4 unchanged sentences
(Amounts in thousands, except share amounts)
−Removed: September 30,
Current assets
Cash and cash equivalents
−Removed: Accounts receivable, net of allowance of $ 2,502 and $ 3,524
+Added: Accounts receivable, net of allowance of $ 2,065 and $ 2,248 , respectively
Prepaids and other current assets
6 unchanged sentences
Other intangible assets, net
−Removed: Other long-term assets
Income and other tax receivables, long-term
+Added: Other long-term assets
Total long-term assets
−Removed: LIABILITIES, STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY
+Added: LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
16 unchanged sentences
Commitments and contingencies (Note 10)
−Removed: Redeemable noncontrolling interest
Stockholders’ equity
2 unchanged sentences
10,000,000 shares authorized;
−Removed: zero shares outstanding as of September 30, 2023 and December 31, 2022
+Added: zero shares outstanding as of March 31, 2024 and December 31, 2023
Common stock;
1 unchanged sentence
150,000,000 shares authorized;
−Removed: 47,418,697 and 47,224,074 shares outstanding as of September 30, 2023 and December 31, 2022, respectively
+Added: 47,447,289 and 47,427,200 shares outstanding as of March 31, 2024 and December 31, 2023, respectively
Additional paid-in capital
Treasury stock at cost:
−Removed: 34,633,556 and 34,828,179 shares as of September 30, 2023 and December 31, 2022, respectively
+Added: 34,604,964 and 34,625,053 shares as of March 31, 2024 and December 31, 2023, respectively
Accumulated other comprehensive income (loss)
2 unchanged sentences
Total stockholders’ equity
−Removed: Total liabilities, stockholders’ equity and mezzanine equity
+Added: Total liabilities and stockholders’ equity
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
(Amounts in thousands, except per share amounts)
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
Operating expenses
13 unchanged sentences
Provision for income taxes
−Removed: Net income attributable to noncontrolling interest
−Removed: Net income (loss) attributable to TTEC stockholders
+Added: Net income (loss) attributable to noncontrolling interest
+Added: Net (loss) income attributable to TTEC stockholders
Other comprehensive income (loss)
6 unchanged sentences
Comprehensive income attributable to noncontrolling interest
−Removed: Comprehensive income (loss) attributable to TTEC stockholders
+Added: Comprehensive (loss) income attributable to TTEC stockholders
Weighted average shares outstanding
−Removed: Net income (loss) per share attributable to TTEC stockholders
+Added: Net (loss) income per share attributable to TTEC stockholders
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
(Amounts in thousands)
−Removed: Three months ended September 30, 2022 and 2023
−Removed: Stockholders’ Equity of the Company
−Removed: Comprehensive
−Removed: Noncontrolling
−Removed: Paid-in Capital
−Removed: Income (Loss)
−Removed: Balance as of June 30, 2022
−Removed: Dividends to shareholders ($ 0.52 per common share)
−Removed: Dividends distributed to noncontrolling interest
−Removed: Foreign currency translation adjustments
−Removed: Derivatives valuation, net of tax
−Removed: Vesting of restricted stock units
−Removed: Equity-based compensation expense
−Removed: Other, net of tax
−Removed: Balance as of September 30, 2022
−Removed: Stockholders’ Equity of the Company
−Removed: Comprehensive
−Removed: Noncontrolling
−Removed: Paid-in Capital
−Removed: Income (Loss)
−Removed: Balance as of June 30, 2023
−Removed: Dividends to shareholders ($ 0.52 per common share)
−Removed: Dividends distributed to noncontrolling interest
−Removed: Foreign currency translation adjustments
−Removed: Derivatives valuation, net of tax
−Removed: Vesting of restricted stock units
−Removed: Equity-based compensation expense
−Removed: Other, net of tax
−Removed: Balance as of September 30, 2023
−Removed: Nine months ended September 30, 2022 and 2023
+Added: Three months ended March 31, 2023 and 2024
Stockholders’ Equity of the Company
4 unchanged sentences
Balance as of December 31, 2022
+Added: Noncontrolling interest adjustment due to buyout
Dividends to shareholders ($ 0.52 per common share)
+Added: Buyout of noncontrolling interest
Dividends distributed to noncontrolling interest
4 unchanged sentences
Other, net of tax
−Removed: Balance as of September 30, 2022
+Added: Balance as of March 31, 2023
Stockholders’ Equity of the Company
5 unchanged sentences
Noncontrolling interest adjustment due to buyout
+Added: Net (loss) income
Dividends to shareholders ($ 0.06 per common share)
−Removed: Buyout of noncontrolling interest
Dividends distributed to noncontrolling interest
4 unchanged sentences
Other, net of tax
−Removed: Balance as of September 30, 2023
+Added: Balance as of March 31, 2024
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
(Amounts in thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Cash flows from operating activities
6 unchanged sentences
Loss on disposal of assets
−Removed: Loss on dissolution of subsidiary
Impairment losses
+Added: Loss on dissolution of subsidiary
Deferred income taxes
1 unchanged sentence
Equity-based compensation expense
−Removed: Loss on foreign currency derivatives
+Added: Loss (gain) on foreign currency derivatives
Changes in assets and liabilities, net of acquisitions:
3 unchanged sentences
Deferred revenue and other liabilities
−Removed: Net cash provided by operating activities
+Added: Net cash (used in) provided by operating activities
Cash flows from investing activities
1 unchanged sentence
Purchases of property, plant and equipment, net of acquisitions
−Removed: Acquisitions, net of cash acquired of zero and zero , respectively
Net cash used in investing activities
Cash flows from financing activities
−Removed: Proceeds from/(repayments of) line of credit, net
+Added: Net proceeds (borrowings) from line of credit
Payments on other debt
1 unchanged sentence
Dividends paid to shareholders
+Added: Payments of debt issuance costs
Payments to noncontrolling interest
Tax payments related to issuance of restricted stock units
−Removed: Net cash (used in)/provided by financing activities
+Added: Net cash used in financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
−Removed: (Decrease)/increase in cash, cash equivalents and restricted cash
+Added: Decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
13 unchanged sentences
Summary of Business
−Removed: TTEC Holdings, Inc.
+Added: Founded in 1983, TTEC Holdings, Inc.
(“TTEC”, “the Company”;
−Removed: pronounced “T-TEC”) is a leading global customer experience (“CX”) as a service (“CXaaS”) partner for many of the world’s most iconic companies, disruptive hypergrowth brands, and large public sector agencies.
−Removed: TTEC designs, builds, orchestrates, and delivers seamless digitally-enabled customer experiences that increase brand value, customer loyalty, revenue and profitability through personalized, outcome-based interactions.
−Removed: The Company helps clients improve their customer satisfaction while lowering their total cost to serve by combining innovative digital solutions with service capabilities that deliver a frictionless CX across numerous real-time digital and live interaction channels and different phases of the customer lifecycle.
−Removed: TTEC’s 64,400 employees serve clients in the automotive, communication, financial services, national/federal and state and local governments, healthcare, logistics, media and entertainment, e-tail/retail, technology, and travel and transportation industries via operations in the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Germany, Greece, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom.
+Added: pronounced “T-TEC”) is a global customer experience (“CX”) outsourcing partner for marquee and disruptive brands and public sector clients.
+Added: The Company designs, builds, and operates technology-enabled customer experiences across digital and live interaction channels to help clients increase customer loyalty, revenue, and profitability.
+Added: By combining digital solutions with data-driven service capabilities, the Company helps clients improve their customer satisfaction while lowering their total cost to serve.
+Added: As of March 31, 2024, TTEC served approximately 750 clients across targeted industry verticals including financial services, healthcare, public sector, telecom, technology, media, travel and hospitality, automotive and retail.
The Company operates and reports its financial results of operation through two business segments:
−Removed: TTEC Digital and TTEC Engage.
−Removed: ● TTEC Digital is one of the largest pure-play CX technology service providers with expertise in CX strategy, digitization, analytics, process optimization, system integration, cloud-based technology solutions, and transformation enabled by the Company’s proprietary CX applications and technology partnerships.
−Removed: TTEC Digital designs, builds, and operates robust digital experiences for clients and their customers through the contextual integration and orchestration of customer relationship management (“CRM”), data, analytics, CXaaS technology, and intelligent automation to ensure high-quality, scalable CX outcomes.
−Removed: ● TTEC Engage provides the digitally enabled CX managed services to support our clients’ end-to-end customer interaction delivery at scale.
−Removed: The segment delivers omnichannel customer care, technology support, order fulfillment, customer acquisition, growth, and retention services with industry specialization and distinctive CX capabilities for hypergrowth brands.
