Concentrix at Canaccord Conference: AI and Strategic Growth

On Tuesday, 12 August 2025, Concentrix Corp (NASDAQ:CNXC) presented at Canaccord Genuity’s 45th Annual Growth Conference, revealing a strategic focus on AI deployment and vendor consolidation. Despite challenges in some sectors, Concentrix reported exceeding revenue expectations and anticipates continued growth, driven by its innovative product suites and strategic acquisitions.

Key Takeaways

• Concentrix exceeded revenue guidance last quarter and raised future revenue forecasts.
• Generative AI and vendor consolidation are key growth drivers.
• The company anticipates margin improvements by fiscal year 2026.
• The WebHelp acquisition achieved synergies of approximately $120 million.
• Offshore delivery trends are expected to impact revenue growth but improve margins.

Financial Results

Concentrix reported exceeding its revenue guidance for the last quarter, attributing this success to strong bookings and the adoption of its IX Hello and IX Hero products. The company has raised its revenue guidance for the remainder of the year, expecting these products to continue contributing positively. However, a shift towards offshore delivery is expected to create a roughly two percentage point headwind on revenue growth this year.

Operational Updates

The company highlighted strong bookings driven by generative AI capabilities and vendor consolidation. Concentrix is capitalizing on clients’ need for global service providers with advanced technological solutions. While some verticals experienced early-year softness, BFSI, Healthcare, and Travel & Transportation are displaying resilience. The automotive sector faces challenges due to tariffs, but clients are adapting by building more resilient supply chains.

Future Outlook

Looking ahead, Concentrix is optimistic about its margin trajectory into fiscal year 2026. The company expects its AI investments to break even and become accretive to margins next year. Growth is anticipated to accelerate towards mid-single digits in the medium term, with AI deployment across desktops enhancing efficiency and higher-margin services. Concentrix also sees significant opportunities for inorganic growth.

Q&A Highlights

During the Q&A session, executives emphasized that most consolidation wins are due to Concentrix’s differentiated platform and value proposition. New deals often involve multi-pillar solutions that include technology and various business lines. The market is evolving towards more integrated ITO, BPO, and CX services, which are being purchased in solution formats.

Readers are encouraged to refer to the full transcript for a detailed account of the conference call.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Luke Morrison, Analyst, Canaccord: So good afternoon, everyone. Welcome to our conference. Thanks for being here. I’m Luke Morrison, one of Canaccord’s analysts covering digital transformation. I’m thrilled to be joined by Concentrix CEO, Chris Caldwell CFO, Andre Valentine.

Welcome, guys. Thank you for being here.

Chris Caldwell, CEO, Concentrix: Thank you

Andre Valentine, CFO, Concentrix: very much. Yeah.

Luke Morrison, Analyst, Canaccord: Awesome. So let’s jump right into it. Chris, maybe kick us off. Can you just give us a quick overview? I think it’s been a couple months now since you reported your last quarter, but what did you see in the quarter?

What have you seen so far since then to the back half? Yes, what are you seeing out Yes,

Chris Caldwell, CEO, Concentrix: for sure. So when we reported our quarter, we reported over our guide from a revenue perspective and talked about strong momentum in bookings. And I think that’s continuing for what we see in the back half of the year and our expectation of why we raised our guide for revenue in the back half of the year. We also talked about our adoption of our IX Hello and IX Hero suite of products. They were happy that they were on pace for what we expected and that our goal is for them to be accretive at the back half of the year.

And so very, very nice robust growth that we’ve been experiencing from that. And then we also talked about our higher, faster growing areas of our business that is helping enable AI that, again, we’re seeing that sort of momentum. So really nicely execution that we experienced at beginning half of year, our expectation is that we’ll see that to the back half of the year.

Luke Morrison, Analyst, Canaccord: Yep. Good. Awesome. We will dig into those themes, but before we do that, let’s dig on some demand trends we’re seeing here. You’ve got us guided to modest organic acceleration into the back half from here.

Help us think about sort of the levers and the factors that are driving that macro stabilization. We have specific vertical recoveries. You have this ongoing shift in automation, offshoring, what do you see that’s kind of driving that outlook?

