Good, good morning, everyone. Thanks for being here. My name's Steve Barger. I'm with KeyBanc Capital Markets. I cover industrial machinery and semi-cap equipment. I'm here with Marshall Witt, the CFO of TD SYNNEX. He's been CFO since 2013. Just full disclosure, I don't cover TD SYNNEX, so I'm newer to the name, and if anybody has any questions as we go through this, feel free to, to jump in, but we'll just have a good conversation. Great. Thanks for having us, Steve. Happy you're here. Maybe just to start, can you give us a little background on the company and just tell us, how it came together and, and your relationship with it? Sure. I've been at TD SYNNEX for about 10 years. More recently, in the last two years, we did a fairly significant acquisition. We merged SYNNEX Corporation and Tech Data, and we're just finishing up our second year. Just some highlights around that merger and some aspects around it. We're about a $60 billion revenue company per year, on a gross billings about $80 billion. In most markets, we're number 1. It depends on the region we're in. In Americas, we're number 1, Europe, same thing. APJ, not so much, has some work to do there. If you think about the makeup of each region, Americas is about a $35 billion business, Europe, $20 billion-$25 billion, APJ, about $4 billion-$5 billion, to get to the total number. We have about 23,000 plus coworkers. Part of the thesis around the acquisition was that there was quite a bit of complementary aspects to both organizations coming together, and within distribution, a lot of it has to do with your capabilities around what we call the line card, and the line card is the OEMs that you service, and you help sell through their products and services. As we were looking at the companies on a combined basis, we saw that there were quite a few OEMs and vendors that Tech Data had that SYNNEX didn't, and vice versa. In many cases, when you bring organizations together with that kind of complementary opportunity, it creates a lot of synergies on a go-forward basis. We have not yet captured that. That's to come in terms of where we're gonna go. One of the major focuses that we had in the first two years was in integrating the North America platforms. Legacy Tech Data was on SAP, and SYNNEX was on a homegrown system called CIS, a very dynamic system that allows leaders to manage their decisions on a daily, sometimes on a SKU basis, level. What it does is, within distribution, as many of you know, it's a low-margin business, and so every basis point matters. Right. You need to have a system that can track and assimilate and gauge the success, and sometimes the failures, around those decisions. We have integrated CIS in about 85%, 80%-85% of the North America platform. There's still some work to be done to finish it up. The reason why that is so important is, number 1, in mergers, that tends to be a highlight area about integration. What are you gonna do with your systems? There's, there's risks that typically get associated with being able to do that successfully. We had kind of what we call a light switch phase, which is most of the vendors and customers that we had collectively were familiar with the legacy CIS system. What we ended up doing is transferring those over time, instead of it being over a weekend or any given moment, period of time. We did them over open windows, and we would do migrations by vendors and by customers. Getting now towards the end of the second year, we identified synergies around things we could do more efficiently together. We identified about $200 million of synergies, about $100 million to be recognized in the first year and another $100 million in the second year. We, at the end of the second quarter, which is just finished up in May, we were able to capture $200 million of synergies. Six months early. Yeah. Very happy about the success and progress. We did also announce that, what we're calling our polishing phase, and that's nothing more than saying we're together as an organization. We have commercial teams together, the back-end functions and support functions together. The systems are now harmonized. What else could we do to be more efficient and align with where we see the business going? We identified another $50 million of go get there. We're well positioned as we think about kind of the first year, post the first two years of integration as an organization, with a very, very comprehensive line card of over 1,500 OEMs and over 150,000 customers servicing more than 100 countries. That's a great background. Thank you. Yeah. you know, obviously, it's a super diverse business. We'll dig into some of the specific growth drivers, but what is the competitive advantage that TD SYNNEX has? Why does a partner or a customer go with you? Yep. It's a good question. For us, I think having scale and having presence and having a comprehensive capability in whatever market you serve, puts us in a really good position to win those opportunities. We understand that the, the transactions manifest itself at, at a unique level. It's not because we own a country or because we're the largest in a certain