Group 1 - The special meeting of TELUS Digital shareholders is being conducted in a virtual format via a live webcast to enhance accessibility for all shareholders and proxy holders globally [2] - The virtual format allows participation and voting from any location, making it efficient for shareholders to engage in the meeting [2] - Michel Belec, the Chief Legal Officer and Corporate Secretary, is serving as the Secretary of the meeting [3]

Financial Data and Key Metrics Changes - The special resolution approving the arrangement between TELUS Digital and TELUS Corporation has passed with approximately 98% of eligible votes represented at the meeting [2][11] - The arrangement resolution requires at least two-thirds of the votes cast by holders of subordinate and multiple voting shares, along with a simple majority of subordinate voting shares, to pass [7][8] Business Line Data and Key Metrics Changes - The meeting focused on the arrangement involving TELUS Digital and TELUS Corporation, indicating a strategic shift towards integration and consolidation within the company [6][12] Market Data and Key Metrics Changes - The meeting was conducted virtually, allowing global participation from shareholders, which reflects the company's commitment to accessibility and shareholder engagement [1][2] Company Strategy and Development Direction - TELUS International aims to enhance its role as a trusted provider of digital customer experience solutions and AI innovations as it transitions to a private arm of TELUS Corporation [12] - The management expressed confidence in future prospects and a focus on delivering exceptional value for customers, team members, and communities [12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of shareholder support throughout the company's journey and expressed gratitude for the trust placed in them [12] - The company is excited about the opportunities ahead and is focused on driving continued innovation and growth [12] Other Important Information - The meeting was properly constituted with the necessary quorum, and the voting procedures were clearly outlined for shareholders [2][4][5] Q&A Session Summary Question: Are there any questions or comments on the motion? - There were no questions or comments from the shareholders regarding the motion [10]

Financial Data and Key Metrics Changes - The special resolution approving the arrangement between TELUS Digital and TELUS Corporation has passed with approximately 98% of eligible votes represented at the meeting [4][16] - The arrangement resolution requires at least two-thirds of votes from subordinate and multiple voting shares, along with a simple majority from subordinate voting shares, excluding certain votes [11] Business Line Data and Key Metrics Changes - No specific financial data or key metrics for individual business lines were discussed in the meeting [14] Market Data and Key Metrics Changes - No specific market data or key metrics were provided during the meeting [14] Company Strategy and Development Direction - TELUS Digital is transitioning to become a private arm of TELUS Corporation, focusing on delivering exceptional value in digital customer experience solutions and AI innovations [17] - The company expresses confidence in future prospects and aims to drive continued innovation and growth as part of TELUS [18] Management's Comments on Operating Environment and Future Outlook - Management expressed gratitude to shareholders for their support and emphasized the commitment to building on a strong foundation for future growth [17] - The management team is optimistic about the opportunities ahead as part of TELUS [18] Other Important Information - The official results of the meeting will be available on TELUS Digital's Investor Relations website and other regulatory platforms [16] Q&A Session Summary Question: Are there any questions or comments on the motion? - There were no questions or comments raised during the meeting [14]

Financial Data and Key Metrics Changes - The special resolution approving the arrangement between TELUS Digital and TELUS Corporation has passed with approximately 98% of eligible votes represented at the meeting [2][12] - The arrangement resolution requires at least two-thirds of the votes cast by holders of subordinate and multiple voting shares, along with a simple majority from subordinate voting shares, excluding certain votes [8][9] Business Line Data and Key Metrics Changes - The meeting focused on the arrangement involving TELUS Digital, which will see TELUS Corporation acquire all outstanding shares of TELUS Digital that it does not already own [7][9] Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the meeting [11] Company Strategy and Development Direction - TELUS International aims to continue as a trusted provider of digital customer experience solutions and AI innovations as part of TELUS Corporation [13] - The management expressed confidence in future prospects and a commitment to delivering exceptional value for customers, team members, and communities [13] Management's Comments on Operating Environment and Future Outlook - Management expressed gratitude to shareholders for their support and emphasized the importance of trust throughout their journey as a public company [13] - The company is excited about the opportunities ahead and plans to build on its strong foundation to drive continued innovation and growth [13] Other Important Information - The official results of the meeting will be available on the company's investor relations website and other platforms following the meeting [12] Q&A Session Summary Question: Are there any questions or comments regarding the motion? - There were no questions or comments addressed during the meeting [11]

