TD SYNNEX Corporation (NYSE:SNX) Q2 2023 Earnings Call Transcript

And then as well, the back half of last year, we had a very strong Hyve business, and we talked about the lumpiness of Hyve over the annual periods, and we think that Hyve will have less growth or perhaps decline as well in the back half of the year. So there’s a changing dynamics going on within the portfolio. I want to be clear that I think all of these are within the dynamic of the macro. And as we move forward and the macro gets healthier, I believe that the overall business — all boats rise, so to speak, when we find ourselves at that point. And as we stated in the commentary, the trends here recently have been, I think, positive relative to the macro, but they could ebb and flow as well. So — we talked about a clarity on the debt ceiling.

We talked about the concern around the banking crisis or the banking issues kind of reducing quite significantly. And then there’s a continued narrative around unemployment being low and GDP continuing to chug along. So we’ll see how all of that plays out. But longer term, we absolutely are confident that IT will realign with its sort of normal growth attributes once we clear through this macro.

Joseph Cardoso: Appreciate the color Rich. I’ll jump back in the queue. Thank you.

Operator: The next question is from Shannon Cross with Credit Suisse. Your line is open.

Shannon Cross : Thank you very much. I wanted to ask about the revenue guidance. If PCs are getting a bit better, and yet at the low end, revenue would be lower. Like what went into, I guess, the range that you provided in terms of your thinking? And then I have a follow-up. Thank you.

Marshall Witt: Hi, Shannon. I’ll go first. So typically, what we do every quarter is do a bottoms-up review, and that’s by product, by region, by leader. No different than what we’ve done in the past. So as we pull that together, we have a range of outcomes that typically we then take, and Rich and I will look at that just to get a sense of the range of guide. And that’s really how we formulate it. It’s no different. We did articulate last quarter that it was a little bit more difficult, given just the uncertainty that we saw in the second half of the year. So it very much is an informed perspective and you can appreciate the Americas dynamics are different than Europe, and those are different than high growth and those impacts. For us, clearly, the high growth continues to be the leader and End Point now it’s a matter of trying to determine how that recovers. So Rich, I don’t know if you want to add anything?

Rich Hume: Yes, Shannon, if I think sequentially here for a second. First of all, just a reminder that we had a very strong back half of the year from memory, we had a 13% and 15% growth respectively. But if you think about it sequentially, I think the dynamic is lesser of a decline in PC than lesser of a growth rate in AS as sort of the backlog piece that fueled a little bit extra revenue growth is coming down a little bit. And then clearly, Hyve had back half of last year had some really big numbers. So it’s really a remixing across the portfolio of those revenue dynamics that lead the range of the guide that Marshall had provided.

Shannon Cross : Okay. Thank you. And then probably remiss not to ask about AI. Curious, can you talk about what you’re thinking internally as well as what you’re hearing from your customers and how maybe that can grow as part of some of your more solutions-oriented sales? Thank you.

Rich Hume: Yes, sure. I actually read this morning a piece on AI and one of our vendors that was released by Union team. So thanks for those sites.