Financial Data and Key Metrics Changes - For full year 2024, revenue decreased by 10.4% to $2.21 billion compared to $2.46 billion in the prior year, while adjusted EBITDA was $202 million or 9.2% of revenue, down from $272 million or 11% [30][31] - Fourth quarter 2024 revenue was $567 million, a decrease of 9.4% year-over-year but an increase of 7.2% sequentially, with adjusted EBITDA at $51 million or 9% of revenue [32][34] - Cash flow from operations was negative $59 million in 2024, compared to positive $145 million in the prior year, primarily impacted by the discontinuation of the accounts receivable factoring facility [47] Business Segment Data and Key Metrics Changes - In the Digital segment, fourth quarter revenue was $115 million, down from $119 million year-over-year, but recurring managed services grew by 10.2% [35][36] - The Engage segment saw fourth quarter revenue decrease by 10.8% to $452 million, although it increased by 9.4% sequentially [40] - For the full year, Engage revenue was $1.75 billion, down from $1.98 billion in the prior year, with operating income at $85 million or 4.9% of revenue [42][43] Market Data and Key Metrics Changes - The company reported a last twelve-month revenue retention rate of 82% for the Engage segment, down from 95% in the prior year, but adjusted for a large client, the rate is 87% [45] - The Digital backlog for the next twelve months is at $308 million, representing 66% of the 2025 revenue guidance midpoint, slightly down from 69% in the prior year [39] Company Strategy and Development Direction - The company is focused on a diversification strategy, expanding its geographic delivery footprint and client portfolio, and enhancing its digital customer experience (CX) value proposition [7][27] - The integration of AI into operations is a key focus, with over 150 projects underway in the digital segment and significant AI adoption among associates [62] - The company aims to be the leader in CX by combining human expertise with advanced technologies, emphasizing the importance of operational efficiency and profitability improvements in 2025 [26][27] Management's Comments on Operating Environment and Future Outlook - Management described 2024 as a transitional year, expressing constructive dissatisfaction with overall financial results despite progress in margin improvements [10][11] - The company anticipates a decline in Engage revenue of approximately 10% in 2025, primarily due to client decisions and foreign exchange headwinds, but expects to return to growth in the Digital segment [51][53] - Management expressed confidence in the actions taken in 2024 to improve profitability and operational efficiency, with expectations for sequential improvement in gross margins and EBITDA in 2025 [53][56] Other Important Information - Capital expenditures for 2024 were $45 million, or 2% of revenue, down from $68 million or 2.8% in the prior year, with a focus on geographic expansion [50] - The normalized tax rate for 2024 was 40.9%, significantly higher than the prior year's 22.7%, due to the impact of U.S. valuation allowances [50][51] Q&A Session Summary Question: How is AI being integrated into deals and what impacts does it have? - Management indicated that over 150 AI projects are underway, enhancing service quality and associate productivity, with AI tools being implemented across operations [60][62] Question: Can you clarify the 2025 revenue guidance and its assumptions? - Management explained that the guidance is based on sequential growth, with new enterprise clients expected to contribute significantly in the second half of 2025 [69][72] Question: What are the margin improvement strategies for 2025? - Management highlighted ongoing cost structure adjustments and the infusion of AI into operations as key drivers for margin improvement [74][78] Question: How does the offshore delivery impact margins? - Management noted that the offshore mix improved by 300 basis points in 2024 and is expected to continue growing, but margin expansion is more heavily influenced by operational improvements [96][98] Question: How confident is the company in the second half of 2025? - Management expressed high confidence in forecasting revenue for the second half of 2025 based on the onboarding cycle of new clients and existing pipeline visibility [100][102]

TTEC Holdings, Inc. (NASDAQ:TTEC) Q4 2024 Earnings Conference Call February 28, 2024 8:30 AM ET Company Participants Bob Belknapp - Group VP, Corporate Finance Ken Tuchman - Chairman and CEO Kenny Wagers - CFO Conference Call Participants George Sutton - Craig-Hallum Maggie Nolan - William Blair Cassie Chan - Bank of America Operator Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you, and please continue to stand by. Welcome to TTEC Holdings, In ...

