การประชุมแถลงผลประกอบการไตรมาสที่ 3 ปีงบประมาณ 2026 ของ TD SYNNEX (SNX): ยอดบิลลิ่งของ Hyve พุ่งขึ้น 117%

TD SYNNEX รายงานการเติบโตอย่างแข็งแกร่งในไตรมาสที่ 3 ของปีงบการเงิน 2026 ทั้งในส่วนธุรกิจ Distribution และ Hyve นำโดยโครงสร้างพื้นฐานศูนย์ข้อมูล เทคโนโลยีที่เกี่ยวข้องกับ AI และโครงการไฮเปอร์สเกเลอร์ใหม่ ๆ กำไรเติบโตเร็วกว่ายอดบิลขั้นต้น (gross billings) แต่ความต้องการเงินทุนหมุนเวียนของ Hyve ส่งผลให้มีการใช้กระแสเงินสดอิสระไปประมาณ 1 พันล้านดอลลาร์

สรุปประเด็นสำคัญ

• ยอดบิลขั้นต้นแบบ Non-GAAP เพิ่มขึ้น 40% เมื่อเทียบเป็นรายปี สู่ระดับ 3.18 หมื่นล้านดอลลาร์ ขณะที่กำไรจากการดำเนินงานแบบ Non-GAAP เพิ่มขึ้น 55% สู่ระดับ 736 ล้านดอลลาร์ และ EPS แบบ Non-GAAP เพิ่มขึ้น 59% สู่ระดับ 5.68 ดอลลาร์
• ยอดบิลขั้นต้นของธุรกิจ Distribution เติบโต 27% สู่ระดับ 2.48 หมื่นล้านดอลลาร์ โดยมีการเติบโตเป็นตัวเลขสองหลักในทุกภูมิภาค และแข็งแกร่งเป็นพิเศษในส่วนโครงสร้างพื้นฐานศูนย์ข้อมูล
• ยอดบิลขั้นต้นของ Hyve พุ่งขึ้น 117% สู่ระดับ 7 พันล้านดอลลาร์ โดยภาคการผลิตเติบโตมากกว่า 130% และคิดเป็นประมาณสองในสามของยอดบิลทั้งหมดของ Hyve
• อัตรากำไรจากการดำเนินงานแบบ Non-GAAP ของ Hyve ลดลงเหลือ 3.61% จาก 5.04% โดยมีสาเหตุหลักมาจากสัดส่วนที่เพิ่มขึ้นของโครงการเซิร์ฟเวอร์ AI ที่ทำกำไรได้แต่อัตรากำไรต่ำกว่า
• มีการใช้กระแสเงินสดอิสระประมาณ 1 พันล้านดอลลาร์ เนื่องจาก TD SYNNEX ลงทุนในสินค้าคงคลังของ Hyve ลูกค้าใหม่ และการขยายกำลังการผลิตตามโครงการต่าง ๆ ผู้บริหารคาดว่าบริษัทจะสร้างกระแสเงินสดได้ในไตรมาสที่ 4 ของปีงบการเงิน
• สำหรับไตรมาสที่ 4 ของปีงบการเงิน 2026 ผู้บริหารประเมินยอดบิลขั้นต้นแบบ Non-GAAP ไว้ที่ 3.19 หมื่นล้านดอลลาร์ บวกหรือลบ 500 ล้านดอลลาร์ และกำไรต่อหุ้นปรับลดแบบ Non-GAAP ไว้ที่ 5.90 ดอลลาร์ บวกหรือลบ 0.25 ดอลลาร์

ข้อมูลทางการเงินที่สำคัญ

TD SYNNEX ได้ส่งคืนเงินทุนแก่นักลงทุนจำนวน 100 ล้านดอลลาร์ผ่านการซื้อหุ้นคืน และ 38 ล้านดอลลาร์ผ่านการจ่ายเงินปันผลในระหว่างไตรมาส นอกจากนี้ คณะกรรมการบริษัทได้อนุมัติการจ่ายเงินปันผลประจำไตรมาสที่ 0.48 ดอลลาร์ต่อหุ้นสามัญ โดยกำหนดจ่ายในวันที่ 30 ตุลาคม 2026

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

Distribution

กำไรขั้นต้นของ Distribution เพิ่มขึ้น 22% สู่ระดับ 1.15 พันล้านดอลลาร์ ยอดบิลขั้นต้นของ Endpoint Solutions เพิ่มขึ้น 16% โดยได้รับปัจจัยหนุนจากราคาขายเฉลี่ยของ PC ที่สูงขึ้น แม้ว่าจำนวนเครื่องจะลดลงเล็กน้อย ผู้บริหารระบุว่ายอดขาย PC ในแง่จำนวนเครื่องลดลงในช่วงกลางถึงสูงของระดับหลักเดียว ขณะที่ราคาชิ้นส่วนและการปรับเปลี่ยนไปสู่ระบบระดับกลางและพรีเมียมช่วยหนุนการเติบโตของมูลค่า

AI PC คิดเป็นเกือบ 50% ของรายได้ PC ของ TD SYNNEX ผู้บริหารยังกล่าวด้วยว่ารอบการเปลี่ยนเครื่อง PC ใหม่ยังไม่สิ้นสุด แม้ว่าการขึ้นราคาจะส่งผลกระทบต่อปริมาณการขาย โดยเฉพาะในตลาดผู้บริโภคทั่วไปซึ่งบริษัทมีสัดส่วนการลุยตลาดที่จำกัด