−Removed: TTEC Engage also delivers digitally enabled back office and industry specific specialty services including artificial intelligence (“AI”) operations, and fraud management services.
−Removed: TTEC Digital and TTEC Engage strategically come together under our unified offering, Humanify ® CXaaS, which drives measurable customer results for clients through the delivery of personalized and seamless, omnichannel experiences.
−Removed: Our Humanify ® cloud platform provides a fully integrated ecosystem of CX offerings including messaging, AI, machine learning, robotic process automation, analytics, cybersecurity, CRM, knowledge management, journey orchestration, and traditional voice solutions.
−Removed: Our end-to-end CXaaS platform differentiates us from competitors by combining design, strategic consulting, technology, data analytics, process optimization, system integration, and operational excellence along with our decades of industry know-how.
−Removed: This unified offering is value-oriented, outcome-based and delivered to large enterprises, hypergrowth companies and public sector agencies on a global scale.
+Added: • TTEC Digital is one of the largest CX technology providers and is focused exclusively on the intersection of Contact Center as a Service (CCaaS), Customer Relationship Management (CRM), and Artificial Intelligence (AI) and Analytics.
+Added: A professional services organization comprised of software engineers, systems architects, data scientists and CX strategists, this segment creates and implements strategic CX transformation roadmaps;
+Added: sells, operates, and provides managed services for cloud platforms and premise based CX technologies including Amazon Web Services (“AWS”), Cisco, Genesys, Google, and Microsoft;
+Added: and creates proprietary IP to support industry specific and custom client needs.
+Added: TTEC Digital serves clients across enterprise and small and medium sized business segments and has a dedicated unit with government technology certifications serving the public sector.
+Added: • TTEC Engage provides the digitally enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale.
+Added: Tailored to meet industry specific and business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, trust and safety and back-office solutions.
+Added: The segment’s technology-enabled delivery model covers the entire associate lifecycle including recruitment, onboarding, training, delivery, workforce management and quality assurance.
+Added: TTEC demonstrates its market leadership through strategic collaboration across TTEC Digital and TTEC Engage when there is client demand and fit for the Company’s integrated solutions.
+Added: This partnership is central to the Company’s ability to deliver comprehensive and transformational customer experience solutions to its clients, including integrated delivery, go-to-market and innovation for truly differentiated, market leading CX solutions.
+Added: During the first quarter of 2024, the combined TTEC Digital and TTEC Engage global operating platform delivered onshore, nearshore and offshore services in 22 countries on six continents – the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Egypt, Germany, Greece, Honduras, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom – with the help of approximately 58,000 customer care associates, consultants, technologists, and CX professionals.
Basis of Presentation
The Consolidated Financial Statements are comprised of the accounts of TTEC, its wholly owned subsidiaries, its 55 % equity owned subsidiary Percepta, LLC, its 70 % equity owned subsidiary First Call Resolution, LLC through March 31, 2023 and then 100 % owned subsequently, and its 70 % equity owned subsidiary Serendebyte, Inc.
−Removed: (see Note 2).
+Added: through December 31, 2023 and then 100 % owned subsequently (see Note 2).
All intercompany balances and transactions have been eliminated in consolidation.
15 unchanged sentences
The Consolidated Financial Statements for the three months ended June 30, 2023 included an adjustment of $ 14.2 million to other comprehensive income and deferred tax assets, to correct for an error identified by management during the preparation of the financial statements.
−Removed: This adjustment was to reflect the deferred tax impact of currency translation adjustments, of which $ 0.5 million related to the three months ended March 31, 2023, and the remaining $ 13.3 million related to prior annual fiscal periods.
+Added: This adjustment was to reflect the deferred tax impact of currency translation adjustments, of which $ 14.2 million related to prior annual fiscal periods.
Management has determined that this error was not material to the historical financial statements in any individual period or in the aggregate and did not result in the previously issued financial statements being materially misstated.
−Removed: The impact to the three and six month periods ended June 30, 2023 is not material.
+Added: The impact to the three and six month periods ended June 30, 2023 was not material.
As such, management recorded the correction as an out-of-period adjustment in the three months ended June 30, 2023.
3 unchanged sentences
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets that sum to the amounts reported in the Consolidated Statement of Cash Flows (in thousands):
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
Cash and cash equivalents
−Removed: Restricted cash included in "Prepaid and other current assets"
+Added: Restricted cash included in "Prepaid and other current assets"
TTEC HOLDINGS, INC.
8 unchanged sentences
Recently Adopted Accounting Pronouncements
−Removed: In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform” (Topic 848), which provides optional expedients and exceptions for contracts, hedging relationships, and other transactions affected by reference rate reform due to the anticipated cessation of the London Interbank Offered Rate (”LIBOR”).
+Added: In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “Reference Rate Reform” (Topic 848), which provides optional expedients and exceptions for contracts, hedging relationships, and other transactions affected by reference rate reform due to the anticipated cessation of the London Interbank Offered Rate (”LIBOR”).
The ASU is effective from March 12, 2020, may be applied prospectively and could impact the accounting for LIBOR provisions in the Company’s credit facility agreement.
1 unchanged sentence
The Company adopted the standard effective April 1, 2023 and the adoption of this guidance did not have a material impact on the Company’s financial position, results of operations or cash flows.
+Added: Other Accounting Pronouncements
+Added: In November 2023, the FASB issued ASU 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures” which relates to disclosures regarding a public entity’s reportable segments and provides more detailed information about a reportable segment’s expenses.
+Added: The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024, with retrospective application required.
+Added: The Company is assessing the effect on its annual consolidated financial statement disclosures;
+Added: however, adoption is not expected to have a material impact the Company’s financial statements.
+Added: In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” to enhance the transparency and decision usefulness of income tax disclosures.
+Added: The ASU is effective for fiscal years beginning after December 15, 2024, with retrospective application permitted.
+Added: The Company is assessing the effect on its annual consolidated financial statement disclosures;
+Added: however, adoption is not expected to have a material impact the Company’s consolidated balance sheets or income statements.
(2) ACQUISITIONS AND DIVESTITURES
+Added: In connection with the acquisition by TTEC Digital, LLC of a 70 % interest in Serendebyte Inc.
+Added: (“Serendebyte”), Serendebyte’s founder exercised his put rights on December 8, 2023, which required TTEC to acquire the remaining 30 % interest in Serendebyte.
+Added: As part of the exercise, the Serendebyte founder failed to fulfill the agreed provisions of the sale and purchase agreement that parties executed on February 7, 2020.
+Added: Pending completion of the put exercise formalities by Serendebyte’s founder, TTEC Digital is not able to determine the final purchase price for the remaining 30% buyout agreement.
+Added: In connection with triggering the option, on December 8, 2023, a $ 0.3 million accrual was reclassified from Redeemable noncontrolling interest to Accrued expenses and the remaining balance was reclassified to Additional paid in capital.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
Pursuant to the Membership Interest Purchase Agreement of October 26, 2019 between Ortana Holdings, Inc.
12 unchanged sentences
The Faneuil Transaction includes two contingent payments which were anticipated to be paid in early 2024 which are based on the revenue and EBITDA performance of one contract and one potential contract.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
The fair value of the two contingent payments was estimated using a Monte Carlo model.
2 unchanged sentences
Based on the model, a combined $ 8.8 million expected future payment was calculated and recorded as of the acquisition date.
−Removed: During the third quarter of 2022, a $ 2.4 million net gain was recorded related to fair value adjustments for the estimated contingent payments based on the timing of cash flows and market interest rates which resulted in an updated discount factor for one contract, and a complete reduction for the second contract as it was not awarded to the Company.
−Removed: During the fourth quarter of 2022, a $ 0.5 million net gain was recorded related to a fair value adjustment for the estimated contingent payment based on changes in estimated EBITDA and the timing of cash flows.
−Removed: During the first quarter of 2023, a $ 0.6 million net expense was recorded related to a fair value adjustment for the estimated contingent payment based on the timing of cash flows and market interest rate changes.
−Removed: During the second quarter of 2023, an amendment to the agreement was signed which modified the contingent payment for a minimum payment of $7.4 million and a maximum payment of $10.4 million.
−Removed: Based on this modification, an updated estimated EBITDA and the revised timing of cash flows, a $1.7 million expense was recorded as of June 30, 2023.
+Added: During 2022, a $ 2.9 million net gain was recorded related to fair value adjustments for the estimated contingent payments based on changes in estimated EBITDA, the timing of cash flows and market interest rates which resulted in an updated discount factor for one contract, and a complete reduction for the second contract as it was not awarded to the Company.
