Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| While our business has a long sales cycle, we're encouraged by the number of active opportunities with new prospects who have the potential to grow into strategic growth accounts, fueling our client diversification strategy |
| But the good news about the embedded base is that for the most part, it's very solid, so to speak, because of the nature of the licensing and of just the legal requirements, so to speak |
| And so we're excited about the demand that we've seen for our clients across all of those areas around the globe |
| But I'm encouraged by the wins that we've closed early this year and the ones we have in the pipeline, as Ken said, they're taking a bit longer than we'd like, but I'm very encouraged by that |
| What AI affords all of us, the entire industry, is an opportunity to show our clients a way to increase quality and lower overall costs to serve |
| We built on our premier partner status with our leading CX technology and hyperscaler partners and we continue to be recognized as the best employer by Forbes Magazine for the third consecutive year |
| We view it as a very -- we view it as a positive change |
| So yes, we feel very confident in the space |
| And it's why we feel confident that our business not only, our pipeline, not only did we have record bookings in fourth quarter, we feel very strongly about first quarter, and we feel that this will persist, and that 2025, we will see double digit growth as well as profit margins |
| Due to our growing client demand, we're scaling our new offshore geographies and driving improved profitability |
| So that gives us good confidence in our Digital business |
| We expect margins will improve as we drive more volume into these offshore locations |
| First of all, as we said in the Digital practice, we've got really good booking momentum, and traction right now |
| And so I'm very confident that this will lift and shall pass and that we feel we will be right back on track in 2025 |
| And consequently, as we've said on several conference calls prior to this call, a high percentage of large enterprises do not have their contact center technology in the cloud as it relates to CCaaS and therefore we're benefiting from it |
| As Digital transformation continues to be a top priority for our clients, we are encouraged by the growing momentum with TTEC Digital |
| We are confident in our go-forward plan that focuses on growth and margin improvement with a series of initiatives in motion to support both |
| Our deep and differentiated partnerships with all the premier CX technology players and hyperscalers has established us as the leading CX transformation partner operating at the intersection of CCaaS, CRM and AI |
| While the shift in the revenue mix will improve digital profit margins, over the long term, in 2024, it will be upset by the continuous investment in Talent, as well as sales and marketings to maintain double digit growth in 2025 and beyond across each of our practices |
| Our high margin professional services and recurring managed services are expected to grow by 11% in 2024, driven by the high demand for cloud migration and CX technology |
| With our differentiated approach in TTEC Digital, we achieved record bookings in the fourth quarter and expect this momentum to continue through 2024 |
| In our Digital business, we expect solid performance throughout the year |
| We're successfully increasing the percentage of professional services and recurring managed services that deliver higher growth and margins |
| As revenue grows, the margin improvement efforts are anticipated to contribute to a more impactful margin run rate in 2025 |
| Engage fourth quarter revenue exceeded our guidance due to stronger volume than anticipated in the financial services and telco verticals |
| We're confident that our go-forward plan for TTEC will pave the way for significantly improved results as we exit 2024, setting us up for renewed growth and improved profitability in 2025 and beyond |
| We are also pleased with the continued digital bookings momentum in the new year |
| Full year 2023 revenue benefited from strength in most of our CX technology practice areas |
| Recurring managed services bookings were also strong in the quarter |
| I'll continue to be inspired by the dedication of our employees across the globe and grateful to our growing and valued client base |
| Statement |
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| However, our disappointing outlook for 2024 reflects three specific challenges primarily impacting our engage segment |
| I echo Ken's sentiments about our disappointing 2024 outlook |
| In turn, these actions are reducing our visibility and impacting our revenue forecast |
| In closing, we ended 2023 in line with expectations, but the recent dynamic in the Engage segment are causing a reduction in our 2024 revenue and margin outlook |
| The Engage segment of the main environment was softer than initially anticipated in the second half of 2023, primarily driven by client's conservative views and lower projected 2024 budget |
| As I mentioned, our Engage segment’s operating income margin was on the lower end of our guidance range primarily due to an unprecedented high level of employee-related healthcare claims |
| Turning to the midpoint of our 2024 guidance, as outlined in greater detail in our fourth quarter and full year 2023 earnings press release, GAAP revenue of $2.32 billion, a decrease over the prior year of 5.8% |
| Our view on 2024 reflects the current economic backdrop and three very specific challenges in our engaged segments that are putting pressure on our outlook for both revenue and margin |
| In closing, I'm disappointed in our 2024 outlook |
| In our Digital segment, the fourth quarter revenue was $119 million, a decrease of 2.1% over the prior year period |
| Non-GAAP earnings per share of $1.51, a decrease of 30.8% over the prior year |
| In the last half of 2023, several new prospects delayed decision-making due to lack of visibility and spending constraints |
| Consequently, our booking levels were significantly lower than in the past quarters |
| Our Engage segment revenue decreased 5.5% to $507 million in the fourth quarter of 2023 over the prior year period |
| As Ken just described, 2023 was a year of challenges and also some notable wins |
| The modest operating margin pressure on a full year basis was a function of revenue mix an investment in CX leadership and engineering talent |
| In addition, the continuous conservative mindset and budget constraints from select enterprise clients primarily explains the remaining 2024 revenue reduction, especially in the first half of the year |
| However, the one-time on-premise related revenue that averages approximately 10% of digital revenue in recent years is anticipated to naturally decline by approximately 50% in 2024, putting pressure on digital overall revenue growth |
| Adjusted EBITDA of $237 million, a decrease of 12.7% over the prior year, and 10.2% of revenue compared to 11% in the prior year |
| Non-GAAP operating income of $172 million, a decrease of 14.4% over the prior year, and 7.4% of revenue compared to 8.1% in the prior year |
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