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Item 1. Business

2024-01-26 compared with 2023-01-24 · 116 added, 51 removed, 213 unchanged (44% of the section changed)

We are a leading global distributor and solutions aggregator for the information technology ("IT") ecosystem.

We are a Fortune 100 corporation and a leading global distributor and solutions aggregator for the information technology ("IT") ecosystem.

We serve a critical role, bringing products from the world's leading and emerging technology vendors to market, and helping our customers create solutions best suited to maximize business outcomes for their end-user customers.

We distribute IT hardware, software, and systems including personal computing devices and peripherals, mobile phones and accessories, printers, server and datacenter infrastructure, hybrid cloud, security, networking, communications and storage solutions, and system components.

We also provide systems design and integration solutions.

On December 1, 2020, we completed the previously announced separation of our customer experience services business (the “Separation”), which was accomplished by the distribution of one hundred percent of the outstanding common stock of Concentrix Corporation (“Concentrix”).

Our stockholders received one share of Concentrix common stock for every share of our common stock held at the close of business on the record date.

Concentrix is now an independent public company trading under the symbol “CNXC” on the Nasdaq Stock Market.

After the Separation, we do not beneficially own any shares of Concentrix’ common stock and beginning December 1, 2020, we no longer consolidate Concentrix within our financial results or reflect the financial results of Concentrix within our continuing results of operations.

We distributed a total of approximately 51.6 million shares of Concentrix common stock to our stockholders.

In connection with the Separation, we entered into a separation and distribution agreement, as well as various other agreements with Concentrix that provide a framework for the relationships between the parties going forward, including among others an employee matters agreement, a tax matters agreement, and a commercial agreement, pursuant to which Concentrix has continued to provide services to us following the Separation.

The historical results of operations and financial positions of Concentrix are reported as discontinued operations in our Consolidated Financial Statements.

For further information on discontinued operations, see Note 5 - Discontinued Operations, to the Consolidated Financial Statements in Item 8.

We aggregate and distribute IT hardware, software, and systems including personal computing devices and peripherals, mobile phones and accessories, printers, server and datacenter infrastructure, hybrid cloud, security, networking, communications and storage solutions, and system components.

We also design and deliver purpose-built server, storage and networking solutions for the hyperscale infrastructure market.

On March 22, 2021, we entered into an agreement and plan of merger (the “Merger Agreement”) which provided that legacy SYNNEX Corporation would acquire legacy Tech Data Corporation, a Florida corporation (“Tech Data”) through a series of mergers, which would result in Tech Data becoming an indirect subsidiary of TD SYNNEX Corporation (collectively, the "Merger").

On September 1, 2021, pursuant to the terms of the Merger Agreement, we acquired all the outstanding shares of common stock of Tiger Parent (AP) Corporation, the parent corporation of Tech Data, for consideration of $1.6 billion in cash ($1.1 billion in cash after giving effect to a $500.0 million equity contribution by Tiger Parent Holdings, L.P., Tiger Parent (AP) Corporation’s sole stockholder and an affiliate of Apollo Global Management, Inc., to Tiger Parent (AP) Corporation prior to the effective time of the Merger) and 44 million shares of common stock of SYNNEX valued at approximately $5.6 billion.

We previously had two reportable segments as of November 30, 2020:

Technology Solutions and Concentrix.

After giving effect to the Separation on December 1, 2020, we operated in a single reportable segment.

After completion of the Merger, we reviewed our reportable segments as there was a change in our chief executive officer, who is also our chief operating decision maker.

Our chief operating decision maker has a leadership structure aligned with the geographic regions of the Americas, Europe and Asia-Pacific and Japan (“APJ”) and reviews and allocates resources based on these geographic regions.

As a result, as of September 1, 2021 we began operating in three reportable segments based on our geographic regions:

Our chief executive officer, who is also our chief operating decision maker, has a leadership structure aligned with the geographic regions of the Americas, Europe and Asia-Pacific and Japan (“APJ”) and reviews and allocates resources based on these geographic regions.

As a result, we operate in three reportable segments based on our geographic regions:

the Americas, Europe and APJ.

Segment results for all prior periods have been restated for comparability to the Company’s current reportable segments.

For financial information by segment, refer to Note 1 2 – Segment Information, to the Consolidated Financial Statements in Item 8.

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We later reincorporated in the State of Delaware under the name of SYNNEX Corporation in October 2003.

As a result of the Merger, on October 22, 2021, we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company’s Restated Certificate of Incorporation to change our corporate name from SYNNEX Corporation to TD SYNNEX Corporation, effective November 3, 2021.

