What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-01-24 compared with 2024-01-26 · 33 added, 80 removed, 383 unchanged (23% of the section changed)

2 unchanged sentences

The second section, captioned “Risks Related to Our Indebtedness” discusses our debt-related risks.

The third section, captioned “Risks Related to Our Relationships with Apollo Global Management Inc.

and MiTAC Holdings Corporation,” discusses risks relating to Apollo Global Management’s influence over us and our relationship with MiTAC Holdings Corporation.

The fourth section, captioned “Risks Related to our Industry,” discusses risks impacting businesses operating in our industry.

The fifth section, captioned “Risks Related to the Macro-Economic and Regulatory Environment,” relates to risks which broadly affect companies operating in regions in which we operate.

The third section, captioned “Risks Related to our Industry,” discusses risks impacting businesses operating in our industry.

The fourth section, captioned “Risks Related to the Macro-Economic and Regulatory Environment,” relates to risks which broadly affect companies operating in regions in which we operate.

You should carefully review all of these sections, as well as our consolidated financial statements and notes thereto and the other information appearing in this report, for important information regarding risks that affect us.

27 unchanged sentences

We are subject to uncertainties and variability in demand by our customers, which could decrease revenue and adversely affect our operating results, and we have customer contracts with provisions that could cause fluctuations in our revenue.

We sell to our customers on a purchase order basis, rather than pursuant to long-term contracts or contracts with minimum purchase requirements.

We typically sell to our customers on a purchase order basis, rather than pursuant to long-term contracts or contracts with minimum purchase requirements.

Consequently, our sales are subject to demand variability by our customers.

7 unchanged sentences

For example, sales of Apple Inc.

products and services comprised approximately 11% of our total revenue for both fiscal years 2023 and 2022, and sales of HP Inc.

products and services comprised approximately 10% and 12% of our total revenue for fiscal years 2022 and 2021, respectively.

products and services comprised approximately 12%, 11% , and 11% of our total revenue for fiscal years 2024, 2023, and 2022, respectively, and sales of HP Inc.

products and services comprised approximately 10% of our total revenue for fiscal year 2022.

Our OEM supplier agreements typically are short-term and may be terminated without cause upon short notice.

OEM supplier agreements are often established at a regional or country level and these relationships may change in some countries or regions and not others.

The loss or deterioration of our relationship with HP Inc., Apple Inc.

The loss or deterioration of our relationship with Apple Inc., HP Inc.

or any other major OEM supplier, the authorization by OEM suppliers of additional distributors, the sale of products by OEM suppliers directly to our reseller and retail customers and end-users, or our failure to establish relationships with new OEM suppliers or to expand the distribution and supply chain services that we provide OEM suppliers could adversely affect our business, financial position and operating results.

2 unchanged sentences

Generally, each OEM supplier has the ability to change the terms and conditions of its distribution agreements, such as reducing the amount of price protection and return rights or reducing the level of purchase discounts, incentive rebates, scope of the geographic area in which we can sell and marketing programs available to us.

Additionally, significant changes in vendor payment terms or payment arrangements could negatively impact our liquidity and financial condition.

Additionally, we have certain arrangements with third-party financial institutions ("Supplier Finance Programs"), which facilitate the participating OEM suppliers' ability to sell their accounts receivable from us to third-party financial institutions, at the sole discretion of these OEM suppliers.

As part of these arrangements, we generally receive more favorable payment terms from the participating OEM suppliers.

Significant changes in these Supplier Finance Programs or in other vendor payment terms could negatively impact our liquidity and financial condition.

From time to time we may conduct business with a supplier without a formal agreement because the agreement has expired or was otherwise terminated.

32 unchanged sentences

Our business experiences customer concentration from time to time.

One customer accounted for 11%, 10% and 17% of our total revenue in fiscal years 2023, 2022 and 2021.

One customer accounted for 12%, 11% and 10% of our total revenue in fiscal years 2024, 2023 and 2022, respectively.

