TTEC Holdings (NASDAQ: TTEC) Q2 2026 loss, leverage waiver and covenant reset
TTEC Holdings, Inc. reported weaker results for the quarter and six months ended June 30, 2026. Quarterly revenue fell to $455.5 million from $513.6 million, with both TTEC Engage and TTEC Digital down. For the first half, revenue was $951.7 million versus $1,047.8 million.
The company posted a net loss attributable to TTEC stockholders of $15.4 million for the quarter and $23.0 million year‑to‑date, compared with losses of $8.0 million and $6.6 million a year earlier. Basic and diluted EPS were $(0.31) for the quarter and $(0.47) for the half. Operating income declined to $11.0 million for the quarter and $29.5 million year‑to‑date, as cost of services, SG&A, restructuring and impairment costs pressured margins.
TTEC generated $78.9 million of operating cash flow in the first half, but used cash to reduce its line of credit to $855.0 million. Total assets were $1.37 billion, and stockholders’ equity decreased to $90.8 million. A major automotive client accounted for 12.1% of revenue. The company’s net leverage ratio of 3.85 exceeded its prior covenant, requiring a lender waiver on July 15, 2026 and an Eleventh Amendment that increases the permitted net leverage ratio up to 4.25 and loosens interest coverage requirements through September 30, 2027. Management states it believes current liquidity and the amended credit facility are sufficient for the next 12 months.
Positive
- None.
Negative
- Revenue declined over 11% year over year in Q2 2026 to $455.5 million, with both TTEC Engage and TTEC Digital contributing to the drop.
- Net loss attributable to TTEC stockholders widened to $15.4 million in Q2 and $23.0 million year‑to‑date, with EPS of $(0.31) and $(0.47).
- Operating cash flow fell from $114.3 million to $78.9 million in the first half, while $855.0 million remains outstanding on the credit facility.
- The company’s net leverage ratio of 3.85 exceeded the 3.75 covenant as of June 30, 2026, requiring a lender waiver and an Eleventh Amendment to reset leverage and interest coverage covenants.
Filing Explained
The August 7 amendment adds covenant headroom but reduces borrowing capacity, raises margins, expands collateral, and tightens restrictions.
The company reports that it entered an Eleventh Amendment to its credit agreement on
A Form 10-Q is an unaudited quarterly report; here, the amendment is completed, but its revised covenant thresholds apply from
The revolving commitment falls to
The filing states that the company’s
Key Figures
Key Terms
net leverage ratio covenant financial
cash flow hedges financial
Accumulated other comprehensive income (loss) financial
Tax Holidays financial
Pillar 2 framework financial
credit facility commitment financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did TTEC (TTEC) perform financially in Q2 2026?
What were TTEC (TTEC) segment results for TTEC Engage and TTEC Digital?
What is TTEC (TTEC)’s debt and leverage position as of June 30, 2026?
Did TTEC (TTEC) face any credit facility covenant issues in 2026?
How strong is TTEC (TTEC)’s cash flow and liquidity in the first half of 2026?
Does TTEC (TTEC) have significant customer concentration risk?
What are TTEC (TTEC)’s remaining performance obligations as of June 30, 2026?
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
| |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
| | |
| ||
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification No.) |
(Address of principal executive offices)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
| | |
Title of each Class | Trading Symbol(s) | Name of each exchange on which registered |
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐ | Non-accelerated Filer ☐ | Smaller Reporting Company | |||||
| | Emerging Growth Company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
As of July 31, 2026, there were
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
JUNE 30, 2026 FORM 10-Q
TABLE OF CONTENTS
| | |
| | Page No. |
| | |
PART I. FINANCIAL INFORMATION | | |
| | |
Item 1. | Financial Statements | |
| | |
| Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 (unaudited) | 1 |
| | |
| Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2026 and 2025 (unaudited) | 2 |
| | |
| Consolidated Statements of Stockholders’ Equity as of and for the three and six months ended June 30, 2026 and 2025 (unaudited) | 3 |
| | |
| Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (unaudited) | 4 |
| | |
| Notes to the Consolidated Financial Statements (unaudited) | 5 |
| | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 |
| | |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 35 |
| | |
Item 4. | Controls and Procedures | 37 |
| | |
PART II. OTHER INFORMATION | | |
| | |
Item 1. | Legal Proceedings | 38 |
| | |
Item 1A. | Risk Factors | 38 |
| | |
Item 5. | Other Information | 38 |
| | |
Item 6. | Exhibits | 40 |
| | |
SIGNATURES | 41 | |
| | |
| | |
Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in thousands, except share amounts)
(Unaudited)
| | | | | | | |
| | June 30, | | December 31, |
| ||
| | 2026 | | 2025 |
| ||
ASSETS | | | | | | | |
Current assets | | | | | | | |
Cash and cash equivalents | | $ | | | $ | | |
Accounts receivable, net of allowance of $ | |
| | |
| | |
Prepaids and other current assets | |
| | |
| | |
Income and other tax receivables | |
| | |
| | |
Total current assets | |
| | |
| | |
| | | | | | | |
Long-term assets | | | | | | | |
Property, plant and equipment, net | |
| | |
| | |
Operating lease assets | | | | | | | |
Goodwill | |
| | |
| | |
Deferred tax assets, net | |
| | |
| | |
Other intangible assets, net | |
| | |
| | |
Income and other tax receivables, long-term | | | | | | | |
Other long-term assets | |
| | |
| | |
Total long-term assets | |
| | |
| | |
Total assets | | $ | | | $ | | |
| | | | | | | |
LIABILITIES, STOCKHOLDERS’ EQUITY | | | | | | | |
Current liabilities | | | | | | | |
Accounts payable | | $ | | | $ | | |
Accrued employee compensation and benefits | |
| | |
| | |
Other accrued expenses | |
| | |
| | |
Income tax payable | |
| | |
| | |
Deferred revenue | |
| | |
| | |
Current operating lease liabilities | | | | | | | |
Other current liabilities | |
| | |
| | |
Total current liabilities | |
| | |
| | |
| | | | | | | |
Long-term liabilities | | | | | | | |
Line of credit | |
| | |
| | |
Deferred tax liabilities, net | |
| | |
| | |
Non-current income tax payable | | | | | | | |
Non-current operating lease liabilities | | | | | | | |
Other long-term liabilities | |
| | |
| | |
Total long-term liabilities | |
| | |
| | |
Total liabilities | |
| | |
| | |
| | | | | | | |
Commitments and contingencies (Note 9) | | | | | | | |
| | | | | | | |
Stockholders’ equity | | | | | | | |
Preferred stock; $ | | | | | | | |
Common stock; $ | |
| | |
| | |
Additional paid-in capital | |
| | |
| | |
Treasury stock at cost; | |
| ( | |
| ( | |
Accumulated other comprehensive income (loss) | |
| ( | |
| ( | |
Retained earnings | |
| | |
| | |
Noncontrolling interest | |
| | |
| | |
Total stockholders’ equity | |
| | |
| | |
Total liabilities and stockholders’ equity | | $ | | | $ | | |
The accompanying notes are an integral part of these consolidated financial statements.
1
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
(Amounts in thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | |
| | Three months ended June 30, | | Six months ended June 30, |
| ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| ||||
Revenue | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | |
Cost of services (exclusive of depreciation and amortization presented separately below) | |
| | |
| | |
| | |
| | |
Selling, general and administrative | |
| | |
| | |
| | |
| | |
Depreciation and amortization | |
| | |
| | |
| | |
| | |
Restructuring charges, net | | | | | | | | | | | | | |
Impairment losses | |
| | |
| | |
| | |
| | |
Total operating expenses | |
| | |
| | |
| | |
| | |
| | | | | | | | | | | | | |
Income from operations | |
| | |
| | |
| | |
| | |
| | | | | | | | | | | | | |
Other income (expense) | | | | | | | | | | | | | |
Interest income | |
| | |
| | |
| | |
| | |
Interest expense | |
| ( | |
| ( | |
| ( | |
| ( | |
Other income (expense), net | | | | | | ( | |
| | |
| | |
Total other income (expense) | |
| ( | |
| ( | |
| ( | |
| ( | |
| | | | | | | | | | | | | |
Income (loss) before income taxes | |
| ( | |
| | |
| ( | |
| | |
| | | | | | | | | | | | | |
Provision for income taxes | |
| ( | |
| ( | |
| ( | |
| ( | |
| | | | | | | | | | | | | |
Net income (loss) | |
| ( | |
| ( | |
| ( | |
| ( | |
| | | | | | | | | | | | | |
Net income attributable to noncontrolling interest | |
| ( | |
| ( | |
| ( | |
| ( | |
| | | | | | | | | | | | | |
Net income (loss) attributable to TTEC stockholders | | $ | ( | | $ | ( | | $ | ( | | $ | ( | |
| | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | | |
Net income (loss) | | $ | ( | | $ | ( | | $ | ( | | $ | ( | |
Foreign currency translation adjustments | |
| | |
| | |
| ( | |
| | |
Derivative valuation, gross | |
| | |
| | |
| ( | |
| | |
Other, net of tax | |
| | |
| | |
| | |
| | |
Total other comprehensive income (loss) | |
| | |
| | |
| ( | |
| | |
Total comprehensive income (loss) | |
| ( | |
| | |
| ( | |
| | |
| | | | | | | | | | | | | |
Less: Comprehensive income attributable to noncontrolling interest | |
| ( | |
| ( | |
| ( | |
| ( | |
| | | | | | | | | | | | | |
Comprehensive income (loss) attributable to TTEC stockholders | | $ | ( | | $ | | | $ | ( | | $ | | |
| | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | |
Basic | |
| | |
| | |
| | |
| | |
Diluted | | | | |
| | |
| | |
| | |
| | | | | | | | | | | | | |
Net income (loss) per share attributable to TTEC stockholders | | | | | | | | | | | | | |
Basic | | $ | ( | | $ | ( | | $ | ( | | $ | ( | |
Diluted | | $ | ( | | $ | ( | | $ | ( | | $ | ( | |
The accompanying notes are an integral part of these consolidated financial statements.
2
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity
(Amounts in thousands)
(Unaudited)
Three months ended June 30, 2025 and 2026
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Stockholders’ Equity of the Company |
| |||||||||||||||||||||
| | | | | | | | | | | | | Accumulated | | | | | | | | | |
| |
| | | | | | | | | | | | | Other | | | | | | | | | |
| |
| | Common Stock | | Treasury | | Additional | | Comprehensive | | Retained | | Noncontrolling | | | |
| ||||||||
| | Shares | | Amount | | Stock | | Paid-in Capital | | Income (Loss) | | Earnings | | interest | | Total Equity |
| |||||||
Balance as of March 31, 2025 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
Net income |
| — | |
| — | |
| — | |
| — | |
| — | | | ( | |
| | |
| ( | |
Payments distributed to noncontrolling interest |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( | |
Foreign currency translation adjustments |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| | |
| | |
Derivatives valuation, net of tax |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| | |
Vesting of restricted stock units |
| | |
| | |
| — | |
| ( | |
| — | |
| — | |
| — | |
| ( | |
Equity-based compensation expense |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| — | |
| | |
Other, net of tax |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| | |
Balance as of June 30, 2025 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Stockholders’ Equity of the Company |
| |||||||||||||||||||||
| | | | | | | | | | | | | Accumulated | | | | | | | | | |
| |
| | | | | | | | | | | | | Other | | | | | | | | | |
| |
| | Common Stock | | Treasury | | Additional | | Comprehensive | | Retained | | Noncontrolling | | | |
| ||||||||
| | Shares | | Amount | | Stock | | Paid-in Capital | | Income (Loss) | | Earnings | | interest | | Total Equity |
| |||||||
Balance as of March 31, 2026 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
Net (loss) income |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| | |
| ( | |
Payments distributed to noncontrolling interest |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( | |
Foreign currency translation adjustments |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| ( | |
| | |
Derivatives valuation, net of tax |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| | |
Vesting of restricted stock units |
| | |
| | |
| — | |
| ( | |
| — | |
| — | |
| — | |
| ( | |
Equity-based compensation expense |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| — | |
| | |
Other, net of tax |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| | |
Balance as of June 30, 2026 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
Six months ended June 30, 2025 and 2026
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Stockholders’ Equity of the Company |
| |||||||||||||||||||||
| | | | | | | | | | | | | Accumulated | | | | | | | | | |
| |
| | | | | | | | | | | | | Other | | | | | | | | | |
| |
| | Common Stock | | Treasury | | Additional | | Comprehensive | | Retained | | Noncontrolling | | | |
| ||||||||
| | Shares | | Amount | | Stock | | Paid-in Capital | | Income (Loss) | | Earnings | | interest | | Total Equity |
| |||||||
Balance as of December 31, 2024 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
Net (loss) income |
| — | |
| — | |
| — | |
| — | |
| — | | | ( | |
| | |
| ( | |
Payments distributed to noncontrolling interest |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( | |
Foreign currency translation adjustments |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| | |
| | |
Derivatives valuation, net of tax |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| | |
Vesting of restricted stock units |
| | |
| | |
| — | |
| ( | |
| — | |
| — | |
| — | |
| ( | |
Equity-based compensation expense |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| — | |
| | |
Other, net of tax |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| | |
Balance as of June 30, 2025 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Stockholders’ Equity of the Company |
| |||||||||||||||||||||
| | | | | | | | | | | | | Accumulated | | | | | | | | | |
| |
| | | | | | | | | | | | | Other | | | | | | | | | |
| |
| | Common Stock | | Treasury | | Additional | | Comprehensive | | Retained | | Noncontrolling | | | |
| ||||||||
| | Shares | | Amount | | Stock | | Paid-in Capital | | Income (Loss) | | Earnings | | interest | | Total Equity |
| |||||||
Balance as of December 31, 2025 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
Net (loss) income |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| | |
| ( | |
Payments distributed to noncontrolling interest |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( | |
Foreign currency translation adjustments |
| — | |
| — | |
| — | |
| — | |
| ( | |
| — | |
| ( | |
| ( | |
Derivatives valuation, net of tax |
| — | |
| — | |
| — | |
| — | |
| ( | |
| — | |
| — | |
| ( | |
Vesting of restricted stock units |
| | |
| | |
| — | |
| ( | |
| — | |
| — | |
| — | |
| ( | |
Equity-based compensation expense |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| — | |
| | |
Other, net of tax |
| — | |
| — | |
| — | |
| — | |
| | |
| — | |
| — | |
| | |
Balance as of June 30, 2026 |
| | | $ | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | | | $ | | |
The accompanying notes are an integral part of these consolidated financial statements.
