What changed in this filing

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Item 1. Financial Statements

2023-04-07 compared with 2022-10-07 · 174 added, 233 removed, 523 unchanged (44% of the section changed)

3 unchanged sentences

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Current assets:

23 unchanged sentences

Stockholders’ equity:

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

Preferred stock, $ 0.0001 par value, 10,000 shares authorized and no shares issued and outstanding as of February 28, 2023 and November 30, 2022, respectively

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

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

52,595 and 52,367 shares issued as of February 28, 2023 and November 30, 2022, respectively, and 51,195 and 51,096 shares outstanding as of February 28, 2023 and November 30, 2022, respectively

Additional paid-in capital 2,447,418 2,428,313

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

Treasury stock, 1,400 and 1,271 shares as of February 28, 2023 and November 30, 2022, respectively

( 208,996 ) ( 190,779 )

7 unchanged sentences

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

Three Months Ended Nine Months Ended

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

Three Months Ended

February 28, 2023 February 28, 2022

Revenue $ 1,636,404 $ 1,536,052

20 unchanged sentences

(currency in thousands)

Three Months Ended Nine Months Ended

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

Three Months Ended

February 28, 2023 February 28, 2022

Net income before non-controlling interest

1 unchanged sentence

Other comprehensive income (loss):

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 $ 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

Unrealized gains (losses) of defined benefit plans, net of taxes of $ 109 and $ 0 for the three months ended February 28, 2023 and 2022, respectively

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $( 2,549 ) and $ 947 for the three months ended February 28, 2023 and 2022, respectively

7,654 ( 2,760 )

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

Reclassification of net (gains) losses on cash flow hedges to net income, net of taxes of $( 1,934 ) and $ 232 for the three months ended February 28, 2023 and 2022, respectively

5,807 ( 673 )

1 unchanged sentence

13,461 ( 3,433 )

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

Foreign currency translation, net of taxes of $ 0 for the three months ended February 28, 2023 and 2022, respectively

17,243 ( 13,839 )

1 unchanged sentence

30,152 ( 16,499 )

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

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

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

Comprehensive income 118,022 94,040

Comprehensive income attributable to non-controlling interest — 266

Comprehensive income attributable to Concentrix Corporation $ 118,022 $ 93,774

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, 2022

Three Months Ended February 28, 2023 and 2022

Concentrix Corporation Stockholders’ Equity

Common stock Treasury stock

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

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

Repurchase of common stock for tax withholdings on equity awards — — — — 2 ( 186 ) — — ( 186 )

Repurchase of common stock — — — — 359 ( 48,986 ) — — ( 48,986 )

Dividends — — — — — — ( 12,964 ) — ( 12,964 )

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

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

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

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 266 — — — — — — — —

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

Share-based compensation activity — 70 — 17,911 — — — — 17,911

3 unchanged sentences

Net income — — — — — — 110,273 — 110,273

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.

CONCENTRIX CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(currency and share amounts in thousands)

Three and Nine Months Ended August 31, 2021

Concentrix Corporation Stockholders’ Equity

Common stock Treasury stock

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

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 )

Share-based compensation activity 152 — 11,083 — — — — — 11,083

Repurchase of common stock for tax withholdings on equity awards — — — 89 ( 13,437 ) — — — ( 13,437 )

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

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

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

Balances, November 30, 2022 $ — 52,367 $ 5 $ 2,428,313 1,271 $ ( 190,779 ) $ 774,114 $ ( 315,749 ) $ 2,695,904

Other comprehensive loss — — — — — — — ( 36,049 ) ( 36,049 )

Reclassification of net former parent investment in Concentrix — — 2,305,899 — — — ( 2,305,899 ) — —

Issuance of common stock at separation and spin-off 51,135 5 ( 5 ) — — — — — —

Other comprehensive income — — — — — — — 30,152 30,152

Share-based compensation activity — 228 — 19,105 — — — — 19,105

Repurchase of common stock for tax withholdings on equity awards — — — — 58 ( 8,216 ) — — ( 8,216 )

Repurchase of common stock — — — — 71 ( 10,001 ) — — ( 10,001 )

Dividends — — — — — — ( 14,313 ) — ( 14,313 )

Net income — — — — — — 87,870 — 87,870

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

Balances, February 28, 2023 $ — 52,595 $ 5 $ 2,447,418 1,400 $ ( 208,996 ) $ 847,671 $ ( 285,597 ) $ 2,800,501

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

2 unchanged sentences

(currency in thousands)

