tkal · TD SYNNEX Q3 FY26 — Amazon Got the Servers, the Warrant, and the Working Capital

TD SYNNEX Q3 FY26 — Amazon Got the Servers, the Warrant, and the Working Capital

My read: the working capital TD SYNNEX has tied up since November is the new price of growing Hyve, not a one-quarter lump, and the November 30 balance sheet will show it. If trade working capital (receivables plus inventory minus payables) ends fiscal 2026 above the $5.71B it reached in May, I'm right; if it falls back to $4.75B or below, the top of the range it held for two years, the build was timing and I'm wrong. The print itself was a record: revenue $21,558M (+37.7%), gross billings $31,828M (+40.0%), non-GAAP EPS $5.68 against a $4.65 consensus. It also consumed $976M of free cash flow, and $3,413M went into receivables and inventory in one quarter. The stock fell 9.88%. The market is not disputing the demand. It is asking who pays to carry it.

Published September 24, 2026 · Corrected September 28, 2026 (trade working capital band restated to $3.54B–$4.75B from filed balances; the falsifier threshold moves to $4.75B; three growth rates and the EPS-bridge sentence corrected) · Post-print synthesis (quarter ended August 31, 2026, reported before the open September 24, 2026) · SNX · NYSE · Committed analyst read — not advice · For analysts covering IT distribution, AI server supply chains, hyperscaler ODMs, and the working capital that funds them

Gross billings

$31.83B

+40.0% YoY

Non-GAAP EPS

$5.68

+58.7% YoY

Free cash flow

−$976M

vs +$214M a year ago

Inventories

$15.29B

+67.3% YoY

Quarter ended August 31, 2026 · reported September 24, 2026 · figures from the Q3 FY26 8-K Exhibit 99.1 unless marked; prior balance sheets from the Forms 10-Q and 10-K

A record the tape refused

Set the beat aside for a moment, because it is not in dispute. Revenue came in $2.558B above the top of the company's own $18.2B to $19.0B outlook. Non-GAAP EPS of $5.68 was 22.15% over consensus, the third straight quarter this fiscal year of beating it ($4.73 against $3.20 in Q1, $4.85 against $4.10 in Q2). The chief executive, Patrick Zammit, opened with "another record quarter, with Distribution and Hyve both performing above our expectations and growing above market." All of that checks out against the filing.

The stock still fell 9.88%, from $287.89 to about $259.44 (unverified — last regular-session trade, market data rather than a filing figure). I don't read that as the market disbelieving the demand. It read the other two statements in the release, the cash flow statement and the balance sheet, and saw that "growing above market" had become a question of who carries the inventory. For a distributor that has always been the real question. It is just usually too quiet to notice.

The income statement is the thin part

Gross margin fell 61 basis points to 6.61%, and it has fallen every quarter this year: 7.30%, 6.84%, 6.61%. What rescued operating income was SG&A, which rose only $36M to $783M, so the 2.98% operating margin widened even as gross margin narrowed. That operating leverage is genuine. But it sits on a business where 93.4% of every revenue dollar is cost of revenue before overhead touches it, which leaves very little room for error.

Of $21,558M in revenue, $20,133M is cost of revenue. A 6.61% gross margin leaves $1,425M to pay for SG&A, interest and tax, and $416M reaches net income. The income statement is thin; the balance sheet does the heavy lifting. Interest shown net of other income: $121M interest expense and finance charges less $33M other income.

The mix explains the slide. By the presentation's numbers (unverified against the filing), Hyve billed about $7.0B, up 117%, and is now 22% of billings. On the same unverified basis, its operating income rose only 56%, to $253M, so its margin on billings fell to 3.61% from 5.04%. The chief financial officer called the new programs "neutral to accretive" (unverified pending the official transcript). What that phrase leaves out is that the programs are accretive in dollars and dilutive in rate, and the rate is what a distributor's multiple is built on. Distribution carried the profit, again per the presentation (unverified): $483M of operating income, up 55%, on billings up 27%, with Europe's operating income up 116%. The part of the business that earns the best returns grew slowest. The part that grew fastest is where the balance sheet went.

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The headline numbers are above. The 9 sections below carry the mechanism, the peer read, the valuation work, and the dated tests that decide it.

