Concentrix Corporation

Good day and thank you for standing by. Welcome to the Concentrix's first fiscal second quarter 2021 financial results conference call. At this time, participants are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I will now hand the conference over to your speaker today. David Stein, Vice President, Investor Relations. Please go ahead.

Thank you and good morning. Welcome to the Concentrix second quarter fiscal 2021 earnings call. This call is the property of Concentrix and may not be recorded or rebroadcast without the permission of Concentrix. This call contains forward-looking statements that address our expected future 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 events or developments. Please refer to yesterday'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. Also during the call, we will discuss non-GAAP financial measures, including free cash flow, non-GAAP operating income, adjusted EBITDA, and adjusted EPS, as well as constant currency revenue growth. A reconciliation of these non-GAAP measures is available in the news release and on the Concentrix Investor Relations website under Financials. With me on the call today are Chris Caldwell, our President and Chief Executive Officer, and Andre Valentine, our Chief Financial Officer. Chris will provide a summary of our operating performance and growth strategy, and Andre will cover our financial results and business outlook. Then we'll open the call for your questions. Now I'll turn the call over to Chris.

Thank you very much, David. Good morning, everyone, and welcome to our second quarter earnings call for fiscal 2021. During the second quarter, we continued to see our value proposition resonate in the market, coupled with strong momentum in our sales and solid execution in our operations, driving our performance to exceed pre-COVID levels. We had record revenue of $1.37 billion in the second quarter, representing organic revenue growth of 29% compared with last year. On a constant currency basis, revenue increased by 24%. Our second quarter non-GAAP operating income improved to $172 million, up 155%, and adjusted EBITDA increased 113% to $208 million compared with last year. In the second quarter, while the U.S. and some parts of Europe started to open up, we saw continued effects of the COVID pandemic in certain regions, particularly Asia, where we invested in support and resources for our staff to care for themselves and their families. We focused on humanitarian efforts for all of our staff and their families as they experienced thousands of additional cases across India, Philippines, Vietnam, and Malaysia. Our hearts and thoughts go out to all those affected. With the uptick in cases and lockdowns, over 70% of our staff worked at home in the quarter. Our work-at-home performance remains in line with our pre-COVID levels when staff were based in our facilities. Happily, in recent weeks, we have seen a return to relatively stability as COVID cases have started to decrease. Our results in the second quarter included a net COVID impact on profit of $10 million, and we expect a similar impact in the third quarter. Our second quarter was also very strong for bookings, nearly surpassing our record third quarter of 2020 for renewals, expansion, and new logo wins. Our travel vertical is also now starting to show signs of recovery, and our communications sector has started to reach a point of stability which we expected. Andre will provide more details on the accelerated growth in each of our verticals. To focus on our significant new business wins with iconic and disruptive brands for a moment, we signed more than two dozen new clients, including more than a dozen new disruptor brands. Our revenue from disruptor clients is now at a run rate to exceed $1 billion of total annual revenue. We were also happy to see new client signings growth across our geographical footprint versus being concentrated in one region. Driving our business growth is our combination of deep domain expertise, digitally enabled global delivery, and the ability to invest in secure technical infrastructure that is highly adaptable and scalable to support our clients' needs. Our unique value proposition intentionally automates lower complexity transactions on behalf of our clients, which leads to stickier, more profitable relationships and more opportunities for growth with existing and new programs. Our solutions help transform client businesses through increased efficiency and by delivering greater customer experiences. For example, for a large retail and e-commerce company this quarter, we recently transformed their existing contact model reducing the human assist portion by a factor of three. Then, through digital self-service and chatbots, we improved the client's net promoter score by two and a half times. Our clients value our technology-infused solutions and rated us with high performance scores for innovation in our second quarter. Additional example of our wins in the second quarter include volume acceleration with one of the world's largest social media firms providing sales and content moderation services. Further penetration within two larger financial institutions to provide remediation services, anti-money laundering services, and know your customer services. Sales of these VOC essential platforms, additional implementations of Amazon Connect, and significant growth with existing disruptor clients in fintech, travel, and e-commerce industries, among others. We also see a significant opportunity to deploy more complex digital engagements as clients are seeing superior levels of customer experience as an imperative coming out of COVID. Going into the second half of the year, we are encouraged by the strength and breadth of our pipeline that continue to grow both from a size perspective and frequency of multiple offering engagements. Among these strong growth opportunities, some business challenges do come to manage. Areas we are fanatical about include the ongoing impact of COVID and ensuring we're taking care of our team members around the world. We are also focused on continuing to upskill and invest in our staff as the work we are delivering is more complex than ever before. This quarter, we are also taking a meaningful step forward by increasing our wages across North America, sorry, United States for starting positions to ensure we can meet the demand of our growth and be more socially responsible to the communities we operate in. As a global company, whose roots run through six continents and grow deeper every day, we have a long-standing commitment to our people and the communities we live and work in. As part of that commitment, we are very happy to have released our first environmental, social, and governance report with our earnings this quarter. The report provides more details on our efforts in corporate social responsibility, the investments we are making, and our progress in having a measurable and meaningful impact to our staff and their communities. While we expect this report to evolve as we move forward, one thing that will not change is our commitment to doing the right thing for all of our stakeholders, our staff, our clients, our shareholders, and the communities we work in. I would encourage you to visit the investor relations section of our website and download a copy. In summary, we are deepening our client relationships, relentlessly innovating with new digital solutions, and expanding into emerging markets while we selectively pursue strategic acquisitions to drive superior return for our shareholders. Based upon strong results here today, we are confident in exceeding the goals we discussed on our last earnings call of constant currency revenue growth above 10% for fiscal 2021 and margins meaningfully above pre-COVID levels. We are confident we will achieve our stated goal of growing faster than the market with progression in our profit margins. Finally, I would like to thank our exceptional staff for their commitment to execution, our clients for their trust, and our talented board of directors for their support and mentorship. I'll now turn the call over to Andres. Thank you, Chris.