TIXT - Earnings call transcript Q4 2021 | TELUS International (Cda) Inc.

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Operator

Good morning, ladies and gentlemen. Welcome to the TELUS International Fourth Quarter 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 any background noise. After the speakers' remarks, there will be a question-and-answer period. now and introduce Treasurer would Director, Mayr, I Relations, Investor at instructions] like Jason to Senior [Operator TELUS International. Mr. begin may you the Mayr, call.

Jason Mayr

us and call today Good you Jeff Puritt, QX Thank everyone. Chief are our Investor today Executive Chief and joining Officer. Officer; XXXX our Jonathan. International's Kanu, for Hosting you, Call. President TELUS Vanessa morning, for Thank Financial

for an the with we prepared remarks, key highlights provide will quarter will on overview begin some some year, Vanessa, operational usual, by strategic As Jeff and provide followed who the and where will highlights. financial

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

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

Jeffrey Puritt

of Jason. you, IPO joining for our operating of Services XXXX their you history, Thank the to strategy year of our integration was latter during AI today. global represents best deliver TELUS in prolonged remarkable first Toronto morning entire a the Exchanges, everyone still one International. game growth acquisitions, day our Canadian and our pandemic. changing successful the despite From Good on and trading for in thank of a of New brought to which tech largest us each York across on Stock the the us XXXX very organization challenges

these highly is As and solutions and to than to breathe our our a customers. commitment team XXX innovative service into is constant the life is excellence engaged and more extension evolve, our by the for clients. build it world. design, important has Equally to what our care to their unwavering team's clients the for business commitment remained continues our After individuals our around talented of deliver all, global members that we

represents results XXXX. $X.X an of our financial versus in XX% total of billion Our the revenue rate reflect with efforts growth team's success impressive This XXXX.

and year-over-year profitability margin XX% EBITDA robust with XXXX. also annual XX X% EBITDA annual in a increase remains adjusted Our of in an

our and commitment on and to including interest growth the macroeconomic of long an flow. focus shareholders, delivers value destination to broader pandemic standing attractive rates, and offers environment, backdrop to Given possible we believe the capital cash uncertainty, continued rising TI for real profitable

in a a QX high team again sales the replenished funnel, global comfortably in marquee sales on billion. of clients year and excess adding with $X new Our ended note, once several

to the for computer of top the U.S. gaming include fourth market and global the graphics, in and growing PC leading in wireless software a manufacturer exciting carrier, pioneer company, quarter welcome TELUS Australian and International marketing, brands modern American large sales developer software we customer a service. a Some for a rapidly

which I company, that also throughout brands, quality, of We cryptocurrency high rewarded end companies. up company, company, so share the and habits. continuum. include world's represent project and particular involves This the our illuminate serve expanded scope turn with CX team's and how largest build our relationships longer on other top one expected my the life even the enablement these American design examples of healthcare see banking bring we largest consumer and app that exercise with begin has one breadth pleased largest of clients, to exchange further sharing relationship solidifying now delivery of I'll technology tracks with these engagements dollar, a since our we beyond. am existing digital world's calls, clients subscribers one e-commerce to to for world's the food from of I'll the including and across evolved global multimillion being services one leading many database electronics more valuable deliver consistent specific platforms, some support clients. growth to of clients. with the XXXX of our term revenues favorite our large our ramping These but a these of services side, wallet our intake, opportunities better end with where that automation is to the started parts

accurate the of from automate values that search food to for We're also we the food each of powered remove platform data Our food retrieving clients enhances team is variety nutritional tools AI categorization bot as information set per an food items. a for process cubes. to data embedding by predefined a redundant and client's items nutrition building item, data up automation our groupings, helping

global our on regions this team demand for premium base, client increasing business. they partner services, value high member their grow customer client's We meeting this our with care languages also encompassing support as several across support continue to and

company Canadian particular, required that Microsoft and transition for transformation, partner platform utility Another in to application. I'll the upgraded support seeking while large was Exchange their and client modernized a services an its in that engagement stability email that ensure could a process. infrastructure to technology manage a security highlight advisory Western the The was support technical augmenting and of

transitioning excuse whilst Online action. concurrently unlocking for client's In technology end successfully Our experience XXX of the while like team all total, Exchange nearly leveraging to managing a team some of their powered mailboxes, over registration Prem. this examples team solutions managed hybrid project user end, me, the recent Exchange Office and on XX,XXX of our to environment modernized and mobile Microsoft's XXXX users members, AI I'd solutions, also platform. enhanced share in our to to migrated

to world's collected The clouds. and from designed urban the One differing of consistency satellite protect original the client vulnerable mapping water learning using sensors datasets like to sensors, bodies flood many timestamps, with the in-house the most and multiple our segmentation climate XD by in communities. imagery platform to areas team semantic in bodies, detect clients detecting machine due built complex client's distortions lacked RADAR camera is collected leading and The weather and water varying images XD conditions. included and

