Concentrix takes $1.05Bn impairment as AI-era deals reach 50%
- Concentrix reported third-quarter revenue of $2,453.7 million, down 1.2%.
- A $1,050.0 million goodwill impairment drove a net loss of $988.1 million.
- Non-GAAP operating income rose to $309.0 million, or 12.6% of revenue.
- The quarterly dividend rises to $0.37 per share.
CALIFORNIA, UNITED STATES — Concentrix swung to a third-quarter net loss after a $1,050.0 million goodwill impairment, even as half of its revenue now comes from business won and deployed in the three years since the introduction of artificial intelligence (AI).
Revenue for the quarter ended Aug. 31 fell 1.2% to $2,453.7 million, while non-GAAP operating income rose to $309.0 million, or 12.6% of revenue.
Impairment tied to stock price drives net loss
The non-cash impairment charge primarily resulted from the recent trading range for the company’s stock price and market capitalization, according to Concentrix.
The charge produced an operating loss of $910.3 million and a net loss of $988.1 million, compared with net income of $88.1 million a year earlier.
Non-GAAP diluted earnings per share rose to $2.92 from $2.78, and cash flow from operations reached $268.2 million, a record for a third quarter.
“This quarter, we reached an inflection point where 50% of our revenue is coming from business we have won and deployed within the last 3 years since the introduction of AI,” said Chris Caldwell, president and chief executive officer of Concentrix.
“While we are aggressively disrupting our own traditional business, the underlying new business is stronger and healthier as evidenced by our margin expansion, strong free cash flow and growth of our new services,” Caldwell said.
Guidance points to a softer fourth quarter
For the fourth quarter, Concentrix expects revenue of $2.410 billion to $2.460 billion, implying a constant currency decline of 3% to 5%.
For the full fiscal year, it guided to revenue of $9.827 billion to $9.877 billion and adjusted free cash flow of about $630 million to $650 million.
The board raised the quarterly dividend to $0.37 per share from $0.36, payable Nov. 3, and the company did not repurchase any shares during the quarter.
The results show Concentrix trading legacy revenue for AI-era work while expanding margins.
For buyers of customer service and business process outsourcing (BPO) services, the 50% figure shows how quickly contracts are moving onto AI-led delivery models.
Concentrix is positioned to pitch clients on AI-led customer experience programs backed by strong cash flow, a combination buyers comparing the top BPO companies worldwide will weigh.
Related news
- Everest names Concentrix a CXM leader in all regions · 19 Sep
- Concentrix acquires GRC firm CastleHill · 16 Sep
- TP dives 13% after Concentrix warns of customer pullback · 7 Jul
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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