Good morning. My name is Rob, and I'll be your conference operator today. I would like to welcome everyone to the TD SYNNEX second quarter fiscal 2022 earnings call. Today's call is being recorded, and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. At this time, for opening remarks, I would like to pass the call over to Liz Morali, Head of Investor Relations. Liz, you may begin.
Thank you, and good morning to everyone. Thank you for joining us for today's call. With me today are Rich Hume, CEO, and Marshall Witt, CFO. Before we continue, let me remind everyone that today's discussion contains forward-looking statements within the meaning of the federal securities laws, including predictions, estimates, projections, or other statements about future events, including statements about integration progress, synergies, strategy, capital distribution, investments, and our expectations for fiscal year 2022. Actual results may differ materially from those mentioned in these forward-looking statements as a result of risks and uncertainties discussed in today's earnings release, in the Form 8-K we filed today, and in the Risk Factors section of our Form 10-K and our other reports and filings with the SEC. We do not intend to update any forward-looking statements. Also, during this call, we will reference certain non-GAAP financial information.
Reconciliations of GAAP to non-GAAP results are included in our earnings press release and the related Form 8-K available on our investor relations website, ir.synnex.com. This conference call is the property of TD SYNNEX and may not be recorded or rebroadcast without our permission. I will now turn the call over to Rich. Rich?
Thank you, Liz, and good morning, everyone, and thank you for joining our call. Nearly 10 months ago, we closed the merger to form TD SYNNEX. Through our first three fiscal quarters together, we have successfully generated over $46 billion in revenue and $8.61 in non-GAAP earnings per share, all while making great strides on our merger integration. I'm incredibly proud of our more than 22,000 coworkers and their tremendous efforts to accomplish these very impressive results. In March, at our Investor Day, we were able to share with you our vision of the evolving IT distribution landscape and the opportunities to grow and deliver enhanced financial performance over the coming years.
We presented our 4-pillar strategic framework along with key medium- and long-term financial objectives focused on investing in high-growth technologies like hybrid cloud, security, data analytics, and hyperscale infrastructure while strengthening our portfolio, expanding our global footprint, and digitally transforming our business. This strategy is underpinned by our role in the center of the technology partner ecosystem as a leading solutions aggregator. From this vantage point, and with the strong support of our best-in-class network of over 1,500 vendor partners, we are well-positioned to continue delivering unrivaled technology solutions to our more than 150,000 customers. Our performance in fiscal Q2 further demonstrates the success we are having in the market, given our strong value proposition and industry-leading portfolio. In Q2, we grew revenue by 4% year-over-year, assuming the merger occurred in the prior year if adjusted for FX and revenue policy alignment.
This strong result was driven by robust demand for technology products and solutions to enable hybrid work, foster collaboration, enhance security, and advance multi-cloud adoption. This is an exciting time to serve the technology ecosystem as the pace of change intensifies and our vendors continue developing products and services that enable companies and individuals to improve their agility, productivity, security, and profitability. We continue to see healthy demand for both Endpoint and Advanced Solutions, with revenue increasing year-over-year. In PCs, the double-digit growth rates seen during the pandemic continued to moderate as expected. The supply-constrained environment that we've spoken about the past several quarters continued and was in line with our expectations. From a regional perspective, our Americas distribution business experienced strong year-over-year top-line growth.
On a year-over-year basis, our hyperscale infrastructure business declined given tough prior year compares, but grew on an LTM basis consistent with our expectations. Our European business also grew year over year in constant currency, albeit at a more measured pace given the current economic and geopolitical conditions in the region. Before I pass it over to Marshall to further elaborate on our Q2 results, I wanted to provide an update on our merger integration activities. We continue to make excellent progress on harmonizing processes, benefits, and systems across TD SYNNEX, as well as our optimization programs and synergy attainment. From an ERP systems perspective, I shared with you last quarter that the April-May timeframe would be important as we migrated a large portion of our Canadian business to the new system.
I'm happy to report that the migration went extremely well, and we are on track with our project plans to transition our U.S. business. As we enter the back half of this fiscal year, we are extremely pleased with the progress we've made and the momentum we are experiencing in the market. I will now pass it over to Marshall, who will provide some further color on our Q2 financial performance. Marshall.
