What changed in this filing

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Item 1. Financial Statements

2022-10-07 compared with 2022-07-08 · 189 added, 145 removed, 567 unchanged (37% of the section changed)

3 unchanged sentences

(currency and share amounts in thousands, except par value)

May 31, 2022 November 30, 2021

August 31, 2022 November 30, 2021

Current assets:

9 unchanged sentences

Total assets $ 6,749,874 $ 5,046,367

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

10 unchanged sentences

Commitments and contingencies (Note 14)

Redeemable non-controlling interest 2,157 —

Stockholders’ equity:

Preferred stock, $ 0.0001 par value, 10,000 shares authorized and no shares issued and outstanding as of May 31, 2022 and November 30, 2021, respectively

Preferred stock, $ 0.0001 par value, 10,000 shares authorized and no shares issued and outstanding as of August 31, 2022 and November 30, 2021, respectively

Common stock, $ 0.0001 par value, 250,000 shares authorized;

52,058 and 51,927 shares issued as of May 31, 2022 and November 30, 2021, respectively, and 51,342 and 51,594 shares outstanding as of May 31, 2022 and November 30, 2021, respectively

52,093 and 51,927 shares issued as of August 31, 2022 and November 30, 2021, respectively, and 51,016 and 51,594 shares outstanding as of August 31, 2022 and November 30, 2021, respectively

Additional paid-in capital 2,415,868 2,355,767

Treasury stock, 716 and 333 shares as of May 31, 2022 and November 30, 2021, respectively

Treasury stock, 1,077 and 333 shares as of August 31, 2022 and November 30, 2021, respectively

( 167,420 ) ( 57,486 )

2 unchanged sentences

Total stockholders’ equity 2,646,627 2,620,255

Total liabilities, redeemable non-controlling interest, and stockholders’ equity $ 6,612,652 $ 5,046,367

Total liabilities and stockholders’ equity $ 6,749,874 $ 5,046,367

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(currency and share amounts in thousands, except per share amounts)

Three Months Ended Six Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Revenue $ 1,579,602 $ 1,397,251 $ 4,683,755 $ 4,120,407

8 unchanged sentences

Net income before non-controlling interest 107,124 109,754 330,696 281,469

Net income (loss) attributable to non-controlling interest ( 109 ) — 157 —

Net income attributable to non-controlling interest 434 — 591 —

Net income attributable to Concentrix Corporation $ 106,690 $ 109,754 $ 330,105 $ 281,469

9 unchanged sentences

(currency in thousands)

Three Months Ended Six Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Net income before non-controlling interest

1 unchanged sentence

Other comprehensive income (loss):

Unrealized gains (losses) of defined benefit plans, net of taxes of $ 0 and $ 0 for the three and six months ended May 31, 2022, respectively, and $ 0 and $ 98 for the three and six months ended May 31, 2021, respectively

Unrealized gains (losses) of defined benefit plans, net of taxes of $( 51 ) for the three and nine months ended August 31, 2022, respectively, and $ 0 and $ 98 for the three and nine months ended August 31, 2021, respectively

951 2 1,717 ( 446 )

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $ 4,440 and $ 5,387 for the three and six months ended May 31, 2022, respectively, and $( 6,048 ) and $( 3,793 ) for the three and six months ended May 31, 2021, respectively

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $ 10,392 and $ 15,779 for the three and nine months ended August 31, 2022, respectively, and $ 3,840 and $ 47 for the three and nine months ended August 31, 2021, respectively

( 30,299 ) ( 11,219 ) ( 46,003 ) ( 620 )

Reclassification of net (gains) losses on cash flow hedges to net income, net of taxes of $( 1,078 ) and $( 846 ) for the three and six months ended May 31, 2022, respectively, and $ 2,518 and $ 5,540 for the three and six months ended May 31, 2021, respectively

Reclassification of net (gains) losses on cash flow hedges to net income, net of taxes of $( 3,344 ) and $( 4,190 ) for the three and nine months ended August 31, 2022, respectively, and $ 1,400 and $ 6,940 for the three and nine months ended August 31, 2021, respectively

9,752 ( 4,091 ) 12,217 ( 20,617 )

1 unchanged sentence

( 20,547 ) ( 15,310 ) ( 33,786 ) ( 21,237 )

Foreign currency translation, net of taxes of $ 0 for the three and six months ended May 31, 2022 and 2021, respectively

Foreign currency translation, net of taxes of $ 0 for the three and nine months ended August 31, 2022 and 2021, respectively

( 113,863 ) ( 56,105 ) ( 182,697 ) ( 14,366 )

1 unchanged sentence

( 133,459 ) ( 71,413 ) ( 214,766 ) ( 36,049 )

Comprehensive income 48,225 128,579 142,265 207,079

Comprehensive income (loss) ( 26,335 ) 38,341 115,930 245,420

Comprehensive income (loss) attributable to non-controlling interest 434 — 591 —

Comprehensive income attributable to Concentrix Corporation $ 48,334 $ 128,579 $ 142,108 $ 207,079

Comprehensive income (loss) attributable to Concentrix Corporation $ ( 26,769 ) $ 38,341 $ 115,339 $ 245,420

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(currency and share amounts in thousands)

Three and Six Months Ended May 31, 2022

Three and Nine Months Ended August 31, 2022

Concentrix Corporation Stockholders’ Equity

1 unchanged sentence

Redeemable non-controlling interest Shares Amount Additional paid-in capital Shares Amount Retained earnings Accumulated other comprehensive loss Total stockholders’ equity

