TDCX Reports Strong Revenue Growth for Q3 2022; Reiterates 2022 Guidance


SINGAPORE–()–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 third quarter ended September 30, 2022.

Third Quarter 2022 Financial Highlights

  • Total revenue of US$120.5 million, up 16.1% year-on-year
  • Profit for the period was US$21.6 million, up 2.3% year-on-year
  • Adjusted Net Income4, which excludes the impact of share-based compensation for a like-for-like comparison, was US$24.2 million, up 15.0% year-on-year
  • Year-to-date Net Cash from Operating Activities of US$90.8 million, up 53.1% year-on-year

Mr. Laurent Junique, Chief Executive Officer and Founder of TDCX, said, “We rounded off this quarter with a strong set of results, fueled by our solid execution capabilities. Our global expansion plans continue unabated with the addition of two new campuses, one in Iloilo, Philippines and another in Istanbul, Türkiye. This brings us to a total of 27 campuses globally as we continue building our network. We also see greater contribution from our four newer geographies, namely Colombia, India, Romania and South Korea, making up close to 10 per cent of the year-on-year growth in revenue for Q3 2022 against Q3 2021.

“This quarter, we are proud to have had our industry-leading practices recognized. We were named a leader by global technology research and advisory firm, ISG, in their ISG Provider Lens™ Contact Center – Customer Experience Services Singapore/Malaysia 2022 report. The report acknowledged our capabilities, positioning us at the top of the quadrant.

“On the ESG front, we deepened our commitment to bringing positive transformation to the community with the launch of the TDCX Foundation. Through the Foundation, we will be able to help drive greater social impact for disadvantaged communities.”

(US$ million, except for %)2

Q3 2021

Q3 2022

 

% Change

Revenue

103.8

 

120.5

 

+16.1%

Profit for the period

21.1

 

21.6

 

+2.3%

Adjusted Net Income4

21.1

 

24.2

 

+15.0%

Adjusted EBITDA1,3

36.9

 

38.3

 

+3.9%

Adjusted EBITDA Margins1,3 (%)

35.5

%

31.8

%

 

Business Highlights

Strong Client Additions

  • Signed up 31 new logos since the start of the year, 55% higher than the 20 logos for the same period in 2021
  • 72 clients with campaigns that have been launched as of September 30, 2022, a 50% increase as compared with 48 launched clients as of September 30, 2021
  • Revenue contribution from new economy5 clients stood at 93% for 9M 2022

ESG Efforts

  • Launched the TDCX Foundation as part of our commitment to support disadvantaged communities
  • Supported the launch of Google Cloud’s Point Carbon Zero Program to catalyze the incubation and adoption of climate fintech solutions in Asia over the next three years
  • Recognized as one of the Circle of Excellence Awardees for the Sustainability Company of the Year at the Asia CEO Awards 2022

Full Year 2022 Outlook Reiterated at the Mid-point; Range Narrowed

For the full year 2022, TDCX expects its financial results to be:

2022 Outlook

Revenue (in millions)

S$655m – S$670m6

(Midpoint unchanged at S$662.5m;

Range narrowed from S$650m – S$675m)

Revenue growth (YoY)

Range: 18.0% – 20.7%

(Midpoint unchanged at 19.3%;

Range narrowed from 17.1% – 21.6%)

Adjusted EBITDA margin1,3

Approximately 30.0% – 32.0%

(unchanged)

_____________________

1 Adjusted EBITDA or Adjusted EBITDA margins 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$1.4340, being the approximate rate in effect as of September 30, 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 Performance Share Plan. “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 “New economy” refers to high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth.

6 Using the FX rate of US$1 = S$1.4340, being the approximate rate in effect as of Sep 30, 2022, this equates to US$457m to US$467m. Using the FX rate of US$1 = US$1.3918, being the approximate rate in effect as of Jun 30, 2022, this equates to US$471m to US$481m.

Webcast and Conference Call Information

The TDCX senior management will host a conference call to discuss the third 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:

November 22, 2022, 7:30 AM (U.S. Eastern Time)

November 22, 2022, 8:30 PM (Singapore / Hong Kong Time)

Webcast link:

https://events.q4inc.com/earnings/TDCX/Q3-2022

Dial in numbers:

USA Toll Free: +1 855 9796 654

United States (Local): +1 646 664 1960

 

Singapore: +65 3163 4602

Hong Kong: +852 580 33 413

 

UK Toll Free +44 0800 640 6441

All other locations: +44 20 3936 2999

Participant Access Code:

501559

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 17,400 employees across 27 campuses globally, specifically Singapore, Malaysia, Thailand, Philippines, Mainland China, Hong Kong, South Korea, Japan, India, Romania, Spain, Colombia and Türkiye. 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$1.4340 to US$1.00, the approximate rate in effect as of September 30, 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 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 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. We believe that EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin helps us to identify underlying trends in our operating results, enhancing our understanding of past performance and future prospects.

