Concentrix Corporation (NASDAQ: CNXC), a leading global provider of
customer experience (CX) solutions and technology that operates
under the trade name Concentrix + Webhelp, today announced
financial results for the fiscal third quarter ended
August 31, 2023.
|
Three Months Ended |
|
|
|
August 31, 2023 |
|
August 31, 2022 |
|
Change |
Revenue ($M) |
$ |
1,632.8 |
|
|
$ |
1,579.6 |
|
|
3.4 |
% |
Operating income ($M) |
$ |
162.3 |
|
|
$ |
157.5 |
|
|
3.0 |
% |
Non-GAAP operating income ($M)
(1) |
$ |
231.0 |
|
|
$ |
221.5 |
|
|
4.3 |
% |
Operating margin |
|
9.9 |
% |
|
|
10.0 |
% |
|
-10 bps |
|
Non-GAAP operating margin
(1) |
|
14.1 |
% |
|
|
14.0 |
% |
|
10 bps |
|
Net income ($M) |
$ |
77.6 |
|
|
$ |
106.7 |
|
|
(27.3 |
)% |
Non-GAAP net income ($M)
(1) |
$ |
141.0 |
|
|
$ |
154.4 |
|
|
(8.7 |
)% |
Adjusted EBITDA ($M) (1) |
$ |
269.3 |
|
|
$ |
258.4 |
|
|
4.2 |
% |
Adjusted EBITDA margin
(1) |
|
16.5 |
% |
|
|
16.4 |
% |
|
10 bps |
|
Diluted earnings per common
share |
$ |
1.49 |
|
|
$ |
2.04 |
|
|
(27.0 |
)% |
Non-GAAP diluted earnings per
common share (1) |
$ |
2.71 |
|
|
$ |
2.95 |
|
|
(8.1 |
)% |
(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. |
|
Third Quarter Fiscal
2023 Highlights:
- Revenue was $1,632.8 million, up 3.4% from the prior year third
quarter, including a de minimis impact of foreign exchange rates
compared with the prior year period, compared with $1,579.6 million
in the prior year third quarter, and up 1.7% on an adjusted
constant currency basis.
- Operating income was $162.3 million, or 9.9% of revenue,
compared with $157.5 million, or 10.0% of revenue, in the prior
year third quarter.
- Non-GAAP operating income was $231.0 million, or 14.1% of
revenue, compared with $221.5 million, or 14.0% of revenue, in the
prior year third quarter.
- Adjusted EBITDA was $269.3 million, or 16.5% of revenue,
compared with $258.4 million, or 16.4% of revenue, in the prior
year third quarter.
- Cash flow from operations was $211.4 million in the quarter.
Free cash flow for the quarter was $167.5 million.
- Diluted earnings per common share (“EPS”) was $1.49 compared to
$2.04 in the prior year third quarter.
- Non-GAAP diluted EPS was $2.71 compared to $2.95 in the prior
year third quarter.
"We're pleased to announce that our strong execution drove
revenue growth and profitability that were in line with our
expectations for the third quarter, while our free cash flow
increased 32% year on year," said Chris Caldwell, President and CEO
of Concentrix + Webhelp. “Marquee multinational brands continue to
trust us due to our deep domain expertise, consistent global
delivery of high-quality services at scale, unwavering commitment
to system security and regulatory compliance. We have experienced
progress in deploying generative AI with select clients and
sequential growth with our digital IT services business. We're also
benefiting from the vendor consolidation trend which we believe
will create opportunities for revenue growth and margin expansion
in the future.”
Caldwell continued, “With our combination with Webhelp now
complete, we are already seeing client demand for our expanded
offerings. Adding Webhelp’s talented global staff strengthens our
value proposition and solidifies our position as a leading global
CX solutions company.”
Quarterly Dividend and Share Repurchase
Program:
- The Company paid a $0.275 per share quarterly dividend on
August 8, 2023. The Company’s Board of Directors has declared a
quarterly dividend of $0.3025 per share payable on November 7,
2023, to shareholders of record at the close of business on October
27, 2023.
- The Company repurchased 0.3 million shares in the third quarter
at a cost of $27.0 million under its previously announced share
repurchase program at an average cost of $84.35 per share. At
August 31, 2023, the Company’s remaining share repurchase
authorization was $312.1 million.
