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TDCX Reports 19.6% Revenue Growth for Full Year 2022

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 Income1,4, 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 EBITDA margin, Adjusted Net Income, Adjusted Net Income margin, 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 "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 13.3% to S$25.0 million (US$18.6 million) from S$28.8 million for the same period of 2021.

Exchange differences on translation of foreign operations. Exchange differences on translation of foreign operations recognized in other comprehensive income increased by 472.9% to a loss of S$16.2 million (US$12.0 million) from S$2.8 million for the same period of 2021 primarily due to the strengthening of the Singapore Dollar against the functional currencies of the foreign operations.

Total Comprehensive Income for the Period. As a result of the foregoing, our total comprehensive income for the period decreased by 62.9% to S$9.8 million (US$7.3 million) from S$26.3 million for the same period of 2021.

Share Repurchase Program

On March 14, 2022, we announced that the board of directors had approved a US$30.0 million share repurchase program. The share repurchase program commenced on March 14, 2022. The repurchase program has no expiration date and may be suspended, modified or discontinued at any time without prior notice. We expect to fund repurchases under this program with our existing cash balance.

Our proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades, and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations and its insider trading policy. Our board of directors will review the share repurchase program periodically and may authorize adjustment of its terms and size. We did not make any repurchase of ADSs in the year ended December 31, 2021.

From October 1, 2022 to March 6, 2023, no share repurchases were made.

Service Segment Reclassification

In the second quarter of 2022, we renamed our “content monitoring and moderation” services as “content, trust and safety” services. The change reflects the industry’s broader view that content moderation services are part of a larger group of services that includes other trust and safety related services and helps enhance our ability to track our performance.

Our content, trust and safety services comprise content monitoring and moderation services, trust and safety services and data annotation services. Content monitoring and moderation service involves the review of content submission for violation of terms of use or non-compliant with the specifications and guidelines provided by our clients. Trust and safety services entails our dedicated and trained resources in assisting our clients to verify, detect and prevent incidences of fraudulent use of clients’ tools so as to promote users’ confidence in using our clients’ platforms and tools. Data annotation services provided by us serves to support the development of our clients’ efforts in machine learning and automation initiatives and projects.

Revenue for trust and safety related services that were previously classified under omnichannel CX solutions and other service fees respectively, which can currently be reasonably identified and quantified, will now be reported as content, trust and safety services.

Reclassifications and comparative figures

In prior periods, we reported foreign exchange gains or losses on a net basis under “other operating expenses” line item. Commencing from the third quarter of 2022, foreign exchange gains for the relevant quarter is reported under “other operating income” line item while foreign exchange losses for the relevant quarter is reported under “other operating expenses” line item. Accordingly, reclassifications relating to foreign exchange gains and losses have been made to prior period’s financial statements to enable comparability with the current period’s financial statements and therefore, certain line items have been amended in the unaudited condensed interim consolidated statement of profit or loss and other comprehensive income. Comparative figures have been adjusted to conform to the current period’s presentation. The items were reclassified as follows:

Previously reported

After reclassification

 

S$’000

S$’000

For the year ended December 31, 2021:

 

 

Other operating income

6,315

8,191

Other operating expenses

11,126

13,002

NON-IFRS FINANCIAL MEASURES

EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin, Adjusted EPS, revenue at constant currency and revenue growth at constant currency are non-IFRS financial measures. TDCX monitors EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin, Adjusted EPS, revenue at constant currency and revenue growth at constant currency because they assist the Company in comparing its operating performance on a consistent basis by removing the impact of items not directly resulting from its core operations.

EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin

“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 expenses, 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.

For the Three Months ended December 31,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Revenue

131,393

 

176,671

 

 

154,763

 

 

Profit for the period and net profit margin

18,601

 

25,010

 

14.2

%

28,846

 

18.6

%

Adjustments for:

 

 

 

 

 

Depreciation expense

7,937

 

10,672

 

6.0

%

9,605

 

6.2

%

Income tax expenses

5,914

 

7,952

 

4.5

%

8,550

 

5.5

%

Interest expense

408

 

549

 

0.3

%

1,964

 

1.3

%

Interest income

(1,061

)

(1,426

)

(0.8

%)

(251

)

(0.2

%)

EBITDA and EBITDA margin

31,799

 

42,757

 

24.2

%

48,714

 

31.4

%

Adjustment:

 

 

 

 

 

Equity-settled share-based payment expense

3,058

 

4,112

 

2.3

%

5,204

 

3.4

%

Adjusted EBITDA and Adjusted EBITDA margin

34,857

 

46,869

 

26.5

%

53,918

 

34.8

%

 

For the Full Year ended December 31,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Revenue

493,916

 

664,120

 

 

 

555,198

 

 

