TTEC - Earnings call transcript Q2 2018

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Operator

Welcome to TTEC’s Second Quarter 2018 Earnings Conference Call. I would like to remind all parties that you will be on listen-only mode until the question-and-answer session. This call is being recorded at the request of TTEC. I would now like to turn the call over to Paul Miller, TTEC’s Senior Vice President, Treasurer and Investor Relations Officer. Thank you, sir.

begin. may You

Paul Miller

on thank Paolillo, hosting and results. release financial joining today. Officer. Executive issued XXXX. us for our TTEC Ken Good and Yesterday, Chief Chairman call you its Financial to announcing is Chief Participating XX, June this period and quarter press call discuss TTEC financial are the Tuchman, Regina morning Officer; ended for today’s our its a results Administrative second and

discussed encourage within our report items document, read this for the about reflect While XX-Q. call quarterly information that financial second complete will our Form on quarter, you in performance we also to

performance, want may a reflect business assumptions. outlook, opinions this financial Before and undertake Please I no our to obligation we this management’s call that you which as of are as of on forward-looking include that based revise that call, these begin, beliefs date of related may matters occur. we result on note to new developments and statements today’s statements operating goals the discussed forward-looking current and information remind our to

differ statements from described various subject uncertainties to and are those factors could cause actual results today. Forward-looking expected that and risks, the other to materially

our Executive the now For Chairman TTEC’s Officer. under please A will report on to on will the Chief our replay call I a Form Investor over section. turn of risk detailed website of review Ken complete available and be XX-K. description Relations factors, our annual call this Tuchman, conference

Ken Tuchman

good for Thanks, participating morning, Paul, on you Thank call. and everyone. today’s

our services We’ve TTEC business. We’ve customer operational experience take digital the as worked to hard strategic consulting, legacy data view services offering modern been we’ve a for from a always provider is its our technology, transparent transform has first-class of to with strategy been partner Our and to deliberate analytics and company. care transformation. evolved long

pipeline, unprecedented experiencing and year customer evidenced volume and world This the are increases, segments, engagement and is technology and over which customer accelerating. up digital services. geographies interactions and the industries we demand XX% becomes more our for and business the is the is growing of across our As momentum well-diversified by last

their chip are exciting disruptors solutions help attracting them urgently blue growth. actual as up navigating surging as brands, partners experience seeking high-growth well transformation, customer keep digital with their Our to

in year bookings. Our we highest second into This booked the robust over is years. million, XX% represents achieved sequentially. increase converting In XXX% last XX pipeline quarter rapidly and rapid milestone XXX over the same the a bookings quarterly period

to excess XXXX with trend continue XXXX. growth year the full bookings over in expect We of XX%

In which addition, strong or cloud offerings, Customer cloud strategy a as on offering. to grow benchmarking business over especially continues We growth, XXXX against other in its XX%, licenses value performance cloud we this manage businesses, revenue our exceed we market full XX%. are are and on outperform we business to expected approaching specific to in SaaS our top cloud XXX,XXX currently the expected is project margins this CTS, approximately Through with gross particular, significantly performance are technology bottomline, and our Technology year customer our plans. In to meet to our experiencing SaaS space. full globally, -- scale, year providers its basis

TTEC’s encouraged which current businesses, that are a multiple. on multiples is We the these by is marketplace the valuation overall over premium

and secure, governmental segment companies as that omnichannel growth with further enterprise to We scalable. technology more outdated more and replace flexible accelerate cloud are technology our expect in the solutions size premise-based

as for our platform. analysts technology experience platforms Our me, cloud Humanify the meet are end-to-end solution Excuse differentiator a to transformation technology plus third-party are growing demand in this well-positioned market. billion $XXX citing increasingly customer

the XX with complete a competitive the confident mass when infrastructure and locations a firm pipeline, potential on-premise Ovum were learning a opportunities our the serve month, will business. bookings solutions, chose the be technology cloud multinational in leaders our Technology platform deal remain technology of customer and large that Customer Included experience from countries scope supported and space. teams. of recognized Forrester, is cloud by rigid third-party replace will and With platform and firms, XX this full analyst programs technology this optimization our its media of as several we performance additional information about with solutions with second our in Just in emerging growth quarter’s set to the

rate, was our the unanticipated, While second are achieve overall with our challenges, XXXX performance strategic temporary quarter short us growth our to our up of that a adversely longer-term met acceleration in results. financial setting impacting bookings is list

and to will fallen relate timing Regina cost. where these originally behind in wage Management related levels bookings, of price All detail have unexpected is we the significant market, later our our timing the accounts of healthcare an namely ramping to bookings Customer our increase provide her plan related in which of U.S. over the a anticipated, in to segment, topics on certain in increase performance comments. cost increases than U.S. more