“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.

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

September 30,

2022

2021

 

US$’000

S$’000

S$’000

Revenue

 

120,481

 

172,770

 

148,798

 

Employee benefits expense

 

(78,330

)

(112,325

)

(86,583

)

Depreciation expense

 

(7,118

)

(10,207

)

(10,409

)

Rental and maintenance expense

 

(1,847

)

(2,648

)

(2,063

)

Recruitment expense

 

(3,105

)

(4,452

)

(3,029

)

Transport and travelling expense

 

(269

)

(386

)

(452

)

Telecommunication and technology expense

 

(2,148

)

(3,080

)

(2,413

)

Interest expense

 

(299

)

(429

)

(2,703

)

Other operating expense

 

(3,898

)

(5,590

)

(3,972

)

Share of profit from an associate

 

43

 

61

 

35

 

Interest income

 

860

 

1,233

 

119

 

Other operating income

 

4,725

 

6,775

 

2,558

 

Profit before income tax

 

29,095

 

41,722

 

39,886

 

Income tax expenses

 

(7,531

)

(10,799

)

(9,653

)

Profit for the period

 

21,564

 

30,923

 

30,233

 

Item that may be reclassified subsequently to profit or loss:

 

 

 

 

Exchange differences on translation of foreign operations

 

(4,797

)

(6,880

)

(2,523

)

Total comprehensive income for the period

 

16,767

 

24,043

 

27,710

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

– Owners of TDCX Inc.

 

21,563

 

30,922

 

30,232

 

– Non-controlling interests

 

1

 

1

 

1

 

 

 

21,564

 

30,923

 

30,233

 

 

 

 

 

 

Total comprehensive income attributable to:

 

 

 

 

– Owners of TDCX Inc.

 

16,766

 

24,042

 

27,709

 

– Non-controlling interests

 

1

 

1

 

1

 

 

 

16,767

 

24,043

 

27,710

 

 

 

 

 

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

 

0.14

 

0.21

 

0.24

 

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

 

0.14

 

0.21

 

0.24

 

 

_______________________________

(1) Basic and diluted earnings per share

For the three months ended

September 30,

 

2022

2021

Weighted average number of ordinary shares for the purposes of

basic earnings per share

144,943,516

123,500,000

Weighted average number of ordinary shares for the purposes of

diluted earnings per share

144,943,516

123,500,000

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$1.4340 to US$1.00, the approximate rate of exchange at September 30, 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 September 30, 2022 and 2021

Revenue. Our revenue increased by 16.1% to S$172.8 million (US$120.5 million) for the three months ended September 30, 2022 from S$148.8 million for the three months ended September 30, 2021 primarily due to a 13.0% increase in revenue from providing omnichannel Customer Experience (“CX”) solutions, and a 32.2% increase in revenue from providing sales and digital marketing services.

  • Our revenues from omnichannel CX solutions increased by 13.0% to S$100.9 million (US$70.4 million) from S$89.3 million for the same period of 2021 primarily due to higher business volumes driven by the expansion of existing campaigns by clients in the fintech and technology verticals. In addition, business volumes of our key travel and hospitality clients continue to gain recovery momentum following the reopening of borders during the first half of 2022.
  • Our revenues from sales and digital marketing services increased by 32.2% to S$42.8 million (US$29.8 million) from S$32.4 million for the same period of 2021 primarily due to the expansion of existing campaigns for our key digital advertising and media clients.
  • Our revenues from content, trust and safety services increased by 6.4% to S$28.1 million (US$19.6 million) from S$26.4 million for the same period of 2021 primarily due to an increase in business volumes.
  • Our revenues from our other service fees increased by 38.5% to S$1.0 million (US$0.7 million) from S$0.7 million for the same period of 2021 primarily due to higher business volumes from existing clients and higher contribution from new clients.

The following table sets forth our service provided by amount for the three months ended September 30, 2022 and 2021.

