TTEC Announces Second Quarter 2022 Financial Results
08/09/2022 - 04:05 PM
Second Quarter 2022
Revenue was $604.3 Million $35.9 Million $61.2 Million $25.2 Million $46.4 Million $84.1 Million $0.53 ($0.98 Non-GAAP)
Signs Bookings of $170 Million
DENVER Aug. 9, 2022 TTEC Holdings, Inc. (NASDAQ:TTEC), one of the largest, global CX (customer experience) technology and services innovators for end-to-end digital CX solutions, announced today financial results for the second quarter, ended June 30, 2022 .
" We exceeded our second quarter revenue and profit expectations and are confident in the long-term enduring strength of our business," commented Ken Tuchman , chairman and chief executive officer of TTEC. "Over the years, we have diversified our business by expanding our CX capabilities, global clientele, industry expertise, and geographic footprint. Furthermore, our suite of digitally-enabled customer experience solutions provide the outcomes that our clients need to deliver increased customer value and brand loyalty. Our ability to help attract, retain, serve, and grow profitable customer relationships remains mission critical in any economic cycle. Amidst this dynamic macro environment, we will continue to focus on innovating new digital CX solutions, delivering superior services to our clients, maintaining business agility, and prudently investing for the future."
SECOND QUARTER 2022 FINANCIAL HIGHLIGHTS
Revenue
Second quarter 2022 GAAP revenue increased 8.9 percent to $604.3 million $554 .8 million in the prior year period. Foreign exchange had a $10.5 million Income from Operations
Second quarter 2022 GAAP income from operations was $35.9 million $65 .8 million, or 11.9 percent of revenue in the prior year period. Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, and other items, was $61 .2 million or 10.1 percent of revenue versus $78.6 million Foreign exchange had a $2.7 million Adjusted EBITDA
Second quarter 2022 Non-GAAP Adjusted EBITDA was $84.1 million $95 .7 million, or 17.3 percent of revenue in the prior year period. Earnings Per Share
Second quarter 2022 GAAP fully diluted earnings per share was $0.53 compared to $1.00 for the same period last year. Non-GAAP fully diluted earnings per share was $0.98 compared to $1.27 in the prior year period. Bookings
During the second quarter 2022, TTEC signed an estimated $170 million $204 million STRONG CASH FLOW AND BALANCE SHEET FUND INVESTMENTS AND DIVIDENDS
Cash flow from operations in the second quarter 2022 was $77.6 million $63.1 million Capital expenditures in the second quarter 2022 were $19.1 million $12.0 million As of June 30, 2022 , TTEC had cash and cash equivalents of $163.2 million $934 .7 million, resulting in a net debt position of $771.5 million $667.8 million As of June 30, 2022 , TTEC's remaining borrowing capacity under its revolving credit facility was approximately $425 million $360 million TTEC paid a $0.50 per share, or $23.5 million April 20, 2022 to shareholders of record on March 31, 2022 . This dividend represents a 16.3 percent increase over the April 2021 dividend and 6.4 percent over the October 2021 dividend. SEGMENT REPORTING & COMMENTARY
TTEC reports financial results for two business segments: TTEC Digital (Digital) and TTEC Engage (Engage). Financial highlights for the two segments are provided below.
TTEC Digital – Design, build and operate tech-enabled, insight-driven CX solutions
Second quarter 2022 GAAP revenue for TTEC Digital increased 8.0 percent to $116.6 million $108.0 million $10.9 million $9.6 million Non-GAAP income from operations was $17.1 million $17.1 million TTEC Engage – Digitally-enabled customer care, acquisition, and fraud mitigation services
Second quarter 2022 GAAP revenue for TTEC Engage increased 9.1 percent to $487.7 million from $446.8 million for the year ago period. Income from operations was $25.0 million $56.3 million percent of revenue for the prior year period. Non-GAAP income from operations was $44.1 million, or 9.0 percent of revenue compared to operating income of $61.5 million or 13.8 percent of revenue in the prior year period. Foreign exchange had a $9.7 million negative impact on revenue and $2.5 million BUSINESS OUTLOOK
"We are pleased with our second quarter performance, achieving many of our key metrics, closing on a meaningful strategic asset acquisition, and surpassing $600 million Dustin Semach , chief financial officer of TTEC. "Taking it all together, amid a dynamic, rapidly changing macroeconomic environment, we delivered a strong first half of 2022. However, our second half 2022 updated outlook reflects a recent shift in client decision making and moderation in certain verticals' growth-related volume forecasts."
Semach continued, "We are helping organizations across the world deliver value-added, outcome-based customer experiences through our digitally-enabled CX technology and service solutions. The investments we are making, the client relationships we have built, and our talented leadership and teams position us well to navigate the dynamic environment ahead of us."
