TTEC - Earnings call transcript Q4 2021

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Operator

Welcome to TTEC’s Fourth Quarter and Full Year 2021 Earnings Conference Call. [Operator Instructions] This call is being recorded at the request of TTEC. I would now like to turn the call over to Mr. Paul Miller, TTEC’s Senior Vice President, Treasurer and Investor Relations Officer. Thank you, sir.

begin. may You

Paul Miller

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

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

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

to please a factors, of I couple will we now and replay this to Form which Tuchman. section. will detailed our most report available description Ken Form over be our our turn conference our XX-K, risk filed of XX-Q the the on Relations in Investor days. more next file expect on the under recently A For call quarterly of review call website

Ken Tuchman

TTEC. Paul Thanks, everyone. morning was year and good record XXXX another for

Today, the global partner market. progress and metrics, delivering In technology we performance financial is in made strong significant largest capabilities. our technology addition expanding operational CX the across key our pure-play CX to TTEC

brands highlights non-GAAP is and in to the to increased EPS the the most many year. ecosystem am $X.XX will share to of excited $XXX innovative increased Revenue billion. financial And with $XXX some commerce Bookings million. from end-to-end XX% $X.XX share. to for governments XX% growth I record per globe. across our I EBITDA start Adjusted customer-centric XXXX million. increased to enabling and results. XX% increased Our XX%

goal our steadfast Our our outperform execution. ability to the vision consistently strategic result and is of

there Over our is capabilities. last with our XX% leadership, the come. With our And advanced X CX so continuously position demonstration revenue has opportunity strategy decade, more working. investment, the solid industry in increase and continue investments will and judiciously product In leadership, has and meaningful grown increase expanding years, technology offering EPS past executive rate, to client that our plenty to market, XXX%, innovation and a we our grown delivery the marketing, in to much including and our footprint. is we our sales leadership

business. progress I our will our digital I’d growth years. strategy, Before into over with like dive our recap the past I start X to

digital of years, leading-edge course companies, the proven Over and our the grown we Avtec, by last CX technology XX%. have and revenue VoiceFoundry. We acquired X three Serendebyte integrated

most We have as players. with strategic enterprise technology partner largest established noteworthy the the CX TTEC

simplify solutions CX accelerate platforms. and deployments advanced complex our IP with have proprietary integrate that engineering We digital interaction,

new profitable proprietary digital selling scalable, marketplaces. revenue IP a We have stream, highly created our on

addressable deep our CX market to continued technology engineers bench of of increased full-stack we And significantly and with have solutions. We have set total mid-market outcome-based expand our certified differentiated a architects.

a have We client robust base.

backlog to Combining in XX% acquisitions the grew and and depth our growth the from Bookings enable to of and per last our revenue. increased in relationships from significant annum. last X hypergrowth years. X integrated client annum, breadth revenue new clients client per number the bookings, XX% clients of we clients now has over deals have and increased increased logo XX% logos continue with our annum, per XXX the new will Over significant XXX% years, XXX

rankings of at leadership years X the IDC. Gartner, past Everest the and Forrester, over progress industry been Our analysts CX in has acknowledged

In one across addition, large Forbes America’s the choice including globe, employers. as best employer recognition as continue by to we of be an of cited

Over leader in the and years, last our customer experience. employee business. ourselves world’s X the we transformed We as established have truly

of CX will expertise, relationships, Our enabled growth. CX enter and us client solutions, and as next serve technologies, phase undoubtedly the portfolio partner footprint of well profitable we IP

With CX the a billion, of TAM current the $XXX only sliver at estimated TTEC serves market.

platform smartly to differentiated gain makes share. Given sense our it market now and to market invest momentum,

same that and Their context. learn and have ways the pace some interaction the combine intervention scale Those will it expect embrace empathy so unequivocally brands to need human to consumers that seamless, has digital Consumers everything successfully better At work, service be figure with a and Regardless provides provide or the Technology of world go brand connect. of effortless can also it me new human into crossed needs. comes threshold compassionate choose, at responding channel, grown. the they time, to how and virtualization. Let every be CX has power of when far for product, to digital play, the sensing the personalized. technology to a winners. the harness only human and out accelerated

persona, decades the New the humanity it. hundreds world managing of interactions. the customer We value like build know view experience large market solution IT through technology providers scale. strategically that and a millions lens. working a CX technology to know intent or in is customer grounded importantly, customer at to blend by most not their experiences obsession how of what And CX know We channel. entrants we the TTEC or of and frustrate build customer-focused frontline, loyalty in lens, customer delights into destroy

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pillars our take the backdrop, growth With market have these of tailwinds to as opportunity. a evolved advantage we vast

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hundreds thousands Let data create architect of the lakes, players with massive of We global year. sophisticated size focus built certifications scale environment IP. projects me a TTEC stack we our self-service CRM on team basis. applications daily interactions hold them omnichannel of dynamic billions at CX every Digital and and global a develop enable of full route CX learning the a SaaS licenses to algorithms, We next-gen result, tech technology enterprise earn And of CX dimensionalize complex operate continually the attractive integrate that the and automation the platforms. and we hundreds marketplace. seamless and been to Today, by across of for manage have exclusive thousands some functionality of proprietary Partner systems, you. technology We largest most for engineers recognized on deployed as CX our as Year deliver complex in of

to experience strategic proprietary transformation. unpack of excellence experience business me TTEC centers approach combining deliver and model. are our lasting operate consulting engineering is four our Now, to digital that XXX interconnected Home and let methodology. employee to It We Digital our customer

at customer to techniques business team company voice within of follow-on highly build and both Digital These level strategy the units. typically key units. design Engage uses experienced the for both roadmaps strategic yield Our transformational our thinking projects material and operating revenue and

on focuses on digital and experience, insight call capture, which data. customer companies help to data, and we act teams, intelligence analyze Our CRM and AI manage,

