Concentrix Corp. 10-Q Summary: Fiscal Q2 2026
Business Context and Reporting Period
Company: Concentrix Corporation (CNXC)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three and six months ended May 31, 2026
Business Overview: Global technology and services leader providing customer experience (CX) process optimization, technology innovation, and business transformation services across five primary verticals: technology/consumer electronics, retail/travel/e-commerce, communications/media, banking/financial services/insurance, and healthcare.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue | $2,462,473 | $2,417,371 | $4,962,864 | $4,789,593 |
| Gross Profit | $823,349 | $848,148 | $1,673,006 | $1,704,047 |
| Gross Margin % | 33.4% | 35.1% | 33.7% | 35.6% |
| Operating Income | $95,421 | $148,345 | $213,980 | $317,212 |
| Operating Margin % | 3.9% | 6.1% | 4.3% | 6.6% |
| Net Income | $55,276 | $42,093 | $76,865 | $112,350 |
| Diluted EPS | $0.86 | $0.63 | $1.20 | $1.68 |
| Operating Cash Flow (YTD) | $174,671 (2026) vs $237,944 (2025) | |||
| Free Cash Flow (YTD) | $72,595 (2026) vs $131,534 (2025) | |||
| Total Debt (Current + Long-Term) | $4,584,874 (May 31, 2026) | |||
| Cash & Equivalents | $255,566 (May 31, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 1.9% QoQ and 3.6% YTD, driven by growth in Retail/Travel/E-commerce (+9.8% QoQ) and Banking/Financial Services (+12.6% QoQ). This was partially offset by declines in Technology/Consumer Electronics (-5.8% QoQ) and Healthcare (-13.9% QoQ).
- Margin Compression: Gross margin declined to 33.4% (Q2) and 33.7% (YTD) from 35.1% and 35.6% in the prior year. Operating margin fell to 3.9% (Q2) and 4.3% (YTD) from 6.1% and 6.6%.
- Restructuring Costs: Significant increase in restructuring-related expenses, totaling $65.5 million for Q2 and $100.4 million YTD 2026, compared to $16.8 million and $34.8 million in the prior year periods. These costs relate to cost reduction initiatives affecting approximately 20,000 employees.
- Debt Refinancing: In February 2026, the company issued $600 million of 6.500% Senior Notes due 2029 to redeem $600 million of 6.650% Senior Notes due 2026. This incurred debt extinguishment costs of $6.3 million.
- Divestiture: The company entered an agreement to sell a non-core business for approx. €15 million. Assets held for sale of $202.7 million and liabilities of $172.3 million are now classified as such. A loss on held for sale of $6.9 million was recorded YTD.
Guidance, Outlook, and Risks
- Outlook: Management expects continued impact from foreign currency fluctuations and inflation in delivery centers. The company anticipates revenue growth driven by Retail and Banking verticals, though Technology and Healthcare headwinds persist.
- Liquidity: Total liquidity stands at $1.5 billion, including $1.1 billion undrawn on the Revolving Credit Facility and $137.5 million on the Securitization Facility. The company remains in compliance with all debt covenants.
- Capital Allocation: The company continues its share repurchase program ($396.6 million remaining) and paid a quarterly dividend of $0.36 per share. A new dividend of $0.36 per share was announced for payment in August 2026.
- Risks: Key risks include geopolitical instability, supply chain disruptions, cyberattacks, labor cost inflation, and the impact of tariffs on client demand. The company also faces risks related to the integration of recent cost reduction initiatives and the successful execution of the non-core business divestiture.
Investor Verification Checklist
- Restructuring Impact: Verify the timeline for completion of the $100M+ restructuring costs and the expected long-term savings vs. short-term margin drag.
- Client Concentration: Confirm no single client exceeds 10% of revenue, but monitor the specific drivers of the 13.9% decline in the Healthcare vertical and 5.8% decline in Technology.
- Debt Structure: Review the terms of the new 2029 Notes and the impact of the refinancing on future interest expense and leverage ratios.
- Divestiture Closing: Track the closing of the non-core business sale (expected H2 FY2026) and the realization of the €15M proceeds.
- Currency Hedging: Assess the effectiveness of hedging strategies given the significant foreign currency translation adjustments impacting comprehensive income.