Teletech Holdings (NASDAQ: TTEC) reported Q4 EPS of $0.63, $0.13 worse than the analyst estimate of $0.76. Revenue for the quarter came in at $418.9 million versus the consensus estimate of $409.61 million.

Revenue

• Fourth quarter 2018 GAAP revenue decreased 1.8 percent to $419.1 million compared to $426.6 million in the prior year period.
• Non-GAAP AHFS/WD revenue decreased 1.0 percent to $418.9 million compared to the prior year period.
• ASC 606 and foreign exchange had a net $4.2 million positive and $5.4 million negative impact, respectively, on revenue in fourth quarter 2018.

Income from Operations

• Fourth quarter 2018 GAAP income from operations was $39.0 million, or 9.3 percent of revenue, compared to $36.6 million, or 8.6 percent of revenue in the prior year period.
• Non-GAAP AHFS/WD income from operations, excluding $7.0 million in restructuring and one-time items, was $46.0 million or 11.0 percent of adjusted revenue versus 11.2 percent for the prior year period.
• ASC 606 and foreign exchange had a net $0.5 million and $1.2 million positive impact, respectively, on income from operations in fourth quarter 2018.

Adjusted EBITDA

• Fourth quarter 2018 Non-GAAP Adjusted EBITDA was $64.0 million, or 15.3 percent of revenue, compared to $67.8 million, or 15.9 percent of revenue in the prior year period.
• ASC 606 and foreign exchange had a net $0.5 million and $0.8 million positive impact, respectively, on adjusted EBITDA in fourth quarter 2018.

Earnings Per Share

• Fourth quarter 2018 GAAP fully diluted earnings per share attributable to TTEC shareholders was $0.44 compared to a loss of $0.89 for the same period last year.
• Non-GAAP fully diluted earnings per share was $0.63 compared to $0.69 in the prior year period.
• ASC 606 and foreign exchange had a $0.01 and $0.02 positive impact, respectively on earnings per share in fourth quarter 2018.

Bookings

• During the fourth quarter 2018, TTEC signed an estimated $207 million in annualized contract value. The fourth quarter bookings mix was diversified across segments, verticals, and geographies.

GUIDANCE:

Teletech Holdings sees FY2019 revenue of $1.614-1.63 billion, versus the consensus of $1.56 billion.

• Operating Income Margin – Operating income margin between 7.4 and 7.6 percent.
• Adjusted EBITDA Margin – Non-GAAP adjusted EBITDA margin between 12.6 and 12.8 percent.
• Capital Expenditures – Capital expenditures between 3.8 and 4.0 percent of revenue, of which approximately 70 percent is growth oriented.

On a full year 2019 basis, we estimate each of the segments to contribute revenue, operating income, adjusted EBITDA as follows:

• CSS revenue growth between 1.3 and 4.0 percent, operating income margin between 8.1 and 9.5 percent, and adjusted EBITDA margin between 12.6 and 13.8 percent.
• CTS revenue growth between 42.2 and 43.4 percent, operating income margin between 13.9 and 14.3 percent, and adjusted EBITDA margin between 19.3 and 19.7 percent.
• CGS revenue growth between 4.1 and 5.4 percent, operating income margin between 8.4 and 8.6 percent, and adjusted EBITDA margin between 10.3 and 10.6 percent.
• CMS revenue growth between 3.0 and 4.0 percent, operating income margin between 5.8 and 6.0 percent, and adjusted EBITDA margin between 11.4 and 11.6 percent.

BUSINESS OUTLOOK

"The global market demand for digital transformation is accelerating as companies realize the urgency and importance that personalized and frictionless customer experiences have in building brand loyalty and value," commented Regina Paolillo, chief financial and administrative officer. "We are well positioned to capitalize on these market dynamics. Our differentiated solutions are delivering the customer experiences that our clients and their digital-savvy customers expect. The current scale and composition of our bookings and revenue demonstrates the markets' growing need for our digital and analytic-rich offerings."

Paolillo continued, "As we move into 2019, we are keenly focused on executing upon our unprecedented 2018 bookings, advancing our market share in the fast-growing omnichannel cloud space, improving CMS's profit margin, expanding our existing client relationships, and adding new clients. We remain committed to maximizing shareholder value through continuous innovation and marketplace differentiation, increased market share, profitable organic and inorganic growth, and capital distributions."

For earnings history and earnings-related data on Teletech Holdings (TTEC) click here.