Executive Summary

Q2 2025 revenue was $513.6M, down 3.8% YoY but above consensus; non-GAAP EPS was $0.22, slightly below Street expectations. Management raised FY25 revenue guidance while reiterating profitability targets, citing stronger Engage embedded-base growth and FX uplift .
Revenue beat: $513.6M vs $495.9M consensus; EPS miss: $0.22 vs $0.235 consensus; adjusted EBITDA increased YoY to $51.8M (10.1% margin) . Consensus data marked with asterisks below; Values retrieved from S&P Global.
CFO flagged a near-term headwind: Q3 results trending down YoY given higher investments in seasonal healthcare volumes, with profitability expected to inflect in Q4 .
Strategic narrative: accelerating AI-enabled CX across Engage and Digital; CEO withdrew take-private proposal (Aug 1), removing overhang and reaffirming long-term commitment to public strategy and deleveraging .

What Went Well and What Went Wrong

What Went Well

Revenue beat and margin improvement: Q2 revenue $513.6M exceeded plan; non-GAAP operating margin rose to 7.2% and adjusted EBITDA margin to 10.1%, both up YoY .
Strong cash generation and deleveraging: Operating cash flow $92.7M; FCF $85.5M; net leverage ratio fell to 3.39x, aiding debt reduction .
AI execution and client wins: “We are designing and delivering complex transformational digital solutions… deploying AI throughout our entire organization” – CEO Ken Tuchman ; Digital segment delivered higher operating income aided by a one-time IP sale, and expanded hyperscaler partnerships .

What Went Wrong

Top-line decline and GAAP loss: Revenue down 3.8% YoY; GAAP net loss $(6.7)M; GAAP diluted EPS $(0.14) .
EPS shortfall vs consensus: Non-GAAP EPS $0.22 versus $0.235 consensus; Digital revenue modestly down 2.3% YoY as mix shifts and timing of hyperscaler transformations weighed on near-term top line .
FX mixed impact: FX provided revenue uplift but pressured Engage margins versus budget, prompting CFO to reiterate profitability guidance despite raising segment revenue outlook .

Financial Results

Quarterly headline comparison (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$567.4	$534.2	$513.6
GAAP Net Income ($USD Millions)	$4.6	$3.2	$(6.7)
Non-GAAP EPS ($USD)	$0.19	$0.28	$0.22
Adjusted EBITDA ($USD Millions)	$50.9	$56.4	$51.8
Adjusted EBITDA Margin (%)	9.0%	10.6%	10.1%
Non-GAAP Operating Income ($USD Millions)	$34.9	$41.5	$36.8
Non-GAAP Operating Margin (%)	6.2%	7.8%	7.2%

YoY comparison (Q2)

Metric	Q2 2024	Q2 2025
Revenue ($USD Millions)	$534.1	$513.6
Non-GAAP EPS ($USD)	$0.14	$0.22
Adjusted EBITDA ($USD Millions)	$46.2	$51.8
Adjusted EBITDA Margin (%)	8.7%	10.1%

Segment breakdown – Q2 2025

Segment	Revenue ($USD Millions)	GAAP Op Income ($USD Millions)	Non-GAAP Op Income ($USD Millions)
TTEC Digital	$113.7	$11.4	$18.4
TTEC Engage	$399.8	$7.5	$18.4

KPIs – Q2 2025

KPI	Q2 2025
Cash from Operations ($USD Millions)	$92.7
Free Cash Flow ($USD Millions)	$85.5
Capital Expenditures ($USD Millions)	$7.2
Cash & Equivalents ($USD Millions)	$82.6
Debt ($USD Millions)	$886.3
Net Debt ($USD Millions)	$803.7
Revolver Availability ($USD Millions)	~$270
Net Leverage Ratio (x)	3.39x

Results vs Wall Street consensus (Q2 2025)

Metric	Consensus*	Actual	Result
Revenue ($USD Millions)	$495.9*	$513.6	Beat
Primary EPS ($USD)	$0.235*	$0.22	Miss
EBITDA ($USD Millions)	$52.36*	$51.8 (Adj.)	Near inline (definitions differ)

Values retrieved from S&P Global.
Note: EBITDA consensus reflects SPGI definition; Company reports Non-GAAP Adjusted EBITDA.

