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What changed in TTEC Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TTEC Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+380 added−377 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in TTEC Holdings, Inc.'s 2024 10-K

380 paragraphs added · 377 removed · 287 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

47 edited+18 added−28 removed16 unchanged
Biggest changeTo improve our competitive position in a rapidly changing market and to lead our clients with emerging CX methodologies, we continue to invest in innovation and service offerings for both mainstream and high-growth disruptive businesses, diversifying and strengthening our core customer care services with technology-enabled, outcomes-focused services, data analytics, insights, and consulting. 1 Table of Contents We also invest to broaden our product and service capabilities, increase our global client base and industry expertise, tailor our geographic footprint to the needs of our clients, and further scale our end-to-end integrated solutions platform.
Biggest changeTo advance our competitive position in a rapidly changing market and to provide our clients with modernized CX technology and service solutions, we continue to develop our portfolio of service offerings for both mainstream and high-growth disruptive businesses, diversifying and strengthening our core CX services with AI enhanced, technology-enabled, outcomes-focused services, data analytics, insights, and consulting.
A professional services organization comprised of software engineers, systems architects, data scientists and CX strategists, this segment creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise based CX technologies including Amazon Web Services, Cisco, Genesys, Google, and Microsoft; and creates proprietary IP to support industry specific and custom client needs.
A professional services organization comprised of software engineers, systems architects, data scientists and CX strategists, this segment creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise-based CX technologies, including Amazon Web Services (“AWS”), Cisco, Genesys, Google, and Microsoft, and creates proprietary IP to support industry specific and custom client needs.
TTEC Digital serves clients across Enterprise and Small & Medium Sized (SMB) business segments and has a dedicated unit with government technology certifications serving the public sector. • TTEC Engage provides the digitally enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale.
TTEC Digital serves clients across enterprise and small and medium sized business segments and has a dedicated unit with government technology certifications serving the public sector. • TTEC Engage provides the digitally enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale across the world.
Our strengths crystallize in the following areas: • AI-Driven Technology Infrastructure : Our state-of-the-art technology infrastructure and global data center network unite to form a powerful foundation for AI-driven solutions. • Deep Industry Expertise : Our competitive advantage is further enhanced by our deep industry expertise, which allows us to tailor solutions that are not only technologically advanced but also intricately aligned with the specific nuances and regulatory requirements of the industries we serve. 3 Table of Contents • Strategic Technology Partnerships: Our robust partner ecosystem includes key players in digital channels, enhancing our ability to deliver efficient, high-impact personalized customer experiences. • Globally Deployed Operating Best Practices: We can deliver a consistent, scalable, high-quality experience to our clients' customers from any of our 70 global customer delivery centers and geographically disbursed work from home associate base. • Innovative Talent Development and Impact Sourcing: Our talent development strategy seamlessly merges cutting-edge innovation with a commitment to social responsibility.
We believe our key strengths include the following areas: • AI-Driven Technology Infrastructure : Our state-of-the-art technology infrastructure and global data center network unite to form a powerful foundation for AI-driven solutions. • Deep Industry Expertise : Our competitive advantage is further enhanced by our deep industry expertise, which allows us to tailor solutions that are not only technologically advanced but also intricately aligned with the specific nuances and regulatory requirements of the industries we serve. • Strategic Technology Partnerships: Our robust partner ecosystem includes key players in digital channels, enhancing our ability to deliver efficient, high-impact personalized customer experiences. • Globally Deployed Operating Best Practices: We can deliver a consistent, scalable, high-quality experience to our clients' customers from any of our 58 global customer delivery centers and geographically disbursed work from home associate base. • Innovative Talent Development and Impact Sourcing: Our talent development strategy seamlessly merges cutting-edge innovation with a commitment to social responsibility.
For TTEC Digital our main competitors include global systems integration firms, niche and large-scale technology consulting service providers, and technology companies whose solutions we integrate, deploy and maintain for clients, including Deloitte, Accenture, Infosys, Cognizant, Hitachi Data Systems, Slalom, Globant, ConvergeOne, Nice/Incontact and Five9, among others.
For TTEC Digital, our main competitors include global systems integration firms, niche and large-scale technology consulting service providers, and technology companies whose solutions we integrate, deploy and maintain for clients, including Deloitte, Accenture, Infosys, Cognizant, Hitachi Data Systems, Slalom, Globant, and ConvergeOne, among others.
For TTEC Engage, we primarily compete with in-house customer management captive business units and other companies that provide customer experience services, including Teleperformance, Foundever, Telus International, Concentrix, TaskUs, Intouch CX, Conduent, Genpact, Alorica, Ibex and EXL, among others. 4 Table of Contents Regulations Relevant to Our Business TTEC is subject to various domestic and international laws and regulations, permitting and licensing regimes (collectively, “Regulations”).
For TTEC Engage, we primarily compete with in-house customer management captive business units and other companies that provide customer experience services, including Teleperformance, Foundever, Telus International, Concentrix, TaskUs, Intouch CX, Conduent, Genpact, Alorica, Ibex and EXL, among others. Regulations Relevant to Our Business TTEC is subject to various domestic and international laws and regulations, permitting and licensing regimes (collectively, “Regulations”).
Cloud Migration and Security Are Board Level Imperatives: In the arena of customer experience, the migration to cloud-based platforms is rapidly becoming a fulcrum for transformation, offering unprecedented scalability, flexibility, and cost efficiency. Industry Consolidation Driven by a Highly Fragmented Market: The CX market is highly fragmented with no single provider dominating the market.
Cloud Migration and Security Are Board-Level Imperatives: In the arena of customer experience, the migration to cloud-based platforms is a fulcrum for transformation, offering unprecedented scalability, flexibility, quality assurance, and cost efficiency. Industry Consolidation Driven by a Highly Fragmented Market: The CX market is highly fragmented with no single provider dominating the market.
Our stature as an industry trailblazer in customer engagement is underpinned by an innovative strategy and a forward-looking vision.
Our stature as an industry leader in customer engagement is underpinned by an innovative strategy and a forward-looking vision.
Tailored to meet industry specific and business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, trust and safety and back-office solutions. The segment’s technology-enabled delivery model covers the entire associate lifecycle including recruitment, onboarding, training, delivery, workforce management and quality assurance.
Tailored to meet industry-specific business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, fraud mitigation and back-office solutions. The segment’s technology-enabled delivery model covers the entire solution lifecycle including associate recruitment, onboarding, training, delivery, workforce management and quality assurance.
Enterprise-Level Vendor Consolidation: Multinational corporations are increasingly favoring a consolidation of vendors within the CX domain.
Enterprise-Level Vendor Consolidation: Multinational corporations are increasingly favoring a consolidation of strategic technology vendors within the CX domain.
See "Risk Factors — Uncertainty and inconsistency in relevant privacy and data protection laws, the high cost of compliance with such laws, and the failure to comply with related contractual obligations may impact our ability to deliver services and our results of operations.” Work From Home Regulations: Regulations specific to work from home, which vary among jurisdictions and range from requirements to reimburse costs associated with remote work, to special health and safety mandates, and special government reporting requirements apply to part of our workforce.
See "Risk Factors — Uncertainty and inconsistency in privacy and data protection laws relevant to our business, the high cost of compliance with such laws, and the failure to comply with related contractual obligations may impact our ability to deliver services profitably.” 5 Table of Contents Work From Home Regulations: Regulations specific to work from home, which vary among jurisdictions and range from requirements to reimburse costs associated with remote work, to special health and safety mandates, and special government reporting requirements apply to part of our workforce.
TTEC Engage and the CX BPO Services Industry The TTEC Engage segment’s solutions are built to respond to the following market needs for clients. • Customer Support • Tech Support • Revenue Generation and Growth Services • Trust & Safety • AI Operations, including data annotation and labeling • Back-office Support TTEC Engage goes to market through a vertical approach with customized solutions that include industry specific talent, technology, certifications, and capabilities.
TTEC Engage and the CX BPO Services Industry The TTEC Engage segment’s solutions are built to respond to the following market needs for clients. • Customer Support • Tech Support • Revenue Generation and Growth Services • Fraud Mitigation • AI Operations, including data annotation and labeling • Back-office Support 3 Table of Contents TTEC Engage goes to market through a vertical approach with customized solutions that include industry specific talent, technology, certifications, and capabilities.
Our strategic imperatives include: • Deepening Client Relationships • Targeting Industry Leaders as Clients • Enhancing Global Sales and Marketing Synergies • Geographic Market Expansion • Strategic Acquisitions • Investment in Tech-Driven Innovation • Leveraging our Technology Partner Ecosystem • Delivering with Purpose through Impact Sourcing 2 Table of Contents By integrating these strategic pillars, we are setting a course to not only lead in the CX BPO sector but also to drive responsible and inclusive growth that benefits all stakeholders.
Our strategic imperatives include: • Deepening Client Relationships with new work types and expansion into new client lines of business • Targeting Industry Leaders as Clients • Enhancing Global Sales and Marketing Synergies • Geographic Market Expansion • Strategic Acquisitions • Investment in Tech-Driven Innovation • Diversifying and Leveraging our Technology Partner Ecosystem • Delivering with Purpose through Impact Sourcing By integrating these strategic pillars, we are setting a course to not only lead in the CX sector but also to drive responsible and inclusive growth that benefits all stakeholders.
AI design and delivery capabilities are woven across all four pillars. • Managed Services: Cloud application and premise support • CX Consulting: Transformation strategy and design • CX Analytics: Data science, engineering, and visualization • IP & Software: Custom software engineering through TTEC Digital’s IP and Software division The segment has a three-pronged go to market strategy that includes growing existing client relationships, partner channel motions and general market development.
AI design and delivery capabilities are woven across all five pillars of our offerings. • Professional Services: System design, configuration and integration • Managed Services: Cloud application and premise support • CX Consulting: Transformation strategy and design • CX Data and Analytics: Data science, engineering, and visualization • IP & Software: Custom software engineering through TTEC Digital’s IP and Software division The segment has a three-pronged go to market strategy that includes growing existing client relationships, partner channel motions and general market development.
Clients We develop long-term relationships with clients globally, including many of the worlds’ iconic brands, Fortune 1000 companies, public sector agencies, and hypergrowth companies. These organizations are in customer intensive industries or sectors, whose complexities and customer focus require a partner that can quickly design and build integrated technology and data-enabled services, often on a global scale.
Clients We develop long-term relationships with clients globally, including many of the worlds’ iconic brands, Fortune 1000 companies, small and medium-sized businesses, and public sector agencies. These organizations operate in customer intensive industries or sectors, where complexities and customer focus require a partner that can quickly design and build integrated technology and data-enabled services, often on a global scale.
In our TTEC Engage segment, most of our contracts can be terminated for convenience by either party, but our relationships with our top five clients have ranged from 17 to 24 years including multiple programs and contract renewals for most of these clients. In 2023, we had a 95% revenue retention rate for TTEC Engage, versus 97% in 2022.
In our TTEC Engage segment, most of our contracts can be terminated for convenience by either party, but our relationships with our top five clients have ranged from 5 to 25 years including multiple programs and contract renewals for most of these clients. In 2024, we had a 82% revenue retention rate for TTEC Engage, versus 95% in 2023.
ITEM 1. BUSINES S Our Business Founded in 1983, TTEC Holdings, Inc. (“TTEC”, “the Company”, “we”, “our”, or “us”; pronounced “T-TEC”) is a global customer experience (“CX”) outsourcing partner for marquis and disruptive brands and public sector clients.
ITEM 1. BUSINES S Our Business Founded in 1982, TTEC Holdings, Inc. (“TTEC”, “the Company”, “we”, “our”, or “us”; pronounced “T-TEC”) is a global customer experience (“CX”) outsourcing partner for marquee and high-growth brands and public sector clients.
During 2023, the combined TTEC Digital and TTEC Engage global operating platform delivered onshore, nearshore and offshore services in 22 countries on six continents -- the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Egypt, Germany, Greece, Honduras, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom – with the help of over 60,000 customer care associates, consultants, technologists, and CX professionals.
During 2024, the TTEC Digital and TTEC Engage global operating platform delivered onshore, nearshore and offshore services in 22 countries on six continents -- the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Egypt, Germany, Greece, Honduras, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom – with contributions from approximately 52,000 customer care associates, consultants, technologists, and CX professionals.
See, “Risk Factors -- Our financial results may be impacted by changes in laws/regulations and our failure to comply with laws/regulations relevant to our business.” We believe that our operations are in substantial compliance with relevant Regulations; but our compliance with Regulations may cause us to make additional capital and operational expenditures, the cost of which we may not always be able to pass to our clients through our pricing structures, and such additional investments could be material to our results of operations, financial position, or cash flows.
We believe that our operations are in substantial compliance with relevant Regulations; but our compliance with Regulations may cause us to make additional capital and operational expenditures, the cost of which we may not always be able to pass to our clients through our pricing structures, and such additional investments could be material to our results of operations, financial position, or cash flows.
As of December 31, 2023, TTEC served over 750 clients across targeted industry verticals including financial services, healthcare, public sector, telecom, technology, media, travel and hospitality, automotive and retail.
As of December 31, 2024, TTEC served over 715 clients across targeted industry verticals including financial services, healthcare, public sector, communications, technology, media, entertainment, travel and hospitality, automotive and retail.
They also support compliance with our contractual obligations and the laws and regulations governing our activities. We engage independent auditors to conduct general controls and business process (SOC1 and SOC2) assessments for technology solutions we use in our banking, financial services, and insurance (“BFSI”) and healthcare verticals.
They also support compliance with our contractual obligations and the laws and regulations governing our activities. We engage independent auditors to conduct assessments over transactional processes and data security (SOC1 and SOC2, respectively) for technology solutions we use in our banking, financial services, and insurance (“BFSI”) and healthcare verticals.
See "Risk Factors — Risks Related to Our Operations Outside of the United States. ” Work we do for some of our clients is subject to special licensing requirements, e.g., insurance producer and gaming licenses. The granting of these licenses can be discretionary on the part of regulatory authorities.
Work we do for some of our clients is subject to special licensing requirements, e.g., insurance producer and gaming licenses. The granting of these licenses can be discretionary on the part of regulatory authorities.
In 2023, TTEC Digital expanded its Hyderabad Innovation Studio in India with the goal of continuing to expand its offshore delivery capabilities, and currently approximately 40% of the staff are located in one of several offshore locations.
Since 2022, TTEC Digital has been expanding its Hyderabad Innovation Studio in India with the goal of continuing to grow its offshore delivery capabilities, and currently approximately 40% of the staff are located in one of several offshore locations.
Our trade name, logos, and names of our proprietary solution offerings are protected by their historic use and, in addition, by trademarks and service marks registered in 33 jurisdictions.
Our trade name, logos, and names of our proprietary solution offerings are protected by their historic use and, in addition, by trademarks and service marks registered in 33 jurisdictions. Our People TTEC recognizes that our employees are our most valuable asset.
As a U.S. company operating through non-U.S. subsidiaries, TTEC is subject to foreign exchange control, transfer pricing, cross-border tax Regulations, immigration and customs Regulations that prescribe how funds, goods, and people traverse between TTEC and our foreign subsidiaries.
As a U.S. company operating through non-U.S. subsidiaries, TTEC is subject to foreign exchange control, transfer pricing, cross-border tax Regulations, immigration and customs Regulations that prescribe how funds, goods, and people traverse between TTEC and our foreign subsidiaries. See "Risk Factors — Risks Related to Our Operations Outside of the United States ”.
TTEC operates through two business segments. • TTEC Digita l is one of the largest CX technology providers and is focused exclusively on the intersection of Contact Center As a Service (CCaaS), Customer Relationship Management (CRM), and Artificial Intelligence (AI) and Analytics.
TTEC operates and reports its financial results of operations through two business segments. • TTEC Digital is one of the largest CX technology and service providers and is focused on the intersection of Contact Center as a Service (“CCaaS”), Customer Relationship Management (“CRM”), and Artificial Intelligence (AI) and Analytics.
The Company designs, builds, and operates technology-enabled customer experiences across digital and live interaction channels to help clients increase customer loyalty, revenue, and profitability. By combining digital solutions with data-driven service capabilities, we help clients improve their customer satisfaction while lowering their total cost to serve.
The Company designs, builds, and operates technology-enabled customer experiences across live interaction channels and provides data-driven digital solutions to help clients improve customer satisfaction and loyalty, increase customer revenue and profitability, and optimize overall cost to serve.
These Regulations govern working conditions, paid time off, workplace safety, wage and hour standards, and hiring and employment practices. 5 Table of Contents Our public sector work is secured and delivered in compliance with various jurisdiction-specific government procurement regulations, like the Federal Acquisition Regulations (known as “FAR”) and government agency specific supplemental regulations that we comply with when we bid and deliver work for the U.S. federal government.
Our public sector work is secured and delivered in compliance with various jurisdiction-specific government procurement regulations, like the Federal Acquisition Regulations (known as “FAR”) and government agency specific supplemental regulations that we comply with when we bid and deliver work for the U.S. federal government.
Research and innovation have been a major factor in our success and we believe that they will continue to contribute to our growth in the future. We use our investment in research and development to create, commercialize, and deploy innovative business strategies and high-value technology solutions.
Research and innovation have been a major factor in our success and we believe that they will continue to contribute to our growth in the future.
As part of the licensing requirements, we may also be subject to extensive and expensive cybersecurity regulations or subject to heightened disclosure requirements that impact our companies or our executives.
As part of the licensing requirements, we may also be subject to extensive and expensive cybersecurity regulations or subject to heightened disclosure requirements that impact our companies or our executives. See, “Risk Factors -- Our financial results may be impacted by changes in laws and regulations that impact our business and by our failure to comply with such requirements ”.
See "Risk Factors — Services delivered by employees working from home represent a large portion of our delivery for some of our clients and this change in the operating model may subject us to new untested risks which we cannot always mitigate” .
See "Risk Factors — Services delivered by employees working remotely represent a large portion of our delivery for some of our clients and this operating model subjects us to certain risks that we cannot always mitigate”. Other Regulations: TTEC is a labor-intensive business that is subject to complex labor and employment laws established by the U.S.
Our revenue for fiscal 2023 was $2.463 billion, approximately $487 million, or 20%, which came from our TTEC Digital segment and $1.976 billion, or 80%, which came from our TTEC Engage segment.
Our revenue for fiscal 2024 was $2,208 billion, of which approximately $459 million, or 21%, was generated from our TTEC Digital segment and $1,749 billion, or 79%, was generated from our TTEC Engage segment.