Andre Valentine, CFO, Concentrix: Yeah, so we’re very focused on delivering towards, and we said this on the earnings call, the top end of our guide. As you’ve said, that implies a modest acceleration of growth from the first half into the second. And our confidence in that comes from the strong bookings that we’ve seen. Those bookings are being driven really by two things. Clients are seeing our capabilities around deploying generative AI to help them make their business better.

And secondly, tying into that as well, we’re seeing this continued trend towards share gains through vendor consolidation. So clients wanting to consolidate more of this work with providers who can do the work for them anywhere in the world they want it done, do it well across multiple types of capabilities, and finally, with a very front foot approach to technology and helping them do the work better.

Luke Morrison, Analyst, Canaccord: Yep. Okay. Awesome. Maybe we can just double click on what you’re seeing across verticals. I think earlier in the year, you know, maybe there was some softness across some verticals and that’s, you know, there’s typical volatility across any quarter and year, but what what are you seeing across your verticals?

And do you see any remaining budget caution? Or or what’s the general trend there?

Andre Valentine, CFO, Concentrix: So I’ll go ahead.

Chris Caldwell, CEO, Concentrix: Yeah. No. I was gonna say from a from a budget caution perspective, almost everyone is is being very conscious about their budget. We have not seen sort of an opening of spend with with clients outside of when it comes to either POCs or deployments of AI. But traditional services, think everyone’s very, very conscious about their spend and really looking at how to do the more with less.

What we have seen from a vertical perspective is that clearly some verticals are going through transformation at a more steady state and paced state. And so BFSI, we see as very strong. Health care, we see some recovery coming back. Travel and transportation, ironically, you’d think people wouldn’t be spending on travel and transportation. We’re still seeing quite strong execution and and growth in travel transportation.

And then some others are more impacted by tariffs as they fall out, like automotive. But for the most part, we’re seeing this sort of steady, progressive growth in our verticals, including telecom, which for a while, we were actually declining on purpose just from balance perspective. Yep,

Andre Valentine, CFO, Concentrix: Caution really isn’t a bad thing for us, right? Because we can help clients do this work more efficiently. They can consolidate work with us and take cost out in that fashion. And obviously, we can deploy technology to do the work more efficiently. The budget caution actually is a positive for us long term.

Luke Morrison, Analyst, Canaccord: Yeah, okay, makes sense. Maybe I can just dovetail off of those, one of those points there as you brought up tariffs, obviously. It’s once again a hot topic in the market. You saw some trends move around in Q2 that sort of impacted your revenue on the top line on a temporary basis just because you were, I think, were holding headcount. Talk to us a little bit about like what are you seeing in the market with, I think there’s a whole bunch of new tariffs now that have been announced.

So like what are you seeing from customers? How are they reacting? Have things sort of stabilized? Are people sort of viewing this as the new normal? Or or what’s the what’s the trend?

Chris Caldwell, CEO, Concentrix: I I think clients as a whole have had more time to prepare for all the different changes that are going on. And that doesn’t mean that, you know, tariff announcements, both additions or reductions, doesn’t cause clients to think things a little differently. But for the most part, their supply chain is getting a lot more resilient, and they’re starting to bake that into their business models. And so what we saw in Q2 continues to get muted through the course of the year if there’s no stability in the tariff picture. Clearly, you know, tariffs are getting paused and added, etcetera, etcetera, etcetera.

So we’ll see how that goes. But for the most part, the clients are getting a lot more kind of business as normal with all the fluxes that are going on with tariffs.

Luke Morrison, Analyst, Canaccord: Yep. Yep. Okay. Next topic I want to hit on, margins and delivery mix. So, you know, you’ve been investing in AI, you’ve been investing in the business, we’ve seen margins come down a little bit off of that.

As we look out into the future, the near term, medium term, how should we be thinking about sort of the margin trajectory into the next year and longer term?

Andre Valentine, CFO, Concentrix: Yeah. We think there are reasons for optimism as we think about the margin trajectory into fiscal twenty six. You know, first and foremost, getting to the point where our investment in in generative AI tools reaches the breakeven point and hopefully then moves into being accretive to margins into next year, that would be one. Deploying AI across our desktops and continuing to drive efficiency will certainly help there as well. Also, we’ve talked, and Chris alluded to it, about these net new services that we’re doing that are all kind of powered by AI.