Nine Months Ended

August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Cash flows from operating activities:

7 unchanged sentences

Unrealized foreign exchange loss — 726

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

Pension and other post-retirement benefit costs 2,934 5,722

Pension and other post-retirement plan contributions ( 615 ) ( 931 )

Other 433 ( 98 )

Changes in operating assets and liabilities:

Accounts receivable, net 112 ( 30,188 )

Payable to former parent — ( 22,825 )

Accounts payable ( 9,672 ) ( 7,171 )

3 unchanged sentences

Purchases of property and equipment ( 39,597 ) ( 45,393 )

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

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

Acquisition of business, net of cash and restricted cash acquired — ( 1,564,430 )

Other investments — ( 1,000 )

7 unchanged sentences

Cash paid for debt issuance costs — ( 8,863 )

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

Proceeds from exercise of stock options 2,504 2,882

4 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 2,797 ( 1,395 )

Net decrease in cash, cash equivalents and restricted cash ( 4,509 ) ( 757 )

Net increase (decrease) in cash, cash equivalents and restricted cash 32,567 ( 39,850 )

Cash, cash equivalents and restricted cash at beginning of year 157,463 183,010

7 unchanged sentences

NOTE 1— BACKGROUND AND BASIS OF PRESENTATION:

Concentrix Corporation (“Concentrix,” the “CX business” or the “Company”) is a leading global provider of Customer Experience (“CX”) solutions and technology that help iconic and disruptive brands drive deep understanding, full lifecycle engagement, and differentiated experiences for their end-customers around the world.

Concentrix Corporation (“Concentrix” or the “Company”) is a leading global provider of Customer Experience (“CX”) solutions and technology that help iconic and disruptive brands drive deep understanding, full lifecycle engagement, and differentiated experiences for their end-customers around the world.

The Company provides end-to-end capabilities, including CX process optimization, technology innovation and design engineering, front- and back-office automation, analytics and business transformation services to clients in five primary industry verticals.

The Company’s primary verticals are technology and consumer electronics, communications and media, retail, travel and e-commerce, banking, financial services and insurance, and healthcare.

On December 1, 2020, the separation of the CX business (the “separation”) from SYNNEX Corporation, now known as TD SYNNEX Corporation (“TD SYNNEX” or the “former parent”), was completed through a tax-free distribution of all of the issued and outstanding shares of the Company’s common stock to TD SYNNEX stockholders (the “distribution” and, together with the separation, the “spin-off”).

TD SYNNEX stockholders received one share of the Company’s common stock for each share of TD SYNNEX common stock held as of the close of business on November 17, 2020.

As a result of the spin-off, the Company became an independent public company and the Company’s common stock commenced trading on the Nasdaq Stock Market (“Nasdaq”) under the symbol “CNXC” on December 1, 2020.

The Company’s primary verticals are technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and insurance, and healthcare.

Basis of presentation

5 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

Risks and uncertainties related to the COVID-19 pandemic

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and labor force participation, and created significant volatility and disruption of financial markets.

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 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

virus and the effects of mutations in its genetic code, country and state restrictions regarding virus containment, the availability and effectiveness of vaccines and treatment options, accessibility to the Company’s delivery and operations locations, its continued utilization of remote work environments in response to future health and safety restrictions, and the effect on the Company’s clients’ businesses and the demand for their products and services, all of which are uncertain and cannot be predicted.

The Company is unable to predict how long the pandemic conditions will persist in regions in which the Company operates, if or when countries or localities may experience an increase in COVID-19 cases, what additional measures may be introduced by governments or the Company’s clients in response to the pandemic generally or to an increase in COVID-19 cases in a particular country or locality, and the effect of any such additional measures on the Company’s business.

As a result, many of the estimates and assumptions used in preparation of these consolidated financial statements required increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve with respect to the pandemic and the global recovery from the pandemic, the Company’s estimates may materially change in future periods.

Reclassifications

Certain amounts in the consolidated financial statements related to the prior years have been reclassified to conform to the current year’s presentation.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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, 2022.

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

Recently adopted accounting pronouncements are discussed below.

Concentration of credit risk

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.

For the three months ended February 28, 2023, no client accounted for more than 10% of the Company’s consolidated revenue.

For the three months ended February 28, 2022, one client accounted for 10.3 % of the Company’s consolidated revenue.

As of February 28, 2023, no client comprised more than 10% of the Company’s total accounts receivable balance.

As of November 30, 2022, one client comprised 12.4 % of the Company’s total accounts receivable balance.

