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, 2023.
Third Quarter 2023 Financial Highlights1
- Total revenue of US$119.8 million, down 5.4% year-on-year,
including a 5.3% point negative impact of foreign exchange rates
compared with the prior year period, and down 0.1% in constant
currency terms2
- Profit for the period of US$23.2 million, up 2.3% year-on-year,
primarily driven by cost optimization efforts, lower tax and higher
interest income
Mr. Laurent Junique, Chief Executive Officer and Founder of
TDCX, said, “Our focused approach to growing our business continues
to yield results. There remain bright spots in select sectors amid
market uncertainties. This quarter, we welcomed new clients
including a leading global airline based out of Asia and one of the
world’s most popular mobile messaging apps. Such wins are testament
to the sector expertise we have built in travel and hospitality and
social media platforms.
“We are also seeing results from our efforts to diversify our
client base. Our revenue from clients outside the top five has
increased 51 per cent year-on-year. I am confident that the steps
we have taken to enhance our value to our clients and to increase
our efficiency will position us strongly for the long term.”
(US$ million1, except for
%)
Q3 2022
Q3 2023
% Change
Revenue
126.6
119.8
-5.4%
(-0.1% on a constant currency
basis)2
Profit for the period
22.7
23.2
2.3%
Net profit margin (%)
17.9%
19.4%
EBITDA2
37.5
33.3
-11.0%
EBITDA Margins2
(%)
29.6%
27.8%
Adjusted EBITDA2, 3
36.7
33.3
-9.1%
Adjusted EBITDA Margins2,3
(%)
29.0%
27.8%
Adjusted Net Income2,3
22.8
23.3
2.2%
Q3 23 Business
Highlights
Continued strong client growth
- Client count4,5 up 31% year-on-year, bringing total client
count to 94 as of September 30, 2023, compared with 72 as of
September 30, 2022
- Newly launched clients include one of the world’s most popular
mobile messaging apps and a leading global airline based out of
Asia
Improved revenue diversification
- Revenue from clients outside the top five rose 51%
year-on-year5
- Revenue mix from top five clients lowered to 71% in Q3 23, from
82% in Q3 22
Contribution from new geographies
- Revenue from new geographies6 was five times in Q3 23 versus Q3
22
Full Year 2023 Outlook
For the full year 2023, TDCX expects its financial results to
be:
2023 Outlook
Revenue growth (YoY)
Range: 2% - 4%
(On a constant currency
basis2,7)
Adjusted EBITDA
margin1
Approximately 25% - 27%
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 FX rate of US$1 = S$1.3648, being the
approximate rate in effect as of September 30, 2023, assumed in
converting financials from SG dollar to U.S. dollar.
2 For a discussion of the use of non-IFRS financial measures,
see “Non-IFRS Financial Measures”.
3 The reported amounts for Adjusted EBITDA and Adjusted Net
Income for the three months ended September 30, 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 for the corresponding period last year. The amount of
adjustment for net foreign exchange gain previously reported in
prior periods did not include unrealized losses or gains resulting
from change in fair value of derivatives. In order to place the
current disclosure in the appropriate context and enhance its
comparability, similar adjustments have been made for net foreign
exchange gain, Adjusted EBITDA and Adjusted Net Income for the
three months ended September 30, 2022.
4 “Client count” refers to launched campaigns that are revenue
generating.
5 Includes additional clients attributable to our Hong Kong
subsidiary.
6 Refers to sites in Colombia, India, Romania, South Korea, Hong
Kong, Türkiye, Vietnam, Brazil and Indonesia.