Business Outlook The following statements are
based on the Company’s current expectations for the fourth quarter
of fiscal 2023, including the contributions of the Webhelp business
from September 25, 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. The non-GAAP EPS guidance assumes no impact from other
expense/income. These statements are forward-looking and actual
results may differ materially.
Fourth Quarter Fiscal 2023 Expectations:
- Fourth quarter reported revenue is expected to be in the range
of $2.190 billion to $2.215 billion.
- Fourth quarter non-GAAP operating income is expected to be in
the range of $330 million to $340 million.
- The effective tax rate is expected to approximate 26%.
- Fourth quarter non-GAAP EPS is expected to be in the range of
$3.03 to $3.15, assuming approximately 62 million diluted common
shares outstanding.
The Company believes that a quantitative reconciliation of the
non-GAAP operating income and non-GAAP EPS outlook to the most
directly comparable GAAP measures cannot be provided without
unreasonable efforts due to the recently completed combination with
Webhelp and the related unavailability of the expected amortization
of acquired intangible assets, acquisition-related and integration
expenses and share-based compensation expenses. 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 WebcastThe Company will
host a conference call for investors to review its third 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 Company’s
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 + Webhelp Hi, 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.
- 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, quality of delivery, creation of
long-term shareholder value, 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; the unfavorable outcome of any
legal proceedings that may be instituted against the Company; 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; 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, Webhelp, Concentrix + Webhelp, the
Concentrix and Webhelp logos, 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)
|
August 31, 2023 |
|
November 30, 2022 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
2,112,792 |
|
|
$ |
145,382 |
|
Accounts receivable, net |
|
1,379,437 |
|
|
|
1,390,474 |
|
Other current assets |
|
209,736 |
|
|
|
218,476 |
|
Total current assets |
|
3,701,965 |
|
|
|
1,754,332 |
|
Property and equipment,
net |
|
406,297 |
|
|
|
403,829 |
|
Goodwill |
|
2,897,048 |
|
|
|
2,904,402 |
|
Intangible assets, net |
|
873,091 |
|
|
|
985,572 |
|
Deferred tax assets |
|
48,109 |
|
|
|
48,541 |
|
Other assets |
|
523,032 |
|
|
|
573,092 |
|
Total assets |
$ |
8,449,542 |
|
|
$ |
6,669,768 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
137,524 |
|
|
$ |
161,190 |
|
Current portion of long-term debt |
|
— |
|
|
|
— |
|
Accrued compensation and benefits |
|
470,351 |
|
|
|
506,966 |
|
Other accrued liabilities |
|
398,314 |
|
|
|
395,304 |
|
Income taxes payable |
|
39,383 |
|
|
|
68,663 |
|
Total current liabilities |
|
1,045,572 |
|
|
|
1,132,123 |
|
Long-term debt, net |
|
3,973,467 |
|
|
|
2,224,288 |
|
Other long-term
liabilities |
|
468,161 |
|
|
|
511,995 |
|
Deferred tax liabilities |
|
58,820 |
|
|
|
105,458 |
|
Total liabilities |
|
5,546,020 |
|
|
|
3,973,864 |
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value, 10,000 shares authorized and no
shares issued and outstanding as of August 31, 2023 and November
