What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-03 compared with 2025-04-04 · 183 added, 120 removed, 284 unchanged (52% of the section changed)

6 unchanged sentences

Risks and uncertainties include, among other things:

risks related to general economic conditions and their effects on our clients’ businesses, including consumer demand, interest rates, inflation, international tariffs, supply chains, and the effects of the conflicts in Ukraine and Gaza;

risks related to general economic and geopolitical conditions and their effects on our clients’ businesses and demand for our services, including consumer demand, interest rates, inflation, international tariffs and global trade policies, supply chains, and the conflicts in Ukraine and the Middle East, and tensions between India and Pakistan;

cyberattacks on our or our clients’ networks and information technology systems;

10 unchanged sentences

damage to our reputation through the actions or inactions of third parties;

changes in law, regulations or regulatory guidance, or changes in their interpretation or enforcement;

changes in law, regulations or regulatory guidance, or changes in their interpretation or enforcement, including changes in law and policy that restrict travel between countries in which we have operations;

the operability of our communication services and information technology systems and networks;

13 unchanged sentences

We design, build, and run fully integrated, end-to-end solutions, including customer experience (“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.

Our differentiated portfolio of solutions supports Fortune Global 500 as well as new economy clients across the globe in their efforts to deliver an optimized, consistent brand experience across all channels of communication, including voice, chat, email, generative AI-powered self-service, social media, asynchronous messaging, and custom applications.

We strive to deliver exceptional services globally supported by our deep industry knowledge, technology and security practices, talented people, and digital and analytics expertise.

Our differentiated portfolio of solutions supports Fortune Global 500 clients across the globe in their efforts to deliver an optimized, consistent brand experience across all channels of communication, including voice, chat, email, generative AI-powered self-service, social media, asynchronous messaging, and custom applications.

We strive to deliver exceptional services

globally supported by our deep industry knowledge, technology and security practices, talented people, and digital and analytics expertise.

We generate revenue from performing services that are generally tied to our clients’ products and services.

15 unchanged sentences

Our cost of revenue as a percentage of revenue has also fluctuated in the past, based primarily on our ability to achieve economies of scale, the management of our operating expenses, and the timing and costs incurred related to our acquisitions and investments.

Through the first quarter of fiscal years 2025 and 2024, approximately 89% and 79%, respectively, of our consolidated revenue was generated from our non-U.S.

For the six months ended May 31, 2025 and 2024, approximately 89% and 88%, respectively, of our consolidated revenue was generated from our non-U.S.

operations, and approximately 55% and 50%, respectively, of our consolidated revenue was priced in U.S.

1 unchanged sentence

operations while being priced in U.S.

As a result, we have certain client contracts that are priced in non-U.S.

We have certain client contracts that are priced in non-U.S.

dollar currencies for which a substantial portion of the costs to deliver the services are in other currencies.

3 unchanged sentences

As a result, our revenue growth, costs, and profitability have been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates and inflation.

Our gross margins fluctuate and can be impacted by the mix of client contracts, services provided, shifts in the geography from which our technology and services are delivered, client volume trends, the amount of lead time that is required for programs to become fully scaled, and transition and set-up costs.

Our gross margins fluctuate and can be impacted by the mix of client contracts, services provided, shifts in the geography from which our technology and services are delivered, client volume trends, the amount of lead time that is required for programs or services to become fully scaled, and transition and set-up costs.

Our operating margin fluctuates based on changes in gross margins as well as overall volume levels, as we are generally able to gain scale efficiencies in our selling, general and administrative costs as our volumes increase.

1 unchanged sentence

The industry in which we operate is competitive, including on the basis of pricing terms, delivery capabilities, and quality of services.

Further, there can be competitive pressure for labor in various markets, which could result in increased labor costs.

Accordingly, we could be subject to pricing and labor cost pressures and may experience a decrease in revenue and operating income.

Labor in various markets is also subject to competitive pressures that can result in increased labor costs.

These factors subject us to pricing and labor cost pressures that can negatively affect our revenue, gross profit, and operating income.

Our business operates globally in 75 countries across six continents.

We have significant concentrations in the Philippines, India,

Brazil, the United States, Egypt, Türkiye , Colombia, Malaysia, Morocco, China, the United Kingdom, and elsewhere throughout EMEA, Latin America, and Asia-Pacific.

We have significant concentrations in the Philippines, India, Brazil, the United States, Egypt, Türkiye , Colombia, Malaysia, Morocco, China, the United Kingdom, and elsewhere throughout EMEA, Latin America, and Asia-Pacific.

Accordingly, we would be impacted by economic strength or weakness in these geographies and by the strengthening or weakening of local currencies relative to the U.S.

In January 2025, the U.S.

government began imposing, or threatening to impose, new or increased tariffs on certain countries, materials, and industries, and in response, certain impacted countries have imposed or threatened various retaliatory tariffs or other trade restrictions on imports from the United States.

We cannot predict with certainty the effect of future changes in global trade policy and tariffs on our clients’ operations and demand for our services in future periods.

Our revenue and margins fluctuate with the underlying trends in our clients’ businesses and trends in the level of consumer activity.

1 unchanged sentence

Critical Accounting Policies and Estimates

During the three months ended February 28, 2025, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024.

Results of Operations – Three Months Ended February 28, 2025 and February 29, 2024

Three Months Ended

February 28, 2025 February 29, 2024

($ in thousands)

During the three and six months ended May 31, 2025, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024.

