VANCOUVER, British Columbia--(BUSINESS WIRE)--Nov 8, 2024--
TELUS Digital Experience (TELUS Digital) (NYSE and TSX: TIXT), a company dedicated to crafting lasting customer experiences through data, technology, and a human-centric approach, today released its results for the three- and nine-month periods ended September 30, 2024. In the third quarter of 2024, we formally completed the rebranding of TELUS International as TELUS Digital. The legal name of the company remains TELUS International (Cda) Inc. In this news release and related disclosure, we refer to TELUS International (Cda) Inc. as TELUS Digital. TELUS Corporation (TSX: T, NYSE: TU) is the controlling shareholder of TELUS Digital. All figures in this news release, and elsewhere in TELUS Digital disclosures, are in U.S. dollars, unless specified otherwise, and relate only to TELUS Digital results and measures.
“TELUS Digital’s financial performance in the third quarter of 2024 reflects a solid step toward achieving our full-year outlook, resulting in part from a focus on fundamentals that support our return to growth. We’re guided by four key pillars to improve our trajectory and foster the longer-term success of our business: rejuvenating revenue growth, differentiated service quality, investing in our talent, and embedding AI capabilities in our processes and services. Specifically, to help rejuvenate our revenue growth, we've invested in additional sales capacity and capabilities, advanced our cross-selling and service bundles, and intensified our value added services positioning in the face of heightened price competition in our industry. The results of our efforts are starting to show in the third quarter and we're committed to delivering further improvements,” said Jason Macdonnell, Acting Chief Executive Officer and Chief Operating Officer, TELUS Digital and President, Customer Experience. “Our robust sales funnel for AI-related opportunities drove continued sales momentum in the third quarter. Our AI Data Solutions team won mandates with two clients based in Japan that are developing driver-assistance features for their future car models. Notably, our team has an ongoing engagement with a Santa Clara-based chip maker, recently securing a project involving the development of a multimodal generative AI model, and we look forward to earning our share of further opportunities with this client. In the third quarter, we expanded our business, winning more opportunities across new logos in technology, financial services, e-commerce and fintech, and wellness sectors. Our continued focus on expanding engagement with our existing base saw us win and add new services for dozens of our existing customers, while growing existing services with more than 80 clients, including Google and a leading social media network, as well as with a popular ride-sharing provider and an online food delivery company, several financial services companies, and a multinational fast food chain, to highlight a few. Our commitment to exceptional customer service is in our DNA and our entire global team is focused on delivering a higher quality of service for our customers. To enable our team to do their best and provide even more value to our clients, we’re proactively driving the digitization and AI-enablement of our own business, which ultimately helps us advance our long-term vision for TELUS Digital to expand our AI capabilities, including leveraging AI in our internal processes as well as CX services and growing our AI related expert crowd sourcing capabilities.”
“The ongoing digitization of our CX services is a far-reaching, cross-enterprise program utilizing our full suite of digital solutions, including strategy consulting, turnkey and customizable assistants powered by Fuel iX TM, our proprietary enterprise-grade GenAI management platform, and foundational technology, data, and infrastructure services. We saw promising signs of progress in the third quarter of 2024, providing strategic consulting services to our top clients across the technology, financial services and transportation sectors. Looking ahead, we plan to expand the program globally and bring it to top accounts in each region,” said Tobias Dengel, President of TELUS Digital Solutions. “We're actively evolving our business to not only meet our clients’ demands, but to help shape the AI-enabled economy of the future. This involves leveraging advanced digitization and AI capabilities and accelerating our own internal transformation projects to achieve a true fusion of human talent and technology. As part of this vision, we’ve started to proactively bundle our differentiated digital solutions, including Fuel iX TM, for certain accounts and plan to augment the number of such engagements to demonstrate practical value to each client and our commitment to continuous innovation. TELUS Digital’s recent rebrand supports this robust go-to-market approach and strengthens our positioning. We're also leaning into the power of TELUS, a relationship that sets us apart in the industry, with our parent company being a real-world lab for our digital innovations. With high replicability for all other clients, our Fuel iX TM suite of products is already building a formidable user base, available to more than 35,000 users at TELUS and 17,000 at TELUS Digital. Our employee-assist Fuel EX TM platform hosts a rapidly growing fleet of unique, user-generated copilots now numbering in the thousands that have been developed across all levels of the organization, from our front line team members to the executive suite support functions. The third quarter saw a deepening of our engagement with clients at executive levels, where the combination of our Fuel iX TM AI platform with our recognized leadership in digital design, engineering and CX allowed us to engage as strategic partners to help transform our clients' customer experiences. As part of expanding our AI capabilities, we also continue to evolve our AI Data Solutions sourcing and crowd management platform, with focus on both quality of expertise and increasing our reach globally. GenAI will also play an important role in further automation and efficiencies in how we attract and manage our crowdsourced AI community.”
