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TTEC Announces Record Second Quarter 2021 Financial Results

Second Quarter 2021
Revenue Increased 22 Percent to $554.8 Million
Operating Income was $65.8 Million or 11.9 Percent of Revenue
(Non-GAAP $78.6 Million or 14.2 Percent of Revenue)
Net Income was $47.4 Million ($60.2 Million Non-GAAP)
Adjusted EBITDA was $95.7 Million or 17.3 Percent of Revenue
Fully Diluted EPS was $1.00 ($1.27 Non-GAAP)
Bookings of $204 million
Raises Outlook for Full Year 2021

DENVER, Aug. 3, 2021 /PRNewswire/ --  TTEC Holdings, Inc. (NASDAQ: TTEC) , one of the largest, global CX (customer experience) technology and services innovators for end-to-end digital CX solutions, announced today financial results for the second quarter ended June 30, 2021 .

"Our record revenue and profitability has us well positioned to achieve significant financial milestones in 2021 and beyond," commented Ken Tuchman, chairman, and chief executive officer. "Our continued velocity in growing our existing client volume and adding new clients has set us up for long-term growth as they leverage the full breadth of our CX offerings."  

Tuchman continued, "As the world becomes increasingly reliant on digital technology to work, study, play, communicate and collaborate, companies are seeking trusted partners like TTEC to help them infuse the best of these capabilities into their customer experiences. Through both our Digital and Engage businesses, we bring technology and humanity together by combining advanced analytics, customized CRM, AI-enabled technology solutions, and automation with talented brand ambassadors to deliver happy, loyal customers and breakthrough business results." 

SECOND QUARTER 2021 FINANCIAL HIGHLIGHTS               

Revenue        

  • Second quarter 2021 GAAP revenue increased 22.4 percent to $554.8 million compared to $453.1 million in the prior year period.
  • Foreign exchange had a $10.4 million positive impact on revenue in the second quarter 2021.

Income from Operations

  • Second quarter 2021 GAAP income from operations was $65.8 million, or 11.9 percent of revenue, compared to $49.0 million, or 10.8 percent of revenue in the prior year period.
  • Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, and other items, was $78.6 million or 14.2 percent of revenue versus $56.7 million or 12.5 percent for the prior year period.
  • Foreign exchange had a $1.1 million negative impact on income from operations in the second quarter 2021.

Adjusted EBITDA        

  • Second quarter 2021 Non-GAAP Adjusted EBITDA was $95.7 million or 17.3 percent of revenue, compared to $71.0 million or 15.7 percent of revenue in the prior year period.

Earnings Per Share

  • Second quarter 2021 GAAP fully diluted earnings per share was $1.00 compared to $0.67 for the same period last year.
  • Non-GAAP fully diluted earnings per share was $1.27 compared to $0.85 in the prior year period.

Bookings

  • During the second quarter 2021, TTEC signed an estimated $204 million in annualized contract value compared to $214 million in the prior year period. Second quarter bookings mix was diversified across segments, verticals, and geographies.

STRONG CASH FLOW AND BALANCE SHEET FUND INVESTMENTS AND DIVIDENDS

  • Cash flow from operations in the second quarter 2021 was $63.1 million compared to $43.1 million for the second quarter 2020.
  • Capital expenditures in the second quarter 2021 were $12.0 million compared to $15.1 million for the second quarter 2020.
  • As of June 30, 2021, TTEC had cash and cash equivalents of $174.7 million and debt of $842.5 million, resulting in a net debt position of $667.8 million . This compares to a net debt position of $231.7 million for the same period 2020. The increase in net debt is primarily attributable to the acquisition of Avtex Solutions Holdings, LLC in April 2021.
  • As of June 30, 2021, TTEC had approximately $360 million of additional borrowing capacity available under its credit facility compared to $195 million for the same period 2020.
  • Paid a $0.43 per share, $20.1 million in the aggregate, semi-annual dividend on April 21, 2021, an approximate 7.5 percent increase over the semi-annual dividend paid in October 2020 and a 26.5 percent increase over the April 2020 dividend.

SEGMENT REPORTING & COMMENTARY

TTEC reports financial results for the following two business segments: TTEC Digital (Digital) and TTEC Engage (Engage). Financial highlights for the two segments are provided below.

