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| Fiscal Years Ended November 30, |
| 2024 | | 2023 |
| Diluted Earnings Per Common Share | |
Diluted EPS(1) | $ | 7.95 | | | $ | 6.70 | |
| Acquisition, integration and restructuring costs | 0.83 | | | 2.28 | |
| Amortization of intangibles | 3.37 | | | 3.14 | |
| Share-based compensation | 0.80 | | | 0.53 | |
| Purchase accounting adjustments | — | | | 0.16 | |
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| Income taxes related to above | (1.27) | | | (1.55) | |
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| Non-GAAP diluted EPS | $ | 11.68 | | | $ | 11.26 | |
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(1) Diluted EPS is calculated using the two-class method. Unvested restricted stock awards granted to employees are considered participating securities. For purposes of calculating Diluted EPS, net income allocated to participating securities was approximately 0.9% and 0.8% of net income for the fiscal years ended November 30, 2024 and 2023, respectively.
Liquidity and Capital Resources
Cash Conversion Cycle
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| | | Three Months Ended |
| | | November 30,
2024 | | November 30,
2023 |
| | | (in thousands) |
| Days sales outstanding ("DSO") | | | | | |
| Revenue | (a) | | $ | 15,844,563 | | | $ | 14,407,306 | |
| Accounts receivable, net | (b) | | 10,341,625 | | | 10,297,814 | |
| Days sales outstanding | (c) = ((b)/(a))*the number of days during the period | | 60 | | | 65 | |
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| Days inventory outstanding ("DIO") | | | | | |
| Cost of revenue | (d) | | $ | 14,803,618 | | | $ | 13,388,727 | |
| Inventories | (e) | | 8,287,048 | | | 7,146,274 | |
| Days inventory outstanding | (f) = ((e)/(d))*the number of days during the period | | 51 | | | 49 | |
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| Days payable outstanding ("DPO") | | | | | |
| Cost of revenue | (g) | | $ | 14,803,618 | | | $ | 13,388,727 | |
| Accounts payable | (h) | | 15,084,107 | | | 13,347,281 | |
| Days payable outstanding | (i) = ((h)/(g))*the number of days during the period | | 93 | | | 91 | |
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| Cash conversion cycle ("CCC") | (j) = (c)+(f)-(i) | | 18 | | | 23 | |
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Cash Flows
Our business is working capital intensive. Our working capital needs are primarily to finance accounts receivable and inventory. We rely heavily on term loans, sales of accounts receivable, our securitization program, our revolver programs and net trade credit from vendors for our working capital needs. We have financed our growth and cash needs to date primarily through cash generated from operations and financing activities. As a general rule, when sales volumes are increasing, our net investment in working capital dollars typically increases, which generally results in decreased cash flow generated from operating activities. Conversely, when sales volumes decrease, our net investment in working capital dollars typically decreases, which generally results in increases in cash flows generated from operating activities. We calculate CCC as days of the last fiscal quarter’s revenue outstanding in accounts receivable plus days of supply on hand in inventory, less days of the last fiscal quarter’s cost of revenue outstanding in accounts payable. Our CCC was 18 days at the end of fiscal year 2024, and 23 days at the end of fiscal year 2023, respectively. Our CCC decreased, as compared to fiscal year 2023, primarily due to a decrease in DSO as our revenue increased year-over-year while our accounts receivable balance remained relatively consistent due to increased collections.
To increase our market share and better serve our customers, we may further expand our operations through investments or acquisitions. We expect that any such expansions would require an initial investment in working capital, personnel, facilities and operations. These investments or acquisitions would likely be funded primarily by our existing cash and cash equivalents, additional borrowings, or the issuance of securities.
Operating Activities
Net cash provided by operating activities was $1.2 billion during fiscal year 2024 compared to net cash provided by operating activities of $1.4 billion during fiscal year 2023. The decrease in net cash provided by operating activities was primarily due to a decrease in inventory during fiscal year 2023 related to ongoing sell-through of strategic inventory purchases that occurred during fiscal year 2022, as compared to an increase in inventory in fiscal year 2024 correlated with the year-over-year revenue growth in the fourth quarter, as well as a decrease in other accrued liabilities in fiscal year 2024. This change was partially offset by an increase in accounts payable during fiscal year 2024 related to the increase in inventory purchases and associated timing of cash payments, as compared to a decrease in accounts payable during fiscal year 2023 correlated with the decrease in inventory in the prior year.
