TTEC Holdings, Inc.

Good morning and thank you for joining us today. 2025 is off to a good start with our financial performance exceeding plan. In the first quarter, our revenue was $534 million, which was in the range of our forecasted plan. EBITDA was $56 million, up from $55 million in the prior year. This upside was driven by improved EBITDA margins of 10.6% versus 9.5% in the prior year. While we are pleased with our Q1 results, many of our clients are adopting a cautious approach in the current economic environment. Due to the recent uncertainty in trade policy, it is challenging for any business operating on a global scale to accurately predict the future. As a result, we're staying close to our clients and remaining agile as we look forward to stabilization. Despite the current environment, we're encouraged by our progress to date We're gaining ground as we sign new large enterprise clients, grow our share of wallet with our embedded base, and broaden our market reach with more complex, AI-enabled solutions. Additionally, we're strengthening our operational excellence and rigor as we continue to fortify our leadership team. As clients try to make sense of the increasingly complex CX ecosystem, our longstanding track record and command of interplay between CX technology and operations makes us the go-to partner for companies that will strive to differentiate on CX Excellence. Clients are entrusting us with their CX strategy and execution because of our unparalleled technology credentials and real-world frontline experience. We have decades of domain expertise, have made significant investments in proprietary technology, have delivered thousands of complex implementations, and employ a deep bench of CX strategists and full-stack digital engineers. Our CX focus and AI focus has helped drive our deep partnerships with the hyperscalers. These dominant tech partners with their scale and massive market reach are leading the way into every aspect of multimodal AI. Today, we're co-investing and collaborating with all three hyperscalers on CX roadmaps, building proprietary AI-enabled capabilities on their platforms, and selling and implementing enterprise-wide programs together for clients across the globe. Moving on to a business update. Across both business segments, we remain focused on executing the three priorities we outlined last year. First, increase diversification across clients, geographies, partners, and solutions. Second, transform experiences for employees and clients with digital innovation. And third, strengthen our financial performance on the top and bottom line. In T-TECH Engage this quarter, we made measurable improvements on all three objectives. Our solid performance is evident in the growth of new lines of business with our existing clients. In the first quarter alone, we added contracts with embedded-based clients worth over 75% of what we signed in all of last year. We are expanding our share of wallet with our clients due to our digital-first approach, our operational excellence, ability to deliver new complex work types. For example, this quarter, we pioneered a specialized new line of business with a Fortune 50 technology client, expanded our relationship with one of the largest healthcare payers into provider and clinical services, and we added commercial license support for a Fortune 100 financial services client. Much of this new business will be delivered offshore. We are pleased with the growth in the embedded base, as well as our progress continuing to sign new high-growth enterprise clients. One of our most exciting new client wins this quarter is with a fan-obsessed sports streaming service. The company chose us to help them accelerate their vision of delivering a premium experience aligned with their customer interaction preferences. In partnership with T-TECH Digital, we developed an end-to-end solution that includes a digital insights hub for analytics that will unify customer data across multiple databases and deliver actionable insights into each customer's unique journey, a technology ecosystem that will deliver the optimal customer journey across channels, whether it's with self-service through agentic AI or human-assisted service through our live voice and chat interactions, and a team of frontline associates chosen exclusively for their passion for sports and our client's brand. When live, we are confident we will see double-digit improvement in first contact resolution, self-service containment, and significantly improved customer satisfaction and employee engagement. Moving on, our progress in T-TECH Engage includes meaningful profitability improvement driven by operational efficiencies, an expanded offshore footprint, and accelerated AI integration with our frontline teams. Through our AI-enabled platforms, we are beginning to see gains in time to proficiency, first contact resolution, and employee engagement and retention. Our proprietary solutions include T-TECH RealSkill, scenario learning, T-TECH Perform, employee engagement, and T-TECH Addy, automated voice translation, to name a few. Now let's move on to T-TECH Digital. The CX technology market is at an inflection point. As I mentioned before, the strong entrance of the hyperscalers into the CX space is redefining the role of CX technology from providing infrastructure to powering intelligence. The contact center is transforming into a virtual interaction hub that connects bricks and mortar and digital channels seamlessly. This convergence is creating entirely new ways to interact and build engaged, profitable customer relationships. T-TECH Digital operates at the core of this expanding digital ecosystem, driving our strategy beyond cloud migration and traditional contact center services. We're investing in an integrated approach that will enable us to deliver comprehensive AI-enabled enterprise-wide digital transformation. Whether a client is going all in on end-to-end platform with hyperscalers, or wants to layer on AI technology to their existing platform. Our deep relationships and knowledge of the hyperscaler's CX tools puts us