TTEC Holdings, Inc. Common Stock 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Teck reported second quarter 2026 revenue of $455 million, down 11.3% from $514 million in the prior year period.
- Adjusted EBITDA was $39 million, or 8.7% of revenue, compared to $52 million, or 10.1% in the prior year.
- Operating income was $26 million, or 5.7% of revenue, down from $37 million, or 7.2%.
- Earnings per share were $0.03, compared to $0.22 in the prior year, impacted negatively by a higher normalized tax rate by $0.08.
- Net debt decreased by $37 million year over year to $767 million, with a net leverage ratio of 3.85 times.
- The Engage segment revenue declined 12.1% to $351 million, with operating income of $14 million or 3.8% of revenue, down from $18 million or 4.6%.
- The Digital segment revenue was $104 million, down 8.5% from prior year, with operating income of $12 million or 11.7% of revenue, compared to $18 million or 16.1% last year.
- Free cash flow was $39 million, down from $86 million in the prior year, partly due to a prior year VAT receivable collection and increased capital expenditures.
- Capital expenditures increased to $13 million or 2.8% of revenue, primarily due to accelerated purchases to avoid price increases.
- The Engage backlog was $1.5 billion, representing 98% of full year 2026 revenue guidance at midpoint, down from 101% last year.
- The Digital backlog was $364 million, or 85% of 2026 revenue guidance at midpoint, up from 83% last year.
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Transcript
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Welcome to TTEC's second quarter 2026 earnings conference call. I would like to remind all parties that you will be in a listen-only mode until the question and answer session. This call is being recorded at the request of TTEC. I would now like to turn the call over to Bob Belknapp, TTEC's Group Vice President, Corporate Finance. Thank you, sir. You may begin.
Good morning, and thank you for joining us today. TTEC is hosting this call to discuss its second quarter 2026 results for the period ended June 30, 2026. Participating on today's call are Ken Tuchman, Chairman and Chief Executive Officer of TTEC, and Kenny Wagers, Chief Financial Officer of TTEC. Yesterday, TTEC issued a press release announcing its financial results. While this call will reflect items discussed in that document, for complete information about our financial performance, we also encourage you to read our Form 10-Q for the period ended on June 30, 2026, and the latest Form 10-K. Before we begin, I want to remind you that matters discussed on today's call may include forward-looking statements related to our operating performance, financial goals, and business outlook, which are based on management's current beliefs and assumptions.
Please note that these forward-looking statements reflect our opinion as of the date of this call, and we undertake no obligation to update this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties, and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our 2025 Annual Report on Form 10-K. A replay of this conference call will be available on our website under the investor relations section. I will now turn the call over to Ken.
Good morning and thank you for joining us today. Q2 was a challenging quarter with performance that fell short of our plan. While we're disappointed in our results, we remain confident in our path forward. We continue to execute a focused strategy to deliver measurable gains in revenue, cost efficiency, and profitability. With that operational context in mind, let me turn to our second quarter financial results. Revenue was $455 million. EBITDA was $39 million. Free cash flow was $39 million. Net debt decreased $36 million. In a typical quarter, I'd spend more time on industry trends, new client wins, innovation, partner growth, and strategy. While we have progress to report in all those areas, I want to focus today on the actions underway to fortify the resilience of our business.
Across both TTEC Engage and TTEC Digital, our priorities remain clear: continue to sharpen our go-to-market approach, reduce structural cost, and restore the business to our historic levels of growth and profitability. Let me start with our focus areas in Engage. First, we continue to improve pipeline quality and sales execution. While there is more work to do, we're seeing positive momentum with new strategic enterprise opportunities, higher growth digital services, and client wins across automotive, healthcare, retail, and travel. Second, we're partnering with clients to address financially underperforming programs through automation, offshore delivery, and operating model redesign while maintaining a high level of service quality. In the event, however, a mutually beneficial path isn't possible, we're assisting clients with a professional transition. Third, on the front lines, we're successfully deploying AI and automation in focused, practical ways to improve productivity, simplify workflows, and expand capacity across our operations.
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