TTEC - Earnings call transcript Q1 2020

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Operator

Thank you for standing by, and welcome to TTEC's First Quarter 2020 Earnings Conference Call. I would like to remind all parties that you will be in a listen-only mode until the question-and-answer session. This call is being recorded at the request of the 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 financial joining today. Officer. Executive XXXX. us for our Ken Good and Chief Chairman call you Financial to is Chief Participating XX, March this period and quarter call discuss TTEC are the Tuchman, Regina morning Officer; ended for today's our its results Administrative first and

release a TTEC press announcing its results. issued Yesterday, financial

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

Before remind statements management's and assumptions. on related discussed I which goals we forward-looking operating current today's beliefs our outlook, begin, on financial performance, want you that based to include and to call may business matters are

these result our to which no new undertake of Please opinions and this a statements obligation may of note reflect as as of call information that date the we occur. developments, revise this forward-looking

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

description our more Investor section. please this Form call For of review available A detailed annual the report a risk on our our XX-K. be will conference website replay of under on XXXX factors, Relations

to now Chief over will I turn Chairman the Ken and TTEC's Tuchman, call Executive Officer.

Ken Tuchman

Thanks Paul, and to everyone. good morning

our COVID-XX their the our our and we're of customers. XXXX outline for clients Before on to outlook, support I'd our near-term well I impact to valued the quarter people like some speak results our and resiliency response context to provide broad business, providing proactive first and as on as

and the an that global of every The individuals which aspect and to effect have ways our impact with loss and are has reshaping through It we how one restraint of COVID-XX an growing is living on on focus evolved of that workforce is list without needs magnitude will extraordinary enormous businesses pandemic our a we The astounding. the serve client speed a mobility lives of this pervasive crisis, lasting immediate of lives. and impact engage of on as one pandemic, question as has another. we're working

Our top navigate our shareholders. the clients of and people, our and is as health safety we our pandemic this priority,

in around world a matter weeks, drastic Starting by measures. restrictions. centers implemented mid-March, TTEC officials were government the operating In various of all impacted

years experience of Our providing well globally at-home extremely capabilities, us many efforts. have advanced in in our served response

secure has Engage own environments. TTEC of migrated productive, to employees point, this At work-from-home our XX%

technically nearly Digital clients' Our TTEC support, enabling level our reliable technology XX,XXX at-home employees continuity with of best-in-class, has business highly resources. provided expert and

first few the existing and These getting organizations the weeks world volume helping businesses stabilizing trajectory are serving Within care and pandemic, financial are services the to economy were we health new to back of and increasing government services, of the that of interactions, change essential supporting work. this citizens clients. an providing April, and

cash wide cost establishing swiftly acted flows, We capital to expenditures healthy working we ensure structure to a include in to plans and adjustments and our measured financial of across spectrum scenarios. health our maintain capital liquidity. preserve These plans

and our tracking Before financial plan. of nicely of business COVID-XX, execution the ahead onset momentum were

for We X.X% income Bookings are of operating growth the growth the first of $XX non-GAAP revenue pleased and totaled with XX.X%. million quarter quarter.

cash up. is $XX operating revenue strong Our was backlog flow our and million a

experience to an digitizing a course, and shift distributed managing interactions this abrupt capabilities: management. the Of mindset. of three core being global dynamically pandemic the time in necessitated a impact workforce, spike in crisis accommodate has and customer dramatic in for Navigating volumes, enabling highly required expertise COVID-XX has

virtual implement while technologies business and maintain workforces confined home. has other us solutions reliably at-home enabled Our at continuity, are our CX expertise and to market-leading necessary digital to clients'

our of have unique protocols we which is requires to in through reflective successfully supporting crisis history many to long previous DNA. that The speed at core Managing catastrophic and scale times unfortunate and implemented events. of are now enterprises governments solutions TTEC's these

other Over response the first efforts. past XX and years, with and government blue-chip entities responder relief disaster, large-scale enterprises commercial regularly have we supported organizations,

the crisis work, Given have incredibly the proud team compressed the teams protocols. manage, for have we cross-functional the time in do of of agile nature for of our clients in footprint delivery I'm state expansive of response accomplished experts our what readiness frame. of in highly implementing an and disaster wake dedicated a this constant predefined we we a

Our COVID-XX. blind-sighted early exceed being their differentiated clients' as to crippled enabling credit ability and technology proactive experience, our by and our after expectations engagement the factors

From From Let Thank me amongst sites. to the our patients. planning. proud project remote you enabling moved and client with percentage across client, diverse to execution client, manufacturer, medical accomplished. strong all for device problems the for serve and of and board. serve Tuesday a highest related have TTEC share there you From some working us of a and people work computing blue-chip have you helping this our care zero Philippine has We thank your on the the testimonials. quickly us anything our work health largest been we should protect be associates

on but failures We in day. few, I them. of has have been to many lot support and thousand TTEC been the a worries, shining my of through one all With a our and people there the problems been has office couple of VPN went in not this transition. a from TTEC couple expected star the thousand people of one

within weeks it percentage served sum we at-home this client to accomplished the interactions increased To digitally base. the up, of the dynamically existing shift pandemic, early our successfully of and

the recent government and more organizations customers, citizens, capabilities with many on and extending health-related tasked businesses, to been services essential our supporting has weeks commercial patients. in focus Our

up surge experiencing while teams Our chain tirelessly by and imposed navigating volumes challenges COVID-XX. are to stand entities working these are unique in the supply support

experience TTEC's scaled essential customer positioned platform is support tenured these and technology-rich uniquely providers. service to