+Added: During the second quarter of 2023, an amendment to the agreement was signed which modified the contingent payment to a minimum payment of $ 7.4 million and a maximum payment of $ 10.4 million.
An initial payment of $ 7.4 million was completed in May 2023.
−Removed: During the third quarter of 2023, a $0.1 million net expense was recorded related to a fair value adjustment for the estimated contingent payment based on the timing of cash flows and market interest rate changes.
+Added: During 2023, a combined $ 3.0 million net expense was recorded related to fair value adjustments for the estimated contingent payment based on changes in estimated EBITDA, the timing of cash flows and market interest rate changes.
These benefits (expenses) were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: As of September 30, 2023, the contingent payment is accrued at $ 0.9 million and is included in Other long-term liabilities in the accompanying Consolidated Balance Sheets.
+Added: As of March 31, 2024, the contingent payment is accrued at $ 0.3 million and is included in Other long-term liabilities in the accompanying Consolidated Balance Sheets.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
The Faneuil Transaction included a call option providing the right but not the obligation to purchase additional assets in the utilities and commercial healthcare verticals based on trailing twelve-month revenue plus an additional earn-out payment based on newly added contracts.
A second call option provided the right to purchase a software intangible asset and related support functions based on trailing twelve-month revenue.
−Removed: These call options were valued based on information including the call right and the exclusivity period and a $ 270 thousand asset was recorded as of the acquisition date which is included in Other long-term assets in the accompanying Consolidated Balance Sheets.
+Added: These call options were valued based on information including the call right and the exclusivity period and a $ 270 thousand asset was recorded as of the acquisition date which was included in Other long-term assets in the Consolidated Balance Sheets.
During the fourth quarter of 2022 and the first quarter of 2023, reductions in fair value of $ 52 thousand and $ 140 thousand, respectively, were recorded due to changes in estimated revenue, which were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss).
During the second quarter of 2023, an amendment to the agreement was signed which cancelled the option to purchase the additional assets in certain verticals, and thus the remaining $ 78 thousand accrual was removed and included in Other income.
−Removed: As of September 30, 2023, the fair value is zero.
+Added: As of March 31, 2024, the fair value is zero.
The Faneuil Transaction included an indemnity escrow which was disbursed as a holdback payment on the acquisition date.
−Removed: The indemnity payments relate to real estate and technology funds that will be spent post-close related to various IT upgrades and real estate expenses, and indemnity related to potential future employee wage increases.
+Added: The indemnity payments related to real estate and technology funds that were spent post-close related to various IT upgrades and real estate expenses, and indemnity related to potential future employee wage increases.
The indemnity payments were valued based on a weighted average of several current scenarios and a receivable of $ 10.4 million was recorded as of the acquisition date.
3 unchanged sentences
The reductions in fair value related expenses were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss).
+Added: A multi-period excess earnings method under the income approach was used to estimate the fair value of the customer relationships intangible assets.
+Added: The significant assumptions utilized in calculating the fair value of the customer relationships intangible assets were the customer attrition rate, revenue growth rates, forecasted EBITDA, contributory asset charge, and the discount rate.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: A multi-period excess earnings method under the income approach was used to estimate the fair value of the customer relationships intangible assets.
−Removed: The significant assumptions utilized in calculating the fair value of the customer relationships intangible assets were the customer attrition rate, revenue growth rates, forecasted EBITDA, contributory asset charge, and the discount rate.
The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
17 unchanged sentences
The acquired goodwill and intangibles and operating results of Faneuil are reported within the TTEC Engage segment from the date of acquisition.
−Removed: Financial Impact of Acquired Businesses
−Removed: The acquired business purchased in 2022 noted above contributed revenues of $ 45.3 million and net income of $ 0.4 million to the Company for the three months ended September 30, 2023, and revenues of $ 138.2 million and net income of $ 4.3 million to the Company for the nine months ended September 30, 2023.
−Removed: The unaudited proforma financial results for the three and nine months ended September 30, 2022 combines the consolidated results of the Company and Faneuil assuming the acquisition had been completed on January 1, 2021.
−Removed: The reported revenue and net income of $ 592.5 million and $ 22.2 million would have been $ 592.5 million and $ 22.2 million for the three months ended September 30, 2022, respectively, on an unaudited proforma basis.
−Removed: The reported revenue and net income of $ 1,785.4 million and $ 80.9 million would have been $ 1,827.4 million and $ 84.3 million for the nine months ended September 30, 2022, respectively, on an unaudited proforma basis.
+Added: (3) SEGMENT INFORMATION
+Added: The Company reports the following two segments:
+Added: TTEC Digital and the CX Technology Services Industry
+Added: TTEC Digital buyers are seeking solutions in several areas including cost optimization, migration from outdated legacy platforms to more agile cloud environments, lack of CX talent and expertise and a need for a practical way forward with AI.
+Added: TTEC Digital takes a technology agnostic approach to these challenges and focuses on designing and delivering solutions specific to each client’s specifications.
+Added: TTEC Digital has entered into strategic partnerships with the leading CX software vendors including Genesys, Microsoft, Cisco, AWS and Google which positions TTEC Digital to support the majority of CX platform requirements.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: The Company did not have any material, nonrecurring proforma adjustments directly attributable to the business combination included in the reported proforma revenue earnings.
−Removed: These proforma amounts have been calculated after applying the Company’s accounting policies and adjusting the acquired business results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from the date indicated, with the consequential tax effects.
−Removed: The unaudited proforma consolidated results are not to be considered indicative of the results if the acquisition occurred in the periods mentioned above, or indicative of future operations or results.
−Removed: Additionally, the proforma consolidated results do not reflect any anticipated synergies expected as a result of the acquisition.
−Removed: (3) SEGMENT INFORMATION
−Removed: The Company reports the following two segments:
−Removed: TTEC Digital is one of the largest pure-play CX technology service providers with expertise in CX strategy, digitization, analytics, process optimization, systems integration, cloud-based technology solutions, and transformation enabled by the Company’s proprietary CX applications and technology partnerships.
−Removed: TTEC Digital designs, builds, and operates robust digital experiences for clients and their customers through the contextual integration and orchestration of CRM, data, analytics, CXaaS technology, and intelligent automation to ensure high-quality, scalable CX outcomes.
−Removed: ● Technology Services:
−Removed: The technology services design, build, and operate highly scalable, digital omnichannel technology solutions in the cloud, on premise, or hybrid environment, including journey orchestration, automation and AI, knowledge management, and workforce productivity, among others.
+Added: TTEC Digital’s solutions are built to respond to market needs for both enterprise and small and medium-sized business clients.
+Added: AI design and delivery capabilities are woven across all four of the following pillars.
• Professional Services:
−Removed: The management consulting practices deliver customer experience strategy, analytics, process optimization, and system integration, among others.
−Removed: TTEC Engage provides the digitally enabled CX managed services to support our clients’ end-to-end customer interaction delivery at scale.
−Removed: The segment delivers omnichannel customer care, technology support, order fulfillment, customer acquisition, growth, and retention services with industry specialization and distinctive CX capabilities for hypergrowth brands.
−Removed: TTEC Engage also delivers digitally enabled back office and industry specific specialty services including AI operations, and fraud management services.
−Removed: ● Customer Acquisition, Growth, and Retention Services:
−Removed: The customer growth and acquisition services optimize the buying journeys for acquiring new customers by leveraging technology and analytics to deliver personal experiences that we believe increase the quantity and quality of leads and customers.
−Removed: ● Customer Care, Technology Support, and Order Fulfillment Services:
−Removed: The customer care, technology support, and order fulfillment services provide turnkey contact center solutions, including digital omnichannel technologies, associate recruiting and training, facilities, and operational expertise to create exceptional customer experiences across all touchpoints.
−Removed: ● Digitally Enabled Back Office and Specialty Services:
−Removed: The digital AI operations and fraud detection and prevention services provide clients with data tagging and annotation capabilities to train and enable AI platforms, community content moderation, and compliance to meet client content standards, and proactive fraud solutions to assist our clients in the detection and prevention of fraud.
+Added: CX and AI solution planning, design, and implementation services
+Added: • Managed Services:
+Added: Cloud application and premise support
+Added: • CX Consulting, Analytics and AI:
+Added: Transformation strategy and design, data science, engineering, and visualization
+Added: • IP & Software:
+Added: Custom software engineering through TTEC Digital’s IP and Software division
+Added: The segment has a three-pronged go to market strategy that includes growing existing client relationships, partner channel motions and general market development.
+Added: In 2023, TTEC Digital expanded its Hyderabad Innovation Studio in India with the goal of continuing to expand its offshore delivery capabilities, and currently approximately 40% of the staff are located in one of several offshore locations.
