What changed in this filing

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Item 1. Financial Statements

2024-04-05 compared with 2023-10-06 · 233 added, 337 removed, 465 unchanged (55% of the section changed)

3 unchanged sentences

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

August 31, 2023 November 30, 2022

February 29, 2024 November 30, 2023

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, 2023 and November 30, 2022, respectively

Preferred stock, $ 0.0001 par value, 10,000 shares authorized and no shares issued and outstanding as of February 29, 2024 and November 30, 2023, respectively

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

52,685 and 52,367 shares issued as of August 31, 2023 and November 30, 2022, respectively, and 50,915 and 51,096 shares outstanding as of August 31, 2023 and November 30, 2022, respectively

67,981 and 67,883 shares issued as of February 29, 2024 and November 30, 2023, respectively, and 65,572 and 65,734 shares outstanding as of February 29, 2024 and November 30, 2023, respectively

Additional paid-in capital 3,605,694 3,582,521

Treasury stock, 1,770 and 1,271 shares as of August 31, 2023 and November 30, 2022, respectively

Treasury stock, 2,409 and 2,149 shares as of February 29, 2024 and November 30, 2023, respectively

( 295,732 ) ( 271,968 )

7 unchanged sentences

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

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Revenue $ 2,402,748 $ 1,636,404

7 unchanged sentences

Provision for income taxes 20,722 30,473

Net income before non-controlling interest 77,635 107,124 244,355 330,696

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

Net income attributable to Concentrix Corporation $ 77,635 $ 106,690 $ 244,355 $ 330,105

Net income $ 52,102 $ 87,870

Earnings per common share:

8 unchanged sentences

(currency in thousands)

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Net income before non-controlling interest

1 unchanged sentence

Other comprehensive income (loss):

Unrealized gains (losses) of defined benefit plans, net of taxes of $( 539 ) and $( 719 ) for the three and nine months ended August 31, 2023, respectively, and $( 51 ) for the three and nine months ended August 31, 2022, respectively

Unrealized gains (losses) of defined benefit plans, net of taxes of $( 135 ) and $ 109 for the three months ended February 29, 2024 and February 28, 2023, respectively

1,304 ( 552 )

Unrealized gains (losses) on cash flow hedges during the period, net of taxes of $( 422 ) and $( 1,219 ) for the three and nine months ended August 31, 2023, respectively, and $ 10,392 and $ 15,779 for the three and nine months ended August 31, 2022, respectively

Unrealized gains (losses) on hedges during the period, net of taxes of $ 1,328 and $( 2,549 ) for the three months ended February 29, 2024 and February 28, 2023, respectively

( 4,020 ) 7,654

Reclassification of net losses on cash flow hedges to net income, net of taxes of $( 821 ) and $( 3,769 ) for the three and nine months ended August 31, 2023, respectively, and $( 3,344 ) and $( 4,190 ) for the three and nine months ended August 31, 2022, respectively

Reclassification of net (gains) losses on hedges to net income, net of taxes of $ 150 and $( 1,934 ) for the three months ended February 29, 2024 and February 28, 2023, respectively

( 427 ) 5,807

Total change in unrealized gains (losses) on cash flow hedges, net of taxes

Total change in unrealized gains (losses) on hedges, net of taxes

( 4,447 ) 13,461

Foreign currency translation, net of taxes of $ 0 for the three and nine months ended August 31, 2023 and 2022, respectively

Foreign currency translation, net of taxes of $ 0 for the three months ended February 29, 2024 and February 28, 2023, respectively

( 69,412 ) 17,243

3 unchanged sentences

$ ( 20,453 ) $ 118,022

Comprehensive income attributable to non-controlling interest

Comprehensive income (loss) attributable to Concentrix Corporation

$ 78,483 $ ( 26,769 ) $ 257,943 $ 115,339

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, 2023

Three Months Ended February 29, 2024 and February 28, 2023

Common stock Treasury stock

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

Balances, May 31, 2023 52,619 $ 5 $ 2,459,234 1,441 $ ( 214,172 ) $ 912,204 $ ( 303,009 ) $ 2,854,262

Other comprehensive income — — — — — — 848 848

Share-based compensation activity 66 — 12,705 — — — — 12,705

Repurchase of common stock for tax withholdings on equity awards — — — 9 ( 680 ) — — ( 680 )

Repurchase of common stock — — — 320 ( 27,000 ) — — ( 27,000 )

Dividends — — — — — ( 14,248 ) — ( 14,248 )

Net income — — — — — 77,635 — 77,635

Balances, August 31, 2023 52,685 $ 5 $ 2,471,939 1,770 $ ( 241,852 ) $ 975,591 $ ( 302,161 ) $ 2,903,522

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

5 unchanged sentences

Net income — — — — — 87,870 — 87,870

Balances, August 31, 2023 52,685 $ 5 $ 2,471,939 1,770 $ ( 241,852 ) $ 975,591 $ ( 302,161 ) $ 2,903,522

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, 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 ( 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

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

Balances, November 30, 2023 67,883 $ 7 $ 3,582,521 2,149 $ ( 271,968 ) $ 1,024,461 $ ( 191,727 ) $ 4,143,294

Other comprehensive loss — — — — — — ( 72,555 ) ( 72,555 )

Equity awards issued as acquisition purchase consideration — — — 15,725 — — — — 15,725

Acquisition of non-controlling interest in subsidiary 2,000 — — — — — — — —

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

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

Share-based compensation activity 98 — 23,173 — — — — 23,173

3 unchanged sentences

Net income — — — — — 52,102 — 52,102

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

Balances, February 29, 2024 67,981 $ 7 $ 3,605,694 2,409 $ ( 295,732 ) $ 1,055,950 $ ( 264,282 ) $ 4,101,637

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

2 unchanged sentences

(currency in thousands)

Nine Months Ended

August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Cash flows from operating activities:

Net income before non-controlling interest $ 52,102 $ 87,870

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation 67,758 38,175

3 unchanged sentences

Deferred income taxes ( 22,131 ) ( 7,393 )

Unrealized foreign exchange loss — 914

Unrealized loss on call options 14,493 —

Amortization of debt issuance costs 5,625 419

Pension and other post-retirement benefit costs 3,579 2,934

Pension and other post-retirement plan contributions ( 859 ) ( 615 )

Change in acquisition contingent consideration ( 14,897 ) —

Other ( 96 ) 433

3 unchanged sentences

Other operating assets and liabilities ( 194,229 ) ( 65,953 )