30, 2022, respectively |
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 250,000 shares authorized; 52,685
and 52,367 shares issued as of August 31, 2023 and November 30,
2022, respectively, and 50,915 and 51,096 shares outstanding as of
August 31, 2023 and November 30, 2022, respectively |
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
2,471,939 |
|
|
|
2,428,313 |
|
Treasury stock, 1,770 and 1,271 shares as of August 31, 2023 and
November 30, 2022, respectively |
|
(241,852 |
) |
|
|
(190,779 |
) |
Retained earnings |
|
975,591 |
|
|
|
774,114 |
|
Accumulated other comprehensive loss |
|
(302,161 |
) |
|
|
(315,749 |
) |
Total stockholders’ equity |
|
2,903,522 |
|
|
|
2,695,904 |
|
Total liabilities and stockholders’ equity |
$ |
8,449,542 |
|
|
$ |
6,669,768 |
|
|
|
|
|
|
|
|
|
CONCENTRIX
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(currency and share amounts in
thousands, except per share
amounts)(unaudited)
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|
August 31, 2023 |
|
August 31, 2022 |
|
% Change |
|
August 31, 2023 |
|
August 31, 2022 |
|
% Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Technology and consumer electronics |
$ |
528,281 |
|
|
$ |
500,595 |
|
|
|
6 |
% |
|
$ |
1,549,093 |
|
|
$ |
1,437,548 |
|
|
|
8 |
% |
Retail, travel and ecommerce |
|
322,394 |
|
|
|
299,595 |
|
|
|
8 |
% |
|
|
935,850 |
|
|
|
879,537 |
|
|
|
6 |
% |
Communications and media |
|
252,497 |
|
|
|
274,424 |
|
|
|
(8 |
)% |
|
|
767,278 |
|
|
|
808,884 |
|
|
|
(5 |
)% |
Banking, financial services and insurance |
|
246,771 |
|
|
|
234,844 |
|
|
|
5 |
% |
|
|
768,388 |
|
|
|
733,673 |
|
|
|
5 |
% |
Healthcare |
|
167,428 |
|
|
|
143,085 |
|
|
|
17 |
% |
|
|
509,960 |
|
|
|
441,473 |
|
|
|
16 |
% |
Other |
|
115,463 |
|
|
|
127,059 |
|
|
|
(9 |
)% |
|
|
353,375 |
|
|
|
382,640 |
|
|
|
(8 |
)% |
Total revenue |
$ |
1,632,834 |
|
|
$ |
1,579,602 |
|
|
|
3 |
% |
|
$ |
4,883,944 |
|
|
$ |
4,683,755 |
|
|
|
4 |
% |
Cost of revenue |
|
1,039,142 |
|
|
|
1,012,754 |
|
|
|
3 |
% |
|
|
3,128,866 |
|
|
|
3,019,857 |
|
|
|
4 |
% |
Gross profit |
|
593,692 |
|
|
|
566,848 |
|
|
|
5 |
% |
|
|
1,755,078 |
|
|
|
1,663,898 |
|
|
|
5 |
% |
Selling, general and
administrative expenses |
|
431,425 |
|
|
|
409,303 |
|
|
|
5 |
% |
|
|
1,274,198 |
|
|
|
1,201,696 |
|
|
|
6 |
% |
Operating income |
|
162,267 |
|
|
|
157,545 |
|
|
|
3 |
% |
|
|
480,880 |
|
|
|
462,202 |
|
|
|
4 |
% |
Interest expense and finance
charges, net |
|
49,293 |
|
|
|
20,272 |
|
|
|
143 |
% |
|
|
130,496 |
|
|
|
42,015 |
|
|
|
211 |
% |
Other expense (income),
net |
|
6,169 |
|
|
|
(12,086 |
) |
|
|
(151 |
)% |
|
|
19,266 |
|
|
|
(22,247 |
) |
|
|
(187 |
)% |
Income before income
taxes |
|
106,805 |
|
|
|
149,359 |
|
|
|
(28 |
)% |
|
|
331,118 |
|
|
|
442,434 |
|
|
|
(25 |
)% |
Provision for income
taxes |
|
29,170 |
|
|
|
42,235 |
|
|
|
(31 |
)% |
|
|
86,763 |
|
|
|
111,738 |
|
|
|
(22 |
)% |
Net income before
non-controlling interest |
|
77,635 |
|
|
|
107,124 |
|
|
|
(28 |
)% |
|
|
244,355 |
|
|
|
330,696 |
|
|
|
(26 |
)% |
Less: Net income attributable
to non-controlling interest |
|
— |
|
|
|
434 |
|
|
|
(100 |
)% |
|
|
— |
|
|
|
591 |
|
|
|
(100 |
)% |
Net income attributable to
Concentrix Corporation |
$ |
77,635 |
|
|
$ |
106,690 |
|
|
|
(27 |
)% |
|
$ |
244,355 |
|
|
$ |
330,105 |
|
|
|
(26 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.50 |
|
|
$ |
2.05 |
|
|
|
|
$ |
4.70 |
|
|
$ |
6.32 |
|
|
|
Diluted |
$ |
