Concentrix Corporation (NASDAQ: CNXC), a leading global provider of
customer experience (CX) solutions and technology, today announced
financial results for the fiscal second quarter ended May 31,
2023.
|
Three Months Ended |
|
|
|
May 31, 2023 |
|
May 31, 2022 |
|
Change |
Revenue ($M) |
$ |
1,614.7 |
|
|
$ |
1,568.1 |
|
|
3.0% |
Operating income ($M) |
$ |
162.6 |
|
|
$ |
156.9 |
|
|
3.6% |
Non-GAAP operating income ($M)
(1) |
$ |
220.6 |
|
|
$ |
212.8 |
|
|
3.7% |
Operating margin |
|
10.1 |
% |
|
|
10.0 |
% |
|
10 bps |
Non-GAAP operating margin
(1) |
|
13.7 |
% |
|
|
13.6 |
% |
|
10 bps |
Net income ($M) |
$ |
78.9 |
|
|
$ |
113.1 |
|
|
(30.2)% |
Non-GAAP net income ($M)
(1) |
$ |
140.6 |
|
|
$ |
154.8 |
|
|
(9.2)% |
Adjusted EBITDA ($M) (1) |
$ |
258.8 |
|
|
$ |
249.9 |
|
|
3.6% |
Adjusted EBITDA margin
(1) |
|
16.0 |
% |
|
|
15.9 |
% |
|
10 bps |
Diluted earnings per common
share |
$ |
1.51 |
|
|
$ |
2.14 |
|
|
(29.4)% |
Non-GAAP diluted earnings per
common share (1) |
$ |
2.69 |
|
|
$ |
2.93 |
|
|
(8.2)% |
(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. |
|
Second Quarter Fiscal
2023 Highlights:
- Revenue was $1,614.7 million, up 3.0% from the prior year
second quarter, including a 1.6-point negative impact of foreign
exchange rates compared with the prior year period, compared with
$1,568.1 million in the prior year second quarter, and up 1.6% on
an adjusted constant currency basis.
- Operating income was $162.6 million, or 10.1% of revenue,
compared with $156.9 million, or 10.0% of revenue, in the prior
year second quarter.
- Non-GAAP operating income was $220.6 million, or 13.7% of
revenue, compared with $212.8 million, or 13.6% of revenue, in the
prior year second quarter.
- Adjusted EBITDA was $258.8 million, or 16.0% of revenue,
compared with $249.9 million, or 15.9% of revenue, in the prior
year second quarter.
- Cash flow from operations was $133.4 million in the quarter.
Free cash flow for the quarter was $101.3 million.
- Diluted earnings per common share (“EPS”) was $1.51 compared to
$2.14 in the prior year second quarter.
- Non-GAAP diluted EPS was $2.69 compared to $2.93 in the prior
year second quarter.
"Despite the prevailing macroeconomic environment, I am pleased
with the margin expansion and free cash flow we achieved during the
second quarter," said Chris Caldwell, Concentrix President and CEO.
"While some clients have seen volumes below expectations, we have
been able to maintain and grow share and have grown in each of our
strategic verticals. We have made notable progress in our
integration planning with Webhelp, giving us further confidence in
the value creation of the combination. We have seen nice progress
and early successes in harnessing the power of generative AI in
multiple proof of concepts across our business. We continue to be
confident that we will deliver revenue growth, margin and cash flow
expansion and create long-term shareholder value."
Quarterly Dividend and Share Repurchase
Program:
- Concentrix paid a $0.275 per share quarterly dividend on May 9,
2023. The Company’s Board of Directors has declared a quarterly
dividend of $0.275 per share payable on August 8, 2023, to
shareholders of record at the close of business on July 28,
2023.
- Concentrix repurchased 39,000 shares in the second quarter at a
cost of $4.9 million under its previously announced share
repurchase program at an average cost of $126.39 per share. At
May 31, 2023, the Company’s remaining share repurchase
authorization was $339.1 million.
Third Quarter and Full Year
Fiscal 2023 Outlook The
following statements are based on Concentrix’ current expectations
for the third quarter and full year fiscal 2023. Non-GAAP financial
measures exclude the impact of any future acquisitions,
acquisition-related and integration expenses, amortization of
intangible assets, depreciation, share-based compensation and the
related tax effects thereon. These statements are forward-looking
and actual results may differ materially.
Third Quarter Fiscal 2023 Expectations:
- Third quarter adjusted constant currency revenue growth is
expected to be in the range of 1.5% to 2.5%. Based on current
exchange rates, our expectations assume a 0.2-point positive impact
of foreign exchange rates compared with the prior year.
Additionally, our expectations exclude an expected revenue
contribution of approximately $28 million in third quarter revenue
from acquired operations not included in the full prior year
results. Based on the above assumptions, we expect third quarter
reported revenue in the range of $1.635 billion to $1.650
billion.
- Operating income is expected to be in the range of $172 million
to $182 million and non-GAAP operating income is expected to be in
the range of $225 million to $235 million.
- The effective tax rate is expected to approximate 26%.
Full Year 2023 Expectations:
- Full year adjusted constant currency revenue growth is expected
to be in the range of 2.0% to 3.0%. Based on current exchange
rates, our expectations assume a 0.5-point negative impact of
foreign exchange rates compared with the prior year. Additionally,
our expectations exclude an expected revenue contribution of
approximately $156 million for the full year from acquired
operations not included in the full prior year results. Based on
the above assumptions, we expect full year reported revenue in the
range of $6.575 billion to $6.640 billion.
- Operating income is expected to be in the range of $690 million
to $715 million and non-GAAP operating income is expected to be in
the range of $920 million to $945 million.
- The effective tax rate is expected to approximate 26%.
Conference Call and WebcastConcentrix will host
a conference call for investors to review its second quarter fiscal
2023 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 ConcentrixWe’re Concentrix (Nasdaq:
CNXC), a leading global provider of customer experience (CX)
solutions and technology. We Reimagine everything CX to improve
business performance 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 for over 130 Fortune Global 500 and 125
new economy clients. 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 40 countries and 6 continents,
we provide services across key industry verticals: technology &
consumer electronics; retail, travel & ecommerce; banking,
financial services & insurance; healthcare; communications
& media; automotive; and energy & public sector. Location:
Virtually Everywhere. Visit www.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.
- Adjusted constant currency revenue growth, which is constant
currency revenue growth excluding revenue from acquired operations
in the current period for the twelve months following an
acquisition and excluding revenue from divested operations in the
comparative period for the twelve months preceding a divestiture.
Adjusted constant currency revenue growth presents organic constant
currency revenue growth for the business, without the impact of
acquisitions or divestitures, thereby facilitating period-to-period
comparisons of our business performance.
- 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, and share-based compensation.
- 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 earnings per common share (“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, and
share-based compensation.
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, free cash flow, effective tax rate,
margin and cash flow expansion, creation of long-term shareholder
value, investments, capital allocation, business strategy, foreign
currency exchange rate fluctuations, 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
proposed transaction with Webhelp, including that the proposed
transaction will not be consummated; the ability to receive
shareholder approval and regulatory approvals for the proposed
transaction in a timely manner, on acceptable terms or at all, or
to satisfy the other closing conditions to the proposed
transaction; conditions in the credit markets and the ability to
obtain financing for the proposed transaction on a favorable basis,
if at all; fluctuations in currency exchange rates and their impact
on the U.S. dollar cost for euro-denominated obligations; 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 proposed
transaction, or that such benefits may take longer to realize than
expected; diversion of management’s attention; the potential impact
of the announcement or consummation of the proposed acquisition on
relationships with clients and other third parties; the unfavorable
outcome of any legal proceedings that may be instituted against the
Company or Webhelp; risks related to general economic conditions,
including consumer demand, interest rates, inflation, supply chains
and the effects of the conflict in Ukraine; cyberattacks on the
Company’s or its clients’ networks and information technology
systems; 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
inability to execute on the Company’s digital CX strategy; the loss
of key personnel or the inability to attract and retain staff with
the skills and expertise needed for our business; increases in the
cost of labor; the effects of the COVID-19 pandemic and other
communicable diseases, natural disasters, adverse weather
conditions or public health crises; geopolitical, economic and
climate- or weather-related risks in regions with a significant
concentration of the Company’s operations; the inability to
successfully identify, complete and integrate strategic
acquisitions or investments, including the integration of
ServiceSource International, Inc.; competitive conditions in the
Company’s industry and consolidation of its competitors; higher
than expected tax liabilities; the demand for CX solutions and
technology; 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; currency
exchange rate fluctuations; the operability of the Company’s
communication services and information technology systems and
networks; changes in law, regulations or regulatory guidance;
damage to the Company’s reputation through the actions or inactions
of third parties; 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 2023 Concentrix Corporation. All
rights reserved. Concentrix, the Concentrix logo, and all other
Concentrix company, product and services names and slogans are
trademarks or registered trademarks of Concentrix Corporation and
its subsidiaries. Concentrix and the Concentrix 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) |
|
|
May 31, 2023 |
|
November 30, 2022 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
152,896 |
|
|
$ |
145,382 |
|
Accounts receivable, net |
|
1,394,012 |
|
|
|
1,390,474 |
|
Other current assets |
|
205,149 |
|
|
|
218,476 |
|
Total current assets |
|
1,752,057 |
|
|
|
1,754,332 |
|
Property and equipment,
net |
|
394,464 |
|
|
|
403,829 |
|
Goodwill |
|
2,903,594 |
|
|
|
2,904,402 |
|
Intangible assets, net |
|
910,784 |
|
|
|
985,572 |
|
Deferred tax assets |
|
44,892 |
|
|
|
48,541 |
|
Other assets |
|
554,214 |
|
|
|
573,092 |
|
Total assets |
$ |
6,560,005 |
|
|
$ |
6,669,768 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
148,679 |
|
|
$ |
161,190 |
|
Current portion of long-term debt |
|
— |
|
|
|
— |
|
Accrued compensation and benefits |
|
418,221 |
|
|
|
506,966 |
|
Other accrued liabilities |
|
399,539 |
|
|
|
395,304 |
|
Income taxes payable |
|
41,045 |
|
|
|
68,663 |
|
Total current liabilities |
|
1,007,484 |
|
|
|
1,132,123 |
|
Long-term debt, net |
|
2,130,960 |
|
|
|
2,224,288 |
|
Other long-term
liabilities |
|
490,120 |
|
|
|
511,995 |
|
Deferred tax liabilities |
|
77,179 |
|
|
|
105,458 |
|
Total liabilities |
|
3,705,743 |
|
|
|
3,973,864 |
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value, 10,000 shares authorized and no
shares issued and outstanding as of May 31, 2023 and November 30,
2022, respectively |
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 250,000 shares authorized; 52,619
and 52,367 shares issued as of May 31, 2023 and November 30, 2022,
respectively, and 51,178 and 51,096 shares outstanding as of May
31, 2023 and November 30, 2022, respectively |
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
2,459,234 |
|
|
|
2,428,313 |
|
Treasury stock, 1,441 and 1,271 shares as of May 31, 2023 and
November 30, 2022, respectively |
|
(214,172 |
) |
|
|
(190,779 |
) |
Retained earnings |
|
912,204 |
|
|
|
774,114 |
|
Accumulated other comprehensive loss |
|
(303,009 |
) |
|
|
(315,749 |
) |
Total stockholders’ equity |
|
2,854,262 |
|
|
|
2,695,904 |
|
Total liabilities and stockholders’ equity |
$ |
6,560,005 |
|
|
$ |
6,669,768 |
|
|
CONCENTRIX CORPORATIONCONSOLIDATED
STATEMENTS OF OPERATIONS(currency and share
amounts in thousands, except per share
amounts)(unaudited) |
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
May 31, 2023 |
|
May 31, 2022 |
|
% Change |
|
May 31, 2023 |
|
May 31, 2022 |
|
%Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Technology and consumer electronics |
$ |
504,204 |
|
$ |
466,754 |
|
|
8 |
% |
|
$ |
1,020,812 |
|
$ |
936,953 |
|
|
9 |
% |
Retail, travel and ecommerce |
|
307,952 |
|
|
295,025 |
|
|
4 |
% |
|
|
613,456 |
|
|
579,942 |
|
|
6 |
% |
Communications and media |
|
257,794 |
|
|
273,817 |
|
|
(6 |
)% |
|
|
514,781 |
|
|
534,460 |
|
|
(4 |
)% |
Banking, financial services and insurance |
|
261,964 |
|
|
255,583 |
|
|
2 |
% |
|
|
521,617 |
|
|
498,829 |
|
|
5 |
% |
Healthcare |
|
164,708 |
|
|
148,252 |
|
|
11 |
% |
|
|
342,532 |
|
|
298,388 |
|
|
15 |
% |
Other |
|
118,084 |
|
|
128,670 |
|
|
(8 |
)% |
|
|
237,912 |
|
|
255,581 |
|
|
(7 |
)% |
Total revenue |
$ |
1,614,706 |
|
$ |
1,568,101 |
|
|
3 |
% |
|
$ |
3,251,110 |
|
$ |
3,104,153 |
|
|
5 |
% |
Cost of revenue |
|
1,034,481 |
|
|
1,009,185 |
|
|
3 |
% |
|
|
2,089,724 |
|
|
2,007,103 |
|
|
4 |
% |
Gross profit |
|
580,225 |
|
|
558,916 |
|
|
4 |
% |
|
|
1,161,386 |
|
|
1,097,050 |
|
|
6 |
% |
Selling, general and
administrative expenses |
|
417,659 |
|
|
402,004 |
|
|
4 |
% |
|
|
842,773 |
|
|
792,393 |
|
|
6 |
% |
Operating income |
|
162,566 |
|
|
156,912 |
|
|
4 |
% |
|
|
318,613 |
|
|
304,657 |
|
|
5 |
% |
Interest expense and finance
charges, net |
|
47,213 |
|
|
12,973 |
|
|
264 |
% |
|
|
81,203 |
|
|
21,743 |
|
|
273 |
% |
Other expense (income),
net |
|
9,383 |
|
|
(2,545 |
) |
|
(469 |
)% |
|
|
13,097 |
|
|
(10,161 |
) |
|
(229 |
)% |
Income before income
taxes |
|
105,970 |
|
|
146,484 |
|
|
(28 |
)% |
|
|
224,313 |
|
|
293,075 |
|
|
(23 |
)% |
Provision for income
taxes |
|
27,120 |
|
|
33,451 |
|
|
(19 |
)% |
|
|
57,593 |
|
|
69,503 |
|
|
(17 |
)% |
Net income before
non-controlling interest |
|
78,850 |
|
|
113,033 |
|
|
(30 |
)% |
|
|
166,720 |
|
|
223,572 |
|
|
(25 |
)% |
Less: Net income attributable
to non-controlling interest |
|
— |
|
|
(109 |
) |
|
(100 |
)% |
|
|
— |
|
|
157 |
|
|
(100 |
)% |
Net income attributable to
Concentrix Corporation |
$ |
78,850 |
|
$ |
113,142 |
|
|
(30 |
)% |
|
$ |
166,720 |
|
$ |
223,415 |
|
|
(25 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.51 |
|
$ |
2.16 |
|
|
|
|
$ |
3.20 |
|
$ |
4.27 |
|
|
|
Diluted |
$ |
1.51 |
|
$ |
2.14 |
|
|
|
|
$ |
3.18 |
|
$ |
4.23 |
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
51,181 |
|
|
51,564 |
|
|
|
|
|
51,165 |
|
|
51,596 |
|
|
|
Diluted |
|
51,392 |
|
|
51,990 |
|
|
|
|
|
51,457 |
|
|
51,995 |
|
|
|
|
CONCENTRIX CORPORATIONRECONCILIATION OF
GAAP TO NON-GAAP MEASURES(currency and share
amounts in thousands, except per share
amounts)(unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Revenue |
$ |
1,614,706 |
|
|
$ |
1,568,101 |
|
|
$ |
3,251,110 |
|
|
$ |
3,104,153 |
|
Revenue growth, as reported under U.S. GAAP |
|
3.0 |
% |
|
|
14.5 |
% |
|
|
4.7 |
% |
|
|
14.0 |
% |
Foreign exchange impact |
|
1.6 |
% |
|
|
2.7 |
% |
|
|
2.1 |
% |
|
|
2.3 |
% |
Constant currency revenue
growth |
|
4.6 |
% |
|
|
17.2 |
% |
|
|
6.8 |
% |
|
|
16.3 |
% |
Effect of excluding revenue of acquired and divested
businesses |
(3.0 |
)% |
|
(7.8 |
)% |
|
(4.1 |
)% |
|
(6.3 |
)% |
Adjusted constant currency
revenue growth |
|
1.6 |
% |
|
|
9.4 |
% |
|
|
2.7 |
% |
|
|
10.0 |
% |
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Operating income |
$ |
162,566 |
|
|
$ |
156,912 |
|
|
$ |
318,613 |
|
|
$ |
304,657 |
|
Acquisition-related and integration expenses |
|
7,433 |
|
|
|
1,726 |
|
|
|
12,976 |
|
|
|
2,648 |
|
Amortization of intangibles |
|
39,426 |
|
|
|
41,469 |
|
|
|
78,686 |
|
|
|
79,525 |
|
Share-based compensation |
|
11,189 |
|
|
|
12,647 |
|
|
|
27,943 |
|
|
|
27,816 |
|
Non-GAAP operating income |
$ |
220,614 |
|
|
$ |
212,754 |
|
|
$ |
438,218 |
|
|
$ |
414,646 |
|
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Net income |
$ |
78,850 |
|
|
$ |
113,142 |
|
|
$ |
166,720 |
|
|
$ |
223,415 |
|
Net income attributable to non-controlling interest |
|
— |
|
|
|
(109 |
) |
|
|
— |
|
|
|
157 |
|
Interest expense and finance charges, net |
|
47,213 |
|
|
|
12,973 |
|
|
|
81,203 |
|
|
|
21,743 |
|
Provision for income taxes |
|
27,120 |
|
|
|
33,451 |
|
|
|
57,593 |
|
|
|
69,503 |
|
Other expense (income), net |
|
9,383 |
|
|
|
(2,545 |
) |
|
|
13,097 |
|
|
|
(10,161 |
) |
Acquisition-related and integration expenses |
|
7,433 |
|
|
|
1,726 |
|
|
|
12,976 |
|
|
|
2,648 |
|
Amortization of intangibles |
|
39,426 |
|
|
|
41,469 |
|
|
|
78,686 |
|
|
|
79,525 |
|
Share-based compensation |
|
11,189 |
|
|
|
12,647 |
|
|
|
27,943 |
|
|
|
27,816 |
|
Depreciation |
|
38,211 |
|
|
|
37,137 |
|
|
|
76,386 |
|
|
|
73,174 |
|
Adjusted EBITDA |
$ |
258,825 |
|
|
$ |
249,891 |
|
|
$ |
514,604 |
|
|
$ |
487,820 |
|
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Operating margin |
10.1 |
% |
|
10.0 |
% |
|
9.8 |
% |
|
9.8 |
% |
Non-GAAP operating margin |
13.7 |
% |
|
13.6 |
% |
|
13.5 |
% |
|
13.4 |
% |
Adjusted EBITDA margin |
16.0 |
% |
|
15.9 |
% |
|
15.8 |
% |
|
15.7 |
% |
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Net income |
$ |
78,850 |
|
|
$ |
113,142 |
|
|
$ |
166,720 |
|
|
$ |
223,415 |
|
Acquisition-related and integration expenses |
|
7,433 |
|
|
|
1,726 |
|
|
|
12,976 |
|
|
|
2,648 |
|
Acquisition-related expenses included in interest expense and
finance charges, net (1) |
|
11,840 |
|
|
|
— |
|
|
|
11,840 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net (1) |
|
12,429 |
|
|
|
— |
|
|
|
12,429 |
|
|
|
— |
|
Amortization of intangibles |
|
39,426 |
|
|
|
41,469 |
|
|
|
78,686 |
|
|
|
79,525 |
|
Share-based compensation |
|
11,189 |
|
|
|
12,647 |
|
|
|
27,943 |
|
|
|
27,816 |
|
Income taxes related to the above (2) |
|
(20,579 |
) |
|
|
(14,180 |
) |
|
|
(35,968 |
) |
|
|
(27,933 |
) |
Non-GAAP net income |
$ |
140,588 |
|
|
$ |
154,804 |
|
|
$ |
274,626 |
|
|
$ |
305,471 |
|
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Net income |
$ |
78,850 |
|
|
$ |
113,142 |
|
|
$ |
166,720 |
|
|
$ |
223,415 |
|
Less: net income allocated to participating securities |
|
(1,357 |
) |
|
|
(1,700 |
) |
|
|
(2,900 |
) |
|
|
(3,243 |
) |
Net income attributable to
common stockholders |
|
77,493 |
|
|
|
111,442 |
|
|
|
163,820 |
|
|
|
220,172 |
|
Acquisition-related and integration expenses allocated to common
stockholders |
|
7,305 |
|
|
|
1,700 |
|
|
|
12,750 |
|
|
|
2,610 |
|
Acquisition-related expenses included in interest expense and
finance charges, net allocated to common stockholders(1) |
|
11,636 |
|
|
|
— |
|
|
|
11,634 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net allocated to common stockholders (1) |
|
12,215 |
|
|
|
— |
|
|
|
12,213 |
|
|
|
— |
|
Amortization of intangibles allocated to common stockholders |
|
38,747 |
|
|
|
40,846 |
|
|
|
77,317 |
|
|
|
78,371 |
|
Share-based compensation allocated to common stockholders |
|
10,996 |
|
|
|
12,457 |
|
|
|
27,457 |
|
|
|
27,412 |
|
Income taxes related to the above allocated to common stockholders
(2) |
|
(20,225 |
) |
|
|
(13,967 |
) |
|
|
(35,342 |
) |
|
|
(27,528 |
) |
Non-GAAP net income
attributable to common stockholders |
$ |
138,167 |
|
|
$ |
152,478 |
|
|
$ |
269,849 |
|
|
$ |
301,037 |
|
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Diluted earnings per common share (“EPS”) (3) |
$ |
1.51 |
|
|
$ |
2.14 |
|
|
$ |
3.18 |
|
|
$ |
4.23 |
|
Acquisition-related and integration expenses |
|
0.14 |
|
|
|
0.03 |
|
|
|
0.25 |
|
|
|
0.05 |
|
Acquisition-related expenses included in interest expense and
finance charges, net (1) |
|
0.23 |
|
|
|
— |
|
|
|
0.23 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net (1) |
|
0.24 |
|
|
|
— |
|
|
|
0.24 |
|
|
|
— |
|
Amortization of intangibles |
|
0.75 |
|
|
|
0.79 |
|
|
|
1.50 |
|
|
|
1.51 |
|
Share-based compensation |
|
0.21 |
|
|
|
0.24 |
|
|
|
0.53 |
|
|
|
0.53 |
|
Income taxes related to the above (2) |
|
(0.39 |
) |
|
|
(0.27 |
) |
|
|
(0.69 |
) |
|
|
(0.53 |
) |
Non-GAAP diluted EPS |
$ |
2.69 |
|
|
$ |
2.93 |
|
|
$ |
5.24 |
|
|
$ |
5.79 |
|
|
|
|
|
|
|
|
|
Weighted-average number of
common shares - diluted |
|
51,392 |
|
|
|
51,990 |
|
|
|
51,457 |
|
|
|
51,995 |
|
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2023 |
|
May 31, 2022 |
|
May 31, 2023 |
|
May 31, 2022 |
Net cash provided by operating activities |
$ |
133,435 |
|
|
$ |
167,469 |
|
|
$ |
237,328 |
|
|
$ |
212,484 |
|
Purchases of property and
equipment |
|
(32,184 |
) |
|
|
(25,773 |
) |
|
|
(71,781 |
) |
|
|
(71,166 |
) |
Free cash flow |
$ |
101,251 |
|
|
$ |
141,696 |
|
|
$ |
165,547 |
|
|
$ |
141,318 |
|
|
Forecast |
|
Three Months Ending August 31, 2023 |
|
Fiscal Year Ending November 30, 2023 |
|
Low |
|
High |
|
Low |
|
High |
Revenue |
$ |
1,635,000 |
|
|
$ |
1,650,000 |
|
|
$ |
6,575,000 |
|
|
$ |
6,640,000 |
|
Foreign exchange impact (4) |
|
(3,000 |
) |
|
|
(3,000 |
) |
|
|
32,000 |
|
|
|
32,000 |
|
Revenue in constant
currency |
$ |
1,632,000 |
|
|
$ |
1,647,000 |
|
|
$ |
6,607,000 |
|
|
$ |
6,672,000 |
|
Effect of excluding revenue of acquired and divested
businesses |
|
(28,000 |
) |
|
|
(28,000 |
) |
|
|
(156,000 |
) |
|
|
(156,000 |
) |
Revenue in adjusted constant
currency |
$ |
1,604,000 |
|
|
$ |
1,619,000 |
|
|
$ |
6,451,000 |
|
|
$ |
6,516,000 |
|
|
Forecast |
|
Three Months Ending August 31, 2023 |
|
Fiscal Year Ending November 30, 2023 |
|
Low |
|
High |
|
Low |
|
High |
Operating income |
$ |
172,100 |
|
|
$ |
182,100 |
|
|
$ |
690,000 |
|
|
$ |
715,000 |
|
Acquisition-related and integration expenses |
|
1,400 |
|
|
|
1,400 |
|
|
|
15,500 |
|
|
|
15,500 |
|
Amortization of intangibles |
|
39,500 |
|
|
|
39,500 |
|
|
|
157,500 |
|
|
|
157,500 |
|
Share-based compensation |
|
12,000 |
|
|
|
12,000 |
|
|
|
57,000 |
|
|
|
57,000 |
|
Non-GAAP operating income |
$ |
225,000 |
|
|
$ |
235,000 |
|
|
$ |
920,000 |
|
|
$ |
945,000 |
|
(1) Included in these amounts are a) bridge financing fees
expensed and b) expenses associated with non-designated call option
contracts put in place to hedge foreign exchange movements in
connection with the Webhelp combination 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.
Unvested restricted stock awards granted to employees are
considered participating securities. For the purposes of
calculating diluted EPS, net income attributable to participating
securities was approximately 1.7% and 1.5% of net income,
respectively, for the three months ended May 31, 2023 and 2022
and 1.7% and 1.5% of net income, respectively, for the six months
ended May 31, 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) Based on foreign currency exchange rates as of June 23,
2023.
Investor Contact:
David Stein
Investor Relations
Concentrix Corporation
david.stein@concentrix.com
(513) 703-9306
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