Concentrix Corporation (NASDAQ:CNXC) Q4 2023 Earnings Call Transcript

Chris Caldwell: Yeah, for sure. So we’ve got a lot of POCs in place with clients, well over 140, and it’s sort of growing on a weekly, monthly basis. And what we’re finding is that clients are very hesitant, not to say that this won’t change, but very hesitant to have fully automated GenAI solutions, I’ll call it in the while, dealing with customers with no human intervention or no human checks. And there’s a lot of reasons for that, which we can go through, but that’s still the overwhelming sentiment. And so where people are looking at it to drive the best benefit is where it’s hoping whether their staff, our staff, the enterprise staff, be more productive and being able to deliver a differentiated personal service to the customers that they’re engaging with.

That’s where we see some of the big push. And every time we talk about sort of some things that are fully automated, we tend to get the clients are saying, no, that’s not where we’re at right at the moment. That’s well down the pipe. And so we’re not only building the tools internally for ourselves, because we’re seeing the benefits, but that’s where we’re also seeing clients focus their efforts is kind of making themselves better and more productive than sort of complete automation work.

Vincent Colicchio: Okay, thank you.

Chris Caldwell: Thanks, Vin.

Operator: Thank you. One moment for the next question. And our next question will be coming from Divya Goyal of Scotiabank. Your line is open.

Divya Goyal: Good afternoon, everyone. It’s a great quarter. I just wanted to build on to this AI question. So you talked about the proof of concepts that you’re deploying with the clients and trying to assess the productivity gains. Have you been and what sort of internal AI deployment are you looking at or considering? And do you think that can broadly bring the productivity gains within your organization and help you with an improved operating margin?

Chris Caldwell: Yeah, we do. I mean, we see a lot more tools that we can build internally to drive better productivity across our enterprise. And what we’re seeing is that where we can either get information, large quantities of information, like healthcare, like banking, wealth management, even very complicated tech support, even complex case management with travel and transportation, where we can take huge quantities of information and boil it down and put it into a personalized format and deliver it to a customer, there’s big, big productivity gains that we’re seeing within that base. Then if you look at how we can actually take the interactions and then analyze the interactions and provide feedback back to our game changers that the name we call our staff is that the productivity and uniqueness that we can deliver to each individual is something that frankly we couldn’t do in the past without scaling up significant number more of QA and labor and coaches and everything else that goes along with it.

So we see some really, really, really big benefits from that perspective. And in terms of complete automation, we talked about, we have a few that we put in place that are complete automated GenAI experiences. They’re on very, very small LLMs. They’re very controlled LLMs. And what we’re seeing is our revenue model is, we’re providing the managed services, we’re providing the data ingestion, we’re providing the management of those LLMs and the clients are very cautious about putting them on small transactional queues and really, really, really can fold in lockdowns and there’s no hallucinations. Nothing goes wrong. At the small cues, there’s not as much productivity that you get, but it’s definitely something that we’re continuing to push.

Divya Goyal: That’s helpful, Chris. Maybe I’ll ask another question. And I know you spoke about it at the time when you announced the Webhelp acquisition. But now that the company has been acquired for almost a quarter, and you’ve been obviously integrating it, what are some of the key growth geographies that you see? And then I wanted to further kind of understand how the broader LatAm integration going and do you see significant upside coming from the LatAm integration in the shorter term given the growth being discussed across LatAm region in general?

Chris Caldwell: Yeah for sure. So just to kind of set the stage a little bit. The Concentrix business was growing faster in Asia and Europe than it was in North America. And we felt that we were underperforming in Latin America. And one of the things that we were really excited about was that it gave us faster growth market in Europe with this Webhelp combination. We are combined with a very, very, very strong team within Latin America, and then our Asia team continues to perform very, very well as Andre called out. So from a faster growth geography perspective, think nearshore Europe, think Africa is kind of higher growth avenues for us and more profitable growth than what we were able to achieve since we just didn’t have that footprint.

From a Latin American combination perspective, very, very, very strong execution team in Latin America now with the combination of the two businesses coming together. And we see the growth not only in new opportunities taking from North America into the Latin American market but also in some domestic Latin American markets that we’ve historically done very well in and together we think we’ll do even better in. Think Brazil, think Colombia, think Peru, think a few other markets, Mexico, that we now have the ability to do both that local engagement business as well as the global business from the nearshore market within North America. So I’m quite excited from that perspective.

Divya Goyal: That’s great. If I may just ask…