For the three months ended

September 30,

2022

2021

US$’000

S$’000

S$’000

Revenue by service

Omnichannel CX solutions *

70,364

100,902

 

89,320

Sales and digital marketing

29,846

42,799

 

32,371

Content, trust and safety *

19,566

28,058

 

26,377

Other service fees * #

705

1,011

 

730

Total revenue

120,481

172,770

 

148,798

* 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 revenues from our omnichannel CX solutions services and our other service fees into content, trust and safety services. Accordingly, we reclassified our segment revenues 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 29.7% to S$112.3 million (US$78.3 million) from S$86.6 million for the same period of 2021 due to higher employee count, employee wage adjustments pursuant to dynamics of the talent markets that we operate in and cost of living inflation, and share-based payment expense arising from the implementation of our performance share plan in November 2021. Our average number of employees in the third quarter of 2022 increased 24.5% compared to the same period of 2021 as a result of business volumes expansion of current campaigns over the course of 2022, and staffing requirements of new campaign launches in the first half of 2022.

Depreciation Expense. Our depreciation expense decreased slightly by 1.9% to S$10.2 million (US$7.1 million) from S$10.4 million for the same period of 2021 primarily due to certain office renovation assets in Singapore, Thailand and Philippines being fully depreciated during the period. These were partially offset by depreciation on capital expenditures invested in new and expansion capacities to support the growth of our business.

Rental and Maintenance Expense. Our rental and maintenance expense increased by 28.4% to S$2.6 million (US$1.8 million) from S$2.1 million for the same period of 2021 primarily due to rental expenses incurred in new site set up in Korea. In addition, we had to increase our leasing of computer equipment to cope with the growth in our key clients’ campaigns in the Philippines, Thailand and Malaysia.

Recruitment Expense. Our recruitment expense expanded by 47.0% to S$4.5 million (US$3.1 million) from S$3.0 million for the same period of 2021 primarily due to accelerated hiring activities thereby raising hiring costs to support the campaign needs in our Malaysia and Singapore offices.

Transport and Travelling Expense. Our transport and travelling expense decreased by 14.6% to S$0.4 million (US$0.3 million) from S$0.5 million for the same period of 2021 mainly due to lower accommodation and transportation expenses.

Telecommunication and Technology Expense. Our telecommunication and technology expense increased by 27.6% to S$3.1 million (US$2.1 million) from S$2.4 million for the same period of 2021 primarily in tandem with business volume expansion of our existing campaigns and new projects’ launches.

Interest Expense. Our interest expense decreased by 84.1% to S$0.4 million (US$0.3 million) from S$2.7 million for the same period of 2021 primarily due to reduced bank borrowings during the period.

Other Operating Expense. Our other operating expense increased by 40.7% to S$5.6 million (US$3.9 million) from S$4.0 million for the same period of 2021 primarily due to additional fees incurred in the Philippines arising from the unit exceeding the work-from-home cap imposed by the local fiscal incentive administrative body, and increased legal, compliance and professional fees.

Share of Profit from an Associate. Our share of profit from an associate was insignificant for the three months ended September 30, 2022 and 2021.

Interest Income. Our interest income increased by 936.1% to S$1.2 million (US$0.9 million) from S$0.1 million for the same period of 2021 primarily due to an increase in interest-bearing deposits.

Other Operating Income. Our other operating income increased by 164.9% to S$6.8 million (US$4.7 million) from S$2.6 million for the same period of 2021 primarily due to foreign exchange gains recognized.

Profit Before Income Tax. As a result of the foregoing, our profit before income tax increased by 4.6% to S$41.7 million (US$29.1 million) from S$39.9 million for the corresponding period of 2021.

Income Tax Expenses. Our income tax expenses increased by 11.9% to S$10.8 million (US$7.5 million) from S$9.7 million for the same period of 2021. The higher income tax expenses were mainly due to higher taxes from our subsidiary in Malaysia as a result of a one-off “prosperity tax” enacted by the local government for fiscal 2022 for the Malaysian operations, suspension of the income tax break previously availed to the Philippines unit arising from the unit exceeding the work-from-home cap imposed by the local fiscal incentive administrative body and higher taxable profits of our subsidiaries in the Philippines and Thailand.

Profit for the Period. As a result of the foregoing, our profit for the period increased by 2.3% to S$30.9 million (US$21.6 million) from S$30.2 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 July 1, 2022 to November 21, 2022, we purchased 352,489 ADSs at a cost of US$3.0 million.

