Concentrix(US:CNXC)2026-01-28 21:07Financial Performance - For the fiscal year ended November 30, 2025, revenue was $9,825.8 million, an increase from $9,618.9 million in 2024, representing a growth of approximately 2.2%[213] - The cost of revenue for fiscal year 2025 was $6,390.8 million, compared to $6,170.0 million in 2024, resulting in a gross profit of $3,435.0 million, slightly down from $3,448.9 million in 2024[213] - Net income for fiscal year 2025 was a loss of $1,278.9 million, a significant decline from a net income of $251.2 million in 2024[213] - Revenue for fiscal year 2025 increased by 2.2% to $9,825,771,000 compared to $9,618,900,000 in fiscal year 2024[215] - Revenue growth was driven by increases in retail, travel and e-commerce (3.0%), communications and media (4.2%), and banking, financial services and insurance (5.5%) verticals[216] - Gross profit decreased by 0.4% to $3,435,011,000, with gross margin percentage declining from 35.9% to 35.0%[220] - Operating loss for fiscal year 2025 was $918,183,000, compared to an operating income of $596,387,000 in fiscal year 2024[224] - Free cash flow for fiscal year 2025 was negative at $(918,183) thousand, compared to $596,387 thousand in fiscal year 2024[238] - Adjusted EBITDA for fiscal year 2025 was $1,469,319 thousand, compared to $1,554,925 thousand in fiscal year 2024, reflecting a margin of 15.0%[238] Impairment and Charges - The company recorded impairment charges of $1,527.7 million in fiscal year 2025, leading to an operating loss of $918.2 million, compared to an operating income of $596.4 million in 2024[213] - Impairment charges amounted to $1,527,726,000, representing 15.5% of revenue, primarily due to a non-cash goodwill impairment charge[223] Revenue Sources and Client Base - Approximately 89% of consolidated revenue in fiscal years 2025 and 2024 was generated from non-U.S. operations, with 54% of revenue priced in U.S. dollars in 2025[191] - No client accounted for more than 10% of consolidated revenue in fiscal years 2025 and 2024, indicating a diversified client base[240] Acquisition and Growth Strategy - The company completed the acquisition of Webhelp for approximately $3,774.8 million on September 25, 2023, enhancing its service capabilities[187] - The company expects continued revenue growth to be influenced by foreign currency exchange rates and inflation in local economies[191] - The company expects to expand operations through investments or acquisitions, requiring initial investments in working capital and facilities[241] Debt and Financing - The company issued $800 million of 6.650% Senior Notes due 2026 and $800 million of 6.600% Senior Notes due 2028 in August 2023[246] - The Restated Credit Agreement includes a New Term Loan Facility of up to $750 million, a 3-Year DD Term Loan Facility of up to $250 million, and a 5-Year DD Term Loan Facility of up to $500 million, along with a Revolving Credit Facility of up to $1.1 billion[253] - As of November 30, 2025, the outstanding principal balance on term loans was $1,966 million, an increase from $1,500 million in 2024, with a voluntary prepayment of $275 million made during the fiscal year[259] - The company is in compliance with all debt covenants related to its debt arrangements as of November 30, 2025[266] Cash Flow and Liquidity - Net cash provided by operating activities for fiscal year 2025 was $806.97 million, up from $667.49 million in 2024, primarily due to increased net income and reduced acquisition-related costs[269] - Free cash flow for fiscal year 2025 was $572.47 million, compared to $428.73 million in 2024, reflecting an increase in operating cash flow and a decrease in capital expenditures[274] - Adjusted free cash flow for fiscal year 2025 was $626.40 million, up from $474.52 million in 2024, driven by increased free cash flow and changes in outstanding factoring balances[275] - Total liquidity as of November 30, 2025, was $1,592.4 million, including $1.1 billion in undrawn capacity on the Revolving Credit Facility and $163 million under the Securitization Facility[276] - The company had cash and cash equivalents totaling $329.4 million as of November 30, 2025, with 98% held by non-U.S. legal entities[277] Market and Currency Risks - Approximately 54% of the company's revenue is priced in U.S. dollars, exposing it to foreign currency risk from contracts denominated in euros, British pounds, Japanese yen, and Brazilian real[285] - The company has hedged a portion of its foreign currency exposure by entering into contracts to acquire PHP 43,480.0 million at a fixed price of $750.4 million and INR 28,430.0 million at a fixed price of $320.1 million, both through November 2027[286] - A hypothetical 10% adverse change in foreign currency exchange rates could result in a potential loss of approximately $105.0 million in fair value for the company's hedging contracts[286] - The company’s variable-rate debt exposes it to interest rate risk, with a 100 basis point increase in interest rates estimated to increase interest expense by approximately $24.4 million per year[288] Tax and Regulatory Matters - The company has established a reserve of $95.0 million for unrecognized tax benefits as of November 30, 2025[281] - Provision for income taxes increased by 101.2% to $96,702,000, influenced by geographical income mix and foreign tax rate changes[230] Operational Efficiency - Selling, general and administrative expenses decreased by 0.9% to $2,825,468,000, representing 28.8% of revenue, down from 29.7%[222] - The company manages market risks through regular operating and financing activities and the use of derivative financial instruments[284] - The company recognizes foreign exchange exposure due to costs being denominated in local currencies where services are performed, impacting overall financial performance[286]