TTEC (TTEC) - 2025 Q2 - Quarterly Results

Executive Summary & Company Commentary This section provides an overview of TTEC's Q2 2025 financial performance and CEO commentary on strategic transformation and AI integration Second Quarter 2025 Overview TTEC announced its second quarter 2025 financial results, reporting $513.6M in revenue, a GAAP net loss of $6.7M, and Non-GAAP net income of $10.6M | Metric | Value ($M) | | :-------------------- | :---------- | | Revenue | $513.6M | | Net Loss (GAAP) | $(6.7)M | | Net Income (Non-GAAP) | $10.6M | | Adjusted EBITDA | $51.8M | | Adjusted EBITDA % of Revenue | 10.1% | CEO Commentary CEO Ken Tuchman expressed satisfaction with the financial results, highlighting the company's progress in returning to historic growth and profitability through transformation - TTEC is focused on transformation to restore historic growth rates and profitability, showing consistent improvements in growth and margins[2] - The company is adopting a digital-first approach, attracting new marquee clients and growing with its existing client base[2] - TTEC is deploying AI innovations throughout its organization and with clients to deliver AI-enabled and data-driven CX solutions, deepening partnerships with leading CX technology players[3] - Increased full-year 2025 revenue guidance is a result of the company's approach to delivering client value[3] Second Quarter 2025 Financial Highlights This section details TTEC's Q2 2025 revenue, profitability, earnings per share, and cash flow performance, highlighting significant year-over-year improvements Revenue Performance GAAP revenue for the second quarter of 2025 was $513.6M, marking a 3.8% decrease compared to $534.1M in the prior year | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) | | :----- | :------ | :------ | :----------- | | Revenue | $513.6M | $534.1M | -3.8% | - Foreign exchange had a positive impact of $2.4M on revenue in Q2 2025[6] Profitability Metrics GAAP income from operations significantly improved to $18.9M, with Non-GAAP income and Adjusted EBITDA also rising, primarily due to the absence of prior year impairment charges | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | GAAP Income from Operations | $18.9M | $(224.4)M | Significant Improvement | | GAAP % of Revenue | 3.7% | -42.0% | | | Non-GAAP Income from Operations | $36.8M | $29.5M | +24.7% | | Non-GAAP % of Revenue | 7.2% | 5.5% | | | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) | | :---------------- | :-------- | :-------- | :----------- | | Adjusted EBITDA | $51.8M | $46.2M | +12.1% | | Adjusted EBITDA % of Revenue | 10.1% | 8.7% | | - The significant improvement in GAAP income from operations was primarily due to non-cash impairment charges in the TTEC Engage reporting unit in the prior year[10] - Foreign exchange had a $1.5M positive impact on Non-GAAP income from operations in Q2 2025[10] Earnings Per Share GAAP fully diluted net loss per share improved substantially to $(0.14) in Q2 2025, compared to a net loss of $(6.24) in the prior year | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | GAAP Diluted Net Loss Per Share | $(0.14) | $(6.24) | Significant Improvement | | Non-GAAP Diluted EPS | $0.22 | $0.14 | +57.1% | Cash Flow and Balance Sheet Cash flow from operations more than doubled to $92.7M in Q2 2025, with free cash flow also increasing substantially, while net debt improved to $803.7M and revolving credit capacity significantly expanded | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | Cash Flow from Operations | $92.7M | $49.3M | +88.0% | | Free Cash Flow | $85.5M | $35.1M | +143.6% | | Capital Expenditures | $7.2M | $14.2M | -49.3% | | Metric | June 30, 2025 ($M) | June 30, 2024 ($M) | Change (YoY) | | :-------------------------- | :-------------- | :-------------- | :----------- | | Net Debt Position | $803.7M | $853.4M | -5.8% | | Revolving Credit Facility Capacity | ~$270M | ~$100M | +170.0% | Segment Reporting & Commentary This section provides a detailed financial review of TTEC Digital and TTEC Engage