Data center News
TD Synnex CEO To Solution Providers: ‘Think About Those Technologies Growing In Multiples Faster Than The Market’
Joseph F. Kovar
‘Right now, [those technologies seem] to be cybersecurity, cloud, analytics, IoT, AI and hyperscale infrastructure. We always look to make sure that we’re investing where the high growth is. It still provides a good profit return. And that has served us quite well. And it’ll serve anyone within the segment quite well,’ TD Synnex CEO Rich Hume tells CRN.
Tough Second Quarter, But Recovery On The Way
The second fiscal quarter 2023 was not a particularly good one for TD Synnex, the world’s largest IT distributor. TD Synnex, formed in late 2021 by merger of Tech Data and Synnex, saw year-over-year revenue drop nearly 8 percent to $14.1 billion, while earnings fell 9.0 percent on a GAAP basis to $1.41 per share.
The third fiscal quarter is not looking much better, as TD Synnex guided revenue in the range of $13.5 billion to $14.5 billion, down significantly from the $15.4 billion the company reported for fiscal third quarter 2022.
The financials, which the Fremont, Calif. and Clearwater, Fla.-based distributor reported early Tuesday, shook investors, who drove the company’s share prices down by about 5 percent by the close of the trading day and Wednesday down by another nearly 2 percent.
TD Synnex CEO Rich Hume, in an exclusive meeting with CRN, said his company’s financials were hurt squarely by issues impacting the PC business, but that its Advanced Solutions business continues to grow.
“It’s really the PC ecosystem where the challenge is,” Hume said. “That category was very, very vibrant during the height of the COVID pandemic. And now there’s a correction that’s taken place that is very evident in the industry. Anybody engaged in that ecosystem is going through a couple of quarters’ worth of decline and realignment. But as we move into the future, it will certainly begin to grow again, probably next year.”
That impact was felt primarily in TD Synnex’s Americas business, which saw an 11.0 percent drop in year-over-year revenue, which Hume again blamed on the PC business, which peaked during the COVID-19 pandemic.
Hume’s thoughts echo those of research firms including Gartner and IDC, which early this year said that PC demand in 2022 dropped to its lowest level in years.
While investors and solution providers can expect to continue to see negative impacts from a struggling PC market for the foreseeable future, Hume said it is important to focus on areas where the IT business is strong and offers new opportunities.
“Think about those technologies that are growing in multiples faster than the market,” he said. “Right now, it seems to be cybersecurity, cloud, analytics, IoT, AI and hyperscale infrastructure. We always look to make sure that we’re investing where the high growth is. It still provides a good profit return. And that has served us quite well. And it’ll serve anyone within the segment quite well, from my point of view.”
Hume had a lot to say about the second fiscal quarter 2023 and what comes next. Here is what he told CRN in his interview.