Concentrix Corporation
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Part I
ITEM 1. BUSINESS
Our Company
We are a global technology and services leader that powers exceptional brand experiences and digital operations for more than 2,000 clients across the globe. We design, build, and run fully integrated, end-to-end solutions — including customer experience (“CX”) process optimization, technology innovation and design engineering, front- and back-office automation, analytics, and business transformation services — for clients in five primary industry verticals. Our solutions help our clients drive deep understanding, full lifecycle engagement, and differentiated customer experiences for their brands.
We strive to deliver exceptional services globally, supported by our deep industry knowledge, technology and security practices, talented people, and digital and analytics expertise. Our differentiated portfolio of solutions supports Fortune Global 500 and new economy companies across the globe in their efforts to deliver an optimized, consistent brand experience across all channels of communication, including voice, chat, email, generative AI (“GenAI”) and agentic AI-powered self-service, social media, asynchronous messaging, and other custom applications.
We offer our clients integrated solutions to support the entirety of their customer lifecycles, transform their businesses, and solve business challenges:
•CX and user experience (“UX”) strategy and design;
•digital operations, including business-to-business (“B2B”) sales, performance marketing, customer loyalty, trust and safety, collections, and financial compliance;
•data analytics, enterprise intelligence, artificial intelligence (“AI”) readiness, and actionable insights; and
•innovative new approaches to enhancing the customer experience through the latest technological advancements in our industry, including GenAI and agentic AI technologies.
Through our end-to-end capabilities, we believe we deliver better economic outcomes for our clients with solutions designed to meet their unique needs as they navigate a landscape characterized by discerning consumers and new market entrants.
We have strong relationships with global brands and are a partner of choice for industry leaders, including more than 160 Fortune Global 500 clients as of November 30, 2025. We believe in deepening and broadening our support of clients over the long term to build enduring relationships, and we prioritize the pursuit of clients in verticals characterized by high growth, high transaction volume, high levels of compliance and security, and steep barriers to entry. Our average client tenure for our top 30 clients is 16 years. Our strategic verticals include:
•technology and consumer electronics;
•retail, travel and e-commerce;
•communications and media;
•banking, financial services and insurance; and
•healthcare.
Our clients include:
•8 of the top 10 global tech and consumer electronics companies
•8 of the top 10 global fintech companies
•2 of the top 5 global retail and e-commerce companies
•8 of the top 10 European banks
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•7 of the top 10 U.S. banks
•5 of the top 5 U.S. health insurance companies
•3 of the top 5 global healthcare companies
•10 of the top 10 global automotive companies
Through our technology-infused solutions, our clients benefit from having a single partner that can deliver integrated solutions globally at scale, enabling them to address the entirety of the customer journey, from acquisition to support to renewal. Our end-to-end capabilities and broad service offerings help our clients acquire, retain, and improve the lifetime value of their customer relationships while optimizing their back-office processes.
We combine global consistency with local expertise, enhancing the end user experience for our clients’ customers through services rendered by a team of approximately 455,000 employees and staff, which we refer to as game-changers, across approximately 483 locations in 74 countries and six continents in the languages and dialects that are relevant to our clients and their customers.
Strategic Growth
We have a long history of growth through strategic acquisitions, including:
•Our September 2025 acquisition of SAI Digital, an end-to-end digital commerce and CX technology solutions company with a strong presence in Asia;
•Our September 2023 acquisition of the Webhelp business (“Webhelp”), a leading provider of CX solutions, including sales, marketing, and payment services, with significant operations and client relationships in Europe, Latin America, and Africa;
•Our July 2022 acquisition of ServiceSource International, Inc. (“ServiceSource”), a global outsourced go-to-market services provider that delivered business-to-business (“B2B”) digital sales and customer success solutions;
•Our December 2021 acquisition of PK, a leading CX design engineering company that created pioneering experiences to accelerate digital outcomes for their clients’ customers, partners and staff; and
•Our October 2018 acquisition of Convergys Corporation, a customer experience outsourcing company that added scale, diversified our revenue base, and expanded our service delivery capabilities.
