TTEC Holdings, Inc. (NASDAQ:TTEC) Q4 2022 Earnings Call Transcript

And there’s a huge focus on that because we realize that, that by us increasing our offshore percentages that, that really is what will help us on the Engage side drive a higher margin. Shelly, do you want to add anything to that?

Shelly Swanback: I would just – I would just add, Maggie, we’re seeing strong demand for our offshore services in the new locations, even in those resilient sectors that I talked about financial services and health care, which have traditionally been more onshore services for us. But as we open up and expand our locations and really capitalize on the great performance, particularly in health care that we had over the open enrollment season last fall, we’re seeing good demand in new interest from our clients in some of those new offshore locations. And of course, we’re, as Ken said, very focused on this and not just with our embedded base, but for new client prospects as well.

Maggie Nolan: Thank you, all.

Ken Tuchman: Thank you.

Operator: Thank you. Next question is from the line of Mike Latimore of Northland Capital Markets. Your line is now open.

Mike Latimore: Great. Good morning. Just a question on the Digital division. It looks like you’re expecting some solid improvement in that business throughout the year, both in terms of revenue growth and margins. I guess, can you just provide a little bit more detail on kind of what would drive that improvement?

Shelly Swanback: Yes. I mean I think one thing important to note is that the practices outside of Cisco, Dustin has been talking about Cisco for a while in terms of growing through that business there and getting that back to growth. The other practices are growing 10-plus percent. And I think we’re excited about the pipeline and the momentum that we have with our partners across those other platforms. Certainly, as Dave joined the team and the relationship he brings with both partners and clients, we’re expecting accelerated go-to-market execution throughout the year.

Mike Latimore: Got it. Okay. And then the hyper growth category with Engage, what percent of revenue is that €“ what percent of Engage revenue is that?

Dustin Semach: In fiscal year 2022, you’re looking at the business is roughly about $400 million.

Mike Latimore: All right. Great, thank you.

Ken Tuchman: Thank you.

Operator: Thank you. Next question is from the line of George Sutton of Craig-Hallum. Your line is now open.

George Sutton: Thank you. Ken, I’m wondering if you could address the AI opportunity as you see it and where you’re involved, specifically relative to AI? And any go-to-market details beyond that would be helpful.

Ken Tuchman: Good morning, George. I’ll – you’re asking a great question, and I’m going to – I’m trying to think of how to give a short answer, but what I’ll start out by saying is the following. On the Engage side, there is tremendous opportunity for us to be working with many of our partners on the training of AI. I think there’s a big misconception in the marketplace with all the hype around ChatGPT that it’s going to be – have a real positive impact on areas like customer service when, in fact, it actually is going to have very little impact because it’s a horizontal AI product, which means that it grabs its information from crawling the web reading edit – reading Wikipedia et cetera. And consequently, there’s a lot of misinformation within all those different vessels of information.

So the future of AI as it will be used in the customer experience space is really with what we call vertical AI. And that’s where we’re actually working with our clients as well as working with the AI providers, which would be in many cases – in most cases, the hyperscalers, narrowing that information so that it’s put in a vertical format and consequently, when questions are asked, whether it’d be for a chatbot, a voicebot, et cetera, that you’re getting every single time an accurate answer and not something that’s rather in the Bizarro category as many people have been playing with ChatGPT and experiencing. So we see opportunity and where we have opportunity, and we are currently executing on opportunity and everywhere from data annotation to AI training to also in all the actual implementation of the AI and then integrating that into the CCaaS platforms, the omnichannel platforms, et cetera.