TTEC Digital – Design, build and operate tech-enabled, insight-driven CX solutions

  • Second quarter 2021 GAAP revenue for TTEC Digital increased 40.0 percent to $108.0 million from $77.1 million for the year ago period. Income from operations was $9.6 million or 8.9 percent of revenue compared to operating income of $14.4 million or 18.6 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $17.1 million, or 15.8 percent of revenue compared to operating income of $16.0 million or 20.7 percent of revenue in the prior year period.
  • Foreign exchange had a $1.2 million positive impact on revenue and negligible impact on income from operations.

TTEC Engage – Digitally-enabled customer care, acquisition, and fraud mitigation services

  • Second quarter 2021 GAAP revenue for TTEC Engage increased 18.8 percent to $446.8 million from $375.9 million for the year ago period. Income from operations was $56.3 million or 12.6 percent of revenue compared to operating income of $34.6 million or 9.2 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $61.5 million or 13.8 percent of revenue compared to operating income of $40.7 million or 10.8 percent of revenue in the prior year period.
  • Foreign exchange had a $9.2 million positive impact on revenue and $1.1 million negative impact on income from operations.

BUSINESS OUTLOOK

"We had an exceptional quarter that exceeded our revenue and profit forecast," commented Regina Paolillo, chief financial and administrative officer. "Our year-to-date 2021 results further underscore the market differentiation in our technology-rich customer experience-as-a-service offerings as we capitalize on the favorable trends within a large and growing addressable market."

Paolillo continued, "We believe our clients will continue to turn to TTEC as their trusted go-to-partner for exceptional CX technology and service solutions. We have a high degree of confidence in our improved 2021 outlook, including the revenue and profitability split between the third and fourth quarters of the year."

Our raised full-year 2021 outlook is as follows:

Revenue between $2.248 and $2.266 billion, an increase of 15.3 and 16.3 percent over the prior year.

Non-GAAP Operating Income margins between 12.4 and 12.7 percent.

  • Margin of approximately 13.3 percent for TTEC Digital and 12.4 percent for TTEC Engage

Non-GAAP Adjusted EBITDA margins between 15.3 and 15.7 percent.

  • Margin of approximately 16.2 percent for TTEC Digital and 15.3 percent for TTEC Engage

Non-GAAP Earnings Per Share between $4.35 and $4.51.

Capital expenditures are estimated to between 2.9 and 3.1 percent of revenue, of which approximately 60 percent is growth oriented.  

Effective tax rate for the full year is estimated between 22 and 24 percent.

Diluted share count for the full year is estimated between 47.2 and 47.6 million.

We estimate the second half 2021 mix as follows:

  • Revenue: 49 percent third quarter, 51 percent fourth quarter
  • Non-GAAP Operating Income: 44 percent third quarter, 56 percent fourth quarter
  • Non-GAAP Adjusted EBITDA: 45 percent third quarter, 55 percent fourth quarter
  • Non-GAAP Earnings Per Share: 43 percent third quarter, 57 percent fourth quarter

We estimate the Digital - Engage second half 2021 mix as follows:

  • Revenue: 20 percent Digital, 80 percent Engage, of which 47 percent of Digital and 52 percent of Engage in the fourth quarter, respectively.
  • Non-GAAP Operating Income: 24 percent Digital, 76 percent Engage, of which 44 percent of Digital and 60 percent of Engage in the fourth quarter, respectively.
  • Adjusted EBITDA: 23 percent Digital, 77 percent Engage, of which 45 percent of Digital and 58 percent of Engage in the fourth quarter, respectively.

NON-GAAP FINANCIAL MEASURES

This press release contains a discussion of certain Non-GAAP financial measures that the company includes to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these Non-GAAP financial measures can be found in the tables accompanying this press release.

  • GAAP metrics are presented in accordance with Generally Accepted Accounting Principles.
  • Non-GAAP - As reflected in the attached reconciliation table, the definition of Non-GAAP may exclude from operating income, EBITDA, net income and earnings per share restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, among other items.