Warrant Agreement with Airbnb

On September 2, 2022, we entered into a warrant agreement with Airbnb Ireland Unlimited Company (“Airbnb”), whereby TDCX Inc. granted Airbnb warrants to purchase up to 490,000 of the TDCX Inc.’s American Depositary Shares subject to vesting, adjustment and other terms and conditions set forth therein. The vesting of the warrants is subject to satisfaction of certain fee milestones with respect to services provided to Airbnb under the Master Services Agreement which commenced August 1, 2021.

Subsequent Event

On October 13, 2022, we completed the restructuring of our Hong Kong associated company into a wholly-owned subsidiary. This was funded from our existing cash balance and we believe that such a restructuring enables TDCX Inc. and its subsidiaries (the “Group”) to better tap into opportunities in the Greater China area. The financial impact is not expected to be material.

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 are comprised of content moderating and monitoring services, trust and safety services and data annotation services. Content moderation and monitoring 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 three months ended September 30,

2021:

Other operating income

1,020

2,558

Other operating expenses

(2,434)

(3,972)

 

 

 

For the nine months ended September 30,

2021:

 

 

Other operating income

3,764

5,640

Other operating expenses

(8,578)

(10,454)

NON-IFRS FINANCIAL MEASURES

EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin and Adjusted EPS are non-IFRS financial measures. TDCX monitors EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin and Adjusted EPS 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 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 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 September 30,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Revenue

120,481

 

172,770

 

 

 

148,798

 

 

Profit for the period and net profit

margin

21,564

 

30,923

 

17.9

%

 

30,233

 

20.3

%

Adjustments for:

 

 

 

 

 

 

Depreciation expense

7,118

 

10,207

 

5.9

%

 

10,409

 

7.0

%

Income tax expenses

7,531

 

10,799

 

6.3

%

 

9,653

 

6.5

%

Interest expense

299

 

429

 

0.2

%

 

2,703

 

1.8

%

Interest income

(860

)

(1,233

)

(0.7

%)

 

(119

)

(0.1

%)

EBITDA and EBITDA margin

35,652

 

51,125

 

29.6

%

 

52,879

 

35.5

%

Adjustment:

 

 

 

 

 

 

Equity-settled share-based

payment expense

2,676

 

3,837

 

2.2

%

 

 

 

Adjusted EBITDA and Adjusted EBITDA

margin

38,328

 

54,962

 

31.8

%

 

52,879

 

35.5

%

For the nine months ended September 30,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Revenue

339,923

 

487,449

 

 

 

400,435

 

 

Profit for the period and net profit

margin

55,737

 

79,928

 

16.4

%

 

74,996

 

18.7

%

Adjustments for:

 

 

 

 

 

 

Depreciation expense

20,264

 

29,059

 

6.0

%

 

30,248

 

7.6

%

Income tax expenses

20,291

 

29,097

 

6.0

%

 

19,687

 

4.9

%

Interest expense

967

 

1,387

 

0.3

%

 

6,450

 

1.6

%

Interest income

(1,340

)

(1,922

)

(0.4

%)

 

(293

)

(0.1

%)

EBITDA and EBITDA margin

95,919

 

137,549

 

28.2

%

 

131,088

 

32.7

%

Adjustment:

 

 

 

 

 

 

Equity-settled share-based

payment expense

10,706

 

15,352

 

3.1

%

 

 

 

Adjusted EBITDA and Adjusted EBITDA

margin

106,625

 

152,901

 

31.4

%

 

131,088

 

32.7

%

Adjusted Net Income and Adjusted Net Income margin

“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.

For the three months ended September 30,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Profit for the period and net profit

margin

21,564

30,923

17.9

%

 

30,233

20.3

%

Adjustment for:

 

 

 

 

 

 

Equity-settled share-based payment

expense

2,676

3,837

2.2

%

 

 

Adjusted Net Income and Adjusted Net

Income margin

24,240

34,760

20.1

%

 

30,233

20.3

%

For the nine months ended September 30,

2022

2021

US$’000

S$’000

Margin

S$’000

Margin

Profit for the period and net profit margin

55,737

79,928

16.4

%

 

74,996

18.7

%

Adjustment for:

 

 

 

 

 

 

Equity-settled share-based payment

expense

10,706

15,352

3.1

%

 

 

Adjusted Net Income and Adjusted Net

Income margin

66,443

95,280

19.5

%

 

74,996

18.7

%

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 September 30,

 

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

21,563

0.14

30,922

0.21

 

30,232

0.24

Adjustments for:

 

 

 

 

 

 

 