3
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
| | | | | | | |
| | Six Months Ended June 30, | | ||||
| | 2026 | | 2025 | | ||
Cash flows from operating activities | | | | | | | |
Net income (loss) | | $ | ( | | $ | ( | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization | |
| | |
| | |
Amortization of contract acquisition costs | |
| | |
| | |
Amortization of debt issuance costs | |
| | |
| | |
Provision for credit losses | |
| | |
| | |
Loss on disposal of assets | | | | | | | |
Loss on dissolution of subsidiary | | | | | | — | |
Impairment losses | |
| | |
| | |
Deferred income taxes | |
| | |
| | |
Excess tax benefit from equity-based awards | |
| | |
| | |
Equity-based compensation expense | |
| | |
| | |
Loss (gain) on foreign currency derivatives | |
| | |
| ( | |
Changes in assets and liabilities, net of acquisitions: | | | | | | | |
Accounts receivable | |
| | |
| | |
Prepaids and other current assets | |
| | |
| | |
Operating lease assets | | | | | | | |
Other noncurrent assets | | | ( | | | ( | |
Accrued employee compensation and benefits | | | ( | | | ( | |
Accounts payable and other current liabilities | | | ( | | | | |
Deferred revenue and customer advances | | | | | | | |
Operating lease liabilities | |
| ( | |
| ( | |
Other noncurrent liabilities | |
| ( | |
| ( | |
Net cash provided by operating activities | |
| | |
| | |
| | | | | | | |
Cash flows from investing activities | | | | | | | |
Proceeds from sale of long-lived assets | |
| | |
| | |
Purchases of property, plant and equipment | |
| ( | |
| ( | |
Net cash used in investing activities | |
| ( | |
| ( | |
| | | | | | | |
Cash flows from financing activities | | | | | | | |
Proceeds from/(repayments of) line of credit, net | |
| ( | |
| ( | |
Proceeds from other debt | |
| | |
| — | |
Payments on other debt | |
| ( | |
| ( | |
Dividends paid to shareholders | | | | | | — | |
Payments to noncontrolling interest | |
| ( | |
| ( | |
Tax payments related to issuance of restricted stock units | | | ( | | | ( | |
Payments of debt issuance costs | |
| ( | |
| ( | |
Net cash (used in)/provided by financing activities | |
| ( | |
| ( | |
| | | | | | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | |
| | |
| ( | |
| | | | | | | |
Increase/(decrease) in cash, cash equivalents and restricted cash | |
| | |
| ( | |
Cash, cash equivalents and restricted cash, beginning of period | |
| | |
| | |
Cash, cash equivalents and restricted cash, end of period | | $ | | | $ | | |
| | | | | | | |
Supplemental disclosures | | | | | | | |
Cash paid for interest | | $ | | | $ | | |
Cash paid for income taxes | | $ | | | $ | | |
Non-cash investing and financing activities | | | | | | | |
Acquisition of long-lived assets through finance leases | | $ | | | $ | | |
Acquisition of equipment through increase in accounts payable, net | | $ | | | $ | ( | |
The accompanying notes are an integral part of these consolidated financial statements.
4
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(1)OVERVIEW AND BASIS OF PRESENTATION
Summary of Business
Founded in
The Company operates and reports its financial results of operations through
| • | TTEC Digital is one of the largest CX technology and service providers and is focused on the intersection of Contact Center as a Service (“CCaaS”), Customer Relationship Management (“CRM”), and Artificial Intelligence (AI) and Analytics. A professional services organization comprised of software engineers, systems architects, data scientists and CX strategists, this segment creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise-based CX technologies including Amazon Web Services (“AWS”), Cisco, Genesys, Google, and Microsoft; and creates proprietary IP to support industry specific and custom client needs. TTEC Digital serves clients across enterprise and small and medium-sized business segments and has a dedicated unit with government technology certifications serving the public sector. |
| • | TTEC Engage provides the digital first, AI-enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale across the world. Tailored to meet industry-specific business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, fraud mitigation and back-office solutions. The segment’s digital first delivery model covers the entire solution lifecycle including associate recruitment, onboarding, training, delivery, workforce management and quality assurance. |
TTEC pursues its CX market leadership through strategic collaboration across TTEC Digital and TTEC Engage. Together, TTEC’s ability to deliver comprehensive and transformational customer experience solutions to its clients is a marketplace differentiation, including integrated AI-enabled, CX technology and service solutions, go-to-market strategies, and innovative offerings.
During the second quarter of 2026, the TTEC global operating platform delivered onshore, nearshore, and offshore services in
Basis of Presentation
The Consolidated Financial Statements are comprised of the accounts of TTEC, its wholly owned subsidiaries and its
5
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
The unaudited Consolidated Financial Statements do not include all of the disclosures required by accounting principles generally accepted in the U.S. (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary to state fairly the consolidated financial position of the Company and the consolidated results of operations and comprehensive income (loss) and the consolidated cash flows of the Company. All such adjustments are of a normal, recurring nature. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
These unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Use of Estimates
The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to derivatives and hedging activities, income taxes including the valuation allowance for deferred tax assets, litigation reserves, restructuring reserves, allowance for credit losses, contingent consideration, and valuation of goodwill, long-lived and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions.
Concentration of Credit Risk
The Company is exposed to credit risk in the normal course of business, primarily related to accounts receivable and derivative instruments. Historically, the losses related to credit risk have been immaterial due to the Company’s focus on managing its collection processes to reduce its credit risk. The Company regularly monitors its credit risk to mitigate the possibility of current and future exposures resulting in a loss. The Company evaluates the creditworthiness of its clients prior to entering into an agreement to provide services and as necessary through the life of the client relationship. The Company does not believe it is exposed to more than a nominal amount of credit risk in its derivative hedging activities, as the Company diversifies its activities across multiple investment-grade financial institutions.
Liquidity
As discussed in Note 9, the Company’s Amended and Restated Credit Agreement, originally dated June 3, 2013 (the “Credit Agreement”), includes a number of financial covenants and operating restrictions, failure to comply with which could result in a default under the Credit Agreement. On November 5, 2025, the Company entered into a Tenth Amendment (the “Tenth Amendment”) to the Credit Agreement, which extends the maturity date to November 23, 2027 and modifies certain other material terms of the Credit Facility, including the size of the facility, pricing, and certain covenants.
6
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
On July 15, 2026, the Company obtained a waiver from its lenders for its net leverage ratio covenant for the period ended June 30, 2026, and subsequent to June 30, 2026, entered into an Eleventh Amendment (the “Eleventh Amendment”) to the Credit Agreement that, among other things, modified certain material terms, including sizing, pricing, and the net leverage ratio and interest coverage ratio covenants of the Credit Facility on a going-forward basis. Specifically, the net leverage ratio covenant modifications are effective from September 30, 2026 through September 30, 2027. During this period, the maximum permitted net leverage ratio increased to
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, “Financial Instruments – Credit Losses” which relates to measurement of credit losses for accounts receivable and contract assets and provides a practical expedient. When developing reasonable and supportable forecasts as part of estimating credit losses, all entities may elect a practical expedient that assumes current conditions as of the balance sheet do not change for the remaining life of the asset. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company adopted the standard September 30, 2025. The adoption did not impact the Company’s consolidated balance sheet or income statement.
Other Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses” in response to longstanding requests from investors for more information about an entity’s expenses, specifically categories of expenses such as (purchases of inventory, employee compensation, depreciation, and amortization, and depletion). The ASU is effective for fiscal years beginning after December 15, 2026, with retrospective application permitted. The Company is still assessing the impact of this ASU, however, the Company expects the guidance to impact disclosures only and not have a material effect on its financial position or results of operations.
In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other Internal Use Software” which was issued to modernize the accounting for software costs and removes all references to prescriptive and sequential software development stages. The ASU is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those fiscal reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the potential impact of this ASU on the Company’s policy for capitalization of development costs for software intended for internal use, including timing of adoption. The Company does not expect it to have a material effect on its consolidated income statements, balance sheets, or statements of cash flows.
7
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(2)SEGMENT INFORMATION
The Company has
TTEC Digital and the CX Technology Services Industry
TTEC Digital clients are seeking solutions in many areas including cost optimization, CX technology modernization, including migration to a more agile cloud-based ecosystem, improved CX talent and expertise, and other practical solutions to further enable CX applications, such as the design, implementation and pragmatic delivery of AI capabilities. TTEC Digital takes a technology agnostic approach to these challenges and focuses on designing and delivering solutions to each client’s specific business needs at the intersection of contact center, CRM, and AI and Analytics. TTEC Digital supports the majority of CX platform and solution requirements through its strategic partnerships with the leading CX software vendors including Genesys, Microsoft, Cisco, AWS, Google, Salesforce, ServiceNow, and Nice among others.
TTEC Digital’s solutions are built to respond to market needs for both enterprise and small and medium-sized business clients. AI design and delivery capabilities are woven across all five pillars of the Company offerings.
| • | Professional Services: System design, configuration and integration |
| • | Managed Services: Cloud application and premise support |
| • | CX Consulting: Transformation strategy and design |
| • | CX Data and Analytics: Data science, engineering, and visualization |
| • | IP & Software: Custom software engineering through TTEC Digital’s IP and Software division |
The segment has a three-pronged go to market strategy that includes growing existing client relationships, partner channel motions and general market development.
TTEC Engage and the CX Business Process Outsourcing Services Industry
The TTEC Engage segment’s solutions are built to respond to the following market needs for clients.
| • | Customer Support |
| • | Tech Support |
| • | Revenue Generation and Growth Services |
| • | Fraud Mitigation |
| • | AI Operations, including data annotation and labeling |
| • | Back-office Support |
TTEC Engage goes to market through a vertical approach with customized solutions that include industry-specific talent, technology, certifications, and capabilities. For example, in the Banking, Financial Services and Insurance vertical, the Company supports several lines of business with customized offerings for retail banking, online banking, credit card, property and casualty and loans. In healthcare, the segment supports care, technical support, revenue generation and back-office capabilities to meet the needs of payer, provider, clinical and pharma clients.