7 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 third 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:
November 21, 2023, 7:30 PM (U.S. Eastern
Time) November 22, 2023, 8:30 AM (Singapore / Hong Kong Time)
Webcast link:
https://events.q4inc.com/earnings/TDCX/Q3-2023
Dial-in numbers:
U.S. Toll Free: +1 833 470
1428
U.S. (Local): +1 404 975 4839
Singapore: +65 3158 0255
Hong Kong: +852 5803 6418
UK Toll Free: +44 808 189
6484
All others: Dial-in numbers
Participant Access Code: 704387
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, travel
and hospitality, 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 30 campuses
globally, specifically in Brazil, Colombia, Hong Kong, India,
Indonesia, 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$1.3648 to US$1.00, the approximate rate in effect as
of September 30, 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 Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with IFRS, we use the
following non-IFRS financial measures 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 Company and its subsidiaries’
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
September 30,
2023
2022
US$’000
S$’000
S$’000
Revenue
119,791
163,491
172,770
Employee benefits expense
(78,717
)
(107,433
)
(112,325
)
Depreciation and amortization
expense
(7,853
)
(10,718
)
(10,207
)
Rental and maintenance
expense
(2,249
)
(3,069
)
(2,648
)
Recruitment expense
(1,550
)
(2,116
)
(4,452
)
Transport and travelling
expense
(218
)
(297
)
(386
)
Telecommunication and technology
expense
(2,603
)
(3,552
)
(3,080
)
Interest expense
(438
)
(598
)
(429
)
Other operating expense (1)
(2,260
)
(3,084
)
(655
)
Share of profit from an
associate
-
-
61
Interest income
2,411
3,290
1,233
Other operating income
1,136
1,550
1,840
Profit before income
tax
27,450
37,464
41,722
Income tax expense
(4,263
)
(5,818
)
(10,799
)
Profit for the period
23,187
31,646
30,923
Item that may be reclassified
subsequently to profit or loss:
Exchange differences on
translation of foreign operations
(499
)
(681
)
(6,880
)
Total comprehensive income for
the period
22,688
30,965
24,043
Profit
attributable to:
- Owners of TDCX Inc.
23,188
31,647
30,922
- Non-controlling interests
(1
)
(1
)
1
23,187
31,646
30,923
Total
comprehensive income attributable to:
- Owners of TDCX Inc.
22,689
30,966
24,042
- Non-controlling interests
(1
)
(1
)
1
22,688
30,965
24,043
Basic earnings per share (in US$
or S$) (2)
0.16
0.22
0.21
Diluted earnings per share (in
US$ or S$) (2)
0.16
0.22
0.21
_______________________________ (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
September 30,
2023
2022
Weighted average number of
ordinary shares for the purposes of basic earnings per share
144,935,217
144,943,516
Weighted average number of
ordinary shares for the purposes of diluted earnings per share
144,958,043
144,943,516
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$1.3648 to
US$1.00, the approximate rate of exchange at September 30, 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 September 30, 2023 and
2022
Revenue. Our revenue decreased by 5.4% to S$163.5 million
(US$119.8 million) for the three months ended September 30, 2023
from S$172.8 million for the three months ended September 30, 2022
primarily driven by a 29.9% decrease in revenue from content, trust
and safety services followed by a 2.8% decrease in revenue from
omnichannel CX solutions services rendered partially offset by a
3.5% increase in revenue from sales and digital marketing
services.
- Our revenue from omnichannel CX solutions services decreased by
2.8% to S$98.1 million (US$71.9 million) from S$100.9 million for
the same period of 2022 primarily due to lower volumes requirement
by existing clients in the digital advertising and media and
fintech verticals, partially offset by a higher demand for our
services by existing clients in the travel and hospitality, gaming,
fast-moving consumer goods, financial services, technology and
e-commerce verticals.
- Our revenue from sales and digital marketing services increased
by 3.5% to S$44.3 million (US$32.4 million) from S$42.8 million for
the same period of 2022 primarily due to the expansion of existing
campaigns by key digital advertising and media clients, fast moving
consumer goods, technology and scaled up contributions from new
clients secured during 2022.
- Our revenue from content, trust and safety services decreased
by 29.9% to S$19.7 million (US$14.4 million) from S$28.1 million
for the same period of 2022 primarily due to the contraction of
volumes requirement by the digital advertising and media vertical
client but mitigated partially by higher volumes in the travel and
hospitality vertical.
- Our revenue from our other service fees increased by 47.1% to
S$1.5 million (US$1.1 million) from S$1.0 million for the same
period of 2022 primarily due to an expansion of existing
campaigns.
The following table sets forth our service provided by amount
for the three months ended September 30, 2023 and 2022.
