Concentrix (NASDAQ:CNXC) Delivers Unexpected Q4 CY2025 Revenue Results

Concentrix Surpasses Revenue Projections in Q4 CY2025

Concentrix (NASDAQ:CNXC), a leader in customer experience solutions, posted its fourth quarter results for calendar year 2025, outperforming market expectations with a 4.3% year-over-year increase in revenue, reaching $2.55 billion. The company forecasts revenue of approximately $2.49 billion for the upcoming quarter, which aligns closely with analyst predictions. Adjusted earnings per share came in at $2.95, exceeding consensus estimates by 1.4%.

Chris Caldwell, President and CEO of Concentrix, commented, “Our strong fourth quarter and full-year results demonstrate our ongoing dedication to evolving our business to meet client needs and create value for our shareholders.”

Highlights from Concentrix’s Q4 CY2025 Performance

• Revenue: $2.55 billion, surpassing analyst expectations of $2.53 billion (4.3% year-over-year growth, 0.7% above estimates)
• Adjusted EPS: $2.95, beating the $2.91 analyst forecast (1.4% above estimates)
• Adjusted EBITDA: $378.6 million, slightly below the $384.9 million estimate (14.8% margin, 1.6% below expectations)
• Q1 CY2026 Revenue Outlook: $2.49 billion at the midpoint, in line with market forecasts
• 2026 Adjusted EPS Guidance: $11.78 at the midpoint, trailing analyst projections by 3.9%
• Operating Margin: -54.1%, a significant drop from 5.9% a year ago, primarily due to a non-cash goodwill impairment charge of $1.52 billion
• Free Cash Flow Margin: 11%, an improvement from 9.2% in the prior year’s quarter
• Market Capitalization: $2.52 billion

About Concentrix

Operating in 75 countries with a workforce of around 450,000, Concentrix (NASDAQ:CNXC) specializes in designing and delivering customer experience solutions. The company supports global brands in managing customer engagement across digital platforms and contact centers.

Examining Revenue Trends

Consistent sales growth over time is a key indicator of a company’s strength. While any business can have a strong quarter, sustained expansion is a sign of lasting quality.

With $9.83 billion in revenue over the past year, Concentrix stands out as a major player in the business services sector, leveraging its recognized brand to influence customer decisions.

Over the last five years, Concentrix achieved a remarkable 15.8% compound annual growth rate in sales, outpacing many of its industry peers and signaling robust demand for its services.

Quarterly revenue performance for Concentrix is illustrated below:

While long-term growth is crucial, recent performance can reveal new trends. In the past two years, Concentrix’s annualized revenue growth accelerated to 17.5%, surpassing its five-year average and indicating a recent uptick in demand.

Year-over-year revenue growth for Concentrix is shown below:

This quarter, the company posted a 4.3% increase in revenue compared to the same period last year, beating Wall Street’s estimates by 0.7%. Management projects a 4.9% year-over-year revenue rise for the next quarter.

Looking ahead, analysts anticipate a 2.7% revenue increase over the next year, a slowdown compared to recent years, suggesting potential challenges in demand. Nevertheless, Concentrix continues to perform well in other financial metrics.

Profitability and Operating Margin

Operating margin reflects how much profit remains after covering core operating expenses, making it a valuable measure for comparing profitability across companies regardless of their debt or tax situations.

Although Concentrix has remained profitable over the past five years, its average operating margin of 4% is relatively low for its sector, largely due to a substantial cost structure.

Over the last five years, the company’s operating margin declined by 19.6 percentage points, raising concerns about its expense management. Despite revenue growth, Concentrix was unable to leverage its scale to improve profitability, indicating rising costs that could not be offset by higher prices.

The chart below shows Concentrix’s trailing 12-month operating margin:

In the fourth quarter, Concentrix reported a negative operating margin of 54.1%, a steep decline of 60.1 percentage points from the previous year, mainly due to a significant non-cash goodwill impairment charge of $1.52 billion.

Earnings Per Share (EPS) Analysis

Tracking long-term changes in earnings per share (EPS) helps assess whether a company’s growth is translating into profitability for shareholders.

Concentrix’s EPS has grown at a modest 2.6% compound annual rate over the past four years, underperforming the broader business services industry.

The following chart illustrates Concentrix’s trailing 12-month non-GAAP EPS:

Recent trends show that EPS has remained flat over the last two years, despite strong revenue growth of 17.5% annually. This suggests that the company’s profitability per share has diminished as it expanded.

A closer look reveals that declining operating margins have been the primary factor behind lower earnings, with interest and tax expenses playing a lesser role in the company’s fundamentals.

For Q4, adjusted EPS was $2.95, down from $3.26 a year earlier, but still 1.4% above analyst expectations. Wall Street anticipates full-year EPS to reach $11.22 over the next 12 months, representing an 8% increase.

Summary and Outlook

While Concentrix managed to slightly exceed revenue forecasts this quarter, its full-year and next-quarter EPS guidance fell short of expectations, resulting in a weaker overall performance. The company’s stock price dropped 4.5% to $38.67 following the earnings release.

Although this quarter’s results were underwhelming, a single report does not define the company’s long-term prospects. Assessing whether Concentrix is a worthwhile investment requires a broader view of its business quality and valuation.