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TTEC Announces Second Quarter 2023 Financial Results

Second Quarter 2023

Revenue was $600.4 Million
Operating Income was $31.3 Million or 5.2 Percent of Revenue
($50.6 Million or 8.4 Percent of Revenue Non-GAAP)
Net Income was $3.8 Million or 0.6 Percent of Revenue
($25.9 Million or 4.3 Percent of Revenue Non-GAAP)
Adjusted EBITDA was $67.2 Million or 11.2 Percent of Revenue
Fully Diluted EPS was $0.08 ($0.55 Non-GAAP)

Reiterates Outlook for Full Year 2023

DENVER , Aug. 3, 2023 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ:TTEC), a leading global CX (customer experience) technology and services innovator for AI-enabled CX with solutions from TTEC Engage and TTEC Digital, announced today financial results for the second quarter ended June 30, 2023.

"We delivered on our top priorities this quarter and exceeded the mid-point of our communicated financial guidance," commented Ken Tuchman, Chairman and chief executive officer of TTEC. "We made meaningful progress in TTEC Engage by further expanding our geographic footprint and language capabilities as well as continuing to grow our client portfolio with a focus on resilient verticals, including financial services, healthcare and public sector. In TTEC Digital, we expanded our strategic CX technology partnerships, launched new and innovative AI-related offerings, and continued to accelerate our pace of cloud migrations for clients. While it is early in the adoption of Generative AI for CX, we are actively working with our clients and CX technology partners on exciting pilots using private large language models, augmentation solutions for contact center associates, knowledge management solutions for AI-enablement, and advanced CX analytics."

Tuchman continued, "We enter the second half of the year with a healthy sales funnel and backlog. Recognizing that some of our clients are cautious in light of difficult to predict consumer demand, we maintain a prudent outlook for the remainder of the year. We have a high level of confidence in the factors we control and will remain agile and adapt to market conditions as they evolve."

SECOND QUARTER 2023 FINANCIAL HIGHLIGHTS                 

Revenue        

  • Second quarter 2023 GAAP revenue decreased 0.6 percent to $600.4 million compared to $604.3 million in the prior year period.
  • Foreign exchange had a $1.2 million negative impact on revenue in the second quarter of 2023.

Income from Operations

  • Second quarter 2023 GAAP income from operations was $31.3 million, or 5.2 percent of revenue, compared to $35.9 million, or 5.9 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 $50.6 million, or 8.4 percent of revenue, compared to $61.2 million, or 10.1 percent for the prior year period.
  • Foreign exchange had a $1.4 million positive impact on Non-GAAP income from operations in the second quarter of 2023.

Adjusted EBITDA

  • Second quarter 2023 Non-GAAP Adjusted EBITDA was $67.2 million, or 11.2 percent of revenue, compared to $80.6 million, or 13.3 percent of revenue in the prior year period.

Earnings Per Share

  • Second quarter 2023 GAAP fully diluted earnings per share was $0.08 compared to $0.61 for the same period last year.
  • Non-GAAP fully diluted earnings per share was $0.55 compared to $0.93 in the prior year period.

CASH FLOW AND BALANCE SHEET FUND INVESTMENTS AND DIVIDENDS

  • Cash flow from operations in the second quarter 2023 was $95.9 million compared to $77.6 million for the second quarter 2022.
  • Capital expenditures in the second quarter 2023 were $19.3 million compared to $19.1 million for the second quarter 2022.
  • As of June 30, 2023, TTEC had cash and cash equivalents of $114.8 million and debt of $919.0 million, resulting in a net debt position of $804.2 million. This compares to a net debt position of $771.5 million for the same period 2022. The increase in net debt is primarily attributable to capital distributions and acquisition-related investments, partially offset by positive cash flow from operations.
  • As of June 30, 2023, TTEC's remaining borrowing capacity under its revolving credit facility was approximately $265 million compared to $425 million for the same period 2022.
  • TTEC paid a $0.52 per share, or $24.6 million, semi-annual dividend on April 20, 2023 to shareholders of record on March 31, 2023. This dividend is unchanged over the October 2022 dividend and a 4.0 percent increase over the April 2022 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 2023 GAAP revenue for TTEC Digital increased 2.8 percent to $117.6 million from $114.4 million for the year ago period. Income from operations was $7.2 million or 6.1 percent of revenue compared to operating income of $10.8 million or 9.4 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $14.7 million, or 12.5 percent of revenue compared to operating income of $16.9 million or 14.8 percent of revenue in the prior year period.

