Revenue of $667 million, up 7%
year-over-year
Net loss of $7 million, compared with net
income of $56 million in the same quarter last year
Diluted EPS of $(0.03), compared with $0.21
in the same quarter last year
Adjusted EBITDA1 of $120 million, 20% lower
year-over-year
Adjusted Diluted EPS1 of $0.17, 43% lower
year-over-year
TELUS International (NYSE and TSX: TIXT), a leading digital
customer experience innovator that designs, builds, and delivers
next-generation solutions, including artificial intelligence (AI)
and content moderation, for global and disruptive brands, today
released its results for the three- and six-month periods ended
June 30, 2023. TELUS Corporation (TSX: T, NYSE: TU) is the
controlling shareholder of TELUS International. All figures in this
news release, and elsewhere in TELUS International disclosures, are
in U.S. dollars, unless specified otherwise, and relate only to
TELUS International results and measures.
“As previously announced on July 13, the second quarter of 2023
marked a challenging operating environment for TELUS International
due to meaningful headwinds brought about by pressure in the
macroeconomic environment and aggressive near-term cost cutting by
certain large clients,” said Jeff Puritt, President and CEO of
TELUS International. “Through these challenging times, I sincerely
thank our global teams for their resilience and perseverance, and
staying committed to our clients and their fellow team members.
Despite these meaningful pressures and the resultant delays, our
global sales team continued to win incremental business in the
second quarter, attracting new logos such as a B2B human resources
software company; a multi-utility service provider; a subsidiary of
a multinational IT and consulting company; and a facilities-based
technology and communications company. We were also successful in
expanding the services we provide to many of our existing clients.
In the second quarter, this included winning more work with Google
— our third largest client; as well as driving incremental volumes
with an integrated power company in the US; a leading North
American financial institution; a major American telecommunications
provider; and a North American integrated retail electricity and
power generation company.”
Jeff concluded, “As further demonstration of our team’s
sustained efforts, TELUS International continued to secure
industry-wide recognition in the second quarter. Notably, for the
third consecutive year, our proprietary intelligent Bot Platform
was named the Best Informational Bot Solution at the AI
Breakthrough Awards, which conducts one of the deepest evaluations
of the global AI industry, and this year’s competition included
over 3,000 solutions and companies from more than 20 countries. We
were also named the Elite 8 winner of the 2023 Achievers 50 Most
Engaged Workplaces Award in the category of Purpose and Leadership.
And, once again, WillowTree, a TELUS International Company, won a
Webby for the app it created in partnership with Meals on Wheels of
Charlottesville in the category of Best Public Service and
Activism. For me, these highlighted awards are a true
representation of our team’s ability to bring our culture to life
and demonstrates our unwavering commitment to supporting the
well-being of the citizens and the communities where we
operate.”
Vanessa Kanu, CFO said, “Our actual results for the second
quarter came in within the ranges we released in mid-July. While we
continued to grow our top line, our profitability in the second
quarter was under pressure, as we carried excess capacity in
certain areas of our business where we experienced a volume
decline. To mitigate the near-term pressure, we have actioned
meaningful cost efficiency efforts involving team member reductions
to align our support costs with current demand to drive
improvements to our bottom line. While our profitability was under
pressure in the quarter, Net Debt to Adjusted EBITDA Leverage Ratio
as per our credit agreement was 3.0x, which remains within the
steady-state range we’ve communicated in the past.”
Vanessa concluded, “We have reduced the risk in our current
outlook for the full-year 2023 based on what we know at this time,
and it reflects a cautious view on what we see in our pipeline,
hear from our clients, and observe in the broader macroeconomic
environment. While each quarter’s results undoubtedly matter, we
are also keenly focused on building momentum in the months and
years ahead. Indeed, we see meaningful go-to-market sales
opportunities being created by the proliferation of digital
transformation and generative AI where our company is uniquely
positioned and credentialed to design, build and deliver
differentiated, responsible and market-leading solutions for our
clients.”
Provided below are financial and operating highlights that
include certain non-GAAP measures. See the Non-GAAP section of this
news release for a discussion on such measures.