We bottomline to one, and are customer meantime, on outcomes-based experience specific demand an the number me compelling some margin. In be confident essential. rate our our by year. that the Trend share topline end-to-end of end these and support let solution will has cleared and the expanding for trends growth to become challenges XXXX, this are temporary views

and brands seamless searching them Although, quickly we to experience fluid globe companies for service experts are for help digital transformation an nimble that their on model The survival, experiences. focused new for are design some is across a day imperative have more outpace delight. execute and been intuitive and To redesign the necessity customer every as time, a recognizing. disruptors, disruptors increasingly these providing simple, satisfy that digital are promises digitally

disruptor largest our disrupted to of category. growing of the rapidly into falls quarter the One wins second be

shared health provider as their support traditional were to transition neighborhood Our client trusted their their and current design for operational strategic customer future. partner in experiencing centricity. full a who transformation. needs services. relevant support the expanding to and retailer seeking are capabilities and suite To their role is a and they vision massive a company their Fortune of expanded wellness ongoing a to the beyond because XXX They chose TTEC brand capabilities we remain the of passion They they ensure have and

The quarter for customer number estimates the customer expertise multiple our remaining for closed U.S. of in-house captive $XX as from on This customer are $XXX Companies being The that same transformation domain enabling thought Trend That from is majority only the accounts significant experience outsource. third-party is spent billion. They pressures deals included and spent we business. need to market Everest for managing in experience XX% elements XX% of segments domain of the operations the is the soaring. on analyst spend digital that overall technology two, leadership internal expertise, programs. operations these of compete. the experience need those billion. facing

Our TTEC of excellence digital spot. is center operating sweet the in

is transformation the frictionless in are As to the stack the accelerate market working report are consultants create of clients, teams is our business spending growing to our Trend our enable in plans seamlessly customer technology a text transformation XXXX. then across detailed on of link our strategy with strategic consultants off operating find customer executives, change deliver lifecycle, for for by experience case According front-end handing consultants expected the customer full cloud-based helping the model, interactions roadmap senior in excellence catalyzing three, execution, their to to our strategy to to digital Western to required to the are to Europe. target brands Europe IDC, experience. in omnichannel

clients brands Europe pursuing a embedded sales the Europe, As improve base. and partners closed new environment. team an are expanded year grown and help several relationships short the increased our economy Western in marketing expertise we to investment to focus. with our with pipeline, robust In with Earlier built time a proven in we continues very this service navigate new

the addition, In safety safety does four, By we estimate moderation Motif, will digital XX growing becomes trust sources digital this increase, company. brand Digital cost for content with United regional awards safety of digital every excellence. impacting and lightning multiple interactions in To online. billion. rod fraud protecting acquired clients as business that recognized paramount. address a and a is been imperative, customer innovation Trend year XXXX that we’ve last help our delivery exceed States issue several late

of Our terms trust safety in growing. revenue income, and operating and over demand is and performing is division

quarters the aspirations to customer moderation offer We come. in high and expect the platform our are active further as discussions several end-to-end true clients adoption global We and fraud Today of digital are experience in market accelerate ever. the a for offerings as differentiation. TTEC for to with our content

continue marquee or innovation, holistic future our long-term engagement We current is in to digital to and operational with pipeline and in like and We to investments performance financial relevant of focused ensuring in of Transformation have incredible Services we’re and commitments a team, and segment, with a developed our enabled technology growing is Customer platform, to bookings relevant, is and profitability, straightforward. our the experienced unique success, maintain powerful confirmation our for pragmatic approach service valuable customer while base excellence go-to-market simple balance be our not outcomes not satisfied assembled while ours momentum that demand. Management a engine an built deliver company had clients. an our

the behalf and of call into focused our support and bookings our Regina. on the continuing TTEC to to rapidly look continued ramping sharing We to forward and look to at On in I of will several an us new we pipeline strategy of to for convert quarters. progress turn all deliver As the improved the second strong thank confident remain your we’re you over business now topline. next our half year, over

Regina Paolillo

morning. Good Ken. Thanks,

results, are results. quarter to in to regarding expected by short-term nature Before our XXXX. of I be CMS remediated items end I our temporary our items the These to into segment, like contexts affecting certain are XXXX and jump some would relate first provide exclusively

guidance At across basis, restructuring held with are -- in business performance are and year with both revenue guidance. margin Our the business time, one to second the short list segments a following included non-GAAP hand full and a extremes. in timing. over CTS same bookings comments numbers and sale, and faced noteworthy which our operating a quarter challenges, charges. segment have On have outperforming and for the The do the a of is CMS temporary tale assets excluding is impairment we performance two on CA the most CGS of of CSS,

