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May 31, 2023
Concentrix Q2 2023 Earnings Report
Concentrix's financial performance for Q2 2023, marked by revenue increase and strategic advancements.
Key Takeaways
Concentrix reported a 3.0% increase in revenue to $1,614.7 million for the second quarter of 2023. The company achieved margin expansion and strong free cash flow despite macroeconomic challenges. Notable progress was made in integrating Webhelp and harnessing generative AI.
Revenue increased by 3.0% year-over-year to $1,614.7 million, with a 1.6% rise on an adjusted constant currency basis.
Operating income grew by 3.6% to $162.6 million, representing 10.1% of revenue.
Adjusted EBITDA increased by 3.6% to $258.8 million, or 16.0% of revenue.
Free cash flow for the quarter was reported at $101.3 million.
Concentrix
Concentrix
Concentrix Revenue by Segment
Revenue by Segment
Tech & Electronics Revenue
CapyFin.comRetail, Travel & eComm Revenue
CapyFin.comComms & Media Revenue
CapyFin.comBFSI Revenue
CapyFin.comHealthcare Revenue
CapyFin.comOther Industries Revenue
CapyFin.com Forward Guidance
Concentrix provided expectations for the third quarter and full year of fiscal 2023, with adjusted constant currency revenue growth anticipated in the ranges of 1.5% to 2.5% and 2.0% to 3.0%, respectively.
Positive Outlook
- Third quarter adjusted constant currency revenue growth is expected to be in the range of 1.5% to 2.5%.
- Third quarter reported revenue is expected to be in the range of $1.635 billion to $1.650 billion.
- Operating income for the third quarter is projected to be between $172 million and $182 million.
- Non-GAAP operating income for the third quarter is expected to be in the range of $225 million to $235 million.
- Full year adjusted constant currency revenue growth is expected to be in the range of 2.0% to 3.0%.
Challenges Ahead
- Expectations assume a 0.2-point positive impact of foreign exchange rates compared with the prior year for Q3.
- Expectations assume a 0.5-point negative impact of foreign exchange rates compared with the prior year for the full year.
- Third quarter expectations exclude an expected revenue contribution of approximately $28 million from acquired operations.
- Full year expectations exclude an expected revenue contribution of approximately $156 million from acquired operations.
- The effective tax rate is expected to approximate 26%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income