Our strategic acquisitions have strengthened our position as a global technology and services leader by expanding our scale in the digital IT services market and creating one of the most robust, well-balanced global footprints in the industry. Our disciplined approach to growth has strengthened our value proposition for our clients by broadening our offering of AI solutions, digital capabilities, and high-value services.
We trace our roots to 2004 when SYNNEX Corporation, now known as TD SYNNEX Corporation (“TD SYNNEX”), acquired BSA Sales, Inc., a company with 20 employees focused on helping clients through outsourced sales and marketing services. In 2006, TD SYNNEX combined New York-based Concentrix with BSA Sales under the Concentrix name, with the goal of bringing technology and innovation into businesses to help clients reimagine and design the next generation of experiences. Concentrix Corporation was incorporated in Delaware in December 2009. In December 2020, Concentrix was separated from TD SYNNEX through a tax-free distribution of all of the issued and outstanding shares of our common stock to TD SYNNEX stockholders (such separation and distribution, the “spin-off”). As a result of the spin-off, we became an independent public company and our common stock commenced trading on the Nasdaq Stock Market (“Nasdaq”) under the symbol “CNXC” on December 1, 2020.
Our Solutions and Technology
Through our strategy, talent, and technology, we are fully equipped to design, build, and run solutions that help our clients enhance their customers’ experience and improve business performance. Through our integrated solutions offering, we assist our clients in acquiring, supporting and renewing customers, leveraging customer feedback and insights to constantly improve business performance, and identifying and implementing customer-facing and back-office process improvements. We help our clients by creating tools that their customers and
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employees love to use, enabling better customer interactions through real-time sentiment analysis, and integrating multiple customer interactions and touchpoints into one-stop smart mobile applications.
Services Portfolio. We deliver integrated solutions and services that address the entirety of the customer lifecycle, support business transformations, and solve business challenges. We offer our clients the means to acquire, support, and renew customers across all channels while minimizing attrition and increasing customer lifetime value.
Our broad portfolio of services include:
•Strategy and Design. We strive to help our clients reimagine what great is by using human-centered design and tech-enabled innovation to design next-generation solutions that shape experiences, strategies, and operations. Our Strategy and Design solutions include business transformation consulting, next-gen experience design, digital innovation — including GenAI and agentic AI, and lifecycle engagement. Through these services, we promote a more rapid integration of digital and enabling technologies, providing transformational business services to our clients.
•Data and Analytics. We use technology and innovative domain-specific solutions to assist our clients in maximizing the value of their data by evaluating and using enterprise data to drive business decisions and integrating the insights gained from the analysis of enterprise data into business processes. Our Data and Analytics services include data and analytics transformation, data annotation and engineering, advanced analytics, enterprise intelligence, operational insights, and voice of the customer (“VOC”) solutions.
•Enterprise Technology. Utilizing our deep knowledge of our clients’ businesses, industries, and enterprise technology, we partner with our clients to evaluate, modernize, adopt, integrate, and enhance their use of technology for enhanced efficiency. Our game-changers: advise clients on their technology strategy and roadmap; develop personalized customer journey experiences; design, build, and run enterprise-wide applications, such as self-service AI bots and GenAI-powered platforms; accelerate development cycles with quality assurance and testing services; and reinforce cybersecurity through managed security services.
•Digital Operations. We combine expert knowledge, cutting-edge technologies, and distinct operating models, using the best of human and AI capabilities to assist our clients in solving business challenges. Our digital operations services include marketing, B2B sales, customer service, trust and safety, and finance and compliance services.
Intelligent Experience Products. In September 2024, we launched our Intelligent Experience (“iX”) suite of products, designed to solve client and customer challenges and improve efficiency and performance. Our current iX suite offerings include:
•iX HelloTM is an enterprise-grade GenAI-powered self-service application that is designed to accelerate productivity across multiple business functions by enabling users to create customizable virtual assistants that can integrate with leading large language models as well as internal data sources. iX Hello is capable of researching the latest online information, translating text in over 90 languages, analyzing files, images, and data, transcribing voice and meeting notes, and creating training materials, documentation, and reports, among other applications.
