Hello, everyone. Thank you for joining us and welcome to the Concentrix Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. I will now hand the conference over to Sara Buda, Vice President of Investor Relations. Please go ahead.

Great. Thank you, operator, and good morning, everyone. Welcome to the Concentrix Fourth Quarter and Fiscal 2025 Earnings Call. This call is the property of Concentrix Corporation and may not be recorded or rebroadcast without the written permission of Concentrix Corporation. This call contains forward-looking statements that address our future and expected 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 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 non-GAAP net income, non-GAAP EPS, and constant currency revenue growth. Reconciliation of these non-GAAP measures is available in the news release and on the company's Investor Relations website under Financials. With me on the call today are Christopher A. Caldwell, our President and CEO, and Andre S. Valentine, our Chief Financial Officer. Christopher A. Caldwell will provide a summary of our operating performance and growth strategy, and Andre S. Valentine will cover our financial results and business outlook. And then we will open up the call for your questions. Now I'll turn the call over to Christopher A. Caldwell.

Thank you, Sara. Hello, everyone, and thank you for joining us today for our fourth quarter and fiscal year 2025 earnings call. Going to start off with an overview of 2025 and provide some thoughts on the year ahead before I hand it over to Andre S. Valentine who will discuss details of our financial results and outlook for 2026. For the past few years, we have been clear about evolving our business to deliver more solutions that involve technology. Have made investments in building out capabilities while strengthening our deep domain in line with this. This early start embracing technology solutions has helped us capitalize on the introduction of AI by helping clients navigate the path to success with these new advances. We see a vast opportunity in front of us today redefine our industry and add incremental value to clients. At the start of 2025, we started to execute on an internal plan to capture more of this opportunity and accelerate our evolution to a high-value intelligent transformation partner. To execute, we aligned our team around four key sets of actions. First, focus on complex work and high-value services to become our clients' preferred number one partner while deepening our relationship with them. Second, grow share of wallet by utilizing our extended offerings as clients consolidate the use of CX, BPO, and IPS vendors into fewer partners. Third, leverage our own IP investments and platforms to differentiate ourselves from competitors Fourth, and finally, drive incremental efficiencies so we can save to invest in these new areas of growth and opportunity. Reflecting on 2025, I am pleased with the progress have made along these four areas. First, high complexity work. This year, we were successful in reducing our non-complex work from 7% to 5% of our revenue. What we…

Thank you, Christopher A. Caldwell, and hello, everyone. 2025 was a year of significant achievement for Concentrix Corporation. We accelerated revenue growth in each sequential quarter. We achieved breakeven profitability with our IX suite. We generated record adjusted free cash flow, growing our adjusted free cash flow by over $150 million from the prior year. We returned a record $258 million shareholders through a combination of our dividend and share repurchases, We reduced our net debt, We help clients manage through a dynamic geopolitical environment. We weather natural disasters, and we continue to diversify and broaden our value to clients through a diversified set of service offerings. With a successful 2025 behind us, I'm confident that we are positioned to grow revenue and cash flow in 2026. As Christopher A. Caldwell mentioned, we're on an exciting journey as a company. We're successfully evolving to become one of the world's most trusted partners for intelligent transformation solutions. Now let me review our financial results for the fourth quarter and fiscal 2025 and then discuss our outlook for 2026. In the fourth quarter, we delivered revenue of approximately $2.55 billion. On a constant currency basis, this represented growth of 3.1%, which is above the high end of the guidance we provided in September. On a constant currency basis, our revenue growth by vertical in the fourth quarter was as follows: Revenue from banking, financial services, and insurance clients grew 11%. Revenue from communications and media clients increased 7%. Revenue from travel clients grew 12.7%, and revenue from other clients also grew 7%, primarily reflecting growth with automotive clients. Revenue from technology and consumer electronics and healthcare clients both decreased by approximately 2%, reflecting shore movement, and underlying volumes. Turning to profitability. Our non-GAAP operating income was $323 million within the guidance range…

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please stand by while we compile the Q&A roster.

Your first question comes from the line of Ruplu Bhattacharya with B of A. Please go ahead.

Hi. Thank you for taking my questions. Christopher A. Caldwell, can you remind us on the metrics you focus on in terms of judging how much to invest in AI-related software and chatbot? And can you give us more details of your areas of spend in 2026, both in terms of OpEx and CapEx and how you will judge their success.

