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 nine-month periods ended
September 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.
“In the third quarter of 2023, TELUS International delivered
steady year-over-year revenue growth and meaningfully improved
profitability from the prior quarter. Our progress on global
restructuring programs to better reflect the persistent challenging
operating environment has enabled our company to drive meaningful
and sustainable cost efficiencies. In parallel, our AI Data
Solutions team expanded service volumes with multiple clients,
including Google, and further enabled TELUS Corporation’s customer
experience digitization strategy,” said Jeff Puritt, President and
CEO of TELUS International. “Despite macro conditions that continue
to lengthen our sales cycles, our global team remains relentless in
their efforts to establish relationships with new clients. During
the third quarter of 2023, we onboarded several new clients,
including two US-based firms — an online food ordering and delivery
platform and a property and casualty insurance provider, as well as
a luxury fashion retailer based in Europe. Just as important, our
account teams remained focused on anticipating and meeting the
evolving needs of our more than 650 existing clients around the
world, growing relationships with many of our large enterprise
accounts, including a leading Canadian bank, the world's largest
technology company by revenue, and a leading ride-sharing, food
delivery, and freight transport app.”
Jeff added, “TELUS International's competitive positioning in
the market is a key priority for our organization, and we were
recognized by several global research and advisory firms for our
strong capabilities and market offerings. Everest Group named TELUS
International a ‘Leader’ in the Americas for a fifth consecutive
year in its PEAK Matrix for Customer Experience Management and we
were included on the firm’s inaugural global PEAK Matrix assessment
due to our company’s delivery site expansion that now encompasses
five continents. Our company was also ranked a ‘Leader’ in
NelsonHall’s NEAT Assessment for Content Transformation Services,
specifically within subcategories for cost optimization and revenue
generation, and we maintained our strong positioning on
Constellation Research’s ShortList for CX Operations Services,
Global. In recognition of our team’s efforts to bring our caring
culture to life, Fast Company selected TELUS International as a
finalist in its 2023 Best Workplaces for Innovators international
category, and we were the recipient of three 2023 Gold Stevie
Awards for Great Employers, for our leadership development program,
our technical training program and our use of digital co-workers,
and our efficient skills training solution.”
Vanessa Kanu, CFO said, “TELUS International’s ongoing cost
efficiency efforts and our actions to resolve the supply-demand
imbalance across our operations, most notably in Europe, are
evident in the sequential margin improvement delivered in the third
quarter of 2023. We also generated strong cash flow in the third
quarter, driving further reduction in our debt outstanding,
resulting in an improvement in our Net Debt to Adjusted EBITDA
Leverage Ratio as per our credit agreement, which stood at 2.9x as
of September 30, 2023 and remains within our steady-state range. We
are reaffirming our outlook for the full-year 2023, as we believe
it continues to reasonably reflect the uncertainty we still see in
the broader environment and tight demand dynamics from certain
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.
Q3 2023 vs. Q3 2022 summary
- Revenue of $663 million, up $48 million, an increase of 8%
year-over-year on a reported basis and 6% on a constant currency
basis1, of which $42 million was from WillowTree, and excluding
WillowTree, our revenue was $621 million, an increase of $6
million, or 1%, which included a favorable foreign currency impact
of approximately 2%, compared with the same quarter of the prior
year, associated with the weakening U.S. dollar exchange rate
against the euro. Total revenue was negatively impacted by 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, which
were partially offset by increasing revenues from growth in
services provided to existing clients, including TELUS Corporation
and Google, as well as new clients added since the same period in
the prior year.
- Net income of $9 million and diluted EPS of $0.03, compared
with net income of $59 million and diluted EPS of $0.22 in the same
quarter of the prior year. Net income margin, calculated by
dividing net income by revenue for the period, was 1.4%, compared
with 9.6% for the same quarter in the prior year. Net 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 Income1, which
excludes the impact of these items, was $58 million in the third
quarter of 2023, compared with $87 million in the same quarter of
the prior year, due to the increase in operating expenses and
interest expense outpacing revenue growth, which were partially
offset by lower income taxes.
