Concentrix (CNXC) 28 Sep 212021 Q3 Earnings call transcript

00:01 Good day ladies and gentleman, and welcome to Concentrix's Fiscal Third Quarter Twenty Twenty One Financial Results Conference Call. At this time, all participant lines are in a listen-only mode. Later we will conduct the question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder today’s call is being recorded. [Operator Instructions]

like David the Relations. Stein, now your over would today, host Vice I to call turn to XX:XX President, Investor go ahead. Please

Concentrix or is the X:XX Welcome of Concentrix twenty and Sarah not property the earnings third be permission may the Concentrix. recorded one call Thank twenty without quarter This good call. and fiscal rebroadcast you to morning. of

uncertainties that that statements expressed call address We our earnings different These and release contains are our update filings performance to of matters address Form forward-looking for information materially risk that the ten not forward-looking K. results. recent cause new additional do Annual future and by This SEC in actual or in nature with the statements includes X:XX on future result their financial uncertainties be statements. factors our our or results future information provided as affect yesterday’s our that may uncertain. expected developments. our undertake This our to forward-looking those could regarding events most a to future Please refer Report than

EBITDA revenue during Concentrix adjusted as these will Relations the call, adjusted financial as Investor the available release non-GAAP including EPS non-GAAP cash growth. website in currency A Also is flow, reconciliation operating adjusted on measures income, discuss constant free well non-GAAP under news and XX:XX measures, we and of Financials. the

outlook. your growth call will Chris Caldwell, provide strategy today and we cover Chris our call on the our and our Officer. With XX:XX questions. Andre open for and financial the results will of Andre operating a Officer will are Valentine, business our Chief President me Then Chief and Financial summary performance Executive and

Chris. turn will over call I Now to the

with our third the start quarter. our XX:XX earnings delivered covering for We comments, Thank I profit dividend one call outstanding twenty program strong and quarter our and Good to will and first organic very third my twenty off results. share be about everyone, announcement later our one. you the fiscal morning, welcome in growth to new David. but repurchase operating in progression much,

most range broad is also the we please where work are While the coming a winning. that from of sustainability need growth the and is

reminder, an representing percent of of percent. our of the reported increased XX:XX nineteen third growth than specific compared from we point revenue less adjusted programs. a basis, revenue currency COVID As four with comes constant revenue one quarter, dollars billion revenue twenty year. recorded one On last percent In

hundred and delivered share eighty up relationships three stock, sixty Our third in increased year. to quarter our one and per to million fifteen compared strong to dollars forty client two nine nine to million with Non-GAAP last forty and percent platforms. results operating dollars four continuing improved two technology income these earnings EBITDA percent increased dollars. two our point Non-GAAP percent invest We while our Adjusted

pandemic. our fastest into Revenue our operating banking quarter, clients, travel one detail, we from revenue in Digging retail, across our and the of XX:XX growth verticals, and technology, more all saw particularly in healthcare. results transportation in in third to look quarter before first regain the third strength encouraging sub levels This lost with verticals from growing exceeded as the COVID and pre-pandemic Europe we for business time we in particular is Asia. the

broad Additionally, geographies. during growth all drove the quarter, we across based

our providing staff, invest support impact operate health [indiscernible] to continue growth including in Asia We the these in. of by encouraged are primarily we trends, regions the team physical quarter. COVID during and many While experienced of the vaccine operations in our nevertheless, and we XX:XX continued in to mental and

quarter, in performance, we our demonstrating experienced resilience seventy remain at related COVID model. home at third the of the operating work percent overall Our level we as impacts staff, strong stayed even

dollars. million net a COVID include Our results on approximately six impact of profit

Once including the to over signings. revenue quarter, high new continue signed clients This in brands. a performance logo dozen addition included all dozen to new the acquisitions, disruptive than new the strong time we profit strong new business quarter, third see in again, and very we more In two

at disruptive Our dollars annual one run rate, from billion clients a revenue is approaching point now revenue. total one of

Part to in winning our new and XX:XX disciplined of digital business success capabilities transformation due is our processes.

enabled experiences help customers. their enterprise disruptive are efficiency clients delivering businesses, from and solutions. large solutions increased end-to-end by Our client of benefiting for our transform and Many greater digitally clients customer

be while a their percent how reducing technology XX:XX sales through deliver its large For transform by by channel into significant their journey a customer This their self-service resulting work helped about their more thirty percent. they technology company satisfaction reduce increased customer costs interactions and example, we remodel fifty increase implemented. services, using recently traditional over in