Recently adopted accounting pronouncements

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued new guidance that simplifies the accounting for income taxes.

The guidance is effective for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods.

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued new guidance that simplified the accounting for income taxes.

The guidance was effective for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods.

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

NOTE 3— ACQUISITIONS AND DIVESTITURES:

No other new accounting pronouncements recently adopted or issued had or are expected to have a material impact on the consolidated financial statements.

NOTE 3— ACQUISITIONS:

PK Acquisition

4 unchanged sentences

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

The total purchase price consideration, net of cash and restricted cash acquired, for the acquisition of PK was $ 1,573.3 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.

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

The purchase price consideration to acquire PK consisted of the following:

Cash consideration for PK stock (1)

5 unchanged sentences

Total consideration transferred 1,610,630

Cash acquired (6)

Cash and restricted cash acquired (6)

Total purchase price consideration $ 1,573,320

5 unchanged sentences

(5) Represents the issuance of vested Concentrix stock options that were issued in conversion of certain vested PK stock options that were assumed by Concentrix pursuant to the merger agreement.

(6) Represents the PK cash balance acquired at acquisition.

Preliminary purchase price allocation

(6) Represents the PK cash and restricted cash balance acquired at the acquisition.

Purchase price allocation

The acquisition was accounted for as a business combination in accordance with Accounting Standards Codification Topic 805, Business Combinations .

1 unchanged sentence

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, comprehensive service portfolio delivery capabilities and strategic benefits that are expected to be realized from the acquisition.

The factors contributing to the recognition of goodwill were the assembled workforce, comprehensive service portfolio 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, liabilities assumed and non-controlling interest as of the acquisition date:

The following table summarizes the final fair values of the assets acquired, liabilities assumed and non-controlling interest as of the acquisition date:

December 27, 2021

15 unchanged sentences

Total consideration transferred $ 1,610,630

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).

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 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 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.

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

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

The cash flow projections are based on forecasts used by the Company to price the PK acquisition, and the discount rates applied were benchmarked by referencing the implied rate of return of the Company’s pricing model and the weighted average cost of capital.

1 unchanged sentence

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 PK.

The preliminary amounts allocated to intangible assets are as follows:

The amounts allocated to intangible assets are as follows:

Gross Carrying Amount Weighted-Average Useful Life

5 unchanged sentences

Supplemental Pro Forma Information

The supplemental pro forma financial information presented below is for illustrative purposes only, does not include the pro forma adjustments that would be required under Regulation S-X for pro forma financial information, is not necessarily indicative of the financial position or results of operations that would have been realized if the PK acquisition had been completed on the date indicated, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position.

The pro forma adjustments are based upon currently available information and certain assumptions that we believe are reasonable under the circumstances.

The supplemental pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the PK acquisition had occurred on December 1, 2020 to give effect to certain events that the Company believes to be directly attributable to the PK acquisition.

is not necessarily indicative of the financial position or results of operations that would have been realized if the PK acquisition had been completed on December 1, 2020, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position.

The pro forma adjustments are based upon currently available information and certain assumptions that the Company believes are reasonable under the circumstances.

These pro forma adjustments primarily include:

• An increase in amortization expense that would have been recognized due to acquired identifiable intangible assets.

• An adjustment to interest expense to reflect the additional borrowings of Concentrix on the amended credit facility and the repayment of PK’s historical debt in conjunction with the acquisition.

• An adjustment to interest expense to reflect the additional borrowings of Concentrix under the Credit Facility and the repayment of PK’s historical debt in conjunction with the acquisition.

• The related income tax effects of the adjustments noted above.

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

Three Months Ended Nine Months Ended

August 31, August 31,

2022 2021 2022 2021

The supplemental pro forma financial information for the prior period first fiscal quarter is as follows:

Three Months Ended

February 28, 2022

Revenue $ 1,569,013

2 unchanged sentences

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.

(“ServiceSource”), a global outsourced go-to-market services provider, delivering business-to-business (“B2B”) digital sales and customer success solutions that complemented 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 total purchase price consideration, net of cash acquired, for the acquisition of ServiceSource was $ 141.5 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:

3 unchanged sentences

Total consideration transferred 167,159

Cash acquired (4)

Cash and restricted cash acquired (4)

Total purchase price consideration $ 141,507

2 unchanged sentences

(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.

