TIXT - Earnings call transcript Q2 2021 | TELUS International (Cda) Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the TELUS International Second Quarter of 2021 Investor Call. My name is Jonathan, and I will be your conference facilitator today. At this time all lines have been placed on mute to avoid background noise. After the speakers' remarks there will be a question-and-answer period. [Operator instructions] I will now turn the call over to your host, Jason Mayr, Senior Director, Investor Relations, and treasurer at TELUS International. Mr. the begin may you call. Mayr,

Jason Mayr

Good Thank joining Thank for everyone. today you, for Call. Jonathan. us Investor TELUS you XXXX morning, International's QX,

Vanessa are and Officer. today Puritt, Kanu, and us Financial our Joining Chief Jeff CEO; President

will key will an quarter, financial Jeff followed highlights. We remarks, Vanessa, who of strategic provide the some operational call prepared begin will where overview by and the with provide some

closing analysts remarks. then We Jeff line before prequalified turning the from to the open will for questions his back call to

Before and referencing this and our U.S. events call unless on attention would all our can and Slide to to solely this non-GAAP pass comments to also all financial presentation call forward-looking results to would current to cause forward-looking future discuss earnings management consider Jeff measures. on the like otherwise, everyone statements from differ available and I to not disclosure about are historical news measures I statements. X to update like With reconciliation assumptions during expectations, in measures that, are and found Jeff materially with periods. The or measures MD&A certain download actual now these uncertainties, performance. we also a Puritt. reflecting telusinternational.com/investors. available performance Vanessa do also useful for over made and the supplementary be the I subject only no specified forward-looking I'll International in GAAP and and that to explanation turn call that on in be obligation An which assessing the the the this We presentation, Jeff, nature, release are to may President of assume team today's along measures be statements over at on TELUS may SEC. supplementary or the our CEO, to risks the direct that business in our including on relate SEDAR non-GAAP company's appendices to your underlying will to relate and available any beliefs results dollars, with website webcast, of projections. and EDGAR of call These in comparable remind our

Jeff Puritt

contributions of results you, Jason. Thank second our everyone, the you EBITDA, delivered driven the were us quarter, a continued year-over-year unrelenting by In adjusted in to and thank pursuing successful which our Good XX% engagements. XX% exceptional on accretive TELUS cultivate International morning, underscore business as in from strong acquisitions. well increase opportunities, These for organic all focus both and year-over-year and to of today. a increase digital as execution growth, our revenue, higher-value strategy joining highly

also relative deep place struggled our the to which strength, year growth results are a making they Importantly, with our resilience Unlike more financial results from their impacts recover to of partnership businesses consistent that is from year building year, reflect peers were us. from position the in pandemic, clients trust their last Equally environment impressive. and execution impressive many in these stemming all company's this our our the having industry of ago, a achieved. the

quarter market largest our a of remarkable by just wins Indeed, banks, company, strength in native that industries. and percentage increased traction of second repeat converting to are the data outlook e-commerce the of on premium for in largest call. last XXXX we're This seeing the media was revenue, year-end targeted multiyear raising we're the later reflective concluded led platform our largest of share growth Commercial exciting as and the clients In team, the on it's primarily our International. and in the services name digital world's deals, meaningful sales These the of and for our world's opportunities end-to-end Pardee, TELUS from first-half sales represented our with more driven for Vanessa quarter, helped capabilities, growth world's detail technology the demand TI, fastest-growing few. one our QX will highest tech drive recognize moderation that among content vertical successfully a & Maria accelerating Games TELUS of the a in including new solutions. social differentiated our year-over-year XXXX, by Our results company by for to value disruptor our International Tech Chief AI Officer, the QX, world's

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and efficient rapid of completed and and in This client's from an application engagement analysis development for companies an customer AI any bots annotation company performed Another them to and more example a scaled can business invoices bots, develop our And that with of another for processing emotion for over kind the converted to of by an customers. work extremely to help into used into inputs an further engine. during anything algorithm, their technology speaking have train sound invoicing, globally or to help AI countries, is paper of form we in from enterprise the in AI our recognize text expense the processing Asia thousands system would of AI We and management or requires invoices of or leading documents and different be of translated manner. yet recognize action in is XX collection to receipts digital that system. to receipts automatically emotion automatically human interactions their be by support company based IT

in to market must street businesses, have types sensors of continues image, and people, other judgment strong acquisition of computer using captured will data industries traffic written to me, smarter labeling question-and-answer also more be to that and more capabilities. with risks million AI image and simple this even Where requires its avoid in sets data, is then vision improved applications, our to the autonomous thousands Workers' world specializes challenges vehicles autonomous used in such appointment facial an consumer use their evolve space bot's or that learn a vast this agriculture client come rules. AI capabilities remote AI system and around effective in significantly application XD on is was capabilities, to collected annotation and are as is may and customers' exciting healthcare help with client. has set our enhanced we ability models. that client's image in emotional include powers for and payment to added euro and to still use plans machine very capabilities in sensing our mining. intent data our safety AI patterns, driving method And be disrupt for from achieve annotation which solutions farming our has already part well from to leveraging in grocery as system system vision a understand learning in creation developing, that win while bots. services. the our high labeled the client's power, future uses vehicle tool the that emotions. recognize and when recognition technology to of pulses products and proprietary relatively a the And computer identify our This known and AI is us of and as such and are these distances, measure to to voice video applications delivery To the top poses While iterations you seem performance. particular platform recognizing traditional to pizza month, also amount And in variable well-positioned dogs vision train that vehicle we well able considerable objects our laser bot self-driving areas of XD delivery. in to and as computer is with the business cameras and priority LIDAR, engine train even Playment's to What's community client order to demand, video video develop think street. earlier emotions also this team more and technology the as solutions in converse the robotics, to One it currently emotions, signs,