XX% positive On reaching grew our XX% basis. percentage in digital to year versus XXX estimated full this XXXX, offering approximately XX% to grow The XX%. side, XXXX of margin a the percentage basis on the offering the gross half margin gross estimated total expand of in first cloud is in it’s approximately points and company

first the XXXX, full margin of XXXX, in approximately Our XXX and basis year digital The to estimated half basis. XX% systems is integration XX% estimated reaching approximately grow business XX%. in this points a it’s on offering grew to expand gross of

business after and Our to XX% and Digital in first declining Operating in expand on the Customer it’s in points approximately estimated full basic. X% XXXX XXXX half Acquisition XXXX, grow estimated margin to a basis of year reaching is approximately in grew second XX% half XXX the X%.

declining by business both Our its XXX approximately is estimated in margin expand basis after operating and in reaching Digitally points, X% XXXX grow approximately to XX%. XXXX Focused and XXXX Consulting

selling and generation sales, relationships, focus sales geographic generation, growing new on demand the existing executives in lead focused inside partners has client including and mid-market. Europe focused a been our footprint recent clients hypergrowth on Our and platform digital expanded Asia-Pacific transformed, on in end-to-end client

XXXX deals. half segment prior delivering more second year versus increasingly XX% than the cross pipeline is grown larger more Our has and and

grow XXXX The growth second XX%, bodes expect the rate growth This The to our of example to U.S. We overall bookings is Despite XXXX. and excess CMS’ and year-over-year, and adjusting mix offshore guidance improve pricing offshore in signed expansion. XXXX. second of relevant is in is for of half. income. in platform to percentage our a that CMS up our that operating CMS XXXX to wages noteworthy and rate. operating related Our in third XX% now related Based second we XX% in the anticipate go-to-market contribute work to well the of quarter supporting improved good quarter, bookings estimated we our grew deliver changes our $XXX higher our into the operating topline bookings future trending these topline in bookings has adjustments on bookings growth growth to are both to continue million, includes pricing will full tailwinds, year in reflect quarter and growth profitability. full market improving the margins revenue assumptions potential already up CMS’ bookings year million. $XXX

success retention be our net with revenue $XX of impacting book bookings, set market-based follows. by pricing foreign in increases is $XX our reducing To-date are of million enable which to and associated delays customer we related $X the have U.S. related in million, CMS working CMS plan, $XX in had our certain are adjustment full rate have is anticipated, We wages acquisition tied that than originally the our to ahead of clients are later they business to revenue expected U.S. experience the to bookings associates. our as markets. new million our with approximately estimates, our to in year exchange in changes guidance in success while and in wage good timing U.S. been temporarily XXXX.

to and in rate we expanded $XX to foreign is associated to year profit relates be third pricing CMS’ approximately previously following. implementation changes business with million points will a higher relates signed the CMS The rate comfortably the full to is increases million at the U.S. wage our $X XX% due rate bookings, operating in million deliver growth half translates XXXX costs. into in to on million $XX business delay growth U.S. is $X the year. new operating revenue of first primarily GAAP basis CMS margin expect timing rate up full discussed in attributable to $X for estimates, the the With in earlier, mentioned, margin bookings tied already basis a in CMS’ million XXX higher and quarter exchange XXXX. and

of we over we more business result ramping CMS’ anticipated a the in timing and now are through than bookings, quarters. the fourth As performance and second of originally

ramping in approximately our same we in claim. per year. the the U.S. be versus period X,XXX healthcare finally, period tied costs, increases claims relates is X,XXX In number an number last the $X million cost in fact, And will increase the in of associates to in this to of average

remain We healthcare XXXX ensuring platform of redesign the are and of to making while improve the we in market process wellness, to the XXXX in we competitive. cost our will platform changes

of We are confident we forward. going can cost achieve a lower healthcare

approximately in second expect $XXX.X to compared company revenue to X.X% the was on XXXX in to on U.S. happening, our quarter and view to year ramp effect to Our new business X%. impacts income we X.X% return million, temporary income increase volumes, highlight our finalize down GAAP mix, a as which operating operating the is million, will income that financial I X% changes negotiations reported revenue, they Operating CMS’ over XXXX platform our to last now fully pricing revenue these business, fully our quarter offshore On nature, XXXX’s wages prior all basis tied quarter. are the of healthcare of margin same the year. $XX.X of results. we already existing is

operating period. had from impact restructuring the XXX Diluted second down $X.XX in of second in $X.X and adoption income. In margin revenue income the The quarter charges. prior share a per were ASC earnings million on million of year $X.XX, million $X.X quarter operating a as includes -- the positive $X

impairment $X.XX the a a year. charges Foreign in was prior restructuring income for which X.X% period EBITDA or impacted revenue and of same by million last in from by On million or $X.XX last held period. X.X% a declined ago sale operating exchange a year from Adjusted versus assets to positive and year, organic decrease Non-GAAP negatively $XXX,XXX basis $XXX.X $X excludes revenue a the non-GAAP and operating million $XX.X million. was income decreased XX.X% X.X%. year Non-GAAP revenue in over quarter. approximately the decrease EPS was X.X% XX.X%, revenue, $XX.X period same

tied over $X.X Second with other included interest XX% quarter safety buyout the the expense and our a to income and Motif, applications remaining of associated Motif trust non-cash expense minority in performance. million estimated

was markdown to for related assets a Additionally, sale. the and other of expense net held impacted income loss non-cash by

