Concentrix Corporation (CNXC): history, ownership, mission, how it works & makes money

A Brief History of Concentrix Corporation

Concentrix Corporation (CNXC), a global leader in customer experience solutions, has undergone significant transformations and growth, particularly following its acquisition of Webhelp in 2023. As of 2024, the company is strategically positioned to leverage this combination to enhance its service offerings and expand its market reach.

Financial Performance Overview

For the three months ended August 31, 2024, Concentrix reported a revenue of $2,387,412 thousand, a 46.2% increase compared to $1,632,834 thousand for the same period in 2023. For the nine months ended August 31, 2024, revenue was $7,412,244 thousand, a 46.8% increase from $5,041,576 thousand in the prior year.

Cost of Revenue and Gross Margin

The cost of revenue for the three months ended August 31, 2024, was $1,523,220 thousand, marking a 46.6% increase from $1,039,142 thousand in the prior year. The gross margin percentage slightly decreased to 36.2% from 36.4% year-over-year.

Expenses and Operating Income

Selling, general and administrative expenses surged by 64.8% to $710,950 thousand for the three months ended August 31, 2024, compared to $431,425 thousand in 2023. The increase was driven by costs associated with the Webhelp combination and higher personnel expenses.

Cash Flow and Liquidity Position

Concentrix reported a free cash flow of $204,200 thousand for the nine months ended August 31, 2024, down from $333,027 thousand in the previous year. As of August 31, 2024, the company had total liquidity of $1,469,700 thousand, including cash, cash equivalents, and undrawn credit facilities.

Market Position and Strategic Initiatives

The acquisition of Webhelp has significantly enhanced Concentrix's capabilities in delivering customer experience solutions across various industries. The integration process is ongoing, with expected synergies to further drive revenue growth and operational efficiencies.

Outlook for 2024

Looking ahead, Concentrix is focused on capitalizing on its expanded service offerings and geographic reach to sustain its growth trajectory. The company anticipates continued revenue growth as it integrates Webhelp and expands its client base.

Concentrix remains committed to optimizing its operational efficiency and enhancing shareholder value through strategic investments and prudent financial management.

A Who Owns Concentrix Corporation (CNXC)

Major Shareholders

As of 2024, Concentrix Corporation (CNXC) has several major shareholders that significantly influence its ownership structure. The following table summarizes the largest shareholders along with their respective ownership percentages:

Insider Ownership

Insider ownership at Concentrix Corporation is notable, with key executives and board members holding a significant portion of shares. This alignment can often result in strong corporate governance and decision-making that reflects the interests of both shareholders and management.

Recent Stock Performance

As of the end of August 2024, the stock price of Concentrix Corporation was approximately $64.72 per share. The company has been actively repurchasing shares as part of its strategy to enhance shareholder value, with a total of 609,605 shares repurchased at an average price of $64.72 during the three months preceding August 31, 2024.

Dividend Policy

Concentrix Corporation has maintained a consistent dividend policy, with quarterly dividends paid out to shareholders. For instance, the dividend declared on September 25, 2024, was $0.33275 per share, payable on November 5, 2024. The company's commitment to returning capital to shareholders is evident in its dividend history:

Future Outlook

The ownership structure and shareholder engagement at Concentrix Corporation are expected to remain strong, as the company continues to focus on growth and expanding its market presence. The combination with Webhelp has positioned Concentrix favorably for future revenue growth, with a total purchase price consideration of approximately $3.775 billion.

Concentrix Corporation (CNXC) Mission Statement

Overview

Concentrix Corporation focuses on delivering exceptional customer engagement and business performance solutions to clients globally. The mission is to enhance customer experiences through innovation, technology, and a commitment to operational excellence.

Key Components of the Mission Statement

• Customer Engagement: Enhancing customer interactions through tailored solutions.
• Operational Excellence: Committed to continuous improvement and efficiency.
• Innovation: Utilizing advanced technology to drive business success.
• Global Reach: Serving clients across various industries worldwide.

Financial Performance

As of August 31, 2024, Concentrix Corporation reported significant financial growth, driven by its mission to deliver value to clients.

Industry Vertical Performance

Concentrix generates revenue across various industry verticals, reflecting its mission to cater to diverse client needs.

Recent Developments

In 2023, Concentrix completed the acquisition of Webhelp, enhancing its service offerings and expanding its global footprint.

