Concentrix Corporation

Good day, and thank you for standing by. Welcome to the Concentric Second Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Sarabuda, Vice President, Investor Relations. Please go ahead.

Great. Thank you, Operator, and good evening. Welcome to the Concentrix Second Quarter 2025 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 future performance and that, by their nature, address matters that are uncertain. These uncertainties may cause our actual future results to be materially different from 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 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 and 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's investor relations website under financials. With me on the call today are Chris Caldwell, our president and CEO, 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 up the call for your questions, and now I'll turn the call over to Chris.

Thank you very much, Sarah. Hello, everyone, and thank you for joining us today for our second quarter 2025 earnings call. We are seeing momentum from the investments we have been making, accelerating our growth rate and demonstrating the value of our differentiated offerings. Today, I'll give you a bit more detail on our progress, and then Andre will talk about our view of ongoing revenue, margin, and cash flow growth in the second half of the year. Now, let's start with a quarter. We reported yet another solid revenue quarter above our guidance, which outpaced both in our core offerings and our adjacent solutions. We saw growth in our pipeline across verticals and geographies with the desired mix of services and accretive margin profiles. Operational margins for the quarter were lighter than anticipated, driven by two reasons. Our decision to hold labor in April while clients reacted to tariffs and temporarily paused projects, and two, preparing for accelerated growth in the second half we won in quarter. As anticipated, by the end of May, we exited the month with our margin trending more favorably and expect that by later in Q3, we will again see improvement year over year in our margins. The goodwill we have seen from clients because of our decisions has already produced benefits. We also delivered over $200 million in adjusted free cash flow in the quarter. As you can see from our outlook, we are excited about our second half momentum across all metrics as Andre will detail. We are outperforming due to a few primary factors. First, our strategy to deliver pragmatic, deployable AI solutions aligned with what clients want is working. This is being driven both by embracing third-party technology partners as well as our own AIX suite of products. Clients are over the AI hype and want practical solutions. A Gartner study recently revealed that enterprises are adopting a digital-first but not digital-only approach. And our own third-party survey of 450 global enterprises showed a similar sentiment revealing that 85% of these enterprises expect to increase their outsourcing budget over the next two to three years. The majority of that increase is expected to be net new investments in supporting their AI agenda. Further, even though the survey was completely blind and independent, enterprises' selection of Concentrix as a partner to build and deploy their AI initiatives was significantly ahead of all other traditional companies, CX companies combined. and it was even higher than many IT services companies. This is clear third-party validation of our recognition as a technology solutions provider in the marketplace. Over the past 18 months, we have made thoughtful investments in our technology and our teams to position ourselves for this exact aha moment. In Q2, we also launched IX Hero, our agentic AI-powered application that gives humans superpowers to more accurately and efficiently complete tasks with more consistent outcomes. This complements our autonomous AI assistant product, IX Hello, giving clients an array of AI solutions to meet their needs for both full automation and human augmentation. We are delighted with the early market traction we are gaining and our pipeline of integrated product solutions deals is strong. We believe we are on track for our products to be accretive to the business as we exit the end of the year and believe we can deliver accelerated levels of revenue growth for our products without increasing our spend this year. Within our marketplace, we are also the winning on the side of partner consolidation. This is enabling us to grow and win new business that tends to have more complexity as we introduce new adjacent services that can be deployed securely and at scale. In summary, we delivered another strong revenue and cash flow quarter and are on track to exceed our revenue forecast for the year. We are confident the strategy we implemented several years ago is working. This strategy centered around, one, bringing integrated technology-led solutions to market that align with clients' needs, and two, expanding the value we provide clients across a broader portfolio of business solutions to grow share, and finally, three, keeping our underlying business healthy by automating or de-investing in commodity work. The market is evolving as we anticipated. Clients are centralizing spend with partners that have scale, breadth, and expertise to deliver real-world solutions that drive tangible results. We are well positioned against our competitor set, particularly for large-scale programs that combine consulting, IT integration, CX expertise, and AI. We have made and will continue to make the right investments in the business for ongoing profitability. I would like to thank our game changers for their passion this quarter and the clients for their trust. And with that, Andre, I'll turn it over to you.