What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-04-08 compared with 2025-01-10 · 165 added, 110 removed, 283 unchanged (49% of the section changed)

8 unchanged sentences

We conduct our operations in facilities that are located worldwide, including but not limited to, China, Mexico, Singapore, Malaysia, and the United States.

We derived a substantial majority, 80.8% of net revenue from our international operations for the three months ended November 30, 2024.

We derived a substantial majority, 77.0% and 78.9% of net revenue, from our international operations for the three months and six months ended February 28, 2025, respectively.

Our global manufacturing production sites allow customers to manufacture products simultaneously in the optimal locations for their products.

8 unchanged sentences

“Management's Discussion and Analysis of Financial Condition and Results of Operations” section contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, for further discussion of the items disclosed in Item 2.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" section as of November 30, 2024, contained herein.

“Management's Discussion and Analysis of Financial Condition and Results of Operations” section as of February 28, 2025, contained herein.

Summary of Results

The following table sets forth, for the periods indicated, certain key operating results and other financial information (in millions, except per share data):

Three months ended

November 30, 2024 November 30, 2023

Three months ended Six months ended

February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Net revenue $ 6,728 $ 6,767 $ 13,722 $ 15,154

2 unchanged sentences

Net income attributable to Jabil Inc.

$ 117 $ 927 $ 217 $ 1,121

Earnings per share – basic $ 1.07 $ 7.41 $ 1.95 $ 8.80

7 unchanged sentences

Three months ended

November 30, 2024 August 31, 2024

November 30, 2023

February 28, 2025 November 30, 2024

February 29, 2024

Sales cycle (1)

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(3) Days in accounts receivable is calculated as accounts receivable, net, divided by net revenue multiplied by 90 days.

During the three months ended November 30, 2024, the increase in days in accounts receivable from the prior sequential quarter and the three months ended November 30, 2023, was primarily driven by timing of payments.

During the three months ended February 28, 2025, the increase in days in accounts receivable from the prior sequential quarter and the three months ended February 29, 2024, was primarily driven by timing of payments.

(4) Days in inventory is calculated as inventories, net and contract assets divided by cost of revenue multiplied by 90 days.

During the three months ended November 30, 2024, the decrease in days in inventory from the three months ended November 30, 2023, was primarily driven by higher consumption of inventory to support sales during the quarter and improved working capital management.

During the three months ended February 28, 2025, the increase in days in inventory from the prior sequential quarter was primarily driven by the timing of sales.

During the three months ended February 28, 2025, the decrease in days in inventory from the three months ended February 29, 2024, was primarily driven by higher consumption of inventory to support sales during the quarter and improved working capital management.

(5) Days in accounts payable is calculated as accounts payable divided by cost of revenue multiplied by 90 days.

During the three months ended November 30, 2024, the increase in days in accounts payable from the prior sequential quarter and the three months ended November 30, 2023, was primarily due to higher purchases of customer-controlled consignment components and timing of cash payments.

During the three months ended February 28, 2025, the increase in days in accounts payable from the three months ended February 29, 2024, was primarily due to higher purchases of customer-controlled consignment components and timing of cash payments.

Critical Accounting Policies and Estimates

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In conjunction with this reorganization, there have been certain reclassifications made within the reported segments.

Three months ended

(dollars in millions) November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

(dollars in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Net revenue $ 6,728 $ 6,767 (0.6) % $ 13,722 $ 15,154 (9.4) %

Net revenue decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023.

Specifically, the Connected Living and Digital Commerce segment net revenue decreased 46% due to a 50% decrease in revenues primarily driven by the divestiture of our Mobility Business within our connected living business.

Net revenue decreased during the three months ended February 28, 2025, compared to the three months ended February 29, 2024.

Specifically, the Connected Living and Digital Commerce segment net revenue decreased 13% due to an 18% decrease in revenues primarily driven by the divestiture of the Mobility Business within our connected living business.

The decrease is partially offset by a 5% increase in revenues from existing customers within our digital commerce business.

The Regulated Industries segment net revenue decreased 8% primarily due to:

(i) a 6% decrease in revenues from existing customers within our renewable energy infrastructure business and (ii) a 1% decrease in revenues from existing customers within our automotive and transportation business.