Balances, February 28, 2022 $ 2,266 51,664 $ 5 $ 2,389,403 348 $ ( 60,040 ) $ 489,656 $ ( 87,025 ) $ 2,731,999

Balances, May 31, 2022 $ 2,157 51,342 $ 5 $ 2,404,281 716 $ ( 118,248 ) $ 589,740 $ ( 151,833 ) $ 2,723,945

Other comprehensive loss — — — — — — — ( 133,459 ) ( 133,459 )

Net income attributable to non-controlling interest 434 — — — — — — — —

Purchase of non-controlling interest in subsidiary ( 2,591 ) — — 91 — — — — 91

Share-based compensation activity — ( 326 ) — 11,496 — — — — 11,496

3 unchanged sentences

Net income — — — — — — 106,690 — 106,690

Balances, May 31, 2022 $ 2,157 51,342 $ 5 $ 2,404,281 716 $ ( 118,248 ) $ 589,740 $ ( 151,833 ) $ 2,723,945

Balances, August 31, 2022 $ — 51,016 $ 5 $ 2,415,868 1,077 $ ( 167,420 ) $ 683,466 $ ( 285,292 ) $ 2,646,627

Balances, November 30, 2021 $ — 51,594 $ 5 $ 2,355,767 333 $ ( 57,486 ) $ 392,495 $ ( 70,526 ) $ 2,620,255

3 unchanged sentences

Net income attributable to non-controlling interest 591 — — — — — — — —

Purchase of non-controlling interest in subsidiary ( 2,591 ) — — 91 — — — — 91

Share-based compensation activity — ( 578 ) — 44,285 — — — — 44,285

3 unchanged sentences

Net income — — — — — — 330,105 — 330,105

Balances, May 31, 2022 $ 2,157 51,342 $ 5 $ 2,404,281 716 $ ( 118,248 ) $ 589,740 $ ( 151,833 ) $ 2,723,945

Balances, August 31, 2022 $ — 51,016 $ 5 $ 2,415,868 1,077 $ ( 167,420 ) $ 683,466 $ ( 285,292 ) $ 2,646,627

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(currency and share amounts in thousands)

Three and Nine Months Ended August 31, 2021

Concentrix Corporation Stockholders’ Equity

1 unchanged sentence

Shares Amount Additional paid-in capital Shares Amount Retained earnings Former parent company investment Accumulated other comprehensive loss Total stockholders’ equity

Balances, February 28, 2021 51,214 $ 5 $ 2,314,996 4 $ ( 409 ) $ 88,811 $ — $ ( 14,125 ) $ 2,389,278

Balances, May 31, 2021 51,296 $ 5 $ 2,327,025 4 $ ( 527 ) $ 171,715 $ — $ 31,550 $ 2,529,768

Other comprehensive loss — — — — — — — ( 71,413 ) ( 71,413 )

2 unchanged sentences

Net income — — — — — 109,754 — — 109,754

Balances, May 31, 2021 51,296 $ 5 $ 2,327,025 4 $ ( 527 ) $ 171,715 $ — $ 31,550 $ 2,529,768

Balances, August 31, 2021 51,448 $ 5 $ 2,338,108 93 $ ( 13,964 ) $ 281,469 $ — $ ( 39,863 ) $ 2,565,755

Balances, November 30, 2020 — $ — $ — — $ — $ — $ 2,305,899 $ ( 3,814 ) $ 2,302,085

5 unchanged sentences

Net income — — — — — 281,469 — — 281,469

Balances, May 31, 2021 51,296 $ 5 $ 2,327,025 4 $ ( 527 ) $ 171,715 $ — $ 31,550 $ 2,529,768

Balances, August 31, 2021 51,448 $ 5 $ 2,338,108 93 $ ( 13,964 ) $ 281,469 $ — $ ( 39,863 ) $ 2,565,755

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(currency in thousands)

Six Months Ended

May 31, 2022 May 31, 2021

Nine Months Ended

August 31, 2022 August 31, 2021

Cash flows from operating activities:

7 unchanged sentences

Unrealized foreign exchange loss 914 ( 446 )

Other ( 107 ) 142

Gain on divestitures and related transaction costs — ( 13,197 )

Changes in operating assets and liabilities:

7 unchanged sentences

Acquisitions of business, net of cash acquired ( 1,705,447 ) ( 3,279 )

Proceeds from divestitures, net of cash sold — 73,708

Other investments ( 1,000 ) —

2 unchanged sentences

Proceeds from the Credit Facility - Term Loan 2,100,000 —

Repayments of the Credit Facility - Term Loan ( 125,000 ) —

Repayments of the Credit Facility - Prior Term Loan ( 700,000 ) ( 200,000 )

2 unchanged sentences

Cash paid for debt issuance costs ( 9,331 ) —

Purchase of noncontrolling interest in subsidiary ( 2,500 ) —

Proceeds from exercise of stock options 6,881 6,870

30 unchanged sentences

The Company successfully transitioned a significant portion of its workforce to a remote working environment throughout the second quarter of 2020 and implemented a number of safety and social distancing measures in the Company’s sites to protect the health and safety of the team.

During the three and six months ended May 31, 2022, almost all of the Company’s workforce was productive, but the Company experienced the continued effects of the COVID-19 pandemic, as variants caused new waves of COVID-19 cases around the globe.

During the three and nine months ended August 31, 2022, almost all of the Company’s workforce was productive, but the Company experienced the continued effects of the COVID-19 pandemic, as variants caused new waves of COVID-19 cases around the globe.

The extent of the continued impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute business strategies and initiatives in the expected time frame, will depend on future developments, including the duration, spread and severity of the pandemic, the evolution of the

5 unchanged sentences

For a discussion of the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021.