Results of Operations – Three and Six Months Ended May 31, 2025 and 2024

Three Months Ended Six Months Ended

May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

($ in thousands) ($ in thousands)

Revenue $ 2,417,371 $ 2,380,716 $ 4,789,593 $ 4,783,464

8 unchanged sentences

Net income $ 42,093 $ 66,834 $ 112,350 $ 118,936

Three Months Ended % Change

February 28, 2025 February 29, 2024 2025 to 2024

Three Months Ended % Change Six Months Ended % Change

May 31, 2025 May 31, 2024 2025 to 2024

($ in thousands)

Industry vertical:

9 unchanged sentences

Our solutions focus on customer engagement, process optimization, and back-office automation.

Our revenue decreased by 1.3% for the three months ended February 28, 2025, compared to the three months ended February 29, 2024.

Contributing to the decrease in revenue was the negative effect of changes in foreign currency exchange rates of $62.4 million, or 2.6%.

Our revenue increased by 1.5% for the three months ended May 31, 2025, compared to the three months ended May 31, 2024.

The increase in revenue resulted primarily from increases in revenue in our technology and consumer electronics, retail, travel and e-commerce, communications and media and banking, financial services and insurance verticals.

Foreign exchange rates had a de minimis impact on revenue growth for the period.

Our revenue increased by 0.1% for the six months ended May 31, 2025, compared to the six months ended May 31, 2024.

Revenue increased for the six months ended May 31, 2025 due to increases in underlying volumes, but was negatively impacted by the effect of changes in foreign currency exchange rates of $61.9 million, or 1.3%.

The unfavorable foreign currency rate impact on revenue was primarily due to the weakening of the euro, the Brazilian real and several other currencies against the U.S.

Partially offsetting this decrease in revenue due to foreign currency exchange rates were increases in our revenue due to underlying client volumes.

For the three months ended February 28, 2025, revenue across all verticals decreased in comparison to the prior period, with the exception of retail, travel, and e-commerce which remained flat over the prior period.

Revenue in our technology and consumer electronics vertical decreased 1.1%, which included a decrease as a result of foreign currency exchange rates partially offset by increases in underlying business, primarily from several social media and internet-related service clients.

Revenue in our retail, travel and e-commerce vertical remained flat, which included increases in underlying business, primarily from several larger clients in this vertical, offset by a decrease as a result of foreign currency exchange rates.

Revenue in our communication and media vertical decreased 2.4%, which included a decrease as a result of foreign currency exchange rates, partially offset by increases in underlying business primarily from several clients in the vertical.

Revenue in our banking, financial services and insurance vertical decreased 0.1%, which included a decrease as a result of foreign currency exchange rates partially offset by increases in underlying business, primarily from several clients in the vertical.

For the three months ended May 31, 2025, revenue increased in our technology and consumer electronics, retail, travel and e-commerce, communications and media and banking, financial services and insurance verticals.

Revenue in our healthcare and other verticals decreased in comparison to the prior year period.

Revenue in our technology and consumer electronics vertical increased 0.7%, primarily due to increased business from several social media and several other larger clients in the vertical.

Revenue in our retail, travel and e-commerce vertical increased 2.8%, primarily due to increased business with several larger clients in this vertical.

Revenue in our communications and media vertical increased 3.1%, primarily due to increased business with several larger clients in the vertical.

Revenue in our banking, financial services and insurance vertical increased 1.7%, primarily due to increased business from the majority of clients in the vertical.

Revenue in our healthcare vertical decreased 0.2%, which included decreases in underlying business, primarily from a larger client in the vertical.

Revenue in our other vertical decreased 0.6%, which included decreases in underlying business primarily related to an automotive client partially offset by increases in several other clients in the vertical.

For the six months ended May 31, 2025, revenue increased in our retail, travel and e-commerce, communications and media and banking, financial services and insurance verticals, while revenue decreased in our technology and consumer electronics, healthcare and other verticals.

Revenue in our technology and consumer electronics vertical decreased 0.2%, which included a decrease as a result of foreign currency exchange rates partially offset by increases in underlying business, primarily from several social media and several other clients in the vertical.

Revenue in our retail, travel and e-commerce vertical increased 1.4% over the prior year period, which included increases in underlying business, primarily from several larger clients in this vertical, partially offset by a decrease as a result of foreign currency exchange rates.

Revenue in our communication and media vertical increased 0.3%, which included increases in underlying business primarily from several larger clients in the vertical, partially offset by a decrease as a result of foreign currency exchange rates.

Revenue in our banking, financial services and insurance vertical increased 0.8%, which included increases in underlying business from the majority of clients in the vertical, partially offset by a decrease as a result of foreign currency exchange rates.

Revenue in our healthcare vertical decreased 0.4%, which included a decrease as a result of foreign currency exchange rates and decreases in underlying business, primarily from a larger client in the vertical.

Revenue in our other vertical decreased 5.8%, which included a decrease as a result of foreign currency exchange rates and decreases in underlying business primarily related to an automotive client.

Revenue in our other vertical decreased 3.2%, which included a decrease as a result of foreign currency exchange rates and decreases in underlying business, primarily related to an automotive client, partially offset by increases in several other clients in the vertical.

Cost of Revenue, Gross Profit and Gross Margin Percentage

Three Months Ended % Change

February 28, 2025 February 29, 2024 2025 to 2024

($ in thousands)

Three Months Ended % Change Six Months Ended % Change

May 31, 2025 May 31, 2024 2025 to 2024

($ in thousands) ($ in thousands)

Cost of revenue $ 1,569,223 $ 1,523,147 3.0% $ 3,085,546 $ 3,069,366 0.5%

3 unchanged sentences

Gross margins can be impacted by resource location, client mix and pricing, additional lead time for programs to be fully scalable, and transition and initial set-up costs.

