TD SYNNEX Q2 revenue beats estimates, analysts raise targets
TD SYNNEX reported record Q2 FY26 revenue of $19.58 billion, up 31% year over year, surpassing analyst estimates. Non-GAAP diluted EPS increased 62.2% to $4.85, driven by strength in Distribution and Hyve segments. The company raised its quarterly dividend by 9% to $0.48 per share. For Q3, revenue is projected between $18.2 billion and $19.0 billion, exceeding consensus. Following the results, Morgan Stanley and Barrington Research increased their price targets on the stock.
*this image is generated using AI for illustrative purposes only.
TD SYNNEX Corp reported fiscal second-quarter results for the period ended May 31, 2026, with revenue increasing 31% year over year to $19.58 billion, exceeding the analyst consensus estimate of $16.80 billion. The company achieved record non-GAAP diluted earnings per share (EPS) of $4.85, a 62.2% increase from the prior year, topping analysts’ estimates of $4.14. GAAP diluted EPS rose to $4.15 from $2.21 a year earlier. The performance was driven by broad-based strength across its Distribution and Hyve segments, with non-GAAP gross billings reaching $28.9 billion, a 33% year-over-year increase.
Patrick Zammit, Chief Executive Officer of TD SYNNEX, attributed the performance to consistent execution against its strategy and deepening relationships. The Distribution segment generated non-GAAP gross billings of $23.4 billion, up 22% year over year, while the Hyve segment reported non-GAAP gross billings of $5.5 billion, surging 117% year over year. The company returned $151 million to stockholders through share repurchases and dividends, comprising $112 million of buybacks and $39 million in dividends.
Consolidated Financial Highlights for Q2 FY26
TD SYNNEX reported substantial growth across primary financial metrics. Operating income grew 58.3% to $519 million, while net income surged 80.7% to $334 million. Non-GAAP operating income was $615 million, an increase of 49% year over year.
| Metric | Q2 FY26 | Q2 FY25 | Net Change |
|---|---|---|---|
| Revenue | $19,575 million | $14,946 million | 31.0% |
| Non-GAAP gross billings | $28,879 million | $21,648 million | 33.4% |
| Operating income | $519 million | $328 million | 58.3% |
| Net income | $334 million | $185 million | 80.7% |
| Non-GAAP diluted EPS | $4.85 | $2.99 | 62.2% |
Segment Performance and Strategic Initiatives
The Distribution segment saw operating margin expansion, with non-GAAP operating income increasing 36% year over year to $434 million. Advanced Solutions gross billings increased 31% year over year, driven by infrastructure and security strength. Endpoint Solutions gross billings increased 13% year over year, supported by higher ASPs in PCs.
Hyve generated non-GAAP operating income of $181 million, increasing 89% year over year. Manufacturing represented approximately two-thirds of Hyve in the quarter, with supply chain services representing the remaining one-third. The company is expanding manufacturing facilities by more than 1 million square feet in the US to support hyperscalers and has secured programs with the top five US-based hyperscalers.
Fiscal 2026 Third Quarter Outlook
Looking ahead to the fiscal third quarter ending August 31, 2026, TD SYNNEX projects revenue between $18.2 billion and $19.0 billion, above the analyst consensus estimate of $16.83 billion. The company expects non-GAAP gross billings of approximately $27.7 billion and non-GAAP diluted EPS between $4.25 and $4.75, exceeding the consensus estimate of $4.03. The company forecasts GAAP diluted EPS of $3.40 to $3.90, above the $3.04 estimate.
| Metric | Q3 2026 Outlook |
|---|---|
| Revenue | $18.2 - $19.0 billion |
| Non-GAAP diluted EPS | $4.25 - $4.75 |
| Net income | $273 - $313 million |
| Non-GAAP net income | $341 - $381 million |
Analyst Reactions
Following the earnings announcement, analysts adjusted their price targets on TD SYNNEX. Morgan Stanley analyst Erik Woodring maintained the stock with an Overweight rating and raised the price target from $341 to $374. Barrington Research analyst Vincent Colicchio maintained the stock with an Outperform rating and raised the price target from $202 to $325. TD SYNNEX shares fell 2.4% to trade at $271.04 on Friday.
Dividend Declaration
The Board of Directors declared a quarterly cash dividend of $0.48 per common share, a 9% increase year over year. The dividend is payable on July 31, 2026 to stockholders of record as of the close of business on July 17, 2026.
How will the expansion of over 1 million square feet in US manufacturing facilities impact capital expenditure plans in the coming fiscal year?
Can the 117% surge in Hyve segment gross billings be sustained as supply chain services normalize from current elevated levels?
What specific risks does the company face regarding potential margin compression if PC average selling prices (ASPs) stabilize in the second half of the year?
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