TTEC - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. Welcome, everyone, to TTEC's Second Quarter 2024 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 Paul Miller, TTEC's Senior Vice President, Treasurer and Investor Relations Officer. Thank you, sir, and you may begin.

Paul Miller

you us thank and morning, for today. joining Good to second June quarter is XXXX. hosting for its call this ended TTEC results discuss the XX, period Participating TTEC. and Chief Chief Officer; Chairman Kenny and on Financial Ken Executive Swanback, Officer Officer Chief of Shelly TTEC of TTEC today's and of President Wagers are call Executive Tuchman,

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

XXXX within we While this our orderly financial complete performance, also information you for on second call will reports quarter that reflect XX-Q. Form of document, items read encourage discussed to our

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

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

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

be Executive year the now the more on For report please earnings Relations. TTEC. our us on would today. thank factors, of shared review call of be this we website for risk will call our Officer Good call On transition evolution annual earlier available Ken. Kenneth a over you our on to Tuchman Chief XXXX that description our replay and and morning, for I will XX-K. XXXX conference joining turn A Form detailed this year, of Investor a

business to create business, our scale solid the optimization strategy environment As while continues continues initiatives, results. deliver Engage our our cost for to diversification we our digital and headwinds macroeconomic

call release, by million, a that charge results, second and this recorded start materially to detailed in in was goodwill Revenue basis, adjusted and a capitalization. quarter. ----------------------- We important impacts million. with a our press Engage Impairment our our as shortly. me results. discuss triggered quarter was decline market GAAP $XX EBITDA our Let out on the on It's Kenny non-GAAP business, our will This noncash $XXX

me share new encouraged engage momentum our by opportunity business. the are where Engage enterprise wins. diversify strategy we're where These the core underpenetrated, industries macroeconomic and let continued Now on to solid with to client growth. portfolio current an new environment, client dynamic clients update we see large we're our for Despite across currently our

and the into As term new with our scale. casualty will industry. in all top CX retail, grow recent outsourcing their the time in These historical take potential in property to media clients the wins the have spend clients clients, enterprise e-commerce, customary on to near and insurance new based

as we However, of outlook, the economic in forecasted. up especially to base look pronounced as is demand embedded originally second not weaker due shaping our is health to from This largest our the sector, half year, the the care.

For care budget we've almost consistent cost significant clients. are seasonal growth This is had the industry which forecast increases payer reliable creating facing extreme health our health pressures. year, X care and decades, with

ramps, we seasonal significantly experienced. year result, previously we clients than expect have their are still volumes a some lower As finalizing while this

and Given without outcomes our impacting the additional and overall environment, significant to continue improve to our actions deliver we've our cost ability for to taken clients structure customers. quality their

the Kenny opportunities. to financial balance better of for reflect challenges Due the outlook and will in share specific the shortly. the we current the year updated to headwinds, full our these have details Engage, XXXX

Now TTEC to Digital. on

and center, expert being from solutions. a Technology a As to we've broad analytics to multidimensional diversified evolved segment, contact CRM, portfolio we've leading a exclusively CXaaS with CX CX transformation dedicated our AI partner of

Digital platforms stack disparate AI. seamless technology integrate a and is our beyond. Today, ability our of our CX the cohesive, our of the propel CX every business have of to now XXXX CX advantage in and core TTEC the full the in into ecosystem number latest the the technology expertise capabilities our of partners operating and aspect and in year depth to doubled We've stack our system, including ahead this into

AI-enabled are specific teams executing Our business improved and revenue increased more on efficiencies, than around customer projects, XXX-plus with growth experience. cases

CX to CX the as ahead, technology trusted Looking services. remain be marketplace leading compelling, for our we and about AI-enabled and and a position continues excited partner

as with for by to our progress, be our analysts Place recognized and of as trade Work outlook media. goes the our continue and and results attract clients, it remainder financial without that innovator the revised I'm new Best acknowledge year. disappointed We To the Despite industry saying the

into move financial expanded client confident and base, our broader more performance XXXX, with will we client diversification deeper ecosystem. stronger revenue a and that solutions initiatives a partner I'm offshore As yield

I'll call now turn And the to Shelly. over

Shelly Swanback

Good morning, everyone.

