Derivatives

6 Months Ended

Nov. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

13. DERIVATIVES

Derivatives Not Designated as Hedging Instruments

We forecast our net exposure in various receivables and payables to fluctuations in the value of various currencies, and have entered into a number of foreign currency forward contracts each month to mitigate that exposure. These contracts are recorded net at fair value on our condensed consolidated balance sheets, classified as Level 2 in the fair value hierarchy. Gains and losses from these contracts are recognized in other income in our condensed consolidated statements of operations. The notional amount of forward contracts in place was $65,041 and $15,500 as of November 30, 2023 and May 31, 2023, respectively, and consisted of hedges of transactions up to January 2024.

Fair Value of Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	November 30, 2023			May 31, 2023
Foreign currency forward contracts, net	Other (payable) receivable	$	(389	)	$	140

The location and amount of gains (losses) from derivatives not designated as hedging instruments in our condensed consolidated statements of operations were as follows:

		Three Months Ended
Derivatives Not Designated as Hedging Instruments	Location in statements of operations	November 30, 2023			November 30, 2022
Foreign currency forward contracts	Other expense	$	(221	)	$	(9,128	)

		Six Months Ended
Derivatives Not Designated as Hedging Instruments	Location in statements of operations	November 30, 2023			November 30, 2022
Foreign currency forward contracts	Other expense	$	(541	)	$	(8,248	)

Derivatives Designated as Hedging Instruments

In November 2022, we entered into a receive-variable, pay-fixed interest rate swap agreement with an initial $250,000 notional value, which is designated as a cash flow hedge. This agreement fixed a portion of the variable interest due on our term loan facility, with an effective date of December 2, 2022 and a maturity date of June 30, 2027. Under the terms of the agreement, we pay a fixed interest rate of 4.215%, plus an applicable margin ranging between 150 to 225 basis points and receive a variable rate of interest based on term SOFR from the counterparty, which is reset according to the duration of the SOFR term. The fair value of the interest rate swap as of November 30, 2023 and May 31, 2023 was a net asset (liability) of $745 and ($2,683), respectively. The Company expects to reclassify a $2,265 gain of accumulated other comprehensive income into earnings in the next 12 months.

We record the fair value of our interest rate swaps on a recurring basis using Level 2 observable market inputs for similar assets or liabilities in active markets.

Fair Value of Derivatives Designated as Hedging Instruments	Balance Sheet Location	November 30, 2023			May 31, 2023
Interest rate swap – current	Other current assets	$	2,265		$	2,087
Interest rate swap – non-current	Other non-current liabilities		(1,521	)		(4,770	)

The following table summarizes the other comprehensive income before reclassifications of derivative gains and losses:

	Other Comprehensive Income Before Reclassifications During
	Three Months Ended					Six Months Ended
Derivatives Designated as Hedging Instruments	November 30, 2023		November 30, 2022			November 30, 2023		November 30, 2022
Interest rate swaps	$	229	$	(2,428	)	$	3,708	$	(2,428	)

The following table summarizes the reclassification of derivative gains and losses into net loss from accumulated other comprehensive income (loss):

		Gain Reclassified During
		Three Months Ended				Six Months Ended
Derivatives Designated as Hedging Instruments	Location of Gain Reclassified	November 30, 2023		November 30, 2022		November 30, 2023		November 30, 2022
Interest rate swaps	Interest expense	$	580	$	—	$	1,103	$	—