•iX HeroTM is an agentic AI-powered application that works together with a human in the loop to accelerate customer experience delivery. iX Hero is designed to analyze advisor performance and provide data-driven real-time coaching and insights, find and surface ready-to-use answers during customer interactions, summarize and automatically transcribe conversations, and deliver essential news and updates to advisors. iX Hero includes two agentic AI features, Harmony, which fine-tunes speech patterns for clearer pronunciation, and Clarity, which suppresses background noise to deliver clearer audio.
In addition, in September 2025, we announced the launch of our Agentic Operating FrameworkTM
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2025, as filed with the Securities and Exchange Commission on January 28, 2026. References to “we,” “our,” “us,” or “the Company” or “Concentrix” refer to Concentrix Corporation and its subsidiaries.
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, but are not limited to, statements regarding our expected future financial condition and growth, cash flows, results of operations, effective tax rate, leverage, liquidity, business strategy, competitive position, demand and market acceptance for our services and products portfolio, seasonality of our business, international operations, the potential benefits associated with use of the Company’s technology and services, acquisition opportunities and the anticipated impact of acquisitions, capital allocation and dividends, growth opportunities, spending, capital expenditures and investments, debt repayment and obligations, competition and market forecasts, industry trends, our human capital resources and sustainability initiatives, and statements that include words such as believe, expect, may, will, provide, could, should, and other similar expressions. These forward-looking statements are inherently uncertain and involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Risks and uncertainties include, among other things: risks related to general economic and geopolitical conditions and their effects on our clients’ businesses and demand for our services, including consumer demand, interest rates, inflation, the price of oil and other petroleum-based products, international tariffs and global trade policies, supply chains, and the conflicts in the Middle East and Ukraine; cyberattacks on the Company’s or its clients’ networks and information technology systems; uncertainty around, and disruption from, new and emerging technologies, including the adoption and utilization of artificial intelligence (“AI”), including agentic and generative AI; the failure of the Company’s staff and contractors to adhere to the Company’s and its clients’ controls and processes; the inability to protect personal and proprietary information; the effects of communicable diseases or other public health crises, natural disasters and adverse weather conditions; geopolitical, economic and climate- or weather-related risks in regions with a significant concentration of the Company’s operations; the ability to successfully execute the Company’s strategy; the timing and success of product launches; competitive conditions in our industry and consolidation of our competitors; variability in demand by the Company’s clients or the early termination of the Company’s client contracts; the level of business activity of the Company’s clients and the market acceptance and performance of their products and services; the demand for end-to-end solutions and technology; damage to the company’s reputation through the actions or inactions of third parties; changes in law, regulations, or regulatory guidance, or changes in their interpretation or enforcement, including changes in law and policy that restrict offshoring or travel or visas between countries in which we have operations; the operability of the Company’s communication services and information technology systems and networks; the loss of key personnel or the inability to attract and retain staff across all geographies with the skills and expertise needed for the Company’s business; increases in the cost of labor, including minimum wage rates in the countries in which we operate; the inability to successfully identify, complete, and integrate strategic acquisitions or investments or realize anticipated benefits within the expected timeframe; higher than expected tax liabilities; currency exchange rate fluctuations; investigative or legal actions; and other risks that are described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended November 30, 2025. We do not intend to update forward-looking statements, which speak only as of the date hereof, unless otherwise required by law.
Concentrix, Webhelp, and all Concentrix company, product, and services word and design marks and slogans are trademarks or registered trademarks of Concentrix Corporation and its subsidiaries. Other names and marks are the property of their respective owners. All rights reserved.
Overview and Basis of Presentation
Concentrix is a global technology and services leader that powers exceptional brand experiences and digital operations for more than 2,000 clients across the globe. We design, build, and run fully integrated, end-to-end solutions, including customer experience (“CX”) process optimization, technology innovation and design engineering, front- and back-office automation, analytics, and business transformation services to clients in five primary industry verticals. Our differentiated portfolio of solutions supports Fortune Global 500 clients across the globe in their efforts to deliver an optimized, consistent brand experience across all channels of communication, including voice, chat, email, GenAI- and agentic AI-powered self-service, social media, asynchronous messaging,
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and custom applications. We strive to deliver exceptional services globally supported by our deep industry knowledge, technology and security practices, talented people, and digital and analytics expertise.