overall navigating mentioned, year, transition the As current diversification discussing the start Ken I'll execute we're in the of business. we progress as performance of in factors headwinds our the environment a and midst strategy. impacting on macroeconomic Engage by making the

have half our the our reacting health impacting The First, our embedded increased forecast of our Several clients care. of biggest recent their have are care revised vertical, some which of to decline especially payer base seasonal is health year. second the pressure volume made are clients volumes. budget for prominent decisions, and in

initiative. care large growth health clients decided our of one delay a addition, In to

exited short factors, in but line, a full our on the public external We're client And these issues get the will program profitability through and we in top term caused improve ultimately our in entering to expect including anticipated year. working the and impact to short-term by system underperforming a back sector challenges Second, drag program ramp. that programs clients the create will financial profile delay our conversion, the profitability. large some with a next delay third, client

Engage Moving business. on to our progress diversifying updates,

solutions remains market embedded our we're base. new the winning with and clients enterprise expanding While competitive, new for

grow the a successfully programs solution As we have can opportunities portfolio, to primary profitably. on and and is deliver continue quality our that client diversify scale to we our focus where potential

enterprise this a add wins strategic large core a media as and dozen with We're as clients, manufacturer new retail, services our verticals clients enterprise multinational to our include a improvement institution e-commerce, home technology. and year verticals financial on diversified well emerging quarter, across and retailer. This like track

While scale opportunity provide in the these initially the they programs for future. start small,

several of future. clients new expect We ] the become to XX our in top [ clients

clients We strong new demand see to continue in anchor geographies with our several growth regions. in driving

health services demand client in expand than we began quarter, offshore in half of financial South ramping Africa continue a of client This to and major and we opportunities, care pipeline With brand Egypt. strong comprised our a in these regions. more

is X and performing insurance diversifying We're practice won business Our have well. later new recently ramp largest embedded of base with will our our this clients. banking and healthy of with that financial year up and services lines

one example, For these clients, with include services. we're our expanding work of to back-office

Regarding new enterprise BFSI clients.

We're new have and X scaling more We as QX. as in focused launched these on launch we'll pursuing well expansion opportunities. programs X recently

For solutions, the with care, example, knowledge year, late tech including workforce new last have offshore assurance. support, X launched we new QX management management, we added quality client and

vertical, to expanding from provider solutions In we the and experience, some experience patient our momentum, early diversifying have landscape. targeting our member reach our health care

support patient to a of several provider support. wide have claims organizations including offshore and We range credentialing, opportunities with nurse footprint, them solutions, with late-stage our clinical spanning

and AI. a practical partnerships Across own use of areas make tied entire engineering a employee to number Through in the industries, we of AI cycle. of applying continue we're to internal technology our across combination progress the life teams,

times increase example, which For accelerate AI and helps curriculum reduce to results, leveraging increase speed training we're ramp seeing proficiency. effectiveness, good to design and to

now is travel Our Know, Google private client deployed and which including several verticals. LOM Let called built technology, environments, being sector Me on in public is our

geographic using digital multilingual as we our hubs. to translation voice the In addition, reach we're create of AI-enhanced extend footprint optimized

annualized $XX XXXX. a cost guiding enterprise. implementing standards, transform delivery an across maintaining improved of Moving will savings approximately With processes We initiatives. on we're optimization programs delivery update on to executed savings several on high-quality new in in-year of to working technology at least recently our principle million structure of cost of starting million deliver $XX our and using that and ways the our

performance also recently hires strengthened accelerate our have and efforts with leadership key tenured advance industry in We to our team our areas.

TTEC switch Now Digital. gears I'll to

our with environment proposition clients. is demand tempered, resonate value the While continues to somewhat

our mentioned, adjacencies beyond like existing AI Ken professional will and clients of the solutions analytics, our broaden services CXaaS to and to us expansion our fuel and new in and enabling momentum As CRM, partnerships with growth. impact

XXXX. As to role we emerging we ecosystem, expect more starting continue expand meaningful partner several to new our in play our of a partnerships

to remains Our on we're clients year. this strong, pace close XX pipeline and new

this grow. annually existing were to quarter clients the is build more of and past close to we Additionally, number digital clients XX% of than $X million bookings that continuing with

to company volume and mobility actionable a optimize from now CXaaS couple clarify act insights client of conversational drivers me AI-based spikes on effectiveness helping share After automations. act platform, content, examples. of global a intelligence their and of we're unlocking its the Let

a we're on and advocates. support call integrate care to summarization AI-enabled For knowledge migration the health clinical assist their care payer, of to cloud effectiveness their improve building