Those are higher margin services for us. So those things we also think are positive for margins as we go forward. And lastly, we’ve talked about reaching mid single digit growth. And so we think the trajectory that we’re on towards the back half of this year doesn’t imply that we’re gonna get there in 2026, but we think we’ll see growth continue to accelerate. And we feel that we can get to that mid single digits in what we refer to as the medium term.

As we do that, we see leverage on our G and A, also positive for margins. So lots of reasons for us to think positively about margins as we think about next year.

Luke Morrison, Analyst, Canaccord: Yep, great. Makes a lot of sense. Maybe let’s talk about delivery mix a little bit. We’ve been seeing this overarching trend over the last few years. There’s more offshore moving away from onshore and near shore.

How is that evolving? How do you see that trend evolving over time? How’s that impacting your business, all that?

Andre Valentine, CFO, Concentrix: Yeah, so that trend continues. And we’ve talked about it being maybe because of the budget caution that we talked about earlier, a little bit more accelerated here in the last, call it, six quarters or so than it has been historically. So it’s roughly a two point revenue headwind for us this year from a reported revenue perspective. However, over time, it’s accretive to margin as those services tend to be higher, certainly are higher margin than were performed onshore. In the near term, it does create some situations where we’re investing to both kind of in in that shore shift.

So that can be a bit of an impact on margins in the short term. Long term, it’s a positive trend for us from a margin perspective. And we’re growing, right? So we’re kind of selling through with our value proposition, our strong capabilities, we’re selling through that headwind that I talked about.

Luke Morrison, Analyst, Canaccord: Yep, okay, makes sense. Maybe just to double click on that margin impact, if I think about, if I’m thinking about it correctly, a headwind to revenue growth but net neutral to gross profit dollars and then positive to gross margin would

Andre Valentine, CFO, Concentrix: You’ve got it exactly right. So the profit dollar per unit delivered is the same if it’s delivered across the shores, so obviously the margin’s higher as you move from onshore to nearshore to offshore.

Luke Morrison, Analyst, Canaccord: Yep. Okay. Awesome. Let’s talk about platform strategy and AI. Now it’s no secret over these last few years your strategy has become increasingly tech led.

Is there a way for us to think about the mix of new deals today? Like what percentage of that is multi pillar transformational versus sort of legacy, just standard CXR fees?

Chris Caldwell, CEO, Concentrix: Yeah. So when we think about consolidation from a competitor standpoint, the vast majority of the consolidation we’re winning is because we’re putting it on our platforms, and we’ve got a different differentiated value proposition to the clients. And so they see that as being very different than what they can get in the marketplace. When we talk about net new deals, the vast majority are multi pillar. And what I mean by multi pillar is not only is it service, it’s multiple different lines of business.

It has a technology element. Some of it’s for our proprietary technology, or it’s integrating existing off the shelf technology such as like a a CCaaS platform or a, CRM platform or a accounting platform, whatever the case may be is when we’re integrating it. We are doing that intentionally. This is something that we’ve been building up for for a while. And if someone’s just after the cheapest service they can get with a number of people than they can get and we think that business has no ability to be transformed or the client doesn’t want to transform it, that’s not business that we would actually go and chase.

Luke Morrison, Analyst, Canaccord: Okay, interesting. And maybe just double clicking on that technology led aspect, you’ve you’ve acquired this business that’s now Catalyst. Walk us through the vision here. Is is this sort of a stand alone growth engine for the business? Do you think of it more as a go to market enabler for the broader business?

Like, how should we think about that?

Chris Caldwell, CEO, Concentrix: Yeah. So when we did the the Catalyst acquisition for which was called Prokarma a couple years ago, it it really was about getting scale and deep technical expertise, not only around IT engineering, but also analytics, building data lakes, and doing a lot of the other types of integration services that are required to compete in a full solution set. And that originally was sort of independent, but as we’ve kind of driven our strategy, it’s been a go to market enabler. The vast majority of deals are not coming to us for sort of, I just want this, I just want this. They’re really saying, I’ve got this problem.