COVID-XX of a volume programs. already have signed We significant executing and are

scaled omnichannel provide cybersecurity Let implementation at-home comprehensive streamlined and some our and technology the resources remote simplified We've me capacity. our context. on-demand of platform cloud-based

them continue to deployment rapid assist add and our secure technologies reliable availability while We and maneuvering professional volumes highly to support. digital in and offering through clients frontline virtual-based systems time-sensitive

via capabilities takes speed Humanify stand launched training, people, of and accomplished T-Now with it omnichannel newly organizations and processes. These everything scalability offering. that including solution cloud-based and operate at-home this the are up our to centers The provides contact just-in-time technology,

of platform a customer to our Connect for our example plus care associates and For provide and TTEC Humanify leveraged fraud large institution at-home agile financial we virtual thousands technology services. cloud

government increase productivity that and is digitization, client solutions interactions our Without associate digital TTEC increased implementing Digital this have effective concurrent times a interactions through For would handled. leading messaging unemployment processing abandoned wait a XX% in benefits quadrupled. to

priorities strategies The actions related and we're in the excuse is peak both in well COVID-XX and varying XXXX clients path as me and establish positioned to -- the that and out manage back share and meaningful customer a to play helping organizations market crisis Also stages experience to win to continue a find pandemic-informed entities current crisis their to initiatives. the post normal, role government of Global work new bottom-line TTEC continue large crisis. eventually the will through business-as-usual to of in

our related technologies. consider and term convert We as omnichannel, as see the we demand volumes intelligent adoption significant we to opportunity digitization COVID-XX cloud, and short-term pent-up both ahead surge of longer automation,

opportunity. new immune relationships client rapid in fully offerings response we further to and growth acknowledge important have are of the near-term lingering at-home added COVID-XX We our disruptions shift uncertainties to advancing Our that not COVID-XX.

it's normal but near-term back withdrawal rather pace to longer to related of XXXX financial our March environment. in or term operating late Our understanding, the guidance effectively getting prospects, timing, and is not gauging of

various aspect that our we widespread restrictions. including are be multiple outside of demand global market every safety control continue restrictions the the to needs. and These impacted of have constraints certain challenges under in we stress decimated verticals are government-imposed serve. equipment is business hardware constraints negatively supply client Nearly These operational creating related the chain as our and faced have to with and

For at virus will the of what the if to predict or model the utilizing occur. currently will will the uncertainties affords of pace waves these how when us. our subsequent various is financial reopening and responded not exactly possible all reasons to these and when We've subside of there be economy it levers

Most through noteworthy by And to drawdown cutting base cash reserves. increase we've variable partial liquidity of credit advantage the discretionary a Board. achieved across additional cost spending our we've on facility taken our revolving

optimistic remain our ahead. which I about highly If proven already society anything, the COVID-XX degree the has path it virtually. of operates is

migration As forces compelling the and intelligent demand digital to market should ever imperative now post crisis. cloud and transformation are than automation more enterprise such accelerate for related global

normal. and pandemic this innovation our growth the world services reputation and accelerate ingredients the technology to from provides and CX as margin global historic potential its and finds necessary new recovers in Our leadership

changed. not have initiatives strategic Our

share, are pursuit accretive should bring offerings, value. our increased We increase execute translate relentless and which and shareholder our market-differentiated growth partnerships, acquisitions, our in channel expand the strategic into leverage to CX-as-a-service profitable market

strong digital quarters. flow Normalizing free demonstrated of The the margins remain many engage revenue that growth and high COVID-XX, sheet our by we for profile our expanding intact. revenue financial high and well-capitalized significant recurring in fundamentals a enjoys and business, single-digit are over platform overall and cash streams balance profit both as

have We have volumes. of successfully of COVID-XX to garnered related a important an working and pivoted way share surge

demonstrated balance remain we'll us a are to profile. term far they back that virtual then, Until offer a environment front a While as and control continue in in is liquidity boast more to solutions. I've financial shorter strong nature set core is what highly to and our of conducive to these engagements be will bridge which more likely sheet normalized digital of

humbled ingenuity I'm team with as the journey in through at TTEC and both closing, extraordinary have and pandemic. dedication working global this our witnessed In we proud endurance I

power devastating best nature of of both to humanity. the very and of the crisis reminded am I its impart loss and ironic

passion positivity to the behalf look ahead. work, executive our pandemic support. thank and in for our every on the of is extremely your to navigating I globe our relentless to one times. nearly services success resiliency this Our people. months members updating the of our Directors, On progress humanity each of these in forward We Board COVID-XX our you for of unwavering We stressful testament XX,XXX across client thank team shareholders of for during your hard personally continued want our and and team, all

And the will Regina, financial key Regina quarter. mute. highlights you're cover the on to now

Regina Paolillo

the I'll which we the operate. of and people TTEC, view company. quarter those a are and actions everyone. Ahead impact first of supporting all my expressing communities crisis provide good in strength taking to on our the and to start health preserve of COVID-XX outlook, our are you, and morning, we I'll comments my deep financial Thank financial the the clients who our this gratitude for and and empathy impacted by by of for Ken, incredible results

portfolio of of cash and agility diverse our model, our even sheet business of balance our marquee clients, and value strength times. during carries the greater in-hand importance The resilience of and uncertain flow,

term we exceptionally business our environment we the of dramatically, the While provide view fundamentals the to continue long-term value changed near as business proposition has and durable.