territory, but it's the actual intimacy around understanding the relationship, what that OEM is doing, where they wanna go, how they wanna sell, and then our ability to understand how to take that technology to market. Also on the sales side, having the breadth and the depth, being able to reach out to the small, medium-sized customers who are the primary customer set of TD SYNNEX. One of the attributes around distribution is, certainly for us, is that many of our OEMs can choose to go direct, and many of them do when they can do it with scale, they can do it with efficiency, and with a margin profile and a return profile that makes sense. In some of the markets where there are harder-to-reach customers, we step in and can enable that sales channel to, to reach deeper into markets that they may not necessarily be able to do efficiently, but in a way that they can do it with scale. We'll step into those situations, serve as a surrogate to those OEMs, and serve those markets well. You do sit at the intersection of a lot of hardware and software vendors. Can you talk about the current state of IT spending? Yeah. About a year ago, we had an analyst day, we looked out at where we thought IT spend was to head, and that was, call it, pre 2023. Just say that with a caveat. As we looked out over the, the IT landscape, we felt that it was reaching or approaching about 6%, and that's on average, call it 5-6, that was our backdrop for where we thought IT spend could go over the medium term. We still believe that is the case, we just think 2023 had some, some hiccups to it. When I think about the, the broader perspective of where we see IT spend going, we still think that 5%-6% range makes sense to us. What's behind that? Typically, what happens within distribution is it's all predicated about the economy itself and the countries we serve, and those economies have a GDP basis that we start with, and then from there, IT spend typically is 200-300 basis points above GDP. That's our relationship. We tend to then mark it up, and then we usually have more than our fair share above that. At the end of the day, we had given a thought about a medium-term growth rate of around 6%-7%. That means you're, you're growing share above where IT is at. Certainly, as I said, fiscal 2023 for us, which ends in November, has been, you know, almost a pause and a reset, but ultimately, we see that's where IT spend can and should go. Then if you look at the attributes which caused some of the disruptions in 2023, certainly supply chain has probably been a conversation for a lot of your meetings that you've had the last couple of days. Yes. For us, we feel like that the digestion is towards the tail end, and there's two things that give us some conviction on that. One is, as we look at our quarterly sequential relationships, in the PC ecosystem space, we're seeing some stability. Still year-over-year, there's some decline, but from a, "Are we close to the bottom? Are we bouncing along the bottom?" We think we are. If you pivot and think about our Advanced Solutions portfolio, those are services that we take bundled solutions from different OEMs, different solution providers, bundle those together and sell those in projects. They tend to be one, two three -month type projects. I think we'll talk a little bit about the asset light. Yes ... perspective of that. Yeah. They're certainly beneficial because what happens on an asset light feature is many of those projects get built up, and when they finally get to completion, you're literally just doing what we call drop ship. You're just dropping it into the customer site. We have on-site facilitation with our customers, working with them to get those projects integrated. That has grown better than, we'll call it, the rest of the company average in terms of ES versus AS. It's having some compare difficulties as we get into the second half of the year, I think the last thing that we can talk about a little bit later is we have some high-growth technology features and products and services that are very attractive from a growth rate perspective, from a gross margin, and from an operating income perspective. That's great. When you said pre-2023, you're referring to PC specifically, right? In terms of that forecast. Anything you'd call out around infrastructure, networking, or data center specifically? Yeah, in general, those fall in our AS- Yeah ... category, and they have been growing at a faster pace than ES. quite frankly, this year, what we've seen is AS has been down year-over-year. AS has somewhat helped offset that. Mm-hmm. If you look at our growth rate performance in quarter one versus quarter two versus our guide for quarter three, quarter one, flat. Quarter two, down 7-ish%. Quarter three, guiding to around 9%-10% down. Underneath that, you had ES negative growth continuing to increase... Right You had AS trying its best to offset it, doing well and performing well, but then that ultimately is what led us to do two things. One is being somewhat cautious about where the future was gonna take us, but as we got through quarter two and got a sense of how we're seeing our backlog start to improve, and we can speak to that in a bit. Mm-hmm ... as we're starting to see some of the more stability around supply chain, and then as we're starting to see the digestion of inventory play through, those things, plus some other things, gave us some conviction to feel a little bit better about the second half of 2023. Yeah, it's definitely been a theme across my space, supply chain stabilization. You do have 1,500 vendors. Are there any specific areas that are lagging or, or improving faster or any just highlights? Yeah. We have what I'd call getting back to profile. The way I define profile is we typically need 1- 2 months of revenue in backlog to ensure that our supply chain isn't disrupted. 