+Added: TTEC Engage and the CX Business Process Outsourcing Services Industry
+Added: The TTEC Engage segment’s solutions are built to respond to the following market needs for clients.
+Added: • Customer Support
+Added: • Tech Support
+Added: • Revenue Generation and Growth Services
+Added: • Trust & Safety
+Added: • AI Operations, including data annotation and labeling
+Added: • Back-office Support
+Added: TTEC Engage goes to market through a vertical approach with customized solutions that include industry specific talent, technology, certifications, and capabilities.
+Added: For example, in the Banking, Financial Services and Insurance (BFSI) vertical, we support several lines of business with customized offerings for retail banking, online banking, credit card, property and casualty and loans.
+Added: In healthcare, the segment supports care, technical support, revenue generation and back-office capabilities to meet the needs of payer, provider, clinical and pharma clients.
The Company allocates to each segment its portion of corporate operating expenses.
All intercompany transactions between the reported segments for the periods presented have been eliminated.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Effective January 1, 2023, the Company completed a small reorganization of the internal reporting structure and one component from the TTEC Digital segment was reclassified and will now be included in the TTEC Engage segment.
−Removed: All balances have been recast for 2022 to conform to the updated segment presentation.
The following tables present certain financial data by segment (in thousands):
−Removed: Three Months Ended September 30, 2023
−Removed: Three Months Ended September 30, 2022
−Removed: Nine months Ended September 30, 2023
−Removed: Nine Months Ended September 30, 2022
+Added: Three Months Ended March 31, 2024
+Added: Three Months Ended March 31, 2023
TTEC HOLDINGS, INC.
2 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Capital Expenditures
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
The following table presents revenue based upon the geographic location where the services are provided (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
United States / Canada
3 unchanged sentences
(4) SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS
−Removed: The Company had one client that contributed in excess of 10% of total revenue for the nine months ended September 30, 2023;
+Added: The Company had one client that contributed in excess of 10% of total revenue for the three months ended March 31, 2024;
this client operates in the automotive industry and is included in the TTEC Engage segment.
−Removed: This client contributed 10.1 % and 10.5 % of total revenue for the nine months ended September 30, 2023 and 2022, respectively.
+Added: This client contributed 10.8 % and 10.0 % of total revenue for the three months ended March 31, 2024 and 2023, respectively.
In addition, the Company has other clients with aggregate revenue exceeding $ 100 million annually and the loss of one or more of these clients could have a material adverse effect on the Company’s business, operating results, or financial condition.
1 unchanged sentence
each of these contracts have different durations and renewal dates and a revenue opportunity below the $100 million aggregate.
+Added: In the first quarter of 2024, one of our larger financial services clients notified us that it is exiting one of the lines of business that we support.
To limit the Company’s credit risk with its clients, management performs periodic credit evaluations, maintains allowances for credit losses and may require pre-payment for services from certain clients whose financial stability or payment practices raise concern.
−Removed: Based on currently available information, management does not believe significant credit risk existed as of September 30, 2023.
+Added: Based on currently available information, management does not believe significant credit risk existed as of March 31, 2024.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
Activity in the Company’s Allowance for credit losses consists of the following (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
−Removed: Balance, beginning of period
+Added: Three Months Ended March 31,
+Added: Balance, beginning of year
Provision for credit losses
1 unchanged sentence
Effect of foreign currency
−Removed: Balance, end of period
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Balance, end of year
Accounts Receivable Factoring Agreement
The Company is party to an Uncommitted Receivables Purchase Agreement (“Agreement”) with BMO Bank, N.A.
−Removed: (“Bank”), whereby from time-to-time the Company may elect to sell, on a revolving basis, U.S.
+Added: (“Bank”, or “BMO”), whereby from time-to-time the Company may elect to sell, on a revolving basis, U.S.
accounts receivables of certain clients at a discount to the Bank for cash on a limited recourse basis.
5 unchanged sentences
The balances related to the Agreement are as follows (in thousands):
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
2 unchanged sentences
The unremitted cash is restricted cash and is included within Prepaid and other current assets with the corresponding liability included in Accrued expenses on the Consolidated Balance Sheet.
−Removed: The Company has not recorded any servicing assets or liabilities as of September 30, 2023 as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.
−Removed: Effective November 1, 2022, the Company amended the arrangement to modify the list of eligible clients whose accounts receivable may be sold pursuant to the Agreement, and to memorialize the transition from LIBOR to SOFR for discount calculation purposes.
−Removed: On July 21, 2023, BMO Financial Group completed its acquisition of the Bank from PNB Bank Paribas.
−Removed: The Agreement transitioned with the acquisition and TTEC has no reason to believe that the new owner of the Bank would not wish to continue its business arrangements with the Company.
+Added: The Company has not recorded any servicing assets or liabilities as of March 31, 2024 as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.
+Added: On July 21, 2023, BMO Financial Group completed its acquisition of Bank of the West from PNB Bank Paribas.
+Added: The Agreement transitioned with the acquisition.
+Added: On January 2, 2024, the Company amended the arrangement to adjust the discount rate to reflect BMO’s updated market pricing levels and other minor items.
Goodwill consisted of the following (in thousands):
Acquisitions /
−Removed: September 30,
−Removed: The Company performs a goodwill impairment assessment on at least an annual basis.
−Removed: The Company conducts its annual goodwill impairment assessment during the fourth quarter, or more frequently, if indicators of impairment exist.
−Removed: During the quarter ended September 30, 2023, the Company assessed whether any such indicators of impairment existed and concluded there were none.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: Effective January 1, 2023, the Company completed a small reorganization of the internal reporting structure and one component from the TTEC Digital segment was reclassified and will now be included in the TTEC Engage segment.
−Removed: Given the modification in reporting units, the Company conducted an impairment test before and after the change, and it was concluded that the fair value of the reporting units exceeded the carrying value on both testing dates.
−Removed: With the change in reporting units, the Company performed a relative fair value valuation calculation to allocate a portion of the Company’s historical goodwill to this specific component, which was then reallocated from the TTEC Digital segment to the TTEC Engage segment.
+Added: The Company performs a goodwill impairment assessment on at least an annual basis.
+Added: The Company conducts its annual goodwill impairment assessment during the fourth quarter, or more frequently, if indicators of impairment exist.
+Added: During the Company’s annual impairment testing as of December 1, 2023, the Company identified one reporting unit, Engage, being at risk for future impairment if projected operating results are not met or other inputs into the fair value measurement change.
+Added: The carrying value of Engage was $ 1,092.1 million at December 1, 2023, including approximately $ 308.4 million of goodwill.
+Added: Based on the Company’s assessment, the estimated fair value of the Engage reporting unit exceeded its carrying value by approximately 13.0 %.
+Added: If all assumptions are held constant, either a 1.7% increase in the discount rate or a 2.0% annual decrease in the projected revenue over the forecast period , would result in approximately $ 138.0 million decrease in the estimated fair value of the Engage reporting unit.
+Added: Such a change in either of these assumptions individually would have resulted in the Engage reporting unit failing Step 1 of the goodwill impairment analysis on December 1, 2023.
+Added: As an international outsourcing agent, Engage’s revenue and cash flows are susceptible to global economic conditions and client business volumes.
+Added: In performing the Step 1 evaluation, the reporting unit’s current backlog and pipeline of customer business were considered, as well as inflation rates, gross domestic product rates, historical revenue growth and profitability, and state of the CX industry.
+Added: The estimate of fair value was based on generally accepted valuation techniques and information available at the date of the assessment, which incorporated management’s assumptions about expected revenues, future cash flows and available market information for comparable companies.
+Added: Outside of our annual impairment testing process, the Company monitors its reporting units for any triggering events while also performing qualitative assessments of impairment indicators.
+Added: During the first quarter of 2024, the Company concluded there were no triggering events and completed its qualitative assessment of impairment indicators, which included, among other things, an assessment of changes in macroeconomic conditions, comparison of the actual results to those forecasted in the most recent annual impairment test and performing sensitivity analysis on key assumptions.
(6) DERIVATIVES
5 unchanged sentences
Conversely, the fair value of derivative liabilities reflects the Company’s creditworthiness.
−Removed: As of September 30, 2023, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults.
−Removed: The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022 (in thousands and net of tax):
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
+Added: As of March 31, 2024, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults.
+Added: The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 (in thousands and net of tax):
+Added: Three Months Ended March 31,
Aggregate unrealized net gain/(loss) at beginning of period
2 unchanged sentences
Aggregate unrealized net gain/(loss) at end of period
−Removed: The Company’s foreign exchange cash flow hedging instruments as of September 30, 2023 and December 31, 2022 are summarized as follows (amounts in thousands).