segments, including performance metrics and strategic commentary from the CFO TTEC Digital Segment TTEC Digital reported a 2.3% decrease in GAAP revenue to $113.7M in Q2 2025, but GAAP and Non-GAAP income from operations significantly improved, driven by diversification and focus on utilization - TTEC Digital is diversifying and scaling with new growth partners and focusing on utilization to maximize margins amidst a market shift towards holistic data and AI solutions[16] | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | GAAP Revenue | $113.7M | $116.4M | -2.3% | | GAAP Income from Operations | $11.4M | $6.0M | +90.0% | | GAAP % of Revenue | 10.0% | 5.2% | | | Non-GAAP Income from Operations | $18.4M | $15.0M | +22.7% | | Non-GAAP % of Revenue | 16.1% | 12.8% | | TTEC Engage Segment TTEC Engage's GAAP revenue decreased by 4.3% to $399.8M, a smaller decline than anticipated, with significant improvement in GAAP and Non-GAAP income from operations due to profit optimization and positive foreign exchange impacts - TTEC Engage's revenue decline was less than expected, and profit optimization led to significant margin improvement in the first half of the year[16] | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | GAAP Revenue | $399.8M | $417.7M | -4.3% | | GAAP Income from Operations | $7.5M | $(230.4)M | Significant Improvement | | GAAP % of Revenue | 1.9% | -55.2% | | | Non-GAAP Income from Operations | $18.4M | $14.6M | +26.0% | | Non-GAAP % of Revenue | 4.6% | 3.5% | | - Foreign exchange had a $2.2M positive impact on Engage's revenue and a $1.5M positive impact on its income from operations[18] CFO Commentary CFO Kenny Wagers highlighted solid Q2 and H1 performance across both segments, raising Engage's revenue guidance due to embedded base growth and positive FX, while reiterating full-year profitability despite negative FX impact on Engage's margins - TTEC delivered solid performance in Q2 and H1 across both segments, exceeding plans[16] - Engage segment's revenue guidance is being raised due to higher growth in the embedded base and a positive foreign exchange impact[17] - Full-year profitability outlook is reiterated, but foreign exchange impact versus budget is negatively affecting Engage's margins[17] - The company is well-positioned for the second half of the year but remains cautious due to the dynamic global economic environment[17] Business Outlook for Full Year 2025 This section outlines TTEC's updated full-year 2025 financial projections for the consolidated entity and its individual segments TTEC Holdings Full Year 2025 Outlook TTEC updated its full-year 2025 outlook, projecting consolidated revenue between $2,064M and $2,114M, with Non-GAAP adjusted EBITDA and earnings per share also provided | Metric | Mid-Point ($M) | | :-------------------------- | :---------- | | Revenue | $2,089M | | Non-GAAP Adjusted EBITDA | $225M | | Non-GAAP Adjusted EBITDA Margins | 10.8% | | Non-GAAP Operating Income | $164M | | Non-GAAP Operating Income Margins | 7.8% | | Non-GAAP Earnings Per Share | $1.08 | TTEC Engage Full Year 2025 Outlook For the full year 2025, TTEC Engage's revenue is projected to be between $1,606M and $1,636M, with Non-GAAP adjusted EBITDA also forecasted | Metric | Mid-Point ($M) | | :-------------------------- | :---------- | | Revenue | $1,621M | | Non-GAAP Adjusted EBITDA | $157M | | Non-GAAP Adjusted EBITDA Margins | 9.7% | | Non-GAAP Operating Income | $107M | | Non-GAAP Operating Income Margins | 6.6% | TTEC Digital Full Year 2025 Outlook TTEC Digital's full-year 2025 outlook forecasts revenue between $458M and $478M, with Non-GAAP adjusted EBITDA also anticipated | Metric | Mid-Point ($M) | | :-------------------------- | :---------- | | Revenue | $468M | | Non-GAAP Adjusted EBITDA | $68M | | Non-GAAP Adjusted EBITDA Margins | 14.5% | | Non-GAAP Operating Income | $57M | | Non-GAAP Operating Income Margins | 12.1% | Non-GAAP Financial Measures & Reconciliations This section explains the company's use of Non-GAAP financial measures and provides detailed reconciliations