Teletech Holdings (NASDAQ: TTEC) reported Q1 EPS of $0.42, $0.05 better than the analyst estimate of $0.37. Revenue for the quarter came in at $373.6 million versus the consensus estimate of $357 million.

FIRST QUARTER 2018 FINANCIAL HIGHLIGHTS

Revenue

• First quarter 2018 GAAP revenue increased 10.9 percent to $375.2 million compared to $338.3 million in the prior year period.
• Non-GAAP AHFS/WD revenue increased 13.0 percent to $373.6 million over the prior year period.
• ASC 606 had a $12.5 million positive impact on revenue in the quarter.

Income from Operations

• First quarter 2018 GAAP income from operations was $24.9 million, or 6.6 percent of revenue, compared to $26.5 million, or 7.8 percent of revenue in the first quarter 2017.
• Non-GAAP AHFS/WD income from operations, excluding $2.0 million in restructuring and asset impairments, was $27.4 million or 7.3 percent of adjusted revenue versus 8.1 percent in the prior year.
• ASC 606 had a $6.3 million positive impact on income from operations in the quarter.

Adjusted EBITDA

• Non-GAAP Adjusted EBITDA was $51.1 million, or 13.6 percent of revenue, compared to $44.2 million, or 13.1 percent of revenue in the first quarter 2017.

Earnings Per Share

• First quarter 2018 GAAP fully diluted earnings per share attributable to TTEC shareholders was $0.10 compared to $0.42 in the same period last year.
• Non-GAAP fully diluted earnings per share was $0.42 compared to $0.44 in the prior year.

Bookings

• During the first quarter 2018, TTEC signed an estimated $100 million in annualized contract value revenue from new and expanded client relationships. The first quarter bookings mix was well diversified across segments, verticals, and geographies.

BUSINESS OUTLOOK

"We are executing on multiple fronts and realizing tangible results from our strategy, differentiated solutions portfolio, and improved go-to-market platform," commented Regina Paolillo, chief financial and administrative officer at TTEC. "We are also particularly pleased with the improved performance and outlook of our technology services business, driven by a rapidly growing addressable market for hosted and cloud-based contact center technology, architecture and services."

Paolillo continued, "Our first quarter consolidated results were in line with our expectations. We are confident in our planned growth trajectory and ability to expand margins in 2018, supported by our bookings, revenue mix, increased backlog, and growing pipeline across the business."

We confirm full year 2018 guidance, which includes the adoption of ASC 606 "Revenue from Contracts with Customers" using the modified retrospective method, but excludes non-GAAP AHFS/WD (Assets Held for Sale and Wind-down), as follows:

• Revenue – Revenue estimated to increase 3.3 to 4.7 percent between $1.505 and $1.525 billion.
• Operating Income Margin – Operating income margin estimated between 8.7 and 8.9 percent.
• Adjusted EBITDA Margin(1) – Adjusted EBITDA margin estimated between 13.9 and 14.2 percent.
• Capital Expenditures – Capital expenditures estimated at 3.8 percent of revenue, of which approximately 70 percent is growth oriented.

GUIDANCE:

Teletech Holdings sees FY2018 revenue of $1.5-1.525 million, versus the consensus of $1.52 million.

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