TTEC Holdings, Inc. (TTEC) | Investment Case

1. Company Snapshot

1.a. Company Description

TTEC Holdings, Inc., a customer experience technology and services company, that designs, builds, orchestrates, and delivers digitally enabled customer experiences designed for various brands.It operates in two segments, TTEC Digital and TTEC Engage.The TTEC Digital segments designs, builds, and operates robust digital experiences for clients and their customers through the contextual integration and orchestration of customer relationship management, data, analytics, customer experience as a service technology, and intelligent automation to ensure customer experience (CX) outcomes.

The TTEC Engage segment provides digitally enabled CX managed services; delivers omnichannel customer care, tech support, order fulfillment, customer acquisition, growth, and retention services; and delivers digitally enabled back office and industry specific specialty services, such as AI operations, content moderation, and fraud management services.It serves clients in the automotive, communication, financial services, government, healthcare, logistics, media and entertainment, e-tail/retail, technology, transportation, and travel industries with operations in the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Costa Rica, Germany, Greece, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, Singapore, South Africa, Thailand, and the United Kingdom.The company was formerly known as TeleTech Holdings, Inc.

and changed its name to TTEC Holdings, Inc.in January 2018.TTEC Holdings, Inc.

was founded in 1982 and is headquartered in Englewood, Colorado.

Show Full description

1.b. Last Insights on TTEC

TTEC Holdings' recent performance was negatively impacted by its Q3 earnings miss, with quarterly earnings of $0.12 per share, falling short of the Zacks Consensus Estimate of $0.25 per share. This underperformance was a significant deviation from expectations. Despite achieving the Microsoft AI Business Solutions Inner Circle award and multiple workplace awards, the company's earnings disappointment overshadowed these positive developments. The partnership with VoxEQ to deliver real-time voice biometrics also did not offset the earnings miss.

1.c. Company Highlights

Last Price	3.21
Change Percentage	5.94%
Open	3.04
Previous Close	3.03
Market Cap ( Millions)	156
Volume	396264.61
Year High	5.6
Year Low	1.98
M A 50	2.58
M A 200	3.42

FCF Yield	18.41%
Dividend Yield	0.00%
ROE	-85.51%
Debt / Equity	1118.05%
Net Debt / EBIDTA	-8207.02%
Price To Book	1.63
Price Earnings Ratio	-0.8
Price To FCF	5.43
Price To sales	0.07
EV / EBITDA	-95.14

2. TTEC Holdings' 2025 Earnings: A Mixed Bag with Growth Ahead

TTEC Holdings, Inc. reported its fourth quarter and full year 2025 results, with revenue exceeding the high end of guidance. For the full year 2025, revenue was $2,136,000,000, with adjusted EBITDA of $214,000,000, reflecting 5.6% year-over-year growth. The company's earnings per share (EPS) for the fourth quarter was $0.47, beating estimates of $0.39. The revenue for the fourth quarter was $570,000,000, a slight increase over the prior-year period, with adjusted EBITDA of $62,000,000, or 10.9% of revenue.

Publication Date: Mar -06

                                    📋 Highlights
                                    2025 Full-Year Revenue::
                                                Exceeded guidance at $2.136B, with 5.6% YoY adjusted EBITDA growth to $214M.
Cash Flow & Debt Reduction::
                                                Generated $83M in free cash flow, reducing credit facility borrowings by $70M YoY.
Engage Segment Profitability::
                                                Q4 operating income surged 62% to $36M, despite 1.8% revenue decline to $444M.
2026 EBITDA Growth Forecast::
                                                Projects 7.6% YoY increase to $230M, despite 5% revenue decline to $2.03B.
AI Market Positioning::
                                                Targets $400B TAM, aiming for 100% client AI adoption by 2026 to drive margin expansion.

                                

Segment Performance

The Engage segment's fourth quarter revenue decreased 1.8% to $444,000,000, while operating income was $36,000,000, or 8.1% of revenue, representing a 62% increase over the prior year. In contrast, the Digital segment saw a 9% increase in revenue to $125,000,000 in the fourth quarter, driven by product resale. For the full year 2025, Engage revenue was $1,670,000,000, a 4.6% decrease, with operating income of $101,000,000, or 6.1% of revenue, representing an 18.8% increase.

Outlook and Guidance

The company expects to continue delivering EBITDA growth in 2026, with revenue in each business segment anticipated to be slightly down. TTEC Holdings, Inc. is focused on returning to its historic growth and margin profile, prioritizing high-yield complex client engagements. The company provided its 2026 outlook, expecting GAAP revenue of $2,030,000,000, a 5% decrease, and adjusted EBITDA of $230,000,000, a 7.6% increase. Non-GAAP earnings per share is expected to be $1.19, a 9% increase.

Cash Flow and Debt

The company reported a significant increase in free cash flow to $83,000,000 in 2025, driven by improved profitability and working capital management. The company's net debt position decreased by $68,000,000 year-over-year to $825,000,000. The free cash flow yield is 21.91%, indicating a healthy cash generation capability.

