Concentrix (CNXC) 28 Jun 232023 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to Concentrix's Fiscal Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Stein, conference Relations. Vice like speaker to now David today, President would hand over the your I of Investor

you forward-looking written This Welcome fiscal evening. not be additional of and Concentrix than rebroadcast in our result We may factors Form Thank expressed quarter future to without or refer those could second information the regarding Concentrix to undertake recent most report and our our XXXX uncertainties information earnings of is call the update call. recorded the future permission new property earnings forward-looking the good actual risk matters our This results. future for may that affect by and events This call a statements. future as expected today's performance uncertainties provided materially be contains do includes Concentrix. to in These Please nature results developments. forward-looking and to that on annual address statements different filings not our or with or cause our uncertain. statements our XX-K. SEC release of financial that that the address are their

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

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

call the I'll Now over to Chris. turn

quarter Thank fiscal call for Good everyone, second our earnings evening, and XXXX. you, to welcome David.

today. generative AI quarter, to and ESG of will our technology. of ongoing of received those with the on released. briefed environment, I report transformative topics update Webhelp combination would investor impacts download questions the that our we each provide the also a the about updated from the emergence During website many encourage those our we macroeconomic status I of just listening

let's QX results. with our Now, begin

certain within pleased a disappointed did expansion below I were their and basis, saw expectations the were clients up $X.X second that in that and guidance, the was grew On cash currency the X.X%. organic the our as X%. that drive well am revenue Reported grow team, by quarter, quarter. not fact we being strong quarter we entering flow constant an in despite volumes in While margin billion, revenue

improved second , non Our growing million income X.X%. quarter GAAP $XXX operating to

year. million and OI to and Adjusted are our reflects last to EBITDA XX adjusted expectations. both manage compared basis X.X% This up points increased our last lower over EBITDA when ability than $XXX our year structure cost non clients dynamically were from margins with GAAP volumes their

higher Non share year, $X.XX GAAP reflecting last share $X.XX per rates. the with EPS compared of expected impact was per interest largely

clients few the with softness that telecom on in about to a or intensified certain quarters technology particularly and recent despite conversations project those growing we cases talked have continued ramp within further in parts retail, our budget see pressures past by share no maintaining us travel, driven certain reflecting From certain we last large volume volume catalyst perspective, at this clients year will have of strength also The relative strategic the calls the our the weeks, some in within with client. clients. that in While consumer across we and experience verticals, electronics seen have softness healthcare, and e-commerce, we continue insurance portfolio. industries

We structure accordingly. are outlook our adjusting and cost

role. support to consolidation capabilities provider to work breadth processes. end-to-end continue trend wanting serve we are This the in whether occurring to our who than like dilemma with we originally more faced have partners who clients slowly are cut of regarding decisions see can Concentrix base, strategic costs expected. excess a partner driven Currently, or clients existing the partners favors These partners opportunities within holding client with Regarding to capacity. clients by zero consolidating

We opportunities, which plans Additionally, temporary gaining by believe we expect factors will starting winning benefit we provider speed share a us. while we are consolidating reduced as volumes are softness at the persists, if with up for and their consolidation consolidation, we are the clients these clients level. see

the From processes on longer although perspective much as dozen a once expansion, new a solid are deals and large business signed a partner. that their projects been approval logos from we IT are operations perspective, smaller and of are quarter. slower transformational sales structure very pipeline with offerings. than to business two Catalyst coming we happy Concentrix cost we have and we're taking new seeing as The focuses -- to chosen with combine optimizing CX clients perspective, remained tend digital has Again, new these From sorry, in wins rather be in the transact. our wins service smaller

transformation We in long clients this the essential temporary also as term. view and remains believe digital to

generative safety up footprint were examples few to our We broad awarded as and trust critical providing our for train ways AI now generative as innovative to in with provider, models. very and in support include our demonstrate the wins a well A we of large due selected of content moderation experience services. came our QX are we set that capabilities AI global were

to markets. with solution For Asia experience, the proposed we model designed a high We AI the delivery accelerated client. were large omnichannel cost improved transformational and lowering cost ability customer profitable Pacific, grow the and providing in brand drive in CX We local to for our enabled markets were our because technology translation path of domain an to our they services, selected built of which consumer understanding to more a growth serve electronics while in. are complex looking the integrate to knowledge,

to were We footprint, and solution. drive airline experiences because to a of were and EMEA, major other selected a the better full become primary the we to provider all across improved digital and support net multilingual capabilities a and the languages, incorporating providers operating to For in our key drive powered provide number deal replacing to full AI lower had solution. to airlines to with technology the integrate unable get ability partners of selected ability

agreement and currently and sales For our they technologies. with. challenged because AI in of communications were improved acquisition of and EMEA ability new using brand We significant for analytics understanding to automate won large consumer we enabled a selected capabilities our service customer deliver sophisticated were models robust our reimagined work retention market, the manual to

opportunities company's transportation speed implementation, support we identified to improve In and large a Catalyst, software costs.