How are you gonna solve it? We can’t solve it the the best way possible without technology. Now we have the critical mass to be able to make that happen.

Luke Morrison, Analyst, Canaccord: Yep. Yep. Okay. Probably the hottest topic for you guys right now, you’re productizing AI into your IX suite. You know, how’s adoption of those going of of Hello and Hero?

Where are you seeing the most traction across those two offerings?

Chris Caldwell, CEO, Concentrix: Yeah. So so let’s talk about the the two offerings and just give some context. Yeah. Two years ago, when AI first came out, we tried to go out and sell it in a meaningful way, no client would buy it. That’s just the reality of it.

But we started realizing there’s a lot of things that we could use it for and develop it for ourselves. So we were installing it and putting it in our own infrastructure, and for a lot of clients, we were putting it in. And demand started picking up pretty dramatically. And frankly, we said, okay, we have to really commercialize this. And so we spent a lot of time, effort, money to commercialize it.

And we’re now seeing the benefit of it. We can deploy it faster. It can go across different tenants, across different providers. It can be used in house across our infrastructure, and we’re hitting our metrics for that. I’m really, really happy and think, in our industry, we have probably the largest deployment across desktops of AI in a real meaningful manner anywhere in the world, frankly.

We haven’t seen anyone who’s who’s got it bigger from from from that perspective. So we’re super, super happy with that. Our iX Hello strategy is a little different. Our iX Hello strategy is about complete automation, no humans in loop. And we’re primarily competing with people who are either net new digital AI chatbot natives and or large companies who are trying to add on chatbots to their existing CCaaS technology or CRM technology.

With those, we actually do a lot of integration for them. And our IX hello platform is doing actually really well in the pace of numbers that we’re doing. But we’re being relatively cautious about where it’s deployed because what the biggest thing for us is is around defending the brand. You don’t want any hallucinations, you don’t want any bad brand experiences. And also making sure that our clients’ data is ready.

I don’t think most people realize how bad their data is. Yeah. And so it’s ramping very, very nicely, but it’s also driving this peripheral services to make sure that it’s enabled, which is a big benefit that originally we didn’t actually see.

Luke Morrison, Analyst, Canaccord: Yep. Yep. Okay. That makes a lot of sense. If think about, I mean, is kind of a crowded space and topic right now.

You have pure play AI vendors, guys like Decagon and Sierra that are startups and and making waves in the space. Like, how do you think about I mean, on the other hand, you have this massively entrenched customer base that you can sell directly into, and so have you this huge go to market advantage, right? Yeah. But how do you see the differentiation versus those pure play SaaS applications versus what you’re offering today? How do you maintain

Chris Caldwell, CEO, Concentrix: Yeah. That’s a great question. I mean, frankly, when we’re talking to our clients, the conversations are very different. If you’re talking to sort of a new tech company coming in, they tend to be talking about feeds and speeds and hey, you don’t need humans When we’re coming in, we’re saying, well, that’s great, but have you looked at the regulatory environment for that?

Do you really understand the compliance that you need to do for that? By the way, it’s great that you’re thinking about this, but that’s not how your data is organized. And this customer journey is going to break if you put those places. And a good example is with a very well known competitor in that space that was in a client that we were also servicing, they had to shut down because they weren’t PCI compliant and were handling credit cards in an unencrypted fashion. That’s table stakes for us.

This is what we do every single day. But to them, they hadn’t figured that out yet. And so it’s just very, very different conversations. The other thing that’s important to appreciate from a differentiation perspective is every client has some very transactional volume that’s easily, easily automatable. But when you want to do that and tie it into the rest of the customer journey of more complex type of transactions, at this point in time, you still need humans.

You still need access to all their other data infrastructure. And the client doesn’t want to be the general contractor. They don’t want to say, oh, I’ve got this software company over here. Okay. I’ve got this other company over here.

I’ve got something here. When we come in, we can say, look, fully autonomous IX Hello. And by the way, we can integrate into your infrastructure. And for all the people that are using it, not only can we pass that information across to our IX hero product that drives better productivity productivity and proficiency, but by the way, we can also tie into your back end infrastructure. Yep.

Very, very different conversation.