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

Preliminary purchase price allocation

12 unchanged sentences

Goodwill 45,502

Net deferred tax assets 22,724

Other assets 20,238

5 unchanged sentences

Total consideration transferred $ 167,159

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

As of February 28, 2023, the purchase price allocation is preliminary.

1 unchanged sentence

Measurement period adjustments to the preliminary purchase price allocation during the three months ended February 28, 2023 were not material.

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

8 unchanged sentences

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.

Acquisition-related and integration expenses

In connection with the acquisitions of PK and ServiceSource, the Company incurred $ 5,543 and $ 922 of acquisition-related and integration expenses for the three months ended February 28, 2023 and 2022, respectively.

These expenses primarily include legal and professional services, cash-settled awards, severance and retention payments and costs associated with lease terminations 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:

In November 2020, in connection with the spin-off, TD SYNNEX, as sole stockholder of Concentrix, approved the Concentrix Corporation 2020 Stock Incentive Plan (the “Concentrix Stock Incentive Plan”) and the Concentrix Corporation 2020 Employee Stock Purchase Plan (the “Concentrix ESPP”), each to be effective upon completion of the spin-off.

4,000 shares of Concentrix common stock were reserved for issuance under the Concentrix Stock Incentive Plan, and 1,000 shares of Concentrix common stock were authorized for issuance under the Concentrix ESPP.

In December 2021, 523 additional shares of Concentrix common stock were reserved for issuance under the Concentrix Stock Incentive Plan resulting from an automatic annual increase pursuant to the terms of the plan.

In January 2022, the Company granted 137 restricted stock awards and restricted stock units and 129 performance-based restricted stock units under the Concentrix Stock Incentive Plan, which included annual awards to the Company’s senior executive team and retention and new hire awards to staff who joined the Company as part of the PK acquisition.

The restricted stock awards and restricted stock units awards had a weighted average grant date fair value of $ 181.09 per share and vest over a service period of four years .

The Company recognizes share-based compensation expense for all share-based awards made to employees and directors, including employee stock options, restricted stock awards, restricted stock units and performance-based restricted stock units based on estimated fair values.

In January 2023, the Company granted 53 restricted stock awards and restricted stock units and 52 performance-based restricted stock units under the Concentrix Stock Incentive Plan, which included annual awards to the Company’s senior executive team.

The restricted stock awards and restricted stock units had a weighted average grant date fair value of $ 138.79 per share and vest over a service period of four years .

The performance-based restricted stock units will vest, if at all, upon the achievement of certain annual financial targets during the three-year period ending November 30, 2025.

The performance-based restricted stock units had a grant date weighted average fair value of $ 136.19 per share.

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

The Company recorded share-based compensation expense in the consolidated statements of operations for the three months ended February 28, 2023 and 2022 as follows:

Three Months Ended

February 28, 2023 February 28, 2022

Total share-based compensation $ 16,754 $ 15,169

4 unchanged sentences

Cash, cash equivalents and restricted cash:

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:

August 31, 2022 November 30, 2021

The following table provides a reconciliation of cash, 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:

February 28, 2023 November 30, 2022

Cash and cash equivalents $ 178,386 $ 145,382

1 unchanged sentence

Cash, cash equivalents and restricted cash $ 190,030 $ 157,463

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.

Restricted cash balances relate primarily to funds held for clients, restrictions placed on cash deposits by banks as collateral for the issuance of bank guarantees and the terms of a government grant, and letters of credit for leases.

Accounts receivable, net:

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

August 31, 2022 November 30, 2021

Accounts receivable, net is comprised of the following as of February 28, 2023 and November 30, 2022:

February 28, 2023 November 30, 2022

Billed accounts receivable $ 813,828 $ 782,049

5 unchanged sentences

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

Three Months Ended Nine Months Ended

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

Three Months Ended

February 28, 2023 February 28, 2022

Balance at beginning of period $ 4,797 $ 5,421

3 unchanged sentences

Property and equipment, net:

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

The following table summarizes the carrying amounts and related accumulated depreciation for property and equipment as of February 28, 2023 and November 30, 2022:

February 28, 2023 November 30, 2022

Land $ 27,376 $ 27,336

8 unchanged sentences

$ 399,132 $ 403,829

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

Shown below are the countries where 10% or more of the Company’s property and equipment, net are located as of February 28, 2023 and November 30, 2022:

February 28, 2023 November 30, 2022

Property and equipment, net:

4 unchanged sentences

Total $ 399,132 $ 403,829

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

The following table summarizes the changes in the Company’s goodwill for the three months ended February 28, 2023 and 2022:

Three Months Ended

February 28, 2023 February 28, 2022

Balance at beginning of period $ 2,904,402 $ 1,813,502

Acquisitions — 1,132,017

Foreign exchange translation 676 ( 3,080 )

Balance as of August 31, 2022

Balance at end of period

$ 2,905,078 $ 2,942,439

Intangible assets, net:

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

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of February 28, 2023 and November 30, 2022:

As of February 28, 2023 As of November 30, 2022

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

6 unchanged sentences

Fiscal years ending November 30,

2022 (remaining three months) $ 41,826

2023 (remaining nine months) $ 117,883

Thereafter 346,108

2 unchanged sentences

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

Three Months Ended August 31, 2022 and 2021

Unrecognized gains (losses) on

defined benefit plan, net of taxes

Unrealized gains (losses) on

cash flow hedges, net of taxes

Foreign currency translation

adjustments, net of taxes

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

Other comprehensive income (loss) before reclassification

2 ( 11,219 ) ( 56,105 ) ( 67,322 )

Reclassification of gains from other comprehensive income (loss)

— ( 4,091 ) — ( 4,091 )

Balances at August 31, 2021

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

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

Other comprehensive income (loss) before reclassification

951 ( 30,299 ) ( 113,863 ) ( 143,211 )

Reclassification of gains from other comprehensive income (loss)

— 9,752 — 9,752

Balances at August 31, 2022

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

Nine Months Ended August 31, 2022 and 2021

Three Months Ended February 28, 2023 and 2022

Unrecognized gains (losses) on

9 unchanged sentences

— ( 673 ) — ( 673 )

Balances at August 31, 2021

Balances at February 28, 2022

$ ( 21,972 ) $ ( 4,836 ) $ ( 60,217 ) $ ( 87,025 )

4 unchanged sentences

— 5,807 — 5,807

Balances at August 31, 2022

Balances at February 28, 2023

$ ( 9,023 ) $ ( 6,453 ) $ ( 270,121 ) $ ( 285,597 )

Refer to Note 6 for the location of gains and losses on cash flow hedges reclassified from other comprehensive income (loss) to the consolidated statements of operations.

Reclassifications of amortization of actuarial (gains) losses of defined benefit plans is recorded in “Other expense (income), net” in the consolidated statement of operations.

Refer to Note 6—Derivative Instruments for the location of gains and losses on cash flow hedges reclassified from other comprehensive income (loss) to the consolidated statements of operations.

Reclassifications of

amortization of actuarial (gains) losses of defined benefit plans is recorded in “Other expense (income), net” in the consolidated statement of operations.

NOTE 6— DERIVATIVE INSTRUMENTS:

10 unchanged sentences

Cash Flow Hedges

To mitigate the risk of fluctuations in foreign currency exchange rates on gross margins, certain of the Company’s legal entities with functional currencies that are not U.S.

To protect gross margins from fluctuations in foreign currency exchange rates, certain of the Company’s legal entities with functional currencies that are not U.S.

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

These instruments mature at various dates through August 2024.

These instruments mature at various dates through February 2025.

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

Deferred gains and losses associated with cash flow hedges of foreign currency revenue are recognized as a component of “Revenue” in the same period as the related revenue is recognized, and deferred gains and losses related to cash flow hedges of foreign currency costs are recognized as a component of “Cost of revenue” or “Selling, general and administrative expenses” in the same period as the related costs are recognized.

Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time

Deferred gains and losses in AOCI associated with such derivative instruments are reclassified into earnings in the period of de-designation.

1 unchanged sentence

Non-Designated Derivatives

The Company uses short-term forward contracts to offset the foreign exchange risk of assets and liabilities denominated in currencies other than the functional currency of the Company’s legal entities that own the asset or liability.

The Company uses short-term forward contracts to offset the foreign exchange risk of assets and liabilities denominated in currencies other than the functional currencies of the Company’s legal entities that own the assets or liabilities.

These contracts, which are not designated as hedging instruments, mature or settle within twelve months.