We generate revenue from performing services and providing technology that is generally tied to our clients’ products and services. Any shift in business, demand, or the size of the market for our clients’ products or services, or any failure of technology or failure of acceptance of our clients’ products or services in the market may impact our business. The staff turnover rate in our business is high, as is the risk of losing experienced team members. High staff turnover rates may increase costs and decrease operating efficiencies and productivity.
Revenue and Cost of Revenue
We generate revenue through the provision of technology and services to our clients pursuant to client contracts. Our client contracts typically consist of a master services agreement, supported in most cases by multiple statements of work, which contain the terms and conditions of each contracted solution. Our client contracts can range from less than one year to over five years in term and are generally subject to early termination by our clients for any reason, typically with 30 to 90 days’ notice.
Our technology and services are generally characterized by flat unit prices. Approximately 99% of our revenue is recognized as services are performed, based on staffing hours or the number of client customer transactions handled using contractual rates. Remaining revenue from the sale of these solutions is typically recognized as the services are provided over the duration of the contract using contractual rates.
Our cost of revenue consists primarily of personnel costs related to the delivery of our technology and services. The costs of our revenue can be impacted by the mix of client contracts, where we deliver the technology and services, additional lead time for programs to be fully scalable, and transition and initial set-up costs. Our cost of revenue as a percentage of revenue has also fluctuated in the past, based primarily on our ability to achieve economies of scale, the management of our operating expenses, and the timing and costs incurred related to our acquisitions and investments.
For the nine months ended August 31, 2026 and 2025, approximately 90% and 89%, respectively, of our consolidated revenue was generated from our non-U.S. operations, and approximately 52% and 54%, respectively, of our consolidated revenue was priced in U.S. dollars. We expect that a significant amount of our revenue will continue to be generated from our non-U.S. operations while being priced in U.S. dollars. We have certain client contracts that are priced in non-U.S. dollar currencies for which a substantial portion of the costs to deliver the services are in other currencies. Accordingly, our revenue may be earned in currencies that are different from the currencies in which we incur corresponding expenses. Fluctuations in the value of currencies, such as the Philippine peso, the Indian rupee, the Egyptian pound, the Columbian peso, and the Canadian dollar, against the U.S. dollar or other currencies in which we bill our clients, and inflation in the local economies in which these delivery centers are located, can impact the operating and labor costs in these delivery centers, which can result in reduced profitability. As a result, our revenue growth, costs, and profitability have been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates and inflation.
Margins
Our gross margins fluctuate and can be impacted by the mix of client contracts, services provided, shifts in the geography from which our technology and services are delivered, client volume trends, the amount of lead time that is required for programs or services to become fully scaled, and transition and set-up costs. Our operating margin fluctuates based on changes in gross margins as well as overall volume levels, as we are generally able to gain scale efficiencies in our selling, general and administrative costs as our volumes increase.
Economic and Industry Trends
The industry in which we operate is competitive, including on the basis of pricing terms, delivery capabilities, and quality of services. Labor in various markets is also subject to competitive pressures that can result in increased labor costs. These factors subject us to pricing and labor cost pressures that can negatively affect our revenue, gross profit, and operating income.
Our business operates globally in 74 countries across six continents. We have significant concentrations in the Philippines, India, Brazil, the United States, Egypt, Türkiye, Colombia, Malaysia, Morocco, China, South Africa, the United Kingdom, and elsewhere
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throughout EMEA, Latin America, and Asia-Pacific. Accordingly, we historically have and expect to continue to be impacted by economic strength or weakness in these geographies and by the strengthening or weakening of local currencies relative to the U.S. dollar.
From time to time since January 2025, the U.S. government has imposed, or threatened to impose, new or increased tariffs on certain countries, materials, and industries, and in response, certain impacted countries have imposed or threatened various retaliatory tariffs or other trade restrictions on imports from the United States. The tariff environment remains dynamic, and we cannot predict with certainty the effect of future changes in global trade policy and tariffs on our clients’ operations and demand for our services in future periods.
Seasonality
Our revenue and margins fluctuate with the underlying trends in our clients’ businesses and trends in the level of consumer activity. As a result, our revenue and margins are typically higher in the fourth fiscal quarter of the year than in any other fiscal quarter.
Critical Accounting Policies and Estimates
During the three and nine months ended August 31, 2026, there were no material changes to our critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended November 30, 2025.
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Results of Operations – Three and Nine Months Ended August 31, 2026 and 2025
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
August 31, 2026 | August 31, 2025 | August 31, 2026 | August 31, 2025 | |||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||
Revenue | $ | 2,453,679 | $ | 2,483,253 | $ | 7,416,543 | $ | 7,272,846 | ||||||||||||||
Cost of revenue | 1,604,800 | 1,628,246 | 4,894,658 | 4,713,792 | ||||||||||||||||||
Gross profit | 848,879 | 855,007 | 2,521,885 | 2,559,054 | ||||||||||||||||||
Selling, general and administrative expenses | 709,184 | 708,023 | 2,168,210 | 2,094,858 | ||||||||||||||||||
Impairment charge | 1,050,000 | — | 1,050,000 | — | ||||||||||||||||||
Operating income (loss) | (910,305) | 146,984 | (696,325) | 464,196 | ||||||||||||||||||
Interest expense and finance charges, net | 64,856 | 72,014 | 208,247 | 220,414 | ||||||||||||||||||
Other expense (income), net | 4,603 | (36,474) | (23,014) | (20,175) | ||||||||||||||||||
Income (loss) before income taxes | (979,764) | 111,444 | (881,558) | 263,957 | ||||||||||||||||||
Provision for income taxes | 8,349 | 23,334 | 29,690 | 63,497 | ||||||||||||||||||
Net income (loss) | $ | (988,113) | $ | 88,110 | $ | (911,248) | $ | 200,460 | ||||||||||||||
Revenue
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
August 31, 2026 | August 31, 2025 | 2026 to 2025 | August 31, 2026 | August 31, 2025 | 2026 to 2025 | |||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||||||||||||
Industry vertical: | ||||||||||||||||||||||||||||||||
Technology and consumer electronics | $ | 603,512 | $ | 670,573 | (10.0) | % | $ | 1,862,845 | $ | 1,990,984 | (6.4) | % | ||||||||||||||||||||
Retail, travel and e-commerce | 662,612 | 622,822 | 6.4 | % | 1,952,770 | 1,790,502 | 9.1 | % | ||||||||||||||||||||||||
Communications and media | 381,905 | 411,229 | (7.1) | % | 1,168,176 | 1,175,192 | (0.6) | % | ||||||||||||||||||||||||
Banking, financial services and insurance | 432,463 | 384,449 | 12.5 | % | 1,286,456 | 1,133,657 | 13.5 | % | ||||||||||||||||||||||||
Healthcare | 145,173 | 174,106 | (16.6) | % | 475,872 | 540,297 | (11.9) | % | ||||||||||||||||||||||||
Other | 228,014 | 220,074 | 3.6 | % | 670,424 | 642,214 | 4.4 | % | ||||||||||||||||||||||||
Total | $ | 2,453,679 | $ | 2,483,253 | (1.2) | % | $ | 7,416,543 | $ | 7,272,846 | 2.0 | % | ||||||||||||||||||||
We generate revenue by delivering our technology and services to our clients categorized in the above industry verticals. Our solutions focus on customer engagement, process optimization, and back-office automation.
Our revenue decreased by 1.2% for the three months ended August 31, 2026, compared to the three months ended August 31, 2025. The decrease in revenue resulted primarily from decreases in our healthcare, technology and consumer electronics, and communications and media verticals partially offset by increases in revenue across our banking, financial services and insurance, retail, travel and e-commerce, and other verticals. Foreign currency exchange rates had a negative impact of $16.2 million, or 0.7%, on revenue for the period. The unfavorable foreign currency rate impact on revenue was primarily due to the weakening of the Turkish lira against the U.S. dollar.
