Core Insights - Investors in the Business - Services sector should consider Concentrix Corporation (CNXC) and Thomson Reuters (TRI) for potential value opportunities [1] Valuation Metrics - CNXC has a forward P/E ratio of 4.14, significantly lower than TRI's forward P/E of 44.92 [5] - CNXC's PEG ratio is 0.57, while TRI's PEG ratio is 5.61, indicating CNXC is more favorably valued in terms of expected earnings growth [5] - CNXC's P/B ratio is 0.72 compared to TRI's P/B of 6.18, further suggesting CNXC is undervalued relative to its book value [6] Earnings Outlook - CNXC holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while TRI has a Zacks Rank of 3 (Hold) [3] - The stronger estimate revision activity for CNXC suggests a more favorable earnings outlook compared to TRI [7] Value Grades - CNXC has a Value grade of A, while TRI has a Value grade of F, highlighting CNXC's superior valuation metrics [6]

Summary of Conference Call Company Overview - The conference call featured Concentrix, with CEO Chris Caldwell and CFO Andre Valentine discussing the company's performance and outlook in the digital transformation sector [1][3]. Key Points Financial Performance - Concentrix reported revenue exceeding guidance, indicating strong momentum in bookings, which is expected to continue into the second half of the year [3][4]. - The company raised its revenue guidance for the latter half of the year due to robust growth in its IX Hello and IX Hero product suites [3][4]. Demand Trends - There is a modest organic acceleration in growth anticipated for the second half of the year, driven by strong bookings related to generative AI capabilities and vendor consolidation trends [5][6]. - Budget caution remains prevalent among clients, particularly for traditional services, but this caution is viewed positively as it allows Concentrix to help clients operate more efficiently [8][10]. Vertical Performance - Strong performance is noted in the BFSI (Banking, Financial Services, and Insurance) sector, with healthcare showing signs of recovery and travel and transportation experiencing unexpected growth [9][10]. - Some sectors, like automotive, are facing challenges due to tariffs, but overall, there is steady growth across various verticals [9][10]. Tariff Impact - Clients are adapting to tariff changes, leading to more resilient supply chains, although ongoing tariff fluctuations continue to create uncertainty [12][13]. Margin and Delivery Mix - The company anticipates a positive margin trajectory as investments in generative AI tools reach breakeven and begin to contribute positively to margins [15][17]. - The shift towards offshore services is creating a short-term revenue headwind but is expected to be accretive to margins in the long term [18][19]. Platform Strategy and AI - Concentrix's strategy has increasingly focused on technology-led solutions, with a significant portion of new deals being multi-pillar transformational rather than standard services [21][22]. - The acquisition of Catalyst (formerly Prokarma) is seen as a go-to-market enabler, enhancing the company's technical capabilities [24][25]. AI Product Adoption - The IX Hello and IX Hero products are seeing increased adoption, with Concentrix claiming to have one of the largest deployments of AI across desktops in the industry [28][29]. - The IX Hello platform focuses on complete automation, while the company is cautious about deployment to protect brand integrity and ensure data readiness [31][32]. Competitive Landscape - Concentrix differentiates itself from pure-play AI vendors by emphasizing compliance, regulatory considerations, and the integration of complex customer journeys [34][36]. - The company is positioned to compete effectively against larger players by offering a full suite of services and solutions [43][44]. Future Outlook - The company sees significant growth potential in adjacent services, particularly in data annotation, which is expected to drive future revenue streams [50][51]. - Concentrix remains open to M&A opportunities, focusing on client needs and potential synergies to enhance its service offerings [52][53]. Strategic Vision - The leadership expressed excitement about the company's investments over the past years coming to fruition, positioning Concentrix favorably in an expanding marketplace [57]. Additional Insights - The integration of the WebHelp acquisition has been successful, achieving synergy targets and enhancing the company's footprint in Europe and Latin America [55][56].

