Good morning. My name is Brent, and I will be your conference operator today. I would like to welcome everyone to the TD SYNNEX First 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 speakers' 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, 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, strategy, demand, free cash flow, capital distribution, leverage, backlog and supply, macro economy, and investments.

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 Web site, 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?.

Good morning and thank you for joining our call. I want to take a moment upfront to acknowledge the ongoing devastation and human suffering occurring in Ukraine. We joined governments, businesses, and the global community in condemning the unprovoked invasion of the sovereign democratic state of Ukraine by Russia.

While we do not have a presence nor direct business in Ukraine or Russia, in normal circumstances, we do make very limited shipments on behalf of our customers into Russia and Belarus.

In addition, at this time, we have suspended any new transactions with or shipment of products to entities or individuals located in Russia, Belarus, and the DNR or LNR regions of Ukraine.

Importantly, we do have Ukrainian coworkers throughout Eastern Europe and in the U.S., and we are committed to supporting them through this difficult time, including making financial contributions to humanitarian aid efforts, such as UNICEF's Protect Children in Ukraine campaign.

Corporate giving has and will continue to be an important pillar of our overall environmental, social, and governance framework. From a broader ESG perspective, there is a lot of exciting work happening at TD SYNNEX, and we look forward to sharing more details on our goals and initiatives at our Investor Day next week.

Now, I'd like to comment on our quarterly results. Q1 provided a strong start to our fiscal year, with top and bottom line results ahead of our expectations. The benefits of our enhanced global end-to-end portfolio are clear, and we saw a strong and broad-based demand across technology types and geographic regions.

Our customers are quickly adapting to the new normal hybrid work environment which is creating a need for additional IP infrastructure, devices, and services to support both return to office and work-from-home setups.

Based on the breadth and depth of our portfolio, we are able to deliver a comprehensive array of technology solutions that customers, both small and large, require. In addition, the need for IT infrastructure solutions, whether on premises or in the cloud, gained momentum throughout the quarter.

With businesses opening back up, we saw our customers responding to stronger end-user demand. From a regional perspective, all three regions performed at or better than our expectations, despite selective lockdowns in some countries due to the COVID Omicron variant.

The ongoing supply chain disruptions continued, as we anticipated, in Q1, so we began to see some early signs of marginal improvement in our backlog. Despite these indications, our total backlog level continues to be elevated, and we believe it's comprised of both current customer needs as well as future orders based on extended lead times.

From a strategic perspective, we are executing well on our plans and look forward to sharing more with you at our Investor Day, next Tuesday. At that event, you will hear much more about our strategic framework and views on the evolution of the IT distribution ecosystem, with presentations from many members of our executive leadership team.

Our integration efforts are executing as planned, and we are on track to achieve our merger-related synergy targets. Our Americas ERP system migration is proceeding according to plan, and we've begun to migrate some of our Canadian vendors and some net new U.S. vendors on to the legacy SYNNEX platform, which we call CIS.

We are taking a measured approach to this project to ensure a seamless experience for our customers and vendors. Additionally, we have made very good progress on aligning our global policies across a variety of areas.

And as I frequently said, aligning our One Global TD SYNNEX corporate culture is critical, and we have made very good progress there too. We have introduced a servant leadership model across the organization, and are looking forward to bringing over 100 of our top leaders together for an in-person leadership seminar next month.

We see this as an important journey, and are very pleased with the progress we've made so far. As we look forward to the fiscal Q2 and beyond, there are a variety of inputs informing our views. We continue to believe in the technology adoption trends fueling IT spending in 2022, and beyond.

At the same time, we are cognizant that IT spending has historically been correlated to GDP. We recognize that more vendor partners understand the value of IT distribution, and we believe they are choosing TD SYNNEX because of our extensive global footprint and broad portfolio, which creates unique capabilities and market opportunities.

From offsetting headwinds to this maybe potential impacts to the macro economy and supply chain from the war in Ukraine and recent COVID-related lockdowns in Asia, we are closely monitoring developments in both areas.

One this is for certain, our teams have proven their capabilities in navigating a challenging and unpredictable environment over the last two years, and we will continue to remain singularly focused on enabling success for our customers and vendors. I will now pass it over to Marshall, who will provide additional details on our financial performance.

Marshall?.

Thanks, Rich, and thank you to everyone today for joining us on our call. We had a strong start to the fiscal year, with results ahead of our expectations.

