TTEC (TTEC) investor relations material

Executive summary

• Q1 2026 revenue was $496.2 million, down 7.1% year-over-year, with 20.5% from Digital and 79.5% from Engage segments; adjusted EBITDA was $45.8 million (9.2% margin), and free cash flow was $21.1 million, reflecting focus on operational efficiency and balance sheet strength.

• EBITDA was impacted by a delayed $3 million receivable from a large public sector project, expected to be recognized in Q2, which would have raised Q1 EBITDA to $49 million (9.7% margin).

• The company serves about 750 clients across 21 countries and 50 languages, with 47,200 employees and 3,000 CX professionals and engineers.

• AI strategy is central, focusing on client transformation, human augmentation, and operational excellence, with new proprietary platforms like AI Gateway accelerating integration and deployment.

• Management reaffirmed full-year 2026 guidance, expecting profitability to improve as the year progresses due to offshore expansion, client rationalization, and AI-driven efficiencies.

Financial highlights

• Q1 2026 revenue decreased by $38.1 million (7.1%) year-over-year to $496.2 million, including a $7.8 million positive FX impact; adjusted EBITDA fell to $45.8 million from $56.4 million.

• Operating income was $18.5 million (3.7% margin) versus $24.2 million (4.5% margin) prior year; EPS was $(0.16) compared to $0.03.

• Free cash flow improved to $21.1 million from $16.2 million; net debt reduced by $79 million year-over-year to $802.7 million.

• Non-GAAP EPS was $0.15, down from $0.28; non-GAAP income from operations was $31.7 million (6.4% margin), down from $41.5 million (7.8% margin).

• Cash and cash equivalents were $88.7 million at March 31, 2026.

Outlook and guidance

• Full-year 2026 guidance is reiterated, with a revenue midpoint of $2,030 million, adjusted EBITDA midpoint of $230 million (11.3% margin), and non-GAAP EPS midpoint of $1.19.

• Engage is expected to return to profitable growth in Q2 and margin expansion in the second half.

• Digital segment is positioned for growth through new AI, data, and security partnerships, despite short-term revenue timing variability.

• Management expects profitability improvements in both segments for the remainder of the year.

• FY 2026 capex guidance (midpoint): $40 million, representing 1.9% of revenue.