Investing Activities
Net cash used in investing activities was $193.8 million and $156.4 million during fiscal years 2024 and 2023, respectively. The increase in cash used in investing activities is primarily due to cash paid for the acquisition of businesses in the current year of $43.7 million, increased capital expenditures of $25.1 million and an increase in payments to settle net investment hedges of $14.3 million, partially offset by proceeds from the sale of a building in the current year of $42.9 million.
Financing Activities
Net cash used in financing activities was $953.1 million and $785.9 million during fiscal years 2024 and 2023, respectively. The increase in net cash used in financing activities as compared to fiscal year 2023 is primarily due to an increase in net repayments of long-term borrowings of $114.5 million, primarily due to the net repayment of senior notes, an increase in net repayments of short-term borrowings of $37.0 million and $13.9 million of debt issuance costs.
We believe our current cash balances, cash flows from operations and credit availability are sufficient to support our operating activities for at least the next twelve months.
Capital Resources
Our cash and cash equivalents totaled $1.1 billion and $1.0 billion as of November 30, 2024 and 2023, respectively. Our cash and cash equivalents held by international subsidiaries are no longer subject to U.S. federal tax on repatriation into the United States. Repatriation of some foreign balances is restricted by local laws. If in the future we repatriate foreign cash back to the United States, we will report in our Consolidated Financial Statements the impact of state and withholding taxes depending upon the planned timing and manner of such repatriation. Presently, we believe we have sufficient resources, cash flow and liquidity within the United States to fund current and expected future working capital, investment and other general corporate funding requirements.
We believe that our available cash and cash equivalents balances, cash flows from operations and our existing sources of liquidity, including available capacity under our borrowing facilities, will be sufficient to satisfy our current and planned working capital and investment needs, for the next twelve months in all geographies. We also believe that our longer-term working capital, planned capital expenditures, anticipated stock repurchases, dividend payments and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial market activities.
Credit Facilities and Borrowings
In the United States, we have an accounts receivable securitization program to provide additional capital for our operations (the "U.S. AR Arrangement"). Under the terms of the U.S. AR Arrangement, we and our subsidiaries that are party to the U.S. AR Arrangement can borrow up to a maximum of $1.5 billion based upon eligible trade accounts receivable. The U.S. AR Arrangement, as amended, has a maturity date of November 2026. We also have an amended and restated credit agreement, dated as of April 16, 2024 (as amended, the "TD SYNNEX Credit Agreement"), pursuant to which we received commitments for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $3.5 billion, which revolving credit facility (the "TD SYNNEX Revolving Credit Facility") may, at our request but subject to the lenders' discretion, potentially be increased by up to an aggregate amount of $500.0 million. There were no amounts outstanding under the U.S. AR Arrangement or the TD SYNNEX Revolving Credit Facility at November 30, 2024, or 2023, respectively.
The TD SYNNEX Credit Agreement also includes a $1.5 billion term loan facility (the "TD SYNNEX Term Loan") that was fully funded in connection with the Merger. The TD SYNNEX Term Loan has a maturity date of September 2026. As amended, the TD SYNNEX Revolving Credit Facility will mature on April 16, 2029, subject, in the lender's discretion, to two one-year extensions upon our prior notice to the lenders.
On April 19, 2024, we entered into a Term Loan Credit Agreement (the "2024 Term Loan Credit Agreement") which provides for a senior unsecured term loan in the amount of $750.0 million (the "2024 Term Loan"). The proceeds from the 2024 Term Loan were used to repay a portion of the TD SYNNEX Term Loan. The 2024 Term Loan will mature on September 1, 2027.