We continue to see a challenged supply environment, as expected, and given the excellent focus on execution, our teams were able to deliver performance at or better than we anticipated across all three geographic regions. Total worldwide revenue came in at $15.5 billion, up 1.5% from the prior year when normalizing for the merger.

When adjusted for constant currency and the ASC 606 revenue policy alignment related to the merger, revenue grew approximately 6%. Gross profit was $969 million and gross margin was 6.3%, reflecting a favorable mix of products and good execution by our team.

Total adjusted SG&A expense was $562 million representing 3.6% of revenue and in line with our expectations. Non-GAAP operating income was $432 million and non-GAAP operating margin was 2.8%. Non-GAAP interest expense and finance charges were $41 million and the non-GAAP effective tax rate was approximately 24% and in line with our expectations.

Total non-GAAP net income was $292 million and non-GAAP diluted EPS was $3.03. Now, turning to the balance sheet, we ended the quarter with cash and cash equivalents of $510 million and debt of $5 billion. Our gross leverage ratio was 3.1 times and net leverage was 2.8 times.

Accounts receivables totaled $8.7 billion, and inventories totaled $7.7 billion. Our net working capital at the end of the first quarter was $4.3 billion. Our cash conversion cycle for the first quarter was 24 days, and higher than Q4 of fiscal '21, which was 14 days. Cash used in operations was approximately $1.3 million in the quarter.

This use of cash was primarily due to a temporary increase in net working capital to support revenue growth, and strategic inventory purchases that are expected to sell through in the next three to four months. From a shareholder return perspective for the quarter, our Board of Directors has approved a cash dividend of $0.30 per common share.

The dividend is expected to be paid on April 22 2022 to stockholders of record as of the close of business on April 8 2022.

As we mentioned in our last earnings call, we're employing a capital allocation framework that targets both dividends and share repurchases as shareholder returns vehicle, we intend to do share repurchases of about $100 million in fiscal '22 and have already bought back $25 million in Q1 and expect to repurchase another $25 million in Q2.

As Richard mentioned, our integration efforts are going well and we continue to make good progress on realizing merger.

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 and taxes and interest.

As we contemplate the full fiscal year, we expect revenue growth approaching mid single-digit, which includes an approximate $1.1 billion of headwinds due to the alignment of accounting policies, and a headwind of approximately $1.2 billion due to FX impacts from the weakening of the Euro.

We now expect non-GAAP EPS to be $11.15 to $11.65 per share, which is an increase from $10.80 to $11.20 provided in our last quarterly update. Our updated forecasts also reflect an expected $0.18 headwind from FX. Given our upcoming Investor Day, we wanted to provide you with an updated view of the full-year.

Historically, we provide quarterly guidance, and we'll return to our historical precedent next quarter.

Looking more specifically at fiscal Q2, it's a bit more difficult to forecast with precision, given the increased level of macro economic uncertainty due to the war in Ukraine, potential COVID impact, rising inflation and the continuing supply chain constraints.

Against that backdrop, our view encompasses our current estimates, given the information we currently have for Q2 and the full-year.

For fiscal Q2, we expect total revenue to be in the range of $14.8 billion to $15.8 billion, which when adjusted for currency impacts of approximately $300 million and ASC 606 revenue policy alignments related to the merger of approximately $300 million. This equates to growth of around 3% on a year-on-year basis.

Although we began to see some stabilization in our backlog in Q1, the level continues to be elevated compared to historical levels, and we estimate the impact to fiscal Q2 revenue will be approximately 4% to 5%.

Non-GAAP net income is expect to be in the range of $231 million to $270 million, and non-GAAP diluted EPS is expect to be in the range of $2.40 to $2.80 per diluted share based on weighted average shares outstanding of approximately $96 million.

Non-GAAP interest expense is expected to be approximately $37 million, and we expect the non-GAAP tax rate to be approximately 24%. Please note that these statements regarding our expectations for our fiscal second quarter of 2022 and full-year of 2022 are forward-looking, and that our actual results may differ materially.

We now will take your questions.

Operator?.

[Operator Instructions] Your first question comes from the line of Ruplu Bhattacharya with Bank of America. Your line is open..

Hi. Thank you for taking my questions.

Rich, I was wondering if you can comment on the margin differential between the SYNNEX side of the business and the Tech Data side of the business, and how quickly do you expect that gap to close? And specifically, you've talked about $100 million this year of deal synergies and some of that is from the GBO 2 initiative.