For the three months ended
September 30,
2023
2022
US$’000
S$’000
S$’000
Revenue by service
Omnichannel CX solutions
71,853
98,064
100,902
Sales and digital marketing
32,446
44,283
42,799
Content, trust and safety
14,403
19,657
28,058
Other service fees #
1,089
1,487
1,011
Total revenue
119,791
163,491
172,770
# Other service fees comprise revenue from other business
process and other services.
Employee Benefits Expense. Our employee benefits expense
decreased by 4.4% to S$107.4 million (US$78.7 million) from S$112.3
million for the same period of 2022 primarily due to lower
equity-settled share-based payment expenses resulting from changed
expectations of the remaining awarded tranches reflecting the
changing business and operating climate and recalibration of
employee headcount and costs of several key operating units in
response to business volume changes but offset partially by the
presence of the acquired Hong Kong subsidiary that was completed on
October 13, 2022 and commencement of greenfield operations of
Türkiye, Brazil and Vietnam. For the quarter ended September 30,
2023, the equity-settled share-based payment expense decreased to
S$0.8 million (US$0.6 million) as compared to the corresponding
quarter in 2022 of S$3.8 million.
Depreciation and Amortization Expense. Our depreciation
and amortization expense increased by 5.0% to S$10.7 million
(US$7.9 million) from S$10.2 million for the same period of 2022
primarily due to the shift to leased office spaces in Türkiye and
South Korea, take up of additional office space by the Philippines
operations and the presence of the Hong Kong unit that was acquired
on October 13, 2022 to become a wholly-owned subsidiary of the
Group.
Rental and Maintenance Expense. Our rental and
maintenance expense increased by 15.9% to S$3.1 million (US$2.2
million) from S$2.6 million for the same period of 2022 primarily
due to the set-up of the new Brazil operation and higher office
upkeep costs at the Philippines site.
Recruitment Expense. Our recruitment expense decreased by
52.5% to S$2.1 million (US$1.6 million) from S$4.5 million for the
same period of 2022 primarily due to lower hiring and work permit
renewal activities of largely foreign talents in Singapore and
Malaysia.
Transport and Travelling Expense. Our transport and
travelling expenses remained stable during the two comparative
periods.
Telecommunication and Technology Expense. Our
telecommunication and technology expense increased by 15.3% to
S$3.6 million (US$2.6 million) from S$3.1 million for the same
period of 2022 due to software and telecommunication requirement of
campaigns of certain existing and new sites.
Interest Expense. Our interest expense increased by 39.4%
to $0.6 million (US$0.4 million) from $0.4 million for the same
period of 2022 primarily on the back of higher lease liability
interest arising mainly from the shifting to leased office spaces
in Türkiye and South Korea sites, additional office spaces taken up
by the Philippines operations and the presence of the Hong Kong
unit that was acquired on October 13, 2022 to become a wholly-owned
subsidiary of the Group.
Other Operating Expense. Our other operating expense
increased by 370.8% to S$3.1 million (US$2.3 million) from S$0.7
million for the same period of 2022 primarily due to lower net
foreign exchange gain but partially offset by lower professional
and advisory engagement fees.
Share of Profit from an Associate. This relates to our
share of profit from an associated company in Hong Kong which later
became a wholly-owned subsidiary on October 13, 2022 following the
acquisition of the controlling shares in that business.
Interest Income. Our interest income increased by 166.8%
to S$3.3 million (US$2.4 million) from S$1.2 million for the same
period of 2022 primarily due to higher placements of liquid funds
in interest earning deposits and an uptrend in deposit interest
rates during the period.
Other Operating Income. Our other operating income
decreased by 15.8% to S$1.6 million (US$1.1 million) from S$1.8
million for the same period of 2022 primarily due to lower
government grants received by our Singapore subsidiaries. This is
partially offset by the fair value gains on the financial assets
measured at fair value through profit or loss.
Profit Before Income Tax. As a result of the foregoing,
we achieved a profit before income tax of S$37.5 million (US$27.5
million) for the three months ended September 30, 2023 (S$41.7
million for the corresponding period of 2022).
