Concentrix Cuts Full-Year Outlook as Revenue Growth Slows Further
The customer-experience technology provider lowered its fiscal 2026 revenue guidance to $9.925 billion to $10.025 billion after second-quarter sales grew just 1.9%.
Concentrix (CNXC), the customer-experience technology provider, reported second-quarter fiscal 2026 revenue of $2.44 billion, up 1.9% from a year earlier, and cut its full-year outlook for the second consecutive quarter as organic growth continued to decelerate.
The slowdown marks a notable step down from the 5.4% reported growth the company posted in the first quarter and 4.0% in the third quarter of fiscal 2025. On a constant-currency basis, second-quarter revenue rose just 0.6%, underscoring how demand has softened across the business even as the company laps the Webhelp integration that inflated prior-year comparisons.
Profitability remained under pressure. Non-GAAP operating margin narrowed to 11.9% from 12.6% a year ago, extending a slide from 13.9% in the third quarter of fiscal 2024. Adjusted EBITDA margin fell to 14.1% from 14.8% in the year-earlier period, continuing a trajectory that has seen the metric decline from 16.3% two years ago. GAAP operating income dropped 35.7% to $95.4 million, with the margin falling to 3.9% from 6.1%, as acquisition-related, integration and restructuring expenses surged to $65.5 million from $16.8 million — driven this time by severance and facilities consolidation rather than Webhelp integration costs.
Non-GAAP diluted earnings per share declined 2.6% to $2.63, a narrower contraction than the 6.5% drop recorded in the first quarter. Net income, however, rose 31.4% to $55.3 million, buoyed by a $42.1 million foreign-currency gain compared with a $21.2 million loss a year earlier and lower interest expense. Cash generation offered a bright spot: cash flow from operations reached a second-quarter record of $257.9 million, and adjusted free cash flow climbed to $242.3 million, rebounding sharply from negative $144.6 million in the first quarter.
The company highlighted accelerating demand for its integrated technology platform, reporting that iX Suite deals rose 400% year over year. Segment data from the first quarter showed Banking and Financial Services revenue up 15% and Retail, Travel and E-commerce up 11%, while Technology and Consumer Electronics declined 3% and Healthcare fell 6%. Concentrix also disclosed $202.7 million in assets held for sale on its balance sheet, a new line item accompanied by a $6.9 million loss recorded in the first half.
Management lowered full-year fiscal 2026 revenue guidance to $9.925 billion to $10.025 billion, down from the prior range of $10.035 billion to $10.180 billion, with constant-currency growth now expected at 0.25% to 1.25%, compared with the earlier forecast of 1.5% to 3.0%. Non-GAAP EPS guidance was cut to $10.83 to $11.18 from $11.48 to $12.07, and GAAP operating income guidance was reduced to $509 million to $539 million from $636 million to $686 million, reflecting the higher restructuring spending. The third-quarter revenue outlook of $2.465 billion to $2.490 billion implies flat to 1% constant-currency growth.
Concentrix did not repurchase any shares during the quarter, pausing buybacks after spending $42.0 million to retire roughly one million shares in the first quarter. The company continued to reduce debt, cutting long-term borrowings to $3.93 billion from $4.57 billion at the end of November, aided by the early redemption of $600 million in senior notes. The quarterly dividend, raised 8.2% to $0.36 a share in late 2025, was maintained.