Accounting pronouncements adopted during the six months ended May 31, 2022 are discussed below.

Accounting pronouncements adopted during the nine months ended August 31, 2022 are discussed below.

Concentration of credit risk

For the three and six months ended May 31, 2022, no client accounted for more than 10% of the Company’s consolidated revenue.

For the three and six months ended May 31, 2021, one client accounted for 11.2 % and 11.5 %, respectively, of the Company’s consolidated revenue.

As of May 31, 2022 and November 30, 2021, one client comprised 10.4 % and 15.3 %, respectively, of the Company’s total accounts receivable balance.

For the three and nine months ended August 31, 2022, no client accounted for more than 10% of the Company’s consolidated revenue.

For the three and nine months ended August 31, 2021, one client accounted for 11.9 % and 11.7 %, respectively, of the Company’s consolidated revenue.

As of August 31, 2022 and November 30, 2021, one client comprised 10.8 % and 15.3 %, respectively, of the Company’s total accounts receivable balance.

Recently adopted accounting pronouncements

2 unchanged sentences

This standard became effective for the Company in fiscal year 2022 and did not have a material impact on the consolidated financial statements.

Recently issued accounting pronouncements

In March 2020, the FASB issued optional guidance to ease the potential burden for a limited time in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting.

The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments are elective and are effective upon issuance for all entities through December 31, 2022.

The Company is currently evaluating the impact of this guidance.

NOTE 3— ACQUISITIONS:

NOTE 3— ACQUISITIONS AND DIVESTITURES:

PK Acquisition

1 unchanged sentence

PK creates pioneering experiences that accelerate digital outcomes for their clients’ customers, partners and staff.

The acquisition of PK expanded the Company’s scale in the digital IT services market and supported the Company’s growth strategy of investing in digital transformation to

deliver exceptional customer experiences.

The acquisition of PK expanded the Company’s scale in the digital IT services market and supported the Company’s growth strategy of investing in digital transformation to deliver exceptional customer experiences.

The addition of the PK staff and technology to the Company’s team further strengthened its capabilities in CX design and development, artificial intelligence (“AI”), intelligent automation, and customer loyalty.

Purchase price consideration

The total purchase price consideration, net of cash acquired, was $ 1,581.0 million, which was funded by proceeds from the Company’s new term loan (the “Term Loan”) under its amended senior secured credit facility (the “Credit Facility”) and additional borrowings under its accounts receivable securitization facility (the “Securitization Facility”).

See Note 8 — Borrowings for a further discussion of the Term Loan, the Credit Facility and the Securitization Facility.

10 unchanged sentences

(1) Represents the cash consideration paid for the outstanding shares of PK’s common stock, which includes the final settlement of the merger consideration adjustment paid pursuant to the merger agreement.

(2) Represents the cash consideration paid for vested PK stock option awards and restricted stock awards.

(2) Represents the cash consideration paid for certain vested PK stock option awards and restricted stock awards.

(3) Represents the cash consideration paid to retire PK’s outstanding third-party debt, including accrued interest.

28 unchanged sentences

Total consideration transferred $ 1,610,630

As of May 31, 2022, the purchase price allocation is preliminary.

As of August 31, 2022, the purchase price allocation is preliminary.

The preliminary purchase price allocation was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject to change within the measurement period (not to exceed twelve months following the acquisition date).

1 unchanged sentence

The Company expects to continue to obtain information for the purpose of determining the fair value of the assets acquired and liabilities assumed on the acquisition date throughout the remainder of the measurement period.

The Company made immaterial measurement period adjustments during the second quarter of fiscal year 2022.

The preliminary purchase price allocation includes $ 469.3 million of acquired identifiable intangible assets, all of which have finite lives.

The Company made immaterial measurement period adjustments during the three months ended August 31, 2022.

The preliminary purchase price allocation includes $ 469,300 of acquired identifiable intangible assets, all of which have finite lives.

The preliminary fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis of certain cash flow projections.

9 unchanged sentences

Total $ 469,300

Impact on results of operations

The results of the PK operations have been included in the consolidated financial statements since December 27, 2021.

The following table provides the results of operations for PK included in the consolidated statement of operations from the acquisition date through May 31, 2022:

Three Months Ended Six Months Ended

May 31, 2022 May 31, 2022

Revenue $ 123,963 $ 207,159

Income before income taxes 2,773 2,980

In connection with the acquisition of PK, the Company incurred a total of $ 1.7 million and $ 2.6 million of acquisition-related and integration expenses for the three and six months ended May 31, 2022, respectively.

These expenses primarily include legal and professional services, and severance and retention payments to integrate the business.

These acquisition-related and integration expenses were recorded within selling, general and administrative expenses in the consolidated statement of operations.

Supplemental Pro Forma Information

7 unchanged sentences

The supplemental pro forma financial information for the periods presented is as follows:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

2022 2021 2022 2021

1 unchanged sentence

Net income 107,912 115,236 327,701 281,089

ServiceSource Pending Acquisition

In May 2022, the Company announced a definitive agreement to acquire ServiceSource International, Inc.

(“ServiceSource”), a global market leader in B2B digital sales, for $ 1.50 per share in an all-cash transaction valued at approximately $ 131 million, inclusive of ServiceSource’s net cash.

ServiceSource is a global outsourced go-to-market services provider, delivering B2B digital sales and customer success solutions that are expected to complement the Company’s existing offerings in this area.

The transaction is expected to close in the second half of fiscal year 2022, subject to customary closing conditions, including approval by ServiceSource’s stockholders and regulatory requirements.