ยอดบิลขั้นต้นของ Advanced Solutions เพิ่มขึ้น 37% นำโดยโครงสร้างพื้นฐาน ซอฟต์แวร์ และเทคโนโลยีที่เกี่ยวข้องกับ AI ผู้บริหารระบุว่าแรงกดดันต่ออัตรากำไรขั้นต้นเกิดจากส่วนผสมของผลิตภัณฑ์และรายการธุรกรรมมากกว่าการลดลงของราคาในสินค้าประเภทเดียวกัน คำสั่งซื้อโครงสร้างพื้นฐานขนาดใหญ่หลายรายการมีอัตรากำไรขั้นต้นต่ำกว่าค่าเฉลี่ย แต่ยังคงทำกำไรได้และสร้างผลตอบแทนจากการลงทุนที่บริษัทอธิบายว่าน่าดึงดูดใจ

อุปสงค์จากกลุ่มองค์กรครอบคลุมถึงการอัปเกรดระบบประมวลผลทั่วไป โครงสร้างพื้นฐาน AI และการปรับปรุงระบบจัดเก็บข้อมูลให้ทันสมัย ขณะที่อุปกรณ์เครือข่ายยังคงแข็งแกร่ง โดยได้รับแรงหนุนจากความต้องการอัปเกรด Wi-Fi 7 สวิตช์ที่ใช้สำหรับโครงสร้างพื้นฐาน AI และการปรับขึ้นราคาเล็กน้อย

TD SYNNEX เน้นย้ำถึงข้อตกลงในการสนับสนุนการใช้งานโรงงาน AI ระดับองค์กรขนาดใหญ่ที่ขับเคลื่อนด้วย NVIDIA ขณะเดียวกัน IBM ได้ขยายความร่วมมือกับบริษัทเพิ่มเติมในอีก 20 ประเทศทั่วยุโรป เอเชียแปซิฟิก และละตินอเมริกา

ตามข้อมูลของผู้บริหาร ลูกค้าที่ใช้บริการดิจิทัลของ TD SYNNEX เป็นประจำมียอดการใช้จ่ายกับบริษัทเพิ่มขึ้นในอัตราเกือบสองเท่าเมื่อเทียบกับลูกค้ากลุ่มเปรียบเทียบ บริการเหล่านี้รวมถึง PartnerFirst และ Digital Bridge ซึ่งมีการฝังเอเจนต์ AI ไว้ในประสบการณ์การใช้งานของลูกค้า

Hyve

กำไรขั้นต้นของ Hyve เพิ่มขึ้น 47% สู่ระดับ 276 ล้านดอลลาร์ ยอดบิลจากภาคการผลิตเติบโตมากกว่า 130% ขณะที่บริการห่วงโซ่อุปทานขยายตัวมากกว่า 90%

ธุรกิจกำลังเร่งขยายกำลังการผลิตให้แก่ลูกค้าไฮเปอร์สเกเลอร์รายใหม่ 3 รายและอีกหลายโครงการภายใต้ความสัมพันธ์แต่ละราย การส่งสินค้าตามโครงการลูกค้าใหม่ที่ประกาศไปก่อนหน้านี้คาดว่าจะเริ่มขึ้นในไตรมาสที่ 4 ของปีงบการเงิน โครงการใหม่ที่ได้รับชนะการประกวดราคาเป็นโครงการด้านการผลิตและระบบเครือข่ายเป็นหลัก โดยผู้บริหารคาดว่าการเร่งขยายกำลังการผลิตจะเร็วขึ้นในไตรมาสที่ 4 ของปีงบการเงิน และไตรมาสที่ 1 ของปีงบการเงิน 2027

Hyve ยังทำงานร่วมกับลูกค้าหลายรายเกี่ยวกับแร็กเครือข่ายระบบระบายความร้อนด้วยของเหลวขั้นสูง ซึ่งคาดว่าจะเข้าสู่การผลิตในช่วงครึ่งแรกของปีงบการเงิน 2027 ผู้บริหารระบุว่าโครงการที่เพิ่งได้รับมอบหมายมีอัตรากำไรในระดับเท่าเดิมถึงเพิ่มขึ้นเมื่อเทียบกับผลการดำเนินงานปัจจุบันของ Hyve ซึ่งจะช่วยหนุนการปรับตัวดีขึ้นเล็กน้อยของอัตรากำไรเมื่อโครงการเข้าสู่ภาวะเติบโตเต็มที่

แนวทางจากผู้บริหาร

ผู้บริหารคาดว่ายอดบิลขั้นต้นของ Hyve จะเพิ่มขึ้นเมื่อเทียบกับไตรมาสก่อนหน้าในไตรมาสที่ 4 ของปีงบการเงิน เนื่องจากการเร่งขยายโครงการลูกค้ารายใหม่ นอกจากนี้ บริษัทยังคาดว่าจะสร้างกระแสเงินสดได้ในระหว่างไตรมาส เนื่องจากเงินทุนหมุนเวียนที่นำไปใช้ก่อนหน้านี้เริ่มเข้าสู่ระดับปกติ

เมื่อมองไปยังปีงบการเงิน 2027 ผู้บริหารคาดว่าการแปลงเงินสดของ Hyve จะปรับตัวดีขึ้นอีกเมื่อโครงการต่าง ๆ เติบโตเต็มที่ ทั้งนี้ โครงการใหญ่บางโครงการอาจยังไม่บรรลุศักยภาพสูงสุดจนกว่าจะถึงครึ่งหลังของปีงบการเงิน 2027