Equity-settled share-based payment

expense

2,676

0.01

3,837

0.03

 

Earnings available to shareholders after

adjustments and Adjusted EPS

24,239

0.15

34,759

0.24

 

30,232

0.24

For the nine months ended September 30,

 

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

55,736

0.38

79,926

0.55

 

74,995

0.61

Adjustments for:

 

 

 

 

 

 

 

Equity-settled share-based payment

expense

10,706

0.07

15,352

0.11

 

Earnings available to shareholders after

adjustments and Adjusted EPS

66,442

0.45

95,278

0.66

 

74,995

0.61

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 and Adjusted EPS help us to identify underlying trends in our operating results, enhancing our understanding of past performance and future prospects.

While the Company believes that the 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 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 or 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$1.4340 to US$1.00, the approximate rate of exchange at September 30, 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 nine months ended September 30,

2022

2021

US$’000

S$’000

S$’000

Revenue

339,923

 

487,449

 

400,435

 

Employee benefits expense

(224,226

)

(321,540

)

(242,009

)

Depreciation expense

(20,264

)

(29,059

)

(30,248

)

Rental and maintenance expense

(5,084

)

(7,290

)

(7,740

)

Recruitment expense

(7,529

)

(10,797

)

(7,544

)

Transport and travelling expense

(677

)

(971

)

(985

)

Telecommunication and technology expense

(5,963

)

(8,551

)

(6,333

)

Interest expense

(967

)

(1,387

)

(6,450

)

Other operating expense

(9,039

)

(12,962

)

(10,454

)

Share of profit from an associate

94

 

135

 

78

 

Interest income

1,340

 

1,922

 

293

 

Other operating income

8,420

 

12,076

 

5,640

 

Profit before income tax

76,028

 

109,025

 

94,683

 

Income tax expenses

(20,291

)

(29,097

)

(19,687

)

Profit for the period

55,737

 

79,928

 

74,996

 

Item that may be reclassified subsequently to profit or loss:

 

 

 

Exchange differences on translation of foreign operations

1,219

 

1,747

 

(3,676

)

Total comprehensive income for the period

56,956

 

81,675

 

71,320

 

 

 

 

 

Profit attributable to:

 

 

 

– Owners of the Group

55,736

 

79,926

 

74,995

 

– Non-controlling interests

1

 

2

 

1

 

 

55,737

 

79,928

 

74,996

 

 

 

 

 

Total comprehensive income attributable to:

 

 

 

– Owners of the Group

56,955

 

81,673

 

71,319

 

– Non-controlling interests

1

 

2

 

1

 

 

56,956

 

81,675

 

71,320

 

 

 

 

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

0.38

 

0.55

 

0.61

 

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

0.38

 

0.55

 

0.61

 

_______________________________

  1. Basic and diluted earnings per share

For the nine months ended

September 30,

 

2022

2021

Weighted average number of ordinary shares for the purposes of basic

earnings per share

145,425,637

123,500,000

Weighted average number of ordinary shares for the purposes of diluted

earnings per share

145,425,637

123,500,000

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$1.4340 to US$1.00, the approximate rate of exchange at September 30, 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 September 30, 2022

As of

December 31,

2021

US$’000

S$’000

S$’000

ASSETS

 

 

 

 

 

 

Current assets

 

Cash and cash equivalents

269,485

 

386,441

 

313,147

Fixed and pledged deposits

4,633

 

6,644

 

8,860

Trade receivables

61,114

 

87,637

 

92,561

Contract assets

43,409

 

62,249

 

49,365

Other receivables

9,984

 

14,317

 

13,220

Financial assets measured at fair value through profit or

loss

19,436

 

27,871

 

23,983

Income tax receivable

23

 

33

 

17

Total current assets

408,084

 

585,192

 

501,153

 

 

 

 

 

Non-current assets

 

 

 

 

 

Pledged deposits

404

 

579

 

456

Other receivables

5,762

 

8,263

 

4,771

Plant and equipment

28,517

 

40,893

 

39,709

Right-of-use assets

22,149

 

31,761

 

33,160

Deferred tax assets

1,692

 

2,427

 

1,943

Investment in an associate

316

 

453

 

318

Total non-current assets

58,840

 

84,376

 

80,357

Total assets

466,924

 

669,568

 

581,510

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Other payables

37,136

 

53,253

 

39,096

Bank loans

381

 

547

 

13,847

Lease liabilities

11,411

 

16,363

 

14,550

Provision for reinstatement cost

2,369

 

3,397

 