in a unique position to deliver outcomes that others can't. For example, this quarter we closed a significant deal with a large financial services brand that was facing end of life with their legacy natural language processing technology. With a new hyperscaler platform, we're helping our client modernize their customer experience by driving better intent recognition, more intelligent routing, and expanded self-service capabilities, while also building the foundation to enable generative AI to further personalize their customer journey. In another example, our technology agnostic positioning helped us secure a complex CX transformation deal with a multinational financial services company. Initially, the client planned to select one hyperscaler platform, but ultimately chose a different one. We were by their side from the beginning, and our expertise in both of their platform options made us uniquely qualified to be their partner of choice. Our expertise and deep understanding of how to activate the AI benefits and our proven integration capabilities across the existing platforms made the decision an easy one. Although it's early in our journey with data modernization and agentic AI, Our growth with the hyperscalers and new partners provides us confidence in our direction. In many client engagements, we're starting with smaller clients at first. That will build momentum and grow over time. We're encouraged by our progress across all our newer practices and believe they will be meaningful contributors in the future. As I mentioned earlier, technology innovation is embedded in everything we do. This quarter, we are recognized for our progress bringing real-world AI solutions to market with multiple Stevie Awards for excellence in sales and service. We brought home trophies for several of our proprietary AI-enabled solutions, including T-TECH Perform, our employee learning and engagement platform, T-TECH Insight, our next-generation quality assurance solution, and T-TECH Addy, our real-time voice-to-voice translation solution. In closing, as we look to the future, one thing is crystal clear. No matter how fast tech evolves and how many tools we stack, the customer is still human. And at the end of the day, humans want to feel heard, helped, and valued. It's our mission to ensure that every interaction reflects this fundamental truth, transforming technology into a powerful ally and creating genuine connections and meaningful experiences. When done right, CX will build loyal customers who will spend more, stay longer, and become advocates for the brands they love. With our disciplined strategies, rigorous performance standards, and pragmatic approach to innovation, we'll continue to build a high-value business for the long term. On behalf of our board of directors, management team, and employees across the globe, thank you for your continued support. I will now turn the call over to Kenny.

Thank you, Ken, and good morning. I will start with a review of our first quarter 2025 financial results before providing context into our reiterated 2025 full-year financial outlook. In my discussion of the first quarter financial results, reference to revenue is on a gap basis, while EBITDA, operating income, and earnings per share are on a non-gap adjusted basis. A full reconciliation of our gap to non-gap results is included in the tables attached to our earnings release. Turning to our first quarter consolidated financial results, although revenue declined over the prior year as expected, it exceeded our plan primarily attributable to stronger revenue retention. The adjusted EBITDA and operating income contributions and margins were in line with our expectations, reflecting improvements year over year and on track to our 2025 full-year guidance. On a consolidated basis for the first quarter of 2025 compared to the prior year period, Revenue was $534 million compared to $577 million, a decrease of 7.4%. Adjusted EBITDA was $56 million, or 10.6% of revenue, compared to $55 million, or 9.5%. Operating income was $41 million, or 7.8% of revenue, compared to $38 million, or 6.6%. And earnings per share was $0.28 compared to $0.27. Foreign exchange had a $6 million negative impact on revenue in the first quarter over the prior year, while positively impacting operating income by $4 million, primarily in our engaged segment. Turning to our first quarter 2025 segment results. In our digital segment, first quarter revenue was $108 million, a decrease of 3.6% over the prior year. As discussed in prior quarters, the revenue continues to be impacted by the intentional decline in the lower margin one-time on-premise product sales as clients migrate to cloud-based CX delivery solutions. Excluding one-time product sales, digital's revenue grew 2.8% over the prior year period. More importantly, we continue to grow our recurring managed service offerings increasing 2.7% compared to prior year and representing approximately 66% of digital's total first quarter revenue compared to 62% in the same period last year. In our CX professional services offerings, revenue increased 3.1% year over year, partially driven by the diversification and expansion of our CX technology partner network and our deepening relationships with hyperscalers. Our digital backlog is $359 million, or 77% of our 2025 revenue guidance at the midpoint of the range, slightly down from 80% for the same period last year. Digital's first quarter 2025 operating income was $12 million, or 11.2% of revenue, compared to $9 million, or 8.3% in the prior year. The year-over-year improvement was due to revenue mix and improved utilization in our professional services practices. We are pleased with our digital segment's first quarter results. We are seeing good traction in our go-to-market approach, engaging in enterprise-wide digital transformations, utilizing multi-platform solutions across all our practices. However, as the market shifts from traditional contact center offerings, the mix of our legacy business and the new opportunities created is also changing. With this dynamic in mind, we are focused on