Income Tax Expense. Our income tax expense decreased by
46.1% to S$5.8 million (US$4.3 million) from S$10.8 million for the
same period of 2022 primarily due to the reinstatement of tax
incentive in the Philippines that was temporarily suspended in
2022, lower profitability of a few key operating units and
non-recurrence of the one-off ‘prosperity tax’ in Malaysia that was
implemented in 2022.
Profit for the Period. As a result of the foregoing, our
profit for the period increased by 2.3% to S$31.6 million (US$23.2
million) from S$30.9 million for the same period of 2022.
Exchange differences on translation of foreign
operations. Exchange differences on translation of foreign
operations recognized in other comprehensive income decreased by
90.1% to a loss of S$0.7 million (US$0.5 million) from a loss of
S$6.9 million for the same period of 2022. This is largely due to
the smaller impact of the functional currencies of several key
foreign operations weakening against the Singapore Dollar during
the three months ended September 30, 2023 as compared with the
corresponding period of 2022.
Total Comprehensive Income for the Period. As a result of
the foregoing, our total comprehensive income for the period
increased by 28.8% to S$31.0 million (US$22.7 million) from S$24.0
million for the same period of 2022.
Additional Adjustments to Certain Non-IFRS Financial
Measures
With effect from January 1, 2023, we have decided to include
adjustments for net foreign exchange gains or losses and
acquisition-related professional fees in Adjusted EBITDA, Adjusted
Net Income and Adjusted EPS, in addition to an adjustment for
equity-settled share-based payment expense (or net reversal) that
was included in such previously reported non-IFRS measures in prior
periods. Over the course of the previous year, we have identified
such additional items as 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. For further
information, see “Non-IFRS Financial Measures” below.
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 does not have an 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. All share repurchases are subject to and will be carried out,
if at all, in accordance with applicable regulatory
requirements.
From July 1, 2023 to November 17, 2023, we purchased 930,913
American Depositary Shares (ADSs) at a cost of US$5,542,000 under
our share repurchase program.
Reclassifications and comparative figures
In the third quarter of 2022, foreign exchange gains was
reported under “other operating income” line item while foreign
exchange losses for the quarter was reported under “other operating
expenses” line item. From the fourth quarter of 2022 onwards, we
reported foreign exchange gains or losses on a net basis under
“other operating expenses” line item. Accordingly,
reclassifications relating to foreign exchange gains and losses
have been made to prior period’s financial statements to enable
comparability with the current period’s financial statements and
therefore, the below mentioned line items have been amended in the
unaudited condensed interim consolidated statement of profit or
loss and other comprehensive income. Comparative figures have been
adjusted to conform to the current period’s presentation. The items
were reclassified as follows:
Previously reported
After reclassification
S$’000
S$’000
For the
three months ended September 30, 2022:
Other operating income
6,775
1,840
Other operating expenses
(5,590
)
(655
)
For the
nine months ended September 30, 2022:
Other operating income
12,076
4,341
Other operating expenses
(12,962
)
(5,227
)
NON-IFRS FINANCIAL MEASURES
EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted Net Income, Adjusted Net Income margin, Adjusted EPS,
revenue at constant currency, and revenue growth at constant
currency are non-IFRS financial measures. TDCX monitors EBITDA,
EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted
Net Income, Adjusted Net Income margin, Adjusted EPS, revenue at
constant currency and revenue growth at constant currency because
they assist the Company in comparing its operating performance on a
consistent basis by removing the impact of items not directly
resulting from its core operations.
EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA
margin
“EBITDA” represents profit for the period before interest
expense, interest income, income tax expense, and depreciation and
amortization expense. “EBITDA margin” represents EBITDA as a
percentage of revenue. “Adjusted EBITDA” represents profit for the
period before interest expense, interest income, income tax
expense, depreciation and amortization expense, equity-settled
share-based payment expense (or net reversal) incurred in
connection with our Performance Share Plan, net foreign exchange
gain or loss and acquisition-related professional fees. “Adjusted
EBITDA margin” represents Adjusted EBITDA as a percentage of
revenue.