The loss of one of our significant customers could result in an adverse impact on our business.

7 unchanged sentences

We have in the past pursued, and in the future expect to pursue, acquisitions of, or investments in, businesses and assets in new markets, either within or outside the IT products and services industry, that complement or expand our existing business.

For example, in September 2021, we completed the acquisition of Tech Data.

Our acquisition strategy involves a number of risks, including:

85 unchanged sentences

however, they may not be sufficient to compensate for losses that may occur.

A portion of our revenue is financed by floor plan financing companies and any termination or reduction in these financing arrangements could increase our financing costs and harm our business and operating results.

A portion of our product distribution revenue is financed by floor plan financing companies.

Floor plan financing companies are engaged by our customers to finance, or floor, the purchase of products from us.

In exchange for a fee that is either subsidized by our OEM suppliers or paid by us, we transfer the risk of loss on the sale of our products to the floor plan companies.

These arrangements with financing companies allow our business to operate at much lower relative working capital levels than if such programs were not available.

If these floor plan arrangements are terminated or substantially reduced, the need for more working capital and the increased financing cost could harm our business and operating results.

Risks Related to our Indebtedness

The terms of our debt arrangements impose restrictions on our ability to operate which in turn could negatively affect our ability to respond to business and market conditions and therefore could have an adverse effect on our business and operating results.

As of November 30, 2023 , we had $4.1 billion in outstanding short and long-term borrowings under term loans, our Senior Notes, lines of credit, accounts receivable securitization programs and finance leases, excluding trade payables.

As of November 30, 2024 , we had $3.9 billion in outstanding short and long-term borrowings under term loans, our Senior Notes (as defined in Note 1 0 - Borrowings to the Consolidated Financial Statements in Item 8), lines of credit and our accounts receivable securitization program, excluding trade payables.

The terms of one or more of the agreements under which this indebtedness was incurred may limit or restrict, among other things, our (or our subsidiaries', as applicable) ability to:

21 unchanged sentences

We and our subsidiaries may be able to incur significant additional indebtedness in the future.

For example, as of November 30, 2023 , we had access to $3.5 billion in unused commitments under the TD SYNNEX revolving credit facility (as defined below).

For example, as of November 30, 2024 , we had access to $3.5 billion in unused commitments under the TD SYNNEX Revolving Credit Facility (as defined in the Liquidity and Capital Resources section of Item 7 of this Report).

If new debt is added to our current debt levels, the related risks that we now face could intensify.

Although the TD SYNNEX Credit Agreement (as defined below) contains restrictions on the incurrence of additional indebtedness by our subsidiaries, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.

Although the TD SYNNEX Credit Agreement (as defined in the Liquidity and Capital R esources section of Item 7 of this Report) contains restrictions on the incurrence of additional indebtedness by our subsidiaries, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.

Changes in our credit rating may increase our interest expense or other costs of capital.

9 unchanged sentences

While some of our debt arrangements have contractually negotiated spreads, any changes to these spreads in connection with renegotiations of our credit facilities could adversely affect our results of operations.

Risks Related to Our Relationships with Apollo Global Management, Inc.

and MiTAC Holdings Corporation

The concentration of ownership of our common stock among our executive officers, directors and principal stockholders could allow them to influence all matters requiring stockholder approval and could delay or prevent a change in control of TD SYNNEX.

As of November 30, 2023, our executive officers, directors and principal stockholders owned approximately 43% of our outstanding common stock.

In particular, Apollo Global Management, Inc.

(“Apollo”) and its affiliates owned approximately 32% of our common stock.

Apollo is the private equity company that through its affiliates owned Tech Data prior to the Merger.

As part of the Merger, 44 million shares of TD SYNNEX common stock were issued to Apollo.