relevance client our presents times. and COVID-XX we short-term aggressively are few meaningful in a we the proving longer-term tailwinds both opportunities next headwinds. quarters, prospering and and see combination pursuing, that of In challenging

COVID-XX a tailwinds Our quarter structure, to improve capital of and surge work early working include first cost our and strong liquidity. adjustments and abundance

is surge e-commerce services, delivery healthcare, work within financial verticals. and our The government, food

ridge While it financial our help short-term in will nature, performance.

but ramping scale making to this judge We of executing, exact it are significant and volumes its work, and closing early duration. in difficult are

to we and preserve are Regarding structure, several taking our actions our liquidity, financial meaningful health. cost capital working

First, we workers, facilities identified travel, lower professional to real discretionary nonessential including temporary compensation and services, reducing estate initiatives. eliminating costs; investment or areas immediate

credit the And abundance and an out if streamline operations prepared certain are strengthen third, by cash rationalize purpose building warrant to our of methodically managing of and we an action. circumstances for such additional company's financial of functions, addition revolving the intensely caution, flexibility drawing working proactively down we in of to portion capital. Second, reserves consolidate, and liquidity facility

COVID-XX. hospitality declines our these of verticals, significantly terms headwinds, will are and in automotive, as travel be adversely by and affected impacted that we In organizations retail estimate our by backlog

we of risk. some is be originally XXXX that business assume the at signed in new also We anticipated volume to

XX% retail XXXX comprise each anticipated about approximately comprises hospitality Automotive of revenue. Travel X%. our and and

XXXX, vertical our currently Given grow the including auto of strong bookings second provider, auto an win incumbent a quarter, in the we in fourth in material year-over-year. will estimate half replacing the

experiencing In in travel currently volumes. are a we and XX% and hospitality drop retail,

enterprise clients. the with somewhat provide. some new are bookings from incremental the insulated, communication-based these on assumed We planning, XXXX initiatives reliance and we yield of given we would have additional In we technology revenue related existing clients our to in-year

imposed challenges by to Our down, rapid are, the uncertainty. a clients work and and adapting home volumes heads surge execution from financial

business-as-usual is unpredictable. a on initiatives As conversion result pipeline

at-home impact the we there productivity of in working teams adjust of an costs. to and headwinds, is as mode, our terms in incremental Lastly, an on

XXXX over-perform COVID-XX Looking despite a year. headwinds to we income, new at closed $XXX EPS, decline business last in of continued the and in $XX in operating versus half results, did first million the experience same We second EBITDA period bookings. We the quarter our on the adjusted quarter of revenue, in first million March.

closed Excluding government XXXX. $XX the million committed, which delayed of due already COVID-XX, We XXXX the in verbally for million million second quarter the first some but quarter of one-time $XX was to were quarter. bookings versus first in bookings contract $XXX the had of has of approximately in which signing

and technology Engage, within In were bookings services healthcare financial verticals. primarily our

offerings. new sign to high-growth continue We high-margin in our business meaningful

both consulting approximately for million automation in our quarter. and began and and offerings progressing Digital bookings across is were integration, and logos new with converting systems messaging the and Our including existing cloud pipeline first $X

impact We interest heightened expect COVID-XX fraud messaging, offerings. to the in of at-home provide and growth our automation,

basis, On was X.X% which organic. X.X% year-over-year recorded million, revenue to a $XXX.X we increase of a in GAAP

$XX we work of transition this employees approximately growth. our estimate swiftly from we million While affected March revenue the points home, XX% percentage of Engage revenue or to X.X moved by

been COVID-XX would XX.X%. growth Excluding have impact, organic the Engage the

income Operating primarily GAAP impact income $X.X prior quarter, year. the in was up compared or revenue, X.X% was million Restructuring per from FX charges on first $XX.X a $X.X X.X% negative negligible. impacted this FX million, by operating $X.XX share of The in quarter. in was $X.XX earnings to prior revenue Engage. the the year. million, were

expenses. increased tables EBITDA a a X.X% adjusted the our our million On $XX.X of release. versus to And first in Operating top income or to The Digital basis revenue our full year. increased in in my versus basis, impairment XX.X% compared to of comments remainder to of are to the the or non-GAAP attached contributed numbers in and Engage X.X% reconciliation on A the GAAP $XX.X exclude improvement. XX.X% increased is which non-GAAP million XX.X% prior restructuring consolidated press XX.X% included Both prior and share $X.XX per prior year. in and of quarter, the revenue, earnings bottom-line segments $X.XX to year. to XX.X%

funds its million facility. our quarter As with measures borrowed cash is end by mentioned in cash under advancing $XXX.X of credit the our facility full total we increase revolving expires which $XXX reserves XXXX. precautionary first XXXX, additional $XXX took in under million February to compliance million At the credit company under was our facility. The of

Our million $XXX.X income in March prior to million, year. increase is attributable XXst prior Cash a was versus year by $XX in million the offset and million The in was $XX.X net a in cash decrease $XX.X capital. negative XXXX compared operations from working million change sequentially. operations flow quarter $XXX.X from $XXX.X net position million debt at $XX.X the to total million