Another thirty with their scale. customer now, differentiated We efficiencies to demand meeting larger able example growth services for effective to and were results clients card their we're high and within a was their delivered of internal of consolidate optimize business our their volume the having how journey is delivering that and percent that company, a cost partner few FinTech partners unable a status. four of twenty much reached drove difficult we're five have banking savings across loan credit and retail months resources

technology invest global demand differentiators. the infrastructure and adaptable and enables clients deep key in are deliveries XX:XX scalable Our view ability to expertise, as combination digital of secure

our have receive We to during all quarter. time third are high scores for proud clients the innovation from

engagements up complex long seek continue our see We this opportunity technology deploy as experience. this our of as see superior momentum in customer stepping strategy. platforms we investment clients significant benefits to of We a levels term more be digital will to

above growth well pre-COVID incremental expansion regions This sales the X:XX quarter the expect revenue strong and to to quarter be verticals market levels. to seventeen full signings, all in another us pipeline during of meaningful above we fourth and new profit in currency grow across now future ability approximately adjusted percent the of business continued confidence constant quarters. Our our with We quarter, expect growth gives drive margin for year

X:XX more creation. value Looking and market we ability bullish on are solutions CX demand for technology to our for opportunities fundamentals, and innovative client forward, digital execute

for strong continued provides and an value across financial shareholder flexibility multiple us investment areas. Our enhance business position to

on of and is we the Based confidence XX:XX capital and increase program today dividend our part current our share future, repurchase a announced in deployment our financial strength value. quarterly plan shareholder to

pleased quarterly two dividend of We initiate share are per to dollars a zero in fourth five quarter. the point

has program. a pleased are repurchase hundred that million stock We dollars Board also authorized our five

We continuing for right the targets. are committed M invest to and our have ability even to in an with to accretive look we And announcement significantly today, A still acquisitions.

market margin to expansion. expect In than X:XX growth summary, with we faster achieve

are drive to and execution we shareholder leader, market focused partially enhanced a continuing on As superior value.

trust our X:XX our our for Board their to Directors for thank and staff in of and I support their Concentrix. would mentorships to execution, confidence our for exceptional their investors and their clients like further commitments

I let CX since to lead review superior want two year, to to I over our spin Investor and January know an twenty hold Before the call industry. incredible are our twenty Andre, we XX:XX to in the ability you opportunity planning our progress last to turn Day in in

later save this first So day look quarter. the communication

turn X:XX the Andre? call Andre. to Now, over will I

for begin expansion We in delivered I'll financial fourth with Chris, then and our and outlook you revenue quarter. margin good the discuss business results to a strong growth third today. it's you, quarter. the Thank of review quarter with for with be XX:XX our the

came foreign billion one high for the XX:XX Reported guidance a three revenue point Our of four the dollars. revenue at benefit of our of dollars twenty in quarter. end included currency million

impact quarter. our help insurance To foreign On growth, elements our translation adjusted of nineteen the our last currency we've constant metric, new we divestitures, both divested divested this quarter, without constant the the on removes currency business of impact networks currency earnings constant call as CX introduced well percent revenue in non discussed currency As during these businesses mobile third growth revenue the a basis, and the increased the adjusted quarter. revenue which small business as of evaluate

existing all every new clients The strong broad and reflects of increased a verticals demand XX:XX and growth in in set region. across

grew vertical and year seven insurance, which performing increases clients. financial percent FinTech year top and terms Our services was in multiple due growth strong banking revenue over with of to twenty banking

and and and healthcare client approximately percent. percent and from retail media against twenty slightly electronics Revenue XX:XX grew Technology each four the sequentially. twenty Communications seven by grew travel percent growing e-commerce grew revenue six verticals while clients prior consumer quarter, year

year. clients with percent grew or grew we strategic represent verticals in global clients. basis, verticals across fifteen dollars by twenty our percent Contributing about ninety three million to than four quarter and of disruptive combined our and percent. year the eleven one by on These across growth fifty clients more one hundred Our and revenue two late other where our the are

income XX:XX exceeded Turning for guidance the quarter. to Non-GAAP our operating third profitability,

the zero two eighty and was hundred one our quarter. was operating point dollars income operating in margin thirteen Non-GAAP Non-GAAP Our million and percent

was Third four point two strong which strong adjusted dollars fifteen fifteen percent. the was from growth, margin on million offset continued flow The more quarter impact revenue profitability through XX:XX EBITDA than COVID of the reflects business. adjusted our EBITDA

