TELUS Digital reports third quarter 2024 results, with performance on target to achieving its full-year outlook

Vancouver, Canada – 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 iXTM, 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 iXTM, 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 iXTM 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 EXTM 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 iXTM 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.”

Complete version of the Earnings Release is available at the link below.