Based on the provided financial report, the title of the article is: "Concentrix Corporation Form 10-Q for the quarterly period ended February 28, 2025
Concentrix Corporation, a Delaware-based company, filed its quarterly report (Form 10-Q) for the period ended February 28, 2025. The company reported total revenue of $1.23 billion, a 12% increase from the same period last year. Net income was $43.1 million, compared to a net loss of $14.1 million in the same period last year. The company’s gross profit margin was 14.1%, and its operating margin was 6.5%. As of February 28, 2025, the company had cash and cash equivalents of $143.1 million, and total debt of $1.43 billion. The company’s stockholders’ equity was $1.23 billion, and the number of outstanding shares was 63,883,477. The company’s financial performance was driven by strong demand for its services, particularly in the areas of customer management and business process outsourcing.
Overview
Concentrix Corporation is a global technology and services leader that powers its clients’ brand experiences and digital operations. The company designs, builds, and runs fully integrated, end-to-end solutions, including customer experience process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services. Concentrix serves clients across five primary industry verticals: technology and consumer electronics, retail/travel/e-commerce, communications and media, banking/financial services/insurance, and healthcare.
Financial Performance
For the three months ended February 28, 2025, Concentrix reported revenue of $2.37 billion, a 1.3% decrease compared to the same period in the prior year. This decline was primarily due to the negative impact of foreign currency exchange rates, which reduced revenue by $62.4 million or 2.6%. Underlying client volumes partially offset this decrease.
Revenue decreased across most industry verticals, with the exception of the retail/travel/e-commerce segment which remained flat. The largest declines were seen in the other (5.8%) and communications and media (2.4%) verticals.
Cost of revenue decreased by 1.9% to $1.52 billion, driven by a $79.3 million or 5.1% reduction due to favorable foreign currency impacts. Gross profit decreased slightly by 0.1% to $855.9 million, but the gross margin percentage improved from 35.6% to 36.1% due to the changes in cost of revenue.
Selling, general, and administrative (SG&A) expenses decreased by 3.0% to $687.0 million, primarily due to $22.2 million in savings from foreign currency impacts. As a percentage of revenue, SG&A declined from 29.5% to 29.0%.
Operating income increased by 13.8% to $168.9 million, and the operating margin improved from 6.2% to 7.1%. This was driven by the decrease in SG&A expenses as a percentage of revenue and the increase in gross margin.
Interest expense and finance charges decreased by 11.5% to $73.0 million, mainly due to lower interest on the company’s term loan borrowings. Other expense and income, net, decreased by 27.9% to $4.9 million of income, primarily due to a decrease in income related to changes in acquisition contingent consideration.
The provision for income taxes increased by 47.4% to $30.5 million, and the effective tax rate rose from 28.5% to 30.3%, primarily due to certain tax law changes, mainly in France, and a shift in the mix of income across tax jurisdictions.
Net income for the quarter was $70.3 million, up 34.9% from $52.1 million in the prior year period. Non-GAAP net income, which excludes acquisition-related expenses, amortization, and other adjustments, increased 7.1% to $188.1 million.
Strengths and Weaknesses
A key strength of Concentrix is its diversified portfolio of technology-enabled services and solutions that support clients across multiple industries. The company’s focus on customer experience optimization, automation, and digital transformation aligns well with growing market demands. Concentrix has also demonstrated the ability to integrate acquisitions, such as the 2023 combination with Webhelp, to expand its global reach and capabilities.
However, Concentrix faces headwinds from foreign currency fluctuations and inflationary pressures on labor costs in some of its key delivery markets. The company’s high staff turnover rate also presents operational challenges and could impact service quality and efficiency. Additionally, the competitive landscape remains intense, with pricing and labor cost pressures potentially affecting margins.
Outlook and Future Prospects
Looking ahead, Concentrix expects to continue benefiting from the secular trends driving demand for its services, including the need for enterprises to enhance customer experiences, optimize operations, and accelerate digital transformation. The company’s investments in technology, analytics, and talent development should support its ability to deliver innovative solutions and maintain its competitive position.
At the same time, Concentrix will need to navigate macroeconomic uncertainties, manage labor costs, and integrate acquired businesses effectively to drive sustainable growth and profitability. The company’s strong cash flow generation and healthy balance sheet provide flexibility to pursue strategic initiatives, return capital to shareholders, and weather potential market volatility.
Overall, Concentrix appears well-positioned to capitalize on the growing demand for its services, though it will need to carefully manage its operational and financial risks to deliver consistent performance and shareholder value in the years ahead.
Key Financial Data
Dividends Paid:
| Announcement Date | Record Date | Per Share Dividend Amount | Payment Date |
|---|---|---|---|
| January 24, 2024 | February 5, 2024 | $0.3025 | February 15, 2024 |
| March 26, 2024 | April 26, 2024 | $0.3025 | May 7, 2024 |
| June 26, 2024 | July 26, 2024 | $0.3025 | August 6, 2024 |
| September 25, 2024 | October 25, 2024 | $0.33275 | November 5, 2024 |
| January 15, 2025 | January 31, 2025 | $0.33275 | February 11, 2025 |
On March 26, 2025, the company announced a cash dividend of $0.33275 per share, payable on May 6, 2025.
Financial Results:
| Metric | Q1 2025 | Q1 2024 | % Change |
|---|---|---|---|
| Revenue | $2,372,222 | $2,402,748 | -1.3% |
| Cost of Revenue | $1,516,323 | $1,546,219 | -1.9% |
| Gross Profit | $855,899 | $856,529 | -0.1% |
| Gross Margin % | 36.1% | 35.6% | - |
| SG&A Expenses | $687,032 | $708,090 | -3.0% |
| Operating Income | $168,867 | $148,439 | 13.8% |
| Operating Margin | 7.1% | 6.2% | - |
| Net Income | $70,257 | $52,102 | 34.9% |
| Non-GAAP Net Income | $188,136 | $175,655 | 7.1% |
| Non-GAAP Diluted EPS | $2.79 | $2.57 | 8.6% |
Cash Flows:
| Metric | Q1 2025 | Q1 2024 |
|---|---|---|
| Net Cash Provided by (Used in) Operating Activities | $1,408 | $(46,870) |
| Net Cash Used in Investing Activities | $(51,281) | $(60,562) |
| Net Cash Provided by Financing Activities | $102,300 | $14,444 |
Conclusion
Concentrix delivered a mixed financial performance in the first quarter of fiscal 2025, with revenue declining slightly due to foreign currency headwinds, but profitability improving due to cost management and operational efficiencies. The company’s diversified service offerings, global footprint, and strategic acquisitions position it well to capitalize on the growing demand for customer experience and digital transformation solutions. However, Concentrix will need to navigate macroeconomic challenges, labor cost pressures, and integration risks to sustain its growth and profitability in the long term. Overall, the company appears to be taking the necessary steps to strengthen its competitive position and deliver value for shareholders.