(i) a 5% decrease in revenues from existing customers within our automotive and transportation business and (ii) a 3% decrease in revenues from existing customers within our healthcare and packaging business.

The Intelligent Infrastructure segment net revenue increased 18% primarily due to:

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The increase is partially offset by a 10% decrease in revenues from existing customers within our networking and communications business.

Net revenue decreased during the six months ended February 28, 2025, compared to the six months ended February 29, 2024.

Specifically, the Connected Living and Digital Commerce segment net revenue decreased 34% due to a 38% decrease in revenues primarily driven by the divestiture of the Mobility Business within our connected living business.

The decrease is partially offset by a 4% increase in revenues from existing customers within our digital commerce business.

The Regulated Industries segment net revenue decreased 8% primarily due to:

(i) a 4% decrease in revenues from existing customers within our renewable energy infrastructure business, (ii) a 3% decrease in revenues from existing customers within our automotive and transportation business, and (iii) a 1% decrease in revenues from existing customers within our healthcare and packaging business.

The Intelligent Infrastructure segment net revenue increased 12% primarily due to:

(i) a 16% increase in revenues from existing customers within our cloud and data center infrastructure business and (ii) a 8% increase in revenues from existing customers within our capital equipment business.

The increase is partially offset by a 12% decrease in revenues from existing customers within our networking and communications business.

The following table sets forth, for the periods indicated, revenue by segment expressed as a percentage of net revenue:

Three months ended

November 30, 2024 November 30, 2023

Three months ended Six months ended

February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Regulated Industries 41 % 44 % 42 % 41 %

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The following table sets forth, for the periods indicated, foreign source revenue expressed as a percentage of net revenue:

Three months ended

November 30, 2024 (1)

November 30, 2023

Three months ended Six months ended (1)

February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Foreign source revenue 77.0 % 82.5 % 78.9 % 84.7 %

(1) Decrease from the prior period is primarily driven by the divestiture of the Mobility Business during the three months ended February 29, 2024.

Three months ended

(dollars in millions) November 30, 2024 November 30, 2023

Three months ended Six months ended

(dollars in millions) February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Gross profit $ 576 $ 630 $ 1,182 $ 1,405

Percent of net revenue 8.6 % 9.3 % 8.6 % 9.3 %

Gross profit as a percentage of net revenue decreased for the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to product mix in our Connected Living and Digital Commerce segment.

Gross profit as a percentage of net revenue decreased for the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024, primarily due to product mix in our Connected Living and Digital Commerce segment.

Selling, General and Administrative

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

(in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Selling, general and administrative $ 256 $ 308 $ (52) $ 561 $ 622 $ (61)

Selling, general and administrative expenses decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to a decrease in office and support costs.

Selling, general and administrative expenses decreased during the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024, primarily due to a decrease in salary and salary related expenses.

Research and Development

Three months ended

(dollars in millions) November 30, 2024 November 30, 2023

Three months ended Six months ended

(dollars in millions) February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Research and development $ 7 $ 10 $ 15 $ 20

Percent of net revenue 0.1 % 0.1 % 0.1 % 0.1 %

Research and development expenses remained consistent as a percentage of net revenue during the three months ended November 30, 2024, compared to the three months ended November 30, 2023.

Research and development expenses remained consistent as a percentage of net revenue during the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024.

Amortization of Intangibles

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

(in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Amortization of intangibles $ 15 $ 9 $ 6 $ 28 $ 15 $ 13

Amortization of intangibles increased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to amortization related to the Green Point trade name, which was reclassified to a definite-lived intangible asset during fiscal year 2024.

Amortization of intangibles increased during the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024, primarily due to (i) amortization related to the Green Point trade name, which was reclassified to a definite-lived intangible asset during fiscal year 2024 and (ii) additional amortization associated with intangible assets related to the acquisitions of Mikros Technologies LLC and Pharmaceutics International, Inc.

that occurred during the first and second quarters of fiscal year 2025.

Restructuring, Severance and Related Charges

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

(in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Restructuring, severance and related charges $ 45 $ 70 $ (25) $ 128 $ 197 $ (69)

Restructuring, severance, and related charges decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to higher restructuring, severance and related charges, related to the 2024 Restructuring Plan, during the three months ended November 30, 2023.