1 unchanged sentence

Fair Values of Derivative Instruments in the Consolidated Balance Sheets

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

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

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

Balance Sheet Line Item February 28, 2023 November 30, 2022

Derivative instruments not designated as hedging instruments:

8 unchanged sentences

Other accrued liabilities and other long-term liabilities

19,332 32,935

Volume of activity

4 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 Nine Months Ended

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

Three Months Ended

Locations of gain (loss) in statement of operations February 28, 2023 February 28, 2022

Derivative instruments designated as cash flow hedges

(Loss) / Gain recognized in OCI:

Gains (losses) recognized in OCI:

Foreign exchange forward contracts $ 10,203 $ ( 3,707 )

5 unchanged sentences

Derivative instruments not designated as hedging instruments:

(Loss) / Gain recognized from foreign exchange forward contracts, net (1)

Gain (loss) recognized from foreign exchange forward contracts, net (1)

Other expense (income), net $ 6,225 $ ( 1,012 )

5 unchanged sentences

Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties.

Company manages the potential risk of credit losses through careful evaluation of counterparty credit standing and selection of counterparties from a limited group of financial institutions.

The Company manages the potential risk of credit losses through careful evaluation of counterparty credit standing and selection of counterparties from a limited group of financial institutions with high credit standing.

NOTE 7— FAIR VALUE MEASUREMENTS:

1 unchanged sentence

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

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 August 31, 2022 As of November 30, 2021

As of February 28, 2023 As of November 30, 2022

Fair value measurement category Fair value measurement category

7 unchanged sentences

Investment in foreign government bond classified as an available-for-sale debt security is recorded at fair value based on quoted market prices.

The fair values of forward exchange contracts are measured based on the foreign currency spot and forward rates quoted by banks or foreign currency dealers.

The fair values of forward exchange contracts are measured based on the foreign currency spot and forward rates.

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 August 31, 2022 and November 30, 2021.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of February 28, 2023 and November 30, 2022.

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

During the three months ended February 28, 2023 and 2022, there were no transfers between the fair value measurement category levels.

NOTE 8—BORROWINGS:

Borrowings consist of the following:

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Credit Facility - current portion of Term Loan component $ — $ —

1 unchanged sentence

Credit Facility - Term Loan component $ 1,850,000 $ 1,875,000

Credit Facility - Prior Term Loan component — 700,000

Securitization Facility 377,000 356,500

3 unchanged sentences

Credit Facility

On December 27, 2021, in connection with the closing of the acquisition of PK, Concentrix entered into an amendment of its senior secured credit facility (the “Credit Facility”) to (i) refinance the then-outstanding term loan (the “Prior Term Loan”) with a new term loan, which was fully advanced, in the aggregate outstanding principal amount of $ 2,100,000 (the “Term Loan”), (ii) increase the commitments under its revolving credit facility to $ 1,000,000 (the “Revolver”), (iii) extend the maturity of the Credit Facility from November 30, 2025 to December 27, 2026, (iv) replace LIBOR with SOFR (the Secured Overnight Financing Rate) as the primary reference rate used to calculate interest on the loans under the Credit Facility, and (v) modify the commitment fee on the unused portion of the Revolver and the margins in excess of the reference rates at which the loans under the Credit Facility bear interest.

On December 27, 2021, in connection with the closing of the acquisition of PK, Concentrix entered into the Credit Facility to (i) refinance the then-outstanding term loan (the “Prior Term Loan”) with the Term Loan, which was fully advanced, in the aggregate outstanding principal amount of $ 2,100,000 , (ii) increase the commitments under its revolving credit facility to $ 1,000,000 (the “Revolver”), (iii) extend the maturity of the Credit Facility from November 30, 2025 to December 27, 2026, (iv) replace LIBOR with SOFR (the Secured Overnight Financing Rate) as the primary reference rate used to calculate interest on the loans under the Credit Facility, and (v) modify the commitment fee on the unused portion of the Revolver and the margins in excess of the reference rates at which the loans under the Credit Facility bear interest.

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.

2 unchanged sentences

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 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.

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

During the three months ended February 28, 2023, the Company paid $ 25,000 of voluntary principal prepayments, without penalty, on the Term Loan.

Based on the Company’s required and voluntary principal prepayments made to date, the next quarterly installment of $ 26,250 is due in November of 2024.

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.

Obligations under the Credit Facility are secured by substantially all of the assets of Concentrix and certain of its U.S.

Obligations under the Credit Facility are secured by substantially all of the assets of Concentrix Corporation and certain of its U.S.

subsidiaries and are guaranteed by certain of its U.S.

subsidiaries.

The Credit Facility contains various loan covenants that restrict the ability of Concentrix and its subsidiaries to take certain actions, including, incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, repurchase or redemption of capital stock, making certain investments, entering into certain transactions with affiliates or changing the nature of their business.