Additionally, the Company entered into an Investor Rights Agreement at the closing of the Merger, which provides that the board of directors be comprised of at least eleven directors, and that affiliates of Apollo have the right to nominate (i) up to four directors , if Apollo and its affiliates own 30% or more of the outstanding shares of TD SYNNEX common stock;

(ii) up to three directors if Apollo and its affiliates own between 20% and 30% of the outstanding shares of TD SYNNEX common stock;

(iii) up to two directors, if Apollo and its affiliates own between 10% and 20% of the outstanding shares of TD SYNNEX common stock;

or (iv) up to one director, if Apollo and its affiliates own between 5% and 10% of the outstanding shares of TD SYNNEX common stock.

As a result, Apollo is in a position to influence (subject to organizational documents and Delaware law) the composition of the Company’s board of directors and the outcome of corporate actions requiring stockholder approval, such as mergers, business combinations and dispositions of assets, among other corporate transactions.

This concentration of investment and voting power could discourage others from initiating a potential merger, takeover or other change of

control transaction that may otherwise be beneficial to TD SYNNEX and its stockholders, which could adversely affect the market price of TD SYNNEX common stock.

There could be potential conflicts of interest between us and MiTAC Holdings Corporation and its affiliates, which could affect our business and operating results.

As of November 30, 2023 , MiTAC Holdings Corporation (“MiTAC Holdings”) and its affiliates owned approximately 9.3% of our common stock.

MiTAC Holdings’ and its affiliates’ continuing beneficial ownership of our common stock could create conflicts of interest with respect to a variety of business matters.

For example, we currently purchase inventories from MiTAC Holdings and its affiliates.

Similar risks could exist as a result of Matthew F.C.

Miau’s positions as our Chairman Emeritus, a member of our Board of Directors, the Chairman of MiTAC Holdings and as a director or officer of MiTAC Holdings’ affiliates.

For fiscal year 2023, Mr.

Miau received the same compensation as our independent directors.

Miau’s compensation as one of our directors is based upon the approval of the Nominating and Corporate Governance Committee, which is solely composed of independent members of the Board of Directors.

We also have adopted a policy requiring material transactions in which any of our directors has a potential conflict of interest to be approved by our Audit Committee, which is also composed of independent members of the Board of Directors.

Synnex Technology International Corp., or Synnex Technology International, a publicly-traded company based in Taiwan and affiliated with MiTAC Holdings, currently provides distribution and fulfillment services to various markets in Asia and Australia, and is also a competitor of ours.

As of November 30, 2023, MiTAC Incorporated, a privately-held company based in Taiwan and a separate entity from MiTAC Holdings, directly and indirectly owned approximately 15.7% of Synnex Technology International and approximately 8.4% of MiTAC Holdings.

As of November 30, 2023, MiTAC Holdings directly and indirectly owned 1.0% of Synnex Technology International.

In addition, MiTAC Holdings directly and indirectly owned approximately 14.1% of MiTAC Incorporated and Synnex Technology International directly and indirectly owned approximately 18.4% of MiTAC Incorporated as of November 30, 2023.

Synnex Technology International indirectly through its ownership of Peer Developments Limited owned approximately 3.9% of our outstanding common stock as of November 30, 2023 .

Neither MiTAC Holdings, nor Synnex Technology International is restricted from competing with us.

In the future, we may increasingly compete with Synnex Technology International, particularly if our business in Asia expands or Synnex Technology International expands its business into geographies or customers we serve.

The future sale of a large number of shares by Apollo or MiTAC Holdings, including as the result of the exercise of registration rights, may adversely affect the market price of the Company’s common stock.

We have granted registration rights to Apollo pursuant to an Investors Rights Agreement dated September 1, 2021, and to MiTAC Holdings pursuant to a Letter Agreement dated September 3, 2021, that require us to register their shares for resale in certain circumstances.

On January 30, 2023, we announced the closing of a secondary public offering (the "January Offering") of an aggregate of approximately 5.2 million shares of our common stock that were sold by certain entities managed by Apollo.

