Concentrix (CNXC) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 5.4% year-over-year to $2.5 billion, driven by strong AI-enabled solutions, particularly the iX suite, and robust demand in banking, financial services, insurance, travel, retail, and e-commerce, though technology, consumer electronics, and healthcare declined.

• Revenue and profitability were in line with guidance, but operating income and net income declined sharply due to higher costs, restructuring, and increased SG&A expenses.

• AI-related wins, especially with the iX suite, saw significant growth, with annual contract value for AI solutions more than doubling quarter-on-quarter and major contracts closed with Fortune 50 clients.

• Continued investment in proprietary technology, efficiency initiatives, and long-term programs is expected to support future revenue and margin growth.

• CEO emphasized measurable client value from AI and a focus on long-term growth.

Financial highlights

• Q1 2026 revenue was $2.5 billion, up 5.4% year-over-year (1.9% constant currency); non-GAAP operating income was $295 million, and adjusted EBITDA was $348.2 million with a 13.9% margin.

• Non-GAAP diluted EPS was $2.61, down from $2.79 year-over-year; GAAP diluted EPS was $0.33, down from $1.04.

• Adjusted free cash flow was negative $144.6 million, reflecting seasonal factors, higher capital expenditures, and timing of cash receipts.

• Net debt at quarter-end was $4.51 billion; liquidity was nearly $1.4 billion, including $1.1 billion undrawn on the revolving credit facility.

• Returned $65 million to shareholders in Q1 via share repurchases and dividends.

Outlook and guidance

• Q2 2026 revenue expected between $2.46 billion and $2.485 billion, with constant currency growth of 1% to 2%; Q2 non-GAAP operating income guidance is $290 million to $300 million, and non-GAAP EPS expected between $2.57 and $2.69.

• Full-year 2026 revenue guidance is $10.035 billion to $10.18 billion, with constant currency growth of 1.5% to 3.0%; non-GAAP operating income guidance is $1.24 billion to $1.29 billion.

• Full-year adjusted free cash flow guidance reaffirmed at $630 million to $650 million.

• Net leverage targeted to fall below 2.6x adjusted EBITDA by fiscal year-end.

• Future cash dividends anticipated quarterly, subject to board approval and financial conditions.