TELUS Shares Gained On Strong Q1 Revenue Growth, Robust FY21 Guidance

TELUS International (Cda) Inc TIXT reported first-quarter FY21 revenue growth of 57% year-on-year to $505 million, beating the analyst consensus of $500.3 million.
Growth from existing and new clients, with continued strong momentum in Tech and Games in particular, and good growth in Communications & Media and eCommerce & Fintech drove the results.
Team member count rose 11% Y/Y to 51,387, reflecting organic growth in certain geographies and acquisitions in the prior year.
Adjusted EBITDA rose 90% Y/Y to $129 million. The margin expanded 440 basis points to 25.5% from revenue growth, contributions from acquisitions, digital and favorable client mix.
Adjusted net income rose 293% Y/Y to $59 million, with adjusted EPS of $0.23, beating the analyst consensus of $0.2.
The company held $117 million in cash and equivalents and generated $36 million in operating cash flow.
Guidance: TELUS sees FY21 outlook of $2.15 billion - $2.19 billion, Adjusted EBITDA of $523 million - $533 million, and adjusted EPS of $0.90 - 0.95.
TELUS enjoyed notable new client wins for digital solutions and content moderation services and growth across all key verticals, particularly in Tech & Games in Q1, CEO Jeff Puritt said. The diverse capabilities were further strengthened with the acquisition of Lionbridge AI, Puritt added.
TELUS International was able to repay $530 million of debt in Q1 using the cash proceeds from IPO of $493 million, combined with additional repayments from cash provided by operating activities, CFO Vanessa Kanu said.
Price action: TIXT shares closed higher by 2.85% at $31.44 on Friday.

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