Net cash provided by operating activities 448,744 365,041

Net cash provided by (used in) operating activities ( 46,870 ) 103,893

Cash flows from investing activities:

1 unchanged sentence

Acquisition of business, net of cash and restricted cash acquired ( 4,503 ) —

Other investments — ( 1,000 )

Net cash used in investing activities ( 60,562 ) ( 39,597 )

Cash flows from financing activities:

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

Repayments of the Prior Credit Facility - Term Loan ( 25,000 ) ( 125,000 )

Repayments of the original credit facility - original term loan — ( 700,000 )

Proceeds from the Amended Credit Facility - Term Loan — —

Repayments of the Amended Credit Facility - Term Loan ( 100,000 ) ( 25,000 )

Proceeds from the Securitization Facility 628,000 417,500

Repayments of the Securitization Facility ( 430,500 ) ( 397,000 )

Proceeds from issuance of Senior Notes 2,136,987 —

Cash paid for debt issuance costs ( 30,519 ) ( 9,331 )

Purchase of non-controlling interest — ( 2,500 )

Other debt proceeds 400 —

Other debt repayments ( 2,792 ) —

Proceeds from exercise of stock options 1,607 2,504

2 unchanged sentences

Dividends paid ( 20,613 ) ( 14,313 )

Net cash provided by financing activities 1,636,260 1,455,982

Change in funds held for clients ( 37,894 ) —

Net cash provided by (used in) financing activities 14,444 ( 34,526 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 5,544 ) 2,797

9 unchanged sentences

NOTE 1— BACKGROUND AND BASIS OF PRESENTATION:

Concentrix Corporation, which operates under the trade name Concentrix + Webhelp (“Concentrix + Webhelp” 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,” 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.

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.

13 unchanged sentences

Concentration of credit risk

For the three and nine months ended August 31, 2023 and 2022, no client accounted for more than 10% of the Company’s consolidated revenue.

As of August 31, 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.

For the three months ended February 29, 2024 and February 28, 2023, no client accounted for more than 10% of the Company’s consolidated revenue.

As of February 29, 2024 and November 30, 2023, no client comprised more than 10% 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 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.

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued accounting standards update (“ASU”) 2023-07, which enhances the disclosures required for reportable segments in annual and interim consolidated financial statements.

ASU 2023-07 is effective for the Company for annual reporting periods beginning with the fiscal year ending November 30, 2025 and for interim reporting periods beginning in fiscal year 2026.

Early adoption is permitted.

The Company is currently evaluating the impact that this update will have on its disclosures in the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid.

The amendments in ASU 2023-09 are effective for the fiscal year ending November 30, 2026.

The Company is currently evaluating the impact that this update will have on its disclosures in the consolidated financial statements.

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

On December 27, 2021, the Company completed its acquisition of PK, a leading CX design engineering company with more than 5,000 staff in four countries.

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 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 and restricted cash acquired, for the acquisition of PK was $ 1,573.3 million, which was funded by proceeds from the Company’s term loan under its prior senior secured credit facility (the “Prior Credit Facility”) and additional borrowings under its accounts receivable securitization facility (the “Securitization Facility”).

See Note 8 — Borrowings for a further discussion of the Company’s term loan, senior credit facility and the Securitization Facility.

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

Cash consideration for PK stock (1)

Cash consideration for PK vested equity awards (2)

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

Cash consideration for transaction expenses of PK (4)

Webhelp Combination

On September 25, 2023, the Company completed its acquisition (the “Webhelp Combination”) of all of the issued and outstanding capital stock (the “Shares”) of Marnix Lux SA, a public limited liability company ( société anonyme ) incorporated under the laws of the Grand Duchy of Luxembourg (“Webhelp Parent”) and the parent company of the Webhelp business (“Webhelp”), from the holders thereof (the “Sellers”).

The Webhelp Combination was completed pursuant to the terms and conditions of the Share Purchase and Contribution Agreement, dated as of June 12, 2023, as amended by the First Amendment to the Share Purchase and Contribution Agreement, dated as of July 14, 2023 (the “SPA”), by and among Concentrix, OSYRIS S.à r.l., a private limited liability company ( société à responsabilité limitée ) incorporated under the laws of the Grand Duchy of Luxembourg and a direct wholly owned subsidiary of Concentrix Corporation (“Purchaser”), Webhelp Parent, the Sellers, and certain representatives of the Sellers.

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.

Since the closing of the Webhelp Combination, the Company has operated under the trade name “Concentrix + Webhelp” while it transitions Webhelp operations and branding to the Concentrix name.

Preliminary purchase price consideration

The total preliminary purchase price consideration, net of cash and restricted cash acquired, for the acquisition of Webhelp was $ 3,774.8 million, which was funded by proceeds from the Company’s August 2023 offering and sale of senior notes, term loan borrowings under the Company’s senior credit facility, the issuance of shares of the Company’s common stock, and cash on hand.

See Note 8 — Borrowings for a further discussion of the Company’s senior notes, term loan, and senior credit facility.

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

Cash consideration for Shares (1)

Cash consideration for repayment of Webhelp debt and shareholder loan (2)

Total cash consideration 2,444,357

Non-cash equity consideration for conversion of PK equity awards (5)

Equity consideration (3)

Earnout shares contingent consideration (4)

Sellers’ note consideration (5)

Total consideration transferred 4,274,000

1 unchanged sentence

Total purchase price consideration $ 3,774,789

(1) Represents the cash consideration paid for the outstanding shares of PK 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 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.

(4) Represents the cash consideration paid for expenses incurred by PK in connection with the merger and paid by Concentrix pursuant to the merger agreement.

These expenses primarily related to third-party consulting services.

(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 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 .

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

(1) Represents the cash consideration paid, and to be paid, in the aggregate amount of € 500,000 , as adjusted in accordance with the SPA.

(2) Represents the cash consideration paid to repay Webhelp’s outstanding senior loan debt and shareholder loan.

(3) Represents the issuance of 14,862 shares of common stock, par value $ 0.0001 per share, of Concentrix Corporation (the “Concentrix common stock”).

(4) Represents the contingent right for the Sellers to earn an additional 750 shares of Concentrix common stock (the “Earnout Shares”).

The estimated fair value of this contingent consideration was determined using a Monte-Carlo simulation model.

The inputs include the closing price of Concentrix common stock as of the Closing Date, Concentrix-specific historical equity volatility, and the risk-free rate.

See further details below.

(5) Represents a promissory note issued by Concentrix Corporation in the aggregate principal amount of € 700,000 to certain Sellers.

See Note 8 — Borrowings for a further discussion of this promissory note.

