Concentrix Corporation

Good day, and thank you for standing by. Welcome to the Web Help Transaction and Concentrate's first quarter financial results conference call. At this time, all participants are in a listen-only 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference call is being recorded. I would like to turn the conference over to your speaker for today, David Stein. Please go ahead.

Thank you, Lisa, and good evening. Welcome to the Concentrix conference call to discuss our announcement today that we have agreed to combine with WebHelp and to discuss our first quarter fiscal 2023 earnings. Please note that the transactions, news release, and associated presentation, as well as our earnings release, are available on the Concentrix Investor Relations website under Events and Presentations. Today's discussion contains statements about the expected timing, completion, and effects of the proposed transaction and statements addressing future financial results. All such statements and other statements on this call, other than historical fact, constitute forward-looking statements as defined under U.S. federal securities laws. Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements because of new information or future events or developments. Please refer to today's materials 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 on our annual report on Form 10-K. Also during the call, we will discuss non-GAAP financial measures including adjusted EBITDA, non-GAAP operating income, free cash flow, and adjusted EPS, as well as constant currency revenue growth. Please see the information contained in today's announcement for more information on these non-GAAP measures. This call is the property of Concentrix and may not be recorded or rebroadcast without the permission of Concentrix. Joining me today on the call are Chris Caldwell, our President and Chief Executive Officer, and Andre Valentine, our Chief Financial Officer. They'll provide an overview of today's web help announcement along with Concentrix first quarter results, followed by a question and answer session. Now I'll turn the call over to Chris.

Thank you very much, David, and thank you all for joining our call today. Today is a transformative day for Concentrix and the customer experience industry. We're taking a major step by combining Concentrix and WebHelp to create a diversified global CX leader that we believe provides a tremendous platform for growth, value creation for our shareholders, clients, and staff. We are very excited about this combination that we believe will create the leading provider of customer experience solutions globally with broad capabilities across CX digital services and technology delivered at scale. I think it's important to step back and talk to the background of our thinking of these two great companies coming together. As we have messaged for some time to our investors, we believe that our European footprint and Latin American footprint were lacking in order for us to take full advantage of the opportunities in these markets. We have also talked about our ability in past acquisitions to take client relationships to the next level by helping them grow across our footprint and capabilities. An opportunity to transact with a company that has a strategic client base with little overlap and the ability for them to consume services we offer would be enticing. Diversifying our revenue by geography, vertical, and services would be an additional benefit. Top of mind in any combination is also the financial returns and maintaining a strong balance sheet. While we are comfortable flexing up to a larger amount of debt for the right opportunity, it is important for us to get back close to two times within a short period of time. We have a strong track record of success doing this with prior acquisitions. As always, we are focused on the culture of any company we transact with. Culture is critical to achieve a rapid integration and gain momentum in leveraging the new company's capabilities for growth. When you look at WebHelp's history, it has many familiar themes to concentrics in how to grow. Focus on staff and clients and its vision of the market. Focus has been to grow Europe, Latin America, and Africa, becoming a leader in all three markets. When we look at our criteria for a partner to move forward with in the next period of our growth, there was not one company that we could find that had as many complementary attributes as WebHelp that aligned to our long-term vision. WebHelp complements our culture, revenue diversification, client base, vertical focus, digital expertise, capabilities, and footprint. Now is the right time to bring these two organizations together to help both client bases access new markets and broader sets of digital capabilities while also seeking to lower the number of partners they deal with to manage their costs more effectively. For Concentrix, we believe this combination will allow us to accelerate our growth to the leadership position in the industry. Now, a little more detail on the value of this combination. WebHelp will meaningfully enhance our position in the European and Latin American markets. while adding capabilities to meet our clients' demand for services delivered from Africa. Concentrix has been investing in all three markets, but has not been able to achieve the scale that we believe is needed. The combination of these two companies allows us to take even more access to the $550 billion expanded marketplace we compete in. WebHelp has done very well in these geographic markets and has a consistent track record of profitable growth. In 2023, they're expected to deliver $3 billion in revenue and $500 million of adjusted EBITDA. They have seen strong above-market organic revenue growth over each year for the past five years. This growth has been driven by servicing their more than 1,000 clients. Like Concentrix, they service a marquee list of both enterprise and new economy companies. In the case of WebHelp, these companies are primarily based outside of North America. We believe this provides large growth potential to expand these clients with a concentric footprint and capabilities as we have done with past combinations. WebHelp also brings highly recognized and exceptional talent with unique value services they refer to as practices which will further our ability for technology-enabled offerings. These include AML, KYC, payment processing services and banking, sales management offerings that complement our B2B business, and their Nest business, which helps emerging companies achieve scale as examples. This focus on deep client relationships and value offerings has allowed WebHelp to achieve long tenure with their client base. I am also most impressed with WebHelp has been the similarities with Concentrix around their focus on people. Each organization has been recognized with hundreds of awards for diversity, well-being, engagement in the last few years demonstrating that our cultures are aligned. The pro forma combination company is expected to have $9.8 billion in revenue for fiscal year 2023, operate in 70 plus countries of which over 25 are new to Concentrix and serve more than 320 new economy clients and 155 Fortune Global 500 clients with approximately 2,000 total clients very nicely distributed globally. This exceptional and even more diverse client base will serve as a strong foundation for accelerated growth. The combined client base has little overlap and a strong mix of new economy and enterprise clients. Together, the top five clients are expected to count for only 20% of the combined company's revenue, and the revenue split between our enterprise and new economy companies will stay roughly in similar proportion to what it looks like now at Concentrix. The combination will establish a well-balanced and differentiated geographic global presence with the Americas, EMEA, and Asia each representing roughly one-third of the combined business. Together, we will have one of the most robust global footprints in the industry across the Americas, Europe, Asia, and Africa all operating at scale. We will be able to continue to grow our Catalyst business by increasing our digital footprint in Europe and Latin America with capabilities we are picking up from WebHelp and by selling Catalyst services to WebHelp clients. Lastly, from a financial perspective, which André will go into more, we expect the transaction to be accretive to revenue growth, profit margins, and adjusted earnings per share. Consistent with our best practices, While we will temporarily increase the leverage on our balance sheet, we will reduce it close to two times within two years after transaction, while still investing in the business for growth. We are fortunate with this transaction to significantly accelerate the realization of our vision to build the world's greatest customer engagement services company, rich in diversity and talent. As President and CEO of the newly combined business, I look forward to welcoming two new board members to the team. Olivier Duhas, WebHelp co-founder and CEO, will become vice chair of our board of directors and will also be a key force in helping to integrate the businesses, which will make the integration more seamless. Olivier brings a wealth of experience in the industry and strong entrepreneurial insights that will add value to Concentrix. Nicolas Guesson, a GBL partner and director currently on the supervisory board of WebHelp, will also join our board. Nicola brings a strong financial business background, a shareholder's point of view, and extensive board experience. I will now turn the call over to Andre to walk through the terms of the transaction and speak to our Q1 earnings results and guidance for the remainder of the year. Following Andre, I'll provide my quarterly update, and then we'll take your questions. Over to you, Andre.