SYNNEX Corp. (NYSE:SNX) Q4 2019 Earnings Conference Call - Final Transcript

Jan 09, 2020 • 05:00 pm ET

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SYNNEX Corp. (NYSE:SNX) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Dennis Polk

another area to partner on with a customer versus focus on the revenue implications. As such, we will ensure a smooth transition. Equally important, we are focused on earning a solid return on the design and integration services we provide and we will expect this to continue as Marshall indicated. While the top line will decline, we will benefit from lower cash use in this business and will ensure this capital is properly utilized.

Now turning to our outlook for Q1 fiscal 2020. In our Technology Solutions business, we expect the market to remain competitive, but we are confident that we can leverage our line card and cross-selling efforts to maintain our sales momentum. As a result, we expect our core TS business to grow better than market. Regarding our project and integration business, while the last two quarters have been much more than expected, we see Q1 at a more normalized level, essentially in line with Q1 2019.

In Concentrix, as Chris noted, we expect our Q1 to be within normal seasonal ranges with positive revenue growth and margin expansion. As we look at the markets we serve, businesses are continuing to invest in new technologies and we remain at the forefront of those actions strategically providing solutions enabling our partners and customers to grow. As we make our way through the spin process, we will continue to invest in both Technology Solutions and Concentrix and expect to deliver the best results possible to the separation date. Regarding Concentrix, I'm very happy for Chris to be taking on the CEO role for Concentrix once the separation occurs. Chris understands the BPO market very well, is a well-regarded leader in the industry, has taken the best of the SYNNEX culture in forming Concentrix, and has a very solid team to execute a successful independent company following the separation. My expectation is that Concentrix will be even more exciting in the next 10 years than in the past 10 where it grew from $100 million in annual revenue to nearly $5 billion. I'm equally energetic about the prospects of the standalone TS business. I believe the most exciting times in the TS business are to come as well considering the current positive business momentum of TS, separate capital structure post separation, and plentiful investment opportunities in the market.

I want to thank all our passionate and dedicated associates around the world for making this journey possible and thanks to our business partners and shareholders for their continuous support. With that, I would like to open up the call for questions.