TeleTech to Remould as a SaaS Firm

Zacks Equity Research

TeleTech Holdings (TTEC) had primarily been a call center company operating in the customer service field for many years. However, it has now decided to become a Software-as-a-Service (SaaS) company. TeleTech has already built a technology-enabled service platform that includes all the elements of social media, mobile, analytics and cloud services.

The company is likely to witness more growth from its SaaS business and expects higher revenues and margins. Going forward, SaaS revenues are expected to grow 50% this year and SaaS business margins over 40%. TeleTech's balance sheet is financially very strong to fund acquisitions and to further grow its SaaS platform. The company aims to enhance its leadership position, create analytic-driven solutions as well as expand its geographic footprint and leverage its capital resources in the long run.

TeleTech’s revenues have grown from $183 million in 1996 to $1.17 billion last year. This represents a CAGR of 12.3%. About 21% of its revenues came from its customer-centric strategy and growth or technology-based services. The balance came from its traditional customer management services.

TeleTech is a leading global provider of data-driven, technology-enabled services that puts customer engagement at the core of business success. The company offers an integrated platform that combines analytics, strategy, process, systems integration, technology and operations to simplify the delivery of customer experience for global clients and their customers. The company aims to enter into long-term relationships with its clients, which provides for a steady revenue stream.

TeleTech currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include R.R. Donnelley & Sons Company (RRD), Automatic Data Processing, Inc (ADP) and Paychex, Inc. (PAYX). All these stocks carry a Zacks Rank #2 (Buy).
 

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