Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported September 24, 2026 · Beat 6 of last 7 quarters
TD Synnex Corp reported Q3 FY2026 revenue of $21.56B, a beat of 14.0% against consensus, and EPS of $5.68, a beat of 20.9%.
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TD SYNNEX's Q3 results show the AI infrastructure buildout broadening from hyperscale to enterprise, with Hyve billings up 117% and a landmark NVIDIA AI factory deployment through the channel. The company is deploying significant working capital to support committed customer ramps, signaling confidence in multi-quarter demand visibility. Management's cautious optimism and stable-to-improving Hyve margin commentary suggest the distribution layer is becoming a critical enabler of AI factory deployments at scale.
TD SYNNEX reported record Q3 FY2026 results with non-GAAP gross billings of $31.8B, up 40% YoY, and non-GAAP EPS of $5.68, up 59% YoY, both above the high end of guidance. Distribution grew 27% to $24.8B with double-digit growth across each region, led by Advanced Solutions (+37%) on data center infrastructure, software and AI-related technologies. Hyve grew 117% to $7.0B, with manufacturing up over 130% and supply chain services up over 90%. Free cash flow consumption was approximately $1B as the company invested in Hyve working capital for new customers and programs, pushing net working capital to $6.5B and gross cash conversion cycle to 22 days. The company returned $100M via buybacks and $38M via dividends, ended with $749M cash and 1.9x net leverage, and declared a $0.48 per share dividend.
Management guided Q4 non-GAAP gross billings to approximately $31.9B (±$500M), up ~31% YoY at the midpoint, with revenue of ~$22.2B, non-GAAP net income of ~$474M and non-GAAP diluted EPS of ~$5.90 (±$0.25), up ~54% at the midpoint. Hyve gross billings are expected to increase sequentially as new customer programs ramp, with shipments from previously announced new customers beginning in Q4. The company expects to generate cash in Q4 as recently deployed working capital normalizes, and sees further improvement in Hyve cash conversion in fiscal 2027. On margins, management said several pipeline opportunities are being awarded at neutral-to-accretive margins versus current performance, and expects modest Hyve margin improvement over time as awarded programs mature, though some programs will not reach full potential until the back half of fiscal 2027. Patrick Zammit described the tone as "cautiously optimistic" for next year, citing broad-based demand, enterprise movement toward production-scale AI factories, and no signs of concern in backlog or forecast.
“This quarter, TD SYNNEX and Mach3 Systems signed an agreement to support an NVIDIA AI factory powered by Vera Rubin NVL72 systems. This is one of the largest enterprise AI factory infrastructure deployments expected to be delivered through the channel”
on Enterprise AI factory win
“As we look forward, that is what gives us confidence that Hyve's margins have stabilized and should improve as we move forward.”
on Hyve margin trajectory
“When you look at the forecast we've received or the backlog we have, we don't see any sign of concern today.”
on Demand visibility
What is driving improved margin discipline in pipeline awards, and how sustainable is it as competition for AI infrastructure intensifies?
David Jordan said Hyve is ramping three new hyperscalers with multiple programs each; new programs, predominantly manufacturing, are neutral to accretive to Hyve, and maturing programs continue to find margin improvement, giving confidence Hyve margins have stabilized and should improve.
With concerns about data center spending peaking, how are you thinking about the data center market for the next year or two, and are Hyve contracts cancelable?
Patrick Zammit said growth was broad-based and Q4 guidance reflects that; enterprise investment in agentic AI is accelerating, and the company is cautiously optimistic for next year. David Jordan noted programs are longer-term agreements with potential cancellation rights if performance lapses, but volumes can move around; backlog and forecast show no signs of concern.
Can you elaborate on the mix that impacted gross margins, particularly the Americas Distribution margin decline?
David Jordan attributed the decline to product mix, including a few larger infrastructure build-out transactions in North America with slightly lower gross margins, and within Hyve the large AI server program that is profitable but below average Hyve margin. He said teams have managed margin and pricing well and operating leverage remains intact.