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Teleperformance (TLPFY)
OTHER OTC:TLPFY
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Teleperformance
(OTC:TLPFY)
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Rating:62Neutral
Price Target:
$35.00
▲(5.07% Upside)
Action:DowngradedDate:03/02/26
The score is held back mainly by weakening financial momentum (2025 revenue decline, pressured gross margin, higher leverage) and bearish technicals (below key moving averages with negative MACD). This is partially offset by very attractive valuation (low P/E and high dividend yield) and a cautiously constructive earnings outlook supported by strong historical cash generation and cost-savings initiatives, despite modest 2026 growth guidance and one-off costs.
Positive Factors
Strong free cash flow generation
Consistent, high free cash flow provides durable funding for dividends, buybacks, capex and transformation spending. Over the medium term this cash conversion supports capital allocation and reduces refinancing risk, underpinning financial flexibility despite temporary profit or FX swings.
Large AI and efficiency program
A structured TP.ai rollout targeting material run‑rate savings is a structural productivity lever in labor‑intensive BPO. If executed, automation and AI can sustainably lower delivery costs, improve margins and offset wage inflation, reinforcing competitive cost position over 2–6 months and beyond.
Global scale and geographic diversification
Large scale across multiple regions and languages lets Teleperformance win enterprise contracts, spread fixed costs and shift capacity to stronger markets. Geographic diversification cushions regional cycles and supports stable contract flow and margins over the medium term.
Negative Factors
2025 revenue contraction & major contract losses
A material revenue decline and nonrenewal of sizable Specialized Services contracts indicate structural client concentration or service‑mix risk. Continued contract attrition reduces revenue durability, pressures utilization and margin recovery, and raises execution demands for offsetting wins or scopes.
Elevated leverage and weakening equity
Rising leverage and falling equity reduce balance‑sheet flexibility and increase interest and refinancing exposure. Higher indebtedness constrains strategic optionality—M&A, aggressive buybacks or dividend growth—and amplifies stress if cash flow or margins deteriorate further.
Significant FX translation and margin headwinds
Large FX translation impacts make reported revenue and margins volatile and can erode cash flow when the euro strengthens. Persistent currency headwinds complicate forecasting and may blunt margin recovery, forcing price renegotiations or cost cuts to protect profitability.
Teleperformance (TLPFY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.92B
Dividend Yield6.84%
Average Volume (3M)1.20K
Price to Earnings (P/E)7.6
Beta (1Y)0.81
Revenue Growth9.69%
EPS Growth-22.10%
CountryUS
Employees446,052
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)3.64
Shares Outstanding119,748,730
10 Day Avg. Volume0
30 Day Avg. Volume1,204
Financial Highlights & Ratios
PEG Ratio-1.07
Price to Book (P/B)0.88
Price to Sales (P/S)0.37
P/FCF Ratio3.19
Enterprise Value/Market Cap2.01
Enterprise Value/Revenue0.77
Enterprise Value/Gross Profit3.48
Enterprise Value/Ebitda4.47
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)8.17
Revenue Forecast (FY)$11.99B
Teleperformance Business Overview & Revenue Model
Company DescriptionTeleperformance SE, together with its subsidiaries, provides outsourced customer and citizen experience management, and related services in France and internationally. The company operates in two segments, Core Services and Digital Integrated Business Services, and Specialized Services. It offers customer and citizen care; technical support; and customer acquisition services, as well as back-office solutions and integrated services, including social media content moderation services and data labeling for automation solutions; and knowledge services in the field of analytics solutions, automated systems, and artificial intelligence. The company also manages business processes, as well as provides digital platform, consulting, and data analysis services; and business process outsourcing services for government agencies. In addition, it offers online interpreting services; visa application management and consulate services for government departments; online healthcare navigation and advocacy services; and accounts receivable credit management services. The company serves automotive, energy and utilities, insurance, public sector, technology, travel and hospitality, and banking and financial services, as well as healthcare, media, retail and e-commerce, crypto, cargo, telecom, and video games industries. Teleperformance SE was incorporated in 1910 and is headquartered in Paris, France.
How the Company Makes MoneyTeleperformance generates revenue primarily through its comprehensive suite of customer experience management services, which are billed based on service contracts with clients across multiple industries. The company's revenue model includes various streams such as service fees for call handling, client-specific projects, and performance-based incentives. Significant partnerships with leading global brands enable Teleperformance to secure long-term contracts, contributing to stable revenue flow. Additionally, the company's focus on technology-driven solutions, including AI and automation, enhances operational efficiency and allows for scalable service offerings, further boosting its earnings potential.