Hi, Ruplu. Thanks for the question. So first of all, when we look at our metrics on our AI, our pure own AI platform, we are very committed to making sure that we could be accretive this year and hit a certain revenue goal. And obviously, we achieved that kind of exiting the year with $60 million of run rate on sort of that total spend of around a little over $50 million give or take with $25 million incremental within the fiscal year 2025. Right now, we see the ability to continue to invest, but we want to continue to make sure that it's accretive to our business and we're doing the right things to not only control the market share but also make sure that clients in the right circumstances, are using our technology. A very crowded and competitive space right now, Ruplu, so we're being very entrepreneurial and running that business very much like a start-up in that space to drive the returns that we expect. We look at our capital allocation in terms of OpEx and CapEx for fiscal '26, our CapEx really historically has been anywhere from 2% to 3% of our revenue. And we don't see that very different in 2026. In fact, probably, Andre, two, two and a half percent is where we're going to come in at. From an OpEx perspective, what we're very focused and committed to, Ruplu, right at the moment, is driving OpEx spend that is variable and driving net new opportunities for our business. And so our go-to-market spend, we spent an incremental $25 million in '25. We're spending probably another incremental number reasonably in that level for '26. And we're seeing the benefits of it. You saw the stats where our cross-sell upsell, our deeper domain expertise,…

Okay. Thanks for the details there, Christopher A. Caldwell. Can I ask how do you determine whether it's worth supporting a customer as they may themselves face a slowdown and have lower call volumes? So in terms of the deals that may require more upfront investment, whether it's facilities or training, how is that determination made And what the levers do you have if you feel that the volumes are not materializing? How do you plan to deal with that situation?

Yeah. Ruplu, good question. I at first, make a sort of a clarification comment that call volumes have nothing to do with any of our thesis around investment. It's around the type of services that client needs. And if you look at the examples I gave, actually, none of those relate to call volumes. They all relate to other areas of work that we're servicing them. And when we look at a client of making investments, we look at how historically they buy. Are they a price shopper? Are they a long-term value-focused client? We look at do they want to be best in class within their market? And so we can help them enable that. We look at are they a client who consumes multiple levels of business and services, or do we have that opportunity? And we're very focused on sort of this long-term client relationship. So if you look at our top 25 clients, we're now close to almost eighteen years of service. We look for those types of clients with that type of longevity who, equally, we help support as they go through challenges, and they help and support us as we kind of evolve our business by consuming more goods and services. So it's a bit of both a qualitative and quantitative discussion around that. But so far, we've been extremely happy with what we've seen. And moving into some of these higher-end areas, we're seeing the same benefits that we've seen before.

Okay. If I can sneak just one more in. At what rate do you think the market is growing at? Looks like you're guiding for low single-digit revenue growth in fiscal 2026 on a constant currency basis. Did WebHelp meet your expectations for synergies and growth And now going forward, how are you thinking about acquisitions? Thank you.

Yeah. So WebHelp absolutely met our expectations, if not a little better. I mean, a lot of the consolidation work that we're winning is because of our global footprint. And where we're able to service people from the technology that we were able to bring to the solution to WebHelp clients and some of the technology that WebHelp had that brought to the existing client base. We met our synergy goals, in fact, just slightly exceeded them from a cost take-up perspective. And we're seeing that ability drive that new growth in the business. And in fact, a fairly reasonable size of that 4% movement from onshore/offshore came out of Europe into other markets, which was traditionally the WebHelp business. And so we've been very, very happy with that because it's driving the right type of business that we want. From a market perspective, look, the traditional CX market is flat. Overall. When you look at some of the other services that we're talking about, it's mid-single digits. And as we talked about in the prepared remarks or in my prepared remarks, have a lot of these services that are now a meaningful part of our business. Growing at high single digits. And so we're winning in the right markets doing faster than what people would, I think, expect. And in the sort of the business that from a CX perspective, I think we're taking share and doing well in that market as well.

And acquisitions?

Sorry. From an acquisition perspective, look, We are going to be opportunistic. We're going to do things that support our client base. We're going to do things that have the right financial profile for us. And drive the right long-term business. And so as Andre S. Valentine talked about, we're very focused on kind of reducing our debt to our target leverage ratio. And so we don't have anything kind of on the works, but, definitely, we will participate in the consolidation in the marketplace.

Thank you for all the details. Appreciate it.

Thank you, Ruplu.

Your next question comes from the line of David Koning with Baird. Please go ahead.

My biggest question is really on margins. You know, when we look back a couple of years, 14%. This year, you're guiding to about 12.5%. Seems like there was a lot of discrete kind of investment and some one-off capacity, excess capacity around the tariff in the mid-mid kinda mid last year time frame. Are we just dealing with kind of an April, Q2 of this year, meaning it's down year margin's down year over year, but by the back half, is there reason to believe they will be up year over year and sustainably up after that?