The Company allocates to each segment its portion of corporate operating expenses following the Company’s standard accounting policies.
8
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
The following tables present certain financial data by segment (in thousands). The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Three Months Ended June 30, 2026
| | | | | | | | | | | |
| | | TTEC Engage | | TTEC Digital | | Total | | |||
Revenue | | | $ | | | $ | | | $ | | |
Cost of services (exclusive of depreciation and amortization presented separately below) (1) | | | | | | | | | | | |
Selling, general and administrative | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | |
Other segment items(2) | | | | | | | | | | | |
Income from operations | | | | | | | | | | | |
Interest income | | | | | | | | | | | |
Interest expense | | | | | | | | | | ( | |
Other income (expense), net | | | | | | | | | | | |
Income before income taxes | | | | | | | | | | ( | |
Three Months Ended June 30, 2025
| | | | | | | | | | | |
| | | TTEC Engage | | TTEC Digital | | Total | | |||
Revenue | | | $ | | | $ | | | $ | | |
Cost of services (exclusive of depreciation and amortization presented separately below) (1) | | | | | | | | | | | |
Selling, general and administrative | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | |
Other segment items(2) | | | | | | | | | | | |
Income from operations | | | | | | | | | | | |
Interest income | | | | | | | | | | | |
Interest expense | | | | | | | | | | ( | |
Other income (expense), net | | | | | | | | | | ( | |
Income before income taxes | | | | | | | | | | | |
Six Months Ended June 30, 2026
| | | | | | | | | | | |
| | | TTEC Engage | | TTEC Digital | | Total | | |||
Revenue | | | $ | | | $ | | | $ | | |
Cost of services (exclusive of depreciation and amortization presented separately below) (1) | | | | | | | | | | | |
Selling, general and administrative | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | |
Other segment items(2) | | | | | | | | | | | |
Income from operations | | | | | | | | | | | |
Interest income | | | | | | | | | | | |
Interest expense | | | | | | | | | | ( | |
Other income (expense), net | | | | | | | | | | | |
Income before income taxes | | | | | | | | | | ( | |
9
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Six Months Ended June 30, 2025
| | | | | | | | | | | |
| | | TTEC Engage | | TTEC Digital | | Total | | |||
Revenue | | | $ | | | $ | | | $ | | |
Cost of services (exclusive of depreciation and amortization presented separately below) (1) | | | | | | | | | | | |
Selling, general and administrative | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | |
Other segment items(2) | | | | | | | | | | | |
Income from operations | | | | | | | | | | | |
Interest income | | | | | | | | | | | |
Interest expense | | | | | | | | | | ( | |
Other income (expense), net | | | | | | | | | | | |
Income before income taxes | | | | | | | | | | | |
(1) Cost of services primarily includes employee related and technology costs.
(2) Other segment items include impairment losses and restructuring charges.
| | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| ||||
Capital Expenditures | | | | | | | | | | | | | |
TTEC Digital | | $ | |
| $ | |
| $ | |
| $ | | |
TTEC Engage | |
| | |
| | |
| | |
| | |
Total | | $ | |
| $ | |
| $ | |
| $ | | |
| | | | | | | | |
| | | June 30, 2026 | | December 31, 2025 | | ||
Total Assets | | | | | | | | |
TTEC Digital | | | $ | |
| $ | | |
TTEC Engage | | |
| | |
| | |
Total | | | $ | |
| $ | | |
| | | | | | | | |
The following table presents revenue based upon the geographic location where the services are provided (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
Revenue | | | | | | | | | | | | | |
United States / Canada | | $ | | | $ | |
| $ | | | $ | | |
Philippines / Asia Pacific / India | |
| | |
| | |
| | |
| | |
Europe / Middle East / Africa | |
| | |
| | |
| | |
| | |
Latin America | |
| | |
| | |
| | |
| | |
Total | | $ | |
| $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
10
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(3)SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS
The Company had
To limit the Company’s credit risk with its clients, management performs periodic credit evaluations, maintains allowances for credit losses and may require pre-payment for services from certain clients whose financial stability or payment practices raise concern. Based on currently available information, management does not believe significant credit risk existed as of June 30, 2026 beyond what was already recognized.
Activity in the Company’s allowance for credit losses consists of the following (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| ||||
Balance, beginning of period | | $ | | | $ | | | $ | | | $ | | |
Provision for credit losses | |
| ( | |
| | |
| | | | | |
Uncollectible receivables written-off | |
| ( | |
| ( | |
| ( | | | ( | |
Balance, end of period | | $ | | | $ | | | $ | | | $ | | |
(4)GOODWILL
Goodwill consisted of the following (in thousands):
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | Effect of | | | |
| |
| | December 31, | | Acquisitions / | | | | | Foreign | | June 30, |
| ||||
| | 2025 | | Adjustments | | Impairments | | Currency | | 2026 |
| |||||
| | | | | | | | | | | | | | | | |
TTEC Digital | | $ | | | $ | — | | $ | — | | $ | | | $ | | |
TTEC Engage | |
| | |
| — | | | — | | | ( | |
| | |
Total | | $ | | | $ | — | | $ | — | | $ | ( | | $ | | |
The Company performs an annual goodwill impairment assessment on December 1st, or more frequently, if indicators of impairment exist. The Company also monitors its reporting units for any triggering events and performs qualitative assessments of impairment indicators.
As of December 1, 2025, the date of the annual impairment testing, the Company concluded that for the Engage and Digital Professional Services reporting units, resulting fair values were in excess of the respective carrying values and the goodwill for those reporting units was not impaired. The resulting fair value of the Digital Recurring reporting unit decreased below its carrying value, which resulted in recording a $
11
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
During the Company’s annual impairment testing as of December 1, 2025, the Company identified one reporting unit, Digital Professional Services, as at risk for future impairment. The carrying value of Digital Professional Services was $
As an international outsourcing agent, TTEC’s revenue and cash flows are susceptible to global economic conditions and client business volumes. In performing the Step 1 evaluation, the reporting unit’s current backlog and pipeline of customer business were considered, as well as inflation rates, gross domestic product rates, historical revenue growth and profitability, and state of the CX industry. The estimate of fair value was based on generally accepted valuation techniques and information available at the date of the assessment, which incorporated management’s assumptions about expected revenues, future cash flows and available market information for comparable companies.
Outside of the Company’s annual impairment testing process, the Company monitors its reporting units for any triggering events while also performing qualitative assessments of impairment indicators. During the second quarter of 2026, the Company concluded there were no triggering events and completed its qualitative assessment of impairment indicators, which included, among other things, an assessment of changes in macroeconomic conditions, comparison of the actual results to those forecasted in the most recent annual impairment test and performing sensitivity analysis on key assumptions.
(5)DERIVATIVES
TTEC’s Financial Risk Management Committee monitors cash flow and fair value foreign exchange exposures and interest rate exposures on a worldwide basis, assesses the potential economics and earnings impact from foreign exchange and/or interest rate fluctuations, and deploys risk management policies and solutions to reduce volatility related to TTEC’s exposure to foreign exchange rate changes and interest rate changes.
The Company enters into foreign exchange forward and option contracts to reduce its exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Upon proper qualification, these contracts are designated as cash flow hedges. The Company formally documents at the inception of the hedge all relationships between hedging instruments and hedged items as well as its risk management objective and strategy for undertaking various hedging activities.
The Company also enters into fair value derivative contracts that hedge against foreign currency exchange gains and losses primarily associated with short-term payables and receivables. These swap contracts are not designated as hedges under ASC Topic 815, Derivatives and Hedging.
It is the Company’s policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets considers, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company’s creditworthiness. As of June 30, 2026, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults.
All derivative financial instruments are reported at gross fair value and recorded in Prepaids and other current assets, Other long-term assets, Other current liabilities, and Other long-term liabilities in the accompanying Consolidated Balance Sheets as applicable for each period end.
12
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Fair Value of Derivative Instruments
The fair value and location of derivatives in the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 were as follows (in thousands):
| | | | | | | |
| | June 30, 2026 |
| ||||
| | Designated | Not Designated |
| |||
| | as Hedging | as Hedging | | |||
Designation: | | Instruments | Instruments |
| |||
| | Foreign | | Foreign |
| ||
Derivative contract type: | | Exchange | | Exchange |
| ||
Derivative classification: | | Cash Flow | | Fair Value | | ||
| | | | | | | |
Prepaids and other current assets | | $ | | | $ | | |
Other long-term assets | |
| | |
| | |
Other current liabilities | |
| ( | |
| ( | |
Other long-term liabilities | |
| | |
| | |
Total fair value of derivatives, net | | $ | ( | | $ | ( | |
| | | | | | | |
| | December 31, 2025 |
| ||||
| | Designated | Not Designated |
| |||
| | as Hedging | as Hedging | | |||
Designation: | | Instruments | Instruments |
| |||
| | Foreign | | Foreign |
| ||
Derivative contract type: | | Exchange | | Exchange |
| ||
Derivative classification: | | Cash Flow | | Fair Value | | ||
| | | | | | | |
Prepaids and other current assets | | $ | | | $ | | |
Other long-term assets | |
| | |
| | |
Other current liabilities | |
| ( | |
| — | |
Other long-term liabilities | |
| ( | |
| | |
Total fair value of derivatives, net | | $ | | | $ | | |
Cash Flow Hedges
Changes in fair value of derivative instruments designated as cash flow hedges are recorded in Accumulated other comprehensive income (loss), a component of Stockholders’ Equity, to the extent they are deemed effective. Ineffectiveness is measured based on the change in fair value of the forward contracts and the fair value of the hypothetical derivatives with terms that match the critical terms of the risk being hedged. Based on the criteria established by current accounting standards, the Company’s cash flow hedge contracts are deemed to be highly effective. Any realized gains or losses resulting from the foreign currency cash flow hedges are recognized together with the hedged transaction within Revenue.
13
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
The Company’s foreign exchange cash flow hedging instruments as of June 30, 2026 and December 31, 2025 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts.
| | | | | | | | | | | | |
| | Local | | | | | | | | | |
|
| | Currency | | U.S. Dollar | | | % Maturing | | | Contracts |
| |
| | Notional | | Notional | | | in the next | | | Maturing |
| |
As of June 30, 2026 | | Amount | | Amount | | | 12 months | | | Through |
| |
Philippine Peso |
| | | $ | | (1) | | | % | | March 2027 | |
Mexican Peso |
| | |
| | | | | % | | February 2027 | |
Colombian Peso |
| | |
| | | | | % | | August 2026 | |
| | | | $ | | | | | | | | |
| | | | | | | | | | | | |
| | Local | | | | | | | | | | |
| | Currency | | U.S. Dollar | | | % Maturing | | | Contracts | | |
| | Notional | | Notional | | | in the next | | | Maturing | | |
As of December 31, 2025 | | Amount | | Amount | | | 12 months | | | Through | | |
Philippine Peso |
| | | $ | | (1) | | | % | | March 2027 | |
Mexican Peso |
| | | | | | | | % | | December 2026 | |
Colombian Peso |
| | |
| | | | | % | | August 2026 | |
| | | | $ | | | | | | | | |
| | | | | | | | | | | | |
| (1) | Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2026 and December 31, 2025. |
The amounts and location of gains and losses on Cash Flow Hedges within the Consolidated Statements of Comprehensive Income (Loss) for the six months ended June 30, 2026 and 2025 were as follows (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
Foreign Exchange Cash Flow Hedges, effective: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Amount of gain (loss) recognized in Other comprehensive income (loss) (1) | | $ | | | $ | | | $ | ( | | $ | | |
| | | | | | | | | | | | | |
Amount and location of gain (loss) reclassified from Accumulated OCI to: | | | | | | | | | | | | | |
Revenue | | $ | ( | | $ | | | $ | ( | | $ | | |
Provision for income taxes | | | | | | ( | | | | | | ( | |
Net income (loss) | | $ | ( | | $ | | | $ | ( | | $ | | |
(1) As a result of the valuation allowance recorded in Q2 2024 against the Company’s U.S. Deferred Tax Assets, there is no tax impact recognized in Other comprehensive income (loss) for unrealized foreign exchange cash flow hedge gains or losses.
The activity related to the change in net unrealized gains and losses on the cash flow hedges included in “Accumulated other comprehensive income (loss)” in the Company’s unaudited consolidated statements of stockholders’ equity is presented in Note 11.