Our cost of revenue decreased by 1.9% in the three months ended February 28, 2025, compared to the three months ended February 29, 2024.

Contributing to the decrease in cost of revenue was a $79.3 million, or 5.1%, net reduction in our cost of revenue due to changes in foreign currency exchange rates.

The foreign currency exchange rate impact on our cost of revenue was caused primarily by the weakening of the euro and Egyptian pound against the U.S.

The decrease in cost of revenue as a result of foreign currency exchange rates was partially offset by increases in underlying business.

Our gross profit decreased by 0.1% in the three months ended February 28, 2025, compared to the three months ended February 29, 2024, primarily due to decreases in gross profit associated with underlying business partially offset by a net favorable foreign currency impact of $16.9 million on gross profit.

Our gross margin percentage for the three months ended February 28, 2025 increased to 36.1% from 35.6% in the prior fiscal year period due to the changes previously described.

Our cost of revenue increased by 3.0% in the three months ended May 31, 2025, compared to the three months ended May 31, 2024.

Our cost of revenue increased due to increases in underlying revenue due to volumes partially offset by a reduction in our cost of revenue of $13.1 million, or 0.9%.

due to changes in foreign currency exchange rates.

The foreign currency exchange rate impact on our cost of revenue was caused primarily by the weakening of the Brazilian real, Egyptian pound and several other currencies against the U.S.

Our cost of revenue increased by 0.5% in the six months ended May 31, 2025, compared to the six months ended May 31, 2024.

Our cost of revenue increased due to increases in underlying revenue due to volumes partially offset by a reduction in our cost of revenue of $92.4 million, or 3.0%, due to changes in foreign currency exchange rates.

The foreign currency exchange rate impact on our cost of revenue was caused primarily by the weakening of the Brazilian real, Egyptian pound and several other currencies against the U.S.

Our gross profit decreased by 1.1% in the three months ended May 31, 2025, compared to the three months ended May 31, 2024, primarily due to decreases in gross profit associated with underlying business, partially offset by a net favorable foreign currency impact of $13.6 million on gross profit.

Our gross margin percentage for the three months ended May 31, 2025 decreased to 35.1% from 36.0% in the prior fiscal year period due to the changes to revenue and gross profit previously described.

Our gross profit decreased by 0.6% in the six months ended May 31, 2025, compared to the six months ended May 31, 2024, primarily due to decreases in gross profit associated with underlying business partially offset by a net favorable foreign currency impact of $30.5 million on gross profit.

Our gross margin percentage for the three months ended May 31, 2025 decreased to 35.6% from 35.8% in the prior fiscal year period due to the changes to revenue and gross profit previously described.

Selling, General and Administrative Expenses

Three Months Ended % Change

February 28, 2025 February 29, 2024 2025 to 2024

($ in thousands)

Three Months Ended % Change Six Months Ended % Change

May 31, 2025 May 31, 2024 2025 to 2024

($ in thousands) ($ in thousands)

Selling, general and administrative expenses

3 unchanged sentences

Selling, general and administrative expenses also include the cost of our global delivery facilities, utility expenses, hardware and software costs related to our technology infrastructure, legal and professional fees, depreciation on our technology and facility equipment, amortization of intangible assets resulting from acquisitions, marketing expenses, and acquisition-related and integration expenses.

Our selling, general and administrative expenses decreased by 3.0% in the three months ended February 28, 2025, compared to the three months ended February 29, 2024.

Our selling, general and administrative expenses decreased by 1.1% in the three months ended May 31, 2025, compared to the three months ended May 31, 2024.

Contributing to the decrease was a reduction in acquisition-related and integration expenses of approximately $14.1 million and a reduction of $0.7 million in selling, general and administrative expenses due to changes in foreign currency exchange rates.

As a percentage of revenue, selling, general and administrative expenses decreased from 29.7% in the second fiscal quarter of 2024 to 28.9% in the second fiscal quarter of 2025, primarily due to lower acquisition-related and integration expenses.

Our selling, general and administrative expenses decreased by 2.0% in the six months ended May 31, 2025, compared to the six months ended May 31, 2024.

Contributing to the decrease was a $22.9 million reduction in selling, general and administrative expenses due to changes in foreign currency exchange rates.

As a percentage of revenue, selling, general and administrative expenses decreased from 29.5% in the first fiscal quarter of 2024 to 29.0% in the first fiscal quarter of 2025 primarily due to changes in foreign currency exchange rates.

As a percentage of revenue, selling, general and administrative expenses decreased from 29.6% in the second fiscal quarter of 2024 to 29.0% in the second fiscal quarter of 2025 primarily due to changes in foreign currency exchange rates.

Operating Income

Three Months Ended % Change

February 28, 2025 February 29, 2024 2025 to 2024

($ in thousands)

Three Months Ended % Change Six Months Ended % Change

May 31, 2025 May 31, 2024 2025 to 2024

($ in thousands) ($ in thousands)

Operating income $ 148,345 $ 150,170 (1.2)% $ 317,212 $ 298,609 6.2%

Operating margin 6.1 % 6.3 % 6.6 % 6.2 %

Our operating income increased during the three months ended February 28, 2025, compared to the three months ended February 29, 2024, primarily due to the decrease in selling, general and administrative expenses partially offset by a decrease in gross profit.

Our operating margin in the first quarter of 2025 increased from the first quarter of 2024 due to the decrease in selling, general and administrative expenses as a percentage of revenue and the increase in gross margin percentage.