Our Integrated Service Offerings and Business Segments TTEC Digital and the CX Technology Services Industry TTEC Digital buyers are seeking solutions in several areas including cost optimization, migration from outdated legacy platforms to more agile cloud environments, lack of CX talent and expertise and a need for a practical way forward with AI.
Our Integrated Service Offerings and Business Segments TTEC Digital and the CX Technology Services Industry TTEC Digital clients are seeking solutions in many areas including cost optimization, CX technology modernization, inclusive of migrating to a more agile cloud-based ecosystem, improved CX talent and expertise, and practical solutions to further enable CX applications, including the design, implementation and pragmatic delivery of AI capabilities.
Today, we are executing on a more expansive, holistic strategy by transforming our business into higher-value offerings through organic investments and strategic acquisitions. As we execute, we are differentiating ourselves in the marketplace and entering new markets that introduce us to an expanded competitive landscape.
As we execute, we are differentiating ourselves in the marketplace and entering new markets that introduce us to an expanded competitive landscape.
We deliver value to our clients through, and our success in part depends on, certain proprietary technologies and methodologies. We leverage U.S. and foreign patent, trade secret, copyright, and trademark laws as well as confidentiality, proprietary information, non-disclosure agreements, and key staff non-competition agreements to protect our proprietary technology.
We leverage U.S. and foreign patent, trade secret, copyright, and trademark laws as well as confidentiality, proprietary information, non-disclosure agreements, and key staff non-competition agreements to protect our proprietary technology. As of December 31, 2024, TTEC held 100 U.S. and non-U.S. patents in 9 jurisdictions that we leverage in our operations and as marketplace differentiation for our service offerings.
Evolving Customer Expectations and Delivery Models: In today's customer experience landscape, evolving customer expectations present a distinct market opportunity for brands that can adeptly navigate and capitalize on evolving customer demands.
Evolving Customer Expectations and Delivery Models: In today's customer experience landscape, evolving customer expectations present a distinct market opportunity for brands that can adeptly navigate and capitalize on evolving customer demands. 2 Table of Contents Our Growth Strategy As a leader and innovator in the global customer experience technology services and business process outsourcing (BPO) markets, our strategy is directed towards sustainable long-term growth in revenue and profitability.
In several of our offerings across TTEC Digital and TTEC Engage, we enter into long-term relationships that provide us with a more predictable recurring revenue stream. In our TTEC Digital segment, our CX cloud and managed services technology solution contracts have an average three-year term with penalties in the case a client terminates for convenience.
In 2024, our top five and 10 clients represented 32% and 49% of total revenue, respectively. In several of our offerings across TTEC Digital and TTEC Engage, we enter into long-term relationships that provide us with a more predictable recurring revenue stream.
Across our lines of business, principal competitive factors include: client relationships, technology and process innovation, integrated solutions, digital and virtual delivery capabilities, operational performance and efficiencies, pricing, brand recognition, and financial strength. Our strategy in maintaining market leadership is to invest, innovate, and provide integrated value-driven services, all centered around customer engagement management.
Our competitors vary by geography and business segment, and range from large multinational corporations to smaller, narrowly focused enterprises. Across our lines of business, principal competitive factors include: client relationships, technology and process innovation, quality and stability of the integrated solutions, digital and virtual delivery capabilities, operational performance and efficiencies, pricing, brand recognition, and financial strength.
Certain of our communications clients provide us with telecommunication services through arm’s length negotiated transactions. These clients currently represent approximately 6% of our total annual revenue. Expenditures under these supplier contracts represent less than 1% of our total operating costs.
The reduction is primarily attributable to one of our larger, long-term financial services clients that exited one of the lines of business that TTEC historically supported. Certain of our communications clients provide us with telecommunication services through arm’s length negotiated transactions. These clients currently represent approximately 6% of our total annual revenue.
TTEC demonstrates its market leadership through strategic collaboration across TTEC Digital and TTEC Engage when there is client demand and fit for our integrated solutions. This partnership is central to our ability to deliver comprehensive and transformational customer experience solutions to our clients, including integrated delivery, go-to-market and innovation for truly differentiated, market leading CX solutions.
TTEC pursues its CX market leadership through its TTEC Digital and TTEC Engage business segments and, based upon client needs, through strategic collaboration between the segments. TTEC’s ability to deliver comprehensive and transformational customer experience solutions to its clients is a marketplace differentiation, including integrated CX technology and service solutions, go-to-market strategies, and innovative offerings.
Our Growth Strategy As a leader and innovator in the global customer experience technology services and business process outsourcing (BPO) landscape, our strategy is directed towards sustainable growth in revenue and profitability. Our approach is to leverage our operational excellence in customer engagement with high-margin, technology-infused platforms and managed services.
Our approach is to leverage our 42 years of operational excellence in customer engagement with technology-infused platforms and managed services.
TTEC Digital takes a technology agnostic approach to these challenges and focuses on designing and delivering solutions specific to each client’s specifications. TTEC Digital enters into strategic partnerships with the leading CX software vendors including Genesys, Microsoft, Cisco, AWS and Google which positions TTEC Digital to support the majority of CX platform requirements.
TTEC Digital takes a technology agnostic approach to these challenges and focuses on designing and delivering solutions to each client’s specific business needs at the intersection of contact center, CRM, and AI and Analytics.
Competition We are a leading global customer experience outsourcing partner for many of the world’s marquis and disruptive brands, Fortune 1000 companies, and public sector clients. Our competitors vary by geography and business segment, and range from large multinational corporations to smaller, narrowly focused enterprises.
Expenditures under these supplier contracts represent less than 1% of our total operating costs. 4 Table of Contents Competition We are a leading global customer experience outsourcing partner for many of the world’s marquee and high-growth brands, Fortune 1000 companies, and public sector clients.
Other Regulations: TTEC is a labor-intensive business that is subject to complex labor and employment laws established by the U.S. Department of Labor, state and local regulatory bodies, and similar regulators in jurisdictions outside of the U.S.
Department of Labor, state and local regulatory bodies, and similar regulators in jurisdictions outside of the U.S. These Regulations govern working conditions, paid time off, workplace safety, wage and hour standards, and hiring and employment practices.
TTEC Digital’s solutions are built to respond to market needs for both enterprise and small and medium-sized business clients.
TTEC Digital supports the majority of CX platform and solution requirements through its strategic partnerships with the leading CX software vendors including Genesys, Microsoft, Cisco, AWS, Google, Salesforce, ServiceNow, and Nice among others. TTEC Digital’s solutions are built to respond to market needs for both enterprise and small and medium-sized business clients.
Approximately 49% of our employees are based in the Asia-Pacific region, 38% in North America (with 37% in the United States), 8% in Central and South America, and 5% in the Europe, Middle East and Africa (EMEA) region. Approximately 61% of our employees were in a work-at-home environment and 39% worked onsite.
Our workforce is geographically diverse: • Asia-Pacific: 45% • North America: 37% (36% in the United States) • Central and South America: 9% • Europe, Middle East, and Africa (EMEA): 9% Approximately 53% of our employees worked remotely, while 47% worked onsite. Employee Experience and Engagement TTEC is dedicated to creating a workplace where employees feel valued, engaged, and empowered.
Our People As of December 31, 2023, TTEC had over 60,000 employees, approximately 2,400 of whom are CX professionals serving TTEC Digital clients and approximately 57,600 of whom serve TTEC Engage clients.
Workforce Composition As of December 31, 2024, TTEC had approximately 52,000 employees globally, with approximately 1,700 serving TTEC Digital clients and 50,300 serving TTEC Engage clients.
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To this end we were acquisitive in the last several years, including our acquisition in April 2022 of certain public sector assets of Faneuil, Inc. that included healthcare exchange and transportation services contracts.
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We also invest to broaden our CX product and service capabilities and partnerships, increase our global client base and industry expertise, expand our geographic footprint to the needs of our global clientele, and further scale our solutions within and between our TTEC Digital and TTEC Engage segments. 1 Table of Contents Recent Developments As previously disclosed in the Company’s press release on September 30, 2024, the Company’s Board of Directors has established a special committee consisting of independent directors (the “Special Committee”) to evaluate the unsolicited, preliminary, non-binding proposal from TTEC founder, Chairman and Chief Executive Officer, Kenneth Tuchman, to take the Company private at a proposed purchase price of $6.85 per share to the Company’s other shareholders.
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We also completed an acquisition early in the second quarter of 2021 of a provider of Genesys and Microsoft cloud contact center services, which followed an acquisition in the second half of 2020 of a preferred Amazon Connect cloud contact center service and implementation provider.
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Mr. Tuchman beneficially owns approximately 58% of the Company’s common stock. As set forth in Amendment No. 3 to Schedule 13D filed with the SEC by Mr. Tuchman and certain entities affiliated with Mr.
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We have extensive expertise in the healthcare, automotive, national/federal and state and local government, financial services, communications, technology, travel and logistics, media and entertainment, e-tail/retail, and transportation industries. We serve more than 750 diverse clients globally, including many of the world’s iconic brands, Fortune 1000 companies, public sector clients, and disruptive hypergrowth companies.
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Tuchman on September 30, 2024, the proposal is conditioned on, among other things, the receipt of financing for the transaction, the negotiation and execution of a definitive agreement, approval and recommendation of the proposal by the Special Committee, and approval by holders of a majority of the shares of the Company’s common stock not owned by Mr.
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Our Industry – Key Emerging Themes The CX landscape is undergoing a dynamic transformation, fueled by technological advancements and evolving customer expectations. AI-powered CX: As brands endeavor to integrate artificial intelligence into customer experience, many stumble by failing to apply AI strategically for true personalization and insightful automation.
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Tuchman, his affiliates, and the Company’s executive management. The Special Committee with its own advisors is evaluating the proposal and will determine the appropriate course of action and process. Our Industry – Key Emerging Themes The CX landscape is undergoing a dynamic transformation, driven by technological advancements and evolving customer experience expectations.
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In 2023, our top five and 10 clients represented 36% and 50% of total revenue, respectively. In early 2024, one of our larger financial services clients notified us that it is exiting one of the lines of business that we support.
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Based on our experience of operating the business over the last 40+ years, we are observing the following trends and opportunities, among others: AI-powered CX: As brands endeavor to integrate artificial intelligence into customer experience, many companies lack the necessary technology and delivery readiness or face challenges in providing quality personalized and insightful automation.
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As of December 31, 2023, we had 5 patent applications pending in 5 jurisdictions; and also held 102 U.S. and non-U.S. patents in 9 jurisdictions that we leverage in our operations and as marketplace differentiation for our service offerings.
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In our TTEC Digital segment, our CX managed services technology solution contracts have an average three-year term and include early termination penalties.
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For over 40 years, TTEC has championed exceptional customer experiences by prioritizing exceptional employee experiences. We empower our people through investments in their health, wellness, and career growth. It is this commitment that has earned us recognition as a Forbes’ “best place to work” for three consecutive years.
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Our strategy in maintaining market leadership is to invest, innovate, and provide integrated value-driven services, all centered around customer engagement management. We are executing on a more expansive, holistic strategy by transforming our business into higher-value offerings through organic investments and strategic acquisitions.
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Attracting, developing, and retaining top talent starts with a focus on meaningful engagement and purposeful development.
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We use our investment in research and development to create, commercialize, and deploy innovative business strategies and high-value technology solutions. 6 Table of Contents We deliver value to our clients through, and our success in part depends on, certain proprietary technologies and methodologies.
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That is why our People Strategy empowers our employees to not only keep pace with the rapidly changing workplace, but also thrive in it. 6 Table of Contents Talent Development: To support the advancement of our employees and prepare them for the demands of rapidly changing workplace and client requirements, we offer career development-focused programs, technologies, and resources.
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We are committed to fostering a positive and rewarding work environment that attracts, develops, and retains the highest quality talent. This commitment is integral to our business strategy and our ability to deliver exceptional customer experiences.
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We invest in career development, providing targeted programs, technologies, and resources centered on developing capabilities from fundamental business skills to AI and digital transformation. In 2023, we launched a Negotiation Learning Center of Excellence and TTEC Digital Talent programs. Further underscoring our commitment to development, our teams completed over 100,000 hours of professional development in 2023.
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We prioritize initiatives that enhance the overall employee experience, including: • Health and Wellness Programs: Comprehensive benefit packages that support employee well-being, including physical and mental health. • Employee Recognition Programs: Formal and informal programs that recognize and reward employee contributions and achievements. • Humanity First: Provide a welcoming workplace where all feel respected and valued, can be themselves, connect authentically with others, and work together to delight our customers. • Work-Life Balance : Flexible work arrangements and programs that support employees in balancing their professional and personal lives.
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Our iAspire™ platform drives our internal mobility program where employees share their ambitions and look for potential job matches within the Company.
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Workplace Safety TTEC is committed to providing a safe and healthy work environment for all employees.
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Our commitment to development has yielded results: 71% of our 2023 open positions were filled internally, 80% of our leaders have been promoted from within, and we have thousands of employees around the globe with over 5 years of tenure. Pay for Performance : Our performance management system fosters both professional growth and company success.
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We maintain appropriate safety programs and protocols, including: • Compliance with Regulations: Adherence to applicable occupational health and safety regulations and standards. • Safety Training: Regular training programs to ensure employees are knowledgeable about safety procedures and protocols that apply to their jobs. • Hazard Identification and Mitigation: Proactive identification and mitigation of workplace hazards to prevent accidents and injuries. • Emergency Preparedness: Robust emergency preparedness plans and procedures to ensure employee safety in the event of an emergency. • Ergonomics and Workplace Design: Promoting ergonomic principles and best practices in workplace design to minimize the risk of injuries. 7 Table of Contents Talent Development Programs TTEC invests in a range of programs to support employee growth and development, aligning with the evolving needs of the business and our clients.
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Our focus on a holistic performance management approach yields award winning employee engagement and satisfaction, improved alignment with company goals, enhanced individual and team performance, and a culture of continuous learning and development.
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In 2024, TTEC employees completed over 190,000 hours of professional development.
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Our philosophy, closely aligned with our operating rhythm and our Company values, emphasizes: ● Clear Goal Setting: Regular collaborative goal setting ensures everyone is aligned with strategic objectives and individual development. ● Consistent Check-Ins, Feedback, and Recognition: Frequent touchpoints provide timely feedback and support, keeping employees engaged and on track.
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Key initiatives include: • Sales Learning Center of Excellence: Provides specialized training and resources for our sales teams. • AI Unplugged: A global community and knowledge hub focused on artificial intelligence, offerings, thought leadership, a Genius Lab for solution development, and the "Learn AI" series to enhance employee skills. • Digital Transformation and AI Certifications: TTEC offers specialized certifications in AI CX Transformation and AI-Savvy leadership.
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Formal feedback and recognition are encouraged both formally and informally. ● Quarterly Reviews: In-depth discussions assess progress, identify opportunities for improvement, and celebrate achievements. ● Targeted Development: We invest in employee growth through personalized development plans and resources. ● Transparent Compensation: Our "pay for performance" program directly links rewards to contributions, motivating excellence and reflects our commitment to reward short and long-term performance that aligns with and drives long-term stockholder value. ● In 2023, we made several improvements to more closely link our pay for performance, including Redesigned Empower™ , our proprietary performance management tool.
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These programs achieved a 95% participation rate for their target audience in 2024. Internal Mobility and Leadership Development TTEC encourages internal mobility through its iAspire™ platform, which enables employees to explore career opportunities within the company.
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The enhanced platform has improved performance and employee retention. Leadership Development : Our comprehensive talent development strategy can be easily customized and launched by segment and/or department and enables leaders and teams to plan and build talent capability.
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This commitment is reflected in our internal hiring and promotion rates: • 72% of open positions in 2024 were filled internally. • 82% of TTEC leaders have been promoted from within. Performance Management and Compensation TTEC's performance management system emphasizes clear goal setting, continuous feedback, and quarterly reviews to foster individual and company success.
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Talent planning and development for executive roles is accomplished through a talent review and succession planning process which includes consulting, training, data analytics, calibration, and development recommendations. We evaluate all mid-level managers and above roles, determine top talent and successors, invest in managers’ and their successors’ development, and align their compensation to meet our growth goals.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Our Business, Our Strategy and Our Industry If our business strategy is not successful, our business and financial prospects will be affected Our growth strategy is based on delivering our contact center outsourcing expertise with our innovative and disruptive AI-enabled technologies, CX consulting, data analytics, client growth solutions, and customer experience focused system design and integration enabled through industry specific client relationships, scaled global delivery footprint, CX partner ecosystem, and strategic M&A.
Biggest changeWe have grouped these risk factors into six categories: • risks related to our business, our strategy, and our industry; • risks related to our financial operations; • risks related to our use of technology and third-party services; • risks related to legal and regulatory matters that impact our business; • risks related to our operations outside of the United States; and • risks related to ownership of our common stock. 8 Table of Contents Risks Related to Our Business, Our Strategy and Our Industry If our business strategy is not successful, our business and financial prospects will be affected Our business strategy is based on delivering our contact center outsourcing expertise with our innovative and disruptive AI-enabled technologies, CX consulting, data analytics, client growth solutions, and CX focused system design and integration.
Clients, who buy these third-party solutions and related services from the Company, hold us responsible for the stability and reliability of these platforms, as well as for any losses or damages arising from system outages and cybersecurity incidents, involving these third-party solutions.
Clients, who buy these third-party solutions and related services from us, hold the Company responsible for the stability and reliability of these platforms, as well as for any losses or damages arising from system outages and cybersecurity incidents, involving these third-party solutions.
Our employees may fail to adhere to operational controls or may engage in fraud, which could subject us to liability and negatively impact our client relationships and reputation We depend on our employees to follow strict processes and controls when delivering services to our clients and their customers.
Our employees may fail to adhere to our operational controls or may engage in fraud, which could subject us to liability and negatively impact our client relationships and reputation We depend on our employees to follow strict processes and controls when delivering services to our clients and their customers.
While we believe that we take reasonable security measures to prevent the unauthorized access to our information technology systems and to our clients’ systems, and to protect the privacy of personal and proprietary information that we access and store, our security controls over our systems have not prevented in the past and may not prevent in the future improper access to these systems or unauthorized disclosure of this information.
While we believe we take reasonable security measures to prevent unauthorized access to our information technology systems and to our clients’ systems, and to protect the privacy of personal and proprietary information that we access and store, our security controls over our systems have not prevented in the past and may not prevent in the future improper access to these systems or unauthorized disclosure of this information.
