Core Insights - TTEC Holdings Inc. has been awarded the 2025 Microsoft Dynamics 365 Service Partner of the Year Award, recognizing its excellence in AI-enabled customer experience solutions [1][2][3] - The award highlights TTEC Digital's commitment to innovation and successful implementation of customer solutions using Microsoft technology, showcasing its role in driving digital transformation [3][4] - TTEC Digital has also been selected for the 2025/26 Microsoft Inner Circle for AI Business Solutions, marking its tenth consecutive year in this elite group, which includes only the top 1% of Microsoft partners globally [4] Company Overview - TTEC Holdings, Inc. is a global leader in customer experience technology and services, focusing on AI-enabled digital solutions that enhance customer interactions across various channels [6] - The company's TTEC Digital division specializes in designing and operating omnichannel contact center technology, CRM, AI, and analytics solutions, while TTEC Engage provides AI-enhanced customer engagement and support services [6] - Founded in 1982, TTEC has consistently achieved high satisfaction scores from clients, customers, and employees, operating on six continents to deliver exceptional customer experiences [6]

Core Insights - The future of customer experience (CX) is rapidly evolving, with organizations needing to adapt to technological advancements and rising customer expectations to maintain satisfaction and loyalty [2][3]. CX Trends for 2026 - **Agentic AI Goes Mainstream**: AI technology is transitioning from pilot projects to full-scale production, with success reliant on trustworthy data, transparent models, and robust security measures [6]. - **Tech Stack Clarity Becomes Critical**: Fragmented CX systems are detrimental to performance; consolidating platforms and aligning technology with desired outcomes enhances agility and measurable results [6]. - **Personalization Evolves into Precision**: Customers now demand hyper-personalized, real-time interactions, which require unified, high-quality data to anticipate their needs effectively [6]. - **Empathy Gets Re-imagined**: A balance between AI efficiency and human empathy is essential to ensure that customer interactions are caring, consistent, and focused on resolution [6]. - **Resilience Defines the Future of CX**: Economic fluctuations, workforce volatility, and fraud necessitate adaptive CX models supported by intelligent automation and flexible global delivery [6]. Company Overview - TTEC Holdings, Inc. is a leading global innovator in CX technology and services, specializing in AI-enabled digital solutions. The company provides outcome-based solutions that enhance customer interactions across various channels and improve the overall customer journey [7].

Financial Data and Key Metrics Changes - In Q3 2025, revenue was $519 million, a decrease of 1.9% from $529 million in the prior year [21] - Adjusted EBITDA was $43 million, or 8.4% of revenue, down from $50 million, or 9.5% [22] - Operating income decreased to $29 million, or 5.6% of revenue, compared to $34 million, or 6.4% [22] - Net debt was reduced by $119 million year-over-year, totaling $813 million [32] Business Segment Data and Key Metrics Changes - In the Engage segment, Q3 revenue decreased by 4% to $397 million, with operating income at $17 million, or 4.3% of revenue [22] - The Digital segment saw a revenue increase of 5.4% to $122 million, but operating income decreased to $12 million, or 9.5% of revenue [26] - Recurring revenue in the Digital segment declined by 9.8% due to the end-of-life status of a premise contact center solution [26] Market Data and Key Metrics Changes - The Engage segment's backlog is $1.66 billion, representing 102% of the 2025 revenue guidance midpoint, up from 99% in the prior year [25] - The Digital backlog is $444 million, or 95% of the 2025 revenue guidance midpoint, an increase from 92% year-over-year [30] Company Strategy and Development Direction - The company is focusing on AI-enabled customer experience (CX) solutions, blending technology with human interaction to drive growth [4][5] - Investments are being made in expanding executive leadership and enhancing AI capabilities to improve operational effectiveness [12][24] - The company aims to transition from traditional contact center solutions to AI-led consulting and journey orchestration [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to historical growth rates and margins despite current financial metrics not reflecting business momentum [19] - The company anticipates solid bottom-line growth in Q4 2025, driven by healthcare business and new client growth [34] - Management highlighted the importance of adapting to market dynamics and leveraging partnerships with hyperscalers for innovation [13][34] Other Important Information - Free cash flow was negative $10 million in Q3 2025, an improvement from negative $100 million in the prior year [30] - The company has approximately 1,700 full-time engineers focused on AI projects, indicating strong capabilities in this area [46] Q&A Session Questions and Answers Question: Can you walk through the significance of your role in the healthcare opportunity and the investments made? - The investments made in Q3 are expected to lead to double-digit growth in the healthcare seasonal business year-over-year, establishing strong client relationships for future growth [38][39] Question: What does the net economic scenario look like when integrating AI into client experiences? - Integrating AI is expected to drive positive economic impacts, allowing for outcome-based pricing that enhances margins by reducing labor costs [41][42] Question: Do you have the sales and delivery headcount needed for the shift into AI consulting? - The company has approximately 1,700 engineers with AI backgrounds and is confident in its capabilities to meet client demands [46][49] Question: How will you further improve free cash flow given the current revenue dynamics? - The focus is on debt reduction, improving working capital, and managing capital expenditures to enhance free cash flow generation [51][53]

