TDCX Reports 19.6% Revenue Growth for Full Year 2022

SINGAPORE–(BUSINESS WIRE)–TDCX Inc. (NYSE: TDCX) (�TDCX” or the “Company”), an award-winning digital customer experience (CX) solutions provider for technology and blue-chip companies, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022.

Full Year 2022 Financial Highlights

• Total revenue of US$493.9 million, up 19.6% year-on-year
• Profit for the period was US$78.0 million, up 1.1% year-on-year
• Adjusted Net Income^1,4, which excludes the impact of share-based compensation for a like-for-like comparison with the prior year, was US$92.5 million, up 14.1% year-on-year
• Net Cash from Operating Activities of US$123.0 million, up 59.3% year-on-year

Fourth Quarter 2022 Financial Highlights

• Total revenue of US$131.4 million, up 14.2% year-on-year
• Profit for the period was US$18.6 million, down 13.3% from US$21.5 million in the same period last year, due largely to a foreign exchange loss of US$4.5 million recorded during the quarter with the depreciation of the US dollar

Mr. Laurent Junique, Chief Executive Officer and Founder of TDCX, said, “Despite the challenging year, we remained steadfast in executing our growth strategy and achieved our growth expectations, with an almost 20 per cent increase in revenue year-on-year. We doubled the number of new logos signed up in 2022 and are seeing increased revenue contribution from our newer markets, such as India, Korea and Türkiye.

“While the economic challenges we saw last year are expected to have a spillover effect into 2023, we are focused on strengthening our capabilities through our network expansion strategy and initiatives to deepen our relationship with our clients, such as the launch of our Digital CX Center of Excellence in Singapore. The Center will enable us to provide more dedicated strategic advisory to our clients – an area that we are seeing increased interest in – to help solve their CX challenges. Such client requests demonstrate the strategic role that CX plays in the future economy and our sector’s potential.

“With the COVID-era largely behind us, we are optimistic about the continued recovery of sectors such as travel and hospitality and markets such as China. We are confident that our strategy of pursuing growth while ensuring stability will continue to create value for our clients and other stakeholders.”

(US$ million, except for %)2	FY2021		FY2022		% Change	Q4 2021		Q4 2022		% Change
Revenue	412.9		493.9		+19.6%	115.1		131.4		+14.2%
Profit for the period	77.2		78.0		+1.1%	21.5		18.6		-13.3%
Adjusted Net Income1,4	81.1		92.5		+14.1%	25.3		21.7		-14.5%
Adjusted EBITDA1,3	137.6		148.6		+8.0%	40.1		34.9		-13.1%
Adjusted EBITDA Margins1,3 (%)	33.3	%	30.1	%		34.8	%	26.5	%

Business Highlights

Strong Client Additions

• Signed up 41⁵ new logos in 2022, 105% higher than the 20 logos in 2021
• 84⁶ launched clients⁷ as of December 31, 2022, a 62% increase as compared with 52 launched clients as of December 31, 2021
• 92% revenue contribution from new economy⁸ clients for 2022

Continued Geographic Expansion as a key strategic priority

• Expanded to 16 geographies as of December 31, 2022

Full Year 2023 Outlook

For the full year 2023, TDCX expects its financial results to be:

2023 Outlook
Revenue growth (YoY)	Range: 3% – 8% (On a constant currency basis1,9)
Adjusted EBITDA margin1,3	Approximately 25% – 29%

_____________________

¹ Adjusted EBITDA, Adjusted EBITDAmargin, Adjusted Net Income, Adjusted Net Income margin, revenue at constant currency and revenue growth at constant currency aresupplemental non-IFRS financial measures and should not be considered in isolation or as a substitute for financial results reported under IFRS (see “Reconciliation of non-IFRS financial measures to the nearest comparable IFRS measures”in the Form 6-K or presentation slides for more details).

² FX rate of US$1 = S$1.3446, being the approximate rate in effect as of December 31, 2022, assumed in converting financials from SG dollar to US dollar.

³ Adjusted EBITDA represents profit for the period before interest expense, interest income, income tax expense, depreciation expense and equity-settled share-based payment expense incurred in connection with our TDCX Performance Share Plan (the “Performance Share Plan”), which was adopted on August 26, 2021 and allows us to offer Class A ordinary shares or ADSs to our employees, officers, executive directors and consultants. “Adjusted EBITDA margin” represents Adjusted EBITDA as a percentage of revenue.

⁴ “Adjusted Net Income” represents profit for the period before equity-settled share-based payment expense incurred in connection with our Performance Share Plan, net of any tax impact of such adjustments. “Adjusted Net Income margin” represents Adjusted Net Income as a percentage of revenue.

⁵ Includes 9 additional logos attributable to the acquisition of our previous Hong Kong associated company into a wholly-owned subsidiary on October 13, 2022.

