TD Synnex Corp. reported record fiscal Q3 revenue of $21.6 billion for the quarter ended Aug. 31, a 37.7% increase year over year that beat the high end of its own guidance. Non-GAAP gross billings reached $31.8 billion, up 40%.

The quarter extends a streak of records for the IT distributor, which has now posted record billings for several consecutive quarters as artificial intelligence infrastructure spending accelerates across its customer base. The growth is concentrated in two very different businesses: a traditional distribution engine selling hardware and software through the channel, and a contract manufacturing operation building data centers directly for the largest U.S. hyperscalers.

"We delivered another record quarter with Distribution and Hyve both performing above our expectations and growing above market," CEO Patrick Zammit said in a written statement.

Hyve more than doubles again

Hyve, TD Synnex's custom data center design and manufacturing segment, was the standout. It recorded $7 billion in gross billings, up 117% from the year-ago period. That follows an identical 117% increase in Q2, to $5.5 billion, as the company ramped programs with existing hyperscale customers.

Within Hyve, manufacturing grew more than 130% and now represents roughly two-thirds of the segment's total billings. Supply chain services grew over 90%, driven by component demand tied to customer infrastructure deployments.

Hyve now runs programs with each of the five largest U.S. hyperscalers, including Amazon Web Services, Microsoft Azure and Google Cloud, and is actively ramping programs with new customers expected to begin shipping in Q4.

"Customers are engaging Hyve earlier in the development process, creating additional opportunities to expand our relationship with our current customer base and potential new customers," Zammit told investors.

The company is also investing in next-generation Hyve capabilities. Design work is underway on advanced liquid-cooled networking racks expected to enter production in the first half of fiscal 2027. TD Synnex also announced a deal with Mach3 Systems to support an Nvidia AI factory, which Zammit described as one of the largest enterprise AI factory infrastructure deployments expected to be delivered through the channel.

Distribution grows 27% across every region

The core Distribution segment, which sells IT hardware and software to resellers and solution providers in more than 100 countries, posted gross billings of $24.8 billion, up 27% year over year with double-digit growth across every geographic region.

Advanced Solutions — the portfolio spanning complex data center technologies including cloud, security, networking and software — grew 37%. Networking grew 19%, driven by demand for Wi-Fi 7 equipment and switches designed to support AI workloads.

Endpoint Solutions grew 16% on the strength of PCs despite a modest unit decline, as higher average selling prices and a shift toward mid- and higher-range AI PCs offset the volume drop. AI PCs now account for close to 50% of TD Synnex's personal computing revenue, Zammit said on the earnings call.

That mix shift matters for distributor economics: revenue is growing faster than units, which supports revenue per transaction even where device volumes soften.

Q4 guidance and capital returns

For Q4, TD Synnex projected revenue of $21.8 billion to $22.6 billion. Non-GAAP gross billings are expected to reach approximately $31.9 billion, up about 31% year over year.

The company returned $139 million to shareholders in Q3 through $100 million in buybacks and $38 million in dividends, and declared a Q4 dividend of $0.48 per share, up 9% year over year.

"We expect each of our major programs to generate attractive returns, although some will not reach their full potential until the back half of fiscal 2027," chief financial officer David Jordan told investors.

With Hyve's new customer programs shipping from Q4 and liquid-cooled rack production slated for the first half of fiscal 2027, TD Synnex is positioning its AI infrastructure buildout to extend the record streak well into next fiscal year.