Q2 2023 vs. Q2 2022 summary
- Revenue of $667 million, up $43 million, a 7% increase
year-over-year on both a reported and a constant currency basis2,
of which $45 million was from WillowTree, and excluding WillowTree,
our revenue was $622 million, a decrease of $2 million or less than
1%, due to a reduction in service volumes from some of our larger
clients delivered primarily out of Europe, particularly our
technology clients, as well as a global financial institution
client. Revenue growth was not materially impacted by changes in
foreign currency rates during the second quarter of 2023.
- Net loss of $7 million and diluted EPS of $(0.03), compared
with net income of $56 million and diluted EPS of $0.21 in the same
quarter of the prior year. Net (loss) income margin, calculated by
dividing net (loss) income by revenue for the period, was (1.0)%,
compared with 9.0% for the same quarter in the prior year. Net
(loss) income and diluted EPS include the impact of share-based
compensation, acquisition and integration charges and amortization
of purchased intangible assets, among other items. Adjusted Net
Income2, which excludes the impact of these items, was $46 million
in the second quarter of 2023, compared with $81 million in the
same quarter of the prior year, due to the increase in salaries and
benefits (more detail provided below) and interest expense
outpacing revenue growth, and higher goods and services purchased,
which were only partially offset by lower income taxes in the
second quarter of 2023.
- Adjusted EBITDA was $120 million, a decrease of 20% from $150
million in the same quarter of the prior year, due to the increase
in salaries and benefits outpacing revenue growth, and higher goods
and services purchased. Profitability in the quarter was impacted
by cost imbalances arising from reductions in service demand,
principally in Europe, from some of our larger clients, as well as
higher service delivery costs in our AI business due to higher task
complexity — all of these impacts combined were only partially
offset by cost efficiency efforts realized during the quarter.
Adjusted EBITDA Margin2 was 18.0%, compared with 24.0% in the same
quarter of the prior year, due to the aforementioned higher service
delivery costs and changes in our revenue mix across industry
verticals and geographic regions. Adjusted Diluted EPS was $0.17,
43% lower year-over-year.
- Cash provided by operating activities was $91 million and Free
Cash Flow2 was $66 million, compared with $95 million and $66
million, respectively, in the same quarter of the prior year, with
the decrease in cash provided by operating activities offset by
lower capital expenditures in the quarter.
- Net Debt to Adjusted EBITDA Leverage Ratio as per our credit
agreement of 3.0x as of June 30, 2023 compared with 1.1x as of
December 31, 2022 and 2.9x immediately after closing of the
WillowTree acquisition in January 2023.
- Team member count was 76,594 as of June 30, 2023, an increase
of 11% year-over-year. The sequential quarter-over-quarter nominal
decrease of 0.21% does not yet reflect the full impact of team
member reductions taken as part of cost savings efforts in 2023 to
right-size operations, particularly in Europe.
YTD Q2 2023 vs. YTD Q2 2022 summary
- Revenue of $1,353 million, up $130 million, a 11% increase
year-over-year on both a reported and a constant currency basis, of
which $103 million was from WillowTree, and excluding WillowTree,
our revenue was $1,250 million, an increase of $27 million, or 2%,
which included an unfavorable foreign currency impact of
approximately 1%, associated with the strengthening U.S. dollar
exchange rate against the euro. Revenue increase was driven by
growth in services provided to existing clients as well as new
clients.
- Net income of $7 million and diluted EPS of $0.03, compared
with $90 million and $0.33 respectively, in the same period of the
prior year. Net income margin was 0.5%, compared with 7.4% for the
same period in the prior year. Adjusted Net Income, as defined
above, was $122 million, compared with $150 million in the same
period of the prior year, due to the increase in salaries and
benefits and interest expense outpacing revenue growth, the impacts
of which were more significant in the second quarter of 2023, as
described above, which were only partially offset by lower goods
and services purchased and income taxes.