Third Quarter 2022
Full Year 2022
Revenue
$575M — $585M
$2,399M — $2,429M
Non-GAAP adjusted EBITDA
$63M — $69M
$312M — $328M
Non-GAAP adjusted EBITDA margins
11.0% — 11.8%
13.0% — 13.5%
Non-GAAP operating income
$46M — $52M
$236M — $252M
Non-GAAP operating income margins
8.0% — 8.9%
9.8% — 10.4%
Interest expense, net
($10M ) — ($11M )
($32M ) — ($33M )
Effective tax rate
23% — 25%
22% — 24%
Diluted share count
47.4M — 47.8M
47.4M — 47.8M
Non-GAAP earnings per a share
$0.56 — $0.65
$3.40 — $3.66
Engage Full Year 2022 outlook
Third Quarter 2022
Full Year 2022
Revenue
$461M — $467M
$1,938M — $1,958M
Non-GAAP adjusted EBITDA
$46M — $50M
$240M — $250M
Non-GAAP adjusted EBITDA margins
10.0% — 10.7%
12.4% — 12.7%
Non-GAAP operating income
$32M — $36M
$177M — $187M
Non-GAAP operating income margins
6.9% — 7.7%
9.1% — 9.5%
Digital Full Year 2022 outlook
Third Quarter 2022
Full Year 2022
Revenue
$114M — $118M
$461M — $471M
Non-GAAP adjusted EBITDA
$17M — $19M
$72M — $78M
Non-GAAP adjusted EBITDA margins
15.1% — 16.3%
15.6% — 16.5%
Non-GAAP operating income
$14M — $16M
$59M — $65M
Non-GAAP operating income margins
12.4% — 13.7%
12.9% — 13.9%
The Company has not quantitatively reconciled its guidance for Non-GAAP operating income margins, Non-GAAP adjusted EBITDA margins, or Non-GAAP earnings per share to their respective most comparable GAAP measures because certain of the reconciling items that impact these metrics, including asset impairment, restructuring and integration charges, cybersecurity incident-related costs, gains or losses on the sale of business units or other assets, equity-based compensation expense, changes in acquisition contingent consideration, depreciation and amortization expense, and provision for income taxes are dependent on the timing of future events outside of the Company's control or cannot be reliably predicted. Accordingly, the Company is unable to provide reconciliations to GAAP operating income margins, net income margins, and diluted earnings per share without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the company's 2022 financial results as reported under GAAP.
NON-GAAP FINANCIAL MEASURES
This press release contains a discussion of certain Non-GAAP financial measures that the Company includes to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these Non-GAAP financial measures can be found in the tables accompanying this press release.
GAAP metrics are presented in accordance with Generally Accepted Accounting Principles. Non-GAAP - As reflected in the attached reconciliation table, the definition of Non-GAAP may exclude from operating income, EBITDA, net income and earnings per share restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, among other items. ABOUT TTEC
TTEC Holdings, Inc. (NASDAQ: TTEC) is one of the largest, global CX (customer experience) technology and services innovators for end-to-end, digital CX solutions. The Company delivers leading CX technology and operational CX orchestration at scale through its proprietary cloud-based CXaaS (Customer Experience as a Service) platform. Serving iconic and disruptive brands, TTEC's outcome-based solutions span the entire enterprise, touch every virtual interaction channel, and improve each step of the customer journey. Leveraging next gen digital and cognitive technology, the Company's Digital business designs, builds, and operates omnichannel contact center technology, conversational messaging, CRM, automation (AI / ML and RPA), and analytics solutions. The Company's Engage business delivers digital customer engagement, customer acquisition & growth, content moderation, fraud prevention, and data annotation solutions. Founded in 1982, the Company's singular obsession with CX excellence has earned it leading client NPS scores across the globe. The Company's nearly 60,000 employees operate on six continents and bring technology and humanity together to deliver happy customers and differentiated business results. To learn more visit us at https://www.ttec.com
FORWARD-LOOKING STATEMENTS
This earnings release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, results of operation, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance. In this release when we use words such as "may," "believe," "plan," "will," "anticipate," "estimate," "expect," "intend," "project," "would," "could," "target," or similar expressions, or when we discuss our strategy, plans, goals, initiatives, or objectives, we are making forward-looking statements.
We caution you not to rely unduly on any forward-looking statements. Actual results may differ materially from those expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences as outlined in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 and any subsequent filings with the U.S. Securities and Exchange Commission (the "SEC") which are available on TTEC's website www.ttec.com , and on the SEC's public website at www.sec.gov . Important factors that could cause our actual results to differ materially from those indicated in the forward looking statements include, among others, the risks related to our business operations and strategy, including the risks related to our strategy execution in a competitive market; our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share; risks inherent in the reliability of our information technology systems; risks related to our information technology infrastructure's cybersecurity in general, and criminal activity such as ransomware, other malware and data exfiltration or destruction in particular, which can impact our ability to consistently deliver uninterrupted service to our clients; our dependence on third parties for our cloud solutions; risks inherent in our transition to a work from home environment; our ability to attract and retain qualified and skilled personnel at a price point that we can afford and our clients are willing to pay; our M&A activity, including our ability to identify, acquire and properly integrate acquired businesses in accordance with our strategy; the risk related to our international operations; the risks related to legal and regulatory impact on our operations, including rapidly changing laws that regulate our and our clients' business, such as data privacy and data protection laws, regulatory changes impacting our healthcare businesses, financial and public sector specific regulations, our ability to comply with these laws timely and cost effectively; and the cost of wage and hour litigation in the United States ; the impact of the COVID-19 pandemic and post-pandemic economic and regulatory realities on our business and our clients' business; and risks inherent in our equity structure including our controlling shareholder risk, and Delaware choice of dispute resolution risks.
Our forward-looking statements speak only as of the date that this release is issued. We undertake no obligation to update them, except as may be required by applicable law. Although we believe that our forward-looking statements are reasonable, they depend on many factors outside of our control and we can provide no assurance that they will prove to be correct.
Investor Relations Contact
Paul Miller
paul.miller@ttec.com
+1.303.397.8641
Address
9197 South Peoria Street
Englewood, CO 80112
Communications Contact
Tim Blair
tim.blair@ttec.com
+1.303.397.9267
TTEC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three months ended
Six months ended
June 30,
June 30,
2022
2021
2022
2021
Revenue
$604,250
$554,794
$1,192,976
$1,094,013
Operating Expenses:
Cost of services
463,510
400,323
910,725
788,983
Selling, general and administrative
66,766
61,300
131,605
114,057
Depreciation and amortization
26,314
24,916
52,944
45,375
Restructuring charges, net
2,528
1,725
3,148
2,127
Impairment losses
9,248
700
10,360
4,217
Total operating expenses
568,366
488,964
1,108,782
954,759
Income From Operations
35,884
65,830
84,194
139,254
Other income (expense), net
188
(2,104)
(2,118)
(4,525)
Income Before Income Taxes
36,072
63,726
82,076
134,729
Provision for income taxes
(7,274)
(11,353)
(15,308)
(27,332)
Net Income
28,798
52,373
66,768
107,397
Net income attributable to noncontrolling interest
(3,564)
(5,004)
(8,130)
(9,610)
Net Income Attributable to TTEC Stockholders
$ 25,234
$ 47,369
$ 58,638
$ 97,787
Net Income Per Share
Basic
$ 0.61
$ 1.12
$ 1.42
$ 2.30
Diluted
$ 0.61
$ 1.10
$ 1.41
$ 2.27
Net Income Per Share Attributable to TTEC Stockholders
Basic
$ 0.54
$ 1.01
$ 1.25
$ 2.09
Diluted
$ 0.53
$ 1.00
$ 1.24
$ 2.06
Income From Operations Margin
5.9 %
11.9 %
7.1 %
12.7 %
Net Income Margin
4.8 %
9.4 %
5.6 %
9.8 %
Net Income Attributable to TTEC Stockholders Margin
4.2 %
8.5 %
4.9 %
8.9 %
Effective Tax Rate
20.2 %
17.8 %
18.7 %
20.3 %
Weighted Average Shares Outstanding
