TELUS International (Cda) Stock

TELUS International (Cda) Inc. 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.

The company’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, the company partners with brands across high growth industry verticals, including tech and games, communications and media, eCommerce and fintech, banking, financial services and insurance, healthcare, and travel and hospitality.

As of December 31, 2022, the company had more than 73,000 team members in 28 countries around the world.

In the Asia-Pacific, the company has 14 delivery locations. The company’s talent acquisition in the Asia-Pacific benefits from a local emphasis on education, creating a highly qualified workforce with extensive language capabilities. In India and the Philippines, for example, the company is able to attract skilled team members with expertise in next-generation technology with substantial language capabilities.

Through the company’s caring culture, the company is able to engage and develop these team members which leads to higher tenure and proficiency.

In Central America, the company has eight delivery locations in close proximity to its large North American client base. The company’s team members in Central America are drawn from a large population of fluent English and Spanish speakers. In the company’s delivery locations in Central America, the company benefits from developed telecom and energy infrastructure. In El Salvador, the company gains access to a young and educated population.

In Europe, the company has 31 delivery locations, with a number of these locations being in close proximity to client locations. The company’s multilingual team members are selected from a skilled talent pool in a centrally located geographic location. For example, in Bulgaria, the company is able to employ an educated and skilled team; in Romania, there is a large talent pool with technology skills; and in Ireland, talent converges from many global origination points, creating a diversified talent pool. The company also has extensive coverage in Germany, where the company can focus on meeting the high demand for German-language support but also benefit from the availability of many skilled workers, who are drawn to Germany as one of the largest global and European Union economies. In Turkey, as a transcontinental country that sits between Europe and Asia, the company benefits from multilingual resources who speak Turkish, Kurdish and Arabic.

In North America, the company has three delivery locations and recruit from a skilled talent pool with geographic proximity to many of the company’s largest clients. Additionally, North America is where the majority of the company’s sales, marketing, operational support and services team members work from a virtual office environment, which facilitates collaboration, and in some cases collocation, with the company’s clients.

Customers

The company has more than 650 clients. The company seeks to work with disruptive companies and leaders in their respective sectors. The company has built long-tenured relationships with these companies within the company’s core targeted industry verticals, including tech and games, communications and media, eCommerce and fintech, banking, financial services and insurance, healthcare and travel and hospitality. Within some of these industry verticals, the company serves clients across several sub-sectors. For example, within tech and games, the company serves some of the leading social networks and search engines, as well as high-growth online games, ride sharing and real estate technology companies. Additionally, the company partners with leading providers of digital assistants, search engines and advertising networks in the delivery of the company’s TELUS International AI solutions. Within eCommerce and fintech the company serves both traditional and next-generation payments and point of sale providers, business-to-business and business-to-consumer software-as-a-service companies, online marketplaces and large financial services institutions.

The company’s relationship with TELUS Corporation (TELUS), the company’s largest client and controlling shareholder, has been instrumental to the company’s success to date. TELUS provides the company with access to revenue visibility, stability and growth, as well as strategic partnership with respect to co-innovation within the communications vertical, customer service excellence focus and an internationally recognized social purpose impact.

WillowTree

On January 3, 2023, the company completed the acquisition of WillowTree. Now rebranded as WillowTree, a TELUS International Company. The company is headquartered in Charlottesville, Virginia and operates 13 global studios across the United States, Canada, Brazil, Portugal, Spain, Poland and Romania.

Services: WillowTree is a premier, full-service digital product provider focused on end user experiences, such as native mobile applications and unified web interfaces. The company has shipped over 700 native mobile applications, websites and other digital products for its clients. As a full-service digital product provider, WillowTree adds key front-end design and build competencies to TELUS International’s suite of end-to-end capabilities across the full customer experience value chain.

