TTEC (US:TTEC)2024-05-10 07:42Financial Data and Key Metrics Changes - The company's revenue for Q1 2024 was $577 million, a decrease of 8.9% compared to $633 million in the prior year [101] - Adjusted EBITDA was $55 million, representing 9.5% of revenue, down from $83 million or 13.1% in the previous year [101] - Operating income decreased to $38 million or 6.6% of revenue from $61 million or 9.6% [101] - The net debt-to-EBITDA ratio was reported at 3.6, compliant with credit facility requirements [7] Business Line Data and Key Metrics Changes - The digital segment's revenue was $112 million, a decrease of 4.2% year-over-year, while managed services grew approximately 5% [5] - The Engage segment's revenue decreased by 10% to $465 million compared to the prior year [18] - The Engage backlog for the next 12 months is $1.76 billion, representing 96.5% of the 2024 revenue guidance midpoint, compared to 97% in the prior year [6] Market Data and Key Metrics Changes - The demand environment remains fluid, with client conservatism impacting budgeting and volume awards [8] - The company is experiencing variability and downward pressure in the telco vertical [2] - The digital segment's backlog increased to $399 million, or 80% of the 2024 revenue guidance midpoint, up from 75% in the prior year [18] Company Strategy and Development Direction - The company is focused on integrating technology and AI into operations to improve productivity and customer satisfaction [48] - New work types such as content moderation and data annotation are seen as growth opportunities [46] - The company aims to return to sustainable long-term organic growth and improve cash flow and balance sheet strength [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the attractiveness of the CX market and the company's differentiated technology capabilities [105] - The company anticipates a strong healthcare season in the latter half of the year, supporting its reiterated guidance [81] - Management believes that the industry is misunderstood and that new opportunities are emerging despite challenges [108] Other Important Information - Capital expenditures for Q1 2024 were $13 million, or 2.3% of revenue, compared to $14 million or 2.2% in the prior year [19] - The normalized tax rate increased to 32.7% from 26% in the prior year, primarily due to lower pre-tax income [19] Q&A Session Summary Question: How does the company view guidance amidst market conditions? - Management believes that Wall Street tends to overreact and maintains confidence in their guidance despite market challenges [108] Question: What is the status of anticipated headwinds? - Headwinds are as expected, with some clients beginning to change their cautious outlook for the better [80] Question: Is there a shift in onshore versus offshore demand? - The company reports strong demand for offshore capabilities, particularly in new geographies like South Africa, without cannibalizing onshore work [115][39]