software market of focus during is examples, demonstrating leading a Our services to expertise go the client product software shift the want us development, while their design, as secure of our user In these further on managed run while the engagement strategy. build, transition approach, selected of software. in of implementation in to proactive and strategy because approach clients sellers engagement a provider. The of were environments, their the experience need all practices demonstrative having our of consulting the and recommendations to product around We embraced helped effectiveness development. customer exclusive the aligned our

capabilities. for help in perspective, to the on sustainable believe customer to approach the our of scores, to unique be to choice. continue and innovation an satisfaction continued disciplined we achieve have From build a will selling We remained pricing future current and which market our again operating programs we strong on partner profitable, us

progress our recently proposed statement to repurchase Their made filed great with been proxy combination transformative announcing transaction We share more provides since our now Webhelp. Moving the integration agreement the on has planning insight into and have signed. combination. that

strong towards and regulatory completing the approvals from We made to have progress financing. have started receive various agencies

in well As deep Webhelp client by strong there Webhelp will for base, we including our call, The brings vertical the growth footprint. and and customer into selling your telehealth, services than add and focus expertise Latin successfully domain clients a companies market European, know potential capabilities many our African exceptionally our discussed processing believe will been on expand and into money of global received payment Concentrix both well revenue, have can and anti to base, our diversify American clients solutions capabilities and enabled potential combination selling technology is we capabilities our additional X,XXX as and also as client Webhelp’s we laundering, we presence. Webhelp also recognized has done very combinations. and as past regions. Webhelp clients which more believe to in we last

by single expected is project share to mid- year combination accretive accretion first the in high the digit double earnings outset. second We to digit accretion The the in from per followed year. be

two various expectations through low digit growth of third measures as like estate above like confident and examples. quarter. about growth. very in million planned Additionally, for the rationalization the first footprint we with the achieving synergies currency systems Webhelp's IT was real surpassed for constant quarter Webhelp's year This by as performance $XXX cost such double feel harmonization

announced like XXXX that when for back deliver We for in with year transaction March. continue like the will to we in and exceed million approximately revenue expectations growth will the X% full expect Webhelp consistent our XXXX adjusted $XXX EBITDA,

clients, the shareholders. realizing for Three the months we the since been the we signing Webhelp of strengthened combination, has benefits transaction our rationale for to look the believe and forward only and transaction staff

of end expect year. to be to this We expect the -- continue by the we completed combination

Now, like spend our to perspective generative on would I discussing minutes few a AI.

XX% on background, for of tool already two across to industry are a over leader, natural close years some productivity track Many of end. deploy have of language various and and been as XX% AI completely have work chatbots As while business our automated and we have this learning these we our enabled forms using processing AI machine to help proficiency IVRs. tools with by year drive of advisors, technology

calls. about number cases talked have use these prior earnings We a on of

secure trialing of sustainable clients' years identifying our depth of are that and business for over a a rich from experience of of our opportunities comes AI us and and in the deploying This and the tools understanding workflow. challenges scalable tools gives technology environment Our the deployment. myriad in

established experience well Our helped current regarding market. of of view point in AI the current have our of with our as generative as client discussions inform depth forms AI

evolution generative and enhancing deliver We a we our to as AI continued can solutions clients. see

advisor and centered clients generative Our help workflows to conversations and about design, customer and we into around our how technology run. the build security, fit AI the data are management

exciting damaging of has our this us resistance to some to concerns harnessing there information, substantial proprietary and of value the the scale data, due deployments believe large clients, security brand or is to ownership advancement we engagement. drive exposure hallucinations potential AI for customer and the to While about

advisors navigate this on automate before opportunities term focus will near clients the believe our help using traction. driving concerns, will of we be and these the gain for productivity to that technology continue fully to start to While proficiency work we new

We expansion and proving that for AI will use revenue create cases our that greater generative costs. saving place thesis opportunities have us margin clients while many in are out opportunities our new

and same. with processes and have will we be Our AI generative philosophies past technological successful advancements proven believe the

A and use example and industries. regulatory addition clients. ensure in wins that most and that the large examples the language of use spend compliance business out on AI to machine cases leveraging working called industries are of learning currently solution, new multiple earlier, done, generative in are of regulated models quarter our which our also being of In to proprietary -- we the multiple proof we concepts few AI accuracy

current far faster with have We benefits materials we than being seen review for can of to tools able compliance.