⁶ Includes 9 additional clients attributable to the acquisition of our previous Hong Kong associated company into a wholly-owned subsidiary on October 13, 2022.

⁷ “Launched client” refers to launched campaigns that are revenue generating.

⁸ “New economy” refers to high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth.

⁹ Revenue at constant currency is calculated by translating the revenue of our local subsidiaries in each period in the respective local functional currencies to the Group’s presentation currency, using the average currency conversion rates in effect during the comparable prior period, rather than at the actual currency conversion rates in effect during that period. We have not reconciled non-IFRS forward-looking revenue growth at constant currency to its most directly comparable IFRS measure, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. The revenue growth outlook indicated for 2023 is calculated and presented at constant currency, as it would require unreasonable efforts to predict factors out of our control or not readily predictable, such as currency exchange movements over the course of an entire year.

Webcast and Conference Call Information

TDCX senior management will host a conference call to discuss the fourth quarter 2022 unaudited financial results.

A live webcast of this conference call will be available on TDCX’s website. Access information on the conference call and webcast is as follows:

Date and time:		March 7, 2023, 7:30 PM (U.S. Eastern Time) March 8, 2023, 8:30 AM (Singapore / Hong Kong Time)
Webcast link:		https://events.q4inc.com/earnings/TDCX/Q4-2022
Dial in numbers:		USA Toll Free: +1 855 9796 654 Singapore: +65 3163 4602 UK Toll Free +44 0800 640 6441		United States (Local): +1 646 664 1960 Hong Kong: +852 580 33 413 All other locations: +44 20 3936 2999
Participant Access Code:		598306

A replay of the conference call will be available at TDCX’s investor relations website (investors.tdcx.com). An archived webcast will be available at the same link above.

About TDCX INC.

Singapore-headquartered TDCX provides transformative digital CX solutions, enabling world-leading and disruptive brands to acquire new customers, to build customer loyalty and to protect their online communities.

TDCX helps clients achieve their customer experience aspirations by harnessing technology, human intelligence and its global footprint. It serves clients in fintech, gaming, technology, home sharing and travel, digital advertising and social media, streaming and e-commerce. TDCX’s expertise and strong footprint in Asia has made it a trusted partner for clients, particularly high-growth, new economy companies, looking to tap the region’s growth potential.

TDCX’s commitment to delivering positive outcomes for our clients extends to its role as a responsible corporate citizen. Its Corporate Social Responsibility program focuses on positively transforming the lives of its people, its communities and the environment.

TDCX employs more than 17,800 employees across 28 campuses globally, specifically Singapore, Malaysia, Thailand, Philippines, Mainland China, Hong Kong, South Korea, Japan, India, Romania, Spain, Colombia, Türkiye and Vietnam. For more information, please visit www.tdcx.com.

Convenience Translation

The Company’s financial information is stated in Singapore dollars, the legal currency of Singapore. Unless otherwise noted, all translations from Singapore dollars to U.S. dollars and from U.S. dollars to Singapore dollars in this press release were made at a rate of S$1.3446 to US$1.00, the approximate rate in effect as of December 31, 2022. We make no representation that any Singapore dollar or U.S. dollar amount could have been, or could be, converted into U.S. dollars or Singapore dollar, as the case may be, at any particular rate, the rate stated herein, or at all.

Non-IFRS Financial Measure

To supplement our consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the following non-IFRS financial measure to help evaluate our operating performance:

“EBITDA” represents profit for the year/ period before interest expense, interest income, income tax expense and depreciation expense. “EBITDA margin” represents EBITDA as a percentage of revenue. “Adjusted EBITDA” represents profit for the year/ period before interest expense, interest income, income tax expense, depreciation expense and equity-settled share-based payment expense incurred in connection with our Performance Share Plan. “Adjusted EBITDA margin” represents Adjusted EBITDA as a percentage of revenue.

“Adjusted Net Income” represents profit for the year/ period before equity-settled share-based payment expense incurred in connection with our Performance Share Plan, net of any tax impact of such adjustments. “Adjusted Net Income margin” represents Adjusted Net Income as a percentage of revenue.

Revenue at constant currency is calculated by translating the revenue of our local subsidiaries in each period in the respective local functional currencies to the Group’s presentation currency, using the average currency conversion rates in effect during the comparable prior period, rather than at the actual currency conversion rates in effect during that period.

We believe that EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin, revenue at constant currency and revenue growth at constant currency help us to compare our operating performance on a consistent basis by removing the impact of items not directly resulting from our core operations, and thereby help us to identify underlying trends in our operating results, enhancing our understanding of past performance and future prospects.