Our results of operations may be adversely impacted by foreign currency exchange rate risk Many contracts that we service from delivery centers or with remote employees based outside of the United States are typically priced, invoiced, and paid in U.S. and Australian dollars, British pounds, or Euros, while the costs incurred to deliver these services are incurred in the functional currencies of the country of operations.
Our results of operations may be adversely impacted by foreign currency exchange rate risk Many contracts that we service from delivery centers or with remote employees that are based outside of the United States are typically priced, invoiced, and paid in U.S. and Australian dollars, British pounds, or Euros, while the costs incurred to deliver these services are incurred in the functional currencies of the country of operations.
Our inability to timely secure or maintain licensing required to perform certain regulated services may significantly impact our results of operations Some of the services we provide for our healthcare, financial services, gaming, and other highly regulated clients require for some of our legal entities, directors and officers of these entities, and employees who perform the services to be licensed by authorities that oversee these regulated activities.
Our inability to timely secure or maintain licensing required to perform certain of our regulated services may significantly impact our results of operations Some of the services we provide for our healthcare, financial services, gaming, and other highly regulated clients require for some of our legal entities, directors and officers of these entities, and employees who perform the services to be licensed by authorities that oversee these regulated activities.
While we have taken a responsible approach to how AI/GenAI is included in our offerings and in our business, there can be no assurances that future AI regulations would not adversely impact us or conflict with our approach to AI, including affecting our ability to offer AI/GenAI in our service offerings without costly investments in modifications to our offerings and additional compliance requirements, impacting our results of operations or our reputation.
While we have taken a responsible approach to how AI is included in our offerings and in our business, there can be no assurances that future AI regulations would not adversely impact us or conflict with our approach to AI, including affecting our ability to offer AI in our service offerings without costly investments in modifications to our offerings and additional compliance requirements, impacting our results of operations or our reputation.
Such unauthorized access or disclosure could subject, and in the past has subjected us to significant liability under relevant laws, our contracts, and our licenses to perform certain regulated services; and could harm our reputation, resulting in material impacts to our operations, loss of future revenue and business opportunities.
Such unauthorized access or disclosure could subject, and in the past has subjected us to significant liability under relevant laws, our contracts, and our licenses to perform certain regulated services; and could harm our reputation, resulting in material impacts to our results of operations, loss of future revenue and business opportunities.
When our employees disregard or intentionally breach our or our client’s established controls, acting alone or in collusion with others, we are responsible to our clients for resulting impacts, and could be subject to significant liability, fines, and penalties that could impact our financial performance and our reputation.
When our employees disregard or intentionally breach our or our client’s established controls, acting alone or in collusion with others, we are responsible to our clients for the resulting impacts, and could be subject to significant liability, fines, and penalties that could impact our financial performance and our reputation.
Our ongoing cost management measures must be balanced against the need for investment to support our growth, technology transformation in our business, and increasing cybersecurity threats. The cost management measures are also being impacted by inflationary pressures in the economies where we do business.
Our ongoing cost management measures must be balanced against the need for investment to support our growth and address technology transformation in our business and increasing cybersecurity threats. The cost management measures are also being impacted by inflationary pressures in the economies where we do business.
If any of the risks or uncertainties discussed below actually occur, our business, financial condition, results of operations, or liquidity could be materially adversely affected, and the market price of our stock could decline. The risks described below are not the only risks that our business faces.
If any of the risks or uncertainties discussed below actually occur, our business, results of operations, or our financial condition, including our liquidity could be materially adversely affected, and the market price of our stock could decline. The risks described below are not the only risks that our business faces.
Any client perceptions that our systems or the information system environments that we support for our clients are not secure could result in a material loss of business and revenue and could damage our reputation and competitiveness. Cyber fraud .
Any client perceptions that our systems or the information system environments that we support for our clients are not sufficiently secure could result in a material loss of business and revenue and could damage our reputation and competitiveness. Cyber fraud .
Because we hire large numbers of employees in the United States and our industry has large turnover, the potential size of plaintiffs’ classes in these wage and hour lawsuits can be considerable, creating potential material risks to the cost of our operations.
Because we hire large numbers of employees in the United States and our industry has large turnover, the potential size of plaintiffs’ classes in these wage and hour and ERISA lawsuits can be considerable, creating potential material risks to the cost of our operations.
Our clients are also experiencing economic pressures, and faced with cost increases from us, may take over the delivery of the services we historically performed for them or engage less expensive providers.
Our clients are also experiencing economic pressures and when faced with cost increases from us, may take over the delivery of the services we historically performed for them or engage less expensive providers.
Our results of operations directly impact the value of our stock, but many developments affecting the CX solutions industry in general, and not directly related to us or controlled by us, may also have material impact on our stock value.
Our results of operations directly impact the value of our stock, but many developments affecting the CX solutions industry in general, and not directly related to us or controlled by us, may also have a material impact on our stock value.
Even if we are successful in identifying and executing these transactions, they may subject our business to risks that could impact our results of operation, including: • Inability to integrate acquired companies effectively and realize anticipated acquisition benefits; • Diversion of management’s attention to the integration of the acquired businesses at the expense of delivering results for the legacy business; • Inability to appropriately scale critical resources to support the business of the expanded enterprise; • Inability to retain key employees of the acquired businesses and/or inability of such key employees to be effective as part of our operations; • Impact of liabilities, compliance failures, or ethical issues of the acquired businesses undiscovered or underestimated as part of the acquisition due diligence; • Failure to realize anticipated growth opportunities from a combined business, because existing and potential clients may be unwilling to consolidate business with a single service provider or to stay with the acquirer post-acquisition; • Impacts of cash on hand and debt incurred to finance acquisitions, thus reducing liquidity for other significant strategic objectives; • Inadequate or ineffective internal controls, disclosure controls, corruption prevention policies, human resources and other key policies and practices of the acquired companies; and • Reduced revenue and income and resultant stock price impact due to divestiture transactions.
Even if we are successful in identifying and executing these transactions, they may subject our business to risks that could impact our results of operation, including: • Inability to integrate acquired companies effectively and realize anticipated acquisition benefits; • Diversion of management’s attention to the integration of the acquired businesses at the expense of delivering results for the legacy business; • Inability to appropriately scale critical resources to support the business of the expanded enterprise; • Inability to retain key employees of the acquired businesses and/or inability of such key employees to be effective as part of our operations; • Impact of liabilities, compliance failures, or ethical issues of the acquired businesses that were not discovered or were underestimated as part of the acquisition due diligence; • Failure to realize anticipated growth opportunities from a combined business, because existing and potential clients may be unwilling to consolidate with a single service provider or to stay with the acquirer post-acquisition; • Impacts of cash on hand and debt incurred to finance acquisitions, thus reducing liquidity for other significant strategic objectives; • Inadequate or ineffective internal controls, disclosure controls, corruption prevention policies, human resources and other key policies and practices of the acquired companies; and • Reduced revenue and income and resultant stock price impact due to divestiture transactions.
One involved a global supply chain compromise that impacted thousands of companies worldwide, including a TTEC Digital subsidiary and its managed services clients. Another involved a ransomware attack that temporarily disrupted the TTEC Engage business.
One involved a global supply chain compromise that impacted thousands of companies worldwide, including a TTEC Digital subsidiary and its managed services clients. Another involved a ransomware attack that temporarily disrupted a portion of the TTEC Engage business.
Any changes in our projections of our results of operations, or our failure to meet or exceed these projections and the investors’ and analysts’ expectations about our results of operations could result in material impact on our stock value.
Any changes in our projections of our results of operations or our failure to meet or exceed these projections and the investors’ and analysts’ expectations about our results of operations could result in a material impact on our stock value.
These partners designate us as their preferred system integrator, and implementation and maintenance partner, recommending us to their technology platform customers, and providing us with sales leads for services and technology resale opportunities.
These partners designate us as a preferred system integrator, and implementation and maintenance partner, recommending us to their technology platform customers, and providing us with sales leads for services and technology resale opportunities.
ITEM 1A. RISK FACTOR S This section discusses the most significant factors that could affect our business, results of operations and financial condition. In evaluating our company and our common stock, you should carefully consider the risks and uncertainties discussed in this and the other information contained in this Annual Report on Form 10-K.
ITEM 1A. RISK FACTOR S This section discusses the most significant factors that could affect our business, results of operations and financial condition. In evaluating our company and our common stock, you should carefully consider the risks and uncertainties discussed in this section and the other information found in this Annual Report on Form 10-K.
Demand for qualified personnel with multi-lingual capabilities and fluency in English may exceed supply. Demand for highly skill technical staff with experience that reflects emerging technologies can also be limited. While we invest in employee retention, our industry is known for high employee turnover, and we are continuously recruiting and training replacement staff.
Demand for qualified personnel with multi-lingual capabilities and fluency in English may exceed supply. Demand for highly skilled technical staff with experience that reflects emerging technologies can also be limited. While we invest in employee retention, our industry is known for high employee turnover, and we are continuously recruiting and training replacement staff.
These licensing requirements vary among jurisdictions where we provide services; and the ongoing compliance requirements to maintain and renew these licenses also varies and change often.
These licensing requirements vary among jurisdictions where we provide services; and the ongoing compliance requirements to maintain and renew these licenses also change often.
The Biden administration and many European governments have called for changes to fiscal and tax policies, which may include comprehensive tax reform. Many of these proposed changes to the taxation of our activities, if enacted, could increase our effective tax rate or adversely affect our business, financial condition, or results of operations.
The Trump administration and many European governments have called for changes to fiscal and tax policies, which may include comprehensive tax reform. Many of these proposed changes to the taxation of our activities, if enacted, could increase our effective tax rate or adversely affect our business, financial condition, or results of operations.
While we have multiple engagements with our largest clients and all contracts are unlikely to terminate at the same time, the contracts with our five largest clients expire between 2024 and 2027; and there can be no assurance that these contracts will continue to be renewed at all or be renewed on favorable terms.
While we have multiple engagements with our largest clients and all contracts are unlikely to terminate at the same time, the contracts with our five largest clients expire between 2025 and 2027; and there can be no assurance that these contracts will continue to be renewed at all or be renewed on favorable terms.
Our investigation did not uncover evidence that this unauthorized access to clients’ systems and customer data resulted in harm, as the goal of the scheme appeared to be access to wages and not misuse of data; but notifications to affected clients, their customers, and relevant regulatory agencies resulted in litigation.
Our investigation did not uncover evidence that this unauthorized access to clients’ systems and their customers’ data resulted in harm, as the goal of the scheme appeared to be access to wages and not misuse of data; but notifications to affected clients, their customers, and relevant regulatory agencies resulted in litigation.
If and to the extent we do not negotiate long-term contract terms that provide for fee adjustments to reflect increases in our cost of service, our business, financial conditions, and results of operation could be materially impacted. We provide service level commitments to certain customers.
If and to the extent we do not negotiate long-term contract terms that provide for fee adjustments to reflect increases in our cost of service, our business, financial conditions, and results of operations could be materially impacted. We provide service level commitments to certain customers.
If we are unable to manage our work from home environment effectively to address these and other risks unique to remote service delivery, or if we cannot maintain client confidence in our work from home environment, our reputation and results of operations may be impacted.
If we are unable to manage our remote service delivery environment effectively and reliably to address these and other risks unique to remote service delivery, or if we cannot maintain client confidence in our work from home offerings, our reputation and results of operations may be impacted.
Our delivery model involves geographic concentration outside of the United States, exposing us to significant operational risks Our business model is dependent on our ability to locate a significant portion of our delivery and corporate functions in low-cost jurisdictions around the globe.
Our delivery model involves geographic concentration outside of the United States, exposing us to significant operational risks Our business model is dependent on our ability to locate a significant portion of our delivery and overhead functions in low-cost jurisdictions around the globe.
As others, we are experiencing an increase in frequency of cyber fraud attempts, including phishing attempts, and so-called “social engineering” attacks, which typically seek unauthorized access into the environment, money transfers or unauthorized information disclosure. We train our employees to recognize these attacks and have implemented proactive risk mitigation measures to curb them.
As others, we are experiencing an increase in frequency of cyber fraud attempts, including phishing and smishing attempts, and so-called “social engineering” or “deep fake” attacks, which typically seek unauthorized access into the environment, money transfers or unauthorized information disclosure. We train our employees to recognize these attacks and have implemented proactive risk mitigation measures to curb them.
Our indebtedness could have adverse consequences on our business and financial condition, including: • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness; • exposing us to increased interest expense; • limiting our ability to obtain additional financing for working capital, capital expenditures, strategic acquisitions and general corporate or other purposes; • limiting our ability to pay dividends and make other distributions; • increasing our vulnerability to adverse economic, industry or competitive developments; and • placing us at a competitive disadvantage compared to our competitors who may be better positioned to take advantage of opportunities that our leverage prevents us from exploiting. 17 Table of Contents Our ability to satisfy our debt obligations will depend on our future performance, which will be affected by financial, business, economic and other factors.
Our indebtedness and financial covenants under our credit facility could have adverse consequences on our business and financial condition, including: • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness; • exposing us to increased interest expense; • limiting our ability to obtain additional financing for working capital, capital expenditures, strategic acquisitions and general corporate expenditures or other purposes; • limiting our ability to pay dividends and make other distributions; • increasing our vulnerability to adverse economic, industry or competitive developments; and • placing us at a competitive disadvantage compared to our competitors who may be better positioned to take advantage of opportunities that our leverage prevents us from exploiting. 14 Table of Contents Our ability to satisfy our debt obligations will depend on our future performance, which will be affected by financial, business, economic and other factors.
The fluctuations between the currencies of the contract and operating currencies present foreign currency exchange risks. Furthermore, because our financial statements are denominated in U.S. dollars, but approximately 14% of our revenue is derived from contracts denominated in other currencies, our results of operations could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies.
The fluctuations between the currencies of the contract and operating currencies present foreign currency exchange risks. Furthermore, because our financial statements are denominated in U.S. dollars, and approximately 15% of our revenue is derived from contracts denominated in other currencies, our results of operations could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies.
The plaintiffs’ law firms seek large settlements based entirely on the number of potential plaintiffs in a class, whether or not there is any basis for the claims that they make on behalf of their clients, most of whom do not believe themselves to be aggrieved nor seek recourse until solicited.
These plaintiffs’ law firms seek large settlements based entirely on the number of potential plaintiffs in a class, whether or not there is any basis for the claims that they make on behalf of these potential plaintiffs, most of whom do not believe themselves to be aggrieved nor seek recourse until solicited.
He can elect all of the members of our board of directors, effect stockholder actions by written consent in lieu of stockholder meetings, and determine the outcome of all matters submitted to a vote of our stockholders, including matters involving mergers or other business combinations, the acquisition or disposition of assets, the occurrence of indebtedness, the issuance of any additional shares of common stock or other equity securities and the payment of dividends on our common stock. 25 Table of Contents The interest of Mr.
He can elect all of the members of our board of directors, effect stockholder actions by written consent in lieu of stockholder meetings, and determine the outcome of almost any matter submitted to a vote of our stockholders, including matters involving mergers or other business combinations, the acquisition or disposition of assets, the occurrence of indebtedness, the issuance of any additional shares of common stock or other equity securities and the payment of dividends on our common stock. 26 Table of Contents The interest of Mr.
Our cost management strategies include optimizing the alignment between the demand for our services and our resource capacity, including our delivery centers’ utilization; investment in our work from home environment; the costs of service delivery; the cost of sales and general and administrative costs as a percentage of revenues; offshoring of certain corporate functions; and the use of automation for standard tasks.
Our cost management strategies include optimizing the alignment between the demand for our services and our resource capacity, including our delivery centers’ utilization; investment in our remote work environment; the costs of service delivery; sales and general and administrative costs as a percentage of revenues; offshoring of certain corporate functions; and the use of automation for standard tasks.
For example, our stock value may be impacted by: • the performance of others who offer similar services and how their performance is perceived by investors and analysts in comparison to our performance; • general economic, industry and market conditions; • acquisitions or consolidation in our industry; • our capital structure, including the amount of our indebtedness, as it compares to others in our industry; • changes in key personnel; • changes in market valuations of similar companies; • the depth and liquidity of the market for our common stock; • fluctuations in currency exchange rates; • our dividend policy as it compares to the dividend policies of other similar companies; • investors’ perception about our industry in general, and about our business and our management team; • the adequacy of our ESG practices; • the passage of adverse legislation or other regulatory developments in countries where we do business; • the stock market fluctuations due to geopolitical events, energy prices or terrorist activities; and • the impact of the factors referred to elsewhere in “Risk Factors.” Our stock value may also be impacted by financial projections that we provide to the public and whether these projections align with the expectations of our current investors, potential investors, and financial analysts who follow and comment on our stock.
For example, our stock value may be impacted by: • the performance of others who offer similar services and how their performance is perceived by investors and analysts in comparison to our performance; • changes in market valuations of similar companies; • investors’ perception about our industry in general, and about our business and our management team; • general economic, industry and market conditions; • acquisitions or consolidation in our industry; • our capital structure, including the amount of our indebtedness and cost of serving that debt, as they compare to others in our industry; • changes in key personnel; • the depth and liquidity of the market for our common stock; • fluctuations in currency exchange rates; • our dividend policy as it compares to the dividend policies of other similar companies; • the passage of adverse legislation or other regulatory developments in countries where we do business; • the stock market fluctuations due to geopolitical events, energy prices or terrorist activities; and • the impact of the factors referred to elsewhere in “Risk Factors.” Our stock value may also be impacted by financial projections that we provide to the public and whether these projections align with the expectations of our current investors, potential investors, and financial analysts who follow and comment on our stock.
Our Chairman and Chief Executive Officer controls a majority of our stock and has control over all matters requiring action by our stockholders; and his interest may conflict with the interests of our other stockholders Kenneth D. Tuchman, our Chairman and Chief Executive Officer, directly and beneficially owns approximately 59% of our common stock. As a result, Mr.
Our Chairman and Chief Executive Officer controls a majority of our stock and has control over matters requiring action by our stockholders; and his interest may conflict with the interests of our other stockholders Kenneth D. Tuchman, our Chairman and Chief Executive Officer, directly and beneficially owns approximately 58% of our common stock. As a result, Mr.
If we are not successful in creating value from these investments, there could be a negative impact on our operating results and financial condition. 8 Table of Contents Our market is highly competitive, and we may not be able to compete effectively Our business performance is dependent on our ability to compete successfully in markets we currently serve, while expanding into new, profitable markets.
If we are not successful in creating value from these investments, there could be a negative impact on our operating results and financial condition. Our market is highly competitive, and we may not be able to compete effectively Our business performance is dependent on our ability to compete successfully in markets we currently serve, while expanding into new, profitable markets.