ServiceSource has established a special meeting date of July 20, 2022 for its stockholders to consider approval of the transaction.

ServiceSource Acquisition

On July 20, 2022, the Company completed its acquisition of ServiceSource International, Inc.

(“ServiceSource”), a global outsourced go-to-market services provider, delivering B2B digital sales and customer success solutions.

The acquisition of ServiceSource is expected to complement Concentrix’ offerings in this area.

Purchase price consideration

The total purchase price consideration, net of cash acquired, was $ 142.8 million, which was primarily funded by cash on the Company’s balance sheet, as well as borrowings under the Company’s Securitization Facility.

The preliminary purchase price consideration to acquire ServiceSource consisted of the following:

Cash consideration for ServiceSource stock (1)

Cash consideration for ServiceSource vested and unvested equity awards (2)

Cash consideration for repayment of ServiceSource debt, including accrued interest (3)

Total consideration transferred 167,159

Cash acquired (4)

Total purchase price consideration $ 142,804

(1) Represents the cash consideration paid for the outstanding shares of ServiceSource’s common stock.

(2) Represents the cash consideration paid or to be paid for vested and unvested ServiceSource stock option awards, restricted stock units and performance stock units.

(3) Represents the cash consideration paid to retire ServiceSource’s outstanding third-party debt, including accrued interest.

(4) Represents the ServiceSource cash balance acquired at acquisition.

Preliminary purchase price allocation

The purchase price was allocated to the assets acquired and liabilities assumed based on management’s estimate of the respective fair values at the date of acquisition.

Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

The factors contributing to the recognition of goodwill were the assembled workforce, high-value service delivery capabilities and strategic benefits that are expected to be realized from the acquisition.

None of the goodwill is expected to be deductible for income tax purposes.

The following table summarizes the preliminary estimates of fair values of the assets acquired and liabilities assumed as of the acquisition date:

July 20, 2022

Assets acquired:

Cash and cash equivalents $ 24,355

Accounts receivable 40,097

Property and equipment 6,951

Operating lease right-of-use assets 29,487

Identifiable intangible assets 40,200

Goodwill 69,387

Other assets 20,120

Total assets acquired $ 230,597

Liabilities assumed:

Accounts payable and accrued liabilities 33,951

Operating lease liabilities 29,487

Total liabilities assumed 63,438

Total consideration transferred $ 167,159

As of August 31, 2022, the purchase price allocation is preliminary.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of identifiable intangible assets acquired, the fair value of certain tangible assets acquired and liabilities assumed, and deferred income taxes.

The preliminary purchase price allocation includes $ 40,200 of acquired identifiable intangible assets, all of which have finite lives.

The preliminary fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis of certain cash flow projections.

The intangible assets are being amortized over their estimated useful lives on either a straight-line basis or an accelerated method that reflects the economic benefit of the asset.

The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of ServiceSource.

The preliminary amounts allocated to intangible assets are as follows:

Gross Carrying Amount Weighted-Average Useful Life

Customer relationships $ 31,370 15 years

Technology 5,640 5 years

Trade name 3,190 3 years

Total $ 40,200

Acquisitions impact on results of operations

The results of the acquired operations have been included in the consolidated financial statements since the acquisition dates.

The following table provides the results of acquired operations included in the consolidated statement of operations from the acquisition dates through August 31, 2022:

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2022

Revenue $ 142,525 $ 349,684

Income before income taxes ( 1,413 ) 1,567

In connection with the acquisitions, the Company incurred $ 12,565 and $ 15,213 of acquisition-related and integration expenses for the three and nine months ended August 31, 2022, respectively.

These expenses primarily include legal and professional services, cash-settled awards, severance and retention payments to integrate the businesses.

These acquisition-related and integration expenses were recorded within selling, general and administrative expenses in the consolidated statement of operations.

In July 2021, the Company completed the sales of its insurance third-party administration operations and software platform, Concentrix Insurance Solutions (“CIS”), and another non-CX solutions business in separate transactions for total cash consideration of approximately $ 73,708 .

The divestitures generated a pre-tax gain of approximately $ 13,197 , net of related transaction costs.

The gain on divestitures and related transaction costs were included in selling, general and administrative expenses in the consolidated statements of operations.

NOTE 4— SHARE-BASED COMPENSATION:

6 unchanged sentences

The performance-based restricted stock units had a grant date weighted average fair value of $ 178.58 per share.

The Company recorded share-based compensation expense in the consolidated statements of operations for the three and six months ended May 31, 2022 and 2021 as follows:

Three Months Ended Six Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

The Company recorded share-based compensation expense in the consolidated statements of operations for the three and nine months ended August 31, 2022 and 2021 as follows:

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Total share-based compensation $ 9,862 $ 9,457 $ 37,678 $ 25,858

5 unchanged sentences

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:

May 31, 2022 November 30, 2021

August 31, 2022 November 30, 2021

Cash and cash equivalents $ 176,082 $ 182,038

1 unchanged sentence

Cash, cash equivalents and restricted cash $ 178,501 $ 183,010

Restricted cash balances relate primarily to restrictions placed on cash deposits by banks as collateral for the issuance of bank guarantees and the terms of government grants.

Restricted cash balances relate primarily to restrictions placed on cash deposits by banks as collateral for the issuance of bank guarantees and letters of credit for leases and the terms of government grants.