Undesignated Derivatives
Changes in the fair value of derivative instruments not designated as hedges are recognized in earnings in Other income (expense), net on a before tax basis and are offset by gains and losses on the related hedged items.
14
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
The Company’s volume of foreign exchange fair value derivative contracts as of June 30, 2026 and December 31, 2025 are summarized as follows (in thousands):
| | | | | | | | | | | | |
| | Local | | | | | | | | | |
|
| | Currency | | U.S. Dollar | | | | | | |
| |
| | Notional | | Notional | | | | | | |
| |
As of June 30, 2026 (2) | | Amount | | Amount | | | | | | |
| |
Australian Dollar |
| | | $ | | | | | | | | |
Euro |
| | | | | | | | | | | |
Canadian Dollar | | | | | | | | | | | | |
British Pound | | | | | | | | | | | | |
Mexican Peso |
| | | | | | | | | | | |
Polish Zloty | | | | | | | | | | | | |
| | | | $ | | | | | | | | |
(2) All undesignated derivatives are short-term and matured in July 2026.
| | | | | | | | | | | | |
| | Local | | | | | | | | | | |
| | Currency | | U.S. Dollar | | | | | | | | |
| | Notional | | Notional |
| | | | | | | |
As of December 31, 2025 (3) | | Amount | | Amount |
| | | | | | | |
Australian Dollar |
| | | $ | | | | | | | | |
Euro | | | | | | | | | | | | |
British Pound | | | | | | | | | | | | |
Mexican Peso |
| | | | | | | | | | | |
New Zealand Dollar |
| | |
| | | | | | | | |
Polish Zloty |
| | | | | | | | | | | |
| | | | $ | | | | | | | | |
(3) All undesignated derivatives are short-term and matured in January 2026.
The amounts and location of before tax gains and losses on Undesignated Derivatives within the Consolidated Statements of Comprehensive Income (Loss) for the six months ended June 30, 2026 and 2025, respectively, were as follows (in thousands):
| | | | | | | |
| | Three Months Ended June 30, |
| ||||
| | 2026 | | 2025 |
| ||
Designation: | | Not Designated as Hedging Instruments | | ||||
Derivative contract type: |
| Foreign Exchange | | ||||
Derivative classification: |
| Fair Value | | ||||
| | | | | | | |
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income (Loss): | | | | | | | |
Other income (expense), net |
| $ | |
| $ | | |
15
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
| | | | | | | |
| | Six Months Ended June 30, | | ||||
| | 2026 | | 2025 | | ||
Designation: |
| Not Designated as Hedging Instruments | | ||||
Derivative contract type: |
| Foreign Exchange | | ||||
Derivative classification: |
| Fair Value | | ||||
| | | | | | | |
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income (Loss): | | | | | | | |
Other income (expense), net |
| $ | ( |
| $ | | |
The related cash flow impacts of all the derivative activities are reflected as cash flows from operating activities.
(6)FAIR VALUE
The authoritative guidance for fair value measurements establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The following presents information as of June 30, 2026 and December 31, 2025 for the Company’s assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.
Accounts Receivable and Payable - The amounts recorded in the accompanying balance sheets approximate fair value because of their short-term nature.
Investments – The Company measures investments, including cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include market observable inputs, and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary.
Debt - The Company’s debt consists primarily of the Company’s Credit Facility, which permits floating-rate borrowings based upon the current Prime Rate or SOFR plus a credit spread as determined by the Company’s leverage ratio calculation (in each case as defined in the Credit Agreement discussed in Note 9). As of June 30, 2026 and December 31, 2025, the Company had $
16
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Derivatives - Net derivative assets (liabilities) are measured at fair value on a recurring basis. The portfolio is valued using models based on market observable inputs, including both forward and spot foreign exchange rates, interest rates, implied volatility, and counterparty credit risk, including the ability of each party to execute its obligations under the contract. As of June 30, 2026, credit risk did not materially change the fair value of the Company’s derivative contracts.
The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of June 30, 2026 and December 31, 2025 (in thousands):
As of June 30, 2026
| | | | | | | | | | | | | |
| | Fair Value Measurements Using | | | |
| |||||||
| | Quoted Prices in | | Significant | | | | | | |
| ||
| | Active Markets | | Other | | Significant | | | |
| |||
| | for Identical | | Observable | | Unobservable | | | |
| |||
| | Assets | | Inputs | | Inputs | | | |
| |||
| | (Level 1) | | (Level 2) | | (Level 3) | | At Fair Value |
| ||||
Cash flow hedges | | $ | | $ | ( | | $ | | $ | ( | | ||
Undesignated derivatives | |
| |
| ( | |
| |
| ( | | ||
Total net derivative asset (liability) | | $ | | $ | ( | | $ | | $ | ( | | ||
As of December 31, 2025
| | | | | | | | | | | | | |
| | Fair Value Measurements Using | | | |
| |||||||
| | Quoted Prices in | | Significant | | | | | | |
| ||
| | Active Markets | | Other | | Significant | | | |
| |||
| | for Identical | | Observable | | Unobservable | | | |
| |||
| | Assets | | Inputs | | Inputs | | | |
| |||
| | (Level 1) | | (Level 2) | | (Level 3) | | At Fair Value |
| ||||
Cash flow hedges | | $ | | $ | | | $ | | $ | | | ||
Undesignated derivatives | |
| |
| | |
| |
| | | ||
Total net derivative asset (liability) | | $ | | | $ | | | $ | | | $ | | |
The following is a summary of the Company’s fair value measurements as of June 30, 2026 and December 31, 2025 (in thousands):
As of June 30, 2026
| | | | | | | | | | |
| | Fair Value Measurements Using |
| |||||||
| | Quoted Prices in | | | | | Significant |
| ||
| | Active Markets for | | Significant Other | | Unobservable |
| |||
| | Identical Assets | | Observable Inputs | | Inputs |
| |||
| | (Level 1) | | (Level 2) | | (Level 3) |
| |||
Assets | | | | | | | | | | |
Derivative instruments, net | | $ | | $ | | | $ | | ||
Deferred compensation plan asset | | | | | | | | | | |
Total assets | | $ | | | $ | | | $ | | |
| | | | | | | | | | |
Liabilities | | | | | | | | | | |
Derivative instruments, net | | $ | | $ | ( | | $ | | ||
Total liabilities | | $ | | | $ | ( | | $ | | |
17
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
As of December 31, 2025
| | | | | | | | | | |
| | Fair Value Measurements Using |
| |||||||
| | Quoted Prices in | | | | | Significant |
| ||
| | Active Markets for | | Significant Other | | Unobservable |
| |||
| | Identical Assets | | Observable Inputs | | Inputs |
| |||
| | (Level 1) | | (Level 2) | | (Level 3) |
| |||
Assets | | | | | | | | | | |
Derivative instruments, net | | $ | — | | $ | | | $ | — | |
Deferred compensation plan asset | | | | | | — | | | — | |
Total assets | | $ | | | $ | | | $ | — | |
| | | | | | | | | | |
Liabilities | | | | | | | | | | |
Derivative instruments, net | | $ | — | | $ | — | | $ | — | |
Total liabilities | | $ | | | $ | | | $ | | |
Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan for certain eligible employees. The deferred compensation asset represents the combined fair value of all the funds based on quoted values and market observable inputs.
(7)IMPAIRMENT OF ASSETS
The Company evaluated the recoverability of its leasehold improvement assets at certain customer engagement centers, building and land assets, as well as all internally developed software projects. An asset group is considered to be impaired when the anticipated undiscounted future cash flows of its asset group is estimated to be less than the asset group’s carrying value.
During the three and six months ended June 30, 2026 and 2025, the Company recognized impairment losses related to leasehold improvements assets, right of use lease assets, capitalized software and certain computer equipment within each reportable segment as follows (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| ||||
TTEC Digital | | $ | |
| $ | |
| $ | |
| $ | | |
TTEC Engage | |
| | |
| | |
| | |
| | |
Total | | $ | |
| $ | |
| $ | |
| $ | | |
18
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(8)INCOME TAXES
The Company accounts for income taxes in accordance with the accounting literature for income taxes, which requires recognition of deferred tax assets and liabilities for the expected future income tax consequences of transactions that have been included in the Consolidated Financial Statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. Quarterly, the Company assesses the likelihood that its net deferred tax assets will be recovered. Based on the weight of all available evidence, both positive and negative, the Company records a valuation allowance against deferred tax assets when it is more-likely-than-not that a future tax benefit will not be realized. The Company’s selection of an accounting policy with respect to both the Net CFC Tested Income (“NCTI”) and base erosion and anti-abuse tax (“BEAT”) rules is to compute the related taxes in the period the entity becomes subject to either NCTI or BEAT.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, extending key provisions of the 2017 Tax Cuts and Jobs Act. The Company has evaluated the provisions of the new law and determined there was no material impact on the Company’s consolidated financial statements.
At the end of each interim period, the Company is required to estimate its annual effective tax rate for the fiscal year and to use that rate to provide for income taxes for the current year-to-date reporting period. The Company’s 2026 estimated annual effective tax rate of
The Organization for Economic Co-operation and Development (OECD), supported by 140 of their member countries, have agreed to implement a minimum
19
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(9)COMMITMENTS AND CONTINGENCIES
Credit Facility
On July 15, 2026, the Company secured a waiver on its net leverage ratio covenant for the period ended June 30, 2026. On August 7, 2026, the Company entered into an Eleventh Amendment to the Credit Agreement that modified certain material terms including sizing, pricing, and certain covenants of the Credit Facility on a going-forward basis. The Eleventh Amendment is discussed in more detail in Note 16.
On
Failure to comply with the financial covenants and operating restrictions set forth in the Credit Agreement could result in a default. As of the issuance of these unaudited Consolidated Financial Statements, the Company believes it has sufficient cash on hand, positive working capital, and availability to access additional cash under the Credit Facility to meet its business operating requirements and make its capital expenditures and to continue to comply with the financial covenants under the Credit Agreement for the next 12 months. The Company has the ability to reduce discretionary spending, if necessary, to maintain compliance with the financial covenants under the Credit Agreement. In the event the Company does not remain in compliance with such financial covenants, it may be required to negotiate additional amendments to, or waivers of, the terms of Credit Facility, refinance its debt, or raise additional capital.
As of June 30, 2026 and December 31, 2025, the Company had borrowings of $
Letters of Credit
As of June 30, 2026, outstanding letters of credit under the Credit Facility totaled $
Guarantees
Indebtedness under the Credit Agreement is guaranteed by the Company’s present and future subsidiaries.
20
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Legal Proceedings
From time to time, the Company has been involved in legal actions, both as plaintiff and defendant, which arise in the ordinary course of business. The Company accrues for exposures associated with such legal actions to the extent that losses are deemed both probable and reasonably estimable. To the extent specific reserves have not been made for certain legal proceedings, their ultimate outcome, and consequently, an estimate of possible loss, if any, cannot reasonably be determined at this time.
Based on currently available information and advice received from counsel, the Company believes that the disposition or ultimate resolution of any current legal proceedings, except as otherwise specifically reserved for in its financial statements, will not have a material adverse effect on the Company’s financial position, cash flows or results of operations. In the event of unexpected further developments, however, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s financial position, cash flows, or results of operations.
(10)DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS
Revenue recognized for the six months ended June 30, 2026 from amounts included in deferred revenue as of December 31, 2025 was $
Remaining performance obligations (“RPO”) represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. The Company’s RPO excludes performance obligations from on-demand arrangements as there are no minimum purchase commitments associated with these arrangements, and certain time and materials contracts that are billed in arrears.