- Adjusted EBITDA was $275 million, 6% lower compared with $292
million in the same period of the prior year, due to the increase
in salaries and benefits outpacing revenue growth, driven by the
higher service delivery costs which impacts were more significant
in the second quarter of 2023, as described above, which were
partially offset by lower goods and services purchased. Adjusted
EBITDA Margin2 was 20.3%, compared with 23.9% in the same period of
the prior year, due to the same impacts as described in the
quarterly summary above. Adjusted Diluted EPS was $0.44, 21% lower
year-over-year.
- Cash provided by operating activities was $171 million and Free
Cash Flow2 was $131 million, compared to $224 million and $170
million, respectively, in the same period of the prior year,
primarily due to higher net outflows from working capital arising
from our acquisition of WillowTree, which included payments for
transaction costs that we incurred to acquire the company, as well
as the payments for transaction costs incurred by WillowTree prior
to the acquisition that were assumed liabilities as part of the
acquisition. Excluding these transaction costs, Free Cash Flow
would have been $167 million, a decrease of $3 million, or 2%,
compared with the same period of the prior year.
A discussion of our results of operations is included in our
management’s discussion and analysis for the three- and six-month
periods ended June 30, 2023, 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
telusinternational.com/investors.
Outlook
As previously communicated on July 13, for the full-year 2023,
management expects:
- Revenue in the range of $2,700 to $2,730 million, including
$205 to $215 million from WillowTree, representing revenue growth
of 9% to 11% on a reported basis, and growth of 1% to 2% excluding
WillowTree. This assumes an average exchange rate of one euro to
1.09 U.S. dollars for 2023.
- Adjusted EBITDA in the range of $575 to $600 million, and
Adjusted EBITDA Margin in the range of 21.3% to 22.0%.
- Adjusted Diluted EPS in the range of $0.90 to $0.97.
Q2 2023 investor call
TELUS International will host a conference call today, August 4,
2023 at 10:30 a.m. (ET) / 7:30 a.m. (PT), where management will
review the second 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 International
Investor Relations website at:
https://www.telusinternational.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 a standardized
meaning under IFRS. 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, and
revenue on a constant currency basis are non-GAAP financial
measures, while Adjusted EBITDA Margin, Adjusted Diluted EPS, and
revenue growth on a constant currency basis 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 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 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 as
we believe they are driven by factors that are not indicative of
our ongoing operating performance, including acquisition,
integration and other, share-based compensation, with respect to
Adjusted Net Income, the interest accretion on written put options
entered into in connection with our acquisition of WillowTree,
foreign exchange gains or losses and 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 measure 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 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
diluted total weighted average number of 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
using foreign exchange rates prevailing 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 using foreign exchange
rates prevailing in the comparable prior period.
We have not provided a quantitative reconciliation of our
full-year 2023 outlook for Adjusted EBITDA Margin and Adjusted
Diluted EPS to our full-year 2023 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 financial outlook for the full-year 2023 results, our business,
operations and financial performance and condition, as well as
statements relating to our ability to mitigate pressures on
profitability with cost efficiency efforts and incremental
automation platforms. We caution the reader that information
provided in this news release regarding our financial outlook for
full-year 2023 results, as well as information regarding our
objectives and expectations, is provided in order to give context
to the nature of some of the company’s future plans and may not be
appropriate for other purposes. 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, the benefits, synergies and risks related to our
acquisition of WillowTree, 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 2023 results, including key
assumptions in relation to: our ability to execute our growth
strategy, including by expanding services offered to existing
clients and attracting new clients; our ability to maintain our
corporate culture and competitiveness of our service offerings; our
ability to attract and retain talent; our ability to continue to
integrate and 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; our ability to mitigate pressures on profitability
with cost efficiency efforts and incremental automation platforms
and otherwise ensure our labor costs are commensurate with the
demand for our services; and the impact of global conditions on our
and our clients’ businesses, including inflation, a potential
economic recession, changes in interest rates, the Russia-Ukraine
conflict and ongoing impacts arising from the COVID-19 pandemic on
our business, financial condition, financial performance and
liquidity. 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:
- We face intense competition from companies that offer services
similar to ours.