Core Viewpoint - TTEC Holdings reported quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.25 per share, representing a -52.00% earnings surprise [1] - The company posted revenues of $519.14 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.62% but down from $529.43 million year-over-year [2] Financial Performance - TTEC's earnings of $0.12 per share compare to $0.11 per share a year ago, indicating slight year-over-year growth [1] - The company has surpassed consensus revenue estimates three times over the last four quarters [2] - TTEC shares have declined approximately 34.5% year-to-date, contrasting with the S&P 500's gain of 15.6% [3] Future Outlook - The company's earnings outlook will be influenced by management's commentary during the earnings call [3] - Current consensus EPS estimate for the upcoming quarter is $0.33 on revenues of $540.43 million, and for the current fiscal year, it is $1.08 on revenues of $2.09 billion [7] - The estimate revisions trend for TTEC was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which TTEC belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Third quarter 2025 revenue was $519.1 million, a 1.9% decrease from $529.4 million in the prior year[7] - Net loss for the third quarter 2025 was $11.1 million, or negative 2.1% of revenue, compared to a net loss of $5.9 million in the prior year[1] - Adjusted EBITDA for the third quarter 2025 was $43.4 million, or 8.4% of revenue, down from $50.3 million, or 9.5% of revenue in the prior year[5] - Non-GAAP income from operations for the third quarter 2025 was $28.9 million, or 5.6% of revenue, down from $34.1 million, or 6.4% of revenue in the prior year[7] - Revenue for the three months ended September 30, 2025, was $519.143 million, a decrease of 1.4% from $529.427 million in the same period of 2024[30] - Operating expenses totaled $506.814 million for the three months ended September 30, 2025, down from $516.538 million in the prior year, reflecting a reduction of 1.4%[30] - Net loss attributable to TTEC stockholders for the three months ended September 30, 2025, was $13.371 million, compared to a net loss of $21.122 million in the same period of 2024[30] - The income from operations margin for the three months ended September 30, 2025, was 2.4%, consistent with the margin from the same period in 2024[30] - TTEC Digital segment revenue for the three months ended September 30, 2025, was $121.916 million, an increase of 5.4% from $115.669 million in the same period of 2024[32] - TTEC Engage segment revenue for the three months ended September 30, 2025, was $397.227 million, a decrease of 4.0% from $413.758 million in the same period of 2024[32] - Revenue for Q3 2025 was $519,143, a decrease of 1.4% from $529,427 in Q3 2024[38] - Non-GAAP Income from Operations for Q3 2025 was $28,883, down 15.3% from $34,068 in Q3 2024[38] - Adjusted EBITDA for Q3 2025 was $43,355, representing a margin of 8.4%, compared to 9.5% in Q3 2024[38] - Non-GAAP EPS for Q3 2025 was $0.12, an increase from $0.11 in Q3 2024[39] - Free Cash Flow for Q3 2025 was $(9,590), an improvement from $(100,160) in Q3 2024[39] - TTEC Engage segment reported a Non-GAAP Income from Operations of $17,260 for Q3 2025, compared to $19,657 in Q3 2024[41] - TTEC Digital segment reported a Non-GAAP Income from Operations of $11,623 for Q3 2025, down from $14,411 in Q3 2024[41] Cash Flow and Assets - Cash flow from operations improved to $4.2 million in the third quarter 2025, compared to a negative $91.4 million in the same quarter of 2024[7] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $118.505 million, compared to a net cash outflow of $57.732 million in the same period of 2024[36] - Net cash provided by operating activities for Q3 2025 was $4,204, compared to $(91,377) in Q3 2024[39] - Cash and cash equivalents at the end of the period were $73.508 million, a decrease from $84.991 million at the beginning of the period[36] - Total assets as of September 30, 2025, were $1.682 billion, down from $1.753 billion as of December 31, 2024[34] Guidance and Future Plans - Full year 2025 revenue guidance is set between $2,064 million and $2,114 million, with a midpoint of $2,089 million[15] - Non-GAAP adjusted EBITDA for full year 2025 is expected to be between $215 million and $235 million, with a midpoint of $225 million[15] - TTEC plans to extend its Credit Facility term through November 23, 2027, enhancing financial flexibility[11] Innovation and Market Expansion - The company deployed AI in over a hundred programs across numerous customers, indicating a strong focus on innovation and market expansion[3] Tax Rate - The effective tax rate for the three months ended September 30, 2025, was 21,798%, significantly higher than the effective tax rate of (98.1)% in the same period of 2024[30] Restructuring Charges - The company incurred restructuring charges of $1,771 in Q3 2025, compared to $1,002 in Q3 2024[38]