(6) Represents the Webhelp cash and restricted cash balance acquired at the Closing Date.

The Company granted Sellers the contingent right to earn the Earnout Shares if certain conditions set forth in the SPA occur, including the share price of Concentrix common stock reaching $ 170.00 per share within seven years from the closing of the Webhelp Combination (the “Closing Date”) (based on daily volume weighted average prices measured over a specified period).

Prior to the Closing Date, Concentrix and certain Sellers entered into stock restriction agreements (the “Stock Restriction Agreements”), pursuant to which such Sellers (the “Restricted Stock Participants”) agreed to contribute in kind to the Company, and the Company agreed to receive, certain of the Restricted Stock Participants’ Shares in exchange for the issuance of shares of Concentrix common stock with certain restrictions thereon (the “Restricted Shares”) in lieu of such Sellers’ right to a portion of the Earnout Shares.

On the Closing Date, the Company issued approximately 80 Restricted Shares in exchange for certain of the Restricted Stock Participants’ Shares.

The Restricted Shares are non-transferable and non-assignable and are not entitled to any dividends or distributions unless and until the restrictions lapse, as set forth in the Stock Restriction Agreements.

The Restricted Shares will be automatically cancelled by the Company for no consideration in the event that the restrictions on the Restricted Shares do not lapse.

The Restricted Stock Participants have waived any and all rights as a holder of Restricted Shares to vote on any matter submitted to the holders of Concentrix common stock.

Preliminary purchase price allocation

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

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

None of the goodwill is deductible for income tax purposes.

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

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

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

September 25, 2023

Assets acquired:

1 unchanged sentence

Accounts receivable 455,218

Other current assets (1)

Property and equipment 323,606

Operating lease right-of-use assets 12,288

Identifiable intangible assets 1,984,000

Goodwill 2,098,531

Deferred tax assets 22,541

Other assets 410,085

Total assets acquired 1,754,428

Liabilities assumed and non-controlling interest:

Accounts payable and accrued liabilities 78,092

Operating lease liabilities 12,288

Liabilities assumed:

Accounts payable 67,558

Accrued compensation and benefits 246,450

Other accrued liabilities 576,549

Income taxes payable 72,227

Debt (current portion and long-term) 8,589

Deferred tax liabilities 411,788

Non-controlling interest 2,000

Total liabilities assumed and non-controlling interest 143,798

Other long-term liabilities 401,598

Total liabilities assumed

Total consideration transferred $ 4,274,000

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

(1) Includes restricted cash acquired of $ 188,899 .

As of February 29, 2024, 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.

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.

As a result of further refining its estimates and assumptions since the date of the acquisition, the Company recorded measurement period adjustments to the initial purchase price allocation.

Adjustments were primarily made to cash, goodwill, accrued compensation and benefits, accrued liabilities and deferred income taxes.

These measurement period adjustments to the preliminary purchase price allocation during the three months ended February 29, 2024 were not material.

The preliminary purchase price allocation includes $ 1,984,000 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.

The cash flow projections are based on forecasts used by the Company to price the Webhelp Combination, 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.

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 PK.

The amounts allocated to intangible assets are as follows:

The preliminary amounts allocated to intangible assets are as follows:

Gross Carrying Amount Weighted-Average Useful Life Amortization Method

Customer relationships $ 1,882,000 15 years Accelerated

Technology 63,500 5 years Straight-line

Trade name 102,000 3 years Straight-line

Non-compete agreements 2,200 3 years Straight-line

Total $ 1,984,000

Supplemental Pro Forma 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 December 1, 2020, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position.

Supplemental Pro Forma Information (unaudited)

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 combination with Webhelp had been completed on December 1, 2022, 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.

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 acquisition.

The supplemental pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the combination with Webhelp had occurred on December 1, 2022 to give effect to certain events that the Company believes to be directly attributable to the acquisition.

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 under the Prior Credit Facility and the repayment of PK’s historical debt in conjunction with the acquisition.

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

• An increase in depreciation expense associated with the step up of fair values of property and equipment assets acquired.

• A net increase to interest expense to reflect the additional borrowings of Concentrix incurred in connection with the combination as previously described and the repayment of Webhelp’s historical debt in conjunction with the combination.

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

The supplemental pro forma financial information for the prior period nine months ended August 31, 2022 is as follows:

Nine Months Ended

August 31, 2022

The supplemental pro forma financial information for the prior period first fiscal quarter ended February 28, 2023 is as follows:

Three Months Ended

February 28, 2023

Revenue $ 2,362,015

Net income 17,482

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 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, 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 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 and restricted cash acquired (4)

Total purchase price consideration $ 141,507

(1) Represents the cash consideration paid for the outstanding shares of ServiceSource 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 and restricted cash balance acquired at the acquisition.

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.

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 deductible for income tax purposes.

The following table summarizes the final 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 8,112

Operating lease right-of-use assets 29,487

Identifiable intangible assets 40,200

Goodwill 34,910

Net deferred tax assets 32,701

Other assets 19,649

Total assets acquired 229,511

Liabilities assumed:

Accounts payable and accrued liabilities 32,865

Operating lease liabilities 29,487

Total liabilities assumed 62,352

Total consideration transferred $ 167,159

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

The 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.

During the measurement period included in the three months ended August 31, 2023, measurement period adjustments were recorded to finalize net deferred tax assets at the acquired value as disclosed in the table above, resulting in a corresponding decrease to goodwill.

The purchase price allocation is now final.

The amounts allocated to intangible assets are as follows:

Gross Carrying Amount Weighted-Average Useful Life Amortization Method

Customer relationships $ 31,370 15 years Accelerated

Technology 5,640 5 years Straight-line

Trade name 3,190 3 years Straight-line

Total $ 40,200

Webhelp Combination

On September 25, 2023, the Company completed its acquisition (the “Webhelp Combination”) of all of the issued and outstanding capital stock (the “Shares”) of Marnix Lux SA, a public limited liability company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg (“Webhelp Parent”) and the parent company of the Webhelp business (“Webhelp”), from the holders thereof (the “Sellers”).

The Webhelp Combination was completed pursuant to the terms and conditions of the Share Purchase and Contribution Agreement, dated as of June 12, 2023, as amended by the First Amendment to the Share Purchase and Contribution Agreement, dated as of July 14, 2023 (the “SPA”) by and among Concentrix, OSYRIS S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand Duchy of Luxembourg and a direct wholly owned subsidiary of Concentrix Corporation (“Purchaser”), Webhelp Parent, the Sellers, and certain representatives of the Sellers.

