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TTEC Announces Record Fourth Quarter and Full Year 2020 Financial Results

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TTEC Holdings reported strong financial results for 2020, achieving record growth across key metrics. GAAP revenue increased 18.6% to $1.949 billion, while GAAP earnings per share rose from $1.65 to $2.52. The company experienced a notable 24% revenue growth in Q4, totaling $571.0 million, alongside a 58% increase in Non-GAAP operating income. TTEC's bookings surged to $659 million for the year, indicating robust demand for customer experience solutions. For 2021, TTEC anticipates revenue between $2.147 and $2.183 billion, reflecting a projected growth of up to 12%.

Positive
  • 2020 GAAP revenue grew 18.6% to $1.949 billion.
  • Fourth quarter revenue increased 24% year-over-year.
  • Non-GAAP EPS rose to $3.82 from $2.25.
  • Bookings in 2020 reached $659 million, up from $487 million.
  • 2021 revenue guidance of $2.147 to $2.183 billion, a 10.2% to 12% increase.
Negative
  • TTEC Digital revenue decreased 8.1% in Q4 2020.

DENVER, March 1, 2021 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), one of the largest, global CX (customer experience) technology and services innovators for end-to-end digital CX solutions, announced today financial results for the fourth quarter and full year ended December 31, 2020.

"TTEC achieved record performance across our 2020 booking, revenue, and profitability metrics. The full year 19 percent revenue growth, including the fourth quarter's 24 percent revenue growth and our full year 58 percent Non-GAAP operating income growth are the result of a growing market demand for partners who can with quality and reliability deliver virtual, digital and outcome-based customer experience solutions," commented Ken Tuchman, chairman and chief executive officer of TTEC.

Tuchman continued, "Our ability to swiftly and safely bring the technology and human talent to unprecedented levels of customer and citizen interaction has resulted in a significant increase in our overall client momentum. This increased market share, our strong revenue backlog, and growing sales pipeline, alongside our continued execution of strategic and accretive acquisitions, including Avtex, confidently sets us up to continue to deliver industry leading solutions and financial results into 2021 and beyond."

FULL YEAR 2020 FINANCIAL HIGHLIGHTS                

Revenue        

  • Full year 2020 GAAP revenue increased 18.6 percent to $1.949 billion compared to $1.644 billion in the prior year.
  • Foreign exchange had a $0.3 million positive impact on revenue for the full year 2020.

Income from Operations

  • Full year 2020 GAAP income from operations was $204.7 million, or 10.5 percent of revenue, compared to $123.7 million, or 7.5 percent of revenue in the prior year.
  • Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, and amortization of purchased intangibles, was $242.4 million or 12.4 percent of revenue versus 9.3 percent for the prior year.
  • Foreign exchange had a $1.2 million positive impact on income from operations for the full year 2020.

Adjusted EBITDA        

  • Full year 2020 Non-GAAP Adjusted EBITDA was $304.0 million, or 15.6 percent of revenue, compared to $209.1 million, or 12.7 percent of revenue in the prior year.

Earnings Per Share

  • Full year 2020 GAAP fully diluted earnings per share was $2.52 compared to $1.65 for the same period last year.
  • Non-GAAP fully diluted earnings per share was $3.82 compared to $2.25 in the prior year.

Bookings

  • During full year 2020, TTEC signed an estimated $659 million in annualized contract value compared to $487 million in the prior year. Full year bookings mix was diversified across segments, verticals, and geographies.

FOURTH QUARTER 2020 FINANCIAL HIGHLIGHTS                

Revenue        

  • Fourth quarter 2020 GAAP revenue increased 23.8 percent to $571.0 million compared to $461.3 million in the prior year period.
  • Foreign exchange had a $3.1 million positive impact on revenue in the fourth quarter 2020.

Income from Operations

  • Fourth quarter 2020 GAAP income from operations was $61.6 million, or 10.8 percent of revenue, compared to $42.8 million, or 9.3 percent of revenue in the prior year period.
  • Non-GAAP income from operations, excluding restructuring and impairment charges, equity-based compensation expenses, and amortization of purchased intangibles, was $73.9 million or 12.9 percent of revenue versus 10.8 percent for the prior year period.
  • Foreign exchange had a negligible positive impact on income from operations in the fourth quarter 2020.

Adjusted EBITDA        

  • Fourth quarter 2020 Non-GAAP Adjusted EBITDA was $92.3 million, or 16.2 percent of revenue, compared to $63.2 million, or 13.7 percent of revenue in the prior year period.