Accounts receivable, net:

Accounts receivable, net is comprised of the following as of May 31, 2022 and November 30, 2021:

May 31, 2022 November 30, 2021

Accounts receivable, net is comprised of the following as of August 31, 2022 and November 30, 2021:

August 31, 2022 November 30, 2021

Billed accounts receivable $ 784,473 $ 714,032

5 unchanged sentences

Presented below is a progression of the allowance for doubtful trade receivables:

Three Months Ended Six Months Ended

May 31, May 31,

2022 2021 2022 2021

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Balance at beginning of period $ 6,994 $ 5,513 $ 5,421 $ 8,963

3 unchanged sentences

Property and equipment, net:

The following tables summarize the carrying amounts and related accumulated depreciation for property and equipment as of May 31, 2022 and November 30, 2021:

May 31, 2022 November 30, 2021

The following tables summarize the carrying amounts and related accumulated depreciation for property and equipment as of August 31, 2022 and November 30, 2021:

August 31, 2022 November 30, 2021

Land $ 27,297 $ 27,677

8 unchanged sentences

$ 390,343 $ 407,144

Shown below are the countries where 10% or more of the Company’s property and equipment, net are located as of May 31, 2022 and November 30, 2021:

May 31, 2022 November 30, 2021

Shown below are the countries where 10% or more of the Company’s property and equipment, net are located as of August 31, 2022 and November 30, 2021:

August 31, 2022 November 30, 2021

Property and equipment, net:

4 unchanged sentences

Total $ 390,343 $ 407,144

The following table summarizes the changes in the Company’s goodwill for the six months ended May 31, 2022:

The following table summarizes the changes in the Company’s goodwill for the nine months ended August 31, 2022:

Balance as of November 30, 2021

Acquisition 1,126,111

Acquisitions 1,195,039

Foreign exchange translation ( 36,721 )

Balance as of May 31, 2022

Balance as of August 31, 2022

Intangible assets, net:

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of May 31, 2022 and November 30, 2021:

As of May 31, 2022 As of November 30, 2021

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of August 31, 2022 and November 30, 2021:

As of August 31, 2022 As of November 30, 2021

Gross amounts Accumulated amortization Net amounts Gross amounts Accumulated amortization Net amounts

6 unchanged sentences

Fiscal years ending November 30,

2022 (remaining six months) $ 82,532

2022 (remaining three months) $ 41,826

Thereafter 431,273

2 unchanged sentences

The components of accumulated other comprehensive income (loss) (“AOCI”), net of taxes, were as follows:

Three Months Ended May 31, 2022 and 2021

Three Months Ended August 31, 2022 and 2021

Unrecognized gains (losses) on

4 unchanged sentences

adjustments, net of taxes

Balance, February 28, 2021 $ ( 38,960 ) $ 12,998 $ 11,837 $ ( 14,125 )

Balance, May 31, 2021 $ ( 39,032 ) $ 23,312 $ 47,270 $ 31,550

Other comprehensive income (loss) before reclassification

2 unchanged sentences

— ( 4,091 ) — ( 4,091 )

Balances at May 31, 2021

Balances at August 31, 2021

$ ( 39,030 ) $ 8,002 $ ( 8,835 ) $ ( 39,863 )

Balance, February 28, 2022 $ ( 21,972 ) $ ( 4,836 ) $ ( 60,217 ) $ ( 87,025 )

Balance, May 31, 2022 $ ( 21,979 ) $ ( 14,642 ) $ ( 115,212 ) $ ( 151,833 )

Other comprehensive income (loss) before reclassification

2 unchanged sentences

— 9,752 — 9,752

Balances at May 31, 2022

Balances at August 31, 2022

$ ( 21,028 ) $ ( 35,189 ) $ ( 229,075 ) $ ( 285,292 )

Six Months Ended May 31, 2022 and 2021

Nine Months Ended August 31, 2022 and 2021

Unrecognized gains (losses) on

9 unchanged sentences

— ( 20,617 ) — ( 20,617 )

Balances at May 31, 2021

Balances at August 31, 2021

$ ( 39,030 ) $ 8,002 $ ( 8,835 ) $ ( 39,863 )

4 unchanged sentences

— 12,217 — 12,217

Balances at May 31, 2022

Balances at August 31, 2022

$ ( 21,028 ) $ ( 35,189 ) $ ( 229,075 ) $ ( 285,292 )

6 unchanged sentences

legal entities and certain existing assets and liabilities.

However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures.

However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the economic cost of hedging particular exposures.

There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates.

6 unchanged sentences

dollars may hedge a portion of forecasted revenue or costs not denominated in the entities’ functional currencies.

These instruments mature at various dates through May 2024.

These instruments mature at various dates through August 2024.

Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings.

9 unchanged sentences

The fair values of the Company’s derivative instruments are disclosed in Note 7 and summarized in the table below:

Balance Sheet Line Item May 31, 2022 November 30, 2021

Balance Sheet Line Item August 31, 2022 November 30, 2021

Derivative instruments not designated as hedging instruments:

9 unchanged sentences

Volume of activity

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Philippine peso, the Indian rupee, the euro, the British pound, the Canadian dollar and the Japanese yen, that will be bought or sold at maturity.

The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Philippine peso, the Indian rupee, the Canadian dollar, the Japanese yen and the Australian dollar, that will be bought or sold at maturity.

The notional amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss.