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
+Added: The Company’s foreign exchange cash flow hedging instruments as of March 31, 2024 and December 31, 2023 are summarized as follows (amounts in thousands).
All hedging instruments are forward contracts.
−Removed: As of September 30, 2023
+Added: As of March 31, 2024
Canadian Dollar
1 unchanged sentence
Philippine Peso
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: December 2026
+Added: December 2026
As of December 31, 2023
2 unchanged sentences
(1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S.
−Removed: dollars on September 30, 2023 and December 31, 2022.
+Added: dollars on March 31, 2024 and December 31, 2023.
Fair Value Hedges
1 unchanged sentence
Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings in Other income (expense), net.
−Removed: As of September 30, 2023 and December 31, 2022 the total notional amounts of the Company’s forward contracts used as fair value hedges were $ 76.4 million and $ 80.8 million, respectively.
+Added: As of March 31, 2024 and December 31, 2023 the total notional amounts of the Company’s forward contracts used as fair value hedges were $ 46.6 million and $ 73.3 million, respectively.
Derivative Valuation and Settlements
−Removed: The Company’s derivatives as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
−Removed: September 30, 2023
+Added: The Company’s derivatives as of March 31, 2024 and December 31, 2023 were as follows (in thousands):
+Added: March 31, 2024
Not Designated
20 unchanged sentences
Total fair value of derivatives, net
−Removed: The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30, 2023 and 2022 were as follows (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Designated as Hedging
−Removed: Derivative contract type:
−Removed: Foreign Exchange
−Removed: Derivative classification:
−Removed: Amount of gain or (loss) recognized in Other comprehensive income (loss) - effective portion, net of tax
−Removed: Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion:
−Removed: Three Months Ended September 30,
−Removed: Not Designated as Hedging Instruments
−Removed: Derivative contract type:
−Removed: Foreign Exchange
−Removed: Derivative classification:
−Removed: Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income (Loss):
−Removed: Other income (expense), net
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2023 and 2022 were as follows (in thousands):
−Removed: Nine Months Ended September 30,
+Added: The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023 were as follows (in thousands):
+Added: Three Months Ended March 31,
Designated as Hedging
4 unchanged sentences
Amount and location of net (gain) or loss reclassified from Accumulated OCI to income - effective portion:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Not Designated as Hedging Instruments
8 unchanged sentences
The three levels of inputs used to measure fair value are as follows:
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
Level 1 — Quoted prices in active markets for identical assets or liabilities.
2 unchanged sentences
This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
−Removed: The following presents information as of September 30, 2023 and December 31, 2022 for the Company’s assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.
+Added: The following presents information as of March 31, 2024 and December 31, 2023 for the Company’s assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.
Accounts Receivable and Payable - The amounts recorded in the accompanying balance sheets approximate fair value because of their short-term nature.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
Investments – The Company measures investments, including cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired.
2 unchanged sentences
Debt - The Company’s debt consists primarily of the Company’s Credit Facility, which permits floating-rate borrowings based upon the current Prime Rate or SOFR plus a credit spread as determined by the Company’s leverage ratio calculation (as defined in the Credit Agreement).
−Removed: As of September 30, 2023 and December 31, 2022, the Company had $964.0 million and $ 960.0 million, respectively, of borrowings outstanding under the Credit Facility.
−Removed: During the third quarter of 2023 outstanding borrowings accrued interest at an average rate of 6.9 % per annum, excluding unused commitment fees.
+Added: As of March 31, 2024 and December 31, 2023, the Company had $ 953.0 million and $ 995.0 million, respectively, of borrowings outstanding under the Credit Facility.
+Added: During the first quarter of 2024 outstanding borrowings accrued interest at an average rate of 7.1 % per annum, excluding unused commitment fees.
The amounts recorded in the accompanying Balance Sheets approximate fair value due to the variable nature of the debt based on Level 2 inputs.
1 unchanged sentence
The portfolio is valued using models based on market observable inputs, including both forward and spot foreign exchange rates, interest rates, implied volatility, and counterparty credit risk, including the ability of each party to execute its obligations under the contract.
−Removed: As of September 30, 2023, credit risk did not materially change the fair value of the Company’s derivative contracts.
−Removed: The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of September 30, 2023 and December 31, 2022 (in thousands):
−Removed: As of September 30, 2023
+Added: As of March 31, 2024, credit risk did not materially change the fair value of the Company’s derivative contracts.
+Added: The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of March 31, 2024 and December 31, 2023 (in thousands):
+Added: As of March 31, 2024
Fair Value Measurements Using
6 unchanged sentences
Total net derivative asset (liability)
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
As of December 31, 2023
7 unchanged sentences
Total net derivative asset (liability)
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The following is a summary of the Company’s fair value measurements as of September 30, 2023 and December 31, 2022 (in thousands):
−Removed: As of September 30, 2023
+Added: The following is a summary of the Company’s fair value measurements as of March 31, 2024 and December 31, 2023 (in thousands):
+Added: As of March 31, 2024
Fair Value Measurements Using
6 unchanged sentences
Deferred compensation plan asset
−Removed: Contingent consideration
Derivative instruments, net
1 unchanged sentence
Total liabilities
−Removed: Redeemable noncontrolling interest
As of December 31, 2023
7 unchanged sentences
Deferred compensation plan asset
−Removed: Contingent consideration
Derivative instruments, net
1 unchanged sentence
Total liabilities
−Removed: Redeemable noncontrolling interest
−Removed: Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan structured as a Rabbi trust for certain eligible employees.
−Removed: The plan assets are invested in a variety of equity and bond mutual funds.
+Added: Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan for certain eligible employees.
The deferred compensation asset represents the combined fair value of all the funds based on quoted values and market observable inputs.
+Added: All amounts deferred under the Plan are unfunded, unsecured obligations of the Company.
+Added: The Company manages the risk of the changes in the fair value of the liability for deferred compensation by electing to match its liability under the Plan with investment vehicles that offset a portion of its exposure including a Company owned life insurance policy held in a rabbi trust.
TTEC HOLDINGS, INC.
5 unchanged sentences
The Company records interest expense each period using the effective interest method until the future value of these contingent payments reaches the expected total future value.
−Removed: During the third and fourth quarters of 2022, and the first, second and third quarters of 2023, fair value adjustments of a $ 2.4 million benefit, a $ 0.5 million benefit, $ 0.6 million expense, $ 1.7 million expense and $ 0.1 million expense, respectively, were recorded related to fair value adjustments of the estimated contingent payments associated with the Faneuil acquisition based on updated discount factors, the passage of time, updated EBITDA estimates and a modification to the agreement (see Note 2) for one contract, and a complete reduction for the second contract as it was not awarded to the Company.
+Added: During 2022 and 2023, fair value adjustments of a $ 2.9 million benefit and a $ 3.0 million expense, respectively, were recorded related to fair value adjustments of the estimated contingent payments associated with the Faneuil acquisition based on updated discount factors, the passage of time, updated EBITDA estimates and a modification to the agreement (see Note 2) for one contract, and a complete reduction for the second contract as it was not awarded to the Company.
+Added: During 2024, a fair value adjustment of a $1.2 million benefit, was recorded related to fair value adjustments of the estimated contingent payments associated with the Faneuil acquisition based on updated discount factors, the passage of time, and updated EBITDA estimates.
The fair value adjustment benefits(expenses) were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: Contingent Receivables – The Company recorded a contingent receivable related to the Faneuil acquisition.
−Removed: During the third and fourth quarters of 2022, and the first and second quarters of 2023, the Company recorded fair value adjustments for the receivable based on current information which caused the receivable to decrease, and a $ 4.4 million expense, a $ 0.2 million expense, a $ 2.5 million expense, and a $ 1.9 million expense, respectively, were included in Other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).
A rollforward of the activity in the Company’s fair value of the contingent consideration payable is as follows (in thousands):
−Removed: September 30,
−Removed: A rollforward of the activity in the Company’s fair value of the contingent consideration receivable is as follows (in thousands):
−Removed: September 30,
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
(8) IMPAIRMENT OF ASSETS
−Removed: During each of the periods presented, the Company evaluated the recoverability of its leasehold improvement assets at certain customer engagement centers, building and land assets, as well as all internally developed software projects.
+Added: The Company evaluated the recoverability of its leasehold improvement assets at certain customer engagement centers, building and land assets, as well as all internally developed software projects.
An asset group is considered to be impaired when the anticipated undiscounted future cash flows of its asset group is estimated to be less than the asset group’s carrying value.