As of June 30, 2026, the Company’s RPO was $
21
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(11)ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents changes in the accumulated balance for each component of Other comprehensive income (loss), including current period other comprehensive income (loss) and reclassifications out of Accumulated other comprehensive income (loss) (in thousands):
| | | | | | | | | | | | | |
| | Foreign | | | | | | | | | |
| |
| | Currency | | Derivative | | | | | | |
| ||
| | Translation | | Valuation, Net | | Other, Net | | | |
| |||
| | Adjustment | | of Tax | | of Tax | | Totals |
| ||||
| | | | | | | | | | | | | |
Accumulated other comprehensive income (loss) at December 31, 2024 | | $ | ( |
| $ | ( |
| $ | ( |
| $ | ( | |
| | | | | | | | | | | | | |
Other comprehensive income (loss) before reclassifications | |
| | |
| | |
| | |
| | |
Amounts reclassified from accumulated other comprehensive income (loss) | |
| | |
| ( | |
| | |
| ( | |
Net current period other comprehensive income (loss) | |
| | |
| | |
| | |
| | |
| | | | | | | | | | | | | |
Accumulated other comprehensive income (loss) at June 30, 2025 | | $ | ( |
| $ | ( |
| $ | ( |
| $ | ( | |
| | | | | | | | | | | | | |
Accumulated other comprehensive income (loss) at December 31, 2025 | | $ | ( |
| $ | ( |
| $ | ( |
| $ | ( | |
| | | | | | | | | | | | | |
Other comprehensive income (loss) before reclassifications | |
| ( | | | ( | | | | |
| ( | |
Amounts reclassified from accumulated other comprehensive income (loss) | |
| ( | | | | | | | |
| | |
Net current period other comprehensive income (loss) | |
| ( | |
| ( | |
| | |
| ( | |
| | | | | | | | | | | | | |
Accumulated other comprehensive income (loss) at June 30, 2026 | | $ | ( |
| $ | ( |
| $ | ( |
| $ | ( | |
The following table presents the classification and amount of the reclassifications from Accumulated other comprehensive income (loss) to the Statement of Comprehensive Income (Loss) (in thousands):
| | | | | | | | | |
| | | | | | | | Statement of | |
| | For the Three Months Ended June 30, | | Comprehensive Income | | ||||
| | 2026 | | 2025 | | (Loss) Classification | | ||
| | | | | | | | | |
Derivative valuation | | | | | | | | | |
Gain on foreign currency forward exchange contracts | | $ | ( | | $ | |
| Revenue | |
Tax effect | |
| | |
| ( |
| Provision for income taxes | |
| | $ | ( | | $ | |
| Net income (loss) | |
| | | | | | | | | |
Other | | | | | | | | | |
Actuarial loss on defined benefit plan | | $ | ( | | $ | ( |
| Cost of services | |
Tax effect | |
| | |
| |
| Provision for income taxes | |
| | $ | ( | | $ | ( |
| Net income (loss) | |
22
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
| | | | | | | | | |
| | | | | | | | Statement of |
|
| | For the Six Months Ended June 30, | | Comprehensive Income |
| ||||
| | 2026 | | 2025 | | (Loss) Classification |
| ||
| | | | | | | | | |
Derivative valuation | | | | | | | | | |
Gain on foreign currency forward exchange contracts | | $ | ( | | $ | |
| Revenue | |
Tax effect | |
| | |
| ( |
| Provision for income taxes | |
| | $ | ( | | $ | |
| Net income (loss) | |
| | | | | | | | | |
Other | | | | | | | | | |
Actuarial loss on defined benefit plan | | $ | ( | | $ | ( |
| Cost of services | |
Tax effect | |
| | |
| |
| Provision for income taxes | |
| | $ | ( | | $ | ( |
| Net income (loss) | |
(12)WEIGHTED AVERAGE SHARE COUNTS
The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands):
| | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| | | | | | | | |
Shares used in basic earnings per share calculation | | |
| |
| |
| |
Effect of dilutive securities: | | | | | | | | |
Restricted stock units | | |
| |
| |
| |
Performance-based restricted stock units | | |
| |
| |
| |
Total effects of dilutive securities | | |
| |
| |
| |
Shares used in dilutive earnings per share calculation | | |
| |
| |
| |
For the three months ended June 30, 2026 and 2025, there were
(13)EQUITY-BASED COMPENSATION PLANS
All equity-based awards to employees are recognized in the Consolidated Statements of Comprehensive Income (Loss) at the fair value of the award on the grant date.
The following tables present the total equity-based compensation expense for the three and six months ended June 30, 2026 and 2025 (in thousands):
| | | | | | | |
| | Three Months Ended June 30, |
| ||||
| | 2026 | | 2025 |
| ||
| | | | | | | |
Equity-based compensation expense recognized in Cost of services | | $ | | | $ | | |
Equity-based compensation expense recognized in Selling, general and administrative | | | | | | | |
Total equity-based compensation expense | | $ | | | $ | | |
23
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
| | | | | | | |
| | Six Months Ended June 30, |
| ||||
| | 2026 | | 2025 |
| ||
| | | | | | | |
Equity-based compensation expense recognized in Cost of services | | $ | | | $ | | |
Equity-based compensation expense recognized in Selling, general and administrative | | | | | | | |
Total equity-based compensation expense | | $ | | | $ | | |
Restricted Stock Unit Grants
During the six months ended June 30, 2026 and 2025, the Company granted
Performance Based Restricted Stock Unit Grants
During 2022, the Company granted awards of two different performance-based RSU (“PRSU”) programs that are subject to service and performance vesting conditions: ordinary course annual PRSUs and one-time stretch financial goals PRSUs.
During 2023, the Company awarded PRSUs to senior executives that were subject to service and performance vesting conditions. If defined minimum targets were met, the annual value of the PRSUs issued would have been between
During the fourth quarter of 2024, the Company awarded PRSUs to senior executives that are subject to service and performance vesting conditions. If defined minimum targets are met, the annual value of the PRSUs will be between
(14)NON-QUALIFIED DEFERRED COMPENSATION PLAN
The Company maintains a non-qualified deferred compensation plan for executive officers and other eligible employees that permits such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. The plan allows for deferral of up to
24
Table of Contents
TTEC HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
claims of general creditors. Participants may choose among alternative earnings rates for the amounts they defer, which are primarily based on investment options within the 401K Plan. Amounts contributed and deferred under the Plan are credited or charged with the performance of investment options offered under the plan as elected by the participants. The Company manages the risk of changes in the fair value of the liability for deferred compensation by electing to match its liability under the plan with investment vehicles that offset a portion of its exposure including a Company owned life insurance policy held in a rabbi trust. In the fourth quarter of 2024 the Company suspended additional deferrals into the Plan until further notice.
(15)RELATED PARTY TRANSACTIONS
The Company entered into an agreement under which Avion, LLC (“Avion”) and Airmax LLC (“Airmax”) provide certain aviation flight services as requested by the Company. Such services include the use of an aircraft and flight crew. Kenneth D. Tuchman, Chairman and Chief Executive Officer of the Company, has an indirect
In 2025, the Company entered into service agreements with Mantucket Capital Management Corporation (“Mantucket”) to provide staff augmentation and cloud migration services. Kenneth D. Tuchman, Chairman and Chief Executive Officer of the Company, beneficially owns
(16)SUBSEQUENT EVENTS
The Company’s actual net leverage ratio of
25
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q 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. Forward-looking statements include, but are not limited to, statements regarding our operations, expected financial condition, results of operation, effective tax rate, cash flow, leverage, liquidity, business strategy, competitive position, demand for our services in international operations, acquisition opportunities and impact of acquisitions, capital allocation and dividends, growth opportunities, spending, capital expenditures and investments, competition and market forecasts, industry trends, our human capital resources, 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 report, 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. Unless otherwise indicated or except where the context otherwise requires, the terms “TTEC,” “the Company,” “we,” “us” and “our” and other similar terms in this report refer to TTEC Holdings, Inc. and its subsidiaries.
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 Part II Item 1A. Risk Factors of this report and Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.
Important factors that could cause our actual results to differ materially from those indicated in the forward looking statements include, among others, risks related to our strategic 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 such as the effective adoption of artificial intelligence into our solutions, our leverage and debt service obligations related risks, risks specific to the terms of our credit facility, risks related to the financial and operating restrictions built into our credit agreement, risks related to the changes in client service demands and the level of effort and capacity forecasting, risks related to our cost containment efforts, risks specific to outsourcing trends and the prices that clients are willing to pay to outsource services that we provide, uncertainties tied to goodwill, assets and strategic investment impairments, risks inherent in M&A activity, revenue risks specific to client concentration in our TTEC Engage business segment, risks specific to our technology partners in our TTEC Digital business segment and to the impact on our business due to TTEC Digital clients’ transition to public cloud and SaaS solutions, risks specific to our public sector business, risks specific to our clients seeking to transfer to us risks related to cybersecurity, data privacy and emerging technologies that we cannot control or mitigate, risks specific to our remote delivery model, risks specific to our ability to recruit and retail labor at the right price point to meet changing business demands, risks specific to our operational controls and employee misconduct, risks arising from our long sales cycles and lead time to revenue, risks tied to our ability to meet our clients’ geographic footprint expansions, operational risks that arise from events outside of our control, risks specific to cost and availability of labor, telecommunication services and energy that cannot be passed on to clients, risks tied to contracting terms typical in our industry that lead to revenue volatility and impact profitability, risks related to disruption to our information technology systems, cybersecurity events and unauthorized data access, reliance on communication and utility services provided by third parties, risks specific to use of AI technologies in our client offerings and in how we run our business, and our growing reliance on third parties for data, cloud and SaaS services, risks specific to uncertainties and inconsistencies in privacy, data protection and AI oversight laws, the high cost of compliance with such laws and business impacts if we fail to comply, high cost and reputational damage of wage and hour, ADA, and ERISA class action lawsuits, risks specific to the uncertainties in AI regulatory environments, risks specific to IP protection and infringement, risks inherent in the changes in income tax rates, ability to timely secure and maintain licenses needed to support certain regulated lines of business, and risks specific to the interpretations of transfer pricing arrangements, risks specific to our operations outside of the U.S., risks inherent in our geographic concentration in certain markets where weather and regulatory environment may represent significant challenges, risks inherent in our capital structure, our controlling shareholder risk, risks related to the
26
Table of Contents
price and trading volumes of our common stock being affected by factors that we cannot fully impact or control, risks inherent in our dividend and stock repurchase policies, risks specific to being a Texas company and provisions in our charter documents that may discourage, delay or prevent change in control events potentially depressing the price of our common stock, risks arising from the Company’s completed redomestication from Delaware to Texas by conversion, effective May 28, 2026, as disclosed in the Company’s Current Report on Form 8-K filed with the SEC on May 27, 2026 and in our proxy statement for our 2026 annual meeting of stockholders, filed with the SEC on April 10, 2026, and the fact that our chairman and chief executive officer has control over matters requiring shareholder action potentially impacting our stock price and making it less attractive to investors.
Our forward-looking statements speak only as of the date that this report is filed with the SEC. 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. You should, however, consult any subsequent disclosures we make in our filings with the SEC on Forms 10-Q or 8-K.
27
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Executive Summary
Founded in 1982, TTEC is a global customer experience (“CX”) technology and services outsourcing partner for marquee and disruptive brands and public sector clients. The Company designs, builds, and operates AI-enabled customer experiences across live interaction channels and provides data-driven, AI-enabled digital solutions to help clients improve customer satisfaction and loyalty, increase customer revenue and profitability, and optimize overall cost to serve. As of June 30, 2026, TTEC served approximately 735 clients across targeted industry verticals including financial services, healthcare, public sector, communications, technology, media, entertainment, travel and hospitality, automotive and retail.
TTEC operates and reports its financial results of operations through two business segments:
| • | TTEC Digital is one of the largest CX technology and service providers and is focused on the intersection of Contact Center as a Service (“CCaaS”), Customer Relationship Management (“CRM”), and Artificial Intelligence (AI) and Analytics. A professional services organization comprised of software engineers, systems architects, data scientists and CX strategists, this segment creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise-based CX technologies including Amazon Web Services (“AWS”), Cisco, Genesys, Google, and Microsoft; and creates proprietary IP to support industry specific and custom client needs. TTEC Digital serves clients across enterprise and small and medium-sized business segments and has a dedicated unit with government technology certifications serving the public sector. |
| • | TTEC Engage provides the digital first, AI-enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale across the world. Tailored to meet industry-specific business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, fraud mitigation and back-office solutions. The segment’s digital first delivery model covers the entire solution lifecycle including associate recruitment, onboarding, training, delivery, workforce management and quality assurance. |
TTEC pursues its CX market leadership through strategic collaboration across TTEC Digital and TTEC Engage. Together, TTEC’s ability to deliver comprehensive and transformational customer experience solutions to its clients is a marketplace differentiation, including integrated AI-enabled, CX technology and service solutions, go-to-market strategies, and innovative offerings.