So, just wondering like how much of these are helping to harmonize the margins between the two sides of the business. So, any comments you can provide on that would be helpful..

Sure. As a generalization, when you take a look at the margin differentials between the legacy businesses, you'll find that the Americas margins are not very different, but rather it's the regional mix of the margins that drive some of the differences you see in-between the two companies.

For many companies within the IT industry in Europe, the margin profiles are a bit lower when compared to the Americas profiles, and that generally is due to costs driven by complexity of regional -- I'm sorry, country structures within that region. So, that's kind of the way we think about the margin differentials.

And from a European perspective, just to close it out, we are really happy with our European financial model. The return on investment capital attributes of that model are quite good. And so, that's the way we think about it.

And in addition to that, one last thought around Europe is, there is more intensity around the, what I would call, the endpoint part of the business. We do business in Europe and actually carry some mobility lines that are fairly significant.

And those mobility lines, again, although they are lower margin attributes, the return on invested capital attributes of those segments are really, really good. So, that's sort of the summary.

In addition to that, from a synergy perspective, again just to recap what we had committed to at time of deal, $100 million in year one, $100 million incremental in year two, for $200 million in total.

We feel good about where we're at from the execution of that overall plan; call it on track, actually, tactically, running a bit ahead relative to our expectations there..

Ruplu, this is Marshall. Just to add a little color to the $100 million synergies for year one, just as a reminder, an element of that is below operating income in the form of better taxes and interest.

So, your question to how do margins benefit, they certainly do from an SG&A perspective and from a GBO 2 initiative, but there's also below-the-line benefits as well..

Okay, thanks for all the details on that, I appreciate it. Can I ask you, Rich; you've also had time now to look at the line cards for the two companies.

Are there parts of the line cards that you want to enhance or, similarly, are there parts that you would like to prune?.

So, let me move on to the enhanced piece for just one moment. There are always parts of the line card that you would like to enhance. And, usually, it has to do with the emergence of new entrants, if you will, into the market.

And so, we're always focused in carrying out the business development to make sure that we capture our fair share of those new entrants overall. But we're very satisfied, as a generalization, with our line card, but always looking to improve it, is the best way to net it.

As it relates to pruning I know that, in the past, when Tech Data was a public company, we talked about some portfolio activities that were taking place. As a generalization, most of those portfolio activities, I would say, that were material have been completed in the past.

So, right now, we're kind of full speed ahead relative to executing our business. And there are no anticipated significant prunings, if you will, that we foresee at the current time..

Okay, thanks for that. And I can just squeak or squeeze one more in. Marshall, you talked about strategic inventory purchases. Looks like inventory was up 17% sequentially, but it is an environment where you need to plan for, for future revenues.

So, maybe can you just talk about how you see the cash conversion cycle going forward, and how should we think about free cash flow this year?.

Sure. So, it was elevated. We did call out that it was temporary. The cash conversion landed around 24 days for the quarter. We thought, coming out of Q4, we'd see a two to four-day deterioration to about 16. Think about this, Ruplu, every day is around 175 in terms of just cash generation or cash usage.

So, that's about six to seven days of increase that we saw. We still believe as we think through the rest of '22 and our thoughts on '23 being our second year of being together, that the $1 billion of free cash flow is still our target. And we expect to be able to achieve and hit that.

The other aspects for that, as we referenced earlier in our prepared remarks is, our capital allocation strategy and how we plan to deploy that. We think that there is still significant opportunities for us from the overall program management on various customer and vendor supply financing.

Those synergies and benefits to us, we think, are significant and will continue to be brought into the overall management of our programming going forward..

Thank you for taking my questions, and congrats on the strong execution in the quarter..

Thank you..

Your next question is from the line of Ananda Baruah with Loop Capital. Your line is open..

Hey, good morning, guys, and congrats on the strong results, and thanks for taking the question. I guess, yes, just a couple for me, if I could. You guys mentioned a couple of times that the results were above your expectations or ahead of your expectations for top line.

Can you talk about what you saw as being the drivers there, and including anything that's SYNNEX-specific? And then I had a follow-up. Thanks..

Yes, so, Ananda, good morning to you. Hope you're doing well.

Couple of thoughts, we had provided a point of view early on that we, as we move through this year, that we would see an acceleration within the datacenter, we call that segment Advanced Solutions, and then maybe a little bit of a moderation as it relates to the PC ecosystem, which we call Endpoint. And in fact, it's playing out that way.