Profit for the year and net profit margin

78,044

 

104,938

 

15.8

%

 

103,842

 

18.7

%

Adjustments for:

 

 

 

 

 

 

Depreciation expense

29,549

 

39,731

 

6.0

%

 

39,853

 

7.2

%

Income tax expenses

27,554

 

37,049

 

5.6

%

 

28,237

 

5.1

%

Interest expense

1,440

 

1,936

 

0.3

%

 

8,414

 

1.5

%

Interest income

(2,490

)

(3,348

)

(0.5

%)

 

(544

)

(0.1

%)

EBITDA and EBITDA margin

134,097

 

180,306

 

27.1

%

 

179,802

 

32.4

%

Adjustment:

 

 

 

 

 

 

Equity-settled share-based payment expense

14,476

 

19,465

 

2.9

%

 

5,204

 

0.9

%

Adjusted EBITDA and Adjusted EBITDA margin

148,573

 

199,771

 

30.1

%

 

185,006

 

33.3

%

Adjusted Net Income and Adjusted Net Income margin

“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.

For the Three Months ended December 31,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Profit for the period and net profit margin

18,601

25,010

14.2

%

 

28,846

18.6

%

Adjustment for:

 

 

 

 

 

 

Equity-settled share-based payment expense

3,058

4,112

2.3

%

 

5,204

3.4

%

Adjusted Net Income and Adjusted Net Income margin

21,659

29,122

16.5

%

 

34,050

22.0

%

For the Full Year ended December 31,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Profit for the year and net profit margin

78,044

104,938

15.8

%

 

103,842

18.7

%

Adjustment for:

 

 

 

 

 

 

Equity-settled share-based payment expense

14,476

19,465

2.9

%

 

5,204

0.9

%

Adjusted Net Income and Adjusted Net Income margin

92,520

124,403

18.7

%

 

109,046

19.6

%

Adjusted EPS

“Adjusted EPS” represents earnings available to shareholders excluding the impact of equity-settled share-based payment expense. Adjusted EPS is calculated as earnings available to shareholders excluding the impact of equity-settled share-based payment expense divided by the diluted weighted-average number of shares outstanding.

For the Three Months ended December 31,

 

 

2022

 

2021

 

Amount

Per Share

Amount

Per Share

 

Amount

Per Share

 

US$’000

US$

S$’000

S$

 

S$’000

S$

Earnings available to shareholders and EPS

18,601

0.13

25,010

0.17

 

28,846

0.20

Adjustments for:

 

 

 

 

 

 

 

Equity-settled share-based payment expense

3,058

0.02

4,112

0.03

 

5,204

0.04

Earnings available to shareholders after adjustments and Adjusted EPS

21,659

0.15

29,122

0.20

 

34,050

0.24

 

For the Full Year ended December 31,

 

 

2022

 

2021

 

Amount

Per Share

Amount

Per Share

 

Amount

Per Share

 

US$’000

US$

S$’000

S$

 

S$’000

S$

Earnings available to shareholders and EPS

78,043

0.54

104,936

0.72

 

103,841

0.81

Adjustments for:

 

 

 

 

 

 

 

Equity-settled share-based payment expense

14,476

0.10

19,465

0.14

 

5,204

0.04

Earnings available to shareholders after adjustments and Adjusted EPS

92,519

0.64

124,401

0.86

 

109,045

0.85

Revenue at Constant Currency and Revenue Growth at Constant Currency

Revenue at constant currency, which is revenue adjusted for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Revenue at constant currency is calculated by translating the revenue of our local subsidiaries in each period in the respective local functional currencies to TDCX Inc.’s and its consolidated subsidiaries’ (together, the “Group”) 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). Revenue growth at constant currency means the period-over-period change in revenue at constant currency compared against revenue in the prior period.

 

For the Full Year Ended

December 31,

 

Revenue

growth as

reported

Foreign

exchange

impact

Revenue

growth at

constant

currency

2022

2021

 

 

 

 

 

S$’000

S$’000

 

 

 

 

Revenue

664,120

555,198

 

19.6%

3.8%

23.4%

The Company has 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 the Company’s control or not readily predictable, such as currency exchange movements over the course of an entire year.

The Company uses revenue at constant currency and revenue growth at constant currency, which are supplemental non-IFRS financial measures, to provide better comparability of revenue trends period-over-period (without the impact of fluctuations in foreign currency exchange rates) because it is a global company that transacts business in multiple currencies and reports financial information in the Group’s functional reporting currency. Foreign currency exchange rate fluctuations affect the amounts reported by the Company in the Group’s functional reporting currency with respect to its foreign revenues. Generally, when the Group’s functional reporting currency dollar either strengthens or weakens against other currencies, revenue at constant currency rates and revenue growth at constant currency rates will be higher or lower than revenue and revenue growth reported at actual exchange rates.