These desktop implementations a personalized luxury glove customer we're underway. profile proactively more AI history for are XXX X creating clients concierge And that AI provide retail can than support. brand, leveraging are technology interaction and unified data, white team a their of that examples with just combines so

XX% we're currently top of practical AI more are us and clients to for looking for Our applications clients. of than solutions our XXX building

technology functions for technology CX silos key providers pipeline with and them way us gap shared working clients, business role customer of within CX road associate are as between for In our in their we're connect build the simplify tech complex our depending implementations. dots in the maps, clients. We leading partners play same facilitating ecosystem deep Because experience. on CX groups development organization. helping the partners, order operating the their hyperscalers a to the expertise, The strategic we're deliver optimize outcomes them and clients to best our partners, eliminate we collaboration help deliver to our operational technology and bridged and and

continue financial conclusion, partnerships. in solutions to diversification expanding In we We're progress our growing winning we're our and strategy. make our new footprint, business, on while disappointed our results, geographic

addition, cost overall actions improvement In necessary our return run to the revenue rate. to financial and margin strengthen order and in to taking normalized a profile, EBITDA growth we're

employees of forward around confident our executing and our progress in and our resolute we're quarters show improvement Board, in in team, come. leadership to forward management we path a our the behalf to on the As look initiatives. world, continuing to and On our strategy

year to financial full results to second share quarter and you over Kenny, updated outlook. our

Kenneth Wagers

before the discussion to Thank second start outlook. review quarter in my will In financial results you, our of Shelly, our XXXX morning. quarter financial context year providing reference on updated results, and full good second GAAP I our financial and with while are GAAP non-GAAP attached included a full of basis, our tables on share operating results a A is is non-GAAP press EBITDA, the revenue basis. on to release. income to in earnings adjusted earnings reconciliation per a

Operating quarter $XX or was basis our quarter $XX to Turning million, On EPS compared million second $X.XX $XX compared to X.X% a year compared financial to prior revenue XX% XXXX million of for consolidated of X.X%. to $XXX or period. revenue Revenue the of or or compared was XXXX was $XXX compared second EBITDA to $X.XX. And decrease $XX results. X.X% adjusted a million was of million XX.X%. million income to the

plan upon over a positively from $X.X Engage primarily our negative our million, operating segment. the impacting revenue by industries. In quarter multiple on Digital quarter $X.X in second delivered our exchange had across while by prior clients second period million year CX income in demand business, the Foreign supported we impact

by TTEC the our in challenges performance end Ken. the lower was of public sector already ] and [ at bookings Engage covered expectations discussed due of Shelly, our our program In to range factors the low already with business, our by

XXXX to second Turning quarter segment our results.

second XXXX segment $XXX million. was Digital revenue Our quarter

by digital quarter-over-quarter a conversion strong While over period, it backlog the prior bookings. of decrease represents approximately X%, year the of reflecting our X% revenue grew

declined Digital's sequentially. Recurring to come represents managed but The XXXX, of of revenue strongest year-over-year softer growth, X% driven solid to is of first tale continues contribution practices. our which continues X% to quarter CXaaS deliver prior XX% and up quarter's improved XXXX, bookings. bookings services services, the XX% the in revenue recent the Due from from from year nearly increasing by professional the

revenue in relatively on-premise previously migration, XXXX, or the declining half to first the shifting second revenue resulting communicated, of unchanged quarter was both in in year-over-year is As Operating income X% $XX XXXX. relative over onetime cloud of revenue is demand and prior terms. decline the as million XX.X% in year the an absolute related of

prior full year demonstrate the and TTEC backlog revenue the pipeline service from and line midpoint, revenue in Digital's backlog for The The of of SG&A $XXX strong continue clients. million reduced our contribution solutions XXXX at offset XX% technology is Digital with by temporary our prior lower was the the importance year. year. the CX guidance or to to

revenue was $XX prior Engage revenue $XXX $XX to million in revenue segment of income X.X% million period. X.X% the to the year. second XXXX million Our of or Operating the in compared prior over XX.X% decreased quarter of year or

quarter outlook second the low end address the program for at segment's of of revenue. challenges range balance public our Our sector in sector due my I the and of performance year the remarks. program mentioned public earlier closing was the the to of will softer with expectations the impact in the the

on opportunities clients investments will to around clients' meaningful quality pipeline. CX The cost yield to Engage's XXXX. while transformations in signs that initiatives year strategies, of and near term, remain postpone savings see more we or And based prioritize new delivery CX continue discussion strong. Regarding encouraging