Obviously, there is a lot of backlog still to be worked off within the Endpoint segment. But as we had stated in the prepared comments, moving through the last quarter and into this quarter, and throughout the quarter, we'd seen more strength within the Advanced Solutions segment.

And the theory behind that is, obviously, with COVID and people being remote, the project-based business was a bit delayed. People weren't coming in to deploy those projects. And now, I think they're beginning to take root. So, that's what I would state relative to how we had seen.

So, to be specific, a bit of the overachievement that we're talking about was primarily due to that Advanced Solutions segment..

That's super helpful.

And I'm going to -- I guess on the follow-up, just going over to the PC business, could you -- two things, could you just give us what your view is sort of like throughout the year from your current baseline business, like what you're seeing? So I guess it's more of like, like a sequential kind of through the year view, do you think things are stable here from a shipment go forward basis, I know the year-over-year might look a little bit different, but from today's current baseline book, and then just any color on Hyve would be great, too.

And that's it for me. Thanks, guys..

Yes, so I'll handle the PC piece, and then maybe hand it off to Marshall to give his comments around the Hyve piece. But on the PC piece, again I apologize for being a little bit repetitive.

But the expectation was first-half the year moderate, I'm sorry a bit robust, moving to moderate and then sort of maintaining that moderate through the rest of the year.

And I think that that still is the way I would couch it, as you know, there still are things which are sort of driving demand within that space as we come through the operating system transitions.

And every company is very conscientious or more than ever about security, and some of the attributes in the new operating systems, applications, et cetera tend to help drive continuous refresh. But allow me to kind of put it in sort of moderate category as opposed to the robust category sort of moving forward to the back half of the year.

And then, expectation would be that the advanced piece, as I said earlier would have some pretty good growth attributes moving through the next couple of quarters, Marshall on the Hyve piece?.

Ananda, Hyve had a great quarter. Broadly speaking, Hyperscale infrastructure continues to grow in the double-digit category. That's the industry comment. And Hyve is certainly benefiting from that. In the quarter, we saw similar distribution like strength.

And what that represents is our capability to provide spares, lubes, replacement parts to our hyperscale players on a global basis that continued to show strength in Q1.

And as we spoke to previously, Hyve has done a tremendous job of enabling their overall end-to-end solutions portfolio to further increase current customer business and also expand to new customers..

Marshall, that's super helpful.

Anything that we should be aware of, as to why if hyperscale buildups continue this year to be robust that Hyve wouldn't be a beneficiary of that?.

Certainly, they're correlated, as you know, it's a lumpy business. So, speaking of lumpy in Q2, Hyve had a very strong prior-year Q2.

So, it's a tougher compare but if you think about the first-half, Hyve revenue and operating income grew and we'd expect as you look out on an annual basis, that there will be a correlation between hyperscale infrastructure growth and Hyve opportunities..

I think it's a good reminder that our feeling relative to that segment is that, as Marshall had just stated, I'm reiterating that we expect to have really good growth attributes within that business annually.

But there are ups and downs quarter to quarter to quarter depending on the ebb and flow of the requirements and sometimes you run into compares that are a bit stronger. So, but we like the fundamentals of that business..

Thanks a lot, guys. That's super helpful..

Thank you, Ananda. Appreciate it..

Your next question is from the line of Keith Housum with Northcoast Research. Your line is open..

Good morning, guys. Good to talk to you again. Just looking your second quarter guidance, it seems like there's a setback in terms of the operating margins from the first quarter. And you may perhaps have answered this question in part by the Hyve response, but anything at least we think about in terms of the second quarter operating margin step back..

Good morning, Keith, I hope you're doing well. Hi, Keith this is Marshall. I'll take it first and then Rich can provide any other commentary.

Keith, what we're seeing just in terms of the seasonal behaviors of the collective organizations come together is that Q4 and Q1 are behaving very similarly meaning revenue profiles, margin profiles are fairly consistent. You can see that in the numbers we just posted for quarter one.

We're also seeing some seasonal relationships between quarter two and quarter three. In Q1, that has typically been a stronger Legacy Tech Data quarter or AS demand in business is higher that has a higher margin profile.

In Q2, what we're seeing is a more balanced profile between AF and EF, such that margins historically what we're seeing traditionally come down 30 basis points, plus or minus, but most of that is just the seasonal relationships, we're starting to see as a combined organization coming together, nothing in terms of structural changes in gross profit or gross margin, and nothing in terms of structural changes than what we're seeing in terms of operating margin..