2022, first part of 2023 was all over the board. Various vendors trying their best to make sure that their supply chains got back in check, and I think for the most part, in our Endpoint Solutions, we're back to profile. We're back to that 1- 2 months of revenue, which is normal. You always wanna make sure that we've got enough coming through the pipe, and then just for those that don't understand the backlog, backlog is PO commitments. We have customers in line, they have a purchase order in hand, you know, we validated the credit side of it already. There's very little risk in terms of them stepping out of line because of the obligation. That backlog has definitely come back to profile. Advanced Solutions, almost there. There's a few pockets where there's some disruption. Generally said, from where we were a year ago, it has significantly improved. I think as we think about forecasting and we get questions a lot about, "Well, how much of your backlog is influencing growth rates going forward?" I think there was quite a bit of that in the last eight quarters or so. I think as we go forward, the growth rates that we're gonna experience will be a true reflection of demand. You had mentioned that, that the primary business, ES, I guess, is the low-margin business. Can you Oh, let me stop you real quick. Oh! It can come across as low gross margin. Uh On an operating income, like op margin basis, they're pretty close. Oh, is that right? It's surprisingly. Mm-hmm. It doesn't mean it's always gonna be that way. Right. There's ebbs and flows in pricing, but right now, if you look at, like, the pricing environment that has taken us up through this quarter, and you look at the margin profile, they're pretty close. My question was gonna be about optimal mix. Yep you know, you want the growth rate coming from the advanced services. Yep ... it, you're, you're kind of agnostic to. Yeah, there's different return characteristics of both, and I'm gonna oversimplify, but on the, on the edge, on the endpoint side, that can have a lower margin profile at times on gross margin, but the cash conversion characteristics can be better... Right ... given the way that we are able to, work with our, our vendor partners on how fast we pay them, how fast we get paid from our customers, and then our overall, relationship on cash conversion. On the AS side, it can be asset light, so there's less cash tied up in that. Sometimes the ROIC on lower margin business pays for it- Hmm ... right? Whereas you can have a higher margin on an Advanced Solutions, but the ROC may not be as rich. We, there's a lot of different aspects that go into that consideration, both certainly meaningful, and as you can appreciate, if you're a customer, you're using both AS and ES. Right. You're not just a consumer of ES. I'd be remiss if I didn't ask about AI. It's a big theme of the, the conference. What are you seeing from customers who are asking about solutions that can help them with that? Yep. What are you doing internally? Yeah ... to leverage AI? I'll start with just our broad capabilities and ability to service the needs of where the market is going. AI certainly is an important characteristic and an influencer that we think will be neutral to positive for us. It's too early to say it's monetized to X millions of billions, but certainly the position we're in, in both distribution and our vendor partners that we have, the customers that are trying to figure out how best to stay equipped and be ready for the AI-capable needs of their customer sets, that's an important aspect. We think we're well-positioned to provide support and solutions for that. On the high-growth technology side, we have Hyve Solutions. Hyve Solutions is a custom-built hyperscale, hyperscale fit-out of both rack for compute and network solutions. We do that ourselves, primarily in a CM-type mode, which is we're not the design, but we take the design specs from our hyperscale customers, build out those requirements. To the extent that those requirements are AI-capable- Right ... or need to be AI ready, we certainly have the ability and the structure and the skill sets from both engineering and footprint and manufacturing to fulfill that. To me, it's just one more thing that shines a light on what we do and, and the, the role we play in AI. I'm not gonna try to compare it to any other kind of tailwinds, but to us, it's a tailwind, but