We have various other committed and uncommitted lines of credit with financial institutions, short-term loans, term loans, credit facilities and book overdraft facilities, totaling approximately $570.5 million in borrowing capacity as of November 30, 2024. Our borrowings on these facilities vary within the period primarily based on changes in our working capital. There was $171.1 million outstanding on these facilities at November 30, 2024, at a weighted average interest rate of 7.91%, and there was $208.7 million outstanding at November 30, 2023, at a weighted average interest rate of 7.52%.
Historically, we have renewed our accounts receivable securitization program and our parent company credit facilities on, or prior to, their respective expiration dates. We have no reason to believe that these and other arrangements will not be renewed or replaced as we continue to be in good credit standing with the participating financial institutions. We have had similar borrowing arrangements with various financial institutions throughout our years as a public company.
We had total outstanding borrowings of approximately $3.9 billion and $4.1 billion as of November 30, 2024 and 2023, respectively. Our outstanding borrowings include Senior Notes of $2.4 billion and $2.5 billion at November 30, 2024 and 2023, respectively and term loans described above as the TD SYNNEX Term Loan and 2024 Term Loan of approximately $1.3 billion and $1.4 billion at November 30, 2024 and 2023, respectively. For additional information on our borrowings, see Note 10 - Borrowings to the Consolidated Financial Statements included in Part II, Item 8 of this Report. Accounts Receivable Purchase Agreements
We have uncommitted accounts receivable purchase agreements under which trade accounts receivable owed by certain customers may be acquired, without recourse, by certain financial institutions. Available capacity under these programs is dependent upon the level of our trade accounts receivable eligible to be sold into these programs and the financial institutions’ willingness to purchase such receivables. In addition, certain of these programs also require that we continue to service, administer and collect the sold accounts receivable. At November 30, 2024 and 2023, we had a total of $1.2 billion and $864.6 million, respectively, of trade accounts receivable sold to and held by financial institutions under these programs. Discount fees for these programs in the years ended November 30, 2024 and 2023 totaled $67.8 million and $51.1 million, respectively.
Share Repurchase Program
In January 2023, our Board of Directors authorized a three-year $1.0 billion share repurchase program. In March 2024, our Board of Directors authorized a new $2.0 billion share repurchase program, supplementing the amount remaining under the existing program, pursuant to which we may repurchase our outstanding common stock from time to time in the open market or through privately negotiated transactions, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Exchange Act. The March 2024 share repurchase authorization does not have an expiration date. We repurchased 5.5 million shares of common stock for $611.9 million and 6.5 million shares of common stock for $620.7 million in fiscal 2024 and 2023, respectively. As of November 30, 2024, we had $1.8 billion available for future repurchases of our common stock. For additional information on our share repurchase program, see Note 5 - Stockholders' Equity to the Consolidated Financial Statements included in Part II, Item 8 of this Report. Covenant Compliance
Our credit facilities have a number of covenants and restrictions that require us to maintain specified financial ratios. They also limit our (or our subsidiaries', as applicable) ability to incur additional debt or liens, enter into agreements with affiliates, modify the nature of our business, and merge or consolidate. As of November 30, 2024, we were in compliance with all material covenants for the above arrangements.
Contractual Obligations
We are contingently liable under agreements, without expiration dates, to repurchase repossessed inventory acquired by flooring companies as a result of default on floor plan financing arrangements by our customers. There have been no material repurchases through November 30, 2024 under these agreements and we are not aware of any pending customer defaults or repossession obligations. As we do not have access to information regarding the amount of inventory purchased from us still on hand with the customer at any point in time, our repurchase obligations relating to inventory cannot be reasonably estimated.
Critical Accounting Policies and Estimates
The discussions and analysis of our consolidated financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in conformity with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we review and evaluate our estimates and assumptions. Our estimates are based on our historical experience and a variety of other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making our judgment about the carrying values of assets and liabilities that are not readily available from other sources. Actual results could differ from these estimates under different assumptions or conditions.
We believe the following critical accounting policies involve the more significant judgments, estimates and/or assumptions used in the preparation of our Consolidated Financial Statements.
Revenue Recognition
We generate revenue primarily from the sale of various IT products.