All right, that's helpful. I appreciate it. And then, in terms of the inflationary environment, right, I mean, we've had a lot of price increases from the vendors over the past year. And you guys have interesting some deflationary wage pressures.

But can you talk a little bit about the balance that you guys are seeing in terms of the pricing pressure versus wage inflation and how to think about for the remainder of the year?.

Yes, so let me let me start and then I can handle it to -- hand it off to Marshall, Keith, so let's take it a piece at a time. First, as it relates to vendors and pricing, there are continuous price changes all moving, you know in an upward direction as we move through time, so that has not abated.

And obviously the things that you talk about all away from more expensive components, the more expensive labor, it's more expensive freight, I believe are all contributing to that. We as you know, depending on the circumstance can benefit from increased under prices.

And it basically is in those situations where we have inventory within you know, our system and, you know, as they take their prices up, we take our prices up. So, we anticipate that that's like a 5 to 10 bps sort of margin advantage for us, when that type of activity occurs.

Then to kind of get closer to home obviously, the inflationary impacts that are happening through the world are happening to us as well. So, we see our labor increasing a bit more than it has historically. Then in addition to that cost of freight has been, going up as well.

And we are pretty determined to make sure that we stay on top of that and make sure that we're pricing that in as we see it unfold, and we try to make sure that we're worth staying aligned with those changes and that's the way we sort of execute the business..

And Keith, the only thing I'd add to that is from quarter-to-quarter we may see ebbs and flows where we may have a little bit higher cost associated with any of those inflationary pressures that typically over the period of a year or more we have effectively been able to cover whether that's the pass-throughs or productivity enhancement, such that it doesn't erode our margins..

Great, thanks, guys. I appreciate it..

Well, thank you..

The next question comes from the line of Matt Sheerin with Stifel. Your line is open..

Yes, thanks. Good morning, everyone. I have some follow-ups to the questions that were asked and just one concern being the backlog commentary rich, that is sort of stabilized.

Do you differentiate that between the client device side versus the infrastructure side because we're still hearing very long lead times for things like networking and storage products? So could you parse that into those two segments?.

Great question, Matt. It is the Tale of Two Cities, so you know the marginal improvements that we're seeing in the backlog are clearly coming from the endpoint segment. However, we still have a growing and an elevating backlog in the advanced solutions piece.

Just about across the board, we see issues there, but in particular with the newest technology, the lead times are the longest, so it is the tale of two cities within the backlog, for sure..

Okay, that's helpful. And then, just regarding the question, the previous question on margins, we sort of backing into gross margin, it looks like that's going to be down. Is that also a function of mix and looks like you had a really nice mix that helped drive that margin upside in into Q1..

Now, just as a reminder, and I should have said this earlier, we have a great Q1 investor deck and the TD SYNNEX investor website, it helps show pre-merger consolidated results assuming that we were together as of December 1st, I just want to let you know that, that helps having an apples-to-apples comparison.

We do affect gross margins and gross profits to improve and that's the year-over-year comment for Q2 as we see it, and also as I spoke to earlier with Keith, or about Keith question, the margin for hot margin does comes down sequentially, but year-over-year. We also expected to improve..

My question was sequential, I guess a year-a-year, but it looks like on a sequential basis, gross margin will be down.

And so, my question is, is that a seasonal mix issue?.

It is that's exactly right. It's back to the commentary I had with Keith that we do see just an overall play in AS versus ES between Q4, or Q1 and Q2, and that's what we're experiencing..

Okay. All right, thank you..

You're welcome..

Your next question is from line of Jim Suva with Citigroup. Your line is open..

Thank you, and good morning. I had one question and that is on your full-year outlook. It looks like you're taking it off, very materially, if my memory is right, you talk about 1115 to 65. And before I think it was like 1080 to 1120. So, it looks like it's taken off materially.

Can you let me know if my math is right to be one of the main drivers behind that is it's better margins that are mixed, because it seems like even three months ago, the backlog was, really elevated and lengthened and giving good visibility. So, it seems like something materially has really improved here.

And so, I'm just kind of curious about that improvement, which is a positive. Thank you..

Again, this is Marshall. I'll start and let Rich finish it within at a commentary. Yes, we're very pleased to be able to raise the overall guidance for the year.

I'll start with the backdrop of competence around mid-single digit growth rate for the full-year and that's adjusted for ASC 606 and FX, I think the goodness that we're experiencing is in two categories.

