Concentrix Corporation

good day and thank you for standing by welcome to the concentric's fiscal fourth quarter 2022 financial results conference call at this time all participants are in a listen early mode after the speaker's presentation there will be a question and answer session to ask a question during the session you will need to press star 1 1 on your telephone you will then hear an automated message advising your hand is raised please be advised that today's conference is being recorded I would now like to hand the comments over to your speaker today, David Stein, Head of Investor Relations. Please go ahead.

Thank you, Leigh Ann, and good evening. Welcome to the Concentrix fourth quarter fiscal 2022 earnings call. This call is the property of Concentrix and may not be recorded or rebroadcast without the written 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 today'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 evening, everyone, and welcome to our fourth quarter and fiscal year 2022 earnings call. I would like to start with a quick review of 2022. We made progress across several fronts that we believe continue to position us as a leader in the customer experience industry. For the full year, revenue increased over 13% on an as-reported basis. On an organic cost and currency basis, revenue was up over 8%. On a non-GAAP basis, our operating income increased more than 20% and our operating margin was up 90 basis points to a record 14%. Free cash flow was up 26%. In addition to this profitable growth, our operational performance continued to be strong in 2022, once more delivering the highest customer satisfaction and innovation scores since we started our surveys over a decade ago. Our investments in new technologies and innovative services have also allowed us to capitalize on new opportunities with clients as their priorities have shifted going into 2023 from helping to support their growth to reducing their operational costs. As a reminder, earlier in the year, we introduced our new Concentrix Catalyst Group, successfully integrating the PK acquisition to allow us to deliver deeper CX technology solutions at scale. In July, we augmented our B2B revenue generation capabilities and footprint with a service source acquisition. Throughout the year, we have rolled out multiple technology platforms for our operations that have helped increase our profitability and security such as RecruitCX, ConnectCX, and CXQI. We have also increased our operational footprint with new countries and additional locations in Europe, Latin America, and Asia. In 2023, we have additional footprint investments in the works as well as continued focus on building platforms that will help us be more efficient and deliver a compelling offering for our clients. We believe all of this is helping continue to build our pipeline of opportunities around more complex work and higher value services. Turning to the fourth quarter, I'm pleased to report that despite the challenges of a tough macroeconomic environment in the back half of the year, we delivered strong revenue growth, profit improvement, and cash flow generation. Our revenue of $1.64 billion represented an increase of 12% compared with last year on a reported basis. Revenue increased approximately 6% on an organic constant currency basis. Non-GAAP operating income of $248 million was up 22% and adjusted EBITDA increased 20% to $285 million. Free cash flow increased 32% to $193 million compared with last year. We did experience volume softness primarily in late October and November with clients in the consumer electronics and retail e-commerce areas. Clients in these areas as a whole were flat to down year over year without their traditional seasonal uptick in volumes related to consumer spending they expected. While the base business remained solid, volumes were below what these clients had forecasted for their Double 11 shopping event, Thanksgiving, and Christmas pre-sales. Although we adjusted quickly, our fourth quarter profits were impacted by initial staffing levels to meet clients' forecasted demand. The rest of the portfolio performed very well with several of our key verticals posting double-digit revenue gains that Andre will go through. our Catalyst business continued to build a strong pipeline of new opportunities of integrated solutions with our CX Operations clients, as well as expansion work within our existing Catalyst clients. Within our Catalyst business, we did experience a few ramps progressing slower in the quarter than we expected, primarily based around clients' ability to coordinate change in their ecosystems. This is typical with larger projects, and we expect to be on pace within our second quarter. From a sales perspective, we signed business with two dozen new logos in the quarter. Our wins provide a full spectrum of services to clients across our vertical service. Two interesting examples include providing business to consumer sales and integrated sale propensity analytics to improve conversion rates for a large European service provider, which was delivered by our new business to business sales team, and in our catalyst business, providing advisory services for cloud-based data management, quality assessment, and assurance to reduce costs on an operational process for a new economy company. In addition to these wins, our pipeline of single systems integrator and solution operator opportunities, which combine the capabilities of our concentric catalyst, core CX operations, and our B2B team, increased during the quarter. We believe this expanding pipeline shows that our investments to align our capabilities and services to designing, building, and running the future of CX is resonating well with existing and new prospective clients. We use these capabilities to broaden and deepen our relationships by optimizing business processes, consolidating volume, and reducing our clients' costs. Going into the new year, demand from enterprise and new economy prospective clients remain strong. Existing clients are recalibrating volume expectations and we're seeing positive discussions that we'll expect will lead to the consolidation of client volumes with us. As a result, we expect choppiness in the first two quarters of the year as these discussions are finalized. We expect year-over-year growth to accelerate in the second half of the year as a result of large deals we have already signed, underlying base business, and consolidation of volumes from smaller suppliers. we do not expect and are not factoring in large seasonal volume at the end of 2023. As a reminder, historically, we have done well in both good and more challenging economic times by helping our clients meet their goals. In times like these, our clients need to continue to drive revenue, do more with less through automation, and retain customers by ensuring the best possible experience. We are having the right conversations about all these areas with our clients. From an operational perspective going into 2023, challenges staffing new technical problems have eased and the labor market has become stable and more predictable in most regions. The pricing environment for solutions also remains stable. In summary, 2022 was a successful year where we took significant steps to build our offering both organically and inorganically focused on transforming everything CX for our clients and their customers. We're optimistic about what we can deliver in 2023. We have confidence in our strategy to grow faster than the market with margin expansion, relentlessly innovating with new solutions, and expanding into emerging markets, building strategic key relationships, and selectively pursuing strategic acquisitions to drive superior returns for our shareholders. Finally, I'd 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, and our investors for their confidence and concentric. With that, I'll turn the call over to Andre. Andre?