Over which experience the deliver results in omni-channel interactions we digital have call interaction our X we build cloud enable leading engagement the for combined hub customer team our IP of transformational years, across thousands clients, the the to omni-channel past entire intelligent platforms with predictive journey. global to

partner create offerings go-to the enterprise cloud the to experienced largest platforms proprietary for And address package SaaS-based innovation beyond tech the that ecosystem. pushes of gaps CCaaS are existing technology global migrations new our CX several for finally, giants. team in We

our enables partners’ interactions marketplace, hundreds Our IP endpoints. across seamless utilized hundreds clients is thousands of by of of through

digital with actionable strategic Our us to objectives four-pronged an a TTEC growth roadmap. and help enables their companies achieve model vision

sphere single standalone transformations. to us influence to projects long-term scale provides approach a from of land-and-expand Our that broadens full with

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to pillar verticalization. our number deep two, Now on

the by on through become or the on more personalized, smart mortgage As their they customers journey recent test laptop the personalized and blood becomes of customer their whether dashboard, interactions a mobile the phone, to to appointment card expect critical, relevant be industry service scheduling for simple. tailor than checking has for researching experience a their options results their need complex,

and verticals. the $XX growth customers experience fine-tuning and and around e-commerce, For tech-enabled city growth have took Difficulty] for decades, verticals. strategy with health of on verticalization design operations, includes we hyper announced technology and the been we agreement acquisition industry tech, significant citizen and ongoing engagement offer legacy solution an [Technical to financial solutions. retail these assets the across to and our smart CX aligned mobility, and and Faneuil. smart we From sector needs citizen in our healthcare cities to public end expected platform step of TAM development when facet billion have This The fin-tech, of In and of is automotive our delivery another both others. every December, drive expertise among services requirements go-to-market we

Our is capabilities and consistent expansion. geographic industry concentration partnerships to creates which and and diversification, focus, organic client growth we our initiatives, are acquisitions, third risk. mitigate partners, mix, enable diversifying multiple pillar vectors Through tech

next-gen enable functionality we and are enhancing thriving Engage, with example, in new markets capabilities partnerships growing for For and Digital segment. emerging both for building to mid-market resources technology skilled

fourth pillar, is and across strategic M&A key driven three accretive Our areas.

acquisitions pursue will strategic profitable our an We to delivery attractive and profile that pillars are align footprint. and accretive with provide growth our

I have a months forward robust sharing ahead. in and We look our pipeline, to the progress

cash strong a and commitments challenges top economic priorities. Our pandemic, global clients fifth again, delivered our shareholders, keeping demonstrated maintaining we our profile, pillar have consistently and climate we employees. historic and and growth exceeding and strong with flow. proportions, Time financial growth is have line Despite execution lingering by of key to our profitable resilience even of and financial record threats unwavering

deliver and As TTEC well-positioned world economy and success later our entrenched fully phase the is every personalized, we now ability government. next anniversary accelerate this brand will steps the The of are in growth. for to year, effortless experienced CX define approaches XXth amazing, our to

guided continued as leaders belief their customer power when create the engine across our values, business value. we their virtual our has the globes experience. TTEC been choosing by core performance TTEC always to industry As demonstrates, we our strong live are

vision and everything determination our into are difference caring, communities is we a encourage first to which mission planet comprehensive released a I ESG to our more closing, do. of excited building and in our engagement the continents, TTEC thoughtful, not the live, management experience Our a take on and our the which future. over operating humanity thank support, large Yesterday, on to people, business company. we and way six about prouder XX,XXX be people you back family to your bring a and globe, we you review I we at our responsible a must. continued the behalf With of is board, could across time report. make our building progress employees our for in of hardwired for to exceptional In our

Now to hand I over Dustin. will it

Dustin Semach

some full of quarter Thank on year context XXXX and giving you, with morning everyone. will fourth results Ken before and I you start a guidance. our good review our XXXX

highlighted operating key bookings, exceptional across adjusted income by another including EBITDA Ken, non-GAAP had revenue, financial exceeded and metrics, EPS. As and We expectations we year. our

the demonstrate end-to-end CX marketplace our to continues integrated providing performance solutions. Our differentiation of importance and

profitable beyond. We and continue in strong XXXX growth to be well-positioned for

Our new sales teams bookings. delivered another strong year of

Our in fourth digital prior most prior million, for year up XX% XX% XX% $XXX fourth record prominent XX% period, signings XXXX, Bookings year Genesis, the bookings million CX segment, our full over increased year-over-year. others. in our Microsoft demand quarter quarter in the to was growth Amazon $XXX of increasing the in strong year by and period Connect over driven solutions, among and resulting

growth had were across services. and well across diversified care customer demand In and strong enterprises, core Our our Engage clients. bookings customer our segment segments, acquisition mid-market large hyper also both

quarter for fourth an deals prior of the acquisition $XX new and year platforms our full new operational totaling XX quarter we fourth accelerate delivery in further travel the financial go-to-market upon our diverse motion in period. full the We million million. over XX services, TMT From and verticalize for sold vertical the represents This and $XXX X and and year hospitality XX year, the industry in strategy. logo healthcare, XX% continues multi-segment we totaling to increase Our full year. as perspective, with logos vote automotive, our a expertise

and GAAP with strong per to will in discussion EBITDA, a We on fourth On XX.X% is XXXX In compared in of X.X% release. results our you full on have X.X% to operating exchange and million quarter X.X% full of basis, which to my prior share the of a a the backlog foreign year. decreased XXXX, share in operating prior tables $XXX or revenue year. revenue $X.X the had included in basis year. decreased positive I to press Adjusted the of non-GAAP income to million a with impact $X.XX $X.X referenced to EBITDA GAAP a attached revenues EPS to income the $XX revenue XX.X% reconciliation to million income. increased on a and XX.X% earnings to our million compared basis, And to or results, entered XXXX non-GAAP and pipeline, decreased earnings XX.X% $X.XX Operating XX.X% a revenue impact consolidated negative while last on $XX compared on year million. fourth quarter shortly.

successful the a government large our include digital many our in drivers sector. EMEA partially term from that the period increase as highlights line to contribution year. business being the quarter fourth the addition acquisition. Avtex with bookings Our in anticipated by in and from composition, segment contract completion the hyper top base Engage in engagements the increased in volumes year-over-year offset performance reflects same from segment now in the usual volumes reduction was and outlined new Revenue longer I the of in This embedded client prior and our XX% revenue pandemic-related XX% year prior growth replaced and increase a our in of

of in marketing, to in the from delivery. to talent, margin well an a margin The and Our CX period. and large prior and top higher increased of work anticipated scale the related year-over-year and investments the fourth mix and infrastructure the to expansion government offerings line increased engineering and product security and sales verticals offshore pandemic-related and higher reduction benefit margin margin IT fourth is contraction quarter contract large completion as due quarter of geographic year as continues

contract our XX.X% compared revenue X.X% to to Adjusted or $X.XX year. and for would organic $X.XX revenue of year Adjusting billion, Operating guidance, increased short-term million EBITDA year. been million the increased in XX.X% For period. XX.X%. $XXX XX.X% over the government revenue record growth have XX% organic last income or a was of increased have the a flat large compared $X.XX basis, to would rate increased XXXX, XX.X% to to XX.X% revenue $XXX to XX.X% EPS been compared full growth on consolidated and year prior which, prior XX.X% the XXXX exceeding growth. of to

The impact primarily on line income, already focuses, full the to margin quarter. offerings, are a year noted operating volumes Foreign million and The offset fourth our the as higher attributable enablers of full increased exchange as segment. footprint scale, bottom respectively, of reflects growth the million top geographic a revenue, verticals growth and Avtex offerings increased improved year of acquisition. revenue percent I as $X.X and well depreciation items positive expense by across expanded line vertical our partially our in and lower had Engage affecting suite $XX.X primarily

full XXXX our Turning results. and segment now year to quarter fourth

our solutions, CX support from omni-channel revenue the revenue the XX.X% contribution Connect accounting of a improvement the related increased revenue prior segment and omni-channel Genesis of in IP income due higher-margin $XX purchase operating income in sales million Avtex our investments quarter Microsoft The million and or of product practice million to over was period. digital digital client $X.X XX.X% and $XX infrastructure year increase Higher and revenue XX.X% performance Our one-time revenue offerings. a to year associated to acquisition. to compared prior our XXXX period. adjustment cloud to to million $XXX Operating the with fourth or was our the Amazon

prior a of income to full million $XX XXXX to contract $XXX year benefited reasons the XX.X% basis, prior the decline and offset fourth recurring of XX% revenue XX.X% fourth grew integration partially by completion revenue cloud systems government margin of reoccurring the to over Revenue quarter XX.X% of prior whereby of government in and with late in over $XX associated XX% sales the we XXXX. of technology representing XXXX. marking for as noted primarily grew in our initial revenue million Digital’s revenue the in and infrastructure, or managed representing the revenue in compared The Operating large on lower year our CX quarter, as XX% year On XX% talent leadership revenue Our contract, was well the total Digital’s base was services revenue. the in or period, increased invest XXXX engineering million a continue period. total period. and year

the grew total period, grew of XX% and our record revenue. and managed systems revenue integration total revenue, revenue prior XX%, representing our over cloud X% Digital’s XX% of services Our year

the for XX% to highly is the a client year addressable to pipeline. estimate Increased sales for best-in-breed in and strong which CX solutions, technology enabled revenue engagements grow market range increasing a over demand multiyear continue growing growing on We XX% for digital to longer by ecosystem. revenue CX and digital scalable, term, full quarter bookings a fourth recurring

technology further – reported Our highlights growth. revenue include: that million the and Operating in a offset Engage by growth capabilities, from of excuse growth partially to increased existing client during intensity contributions all to $XX expertise XXXX. prior compared significant $XXX was work the virtual basis, year. and segment year and platforms. individual in its EMEA our million or This travel, was Engage second XXXX in Operating a growing compared increases prior XX.X% new the our million healthcare, of hyper to business, growing retail program $XXX billion, the reduced we our investments $X.XX of or made organic delivery in industries revenue fourth in revenue expansions revenue income as me, of pandemic-related operating quarter our automotive, and we model, X.X% to for half income XX.X% verticalize $X.XX and lines $XXX to volume demand XX.X% increased XX.X% or compared XX.X%. organic $XX revenue million of On million full year.

relatively for prior Our Engage year the year full period. rate retention XXX% XXXX, from in was unchanged revenue

a mentioned benefiting company, profit asset pressures our increase leading revenue offerings Margin rationale line Engage from for continued revenue. top to in impacting efficiency the and reflect of our margin of as total lower Engage scale and expense Our the is higher-margin previously verticals and segment. in our utilization, depreciation percentage

in and the term. by million primarily to benefiting of other our the our billion about million industry I above offset acquisition-related our $XXX of $XXX capital operations by to business generation. X% cash at debt, year tailwinds represented to XXXX upsized in the $XXX discussing well partially debt We $X.X million measures $XXX borrowings Engage period. continue cash averages Cash revenue distributions, year-over-year, which, share before to range facility. Net flow increased million are was XXXX credit compared over strong related will under X% million in $XXX outlook. longer grow flow year-end, to now the prior million recently estimate from to investments At and million was pleased $XXX $XXX