Basic
47,047
46,840
47,026
46,792
Diluted
47,383
47,409
47,381
47,388
TTEC HOLDINGS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)
(unaudited)
Three months ended
Six months ended
June 30,
June 30,
2022
2021
2022
2021
Revenue:
TTEC Digital
$116,591
$107,995
$ 230,174
$ 171,582
TTEC Engage
487,659
446,799
962,802
922,431
Total
$604,250
$554,794
$1,192,976
$1,094,013
Income From Operations:
TTEC Digital
$ 10,879
$ 9,565
$ 17,226
$ 13,767
TTEC Engage
25,005
56,265
66,968
125,487
Total
$ 35,884
$ 65,830
$ 84,194
$ 139,254
TTEC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
June 30,
December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$ 163,204
$ 158,205
Accounts receivable, net
391,587
357,310
Other current assets
186,042
182,472
Total current assets
740,833
697,987
Property and equipment, net
167,293
168,404
Operating lease assets
99,731
90,180
Goodwill
810,929
739,481
Other intangibles assets, net
252,943
212,349
Other assets
93,464
88,403
Total assets
$2,165,193
$ 1,996,804
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$ 98,241
$ 70,415
Accrued employee compensation and benefits
148,432
156,324
Deferred revenue
97,740
95,608
Current operating lease liabilities
43,721
44,460
Other current liabilities
73,230
77,589
Total current liabilities
461,364
444,396
Long-term liabilities:
Line of credit
930,000
791,000
Non-current operating lease liabilities
72,288
64,419
Other long-term liabilities
94,750
102,648
Total long-term liabilities
1,097,038
958,067
Redeemable noncontrolling interest
55,752
56,316
Equity:
Common stock
471
470
Additional Paid in Capital
364,251
361,135
Treasury stock
(595,331)
(597,031)
Accumulated other comprehensive income (loss)
(125,450)
(98,426)
Retained earnings
891,185
856,065
Noncontrolling interest
15,913
15,812
Total equity
551,039
538,025
Total liabilities and equity
$2,165,193
$ 1,996,804
TTEC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
Cash flows from operating activities:
Net income
$ 66,768
$ 107,397
Adjustment to reconcile net income to net cash provided by operating activities :
Depreciation and amortization
52,944
45,376
Amortization of contract acquisition costs
1,063
350
Amortization of debt issuance costs
500
447
Imputed interest expense and fair value adjustments to contingent consideration
-
1,046
Provision for credit losses
198
155
Loss on disposal of assets
1,116
386
Impairment losses
10,360
4,217
Deferred income taxes
(9,161)
(5,522)
Excess tax benefit from equity-based awards
(913)
(3,340)
Equity-based compensation expense
7,882
7,399
Loss / (gain) on foreign currency derivatives
224
21
Changes in assets and liabilities, net of acquisitions:
Accounts receivable
(38,271)
48,515
Prepaids and other assets
35,866
3,175
Accounts payable and accrued expenses
21,041
(18,062)
Deferred revenue and other liabilities
(58,345)
(58,721)
Net cash provided by operating activities
91,272
132,839
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment
102
29
Purchases of property, plant and equipment
(35,790)
(23,593)
Acquisitions
(142,420)
(481,718)
Net cash used in investing activities
(178,108)
(505,282)
Cash flows from financing activities:
Net proceeds / (borrowings) from line of credit
139,000
449,000
Payments on other debt
(1,877)
(3,522)
Payments of contingent consideration and hold back payments to acquisitions
(9,600)
(11,517)
Dividends paid to shareholders
(23,518)
(20,132)
Payments to noncontrolling interest
(7,219)
(5,589)
Tax payments related to the issuance of restricted stock units
(3,065)
(6,680)
Payments of debt issuance costs
-
(1,102)
Net cash used in financing activities
93,721
400,458
Effect of exchange rate changes on cash and cash equivalents and restricted cash
(12,350)
(1,930)
Increase in cash, cash equivalents and restricted cash
(5,465)
26,085
Cash, cash equivalents and restricted cash, beginning of period
180,682
159,015
Cash, cash equivalents and restricted cash, end of period
$ 175,217
$ 185,100
TTEC HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
Three months ended
Six months ended
June 30,
June 30,
2022
2021
2022
2021
Revenue
$604,250
$554,794
$1,192,976
$1,094,013
Reconciliation of Adjusted EBITDA:
Net Income
$ 28,798
$ 52,373
$ 66,768
$ 107,397
Interest income
(271)
(230)
(471)