Luke Morrison, Analyst, Canaccord: Yeah. Awesome. Very, very helpful. You’ve obviously been investing a decent amount in these products. I think it’s the run rate is 12 and a half million a quarter right now.

How how are you thinking about investment levels on a go forward basis? Are you leaning in? Are you sort of at a steady state here?

Chris Caldwell, CEO, Concentrix: Yeah. So in our core development, we think we’re spending the right amount, and we’ll tailor that to where we see the market opportunities. Where we’re spending more and we’ll continue to spend more on is kind of installation and adoption of the new products. So think of go to market resources, think of marketing resources, think of implementation and install resources. And those will flex based on the demand that we’re seeing and the pipeline that we’re seeing.

But what we’re very focused on is that this has to add value not only to our clients, but also us and our shareholders. And so what you won’t see is where we kind of are doing what some others are and are trying to either spend to the nth degree and not necessarily driving the results, and there’s no economic benefit. But right now, we’re very happy with where we’re spending at this elevated level. Our goal is to be sort of that we will be breakeven at the in q four and start to be accretive, and and we’re on pace.

Luke Morrison, Analyst, Canaccord: Yep. Okay. Awesome. Let’s maybe take a step back, discuss strategic positioning. You’ve often cited high win rates in the market.

You’re seeing market consolidation. Help us understand what’s driving those share gains today. Is it sophistication of the platform and offering this full service solution? Is it your AI capabilities? You know, is that coming up as a major topic in conversations in win rates?

Is it, you know, global footprint? Like, what what’s leading conversations there?

Chris Caldwell, CEO, Concentrix: Yeah, it’s a bit of a combination. I mean, in the type of clients that we deal with, global footprint is kind of base level. In fact, if you look at our top 50 clients, 49 of them have us delivering geographies, multiple regions, multiple lines of business, multiple different stacks that you talk about. And so they’re very kind of complex implementations and support mechanisms. So that footprint is kind of you’ve got to be there if you’re going to compete in these sort of large deals.

The investments that we’ve been making over the last almost five, six, seven years around technology, around PK, around AI, around system integration, around all these other things differentiate the offer. And so when we’re competing against traditional pure players in our space, we’re winning because we can offer the whole breadth of services and solutions, both from a technology, human capital perspective, and and everything else that kinda got in deep domain expertise. Yep. Where we’re finding that we’re competing more and more on is in these full solution stacks, and that’s a very different group of competitors. Mhmm.

Right? They’re much larger. Accenture is the Cognizant cap, Geminis, you know, Infosys and TCSs. Yep. And where we went in that space is being much more flexible, much faster, much entrepreneurial, and really, really targeted at where we can add value in their ecosystem that enhances what the customer is after in a faster time frame.

And so we’re kind of continuing to build up. The benefit to us is that we’re going from sort of a 400 to $500,000,000,000 market to if you look at that type of market space with the services we offer, it’s more a little over a trillion dollars. So not only we’re getting into a bigger market, but we have some very deep competitive ability to be in that larger market. And that’s where we think the industry is going as a whole when clients are purchasing these types of services.

Luke Morrison, Analyst, Canaccord: Yeah. Yeah. Okay. Makes a lot of sense. If if we look out maybe like five to ten years from now, what what do you think ultimately separates the winners in the space?

And do you see I mean, it sounds like you see your peers shifting more to those digital natives, EPAMs, Globants, Cognizance, Accenture’s of the world.

Chris Caldwell, CEO, Concentrix: Yeah, we really see the market evolving where ITO and BPO and CX services tend to be more blended and more bought in a solution format. And that will change the competitive set that we see. We also see the market very much evolving. And we’ve said this for almost a decade is that we expect that there’ll be very small boutique players who do an incredible job at very unique types of attributes and capabilities for client sets. And then we see sort of these large players, which clearly we wanna be on, but there’s only gonna be a handful of them who are really servicing large enterprises.

In the middle, we really expect that to be very, very few people and no one. Because the type of investments you need to make in security, the type of investments you need to make in proprietary technology, the type of investments you need to make in just people to be able to service what’s coming out are just so great that you’re just not going to be able to compete if you don’t have the scale of revenue in that space. And so we really see the market evolving and we see that speeding up over the next three to five years.

