10-Q
TTEC HOLDINGS, INC. filed this Form 10-Q on 11/07/2018
Entire Document
 

Customer Growth Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

    

2018

    

2017

    

$ Change

    

% Change

 

Revenue

 

$

103,577

 

$

96,890

 

$

6,687

 

6.9

%

Operating Income

 

 

6,895

 

 

6,295

 

 

600

 

9.5

%

Operating Margin

 

 

6.7

%  

 

6.5

%  

 

 

 

 

 

 

The increase in revenue for the Customer Growth Services segment was due to several client adds in 2018 leading to a $13.1 million increase in client programs offset by program completions of $6.4 million.

The operating income as a percentage of revenue increased slightly to 6.7% for the nine months ended September 30, 2018 as compared to 6.5% in the prior period. This increase is attributable to the increased revenue as noted above offset by a $0.7 million cease use lease expense for a center that was exited as of March 31, 2018.

Customer Technology Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

    

2018

    

2017

    

$ Change

    

% Change

 

Revenue

 

$

118,991

 

$

105,054

 

$

13,937

 

13.3

%

Operating Income

 

 

17,188

 

 

11,034

 

 

6,154

 

55.8

%

Operating Margin

 

 

14.4

%  

 

10.5

%  

 

 

 

 

 

 

The increase in revenue for the Customer Technology Services segment was driven by significant increases in the cloud platform and the systems integration practice as well as a large product sale during the third quarter of 2018 offset by a decrease in the Avaya offerings as we wound down and then sold the business unit in the second quarter of 2017.

The operating income as a percentage of revenue increased to 14.4% for the nine months ended September 30, 2018 as compared to 10.5% in the prior period. The increase is primarily due to significant growth in the segment’s higher margin recurring cloud and system integration practice and consolidation and modernization of the information technology functions within the Company. Included in the operating income was amortization expense related to acquired intangibles of $0.9 million and $0.8 million for the nine months ended September 30, 2018 and 2017, respectively.

Customer Strategy Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

    

2018

    

2017

    

$ Change

    

% Change

 

Revenue

 

$

50,256

 

$

50,290

 

$

(34)

 

(0.1)

%

Operating Income (Loss)

 

 

3,391

 

 

2,746

 

 

645

 

23.5

%

Operating Margin

 

 

6.7

%  

 

5.5

%  

 

 

 

 

 

 

The revenue for the Customer Strategy Services segment remained flat year over year.

The operating income as a percentage of revenue increased to 6.7% for the nine months ended September 30, 2018 as compared to 5.5% in the prior period. The operating income increased primarily due to reduction in losses for the segment’s asset held for sale; excluding this asset held for sale, the operating margin was 11.1% vs 9.6% in the prior year. Included in the operating income was amortization expense of $1.0 million and $1.5 million for the nine months ended September 30, 2018 and 2017, respectively.

Interest Income (Expense)

For the nine months ended September 30, 2018 interest income increased to $3.9 million from $2.0 million in the same period in 2017. Interest expense increased to $22.6 million during 2018 from $8.7 million during 2017 due to larger utilization of the line of credit primarily due to acquisitions, higher interest rates, the upsizing of the credit facility completed in October 2017, and a $8.0 million charge related to the future purchase of the remaining 30% of the Motif acquisition.

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