Our operating income decreased during the three months ended May 31, 2025, compared to the three months ended May 31, 2024, primarily due to the decrease in gross profit partially offset by the decrease in selling, general and administrative expenses.

Our operating margin decreased during the three months ended May 31, 2025, compared to the three months ended May 31, 2024, due to the decrease in gross margin percentage partially offset by the decrease in selling, general and administrative expenses as a percentage of revenue.

Our operating income increased during the six months ended May 31, 2025, compared to the six months ended May 31, 2024, primarily due to the decrease in selling, general and administrative expenses partially offset by the decrease in gross profit.

Our operating margin increased during the six months ended May 31, 2025, compared to the six months ended May 31, 2024, due to the decrease in selling, general and administrative expenses as a percentage of revenue partially offset by the decrease in gross margin percentage.

Interest Expense and Finance Charges, Net

Three Months Ended % Change

February 28, 2025 February 29, 2024 2025 to 2024

($ in thousands)

Three Months Ended % Change Six Months Ended % Change

May 31, 2025 May 31, 2024 2025 to 2024

($ in thousands) ($ in thousands)

Interest expense and finance charges, net $ 75,406 $ 82,457 (8.6)% $ 148,400 $ 164,896 (10.0)%

1 unchanged sentence

Amounts recorded in interest expense and finance charges, net consist primarily of interest expense on our senior notes issued in August 2023, interest expense on term loan borrowings under our senior credit facility, interest expense on borrowings under our accounts receivable securitization facility (the “Securitization Facility”), and interest expense on the promissory note issued by us to certain Sellers in connection with the Webhelp Combination (the “Sellers’ Note”).

The decrease in interest expense and finance charges, net for the three months ended February 28, 2025, compared to the three months ended February 29, 2024, was primarily due to a decrease in interest expense on our term loan borrowings under our senior credit facility of $11.7 million.

The decrease in interest expense and finance charges, net for the three months ended May 31, 2025, compared to the three months ended May 31, 2024, was primarily due to a decrease in interest expense on our term loan borrowings under our senior credit facility of $9.2 million.

The decrease is a result of the decrease in outstanding borrowings and a decrease in the effective interest rate on the borrowings.

The decrease was partially offset by an increase in interest expense on our Securitization Facility of $1.6 million primarily due to the increase in outstanding borrowings in comparison to the prior year period.

The decrease in interest expense and finance charges, net for the six months ended May 31, 2025, compared to the six months ended May 31, 2024, was primarily due to a decrease in interest expense on our term loan borrowings under our senior credit facility of $20.9 million.

The decrease is a result of the decrease in outstanding borrowings and a decrease in the effective interest rate on the borrowings.

The decrease was partially offset by an increase in interest expense on our Securitization Facility of $3.8 million primarily due to the increase in outstanding borrowings in comparison to the prior year period.

Other Expense (Income), Net

Three Months Ended % Change

February 28, 2025 February 29, 2024 2025 to 2024

($ in thousands)

Three Months Ended % Change Six Months Ended % Change

May 31, 2025 May 31, 2024 2025 to 2024

($ in thousands) ($ in thousands)

Other expense (income), net $ 21,218 $ (19,415) (209.3)% $ 16,299 $ (26,239) (162.1)%

1 unchanged sentence

Amounts recorded as other expense (income), net primarily include foreign currency transaction gains and losses other than cash flow hedges, investment gains and losses, the non-service component of pension costs, other non-operating gains and losses, and changes in acquisition contingent consideration related to the Webhelp Combination.

Other expense (income), net in the three months ended February 28, 2025 was income of $4.9 million, compared to income of $6.8 million in the three months ended February 29, 2024.

The change in other expense (income), net over the prior fiscal year period was primarily due to a decrease in income of $12.9 million related to the change in acquisition contingent consideration associated with the Webhelp Combination partially offset by net foreign currency gains of $10.8 million.

Other expense (income), net for the three months ended May 31, 2025 was an expense of $21.2 million, compared to income of $19.4 million for the three months ended May 31, 2024.

The change in other expense (income), net over the prior fiscal year period was primarily due to an increase in net expense of $15.4 million related to the change in acquisition contingent consideration associated with the Webhelp Combination and net changes in foreign currency losses of $25.2 million.

Other expense (income), net for the six months ended May 31, 2025 was an expense of $16.3 million, compared to income of $26.2 million for the six months ended May 31, 2024.

The change in other expense (income), net over the prior fiscal year period was primarily due to an increase of net expense of $28.3 million related to the change in acquisition contingent consideration associated with the Webhelp Combination and net changes in foreign currency losses of $14.4 million.

Provision for Income Taxes

Three Months Ended % Change

February 28, 2025 February 29, 2024 2025 to 2024

($ in thousands)

Three Months Ended % Change Six Months Ended % Change

May 31, 2025 May 31, 2024 2025 to 2024

($ in thousands) ($ in thousands)

Provision for income taxes $ 9,628 $ 20,294 (52.6)% $ 40,163 $ 41,016 (2.1)%

1 unchanged sentence

Our provision for income taxes consists of our current and deferred tax expense resulting from our income earned in domestic and international jurisdictions.

Our provision for income taxes increased in the three months ended February 28, 2025, compared to the three months ended February 29, 2024, primarily due to an increase in income before taxes and income tax expense of $4.3 million related to certain tax law changes, primarily in France.

The effective tax rate for the three months ended February 28, 2025 increased compared to the three months ended February 29, 2024, primarily due to the tax law changes and a change in the mix of income earned in different tax jurisdictions between periods.

Our provision for income taxes decreased for the three months ended May 31, 2025, compared to the three months ended May 31, 2024, primarily due to a decrease in income before taxes and a decrease in the effective tax rate.