We recognize revenues from the sale of IT hardware and software as control is transferred to customers, which is at the point in time when the product is shipped or delivered. We account for a contract with a customer when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Binding purchase orders from customers together with agreement to our terms and conditions of sale by way of an executed agreement or other signed documents are considered to be the contract with a customer. Products sold by us are delivered via shipment from our facilities, drop-shipment directly from the vendor, or by electronic delivery of software products. In situations where arrangements include customer acceptance provisions, revenue is recognized when we can objectively verify the products comply with specifications underlying acceptance and the customer has control of the products. Revenue is presented net of taxes collected from customers and remitted to government authorities. We generally invoice a customer upon shipment, or in accordance with specific contractual provisions. Payments are due as per contract terms and do not contain a significant financing component. In relation to product support, supply chain management and other services that we perform, revenue is recognized over time as the services are performed. Service revenues represents less than 10% of the total revenue for the periods presented.
Provisions for sales returns and allowances are estimated based on historical data and are recorded concurrently with the recognition of revenue. A liability is recorded at the time of sale for estimated product returns based upon historical experience and an asset is recognized for the amount expected to be recorded in inventory upon product return. These provisions are reviewed and adjusted periodically. Revenue is reduced for early payment discounts and volume incentive rebates offered to customers, which are considered variable consideration, at the time of sale based on an evaluation of the contract terms and historical experience.
We recognize revenue on a net basis on certain contracts, where our performance obligation is to arrange for the products or services to be provided by another party or the rendering of logistics services for the delivery of inventory for which we do not assume the risks and rewards of ownership, by recognizing the margins earned in revenue with no associated cost of revenue. Such arrangements include supplier service contracts, post-contract software support services, cloud computing and software as a service arrangements, certain fulfillment contracts, extended warranty contracts and certain of our systems design and integration solutions arrangements which operate under a customer-owned procurement model.
We consider shipping and handling activities as costs to fulfill the sale of products. Shipping revenue is included in revenue when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of revenue.
Goodwill, intangible assets and long-lived assets
The values assigned to intangible assets include estimates and judgment regarding expectations for the length of customer relationships acquired in a business combination. Included within intangible assets is an indefinite lived trade name intangible asset. Our indefinite lived trade name intangible asset is considered a single unit of accounting and is tested for impairment at the consolidated level annually as of September 1, and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. No impairment of our indefinite lived trade name intangible asset has been identified for any of the periods presented. Other purchased intangible assets are amortized over the useful lives based on estimates of the use of the economic benefit of the asset or on the straight-line amortization method.
We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination and test for impairment annually as of September 1, or more frequently if events or changes in circumstances indicate that it may be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. The factors that are considered in the qualitative analysis include macroeconomic conditions, industry and market considerations, cost factors such as increases in product cost, labor, or other costs that would have a negative effect on earnings and cash flows; and other relevant entity-specific events and information. We also have the option to bypass the qualitative assessment for any reporting unit in any period.
If the reporting unit does not pass or we choose to bypass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. The assumptions used in the market approach are based on the value of a business through an analysis of sales and other multiples of guideline companies and recent sales or offerings of a comparable entity. The assumptions used in the discounted cash flow approach are based on historical and forecasted revenue, operating costs, working capital requirements, future economic conditions, discount rates, and other relevant factors. The assumptions used in the market and discounted cash flow approaches include inherent uncertainty and actual results could differ from these estimates. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value and the excess is recognized as an impairment loss. No goodwill impairment has been identified for any of the years presented.
We performed our annual goodwill impairment test as of September 1, 2024 as a qualitative assessment, and determined that for all reporting units, it was not more likely than not that the fair value of the reporting unit was less than its carrying value.
We review the recoverability of our long-lived assets, such as finite-lived intangible assets, property and equipment and certain other assets, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows, undiscounted and without interest charges, of the related operations. If these cash flows are less than the carrying value of such assets, an impairment loss is recognized for the difference between estimated fair value and carrying value.
Income taxes
The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements using enacted tax rates and laws that will be in effect when the difference is expected to reverse. Tax on global low-taxed intangible income is accounted for as a current expense in the period in which the income is included in a tax return using the “period cost” method. Valuation allowances are provided against deferred tax assets that are not likely to be realized.