monetization to come. Right. Well, are, are you seeing any cannibalization from, an AI build-out as it relates to traditional data center? Still too early to say. Okay. Typically, what we'll see is ebbs and flows in our business. Because we have hundreds of thousands of SKUs that we sell on any given week or month, we can have movements that look as if it's cannibalization, but it could just be trends, it could be less inventory, it could be customer sets and what they need. Right now, we're used to having kinda ebbs and flows in, in who we serve, the types of SKUs that are being sold, and then for us, as long as we have that comprehensive line card that can say yes to whatever the needs are of the customer, that's what we... That's the position we wanna be in. You talked about low capital intensity. Can you talk about your own inventory position as a distributor and maybe how the free cash flow cycle works for you? Sure. Certainly working capital is a very important part of distribution. We are a high cash flow generative organization. I think we're well-positioned, and we just experienced in quarter two of demonstrating that we can produce strong cash flow, over $700 million in cash flow for quarter two. Super happy about what that produced. If you think about the benefit that we provide to the markets we serve, we certainly are in the position of taking positions in inventory where we are either gonna be strategic or we're doing it on the behalf of our customer. We get questions a lot of: "Why are you protected? How do you ensure obsolescence risks are at a minimum?" We've got a lot of really experienced individuals that have been doing this for a very long time. The way that we typically will work with our OEMs and our customers is, we buy when we know we can sell. I know in 2022, there was a little bit of buy without who's gonna who's gonna buy it from us? Right. We got through that, and I think that's where you saw the elevated inventories start to come down. Supply chain was another reason why inventory was elevated. In many of the projects we do, it takes three or four or five different SKUs to complete a project. When we had the supply chain disruptions, we were waiting on that golden screw. Right. Right. Because of that, our inventory aged. When we finally got that through, we could sell through. We certainly know that that's an advantage of us to have liquidity available to the needs of our, our OEMs and our customers. Inventory has started to come down in 2022. Throughout the year, it came down. 2023, it's still coming down. Our cash conversion cycle was at 26 days in Q1, down to 24 days in Q2. We get asked a lot: "Well, what's the ideal- Right ... cash conversion cycle?" I think 20-22 feels right, but if we find ourselves in another growth pattern, which we have done from time to time in the past, that should require increased working capital again and cash conversion. We have, with confidence, committed, and, and maybe "committed" is too hard of a word, but confidence that our free cash flow for this year will be over $1 billion, and then over the medium term, we believe we can get to $1.5 billion in terms of free cash flow. I think you had mentioned some of your higher growth, service-oriented businesses. I think you have a portfolio of as-a-service- Yes ... options, right? We do. Can you talk a little bit about that? Yeah. We have a number of as-a-service structure in portfolio and solutions. They're small in the overall absolute contribution to the organization, but clearly meaningful in terms of its revenue characteristics, it's recurring in nature, attributes in its margin profile. In our high-growth technology solutions, we have our cloud services. It's in the billions of dollars of transactions, so it's meaningful. We also have security. We have as a service in terms of IoT and data analytics, and we also have the hyperscale in terms of Hyve. We believe that the recurring revenue nature of what we do is probably underappreciated. Some of that's probably our own doing of not being able to provide yet that level of clarity. We wanted to have a couple years of integration, digestion under our belt, understand what we felt were the right metrics to share, and then be ready to start producing, call it that supplemental information as a service, as a meaningful part of our business. You wanna make sure that when you're ready to report it, it's accurate, repeatable, and it's growing. Yeah. going back to the, the merger- Yeah. Was the deal justification on that revenue synergy or cost synergy, or both? You got to your target six months ahead of time. Yeah ... but then increased it. Is, can you talk about what that increase- Yep came from? Yeah, I think the rationale for the deal was a number of reasons. One, I think it was the complementary attributes of the organization. SYNNEX did not have a European presence, Tech Data did. Tech Data didn't have as much of an Asia PAC, so collectively we had a much bigger Asia PAC presence together. In Americas, we had a lot of complementary attributes, which I spoke to. I think there was this sense that together we were gonna