2 unchanged sentences
Assumptions included the amount and timing of estimated future cash flows and assumed discount rates.
−Removed: During the three and nine months ended September 30, 2023, the Company recognized impairment losses, net related to leasehold improvements assets, right of use lease assets, internally developed software and certain computer equipment of $ 4.1 million and $ 11.1 million, respectively, across the TTEC Digital and TTEC Engage segments.
+Added: During the three months ended March 31, 2024 and 2023, the Company recognized impairment losses, net related to leasehold improvements assets, right of use lease assets, internally developed software and certain computer equipment of $ 0.1 million and $ 4.3 million, respectively, across the TTEC Digital and TTEC Engage segments.
(9) INCOME TAXES
4 unchanged sentences
The Company’s selection of an accounting policy with respect to both the global intangible low taxed foreign income (“GILTI”) and base erosion and anti-abuse tax (“BEAT”) rules is to compute the related taxes in the period the entity becomes subject to either GILTI or BEAT.
−Removed: As of September 30, 2023, the Company had $ 44.5 million of net deferred tax assets (after a $ 34.0 million valuation allowance) and a net deferred tax asset of $ 41.2 million (after deferred tax liabilities of $ 3.3 million) related to the United States and international tax jurisdictions whose recoverability is dependent upon future profitability.
−Removed: The effective tax rate for the three and nine months ended September 30, 2023 was 74.7 % and 42.2 %, respectively.
−Removed: The effective tax rate for the three and nine months ended September 30, 2022 was 15.2 % and 17.7 %, respectively.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
+Added: As of March 31, 2024, the Company had $ 52.1 million of net deferred tax assets (after a $ 42.9 million valuation allowance) and a net deferred tax asset of $ 48.9 million (after deferred tax liabilities of $ 3.1 million) related to the United States and international tax jurisdictions whose recoverability is dependent upon future profitability.
+Added: At the end of each interim period, we are required to estimate our annual effective tax rate for the fiscal year and to use that rate to provide for income taxes for the current year-to-date reporting period.
+Added: The Company’s 2024 estimated annual effective tax rate of 37.3 %, before discrete items, is driven by the distribution of income between the U.S.
+Added: and international tax jurisdictions, earnings in international jurisdictions currently under an income tax holiday, changes in valuation allowance, the associated U.S.
+Added: tax impacts of foreign earnings and United States Federal Tax Credits.
+Added: The Company’s first quarter effective tax rate was 82.3 %.
+Added: This rate was the result of near breakeven year-to-date income, the exclusion of losses related to entities with a full valuation allowance and includes a $ 0.7 million benefit related to the tax impact of foreign remittances, $ 0.3 million of expense related to stock-based compensation, and $ 0.5 million of expense related to taxes on prior year filings.
The Company’s U.S.
income tax returns filed for the tax years ending December 31, 2017 to present, remain open tax years .
−Removed: The Company has been notified of the intent to audit or is currently under audit of income taxes for the United States for tax year 2017 and 2018 , the Philippines for tax year 2020 , the state of California in the United States for tax years 2017 and 2018 , the State of Illinois in the United States for tax year 2020 , Canada for tax year 2021 , and India for tax years 2017 through 2022 .
+Added: The Company has been notified of the intent to audit or is currently under audit of income taxes for the United States for tax year 2017 and 2018 , the Philippines for tax year 2020 , the state of California in the United States for tax years 2017 and 2018 , the State of Illinois in the United States for tax year 2020 , the State of Wisconsin for tax years 2019 through 2021 , Canada for tax year 2021 , and India for tax years 2017 through 2022 .
Although the outcome of examinations by taxing authorities are always uncertain, it is the opinion of management that the resolution of these audits will not have a material effect on the Company’s Consolidated Financial Statements.
+Added: The Organization for Economic Co-operation and Development (OECD), supported by 140 of their member countries, have agreed to implement a minimum 15 % tax rate on certain multinational enterprises and have released model guidance.
+Added: This global minimum tax, known as the Pillar Two framework, became effective across various countries in 2024, as each country works to enact legislation influenced by the OECD Pillar 2 rules.
+Added: While the Company does not expect the adoption of the Pillar Two framework to have a material impact on its effective tax rate, the Company continues to evaluate additional guidance released by the OECD, along with the pending and adopted legislation in each of the countries in which it operates.
When there is a change in judgment concerning the recovery of deferred tax assets in future periods, a valuation allowance is recorded into earnings during the quarter in which the change in judgment occurred.
−Removed: In the first, second and third quarters of 2022, $ 1.3 million, $ 0.6 million and $ 2.5 million, respectively, were released from the valuation allowance for assets that are expected to be recognized in the future.
During the first, second and third quarters of 2023, a $ 1.3 million, a $ 3.1 million and a $ 4.4 million valuation allowance were recorded, respectively, for assets that are not expected to be recovered in future periods.
Additionally, during the third quarter 2023, a valuation allowance in the amount of $ 1.7 million was released for assets now expected to be recovered in future periods.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The Company has been granted “Tax Holidays” as an incentive to attract foreign investment by the governments of the Philippines and Costa Rica.
+Added: During the first quarter of 2024, a valuation allowance of $ 3.0 million was recorded for assets that are not expected to be recovered in future periods.
+Added: The Company has been granted “Tax Holidays” as an incentive to attract foreign investment by the governments of the Philippines and Honduras.
Generally, a Tax Holiday is an agreement between the Company and a foreign government under which the Company receives certain tax benefits in that country, such as exemption from taxation on profits derived from export-related activities.
1 unchanged sentence
These incentives have varying benefit year over year and expire at various times beginning in 2031.
−Removed: The aggregate benefit to income tax expense for the three months ended September 30, 2023 and 2022 was approximately $ 0.8 million and $ 0.3 million, respectively, which had an impact on diluted net income per share of $ 0.02 and $ 0.01 , respectively.
−Removed: The aggregate benefit to income tax expense for the nine months ended September 30, 2023 and 2022 was approximately $ 1.8 million and $ 1.3 million, respectively, which had an impact on diluted net income per share of $ 0.04 and $ 0.03 , respectively.
+Added: The aggregate benefit to income tax expense for the three months ended March 31, 2024 and 2023 was approximately $ 0.7 million and $ 0.7 million, respectively, which had an impact on diluted net income per share of $ 0.02 and $ 0.01 , respectively.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
(10) COMMITMENTS AND CONTINGENCIES
2 unchanged sentences
The Credit Facility matures on November 23, 2026 .
+Added: The Company primarily uses the Credit Facility to fund working capital, general operations, dividends, acquisitions and other strategic activities.
On April 3, 2023 , the Company entered into a Seventh Amendment to the Credit Agreement which replaces the use of LIBOR with SOFR as of the date of the amendment, thus will affect the interest rates paid for a portion of the Credit Facility starting in the second quarter of 2023.
+Added: On February 26, 2024 , the Company entered into an Eighth Amendment to the Credit Agreement to increase the net leverage ratio covenant, the lenders’ commitment fee rate and margin for a period starting with the quarter ending March 31, 2024 through the quarter ending March 31, 2025, from the current 3.5 to 1 to between 4.0 to 1 and 4.5 to 1, as may be applicable in different quarters;
+Added: and reduced the total lenders’ commitment from $1.5 billion to $ 1.3 billion.
+Added: TTEC may, at its option for any quarter during the amendment period, elect to revert to the net leverage ratio and the corresponding lenders’ commitment fee rate and margin to pre-amendment levels.
+Added: The term of the Credit Facility will remain unchanged through November 23, 2026 .
+Added: The Company’s Credit Agreement includes a number of financial covenants and operating restrictions of which failure to comply could result in a default under the Credit Agreement.
+Added: The Company’s ability to comply with the covenants will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond its control.
+Added: As of the issuance of these financial statements, the Company believes it has sufficient cash on hand, positive working capital, and availability to access additional cash under the Credit Facility to meet its business operating requirements, its capital expenditures and to continue to comply with the amended debt covenants.
+Added: In the event that the Company does not remain in compliance with the financial covenants under the Credit Facility, it may need to negotiate additional amendments to or waivers of the terms of such credit facilities, refinance its debt, or raise additional capital.
+Added: The Company could also reduce discretionary spending, capital expenditures and dividends paid.
The maximum commitment under the Credit Facility is $ 1.3 billion in the aggregate, if certain conditions are satisfied.
12 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: The Company primarily utilizes its Credit Facility to fund working capital, general operations, dividends and other strategic activities, such as the acquisitions described in Note 2.