The second year the Our income. quarter tax our taxable to X.X%, reported income to of in lower tax taxable in rate global prior period. rate X.X% the distribution compared low the in was XXXX relates

last second was XX.X% XX.X% quarter versus The XXXX rate year. tax normalized

Our year. as anticipate the capacity XXXX ramp quarter XX% new and unchanged the exceed utilization utilization was in we support the over of prior second to programs and in XX% We work expanding fourth quarter. seasonal

$X.X to $XX.X down in XXXX X.X% the our non-GAAP year. quarter second which segment results, second GAAP from are XXXX second CMS’ amounts I to cover in decreased reconciliation non-GAAP revenue a of now press basis attached will quarter the our are release. tables million. million or year quarter Year-to-date sequentially. a on million prior year a in declined function were million of in decline in Our lower flat to $XXX This XXXX expenditures debt was is XXth. second days as $XX.X the in to us operations prior million second allowing which paying second compared flow by quarter, $XX.X in to addition is revenue ASC were year positively period. $X.X million, XX was Organic prior to quarter cash $XX.X income days the $X.X $X.X by over an of X%. strong CMS’ a income up X.X% prior $XX.X quarter. to the operating flow in million, compared and $XXX.X reduce the million net dividend million XXX quarter. of and free of profitability prior million our higher X.X% CMS’ revenue, the semiannual period from a was DSO’s to cash This revenue year. XX impacted from and or million million million June operating $XX.X the Capital $XX.X

$X impact earlier. discussed our guidance operating while items operating based on revenue $X fell the approximately exceeded positively and Revenue Foreign by income short income by exchange million $XXX,XXX negatively million.

and tied second Operating of increased over the impact X.X% million quarter follows. the the pricing healthcare and CGS’ were year. million second $X of the in the timing to income to increase million X.X% to of to last million $X increased the tied to bookings, million XX.X% tied timing XXXX costs. revenue, the prior million ramps, business $X.X of to year. Specifically, $XX.X tied revenue to as $X.X compared new increases, $X.X or quarter timing in XX.X%

move demand year Our top to CTS the previous of XXX XX% XX.X% margin improvement bottomline our in the now anticipate new basis of and continue, our the plan in a increase associated in bottomline segment exceed The and increase operating second further CGS income, top in sequentially. CGS systems programs our X.X% our and trends million improvement we represents CTS expansion expect delivering prior and basis year a in segment existing cloud-based reporting the point favorable full half is client or year to revenue. more $XX.X full and production. million center further delivery and as integration including improvement for uptick services. We $X.X The over guidance contact exceeded XXX into and second to quarter in a point revenue guidance.

bookings and scale, we a continue customer design, implement technology that the have to experiencing expand both platform wins to cloud. also expertise manage on-premise their have and in existing are experience large and our offerings. and clients client attachment As showcase our add-on companies CTS’ we pipeline in modernize confidence Ken the that rates governments and are a exceptionally and mentioned, and as multinational service we strong, in beneficial as or trend our upgrade

expanding and starting landscape are mid-market the this see to platform our expect we we sell the Humanify omnichannel to which the business. Connect in further operate Additionally, of applicability to

segment of million expect slight lower anticipate a revenue our dip basis. given XXX CTS $X prior revenue previous increased the While and product XXXX, down full on and outperform guidance improved the in in quarter a year. up third of over Operating to revenue percentage the CSS’ X.X% the margins, in from basis second XX.X% quarter XX.X% the $XX.X income Sequentially, income was margin operating or we prior year income we a points. year. revenue XX.X% operating margin million was

increase within Growth Strategy Technology our pleased and our Customer of collaboration with are businesses. with those practices with profitability We talent CSS’ and Management and improved business Customer