Core Insights - The TELUS Digital survey indicates that AI assistants are becoming competitive with traditional apps as consumers increasingly prefer faster and smarter digital experiences [1] Group 1 - The survey highlights a significant shift in consumer behavior towards AI-driven solutions, suggesting a growing demand for enhanced digital interactions [1] - AI assistants are being recognized for their ability to streamline tasks and provide immediate responses, which aligns with consumer expectations for efficiency [1] - The findings suggest that companies may need to adapt their digital strategies to incorporate AI technologies to meet evolving consumer preferences [1]

Group 1 - TELUS Digital has been named a Leader in the Everest Group's CXM PEAK Matrix® for the Americas [1] - The recognition is attributed to TELUS Digital's capabilities in customer experience (CX) transformation, Fuel iX™, agentic AI, and automation [1]

Company Performance - TELUS Digital reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, but down from $0.16 per share a year ago, representing an earnings surprise of +20.00% [1] - The company posted revenues of $699 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.93%, compared to $652 million in the same quarter last year [2] - Over the last four quarters, TELUS Digital has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Outlook - TELUS Digital shares have declined approximately 3.8% since the beginning of the year, while the S&P 500 has gained 7.8% [3] - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $675.26 million, and for the current fiscal year, it is $0.32 on revenues of $2.71 billion [7] - The estimate revisions trend for TELUS Digital was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Internet - Software industry, to which TELUS Digital belongs, is currently in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - TELUS Digital generated revenue of $699 million, an increase of 7% year over year or 6% on a constant currency basis [19] - Adjusted EBITDA margin was 13.4%, reflecting a year-over-year decrease due to increased salary and benefits, as well as goods and services purchased outpacing revenue growth [22][23] - Free cash flow for the quarter was $33 million, with a year-over-year decline attributed to operating expenses outpacing revenue growth [24][25] Business Line Data and Key Metrics Changes - Revenue from AI and data solutions continued to grow, with a focus on diversifying client base [20][21] - The customer experience service line faced cost pressures, particularly from top-line pricing and geographic labor cost differences [30] - Digital solutions saw strong client engagement, with approximately 10% of new bookings from new clients and 90% from existing clients [13][14] Market Data and Key Metrics Changes - Revenue growth was observed in the Americas and Europe, while the Asia Pacific segment experienced softer year-over-year results [22] - The technology and gaming sectors contributed significantly to revenue, with an 11% increase driven by growth with social media and technology clients [21] - E-commerce and fintech sectors saw a 14% year-over-year revenue decrease due to declining service volumes [22] Company Strategy and Development Direction - The company aims to enhance operational methods, AI capabilities, and overall efficiency programs to mitigate margin pressures [6][10] - Focus remains on business evolution, service quality excellence, and talent development to drive sustainable revenue growth [10][11] - The company is positioning itself as a trusted independent partner in the AI space, differentiating from competitors [9] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing margin pressures due to competitive pricing, labor inflation, and complex work requirements [5][6] - There is optimism about future prospects, particularly in AI and data solutions, with expectations for continued growth [12][19] - The company reiterated its outlook for approximately 2% revenue growth for the full year 2025 on a constant currency basis [25] Other Important Information - A goodwill impairment charge was recorded in Q2 due to updated financial modeling assumptions [18] - The leverage ratio was elevated at 3.75 times as of June 30, 2025, primarily due to lower adjusted EBITDA and a non-cash increase in derivative liabilities [24] Q&A Session Summary Question: Can you discuss the margin pressures and restructuring carried out in the quarter? - Management identified customer experience and content moderation as areas under pressure, with actions to improve workforce management and pricing discipline [30][32][34] Question: What is the update on AI solutions and market dynamics? - The AI consulting business is evolving strongly, moving from proofs of concept to full deployment, with significant growth expected in 2026 and 2027 [39][40] Question: Are there more IT services or technology vendors becoming competitive? - Competition remains intense, but differentiation is achieved through advanced capabilities beyond traditional customer experience work [49][50] Question: What verticals are seeing differences in AI adoption? - Significant differences exist in AI application based on industry, with gaming and content moderation leading, while financial services are slower due to regulatory concerns [55][56] Question: Can you elaborate on discretionary spending recovery? - Demand for cost optimization projects is increasing across various industries, with a rebound in classic digital business activities [62][63] Question: What is the situation with Google as a client? - Revenue from Google is expected to shift from basic work to more complex projects, aligning with the company's strategic goals [73][74]