The above non-IFRS financial measures have limitations as analytical tools and should not be considered in isolation or construed as an alternative to revenue, net income, or any other measure of performance or as an indicator of our operating performance. The non-IFRS financial measures presented here may not be comparable to similarly titled measures presented by other companies because other companies may calculate similarly titled measures differently. For more information on the non-IFRS financial measures, please see the form 6-K section captioned “Non-IFRS Financial Measures” or the presentation slides.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Among other things, the outlook for the full year, the business outlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the performance of TDCX’s largest clients; the successful implementation of its business strategy; its ability to compete effectively; its ability to maintain its pricing, control costs or continue to grow its business; the effects of the novel coronavirus (COVID-19) on its business; the continued service of its founder and certain of its key employees and management; its ability to attract and retain enough highly trained employees; its exposure to various risks in Southeast Asia; its contractual relationship with key clients; clients and prospective clients’ spending on omnichannel CX solutions; its spending on employee salaries and benefits expenses; and its involvement in any disputes, legal, regulatory, and other proceedings arising out of its business operations. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

		For the three months ended December 31,
		2022					2021
		US$’000		S$’000			S$’000
Revenue		131,393		176,671			154,763
Employee benefits expense		(85,386	)	(114,810	)		(97,674	)
Depreciation expense		(7,937	)	(10,672	)		(9,605	)
Rental and maintenance expense		(2,001	)	(2,690	)		(2,092	)
Recruitment expense		(2,532	)	(3,404	)		(3,340	)
Transport and travelling expense		(495	)	(666	)		(476	)
Telecommunication and technology expense		(2,433	)	(3,271	)		(2,493	)
Interest expense		(408	)	(549	)		(1,964	)
Other operating expense		(7,044	)	(9,472	)		(2,548	)
Share of profit from an associate		3		4			23
Interest income		1,061		1,426			251
Other operating income		294		395			2,551
Profit before income tax		24,515		32,962			37,396
Income tax expenses		(5,914	)	(7,952	)		(8,550	)
Profit for the period		18,601		25,010			28,846
Item that will not be reclassified to profit or loss:
Remeasurement of retirement benefit obligation		687		924			276
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		(12,033	)	(16,179	)		(2,824	)
Total comprehensive income for the period		7,255		9,755			26,298
Profit attributable to:
– Owners of TDCX Inc.		18,601		25,010			28,846
– Non-controlling interests		–		–			–
		18,601		25,010			28,846
Total comprehensive income attributable to:
– Owners of TDCX Inc.		7,255		9,755			26,298
– Non-controlling interests		–		–			–
		7,255		9,755			26,298
Basic earnings per share (in US$ or S$) (1)		0.13		0.17			0.20
Diluted earnings per share (in US$ or S$) (1)		0.13		0.17			0.20
_______________________________ (1) Basic and diluted earnings per share

	For the three months ended December 31,
	2022	2021
Weighted average number of ordinary shares for the purposes of basic earnings per share	144,921,462	144,542,344
Weighted average number of ordinary shares for the purposes of diluted earnings per share	144,921,462	144,646,728
The translation of Singapore Dollar amounts into United States Dollar amounts (“USD”) for the unaudited condensed interim consolidated statement of profit or loss and other comprehensive income above are included solely for the convenience of readers outside of Singapore and have been made at the rate of S$1.3446 to US$1.00, the approximate rate of exchange at December 31, 2022. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

Comparison of the Three Months Ended December 31, 2022 and 2021

Revenue. Our revenue increased by 14.2% to S$176.7 million (US$131.4 million) for the three months ended December 31, 2022 from S$154.8 million for the three months ended December 31, 2021 primarily driven by a 40.7% increase in revenue from sales and digital marketing services followed by omnichannel CX solutions services rendered.

• Our revenue from omnichannel CX solutions increased by 6.6% to S$98.5 million (US$73.2 million) from S$92.3 million for the same period of 2021 primarily due to higher business volumes driven by the expansion of existing campaigns by clients in the travel and hospitality, and technology verticals, partially offset by a decrease in demand from existing clients in the digital advertising and media vertical.
• Our revenue from sales and digital marketing services increased by 40.7% to S$48.9 million (US$36.4 million) from S$34.8 million for the same period of 2021 primarily due to the expansion of existing campaigns by our key digital advertising and media clients and additional contributions from new clients in 2022 continuing to scale up.
• Our revenue from content, trust and safety services increased by 4.6% to S$28.1 million (US$20.9 million) from S$26.8 million for the same period of 2021 primarily due to higher business volumes from existing clients.
• Our revenue from our other service fees increased by 50.9% to S$1.2 million (US$0.9 million) from S$0.8 million for the same period of 2021 primarily due to an expansion of existing campaigns.

The following table sets forth our service provided by amount for the three months ended December 31, 2022 and 2021.