Earnings Per Share

  • Fourth quarter 2020 GAAP fully diluted earnings per share was $0.94 compared to $0.60 for the same period last year.
  • Non-GAAP fully diluted earnings per share was $1.22 compared to $0.76 in the prior year period.

Bookings

  • During the fourth quarter 2020, TTEC signed an estimated $188 million in annualized contract value compared to $120 million in the prior year period. Fourth quarter bookings mix was diversified across segments, verticals, and geographies.

STRONG CASH FLOW AND BALANCE SHEET FUND INVESTMENTS AND DIVIDENDS

  • Cash flow from operations in the fourth quarter 2020 was $85.1 million compared to $53.6 million for the fourth quarter 2019. For the full year 2020, cash flow from operations was $271.9 million compared to $238.0 million for the same period 2019.
  • Capital expenditures in the fourth quarter 2020 were $11.9 million compared to $16.3 million for the fourth quarter 2019. For the full year 2020, capital expenditures were $59.8 million compared to $60.8 million for the same period 2019.
  • As of December 31, 2020, TTEC had cash and cash equivalents of $132.9 million and debt of $396.3 million, resulting in a net debt position of $263.4 million. This compares to a net debt position of $225.1 million for the same period 2019.
  • As of December 31, 2020, TTEC had approximately $510 million of additional borrowing capacity available under its revolving credit facility compared to $530 million for the same period 2019.
  • In the fourth quarter 2020, TTEC paid a $0.40 per share, or $18.7 million, semi-annual dividend on October 29, 2020, and paid a $2.14 per share, or $100.0 million, one-time special dividend on December 30, 2020. On February 25, 2021, the Board declared the next semi-annual dividend of $0.43 per share, payable on April 21, 2021 to shareholders of record as of April 5, 2021. This dividend represents a 7.5 percent increase over the October 2020 dividend and 26.5 percent over the April 2020 dividend.

SEGMENT REPORTING & COMMENTARY

TTEC reports financial results for the following two business segments: TTEC Digital (Digital) and TTEC (Engage). Financial highlights for the two segments are provided below.

TTEC Digital – Design, build and operate tech-enabled, insight-driven CX solutions

  • Fourth quarter 2020 GAAP revenue for TTEC Digital decreased 8.1 percent to $75.7 million from $82.4 million for the year ago period. Income from operations was $7.6 million or 10.1 percent of revenue compared to operating income of $11.8 million or 14.3 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $9.9 million, or 13.1 percent of revenue compared to operating income of $13.3 million or 16.2 percent of revenue in the prior year period.

TTEC Engage – Digitally-enabled customer care, acquisition, and fraud prevention services

  • Fourth quarter 2020 GAAP revenue for TTEC Engage increased 30.7 percent to $495.3 million from $379.0 million for the year ago period. Income from operations was $54.0 million or 10.9 percent of revenue compared to operating income of $31.0 million or 8.2 percent of revenue for the prior year period.
  • Non-GAAP income from operations was $64.0 million, or 12.9 percent of revenue compared to operating income of $36.6 million or 9.7 percent of revenue in the prior year period.
  • Foreign exchange had a $2.9 million positive impact on revenue and negligible impact on income from operations.

BUSINESS OUTLOOK

"Our performance over the past year demonstrates the resiliency of our global team, the strength of our client relationships, and the market relevancy of our Digital and Engage assets," commented Regina Paolillo, chief financial and administrative officer. "From the very onset of the pandemic, we responded with agility and ingenuity. We protected the safety of our employees and clients and rapidly deployed our secure Humanify Cloud @home platform to enable over 100 thousand users to work virtually.  By successfully responding to our client's initial challenges including continuity, quality of service and surge volumes, we have been rewarded with more permanent volumes including virtualizing and digitizing their customer experience platforms with our OneTTEC technology-rich, suite of solutions."

Paolillo continued, "Our demonstrated capabilities and deep domain expertise in delivering differentiated outcome-based CX solutions has propelled TTEC to a new level of performance with record fourth quarter and full year 2020 financial results. We are well positioned to deliver continued profitable revenue growth in 2021, substantiated by the size and diversity of our bookings, revenue backlog, sales pipeline and history of strategic and accretive acquisitions, including Avtex."

Our full-year 2021 outlook, including Avtex, is as follows:

Revenue between $2.147 and $2.183 billion, an increase of 10.2 and 12.0 percent over the prior year. 

Non-GAAP Operating Income margins between 11.9 and 12.2 percent.

  • Margins of approximately 13.8 percent for TTEC Digital and 11.7 percent for TTEC Engage

Non-GAAP Adjusted EBITDA margins between 14.8 and 15.2 percent.

