SYNNEX Corp. (NYSE:SNX) Q2 2018 Earnings Conference Call - Final Transcript

Jun 28, 2018 • 05:00 pm ET


SYNNEX Corp. (NYSE:SNX) Q2 2018 Earnings Conference Call - Final Transcript


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Good afternoon, and welcome to the SYNNEX Second Quarter Fiscal 2018 Earnings Call. [Operator Instructions]

At this time, for opening remarks, I would like to pass the call over to Ms. Mary Lai, Head of Investor Relations at SYNNEX Corporation. Miss, you may begin.

Mary Lai

Thank you, and welcome to the SYNNEX Corporation earnings call for the second quarter of fiscal 2018 ended May 31, 2018. Joining me on today's call is our President and CEO, Dennis Polk; our CFO, Marshall Witt; and our EVP and President of Concentrix Corporation, Chris Caldwell. The executive team will first review second quarter fiscal 2018 financial results followed by an overview of today's announcement to acquire Convergys. Following their prepared remarks, we will open the call to a Q&A session.

As a reminder, today's call is being webcast live and will be recorded. Please note that some of the information you will hear today consist of forward-looking statements within the meaning of the Federal Securities Laws. Such statements may relate to, without limitation, market, demand, investment, growth, revenue, non-GAAP net income and diluted EPS, amortization of intangibles, margins, adjusted operating margin, operating leverage, costs, tax rates, seasonality, integration, benefits, synergies, timing and other aspects of the proposed acquisition, dividends and the overall performance. Actual results or trends could differ materially from our expectations.

For more information, please refer to the risk factors discussed in our Form 10-K for fiscal 2017, and the discussion of forward-looking statements in our earnings release and Form 8-K filed with the SEC today. SYNNEX assumes no obligation to update any forward-looking statements, which speak as of their respective dates. Also, during the call, we will reference certain non-GAAP financial information. Reconciliation of non-GAAP and GAAP reporting is included in today's earnings release and the related Form 8-K available on our website at

This conference call is the property of SYNNEX Corporation and may not be recorded or rebroadcasted without our specific written permission. With that, I will turn the call over to our CFO for the financial update. Marshall?

Marshall Witt

Thank you, Mary and thank you all for joining us today. As Mary said, we issued two press releases today. First being our Q2 results and Q3 guidance, and the second announcing the definitive agreement we reached to acquire Convergys. I'll cover our quarterly results and guidance, and then Dennis and Chris will provide their thoughts on our numbers and the Convergys acquisition.

Our second quarter revenue, non-GAAP net income, and diluted EPS all exceeded expectations and beat the high-end of our guidance. Both revenue and non-GAAP diluted EPS also set Q2 records. On a consolidated basis, total revenue was $5 billion, up 26% compared to $3.9 billion in the same quarter last year and up 25% when you adjust for FX. Technology Solutions revenue was a record for Q2 at $4.5 billion, representing an increase of over 30% over the prior-year period. Organic growth was 13%, primarily driven by broad-based growth across the portfolio. This will be the last