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

  • Second quarter 2023 GAAP revenue for TTEC Engage decreased 1.4 percent to $482.8 million from $489.8 million for the year ago period. Income from operations was $24.1 million or 5.0 percent of revenue compared to operating income of $25.1 million, or 5.1 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $35.9 million, or 7.4 percent of revenue, compared to operating income of $44.2 million, or 9.0 percent of revenue in the prior year period.
  • Foreign exchange had a $0.8 million negative impact on revenue and $1.5 million positive impact on Non-GAAP income from operations.

BUSINESS OUTLOOK     

"We are pleased with our execution and second quarter financial results, in-line with our plan and above the mid-point of our revenue and profit guidance range," commented Francois Bourret, Interim Chief Financial Officer of TTEC. "In the second quarter, we prioritized investments around our CX technology capabilities and global delivery footprint expansion, while maintaining a company-wide agile cost structure."

Bourret continued, "Looking at the remainder of 2023, we continue to operate in a dynamic environment where consumers and organizations are taking a cautious approach to their spending priorities. This is impacting select clients' level of confidence, which may impact volumes as well as timing to commit to CX technology investments for the second half of the year. We remain focused on our execution and are re-affirming the mid-point of our full-year 2023 revenue and profit guidance range."

TTEC Full Year 2023 Outlook

             
 

Third Quarter 2023
Guidance

 

Third Quarter 2023
Mid-Point

 

Full Year 2023
Guidance

 

Full Year 2023
Mid-Point

Revenue

$593M$613M

 

$603M

 

$2,470M$2,530M

 

$2,500M

Non-GAAP adjusted EBITDA

$60M$66M

 

$63M

 

$290M$310M

 

$300M

Non-GAAP adjusted EBITDA margins

10.1% — 10.7%

 

10.4 %

 

11.7% — 12.3%

 

12.0 %

Non-GAAP operating income

$44M$50M

 

$47M

 

$221M$241M

 

$231M

Non-GAAP operating income margins

7.4% — 8.1%

 

7.8 %

 

9.0% — 9.5%

 

9.3 %

Interest expense, net

($18M) — ($20M)

 

($19M)

 

($74M) — ($76M)

 

($75M)

Non-GAAP adjusted tax rate

24% — 26%

 

25 %

 

24% — 26%

 

25 %

Diluted share count

47.3M — 47.5M

 

47.4M

 

47.3M — 47.5M

 

47.4M

Non-GAAP earnings per a share

$0.38$0.47

 

$0.43

 

$2.38$2.70

 

$2.54

               
               

Engage Full Year 2023 outlook

             
 

Third Quarter 2023
Guidance

 

Third Quarter 2023
Mid-Point

 

Full Year 2023
Guidance

 

Full Year 2023
Mid-Point

Revenue

$469M$481M

 

$475M

 

$1,980M$2,020M

 

$2,000M

Non-GAAP adjusted EBITDA

$42M$46M

 

$44M

 

$221M$235M

 

$228M

Non-GAAP adjusted EBITDA margins

9.0% — 9.6%

 

9.3 %

 

11.2% — 11.6%

 

11.4 %

Non-GAAP operating income

$30M$34M

 

$32M

 

$164M$178M

 

$171M

Non-GAAP operating income margins

6.3% — 7.0%

 

6.7 %

 

8.3% — 8.8%

 

8.6 %

               
               

Digital Full Year 2023 outlook

             
 

Third Quarter 2023
Guidance

 

Third Quarter 2023
Mid-Point

 

Full Year 2023
Guidance

 

Full Year 2023
Mid-Point

Revenue

$124M$132M

 

$128M

 

$490M$510M

 

$500M

Non-GAAP adjusted EBITDA

$17M$19M

 

$18M

 

$69M$75M

 

$72M

Non-GAAP adjusted EBITDA margins

14.0% — 14.7%

 

14.3 %

 

14.1% — 14.7%

 

14.4 %

Non-GAAP operating income

$14M$16M

 

$15M

 

$57M$63M

 

$60M

Non-GAAP operating income margins

11.5% — 12.3%

 

11.9 %

 

11.7% — 12.4%

 

12.1 %

The Company has not quantitatively reconciled its guidance for Non-GAAP operating income, Non-GAAP operating income margins, Non-GAAP adjusted EBITDA, Non-GAAP adjusted EBITDA margins, or Non-GAAP earnings per share to their respective most comparable GAAP measures because certain of the reconciling items that impact these metrics, including restructuring and impairment charges, cybersecurity incident-related costs, equity-based compensation expense, changes in acquisition contingent consideration, depreciation and amortization expense, and provision for income taxes are dependent on the timing of future events outside of the Company's control or cannot be reliably predicted. Accordingly, the Company is unable to provide reconciliations to GAAP operating income, operating income margins, net income margins, and diluted earnings per share without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the Company's 2023 financial results as reported under GAAP.