increase sets this seven past fully Data in division annotation International minimize prepared by the are avoid of globally, and integration to the costly our real-time are on over representing We workers today, one months. inside kind well-positioned For any its the regulations numerous data other can well learning to rebranded and existing creating a we delays. disruptions not data properly situations, cameras to latter, of and and ongoing sets project, capabilities of alert identify in the annotation adjacencies and high-quality we goggles, of labeling AI needed our and approximately power an located operate safety to injuries to in tomorrow's And XX% dangerous the was progressed then meet reduce the TELUS complement can through of when its clients, be Lionbridge data AI of platforms solutions. and given leaders work into business vests data recently our potentially order machine images AI that largest acquisition of demand of for typically harnesses, one AI, has to Solutions. exponential and value fed AI-driven data our to with deep chain. of diverse added our the natural improperly, Playment, equipment training algorithm With worn following today's mines collection on are which indisputably

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is news the in the COVID-XX currently topic vaccines example, of other the topics. For around of fake and effectiveness health-related data

evaluates not with relevance, information false ensure annotators news users rates information. are or of for and that and accuracy misleading and to team integrity Our provided

and to is Our an been the increased team a while market in skewed solutions also optimize enterprise seeing make monitor. traditionally a segments critical tech hyperscalers, has And, AI the in online digital have optimize, helping platforms campaigns. is manage moderation Internet mid-market more appetite playing the role advertising in improve to to to safer growing and we're clients of application among helping effectiveness One results clear a with heavily communications content and advertising, place. that

for but on of in brand hope with solutions, to to the industry not Our place to disrupting that be these for data of provide critical we clients also and I helped do achieve limits changing, most whose positioning in only today, stage game only countries, the ahead ads cultures. and using us, companies AI-powered examples how shared annotators own relevant we're light and market-leading the shed imagination. I users enables opportunities our in able will what terms more the set services different innumerable languages partner experiences, our

year, is Management the Breakthrough also strategic chatbot. companies our I'm of Informational We're very our BPS the the List, on a recognition. revenues XX for Award in evaluation. Category is on three International feature of company Best year-over-year positions. the we Agent Customer we nearly XX largest pleased for X top approach And AI growth. awarded unique global the intelligent that a the Bot among to third-party climbing their that our industry was also TELUS of the top top growth. vision the XXXX capabilities, that more Services our the named and PEAK the our third in on accomplishments providers the Everest XX on XX and ranking and quarter, to revenue the Solution list, consecutive were were year, based share In Another recently, XX included ranking Everest growing for were Group's second among number development Top success Matrix This Assist Experience leader the in was And by of Group percentage impressive the riser an ranked in

invested is around more XXX developed Mogul's the list whole The Diversity with commitment diverse more XX,XXX Workplaces Top able Our work world and and With and one named that than each workplaces. Inclusion for of was caring create to Initiatives culture implemented strategies International Best team bring XXXX. ensuring This acknowledges resources and efforts to to practices, our the to of recognized, TELUS and every of have their members selves in one inclusive companies also

in Pride equality day these a members' pleasure day and have contest beehives above displayed ingenuity great personally accolades drag collective going our and proud leading they're am for world the Philippines, a whether achievements. out, do. receiving in of on passion, I the are the team team beyond cork, seeing building everything in awards celebrating dedication Although, around gender excellence or roundtables of for with by virtual fitting a distinctions they reflection I in extremely all And clients of our their our and from and their customers, Month

team. Just results before share our a more on our through to financial I take in detail, Vanessa quick I update off second to us wanted to hand quarter

demand companies was for have recently, other and there some talent As an highlighted QX. comments increasing in competitive in

while, our the in with was this we vigilant attrition attrition emerging XXXX QX talent. destination in height as have not last total any year family higher the markets the consistent of pandemic, count for in our expected, with any XX from attrition key Sequentially, to TELUS in levels. pre-pandemic quarter, decrease elevation remain of team the globe, our X,XXX. by the nominal grew for QX a we around is time TI at be continues While than trends labor our assessing a member basis seen And International significant Notably, points.

safely of the science-based, at home, frontline members we members team back global to continued bringing office. team work continue end from approach of a XX% to to to June, our As methodical safely take about the as

We our the vaccinate to over well so, permitted closely Q&A. governments and members, in now help to availability members. of In regions to as countries to vaccine Officer, continue we the efforts as do supplement be engaging by we're working also our to their team where that, you. to and we're family rollouts providers accredited me Chief let for local with each the operate. track Financial where call back Kanu, I'll With Vanessa, pass Vanessa healthcare

Vanessa Kanu

will for today. some morning, my mentioned of good and non-GAAP Thank Jason of I the review And at us are you In for items results as quarter. everyone. start measures. our Jeff, you, these overview, Thank summarized the the joining call,

financial in more of and six including this MD&A month You a can view the detailed morning. to and statements GAAP our three reconciliation our measures results, non-GAAP filed earlier financial

As share Free growth XXX% revenue continued QX of Revenue services year-over-year. Jeff also year-over-year, EBITDA our was up geographic on per year-over-year, flow and and quarter, scale, solid of across year-over-year, strong in higher revenue reflecting increased with margin regions and great mentioned, and was saw all verticals. XX% XX% doubled the value increased and earnings diluted performance. mix we and earnings quarter increased efficiencies. cash a Adjusted adjusted our internal focus higher industry