Guidance Changes

Metric	Period	Previous Guidance (Q1 press release)	Current Guidance (Q2 press release)	Change
Company Revenue ($USD Millions)	FY 2025	$2,014M–$2,064M; Mid $2,039M	$2,064M–$2,114M; Mid $2,089M	Raised
Non-GAAP Adjusted EBITDA ($USD Millions)	FY 2025	$215M–$235M; Mid $225M	$215M–$235M; Mid $225M	Maintained
Non-GAAP Adjusted EBITDA Margin (%)	FY 2025	10.7%–11.4%; Mid 11.0%	10.4%–11.1%; Mid 10.8%	Lowered range
Non-GAAP Operating Income ($USD Millions)	FY 2025	$154M–$174M; Mid $164M	$154M–$174M; Mid $164M	Maintained
Interest Expense, net ($USD Millions)	FY 2025	$(75M)–$(79M); Mid $(77M)	$(72M)–$(74M); Mid $(73M)	Lowered
Non-GAAP Adjusted Tax Rate (%)	FY 2025	38%–42%; Mid 40%	39%–43%; Mid 41%	Raised
Diluted Share Count (M)	FY 2025	48.2–48.6; Mid 48.4	48.0–48.4; Mid 48.2	Slightly lower
Non-GAAP EPS ($USD)	FY 2025	$0.95–$1.20; Mid $1.08	$0.95–$1.20; Mid $1.08	Maintained
Engage Revenue ($USD Millions)	FY 2025	$1,556M–$1,586M; Mid $1,571M	$1,606M–$1,636M; Mid $1,621M	Raised
Engage Adj. EBITDA Margin (%)	FY 2025	9.7%–10.3%; Mid 10.0%	9.4%–10.0%; Mid 9.7%	Lowered
Engage Non-GAAP Op Margin (%)	FY 2025	6.5%–7.1%; Mid 6.8%	6.3%–6.9%; Mid 6.6%	Lowered
Digital Revenue ($USD Millions)	FY 2025	$458M–$478M; Mid $468M	$458M–$478M; Mid $468M	Maintained
Digital Adj. EBITDA Margin (%)	FY 2025	13.9%–15.0%; Mid 14.5%	13.9%–15.0%; Mid 14.5%	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
AI enablement across Engage/Digital	Broad AI infusion across deals and associate desktop; 150+ AI projects; accelerating hyperscaler co-selling	“Deploying AI throughout our entire organization… leading with AI and data driven solutions” ; detailed examples in Engage and Digital use cases	Rising adoption; more concrete client deployments
Hyperscaler partnerships	Expanded partner network; multi-platform enterprise transformations	Diversified network; Digital profit uplift aided by IP sale; managed services ~63% of Digital revenue	Diversifying and deepening
Offshoring mix	Plan to expand; offshore share grew ~300 bps in 2024; further 300+ bps in 2025 targeted	Offshore mix trending 37–39% for FY25; strong growth geographies (South Africa, Egypt, Eastern Europe, LatAm)	Increasing
Macro/tariffs uncertainty	Caution in larger deals timing; back-half weighted recovery expected	Clients cautious; smaller initial contract sizes; tariffs add uncertainty; Q3 investment headwind, Q4 profitability growth	Mixed near term; improving 2H
Debt reduction	Focused deleveraging; revolver availability improved	FCF strength; net leverage 3.39x; active bank discussions, closure expected in Q3	Improving balance sheet
Take-private process	Overhang; investor frustration	CEO withdrew proposal; reiterates commitment to public strategy	Overhang removed

Management Commentary

CEO Ken Tuchman: “We are designing and delivering complex transformational digital solutions… deploying AI throughout our entire organization… This approach is delivering for our clients as evidenced in our increased full-year 2025 revenue guidance” .
CFO Kenny Wagers: “Engage segment revenue is tracking higher than planned… we are raising revenue guidance… noting the foreign exchange impact versus budget is having a negative impact on Engage’s margins” .
Digital strategy: “Rapid evolution in client priorities… layering AI capabilities onto current environments… higher gross margins and deeper client engagement over time” .
Offshoring: “The majority of our pipeline… is on offshoring… we’re seeing very good expansion in South Africa, Egypt, Eastern Europe and LatAm” .

Q&A Highlights

Revolver renewal: Management in active bank discussions; confident in closure in Q3 .
Accent neutralization AI: Expanding offshore access to high-quality talent; multiple clients using it; improves customer experience .
Managed services and pricing: Shift to higher-margin managed services; no deflation in rate cards; technology application drives larger allocations over time .
Offshore mix and vertical focus: Offshore mix guided to 37–39% for FY25; strength in financial services, healthcare, technology, travel, streaming media .
Near-term outlook: Q3 downtrend vs prior year due to healthcare seasonal investments, with significant YoY profitability growth in Q4 .

Estimates Context

Revenue beat: Actual $513.6M vs $495.9M consensus* → Beat .
EPS miss: Non-GAAP EPS $0.22 vs $0.235 consensus* → Miss .
Adjusted EBITDA $51.8M vs EBITDA consensus* $52.36M; near inline, note definition differences between company’s Non-GAAP Adjusted EBITDA and SPGI consensus.
Values retrieved from S&P Global.

Where estimates may adjust: Raised FY25 revenue guidance and Q3 investment headwinds suggest minor near-term EPS estimate pressure (Q3), offset by stronger Q4 profitability trajectory; Engage revenue estimates likely revised up, margins modestly trimmed given FX translation commentary .

Key Takeaways for Investors

Quality beat/miss mix: Revenue beat and EPS miss; execution improving with margin expansion and strong FCF .
Guidance signals: FY25 revenue raised; profitability reiterated despite FX margin pressure at Engage—constructive for top-line estimates .
Near-term setup: Expect softer Q3 (seasonal healthcare investments), followed by strong Q4 profitability growth—consider positioning around this cadence .
Strategic moat: AI-enabled CX plus hyperscaler diversification and managed services mix support medium-term margin accretion and stickier revenue .
Offshoring leverage: Offshore mix rising to 37–39% in FY25, expanding capacity and cost efficiency in high-talent geographies .
Balance sheet: FCF-driven deleveraging and improved revolver availability reduce risk; revolver renewal targeted for Q3 .
Overhang cleared: CEO’s withdrawal of take-private proposal removes uncertainty and aligns focus on public-market value creation .

TTEC Holdings, Inc. (TTEC)·Q2 2025 Earnings Summary