TELUS International(TIXT) - 2025 Q1 - Quarterly Report

Revenue and Earnings - Revenue for the three months ended March 31, 2025, was $670 million, a 1.98% increase from $657 million in the same period of 2024[26] - The largest revenue contributions came from the Tech and Games sector at $282 million, followed by Communications and Media at $173 million[26] - Basic loss per share for the three months ended March 31, 2025, was $(0.09), compared to earnings of $0.10 per share in the same period of 2024[34] - The company reported a net loss of $25 million for the three months ended March 31, 2025, compared to a net income of $28 million in the same period of 2024[34] - Revenues from services provided to TELUS and its subsidiaries amounted to $178 million for the three months ended March 31, 2025, compared to $160 million in the same period of 2024[62] - TELUS accounted for 26.6% of consolidated revenue in Q1 2025, up from 24.3% in Q1 2024; Google contributed 12.0%, down from 14.5%[64] Expenses and Financial Management - Interest expense for the three months ended March 31, 2025, totaled $30 million, down from $35 million in the same period of 2024, reflecting a decrease of 14.29%[31] - The company’s interest on long-term debt, excluding lease liabilities, was $20 million for the three months ended March 31, 2025, down from $24 million in the same period of 2024[31] - Share-based compensation expense for key management personnel was recognized at $2 million for the three-month period ended March 31, 2025[63] - The company initiated a restructuring program in April 2025, which is expected to impact personnel-related provisions[50] Assets and Liabilities - The total accounts receivable as of March 31, 2025, was $459 million, slightly up from $454 million as of December 31, 2024[37] - The allowance for doubtful accounts increased from $2 million at the beginning of the period to $8 million by March 31, 2025, reflecting a significant rise in provisions[39] - The total property, plant, and equipment increased from $1,053 million at the beginning of the year to $1,098 million by March 31, 2025, indicating growth in owned assets[45] - Intangible assets and goodwill rose from $3,971 million at the beginning of the year to $4,024 million by March 31, 2025, driven by foreign exchange adjustments and software additions[46] - The accumulated amortization of intangible assets was $720 million as of March 31, 2025, reflecting ongoing depreciation of intangible assets[46] - The company reported a net book value of property, plant, and equipment of $465 million as of March 31, 2025, compared to $456 million at the end of 2024[45] - Total accounts payable and accrued liabilities decreased slightly from $321 million as of December 31, 2024, to $317 million as of March 31, 2025[65] - The company experienced a net decrease in accounts receivable of $15 million in Q1 2025, compared to a decrease of $18 million in Q1 2024[66] Debt and Capital Structure - As of March 31, 2025, total long-term debt amounted to $1,490 million, a decrease from $1,525 million as of December 31, 2024[52] - The credit facility includes an $800 million revolving credit facility and a $1.2 billion term loan, with an effective interest rate of 6.7% as of March 31, 2025[53] - The company has a Net Debt to Adjusted EBITDA ratio requirement not to exceed 3.75:1.00 for fiscal 2025, with a minimum Adjusted EBITDA to Debt Service ratio of 1.50:1.00[54] - Anticipated long-term debt repayments for 2025 total $62 million, with $1,094 million due in 2028[56] - As of March 31, 2025, the company had $595 million available under the revolving credit facility[54] - The credit facility balance was $1,284 million at the beginning of Q1 2025, with repayments of $189 million during the period[67] - Long-term debt decreased from $1,750 million at the beginning of Q1 2024 to $1,490 million at the end of Q1 2025[67] Other Financial Information - The fair value of derivative financial instruments related to currency risks from Euro business acquisition was $10 million as of March 31, 2025, with a notional amount of $33 million[43] - The fair value of derivatives used to manage currency risks from Philippine peso purchases was $1 million with a notional amount of $85 million as of March 31, 2025[43] - The company established a provision for written put options related to the acquisition of WillowTree in 2023[51] - As of March 31, 2025, the company had no recorded liability for indemnification obligations[58] - The company reported a cash payment of $28 million for capital assets in Q1 2025, compared to $19 million in Q1 2024[66] - Capital expenditures for property, plant, and equipment were $22 million in Q1 2025, compared to $13 million in Q1 2024[66] - Lease liabilities increased from $249 million at the beginning of Q1 2025 to $254 million at the end of the period[67] - The company is assessing the impacts of new accounting standards effective January 1, 2027, but does not expect material effects on financial disclosures[20] - The recoverable amount of the TELUS Digital cash-generating unit was slightly above its carrying amount, determined using a discount rate of 9.8% and a perpetual growth rate of 3.0%[47] - The company noted that any adverse changes in future financial performance could lead to material impairment charges for the TELUS Digital cash-generating unit's goodwill[49]