Concentrix (NASDAQ:CNXC) executives emphasized continued progress in shifting the company toward higher-value, technology-enabled services during its fourth-quarter and fiscal 2025 earnings call, while also outlining a 2026 outlook that factors in deliberate revenue headwinds tied to portfolio reshaping and client cost optimization.
Strategy: moving up the value chain with technology and complex work
President and CEO Chris Caldwell said the company has been executing an internal plan launched at the start of fiscal 2025 to accelerate its evolution into what he described as a “high-value intelligent transformation partner.” He said the effort centered on four actions: focusing on complex and high-value services, expanding share of wallet as clients consolidate vendors, leveraging Concentrix’s own intellectual property and platforms, and driving efficiencies to fund growth investments.
Sales execution and client consolidation cited as growth drivers
Caldwell said Concentrix invested “a little over $25 million” of incremental spend in fiscal 2025 to retool go-to-market capabilities, including retraining its sales and account management team, upgrading 25% of the team with enterprise sellers, investing in subject matter experts supporting technology solutions, and developing clearer vertical offerings and a partner organization.
He pointed to several pipeline and bookings indicators exiting fiscal 2025, including:
- A 6% increase in annual contract value of deals in the pipeline
- A 9% increase in new wins year over year
- A 14% increase in transformational deal values
- A 23% increase in cross-sell and upsell deals
- A 37% increase in values for new service areas
Caldwell also said consolidation wins reached record highs in fiscal 2025, and that 98% of Concentrix’s top 50 clients now rely on the company for more than one solution.
AI platform investment reaches break-even; attach rate rises
Caldwell described fiscal 2025 as a pivotal year for the company’s technology roadmap, highlighting the launch of its IX Suite AI platform. He said Concentrix made more than $25 million of incremental investment in fiscal 2025 to develop, productize, and commercialize the offering, and exited the year with more than $60 million in annualized AI revenue from its own platform, reaching break-even as planned.
Beyond its own platform, Caldwell said Concentrix also sells third-party AI solutions and helps clients deploy their own AI investments. He added that more than 40% of new business now includes some form of Concentrix technology, which he said was ahead of internal expectations.
In the Q&A, Caldwell said the company aims to keep AI investments “accretive” and described the market as “crowded and competitive,” adding that Concentrix is running the business “very much like a startup” in order to drive returns. He also said the company’s investment decisions are not tied to call volumes but instead to the type of services a client needs and the potential for long-term, multi-solution relationships.
Quarterly and full-year results: revenue growth and record cash flow, but GAAP loss due to impairment
Chief Financial Officer Andre Valentine said Concentrix delivered fourth-quarter revenue of about $2.55 billion, representing 3.1% constant-currency growth, above the high end of guidance provided in September. By vertical in the quarter, he said constant-currency revenue grew 11% in banking, financial services and insurance, 7% in communications and media, 7% in travel, and 7% in “other” (primarily automotive). Technology and consumer electronics and healthcare each declined about 2%, which Valentine attributed to offshore movement and underlying volumes.
For profitability in the quarter, Valentine reported non-GAAP operating income of $323 million and a non-GAAP operating margin of 12.7%, up 40 basis points sequentially from the third quarter as the company worked through overcapacity issues discussed earlier in the year. Adjusted EBITDA was $379 million, a 14.8% margin. Non-GAAP net income was $192 million and non-GAAP diluted EPS was $2.95.
Valentine also reported that Concentrix generated more than $287 million of adjusted free cash flow in the quarter, a quarterly record. The company returned nearly $80 million to shareholders in the quarter through a dividend and $56 million in share repurchases.
On a GAAP basis, Valentine said the company recorded a $1.52 billion non-cash goodwill impairment charge in the quarter, which he said reflected the trading range of the stock during the period.
For fiscal 2025, Valentine said Concentrix delivered 2.1% constant-currency growth, above the high end of its prior guidance range, with non-GAAP operating income of $1.254 billion and a non-GAAP operating margin of 12.8%. Adjusted free cash flow was $626 million, up 32% and more than $150 million higher than the prior year, which Valentine described as a record.
Capital returns for fiscal 2025 totaled $258 million, including $169 million of share repurchases (nearly 3.6 million shares at an average price of about $47) and about $89 million in dividends. Valentine said the company reduced net debt by about $184 million during the year. At year-end, cash and cash equivalents were $327 million, total debt was $4.639 billion, and net debt was $4.311 billion. Valentine said liquidity was nearly $1.6 billion, including an undrawn $1.1 billion line of credit.
2026 outlook includes revenue headwinds from planned portfolio actions
For fiscal 2026, Valentine guided to reported revenue of $10.035 billion to $10.180 billion, implying constant-currency growth of 1.5% to 3%. He said the outlook assumes a 60-basis-point positive foreign exchange impact versus fiscal 2025, based on current rates.
He also detailed offsets within the revenue outlook, including an expected 1% revenue impact in fiscal 2026 from the proactive reduction of non-complex work and a 2% impact from repositioning work to optimize clients’ cost structures.
On earnings, Valentine guided to full-year non-GAAP operating income of $1.24 billion to $1.29 billion and non-GAAP EPS of $11.48 to $12.07. The guidance assumes about $257 million in interest expense, roughly 60.6 million diluted shares, about 4.9% of net income attributable to participating securities, and an effective tax rate of about 25%.
Valentine said the company expects sequential quarterly increases in non-GAAP operating income in the second half of fiscal 2026, driven by removing duplicate costs, simplifying the business, accelerating growth, and progressing delivery of transformational deals won in fiscal 2025. In response to a margin question, management reiterated expectations for margin improvement in the back half of the year as overcapacity issues, implementation timing, and automation/simplification efforts progress.
For cash flow, Valentine guided to adjusted free cash flow of $630 million to $650 million in fiscal 2026, supported by higher income and lower interest expense. He said Concentrix expects share repurchases in fiscal 2026 to be similar to fiscal 2025, while maintaining “investment-grade principles,” paying down debt toward a target leverage ratio, and supporting the dividend.
For the first quarter, Concentrix guided to revenue of $2.475 billion to $2.50 billion, implying constant-currency growth of 1.5% to 2.5%. The company expects a 290-basis-point positive FX impact compared with the first quarter of fiscal 2025. Non-GAAP operating income is expected to be $290 million to $300 million and non-GAAP EPS is expected to be $2.57 to $2.69. Valentine added that adjusted free cash flow in the first quarter is expected to be slightly negative, consistent with typical seasonality, but improved from the prior-year first quarter.
In additional discussion, Caldwell said the “traditional CX market is flat overall,” while other services are growing at “mid-single digits,” and he said some specialized and adjacent services now represent close to 20% of revenue and are growing at high single digits. He also said the WebHelp acquisition met synergy expectations and slightly exceeded cost takeout goals, and that the combined footprint has helped win consolidation work, particularly involving moves from Europe to other markets. On acquisitions, he said Concentrix will be opportunistic but has nothing currently “in the works.”
About Concentrix (NASDAQ:CNXC)
Concentrix Inc (NASDAQ: CNXC) is a global business services company specializing in customer engagement solutions and technology‐driven business process outsourcing. The firm’s offerings encompass customer care delivered across voice and digital channels, back‐office processing, analytics and consulting, and automated workflow management. By integrating proprietary platforms, strategic partnerships and advanced automation, Concentrix helps clients enhance customer experiences and streamline operations.
Its capabilities extend to digital marketing and technology implementation, leveraging artificial intelligence, machine learning and data analytics to optimize customer journeys.
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