- Our business and financial results have been, and could be,
adversely affected by a number of global conditions, and the
effects of these same conditions on our clients’ businesses and
demand for our services.
- Because the majority of our costs is fixed in the short-term,
we may experience a temporary delay in our ability to immediately
right-size our cost structure in response to lower client
demand.
- Three clients account for a significant portion of our revenue
and loss of or reduction in business from, or consolidation of,
these or any other major clients could have a material adverse
effect.
- Our growth prospects are dependent upon attracting and
retaining enough qualified team members to support our operations,
as competition for talent is intense.
- Our ability to grow and maintain our profitability could be
materially affected if changes in technology and client
expectations outpace our service offerings and the development of
our internal tools and processes or if we are not able to meet the
expectations of our clients.
- If we cannot maintain our culture as we grow, our services,
financial performance and business may be harmed.
- Our business could be adversely affected if we lose one or more
members of our senior management.
- Our business may not develop in ways that we currently
anticipate due to negative public reaction to offshore outsourcing,
content moderation and proposed legislation or otherwise.
- Our business would be adversely affected if individuals
providing data annotation services through TIAI’s crowdsourcing
solutions were classified as employees (not as independent
contractors).
- We could be unable to successfully identify, complete,
integrate and realize the benefits of acquisitions, including our
recently completed acquisition of WillowTree or manage the
associated risks.
- The unauthorized disclosure of sensitive or confidential client
and customer data, through cyberattacks or otherwise, could expose
us to protracted and costly litigation, damage our reputation and
cause us to lose clients / revenue.
- Our policies, procedures and programs to safeguard the health,
safety and security of our team members, particularly our content
moderation team members, may not be adequate, which could adversely
affect our ability to attract and retain team members and could
result in increased costs, including due to claims against us.
- The dual-class structure contained in our articles has the
effect of concentrating voting control and the ability to influence
corporate matters with TELUS Corporation.
- The market price of our subordinate voting shares may be
affected by low trading volume and the market pricing for our
subordinate voting shares may decline as a result of future sales,
or the perception of the likelihood of future sales, by us or our
shareholders in the public market.
- TELUS Corporation will, for the foreseeable future, control the
TELUS International board of directors.
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, 2023 and available
on EDGAR, as updated by our management’s discussion and analysis
for the three- and six-month periods ended June 30, 2023, 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 (Loss)
(unaudited)
Three months
Six months
Periods ended June 30 (millions except
earnings per share)
2023
2022
2023
2022
REVENUE
$
667
$
624
$
1,353
$
1,223
OPERATING EXPENSES
Salaries and benefits
427
356
855
698
Goods and services purchased
120
118
223
233
Share-based compensation
2
7
16
14
Acquisition, integration and other
21
6
37
10
Depreciation
33
30
66
59
Amortization of intangible assets
48
34
94
70
651
551
1,291
1,084
OPERATING INCOME
16
73
62
139
OTHER EXPENSES (INCOME)
Interest expense
36
10
69
19
Foreign exchange gain
(3
)
(14
)
(2
)
(14
)
(LOSS) INCOME BEFORE INCOME
TAXES
(17
)
77
(5
)
134
Income tax (recovery) expense
(10
)
21
(12
)
44
NET (LOSS) INCOME
$
(7
)
$
56
$
7
$
90
(LOSS) EARNINGS PER SHARE
Basic
$
(0.03
)
$
0.21
$
0.03
$
0.34
Diluted
$
(0.03
)
$
0.21
$
0.03
$
0.33
TOTAL WEIGHTED AVERAGE SHARES
OUTSTANDING (millions)
Basic
273
266
273
266
Diluted
273
269
276
269
TELUS International (Cda)
Inc.