Looking operating meet full original ahead, revenue we guidance. and anticipate income our year CSS to

the income the foreign compared includes peak XX.X% guidance, versus to billion, basis to in for income growth operating XX% $X,XXX of a XX% $X,XXX consolidated midpoint charges, XX% X.X% and and a of CTS third XX% to and of income third CMS XX.X% with and We in quarter growth revenue XX% operating at to operating quarter, income impairment as billion revenue billion our XX% income versus revenue full X% the our income EBITDA the of XX% estimate On solutions of which with a in a excludes anticipate in to year revenue and guidance, we margin and Turning experience reduction $X,XXX between X% the X.X% prior the to increase original guidance. and X.X% operating of products and of guidance, XX% the X% year, range revenue held versus as year We operating services the fourth XX%. $X,XXX deliver Capital in our the year and and XX.X% adjusted XXXX and revenue expenditure and sale, unchanged supported midpoint guidance. to historical basis the invested the our XXX is volumes of in of our of by but adoption between guidance. XX% in XX% continuum. unchanged restructuring a year approximate now revenue operating across XX.X% full third exchange, of our of of income of X% quarter. our of of between assets prior is we the versus the and and our with prior and our our the between X.X% of our billion revenue, and distribution original original year using range the estimate to tax seasonal estimate with and quarter. X.X% rate On strategy and income growth third CGS income versus growth XX% quarter, revenue XX% third we the growth XX% customer quarter, operating XX% income of portfolio the and of follows. growth the deliberately of CSS revenue operating diversify of the using versus in operating of XX% the our XX% segment and reduction X% performance operating in and vital with We prior in revenue

We analytically scale, growing marketplace. cloud-based customer more are to our improve increase at in delivering relevance digital, and and experience rich the ready solutions strategic a

we segment and to ability management call back confident extraordinarily While growth our on Paul. backlog customer focused we performance we are bookings, and pleased back will the projected level remain growth operating turn get our topline of businesses, growth now are improving this customer I and and and with with higher delivering track, predictable, technology, more in current trajectory delivering keenly profitability, the improved on to our an margin. our strategy, revenue

Paul Miller

Regina. Thanks,

As the may call, open your lines. we two a one open or you Operator, we now the that time. you at to limit questions ask

Operator

Thank you.

George Our first Craig-Hallum. question from from comes Sutton

line Your now open. is

George Sutton

relative but were promise I question. wondered question. a Number of it’s Unfortunately could limit lastly, deal a talk number discuss numbers, versus whopping just the and win what the the the CMS looking bookings impacting three, the number and in will one to the cycles? can you you like which numbers traditional, both the Europe rate context much about one, obviously strong, following. is pipeline I -- are length non-CMS, four-part myself to how of in if I those two, Western

Ken Tuchman

be could Real question, are part your George. last the Hi, you? How It’s explicit? little quickly, a more of you Ken.

George Sutton

of length of terms In cycles? deal

Ken Tuchman

a was -- I a point question after that? there thought

George Sutton

no. No,

Just have -- great book had bookings and you you -- obviously a…

Ken Tuchman

Yeah.

George Sutton

… very solid pipeline?

Ken Tuchman

Yeah.

So…

George Sutton

just am the trying context? to understand I in it

Ken Tuchman

and start will Regina make last will the in. it sure I first one and weigh then, I’m with So

overall, across cycles, the from and is is us, segments in contract far all definitively for to to we As cycle are of are Each deal time, deals a deal of therefore, segment as are very on obvious cycle time. seeing reasons. compression going period shorter a time different contact exciting which

the cloud taking year XX example, a premise mega deals longer. even So half if in SaaS They seats, length that to anywhere Solutions are historically now a and those used to take XX,XXX were from months. when X,XXX, in it’s for eight Technology probably segment, a deal enterprise and they months sometimes deals

and On They deals very the are significant six area. the the smaller cloud in well CTS opportunity and still taking size under months.

So, again, depends that to of it where really as deals, longer there’s multi-country, lots and takes it the to a obviously, deal, company multi-national well cetera, implement within those win it’s as et divisions, organizations them.

also Our implementation time cloud dramatically. down on our large deal come has

are it’s XX countries we’ve live, to consulting all take if the five segment. cloud go required to learned we don’t live we advantage necessary, training that’s the deals implementation are all cases As I from engineering and really completing the on implementation time. XX, the period deals in and et upfront months process helpful times of that a that’s of know how in in entire where going and the or cetera some small so seeing XX days large less, very on about

be -- cases on averaging keep a are few XX On -- and are just may if would as through, days much of going as contact as days that to kind the we be contract and XXX the XXX larger very deals long long day. in that consulting some as

that’s that isn’t six-month take the CMS now are deals that a On So say few seeing amount from months average Not to we cases, On those I think days. nine-month XX are areas in clients, a deals, XXX on deals multinational, -- months. mount in CGS six take especially multinational, of getting that fair in relatively to some would deals there exceptions to targeting -- XX I’d might done getting a nine I relatively slightly that deals where say to that, on months, which and contact contract seeing do And days, historically But type done that the the quickly on substantial timeframe. Services, under number. we’re used we are good longer. growth Growth are pretty quick. do we hyper

has it urgency, of do -- that we gone don’t with and feeling most so contact bit contract a legacy seeing I and of it on because waxing has are overall, So, brands do to of compression this the urgent. from do, on so with is has important to sense are many digital would there’s to to say, very that to the a that. time increased overall, Part an economy. this disruptive of transformation is Part to about from we good I