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 the closing of the Webhelp Combination, the Company will operate under the trade name “Concentrix + Webhelp” while it finalizes its permanent name.

The aggregate consideration for the acquisition of the Shares was approximately $ 4 billion and consisted of the following:

• € 500,000 in cash, subject to adjustment as set forth in the SPA (the “Closing Cash Payment”);

• a promissory note issued by Concentrix Corporation in the aggregate principal amount of € 700,000 to certain Sellers, with a term of two years and bearing interest at a rate of 2 % per annum on the unpaid principal outstanding from time to time;

• 14,862 shares of common stock, par value $ 0.0001 per share, of Concentrix Corporation (the “Concentrix common stock”);

• the repayment of approximately $ 1.6 billion of indebtedness, net of Webhelp cash on hand.

In addition, the Company granted Sellers the contingent right to earn an additional 750 shares of Concentrix common stock (the “Earnout Shares”) if certain conditions set forth in the SPA occur, including the share price of Concentrix common stock reaching $ 170.00 per share within seven years from the closing of the Webhelp Combination (the “Closing Date”) (based on daily volume weighted average prices measured over a specified period).

On the Closing Date, the Company issued approximately 80 Restricted Shares in exchange for certain of the Restricted Stock Participants’ Shares.

The Restricted Shares will be automatically cancelled by the Company for no consideration in the event that the restrictions on the

Restricted Shares do not lapse.

The Restricted Stock Participants have waived any and all rights as a holder of Restricted Shares to vote on any matter submitted to the holders of Common Stock.

Immediately after the closing of the Webhelp Combination, there were approximately 66.6 million shares of Concentrix common stock outstanding, with Concentrix’ stockholders prior to the Wehbhelp Combination holding approximately 77.6 % of such outstanding shares, and the Sellers holding approximately 22.4 % of such shares.

Given the short period of time from the Closing Date to the filing of this Quarterly Report on Form 10-Q, the Company is in the process of compiling the initial accounting for the Webhelp Combination, including the determination of the fair values of tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income and non-income based taxes, residual goodwill and the amount of goodwill that will be deductible for tax purposes.

Acquisition-related and integration expenses

In connection with the acquisitions of PK and ServiceSource and the Webhelp Combination, the Company incurred $ 18,494 and $ 31,470 of acquisition-related and integration expenses for the three and nine months ended August 31, 2023, respectively, and $ 12,565 and $ 15,213 for the three and nine months ended August 31, 2022.

In connection with the Webhelp Combination and previous year acquisitions, the Company incurred $ 30,173 and $ 5,543 of acquisition-related and integration expenses for the three months ended February 29, 2024 and February 28, 2023, 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.

2 unchanged sentences

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.

In February 2024, the Company granted 96 restricted stock units and 115 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 units had a weighted average grant date fair value of $ 89.28 per share and vest over a service period of three years .

The performance-based restricted stock units will vest, if at all, upon the achievement of certain financial targets during the three-year period ending November 30, 2026.

The performance-based restricted stock units had a grant date weighted average fair value of $ 85.71 per share.

The Company recorded share-based compensation expense in the consolidated statements of operations for the three and nine months ended August 31, 2023 and 2022 as follows:

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

The Company recorded share-based compensation expense in the consolidated statements of operations for the three months ended February 29, 2024 and February 28, 2023 as follows:

Three Months Ended

February 29, 2024 February 28, 2023

Total share-based compensation $ 21,646 $ 16,754

5 unchanged sentences

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:

August 31, 2023 November 30, 2022

February 29, 2024 November 30, 2023

Cash and cash equivalents $ 234,794 $ 295,336

2 unchanged sentences

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.

As of August 31, 2023, the Company held approximately $ 1,889,000 of proceeds from the senior notes issued on August 2, 2023 (see Note 8 for further details) in money market funds that were classified as cash and cash equivalents on the balance sheet.

As described in Note 3, the Company used the balance of these funds in connection with the completion of the Webhelp Combination.

The Company had a corresponding current liability recorded in other accrued liabilities on the consolidated balance sheet related to funds held for clients of approximately $ 174,303 and $ 218,228 as of February 29, 2024 and November 30, 2023, respectively.

Accounts receivable, net:

Accounts receivable, net is comprised of the following as of August 31, 2023 and November 30, 2022:

August 31, 2023 November 30, 2022

Accounts receivable, net is comprised of the following as of February 29, 2024 and November 30, 2023:

February 29, 2024 November 30, 2023

Billed accounts receivable $ 1,098,480 $ 1,082,469

5 unchanged sentences

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

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Balance at beginning of period $ 12,533 $ 4,797

3 unchanged sentences

Property and equipment, net:

The following table summarizes the carrying amounts and related accumulated depreciation for property and equipment as of August 31, 2023 and November 30, 2022:

August 31, 2023 November 30, 2022

The following table summarizes the carrying amounts and related accumulated depreciation for property and equipment as of February 29, 2024 and November 30, 2023:

February 29, 2024 November 30, 2023

Land $ 28,276 $ 28,039

8 unchanged sentences

$ 730,242 $ 748,691

Shown below are the countries where 10% or more of the Company’s property and equipment, net are located as of August 31, 2023 and November 30, 2022:

August 31, 2023 November 30, 2022

Shown below are the countries where 10% or more and other significant concentrations of the Company’s property and equipment, net are located as of February 29, 2024 and November 30, 2023:

February 29, 2024 November 30, 2023

Property and equipment, net:

1 unchanged sentence

Philippines 72,460 75,943

70,913 65,599

India 48,895 51,248

1 unchanged sentence

Total $ 730,242 $ 748,691

The following table summarizes the changes in the Company’s goodwill for the nine months ended August 31, 2023 and 2022:

Nine Months Ended

August 31, 2023 August 31, 2022

The following table summarizes the changes in the Company’s goodwill for the three months ended February 29, 2024 and February 28, 2023:

Three Months Ended

February 29, 2024 February 28, 2023

Balance at beginning of period $ 5,078,668 $ 2,904,402

Acquisitions — 1,195,039

Acquisition measurement period adjustments

3 unchanged sentences

Intangible assets, net:

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of August 31, 2023 and November 30, 2022:

As of August 31, 2023 As of November 30, 2022

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of February 29, 2024 and November 30, 2023:

As of February 29, 2024 As of November 30, 2023

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

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Fiscal years ending November 30,

2023 (remaining three months) $ 39,426

2024 (remaining nine months) $ 344,518

Thereafter 986,265

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

Three Months Ended August 31, 2023 and 2022

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

Balances at 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 )

Balances at May 31, 2023 $ ( 7,972 ) $ ( 8,670 ) $ ( 286,367 ) $ ( 303,009 )

Other comprehensive income (loss) before reclassification

( 1,739 ) 1,266 ( 1,137 ) ( 1,610 )

Reclassification of gains from other comprehensive income (loss)

— 2,458 — 2,458

Balances at August 31, 2023

$ ( 9,711 ) $ ( 4,946 ) $ ( 287,504 ) $ ( 302,161 )

Nine Months Ended August 31, 2023 and 2022

Three Months Ended February 29, 2024 and February 28, 2023

Unrecognized gains (losses) on

1 unchanged sentence

Unrealized gains (losses) on

cash flow hedges, net of taxes

hedges, net of taxes

Foreign currency translation

3 unchanged sentences

( 552 ) 7,654 17,243 24,345

Reclassification of gains from other comprehensive income (loss)

Reclassification of losses from other comprehensive income (loss)

— 5,807 — 5,807

Balances at August 31, 2022

Balances at February 28, 2023

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

4 unchanged sentences

— ( 427 ) — ( 427 )

Balances at August 31, 2023

Balances at February 29, 2024

$ ( 9,967 ) $ 42 $ ( 254,357 ) $ ( 264,282 )

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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 2025.

These instruments mature at various dates through February 2026.

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 period.

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 period.

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

4 unchanged sentences

Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates.

During the second quarter of 2023, the Company entered into short-term foreign exchange forward call option contracts to offset the foreign exchange risk associated with the cash payment required in euros upon closing of the Webhelp Combination.

These derivatives are not designated as hedging instruments and are adjusted to fair value through earnings and included in other expense (income), net in the consolidated statement of operations.

Cross-currency interest rate swaps

In connection with the closing of the Webhelp Combination, the Company entered into cross-currency swap arrangements with certain financial institutions for a total notional amount of $ 500,000 of the Company’s senior notes.

In addition to aligning the currency of a portion of the Company’s interest payments to the Company’s euro-denominated cash flows, the arrangements, together with intercompany loans and additional intercompany cross-currency interest rate swap arrangements described below, effectively converted $ 250,000 aggregate principal amount of the Company’s 6.650 % Senior Notes due 2026 and $ 250,000 aggregate principal amount of the

Company’s 6.660 % Senior Notes due 2028 into synthetic fixed euro-based debt at weighted average interest rates of 5.12 % and 5.18 %, respectively.

Concurrent with entering into the cross-currency interest rate swaps with certain financial institutions, Marnix SAS, a wholly owned subsidiary of Concentrix, entered into corresponding U.S.

dollar denominated intercompany loan agreements with certain other subsidiaries of Concentrix with identical terms and notional amounts as the underlying $ 500,000 U.S.

dollar denominated senior notes, with reciprocal cross currency interest rate swaps.

The cross-currency interest rate swaps are designated as fair value hedges.

Fair Values of Derivative Instruments in the Consolidated Balance Sheets

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 August 31, 2023 November 30, 2022

Balance Sheet Line Item February 29, 2024 November 30, 2023

Derivative instruments not designated as hedging instruments:

1 unchanged sentence

Other current assets

10,519 16,078

Other accrued liabilities

Derivative instruments designated as fair value hedges:

Cross-currency interest rate swaps (notional value)

$ 471,604 $ 471,604

Foreign exchange call options contracts (notional value) $ 2,012,475 $ —

Other current assets 136 —

Other long-term liabilities

12,988 17,219

Derivative instruments designated as cash flow hedges:

2 unchanged sentences

Other accrued liabilities and other long-term liabilities

13,366 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, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Derivative instruments designated as cash flow hedges

Three Months Ended

Locations of gain (loss) in statement of operations February 29, 2024 February 28, 2023

Derivative instruments designated as cash flow and fair value hedges:

Gains (losses) recognized in OCI:

Foreign exchange forward contracts $ ( 5,423 ) $ 10,203

Losses reclassified from AOCI into income:

Cross-currency interest rate swaps

$ ( 5,348 ) $ 10,203

Gains (losses) reclassified from AOCI into income:

Foreign exchange forward contracts

Loss reclassified from AOCI into income Cost of revenue for services $ ( 2,457 ) $ ( 9,909 ) $ ( 11,179 ) $ ( 12,920 )

Loss reclassified from AOCI into income Selling, general and administrative expenses ( 822 ) ( 3,187 ) ( 3,899 ) ( 3,487 )

Gain (loss) reclassified from AOCI into income

Cost of revenue for services $ 454 $ ( 5,760 )

Gain (loss) reclassified from AOCI into income

Selling, general and administrative expenses 123 ( 1,981 )

Total $ 577 $ ( 7,741 )

Derivative instruments not designated as hedging instruments:

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

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

Other expense (income), net $ 337 $ 6,225

Loss recognized from foreign exchange call options contracts, net Other expense (income), net ( 2,064 ) — ( 14,493 ) —

Total $ ( 4,234 ) $ ( 39,367 ) $ ( 21,498 ) $ ( 56,527 )

(1) The gains and losses largely offset the currency gains and losses that resulted from changes in the assets and liabilities denominated in nonfunctional currencies.

There were no material gain or loss amounts excluded from the assessment of effectiveness.

Existing net losses in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 5,183 .

Existing net gains in AOCI that are expected to be reclassified into earnings in the normal course of business within the next twelve months are $ 5,168 .

Offsetting of Derivatives

8 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 August 31, 2023 As of November 30, 2022

As of February 29, 2024 As of November 30, 2023

Fair value measurement category Fair value measurement category

4 unchanged sentences

Forward foreign currency exchange contracts 20,368 — 20,368 — 30,408 — 30,408 —

Foreign currency call options contracts

136 — 136 — — — — —

Liabilities measured at fair value:

Forward foreign currency exchange contracts 13,800 — 13,800 — 23,580 — 23,580 —

Cross-currency interest rate swaps

12,988 — 12,988 — 17,219 — 17,219 —

Acquisition contingent consideration

31,940 — 31,940 — 48,600 — 48,600 —

Liabilities measured at other than fair value:

4 unchanged sentences

The Company’s cash equivalents consist primarily of highly liquid investments in money market funds and term deposits with maturity periods of three months or less.

The carrying values of cash equivalents approximate fair

value since they are near their maturity.

The carrying values of cash equivalents approximate fair value since they are near their maturity.

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.

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 fair value of the foreign exchange forward call options contracts is measured using market standard option models and foreign currency spot rates.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of August 31, 2023 and November 30, 2022.