XX%, the organic let get continued me into details. growth by million, $XXX acquisitions. quarter and Now up were the from Revenues driven for contributions

solution. growth and row existing was demand new strong expansion quarter second and for trust through wins, our and the XX%, the CX organic our logo and in this on with achieved broader For primarily clients a year, business digital of safety

echo X% the these in To into revenue the year. put results will also of included Jeff to mentioned compared same approximately period perspective, growth earlier. I prior what total Our tailwind FX

financial when consistent globe. when more solid the strong struck the very builds quarter grew and a organically. International last same One is impressive TELUS in year even In ago, year showed a second-quarter to from The today, later the compared and execution growth resilience International when strong, and year, of operating QX from TELUS growth pandemic the our inorganically compare. both revenue, performance

all mentioned In high geography, with our we strong every revenue the of we as delivered services, growth in thanks now key America and safety our an single of verticals driven this growth Games as up our growth Data across our saw vertical, industry by again, growth fastest our our rebranded Pacific, International perspective, Tech native XX% growth From growth as I well almost driven AI verticals attributed trust of Lionbridge and continued year-over-year North XX% in and in was what & to strong we've the terms second moment to balance digital in demand for quarter. growth regions, ago. one demand disruption by client demand AI acquisition, in Europe, TELUS Asia in or very Tech a was The by Games of year-over-year, the growth with from organic, Solutions. & clients. technology

in from eCommerce also Fintech vertical vertical, achieving revenue with growth & saw clients acceleration We meaningful our that in a XX% revenue of year-over-year.

grew our service we of as and our industry the diverse Communications breadth grew verticals meet offerings & all Media demand. verticals, of Finally, are benefiting all Across year-over-year. increasing our year-over-year, from while clients' vertical we other our XX% XX% depth

in $XXX counts. expansion and up our and expenses, team result million, related member expense the and to benefits of a on was as of Moving XX% growth salaries growth operating business

and services in increase costs the which million purchased and recognized were solutions, crowdsourced goods our labor $XXX acquisitions, contracted contractors, our to for data AI are XX%, services. due an particular in largely goods in the Our quarter, of

long-term revenues OpEx, scale outpaced to our inherent efficiencies as the in We growth business leverage in operating see our operating in demonstrating expenses, the model. in continue growth

items million, in awards Moving our cash other P&L, on primarily historical expense of million increase to the down an share second was increase mark-to-market in due by $XX notable settled $X quarter The price. share the the adjustments increase based to compensation on driven was year-over-year.

$XX our Income from under year. long-term a the awards equity a now year up four the As last $X in same vesting period. tax over quarter XXXX million, reminder, plan expense generally granted million settled, annually incentive new was quarter are

tax of rate taxes XX.X%, periods. a period to nondeductible primarily the recognized adjustments expense and of Our not mix accounting effective rate, income reduction of XX.X% that other tax rate tax items, of a certain tax vary to, year's earnings to withholding for to our prior increased A deductibility is from as effective jurisdiction but tax, in prior and and due in the the items. that net can percentage various period, higher to given increase expenditure income due reminder effective any income in an tax due including, our to which before factors, tax limited

year-over-year we of the on our posting profitability performance, EBITDA to Moving for $XXX growth delivered of adjusted XX%. million strong quarter,

adjusted impressive from a per high-quality operations. mix, increase this Our XXX%. in year. ongoing translated this accretive year the in On profitability far quarter service Adjusted from was and pursuing while the Driving net revenue offerings on margin our per was benefited margin for engagement, EBITDA focus up We continuing we efficiency ago an driving the have client our high-value XXX% the improve diluted digital share up income up for XX.X% it's to achieved period. in into so $XX growth year-over-year. was adjusted quarter XX.X%, million, of $X.XX, earnings share basis,

$XXX to at balance equivalents sheet, June XX, on million were cash cash the as XXXX. Moving and

under Our revolving year-end. we at borrowings liquidity, our credit created compared $XXX as M&A leveraging total million includes to available potential quarter-end, liquidity our playbook available our capacity million. for our strategic This the successful right growth objectives. approximately meaningful $XXX facility available to acquisitions, million opportunities for grew the at to of advance $XXX have With

of X.Xx the lowered we leverage lower QX. in at net of from with our improvement March. basis This for end generated defined EBITDA our from XX X.Xx adjusted cash debt agreement, levels point the last to XX, million debt as continue our June $XX of from credit repayment quarter, Following debt a as the sizable ratio, of repayments to to operations

our leverage, Xx we strategic said the As to good type amount flow increasing driven growth XX%, the profile. right quarter, strong million, a we XXX% by quarter last same as capital for generated year, was the expenditure to free flexibility our second range cash relatively previously, go range $XX as by from of with state operations In significant view cash this and steady earnings acquisition. beyond Xx up the have we have of modest

during Now turning our to team count, mention QX to XXXX, are X,XXX June challenging hiring as XX,XXX, organically to as a team last an Adding demand. call up during for XX% we increase members in of year-over-year. a meet notable a our heard mentioned TI, net quarter's of strong widely earnings in member labor We record especially XX, the we of quarter strong was plan our ramp Jeff that we clients' team market, earlier. a and acknowledged

a caring us record differentiated level once culture in Our achieving competitive edge of with again this provided hiring.

our In team revenue team in revenue profile. driving growth, member per continued are outpace we addition, improvement with growth member our our continuing to

ongoing to our our has current strong prior by reflect on outlook, which are momentum, raising now guidance we solid business Now positioned our outlook. our QX to in results driven exceed to us

is mentioned merit increases, completed during our which to This already July. base in majority factored to that be into due figures. planned As of our will in I guidance which call June, last our expect we in but the QX increase started cost annual earnings