Engage's XX% one in in X year. large decline retention compared exiting lines the is hypergrowth business supported last their by client impact portfolio revenue of mentioned. The the of our rate TTEC year XX-month was and services, the in XX% revenue reduction prior explained to from previously by prior financial primarily

and initiatives are measurable to efficiencies align We restructuring doubling to in the increase This the and we with profitability. our actions our strengthen program become addition to the to corporate quarter agile efficient charge at structure way related in second with actions level, foundation this cost includes down client completed quarter. largely forecasted associated in third efforts the plan, broader operating The changing the work. is by company's with to our revenue improve more our

reduce operating to anticipated million and gross benefiting end are operating exit $XX rate, costs of actions annualized by on These year our approximately both margins. an

performed charge goodwill In impairment in tax analyses, GAAP ordinary I I impairment or on frequently noncash accordance with basis will financial in of if discuss goodwill indicators the metrics, and course, other recorded Before address related adjustment the we quarter. second the annual an impairment more exists.

second triggered which the such, quarter, million and this resulted Based analysis capitalization. metrics, financial our below pretax quantitative a in performed Engage by and our upon decline impairment our During in value on fair reporting impairment reflects market we analysis, $XXX noncash as the its projections unit goodwill decreased of value market-based carrying charge.

of impacted in fair $XX deferred charge by unit's million reporting net digital quarter. Our assets, excess million, which The Engage a recorded book impairment. valuation respective tax values value impairment not included subsequently income the and remains second in $XX are the in allowance recorded the resulted incremental a for a of tax during tax was creating asset

more Please refer for related impairment to impact. details XX-Q Form on our the and tax

in capabilities and non-GAAP These our and a GAAP were from strategy perspective, the normalized our the value impactful impact allowance tax are impairment CX and noncash While a expense reporting valuation calculations. solutions. or charges our not do of the reconciliation

lower outlook. profitability geographic the the year-over-year compared now the cash the with conversion. $XX $XX second metrics X.X% for or million million related of XXXX $XX the quarter and result $XX second was is quarter compared were most our of X.X% other quarter our expenditures million expansion. flow I variance before in XXXX working discussing in of year, in Free to XXXX of year. prior million will Capital capital expenses The share or second prior to revenue to

jurisdiction primarily Our compared rate of lower year. increase second pretax XX.X% of the a income to function XX.X% The tax the was normalized quarter and mix. in in prior is XXXX

million under amended cash our credit which billion $XXX million As million with debt, was facility. borrowings $XXX of June $X.X XXXX, represented of of $XX XX,

$XXX prior and cash operations. increased distributions, associated ratio primarily net positive expense with million over partially with quarter capital expansion higher geographic to debt $XX Net the year investments, flow X.Xx. million, ended debt-to-EBITDA the We interest by a of from offset

organic are cash growth company I the our to sustainable our quarter, taking to strengthen and improve balance flow prudent and As returning beyond discussed long-term actions last Shelly sheet.

our and the optimization allocation capital. of with continuous initiatives, capital our of reprioritization start actions strategy working These improvement cost

took credit additional We financial under our current our to also measures facility. increase flexibility

outlook Turning remarks. to updated my in closing our

and our the as the well further performance initiatives, peak on which to during the we viewed headwinds for basis we: quarter's quarter are You second transition business; quarter of that still one, in may of in previously in quarter outlook annual Last upon each with our guidance our engaged third underway cost this meaningful moved through XXXX commentary an the directional transition accurate. worked second execute We quarter. recall as two, commentary as to appropriate. the period mentioned providing pertaining remains see optimization

However, expected Engage Engage for updated revenue a midpoint to larger now the trend remainder revenue have the from of demand XX% lower guidance is X% the impact environment decline The to to continues the on range. year. the our at of