For the three months ended
September 30,
2023
2022 (4)
US$’000
S$’000
Margin
S$’000
Margin
Revenue
119,791
163,491
—
172,770
—
Profit for the period and net
profit margin
23,187
31,646
19.4
%
30,923
17.9
%
Adjustments for:
Depreciation and amortization
expense
7,853
10,718
6.5
%
10,207
5.9
%
Income tax expense
4,263
5,818
3.5
%
10,799
6.3
%
Interest expense
438
598
0.4
%
429
0.2
%
Interest income
(2,411
)
(3,290
)
(2.0
%)
(1,233
)
(0.7
%)
EBITDA and EBITDA margin
33,330
45,490
27.8
%
51,125
29.6
%
Adjustment:
Equity-settled share-based
payment expense (1)
558
762
0.5
%
3,837
2.2
%
Net foreign exchange gain (2)
(761
)
(1,039
)
(0.6
%)
(4,931
)
(2.8
%)
Acquisition-related professional
fees (3)
179
244
0.1
%
—
—
Adjusted EBITDA and Adjusted
EBITDA margin (4)
33,306
45,457
27.8
%
50,031
29.0
%
For the nine months ended
September 30,
2023
2022 (5)
US$’000
S$’000
Margin
S$’000
Margin
Revenue
366,022
499,547
—
487,449
—
Profit for the period and net
profit margin
64,611
88,181
17.7
%
79,928
16.4
%
Adjustments for:
Depreciation and amortization
expense
24,113
32,909
6.5
%
29,059
6.0
%
Income tax expense
14,037
19,158
3.8
%
29,097
6.0
%
Interest expense
1,158
1,580
0.3
%
1,387
0.3
%
Interest income
(5,991
)
(8,177
)
(1.6
%)
(1,922
)
(0.4
%)
EBITDA and EBITDA margin
97,928
133,651
26.7
%
137,549
28.3
%
Adjustment:
Equity-settled share-based
payment (net reversal) / expense (1)
(2,563
)
(3,498
)
(0.7
%)
15,352
3.1
%
Net foreign exchange gain (2)
(1,610
)
(2,197
)
(0.4
%)
(7,786
)
(1.6
%)
Acquisition-related professional
fees (3)
1,125
1,535
0.3
%
—
—
Adjusted EBITDA and Adjusted
EBITDA margin (5)
94,880
129,491
25.9
%
145,115
29.8
%
_______________________________ (1) Refer to equity-settled
share-based payment expense (or net reversal) arising from TDCX
Performance Share Plan.
(2) Refer to realized and unrealized losses or gains resulting
from changes in exchange rates between the functional currency and
the currency in which a foreign currency transaction is
denominated, net of unrealized losses or gains resulting from
change in fair value of derivatives. The amount of adjustment for
net foreign exchange gain previously reported in prior periods did
not include unrealized losses or gains resulting from change in
fair value of derivatives. In order to place the current disclosure
in the appropriate context and enhance its comparability, similar
adjustments have been made for net foreign exchange gain for the
three and nine months ended September 30, 2022.
(3) Refer to fees incurred on third-party service providers in
connection with a discontinued acquisition.
(4) The reported amounts for Adjusted EBITDA for the three
months ended September 30, 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 for the three months ended September 30,
2022.
(5) The reported amounts for Adjusted EBITDA for the nine months
ended September 30, 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 for the nine months ended September 30,
2022.
Adjusted Net Income and Adjusted Net Income margin
“Adjusted Net Income” represents profit for the period before
equity-settled share-based payment expense (or net reversal)
incurred in connection with our Performance Share Plan, net foreign
exchange gain or loss and acquisition-related professional fees,
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,
2023
2022 (4)
US$’000
S$’000
Margin
S$’000
Margin
Profit for the period and net
profit margin
23,187
31,646
19.4
%
30,923
17.9
%
Adjustment for:
Equity-settled share-based
payment
558
762
0.5
%
3,837
2.2
%
expense (1)
Net foreign exchange gain (2)
(643
)
(877
)
(0.5
%)
(3,655
)
(2.1
%)
Acquisition-related professional
fees (3)
179
244
-
—
—
Adjusted Net Income and Adjusted
Net Income margin (4)
23,281
31,775
19.4
%
31,105
18.0
%
For the nine months ended
September 30,
2023
2022 (5)
US$’000
S$’000
Margin
S$’000
Margin
Profit for the period and net
profit margin
64,611
88,181
17.7
%
79,928
16.4
%
Adjustment for:
Equity-settled share-based
payment
(2,563
)
(3,498
)
(0.7
%)
15,352
3.1
%
(net reversal) / expense (1)
Net foreign exchange gain (2)
(1,323
)
(1,805
)
(0.4
%)
(5,708
)
(1.1
%)
Acquisition-related professional
fees (3)
1,125
1,535
0.3
%
—
—
Adjusted Net Income and Adjusted
Net Income margin (5)
61,850
84,413
16.9
%
89,572
18.4
%
_______________________________ (1) Refer to equity-settled
share-based payment expense (or net reversal) arising from TDCX
Performance Share Plan.