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 a leading global CX (customer experience) technology and services innovator for AI-enabled 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 and growth, content moderation, fraud prevention, 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 63,900 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 Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, results of operation, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance. In this release when we use words such as "may," "believe," "plan," "will," "anticipate," "estimate," "expect," "intend," "project," "would," "could," "target," or similar expressions, or when we discuss our strategy, plans, goals, initiatives, or objectives, we are making forward-looking statements.

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, 2022 and any subsequent filings with the U.S. Securities and Exchange Commission (the "SEC") which are available on TTEC's website www.ttec.com, and on the SEC's public website at www.sec.gov.  Important factors that could cause our actual results to differ materially from those indicated in the forward looking statements include, among others: the risks related to our business operations and strategy in a competitive market; our ability to innovate and introduce disruptive technologies that would allow us to maintain and grow our market share (e.g., effective adoption of artificial intelligence into our solutions); risks that may arise in connection with events outside of our control (macroeconomic conditions, geopolitical tensions, outbreaks of infectious diseases); risks inherent in a disruption and cybersecurity of our information technology systems, including cybersecurity criminal activity, which can impact our ability to consistently deliver uninterrupted service to our clients or unauthorized access to data, any of which may result in government investigations and enforcement actions, and private legal actions; risks inherent in the delivery of services by employees working from home; our ability to attract and retain qualified personnel at a price point that we can afford and our clients are willing to pay; our M&A activity, including our ability to properly integrate acquired businesses; our reliance on a relatively small number of TTEC Engage clients to generate the majority of our revenue and our reliance on technology partners to generate a large portion of TTEC Digital's revenue; the changes in laws and regulations that impact our and our clients' businesses, including the rapidly changing data privacy and data protection laws, healthcare business regulations, financial and public sector specific regulations; the cost of labor and data privacy litigation and other class action litigation; the risks related to our international operations including the stress that geographic expansion may have on our business, the impact if we are unable to expand geographically to meet our clients' demand; and risks inherent in our equity structure including our controlling shareholder risk, and Delaware choice of dispute resolution risks.

Our forward-looking statements speak only as of the date that this release is issued. We undertake no obligation to update them, except as may be required by applicable law. Although we believe that our forward-looking statements are reasonable, they depend on many factors outside of our control and we can provide no assurance that they will prove to be correct.

Investor Relations Contact

Paul Miller

+1.303.397.8641

Address

6312 S Fiddler's Green Circle, 100N 

Greenwood Village, CO 80111

Communications

Contact

Tim Blair

tim.blair@ttec.com

+1.303.397.9267

 

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,

     

2023

 

2022

 

2023

 

2022

                   

Revenue

 

$600,394

 

$604,250

 

$1,233,680

 

$1,192,976

                   

Operating Expenses:

               
 

Cost of services

 

464,686

 

463,510

 

947,364

 

910,725

 

Selling, general and administrative

 

75,338

 

66,766

 

149,348

 

131,605

 

Depreciation and amortization

 

24,946

 

26,314

 

50,773

 

52,944

 

Restructuring charges, net

 

1,474

 

2,528

 

3,527

 

3,148

 

Impairment losses

 

2,652

 

9,248

 

6,959

 

10,360

         Total operating expenses

 

569,096

 

568,366

 

1,157,971

 

1,108,782

                   

Income From Operations

 

31,298

 

35,884

 

75,709

 

84,194

                   
 

Other income (expense), net

 

(21,439)

 

188

 

(37,011)

 

(2,118)

                   

Income Before Income Taxes

 

9,859

 

36,072

 

38,698

 

82,076

                   
 

Provision for income taxes

 

(6,102)

 

(7,274)

 

(14,024)

 

(15,308)

                   

Net Income

 

3,757

 

28,798

 

24,674

 

66,768

                   
 

Net income attributable to noncontrolling interest

(2,546)

 

(3,564)

 

(4,816)

 

(8,130)

                   

Net Income Attributable to TTEC Stockholders

$    1,211

 

$  25,234

 

$     19,858

 

$     58,638

                   
                   

Net Income Per Share

               
                   
 

Basic

 

$     0.08

 