Condensed Interim Consolidated
Statements of Financial Position
(unaudited)
As at (millions)
June 30, 2023
December 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$
143
$
125
Accounts receivable
490
428
Due from affiliated companies
99
81
Income and other taxes receivable
10
7
Prepaid and other assets
58
35
Current portion of derivative assets
19
19
819
695
Non-current assets
Property, plant and equipment, net
489
449
Intangible assets, net
1,624
1,008
Goodwill
1,973
1,350
Derivative assets
6
13
Deferred income taxes
25
14
Other long-term assets
26
27
4,143
2,861
Total assets
$
4,962
$
3,556
LIABILITIES AND OWNERS’ EQUITY
Current liabilities
Accounts payable and accrued
liabilities
$
308
$
289
Due to affiliated companies
137
111
Income and other taxes payable
69
67
Current portion of provisions
8
1
Current maturities of long-term debt
122
83
Current portion of derivative
liabilities
—
1
644
552
Non-current liabilities
Provisions
203
2
Long-term debt
1,792
881
Deferred income taxes
306
264
Other long-term liabilities
21
19
2,322
1,166
Total liabilities
2,966
1,718
Owners’ equity
1,996
1,838
Total liabilities and owners’
equity
$
4,962
$
3,556
TELUS International (Cda)
Inc.
Condensed Interim Consolidated
Statements of Cash Flows
(unaudited)
Three months
Six months
Periods ended June 30 (millions)
2023
2022
2023
2022
OPERATING ACTIVITIES
Net (loss) income
$
(7
)
$
56
$
7
$
90
Adjustments:
Depreciation and amortization
81
64
160
129
Interest expense
36
10
69
19
Income tax (recovery) expense
(10
)
21
(12
)
44
Share-based compensation
2
7
16
14
Change in market value of derivatives and
other
(3
)
4
(2
)
3
Net change in non-cash operating working
capital
21
(39
)
(29
)
(36
)
Share-based compensation payments
—
(1
)
—
(6
)
Income taxes paid, net
(29
)
(27
)
(38
)
(33
)
Cash provided by operating activities
91
95
171
224
INVESTING ACTIVITIES
Cash payments for capital assets
(24
)
(29
)
(38
)
(50
)
Cash payments for other assets
—
(20
)
—
(20
)
Cash payments for acquisitions, net
(1
)
—
(851
)
—
Cash used in investing activities
(25
)
(49
)
(889
)
(70
)
FINANCING ACTIVITIES
Shares issued
1
1
2
2
Withholding taxes paid related to net
share settlement of equity awards
(1
)
(1
)
(2
)
(1
)
Repayment of long-term debt
(111
)
(73
)
(248
)
(129
)
Long-term debt issued
73
—
1,036
—
Interest paid on credit facilities
(27
)
(6
)
(53
)
(11
)
Cash (used in) provided by financing
activities
(65
)
(79
)
735
(139
)
Effect of exchange rate changes on cash
and cash equivalents
—
(5
)
1
(7
)
CASH POSITION
Increase (decrease) in cash and cash
equivalents
1
(38
)
18
8
Cash and cash equivalents, beginning of
period
142
161
125
115
Cash and cash equivalents, end of
period
$
143
$
123
$
143
$
123
Non-GAAP reconciliations
(unaudited)
Three Months Ended June
30
Six Months Ended June
30
(millions, except percentages)
2023
2022
2023
2022
Revenue, as reported
$
667
$
624
$
1,353
$
1,223
Foreign exchange impact on current period
revenue using prior comparative period's rates
(1
)
23
8
38
Revenue on a constant currency
basis
$
666
$
647
$
1,361
$
1,261
Revenue growth
7
%
17
%
11
%
18
%
Revenue growth on a constant currency
basis
7
%
21
%
11
%
21
%
Three Months Ended June
30
Six Months Ended June
30
(millions, except per share amounts)
2023
2022
2023
2022
Net (loss) income
$
(7
)
$
56
$
7
$
90
Add back (deduct):
Acquisition, integration and other
21
6
37
10
Share-based compensation
2
7
16
14
Interest accretion on written put
options
3
—
6
—
Foreign exchange gain
(3
)
(14
)
(2
)
(14
)
Amortization of purchased intangible
assets
45
31
89
62
Tax effect of the adjustments above
(15
)
(5
)
(31
)
(12
)
Adjusted Net Income
$
46
$
81
$
122
$
150
Adjusted Basic Earnings Per
Share
$
0.17
$
0.30
$
0.45
$
0.56
Adjusted Diluted Earnings Per
Share
$
0.17
$
0.30
$
0.44
$
0.56
Three Months Ended June
30
Six Months Ended June
30