The million the compensation. days was XXXX's of of were to year the Capital the of to of and DSO quarter in quarter, change or payroll $XX.X in X.X% revenue quarter of in sequentially. days compared prior variable working capital to incentive prior expenditures first in or the the timing unchanged in is year. and the payout first XX million revenue, compared $XX.X XX primarily X.X% XXXX, due

for primarily capital a position the to Consistent attributable have Europe -- million financial $XX approximately is continued planned site our to XXXX to by India. expenditure platform increase our The cloud in we from reduced build and our actions million. strong diversification of our with and $XX sustain

the increase mix year. higher was due The primarily, XX.X% to a income. quarter in U.S. first tax XX.X% to prior compared rate of is the reported in of XXXX Our

tax are in the between the was normalized Decrease in to year Capacity XXXX being full quarter be XX%. in sequentially. XX.X% and and seats care health work Our is rate the utilization planned and XX.X% to in operating anticipate the prior of period year XX% to related was of XX% in XXXX compared sites process tax one to the year increase less in of year. which related to prior in We optimized. first XX% compared both an seasonal XX% rate than utilization reductions

quarter or operating Adjusted EBITDA year. of or in prior the year. XX.X% XXXX versus prior first digital non-GAAP revenue first increase increased was And basis, million are XX.X% XX.X% of to XX.X% our $XX.X the on income XXXX results to -- to year an growth. $XX.X XX.X% $XX.X an million in from million increase Turning the of segment in revenue, which prior the organic revenue presented quarter was over XX.X% XX.X% increased XX.X%

million Our XX% $XX versus CX same quarter, in was the cloud increasing period year. subscription-based last the first revenue

government under integration year over and The shorter-term and included revenue integration Systems cloud COVID-XX. $XX the million slightly of function to The revenue our a systems million, contract lower $X.X contribution is messaging delays twofold. the delays Excluding X% of was XX%. from attributable offerings. approximately in growth prior are up grew new automation

in to in And transitioning, the trends. March consistent less term minimal by, industry To in our the technology. requiring with integration. conversion complex was slowdown is new prioritization some this clients' shorter and the at volume the are of being large of replaced employees enterprise-level delayed A programs which COVID-XX-related home work extent build-out systems impacting deals,

contract continue in to full For and exiting year estimate excluding government are XXXX, businesses -- growth that year-over-year we Digital. the shorter-term are we

the of XX% revenue and contract our to in year. prior previously million our revenue in the quarter We segment excluding mid-term In estimate government our stated over increase first Engage systems with XXXX, shorter-term $XXX.X plus and of target respectively. was integration grow cloud line the X% an, XX%

ASC Excluding XXX grew FCR X%. FX and the revenue acquisition of

by points X.X lock the of revenue subject the, sites our second half was temporarily were $XX of growth million down. mentioned Engage impacted percentage approximately when or March in previously As to

Excluding high-margin in limited impact which grew Engage of in high-growth would collectively organic over quarter not the Highlights growth the, the been offerings include have X%. continued to this growth FCR. but over our the including XX%, acquisition

versus Adjusted X.X% XX.X% X.X% operating year. year. EBITDA And of XX.X% $XX.X from revenue, or XX.X% million $XX.X revenue the the prior in increase income in prior or to of an increased XX.X% to increased million

increased reflects and operating ratios. revenue offering bottom-line Our scale and and improved vertical SG&A improvement lower top depreciation to expense mix line

new retail annualization hospitality net services verticals Engage, our for shorter-term our bookings earlier, indicated surge and anticipate offset travel the As business-as-usual full we portfolios. by work in health year, acquisition delivery financial lower-than-expected food from of the FCR declines care and government and XXXX XXXX and in e-commerce and revenue

in are times and world and initiating so services leading resilience, in back for it maintaining supporting to Staying an new getting challenging to These and back executing our normal. managing matter many world no way long programs takes a citizens, place a time and the find safe ways. businesses unpredictable customers intensely its many to the healthier how emotional and and the essential patient

While in the offer the the being able we our of following of performance. reliable communicate crisis challenge navigating comments to this balancing in well regarding uncertainty not how defies effective continuing reminded guidance, financial very of guidance while COVID-XX effectively we In XXXX is. communication logic a essential are way to provide highly the

of business continued quarter of and strength quarter-to-date, first significant financial the and and in crisis. in addressable out performance reflect is our market Our total our the profile namely in second fundamentals

share. us operational expertise to win enable differentiated and market solutions Our

capital the cash expanding a it is when sheet source source flow security significant of economy when are Our and of and strong growth contracts. balance a

working have $XXX cash. capital of including strong a million We position

a critical have year. million to of the FX $X.XX changes our the by a exposure and we backlog total March from of modest $XX surge since of have As within Currently impact in was pipeline work negative verticals. rates verticals healthy XXst, challenged COVID-XX despite billion, XXXX beginning

have anticipate prospects a conversion in our business non-COVID-XX of We until stabilized operating and slowdown their the environments certainty. clients greater financial and have

fourth conversion short-term provide business-as-usual third financial for quarters, the expect our We work the and quarter. our surge the of to negatively pipeline slower nature bridge will a impact second of

full model In summary believe the remaining view of TTEC tailwinds XXXX headwinds for provides balancing a the at for performance for moment TTEC. balanced we this year and current likely the relatively and a consensus described, in financial and quarters previously

to quarter expect we time by much our We second have results. a report the better view

Paul. turn to the I'll call now back

Paul Miller

Thanks, Regina.