Core Insights - Concentrix Corporation has launched the latest version of iX Hero, enhancing customer interactions and enabling entry into new markets [1][5] - The new features, Harmony and Clarity, utilize agentic AI to improve customer experience by ensuring clearer communication and reducing background noise [2][5] - The implementation of these technologies has resulted in a 33.6% increase in Communication Scores and a 22.3% rise in Net Promoter Scores [3] Product Features - iX Hero Harmony optimizes speech patterns for better clarity while maintaining natural voice quality [2] - iX Hero Clarity focuses on background noise suppression to enhance audio quality during customer interactions [2] Client Impact - PODS, a leader in moving and storage, reports improved customer experience and increased sales close rates due to the use of iX Hero [4] - The integration of iX Hero allows clients to streamline interactions and gain insights more efficiently [4] Market Positioning - The latest iX Hero release is designed for scalability and is equipped with high-level security and compliance features [5] - It is optimized for customer experience teams located in the Philippines, India, and Latin America, facilitating global operations [5] Company Overview - Concentrix Corporation is a Fortune 500 company that provides technology and services solutions to over 2,000 clients across various industries [6] - The company focuses on delivering integrated solutions that address complex business challenges, leveraging unique data and advanced technology [6]

Revenue and Income - For the three months ended May 31, 2025, revenue was $2,417,371 thousand, a 1.5% increase compared to $2,380,716 thousand for the same period in 2024[129]. - For the six months ended May 31, 2025, revenue was $4,789,593 thousand, a 0.1% increase compared to $4,783,464 thousand for the same period in 2024[129]. - The net income for the three months ended May 31, 2025, was $42,093 thousand, down from $66,834 thousand for the same period in 2024[129]. - Non-GAAP operating income for the three months ended May 31, 2025, was $303,709,000, compared to $321,145,000 for the same period in 2024, reflecting a decrease of approximately 5.4%[160]. - Net income for the three months ended May 31, 2025, was $42,093,000, down from $66,834,000 in the same period in 2024, representing a decline of about 37.0%[160]. Costs and Expenses - The cost of revenue for the three months ended May 31, 2025, was $1,569,223 thousand, compared to $1,523,147 thousand for the same period in 2024[129]. - Cost of revenue for the three months ended May 31, 2025, was $1,569,223 thousand, a 3.0% increase from $1,523,147 thousand in the same period of 2024, while for the six months it was $3,085,546 thousand, a 0.5% increase from $3,069,366 thousand[135]. - Selling, general and administrative expenses decreased by 1.1% in the three months ended May 31, 2025, to $699,803 thousand from $707,399 thousand, and by 2.0% in the six months to $1,386,835 thousand from $1,415,489 thousand[140][142]. - Interest expense and finance charges, net for the three months ended May 31, 2025, decreased by 8.6% to $75,406 thousand from $82,457 thousand, and for the six months it decreased by 10.0% to $148,400 thousand from $164,896 thousand[147][149]. - Other expense (income), net for the three months ended May 31, 2025, was an expense of $21,218 thousand compared to income of $19,415 thousand in the prior year, and for the six months it was an expense of $16,299 thousand compared to income of $26,239 thousand[150][152]. Profitability Metrics - The gross profit for the six months ended May 31, 2025, was $1,704,047 thousand, compared to $1,714,098 thousand for the same period in 2024[129]. - Gross profit for the three months ended May 31, 2025, decreased by 1.1% to $848,148 thousand from $857,569 thousand in the prior year, and for the six months it decreased by 0.6% to $1,704,047 thousand from $1,714,098 thousand[138][139]. - Operating income for the three months ended May 31, 2025, was $148,345 thousand, a decrease of 1.2% from $150,170 thousand, while for the six months it increased by 6.2% to $317,212 thousand from $298,609 thousand[143][145]. - The operating margin for the three months ended May 31, 2025, was 6.1%, compared to 6.3% for the same period in 2024, reflecting a slight decline[160]. Cash Flow and Liquidity - Free cash flow for the six months ended May 31, 2025, was not explicitly stated but is considered a meaningful measure of cash flows, indicating ongoing operational needs[158]. - Net cash provided by operating activities increased to $237.9 million for the six months ended May 31, 2025, up from $191.5 million in the same period of 2024, primarily due to favorable working capital changes[189]. - Net cash used in investing activities decreased to $107.1 million for the six months ended May 31, 2025, compared to $120.6 million for the same period in 2024, mainly due to a reduction in capital expenditures[190]. - Free cash flow for the six months ended May 31, 2025, was $131.5 million, an increase from $75.3 million in the same period of 2024, attributed to higher cash from operating activities and lower capital expenditures[193]. - Adjusted free cash flow rose to $160.5 million for the six months ended May 31, 2025, compared to $120.6 million in the prior year, driven by increased free cash flow[194]. - Total liquidity as of May 31, 2025, was $1,524.8 million, including $1,100.0 million in undrawn capacity on the revolving credit facility[195]. - Cash and cash equivalents totaled $342.8 million as of May 31, 2025, compared to $240.6 million as of November 30, 2024, with 99% held by non-U.S. legal entities[196]. Debt and Financing - The acquisition of Webhelp was completed on September 25, 2023, with a purchase consideration valued at approximately $3,774.8 million[118]. - The company funded the Webhelp Combination through proceeds from an August 2023 offering, term loan borrowings, and cash on hand, highlighting strategic financing efforts[162]. - The board of directors authorized a share repurchase program of up to $600 million, with approximately $537.0 million remaining available for repurchases as of May 31, 2025[163]. - The company issued $800 million of 6.650% Senior Notes due 2026 and $800 million of 6.600% Senior Notes due 2028 on August 2, 2023[167]. - A total of $500 million of Senior Notes was converted into synthetic fixed euro-based debt at weighted average interest rates of 5.12% and 5.18%[169]. - The Restated Credit Agreement includes a $750 million unsecured term loan facility and a $1.1 billion revolving credit facility, with a consolidated leverage ratio not to exceed 3.75 to 1.00[172][176]. - As of May 31, 2025, the outstanding principal balance on term loans was $1,350 million, with a voluntary prepayment of $150 million made during the period[177]. - The Securitization Facility was amended to increase borrowing capacity from $600 million to $700 million and extend the termination date to January 14, 2027[180]. - The company issued a Sellers' Note of €700 million as part of the Webhelp Combination, with principal and interest due on September 25, 2025[184]. - As of May 31, 2025, the company was in compliance with all debt covenants related to its debt arrangements[186]. Foreign Currency Exposure - Approximately 89% of consolidated revenue for the six months ended May 31, 2025, was generated from non-U.S. operations[122]. - The unfavorable foreign currency rate impact on revenue for the six months ended May 31, 2025, was $61.9 million, or 1.3%[132]. - Revenue for the six months ended May 31, 2025, increased in retail, travel and e-commerce (up 1.4%), communications and media (up 0.3%), and banking, financial services and insurance (up 0.8%), while it decreased in technology and consumer electronics (down 0.2%), healthcare (down 0.4%), and other verticals (down 3.2%) due to foreign currency exchange rates[134]. - Approximately 55% of the company's revenue is priced in U.S. dollars, with significant exposure to other currencies, which may adversely affect revenue when translated into U.S. dollars[199]. - The company has hedged a portion of its foreign currency exposure, with potential losses in fair value estimated at $108.4 million from a hypothetical 10% adverse change in exchange rates[200].