divestitures amortization gain from was two quarter and results point two million based third I EPS million prior EPS dollars income in percent was dollars and four of for of share the intangibles, the eight pre-tax two GAAP dollars of net up dollars. quarter, income, net year. three GAAP-diluted and hundred included terms earlier. of Non-GAAP third million thirteen million In one the of nine the a sixty to thirty nine expense compensation thirty point zero adjusted dollars dollars mentioned related four

eight rate tax percent in GAAP quarter. third twenty effective was Our the

from flow in generated offerings of revenue in digital million the in totaled home one approximately cash Accordingly, and we spending the Moving capital of continue flow the cash and free to cash three of to was our ninety work we XX:XX quarter. particularly quarter in three growth, forty third fifty from dollars of support and support million quarter million and in security. dollars invest expenditures dollars. flow, Capital were operations percent approximately two

to quarter, from divestitures. XX:XX million revenue. for we received in point be We five to range of capital four percent the proceeds expect in four expenditures to three the of of the year Also percent full continue dollars the seventy

dollars the to hundred sixty At totaled was the fifty six sixty against securitization. bearing the end and of accounts issuance consisted dollars hundred of This XX:XX million interest Total debt debt bart loan cash hundred our quarter, eight million term third cash now receivable one four one equivalents and balance our Turning and nine dollars net and costs. on sheet. of million seven dollars million

down times point and EBITDA debt our and with we quarter We our trailing zero proceeds quarter, paid ended ninety the million twelve gross of third quarter four using basis. of borrowings leverage approximately one dollars Net point leverage adjusted at a net During zero eight quarters million free dollars end. flow. seven cash divestiture four XX:XX was on

dollars million cash of credit accounts five Our liquidity securitization. receivable under thirty of remained with XX:XX on strong our over nine and capacity lines

current liquidity us significant Our gives flexibility. financial

mentioned, in Chris position us As value. financial for invest generation and enhance flow options free the business our and create shareholder strong cash results, and to

for growth capital remains priority business the Our opportunities. funding deployment strategic organic and growing through existing

providing shareholders. We to XX:XX leverage, do ample We to returns remain comfortable times provides to financial have this future three which cash M&A. disciplined gross the disciplined flexibility capacity up of for while with

quarter. turn Now, XX:XX expectations fourth I'll our to for the

combined demand billion range continued from in Given year currency four of impact an growth. revenue to constant dollars. we eleven one strong percent expect four includes percent a currency billion constant approximate eight dollars growth one CX to point of the businesses The currency range and to quarter translation. in fourth adjusted translates dollars for be divested nine revenue negative to over four This the year the adjusted million solutions, point fourteen

five through ninety flow dollars million income and fourth hundred expect growth. million one to quarter Non-GAAP from We zero dollars two five strong revenue seasonal reflecting XX:XX operating of

approximately percent dollars eight fourth to diluted tax quarter, For the weighted and of percent be expect to interest five an rate two shares. twenty expense average of a million we we share and count seven expect effective million fifty approximately twenty

income XX:XX and share related the expense. dollars eleven guidance approximately compensation intangibles to the of fourth million four Our million Non-GAAP for of thirty based dollars amortization operating quarter excludes

year revenue approximately billion percent full of implies dollars adjusted Our twenty currency just twenty the under or guidance for constant basis. six quarter growth on five point one of fourth an revenue seventeen

exchange reported twenty year foreign compared point We just XX:XX and a above the one twenty. impact will on one combined expect businesses full be the impact divested with revenue twenty of twenty positive rates

our full thirteen implies operating one twenty zero will margin also percent. be that guidance Non-GAAP year approximately Our twenty point

very making are we results and closing, across are our the In business. XX:XX encouraged we the by progress

We are expectations confident the beyond. and quarter our in for fourth

We faster are in a leader grow large market, and organically to than a market. global a plan that executing fragmented growing

strong the shareholder margin and growth, to enhance cash returns. with sheet, proven are free a sustained As consolidator balance deliver industry we well flow, positioned progression,

please Sarah, this line the XX:XX At time, for open questions.

the Ruplu first Bhattacharya Instructions] America. comes [Operator of with line from Our you. Bank question Thank XX:XX of

Your line is open. now

questions. pricing happen such more as that and FTE question, gain of pricing an mix XX:XX contracts you see for like Maybe the this reason can see on Do dividend. pricing quarter or other away on to pricing pricing, towards Hi gain you from time mechanisms transaction on do capital my mechanism can of shifting? the think what output provide Chris. based based or asked versus the with mix the employee or your Congrats us thank services you shifting as plan for I'd like And more mix based taking pricing congrats more pricing my – and full are that you based return voice to is, Maybe on you percent non-voice I first you of idea your as value. give ask performance sharing?

XX:XX Yes.