(2) Refer to realized and unrealized losses or gains resulting
from changes in exchange rates between the functional currency and
the currency in which a foreign currency transaction is
denominated, net of unrealized losses or gains resulting from
change in fair value of derivatives and net of tax effects. The
amount of adjustment for net foreign exchange gain previously
reported in prior periods did not include unrealized losses or
gains resulting from change in fair value of derivatives. In order
to place the current disclosure in the appropriate context and
enhance its comparability, similar adjustments have been made for
net foreign exchange gain for the three and nine months ended
September 30, 2022.
(3) Refer to fees incurred on third-party service providers in
connection with a discontinued acquisition.
(4) The reported amounts for Adjusted Net Income for the three
months ended September 30, 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 Net Income for the three months ended September 30,
2022.
(5) The reported amounts for Adjusted Net Income for the nine
months ended September 30, 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 Net Income for the nine months ended September 30,
2022.
Adjusted EPS
“Adjusted EPS” represents earnings available to shareholders
excluding the impact of equity-settled share-based payment expense
(or net reversal), net foreign exchange gain or loss and
acquisition-related professional fees.
Adjusted EPS is calculated as earnings available to shareholders
excluding the impact of equity-settled share-based payment expense
(or net reversal), net foreign exchange gain or loss and
acquisition-related professional fees, divided by the diluted
weighted-average number of shares outstanding.
For the three months ended
September 30,
2023
2022 (4)
Amount
Per Share
Amount
Per Share
Amount
Per Share
US$’000
US$
S$’000
S$
S$’000
S$
Reported earnings available to
shareholders and EPS
23,188
0.16
31,647
0.22
30,922
0.21
Adjustments for:
Equity-settled share-based
payment expense (1)
558
-
762
0.01
3,837
0.03
Net foreign exchange gain (2)
(643
)
-
(877
)
(0.01
)
(3,655
)
(0.03
)
Acquisition-related professional
fees (3)
179
-
244
-
—
-
Adjusted earnings available to
shareholders and Adjusted EPS (4)
23,282
0.16
31,776
0.22
31,104
0.21
For the nine months ended
September 30,
2023
2022 (5)
Amount
Per Share
Amount
Per Share
Amount
Per Share
US$’000
US$
S$’000
S$
S$’000
S$
Reported earnings available to
shareholders and EPS
64,570
0.45
88,125
0.61
79,926
0.55
Adjustments for:
Equity-settled share-based
payment (net reversal) / expense (1)
(2,563
)
(0.03
)
(3,498
)
(0.03
)
15,352
0.11
Net foreign exchange gain (2)
(1,323
)
(0.01
)
(1,805
)
(0.01
)
(5,708
)
(0.04
)
Acquisition-related professional
fees (3)
1,125
0.01
1,535
0.01
—
—
Adjusted earnings available to
shareholders and Adjusted EPS (5)
61,809
0.42
84,357
0.58
89,570
0.62
_______________________________ (1) Refer to equity-settled
share-based payment expense arising from TDCX Performance Share
Plan.
(2) Refer to realized and unrealized losses or gains resulting
from changes in exchange rates between the functional currency and
the currency in which a foreign currency transaction is
denominated, net of unrealized losses or gains resulting from
change in fair value of derivatives and net of tax effects. The
amount of adjustment for net foreign exchange gain previously
reported in prior periods did not include unrealized losses or
gains resulting from change in fair value of derivatives. In order
to place the current disclosure in the appropriate context and
enhance its comparability, similar adjustments have been made for
net foreign exchange gain for the three and nine months ended
September 30, 2022.
