BENSALEM, Pa.--(BUSINESS WIRE)-- Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased TELUS International (Cda) Inc. (“Telus International” or the “Company”) (NYSE: TIXT) securities between February 16, 2023 and August 1, 2024, inclusive (the “Class Period”). Telus International investors have until March 31, 2025 to file a lead plaintiff motion.

IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN TELUS INTERNATIONAL (CDA) INC. (TIXT), CONTACT THE LAW OFFICES OF HOWARD G. SMITH TO PARTICIPATE IN THE ONGOING SECURITIES FRAUD LAWSUIT.

Contact the Law Offices of Howard G. Smith to discuss your legal rights by email at howardsmith@howardsmithlaw.com, by telephone at (215) 638-4847 or visit our website at www.howardsmithlaw.com.

What Happened?

On May 9, 2024, Telus International released its first quarter 2024 financial results, revealing a $29 million decline in revenue year over year. On the same day, the Company held an earnings call during which Chief Financial Officer Gopi Chande was asked by an analyst to clarify “what margin should look like on a go-forward basis” as margins “were down year-over-year and . . . were below the full year guidance.” In response, Gopi Chande revealed that the margins generated by the Company’s AI offerings “can be a bit below average.”

On this news, the Company’s share price fell $1.41 or 18.15%, to close at $6.36 on May 9, 2024, on unusually heavy trading volume.

Then, on August 2, 2024, before the market opened, Telus International released second quarter 2024 financial results, revealing a significant slowdown in revenue generation: a $5 million quarter-over-quarter or $15 million year-over-year revenue decrease; a $23 million or 15% quarter-over-quarter adjusted EBITDA decrease; and 14.6% quarter-over-quarter reduction in adjusted EBITDA margin, from 23.3% to 19.9%. As a result, Telus International announced it had significantly reduced its full year 2024 fiscal guidance. The Company also disclosed that Jeff Puritt, then-President and Chief Executive Officer, would retire effective September 3, 2024. In an earnings call held the same day, Puritt disclosed that the transition of the Company “towards a more technology centric and specifically AI fueled business” “necessitates some cannibalization of our tenured and higher margin CX work.” Puritt concluded that, ultimately, the Company is “going to have to take it on the chin a little bit in terms of our historical margin profile” and rely upon “eating our own roommate cooking internally,” referring to the self-cannibalization of the business, “in order to create the headwind we need to enjoy the margin yield that we’ve historically benefited from.”

On this news, the Company’s share price fell $2.33 or 35.96%, to close at $4.15 on August 2, 2024, on unusually heavy trading volume. The stock continued to decline on the next trading day available, falling $0.83, or 20%, to close at $3.32 on August 5, 2024, on unusually heavy trading volume.

What Is The Lawsuit About?

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company’s AI Data Solutions offerings required the cannibalization of its higher-margin offerings; (2) that Telus International’s declining profitability was tied to the Company’s drive to develop AI capabilities; (3) that Telus International’s shift toward AI put greater pressure on the Company’s margins than previously disclosed; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

Contact Us To Participate or Learn More:

If you purchased Telus International securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:

Law Offices of Howard G. Smith
3070 Bristol Pike, Suite 112
Bensalem, Pennsylvania 19020
Telephone: (215) 638-4847
Email: howardsmith@howardsmithlaw.com
Visit our website at: www.howardsmithlaw.com.

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