Financial Performance - TTEC's Q3 2025 revenue was $519.1 million, a decrease of $10.3 million or 1.9% compared to Q3 2024, with TTEC Digital contributing $121.9 million (23%) and TTEC Engage $397.2 million (77%) to total revenue [160]. - TTEC Digital segment revenue increased by $6.2 million or 5.4% to $121.9 million in Q3 2025, while TTEC Engage segment revenue decreased by $16.5 million or 4.0% to $397.2 million [164]. - Operating income for TTEC Digital decreased to $4.9 million (4.0% margin) in Q3 2025 from $7.5 million (6.5% margin) in Q3 2024, primarily due to lower margins in recurring business [175]. - TTEC Engage's operating income increased to $7.5 million (1.9% margin) in Q3 2025 from $5.4 million (1.3% margin) in Q3 2024, attributed to lower impairment expenses [177]. - For the nine months ended September 30, 2025, TTEC Digital revenue was $343.7 million, a slight decrease of $0.4 million or 0.1%, while operating income increased by $5.4 million or 32.0% to $22.1 million [182]. - TTEC Engage revenue for the nine months ended September 30, 2025 was $1.2 billion, a decrease of $72.8 million or 5.6%, with operating income improving to $33.3 million from a loss of $205.6 million [184]. Interest and Other Income - Interest income for Q3 2025 increased to $0.5 million from $0.3 million in Q3 2024, while interest expense decreased to $16.6 million from $21.7 million due to lower utilization and rates [178]. - Other income for Q3 2025 was $3.8 million, a significant increase from an expense of $1.0 million in Q3 2024, including a $1.7 million gain from an aged VAT receivable recovery [179]. Taxation - The effective tax rate for Q3 2025 was 21,930.3%, compared to (98.1)% in Q3 2024, influenced by income distribution across jurisdictions and foreign currency gains [180]. - The effective tax rate for the nine months ended September 30, 2025, was 189.9%, compared to (26.4)% for the same period in 2024 [188]. Cash Flow and Capital Expenditures - Operating cash flows for the nine months ended September 30, 2025, were $118.5 million, a significant increase from $(57.7) million in 2024 [189][195]. - Cash and cash equivalents decreased to $73.5 million as of September 30, 2025, down from $85.0 million at the end of 2024 [194]. - Free cash flow for the nine months ended September 30, 2025, was $92.1 million, compared to $(94.2) million for the same period in 2024 [198]. - Net cash flows used in investing activities decreased to $21.9 million for the nine months ended September 30, 2025, from $36.3 million in 2024 [196]. - Net cash flows provided by/(used in) financing activities were $(102.9) million for the nine months ended September 30, 2025, compared to $14.8 million in 2024, primarily due to a $(122.5) million net change in the line of credit [197]. - Total capital expenditures in 2025 are expected to be between 1.8% and 2.0% of revenue, with 55% allocated for business growth and 45% for maintenance [202]. - The company anticipates that the amount of capital required over the next 12 months will depend on investment levels in infrastructure and potential acquisitions [203]. Client Relationships - The company has long-term relationships with its top five clients, which accounted for 31.8% of consolidated revenue for the three months ended September 30, 2025 [204]. - Some contracts with the five largest clients expire between 2026 and 2029, but the company has historically renewed most contracts [205]. - One client represented more than 10% of total revenue during the nine months ended September 30, 2025 and 2024 [204]. - The five largest clients accounted for 31.8% and 31.5% of consolidated revenue for the three months ended September 30, 2025 and 2024, respectively [204]. - For the nine months ended September 30, 2025 and 2024, the five largest clients represented 31.0% and 32.6% of consolidated revenue, respectively [204]. - Long-term relationships with top five clients range from 6 to 23 years, with multiple contract renewals completed [204]. - Contracts with the five largest clients expire between 2026 and 2029, with many clients having multiple contracts with different expiration dates [205]. - Historical renewal rate of contracts with largest clients is high, but future renewals are not guaranteed [205].