We recognize tax benefits from uncertain tax positions only if that tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes.
Recently Issued Accounting Pronouncements
For a summary of recent accounting pronouncements and the anticipated effects on our consolidated financial statements see Note 2 - Summary of Significant Accounting Policies to the Consolidated Financial Statements included in Part II, Item 8 of this Report. Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Foreign Currency Risk
We are exposed to foreign currency risk in the ordinary course of business. We manage cash flow exposures for our major countries and the foreign currency impact of assets and liabilities denominated in non-functional currencies using a combination of forward contracts. Principal currencies hedged are the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, Czech koruna, Danish krone, Euro, Indian rupee, Indonesian rupiah, Japanese yen, Mexican peso, Norwegian krone, Polish zloty, Romanian leu, Singapore dollar, Swedish krona, Swiss franc and Turkish lira. We do not hold or issue derivative financial instruments for trading purposes.
In order to provide an assessment of our foreign currency exchange rate risk, we performed an analysis using a value-at-risk (“VaR”) model. The VaR model uses a Monte Carlo simulation to generate 1,000 random market price paths. The VaR model determines the potential impact of the fluctuation in foreign exchange rates assuming a one-day holding period, normal market conditions and a 95% confidence level. The model is not intended to represent actual losses but is used as a risk estimation and management tool. Firm commitments, assets and liabilities denominated in foreign currencies were excluded from the model. The estimated maximum potential one-day loss in fair value, calculated using the VaR model, would be approximately $5.4 million and $3.6 million at November 30, 2024 and 2023, respectively. We believe that the hypothetical loss in fair value of our foreign exchange derivatives would be offset by the gains in the value of the underlying transactions being hedged. Actual future gains and losses associated with our derivative positions may differ materially from the analyses performed as of November 30, 2024, due to the inherent limitations associated with predicting the changes in foreign currency exchange rates and our actual exposures and positions.
Interest Rate Risk
We are also exposed to changes in interest rates primarily as a result of our debt used to provide liquidity and to finance working capital, capital expenditures, and acquisitions. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to minimize overall borrowing costs. To achieve our objective, we use a combination of fixed and variable rate debt. The nature and amount of our long-term and short-term debt can be expected to vary as a result of future business requirements, market conditions and other factors.
Certain of our borrowing facilities and our securitization arrangement are variable-rate obligations and expose us to interest rate risks. As of November 30, 2024, we had approximately $1.3 billion of outstanding term loan debt subject to variable interest rates and our subsidiaries had approximately $171.1 million in the aggregate outstanding under debt facilities subject to variable interest rates. The outstanding amount of our borrowings under these facilities may fluctuate in response to changes in our working capital and other liquidity requirements. To the extent that there are changes in interest rates, the interest expense on our variable rate debt may fluctuate. Additionally, discount fees paid to sell accounts receivable under our accounts receivable purchase agreements are impacted by changes in interest rates and expose us to interest rate risks.
A one percentage point (100 basis point) variation in average interest rates would have an impact on annual interest expense of $14.8 million based on the Company's outstanding variable rate debt at November 30, 2024.
Equity Price Risk
The equity price risk associated with our marketable equity securities as of November 30, 2024 and 2023 is not material in relation to our consolidated financial position, results of operations or cash flows. Marketable equity securities include shares of common stock and are recorded at fair market value based on quoted market prices. Gains and losses on marketable equity securities are included in earnings.
Item 8. Financial Statements and Supplementary Data
INDEX
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Financial statement schedules not listed above are either omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or in the Notes thereto.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of ours are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, our management concludes that, as of November 30, 2024, our internal control over financial reporting was effective at the reasonable assurance level based on those criteria.
The effectiveness of our internal control over financial reporting as of November 30, 2024 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears on page 49 of this Report.
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
TD SYNNEX Corporation:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of TD SYNNEX Corporation and subsidiaries (the Company) as of November 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended November 30, 2024, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of November 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended November 30, 2024, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.