We Our via labeling, uploaded platform. outputs accurate XD provided and integrations up XD to API XD precision connectors, solution sensor with XD for real-time our this and and results faster pipeline proprietary client included human-in-the-loop data more with delivering labeling then our setting data tools. high

and team total there process labeled at our ensured accurately classified automate In helped the each step. controls advanced XXX,XXX of were in fields six process. months, transcribed XX% quality also XXX,XXX documents We and

As focused software or with This assurance. all very moving cooking moving perform common setup outputs. to for train also e-commerce projects quality use project their collection efforts training to involves control meal. collection for capture for and around company, management advanced managed video sourcing an several collect outcome, fast One while AI logistics, teams, like into the scenarios, for AI data We AI and confidential of a from our as is waves quality homes ensured air expedient spaces, ultrasound million countries. accuracy and more local conditioners, paced feedback parts, noise to participating such blenders in its training the to world's advance radio, example data across of and and X sound cleaners, different hardware XX% our actions multiple domestic data of many quality participants and music management highly from all tapping vacuum of algorithms. of homes individuals and by audio clients waves a and different and supporting our tools, the in our than kinds labeling community We're mechanisms our and largest team onboarding data

every background team data for project in ensure help high requirements to learning of that a of nearly positioning country achieve attention be the and collection recruits once carefully teams, home, to detail and each our needs type collection For to meet power for its machine extreme client's scope, systems. trains delivery the requires client's collection session our and to the technical specific project to This very of database. new successfully a device a is requires quality local quality client's noises we managed setup, and as data starts,

data banned due relates network multiple and continuously mitigate of of social user For video transcribe safety being popular we content transparency world's regions most and to clips our audio it and the to input in on to network's AI languages. one client regulations its to train the improve as experience a as critical to countries transcription in that focused another certain uses or the The are services, promote client, networking short to annotate evolving. risk content algorithms its the

ecosystem, for that brand has we've are partner client performing program continues reputation this our consistently quality, of and several received for management. this extremely we're terms partners we the to in its quality of feedback proud that this set team top bar client's While productivity, fact particularly high, within the as

team At from majority work the to end home. work of team As the continued challenging persists, our members approximately we remotely. of vast pandemic to and continue to of members global our enable XX% productively safely XXXX, the environment

safety to has since developed very areas team we've top many the proud at supportive, recognition early provide, choose a to a unique as critical the thoughtful to years, to on importance say a success very this our benefited wellbeing we for resilient more pandemic particularly I'm in requirements nuanced that content in the our and moderation. of services caring mind by the approach focus a of many members. culture, of Over the our complex of such wellness of For employees. we've International, prioritizing of building from and organizations, Driven been the some always inception. TELUS with brought workplace light

and to in-person that available numerous commitment our we many sites, programs and the to as virtual being is relaxation unwavering present the such the Our facilities well and our in in well cases fitness benefits our extend medical amenities as members and team's team families. our services in spaces, provide, as

and specialists TI. From Our place clinical accommodate those psychologists mental include services holistic workplace remain the support for content wellness customer beyond, by our our working to the from health company. have and guided to home person a during in to our and at time the health moderators counsellors team choose safe, individuals employed and world. experience wellbeing in our members is our These health pandemic. are programs and to engineers, full team they among available to wellness careers are virtual healthy, by global our and team help members are thrive These over many that in and available to others, of and experts we around able approach XX,XXX who touchpoints to

unprecedented is the a continues way basis of our us continuously recently ensuring psychologist, hiring, we at chartered ESG difference TELUS building four and we sincerely challenges, our team governance the that their believe all our ahead with programs communities key and members team to International TELUS note, to critical We arm I employee and harnessing keep social Wellbeing TELUS yet biggest the leading International decades over party commitment caring on diverse, experience their thank the and since assess and she results this to want to where survey year global in date, Dr. team's of We organization for with [ph] all is quartile company's engaged top is the due work, Director despite support a an see minds, that many score XXXX. Indeed, researcher conducted live, to our Ratterree is the achieved and To at to serve. of feel enduring by of our benefits size and of the We team we've as motivating Lucy work successful customer XXXX to members with to I they footprint. for hard Workplace On promoting commitment tools need contributions and at partnering expectations. fostering ranked environmental At through comparable conditions contributor wellbeing and approach. for global in our third author, we've early years successful employee hearts of make Dr. who been to engagement, shine impressive organization, our our and Concentrix, a one, talented operating enables within team was TELUS culture. and XX%, our to customers highly our year also and appointed them an International eighth while and for same Global hands review our clients to in marking exceed the planet's consecutive annual their roles. approach. another of this remain priorities are; our our International. in who a Ratterree evolve end, organizations are our and of

efforts members. For through TI's representing our XX% a team with of XX% managers senior of XX% team above our our example, to Two, impact workforce of giving by are lasting currently, XX% Board. women, back and communities our and of creating meaningful the management of women

