Concentrix Q3 swings to loss on goodwill impairment charge
Overview
Technology and services firm's fiscal Q3 revenue fell 1.2% yr/yr
Adjusted EPS for Q3 rose 5% yr/yr
Company took $1.05 bln non-cash goodwill impairment charge, resulting in large GAAP net loss
Outlook
Concentrix sees Q4 revenue between $2.41 bln and $2.46 bln
Company expects Q4 non-GAAP diluted EPS of $2.86 to $2.98
Concentrix forecasts 2026 revenue of $9.83 bln to $9.88 bln
Result Drivers
GOODWILL IMPAIRMENT - A $1.050 bln non-cash charge, tied primarily to its stock-price trading range and market capitalization, drove the operating loss
SHIFT TO NEW BUSINESS - Co said 50% of revenue now comes from business won and deployed in the last 3 years since the introduction of AI, which management said contributed to margin expansion and strong free cash flow
SECTORAL REVENUE CHANGES - Revenue declined in technology and consumer electronics, communications and media, and healthcare, while banking, financial services and insurance, and retail, travel and e-commerce saw growth
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | $2.45 bln | ||
Q3 Adjusted EPS | $2.92 | ||
Q3 Adjusted Net Income | $186.50 mln | ||
Q3 Adjusted Operating Margin | 12.6% |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the business support services peer group is "buy"
Wall Street's median 12-month price target for Concentrix Corporation is $30.00, about 17.9% above its September 28 closing price of $25.45
The stock recently traded at 2 times the next 12-month earnings vs. a P/E of 2 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)