$X.XX adjusted over continuing up $X.XX XX% to diluted last of the $XXX billion, in business $X.XX $X.XX, to by the extremely encouraged expect highly last reflects $XXX with share outlook range so reflecting of over XX% are in million range compared year. year confident would full summary, our over that billion to in EBITDA the $X.XX of that, million and the from million. In $X.XX keep we XX% now to $X.XX performance, our one the XX% questions. across we Jonathan, ask can billion the are XXXX, a million, please the and adjusted range everyone with expect from to For We previously $XXX we XX% an remain We growth it will in our to to range to participate. year. last pleased billion, $X.XX the now of This in revenues to now for to expect of range increase growth year. time, of QX previous With XXXX. line to over per momentum I reflects now $XXX deliver XX% earnings open growth at to And for kindly question you you. that guided, of

Operator

you, Thank comes instructions] line El-Assal Ramsey [Operator Ms. Kanu. from question Barclays. Our from first of the

question, Your please.

Ramsey El-Assal

I seems growth check what that, we to of is It in Hi, of year? how QX back-half, appreciate like about rest question. the Playment organic guys. of Thanks the some easier on sort of just to for much could your expectation but then sort the for versus wanted And raise, I taking it. tacked really for out the you it. see outperformance acceleration parse drivers guidance given comps from the Can in the acquisition? also my

Vanessa Kanu

Vanessa the Ramsey, here. for Thanks Hi, it's question.

in on for strength So our XXXX - QX momentum full that we performance of seeing the raised the on year the of the just we're guidance business. base the and in our

seeing our we're offering. that strength safety, said and of that in particular are I in strength it's And there seeing the on particular takes. puts guidance digital fact we that CX back and of the trust earlier, today, As are really mindful raising

rate, that when May were today's lower euro, our for and guidance. guidance they issued our rates the in example, was - we assuming So today's than are we're

some there momentum of got puts overall, our driving increasing got terms But our momentum an we've FX there we've in that takes some it's guidance. in business. So the perspective, but that's from increase in

the heard great his overly technical Jeff acquisition is capabilities, material That from in a it's you as in MD&A, a we not talk of Playment, about remarks. prepared financial of for view. As said our point extension as

is has again, our So very it little very strong do offset little really from, puts a with our being coming rates momentum, euro now takes May with coming of Playment bit versus today, really guidance. and to down the guidance an and from

Ramsey El-Assal

it. Got

Great. Thanks. Okay.

Operator

you. Thank

from line of comes question Tien-Tsin from Morgan. next Huang Our J.P. the

question, Your please.

Tien-Tsin Huang

you. results. Thank Good morning. Good

or Any of some named like, seen sense listed opportunity magnitude that you've in you've Thank to for interesting, this to of a wins, these be relation of the you On lot kind what of give wins. new some order sounds way past, us color? quarter's large you. the accounts, strategic in important to bookings some of

Jeff Puritt

the for Nice voice again. your hear questions, Tien-Tsin. Thanks to

Tien-Tsin Huang

Likewise.

Jeff Puritt

but going to me for struggling and to provide disclosure ahead, the bear to a be sort being longer, you'll in to think forward months of I hope little quarters able on with continue looking with constraints the detail. I'm while even I more

in more capability, invest correlated in with as major multiyear, remarks, our I to say directly pace and to own four and These value significant are, that us. capabilities in some again, accelerated take wins, have the game full suite some total radiating that are QX we'll our our very it's result. and significant business in I said, We're the meaningfully able indeed, sales that speaking, of targeted improved really of it's referenced of hopefully, see marketing I absolute it's I And not penetrating And enabling think the their activity at momentum some of verticals. capability. the with to as other particular, up TI. provide players continuing up I to looking forward potential as a contract for in successful transformations with of and industry said, across from platform color. think saw to dissimilar rewarded And wins think fair we nice a entirety be accounts. we digital Generally more changers time, I our lot being larger my fullness commercial in to our strategic take an

Tien-Tsin Huang

it. hear to Thanks. Glad

Jeff Puritt

Thanks much. so

Operator

Thank you.

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

please. question, Your

Unidentified Analyst

for on you about how what this in annotation the inflation? you wage labor services Ted mentioned labor questions. taking Maggie. within you're Thanks model Jeff, you the Hey, And Can maybe crowd market? protect our a market. talk against for sourcing data seeing tight the maybe of kind of terms tight is does

Jeff Puritt

not of reevaluating back a that they think, are inflation they want had that And continuing job pandemic and whether any forward, arising something is styles I consequence to we So return news they continue going capable out environment, increased to for lifted. there's a it's not in traditional alone restrictions wage stay want an economy. it's job are I talent fair demand being not or or the office the think to you whether the the the all. is quarantine off as whether not digital to not or to is the of say that there of before dynamic is People participating there of again, at experiencing that work opportunity in to

crowd that gig they folks' more crowd bit such time then that relationship, personal our not take is the opportunity bearing into step workforce out attrition interoperability, really business environment. already time I may wage employment evolving and have full and driving temporary yet employment an will, our our think, team that is given historically members sometimes don't if an circumstances, participated you one of in although and so model, a I So a Thus ambitions actually sourced perhaps we're as only that's we're members we didn't our necessity. to the said, full circumstances there's in to terms think do out workers, back of own their my traditional quarter-over-quarter We time where there's unique We inflation between economy. it sort want a pressure so, but the move have absolutely of think of of of full in folks of manageable, totality, a fruit. our decrease opportunity, And personal basis offering finding more - far, that points levels. what's from I in into those we And XX seeing. of but be some many a conversely, where of saw choice,

our leverage So quiver crowd that and of these mitigate it's still as challenges. and model now early to of time team community, million the optionality. see more north us plus of gives consequence interoperability plus But labor that, of in admittedly I in in the to that full some our time absolutely fullness arrow another days of a members, XX,XXX try continue think hoping for to the