ความเสี่ยงและประเด็นที่ต้องจับตา

• การขยายตัวอย่างรวดเร็วของ Hyve ต้องใช้การลงทุนในสินค้าคงคลังและเงินทุนหมุนเวียนจำนวนมาก ส่งผลให้มีการใช้กระแสเงินสดอิสระในไตรมาสไปประมาณ 1 พันล้านดอลลาร์
• อัตรากำไรจากการดำเนินงานของ Hyve หดตัวลงเนื่องจากโครงการเซิร์ฟเวอร์ AI ขนาดใหญ่มีสัดส่วนเพิ่มขึ้นในส่วนผสมธุรกิจ
• โครงการของลูกค้าโดยทั่วไปเป็นระยะยาว แต่ผู้บริหารยอมรับว่าสัญญาอาจถูกยกเลิกได้และปริมาณที่คาดการณ์ไว้ก็อาจเปลี่ยนแปลงได้
• การปรับขึ้นราคา PC กำลังกดดันอุปสงค์จำนวนเครื่อง แม้ว่าผู้บริหารจะกล่าวว่าผลกระทบดังกล่าวจะเห็นได้น้อยกว่าในตลาดองค์กรธุรกิจที่ TD SYNNEX มีบทบาทมากกว่า
• Hyve ยังคงอยู่ในช่วงของการเร่งขยายฐานลูกค้า การขยายกำลังการผลิต และการลงทุนที่เพิ่มขึ้นในบุคลากรด้านวิศวกรรม ความเชี่ยวชาญทางเทคนิค และขีดความสามารถในการดำเนินงาน

ประเด็นสำคัญจากการถาม-ตอบกับนักวิเคราะห์

อัตรากำไรของ Hyve: ผู้บริหารระบุว่าอัตรากำไรมีเสถียรภาพแล้ว โครงการใหม่ส่วนใหญ่เป็นสัญญาด้านการผลิตที่มีอัตรากำไรในระดับเท่าเดิมถึงเพิ่มขึ้น ขณะที่ประสิทธิภาพน่าจะปรับตัวดีขึ้นเมื่อโครงการที่มีอยู่เข้าสู่ภาวะเติบโตเต็มที่

อุปสงค์ศูนย์ข้อมูล: ผู้บริหารยังคงมีมุมมองเป็นบวกอย่างระมัดระวังต่อปีงบการเงิน 2027 โดยอ้างถึงการลงทุนขององค์กรในเอเจนต์ AI อุปสงค์จากไฮเปอร์สเกเลอร์อย่างต่อเนื่อง และยังไม่เห็นสัญญาณความอ่อนแอในประมาณการของลูกค้าหรือยอดคำสั่งซื้อค้างรับในปัจจุบัน

การแปลงเงินสด: TD SYNNEX คาดว่าจำนวนวันในการแปลงเงินสดขั้นต้นจะปรับตัวดีขึ้นประมาณสองสามวันเมื่อเทียบกับไตรมาสก่อนหน้าในไตรมาสที่ 4 ของปีงบการเงิน ผู้บริหารกล่าวว่าโครงการของ Hyve ที่เติบโตเต็มที่แล้วสามารถสร้างกระแสเงินสดอิสระได้ ขณะที่การใช้เงินสดในปีงบการเงิน 2026 สะท้อนถึงการลงทุนล่วงหน้าก่อนการเร่งขยายโครงการ

อัตรากำไรของ Distribution: ผู้บริหารระบุว่าอัตรากำไรของสินค้าเปรียบเทียบประเภทเดียวกันยังคงมีเสถียรภาพ แรงกดดันที่รายงานหลักๆ เกิดจากรายการธุรกรรมโครงสร้างพื้นฐานขนาดใหญ่ขึ้นและส่วนผสมผลิตภัณฑ์ AI ซึ่งโดยทั่วไปมีเปอร์เซ็นต์อัตรากำไรต่ำกว่า

การควบรวมช่องทางจำหน่าย: ผู้บริหารกล่าวว่าลูกค้าต้องการการสนับสนุนมากขึ้นในสภาพแวดล้อมที่ซับซ้อนและมีผู้จัดจำหน่ายหลายราย ขณะที่ผู้ขายเทคโนโลยีต่างลดจำนวนความสัมพันธ์โดยตรงและผู้กระจายสินค้าลง TD SYNNEX เชื่อว่าทั้งสองแนวโน้มจะช่วยสนับสนุนการเพิ่มส่วนแบ่งทางการตลาดอย่างต่อเนื่อง

บทบันทึกการแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Good morning. My name is Rebecca, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX Third Quarter Fiscal 2026 Earnings Call. Today's call is being recorded. [Operator Instructions]

At this time, for opening remarks, I would like to pass the call over to Nate Friedel, Head of Investor Relations at TD SYNNEX. Nate, you may begin.

Nate Friedel

Good morning, everyone, and welcome to TD SYNNEX Fiscal 2026 Third Quarter Earnings Call. Joining me on today's call are Chief Executive Officer, Patrick Zammit; and Chief Financial Officer, David Jordan.

