Ttec Holdings, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 10 August 2026: press release. Guidance figures: 2 raised, 12 lowered, 5 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue fell 11.3 percent: Revenue was $455.5 million against $513.6 million a year earlier. Foreign exchange had a $0.3 million negative impact. Six-month revenue was $951.7 million, against $1,047.8 million. Source
• Non-GAAP EPS was $0.03: Non-GAAP fully diluted EPS was $0.03 against $0.22. GAAP fully diluted net loss per share was $0.27, against $0.14 a year earlier. Source
• Engage revenue fell 12.1 percent: TTEC Engage revenue was $351.5 million against $399.8 million. Its GAAP income from operations was $4.3 million, or 1.2 percent of revenue, against $7.5 million, or 1.9 percent. Source
• Consolidated revenue range lowered: Full-year revenue range is $1,940 million to $1,990 million, midpoint $1,965 million, down from $2,005 million to $2,055 million. Adjusted EBITDA range is $205 million to $225 million. Source
• Engage ranges lowered; Digital kept: Engage revenue, adjusted EBITDA, operating income and margin ranges were lowered. Digital ranges for revenue, EBITDA, operating income and margins were kept at the original levels. Source
• Board opens strategic review: The Board authorized management to evaluate potential strategic alternatives for TTEC Digital to best position it for growth and shareholder value. Source
• Enterprise wins in four verticals: Management said it is strengthening sales execution and securing enterprise wins in automotive, healthcare, retail and travel. Source
• Free cash flow fell to $38.7M: Free cash flow was $38.7 million against $85.5 million. Operating cash flow was $51.3 million against $92.7 million, and capital expenditures were $12.6 million against $7.2 million. Source
• Net debt reduced year over year: Cash was $93.8 million and debt $860.7 million, a net debt position of $766.9 million, against $803.7 million a year earlier. Source
• Covenant flexibility obtained after quarter-end: TTEC obtained covenant flexibility under its Credit Facility for the second quarter and future quarters. Details are in the Form 10-Q. Source

“Second quarter 2026 was a challenging quarter with performance that fell short of our plan. While we are disappointed in our results, we remain confident in our path forward.”

Ken Tuchman, TTEC chairman and chief executive officer

Guidance

What changed from last quarter

• Guidance lowered: Consolidated full-year ranges for revenue, adjusted EBITDA, operating income and non-GAAP EPS were lowered; the EPS midpoint moved to $0.89 from $1.19. Source
• Guidance lowered: Engage full-year ranges for revenue, adjusted EBITDA, operating income and margins were lowered. Source
• Guidance kept: Digital full-year ranges were kept at the original 2026 levels. Source
• Guidance raised: Adjusted tax rate range moved up to 48% to 50% and diluted share count range moved up to 48.7 million to 48.9 million. Source
• New: Board authorized management to evaluate strategic alternatives for the TTEC Digital business. Source
• New: PJT Partners engaged as independent financial advisor for the review of strategic and capital markets alternatives. Source
• New: In the third quarter of 2026, TTEC obtained covenant flexibility under its Credit Facility for the second quarter and future quarters. Source
• New: Discussions with lenders to extend the Credit Facility maturity beyond 2027 are under way. Source

Second-quarter results

• Revenue fell 11.3 percent: Revenue was $455.5 million against $513.6 million a year earlier. Foreign exchange had a $0.3 million negative impact. Six-month revenue was $951.7 million, against $1,047.8 million. Source
• GAAP operating margin fell to 2.4%: GAAP income from operations was $11.0 million, or 2.4 percent of revenue, against $18.9 million, or 3.7 percent a year earlier. Source
• Non-GAAP operating margin fell to 5.7%: Non-GAAP operating income was $25.7 million, or 5.7 percent of revenue, against $36.8 million, or 7.2 percent. The measure excludes restructuring, impairment, equity compensation and intangible amortization. Source
• Non-GAAP EPS was $0.03: Non-GAAP fully diluted EPS was $0.03 against $0.22. GAAP fully diluted net loss per share was $0.27, against $0.14 a year earlier. Source
• Adjusted EBITDA margin was 8.7%: Non-GAAP adjusted EBITDA was $39.5 million, or 8.7 percent of revenue, against $51.8 million, or 10.1 percent a year earlier. Source

Segment performance

• Engage revenue fell 12.1 percent: TTEC Engage revenue was $351.5 million against $399.8 million. Its GAAP income from operations was $4.3 million, or 1.2 percent of revenue, against $7.5 million, or 1.9 percent. Source
• Engage non-GAAP operating margin 3.8%: Engage non-GAAP income from operations was $13.5 million, or 3.8 percent of revenue, against $18.4 million, or 4.6 percent a year earlier. Source
• Digital revenue fell 8.5 percent: TTEC Digital revenue was $104.0 million against $113.7 million. Its GAAP income from operations was $6.7 million, or 6.4 percent of revenue, against $11.4 million, or 10.0 percent. Source
• Digital non-GAAP operating margin 11.7%: Digital non-GAAP income from operations was $12.2 million, or 11.7 percent of revenue, against $18.4 million, or 16.1 percent a year earlier. Source
• Foreign exchange effects on segments: In Engage, foreign exchange had a $0.4 million negative impact on revenue and a $0.6 million positive impact on income from operations. Source

“Our second quarter financial results were below expectations in part due to underperformance across a small number of our Engage clients.”