The effective tax rate for the three months ended May 31, 2025 decreased compared to the three months ended May 31, 2024, primarily due to certain discrete items and a change in the mix of income earned in different tax jurisdictions between periods.

Our provision for income taxes decreased for the six months ended May 31, 2025, compared to the six months ended May 31, 2024, primarily due to a decrease in income before taxes.

The effective tax rate for the six months ended May 31, 2025 increased compared to the six months ended May 31, 2024, primarily due to a change in the mix of income earned in different tax jurisdictions between periods.

Certain Non-GAAP Financial Information

4 unchanged sentences

• Adjusted EBITDA margin, which is adjusted EBITDA, as defined above, divided by revenue.

• Non-GAAP net income, which is net income excluding the tax effected impact of acquisition-related and integration expenses, including related restructuring costs, step-up depreciation, amortization of intangible assets, share-based compensation, imputed interest related to the Sellers’ Note, change in acquisition contingent consideration and foreign currency losses (gains), net.

• Non-GAAP net income, which is net income excluding the tax effected impact of acquisition-related and integration expenses, including related restructuring costs, step-up depreciation, amortization of intangible assets, share-based compensation, certain debt costs, imputed interest related to the Sellers’ Note, certain legal settlement costs, change in acquisition contingent consideration and foreign currency losses (gains), net.

Non-GAAP net income also excludes the income tax effect of certain tax law changes.

4 unchanged sentences

For example, free cash flow and adjusted free cash flow do not incorporate payments for business acquisitions.

• Non-GAAP diluted earnings per common share (“EPS”), which is diluted EPS excluding the per share, tax effected impact of acquisition-related and integration expenses, including related restructuring costs, step-up depreciation, amortization of intangible assets, share-based compensation, imputed interest related to the Sellers’ Note, change in acquisition contingent consideration and foreign currency losses (gains), net.

• Non-GAAP diluted earnings per common share (“EPS”), which is diluted EPS excluding the per share, tax effected impact of acquisition-related and integration expenses, including related restructuring costs, step-up depreciation, amortization of intangible assets, share-based compensation, certain debt costs, imputed interest related to the Sellers’ Note, certain legal settlement costs, change in acquisition contingent consideration and foreign currency losses (gains), net.

Non-GAAP EPS also excludes the per share income tax effect of certain tax law changes.

13 unchanged sentences

Given the subjective assumptions and the variety of award types that companies can use when calculating share-based compensation expense, management believes this additional information allows investors to make additional comparisons between our operating results and those of our peers.

As these non-GAAP financial measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies.

These non-GAAP

financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

Three Months Ended

February 28, 2025 February 29, 2024

As these non-GAAP financial measures are not calculated in accordance with

GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies.

These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

Three Months Ended Six Months Ended

May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

($ in thousands, except per share amounts)

3 unchanged sentences

Step-up depreciation

2,536 2,482 4,912 4,983

Amortization of intangibles 109,158 115,969 214,777 232,271

8 unchanged sentences

Step-up depreciation

2,536 2,482 4,912 4,983

Amortization of intangibles 109,158 115,969 214,777 232,271

10 unchanged sentences

Step-up depreciation

2,536 2,482 4,912 4,983

Debt costs (2)

1,102 — 1,102 —

Imputed interest related to Sellers' Note included in interest expense and finance charges, net 4,503 4,179 8,689 8,357

Legal settlement costs (3)

2,000 — 2,000 —

Change in acquisition contingent consideration included in other expense (income), net 8,691 (6,689) 6,667 (21,586)

7 unchanged sentences

Non-GAAP net income $ 179,611 $ 183,099 $ 367,747 $ 360,810

Three Months Ended

February 28, 2025 February 29, 2024

Three Months Ended Six Months Ended

May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

($ in thousands, except per share amounts)

1 unchanged sentence

Acquisition-related and integration expenses (1)

0.25 0.45 0.52 0.90

Step-up depreciation

0.04 0.04 0.07 0.07

Debt costs (2)

0.02 — 0.02 —

Imputed interest related to Sellers' Note included in interest expense and finance charges, net 0.07 0.06 0.13 0.12

Legal settlement costs (3)

0.03 — 0.03 —

Change in acquisition contingent consideration included in other expense (income), net 0.13 (0.10) 0.10 (0.32)

Foreign currency losses (gains), net (4)

0.16 (0.21) 0.10 (0.11)

Amortization of intangibles 1.64 1.71 3.21 3.41

4 unchanged sentences

Non-GAAP Diluted EPS $ 2.70 $ 2.69 $ 5.49 $ 5.29

(1) For the three months ended February 28, 2025 and February 29, 2024, acquisition-related and integration expenses, including restructuring costs, primarily included integration costs associated with the Company’s combination with Webhelp.

(1) For the three and six months ended May 31, 2025 and 2024, acquisition-related and integration expenses, including restructuring costs, primarily included integration costs associated with the Company’s combination with Webhelp.

These costs primarily include severance and employee-related costs, costs associated with facilities consolidation, including lease terminations to integrate the businesses, and information technology system consolidation costs.

(2) For the three and six months ended May 31, 2025, debt costs included debt extinguishment costs associated with our Restated Credit Agreement and our voluntary prepayment of a portion of our outstanding term loans.

(3) For the three and six months ended May 31, 2025, legal settlement costs consist of amounts incurred to settle certain litigation arising outside of the ordinary course of business.