So, answer two parts. Ruplu, I in would

it model now that we be – I revenue of type have, component unit continues to and or right that we've is share a of metrics measure, costs. a to a might tied gain then gain to said directly think transaction use percent is, And person than our share what of actually our fifty grow. other related we more still

drive older is running of we based that margins aligns our which winning we on work measurement. our with what of have to clients, deals lot the model, us still That that a more continue So gain that we're forward. We going business like and share we think that now it's more helpful percentage enjoy. we but through unit the becoming our is

ask seeing value labor? that. you about of costs skilled how higher you for environment? Thanks you labor? more shift Are COVID towards as mix the the and the as phase competition Okay. And for is XX:XX that as I Again, labor Can more for in just current services. competition well trending

XX:XX Yes.

think their are actually, we entertain environment staff them have careers the to and look, staff tier and always and hire culture after who competitive them the to our I top with markets create that sure grow we and our want go right and make us.

and the environment an had want not grow are focused we're are we we a right and And this competitive their to us. we crews very So point, we join have challenge with do to that making on in but sure always to marketplace. have people the creating continue environment that

I Got remind seasonality the XX:XX XQ? you quick it. typically couple them to a XQ can a could I or of typical you quarter going XQ I sneak have three Andre, of strong is guys. what ones for from for Andre seasonal us if in. mean is

that's given so four five But you're maybe little guiding point guiding or the great. by seems being impacted this it that's percent think and street, it sequentially a conservative, just I you're divestiture. historical about the performance past

the guy is on So and how just compares seasonality what us to you typical remind can that?

XX:XX Yeah.

of just a was you've guiding year. a admittedly, not quarter is perspective. is had And a to the of we're much that also verticals little component quarter little as strong some by that ramp suggested financial Ruplu, is entered growth and as our other to you the electronics bit And impacted seasonality we're think than and them where a and sequential we in. banking saw and to little also in typical seasonal the Certainly are particularly sequential those you probably from the a of guide, that less year. last fourth so in services if still have think last that you around as growth which contributed year seeing quarter but we we bit a about see tech, I COVID. insurance, bit seasonal QX consumer last that some verticals as

meeting things And bit. that expected a to sequential have so all QX growth might But be signaled QX. along again, from that just we little strong we

that. reflects guide our think I

XX:XX Right.

how we on is new the that. details for plan. us capital the return very a for about help of buyback? mean, what about Thanks question think in, the think a look thanks. you You've mind but acquisition of And parameters the in last Okay, should cadence mentioned the authorization Can on of put also Then at M&A like an just terms times, focus or acquisitions? Thanks you in what again. when of in couple buyback. terms you the what size I is keep you me of

Sure. XX:XX

but I to fast as the So, pace if we're what I'll both missed. I it will the the be happy can to dividend repurchase. doing, Chris do want share at look say with if enter you share to up, predict that. anything how relates the plan, repurchase back I the and certainly we I market don't clean under would and think And

You're believe the going but That start we said, organic to us drive undervalued, shares modestly that best are to shareholder way of is and in in do best value. the return. use believe our capital terms also of M&A accretive see capital fairly we investing

of line that as over kind you accretive with out recent So, is with, place, the a I of pretty hundred a of basis you most that, it's period you that. the on so much would million again, think includes color authorizations I with as you at is peer authorization, on used the probably our the along our capital long and And outstanding. dividend their in fairly at plan will pace that to similarly in percent so imagine be there in dollars some five gives put be if certainly, part of groups disciplined look a balanced that repurchase allocation the a size size if line the look M&A of

very, on As M the for focused very that. &A, we're

have various frankly. sizes M&A as mentioned, do we Chris to ample And has XX:XX capacity

do. what going And be to so disciplined we're we of

also you large but could increased to I'll to firepower focused Chris, we are that on like anything do value that. of the certainly would to the platform. add tuck the ins have acquisitions, let So

the returns and size value. agree about two, the and when if that's Andre, more at us to frankly the straight of XX:XX financial important to and we I the M&A us sort to it just dollar matches strategic significance those look

XX:XX the the for it. details and quarter. again Thanks congrats Got all on

XX:XX Thank you.

Thanks. XX:XX

you. Thank XX:XX

the next with Research. Cross Shannon Cross comes line question from Our of

Your open. line now is

out quarter, on on and is got here. the just couple Hi. walk for at margin XX:XX operating Matthew this a Shannon Miranda takes pretty through performed Cross. Can you well This us I puts from you the anything would we there in increases how there, impact the wage to quarter that quantify Is model guidance? then specific forward? Thanks. the should that's maybe follow-up. call the and And going

XX:XX Yes.