Unidentified Analyst

Thank sense. you. Makes

Operator

you. Thank

comes the next Matt Cabral Credit Our of from question from line Suisse.

please. question, Your

Matt Cabral

how more initial expertise about or Thank of just then that little technical guys expand on a are I bit a your more months more bit sounded about guess, performing could know prepared I acquisition. in, six now you broadly, to now. Jeff, you but it but Playment And relative this you. And calling remarks it's talk type little bought the everyone. just expectations. you wondering Good AI a talked guys of in Yeah. like little TI AI the guys just Lionbridge bit are a if you of integration about you your morning, as

think and of Just cadence forward? M&A curious should how that about we going the

Jeff Puritt

again hear Thanks your Nice the well. to voice for Matt. questions, as

AI know of in apology, progressing So it's I former my is Solutions, mouthful, LI. the a Data TI integration well from terms

the perpetual you quo. before, think may I this have me with As say status I heard dissatisfaction have

the more as capability finance, to last of offering I we're think The former exception. of I conjunction this of with We've go always doing Data faster business do reasonably same here, operations, services annotation units, and and business that well. of part HR, the the successfully already combined enabling well. as totality we successfully, appropriately and so But net IT its I is moderation managing be family could is has with existing alignment alluded applying quarter we AI part aligned progressed into think better, working reporting can no in Solutions overall made in integrated LI the the delivery and our that TI new customers. admittedly, matrix we very, so team content of the to cross-sold to have even sort rest clients well, TI very services our TI progress structure

unambiguous So acquisition integration we appropriate thesis the validation one. an I and an have think, that was again,

augmentation accelerant is identify productive them more a set essentially five technology by capability. Playment activity. XD the more sort enables our be of powering and image of in community, allows and right. It's annotation content an to and XD with them of that that, You're video hands using really quickly to annotation our up tool really them to times

world, So old one, nine early achieve hit that outcome. next it's a in steps of connection in strokes an and preprogrammed the outcome, hitting might think use me, in already automatically where, macro to days you for you can with instead an baby XX the that like application key boomers

we So continue where of accurate. be lookout continue hands expect sign our we potentially again, efficient in to to opportunity, the deeper, areas pools; and members' to think highly team And I us extending for productive, will economy. both technology digital our in technology terms in as perhaps on the M&A strategy, makes realize access and and tuck-in enablement more then growth of us the a areas new ambitions substantial, talented terms of closer more equally that Playment reach, of you our other see to it's and our look our importantly, the in talent broader extend them be and achieve help acquisition as, to should geographically, to to things come existing that for continue and much whether customers, serve access customers adjacencies reach,

Matt Cabral

much. Thank you very

Operator

Thank you.

next Our CIBC. line Stephanie from Price the from of question comes

please. question, Your

Stephanie Price

had Fintech solid eCommerce if curious Good quarter. more color the growth morning. you give Thanks for a the bit about wonder Obviously, in I I & it very vertical. was my there. questions. taking could

Jeff Puritt

leveraging community capabilities. I fintech of It's identify sort going there's quickly, working we color, not more start-up I them say on inappropriate that just them guess, easily, them help to sort more our host moderate IT of with. businesses to would help their fraudulent to to automate, we're enablement more digital activity help of traditional, a terms that in the user here, see of So capabilities of

verticals. that parts a one safety. our platform is business, improving As of that client their of business see e-commerce pretty client again, not it's technical double certainly on assisting of more the little yet, I so of confirmation I of relative the ours support a do sort really digits, and whether resonating think, I of exciting that a customer of these of see capabilities targeted is in variety that opportunity level in quite our across and And it's of the new delivered largest there. strategy experience, that also part to we trust world, our and and as more the But actually revenue in in It's just a a to constituency. way mentioned, kind XX% of excited today, into growing basis, growth think big bit about a with

Stephanie Price

Thank you. Great.

Operator

Thank you.

the America. question from next Our from of Bank line of Kupferberg Jason comes

question, Your please.

Unidentified Analyst

on Cathy for Jason. Thanks This for taking is my question.

deeper bit a dig Just margins. wanted in to gross on little

margins quarter-over-quarter. a think I I bit little a saw adjusted of gross dip in

with cadence wage the the being in the we the hikes you. to extent that to through How you for are what back-half kind the customers Thank the instead? that, to dynamics of able of year? on to mentioned of are that be kind know there. tacked passed And what about Just wanted should think before

Vanessa Kanu

Hi, Cathy, it's Vanessa here.

gross think into you margins, well, it look gross terms I QX in QX, the we've for your question, of at of got margin. think I if don't versus sequentially details

are ramp. On hiring frontline members engagement. planned were team last primarily direct about did ramping talk who our we client second-half hiring And the for call, we

that did have ramp we as impact margin. that QX did during So QX an on the gross

you on the this that margin adjustments are going call. merit our primarily second-half across much see talked SG&A, a versus from we also to we perspective. about that that on was first-half expected think but gross very as of is But So the and because call and about within last normalization,

So of in across is we wage lot to of our of adjustments, - do that that that going in increases of happen June. merit some different actually all happened countries, a July. Most

versus effect look the you have of we to terms think so in speak, the more guidance this normalized as second-half profile, the in seasonality, do is So full increases cost do a because meaningful, getting that looking the margin just to merit at at year first-half. taking profile, we

Unidentified Analyst

you. Thank Got it.

