TTEC (US:TTEC)2019-11-09 04:15Financial Data and Key Metrics Changes - Year-to-date revenue increased by 8.5% to nearly $1.2 billion, with over 99% being organic growth [9] - Adjusted EBITDA rose by 17% to $146 million, adjusted operating income increased by 46% to $86 million, and adjusted EPS grew by 44% to $1.24 [10] - On a GAAP basis, organic revenue increased by 8.4% to $395.5 million, with operating income at $26 million or 6.6% of revenue [35] Business Line Data and Key Metrics Changes - TTEC Digital revenue grew by 31.8% and operating income by 43% [29] - TTEC Engage revenue increased by 4.2% and operating income by 48.2% [29] - TTEC Digital's cloud subscription-based offering grew by 197% with a gross margin of 44% [30] Market Data and Key Metrics Changes - The overall addressable market for TTEC's technology and services is estimated at $460 billion, with TTEC Engage at the center of a $360 billion market and TTEC Digital adding an incremental $100 billion opportunity [13] - The company reported a 10% increase in total client engagements over the last 12 months [21] Company Strategy and Development Direction - The company is focused on transitioning from legacy contact centers to digitally enabled customer experience hubs, emphasizing the integration of Digital and Engage solutions [8][11] - TTEC aims to enhance growth through strategic acquisitions and partnerships, including a recent acquisition of FCR [31][45] - The company is leveraging partnerships with Cisco and LivePerson to expand its cloud-based offerings and enhance customer experience [24][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong top and bottom line growth in 2020 and beyond, despite some short-term challenges [26][46] - The company anticipates a reduction in revenue churn from 15.6% to 12.5% in 2020, which is expected to support future revenue growth [34] Other Important Information - Capital expenditures were $16 million in Q3 2019, reflecting investments in facilities and technology [38] - The Board approved a $0.32 annual dividend per share, representing a 14.3% increase over the previous year [39] Q&A Session Summary Question: Capital allocation strategy regarding dividends, debt repayment, and acquisitions - Management emphasized a focus on organic growth, strategic acquisitions, and maintaining dividends, with a strong balance sheet to support these initiatives [51][52] Question: Contribution of FCR acquisition in Q4 and guidance implications - FCR is expected to contribute approximately $12 million in Q4, with a double-digit growth rate anticipated [54][55] Question: Percentage of business from government-related work and margin profile - Government work constitutes about 20% of overall business, with margins in line with other segments [61][88] Question: Improvements in Days Sales Outstanding (DSO) - DSO improvements are attributed to process enhancements rather than changes in payment terms [62] Question: Impact of Cisco and LivePerson partnerships on demand and margins - The partnerships are expected to enhance demand and margins by leveraging existing client bases and expanding service offerings [64][72]