During 2026, the TTEC global operating platform delivered onshore, nearshore, and offshore services in 22 countries on six continents -- the United States, Australia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Egypt, Germany, Greece, India, Ireland, Malaysia, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Spain, Thailand, and the United Kingdom, with contributions from approximately 44,900 customer care associates, consultants, technologists, and CX professionals.
Our revenue for second quarter 2026 was $455.5 million, of which approximately $104.0 million, or 23%, was generated from our TTEC Digital segment and $351.5 million, or 77%, was generated from our TTEC Engage segment.
To advance our competitive position in a rapidly changing market and to provide our clients with modernized CX technology and service solutions, we continue to invest in innovation and service offerings for both mainstream and high-growth disruptive businesses, diversifying and strengthening our core customer care services with technology-enabled, outcomes-focused services, data analytics, insights, and consulting.
We also invest to broaden our CX product and service capabilities, increase our global client base and industry expertise, expand our geographic footprint to the needs of our global clientele, and further scale our integrated solutions within and between our TTEC Digital and TTEC Engage segments.
28
Table of Contents
Financial Highlights
In the second quarter of 2026, our revenue decreased $58.1 million, or 11.3%, to $455.5 million over the same period in 2025 including a decrease of $0.3 million, or 0.1%, due to foreign currency fluctuations. The decrease in revenue was comprised of $9.7 million, or 8.5%, decrease for TTEC Digital and a decrease of $48.4 million, or 12.1%, for TTEC Engage.
Our second quarter 2026 income (loss) from operations decreased $7.9 million to $11.0 million or 2.4% of revenue, compared to $18.9 million, or 3.7% of revenue in the second quarter of 2025. The TTEC Digital operating margin decreased 3.6% over the same period last year primarily due to lower margins in our recurring and professional services business. The TTEC Engage operating margin decreased 0.7% over the same period last year primarily due to a decline in revenue that exceeded the reduction in operating expenses.
Income (loss) from operations in the second quarter of 2026 and 2025 included $4.3 million and $1.9 million, respectively, of restructuring charges and asset impairments.
Our offshore customer experience centers spanning 13 countries serve clients based in the U.S. and in other countries with 22,000 workstations, representing 83% of our global delivery capability. Revenue for our TTEC Engage segment provided in these offshore locations represented 43% of our revenue for the second quarter of 2026, as compared to 37% of our revenue for the corresponding period in 2025.
Our seat utilization is defined as the total number of utilized workstations compared to the total number of available production workstations. As of June 30, 2026, the total production workstations for our TTEC Engage segment was 26,800 with an overall capacity utilization of 70% versus 71% in the prior year period. The decrease was primarily driven by reduced client forecasts, partially offset by targeted seat reductions in the United States and Philippines along with country exits in Honduras and Rwanda.
We plan to continue to selectively retain and grow capacity and expand into new offshore markets, while maintaining appropriate capacity onshore. As we grow our offshore delivery capabilities and our exposure to foreign currency fluctuation increases, we plan to continue to actively manage this risk via a multi-currency hedging program designed to minimize operating margin volatility.
Recent Developments
Change in the Principal Place of Business. In February 2025, the Company moved its principal place of business and principal executive offices to Austin, Texas. TTEC made the decision to relocate its principal place of business from Colorado to Austin, Texas after careful consideration of how it can best support its strategic goals, serve its global clients, and position itself for future success. Texas has been an important part of TTEC’s operations for decades, and this move provides the Company with additional access to a business-friendly environment, a strong economy, a skilled workforce, and a dynamic technology and innovation hub.
Redomestication to Texas. At the Company’s Annual Meeting of Stockholders held on May 21, 2026, (the “Annual Stockholders Meeting”), the stockholders approved the redomestication of the Company from Delaware to Texas by conversion (the “Redomestication”). The TTEC Board determined that the Redomestication was in the best interests of the Company and its stockholders. The Board’s decision to recommend that the Company’s stockholders vote to approve the Redomestication was the result of extensive deliberations and consideration, including evaluation by the Company’s fully independent Nominating and Governance Committee and discussions with management and legal counsel. The Company and its Board believe that the Redomestication is in the best interests of the Company and its stockholders because of the Company's strong operational nexus to the state of Texas and because the Company believes that the move reduces the potential for opportunistic and frivolous litigation and operational costs for the Company, while preserving and potentially even enhancing shareholder rights and providing operational flexibility.
29
Table of Contents
The Redomestication became effective on May 28, 2026 (the “effective Time”), at which time the Company converted from a corporation organized under the laws of the State of Delaware to a corporation organized under the laws of the State of Texas. In connection with the Redomestication, the Company’s stockholders are subject to the Texas Certificate of Formation and Texas Bylaws in place of the Company’s prior Delaware charter and Bylaws. Certain rights of the Company’s stockholders were changed as a result of the Redomestication, as more fully described in the Company’s Current Report on Form 8-K filed with the SEC on May 27, 2026 and in the Company’s definitive proxy statement on Schedule 14A for the Annual Stockholders Meeting filed with the SEC on April 10, 2026.
Exploration of Strategic Alternatives for TTEC Digital
On August 10, 2026, TTEC announced that its Board of Directors authorized management to evaluate potential strategic alternatives for its TTEC Digital business to best position it to realize its full growth potential and maximize shareholder value. While the Board is prepared to consider a range of alternatives, it will prioritize transactions that sustain and enhance the continued commercial collaboration and innovation between TTEC Engage and TTEC Digital.
PJT Partners is serving as an independent financial advisor to TTEC in connection with the review of strategic alternatives. The Board has not set a deadline or definitive timeline for the completion of this review, and the Company does not intend to disclose developments unless or until a definitive agreement is executed or the Board determines that further disclosure is appropriate or required. There can be no assurance that this process will result in any particular transaction or outcome.
Smaller Reporting Company Status
We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Although, as a smaller reporting company, we are eligible to provide scaled disclosures in our filings with the SEC, the Company elected not to avail itself of this relief in this Quarterly Report on Form 10-Q and will continue to provide the same level of disclosures as in its most recent fiscal periods. The Company may re-evaluate this decision at a later date.
Recently Issued Accounting Pronouncements
Refer to Part I, Item I. Financial Statements, Note 1 to the Consolidated Financial Statements for a discussion of recently adopted and issued accounting pronouncements.
Critical Accounting Policies and Estimates
Management’s Discussion and Analysis of our Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities. We regularly review our estimates and assumptions. These estimates and assumptions, which are based upon historical experience and on various other factors believed to be reasonable under the circumstances, form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Reported amounts and disclosures may have been different had management used different estimates and assumptions or if different conditions had occurred in the periods presented. For further information, please refer to the discussion of all critical accounting policies in Note 1 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
30
Table of Contents
Results of Operations
Three months ended June 30, 2026 compared to three months ended June 30, 2025
The tables included in the following sections are presented to facilitate an understanding of Management’s Discussion and Analysis of Financial Condition and Results of Operations and present certain information by segment for the three months ended June 30, 2026 and 2025 (amounts in thousands). All intercompany transactions between the reported segments for the periods presented have been eliminated.
TTEC Digital
| | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | | |
| | ||||
| | 2026 | | 2025 | | $ Change | | % Change |
| | |||
Revenue | | $ | 104,032 | | $ | 113,746 | | $ | (9,714) |
| (8.5) | % | |
Operating Income | |
| 6,704 | |
| 11,409 | |
| (4,705) |
| (41.2) | % | |
Operating Margin | |
| 6.4 | % |
| 10.0 | % | | | | | | |
The decrease in revenue for the TTEC Digital segment was driven by lower recurring revenue and a one-time asset sale in the prior year period.
The operating income decrease was primarily related to lower margins in our recurring and professional services business. Included in operating income was amortization expense related to acquired intangibles of $3.6 million and $3.7 million for the quarters ended June 30, 2026 and 2025, respectively.
TTEC Engage
| | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | | |
| | ||||
| | 2026 | | 2025 | | $ Change | | % Change |
| | |||
Revenue | | $ | 351,463 | | $ | 399,825 | | $ | (48,362) |
| (12.1) | % | |
Operating Income | |
| 4,305 | |
| 7,467 | |
| (3,162) |
| (42.3) | % | |
Operating Margin | |
| 1.2 | % |
| 1.9 | % | | | | | | |
The decrease in revenue for the TTEC Engage segment is primarily due to client attrition and the absence of revenue from a short-term contract that was completed during the prior year period.
TTEC Engage’s operating income decreased as a percentage of revenue was primarily related to lower revenue, which exceeded the benefit of reduced operating expenses. Included in operating income was amortization expense related to acquired intangibles of $4.0 million and $4.1 million for the quarters ended June 30, 2026 and 2025, respectively.
Interest Income (Expense)
For the three months ended June 30, 2026 interest income decreased to $0.1 million from $3.2 million in the same period in 2025 due to lower interest income on an aged VAT receivable received during the prior year period. Interest expense decreased to $16.7 million during 2026 from $18.2 million during 2025 due to lower utilization and lower rates.
Other Income (Expense)
For the three months ended June 30, 2026 Other income (expense), net increased to income of $1.2 million from expense of $0.3 million during the prior year quarter.
Included in the three months ended June 30, 2026 was a $1.0 million gain due to changes in foreign currency rates.
Included in the three months ended June 30, 2025 was a $2.7 million gain related to a recovery of an aged VAT receivable.
31
Table of Contents
Income Taxes
The effective tax rate for the three months ended June 30, 2026 was 195.5%. This compares to an effective tax rate of 288.7% for the comparable period of 2025. The effective tax rate for the three months ended June 30, 2026 is primarily driven by the distribution of income between the U.S. and international tax jurisdictions, earnings in international jurisdictions currently under an income tax holiday, foreign currency gains and losses, and the impact of valuation allowances in the United States and several other jurisdictions.
Six months ended June 30, 2026 compared to six months ended June 30, 2025
The tables included in the following sections are presented to facilitate an understanding of Management’s Discussion and Analysis of Financial Condition and Results of Operations and present certain information by segment for the six months ended June 30, 2026 and 2025 (in thousands). All intercompany transactions between the reported segments for the periods presented have been eliminated.
TTEC Digital
| | | | | | | | | | | | | |
| | Six Months Ended June 30, | | | | | |
| | ||||
| | 2026 | | 2025 | | $ Change | | % Change |
| | |||
Revenue | | $ | 205,897 | | $ | 221,786 | | $ | (15,889) |
| (7.2) | % | |
Operating Income | |
| 8,063 | |
| 17,273 | |
| (9,210) |
| (53.3) | % | |
Operating Margin | |
| 3.9 | % |
| 7.8 | % | | | | | | |
The decrease in revenue for the TTEC Digital segment was driven by lower recurring revenue and one-time on-premise related revenue.
The operating income decrease is primarily attributable to lower margins in our recurring and professional services revenue. Included in operating income was amortization expense related to acquired intangibles of $7.3 million and $7.3 million for the six months ended June 30, 2026 and 2025, respectively.
TTEC Engage
| | | | | | | | | | | | | |
| | Six Months Ended June 30, | | | | | |
| | ||||
| | 2026 | | 2025 | | $ Change | | % Change |
| | |||
Revenue | | $ | 745,773 | | $ | 826,013 | | $ | (80,240) |
| (9.7) | % | |
Operating Income (loss) | |
| 21,441 | |
| 25,792 | |
| (4,351) |
| (16.9) | % | |
Operating Margin | |
| 2.9 | % |
| 3.1 | % | | | | | | |
The decrease in revenue for the TTEC Engage segment is primarily due to client attrition and the absence of revenue from a short-term contract that was completed during the prior year period.
The change in operating income (loss) was primarily related to lower revenue which exceeded the benefit of reduced operating expenses. Included in operating income was amortization expense related to acquired intangibles of $8.1 million and $8.1 million for the six months ended June 30, 2026 and 2025, respectively.
Interest Income (Expense)
For the six months ended June 30, 2026 interest income decreased to $0.5 million from $7.8 million in the same period in 2025 due to $7.3 million of interest income on an aged VAT receivable during the six months period ended June 30, 2025. Interest expense decreased to $33.7 million during 2026 from $38.0 million during 2025 due to lower utilization and lower rates.
Other Income (Expense)
For the six months ended June 30, 2026 Other income (expense), net decreased to net income of $1.8 million from net income of $3.3 million during the prior year period.