Gopi Chande, Chief Financial Officer said, “As anticipated, in the third quarter of 2024, we stabilized our financial performance on a sequential quarterly basis. An incremental improvement in our revenue trajectory was supported by continued momentum in our AI Data Solutions line of service, along with the overall top-line growth in digital solutions. We also achieved stabilization in our margins, when normalized for non-recurring items in the previous quarter and taking aside the impact of share-based compensation. As we work to rejuvenate our revenue growth amidst strong price competition in our industry, we are finding ways to partially offset near-term pressures on our profitability through ongoing cost efficiency efforts, and we are on track for achieving $30 million in cost efficiencies planned for this year. Our balance sheet and liquidity profile remain strong, as we continue to reinvest our cash flows back into our business and toward debt repayment. Heading into 2025, we have multiple levers and flexibility to ensure we remain within our desired levels of leverage. We remain confident in our ability to gradually return to growth and maintain a solid margin profile, grounded in the context of our industry’s pressures and opportunities, and as shaped by the increasing adoption of GenAI in our own and our clients’ operations.”
Provided below are financial and operating highlights that include certain non-GAAP measures and ratios. See the Non-GAAP section of this news release for a discussion on such measures and ratios.
Q3 2024 vs. Q3 2023 summary
YTD Q3 2024 vs. YTD Q3 2023 summary
A discussion of our results of operations is included in our Management’s Discussion and Analysis for the three- and nine-month periods ended September 30, 2024, which is filed on SEDAR+ and as Exhibit 99.2 to our Form 6-K filed on EDGAR. Such materials and additional information are also provided at telusdigital.com/investors.
1 Revenue growth on a constant currency basis, Adjusted EBITDA Margin, Adjusted Diluted EPS and Net Debt to Adjusted EBITDA Leverage Ratio are non-GAAP ratios, while Adjusted Net Income, Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. See the Non-GAAP section of this news release.
Outlook
For the full-year 2024, management continues to expect:
Q3 2024 investor call
TELUS Digital will host a conference call today, November 8, 2024 at 1:30 p.m. (ET) / 10:30 a.m. (PT), where management will review the third quarter results, followed by a question and answer session with pre-qualified analysts. A webcast of the conference call will be streamed live on the TELUS Digital Investor Relations website at: https://www.telusdigital.com/investors/news-events and a replay will also be available on the website following the conference call.
Non-GAAP
This news release includes non-GAAP financial information, with reconciliation to GAAP measures presented at the end of this news release. We report certain non-GAAP measures used in the management analysis of our performance, but these do not have standardized meanings under International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS-IASB). These non-GAAP financial measures and non-GAAP ratios may not be comparable to GAAP measures or ratios and may not be comparable to similarly titled non-GAAP financial measures or non-GAAP ratios reported by other companies, including those within our industry and TELUS Corporation, our controlling shareholder.
Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, revenue on a constant currency basis, and Net Debt are non-GAAP financial measures, while Adjusted EBITDA Margin, Adjusted Diluted EPS, revenue growth on a constant currency basis and Net Debt to Adjusted EBITDA Leverage Ratio are non-GAAP ratios.
Adjusted EBITDA is commonly used by our industry peers and provides a measure for investors to compare and evaluate our relative operating performance. We use it to assess our ability to service existing and new debt facilities, and to fund accretive growth opportunities and acquisition targets. In addition, certain financial debt covenants associated with our credit facility, including Net Debt to Adjusted EBITDA Leverage Ratio, are based on Adjusted EBITDA, which requires us to monitor this non-GAAP financial measure in connection with our financial covenants. Adjusted EBITDA should not be considered an alternative to net income in measuring our financial performance, and it should not be used as a replacement measure of current and future operating cash flows. However, we believe a financial measure that presents net income adjusted for these items provides a more consistent measure for management to evaluate period-over-period performance and would enable an investor to better evaluate our underlying business trends, our operational performance and overall business strategy.
We exclude items from Adjusted Net Income and Adjusted EBITDA, such as acquisition, integration and other, foreign exchange gains or losses and, additionally, with respect to Adjusted Net Income, the interest accretion on written put options, amortization of purchased intangible assets, and the related tax effect of these adjustments. Full reconciliations of Adjusted EBITDA and Adjusted Net Income to the comparable GAAP measures are included at the end of this news release.
We calculate Free Cash Flow by deducting capital expenditures from our cash provided by operating activities, as we believe capital expenditures are a necessary ongoing cost to maintain our existing productive capital assets and support our organic business operations. We use Free Cash Flow to evaluate the cash flows generated from our ongoing business operations that can be used to meet our financial obligations, service debt facilities, reinvest in our business, and to fund, in part, potential future acquisitions.
Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by consolidated revenue. We regularly monitor Adjusted EBITDA Margin to evaluate our operating performance compared to established budgets, operational goals and the performance of industry peers.
Adjusted Diluted EPS is used by management to assess the profitability of our business operations on a per share basis. We regularly monitor Adjusted Diluted EPS as it provides a more consistent measure for management and investors to evaluate our period-over-period operating performance, to better understand our ability to manage operating costs and to generate profits. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income by the weighted average number of diluted equity shares outstanding during the period.
Revenue on a constant currency basis is used by management to assess revenue, the most directly comparable GAAP measure, excluding the effect of foreign currency fluctuations. Revenue on a constant currency basis is calculated as current period revenue translated using average foreign exchange rates in the comparable prior period.
Revenue growth on a constant currency basis is used by management to assess the growth of revenue, the most directly comparable GAAP measure, excluding the effect of foreign currency fluctuations. Revenue growth on a constant currency basis is calculated as current period revenue growth translated using average foreign exchange rates in the comparable prior period.
Net Debt to Adjusted EBITDA Leverage Ratio as per our credit agreement is calculated based on Net Debt and Adjusted EBITDA, both as per our credit agreement. We seek to maintain a Net Debt to Adjusted EBITDA Leverage Ratio in the range of 2-3x. We may deviate from our target Net Debt to Adjusted EBITDA Leverage Ratio as per our credit agreement to pursue acquisitions and other strategic opportunities that may require us to borrow additional funds and, additionally, our ability to maintain this targeted ratio depends on our ability to continue to grow our business, general economic conditions, industry trends and other factors.
We have not provided a quantitative reconciliation of our full-year 2024 outlook for Adjusted EBITDA Margin and Adjusted Diluted EPS to our full-year 2024 outlook for net income margin and diluted EPS because we are unable, without making unreasonable efforts, to calculate certain reconciling items with confidence, which could materially affect the computation of these financial ratios and measures.
Cautionary note regarding forward-looking statements
This news release contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim”, “anticipate”, “assume”, “believe”, “contemplate”, “continue”, “could”, “due”, “estimate”, “expect”, “goal”, “intend”, “may”, “objective”, “plan”, “predict”, “potential”, “positioned”, “seek”, “should”, “target”, “will”, “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements are based on our current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management's beliefs and assumptions, and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise, except as required by law.
Specifically, we made several assumptions underlying our financial outlook for the full-year 2024 results, including key assumptions in relation to: our ability to mitigate pricing pressures, the impact of weaker client demand and competitive pressures in our industry, and execute our growth strategy, including by expanding services offered to existing clients and attracting new clients; our ability to grow our AI business; our ability to maintain our corporate culture and competitiveness of our service offerings; our ability to attract and retain talent; our ability to realize the benefits of our acquisition of WillowTree; the relative growth rate and size of our target industry verticals; our projected operating and capital expenditure requirements, and our ability to manage costs and adjust cost structure as needed; and the impact of global conditions on our and our clients’ businesses, including a potential economic recession, inflation, interest rates fluctuations, the Russia-Ukraine conflict and other geopolitical tensions. Our financial outlook provides management’s best judgement of how trends will impact the business and may not be appropriate for other purposes.
Risk factors that may cause actual results to differ materially from current expectations include, among other things:
These risk factors, as well as other risk factors that may impact our business, financial condition and results of operation, are also described in our “Risk Factors” section of our Annual Report available on SEDAR+ and in “Item 3D—Risk Factors” of our Annual Report on Form 20-F filed on February 9, 2024 and available on EDGAR, as updated by our management’s discussion and analysis for the three- and nine-month periods ended September 30, 2024, which is filed on SEDAR and as Exhibit 99.2 to our Form 6-K filed on EDGAR.
TELUS International (Cda) Inc.
Condensed Interim Consolidated Statements of Income
(unaudited)
|
| Three months |
| Nine months | ||||||||||||
Periods ended September 30 (millions except earnings per share) |
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
REVENUE |
| $ | 658 |
|
| $ | 663 |
|
| $ | 1,967 |
|
| $ | 2,016 |
|
|
|
|
|
|
|
|
|
| ||||||||
OPERATING EXPENSES |
|
|
|
|
|
|
|
| ||||||||
Salaries and benefits |
|
| 423 |
|
|
| 403 |
|
|
| 1,265 |
|
|
| 1,258 |
|
Goods and services purchased |
|
| 126 |
|
|
| 116 |
|
|
| 359 |
|
|
| 339 |
|
Share-based compensation |
|
| 14 |
|
|
| 5 |
|
|
| 25 |
|
|
| 21 |
|
Acquisition, integration and other |
|
| 16 |
|
|
| 11 |
|
|
| 32 |
|
|
| 48 |
|
Depreciation |
|
| 35 |
|
|
| 36 |
|
|
| 104 |
|
|
| 102 |
|
Amortization of intangible assets |
|
| 46 |
|
|
| 44 |
|
|
| 135 |
|
|
| 138 |
|
|
|
| 660 |
|
|
| 615 |
|
|
| 1,920 |
|
|
| 1,906 |
|
|
|
|
|
|
|
|
|
| ||||||||
OPERATING (LOSS) INCOME |
|
| (2 | ) |
|
| 48 |
|
|
| 47 |
|
|
| 110 |
|
|
|
|
|
|
|
|
|
| ||||||||
OTHER EXPENSES (INCOME) |
|
|
|
|
|
|
|
| ||||||||
Changes in business combination-related provisions |
|
| — |
|
|
| — |
|
|
| (60 | ) |
|
| — |
|
Interest expense |
|
| 35 |
|
|
| 38 |
|
|
| 106 |
|
|
| 107 |
|
Foreign exchange loss (gain) |
|
| 1 |
|
|
| (2 | ) |
|
| 1 |
|
|
| (4 | ) |
(LOSS) INCOME BEFORE INCOME TAXES |
|
| (38 | ) |
|
| 12 |
|
|
| — |
|
|
| 7 |
|
Income tax (recovery) expense |
|
| (6 | ) |
|
| 3 |
|
|
| 7 |
|
|
| (9 | ) |
NET (LOSS) INCOME |
|
| (32 | ) |
|
| 9 |
|
|
| (7 | ) |
|
| 16 |
|
|
|
|
|
|
|
|
|
| ||||||||
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
| ||||||||
Basic |
| $ | (0.12 | ) |
| $ | 0.03 |
|
| $ | (0.03 | ) |
| $ | 0.06 |
|
Diluted |
| $ | (0.12 | ) |
| $ | 0.03 |
|
| $ | (0.16 | ) |
| $ | 0.06 |
|
|
|
|
|
|
|
|
|
| ||||||||
TOTAL WEIGHTED AVERAGE SHARES OUTSTANDING (millions) |
|
|
|
|
|
|
|
| ||||||||
Basic |
|
| 275 |
|
|
| 274 |
|
|
| 275 |
|
|
| 273 |
|
Diluted |
|
| 275 |
|
|
| 276 |
|
|
| 294 |
|
|
| 277 |
|
TELUS International (Cda) Inc.
Condensed Interim Consolidated Statements of Financial Position
(unaudited)
As at (millions) |
| September 30, 2024 |
| December 31, 2023 | ||
ASSETS |
|
|
|
| ||
Current assets |
|
|
|
| ||
Cash and cash equivalents |
| $ | 149 |
| $ | 127 |
Accounts receivable |
|
| 470 |
|
| 498 |
Due from affiliated companies |
|
| 39 |
|
| 62 |
Income and other taxes receivable |
|
| 8 |
|
| 5 |
Prepaid and other assets |
|
| 42 |
|
| 35 |
Current portion of derivative assets |
|
| 12 |
|
| 16 |
|
|
| 720 |
|
| 743 |
Non-current assets |
|
|
|
| ||
Property, plant and equipment, net |
|
| 485 |
|
| 517 |
Intangible assets, net |
|
| 1,437 |
|
| 1,546 |
Goodwill |
|
| 1,971 |
|
| 1,963 |
Deferred income taxes |
|
| 39 |
|
| 29 |
Other long-term assets |
|
| 26 |
|
| 25 |
|
|
| 3,958 |
|
| 4,080 |
Total assets |
| $ | 4,678 |
| $ | 4,823 |
|
|
|
|
| ||
LIABILITIES AND OWNERS’ EQUITY |
|
|
|
| ||
Current liabilities |
|
|
|
| ||
Accounts payable and accrued liabilities |
| $ | 301 |
| $ | 290 |
Due to affiliated companies |
|
| 216 |
|
| 178 |
Income and other taxes payable |
|
| 61 |
|
| 57 |
Current portion of provisions |
|
| 7 |
|
| 2 |
Current maturities of long-term debt |
|
| 120 |
|
| 122 |
|
|
| 705 |
|
| 649 |
Non-current liabilities |
|
|
|
| ||
Provisions |
|
| 138 |
|
| 191 |
Long-term debt |
|
| 1,480 |
|
| 1,628 |
Derivative liabilities |
|
| 14 |
|
| 12 |
Deferred income taxes |
|
| 271 |
|
| 290 |
Other long-term liabilities |
|
| 22 |
|
| 16 |
|
|
| 1,925 |
|
| 2,137 |
Total liabilities |
|
| 2,630 |
|
| 2,786 |
|
|
|
|
| ||
Owners’ equity |
|
| 2,048 |
|
| 2,037 |
Total liabilities and owners’ equity |
| $ | 4,678 |
| $ | 4,823 |
TELUS International (Cda) Inc.
Condensed Interim Consolidated Statements of Cash Flows
(unaudited)
|
| Three months |
| Nine months | ||||||||||||
Periods ended September 30 (millions) |
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
| ||||||||
Net (loss) income |
| $ | (32 | ) |
| $ | 9 |
|
| $ | (7 | ) |
| $ | 16 |
|
Adjustments: |
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization |
|
| 81 |
|
|
| 80 |
|
|
| 239 |
|
|
| 240 |
|
Interest expense |
|
| 35 |
|
|
| 38 |
|
|
| 106 |
|
|
| 107 |
|
Income tax (recovery) expense |
|
| (6 | ) |
|
| 3 |
|
|
| 7 |
|
|
| (9 | ) |
Share-based compensation |
|
| 14 |
|
|
| 5 |
|
|
| 25 |
|
|
| 21 |
|
Changes in business combination-related provisions |
|
| — |
|
|
| — |
|
|
| (60 | ) |
|
| — |
|
Change in market value of derivatives and other |
|
| (5 | ) |
|
| (3 | ) |
|
| (9 | ) |
|
| (5 | ) |
Net change in non-cash operating working capital |
|
| 52 |
|
|
| 66 |
|
|
| 106 |
|
|
| 37 |
|
Share-based compensation payments |
|
| — |
|
|
| (2 | ) |
|
| — |
|
|
| (2 | ) |
Income taxes paid, net |
|
| (18 | ) |
|
| (11 | ) |
|
| (36 | ) |
|
| (49 | ) |
Cash provided by operating activities |
|
| 121 |
|
|
| 185 |
|
|
| 371 |
|
|
| 356 |
|
|
|
|
|
|
|
|
|
| ||||||||
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
| ||||||||
Cash payments for capital assets |
|
| (25 | ) |
|
| (20 | ) |
|
| (76 | ) |
|
| (58 | ) |
Cash receipts from other assets |
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
Cash payments for acquisitions, net |
|
| — |
|
|
| (1 | ) |
|
| (3 | ) |
|
| (852 | ) |
Cash used in investing activities |
|
| (25 | ) |
|
| (21 | ) |
|
| (78 | ) |
|
| (910 | ) |
|
|
|
|
|
|
|
|
| ||||||||
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
| ||||||||
Shares issued |
|
| — |
|
|
| 1 |
|
|
| 2 |
|
|
| 3 |
|
Withholding taxes paid related to net share settlement of equity awards |
|
| (1 | ) |
|
| (1 | ) |
|
| (4 | ) |
|
| (3 | ) |
Long-term debt issued |
|
| 115 |
|
|
| 40 |
|
|
| 205 |
|
|
| 1,076 |
|
Repayment of long-term debt |
|
| (193 | ) |
|
| (187 | ) |
|
| (405 | ) |
|
| (435 | ) |
Interest paid on credit facilities |
|
| (23 | ) |
|
| (27 | ) |
|
| (71 | ) |
|
| (80 | ) |
Cash (used in) provided by financing activities |
|
| (102 | ) |
|
| (174 | ) |
|
| (273 | ) |
|
| 561 |
|
|
|
|
|
|
|
|
|
| ||||||||
Effect of exchange rate changes on cash and cash equivalents |
|
| 3 |
|
|
| (1 | ) |
|
| 2 |
|
|
| — |
|
|
|
|
|
|
|
|
|
| ||||||||
CASH POSITION |
|
|
|
|
|
|
|
| ||||||||
(Decrease) increase in cash and cash equivalents |
|
| (3 | ) |
|
| (11 | ) |
|
| 22 |
|
|
| 7 |
|
Cash and cash equivalents, beginning of period |
|
| 152 |
|
|
| 143 |
|
|
| 127 |
|
|
| 125 |
|
Cash and cash equivalents, end of period |
|
| 149 |
|
|
| 132 |
|
|
| 149 |
|
|
| 132 |
|
Non-GAAP reconciliations
(unaudited)
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(millions, except percentages) |
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
Revenue, as reported |
| $ | 658 |
|
| $ | 663 |
|
| $ | 1,967 |
|
| $ | 2,016 |
|
Foreign exchange impact on current period revenue using prior comparative period's rates |
|
| (1 | ) |
|
| (10 | ) |
|
| 1 |
|
|
| (3 | ) |
Revenue on a constant currency basis |
| $ | 657 |
|
| $ | 653 |
|
| $ | 1,968 |
|
| $ | 2,013 |
|
Revenue growth |
|
| (1 | )% |
|
| 8 | % |
|
| (2 | )% |
|
| 10 | % |
Revenue growth on a constant currency basis |
|
| (1 | )% |
|
| 6 | % |
|
| (2 | )% |
|
| 10 | % |
|
| Three Months Ended |
| Nine Months Ended | ||||
(millions, except per share amounts) |
| 2024 |
| 2023 |
| 2024 |
| 2023 |
Net (loss) income |
| $ (32) |
| $ 9 |
| $ (7) |
| $ 16 |
Add back (deduct): |
|
|
|
|
|
|
|
|
Acquisition, integration and other |
| 16 |
| 11 |
| 32 |
| 48 |
Amortization of purchased intangible assets |
| 42 |
| 42 |
| 127 |
| 131 |
Interest accretion on written put options |
| 2 |
| 3 |
| 8 |
| 9 |
Foreign exchange loss (gain) |
| 1 |
| (2) |
| 1 |
| (4) |
Tax effect of the adjustments above |
| (14) |
| (10) |
| (35) |
| (40) |
Adjusted Net Income |
| $ 15 |
| $ 53 |
| $ 126 |
| $ 160 |
Adjusted Basic Earnings Per Share |
| $ 0.05 |
| $ 0.19 |
| $ 0.46 |
| $ 0.59 |
Adjusted Diluted Earnings Per Share |
| $ 0.05 |
| $ 0.19 |
| $ 0.43 |
| $ 0.58 |
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(millions, except percentages) |
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
Net (loss) income |
| $ | (32 | ) |
| $ | 9 |
|
| $ | (7 | ) |
| $ | 16 |
|
Add back (deduct): |
|
|
|
|
|
|
|
| ||||||||
Acquisition, integration and other |
|
| 16 |
|
|
| 11 |
|
|
| 32 |
|
|
| 48 |
|
Depreciation and amortization |
|
| 81 |
|
|
| 80 |
|
|
| 239 |
|
|
| 240 |
|
Interest expense |
|
| 35 |
|
|
| 38 |
|
|
| 106 |
|
|
| 107 |
|
Foreign exchange loss (gain) |
|
| 1 |
|
|
| (2 | ) |
|
| 1 |
|
|
| (4 | ) |
Income tax expense (recovery) |
|
| (6 | ) |
|
| 3 |
|
|
| 7 |
|
|
| (9 | ) |
Adjusted EBITDA |
| $ | 95 |
|
| $ | 139 |
|
| $ | 378 |
|
| $ | 398 |
|
Net (loss) income margin |
|
| (4.9 | )% |
|
| 1.4 | % |
|
| (0.4 | )% |
|
| 0.8 | % |
Adjusted EBITDA Margin |
|
| 14.4 | % |
|
| 21.0 | % |
|
| 19.2 | % |
|
| 19.7 | % |
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(millions) |
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
Cash provided by operating activities |