Our revenue increased by 2.0% for the nine months ended August 31, 2026, compared to the nine months ended August 31, 2025. The increase in revenue resulted primarily from increases in revenue across our banking, financial services and insurance, retail, travel and e-commerce, and other verticals partially offset by decreases in our healthcare, technology and consumer electronics, and communications and media verticals. Foreign currency exchange rates had a positive impact of $95.7 million, or 1.3%, on revenue growth for the period. The favorable foreign currency rate impact on revenue was primarily due to the strengthening of the euro against the U.S. dollar.
For the three months ended August 31, 2026, revenue in our technology and consumer electronics vertical decreased by 10.0%, primarily due to decreases in revenue for certain larger clients in the vertical. Revenue in our retail, travel and e-commerce vertical increased by 6.4%, primarily due to increases in revenue across the majority of clients in this vertical, including our largest clients in the vertical. Revenue in our communications and media vertical decreased by 7.1%, primarily due to a decrease in revenue with a
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larger client in the vertical partially offset by increases in revenue from certain clients in the vertical. Revenue in our banking, financial services and insurance vertical increased by 12.5%, primarily due to increases in revenue from certain clients in the vertical, including several of our largest clients in the vertical. Revenue in our healthcare vertical decreased by 16.6%, primarily due to decreases in revenue from several larger clients in the vertical. Revenue in our other vertical increased by 3.6%, primarily related to increases in revenue related to several larger clients in the vertical.
For the nine months ended August 31, 2026, revenue in our technology and consumer electronics vertical decreased by 6.4%, primarily due to decreases in revenue from certain larger clients in the vertical, partially offset by increases in revenue from certain clients in the vertical. Revenue in our retail, travel and e-commerce vertical increased by 9.1%, primarily due to increases in revenue across the majority of clients in this vertical, including our largest clients. Revenue in our communications and media vertical decreased by 0.6%, primarily due to a decrease in revenue with a larger client in the vertical substantially offset by increases in revenue with the majority of clients in the vertical. Revenue in our banking, financial services and insurance vertical increased by 13.5%, primarily due to increases in revenue from the majority of clients in the vertical, including several larger clients in the vertical. Revenue in our healthcare vertical decreased by 11.9%, primarily due to decreases in revenue from several larger clients in the vertical. Revenue in our other vertical increased by 4.4%, primarily related to increases in revenue related to several larger clients in the vertical.
Cost of Revenue, Gross Profit and Gross Margin Percentage
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
August 31, 2026 | August 31, 2025 | 2026 to 2025 | August 31, 2026 | August 31, 2025 | 2026 to 2025 | |||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||||||||||||
Cost of revenue | $ | 1,604,800 | $ | 1,628,246 | (1.4) | % | $ | 4,894,658 | $ | 4,713,792 | 3.8 | % | ||||||||||||||||||||
Gross profit | $ | 848,879 | $ | 855,007 | (0.7) | % | $ | 2,521,885 | $ | 2,559,054 | (1.5) | % | ||||||||||||||||||||
Gross margin % | 34.6 | % | 34.4 | % | 34.0 | % | 35.2 | % | ||||||||||||||||||||||||
Cost of revenue consists primarily of personnel costs. Gross margins can be impacted by resource location, client mix and pricing, additional lead time for programs to be fully scalable, and transition and initial set-up costs.
Our cost of revenue decreased by 1.4% in the three months ended August 31, 2026, compared to the three months ended August 31, 2025. Cost of revenue decreased $26.1 million, or 1.6%, due to changes in foreign currency exchange rates, which was caused primarily by the weakening of the Turkish lira and several other currencies against the U.S. dollar. Additionally, lower wages and reduced temporary contract service costs contributed to the decrease in cost of revenue. These decreases were partially offset by higher restructuring expenses, primarily related to severance and other employee-related costs resulting from the Company's recent cost reduction initiatives.
Our cost of revenue increased by 3.8% in the nine months ended August 31, 2026, compared to the nine months ended August 31, 2025. Cost of revenue increased $36.6 million, or 0.8%, due to changes in foreign currency exchange rates, which was caused primarily by the strengthening of the euro and several other currencies against the U.S. dollar. Cost of revenue also increased due to an increase in restructuring expenses, primarily related to severance expenses and employee-related costs as a result of the Company’s recent cost reduction initiatives. Further increases in cost of revenue resulted from wage increases across certain countries.