Company Performance - TTEC Holdings reported quarterly earnings of $0.19 per share, missing the Zacks Consensus Estimate of $0.21 per share, and down from $0.37 per share a year ago, representing an earnings surprise of -9.52% [1] - The company posted revenues of $567.44 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.27%, and down from $626.18 million year-over-year [2] - TTEC has not surpassed consensus EPS estimates over the last four quarters and has topped consensus revenue estimates only once during the same period [2] Stock Performance - TTEC shares have declined approximately 26.5% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $540.9 million, and for the current fiscal year, it is $0.99 on revenues of $2.2 billion [7] Industry Outlook - The Technology Services industry, to which TTEC belongs, is currently in the top 30% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact TTEC's stock performance [5]

Revenue Performance - Fourth quarter 2024 revenue was $567.4 million, a decrease of 9.4% compared to $626.2 million in the prior year[7]. - Full year 2024 revenue was $2.208 billion, down 10.4% from $2.463 billion in the prior year[12]. - Revenue for Q4 2024 was $567,437,000, a decrease of 9.4% from $626,181,000 in Q4 2023[32]. - Total revenue for the year 2024 was $2,207,587,000, down 10.4% from $2,462,817,000 in 2023[32]. - TTEC Digital revenue for Q4 2024 was $114,950,000, a decrease of 3.7% from $119,118,000 in Q4 2023[34]. - TTEC Engage revenue for Q4 2024 was $452,487,000, down 10.8% from $507,063,000 in Q4 2023[34]. Profitability Metrics - Fourth quarter 2024 adjusted EBITDA was $50.9 million, or 9.0% of revenue, compared to $57.5 million, or 9.2% of revenue in the prior year[8]. - Full year 2024 non-GAAP adjusted EBITDA was $202.3 million, or 9.2% of revenue, down from $271.5 million, or 11.0% in the prior year[10]. - Full year 2024 GAAP loss from operations was $173.5 million, or negative 7.9% of revenue, compared to income from operations of $118.0 million, or 4.8% in the prior year[12]. - Full year 2024 GAAP fully diluted net loss per share was $6.52, compared to net income per share of $0.39 in the prior year[12]. - For the twelve months ended December 31, 2024, the company reported a net loss of $310,617,000 compared to a net income of $18,264,000 for the same period in 2023[38]. - The company experienced a significant impairment loss of $244,093,000 for the twelve months ended December 31, 2024, compared to $11,733,000 in 2023[40]. Cash Flow and Liquidity - Fourth quarter 2024 cash flow from operations was a negative $1.1 million, compared to a positive $31.5 million for the same period in 2023[16]. - Cash and cash equivalents decreased to $84,991,000 in Q4 2024 from $172,747,000 in Q4 2023[36]. - The net cash provided by operating activities for the twelve months ended December 31, 2024, was negative at $(58,818,000), a stark contrast to $144,765,000 in 2023[38]. - Free cash flow for the twelve months ended December 31, 2024, was $(103,991,000), compared to $76,926,000 in 2023, indicating a significant decline[41]. - Cash, cash equivalents, and restricted cash at the end of the period were $84,991,000, down from $173,905,000 at the beginning of the period[38]. Future Guidance - The company expects full year 2025 revenue guidance of $2.014 billion to $2.064 billion, with a midpoint of $2.039 billion[21]. - For full year 2025, non-GAAP adjusted EBITDA is expected to be between $215 million and $235 million, with a midpoint of $225 million[21]. Operational Performance - Total operating expenses for Q4 2024 were $552,144,000, a decrease of 9.4% from $609,257,000 in Q4 2023[32]. - TTEC Engage reported Q4 24 income from operations of $8,372,000, up from $6,942,000 in Q4 23, representing a 20.5% increase[43]. - TTEC Digital's Q4 24 income from operations was $6,921,000, compared to a loss of $197,213,000 in Q4 23, indicating a significant recovery[43]. - Year-to-date (YTD) 24 adjusted EBITDA for TTEC Engage was $85,177,000, down 38.3% from $138,157,000 in YTD 23[43]. - TTEC Digital's YTD 24 adjusted EBITDA was $51,279,000, a decrease of 17.7% from $62,282,000 in YTD 23[43]. Other Financial Metrics - The effective tax rate for Q4 2024 was 64.1%, compared to a negative rate of 62.0% in Q4 2023[32]. - The diluted shares outstanding increased to 48,150,000 for the twelve months ended December 31, 2024, compared to 47,419,000 in 2023[41]. - The company’s non-GAAP EPS for the twelve months ended December 31, 2024, was $0.71, a decrease from $2.18 in 2023[41]. - Retained earnings decreased significantly to $546,617,000 in Q4 2024 from $870,429,000 in Q4 2023[36]. - Total assets decreased to $1,753,380,000 in Q4 2024 from $2,185,598,000 in Q4 2023[36]. Restructuring and Charges - Restructuring charges for TTEC Engage in Q4 24 were $3,394,000, compared to $1,823,000 in Q4 23, reflecting a 86.2% increase[43]. - Impairment losses for TTEC Engage in YTD 24 totaled $241,149,000, a significant rise from $8,929,000 in YTD 23[43]. - TTEC incurred $1,956,000 in fees related to a non-binding offer in YTD 24, which was not present in YTD 23[43]. - Equity-based compensation expenses for TTEC Engage in YTD 24 were $11,754,000, down 17.6% from $14,257,000 in YTD 23[43]. Foreign Exchange and Other Income - TTEC reported a foreign exchange loss of $1,724,000 in Q4 24, compared to a gain of $1,271,000 in Q4 23[43]. - Other income for TTEC in YTD 24 was $18,311,000, a recovery from a loss of $4,060,000 in YTD 23[43].

