Concentrix Corporation (NASDAQ:CNXC) Q2 2023 Earnings Call Transcript

Christopher Caldwell: Yes, Joe. No problem. Just for clarity. We won this project back, and I’m sad to say, in sort of Q3 of last year. And the original plan from the client was to kind of get to full production in Q2, Q3 of this year. And the reality is, as we staffed up fairly heavily. And the work for it started trickling in, and we started doing work for it, and we continue to do work for it. But the big bank for lack of a better term, when they wanted all the scrum teams and all the work done just continue to get pushed out and various reasons, they were doing a restructuring, they were aligning to a new technology stack, et cetera, et cetera, et cetera. And really, it within the last couple of weeks that they sat down and said, hey, we need to continue this.

We need to get this done. We need to continue to support the stock, but we just are going to push out the budget for sort of large-scale ramp and implementation that we both were expecting for sort of our Q3 and Q4. So it’s not canceled. We are getting revenue from it, but it is a much lower run rate. And it will frankly, push the project out further, but at this much lower run rate versus what we had expected. So that does have a fairly big impact to us as we called it out from a size-wise perspective for the back half of this year. I do not expect that in the front half of next year, it will come back in a meaningful way. I think it will continue to kind of slowly increase as the client kind of aligns budgets, and it comes back on to be a priority.

But it’s absolutely not canceled, it’s still there, and we’re still billing for it just at a much reduced rate.

Andre Valentine: Yes. And as we talk about the sequential growth that we expect in Catalyst over the back half of the year, it is not really a major contributor to that at all at this point in our expectations. What we are seeing are some nice smaller wins that are helping catalysts for a stabilized revenue and then begin to grow as we expect it to. It actually grew slightly sequentially in Q2, and we expect that to accelerate a bit in Q3 and even more in Q4. But again, not based on that large contract but on a bunch of other smaller wins across the verticals. .

Joseph Vafi: Great. Thanks, Chris. Thanks, Andre.

Christopher Caldwell: Thank you very much.

Operator: Thank you. And I’d now like to turn the call back over to Chris Caldwell for any closing remarks.

Christopher Caldwell: Great. Thank you very much, everybody, for joining us today. We always very much appreciate your interest in Concentrix, and we’re committed to maintaining strong profitability and cash flow generation, especially when executing our strategic objectives. We look forward to talking to you next quarter. Thank you very much, everybody. .

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.