1.49 |
|
|
$ |
2.04 |
|
|
|
|
$ |
4.67 |
|
|
$ |
6.28 |
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
51,059 |
|
|
|
51,193 |
|
|
|
|
|
51,130 |
|
|
|
51,461 |
|
|
|
Diluted |
|
51,209 |
|
|
|
51,549 |
|
|
|
|
|
51,384 |
|
|
|
51,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONCENTRIX
CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP
MEASURES(currency and share amounts in thousands,
except per share amounts)(unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Revenue |
$ |
1,632,834 |
|
|
$ |
1,579,602 |
|
|
$ |
4,883,944 |
|
|
$ |
4,683,755 |
|
Revenue growth, as reported under U.S. GAAP |
|
3.4 |
% |
|
|
13.1 |
% |
|
|
4.3 |
% |
|
|
13.7 |
% |
Foreign exchange impact |
|
— |
% |
|
|
4.2 |
% |
|
|
1.4 |
% |
|
|
2.9 |
% |
Constant currency revenue
growth |
|
3.4 |
% |
|
|
17.3 |
% |
|
|
5.7 |
% |
|
|
16.6 |
% |
Effect of excluding revenue of acquired and divested
businesses |
|
(1.7 |
)% |
|
|
(9.8 |
)% |
|
|
(3.4 |
)% |
|
|
(7.5 |
)% |
Adjusted constant currency
revenue growth |
|
1.7 |
% |
|
|
7.5 |
% |
|
|
2.3 |
% |
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Operating income |
$ |
162,267 |
|
|
$ |
157,545 |
|
|
$ |
480,880 |
|
|
$ |
462,202 |
|
Acquisition-related and integration expenses |
|
18,494 |
|
|
|
12,565 |
|
|
|
31,470 |
|
|
|
15,213 |
|
Amortization of intangibles |
|
39,510 |
|
|
|
41,500 |
|
|
|
118,196 |
|
|
|
121,025 |
|
Share-based compensation |
|
10,740 |
|
|
|
9,862 |
|
|
|
38,683 |
|
|
|
37,678 |
|
Non-GAAP operating income |
$ |
231,011 |
|
|
$ |
221,472 |
|
|
$ |
669,229 |
|
|
$ |
636,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Net income |
$ |
77,635 |
|
|
$ |
106,690 |
|
|
$ |
244,355 |
|
|
$ |
330,105 |
|
Net income attributable to non-controlling interest |
|
— |
|
|
|
434 |
|
|
|
— |
|
|
|
591 |
|
Interest expense and finance charges, net |
|
49,293 |
|
|
|
20,272 |
|
|
|
130,496 |
|
|
|
42,015 |
|
Provision for income taxes |
|
29,170 |
|
|
|
42,235 |
|
|
|
86,763 |
|
|
|
111,738 |
|
Other expense (income), net |
|
6,169 |
|
|
|
(12,086 |
) |
|
|
19,266 |
|
|
|
(22,247 |
) |
Acquisition-related and integration expenses |
|
18,494 |
|
|
|
12,565 |
|
|
|
31,470 |
|
|
|
15,213 |
|
Amortization of intangibles |
|
39,510 |
|
|
|
41,500 |
|
|
|
118,196 |
|
|
|
121,025 |
|
Share-based compensation |
|
10,740 |
|
|
|
9,862 |
|
|
|
38,683 |
|
|
|
37,678 |
|
Depreciation |
|
38,246 |
|
|
|
36,933 |
|
|
|
114,632 |
|
|
|
110,107 |
|
Adjusted EBITDA |
$ |
269,257 |
|
|
$ |
258,405 |
|
|
$ |
783,861 |
|
|
$ |
746,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Operating margin |
|
9.9 |
% |
|
|
10.0 |
% |
|
|
9.8 |
% |
|
|
9.9 |
% |
Non-GAAP operating margin |
|
14.1 |
% |
|
|
14.0 |
% |
|
|
13.7 |
% |
|
|
13.6 |
% |
Adjusted EBITDA margin |
|
16.5 |
% |
|
|
16.4 |
% |
|
|
16.0 |
% |
|
|
15.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Net income |
$ |
77,635 |
|
|
$ |
106,690 |
|
|
$ |
244,355 |
|
|
$ |
330,105 |
|
Acquisition-related and integration expenses |
|
18,494 |
|
|
|
12,565 |
|
|
|
31,470 |
|
|
|
15,213 |
|
Acquisition-related expenses included in interest expense and
finance charges, net (1) |
|
13,716 |
|
|
|
— |
|
|
|
25,556 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net (1) |
|
2,064 |
|
|
|
— |
|
|
|
14,493 |
|
|
|
— |
|
Amortization of intangibles |
|
39,510 |
|
|
|
41,500 |
|
|
|
118,196 |
|
|
|
121,025 |
|
Share-based compensation |
|
10,740 |
|
|
|
9,862 |
|
|
|
38,683 |
|
|
|
37,678 |
|