As of November 30, 2022, we had approximately 23,500 full-time co-workers worldwide.

On October 22, 2021, as a result of the Merger we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company’s Restated Certificate of Incorporation to change our corporate name from SYNNEX Corporation to TD SYNNEX Corporation, effective November 3, 2021.

Digital transformation and the migration to cloud computing is reshaping our industry, enabling businesses and consumers to evaluate, procure, acquire, and consume technology products and services in a variety of ways.

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As a result, customers are seeking greater integration of products, services and solutions that tie technologies together.

Therefore, we believe it is important to provide a broad, end-to-end portfolio, with deep capabilities across the computing continuum to help customers manage the increasingly complex IT ecosystem

and deliver the solutions and business outcomes the market desires.

Therefore, we believe it is important to provide a broad, end-to-end portfolio, with deep capabilities across the computing continuum to help customers manage the increasingly complex IT ecosystem and deliver the solutions and business outcomes the market desires.

Our vision for the future is to be the vital solutions aggregator and orchestrator that connects the IT ecosystem.

Our global strategy is to deliver higher value by focusing on the following strategic priorities:

• Invest in high-growth technologies such as hybrid cloud, security, analytics/Internet of Things ("IoT"), hyperscale infrastructure, and services.

• Invest in high-growth technologies such as hybrid cloud, security, data analytics, artificial intelligence ("AI"), hyperscale infrastructure, and services.

• Strengthen our end-to-end portfolio of products, services and solutions, including technology-as-a-service and recurring revenue models.

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Our Products and Suppliers

We offer a comprehensive catalog of more than 200,000 technology products (as measured by active SKU's) from more than 1,500 original equipment manufacturers (“OEM”), suppliers of high-growth technologies such as converged and hyper-converged infrastructure, cloud, security, data/analytics/IoT and services.

We offer a comprehensive catalog of more than 200,000 technology products (as measured by active SKU's) from more than 2,500 original equipment manufacturers (“OEM”), suppliers of traditional technologies such as personal computing devices, mobile phones and accessories, and high-growth technologies such as cloud, security, data/analytics, AI and hyperscale infrastructure.

This enables us to offer comprehensive solutions to our reseller and retail customers.

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Advanced Solutions Portfolio:

• Our Advanced Solutions portfolio primarily includes data center technologies such as hybrid cloud, security, storage, networking, servers, advanced technology software and converged and hyper-converged infrastructure.

Our Advanced Solutions portfolio also includes our specialized solution businesses, such as Global Computing Components.

Our high-growth technologies solutions, along with our services offerings, span our Endpoint and Advanced Solutions portfolios.

Our suppliers include leading IT systems, system components and peripherals, software, communications and security equipment, networking equipment, UCC and consumer electronics manufacturers.

Our suppliers include leading IT systems, system components and peripherals, software, communications and security equipment, and networking equipment manufacturers.

We purchase these and other complementary products from our suppliers and sell them to our reseller and retail customers.

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November 30, 2023 November 30, 2022 November 30, 2021

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Our business subjects us to the risk that the value of our inventory will be affected adversely by suppliers’ price reductions or by technological changes affecting the usefulness or desirability of the products comprising our inventory.

Many of our OEM suppliers offer us limited protection from the loss in value of our inventory due to technological change or a supplier’s price reduction.

Many of our OEM suppliers offer us limited protection from the loss in value of our inventory due to a supplier’s price reduction or technological change.

Under many of these agreements, we have a limited period of time to return or exchange products or claim price protection credits.

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We set our sales price based on the market supply and demand characteristics for each particular product or bundle of products we distribute and services we provide.

Our gross margin has fluctuated annually due to changes in the mix of products we offer, the percentage of revenue that is presented on a net basis, customers we sell to, incentives and rebates received from our OEM suppliers, competition, seasonality, replacement of lower margin business, inventory obsolescence, and lower costs associated with increased efficiencies.

Generally, when our revenue becomes more concentrated on limited products or customers, our gross margin tends to decrease due to increased pricing pressure from OEM suppliers or reseller customers.

We are highly dependent on the end-market demand for IT products, and on our partners’ strategic initiatives and business models.

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We provide our customers with systems design and full rack integration solutions, build-to-order, and configure-to-order assembly capabilities.

In both of these cases, we offer design, integration, test and other production value-added solutions such as thermal testing, power-draw efficiency testing, burn-in, quality and logistics support.

We offer design, integration, test and other production value-added solutions such as thermal testing, power-draw efficiency testing, burn-in, quality and logistics support.

