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. music music Welcome to T-TECH's first quarter 2026 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 request of T-TECH. I would now like to turn the call over to Bob Villeneuve, T-TECH Group Vice President, Corporate Finance. 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 2026 results for the period ended March 31, 2026. Participating on today's call are Ken Tuchman, Chairman and Chief Executive Officer of T-TECH, and Kenny Wagers, Chief Financial Officer of T-TECH. Yesterday, T-TECH issued a press release announcing its financial results. While this call will reflect items discussed in that document, for complete information about our financial performance, we also encourage you to read our Q1 2026 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 opinions as of the date of this call and we undertake no obligation to update this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties, and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our 2025 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, and thank you for joining us today. This quarter, we maintained our focus on strengthening our foundation while continuing to invest in AI-enabled innovations across our business. For the first quarter of 2026, revenue was $496 million. EBITDA was $46 million, and we generated $21 million in free cash flow this quarter, which contributed to our reduction of $79 million in our credit facility borrowings since the first quarter of 2025. This reflects our continued focus on strengthening our balance sheet. I also want to call out that our first quarter EBITDA was impacted by a delayed receivable on one of our large public sector projects, for which a portion has already been approved. This receivable would have resulted in first quarter EBITDA of $49 million, or 9.7% of revenue. We expect the $3 million of EBITDA to be reflected in our Q2 financials. Regarding our outlook, we're reiterating our full-year guidance. While our year-over-year results reflect our offshore expansion in Engage, a changing market remix in digital, and the deliberate rationalization of a handful of underperforming clients, We expect these dynamics to improve our year-over-year profitability as the year progresses. With that context as a backdrop, I'd like to turn to market insights from our recent client advisory meeting. Twice a year, we sit down with several of our largest and most strategic clients to understand what's shaping their priorities. It was no surprise AI and security were at the center of our conversations. We're seeing a real shift in how companies approach AI. Early adoption was limited to siloed proof of concepts with varied success. Now leaders are taking a much broader view. Instead of just plugging in new tech for tech's sake, they're starting with their actual business goals and working backward to build a roadmap. They've realized that real transformation isn't just about the software. It's about rethinking processes, culture, and how the work actually gets done. We also heard from our CAB members that their internal bandwidth constrained IT teams are realizing they can't go it alone in such a fast moving environment. They're looking for agile outside partners that have deep experience in CX as well as expertise in specialized security and fraud prevention. facing risk of potential AI hallucinations, robots, and ballooning unplanned token compute expenses. Business and IT leaders are seeking more than just technical help. They're looking for a partner that can turn these AI-specific technologies and financial challenges. into a sustainable, competitive advantage. This environment plays directly into our AI strategy, which has three pillars of value. One, client transformation. Because we live exclusively in the CX space, we know exactly where technology succeeds and where it can be improved. We combine premier tech partnerships with our own custom-built software to optimize our client's tech stack. turning AI into a tool to augment associates, remove costly friction, and deliver insight-driven growth. Two, human augmentation. True augmentation isn't just about giving an agent a bot. It's about knowing the technology so deeply that we can fundamentally reshape the frontline experience. We optimize the human-to-tech interface, automating the mundane so our associates can leverage personalized insights to deliver more customized, higher value customer experiences. And three, operational excellence. To strengthen our go-to market as well as our internal operations, we're leaning into our deep technology and process expertise. We're automating internal redundant tasks and using analytics to gain insight into key value drivers to accelerate our growth and reduce cost. Our AI strategy is woven throughout our end-to-end approach, spanning consulting, technology, and managed services. Now, I'll share two quick stories that highlight how AI is helping us bring people, processes, and technology together, not just to talk about innovation and positive business outcomes, but to deliver them. First, let's look at a new client of ours, a fast-growing telehealth provider. They needed to optimize a complex ecosystem of payers, providers, and patients with disparate systems, customer needs, and industry regulations. They chose us to design, build, and operate an AI-driven roadmap that will unify their tech stack and empower frontline human health care advisors with real-time insights. With our solution in place, our client will be able to improve health outcomes at scale by balancing high-touch service with high-speed efficiency. The second example is a longtime partner of ours, a global travel brand. They were struggling with fragmented AI adoption and inconsistent results across dozens of different partners. We've been helping them move millions of their travelers around the world for over a decade. So we understand the complexity and unpredictability that they face every day. When it was time to level up their CX, They realized that their outside consultants, systems integrators, and even their own internal IT teams didn't have the AI experience or operational depth to meet their needs. They chose us because we knew their systems, processes, business, and most importantly, their customers, almost as