As company's engaged to on a are we top due the line, full the both bottom result, and the outlook. year revised revisiting guidance

continue Engage we normalize, XXXX minimal impacting build launch XX.X% margin at our projects the in to the digital XX% some midpoint are to said, operations execution healthier rate of top offset the EBITDA of program a stronger for an sector that guidance public our increases guidance. as delays by to expectations from profitability with That line, exit the business to

year reference segment Please obtain earnings XXXX our to level. guidance updated Outlook the and in at commentary our release our for expectations full Business section press the our consolidated quarter of second XXXX

of first our while transitional environment. a navigate continuing In closing, year met many dynamic we to demand the of XXXX, in objectives half

growth and new foundation is enterprise across we solutions In diversify new upon profit while In expanded noticeable initiatives. already to footprint geographic programs partnerships with of working the technology-enabled near-term CX acceleration client continues executing through and and Engage, select ramping strong our headwinds and sequential our optimization TTEC our TTEC quarter-over-quarter. an Digital, are strengthen

to TTEC growth We to and returning turn increased call profitability. segment I to Paul. back now as whole and the organic remain committed a long-term the Engage will

Paul Miller

Thanks, Ken.

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

Operator

Instructions] [Operator

first of Our of the Sutton question line comes Craig-Hallum. George from

George Sutton

Kenny, the for in but the to shape necessarily out much have focus form, of some yet, crowding initiatives moving getting your might impacting terms not other forward would a of how AI you're that way, you impacted really in AI positively business? this, credit inbounds just companies that I'm or of wondering with

Kenneth Tuchman

frank, very to think I be none. To little

that cloud, think to daily basis. almost I our talk I working it's et overall they're that focused that would most the an cetera. know for AI, we are just clients it's every still alone modernize a get on, the initiatives -- just to let capabilities. trying part, most in to the their stage on them And the on experimentation Many are to of We digital that ones argue cases. in

So it. no, that, that's I not do think

so overall, that have I large start we headwinds years And that experiencing macro think enterprises think become just some of of many really becoming verticals I the in down. the to of will are their slowing and cautious the quarters. future served unfortunately that, consumer obvious very many report as for these more

George Sutton

Kenny. for question One

that of the be the You're a peak drawing the line little kind Engage quarter a second business. sand, of the the will in of headwinds bit in

that statement have us sort Just up. backs that of comfort what you understand the in help

Kenneth Wagers

that good of exit of play. Shelly $XX just actions covered around of Those million. in-year savings. say we A mentioned that would script. as lot I $XX north tailwinds took 'XX, that XXXX million lot lot are rigor. in her QX, worth we I operational of got George. the And into a a in that are in Yes, We've

operating with we're standpoint, margin And an a leverage not so good operational, and accomplished, really from an what expansion, we we've done yet. feel from from

mentioned, we side, industry at also they brought and they Shelly drive delivery as the some value TTEC. and continue in veterans on operational to onboard

of we operational, just from that from from leverage got So we a a tailwinds lot cost, standpoint, feel a in. confident an

see choppy. our clients more year, discussed into and a throughout forward. the seasonality and confident going the QX that On this new backlog, we've up as bookings QX signed We with trend revenue But and picks little we enterprise XXXX relatively into that. side, we feel what in as that

Operator

from William Maggie the of next Blair. Our comes from Nolan line question

Margaret Nolan

pricing Can you environment impacting or little on whether a comment the not seeing competitive you're a segment? Engage bit

Shelly Swanback

environment looking probably, What particular, I out there's no I to say Maggie, at off there. who think is would it's well, doubt are for -- for just quality companies a trade in a competitive willingness price.

we handle be these feel commercial the enterprise, course, just work clients we bringing enterprise really needed. with them, as you those new clients, about so business. and I And that for accretive one-off of to tell on, situations good that we're the structure the expect is that to the would dozen going we're business do core of book our to What we

-- So particularly, perspective. we budget willing constraints pricing feel a for price. off companies it's doubt, trade to that from those competitive quality again, no But environment, got be are good that might and

Margaret Nolan

potential those say share? were Okay. ability competitive then on market those And future. that take clients overall, become to to do you hear in positioning clients, new to how the displacements? or wins competitive about have and those your the great your And several feel in market enterprise it's top you

Shelly Swanback

think, every in competitive wins, and case. partners, I They displacing absolutely. single right, Yes, were

that. geographic that our our we've been expertise many vertical really about talking for a expanded just let It's good maybe So emphasize what the we feel and again. combination were And quarters. about of last me footprint also,

in of verticals, health our are we've care call our vertical we what expertise, Some biggest wins practices. of got that these things some good core BFSI,

the luxury also our the tech the work pipeline new But of a with clients in opportunities some a media, in A example new as new new e-commerce couple brands retail an retail, verticals. we're some platform, got in win excitingly, sector. that vertical. doing in We've of good large in

they about were serious and think we feel really our the business, about diversifying good breadth wins. of we're competitive. And so And absolutely, I these

