TD SYNNEX Corporation

Good morning. My name is Warren and I will be your conference operator today. I would like to welcome everyone to the TD Cinex first quarter fiscal 2026 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 Nate Friedel, Head of Investor Relations at TD Cinex. Nate, you may begin.

Thank you. Good morning, everyone, and thank you for joining us for today's call. Joining me on today's call are Patrick Zamet, our CEO, and David Jordan, our 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 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 8K we filed today, in the risk factors section of our form 10K, 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 in the related form 8K available on our investor relations website, ir.tdsynx.com. This conference call is the property of TDSYNX and may not be recorded or rebroadcast without our permission. I will now turn the call over to Patrick. Patrick?

Thank you, Nate. And good morning, everyone. Thank you for joining us today. We are very pleased with how we've started fiscal year 26. In the first quarter, we delivered record non-GAAP gross billings and non-GAAP earnings per share, while continuing to expand profitability and built on the execution and momentum established over the past year. Our results reflect strong performance across both our distribution and Hive businesses, as well as the continued alignment between our strategy and the needs of our partners. Together, this reinforces the strength of our operating model and our ability to create long-term value for our shareholders. Before turning to our operating results in more detail, I want to start by discussing my rationale for updating our reportable segments. These changes better reflect how I manage the business and allocate capital and resources. Going forward, we will primarily discuss our performance and strategy through two businesses, distribution, comprised of our three regional distribution segments, and Hive. Each business has a distinct value proposition and operating model with clear drivers of growth, profitability, and returns. We believe this structure provides clearer insight into how our businesses perform and how we create long-term shareholder value. With that context, I'll start with our distribution business. Within distribution, we delivered a strong start to the year with excellent results across all geographies and key technology categories. Performance was supported by continued customer investment in infrastructure software and security, as well as notable strength in infrastructure and PCs as we help partners navigate an inflationary cost environment and a dynamic supply chain. By leveraging our global reach, diversified sourcing, and close vendor partnerships, we are helping our customers manage supply chain constraints, navigate pricing, improve availability, reduce uncertainty, and plan deployments with greater confidence, while helping vendors efficiently extend their reach and activate demand across markets. Our accelerated growth was accompanied by expanding growth and operating margins, driven by favorable geography and product mix, and disciplined cost management. These results underscore the strength and value proposition of our global distribution business, delivering attractive returns today while positioning us to capture opportunity tomorrow. Last quarter, we outlined four strategic pillars that define how we compete, create value across our portfolio, and differentiate ourselves in the channel. And these continue to shape where we invest and how we execute moving forward. These pillars are omni-channel engagement, specialized go-to-market, best-in-class enablement, and expanding our brand visibility. I'll highlight a couple of examples of how we are bringing this to life, starting with omnichannel engagement, where we are making it easier for customers to engage with TDCnext in the ways that best fit their workflows. This approach is powered by our partner-first platform and suite of digital services that integrate billions of customer, vendor, and end-user data points to drive demand at scale, supporting continued growth within our SMB customer market globally. Our capabilities are translating into tangible results. By embedding predictive AI directly into our onboarding and go-to-market motions, we are meaningfully increasing the number of customers onboarding new vendor portfolios each quarter, helping vendors expand their reach within our ecosystem and accelerating profit-generating activity across the ecosystem. Our agenting AI assistants are now supporting customers and internal teams across complex workflows, from multi-vendor solutions aggregation to intelligent quoting and cross-sell recommendations, helping shorten deal cycles and improve attach rates. Paired with our relationship-driven model, this allows us to scale expertise and engagement globally without compromising the high-touch experience that differentiates TDCinex. This quarter, our progress was reinforced by achieving Microsoft Frontier Distributor designation across all of our regions globally, a recognition of excellence in support, security, channel enablement, platform innovation, and technical delivery. This designation highlights our ability to bring technologies to market in a consistent, scalable way across regions and digital platforms, marketplaces, high touch engagement models, and to do so consistently as customers move from AI experimentation to deployment. Building on that foundation, our specialized go-to-market strategy continues to deliver tangible results, particularly in security. Earlier this month, TDCnext was named Palo Alto Network's Fiscal Year 25 Distributor of the Year in North America, recognizing our ability to drive above-market growth while expanding customer participation and accelerating new customer acquisitions. Importantly, this recognition reflects the value of our specialized distribution model. By combining deep market expertise by technology and customer segment with our global reach, we enable vendors to reach new customers, activate customers more effectively, and drive growth beyond what they can achieve on their own. Capabilities such as inventory management, seamless customer transitions, pre- and post-sales support, and higher levels of automation enable our vendors and customers to scale with speed and consistency, reinforcing the long-term benefits of leveraging the distribution channel. Now turning to Hive, we delivered an impressive quarter driven by continued demand for cloud and AI-enabled data center infrastructure across our hyperscale customers. Growth was broad-based across our programs and customer base. Our integrated engineering, manufacturing, and supply chain capabilities enabled efficient deployment of sophisticated rack-level solutions at scale, which translated into meaningful year-over-year operating income growth. These results reinforce high strategic opportunities within this fast-growing market. Building on this momentum, Hive is focused on evolving its strategy over time toward more complete system-level solutions across traditional compute, accelerated compute, networking, and storage offerings. Through targeted investments in engineering and manufacturing capabilities, we are helping customers simplify design, accelerate deployment, and reduce total cost of ownership. These ongoing investments have attracted a growing pipeline of opportunities, including signing programs with two new hyperscale customers in 2026, which we expect to contribute to results in future quarters. We have already started to ramp our third U.S.-based hyperscaler, and with these two wins, we now have at least one program secured with each of the top five U.S.-based hyperscalers. To close, we remain very confident in the long-term value creation opportunities across both distribution and HIFE. The addressable markets we serve are continuing to expand and we believe our differentiated value proposition and strategy positions us to capture a growing share of that opportunity while delivering attractive returns for shareholders. Now, I will pass it to David to go over the financial performance and outlook in more detail. David?