This current quarter decrease is partially offset by increased restructuring, severance and related charges, related to the 2025 Restructuring Plan, during the three months ended November 30, 2024.

Restructuring, severance, and related charges decreased during the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024, primarily due to higher restructuring, severance and related charges, related to the 2024 Restructuring Plan, during the three months and six months ended February 29, 2024.

The decrease is partially offset by increased restructuring, severance and related charges, related to the 2025 Restructuring Plan, during the three months and six months ended February 28, 2025.

2025 Restructuring Plan

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2024 Restructuring Plan

On September 26, 2023, our Board of Directors approved a restructuring plan to (i) realign our cost base for stranded costs associated with the sale and realignment of our Mobility Business and (ii) optimize our global footprint.

On September 26, 2023, our Board of Directors approved a restructuring plan to (i) realign our cost base for stranded costs associated with the sale and realignment of the Mobility Business and (ii) optimize our global footprint.

This action includes headcount reductions across our SG&A cost base and capacity realignment (the “2024 Restructuring Plan”).

1 unchanged sentence

See Note 14 – “Restructuring, Severance and Related Charges” to the Condensed Consolidated Financial Statements for further discussion of restructuring, severance and related charges.

Gain from the Divestiture of Businesses

Three months ended Six months ended

(in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Gain from the divestiture of businesses $ — $ (944) $ 944 $ — $ (944) $ 944

In the second quarter of fiscal year 2024, we completed the divestiture of the Mobility Business and recorded a pre-tax gain of $944 million.

Certain post-closing adjustments were realized in March 2025, which will result in recognition of a $54 million pre-tax gain during the three months ended May 31, 2025.

See Note 17 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for additional information.

Acquisition and Divestiture Related Charges

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

(in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Acquisition and divestiture related charges $ 8 $ 46 $ (38) $ 8 $ 61 $ (53)

Acquisition and divestiture related charges recorded during the three months ended November 30, 2023, related to transaction and disposal costs incurred in connection with the divestiture of our Mobility Business.

Acquisition and divestiture related charges decreased during the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024, primarily due to transaction and disposal costs incurred in connection with the divestiture of the Mobility Business during fiscal year 2024.

See Note 17 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for additional information.

Other Expense

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

(in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Other expense $ 24 $ 22 $ 2 $ 44 $ 43 $ 1

Other expense remained relatively consistent during the three months ended November 30, 2024, compared to the three months ended November 30, 2023.

Other expense remained relatively consistent during the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024.

Interest Expense, Net

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

(in millions) February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Interest expense, net $ 37 $ 47 $ (10) $ 75 $ 94 $ (19)

Interest expense, net decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, due to lower interest rates and lower borrowings primarily on our credit facilities and commercial paper program.

Interest expense, net decreased during the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024, due to lower interest rates and lower borrowings primarily on our credit facilities and commercial paper program.

Income Tax Expense

Three months ended

November 30, 2024 November 30, 2023 Change

Three months ended Six months ended

February 28, 2025 February 29, 2024 Change February 28, 2025 February 29, 2024 Change

Effective income tax rate 36.2 % 12.7 % 23.5 % 32.7 % 13.6 % 19.1 %

The effective income tax rate differed for the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to:

(i) a change in the jurisdictional mix of earnings, driven in part by decreased income before income taxes in low tax rate jurisdictions for the three months ended November 30, 2024, (ii) an $18 million income tax benefit for the reversal of an unrecognized tax benefit due to a lapse of statute for the three months ended November 30, 2024, (iii) a $19 million income tax benefit for the reversal of an unrecognized tax benefit due to audit closure for the three months ended November 30, 2023, and (iv) an $11 million income tax benefit for the reversal of a portion of the U.S.

valuation allowance related to an acquisition for the three months ended November 30, 2023.

The effective income tax rate differed for the three months and six months ended February 28, 2025, compared to the three months and six months ended February 29, 2024, primarily due to:

(i) a change in the jurisdictional mix of earnings, driven in part by decreased income before income taxes in low tax rate jurisdictions for the three months and six months ended February 28, 2025, (ii) an $18 million income tax benefit for the reversal of an unrecognized tax benefit due to a lapse of statute for the six months ended February 28, 2025, and (iii) the gain from the divestiture of the Mobility Business and corresponding $58 million of income tax expense during the three months ended February 29, 2024.