Core Insights - Concentrix Corporation released its 2025 Sustainability Report titled "The Power of One," highlighting its progress towards 2030 ESG goals across various domains including climate action, culture, innovation, community impact, and ethical business practices [1][2] Group 1: Sustainability Strategy - The sustainability strategy is integrated into Concentrix's long-term growth plan, focusing on innovation, operational efficiency, and stakeholder trust [2] - The company emphasizes resource efficiency and risk management to enhance operational resilience and profitability [4] Group 2: Environmental Impact - Concentrix has reduced carbon emissions by 27% compared to the 2019 baseline and is on track to meet its 2030 reduction target of 50% [6] - Energy efficiency initiatives have decreased global energy consumption from 421 million kWh in 2019 to 379 million kWh in 2024, resulting in lower operating costs [6] Group 3: Community Engagement - The Think Human Fund, a non-profit supported by Concentrix, funded 69 projects across 42 countries, benefiting over 58,000 individuals in 2024 [6] Group 4: Innovation and Culture - The internal Carbon Challenge platform has engaged over 12,000 employees in reducing their carbon footprint, fostering accountability in sustainability efforts [6] - Concentrix has been recognized for its company culture and benefits, receiving accolades for Best Company Culture and Best Benefits in Wellness & Wellbeing [6]