Financial Performance - Revenue for Q3 2025 was $519.1 million, a decrease of 1.9% from $529.4 million in the prior year [7] - Net loss was $11.1 million, representing a negative 2.1% of revenue, compared to a net loss of $18.968 million in the prior year [6][28] - Adjusted EBITDA was $43.4 million, or 8.4% of revenue, down from $50.3 million, or 9.5% of revenue in the prior year [5][8] Segment Performance - TTEC Digital reported revenue of $121.9 million, an increase of 5.4% compared to $115.7 million in the prior year, but operating income decreased to $4.9 million [16] - TTEC Engage generated revenue of $397.2 million, a decrease of 4.0% from $413.8 million in the prior year, with operating income increasing to $7.5 million [16] Business Outlook - The company reiterated its full-year 2025 guidance, projecting revenue between $2.064 billion and $2.114 billion, with a midpoint of $2.089 billion [14] - Non-GAAP adjusted EBITDA for the full year is expected to be between $215 million and $235 million, with a midpoint of $225 million [14] - The company is confident in the profitability growth for TTEC Engage in Q4 2025, driven by higher healthcare seasonality [13] Cash Flow and Balance Sheet - Cash flow from operations in Q3 2025 was $4.2 million, a significant improvement from a negative $91.4 million in Q3 2024 [15] - As of September 30, 2025, TTEC had cash and cash equivalents of $73.5 million and total debt of $886.0 million, resulting in a net debt position of $812.5 million [15][33] Management Commentary - The CEO highlighted that the decline in profitability was anticipated due to upfront expenses for growth and seasonal ramps in healthcare [2] - The company is focusing on a digital-first approach that integrates AI and analytics to enhance customer experience [3]

Core Insights - TTEC Holdings, Inc. will release its earnings results on November 6, 2025, after market close, followed by a live webcast and conference call on November 7, 2025, at 8:30 a.m. ET [1][2] Company Overview - TTEC Holdings, Inc. is a leading global innovator in customer experience (CX) technology and services, specializing in AI-enabled digital CX solutions. The company serves both iconic and disruptive brands, providing outcome-based solutions that enhance the entire customer journey across various virtual interaction channels [3] - TTEC's business segments include TTEC Digital, which focuses on designing and operating omnichannel contact center technology, CRM, AI, and analytics solutions, and TTEC Engage, which delivers AI-enabled customer engagement, acquisition, tech support, back office, and fraud prevention services [3] - Founded in 1982, TTEC has established a strong reputation for customer experience excellence, achieving high satisfaction scores from clients, customers, and employees globally [3]

Core Insights - TTEC Digital has been recognized as a member of the Microsoft Inner Circle for the 2025-2026 period, highlighting its outstanding sales achievements and innovation in AI-enabled customer experience solutions [1][2][4] - This marks the tenth consecutive year that TTEC Digital has received this recognition, underscoring its long-term collaboration with Microsoft and commitment to transforming business outcomes through AI [2][3] Company Achievements - TTEC Digital ranks among the top partners in Microsoft's AI Business Solutions global network, reflecting its high-level performance in delivering valuable solutions [1][4] - The company has previously achieved multiple Microsoft Solutions Partner designations, including Business Applications & Modern Work, Data & AI, and Digital Apps & Innovation, along with accolades such as Microsoft Dynamics 365 Marketing Partner of the Year [4] Strategic Collaboration - TTEC Digital collaborates closely with Microsoft to enhance customer engagement by integrating strategic insights with advanced technology, focusing on AI-driven solutions [3][4] - Inner Circle partners, including TTEC Digital, have opportunities to engage with Microsoft senior leaders, discuss strategies, and collaborate on best practices, which can further enhance their service offerings [3][4] Industry Impact - The recognition of TTEC Digital as an Inner Circle partner emphasizes the importance of trusted collaboration in accelerating AI-driven transformation across industries [4] - TTEC's innovative solutions aim to modernize operations, streamline decision-making, and drive sustainable growth for organizations [4]

Core Insights - TTEC Holdings Inc. has announced a partnership between TTEC Digital and VoxEQ to enhance customer experience technology through AI-powered solutions [1] Company Overview - TTEC Holdings Inc. is recognized as a leading global innovator in customer experience technology and services, particularly focusing on AI-enabled customer experience [1] Partnership Details - The collaboration aims to integrate TTEC Digital's SmartApps Cloud with VoxEQ, providing cost-effective fraud prevention solutions for organizations of all sizes [1]