Kenny Wagers, chief financial officer of TTEC

Full-year 2026 guidance

• Consolidated revenue range lowered: Full-year revenue range is $1,940 million to $1,990 million, midpoint $1,965 million, down from $2,005 million to $2,055 million. Adjusted EBITDA range is $205 million to $225 million. Source
• Consolidated profit ranges lowered: Non-GAAP operating income range is $145 million to $165 million, down from $159 million to $179 million. The margin range is 7.5% to 8.3%. Source
• Non-GAAP EPS range reduced: Non-GAAP EPS range is $0.79 to $0.99, midpoint $0.89, down from $1.06 to $1.32, midpoint $1.19. Source
• Engage ranges lowered; Digital kept: Engage revenue, adjusted EBITDA, operating income and margin ranges were lowered. Digital ranges for revenue, EBITDA, operating income and margins were kept at the original levels. Source
• Tax rate and share count raised: Adjusted tax rate range rose to 48% to 50% from 38% to 42%. Diluted share count range rose to 48.7 million to 48.9 million from 48.5 million to 48.7 million. Source
• GAAP guidance not reconciled: Management said it cannot reconcile guidance to GAAP measures because some reconciling items depend on future events. Those items could significantly affect GAAP results. Source

TTEC Digital strategic review

• Board opens strategic review: The Board authorized management to evaluate potential strategic alternatives for TTEC Digital to best position it for growth and shareholder value. Source
• Engage collaboration is a priority: The Board is prepared to consider a range of alternatives but will prioritize transactions that sustain collaboration and innovation between TTEC Engage and TTEC Digital. Source
• PJT Partners advises on review: PJT Partners is independent financial advisor to TTEC on the review of strategic and capital markets alternatives. Source

“As a result, we remain confident in executing against our original 2026 full year Digital guidance.”

Kenny Wagers, chief financial officer of TTEC

Engage clients and programs

• Client underperformance cited: Management attributed part of the quarter's shortfall to underperformance across a small number of Engage clients. Source
• Low-margin programs being transitioned: Management said it is working with clients to optimize or transition low-margin programs and deploying front-line AI and automation to raise productivity. Source
• Enterprise wins in four verticals: Management said it is strengthening sales execution and securing enterprise wins in automotive, healthcare, retail and travel. Source

Demand and new business

• New business closing delayed: Management said a delay in closing new business is one reason for the revised full-year range for Engage. Source
• Digital demand in data and AI: Management said Digital is gaining traction in data, AI, observability and security, which it describes as solutions in high demand. Source
• Digital on track per management: Management said momentum and its pipeline support the full-year Digital guidance and keep the segment on track for its revenue and profitability target. Source

Costs and margins

• Cost of services fell: Cost of services was $357.8 million against $399.3 million. Selling, general and administrative expense was $61.3 million against $70.7 million. Source
• Restructuring and impairment charges rose: Restructuring charges were $2.4 million and impairment losses $1.9 million, against $1.1 million and $0.8 million a year earlier. Source
• Cost structure simplification under way: Management said it is simplifying its overall cost structure through targeted operational efficiencies and best-shore delivery models. Source
• Capital structure costs added: Expenses related to an alternative capital structure were $0.5 million in the quarter and are excluded from non-GAAP results. The prior-year quarter had none. Source
• Currency effects small in quarter: Foreign exchange had a $0.3 million negative impact on revenue and a $0.8 million positive impact on non-GAAP income from operations. Source

Cash flow and debt

• Free cash flow fell to $38.7M: Free cash flow was $38.7 million against $85.5 million. Operating cash flow was $51.3 million against $92.7 million, and capital expenditures were $12.6 million against $7.2 million. Source
• Net debt reduced year over year: Cash was $93.8 million and debt $860.7 million, a net debt position of $766.9 million, against $803.7 million a year earlier. Source
• Line of credit repaid $50 million: Net repayments on the line of credit were $50.0 million in the first half, lowering the balance to $855.0 million from $905.0 million at year-end. Source
• Covenant flexibility obtained after quarter-end: TTEC obtained covenant flexibility under its Credit Facility for the second quarter and future quarters. Details are in the Form 10-Q. Source
• Payments to noncontrolling interest continued: Payments to noncontrolling interest were $3.6 million in the first half, against $4.1 million a year earlier. Source

Coming up, as management said on 10 August 2026

• Lender talks to extend maturity: Talks with lenders aim to extend the Credit Facility maturity beyond 2027. Source
• Strategic review has no set timeline: No deadline is set for the Digital review. Developments will not be disclosed unless a definitive agreement is executed or the Board decides disclosure is required. Source

In management's words

“Our Engage and Digital segments are well positioned to deliver second half profitable growth over the prior year both in relative and absolute terms.”

Kenny Wagers, chief financial officer of TTEC

Risks management discussed

• Operational: Underperformance at a small number of Engage clients contributed to results below expectations. Source
• Demand: A delay in closing new business is affecting the revised full-year range for Engage. Source
• Financial: Covenant flexibility was obtained under the Credit Facility, and the maturity extends beyond 2027 are under discussion with lenders. Source
• External: Management said the strategic review may not produce any particular transaction or outcome. Source

Earlier plans management reported on

• On track: Management said TTEC Digital is on track to hit its revenue and profitability target. Source
• Missed: Management said quarterly performance fell short of its plan. Source
• Delayed: Management cited a delay in closing new business as a factor in the revised Engage full-year range. Source
• Not stated: In the first quarter, management reaffirmed full-year guidance. The second quarter later revised the Engage ranges.
• Not stated: Management said it remains confident in its objectives for profitable growth, improved cash flow and debt reduction. Source

Other quarters

• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.