to GAAP figures for consolidated and segment-level performance Non-GAAP Financial Measures Explanation This section explains the use of Non-GAAP financial measures to provide investors and analysts with a consistent view of performance, typically excluding restructuring, impairment, equity-based compensation, and amortization charges - Non-GAAP financial measures are used to provide a meaningful and consistent view of the company's financial condition and results[25] - Non-GAAP metrics generally exclude restructuring and impairment charges, equity-based compensation expenses, and amortization of purchased intangibles[28] - Quantitative reconciliation of full-year 2025 Non-GAAP guidance to GAAP measures is not provided due to the unpredictability of certain reconciling items[24] Consolidated Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP to Non-GAAP financial figures for TTEC Holdings, Inc. on a consolidated basis, covering income from operations, EBITDA, net income, EPS, and free cash flow | Metric | GAAP Income from Operations ($ in Thousands) | Adjustments ($ in Thousands) | Non-GAAP Income from Operations ($ in Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Q2 2025 | $18,876 | $17,911 | $36,787 | | Q2 2024 | $(224,413) | $253,951 | $29,538 | | Metric | Non-GAAP Income from Operations ($ in Thousands) | Adjustments ($ in Thousands) | Adjusted EBITDA ($ in Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Q2 2025 | $36,787 | $14,983 | $51,770 | | Q2 2024 | $29,538 | $16,702 | $46,240 | | Metric | Net Income (GAAP) ($ in Thousands) | Adjustments ($ in Thousands) | Non-GAAP Net Income ($ in Thousands) | Diluted Shares | Non-GAAP EPS | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Q2 2025 | $(6,724) | $17,279 | $10,555 | 48,064 | $0.22 | | Q2 2024 | $(296,768) | $303,403 | $6,635 | 47,564 | $0.14 | | Metric | Net Cash Provided by Operating Activities ($ in Thousands) | Less: Total Cash Capital Expenditures ($ in Thousands) | Free Cash Flow ($ in Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Q2 2025 | $92,709 | $7,181 | $85,528 | | Q2 2024 | $49,274 | $14,209 | $35,065 | Segment Non-GAAP Reconciliations This section provides segment-specific reconciliations for Non-GAAP income from operations and Adjusted EBITDA for both TTEC Engage and TTEC Digital, detailing adjustments from GAAP figures | Segment | GAAP Income from Operations ($ in Thousands) | Adjustments ($ in Thousands) | Non-GAAP Income from Operations ($ in Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | TTEC Engage (Q2 2025) | $7,467 | $10,957 | $18,424 | | TTEC Engage (Q2 2024) | $(230,421) | $245,009 | $14,588 | | TTEC Digital (Q2 2025) | $11,409 | $6,954 | $18,363 | | TTEC Digital (Q2 2024) | $6,008 | $8,942 | $14,950 | | Segment | Non-GAAP Income from Operations ($ in Thousands) | Adjustments ($ in Thousands) | Adjusted EBITDA ($ in Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | TTEC Engage (Q2 2025) | $18,424 | $12,176 | $30,600 | | TTEC Engage (Q2 2024) | $14,588 | $14,022 | $28,610 | | TTEC Digital (Q2 2025) | $18,363 | $2,807 | $21,170 | | TTEC Digital (Q2 2024) | $14,950 | $2,680 | $17,630 | Additional Information This section provides details on the upcoming earnings conference call, an overview of TTEC Holdings, and a standard disclaimer regarding forward-looking statements Conference Call Information TTEC will host a live webcast and conference call for earnings will be held on August 8, 2025, at 8:30 a.m. ET, with access available via the Investors Relations section of its website - A live webcast and conference call for earnings will be held on August 8, 2025, at 8:30 a.m. ET[26] - Webcast details and replay information are available on the TTEC website's 'Investors Relations' section[26] About TTEC TTEC Holdings, Inc. is a leading global innovator in AI-enabled CX technology and services, operating two main businesses: TTEC Digital and TTEC Engage, founded in 1982 - TTEC is a global CX technology and services innovator providing AI-enabled digital CX solutions[27] - The company