(409)
Interest expense
6,194
3,381
9,960
5,183
Provision for income taxes
7,274
11,353
15,308
27,332
Depreciation and amortization
26,314
24,916
52,944
45,375
Asset impairment and restructuring charges
11,776
2,425
13,508
6,344
Changes in acquisition contingent consideration
-
169
-
1,046
Grant income for pandemic relief
-
(2,012)
-
(8,044)
Cybersecurity incident related impact, net of insurance recovery
(167)
-
3,669
-
Equity-based compensation expenses
4,143
3,371
7,882
7,399
Adjusted EBITDA
$ 84,061
$ 95,746
$ 169,568
$ 191,623
Adjusted EBITDA Margin
13.9 %
17.3 %
14.2 %
17.5 %
Reconciliation of Free Cash Flow:
Cash Flow From Operating Activities:
Net income
$ 28,798
$ 52,373
$ 66,768
$ 107,397
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
26,314
24,916
52,944
45,375
Other
22,474
(14,237)
(28,440)
(19,933)
Net cash provided by operating activities
77,586
63,052
91,272
132,839
Less - Total Cash Capital Expenditures
19,099
12,028
35,790
23,593
Free Cash Flow
$ 58,487
$ 51,024
$ 55,482
$ 109,246
Reconciliation of Non-GAAP Income from Operations:
Income from Operations
$ 35,884
$ 65,830
$ 84,194
$ 139,254
Restructuring charges, net
2,528
1,725
3,148
2,127
Impairment losses
9,248
700
10,360
4,217
Grant income for pandemic relief
-
(2,012)
-
(8,044)
Cybersecurity incident related impact, net of insurance recovery
(167)
-
3,669
-
Equity-based compensation expenses
4,143
3,371
7,882
7,399
Amortization of purchased intangibles
9,554
8,968
19,090
13,483
Non-GAAP Income from Operations
$ 61,190
$ 78,582
$ 128,343
$ 158,436
Non-GAAP Income from Operations Margin
10.1 %
14.2 %
10.8 %
14.5 %
Reconciliation of Non-GAAP EPS:
Net Income
$ 28,798
$ 52,373
$ 66,768
$ 107,397
Add: Asset impairment and restructuring charges
11,776
2,425
13,508
6,344
Add: Equity-based compensation expenses
4,143
3,371
7,882
7,399
Add: Amortization of purchased intangibles
9,554
8,968
19,090
13,483
Add: Cybersecurity incident related impact, net of insurance recovery
(167)
-
3,669
-
Less: Changes in acquisition contingent consideration
-
169
-
1,046
Less: Grant income for pandemic relief
-
(2,012)
-
(8,044)
Less: Changes in valuation allowance, return to provision adjustments and other, and tax effects of items separately disclosed above
(7,671)
(5,072)
(13,525)
(7,677)
Non-GAAP Net Income
$ 46,433
$ 60,222
$ 97,392
$ 119,948
Diluted shares outstanding
47,383
47,409
47,381
47,388
Non-GAAP EPS
$0.98
$1.27
$2.06
$2.53
Reconciliation of Non-GAAP Income from Operations by Segment :
TTEC Engage
TTEC Digital
TTEC Engage
TTEC Digital
Q2 22
Q2 21
Q2 22
Q2 21
YTD 22
YTD 21
YTD 22
YTD 21
Income from Operations
$ 25,005
$ 56,265
$ 10,879
$ 9,565
$ 66,968
$ 125,487
$ 17,226
$ 13,768
Restructuring charges, net
2,415
866
113
859
3,035
1,259
113
867
Impairment losses
9,248
700
-
-
10,360
4,217
-
-
Grant income for pandemic relief
-
(1,906)
-
(106)
-
(7,938)
-
(106)
Cybersecurity incident related impact, net of insurance recovery
(167)
-
-
-
3,669
-
-
-
Equity-based compensation expenses
2,810
2,292
1,333
1,079
5,239
5,033
2,643
2,366
Amortization of purchased intangibles
4,784
3,305
4,770
5,663
7,999
6,614
11,091
6,869
Non-GAAP Income from Operations
$ 44,095
$ 61,522
$ 17,095
$ 17,060
$ 97,270
$ 134,672
$ 31,073
$ 23,764
Reconciliation of Adjusted EBITDA by Segment :
TTEC Engage
TTEC Digital
TTEC Engage
TTEC Digital
Q2 22
Q2 21
Q2 22
Q2 21
YTD 22
YTD 21
YTD 22
YTD 21
Earnings before Income Taxes
$ 24,814
$ 54,156
$ 11,258
$ 9,569
$ 64,498
$ 120,918
$ 17,578
$ 13,810
Interest income / expense, net
5,968
3,186
(45)
(33)
9,565
4,848
(76)
(72)
Depreciation and amortization
18,480
16,427
7,834
8,489
35,698
32,999
17,246
12,376
Asset impairment and restructuring charges
11,663
1,566
113
859
13,395
5,476
113
867
Grant income for pandemic relief
-
(1,906)
-
(106)
-
(7,938)
-
(106)
Changes in acquisition contingent consideration
-
169
-
-
-
1,046
-
-
Cybersecurity incident related impact, net of insurance recovery
(167)
-
-
-
3,669
-
-
-
Equity-based compensation expenses
2,810
2,291
1,333
1,079
5,239
5,033
2,643
2,366
Adjusted EBITDA
$ 63,568
$ 75,889
$ 20,493
$ 19,857
$ 132,064
$ 162,382
$ 37,504
$ 29,241
https://www.prnewswire.com/news-releases/ttec-announces-second-quarter-2022-financial-results-301602849.html
SOURCE TTEC Holdings, Inc.