(4) Foreign currency losses (gains), net are included in other expense (income), net and primarily consist of gains and losses recognized on the revaluation and settlement of foreign currency transactions and realized and unrealized gains and losses on derivative contracts that do not qualify for hedge accounting.

14 unchanged sentences

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

During the three months ended February 28, 2025 and February 29, 2024, we repurchased 539,802 and 237,105 shares, respectively, of our common stock under the share repurchase program for approximately $25.8 million and $21.7 million, respectively, in the aggregate.

At February 28, 2025, approximately $582.3 million remained available for share repurchases under the existing authorization from our board of directors.

During March 2025, we repurchased 315,684 shares of our common stock under the share repurchase program for an aggregate purchase price of $14.5 million.

During the three and six months ended May 31, 2025, we repurchased 923,899 and 1,463,701 shares, respectively, of our common stock under the share repurchase program for approximately $45.3 million and $71.2 million, respectively, in the aggregate.

During the three and six months ended May 31, 2024, we repurchased 662,580 and 899,685 shares, respectively, of our common stock under the share repurchase program for approximately $40.6 and $62.3 million, respectively, in the aggregate.

At May 31, 2025, approximately $537.0 million remained available for share repurchases under the existing authorization from our board of directors.

During June 2025, we repurchased 221,842 shares of our common stock under the share repurchase program for an aggregate purchase price of $12.2 million.

During fiscal years 2025 and 2024, we paid the following dividends per share approved by our board of directors:

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January 15, 2025 January 31, 2025 $0.33275 February 11, 2025

On March 26, 2025, we announced a cash dividend of $0.33275 per share to stockholders of record as of the close of business on April 25, 2025, payable on May 6, 2025.

March 26, 2025 April 25, 2025 $0.33275 May 6, 2025

On June 26, 2025, we announced a cash dividend of $0.33275 per share to stockholders of record as of the close of business on July 25, 2025, payable on August 5, 2025.

We expect that future cash dividends will be paid on a quarterly basis.

However, any decision to pay future cash dividends will be subject to our board of directors’ approval, and will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt agreements, industry practice, legal requirements, regulatory constraints, and other factors that our board of directors deems relevant.

Our ability to pay dividends will depend on our ongoing

ability to generate cash from operations and on our access to the capital markets.

Our ability to pay dividends will depend on our ongoing ability to generate cash from operations and on our access to the capital markets.

We cannot guarantee that we will continue to pay a dividend in the future.

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

Restated Credit Facility

On April 21, 2023, we 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 our prior credit agreement dated as of October 16, 2020 (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 $1,042.5 million.

The Restated Credit Facility also provides for a senior unsecured term loan facility in an aggregate principal amount not to exceed approximately $2,144.7 million (the “Term Loan”), of which $1,850 million was incurred upon the amendment and approximately $294.7 million was drawn on a delayed draw basis (the “Delayed Draw Term Loans”) on the closing date of the Webhelp Combination.

Aggregate borrowing capacity under the Restated Credit Facility may be increased by up to an additional $500 million 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.

As of both February 28, 2025 and November 30, 2024, the outstanding principal balance on the Term Loan was $1,500 million.

During the three months ended February 29, 2024, we voluntarily prepaid $100 million of the principal balance on the Term Loan without penalty.

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 our prior notice to the lenders and the agreement of the lenders to extend such maturity date.

Due to voluntary prepayments, no principal payment on the term loans is due until the remaining 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 our 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 our 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 our ability to take certain actions, including the creation of liens, mergers or consolidations, changes to the nature of our business, and, solely with respect to our subsidiaries, incurrence of indebtedness.

In addition, the Restated Credit Facility contains financial covenants that require us 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, 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.

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

None of our subsidiaries guarantees the obligations under the Restated Credit Facility.

At February 28, 2025 and November 30, 2024, no amounts were outstanding under our revolving credit facility.

Restated Credit Agreement

On April 11, 2025, we entered into an Amendment and Restatement Agreement (the “Amendment Agreement”) with the lenders party thereto, Bank of America, N.A., as the administrative agent, the L/C issuer and the swing line lender, and JPMorgan Chase Bank, N.A., as the existing administrative agent, the existing L/C issuer and the existing swing line lender, to amend and restate the Company’s Amended and Restated Credit Agreement dated as of April 21, 2023 (the “Existing Credit Agreement” and, as so amended and restated by the Amendment Agreement, the “Restated Credit Agreement”).

The Amendment Agreement appoints Bank of America, N.A.

as the Administrative Agent under the Restated Credit Agreement, as successor to JPMorgan Chase Bank, N.A.

The Restated Credit Agreement provides for (i) an unsecured three-year term loan facility in an aggregate principal amount not to exceed $750 million (the “New Term Loan Facility”), (ii) an unsecured three-year delayed draw term loan facility in an aggregate principal amount not to exceed $250 million (the “3-Year DD Term Loan Facility”), (iii) an unsecured five-year delayed draw term loan facility in an aggregate principal amount not to exceed $500 million (the “5-Year DD Term Loan Facility”, and together with the 3-Year DD Term Loan Facility, the “Delayed Draw Term Loans”), and (iv) a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $1.1 billion (the “Revolving Credit Facility”).

The Restated Credit Agreement also provides for the conversion and continuation of loans in an aggregate principal amount of $750 million under our existing unsecured term loan facility pursuant to the Existing Credit Agreement into loans under an unsecured term loan facility with the same maturity as such converted and continued loans (the “Continued Term Loan Facility”).

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

The maturity date of the New Term Loan Facility and the 3-Year DD Term Loan Facility is September 30, 2028.