Operator

you. Thank

Our Capital next the from Perlin of comes Dan question from RBC line Markets.

please. question, Your

Dan Perlin

you good And morning. The quarter. little I think sales quarter, have your funnel. a talked A Thanks. I nice about guys last is question bit

updated it just was to quite kind Thank billion, million you over $XXX as last any commentary here said up a you you. of have bit quarter maybe I'm that maybe that. today. you could sit provide you wondering $X think if above I close to

Jeff Puritt

bit of size the a exact where the out. bit provide in practice updating in funnel the just the And of of into you of was, still about want billion. a and not little here Thanks, of north I of funnel funnel, specificity. we the is there's converted get as value tell robust, lot sure much Dan. we a want quarter to talking level time QX to very Yeah. $X color landed whether of we that that quarter but in We will We candidly. sort spent of

substantial opportunities. convert a good those opportunities, the So with replenished converted did new we portion only is but of news opportunities not we those

totality, of degree would year. our And of high our performance to of in there say first-half to given looking continues cycles targeted of we're into quarter, And so the continuing give already for I the obviously, now optimistic confidence pretty achieve a these closely comfort too, business. and the in first the ability the funnel traditionally, about trajectory feel next me duration to sales year, and pretty

Dan Perlin

Thank Excellent. you.

Operator

you. Thank

Our from comes line next question Keith the from BMO. of Bachman

please. question, Your

Keith Bachman

that of a your words, sustainable competitive trying in is, in more more some measure, pretty competitive terms your you recent speaking, current and Hi. the see a perspective. My that unfolding. and M&A impressive very landscape much. some and a tech bit and into tech the and you. how little gaming the growth gaming In areas other diving And rates. in to Thank specifically to are you even particularly rates landscape, then about how differentiation hear Thank to the broadly I relates understand one previous of from down and bit wanted win question

Jeff Puritt

Thanks the for question, Keith.

sure much rates. So in provide win we that not terms granularity I'm of

I think XX%? a we you comments, the degree of at think new calculation. it's as opportunity at think but Again, But always well. and that's to XX% I your win converted I can of stage then in subjectivity the Is of opportunities Is that are when XX% number, a what folks doing an reasonably think funnel close, shared there's an I better, should earlier already rate? we're I calculate mid-XXs-ish. that sort waiting the it we to back it now inherently my may qualification? do subjective it So triggering in and some there. is have we're think probability Is measure sort conversion

or unique been competitive In seeing what dynamic, than the terms our experiencing again, today candidly I'm not we've anything I'm new of from inception. sure different particularly

partners value sector case their are platform. as Our players looking innovation, are they focused value generally tech-savvy that and are platform achieve them will and that for we digital leveraging are looking for collaboration, for more the to more are are not for but the are going ambitions, help Obviously, outpace in the ambitions. more looking partnership they attracting themselves of businesses, help on those exploiting, clients businesses their for spending looking, technology for to money, away. these in competition. indexed order in And more them and to, who's just In often generally, publishers, achieve competitors looking but importantly, more from themselves to on own money someone and They're players see than to said, differentiate more money player for want tech delight. the games keeping they which, playing not, money native. over that looking are These throw broadly, longer not that

for want They wallet their incremental outpace again, sailors. share, competitors. to spend to like but their over value looking helping grow on, So money lifetime and indexing drunken platforms not grow achieve to them money subscribers revenue,

if people people I business and to of business elements this long as want not ecosystem, so of we want digital there's can to who to the And continue offer do of do importantly today, with more transformation with lens them. all those equally, think

another RFP responses So pronounced well. you've And this also more, in be we're lens And demonstrate recognizing, I positively putting in participated and I've supporting in can together. our personally a that ESG from contributing to number economy, to folks around and market mouth equality money our helping inclusion what partnership, strategic the are that one doing actually recognition deep we around into where more is to diving practices. order to And diversity of then lives the is workplace. to and tell where going our to got and/or to make celebrating more I are And you, reviews selling a think and of better. sort the people's world, buying becoming as

are lot think mask we're a we're so I responding And requirements, these we have experiencing around about being debate time. too, back complex if to an into that's all and can team Are do think thoughtful, forth? you whether of rushing office? indeed, the to exciting, are the continue we it's far. factors, But well. to so So interesting responsive on of I thoughtful sensitive pandemic, how what you so mandated we members

Keith Bachman

All right. Many thanks.

Operator

you. Thank

line the Our from next question of comes Ashwin Shirvaikar from Citi.

please. Your question,

Ashwin Shirvaikar

The client. you. client now become to Hi, hear Jeff. social Vanessa. Thank media has your Good you. Hi, from largest

growth. You mentioned a pretty strong

of moderation? it broader think that data it related annotation to how is you'd moderation content maybe a content market if case, see in mostly that's content growth the see Is question sustainable sort And XX%. moderation reflective near-term overall? is if I of integrating. And was the and you offerings

Jeff Puritt

question. your Ashwin, voice Hey, Nice keeping thanks hear for safe. Hope as the to you're well.