Valuation

With a P/E Ratio of -0.68 and an EV/EBITDA of -93.05, the valuation metrics indicate a complex picture. However, the ROE of -85.51% and ROIC of 18.85% suggest that while the company is generating returns on its investments, the equity returns are negative. The P/S Ratio is 0.06, which is quite low, suggesting that the stock might be undervalued based on its revenue.

Strategic Focus

CEO Kenneth Tuchman stated that a significant portion of their business, including healthcare clients, cannot be moved offshore under current regulations, alleviating concerns about offshore risks. The company views AI as a positive for their business, with a total addressable market (TAM) of $400 billion, and aims to share some of the upside of cost savings with clients by demonstrating how AI can automate low-value transactions and improve call quality.

3. NewsRoom

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TTEC Holdings Stock Drops 32% in Six Months: Should You Buy the Dip?

Apr -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.85%)

6. Segments

TTEC Engage

Expected Growth: 12.3%

Growing demand for omnichannel engagement, increasing adoption of cloud-based solutions, and rising need for workforce management and analytics drive the growth of TTEC Engage platform.

TTEC Digital

Expected Growth: 15.1%

Growing demand for digital transformation, increasing adoption of AI and automation, and rising need for human-centered design to enhance customer experience drive the growth of TTEC Digital's customer experience solutions.

7. Detailed Products

Customer Experience as a Service (CXaaS)

TTEC's CXaaS provides a comprehensive suite of customer experience solutions, including customer acquisition, care, and growth services.

Humanify

Humanify is TTEC's cloud-based customer engagement platform, offering omnichannel engagement, workforce management, and analytics.

Digital CX

TTEC's Digital CX solutions provide AI-powered chatbots, virtual assistants, and automation tools to enhance customer self-service and reduce friction.

Workforce Management

TTEC's Workforce Management solutions provide forecasting, scheduling, and performance management capabilities to optimize contact center operations.

Analytics and Insights

TTEC's Analytics and Insights solutions provide real-time data analytics, customer feedback, and sentiment analysis to inform business decisions.

Automation and AI

TTEC's Automation and AI solutions provide robotic process automation, machine learning, and natural language processing to automate tasks and enhance customer experiences.

8. TTEC Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for TTEC Holdings, Inc. is medium due to the presence of alternative customer experience solutions. While there are some substitutes available, they may not offer the same level of customization and integration as TTEC's solutions.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of alternative solutions and the high demand for customer experience services. Large customers may have significant negotiating power, which could impact TTEC's pricing and revenue.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers and the lack of differentiation in the market. TTEC has a diverse supplier base, which reduces its dependence on any single supplier.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the customer experience market. New entrants would need to invest heavily in technology, talent, and marketing to compete with established players like TTEC.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the customer experience market. Companies like Convergys, Alorica, and SYKES compete fiercely for market share, which could impact TTEC's pricing, revenue, and market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	63.36%
Debt Cost	9.20%
Equity Weight	36.64%
Equity Cost	9.20%
WACC	9.20%
Leverage	172.96%

11. Quality Control: TTEC Holdings, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

IBEX

A-Score: 5.1/10

Value: 5.6

Growth: 5.7

Quality: 6.1

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

Usio

A-Score: 4.4/10

Value: 6.6

Growth: 4.7

Quality: 5.8

Yield: 0.0

Momentum: 6.0

Volatility: 3.3

1-Year Total Return ->

WidePoint

A-Score: 4.2/10

Value: 5.4

Growth: 4.6

Quality: 4.3

Yield: 0.0

Momentum: 8.5

Volatility: 2.3

1-Year Total Return ->

Unisys

A-Score: 3.2/10

Value: 10.0

Growth: 2.2

Quality: 3.5

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

TTEC

A-Score: 2.8/10

Value: 9.5

Growth: 1.3

Quality: 2.8

Yield: 1.0

Momentum: 1.0

Volatility: 1.0

1-Year Total Return ->

Grid Dynamics

A-Score: 2.6/10

Value: 2.6

Growth: 4.3

Quality: 5.5

Yield: 0.0

Momentum: 0.0

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.28%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.20%

TTEC Holdings, Inc. - US89854H1023

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TTEC

1.c. Company Highlights

Higher Yield

Weak Momentum

Lower Quality

Earnings Miss

Revenues Beats

Revenues Miss

Cheaper

More Volatile

Lower Growth

Earnings Beats

2. TTEC Holdings' 2025 Earnings: A Mixed Bag with Growth Ahead

Segment Performance

Outlook and Guidance

Cash Flow and Debt

Valuation

Strategic Focus

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.85%)

6. Segments

TTEC Engage

Expected Growth: 12.3%

TTEC Digital

Expected Growth: 15.1%

7. Detailed Products

Customer Experience as a Service (CXaaS)

Humanify

Digital CX

Workforce Management

Analytics and Insights

Automation and AI

8. TTEC Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: TTEC Holdings, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.21$

Current Price

3.21$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA