TTEC Holdings, Inc.

Second quarter 2026 consolidated revenue was $455 million, down 11.3% from $525 million a year ago. Adjusted EBITDA was $39 million, or 8.7% of revenue, versus $52 million, or 10.1% last year; operating income was $26 million, or 5.7% of revenue, versus $37 million, or 7.2%; and adjusted EPS was $0.03 versus $0.22. Engage revenue fell 12.1% to $351 million and operating income was $14 million, or 3.8% of revenue, versus $18 million, or 4.6%. Digital revenue fell 8.5% to $104 million and operating income was $12 million, or 11.7% of revenue, versus $18 million, or 16.1%. Free cash flow was $39 million, net debt decreased $36 million in the quarter, cash was $94 million, debt was $861 million, net debt was $767 million, and net leverage was 3.85x. For full-year 2026, management reiterated Digital guidance, while Engage guidance was revised lower: revenue is now expected to decline 4.1% to 8% at the midpoint, and adjusted EBITDA margin is now 10.1% at the midpoint, still implying 110 bps of improvement versus 2025.

Ken Tuchman said the quarter was challenging and below plan, but emphasized that the company is executing a focused strategy to improve revenue, cost efficiency, and profitability. He highlighted positive momentum in pipeline quality, new enterprise opportunities, AI and automation deployment, and customer wins across several verticals, while also stressing that the company is removing underperforming business where necessary. On Digital, he said demand for the platform and partner ecosystem is strong enough that the board is now reviewing strategic alternatives to maximize shareholder value, while keeping close commercial ties with Engage.

Kenny Wagers focused on the financial underperformance in Engage and the resilience of Digital. He said consolidated revenue was $455 million, adjusted EBITDA $39 million, and adjusted EPS $0.03, with the EPS year-over-year decline partly driven by a higher normalized tax rate of 82.8% versus 43.4% last year, which hurt EPS by $0.08. He noted Engage revenue decline was mainly tied to a small number of clients and that the company is pursuing cost actions that should support savings in the second half of 2026 and into 2027. He also pointed to a strong liquidity position, $39 million of quarterly free cash flow, $58 million of year-to-date net debt reduction, and a credit facility amendment that adds covenant flexibility, while leaving full-year capex guidance unchanged despite a second-quarter spend of $13 million.

Analysts focused on the Engage shortfall, asking how many customers were involved, how much pushback management gets when trying to change economics, and whether the issue reflected broader demand pressure. Management said the conversations are with roughly high single-digit clients, and that the biggest issue was a large public-sector customer plus another smaller telecom client; they stressed the process is collaborative, but the company will transition away from accounts that cannot meet margin goals. Questions also centered on whether margin recovery depends more on restructuring low-profit relationships or on new business growth; management said the back-half improvement is weighted more toward new logos, core embedded business, and technology-enabled productivity gains, while pricing pressure itself has not materially changed. On Digital, management said now is the right time to review strategic alternatives because the business is performing well and the market is valuing AI-related assets strongly.