Sufficiency of audit evidence over revenue
As discussed in Note 12 to the consolidated financial statements, and presented in the consolidated statements of operations, the Company reported revenue of $58,452,436 thousand for the fiscal year ended November 30, 2024.
We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter. The geographical dispersion of distribution and administrative facilities and employees providing revenue generating services required especially subjective auditor judgment in determining the nature and extent of procedures to perform and in evaluating those procedures.
The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue, including the determination of the locations at which those procedures were to be performed. For certain locations we evaluated the design and tested the operating effectiveness of certain internal controls related to the recognition of revenue. For the Americas and Europe segments, we performed a software-assisted data analysis at a transactional level to identify higher risk revenue records to test. We tested the identified higher risk revenue transactions during the year by comparing the amounts recognized by the Company to relevant underlying documentation such as contracts, shipping documents, or other third-party evidence. For the APJ segment, we tested samples of revenue transactions during the year by comparing the amounts recognized by the Company to relevant underlying documentation such as contracts, shipping documents, or other third-party evidence. We investigated a selection of journal entries that were made by the Company to adjust revenue. We evaluated the sufficiency of the audit evidence obtained over revenue by assessing the results of the procedures performed, including the appropriateness of the determination of locations to perform procedures.
/s/ KPMG LLP
We have served as the Company’s auditor since 2012.
Tampa, Florida
January 24, 2025
TD SYNNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(Currency and share amounts in thousands, except par value)
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| November 30,
2024 | | November 30,
2023 |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | | | | $ | | |
| Accounts receivable, net | | | | | |
| Receivables from vendors, net | | | | | |
| Inventories | | | | | |
| Other current assets | | | | | |
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| Total current assets | | | | | |
| Property and equipment, net | | | | | |
| Goodwill | | | | | |
| Intangible assets, net | | | | | |
| Other assets, net | | | | | |
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| Total assets | $ | | | | $ | | |
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| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Borrowings, current | $ | | | | $ | | |
| Accounts payable | | | | | |
| Other accrued liabilities | | | | | |
|
| Total current liabilities | | | | | |
| Long-term borrowings | | | | | |
| Other long-term liabilities | | | | | |
| Deferred tax liabilities | | | | | |
|
| Total liabilities | | | | | |
| Commitments and contingencies (Note 16) | | | |
| Stockholders’ equity: | | | |
Preferred stock, $ par value, shares authorized, shares issued or outstanding | | | | | |
Common stock, $ par value, shares authorized, shares issued as of both November 30, 2024 and 2023 | | | | | |
| Additional paid-in capital | | | | | |
Treasury stock, and shares as of November 30, 2024 and 2023, respectively | () | | | () | |
| Accumulated other comprehensive loss | () | | | () | |
| Retained earnings | | | | | |
| Total stockholders' equity | | | | | |
| Total liabilities and equity | $ | | | | $ | | |
|
|
|
|
|
|
|
|
|
|
(Amounts may not add or compute due to rounding)
The accompanying Notes are an integral part of these Consolidated Financial Statements.
TD SYNNEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Currency and share amounts in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | |
| Fiscal Years Ended November 30, |
| 2024 | | 2023 | | 2022 |
| Revenue | $ | | | | $ | | | | $ | | |
| Cost of revenue | () | | | () | | | () | |
| Gross profit | | | | | | | | |
| Selling, general and administrative expenses | () | | | () | | | () | |
| Acquisition, integration and restructuring costs | () | | | () | | | () | |
| Operating income | | | | | | | | |
| Interest expense and finance charges, net | () | | | () | | | () | |
| Other expense, net | () | | | () | | | () | |
| Income before income taxes | | | | | | | | |
| Provision for income taxes | () | | | () | | | () | |
| Net income | $ | | | | $ | | | | $ | | |
| Earnings per common share: | | | | | |
| |
| Basic | $ | | | | $ | | | | $ | | |
| |
| Diluted | $ | | | | $ | | | | $ | | |
| Weighted-average common shares outstanding: | | | | | |
| Basic | | | | | |
| Diluted | | | | | |
| |
| |
| |
| |
| |
| |
| |
(Amounts may not add or compute due to rounding)
The accompanying Notes are an integral part of these Consolidated Financial Statements.