- Adjusted EBITDA1 was $144 million, a decrease of 9% from $158
million in the same quarter of the prior year, due primarily to the
increase in salaries and benefits outpacing revenue growth,
resulting from lower utilization of team members in certain
regions. Profitability was impacted by cost imbalances arising from
reductions in service demand, principally in Europe, from some of
our larger technology clients, which were partially offset by cost
efficiency efforts realized during the quarter. Adjusted EBITDA
Margin1 was 21.7%, compared with 25.7% in the same quarter of the
prior year, due to the aforementioned factors, as well as changes
in our revenue mix across industry verticals and geographic
regions. Adjusted Diluted EPS1 was $0.21, compared with $0.32 in
the same quarter of the prior year.
- Cash provided by operating activities was $185 million and Free
Cash Flow1 was $159 million, with a year-over-year growth of 43%
and 54%, respectively, primarily due to higher net inflows from
working capital, which included higher cash receipts in the current
quarter, lower share-based compensation payments, and lower income
taxes paid, which were partially offset by lower operating
profits.
- Net Debt to Adjusted EBITDA Leverage Ratio as per our credit
agreement of 2.9x as of September 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 73,045 as of September 30, 2023, an
increase of 5% year-over-year. The quarter-over-quarter decrease of
5% reflects team member reductions taken thus far as part of cost
savings efforts in 2023 to right-size operations, particularly in
Europe, with staffing also carefully managed in line with near-term
client demand volumes.
YTD Q3 2023 vs. YTD Q3 2022 summary
- Revenue of $2,016 million, up $178 million, an increase of 10%
year-over-year on both a reported and a constant currency basis, of
which $145 million was from WillowTree, and excluding WillowTree,
our revenue was $1,871 million, an increase of $33 million, or 2%.
The total revenue increase was driven by growth in services
provided to existing clients, including TELUS Corporation and
Google, as well as new clients added since the same period in the
prior year, partially offset by lower revenues in one of our
largest clients, a leading social media company, as well as a
global financial institution client.
- Net income of $16 million and diluted EPS of $0.06, compared
with $149 million and $0.55 respectively, in the same period of the
prior year. Net income margin was 0.8%, compared with 8.1% for the
same period in the prior year. Adjusted Net Income, as defined
above, was $180 million, compared with $237 million in the same
period of the prior year, due to the increase in operating expenses
and interest expense outpacing revenue growth as described
above.
- Adjusted EBITDA was $419 million, 7% lower compared with $450
million in the same period of the prior year, due primarily to the
increase in salaries and benefits outpacing revenue growth,
resulting from lower utilization of team members in certain
regions, which was partially offset by cost efficiency efforts
initiated in the second quarter of 2023 and realized year to date.
Adjusted EBITDA Margin was 20.8%, compared with 24.5% in the same
period of the prior year, due to the aforementioned factors, as
well as changes in our revenue mix across industry verticals and
geographic regions. Adjusted Diluted EPS was $0.65, compared with
$0.88 in the same period of the prior year.
- Cash provided by operating activities was $356 million and Free
Cash Flow was $290 million, with a year-over-year growth of 1% and
6%, respectively, primarily due to higher net inflows from working
capital, which included higher cash receipts in the third quarter
of 2023, and lower share-based compensation payments. These
increases were partially offset by lower operating profits and cash
expenditures for transaction costs associated with the WillowTree
acquisition.
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, 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
For the full-year 2023, management continues to expect:
- Revenue in the range of $2,700 to $2,730 million, including
$190 to $200 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
1.08 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.
Q3 2023 investor call
TELUS International will host a conference call today, November
3, 2023 at 9:30 a.m. (ET) / 6:30 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 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 standardized
meanings under International Financial Reporting Standards as
prescribed 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, 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
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.