The integration of Webhelp is expected to further align with Concentrix's mission by augmenting its capabilities in customer engagement and operational excellence.

Liquidity Position

As of August 31, 2024, the liquidity position of Concentrix is robust, supporting its operational and strategic initiatives.

Shareholder Returns

Concentrix has demonstrated a commitment to returning value to shareholders through dividends and share repurchases.

How Concentrix Corporation (CNXC) Works

Business Overview

Concentrix Corporation operates as a global provider of customer experience solutions and technology. The company focuses on enhancing customer engagement, optimizing processes, and providing back-office support. As of August 31, 2024, Concentrix has been expanding its services through strategic acquisitions, notably the combination with Webhelp.

Financial Performance

For the nine months ended August 31, 2024, Concentrix reported total revenue of $7,170,876 thousand, a significant increase of 46.8% compared to the $4,883,944 thousand reported for the same period in 2023. The company’s net income for the same period was $135,567 thousand, down from $244,355 thousand in the previous year.

Revenue Breakdown by Industry

Concentrix generates revenue across several key industry verticals, reflecting its diverse client base. The following table details revenue contributions by industry for the three months ended August 31, 2024:

Cost Structure

Concentrix’s cost of revenue for the nine months ended August 31, 2024, was $4,592,586 thousand, reflecting a 46.8% increase from $3,128,866 thousand in the same period of 2023. The company’s gross profit margin slightly improved to 36.0% from 35.9% year-over-year.

Operating Expenses

Selling, general and administrative expenses rose significantly, totaling $2,126,439 thousand for the nine months ended August 31, 2024, compared to $1,274,198 thousand in the previous year, marking an increase of 66.9%.

Cash Flow Analysis

For the nine months ended August 31, 2024, net cash provided by operating activities was $383,091 thousand, down from $448,744 thousand in the prior year. The decrease was attributed to unfavorable changes in working capital and a decline in net income.

Liquidity Position

As of August 31, 2024, Concentrix held total liquidity of $1,469,700 thousand, including cash and cash equivalents of $246,241 thousand and undrawn capacity on its revolving credit facility of $1,042,500 thousand.

Market Presence and Operations

Concentrix operates in over 70 countries, with approximately 87% of its revenue generated from non-U.S. operations as of August 31, 2024. This global footprint enables the company to leverage diverse markets and client bases effectively.

Conclusion

Concentrix Corporation continues to evolve through strategic acquisitions and a diverse service portfolio, positioning itself for growth in the competitive customer experience market.

How Concentrix Corporation (CNXC) Makes Money

Revenue Generation

Concentrix Corporation (CNXC) primarily generates revenue through the provision of customer engagement services across various industry verticals. For the nine months ended August 31, 2024, the total revenue amounted to $7,170,876 thousand, reflecting an increase of 46.8% from $4,883,944 thousand for the same period in 2023.

Cost Structure

The cost of revenue for CNXC for the nine months ended August 31, 2024, was $4,592,586 thousand, an increase of 46.8% from $3,128,866 thousand in the previous year. The gross profit for this period was $2,578,290 thousand, with a gross margin of 36.0%.

Selling, General and Administrative Expenses

For the nine months ended August 31, 2024, selling, general and administrative expenses were $2,126,439 thousand, up 66.9% from $1,274,198 thousand in the prior year. This increase is attributed to higher costs associated with the Webhelp Combination and increased amortization expenses.

Net Income and Earnings Per Share

For the nine months ending August 31, 2024, net income was $135,567 thousand, down from $244,355 thousand in the previous year. Basic earnings per share (EPS) for this period was $2.00, compared to $4.70 in 2023.

Cash Flow and Liquidity

As of August 31, 2024, CNXC reported cash and cash equivalents totaling $246,241 thousand. For the nine months ended August 31, 2024, net cash provided by operating activities was $383,091 thousand. Free cash flow for this period was $204,200 thousand, a decline from $333,027 thousand in the same period of 2023.

Acquisition Strategy

Concentrix's recent strategic expansion includes the acquisition of Webhelp, which significantly contributed to revenue growth. The acquisition was valued at approximately $3,774.8 million. This combination is expected to enhance Concentrix's service offerings and geographical reach.

Foreign Currency Impact

For the nine months ended August 31, 2024, unfavorable foreign currency translation effects decreased revenue by $58.3 million. The company primarily faces risks from fluctuations in currencies such as the Argentine peso and Japanese yen against the U.S. dollar.