	For the three months ended December 31,
	2022			2021
	US$’000	S$’000		S$’000
Revenue by service
Omnichannel CX solutions *	73,220	98,452		92,340
Sales and digital marketing	36,399	48,942		34,789
Content, trust and safety *	20,862	28,052		26,822
Other service fees * #	912	1,225		812
Total revenue	131,393	176,671		154,763
* In the second quarter of 2022, we renamed our “content monitoring and moderation” services as “content, trust and safety” services which entailed some reclassification of certain of our revenue from our omnichannel CX solutions services and our other service fees into content, trust and safety services. Accordingly, we reclassified our segment revenue for all periods presented herein on a comparable basis except where otherwise noted. See “Segment Reclassification” below.
#Other service fees comprise revenue from other business process services and revenue from other services.

Employee Benefits Expense. Our employee benefits expense increased by 17.5% to S$114.8 million (US$85.4 million) from S$97.7 million for the same period of 2021 due to higher employee headcount, wage adjustments and share-based payment expense arising from the implementation of the TDCX Performance Share Plan (the “Performance Share Plan”) in November 2021. Our average number of employees in the fourth quarter of 2022 increased by 24.0% compared to the same period of 2021 driven by business volumes requirements of current campaigns over the course of 2022, and staff resourcing requirements of new campaign launches in the second half of 2022.

Depreciation Expense. Our depreciation expense increased by 11.1% to S$10.7 million (US$7.9 million) from S$9.6 million for the same period of 2021 primarily due to depreciation expense attributable to our office space expansion to support our business growth in Malaysia, Thailand and Spain and depreciation expense arising from our newly acquired Hong Kong subsidiary.

Rental and Maintenance Expense. Our rental and maintenance expense increased by 28.6% to S$2.7 million (US$2.0 million) from S$2.1 million for the same period of 2021 primarily due to the setting up of new greenfield sites in Türkiye, Korea and Vietnam, and the acquired operation in Hong Kong. In addition, our rental and maintenance expense increased to cope with the growth in our key clients’ campaigns in the Philippines and Thailand as we had to lease additional computer equipment and incur maintenance expense for additional floor space.

Recruitment Expense. The increase in our recruitment expense by 1.9% to S$3.4 million (US$2.5 million) from S$3.3 million for the same period of 2021 is not material in absolute terms.

Transport and Travelling Expense. Our transport and travelling expense increased by 39.9% to S$0.7 million (US$0.5 million) from S$0.5 million for the same period of 2021 mainly due to increased operational and business development travel.

Telecommunication and Technology Expense. Our telecommunication and technology expense increased by 31.2% to S$3.3 million (US$2.4 million) from S$2.5 million for the same period of 2021 primarily due to an increase in software subscription and outsourced IT services.

Interest Expense. Our interest expense decreased by 72.0% to S$0.5 million (US$0.4 million) from S$2.0 million for the same period of 2021 primarily due to reduced bank borrowings.

Other Operating Expense. Our other operating expense increased by 271.7%% to S$9.5 million (US$7.0 million) from S$2.5 million for the same period of 2021 primarily due to foreign exchange losses of S$6.0 million caused by the weakening of the United States Dollar in the fourth quarter of 2022.

Share of Profit from an Associate. Our share of profit from an associate was insignificant for the three months ended December 31, 2022 and 2021.

Interest Income. Our interest income increased by 468.1% to S$1.4 million (US$1.1 million) from S$0.3 million for the same period of 2021 primarily due to higher placements of excess liquid funds in interest earning deposit.

Other Operating Income. Our other operating income decreased by 84.5% to S$0.4 million (US$0.3 million) for the same period of 2021 primarily due to lower government grants received by our Singapore subsidiaries.

Profit Before Income Tax. As a result of the foregoing, our profit before income tax decreased by 11.9% to S$33.0 million (US$24.5 million) from S$37.4 million for the corresponding period of 2021.

Income Tax Expenses. Our income tax expenses decreased by 7.0% to S$8.0 million (US$5.9 million) from S$8.6 million for the same period of 2021 primarily due to the recognition of a previously unrecognized deferred tax asset, and partially offset by higher taxes incurred by our Malaysia subsidiary due to the imposition of a one-off “prosperity tax” enacted by the local government for fiscal 2022 for the Malaysian operations and its higher taxable earnings and the non-availability of the income tax incentive by the Philippines unit as the unit did not meet the work from home threshold requirement imposed by the local fiscal incentive administrative body. The income tax incentive was reinstated to the Philippines unit after it met the work from home threshold requirements during the fourth quarter of 2022.

Profit for the Period. As a result of the foregoing, our profit for the period decreased by 13.

Contacts

For enquiries, please contact:
Investors / Analysts: Jason Lim

lim.jason@tdcx.com
Media: Eunice Seow

eunice.seow@tdcx.com

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