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, other geopolitical conditions 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 nine-month periods ended September 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
(unaudited)
Three months
Nine months
Periods ended September 30 (millions
except earnings per share)
2023
2022
2023
2022
REVENUE
$
663
$
615
$
2,016
$
1,838
OPERATING EXPENSES
Salaries and benefits
403
346
1,258
1,044
Goods and services purchased
116
111
339
344
Share-based compensation
5
6
21
20
Acquisition, integration and other
11
7
48
17
Depreciation
36
29
102
88
Amortization of intangible assets
44
32
138
102
615
531
1,906
1,615
OPERATING INCOME
48
84
110
223
OTHER EXPENSES (INCOME)
Interest expense
38
10
107
29
Foreign exchange gain
(2
)
(11
)
(4
)
(25
)
INCOME BEFORE INCOME TAXES
12
85
7
219
Income tax expense (recovery)
3
26
(9
)
70
NET INCOME
$
9
$
59
$
16
$
149
EARNINGS PER SHARE
Basic
$
0.03
$
0.22
$
0.06
$
0.56
Diluted
$
0.03
$
0.22
$
0.06
$
0.55
TOTAL WEIGHTED AVERAGE SHARES
OUTSTANDING (millions)
Basic
274
266
273
266
Diluted
276
269
277
269
TELUS International (Cda)
Inc.
Condensed Interim Consolidated
Statements of Financial Position
(unaudited)
As at (millions)
September 30, 2023
December 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$
132
$
125
Accounts receivable
494
428
Due from affiliated companies
36
81
Income and other taxes receivable
8
7
Prepaid and other assets
53
35
Current portion of derivative assets
20
19
743
695
Non-current assets
Property, plant and equipment, net
494
449
Intangible assets, net
1,571
1,008
Goodwill
1,951
1,350
Derivative assets
21
13
Deferred income taxes
25
14
Other long-term assets
23
27
4,085
2,861
Total assets
$
4,828
$
3,556
LIABILITIES AND OWNERS’ EQUITY
Current liabilities
Accounts payable and accrued
liabilities
$
301
$
289
Due to affiliated companies
150
111
Income and other taxes payable
73
67
Current portion of provisions
5
1
Current maturities of long-term debt
122
83
Current portion of derivative
liabilities
1
1
652
552
Non-current liabilities
Provisions
207
2
Long-term debt
1,670
881
Deferred income taxes
291
264
Other long-term liabilities
20
19
2,188
1,166
Total liabilities
2,840
1,718
Owners’ equity
1,988
1,838
Total liabilities and owners’
equity
$
4,828
$
3,556
TELUS International (Cda)
Inc.
Condensed Interim Consolidated
Statements of Cash Flows
(unaudited)
Three months
Nine months
Periods ended September 30 (millions)
2023
2022
2023
2022
OPERATING ACTIVITIES
Net income
$
9
$
59
$
16
$
149
Adjustments:
Depreciation and amortization
80
61
240
190
Interest expense
38
10
107
29
Income tax expense (recovery)
3
26
(9
)
70
Share-based compensation
5
6
21
20
Change in market value of derivatives and
other
(3
)
(26
)
(5
)
(23
)
Net change in non-cash operating working
capital
66
17
37
(19
)
Share-based compensation payments
(2
)
(8
)
(2
)
(14
)
Income taxes paid, net
(11
)
(16
)
(49
)
(49
)
Cash provided by operating activities
185
129
356
353
INVESTING ACTIVITIES
Cash payments for capital assets
(20
)
(26
)
(58
)
(76
)
Cash payments for other assets
—
7
—
(13
)
Cash payments for acquisitions, net
(1
)
—
(852
)
—
Cash used in investing activities
(21
)
(19
)
(910
)
(89
)
FINANCING ACTIVITIES
Shares issued
1
—
3
2
Withholding taxes paid related to net
share settlement of equity awards
(1
)
—
(3
)
(1
)
Long-term debt issued
40
—
1,076
