Concentrix Corporation

Good day and thank you for standing by. Welcome to the Concentrix Fiscal First Quarter 2024 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, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Stein, Vice President Investor Relations.

Thank you, Josh, and good evening. Welcome to the Concentrix first quarter fiscal 2024 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 expectations, events, or developments. Please refer to today's earnings release and our most recent filings with the FCC 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 and in our other public filings with the SEC. Also during the call, we will discuss non-GAAP financial measures, including adjusted free cash flow, non-GAAP operating income, non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP EPS, and constant currency revenue growth. A reconciliation of these non-GAAP measures is available in the news release and on the company 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, David. Hello everyone and thank you for joining us today for our first quarter 2024 earnings call. We had a strong start to the year with solid first quarter financial performance, operational excellence across our business and a strong pipeline. Revenue increased 47% as reported and nearly 3% on a pro forma constant currency basis in the quarter, which was at the high end of our guide. Our growth reflects the differentiated offerings across our key verticals, particularly in retail, travel, and e-commerce, and banking and financial services. Achieving our target underscores the strength of our business model, our diversified portfolio of clients and capabilities, and the effectiveness of our execution. We delivered record first quarter non-GAAP operating income and adjusted EBITDA up 47% and 50% respectively. We're excited about the sustainable momentum in our Catalyst business, which posted growth for a third consecutive quarter, resulting in year-over-year pro forma constant currency growth of over 10%. Catalyst's return to double-digit growth is a testament to the successful execution of driving integrated, high-value technology offerings into our client base. As a reminder, our Catalyst business includes our data engineering, advanced analytics, application design and development, platform integration, and cloud transformation practices, as well as our strategy consulting and CX enterprise technology services team. Our pipeline is strong with our preferred mix of transformational and technology-led deals. Some of this pipeline comes from sales traction and commercial cross-selling synergies from the web help combination. A few examples of wins in the quarter include a top European retailer signing a tech-led solution that includes our generative AI, agent automation technology, analytics, and ongoing services to take care of their customers. While a services client from WebHelp, Concentrix was able to introduce technology and transformation that increased the value of the relationship for both parties. We also won a public transportation agency in Asia Pacific that chose us to provide a CCaaS technology platform, automation, analytics, and technical teams to support their customer base. And then finally, a large global consumer products company in Europe awarded us a contract to design, build, and run a CCaaS instance in over 40 markets as their managed service provider, including custom software development to improve their customer experience. This example, was a services client of both Concentrix and Webhelp that turned to us for an integrated technology solution since we knew their business so well on the global stage. To understand why we are pushing automation so heavily in our business, one example at scale I can share with you is for one of our region's largest airlines. We previously handled 95% of the airline's transactions through a voice channel with thousands of game changers. Today, using our technology, some generative AI and some machine learning AI chatbots, more than 50% of transactions have been automated. With this implementation of technology, we reduced the number of game changers needed by close to 500, while the remaining game changers process the more complex transactions. With the growth of the client's business, our revenue and gross margin with this client are higher today than before the introduction of automation, while also raising the client's NPS for their customers. That's why in the first quarter of 2024, we automated significant portions of over 60 million transactions for our clients, yet we're still able to grow our revenue. Our technology-led approach with clients continues to demonstrate we're successfully integrating automation solutions into client projects, solidifying our position as a leader in this field. Our investment in AI tools remain a key priority, and we're increasing our investment to accelerate deployment of the cutting-edge solutions. While this investment is impacting margins in the short term, we believe that this increased investment will allow us to demonstrate faster to the market why we see generative AI as a benefit. To be clear, much of this is our own intellectual property we have developed that is now deployed in hundreds of our clients. We have an extensive R&T department that is innovating internally for our own workforce as well as for customers around all forms of automation, including generative AI. Earlier this month, we announced the creation of a dedicated technology product organization led by our new chief product officer, Ryan Peterson, underscoring our commitment to and investing in scalable technology. Examples of platforms we are driving to scale include our enhanced large language intelligence for enterprises, or ELI platform, that uses the power of generative AI to help CX leaders understand customer feedback for millions of transactions more efficiently and effectively. Our marketing engagement platform built on Salesforce that combined with our custom application helps businesses run marketing campaigns that are globally consistent but have local and regional intimacy. And finally, our payment integrated analytics platform that automates complicated payment processes detecting and reducing fraud and mistakes. As you can see from these examples, we have robust offerings that drive automation, enhance results for our clients, and deepen long-term relationships. Regarding the web health integration, we remain on track to achieve the anticipated cost synergies. Importantly, the combination has come together very quickly in the areas that matter most, our delivery of global solutions for our clients and our go-to-market motion. We are confident that we will continue to thrive in generating significant value for our clients and shareholders. For the remainder of 2024, we maintain our outlook for sustained revenue growth, profit improvement, strong cash flow generation and responsible use of capital throughout the rest of the year. Given our confidence in our outlook and our future prospects, we are committed to making $100 million in share repurchases between March 1st, 2024 and the end of our fiscal year, approximately doubling the capital returned through share repurchases from the prior year. This will not stop us from rapidly reducing leverage over the balance of 2024 as we committed when we completed the Web Health transaction. In closing, I'd like to thank our dedicated game changers for their hard work and commitment to excellence and our clients for their trust and business. Now, I'll turn the call over to Andre.