CNXC · Concentrix Corporation

Concentrix delivered revenue growth of 5.4% to $2.5 billion in Q1 FY2026 from $2.4 billion a year ago, driven by gains in retail and BFSI verticals alongside favorable FX impacts, though offset by softness in technology/consumer care and healthcare. This top-line resilience underscores our diversified client base and ability to capture demand in high-growth areas despite macroeconomic headwinds.

Profitability faced significant pressure, with gross profit dipping to $849.7 million from $855.9 million, compressing the gross margin to 34.0%. As noted in MD&A, our cost of revenue as a percentage of revenue fluctuates based on economies of scale, operating expense management, and investment timing. Operating income declined 29.8% to $118.6 million, shrinking the operating margin to 4.7% from higher levels. This primarily stemmed from the gross margin contraction combined with selling, general, and administrative expenses rising as a percentage of revenue, limiting scale efficiencies typical at higher volumes. Net income fell sharply 69.3% to $21.6 million, with diluted EPS at $0.33 versus $1.04, reflecting these margin dynamics.

Cash generation deteriorated markedly, with net cash from operating activities swinging to a use of $83.2 million from a modest $1.4 million inflow last year. MD&A attributes this to lower net income and unfavorable working capital changes, common in periods of volume flux and investment phasing. Capital expenditures rose to $53.9 million from $50.6 million, directed toward expanding our delivery footprint and enhancing technology solutions—core to our primary cash uses alongside working capital and debt service. Resulting free cash flow was -$137.1 million, down from near-breakeven prior year.