Thanks, Rich, and thanks for joining us today for our call. In fiscal Q2, we delivered another strong performance with year-over-year revenue growth on a constant currency basis, gross margin expansion, healthy earnings per share, and strong cash flow from operations. This consistency in performance is a testament to the dedicated efforts of our global team and our agile, entrepreneurial, and resilient business model. Total worldwide revenue for fiscal Q2 was $15.3 billion, up 4% when adjusted for constant currency and the revenue policy alignments related to the merger. This is a stronger result than the 3% year-over-year adjusted growth rate at the midpoint of the Q2 outlook we provided last quarter. The growth was driven by strong performance in both core and high-growth portions of the business.
EUR devaluation accounted for approximately $500 million of headwind versus the prior year and an approximate $200 million incremental headwind versus our prior guidance. Our distribution business experienced growth across all regions, excluding the impact of one large government project in APJ in the prior year. Gross profit was $956 million, and gross margin was 6.3% compared to 5.8% for the prior year, reflecting a favorable product mix, a strong pricing environment, and solid execution. FX had a $31 million negative impact on gross profit compared to the prior year, primarily due to the devaluation of the euro relative to the U.S. dollar. Total adjusted SG&A expense was $585 million, representing 3.8% of revenue and in line with our expectations.
Non-GAAP operating income was $398 million, up 18% versus the prior year, and non-GAAP operating margin was 2.6%, up from 2.2% in the prior year period. All three regions experienced improved profitability compared to the prior year. FX had a $10 million negative impact on non-GAAP operating income compared to the prior year, primarily due to the euro devaluation versus the US dollar. Non-GAAP interest expense and finance charges were $46 million, and non-GAAP effective tax rate was approximately 24%. Total non-GAAP net income was $262 million, and non-GAAP diluted EPS was $2.72. Now turning to the balance sheet. We ended the quarter with cash and cash equivalents of $522 million and debt of $4.1 billion.
Our growth leverage ratio was 2.4 times, and net leverage was 2.1 times. Accounts receivable totaled $7.9 billion, and inventories totaled $8.4 billion. Our net working capital at the end of the second quarter was $3.6 billion, a decrease of $800 million from $4.4 billion in Q1. Our cash conversion cycle for the second quarter was 21 days, down 3 days from Q1 of 22. Cash from operations was approximately $1.04 billion in the quarter. This is partially due to some unwinding of the Q1 increase in net working capital to support revenue growth and strategic inventory purchases. From a shareholder return perspective for the current quarter, our board of directors has approved a cash dividend of $0.30 per common share.
The dividend is expected to be paid on July 29, 2022 to stockholders of record as of the close of business on July 15, 2022. We also continued to repurchase shares, and through the first two quarters of fiscal 2022, we have repurchased approximately $53 million of our stock at a weighted average price of approximately $103, in line with our target of $100 million share repurchases for the year. We have $347 million remaining on our three-year stock repurchase authorization, which expires in July of 2023. Before I discuss our outlook for the third quarter, I wanted to take a moment to provide an update on our merger synergies. As Rich mentioned, our integration efforts are going well, and we continue to make good progress on realizing our merger cost synergies.
We are ahead of schedule and remain committed to achieving our targeted $200 million of merger cost synergies. As I've mentioned previously, these opportunities span a variety of areas, including optimization and efficiency improvements via the Legacy Tech Data GBO program, as well as traditional deal-related synergies across the spectrum of IT systems, corporate costs, facilities rationalization, taxes, and interest. Now, moving to our outlook for fiscal quarter three. We expect total revenue to be in the range of $14.5 billion-$15.5 billion, which when adjusted for currency impacts of approximately $500 million and revenue policy alignments relating to the merger of approximately $300 million equates to a growth of around 10% at the midpoint on a year-over-year basis, assuming the merger had occurred in the prior year.
Non-GAAP net income is expected to be in the range of $241 million-$279 million, and non-GAAP diluted EPS is expected to be in the range of $2.50-$2.90 per diluted share. That's based on a weighted average shares outstanding of approximately 95.5 million. Interest expense is expected to be approximately $45 million, and we expect the tax rate to be approximately 24%. For the full fiscal year of 2022, we continue to expect non-GAAP diluted EPS of $11.15-$11.65 per diluted share. We are reaffirming this full year outlook despite an incremental $0.14 headwind from the devaluation of the euro since March. The total FX headwind for fiscal 2022 versus the prior year is now approximately $0.32.
We will now take your questions. Operator?
At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We request you limit yourself to one question and one follow-up. Your first question comes from the line of Matthew Sheerin from Stifel. Your line is open.
Yes. Thank you very much, and good morning, everyone. My first question, Rich, just regarding your commentary on the overall demand environment, you still sound fairly bullish, but could you give us a little bit more color on the PC quote unquote moderation that you're seeing? Are you continuing to see that weaken? It also sounds like supply is starting to open up there. Relative to the comments you've made in previous quarters about expectation for on-prem infrastructure projects coming back and accelerating in the second half, are you still seeing that and hearing that from your customers?
Yeah, Matt, thank you for your question. First, when we look back at 2Q, on a constant currency basis, we talk about the Advanced Solutions and Endpoint Solutions segment, and we talked about, you know, growth in both of those segments. In addition to that, I think we had a separate schedule in for everybody to have a look at, PCs and, you know, how they fit within our portfolio and profile. To, you know, kind of move on to your second point, what I would say is, the story remains consistent in the PC realm as what we had articulated previously, at least from our crystal ball. That is that, you know, the commercial PCs have some pretty good demand associated with them.
The weakness, I think in the overall scheme of the PC category would be in the Chromebook as well as the consumer piece, at least for the foreseeable future. As you would have noticed from that schedule that we had incorporated in there, you know, we're heavier weight to the commercial piece. You know, when you get down to the consumer segment and think about it in the grand scheme of our entire portfolio, it's a single-digit number, a mid-single digit number, estimated. You know, I think that the sentiment of the market, you know, the PC providers have sort of articulated that point of view, and we would reaffirm that that's the way we see it.
As it relates to Advanced Solutions, certainly the growth rates there have been higher than the Endpoint Solutions segment. You know, we do continue to see good demand in that segment. I do believe, as we had talked for a while since the beginning of the year, that through the pandemic, you know, you had PCs launching with high demand, the Advanced Solutions sort of deferring, and now you're coming around to the moderation of PC and, you know, pretty good demand strength, if you will, within the Advanced Solutions segment. That's how we see it.
Okay. Thanks so much for that. As my follow-up, just regarding the inventory build that you had again in the quarter up about $700 million sequentially, but you're guiding essentially well down slightly sequentially for the August quarter. Could you just explain that? Is any of that related to your hyperscale business where you typically stage inventory or products ahead of any ramps?
Hi, Matt, this is Marshall, and thanks for the question. It's an equal balance between distribution and Hyve, but yes, it's the same demand forecast that we build up. You saw and we experienced in Q2 some of the higher margins and solid returns of some of that buildup at the end of Q1 for Hyve. We expect that same thing for the second half.
Okay, great.
And then-
Thanks a lot.
You know, the one comment that I would make is as we look at the quarter, the supply chains continue to be volatile. We usually accomplish what we need to in the quarter, so we'll see ebbs and flows in working capital, I think, you know, for the tactical frame. We're pretty comfortable with what we articulated in our investor day financial model for working capital once we move to sort of stabler grounds, if you will. We do see these bumps in the road here and there that, you know, are typically a bit unusual if we were to be in a stable environment.
Got it. Okay. Thanks a lot.
Thank you, Matt. Have a good day.
Your next question comes from a line of Ruplu Bhattacharya from Bank of America. Your line is open.
Hi, good morning. Thank you for taking my questions. Looks like FX is an incremental $850 million-$900 million negative impact on the top line and about $0.14 on the EPS. Can you give us, you know, your thoughts on that, and what is giving you confidence to keep the EPS guide for fiscal 2022 unchanged? What drives the operating margin improvement in fiscal 4Q?