Before we continue, let me remind you that today's discussion contains forward-looking statements within the meaning of the federal securities laws, including predictions, estimates, projections or other statements about future events, including statements about our strategy, demand, plans and positioning, growth, cash flow, capital allocation and stockholder return as well as our financial expectations for future fiscal periods. Actual results may differ materially from those mentioned in these forward-looking statements as a result of risks and uncertainties discussed in today's earnings release in the Form 8-K we filed today in the Risk Factors section of our Form 10-K and our other reports and filings with the SEC. We do not intend to update any forward-looking statements.

Also, during this call, we will reference certain non-GAAP financial information. Reconciliations of GAAP to non-GAAP results are included in our earnings press release and the related Form 8-K available on our Investor Relations website, ir.tdsynnex.com. This conference call is the property of TD SYNNEX and may not be recorded or rebroadcast without our permission.

I will now turn the call over to Patrick.

Patrick Zammit

Thank you, Nate, and good morning, everyone. We delivered another record quarter with distribution in Hyve, both performing above our expectations and growing above market within the quarter.

Results were broad-based across geographies, technologies, customers and programs with notable strength in data center infrastructure. Our success securing opportunities with new and existing customers, particularly within Hyve required working capital investment to support these rounds. As David will discuss in more detail, those investments affected near-term cash flow during the quarter, but position us to support committed customer demand and future growth.

Looking beyond the quarter, we continue to see encouraging developments across the technology landscape. Enterprise AI adoption is progressing toward broader production deployments. Data center modernization remains a priority as organizations prepare for next-generation infrastructure requirements. While AI is driving new security, governance and compliance requirements across technology environments. We believe these trends expand our opportunities across both distribution and Hyve and reinforce our confidence in the long-term growth opportunity ahead.

I will now begin with distribution. Distribution delivered strong growth during the quarter with non-GAAP gross billings reaching $24.8 billion, up 27% year-over-year, exceeding our expectations and growing above market across each of all regions. Our performance reflects a broader trend across the technology ecosystem. As technology environments become more complex, Customers increasingly need help integrating, deploying, securing and managing solutions across multiple vendors and technologies. Vendors are looking for partners but cannot only efficiently reach customers but enable customer capabilities, activate demand and execute consistently around the world. This is increasing the strategic importance of distribution. One area we are particularly encouraged by is the growing number of enterprises moving from AI experimentation towards production scale centralized AI factory deployments.

This quarter, TD SYNNEX and [indiscernible] signed an agreement to support an NVIDIA AI factory powered by [indiscernible]. This is one of the largest enterprise AI factory infrastructure deployments expected to be delivered through the channel, bringing together the design, integration, deployment, day to co-admin operations, financing and supply chain capabilities needed to operationalize a sophisticated NVIDIA-based AI factory platform for a large enterprise. As enterprises evaluate next-generation platforms, we are seeing growing demand for partners but can simplify complexity and accelerate implementation through their enablement capabilities. AI factories have the potential to power transformative new products and services but realizing that potential requires far more than access to compute. Organizations that ensure AI investments are secure, govern, cost-effective and aligned with measurable business outcomes.

Similar to the evolution of cloud computing, we believe disciplines such as financial operations and security operations will become increasingly important as AI becomes embedded in business-critical processes. Organizations will need support, selecting the right models for the right workloads, deploying them on the right infrastructure and balancing performance, security and governance across edge, private, hybrid and public cloud environments. While still early in the adoption curve, deployments of this scale signal a market that is moving toward broader deployment. As AI becomes embedded across more users, workloads and business processes, we believe the requirements to secure government optimize and support these environments will continue to expand.

Customers are also seeking greater flexibility in how they engage with us, and have seen benefits from our digital strategy. Customers regularly engaging across our digital offerings have grown their spend with TD SYNNEX at nearly twice the pace of similar customers with us. Through solutions such as PartnerFirst and digital bridge, enhanced with AI agents embedded throughout the customer experience. We help customers identify opportunities, simplify purchasing decisions and engage efficiently across a broad range of technologies and vendors. We view digital engagement as an extension of our broader enablement strategy. Whether customers engage through digital platforms, technical specialists, enablement programs or a combination of all 3, our objective remains the same: helping our customers build capabilities, grow their business and better serve end users.

The same capabilities creating value for customers are also important for vendors. As technology portfolios expand and customer requirements become more specialized, vendors are seeking partners that can combine global execution with expertise across technologies, customer segments and geographies. This is expanding the addressable market served through distribution. Earlier this quarter, IBM expanded its relationship with TD SYNNEX into 20 additional countries across Europe, Asia Pacific and Latin America. We believe this expansion reflects the strength of our go-to-market model and the confidence of vendors place in our ability to activate demand, execute consistently across end markets around the world and accelerate growth.

Collectively, over the last year, we've added multiple billion dollars of incremental gross billings into the portfolio through new customer wins and an expanded vendor line card. More importantly, we believe these relationships deepen our role in the technology ecosystem and create additional opportunities for long-term profitable growth and potential earnings expansion.

Turning to Hyve. Hyve delivered a strong quarter with non-GAAP gross billings of $7 billion, up 117% year-over-year exceeding our expectations as we saw continued increased demand from existing customers and programs. Our previously announced programs with new customers have progressed as planned. with shipments expected to begin in our fiscal fourth quarter. These programs improved visibility into future growth, including maintaining a healthy pipeline of opportunities and support a broader customer and program mix over time. We believe increasingly sophisticated infrastructure requirements are elevating the importance of expertise in engineering validation, manufacturing and supply chain execution. As a result, 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.

