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 first quarter ended March 31, 2023.
First Quarter 2023 Financial Highlights3
Mr. Laurent Junique, Chief Executive Officer and Founder of TDCX, said, “We delivered a resilient set of results this quarter through our continued focus on operational excellence. Our efforts to deepen our support for existing clients are also showing results, as revenue from clients outside our top five rose 45 per cent year-on-year.
“Given market uncertainties, we are seeing more emphasis for stronger performance and greater productivity among our clients. Hence, we are focused on adding value to our clients by helping them solve their strategic CX challenges. We do this by leveraging the insights and best practices gathered from our Digital CX Center of Excellence and our recently launched TDCX AI arm.
“Looking ahead, we continue to strengthen our capabilities by deepening our sector expertise in our core verticals, sharpening our operational capabilities, and expanding our footprint for better client coverage.”
| (US$ million, except for %)3 | Q1 2022 | Q1 2023 |
% Change |
| Revenue | 114.9 | 124.3 | +8.2% (+13.1% on a constant currency basis)1, 2 |
| Profit for the period | 16.7 | 20.5 | +22.5% |
| EBITDA2,4 | 29.9 | 32.0 | +7.0% |
| EBITDA Margins2,4 (%) | 26.1% | 25.8% |
|
| Adjusted EBITDA2,4 | 35.8 | 30.0 | -16.2% |
| Adjusted EBITDA Margins2,4 (%) | 31.2% | 24.2% |
|
| Adjusted Net Income2,5 | 22.6 | 18.3 | -19.1% |
Q1 23 Business Highlights
Strong Client Growth Year-on-Year
Improved Client Diversification
Strategic Geographic Expansion
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 basis1,2,8)
|
| Adjusted EBITDA margin2,4 | Approximately 25% – 29%
|
Detailed Financial Information on the Form 6-K
Please refer to https://investors.tdcx.com/financials/quarterly-results/default.aspx for the detailed financial information contained in Form 6-K.
__________________
1 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 presentation currency of the Company and its subsidiaries (the “Group”), 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.
2 EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Revenue at Constant Currency and Revenue Growth at Constant Currency are supplemental non-IFRS financial measures and should not be considered in isolation or as a substitute for financial results reported under IFRS (see “Non-IFRS Financial Measures” in the Form 6-K or “Reconciliation of non-IFRS financial measures to the nearest comparable IFRS measures” in the presentation slides for more details).
The reported amounts for Adjusted EBITDA and Adjusted Net Income for the three months ended March 31, 2023 include adjustments for certain items (i.e., acquisition-related professional fees and net foreign exchange gains or losses) which were not included in similar non-IFRS financial measures previously reported in prior periods. In order to place the current disclosure in the appropriate context and enhance its comparability, similar adjustments have been made for Adjusted EBITDA and Adjusted Net Income for the three months ended March 31, 2022.
3 FX rate of US$1 = S$1.3270, being the approximate rate in effect as of March 31, 2023, assumed in converting financials from SG dollar to U.S. dollar.
4 “EBITDA” represents profit for the year/ period before interest expense, interest income, income tax expense and depreciation and amortization expense. “EBITDA margin” represents EBITDA as a percentage of revenue. “Adjusted EBITDA” represents profit for the period before interest expense, interest income, income tax expense, depreciation and amortization expense, acquisition-related professional fees, net foreign exchange gains or losses and equity-settled share-based payment expense (or net reversal) 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.
5 “Adjusted Net Income” represents profit for the period before acquisition-related professional fees, net foreign exchange gains or losses and equity-settled share-based payment expense (or net reversal) incurred in connection with our Performance Share Plan, net of any tax impact of such adjustments.
6 “Client count” refers to launched campaigns that are revenue generating.
7 Includes additional clients attributable to our Hong Kong subsidiary.
8 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 first quarter 2023 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: | May 31, 2023, 8:30 PM (U.S. Eastern Time) | ||
| June 1, 2023, 8:30 AM (Singapore / Hong Kong Time) | |||
| Webcast link: | |||
| Dial in numbers: | USA Toll Free: +1 855 979 6654 | United States (Local): +1 646 787 9445 | |
| Singapore: +65 3163 4602 | Hong Kong: +852 5803 3413 | ||
| UK Toll Free +44 800 358 1035 | All other locations: +44 20 3936 2999 | ||
| Participant Access Code: 644840 | |||
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 18,400 employees across 30 campuses globally, specifically in Brazil, Colombia, Hong Kong, India, Japan, Malaysia, Mainland China, Philippines, Romania, Singapore, South Korea, Spain, Thailand, 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$1.3270 to US$1.00, the approximate rate in effect as of March 31, 2023. 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 and amortization 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 and amortization expense, acquisition-related professional fees, net foreign exchange gains or losses and equity-settled share-based payment expense (or net reversal) 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 acquisition-related professional fees, net foreign exchange gains or losses and equity-settled share-based payment expense (or net reversal) incurred in connection with our Performance Share Plan, net of any tax impact of such adjustments.
