Weak PC market takes shine off TD Synnex numbers

Challenging market conditions in the PC market hurt TD Synnex, but the distributor has used its end-year results as an opportunity to talk up the prospects for 2024.

The distie reported revenues of $14.4bn for the three months ended 30 November, which represented a 11.3% decline from the $16.2bn made a year earlier.

The firm blamed softness in its Endpoint Solutions business as the cause for a decent amount of the year-on-year (YoY) revenue declines as the PC market struggled through 2023.

In terms of the European performance, TD Synnex saw revenues drop by 3% to $5.2bn as the same issues across balancing the product mix hit turnover. Operating income was $79m, compared to $77m in the previous fourth quarter.

For the fiscal year, revenues were down by 7.7%, coming in at $57.6bn. Gross profit was up slightly at $4bn and operating income was $1.78m, compared to $1.51m in the previous fiscal year.

From a European perspective, the year saw the distributor deliver a 4.5% decrease in revenues to $19.4bn, compared to $20.3bn in the prior fiscal year, representing a decrease of 4.3%. Operating income improved to $236m from $227m. Operating margin was 1.2% was an improvement on last year’s 1.1%.

The performance elsewhere globally saw the business deliver revenues of $34.6bn, compared to $38.8bn, which represented a decrease of 10.9% in the Americas. Across Asia Pacific and Japan, there was a 9.1% fall to $3.6bn.

Rich Hume, CEO of TD Synnex, said the business continued to focus on high-value areas that had fed into the fiscal ’23 performance.

“Excellent broad-based execution by our team, coupled with continued progress on our margin-accretive strategic initiatives, enabled a strong close to the fiscal year,” he added. “We successfully navigated a challenging market environment in fiscal year 2023, generating robust free cash flow of $1.3bn and returning $751m to shareholders.”

Last year was difficult for the channel, with challenging macroeconomic conditions hitting customer spending, but Hume echoed the rising hopes that the narrative will change in fiscal ’24.

“We are well-positioned to capitalise on the growth opportunities we expect in 2024, as the IT spending environment is anticipated to rebound,” he said.

One of the factors that hit the distributor’s numbers, but is expected to improve across the industry, is the state of the PC market. Earlier this week, Canalys shared its view that the arrival of AI-capable hardware will move the needle in a positive direction. Coupled with a greater shift by users to Windows 11 and the need for a post-pandemic upgrade, there are reasons why the endpoint solutions business should be healthier in 2024.