The maturity date of the 5-Year DD Term Loan Facility and the Revolving Credit Facility is April 11, 2030, subject, in the case of the Revolving Credit Facility, to two one-year extensions upon our prior notice to the lenders and the agreement of the lenders to extend such maturity date.

The maturity date of the Continued Term Loan Facility remains December 27, 2026.

The outstanding principal amount of each of the New Term Loan Facility and the Delayed Draw Term Loans is payable in quarterly installments in an amount equal to 1.25% of the existing principal balance of the applicable term loan, commencing on September 30, 2025, in the case of the New Term Loan Facility, and on the last day of the second full calendar quarter after the Delayed Draw Term Loans are borrowed, in the case of the Delayed Draw Term Loans, with the outstanding principal amount of the New Term Loan Facility, the Delayed Draw Term Loans, and the Continued Term Loan Facility due in full on the applicable maturity date.

Borrowings under the Restated Credit Agreement 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, based on the credit ratings of Concentrix’ senior unsecured non-credit enhanced long-term indebtedness for borrowed money plus a credit spread adjustment to the SOFR rate of 0.10%.

The applicable margin ranges from 1.000% to 1.500% for the New Term Loan Facility and the 3-Year DD Term Loan Facility, 1.100% to 1.600% for the 5-Year DD Term Loan Facility, 1.125% to 2.000% for the Continued Term Loan Facility, and 0.875% to 1.500% for the Revolving Credit Facility.

Borrowings under the Restated Credit Agreement 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 Agreement) in effect on such day, (B) the Federal Funds Rate (as defined in the Restated Credit Agreement) in effect on such day plus 0.500%, and (C) the adjusted one-month term SOFR rate plus 1.0% per annum, plus (ii) an applicable margin, based on the credit ratings of Concentrix’ senior unsecured non-credit enhanced long-term indebtedness for borrowed money.

The applicable margin ranges from 0.000% to 0.500% for the New Term Loan Facility, the 3-Year DD Term Loan Facility, and the Revolving Credit Facility, 0.100% to 0.600% for the 5-Year DD Term Loan Facility, and 0.125% to 1.000% for the Continued Term Loan Facility.

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

In addition, the Restated Credit Agreement contains financial covenants that require Concentrix to maintain at the end of each fiscal quarter, (i) a consolidated leverage ratio (as defined in the Restated Credit Agreement) not to exceed 3.75 to 1.00 (or for certain periods following certain qualified acquisitions, 4.25 to 1.00) and (ii) a consolidated interest coverage ratio (as defined in the Restated Credit Agreement) no less than 3.00 to 1.00.

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

As of May 31, 2025 and November 30, 2024, the outstanding principal balance on our term loans was $1,350 million and $1,500 million.

During the three and six months ended May 31, 2025, we voluntarily prepaid $150 million of the principal balance on our term loans, without penalty.

None of our subsidiaries guarantees the obligations under the Restated Credit Agreement.

At May 31, 2025 and November 30, 2024, no amounts were outstanding under our revolving credit facility.

Securitization Facility

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For borrowings that are funded by certain lenders through the issuance of commercial paper, the amendment also reduced the spread to the applicable commercial paper rate from 0.80% to 0.75%.

On April 25, 2024, we entered into an amendment to the Securitization Facility to (i) increase the commitment of the lenders to provide available borrowings from up to $500 million to up to $600 million, (ii) extend the termination date of the Securitization Facility from July 5, 2024 to April 24, 2026, and (iii) amend the interest rate margins, such that borrowings under the Securitization Facility that are funded by certain lenders through such lenders’ issuance of commercial paper bear interest at the applicable commercial paper rate plus a spread of 0.80% and, otherwise, at a bank rate that includes a per annum rate equal to the applicable SOFR rate (subject to a SOFR related adjustment of 0.10%), plus a spread of 0.90%.

Other borrowings bear interest at a per annum rate equal to the applicable SOFR rate (subject to a SOFR related adjustment of 0.10%), plus a spread of 0.90%.

Under the Securitization Facility, Concentrix Corporation and certain of its U.S.

based subsidiaries sell or otherwise transfer all of their accounts receivable to a special purpose bankruptcy-remote subsidiary of Concentrix Corporation that grants a security interest in the receivables to the lenders in exchange for available borrowings of up to $700 million.

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

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

Borrowing availability under the

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

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

Sellers’ Note

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

Amounts outstanding under the Sellers’ Note have been classified as long-term debt within the consolidated balance sheet based on our ability and intent to refinance on a long-term basis as of February 28, 2025 and November 30, 2024.

As of February 28, 2025 and November 30, 2024, we were in compliance with the debt covenants related to our debt arrangements.

Cash Flows – Three Months Ended February 28, 2025 and February 29, 2024

The following summarizes our cash flows for the three months ended February 28, 2025 and February 29, 2024, as reported in our consolidated statement of cash flows in the accompanying consolidated financial statements.

Three Months Ended

February 28, 2025 February 29, 2024

We currently intend to use the proceeds of the Delayed Draw Term Loans, when drawn, to repay in full the Sellers’ Note.

As a result, the amount outstanding on the Sellers’ Note has been classified as long-term debt within the consolidated balance sheet as of May 31, 2025.

The amount outstanding on the Sellers’ Note as of November 30, 2024 was also classified as long-term debt within the consolidated balance sheet based on the Company’s ability and intent to refinance on a long-term basis.

As of May 31, 2025 and November 30, 2024, we were in compliance with the debt covenants related to our debt arrangements.

Cash Flows – Six Months Ended May 31, 2025 and 2024

The following summarizes our cash flows for the six months ended May 31, 2025 and 2024, as reported in our consolidated statement of cash flows in the accompanying consolidated financial statements.

