TD SYNNEX Q1 2026 Record Gross Billings and EPS Analysis

Key factors behind TD SYNNEX’s record Q1 2026 gross billings and EPS

TD SYNNEX reported a strong start to fiscal 2026, including record non-GAAP gross billings and record non-GAAP EPS, supported by (1) broad-based demand and channel execution in Distribution and Hive, (2) mix and pricing dynamics (including ASP-related effects and limited pull-forward), and (3) operating leverage plus disciplined cost and margin management.

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1) Distribution and Hive both delivered accelerated growth (top-line driver)

• Non-GAAP gross billings were $25.8B in Q1 2026, up 24% year-over-year (and 20% constant currency), and exceeded the high end of guidance, driven by accelerated growth in both Distribution and Hive. ¹²
• Distribution gross billings were $22.0B, up 17% year-over-year and exceeding expectations, with broad-based strength across product categories and geographies. ¹
• Hive non-GAAP gross billings were $3.8B, up 95% year-over-year, exceeding expectations. ³
• Management specifically attributes the quarter’s results to “strong performance across both the distribution and Hive businesses.” ²

Interpretation: The records are not the result of one segment alone; both engines contributed meaningfully to gross billings growth—Distribution via broad technology-category/geography strength and Hive via very strong hyperscale/AI data center infrastructure demand. ¹³²

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2) Mix, pricing (ASP pass-through), and limited pull-forward supported the gross billings beat

A. Evidence of ASP effects

• TD SYNNEX estimated that ~2 percentage points of year-over-year gross billings growth came from higher average selling prices (ASPs) and modest pull-forward activity, by partnering with OEMs to pass through higher memory and component costs. ³

B. Management’s view that pull-forward was limited in Q1

• TD SYNNEX described a framework to assess seasonality and concluded pull-forwards have been limited for Q1, based on:
  • seasonality checks comparing Q4 to Q1 unit patterns versus prior years, and
  • internal team “color” (survey), plus
  • observations about short quote validity dates and rapid market reaction affecting end-customer behaviors. ⁴

C. Demand not deteriorating in early quarters

• TD SYNNEX stated it has not seen demand destruction yet in Q1, supporting that the growth appears more structural than purely timing-driven. ⁵

Interpretation: The company acknowledges that some portion of gross billings growth can be tied to pricing and timing effects, but it argues pull-forward pressure was constrained by seasonality consistency and market dynamics (quote validity/rapid re-pricing). ³⁴ That helps explain why gross billings and EPS could both land at record levels without relying solely on aggressive timing. ¹²

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3) Operating leverage and expanding margins translated gross billings into higher EPS

A. Operating income and EPS surged

• Non-GAAP operating income was $590M, up 48% year-over-year (or 44% constant currency). ¹
• Non-GAAP EPS was $4.73, up 69% year-over-year and above the high end of guidance. ¹
• GAAP EPS was $4.04, up 104% year-over-year and also above the high end of guidance. ¹

B. Margin expansion factors (cost discipline + favorable mix/geography)

• TD SYNNEX stated that its “accelerated growth” was accompanied by expanding gross and operating margins, driven by favorable geography and product mix and disciplined cost management. ⁶

C. Distribution margins improved via inventory/cost actions

• Distribution non-GAAP operating margin as a % of gross billings was 2%, up 34 basis points year-over-year. ¹
• The company estimated Distribution gross margins benefited by ~10 to 15 basis points, driven by incremental profit from strategic inventory purchasing. ¹

Interpretation: Record gross billings mattered, but the EPS outcome depended on profitability conversion—operating income growth (48% non-GAAP) and margin expansion (favorable mix/geography + disciplined costs) demonstrate meaningful operating leverage. ⁶¹

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4) Business-specific drivers: category and customer momentum in Distribution; AI infrastructure demand in Hive

A. Distribution: customer investment and category tailwinds

• TD SYNNEX pointed to continued customer investment in infrastructure, software, and security, plus strength in infrastructure and PCs (to help partners in an inflationary cost environment and dynamic supply chain). ²
• Management also cited category momentum drivers:
  • PC refresh continues as a tailwind and AI PC adoption is increasing, ⁷
  • AI-enabled server purchases are accelerating as customers define use cases and build “AI factories,” ⁷
  • networking is back (single to double digit growth by region). ⁷
  • storage had a “very good quarter.” ⁷

B. Hive: hyperscale demand for cloud/AI data center infrastructure

• Hive results were driven by continued demand for cloud- and AI-enabled data center infrastructure across hyperscale customers, with growth broad-based across programs and customer base. ⁸
• Hive’s manufacturing and supply chain execution translated demand into gross billings growth, with integrated engineering, manufacturing, and supply chain capabilities enabling rack-level solutions deployment at scale. ⁸

Interpretation: Distribution’s broad-based tech category strength and Hive’s hyperscaler AI infrastructure demand are both consistent with the magnitude of gross billings growth seen in Q1. ¹³⁸⁷

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5) Quality of cash/working capital management supported confidence and EPS conversion

While EPS is accounting-based, TD SYNNEX tied execution to cash discipline—important because it signals operational control in a quarter with fast growth:

• Net working capital ended the quarter at $4.2B, and the company reported a gross cash conversion cycle of 16 days, improved by 4 days year-over-year. ⁹
• The company stated it ensured the “right amount of inventory,” going long on inventory in Distribution for products on allocation/possible short supply, while also continuing working capital investments in Hive. ¹⁰

Interpretation: Maintaining working capital performance despite inventory needs and business growth supports the credibility of margin and earnings conversion. ⁹¹⁰

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Bottom line: the “record” combination was growth + mix/pricing + conversion

TD SYNNEX’s record Q1 2026 gross billings ($25.8B) and EPS (non-GAAP $4.73; GAAP $4.04) were driven by:

1. simultaneous acceleration in Distribution and Hive (Distribution +17% to $22.0B; Hive +95% to $3.8B), ¹³
2. ASP pass-through and modest timing effects, with management saying pull-forward was limited for Q1 and no demand destruction was observed, ³⁴⁵
3. expanding margins and operating leverage from favorable mix/geography and disciplined cost management (including inventory purchasing benefits in Distribution), ⁶¹
4. category- and customer-specific momentum (PC/AI PC, AI servers, networking in Distribution; hyperscale AI data center infrastructure in Hive). ⁷²⁸

Together, these factors explain how strong gross billings translated into sharply higher operating income and EPS in the quarter. ¹⁶²