TELUS International reports fourth quarter and full-year 2022 results, delivering double-digit revenue growth, strong profitability and cash flow for the year; sets 2023 outlook for continued robust double-digit profitable growth
Q4 revenue of $630 million, up 5% year-over-year and 9% on a constant currency basis; full-year revenue of $2,468 million, up 12% year-over-year and 16% on a constant currency basis
Q4 net income of $34 million and full-year net income of $183 million, compared with $36 million and $78 million in the prior year, respectively
Q4 diluted EPS of $0.13 and full-year diluted EPS of $0.68, compared with $0.13 and $0.29 in the prior year, respectively
Q4 Adjusted EBITDA of $157 million, 10% higher year-over-year; full-year Adjusted EBITDA of $607 million, 12% higher than prior year
Q4 Adjusted Diluted EPS of $0.35, 25% higher year-over-year; full-year Adjusted Diluted EPS of $1.23, 23% higher than prior year
Continued healthy cash flow and improved leverage position in Q4; post-WillowTree acquisition, leverage remains within target steady-state range
2023 outlook plans for continued double-digit profitable growth
Vancouver, Canada – TELUS International (NYSE and TSX: TIXT), a leading digital customer experience innovator that designs, builds, and delivers next-generation solutions, including AI and content moderation, for global and disruptive brands, today released its results for the fourth quarter and full-year ended December 31, 2022. 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 2022, our highly-engaged and talented TELUS International team members delivered on our collective commitment to grow the business profitably and give back to the communities where we operate, even amidst challenging macroeconomic conditions,” said Jeff Puritt, President and CEO of TELUS International. “Indeed, recessionary headwinds continued through the fourth quarter, impacting the timing and velocity of new projects, and we expect this dynamic to persist at least in the near term. Despite this, TELUS International has remained resilient, backed by our reputation as a trusted partner and strategic advisor for over 650 global clients, which enables us to capture opportunities of near-term vendor consolidation and strongly positions us to benefit from longer-term digital transformation tailwinds.”
Jeff continued, “In the fourth quarter, the majority of our new clients were primarily headquartered in the United States and included: a consulting company that supports complex government, defense, and intelligence projects; one of the fastest growing e-commerce companies that specializes in travel and entertainment; and an innovative artificial intelligence-powered developer and service provider in the sales and marketing space. In Europe, our team won new business with a leading digital investment platform that makes investing easy and affordable. We were also successful in our focused efforts to expand engagements across our existing client base, most notably increasing our share of wallet with a diversified list of clients that included: an American online food ordering and delivery platform; a global professional services firm focused on human resources and project management; a leading video social media platform; a dealer of heavy equipment and power generation in the US; and one of the largest American multinational telecommunications conglomerates.”
Jeff added, “In January, we officially welcomed the team at WillowTree, now a TELUS International Company, and immediately began working together to identify and execute on exciting cross-selling opportunities between our respective clients. This includes the significant expansion of services we plan to provide for our parent company TELUS Corporation, as they further enhance and transform the customer experiences they provide across their broad portfolio of businesses, including health, agriculture and consumer goods. These opportunities at hand and others in the pipeline help to set the stage for our ongoing success in the quarters ahead. TELUS International has carved out a unique position in the industry, and in 2022 was recognized as one of the Forbes Best Employers for Diversity and listed on Mogul’s Top 100 Workplaces for Diverse Representation, and for the second consecutive year, our proprietary Agent Assist bot was named the Best Informational Bot Solution in the AI Breakthrough Awards. These achievements are made possible by our team members, and for the ninth consecutive year, TELUS International scored in the top quartile for employee engagement in our annual global survey conducted by third-party provider, Kincentric. Our ability to consistently maintain this leadership position is in turn a testament to our caring culture that comes to life in small everyday moments throughout the business in addition to our large-scale TELUS Days of Giving volunteer events and five community boards located across the globe. These initiatives are part of our broader ongoing efforts to further develop and enhance our environmental, social and governance commitments to create incremental benefits and value for all stakeholders that you can read more about in our first stand-alone sustainability report to be issued in April.”
Vanessa Kanu, CFO said, “While macroeconomic pressures outside of our direct control impacted the latter part of 2022, TELUS International demonstrated remarkable resiliency in profitability. For the full year, revenues grew 12%, or 16% on a constant currency basis, while delivering Adjusted EBITDA margins at the high end of our latest outlook range, along with Adjusted Diluted EPS growth of 23%. Our ability to generate strong cash flow and reduce debt was also on display in 2022, with our Net Debt to Adjusted EBITDA Leverage Ratio as per our credit agreement beginning the year at 2.1x and ending the year at 1.1x. As expected, upon the close of the WillowTree acquisition on January 3rd, this ratio was 2.9x and remains within our target steady-state range of 2-3x. We believe the growth and cash flow characteristics shared by both companies will support further deleveraging over the near term.”
Vanessa concluded, “Looking ahead, our 2023 outlook recognizes that while macroeconomic challenges are still present, TELUS International expects to continue to deliver double-digit revenue growth and strong profitability. The opportunities to grow with our existing clients are exciting, as many are actively seeking new ways to leverage best in class technology solutions, while reducing their own costs, or as we like to say, “to do better with less!” There are also significant cross-sell opportunities that we intend to capture in connection with the WillowTree acquisition, including spend displacement opportunities within our parent company, TELUS Corporation.”
Complete version of the Earnings Release is available at the link below.