  • Margins of approximately 17.4 percent for TTEC Digital and 14.5 percent for TTEC Engage

Non-GAAP Earnings Per Share between $4.06 and $4.25.

Capital expenditures are estimated to between 3.1 and 3.3 percent of revenue, of which approximately 60 percent is growth oriented.  

Effective tax rate for the full year is estimated between 21 and 24 percent.

Diluted share count for the full year is estimated between 47.2 and 47.6 million.

We estimate the first half - second half 2021 mix as follows:

  • Revenue: 49 percent first half, 51 percent second half
  • Non-GAAP Operating Income: 51 percent first half, 49 percent second half
  • Non-GAAP Adjusted EBITDA: 51 percent first half, 49 percent second half
  • Non-GAAP Earnings Per Share: 52 percent first half, 48 percent second half

We estimate the Digital - Engage 2021 mix as follows:

  • Revenue: 17.5 percent Digital, 82.5 percent Engage, of which 39 percent of Digital and 51 percent of Engage in the first half, respectively.
  • Non-GAAP Operating Income: 20 percent Digital, 80 percent Engage, of which 30 percent of Digital and 57 percent of Engage in the first half, respectively.
  • Adjusted EBITDA: 20 percent Digital 80 percent Engage, of which 33 percent of Digital and 55 percent of Engage in the first half, respectively.

NON-GAAP FINANCIAL MEASURES

This press release contains a discussion of certain Non-GAAP financial measures that the Company includes to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these Non-GAAP financial measures can be found in the tables accompanying this press release.

  • GAAP metrics are presented in accordance with Generally Accepted Accounting Principles.
  • Non-GAAP - As reflected in the attached reconciliation table, the definition of Non-GAAP may exclude from operating income, EBITDA, net income and earnings per share restructuring and impairment charges, equity-based compensation expenses, amortization of purchased intangibles, among other items.

ABOUT TTEC 

TTEC Holdings, Inc. (NASDAQ: TTEC) is one of the largest, global CX (customer experience) technology and services innovators for end-to-end, digital CX solutions. The Company delivers leading CX technology and operational CX orchestration at scale through its proprietary cloud-based CXaaS (Customer Experience as a Service) platform.  Serving iconic and disruptive brands, TTEC's outcome-based solutions span the entire enterprise, touch every virtual interaction channel, and improve each step of the customer journey. Leveraging next gen digital and cognitive technology, the Company's Digital business designs, builds, and operates omnichannel contact center technology, conversational messaging, CRM, automation (AI / ML and RPA), and analytics solutions.  The Company's Engage business delivers digital customer engagement, customer acquisition & growth, content moderation, fraud prevention, and data annotation solutions. Founded in 1982, the Company's singular obsession with CX excellence has earned it leading client NPS scores across the globe. The company's nearly 61,000 employees operate on six continents and bring technology and humanity together to deliver happy customers and differentiated business results. To learn more visit us at https://www.ttec.com

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TTEC Holding, Inc.'s management and are subject to significant risks and uncertainties. Specifically, we would like for you to focus on risks related to COVID-19 global pandemic and the various government mandates designed to contain the pandemic, and how these risks may impact our business in the short and longer term; the risks related to our strategy execution; our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share; cybersecurity; consolidation activities undertaken by our clients; changes in laws that impact our business and our ability to comply with those and other laws governing our operations; the reliability of our information technology infrastructure and our ability to consistently deliver uninterrupted service to our clients; the need to forecast demand for services accurately and the impact of such forecasts on our capacity utilization; our ability to attract and retain qualified and skilled personnel at a price point that we can afford and our clients are willing to pay; our M&A activity, including our ability to identify, acquire and properly integrate acquired businesses in accordance with our strategy; and our equity structure including our controlling shareholder risk, and the potential volatility of our stock price resulting therefrom. Risk Factors that could cause TTEC's results to differ materially from those described in the forward-looking statements can be found in TTEC's Annual Report on Form 10-K for the year ended December 31, 2020, which has been filed with the U.S. Securities and Exchange Commission (the "SEC") and is available on TTEC's website www.ttec.com, and on the SEC's public website at www.sec.gov. TTEC Holdings, Inc. does not undertake to update any forward-looking statements.

