TTEC Holdings Inc (TTEC) Reports Modest Revenue Growth Amidst Economic Headwinds
Full Year 2023 Revenue: $2.463 billion, a 0.8% increase from the previous year.
Operating Income: Reported at $118.0 million, or 4.8% of revenue; $200.4 million non-GAAP, or 8.1% of revenue.
Net Income: Stood at $18.3 million, or 0.7% of revenue; $103.2 million non-GAAP, or 4.2% of revenue.
Adjusted EBITDA: Reached $271.5 million, representing 11.0% of revenue.
Earnings Per Share (EPS): Fully diluted EPS was $0.39; non-GAAP EPS was $2.18.
Fourth Quarter 2023 Revenue: Declined by 4.9% to $626.2 million.
2024 Outlook: Anticipates reduced revenue and margin outlook compared to 2023.
On March 1, 2024, TTEC Holdings Inc (NASDAQ:TTEC), a leading global provider of customer engagement management tools and services, released its 8-K filing, detailing the financial results for the fourth quarter and full year ended December 31, 2023. TTEC operates through two segments, TTEC Digital and TTEC Engage, with the latter contributing the majority of the company's revenue, primarily from the United States and Canada.
Yearly Performance and Challenges
The company reported a slight increase in full-year revenue to $2.463 billion, up 0.8 percent from the previous year. However, net income was significantly lower at $18.3 million, or 0.7 percent of revenue. The adjusted EBITDA for the year was $271.5 million, or 11.0 percent of revenue. The fully diluted EPS was reported at $0.39, with a non-GAAP EPS of $2.18.
Despite these figures, TTEC faced challenges in 2023 due to macroeconomic factors that created a conservative business environment, leading to delayed client contracting decisions and lowered forecasts. These factors have moderated the results and are expected to carry forward into 2024, particularly impacting the TTEC Engage segment. The company also experienced the discontinuation of a line of business from a long-tenured client, which will affect the top and bottom line in 2024.
Financial Tables and Analysis
The company's balance sheet shows a healthy cash and cash equivalents position of $172.7 million as of December 31, 2023. Total assets stood at $2.185 billion, with total equity at $615.5 million. The income statement reflects the challenges faced in the fourth quarter, with a 4.9 percent decline in revenue and a net loss of $8.2 million.
Ken Tuchman, chairman and chief executive officer of TTEC, commented on the results:
As we have previously communicated, 2023 was a dynamic year for TTEC. The macroeconomic factors created a conservative and uncertain business environment that delayed client contracting decisions and lowered forecasts for certain clients in the second half of the year. While these factors moderated our results, we continued to make progress diversifying our business by growing our client base, completing a strategic phase of our geographic expansion, and expanding our AI-enabled solutions.
For 2024, TTEC anticipates a reduction in revenue and margin outlook compared to 2023. The company is focused on growth and margin improvement initiatives and is confident in its digital transformation services, which continue to be a top priority for clients.
Value investors may find TTEC's commitment to margin optimization initiatives and the expansion of its offshore footprint appealing, as these strategies could position the company for a stronger performance as it exits 2024. The board's decision to reduce the dividend to align with industry yields also reflects a strategic shift towards investing in growth and reducing debt associated with strategic acquisitions.
For a detailed analysis of TTEC Holdings Inc's financials and strategic outlook, investors are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from TTEC Holdings Inc for further details.
This article first appeared on GuruFocus.