−Removed: As of September 30, 2023 and December 31, 2022, the Company had borrowings of $ 964.0 million and $ 960.0 million, respectively, under its Credit Facility, and its average daily utilization was $ 1,057.6 million and $ 1,023.6 million for the nine months ended September 30, 2023 and 2022, respectively.
−Removed: Based on the current level of availability based on the covenant calculations, the Company’s remaining borrowing capacity was approximately $ 215 million as of September 30, 2023.
−Removed: As of September 30, 2023, the Company was in compliance with all covenants and conditions under its Credit Agreement.
+Added: As of March 31, 2024 and December 31, 2023, the Company had borrowings of $ 953.0 million and $ 995.0 million, respectively, under its Credit Facility, and its average daily utilization was $ 1,072.0 million and $ 1,061.9 million for the three months ended March 31, 2024 and 2023, respectively.
+Added: Based on the current level of availability based on the covenant calculations, the Company’s remaining borrowing capacity was approximately $ 95 million as of March 31, 2024.
+Added: As of March 31, 2024, the Company was in compliance with all covenants and conditions under its Credit Agreement.
Letters of Credit
−Removed: As of September 30, 2023, outstanding letters of credit under the Credit Facility totaled $0.2 million and primarily guaranteed workers’ compensation and other insurance related obligations.
−Removed: As of September 30, 2023, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $0.3 million.
+Added: As of March 31, 2024, outstanding letters of credit under the Credit Facility totaled $ 0.2 million.
+Added: As of March 31, 2024, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $ 0.3 million.
Indebtedness under the Credit Agreement is guaranteed by certain of the Company’s present and future domestic subsidiaries.
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(11) DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS
−Removed: Revenue recognized for the nine months ended September 30, 2023 from amounts included in deferred revenue as of December 31, 2022 was $ 230.0 million.
−Removed: Revenue recognized for the nine months ended September 30, 2022 from amounts included in deferred revenue as of December 31, 2021 was $ 196.5 million.
+Added: Revenue recognized for the three months ended March 31, 2024 from amounts included in deferred revenue as of December 31, 2023 was $ 57.9 million.
+Added: Revenue recognized for the three months ended March 31, 2023 from amounts included in deferred revenue as of December 31, 2022 was $ 76.2 million.
Remaining performance obligations (RPO) represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.
The Company’s RPO excludes performance obligations from on-demand arrangements as there are no minimum purchase commitments associated with these arrangements, and certain time and materials contracts that are billed in arrears.
−Removed: As of September 30, 2023, the Company’s RPO was $ 337.0 million, which will be delivered and recognized within the next nine year s.
+Added: As of March 31, 2024, the Company’s RPO was $ 354.9 million, which will be delivered and recognized within the next five years .
However, the amount and timing of revenue recognition are generally driven by customer consumption, which can extend beyond the original contract term in cases where customers are permitted to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal.
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Net current period other comprehensive income (loss)
−Removed: Accumulated other comprehensive income (loss) at September 30, 2022
+Added: Accumulated other comprehensive income (loss) at March 31, 2023
Accumulated other comprehensive income (loss) at December 31, 2023
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Net current period other comprehensive income (loss)
−Removed: Accumulated other comprehensive income (loss) at September 30, 2023
+Added: Accumulated other comprehensive income (loss) at March 31, 2024
The following table presents the classification and amount of the reclassifications from Accumulated other comprehensive income (loss) to the Statement of Comprehensive Income (Loss) (in thousands):
−Removed: For the Three Months Ended September 30,
+Added: For the Three Months Ended
Comprehensive Income
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Notes to Consolidated Financial Statements
−Removed: For the Nine Months Ended September 30,
−Removed: Comprehensive Income
−Removed: (Loss) Classification
−Removed: Derivative valuation
−Removed: Gain on foreign currency forward exchange contracts
−Removed: Provision for income taxes
−Removed: Net income (loss)
−Removed: Actuarial loss on defined benefit plan
−Removed: Cost of services
−Removed: Provision for income taxes
−Removed: Net income (loss)
(13) WEIGHTED AVERAGE SHARE COUNTS
The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Shares used in basic earnings per share calculation
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Shares used in dilutive earnings per share calculation
−Removed: For the three months ended September 30, 2023 and 2022, there were Restricted Stock Units (“RSUs”) of 950 thousand and 542 thousand, respectively, outstanding which were excluded from the computation of diluted net income per share because the effect would have been anti-dilutive.
−Removed: For the nine months ended September 30, 2023 and 2022, there were RSUs of 992 thousand and 377 thousand, respectively, outstanding which were excluded from the computation of diluted net income per share because the effect would have been anti-dilutive.
+Added: For the three months ended March 31, 2024 and 2023, there were 946 thousand and 463 thousand, respectively, outstanding of Restricted Stock Units (“RSUs”) which were excluded from the computation of diluted net income per share because the effect would have been anti-dilutive.
(14) EQUITY-BASED COMPENSATION PLANS
All equity-based awards to employees are recognized in the Consolidated Statements of Comprehensive Income (Loss) at the fair value of the award on the grant date.
−Removed: The following tables present the total equity-based compensation expense (stock options and RSUs) for the three and nine months ended September 30, 2023 and 2022 (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Equity-based compensation expense recognized in Cost of services
−Removed: Equity-based compensation expense recognized in Selling, general and administrative
−Removed: Total equity-based compensation expense
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Nine Months Ended September 30,
+Added: The following tables present the total equity-based compensation expense for the three months ended March 31, 2024 and 2023 (in thousands):
+Added: Three Months Ended March 31,
Equity-based compensation expense recognized in Cost of services
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Restricted Stock Unit Grants
−Removed: During the nine months ended September 30, 2023 and 2022, the Company granted 587,490 and 365,515 RSUs, respectively, to new and existing employees, which vest over four to five years .
−Removed: The Company recognized compensation expense related to RSUs of $ 6.5 million and $ 15.8 million for the three and nine months ended September 30, 2023, respectively.
−Removed: The Company recognized compensation expense related to RSUs of $ 5.0 million and $ 12.4 million for the three and nine months ended September 30, 2022, respectively.
−Removed: As of September 30, 2023, there was approximately $ 41.2 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to RSUs granted under the Company’s equity plans.
+Added: During the three months ended March 31, 2024 and 2023, the Company granted 346,507 and 93,772 RSUs, respectively, to new and existing employees, which vest over four to five years .
+Added: The Company recognized compensation expense related to RSUs of $ 5.8 million and $ 3.9 million for the three months ended March 31, 2024 and 2023, respectively.
+Added: As of March 31, 2024, there was approximately $ 35.1 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to RSUs granted under the Company’s equity plans.
Performance Based Restricted Stock Unit Grants
During 2021, the Company awarded Performance Restricted Stock Units (“PRSUs”) that are subject to service and performance vesting conditions.
−Removed: If defined minimum targets are met, the annual value of the PRSUs issued will be between $ 0.2 million and $ 2.0 million and vest immediately.
−Removed: If the defined minimum targets are not met, then no shares will be issued.
−Removed: The number of shares awarded are based on the Company’s annual revenue and adjusted operating income for the fiscal years 2021 and 2022.
−Removed: Each fiscal year’s revenue and adjusted operating income will determine the award amount.
−Removed: The Company recognized compensation expense related to the 2020 PRSUs of $ 0.0 million and $0.1 million, respectively, for the three and nine months ended September 30, 2023, The Company recognized compensation expense related to the 2020 PRSUs of $0.3 million and $0.8 million, respectively, for the three and nine months ended September 30, 2022.
−Removed: During 2021, the Company awarded PRSUs that are subject to service and performance vesting conditions.
−Removed: If defined minimum targets are met, the annual value of the PRSUs issued will be between $ 1.2 million and $ 4.9 million and vest immediately in 2024.
+Added: If defined minimum targets are met, the annual value of the PRSUs issued would be between $ 1.2 million and $ 4.9 million and vest immediately in 2024.
If the defined minimum targets are not met, then no shares will be issued.
The number of shares that will be awarded will be based on the Company’s annual revenue and adjusted operating income for the fiscal year 2023.
−Removed: The Company recognized compensation expense related to the 2021 PRSUs of $ 0.1 million and $0.5 million for the three and nine months ended September 30, 2023, respectively.
+Added: The Company recognized compensation expense related to the 2021 PRSUs of $ 0.0 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
During 2022, the Company made awards of two different PRSU programs that are subject to service and performance vesting conditions:
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The number of shares to be awarded will be based on the TTEC Engage and TTEC Digital business segments’ annual revenue and adjusted EBITDA for the fiscal year 2025.