Our gross profit decreased by 0.7% in the three months ended August 31, 2026, compared to the three months ended August 31, 2025, primarily due to decreases in gross profit associated with underlying business. These decreases were mainly due to increases in cost of revenue associated with severance and employee-related costs as previously described. The decreases were partially offset by a net favorable foreign currency impact of $9.9 million on gross profit. Our gross margin percentage for the three months ended August 31, 2026 increased to 34.6% from 34.4% in the prior fiscal year period due to the changes to revenue and gross profit previously described.
Our gross profit decreased by 1.5% in the nine months ended August 31, 2026, compared to the nine months ended August 31, 2025, primarily due to the increases in cost of revenue associated with severance and employee-related costs as previously described. The decreases were partially offset by a net favorable foreign currency impact of $59.1 million on gross profit. Our gross margin percentage for the nine months ended August 31, 2026 decreased to 34.0% from 35.2% in the prior fiscal year period due to the changes to revenue and gross profit previously described.
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Selling, General and Administrative Expenses
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
August 31, 2026 | August 31, 2025 | 2026 to 2025 | August 31, 2026 | August 31, 2025 | 2026 to 2025 | |||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | 709,184 | $ | 708,023 | 0.2 | % | $ | 2,168,210 | $ | 2,094,858 | 3.5 | % | ||||||||||||||||||||
Percentage of revenue | 28.9 | % | 28.5 | % | 29.2 | % | 28.8 | % | ||||||||||||||||||||||||
Our selling, general and administrative expenses consist primarily of support personnel costs such as salaries, commissions, bonuses, employee benefits, and share-based compensation costs. Selling, general and administrative expenses also include the cost of our global delivery facilities, utility expenses, hardware and software costs related to our technology infrastructure, legal and professional fees, depreciation on our technology and facility equipment, amortization of intangible assets resulting from acquisitions, marketing expenses, and acquisition-related, integration and restructuring expenses.
Our selling, general and administrative expenses increased by 0.2% in the three months ended August 31, 2026, compared to the three months ended August 31, 2025. Contributing to the increase over the prior year period was an increase of $5.7 million related to restructuring expenses, which was offset by a reduction of $6.2 million due to changes in foreign currency exchange rates. As a percentage of revenue, selling, general and administrative expenses increased from 28.5% in the third fiscal quarter of 2025 to 28.9% in the third fiscal quarter of 2026, primarily due to the changes previously described.
Our selling, general and administrative expenses increased by 3.5% in the nine months ended August 31, 2026, compared to the nine months ended August 31, 2025. Contributing to the increase over the prior year period was an increase of $30.6 million due to changes in foreign currency exchange rates, $24.0 million related to restructuring expenses and $8.4 million related to the loss on held for sale of a non-core business. As a percentage of revenue, selling, general and administrative expenses increased from 28.8% in the third fiscal quarter of 2025 to 29.2% in the third fiscal quarter of 2026, primarily due to the changes previously described.
Impairment Charge
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
August 31, 2026 | August 31, 2025 | 2026 to 2025 | August 31, 2026 | August 31, 2025 | 2026 to 2025 | |||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||||||||||||
Impairment charge | $ | 1,050,000 | $ | — | NM | $ | 1,050,000 | $ | — | NM | ||||||||||||||||||||||
Percentage of revenue | 42.8 | % | — | % | 14.2 | % | — | % | ||||||||||||||||||||||||
NM: Not Meaningful - Change greater than 100%
During the three and nine months ended August 31, 2026, we recorded a non-cash goodwill impairment charge of $1,050.0 million. No such charges were recorded during the three and nine months ended August 31, 2025. See Note 5—Balance Sheet Components to the consolidated financial statements for more information.
