TTEC (US:TTEC)2021-05-04 20:45Revenue Performance - In Q1 2021, TTEC's revenue increased by $107.0 million, or 24.8%, to $539.2 million compared to the same period in 2020, with TTEC Engage contributing $475.6 million (88%) and TTEC Digital contributing $63.6 million (12%) to the total revenue [168]. - Revenue for the three months ended March 31, 2021, was $475.6 million, a 34.1% increase from $354.7 million in the same period of 2020 [183]. - TTEC Digital's revenue decreased by $14.0 million, or 18.0%, to $63.6 million in Q1 2021, while excluding the large government contract, revenue increased by 23% year-over-year [180]. Operating Income and Cash Flow - The overall operating income for Q1 2021 was $73.4 million, representing 13.6% of revenue, compared to $40.7 million or 9.4% of revenue in Q1 2020 [169]. - Operating income increased to $69.2 million, representing a 127.3% increase from $30.5 million in the prior year, with an operating margin of 14.6% compared to 8.6% [184]. - Positive operating cash flows of $69.8 million were generated during the three months ended March 31, 2021, up from $62.2 million in the same period of 2020 [197]. - Free cash flow increased to $58.2 million for the three months ended March 31, 2021, compared to $45.4 million in the prior year [200]. Client Concentration and Risk - One client represented over 10% of total revenue, with the five largest clients accounting for 41.8% of consolidated revenue for the three months ended March 31, 2021 [206]. - The company’s five largest clients accounted for 41.8% of consolidated revenue for the three months ended March 31, 2021, compared to 36.0% in the same period of 2020 [206]. - One client represented more than 10% of total revenue during the three months ended March 31, 2021, indicating a significant client concentration risk [206]. - The company has long-term relationships with its top five clients, ranging from 8 to 21 years, which helps mitigate client concentration risks [206]. Capital Expenditures and Investments - The company expects total capital expenditures in 2021 to be between 3.1% and 3.3% of revenue, with 60% allocated for growth and 40% for maintenance [204]. - The anticipated level of capital expenditures in 2021 is primarily driven by new client contracts and enhancements to technological infrastructure [204]. - The company anticipates that capital requirements over the next 12 months will depend on investments in infrastructure and may increase due to potential acquisitions or joint ventures [205]. Operational Metrics - As of March 31, 2021, TTEC's seat utilization was 64%, down from 73% in the prior year, primarily due to COVID-19 protocols [174]. - TTEC's offshore customer engagement centers accounted for 29% of revenue in Q1 2021, down from 34% in the same period in 2020 [171]. Acquisitions and Strategic Initiatives - The company has been highly acquisitive, with recent acquisitions including a provider of Genesys and Microsoft cloud contact center services in Q2 2021 [160]. - The company continues to invest in innovation and service offerings to enhance its competitive position and diversify its customer care services [159]. Tax and Cash Position - The effective tax rate for the three months ended March 31, 2021, was 22.5%, down from 29.2% in the comparable period of 2020 [188]. - Cash and cash equivalents totaled $144.2 million as of March 31, 2021, up from $132.9 million at the end of 2020 [195]. - Net cash flows used in investing activities decreased to $11.8 million for the three months ended March 31, 2021, from $22.0 million in the prior year [198]. - Free cash flow for the three months ended March 31, 2021, was $58,222,000, an increase of 28.4% from $45,352,000 in the same period of 2020 [202].