$     0.61

 

$        0.52

 

$        1.42

                   
 

Diluted

 

$     0.08

 

$     0.61

 

$        0.52

 

$        1.41

                   

Net Income Per Share Attributable to TTEC Stockholders

             
                   
 

Basic

 

$     0.03

 

$     0.54

 

$        0.42

 

$        1.25

                   
 

Diluted

 

$     0.03

 

$     0.53

 

$        0.42

 

$        1.24

                   
                   

Income From Operations Margin

 

5.2 %

 

5.9 %

 

6.1 %

 

7.1 %

Net Income Margin

 

0.6 %

 

4.8 %

 

2.0 %

 

5.6 %

Net Income Attributable to TTEC Stockholders Margin

0.2 %

 

4.2 %

 

1.6 %

 

4.9 %

Effective Tax Rate

 

61.9 %

 

20.2 %

 

36.2 %

 

18.7 %

                   
                   

Weighted Average Shares Outstanding

             

  Basic

 

47,264

 

47,047

 

47,249

 

47,026

  Diluted

 

47,453

 

47,383

 

47,417

 

47,381

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)

(unaudited)

                 
                 
   

Three months ended

 

Six months ended

   

 June 30,

 

 June 30,

   

2023

 

2022

 

2023

 

2022

                 

Revenue:

               

TTEC Digital

 

$117,585

 

$114,433

 

$   234,512

 

$   225,847

TTEC Engage

 

482,809

 

489,817

 

999,168

 

967,129

Total

 

$600,394

 

$604,250

 

$1,233,680

 

$1,192,976

                 

Income From Operations:

               

TTEC Digital

 

$    7,154

 

$  10,751

 

$      7,939

 

$     16,956

TTEC Engage

 

24,144

 

25,133

 

67,770

 

67,238

Total

 

$  31,298

 

$  35,884

 

$     75,709

 

$     84,194

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

         
   

 June 30,

 

 December 31,

   

2023

 

2022

         

ASSETS

       

Current assets:

       

   Cash and cash equivalents

 

$   114,776

 

$         153,435

   Accounts receivable, net

 

402,664

 

417,637

   Other current assets

 

203,697

 

178,898

      Total current assets

 

721,137

 

749,970

         

Property and equipment, net

 

189,049

 

183,360

Operating lease assets

 

111,764

 

92,431

Goodwill

 

808,613

 

807,845

Other intangibles assets, net

 

216,168

 

233,909

Other assets

 

124,578

 

86,447

         

Total assets

 

$2,171,309

 

$      2,153,962

         

LIABILITIES AND EQUITY

       

Current liabilities:

       

   Accounts payable

 

$     84,335

 

$           93,937

   Accrued employee compensation and benefits

 

149,919

 

145,096

   Deferred revenue

 

91,757

 

87,846

   Current operating lease liabilities

 

35,620

 

35,271

   Other current liabilities

 

89,607

 

49,214

      Total current liabilities

 

451,238

 

411,364

         

Long-term liabilities:

       

   Line of credit

 

915,000

 

960,000

   Non-current operating lease liabilities

 

89,388

 

69,575

   Other long-term liabilities

 

74,144

 

79,273

      Total long-term liabilities

 

1,078,532

 

1,108,848

         

Redeemable noncontrolling interest

 

3,997

 

55,645

         

Equity:

       

   Common stock

 

473

 

472

   Additional Paid in Capital

 

396,444

 

367,673

   Treasury stock

 

(592,306)

 

(593,164)

   Accumulated other comprehensive income (loss)

 

(90,463)

 

(126,301)

   Retained earnings

 

906,518

 

911,233

   Noncontrolling interest

 

16,876

 

18,192

      Total equity

 

637,542

 

578,105

         

Total liabilities and equity

 

$2,171,309

 

$      2,153,962

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

       
 

 Six months ended

 

 Six months ended

 

  June 30,

 

  June 30,

 

2023

 

2022

       

Cash flows from operating activities:

     

     Net income

$                 24,674

 

$                 66,768

     Adjustment to reconcile net income to net cash provided by operating activities :

     

          Depreciation and amortization

50,773

 

52,944

          Amortization of contract acquisition costs

1,158

 

1,063

          Amortization of debt issuance costs

534

 

500

          Imputed interest expense and fair value adjustments to contingent consideration

6,762

 

-

          Provision for credit losses

1,704

 

198

          Loss on disposal of assets

856

 

1,116

          Impairment losses

6,959

 

10,360

          Loss on dissolution of subsidiary

301

 