We compete with larger multinational and offshore low-cost service providers that offer similar services, often at highly competitive prices and aggressive contract terms; niche solution providers that compete with us in specific geographies, industry segments or service areas; companies that utilize new, disruptive technologies or delivery models, including AI-powered solutions; and in-house operations of existing and potential clients.
We compete with larger multinational and offshore low-cost service providers that offer similar services, often at highly competitive prices and aggressive contract terms; niche solution providers that compete with us in specific geographies, industry segments or service areas; companies that utilize new, disruptive technologies or delivery models; and in-house operations of existing and potential clients.
The current outsourcing trend may not continue and the prices that clients are willing to pay for the services may diminish, adversely affecting our business Our growth depends, in large part, on the willingness of clients to outsource customer care and management services to companies like us.
The current outsourcing trend may not continue and the prices that clients are willing to pay for the services may diminish, adversely affecting our business Our growth depends, in large part, on the willingness of clients to outsource customer care and management services.
Remote service delivery, in certain lines of our business, may also expose us, our clients, and their customers to a heightened risk of fraud, because early detection of inappropriate behavior could be impaired, when employees work outside of our delivery centers.
Remote service delivery, in certain lines of our business, may also expose us, our clients, and their customers to a heightened risk of fraud, because early detection of inappropriate behavior is impaired, when employees work outside of our delivery centers.
Lean overhead functions combined with significant growth targets may place a strain on our management systems, infrastructure, and resources, resulting in internal control failures, missed opportunities, and staff attrition. If we fail to manage our growth effectively, our business, financial condition, and results of operations could be adversely affected.
Lean overhead functions combined with growth targets may place a strain on our management systems, infrastructure, and resources, resulting in internal control failures, missed opportunities, and staff attrition. If we fail to manage our growth and cost containment measures effectively, our business, financial condition, and results of operations could be adversely affected.
While we monitor and endeavor to mitigate in a timely manner the relevant regulatory, geopolitical, and other risks related to our operations outside of the United States, we cannot assess with certainty what impact such risks are likely to have over time on our business, and we can provide no assurance that we will always be able to mitigate these risks successfully and avoid adverse impact on our business and results of operations.
While we monitor and endeavor to mitigate in a timely manner the relevant regulatory, geopolitical, and other risks related to our operations outside of the United States, we cannot assess with certainty what impact such risks are likely to have over time on our business, and we can provide no assurance that we will always be able to adapt to these changes quickly enough or mitigate these risks successfully and avoid adverse impact on our business and results of operations.
The recent consolidation trend in our industry resulted in new competitors with greater scale and broader geographic footprint. They have access to greater financial resources, may have proprietary technology solutions, may be able to absorb more risk in their contract terms, or offer greater efficiencies that may be attractive to our clients and impact our business.
The recent consolidation trend in our industry resulted in new competitors with greater scale and broader geographic footprint. They have access to greater financial resources, may have proprietary technology solutions, may be able to absorb more risk in their client contracts, or offer greater efficiencies that may be attractive to our clients and impact our business.
There can be no assurance that the customer care outsourcing trend will continue especially in the current economic climate; and clients may elect to perform these services in-house or rely on emerging technologies for some of the services they currently outsource to us.
There can be no assurance that the customer care outsourcing trend will continue and clients may elect to perform these services in-house or rely on emerging technologies for some of the services they currently outsource to us.
Our business volumes are impacted by consumer sentiment, and the current inflationary and recessionary pressures are impacting consumer demand for our clients’ products and services, which can have direct impact on the demand for our offerings.
Our business volumes are impacted by consumer sentiment, and the current inflationary pressures are impacting consumer demand for some of our clients’ products and services, which can have direct impact on the demand for our offerings.
The cost of defending litigation for these large class action lawsuits has been and will continue to be significant.
The cost of defending these large class action lawsuits has been and will continue to be significant.
Techniques used by cyber criminals to obtain unauthorized access, disable or degrade services, or sabotage systems evolve frequently and may not immediately be detected, and we may be unable to implement adequate preventative measures. For example, in 2021, we experienced two significant cybersecurity incidents.
Techniques used by cyber criminals to obtain unauthorized access, disable or degrade services, or sabotage systems evolve frequently and may not immediately be detected, and we may be unable to implement adequate preventative measures. As we previously reported, in 2021, we experienced two significant cybersecurity incidents.
While clients expect the inclusion of emerging technologies, including AI and GenAI in our services offerings, they often are not positioned to nor wish to mitigate or assume responsibility for the often uncertain risks associated with such technologies, expecting us 21 Table of Contents to assume that risk.
While clients expect the inclusion of emerging technologies, including AI, in our services offerings, they often are not positioned to nor wish to mitigate or assume responsibility for the often uncertain risks associated with such technologies, expecting us to assume that risk.
This information is critical to our successful execution and profitability maximization. We can provide no assurance that our clients will continue to provide us with reliable demand forecasts; nor that we will continue to be able to maintain desired delivery center capacity utilization and work from home delivery mix.
This forecasting information is critical to our successful execution and profitability maximization. We can provide no assurance that our clients will continue to provide us with reliable demand forecasts; nor that we will continue to be able to maintain desired delivery center capacity utilization and remote delivery mix.
Moreover, those that do allow for such escalations do not always allow increases at rates comparable to the increases that we experience due to rising minimum wage mandates, related payroll cost increases, increased technology costs of work from home environments, and the increasing costs of evolving regulatory requirements.
Moreover, those that do allow for such escalations do not always allow increases at rates comparable to the increases that we experience due to rising minimum wage mandates, related payroll cost increases, increased technology and security costs, and the increasing costs of evolving regulatory requirements.
Conducting business outside of the United States and in many global locations at the same time is subject to a variety of risks, including: • inconsistent regulations, licensing requirements, prescriptive labor rules, corrupt business practices, restrictive export control and immigration laws, which may result in inadvertent violation of laws that we may not be able to immediately detect or correct; and which may increase our cost of operations as we endeavor to comply with laws that differ from one country to another; • uncertainty of tax regulations in countries where we do business may affect our costs of operation; • longer payment cycles, especially during economic downturn, could impact our cash flows and results of operations; • political and economic instability, and unexpected changes in regulatory regimes could adversely affect our ability to deliver services and our ability to repatriate cash; • currency exchange rate fluctuations and restrictions on currency movement or negative tax consequences triggered by such movement could adversely affect our results of operations, if we are forced to maintain assets in currencies other than U.S. dollars, while our financial results are reported in U.S. dollars; and if we are forced to maintain assets in currencies other than those that we use for payment of our operating expenses; • infrastructure challenges and lack of sophisticated disaster and pandemic preparedness in some countries where we do business may impact our service delivery; and • armed conflicts, terrorist attacks or civil unrest in some of the regions where we do business, and the resulting need for enhanced security measures may impact our ability to deliver services, threaten the safety of our employees, and increase our costs of operations.
Conducting business outside of the United States and in many global locations at the same time is subject to a variety of risks, including: • inconsistent regulations, licensing requirements, prescriptive labor rules, corrupt business practices, restrictive export control and immigration laws, which may result in inadvertent violation of laws that we may not be able to immediately detect or correct; and which may increase our cost of operations as we endeavor to comply with laws that differ from one country to another; • uncertainty of tax regulations in countries where we do business may affect our costs of operation; 22 Table of Contents • longer payment cycles could impact our cash flows and results of operations; • political and economic instability, and unexpected changes in regulatory regimes could adversely affect our ability to deliver services and our ability to repatriate cash; • unanticipated changes in global alliances due to evolving international trade agendas of elected leaders in the U.S. and elsewhere, among other factors, may impact our operations and financial results if we are unable to operate in locations where we deliver services under existing contracts; • currency exchange rate fluctuations and restrictions on currency movement or negative tax consequences triggered by such movement could adversely affect our results of operations, if we are forced to maintain assets in currencies other than U.S. dollars, while our financial results are reported in U.S. dollars; and if we are forced to maintain assets in currencies other than those that we use for payment of our operating expenses; • infrastructure challenges and lack of sophisticated disaster and pandemic preparedness in some countries where we do business may impact our service delivery; and • armed conflicts, terrorist attacks or civil unrest in some of the regions where we do business, and the resulting need for enhanced security measures may impact our ability to deliver services, threaten the safety of our employees, and increase our costs of operations.
Risks Related to Our Financial Operations Our profitability could suffer if our cost-management strategies are unsuccessful Our ability to improve or maintain our profitability is dependent on our continuous management of our costs.
Our profitability could suffer if our cost-management strategies are unsuccessful Our ability to improve or maintain our profitability is dependent on our continuous management of our costs.
A large portion of our revenue in our TTEC Digital business is generated from technology partners whose products’ reliability and risk allocation practices may adversely impact our business A large portion of our TTEC Digital revenue is tied to our partnerships with providers of customer management technology solutions.
A large portion of TTEC Digital revenue is generated from technology partners whose continued partnership with us, risk sharing practices, and products’ reliability may adversely impact our business A large portion of our TTEC Digital revenue is tied to our partnerships with providers of customer management technology solutions.
Inflation is also causing notable increases in our other critical operating costs. Many of our long-term contracts do not allow for escalation of fees, as our operating costs increase; and those that do allow for escalations do not always provide for rate increases comparable to cost increases that we are experiencing now and likely to experience in the future.
Many of our long-term contracts do not allow for escalation of fees as our operating costs increase; and those that do allow for escalations do not always provide for rate increases comparable to cost increases that we are experiencing now and are likely to experience in the future.
As a result, our Engage business derives a substantial portion of its revenue from relatively few clients. Our five and ten largest clients, collectively, represented 36% and 50% of our revenue in 2023, respectively, with one client representing over 10% of our revenue.
As a result, our Engage business derives a substantial portion of its revenue from relatively few clients. Our five and ten largest clients, collectively, represented 32% and 49% of our revenue in 2024, respectively, with one client representing over 10% of our revenue.
If we are unable to respond to these market factors and compete successfully by providing clients with differentiated services at competitive prices, we could lose market share, which would materially adversely affect our business.
If we are unable to execute, these fundamental requirements effectively and compete successfully by providing clients with differentiated services at competitive prices, we could lose market share, which would materially adversely affect our business.
Although we have continuously evolved our business continuity and disaster recovery plans and processes to focus beyond our delivery centers to include remote delivery, these plans and processes may not work effectively in a distributed remote delivery model, where weather impacts, internet access and power grid downtime may be difficult to manage and where system redundancies are not possible.
Over the last several years we have continuously evolved our business continuity and disaster recovery plans and processes to focus beyond traditional delivery centers to include remote delivery, but these plans and processes may not always work effectively in a distributed remote delivery model, where weather impacts, internet access and power grid downtime may be difficult to manage and where system redundancies are not possible.
Our growth strategy includes further expansion of our offerings to public sector clients. The procurement process for government entities can often be more challenging and longer than contracting in the private sector, including upfront investment to position for opportunities and respond to requests for proposal.
Our growth strategy includes further expansion of our offerings to public sector clients. The procurement process for government entities is generally longer than contracting in the private sector, including upfront investment to position for opportunities and respond to requests for proposal.
We may not always offset increased costs with increased fees under long-term contracts. The pricing and other terms of our client contracts, particularly on our long-term service agreements, are based on estimates and assumptions we make at contract inception.
We may not always be able to offset increased costs of delivery with increased contract revenue under long-term contracts. The pricing and other terms of our client contracts, particularly in our long-term service agreements, are based on estimates and assumptions we make at contract inception.
Adverse changes in laws or regulations that impact our business may negatively affect the sale of our services, slow the growth of our operations, or mandate changes to how we deliver our services, including our ability to use and how we use offshore resources. These changes could threaten our ability to continue to serve certain markets.
Adverse changes in laws or regulations that impact our business may negatively affect the sale of our services, slow the growth of our operations, or mandate changes to how we deliver our services, including our ability to use and how we use offshore resources.
Our leverage and debt service obligations may adversely affect our business and financial condition As of December 31, 2023, we had $995.0 million of borrowings outstanding and a maximum borrowing capacity of up to $1.5 billion in the aggregate under our credit facility.
Risks Related to Our Financial Operations Our leverage and debt service obligations may adversely affect our business and financial condition As of December 31, 2024, we had $975.0 million of borrowings outstanding and a maximum borrowing capacity of up to $1.2 billion in the aggregate under our credit facility.
Our Board’s decisions regarding the payment of dividends or share repurchases are made in the best interest of all stockholders in compliance with relevant laws, and depend on many factors, including our financial condition and earnings from operations; capital requirements for operation and technology investments and acquisitions; debt service obligations; market price of our shares; industry practice; legal and regulatory requirements; changes in U.S. federal, state, and international tax or corporate laws; covenant restrictions in our credit facility; changes to our business model, and other factors that our Board may deem relevant. 24 Table of Contents Our dividend policy and share repurchase practices may change from time to time, and there are no assurances that we will continue to declare dividends or repurchase shares.
TTEC Board’s decisions regarding the payment of dividends or share repurchases are made in the best interest of all stockholders in compliance with relevant laws, and depend on many factors, including the Company’s financial condition and earnings from operations; capital requirements for operation and technology investments and acquisitions; debt service obligations; market price of the shares; industry practice; legal and regulatory requirements; changes in U.S. federal, state, and international tax or corporate laws; covenant restrictions in the Company’s credit facility; changes to our business model, and other factors that the Board may deem relevant.
The opportunity for new competitors in our industry may expand as new technology emerges and increases in importance. New competitors, new strategies by existing competitors or clients, and consolidation among clients or competitors could adversely impact our market share and profitability.
The opportunity for new competitors in our industry may expand as new disruptive technologies emerge and increase in importance. New competitors, new strategies by existing competitors or clients, and consolidation among clients or competitors could adversely impact our market share and profitability.
Uncertainty and inconsistency in relevant privacy and data protection laws, the high cost of compliance with such laws, and the failure to comply with related contractual obligations may impact our ability to deliver services and our results of operations During the last several years, there has been a significant increase in data protection and privacy regulations and enforcement activity in many jurisdictions where we and our clients do business.
These changes could threaten our ability to continue to serve certain markets. 20 Table of Contents Uncertainty and inconsistency in privacy and data protection laws relevant to our business, the high cost of compliance with such laws, and the failure to comply with related contractual obligations may impact our ability to deliver services profitably During the last several years, there has been a significant increase in data protection and privacy regulations and enforcement activity in many jurisdictions where we and our clients do business.
The loss of all or part of major clients’ business could have a material adverse effect on our financial condition, and results of operations, if the loss of revenue is not replaced with profitable business from other clients.
The loss of all or part of major clients’ business could have a material adverse effect on our financial condition, and results of operations, if the loss of revenue is not replaced with profitable business from other clients. We serve clients in industries that have historically experienced a significant level of consolidation.
Inflationary wage pressures, recently tempered with recessionary fears but still ongoing, in many jurisdictions where we hire may continue to make it difficult for us to meet our contractual commitments on multi-year client contracts that do not have wage escalation provisions or may make such contracts not profitable.
Inflationary wage pressures in many jurisdictions where we hire to support our customer care business may continue to make it difficult for us to meet our contractual commitments on multi-year client contracts that do not have wage escalation provisions or may make such contracts not profitable.
Because we do not have control over the stability or the reliability of these technology solutions, we seek back-to-back indemnifications from the technology partners for liabilities caused by their systems that we cannot control or mitigate.
Because we do not control the stability or the reliability of these technology solutions, we seek back-to-back indemnifications from the technology partners for losses and damages that may be caused by their technology that we cannot control or mitigate.
If we are unable to dynamically adjust to changes in clients’ demand forecasts, if our facilities and staff utilization rates are below expectations or if unexpected shifts in demand make it difficult to right size our real estate and staffing commitments quickly, our high-fixed costs of operation or the loss of business because we cannot support capacity may cause our financial conditions and results of operations to be adversely affected.
If we are unable to dynamically adjust to changes in clients’ demand forecasts, if our facilities and staff utilization rates are below expectations or if unexpected shifts in demand make it difficult to right size our real estate and staffing commitments quickly, our results of operations may be adversely affected.
For example, our business could be negatively affected by further escalation in the Russian-Ukrainian conflict, as it can impact our European operations and our European clients’ demand for our services; the regional escalation of the Gaza Israeli conflict and other escalations in the Middle East, including Iranian strikes on U.S. targets, may impact our operations in Africa; continuing tensions with China could impact our delivery centers in the Asia-Pacific region, especially in the Philippines; while ongoing tensions between India and Pakistan can impact our operations in the Indian provinces near the Pakistani border.
For example, our business could be negatively affected by regional escalation of the Gaza Israeli conflict and other escalations in the Middle East, including Iranian strikes on U.S. targets, may impact our operations in Africa; continuing tensions with China could impact our delivery centers in the Asia-Pacific region, especially in the Philippines; ongoing tensions between India and Pakistan can impact our operations in the Indian provinces near the Pakistani border, and the tariff wars and anti-immigration rhetoric may impact our operations in Canada, Mexico or South Africa.
These estimates reflect our best judgment, at the time, regarding the nature of the engagement and our expected costs to provide the contracted services, but these judgments could differ from actual results, especially with conflicting inflationary and recessionary pressures. Not all our contracts allow for escalation of fees as our cost of operations increase.
These estimates reflect the best information available at the time with respect to the nature of the engagement and our expected costs to provide the contracted services, but these expectations could differ from actual results, especially during inflationary periods and competitive pressures. Not all our contracts allow for escalation of fees as our cost of operations increases.
It could also impact our reputation and cause us to lose clients, which could adversely affect our financial condition and results of operations. 20 Table of Contents Wage and hour class action lawsuits can expose us to costly litigation and damage our reputation The customer care business process outsourcing industry in the United States is a target of plaintiffs’ law firms that specialize in wage and hour class action lawsuits against large employers by soliciting potential plaintiffs (current and former employees) with billboard and social media advertising.
Wage and hour and ERISA fiduciary class action lawsuits can expose us to costly litigation and damage our reputation The customer care business process outsourcing industry in the United States is a target of plaintiffs’ law firms that specialize in wage and hour class action lawsuits against large employers by soliciting potential plaintiffs (current and former employees) with billboard and social media advertising.
Exclusive forum for dispute resolution in our bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for their disputes Our bylaws designate Delaware’s state courts as the exclusive forum for most disputes between us and our stockholders, including U.S. federal claims and derivative actions.
