Concentrix Corporation (NASDAQ: CNXC), a leading global provider of
customer experience (CX) solutions and technology, today announced
financial results for the fiscal fourth quarter and fiscal year
ended November 30, 2023.
|
Three Months Ended |
|
|
|
Fiscal Year Ended |
|
|
|
November 30, 2023 |
|
November 30, 2022 |
|
Change |
|
November 30, 2023 |
|
November 30, 2022 |
|
Change |
Revenue ($M) |
$ |
2,230.8 |
|
|
$ |
1,640.7 |
|
|
36.0 |
% |
|
$ |
7,114.7 |
|
|
$ |
6,324.5 |
|
|
12.5 |
% |
Operating income ($M) |
$ |
180.4 |
|
|
$ |
178.0 |
|
|
1.3 |
% |
|
$ |
661.3 |
|
|
$ |
640.2 |
|
|
3.3 |
% |
Non-GAAP operating income ($M)
(1) |
$ |
340.8 |
|
|
$ |
248.0 |
|
|
37.4 |
% |
|
$ |
1,010.0 |
|
|
$ |
884.1 |
|
|
14.2 |
% |
Operating margin |
|
8.1 |
% |
|
|
10.8 |
% |
|
-270 bps |
|
|
9.3 |
% |
|
|
10.1 |
% |
|
-80 bps |
Non-GAAP operating margin
(1) |
|
15.3 |
% |
|
|
15.1 |
% |
|
20 bps |
|
|
14.2 |
% |
|
|
14.0 |
% |
|
20 bps |
Net income ($M) |
$ |
69.5 |
|
|
$ |
104.9 |
|
|
(33.7)% |
|
$ |
313.8 |
|
|
$ |
435.0 |
|
|
(27.9)% |
Non-GAAP net income ($M) (1),
(2) |
$ |
213.5 |
|
|
$ |
146.3 |
|
|
45.9 |
% |
|
$ |
630.7 |
|
|
$ |
588.0 |
|
|
7.3 |
% |
Adjusted EBITDA ($M) (1) |
$ |
397.9 |
|
|
$ |
284.8 |
|
|
39.7 |
% |
|
$ |
1,181.8 |
|
|
$ |
1,031.0 |
|
|
14.6 |
% |
Adjusted EBITDA margin
(1) |
|
17.8 |
% |
|
|
17.4 |
% |
|
40 bps |
|
|
16.6 |
% |
|
|
16.3 |
% |
|
30 bps |
Diluted earnings per common
share |
$ |
1.09 |
|
|
$ |
2.01 |
|
|
(45.8)% |
|
$ |
5.70 |
|
|
$ |
8.28 |
|
|
(31.2)% |
Non-GAAP diluted earnings per
common share (1), (2) |
$ |
3.36 |
|
|
$ |
2.80 |
|
|
20.0 |
% |
|
$ |
11.45 |
|
|
$ |
11.19 |
|
|
2.3 |
% |
(1) See non-GAAP reconciliations included in the accompanying
financial tables for the reconciliation of each non-GAAP measure to
its most directly comparable GAAP measure.(2) As described in the
non-GAAP reconciliations included in the accompanying financial
tables, the reported amounts for non-GAAP net income and non-GAAP
EPS for all periods include adjustments to exclude foreign currency
losses (gains), net, which were not adjusted in similar non-GAAP
measures previously reported.Fourth Quarter Fiscal 2023
Highlights:
- Revenue was $2,230.8 million, up 36.0% from $1,640.7 million in
the prior year fourth quarter, including a 0.5-point positive
impact of foreign exchange rates compared with the prior year
period.
- Operating income was $180.4 million, or 8.1% of revenue,
compared with $178.0 million, or 10.8% of revenue in the prior year
fourth quarter.
- Non-GAAP operating income was $340.8 million, or 15.3% of
revenue, compared with $248.0 million, or 15.1% of revenue, in the
prior year fourth quarter.
- Adjusted EBITDA was $397.9 million, or 17.8% of revenue,
compared with $284.8 million, or 17.4% of revenue, in the prior
year fourth quarter.
- Cash flow from operations was $229.3 million in the quarter.
Free cash flow for the quarter was $164.4 million. Both measures
are inclusive of integration costs.
- Diluted earnings per common share (“EPS”) was $1.09 compared to
$2.01 in the prior year fourth quarter.
- Non-GAAP diluted EPS was $3.36 compared to $2.80 in the prior
year fourth quarter.
“We achieved strong results across key metrics including
revenue, operating income, EPS, and cash flow, surpassing our
expectations for the quarter,” said Chris Caldwell, Concentrix
President and CEO. “Our strategic combination with Webhelp marks
the beginning of a new chapter, creating a global market leader
with a world-class platform for growth and value creation. The
integration process is progressing smoothly, contributing as
anticipated to both revenue and profit. Entering 2024, we believe
that Concentrix is poised for success with a strengthened
foundation, sustained growth, and a commitment to delivering value
to shareholders.”
Fiscal Year 2023 Highlights:
- Revenue was $7,114.7 million, up 12.5% from $6,324.5 million in
the prior fiscal year, including a 0.9-point negative impact of
foreign exchange rates compared with the prior year period.
- Operating income was $661.3 million, or 9.3% of revenue,
compared with $640.2 million, or 10.1% of revenue, in the prior
fiscal year.
- Non-GAAP operating income was $1,010.0 million, or 14.2% of
revenue, compared with $884.1 million, or 14.0% of revenue, in the
prior fiscal year.
- Adjusted EBITDA was $1,181.8 million, or 16.6% of revenue,
compared with $1,031.0 million, or 16.3% of revenue, in the prior
fiscal year.
- Cash flow from operations was $678.0 million in the fiscal
year. Free cash flow for the fiscal year was $497.5 million. Both
measures are inclusive of integration costs.
- Diluted EPS was $5.70 compared to $8.28 in the prior fiscal
year.
- Non-GAAP diluted EPS was $11.45 compared to $11.19 in the prior
fiscal year.
Quarterly Dividend and Share Repurchase
Program:
- Concentrix paid a $0.3025 per share quarterly dividend on
November 7, 2023. The Company’s Board of Directors has declared a
quarterly dividend of $0.3025 per share payable on February 15,
2024, to shareholders of record at the close of business on
February 5, 2024.
- Concentrix repurchased 0.3 million shares in the fourth quarter
at a cost of $22.7 million under its previously announced share
repurchase program at an average cost of $79.29 per share. At
November 30, 2023, the Company’s remaining share repurchase
authorization was $289.5 million.
First Quarter and Full Year Fiscal 2024
Outlook:
The following statements are based on Concentrix’ current
expectations for the first quarter and full year fiscal 2024.
Non-GAAP financial measures exclude the impact of
acquisition-related and integration expenses, amortization of
intangible assets, depreciation, share-based compensation and the
related tax effects thereon. The non-GAAP EPS guidance assumes no
impact from changes in acquisition contingent consideration and
foreign currency losses (gains), net included in other expense
(income), net. These statements are forward-looking and actual
results may differ materially.
First Quarter Fiscal 2024 Expectations:
- First quarter reported revenue is expected to be in the range
of $2.360 billion to $2.406 billion. Based on current exchange
rates, our expectations assume a 110 basis point negative impact of
foreign exchange rates compared with the prior year period. Our
guidance implies pro forma constant currency revenue growth for the
first quarter in the range of 1% to 3%.
- Operating income is expected to be in the range of $158 million
to $161 million and non-GAAP operating income is expected to be in
the range of $315 million to $325 million.
- Non-GAAP EPS is expected to be in the range of $2.51 to $2.65,
assuming approximately 65.8 million diluted common shares
outstanding and approximately 4% of net income attributable to
participating securities.
- The effective tax rate is expected to approximate 26% to
27%.
Full Year 2024 Expectations:
- Full year reported revenue is expected to be in the range of
$9.510 billion to $9.700 billion. Based on current exchange rates,
our expectations assume a 70-basis point negative impact of foreign
exchange rates compared with the prior year. Our guidance implies
pro forma constant currency revenue growth for the full year in the
range of 1% to 3%.
- Operating income is expected to be in the range of $770 million
to $800 million and non-GAAP operating income is expected to be in
the range of $1,390 million to $1,450 million.
- Non-GAAP EPS is expected to be in the range of $11.69 to
$12.50, assuming approximately 65.6 million diluted common shares
outstanding and approximately 4% of net income attributable to
participating securities.
- The effective tax rate is expected to approximate 26% to
27%.
The Company believes that a quantitative reconciliation of the
non-GAAP EPS outlook to the most directly comparable GAAP measure
cannot be provided without unreasonable efforts due to (a) the
inability to forecast future changes in the fair value of
acquisition contingent consideration, which is based, in part, on
the future trading price of the Company’s common stock, and (b) the
inability to forecast future foreign currency losses (gains), net
included in other expense (income), net. For the same reason, the
Company is unable to address the probable significance of the
unavailable information, which may have a material impact on the
Company’s GAAP results.
Conference Call and WebcastConcentrix will host
a conference call for investors to review its fourth quarter and
full year fiscal 2023 financial results today at 5:00 p.m.
(ET)/2:00 p.m. (PT).
The live conference call webcast will be available in
listen-only mode in the Investor Relations section of the
Concentrix website under “Events and Presentations” at
https://ir.concentrix.com/events-and-presentations. A replay will
also be available on the website following the conference call.
About Concentrix + WebhelpHi, we’re a leading
global provider of customer experience (CX) solutions and
technology. We create game-changing customer journeys for some of
the world’s best brands, and the ones that are changing the world
as we know it. Every day, we Design, Build and Run CX that helps
brands grow across the world and into the future. Whether it’s a
specific solution or the whole end-to-end journey — we’ve got it
covered. We’re the strategic thinkers who design brand-defining
experiences. The tech geeks who build smarter solutions. And the
operational experts who run it all and make it work seamlessly.
Across 70+ countries and six continents, we provide services across
key industry verticals including technology & consumer
electronics; retail, travel & ecommerce; banking, financial
services & insurance; healthcare; communications & media;
automotive; and energy & public sector. Concentrix Corporation
(NASDAQ: CNXC) operating under the trade name Concentrix + Webhelp.
Location: virtually everywhere. Visit concentrix.com to learn
more.
Use of Non-GAAP InformationIn addition to
disclosing financial results that are determined in accordance with
GAAP, we also disclose certain non-GAAP financial information,
including:
- Constant currency revenue growth, which is revenue growth
adjusted for the translation effect of foreign currencies so that
certain financial results can be viewed without the impact of
fluctuations in foreign currency exchange rates, thereby
facilitating period-to-period comparisons of our business
performance. Constant currency revenue growth is calculated by
translating the revenue of each fiscal year in the billing currency
to U.S. dollars using the comparable prior year’s currency
conversion rate in comparison to prior year’s revenue. Generally,
when the U.S. dollar either strengthens or weakens against other
currencies, revenue growth at constant currency rates or adjusting
for currency will be higher or lower than revenue growth reported
at actual exchange rates.
- Pro forma constant currency revenue growth, which is constant
currency revenue growth measured against the Company’s combined pro
forma results of operations as if the combination with Webhelp had
occurred on December 1, 2022.
- Non-GAAP operating income, which is operating income, adjusted
to exclude acquisition-related and integration expenses, including
related restructuring costs, amortization of intangible assets, and
share-based compensation.
- Non-GAAP operating margin, which is non-GAAP operating income,
as defined above, divided by revenue.
- Adjusted earnings before interest, taxes, depreciation, and
amortization, or adjusted EBITDA, which is non-GAAP operating
income, as defined above, plus depreciation.
- Adjusted EBITDA margin, which is adjusted EBITDA, as defined
above, divided by revenue.
- Non-GAAP net income, which is net income excluding the tax
effected impact of acquisition-related and integration expenses,
including related restructuring costs, amortization of intangible
assets, share-based compensation, imputed interest related to the
sellers’ note, change in the fair value of acquisition contingent
consideration and foreign currency losses (gains), net.
- Free cash flow, which is cash flows from operating activities
less capital expenditures. We believe that free cash flow is a
meaningful measure of cash flows since capital expenditures are a
necessary component of ongoing operations. However, free cash flow
has limitations because it does not represent the residual cash
flow available for discretionary expenditures. For example, free
cash flow does not incorporate payments for business
acquisitions.
- Non-GAAP diluted EPS, which is diluted EPS excluding the per
share, tax-effected impact of acquisition-related and integration
expenses, including related restructuring costs, amortization of
intangible assets, share-based compensation, imputed interest
related to the sellers’ note, change in the fair value of
acquisition contingent consideration and foreign currency losses
(gains), net. Non-GAAP EPS excludes net income attributable to
participating securities and the related per share, tax-effected
impact of adjustments to net income described above reflect only
those amounts that are attributable to common shareholders.
We believe that providing this additional information is useful
to the reader to better assess and understand our base operating
performance, especially when comparing results with previous
periods and for planning and forecasting in future periods,
primarily because management typically monitors the business
adjusted for these items in addition to GAAP results. Management
also uses these non-GAAP measures to establish operational goals
and, in some cases, for measuring performance for compensation
purposes. These non-GAAP financial measures exclude amortization of
intangible assets. Although intangible assets contribute to our
revenue generation, the amortization of intangible assets does not
directly relate to the services performed for our clients.
Additionally, intangible asset amortization expense typically
fluctuates based on the size and timing of our acquisition
activity. Accordingly, we believe excluding the amortization of
intangible assets, along with the other non-GAAP adjustments, which
neither relate to the ordinary course of our business nor reflect
our underlying business performance, enhances our and our
investors’ ability to compare our past financial performance with
its current performance and to analyze underlying business
performance and trends. These non-GAAP financial measures also
exclude share-based compensation expense. Given the subjective
assumptions and the variety of award types that companies can use
when calculating share-based compensation expense, management
believes this additional information allows investors to make
additional comparisons between our operating results and those of
our peers. As these non-GAAP financial measures are not calculated
in accordance with GAAP, they may not necessarily be comparable to
similarly titled measures employed by other companies. These
non-GAAP financial measures should not be considered in isolation
or as a substitute for the comparable GAAP measures and should be
used as a complement to, and in conjunction with, data presented in
accordance with GAAP.
Safe Harbor StatementThis news release includes
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements include, but are not
limited to, statements regarding the Company’s expected future
financial condition and growth, results of operations, including
revenue and operating income, cash flows, and effective tax rate,
future growth and success, investments, capital allocation,
business strategy, foreign currency exchange rate fluctuations,
statements regarding the expected benefits of the combination with
Webhelp, including the Company’s value proposition to clients, and
statements that include words such as believe, expect, may, will,
provide, could and should and other similar expressions. These
forward-looking statements are inherently uncertain and involve
substantial risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by such
statements. Risks and uncertainties include, among other things:
risks related to the combination with Webhelp, including the
ability to retain key employees and successfully integrate the
Webhelp business; the Company’s ability to realize estimated cost
savings, synergies or other anticipated benefits of the
combination, or that such benefits may take longer to realize than
expected; diversion of management’s attention; the potential impact
of the consummation of the transaction on relationships with
clients and other third parties; risks related to general economic
conditions, including consumer demand, interest rates, inflation,
supply chains and the effects of the conflicts in Ukraine and Gaza;
cyberattacks on the Company’s or its clients’ networks and
information technology systems; uncertainty around, and disruption
from, new and emerging technologies, including the adoption and
utilization of generative artificial intelligence; the failure of
the Company’s staff and contractors to adhere to the Company’s and
its clients’ controls and processes; the inability to protect
personal and proprietary information; the effects of communicable
diseases or other public health crises, natural disasters and
adverse weather conditions; geopolitical, economic and climate- or
weather-related risks in regions with a significant concentration
of the Company’s operations; the inability to execute on the
Company’s digital CX strategy; competitive conditions in the
Company’s industry and consolidation of its competitors;
variability in demand by the Company’s clients or the early
termination of the Company’s client contracts; the level of
business activity of the Company’s clients and the market
acceptance and performance of their products and services; the
demand for CX solutions and technology; damage to the Company’s
reputation through the actions or inactions of third parties;
changes in law, regulations or regulatory guidance; the operability
of the Company’s communication services and information technology
systems and networks; the loss of key personnel or the inability to
attract and retain staff with the skills and expertise needed for
the Company’s business; increases in the cost of labor; the
inability to successfully identify, complete and integrate
strategic acquisitions or investments; higher than expected tax
liabilities; currency exchange rate fluctuations; investigative or
legal actions; and other factors contained in the Company’s Annual
Report on Form 10-K for the fiscal year ended November 30, 2022
filed with the Securities and Exchange Commission and subsequent
SEC filings. The Company does not undertake a duty to update
forward-looking statements, which speak only as of the date on
which they are made.
Copyright 2024 Concentrix Corporation. All
rights reserved. Concentrix, Webhelp, Concentrix + Webhelp, the
Concentrix logo, the Webhelp logo and all other Concentrix company,
product and services names and slogans are trademarks or registered
trademarks of Concentrix Corporation and its subsidiaries.
Concentrix, Webhelp, the Concentrix logo and the Webhelp logo Reg.
U.S. Pat. & Tm. Off. and applicable non-U.S. jurisdictions.
Other names and marks are the property of their respective
owners.
CONCENTRIX
CORPORATIONCONSOLIDATED BALANCE
SHEETS(currency and share amounts in thousands,
except par value)
|
November 30, 2023 |
|
November 30, 2022 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
295,336 |
|
|
$ |
145,382 |
|
Accounts receivable, net |
|
1,888,890 |
|
|
|
1,390,474 |
|
Other current assets |
|
674,423 |
|
|
|
218,476 |
|
Total current assets |
|
2,858,649 |
|
|
|
1,754,332 |
|
Property and equipment,
net |
|
748,691 |
|
|
|
403,829 |
|
Goodwill |
|
5,078,668 |
|
|
|
2,904,402 |
|
Intangible assets, net |
|
2,804,965 |
|
|
|
985,572 |
|
Deferred tax assets |
|
72,333 |
|
|
|
48,541 |
|
Other assets |
|
928,521 |
|
|
|
573,092 |
|
Total assets |
$ |
12,491,827 |
|
|
$ |
6,669,768 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
243,565 |
|
|
$ |
161,190 |
|
Current portion of long-term debt |
|
2,313 |
|
|
|
— |
|
Accrued compensation and benefits |
|
731,172 |
|
|
|
506,966 |
|
Other accrued liabilities |
|
1,016,406 |
|
|
|
395,304 |
|
Income taxes payable |
|
80,583 |
|
|
|
68,663 |
|
Total current liabilities |
|
2,074,039 |
|
|
|
1,132,123 |
|
Long-term debt, net |
|
4,939,712 |
|
|
|
2,224,288 |
|
Other long-term
liabilities |
|
920,536 |
|
|
|
511,995 |
|
Deferred tax liabilities |
|
414,246 |
|
|
|
105,458 |
|
Total liabilities |
|
8,348,533 |
|
|
|
3,973,864 |
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value, 10,000 shares authorized and no
shares issued and outstanding as of November 30, 2023 and 2022,
respectively |
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 250,000 shares authorized; 67,883
and 52,367 shares issued as of November 30, 2023 and 2022,
respectively, and 65,734 and 51,096 shares outstanding as of
November 30, 2023 and 2022, respectively |
|
7 |
|
|
|
5 |
|
Additional paid-in capital |
|
3,582,521 |
|
|
|
2,428,313 |
|
Treasury stock, 2,149 and 1,271 shares as of November 30, 2023 and
2022, respectively |
|
(271,968 |
) |
|
|
(190,779 |
) |
Retained earnings |
|
1,024,461 |
|
|
|
774,114 |
|
Accumulated other comprehensive loss |
|
(191,727 |
) |
|
|
(315,749 |
) |
Total stockholders’ equity |
|
4,143,294 |
|
|
|
2,695,904 |
|
Total liabilities and stockholders’ equity |
$ |
12,491,827 |
|
|
$ |
6,669,768 |
|
|
|
|
|
|
|
|
|
CONCENTRIX
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(currency and share amounts in
thousands, except per share
amounts)(unaudited)
|
Three Months Ended |
|
|
|
Fiscal Year Ended |
|
|
|
November 30, 2023 |
|
November 30, 2022 |
|
% Change |
|
November 30, 2023 |
|
November 30, 2022 |
|
% Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Technology and consumer electronics |
$ |
656,741 |
|
$ |
543,118 |
|
|
21 |
% |
|
$ |
2,205,834 |
|
$ |
1,980,666 |
|
|
11 |
% |
Retail, travel and ecommerce |
|
512,816 |
|
|
304,549 |
|
|
68 |
% |
|
|
1,448,666 |
|
|
1,184,086 |
|
|
22 |
% |
Communications and media |
|
350,416 |
|
|
267,405 |
|
|
31 |
% |
|
|
1,117,694 |
|
|
1,076,289 |
|
|
4 |
% |
Banking, financial services and insurance |
|
323,465 |
|
|
234,137 |
|
|
38 |
% |
|
|
1,091,853 |
|
|
967,810 |
|
|
13 |
% |
Healthcare |
|
186,306 |
|
|
166,696 |
|
|
12 |
% |
|
|
696,266 |
|
|
608,169 |
|
|
14 |
% |
Other |
|
201,018 |
|
|
124,813 |
|
|
61 |
% |
|
|
554,393 |
|
|
507,453 |
|
|
9 |
% |
Total revenue |
|
2,230,762 |
|
|
1,640,718 |
|
|
36 |
% |
|
|
7,114,706 |
|
|
6,324,473 |
|
|
12 |
% |
Cost of revenue |
|
1,407,905 |
|
|
1,047,353 |
|
|
34 |
% |
|
|
4,536,771 |
|
|
4,067,210 |
|
|
12 |
% |
Gross profit |
|
822,857 |
|
|
593,365 |
|
|
39 |
% |
|
|
2,577,935 |
|
|
2,257,263 |
|
|
14 |
% |
Selling, general and
administrative expenses |
|
642,410 |
|
|
415,375 |
|
|
55 |
% |
|
|
1,916,608 |
|
|
1,617,071 |
|
|
19 |
% |
Operating income |
|
180,447 |
|
|
177,990 |
|
|
1 |
% |
|
|
661,327 |
|
|
640,192 |
|
|
3 |
% |
Interest expense and finance
charges, net |
|
70,508 |
|
|
28,061 |
|
|
151 |
% |
|
|
201,004 |
|
|
70,076 |
|
|
187 |
% |
Other expense (income),
net |
|
32,829 |
|
|
(12,640 |
) |
|
(360)% |
|
|
52,095 |
|
|
(34,887 |
) |
|
(249)% |
Income before income
taxes |
|
77,110 |
|
|
162,569 |
|
|
(53)% |
|
|
408,228 |
|
|
605,003 |
|
|
(33)% |
Provision for income
taxes |
|
7,623 |
|
|
57,625 |
|
|
(87)% |
|
|
94,386 |
|
|
169,363 |
|
|
(44)% |
Net income before
non-controlling interest |
|
69,487 |
|
|
104,944 |
|
|
(34)% |
|
|
313,842 |
|
|
435,640 |
|
|
(28)% |
Less: Net income attributable
to non-controlling interest |
|
— |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
591 |
|
|
(100)% |
Net income attributable to
Concentrix Corporation |
$ |
69,487 |
|
$ |
104,944 |
|
|
(34)% |
|
$ |
313,842 |
|
$ |
435,049 |
|
|
(28)% |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.10 |
|
$ |
2.02 |
|
|
|
|
$ |
5.72 |
|
$ |
8.34 |
|
|
|
Diluted |
$ |
1.09 |
|
$ |
2.01 |
|
|
|
|
$ |
5.70 |
|
$ |
8.28 |
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
61,845 |
|
|
51,029 |
|
|
|
|
|
53,801 |
|
|
51,353 |
|
|
|
Diluted |
|
61,957 |
|
|
51,392 |
|
|
|
|
|
54,010 |
|
|
51,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONCENTRIX
CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP
MEASURES(currency and share amounts in thousands,
except per share amounts)(unaudited)
|
Three Months Ended |
|
Fiscal Year Ended |
|
November 30, 2023 |
|
November 30, 2022 |
|
November 30, 2023 |
|
November 30, 2022 |
Operating income |
$ |
180,447 |
|
$ |
177,990 |
|
$ |
661,327 |
|
$ |
640,192 |
Acquisition-related and integration expenses |
|
39,866 |
|
|
18,550 |
|
|
71,336 |
|
|
33,763 |
Amortization of intangibles |
|
96,636 |
|
|
41,648 |
|
|
214,832 |
|
|
162,673 |
Share-based compensation |
|
23,810 |
|
|
9,838 |
|
|
62,493 |
|
|
47,516 |
Non-GAAP operating income |
$ |
340,759 |
|
$ |
248,026 |
|
$ |
1,009,988 |
|
$ |
884,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
November 30, 2023 |
|
November 30, 2022 |
|
November 30, 2023 |
|
November 30, 2022 |
Net income |
$ |
69,487 |
|
$ |
104,944 |
|
|
$ |
313,842 |
|
$ |
435,049 |
|
Net income attributable to non-controlling interest |
|
— |
|
|
— |
|
|
|
— |
|
|
591 |
|
Interest expense and finance charges, net |
|
70,508 |
|
|
28,061 |
|
|
|
201,004 |
|
|
70,076 |
|
Provision for income taxes |
|
7,623 |
|
|
57,625 |
|
|
|
94,386 |
|
|
169,363 |
|
Other expense (income), net |
|
32,829 |
|
|
(12,640 |
) |
|
|
52,095 |
|
|
(34,887 |
) |
Acquisition-related and integration expenses |
|
39,866 |
|
|
18,550 |
|
|
|
71,336 |
|
|
33,763 |
|
Amortization of intangibles |
|
96,636 |
|
|
41,648 |
|
|
|
214,832 |
|
|
162,673 |
|
Share-based compensation |
|
23,810 |
|
|
9,838 |
|
|
|
62,493 |
|
|
47,516 |
|
Depreciation |
|
57,169 |
|
|
36,757 |
|
|
|
171,801 |
|
|
146,864 |
|
Adjusted EBITDA |
$ |
397,928 |
|
$ |
284,783 |
|
|
$ |
1,181,789 |
|
$ |
1,031,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
November 30, 2023 |
|
November 30, 2022 |
|
November 30, 2023 |
|
November 30, 2022 |
Operating margin |
8.1 |
% |
|
10.8 |
% |
|
9.3 |
% |
|
10.1 |
% |
Non-GAAP operating margin |
15.3 |
% |
|
15.1 |
% |
|
14.2 |
% |
|
14.0 |
% |
Adjusted EBITDA margin |
17.8 |
% |
|
17.4 |
% |
|
16.6 |
% |
|
16.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
November 30, 2023 |
|
November 30, 2022 |
|
November 30, 2023 |
|
November 30, 2022 |
Net income |
$ |
69,487 |
|
|
$ |
104,944 |
|
|
$ |
313,842 |
|
|
$ |
435,049 |
|
Acquisition-related and integration expenses |
|
39,866 |
|
|
|
18,550 |
|
|
|
71,336 |
|
|
|
33,763 |
|
Acquisition-related expenses included in interest expense and
finance charges, net (1) |
|
— |
|
|
|
— |
|
|
|
25,556 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net (1) |
|
136 |
|
|
|
— |
|
|
|
14,629 |
|
|
|
— |
|
Imputed interest related to sellers' note included in interest
expense and finance charges, net |
|
2,998 |
|
|
|
— |
|
|
|
2,998 |
|
|
|
— |
|
Change in acquisition contingent consideration included in other
expense (income), net |
|
15,681 |
|
|
|
— |
|
|
|
15,681 |
|
|
|
— |
|
Foreign currency losses (gains), net (4) |
|
12,833 |
|
|
|
(14,585 |
) |
|
|
14,938 |
|
|
|
(38,871 |
) |
Amortization of intangibles |
|
96,636 |
|
|
|
41,648 |
|
|
|
214,832 |
|
|
|
162,673 |
|
Share-based compensation |
|
23,810 |
|
|
|
9,838 |
|
|
|
62,493 |
|
|
|
47,516 |
|
Income taxes related to the above (2) |
|
(47,990 |
) |
|
|
(14,085 |
) |
|
|
(105,616 |
) |
|
|
(52,091 |
) |
Non-GAAP net income |
$ |
213,457 |
|
|
$ |
146,310 |
|
|
$ |
630,689 |
|
|
$ |
588,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
November 30, 2023 |
|
November 30, 2022 |
|
November 30, 2023 |
|
November 30, 2022 |
Net income |
$ |
69,487 |
|
|
$ |
104,944 |
|
|
$ |
313,842 |
|
|
$ |
435,049 |
|
Less: net income allocated to participating securities |
|
(1,659 |
) |
|
|
(1,762 |
) |
|
|
(5,978 |
) |
|
|
(6,583 |
) |
Net income attributable to common
stockholders |
|
67,828 |
|
|
|
103,182 |
|
|
|
307,864 |
|
|
|
428,466 |
|
Acquisition-related and integration expenses allocated to common
stockholders |
|
38,914 |
|
|
|
18,239 |
|
|
|
69,977 |
|
|
|
33,252 |
|
Acquisition-related expenses included in interest expense and
finance charges, net allocated to common stockholders (1) |
|
— |
|
|
|
— |
|
|
|
25,069 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net allocated to common stockholders (1) |
|
133 |
|
|
|
— |
|
|
|
14,350 |
|
|
|
— |
|
Imputed interest related to sellers' note included in interest
expense and finance charges, net allocated to common
stockholders |
|
2,926 |
|
|
|
— |
|
|
|
2,941 |
|
|
|
— |
|
Change in acquisition contingent consideration included in other
expense (income), net allocated to common stockholders |
|
15,307 |
|
|
|
— |
|
|
|
15,382 |
|
|
|
— |
|
Foreign currency losses (gains), net allocated to common
stockholders (4) |
|
12,527 |
|
|
|
(14,340 |
) |
|
|
14,653 |
|
|
|
(38,283 |
) |
Amortization of intangibles allocated to common stockholders |
|
94,329 |
|
|
|
40,949 |
|
|
|
210,740 |
|
|
|
160,211 |
|
Share-based compensation allocated to common stockholders |
|
23,242 |
|
|
|
9,673 |
|
|
|
61,303 |
|
|
|
46,797 |
|
Income taxes related to the above allocated to common stockholders
(2) |
|
(46,844 |
) |
|
|
(13,849 |
) |
|
|
(103,604 |
) |
|
|
(51,303 |
) |
Non-GAAP net income
attributable to common stockholders |
$ |
208,362 |
|
|
$ |
143,854 |
|
|
$ |
618,675 |
|
|
$ |
579,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
November 30, 2023 |
|
November 30, 2022 |
|
November 30, 2023 |
|
November 30, 2022 |
Diluted earnings per common share (“EPS”)(3), (4) |
$ |
1.09 |
|
|
$ |
2.01 |
|
|
$ |
5.70 |
|
|
$ |
8.28 |
|
Acquisition-related and integration expenses |
|
0.63 |
|
|
|
0.35 |
|
|
|
1.30 |
|
|
|
0.64 |
|
Acquisition-related expenses included in interest expense and
finance charges, net(1) |
|
— |
|
|
|
— |
|
|
|
0.46 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net(1) |
|
— |
|
|
|
— |
|
|
|
0.27 |
|
|
|
— |
|
Imputed interest related to sellers' note included in interest
expense and finance charges, net |
|
0.05 |
|
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
Change in acquisition contingent consideration included in other
expense (income), net |
|
0.25 |
|
|
|
— |
|
|
|
0.28 |
|
|
|
— |
|
Foreign currency losses (gains), net(4) |
|
0.20 |
|
|
|
(0.28 |
) |
|
|
0.27 |
|
|
|
(0.74 |
) |
Amortization of intangibles |
|
1.52 |
|
|
|
0.80 |
|
|
|
3.90 |
|
|
|
3.10 |
|
Share-based compensation |
|
0.38 |
|
|
|
0.19 |
|
|
|
1.14 |
|
|
|
0.90 |
|
Income taxes related to the above(2) |
|
(0.76 |
) |
|
|
(0.27 |
) |
|
|
(1.92 |
) |
|
|
(0.99 |
) |
Non-GAAP diluted EPS |
$ |
3.36 |
|
|
$ |
2.80 |
|
|
$ |
11.45 |
|
|
$ |
11.19 |
|
|
|
|
|
|
|
|
|
Weighted-average number of
common shares - diluted |
|
61,957 |
|
|
|
51,392 |
|
|
|
54,010 |
|
|
|
51,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
November 30, 2023 |
|
November 30, 2022 |
|
November 30, 2023 |
|
November 30, 2022 |
Net cash provided by operating activities |
$ |
229,264 |
|
|
$ |
235,679 |
|
|
$ |
678,008 |
|
|
$ |
600,720 |
|
Purchases of property and
equipment |
|
(64,815 |
) |
|
|
(42,742 |
) |
|
|
(180,532 |
) |
|
|
(140,018 |
) |
Free cash flow |
$ |
164,449 |
|
|
$ |
192,937 |
|
|
$ |
497,476 |
|
|
$ |
460,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecast |
|
Three Months Ending February 29, 2024 |
|
Fiscal Year Ending November 30, 2024 |
|
Low |
|
High |
|
Low |
|
High |
Revenue |
$ |
2,360,000 |
|
|
$ |
2,406,000 |
|
|
$ |
9,510,000 |
|
|
$ |
9,700,000 |
|
Proforma revenue growth(5) |
(0.1)% |
|
|
1.9 |
% |
|
|
0.3 |
% |
|
|
2.3 |
% |
Foreign exchange impact |
|
1.1 |
% |
|
|
1.1 |
% |
|
|
0.7 |
% |
|
|
0.7 |
% |
Proforma constant currency
revenue growth |
|
1.0 |
% |
|
|
3.0 |
% |
|
|
1.0 |
% |
|
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecast |
|
Three Months Ending February 29, 2024 |
|
Fiscal Year Ending November 30, 2024 |
|
Low |
|
High |
|
Low |
|
High |
Operating income |
$ |
158,000 |
|
$ |
161,000 |
|
$ |
770,000 |
|
$ |
800,000 |
Amortization of intangibles |
|
114,000 |
|
|
116,000 |
|
|
450,000 |
|
|
460,000 |
Share-based compensation |
|
21,000 |
|
|
23,000 |
|
|
95,000 |
|
|
105,000 |
Acquisition-related and integration expenses |
|
22,000 |
|
|
25,000 |
|
|
75,000 |
|
|
85,000 |
Non-GAAP operating income |
$ |
315,000 |
|
$ |
325,000 |
|
$ |
1,390,000 |
|
$ |
1,450,000 |
(1) Included in these amounts are a) expensed Bridge Facility
financing fees and interest expense associated with our senior
notes, net of interest earned on the invested senior notes proceeds
incurred in advance of the combination with Webhelp and b) expenses
associated with non-designated call option contracts put in place
to hedge foreign exchange movements in connection with the
combination with Webhelp that are included within interest expense
and finance charges, net and other expense (income), net,
respectively, in the consolidated statement of operations.
(2) The tax effect of taxable and deductible non-GAAP
adjustments was calculated using the tax-deductible portion of the
expenses and applying the entity-specific, statutory tax rates
applicable to each item during the respective periods
presented.
(3) Diluted EPS is calculated using the two-class method. The
two-class method is an earnings allocation proportional to the
respective ownership among holders of common stock and
participating securities. For the purposes of calculating diluted
EPS, net income attributable to participating securities was
approximately 2.4% and 1.7% of net income, respectively, for the
three months ended November 30, 2023 and 2022 and 1.9% and 1.5% of
net income, respectively, for the fiscal years ended November 30,
2023 and 2022, and was excluded from total net income to calculate
net income attributable to common stockholders. In addition, the
non-GAAP adjustments allocated to common stockholders were
calculated based on the percentage of net income attributable to
common stockholders.
(4) Foreign currency losses (gains), net are included in other
expense (income), net and primarily consist of gains and losses
recognized on the revaluation and settlement of foreign currency
transactions and realized and unrealized gains and losses on
derivative contracts that do not qualify for hedge accounting. The
reported amounts for non-GAAP net income and non-GAAP EPS for the
three months and fiscal year ended November 30, 2023 include
adjustments to exclude these foreign currency losses (gains), net,
which were not adjusted in similar non-GAAP measures previously
reported for the corresponding periods in fiscal year 2022. In
order to enhance comparability, similar adjustments were made for
non-GAAP net income and non-GAAP EPS for the three months and
fiscal year ended November 30, 2022.
(5) The supplemental pro forma revenue presented below is for
illustrative purposes only, does not include the pro forma
adjustments that would be required under Regulation S-X for pro
forma financial information, is not necessarily indicative of the
financial position or results of operations that would have been
realized if the combination with Webhelp had been completed on
December 1, 2022, does not reflect synergies that might have been
achieved, nor is it indicative of future operating results or
financial position. The pro forma adjustments are based upon
currently available information and certain assumptions that the
Company believes are reasonable under the circumstances.
The supplemental pro forma financial information reflects pro
forma adjustments to present the combined pro forma results of
operations as if the combination with Webhelp had occurred on
December 1, 2022. The supplemental pro forma financial information
for the quarter ended February 28, 2023 and the fiscal year ended
November 30, 2023 is as follows:
|
Three Months Ended |
|
Fiscal Year Ended |
|
February 28, 2023 |
|
November 30, 2023 |
Revenue |
$ |
2,362,015 |
|
$ |
9,485,600 |
Investor Contact:
David Stein
Investor Relations
Concentrix Corporation
david.stein@concentrix.com
(513) 703-9306
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