Good question, Ruplu. Thank you. This is Marshall. Yeah, we feel really confident. Clearly, the $0.14 is a headwind. As we think about our investor day profile and looking at what we thought overall adjusted net revenues would be, we gave a guidance of 6%-8%. We still feel good about that. Then we also gave a operating margin profile range of 2.5%-2.7%. Same thing there. We feel really good about that. The execution of the business, our belief that the second half of the year will still have, we'll call it decent to good IT spend growth that we're gonna benefit from, the synergies that we spoke to that are also in the investor presentation, give us that confidence that we can offset those FX headwinds.
Okay. Thanks for that. Could you talk about the pricing environment? Are you seeing vendors continue to raise prices? Can you also talk about wage inflation and impact to your margins from that?
Sure. First in the pricing environment, you know, certainly, you know, over the last year to year and a half, there has been consistent price changes basically across the board, you know, based on all of the factors that we're familiar with, right? I would speculate that we're going to continue to see those price changes as we move forward until sort of the inflationary impacts sort of calm down. You know, I think that they'll ultimately start to abate, but you know, for the tactical frame, I would suggest that they'll continue. Now as it relates to labor and how it impacts, you know, our business. First of all, labor inflation is part of the overall inflation that gets sort of translated into price across the entire supply chain.
We carefully manage, you know, our compensation to make sure that we maintain competitiveness within the market. At the same time, you know, we will pass through those increments. I would consider them sort of marginal, if you will, incremental impacts to our overall pricing to end users, but they are there and we move, you know, reasonably quickly to make sure we get them passed through.
Ruplu, just to remind you, our merit cycle falls into Q2, so you'll probably see a little bit higher SG&A relative to revenue. The range for us is still in that 3.5%-4% range on SG&A. Back to what Rich said, over time, we do find ways of offsetting that.
Okay. Thanks for all the details there. Appreciated. Maybe for the last one, Rich, if I can ask you a higher level question. Investors are concerned about the possibility of a recession in the U.S. or a slowdown in Europe. Have you seen any slowdown anywhere in any region? And can you talk about your visibility? Has it improved any since 90 days ago? And if you can also talk about the backlog, how that is trending and your expectations for that for the rest of the year. Thank you.
Here is what we see and we take it from you know the Global Channel Guide, which is the most up-to-date information we see, the IDC's and Canalys information of the world. If you go and you take a look at those publications, what you'll find out is that the Americas market is more robust, if you will, than the European market. You know, we read the Americas market to have been, you know, over the recent past, call it, the high single-digit%, mid- to high single-digit%. Then Europe actually has been bumping around, flat overall. I think you know you could speculate that you're seeing the impacts of some of the geopolitical issues in Europe potentially.
Asia Pacific, which we don't have up-to-date information on, but our speculation would be sort of a mid-single digit best guess market right now. You know, that's sort of the backdrop of sort of the growth rates that we see in sort of that segment that we operate in. When we think about, you know, your next question looking forward, we do feel as if there is good, robust demand. We feel pretty good about our backlog. The backlog is marginally down sequentially in total. You know, that was sort of our view as to how things would play out.
As we move forward, my crystal ball would say that as we move through time, hopefully we'll see it move marginally down each quarter moving forward. You know, we basically create our commitments here from a bottoms-up perspective, where we hear from each region with a particular emphasis on the coming quarter and then a view for the remainder of the year. That really informs, you know, our guidance, if you will. That's the process that we go through, Ruplu.
Thank you.
Your next question comes from the line of Jim Suva from Citigroup. Your line is open.
Thank you, and good morning. I had a question. You mentioned, you know, hyperscaler was down due to difficult comps, and I think you said as expected. Can you remind us, since we're now approaching the time period of kind of starting to lap the integration that you had with TD and SYNNEX, as we look ahead for the next quarter or two, are those difficult year-over-year comps for hyperscaler behind us? And what are you kind of seeing for the demand in your Hyve business?
Jim, first of all, good morning. Thanks for the question. You might recall in previous broadcasts, we always talk about Hyve being a lumpy business. We stage, we then release and stage and release. We find ourselves into cycles like that. We are bullish and confident with the hyperscale sort of segment over time. You know, the market data would state that category, you know, has double-digit growth rates and, you know, we firmly believe that, you know, that's the case in sort of the sustaining time. I would tell you that, you know, when you think about Q2, and then going into Q3, and then potentially Q4, the business in total, you know, has the benefit of some easier compares.
