TELUS International (Cda) (TIXT) Q3 2024 earnings summary

Executive summary

• Management highlighted stabilization in operating performance and a gradual turnaround, with early momentum in revenue growth and AI-driven service expansion.

• Rebranding to TELUS Digital completed in Q3 2024, positioning the company as a global leader in digital transformation and CX solutions.

• The company serves over 650 clients across diverse sectors, leveraging AI, trust & safety, and next-gen IT services.

• AI Data Solutions drove sales momentum, with new mandates in Japan and expanded engagements with major clients across technology, financial services, e-commerce, and wellness sectors.

• Team size reached approximately 77,000 as of September 30, 2024, with a strong focus on culture, diversity, and social responsibility.

Financial highlights

• Q3 2024 revenue was $658 million, down 1% year-over-year but showing sequential improvement from the prior quarter.

• Adjusted EBITDA margin for Q3 was 14.4%, stable sequentially but down from 21.0% in Q3 2023.

• Free cash flow for Q3 was $98 million, with a full-year yield expected at approximately 14% of revenue.

• Net loss of $32 million and diluted EPS of $(0.12) in Q3 2024, compared to net income of $9 million and EPS of $0.03 in Q3 2023.

• Net Debt to Adjusted EBITDA Leverage Ratio was 2.9x at September 30, 2024, within the target range.

Outlook and guidance

• 2024 revenue guidance reiterated at $2.61–$2.665 billion, with Adjusted EBITDA expected between $465–$485 million and margin of 17.8%–18.1%.

• Adjusted diluted EPS for 2024 is projected at $0.39–$0.44, with cash taxes of $45–$55 million.

• For 2025, management expects continued stabilization and low single-digit sequential revenue growth, with healthy free cash flow above 10%.

• Focus remains on profitable growth, robust cash flow, and expanding AI-enabled capabilities.