Clients: WillowTree will help the company further bolster its client diversification efforts by adding new marquee customers, and help amplify the company’s cross-selling competencies and opportunities on a global basis. WillowTree’s clients include Fortune 500 companies across key verticals including telecommunications and media, healthcare and life sciences, financial services, consumer goods, travel and hospitality, and technology and software.

Growth Strategy

The company’s growth strategies are to expand its services with existing clients; establish relationships with new clients; leverage technology and process to drive continuous improvement; and enhance core capabilities with strategic acquisitions.

Market Opportunity

The company’s solutions and services are relevant across multiple markets, including IT services for Digital Transformation (DX) and Digital Customer Experience Management (DCXM):

DX - Companies are increasingly partnering with third-party providers to meet their digital transformation challenges, which include designing solutions that facilitate an omnichannel experience, building scalable infrastructure and delivering new digital channels. To keep systems scalable, an increasing number of companies are opting for cloud-based solutions and seeking to automate processes where possible.

DCXM - DCXM represents the next evolution of customer experience management. Digital customer experience has become increasingly important to companies, as highly engaged users dictate the nature and frequency of interactions. Customers ascribe value to seamless interactions and are willing to reward positive experiences with loyalty and repeat business. As customers have shifted toward digital channels, leveraging next-generation technologies to deliver a unified and satisfying customer experience has become paramount.

The company is well-positioned to serve these markets and, as a result, the company has a significant market opportunity due to the overall industry growth rate, low penetration to date and strong exposure to the comparatively higher-growth DCXM sector of the market.

New Economy Services - To complement the company’s DCXM capabilities, the company provides several adjacent new economy services, such as content moderation and data annotation, which are two markets that have experienced high growth in recent years. Content moderation includes review and compliance services of user-generated content on social media and other platforms. The necessity of moderating content on digital platforms has prompted enterprises to seek specialized services to accommodate changes in the uncertain, highly regulated environment. To support the company’s clients’ development of AI-powered solutions, the company offers fully-managed data annotation services that include AI strategy consulting, and the collection, annotation and validation of training data to support a broad range of use cases, ranging from computer vision and data categorization to search relevance for advanced AI applications, such as facial recognition, autonomous vehicles, medical imaging and more. The company anticipates continued growth in these services in the future. AI data solutions is another market the company serves that the company has seen experience high demand. Along with seeing the volume of content continuing to increase, equally important is the need for constant dynamic changes and need for improvement.

Dependencies

Three clients (TELUS, a leading social media company, and Google) account for a significant portion of the company’s revenue.

The company’s largest client, based on its revenues earned from them, is TELUS, the company’s controlling shareholder. The company provides services to TELUS under the master services agreement (TELUS MSA), which expires in January 2031.

Competition

The company faces competition primarily from in-house technology and customer experience management teams; digital transformation services providers, such as Endava PLC, EPAM Systems, Inc. and Globant S.A.; globally diversified IT and business processing outsourcing service providers, such as Accenture plc, Cognizant Technology Solutions Ltd., Genpact LLC and WNS Limited; customer experience providers, such as TaskUs, Inc., Teleperformance S.A. and TTEC Holdings, Inc.; and single-threaded data annotation providers, such as Appen Limited.

Regulatory Context

The company is typically required to process, and sometimes collect and/or store sensitive data of the company’s clients and their customers, including, but not limited to, personal data regulated by the GDPR in the European Union, The Personal Information Protection and Electronic Documents Act and equivalent provincial statutes in Canada, the California Consumer Privacy Act and the California Invasion of Privacy Act in California, the Personal Data Protection Bill of 2018 in India, the Data Privacy Act of 2012 in the Philippines, and similar laws and regulations in each of the countries in which the company operates and where the company provides services.

In many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by regulations applicable to the company or its clients, including Canada’s Corruption of Foreign Public Officials Act and the United States Foreign Corrupt Practices Act.

History

TELUS International (Cda) Inc. was founded in 2005. The company was incorporated under the Business Corporations Act (British Columbia) in 2016.