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- **Revenue Growth**: Q3 revenue up 2.6% YoY (constant currency), driven by AI-integrated solutions. 40% of new wins include iX suite, with 80%+ client success rates.
- **Margin Challenges**: Q3 non-GAAP operating margin 12.3% vs. 14.5% prior quarter, due to $8M AI/cybersecurity investments and excess capacity. Expect modest sequential margin improvement.
- **AI Momentum**: iX suite on track to breakeven by Q4. Hero (AI augmentation) adoption outpaces Hello (fully autonomous). 450 global enterprises surveyed plan to increase outsourcing with AI.
- **Financial Health**: Free cash flow +44% YoY to $179M. Dividend increased to $0.36/share. Full year free cash flow guidance raised to $585M-$610M. Q4 revenue guidance: $2.525B-$2.55B. Margins expected to improve as capacity normalizes. Risks include tariff-related client delays and AI investment payback periods. Opportunities include travel, media/comm, and e-commerce growth. Risks include tariff-related client delays and AI investment payback periods. Opportunities include travel, media/comm, and e-commerce growth. Risks include tariff-related client delays and AI investment payback periods. Opportunities include travel, media/comm, and e-commerce growth.

**【CEO Opening Remarks】**
- Q3 revenue exceeded guidance with 2.6% constant currency growth, driven by integrated AI, CX, and IT solutions.
- 40% of new wins include AI platforms (iX suite), with higher success rates (80%+ client outcomes) vs. internal AI projects (33%).
- Margins below plan due to excess capacity from tariff-impacted clients, but expect modest sequential improvement.
- iX suite on track to be breakeven by Q4, with Hero (AI augmentation) outperforming Hello (fully autonomous).
- 450 global enterprises surveyed plan to increase outsourcing with AI, positioning Concentrix for share gain.

**【CFO Financial Commentary】**
- Q3 revenue: $2.48B (2.6% YoY constant currency), above guidance. Vertical growth led by banking (+8%), media/comm (+7%), travel (+3%).
- Non-GAAP operating income: $305M (-10% YoY), impacted by $8M AI/cybersecurity investments and $4M FX headwind.
- Adjusted EBITDA: $359M (14.5% margin). Free cash flow: $179M (+$44M YoY). Dividend increased to $0.36/share.
- Q4 guidance: $2.525B-$2.55B revenue, 1.5%-2.5% constant currency growth. Non-GAAP EPS: $2.85-$2.96. Full year free cash flow: $585M-$610M.

**【Q&A Highlights】**
- **Margins & Capacity**: Excess capacity from ~5 clients delayed volume migration; expects normalization over 1-2Q. Accelerated AI deployments (Hero) drove near-term margin pressure but long-term upside.
- **iX Suite**: 40% of new wins include AI, with Hero adoption faster than Hello. iX suite to be breakeven by Q4.
- **Pipeline & Growth**: Healthy pipeline across all regions, with focus on higher-margin adjacent services (AI enablement, shore migration). Travel, media/comm, and e-commerce verticals showed strong sequential growth.
- **Capital Allocation**: Free cash flow to prioritize debt repayment ($4.5B net debt) while maintaining dividend and share buybacks ($240M+ annual returns).
- **Risk Management**: Investments in transformation projects (e.g., client consolidation) driven by long-term relationship potential, despite near-term margin dilution.


Concentrix Corporation (CNXC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CNXC

CNXC fundamentals

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