Logistics Services.

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Our proprietary cloud platform offers a complete package of cloud-based solutions on a user-friendly platform and allows our reseller customers and OEM suppliers to own the complete customer lifecycle through direct billing, provisioning, management, and support.

Our solutions cover all end-user customer needs, including, pure public cloud solutions in productivity and collaboration, IaaS, or Infrastructure as a Service, PaaS, or Platform as a Service, SaaS, or Software as a Service, Security, Mobility, IoT and other hybrid solutions.

Our dedicated cloud team comprising developers, sales engineers and solutions specialists, supports our reseller customers in the sales of these solutions.

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We offer our reseller customers various financing options, including net terms, third party leasing, floor plan financing and letters-of-credit backed financing and arrangements where we collect payments directly from the end-user.

We also lease products to our reseller customers and their end-users and provide device-as-a-service to end-users.

We also lease products to our reseller customers and their end-users and provide DaaS, or Device-as-a-Service, to end-users.

The availability and terms of our financing services are subject to our credit policies or those of third-party financing providers to our customers.

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We operate our principal systems design and integration solutions facilities in the United States with additional locations in the United Kingdom and China.

We generally design and integrate IT systems, data center servers and networking solutions and IT appliances, by incorporating system components purchased directly from vendors or obtained from our distribution inventory.

We generally design and integrate IT systems, data center servers and networking solutions and IT appliances, by incorporating system components either purchased directly from vendors, obtained from our distribution inventory or through a customer-owned procurement model.

Some of our design and integration solutions facilities are ISO 9001:2015 and ISO 14001:2015 certified.

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Approximately 47% of our consolidated revenue for fiscal year 2023 was generated by our international operations.

As a result of the Merger, we have expanded both our domestic and international operations.

Our end market strategy is to continue expanding internationally on a selective basis in order to provide our distribution capabilities to OEM suppliers in locations that meet their regional requirements.

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We may also rely on our receipt of good-faith, non-binding customer forecasts.

We maintain EDI connections with our OEM suppliers to send purchase

orders, receive purchase order status and receive notification once the product has shipped from our supplier.

We maintain EDI connections with our OEM suppliers to send purchase orders, receive purchase order status and receive notification once the product has shipped from our supplier.

Our information system also tracks warehouse and channel inventory levels and open purchase orders on a real-time basis enabling us to stock inventory at a regional level closer to the customer as well as to actively manage our working capital resources.

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The expenses charged by these financing companies are subsidized either by our OEM suppliers or paid by us.

We generally receive payment from these financing companies within 15 to 30 days from the date of sale, depending on the specific arrangement.

We receive payment from these financing companies based on agreed upon terms that depend on the specific arrangement.

Information Technology

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To allow our customers and suppliers to communicate and transact business with us in an efficient and consistent manner, we have implemented a mix of proprietary and off-the-shelf software programs that integrate our IT systems with those of our customers and suppliers.

In particular, we maintain EDI, XML, web-based communication links and mobile platform applications with many of our reseller and retail customers to enable them to search for products, check real-time pricing, inventory availability and specifications, place and track orders, receive invoices and process returns.

In particular, we maintain EDI, XML, API, and web-based communication links and mobile platform applications with many of our reseller and retail customers to enable them to search for products, check real-time pricing, inventory availability and specifications, place and track orders, receive invoices and process returns.

We operate in a highly competitive global environment.

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and ScanSource, Inc.

and, to a lesser extent, regional distributors.

and regional distributors.

The competitive environment in Europe is more fragmented with market share spread among several regional and local competitors such as ALSO Holding and Esprinet, as well as international distributors such as Ingram Micro, Inc., Westcon-Comstor and Arrow.

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The distribution industry has historically undergone, and continues to undergo, consolidation.

Over the years, a number of providers within the IT distribution

industry exited or merged with other providers.

Over the years, a number of providers within the IT distribution industry exited or merged with other providers.

For example, during fiscal year 2017, we acquired the Westcon-Comstor Americas distribution business and Tech Data acquired the Technology Solutions operating group of Avnet Inc.

(“Avnet”), and in fiscal year 2021 we acquired Tech Data.

We have participated in this consolidation and expect to continue to assess opportunities.

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Our commitment to diversity and inclusion starts at the top with a highly skilled and diverse Board of Directors.

Women represent 27% of our board of directors, 27% of our leadership at the director and above level, and 42% of our total co-worker base.

Women represent 31% of our Board of Directors including our chair of the board, 28% of our leadership at the director and above level, and 43% of our total co-worker base.