Financial Performance and Liquidity - Cash and cash equivalents decreased from $172.7 million in 2023 to $85.0 million in 2024, indicating a significant reduction in liquidity[295]. - The company reported net cash flows used in operating activities of ($58.8) million for 2024, a decrease of $203.6 million from the previous year[297]. - The company suspended its semi-annual cash dividend in November 2024 as part of a strategy to prioritize debt reduction[183]. - The company’s remaining borrowing capacity was approximately $225 million as of December 31, 2024, indicating limited financial flexibility[292]. - Free cash flow decreased significantly from $76.9 million in 2023 to negative $104.0 million in 2024, mainly due to a decrease in working capital and net cash income[300]. - Net cash flows from investing activities improved from a negative $67.6 million in 2023 to a positive $0.5 million in 2024, primarily due to a $45.5 million real estate asset sale and a $22.7 million decrease in capital expenditures[298]. - Net cash flows from financing activities improved from a negative $68.2 million in 2023 to a negative $38.3 million in 2024, driven by a $46.4 million reduction in dividends paid and a $37.7 million reduction in contingent consideration payments[299]. Debt and Credit Facilities - The credit facility was amended to increase the net leverage ratio covenant to up to 5.15 to 1 and the minimum interest coverage ratio to not less than 2.00 to 1, effective through March 31, 2026, with total lenders' commitment reduced from $1.5 billion to $1.2 billion[119]. - As of December 31, 2024, the company had borrowings of $975.0 million under its Credit Facility, with an average daily utilization of $1,050.3 million for the year[292]. - The maximum leverage ratio permitted under the revised Credit Agreement is 5.15 to 1.00, with a gradual tightening expected through 2026[292]. - The company entered into a Ninth Amendment to the Credit Agreement, allowing a maximum leverage ratio of up to 5.15 to 1.00 and reducing total lenders' commitment from $1.3 billion to $1.2 billion[310]. Operational Risks and Challenges - The company faces inflationary pressures that have increased labor costs and other operational necessities, impacting profitability[124]. - The company’s contracts often do not allow for fee escalations that match rising operational costs, which could adversely affect financial performance[130]. - The company faces significant operational risks due to geographic concentration in locations outside the United States, particularly in the Philippines, India, Mexico, Bulgaria, and South Africa[171]. - The company is subject to financial and operating restrictions in its credit agreement, which may limit its ability to engage in mergers or pay dividends[120]. - The company may face costly litigation and reputational damage due to wage and hour class action lawsuits, particularly in California[160]. - The company’s operations are subject to various risks, including political and economic instability, which could adversely affect service delivery and financial results[172]. Technology and Cybersecurity - The company has made significant investments to enhance its information technology environment following past cybersecurity incidents[144]. - Significant investments in cybersecurity are ongoing, with no expected decrease in spending to mitigate potential threats to information systems[319]. - Cybersecurity incidents in 2021 did not materially impact results, but future incidents could have significant effects on operations and financial results[144]. - The company is increasingly incorporating AI technologies into its business, which presents risks and unintended consequences that could materially impact its results of operations[149]. - The company’s reliance on third parties for data, software, and cloud services increases vulnerability to service disruptions and cybersecurity risks[151]. Regulatory Environment - The company’s financial results may be affected by changes in laws and regulations, particularly those related to data privacy and protection, which have seen significant increases in enforcement activity[156]. - The evolving regulatory environment surrounding AI technologies may increase costs and liabilities for the company[161]. - The company’s ability to maintain necessary licenses for regulated services is critical, as failure to comply with regulations could lead to significant business losses[165]. Strategic Initiatives - The company has instituted cost reduction measures in 2024 to align overhead costs with changing revenue and profitability metrics[122]. - The company derived approximately 34% of its revenue from operations outside the United States in 2024[166]. - The company received a non-binding proposal from its founder and CEO to take the company private, which is currently under evaluation by a Special Committee[173]. - The company's stock price has experienced significant volatility due to uncertainties surrounding the potential Take Private Transaction, impacting its ability to retain key personnel and relationships with customers[175]. - The company may consider mergers, acquisitions, and other transactions that could materially impact its financial condition and operational results[306]. - The company’s profitability is dependent on effective cost management strategies, including optimizing resource capacity and offshoring certain functions[121]. - Future contractual obligations primarily relate to debt, leases, and income taxes, with a focus on maintaining compliance with financial covenants[303]. - The company’s five largest clients accounted for 32% of annual revenue in 2024, down from 36% in 2023, indicating a slight diversification in client revenue concentration[317].

