Concentrix Corporation

Hello, thank you for standing by and welcome to Concentrix's fiscal first quarter 2022 financial results conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, David Stein, Vice President of Investor Relations.

Please go ahead. Thank you, Josh, and good morning. Welcome to the Concentrix First Quarter Fiscal 2022 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 adjusted 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 first quarter earnings call for fiscal 2022. We're happy to announce another quarter of strong results as well as solid progress in our Catalyst business with the integration of PK, our latest acquisition. Our strong performance was fueled by existing clients responding with opportunities, robust wins with new clients seeking to benefit from our differentiated CX capabilities and contributions from our PK acquisition. During the quarter, we made great progress in recovering from Typhoon Ray in the Philippines and the surge in COVID that impacted our people and operations that we discussed on our Q4 earnings call. While we have no presence in either Ukraine or Russia, we do have a large community of Ukrainian staff around the world and our thoughts are with them and their family members during this troubling time. I would like to thank our staff that have been helping with displaced Ukrainians because of the war, especially in our operations that border Ukraine. Our first quarter revenue of $1.54 billion represents an increase of 14% year-over-year on a reported basis. On an adjusted currency, constant currency basis, for FORMA to include PK in both periods, we grew by 11%. Our first quarter non-GAAP operating income of $202 million was up 14%, and adjusted EBITDA increased 12% to $238 million compared with last year. Non-GAAP earnings per share increased 25% to $2.85 per share compared with $2.29 per share last year, and contributions from PK have been immediately accretive to earnings as expected. In terms of returning capital to investors, consistent with our capital deployment strategy, we paid $13 million in dividends in the quarter. We did not repurchase shares in the first quarter. As of today, $475 million remain available on our share repurchase authorization program, and we remain committed to modest purchases over time as market conditions warrant. Turning to the integration of PK into our Concentrix Catalyst team, we're making good progress simplifying, harmonizing, and optimizing the combined operations. This acquisition allows us to build over even more technology solutions for the CX marketplace at scale and positions us as a CX digital solutions leader. The expertise in design consulting and execution around digital solutions is truly a catalyst for our clients to think differently about what the art of the possible can be. Having operated as Concentric Catalyst for three months, I'm pleased to report that we're on track to our expectations. We're seeing strong demand from strategic client partners for our unique mix of CX digital solutions and have already seen small wins ahead of schedule that we wouldn't have been able to service before the acquisition. During the quarter, we saw growth across our portfolio again. Despite some volume volatility and lower seasonal demand with a few clients, we achieved growth across a broad section of our verticals. New economy client revenue increased 47% to over $350 million in the quarter, positioning us to exceed $1.4 billion in revenue on an annual basis for these clients. We are also seeing some clients looking to move more volume nearshore or offshore now that the pandemic has subsided and to manage their cost structures better. We continue to see strong demand market with higher average deal sizes in our pipeline, particularly with crypto, fintech, technology, travel, and healthcare clients. We won digital transformation and CX Solutions businesses with over two dozen new logos this quarter and are cautiously optimistic the demand environment will remain solid across verticals, geographies, and solutions. From an operating perspective, we maintain strong performance levels and high levels of satisfaction with our clients and staff despite continued tightness in the labor market, primarily in the U.S. and some parts of Europe. During the quarter, supply chain issues have continued for a few of our clients, leading to volatility I mentioned earlier in their volumes, which muted the quarter slightly. To ensure we are as efficient as possible, we recently put into production our CX quality insight capabilities, which uses AI to sift through contact records for themes, insights, and opportunities for improvement. We expect to roll this solution out across our enterprise over the next year and a half. And we are also seeing some very early positive trends on our new Canada Experience Platform and our Innovation Hub that improves the work-at-home experience and makes it more social, engaging, and collaborative without needing to be in an office. In recognition of our CX capabilities, Concentrix was identified as a leader in Nelson Hall's CX Operations Transformation Neat Vendor Evaluation for CX Improvement capabilities. We're incredibly proud of its achievement. This report assesses the ability to meet future client requirements while delivering immediate benefits to clients by improving their customer experience. Turning to the second quarter, we continue to feel confident in our guidance for the year, and Q2 will continue to be a step directionally to our goals. The market remains strong, and our operations are solid. In summary, we're focused on transforming everything CX for our clients and our customers. We're deepening our client relationships and relentlessly innovating with new solutions and expanding into emerging markets while we selectively pursue strategic acquisitions to drive superior returns for our shareholders. Finally, I would like to thank our exceptional staff for their commitment to execution and our clients for their continued trust. With that, I will now turn the call over to Andre.