our focus associated the at-home cash fourth technology decline and record flow While repayment the demonstrated the benefit and to flow in $XX deferred The prior continuously in-year days expenditures percentage quarter from of to $XX CARES on XXXX fixed period, capabilities. XX full X.X% assets our the particular, to the where the of our as benefited growth as primarily our cash the as asset from bonus-related XX% year. compared revenue increased in were year. of a in year by loss for due of in the the facility X.X% DSO have prior the net in we profitability associated is well Act down higher leading helped revenue platform taxes with year in with utilization, or is or low prior operating of decrease improvement million due an payments the of and million Capital

the semiannual our quarter and of dividend year the our various XXXX our shareholders. the normalized as related the capital primarily plan income and the forward Board committed dividend the versus reduction benefit XX, a over XXXX beneficial per full increase declared aligning February million. On in semiannual the to organic fourth distributions of to $XX was paid $X.XX and TTEC our rate XX% XX.X% remain rate We shareholders over year. XX.X% of the a XX%. in XXXX. next growth tax We or capital mix on dividend The The jurisdictional share This XXXX a prior $X.XX to per leadership to range tax anticipate payable Our share, credits. record tax XXXX, our in in XX, is XX.X% represents – of of to XXXX shareholders in related dividend management and market inorganic to providing through dividend. returns a to priorities October with long-term strategic dividend of March while upon investment XX, to April execute X.X% of April XXXX,

product XXXX our Digital. going to in to XXXX, both to the pandemic-related bring will of volumes across to to Growth to some and bookings made markets provide we across convert context delivery continue quarter environment our markets diversified am half geographic first and We look into long-term a Engage we expand outlook. a we sales, work move on marketing in fourth and primarily yield our segments. earlier. market capitalize the ramp across footprint supporting continues and from into in detailed will ahead Engage to mitigate in ‘XX. challenging Turning Many to our investments remaining and second to those additional continue labor strategies both of U.S. our in I continue financial XXXX, in accelerate to an scale Ken XXXX our be result, XXXX incremental and updated overall as as across incremental made be $XX verticalization that diversification are the our to guidance then these And us. innovation demand and of The will investing million estimates. Digital opportunity investments market strong and

transformation temper as we the transition we focus in term, cloud new will deals margin renewed will our to investments across long-term Sysco’s digital XXXX on for us accelerate have on fiscal supporting well to the set these capitalize cloud will continue the as as the short While we larger they momentum and In CX expansion and business margin year platforms. in beyond. its ‘XX, up

backlog of to acquisition higher total We a billion expect $X.XX to XXXX. with close We quarter to Faneuil assets of including first the revenue the prior entered Faneuil of the of XX.X% end certain than XXXX XXXX.

XX% XX% $X.XX sales at XXXX including out Our start is billion, year year. is of over the prior up pipeline the up year, pipeline adjusting and prior the the pandemic-related Faneuil on

EBITDA and include to between XXXX business and our noted quarter million. in to midpoint which, A press $X.XXX to growth-oriented. guidance, adjusted in quarter of fourth increase count year in outlined revenue fourth $X.XX compared XX.X% as and full prior is Please XX%, ‘XX our I year obtain revenue, and full for year. at earnings Other approximately operating and the EPS and over the of tax prior XX% on growth X.X% between an GAAP is our Non-GAAP of in section increase X.X% $XX.X XX% $XXX and relevant of increase year year. our rate a million, diluted over of effective step-up release. full operating overall detail prior our billion, and share reference X.X% XX% the prior to per as over outlook greater of X.X% in of full year interest year an the an to earnings metrics expenditures release the XX.X% X% turning year ‘XX Faneuil anticipated increase the Now revenue guidance of $XXX between segment XX.X% our expectations Non-GAAP quarter share the expense. earnings level. capital and of and muted year. including XXXX relative XX%, prior to commentary income performance revenue income improvement assets, compared the first to year million, press the million of due $XX.X non-GAAP consolidated of of prior an earlier, of over

not will year more XXXX documentation anticipate XXXX. back In the another commitment filing global in the our strong The couple timing I days. delivered be relative of anticipate We another we to we forward the now talent to of results. of close, and appreciative of turn and TTEC look strong acquisition could I XX-K and changes in closing, any Avtex, it financial we innovation, our to Paul. the year base. of employee disclosures not delivering XXXX our Form within Before do relating to and next finalizing function from diverse

Paul Miller

Dustin. Thanks,

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

Operator

Instructions] is coming Our from first of of you. [Operator Thank Blair. William question Maggie the line Nolan

Your line open. is

Maggie Nolan

what’s us Ken. into end Hi, little to And more the growth the of some if that the conversion the on Dustin. really can high going Hi, the long-term year, of kind you cadence revenue over of Engage. color of you think curious revenue, of the you give range? as surge course bit for guidance Thanks. a to is about I’m get

Ken Tuchman

Absolutely.

are Maggie, I fully comments, progressive in bookings. to is months to to as said roll just takes a anywhere XX scale, etcetera, just this – etcetera. that business as seeing X large size, record the it the out wins, script, that my We is my know, due you in from And we’re

correct. – you’re is that So XXX%

Dustin Semach

And you just to would I what tell follow on that couple is to Ken’s a of Maggie, things. comments,

actually is continue First out is, Digital. very you’re see there detailed pandemic that And press head QX QX, growth to in to we what in for volumes it you’ll release, Faneuil, going into laid then next up specifically even QX And of with step across and the the the and Engage across relative a half. guidance to both and QX particularly see once the in QX further. down kind coming the down contribution second you’ll of into we double-digit stepped accelerate see

Maggie Nolan

to expect normalized this normalized of kind segment And that the What what’s level the level mean on I of here? level takes the then kind are puts and guidance, of we And thanks. of we a these a EBITDA basis, kind should operate segments some adjusted Okay, on at? should expect? is