Income taxes related to the above (2) |
|
(21,131 |
) |
|
|
(16,237 |
) |
|
|
(57,099 |
) |
|
|
(44,170 |
) |
Non-GAAP net income |
$ |
141,028 |
|
|
$ |
154,380 |
|
|
$ |
415,654 |
|
|
$ |
459,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Net income |
$ |
77,635 |
|
|
$ |
106,690 |
|
|
$ |
244,355 |
|
|
$ |
330,105 |
|
Less: net income allocated to participating securities |
|
(1,282 |
) |
|
|
(1,571 |
) |
|
|
(4,178 |
) |
|
|
(4,816 |
) |
Net income attributable to
common stockholders |
|
76,353 |
|
|
|
105,119 |
|
|
|
240,177 |
|
|
|
325,289 |
|
Acquisition-related and integration expenses allocated to common
stockholders |
|
18,189 |
|
|
|
12,380 |
|
|
|
30,932 |
|
|
|
14,991 |
|
Acquisition-related expenses included in interest expense and
finance charges, net allocated to common stockholders(1) |
|
13,490 |
|
|
|
— |
|
|
|
25,119 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net allocated to common stockholders (1) |
|
2,030 |
|
|
|
— |
|
|
|
14,245 |
|
|
|
— |
|
Amortization of intangibles allocated to common stockholders |
|
38,858 |
|
|
|
40,889 |
|
|
|
116,175 |
|
|
|
119,259 |
|
Share-based compensation allocated to common stockholders |
|
10,563 |
|
|
|
9,717 |
|
|
|
38,022 |
|
|
|
37,128 |
|
Income taxes related to the above allocated to common stockholders
(2) |
|
(20,782 |
) |
|
|
(15,998 |
) |
|
|
(56,123 |
) |
|
|
(43,526 |
) |
Non-GAAP net income
attributable to common stockholders |
$ |
138,701 |
|
|
$ |
152,107 |
|
|
$ |
408,547 |
|
|
$ |
453,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Diluted earnings per common share (“EPS”) (3) |
$ |
1.49 |
|
|
$ |
2.04 |
|
|
$ |
4.67 |
|
|
$ |
6.28 |
|
Acquisition-related and integration expenses |
|
0.36 |
|
|
|
0.24 |
|
|
|
0.60 |
|
|
|
0.29 |
|
Acquisition-related expenses included in interest expense and
finance charges, net (1) |
|
0.26 |
|
|
|
— |
|
|
|
0.49 |
|
|
|
— |
|
Acquisition-related expenses included in other expense (income),
net (1) |
|
0.04 |
|
|
|
— |
|
|
|
0.28 |
|
|
|
— |
|
Amortization of intangibles |
|
0.76 |
|
|
|
0.79 |
|
|
|
2.26 |
|
|
|
2.30 |
|
Share-based compensation |
|
0.21 |
|
|
|
0.19 |
|
|
|
0.74 |
|
|
|
0.72 |
|
Income taxes related to the above (2) |
|
(0.41 |
) |
|
|
(0.31 |
) |
|
|
(1.09 |
) |
|
|
(0.85 |
) |
Non-GAAP diluted EPS |
$ |
2.71 |
|
|
$ |
2.95 |
|
|
$ |
7.95 |
|
|
$ |
8.74 |
|
|
|
|
|
|
|
|
|
Weighted-average number of
common shares - diluted |
|
51,209 |
|
|
|
51,549 |
|
|
|
51,384 |
|
|
|
51,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
August 31, 2023 |
|
August 31, 2022 |
|
August 31, 2023 |
|
August 31, 2022 |
Net cash provided by operating activities |
$ |
211,416 |
|
|
$ |
152,557 |
|
|
$ |
448,744 |
|
|
$ |
365,041 |
|
Purchases of property and
equipment |
|
(43,936 |
) |
|
|
(26,110 |
) |
|
|
(115,717 |
) |
|
|
(97,276 |
) |
Free cash flow |
$ |
167,480 |
|
|
$ |
126,447 |
|
|
$ |
333,027 |
|
|
$ |
267,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included in these amounts are a) bridge financing fees
expensed and interest expenses associated with the senior notes,
net of interest earnings on invested proceeds incurred in advance
of the Webhelp combination 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 both the three and nine months ended
August 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.
Investor Contact:
David Stein
Investor Relations
Concentrix Corporation
david.stein@concentrix.com
(513) 703-9306
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