TTEC (TTEC) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 0.8% to $2.463B; GAAP operating income and net income fell, while adjusted EBITDA was $271.5M, down from $320.1M.

• Conservative client spending and delayed contracting weighed on results; 2024 guidance reflects continued Engage pressure and a revenue ramp lag at new offshore locations.

• Digital posted record Q4 bookings; strategic priorities include offshore expansion, AI-enabled solutions, margin optimization and debt reduction.

Financial highlights

• FY23 revenue was $2.463B, up 0.8% YoY; FX added $4.4M.

• FY23 GAAP operating income was $118.0M, or 4.8% of revenue, vs. $168.5M, or 6.9%; non-GAAP operating income was $200.4M, or 8.1%, vs. $248.5M, or 10.2%.

• FY23 GAAP net income was $18.3M, or 0.7% of revenue, vs. $117.3M; non-GAAP net income was $103.2M, or 4.2%, vs. $169.7M.

• Q4 revenue declined 4.9% YoY to $626.2M; GAAP operating income was $16.9M, or 2.7% of revenue, vs. $48.7M, or 7.4%.

• Q4 GAAP net loss was $8.2M, or 1.3% of revenue; non-GAAP net income was $17.5M. Adjusted EBITDA was $57.5M, or 9.2% of revenue, vs. $86.5M, or 13.1%.

Outlook and guidance

• FY24 revenue guidance is $2.275B-$2.365B, midpoint $2.320B; adjusted EBITDA $215M-$259M, midpoint $237M, with a 9.5%-11.0% margin range.

• FY24 non-GAAP operating income guidance is $150M-$194M, midpoint $172M; margin range 6.6%-8.2%, midpoint 7.4%.

• FY24 non-GAAP EPS guidance is $1.15-$1.86, midpoint $1.51; adjusted tax rate 23%-25% and diluted share count 47.4M-47.6M.

• Q1 FY24 revenue guidance is $559M-$569M, midpoint $564M; adjusted EBITDA $52M-$58M, midpoint $55M, and non-GAAP EPS $0.25-$0.34.

• FY24 Engage revenue guidance is $1.790B-$1.850B; Digital revenue guidance is $485M-$515M.