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

Operator

Thank you.

the session. question-and-answer Instructions] We is [Operator line from of the Sutton George of will first now Our question begin Craig-Hallum.

now open. line is Your

George Sutton

to I you. make of by the future, Thank as going long-term Guys effort changes? results. being somewhat work-at-home pretty could of much the bidding given think going flexibility through the I'm might the and multipart I the these levels as them one, for to much it's know to that it in I'm congrats And Ken so these you quarter, sort to entire going you if is options I'm staffing limit enabled but and change geographies, you XXxX that see wondered how to a are over all of changes question of speak work for my on to time? some been Ken. you it on address differently team

Ken Tuchman

That's morning, for question sure. George. a Good multipart

higher So, future winning, that in that to deals the what you the we of in taking consideration back to bricks-and-mortar. say into we've at-home as would part are be some as a then say implementing I post-COVID, of will all the and of I well a guess new we short-term mix futuristically been significant the normal for most that get is I'd when percentage

how that's there we have actually not last long because be on going know We're be know. less don't when different up. to of up, when yet. probably going social more Frankly, do open it there open or they predictions when to will a we'll distancing. opening we And then they're different And significant with XX% for don't countries

previous that geographic future now entire any over virtually more worldwide. time we've we've fairly So we operate a and they set what done footprint speak to expanding once of near-term of that that take And advantage to new prepared aggressively we've global calls, footprint going believe of in to there's And, form so mentioned can we in our is, our back we're new of as requirements, to of life. can a clients' so for business be get we'll withstand the dispersion normal issues. our therefore, of

we're protocol. solely fortunate having on move in been in and advanced for agents of are we've quality that home excess I that we've to very is most standards processing And But been of to XX,XXX doing focused as now I infrastructure interactions your the at-home it they everything their with bricks-and-mortar operating the able frontline hope question. answered know that though were I a and environment. was multipart. highest

Regina Paolillo

And are question maybe bidding to good on differently. also George's hit on, we

Ken Tuchman

included bidding can to Are them technology that I incredible I the offset we bids every single so that differently? there's fair different verticals. some of we don't I our what's digital say of a mean, we adding are about and bit deal much -- certain more in we're that is would that seeing in surges

automation our acquisition messaging set AI, machine and be it why things Serendebyte, more back-end be or of entire their providing bidding learning to the using capabilities, So did the office, conversational like robotic whether on middle whether we it's overhauling efficiency create whether clients' process back is and of and which adding capabilities. it omni-channel to systems

a as of cost lower with component are And digital would upfront high-demand that to the percentage incorporating offer to deals, deal it not to say to only our surge high way volumes, but serve. I technology a an also a we

how differences. we labor there so attract having that the in their a there's highly would temporarily in unemployment can business temporarily differences States the to I and with we're of very It's act. cetera. of United in therefore, the ensure Obviously all our kinds we competitive that's pay say and dynamic to so and people best And bid et to brightest one Cares costs especially out the we're And, current need unique the main on that Act positions.

George Sutton

much. you Thank very

Ken Tuchman

Thank you, George.

Operator

from question Mike the line of And Markets. Capital you. Thank Latimore our next Northland of is

line now is open. Your

Mike Latimore

and the your little you little Thank a bit overall? seeing other bookings there. Are just cloud of on in seeing Can pipeline cloud strong you. puts are focus Congratulations what wanted on on consulting a more Just expected? be out? results each of consulting So bookings bit things to Are part I talk for as the the about business. and terms there? pipeline color a little things takes would you tracking canceling expected and tracking and great. more as you're

Ken Tuchman

what would lot bit say a mean of I pipeline significant are is, a deals just in We I'll what and had repeat little about still said. Regina Yeah. those very deals I the being their crisis But would I on versus active. fact very to due are of very projects. many say large clients that them focusing hand that are transformation the these pushed at significant

move as in many script at-home. technology moved agents over us clients we've of as bricks-and-mortar the said projects as us major and on them to our side of we their to well those their mentioned, Digital clients asked And have us embedded at-home quickly transformation from come That at-home. to add ahead base have XX,XXX to asked to help

priorities can on of again going focused messaging said automation, deals. amount people on lag think little out robotic that figure it focused their That is to a the business, you there bit to we relates I to the and future, do assess this of say their and of of kind that larger process our is a automation is capabilities. As would activity what as be with what fair we there our a

of so into energy we're putting a that. And lot

to and you’re a own, have ways capabilities that new looking captives et You of can capabilities, whether if imagine that capabilities, for and automate your you add chat be service cetera. large messaging channels corporation large of you’re self capabilities,

part huge putting really we're our of so, in And those focus a areas.

can like growth of Digital the customer we needs. feel that line. that we the bottom We're all business. and for about Overall, top the capabilities it truly our engagement stated business, really long-term And we business continue of a have we both customer rates feel everything be will going that to growth good consistently one-stop shop expand relates to produce as the we'll and to – so clients' experience, customer

Regina Paolillo

that to add have QX a Mike thing that I is only healthy pipeline. very would QX, we do The

I filled small as We million. production And think with on CCE $XXX it's and more Webex deal just went more is into traditional some a actually deals Webex it collectively, HCS. CCE as under this week. well

so be And deals converted. that confident are we're they that there. And the will

in the just the would the to terms omnichannel. government, that state table bigger those will that the with we into be of focused that which that finalize I we initiatives. folks timing of our and having automation early more we've governments but bring of say impact that those that on way those and in and the in federal is opportunity to and should made in magnitude not not enterprise-level challenge those to decisions downstream further significant add the applications deal them large local can also a only see organizations be positive organizations on But be very inroads kind the The we that pipeline. messaging given have in just even and the

Mike Latimore

Okay, great. Thanks so much. Good luck.