So answer that’s question. it. maybe I one it. your this the hope of some question, I is since of answered multi-part rest going to part can you Regina, of

Regina Paolillo

Yeah. -- I the we bookings, is a XX% bookings, back it’s up to about is year-to-date the of XX%. overall basis XXX go mix said, up XX% points as basis, point on and a Overall, will year. last bookings CMS are from up bookings just maybe the on CMS

good the are good is, year-to-date. growing the the percentage, segments in having not, topline not is really the news others of a is So of and that are because that’s CMS in terms all success in a momentum the through

some to made especially comments have guidance. changing We the relative

there have CMS would QX. on folks relative we help expect to to have the mix point terms in some in on lot if What Ken, you significant will are things the than quarter think, of can. were say, we terms be time. of I things of be is get better bookings of out in But I comments to line understand contexts to anything other to trying and bookings be a in kind third the that what closing of made exceptional were more the we metric I that bookings expected have that or else that we We quarter from higher. that view, would And that qualitative there -- already there covered slightly

George Sutton

rates? Western win finally, Well, much a curious about obviously in having? is focus is that your and And how impact Europe are I how I’m just general new was curious then,

Ken Tuchman

it relatively Yeah. momentum. I a would I mean, small, overall, speaking, say, tremendous there’s relatively is but

that. We total Again, value. contract our We bookings are $XX report They bookings. of of million talking are are not shy value. remember contract annual don’t

is, and say in. area a historically of focus an lot a would I have we is what that that not but put of energy lot So

on are our confident countries that that to we across acceleration Western are myriad looking see significant very capabilities. focusing some very area and these going are across of We so are -- now for much European we that a

Regina Paolillo

the And multiple $X context. QX More some will off terms million. in them over did has me just are I of half elements. of a we let rattle add have XX that bookings. bookings than In

Ken Tuchman

Multiple segments.

Regina Paolillo

segments. Multiple

Ken Tuchman

That multiple… of took advantage

Regina Paolillo

extended our to our -- Multiple the across we a government retail segments. One, had very noteworthy pharma elements multiple new We department. logos. relationship have two noteworthy segments in from our and

-- average of our deal the over Our prior XX% of size deal year. average -- up size is the

in embedded We an seeing continues industry with good be base view online retailers, is new and the interesting growth mix are are future… making our to continued in our point headway volumes well of up, from our for of offshoring significant which our we logos healthcare, bulk seeing bodes penetrating

Ken Tuchman

Margins.

Regina Paolillo

the of in having than start wage it’s will that from are the Philippines given to point are success I U.S. of those And getting note bookings we the to in things have important competitive. again business, right more of faster some more the more that markets view with for the happen in quarter rates new U.S. grow that margins … on a U.S. think all and pricing quarters, our number a and of

George Sutton

details. Okay. Great

Sorry question. for the lengthy

Ken Tuchman

you. No worries. Thank

Operator

Instructions] SunTrust. Our question Frank Atkins [Operator from comes next from

Your line is open. now

Frank Atkins

Thank you for taking my questions.

bit of update on -- mix? an headcount you get by little the offshore onshore on total of or could of geography I a kind headcount could can and give First, color you mix

Ken Tuchman

want go. I second, to kind One of

Regina Paolillo

the XX,XXX people of grow. and end So Philippines U.S., U.S. the and with starting is that in would the bulk that the the to I we up say quarter slightly around Philippines and are at of

Frank Atkins

Okay. And there any That’s helpful. weakness can CMS industry? by an then, areas update in strength give of segment, the or and are industry exposure on you

Ken Tuchman

all -- what Well, is, would of activity. let see, that, I from verticals to showing you actually now say are a a the is lot right

online services, doing as well retail financial very definitely services, is business healthcare, well. tech, Specifically,

a So other extremely because of is I are is traveling basis. mention of and global guess, a economy are on areas activity, is area lot that travel, being should the with travel now, I the say so that I would where many right the people really seeing, there’s those well that it we just doing

As far industry like vertical. as, weakness, actually any I particular concerned feel about don’t or we’re too

answering your that’s question? if know don’t I So

Regina Paolillo

think, is I mean, I relative obviously know, we to do that industry challenge there our Yeah. in telco.

service number mix that, that telco for We consolidating. the price is in in to They our telco of and companies us positive last had have the across that are industry starting at relative over to, the are of some down to we’re telco is have of relative dramatically we actually the company. there movement brought level… of those of volumes challenges tailend that years and in the would getting some I -- lots And say, quality

Ken Tuchman

will assess… That

Regina Paolillo

… is to to want say would that maybe, that. and that a we Ken, we also get profile will financial the talk about I bit have. easy will CMS little

the us For about the is theme less I verticals. think

of we for terms verticals. the These digital these bit would verticals, we we a And that to want of on growth talk us little you focused in don’t growth have disruptors. are But seeing high in I right, Ken, healthcare, what about call are that terms theme that? We think in know hyper a identified I retail. success a online

