Core Insights - TDCX Group is positioning itself to capitalize on a global outsourcing supercycle driven by technological advancements and changing market dynamics [2][10] - The company has launched a refreshed brand identity and tagline "Enable the Future" to reflect its evolution and commitment to integrating AI with human expertise [5][8] Company Overview - TDCX is a leading global digital customer experience solutions firm, celebrating its 30th anniversary and evolving from traditional outsourcing to a strategic orchestrator of growth [1][13] - The company operates across various industries, including digital advertising, e-commerce, fintech, and healthtech, with over 20,000 employees in 37 locations worldwide [14][16] Market Trends - Key trends driving the demand for TDCX's services include AI adoption, digital transformation, a global talent shift, and increasing compliance requirements [2][11] - The company identifies a supercycle of growth in the global outsourcing industry, fueled by the convergence of technology, data, and human intelligence [2][10] Brand Transformation - The new brand identity emphasizes TDCX's role as a trusted guide, blending technology and human expertise to empower clients [6][9] - The refreshed logo and tagline symbolize forward motion and agility, aligning with the company's mission to navigate clients through transformation [6][7] Strategic Focus - TDCX's core engines now include Enterprise CX, Digital Sales and Marketing, and Trust and Safety, enhanced by AI tools and analytics to maximize performance [9] - The company aims to deliver intelligence-led outcomes, positioning itself as a key partner for businesses seeking to thrive in an AI-enabled world [10][14] Anniversary Initiative - To commemorate its 30th anniversary, TDCX is offering a complimentary CX Sentiment Analysis Report to help businesses understand customer sentiment and identify growth opportunities [11]

[Key Information](index=8&type=section&id=Item%203.%20KEY%20INFORMATION) [Risk Factors](index=9&type=section&id=D.%20Risk%20factors.) The company faces material risks from a pending merger, significant client concentration, generative AI, and its Southeast Asia focus - The company has entered into a Merger Agreement for a **going-private transaction**, expected to close in **Q2 2024**, which carries risks of non-completion and business disruption[35](index=35&type=chunk)[36](index=36&type=chunk)[41](index=41&type=chunk) - There is significant client concentration risk, with the top two clients, **Meta and Airbnb**, accounting for **47.7% of revenue in 2023**, and the top five clients accounting for **72.6%**[44](index=44&type=chunk) - The emergence of generative AI poses a significant risk as it could **disrupt the industry** by automating tasks, potentially reducing demand for certain services[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - A substantial portion of operations, **84.6% of 2023 revenue**, is in Southeast Asia, exposing the company to regional economic, political, and regulatory risks[76](index=76&type=chunk) - The company's dual-class share structure gives its Founder approximately **98.4% of the aggregate voting power**, granting him considerable influence over corporate matters[200](index=200&type=chunk) [Information on the Company](index=46&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) [History and Development](index=46&type=section&id=A.%20History%20and%20development%20of%20the%20Company.) The company, founded in 1995, went public in 2021 and entered a definitive merger agreement to go private in 2024 - The company was founded in **1995** in Singapore by Laurent Junique and commenced trading on the **NYSE** under the symbol "TDCX" on **September 30, 2021**[244](index=244&type=chunk)[249](index=249&type=chunk) - On **March 1, 2024**, the company entered into a merger agreement to be acquired by its Founder in a **going-private transaction**, implying an equity value of approximately **US$1.037 billion**[252](index=252&type=chunk) - The merger consideration is **US$7.20 in cash per share**, and the transaction **does not require a shareholder vote**[255](index=255&type=chunk)[256](index=256&type=chunk) [Business Overview](index=48&type=section&id=B.%20Business%20overview.) The company provides digital customer experience solutions, primarily for new economy clients across 18 geographies Key Financial and Operational Metrics (2021-2023) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenue (S$ thousands) | 658,351 | 664,120 | 555,198 | | Profit for the year (S$ thousands) | 120,150 | 104,938 | 103,842 | | Adjusted EBITDA (S$ thousands) | 172,686 | 198,010 | 183,683 | | Net profit margin (%) | 18.3% | 15.8% | 18.7% | | Adjusted EBITDA margin (%) | 26.2% | 29.8% | 33.1% | | Number of clients | 97 | 84 | 52 | - The company's business comprises three main service offerings: **(1) omnichannel CX solutions, (2) sales and digital marketing services, and (3) content, trust and safety services**[264](index=264&type=chunk) - As