One example is our work with multiple customers on the design of advanced liquid crude networking racks, but are expected to enter into production in the first half of fiscal year '27. At the same time, we remain focused on ensuring growth translates into attractive long-term returns. While customer demand and revenue growth remained robust during the quarter, profitability remains an important area of focus. The business is working through a period of significant customer ramps, manufacturing expansion and elevated investment activity, including engineering talent, technical expertise and operating capabilities as we support multiple large growth initiatives at the [ second ].

Several opportunities in our pipeline are being awarded at margin profiles that are neutral to accretive relative to our current operating performance. As previously awarded programs mature and new programs ramp, we expect modest margin improvement over time. even as we continue investing to support future growth. Our manufacturing investments remained aligned with awarded customer programs and our focus remains on deploying capital in ways that strengthen our competitive position and are expected to generate attractive returns over time.

In closing, we believe both distribution in Hyve continued to benefit from durable technology trends and expanding customer relationships. Within distribution, enterprise AI adoption digitally enabled experiences faired with human expertise and growing technology complexity are increasing the value we provide to customers and vendors. Within Hyve, sophisticated infrastructure architectures are driving deeper customer engagement and expanding opportunities across a broader set of customer programs. While we have deployed significant capital to support customer growth initiatives, particularly within Hyve, we believe those investments strengthen our competitive position, support future growth and increase the long-term earnings power of the company. As these programs mature, we expect free cash flow generation and conversion to improve, and we remain focused on demonstrating progress as we close fiscal year '26 and enter fiscal '27.

With that, I'll turn it over to David to discuss our financial performance and outlook in greater detail. David?

David Jordan

Thank you, Patrick, and good morning, everyone. This was another strong quarter for TD SYNNEX. Both distribution in Hyve grew above market and contributed meaningfully to earnings, while our operating income and earnings per share continue to grow faster than gross billings.

Starting with the top line. Our non-GAAP gross billings for the third quarter was $31.8 billion increasing 40% year-over-year or 41% year-over-year in constant currency and exceeding the high end of our guidance range. Non-GAAP operating income was $736 million an increase of 55% year-over-year or 56% year-over-year in constant currency. Non-GAAP earnings per share was $5.68, an increase of 59% year-over-year and above the high end of our guidance range. GAAP operating income was $643 million an increase of 68% year-over-year. GAAP earnings per share was $5.18, an increase of 89% year-over-year and above the high end of our guidance range.

Turning to our quarterly performance for each business. Distribution non-GAAP gross billings increased 27% to $24.8 million with double-digit growth across each region and most major technologies. Our end-to-end portfolio continues to position us well across technology cycles with healthy demand throughout the business in particular strength in data center infrastructure. Endpoint Solutions gross billings increased 16%, supported by continued strength in PCs, including higher average selling prices and a modest decline in units. Advanced Solutions gross billings increased 37%, driven by strength in infrastructure, software and AI-related technologies. Distribution gross profit increased 22% to $1.15 billion. Distribution gross margins were slightly impacted by customer and product mix, which was more than offset by disciplined expense management. Non-GAAP operating income increased 55% to $483 million, and non-GAAP operating margin as a percentage of gross billings expanded 35 basis points year-over-year to 1.95%.

Turning to Hyve. Hyve's gross billings increased 117% to $7 billion with growth across both manufacturing and supply chain services. Manufacturing grew in excess of 130% and represented approximately 2/3 of Hyve's gross billings, reflecting higher volumes and expanded programs with existing customers. Supply Chain Services grew in excess of 90%, supported by component demand associated with customer infrastructure deployments. Hyve's gross profit increased 47% to $276 million, and non-GAAP operating income increased 56% to $253 million. Non-GAAP operating margin as a percentage of gross billings was 3.61% compared with 5.04% in the prior year period. As a reminder, our operating margins reflect the growing contribution from large AI RAC programs that has been strategically important but dilutive to Hyve's operating margins. creating a mix headwind, which we believe has stabilized. Our objective is to build a broader, more diversified had business that combines sustainable growth with improving profitability stronger cash generation and attractive returns on invested capital.

Shifting to cash flow and capital allocation. Free cash flow consumption for the quarter was approximately $1 billion, driven by increased inventory in Hyve's supply chain business in addition to new customers and new programs with existing customers. Net working capital closed at $6.5 billion, with a gross cash conversion cycle of 22 days, an increase of 5 days sequentially and 6 days year-over-year, reflecting increment mix of Hyve. Year-to-date, we have made substantial investments in Hyve's working capital and believe we now have a significant portion of the investments to support our expected growth now in place. Our focus is now on execution, cash conversion and realizing the expected returns on our investments. We ended the quarter with $749 million of cash and cash equivalents and net leverage of 1.9x.

During the quarter, we returned $100 million through share repurchases and $38 million through dividends. Our Board also approved a cash dividend of $0.48 per common share payable on October 30, 2026, to shareholders of record as of the close of business on October 16, 2026.

Turning to our fourth quarter outlook. We expect continued momentum across both businesses, translate to non-GAAP gross billings of approximately $31.9 billion, plus or minus $500 million, up approximately 31% year-over-year at the midpoint, a gross to net adjustment of approximately 30%, revenue of approximately $22.2 billion, plus or minus $400 million, non-GAAP net income of approximately $474 million, plus or minus $20 million, non-GAAP diluted earnings per share of approximately $5.90, plus or minus $0.25, up approximately 54% at the midpoint based on approximately 79.2 million diluted shares outstanding. We expect Hyve's non-GAAP gross billings will increase sequentially quarter-over-quarter as we continue to see further benefit from ramping programs across multiple new customers. We expect we will generate cash in the quarter as recently deployed working capital begins to normalize.