Luke Morrison, Analyst, Canaccord: Yep. Yep. Okay. Let’s quickly hit on, you know, you have this adjacent services part of the business. It’s growing faster than I think your other areas.

Data annotation has been brought up a lot as sort of this high growth area. Like, should help us get a view into that segment. How should we view the durability and potential of those revenue streams over the medium and long term?

Chris Caldwell, CEO, Concentrix: Well, we really see a lot of these adjacent services being the next growth wave for our organization. These are not one and done types of services. If you look at data annotation very publicly, you look at what Meta paid for scale, it would indicate that there is a lot of belief, that there’s a lot of durability and a lot of value in these types of services that go along. And we’re growing into that space quite nicely. If you also look at how we’re putting AI enabling as kind of the key underpinning tools in some of these adjacent areas and you believe, which we do, that over the next three to five years, adoption will continue to increase, That’s just gonna further drive these types of services in our space.

So we think they’re very durable. As Andre mentioned, they’re higher margin, they’re growing faster, and we’ve now got critical scale in many of these areas. Our our goal is to continue to to grow and make them a bigger percentage of our revenue. Yep. Okay.

Excellent.

Luke Morrison, Analyst, Canaccord: Last topic here I want to hit on. We’re closing up on time, but M and A, you’ve been a thoughtful consolidator historically. How do you think about future M and A priorities, vertical capabilities, tech IP, regional expansion? Do you feel like there are areas of the business that you still see room to build out?

Chris Caldwell, CEO, Concentrix: Oh, we definitely see room to build out. We definitely see room to do inorganic growth. But from a priority perspective, we always look at from a client first perspective. So where are the clients needing support? Is it in deep domain expertise?

Is it in technical solutions? Is it in capabilities? Can we build it organically? Is it faster to go and and buy, you know, externally? And so that’s how we kind of think about it.

And when Andre and I talk about this, it’s really about, okay, what’s the highest return for our business? Let’s go and do that. And we see lots of opportunities in that space. We also look at client sets. So if there’s a company that might do similar types of services to us, but there’s a unique client set that they bring to the table that we know we can take a lot of our capabilities that the current company servicing can’t and grow their share of wallet in those clients, that’s very attractive to us as well.

Luke Morrison, Analyst, Canaccord: Okay. Awesome. Maybe just quickly on WebHelp. You’ve made that acquisition a few quarters ago now. Help us think about the strategic vision behind that acquisition.

What are the synergies that you set off when you made it? And how has that played out?

Andre Valentine, CFO, Concentrix: It’s played out pretty much the way we expected it to. So we talked at the time that we announced the combination. We were really excited about what it did to our footprint, getting stronger in Europe, getting stronger in Latin America, not having significant overlap with us in other geographies. We’re really excited about the client base and our ability to sell our capabilities into that client base as well as sell their strength in those geographies and some of their technological strengths into our client base. And that’s exactly how it’s played out.

From a numbers perspective, we put out a synergy target of roughly $120,000,000 we’ve achieved that. The integration is essentially done. And then from a commercial synergy perspective, we’ve been very successful almost from the first quarter after we announced the deal in selling into their clients either our footprint or capabilities or vice versa, taking one of our clients and selling their strength in Europe, Latin America or some of their technology. So I feel really great about how it’s all come together.

Luke Morrison, Analyst, Canaccord: Awesome, fantastic. We are pretty much up on time. Maybe one final question just to close. Big picture, looking out three to five years, what excites you most about the business today?

Chris Caldwell, CEO, Concentrix: What excites us most about the business is everything that we’ve been investing for in the last five to eight years is coming to fruition. We were a bit of a heretic eight years ago. Now we’re seen as, okay, we’re in the right spot at the right time. And we also see, with the expanding marketplace and our services going up to that, the ability to really on what we’ve been wanting to do for a while. And so it’s finally coming to fruition, and I think that’s super exciting for us.

Luke Morrison, Analyst, Canaccord: Awesome. Well, I think that’s a good place to leave it. Andre, Chris, thank you very much for the session. This was great. And thank you very much for joining us, everyone.

Chris Caldwell, CEO, Concentrix: Thank you

Andre Valentine, CFO, Concentrix: very much. Thanks for having

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