The decision to suspend our dividend payments could have a negative impact on the price of our common stock. 25 Table of Contents Exclusive forum for dispute resolution in our bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for their disputes Our bylaws designate Delaware’s state courts as the exclusive forum for most disputes between us and our stockholders, including U.S. federal claims and derivative actions.
Risks Related to Contracting Practices, Legal and Regulatory Matters that Impact Our Business Our financial results may be impacted by changes in laws/regulations, and our failure to comply with laws/regulations relevant to our business Our business is subject to extensive, and at times conflicting, regulations by the U.S. federal, state, local, foreign national, and provincial authorities relating to confidential client and customer data, data privacy, customer communications, and telemarketing practices; licensed healthcare, financial services, collections, insurance, and gaming/gambling support activities; trade restrictions and sanctions, tariffs, import/export controls; taxation; labor regulations, mandatory healthcare and wellness regulations, wages, breaks and severance regulations; health and safety regulations; disclosure obligations; and immigration laws, among other areas. 19 Table of Contents As we provide services to clients’ customers residing in countries where we do not have in-country operations or if we use telecommunication channels and airways in countries where we do not have physical presence, we may also be subject to laws and regulations of these countries.
Risks Related to Legal and Regulatory Matters that Impact Our Business Our financial results may be affected by changes in laws and regulations that impact our business and by our failure to comply with such requirements Our business is subject to extensive, and at times conflicting, regulations by the U.S. federal, state, local, foreign national, and provincial authorities relating to sensitive client and customer data, data privacy, customer communications, and telemarketing practices; licensed healthcare, financial services, collections, insurance, and gaming/gambling support activities; trade restrictions and sanctions, tariffs, import/export controls; taxation; labor regulations, mandatory healthcare and wellness regulations, wages, breaks and severance regulations; health and safety regulations; disclosure obligations; and immigration laws, among other areas.
We have taken steps to mitigate our exposure to service disruptions through procurement rigor in how we select these partners and by investing in multi-layered redundancies, but there can be no assurances that the mitigation strategies and redundancies we have in place would be sufficient to maintain operations without disruptions, especially as we deliver more services remotely, because conventional redundancy strategies are less effective in work from home environments.
We have taken steps to mitigate our exposure to service disruptions through procurement rigor in how we select these partners and by investing in multi-layered redundancies, but there can be no assurances that the mitigation strategies and redundancies we have in place would be sufficient to maintain operations without disruptions, especially as we deliver more services remotely, because conventional redundancy strategies are less effective in work from home environments. 19 Table of Contents Use of AI technology in our offerings could result in liability and harm to our reputation We are increasingly incorporating AI technologies into our business and stood-up governance and controls for their use that we deem to be reasonable and appropriate.
Although we believe our controls are effective and our employees are trained in their responsibilities before they have access to our and our clients’ environments and data, when managing a team of over 60,000, we cannot prevent all misconduct.
Although we believe our controls are effective and our employees are trained in their responsibilities before they have access to our and our clients’ environments and data, when managing an employee population of approximately 52,000 in dozens of countries around the globe, we cannot prevent all misconduct.
Such regulations may result in significant risks and operational costs which would impact our profitability and results of operations. 16 Table of Contents Our growing reliance on third parties for data, cloud and SaaS services could adversely impact our business As we continue to transition and consolidate our information technology and data repositories from on premises IT and data centers controlled by us to public cloud and SaaS providers, the vulnerability of our business to the reliability of these third parties is increasing.
Our growing reliance on third parties for data, software, cloud and SaaS services could adversely impact our business As we continue to transition and consolidate our information technology and data repositories from on premises IT and data centers controlled by us to public cloud and SaaS providers, and as we increase our reliance on third-party software providers, the vulnerability of our business to the reliability of these third parties is increasing.
There can be no assurances, however, that we will be able to identify strategic transaction opportunities that complement our strategy and are available at valuation levels accretive to our business.
There can be no assurances, however, that we will be able to identify strategic transaction opportunities that complement our strategy and are available at valuation levels accretive to our business, or that our banking partners would consent to such transactions under the terms of our credit facility.
These risks may further increase as our business model now relies on a higher percentage of work delivered from home, in addition to our traditional delivery center model. The risks may also increase, as we expand geographically into new locations, where cybersecurity is difficult to assure.
These risks may further increase as our business model now relies on a higher percentage of work delivered from home, in addition to our traditional delivery center model.
We are also subject to the terms of our privacy policies and client contractual obligations related to privacy, data protection, and information security. There is an increased focus on automated processing and services delivered with the use of AI and GenAI tools that may lead to increased regulatory oversight and restrictions that could have an impact on our business.
There is an increased focus on automated processing and services delivered with the use of AI and GenAI tools that may lead to increased regulatory oversight and restrictions that could have an impact on our business.
We routinely consider strategic mergers, acquisitions and business combination transactions and may enter into such transactions any time; and such transactions may negatively impact our business and create unanticipated risks We continuously analyze strategic opportunities that we believe could provide value for our stockholders, and have acquisitions, divestitures, and potential business combinations in various stages of active review.
Finally, widespread outbreaks of infectious diseases, like the COVID-19 pandemic, would impact our global operations, our delivery capabilities and our clients’ demand for services. 13 Table of Contents We routinely consider strategic mergers, acquisitions and business combination transactions and may enter into such transactions at any time; and such transactions may negatively impact our business and create unanticipated risks We continuously analyze strategic opportunities that we believe could provide value for our stockholders, and have potential acquisitions, divestitures, and business combinations in various stages of active review.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have implemented a cross-functional approach to preserving the overall integrity of the information that the Company collects and stores by identifying, preventing, and mitigating cybersecurity threats and effectively responding to security incidents when they occur, while also maintaining controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
Biggest changeWe have implemented a cross-functional approach to preserving the overall integrity of the information that the Company collects and stores by identifying, preventing where possible, and mitigating cybersecurity threats, and responding to security incidents when they occur.
The Company has established and maintains comprehensive business continuity, disaster recovery, and incident response plans that address the Company’s response to cybersecurity incidents. We conduct periodic tabletop exercises and other testing of these plans to enhance incident response preparedness for potential disruption to technology we rely on in our business. Education and Awareness .
The Company has established and maintains comprehensive business continuity, disaster recovery, and incident response plans that address the Company’s response to cybersecurity incidents, among other events that require resilient response. We conduct periodic tabletop exercises and other testing of these plans to enhance incident response preparedness for potential disruption to technology we rely on in our business.
The specific controls used by the Company vary based on the systems involved, but usually include firewalls, intrusion prevention and detection systems, anti-malware technical safeguards and access controls, endpoint threat detection and response (EDR), identity and access management (IAM), privileged access management (PAM), logging and monitoring involving the use of security information and event management (SIEM), multi-factor authentication (MFA), and vulnerability and patch management. 26 Table of Contents The Company periodically tests its cybersecurity policies, standards, processes, and practices.
The specific controls used by the Company vary based on the specific systems, but usually include firewalls, intrusion prevention and detection systems, anti-malware technical safeguards and access controls, endpoint threat detection and response (EDR), identity and access management (IAM), privileged access management (PAM), logging and monitoring using security information and event management (SIEM), multi-factor authentication (MFA), vulnerability and patch management, third-party dark web monitoring and threat-intelligence services. 27 Table of Contents The Company periodically tests its cybersecurity policies, standards, processes, and practices.
The Company’s Board of Directors (the “Board”), in coordination with its Audit Committee, oversees the Company’s overall ERM process, and has delegated the management of risks arising from cybersecurity threats to the Security & Technology Committee, which regularly interacts with the Company’s Chief Security Officer (“CSO”), Chief Information Officer (“CIO”), the Chief Privacy and Regulatory Compliance Officer, Chief Legal & Risk Officer, and other members of management.
The Company’s Board of Directors (the “Board”), in coordination with its Audit Committee, oversees the Company’s overall ERM process, and has delegated the management of risks arising from cybersecurity threats to the Security & Technology Committee, which regularly interacts with the Company’s CSO (who maintains chief information security officer (“CISO”) responsibilities at TTEC among other responsibilities), Chief Information Officer (“CIO”), the Chief Privacy Officer, Chief Legal & Risk Officer, and other members of management.
The Company engages in periodic cybersecurity and technology resilience risk assessments based on methodology and guidance from a recognized national standards organization; and utilizes periodic risk-based analysis for adopting, maintaining and adjusting appropriate security controls to address such risks.
Our cybersecurity program is focused on the following key areas: Risk Assessment and Remedial Measures . The Company engages in periodic cybersecurity and technology resilience risk assessments based on methodology and guidance from a recognized national standards organization; and utilizes periodic risk-based analysis for adopting, maintaining and adjusting security controls to address such risks.
The CSO, in coordination with other members of TTEC executive leadership team, works collaboratively across the Company to implement a cybersecurity program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
The Company’s Chief Security Officer (“CSO”) works collaboratively across the Company with other members of TTEC’s leadership team to implement cybersecurity programs designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
As stated above, we utilize a risk-based approach and judgment to determine which security controls to implement, and it is possible we may not implement appropriate controls if we fail to recognize or underestimate a particular risk.
As stated above, we utilize a risk-based approach and judgment to determine which security controls to implement, and it is possible we may not implement appropriate controls if we fail to recognize or underestimate a particular risk. In addition, security controls, no matter how well designed or implemented, may only mitigate, but not fully eliminate, risks.
These testing efforts conducted by our in-house security teams and by third-party security firms include audits, assessments, tabletop exercises, threat modeling, penetration testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning. Individual controls are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
The testing conducted by our in-house security teams includes audits, assessments, tabletop exercises, threat modeling, penetration testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
The Company provides regular, mandatory training for personnel on cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes, and practices. The training includes phishing and smishing exercises.
Education and Awareness . The Company requires employees to complete periodic mandatory training on cybersecurity threats to equip the Company’s personnel with tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes, and practices.
The Company adjusts its cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews. Independent Assessments. The Company regularly engages third parties to perform assessments on our cybersecurity measures, including information security maturity assessments, audits, and independent reviews of our information security control environment and operating effectiveness. Third-Party Risks .
The Company adjusts its cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews.
To facilitate the success of the Company’s cybersecurity risk management program, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and respond to cybersecurity incidents. 27 Table of Contents Our CSO holds an undergraduate degree in Computer Science and has served in various information technology and information security roles, including serving as the CISO/CSO for two public companies as well as various leadership roles in two medium sized private companies over the last 30 years.
The Board and the Security & Technology Committee also receive prompt information regarding cybersecurity incidents that meet established reporting thresholds, as well as ongoing updates regarding any such incidents until they have been addressed. 28 Table of Contents Our CSO holds an undergraduate degree in Computer Science and has served in various information technology and information security roles, including serving as the CSO for two public companies as well as various leadership roles in two medium sized private companies over the last 30 years.
In addition, security controls, no matter how well designed or implemented, may only mitigate, but not fully eliminate, risks, and events, when detected by security tools or third parties, may not always be immediately understood or acted upon. Governance.
The full impact of security events, when detected by security tools or third parties, may not always be immediately understood or acted upon. Governance.
The Security & Technology Committee receives regular reports on the Company’s cybersecurity risks, vulnerability assessments, third-party and independent reviews, among other relevant information. The Board and its Security & Technology Committee also receive prompt and timely information regarding any cybersecurity incidents that meet established reporting thresholds, as well as ongoing updates regarding any such incidents until they have been addressed.
The Security & Technology Committee of the Board receives regular reports on the Company’s cybersecurity risks, vulnerability assessments, third-party and independent reviews, and the steps the Company is taking to address the security risks, among other relevant information, and shares information with the full Board as appropriate.
At least annually, the Board discusses the Company’s approach to cybersecurity risk management with the Company’s CSO, CIO, and Chief Legal & Risk Officer, and other members of management.
The Board also has access to and periodically meets with the Company’s CSO, CIO, and Chief Legal & Risk Officer about the approaches and progress that the Company is making on its cybersecurity risk management priorities.
The Company relies on a comprehensive Enterprise Risk Management (“ERM”) program, which includes cybersecurity as an important component. Our cybersecurity program is focused on the following key areas: Risk Assessment .
We also maintain controls and procedures that enable prompt escalation of certain cybersecurity incidents so decisions about public disclosure and reporting of such incidents can be timely made. The Company relies on a comprehensive Enterprise Risk Management (“ERM”) program, which includes cybersecurity as an important component.
Added
The Company also regularly engages third parties to perform assessments on our cybersecurity measures, including information security maturity assessments, audits, and independent reviews of our information security control environment and operating effectiveness. Individual controls are evaluated and periodically improved through vulnerability assessments and cybersecurity threat intelligence.
Added
To facilitate the success of the company’s cybersecurity risk management program, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and respond to cybersecurity incidents. Third-Party Risks .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2023, our customer engagement centers were located in the following countries: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ Multi-Client ​ Dedicated ​ Managed ​ Delivery ​ ​ Centers ​ Centers ​ Centers ​ Centers Australia — ​ 2 ​ — 2 ​ Brazil 1 ​ — ​ — 1 ​ Bulgaria 2 ​ — ​ — 2 ​ Canada 1 ​ — ​ 1 2 ​ Colombia ​ — ​ — ​ 2 ​ 2 ​ Egypt ​ — ​ — ​ 1 ​ 1 ​ Greece ​ 1 ​ — ​ — ​ 1 ​ Germany — ​ — ​ 1 1 ​ Honduras ​ 1 ​ — ​ — ​ 1 ​ India 2 ​ — ​ — 2 ​ Mexico 2 ​ — ​ — 2 ​ Philippines 15 ​ — ​ — 15 ​ Poland ​ 1 ​ — ​ — ​ 1 ​ South Africa 1 ​ — ​ 1 2 ​ Thailand ​ — ​ — ​ 1 ​ 1 ​ United Kingdom 1 ​ — ​ 3 4 ​ United States of America 21 ​ 3 ​ 6 30 ​ Total 49 5 16 70 ​ ​ The leases for our customer engagement centers have remaining terms ranging from one to 10 years and generally contain renewal options.
Biggest changeAs of December 31, 2024, we operated 58 customer engagement centers that are classified as follows: ● Multi-Client Center — We lease space for these centers and serve multiple clients in each facility; ● Dedicated Center — We lease space for these centers and dedicate the entire facility to one client; and ● Managed Center — These facilities are leased or owned by our clients and we staff and manage these sites on behalf of our clients in accordance with facility management contracts. 29 Table of Contents As of December 31, 2024, our customer engagement centers were located in the following countries: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ Multi-Client ​ Dedicated ​ Managed ​ Delivery ​ ​ Centers ​ Centers ​ Centers ​ Centers Australia — ​ — ​ 2 2 ​ Brazil 1 ​ — ​ — 1 ​ Bulgaria 2 ​ — ​ — 2 ​ Canada 1 ​ — ​ — 1 ​ Colombia ​ 1 ​ — ​ 1 ​ 2 ​ Germany ​ — ​ — ​ 1 ​ 1 ​ Greece 1 ​ — ​ — 1 ​ Honduras ​ 1 ​ — ​ — ​ 1 ​ India 2 ​ — ​ — 2 ​ Malaysia ​ 1 ​ — ​ — ​ 1 ​ Mexico 2 ​ — ​ — 2 ​ Philippines 13 ​ — ​ — 13 ​ Poland ​ 1 ​ 1 ​ — ​ 2 ​ Rwanda ​ 1 ​ — ​ — ​ 1 ​ South Africa 1 ​ 1 ​ 1 3 ​ Thailand ​ — ​ — ​ 1 ​ 1 ​ United Kingdom 1 ​ — ​ 3 4 ​ United States of America 6 ​ 10 ​ 2 18 ​ Total 35 12 11 58 ​ ​ The leases for our customer engagement centers have remaining terms ranging from one to nine years and generally contain renewal options.
We believe that our existing customer engagement centers are suitable and adequate for our current operations, and we have plans to build additional centers to accommodate future business. ​ 28 Table of Contents
We believe that our existing customer engagement centers are suitable and adequate for our current operations, and we have plans to build additional centers to accommodate future business. ​
Removed
Our old headquarters building in Englewood, Colorado, which we own, is currently not occupied.
Added
On November 5, 2024, TTEC, through its wholly owned subsidiary, TTEC Services Corporation, entered into a definitive agreement to sell and subsequently closed the sale of our headquarters building in Englewood, Colorado to Catholic Health Initiatives Colorado, a not-for-profit organization.
Removed
As of December 31, 2023, we operated 70 customer engagement centers that are classified as follows: ● Multi-Client Center — We lease space for these centers and serve multiple clients in each facility; ● Dedicated Center — We lease space for these centers and dedicate the entire facility to one client; and ● Managed Center — These facilities are leased or owned by our clients and we staff and manage these sites on behalf of our clients in accordance with facility management contracts.
Added
On February 27, 2025, the Company announced that it is moving its principal place of business to Austin, Texas, and that given its decentralized operations and management, it is moving away from a traditional headquarter style of operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMINE SAFETY DISCLOSURE S ​ Not applicable. ​ PART I I ​
Biggest changeMINE SAFETY DISCLOSURE S ​ Not applicable. ​ 30 Table of Contents PART I I ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe believe that the companies in the Peer Group are relevant to our current business model, market capitalization and our two segments Digital and Engage. 29 Table of Contents The graph assumes that $100 was invested on December 31, 2018 in our common stock and in each comparison index, and that all dividends were reinvested.
Biggest changeThe graph assumes that $100 was invested on December 31, 2019 in our common stock and in each comparison index, and that all dividends were reinvested. We declared per share dividends on our common stock of $1.02 during 2022, $1.04 during 2023 and $0.06 during 2024.
Stock Performance Graph The graph depicted below compares the performance of TTEC common stock with the performance of the NASDAQ Composite Index; the Russell 2000 Index; and customized peer group over the period beginning on December 31, 2018 and ending on December 31, 2023. We have chosen the Peer Group comprised of Accenture Plc (NASDAQ: ACN), Cognizant Technology Solutions Corp.
Stock Performance Graph The graph depicted below compares the performance of TTEC common stock with the performance of the NASDAQ Composite Index; the Russell 2000 Index; and customized peer group over the period beginning on December 31, 2019 and ending on December 31, 2024. We have chosen the Peer Group comprised of Accenture Plc (NASDAQ:ACN), Cognizant Technology Solutions Corp.
The Company paid the initial dividend in 2015 and has continued to pay a semi-annual dividend in October and April of each year in amounts ranging between $0.18 per common share in 2015 and $0.52 per common share in October 2023.
