TEP: CNXC warning re client behavioural change a clear negative

Research evidence excerpt

TEP: CNXC warning re client behavioural change a clear negative

EQUITY RESEARCH QUICK TAKE

RBC Europe Limited

Karl Green (Analyst)

Andrew Brooke (Analyst)

June 30, 2026

Teleperformance SE

CNXC warning re client behavioural change a clear negative

NXT PA: TEP | EUR 51.98 | Outperform | Speculative Risk | Price Target EUR 105.00

Sentiment: Negative

Overall: Key peer CNXC reported fiscal Q2 overnight with stock down >20% in after hours trading. By far the biggest negative in our

view is the comment that some clients have simply withdrawn customer support altogether in some areas. Clearly, as management

point out, such clients may reverse these decisions, but this is a clear example of a) the deep perceived commoditisation of CX

functions in some verticals, and b) client spending disarray at a time when agentic AI spend is reported to be out of control at

some high-profile clients.

Whilst we may lash ourselves to the mast of CNXC's solid FCF guidance during a storm like this, we think that TEP is likely to face

material stock price pressure in sympathy with its key peer. Too many investors see the sub-sector as uninvestable (hence our Spec.

Risk label), and the CNXC update is another reason for investors to postpone any form of constructive DD for the foreseeable future.

Key takeaways

• CNXC seeing increased financial pressure on clients "as they try and cope with their own investment needs and their current

operating environments". This has created demand for more automation solutions, but also increased the urgency of moving

work offshore and caused certain clients to prioritize spend across their client base, resulting in reduced spend overall.

• This has resulted in approximately 2% additional revenue headwind going into Q3 that CNXC sees enduring for the rest of the