Operator

Latimore comes question next Our Northland of Mike Capital Markets. from

Mike Latimore

you just little elaborate what a delays. -- there are? mentioned What you business, caused Digital bit? on were Can some the technology that that project In

Shelly Swanback

us No had ready the Deals delay this and programs. per delayed of But these quarters started. point. there's in a just being These because are slight weren't underway previous in revenue start particular are getting programs recognition. se. in And them technology. these delays delay client won to Mike, at just in all that therefore, we

Mike Latimore

related? find They the needed it to just to forward macro budget move Was or?

Shelly Swanback

I'm sorry. your Say question again.

Kenneth Tuchman

Yes, was it macro-related.

Shelly Swanback

I think specific couple are No, of these -- were client specific these just situations. a

Mike Latimore

you Okay. Got on of I kind XX% quarterly know it. guidance the does And give but side, the then so digital or don't growth imply guidance, exiting the year at there?

Kenneth Wagers

Yes. XXXX. the working I range. comment we're exiting would guidance. we're Obviously, we that But we give but quarterly XXXX yet, don't on say you're to still and in Again, not the are on XXXX, going

Mike Latimore

then were well? And bookings as expected? they logo Okay. Engage, a little Or were as on new late

Shelly Swanback

about we're new this winning. excited Mike, about that is is this. This no. what we're clients these where talking enterprise really Well, we're

us you new is And -- a clients new I what keep would so this is tell by really start winning that is and have, of yes, client always we small, suppose, way. programs clients. the not talk a is is What this about you this phenomenon, are and I just these as recognizing, the hearing wins about expected, excited new terms bit in

there. time scale amount take And small. agents Clients we from programs start of to These in right? scale, Engage. Small then

those of several QX, have here QX. And so in we launched several in QX more more and in

contribution more material line in a So saying where see this making the is top to part these of XXXX. we're we

Kenneth Tuchman

haven't want very to out clear. we is maybe Ken. made just something that point this Mike, I

we amount in have each that different business very logos. not a of all with we multiple the of the focus a that that. that diversification behind the reasons We we And strategic winning board new satisfied of there's we're significant verticals more the One, verticals. serve, client on feel need across

just therefore, about lot -- like good logos. the feel clients we doing about revenue, several we're they've feeling that it embedded aren't on we're new clients track, are relates the and the logos, as fact feel we're and winning growth really that of What our of we And are winning of that we're many base is not a we to others what providing historically talking when and provided. actually the

a it's us new why focus is winning so And on there such logos.

different maybe New excuse verticals, verticals client including across that me, not of trends. macroeconomic as impacted by logos, various the some are

some seesaw So it's in still -- they of they're into want stress seasonality. that a have do, shape. typically good going push just But the they their that cases, a our in fourth quarter that don't clients I bit to are embedded not same,

we've of get them bedded XX taken many an that X that have therefore, bummer track down historically decision as in literally and clients. the is, launched, example. in reach some them And tell between the to last them net acquiring The strategic anywhere ramp net to full on new you take launched with months. we're clients it's always -- are, put And XX And weeks and made of have just really fact, the new clients. actually can to winning pedal these we've to metal and the I is

benefits those quarters see And to come. so we'll the from in the launches

Operator

comes question next of Vafi Joe from Our line the Canaccord. of

Pallav Saini

for on Joe. Saini Pallav is This

expected? you're forward, the think? consolidation much Or give going seeing factor playing is front? you us on can First, an on you you a what way not Is out of it it still the update vendor

Shelly Swanback

Engage I you the related assume your really is business. question Vendor were that is to consolidation, what asking more about?

Pallav Saini

Yes.

