TD SYNNEX Corporation

Good morning, my name is Audra and I will be your conference operator today. I would like to welcome everyone to the TD Cenex third quarter fiscal 2024 earnings call. Today's call is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. At this time for opening remarks, I would like to pass the call over to David Jordan, CFO of the Americas and Head of Investor Relations at TD Cenex. David, you may begin.

Thank you. Good morning, everyone, and thank you for joining us for today's call. With me today is Patrick Zamet, CEO and Marshall Witt, CFO. 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 expectations for future fiscal periods. Actual results may differ materially from those mentioned in these forward-looking statements as a result of risk and uncertainties discussed in today's earnings release. In the Form 8-K we filed today and the risk factors section of our Form 10-K and 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, including gross billings. Reconciliations of GAAP to non-GAAP results are included in our earnings press release and the related form 8K available on our investor relations website, ir.tdsinex.com. This conference call is the property of TD Sinex and may not be recorded or rebroadcast without our permission. I will now turn the call over to Patrick. Patrick?

Thank you, David. Good morning, everyone. And thank you for joining us today to discuss our third quarter operating results. I'm honored and very excited to address you today for the first time as the CEO of TD Cinex. Before I begin, I would like to thank our TD Cinex co-workers for their dedication and passion for our business, our partners and vendors for their trust and confidence in us, and for the collaboration we fostered together to take advantage of the business opportunities ahead. I start the call today by providing a few thoughts on the role we play in the broader IT ecosystem, key priorities for our business as we move forward, along with a brief update on our Q3 business performance. We remain a vital link in the IT ecosystem, helping vendors across the world access 150,000 IT solution providers who service everyone from the Fortune 100 to small and medium-sized businesses. What differentiates us is our global reach, end-to-end portfolio, and our specialized go-to-market approach. We have customized value propositions by technology that enable our vendors to increase their reach, recruit and enable partners, and provide a full suite of go-to-market services to accelerate growth. All of this is driven by an exceptional team of passionate people that are grounded in a customer-centric culture. Additionally, we are fortunate to have high-quality and trusted relationships across the IT ecosystem and are committed to continuing to be a partner of choice around the globe. Moving on to our business priorities, we have a long track record of delivering profitable growth and sustainable free cash flow, and we expect that will continue. As we move forward, our teams are focused on four major business priorities. The first area of focus is revenue growth, which will be delivered through geographical expansion, ensuring we cover both endpoint and advanced solutions technologies, expanding existing vendor franchises as well as emerging vendors, and ensuring we meet the needs of our customers. The second priority is being focused on pricing and margin management. We expect to achieve this by continuing to enhance our value proposition, improving our portfolio of services, and remaining disciplined in our execution to enable returns to meet or exceed our expectations. The third area of focus is managing our cost to gross profit percentage, which is a comparison of non-GAAP SG&A to gross profit. It is a key metric and helps to ensure we drive profitable growth. We expect to improve our cost to gross profit percentage through operational discipline, embracing technology and automation, and investing in our people who ultimately make the decisions on opportunities we choose to pursue. The fourth priority is capital allocation. It is critical we remain disciplined around working capital management and free cash flow generation. We are committed to creating value for stockholders by focusing on investments at accretive returns and returning excess cash to stockholders. Moving on to our Q3 performance. We continue to be optimistic around the IT market recovery. Q3 was a strong quarter, reinforcing our optimism regarding IT market recovery. In particular, we saw significant growth across geographic segments and in both our endpoint and advanced solutions businesses. Additionally, gross billings in Q3 grew 9%, coming in above the high end of our range. These results underscore that our broad global reach, extensive line card, and effective execution of our strategy are helping us grow slightly ahead of market. Within the quarter, we experienced year-over-year margin decline driven by product mix and tough compares in HIFE. Our cost-to-growth profit percentage remained consistent, demonstrating our ability to control our costs while focusing on profitable growth. Looking ahead, I'm excited about the trajectory of TDCnext. Based on our Q3 results and Q4 expectations, we believe the market is returning to growth and we are uniquely positioned to expand our coverage and services and deliver value-added solutions to our customers. Lastly, I want to reiterate my gratitude to our team for everything you do to make us the partner of choice in IT distribution. Our people and our culture are what differentiates us in the industry. I will now pass it over to Marshall so that he can provide additional details on our financial performance and outlook. Marshall?