The Company believes that non-IFRS financial measures such as EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin, Adjusted EPS, revenue at constant currency and revenue growth at constant currency help us to identify underlying trends in our operating results, enhancing our understanding of past performance and future prospects.

While the Company believes that such non-IFRS financial measures provide useful information to investors in understanding and evaluating the Company’s results of operations in the same manner as its management, the Company’s use of such non-IFRS financial measures have limitations as analytical tools and you should not consider these in isolation or as a substitute for analysis of the Company’s results of operations or financial condition as reported under IFRS.

TDCX’s non-IFRS financial measures do not reflect all items of income and expense that affect the Company’s operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non-IFRS measures may differ from the non-IFRS information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-IFRS financial measures to the nearest IFRS performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the company’s financial information in its entirety and not rely on any single financial measure.

The translation of Singapore Dollar amounts into United States Dollar amounts 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.

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

For the Full Year ended December 31,

2022

2021

US$’000

S$’000

S$’000

Revenue

493,916

664,120

555,198

Employee benefits expense

(324,520)

(436,350)

(339,683)

Depreciation expense

(29,549)

(39,731)

(39,853)

Rental and maintenance expense

(7,422)

(9,980)

(9,832)

Recruitment expense

(10,562)

(14,201)

(10,884)

Transport and travelling expense

(1,217)

(1,637)

(1,461)

Telecommunication and technology expense

(8,792)

(11,822)

(8,826)

Interest expense

(1,440)

(1,936)

(8,414)

Other operating expense

(16,684)

(22,434)

(13,002)

Share of profit from an associate

103

139

101

Interest income

2,490

3,348

544

Other operating income

9,275

12,471

8,191

Profit before income tax

105,598

141,987

132,079

Income tax expenses

(27,554)

(37,049)

(28,237)

Profit for the period

78,044

104,938

103,842

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

(10,734)

(14,432)

(6,500)

Total comprehensive income for the period

67,997

91,430

97,618

 

 

 

 

Profit attributable to:

 

 

 

- Owners of the Group

78,043

104,936

103,841

- Non-controlling interests

1

2

1

 

78,044

104,938

103,842

 

 

 

 

Total comprehensive income attributable to:

 

 

 

- Owners of the Group

67,996

91,428

97,617

- Non-controlling interests

1

2

1

 

67,997

91,430

97,618

 

 

 

Basic earnings per share (in US$ or S$) (1)

0.54

0.72

0.81

Diluted earnings per share (in US$ or S$) (1)

0.54

0.72

0.81

_______________________________

1 Basic and diluted earnings per share

For the Full Year ended

December 31,

 

2022

2021

Weighted average number of ordinary shares for the purposes of basic earnings per share

145,298,557

128,803,824

Weighted average number of ordinary shares for the purposes of diluted earnings per share

145,298,557

128,830,134

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.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of December 31, 2022

As of

December

31, 2021

US$’000

S$’000

S$’000

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

289,380

 

389,100

 

313,147

Fixed and pledged deposits

4,872

 

6,551

 

8,860

Trade receivables

66,048

 

88,808

 

92,561

Contract assets

43,736

 

58,808

 

49,365

Other receivables

11,814

 

15,885

 

13,220

Financial assets measured at fair value through profit or loss

22,145

 

29,776

 

23,983

Income tax receivable

263

 

354

 

17

Total current assets

438,258

 

589,282

 

501,153

 

 

 

 

 

Non-current assets

 

 

 

 

 

Pledged deposits

434

 

584

 

456

Goodwill and intangible assets1

 

2,175

 

2,924

 

Other receivables

3,733

 

5,019

 

4,771

Plant and equipment

30,710

 

41,292

 

39,709

Right-of-use assets

26,206

 

35,236

 

33,160

Deferred tax assets

2,575

 

3,463

 

1,943

Investment in an associate

 

 

318

Total non-current assets

65,833

 

88,518

 

80,357

Total assets

504,091

 

677,800

 

581,510

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Other payables

36,980

 

49,723

 

39,096

Bank loans

 

 

13,847

Lease liabilities

13,252

 

17,818

 

14,550

Provision for reinstatement cost

3,928

 

5,282

 

3,663

Income tax payable

12,316

 

16,560

 

14,715

Total current liabilities

66,476

 

89,383

 

85,871

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Bank loans

 

 

2,963

Lease liabilities

15,353

 

20,644

 

21,361

Provision for reinstatement cost

2,657

 

3,572

 

4,384

Defined benefit obligation

1,113

 

1,497

 

1,718

Deferred tax liabilities

634

 

852

 

1,507

Total non-current liabilities

19,757

 

26,565

 

31,933

 

 

 

 

 

Capital, reserves and non-controlling interests

 

 

 

 

 

Share capital

14

 

19

 

19

Reserves

163,313

 

219,590

 

227,181

Retained earnings

254,515

 

342,221

 

236,486

Equity attributable to owners of the Group

417,842

 

561,830

 

463,686

Non-controlling interests

16

 

22

 

20

Total equity

417,858

 

561,852

 

463,706

 

 

 

 

 

Total liabilities and equity

504,091

 

677,800

 

581,510

The translation of Singapore Dollar amounts into United States Dollar amounts for the unaudited condensed interim consolidated statement of financial position 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.