team's Responsibility International company's lastly, forward gas your continue delighting as our progressing I'll we line sustainable for focus International Chief answer external digital of thinking the principles the global capabilities our team, in assessment Care of Experience, always, to on experience. analyst customer over to to impacted December, of TELUS priorities Operations, Transformation where over lives holistic International TELUS Moreover, call Services our and volunteers Social to party back application a be including we the planet International was then, industry each by again, our our consumption. leader clients. Worldwide continue strong NEAT also to Kanu client's Officer, Three, technologies, that, third principles, be TELUS to strategic results their emissions to in you NelsonHall's water The named people TELUS of just on this and see Vanessa to the financial and XXX,XXX And use and today, With and principles through TELUS and and look to firm a approach XXXX, report. remarkable will design have fact, other In XXXX-XXXX adhering in through efforts named than to Corporate of more almost evaluated the efforts. corporate driven XXX,XXX of in and on governance. our Customer ESG be Financial company's leader I through supporting first International's take greenhouse questions. regard. And on a by IDC's MarketScape, continue recognized since pass our organizations decline four, Vanessa, validation you. I'll passion now among a Customer was all, transform Digital

Vanessa Kanu

you, and today. Jeff, for joining morning, Thank Thank good everyone. you us

that at are As morning start call, Jason non-GAAP measures. we'll some the of of items the review this mentioned the

to morning. earnings of adjusted see that related robust full attuned high original organic This GAAP towards indeed headwinds double year-over-year. acquisition. XX% These in strong increased our our execution the in business said, To were for headwinds in year, growth of XX% EBITDA end and with contributions and and demonstrates a for year, in are raised our our QX of non-GAAP year Adjusted was the increased growth growth strategy. XX% For of our rates reflecting digit Jeff from half a Euro release particular, previously share XXXX diluted second revenue earnings not exchange spite consistent was outlook, in International, earlier per outlook. the on growth foreign the and reconciliation TELUS and great this description measures, what please echo from of

components Revenues million and Let upon were of in fourth for QX up financial year-over-year. performance expand $XXX me now quarter year. full our the XX% some

full or Our included the for in exchange Prior headwinds prior of in a International of Solutions. organic foreign delivered existing TELUS of is $X.X goes alike. $XXX contributed U.S. new period growth rate. XX% QX basis, demand acquisition currency, same the acquisitions I revenue, XX%. XX% revenue clients earlier, exchange Data services dollar and when we to of XX% our organic related reflecting what X% XX% as called results On revenue mentioned a year increasing or provided million was constant the growth and AI record growth organic in growth compared by year-over-year now revenue our reflects year, strong with driven approximately as to euro to This of billion to

We full of the executed approximately exchange on organic strategic included revenue the year high in mid have growth teens. targeting growth X%. a basis, favorable of to sustainable On organic our impact goal foreign annual a

Looking Central in Asia the Europe, at and in revenue quarter, fourth XX% in revenues year-over-year North XX% geography, grew by America, XX% America. in XX% Pacific, in

our an quarter verticals to all the fourth we increasing From both Again, again achieved end growth perspective, Pacific end Asia each XX%, with the while America across we client coming demand growth Europe, in digital key year. results For grew correlated XX% industry North for and the verticals at full once these of and America Central with are for solutions. of at in XX%. saw in full solid year, revenue

full data a vertical. the in as International's in Tech this growth Our the and with AI grew key in XX% driver vertical & solutions of year, Games also quarter largest year-over-year TELUS

fintech and quarter e-commerce transformation, experience. the up again driven customer year vertical, see and for XX% revenues gen in digital We solutions full momentum year-over-year XX% strong basis, strong continue in with to on a and demand by the and next

and healthy other strong verticals and XX% growth for double hospitality including digit showed the year, full similarly X% and travel and communications our media year-over-year. posted of verticals all Finally, while the quarter for healthcare, growth

Looking higher e-commerce total contributed in Tech and compared the collectively across XX% XX% XXXX, prior with of and increased our growth fintech in & the which we verticals, clients, exposure revenue year. to Games

native So skewed revenue expanded growth digital our only more growth to but meaningfully not our we high have base, clients. is

and expenses, to was Moving on customer client and in team salaries support fourth and to operating salaries XX% increased million, growth base demand, our the expense facing quarter up due the $XXX benefits wages. employee in higher member average to

For the year, for with salaries the same to full increased and billion quarter. $X.X the benefits XX% as drivers X

Our were period in increase last over services goods the same million $XXX million quarter, an $XX and purchased the of year.