| $ | 121 |
|
| $ | 185 |
|
| $ | 371 |
|
| $ | 356 |
|
Less: capital expenditures |
|
| (23 | ) |
|
| (26 | ) |
|
| (71 | ) |
|
| (66 | ) |
Free Cash Flow |
| $ | 98 |
|
| $ | 159 |
|
| $ | 300 |
|
| $ | 290 |
|
As at (millions, except for ratio) |
| September 30, 2024 |
| December 31, 2023 | ||||
|
|
|
|
| ||||
Outstanding credit facility |
| $ | 1,331 |
|
| $ | 1,463 |
|
Contingent facility utilization |
|
| 7 |
|
|
| 7 |
|
Liability related to provisions for written put options 1 |
|
| — |
|
|
| 68 |
|
Net derivative liabilities |
|
| 5 |
|
|
| — |
|
Cash balance 2 |
|
| (149 | ) |
|
| (127 | ) |
Net Debt as per credit agreement |
| $ | 1,194 |
|
| $ | 1,411 |
|
Adjusted EBITDA (trailing 12 months) |
| $ | 562 |
|
| $ | 582 |
|
Adjustments required as per credit agreement |
| $ | (147 | ) |
| $ | (84 | ) |
Net Debt to Adjusted EBITDA Leverage Ratio as per credit agreement |
|
| 2.9 |
|
|
| 2.8 |
|
1 Reflects the undiscounted amount payable in cash on the estimated provisions for written put options arising from our acquisition of WillowTree. During the second quarter of 2024, we amended the provisions for written put options and eliminated the requirement to settle a portion in cash. See Note 12—Provisions in our condensed interim consolidated financial statements for the three- and nine-month periods ended September 30, 2024 for additional details on the amendments.
2 Maximum cash balance permitted as a reduction to net debt, as per the credit agreement, is $150 million.
About TELUS Digital
TELUS Digital (NYSE & TSX: TIXT) crafts unique and enduring experiences for customers and employees, and creates future-focused digital transformations that stand the test of time. We are the brand behind the brands. Our global team members are both passionate ambassadors of our clients’ products and services, and visionary technology experts resolute in our pursuit to elevate their end customer journeys, solve business challenges, mitigate risks, and drive continuous innovation. Our portfolio of end-to-end, integrated capabilities include digital IT services, such as cloud solutions and AI-fueled automation, trust and safety services, AI data solutions, including expertise in computer vision, and front-end digital design and consulting services. Fuel iX TM is TELUS Digital’s proprietary GenAI engine at the heart of our innovation, helping enterprises advance their GenAI pilots to working prototypes and production at scale, quickly, securely and responsibly across multiple environments, applications and clouds.
Powered by purpose, TELUS Digital leverages technology, human ingenuity and compassion to fuel remarkable outcomes and create inclusive, thriving communities in the regions where we operate around the world. Guided by our Humanity-in-the-loop principles, we take a responsible approach to the transformational technologies we develop and deploy by proactively considering and addressing the broader impacts of our work. Learn more at: telusdigital.com
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CONTACT: TELUS Digital Investor Relations
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ir@telusdigital.com
TELUS Digital Media Relations
Ali Wilson
(604) 328-7093
media.relations@telusdigital.com
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SOURCE: TELUS Digital
Copyright Business Wire 2024.
PUB: 11/08/2024 06:45 AM/DISC: 11/08/2024 06:45 AM
http://www.businesswire.com/news/home/20241108577914/en