ABOUT TTEC 

TTEC Holdings, Inc. (NASDAQ: TTEC) is one of the largest, global CX (customer experience) technology and services innovators for end-to-end, digital CX solutions. The company delivers leading CX technology and operational CX orchestration at scale through its proprietary cloud-based CXaaS (Customer Experience as a Service) platform.  Serving iconic and disruptive brands, TTEC's outcome-based solutions span the entire enterprise, touch every virtual interaction channel, and improve each step of the customer journey. Leveraging next gen digital and cognitive technology, the company's Digital business designs, builds, and operates omnichannel contact center technology, conversational messaging, CRM, automation (AI / ML and RPA), and analytics solutions.  The company's Engage business delivers digital customer engagement, customer acquisition & growth, content moderation, fraud mitigation, and data annotation solutions. Founded in 1982, the Company's singular obsession with CX excellence has earned it leading client NPS scores across the globe. The company's nearly 58,500 employees operate on six continents and bring technology and humanity together to deliver happy customers and differentiated business results. To learn more visit us at https://www.ttec.com

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TTEC Holdings, Inc.'s management and are subject to significant risks and uncertainties. We caution you not to rely unduly on any forward-looking statements. Actual results may differ materially from those expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences as outlined in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and any subsequent filings with the U.S. Securities and Exchange Commission (the "SEC") and is available on TTEC's website www.ttec.com, and on the SEC's public website at www.sec.gov. Specifically, important factors that could cause our actual results to differ materially from those indicated in the forward looking statements include, among others, are risks related to our business operations and strategy, including our strategy execution in a competitive market; our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share; our dependance on 3rd parties for our cloud solutions; the impact of COVID-19 on our business and our clients' business; risks inherent in our rapid transition to a work from home environment; our ability to attract and retain qualified and skilled personnel at a price point that we can afford and our clients are willing to pay; our M&A activity, including our ability to identify, acquire and properly integrate acquired businesses in accordance with our strategy; the risks related to our technology, including cybersecurity, the reliability of our information technology infrastructure and our ability to consistently deliver uninterrupted service to our clients; the risk related to our international operations; the risks related to legal impacts on our operations, in particular rapidly changing laws that regulate our and our clients' business, such as data privacy and data protection laws and healthcare, financial and public sector specific regulations, our ability to comply with these laws timely, and cost of wage and hour litigation in the United States; and risks inherent in our equity structure including our controlling shareholder risk, and Delaware choice of dispute resolution risks. TTEC Holdings, Inc. does not undertake to update any forward-looking statements.

 

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

                   
                   
     

Three months ended

 

Six months ended

     

June 30,

 

June 30,

     

2021

 

2020

 

2021

 

2020

                   

Revenue

 

$  554,794

 

$  453,081

 

$ 1,094,013

 

$    885,294

                   

Operating Expenses:

               
 

Cost of services

 

400,323

 

337,306

 

788,983

 

658,863

 

Selling, general and administrative

 

61,300

 

47,360

 

114,057

 

97,194

 

Depreciation and amortization

 

24,916

 

18,660

 

45,375

 

37,532

 

Restructuring and integration charges, net

1,725

 

793

 

2,127

 

1,331

 

Impairment losses

 

700

 

-

 

4,217

 

696

         Total operating expenses

 

488,964

 

404,119

 

954,759

 

795,616

                   

Income From Operations

 

65,830

 

48,962

 

139,254

 

89,678

                   
 

Other income (expense), net

 

(2,104)

 

(4,374)

 

(4,525)

 

(10,206)

                   

Income Before Income Taxes

 

63,726

 

44,588

 

134,729

 

79,472

                   
 

Provision for income taxes

 

(11,353)

 

(11,039)

 

(27,332)

 

(21,238)

                   

Net Income

 

52,373

 

33,549

 

107,397

 

58,234

                   
 

Net income attributable to noncontrolling interest

(5,004)

 

(2,224)

 

(9,610)

 

(5,375)

                   

Net Income Attributable to TTEC Stockholders

$    47,369

 

$    31,325

 

$      97,787

 

$      52,859

                   
                   

Net Income Per Share

               
                   
 

Basic

 

$       1.12

 

$       0.72

 

$         2.30

 

$         1.25

                   
 

Diluted

 

$       1.10

 

$       0.72

 

$         2.27

 

$         1.24

                   

Net Income Per Share Attributable to TTEC Stockholders

             
                   
 

Basic

 

$       1.01

 

$       0.67

 

$         2.09

 

$         1.14

                   
 

Diluted

 

$       1.00

 

$       0.67

 

$         2.06

 

$         1.13

                   
                   

Income From Operations Margin

 

11.9%

 

10.8%

 

12.7%

 

10.1%

Net Income Margin

 

9.4%

 

7.4%

 

