10:52 AM EDT, 06/25/2024 (MT Newswires) -- TD Synnex ( SNX ) reported a bigger-than-expected decline in fiscal second-quarter revenue on Tuesday but returned to billings growth after a prolonged period of challenging market conditions and weak information technology spending.

The IT service provider's revenue dipped to $13.95 billion for the three months ended May 31 from $14.06 billion the year earlier and missed the $14.1 billion average analyst estimate in a Capital IQ poll. Shares of TD Synnex ( SNX ) fell more than 8% in morning trade.

Non-GAAP gross billings climbed 3.1% from the same period of 2023 to $19.3 billion. Endpoint solutions billings advanced by 1% and advanced solutions grew by 5%, Chief Financial Officer Marshall Witt told analysts on a conference call, according to a Capital IQ transcript. Strategic technologies billings increased by a mid-teens percentage year-over-year amid strength in cloud, data center, artificial intelligence and security, he said.

"We continued to see an improving IT spending environment, with a return to year-over-year gross billings growth driven by strength in our core business," Chief Executive Rich Hume said in a statement.

Adjusted earnings per share advanced to $2.73 from $2.43 year over year but was short of the $2.82 consensus. Non-GAAP gross margin expanded by nine basis points to 6.98%.

In the ongoing quarter, the company is guiding revenue between $13.3 billion and $14.9 billion and adjusted EPS between $2.55 and $3.05. Wall Street is modeling for revenue of $14.52 billion and normalized EPS of $2.91 for the third quarter.

"Our markets have continued to stabilize, and we remain confident in our improving revenue and gross billings growth prospects for the back half of the fiscal year," Hume told analysts on the conference call.

The second half of the year should be aided by a PC refresh cycle, customer investments in data center and cloud deployments, increased hyperscale capital spending for artificial intelligence initiatives and continued expansion in software, security and data analytics, he said.

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