Investor Relations Contact

Paul Miller

+1.303.397.8641

Public Relations Contact

Nick Cerise

+1.303.397.8331

Address

9197 South Peoria Street

Englewood, CO 80112

Contact

ttec.com

+1.800.835.3832

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)





















Three months ended


Twelve months ended



 December 31,


 December 31,



2020


2019


2020


2019










Revenue

$570,974


$461,326


$1,949,248


$1,643,704










Operating Expenses:









Cost of services

425,451


345,694


1,452,719


1,242,887


Selling, general and administrative

57,235


53,894


203,902


202,540


Depreciation and amortization

21,808


18,634


78,862


69,086


Restructuring and integration charges, net

700


175


3,264


1,747


Impairment losses

4,165


166


5,809


3,735

         Total operating expenses

509,359


418,563


1,744,556


1,519,995










Income From Operations

61,615


42,763


204,692


123,709











Other income (expense), net

(3,366)


(6,428)


(34,424)


(13,298)










Income Before Income Taxes

58,249


36,335


170,268


110,411











Provision for income taxes

(11,284)


(5,670)


(40,937)


(25,677)










Net Income

46,965


30,665


129,331


84,734











Net income attributable to noncontrolling interest

(2,542)


(2,402)


(10,683)


(7,570)










Net Income Attributable to TTEC Stockholders

$  44,423


$  28,263


$   118,648


$     77,164



















Net Income Per Share


















Basic

$     1.00


$     0.66


$        2.77


$        1.83











Diluted

$     0.99


$     0.65


$        2.75


$        1.81










Net Income Per Share Attributable to TTEC Stockholders


















Basic

$     0.95


$     0.61


$        2.54


$        1.66











Diluted

$     0.94


$     0.60


$        2.52


$        1.65



















Income From Operations Margin

10.8%


9.3%


10.5%


7.5%

Net Income Margin

8.2%


6.6%


6.6%


5.2%

Net Income Attributable to TTEC Stockholders Margin

7.8%


6.1%


6.1%


4.7%

Effective Tax Rate

19.4%


15.6%


24.0%


23.3%



















Weighted Average Shares Outstanding








  Basic

46,736


46,487


46,647


46,373

  Diluted

47,232


46,830


46,993


46,758

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(In thousands)


















Three months ended


Twelve months ended


 December 31,


 December 31,


2020


2019


2020


2019









Revenue:








TTEC Digital

$  75,715


$  82,354


$   306,985


$   305,346

TTEC Engage

495,259


378,972


1,642,263


1,338,358

Total

$570,974


$461,326


$1,949,248


$1,643,704









Income From Operations:








TTEC Digital

$    7,639


$  11,754


$     45,315


$     38,927

TTEC Engage

53,976


31,009


159,377


84,782

Total

$  61,615


$  42,763


$   204,692


$   123,709

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)








 December 31,


 December 31, 



2020


2019











ASSETS





Current assets:





   Cash and cash equivalents


$        132,914


$           82,407

   Accounts receivable, net


378,397


331,096

   Other current assets


145,491


136,322

      Total current assets


656,802


549,825






Property and equipment, net


178,706


176,633

Other assets


680,900


650,330






Total assets


$     1,516,408


$      1,376,788






LIABILITIES AND EQUITY





Total current liabilities


$        396,170


$         363,289

Other long-term liabilities


609,500


532,846

Redeemable noncontrolling interest


52,976


48,923

Total equity


457,762


431,730






Total liabilities and equity


$     1,516,408


$      1,376,788

 

TTEC HOLDINGS, INC. AND SUBSIDIARIES




RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION




(In thousands, except per share data)





















Three months ended





Twelve months ended






 December 31,





 December 31,






2020


2019





2020


2019



















Revenue


$570,974


$461,326





$1,949,248


$1,643,704



















Reconciliation of Adjusted EBITDA:






























Net Income


$  46,965


$  30,665





$   129,331


$     84,734




   Interest income


(235)


(622)





(1,656)


(1,913)




   Interest expense


2,038


5,576





17,489


19,113




   Provision for income taxes


11,284


5,670





40,937


25,677




   Depreciation and amortization


21,808


18,634





78,862


69,086




   Asset impairment, restructuring and integration charges


4,865


341





9,073


5,482




   Gain on sale of business units


-


(225)





(596)


(1,366)




   Gain on sale of trademarks


-


-





-


(700)




   Gain on recovery of receivables held by division in winddown


-


-





-


(1,416)




   Changes in acquisition contingent consideration


2,526


-





(1,823)


(2,424)




   Loss on dissolution of subsidiary


-


-





19,905


-




   Equity-based compensation expenses


3,036


3,151





12,507


12,814



















 Adjusted EBITDA


$  92,287


$  63,190





$   304,029


$   209,087


































Reconciliation of Free Cash Flow:






























Cash Flow From Operating Activities:















   Net income


$  46,965


$  30,665





$   129,331


$     84,734




   Adjustments to reconcile net income to net cash provided by operating activities:















          Depreciation and amortization


21,808


18,634





78,862


69,086




          Other


16,363


4,293





63,727


84,169




   Net cash provided by operating activities


85,136


53,592





271,920


237,989



















Less - Total Cash Capital Expenditures


11,945


16,338





59,772


60,776



















Free Cash Flow


$  73,191


$  37,254





$   212,148


$   177,213


































Reconciliation of Non-GAAP Income from Operations:





























Income from Operations


$  61,615


$  42,763





$   204,692


$   123,709




Restructuring charges, net


700


175





3,264


1,747




Impairment losses


4,165


166





5,809


3,735




   Equity-based compensation expenses


3,036


3,151





12,507


12,814




Amortization of purchased intangibles 


4,387


3,679





16,175


11,585



















Non-GAAP Income from Operations


$  73,903


$  49,934





$   242,447


$   153,590



















Non-GAAP Income from Operations Margin


12.9%


10.8%





12.4%


9.3%


































Reconciliation of Non-GAAP EPS:






























Net Income


$  46,965


$  30,665





$   129,331


$     84,734




Add:  Asset restructuring and impairment charges


4,865


341





9,073


5,482




Add:  Equity-based compensation expenses


3,036


3,151





12,507


12,814




Add:  Amortization of purchased intangibles


4,387


3,679





16,175


11,585




Add:  Interest charge related to future purchase of remaining 30% for Motif acquisition


-


2,124





6,273


4,657




Less:  Changes in acquisition contingent consideration


2,526


-





(1,823)


(2,424)




Less:  Gain on sale of business units


-


(225)





(596)


(1,366)




Less:  Gain on sale of trademarks


-


-





-


(700)




Less:  Gain on recovery of receivable held by division in winddown


-


-





-


(1,416)




Add:  Loss on dissolution of subsidiary


-


-





19,905


-




Add:  Changes in valuation allowance, return to provision adjustments and other, and tax effects of items separately disclosed above


(4,205)


(4,154)





(11,130)


(8,171)



















 Non-GAAP Net Income


$  57,574


$  35,581





$   179,715


$   105,195



















    Diluted shares outstanding


47,232


46,830





46,993


46,758



















 Non-GAAP EPS


$1.22


$0.76





$3.82


$2.25


































Reconciliation of Adjusted EBITDA by Segment :


TTEC Engage


TTEC Digital


TTEC Engage


TTEC Digital



Q4 20


Q4 19


Q4 20

Q4 19


YTD 20


YTD 19


YTD 20

YTD 19
















Earnings before Income Taxes


$  50,580


$  24,408


$  7,669

$11,928


$   124,822


$     71,176


$45,446

$39,238

   Interest income / expense, net


1,835


4,990


(32)

(37)


15,966


17,237


(133)

(39)

   Depreciation and amortization


17,881


15,472


3,926

3,161


64,832


57,868


14,030

11,217

   Asset impairment, restructuring and integration charges


4,865


242


-

99


7,620


2,936


1,453

2,546

   Gain on sale of business units


-


(225)


-

-


(596)


(1,366)


-

-

   Gain on sale of trademarks


-


-


-

-


-


(700)


-

-

   Gain on recovery of receivables held by division in winddown


-


-


-

-


-


(1,416)


-

-

   Changes in acquisition contingent consideration


2,526


-


-

-


(1,823)


(2,424)


-

-

   Loss on dissolution of subsidiary


-


-


-

-


19,905


-


-

-

   Equity-based compensation expenses


1,883


2,295


1,154

856


8,433


9,472


4,074

3,342
















 Adjusted EBITDA


$  79,570


$  47,182


$12,717

$16,007


$   239,159


$   152,783


$64,870

$56,304

 

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SOURCE TTEC Holdings, Inc.

FAQ

What were TTEC's Q4 2020 earnings results?

TTEC's Q4 2020 GAAP revenue was $571.0 million, a 24% increase year-over-year, with a GAAP EPS of $0.94.

What is TTEC's revenue outlook for 2021?

TTEC anticipates revenue between $2.147 and $2.183 billion for 2021, reflecting an increase of 10.2% to 12%.

How did TTEC perform in 2020 compared to 2019?

In 2020, TTEC's GAAP revenue increased by 18.6% while GAAP income from operations rose to $204.7 million.

What is TTEC's Non-GAAP earnings per share for 2020?

TTEC's Non-GAAP EPS for 2020 was $3.82, up from $2.25 in 2019.

What were TTEC's total bookings in 2020?

TTEC signed approximately $659 million in annualized contract value in 2020, compared to $487 million in 2019.

TTEC Holdings, Inc.

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