9.8%

 

6.6%

Net Income Attributable to TTEC Stockholders Margin

8.5%

 

6.9%

 

8.9%

 

6.0%

Effective Tax Rate

 

17.8%

 

24.8%

 

20.3%

 

26.7%

                   
                   

Weighted Average Shares Outstanding

             

  Basic

 

46,840

 

46,619

 

46,792

 

46,559

  Diluted

 

47,409

 

46,861

 

47,388

 

46,838

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

(unaudited)

                 
                 
   

Three months ended

 

Six months ended

   

June 30,

 

June 30,

   

2021

 

2020

 

2021

 

2020

                 

Revenue:

               

TTEC Digital

 

$     107,995

 

$       77,143

 

$     171,582

 

$     154,699

TTEC Engage

 

446,799

 

375,938

 

922,431

 

730,595

Total

 

$     554,794

 

$      453,081

 

$  1,094,013

 

$     885,294

                 

Income From Operations:

               

TTEC Digital

 

$         9,565

 

$       14,376

 

$      13,767

 

$       24,634

TTEC Engage

 

56,265

 

34,586

 

125,487

 

65,044

Total

 

$       65,830

 

$       48,962

 

$     139,254

 

$       89,678

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

         
   

June 30,

 

 December 31, 

   

2021

 

2020

         
         

ASSETS

       

Current assets:

       

   Cash and cash equivalents

 

$         174,742

 

$       132,914

   Accounts receivable, net

 

354,662

 

378,397

   Other current assets

 

177,657

 

145,491

      Total current assets

 

707,061

 

656,802

         

Property and equipment, net

 

168,685

 

178,706

Other assets

 

1,161,882

 

680,900

         

Total assets

 

$      2,037,628

 

$     1,516,408

         

LIABILITIES AND EQUITY

       

Total current liabilities

 

$         410,210

 

$       396,170

Other long-term liabilities

 

1,040,317

 

609,500

Redeemable noncontrolling interest

 

54,800

 

52,976

Total equity

 

532,301

 

457,762

         

Total liabilities and equity

 

$      2,037,628

 

$     1,516,408

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

(unaudited)

                       
   

Three months ended

       

Six months ended

     

June 30,

           

June 30,

 
   

2021

 

2020

       

2021

 

2020

                       

Revenue

 

$  554,794

 

$  453,081

       

$ 1,094,013

 

$    885,294

                       

Reconciliation of Adjusted EBITDA:

                     
                       

Net Income

 

$    52,373

 

$    33,549

       

$    107,397

 

$      58,234

   Interest income

 

(230)

 

(491)

       

(409)

 

(855)

   Interest expense

 

3,381

 

3,104

       

5,183

 

12,696

   Provision for income taxes

 

11,353

 

11,039

       

27,332

 

21,238

   Depreciation and amortization

 

24,916

 

18,660

       

45,375

 

37,532

   Asset impairment, restructuring and integration charges

 

2,425

 

793

       

6,344

 

2,027

   Gain on sale of business units

 

-

 

(142)

       

-

 

(388)

   Changes in acquisition contingent consideration

 

169

 

(1,084)

       

1,046

 

(4,349)

   Grant income for pandemic relief

 

(2,012)

 

-

       

(8,044)

 

-

   Loss on dissolution of subsidiary

 

-

 

2,467

       

-

 

2,467

   Equity-based compensation expenses

 

3,371

 

3,057

       

7,399

 

5,976

                       

 Adjusted EBITDA

 

$    95,746

 

$    70,952

       

$    191,623

 

$    134,578

                       
                       

Reconciliation of Free Cash Flow:

                     
                       

Cash Flow From Operating Activities:

                     

   Net income

 

$    52,373

 

$    33,549

       

$    107,397

 

$      58,234

   Adjustments to reconcile net income to net cash

                     

       provided by operating activities:

                     

          Depreciation and amortization

 

24,916

 

18,660

       

45,375

 

37,532

          Other

 

(14,237)

 

(9,096)

       

(19,933)

 

9,512

   Net cash provided by operating activities

 

63,052

 

43,113

       

132,839

 

105,278

                       

Less - Total Cash Capital Expenditures

 

12,028

 

15,102

       

23,593

 

31,915

                       

Free Cash Flow

 

$    51,024

 

$    28,011

       

$    109,246

 

$      73,363

                       
                       