So, performance come we the high the seventy came probably see in each above ramps of guide towards end to to performances kind say weighted would – have equally dollars the on experience the U. that would really little eight was guide. high dollars performance quarter in the million we to bit dollars to million good attrition range our kind of customer early so a revenue, eight have versus our I deliver over strong there. we that of that we kind million over And And the three that offset and if skilled eight spend. drove about response with saw we What our end that less hiring net the to you the were of improving that end would at that maybe think you made, S. think we we Wage dollars we – seventy guide our million exceptional also were things high of in for a COVID roughly performance, saw clients at partnering the balance, do. adjustments million our those the we response of and on did ensure We did investment. expected and have some of and staff should

Thank helpful. you. That's Great. XX:XX

one Just more.

fiscal to see twenty few two. And You do into sense probably in to this pretty just growth are tougher quarters. two? more that maybe geographic or they're base see ramping given these twenty specific going rate trying last not down broad the going rates, know a [indiscernible] down had from that one across that demand you any for I sustainable get as us verticals some comps. looking But level, voice call up vice quarter? slowing start these squeeze Thank growth the your just perspective a you. into then you the versa here. Are

let you. XX:XX first, at Yeah. ask second answer first. Matthew you question look it I'd the me

our a For a us nice we that. because actually grow perspective, is that seen we've geographic we strong demand saw and geographies, of were all happy quarters which couple in actually frankly seems

we those. Asia come travel of a all we saw verticals next certainly a mix see and out healthcare, than to markets. of it we happy. the have banking as others, see in you of different technology, we're travel transportation demand it seeing we starting sort little back see will across about area, tell instance overall, we in of we key called growing certain one we we’re what's faster into that but going as electronics, and year, Now consumer bit still strong our in transportation for in and really I call see in that, we FinTech we're in But

continue under to see and from where that grow perspective, certainly number call opportunities it lot where hopefully, of to to perspective a instance that vertical a will one clients the control, a into now we more more as COVID dollar of So, future going we back it but was with that vertical hope was coming to gets benefit from well. back as

Okay. XX:XX much. you Thank so

XX:XX Thank you.

question Colicchio line with of Barrington comes last Our from the Vincent Research.

now open. Your is line

Yeah, expect going to sequentially, Chris, growth continue should nice was see grow forward? it telecom there we XX:XX against

XX:XX Yeah. Yes. Vince.

the we to on portfolio new start bottom the based do. then the of telecom we we've into technology services to bring offer As we services it actually we gotten about, the there's telecom and it's like grow we base where on we've offer. And talked of and the and want kind some some it we as consumption that much very routes but of business of what mentioned, will is,

bigger of of would would we're and so but obviously, that business business it now. to seeing around will that roughly continue grow, overall growing the it faster it I are at probably consider it percentage stay and So, we

on the most And in part you too terms being side, expensive now? you terms right XX:XX careful finding are – guys know Are for are of deals. opportunities finding you you of I the what acquisition in diligent for pay

runs XX:XX I expectations we've equity opportunities their said that robust people back of doing some those value think to financial driven drive sort shareholder drive longer sense. will on strong that us, marketplace, so – said, in does by is acts and very parameters. that of better a we're it and the won't as business of markets set seeing execute focused And from there the transaction to sell in sort That complete provided is businesses private to looking go And natural being other of right returns we unrealistic and we're matches term? up that, the the makes complete something public both that the any strategic sort the of likes the what we most space. are by that I will

your on seeing XX:XX tightness market? in any any are you of And the of giving the pricing labor movement geographies

of economics an be share to our the aligning those on becomes more complex pricing No, focused pricing pricing question to gain earlier going of types things. changes sort pretty and back We which Q&A. around our client’s the in XX:XX economics, and steady is tend to more doing much

but it a this so really steady always Things hasn't changed. perspective. pricing necessarily marketplace, competitive from therefore, generally in And are

my Most of were Thank Okay. questions answered. you. XX:XX

much, very Great. XX:XX Thank Vince. you

to XX:XX now will for There Thank Chris no remarks. questions. back are you. further Caldwell call turn closing the I

and our a in strong look two much coming XX:XX Thank Again, consolidator the the in our next up January today. pleased save and Concentrix. everybody, the please track day and for for look extremely model being forward day your in very of the investor seeing in strength twenty Thanks business you confident our execution appreciated. very relations for much We're We us very the quarter. everybody to much CX and always interest our joining for Industry. with appreciate record twenty

your XX:XX Thank Ladies participation. and concludes gentlemen, call. conference for this today's you

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