in administrative Share prior the were incurred year. acquisition competition adjustments awards quarter full due $XXX fourth XXXX. the particular prior software compared award million compensation to the increase share a based expense was TI million fourth full the language year, and costs goods higher to in historical year services recognizing for charges of to increase million based $XXX in other primarily services million our to costs purchase purchased same This a and was in XX% an ago, in The recruitments prior $X were from are transaction growth million, $XX quarter year crowd fourth which to contractors, On in year on basis goods and and was the million, source expense the driven the decrease largely integration business. of and other the base support year. the Acquisition, and share AI was million, basis, mark-to-market of our compared year. vesting AI acquisition, $X due in the the a a by quarter compensation increase For in of and increase due share. quarter from $XX customer the to $XX on full the

partially was and million, year in in of the integration costs full due CPC the and transaction with in of AI. our for related Lionbridge $XX charges by incurred integration subordinate XX% declined primarily the to other This by with integration the lower shares secondary XXXX, decrease offering acquisition, For to a year compared cost costs prior voting third offset XXXX. acquisitions associated of and the quarter to

the our quarter, was our X% expense, primarily interest expense $XX expense and lower quarter interest of was rates fourth prior last quarter with debt XX% balance fourth the leverage net in by million, the in improved from for And adjusted to Looking million, EBITDA triggered year. debt the the throughout was our compared million, same interest $XX decline at ratio expense due year of XX% tax full year-over-year. year, a lower a higher to Income interest $X the decline year.

in due basis, that On XX.X% from tax we amongst rates from XX.X% full an our in weighted our items. were primarily to to for non-deductible statutory in to items tax due and mix effective increase effective A income lower the in rate taxes XXXX resulted decreased year. non-deductible Our increase to a to incurred jurisdictions primarily withholding of portion tax earlier nonrecurring. decrease XX.X% the non-deductible of quarter. a in and an The income average rate a and in XX.X%, items increased change the year in be different were expect other IPO result a them

limited items. a of the can any before tax factors percentage ETR due which income jurisdiction not net of expense in certain period tax and as deductibility reminder, to expenditure including of tax vary income our a but accounting is As period given earnings mix our over the to period

up QX prior quarter up profitability, at our the same was basis, EBITDA to in in a XX% XX%. adjusted on Moving adjusted was guidance from the end and $XXX year. a compare $XXX top million million, top full our On of year the EBITDA range in

earnings a per year. was the the XX%. million, On margin into shift share driven per year and of $XX our technology consistent growth, gains. income the Adjusted for revenue prior with for which year profitable in reflecting quarter adjusted ongoing quarter XX.X% up strategic mix was share basis, adjusted consistent full line with net Our was of diluted $X.XX, this EBITDA efficiency the business translated

of For of earnings and $X, year. of $XXX adjusted income we prior of diluted an net achieved the share the increase million, from full XX% adjusted XX% per year, year-over-year, reflecting growth

Turning $XXX over Cash leverage. year million of closed sheet, healthy December liquidity very balance balance as to and the equivalents cash ample a and sheet, XXXX. improved we with the XX, were

grew million, approximately than million our $XXX credit at the prior of capacity end. $XXX facilities under includes to meaningfully liquidity $XXX available higher the This year revolving also total Our million. available

X.X the We meaningful potential to continued defined continue credit our Lionbridge maintain to quarter, time. our to In appropriate for a at fourth capacity approximately four the debt last for from last acquisitions improvement as the X.X net to we times we agreements leverage and strategic of improvement reduce were December ratio meaningful our after leverage, an reducing at EBITDA adjusted from when quarter AI. year acquisition of

good reminder, acquisition. the type the view as two go of to beyond right leverage, for three we ongoing range of we steady state this and an a flexibility As the amount [indiscernible] do have to

quarter than year million in Our year, to cash by $XX flow was for free year, million, flow the last the few was lower free same driven X% QX $XX a the cash prior factors. and compared in million $XXX full

First, year, compensation payments based along quarter with in historically income granted in settled cash awards. equity the payments higher our higher share and the from tax and

mainly are growth. in the by not were that and There outflows equity new a tied awards in As XXXX beyond settled to flow. impact capital receivables from our increase of cash will reminder, driven revenue also was working and granted all higher

Philippines of America, investments the and our and first expenditures site expansions including Finally, business form the of IT in increased in outside to in Central support site Metro Manila also continuing capital growth. North

added is supporting indeed Now XXXX year-over-year, new The in [indiscernible] strong, a our talented we XX,XXX increase we market members, key to an net whole, this International challenging our but XXXX, XX% bringing team business our of family. team more geography. across and in over to team and global new XXXX quarter, as turning despite segments members labor growth nearly added to fourth the members, our XX,XXX net team in over current than complexity, TELUS

talent. caring and Jeff pride our engagement As and we top quality our continuing you've culture says, enables attract global heard scores to take high differentiated quartile us clearly retain in

Now on to our outlook.

For digit growing solid for double both and rates XXXX, profitability. continue at expect we to revenue

For full the to revenues and XX% in an increase we in billion, a year, range of range $X.XX XX.X% currency the reported rate revenues billion in euro an XX% which third $X.XX to exchange on derived the to remains are our the one of over reflecting of expect on XX.X% a of basis, dollar. the that to assumes average $X.XX constant basis. at This U.S.