1 On October 13, 2022, the Group acquired all remaining shares of its associate, Teledirect Hong Kong Limited (subsequently renamed TDCX (HK) Limited), which then became a wholly-owned subsidiary of the Group on that date. Based on preliminary purchase price allocation, a provisional amount of goodwill and intangible assets was recognized by the Group.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the Full Year ended December 31,

2022

2021

US$’000

S$’000

S$’000

Operating activities

Profit before income tax

105,598

 

141,987

 

132,079

 

Adjustments for:

 

 

 

Depreciation expense

29,549

 

39,731

 

39,853

 

Gain on early termination of right-of-use assets

 

 

(29

)

Reversal of allowance on trade and other receivables

 

 

(2

)

Equity-settled share-based payment expense

14,476

 

19,465

 

5,204

 

Provision for office reinstatement cost

884

 

1,188

 

(7

)

Bank loan transaction cost

37

 

50

 

416

 

Interest income

(2,490

)

(3,348

)

(544

)

Interest expense

1,440

 

1,936

 

8,414

 

Retirement benefit service cost

560

 

753

 

619

 

Fixed assets written off

13

 

17

 

 

Loss on disposal of plant and equipment

1

 

1

 

211

 

Share of profit from an associate

(103

)

(139

)

(101

)

Fair value gain on previously held equity interest

(103

)

(139

)

 

Operating cash flows before movements in working capital

149,862

 

201,502

 

186,113

 

 

 

 

Trade receivables

581

 

781

 

(57,003

)

Contract assets

(9,372

)

(12,601

)

(4,000

)

Other receivables

(4,954

)

(6,661

)

(672

)

Other payables

12,703

 

17,081

 

4,542

 

Cash generated from operations

148,820

 

200,102

 

128,980

 

 

 

 

Interest received

2,490

 

3,348

 

544

 

Income tax paid

(28,365

)

(38,140

)

(25,703

)

Income tax refunded

31

 

42

 

4

 

Net cash from operating activities

122,976

 

165,352

 

103,825

 

 

 

 

Investing activities

 

 

 

Purchase of plant and equipment

(18,792

)

(25,268

)

(20,648

)

Proceeds from disposal of plant and equipment

103

 

138

 

126

 

Payment for restoration of office

 

 

(428

)

Decrease/ (Increase) in fixed deposits

1,299

 

1,746

 

(1,255

)

Increase in pledged deposits

 

 

1,888

 

Dividend income from associate

120

 

161

 

13

 

Acquisition of a subsidiary, net of cash acquired

(3,134

)

(4,214

)

 

Investment in financial assets measured at fair value through profit or loss

(2,255

)

(3,032

)

(23,835

)

Net cash used in investing activities

(22,659

)

(30,469

)

(44,139

)

 

 

 

Financing activities

 

 

 

Dividends paid to non-controlling interests

(30

)

(40

)

(176

)

Drawdown of bank loan

 

 

252,658

 

Distribution to founder

 

 

(252,033

)

Repayment of lease liabilities

(14,673

)

(19,729

)

(19,632

)

Interest paid

(160

)

(215

)

(6,847

)

Repayment of bank loan

(12,531

)

(16,849

)

(276,564

)

Bank loan transaction cost paid

 

 

(361

)

Repurchase of American Depositary Shares

(10,129

)

(13,620

)

 

Proceeds from issuance of shares

1

 

1

 

502,406

 

Proceeds from capital call on non-fully paid-up share capital from non-controlling interests

 

 

193

 

Net cash (used in)/ generated from financing activities

(37,522

)

(50,452

)

199,644

 

 

 

 

 

Net increase in cash and cash equivalents

62,795

 

84,431

 

259,330

 

Effect of foreign exchange rate changes on cash held in foreign currencies

(6,307

)

(8,478

)

(5,990

)

Cash and cash equivalents at beginning of period

232,892

 

313,147

 

59,807

 

Cash and cash equivalents at end of period

289,380

 

389,100

 

313,147

 

The translation of Singapore Dollar amounts into United States Dollar amounts for the unaudited condensed interim consolidated statement of cash flows 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.

 

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