-

          Deferred income taxes

(10,390)

 

(9,161)

          Excess tax benefit from equity-based awards

243

 

(913)

          Equity-based compensation expense

9,802

 

7,882

          Loss / (gain) on foreign currency derivatives

247

 

224

          Changes in assets and liabilities, net of acquisitions:

     

                Accounts receivable

14,645

 

(38,271)

                Prepaids and other assets

20,324

 

35,866

                Accounts payable and accrued expenses

43,429

 

21,041

                Deferred revenue and other liabilities

(27,072)

 

(58,345)

                    Net cash provided by operating activities

144,949

 

91,272

       

Cash flows from investing activities:

     

     Proceeds from sale of property, plant and equipment

28

 

102

     Purchases of property, plant and equipment

(32,954)

 

(35,790)

     Acquisitions

-

 

(142,420)

          Net cash used in investing activities

(32,926)

 

(178,108)

       

Cash flows from financing activities:

     

     Net proceeds / (borrowings) from line of credit

(45,000)

 

139,000

     Payments on other debt

(1,217)

 

(1,877)

     Payments of contingent consideration and hold back payments to acquisitions

(37,676)

 

(9,600)

     Dividends paid to shareholders

(24,572)

 

(23,518)

     Payments to noncontrolling interest

(5,887)

 

(7,219)

     Tax payments related to the issuance of restricted stock units

(629)

 

(3,065)

          Net cash (used in) / provided by financing activities

(114,981)

 

93,721

       

Effect of exchange rate changes on cash and cash equivalents and restricted cash

1,275

 

(12,350)

       

Increase in cash, cash equivalents and restricted cash

(1,683)

 

(5,465)

Cash, cash equivalents and restricted cash, beginning of period

167,064

 

180,682

Cash, cash equivalents and restricted cash, end of period

$               165,381

 

$               175,217

 

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,

     
   

2023

 

2022

       

2023

 

2022

     
                             

Revenue

 

$600,394

 

$604,250

       

$1,233,680

 

$1,192,976

     
                             

Reconciliation of Non-GAAP Income from Operations and EBITDA:

                         
                             

Income from Operations

 

$  31,298

 

$  35,884

       

$     75,709

 

$     84,194

     

Restructuring charges, net

 

1,474

 

2,528

       

3,527

 

3,148

     

Impairment losses

 

2,652

 

9,248

       

6,959

 

10,360

     

Cybersecurity incident related impact, net of insurance recovery

 

26

 

(167)

       

(3,210)

 

3,669

     

Grant income for pandemic relief

 

40

 

-

       

40

 

-

     

Change in acquisition related obligation

 

483

 

-

       

483

 

-

     

Equity-based compensation expenses

 

5,648

 

4,143

       

9,802

 

7,882

     

Amortization of purchased intangibles

 

9,007

 

9,554

       

18,010

 

19,090

     
                             

         Non-GAAP Income from Operations

 

$  50,628

 

$  61,190

       

$   111,320

 

$   128,343

     
                             

         Non-GAAP Income from Operations Margin

 

8.4 %

 

10.1 %

       

9.0 %

 

10.8 %

     
                             

Depreciation and amortization

 

15,939

 

16,760

       

32,763

 

33,854

     

Changes in acquisition contingent consideration

 

3,584

 

-

       

6,762

 

-

     

Change in escrow balance related to acquisition

 

-

 

-

       

625

 

-

     

Loss on dissolution of subsidiary

 

-

 

-

       

301

 

-

     

Foreign exchange loss / (gain), net

 

578

 

(3,473)

       

1,212

 

(4,516)

     

Other Income (expense), net

 

(3,574)

 

6,111

       

(2,919)

 

7,371

     
                             

         Adjusted EBITDA

 

$  67,155

 

$  80,588

       

$   150,064

 

$   165,052

     
                             

         Adjusted EBITDA Margin

 

11.2 %

 

13.3 %

       

12.2 %

 

13.8 %

     
                             

Reconciliation of Non-GAAP EPS:

                           
                             

Net Income

 

$    3,757

 

$  28,798

       

$     24,674

 

$     66,768

     

Add:  Asset impairment and restructuring charges

 

4,126

 

11,776

       

10,486

 

13,508

     

Add:  Equity-based compensation expenses

 

5,648

 

4,143

       

9,802

 

7,882

     

Add:  Amortization of purchased intangibles

 

9,007

 

9,554

       

18,010

 

19,090

     

Add:  Cybersecurity incident related impact, net of insurance recovery

 