Where the $416M went
Two flat years, then a new floor
The composite, and what it averages away
The rebate that indexes to your own stock
The guide says the same thing twice
The strongest case against me
What decides it
The trade (analysis, not advice)
Bottom line

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Sources

TD SYNNEX Corporation — "TD SYNNEX Reports Record Fiscal 2026 Third Quarter Results" (Form 8-K, Exhibit 99.1), September 24, 2026 — primary source for every reported figure unless otherwise marked. Quarter ended August 31, 2026 vs August 31, 2025, $ thousands: revenue 21,558,406 / 15,650,924; cost of revenue (20,132,992) / (14,521,071); gross profit 1,425,414 / 1,129,853; SG&A (782,535) / (746,196); operating income 642,879 / 383,657; interest expense and finance charges, net (120,518) / (91,188); other income (expense), net 32,889 / 792; provision for income taxes (139,010) / (66,466); net income 416,240 / 226,795; diluted EPS $5.18 / $2.74 on 79,413 / 81,901 diluted shares. Non-GAAP gross billings 31,827,687 / 22,731,167; non-GAAP operating income 736,421 / 474,929; non-GAAP net income 455,864 / 296,244; non-GAAP diluted EPS $5.68 / $3.58. Cash flow: operating (916,717) / 246,141; purchases of property and equipment (58,884) / (32,221); free cash flow (975,601) / 213,920; nine-month free cash flow (2,237,047) / (32,663); accounts receivable (1,992,906); receivables from vendors (80,913); inventories (1,419,742); accounts payable 1,309,585; other operating assets and liabilities 704,505; depreciation and amortization 106,242; share-based compensation 16,251; provision for common stock warrants 14,502; provision for doubtful accounts 9,363; net borrowings on revolving credit loans 1,500,057; principal payments on long-term debt (700,226); repurchases (100,271); dividends (38,378). Balance sheet at August 31, 2026 vs November 30, 2025: cash 749,302 / 2,435,389; accounts receivable 14,953,804 / 11,707,581; inventories 15,291,597 / 9,504,340; accounts payable 22,442,942 / 17,624,254; current borrowings 1,926,400 / 1,018,321; long-term borrowings 3,595,337 / 3,592,130. Q4 FY26 outlook: revenue $21.8–22.6B; non-GAAP gross billings $31.4–32.4B; net income $368–408M; non-GAAP net income $454–494M; diluted EPS $4.58–5.08; non-GAAP diluted EPS $5.65–6.15; share-based compensation $40M; 79.2 million diluted shares.
TD SYNNEX — Q2 FY26 results (Form 8-K, Exhibit 99.1) — Q2 revenue 19,574,813; gross margin 6.84%; free cash flow (332,433); inventories 13,894,044; Q3 outlook revenue $18.2–19.0B and gross billings $27.2–28.2B.
TD SYNNEX — Q1 FY26 results (Form 8-K, Exhibit 99.1) — Q1 revenue 17,161,198; gross margin 7.30%; free cash flow (929,013); inventories 10,980,995; segment change to Americas, Europe, APJ and Hyve Solutions.
SEC XBRL company-concept data, TD SYNNEX Forms 10-Q and 10-K — inventories, accounts receivable, accounts payable and cash at each quarter end from May 31, 2024 to May 31, 2026 ($B): inventories 7.10, 7.67, 8.29, 8.36, 8.66, 9.14, 9.50, 10.98, 13.89; receivables 8.85, 10.03, 10.34, 9.42, 10.13, 10.93, 11.71, 11.94, 13.00; payables 12.13, 13.87, 15.08, 13.04, 14.54, 15.65, 17.62, 18.06, 21.18; cash 1.17, 0.85, 1.06, 0.54, 0.77, 0.87, 2.44, 1.56, 1.09.
TD SYNNEX — Form 8-K, Item 3.02, filed June 3, 2026 — warrant issued May 30, 2026 to Amazon.com NV Investment Holdings LLC for up to 3,238,066 shares; 215,871 vested at $0.01; 3,022,195 vesting in tranches at $191.10 on payment thresholds; expiry May 30, 2033; 4.999% ownership limit.
Robinhood earnings feed — SNX consensus non-GAAP EPS $4.65 (Q3 FY26), $4.10 (Q2), $3.20 (Q1); unverified — consensus aggregator.
Investing.com — "TD SYNNEX Q3 2026 slides: record results mask margin, cash concerns" — segment billings and operating income, Hyve 3.61% vs 5.04% operating margin, trailing-twelve-month free cash flow, net leverage 1.9x, and CFO commentary; unverified — third-party summary of the presentation.
Earnings call highlights, September 24, 2026 — cash conversion cycle 22 days, net working capital $6.5B, the roughly $1 billion of free cash flow consumption and the fiscal 2027 cash-generation statement; unverified pending the official transcript.
Robinhood market data — SNX prior close $287.89 (September 23) and last regular-session trade about $259.44 (September 24); unverified — market data, not filing figures.

TD SYNNEX Q3 FY26 — Amazon Got the Servers, the Warrant, and the Working Capital

A record the tape refused

The income statement is the thin part

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