of December 31, 2023, TDCX has an international footprint across **18 geographies**, servicing clients' customers in more than **20 languages**[263](index=263&type=chunk) [Our Services and Solutions](index=50&type=section&id=Our%20Services%20and%20Solutions) Revenue is driven by three service lines, with a majority from new economy clients and decreasing top-client concentration Revenue by Service (2021-2023) | Service | 2023 Revenue (S$ '000) | % of 2023 Revenue | 2022 Revenue (S$ '000) | 2021 Revenue (S$ '000) | | :--- | :--- | :--- | :--- | :--- | | Omnichannel CX solutions | 395,040 | 60.0% | 384,184 | 334,047 | | Sales and digital marketing | 176,423 | 26.8% | 166,506 | 114,718 | | Content, trust and safety | 81,012 | 12.3% | 109,496 | 103,538 | | Other service fees | 5,876 | 0.9% | 3,934 | 2,895 | | **Total** | **658,351** | **100.0%** | **664,120** | **555,198** | - New economy clients contributed **87.8% of total revenues in 2023**, a decrease from 91.9% in 2022 and 93.1% in 2021[274](index=274&type=chunk) - The top five clients accounted for **72.6% of total revenues in 2023**, showing a trend of **decreasing concentration** from 81.2% in 2022 and 84.4% in 2021[274](index=274&type=chunk) [Operations and Technology](index=52&type=section&id=Operations%20and%20Technology) The company leverages proprietary tools and licensed technologies to support its multi-lingual, global operations - The company has developed a proprietary human capital management suite called **FLASH**, which includes tools for recruitment, coaching, and employee surveys to improve hiring and engagement[347](index=347&type=chunk)[348](index=348&type=chunk)[353](index=353&type=chunk) - **Acuity**, the company's enterprise data warehouse and analytics platform, provides data governance and visualization to deliver actionable insights to clients[290](index=290&type=chunk)[361](index=361&type=chunk) - TDCX utilizes licensed technologies from partners like **Automation Anywhere** for robotic process automation and **NICE** for workforce management, integrating them with client systems[368](index=368&type=chunk)[369](index=369&type=chunk) [Employees and Culture](index=58&type=section&id=Employees%20and%20Culture) The company's competitive advantage is its skilled workforce of 17,862 employees and a culture built on five core values Total Employees by Geographic Location | Location | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | The Philippines | 7,055 | 6,783 | 5,750 | | Malaysia | 5,516 | 5,826 | 4,201 | | Thailand | 1,821 | 2,122 | 2,363 | | Singapore | 1,170 | 1,478 | 1,454 | | Others | 2,290 | 1,674 | 938 | | **Total** | **17,862** | **17,883** | **14,706** | - The company's culture is defined by five core values: **Teamwork, Innovation, Courage, Initiative, and Trust**, which are reinforced through talent programs[316](index=316&type=chunk) - TDCX provides extensive learning and development opportunities, and in 2023, **732 team leaders attended the New Leaders' Journey program**[328](index=328&type=chunk)[330](index=330&type=chunk) [Regulatory Environment](index=69&type=section&id=Regulatory%20Environment) Operations are subject to complex data privacy, labor, and investment laws across its diverse geographic footprint - In Singapore, the company must comply with the **Personal Data Protection Act (PDPA)** for data handling and the **Employment of Foreign Manpower Act** for its workforce[404](index=404&type=chunk)[407](index=407&type=chunk) - In the Philippines, operations are subject to the **Data Privacy Act** and rules from the **Philippine Economic Zone Authority (PEZA)** and **Board of Investments (BOI)**[413](index=413&type=chunk)[415](index=415&type=chunk) - In China, the company must navigate the **PRC Cybersecurity Law** and the **Personal Information Protection Law (PIPL)**, which impose strict data requirements[436](index=436&type=chunk)[438](index=438&type=chunk) - In Thailand, operations are subject to the **Foreign Business Act (FBA)**, which restricts foreign ownership in certain businesses[183](index=183&type=chunk)[430](index=430&type=chunk) [Operating and Financial Review and Prospects](index=78&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) [Operating Results](index=78&type=section&id=A.%20Operating%20results.) In 2023, revenue slightly decreased by 0.9% while profit for the year increased by 14.5% to S$120.2 million Consolidated Results of Operations (2021-2023) | (S$ in thousands) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue** | **658,351** | **664,120** | **555,198** | | Employee benefits expense | (424,571) | (436,350) | (339,683) | | Profit before income tax | 146,454 | 141,987 | 132,079 | | Income tax expenses | (26,304) | (37,049) | (28,237) | | **Profit for the year** | **120,150** | **104,938** | **103,842** | | Basic earnings per share (in S$) | 0.83 | 0.72 | 0.81 | - **2023 vs. 2022 Performance:** - **Revenue:** Decreased 0.9% to S$658.4 million, driven by a 26.0% decline in Content, trust and safety services - **Employee Benefits Expense:** Decreased 2.7% to S$424.6 million, mainly due to a reversal of equity-settled share-based payment expenses - **Income Tax Expenses:** Decreased 29.0% to S$26.3 million, due to tax holiday reinstatement and absence of a one-off prosperity tax - **Profit for the Year:** Increased 14.5% to S$120.2 million[506](index=506&type=chunk)[509](index=509&type=chunk)[520](index=520&type=chunk)[521](index=521&type=chunk) - **2022 vs. 2021 Performance:** - **Revenue:** Increased 19.6% to S$664.1 million, driven by a 45.1% increase in Sales and digital marketing - **Employee Benefits Expense:** Increased 28.5% to S$436.4 million, due to higher headcount and wage adjustments - **Profit for the Year:** Increased 1.1% to S$104.9 million[524](index=524&type=chunk)[527](index=527&type=chunk)[540](index=540&type=chunk) [Liquidity and Capital Resources](index=93&type=section&id=B.%20Liquidity%20and%20Capital%20Resources.) The company maintains strong liquidity with S$451.8 million in cash and an undrawn S$20 million credit facility Summary of Cash Flows (S$ in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 137,177 | 164,551 | 103,825 | | Net cash used in investing activities | (31,470) | (29,669) | (44,139) | | Net cash (used in)/from financing activities | (33,238) | (50,451) | 199,644 | | **Net increase in cash and cash equivalents** | **72,469** | **84,431** | **259,330** | - As of December 31, 2023, the company had **S$451.8 million in cash and cash equivalents** and an **undrawn revolving credit facility of S$20 million**[554](index=554&type=chunk) - Capital expenditures were **S$12.4 million in 2023**, a decrease from S$25.2 million in 2022, primarily used for office expansion[555](index=555&type=chunk) - Net cash used in financing activities in 2023 was **S$33.2 million**, mainly due to **S$24.0 million in lease liability repayments** and **S$9.2 million for share repurchases**[566](index=566&type=chunk) [Critical Accounting Estimates](index=95&type=section&id=E.%20Critical%20Accounting%20Estimates.) Key estimates involve client warrant valuation, share-based payments, and deferred tax liabilities on foreign earnings - Warrants issued to Airbnb are treated as variable non-cash consideration, resulting in a **S$1.0 million revenue reduction** for 2023[575](index=575&type=chunk)[991](index=991&type=chunk) - For share-based payments, the company **reversed S$10.9 million** in previously recognized expenses in 2023 as certain vesting conditions were not expected to be met[581](index=581&type=chunk)[1065](index=1065&type=chunk) - The company **did not recognize deferred tax liabilities of S$18.1 million** on unremitted earnings from foreign subsidiaries as of December 31, 2023[583](index=583&type=chunk)[996](index=996&type=chunk) [Directors, Senior Management and Employees](index=98&type=section&id=Item%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) [Directors and Senior Management](index=98&type=section&id=A.%20Directors%20and%20senior%20management.) The company is led by Founder and CEO Laurent Junique, with an experienced board and executive team - The board of directors is composed of five members: **Laurent Junique (Executive Chairman & CEO), Chin Tze Neng (CFO & Executive Director), Edward Goh Kok Hwee (EVP Corporate Development & Executive Director), Koh Chia Ling (Independent Director), and Tan Yee Peng (Independent Director)**[587](index=587&type=chunk) - **Laurent Junique**, the Founder, has over **26 years of outsourcing experience** and plays a central role in the company's strategy and vision[588](index=588&type=chunk) [Compensation](index=101&type=section&id=B.%20Compensation.) Total 2023 executive compensation was S$14.5 million, and all unvested share awards will be cancelled upon the merger - Total compensation for directors and executive officers in 2023 was **S$14.5 million**[604](index=604&type=chunk) - The company's Performance Share Plan (PSP) will be terminated upon the merger, and **all unvested awards will be cancelled without consideration**[608](index=608&type=chunk)[609](index=609&type=chunk) [Board Practices](index=103&type=section&id=C.%20Board%20Practices.) The board has three committees and utilizes home country exemptions from certain NYSE corporate governance rules - The board has three committees: **Audit, Compensation, and Nominating and Corporate Governance**[620](index=620&type=chunk) - The Audit Committee is chaired by **Tan Yee Peng**, who qualifies as an **audit committee financial expert**, and consists of two independent directors[621](index=621&type=chunk) - The company follows home country practice and is **exempt from NYSE requirements for a majority-independent board** and fully independent compensation and nominating committees[620](index=620&type=chunk) [Share Ownership](index=107&type=section&id=E.