One is the affirmation and ability to realize our synergies that we spoke to earlier, the second is the better than performance in regards to the combined entity. So, our team's working together and I touched on this a little bit earlier.

We are discovering and finding even more ways to be efficient that aren't being tracked through our synergies, hard ROI to go after everything that we see that is beneficial, but we're seeing continued goodness at a better than expected rate in regards to our two enterprises coming together..

Yes Keith, it's Rich. I just wanted to provide some comments on that. As well, if I could, I believe the midpoint of the margin that we had arranged that we give them before it's like a eleven box and if we go to the midpoint currently.

It's 1140 right? So to give you some confidence in the full-year, we delivered if you just go back to that baseline we'd have delivered in material portion of that in Q1 relative to the 303. So, I just want to make sure you have that perspective..

That's great. And as a follow-up, you've talked a lot about your milestones per your costs, synergies being on track and then you get a little slightly a little bit better, which is good to hear.

On revenue side, you've not talked a whole lot about revenue synergies, is that still a discovery process and is there something there I'm just thinking about some approved vendors, or some synergies or better rebates or better buying purchasing power. Again, that focus was a lot on the cost synergies.

I'm just wondering about the revenue side of things or is that something more than potentially, we'll be hearing about next week at your Investor Day..

So, we believe that the revenue there are revenue, synergy opportunities and just a quick recap is, Legacy TD had a broader base of a data center business, Legacy SYNNEX, business to check one category had a stronger security practice. So, we go in both directions with that right. Now, what you have to remember is our ERPs are not yet consolidated.

So, whenever one of these opportunities show there's a bit of a manual engagement, if you will, one of the legacy reps having to engage the other side to get it loaded into the system, etc.

So, it's our speculation that the unlocked for that revenue synergy really comes to life when we get aligned in the ERPs, and then a sales person will naturally be able to engage. And then, work within the system that they in the common system that they have all their visibility to.

So, long story short, we see them, we hear about them, we take advantage as we can, but the unlock will be once we get to a consolidated platform..

And that consolidated platform ERP, I know you mentioned, you're going to do it very slow. So, there's no hiccups.

It's kind of North American persons, that's what's the timeline on that again?.

Yes, so we are already underway, we have began to migrate customers and vendors in Canada, we're getting, we'll get through Canada, a big segment of Canada, if you will, sort of April, May, then we've already also started to board some of the mismatches in the line cards to the CIF system in the U.S., and then we'll get underway in the U.S.

And we'd expect it to as I said in the last call be a Rolling Thunder, and now by the time we get to the end of this year, if everything goes as planned, we'll have a pretty significant portion of the business moved over.

The entirety of getting the business moved over consistent, what we've said during the integration will be within that total two year horizon, but expect it to be material feeds by year-end, and then close out the rest in the first nine months of '23..

Thank you, and congratulations to you and your team in such a challenging time. Good job..

Hey, thank you. Thanks very much and hope you're having a great morning..

The final question comes from the line of Vincent Colicchio with Barrington Research. Your line is open..

Hey, Rich, I was wondering if you could talk about what areas of the business where you are seeing the most wallet share gains?.

So, from an overall market perspective, obviously all of those insights, they follow the close of the quarter, if you will.

But I would say that, we had had questions in the past relative to larger wallet shares with some vendors, and whether we had concern that they would be taking action perhaps to move away, there's been none of those indications, we have had enthusiastic engagement with our vendors, and feel as if we have a lot of headroom with all of them, because of if you will, the transitions to the new technologies, cloud, analytics, security, IoT.

And so, we're building AR/VR is another example and a lot of Edge solutions. So, we're building out plans to engage with them in those high growth areas. And I would expect that will grow consistent, if not ahead of the market as we move forward. And that's kind of how we think about it..

And it sounds like the integration is going well, but need to ask given the tight labor market and disruption from big integration, has there been any pickup in turnover at Tech Data?.

Well, I think like the rest of the world, the turnovers have been elevated relative to what the historical norms have been.

However, I wouldn't say that there's anything that is unprecedented or like seriously concerning, our focus is to make sure that we're providing great career opportunities, a fair and competitive set of financial opportunities and benefits.

And we say keep up close with our teams to sort of understand where we're at, but to be direct and answer your question, within the current environment, there's nothing that's really out of the norm for us currently..

Okay, thanks for answering my questions. Nice quarter, guys..

Thank you very much. We appreciate you joining..

At this time, there are no more questions. This concludes today's call. Have a nice day..

Thanks, everyone. Good day..