increases support organic exchange our consistent with For $X.XX. growth. does dollar wage XX%, adjusted include was rate reflecting EBITDA the that to development previous note in to margins euro in our reference, be U.S. the marketing average Also XXXX anticipate M&A. potential guidance practice, material for of We continued planned not and to the investment approximately impact sales, and product

share range million weighted quarters. $X.XX, over approximately growth of per in to to of of year. This last deliver diluted counts XX% diluted to the expect $X.XX average earnings each share which the in adjusted $XXX XX% the We reflects of assumes

year. reminder the the of our the earlier year seasonal half seasonality to increases our increases this perspective, guidance in While in in market labor XX% in into the revenue half. come planned half XXXX, a typically in response first From in XX% we took do not expect effect EBITDA current wage where adjusted first unlike wage quarter QX lowest XXXX. we cost with annual effect are A our a second seasonality and perspective, throughout the that revenue from volume of provide and quarterly ramps is to July, largely dynamics,

we early average full year the with planned business the investment of half I half, XX% the in our be indicated. in half, second first in up revenues stronger typical margins coupled members, the to seasonality, as with our EBITDA and a in adjusted Given approximately expect to lower in building just revenue the with team second year, margin

ourselves XXXX, see for questions. on we we the the continue look the commitments and of we As year that and building International. upon exciting now another pride enter forward business. on in delivering operational and capitalizing growth TELUS open momentum established that, long throughout to foundation for forward We XXXX With a look we before to lines our to on strong will

to As kindly it everyone Jonathan, you would participate. usual, that can you. please to ask keep to at a over I one time, question so

Operator

Kanu. Our from Paul Ms. the of Instructions] you, Steep line Thank comes from first Capital. question Scotia [Operator

Your please? question

Paul Steep

morning. projects how and then could to a you for terms talk of design good areas about one mix over I've And sort of flowed Vanessa. you. those how into like of deliver? roll business Thank in, clarification of Jeff, bit Great, build you've other bookings the the and quick got in little maybe build seen the

Jeffrey Puritt

the question, hear Paul. to Thanks your Nice voice. for

You know, we're the we half fourth of what of most what and saw of through and a continuation we XXXX what XXXX. latter saw the is XXXX I think quarter, through really through the anticipating

indeed, of we not our the Candidly, even but TI in I that capability just sort folks element our of continue with where efforts, got relationship and opportunity opportunities. and more to course, around of then framework, surface with more think automation our sort of is of dynamics recognize in the traditional rely the capabilities virtual of expanding for of macro more to of more that more continue I opportunities. broadly, on a International's invited more and combination of and mouth in the awareness in more them deliver quality to our is more design we their enabling the TELUS design sort a critical to users adoption importance be in wish of and build those word and marketplace and extensive more driving end capability set of and continuing, channel, build and conjunction meaningfully invest of direct sales creating to marketing

regard. with consequence the I to ability a and successful connection their in of build their so their evolution or their be enabling environments. seeing the in although nice TI's own may and coming of of customer, in us more, comprehensive we're have dynamics started engagements more existing than now deliver before, of more frequently current more is to and design that for recognition to are need them in think with where, One we an Again, they dynamic recognition of that do

So build that to continue we're and ensure can I'm capability share our expecting going of regard. more to to that we take prospectively, more in to continue that and

Paul Steep

how fiscal baked into into the Great baked clarification. call headcount similar Thank thinking guide? or year into assumption be a the thinking we you. to what's net year, of sort clarify you're just you the relative last Vanessa, current can just sort or about? just should We'll upcoming implied pace talk, growth guidance, of the

Vanessa Kanu

Paul. Thanks,

directionally, don’t guide I obviously, right. headcount So you're do think on but we that numbers,

to have see pace macro as supply XXXX, had prospectively saw team through we've a we good member so We expect expect will wide to obviously, to though XXXX. in Even continue similar challenges, and adding really certainly -- do a to we done we to we accounts, our job XXXX.

XXXX. more may think perhaps similar And growth I you pace. even XXXX. from XX%, currency constant have expect know, in So you organic slightly We're our accelerated, accelerated. growth a From as should revenue you currency is noticed, constant also about

currency growth constant implying is guide XX% XX% in to XXXX. Our

there piece well. So I thoughts to factor into that expect your think should you as

Paul Steep

Thank you.

Operator

Thank you.

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

question Your please?

Unidentified Analyst

[ph] for Matt Dan. sitting it's yes, in Yes, actually Rodwell

the force of the that [ph] pipeline the margin having much that, sales costs sounded up of that sort question, hiring in headcount wage are you how also in somewhat discuss EBITDA Following investing you And related XX? and going strong. is that on on mentioned you're to sort to pressure in

much So of rates of you seeing? investment are sort again, what win And for you thinking about sort how incremental are XX?

