TTEC (US:TTEC)2023-05-06 23:25Financial Data and Key Metrics Changes - Revenue increased by 8.6% to $633 million on a constant currency basis, with adjusted EBITDA at $83 million or 13.1% of revenue, and non-GAAP EPS at $0.78 per share [4][25] - On a like-for-like basis, revenue growth was 1.4%, with adjusted EBITDA down from $84 million or 14.3% in the prior year [25][26] - Operating income was $61 million or 9.6% of revenue, compared to $67 million or 11.4% in the prior year [25] Business Line Data and Key Metrics Changes - TTEC Engage reported revenue of $560 million, an increase of 9.3% on a constant currency basis, while TTEC Digital reported revenue of $117 million, an increase of 5.5% [30][28] - The Engage segment's growth was driven by the Faneuil asset acquisition and increased volumes in health care, while Digital's growth was attributed to professional services and recurring revenue [30][28] Market Data and Key Metrics Changes - The health care, financial services, and public sector verticals showed resilient demand, with expected organic growth of approximately 6% for the full year [30][56] - The hypergrowth portfolio is experiencing lower revenue due to cyclical nature and discretionary spending [30] Company Strategy and Development Direction - The company is focused on integrating AI into customer experience (CX) offerings, enhancing operational capabilities, and maintaining a customer-first mindset [5][10] - M&A remains a key strategy for shareholder value creation, with a focus on acquisitions that differentiate solutions and accelerate business strategy [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business, citing strong client demand and a healthy backlog, while remaining cautious due to macroeconomic uncertainties [33][45] - The company plans to continue investing in global delivery and technology infrastructure while maintaining an agile cost structure [34][33] Other Important Information - Cash flow from operations increased to $49 million, with capital expenditures at $14 million or 2.2% of revenue [31][32] - The company declared a semiannual dividend of $0.52 per share, totaling $24.6 million [32] Q&A Session Summary Question: Impact of AI on revenue and cost - Management confirmed that AI is expected to lead to increased revenue per customer and reduced cost to serve, ultimately enhancing profitability [36] Question: Long-term opportunity in hypergrowth segment - Management acknowledged current challenges but noted potential opportunities in the pipeline for the hypergrowth segment [38][39] Question: Cost structure and margin considerations - Management emphasized maintaining an agile cost structure while executing planned investments [40][41] Question: Changes in sales cycles and volume commitments - Management reported stabilization in sales cycles and a strong pipeline, with positive demand trends [43][44] Question: Headcount trends and operations - Management indicated that offshore headcount is growing faster than onshore, driven by client demand and pipeline growth [48][49] Question: Drivers for accelerating growth in Digital business - Management highlighted professional services as a key driver for expected growth in the Digital segment [50] Question: Cross-sell opportunities between Digital and Engage - Management noted a growing pipeline for cross-selling opportunities across both segments [52] Question: Organic revenue growth progression - Management provided guidance for organic revenue growth, indicating a strong Q1 performance but caution for the remainder of the year [53][54]