well as they did. Together, these examples highlight the strength of our AI-enabled end-to-end value proposition and why it's so important for our long-term growth. By integrating strategy, technology, and operations into a single delivery engine, we address a core challenge in our industry, the execution gap. Because we deliver a continuously improving CX ecosystem with clear accountability, we're enabling solutions that are not only innovative, but durable and future-proof. We're encouraged that our strategy is beginning to take form, even if it hasn't hit the numbers column yet. Our pipeline is growing. We're closing new deals. and the level of engagement from our clients tells us we're on the right path for long-term growth. Now I'll turn to our segments. We'll start with our digital customer experience business, T-TECH Engage. We're continuing to focus our efforts on three specific areas of the business. First, our continued offshore expansion is supporting both cost efficiency and scale, Our offshore revenue mix has increased from 34% to 38% for the 12 months ended March 31st, 2026, compared to the prior year period. We expect by the end of the year, we will be delivering over 40% offshore. Second, we're actively refining our client mix by intentionally exiting a few lower margin accounts and prioritizing higher value, more complex engagements. And third, embedding AI across our associates' life cycle, from recruitment to learning and performance management. While these capabilities are just beginning to scale, results to date are encouraging. For example, through AI-aided hiring using our smart hire screening approach, we've increased interview-to-hire rates by as much as 25%, with early signals showing meaningful improvements in the retention and quality of the hire. In learning and performance, over 100 engaged clients and over 25,000 associates now operate on our T-TECH Perform platform. In select programs, we're seeing improvements in MPS and higher quality scores tied to AI-enabled coaching and support. And we're seeing strong results with our accent softening and language translation platforms. These AI-supported tools are enabling offshore deployment that delivers premium voice experiences and without compromising scale. Our T-TECH Engage pipeline is healthy as customer-centric brands seek partners that can move quickly and demonstrate results. Our vertical-focused go-to-market platform is yielding year-over-year pipeline growth with larger average deal sizes. While some of these opportunities involve more complex commercial models and therefore take longer to close, we remain confident in both the pipeline and our outcome-focused strategy. Now on to T-TECH Digital, where we continue to evolve our professional and managed services to align with how clients are approaching digital transformation. As a data, AI, and security partner for our CX solutions, we're helping our clients optimize the tech they already have while making sure their CCaaS, CRM, and AI investments are disciplined, secure, and built to scale. Q1 results were largely impacted by the short cycle nature of our professional services business. Although we achieved nearly 90% of our bookings target and a 96% book-to-bill ratio, 50% of our bookings closed in the final three weeks of the quarter. While this concentration led to a shortfall against our initial targets, the increase in late quarter demand and pipeline strength is encouraging. With new leadership in place, We're confident in our ability to manage through these timing delays as we build a more consistent and resilient foundation for growth. Our progress is driven by a clear market evolution. Clients want to navigate the AI landscape without abandoning their existing investments. Our CX and technical expertise allows us to optimize their current platforms. Whether hyperscalers or best in breed tools, where we see gaps in the market, we're building proprietary software to stitch the CX ecosystem together. By infusing these tools with AI, we can deliver secure, rapid results without forcing our clients into those costly and disruptive rip-and-replace projects that everybody wants to avoid. Our AI Gateway launched this quarter. Highlights are fit-for-purpose software strategy. As a proprietary integration platform, it bridges existing CCaaS systems with leading AI platforms. shrinking deployment timelines from months to weeks. This momentum is extending across all our CX technology solutions, including our modern data state and our AI observability platforms, currently in beta. These new software solutions are meeting growing demand as we address urgent client needs for data readiness and systems transparency and accuracy. These platforms are Combined with our tenured relationships with the leading CX technology titans, Positions T-TECH is a partner designed to accelerate scalable growth. Working side-by-side with our clients, we're unlocking faster insight to action cycles, strengthening trust in AI-driven decisions, and expanding long-term value creation through more intelligent, differentiated customer experiences. In closing, across both business segments, we recognize that our financial results are still catching up to our go-to-market and operational progress. The shift, however, towards our historic growth and margin profile is well underway. We remain disciplined and focused on our fundamentals that include strengthening our differentiated position as an end-to-end CX transformation partner through our vertical specific solutions, strategic technology partnerships, and proprietary software. winning higher value technology and services opportunities with our existing client base and new clients, and continuing to improve our profitability by strategically rebalancing our client portfolio, driving operational efficiencies and capitalizing on global talent pools. We have the right team platform and strategy in place to capture the significant long-term opportunities ahead by applying an agile approach to innovation, And doubling down on AI-driven efficiency, we're doing far more than just navigating a changing market. We're positioning T-TECH to own it in the future. On behalf of our board, leadership, and teams around the world, thank you for your continued support. And I'll now hand the call over to Kenny.