Looking ahead to fiscal 2027, we expect further improvements in Hyve's cash conversion as programs mature. In summary, we're extremely proud of our teams for the results they continue to deliver. Distribution for multiple quarters has delivered above-market growth and broad-based growth, operating leverage and cash flow. Odd continues to add new customers and new programs with existing customers. 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. With that, we'll open the call for questions. Operator?

Operator

[Operator Instructions] Your first question comes from Joseph Cardoso with JPMorgan.

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Manmohanpreet Singh

This is MP on for Joseph Cardoso from JPMorgan. Great results. I think my question is you stated several pipeline opportunities are being awarded at margins neutral to accretive relative to current performance. what is driving this improved margin discipline? And how sustainable is it as competition for AI infrastructure [indiscernible]?

David Jordan

So thanks for your question. So just to provide -- this is David, a little more clarity on Hyve's operating margins and how the new customer programs are coming. What we've put in the prepared remarks and if you reflect on the commentary we provided on the call last quarter, Hyve is ramping 3 new hyperscalers and multiple programs within each of those customers.

And so as we look forward, one of the comments that we made is the new programs that we've won, which are predominantly manufacturing are neutral to accretive to have Additionally, some of the programs that we're ramping this year, as those programs mature, we continue to find ways to improve the margins within there. And so as we look forward, that's what gives us confidence that Hyve's margins have stabilized and should improve as we move forward.

Operator

Your next question comes from Keith Housum with Northcoast Research.

Keith Housum

And I'll lock great quarter for you guys. We're kind of looking at the growth. Obviously, servers and storage were phenomenal for you guys this quarter, but strictly really broad-based. But I think there might be concerned with some investors that you're getting more rumors about data centers perhaps peaking here and I think there's rumors of Oracle even perhaps pulling back on data centers here. How are you guys thinking about the data center market for the next year or 2? Any concerns that you might have a pullback to your spending or any constraints out there, but how are you just thinking about the broader market?

Patrick Zammit

Yes, Keith, thanks a lot for the question. So I mean, one, as you said, we are very pleased because the growth in the quarter has been broad-based by GEO, distribution, Hyve by technology. And by the way, our Q4 guidance reflects that. If you look at next year, so we're in the process of building our budget for next year and collecting all the data. We continue to be overall positive about the market prospects and we expect to continue to grow a little bit faster than the market.

Specifically to data center, and when you look at what is driving the demand, you have, of course, I mean, with the hyperscalers, they have continued to support the frontier models with capacity for training. But I mean, what we see and that's confirmed by all the -- by our OEM is that companies are now investing more and more. Enterprises are investing more and more in agentic capabilities. And we know that agentic AI is going to be a fantastic driver for productivity gains and improving customer experience. I mean we've mentioned one of a big win this quarter from an enterprise and we see that as clearly a trend accelerating. So we continue to be positive about the prospects for next year and specifically to Hyve as David just mentioned, we've won some new customers, and we are going to benefit for the ramp up. So overall, we are cautiously optimistic.

Keith Housum

Great. And just as a follow-up to that, like the business you win with Hyve, is that cancelable if the market did go south by those customers? Or are these not call agreements that you guys enter into?

David Jordan

The way the programs work are similar to distribution, you could cancel contracts. But these are longer-term agreements. Both sides have financial cancellation rights that people would all perform. But when you go into one of these programs, it can take you a year to get up to be and what we're working on is we won a category within a hyperscale where we support in a multiyear [indiscernible]. So in many cases, these programs can last a few years, but there is always the potential that on volumes [indiscernible], but we feel really good about where [indiscernible] the customers that supports the value that it has and how we start to relative to the competition. And so all of those items will provide a level of installation.

Patrick Zammit

I just want to add 2 things. So one, when you look at the forecast we've received or the backlog we have, I don't see any sign of concern today, point number one. Point number two is it was interesting to watch the results of Q3. And clearly, everybody referring to the fact that there is not enough capacity today in the data center to meet the demand. And so again, the completion of the 2 makes me feel I mean, cautiously optimistic for next year.

Operator

Your next question comes from Ruplu Bhattacharya with Bank of America.

Ruplu Bhattacharya

You've reported good results and guidance. It looks like gross margin overall declined 60 bps year-on-year. Can you elaborate more on what was that mix that impacted margins? And was there anything unique about the advanced solution side of the Americas distribution business because it looks like that region had gross margins down the most, about 120 bps. So any further color on what impacted margins?

David Jordan

Sure. Thanks, Ruplu. When you look at the overall margins, if we just focus on distribution for a second, the mix that we're referring to is largely product related. So within North America, there was a few larger transactions, specifically around infrastructure build-outs and some of those categories have slightly lower gross margin is relative to the average.

Within Hyve, it's the same impact that we had commented on last quarter, which was we have ramped a large AI server program that's profitable, but at margins that are slightly below the average Hyve margin, and that's what's caused the year-over-year decline for Hyve. But net-net, when you take a huge step back, our teams, both in distribution and Hyve have done a really nice job managing margin, managing pricing and making sure that within distribution, when volume shifts between categories that they prudently manage their cost to continue to drive operating levers. So we feel very good about the performance that the team has put out for the quarter.

Operator

Your next question comes from Erik Woodring with Morgan Stanley.

