The international distributor of electronics and I.T. products and services, which gets more than half of all revenue online, neared $37 billion in sales in fiscal 2018.

A recent acquisition and retooled strategic focus paid off for Tech Data Corp. in its fiscal year ended Jan. 31. The international distributor of electronics and other I.T. products and services reported record sales of $36.78 billion.

Tech Data attributed Q4 and full-year growth to two key factors: its strategic refocus as it adapts to the I.T market it serves and the acquisition last year of Technology Solutions from Avnet Inc., CEO Robert Dutkowsky said on the company’s year-end earnings call yesterday. “The I.T. market is in a constant state of transition. As workloads migrate across technology platforms, it is fueling growth in next generation technologies and delivery models such as the cloud, hyper-converged infrastructure, software-defined solutions, IoT, and analytics, security and the services that support the entire technology continuum,” he told analysts, according to a transcript of the call from Seeking Alpha.

The I.T. market is in a constant state of transition. As workloads migrate across technology platforms, it is fueling growth in next generation technologies.
Robert Dutkowsky, CEO
Tech Data Corp.

The company posted the highest sales in its history in fiscal 2018 and paid down $850 million of debt, Dutkowsky said.

Tech Data didn’t break out e-commerce revenue, but Dutkowsky said on its Q3 earnings call that more than half of sales are online and over 95% of its inventory is purchased digitally. Using the same formula of more than half of sales as digital, more than $18.39 billion of its fiscal 2018 sales were online. Tech Data defines digital commerce as sales through its e-commerce site, Shop.TechData.com, and through electronic data interchange, or EDI.

Tech Data, No. 10 in the 2018 B2B E-Commerce 300, is positioned “to invest in those areas to capitalize on the opportunities they present and to help our customers navigate an increasingly complex technology landscape. To accomplish this, we’re focused on four primary strategic objectives: investing in next-generation technologies and delivery models, strengthening our end-to-end portfolio, transforming Tech Data digitally, and optimizing our global footprint,” Dutkowsky said.

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The increase in worldwide and regional sales resulted mainly from the acquisition of the Technology Solutions business unit from Avnet for $2.6 billion, chief financial officer Charles Dannewitz said on the earnings call. Among its suppliers, products from Apple Inc. (No. 2) yielded the most sales for Tech Data in Q4. “Apple represented 19% of worldwide sales with no other vendor partner representing 10% or more of our sales,” he said.

For the fourth quarter of fiscal 2018 ended Jan. 31, Tech Data reported:

  • Total sales of $11.09 billion, up 49.3% from $7.43 billion in the same quarter last year;
  • Sales in the Americas of $4.291 billion, up 58.5% from $2.707 billion;
  • Sales in Europe of $6.463 billion, up 36.9% from $4.720 billion;
  • Asia-Pacific sales of $338.0 million that came solely from Technology Solutions (Tech Data did not sell in the region before the acquisition);
  • Gross profit of $616.9 million, up 66.3% from $371.0 million, resulting in gross margin of 55.6% compared with gross margin of 49.9%;
  • Net income of $1.26 million, down 98.4% from $78.82 million in the Q4 2017.

The increases in sales and gross profit came largely from the addition of Technology Solutions, the company says.

For the fiscal year ended Jan. 31, Tech Data reported:

  • Total sales of $36.78 billion, up 40.2% from $26.23 billion in fiscal 2017;
  • Sales in the Americas of $15.949 billion, up 53.6% from $10.384 billion;
  • Sales in Europe of $19.714 billion, up 24.4% from $15.850 billion;
  • Asia-Pacific sales were $1.11 billion, and came solely from Technology Solutions (Tech Data did not sell in the region before the acquisition);
  • Gross profit of $2.116 billion, up 62.5% from $1.302 billion, resulting in gross margin of 5.8% compared with gross margin of 5.0%;
  • Net income of $116.6 million, down 40.2% from $195.1 million in the same period last year.

The increases in sales and gross profit came largely from the addition of Technology Solutions, the company says.

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