Ken Tuchman

cetera. office have to very focused And that because basis do a not -- mean, would we you phone, would very with, suffice use are whether high providing nicely think, I that with. do in area we all be of daily basis, a to I something Yeah. capabilities, to et percentage clients apps it service, hourly it’s on I your the say that we are allowed the growing and on apps major simply on that. are it business technology, back discuss that, providing we are say What is, those just to providing that

other the of The clients -- focused the more outcomes thing be on is and commoditization style much focused less focused that or tend more on much I old were to business. of say that would the on

the an capital are are pretty that of business we companies think wage are type requires to some hour, much on people experienced is, are treating we of what that that example we are is value others in believe leaving the -- labor marketplace. of business we is significantly that really than so are contracts and And lot and that customer base good what transaction different signing starting which is more interested today, more care $XX human focusing technology. the the at higher in a a A that a I on are focused as

to and are the the to of is the news pretty is hire this, of up of capable it more complexity you’re that and people significantly going it say have makes talented, it good higher-priced educating that be profitability can our training are and period of on cost simulation investments longer impact training, with part are we or ramping then tend that the short-term made the these the interactions negative We seeing means I that dramatically sticky. are and associates in being and process. higher very would as short-term nesting having and that along

So hope that’s helpful.

Frank Atkins

That’s Thank much. very you helpful. Yeah.

Ken Tuchman

you. Thank

Operator

Our Warmington next from Bill comes from Fargo. question Wells

Your line open. now is

Bill Warmington

everyone. morning, Good

Ken Tuchman

morning. Good

Bill Warmington

That’s one going my just all handle. time. I questions am to do at a can I So,

in is, of is could coming as from your revenue, you give a percentage So terms sense the what what’s first for us a telecom? one exposure of

Ken Tuchman

very is XX%-ish, that about very that work I now telecom high Net we based right globe. probably there. are focused United the not somewhere here are Promoter around the is across well-known companies And what say States. is would having Score They on achieving are are They the with that It Scores doing that Promoter Net a are and necessarily in the all companies. highest

would I say on simply of customer customer what is so, journey you that, experience focused the is receiving. to is, and the the And they’re just very

Bill Warmington

strong. was for to and XXXX growth number get trend the impressive XX% bookings that’s plus The to very going you sounds very

seems that’s must And be that half trying the revenue? and just taking bookings such that’s mean gross the that number? then, of offshore, there strong kind to volume it the number is is at it offsetting the down move equation, growth so attrition I’m there offsets of the it bookings like is And some meaning, I What understand is better. is clients. it lower and are it a

Regina Paolillo

Yeah.

the materializing with question? your in is that why question bookings Is that at your it revenue think the level, I isn’t growth?

Bill Warmington

towards question be may And about You the then? is XXXX revenue timing growth the Yes. talked for…

Regina Paolillo

again, there anticipate, right, a am are I on, -- things going One, And right. of right. we and did so, couple

different, that I then the that we overall do right, entered are I some like the this with go were what we close that through expect which script, in laid in and be We can year be looked QX ‘XX, out for growth As than to of theme happening very will But is what’s have we is would certain pricing you clients, overall again. increases won’t it that I expect us to going going we say, business rates the that is, growth different predict X% in CMS rate right. CMS. to right,

are QX So to that that’s of know and already is of kind get the we rate the that and volumes that growth having are clients, in we right. increase are negotiating layer relative greater with at to want order XXX at prices the in bookings we operate see we not to Unfortunately, important and right. can us in one are in the In believe to that CMS which that for we for that sure, That’s bookings delay depressing that expect we some level that in drive wages appropriate, will year, will CMS. operate.

The the later. second are is that thing bookings

So We in in QX, even in the off bookings right. we a time number for QX. that level had of QX, came didn’t on table We of a of get bookings left CMS. signed

that threaten just that pointed the and see can right, QX, elements quarter and months of Ken, in have close through the delayed of are to also the are will they close don’t lines license longer. got work some there we of the new take to, by bookings negotiation, these fact, those but more right, complex, work, are that a in complicated reasons bookings couple for more In businesses, instances, extended MSA right, negotiation in that,

then these the so longer get challenges. pricing done primary to are increases bookings And and the time two

rates The on other dollar. the don’t from coming that million of forget, based one, anticipate the a is in $XX strengthening we a change FX

of on revenue CMS year company we growth what ‘XX. strategic pressure putting towards -- some be kind for expect collectively of as our this what our this noted into have and to we for So rate those kind are

Bill Warmington

for Well, thinking can you are what for growth remind is XXXX, rate strategic that? if what you again, about

Regina Paolillo

over to business. it’s X% That midterm the in X% that

Ken Tuchman

CMS. On

Regina Paolillo

On CMS, talking that’s about. are the business we

Ken Tuchman

Yeah.

side. on as not the far As other

Bill Warmington

Right.