(3) Refer to fees incurred on third-party service providers in
connection with a discontinued acquisition.
(4) The reported amounts for Adjusted EPS for the three months
ended September 30, 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 EPS for the three months ended September 30, 2022.
(5) The reported amounts for Adjusted EPS for the nine months
ended September 30, 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 EPS for the nine months ended September 30, 2022.
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 the current reporting 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 three months ended
September 30,
2023
2023
2022
S$’000
S$’000
S$’000
As reported
At constant currency
As reported
Revenue growth as reported
Foreign exchange impact
Revenue growth at constant
currency
Revenue
163,491
172,607
172,770
(5.4)%
5.3%
(0.1)%
For the nine months ended
September 30,
2023
2023
2022
S$’000
S$’000
S$’000
As reported
At constant currency
As reported
Revenue growth as reported
Foreign exchange impact
Revenue growth at constant
currency
Revenue
499,547
521,348
487,449
2.5%
4.5%
7.0%
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 that are out of the Company’s control or
are 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$1.3648 to US$1.00,
the approximate rate of exchange at September 30, 2023. Such
translations should not be construed as representations that the
Singapore Dollar amounts could be converted into USD at that or any
other rate.
UNAUDITED CONDENSED INTERIM
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
For the nine months ended
September 30,
2023
2022
US$’000
S$’000
S$’000
Revenue
366,022
499,547
487,449
Employee benefits expense
(239,135
)
(326,372
)
(321,540
)
Depreciation and amortization
expense
(24,113
)
(32,909
)
(29,059
)
Rental and maintenance
expense
(7,051
)
(9,623
)
(7,290
)
Recruitment expense
(5,530
)
(7,547
)
(10,797
)
Transport and travelling
expense
(835
)
(1,140
)
(971
)
Telecommunication and technology
expense
(7,712
)
(10,526
)
(8,551
)
Interest expense
(1,158
)
(1,580
)
(1,387
)
Other operating expense (1)
(9,779
)
(13,347
)
(5,227
)
Share of profit from an
associate
-
-
135
Interest income
5,991
8,177
1,922
Other operating income
1,948
2,659
4,341
Profit before income
tax
78,648
107,339
109,025
Income tax expenses
(14,037
)
(19,158
)
(29,097
)
Profit for the period
64,611
88,181
79,928
Item that may be reclassified
subsequently to profit or loss:
Exchange differences on
translation of foreign operations
(2,656
)
(3,625
)
1,747
Total comprehensive income for
the period
61,955
84,556
81,675
Profit
attributable to:
- Owners of the Group
64,570
88,125
79,926
- Non-controlling interests
41
56
2
64,611
88,181
79,928
Total
comprehensive income attributable to:
- Owners of the Group
61,914
84,500
81,673
- Non-controlling interests
41
56
2
61,955
84,556
81,675
Basic earnings per share (in S$)
(2)
0.45
0.61
0.55
Diluted earnings per share (in
S$) (2)
0.45
0.61
0.55
_______________________________ (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 nine months ended
September 30,
2023
2022
Weighted average number of
ordinary shares for the purposes of basic earnings per share
144,978,861
145,425,637
Weighted average number of
ordinary shares for the purposes of diluted earnings per share
145,032,964
145,425,637
UNAUDITED CONDENSED INTERIM
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of September 30, 2023
As of December 31, 2022
US$’000
S$’000
S$’000
ASSETS
Current assets
Cash and cash equivalents
317,729
433,637
389,100
Fixed and pledged deposits
-
-
6,551
Trade receivables
69,934
95,446
88,808
Contract assets
46,958
64,088
58,808
Other receivables
13,812
18,850
15,885
Financial assets measured at fair
value through profit or loss
42,243
57,653
29,776
Income tax receivable
314
428
354
Total current assets
490,990
670,102
589,282
Non-current assets
Pledged deposits
426
582
584
Goodwill and intangible
assets
2,005
2,737
2,924