Shelly Swanback

Okay. relative delivery things. they're their competitive time, companies what capabilities for where the wins quality of to Great. and absolutely. have just to Yes, decided like. the based of at new say I'd some on situations -- We and certainly from have network come looking couple vendor same consider actually partners a our consolidate

do we out. that so see And playing

and actually well. opportunities other where work you if those situations in-house. On is we the opportunities as side, us done some some will, see for our some of know clients. being Captive operation, are We new are

because keep these can things this the focused, ones we become with on logos. focusing only And worth clients think dozen enterprise dozen XX is they're of that we're the clients emphasizing one we new saying we keep exception. new and One -- client that probably is scale top

are them of leveraging offshore new footprint. All our

Pallav Saini

could very headwinds year? Is the the on largely well? And Or it. you next this these are year. in to being vertical way persist health this in Got care limited there this confident softness year as any

Kenneth Tuchman

This is Ken.

market, So knowledge that there care are relates to period the payer as the post-COVID. was X-year people hospital, can those, where as it the It's simply treatment, cancer the say to you et health all can is didn't payers And cetera. all following. I common actually imagine, a go claims, increased didn't get due to experiencing

et And and therefore, when cetera. go, situation was did claims higher their at in more come they much consequently, ultimately the rates, extreme, have

And focused so budget-constrained what this, so very consequently, I'd to on cycle, is speak. this the right now very entire this health getting care and is through call industry claim

from been reimbursements the there's I changes Additionally, some and challenge government, federal they're another that facing. that's think in

say that this over I'm companies is just they'll some business But obviously, temporary experienced largest just the with to the been well a a this are behalf. I XX I I we've other And for this industry, work extremely run. that that think the is is years. than very simply think in confident extent ever And first in world, to this their they vertical. this are this now that particular can't time. et this. And time doing speak sector in we've cetera, These moment anything the for whole and measure of through on

Operator

Bank of Our Chan next Cassie from question comes America. of

Jinli Chan

I to up follow just wanted question. that on

you're decline guess, maybe are like when are just collectively, as line XXXX? or you It grow a as services. full guidance? the delays, there months to guess, faster health expecting some verticals decline have to how sector causing expected? to And in ago financial expecting relative clear, flip it's what's well, to much on verticals the in incremental like the any gave that I little I side, to sounds continues those care, X So you public year be really

Shelly Swanback

Cassie, guidance Yes. the we change the question, first that we Well, based the sector clients X about, that mentioned. for and your on care public our in factors was health talked

So last saying changed of we're yes, what terms earnings that's call. since exactly our what's in

opportunities that we and retail; these regards our in across well and now media; it's a With as a have verticals tech one care win couple new new coming. a new growth couple as mentioned; health pipeline a of that as I in the clients vertical. clients right adding areas we financial to in in services, of for Again, in those number verticals, e-commerce we're of see that

of our just later year. services say, focus Two we so with clients, we and this like expanding can at we're largest be grow. on bringing those in embedded then launching those new of secondly, that continue going is where And we're And work signed course, types financial our we with to new to business, clients think with base that's lines as the clients. also part new recently work, these to will clients of of new

Jinli Chan

Okay. That's as helpful. I guess follow-up. a And

of cutting top actions your you some bottom factors EPS it full than about you year the revenue of continuously line and So lot optimization there incremental have some you're you're and looks margin line talk the just and the guide. Because softness, Can been ability like initiatives. guide actions taking. protect doing a more your guys to of your cost that

helpful. be you're that taking incremental anything would there just So

Kenneth Wagers

what we talked is this year, are -- some I we out Kenny. the and actions Cassie, earlier discussed incremental in in But actions Shelly QX coming prepared of The actions XXXX. remarks. our the real took are

operations we savings, As million looked of leverage is operational as into end we in-year we year. of $XX delivery at that world, those run QX with it million of plus our that next at the that us QX at our looked give a going $XX we as took rate into actions margins, at looked the and around our

business. the Engage that in So it's leverage creating we're that

we've right back the we most our last When we've the look ratios, one Just think expansion as to optimize new get over the now -- years operating articulated, to that structure. are done us clients X geo to if done the all, I Shelly of those, our not especially all but enterprise of the that in offshore with that business footprint, right locations.

cycles those we going that couple of revenue a areas optimize sure have grow. takes match a to It and expenses in we forward continue to the those into but It's we problem expand continue we great year. make as to to as

why some margin the leverage And good you're bottom. so and on that's improvement seeing some

Shelly Swanback

good have help to we've on our I our of on focus for brought to business stay a focused our accelerate lot just on confident, And program, by a up Client across are parts mentioned the few continue we'll tightening various that in leaders client going of we clients. quality that really program efforts. And obviously, delivery new board. recently operations are

Operator

Colicchio question next of Our Barrington from comes Vincent Research.