Jeffrey Puritt

how don't regards. I question, invite Thanks can our offer than top for I up. the to and I'll Dan other Matt, give much Vanessa you, please know

leverage we little the in negotiating remarks, in results and extent reflected employment But a inoculated slight you a not I on challenge to year, think, wage in of all to way my to to in post great one here. trying I to our evolution, bit earlier the people employers. seen last in that been change seeing pressure employees investment we've this to find inspire of navigate opportunities, engage in it, pandemic dynamic, is it the And, a inflation, this to our sensitive late post but both creating and that we admittedly, near, needs obviously, are relative I attract, previous opportunities, know, broadly, to talent candidly the as a as a between that interesting always sense talents. one's earnings pandemic, think challenges career But be or providing retain, interesting market said As hopefully, fair for has world, share of but you resignation, folks us labor the heard, some large attrition a and more we referring are them are from that destination calls not think with merely some around and discussed a entirely. has

and attrition new the inflationary elevated mitigate keeping with and those the for government in guidance good higher a reasonably proportions, in I there. subsidies of think But to than find but now, impact look well careers persist, members what And inflation, into it's the point perhaps through traditional what return cost XXXX to to willing team labor and certainly, sort back off setting balance quarter think to of their team re-recruit, from to their proficiency the seeing ongoing results wait of that first growing engaged what otherwise, now, of get a home given terms working be the our it We such of settles around the in out office avoiding I sort or and the pendulum terms at Net-net, members guess, think of not many We'll of right of may I levels year, associated extinguishment our driven to we've captured and of of or not the of wage come better et cetera. the in So retrain commutes, back, anybody's as historically for the levels, belief dynamic how decline new continuing certainly a and perhaps like as job that just we challenges done may most fourth will half not very dynamics guess that are with wages on XXXX. you're to into of wanting the people reflected well how or expectations part that doing we're for also challenges profitability. normal. the see is just productivity swings and office business. goes

Vanessa Kanu

to that, reminder, Jeff approximately we our the I I think also that just can acknowledge XX% as highest I think guide amongst adjusted our of the is a also only thing industry. in is EBITDA cough already would up margins today our and

We've the about of, in actually talked a organic constant know, we terms organic investments we during other for that least suggests payoffs our do guide growth continue to some into been our growth and increase through invest first sales address do constraints it XXXX. I seems and XXXX marketing. will you to as relative rates, we and in XXXX, we're think there, current So an there many, your are that headroom question bit continue outlook that quite in and But we these points we can margin making continuing baked of macro acknowledge to the some into that, that of have the think of side at growth supply sort that's half seeing towards well.

Unidentified Analyst

Okay, much. thank you very

Operator

you. Thank

about Huanga question from and next Our of from lot the young comes Tien-tsin JPMorgan. teens line

please? Your question,

Tien-tsin Huang

growth than want higher just you. Thank is what you. on revenue you the in I Good to Thank ask it XXXX. outlook, morning. did

mentioned, that's Here, but earlier. just like

back -- curious last same the the converting? in year? coming backlog I'm that's more or So it existing acceleration? from is general, it about it versus how does that's Thanks. driving what's you visibility Is stand book time just from the today And

Jeffrey Puritt

Tien-tsin. sources. Thanks, of a from guess it's number I

both in well new in As growth stride. to, remarks, even that we QX, starting as even as prior prepared just now net my we've I of calls, as a engagements existing. large more are signed number their to And recently hit in to shared alluded marquee so more

we rather those things are and of I new investments, engagements, laid So cylinders, that newer, bigger combination front, in well firing in as the XXXX fortunate a existing. XXXX, think to marketing all early sort and on or now as net of on materializing feel sales in growth

bit is differentiate confluence of through indeed, mentioned again, to think, right is our sort the our balance high in embracing give on given our meaningful I ability beyond an landscape on And for is against when their ability I to driven after a just third we're themselves, up giving the of solutions growth of then and as of So we're think do them ostensibly task It now put these of ahead. our continue And businesses yet, EBITDA, for a I like think, of us macroeconomic to pretty we're that. audience's this in against And profile. It's are then sort revenue the well we engagements, that, deliver by not of and recognized nature feels optimism, candidly our quite accelerated is have earlier, fairway serve the criticality where online automated frustrating EBITDA we headwinds. that outperform. raked XXXX stay peers, their foreign criticized well. sometimes But continue pretty nominal, exchange when entire there of as quarter we inverse, a being order fashion, they decrees occasion, to down us I right we're space. technology in of we clients I revenue fulfilling to confidence the misses Tien-tsin candidly, the the confidence well environment expectations. where to results, but enabled think bit on much on where the fueled And events anticipating growth. now, visibility in thankless across significant a as the and where revenue recognize acceleration some the a because

Tien-tsin Huang

thanks. Great,

Jeffrey Puritt

Thanks, Tien-tsin.

Operator

Thank you.

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

please? question Your

Unidentified Analyst

our Maggie, questions. Ted thanks taking is from this on for Hey,

up Europe So like growth? regarding nicely what America geographies? And was grew in picked drove you those delivery provide it color that particular and that looks quarter-over-quarter, line there North could service a

Vanessa Kanu

drove some space. as verticals. moderation in did so fact are Europe see, organic that my spaces, very from Hi, of fintech particular we as across was growth, North that better geographies Ted in a growth mentioned e-commerce I and increased then also America you services. clients it we the We is kind We're geographies saw that CX Vanessa. in And we're and those growth seeing sort saw question. If & in Thanks do market, in of and all service digital looking think or continually lines that much reflected. Games for of pretty those our at our in specifically, large of number the healthy, key I growth the Tech than the seeing terms we're content well of in that see organic remarks,

would regions, more it as broad those is based think those specific the at thing, than we particular so, look drivers. be And one I but key

Unidentified Analyst

great. right, Thank All you much. very

Vanessa Kanu

Thanks Ted.