Financial Data and Key Metrics Changes - TELUS Digital generated revenue of $699 million, an increase of 7% year over year or 6% on a constant currency basis [19] - Adjusted EBITDA margin was 13.4%, reflecting a year-over-year decrease due to increased salary and benefits, as well as goods and services purchased outpacing revenue growth [22][23] - Free cash flow for the quarter was $33 million, with a year-over-year decline primarily due to increases in operating expenses outpacing revenue growth [25][26] Business Line Data and Key Metrics Changes - Revenue from AI and data solutions continued to grow, with a focus on diversification across more clients [20] - Customer experience service line faced cost pressures due to client budgetary constraints and geographic labor cost differences [32] - Digital solutions area saw strong client engagement, with approximately 10% of new bookings coming from new clients and 90% from existing clients [13] Market Data and Key Metrics Changes - Revenue growth was observed in the Americas and Europe, while revenue in the Asia Pacific segment was softer year over year [22] - The healthcare and communication/media industry verticals grew significantly, with healthcare revenue increasing by 119% [21] - E-commerce and fintech revenue decreased by 14% year over year due to a decline in service volumes [22] Company Strategy and Development Direction - The company is focused on operational improvements, service quality excellence, and talent development to drive sustainable revenue growth and improved margins [10][11] - There is an emphasis on leveraging AI capabilities and advanced methods to enhance operational efficiency [10][11] - The company aims to position itself as a trusted independent partner in the AI space, differentiating itself in a competitive marketplace [8][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing margin pressures due to competitive pricing, labor inflation, and complex work requirements [4][5] - The outlook for revenue growth remains at approximately 2% on a constant currency and organic basis for the full year 2025 [26] - Management expressed confidence in the company's ability to navigate challenges and emphasized the importance of operational excellence [10][11] Other Important Information - The company recorded an impairment charge on goodwill in Q2 due to updated financial modeling assumptions [18] - The leverage ratio was elevated at 3.75 times as of June 30, 2025, primarily due to lower adjusted EBITDA and a non-cash increase in derivative liabilities [24][25] Q&A Session Summary Question: Can you discuss the margin pressures and the restructuring carried out in the quarter? - Management identified customer experience and content moderation as areas under pressure, with actions taken to improve workforce management and pricing discipline [32][34] - Restructuring included costs related to rebalancing with a customer in Europe and ongoing efficiency programs [36] Question: What is the update on AI solutions and market dynamics? - The AI consulting business is evolving strongly, with a shift from proofs of concept to full deployment expected in 2026 and 2027 [42] - The company is seen as a trusted advisor in large language model development, with promising projects underway [44] Question: Are there more IT services or technology vendors becoming competitive? - Management noted that while the number of competitors remains stable, the competitive pressure is increasing in terms of advancing capabilities beyond traditional customer experience work [52] Question: What verticals are seeing a return in discretionary spending? - The digital solutions space is experiencing increased demand for cost optimization projects, with a rebound in classic digital business activities [61][63] Question: Can you provide insights on key clients beyond the top three? - Growth is noted across various sectors, including healthcare and communications, with a diverse client base contributing to overall revenue growth [71][73] Question: What is the impact of the Scale AI acquisition by Meta? - The company has seen increased interest from clients seeking alternative partners following the acquisition, presenting new opportunities [49] Question: How is the company addressing margin pressures? - Management is focused on pricing accuracy, workforce management, and leveraging AI capabilities to improve efficiency and stabilize margins [88][90] Question: What types of investments are being made in Gen AI? - Investments are focused on managing workforce talent, project execution, and ensuring high-quality datasets to support model training [96][98]

Core Viewpoint - Telus International reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, but down from $0.16 per share a year ago, indicating a 20% earnings surprise [1][2] Financial Performance - The company achieved revenues of $699 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.93%, compared to $652 million in the same quarter last year [2] - Over the last four quarters, Telus International has exceeded consensus EPS estimates two times and topped revenue estimates four times [2] Stock Performance - Telus International shares have declined approximately 3.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.09 for the upcoming quarter and $0.32 for the current fiscal year, with revenues projected at $675.26 million and $2.71 billion respectively [7] - The Zacks Rank for Telus International is currently 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Context - The Internet - Software industry, to which Telus International belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable environment for stocks in this sector [8]