−Removed: Expense for these awards will begin at the start of the requisite service period, beginning January 1, 2024 and January 1, 2025, respectively.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: For the ordinary course annual PRSUs, no expense was recognized for the three months ended March 31, 2024.
+Added: Expense for the one-time stretch financial goals PRSUs will begin at the start of the requisite service period, beginning January 1, 2025.
During 2023, the Company awarded PRSUs that are subject to service and performance vesting conditions.
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Expense for these awards will begin at the start of the requisite service period, beginning January 1, 2025.
+Added: As of the date of this report, the Company has not yet awarded 2024 PRSUs but it plans to do so during the second quarter of 2024.
+Added: The 2024 PRSUs will be subject to service and performance vesting conditions in a manner similar to prior years.
+Added: (15) NON-QUALIFIED DEFERRED COMPENSATION PLAN
+Added: The Company maintains a non-qualified deferred compensation plan for executive officers and other eligible employees that permits such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment.
+Added: The plan allows for deferral of up to 75 % of a participant’s base salary, bonus, commissions, and any amounts that U.S.
+Added: highly compensated employees are limited from contributing into TTEC’s Deferred Tax Retirement Savings Plan (the “401K Plan”).
+Added: All amounts deferred under the plan are unfunded, unsecured obligations and are recorded within Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets.
+Added: In the event of bankruptcy, the assets of this plan are available to satisfy the claims of general creditors.
+Added: Participants may choose among alternative earnings rates for the amounts they defer, which are primarily based on investment options within the 401K Plan.
+Added: Amounts contributed and deferred under the Plan are credited or charged with the performance of investment options offered under the plan as elected by the participants.
+Added: The Company manages the risk of changes in the fair value of the liability for deferred compensation by electing to match its liability under the plan with investment vehicles that offset a portion of its exposure including a Company owned life insurance policy held in a rabbi trust.
(16) RELATED PARTY TRANSACTIONS
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Tuchman, Chairman and Chief Executive Officer of the Company, has an indirect 100 % beneficial ownership interest in Avion and Airmax.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company expensed $ 0.8 million and $ 0.4 million, respectively, to Avion and Airmax for services provided to the Company.
−Removed: There was $ 104 thousand in payments due and outstanding to Avion and Airmax as of September 30, 2023.
+Added: During the three months ended March 31, 2024 and 2023, the Company expensed $ 0.1 million and $ 0.3 million, respectively, to Avion and Airmax for services provided to the Company.
+Added: There was $ 36 thousand in payments due and outstanding to Avion and Airmax as of March 31, 2024.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
Michelle Swanback, President of the Company, is a member of the board of directors of WTW (NYSE:
WTW) (fka “Willis Towers Watson”), that provides compensation consulting and insurance brokerage services to the Company.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company expensed $ 2.8 million and $ 2.2 million, respectively, for these services.
+Added: During the three months ended March 31, 2024 and 2023, the Company expensed $ 0.8 million and $ 0.8 million, respectively, for these services.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
−Removed: This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, results of operation, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance.
+Added: This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
+Added: Forward-looking statements include, but are not limited to, statements regarding our operations, expected financial condition, results of operation, effective tax rate, cash flow, leverage, liquidity, business strategy, competitive position, demand for our services in international operations, acquisition opportunities and impact of acquisitions, capital allocation and dividends, growth opportunities, spending, capital expenditures and investments, competition and market forecasts, industry trends, our human capital resources, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance.
In this report when we use words such as “may,” “believe,” “plan,” “will,” “anticipate,” “estimate,” “expect,” “intend,” “project,” “would,” “could,” “target,” or similar expressions, or when we discuss our strategy, plans, goals, initiatives, or objectives, we are making forward-looking statements.
+Added: Unless otherwise indicated or except where the context otherwise requires, the terms “TTEC,” “the Company,” “we,” “us” and “our” and other similar terms in this report refer to TTEC Holdings, Inc.
+Added: and its subsidiaries.
We caution you not to rely unduly on any forward-looking statements.
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Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023.
−Removed: Important factors that could cause our actual results to differ materially from those indicated in the forward looking statements include, among others:
−Removed: the risks related to our business operations and strategy in a competitive market;
−Removed: our ability to innovate and introduce disruptive technologies that would allow us to maintain and grow our market share (e.g., effective adoption of artificial intelligence into our solutions);
−Removed: risks that may arise in connection with events outside of our control (e.g.
−Removed: macroeconomic conditions, geopolitical tensions, outbreaks of infectious diseases);
−Removed: risks inherent in a disruption and cybersecurity of our information technology systems, including as a result of criminal or other unauthorized activity, which can impact our ability to consistently deliver uninterrupted service to our clients or unauthorized access to data, any of which may result in government investigations and enforcement actions, and private legal actions;
−Removed: risks inherent in the delivery of services by employees working from home;
−Removed: our ability to attract and retain qualified personnel at a price point that we can afford and our clients are willing to pay;
−Removed: our M&A activity, including our ability to properly integrate acquired businesses;
−Removed: our reliance on a relatively small number of TTEC Engage clients to generate the majority of our revenue and our reliance on technology partners to generate a large portion of TTEC Digital’s revenue;
−Removed: changes in laws and regulations that impact our and our clients’ businesses, including rapidly changing data privacy and data protection laws, healthcare business regulations, and financial and public sector specific regulations;
−Removed: the cost of labor and data privacy litigation and other class action litigation;
−Removed: the risks related to our international operations including the stress that geographic expansion may have on our business, the impact if we are unable to expand geographically to meet our clients’ demand or our clients’ reluctance to expand the delivery of their services in certain parts of the world due to conflict or other disruptions;
−Removed: and risks inherent in our equity structure including our controlling shareholder risk, and Delaware choice of dispute resolution risks.
+Added: Important factors that could cause our actual results to differ materially from those indicated in the forward looking statements include, among others, risks related to our business operations, our strategy and our industry, including risks related to our strategic execution in a competitive market, our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share such as the effective adoption of artificial intelligence into our solutions, revenue risks specific to client concentration in our TTEC Engage business segment and risks related to the product reliability of the technology partners and client transition from on premises to public cloud and SaaS information technology solutions in our TTEC Digital business segment, risks specific to remote work environment, risks related to the challenges inherent in demand and delivery center capacity forecasting, risks specific to labor costs and retention, risks related to operations controls and employees engaging in fraud, long sales cycles and lead time to revenue, risks specific to potential geographic and other expansions, risks that may arise in connection with events outside of our control such as macroeconomic conditions, geopolitical tensions, and outbreaks of infectious diseases, risks of M&A activity including our ability to identify, acquire and properly integrate acquired businesses in accordance with our strategy;
+Added: risks related to our use of technology, including risk that could arise due to disruption to our information technology systems, cybersecurity events and unauthorized data access, our reliance on communication and utility services provided to third parties, risks specific to rapid adoption of AI/GenAI technologies, and the growing reliance on third parties for data, cloud and SaaS services;
+Added: risks of our financial operations, including ineffective cost-management strategies, our leverage and debt service obligations, risks specific to financial and operating restrictions built into our credit facility, changes in the cost or availability of labor, telecommunication services, and other operational necessities that we cannot pass on to our clients, risks related to foreign currency exchange, changes in income tax rates and laws, and other laws and regulations relevant to our business, interpretations of transfer pricing arrangements, uncertainties tied to goodwill, assets and strategic investments’ impairments;
+Added: risks specific to our contracting practices and laws and regulations that impact our business, including uncertainty and inconsistency in privacy and data protection laws, the high cost of compliance with such laws, the high cost and reputational damage of wage and hour class action lawsuits, contract terms that lead to volatility in revenue and profitability, the efforts by clients to transfer contractually cybersecurity, data privacy and emerging technology risks to service providers and our inability to always control or mitigate them, uncertainty in AI/GenAI regulatory environments, risks specific to IP protection and infringement, and our ability to timely secure and maintain licenses needed to support certain regulated lines of business;
+Added: risks specific to operations outside of the U.S.
+Added: and in jurisdictions where we have limited experience;
+Added: risks related to the ownership of our common stock, including risks inherent in our capital structure, our controlling shareholder risk, risks related to the price and trading volumes of our common stock being affected by factors that we cannot fully impact or control, risks inherent in our dividend
+Added: and stock repurchase policies, risks specific to being a Delaware company and provisions in our charter documents that may discourage, delay or prevent a change in control events potentially depressing the price of our common stock, and the fact that our Chairman and Chief Executive Officer has control over matters requiring shareholder action potentially impacting our stock price and making it less attractive to investors.
Our forward-looking statements speak only as of the date that this report is filed with the United States Securities and Exchange Commission (“SEC”).
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.