have a meaningful play and participation in the market. As a lot of organizations do, before the deal, we reached out to all of our large relationships and said: "Is this something that's gonna change who you buy from? Right ... and who you sell to?" That was critical, because in many cases in distribution, you feel like you don't wanna be over-indexed to any one distributor. We have not seen that. We have seen actual spend, equal or grow. In the last couple of quarters, we've talked about market share in both North America and in Europe. And in both of those cases, we've either kept or grown market share, which is indicative of post-merger, what are our OEMs doing? How are they using us? What are our customers using us? Are they using us less, more, or the same? It's same or more. Yeah. Back to what caused the earlier on the pulling for the synergies, a lot of that is just that front diligence that we do around where can we go get those dollars of synergy and opportunities, grabbing them sooner, pulling them in quicker. We're really an organization that, you know, those integrations, a lot of times folks think that your head is turned this way instead of forward. We really wanna be mindful of looking forward. The merger's gone well. Supply chain is stabilizing. You're starting to see some end markets, like PCs, start to stabilize and, you know, obviously there will be a cyclical upturn at some point. You've got about $5 billion in liquidity. You've taken an all-of-the-above capital allocation approach, it seems to me, historically. Can you talk about what that looks like going forward? Yeah. You know, that's an area where both organizations coming together wanted to be a little bit more specific around where our, our overall targets need to be from a capital return perspective, or capital allocation. We really felt, number 1, generating free cash flow was paramount to the investment thesis and the returns that we really felt were appropriate. Generating cash flow, number 1, we feel good about that. Number 2, we wanna make sure that there was a good balance between M&A and reinvestment back in the business, and also share repurchases and dividends. We set out a target last year that we wanted to achieve a 50/50 split between those two concepts, or those two ways of investment, knowing that in any one year, it's not linear. You could have a year where there's no M&A, so you might lean more into repurchases and dividends. In other years, you could have a significant M&A. You might take a pause on some of the returns. Ultimately, over the course of these next three years, which we'll call the medium term, up through, like, 2025, we wanna get to a place where 50% of our returns, in terms of free cash flow, are going back to dividends and share repurchases, and the other 50% to go back into M&A and, and reinvestment back in the business. On the M&A front, we certainly have identified within Europe, we have some security opportunities that we think we can lean into. Back to that line card capability, in many respects, we wanna make sure that we can say yes to the situations that get presented to us. In Europe, we're building that out. We think there's some opportunities there. APJ, as we said, we're, we're a close, third or fourth, and just in terms of where we play in that market. Mind share is an important part of distribution, where if you're an OEM and you're in a certain country, you're gonna lean on a distributor to be that fulfiller of the needs and the solutions that you're providing. We wanna be able to have that skill set, that capability, the breadth and depth of knowledge. That's another area where we see both, line card capability, but also footprint opportunities. It's, we're not discounting North America. North America is a little more mature. We certainly see opportunities in both Europe and APJ. When you say footprint opportunity, does that require investment to build that out, or-? It does. Yeah. It does. It's a balance. Sometimes we can do it well, organically, but in many cases, it's much, expeditiously, as long as the accretion story is correct- Right ... to do it through an M&A. We just have 1.5 minutes left. Anybody have a question in the room? Any final thoughts you'd like to leave people with? No, I would just say that, you know, coming together after two years, post-merger, we're well positioned for fiscal 23 and beyond. You know, our overall capturing where the market is going and growing, the profit pools that we tend to get at quicker and sooner than others, the position we're at in terms of where IT spend is gonna be heading over the next 2-3 years, our, our cash flow generative opportunities in front of us in terms of the medium-term outlook for cash flow, and then finally, our TSR. We shared last year that our TSR, we still believe, is a 15%-20% TSR. We know that 23 probably put a little bit of pause in that, but the overall thesis of net income growth, dividend returns, share repurchases, and M&A, and reinvestment back in the business should put us back into that structure. It's a terrific story. Thanks very much, Marshall. Thank you. Thanks, Steve.