Concentrix Posts Record Cash Flow After Goodwill Write-Down
Cash from operations hit a record $268.2 million in the August quarter as the company booked a $1,050.0 million non-cash goodwill impairment.
Concentrix Corporation (CNXC), a global technology and services company, reversed a year-over-year revenue increase in the fiscal third quarter ended August 31, 2026, as reported sales fell 1.2% to $2,453.7 million, or 0.5% on a constant-currency basis, after a 1.9% as-reported and 0.6% constant-currency rise in the prior quarter.
The swing in the top line was the quarter’s inflection. The company had grown revenue in the immediately preceding period; that growth stopped. Banking, financial services and insurance revenue was $432.5 million, up 12% from a year earlier, and retail, travel and e-commerce was $662.6 million, up 6%. Technology and consumer electronics fell 10% to $603.5 million, healthcare fell 17% to $145.2 million, and communications and media fell 7% to $381.9 million. Other revenue was $228.0 million.
GAAP results swung to an operating loss of $(910.3) million, or (37.1)% of revenue, from operating income of $95.4 million, or 3.9% of revenue, in the second quarter. The loss included a $1,050.0 million non-cash goodwill impairment charge primarily resulting from the recent trading range for the stock price and market capitalization. Diluted GAAP earnings were a loss of $(16.24) a share. Goodwill on the balance sheet stood at $2.64 billion at August 31. Assets held for sale were $213.0 million and liabilities held for sale $182.1 million, with a $1.5 million loss on held for sale in the quarter.
Non-GAAP operating income rose to $309.0 million, or 12.6% of revenue, from $292.0 million, or 11.9% of revenue, in the second quarter. Adjusted EBITDA increased to $363.0 million, or 14.8% of revenue, from $347.4 million, or 14.1% of revenue. Non-GAAP diluted EPS was $2.92, compared with $2.63 in the prior quarter. Acquisition-related, integration and restructuring expenses were $42.5 million, versus $18.6 million a year earlier, primarily from recent cost-reduction initiatives including severance and facilities consolidation.
Cash generation was the other defining result. Cash provided by operations reached a record high of $268.2 million, and adjusted free cash flow was $218.3 million. Free cash flow was $221.2 million. Cash and cash equivalents were $244.7 million at August 31. The company did not repurchase shares in the quarter; remaining authorization was $396.6 million. The board declared a quarterly dividend of $0.37 a share, payable November 3, 2026, up from $0.36.
President and CEO Chris Caldwell said the quarter reached an inflection point where 50% of revenue is coming from business won and deployed within the last three years since the introduction of AI, and that the company is aggressively disrupting its own traditional business while the underlying new business is stronger and healthier, as evidenced by margin expansion, strong free cash flow and growth of new services.
For the fourth quarter ending November 30, 2026, the company expects reported revenue of $2.410 billion to $2.460 billion, implying a constant-currency decline of (5.0)% to (3.0)%, versus the third quarter’s (0.5)% constant-currency result. Non-GAAP operating income is guided at $310 million to $320 million and non-GAAP diluted EPS at $2.86 to $2.98, assuming approximately 61.2 million diluted shares. Operating income is expected at $174 million to $184 million.
For the full year ending November 30, 2026, Concentrix expects reported revenue of $9.827 billion to $9.877 billion, implying a constant-currency decline of (0.8)% to (0.3)%. Non-GAAP operating income is guided at $1,206 million to $1,216 million, non-GAAP diluted EPS at $10.97 to $11.09, and adjusted free cash flow of about $630.0 million to $650.0 million. The effective tax rate is expected to be approximately 24% for both the fourth quarter and the full year.