efficiencies, capacity management, and redeployment of our talent to the AI market opportunity, all of which is evident in our first quarter 2025 profitability improvement. Moving on to our engaged segment, first quarter revenue decreased 8.3 percent to $426 million over the prior year period. Operating income was $29 million, or 6.9 percent of revenue. Relatively flat compared to the prior year, but a 70 basis point improvement as a percentage of revenue. The engaged segment's first quarter financial results were above expectations when compared to our full year guidance. reflecting the profit optimization initiatives we put in place in the second half of 2024. The revenue decline was expected, although less impactful than planned, primarily due to higher revenue retention in the quarter. As Ken previously mentioned, Engage closed a high volume of contracts representing new lines of business with its embedded base in the first quarter. We also continue to add high-growth potential enterprise logos with three new signings during the quarter, on top of the 15 signed in 2024, all of which will be serviced offshore. The segment's diversified offshore footprint, implementation of AI-enabled solutions, and focus on operational excellence are resonating with our existing clients and continue to attract new clients. Most importantly, the foundation we laid in 2024 to focus on profit optimization is materializing in our financial results. Much of the groundwork was started in the second half of last year, and we will continue to drive efficiencies in our operational delivery, improve our operational agility, and manage cost alignment throughout 2025. The engaged backlog is 1.59 billion, or 101% of our 2025 revenue guidance at the midpoint of the range, up from 94% for the same period of 2024. The engaged last 12-month revenue retention rate is 88% compared to 94% in the prior year. Adjusted for the revenue decline related to the large financial services client discussed in prior quarters, the engaged last 12-month revenue retention rate is 93%. I will now share other first quarter 2025 metrics before discussing our outlook. Free cash flow was a positive 16 million in the first quarter of 2025 compared to a negative 29 million in the prior year. The $45 million year-over-year increase was due to an additional $37 million provided by operating cash flow and an $8 million decrease in capital expenditures. Working capital provided $23 million of the cash flow from operations improvement compared to prior year. Capital expenditures were $5 million or 1% of revenue for the first quarter of 2025 compared to $13 million or 2.3% for the first quarter of last year. As of March 31st, 2025, cash was $85 million with $967 million of debt, primarily representing borrowings under our $1.2 billion revolving credit facility. Net debt increased year-over-year by $16 million to $881 million, but decreased by $12 million compared to the prior quarter. We ended the quarter with a net leverage ratio as defined under the credit facility of 3.79 times, continuing the downward trend from 3.99 times at the end of 2024 and 4.49 times at the end of the third quarter of 2024. Our normalized tax rate was 37.9 percent in the first quarter of 2025 compared to 32.7 percent in the prior year. The increase is primarily due to the impact of the U.S. valuation allowance recorded against the U.S. pre-tax losses in the second quarter of 2024. Turning to our 2025 outlook, I will now provide some context supporting our full-year financial guidance. Overall, we are pleased with our first quarter results, and we are reiterating our 2025 full-year guidance. However, as Ken mentioned, the current global economic environment gives us a cautious outlook for the second half of the year. Both segments are well positioned to navigate this environment, appreciating that it is difficult to predict the investment decisions of our existing clients and potential new clients as a result of their economic uncertainties and impact on their demand. This emphasizes the importance of the actions we implemented in the second half of last year. New key talent combined with our tenured leadership provides the delivery experience necessary to operate going forward. Our focus on improving operational agility, providing digitally enabled solutions, and driving cost optimization efforts position us to better navigate the near-term uncertainty. These actions are resonating in the market as evidenced by the growth in new lines of business within our existing clients, and the additional enterprise logo signed in the first quarter. In digital, the market pivot from engagements that only focus on cloud migrations or contact center technology to enterprise-wide digital transformations aligns with our strategic priorities. Digital is now executing an integrated go-to-market approach, solving clients' needs that include AI-enabled solutions, analytics, and multi-platform options across our broad base of practices. Although this market transition creates growth opportunities beyond our legacy practices, we remain focused on the balance between these opportunities and the competitive pressure on traditional contact center cloud migrations and transformation services. Please reference our commentary in the business outlook section of our first quarter 2025 earnings press release to obtain our expectations for our reiterated 2025 full-year guidance at the consolidated and segment level. In closing, the actions we took in the second half of 2024 and continue to drive are evident in our first quarter 2025 results in terms of profitability, cash flow generation, and a stronger balance sheet. Not only are these strategies critical to deliver increased profitable growth, but also to navigate this new dynamic economic environment. We remain committed to our focus on executing against our top business priorities and serving the best interest of all our stakeholders. I will now turn the call back to Bob.

Thanks, Kenny. As we open the call, we ask that you limit your questions to one or two at a time. Operator, you may open the line.