TTEC Holdings, Inc. ((TTEC)) has held its Q2 earnings call. Read on for the main highlights of the call.
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TTEC Holdings, Inc.’s recent earnings call painted a picture of strategic progress and financial resilience, despite facing some revenue challenges. The sentiment was largely positive, driven by advancements in AI and analytics, client growth, and operational improvements, even as the company navigated revenue declines and currency impacts.
Increase in Adjusted EBITDA
TTEC reported a notable increase in adjusted EBITDA, which rose to $52 million, marking a 12% year-over-year increase. This was accompanied by a 140 basis point margin improvement to 10.1%, showcasing the company’s effective cost management and operational efficiency.
Free Cash Flow Surge
The company experienced a significant surge in free cash flow, reaching $86 million in the second quarter. This represents a substantial rise from $35 million in the prior year, contributing to a meaningful reduction in borrowings and strengthening TTEC’s financial position.
Expansion in AI and Analytics
TTEC is making significant strides in AI and analytics, implementing technologies that have enhanced operational efficiency and client engagement. These advancements are central to the company’s strategy for long-term growth and competitive advantage.
Strong Performance in New Client Acquisition
Over the past 18 months, TTEC has successfully secured 15 new large enterprise clients. Notably, 9 of these clients have expanded their business with TTEC, including 3 that more than doubled their initial spend, highlighting the company’s strong market presence and client satisfaction.
Engage Segment Revenue Outperformance
The Engage segment exceeded revenue expectations due to higher-than-expected growth in the embedded base, with a backlog of $1.64 billion. This performance underscores the segment’s robust demand and strategic importance to TTEC’s overall business.
Accenture Neutralization Technology
TTEC’s new AI-based accent neutralization technology is enhancing customer experience and opening new markets for talent acquisition. This innovation is expected to drive further growth and diversification in the company’s offerings.
Revenue Decline
Despite these positive developments, TTEC reported a consolidated revenue of $514 million, a decrease of 3.8% compared to the prior year. This decline reflects challenges in the market environment and currency fluctuations.
Foreign Exchange Impact
The depreciation of the U.S. dollar against foreign currencies negatively impacted the Engage segment’s full-year EBITDA guidance by 6%, highlighting the challenges posed by currency volatility.
Digital Segment Revenue Decrease
The Digital segment’s revenue for the second quarter was $114 million, a decrease of 2.3% over the prior year. Despite this, the segment achieved operating income margin improvements, indicating effective cost management.
High Tax Rate
TTEC faced a high normalized tax rate of 43.4% for the second quarter of 2025, up from 33.7% in the prior year, impacting the company’s net earnings.
Forward-Looking Guidance
Looking ahead, TTEC remains committed to expanding its AI and analytics capabilities and diversifying its CX technology partner network. The company aims for long-term growth and increased client engagement, with an updated financial outlook for 2025 that includes a revenue midpoint of $2.09 billion. This incorporates a $50 million increase in Engage guidance, partly due to foreign exchange impacts.
In summary, TTEC Holdings, Inc.’s earnings call highlighted a positive sentiment driven by strategic advancements in AI and analytics, strong client acquisition, and operational improvements. Despite facing revenue declines and currency impacts, the company remains focused on long-term growth and financial resilience, positioning itself well for future success.