Additionally, 54% of our Board of Directors is ethnically diverse or gender diverse.

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We remain focused on protecting our planet and reducing our global carbon footprint.

In support of this, TD SYNNEX has committed to the Science Based Targets Initiative (SBTi) Business Ambition Pledge with the goal to achieve net-zero greenhouse gas ("GHG") emissions by 2045.

We are committed to embedding a culture of sustainability across our organization and increasing our sustainability initiatives and supporting our customers and vendors.

We engage in and continue to explore a range of sustainability projects such as renewable energy, use of light emitting diode (LED) technologies, waste minimization projects and ISO 14001 at several of our facilities.

We also offer trade-in, recycling and refurbishment services on a range of IT equipment to end-users through agreements with our resellers and retail partners.

We have established a Global Responsibility Steering Committee to help drive these efforts.

Additional human capital information will be included in our inaugural Corporate Citizenship Report which will be available in the near future on our website.

In support of this, TD SYNNEX had previously committed to the Science Based Targets Initiative ("SBTi") Business Ambition Pledge with the goal to achieve net-zero greenhouse gas ("GHG") emissions by 2045.

In support of that commitment, in fiscal year 2023, we submitted near-term and long-term emissions-reduction targets to SBTi for validation.

We are committed to embedding a culture of sustainability across our organization, increasing our sustainability initiatives and supporting our customers and vendors.

We engage in and continue to explore a range of sustainability projects that support our decarbonization journey such as renewables, energy conservation measures, environmental management systems and waste minimization projects.

We have a Corporate Citizenship Steering Committee in place to help drive our strategy around these efforts in addition to multiple working groups that focus on areas such as the Circular Economy and Sustainable Transportation & Logistics.

We currently have over 40 Green Teams in place to support sustainability efforts at our locations globally.

Additional human capital and environmental information was included in our Corporate Citizenship Report which is available on our website.

Information contained in our Corporate Citizenship Report and website is not deemed part of this Annual Report on Form 10-K.

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Our website is http://www.tdsynnex.com.

We make available free of charge, on or through our website, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, if any, or other filings filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after electronically filing or furnishing these reports with the Securities and Exchange Commission, or SEC.

Information contained on our website is not a part of this Report.

We have adopted a code of ethics applicable to our co-workers including our principal executive, financial and accounting officers, and it is available free of charge, on our website’s investor relations page.

We have adopted a code of conduct applicable to our co-workers including our principal executive, financial and accounting officers, and it is available free of charge, on our website’s investor relations page.

The SEC maintains an Internet site at http://www.sec.gov that contains our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, if any, or other filings filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, and our proxy and information statements.

Information About our Executive Officers

The following table sets forth information regarding our current executive officers:

Name Age Position

Richard Hume 64 Chief Executive Officer

Dennis Polk 57 Hyve Solutions Executive

Michael Urban 59 President, Americas

Marshall Witt 58 Chief Financial Officer

Patrick Zammit 57 Chief Operating Officer

David Vetter 64 Chief Legal Officer

Simon Leung 58 Chief Business Officer

John Henry 49 Chief Accounting Officer

Richard Hume is our Chief Executive Officer .

Hume joined Tech Data in March 2016 as Executive Vice President, Chief Operating Officer.

In June 2018, Mr.

Hume was appointed as Chief Executive Officer of Tech Data and in September 2021 in conjunction with the Merger he was appointed as Chief Executive Officer of TD SYNNEX.

Prior to joining Tech Data, Mr.

Hume was employed for more than thirty years at International Business Machines Corporation ("IBM"), (NYSE:

IBM), a multinational computer hardware, middleware and software company.

Most recently, from January 2015 to February 2016, Mr.

Hume served as General Manager and Chief Operating Officer of Infrastructure and Outsourcing at IBM.

Prior to that position, from January 2012 to January 2015, Mr.

Hume served as General Manager, Europe where he led IBM’s multi-brand European organization.

From 2008 to 2011, Mr.

Hume served as General Manager, Global Business Partners, directing the growth and channel development initiatives for IBM’s Business Partner Channel.

Hume holds a Bachelor of Science degree in Accounting from Pennsylvania State University.

Dennis Polk has served as a member of our Board of Directors since February 2012 and as our Hyve Solutions Executive since September 2021.

Polk joined TD SYNNEX in 2002 and served as President and Chief Executive Officer of TD SYNNEX from March 2018 to September 2021.