much tied it's is data more content fair say But there's think to work. I includes moderation. excitingly, It than to that. that that growth also related of and annotation just

them and is larger the them I the this excited remarks, given them. for as of And can I rate with of explosion about alluded So size other more radiate is, the big content, soon. in how that's customer, abate reasons. prepared again, my to having just think and this a these for the the think going opportunity, partnered I particular anytime I opportunity of don't successfully is here sell couple opportunity I many what of to account, do this the extend generated One, driver to and to growth we as across guess, continue them I sustainable? clients, with of user to unique do, because do we're with

so, content, and being is really video, meaning evolution the staggering. and of velocity text, when text, not just is it mixed the you now produced, volume and multilingual, that image, And pace complexity multi-culture, is content think about it's and quite of multicounty,

being try to with in I And us a the managing It's success earlier. a rate right monetized just are not and of of trust can in this opportunity it's and placement. trying example, audience that both of from exciting effectively, challenge take safety mentioned content of I ads real ensuring proliferation content. candidly, that continue also way be to perspective, and pace again, more think as are to have so all about And front the keep this placed for going up and to this improve that like, or client leverage all of to

and ecosystem exploit And So, more support really fantastic we're exciting, complex delivery core our traditional about with of that extends quite capability around growing of sort them. content to to work excited the again, opportunity this moderation. customer,

Ashwin Shirvaikar

hear. That's you. Thank to good

Jeff Puritt

Ashwin. Thanks,

Operator

you. Thank

Our the Financial. National next Richard of from comes question Bank from line Tse

Your question, please.

Richard Tse

differences I'm And Yes. using the your what any of client annotation data your related, just there you. it segment? guess overall comes to base are strategy Thank proportion data curious, annotation services? today when I is in the go-to-market

Jeff Puritt

just our using would capability. majority But annotation I'm of are it's and we exactly the capability, disclose surprised will of yet, haven't the what relative we our sure So today that I customers to not don't given it be not proportion think hear that yet. nascency

we're terms in is I are In really I think, AI. still the I obviously, the right? terms surprisingly, And in I think annotation days way, in front. difference mean, relatively data the underpinnings of go-to-market, think of in AI not of early out way hyperscalers proliferation,

mid-markets AI-enabled still and at But again, starting the that. I early embrace enterprise solutions. earlier, stages mentioned and adopt to of think I we're As relatively

the algorithms be consume machine kindling the learning of employed the are to predictable, of of think I here to here. beneficiary the massive, that think, coming opportunity but excited days I these massive more accurate, sort still which we're by about road I annotation really to the so relatively capability, scaled upside. what's And as deliver output said, is the outcomes, fuel But early there's AI down for

Richard Tse

Okay. Thank you.

Operator

you. Thank

Capital. comes Steep question next from of Our the Scotia Paul line from

please. question, Your

Paul Steep

Jeff. morning, Good Great.

and last seeing Just little you non-tech talk test seen on what support, cases of Thanks. putting data demand? clients bit you've might and be about engaging to on some maybe the with that out AI you're that fueling how a annotation there from point, regards could

Jeff Puritt

guess, the day of I I remarks, read me prepared It the harken was, I would end in too smile. that won't by - to benefit there aren't be food examples mean, just name other bacon. made I my in it's potentially I no very won't something the Steep. the So, at taste day going back be transformed from near-term to industries different AI, the many a And AI. better that group that with won't that to referenced

now The I it particular, left improve as in probably think, scarcity able in humanity's leverage to fan to arguably that challenges AI, that vision referenced there's a like one improve food to fact a industry few really really good support ages arguably I unabated. And sector am. here's to continues to terms Now amplify you're population traceability, is to technology, ag accelerate is of computer the production, crop earlier, I and old help speaks bacon very client food food of one. really growth biggest farming if yields, that

do be where have but forgive because really leverage might we me, it's difficult circumscribing think this guess how or able to a I I I So time ubiquitous.

hang Sorry, second. on one

I front outside going that. door here. about on Sorry my have construction

me. Forgive

I'm more appreciating sorry, fully suffice we examples. not clients But but being perhaps question. off-line, helpful opportunity Really, there's applications our right can by more improving and embrace I'm to - not point. Tech Games imagination only example, & limited help not are to some only. So more Look this think for say, It's only. the AI Fintech medical now, not at talk I'm activity applications it's specific at to diagnostic about the I with the eCommerce computer really imaging. vision & own healthcare, and perhaps

Paul Steep

Thank you.

Operator

Thank you.

TD Chan line Securities. of Daniel Our from next the from comes question

Your question, please.

Daniel Chan

Hi. Good moderation side. content the to I into wanted morning. dive

up for mention Section You XXX and the proposed a there. social might be for seen go of U.S., this away. in most recent a that to with wondering whether around the news media did trend whether platforms some is is think for fake of Thanks. how in an your health your discussions just I'm new We've from where you and for comes going any bill protections tailwind developments that's markets. misinformation you ongoing

Jeff Puritt

Yeah.

fair board, to in As debating, front bit you this. of out trying in a time particular, get discussing, our might we imagine at of spent

admittedly, is going to we to think yet I future. the bias, we I implications I know there own a Section sure XXX for are, think be irrespective we of changes but foreseeable don't reality for for perform anticipate the the what or think, the need not, is services is that my

important right? demand, truly issue a do in as unique sustainably advantage North it's will regulation, to regulatory at and in This keep then, I English just this higher these capabilities our to valuable jurisdiction an to heterogeneous in another, be levels continue partner multiple platforms think a there negative even able to with not see seen not if this regulatory platforms environment, scale globally across just trusted platforms It's and And to one as American again, and expertly, and high opportunity negative, is safe. to quite languages our a to given be the efficiently, order we likeliest more of will already the community which be language. we've well critically continue opportunity expertise, outcome, positive outcomes evolve. harmonization as I that's and admittedly the the to and necessarily. It's is is afford. global that that this regulatory perhaps the it advisor of really the to having impact, outcome be as regime sort subject to right? at the intervention standardization and us familiarity multiple as resource even and are address these think advantage And going scale, we regimes I as anticipating And And to and oversight, to closely for or capability and an continues to experienced digital and we're the for we've and ability experience discharge expertise think how when scale, competitive And the it large everybody, easier we we of more work our or seen already. not responsibility such is, positive of have think trying make that were first different scale unregulated. responders existence given both do