2 unchanged sentences

The following table shows the gains and losses, before taxes, of the Company’s derivative instruments designated as cash flow hedges and not designated as hedging instruments in other comprehensive income (“OCI”), and the consolidated statements of operations for the periods presented:

Three Months Ended Six Months Ended

Locations of gain (loss) in statement of operations May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Three Months Ended Nine Months Ended

Locations of gain (loss) in statement of operations August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Derivative instruments designated as cash flow hedges

1 unchanged sentence

Foreign exchange forward contracts $ ( 40,691 ) $ ( 15,059 ) $ ( 61,782 ) $ ( 666 )

Gains reclassified from AOCI into income:

(Losses) / Gains reclassified from AOCI into income:

Foreign exchange forward contracts

18 unchanged sentences

The following table summarizes the valuation of the Company’s investments and financial instruments that are measured at fair value on a recurring basis:

As of May 31, 2022 As of November 30, 2021

As of August 31, 2022 As of November 30, 2021

Fair value measurement category Fair value measurement category

9 unchanged sentences

Fair values of long-term foreign currency exchange contracts are measured using valuations based upon quoted prices for similar assets and liabilities in active markets and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of May 31, 2022 and November 30, 2021.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of August 31, 2022 and November 30, 2021.

The carrying values of term deposits with maturities less than one year, accounts receivable and accounts payable approximate fair value due to their short maturities and interest rates that are variable in nature.

The carrying values of the outstanding balance on the Term Loan under the Company’s Credit Facility and the outstanding balance on the Securitization Facility approximate their fair values since they bear interest rates that are similar to existing market rates.

During the three and six months ended May 31, 2022 and 2021, there were no transfers between the fair value measurement category levels.

During the three and nine months ended August 31, 2022 and 2021, there were no transfers between the fair value measurement category levels.

NOTE 8—BORROWINGS:

Borrowings consist of the following:

May 31, 2022 November 30, 2021

August 31, 2022 November 30, 2021

Credit Facility - current portion of Term Loan component $ 6,250 $ —

9 unchanged sentences

The proceeds from the Term Loan and additional borrowings under the Securitization Facility were used to repay the outstanding principal amount of the Prior Term Loan and to finance the acquisition of PK, including the repayment of certain indebtedness of PK and the payment of fees and expenses in connection with the acquisition of PK.

Borrowings under the Credit Facility bear interest, in the case of SOFR rate loans, at a per annum rate equal to the applicable SOFR rate (but not less than 0.0 %), plus an adjustment of between 0.10 % and 0.25 % depending on the interest period of each SOFR loan, plus an applicable margin, which ranges from 1.25 % to 2.00 %, based on Concentrix’ consolidated leverage ratio.

Borrowings under the Credit Facility that are not SOFR rate loans bear interest at a per annum rate equal to (i) the greatest of (a) the Federal Funds Rate in effect on such day plus ½ of 1.00%, (b) the rate of interest last publicly announced by Bank of America as its “prime rate” and (c) the term SOFR rate plus 1.00 %, plus (ii) an applicable margin, which ranges from 0.25 % to 1.00 %, based on Concentrix’ consolidated leverage ratio.

Borrowings under the Credit Facility bear interest, in the case of term or daily SOFR loans, at a per annum rate equal to the applicable SOFR rate (but not less than 0.0 %), plus an adjustment of between 0.10 % and 0.25 % depending on the interest period of each SOFR loan, plus an applicable margin, which ranges from 1.25 % to 2.00 %, based on Concentrix’ consolidated leverage ratio.

Borrowings under the Credit Facility that are base rate loans bear interest at a per annum rate equal to (i) the greatest of (a) the Federal Funds Rate in effect on such day plus ½ of 1.00%, (b) the rate of interest last publicly announced by Bank of America as its “prime rate” and (c) the term SOFR rate plus 1.00 %, plus (ii) an applicable margin, which ranges from 0.25 % to 1.00 %, based on Concentrix’ consolidated leverage ratio.

A commitment fee is payable on the unused portion of the Revolver that ranges from 22.5 to 30 basis points, based on Concentrix’ consolidated leverage ratio.

Beginning August 31, 2022, the outstanding principal of the Term Loan will be payable in quarterly installments of $ 26.25 million, with the unpaid balance due in full on the maturity date.

Beginning August 31, 2022, the outstanding principal of the Term Loan is payable in quarterly installments of $ 26,250 , with the unpaid balance due in full on the maturity date.

During the three months ended August 31, 2022, the Company paid $ 125,000 of the principal balance on the Term Loan, including $ 98,750 of voluntary prepayments, without penalty.

Concentrix may request, subject to obtaining commitments from any participating lenders and certain other conditions, incremental commitments to increase the amount of the Revolver or the Term Loan available under the Credit Facility in an aggregate principal amount of up to $ 450,000 , plus an additional amount, so long as after giving effect to the incurrence of such additional amount, the Company’s pro forma first lien leverage ratio (as defined in the Credit Facility) would not exceed 3.00 to 1.00.

5 unchanged sentences

The Credit Facility also contains various customary events of default, including payment defaults, defaults under certain other indebtedness, and a change of control of Concentrix.

Prior to being amended in December 2021, Concentrix initially entered into its senior secured credit facility on October 16, 2020, and it initially provided for the extension of revolving loans of up to $ 600,000 and term loan borrowings of up to $ 900,000 .

Prior to it being amended in December 2021, Concentrix initially entered into its senior secured credit facility on October 16, 2020, to provide for the extension of revolving loans of up to $ 600,000 and term loan borrowings of up to $ 900,000 .

On November 30, 2020, in connection with the spin-off, the Company incurred the full $ 900,000 of term loan borrowings under the Credit Facility.

2 unchanged sentences

During the fiscal year ended November 30, 2021, the Company paid $ 200,000 of the principal balance on the Prior Term Loan, including $ 166,250 of voluntary prepayments, without penalty.

At May 31, 2022 and November 30, 2021, no amounts were outstanding under the Revolver.

At August 31, 2022 and November 30, 2021, no amounts were outstanding under the Revolver.