Additionally, on October 10, 2023, we entered into an underwriting agreement relating to the secondary public offering (the "October Offering") of an aggregate of approximately 6.8 million shares sold by certain entities managed by affiliates of Apollo and certain entities affiliated with MiTAC Holdings Corporation (collectively, the "Selling Stockholders").

In addition, the Selling Stockholders granted the underwriters an option to purchase up to an additional 1,012,500 shares of our common stock.

The October Offering was completed on October 13, 2023 and the underwriters exercised their option in full.

We did not receive any of the proceeds from the sale of shares in the January Offering or the October Offering.

Any additional future sales of a substantial number of shares of the Company’s common stock in the public market, or the perc eption that these sales may occur, could cause the market price of our common stock to decline.

These sales, or the possibility of these sales, also may make it more difficult for us to sell equity securities in the future.

Risks Related to Our Industry

1 unchanged sentence

We have, in the past, experienced decreases in demand and we anticipate that the industries we operate in will be subject to a high degree of cyclicality in the future.

Softening demand for our products and services caused by economic downturns and over-capacity may impact our revenue, as well the salability of inventory and collection of reseller and retail customer accounts receivable.

Softening demand for our products and services caused by economic downturns and over-capacity may impact our revenue, as well as the salability of inventory and collection of reseller and retail customer accounts receivable.

In addition, if we are not able to adequately adapt to the emergence of new technology or customer demand, such as cloud-based IT infrastructure and technology-as-a-service, our future operating results could be adversely affected.

3 unchanged sentences

We compete with a variety of regional, national and international IT product and service providers and contract manufacturers and assemblers.

In some instances, we also compete with our own customers, our own OEM suppliers and MiTAC Holdings and its affiliates.

In some instances, we also compete with our own customers and our own OEM suppliers.

Some of our competitors may have a broader range of services than us and may have more developed relationships with their existing customers.

17 unchanged sentences

Risks Related to the Macro-Economic and Regulatory Environment

The widespread outbreak of an illness or any other communicable disease, or any other public health crisis, could adversely affect our business, results of operations and financial condition.

We could be negatively impacted by the widespread outbreak of an illness or any other communicable disease, such as the outbreak of COVID-19 that occurred during fiscal 2020, or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains.

The extent of the impact of any such public health crisis on our future operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, could depend on future developments, including the effect on our customers and demand for our products and services;

our ability to sell and provide our products and services, including as a result of travel restrictions and people working remotely;

the ability of our customers to pay for our solutions;

any closures of our or our customers’ or partners’ offices and facilities;

and the impact of governmental actions or mandates imposed in response to any such public health crisis, all of which are uncertain and cannot be predicted.

An extended period of global supply chain and economic disruption could materially affect our business, our results of operations, our access to sources of liquidity, the carrying value of our goodwill and intangible assets, our financial condition and our stock price.

Changes in foreign currency exchange rates and limitations on the convertibility of foreign currencies could adversely affect our business and operating results.

21 unchanged sentences

As a general rule, we do not use financial instruments to hedge local currency denominated operating expenses in countries where a natural hedge exists.

For example, in many countries, revenue from the local currency services substantially offsets the local currency denominated operating expenses.

For example, in many countries, revenue in the local currency substantially offsets the local currency denominated operating expenses.

The translation of the financial statements of foreign operations into U.S.

1 unchanged sentence

For example, in the past, several foreign currencies in which we transact business depreciated against the U.S.

dollar, including the euro and the Japanese yen, which adversely affected the results of operations of our Europe and APJ segments in that year.

dollar, including the euro and the Japanese yen, which adversely affected the results of operations of our Europe and APJ segments in the applicable periods.

In addition, the value of our equity investment in foreign countries may fluctuate based upon changes in foreign currency exchange rates.

27 unchanged sentences

• uncertainty in obtaining tax holiday extensions or expiration or loss of tax holidays in various jurisdictions.

