The top-tier distributor of IT products this week said its cloud billings grew 38% in the quarter ended Oct. 31 to reach nearly $1 billion in annualized sales, as total sales increased 11% to $9.3 billion.

Tech Data Corp. has its sights on the cloud, where it’s seeing its sharpest growth in revenue.

RichHume-TechData

Rich Hume, CEO, Tech Data Corp.

While the net sales increased 11% to $9.3 billion for its fiscal third quarter ended Oct. 31, Tech Data’s cloud billings surged 38% and “now represent an annual run rate of nearly $1 billion,” CEO Richard  T. Hume said yesterday on a conference call with stock analysts, according to a transcript from Seeking Alpha. “Cloud continues to be one of the fastest-growing areas in our business,” he added.

Tech Data has been building out its cloud-based technology and services in recent years, investing heavily in its StreamOne platform for providing cloud-computing, analytics, computer networking, data storage and related technology and services. “Developing the platform has been our single largest organic investment,” Hume said, without providing more specifics.

The Tech Data Cloud service works with dozens of technology partners to offer a portfolio of integrated cloud packages, including Amazon Web Services, Microsoft Azure, IBM Cloud and Oracle Cloud.

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Tech Data has also developed over the past year its technology-as-a-service, or TaaS, offerings, which provide products ranging from laptops and mobile devices to data center software and services to thousands of resellers of Tech Data products on an as-needed basis.

The company, which sells online at TechData.com, doesn’t break out its e-commerce sales, but earlier this year then-CEO Robert Dutkowsky noted that Tech Data processes more than half of its sales online and that more than 95% of its inventory is purchased digitally. (Dutkowsky was succeeded by Hume as Tech Data’s chief executive on June 6.) That means its third-quarter e-commerce sales were close to $5 billion or more, with total Q3 sales at over $9.3 billion.

For the third quarter ended Oct. 31, Tech Data reported:

  • Net sales increased 10.5% to $9.340 billion from $8.449 billion a year earlier;
  • Gross profit increased 5.8% to $556.6 million from $526.1 million, resulting in a gross profit margin of 5.96%, down from 6.23%;
  • Net income more than tripled to $114.2 million from $37.3 million; part of the increase in net income came from an $18 million after-tax benefit related to a “previously reserved accounts receivable.”

For the nine months ended Oct. 31, Tech Data reported:

  • Net sales increased 13.6% to $26.774 billion from $23.564 billion a year earlier;
  • Net income increased 93.9% to $223.8 million from $115.4 million.

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