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, 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.
We exclude items from Adjusted EBITDA and Adjusted Net Income, including acquisition-related professional fees, net foreign exchange gains or losses and equity-settled share-based payment expense (or net reversal) incurred in connection with our Performance Share Plan, as they are not indicative of our ongoing operating performance, and adjusting for such items is meaningful and useful to readers to understand the underlying performance of the business by eliminating the impact of certain items that may obscure trends in the underlying performance of the business.
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, including full reconciliations to the nearest IFRS measure, 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; the continued service of its founder and certain of its key employees and management; its ability to compete effectively; its ability to navigate difficulties and successfully expand its operations into countries in which it has no prior operating experience; its ability to maintain its pricing, control costs or continue to grow its business; its ability to attract and retain enough highly trained employees; its compliance with service level and performance requirements by, and contractual obligations with, its clients; its exposure to various risks in Southeast Asia; its contractual relationship with key clients; clients and prospective clients’ spending on omnichannel CX solutions and content, trust and safety services; its ability to successfully identify, acquire and integrate companies; 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 March 31, | ||||||||
| 2023 |
| 2022 | ||||||
|
| US$’000 | S$’000 |
| S$’000 | ||||
| Revenue |
| 124,301 |
| 164,947 |
|
| 152,423 |
|
| Employee benefits expense |
| (79,939 | ) | (106,079 | ) |
| (103,850 | ) |
| Depreciation and amortization expense |
| (8,481 | ) | (11,254 | ) |
| (9,556 | ) |
| Rental and maintenance expense |
| (2,555 | ) | (3,391 | ) |
| (2,266 | ) |
| Recruitment expense |
| (2,295 | ) | (3,045 | ) |
| (2,809 | ) |
| Transport and travelling expense |
| (346 | ) | (459 | ) |
| (190 | ) |
| Telecommunication and technology expense |
| (2,509 | ) | (3,329 | ) |
| (2,629 | ) |
| Interest expense |
| (360 | ) | (478 | ) |
| (487 | ) |
| Other operating expense (1) |
| (5,021 | ) | (6,662 | ) |
| (2,554 | ) |
| Share of profit from an associate |
| — |
| — |
|
| 18 |
|
| Interest income |
| 1,361 |
| 1,806 |
|
| 267 |
|
| Other operating income |
| 390 |
| 517 |
|
| 1,592 |
|
| Profit before income tax |
| 24,546 |
| 32,573 |
|
| 29,959 |
|
| Income tax expense |
| (4,044 | ) | (5,366 | ) |
| (7,754 | ) |
| Profit for the period |
| 20,502 |
| 27,207 |
|
| 22,205 |
|
| Item that may be reclassified subsequently to profit or loss: |
|
|
|
|
| |||
| Exchange differences on translation of foreign operations |
| (2,681 | ) | (3,558 | ) |
| (1,116 | ) |
| Total comprehensive income for the period |
| 17,821 |
| 23,649 |
|
| 21,089 |
|
|
|
|
|
|
|
| |||
| Profit attributable to: |
|
|
|
|
| |||
| – Owners of TDCX Inc. |
| 20,502 |
| 27,207 |
|
| 22,205 |
|
| – Non-controlling interests |
| — |
| — |
|
| — |
|
|
|
| 20,502 |
| 27,207 |
|
| 22,205 |
|
|
|
|
|
|
|
| |||
| Total comprehensive income attributable to: |
|
|
|
|
| |||
| – Owners of TDCX Inc. |
| 17,821 |
| 23,649 |
|
| 21,089 |
|
| – Non-controlling interests |
| — |
| — |
|
| — |
|
|
|
| 17,821 |
| 23,649 |
|
| 21,089 |
|
|
|
|
|
|
| ||||
| Basic earnings per share (in US$ or S$) (2) |
| 0.14 |
| 0.19 |
|
| 0.15 |
|
| Diluted earnings per share (in US$ or S$) (2) |
| 0.14 |
| 0.19 |
|
| 0.15 |
|
_______________________________
(1) We reported foreign exchange gains or losses, as applicable, on a net basis for the relevant period under the “other operating expense” line item.