The Company paid the initial dividend in 2015 and continued to pay a semi-annual dividend in October and April of each year in amounts ranging between $0.06 per common share and $0.52 per common share through April 2024.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ Our common stock is traded on the NASDAQ Global Select Market under the symbol “TTEC.” As of December 31, 2023, we had 212 holders of record of our common stock and during 2023 we declared and paid two $0.52 per share semi-annual dividends on our common stock.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ Our common stock is traded on the NASDAQ Global Select Market under the symbol “TTEC.” As of December 31, 2024, we had 209 holders of record of our common stock and during 2024 we declared and paid a $0.06 per share dividend on our common stock.
In 2015, our Board of Directors adopted a dividend policy, with the intent to distribute a periodic cash dividend to stockholders of our common stock, after consideration of, among other things, TTEC’s performance, cash flows, capital needs and liquidity factors.
During 2023 we declared and paid two $0.52 per share dividends on our common stock. In 2015, our Board of Directors adopted a dividend policy, with the intent to distribute a periodic cash dividend to stockholders of our common stock, after consideration of, among other things, TTEC’s performance, cash flows, capital needs and liquidity factors.
In addition, our credit facility restricts our ability to pay dividends in the event we are in default or do not satisfy certain covenants. Stock Repurchase Program We continue to have the opportunity to return capital to our shareholders via a stock repurchase program (originally authorized by the Board of Directors in 2001).
In addition, our credit facility restricts our ability to pay dividends in the event we are in default or do not satisfy certain covenants.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among TTEC Holdings, Inc., The NASDAQ Composite Index, The Russell 2000 Index, And Peer Groups ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2018 2019 2020 2021 2022 2023 TTEC Holdings, Inc. ​ $ 100 ​ $ 141 ​ $ 278 ​ $ 349 ​ $ 173 ​ $ 88 ​ NASDAQ Composite ​ $ 100 ​ $ 137 ​ $ 198 ​ $ 242 ​ $ 163 ​ $ 236 ​ Russell 2000 ​ $ 100 ​ $ 126 ​ $ 151 ​ $ 173 ​ $ 138 ​ $ 161 ​ Peer Group ​ $ 100 ​ $ 138 ​ $ 178 ​ $ 268 ​ $ 173 ​ $ 218 ​ ​ ​ ​ ​ ​ ​ ITEM 6. ​ 30 Table of Contents
Stock price performance shown on the graph below is not necessarily indicative of future price performance. 31 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among TTEC Holdings, Inc., The NASDAQ Composite Index, The Russell 2000 Index, And Peer Groups ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2019 2020 2021 2022 2023 2024 TTEC Holdings, Inc. ​ $ 100 ​ $ 198 ​ $ 248 ​ $ 123 ​ $ 63 ​ $ 14 ​ NASDAQ Composite ​ $ 100 ​ $ 145 ​ $ 177 ​ $ 119 ​ $ 173 ​ $ 224 ​ Russell 2000 ​ $ 100 ​ $ 120 ​ $ 138 ​ $ 110 ​ $ 128 ​ $ 143 ​ Peer Group ​ $ 100 ​ $ 129 ​ $ 194 ​ $ 125 ​ $ 158 ​ $ 157 ​ ​ ​ ​ ​ ​ ​ ​ ITEM 6. ​ 32 Table of Contents
(NASDAQ: CTSH), Concentrix (NASDAQ: CNXC), Globant S.A. (NYSE: GLOB), Teleperformance (NYSE Euronext: RCF) and Telus International (NYSE: TIXT).
(NASDAQ:CTSH), Concentrix (NASDAQ:CNXC), Globant S.A. (NYSE:GLOB), Teleperformance (NYSE Euronext:RCF) and Telus International (NYSE:TIXT). We believe that the companies in the Peer Group are relevant to our current business model, market capitalization and our two segments (Digital and Engage).
Removed
During 2022 we declared and paid a $0.50 per share semi-annual dividend and a $0.52 per share semi-annual dividend on our common stock.
Added
On November 4, 2024, the Board of Directors suspended the Company's semi-annual cash dividend as part of its ongoing shift to prioritize debt reduction associated with strategic acquisitions and other investments in the business. The Board of Directors currently does not intend to reconsider that decision until after the Special Committee completes its consideration of a possible Take Private Transaction.
Removed
On February 27, 2024, the Board of Directors authorized a $0.06 dividend per common share, payable on April 30, 2024, to shareholders of record as of April 3, 2024. While it is our intention to continue to pay semi-annual dividends in 2024 and beyond, any decision to pay future cash dividends will be made by our Board of Directors.
Added
Stock Repurchase Program In 2001 the Company launched a stock repurchase program under the terms of which it returned capital to stockholders by purchasing the Company stock in public market, as authorized by its Board of Directors from time to time.
Removed
As of December 31, 2023, the cumulative authorized repurchase allowance was $762.3 million, of which we have used $735.8 million to purchase 46.1 million shares. The Board most recently authorized additional funds under the repurchase program in 2017 and of the total amount authorized, approximately $26.6 million continues to be authorized for repurchase as of December 31, 2023.
Added
The Board has not authorized stock repurchases since 2017 and has no current plans to authorize additional repurchases in 2025.
Removed
During 2022 and 2023, and year to date in 2024, we did not purchase any shares under the program. Although the stock repurchase program does not have an expiration date, we would seek a re-authorization of repurchases from the Board of Directors, if we decide to make repurchases during 2024.
Removed
We declared per share dividends on our common stock of $0.90 during 2021, $1.02 during 2022 and $1.04 during 2023. Stock price performance shown on the graph below is not necessarily indicative of future price performance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOn February 27, 2024, the Board of Directors authorized a semi-annual dividend of $0.06 per common share, payable on April 30, 2024 to shareholders of record as of April 3, 2024. Additional information with respect to our segments and geographic footprint is included in Part II, Item 8. Financial Statements and Supplementary Data, Note 3 to the Consolidated Financial Statements.
Biggest changeAdditional information with respect to our segments and geographic footprint is included in Part II, Item 8. Financial Statements and Supplementary Data, Note 3 to the Consolidated Financial Statements. Our 2024 Financial Results In 2024, our revenue decreased 10.4% over 2023 to $2,208 million, including a decrease of 0.1%, or $2.6 million due to foreign currency fluctuations.
On February 26, 2024, we entered into an Eighth Amendment to the Credit Agreement to increase the net leverage ratio covenant, for a period starting with the quarter ending March 31, 2024 through quarter ending March 31, 2025, from the current 3.5 to 1 to between 4.0 to 1 and 4.5 to 1, as may be applicable in different quarters; and reduced the total lenders’ commitment from $1.5 billion to $1.3 billion if certain conditions are satisfied.
On February 26, 2024, we entered into an Eighth Amendment to the Credit Agreement to increase the net leverage ratio covenant, for a period starting with the quarter ending March 31, 2024 through the quarter ending March 31, 2025, from the current 3.5 to 1 to between 4.0 to 1 and 4.5 to 1, as may be applicable in different quarters; and reduced the total lenders’ commitment from $1.5 billion to $1.3 billion if certain conditions are satisfied.
A professional services organization comprised of software engineers, systems architects, data scientists and CX strategists, this segment creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise based CX technologies including Amazon Web Services, Cisco, Genesys, Google, and Microsoft; and creates proprietary IP to support industry specific and custom client needs.
A professional services organization comprised of software engineers, systems architects, data scientists and CX strategists, this segment creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise-based CX technologies including Amazon Web Services (“AWS”), Cisco, Genesys, Google, and Microsoft; and creates proprietary IP to support industry specific and custom client needs.
Our information systems are protected through physical and technological safeguards as well as backup systems and protocols considered appropriate by management. We also provide role-based employee cybersecurity risk awareness training about phishing, malware, social engineering, data protection, and other cyber risks.
Our information systems are protected through physical and technological safeguards as well as backup systems and protocols considered appropriate by management. We also provide role-based employee cybersecurity risk awareness training about phishing, malware, social engineering, data protection, and other cybersecurity risks.
TTEC Digital serves clients across Enterprise and Small & Medium Sized (SMB) business segments and has a dedicated unit with government technology certifications serving the public sector. • TTEC Engage provides the digitally enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale.
TTEC Digital serves clients across Enterprise and small and medium sized business segments and has a dedicated unit with government technology certifications serving the public sector. • TTEC Engage provides the digitally enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale across the world.
RESULTS OF OPERATIONS Year Ended December 31, 2023 Compared to December 31, 2022 The tables included in the following sections are presented to facilitate an understanding of Management’s Discussion and Analysis of Financial Condition and Results of Operations and present certain information by segment for the years ended December 31, 2023 and 2022 (amounts in thousands).
RESULTS OF OPERATIONS Year Ended December 31, 2024 Compared to December 31, 2023 The tables included in the following sections are presented to facilitate an understanding of Management’s Discussion and Analysis of Financial Condition and Results of Operations and present certain information by segment for the years ended December 31, 2024 and 2023 (amounts in thousands).
Our investment in cybersecurity is not expected to decrease in the foreseeable future, and despite our on-going efforts to improve our cybersecurity, there can be no assurance that a sophisticated cyber-attack could timely be detected or thwarted. For additional information about our cybersecurity risk management and governance see, Part I, Item 1C. Cybersecurity.
Our investment in cybersecurity is not expected to decrease in the foreseeable future, and despite our on-going efforts to improve our cybersecurity, there can be no assurance that a sophisticated cybersecurity incident could timely be detected or thwarted. For additional information about our cybersecurity risk management and governance see, Part I, Item 1C. Cybersecurity.
Goodwill and Indefinite-Lived Intangible Assets We evaluate goodwill and indefinite-lived intangible assets for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. 35 Table of Contents We use a two-step process to assess the realizability of goodwill.
Goodwill and Indefinite-Lived Intangible Assets We evaluate goodwill and indefinite-lived intangible assets for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We use a two-step process to assess the realizability of goodwill.
In making this judgment, we consider all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a valuation allowance is required. We follow a two-step approach to recognizing and measuring uncertain tax positions.
In making this judgment, we consider all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a valuation allowance is required. 36 Table of Contents We follow a two-step approach to recognizing and measuring uncertain tax positions.
Some of the contracts with our five largest clients expire between 2024 and 2027, but many of our largest clients have multiple contracts with us with different expiration dates for different lines of work.
Some of the contracts with our five largest clients expire between 2025 and 2027, but many of our largest clients have multiple contracts with us with different expiration dates for different lines of work.
The indebtedness may also be secured by tangible assets of our Company and its domestic subsidiaries, if borrowings by foreign subsidiaries exceed 7.5% of our Company’s consolidated total assets and the total net leverage ratio is greater than 3.25 to 1.00.
The indebtedness may also be secured by certain assets of our Company and its subsidiaries, if borrowings by foreign subsidiaries exceed 7.5% of our Company’s consolidated total assets and the total net leverage ratio is greater than 3.25 to 1.00.
Base rate loans shall be based on the base rate, plus the applicable credit margin which ranges from 0% to 1% based on the Company’s net leverage ratio. SOFR loans bear interest at a rate equal to the applicable spread adjusted SOFR plus applicable credit margin which ranges from 1.0% to 2% based on the Company’s net leverage ratio.
Base rate loans shall be based on the base rate, plus the applicable credit margin which ranges from 0.375% to 2.5% based on the Company’s net leverage ratio. SOFR loans bear interest at a rate equal to the applicable spread adjusted SOFR plus applicable credit margin which ranges from 1.375% to 3.5% based on the Company’s net leverage ratio.
Any cyber-attack could impact the availability, reliability, speed, accuracy, or other proper functioning of these systems or result in our data, our employees’ data and our clients’ data that we retain for the provision of our services being compromised, which could have a significant impact on our reputation, results of operations, and financial condition.
Any cybersecurity incident could impact the availability, reliability, speed, accuracy, or other proper functioning of these systems or result in our data, our employees’ data and our clients’ data that we retain for the provision of our services being compromised, which could have a significant impact on our reputation, results of operations, and financial condition.
We have a number of complex information systems used for a variety of functions ranging from services we deliver to our clients and their customers to support for our operations. The effective operation of our business depends on the proper functioning of these information systems. Like any information system, our systems are susceptible to cyber-attack.
We have a number of complex information systems used for a variety of functions ranging from services we deliver to our clients and their customers to support for our operations. The effective operation of our business depends on the proper functioning of these information systems. Like any information system, our systems are susceptible to cybersecurity incident.
As of December 31, 2023, and 2022, based on the current level of availability based on the covenant calculations, the remaining borrowing capacity was approximately $90 million and $335 million, respectively. Client Concentration During 2023, only one of our clients represented more than 10% of our total annual revenue.
As of December 31, 2024, and 2023, based on the current level of availability based on the covenant calculations, the remaining borrowing capacity was approximately $225 million and $90 million, respectively. Client Concentration During 2024, only one of our clients represented more than 10% of our total annual revenue.
Tailored to meet industry specific and business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, trust and safety and back-office solutions. The segment’s technology-enabled delivery model covers the entire associate lifecycle including recruitment, onboarding, training, delivery, workforce management and quality assurance.
Tailored to meet industry-specific business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, fraud mitigation and back-office solutions. The segment’s technology-enabled delivery model covers the entire solution lifecycle including associate recruitment, onboarding, training, delivery, workforce management and quality assurance.
We have historically renewed most of our contracts with our largest clients, but there can be no assurance that future contracts will be renewed or, if renewed, will be on terms as favorable as the existing contracts. 42 Table of Contents Cybersecurity Investments We have made and continue to make significant financial investments in technologies and processes to mitigate cyber risks.
We have historically renewed most of our contracts with our largest clients, but there can be no assurance that future contracts will be renewed or, if renewed, will be on terms as favorable as the existing contracts. 44 Table of Contents Cybersecurity Investments We have made and continue to make significant financial investments in technologies and processes to mitigate cybersecurity threats.
After consideration for the current level of availability based on the covenant calculations, our remaining borrowing capacity was approximately $90 million as of December 31, 2023. As of December 31, 2023, we were in compliance with all covenants and conditions under our Credit Facility.
After consideration for the current level of availability based on the covenant calculations, our remaining borrowing capacity was approximately $225 million as of December 31, 2024. As of December 31, 2024, we were in compliance with all covenants and conditions under our Credit Facility.
Indebtedness under the Credit Agreement is guaranteed by certain of our domestic subsidiaries and is secured by security interests (subject to permitted liens) in the U.S. accounts receivable and cash of our Company and certain of its domestic subsidiaries.
Indebtedness under the Credit Agreement is guaranteed by most domestic and foreign subsidiaries and is secured by security interests (subject to permitted liens) in intellectual property, U.S. accounts receivable and cash of our Company and certain of its subsidiaries.
Other Income The main components of other income are miscellaneous income not directly related to our operating activities, such as foreign exchange gains and reductions in our contingent consideration. Other Expenses The main components of other expenses are expenditures not directly related to our operating activities, such as foreign exchange losses and increases in our contingent consideration.
Other Expenses The main components of other expenses are expenditures not directly related to our operating activities, such as foreign exchange losses and increases in our contingent consideration.
We reinvest our cash flows to grow our client base, expand our infrastructure, for investment in research and development, for strategic acquisitions, and to pay dividends. Cash Flows from Operating Activities For the years 2023 and 2022 we reported net cash flows provided by operating activities of $144.8 million and $137.0 million, respectively.
We reinvest our cash flows to grow our client base, expand our infrastructure, for investment in research and development, for strategic acquisitions, and to pay dividends. Cash Flows from Operating Activities For the years 2024 and 2023 we reported net cash flows (used in)/provided by operating activities of ($58.8) million and $144.8 million, respectively.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 28, 2023 and is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 29, 2024 and is incorporated herein by reference.
If a qualitative assessment indicates that a significant decline to fair value of a reporting unit is more likely than not, or if a reporting unit’s fair value has historically been closer to its carrying value, we will proceed to Step 1 testing where we calculate the fair value of a reporting unit based on discounted future probability-weighted cash flows.
If the qualitative assessment indicates the fair value of the reporting unit is in excess of its carrying value, no further testing is required. 37 Table of Contents If a qualitative assessment indicates that a significant decline to fair value of a reporting unit is more likely than not, or if a reporting unit’s fair value has historically been closer to its carrying value, we will proceed to Step 1 testing where we calculate the fair value of a reporting unit based on discounted future probability-weighted cash flows.
Free Cash Flow Free cash flow (see “Presentation of Non-GAAP Measurements” below for the definition of free cash flow) was $76.9 million and $53.0 million for the years 2023 and 2022, respectively.
Free Cash Flow Free cash flow (see “Presentation of Non-GAAP Measurements” below for the definition of free cash flow) was ($104.0) million and $76.9 million for the years 2024 and 2023, respectively.
See Part I, Item 1C Cybersecurity. Capital and Financing Availability Our balance sheet, cash flow from operations and access to debt and capital markets have historically provided us the financial flexibility to effectively fund our organic growth, capital expenditures, strategic acquisitions, incremental investments, and capital distributions. We return capital to our shareholders through our dividend program.
Capital and Financing Availability Our balance sheet, cash flow from operations and access to debt and capital markets have historically provided us the financial flexibility to effectively fund our organic growth, capital expenditures, strategic acquisitions, incremental investments, and capital distributions. We aim to return capital to our shareholders through our dividend program.
Liquidity and Capital Resources Our principal sources of liquidity are our cash generated from operations, our cash and cash equivalents, and borrowings under our Credit Facility (as defined below). During the year ended December 31, 2023, we generated positive operating cash flows of $144.8 million.
Liquidity and Capital Resources Our principal sources of liquidity are our cash generated from operations, our cash and cash equivalents, and borrowings under our Credit Facility (as defined below). During the year ended December 31, 2024, we generated negative operating cash flows of ($58.8) million.
During 2023, 2022 and 2021, borrowings accrued interest at an average rate of approximately 6.7%, 3.1%, and 1.3% per annum, respectively, excluding unused commitment fees. Our daily average borrowings during 2023, 2022 and 2021 were $1,072.4 million, $1,037.4 million and $797.2 million, respectively.
During 2024, 2023 and 2022, borrowings accrued interest at an average rate of approximately 7.5%, 6.7%, and 3.1% per annum, respectively, excluding unused commitment fees. Our daily average borrowings during 2024, 2023 and 2022 were $1,050.3 million, $1,072.4 million and $1,037.4 million, respectively.
To improve our competitive position in a rapidly changing market and to lead our clients with emerging CX methodologies, we continue to invest in innovation and service offerings for both mainstream and high-growth disruptive businesses, diversifying and strengthening our core customer care services with technology-enabled, outcomes-focused services, data analytics, insights, and consulting.
