UPDATE: TTEC Holdings (TTEC) Tops Q2 EPS by 40c, Revenues Beat; Raises FY20 EPS/Revenue Guidance Above Consensus
TTEC Holdings (NASDAQ: TTEC) reported Q2 EPS of $0.75, $0.40 better than the analyst estimate of $0.35. Revenue for the quarter came in at $453.1 million versus the consensus estimate of $395.2 million.
SECOND QUARTER 2020 FINANCIAL HIGHLIGHTS
Revenue
- Second quarter 2020 GAAP revenue increased 15.4 percent to $453.1 million compared to $392.5 million in the prior year period, or 16.3 percent growth in constant currencies.
- Foreign exchange had a $3.5 million negative impact on revenue in the second quarter 2020.
Income from Operations
- Second quarter 2020 GAAP income from operations was $49.0 million, or 10.8 percent of revenue, compared to $22.9 million, or 5.8 percent of revenue in the prior year period.
- Second quarter 2020 Non-GAAP income from operations, excluding $0.8 million in restructuring charges, was $49.8 million or 11.0 percent of revenue versus 6.5 percent for the prior year period.
- Foreign exchange had a $0.5 million positive impact on income from operations in the second quarter 2020.
Adjusted EBITDA
- Second quarter 2020 Non-GAAP Adjusted EBITDA was $71.0 million, or 15.7 percent of revenue, compared to $44.8 million, or 11.4 percent of revenue in the prior year period.
Earnings Per Share
- Second quarter 2020 GAAP fully diluted earnings per share was $0.67 compared to $0.25 for the same period last year.
- Second quarter 2020 Non-GAAP fully diluted earnings per share was $0.75 compared to $0.34 in the prior year period.
Bookings
- During the second quarter 2020, TTEC signed an estimated $214 million in annualized contract value. Bookings were diversified across segments, verticals, and geographies and included programs related to pandemic relief and support efforts.
"Our record financial results for the second quarter reflect heightened demand for digitized and virtualized CX solutions," commented Ken Tuchman, chairman and chief executive officer of TTEC. "Our ability to rapidly enable clients to substitute person-to-person engagement with an authentic digitized and virtualized customer experience has never been more essential. Our business performance underscores the agility and market differentiation in our technology rich customer experience-as-a-service (CXaaS) offerings."
Tuchman continued, "TTEC provides everything it takes for large commercial enterprise and government organizations to operate virtually, automate processes, and successfully enable digital customer experience. We expect our topline momentum to continue to benefit from current market trends including a growing demand for digitization and virtualization, an increasingly compressed time to digital adoption and a shift toward ubiquitous engagement for businesses and consumers."
"I'm also thrilled about TTEC Digital's strategic acquisition of VoiceFoundry, a leading global Amazon Connect partner. VoiceFoundry provides additional speed, agility, and optionality to our Humanify™ Cloud platform, expanding our CX Ecosystem with Amazon's cloud-first, best-of-breed solutions that will accelerate digital CX transformation for our clients," concluded Tuchman.
GUIDANCE:
TTEC Holdings sees FY2020 EPS of $2.37-$2.43, versus the consensus of $1.99. TTEC Holdings sees FY2020 revenue of $1.766-1.784 billion, versus the consensus of $1.69 billion.
Our reinstated full-year 2020 outlook, which includes a modest contribution from the VoiceFoundry acquisition and excludes restructuring and impairment charges, is as follows:
Revenue between $1.766 and $1.784 billion, an increase of 7.4 and 8.5 percent over the prior year.
Operating Income margins between 9.1 and 9.2 percent.
- Margins of approximately 13.8 percent for TTEC Digital and 8.2 percent for TTEC Engage
Adjusted EBITDA margins between 14.2 and 14.3 percent.
- Margins of approximately 19.7 percent for TTEC Digital and 13.2 percent for TTEC Engage
Earnings Per Share between $2.37 and $2.43.
Capital expenditures are estimated to be between 3.1 and 3.3 percent of revenue, of which approximately 70 percent is growth oriented.
Effective tax rate for the full year is estimated between 23 and 27 percent.
Diluted share count for the full year is estimated between 46.9 and 47.1 million.
We estimate the second half total company 2020 mix as follows:
- Revenue: 51 percent third quarter, 49 percent fourth quarter
- Operating Income: 52 percent third quarter, 48 percent fourth quarter
- Adjusted EBITDA: 51 percent third quarter, 49 percent fourth quarter
- Earnings Per Share: 53 percent third quarter, 47 percent fourth quarter
We estimate the Digital - Engage segment 2020 mix as follows:
- Revenue: 17 percent Digital, 83 percent Engage, of which 24 percent of Digital and 25 percent of Engage in the fourth quarter, respectively.
- Operating Income: 26 percent Digital, 74 percent Engage, of which 19 percent of Digital and 21 percent of Engage in the fourth quarter, respectively.
- Adjusted EBITDA: 23 percent Digital, 77 percent Engage, of which 21 percent of Digital and 24 percent of Engage in the fourth quarter, respectively.
"We remain intensely focused on the health and safety of our people and partners, our clients' success as they navigate the macro challenges inherent in COVID-19, and managing our near and long-term priorities to deliver sustainable long-term profitable growth," commented Regina Paolillo, chief financial and administrative officer of TTEC. "We could not be more satisfied with our first half results, with the strength of our client relationships, and the relevancy of CX cloud, omnichannel, intelligent automation and virtual and digital technologies. With a strong revenue backlog, new business pipeline, and solid balance sheet in hand for 2020, we are restoring and increasing our original outlook and can now turn our attention to 2021 and beyond, including both organic and inorganic investments that will enable continued high single-digit topline and double-digit profit growth."
For earnings history and earnings-related data on TTEC Holdings (TTEC) click here.