TeleTech Reports Increase in Revenues and Earnings in First Quarter 2006

TeleTech Holdings, Inc., a leading global business process outsourcing (BPO) provider, today announced first quarter 2006 financial results. The Company also filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission for the quarter ended March 31, 2006.

TeleTech reported record first quarter revenue of $283.4 million, an increase of 11.4 percent year over year. Revenue in TeleTech's North American and International Customer Management segments, which combined represents 94 percent of consolidated revenue, grew 14.2 percent year over year.

Income from operations more than doubled year over year increasing to $9.1 million or 3.2 percent of total revenue.

Fully diluted EPS doubled year over year to 8 cents per share. This includes $1.4 million of stock option expense, or approximately one cent per share. It also includes $0.9 million of asset impairment and restructuring charges, or approximately one cent per share, primarily related to costs associated with certain international facilities.

EXECUTIVE COMMENTARY

"This is the second consecutive quarter of double-digit revenue growth driven by continued new, renewed and expanded business wins. The increased pace of new business wins stems from our continuing investment in sales and marketing, a heightened interest in BPO outsourcing across all our targeted industry verticals and a shortened sales cycle. In addition, both new and existing clients are increasingly selecting TeleTech because of our growing suite of diversified offerings and our ability to handle both their front and back office outsourcing needs," said Ken Tuchman, Chairman and Chief Executive Officer. "Our solid revenue growth has led to an unprecedented need for new capacity deployment in near and off-shore locations. We believe our capacity in these locations will grow to nearly 80 percent of our total capacity by year-end."

First Quarter 2006 Business Highlights

Increased Pace of New, Renewed and Expanded Client Business

• During the first four months of 2006, TeleTech signed an estimated $80 million of incremental annual revenue from new and existing clients. When combined with the underlying value of the associated existing client business, it results in an estimated total contract value of approximately $2 billion over a multi-year period.
• As a result of high client satisfaction levels, nearly all significant client agreements requiring renewal in 2006 have been completed.

  Strong Pipeline of New Global Business Opportunities with Shortening Sales Cycle

• TeleTech's pipeline of new global business opportunities is strong and its revenue base continues to diversify across several targeted industry verticals. For instance, revenue in TeleTech's healthcare vertical is currently six percent of revenue, up from less than two percent a year ago. Current and prospective clients are increasingly realizing that outsourcing front and back office processes are integral to achieving their broader business objectives.

  Strong Balance Sheet Funding Organic Growth and Share Repurchase Program

• As of quarter end, TeleTech had cash and cash equivalents of $34.5 million and total debt to equity of 13.6 percent.
• As a result of increased global demand, capital expenditures were $14.6 million, up from $4.8 million a year ago. Accordingly, free cash flow was $2.1 million in the first quarter 2006 compared to $10.3 million in the prior year quarter.
• TeleTech repurchased $8.1 million of common stock through March 31, 2006, leaving approximately $58 million remaining under the repurchase program as of quarter-end.

  Business Outlook

• As previously disclosed, TeleTech expects full year 2006 organic revenue to grow between 8 to 10 percent over 2005 and believes its fourth quarter 2006 operating margin will approximate 6 to 7 percent.

The Company's filings with the Securities and Exchange Commission are available in the "Investors" section of TeleTech's website, which can be found at www.teletech.com.

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