I would say that segment as well sort of falls into that category. You know, we have a 1H for the entire business and that category that was pretty robust in FY 2021, and then it sort of slowed in the second half of FY 2021. Yeah, the compares get easier for both the total and that segment.
My follow-up question is on the inventory. Of course, you had to build this quarter, then you mentioned that you're gonna be working it down some for the August quarter. How do we bridge that versus the comments of supply chain challenges still existing today? Because if the supply chain challenges still exist today, you'd think inventory would be flattish, or maybe it's seasonal because otherwise people will say there's some weakening of demand or your backlog there.
Yeah, I'm gonna start, and then I'm going to turn it over to Marshall. By starting, I wanna make sure everybody's focused on the working capital improvements that we had seen in the quarter. They have been or are substantial from, you know, my point of view. Jim, if I hearken back to an earlier comment that I had, I said as we sort of continue to march through these supply-constrained environments, we're comfortable with our working capital model that we had taken everybody through at Investor Day. Until sort of we get stability in the supply chain, you know, we're gonna have some shorts and longs, if you will.
It's the proverbial golden screw discussion in the, you know, the core of distribution that has you hanging on, especially within the Advanced Solutions segment to inventory longer than you normally would. Then, you know, I think when we think about the hyperscale business, the ebb and flow of, you know, getting a bit behind on scheduled deployments and then getting back on schedule, you know, based on many factors associated with the pandemic sort of cause a bit of a continuity issue. As I said, in the long term, you know, once we sort of get through all these supply things, they'll work themselves out, and we'll have. We believe we'll have really good stability as it relates to sort of our working capital profile. Marshall, I don't know if you have anything to add to that.
No. Well, well said.
Great. Thanks so much for the details. It's appreciated.
Yeah. Thank you, Jim.
Your next question comes from a line of Adam Tindle from Raymond James. Your line is open.
Okay. Thanks. Good morning. Rich, you knew I would ask about working capital if you got to me, but maybe I'll save that for my second question. On synergies, you talked about tracking ahead. Would you characterize that as moving faster on your existing roadmap, or are you finding new areas of synergy where the total synergy number may end up being higher? I'm asking because you have that track record of overachieving on your slide. Just wondering if the total synergy number is maybe even tracking higher. If you could talk about the composition of the remaining synergy, that'd be helpful.
Adam, thanks for the question. This is Marshall. We're still committed to the $200 million as we enter into fiscal 2023. As in our prepared remarks, we're at $130 forecasted for the first year. No new elements to that, just moving quicker than we had expected throughout it. I would just say, if you think about the way that synergy of $130 breaks down, it's roughly 60% SG&A, and the rest is below the line in taxes and interest.
Yeah, as it relates to additional synergies, you know, typically you put a project plan, the better together you go, and you get myopically focused on executing that project plan. You know, we're kind of keeping our head down to make sure we get that accomplished. Subsequent to that, you know, I'm sure other opportunities will present themselves. We just, you know, don't have a quantitative point of view as to what that might be.
Makes sense. Maybe just as a follow-up, Marshall, I'll take the working capital question all the way up to ROIC instead. I realize you've reported a trailing four quarter metric, but it's just under 13%, and the year ago period was just over 21%. Maybe if you could talk about your view of where pro forma ROIC should ultimately go. Do you think you can get back into the twenties? The key drivers to that and timing to get there would be helpful. Thanks.
Thanks for the question, Adam. In our pro forma pre-merger expectation, we thought that ROIC on adjusted basis would land somewhere around 11%. As we continue to march through and integrate the companies and get the full digestion of debt and equity, you'll see that 12.5 land somewhere around that 11%. Adam, again, that's a forecast for the full year. From there, we believe given all the things we do in terms of capital allocation and reinvesting back in the business and acquisitions and other opportunities, we should see that step back up. Adam, you've heard us say this in the past. We always strive to have a 300-400 basis point ROIC above our weighted average cost of capital.
