Concentrix Corporation Q4 FY2025 earnings call

• Christopher A. Caldwell highlighted 2025 progress: Reduced non-complex work from 7% to 5% of revenue via automation, invested $95 million in new capabilities, grew wallet share with increased contract values, launched IXSuite AI platform with $60M annualized AI revenue, and drove efficiencies by reducing non-billable resources. - Andre S. Valentine discussed 2025 financial results: Revenue growth, non-GAAP operating income of $1.254 billion, adjusted free cash flow of $626 million, shareholder returns of $258 million, and 2026 outlook including revenue and profitability guidance.

In the fourth quarter, revenue was approximately $2.55 billion. On a constant currency basis, growth was 3.1%. For the full year fiscal 2025, constant currency revenue growth was 2.1%. By vertical in the fourth quarter: Banking, financial services, and insurance clients saw 11% growth; communications and media clients 7%; travel clients 12.7%; other clients (including automotive) 7%; technology, consumer electronics, and healthcare clients decreased by ~2%. Revenue contribution percentages aren't explicitly stated for each vertical but the growth rates per vertical are provided.

• Full year 2026 reported revenue expected to be $10.035 billion to $10.18 billion, constant currency growth 1.5% to 3%. - Full year non-GAAP operating income expected $1.24 billion to $1.29 billion, non-GAAP EPS $11.48 to $12.07 per share. - First quarter 2026 reported revenue expected $2.475 billion to $2.5 billion, constant currency growth 1.5% to 2.5%, non-GAAP operating income $290 million to $300 million, non-GAAP EPS $2.57 to $2.69 per share.

• Stock price fluctuations may impact goodwill impairments. - Competitive AI market poses challenges. - Geopolitical and natural disaster headwinds could affect business. - Potential challenges in accessing talent for higher-end solutions.

Q: Can you remind us on the metrics you focus on in terms of judging how much to invest in AI-related software and chatbot? And give details of areas of spend in 2026, both in terms of OpEx and CapEx and how you will judge their success?

A: When looking at AI metrics, we focus on making sure it's accretive to the business and hitting revenue goals. CapEx historically 2%-3% of revenue, expected similar in 2026 (~2-2.5%). OpEx focused on variable spend driving net new opportunities, with go-to-market spend similar to 2025 levels. Success judged by cross-sell upsell growth, deeper domain expertise, and technology solution growth.

Q: How do you determine whether it's worth supporting a customer as they may themselves face a slowdown and have lower call volumes? And what levers do you have if volumes are not materializing?

A: It's a qualitative and quantitative discussion. Look at client history, whether they're value-focused, long-term clients. So far, seen benefits in higher-end areas. Volumes not a key factor in investment thesis as it's about type of services.

Q: At what rate do you think the market is growing at? Looks like you're guiding for low single-digit revenue growth in fiscal 2026 on a constant currency basis. Did WebHelp meet your expectations for synergies and growth? And now going forward, how are you thinking about acquisitions?

A: Traditional CX market is flat; other services are mid-single digits. WebHelp met expectations, even slightly better. Synergy goals exceeded. On acquisitions, we'll be opportunistic, supporting client base, with focus on reducing debt to target leverage ratio.