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The call presented a constructive picture: modest revenue growth, strong AI and solution momentum (61% YoY technology wins, bookings doubled QoQ, enterprise iX deals), and profitability in line with guidance. Management outlined clear actions to improve margins (cost savings ~ $40M, capacity absorption, and ramp of transformational deals) and reiterated robust full-year adjusted free cash flow guidance ($630M–$650M) and a plan to reduce net leverage. Key near-term negatives were two verticals down ~6% YoY, a seasonal negative free cash flow in Q1 (-$145M), one-time sale loss and restructuring charges, and a still-elevated net debt level. Overall, highlights substantially outweigh the lowlights given the strength in AI traction, guidance affirmation, and planned margin/leveraging actions.
Concentrix guided Q2 revenue of $2.46–$2.485 billion (implying ~1–2% constant‑currency growth with an approximate +75 bps FX benefit), non‑GAAP operating income of $290–$300 million (non‑GAAP operating margin 11.8%–12.1%), and non‑GAAP EPS of $2.57–$2.69 assuming ~$67 million of interest expense, ~60.9 million diluted shares and ~4.9% attributable to participating securities, with a Q2 non‑GAAP tax rate of ~25%. The company reiterated unchanged full‑year non‑GAAP metrics, continues to expect $630–$650 million of adjusted free cash flow in FY2026, anticipates aggregate asset‑sale proceeds of about $40 million, and remains committed to reducing net leverage to below 2.6x adjusted EBITDA by year‑end; note Q1 adjusted free cash flow was negative $145 million (seasonal timing of receivables, collected in early March). Additional balance‑sheet context provided: cash and cash equivalents ~$234 million, total debt ~ $4.75 billion (net debt ~$4.51 billion), off‑balance sheet factored AR ~$129 million, and liquidity near $1.4 billion including an undrawn $1.1 billion revolver; management also issued $600 million of 3‑year notes at a 6.50% coupon to refinance 6.65% paper due Aug‑2026 (with $200 million of the 6.65% notes remaining to be repaid from expected strong free cash flow).
Adjusted free cash flow was negative $145 million in 1Q (seasonal), but management reiterated full-year adjusted FCF guidance of $630M–$650M and noted that receivables causing the quarter's negative FCF were collected in early March.
Returned ~$65 million to shareholders in the quarter (including $42M share repurchases at ~$40/sh and $23M dividend); issued $600M of 3-year senior notes (6.50%) to refinance near-term debt, leaving liquidity near $1.4B and an undrawn $1.1B revolver.
Taking cost actions expected to yield ~ $40 million of annualized savings (on top of growth investments) and targeting net leverage below 2.6x adjusted EBITDA by the end of fiscal 2026.
Banking & financial services revenue grew 13% YoY; retail, travel & e-commerce grew 6% YoY; media & communications grew 3% YoY — demonstrating broad-based pockets of strength and sustainable pipeline momentum in BFSI and e-commerce/travel.
Reported revenue of approximately $2.5 billion in 1QFY26, up ~5% on a reported basis and +1.9% on a constant currency basis; Q2 revenue guide of $2.46B–$2.485B implying ~1%–2% constant currency growth.
Wins with technology were up more than 61% year-over-year in the quarter; signed annual contract value for solutions (including AI) more than doubled quarter-over-quarter; closed ~60 enterprise iX suite deals in the quarter including the largest iX Hero contracts to date with 2 Fortune 50 companies.
iX Hero ARR was $60M at end of Q4 and management targets being at or above $100M ARR by the end of the fiscal year; iX Hello priced on consumption while Hero is subscription-based, showing pathway to accretive margins as scale is reached.
Non-GAAP operating income of $295 million (midpoint of prior guidance), adjusted EBITDA of $348 million (13.9% margin), and non-GAAP diluted EPS of $2.61 — all in line with guidance ranges.
Hello, everyone. Thank you for joining us, and welcome to the Concentrix First Quarter 2026 Financial Results Conference Call. [Operator Instructions] I will now hand the call over to Elise Brasell, Corporate Communications. Please go ahead.
Thank you, operator, and good morning, everybody. Welcome to the Concentrix First Quarter 2026 Earnings Call. This call is the property of Concentrix and may not be recorded or rebroadcast without the written permission of Concentrix. This call contains forward-looking statements that address our expected future performance and that, by their nature, address matters that are uncertain. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements as a result of new information or future expectations, events or developments. Please refer to today's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results. This includes the risk factors provided in our annual report on Form 10-K and in our other public filings with the SEC.
Also during the call, we will discuss non-GAAP financial measures, including adjusted free cash flow, non-GAAP operating income, non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP EPS and constant currency revenue growth. A reconciliation of these non-GAAP measures is available in the news release and on the company Investor Relations websi...