TELUS International (Cda) Inc. Subordinate Voting Shares

Good morning, ladies and gentlemen. Welcome to the TELUS International Third Quarter 2021 Investor Call. My name is Jonathan, and I will be your conference facilitator today. At this time, all lines have been placed on mute to avoid any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, please press star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press the pound key. I would now like to introduce Jason Meyer, Senior Director, Investor Relations and Treasurer at Telus International. Mr. Meyer, you may begin the call.

Thank you, Jonathan. Good morning, everyone. Thank you for joining us today for Telus International's Q Street 2021 Investor Call. Hosting our call today are Jeff Puritt, President and Chief Executive Officer, and Vanessa Canu, our Chief Financial Officer. As usual, we'll begin with some prepared remarks where Jeff will provide an operational and strategic overview of the quarter. followed by Vanessa who will provide some key financial highlights. We will then open the line to questions from pre-qualified analysts before turning the call back to Jeff for his closing remarks. Before I turn the call over to Jeff, I'd like to direct your attention to slide two of the supplementary presentation available for download on this webcast and also available on our website at telusinternational.com slash investors. The statements made during this call may be forward-looking in nature, including all comments reflecting expectations assumptions or beliefs about future events or performance that do not relate solely to historical periods. These forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from our current projections. We assume no obligation to update any forward-looking statements. Jeff and Vanessa will also discuss certain non-GAAP measures that the management team consider to be useful in assessing our company's underlying business performance. An explanation of these non-GAAP measures and a reconciliation to the comparable GAAP measures can be found in the appendices of today's supplementary presentation, along with the earnings news release and MD&A available on CDAR and on EDGAR with the SEC. I'd also like to remind everyone that all financial measures we're referencing on this call and in our disclosure are in U.S. dollars, unless specified otherwise, and relate only to TELUS international results and measures. With that, I'll now pass the call over to our President and CEO, Jeff Peart.

Thank you, Jason. Good morning, everyone, and thank you for joining us today. In the third quarter, TELUS International delivered a solid 30% year-over-year increase in revenue as we continue to win more business with existing and new clients alike. This growth was achieved both organically and with the benefit of contributions from prior acquisitions, particularly related to our AI data solutions division. As Vanessa will outline shortly in more detail, our strong performance this quarter should be considered in the context of our resilient execution in the same period of last year. Indeed, TELUS International is posting impressive growth from an already solid baseline established a year ago as we continue to successfully navigate the operational challenges of the pandemic. While we continue to deliver meaningful revenue growth, we're also achieving exceptional profitability with a 23% year-over-year increase in adjusted EBITDA and an adjusted EBITDA margin of 24.6%. Our deliberate strategy of developing and acquiring higher-value digital capabilities, including premium content moderation and AI services, enable us to design, build, and deliver differentiated digital customer experiences on behalf of our over 600 global clients. Having strategically focused our investments and resources in key sectors of the digital economy, we continue to derive significant benefits, such as revenue diversification, as well as growth across each of our target verticals. In addition to our continued strength in tech and games, we're also experiencing increasing traction within e-commerce and fintech. To highlight some of our sales team's multi-year, multi-million dollar contract wins this quarter, we welcomed a leading North American financial institution as a new client. We also expanded our scope with Barclays, one of the first clients in our new North Charleston, South Carolina location. In tech and games, we welcomed a rapidly growing games company as well as one of the fastest growing startups in the world focused on event technology. We also had a key win from an existing client in consumer electronics that entails program expansion into a new geography. Notably, we also secured new programs from our largest client by revenue, the world's leading social media network, in an expanded mandate of our AI data solutions team. One of our projects for this client is enabling a more customized and targeted delivery of digital advertising to their different audiences. This is more critical for brands than ever before, given the proliferation of online content available to consumers, as well as their heightened expectations to only be served content that is both useful and contextually relevant to them. As a result, brands must have a strategy in place and the right people to execute upon it in order to remain relevant and competitive. Leveraging our industry-leading AI capabilities, TELUS International reviews over 1 million ads per month for this client. Our team recruits, educates, and manages over 4,000 evaluators in more than 10 geographic markets. With our proprietary people and project management platform, we're able to ensure the diversity and high quality of AI training data for the client's algorithm in order to boost ad relevance on a global scale. Our team also provides custom reporting, which includes detailed statistics about evaluator performance, output quality, and more. Through continuous process improvement, our team of project managers has worked closely with the client to assemble teams of annotators in new markets, as well as improve their in-house evaluation tools. The geographic and demographic diversity of our evaluator pool has proven invaluable to our client's AI training model. Our over 1 million strong globally scaled AI community enables the delivery of highly personalized region-specific ads, which directly contributes to this client's commercial success. This is also a great example of our approach to combining our AI data solutions with our content moderation expertise at scale to create a powerful and differentiated go-to-market offering. Our highly effective AI solutions provide a digital first line of identification and help enable a robust content moderation framework for our clients. The AI layer enables our content moderation team members to dedicate their time and judgment on higher value aspects of the engagement with clear benefits for both the client and for Telus International. Our scale in both areas amplify to our highly strategic acquisitions positioned us as having one of, if not the, largest data annotation platform globally. In addition to making strategic, high-impact acquisitions that complement and build upon our digital capabilities, we also continue to cultivate next-gen digital CX solutions internally through our innovative iLabs team. We established iLabs as a dedicated space where TELUS International innovators, researchers, and visionaries could collaborate and co-innovate to explore emerging customer experience tech that is poised to disrupt the future. Our iLabs team are amongst our thousands of team members who have completed hundreds of projects tackling unique challenges that we've leveraged to accelerate the design and development of customized solutions for our clients that have helped to redefine a human technology relationship in digital customer experience. As an example, our iLabs team developed AI and machine learning-based accelerators to automate elements of our customer-facing team members' daily workflows, such as simple repetitive tasks, thereby enabling our team members to focus on higher value and more complex work. We developed an intelligent classification tool that automatically sorts incoming tickets or custom emails into relevant categories based on content and sentiment. This tool also is able to provide a precise, and meaningful summary for our team members, making reviews much more time efficient and effective. We use the same text analytics engine that sorts these inquiries to help our customer-facing team members compose a personalized, grammatically correct response to customer inquiries. Simultaneously, we also have a team member assistance bot that proactively recommends appropriate solutions for a customer inquiry, drawing from a knowledge database powered by semantic search that's easy to navigate and then importantly ensures high accuracy and consistent information that authorized team members can access at any time from anywhere. Not only do we see improvements to key performance indicators that measure quality of service and customer satisfaction, but this technology also results in a more personalized and empathetic customer experience. The work of our iLabs team is a very important part of our ability to stay ahead in the digital transformation landscape as well as helping to anticipate our clients' demands for disruptive solutions. As digital transformation accelerates, new technologies are becoming ubiquitous faster than ever. Take cloud infrastructure, for example. It was not that long ago that running systems in the cloud was a novelty, yet today it represents a key component of most companies' digital transformation journeys. Another example of a recent win I want to highlight is for a client in the hospitality sector who turned to Telus International for support with their existing Amazon Web Services cloud environment. Prior to partnering with TI, this client didn't have a managed services provider they felt they could rely upon to optimize their technology solutions. This client needed their technology environment to be secure, scalable, and cost-effective, and because the cloud can be complex, they sought an experienced strategic partner whose reliability freed them up to better focus on their customers. In this case, our goal was not to implement new technology for the client, but to apply our deep Amazon Web Services expertise in order to introduce efficiencies and added security. So there was both a consultative design element as well as an ongoing managed service relationship. To start, we conducted a thorough review of the client's environment security, resulting in the removal of unnecessary access and the introduction of enhanced protocols for data recovery. We then assumed full oversight of their environment with ongoing reviews and regular communication to keep the client well-informed of the system's operation. Our Telus International team monitors and manages workloads for this client, providing strategic recommendations and optimizing cloud performance, including around-the-clock support for AWS-related requests and issues, patching, backup, infrastructure and security monitoring, and reporting. Digitization not only transforms our commercial world, but also impacts other spheres, including government at all levels. As an example, one of our government clients is working with our digital solutions team on a ServiceNow IT service management deployment project. The project's scope was to design, configure, and transition this client to a best-in-class digital platform, providing benefits such as workflow automation, standardized processes, and extensive integration capabilities. With approximately 1,500 administrative and elected officials producing 31,000 requests per year, our client needed a service management solution to address process maturity issues, ad hoc tools, integration challenges, all while improving their service management standards. This focus on service quality was a key priority in this client's digital transformation ambitions, so naturally TELUS International was the right partner for them. To meet this ever-increasing demand from our existing and new clients, we have continued to recruit and hire new team members to our TELUS International family. With over 2,300 net new hires in the third quarter, we're faring extremely well in the ongoing challenging global labor market. Our success in attracting and retaining top talent continues to be driven by the unique and caring culture we've cultivated over many years. Undeniably, our philosophy and proven approach to building and developing our talented global team is directly contributing to our business growth. In our ongoing efforts to keep them safe and healthy, We continue to leverage our robust infrastructure and cloud technologies to enable approximately 80% of our global frontline team members to work remotely from their homes. We continue to monitor the environment at each region where we operate, taking a science-based methodical approach to inform when we can safely reopen offices and return our team members to our inspiring workspaces. Thanks to our team members' relentless efforts and commitment to excellence and innovation, Kellis International continues to be recognized as a global leader across various aspects of our company. This past quarter, we were named one of Fast Company's Best Workplaces for Innovators International for 2021, a prestigious ranking that positions us amongst the top companies globally that are successfully fostering a culture of innovation and empowering employees to improve processes, create new products, and invent new ways of doing business. Additionally, TELUS International was ranked third overall in the 2021 HFS report and ranking for top digital service providers. HFS is a leading global research consultancy firm, and they assessed and rated the world's largest service providers across a series of capabilities, including execution, innovation, and voice of the customer. Notably, respected lead analyst Melissa O'Brien highlighted our steady investments in technology innovation, including an intelligent assistance and automation, and the expansion of our new economy services portfolio, such as content moderation and AI data solutions. She also cited the value in our unique approach to digital services, which is organized around our design, build, deliver construct, and our ability to undertake end-to-end digital CX transformation engagements. And of course, another key driver of our top ranking was our highly skilled and engaged teams who consistently provide the high-quality brand experiences customers demand. As you've heard me say many times before, and I will never tire of repeating it, our team members are the driving force behind TELUS International's success, and it is extremely rewarding to see their passion for what they do and their significant achievements recognized across our industry and even more broadly among the top global brands. With that, Let me now pass the call to our Chief Financial Officer, Vanessa Cano, to take you through our detailed financial results, and then I'll look forward to answering your questions. Vanessa, over to you.