To advance our competitive position in a rapidly changing market and to provide our clients with modernized CX technology and service solutions, we continue to invest in innovation and service offerings for both mainstream and high-growth disruptive businesses, diversifying and strengthening our core customer care services with technology-enabled, outcomes-focused services, data analytics, insights, and consulting.
These clients currently represent approximately 6% of our total annual revenue. We believe these contracts are negotiated on an arm’s-length basis and may be negotiated at different times and with different legal entities. Future Capital Requirements We expect total capital expenditures in 2024 to be between 2.7% and 2.9% of revenue.
These clients currently represent approximately 6% of our total annual revenue. We believe these contracts are negotiated on an arm’s-length basis and may be negotiated at different times and with different legal entities. 42 Table of Contents Future Capital Requirements We expect total capital expenditures in 2025 to be between 2.2% and 2.4% of revenue.
Our five largest clients accounted for 36% and 35% of our annual revenue for each of the two years ended December 31, 2023 2022, respectively. We have long-term relationships with our top five Engage clients, ranging from 17 to 24 years, with all of these clients having completed multiple contract renewals with us.
Our five largest clients accounted for 32% and 36% of our annual revenue for each of the two years ended December 31, 2024 and 2023, respectively. We have long-term relationships with our top five Engage clients, ranging from 5 to 25 years, with all of these clients having completed multiple contract renewals with us.
Our stock repurchase program does not have an expiration date. The launch of large client contracts may result in short-term negative working capital because of the time period between incurring the costs for training and launching the program and the beginning of the accounts receivable collection process. As a result, we may sometimes generate negative cash flows from operating activities.
The launch of large client contracts may result in short-term negative working capital because of the time period between incurring the costs for training and launching the program and the beginning of the accounts receivable collection process. As a result, we may sometimes generate negative cash flows from operating activities.
On April 3, 2023, we entered into a Seventh Amendment to the Credit Agreement which replaces the use of LIBOR with SOFR as of the date of the amendment and therefore, will affect the interest rates paid on a portion of the outstanding principal amount of the Credit Facility starting in the second quarter of 2023.
Debt Instruments and Related Covenants On April 3, 2023, we entered into a Seventh Amendment to the Credit Agreement which replaced the use of LIBOR with SOFR as of the date of the amendment and therefore, affects the interest rates paid on a portion of the outstanding principal amount of the Credit Facility starting in the second quarter of 2023.
In estimating future cash flows, we use financial assumptions in our internal forecasting model such as projected capacity utilization, projected changes in the prices we charge for our services, projected labor costs, as well as contract negotiation status.
The most significant assumptions used in these analyses are those made in estimating future cash flows. In estimating future cash flows, we use financial assumptions in our internal forecasting model such as projected capacity utilization, projected changes in the prices we charge for our services, projected labor costs, as well as contract negotiation status.
During 2023, the combined TTEC Digital and TTEC Engage global operating platform delivered onshore, nearshore, and offshore services in 22 countries on six continents -- the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Egypt, Germany, Greece, Honduras, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom with the help of over 60,000 customer care associates, consultants, technologists, and CX professionals.
During 2024, TTEC Digital and TTEC Engage delivered onshore, nearshore, and offshore services in 22 countries on six continents -- the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Egypt, Germany, Greece, Honduras, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom with contributions from approximately 52,000 customer care associates, consultants, technologists, and CX professionals.
Without these items our effective tax rate for the year ended December 31, 2022 would have been 22.9%. 38 Table of Contents Year Ended December 31, 2022 compared to December 31, 2021 For a discussion of our results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, please see Part II.
Without these items our effective tax rate for the year ended December 31, 2023 would have been 22.7%. Year Ended December 31, 2023 compared to December 31, 2022 For a discussion of our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, please see Part II. Item 7.
Revenue for TTEC Engage provided in these offshore locations represented 30% of our 2023 revenue, as compared to 29% of our 2022 revenue. Our seat utilization is defined as the total number of utilized workstations compared to the total number of available production workstations.
Revenue for TTEC Engage provided in these offshore locations represented 34% of our 2024 revenue, as compared to 31% of our 2023 revenue. 34 Table of Contents Our seat utilization is defined as the total number of utilized workstations compared to the total number of available production workstations.
A qualitative assessment also includes analyzing the excess fair value of a reporting unit over its carrying value from impairment assessments performed in previous years. If the qualitative assessment indicates the fair value of the reporting unit is in excess of its carrying value, no further testing is required.
A qualitative assessment also includes analyzing the excess fair value of a reporting unit over its carrying value from impairment assessments performed in previous years.
The increase from 2022 to 2023 was primarily due to a decrease in net cash income from operations offset by an increase in working capital and lower capital expenditures. Presentation of Non-GAAP Measurements Free Cash Flow Free cash flow is a non-GAAP liquidity measurement.
The decrease from 2023 to 2024 was primarily due to a decrease in working capital due to the termination of the accounts receivable factoring agreement and a decrease in net cash income offset by lower capital expenditures. Presentation of Non-GAAP Measurements Free Cash Flow Free cash flow is a non-GAAP liquidity measurement.
Quantitative and Qualitative Disclosures About Market Risk, Foreign Currency Risk, for further discussion. We primarily utilize our Credit Facility to fund working capital, general operations, dividends, and other strategic activities, such as the acquisitions described in Part II. Item 8. Financial Statements and Supplementary Data, Note 2 to the Consolidated Financial Statements.
We primarily utilize our Credit Facility to fund working capital, general operations, and other strategic activities, such as the acquisitions described in Part II. Item 8. Financial Statements and Supplementary Data, Note 2 to the Consolidated Financial Statements.
Included in the operating income was amortization expense related to acquired intangibles of $18.2 million and $17.2 million for the years ended December 31, 2023 and 2022, respectively. Interest Income (Expense) Interest income increased to $5.2 million in 2023 from $1.8 million in 2022.
Included in the operating income was amortization expense related to acquired intangibles of $16.4 million and $18.2 million for the years ended December 31, 2024 and 2023, respectively. Interest Income (Expense) Interest income decreased to $2.7 million in 2024 from $5.2 million in 2023.
Performance obligation is the unit of accounting for revenue recognition under the provisions of ASC Topic 606, “Revenue from Contracts with Customers” and all related amendments (“ASC 606”).
Performance obligation is the unit of accounting for revenue recognition under the provisions of ASC Topic 606, “Revenue from Contracts with Customers” and all related amendments (“ASC 606”). A contract’s transaction price is allocated to each distinct performance obligation in recognizing revenue.
Interest expense increased to $78.3 million during 2023 from $36.1 million during 2022, primarily due to higher interest rates. Other Income (Expense), Net For the year ended December 31, 2023 Other income (expense), net decreased to a net expense of $4.1 million from net income of $10.2 million during the prior year.
Interest expense increased to $84.3 million during 2024 from $78.3 million during 2023, primarily due to higher interest rates. 39 Table of Contents Other Income (Expense), Net For the year ended December 31, 2024 Other income (expense), net increased to a net income of $18.6 million from a net expense of $4.1 million during the prior year.
TTEC operates through two business segments. • TTEC Digita l is one of the largest CX technology providers and is focused exclusively on the intersection of Contact Center as a Service (CCaaS), Customer Relationship Management (CRM), and Artificial Intelligence (AI) and Analytics.
TTEC operates and reports its financial results of operations through two business segments. • TTEC Digital is one of the largest CX technology and service providers and is focused on the intersection of Contact Center as a Service (“CCaaS”), Customer Relationship Management (“CRM”), and Artificial Intelligence (AI) and Analytics.
The following table reconciles net cash provided by operating activities to free cash flow for our consolidated results (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 ​ Net cash provided by operating activities ​ ​ $ 144,766 ​ $ 137,048 ​ Less: Purchases of property, plant and equipment ​ ​ 67,839 ​ 84,012 ​ Free cash flow ​ ​ $ 76,927 ​ $ 53,036 ​ ​ 40 Table of Contents Obligations and Future Capital Requirements At December 31, 2023, our future contractual obligations were related primarily to debt, leases and income taxes.
The following table reconciles net cash provided by operating activities to free cash flow for our consolidated results (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ Net cash (used in) provided by operating activities ​ ​ $ (58,818) ​ $ 144,765 ​ Less: Purchases of property, plant and equipment ​ ​ 45,173 ​ 67,839 ​ Free cash flow ​ ​ $ (103,991) ​ $ 76,926 ​ ​ Obligations and Future Capital Requirements At December 31, 2024, our future contractual obligations were related primarily to debt, leases and income taxes.
The effective tax rate for 2022 was impacted by earnings in international jurisdictions currently under an income tax holiday, a $1.4 million benefit related to changes in tax contingent liabilities, a $0.4 million benefit related to provision to return adjustments, $0.9 million of expense related to the cybersecurity incident, a $0.5 million benefit related to changes in valuation allowances and related deferred tax liabilities, a $5.0 million benefit related to restructuring charges, a $0.7 million benefit related to tax rate changes, a $5.7 million benefit related to equity-based compensation, a $9.7 million benefit related to the amortization of purchased intangibles, and a $2.2 million benefit related to accelerated amortization of software.
The effective tax rate for 2024 was impacted by earnings in international jurisdictions currently under an income tax holiday, $0.6 million of expense related to changes in tax contingent liabilities, $82.5 million of expense related to changes in valuation allowances and related deferred tax liabilities, $0.4 million of expense related to acquisitions, a $38.2 million benefit related to restructuring and impairment charges, $5.1 million of expense related to the amortization of purchased intangibles, and $0.4 million of other tax expense.
As of December 31, 2023 and 2022, we had borrowings of $995.0 million and $960.0 million, respectively, under our Credit Facility, and our average daily utilization was $1,072.4 million and $1,037.4 million for the years ended December 31, 2023 and 2022, respectively.
The term of the Credit Facility remains unchanged through November 23, 2026. As of December 31, 2024 and 2023, we had borrowings of $975.0 million and $995.0 million, respectively, under our Credit Facility, and our average daily utilization was $1,050.3 million and $1,072.4 million for the years ended December 31, 2024 and 2023, respectively.
A contract’s transaction price is allocated to each distinct performance obligation in recognizing revenue. 33 Table of Contents The business process outsourcing (“BPO”) inbound and outbound service fees are based on either a per minute, per hour, per FTE, per transaction or per call basis, which represents the majority of our contracts.
The business process outsourcing (“BPO”) inbound and outbound service fees are based on either a per minute, per hour, per FTE, per transaction or per call basis, which represents the majority of our contracts.
Restructuring Charges, Net Restructuring charges, net primarily include costs incurred in conjunction with reductions in force or decisions to exit facilities, including termination benefits and lease liabilities, net of expected sublease rentals.
Restructuring Charges, Net Restructuring charges, net primarily include costs incurred in conjunction with reductions in force or decisions to exit facilities, including termination benefits and lease liabilities, net of expected sublease rentals. Impairment Losses Impairment losses include costs related to impairment of right-of-use assets, leasehold improvement assets, internally developed software, and certain computer equipment.
These factors could require that we raise additional capital through future debt or equity financing. We can provide no assurance that we will be able to raise additional capital with commercially reasonable terms acceptable to us.
These factors could require that we raise additional capital through future debt or equity financing. We can provide no assurance that we will be able to raise additional capital with commercially reasonable terms acceptable to us. The following discussion highlights our cash flow activities during the years ended December 31, 2024 and 2023.
With the exception of training, which is not considered to have value to the customer on a stand-alone basis, and is typically billed upfront and deferred, the remainder of revenue is invoiced on a monthly or quarterly basis as services are performed and does not create a contract asset or liability.
With the exception of training, which is not considered to have value to the customer on a stand-alone basis, and is typically billed upfront and deferred, the remainder of revenue is invoiced on a monthly or quarterly basis as services are performed and does not create a contract asset or liability. 35 Table of Contents In addition to revenue from BPO services, revenue also consists of fees from services for program launch, professional consulting, fully-hosted or managed technology and learning innovation services.
Without these items our effective tax rate for the year ended December 31, 2023 would have been 22.7%. For the year ended December 31, 2022, our effective tax rate was 18.8%.
Without these items our effective tax rate for the year ended December 31, 2024 would have been 40.9%. For the year ended December 31, 2023, our effective tax rate was 55.2%.
The operating income as a percentage of revenue decreased to 6.1% in 2023 as compared to 7.5% in 2022. Included in the operating income was amortization related to acquired intangibles of $17.4 million and $19.9 million for the years ended December 31, 2023 and 2022, respectively.
Included in the operating income was amortization related to acquired intangibles of $16.6 million and $17.4 million for the years ended December 31, 2024 and 2023, respectively.
We may consider restructurings, dispositions, mergers, acquisitions and other similar transactions. Such transactions could include the transfer, sale or acquisition of significant assets, businesses or interests, including joint ventures or the incurrence, assumption, or refinancing of indebtedness and could be material to the consolidated financial condition and consolidated results of our operations.
Such transactions could include the transfer, sale or acquisition of significant assets, businesses or interests, including joint ventures or the incurrence, assumption, or refinancing of indebtedness and could be material to the consolidated financial condition and consolidated results of our operations. Our capital expenditures requirements could also increase materially in the event of an acquisition or joint venture.
We have global operations that expose us to foreign currency exchange rate fluctuations that may positively or negatively impact our liquidity. We are also exposed to higher interest rates associated with our variable rate debt. To mitigate these risks, we enter into foreign exchange forward and option contracts through our cash flow hedging program. Please refer to Item 7A.
We are also exposed to higher interest rates associated with our variable rate debt. To mitigate these risks, we enter into foreign exchange forward and option contracts through our cash flow hedging program. Please refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk, Foreign Currency Risk, for further discussion.
Since inception in 2015, the Company has continued to pay a semi-annual dividend in October and April of each year in gradually increasing amounts from $0.18 per common share in 2015 to $0.52 per common share in October 2023.
Beginning in 2015, the Company paid a semi-annual dividend in October and April of each year in gradually increasing amounts from $0.18 per common share in 2015 to $0.52 per common share in October 2023. On February 27, 2024 the Board declared a dividend of $0.06 per share which was paid on April 30, 2024.
The increase in revenue was comprised of a $23.2 million, or 5.0%, increase for TTEC Digital and a $4.1 million, or 0.2%, decrease for TTEC Engage. 32 Table of Contents Our 2023 income from operations decreased $50.5 million to $118.0 million, or 4.8% of revenue, from $168.5 million which was 6.9% of revenue for 2022.
The decrease in revenue was comprised of a $27.9 million, or 5.7%, decrease for TTEC Digital and a $227.4 million, or 11.5%, decrease for TTEC Engage. Our 2024 income/(loss) from operations decreased $291.5 million to ($173.5) million, or (7.9)% of revenue, from $118.0 million which was 4.8% of revenue for 2023.
For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. For these services, the point at which the transfer of control occurs determines when revenue is recognized in a specific reporting period.
The contracts containing these service offerings may contain multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract.
The change in net cash flows from 2022 to 2023 was primarily due to a $134.0 million net change in the line of credit and an increase of $28.1 million related to payments of contingent consideration offset by a $4.1 million decrease in tax payments related to restricted stock units.
The change in net cash flows from 2023 to 2024 was primarily due to a $46.4 million reduction in dividends paid and $37.7 million reduction related to payments of contingent consideration offset by a $55.0 million net change in the line of credit.
Our cash and cash equivalents totaled $172.7 million and $153.4 million as of December 31, 2023 and 2022, respectively. We diversify the holdings of such cash and cash equivalents considering the financial condition and stability of the counterparty institutions.
Cash and Cash Equivalents We consider all liquid investments purchased within 90 days of their original maturity to be cash equivalents. Our cash and cash equivalents totaled $85.0 million and $172.7 million as of December 31, 2024 and 2023, respectively. We diversify the holdings of such cash and cash equivalents considering the financial condition and stability of the counterparty institutions.
The increase of $7.7 million from 2022 to 2023 was due to a $101.5 million decrease in net cash income from operations offset by a $109.2 million increase in net working capital. Cash Flows from Investing Activities For the years 2023 and 2022, we reported net cash flows used in investing activities of $67.6 million and $226.2 million, respectively.
The decrease of $203.6 million from 2023 to 2024 was due to a $146.8 million decrease in net working capital primarily due to the termination of the accounts receivable factoring agreement and a $56.8 million decrease in net cash income from operations. 41 Table of Contents Cash Flows from Investing Activities For the years 2024 and 2023, we reported net cash flows (used in)/provided by investing activities of $0.5 million and ($67.6) million, respectively.
During 2023, we completed a Step 1 goodwill analysis and determined that for all three reporting units the estimated fair value exceeds the carrying value. The calculation of fair value is based on estimates including revenue projections, EBITDA margin projections, estimated tax rates, estimated capital expenditures and discount rates.
During 2024, we completed a Step 1 goodwill analysis and determined that for all three reporting units the estimated fair value exceeds the carrying value.
The net decrease in cash used in investing activities from 2022 to 2023 was due to a $142.4 million decrease in acquisitions and a $16.2 million decrease in capital expenditures. Cash Flows from Financing Activities For the years 2023 and 2022, we reported net cash flows (used in)/provided by financing activities of $(68.2) million and $89.0 million, respectively.
Cash Flows from Financing Activities For the years 2024 and 2023, we reported net cash flows (used in)/provided by financing activities of ($38.3) million and ($68.2) million, respectively.
Our revenue for fiscal 2023 was $2.463 billion, approximately $487 million, or 20%, which came from our TTEC Digital segment and $1.976 billion, or 80%, which came from our TTEC Engage segment.
Our revenue for fiscal 2024 was $2,208 billion, of which approximately $459 million, or 21%, was generated from our TTEC Digital segment and $1,749 billion, or 79%, was generated from our TTEC Engage segment.
We also pledged 65% of the voting stock and all of the non-voting stock, if any, of certain of our material foreign subsidiaries.
We also pledged 65% of the voting stock and all of the non-voting stock, if any, of certain of our material foreign subsidiaries. As of December 31, 2024 and 2023, we had borrowings of $975.0 million and $995.0 million, respectively, under the Credit Facility.
Such capitalized contract acquisition costs are periodically reviewed for impairment taking into consideration ongoing future cash flows expected from the contract and estimated remaining useful life of the contract. 34 Table of Contents Income Taxes Accounting for income taxes requires recognition of deferred tax assets and liabilities for the expected future income tax consequences of transactions that have been included in the Consolidated Financial Statements or tax returns.
Income Taxes Accounting for income taxes requires recognition of deferred tax assets and liabilities for the expected future income tax consequences of transactions that have been included in the Consolidated Financial Statements or tax returns.