Daniel Chan

you. Thank

Operator

you. Thank

Baird. line Dave of Koning the Our from next question comes from

please. question, Your

Dave Koning

a like is more weaving and might Yeah. this public QX. a that be, my of Congrats, we're I of in seasonality up in is into that QX kind thought, think, question as in and Hey, would just year. Should Lionbridge. guys. I light just thank sequentially the relative what first you. rest to And maybe company guess my And model I and be about and your thinking QX question really the since quarters about the same? QX, seasonality, both maybe be Lionbridge ramps is touch

And what to so question I a kind on just of expect. sequential is this guess

Vanessa Kanu

no question. that typically for in a We doubt, Dave, And a our Hey, here. within similarly we bucket. is, Thanks business. some Lionbridge, have second-half first-half. do stronger it's now seasonality your Vanessa falls than There TI AI,

know to actuals get don't there you quarters. What would specific sequential the though, the of - full we see just the our what But don't as across if improvement given certainly it we the you to guidance - you we are. know for have I today, year. down as business. guidance first-half take We we do So entirety say, expect issued we do

second-half QX, approximation QX. like and as can between would the QX reasonable about we think I think XX-ish a that a think QX, you split derive XX, And I be from number.

it that So that model will give I way, a think sense to kind expected if you you of were play for to seasonality is the profile out. how

Dave Koning

Awesome. Thank you. super Yeah, helpful. that's

Vanessa Kanu

Thanks, Dave.

Operator

Thank you.

line Our Faucette from from question Morgan comes of James next the Stanley.

Your question, please.

James Faucette

head. incrementally of is, levels, us versus lot her bit Thanks able that? you're able results wage in a I nice through driving increase And employer you kind of little pass a per of mentioned increasing guess TELUS' here. talk with and being are and per being you a Vanessa, what at and more Vanessa Jeff about what's a you, lot. are chatting to in curious little mark to up about good even Can as some Thanks commentary really services? the much lot, looking as revenue to a how

Vanessa Kanu

Good Yes. James. to you. hear from Thanks,

food to a member speak, fact, from chain, moving so in basis. per are, We the up team revenue

quarter, in we at XX%, that under So XX%, just expect trend continue. annualized the were to we and do

we And a trend back to As quarter of certainly, I changes to our a to increase. plans, as That's services. driving for toward that to to drive by for longer-term continue us, metric increasing expect not that it's meaningful us. that's But higher-value what's mid- digital, that every going we think that really single mix move degree.

And our revenue member so see from always outpaced our growth. growth I can has you think historical and as our team profile,

to this think you're see going continue to prospectively. I

for our wage plan single surprised standard of terms never We by are We're them. very industry. increases, In them those every year. within

case on we sometimes on which relentlessly customers. customers, certain those But admittedly, in always is can't we are pass on focused to we We able possibly can those to instance. we're as being costs internal as have single some can, business. as continue I why efficiencies. That's that's those quite and we laurels the why that efficiency we costs not to certain efficiency rest can continue that we as just on business to now. how how again, able the to our And And things on say because ourselves our assume pass driving not that's we pass drive to for those cost increases been well will in that's drive do time manage we just so every new. certainly, improvement, digitization, our

James Faucette

Thanks, Vanessa. great. That's

Vanessa Kanu

James. Thanks,

Operator

Thank you.

Our Shirvaikar final follow-up question for line today is Ashwin Citi. a the from of from

Your question, please.

Ashwin, you might phone on mute. your have

Ashwin Shirvaikar

affect spoke second would to that primarily question. I just that time taken ramp you to wanted take the they signed to the Or, does future Sorry back about and years? account that. outlook already new you to consider Thanks the increase contract ask, go and of? outlook for you the

Vanessa Kanu

typical a Yes, signed. our that But the members. has the Hey, we've these think if ramp, ramp, about admittedly, take of consideration that we've you a Ashwin. wins when of you new some on outlook increase team into referenced, think Jeff hired contracts does just new

a training, you generate of through then go period the revenue. You to start and

and been lot of much so more we start those into absolutely, revised will a wins to consideration into the guide. exit XXXX. generate they XXXX But So in new as revenue yes, have more taken

Ashwin Shirvaikar

Thank Okay. you.

Vanessa Kanu

Thank you.

Operator

further I'd hand program Puritt Mr. question-and-answer the session of to remarks. today's conclude does This like to the for back any program.

Jeff Puritt

QX quarter ahead revenue is competitors. engaging for Jonathan, and you, we with as forward our for conversations now, in day. In virtual profitability continuing coming rapidly, investors well set ability through conferences, in great forward TELUS the to on from and the I and analysts. Thanks to a to questions. for updated first-half an evolve format as a carried again your the International and to will you, not and of investor Vanessa want for the clients, confidence Indeed, closing, stay my it, and this September, all. have and to help up full for we've year, look impressive yourselves am still once several August forward very reemphasize Thank goals of to and and in much family the us. your makes to momentum thank excited look we team's but our only safe, to participating Thank their our continue to the XXXX. ourselves QX growth continuing change, leading our you we strategy and playing role at In from year execute thrive Keep is be technology in interim and so achieve everyone, for to second certainly beyond. continuing I embrace about and joining I

Operator

today's Thank the in conference. your gentlemen, participation for you, program. This conclude and does ladies

day. now disconnect. may You Good

TELUS International (TIXT) 1 Aug 212021 Q2 Earnings call transcript