Operator

And you. next the question from of of Nolan Thank our line Blair. William Maggie is

open. is now line Your

Maggie Nolan

Good morning.

you home on to move inability XX% do was out from quarter. demand, demand and home. higher the XX% volume that and at about or you're by then in downside that Was to coming that that? efforts move I'm kind supply to there March quarters given due now, to driven in how primarily curious supply than spikes? play the dynamics any work And side downside from at both the XX% and that an the expect you of as you're So meet towards constraints work the primarily dynamic

Ken Tuchman

think to that How make for Ken. all, It's quarter's you? up about booking will this in first quarter pretty And good second are Hi. we we've bookings that last quarter. done shortfall. feel we So the date already of

date is that the aspect in the of bookings So quite the are unique date on a bookings nature are strong. themselves. them to faster to And bookings much we due the executing pace of to

and think and is post be is normal that to again the unknown we're about is when whatever and transparent the to this trying surge going I be happens be. going that new what very to

hydrant. surge we're business right out now a from of is amount significant So, there. a fire there drinking opportunity Frankly,

I second but I'm think know the with concerned that wouldn't we'll be first quarter overly And in fine so if I question, be bookings I and numbers -- just quarter. your don't about answering

Regina Paolillo

other think XX% that read productive. Maggie, XX% at-home Ken, we're please means is that I the thing don't

Ken Tuchman

Yes.

Regina Paolillo

have are still that open. We sites

not We security at comfortable have feel other where work reasons having our home. and for clients did

distanced appropriately clean. sites. in deep We people have We those

is safety but utmost are other important, many there are but in-site. who associates So still working

Ken Tuchman

Yeah.

XX%. me Let just you misinterpret one that add the thing other so don't

look come to So we that people every the might now by at globe, right is higher come number to we online. slightly didn't the goes because operating be XX% across home. That new ability get day ways XX% to who have North America find just online, even when

obvious Really that area the with for most just of is. the why nature has there, to the the get cetera. to to that's the neighborhoods, is of infrastructure the from as been in of it there's housing impacted Philippines. it to do reasons And part is XX% ability Part is afforded that et

in America of North But is what that I surging. is to remind our business want you

America, North in United receive or Philippines. in book dollars the didn't we in than that we dollar that one for States comfortably every it's that's in for implemented two So of Canada, more the

this not all. because not that do by please are case revenues call is our going XX% be take the from at off So to that

like And Our about quarter. -- reiterate I we to said, revenues we intact. I good feel second want are

Maggie Nolan

it. Got Thank you.

Ken Tuchman

your or answer I Maggie, there... Did is question

Maggie Nolan

we also the both can you side, the to Digital provide protect context those Yes. there of then to on And businesses? put and in granularity levers guidance those but as businesses about on full within margins out about the different you. Engage Thank some think understanding side the how that revenue margin the that you of the a That was year, little of versus in kind you. think about helpful. higher-level Thank

Regina Paolillo

Yes.

backlog -- against said I what given said by about $XX the given it these the right virtue -given strong - have have as surge seen we have we our just I as done backlog million deteriorate. foreign the And So currencies of and not deteriorated USD.

right I that taken a very move gave negative be that impactful we we consensus operating look our FCR work So we from to model that help the to since more you I I as said But year until surge when have relative $XX currencies have where time when -- which my confident at modest on sense the directionally that place would you the protect will the impact. that think it the is to think with to understand we guidance to we began consider strong highly we've the and on opportunity we're early acquisitions have early point that EBITDA likely Serendebyte relative track. income. if on our fair I right back I aside not think it's backlog will and important more we about our we But are a where say in this in probably the million moved that bottom-line that to undo comments actions we're done that it's have, the

to of our So comments which will strategic go above at mid-term. would -- that questions have XX% even little is guided our the to also talk you systems a more first said between year being are if make our will happy plus and we the we it. I that XXXX -- in and as cloud-based off-line in believing XX% But I some we've on about the attempted business, components and specific kind for say remain up X% of XX% business grow in end despite integration that quarter XX% Digital

Maggie Nolan

Thanks, Regina.

Operator

next the of And you. Bryan line Thank Cowen. of from question the Bergin is

Your line is now open.