Securitization Facility

On October 30, 2020, Concentrix entered into a $ 350,000 accounts receivable securitization facility (the “Securitization Facility”) pursuant to certain agreements, including a Receivables Financing Agreement and a Receivables Purchase Agreement.

On November 30, 2020, in connection with the spin-off, the Company incurred $ 250,000 of borrowings under the Securitization Facility.

Substantially all of the proceeds from such borrowings were transferred to TD SYNNEX on November 30, 2020 to eliminate debt owed by Concentrix to TD SYNNEX and in exchange for the contribution of certain Concentrix trademarks from TD SYNNEX to Concentrix.

On July 6, 2022, the Company entered into an amendment to its accounts receivable securitization facility (the “Securitization Facility”) to (i) increase the commitment of the lenders to provide available borrowings of up to $ 500,000 , (ii) extend the termination date of the Securitization Facility from October 28, 2022 to July 5, 2024, and (iii) replace LIBOR with SOFR as one of the reference rates used to calculate interest on borrowings under the Securitization Facility.

In addition, the interest rate margins were amended, such that borrowings under the Securitization Facility that are funded through the issuance of commercial paper bear interest at the applicable commercial paper rate plus a spread of 0.70 % and, otherwise, at a per annum rate equal to the applicable SOFR rate (which includes a SOFR related adjustment of 0.10 %), plus a spread of 0.80 %.

Under the Securitization Facility, Concentrix and certain of its subsidiaries (the “Originators”) sell or otherwise transfer all of their accounts receivable to a special purpose bankruptcy-remote subsidiary of Concentrix (the “Borrower”) that grants a security interest in the receivables to the lenders in exchange for available borrowings of up to $ 500,000 .

1 unchanged sentence

Borrowing availability under the Securitization Facility may be limited by the Company’s accounts receivable balances, changes in the credit ratings of the clients comprising the receivables, client concentration levels in the receivables, and certain characteristics of the accounts receivable being transferred (including factors tracking performance of the accounts receivable over time).

The Securitization Facility has a termination date of October 28, 2022.

Amounts drawn under the Securitization Facility are classified as long-term debt within the consolidated balance sheet based on the Company’s ability and intent to refinance on a long-term basis as of May 31, 2022 as evidenced through the amendment to the Securitization Facility described below.

Borrowings under the Securitization Facility bear interest with respect to loans that are funded through the issuance of commercial paper at the applicable commercial paper rate plus a spread of 1.05 % and, otherwise, at a per annum rate equal to the applicable LIBOR rate plus a spread of 1.15 %.

Concentrix is also obligated to pay a monthly undrawn fee that ranges from 30 to 37.5 basis points based on the portion of the Securitization Facility that is undrawn.

defaults, defaults under certain other indebtedness, a change in control of Concentrix, and certain events negatively affecting the overall credit quality of the transferred accounts receivable.

The Securitization Facility contains various affirmative and negative covenants, including a consolidated leverage ratio covenant that is consistent with the Credit Facility and customary events of default, including payment defaults, defaults under certain other indebtedness, a change in control of Concentrix, and certain events negatively affecting the overall credit quality of the transferred accounts receivable.

The Borrower’s sole business consists of the purchase or acceptance through capital contributions of the receivables and related security from the Originators and the subsequent retransfer of or granting of a security interest in such receivables and related security to the administrative agent under the Securitization Facility for the benefit of the lenders.

The Borrower is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of the Borrower’s assets prior to any assets or value in the Borrower becoming available to the Borrower’s equity holders, and the assets of the Borrower are not available to pay creditors of Concentrix and its subsidiaries.

On July 6, 2022, the Company entered into an amendment to the Securitization Facility to (i) increase the commitment of the lenders to provide available borrowings of up to $ 500,000 , (ii) extend the termination date of the Securitization Facility from October 28, 2022 to July 5, 2024, and (iii) replace LIBOR with SOFR as one of the reference rates used to calculate interest on borrowings under the Securitization Facility.

Prior to it being amended in July 2022, Concentrix initially entered into its accounts receivable securitization facility on October 30, 2020, to provide available borrowings of up to $ 350,000 pursuant to certain agreements, including a Receivables Financing Agreement and a Receivables Purchase Agreement.

On November 30, 2020, in connection with the spin-off, the Company incurred $ 250,000 of borrowings under the Securitization Facility.

Covenant compliance

As of May 31, 2022, Concentrix was in compliance with all covenants for the above arrangements.

As of August 31, 2022, Concentrix was in compliance with all covenants for the above arrangements.

NOTE 9— EARNINGS PER SHARE:

1 unchanged sentence

The Company’s restricted stock awards are considered participating securities because they are legally issued at the grant date and holders have a non-forfeitable right to receive dividends.

Three Months Ended Six Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Basic earnings per common share:

19 unchanged sentences

In the following table, the Company’s revenue is disaggregated by primary industry verticals:

Three Months Ended Six Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Industry vertical:

16 unchanged sentences

legal entities are covered by government mandated defined contribution plans.

During the three and six months ended May 31, 2022, the Company contributed $ 26,855 and $ 48,667 , respectively, to defined contribution plans.

During the three and six months ended May 31, 2021, the Company contributed $ 18,967 and $ 39,141 , respectively, to defined contribution plans.

During the three and nine months ended August 31, 2022, the Company contributed $ 20,211 and $ 62,726 , respectively, to defined contribution plans.

During the three and nine months ended August 31, 2021, the Company contributed $ 27,503 and $ 66,644 , respectively, to defined contribution plans.

Defined Benefit Plans

6 unchanged sentences

Benefits under these plans are primarily based on years of service and compensation during the years immediately preceding retirement or termination of participation in the plans.