%20Share%20Ownership.) Founder Laurent Junique holds 98.4% of voting power, making TDCX a controlled company under NYSE rules Major Shareholder Ownership (as of April 5, 2024) | Shareholder | % of Total Ordinary Shares | % of Aggregate Voting Power | | :--- | :--- | :--- | | Laurent Junique (and related entities) | 86.1% | 98.4% | | FourWorld Capital Management LLC | 3.2% | 0.4% | - The dual-class share structure grants holders of Class B shares **ten votes per share**, while Class A shares receive one vote per share[645](index=645&type=chunk) [Financial Information](index=111&type=section&id=Item%208.%20FINANCIAL%20INFORMATION) [Consolidated Statements and Other Financial Information](index=111&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) The company has no fixed dividend policy and is restricted from paying dividends by the pending merger agreement - The company **does not intend to pay dividends** in the foreseeable future, and the pending **Merger Agreement also prohibits dividend payments** without prior consent[661](index=661&type=chunk) - Dividend payments are subject to the discretion of the board and legal requirements in the Cayman Islands, which allow dividends to be paid from profits or share premium, **subject to a solvency test**[663](index=663&type=chunk) - As a holding company, its ability to pay dividends is **dependent on receiving distributions from its subsidiaries**, which are subject to foreign exchange controls[667](index=667&type=chunk)[668](index=668&type=chunk)[669](index=669&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=129&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) [Market Risk Disclosures](index=129&type=section&id=Market%20Risk) The company's primary market risks are credit, foreign currency, and liquidity, which are actively managed - **Credit Risk:** Primarily from trade receivables with a net carrying amount of **S$107.7 million** as of Dec 31, 2023; the company has **not experienced material credit losses**[783](index=783&type=chunk) - **Foreign Currency Risk:** A hypothetical **5% strengthening of the USD against relevant functional currencies would increase profit by S$5.9 million** in 2023[785](index=785&type=chunk)[786](index=786&type=chunk) - **Liquidity Risk:** Managed by maintaining sufficient cash (**S$451.8 million at year-end 2023**) and an **undrawn revolving credit facility of S$20 million**[789](index=789&type=chunk) - **Interest Rate Risk:** **Not significant** as of Dec 31, 2023, as the company had no outstanding interest-bearing liabilities other than fixed-rate lease liabilities[788](index=788&type=chunk) [Controls and Procedures](index=133&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) [Controls and Procedures](index=133&type=section&id=Controls%20and%20Procedures) Management concluded that both disclosure controls and internal controls over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were **effective as of December 31, 2023**[806](index=806&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was **effective as of December 31, 2023**[810](index=810&type=chunk) - As an emerging growth company, TDCX is **not required to provide an auditor attestation report** on its internal control over financial reporting[811](index=811&type=chunk) [Cybersecurity](index=137&type=section&id=Item%2016K.%20CYBERSECURITY) [Cybersecurity Risk Management](index=137&type=section&id=Cybersecurity%20Risk%20Management) Cybersecurity risk is managed via a formal program with board oversight and a dedicated Security Operations Centre - The company employs a Cybersecurity Risk Management program that involves **vulnerability assessments and penetration tests** with external firms[830](index=830&type=chunk)[831](index=831&type=chunk) - A dedicated **Regional Security Operations Centre (SOC)** monitors emerging threats, and the company has established incident response plans[833](index=833&type=chunk)[834](index=834&type=chunk) - Governance is managed by the **Group CIO's office**, which presents an **annual IT audit plan to the Audit Committee** and provides periodic updates to the board[838](index=838&type=chunk) [Financial Statements](index=139&type=section&id=Item%2018.%20FINANCIAL%20STATEMENTS) [Consolidated Statement of Financial Position](index=146&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Total assets grew to S$767.1 million in 2023, driven by an increase in cash and financial assets Consolidated Statement of Financial Position (S$ '000) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | **682,450** | **589,282** | | Cash and cash equivalents | 451,849 | 389,100 | | Trade receivables | 107,744 | 88,808 | | **Total Non-Current Assets** | **84,639** | **88,518** | | **Total Assets** | **767,089** | **677,800** | | **Total Current Liabilities** | **84,902** | **89,383** | | **Total Non-Current Liabilities** | **31,966** | **26,565** | | **Total Liabilities** | **116,868** | **115,948** | | **Total Equity** | **650,221** | **561,852** | | **Total Liabilities and Equity** | **767,089** | **677,800** | [Consolidated Statement of Profit or Loss](index=147&type=section&id=Consolidated%20statement%20of%20profit%20or%20loss%20and%20other%20comprehensive%20income) In 