Vincent Colicchio

exits Yes. the that Or largely up? cleaned year? in the Shelly, of is more of the -- programs, that I'm client half curious, underperforming maybe see the back of

Shelly Swanback

where services decided I and just to what wanted match. a what needs we out. and couple from want a they deliver it client and we their the wasn't was pay they could what Largely -- them of and for collectively it for played that We mean situations just specific

will back And played out. through so year. Those those programs half have out of ramp the the

operations, tightening right on new business able existing now for discussed, we're great our take that profit and and service Right our our and those is focus Kenny with that being and now, new up clients excited actions winning I improvement about. delivering have bringing to clients these our clients

Vincent Colicchio

for program give you you your potentially sense given us dynamic? accelerate offshore demand 'XX? could the the And in a investment Will program

Shelly Swanback

I'm will sorry, that expand -- what? we the

Paul Miller

Offshore next year.

Shelly Swanback

Oh, and scale next our Absolutely. of year. absolutely. expansion, absolutely. offshore Offshore geographic The

for the of mentioned demands, in one of locations is couple we're years, that expand in client earlier simply things of we've see right? One the the to continue a reason. last entered that going to We lot recently I

the we South Africa launching is scale highlights to biggest really expect that some one in terms of of large clients probably there.

footprint. we see continue up client in to good new again, And expansion. demand first our for of that's geographic terms So really

we're into So that. leaning

Operator

Guggenheim Lee Our Securities. of is last question from Jonathan

Yu Lee

incremental quarter... Can any of the you course what detail provide unfolded the sector around public in over

Kenneth Wagers

bit? up can't We you a sorry. hear can little you, just Jonathan,

Yu Lee

better? any this Is

Kenneth Wagers

much better. it. Appreciate That's

Yu Lee

And in around quarter? over what's contemplated of incremental the public for any of there provide detail course you unfolded what Can outlook the year? your the the sector remainder in

Shelly Swanback

details, don't services program. sector a a we're of the a and It's of contract course. lot to specific client a public just this number multiyear providing is We you, of share client. I would large tell

that We providing have involved technology. some -- other some they also are vendors also to have

here outside through our some working early the we conversion, the been challenges we're the term, technology the has there's of operations them for And in client and delays launch control with But challenges, doing this not with to and short full impact as that again, speak. of given do a the we're impact a getting some that year. just program one current our

get we're those. But going to through confident I'm

We XXXX. across be expect It's our originally we'll that Jonathan. for a program of expected, have as client limited economics year the one public and not It's sector better get program, we'll specific to in there broad end by thing the business. the shape

Yu Lee

you help as follow-up, looking competitive a contract the new the about to mature? as you with wanting those also logos, but dynamics you've how And And win And it. unpack talked us clients, especially Got to pricing can you protect environment. highlighted there? margin relationships new are profitability

Shelly Swanback

-- I having Again, our wins. we're wins footprint. obviously competitive to But we're these are mean of expanded leveraging new all offshore

that So work accretive these really going the and good clients about margin to the profile for business. feel core is to our we're do

wins these going focused right? here of XX our And mean can where of years. so many about client, really not we're we're with top one big business. excited are these again, think winning across become enterprises and That's we -- these clients industries, coming across the I over and that's are really sort to clients what they're They're bring just to across,

Kenneth Tuchman

calls, want clients in to in Yes. rebalancing taken their It's they're their X to previous not X the many are And I've place. consolidation there's eggs that's cases, They or and dissatisfied. in said because there business it's as baskets. don't some out all due have that just

that consequently, and them through they looking a X they other where it -- turned into their with eggs partners portfolio. maybe And And out consolidation, some give balanced X. for reliable and baskets now help had can started so they're

by though frankly, focused And competitive there's out business would of there's there a plenty go certain out even business of way our other and So environment, that, we say be on, had to it's we're what not I focused is business still there's that all. to that be on.

think competitors said, addressable other a market, that make it's to they good out cetera. and like And can job allow that et way do And large money. a very total figure I a

very the and in perform consistently the in we specific many that of we ways, network. know type as targeted can that So with #X we very partner be provider well and can execute the business

Operator

time Thank you This for all is we Quarter your TTEC's Second Earnings have Call. today. XXXX questions. Conference the concludes That

may at You this time. disconnect

TTEC (TTEC) 9 Aug 242024 Q2 Earnings call transcript