Dustin Semach

making step-up of in we’re an increased to made So Maggie, earlier, back comments going I the investments. couple

noted Digital marketing. delivery we not integration that to roughly investment has for that with that and Ken generally As the you Digital. And the think footprint fourth of marketing, as street, both well feet we’re then well number And integration. million terms and locations XXXX, up opening particularly about well as in innovation, so a as new with on in offshore up Engage that mentioned, quarter as Turnpike stepping sales Engage doing of as XXXX, as the have it already development then in related and also but expansion, geographic about we’re offering of just $XX have think of and product across sales think areas in

And but tempered continuing in at to rates, don’t think margins earlier, while point to so that as at we in continue expand the growth in anything expand that see XXXX then what I mentioned to this short-term, And margin us I from given time. haven’t long-term going stopping is, will margins we beyond. see you’re and

Ken Tuchman

short stated secret we and all the time order And that goal leadership it’s took is double before very that business necessary $X the and that doing half so internal necessary in putting can were that our in beyond. it investments of previously. years, a the in place, us X therefore, We is going time to the no we’re we double the what in we’re business and to bringing go all to billion

to how announcements out, so coming that. And etcetera, very I to with as will achieve be we’re going that obvious future it think

Maggie Nolan

you Thank guys. Okay, both.

Ken Tuchman

you. Thank

Dustin Semach

Thank you.

Operator

Thank you.

from is Our the Sutton line Craig-Hallum. next of of question George coming

line Your open. is

George Sutton

you’re million Thank Ken, I investing willingly. you. not know $XX

a you because doing it see opportunity. great You’re

process go to terms your and see to really growth wanted understand of of that how thought new saw logo the I investments of driving in that making because these growth So you business? the that that’s as I future try to XX%

Ken Tuchman

Hi, morning. Good George.

we’ve look just of that XX% core in my And basis, of our see going XXX to we’re active clients strong to number total in gone to from you the continue growth base look garnering be we’re wins who comes XXX that organic when point sheer on that that embedded that base, think client the clients. increase logo clients more that than gift continue at at of monthly it and base. when a our on doubling now fact The from embedded is to from comments I to by our ensures our giving. you keep growth the

then about TAM If that of billion $XXX the of we’ve you billion. estimated, that And $XXX $XXX also captive. billion, think $XXX about fact is talked billion the

large and partner. as captive so a is they we’re have continually out their And the of what of the captive more air business winning operations. the And transitioning to seeing tires of and we more clients more very us are that letting that are

the out side. strongly we of on on feel very embedded we only get base, the And can not so the side embedded consequently, digital but Engage what about base the

from for for want taking is more last the projects focus primary the And I capabilities that aspects we are experience, the them than is all to to the client has customer-facing those space, the transformational level make cross-selling seeing types looking looking utilizing take onshore that far Engage and They the technology. in that. just augmentation and actually from and then market. far we’re that of Clients complete systems. to the incredible competitors labor more of We’re to offshore the are simply Engage something that place versus Digital Digital Engage. of providing breadth point providing company believe to on majority nearshore, the are their able labor of their be only And that depth, across in

have I why is reason these you value with clients the area, of not seeing area, realized one a all all that we’re consequently, that they also we’re why of fin-tech growing what born competitive strong logos. e-commerce really and we’re a this fast. right So a begin digital There were such of accelerated to the growth to to ton extremely just digital has are enough bookings, do really what have at. is want business winning be with reason delivering digital really there companies is the very it said, enough with has to Every virtual we’re strong And because to to stress is companies not born to that they unit clients And these area, in our now. are winning able crypto see the pandemic. proposition and if digital weren’t be that a been push if digital, with. you They the etcetera. I’m the foreign hyper That getting –

we the right now very right now, all feel facets verticals strongly all So about.

George Sutton

And if and could thesis from which industries. you personal us I guidance you’re economic in revenue of is of could what encouraging give picture just just you’re touching ask suggestive an one terms enthusiasm, big a other thing different is of relative outlook curious if guidance, but I’m to a perspective? of your the encouraged ton seeing your

Ken Tuchman

place the for a are complex space, seeing Russia really in I we’re what’s us. would in is down and pandemic to But say EV the whether automotive taking that it that Ukraine these huge along hopefully with Well, times, opportunity be doubling is what our obviously, is down. winding

in XX% the probably States. have automotive the logos of United We

real just saw this seeing automotive opportunity the one you we’re were the made so probably there, as that of largest announcements of some And morning by makers.

a although be the dying Primarily the travel. to it be up, lot very partnering good large services, fin-tech sector. are coming etcetera, have in So Public money We with more. Financial huge lot maybe strong. very new them are, financial has that to of we’re think we players is push the travel to a automotive is tend are for etcetera. that strong. in seeing point for on made services institutions type are businesses, sense to side, a that out, strong. I Fin-tech, the I in whether is do very of the strong. get business seeing – it makes sector captive People that transfer fact, the these that Obviously,

different that into. we also areas of may going much trying may enter or more think on by be focus to stable through as And we are we’re excited cycles really We’re cognizant to as are that travel though economic the various we not fact economy, to Dustin? that, travel give else the directly to little anything seeing bit more am just trying tied going to is think I a you we illumination. to you Do are be the to of strength, just to that where add want

Dustin Semach

– around one as detailed focuses and the things the of have talked would would But of of diversification. I a is I XXXX to main there, is that say for thing The number George, continue reason verticals. was the exact about, do earlier, we And to intents Ken part of diversify. the in one across expertise one other say we of that

have a pandemic. offering you specific a of coming of and to relative the to vertical or the specific don’t ebb learnings from flow So to very out kind

like down of a significant of across see diversify this economic come deliver we’re of what you’ll areas momentum, consistently, and sure part despite year, areas hyper to beyond make so capture that being we challenge, the we growth do but type growth broadly to but growth, path. continuing And also see more that kind

George Sutton

Perfect. Thanks, guys.

Ken Tuchman

Thank you.