3,663

Derivative financial liability

 

1,177

 

1,688

 

Income tax payable

12,160

 

17,437

 

14,715

Total current liabilities

64,634

 

92,685

 

85,871

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Bank loans

 

 

2,963

Lease liabilities

12,779

 

18,325

 

21,361

Provision for reinstatement cost

3,535

 

5,069

 

4,384

Derivative financial liability

 

2,578

 

3,697

 

Defined benefit obligation

1,519

 

2,178

 

1,718

Deferred tax liabilities

357

 

512

 

1,507

Total non-current liabilities

20,768

 

29,781

 

31,933

 

 

 

 

 

Capital, reserves and non-controlling interests

 

 

 

 

 

Share capital

13

 

19

 

19

Reserves

160,885

 

230,708

 

227,181

Retained earnings

220,609

 

316,353

 

236,486

Equity attributable to owners of the Group

381,507

 

547,080

 

463,686

Non-controlling interests

15

 

22

 

20

Total equity

381,522

 

547,102

 

463,706

 

 

 

 

 

Total liabilities and equity

466,924

 

669,568

 

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$1.4340 to US$1.00, the approximate rate of exchange at September 30, 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 CASH FLOWS

For the nine months ended September 30,

2022

2021

US$’000

S$’000

S$’000

Operating activities

Profit before income tax

76,028

 

109,025

 

94,683

 

Adjustments for:

 

 

 

Depreciation expense

20,264

 

29,059

 

30,248

 

Gain on early termination of right-of-use assets

 

 

(84

)

Reversal of allowance on trade and other receivables

 

 

(488

)

Changes in fair value of derivatives

 

 

193

 

Equity-settled share-based payment expense

10,706

 

15,352

 

 

Provision for reinstatement cost

694

 

995

 

(2

)

Bank loan transaction cost

29

 

41

 

464

 

Interest income

(1,340

)

(1,922

)

(293

)

Interest expense

967

 

1,387

 

6,450

 

Retirement benefit service cost

395

 

566

 

464

 

(Gain) / Loss on disposal of plant and equipment

(1

)

(1

)

155

 

Share of profit from an associate

(94

)

(135

)

(78

)

Operating cash flows before movements in working capital

107,648

 

154,367

 

131,712

 

 

 

 

Trade receivables

499

 

716

 

(22,526

)

Contract assets

(11,283

)

(16,180

)

(3,798

)

Other receivables

(1,672

)

(2,399

)

(4,117

)

Other payables

13,547

 

19,427

 

5,493

 

Cash generated from operations

108,739

 

155,931

 

106,764

 

 

 

 

Interest received

1,340

 

1,922

 

293

 

Income tax paid

(19,259

)

(27,617

)

(22,003

)

Net cash from operating activities

90,820

 

130,236

 

85,054

 

 

 

 

Investing activities

 

 

 

Purchase of plant and equipment

(13,599

)

(19,501

)

(18,268

)

Proceeds from sales of plant and equipment

35

 

50

 

106

 

Payment for restoration of office

 

 

(431

)

Increase in fixed deposits

1,210

 

1,735

 

645

 

Increase in pledged deposits

 

 

(12

)

Dividend income from associate

 

 

13

 

Investment in financial assets measured at fair value

through profit or loss

 

 

(23,754

)

Net cash used in investing activities

(12,354

)

(17,716

)

(41,701

)

 

 

 

Financing activities

 

 

 

Dividends paid

(29

)

(41

)

(176

)

Drawdown of bank loan

 

 

252,654

 

Distribution to founder

 

 

(252,033

)

Repayment of lease liabilities

(10,060

)

(14,426

)

(14,795

)

Interest paid

(148

)

(212

)

(5,104

)

Repayment of bank loan

(11,321

)

(16,234

)

(15,208

)

Repurchase of American Depositary Shares

(9,477

)

(13,590

)

 

Proceeds from issuance of shares

 

 

16

 

Net cash used in financing activities

(31,035

)

(44,503

)

(34,646

)

 

 

 

 

Net increase in cash and cash equivalents

47,431

 

68,017

 

8,707

 

Effect of foreign exchange rate changes on cash held in

foreign currencies

3,681

 

5,277

 

(1,631

)

Cash and cash equivalents at beginning of period

218,373

 

313,147

 

59,807

 

Cash and cash equivalents at end of period

269,485

 

386,441

 

66,883

 

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$1.4340 to US$1.00, the approximate rate of exchange at September 30, 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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