The Organization for Economic Co-operation and Development (“OECD”) and participating countries continue to work toward the enactment of a 15% global minimum corporate tax rate.

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GAAP Financial Results to Non-GAAP Measures

Three months ended

(in millions, except for per share data) November 30, 2024 November 30, 2023

Three months ended Six months ended

(in millions, except for per share data) February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Operating income (U.S.

$ 245 $ 1,131 $ 442 $ 1,434

Amortization of intangibles 15 9 28 15

1 unchanged sentence

Restructuring, severance and related charges (1)

45 70 128 197

Net periodic benefit cost (2)

Business interruption and impairment charges, net (3)

Gain from the divestiture of businesses (4)

— (944) — (944)

Acquisition and divestiture related charges (4)

2 unchanged sentences

Net income attributable to Jabil Inc.

$ 117 $ 927 $ 217 $ 1,121

Adjustments to operating income 89 (793) 239 (597)

Net periodic benefit cost (2)

— (3) (1) (5)

Adjustments for taxes (5)

6 unchanged sentences

GAAP and Non-GAAP) 111.1 126.9 112.6 129.5

(1) Charges recorded during the three months ended November 30, 2024, and 2023, primarily related to the 2025 Restructuring Plan and 2024 Restructuring Plan, respectively.

(1) Charges recorded during the three months and six months ended February 28, 2025, and February 29, 2024, primarily related to the 2025 Restructuring Plan and 2024 Restructuring Plan, respectively.

(2) We are reclassifying the pension components in other expense to core operating income as we assess operating performance, inclusive of all components of net periodic benefit cost, with the related revenue.

There is no impact to core earnings or diluted core earnings per share for this adjustment.

(3) Charges recorded during the three months ended November 30, 2024, relate primarily to costs associated with damage from Hurricanes Helene and Milton, which impacted our operations in St.

(3) Charges recorded during the six months ended February 28, 2025, relate primarily to costs associated with damage from Hurricanes Helene and Milton, which impacted our operations in St.

Petersburg, Florida and Asheville and Hendersonville, North Carolina.

(4) Tax adjustments for the three months ended November 30, 2023, were partially driven by an income tax benefit for the reversal of an unrecognized tax benefit due to audit closure.

(4) We completed the divestiture of the Mobility Business and recorded a pre-tax gain of $944 million, subject to certain post-closing adjustments that were realized in March 2025.

We incurred transaction and disposal costs in connection with the sale of approximately $46 million and $61 million during the three months and six months ended February 29, 2024, respectively.

(5) Tax adjustments for the three months and six months ended February 29, 2024, were partially driven by an income tax expense associated with the divestiture of the Mobility Business.

Adjusted Free Cash Flow

Three months ended

(in millions) November 30, 2024 November 30, 2023

Six months ended

(in millions) February 28, 2025 February 29, 2024

Net cash provided by operating activities (U.S.

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Fiscal Year 2025

On October 1, 2024, we completed the acquisition of Mikros Technologies LLC for consideration transferred of $63 million.

Mikros Technologies LLC is a leader in the engineering and manufacturing of liquid cooling solutions for thermal management.

On February 3, 2025, we completed the acquisition of Pharmaceutics International, Inc.

(“Pii”) for cash consideration transferred of $307 million.

The final purchase price is subject to adjustment based on certain customary conditions as outlined in the purchase agreement.

Pii is a contract development and manufacturing organization specializing in early stage, clinical, and commercial volume aseptic filling, lyophilization, and oral solid dose manufacturing.

The acquisition will enhance our existing Regulated Industries service offerings, which includes the development and commercial production of auto-injectors, pen injectors, inhalers, and on-body pumps.

The acquisition of Pii was accounted for as a business combination using the acquisition method of accounting.

Assets acquired of $349 million, including $149 million in intangible assets and $132 million in goodwill, and liabilities assumed of $42 million were recorded at their estimated fair values as of the acquisition date.

The preliminary estimates and measurements are subject to change during the measurement period for assets acquired, liabilities assumed, and tax adjustments.

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the Regulated Industries segment.