Operator

you. Thank

Capital of question the Northland Our next Mike from Latimore Markets. is coming line of

open. is line Your

Mike Latimore

year on Great. Thank you. Congratulations the strong there.

percent you fourth much little Digital, were in color can the on In more Engage terms gains what book give or the quarter, combined of a how deal?

Ken Tuchman

take that? want do you to Dustin,

Dustin Semach

sure. Yes,

demonstrating I we of fourth $XXX $XX correct in bookings full is So roughly for my that. of acceleration the million quarter continue deals head, overall. see top we had in remember with the seven area. year, If had worth million and Mike, at to associated right, then we the this

size of XXXX. right cross-sell now particularly well. Genesis, capabilities into has about driver more well deals, the we’re and our we’re this but excited doing would deals today, not another their ability fold as we’ve both digital AWS the segments, also really brought think of Avtex the And diversified complexity and the Microsoft, I we growth just across as to head as are be say, them now across the that as will into integrated and increased as dramatically, I

Mike Latimore

Great.

Dustin Semach

say well. And that’s we referenced Ken you TTEC When what can the of terms like use multi-segment, interchangeably. is one kind as solution those

Mike Latimore

bit Faneuil Great. And getting And a rate? talk it. acquisition? what with what’s on acquisition, Got revenue that their then then run you the you’re kind can little about of

Dustin Semach

to you do the... take Ken, want

Ken Tuchman

I’ll on. start follow can and Dustin then maybe

a everything that picking etcetera, going cities, We on that it tolling, mobility-type what from there to push big traffic. So transportation, is focused large control services. to to be congestion think eliminate assets be services pollution, eliminate to are whether traffic in is up management or we’re

simply mention in going picking we’re is to not cities largest the I’m largest contracts would although of say just some so of of And names, what some that country the these contract up in areas. I the

period the whether it would on tollways city subways it would be rapid it be to trains, whether So, automotive transit highways, etcetera. time, a during into of or tolling obtained that’s be would entering a whether peak

the public area. in big sector a clearly focus So, that’s

have to We of local fact a time. focused of center technology area working future. And into to EVs, And and states absolutely cities. working in been the with hype we to Federal on lot cities into of past It’s and lack a going the really low-latency and future long and were that this municipalities in government the the be it’s think and just think we IoT, sector a smart want very vehicles, going be forward autonomous etcetera. are in going play to of future with front of We XG the lot for area. public we the the very with due kind smart

So, you as healthcare we very that’s then well. is, significant And area have push. picking it doing you want amount take Dustin, a know, we are that healthcare do there? exchanges the big from of larger are a a second the up really and extremely to business, significant

Dustin Semach

Yes, sure.

so rate. revenue run And the just to answer directly question around

million we the million. the from acquisition neighborhood a expect We close the be to end again, of are And $XXX QX. to around in contribution targeting revenue somewhere Faneuil of $XXX sometime perspective from to

Mike Latimore

Got it.

months? $XXX basically So, nine million for that’s

Dustin Semach

it. got You

Mike Latimore

you. Thank Great. Okay.

Ken Tuchman

Thanks Mike.

Operator

Thank you.

of of Bryan Bergin question Cowen. coming from is next Our line the

open. is line Your

Bryan Bergin

morning. want on margins. you. I Thank guys. Hi to Good start

EBITDA how thinking So, loaded sense to the some you COVID And margin to of outlook? are million is are want investments, imply margin that that it XX%? exit XXXX the you growth XQ give is be of then the clear, of to in front margin? you would higher-margin that work at just Looking help the and a gross XQ? us, all going And impacting ramp, $XX then about XX%, rundown embedded just in the can seem Dustin, how us

Dustin Semach

sure. Yes,

and think of you kind – up getting XXXX. that around of consistent up in as the the through across have ahead sales XXXX, of through investments a run kind But planning couple going I QX, stepped have Bryan, ramping XXXX materially increase And the of been run will we them into a that about And exit a QX. you in of and And themselves, that and heading we higher QX it’s rate investment saying will our step So, go materially of in kind questions. naturally, start to with mind, cycle. investment year keep as rate just ahead great XXXX. then

first will look the the yield So, it which you little second the versus if predominantly and half, the in second is and at depressed in the margin more outlook, a half then first in a you will be why see half half, it’s beyond.

answer move that does talking when shift to there pandemic-related question before that into you – the I So, margin? about

Bryan Bergin

Yes.

Dustin Semach

Okay.

margin So the a volumes, that that step-up work particular with urge pricing on that in that past associated higher is and there immediacy the right, work going the we as was XXXX. about related you where that, gross of to booked at power think that point in pandemic-related about have and in time on the talked commanded the just we in

those relative really compression of of extending. accelerate pandemic down mix, QX what And downward but I kind our first you half a moved offshore in are of half margin a scale result that U.S. again, think will away rates point we the and the work pandemic of volumes of bit from see, really and relative clear, QX of as margin And which that QX, first from pressure QX, on it’s sense, the terms a in that will see largely as to – think XXXX, QX, year. of the ramp going excluding ramp in shifting in overall a second and improving first mix, down and see of or rate kind in of this roughly QX, down it you are percentage net the half across as As to to about off see make you is as and of talked margin. million overall when to the happen and some of QX, began of see that at the first points why in is high stabilize of term. the the the work, little that continue then the point about – two of was or work, well growth you as a run is downward XXXX. you about which we benefited coming you will think half, you go see XXXX. And to that XXXX you you a $XX that mix that the give and of gross And And of overall pressure result the we want in year-over-year half about longer the what

Bryan Bergin

manage, different around wage contracts things and it coal to inflation you comfortable the like to that’s your Okay. are that? as harder that’s or relates with where are Anything that

Dustin Semach

What am a want first? I that’s question. – No, go I Yes. sorry, you to great Ken

Ken Tuchman

No, Dustin. Go ahead, go ahead.

Dustin Semach

Yes.

