What Happened?
Shares of customer experience solutions provider Concentrix (NASDAQ: CNXC) fell 7.5% in the morning session after the company reported mixed second-quarter 2025 results, with a significant drop in profitability overshadowing a slight revenue beat.
While the technology and services firm's revenue of $2.42 billion narrowly surpassed analysts' expectations, its net income saw a steep 37% year-over-year decline to $42.1 million. This resulted in earnings per share (EPS) of $0.63, a sharp fall from $0.98 in the same quarter last year. Even on an adjusted basis, which excludes certain items, non-GAAP EPS of $2.70 missed the consensus estimate of $2.76. The company attributed the drop in profitability partly to temporary program pauses and investments made ahead of anticipated growth in the second half of the year.
Despite raising its full-year revenue forecast, the significant earnings miss and contracting margins have spooked investors, raising concerns about the company's near-term profitability.
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What The Market Is Telling Us
Concentrix’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 38% on the news that the company reported impressive first quarter 2025 results which beat analysts' EPS and EBITDA expectations. Adjusting for currency swings, revenue managed to inch up a bit, with momentum driven by demand for the company's AI offerings, and this could partly be responsible for the improved market optimism. Adding to the positive aspect, it slightly lifted its revenue guidance for the full year, given the outperformance recorded during the quarter. Overall, this quarter had some key positives.
Concentrix is up 18.8% since the beginning of the year, but at $51.81 per share, it is still trading 31.5% below its 52-week high of $75.58 from August 2024.
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