{"url_path":"/sec/ttec/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RIS****K**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-26","source_url":"https://www.sec.gov/Archives/edgar/data/1013880/0001104659-26-020532-index.html","accession_number":"0001104659-26-020532","cik":"0001013880","ticker":"TTEC","issuer_name":"TTEC Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1013880/0001104659-26-020532-index.html","primary_entity_key":"0001013880","primary_entity_name":"TTEC Holdings, Inc."},"word_count":1648,"has_tables":true,"body_markdown":"**ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RIS****K**\n\nMarket risk represents the risk of loss that may impact our consolidated financial position, consolidated results of operations, or consolidated cash flows due to adverse changes in financial and commodity market prices and rates. Market risk also includes credit and non-performance risk by counterparties to our various financial instruments. We are exposed to market risks due to changes in interest rates and foreign currency exchange rates (as measured against the U.S. dollar), as well as credit risk associated with potential non-performance of our counterparty banks. These exposures are directly related to our normal operating and funding activities. We enter into derivative instruments to manage and reduce the impact of currency exchange rate changes, primarily between the U.S. dollar/Philippine peso, the U.S. dollar/Mexican peso, and the Australian dollar/Philippine peso. To mitigate against credit and non-performance risk, it is our policy to only enter into derivative contracts and other financial instruments with investment grade counterparty financial institutions and, correspondingly, our derivative valuations reflect the creditworthiness of our counterparties. As of the date of this report, we have not experienced, nor do we anticipate, any issue related to derivative counterparty defaults.\n\n**Interest Rate Risk**\n\nThe interest rate on our Credit Agreement is variable based upon the Prime Rate and SOFR (in each case as defined in the Credit Agreement) and, therefore, is affected by changes in market interest rates. As of December 31, 2025, we had $905.0 million of outstanding borrowings under the Credit Agreement. Based upon average daily outstanding borrowings during the years ended December 31, 2025 and 2024, interest accrued at a rate of approximately 7.0% and 7.5% per annum, respectively. If the Prime Rate or SOFR increased by 100 basis points, there would be $1.0 million of additional interest expense per $100.0 million of outstanding borrowing under the Credit Agreement.\n\n44\n\n[Table of Contents](#Toc)\n\n**Foreign Currency Risk**\n\nOur subsidiaries in the Philippines, Mexico, India, Bulgaria, Colombia, South Africa, Egypt, Honduras, and Poland use the local currency as their functional currency for paying labor and other operating costs. Conversely, revenue for these foreign subsidiaries is derived principally from client contracts that are invoiced and collected in U.S. dollars or other foreign currencies. As a result, we may experience foreign currency gains or losses, which may positively or negatively affect our results of operations attributed to these subsidiaries. For the years ended December 31, 2025, 2024 and 2023, revenue associated with this foreign exchange risk was 23%, 20% and 19% of our consolidated revenue, respectively.