Six Months Ended

May 31, 2025 May 31, 2024

($ in thousands)

Net cash provided by (used in) operating activities

Net cash provided by operating activities

$ 237,944 $ 191,469

Net cash used in investing activities (107,073) (120,649)

Net cash provided by financing activities

Net cash used in financing activities

(46,600) (183,276)

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Operating Activities

Net cash provided by operating activities was $1.4 million for the three months ended February 28, 2025, compared to net cash used in operating activities of $46.9 million for the three months ended February 29, 2024.

The change over the prior year period was primarily due to favorable changes in working capital and an increase in net income.

Net cash provided by operating activities was $237.9 million for the six months ended May 31, 2025, compared to $191.5 million for the six months ended May 31, 2024.

The change over the prior year period was primarily due to favorable working capital changes and less cash required for acquisition-related and integration expenses.

Investing Activities

Net cash used in investing activities for the three months ended February 28, 2025 was $51.3 million, compared to $60.6 million for the three months ended February 29, 2024.

Net cash used in investing activities for the six months ended May 31, 2025 was $107.1 million, compared to $120.6 million for the six months ended May 31, 2024.

The decrease in net cash used in investing activities over the prior year period primarily related to a decrease in capital expenditures.

Financing Activities

Net cash provided by financing activities for the three months ended February 28, 2025 was $102.3 million, consisting of net borrowings under our Securitization Facility of $181 million partially offset by share repurchases of $25.8 million, dividends paid of $22.4 million, a deferred acquisition consideration payment of $3.5 million, and a change in funds held for clients of $20.5 million.

Net cash provided by financing activities for the three months ended February 29, 2024 was $14.4 million, consisting primarily of net borrowings of $197.5 million under our Securitization Facility partially offset by principal payments of $100.0 million made on term loan borrowings under our senior credit facility, share repurchases of $21.7 million, a change in funds held for clients of $37.9 million, and dividends of $20.6 million.

Net cash used in financing activities for the six months ended May 31, 2025 was $46.6 million, primarily consisting of net principal payments of $150.0 million on the term loans, share repurchases of $71.2 million, dividends paid of $44.5 million, change in funds held for clients of $8.8 million, payments on other borrowings of $6.0 million, debt issuance costs of $4.8 million, a deferred acquisition consideration payment of $6.5 million, all partially offset by net borrowings under our Securitization Facility of $247.0 million.

Net cash used by financing activities for the six months ended May 31, 2024 was $183.3 million, consisting of principal payments of $250.0 million made on term loan borrowings under our senior credit facility, cash paid for acquired earnout liabilities of $22.7 million, share repurchases of $62.3 million, a change in funds held for clients of $30.6 million, and dividends of $41.0 million, partially offset by net borrowings of $223.0 million under our Securitization Facility.

Free Cash Flow and Adjusted Free Cash Flow (non-GAAP measures)

Three Months Ended

February 28, 2025 February 29, 2024

Six Months Ended

May 31, 2025 May 31, 2024

($ in thousands)

Net cash provided by (used in) operating activities

Net cash provided by operating activities

$ 237,944 $ 191,469

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Change in outstanding factoring balances

28,936 45,258

Adjusted free cash flow (a non-GAAP measure)

$ 160,470 $ 120,582

Our free cash flow was a use of cash of $49.2 million for the three months ended February 28, 2025 compared to a use of cash of $102.9 million for the three months ended February 29, 2024.

The increase in free cash flow for the three months ended February 28, 2025 compared to the prior fiscal year period was due to the increase in cash provided by operating activities and a decrease in capital expenditures.

Our adjusted free cash flow was a use of cash of $39.8 million for the three months ended February 28, 2025 compared to a use of cash of $81.3 million for the three months ended February 29, 2024.

The increase in adjusted free cash flow for the three months ended February 28, 2025 compared to the prior year period was due to an increase in free cash flow partially offset by a decrease in the change in outstanding factoring balances.

Our free cash flow was $131.5 million for the six months ended May 31, 2025 compared to $75.3 million for the six months ended May 31, 2024.

The increase in free cash flow for the six months ended May 31, 2025 compared to the prior fiscal year period was due to the increase in cash provided by operating activities and a decrease in capital expenditures.

Our adjusted free cash flow was $160.5 million for the six months ended May 31, 2025 compared to $120.6 million for the six months ended May 31, 2024.

The increase in adjusted free cash flow for the six months ended May 31, 2025 compared to the prior year period was due to an increase in free cash flow partially offset by a decrease in the change in outstanding factoring balances.

Capital Resources

As of February 28, 2025, we had total liquidity of $1,498.5 million, which includes undrawn capacity on our revolving credit facility of $1,042.5 million, undrawn capacity of $148.0 million under our Securitization Facility, and cash and cash equivalents.

Our cash and cash equivalents totaled $308.0 million and $240.6 million as of February 28, 2025 and November 30, 2024, respectively.

As of May 31, 2025, we had total liquidity of $1,524.8 million, which includes undrawn capacity on our revolving credit facility of $1,100.0 million, undrawn capacity of $82.0 million under our Securitization Facility, and cash and cash equivalents.

Our cash and cash equivalents totaled $342.8 million and $240.6 million as of May 31, 2025 and November 30, 2024, respectively.

Of our total cash and cash equivalents, 99% were held by our non-U.S.

legal entities as of both February 28, 2025 and November 30, 2024.

legal entities as of both May 31, 2025 and November 30, 2024.

The cash and cash equivalents held by our non-U.S.

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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 2. Management’s Discussion and Analysis