Concentrix(US:CNXC)2025-07-03 12:01Revenue 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].