Teleperformance Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presents a mixed but constructive picture: the company met its updated 2025 objectives, delivered strong cash generation (record H2 and EUR 901m FCF), stabilized leverage below 2x, advanced a large AI and efficiency program (>500 AI projects; >EUR 100m targeted run‑rate savings), and announced governance renewal and a dividend increase (+7%). Offsetting this, Specialized Services saw significant revenue declines (loss of major contracts ~EUR 140m), FX translation materially reduced reported results (c. EUR 362m impact), and management expects Q1 2026 to be softer with one‑time restructuring costs in 2026 and a lower FCF guidance (EUR 800–850m). Overall, the positives — delivery against targets, strong cash flow, clear transformation initiatives and a strengthened governance/strategy platform — outweigh the near‑term operational and FX headwinds, but investors should monitor Specialized Services, FX sensitivity and execution of the AI/efficiency programs.Q4-2025 Updates
Positive Updates
Revenue and Like-for-Like Growth
Group net revenue of EUR 10.2 billion for FY2025 with like‑for‑like growth of +1.3% (excluding hyperinflation effects). Core Services delivered stable growth of +2.7% like‑for‑like.
Geographic Strengths
Strong regional momentum: Americas grew +1.4% like‑for‑like and EMEA delivered close to +4% like‑for‑like, with notable strength in the U.K., South Africa, Egypt, India and Latin America.
Profitability and Margins Met Guidance
EBIT (before nonrecurring items) reported around EUR 1.485 billion with an EBITDA margin reported at ~14.6% (stable versus guidance). Management confirmed delivery versus updated 2025 objectives.
Record Second‑Half Cash Generation and Strong Free Cash Flow
Record H2 cash generation of >EUR 640 million (H2: EUR 642 million) and full‑year free cash flow of EUR 901 million, demonstrating robust cash conversion.
Balance Sheet and Capital Allocation
Net debt stabilized below 2x EBITDA; average cost of debt below 4% and average maturity ~3 years. Board proposed a dividend increase of +7% to EUR 4.50 per share and returned 42% of free cash flow to shareholders via dividend and buybacks.
AI and Future Forward Initiatives
Launched >500 AI projects and the TP.ai strategy; internal AI & efficiency program targeting >EUR 100 million run‑rate savings in 2026 (with planned one‑time implementation costs). Data services for AI and sales/BPO lines showed strong growth (AI data services double‑digit, sales ~7% of group with high single‑digit growth, back‑office/BPO double‑digit).
Strategic & Governance Renewal
Board initiated governance renewal with appointment of incoming CEO Jorge Amar (AI/customer experience expert) starting March 16 and co‑option of new Board members; management launched a comprehensive strategic portfolio review (including potential divestitures and M&A).
Selective M&A and Scope Growth
Scope additions (ZP consolidated and Agents Only) contributed positively to revenue scope effect (~EUR 196 million), helping offset some Specialized Services declines.
Controlled Investment and CapEx Discipline
CapEx was maintained and increased in high‑demand markets to ~2.4% of sales, supporting growth while preserving investment in future capabilities.
Negative Updates
Specialized Services Revenue Downsignificantly
Specialized Services faced material headwinds with like‑for‑like decline of more than -9% driven by nonrenewal of significant contracts (notably Visa/TLScontact/UKVI), with a disclosed contract impact of around EUR 140 million.
Foreign Exchange Translation Headwind
Adverse FX translation effects reduced reported revenue and margins (total negative currency translation impact cited at ~EUR 362 million for the year, with deterioration concentrated in H2), contributing roughly half (~20 bps) of the ~40 bps EBITDA margin decline versus prior year.
One‑off Impairments and Profitability Impact
Impairment charge of approximately EUR 67 million for PSG (recruiting business) booked in 2025, which reduced net profit (net profit ~EUR 500 million in FY2025 vs EUR 523 million in FY2024, ~‑4.4% year‑on‑year).
Trust & Safety Revenue Contraction
Trust & Safety revenues declined and now represent ~8% of group revenue (down from ~10% previously), attributed to client automation and market changes in that segment.
Short‑Term Guidance Headwinds and Q1 Softness
2026 guidance calls for group revenue growth of 0% to +2% but management expects Q1 to be below the annual guidance range due to continued onshore market softness (U.S. and Continental Europe) and Specialized Services uncertainties.
Restructuring / One‑time Costs and Near‑term Cash Guidance
Future Forward efficiency program expects one‑time implementation costs of EUR 70–90 million in 2026 (EUR 56 million already recognized in Jan–Feb); net free cash flow guidance for 2026 is lower than 2025 at EUR 800–850 million (excluding nonrecurring items) due to a stronger euro and FX translation effects on cash conversion.
Margin Headwinds from Investments
EBITDA margin was ~40 basis points lower year‑on‑year; management attributes ~20 bps to FX, ~15 bps to AI/IT and holding investments, and residual impacts from lost contracts—limiting near‑term margin expansion.