Goodwill is primarily attributable to expected synergies enabling comprehensive support for customers in drug development, clinical trials, and product commercialization at scale.

The majority of the goodwill is currently not expected to be deductible for income tax purposes.

The results of operations were included in our condensed consolidated financial results beginning on February 3, 2025.

Pro forma information has not been provided as the acquisition of Pii is not deemed to be significant.

On October 1, 2024, we completed the acquisition of Mikros Technologies LLC (“Mikros Technologies”) for consideration transferred of $63 million.

Mikros Technologies is a leader in the engineering and manufacturing of liquid cooling solutions for thermal management.

The final purchase price is subject to adjustment based on certain customary conditions as outlined in the purchase agreement.

The acquisition of Mikros Technologies was accounted for as a business combination using the acquisition method of accounting.

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On December 29, 2023, the Closing Date, we completed the sale of the Mobility Business.

As a result of the transaction, we derecognized net assets of approximately $1.2 billion and recorded a pre-tax gain of $942 million, subject to certain post-closing adjustments that are still being finalized.

As a result of the transaction, we derecognized net assets of approximately $1.2 billion, and recorded a pre-tax gain of $942 million in the fiscal year ended August 31, 2024.

Certain post-closing adjustments were realized in March 2025, which will result in recognition of a $54 million pre-tax gain during the three months ended May 31, 2025.

In addition, we agreed to indemnify BYDE from certain liabilities that may arise post-close that relate to periods prior to the Closing Date.

2 unchanged sentences

Liquidity and Capital Resources

We believe that our level of liquidity sources, which includes cash on hand, available borrowings under our revolving credit facilities and commercial paper program, additional proceeds available under our global asset-backed securitization program and under our uncommitted trade accounts receivable sale programs, cash flows provided by operating activities and access to the capital markets, will be adequate to fund our capital expenditures, the payment of any declared quarterly dividends, any share repurchases under the approved programs, any potential acquisitions, our working capital requirements and our contractual obligations for the next 12 months and beyond.

We believe that our level of liquidity sources, which includes cash on hand, available borrowings under our revolving credit facilities or future facilities and commercial paper program, additional proceeds available under our global asset-backed securitization program and under our uncommitted trade accounts receivable sale programs, cash flows provided by operating activities and access to the capital markets, will be adequate to fund our capital expenditures, the payment of any declared quarterly dividends, any share repurchases under the approved programs, any potential acquisitions, our working capital requirements and our contractual obligations for the next 12 months and beyond.

We continue to assess our capital structure and evaluate the merits of redeploying available cash.

Cash and Cash Equivalents

As of November 30, 2024, we had approximately $2.1 billion in cash and cash equivalents, of which a significant portion was held by our foreign subsidiaries.

Most of our foreign cash and cash equivalents as of November 30, 2024, could be repatriated to the United States without potential tax expense.

As of February 28, 2025, we had approximately $1.6 billion in cash and cash equivalents, of which a significant portion was held by our foreign subsidiaries.

Most of our foreign cash and cash equivalents as of February 28, 2025, could be repatriated to the United States without potential tax expense.

Notes Payable and Credit Facilities

2 unchanged sentences

credit facilities (1)

Borrowings under loans Total notes payable

Total notes payable

and credit facilities

3 unchanged sentences

Other — — 1 — 1 1 — 3

Balance as of November 30, 2024 $ 498 $ 497 $ 594 $ 499 $ 497 $ 297 $ — $ — $ 2,882

Maturity Date Jan 12, 2028 Jan 15, 2030 Jan 15, 2031 Apr 15, 2026 May 15, 2027 Feb 1, 2029 Jan 22, 2026 and Jan 22, 2028 Jul 31, 2026

Balance as of February 28, 2025 $ 498 $ 497 $ 595 $ 499 $ 497 $ 297 $ — $ 2,883

Maturity Date Jan 12, 2028 Jan 15, 2030 Jan 15, 2031 Apr 15, 2026 May 15, 2027 Feb 1, 2029 Jan 22, 2026 and Jan 22, 2028

Original Facility/ Maximum Capacity $500 million

$4.0 billion (1)

(1) As of November 30, 2024, we had $4.0 billion in available unused borrowing capacity under our revolving credit facilities.