Group 1 - U.S. stock futures are higher, with Dow futures gaining over 100 points [1] - Concentrix Corporation reported quarterly earnings of $2.70 per share, missing the analyst consensus estimate of $2.75, while quarterly revenue was $2.42 billion, exceeding the Street estimate of $2.38 billion [1] - Concentrix shares fell 8% to $50.70 in pre-market trading [1] Group 2 - CorMedix Inc. declined 14.2% to $12.83 after announcing an $85 million public offering [4] - Critical Metals Corp. fell 14.2% to $3.14 after a previous surge of over 32% [4] - AdaptHealth Corp. decreased 8.6% to $8.61 after gaining around 5% on the previous day [4] - USA Rare Earth, Inc. declined 8.4% to $11.65 [4] - Gold Fields Limited fell 5.1% to $22.60 [4] - OMS Energy Technologies Inc. decreased 4.6% to $6.80 [4]

Group 1 - Concentrix Corporation (CNXC) reported quarterly earnings of $2.7 per share, missing the Zacks Consensus Estimate of $2.76 per share, but showing an increase from $2.69 per share a year ago, resulting in an earnings surprise of -2.17% [1] - The company posted revenues of $2.42 billion for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 1.57%, and compared to year-ago revenues of $2.38 billion [2] - Concentrix shares have increased approximately 25.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 3.6% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $2.88 on revenues of $2.39 billion, and for the current fiscal year, it is $11.57 on revenues of $9.56 billion [7] - The Zacks Industry Rank indicates that the Business - Services sector is currently in the top 27% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

Financial Data and Key Metrics Changes - The company reported revenue of approximately $2,400,000,000 for Q2, an increase of 1.5% year on year on both a constant currency and reported basis [14] - Adjusted free cash flow was $200,000,000 in the quarter, an improvement of about $240,000,000 sequentially from Q1 [17] - Non-GAAP diluted EPS was $2.7 per share, an increase of $0.1 year on year [17] - GAAP net income was $42,000,000 for the quarter, with GAAP diluted EPS at $0.63 per share [17] Business Line Data and Key Metrics Changes - Revenue from retail, travel, and e-commerce clients grew 3% year on year, led by growth with travel clients [15] - Media and Communications also grew 3% year on year, while revenue from banking, financial services, and insurance clients grew 2% [15] - The tech and healthcare verticals were relatively flat, reflecting offshore movement [15] Market Data and Key Metrics Changes - The company is seeing a strong pipeline across verticals and geographies, with a favorable mix of services and margin profiles [7] - A Gartner study revealed that 85% of enterprises expect to increase their outsourcing budget over the next two to three years, primarily for AI initiatives [9] Company Strategy and Development Direction - The company is focused on delivering integrated technology-led solutions that align with client needs and expanding the value provided across a broader portfolio of business solutions [12] - The strategy includes automating or de-investing in commodity work to keep the underlying business healthy [12] - The company is well-positioned against competitors, particularly for large-scale programs that combine consulting, IT integration, CX expertise, and AI [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, expecting revenue and margin improvement as investments made begin to pay off [12][23] - The company anticipates a steady acceleration in growth rates and is committed to driving strong year-on-year free cash flow growth [23] - Management noted that clients are centralizing spend with partners that have scale, breadth, and expertise to deliver real-world solutions [12] Other Important Information - The company returned approximately $67,000,000 to shareholders in the quarter, including share repurchases and dividends [18] - Cash and cash equivalents at the end of the quarter were $343,000,000, with total debt at approximately $4,900,000,000 [18] Q&A Session Summary Question: What is the outlook for revenue acceleration in the second half? - Management indicated that momentum is broad-based across verticals and geographies, with positive trends in banking, tech, and media [28] Question: How is AI impacting the company's market position? - The company has seen strong adoption of its AI solutions, with clients increasingly interested in practical applications rather than hype [10][36] Question: What caused the margin decline in Q2? - The margin decline was primarily due to clients pausing projects in response to tariffs, but management expects margins to improve in Q3 [16][44] Question: What is the expected revenue contribution from IX Hello and IX Hero? - Management expects these AI offerings to be accretive by the end of Q4 and sees potential for revenue growth without increasing spending [54] Question: How is the company addressing pricing dynamics? - There is growing interest in outcomes-based pricing, but the company still primarily operates on a transactional basis [87]

