Concentrix (CNXC) Q2 2024 earnings summary

Executive summary

• Revenue grew 47.4% year-over-year to $2.38 billion, driven by the Webhelp acquisition and strong demand, exceeding expectations.

• Non-GAAP operating income rose 46% to $321 million; Adjusted EBITDA up 47% to $380 million.

• Net income declined to $66.8 million, reflecting higher SG&A, integration, and amortization costs.

• Generated over $200 million in adjusted free cash flow and returned $60 million to shareholders via dividends and buybacks.

• Integration of Webhelp is ahead of schedule, expanding global reach and supporting above-market revenue growth.

Financial highlights

• Q2 revenue reached $2.38 billion, up from $1.61 billion year-over-year; pro forma constant currency growth was 4%.

• Non-GAAP net income was $183 million, up $46 million year-over-year; non-GAAP EPS was $2.69, up $0.06.

• GAAP net income was $66.8 million, impacted by $116 million in amortization and $31 million in Webhelp integration costs.

• Adjusted EBITDA for the quarter was $379.6 million (15.9% margin), up from $258.8 million year-over-year.

• Adjusted free cash flow for Q2 was $202 million; cash and equivalents at quarter end were $207 million.

Outlook and guidance

• Raised full-year 2024 revenue guidance to $9.58–$9.675 billion, reflecting 2.5%–3.5% pro forma constant currency growth.

• Q3 revenue expected at $2.35–$2.4 billion, with non-GAAP operating income of $330–$350 million and EPS of $2.76–$3.04.

• Full-year non-GAAP EPS expected at $11.40–$12.07; adjusted free cash flow outlook confirmed at $700 million.

• Dividend of $0.3025 per share declared for Q3 2024, with intent to continue quarterly dividends.

• Net leverage targeted to fall to 2.6x Adjusted EBITDA by year-end.