TD SYNNEX CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Currency in thousands)
| | | | | | | | | | | | | | | | | |
| Fiscal Years Ended November 30, |
| 2024 | | 2023 | | 2022 |
| Net income | $ | | | | $ | | | | $ | | |
| Other comprehensive (loss) income: | | | | | |
| |
| |
| |
Unrealized gains on cash flow hedges during the period, net of tax expense of $, ($) and $() for fiscal years ended November 30, 2024, 2023 and 2022, respectively | | | | | | | | |
Reclassification of net (gains) losses on cash flow hedges to net income, net of tax expense (benefit) of $, $ and ($) for fiscal years ended November 30, 2024, 2023 and 2022, respectively | | | | () | | | | |
Total change in unrealized (losses) gains on cash flow hedges, net of taxes | | | | () | | | | |
Foreign currency translation adjustments and other, net of tax (expense) benefit of $(), $ and $ for fiscal years ended November 30, 2024, 2023 and 2022, respectively | () | | | | | | () | |
Reclassification of net foreign currency translation adjustment realized upon sale of foreign subsidiary, net of tax expense of $ for the fiscal year ended November 30, 2023 | | | | () | | | | |
| Total change in foreign currency translation adjustments and other, net of taxes | () | | | | | | () | |
| Other comprehensive (loss) income | () | | | | | | () | |
| Comprehensive income | $ | | | | $ | | | | $ | | |
| |
| |
| |
| |
| |
| |
(Amounts may not add or compute due to rounding)
The accompanying Notes are an integral part of these Consolidated Financial Statements.
TD SYNNEX CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Currency and share amounts in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock | | | | Treasury stock | | | | | | |
| Shares | | Amount | | Additional
paid-in capital | | Shares | | Amount | | Accumulated
other
comprehensive income (loss) | | Retained earnings | | Total stockholders' equity |
| Balances, November 30, 2021 | | | $ | | | | $ | | | | | | $ | () | | | $ | () | | | $ | | | | $ | | |
| | | | | | |
| Share-based compensation | — | | — | | | | | | — | | — | | | — | | | — | | | | |
| Issuance of common stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes | | | | | | | | | | | () | | | — | | | — | | | () | |
| Repurchases of common stock | — | | — | | | — | | | | | () | | | — | | | — | | | () | |
Cash dividends declared ($ per share) | — | | — | | | — | | | — | | — | | | — | | | () | | | () | |
| Other comprehensive loss | — | | — | | | — | | | — | | — | | | () | | | — | | | () | |
| Purchase of noncontrolling interest | — | | — | | | | | | — | | — | | | — | | | — | | | | |
| | | | | | |
| Net income | — | | — | | | — | | | — | | — | | | — | | | | | | | |
| Balances, November 30, 2022 | | | | | | | | | | | () | | | () | | | | | | | |
| | | | | | |
| Share-based compensation | — | | — | | | | | | — | | — | | | — | | | — | | | | |
| Issuance of common stock and reissuance of treasury stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes | | | — | | | () | | | () | | | | | — | | | — | | | () | |
| Repurchases of common stock | — | | — | | | — | | | | | () | | | — | | | — | | | () | |
Cash dividends declared ($ per share) | — | | — | | | — | | | — | | — | | | — | | | () | | | () | |
| Other comprehensive income | — | | — | | | — | | | — | | — | | | | | | — | | | | |
| | | | | | |
| Net income | — | | — | | | — | | | — | | — | | | — | | | | | | | |
| Balances, November 30, 2023 | | | | | | | | | | | () | | | () | | | | | | | |
| Share-based compensation | — | | — | | | | | | — | | — | | | — | | | — | | | | |
Reissuance of treasury stock on exercise of options, for employee stock purchase plan and vesting of restricted stock, net of shares withheld for employee taxes | — | | — | | () | | () | | | | — | | — | | () |
| Repurchases of common stock | — | | — | | — | | | | () | | — | | — | | () |
Cash dividends declared ($ per share) | — | | — | | — | | — | | — | | — | | () | | () |
| Other comprehensive loss | — | | — | | — | | — | | — | | () | | — | | () |
| | | | | | |
| Net income | — | | — | | — | | — | | — | | — | | | | |
| Balances, November 30, 2024 | | | $ | | | | $ | | | | | | $ | () | | | $ | () | | | $ | | | | $ | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
(Amounts may not add or compute due to rounding) The accompanying Notes are an integral part of these Consolidated Financial Statements.