Bryan Bergin

strategy cost operating cost operations of Can flexibility Thank us you. out first. give around the term reductions And on the is can ask it footprint to and cost structure changing a morning. your of longer the you sense wanted maybe take in too? Good potential I Engage Hi. currently? then you

Regina Paolillo

forward was extreme I put out right need is plan to we at take situation. $XXX First of to the an should say million ability would costs we the that

And the And to so we are naturally for business top-line we and adjusting is near Engage costs have from especially that will on $XX performance on a our spend we heritage of expense astute business that need being at in to. discretionary its million line with adjust. of we'll in financial as Certainly our tied it the plan which and act XX very volumes. years we're when

when to relative year of longer term. about that plan, it's our think, say your please over guidance mid-term of these on seeing margins talked to kind of we've longer-term high the that initiatives But I of at about targeted cost a to improvement company both you're kind EBITDA the less and EBITDA our in and NOI three the Engage XX% getting that in in question margin impact above that to and that's Digital get remember our number both would as the actions, time behind has I you QX look in in mid structure. percentage

margin at -- So things that EBITDA COVID-XX lots realize that on TTEC going assure start of margin double-digit OI margin. high-teen to to higher-teen we EBITDA beyond and

Ken Tuchman

I way. Yes. I would a to about we asked the seamless to all you And you more impact fluid the that's change that is and what say at-home would looked question And model distributed forward more in say a to going a guess, to then going model there anything will I blends that is further more Regina bricks-and-mortar cost. significantly have different that, at in with

it able dramatically more introducing be more we a shortly our just new at-home And to of better model so flexibility either dramatically to new to is of very we'll this a actually when -- normal I we cost agility back unique going structure. mean provide bricks-and-mortar hybrid all that instead all being both pretty even the that come you're and is see to will be what or by that that clients,

are we're letting to under dealing grow now, So the although, we not with grass – say, our feet. suffice we're

every business. at We are of our looking aspect

have innovation streamline to operations I'm and and a the is very automate organization and area and its well that and focused we'll be chunk any have Regina more confident a think I start we're on to take great which a to our that that energy I able concerns Hyderabad now. cost into to ability of to of off that very our big about putting Our in out nor structure cost-effective we're don't on already are cost way more lot help a continue

Bryan Bergin

curious payment short-term terms verticals, duration And understanding helpful. then these also I'm seeing on That's some And concession short-term pricing are some of what type well. so favorable client in these some of more the Okay. you're of down are if as agreements? if volumes notable agreements and

Ken Tuchman

answer is no. The

by see We I concessions. provider. price price a not we offer the are Actually play – the We highest delivered not we do fair always a value have interruptions. because in for would and had down looking high-quality price see no right now we are virtually been We this let gain. say very do hit for opposite when we were now that companies companies service interruptions hurt and can they right deliver crisis so and significant the and

clients that a way We because where felt through at-home actually them. continued created the all we crisis, upon surge consequently from high they And we're deliver leaving the our adding and not in could to transition volumes were in dry. clients to bricks-and-mortar reliably that volume spike where any our way of a

very the your huge a that through the is record employees fact that proportions understanding markets, though answer earn place are program to price; July. a is is, we So the question CARES clients are affording A, there amount are generous labor of our – we unemployment not unemployment B, of the that's is the compromising on ability income currently the in to and matter Act short-term even

cognizant back want clients our temporary some to are we're that of and that to that incents ensure work in until competing which go to benefit with And not ways July. people not

an and able that's maintain profitability what surge we're comfortable I So is with to that very not are at issue doing feel the we'll be say that very would to the you all. we comfortable so work on work search – we

whether that have they've days reduce up their And we on, they're cetera. not need. them or past are and helping a relates going been going to add fully roll them too with months, are to of question and own they're to for it they're in a I there's whether whether bring back don't it's it's contracts, captives et to cases – because that able determine not days XX are them some six to of the these some have great to precise As XX search a length and of rolling early going some answer them

had Those companies XX,XXX locations to Mind very in significant. very banks you them an XX,XXX captives lot to There of that transfer offshore, volume not FortuneXXX they had have other just had be use to one example are people partners it these working about able when you help in think people might a and country. major cases to most as significant that. to that certain are and with

So, to in the surge I is short-term volume you say nature. what would is

this of is is we a marketing from winning it turn percentage will a that logos to longer-term surge volume percentage our and area. in it's down net relationships. – bed and good and clients new into when appropriate that goal net new that confident And very that we're we're in focused However, of to – this that be

Bryan Bergin

Thanks

Operator

America. is And Kupferberg you. line of question Bank next the from Thank of the Jason of

Your line open. now is

Unidentified Analyst

This is question. my Jason. Kathy taking for on Thanks [ph] for

revenue three-year remain on First that's the to withdrew in the to the quarter guide to EBITDA Do Thanks. intact introduced crisis I X% just your XX%. XX% last despite I you think But still you guys COVID-XX wanted formally XX% to and going everything? X% clarify. know the XX% margins the think range guidance. I XXXX to growth with of you of

Regina Paolillo

– I very think potentially both hard it's delayed so, it's talked really potentially it's so, opportunity – strong you're again, years strong guidance pipeline Ken this point. a the at half or businesses, delayed for anything on three-year a our That TAM. to said, internally update it's – potentially we've as in if very

We're be demand can market last noise. is likely and the seeing of time, may and up and right for we we conversion some And the be done if levers, want the as then adoption inorganic least new adoption me. these making see to pandemic. And of background we've very the offerings lost a not have least, of – excuse that going through not that one we activity but anything, this was that deploy but to the for the last have but apologies and those acceleration two gone also the good delayed

