Financial Data and Key Metrics Changes - TELUS Digital generated revenue of $699 million, an increase of 7% year over year or 6% on a constant currency basis [19] - Adjusted EBITDA margin was 13.4%, reflecting a year-over-year decrease due to increased salary and benefits, as well as goods and services purchased outpacing revenue growth [22][23] - Free cash flow for the quarter was $33 million, with a year-over-year decline attributed to operating expenses outpacing revenue growth [24][25] Business Line Data and Key Metrics Changes - Revenue from AI and data solutions continued to grow, with a focus on diversifying client base [20][21] - The customer experience service line faced cost pressures, particularly from top-line pricing and geographic labor cost differences [30] - Digital solutions saw strong client engagement, with approximately 10% of new bookings from new clients and 90% from existing clients [13][14] Market Data and Key Metrics Changes - Revenue growth was observed in the Americas and Europe, while the Asia Pacific segment experienced softer year-over-year results [22] - The technology and gaming sectors contributed significantly to revenue, with an 11% increase driven by growth with social media and technology clients [21] - E-commerce and fintech sectors saw a 14% year-over-year revenue decrease due to declining service volumes [22] Company Strategy and Development Direction - The company aims to enhance operational methods, AI capabilities, and overall efficiency programs to mitigate margin pressures [6][10] - Focus remains on business evolution, service quality excellence, and talent development to drive sustainable revenue growth [10][11] - The company is positioning itself as a trusted independent partner in the AI space, differentiating from competitors [9] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing margin pressures due to competitive pricing, labor inflation, and complex work requirements [5][6] - There is optimism about future prospects, particularly in AI and data solutions, with expectations for continued growth [12][19] - The company reiterated its outlook for approximately 2% revenue growth for the full year 2025 on a constant currency basis [25] Other Important Information - A goodwill impairment charge was recorded in Q2 due to updated financial modeling assumptions [18] - The leverage ratio was elevated at 3.75 times as of June 30, 2025, primarily due to lower adjusted EBITDA and a non-cash increase in derivative liabilities [24] Q&A Session Summary Question: Can you discuss the margin pressures and restructuring carried out in the quarter? - Management identified customer experience and content moderation as areas under pressure, with actions to improve workforce management and pricing discipline [30][32][34] Question: What is the update on AI solutions and market dynamics? - The AI consulting business is evolving strongly, moving from proofs of concept to full deployment, with significant growth expected in 2026 and 2027 [39][40] Question: Are there more IT services or technology vendors becoming competitive? - Competition remains intense, but differentiation is achieved through advanced capabilities beyond traditional customer experience work [49][50] Question: What verticals are seeing differences in AI adoption? - Significant differences exist in AI application based on industry, with gaming and content moderation leading, while financial services are slower due to regulatory concerns [55][56] Question: Can you elaborate on discretionary spending recovery? - Demand for cost optimization projects is increasing across various industries, with a rebound in classic digital business activities [62][63] Question: What is the situation with Google as a client? - Revenue from Google is expected to shift from basic work to more complex projects, aligning with the company's strategic goals [73][74]