Regina Paolillo

Yeah.

very other growth that different businesses are terms in The rates. of

Bill Warmington

Then in you that market U.S. of challenges the labor terms mentioned.

for, recruitment. We you have that What’s have support been wages, We the well, I of that been get a reacting customer been driving a client as the hearing maybe also that’s a to and getting been talked U.S.? to that, it hearing you of what revenue from higher are to that am other companies hearing higher have is, of trying increases, about your higher as sense is price out behavior? handled we couple guys that being to of how specifically, doing corollary some offshoring. level attrition, some percentage actually

Ken Tuchman

all -- last we and very feel working signed to Look, all are that at that, new on not increases for of also been clients three new realistically that’s comfortable the new a been significantly the clients base renegotiated won that competitive so, marketplace, and very all businesses been new wages say base time fairly that good has the to advantage have embedded then were hiring the high first quite of rate of all, some have pay all percentage agreed if contracts, competitive an of have quality priced would meaning like due feel we I the people and U.S. in contracts. will labor that very the negotiated wage we’ve about contracts high we to those with higher Many, priced a in quarters over pricing

et markets no concerns than be whether seen experiencing relates of other markets, other U.S., whatsoever anything living et As have that pricing cost just years, have cetera, is normal outside pressure European of not offshore are it it what that see we markets, and the nearshore, over all the we would to cetera.

say the is So right I what that that this to more the where experienced them answer would clients they have focused are are ever about have for they because a say now in in many question staffing seen for thing phenomenon our how I -- And understanding be clients requirements. would reacting actually I than in part, are the a on. their we higher where much experiencing cases exact attrition they is meeting captives and would internal the are -- than same their following. they I’ve ever us your not much U.S. most past,

will be. the it days embedded we the of to needs where that stragglers, of say so So get provider now to rest days to naturally being XX just we us next of last, the base they first that the their on the Unfortunately, let’s been they XX have unquote quote we’ve dealt third-party been we been a care increasing have to internally will pricing and own payroll wages are had us as their you know, XX take high want captives been it that of tend than with in some if to client with more of we has us, some because percent we of a years. the midst with base have raise got you feel negotiating these our with and call that, we confident clients and between completed that get

-- we process so of and had not And want we wages employees act valuable the as good in did faith. a we to raised lose

what now catch-up rates. is So to always the we we that be we pay and the could on able playing our doing maintain new promise the to quality of capture negotiations service that clients are

consolidating. overall, are secret dollar the end that are because rising all And onshore these business nearshore down. so, would then, with say, And sight fact, and clients we to way as see they that reverting are don’t are say obviously, a in an we following. extremely industry offshore and nearshore cost they do to -- are, is significantly lastly, better as would have a standpoint the wages, to on in I and realizing budgetary them their raising understanding. know from just no average said, happy onshore. That margins I offshore This been some mixing cost than their it’s So our of

be thing providers way best much a in and proponents huge this We intelligently. about -- more that are and the that fewer price to of for is much it strategic We think more in there to professional so consolidating. tend happen and fewer can they doing think

a on ton business can’t they can’t on the And be they with to killed tier changing of so promised, out for people levels low what’s better performance. the marketplace tremendous Frankly, and third hands right they is the the very fact of that now to they’re because that deliver And be is and lack getting of obvious term there business come who deliver the being it squeezed is that who winners will on quarters will the as of think I getting underbid will promised that quality benefit coming and amount to it then of business deliver the marketplace, a they are happening the so price providers. service they and they the over because from reshuffles speak. in able so that very due not on now to a in a

Bill Warmington

question supported labor? one Well, is what the total being outstanding was, revenue by I of I guess, U.S. there percentage had

Regina Paolillo

from to you of I look at that that don’t just of look have based. want can’t by… is you CMS by don’t view, number. have and -- just XX% the revenue, Yeah. you I mean, I point can’t throw XX% that resource don’t is tell U.S. now. to right will got out But a have the at I I you --

Bill Warmington

Okay. By headcount.

Regina Paolillo

Yeah.

Bill Warmington

headcount of CMS. XX% in

Regina Paolillo

throw So I can our a number, for headcount the a around don’t that. is on I you don’t I want number U.S. in but don’t CMS I have I -- saying, precise of out that am you XX XX% have -- just to tell

Bill Warmington

it. much the That’s helpful. you Got right. right. for insight. All very Well, thank All

Operator

have That is Thank the we all your today. for time questions.

Ken Tuchman

you. Thank

Operator

concludes conference second TTEC this earnings XXXX And quarter today’s call.

You may this time. at now disconnect

TTEC (TTEC) 11 Aug 182018 Q2 Earnings call transcript