The Credit Facility contains various loan covenants that restrict the ability of Concentrix Corporation and its subsidiaries to take certain actions, including incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, repurchase or redemption of capital stock, making certain investments, entering into certain transactions with affiliates or changing the nature of their business.

In addition, the Credit Facility contains financial covenants that require Concentrix to maintain at the end of each fiscal quarter, (i) a consolidated leverage ratio (as defined in the Credit Facility) not to exceed 3.75 to 1.0 and (ii) a consolidated interest coverage ratio (as defined in the Credit Facility) equal to or greater than 3.00 to 1.0.

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 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.

Substantially all of the proceeds from such borrowings, net of debt issuance costs, 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.

Beginning May 31, 2021, the outstanding principal of the Prior Term Loan was payable in quarterly installments of $ 11,250 , with the unpaid balance due in full on the maturity date.

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

At February 28, 2023 and November 30, 2022, no amounts were outstanding under the Revolver.

Securitization Facility

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.

On July 6, 2022, the Company entered into an amendment to the Securitization Facility, which was initially entered into on October 30, 2020, to (i) increase the commitment of the lenders to provide available borrowings from up to $ 350,000 to 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 %.

5 unchanged sentences

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.

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.

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.

Covenant compliance

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

As of February 28, 2023 and November 30, 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 Nine Months Ended

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

Three Months Ended

February 28, 2023 February 28, 2022

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 Nine Months Ended

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

Three Months Ended

February 28, 2023 February 28, 2022

Industry vertical:

16 unchanged sentences

legal entities are covered by government mandated 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.

During the three months ended February 28, 2023 and 2022, the Company contributed $ 22,654 and $ 21,812 , respectively, to defined contribution plans.

Defined Benefit Plans

1 unchanged sentence

legal entities.

For eligible employees in the U.S., the Company maintains a frozen defined benefit pension plan (“the cash balance plan”), which includes both a qualified and non-qualified portion.

For eligible employees in the United States, the Company maintains a frozen defined benefit pension plan (“the cash balance plan”), which includes both a qualified and non-qualified portion.

The pension benefit formula for the cash balance plan is determined by a combination of compensation, age-based credits and annual guaranteed interest credits.

2 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 $ 2,350 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.

Net benefit costs related to defined benefit plans were $ 2,934 and $ 5,722 , during the three months ended February 28, 2023 and 2022, respectively.

On an aggregate basis, the plans were underfunded by $ 72,288 and $ 71,815 at February 28, 2023 and November 30, 2022, 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 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.

The effective tax rates for the three months ended February 28, 2023 and 2022 were impacted by the geographic mix of worldwide income and certain discrete items.

The liability for unrecognized tax benefits was $ 79,983 and $ 78,501 at February 28, 2023 and November 30, 2022, respectively, and is included in other long-term liabilities in the consolidated balance sheets.

As of February 28, 2023 and November 30, 2022, the total amount of unrecognized tax benefits that would affect income tax expense if recognized in the consolidated financial statements was $ 42,631 and $ 40,793 , respectively.

This amount includes net interest and penalties of $ 8,163 and $ 7,538 for the respective periods.

The net interest and penalties balance for November 30, 2021 includes an immaterial prior period disclosure adjustment to properly present the amount.

This disclosure adjustment resulted in no impact to the Company’s consolidated balance sheets or consolidated statement of operations for any period presented.

The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits could decrease between approximately $ 37,341 and $ 40,198 in the next twelve months;

4 unchanged sentences

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

Three Months Ended Nine Months Ended

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

Three Months Ended

February 28, 2023 February 28, 2022

Operating lease cost $ 51,760 $ 50,802

3 unchanged sentences

Total operating lease cost $ 67,447 $ 66,388

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:

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 February 28, 2023:

Fiscal Years Ending November 30,

2022 (remaining three months)

2023 (remaining nine months)

Thereafter 28,691

4 unchanged sentences

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Operating lease ROU assets Other assets, net $ 475,471 $ 473,039

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:

Nine Months Ended

August 31, 2022 August 31, 2021

Three Months Ended

February 28, 2023 February 28, 2022

Cash paid for amounts included in the measurement of lease liabilities $ 53,825 $ 50,044

Non-cash ROU assets obtained in exchange for lease liabilities 41,394 37,492

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

The weighted-average remaining lease term and discount rate as of February 28, 2023 and November 30, 2022 were as follows:

February 28, 2023 November 30, 2022

Weighted-average remaining lease term (years) 3.63 3.72

14 unchanged sentences

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

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.