Included in the six months ended June 30, 2026 was a $1.3 million gain due to change in foreign currency rates.
Included in the six months ended June 30, 2025 was a $6.6 million gain related to a recovery of an aged VAT receivable.
32
Table of Contents
Income Taxes
The effective tax rate for the six months ended June 30, 2026 was 920.4%. This compared to an effective tax rate of 121.6% for the comparable period of 2025. The effective tax rate for the six months ended June 30, 2026 is primarily driven by the distribution of income between the U.S. and international tax jurisdictions, earnings in international jurisdictions currently under an income tax holiday, foreign currency gains and losses, and the impact of valuation allowances in the United States and several other jurisdictions.
Liquidity and Capital Resources
Our principal sources of liquidity are our cash generated from operations, our cash and cash equivalents, and borrowings under our Credit Facility. During the six months ended June 30, 2026, we generated operating cash flows of $78.9 million. We believe that our cash generated from operations, existing cash and cash equivalents, and available credit will be sufficient to meet expected operating and capital expenditure requirements for the next 12 months. However, if our access to capital is restricted or our borrowing costs increase, our operations and financial condition could be adversely impacted.
On August 7, 2026, we entered into the Eleventh Amendment to our Credit Agreement, which reduced our revolving credit facility commitment to $975.0 million, increased the SOFR credit margin from 3.00% to 3.25% through September 30, 2026, and from 6.00% to 6.25% thereafter, expanded the collateral and guarantee package (including certain assets of certain foreign subsidiaries and equity interests therein), and imposed additional restrictions on indebtedness, liens, investments, dispositions, acquisitions, and restricted payments. At the same time, the Eleventh Amendment eased certain of our financial covenants, increasing the maximum permitted net leverage ratio to up to 4.25 in fiscal 2026 and up to 4.00 in fiscal 2027 and reducing the minimum required interest coverage ratio to 2.00 in fiscal 2027, which we believe provides additional covenant compliance headroom necessary to operate the business.
The Company’s actual net leverage ratio of 3.85 as of June 30, 2026 exceeded the 3.75 maximum net leverage ratio then applicable to the quarter under the Tenth Amendment. To secure compliance with net leverage ratio for the quarter ended June 30, 2026, on July 15, 2026, prior to finalizing our financial statements for the quarter, we obtained a waiver, of the maximum net leverage ratio covenant for the quarter.
We are also in discussions with our lender group regarding a potential extension of the maturity of the Credit Facility beyond 2027. We believe these amended terms, together with the covenant relief described above, will support our liquidity and covenant compliance over the next twelve months.
We manage a centralized global treasury function in the United States with a focus on safeguarding and optimizing the use of our global cash and cash equivalents. Our cash is held in the U.S. in U.S. dollars, and outside of the U.S. in U.S. dollars and foreign currencies. We expect to use our cash to fund working capital, global operations, dividends, acquisitions, and other strategic activities. While there are no assurances, we believe our global cash is well protected given our cash management practices, banking partners and utilization of diversified bank deposit accounts and other high-quality investments.
We have global operations that expose us to foreign currency exchange rate fluctuations that may positively or negatively impact our liquidity. To mitigate these risks, we enter into foreign exchange forward and option contracts through our cash flow hedging program. Please refer to Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk, Foreign Currency Risk, for further discussion. We are also exposed to interest rate fluctuations associated with our variable rate debt.
The following discussion highlights our cash flow activities during the six months ended June 30, 2026 and 2025.
Cash and Cash Equivalents
We consider all liquid investments purchased within three months of their original maturity to be cash equivalents. Our cash and cash equivalents totaled $93.9 million and $82.9 million as of June 30, 2026 and December 31, 2025, respectively.
We reinvest our cash flows to grow our client base, expand our infrastructure, invest in research and development, make strategic acquisitions and to pay dividends.
33
Table of Contents
Cash Flows from Operating Activities
For the six months ended June 30, 2026 and 2025, net cash flows provided by operating activities was $78.9 million and $114.3 million, respectively. The decrease is primarily due to a $21.6 million decrease in net cash income from operations and a $13.8 million decrease in net working capital.
Cash Flows from Investing Activities
For the six months ended June 30, 2026 and 2025, net cash flows used in investing activities was $17.6 million and $12.4 million, respectively. The increase was primarily due to a $6.5 million increase in capital expenditures.
Cash Flows from Financing Activities
For the six months ended June 30, 2026 and 2025, net cash flows used in financing activities was $51.4 million and $98.9 million, respectively. The change in net cash flows from 2025 to 2026 was primarily due to a $42.5 million net change in the line of credit.
Free Cash Flow
Free cash flow (see “Presentation of Non-GAAP Measurements” below for the definition of free cash flow) decreased for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to a decrease in net working capital and cash from operations. Free cash flow was $59.8 million and $101.7 million for the six months ended June 30, 2026 and 2025, respectively.
Presentation of Non-GAAP Measurements
Free Cash Flow
Free cash flow is a non-GAAP liquidity measurement. We believe that free cash flow is useful to our investors because it measures, during a given period, the amount of cash generated that is available for debt obligations and investments other than purchases of property, plant and equipment. Free cash flow is not a measure determined by GAAP and should not be considered a substitute for “income from operations,” “net income,” “net cash provided by operating activities,” or any other measure determined in accordance with GAAP. We believe this non-GAAP liquidity measure is useful, in addition to the most directly comparable GAAP measure of “net cash provided by operating activities,” because free cash flow includes investments in operational assets. Free cash flow does not represent residual cash available for discretionary expenditures, since it includes cash required for debt service. Free cash flow also includes cash that may be necessary for acquisitions, investments and other needs that may arise.
The following table reconciles net cash provided by operating activities to free cash flow for our consolidated results (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | |||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
Net cash provided by operating activities | | $ | 51,341 | | $ | 92,709 | | $ | 78,876 | | $ | 114,301 | |
Less: Purchases of property, plant and equipment | |
| 12,640 | |
| 7,181 | |
| 19,040 | |
| 12,587 | |
Free cash flow | | $ | 38,701 | | $ | 85,528 | | $ | 59,836 | | $ | 101,714 | |
Obligations and Future Capital Requirements
There were no material changes to the Company’s contractual obligations and future capital requirements outside the normal course of business from the date of our 2025 Form 10-K filing on February 26, 2026 through the filing of this report.
Future Capital Requirements
We expect total capital expenditures in 2026 to be between 1.9% and 2.1% of revenue. Approximately 60% of these expected capital expenditures are to support growth in our business and 40% relate to the maintenance for existing assets. The anticipated level of 2026 capital expenditures are primarily driven by facility refreshes and maintenance, site optimizations, IT network modernization and PC refreshes, digital product development and ongoing site expansions/new sites but not at the same level as the prior year.
34
Table of Contents
The amount of capital required over the next 12 months will depend on our levels of investment in infrastructure necessary to maintain, upgrade or replace existing assets. Our working capital and capital expenditure requirements could also increase materially in the event of acquisitions or joint ventures, among other factors. These factors could require that we raise additional capital through future debt or equity financing. We can provide no assurance that we will be able to raise additional capital upon commercially reasonable terms acceptable to us.
Client Concentration
During the six months ended June 30, 2026 and 2025, one of our clients represented more than 10% of our total revenue. Our five largest clients, collectively, accounted for 34.7% and 32.2% of our consolidated revenue for the three months ended June 30, 2026 and 2025, respectively, and 34.0% and 31.3% of our consolidated revenue for the six months ended June 30, 2026 and 2025, respectively. We have had long-term relationships with our top five TTEC Engage clients, ranging from 6 to 26 years, with all of these clients having completed multiple contract renewals with us. The relative contribution of any single client to consolidated earnings is not always proportional to the relative revenue contribution on a consolidated basis and varies greatly based upon specific contract terms. In addition, clients may adjust business volumes served by us based on their business requirements. We believe the risk of this concentration is mitigated, in part, by the long-term contracts we have with our largest clients. Although certain client contracts may be terminated for convenience by either party, we believe this risk is mitigated, in part, by the service level disruptions and transition/migration costs that would arise for our clients if they terminated our contract for convenience.
Some of the contracts with our five largest clients expire between 2026 and 2029, but many of our largest clients have multiple contracts with us with different expiration dates for different lines of work. We have historically renewed most of our contracts with our largest clients, but there can be no assurance that future contracts will be renewed or, if renewed, will be on terms as favorable as the existing contracts.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of loss that may impact our consolidated financial position, consolidated results of operations, or consolidated cash flows due to adverse changes in financial and commodity market prices and rates. Market risk also includes credit and non-performance risk by counterparties to our various financial instruments. We are exposed to market risk due to changes in interest rates and foreign currency exchange rates (as measured against the U.S. dollar), as well as credit risk associated with potential non-performance of our counterparty banks. These exposures are directly related to our normal operating and funding activities. We enter into derivative instruments to manage and reduce the impact of currency exchange rate changes, primarily between the U.S. dollar/Philippine peso, the U.S. dollar/Mexican peso, and the Australian dollar/Philippine peso. To mitigate against credit and non-performance risk, it is our policy to only enter into derivative contracts and other financial instruments with investment grade counterparty financial institutions and, correspondingly, our derivative valuations reflect the creditworthiness of our counterparties. As of the date of this report, we have not experienced, nor do we anticipate, any issues related to derivative counterparty defaults.
Interest Rate Risk
The interest rate on our Credit Agreement is variable based upon the Prime Rate and SOFR (in each case as defined in the Credit Agreement) and, therefore, is affected by changes in market interest rates. As of June 30, 2026, we had $855.0 million of outstanding borrowings under the Credit Agreement. Based upon average outstanding borrowings during the three months ended June 30, 2026, interest accrued at a rate of approximately 6.9% per annum. If the Prime Rate or SOFR increased by 100 basis points, there would be an annualized $1.0 million of additional interest expense per $100.0 million of outstanding borrowing under the Credit Agreement.
35
Table of Contents
Foreign Currency Risk
Our subsidiaries in the Philippines, Mexico, India, Bulgaria, Colombia, South Africa, Egypt and Poland use the local currency as their functional currency for paying labor and other operating costs. Conversely, revenue for these foreign subsidiaries is derived principally from client contracts that are invoiced and collected in U.S. dollars or other foreign currencies. As a result, we may experience foreign currency gains or losses, which may positively or negatively affect our results of operations attributed to these subsidiaries. For the six months ended June 30, 2026 and 2025, revenue associated with this foreign exchange risk was 28% and 23% of our consolidated revenue, respectively.
In order to mitigate the risk of these non-functional foreign currencies weakening against the functional currencies of the servicing subsidiaries, which thereby decreases the economic benefit of performing work in these countries, we may hedge a portion, though not 100%, of the projected foreign currency exposure related to client programs served from these foreign countries through our cash flow hedging program. While our hedging strategy can protect us from adverse changes in foreign currency rates in the short term, an overall weakening of the non-functional foreign currencies would adversely impact margins in the segments of the servicing subsidiary over the long term.
Cash Flow Hedging Program
To reduce our exposure to foreign currency exchange rate fluctuations associated with forecasted revenue in non-functional currencies, we purchase forward and/or option contracts to acquire the functional currency of the foreign subsidiary at a fixed exchange rate at specific dates in the future. We have designated and accounted for these derivative instruments as cash flow hedges for forecasted revenue in non-functional currencies.
While we have implemented certain strategies to mitigate risks related to the impact of fluctuations in currency exchange rates, we cannot ensure that we will not recognize gains or losses from international transactions, as this is part of transacting business in an international environment. Not every exposure is or can be hedged and, where hedges are put in place based on expected foreign exchange exposure, they are based on forecasts for which actual results may differ from the original estimate. Failure to successfully hedge or anticipate currency risks properly could adversely affect our consolidated operating results.