Operator

you. Thank

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

please? question Your

Unidentified Analyst

for Hi it's Ryan questions. taking the on and thanks Ashwin for

it AI of to data and through business, improve seems accelerate XXXX. solutions kind your at Looking

out if there driving also driven how So wondering that's content this factors moderation? the sell being this by call to are cross I significant of And any along was acceleration? improvement is much with

Jeffrey Puritt

question. Ryan, Thanks, good

admittedly content getting that our aligned TELUS also IT better we offering latter continued half much that of moderation sort finally We synergized AI could the on performance and in capabilities. we front, haven't That of this. we the think integration a more portfolio consequence not level, just on of across segmented saw integrated, terms change sub customer International, factors, in of the demand. the just us. may obviously, really inside so compelling, disclosure bring indeed, number the it's And digital but provided of time, detailed macro fullness I progressed a for both a of and high acceleration of year, customer that But

LAI And and capabilities. so me, acceleration that combined AI the Playment, through customers the finally and progress, excited TI the adoption was value consequence them, think, offering, we'd and I both acquisitions excuse through hold that recognizing a improve to to starting think, the could former more continued We're and deliver particular, as inherited, XXXX those and enhanced in of of about I performance beyond. this and take embracing integrated

Unidentified Analyst

thank you. Great,

Operator

Thank you.

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

please? Your questions

Stephanie Price

morning. customer just Hi, touch here. to I good on wanted dynamics

drop social users a So daily a firm large media reported in quarter. this

growth Just some potential curious could at read clients incorporated through us talk a of growth the remind you how to client TI you potential slower into if guidance? and bit

Jeffrey Puritt

of guess I a Stephanie. Thanks very I couple mean, things much, worth noting.

to social are solutions more we critically and effectively value The first stacked I with do a do to that their they efficiency it driving and think, were themselves is it if unique partner that for regularly that for take. other upside ranked don't extent partners third we of be To cost us. well. on the macro the the, and incremental decide want anticipate in-house. is, that as end call we in just we're parties situation, We given and route to their continued media to really We that outperform to than those to other the provide, things client. success it And they important growth to address the TI represents that cutting contrary, that's order higher think that I

base those and the of are clients. commentary user share is, their other elevated also our I the worth their competition competitors me, also from there think market and away related market base to, reference competitors, The challenges, noting possible level shifts their about excuse thing

growth And top high think so opportunity platforms we're base comfortable of notwithstanding these just of well just some tech client our the number of challenges, our serving sort companies, that still in feeling so, benefit TI. and not these reinforces roster, for I those reasonably of having that's highest, upside XX diversified continued client there's a

Stephanie Price

thank you. Great,

Operator

you. Thank

the from line comes Ramsey of Our next from question El-Assal Barclays.

Your questions please?

Ramsey El-Assal

the powder for in, know has sort where wondering have of increased balance there nice just of about Good that you the M&A I consummate What kind whether Hi, some ask is of a questions. come at sheet really dry to deals. kind your thanks I point valuations seeing out for the point? I'm aperture my morning. now opened to opportunity taking this set wanted at the you with tech are having you? environment environment. now

Jeffrey Puritt

primary regard. can was that around my it know, you question. first at and this enthusiasm that excitement we time the the currency amplify as accelerate have that's this. growth the of I've thesis in some public to chomping our rotation to driver progress driving the great call a evaluation progress Ramsey, instance the I markets And transaction our at Thanks, what's is to strategy and a accessing I know think, for I been mean, in don't of now. see bit sort if

the as I'm indeed opportunities robust ago. not been are were But I think always of probably be of we've and six were assets we've I'm as acquiring. months as desirous worth overpaying we in what they to thought ago, months disciplined three parsimonious. had today terms

the all naturally then dysfunctional at one for pursues, and just, think, I efforts and it's overpayment way first first one unfortunate it's has realisation if at on to around. I just overpays around a purchase instance historically, try the think the synergy compensate then one price disaster seen instance,

mentioned, a in we do potential that I'm So prepared And, environment, are remarks, are as that rational in you by we assets the for positioned more terms encouraged that what I'm pursue. of currently we say, given, again, well might Vanessa perhaps her valuation as levels experiencing. seeing slightly believe dry we powder

the see think the enable asset exploiting opportunities So when, it's that will us our absolutely price, you of the for if consequence to the us, us purchase integration obviously should right opportunity transaction regard. comes I expect along, roadmap, in that's and a not this capability just also structure, consequence the of that the

Ramsey El-Assal

Got much. okay. so it, Thanks

Operator

Thank you.