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 fair values of the cross-currency interest rate swaps are determined using a market approach that is based on observable inputs other than quoted market prices, including contract terms, interest rates, currency rates, and other market factors.

The estimated fair value of the acquisition contingent consideration was determined using a Monte-Carlo simulation model.

The inputs include the closing price of Concentrix common stock as of the reporting period end date, Concentrix-specific historical equity volatility, and the risk-free rate.

The effect of nonperformance risk on the fair value of derivative instruments was not material as of February 29, 2024 and November 30, 2023.

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 senior 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.

The carrying values of the outstanding balance on the term loan under the Company’s senior credit facility and the outstanding balance on the Company’s accounts receivable securitization facility (the “Securitization Facility”) approximate their fair values since they bear interest rates that are similar to existing market rates.

The fair values of the 2026 Notes, 2028 Notes, and 2033 Notes (as defined in Note 8) were based on quoted prices in active markets and are classified within Level 2 of the fair value hierarchy.

The Company does not adjust the quoted market prices for such financial instruments.

During the three and nine months ended August 31, 2023 and 2022, there were no transfers between the fair value measurement category levels.

During the three months ended February 29, 2024 and February 28, 2023, there were no transfers between the fair value measurement category levels.

NOTE 8—BORROWINGS:

Borrowings consist of the following:

August 31, 2023 November 30, 2022

February 29, 2024 November 30, 2023

Other loans $ 2,714 $ 2,313

Current portion of long-term debt $ 2,714 $ 2,313

6.650 % Senior Notes due 2026

$ 800,000 $ 800,000

6.600 % Senior Notes due 2028

800,000 800,000

6.850 % Senior Notes due 2033

550,000 550,000

Credit Facility - Term Loan component 1,850,000 1,950,000

Securitization Facility 326,000 128,500

Sellers’ Note 756,177 762,286

Other loans 2,509 5,301

Long-term debt, before unamortized debt discount and issuance costs 5,084,686 4,996,087

5 unchanged sentences

Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a first supplemental indenture dated as of August 2, 2023 between Concentrix and the Trustee relating to the 2026 Notes, a second supplemental indenture dated as of August 2, 2023 between Concentrix and the Trustee relating to the 2028 Notes, and a third supplemental indenture dated as of August 2, 2023 between Concentrix and the Trustee relating to the 2033 Notes (such supplemental indentures, together with the Base Indenture, the “Indenture”).

The Indenture contains customary covenants and restrictions, including covenants that limit Concentrix Corporation’s and certain of its subsidiaries’ ability to create or incur liens on shares

of stock of certain subsidiaries or on principal properties, engage in sale/leaseback transactions or, with respect to Concentrix Corporation, consolidate or merge with, or sell or lease substantially all its assets to, another person.

The Indenture contains customary covenants and restrictions, including covenants that limit Concentrix Corporation’s and certain of its subsidiaries’ ability to create or incur liens on shares of stock of certain subsidiaries or on principal properties, engage in sale/leaseback transactions or, with respect to Concentrix Corporation, consolidate or merge with, or sell or lease substantially all its assets to, another person.

The Indenture also provides for customary events of default.

The Company used the net proceeds of the offering and sale of the Senior Notes, together with approximately $ 294.7 million of delayed draw borrowings under its $ 2.1447 billion senior unsecured term loan facility and cash on hand, to pay the cash portion of the Webhelp Combination consideration, repay approximately € 1.80 billion of existing indebtedness of Webhelp Parent and its subsidiaries, and pay related fees and expenses in connection with the Webhelp Combination.

The remaining proceeds will be used for general corporate purposes of the Company.

The Company incurred debt discount and issuance costs of approximately $ 19,300 associated with the Senior Notes during the nine months ended August 31, 2023, which are being amortized over the applicable maturity dates.

In connection with the closing of the Webhelp Combination, the Company entered into cross-currency swap arrangements for a total notional amount of $ 500,000 of the Senior Notes.

In addition to aligning the currency of a portion of the interest payments to the Company’s euro-denominated cash flows, the arrangements effectively converted $ 250,000 of each of the 2026 Notes and 2028 Notes into synthetic fixed Euro-based debt at weighted average interest rates of 5.12 % and 5.18 %, respectively.

Bridge Facility and Restated Credit Facility

To provide the debt financing required by the Company to consummate the Webhelp Combination, the Company entered into a commitment letter dated March 29, 2023 (the “Bridge Commitment Letter,” and the commitments pursuant to the Bridge Commitment Letter, the “Bridge Facility”), under which certain financing institutions committed to provide a 364-day bridge loan facility in an aggregate principal amount of $ 5,290,000 consisting of (i) a $ 1,850,000 tranche of term bridge loans (the “Term Loan Amendment Tranche”), (ii) a $ 1,000,000 tranche of revolving commitments (the “Revolver Amendment Tranche”) and (iii) a $ 2,440,000 tranche of term bridge loans (the “Acquisition Tranche”), each subject to the satisfaction of certain customary closing conditions, including the consummation of the Webhelp Combination.

The incurrence of the acquisition-related indebtedness that would be funded by the Acquisition Tranche of the Bridge Facility (or permanent financing in lieu thereof) and by the Sellers’ Note was not permitted under the Prior Credit Facility.

Therefore, on April 21, 2023, the Company entered into an Amendment and Restatement Agreement (the “Amendment Agreement”) with the lenders party thereto, JPMorgan Chase and Bank of America, N.A.

to amend and restate the Prior Credit Facility (as amended and restated, the “Restated Credit Facility”).

As a result of having entered into the Amendment Agreement, among other things, the Company obtained requisite lender consent to incur acquisition-related indebtedness, and pursuant to the terms of the Bridge Commitment Letter, the commitments with respect to the Term Loan Amendment Tranche and the Revolver Amendment Tranche of the Bridge Facility were each reduced to zero , and the Acquisition Tranche was reduced by approximately $ 294,702 .

On August 2, 2023, the remaining outstanding commitment of approximately $ 2.15 billion under the Bridge Commitment Letter was reduced to zero in connection with the issuance of the Senior Notes previously described.

Restated Credit Facility

On April 21, 2023, the Company entered into an Amendment and Restatement Agreement (the “Amendment Agreement”) with the lenders party thereto, JPMorgan Chase Bank, N.A.

and Bank of America, N.A., to amend and restate the Company’s senior secured credit facility (the “Prior Credit Facility” and as amended and restated, the “Restated Credit Facility”).