And it. we XXXX working would it again, we inflation in wage has expect across have narrative a our – all that is are say new we wage the tick So, together. as laid have out issues up been in our think you, XXXX. of to and continue those customers. through that point. what done I ‘XX Bryan, is inflation done to I we results, on job the tell And And team see nothing way do would at throughout really inflation kind I XXXX. a relation good the this to delivered with But changed has managing we of

well. it been as in able able to expect work we we and work have to And challenging XXXX far, successfully through been to so through be

Ken Tuchman

the for lower also get that that, to as the capabilities us more up put think our in margins. on has opens inflation clients their providing help fact, it I can wage costs. pressure digital as door And to much focused on potential It

and the our real would captives, opportunity for are own higher is and demonstrate to to up wages clients adjust for best And type labor raise whatever definitely a can our clients to self-help to well can we type etcetera. on there get secondly, the significant it for are continue to control the capabilities. of the And opens also experiencing off-shoring to of resisted opportunity opportunity near-shoring they diligent for and have a our lot mix But AI learning then shoring, there machine all-in-all, where need form who markets, a internally rates a us lies have any as about potential so low-hanging – costs. we I hybrid discussions that to their their quickly ahead where very we them are that, whatever there is seeing fruit have us sympathetic say in using the the as in impact labor proper help capabilities

that hopefully, question. your So answers

Bryan Bergin

Yes. That Ken, helpful. you. thank was very

the also about Just Dustin mentioned one to you What’s expected contribution Avtec. XXXX, quick the follow-up in component? inorganic

Dustin Semach

million. you to what quarter, first roughly Really, the effect, over going is right, are see the Bryan, wrap $XX

about think half inorganic is you for growth if of outlined the that and of half overall, is rate that digital it we So, organic. about

Bryan Bergin

Thank Great. much. very you guys Okay.

Operator

Thank you.

is Our the of of Joseph coming question Vafi Canaccord. next line from

Your line is open.

Joseph Vafi

you? to the broad up of captives match to they some on perhaps out what of have delivery results. Hey maybe Ken us shift in in guys, some your of see And of continue or they growth back, most coming to more to kind nice performance of how I of again, lay captives you KPIs them good a once wanted you from to and comments provide going what morning, some work be a circle follow-up. your their customers. the to is own terms hopefully of for versus existing I can then brush as And

Ken Tuchman

Yes.

thanks, So great first, it’s a question.

been KPIs, ongoing able all, great measure their exceed meet and they Score, internal in to a us and constant minimum we Net basis. with many So detail their Promoter cases, have historically at of and our on first clients’ KPIs

contact clients, bricks-and-mortar classify in cities. many contact Second NFL-type And legacy type our bricks-and-mortar just cases, I would centers for of put all, as in are the most what have part, those centers.

are those they facilities. the consequently, they that significantly labor amount So need struggling to find properly of stack to

having office. problems to the go getting are they Secondly, back people to

home And also so able such with their a business was rapidly. shift so why employees one have virtual had new always to part to had that’s us. we our had bricks-and-mortar, but And XX,XXX ease business. we being in It nothing that is at-home a have business to significant we

own that say beginning going to to conclusion be our that to I on we back really us the etcetera. are what new as of for when that going that to people were I well how you shift not shift come to these the embedded normal positions we have because so there because forward, at-home, of clients to is necessarily think their they And weren’t technology would all to them their to bricks-and-mortar. is It the able

to continue on we think winning are these of So, with belief are move the to we is, captives a over and their see them going our we we that it to large to just seeing and us more are volumes starting that more focus to more and and professional wins partner.

think are they consumer, into yourself beneficial and have in lot question, what that the many how you times our are end centers that’s Joe? diversity across clients, are provide very not their contact that’s here so you cut where United something trying in I experienced so this we because to cost. incredibly them that because of with a understaffed these not of only proving they the at now. long. also It’s are the are as of and to the seeing I talent, more calling lines, answer And tell and am that in a your can’t wait to I is day, but And big Did the obviously. globe. I sure scale some your and brands you ability right captives is be our can just States, find

Joseph Vafi

then Yes, And Ken. there. more you follow-up one quick did. just Thanks

business as pricing it shortages, where been kind models? has box, outcomes-based capabilities the out given and these more little of than are of labor Given a their customers bit the for going some to more the given of understanding now on is solve and you problems kind way of businesses a thinking have table

Ken Tuchman

serious a clearly seeing digital opportunity pricing inject clients for us about we and is for getting of focus and ‘XX where letting more are that’s So, ours outcome-based more are capabilities. And beyond. the more

that handling, technology, to we that we types that hit can the capabilities over the what digital more we we automate, interactions provide more the going have control to model. are on etcetera, outcomes-based can the the more be we more are interject, can’t of what what So, is of rate an self-service feel we we comfortable confident can automate,

the And the said, substantial have it’s of business ours. in So take really we business meaningful a decades think focus of and to clearly, outcome-based a where where that of the some either it’s a this we is of because that new a been to these just time where an pricing of amount going we amount off journey subscription fully side and multiple full think or have of the types a way entire of for direction. of our to outcome. comes going business portion take it’s heading fees. has opportunities outcome that years that’s are certain see related tied to accounts to to with a the business that We have in whole is a And actual We outcome clearly price projects. payment some

Joseph Vafi

progress. all on Congrats Dustin. Thanks Ken. the Thanks

Ken Tuchman

much. very you Thank

Dustin Semach

you. Thank Yes.