Erik Woodring

I'm going to ask something kind of similar to Ruplu there, maybe try to be a little more specific, which is on that advanced solutions side, you're talking about mix. I just want to make sure and clarify for everyone here. I think there's probably some concern there could be issues with the cost-plus model just because of where pricing is going. Can you just clarify for us the Advanced Solutions margin -- gross margin pressure that you saw was really just a function of mix in those deals and that any like-for-like margins, we're not seeing pressure year-over-year this quarter?

David Jordan

Sure. No, Erik. Thanks for the question. And you've read it correctly. When you look at the overall margins, if you really start to double click them, they're relatively stable. And so as we've shared previously, our business, we make a percentage of the average selling price. And so what impacted the quarter is we had a couple of large transactions and larger orders continue to be slightly lower margin. And so the mix of that is what caused some of the margin impact in addition to us selling a decent amount of AI infrastructure. It's all profitable business. It's all good ROIC business, but that is what impacted the margins, specifically in Advanced Solutions year-over-year. Structurally, there's -- the margins remain highly resilient when you look at it from a category perspective. So we feel pretty good about that.

Patrick Zammit

And I just want to add one thing. So talking a little bit about our management system. So every month, we are reviewing our margins, of course, by geography, but most important, by technology and by vendor and customer segment. And so we are monitoring that, indeed, I mean, like-for-like margins are stable or evolving and then we look for the why and take corrective measures. So it's a very disciplined approach. And that's the reason when we talk about mix, it's either customer segment who grew faster and has a lower margin or higher margin or a geo who grew faster and has a higher margin or lower margins.

So it's really mixed. Otherwise, very, very strong discipline on margin reviews. I mean, to, I mean, anticipate any issues and take corrective actions very, very rapidly. But again, as David mentioned today, we have no issues. And the other thing I would add just is -- and that's very important. I mean we talked about, I mean, taking to the bottom line, at least 50% of the GP growth. And you can see that today, that ratio is significantly better than that. Again, the teams are doing a fabulous job managing cost. We are also obviously starting to leverage AI which, I mean, basically is improving the productivity of the overall team. So I mean, operating margins have been consistently improving over the past quarters, and it was true again in Q3.

Operator

Your next question comes from David Vogt with UBS.

David Vogt

Great. I'll just squeeze in one and just a little bit multipart question for David. So David, you touched on seeing free cash flow getting better in Q4 and seasonally, Q4 is your better period of conversion, better conversion of working capital. Can you kind of help us think through kind of where you think the company's cash flow needs look like as we stretch out into '27 because the business is structurally 50% bigger than it was effectively a year ago. Just trying to get a sense for where your cash needs are today, what you feel comfortable with, with cash on your balance sheet and how you're thinking about all the different vectors and for mutations, particularly as Hyve should continue to grow pretty nicely next year.

David Jordan

It's a good question. So thanks, David. When you think about what we put in our prepared remarks is we expect to generate cash in Q4, you're right, that seasonally, we tend to generate more cash in the back half of the year. Here's the way we think about it. So we would expect a couple of days of improvement in gross cash days quarter-over-quarter. That is largely driven by 2 things: continued momentum across both distribution and Hyve. And knowing that a lot of the cash consumption year-to-date has come from Hyve and we have to make investments in programs ahead of the ramp. And so as those programs ramp, we expect them to be cash generative.

As you think about 2027 or more on the long -- or more beyond, we expect all of our businesses to be sustainable cash generators. And so we recognize that FY '26 was a period of hyper growth. But we also front-loaded a lot of working capital investments to enable that. And so as we move forward, we would expect those -- all of our businesses to become cash generative, and we feel pretty good about where we are.

Patrick Zammit

I just add one remark. When we look at our more mature programs at Hyve, I mean, indeed, we see that when they reach maturity, they are generating free cash flow, okay? So no concerns from that standpoint. But the reality is that the team has done a very good job winning some new programs expanding the customer base. And yes, we are in an investment phase to ramp up all those programs. But again, when the program matures, it is -- it generates free cash flow.

Operator

Your next question comes from Katherine Murphy with Goldman Sachs.

Katherine Campagna

Maybe to stick on the Hyve manufacturing piece. Can you talk more about the mix of programs in the quarter? You mentioned that the AI server business that you highlighted last quarter remains largely stable. And as these new programs layer in, mix should improve. But maybe talk more to the outlook for the traditional server networking storage programs. And the new engagements as well as the timing of when some of these legacy engagements may start to roll off or be less significant.

Patrick Zammit

Yes. So if you look at the quarter, Q3, so we had this large GPU program. and networking continued to be very strong. If you look at the new programs we've won, there are primarily networking programs, okay? So again, at a good margin. We started seeing some of the ramp this quarter and we are going to see an acceleration in Q4 and Q1.

Operator

Your next question comes from Guy Hardwick with Barclays.

Guy Drummond Hardwick

I wonder if you could guys could update us on the agreement with Amazon, whether that's had an impact on revenues in the quarter and also whether it's also some of the revenues, the unvested portion [indiscernible] has been netted off the revenues? And then a follow-up question on Hyve. Given there's more manufacturing growth and supply chain growth, I know you've kind of already answered the question, you would expect a positive mix on that, but you're saying within manufacturing, there's a negative mix. Is that -- am I understanding that correctly?

