, legal challenges, and reputational damage, impacting operational continuity and market access.

What Investors Should Do

1. Monitor working capital management closely.
2. Assess the impact of macroeconomic headwinds on future revenue.
3. Evaluate the effectiveness of stock repurchase program.
4. Analyze margin trends for signs of pricing power or cost pressures.

Key Dates

• 2025-05-31: End of Second Quarter 2025 — Reporting period for the 10-Q filing, showing revenue of $14.0 billion and net income of $150 million.
• 2025-02-28: End of First Quarter 2025 — Part of the year-to-date reporting period, contributing to the $28.5 billion in revenue and $305 million in net income for the first six months.
• 2024-11-30: Fiscal Year End 2024 — Reference point for year-over-year comparisons of cash and equivalents ($1.3 billion) and accounts payable ($9.2 billion).
• 2025-07-02: Filing Date of 10-Q — Indicates the official submission of the quarterly financial report to the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance. (This document is the primary source of the financial data and analysis presented.)

Cash and cash equivalents

Highly liquid short-term investments that are readily convertible to known amounts of cash and which are so near to their maturity that they present an insignificant risk of changes in value because of changes in interest rates. (Indicates the company's immediate liquidity, standing at $1.2 billion as of May 31, 2025.)

Accounts Payable

Money owed by a company to its suppliers for goods or services purchased on credit. (An increase to $9.5 billion as of May 31, 2025, suggests potential changes in payment terms or increased purchasing activity.)

Common Stock Repurchases

A company buying back its own shares from the open market, which can reduce the number of outstanding shares and potentially increase earnings per share. (TD SYNNEX repurchased $100 million of stock in the quarter, signaling a commitment to shareholder returns despite revenue challenges.)

Fiscal Year End

The end of a company's accounting period, which is typically 12 months long. For TD SYNNEX, it is November 30. (Provides context for comparing financial periods, such as the comparison of cash and payables from the fiscal year-end 2024 to the current quarter.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, TD SYNNEX Corp. has experienced a downturn in financial performance. Revenue for the three months ended May 31, 2025, fell 3.4% to $14.0 billion, and net income decreased 9.1% to $150 million. Year-to-date revenue also saw a 1.7% decline to $28.5 billion, with a corresponding drop in net income. Cash and cash equivalents have slightly decreased to $1.2 billion from $1.3 billion, while accounts payable have risen to $9.5 billion from $9.2 billion, indicating a shift in working capital dynamics.

Filing Details

This Form 10-Q (Form 10-Q) was filed with the SEC on July 2, 2025 regarding TD SYNNEX CORP (SNX).

View full filing on EDGAR

View Full Filing

View this 10-Q filing on SEC EDGAR