(2) Basic and diluted earnings per share
| For the three months ended March 31, | ||
|
| 2023 | 2022 |
| Weighted average number of ordinary shares for the purposes of basic earnings per share | 144,920,762 | 145,745,209 |
| Effect of vesting of employee share awards | — | 134,474 |
| Weighted average number of ordinary shares for the purposes of diluted earnings per share | 144,920,762 | 145,879,683 |
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$1.3270 to US$1.00, the approximate rate of exchange at March 31, 2023. 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 March 31, 2023 and 2022
Revenue. Our revenue increased by 8.2% to S$164.9 million (US$124.3 million) for the three months ended March 31, 2023 from S$152.4 million for the three months ended March 31, 2022 primarily driven by a 23.2% increase in revenue from sales and digital marketing services followed by a 9.2% increase in revenue from omnichannel CX solutions services rendered, partially offset by a 17.3% decrease in revenue from content, trust and safety services.
The following table sets forth our service provided by amount for the three months ended March 31, 2023 and 2022.
| For the three months ended March 31, | ||||
| 2023 | 2022 | |||
| US$’000 | S$’000 | S$’000 | ||
| Revenue by service | ||||
| Omnichannel CX solutions* | 73,642 | 97,723 |
| 89,505 |
| Sales and digital marketing | 33,167 | 44,012 |
| 35,710 |
| Content, trust and safety* | 16,452 | 21,832 |
| 26,408 |
| Other service fees # | 1,040 | 1,380 |
| 800 |
| Total revenue | 124,301 | 164,947 |
| 152,423 |
* During the second quarter ended June 30, 2022, we renamed our “content monitoring and moderation” services as “content, trust and safety” services and reclassified certain of our revenue from our omnichannel CX solution services and our other service fees under 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 2.1% to S$106.1 million (US$79.9 million) from S$103.9 million for the same period of 2022 primarily due to higher employee headcount and wage adjustments. This was partially offset by a reversal of share-based payment expense as certain performance share awards are not expected to vest. Our average number of employees in the first quarter of 2023 increased by 21.6% compared to the same period of 2022 driven by higher net business volumes of several existing campaigns and new campaign launches over the course of 2022 and the first quarter of 2023. The reversal of the abovementioned share-based payment expense resulted in a reduction in employee benefits expense of S$7.0 million (US$5.3 million).
Depreciation and Amortization Expense. Our depreciation and amortization expense increased by 17.8% to S$11.3 million (US$8.5 million) from S$9.6 million for the same period of 2022 primarily due to our office space expansion in Malaysia, Thailand, Korea and Spain and depreciation and amortization expense arising from our acquisition on October 13, 2022 of our Hong Kong associated company, which then became a wholly-owned subsidiary.
Rental and Maintenance Expense. Our rental and maintenance expense increased by 49.6% to S$3.4 million (US$2.6 million) from S$2.3 million for the same period of 2022 primarily due to the setting up of greenfield sites in Brazil, Türkiye and Vietnam. In addition, our rental and maintenance expense increased to support the expansion in volumes of certain existing key clients’ campaigns in the Philippines, Singapore and Malaysia that required the need for additional technology devices and equipment.
Recruitment Expense. Our recruitment expense increased by 8.4% to S$3.0 million (US$2.3 million) from S$2.8 million for the same period of 2022 primarily due to increased hiring activities to support the campaigns requirements in a few of our sites.
Transport and Travelling Expense. Our transport and travelling expense increased by 141.6% to S$0.5 million (US$0.3 million) from S$0.2 million for the same period of 2022 mainly due to increased operational and corporate travel.
Telecommunication and Technology Expense. Our telecommunication and technology expense increased by 26.6% to S$3.3 million (US$2.5 million) from S$2.6 million for the same period of 2022 primarily due to an increase in software subscription and outsourced IT services.
Interest Expense. The decrease in our interest expense was not significant.
Other Operating Expense. Our other operating expense increased by 160.
Contacts
For enquiries, please contact:
Investors / Analysts: Jason Lim
lim.jason@tdcx.com
Media: Eunice Seow
eunice.seow@tdcx.com
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