During the three months ended February 28, 2023, the Company repurchased 71 shares of its common stock for an aggregate purchase price of $ 10,001 .

During the three months ended February 28, 2022, the Company did not repurchase any shares under the program.

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 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 .

At February 28, 2023, approximately $ 344,083 remained available for share repurchases under the existing authorization from the Company’s board of directors.

During March 2023, the Company repurchased 39 shares of its common stock for an aggregate purchase price of $ 4,940 .

During fiscal years 2023 and 2022, the Company has paid the following dividends per share approved by the Company’s board of directors:

Announcement Date Record Date Per Share Dividend Amount Payment Date

September 27, 2021 October 22, 2021 $ 0.25 November 2, 2021

January 18, 2022 January 28, 2022 $ 0.25 February 8, 2022

1 unchanged sentence

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.

September 28, 2022 October 28, 2022 $ 0.275 November 8, 2022

January 19, 2023 January 30, 2023 $ 0.275 February 10, 2023

On March 29, 2023, the Company announced a cash dividend of $ 0.275 per share to stockholders of record as of April 28, 2023, payable on May 9, 2023.

NOTE 16—SUBSEQUENT EVENTS

Pending Combination with Webhelp

In March 2023, Concentrix entered into a binding put option agreement with certain shareholders of Marnix Lux SA (“Webhelp Parent”), the parent company of the Webhelp business.

Webhelp is a leading provider of CX solutions, including sales, marketing, and payment services, with significant operations and client relationships in Europe, Latin America, and Africa.

Following completion of required works council consultation processes, the parties are expected to enter into a definitive purchase agreement.

Under the terms of the agreement and subject to completion of the required works council consultations and the satisfaction of closing conditions, Concentrix will acquire 100% of the shares of Webhelp Parent in a transaction valued at approximately $ 4.8 billion, including the assumption of approximately € 1.55 billion of net debt.

At the closing of the transaction, shareholders of Webhelp Parent will receive (i) approximately 14.9 million shares of Concentrix common stock, (ii) € 500 million in cash, (iii) a € 700 million note payable in two years , bearing interest at 2 % per annum, and (iv) the right to earn an additional 0.75 million shares of Concentrix common stock if the share price of Concentrix common stock reaches $ 170.00 per share within seven years from the closing of the transaction (based on daily volume weighted average prices measured over a specified period).

Upon the closing of the transaction, Concentrix shareholders will own approximately 78 % of the combined company with Webhelp Parent shareholders owning approximately 22 %.

The transaction is expected to close by the end of the year, subject to completion of the required works council consultations and the satisfaction of customary closing conditions, including approval by Concentrix shareholders and regulatory approvals.

Debt Commitment Letter

In connection with the pending combination, the Company entered into a debt commitment letter (the “Commitment Letter”), dated as of March 29, 2023, with JPMorgan Chase Bank, N.A.

(“JPMorgan”), pursuant to which JPMorgan has committed to provide a 364-day bridge loan facility in an aggregate principal amount of $ 5.29 billion (the “Bridge Facility”), consisting of three tranches:

(i) a $ 2.44 billion tranche of term bridge loans, (ii) a $ 1.85 billion tranche of term bridge loans and (iii) a $ 1.0 billion tranche of revolving commitments (the “Amendment Revolving Tranche”), each subject to the satisfaction of certain customary closing conditions including the consummation of the combination with Webhelp.

The Bridge Facility is available to (i) pay for a portion of the cash purchase price, (ii) directly or indirectly repay certain indebtedness of Webhelp Parent and its subsidiaries and certain indebtedness of the Company and its subsidiaries, and (iii) to pay fees, costs and expenses related to the transaction, the Bridge Facility and transactions being entered into or otherwise contemplated in

connection therewith.

Additionally, the Amendment Revolving Tranche will be available after the consummation of the combination for working capital and other general corporate purposes.

If the Company utilizes the Bridge Facility, amounts drawn thereunder will bear interest at an annual rate equal to adjusted term SOFR plus a margin which may initially range from 1.125 % to 2.000 %, depending on the Company’s debt rating or leverage ratio, as applicable, as determined in accordance with the Commitment Letter, which margin will be increased by 0.25 % on each of the 90th, 180th and 270th day after the closing of the Bridge Facility.

The Company will pay commitment fees on the undrawn amount of this commitment ranging from 0.125 % to 0.275 % if based upon the Company’s debt rating, or 0.225 % to 0.300 % if based upon the Company’s leverage ratio, as applicable, determined in accordance with the Commitment Letter.

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