French call center TP lowers revenue outlook on US challenges

(Reuters) - TP (TEPRF.PA) slashed its full-year revenue and profit guidance on Tuesday, as a "highly volatile business environment" in the United States hit its language services and recruitment outsourcing businesses.

The French call center operator, which was previously called Teleperformance, now expects 2025 revenue growth of between 1% and 2%, down from a prior forecast of between 2% and 4%. It also cut its operating margin target to between 14.7% and 15% from between 15% and 15.1%.

WHY IT'S IMPORTANT

The company, like other call center operators, faces competition from artificial intelligence that can replace human agents. Analysts and investors have questioned the group's ability to maintain growth during a period of AI disruption.

The firm's LanguageLine Solutions, which provides interpretation services to government agencies, has been hit by reduced demand and payment delays from the U.S. government shutdown.
KEY QUOTE(S)

When asked the U.S. government shutdown, deputy CEO Thomas Mackenbrock said: "One, we do provide government services in the US that are affected. Secondly, our specialized services business, in particular LanguageLine, provides services also to US government institutions. And, thirdly, if you look at the latest forecast from the Congressional Budget Office, you see they're also expecting an impact on consumer sentiment,".

"To make it simple, our clients are cautious and we need to be cautious as well," CFO Olivier Rigaudy said in a call with journalists.

CONTEXT

The company exited France's blue chips index CAC40 in September.

TP slashed its full-year revenue and profit guidance on Tuesday, as a "highly volatile business environment" in the United States hit its language services and recruitment outsourcing businesses.

The French call center operator, which was previously called Teleperformance, now expects 2025 revenue growth of between 1% and 2%, down from a prior forecast of between 2% and 4%. It also cut its operating margin target to between 14.7% and 15% from between 15% and 15.1%.

WHY IT'S IMPORTANT

The company, like other call center operators, faces competition from artificial intelligence that can replace human agents. Analysts and investors have questioned the group's ability to maintain growth during a period of AI disruption.

The firm's LanguageLine Solutions, which provides interpretation services to government agencies, has been hit by reduced demand and payment delays from the U.S. government shutdown.

KEY QUOTE(S)

When asked the U.S. government shutdown, Deputy CEO Thomas Mackenbrock said: "One, we do provide government services in the US that are affected. Secondly, our specialized services business, in particular LanguageLine, provides services also to US government institutions. And, thirdly, if you look at the latest forecast from the Congressional Budget Office, you see they're also expecting an impact on consumer sentiment".

"To make it simple, our clients are cautious and we need to be cautious as well," CFO Olivier Rigaudy said in a call with journalists.

CONTEXT

The company exited France's blue chips index CAC40 in September.