(1) As of February 28, 2025, we had $4.0 billion in available unused borrowing capacity under our revolving credit facilities.

The Credit Facility acts as the back-up facility for commercial paper outstanding, if any.

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A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the notes payable and credit facilities and potentially causing acceleration of amounts due under these notes payable and credit facilities.

As of November 30, 2024, and August 31, 2024, we were in compliance with our debt covenants.

As of February 28, 2025, and August 31, 2024, we were in compliance with our debt covenants.

Refer to Note 6 – “Notes Payable and Long-Term Debt” to the Condensed Consolidated Financial Statements for further details.

2 unchanged sentences

In addition, a foreign entity participating in the global asset-backed securitization program sells certain receivables at a discount to conduits administered by an unaffiliated financial institution on a daily basis.

As these accounts receivable are sold without recourse, we do not retain the associated risks following the transfer of such accounts receivable to the respective financial institutions.

We continue servicing the receivables sold and in exchange receive an immaterial servicing fee under the global asset-backed securitization program.

1 unchanged sentence

The special purpose entity in the global asset-backed securitization program is a wholly owned subsidiary of the Company and is included in our Condensed Consolidated Financial Statements.

Certain unsold receivables covering up to the maximum amount of net cash proceeds available under the domestic, or U.S., portion of the global asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as of November 30, 2024.

Effective November 21, 2024, the terms of the global asset-backed securitization program were amended to extend the termination date from November 2024 to January 2025.

Effective January 23, 2025, the terms of the global asset-backed securitization program were amended to extend the termination date from January 2025 to January 2028.

The maximum amount of net cash proceeds available at any one time is $700 million.

During the three months ended November 30, 2024, we sold $1.1 billion of trade accounts receivable, and we received cash proceeds of $1.1 billion.

As of November 30, 2024, we had no available liquidity under our global asset-backed securitization program.

In conjunction with our global asset-backed securitization program, we are required to remit amounts collected as a servicer under the global asset-backed securitization program to a special purpose entity, which in turn sells certain receivables to unaffiliated financial institutions that purchased the receivables.

The outstanding balance of receivables sold and not yet collected on accounts where we have continuing involvement was approximately $368 million and $338 million as of February 28, 2025, and August 31, 2024, respectively.

During the three months and six months ended February 28, 2025, we sold $1.0 billion and $2.0 billion, respectively, of trade accounts receivable, and we received cash proceeds of $1.0 billion and $2.0 billion, respectively.

The receivables that were sold were removed from the Condensed Consolidated Balance Sheets and the cash received was included as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows.

The global asset-backed securitization program requires compliance with several covenants including compliance with the interest ratio and debt to EBITDA ratio of the Credit Facility.

As of November 30, 2024, and August 31, 2024, we were in compliance with all covenants under our global asset-backed securitization program.

As of February 28, 2025, and August 31, 2024, we were in compliance with all covenants under our global asset-backed securitization program.

Refer to Note 7 – “Asset-Backed Securitization Program” to the Condensed Consolidated Financial Statements for further details on the program.

Trade Accounts Receivable Sale Programs

Following is a summary of the trade accounts receivable sale programs with unaffiliated financial institutions.

Following is a summary of the uncommitted trade accounts receivable sale programs with unaffiliated financial institutions.

Under the programs we may elect to sell receivables, and the unaffiliated financial institutions may elect to purchase, at a discount, on an ongoing basis (in millions):

Maximum Amount (1)(2)

Type of Facility Expiration Date

$ 350 Uncommitted

$ 120 Uncommitted

$ 230 Uncommitted

May 4, 2028 (2)

$ 170 Uncommitted

$ 50 Uncommitted

$ 100 Uncommitted

$ 1,200 Uncommitted

$ 250 Uncommitted

$ 100 Uncommitted

$ 75 Uncommitted

January 23, 2025 (2)

(1) Maximum amount of trade accounts receivable that may be sold under a facility at any one time.

(2) Any party may elect to terminate the agreement upon 30 days prior notice.

(3) Any party may elect to terminate the agreement upon 15 days prior notice.

During the three months ended November 30, 2024, we sold $1.7 billion of trade accounts receivable under these programs and we received cash proceeds of $1.7 billion.

