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Concentrix (CNXC) is trading lower after reporting Q4 (Nov) results this morning. The company returned to EPS upside after misses in the prior two quarters, while revenue was in line, increasing 4.3% yr/yr to $2.55 bln. The FY26 guidance was also mixed with EPS of $11.48-12.07 falling below expectations, while revenue of $10.035 to $10.180 bln was roughly in line.

• Revenue growth was led by banking, financial services and insurance, which increased 11%, followed by communications and media, travel, and other clients. Technology and consumer electronics and healthcare lagged, both down about 2%.
• CNXC continues to work up the value chain, leaning into higher-complexity, tech-enabled engagements, with non-complex work reduced to 5% of revenue from 7% and over 40% of new business now including its technology.
• That said, margins are still the issue and it shows up in the guide. Non-GAAP operating margin improved 40 bps sequentially to 12.7%, but still fell 150 bps yr/yr as CNXC works through overcapacity and absorbs transition costs tied to its footprint and delivery changes.
• In terms of the guidance, CNXC expects non-GAAP operating income to improve sequentially in the second half as it removes duplicate costs, simplifies the business, and advances the transformational deals and initiatives it has been investing in.

Briefing.com Analyst Insight

CNXC's Q4 report showed a modest improvement, highlighted by a return to EPS upside after two straight misses, alongside continued progress in shifting its mix toward higher-value, tech-enabled work, with management reiterating that AI is a tailwind rather than a threat. That said, profitability remains constrained as the company works through excess capacity and absorbs near-term costs tied to footprint changes, including offshore migration. Management expects margins to improve as these pressures ease, with a more meaningful step-up in the back half as delivery changes mature and the company moves further past the overcapacity and tariff-related volume disruptions. For now, the AI message remains constructive, but investors likely need to see steadier margin follow-through before sentiment meaningfully improves.