The Restated Credit Facility provides for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $ 1,042,500 .

The Restated Credit Facility also provides for a senior unsecured term loan facility in an aggregate principal amount not to exceed approximately $ 2,144,700 , of which $ 1,850,000 was outstanding as of August 31, 2023 and approximately $ 294,702 was drawn on a delayed draw basis on the Closing Date (the “Delayed Draw Term Loans”).

The Restated Credit Facility also provides for a senior unsecured term loan facility in an aggregate principal amount not to exceed approximately $ 2,144,700 (the “Term Loan”), of which $ 1,850,000 was incurred upon the amendment and approximately $ 294,702 was drawn on a delayed draw basis on the Closing Date.

Aggregate borrowing capacity under the Restated Credit Facility may be increased by up to an additional $ 500,000 by increasing the amount of the revolving credit facility or by incurring additional term loans, in each case subject to the satisfaction of certain conditions set forth in the Restated Credit Facility, including the receipt of additional commitments for such increase.

In September 2023, the Company prepaid $ 69,700 of the principal balance on the term loan facility, without penalty, resulting in an outstanding balance of approximately $ 2,075,000 .

The maturity date of the Restated Credit Facility remains December 27, 2026, subject, in the case of the revolving credit facility, to two one-year extensions upon the Company’s prior notice to the lenders and the agreement of the lenders to extend such maturity date.

The outstanding principal amount of the term loans is payable in quarterly installments in an amount equal to 1.25 % of the existing principal balance, plus the Delayed Draw Term Loans advanced on the closing date of the Webhelp Combination, commencing on December 31, 2024, with the outstanding principal amount of the term loans due in full on the maturity date.

As of November 30, 2023, the outstanding principal balance on the Term Loan was $ 1,950,000 due to principal payments made subsequent to the Closing Date.

During the three months ended February 29, 2024, the Company voluntarily prepaid $ 100,000 of the principal balance on the Term Loan, without penalty, resulting in an outstanding balance at February 29, 2024 of $ 1,850,000 .

The maturity date of the Restated Credit Facility is December 27, 2026, subject, in the case of the revolving credit facility, to two one-year extensions upon the Company’s prior notice to the lenders and the agreement of the lenders to extend such maturity date.

Due to the voluntary prepayments previously described, no principal payment is required until the outstanding principal amount is due in full on the maturity date.

Borrowings under the Restated 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 applicable margin, which ranges from 1.125 % to 2.000 %, based on the credit ratings of the Company’s senior unsecured non-credit enhanced long-term indebtedness for borrowed money plus a credit spread adjustment to the SOFR rate of 0.10 %.

Borrowings under the Restated Credit Facility that are base rate loans bear interest at a per annum rate (but not less than 1.0 %) equal to (i) the greatest of (A) the Prime Rate (as defined in the Restated Credit Facility) in effect on such day, (B) the NYFRB Rate (as defined in the Restated Credit Facility) in effect on such day plus ½ of 1.0%, and (C) the adjusted one-month term SOFR rate plus 1.0 % per annum, plus (ii) an applicable margin, which ranges from 0.125 % to 1.000 %, based on the credit ratings of the Company’s senior unsecured non-credit enhanced long-term indebtedness for borrowed money.

The Restated Credit Facility contains certain loan covenants that are customary for credit facilities of this type and that restrict the ability of Concentrix Corporation and its subsidiaries to take certain actions, including the creation of liens, mergers or consolidations, changes to the nature of their business, and, solely with respect to subsidiaries of Concentrix Corporation, incurrence of indebtedness.

subsidiaries of Concentrix Corporation, incurrence of indebtedness.

In addition, the Restated Credit Facility contains financial covenants that require the Company to maintain at the end of each fiscal quarter, (i) a consolidated leverage ratio (as defined in the Restated Credit Facility) not to exceed 3.75 to 1.0 (or for certain periods following certain qualified acquisitions, including the Webhelp Combination, 4.25 to 1.0) and (ii) a consolidated interest coverage ratio (as defined in the Restated Credit Facility) equal to or greater than 3.00 to 1.0.

7 unchanged sentences

From August 31, 2022 through the date of the Amendment Agreement, the outstanding principal of the term loans under the Prior Credit Facility was payable in quarterly installments of $ 26,250 .

At August 31, 2023 and November 30, 2022, no amounts were outstanding under the Company’s revolving credit facility.

During the nine months ended August 31, 2023, the Company paid $ 25,000 of voluntary principal prepayments, without penalty, on the term loans under the Prior Credit Facility.

The Company paid a total of $ 4,613 and $ 21,617 in Bridge Facility financing fees during the three and nine months ended August 31, 2023, respectively.

The full amount of the Bridge Facility financing fees of $ 21,617 was expensed during the nine months ended August 31, 2023, which included $ 10,687 in the three months ended August 31, 2023.

In the nine months ended August 31, 2023, the Company paid $ 3,369 in debt amendment fees related to the Restated Credit Facility.

The debt amendment fees that were capitalized are being amortized over the remaining life of the Restated Credit Facility.

At February 29, 2024 and November 30, 2023, no amounts were outstanding under the Company’s revolving credit facility.

During the three months ended February 28, 2023, the Company voluntarily prepaid $ 25,000 of the principal balance on the term loans under the Prior Credit Facility, without penalty.

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 %.

The Company has an amended Securitization Facility that provides for available borrowings of up to $ 500,000 with a termination date of July 5, 2024.

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 credit spread adjustment to the SOFR rate of 0.10 %), plus a spread of 0.80 %.

Amounts drawn under the Securitization Facility have been 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 February 29, 2024 and November 30, 2023.

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

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Sellers’ Note

On September 25, 2023, as part of the consideration for the Webhelp Combination, Concentrix Corporation issued a promissory note in the aggregate principal amount of € 700,000 (the “Sellers’ Note”) to certain Sellers (the “Noteholders”).

Pursuant to the Sellers’ Note, the unpaid principal amount outstanding will accrue interest from time to time at a rate of two percent ( 2 %) per annum, and all principal and accrued interest will be due and payable on September 25, 2025.

On September 25, 2023, as part of the consideration for the Webhelp Combination, Concentrix Corporation issued the Sellers’ Note in the aggregate principal amount of € 700,000 to certain Sellers.

The stated rate of interest associated with the Sellers’ Note is two percent ( 2.00 %) per annum, which is below the Company’s expected borrowing rate.

As a result, the Company discounted the Sellers’ Note by € 31,500 using an approximate 4.36 % imputed annual interest rate.

This discounting resulted in an initial value of € 668,500 or $ 711,830 .