and in we a we cost AI already do at AI videos generative currently. and have This provides ramp training airline and is to of up where fraction advisor gen staff the for coming a insight how training using We're down we taking a this months. materials production provide currently courseware notes that interactions with the condense that with [indiscernible] to an tested into thousands can of We expect large and is to working. being from over of working pilot customers are coaching

the saving minutes advisors. for for is a coaches about to materials concept sessions on minutes XX preparing with day their proof our Our currently XX of

across it quarter. entire our other in the to rolled be fourth accounts starting expect program We out and

AI automation problems information client's able to ability been scan gen using advisor provide of to production program with up Lastly, summary if of solve on serve it use to to cost or and we of to automation faster. have with some cause more case desired machine at an that greatly into are clients and inevitably and learning determine types customer AI conversation greater with these, week to through the customers. with does first AI results offshoring methods will continue factor have a our we're to to their ability AI all help last speed generative knowledge or back it a the we This of costs and other are clients look of as their evaluate come other them cost a seeing to expect faster Gen time cost to In bases working will down. we structure the generative effective. went

a this believe even language and solutions peers. the involvement from that a such required role enterprise model business Our is The and mile at the AI differentiates as run build able models and scale services design technically and when our expanded deep tuning, of consistent has a domain Generative investment ensure AI our to requiring and significantly when technology view company's in our to as and on integrate in a are play that unique the as large We clients design, solutions directly. expertise. outcome reputation occurs. plug in to exception the us developing will the of Catalyst the purchase capability deliver last not and positive are crucial with have line. remain significantly handling human staff is brand CX option need environment able gathering, to implementation strategy, training, We being traditional tasks generative thousands capabilities Concentrix feedback

fully that role As allowing the play of our these an value so result, with that a assisting this don't believe Concentrix to clients exist benefits elements can will utilize clients add higher we today technology. indispensable services us critical in

this clients the have for experience, vision to our expertise drive technology significant the business. and leverage We to our value the and

believe offset by will work with expect we Now revenue it all some we over but automation, new be increased margin impact and time, potential.

modest where each the the We year on of those a serviced our volume from. and transactions are clients we depend of already for transactions us and expect acceleration will economics automate currently

maintaining and We in position leadership are our committed AI to delivering outstanding outcomes space. the and automation

facing In quarter. some this for and have macroeconomic expansion volumes that summary, challenges achieved growth we revenue impacted despite clients, margin

planning cash successfully with for harnessing while are the investing strong generative combination of drive flows. We AI, power continuing in the to Webhelp and positive

our for changing of clients serve. We partnership with are aligning on that enhance the the and focused we demands to Concentrix our market long-term

Finally, and our staff. take success. driving clients commitment trust moment their force to I support. Their like dedicated express appreciation award excellence winning to want I'd talented hard work, my resilience for the our to Also, a to thank and their unwavering our Board are for to behind our of Directors

With that, Andre? I'll turn to the call over Andre.

everyone. the impact X.X%, volumes project in most volume clients clients our hello, was expectations impact mentioned and revenue $X.XX progression earlier. an expected. saw consumer The negative communications growth vertical. from reductions of foreign the third billion, quarter. quarter a on expectations our large for clients Revenue positive of point certain margin than fluctuations a and begin in quarter shortfalls X% for having a that the we XXXX. verticals QX with outlook year Chris, the full X% in reflection and Organic in change was up quarter in currency as-reported number look and quarter second second The the across from for at basis. with reported In electronics and a lower you, the improvement the We constant and a X.X they and Catalysts, includes and Chris then business our client large discuss our Thank results spending to below retail I'll financial pronounced growth at few second the a currency were revenue delivered the acquisitions.

quarter, XX% as-reported verticals, strategic grew and X% verticals posted each with organic four retail, on constant the X% a we Revenue with an growth leading clients from from financial basis. X.X% clients clients. on organic currency client as of revenue on organic banking, basis X% Revenue reported an by insurance basis. our e-commerce and currency strong and care both services growth and constant clients of grew terms from as continued growth growing way, the on reported travel health approximately in in In constant travel and currency by

an Revenue about decreased other from on basis. currency about clients grew X% constant spending organic second reduced on currency from the electronics spending as changing basis. consumer in on the vertical reported organic social technology decreased constant on reported by X% based communications by government X% clients priorities. an as and basis and an organic X% one as reported X% Revenue in clients from driven and and by quarter, client Revenue

XX% Our revenue. year-over-year new quarter X% second grew economy represented and clients of

partially e-commerce growth on the year-over-year saw point that revenue revenue and we our clients clients, year-over-year travel and represented economy client by particularly economy quarter. clients, fintech crypto was this growth second X with in new offset reduced in from a While new headwind

quarter was in $XXX million income with last operating the Non-GAAP $XXX compared million second year.