That continues to be the goal that we have in front of us.
Got it. Thank you.
Thank you.
Your next question comes from a line of Vincent Colicchio from Barrington Research. Your line is open.
Nice quarter, guys. Rich, I'm curious, are you seeing a general increase in turnover and/or stabilization? What does turnover look like for your top 100 leadership executives?
Yeah. If I talk about turnover, it clearly is elevated. To be candid with you, I'm really surprised relative to how successful we've been in our recruiting efforts as well. You know, I would say that we're not. You know, we're a little bit higher than normal, but very manageable. As it relates to our top hundred, we've been very stable. There have been no surprises that I'm aware of. You know, we have you know, managed team closely and stayed close to them, especially through the sort of the merger phase. I mean, there's incremental workload that is quite substantial, so we're asking people to do a lot more than the norm.
you know, I feel as if we've got really good stability in our top 100.
Three quarters into the integration, client loss is tied to diversification. Is that sort of in line with your expectations? Is it a meaningful number?
Good question, Vincent. This is Marshall. It's better than expected. As you know, we have a highly complementary vendor line card and same with the customer base. If we think about the integrations we've done so far and the commentary Rich has had about the Canadian CIS migration, it's gone very smoothly with very little disruption. We expect the same thing to be the case for the US migration. Very pleased with the overall result and significant upside, as we've mentioned in previous conversations around cross-sell once we get onto one platform.
Okay. That's it for me. Nice quarter. Thank you.
Thank you very much.
Your next question comes from a line of Keith Housum from Northcoast Research. Your line is open.
Good morning, guys. Hey, Rich, when you were in the Investor Day, you talked quite a bit about, you know, TD SYNNEX migrating toward more solutions for your customers and netted down revenue. Perhaps talk about progress made over the quarter and, you know, the demand for that you saw this quarter?
Yeah. If I could, during the Investor Day, we talk about high growth technologies. Just to give everybody sort of an insight there, we're talking about hybrid cloud and security, analytics and IoT, hyperscale infrastructure. Even within, you know, the endpoint space, AR/VR is within there as well. We have an expectation of a sort of an elevated growth rate, if you will, for that category. The core distribution piece of that clearly has been on track to deliver, if you will, that elevated growth rate. We talked about Hyve, you know, being a little bit lumpy, so we think about Hyve having that elevated growth rate annualized.
We're feeling really good, Keith, about those high growth technologies and kind of where we're at with, you know, more investment, if you will, to come to make sure that we continue to bring incremental value to that customer set. As it relates to the netting, you know, you get into those high growth technologies using cloud as an example. You know, there's that category in particular is one which gets netted. You know, as that becomes a larger netting that maybe, Marshall, you want to comment. Yeah, you're right. We always try to reference gross billings when we think about the high growth technology sections, and we'll do that going forward.
Early on, 2 quarters in, relative to our Investor Day profiles and what we thought, we're very much in line with that.
All right. Appreciate it. In terms of your guidance, perhaps give me some puts and takes on what would it take for, I guess, to come at a lower end of your guidance in terms of revenue, and, you know, what would it take to come to the higher end of your guidance? You know, so what's the, you know, the big swing items in your minds, and what would it take to actually, you know, beat the top end of your guidance?
I think, you know, I'll start then maybe Marshall can discuss it and maybe statement of the obvious, but if in fact we see a sudden downturn of demand based on the recessionary pressures that would have us find ourselves probably at the low end of our guidance. To get to the high end of the guidance, what would it take? Just one thing comes to mind, right? That is, you know, a significant release of supply to be able to sell through a bigger portion of the backlog. You know, obviously, you think about demand, but if incremental demand is constrained by adding to the backlog, then that would be a tougher putt.
I think, you know, a bigger release of supply would be helpful to get us to the higher end.
We don't see that as being likely this quarter, do we?
You know, it's hard to predict. I think I was talking earlier about the evolution of you know the PC stuff being at the front end of the pandemic demand-wise, and then the advanced solution stuff being higher demand. You know, I think Matt had commented earlier, I think, in his insight that you know or asked is the PC stuff becoming a bit more stable. It kind of feels like it is. You know, never say never, but we have a pretty tight relationship with most of our suppliers, and we really. Once we hear from the regions, you know, they actually, if you will, cross-check with regard to our vendors to make sure that we're supply supported.