TD SYNNEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency in thousands)
| | | | | | | | | | | | | | | | | |
| Fiscal Years Ended November 30, |
| 2024 | | 2023 | | 2022 |
| Cash flows from operating activities: | | | | | |
| Net income | $ | | | | $ | | | | $ | | |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | |
| Depreciation and amortization | | | | | | | | |
| Share-based compensation | | | | | | | | |
| Provision for doubtful accounts | | | | | | | | |
| Deferred income taxes | () | | | () | | | () | |
| |
| |
| Impairment of long-lived assets | | | | | | | | |
| |
| Other | | | | () | | | | |
| Changes in operating assets and liabilities, net of acquisition of businesses: | | | | | |
| Accounts receivable, net | () | | | () | | | () | |
| Receivables from vendors, net | () | | | () | | | | |
| Inventories | () | | | | | | () | |
| Accounts payable | | | | () | | | | |
| Other operating assets and liabilities | () | | | | | | | |
| Net cash provided by (used in) operating activities | | | | | | | () | |
| Cash flows from investing activities: | | | | | |
| Proceeds from sale of fixed assets | | | | | | | | |
| Purchases of property and equipment | () | | | () | | | () | |
| Acquisition of businesses, net of cash acquired | () | | | | | | | |
| Settlement of net investment hedges | () | | | () | | | | |
| Other | () | | | () | | | | |
| Net cash used in investing activities | () | | | () | | | () | |
| Cash flows from financing activities: | | | | | |
| |
| |
| Dividends paid | () | | | () | | | () | |
| Proceeds from issuance of common stock and reissuances of treasury stock | | | | | | | | |
| Repurchases of common stock | () | | | () | | | () | |
| Repurchases of common stock for tax withholdings on equity awards | () | | | () | | | () | |
| Net (repayments) borrowings on revolving credit loans | () | | | () | | | | |
| Principal payments on long-term debt | () | | | () | | | () | |
| Borrowings on long-term debt | | | | | | | | |
| Cash paid for debt issuance costs | () | | | | | | | |
| |
| |
| Other | | | | | | | () | |
| Net cash used in financing activities | () | | | () | | | () | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | () | | | | | | () | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | | | | | | | () | |
| Cash, cash equivalents and restricted cash at beginning of year | | | | | | | | |
| Cash, cash equivalents and restricted cash at end of year | $ | | | | $ | | | | $ | | |
| Supplemental disclosures of cash flow information: | | | | | |
| Interest paid on borrowings | $ | | | | $ | | | | $ | | |
| Income taxes paid | $ | | | | $ | | | | $ | | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
(Amounts may not add or compute due to rounding)
The accompanying Notes are an integral part of these Consolidated Financial Statements.
TD SYNNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency and share amounts in thousands unless otherwise noted, except per share amounts)
NOTE 1—
NOTE 2—
% through % owned affiliated companies are accounted under the equity method where the Company exercises significant influence over operating and financial affairs of the investee and is not the primary beneficiary. Investments in less than % owned companies, where the Company does not have significant influence, are recorded at cost or fair value based on whether the equity securities have readily determinable fair values. reportable segments based on its geographic regions: the Americas, Europe and Asia-Pacific and Japan ("APJ").
or less to be cash equivalents. Cash equivalents consist principally of money market deposit accounts and money market funds that are stated at cost, which approximates fair value. The Company is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with financial institutions are in excess of amounts that are insured.
billion and $ million, respectively. Discount fees related to the sale of trade accounts receivable under these facilities are included in “Interest expense and finance charges, net” in the Consolidated Statements of Operations. During the fiscal years ended November 30, 2024, 2023 and 2022, discount fees were $ million, $ million and $ million, respectively.
- years
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