The Organization for Economic Cooperation and Development has been working on the Base Erosion and Profit Shifting Project, which would grant additional taxing rights over profits earned by multinational enterprises to the countries in which their products are sold and services rendered.

Rules adopted in response to this project would establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring members to adopt similar provisions into their respective domestic laws.

These rules would become effective for fiscal years starting on or after December 31, 2023 (fiscal year 2025 for the Company).

Significant details around the rules are still under formulation and the timing around enactment remains uncertain.

Many jurisdictions have enacted legislation and adopted policies resulting from the Organization for Economic Co-operation and Development’s (“OECD”) Anti-Base Erosion and Profit Shifting project, which generally grants additional taxing rights over profits earned by multinational enterprises to the countries in which their products are sold and services rendered.

Rules adopted in response to this project establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring members to adopt similar provisions into their respective domestic laws.

The directive requires the rules to initially become effective for fiscal years starting on or after December 31, 2023 (fiscal year 2025 for the Company).

Numerous countries have enacted legislation, or have indicated their intent to adopt legislation, to implement certain aspects of these rules effective January 1, 2024, with general implementation of the remaining global minimum tax rules effective January 1, 2025.

The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance.

Due to these new rules, our income tax expense could be unfavorably impacted as the legislation becomes effective in countries in which we conduct business.

We will continue to monitor the pending legislation and implementation that follows by individual countries.

We will continue to monitor the legislation and implementation by individual countries.

Certain countries are evaluating their tax policies and regulations, which could affect international business and may have an adverse effect on our overall tax rate, along with increasing the complexity, burden and cost of tax compliance.

16 unchanged sentences

Evidence indicates that the threat actor responsible for these incidents is related to, or the same as, the threat actor that previously gained unauthorized access to our systems in July 2021.

In November 2024, we were notified by a partner of one of our wholly owned subsidiaries that a different threat actor gained unauthorized access to the partner’s networks and systems which contained data and information of a few of our subsidiary’s customers.

In response to these threats, we engaged in remedial and preventative actions to remove the threat actor and prevent further unauthorized access to our network, analyzed the information that the threat actors accessed, enhanced our data security and governance program, added additional protective security layers and are cooperating with law enforcement authorities.

9 unchanged sentences

Global health and economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price.

Worldwide economic conditions remain uncertain due to the persistence of inflation, elevated interest rates, market volatility as a result of political leadership in certain countries, including due to Russia's invasion of Ukraine, the Israel-Hamas War and other disruptions to global and regional economies and markets.

Worldwide economic conditions remain uncertain due to the persistence of inflation, elevated interest rates, market volatility as a result of political leadership in certain countries, including due to Russia's invasion of Ukraine, the conflicts involving Israel and the surrounding region and other disruptions to global and regional economies and markets.

External factors, such as potential terrorist attacks, acts of war, geopolitical and social turmoil or epidemics and other similar outbreaks in many parts of the world, could prevent or hinder our ability to do business, increase our costs and negatively affect our stock price.

4 unchanged sentences

These uncertainties make it difficult for us and our suppliers and customers to accurately plan future business activities.

The widespread outbreak of an illness or any other communicable disease, or any other public health crisis, could adversely affect our business, results of operations and financial condition.

We could be negatively impacted by the widespread outbreak of an illness, any other communicable disease, or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains.

our ability to sell and provide our products and services, including as a result of travel restrictions and people working remotely;

the ability of our customers to pay for our solutions;

any closures of our or our customers’ or partners’ offices and facilities;

and the impact of governmental actions or mandates imposed in response to any such public health crisis, all of which are uncertain and cannot be predicted.

Part of our business is conducted outside of the United States, exposing us to additional risks that may not exist in the United States, which in turn could cause our business and operating results to suffer.

49 unchanged sentences

Changes to those rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business.

Unresolved Staff Comments

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 1A. Risk Factors