Operating Income (Loss)
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
August 31, 2026 | August 31, 2025 | 2026 to 2025 | August 31, 2026 | August 31, 2025 | 2026 to 2025 | |||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||||||||||||
Operating income (loss) | $ | (910,305) | $ | 146,984 | NM | $ | (696,325) | $ | 464,196 | NM | ||||||||||||||||||||||
Operating margin | (37.1) | % | 5.9 | % | (9.4) | % | 6.4 | % | ||||||||||||||||||||||||
NM: Not Meaningful - Change greater than 100%
Our operating income (loss) decreased during the three and nine months ended August 31, 2026, compared to the three and nine months ended August 31, 2025, primarily due to the non-cash goodwill impairment charge.
Our operating margin decreased during the three and nine months ended August 31, 2026, compared to the three and nine months ended August 31, 2025, primarily due to the non-cash goodwill impairment charge.
36
Interest Expense and Finance Charges, Net
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
August 31, 2026 | August 31, 2025 | 2026 to 2025 | August 31, 2026 | August 31, 2025 | 2026 to 2025 | |||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||||||||||||
Interest expense and finance charges, net | $ | 64,856 | $ | 72,014 | (9.9) | % | $ | 208,247 | $ | 220,414 | (5.5) | % | ||||||||||||||||||||
Percentage of revenue | 2.6 | % | 2.9 | % | 2.8 | % | 3.0 | % | ||||||||||||||||||||||||
Amounts recorded in interest expense and finance charges, net consist primarily of interest expense on our senior notes, interest expense on term loan borrowings under our senior credit facility, interest expense on borrowings under our accounts receivable securitization facility (the “Securitization Facility”), and, for the three and nine months ended August 31, 2025, interest expense on the promissory note issued by us to certain sellers in connection with our combination with Webhelp (the “Sellers’ Note”).
The decrease in interest expense and finance charges, net for the three months ended August 31, 2026, compared to the three months ended August 31, 2025, was primarily due to lower interest expense due to less debt outstanding during the period in comparison to the prior year. This decrease in interest expense included $8.8 million of interest expense associated with the Sellers’ Note in the prior year period that did not recur in the current period as it was repaid in the fourth quarter of fiscal year 2025, partially offset by a net increase in interest expense associated with our remaining borrowings in comparison to the prior year period, primarily related to our term loan borrowings.
The decrease in interest expense and finance charges, net for the nine months ended August 31, 2026, compared to the nine months ended August 31, 2025, was primarily due to lower interest expense due to less debt outstanding during the period in comparison to the prior year. This decrease in interest expense included $25.0 million of interest expense associated with the Sellers’ Note in the prior year period that did not recur in the current period as it was repaid in the fourth quarter of fiscal year 2025, partially offset by an increase of $6.3 million associated with our early redemption of $600.0 million principal amount of our senior notes due in August 2026 and a net increase in interest expense associated with our remaining borrowings, primarily related to our term loan borrowings.
Other Expense (Income), Net
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
August 31, 2026 | August 31, 2025 | 2026 to 2025 | August 31, 2026 | August 31, 2025 | 2026 to 2025 | |||||||||||||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||||||||||||||||
Other expense (income), net | $ | 4,603 | $ | (36,474) | NM | $ | (23,014) | $ | (20,175) | 14.1 | % | |||||||||||||||||||||
Percentage of revenue | 0.2 | % | (1.5) | % | (0.3) | % | ||||||||||||||||||||||||||
Next expected filings
- ~2027-01-28 10-K expected by 2027-01-29 (in 113 days)
- ~2027-04-02 10-Q expected by 2027-04-07 (in 177 days)
- ~2027-07-01 10-Q expected by 2027-07-06 (in 267 days)
- ~2027-10-06 10-Q expected by 2027-10-11 (in 364 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-07 10-Q Quarterly Report
- 2026-09-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-09-18 8-K Officer/Director Change
- 2026-07-24 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-07-02 10-Q Quarterly Report
- 2026-06-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-01 8-K Officer/Director Change
- 2026-04-03 10-Q Quarterly Report
- 2026-03-27 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-03-24 8-K Earnings Release; Financial Statements and Exhibits
- 2026-03-23 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-02-24 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-02-13 8-K Other Events; Financial Statements and Exhibits
- 2026-01-28 10-K Annual Report
- 2026-01-13 8-K Earnings Release; Financial Statements and Exhibits