TTEC (TTEC) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results The company reports a Q1 2025 revenue decline but improved profitability and a significant cash flow turnaround Executive Summary TTEC's first-quarter 2025 performance exceeded internal plans despite client caution due to economic uncertainty - The company reported a good start to 2025, with financial performance exceeding plans and key achievements in new client acquisition and operational performance[2] - Management highlights that clients are cautious due to the current economic environment and uncertainty in trade policy, making future predictions difficult[3] First Quarter 2025 Financial Highlights Q1 2025 saw a 7.4% GAAP revenue decrease to $534.2 million, but improved profitability and higher EBITDA Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Revenue | $534.2M | $576.6M | -7.4% | | GAAP Income from Operations | $24.2M | $22.7M | +6.6% | | Non-GAAP Income from Operations | $41.5M | $37.9M | +9.5% | | Non-GAAP Adjusted EBITDA | $56.4M | $54.9M | +2.7% | | GAAP Diluted EPS | $0.07 | $0.01 | +600% | | Non-GAAP Diluted EPS | $0.28 | $0.27 | +3.7% | - Foreign exchange fluctuations had a mixed impact, reducing revenue by $6.0 million while positively affecting Non-GAAP income from operations by $4.2 million[4] Cash Flow and Balance Sheet The company showed significantly improved liquidity with positive operating cash flow and increased borrowing capacity Cash Flow and Liquidity Comparison (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash Flow from Operations | $21.6M | ($15.6M) | | Free Cash Flow | $16.2M | ($29.1M) | | Capital Expenditures | $5.4M | $13.5M | | Net Debt | $881.4M | $865.3M | | Borrowing Capacity | ~$230M | ~$95M | Segment Performance This section details the financial performance of the TTEC Digital and TTEC Engage operating segments TTEC Digital TTEC Digital's revenue declined slightly, but operating income and margins showed significant year-over-year growth TTEC Digital Q1 Performance (2025 vs 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Revenue | $108.0M | $112.0M | | GAAP Income from Operations | $5.9M | $3.3M | | GAAP Operating Margin | 5.4% | 2.9% | | Non-GAAP Income from Operations | $12.1M | $9.3M | | Non-GAAP Operating Margin | 11.2% | 8.3% | - The segment's performance is benefiting from a client-centric go-to-market approach and AI-enabled solutions that are resonating well in the market[12] TTEC Engage TTEC Engage experienced a revenue decrease, partly due to FX, but improved its Non-GAAP operating margin TTEC Engage Q1 Performance (2025 vs 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Revenue | $426.2M | $464.6M | | GAAP Income from Operations | $18.3M | $19.4M | | GAAP Operating Margin | 4.3% | 4.2% | | Non-GAAP Income from Operations | $29.4M | $28.7M | | Non-GAAP Operating Margin | 6.9% | 6.2% | - Strategic priorities for TTEC Engage include improving operational agility, providing digitally enabled solutions, and optimizing its cost structure[12] - Foreign exchange had a negative impact of $5.5 million on revenue and a positive impact of $4.2 million on income from operations[13] Business Outlook The company reiterates its full-year 2025 financial guidance for the consolidated business and its segments TTEC Full Year 2025 Outlook TTEC reiterates its full-year 2025 guidance, projecting revenue between $2,014 million and $2,064 million - The company is re-iterating its full-year outlook, expressing confidence that both segments are well-positioned to navigate the current uncertain economic environment[13] TTEC Full Year 2025 Guidance | Metric | Guidance Range | Mid-Point | | :--- | :--- | :--- | | Revenue | $2,014M - $2,064M | $2,039M | | Non-GAAP adjusted EBITDA | $215M - $235M | $225M | | Non-GAAP adjusted EBITDA margins | 10.7% - 11.4% | 11.0% | | Non-GAAP operating income | $154M - $174M | $164M | | Non-GAAP earnings per a share | $0.95 - $1.20 | $1.08 | Segment Full Year 2025 Outlook The outlook provides specific revenue and Non-GAAP operating income margin targets for the Engage and Digital segments Engage Full Year 2025 Outlook | Metric | Guidance Range | Mid-Point | | :--- | :--- | :--- | | Revenue | $1,556M - $1,586M | $1,571M | | Non-GAAP operating income margins | 6.5% - 7.1% | 6.8% | Digital Full Year 2025 Outlook | Metric | Guidance Range | Mid-Point | | :--- | :--- | :--- | | Revenue | $458M - $478M | $468M | | Non-GAAP operating income margins | 11.5% - 12.7% | 12.1% | Financial Statements and Reconciliations This section presents the detailed consolidated financial statements and reconciliations of GAAP to Non-GAAP measures Consolidated Statements of Operations The Q1 2025 income statement shows decreased revenue but increased operating income and a significant rise in net income Q1 2025 Consolidated Statement of Operations Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $534,228 | $576,638 | | Income From Operations | $24,189 | $22,711 | | Net Income | $3,246 | $500 | | Diluted EPS | $0.07 | $0.01 | Consolidated Balance Sheets The balance sheet as of March 31, 2025, reflects total assets of $1.726 billion and an increase in total equity Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $85,135 | $84,991 | | Total assets | $1,726,236 | $1,753,380 | | Line of credit (Long-term) | $964,000 | $975,000 | | Total liabilities | $1,444,730 | $1,485,261 | | Total equity | $281,506 | $268,119 | Consolidated Statements of Cash Flows The company generated positive net cash from operations in Q1 2025, a major improvement from the prior-year period Q1 Cash Flow Summary (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21,592 | ($15,629) | | Net cash used in investing activities | ($5,279) | ($13,448) | | Net cash provided by financing activities | ($13,735) | ($46,488) | | Free Cash Flow | $16,186 | ($29,102) | Reconciliation of Non-GAAP Financial Information This section provides detailed adjustments from GAAP to Non-GAAP metrics like Income from Operations and Adjusted EBITDA Q1 2025 Reconciliation of GAAP to Non-GAAP Income from Operations (in thousands) | Description | Amount | | :--- | :--- | | GAAP Income from Operations | $24,189 | | Restructuring charges, net | $1,996 | | Impairment losses | $761 | | Equity-based compensation expenses | $3,250 | | Amortization of purchased intangibles | $7,750 | | Other adjustments | $3,624 | | Non-GAAP Income from Operations | $41,497 | Q1 2025 Reconciliation of Non-GAAP Income from Operations by Segment (in thousands) | Segment | GAAP Income from Ops | Non-GAAP Income from Ops | | :--- | :--- | :--- | | TTEC Engage | $18,325 | $29,422 | | TTEC Digital | $5,864 | $12,075 |