Reconciliation of Non-GAAP Income from Operations:

                     
                       

Income from Operations

 

$    65,830

 

$    48,962

       

$    139,254

 

$      89,678

Restructuring charges, net

 

1,725

 

793

       

2,127

 

1,331

Impairment losses

 

700

 

-

       

4,217

 

696

   Grant income for pandemic relief

 

(2,012)

 

-

       

(8,044)

 

-

   Equity-based compensation expenses

 

3,371

 

3,057

       

7,399

 

5,976

Amortization of purchased intangibles 

 

8,968

 

3,844

       

13,483

 

7,721

                       

Non-GAAP Income from Operations

 

$    78,582

 

$    56,656

       

$    158,436

 

$    105,402

                       

Non-GAAP Income from Operations Margin

 

14.2%

 

12.5%

       

14.5%

 

11.9%

                       
                       

Reconciliation of Non-GAAP EPS:

                     
                       

Net Income

 

$    52,373

 

$    33,549

       

$    107,397

 

$      58,234

Add:  Asset restructuring and impairment charges

 

2,425

 

793

       

6,344

 

2,027

Add:  Equity-based compensation expenses

 

3,371

 

3,057

       

7,399

 

5,976

Add:  Amortization of purchased intangibles

 

8,968

 

3,844

       

13,483

 

7,721

Add:  Interest charge related to future purchase of remaining
30% for Motif acquisition

 

-

 

(204)

       

-

 

6,273

Add:  Loss on dissolution of subsidary

 

-

 

2,467

       

-

 

2,467

Less:  Changes in acquisition contingent consideration

 

169

 

(1,084)

       

1,046

 

(4,349)

Less:  Gain on sale of business units

 

-

 

(142)

       

-

 

(388)

Less:  Grant income for pandemic relief

 

(2,012)

 

-

       

(8,044)

 

-

Less:  Changes in valuation allowance, return to provision
adjustments and other, and tax effects of items separately
disclosed above

 

(5,072)

 

(2,217)

       

(7,677)

 

(3,070)

                       

 Non-GAAP Net Income

 

$    60,222

 

$    40,063

       

$    119,948

 

$      74,891

                       

    Diluted shares outstanding

 

47,409

 

46,861

       

47,388

 

46,838

                       

 Non-GAAP EPS

 

$1.27

 

$0.85

       

$2.53

 

$1.60

 

Reconciliation of Adjusted EBITDA by Segment :

 

TTEC Engage

 

TTEC Digital

 

TTEC Engage

 

TTEC Digital

   

Q2 21

 

Q2 20

 

Q2 21

Q2 20

 

YTD 21

 

YTD 20

 

YTD 21

YTD 20

                             

Earnings before Income Taxes

 

$    54,156

 

$    30,190

 

$     9,569

$    14,398

 

$    120,918

 

$      54,772

 

$    13,810

$    24,700

   Interest income / expense, net

 

3,186

 

2,635

 

(33)

(22)

 

4,848

 

11,909

 

(72)

(67)

   Depreciation and amortization

 

16,427

 

15,382

 

8,489

3,278

 

32,999

 

30,966

 

12,376

6,566

   Asset impairment, restructuring and integration charges

 

1,566

 

679

 

859

114

 

5,476

 

1,010

 

867

1,016

   Gain on sale of business units

 

-

 

(142)

 

-

-

 

-

 

(388)

 

-

-

   Grant income for pandemic relief

 

(1,906)

 

-

 

(106)

-

 

(7,938)

 

-

 

(106)

-

   Changes in acquisition contingent consideration

 

169

 

(1,084)

 

-

-

 

1,046

 

(4,349)

 

-

-

   Loss on dissolution of subsidiary

 

-

 

2,467

 

-

-

 

-

 

2,467

 

-

-

   Equity-based compensation expenses

 

2,291

 

2,128

 

1,079

929

 

5,033

 

4,198

 

2,366

1,778

                             

 Adjusted EBITDA

 

$    75,889

 

$    52,255

 

$    19,857

$    18,697

 

$    162,382

 

$    100,585

 

$    29,241

$    33,993

 

Media Contact
Tim Blair
tim.blair@ttec.com
303.397.9267

Investor Contact
Paul Miller
303.397.8641

Address
9197 South Peoria Street
Englewood, CO 80112

Contact
ttec.com
+1.800.835.3832