operates two main businesses: TTEC Digital (design, build, operate CX tech, CRM, AI, analytics) and TTEC Engage (AI-enabled customer engagement, acquisition, tech support, back office, fraud prevention)[27] - Founded in 1982, TTEC emphasizes CX excellence and operates globally across six continents[27] Forward-Looking Statements This section includes a standard disclaimer regarding forward-looking statements, advising that actual results may differ materially from projections due to various risks and uncertainties outlined in SEC filings - The release contains forward-looking statements regarding operations, financial position, strategy, and growth opportunities[30] - Actual results may differ materially from forward-looking statements due to risks and uncertainties outlined in SEC filings, including the Form 10-K[31] - The company does not undertake to update forward-looking statements, and they are not a guarantee of performance[32] Consolidated Financial Statements This section presents TTEC Holdings, Inc.'s unaudited consolidated statements of operations, balance sheets, cash flows, and segment information Consolidated Statements of Operations This section presents the unaudited consolidated statements of operations for TTEC Holdings, Inc. for the three and six months ended June 30, 2025, and 2024, detailing key financial performance indicators | Metric | 2025 ($ in Thousands) | 2024 ($ in Thousands) | | :------------------------------------ | :---------- | :---------- | | Revenue | $513,571 | $534,085 | | Total operating expenses | $494,695 | $758,498 | | Income / (Loss) From Operations | $18,876 | $(224,413) | | Net Income / (Loss) | $(6,724) | $(296,768) | | Diluted Net Income / (Loss) Per Share | $(0.14) | $(6.24) | | Metric | 2025 ($ in Thousands) | 2024 ($ in Thousands) | | :------------------------------------ | :---------- | :---------- | | Revenue | $1,047,799 | $1,110,723 | | Total operating expenses | $1,004,734 | $1,312,425 | | Income / (Loss) From Operations | $43,065 | $(201,702) | | Net Income / (Loss) | $(3,478) | $(296,268) | | Diluted Net Income / (Loss) Per Share | $(0.07) | $(6.24) | Consolidated Balance Sheets This section presents the unaudited consolidated balance sheets for TTEC Holdings, Inc. as of June 30, 2025, and December 31, 2024, providing an overview of the company's financial position | Metric | June 30, 2025 ($ in Thousands) | Dec 31, 2024 ($ in Thousands) | | :-------------------------- | :-------------- | :-------------- | | Total assets | $1,695,030 | $1,753,380 | | Total current liabilities | $355,289 | $353,936 | | Total long-term liabilities | $1,044,565 | $1,131,325 | | Total equity | $295,176 | $268,119 | Consolidated Statements of Cash Flows This section provides the unaudited consolidated statements of cash flows for TTEC Holdings, Inc. for the six months ended June 30, 2025, and 2024, outlining cash activities and overall change in cash | Metric | 2025 ($ in Thousands) | 2024 ($ in Thousands) | | :------------------------------------ | :---------- | :---------- | | Net cash provided by operating activities | $114,301 | $33,645 | | Net cash used in investing activities | $(12,411) | $(27,566) | | Net cash used in financing activities | $(98,927) | $(75,702) | | (Decrease) in cash, cash equivalents and restricted cash | $(2,432) | $(74,235) | | Cash, cash equivalents and restricted cash, end of period | $82,559 | $99,670 | Segment Information This section presents unaudited segment-level financial information for TTEC Digital and TTEC Engage, detailing revenue and income/loss from operations for each segment | Segment | 2025 ($ in Thousands) | 2024 ($ in Thousands) | | :-------------------------- | :---------- | :---------- | | TTEC Digital | $113,746 | $116,368 | | TTEC Engage | $399,825 | $417,717 | | Total | $513,571 | $534,085 | | Segment | 2025 ($ in Thousands) | 2024 ($ in Thousands) | | :-------------------------- | :---------- | :---------- | | TTEC Digital | $11,409 | $6,008 | | TTEC Engage | $7,467 | $(230,421) | | Total | $18,876 | $(224,413) |