TD Synnex Corp. reported record revenue of $21.6 billion for its fiscal Q3 ended Aug. 31.
That was a 37.7% increase in revenue year over year and above the high end of its own outlook. Non-GAAP gross billings reached $31.8 billion, up 40% year over year.
The results continued a streak of record quarters for the IT distributor, which has now reported record billings in each of the last several quarters as artificial intelligence (AI) infrastructure spending has accelerated across its customer base.
“We delivered another record quarter with Distribution and Hyve both performing above our expectations and growing above market,” CEO Patrick Zammit said in a written statement.
TD Synnex’s Hyve continues growing
Hyve, TD Synnex’s custom data center design and manufacturing segment, was once again the standout of the quarter. It recorded $7 billion in gross billings, a 117% increase over the year-ago period. That followed another 117% increase in Q2, to $5.5 billion as it ramped programs with existing hyperscale customers.
In Q3, manufacturing within Hyve grew more than 130% and represented about two-thirds of the segment’s total billings. Supply chain services grew over 90%, driven by component demand tied to customer infrastructure deployments.
Hyve now has programs with each of the five largest U.S. hyperscalers, including Amazon Web Services (AWS), Microsoft Azure and Google Cloud, and is actively ramping programs with new customers that are expected to begin shipping in Q4.
“Customers are engaging Hyve earlier in the development process, creating additional opportunities to expand our relationship with our current customer base and potential new customers,” Zammit told investors.
TD Synnex is also investing in next-generation Hyve capabilities. Design work is underway on advanced liquid-cooled networking racks expected to enter production in the first half of fiscal 2027. The company also announced a deal with Mach3 Systems to support an Nvidia AI factory, which Zammit described as one of the largest enterprise AI factory infrastructure deployments expected to be delivered through the channel.
Distribution grows 27% with broad-based strength
TD Synnex’s Distribution segment, which sells IT hardware and software to resellers and solution providers across more than 100 countries, reported gross billings of $24.8 billion in Q3. That was a 27% increase year over year, with double-digit growth across every geographic region.
Advanced Solutions, which covers complex data center technologies including cloud, security, networking and software, grew 37%.
Endpoint Solutions grew 16%, driven by strength in PCs despite a modest unit decline, as higher average selling prices and a shift toward mid- and higher-range AI PCs offset the volume drop. AI PCs now account for close to 50% of TD Synnex’s personal computing revenue, Zammit said on the call.
Networking grew 19%, driven by demand for Wi-Fi 7 equipment and switches designed to support AI workloads.
TD Synnex Q4 outlook
For Q4, TD Synnex projected revenue of $21.8 billion to $22.6 billion. Non-GAAP gross billings are expected to reach approximately $31.9 billion, up about 31% year over year. The company returned $139 million to shareholders in Q3 through $100 million in buybacks and $38 million in dividends, and declared a Q4 dividend of $0.48 per share, up 9% year over year.
“We expect each of our major programs to generate attractive returns, although some will not reach their full potential until the back half of fiscal 2027,” chief financial officer David Jordan told investors.
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