margin year. from points operating $XXX of quarter non-GAAP of Our year. XX compared the with quarter last basis Adjusted in million was second $XXX XX.X% was million EBITDA the up second last

Our non-GAAP from XX.X% in share adjusted were last last of XX quarter was basis quarter EBITDA year. compared per margin $XXX a share income points $XXX share year. year. last basis per second with Earnings $X.XX net on million the Non-GAAP second up was per compared $X.XX million the with

$XX in costs GAAP impact put to The of associated in for Webhelp with of million fees transaction. operating the included reflected $XX expense in place in interest $X $XX million relates QX, second XXXX million transaction expense quarter included expense. the integration in of that to Of in bridge $XX was the The amortization other reflected in integration interest $XX the $XX expense incurred for the is expenses. acquisition $XX relates in reflected million expense and results purchased financing on reflected share-based between and and on other options price approximately of sign movements were million income. is loss FX and of million denominated to million GAAP the the of the million compensation intangibles, is euros. of a Webhelp purchase hedge and portion that close is that mark-to-market

XX.X% second Our quarter rate the non-GAAP in GAAP rate tax was and our XX.X%. tax was

cash Turning flow. to

free costs Second the in expenditures of This million resulted for cash $X flow $XXX Included million. operations to quarter flow million the acquisitions. free of quarter capital million and cash flow were $XX in in our $XXX from quarter. related were cash approximately totaled cash

period. Our year-to-date the free cash flow prior year above totals approximately million million, $XX $XXX

for full Webhelp to integration million, year We and $XXX free continue flow cash the expect exceed costs. to excluding transaction

balance At Moving quarter, to of second $X.XX $X.XX sheet. of billion. the billion and quarter. and equivalents were the $XXX debt was Net outstanding cash end the end cash was the at debt the million

quarter, quarterly to per Board per paid quarterly $X.XXX the And another during dividend be During of third $X.XXX share. of dividend we declared a share paid today, our the quarter.

in also regulatory price quarter our the the into in for of repurchased of combination shares under repurchases due that approximately an We XX,XXX of share related Share plan announcement $XXX Webhelp million under the the a considerations ceased XXbX-X earlier year. at to $X per our transaction. stock plan entered with average the we to

After last repurchase share proxy filing third quarter. statement activity to we our expect in the our continue week,

shares the and pro EBITDA to EPS. approximately quarter, basis. leverage At We valuation share leverage second is trailing that at gross warranted net this on be to been and adjusted approximately are million and We share repurchase on a the believe end X.X our authorization dilution. remaining quarters have was times undervalued repurchase four X times that $XXX has shares repurchase accretive forma our our will to modest continued of offset and intent was

billion, credit, $X.XXX at under Our of securitization. and line approximately hand including capacity undrawn cash strong our on AR liquidity our remains $X.X additional billion

elements the I'll a Now, combination. to review of moment Webhelp take

in forma and the revenue Concentrix. billion XXXX when we $X.X add forma combination, on basis year company combined billion the pro approximately in of almost XXXX in on a $X pro $XXX in I combination As million will basis. revenue said and to a have will fiscal of Webhelp EBITDA combined EBITDA $X.X announced adjusted billion The XXXX

accretion in first We to mid- after in high accretion the expect year. digits full earnings year the close second per single and share double-digit of

in realize year million after to expect $XX growing in first the also We year three. $XXX to million close, synergies in synergies in

in revenue When included to While million that opportunities Concentrix separately shares It XX.X a impacted approximately included closing, million upside closing million EURXXX to billion, valued the in shareholders closing, related deferred combination. note per number prior be in was changes share. The to at is Webhelp stock the synergy companies is announced, of the that our year exists bear million at two our identifiable issued valued paid to will X%. form of delivered post be not by pursue EURXXX payable interest price be couldn't transaction to shares. shares XX.X at which cash model, at at not in consideration to a the $XXX announcement. fixed of of stock $X.X in

vest based Concentrix value transaction for with on of specified recent that Accordingly, we within if shares XXX,XXX the The over share announced following The investment-grade to additional will to period common stock, the certain $XXX closing. appreciates transaction our originally share conditions, maintain reduction will rating transaction is structured $X.X was including that price trading debt issue. the a the per billion. in the of the consideration below also current value Concentrix includes

revolving announced A up the our in our $X.XXX that expanded amended to facility at we have and increase combination billion transaction, Since include closes. credit to the term the we time an loan to

We increased our revolver. also have the size of undrawn

A, the expect the to now we to approximately transaction in years, and the in loan split unsecured borrowings five XX of with addition between maturities billion years increased bonds finance $X.X three years. our through term senior In issuance

the rating, the we XX weighted complete we average As to disclosed below of points announced that in proxy be investment-grade over rate when incur little and forecast we statement on based interest a now market a will transaction the our combination. current financing filed will recently X.XXX%, the credit we our basis and conditions rate at anticipated

a EBITDA combination our when times the year. will continue closes forma on We later that debt to X pro net be about to this basis adjusted estimate

strong us and the at time to free path of to the said announcement cash two about reducing times transaction we of years our net combination, committed clear our adjusted and EBITDA are gives X to As leverage generation, we our closes. a flow growth within after the reducing leverage,

growth, After Regarding successful the transaction closes, capital the our debt. our synergies integration will realizing the planned organic and Webhelp, allocation of focus priorities. on be repaying

We are investment-grade committed to principles.

will prioritize to and while net We of continuing paying reducing down dividend our disciplined our the repurchases debt equity and share grants. offset leverage dilution

our As last we guidance plan to closes. call, I transaction mentioned the provide on for the combined after business

to Now third and I'll turn year our full for business XXXX. the quarter for the outlook fiscal

our guidance For include not costs contribution combination. the related incur that Webhelp we from clarity, any does or any to will

we're in We and of in stability each of quarter most in each seeing sequential across verticals, four growth of and Catalysts our XXXX. We're Catalysts expect are seeing our in in the growth regions. second revenue half growing strategic

However, we are seeing near-term impacts for certain clients.

lower-than-expected project the year large experiencing. we a In discussed from Chris are driven Catalyst few to reflecting by clients they mentioned expectations seeing We're communications, the impact we seeing are our earlier, the lower volumes revenue for the a for delay on revenues that earlier. meaningful large

larger-than-expected have expectations many revenue clients across in our from Finally, this clients vertical. reduced retail been by volumes

environment fiscal line we include Our with and in continue expectations XXXX. any experienced in improvement muted seasonal the in reflect to do not volumes macroeconomic what

revising fiscal are our these of result we factors, year. expectations for the a revenue As

generation flow on profit margins However, we maintaining remain cash for our year. while free the our strong expectations focused confirming for

be quarter, expect in Based of year-over-year now X.X%. third rates, growth a on constant For currency impact positive point] expect to X.X% revenue to range third reported quarter. organic we in current [X.X we a the revenue on the exchange

to reported third these the growth of revenue exchange expect based of We revenue the year-over-year in on to quarter million current billion approximately expect quarter. our the timing range Based we on third $XX billion acquisitions of rates. in contribute be incremental $X.XXX assumptions, to $X.XXX XXXX

similar $XXX quarter include the the midpoint of non-GAAP income margin $XXX the equates third to of operating This of at the for a range, last to in range a year. expectations million. operating third profitability Our quarter XX.X% to million non-GAAP

expense We the million, quarter impact combination. to be expect interest approximately in third the excluding to $XX related any Webhelp

an expect million weighted rate average approximately also of diluted of count We effective XX% share XX.X and tax a shares.

year. exchange revenues constant Moving outlook We Based expect to now the XXXX point X.X X%. for rates, for impact current on organic to in of X% range revenue negative the we growth to full our reported entire expect the a on be year. currency

of XXXX This incremental acquisitions our to million equates $X.XXX the in reported $X.XXX expect year. to of year the approximately $XXX revenue a full contribute year-over-year of billion for growth range timing to full billion. We revenue

Our include to operating equates range XX a the midpoint at year basis profitability from to prior million now a year. of full non-GAAP operating points $XXX This $XXX range, of margin up million. income non-GAAP expectations XX.X% in the of the

million, full the excluding We year related expense interest approximately be $XXX any expect to impact to Webhelp combination.

shares, from issued share combination. Webhelp the weighted to expect approximately to We complete also a impact any the average be XX% an count million excluding effective of tax again, approximately and XX.X rate of diluted shares

to year of $XXX continue flow million to over over in flow We the least increase X% expect XXXX. cash growing with for free free strong an cash XXXX, at

costs with any associated share from future our acquisitions. repurchases. future or not outlook included integration are and or not business Also does acquisition Webhelp of fluctuations in impacts Our guidance transaction currency acquisition-related impacts or include future the

In closing, combination. value market and opportunity completing of we position that and future margin successfully are expansion flow cash areas these focus taking and growth advantage on will us creation. focused while poses the integrating for generative believe AI We generation, our that on and a Webhelp

open questions. please for time, operator, line this At the

first Thank Instructions] [Operator Our with Vincent comes you. Barrington. from Colicchio question

proceed. may You

Thank for Yes. you taking my questions.

sequential meaningful So you're expecting growth pickup Chris, in part is in of your QX. it looks a that? driving like What guidance,

do we we which we that in Catalyst, earlier, have as talked about one Vince, large not about talked So two ramp. will contracts,

other of is confirmed rest ramping one and has as expect the kind the at a plan year. plan of for The we

who of big they As driver we are have as areas We've continue grow. that's so that And obviously a two the clients the to able growth to the quarter their expectations growing, year. looked that expectations the within fourth when muting for gives seeing talked QX. of at the partly about, that at offset. guide you that also we're . at been as had, we're fairly the volume looked you not then the of put But the kind us what together, they've meet look that's within we seeing

Yes.

I is versus our last difference think sizable one year fairly expectation.

through said, see growth sequential we as go half I quarterly within to the year. back Catalyst As that expect of we the

pattern than So that thing of the last we and pretty the year, pattern. makes what year's much same that, that kind we'll experiencing year's different look than were last year. this is Other last different be as than

And in on you portion consolidation next discussions, year coming what have this, fiscal the terms in the may the of may you in not do amount think year? this see you I vendor is think of that but touched

Vince, have a longer to that it's having to is So We've sort we're business, saying, of depressed than little see fence, answer. who positive kind What in number at but those on clearly we're have expected. is volumes we pulling sitting if we're the definitely But won the although it's trigger speak, a consolidate, be going consolidation difficult coming look, and conversations. to the continue bunch of seeing, the to to taking clients honest, so we a lower volumes. of vendor are of to --

roll half, anything guide suspect next -- and about are meaningful combination time close with. we of to of kind for that we've the anticipating appropriate the then half sorry, back the is what two and vendor We next that when dealing ramping will Webhelp been front not half I given in we ones into see that year back perspective talk of are consolidation year. next quarters probably a the give a are most of year the outside and already and in from

we expect performing The And continue is think, are technology the verticals your to last second quite half? and I electronics four -- side, one. that consumer in that then one the to we strategic should continue? the well. Should weakest, the expect of And

Yes.

some of some in is of we've see on health and to some see suffering frankly, Consumer Andre So larger the technology foresee some some half very of our the we Vince, two back growth. that continued the kind electronics, cities. of we good, back space. of the others, year with in clients you'll some electronics declines side. continued tale technology strength and of But on big volume by that sort the we year. out, in the called what space of probably Consumer of see, strong that And electronics, care that technology sort is as the consumer of within offset to continue seen, half growth a fairly expect insurance, continue that's good strong banking muted but

the queue. in Okay. I’ll you. Thank back go

Vince. you, Thank

you. Thank

Our next with from America. Bank Bhattacharya comes of question Ruplu

may proceed. You

revenues Hi. grew in taking it fiscal X%. XQ expected X% grow my to constant Thanks for Chris, whereas questions. X.X% to currency, had you in

right the why X% taking X.X%. to XQ question market gives that? my confidence constant in what is growth, confidence what giving guiding estimate? X% X.X% are to guess that you mean, on I currency is you're would at And from revenues be you be, And the weaker? You down year your I number? full the what growing is can't based

So on couple it's are numbers, different a of and different and hearing frankly, based region market not more things. I'm growth by sure we Ruplu, industry.

so faster. growing for see instance, we And Europe

We growth public exposed seeing are that and versus European are experiencing to that are we're is that companies some the Asia things. North public exposures And other companies America large have growing. seeing similar, some seeing are that what who in same ourselves. of sort Clearly, Pac good

hearing that we're a the we're the from competing that our will So it's keeping, of our and we're that competing tell is, clients we -- bit share you in. in business and not What we're mixed what is, a categories in growing across feel bag. if and

it. That's of the So big probably that. takeaway about all good from we feel

terms looked in back some delivered And how that had looked of In the forecasting we at terms some half is similar more. QX. of the to within QX who feel it's clients we were the when we originally sort like came were We pointed our year, we expectations at and we've we their the that, in of they're they've better more term, kind the actually position see what Andre in into The of the of guidance. that, at lack experience of reached we've anticipated. stability higher that marketplace. infrastructure what the clients of we're some And terms and midpoint who difference we And for of from of QX, way retool delivered we when less. lower had had outputting forecasting are, said clients tend of that muted seeing a what out, their in and

we effectively where our their with tooling own many to had they're as through And versa where full seeing numbers. put a year, regards QX so, capacity is who what clients is, and from we share, and with they're in in share. the gone see for looked what to up then to numbers and overpromised take what we've And we to, generally many, hold regards conversations perspective, share we've sort will will where come underdelivered at vice of expectations and it calculations our through

we and that chunks business And identifiable had different point out, very us than where good growth to we clients seen and performance. seen kind QX. we as can forecasted, of very gives I confident where QX the see expectations have as be we've that think on have what tried as rest we And good of

guidance are out. reality and obviously goals focused preservation, laid we've hitting were on this, through we sure make And our flow that less to margin we we're takeaway, coming the cash margin as also we disappointed is and growth well go what hoped that than as that's quickly QX, think in very our very, had despite though, that I we goals, on and Ruplu performance QX adjusted into and and growth. team as margin the that, is what certainly delivered flow in the very cash for QX, our

Okay.

of ask question, economy I next quarters mean, set XX% this about the let clients my For new clients. me you four was three, ago. year-on-year growing

grew year-on-year this I quarter. they think you X% said

can are Or two what like Any one to is them? this turn you can of set stronger see is of so this quarters Do when weakness? when hearing this what idea around? from on another you set clients think growth? clients So is take your

Yes.

question. great Ruplu, So

portfolio some to then clients. in returns. which are direct-to-consumer their customer this we acquisition is spend more are primarily in of profitable we're I fintechs peel frankly, cut real of us these focused year-on-year, driving American-based tangible, be North And de kind clients which kind pointed specific, on and more the have minimis also think weakness at seeing of to of as crypto seeing fintechs. now Andre weakness dramatically the is, of you back and back a in bit onion out, little Where And going have forward. to kind

And that's I lap which headwind, think when a combination, you look will X% at next that about year. obviously

they spend portfolio which within we until add So is muted probably next portfolio, turn that year to of economy of year, early the might the my see to to obviously, expectation continue doing. back either expand or this accounts, we'll continue half around to into start we're performance clients that more and/or when

Okay.

me question. Let a ask Andre

I the Andre, operating revenue lower. So is mean environment growth is weaker.

on for taking You're a the debt lot of Webhelp acquisition.

think weave if you as us to drivers cash in of why and that, those can giving part confidence able sustain. are about that some your talk and service margin for So flows can to in And what you expectations the being you of is debt? that what

Yes.

is crisis revenues And business, flow. cash. to in as far the even strong able the as the cash drive were of things generates I about industry So great free global back this go really participants that's as then back Ruplu, through back and cycles really one -- when it far as we're how soft, this back financial

our So variable this can react preserve to with as cost a base so ability it have quickly to quarter very we we did margins. starts really in

again, now services drivers forward will helping margin clients higher I think we getting our AI. the around value into services, go other be, as including higher-value implement generative

leverage Webhelp, strong these get of we mentioned taking the add we the then will flow. in And levels. and on in, both top kind and muted on then grow you from still and can synergies free to debt We add even be there. free as G&A cash Webhelp our we margins which some Obviously, the at accretive to generate cash transaction of flows that things, on

are, very, us that the basis even rates such the it with flow, of to Concentrix generate debt. confident frankly, more pay we synergies with Webhelp do down combined on a increased so as at can that we all and in So year, even very business able has strong free and be we'll this cash interest

synergies, but very hit at our we do past transactions, do conversion demonstrated the the would we've that getting set Webhelp, levels confident ourselves, to quickly than in more of able debt getting same. we transaction, indicated the down that we'll and the in importantly, for targets transaction, and ability time the we our transaction. more both to feel did We've we've with the PK I down, frankly, be terms

Okay.

ask remarks, question. Let me last like the stronger growth. it sounded had one prepared From that Webhelp

why you they that's it think X% a that? constant year-on-year It that geographies do that about currency. better sounded is? you I had performance. And something Is that mentioned think in just Was right? difference causing

do So attribute that to? what you

Yes.

on So we was growth. low currency like-for-like what constant basis, double-digit said

quarter. we the to that or That we What is in into model did. based year that on And business. the expectations had rate in so we've first X.X% diligence our Webhelp growth this had the growth that's quarter above the X% that for the for Webhelp built is

really very, strong the nearshore and particularly This remain with supporting can very, with offshore well that. confident seeing quality Latin growth very combining that that asset deliver we we're they the So EMEA, of strong the very European here their footprint and offerings as that America. strong languages as they're to in speaks operations in

one If rationales you look this at combination. kind of the for of

frankly, we growing who as region, look If by you growth growing their as well rates quite America. there is well well, Europe at are And but subscale. out revenue break we're public other Latin is peers

forward so, their the read together. it's on integration seeing and we're would moving so we're great the completing I progress And combination, into why then what the that's about results, and excited

Appreciate for questions. you taking Thank it. my Okay.

Sure.

Thank Canaccord Genuity. you. next Joseph with Our Instructions] [Operator from question Vafi comes

proceed. You may

potentially other Maybe Good versus the mentioned for ones and color? Could give questions. your implementation comments, front. little based afternoon. solutions. us a AI Chris, being on the technology guys. more Hi, taking I couple just you on in the know its factor perhaps you a cost Thanks maybe a

think of it's but this what the servicing have it'd maybe I couple interesting some days, of volumes. be a follow-ups. those hear And early versus of technology I -- to cost of traditional

Yes, for sure, Joe.

cost of transaction incurred. but traditional language that based processing, call is it want per we've of and per the transaction sort AI machine-based length is So even that the or license traditional more I seat, or doesn't the deal that's to and necessarily type have per AI, being generally, learning the, model natural with don't on of the to transaction current deployed,

very in you a XX and way variability minutes, for generative and last and asking of instance, is simple currently that, same I'm get work out question sort for back way the that. that So actually to pay models character price very The AI forth. per and some a at and generally do the you back to of, having asking is the you're priced this, simplifying it forth

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there's more it. So a lot costs with associated

proficiency and so gains for makes gains productivity And some some or transactions that sense.

doesn't, it don't benefit of you others, because it. the get For

don't the does having same of that a that kind two of give we're It's a is one and like client if clients The does right answer. direct. feedback you ask the Or going odd factor, necessarily now hallucinate -- with to coming or but though, one people cost more predictability with a -- start with it’s it's AI it customer want XX,XXX around results conversations questions come or real up if to same it about generative where up some to questions, answer? not

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like especially kind investment comes earmark makes seen broader the material there clients practice Or along? for announced also Yes. really point? it of sense do things that AI players, guess, the Fair this enough. this on some and Concentrix own major kind maybe of the on is stuff of And to it of real their journey internally up. of and spending Is in budget then that IT at initiatives side helping I build to something other their for as a maybe investment the we've in ecosystem, over of function

that. Yes. great around misleading The question. Joe, are building going that's somewhat of releases, we a are to technology And proof of already us our concepts been practices put company, are is down reality or we the a that extension into on what development. of speak. spend investments we it's gives aggressively a production. scale a like the of anything as learnings into ability I an slowed think, significant, that, whole, of press of and It's That as up dollars stopped the has pretty as spend The is, faster we Catalyst The much and is we R&D have and or own have. reality sort where for. millions tens lot in the that

critical investments We as continue for to that future. see our

think business I so, more around win it. up we're level and to and And it continue and production as and we at into more the more right investment we'll drive more ramp

to view been one kind -- then Thanks Fair project point? guys. enough. to when And And lot delayed call of a guess any not -- fair this there as I may and it at large one if is it start that's delayed, just it's then, Catalyst is to final ramp canceled just it again? on the

Yes, problem. Joe. No

weeks trickling say, And of for started sad bank doing sort full work do the heavily. the year. We fairly the client for it. for year. this work the the get reality in production sort clarity. to really, our won as they sat when and of work and that large-scale and of et up couple said, sort a I'm of to need to were QX, and But but they down of lack last all doing within et done. continue for the it We the done continue We technology we we support was is, the various aligning implementation that to of push wanted restructuring, et a we cetera, all And QX they last we just to and we were to scrum to and to original work to need in, better teams get from term, QX. big get pushed continue of just were stack, a reasons, are out cetera, hey, staffed back, started for kind continue they for to expecting for both cetera. Just and budget of and QX QX And it this it, And in plan the going stock, ramp the project this need we this. to out new

canceled. not it's So

but it, is out push versus but this a it at lower what We further, rate will the we it frankly, run are rate. getting much project And expected. had run lower revenue from much

way. does expect from back a fairly we come as of back impact big that perspective of year. So not half size-wise next that in this will it have for out do in a meaningful front it half the called us a I the year, to

as of kind to it's and kind continue rate. billing will not aligns client just priority. increase it's there, canceled, we're absolutely a budgets, reduced it be for slowly of back much it a it I But comes think on at still the and to still

year, and all that What over the Catalyst in sequential are contributor seeing our we expectations. of to. not in And slightly grow we back stabilized helping we to begin verticals. that some and more that a on at Yes. even expect the actually wins as again, But then based . contract on this sequentially point and are it QX to we major in nice of in as bit to expect for across revenue are large not smaller we that but a It growth bunch talk is about the wins the a half QX, catalysts it expect really at grew in smaller that other accelerate QX. a

Andre. Great. Chris. Thanks, Thanks,

Thank you very much.

to turn to now Thank Caldwell any remarks. call closing like the back Chris for over you. I'd And

especially and profitability forward very you appreciate Great. very strong you always joining strategic Thank your to much, very objectives. committed maintaining much, we're to next to in everybody, generation, us flow interest We talking look Concentrix, for our everybody. executing when . cash We and you much Thank quarter. today.

conference This call. concludes you for Thank you. today's Thank participating.

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