• Full Year 2024 Revenue: $2.21 billion, a decrease of 10.4% from the prior year.
• Full Year 2024 Adjusted EBITDA: $202 million, representing 9.2% of revenue.
• Full Year 2024 Operating Income: $136 million, or 6.2% of revenue.
• Full Year 2024 EPS: $0.71, compared to $2.18 in the prior year.
• Fourth Quarter 2024 Revenue: $567 million, a decrease of 9.4% year-over-year.
• Fourth Quarter 2024 Adjusted EBITDA: $51 million, or 9% of revenue.
• Fourth Quarter 2024 Operating Income: $35 million, or 6.2% of revenue.
• Fourth Quarter 2024 EPS: $0.19, compared to $0.37 in the prior year period.
• Cash Flow from Operations 2024: Negative $59 million, impacted by the discontinuation of the accounts receivable factoring facility.
• Free Cash Flow 2024: Negative $104 million, compared to a positive $77 million in the prior year.
• Net Debt as of December 31, 2024: $893 million.
• Capital Expenditures 2024: $45 million, or 2% of revenue.
• 2025 Revenue Guidance: $2.04 billion, a decrease of 7.6% from 2024.
• 2025 Adjusted EBITDA Guidance: $225 million, an increase of 11.2% over 2024.
• 2025 Non-GAAP Operating Income Guidance: $164 million, an increase of 20% over 2024.
• 2025 Non-GAAP EPS Guidance: $1.08, an increase of 52.5% over 2024.

• Warning! GuruFocus has detected 9 Warning Signs with TTEC.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TTEC Holdings Inc (NASDAQ:TTEC) achieved revenue and non-GAAP adjusted EBITDA in line with guidance, with $2.2 billion in revenue and $202 million in EBITDA.
• The company successfully won 15 new enterprise clients in 2024, exceeding its new client acquisition goals.
• TTEC Holdings Inc (NASDAQ:TTEC) expanded its digital CX value proposition with differentiated, technology-enabled solutions, enhancing its competitive edge.
• The company was recognized as a Great Place to Work in 15 geographies, highlighting its positive workplace culture.
• TTEC Holdings Inc (NASDAQ:TTEC) strengthened relationships with over a dozen CX technology partners, enhancing collaborative product development and market strategies.

Negative Points

• TTEC Holdings Inc (NASDAQ:TTEC) experienced a 10.4% decrease in revenue compared to the prior year, with a decline from $2.46 billion to $2.21 billion.
• The company's operating income decreased from $200 million to $136 million, reflecting a decline in profitability.
• Cash flow from operations was negative $59 million in 2024, compared to a positive $145 million in the prior year.
• The Engage segment's revenue retention rate dropped to 82% from 95% in the prior year, indicating challenges in maintaining client engagements.
• TTEC Holdings Inc (NASDAQ:TTEC) faced a higher normalized tax rate of 40.9% in 2024, up from 22.7% in the prior year, impacting net income.

Q & A Highlights

Q: Ken, you mentioned that all of your deals are being infused with AI. Can you give us a sense of how exactly that is working and its impact on win rates and deal structures? A: Kenneth Tuchman, CEO: AI integration is progressing well, with over 150 projects on the Digital side and more than three-quarters of our associates using AI tools. AI enhances service quality, compliance, and fraud detection. It's used in agent desktops, operations, quality assurance, training, and recruiting. We are on track with our AI goals and will share more examples and impacts in future calls.

Q: Can you comment on the 2025 revenue guidance, particularly regarding clients that delayed large projects in 2024 and assumptions for seasonal revenue? A: Kenneth Wagers, CFO: The 2025 guidance anticipates slightly higher revenue in the second half, with a peak season similar to 2024. New enterprise logos won in late 2024 are expected to grow over 225% year-over-year, providing growth in the second half of 2025.

Q: Regarding 2025 margins, where is the offset from operating leverage, and what investments are being made? A: Kenneth Wagers, CFO: We are continuing cost structure adjustments and leveraging AI for operational efficiency. Investments include expanding our partner network and leadership, particularly in the Digital segment. These efforts are expected to improve gross margins and profitability.

Q: What are your assumptions for 2025 revenue growth, considering macroeconomic conditions and vertical performance? A: Kenneth Wagers, CFO: We expect 2025 to be similar to 2024 macroeconomically, with TTEC outperforming due to tailwinds in Digital and Engage segments. We are optimistic about technology and retail verticals, with diversification strategies driving growth.

Q: How do you view the margin uplift from increased offshore delivery versus cost takeout initiatives? A: Kenneth Wagers, CFO: Offshore delivery improved by 300 basis points in 2024, with a similar increase expected in 2025. However, margin expansion is more heavily weighted towards operational improvements and AI-driven efficiencies rather than just offshore delivery.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.