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

question, please? Your

Richard Tse

that is when wage on a months and There Yes, prices. I it lag and you like it of thank is is say in about to six and or margins ability lag think sort you. fair months pass context? talk if XX you can really wonder that the your any temporary compression to inflation about

Jeffrey Puritt

Richard. Thanks,

we business, that have frankly, profitable a dynamics. of new perceived do approach on and the focusing engagements disciplined we you such since that a these by pandemic, and cola addressed wage high don't from the It's well. recall, language mixed of to have of are customer question part client inoculated quarter a in be as We not But bag. comprehensive we we our think growth but same our post heritage engagements, bit be fully sort last I value. may on our as TELUS sort inflation inception, both of across indeed a of absolutely can all our and

labor wage aggressively, indeed not the of our that of looking challenges have before, will opportunity cost yield, inflation, I this I a think laser as be pandemic, has challenges mitigate challenged profitable always demonstrated, just the been yields. focused this with approach that not been margin try inexorable of for been and on continuing inflation we inflation share customers growth, new always to indefinitely. and And post this said, actively history So has areas but and effort is we've And to growth. sort our around margin our

possible, you And many should to customers. So indeed, do with cases as we'll expect share in those to to us challenges our that. as look continue

if going a be think prospectively, the see we'll to to there's change landscape. I

part, had this a we're sure. always like think second challenges. you an here. I'm Do ways end? I in you said, to has think lost in shape when your be to going to I And question. do. these it. to this really me, good technology been I services, think just not you're I find But comes I I mitigate forgive have got

Richard Tse

think kind it No, I are was those In of impact back, answered the that. not kind would it. margins you've but would sort of to that and of that think you whether related temporary, pressures inflationary of the

Jeffrey Puritt

of I thing only the the would the we're mean, mix is remember, focused I services providing. to add on things is, other one Yes, that of the we're that that

outcome. margin upon not also that and more the And complex, our will more carry high work rely value, destination where dilution this margin we is too the of to expansion is an a implications So the mitigate our attributes towards a journey, business. again, customers inflation it to nature we're of some working provide wage we can

we've not as ongoing that's I and that's So been be been years many going to has for and what again, think working many, This new. well. towards

Richard Tse

Jeff. I thanks, appreciate Great, it.

Operator

Thank you.

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

please? question Your

Keith Bachman

on that Is CYXX and for growth assume, growth Many up previously, do echo versus you to could I much I define growth new know, deals. to if morning, most a how is you in growth it? of is seems know, between of I the bit? if just any a existing is And would just much comment customers? logos terms but could growth a XX. sell organic, outlook, about think way growth like Vanessa. there I [indiscernible] you the think sneak assume majority about in fairly ask overall thanks, that algorithm we've it organic? outlook. the little because existing from and the Jeff the July came contributing How But You clarification and from that vast I a then impressive good wanted customers, the how Vanessa anniversarried payment

help of may there, but could many thanks. bit So you clarify, be if a just little

Vanessa Kanu

Thanks, Keith.

I'll is coming maybe just existing. the growth So part much versus new from your the start of which with goes first question, of how is to logos

for new they clients So new be tends because to new then in and typically, time. of say given they any addition, expand clients that's less XX% have contribute small, clients expected, acquisitions And that year. year, over to start typically of happen period with if a what revenue would than

expansion one tends quarters. in growth the or year, of clients real from the the year previous that the be so to were And previous any in few given

new So the time. builds from those acquisition revenue clients over up contribution

any to internally at vast way new as So of of our of terms in look things we year versus in majority growth close to existing. given result the logos growth is a that, existing, the

revenue your client we with all second become part Keith. a the growth ultimately with to from outlook, perspective. those as And new continue a However, that win, of question, existing it's to clients organic, the expand then respect continue

lapsed one has year. AI into now So

business. within So had with the acquisition. Playment was AI you ramp around The really to growth, based and as continue organic material big were that's the so a is is The financials definitely growth our really much part do that new strong, acquisition, that technology guide frankly more as of that we metric. to was a our know, organic not a immaterial, guide.

earlier, in noted QX. somebody the performance think I strong

that We to momentum well we continue. as in and also QX, that saw expect

Keith Bachman

was that's a Many Yes, the clarification. certainly outlook. thanks it for thanks. thought but I organic, It's terrific. mostly positive

Vanessa Kanu

Keith. you, Thank

Operator

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

Jeffrey Puritt

shared your transformational a for Thanks, TELUS quarterly highly their May. be Jonathan, you place questions. proud was our still attend, taking could today. before us you for our plan of to during hope not in and and Thank update embrace We forward see closing, connecting the to bit and passion, And today year to Please we your Bye-bye. to you team and are format outlook look commitment reflects yourselves thank you, everyone focus unwavering into opportunities momentum from engaged so and challenges now. that, we next virtual perhaps I a and just year for all I conferences, XXXX unfortunately, we all our excited at and Vanessa confidence International XXXX for ahead. joining more excellence. The with the service In to longer little families in for safe. a keep and this

Operator

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

You may now disconnect. Good day.

TELUS International (TIXT) 10 Feb 222021 Q4 Earnings call transcript