Other receivables
1,937
2,643
5,019
Plant and equipment
25,134
34,303
41,292
Right-of-use assets
23,434
31,983
35,236
Deferred tax assets
2,799
3,820
3,463
Total non-current assets
55,735
76,068
88,518
Total assets
546,725
746,170
677,800
LIABILITIES AND EQUITY
Current liabilities
Other payables
38,123
52,030
49,723
Lease liabilities
12,142
16,572
17,818
Provision for reinstatement
cost
2,859
3,902
5,282
Income tax payable
7,066
9,644
16,560
Total current liabilities
60,190
82,148
89,383
Non-current
liabilities
Lease liabilities
13,423
18,320
20,644
Provision for reinstatement
cost
3,997
5,456
3,572
Defined benefit obligation
1,620
2,211
1,497
Deferred tax liabilities
596
813
852
Total non-current liabilities
19,636
26,800
26,565
Capital, reserves and
non-controlling interests
Share capital
15
20
19
Reserves
151,536
206,817
219,590
Retained earnings
315,319
430,346
342,260
Equity attributable to owners of
the Group
466,870
637,183
561,869
Non-controlling interests
29
39
(17
)
Total equity
466,899
637,222
561,852
Total liabilities and
equity
546,725
746,170
677,800
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$1.3648 to US$1.00, the approximate rate of exchange
at September 30, 2023. Such translations should not be construed as
representations that the Singapore Dollar amounts could be
converted into USD at that or any other rate.
UNAUDITED CONDENSED INTERIM
CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended
September 30,
2023
2022
US$’000
S$’000
S$’000
Operating activities
Profit before income tax
78,648
107,339
109,025
Adjustments for:
Depreciation and amortization
expense
24,113
32,909
29,059
Gain on early termination of
right-of-use assets
(6
)
(8
)
—
Changes in fair value of
financial assets at FVTPL
(763
)
(1,042
)
—
Equity-settled share-based
payment (net reversal) / expense
(2,563
)
(3,498
)
15,352
Provision for office
reinstatement cost
(3
)
(4
)
995
Bank loan transaction cost
23
32
41
Interest income
(5,991
)
(8,177
)
(1,922
)
Interest expense
1,158
1,580
1,387
Retirement benefit service
cost
502
685
566
Loss / (Gain) on disposal and
write-off of plant and equipment
29
39
(1
)
Share of profit from an
associate
—
—
(135
)
Operating cash flows before
movements in working capital
95,147
129,855
154,367
Trade receivables
(6,331
)
(8,640
)
716
Contract assets
(5,105
)
(6,967
)
(16,180
)
Other receivables
(1,066
)
(1,455
)
(2,399
)
Other payables
3,510
4,790
19,427
Cash generated from
operations
86,155
117,583
155,931
Interest received
5,991
8,177
1,922
Income tax paid
(19,667
)
(26,841
)
(27,617
)
Income tax refunded
274
374
—
Net cash from operating
activities
72,753
99,293
130,236
Investing activities
Purchase of plant and
equipment
(6,868
)
(9,374
)
(19,501
)
Proceeds from sales of plant and
equipment
21
29
50
Decrease in fixed deposits
4,677
6,383
1,735
Investment in financial assets
measured at fair value through profit or loss
(18,974
)
(25,896
)
—
Net cash used in investing
activities
(21,144
)
(28,858
)
(17,716
)
Financing activities
Dividends paid
(29
)
(40
)
(41
)
Repayment of lease
liabilities
(13,206
)
(18,023
)
(14,426
)
Interest paid
—
—
(212
)
Repayment of bank loan
—
—
(16,234
)
Repurchase of American Depositary
Shares
(4,619
)
(6,304
)
(13,590
)
Net cash used in financing
activities
(17,854
)
(24,367
)
(44,503
)
Net increase in cash and cash
equivalents
33,755
46,068
68,017
Effect of foreign exchange rate
changes on cash held in foreign currencies
(1,123
)
(1,531
)
5,277
Cash and cash equivalents at
beginning of period
285,097
389,100
313,147
Cash and cash equivalents at
end of period
317,729
433,637
386,441
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$1.3648 to US$1.00, the approximate rate of exchange
at September 30, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231121072401/en/
For enquiries, please contact: Investors / Analysts:
investors@tdcx.com Media: Eunice Seow eunice.seow@tdcx.com
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