Yes. So in answering that question, you're right. And in my prepared remarks, I mentioned that we expect to see sequential improvement in the back half of this year. In margins. As we complete working through some of the overcapacity issues around the tariffs, we made good progress on that in the fourth quarter. As we move through some of the process of implementing some of the transformational deals that we've won in 2025 and get closer to kind of the run rate profitability of those deals. And as we move forward with automation efforts and the simplification of our business, to take out some of the duplicate costs that we currently have that are created by some of the resolution that we've talked about and some of the costs that come with some of these transformational deals as well. So all those things give us confidence that we can see the margin improve in the back half of the year, which mathematically will get you to a situation where we're looking at year-over-year margin increases as we close out the year. Yes. Okay. And then just momentum. Revenue growth accelerated each quarter of the year. So momentum actually seems very very good. You're guiding a little less than the 3% constant currency growth in Q4, you did 3%, but you're guiding a little less than that in '26. Is there really anything behind that other than just pay it the full year? You don't wanna get ahead of yourself?

That's really it, David. Oh, you know, we talked about all throughout the fiscal 2025 about the fact that we're being conservative for the revenue guide, very focused in each quarter and for the full year and coming in in 2025. At or above the high end of the guidance range. Our principles, we think about our guidance for 2026 with regard to that, haven't changed. And so there is nothing that's going on underneath the covers that would imply any sort of slowdown in things. In fact, we're quite confident that we can continue the trajectory of sequential quarterly revenue increases. As sequential acceleration as we go through fiscal 2026.

Great. Thanks, guys.

Alright. Thank you.

Your next question comes from the line of Luke Moore Morrison with Canaccord Genuity. Please go ahead.

Hey, guys. Thanks for taking the question here. So last year's results you know, you mentioned laid out several deliberate growth drag run off of low complexity work, those onshore to offshore transition, we it looks like you expect some of those to persist in '26. I think, resulting in aggregate 3% headwind to growth. Can you just help us think about sort of the lingering or continuing effects of those headwinds over the long term, you know, this year, next year, on fourth?

Yeah. For sure, Luke. So from a low complexity work perspective, we did 2% in '25. We expect 1% in '26. Always expect there'll be some portion of low complexity work as part of our portfolio. So that kind of wanes to weed off to less headwinds in '27, frankly. We just don't see a big push past that. From an offshore work perspective, we have about 15% give or take, of our revenue that could possibly go offshore. But the reality is that some clients have brand promises to do things onshore. Some things from a compliance perspective can't go offshore. Some markets and some things that we service are highly sensitive from a sovereignty perspective. And so when you think about that 4% move this year and what we're kind of leading to next year, you're weeding through that pretty quickly. And as we've talked about for the last gosh, Andre S. Valentine probably a year and a half, really the vast majority of work that we are winning right now, vast, vast, vast majority of work is being put where it should stay and not move from. And so you're not rekindling this top of the funnel. You're really kind of optimizing what we've already got in place.

Excellent. And maybe just a follow-up I think you mentioned high single-digit growth in some of your adjacent services. Could you just double click there and unpack that? Like, what are you seeing Where are you seeing the most momentum, etcetera?

Yeah. So if you look at a lot of the specialized services, whether it be data annotation, analytics, FC and C, so financial crimes and compliance, any money laundering, are some of our IT services within that space, some of our revenue generation capabilities and digital assets in that space. In fact, you're probably getting close to 20% of our revenue. That is growing at high single digits.

Okay. Great. Thank you.

Your next question comes from the line of Vincent Alexander Colicchio with Barrington Research. Please go ahead.

Yeah, Christopher A. Caldwell. I didn't hear too much about consolidation I know that some a theme that's been strong for you. So how does that look in the quarter? Are there still legs to that?

Yeah. We expect there's gonna be a lot of consolidation. There was in this quarter. There's a lot more going into 2026. And I think is what we kind of commented about driving the share of wallet in our clients. Clients are consolidating with us because not only can we do their CX and BPO, but we can also do their IT services and vice versa, by the way. In the quarter, we actually picked up some IT client or sorry. Had some IT clients that we picked up some of their CX and BPO services from which most people might not realize that we're actually doing. Clients are looking for stronger partners, more mature operations, global scale security, a lot of things that we've been investing in to consolidate with. And we're doing very, very well in that space.

And what is the how does the pricing look in the traditional CX business? Is pressure increasing?

So in commodity work, it's very, very, very competitive, Vince. Very competitive. I think people are chasing a lot of volume for volume versus quality, and so we're seeing that as being very competitive. I think in the rest of the business, look, it's always competitive, but it's reasonably competitive if that makes sense. And people do the right business. And we've been very selective on the types of work we get, What we're most focused on, as we talked about, is driving the quality of revenue which is margin accretive when we get past implementation. Complex work that is sticky and hard to do that's really driving a lot of value for the client so that they see us as being a valued partner to their business.

And are you finding it are you experiencing any challenges accessing talent as you move into higher-end solutions?

Yeah. So, look, we spent more this year than I think some people were expecting to get that talent. We haven't necessarily found problems but we also have a global footprint that we can pull from, and that's been very, very helpful to us because we are in so many markets We are able to access a very, very robust talent pool for it and we are making sure that we harness that and utilize that strategically.

Thanks, Christopher A. Caldwell.

Thank you.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.