Operator

of be Jason America. Kupferberg The you. question from Thank of Bank will next

is Your now open. line

Unidentified Analyst

for for Thanks taking on Jason on is This question. guys. Hi Jason. for – my Cassie

Thank I for income about the it fiscal XXXX. XXXX, for we out but First, items a going flow of percentage know you about it to EBITDA, conversion how year? couple a ask a you. net about as forward? think just to called in How of cash free percentage to I just think one-time as wanted next should of guys know wanted

Dustin Semach

Hey Cassie, speaking. Dustin this is

It’s you. question. great thank a So,

I mentioned that couple one-time see CARES, XXXX. would fiscal you items tell I as really CARES a So, is that Act, the year earlier, as we to of things in related normalizing the

in that EBITDA cash is free will a related flow say roughly And see I – range. so would conversion in you what to XX% as

to see have not will are going We you recur those more are normalize – one-time going forward. not it going items to and

Unidentified Analyst

perfect. volumes just I or of Okay. impacts second, in mix, any I the whether XQ, to clear wanted confirm, you That’s just like be on business exposure, on Russia-Ukraine that? from And client wanted headcount by very to or kind pressure see Omicron to guys did macro-related whether that’s

Ken Tuchman

I due anything, seeing those the of we that. volume are related opposite quarter to am first not if maybe any aware items, decreases any in of of Dustin?

Dustin Semach

and And is, good also, to into I Ukraine question heading be we feel Russian issues Cassie, clear, a great you about really we would Yes, it’s again. related conflict. I where And the quarter. tell this are what no that just to would say

so kind we QX are And speak indications far, of strength, all to about guidance. and really excited delivering on our

Unidentified Analyst

Thanks Alright. guys.

Ken Tuchman

you. Thank

Operator

Thank you.

next of will Morgan Our Stanley. be question from Faucette James

line Your open. is now

James Faucette

a lot. questions for Two me. Thanks Great. quick

very long First, history doing you have successful being it of acquisitions, etcetera. can a obviously in

targets if that anything, You how and How some can thinking? some impacted pipeline, give directionally now? you color you are looking think also at you that are the are valuations, potential are – have to thinking the has trying change you have your as about I acquisition And recently. right you you some strategically do or what indicated in in done what on

Ken Tuchman

Well, all, you up our acquisitions then valuation we if crazy but that’s one not not accretive sure And the realizes wakes to first of tend think and on at we did what acquisition months that look later be do. financially. I strategically, six that the I very are history, I focused just paying have only making think been, always

growth are We very focused.

focus to aligned important with strategy. focused. The we and and our that profit is very top it’s very very us, bottom are We focused line are

to their around standpoint, an unfortunately, I of of business have and they realize as a a worth longer was XX settles they changing. the you is to bit what very we far compressing, have valuations some and it that, to as X say takes are months we this, would on that As from been time belief months you ultimately cognizant the how simply what are what is until now. ultimately no their think valuations just that, and I sellers until for they know But market usually of tend – is buyer all overhang that

stewards we going that sure that are don’t be and something of We regret. making we balance continue or stupid our to do responsible very to sheet and

type transactions, what going also are to company We bet not I work if to know mean. the you those because out, not tend

more that in in to geographic be is expansion think is digital investing to that I you so business. are there more focus And going focus consequently, on and going see what our

absolutely confident our to that $X business can we are get digital We billion.

We that gives where which us we And it in can want not-too-distant lot being other are comfortable absolutely that be. confident we XX, we a of benefits. see are that to scale division confident rule absolutely a future, that, of the is

our feel confident transparency, about the Engage as how being and for of We the we on a for They provider are that quality. just the shop who that is in are that as are are and true in is company well people marketplace entire There looking good good a the the out us, tons also believe We the for there, much are the position we side that that as consolidating backdrop marketplace. not looking very a has for demand position really really total in high-end of marketplace is demand out there. marketplace. but for just we go-to

James Faucette

of then overall. the just Got to as it. it a planning kind follow-up And question coming relates your year and

in that about talked you And hiring that keep different order of any and the take as mind to you locations, do what of considerations rate this different geographies little particular moving a achieve think from there of hurdles should down need You to are go for in opportunities. advantage sourcing bit should we in to about headcount the some year? How etcetera, your we a path? or objectives to

Ken Tuchman

sound have retain the that think secret on are, no is. tech have it’s of and that we they talent. etcetera, Look, culture. up don’t a because we culture proud, everybody. technologist a leg us that is culture a a that public hiring what culture qualified doesn’t we that matter that I for think – side, is who to it’s our got challenge attract We etcetera. our but say helps And is just It

growth so dip the we of up I it’s side, keep we for. talent are deals that our to you to a are that the attracting that need to are that And challenge. why tech on a to what we to geographic be amount question no are to talent is talent we But the more looking – we reach, say able up is, tech acquire that markets selling would able have expand to be to challenge. with we that the So, continuing of into

a the feel offshore obviously On provide the like able and talent type capabilities. to That feel we line. best margin. on absolutely near-shore that need the we side, helps Engage said, we be being our That front to need solid in and like we markets machine have shore find we more to got for

which are focused in I you that and margin us more coverage, more gross that and wins so into area, And margin to coverage, think more going see gives more more significant more etcetera. going area,

I going assets it’s what talent. the to as tech – market would other news happens see areas. of a – down Ukraine these the set place with no from say and is tech what no and we interesting markets The So, potentially be those to to have recruit forward is in going some very Russia get good

a we area, will to sector are move create from one not to that another and are not those vacuum markets. potentially people we is continue everything rejigger our we that recruiting adding the the in where talent focused a We across of The tech as said, are entire feel my bit like in we market opinion, bad our news to strategy have of from a find going projects, of we talent, and do for to tech market. got clients. need Again, to that we our good to developers that keep all can for

James Faucette

comments morning. That’s the I appreciate Ken. great this

Ken Tuchman

best. the All

Operator

your you for Thank questions.

we the So, will that time is today. call have Miller all back the I to now turn Paul

Paul Miller

earnings concludes your Thank call. This Have great you. you, a for day. our everyone, Thank participation.

Operator

fourth conference XXXX full TTEC’s earnings and concludes call. quarter year This

time. You may now at this disconnect

TTEC (TTEC) 2 Mar 222021 Q4 Earnings call transcript