In fact, you know, that would be our range currently would be our best call. You know, if there are pleasant surprises that would come, they would be just that pleasant surprises.
Great. Thanks. Appreciate it.
Your next question comes from the line of Ananda Baruah from Loop Capital. Your line is open.
Hey, good morning, guys. Thanks for taking my question. I guess I have two, if I could. Rich, I don't think I heard you in any of your answers give what your consumer exposure is. I'd love that, and if you did, I apologize for the repeat question.
Yeah. If you take a look at the charts that we had included in the pack, we had a special emphasis or special insight, if you will. You know, if you think about the consumer piece sort of standalone, you could think about it as being a sort of mid-single digit % of our total overall portfolio.
It's really small at this point.
Well, yeah. I mean, it's mid-single digits. You know, I think that the whole PC category, if it calibrates a pie, it's pretty well calibrated to the reality. You know, you can think of the whole PC category as being 20%-ish, and then, you know, the consumer piece being a percent of that, which gets us to 5% of the whole.
Got it. What about some of the legacy stuff for each company? You know, legacy Tech Data has had sort of handset exposure primarily in Europe and legacy SYNNEX had some meaningful consumer exposure, retail exposure in North America. Are those both de minimis at this point? You know, really the PC, the retail. So really the consumer exposure is on the PC side at this point.
Ananda, this is Marshall. Yeah, we still have legacy SYNNEX, New Age Electronics, great business performing well. On the legacy Tech Data side, we've got, we call it consumer-related mobility in Europe.
Right. That's performing, you know, consistent with expectation as well.
That's helpful, guys. In any sense, Rich, or Marshall, if we stack those two up, you know, to the PC consumer, like where that would sort of land for the company, kind of what consumer exposure would be overall as a percentage of revenue?
You're asking if you were to have included mobility within the PC category, what would that be? I don't have the number right in front of me, but I wouldn't even comment. You know, I wouldn't think it would be super material.
Cool. That's helpful. I guess sort of, Rich, your comments about second half 2022, good IT spending environment. Like, what are you guys seeing? I guess what I'd love is to get some context, kind of two things. Like, you know, what are you guys seeing, maybe your interpretation, kind of the overall theme, you know, of customer behavior is, you know, right now, given, you know, kind of macro indicators. You know, everybody's, you know, sort of watching the same macro indicators. It seems like commercial spending has been very well intact. At the same time, Marshall, you're actually one of the people who's watching these macro indicators, you know, so, you know, as the CFO of SYNNEX.
You know, what are you experiencing, I guess, is the overarching theme from your customers? You have this one situation where commercial demand is clearly very well intact. You know, at the same time, you know, kind of the macro indicators are what they are, and your conclusion is, you know, so solid IT spending through the second half of the year. Like, just would love any context there, you know, to try to get a sense of what it is you think your customers are experiencing as you guys interpret it.
Yeah. Maybe I'll go first. I hate to be a little bit repetitive here, but we see a really strong infrastructure, you know, the Advanced Solutions category, you know, that area continues to, I think, be most challenged as it relates to supply and backlog. The PCs are moderating with a particular emphasis of the consumer segment being sort of weaker. We see that. We sort of articulated that theme when we started the year. We said the first half we thought that there would be good demand around PCs and the AS segment would begin to, you know, if you will, accelerate a bit, and then in the back half, we'd see more moderation in PCs and that we'd have solid demands around the AS category.
I think that's what we see playing out. The only other thing that I would offer is the high growth technologies of cloud, analytics and IoT security and hyperscale as a basket. You know, those growth rates are strong, and they're becoming a more and more meaningful part of our business as we move through time. From an end user demand perspective, certainly the high growth technologies, the Advanced Solutions, project-based business and then PC moderation.
Great. That's super helpful. All right. Thank you guys. Appreciate it.
Thank you, Ananda.
At this time, there are no more questions. This concludes today's call. Have a nice day.