\n\nThe following summarizes relative (weakening) strengthening of local currencies that are relevant to our business:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31,**\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n** **\n\nAustralian Dollar vs U.S. Dollar\n\n \n\n7.2\n\n%\n\n(9.9)\n\n%\n\n—\n\n%\n\nBrazilian Real vs U.S. Dollar\n\n​\n\n11.3\n\n%\n\n(27.4)\n\n%\n\n8.2\n\n%\n\nBritish Pound vs U.S. Dollar\n\n​\n\n6.8\n\n%\n\n(1.6)\n\n%\n\n4.9\n\n%\n\nBulgarian Lev vs U.S. Dollar\n\n \n\n11.5\n\n%\n\n(6.3)\n\n%\n\n3.0\n\n%\n\nCanadian Dollar vs. U.S. Dollar\n\n \n\n4.6\n\n%\n\n(8.5)\n\n%\n\n2.2\n\n%\n\nColombian Peso vs U.S. Dollar\n\n \n\n14.6\n\n%\n\n(13.8)\n\n%\n\n20.0\n\n%\n\nEgyptian Pound vs U.S. Dollar\n\n \n\n6.2\n\n%\n\n(64.4)\n\n%  \n\n(25.0)\n\n%\n\nEuro vs. U.S. Dollar\n\n​\n\n11.5\n\n%\n\n(6.3)\n\n%  \n\n3.0\n\n%\n\nHonduran Lempira vs U.S. Dollar(1)\n\n​\n\n(4.4)\n\n%\n\n(2.8)\n\n%  \n\n—\n\n%\n\nIndian Rupee vs. U.S. Dollar\n\n​\n\n(5.0)\n\n%\n\n(3.1)\n\n%  \n\n(0.5)\n\n%\n\nMexican Peso vs. U.S. Dollar\n\n​\n\n13.3\n\n%\n\n(22.3)\n\n%  \n\n12.9\n\n%\n\nPhilippine Peso vs. U.S. Dollar\n\n​\n\n(1.5)\n\n%\n\n(5.1)\n\n%  \n\n1.0\n\n%\n\nPhilippine Peso vs. Australian Dollar\n\n​\n\n(9.3)\n\n%\n\n4.3\n\n%  \n\n1.0\n\n%\n\nPolish Zloty vs U.S. Dollar\n\n​\n\n12.6\n\n%\n\n(4.6)\n\n%  \n\n9.9\n\n%\n\nSouth African Rand vs U.S. Dollar\n\n​\n\n11.9\n\n%\n\n(2.9)\n\n%\n\n(7.6)\n\n%\n\nThailand Baht vs U.S. Dollar\n\n \n\n8.0\n\n%\n\n0.2\n\n%  \n\n0.5\n\n%\n\n(1) No material business activity in 2023.\n\nIn order to mitigate the risk of these non-functional foreign currencies weakening against the functional currencies of the servicing subsidiaries, which thereby decreases the economic benefit of performing work in these countries, we may hedge a portion, though not 100%, of the projected foreign currency exposure related to client programs served from these foreign countries through our cash flow hedging program. While our hedging strategy can protect us from adverse changes in foreign currency rates in the short term, an overall weakening of the non-functional revenue foreign currencies would adversely impact margins in the segments of the servicing subsidiary over the long term.\n\n*Cash Flow Hedging Program*\n\nTo reduce our exposure to foreign currency exchange rate fluctuations associated with forecasted revenue in non-functional currencies, we purchase forward and/or option contracts to acquire the functional currency of the foreign subsidiary at a fixed exchange rate at specific dates in the future. We have designated and account for these derivative instruments as cash flow hedges for forecasted revenue in non-functional currencies.\n\nWhile we have implemented certain strategies to mitigate risks related to the impact of fluctuations in currency exchange rates, we cannot ensure that we will not recognize gains or losses from international transactions, as this is part of transacting business in an international environment. Not every exposure is or can be hedged and, where hedges are put in place based on expected foreign exchange exposure, they are based on forecasts for which actual results may differ from the original estimate. Failure to successfully hedge or anticipate currency risks properly could adversely affect our consolidated operating results.\n\n45\n\n[Table of Contents](#Toc)\n\nOur cash flow hedging instruments as of December 31, 2025 and 2024 are summarized as follows (in thousands). All hedging instruments are forward contracts, except as noted.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Local**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**  ​ ​ ​**\n\n​\n\n** **\n\n​\n\n​\n\n**Currency**\n\n​\n\n**U.S. Dollar**\n\n​\n\n​\n\n**% Maturing**\n\n​\n\n​\n\n**Contracts**\n\n** **\n\n​\n\n​\n\n**Notional**\n\n​\n\n**Notional**\n\n​\n\n​\n\n**in the next**\n\n​\n\n​\n\n**Maturing**\n\n** **\n\n**As of December 31, 2025**\n\n​\n\n**Amount**\n\n​\n\n**Amount**\n\n​\n\n​\n\n**12 months**\n\n​\n\n​\n\n**Through**\n\n** **\n\nPhilippine Peso\n\n \n\n4,025,000\n\n​\n\n$\n\n69,458\n\n(1)  ​\n\n​\n\n97.0\n\n%  \n\n​\n\nMarch 2027\n\n​\n\nMexican