Financial Data and Key Metrics Changes - The company reported revenue of approximately $2,400,000,000 for Q2, an increase of 1.5% year on year on both a constant currency and as reported basis [14] - Adjusted free cash flow was $200,000,000 in the quarter, an improvement of about $240,000,000 sequentially from Q1 [18] - Non-GAAP diluted EPS was $2.7 per share, an increase of $0.1 year on year [17] - GAAP net income was $42,000,000 for the quarter, with GAAP diluted EPS at $0.63 per share [17] Business Line Data and Key Metrics Changes - Revenue from retail, travel, and e-commerce clients grew 3% year on year, led by growth with travel clients [15] - Media and Communications also grew 3% year on year, while revenue from banking, financial services, and insurance clients grew 2% [15] - The tech and healthcare verticals were relatively flat, reflecting offshore movement [15] Market Data and Key Metrics Changes - The company is seeing a strong pipeline across verticals and geographies, with a positive sentiment from clients regarding increased outsourcing budgets [9][10] - A Gartner study revealed that 85% of enterprises expect to increase their outsourcing budget over the next two to three years, primarily to support their AI agenda [9] Company Strategy and Development Direction - The company is focused on delivering integrated technology-led solutions that align with client needs and expanding the value provided across a broader portfolio of business solutions [12] - The strategy includes automating or de-investing in commodity work to keep the underlying business healthy [12] - The company is well-positioned against competitors, particularly for large-scale programs that combine consulting, IT integration, CX expertise, and AI [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, expecting revenue and margin improvement due to a strong pipeline and new business signed [20][22] - The company anticipates meaningful sequential margin improvement in both Q3 and Q4, driven by the recovery from the tariff impact and ongoing investments in technology [16][22] - Management noted that clients are looking for pragmatic solutions and are increasingly centralizing spend with partners that have scale and expertise [12][13] Other Important Information - The company returned approximately $67,000,000 to shareholders in the quarter, including share repurchases and dividends [19] - Cash and cash equivalents at the end of the quarter were $343,000,000, with total debt at approximately $4,900,000,000 [19] Q&A Session Summary Question: Revenue acceleration in the second half - Management indicated that revenue acceleration is broad-based, with solid pipeline building across geographies and verticals, particularly in banking, tech, and media [28] Question: AI technology journey and market recognition - Management highlighted strong market traction for their AI products, with clients adopting their technology faster than expected and seeing significant growth in adjacent services [36] Question: Margin impacts in Q2 - Management explained that margins were impacted by clients pausing projects due to tariffs, but they expect margins to improve as clients resume projects and new business ramps up [40][42] Question: Revenue contribution from IX Hello and IX Hero - Management expects IX suite products to be accretive by the end of Q4 and plans to maintain spending while accelerating revenue growth [54] Question: Operating environment and sales cycles - Management noted that transformation deals are taking longer but are not shrinking, and they are seeing good win rates in their pipeline [62] Question: Pricing strategy evolution - Management mentioned an increasing interest in outcomes-based pricing but noted that traditional transactional pricing still dominates their revenue streams [87]

Core Insights - Concentrix Corp. reported second-quarter earnings of $2.70 per share, missing the analyst consensus estimate of $2.75, while quarterly revenue was $2.42 billion, exceeding the Street estimate of $2.38 billion [1][4] Financial Performance - The company experienced mid-quarter volatility but continued to outperform expectations on revenue growth [2] - Concentrix narrowed its fiscal 2025 adjusted EPS guidance to between $11.53 and $11.76, compared to the previous range of $11.18 to $11.77 and the analyst estimate of $11.54 [3] - The fiscal 2025 revenue outlook was raised from a range of $9.49 billion to $9.63 billion to a new range of $9.72 billion to $9.81 billion, surpassing the $9.61 billion estimate [4] Future Outlook - The CEO indicated an accelerated pace of activity with both existing and new clients, along with improving margins [3] - Investments in AI are expected to be accretive to the business by year-end as planned [3]