The discounted value is being amortized into interest expense over the two-year term.

All stated principal and accrued interest will be due and payable on September 25, 2025.

Covenant compliance

As of August 31, 2023 and November 30, 2022, Concentrix was in compliance with all covenants for the above arrangements.

As of February 29, 2024 and November 30, 2023, Concentrix was in compliance with all covenants for the above arrangements.

NOTE 9— EARNINGS PER SHARE:

Basic and diluted earnings per common share ( “ EPS ” ) are computed using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security.

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, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Basic earnings per common share:

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(1) Restricted stock awards granted to employees by the Company are considered participating securities.

Effective in the fourth quarter of fiscal year 2023, restricted stock units granted are also considered participating securities.

NOTE 10— REVENUE:

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

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Industry vertical:

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legal entities are covered by government mandated defined contribution plans.

During the three and nine months ended August 31, 2023, the Company contributed $ 22,945 and $ 67,470 , 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 months ended February 29, 2024 and February 28, 2023, the Company contributed $ 26,116 and $ 22,654 , respectively, to defined contribution plans.

Defined Benefit Plans

The Company has defined benefit pension and retirement plans for eligible employees of certain non-U.S.

legal entities.

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.

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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 $ 2,433 and $ 8,060 , during the three and nine months ended August 31, 2023, 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.

On an aggregate basis, the plans were underfunded by $ 67,572 and $ 71,815 at August 31, 2023 and November 30, 2022, respectively.

Net benefit costs related to defined benefit plans were $ 3,579 and $ 2,934 , during the three months ended February 29, 2024 and February 28, 2023, respectively.

On an aggregate basis, the plans were underfunded by $ 82,491 and $ 81,813 at February 29, 2024 and November 30, 2023, 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, 2023 and 2022 were impacted by the geographic mix of worldwide income and certain discrete items.

The liability for unrecognized tax benefits was $ 87,276 and $ 78,501 at August 31, 2023 and November 30, 2022, respectively, and is included in other long-term liabilities in the consolidated balance sheets.

As of August 31, 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 $ 47,016 and $ 40,793 , respectively.

The effective tax rates for the three months ended February 29, 2024 and February 28, 2023 were impacted by the geographic mix of worldwide income and certain discrete items.

The liability for unrecognized tax benefits was $ 88,948 and $ 87,939 at February 29, 2024 and November 30, 2023, respectively, and is included in other long-term liabilities in the consolidated balance sheets.

As of February 29, 2024 and November 30, 2023, the total amount of unrecognized tax benefits that would affect income tax expense if recognized in the consolidated financial statements was $ 59,724 and $ 52,779 , respectively.

This amount includes net interest and penalties of $ 9,258 and $ 8,617 for the respective periods.

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

Three Months Ended Nine Months Ended

August 31, 2023 August 31, 2022 August 31, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Operating lease cost $ 68,920 $ 51,760

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Total operating lease cost $ 99,670 $ 67,447

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, 2023:

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 29, 2024:

Fiscal Years Ending November 30,

2023 (remaining three months)

2024 (remaining nine months)

Thereafter 153,969

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

August 31, 2023 November 30, 2022

February 29, 2024 November 30, 2023

Operating lease ROU assets Other assets, net $ 839,337 $ 813,590

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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, 2023 August 31, 2022

Three Months Ended

February 29, 2024 February 28, 2023

Cash paid for amounts included in the measurement of lease liabilities $ 75,842 $ 53,825

Non-cash ROU assets obtained in exchange for lease liabilities 87,511 41,394

The weighted-average remaining lease term and discount rate as of August 31, 2023 and November 30, 2022 were as follows:

August 31, 2023 November 30, 2022

The weighted-average remaining lease term and discount rate as of February 29, 2024 and November 30, 2023 were as follows:

February 29, 2024 November 30, 2023

Weighted-average remaining lease term (years) 4.77 4.88

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It is possible that the liabilities ultimately incurred by the Company could differ from the amounts recorded.

Under the separation and distribution agreement with TD SYNNEX Corporation (“TD SYNNEX”), the Company agreed to indemnify TD SYNNEX, each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities allocated to the Company under the separation and distribution agreement, which are generally those liabilities that relate to the Company’s CX business, whether incurred prior to or after the spin-off.

Under the tax matters agreement with TD SYNNEX, if the spin-off fails to qualify for tax-free treatment, the Company is generally required to indemnify TD SYNNEX for any taxes resulting from the spin-off (and related costs and other damages) to the extent such amounts result from (1) an acquisition of all or a portion of the Company’s equity securities or assets by any means, (2) any action or failure to act by the Company after the distribution affecting the voting rights of the Company’s stock, (3) other actions or failures to act by the Company, or (4) certain breaches of the Company’s agreements and representations in the tax matters agreement.

The Company’s indemnification obligations to TD SYNNEX and its subsidiaries, officers, directors and employees are not limited by any maximum amount.

The Company does not believe that the above commitments and contingencies will have a material adverse effect on the Company’s results of operations, financial position, or cash flows.

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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, 2023, the Company repurchased 320 and 431 shares, respectively, of its common stock for an aggregate purchase price of $ 27,000 and $ 41,941 , respectively.

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 29, 2024 and February 28, 2023, the Company repurchased 237 and 71 shares, respectively, of its common stock for an aggregate purchase price of $ 21,674 and $ 10,001 , 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 August 31, 2023, approximately $ 312,144 remained available for share repurchases under the existing authorization from the Company’s board of directors.

During September 2023, the Company repurchased 95 shares of its common stock for an aggregate purchase price of $ 7,062 .

At February 29, 2024, approximately $ 268,452 remained available for share repurchases under the existing authorization from the Company’s board of directors.

During March 2023, the Company repurchased 184 shares of its common stock for an aggregate purchase price of $ 11,964 .

During fiscal years 2024 and 2023, the Company has paid the following dividends per share approved by the Company’s board of directors:

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September 27, 2023 October 27, 2023 $ 0.3025 November 7, 2023

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

March 29, 2023 April 28, 2023 $ 0.275 May 9, 2023

June 28, 2023 July 28, 2023 $ 0.275 August 8, 2023

On September 27, 2023, the Company announced a cash dividend of $ 0.3025 per share to stockholders of record as of October 27, 2023, payable on November 7, 2023.

January 24, 2024 February 5, 2024 $ 0.3025 February 15, 2024

On March 26, 2024, the Company announced a cash dividend of $ 0.3025 per share to stockholders of record as of April 26, 2024, payable on May 7, 2024.

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