TD SYNNEX (NYSE: SNX) delivered record financial results for its fiscal third quarter ended August 31, 2026, reporting net revenue of $21.56 billion—an increase of 37.7% year over year—and an 89.1% surge in GAAP diluted earnings per share to $5.18. The global technology distributor and systems aggregator benefited from accelerating enterprise artificial intelligence deployments and robust demand across its Hyve Solutions data center manufacturing business, topping the high end of management’s guidance across all headline metrics.
The company announced its results on September 24, 2026, via an official Form 8-K filing with the SEC, confirming that enterprise clients and hyperscalers are transitioning from experimental AI pilots to large-scale production deployments.
Key Takeaways
- Record Top-Line Scale: Net revenue climbed 37.7% year over year (38.4% in constant currency) to $21.558 billion, while non-GAAP gross billings surged 40.0% to $31.828 billion.
- Operating Leverage Expansion: GAAP operating income surged 67.6% to $642.879 million, expanding GAAP operating margin by 53 basis points to 2.98%. Non-GAAP operating income reached $736 million, up 55.1%.
- Working Capital Absorption: Operating cash flow shifted to a deficit of $(916.717) million and free cash flow landed at $(975.601) million, driven by a 60.9% inventory build to $15.292 billion to support massive AI and data center hardware shipments.
- Stockholder Returns and Dividend Hike: TD SYNNEX returned $139 million to stockholders through $100 million in share repurchases and $38 million in dividends, while raising its quarterly dividend by 9% to $0.48 per share.
Financial Performance: Q3 FY2026 vs. Q3 FY2025
TD SYNNEX demonstrated broad-based operational leverage during the quarter. While gross margin contracted modestly by 61 basis points to 6.61% due to product mix shifts toward high-volume server assemblies, disciplined operating expense control propelled substantial bottom-line gains. Selling, general, and administrative expenses rose just 4.9% to $782.535 million despite the 37.7% revenue expansion.
| Financial Metric ($ in millions, except EPS) | Q3 FY26 (Ended Aug 31, 2026) | Q3 FY25 (Ended Aug 31, 2025) | Year-over-Year Change |
|---|---|---|---|
| Revenue | $21,558 | $15,651 | +37.7% |
| Non-GAAP Gross Billings | $31,828 | $22,731 | +40.0% |
| Gross Profit | $1,425 | $1,130 | +26.2% |
| Gross Margin | 6.61% | 7.22% | -61 bps |
| Operating Income (GAAP) | $643 | $384 | +67.6% |
| Non-GAAP Operating Income | $736 | $474 | +55.1% |
| Net Income (GAAP) | $416 | $227 | +83.5% |
| Diluted EPS (GAAP) | $5.18 | $2.74 | +89.1% |
| Non-GAAP Diluted EPS | $5.68 | $3.58 | +58.7% |
| Free Cash Flow | $(976) | $214 | N/A |
For investors assessing how non-GAAP adjustments affect headline numbers, understanding GAAP vs. non-GAAP earnings and adjusted EPS is critical. TD SYNNEX’s non-GAAP adjustments primarily excluded $73.3 million in intangible asset amortization and $16.3 million in share-based compensation, alongside restructuring and integration expenses.
Enterprise AI Adoption and Hyve Drive Acceleration
The primary catalyst for the revenue outperformance was strong demand across the company’s core technology distribution and Hyve Solutions manufacturing units. Hyve designs, builds, and deploys custom hyperscale server racks and storage clusters specifically configured for artificial intelligence workloads.
In the official release, Patrick Zammit, Chief Executive Officer of TD SYNNEX, noted that “Enterprise AI adoption is progressing toward broader production deployments. Data center modernization remains a priority as organizations prepare for next-generation infrastructure requirements, while AI is driving new security, governance, and compliance requirements across technology environments.”
As enterprise IT departments upgrade legacy on-premises architecture and connect edge hardware to cloud data centers, demand for high-end accelerators, high-speed networking switches, and enterprise storage arrays has outstripped historical replacement cycles. Readers tracking broader tech disclosures can review our guide on how to read an earnings report: beats, misses, and guidance.
Working Capital Dynamics: The Balance Sheet Trade-Off
While income statement results were exceptionally strong, the cash flow statement revealed the capital intensity required to support rapid hardware delivery cycles. TD SYNNEX reported negative cash flows from operating activities of $(916.717) million for the quarter, compared to positive $246.141 million in the year-ago period. Factoring in capital expenditures of $58.884 million, quarterly free cash flow dropped to $(975.601) million.
This cash absorption was driven by sharp balance-sheet expansion. Inventories surged from $9.504 billion at the close of fiscal 2025 (November 30, 2025) to $15.292 billion as of August 31, 2026—an increase of $5.788 billion, or 60.9%. Accounts receivable also expanded from $11.708 billion to $14.954 billion.
To fund this working capital cycle, TD SYNNEX increased short-term borrowings from $1.018 billion to $1.926 billion, while maintaining long-term borrowings of $3.595 billion. Total cash and cash equivalents stood at $749.302 million at the end of the quarter, compared to $2.435 billion nine months prior. Management noted that inventory turns and cash collection schedules are expected to normalize as custom rack deliveries are fulfilled and invoiced to hyperscale customers.
Fourth Quarter Fiscal 2026 Guidance
Looking ahead to the fiscal fourth quarter ending November 30, 2026, TD SYNNEX issued forward-looking guidance reflecting sustained momentum:
- Revenue: $21.8 billion to $22.6 billion.
- Non-GAAP Gross Billings: $31.4 billion to $32.4 billion.
- GAAP Net Income: $368 million to $408 million.
- Non-GAAP Net Income: $454 million to $494 million.
- GAAP Diluted EPS: $4.58 to $5.08 (based on 79.2 million diluted shares).
- Non-GAAP Diluted EPS: $5.65 to $6.15.
Additionally, the Board of Directors declared a quarterly dividend of $0.48 per common share, payable October 30, 2026, to stockholders of record as of October 16, 2026. For complete educational resources on fundamental equity analysis, visit the ECMSource learning hub.
Sources
- TD SYNNEX Corporation Form 8-K Exhibit 99.1: Q3 Fiscal 2026 Earnings Release, filed September 24, 2026, U.S. Securities and Exchange Commission.
- TD SYNNEX Corporation Form 8-K Current Report, filed September 24, 2026, U.S. Securities and Exchange Commission.
- GAAP vs. Non-GAAP Earnings: What Adjusted EPS Really Means, ECMSource.
- How to Read an Earnings Report: Beats, Misses, Guidance, ECMSource.
Disclosure: This article is for informational purposes only and is not investment advice.