Fourth Quarter 2024Revenue was $567.4 Million, down 9.4 PercentNet Income was $4.6 Million or 0.8 Percent of Revenue($9.0 Million or 1.6 Percent of Revenue Non-GAAP)Adjusted EBITDA was $50.9 Million or 9.0 Percent of RevenueFull Year 2024Revenue was $2.208 Billion, down 10.4 PercentNet Loss of $310.6 Million or negative 14.1 Percent of Revenue(Net Income of $33.6 Million or 1.5 Percent of Revenue Non-GAAP)Adjusted EBITDA was $202.3 Million or 9.2 Percent of RevenueProvides Outlook for Full Year 2025AUSTIN, ...

Company celebrates grand opening, driving CX innovation in the region DENVER and CAIRO, Feb. 13, 2025 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), a leading global CX (customer experience) technology and services innovator for AI-enhanced CX, celebrated the grand opening of its new site in Cairo's Maadi Technology Park last week, marking a significant expansion of its operations in Egypt. This milestone was further celebrated by the recent addition of a prominent provider of on-demand pay solutions t ...

DENVER, Feb. 7, 2025 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ:TTEC), a leading global CX (customer experience) technology and services innovator for AI-enabled CX solutions, announced today that TTEC will release its earnings results after market close on Thursday, February 27, 2025, when a press release will be issued. The Company will host a live webcast and conference call at 8:30 a.m. ET on Friday, February 28, 2025. You are invited to join a live webcast of the conference call by visiting the "Inves ...

TTEC Holdings, Inc. (NASDAQ: TTEC ) reports experience of many years in the customer experience industry and appears to be in a transition period. Start-up costs, investments in artificial intelligence, and reorganization could explain the most recent decline in the company's operatingLondon Stock Market Research is a service offered by an ex-investment banker from the city of London. After around 11 years in the industry, I decided to drop out, and made dollars out of what I learned in business. I apprecia ...

DENVER, Dec. 19, 2024 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), a leading global CX (customer experience) technology and services innovator for AI-enhanced CX with solutions from TTEC Engage and TTEC Digital, has achieved Silver Certification in Management Leadership for Tomorrow's (MLT) Black Equity at Work program, demonstrating the company's measurable progress in advancing racial equity.The certification, granted by MLT, a premier national organization advancing racial equity, recognizes TTEC' ...