David Jordan

Thanks for the question. So we'll try to cover both of them. When you -- as you know, we announced a warrant agreement with Amazon. And what we shared at that time is we expect this to be mutually beneficial to both of us. And so this is an agreement that's 7 years long. So we would expect over the course of the agreement that both sides to benefit. I think it's too soon to get into exact specifics on how things played out in the quarter. But what I can tell you is our relationships across all of our customers within Hyve are very good, and we continue to invest in capabilities that add value to all of our partners.

When you think about the mix within margins as it relates to Hyve, you are correct that the AI server program that we've referenced, which has caused some of the margin decline year-over-year is a manufacturing program. And then a lot of the new programs that we are also manufacturing. And so this has been a year where we've had somewhat of a headwind to gross margins. But as we look forward, and as these new programs ramp, we feel very good about the trajectory of the margins as a lot of these new programs are neutral to accretive to Hyve in total.

Operator

Your next question comes from David Paige with RBC Capital Markets.

David Paige Papadogonas

I want to add on distribution and endpoint. One of your closest competitors have noted that there's still $300 million to $400 million on refresh to Windows 11. So it looks like you had good growth in PC in the quarter. So I just wanted to get your thoughts on, I guess, the demand environment the refresh cycle and what you see going forward?

Patrick Zammit

Yes. Thanks a lot. So PC did overall well and grew double digit. Now if you peel the onion, units were down. I mean we had forecasted the PC units to go down mid- to high single digit, which is what happened this quarter and more than offset by price increases and mix. So let me just provide some color here.

So indeed, the component price increase has driven an increase of average selling prices. But another phenomenon, which is very interesting is the fact that the market is buying more the mid-range and higher range type PCs rather than the low range. Why? Because also when our manufacturers get their allocations they allocate them to the midrange and the higher range of their portfolio. So some of the ASP increase is really due to components, but some of it is due to a change in mix. The refresh is not over. So -- and so we should still see some tailwinds because of that.

Now the price increase, as expected, is having some impact on the volume. It has less impact on B2B where we play. It will have -- it has more impact on B2C, where we don't place -- we have a very small play in the market. So PC continues to be overall in value, a very good category. And I just add that AI PCs continue to grow and represent now close to 50% of the total revenue for us and AI PC is potentially becoming an important part of the infrastructure to run AI workloads.

Operator

Your next question comes from Vincent Colicchio with Barrington Research.

Vincent Colicchio

Yes. Are you seeing customers consolidate their distribution relationships as technology becomes more complex? And is the company gaining wallet share as a result?

Patrick Zammit

So thanks a lot for the question. I mean as you have noticed, we grew faster than market, and we've done that consistently for many quarters. I think it's due to 2 things. So one, from a customer side, indeed, I mean, we have this collection of specialist approach, which means that we have a very appealing value-added value proposition by technology. And that puts our teams in a very good position to support customers who have to deliver business outcomes, which are more and more complex to deliver. So yes, I believe that our approach has makes us, I would say, probably very well differentiated to help our customers win the deals and grow.

But we see, at the same time, in the vendor community, a trend accelerating in terms of rationalizing the go-to-market. So reducing the number of direct customers, direct resellers and number of distributors. And because of our value prop because of the relationships we've built over the years, I think we are going to continue to benefit from that trend.

Operator

Your next question comes from Alex Valero with Loop Capital.

Alek Valero

My first question is on enterprise. So you've mentioned that you're seeing more growth in enterprise. It sounds like -- is this something that's going to continue. Can you talk to the kinds of things that enterprise customers are prioritizing? And where are you best positioned to capture that spend?

Patrick Zammit

Okay. So I'm going to distinguish between compute and storage. On compute, 2 things. So you still have the refresh of the general compute server base. And as you know, the new generation has more cores and can replace several subs from the old generation. So what you see is a decline in unit but an average value which is significantly higher. So we see very nice growth in general compute. And we also see, obviously, I mean, an increased demand when it comes to AI compute driven by the fact that companies are absolutely building their factories to take advantage of agentic AI. And what we see is some very large deals coming from large enterprises, but we are starting to see also midsized companies investing in that space.

On storage, what we see is a modernization and acceleration of the modernization of the data center, I think AI will continue to play a key role. The important aspect, if you want to get the full benefit of your language models, you need to have the data in a good shape, and that means investing in storage. So I mean, that's something we are seeing, too. And here for storage, we see an increase in units and of course, in value.

Alek Valero

Got it. That's super helpful. And just a quick follow-up on networking actually. So I see networking grew 19% year-over-year, although it was the slowest growing hardware cloud, what are the puts and takes there? Any color you can provide on networking.

Patrick Zammit

Yes. So networking, again, I just want to put some context. If you just go back last year was a little bit challenged category. Things have completely changed now. I mean you have a need for massive refresh I mean, WiFi 7 switches to support AI. So you have a series of tailwinds in networking, which are driving a nice increase in units. And on top of it, so the magnitude is not comparable to what we see in compute or PCs, but we start seeing some price increases also. And so the combination of the 2 makes the category very strong and I think it's going to continue for some time. So it's another category where we are very optimistic for the coming quarters.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Patrick for closing remarks.

Patrick Zammit

Thank you all for joining us this morning. As we conclude, I'd like to express my gratitude to our coworkers around the world whose hard work, dedication and commitment to make our success possible as well as to our partners for their continued trust and support. To everyone on today's call, thank you for your ongoing interest in TD SYNNEX, and I'm wishing you a great day.

Operator

This concludes today's conference call. You may now disconnect. Have a great day.