TTEC Holdings, Inc. Fair Value Disclosure
(9)FAIR VALUE
The authoritative guidance for fair value measurements establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 — | Quoted prices in active markets for identical assets or liabilities. |
Level 2 — | Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data. |
Level 3 — | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
The following presents information as of December 31, 2025 and 2024 of the Company’s assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.
Accounts Receivable and Payable - The amounts recorded in the accompanying balance sheets approximate fair value because of their short-term nature.
Investments – The Company measures investments, including cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The fair values of these investments are determined based on valuation techniques using the best information available and may include market observable inputs and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary.
Debt - The Company’s debt consists primarily of the Company’s Credit Agreement, which permits floating-rate borrowings based upon the current Prime Rate or SOFR plus a credit spread as determined by the Company’s leverage ratio calculation (as defined in the Credit Agreement). As of December 31, 2025 and 2024, the Company had $905.0 million and $975.0 million, respectively, of borrowings outstanding under the Credit Agreement. During 2025 and 2024, borrowings accrued interest at an average rate of 7.0% and 7.5% per annum, respectively, excluding unused commitment fees. The amounts recorded in the accompanying Balance Sheets approximate fair value due to the variable nature of the debt based on level 2 inputs.
Derivatives - Net derivative assets (liabilities) are measured at fair value on a recurring basis. The portfolio is valued using models based on market observable inputs, including both forward and spot foreign exchange rates, interest rates, implied volatility, and counterparty credit risk, including the ability of each party to execute its obligations under the contract. As of December 31, 2025, credit risk did not materially change the fair value of the Company’s derivative contracts.
The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of December 31, 2025 and 2024 (in thousands):
As of December 31, 2025
Fair Value Measurements Using |
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| Quoted Prices in | | Significant | | | |
| ||||||
Active Markets | Other | Significant |
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for Identical | Observable | Unobservable |
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Assets | Inputs | Inputs |
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(Level 1) | (Level 2) | (Level 3) | At Fair Value |
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Cash flow hedges | $ | — | $ | 341 | $ | — | $ | 341 | |||||
Fair value hedges |
| — |
| 54 |
| — |
| 54 | |||||
Total net derivative asset (liability) | $ | — | $ | 395 | $ | — | $ | 395 | |||||
As of December 31, 2024
Fair Value Measurements Using |
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| Quoted Prices in | | Significant | | | |
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Active Markets | Other | Significant |
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for Identical | Observable | Unobservable |
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Assets | Inputs | Inputs |
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(Level 1) | (Level 2) | (Level 3) | At Fair Value |
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Cash flow hedges | $ | — | $ | (3,367) | $ | — | $ | (3,367) | |||||
Fair value hedges |
| — |
| (177) |
| — |
| (177) | |||||
Total net derivative asset (liability) | $ | — | $ | (3,544) | $ | — | $ | (3,544) | |||||
The following is a summary of the Company’s fair value measurements as of December 31, 2025 and 2024 (in thousands):
As of December 31, 2025
Fair Value Measurements Using |
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| Quoted Prices in | | | Significant |
| |||||
Active Markets for | Significant Other | Unobservable |
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Identical Assets | Observable Inputs | Inputs |
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(Level 1) | (Level 2) | (Level 3) |
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Assets | ||||||||||
Derivative instruments, net | $ | — | $ | 395 | $ | — | ||||
Deferred compensation plan asset | 34,964 | — | — | |||||||
Total assets | $ | 34,964 | $ | 395 | $ | — | ||||
Liabilities | ||||||||||
Derivative instruments, net | $ | — | $ | — | $ | — | ||||
$ | — | $ | — | $ | — | |||||
As of December 31, 2024
Fair Value Measurements Using |
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| Quoted Prices in | | | Significant |
| |||||
Active Markets for | Significant Other | Unobservable |
| |||||||
Identical Assets | Observable Inputs | Inputs |
| |||||||
(Level 1) | (Level 2) | (Level 3) |
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Assets | ||||||||||
Derivative instruments, net | $ | — | $ | — | $ | — | ||||
33,269 | — | — | ||||||||
Total assets | $ | 33,269 | $ | — | $ | — | ||||
Liabilities | ||||||||||
Derivative instruments, net | $ | — | $ | (3,544) | $ | — | ||||
Total liabilities | $ | — | $ | (3,544) | $ | — | ||||
Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan for certain eligible employees. The deferred compensation asset represents the combined fair value of all the funds based on quoted values and market observable inputs.
Contingent Consideration — The Company recorded contingent consideration payable related to the acquisition of Faneuil that closed in 2022. The contingent payables for Faneuil were calculated using a Monte Carlo simulation including a discount rate of 19.3%. The measurements were based on significant inputs not observable in the market. The Company records interest expense each period using the effective interest method until the future value of these contingent payables reaches their expected future value.
During 2022 and 2023, fair value adjustments of a $2.9 million benefit and a $3.0 million expense, respectively, were recorded related to fair value adjustments of the estimated contingent payments associated with the Faneuil acquisition based on updated discount factors, the passage of time, updated EBITDA estimates and a modification to the agreement (see Note 2) for one contract and a complete reduction for the second contract as it was not awarded to the Company. During 2024, a fair value adjustment of a $1.5 million benefit was recorded related to fair value adjustments of the estimated contingent payments associated with the Faneuil acquisition based on updated discount factors, the passage of time, and updated EBITDA estimates. The fair value adjustment benefits(expenses) were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss). As of December 31, 2024, the contingent consideration payment was accrued at zero. The earn-out period was completed at the end of January 2025. Based on final results, no final earn-out payment was required.
Contingent Receivables – The Company recorded a contingent receivable related to the Faneuil acquisition that closed in 2022. During 2023, the Company recorded fair a value adjustment for the receivable based on current information which caused the receivable to decrease, $4.4 million expense, and included in Other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss). As of December 31, 2023, the contingent receivable was recorded at zero.
A rollforward of the activity in the Company’s fair value of the contingent consideration payable is as follows (in thousands):
| | | | |
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December 31, | December 31, |
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2023 | Acquisitions | Payments | Adjustments | 2024 |
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Faneuil | $ | (1,496) | $ | — | $ | — | $ | 1,496 | $ | — | ||||||
Total | $ | (1,496) | $ | — | $ | — | $ | 1,496 | $ | — | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 3, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 4, 2020 | |
| 2018 | Mar 6, 2019 | |
| 2017 | Mar 13, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 14, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.