Net benefit costs related to defined benefit plans were $ 2,353 and $ 5,628 , during the three and six months ended May 31, 2022, respectively.

Net benefit costs related to defined benefit plans were $ 3,372 and $ 6,683 , during the three and six months ended May 31, 2021, respectively.

On an aggregate basis, the plans were underfunded by $ 96,016 and $ 104,689 at May 31, 2022 and November 30, 2021, respectively.

Net benefit costs related to defined benefit plans were $ 2,350 and $ 7,978 , during the three and nine months ended August 31, 2022, respectively.

Net benefit costs related to defined benefit plans were $ 6,288 and $ 12,971 , during the three and nine months ended August 31, 2021, respectively.

On an aggregate basis, the plans were underfunded by $ 90,858 and $ 104,689 at August 31, 2022 and November 30, 2021, respectively.

NOTE 12— INCOME TAXES:

Income taxes consist of current and deferred tax expense resulting from income earned in domestic and international jurisdictions.

The effective tax rates for the three and six months ended May 31, 2022 and 2021 were impacted by the geographic mix of worldwide income and certain discrete items, which included an additional expense of $ 9,247 in the second quarter of 2021 related to the change in the Company’s indefinite reinvestment assertion for Concentrix Insurance Solutions due to the then-pending sale, which closed in the third quarter of 2021.

The liability for unrecognized tax benefits was $ 54,302 and $ 56,308 at May 31, 2022 and November 30, 2021, respectively, and is included in other long-term liabilities in the consolidated balance sheets.

As of May 31, 2022 and November 30, 2021, the total amount of unrecognized tax benefits that would affect income tax expense if recognized in the consolidated financial statements was $ 46,449 and $ 48,438 , respectively.

The effective tax rates for the three and nine months ended August 31, 2022 and 2021 were impacted by the geographic mix of worldwide income and certain discrete items, which included an expense related to the sale of CIS of $ 3,745 and $ 12,991 for the three and nine months ended August 31, 2021.

The liability for unrecognized tax benefits was $ 51,194 and $ 56,308 at August 31, 2022 and November 30, 2021, respectively, and is included in other long-term liabilities in the consolidated balance sheets.

As of August 31, 2022 and November 30, 2021, the total amount of unrecognized tax benefits that would affect income tax expense if recognized in the consolidated financial statements was $ 46,150 and $ 48,438 , respectively.

This amount includes net interest and penalties of $ 9,668 and $ 8,861 for the respective periods.

7 unchanged sentences

The following table presents the various components of operating lease costs:

Three Months Ended Six Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Three Months Ended Nine Months Ended

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

Operating lease cost $ 49,627 $ 50,340 $ 150,167 $ 152,903

3 unchanged sentences

Total operating lease cost $ 65,590 $ 63,951 $ 197,444 $ 193,284

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five fiscal years and thereafter as of May 31, 2022:

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five fiscal years and thereafter as of August 31, 2022:

Fiscal Years Ending November 30,

2022 (remaining six months)

2022 (remaining three months)

Thereafter 46,620

4 unchanged sentences

The following amounts were recorded in the consolidated balance sheets related to the Company’s operating leases:

May 31, 2022 November 30, 2021

August 31, 2022 November 30, 2021

Operating lease ROU assets Other assets, net $ 483,905 $ 489,171

3 unchanged sentences

Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:

Six Months Ended

May 31, 2022 May 31, 2021

Nine Months Ended

August 31, 2022 August 31, 2021

Cash paid for amounts included in the measurement of lease liabilities $ 147,579 $ 157,920

Non-cash ROU assets obtained in exchange for lease liabilities 150,492 116,085

The weighted-average remaining lease term and discount rate as of May 31, 2022 and November 30, 2021 were as follows:

May 31, 2022 November 30, 2021

The weighted-average remaining lease term and discount rate as of August 31, 2022 and November 30, 2021 were as follows:

August 31, 2022 November 30, 2021

Weighted-average remaining lease term (years) 3.80 3.81

14 unchanged sentences

The repurchase program has no termination date and may be suspended or discontinued at any time.

During the three and six months ended May 31, 2022, the Company repurchased 367 aggregate shares of its common stock for an aggregate purchase price of $ 57,850 .

During the three and nine months ended August 31, 2022, the Company repurchased 359 and 726 shares, respectively, of its common stock for an aggregate purchase price of $ 48,986 and $ 106,836 , respectively.

The share repurchases were made on the open market and the shares repurchased by the Company are held in treasury for general corporate purposes.

At May 31, 2022, approximately $ 417,055 remained available for share repurchases under the existing authorization from the Company’s board of directors.

During June 2022, the Company repurchased 92 aggregate shares of its common stock for an aggregate purchase price of $ 13,764 .

At August 31, 2022, approximately $ 368,068 remained available for share repurchases under the existing authorization from the Company’s board of directors.

During September 2022, the Company repurchased 106 shares of its common stock for an aggregate purchase price of $ 12,860 .

During fiscal years 2022 and 2021, the Company has paid the following dividends per share approved by the Company’s board of directors:

3 unchanged sentences

March 29, 2022 April 29, 2022 $ 0.25 May 10, 2022

On June 27, 2022, the Company announced a cash dividend of $ 0.25 per share to stockholders of record as of July 29, 2022, payable on August 9, 2022.

June 27, 2022 July 29, 2022 $ 0.25 August 9, 2022

On September 28, 2022, the Company announced a cash dividend of $ 0.275 per share to stockholders of record as of October 28, 2022, payable on November 8, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements