Concentrix Corp (CNXC, Financial), a global technology and services leader specializing in customer engagement and management, reported its financial results for the fiscal third quarter of 2024. The company operates across various industry verticals, including technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and insurance, and healthcare. Geographically, Concentrix has a presence in the Philippines, United States, India, Canada, Germany, Great Britain, and other regions.
Performance Overview
For the third quarter of 2024, Concentrix Corp (CNXC, Financial) reported revenue of $2,387.4 million, surpassing the analyst estimate of $2,382.30 million. This represents a 46.2% increase compared to $1,632.8 million in the same period last year. However, the company's diluted earnings per share (EPS) came in at $0.25, significantly lower than the analyst estimate of $1.05 and a sharp decline from $1.49 in the prior year.
Financial Achievements and Challenges
Despite the impressive revenue growth, Concentrix faced challenges that impacted its profitability. The operating income for the quarter was $153.2 million, down from $162.3 million in the previous year, primarily due to increased amortization of intangibles and planned integration expenses associated with the company's combination with Webhelp. The non-GAAP operating income was $331.0 million, up from $231.0 million last year, reflecting a 43.3% increase.
The company's net income for the quarter was $16.6 million, a significant drop from $77.6 million in the same period last year. This decline was attributed to higher amortization and integration expenses. The non-GAAP net income, however, rose to $192.2 million from $143.7 million, marking a 33.8% increase.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenue ($M) | 2,387.4 | 1,632.8 | 46.2% |
| Operating Income ($M) | 153.2 | 162.3 | -5.6% |
| Non-GAAP Operating Income ($M) | 331.0 | 231.0 | 43.3% |
| Net Income ($M) | 16.6 | 77.6 | -78.6% |
| Non-GAAP Net Income ($M) | 192.2 | 143.7 | 33.8% |
| Adjusted EBITDA ($M) | 388.1 | 269.3 | 44.1% |
| Diluted EPS | 0.25 | 1.49 | -83.2% |
| Non-GAAP Diluted EPS | 2.87 | 2.76 | 4.0% |
Income Statement Highlights
Concentrix's gross profit for the quarter was $864.2 million, up from $593.7 million in the previous year, reflecting a 46% increase. Selling, general, and administrative expenses rose by 65% to $710.9 million, impacting the operating income, which decreased by 6% to $153.2 million. The company's interest expense and finance charges increased by 64% to $80.8 million, further affecting the net income.
Balance Sheet and Cash Flow
As of August 31, 2024, Concentrix reported total assets of $12,207.6 million, slightly down from $12,491.8 million as of November 30, 2023. The company's cash and cash equivalents stood at $246.2 million, a decrease from $295.3 million. Total liabilities were $8,038.8 million, down from $8,348.5 million, while stockholders' equity increased to $4,168.8 million from $4,143.3 million.
Commentary and Outlook
"Our third quarter marked another quarter of solid revenue growth and operating results," said Chris Caldwell, President and CEO of Concentrix. "We are also delighted to leverage our technology investments to bring our iX Hello product to market with velocity. We believe iX Hello helps augment our existing technology partner strategies, underscores the positive transformation of our business and reflects our strong competitive position as the world’s most trusted provider of intelligent experience solutions."
Concentrix also announced the launch of iX Helloâ„¢, a Generative AI-powered solution aimed at boosting productivity and engagement. This marks the company's first commercial product launch, reflecting its accelerated AI investments.
Dividend and Share Repurchase
The company returned $60 million to shareholders through share repurchases and dividends in the quarter. It also raised its quarterly dividend by 10% to $0.33275 per share, payable on November 5, 2024. Concentrix repurchased 0.6 million shares at an average cost of $64.89 per
Explore the complete 8-K earnings release (here) from Concentrix Corp for further details.