We expect to use our cash to fund working capital, global operations, dividends, acquisitions, and other strategic activities. While there are no assurances, we believe our global cash is well protected given our cash management practices, banking partners and utilization of diversified bank deposit accounts and other high quality investments.
While there are no assurances, we believe our global cash is well protected given our cash management practices, banking partners and utilization of diversified bank deposit accounts and other high quality investments. 40 Table of Contents We have global operations that expose us to foreign currency exchange rate fluctuations that may positively or negatively impact our liquidity.
As of December 31, 2023, the total production workstations for TTEC Engage was 31,325 and the overall capacity utilization in our centers was 76% versus 78% in the prior year period. The decline was primarily driven by expansion into new geographies offshore not yet fully ramped, partially offset by improvements in the U.S. due to the Company’s site optimization strategy.
As of December 31, 2024, the total production workstations for TTEC Engage was 30,075 and the overall capacity utilization in our centers was 70% versus 76% in the prior year period. The decline was primarily driven by decreased seat reservations in the Philippines and U.S., partially offset by footprint reductions in the U.S.
The Credit Facility commitment fees are payable to the lenders as previously disclosed and as determined by reference to our net leverage ratio. The Credit Agreement contains customary affirmative, negative, and financial covenants, which primarily remained unchanged from the 2019 Credit Facility.
The Credit Facility commitment fees are payable to the lenders in an amount equal to the unused portion of the Credit Facility multiplied by a rate per annum as determined by reference to the Company’s net leverage ratio. The Credit Agreement contains customary affirmative, negative, and financial covenants.
The Credit Agreement permits accounts receivable factoring up to the greater of $100 million or 25 percent of the average book value of all accounts receivable over the most recent twelve month period. 41 Table of Contents Base rate loans bear interest at a rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 0.50%, or (c) SOFR in effect on such day plus 1.0%.
As defined in the Credit Agreement, base rate loans bear interest at a rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 0.50%, and (c) SOFR in effect on such day plus 1.0%.
TTEC Digital ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ 2023 2022 $ Change % Change ​ Revenue ​ $ 486,882 ​ $ 463,670 ​ $ 23,212 5.0 % ​ Operating Income ​ 29,846 ​ 34,895 ​ (5,049) (14.5) % ​ Operating Margin ​ 6.1 % 7.5 % ​ ​ ​ ​ ​ ​ ​ The increase in revenue for TTEC Digital was driven by increases in the recurring revenue offerings, professional services, and one-time product sales.
TTEC Digital ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 $ Change % Change ​ Revenue ​ $ 459,018 ​ $ 486,882 ​ $ (27,864) (5.7) % ​ Operating Income ​ 23,691 ​ 29,846 ​ (6,155) (20.6) % ​ Operating Margin ​ 5.2 % 6.1 % ​ ​ ​ ​ ​ ​ ​ The decrease in revenue for the TTEC Digital segment was driven by lower one-time on-premise related revenue and professional services revenue.
We also invest to broaden our product and service capabilities, increase our global client base and industry expertise, tailor our geographic footprint to the needs of our clients, and further scale our end-to-end integrated solutions platform.
We also invest to broaden our CX product and service capabilities, increase our global client base and industry expertise, expand our geographic footprint to the needs of our global clientele, and further scale our integrated solutions within and between our TTEC Digital and TTEC Engage segments. 33 Table of Contents Cybersecurity Incident In 2021, TTEC experienced two significant cybersecurity incidents.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION S ​ Executive Summary Founded in 1983, TTEC is a global CX outsourcing partner for marquis and disruptive brands and public sector clients. The Company designs, builds, and operates technology-enabled customer experiences across digital and live interaction channels to help clients increase customer loyalty, revenue, and profitability.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION S ​ Executive Summary Founded in 1982, TTEC is a global CX outsourcing partner for marquee and high-growth brands and public sector clients.
We believe that our cash generated from operations, existing cash and cash equivalents, and available credit will be sufficient to meet expected operating and capital expenditure requirements for the next 12 months, however, if our access to capital is restricted or our borrowing costs increase, our operations and financial condition could be adversely impacted.
The termination of the accounts receivable factoring agreement negatively impacted our cash flows by $(101.2) million for the year ended December 31, 2024. We believe that our cash generated from operations, existing cash and cash equivalents, and available credit will be sufficient to meet expected operating and capital expenditure requirements for the next 12 months.
Income from operations in 2023 and 2022 included a total of $19.8 million and $19.4 million of restructuring and asset impairments, respectively. Our offshore customer experience centers spanning six countries serve clients based in the U.S. and in other countries with 21,500 workstations representing 69% of our global delivery capabilities.
Our offshore customer experience centers spanning 15 countries serve clients based in the U.S. and in other countries with 24,000 workstations representing 80% of our global delivery capabilities.
We manage a centralized global treasury function in the United States with a focus on safeguarding and optimizing the use of our global cash and cash equivalents. Our cash is held in the U.S. in U.S. dollars, and outside of the U.S. in U.S. dollars and foreign currencies.
However, if our access to capital is restricted or our borrowing costs increase, however, our operations and financial condition could be adversely impacted. We manage a centralized global treasury function in the United States with a focus on safeguarding and optimizing the use of our global cash and cash equivalents.
By combining digital solutions with data-driven service capabilities, we help clients improve their customer satisfaction while lowering their total cost to serve. As of December 31, 2023, TTEC served over 750 clients across targeted industry verticals including financial services, healthcare, public sector, telecom, technology, media, travel and hospitality, automotive and retail.
As of December 31, 2024, TTEC served over 715 clients across targeted industry verticals, including financial services, healthcare, public sector, communications, technology, media, entertainment, travel and hospitality, automotive and retail.
TTEC demonstrates its market leadership through strategic collaboration across TTEC Digital and TTEC Engage when there is client demand and fit for our integrated solutions. This partnership is central to our ability to deliver comprehensive and transformational customer experience solutions to our clients, including integrated delivery, go-to-market and innovation for truly differentiated, market leading CX solutions.
TTEC pursues its CX market leadership through strategic collaboration across TTEC Digital and TTEC Engage. Together, TTEC’s ability to deliver comprehensive and transformational customer experience solutions to its clients is a marketplace differentiator, including integrated CX technology and service solution, go-to-market strategies, and innovative offerings.
The change in operating income is attributable to a number of different factors across the segments. The TTEC Digital segment’s operating income declined 14.5%, or $5.0 million over last year primarily due to continued investments in CX leadership, sales and marketing, product engineering, and geographic expansion offset by an increase in revenue and program gross margins.
The change in operating income is attributable to an impairment of goodwill and a number of different factors across the segments. The TTEC Digital segment’s operating income declined 20.6%, or $6.2 million over last year primarily attributable to the lower revenue, revenue mix and investment in talent to support the diversifications of our offerings.
The temporary operational disruptions that occurred due to these incidents did not have a long-term impact on our results of operations. During 2022 and 2023, TTEC has made and will continue to make in 2024, significant investments to enhance our information technology environment, our operational governance of our information technology system, and our data governance practices.
During 2022, 2023 and 2024, TTEC has made significant investments to enhance our information technology environment, our operational governance of our information technology system, and our data governance practices. See Part I, Item 1C Cybersecurity.
Approximately 55% of these expected capital expenditures are to support growth in our business and 45% relate to the maintenance of existing assets. The anticipated level of 2024 capital expenditures is primarily driven by site expansions, new builds in emerging geographies, enhancements and modernization to our technological infrastructure and ongoing digital integration and product development.
Approximately 51% of these expected capital expenditures are to support growth in our business and 49% relate to the maintenance of existing assets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDollar ​ ​ % Maturing ​ ​ Contracts ​ ​ Notional ​ Notional ​ ​ in the next ​ ​ Maturing As of December 31, 2023 ​ Amount ​ Amount ​ ​ 12 months ​ ​ Through Canadian Dollar 2,250 ​ $ 1,670 ​ ​ 100.0 % ​ September 2024 ​ Philippine Peso 9,324,000 ​ 165,842 (1) ​ ​ 58.7 % ​ December 2026 ​ Mexican Peso 938,000 ​ 44,155 ​ ​ 60.8 % ​ December 2026 ​ ​ ​ ​ ​ $ 211,667 ​ ​ ​ ​ ​ ​ ​ ​ 44 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Local ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ U.S.
Biggest changeDollar ​ ​ % Maturing ​ ​ Contracts ​ ​ Notional ​ Notional ​ ​ in the next ​ ​ Maturing As of December 31, 2024 ​ Amount ​ Amount ​ ​ 12 months ​ ​ Through Philippine Peso 6,034,000 ​ $ 105,098 (1) ​ ​ 67.8 % ​ March 2027 ​ Mexican Peso 548,000 ​ 26,682 ​ ​ 64.6 % ​ December 2026 ​ ​ ​ ​ ​ $ 131,780 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Local ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ U.S.
We do not currently engage in hedging activities related to these types of foreign currency risks because we believe them to be insignificant as we endeavor to settle these accounts on a timely basis. For the years ended 2023 and 2022, approximately 14% and 14%, respectively, of revenue was derived from contracts denominated in currencies other than the U.S. Dollar.
We do not currently engage in hedging activities related to these types of foreign currency risks because we believe them to be insignificant as we endeavor to settle these accounts on a timely basis. For the years ended 2024 and 2023, approximately 15% and 14%, respectively, of revenue was derived from contracts denominated in currencies other than the U.S. Dollar.
We recorded net gains/(losses) of $4.0 million, $(2.9) million, and $4.9 million for settled cash flow hedge contracts for the years ended December 31, 2023, 2022, and 2021, respectively. These gains/(losses) were reflected in Revenue in the accompanying Consolidated Statements of Comprehensive Income (Loss).
We recorded net gains/(losses) of $2.6 million, $4.0 million, and $(2.9) million for settled cash flow hedge contracts for the years ended December 31, 2024, 2023, and 2022, respectively. These gains/(losses) were reflected in Revenue in the accompanying Consolidated Statements of Comprehensive Income (Loss).
Interest Rate Risk The interest rate on our Credit Agreement is variable based upon the Prime Rate and SOFR and, therefore, is affected by changes in market interest rates. As of December 31, 2023, we had $995.0 million of outstanding borrowings under the Credit Agreement.
Interest Rate Risk The interest rate on our Credit Agreement is variable based upon the Prime Rate and SOFR and, therefore, is affected by changes in market interest rates. As of December 31, 2024, we had $975.0 million of outstanding borrowings under the Credit Agreement.
For the years ended December 31, 2023, 2022 and 2021, revenue associated with this foreign exchange risk was 19%, 20% and 17% of our consolidated revenue, respectively.
For the years ended December 31, 2024, 2023 and 2022, revenue associated with this foreign exchange risk was 20%, 19% and 20% of our consolidated revenue, respectively.
Australian Dollar 1.0 % (2.5) % (0.2) % ​ In order to mitigate the risk of these non-functional foreign currencies weakening against the functional currencies of the servicing subsidiaries, which thereby decreases the economic benefit of performing work in these countries, we may hedge a portion, though not 100%, of the projected foreign currency exposure related to client programs served from these foreign countries through our cash flow hedging program.
In order to mitigate the risk of these non-functional foreign currencies weakening against the functional currencies of the servicing subsidiaries, which thereby decreases the economic benefit of performing work in these countries, we may hedge a portion, though not 100%, of the projected foreign currency exposure related to client programs served from these foreign countries through our cash flow hedging program.
If the Prime Rate or SOFR increased by 100 basis points, there would be $1.0 million of additional interest expense per $100.0 million of outstanding borrowing under the Credit Agreement. 43 Table of Contents Foreign Currency Risk Our subsidiaries in the Philippines, Mexico, India, Bulgaria and Poland use the local currency as their functional currency for paying labor and other operating costs.
If the Prime Rate or SOFR increased by 100 basis points, there would be $1.0 million of additional interest expense per $100.0 million of outstanding borrowing under the Credit Agreement. 45 Table of Contents Foreign Currency Risk Our subsidiaries in Bulgaria, Colombia, Egypt, Honduras, India, Mexico, the Philippines, Poland and South Africa use the local currency as their functional currency for paying labor and other operating costs.
Our results of operations and revenue could be adversely affected if the U.S. Dollar strengthens significantly against foreign currencies. Fair Value of Debt and Equity Securities We did not have any investments in marketable debt or equity securities as of December 31, 2023 or 2022. ​
Our results of operations and revenue could be adversely affected if the U.S. Dollar strengthens significantly against foreign currencies. 47 Table of Contents Fair Value of Debt and Equity Securities We did not have any investments in marketable debt or equity securities as of December 31, 2024 or 2023. ​ ITEM 8.
Based upon average daily outstanding borrowings during the years ended December 31, 2023 and 2022, interest accrued at a rate of approximately 6.7% and 3.1% per annum, respectively.
Based upon average daily outstanding borrowings during the years ended December 31, 2024 and 2023, interest accrued at a rate of approximately 7.5% and 6.7% per annum, respectively.
The fair value of our cash flow hedges increased by $8.4 million from December 31, 2022 to December 31, 2023. The increase in fair value from December 31, 2022 primarily reflects changes in the currency translation between the U.S. dollar and Mexican Peso and U.S. dollar and Philippines Peso.
The fair value of our cash flow hedges decreased by $11.9 million from December 31, 2023 to December 31, 2024. The decrease in fair value from December 31, 2023 primarily reflects changes in the currency translation between the U.S. dollar and Mexican Peso and U.S. dollar and Philippines Peso.
The following summarizes relative (weakening) strengthening of local currencies that are relevant to our business: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 Canadian Dollar vs. U.S. Dollar 2.2 % (6.6) % 0.3 % Philippine Peso vs. U.S. Dollar 1.0 % (9.2) % (6.4) % Mexican Peso vs. U.S.
The following summarizes relative (weakening) strengthening of local currencies that are relevant to our business: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Australian Dollar vs. U.S. Dollar (9.9) % — % (6.5) % Bulgarian Lev vs U.S. Dollar (6.3) % 3.0 % (5.9) % Canadian Dollar vs. U.S.
Not every exposure is or can be hedged and, where hedges are put in place based on expected foreign exchange exposure, they are based on forecasts for which actual results may differ from the original estimate. Failure to successfully hedge or anticipate currency risks properly could adversely affect our consolidated operating results.
Not every exposure is or can be hedged and, where hedges are put in place based on expected foreign exchange exposure, they are based on forecasts for which actual results may differ from the original estimate.
The fair value of our cash flow hedges at December 31, 2023 was a net asset (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturing in the ​ ​ December 31, 2023 Next 12 Months Canadian Dollar ​ $ 32 ​ $ 32 ​ Philippine Peso ​ 1,921 ​ 528 ​ Mexican Peso ​ 6,578 ​ 5,753 ​ ​ ​ $ 8,531 ​ $ 6,313 ​ ​ Our cash flow hedges are valued using models based on market observable inputs, including both forward and spot foreign exchange rates, implied volatility, and counterparty credit risk.
The fair value of our cash flow hedges at December 31, 2024 was a net asset (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturing in the ​ ​ December 31, 2024 Next 12 Months Philippine Peso ​ $ (1,948) ​ $ (1,112) ​ Mexican Peso ​ (1,419) ​ (784) ​ ​ ​ $ (3,367) ​ $ (1,896) ​ ​ Our cash flow hedges are valued using models based on market observable inputs, including both forward and spot foreign exchange rates, implied volatility, and counterparty credit risk.
Dollar 12.9 % 4.8 % (2.9) % Australian Dollar vs. U.S. Dollar (0.0) % (6.5) % (6.1) % Euro vs. U.S. Dollar 3.0 % (5.9) % (8.1) % Indian Rupee vs. U.S. Dollar ​ (0.5) % (11.3) % (1.8) % Philippine Peso vs.
Dollar ​ (3.1) % (0.5) % (11.3) % Mexican Peso vs. U.S. Dollar ​ (22.3) % 12.9 % 4.8 % Philippine Peso vs. U.S. Dollar ​ (5.1) % 1.0 % (9.2) % Philippine Peso vs. Australian Dollar ​ 4.3 % 1.0 % (2.5) % Polish Zloty vs U.S.
Dollar ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ Notional ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ Amount ​ Amount ​ ​ ​ ​ ​ ​ Canadian Dollar 12,000 ​ $ 9,177 ​ ​ ​ ​ ​ ​ ​ Philippine Peso 8,617,000 ​ ​ 157,855 (1) ​ ​ ​ ​ ​ ​ ​ Mexican Peso 1,024,500 ​ 44,690 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 211,722 ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on December 31, 2023 and December 31, 2022.
Dollar ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ Notional ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ Amount ​ Amount ​ ​ ​ ​ ​ ​ Canadian Dollar 2,250 ​ $ 1,670 ​ ​ ​ ​ ​ ​ ​ Philippine Peso 9,324,000 ​ ​ 165,842 (1) ​ ​ ​ ​ ​ ​ ​ Mexican Peso 938,000 ​ 44,155 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 211,667 ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on December 31, 2024 and December 31, 2023.
Our cash flow hedging instruments as of December 31, 2023 and 2022 are summarized as follows (in thousands). All hedging instruments are forward contracts, except as noted. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Local ​ ​ ​ ​ ​ ​ Currency ​ U.S.
All hedging instruments are forward contracts, except as noted. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Local ​ ​ ​ ​ ​ ​ Currency ​ U.S.
Added
Dollar (8.5) % 2.2 % (6.6) % Colombian Peso vs U.S. Dollar (1) (13.8) % 20.0 % — % Egyptian Pound vs U.S. Dollar (64.4) % (25.0) % (57.7) % Euro vs. U.S. Dollar ​ (6.3) % 3.0 % (5.9) % Honduran Lempira vs U.S. Dollar (1) ​ (2.8) % — % — % Indian Rupee vs. U.S.
Added
Dollar ​ (4.6) % 9.9 % (7.9) % South African Rand vs U.S. Dollar (2.9) % (7.6) % (6.7) % (1) No material business activity in 2022 in Colombian Peso, nor 2022 and 2023 in the Honduran Lempira.
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Failure to successfully hedge or anticipate currency risks properly could adversely affect our consolidated operating results. 46 Table of Contents Our cash flow hedging instruments as of December 31, 2024 and 2023 are summarized as follows (in thousands).
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DAT A ​ The financial statements required by this item are located beginning on page F-1 of this report and incorporated herein by reference. ​ ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUR E ​ Not applicable. ​

Other TTEC 10-K year-over-year comparisons