Peso\n\n \n\n314,000\n\n​\n\n$\n\n15,618\n\n​\n\n​\n\n100.0\n\n%  \n\n​\n\nDecember 2026\n\n​\n\nColombian Peso\n\n \n\n8,000,000\n\n​\n\n \n\n1,931\n\n​\n\n​\n\n100.0\n\n%  \n\n​\n\nAugust 2026\n\n​\n\n​\n\n​\n\n​\n\n​\n\n$\n\n87,007\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Local**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n** **\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n​\n\n​\n\n**Currency**\n\n​\n\n**U.S. Dollar**\n\n** **\n\n​\n\n**% Maturing**\n\n​\n\n​\n\n**Contracts**\n\n​\n\n​\n\n​\n\n**Notional**\n\n​\n\n**Notional**\n\n** **\n\n​\n\n**in the next**\n\n​\n\n​\n\n**Maturing**\n\n​\n\n**As of December 31, 2024**\n\n​\n\n**Amount**\n\n​\n\n**Amount**\n\n** **\n\n​\n\n**12 months**\n\n​\n\n​\n\n**Through**\n\n​\n\nPhilippine Peso\n\n \n\n6,034,000\n\n​\n\n​\n\n105,098\n\n(1)​\n\n​\n\n67.8\n\n%  \n\n​\n\nMarch 2027\n\n​\n\nMexican Peso\n\n \n\n548,000\n\n​\n\n \n\n26,682\n\n​\n\n​\n\n64.6\n\n%  \n\n​\n\nDecember 2026\n\n​\n\n​\n\n​\n\n​\n\n​\n\n$\n\n131,780\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n(1)Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on December 31, 2025 and December 31, 2024.\n\nThe fair value of our cash flow hedges at December 31, 2025 was a net asset (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Maturing in the**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\n**  ​ ​ ​**\n\n**Next 12 Months**\n\n** **\n\nPhilippine Peso\n\n​\n\n$\n\n(1,289)\n\n​\n\n$\n\n(1,258)\n\n​\n\nMexican Peso\n\n​\n\n \n\n1,513\n\n​\n\n \n\n1,513\n\n​\n\nColombian Peso\n\n​\n\n \n\n117\n\n​\n\n \n\n117\n\n​\n\n​\n\n​\n\n$\n\n341\n\n​\n\n$\n\n372\n\n​\n\n​\n\nOur cash flow hedges are valued using models based on market observable inputs, including both forward and spot foreign exchange rates, implied volatility, and counterparty credit risk. The fair value of our cash flow hedges increased by $3.9 million from December 31, 2024 to December 31, 2025. The increase in fair value from December 31, 2024 primarily reflects changes in the currency translation between the U.S. dollar and Mexican Peso and U.S. dollar and Philippines Peso.\n\nWe recorded net gains/(losses) of $0.9 million, $2.6 million, and $4.0 million for settled cash flow hedge contracts for the years ended December 31, 2025, 2024, and 2023, respectively. These gains/(losses) were reflected in Revenue in the accompanying Consolidated Statements of Comprehensive Income (Loss). If the exchange rates between our various currency pairs were to increase or decrease by 10% from current period-end levels, we would incur a material gain or loss on the contracts. However, any gain or loss would be mitigated by corresponding increases or decreases in our underlying exposures.\n\nOther than the transactions hedged as discussed above and in Part II. Item 8. Financial Statements and Supplementary Data, Note 8 to the Consolidated Financial Statements, the majority of the transactions of our U.S. and foreign operations are denominated in their respective local currency. However, transactions are denominated in other currencies from time-to-time. We do not currently engage in hedging activities related to these types of foreign currency risks because we believe them to be insignificant as we endeavor to settle these accounts on a timely basis. For the years ended 2025 and 2024, approximately 16% and 15%, respectively, of revenue was derived from contracts denominated in currencies other than the U.S. Dollar. Our results of operations and revenue could be adversely affected if the U.S. Dollar strengthens significantly against foreign currencies.\n\n46\n\n[Table of Contents](#Toc)\n\n**Fair Value of Debt and Equity Securities**\n\nWe did not have any investments in marketable debt or equity securities as of December 31, 2025 or 2024.\n\n​"}