TTEC Holdings, Inc.

Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you and please continue to stand by. Thank you. Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you and please continue to stand by. © transcript Emily Beynon Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you and please continue to stand by. Thank you. Welcome everyone to T-TECH's first quarter 2024 earnings conference call. I would like to remind all parties that you will be in a listen-only mode until the question and answer session. This call is being recorded at the request of T-TECH. I would now like to turn the call over to Paul Miller, T-TECH's Senior Vice President, Treasurer, and Investor Relations Officer. Thank you, sir, and you may begin.

Good morning, and thank you for joining us today. T-TECH is hosting this call to discuss its first quarter results for the period end of March 31, 2024. Participating on today's call are Ken Tuchman, Chairman and Chief Executive Officer of T-TECH, Shelley Swanback, President of T-TECH and Chief Executive Officer of T-TECH, and Kenny Wagers, CFO of T-TECH. Yesterday, T-TECH issued a press release announcing its financial results. While this call will reflect items discussed within that document, for complete information about our financial performance, we also encourage you to read our first quarter 2024 quarterly report on Form 10-Q. Before we begin, I want to remind you that matters discussed on today's call may include forward-looking statements related to our operating performance, financial goals, and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward-looking statements reflect our opinion as of the date of this call and we undertake no obligation to revise this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our 2023 Annual Report on Form 10-K. A replay of this conference call will be available on our website under the Investor Relations section. I will now turn the call over to Ken.

Good morning, everyone, and thank you for joining us today. We started the year focused on the strategic priorities that we outlined last quarter. Our first quarter 2024 revenue was $577 million. On a non-GAAP basis, our adjusted EBITDA was $55 million and adjusted EPS was 27 cents. We met our first quarter objectives while navigating a fluid demand environment and continue to make progress on our diversification strategy that has three focus areas, including, one, attracting new clients. We established new relationships with over two dozen accounts, several of which are large enterprises that present strong, long-term growth opportunities. Two, we expanded our geographic footprint and increased offshore mix. We continued to scale with new and existing client programs across our growing geographic footprint. And three, collaborative partnerships and innovative solutions. We strengthen our partnerships with the hyperscalers and CX technology players, and we launch several new AI-enabled solutions in T-TECH Digital and T-TECH Engage. Looking at our two business segments, T-TECH Digital is gaining momentum with consecutive quarters of strong bookings and pipeline. In T-TECH Engage, we have two dynamics currently impacting our results. While we're encouraged by the number and quality of the new enterprise clients we're winning, they do take time to yield. Second, while we're pleased with the new clients, some of our embedded base volumes are down. We're making progress managing through these challenges in T-TECH Engage, and management believes, as previously communicated, that T-TECH Engage and the company overall will be back to positive growth in 2025, delivering double-digit EBITDA margins. I'd like to now transition to my perspective on the current state of the industry. It's no secret that the customer experience space is in the midst of dramatic change. As a pioneer and leader in this industry, we've experienced and thrived through every evolution. Since we started this business 40 years ago, I was told that every innovation was going to eliminate or have an impact on the industry. First it was voicemail, then email, then interactive voice response. Next, it was the dawn of the Internet, the proliferation of smartphones and apps, and then the migration to the cloud. Each evolution has created more opportunity. Today, it's no different. With the advent of generative AI and all of its hype, some analysts and pundits are predicting a negative impact on the industry. Instead, new pockets of opportunity are emerging and diversifying the space. New work types like content moderation, data annotation, fraud mitigation are creating new growth opportunities for businesses like ours. These didn't exist in any material way 10 years ago. I want to remind you that the total addressable market for just contact center services is well over $400 billion. Lately, however, it feels like Wall Street believes the industry is on its last legs and has written it off. If you speak with any one of my competitive peers, our clients, or any CX industry analyst, they will tell you the same thing. This space is not going away. It is consolidating, bifurcating, and evolving and creating new opportunities for the industry. This future is already in motion, and we see three interaction categories emerging. Simple repetitive tasks like making a basic reservation, checking on delivery status, and setting up appointments are already being automated. Activities that require in-the-moment human interaction, like bank tellers, fast food drive-through cashiers, building receptionists, are now happening via virtual kiosks. These on-screen contacts are being staffed with friendly and cost-effective resources based thousands of miles away in many cases. And when it comes to high-value, high-risk decisions about health, family, money, life events, or large capital purchases, the need for skilled guidance from an empathetic, compassionate human remains non-negotiable. What is open for discussion, however, is where these trained nurses, financial advisors, health advocates, and others are based. As technology continues to improve, these interactions are being delivered virtually from anywhere on the globe. The need for human interactions is not going away. And similar to what occurred in previous technology cycles, the industry is transforming, changing shape, and creating opportunities for forward-thinking, technology-enabled players like T-TECH. We've consistently invested in building sophisticated technology and consulting expertise. We've forged collaborative partnerships with the hyperscalers and the leading technology players with the most advanced AI. And we've built an enviable bench of global CX talent that includes every skill a company needs to design, build, operate, optimize, and deliver seamless customer experience at scale. Now I'll share how this is playing out with our business segments. In Key Tech Digital, our focus is on helping clients modernize their CX technology platforms to take full advantage of the new AI-enabled capabilities. Clients are choosing us because we're CX specialists, who operate at the intersection of contact center technology, CRM, analytics, and AI. We're a pure play CX technology and services firm with solutions that are wrapped in consulting and analytics and underpinned with software engineering. We have the know-how and the talent to seamlessly integrate the full suite of CX technology required to meet our clients' unique and evolving operating needs. We are technology agnostic, Certified AI experts, our bench of full-stack engineers and data scientists continues to grow, enabling our clients to benefit from our CX best practices regardless of platform. By the end of Q3, 100% of our T-TECH digital team will be certified on partner platforms and our own AI accreditation programs. And most importantly, we're delivering the outcomes that clients value. The business segment has produced consecutive quarters of strong bookings and continues to have a growing pipeline. Management believes the team is on track to achieve our goal of double digit top line and bottom line growth over the next few years. Now on to T-TECH Engage, where our focus is on integrating technology and AI into everything we do to improve associate productivity and customer satisfaction. We're using AI on the front line as a companion for our associates with real-time language translation, intuitive generative knowledge support, and post-call summarization. Our team leaders are using AI as a coach to help them provide individualized training and curriculum enhancements. Our data scientists are providing clients with actionable insights with conversational intelligence gleaning from the next generation quality technology. Across both business segments, We have hundreds of AI-enabled projects underway, with many more in development. While still early days, the opportunities continue to unfold as clients embrace our services that drive higher quality outcomes at the lowest total overall cost to serve. In closing, as I mentioned earlier, T-TECH and the entire industry are going through a dynamic period of evolution, which creates some volatility that is unavoidable. I speak for the board and our entire management team that we're taking the necessary actions during this transition year to return to long-term growth and increase profitability. I recently returned from a trip to the Philippines and continue to be energized by our highly motivated teams in that region and across the globe. I look forward to sharing our progress on the topics we just discussed in the quarters to come. And I'll now turn the call over to Shelley.