Unidentified Analyst

growth XQ. no quarter turn like It question, revenue in just XQ. sort other that sorry – for problem. of you of one revenue exit positive about rate growth sort sounds you just modestly March coming you had March April run so next thinking And Yes see did pretty guys organic any guys the What that of like exited sort thinking into could in XXXX, significant negative revenue scenario back did just quarters? couple you like I'm you in like this ran guys the time? a And the of of crisis, that quarter XXXX analysis looking financial impact.

now around you as well, could thinking you. Thank the and see So this we of differences have and Obviously, but. now? time then Digital that business sort the in between

Regina Paolillo

of that right? run consensus from is I going for Yes. comments then – there's don't say fall and model Look I not off me the second relevancy But that whether of described, to level see wave. it's be our views think on if my a to it to incremental about the internal you rate the backlog reflect like we necessarily

be me this for will we consumer example, spend. If impact to be or It's get a – wave we another work going if clearly when an as extends when to mobile have we is when for can back on be gets there to say normal. right there more not

guidance have at the is balanced So very not point work, feel view. rather $X.XXX us given point project year that I while next think into I'd pipelines we have where backlog, we was from down this at analysts search original that the but be reliable billion, given given the the we'll the this our believe midpoint

Unidentified Analyst

Thanks my for answer question.

Operator

And our line Sidoti. the of of Josh question you. Thank Vogel final from is

open now is line Your

Josh Vogel

you. Thank morning. Good

or So, thinking you have handle greater or buying come as that the could just or you they from go agility share gains, some the insight maybe percentage even taking opportunity volume share it about don't remote think whether mostly for could a necessarily to virtual? other in-house of clients because flexibility vendors in to

Ken Tuchman

in across conclusion significant way way business. I there that they their can news only that Josh. survive, amount there a I really every above they that really make is, business it's good to the is the the the come that major virtualize due they I has there opportunity. And they corporation if the it of fact to will is general -- just out think the is only river think think all the

what is we're that so clients And seeing our e-tailing fantastic. doing are all

All to volumes well. a current businesses the environment, in are their the and are able logistics are lockdowns on that businesses is seeing record and virtual our shutdowns and clients are obviously business they're that business et that their in-person focused of operate of incredibly to being The cetera. growing tied challenged

this that have one her, in ever them changed wife my is shopping she forever. be that wildest is that we're of who it realizing services. has But normal now her never habits doubt shop grocery grocery would for thought a new dreams Whether someone using entering into that our every without

realizing virtual And what we're the people with is economy taking Amazon. now everyone was what are so, different And that capabilities. more more along got seeing instant and advantage the of Uber all

Every adds time with can company any a form form business requirements capabilities. them, they so customer-experienced of of some you virtual that need do

therefore digital along so care, realizing health engage are capabilities virtualize. of they every them be And advantage retail government, it of our And with capabilities. one whether that our banking, have get take to to insurance, they

business. longer expand actually And that get really term we actually and this a is this medium for that that opportunity so, our we believe to positive through as us

the new they frankly mix and net like they their that seeing TTEC. cetera. were had with some scale going have seeing had that kind that captive realizing competitors their away not course from off just overall to the of yes, solely and that had better infrastructure would the a that win opportunity maybe operations for we're partner have So we're we're captive share opportunity robustness are internal take the also a logos also clients been But of to of the of have et we

Josh Vogel

could workforce Thank structural or new profile was well when of model thoughts normal brick-and-mortar the maybe footprint? that the if maybe some give back that just what one prior there. I are last down of the how potential the home for opportunity remote any look Engage less hybrid this that an America we you. is the margin brick-and-mortar volume going comments U.S.? the see in Thank you're in little one if curious one, footprint half reliance given there and on you you and profile And maybe at to for like with And move the insight the working discussing to there's a on business could what maybe things and the bit North change pair maybe the margin

Ken Tuchman

So I just a some nearshore, trend around see business cases moving some to nearshore to offshore of definitely think you're in going general in onshore. cases in to from from

that. So, going I you're see think definitely to

clients some over with another. overcompensated got particular like country a maybe or -- felt think spooked their of allocation kind to little maybe they business and I one of

to it goes place. goes have real as of it intend saying And so in distancing As estate. they to that real fully social our saying relates have we we as without estate, it better sites, a restructure without lot permanently rationalize well that

reduction think a temperature sites we're single at-home. the open look required in antibacterials well as I as night whether shift were at when with social monitoring, have real-time All still doing that be distancing, real it have to overall our ones we that whether of are we it be our sites estate cetera, going to been -- all et also -- every the open whether be but have fogging blend things the been higher necessary as it we've or

much to obviously again, to feel at-home. just percentage there's ultimately going with comfortable unknown relates so what are as And it clients

for especially And across where that but amounts globe. adjusting just evaluating are estate, so at-home us premature of the we are for not is countries And there to certainly it's frankly significant now our conducive offshore. real all that of certain

Josh Vogel

and safe. doing hope both it. you Got well right. All Thank and you stay are

Ken Tuchman

and same to appreciate you. you Thank it. We

Operator

now is question. have the Thank That you. time I today. to your Miller. all will Paul the for we you turn Thank call back

Paul Miller

we're Yes, concluded.

can You Thank close you. line. the

Ken Tuchman

everybody. you Thank

Operator

quarter earnings Thank you. And this conference XXXX first concludes TTEC's call.

disconnect may time. at this You

TTEC (TTEC) 9 May 202020 Q1 Earnings call transcript