TTEC (TTEC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $529.4 million, down 12.2% year-over-year, with TTEC Digital contributing 22% and TTEC Engage 78% of total revenue.

• Adjusted EBITDA was $50.3 million (9.5% margin), down from $63.9 million (10.6%) last year; operating income was $12.9 million (2.4% margin).

• EPS was $0.11 (non-GAAP), down from $0.48 last year; GAAP EPS was -$0.40, with a GAAP net loss of $19.0 million.

• The company is navigating a transitional year, focusing on client diversification, AI-enabled CX solutions, operational agility, and financial performance.

• Market headwinds include client decision delays, macroeconomic uncertainty, and cost-saving priorities.

Financial highlights

• Digital segment Q3 revenue was $115.7 million, down 13.2% year-over-year, with operating margin at 6.5%; Engage segment revenue was $413.8 million, down 11.9%, with operating margin at 1.3%.

• Free cash flow was -$100.2 million in Q3, impacted by discontinuation of accounts receivable factoring; cash and equivalents were $96.9 million as of September 30, 2024.

• Net debt increased to $931.5 million, with net debt to EBITDA at 4.49x.

• Capital expenditures in Q3 2024 were $8.8 million (1.7% of revenue), down from $21.8 million last year.

• Gross margin for Q3 2024 was 21.5%, up from 20.4% in Q3 2023.

Outlook and guidance

• Full-year 2024 revenue guidance midpoint is $2.235 billion, with adjusted EBITDA guidance of $201 million–$217 million (9.1%–9.6% margin).

• Digital segment guidance: revenue $483 million, EBITDA $66 million (13.8%), both below prior guidance.

• Engage segment guidance: revenue $1.752 billion, EBITDA $142 million (8.1%), both slightly above prior guidance.

• Guidance reiterated near the lower end of prior range, reflecting Q3 results and Q4 forecasts.

• Net debt and leverage expected to decline in Q4 and 2025 due to positive cash flow, asset sales, and lower interest rates.