Our cash flow hedging instruments as of June 30, 2026 and December 31, 2025 are summarized as follows (in thousands). All hedging instruments are forward contracts, except as noted.
| | | | | | | | | | | | |
| | Local | | | | | | | | | |
|
| | Currency | | U.S. Dollar | | | % Maturing | | | Contracts |
| |
| | Notional | | Notional | | | in the next | | | Maturing |
| |
As of June 30, 2026 | | Amount | | Amount | | | 12 months | | | Through |
| |
Philippine Peso |
| 2,546,000 | | $ | 43,123 | (1) | | 100.0 | % | | March 2027 | |
Mexican Peso |
| 221,000 | |
| 11,412 | | | 100.0 | % | | February 2027 | |
Colombian Peso |
| 2,000,000 | |
| 477 | | | 100.0 | % | | August 2026 | |
| | | | $ | 55,012 | | | | | | | |
| | | | | | | | | | | | |
| | Local | | | |
| | | | | | |
| | Currency | | U.S. Dollar |
| | % Maturing | | | Contracts | | |
| | Notional | | Notional |
| | in the next | | | Maturing | | |
As of December 31, 2025 | | Amount | | Amount |
| | 12 months | | | Through | | |
Philippine Peso |
| 4,025,000 | | $ | 69,458 | (1) | | 97.0 | % | | March 2027 | |
Mexican Peso |
| 314,000 | |
| 15,618 | | | 100.0 | % | | December 2026 | |
Colombian Peso |
| 8,000,000 | |
| 1,931 | | | 100.0 | % | | August 2026 | |
| | | | $ | 87,007 | | | | | | | |
| (1) | Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2026 and December 31, 2025. |
36
Table of Contents
The fair value of our cash flow hedges as of June 30, 2026 was assets/(liabilities) (in thousands):
| | | | | | | |
| | | | | Maturing in the | | |
| | June 30, 2026 | | Next 12 Months |
| ||
Philippine Peso | | $ | (1,728) | | $ | (1,728) | |
Mexican Peso | |
| 1,114 | |
| 1,114 | |
Colombian Peso | |
| 104 | |
| 104 | |
| | $ | (510) | | $ | (510) | |
Our cash flow hedges are valued using models based on market observable inputs, including both forward and spot foreign exchange rates, implied volatility, and counterparty credit risk. The decrease in fair value from December 31, 2025 reflects changes in the currency translation between the U.S. dollar and Mexican peso and U.S. dollar and Philippine pesos.
We recorded net (losses)/gains of $(0.7) million and $0.5 million for settled cash flow hedge contracts and the related premiums for the six months ended June 30, 2026 and 2025, respectively. These (losses)/gains were reflected in Revenue in the accompanying Consolidated Statements of Comprehensive Income (Loss). If the exchange rates between our various currency pairs were to increase or decrease by 10% from current period-end levels, we would incur a material gain or loss on the contracts. However, any gain or loss would be mitigated by corresponding increases or decreases in our underlying exposures.
Other than the transactions hedged as discussed above and in Part I, Item 1. Financial Statements, Note 5 to the Consolidated Financial Statements, the majority of the transactions of our U.S. and foreign operations are denominated in their respective local currency. However, transactions are denominated in other currencies from time-to-time. We do not currently engage in hedging activities related to these types of foreign currency risks because we believe them to be insignificant as we endeavor to settle these accounts on a timely basis. For the six months ended June 30, 2026 and 2025, approximately 19% and 17%, respectively, of revenue was derived from contracts denominated in currencies other than the U.S. dollar. Our results from operations and revenue could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies.
Fair Value of Debt and Equity Securities
We did not have any material investments in marketable debt or equity securities as of June 30, 2026 or December 31, 2025.
ITEM 4. CONTROLS AND PROCEDURES
This report includes the certifications of our Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”) required by Rule 13a-14 of the Securities Exchange Act of 1934 (the “Exchange Act”). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.
Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
We carried out an evaluation under the supervision and with the participation of management, including the CEO and CFO, of the effectiveness of our disclosure controls and procedures, as of June 30, 2026, the end of the period covered by this Form 10-Q. Based on this evaluation, our CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level.
37
Table of Contents
Inherent Limitations of Internal Controls
Our management, including the CEO and CFO, believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of internal controls are met. Further, the design of internal controls must consider the benefits of controls relative to their costs. Inherent limitations within internal controls include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of controls. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. While the objective of the design of any system of controls is to provide reasonable assurance of the effectiveness of controls, such design is also based in part upon certain assumptions about the likelihood of future events, and such assumptions, while reasonable, may not take into account all potential future conditions. Thus, even effective internal control over financial reporting can only provide reasonable assurance of achieving their objectives. Therefore, because of the inherent limitations in cost effective internal controls, misstatements due to error or fraud may occur and may not be prevented or detected.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth under the caption “Legal Proceedings” in Part I, Item 1. Financial Statements, Note 9 to the Consolidated Financial Statements of this Form 10-Q is hereby incorporated by reference.
ITEM 1A. RISK FACTORS
There were no material changes to the Risk Factors described in Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 5. OTHER INFORMATION
John Abou Appointment as Chief Executive Officer of TTEC Engage. Effective August 5, 2026, the Company appointed John Abou, as Chief Executive Officer of TTEC Engage business segment. Mr. Abou previously served as the President of this business segment. As a result of this appointment, Mr. Abou continues to be an executive officer of the Company. Information about Mr. Abou and his past business experience is set forth in the definitive Proxy Statement on Schedule 14A filed by the Company with the SEC on April 10, 2026. In connection with his appointment, on August 5, 2026, TTEC Services Corporation, the wholly subsidiary of the Company and the main operating company for TTEC Engage business segment entered into an amendment to Mr. Abou’s Employment Agreement, dated as of July 17, 2024, (the “Amendment”).
38
Table of Contents
Pursuant to the Amendment Mr. Abou’s base salary increased from $600,000 to $625,000; his annual variable incentive plan target opportunity was set at up to 100% of base salary beginning with the 2026 performance year, with a guaranteed 2027 variable incentive payment (payable in 2028) equal to the greater of 50% of target ($312,500) or the amount actually earned based on performance. The Amendment also provides for a long-term incentive award consisting of 300,000 restricted stock units (“RSUs) vesting in two equal installments on the 12- and 18-month anniversaries of the grant date, and 426,000 performance-based restricted stock units (“PRSUs) eligible to vest based on TTEC Engage’s adjusted EBITDA performance through fiscal year 2028. If the Company experiences a change in control event before December 31, 2028, the PRSU portion of the award would convert to RSUs as if TTEC Engage performed at target for fiscal year 2028 with a vesting schedule to be aligned with the RSU portion of this long-term incentive award. The Amendment also modifies Mr. Abou’s severance entitlement to 18 months of base salary in case of a termination without cause or for good reason, and to two times base salary upon a qualifying termination in connection with a change in control event. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.
Christopher Brown Appointment as President of TTEC Digital. As previously reported in the Company’s Current Report on Form 8-K filed with the SEC on March 23, 2026, the Company announced the appointment of Christopher J. Brown as President of TTEC Digital. As a result of this appointment, Mr. Brown became an executive officer of the Company. Information about Mr. Brown and his past business experience is set forth in the definitive Proxy Statement on Schedule 14A filed by the Company with the SEC on April 10, 2026. In connection with Mr. Brown’s appointment, on August 5, 2026, TTEC Digital LLC, the wholly owned subsidiary of the Company, and the main operating company of TTEC Digital business segment entered into an executive employment agreement with Mr. Brown effective the date of his appointment (“Brown Employment Agreement”). Pursuant to the terms of the Brown Employment Agreement, his base salary was set at $500,000; his annual variable incentive plan target opportunity and his long-term incentive program (“LTIP”) opportunity was set at up to 100% of base salary. The Brown Employment Agreement also sets Mr. Brown’s severance entitlement to 18 months of base salary in case of a termination without cause or for good reason, and two times base salary upon a qualifying termination in connection with a change in control event. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the employment agreement, which is filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q or a subsequent filing.
Executive Retention Program. On July 24, 2026, the Compensation Committee of the Board approved a one-time senior executive retention bonus program (the “Retention Program”) to incentivize continuity of leadership among the Chief Executive Officer’s direct reports through one or more anticipated transformational transactions in 2026–2027, including potential mergers and acquisitions, financing transactions, restructurings, or asset divestitures. All of the Chief Executive Officer’s direct reports participate in the Retention Program. Awards are structured as cash and/or cash and RSUs, vesting in two equal tranches 12 and 18 months after grant, subject to continued employment, with prorated payment upon a qualifying involuntary termination. The receipt of the awards is contingent on the participants’ continuing employment with the Company as of payment/vesting dates, provided however that the awards are subject to proration, if the participants’ employment with the Company is terminated for any reason, except cause, before the payment/vesting dates.
The Company’s participating named executive officers were granted the following awards: effective July 24, 2026, Kenneth R. Wagers, III, Chief Financial Officer, was granted 100,000 RSUs (grant date fair value of $210,000) and a $350,000 cash award, for a total value of $560,000, with the cash award payable 50% in July 2027 and 50% in January 2028, and the RSUs vesting on July 24, 2027 and January 24, 2028; Christopher J. Brown, President of TTEC Digital, was granted 75,000 RSUs (grant date fair value of $157,500) and a $300,000 cash award, for a total value of $457,500, on the same schedule as Mr. Wagers; and John Abou, Chief Executive Officer of TTEC Engage, was granted a cash award of $625,000, payable 50% in March, 2027 and the remaining 50% in April 2027. See Exhibits 10.3 and 10.4.
During the three months ended June 30, 2026,
39
Table of Contents
ITEM 6. EXHIBITS
| | | | | | | | |
Exhibit | | | | Incorporated Herein by Reference | ||||
No. | | Exhibit Description | | Form | | Exhibit | | Filing Date |
| | | | | | | | |
3.1 | | Certificate of Formation of TTEC Holdings, Inc., a Texas corporation, dated May 22, 2026 | | 8-K | | 3.1 | | 5/27/2026 |
| | | | | | | | |
3.2 | | Bylaws of TTEC Holdings, Inc., a Texas corporation | | 8-K | | 3.2 | | 5/27/2026 |
| | | | | | | | |
4.1* | | Description of Securities of TTEC Holdings, Inc. registered pursuant to Section 12 of the Securities Act of 1934 | | | | | | |
| | | | | | | | |
10.1* | | Amendment to Executive Employment Agreement on July 17, 2024, executed to be effective August 5, 2026, by and between John P. Abou and TTEC Services Corporation | | | | | | |
| | | | | | | | |
10.2* | | Executive Employment Agreement executed on August 7, 2026 to be effective as of the date of appointment on March 17, 2026, by and between Christopher J. Brown and TTEC Digital LLC | | | | | | |
| | | | | | | | |
10.3* | | Form of Retention Award Agreement pursuant to the 2026 Executive Retention Program, used for Kenneth R. Wagers, III, Christopher J. Brown, and other participating senior executives, effective July 24, 2026, executed on various dates between August 4, 2026 and August 7, 2026 | | | | | | |
| | | | | | | | |
10.4* | | Retention Award Agreement, effective July 24, 2026, executed on August 7, 2026, by and between John P. Abou and TTEC Services Corporation, pursuant to the 2026 Executive Retention Program | | | | | | |
| | | | | | | | |
10.99* | | Eleventh Amendment to Amended and Restated Credit Agreement and Restated Security Agreement for a senior secured revolving credit facility with a syndicate of lenders led by Wells Fargo Bank, National Association, as agent, swing line and fronting lender | | | | | | |
| | | | | | | | |
31.1* | | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | | | | |
| | | | | | | | |
31.2* | | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) | | | | | | |
| | | | | | | | |
32.1* | | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) | | | | | | |
| | | | | | | | |
32.2* | | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) | | | | | | |
| | | | | | | | |
101.INS | | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | | | | | | |
| | | | | | | | |
101.SCH | | Inline XBRL Taxonomy Extension Schema | | | | | | |
| | | | | | | | |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase | | | | | | |
| | | | | | | | |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase | | | | | | |
| | | | | | | | |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase | | | | | | |
| | | | | | | | |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase | | | | | | |
| | | | | | | | |
104 | | The cover page from TTEC Holdings, Inc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL (included in Exhibit 101) | | | | | | |
| | | | | | | | |
| | | | | | | | |
| * | Filed or furnished herewith. | | | | | | |
40
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | |
| | TTEC HOLDINGS, INC. | |
| | (Registrant) | |
| | | |
Date: August 10, 2026 | By: | /s/ Kenneth D. Tuchman | |
| | Kenneth D. Tuchman | |
| | Chairman and Chief Executive Officer | |
| | | |
Date: August 10, 2026 | By: | /s/ Kenneth R. Wagers, III | |
| | Kenneth R. Wagers, III | |
| | Chief Financial Officer | |
41