Company Guidance
The company guided 2026 revenues to grow 0–2% (noting Q1 is expected to be below that range), with a stable reported EBITDA margin of 14.6% (assumes USD/EUR $1.20) and net free cash flow of EUR 800–850m excluding non‑recurring items (i.e., slightly below 2025’s EUR 901m due to a strong euro); management also targets >EUR100m of AI‑driven run‑rate savings in 2026 (with ≈EUR50m expected to materialize this year) while incurring one‑off implementation costs of EUR 70–90m (EUR 56m already recorded in Jan–Feb), has proposed a dividend increase to EUR 4.50/share (from EUR 4.20, ≈+7%) for shareholder approval, expects a 2026 tax rate below 30%, and says the balance sheet remains healthy (net debt below ~2x EBITDA, average debt cost <4%, average maturity ~3 years), assuming no major FX shocks.Teleperformance Financial Statement Overview
Summary
Fundamentals are acceptable but trending weaker: 2025 shows revenue contraction (-4.98%), a sharp drop in gross margin, and rising leverage (debt-to-equity ~1.36) alongside declining equity. Offsetting this, profitability at the operating/EBITDA level has been relatively steady and cash conversion is solid, though 2025 free cash flow fell materially (-18.1%).Income Statement
Revenue growth has weakened materially, shifting from modest growth in 2023–2024 to a decline in 2025 (-4.98%). Profitability is mixed: operating and EBITDA margins have held relatively steady around the high-teens at the EBITDA level, but net margin has drifted lower versus 2022–2023. A notable concern is the sharp drop in 2025 gross margin versus prior years, suggesting higher delivery costs and/or pricing pressure, even as operating margin remained resilient.62
Positive
Balance Sheet
Leverage is elevated and trending worse in 2025, with debt rising and the debt-to-equity ratio increasing to ~1.36 (from ~1.08 in 2024). Equity has also declined from 2024 to 2025, reducing balance-sheet flexibility. Returns on shareholders’ equity remain solid but have come down from the stronger 2021–2022 levels, indicating profitability is not expanding fast enough to offset the higher leverage.56
Neutral
Cash Flow
Cash generation is a relative strength: free cash flow has consistently exceeded net income across the period (roughly 0.76–0.88x), supporting earnings quality. However, 2025 cash flow weakened meaningfully versus 2024, with free cash flow down and growth turning negative (-18.1%). Operating cash flow covers a moderate portion of debt (roughly ~0.45–0.58x across years), which is helpful but not strong enough to fully offset the higher leverage profile.68
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 9.81B | 10.28B | 8.35B | 8.15B | 7.12B |
| Gross Profit | 1.15B | 3.35B | 2.60B | 1.81B | 1.50B |
| EBITDA | 1.82B | 1.91B | 1.38B | 1.37B | 1.14B |
| Net Income | 477.38M | 523.00M | 602.00M | 643.00M | 557.00M |
Balance Sheet | |||||
| Total Assets | 11.47B | 12.07B | 11.75B | 8.86B | 8.35B |
| Cash, Cash Equivalents and Short-Term Investments | 1.12B | 1.10B | 926.00M | 846.00M | 858.00M |
| Total Debt | 5.55B | 4.91B | 5.43B | 3.42B | 3.50B |
| Total Liabilities | 7.38B | 7.52B | 7.52B | 5.19B | 5.19B |
| Stockholders Equity | 4.10B | 4.56B | 4.23B | 3.67B | 3.16B |
Cash Flow | |||||
| Free Cash Flow | 1.13B | 1.59B | 1.14B | 947.00M | 876.00M |
| Operating Cash Flow | 1.37B | 1.81B | 1.38B | 1.25B | 1.11B |
| Investing Cash Flow | -707.91M | -221.00M | -2.59B | -602.00M | -1.16B |
| Financing Cash Flow | -622.43M | -1.40B | 1.32B | -715.00M | -173.00M |
Teleperformance Technical Analysis
Neutral
33.31
Price Trends
33.11
Negative
34.26
Negative
39.44
Negative
Market Momentum
-0.12
Negative
55.03
Neutral
93.33
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TLPFY, the sentiment is Neutral. The current price of 33.31 is above the 20-day moving average (MA) of 30.91, above the 50-day MA of 33.11, and below the 200-day MA of 39.44, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 55.03 is Neutral, neither overbought nor oversold. The STOCH value of 93.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TLPFY.
Teleperformance Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.57B | 16.50 | 9.10% | 2.20% | 4.62% | 102.72% | |
72 Outperform | $4.50B | 21.89 | 6.50% | 0.71% | 0.20% | 2.72% | |
64 Neutral | $4.26B | 12.60 | 22.09% | 1.38% | 2.36% | 11.30% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $2.10B | -72.27 | -2.66% | ― | 93.41% | -2515.85% | |
62 Neutral | $3.92B | 7.56 | 11.38% | 6.84% | 9.69% | -22.10% | |
60 Neutral | $1.61B | -10.04 | 7.44% | ― | 59.19% | -35.47% |
* Industrials Sector Average
TLPFY
Teleperformance
32.88
-20.31
-38.18%
ABM
ABM Industries
43.84
-6.24
-12.45%
CBZ
CBIZ
29.16
-41.00
-58.44%
MMS
Maximus
78.01
9.11
13.22%
UNF
UniFirst
259.17
55.58
27.30%
FA
First Advantage
12.06
-0.99
-7.59%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.