As of November 30, 2024, we had up to $1.8 billion in available liquidity under our trade accounts receivable sale programs.

(2) The trade accounts receivable sale programs either expire on various dates through 2028 or do not have expiration dates and may be terminated upon election of the Company or the unaffiliated financial institutions.

In conjunction with our trade accounts receivable sale programs, we are required to remit amounts collected as a servicer under the trade accounts receivable sale programs to the unaffiliated financial institutions that purchased the receivables.

The outstanding balance of receivables sold and not yet collected on accounts where we have continuing involvement was approximately $571 million and $367 million as of February 28, 2025, and August 31, 2024, respectively.

During the three months and six months ended February 28, 2025, we sold $2.0 billion and $3.7 billion, respectively, of trade accounts receivable under these programs and we received cash proceeds of $2.0 billion and $3.7 billion, respectively.

The following table sets forth selected consolidated cash flow information (in millions):

Three months ended

November 30, 2024 November 30, 2023

Six months ended

February 28, 2025 February 29, 2024

Net cash provided by operating activities

Net cash used in investing activities

Net cash (used in) provided by investing activities

Net cash used in financing activities

(746) (1,455)

Effect of exchange rate changes on cash and cash equivalents (6) (7)

Net decrease in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

$ (609) $ 762

Operating Activities

Net cash provided by operating activities during the three months ended November 30, 2024, was primarily due to an increase in accounts payable, accrued expense and other liabilities and non-cash expenses and net income.

Net cash provided by operating activities was partially offset by an increase in prepaid expenses and other current assets, an increase in accounts receivable, an increase in inventories and an increase in contract assets.

Net cash provided by operating activities during the six months ended February 28, 2025, was primarily due to non-cash expenses and net income and an increase in accounts payable, accrued expense and other liabilities.

Net cash provided by operating activities was partially offset by an increase in accounts receivable, an increase in inventories and an increase in prepaid expenses and other current assets.

The increase in accounts payable, accrued expenses and other liabilities is primarily due to the timing of purchases and cash payments.

The increase in prepaid expenses and other current assets is primarily due to the timing of payments.

The increase in accounts receivable is primarily driven by the timing of collections.

The increase in inventories is primarily to support expected sales levels in the second quarter of fiscal year 2025.

The increase in contract assets is primarily due to timing of revenue recognition for the over time customers.

The increase in inventories is primarily to support expected sales levels in the third quarter of fiscal year 2025.

The increase in prepaid expenses and other current assets is primarily due to the timing of payments.

Investing Activities

Net cash used in investing activities during the three months ended November 30, 2024, consisted primarily of capital expenditures, principally to support ongoing business in the Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce segments and the acquisition of Mikros Technologies LLC, partially offset by proceeds and advances from the sale of property, plant and equipment.

Net cash used in investing activities during the six months ended February 28, 2025, consisted primarily of capital expenditures, principally to support ongoing business in the Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce segments and the acquisition of Pharmaceutics International, Inc.

and Mikros Technologies LLC, partially offset by proceeds and advances from the sale of property, plant and equipment.

Financing Activities

Net cash used in financing activities during the three months ended November 30, 2024, was primarily due to (i) the repurchase of our common stock under our share repurchase authorization, (ii) payments for debt agreements, (iii) treasury stock minimum tax withholding related to vesting of restricted stock, and (iv) dividend payments.

Net cash used in financing activities was partially offset by borrowings under debt agreements.

Net cash used in financing activities during the six months ended February 28, 2025, was primarily due to (i) the repurchase of our common stock under our share repurchase authorization, (ii) payments for debt agreements, (iii) treasury stock minimum tax withholding related to vesting of restricted stock, and (iv) dividend payments.

Net cash used in financing activities was partially offset by (i) borrowings under debt agreements and (ii) net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan.

Capital Expenditures

For Fiscal Year 2025, we anticipate our net capital expenditures to be in the range of 1.5 percent to 2.0 percent of net revenue.

For Fiscal Year 2025, we anticipate our net capital expenditures to be in the range of 1.5% to 2.0% of net revenue.

In general, our capital expenditures support ongoing maintenance in our Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce segments and investments in capabilities and targeted end markets.

15 unchanged sentences

As of November 30, 2024, no authorization remained under the amended 2023 Share Repurchase Program.

(3) As of January 2, 2025, 4.3 million shares had been repurchased for $636 million and $364 million remains available under the 2025 Share Repurchase Program.

(3) As of February 28, 2025, 4.3 million shares had been repurchased for $636 million and $364 million remained available under the 2025 Share Repurchase Program.

As of April 3, 2025, 6.5 million shares had been repurchased for $972 million and $28 million remains available under the 2025 Share Repurchase Program.

Under ASR agreements, we make payments to the participating financial institutions and receive an initial delivery of shares of common stock.

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Q2 FY 2025 Q3 FY 2025 (1) $ 310 1.8 0.2 2.0 $ 154.44

Q3 FY 2025 Q4 FY 2025 $ 309 1.8 (2) (2) $ 135.99

(1) In December 2024, as part of the 2025 Share Repurchase Program, we entered into ASR agreements to repurchase $310 million, excluding excise tax, of our common stock.

Under the ASR agreements, we made payments of $310 million to participating financial institutions and received an initial delivery of shares of common stock.

In March 2025, an ASR transaction was completed, and 0.2 million additional shares were delivered under the Q2 FY 2025 ASR agreements.

(2) In March 2025, as part of the 2025 Share Repurchase Program, we entered into ASR agreements to repurchase $309 million, excluding excise tax, of our common stock.

Under the ASR agreements, we made payments of $309 million to participating financial institutions and received an initial delivery of shares of common stock.

The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR agreements.

In addition, we repurchased shares of its common stock through the open market as follows (in millions):

Three months ended

November 30, 2024 November 30, 2023

Shares Cost Shares Cost

Three months ended Six months ended

February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Shares Cost Shares Cost Shares Cost Shares Cost

Open market share repurchases (1)

0.7 $ 94 6.5 $ 824 2.5 $ 326 6.5 $ 824

(1) As of November 30, 2024, $768 million remains available under the 2025 Share Repurchase Program.

(1) As of April 3, 2025, 2.7 million shares had been repurchased for $353 million through open market transactions under the 2025 Share Repurchase Program.

On December 27, 2024, we issued a warrant (the “Warrant”) to Amazon.com NV Investment Holdings LLC (“Warrantholder”) to acquire up to 1,158,539 of our ordinary shares (“Warrant Shares”) at an initial exercise price of $137.7671 per share, which is the preceding 30 trading day VWAP.

The Warrant allows for cashless exercise and expires December 27, 2031.

The Warrant Shares are subject to vesting for payments for purchased products and services over the Warrant term, with a portion of the Warrant Shares having vested as of the Warrant issuance.

The Warrant Shares are subject to vesting for payments for purchased products and services over the seven-year Warrant term, with 59,582 of the Warrant Shares having vested upon issuance.

Upon the consummation of an acquisition transaction (as defined in the Warrant), subject to certain exceptions, the unvested portion of the Warrant will vest in full.

1 unchanged sentence

The exercise price and the number of Warrant Shares are subject to customary anti-dilution adjustments.

We account for the Warrant as an equity instrument within additional paid-in-capital on the Condensed Consolidated Balance Sheets, and the provision for the warrant is recorded as a reduction to revenue on the Condensed Consolidated Statements of Operations.

To determine the fair value of the Warrant, we used the Black-Scholes option pricing model, which is based on assumptions that require management to use judgement.

Based on the estimated fair value, we determined the amount of provision for common stock warrant, which is amortized ratably as a reduction to revenue based on our estimate of revenue over the Warrant term.

The fair value of the Warrant was determined as of the issuance date, using the Black-Scholes option pricing model.

The following assumptions were used in the model:

December 27, 2024

Stock price $ 145.92

Exercise price $ 137.77

Expected life 7.0 years

Expected volatility (1)

Risk-free interest rate 4.5 %

(1) The expected volatility was estimated using the historical volatility derived from our common stock.

The following table summarizes the Warrant activity for the six months ended February 28, 2025:

Warrant Shares

Outstanding as of August 31, 2024

Changes during the period

Shares granted 1,158,539

Shares vested (59,582)

Outstanding as of February 28, 2025

Exercisable as of February 28, 2025

Contractual Obligations

3 unchanged sentences

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