26

 

(167)

       

(3,210)

 

3,669

     

Add:  Grant income for pandemic relief

 

40

 

-

       

40

 

-

     

Add:  Change in acquisition related obligation

 

483

 

-

       

483

 

-

     

Add:  Changes in acquisition contingent consideration

 

3,584

 

-

       

6,762

 

-

     

Add:  Changes in escrow balance related to acquisition

 

-

 

-

       

625

 

-

     

Add:  Loss on dissolution of subsidiary

 

-

 

-

       

301

 

-

     

Add:  Foreign exchange loss / (gain), net

 

578

 

(3,473)

       

1,212

 

(4,516)

     

Less:  Changes in valuation allowance, return to provision adjustments

and other, and tax effects of items separately disclosed above

 

(1,349)

 

(6,782)

       

(6,384)

 

(12,176)

     
                             

         Non-GAAP Net Income

 

$  25,900

 

$  43,849

       

$     62,801

 

$     94,225

     
                             

             Diluted shares outstanding

 

47,453

 

47,383

       

47,417

 

47,381

     
                             

         Non-GAAP EPS

 

$0.55

 

$0.93

       

$1.32

 

$1.99

     
                             

Reconciliation of Free Cash Flow:

                           
                             

Cash Flow From Operating Activities:

                           

   Net income

 

$    3,757

 

$  28,798

       

$     24,674

 

$     66,768

     

   Adjustments to reconcile net income to net cash provided by operating activities:

                       

          Depreciation and amortization

 

24,946

 

26,314

       

50,773

 

52,944

     

          Other

 

67,188

 

22,474

       

69,502

 

(28,440)

     

   Net cash provided by operating activities

 

95,891

 

77,586

       

144,949

 

91,272

     
                             

Less - Total Cash Capital Expenditures

 

19,285

 

19,099

       

32,954

 

35,790

     
                             

        Free Cash Flow

 

$  76,606

 

$  58,487

       

$   111,995

 

$     55,482

     
                             
                             

Reconciliation of Non-GAAP Income from Operations and Adjusted EBITDA by Segment :

                   
   

TTEC Engage

 

TTEC Digital

 

TTEC Engage

 

TTEC Digital

   

Q2 23

 

Q2 22

 

Q2 23

Q2 22

 

YTD 23

 

YTD 22

 

YTD 23

YTD 22

                             

Income from Operations

 

$  24,144

 

$  25,133

 

$  7,154

$10,751

 

$     67,770

 

$     67,238

 

$  7,939

$16,956

Restructuring charges, net

 

801

 

2,415

 

673

113

 

1,793

 

3,035

 

1,734

113

Impairment losses

 

2,652

 

9,248

 

-

-

 

4,105

 

10,360

 

2,854

-

Cybersecurity incident related impact, net of insurance recovery

 

26

 

(167)

 

-

-

 

(3,210)

 

3,669

 

-

-

Grant income for pandemic relief

 

40

 

-

 

-

-

 

40

 

-

 

-

-

Change in acquisition related obligation

 

-

 

-

 

483

-

 

-

 

-

 

483

-

Equity-based compensation expenses

 

3,596

 

2,834

 

2,052

1,309

 

6,272

 

5,286

 

3,530

2,596

Amortization of purchased intangibles

 

4,652

 

4,784

 

4,355

4,770

 

9,302

 

7,999

 

8,708

11,091

                             

         Non-GAAP Income from Operations

 

$  35,911

 

$  44,247

 

$14,717

$16,943

 

$     86,072

 

$     97,587

 

$25,248

$30,756

                             

Depreciation and amortization

 

13,572

 

13,696

 

2,367

3,064

 

27,888

 

27,700

 

4,875

6,154

Changes in acquisition contingent consideration

 

3,584

 

-

 

-

-

 

6,762

 

-

 

-

-

Change in escrow balance related to acquisition

 

-

 

-

 

-

-

 

625

 

-

 

-

-

Loss on dissolution of subsidiary

 

-

 

-

 

-

-

 

301

 

-

 

-

-

Foreign exchange loss / (gain), net

 

411

 

(3,105)

 

167

(368)

 

1,112

 

(4,082)

 

100

(434)

Other Income (expense), net

 

(3,422)

 

5,776

 

(152)

335

 

(2,910)

 

7,094

 

(9)

277

                             

         Adjusted EBITDA

 

$  50,056

 

$  60,614

 

$17,099

$19,974

 

$   119,850

 

$   128,299

 

$30,214

$36,753