—
Repayment of long-term debt
(187
)
(78
)
(435
)
(207
)
Interest paid on credit facilities
(27
)
(5
)
(80
)
(16
)
Cash (used in) provided by financing
activities
(174
)
(83
)
561
(222
)
Effect of exchange rate changes on cash
and cash equivalents
(1
)
(7
)
—
(14
)
CASH POSITION
(Decrease) increase in cash and cash
equivalents
(11
)
20
7
28
Cash and cash equivalents, beginning of
period
143
123
125
115
Cash and cash equivalents, end of
period
$
132
$
143
$
132
$
143
Non-GAAP reconciliations
(unaudited)
Three Months Ended
September 30
Nine Months Ended
September 30
(millions, except percentages)
2023
2022
2023
2022
Revenue, as reported
$
663
$
615
$
2,016
$
1,838
Foreign exchange impact on current period
revenue using prior comparative period's rates
(10
)
31
(3
)
69
Revenue on a constant currency
basis
$
653
$
646
$
2,013
$
1,907
Revenue growth
8
%
11
%
10
%
15
%
Revenue growth on a constant currency
basis
6
%
16
%
10
%
20
%
Three Months Ended
September 30
Nine Months Ended
September 30
(millions, except per share amounts)
2023
2022
2023
2022
Net income
$
9
$
59
$
16
$
149
Add back (deduct):
Acquisition, integration and other
11
7
48
17
Share-based compensation
5
6
21
20
Interest accretion on written put
options
3
—
9
—
Foreign exchange gain
(2
)
(11
)
(4
)
(25
)
Amortization of purchased intangible
assets
42
29
131
91
Tax effect of the adjustments above
(10
)
(3
)
(41
)
(15
)
Adjusted Net Income
$
58
$
87
$
180
$
237
Adjusted Basic Earnings Per
Share
$
0.21
$
0.33
$
0.66
$
0.89
Adjusted Diluted Earnings Per
Share
$
0.21
$
0.32
$
0.65
$
0.88
Three Months Ended
September 30
Nine Months Ended
September 30
(millions, except percentages)
2023
2022
2023
2022
Net income
9
59
$
16
$
149
Add back (deduct):
Acquisition, integration and other
11
7
48
17
Share-based compensation
5
6
21
20
Foreign exchange gain
(2
)
(11
)
(4
)
(25
)
Depreciation and amortization
80
61
240
190
Interest expense
38
10
107
29
Income taxes
3
26
(9
)
70
Adjusted EBITDA
$
144
$
158
$
419
$
450
Net income margin
1.4
%
9.6
%
0.8
%
8.1
%
Adjusted EBITDA Margin
21.7
%
25.7
%
20.8
%
24.5
%
Three Months Ended
September 30
Nine Months Ended
September 30
(millions)
2023
2022
2023
2022
Cash provided by operating activities
185
129
$
356
$
353
Less: capital expenditures
(26
)
(26
)
(66
)
(80
)
Free Cash Flow
$
159
$
103
$
290
$
273
Calculation of Net Debt to Adjusted
EBITDA Leverage Ratio as per credit agreement
(unaudited)
As at (millions, except for ratio)
September 30,
2023
December 31, 2022
Outstanding credit facility
$
1,535
$
742
Contingent facility utilization
7
7
Liability related to provisions for
written put options1
74
—
Net derivative liabilities
—
1
Cash balance2
(132
)
(125
)
Net Debt as per credit
agreement
$
1,484
$
625
Adjusted EBITDA (trailing 12
months)
$
576
$
607
Adjustments required as per credit
agreement
$
(66
)
$
(63
)
Net Debt to Adjusted EBITDA Leverage
Ratio as per credit agreement
2.9
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 $5.4
million in funding to grassroots charitable organizations since
2011. Learn more at: telusinternational.com.
__________________________ 1 Revenue growth on a constant
currency basis, Adjusted EBITDA Margin and Adjusted Diluted EPS 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231103006285/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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