(millions, except percentages)
2023
2022
2023
2022
Net (loss) income
(7
)
56
$
7
$
90
Add back (deduct):
Acquisition, integration and other
21
6
37
10
Share-based compensation
2
7
16
14
Foreign exchange gain
(3
)
(14
)
(2
)
(14
)
Depreciation and amortization
81
64
160
129
Interest expense
36
10
69
19
Income taxes
(10
)
21
(12
)
44
Adjusted EBITDA
$
120
$
150
$
275
$
292
Net (loss) income margin
(1.0
)%
9.0
%
0.5
%
7.4
%
Adjusted EBITDA Margin
18.0
%
24.0
%
20.3
%
23.9
%
Three Months Ended June
30
Six Months Ended June
30
(millions)
2023
2022
2023
2022
Cash provided by operating activities
91
95
$
171
$
224
Less: capital expenditures
(25
)
(29
)
(40
)
(54
)
Free Cash Flow
$
66
$
66
$
131
$
170
Calculation of Net Debt to Adjusted
EBITDA Leverage Ratio as per credit agreement
(unaudited)
As at (millions, except for ratio)
June 30, 2023
December 31, 2022
Outstanding credit facility
$
1,660
$
742
Contingent facility utilization
8
7
Liability related to provisions for
written put options1
74
—
Net derivative liabilities
—
1
Cash balance2
(143
)
(125
)
Net Debt as per credit
agreement
$
1,599
$
625
Adjusted EBITDA (trailing 12
months)
$
590
$
607
Adjustments required as per credit
agreement
$
(54
)
$
(63
)
Net Debt to Adjusted EBITDA Leverage
Ratio as per credit agreement
3.0
1.1
1 Reflects the undiscounted amount payable
in cash on the estimated provisions for written put options arising
from our acquisition of WillowTree.
2 Maximum cash balance permitted as a
reduction to net debt, as per the credit agreement, is $150
million.
About TELUS International
TELUS International (NYSE & TSX: TIXT) designs, builds and
delivers next-generation digital solutions to enhance the customer
experience (CX) for global and disruptive brands. The company’s
services support the full lifecycle of its clients’ digital
transformation journeys, enabling them to more quickly embrace
next-generation digital technologies to deliver better business
outcomes. TELUS International’s integrated solutions span digital
strategy, innovation, consulting and design, IT lifecycle including
managed solutions, intelligent automation and end-to-end AI data
solutions including computer vision capabilities, as well as
omnichannel CX and trust and safety solutions including content
moderation. Fueling all stages of company growth, TELUS
International partners with brands across strategic industry
verticals, including tech and games, communications and media,
ecommerce and fintech, banking, financial services and insurance,
healthcare, and others.
TELUS International’s unique caring culture promotes diversity
and inclusivity through its policies, team member resource groups
and workshops, and equal employment opportunity hiring practices
across the regions where it operates. Since 2007, the company has
positively impacted the lives of more than 1.2 million citizens
around the world, building stronger communities and helping those
in need through large-scale volunteer events and charitable giving.
Five TELUS International Community Boards have provided $5.3
million in funding to grassroots charitable organizations since
2011. Learn more at: telusinternational.com.
_____________________________ 1 Adjusted EBITDA is a non-GAAP
financial measure, while Adjusted Diluted EPS is a non-GAAP ratio.
See the Non-GAAP section of this news release. 2 Revenue growth on
a constant currency basis and Adjusted EBITDA Margin are non-GAAP
ratios, while Adjusted Net Income and Free Cash Flow are non-GAAP
financial measures. See the Non-GAAP section of this news
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230804323901/en/
TELUS International Investor Relations Jason Mayr (604)
695-3455 ir@telusinternational.com TELUS International Media
Relations Ali Wilson (604) 328-7093
media.relations@telusinternational.com
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