Prior to that position, he served as Chief Operating Officer, Chief Financial Officer and Senior Vice President of Corporate Finance of TD SYNNEX.

In conjunction with the Merger in September 2021, Mr.

Polk was appointed as Executive Chair of the Board of Directors, and he served as Executive Chair until September 1, 2023.

Michael Urban is our President, Americas.

Urban joined TD SYNNEX in February 2019 and served as President, Worldwide Technology Solutions Distribution until the Merger.

Prior to joining TD SYNNEX, Mr.

Urban was employed by Tech Data from September 2012 until January 2019, most recently serving as Corporate Vice President of Strategy, Transformation, and Global Vendor Management.

Prior to Tech Data, Mr.

Urban served in progressive leadership roles including Chairman and Chief Executive Officer at Actebis Holding GmbH, an IT services company.

Urban received a Bachelor of Science degree in Engineering from Paderborn University in Germany.

Urban will be resigning as President, Americas effective as of March 1, 2024.

Marshall Witt is our Chief Financial Officer and has served in this capacity since April 2013.

Prior to joining TD SYNNEX, Mr.

Witt was Senior Vice President of Finance and Controller with FedEx Freight, Inc., a freight services company.

During his fifteen year tenure with FedEx Corporation (NYSE:

FDX), a multinational transportation, e-commerce and business services company, Mr.

Witt held progressive financial and operational roles.

Prior to FedEx Corporation, he held accounting and finance leadership positions including five years with KPMG LLP, a professional services firm, as an audit manager for banking and transportation clients.

Witt holds a Bachelor of Business Administration in Finance from Pacific Lutheran University and a Masters in Accounting from Seattle University and is a Certified Public Accountant.

Patrick Zammit is our Chief Operating Officer.

Zammit joined Tech Data in February 2017 as President, Europe through Tech Data’s acquisition of Avnet’s Technology Solutions business and served in this capacity until the Merger in September 2021 when he also assumed the role of President, APJ.

Zammit then served as President, Europe and APJ until his appointment as Chief Operating Officer, effective January 1, 2024.

Prior to this role, Mr.

Zammit was employed for more than twenty years at Avnet, Inc (NASDAQ:

AVT), an electronic components distribution company.

From January 2015 to January 2017, Mr.

Zammit served as Global President of Avnet Technology Solutions.

Prior to that position, from October 2006 until January 2015, Mr.

Zammit served as President of Avnet Electronics Marketing EMEA.

From 1993 to 2006, Mr.

Zammit served in management positions of increasing responsibilities.

Prior to joining Avnet, Mr.

Zammit was employed by Arthur Andersen from 1989 to 1993.

Zammit holds a Masters in Business Administration equivalent from Paris Business School ESLSCA.

David Vetter is our Chief Legal Officer.

Vetter joined Tech Data in June 1993 as Vice President, General Counsel and was promoted to Corporate Vice President, General Counsel in April 2000.

In March 2003, he was promoted to Senior Vice President, and effective July 2003, was appointed Secretary.

In January 2017, Mr.

Vetter was promoted to Executive Vice President, Chief Legal Officer and in conjunction with the Merger in September 2021, he assumed this role for TD SYNNEX.

Prior to joining Tech Data, Mr.

Vetter was employed by the law firm of Robbins, Gaynor & Bronstein, P.A.

from 1984 to 1993, most recently as a partner.

Vetter is a member of the Florida Bar Association and holds Bachelor of Arts degrees in English and Economics from Bucknell University and a Juris Doctorate Degree from the University of Florida.

Simon Leung is our Chief Business Officer.

Prior to this role, Mr.

Leung served as Senior Vice President, General Counsel and Corporate Secretary for TD SYNNEX from May 2001 until the Merger in September 2021.

Leung joined TD SYNNEX in November 2000 as Corporate Counsel.

Prior to TD SYNNEX, Mr.

Leung was an attorney at the law firm of Paul, Hastings, Janofsky & Walker LLP.

Leung received a Bachelor of Arts degree from the University of California, Davis in International Relations and his Juris Doctor degree from the University of Minnesota Law School.

John Henry is our Chief Accounting Officer.

Henry joined Tech Data in 2015 as the Vice President of Corporate Accounting and has served as Senior Vice President, Chief Accounting Officer since November 2020.

Prior to joining Tech Data, Mr.

Henry served as a public accountant with both Arthur Andersen LLP and PricewaterhouseCoopers LLP, and as an accountant for DirecTV and AECOM (NYSE:

Henry is a graduate of California State University in Fresno with a degree in Accounting.

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-K

Item 1. Business