2023, profit for the year increased to S$120.2 million despite a slight decrease in revenue Consolidated Statement of Profit or Loss (S$ '000) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue** | **658,351** | **664,120** | **555,198** | | Profit before income tax | 146,454 | 141,987 | 132,079 | | Income tax expenses | (26,304) | (37,049) | (28,237) | | **Profit for the year** | **120,150** | **104,938** | **103,842** | | **Total comprehensive income for the year** | **105,517** | **91,430** | **97,618** | | Diluted earnings per share (S$) | 0.83 | 0.72 | 0.81 | [Consolidated Statement of Cash Flows](index=149&type=section&id=Consolidated%20statement%20of%20cash%20flows) Net cash from operations was S$137.2 million in 2023, contributing to a year-end cash balance of S$451.8 million Consolidated Statement of Cash Flows (S$ '000) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 137,177 | 164,551 | 103,825 | | Net cash used in investing activities | (31,470) | (29,669) | (44,139) | | Net cash (used in) from financing activities | (33,238) | (50,451) | 199,644 | | **Net increase in cash and cash equivalents** | **72,469** | **84,431** | **259,330** | | **Cash and cash equivalents at end of year** | **451,849** | **389,100** | **313,147** |

Operator [Operator Instructions] We now have our first question from KC Ong from CGS-CIMB. KC Ong I have 3 questions here. The first one is regarding the revenue slowdown in the third quarter of the year. This seems to be mainly driven by your top 2 customers. Based on my rough calculation, it seems that the revenue has fell 20% year-on-year here. Can you share more on what's happening here that results or impacted drop? Question number two, I think Meta showed a return to growth for its digital advertising ...

Financial Data and Key Metrics Changes - Q2 2023 revenue increased by 5.5% year-on-year, with constant currency growth at 11.3%, exceeding guidance [5][38] - Profit for the period rose by 9.4% to USD 22 million, demonstrating strong earnings growth despite a challenging environment [7][39] - Adjusted EBITDA decreased by 7.1% to USD 32.7 million, with margins contracting from 29.4% to 25.9% due to higher infrastructure and employee costs [12][14] Business Line Data and Key Metrics Changes - Revenue from Omnichannel CX grew by 8% year-on-year to USD 76 million, driven by higher business volumes across various sectors [40] - Sales and Digital Marketing services revenue increased by 15% to USD 33 million, supported by the expansion of existing campaigns [13][43] - Content, Trust and Safety revenue declined by 19% to USD 16 million due to reduced volume requirements from existing clients [40] Market Data and Key Metrics Changes - Revenue from plans outside the top 5 clients grew by 67% year-on-year, indicating successful diversification efforts [6] - The company has expanded its geographic footprint significantly, with a headcount of over 18,700 employees globally [10] - The top 5 clients contributed 73% of revenue in Q2 2023, down from 83% in the same period last year, reflecting improved revenue diversification [35] Company Strategy and Development Direction - The company is focused on geographic expansion and enhancing its TDCX AI capabilities to better serve clients and accelerate growth [33][34] - TDCX aims to prioritize share buybacks to enhance shareholder returns, indicating confidence in its cash generation and profitability [9][75] - The company is exploring M&A opportunities to enhance capabilities and reach, while also investing in organic initiatives [33] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2024, citing encouraging signs of economic activity and potential growth in various sectors [11][50] - The company has adjusted its full-year 2023 revenue growth outlook to 2% to 4% due to delays in client decision-making and reduced volume forecasts from key clients [44][68] - Management highlighted the importance of operational excellence and value addition to clients as key strategies moving forward [11][27] Other Important Information - Cash generated from operations was USD 49 million for the first half of 2023, with cash and cash equivalents totaling USD 301 million and no debt [7] - The company is leveraging AI to enhance productivity and client relationships, with several projects in the pipeline [34][51] Q&A Session All Questions and Answers Question: Can you please go over the rationale for the substantial change to your revenue guidance? - Management noted that delays in closing deals and slower-than-anticipated deal velocity contributed to the revised guidance, with some clients indicating weaker performance than expected [21][22] Question: How may AI impact your business? - Management indicated that AI is expected to strengthen client relationships and enhance productivity, with commercial proposals being developed sooner than anticipated [23][51] Question: Can you share more about the revenue contribution outside of your top 5 clients? - Management highlighted significant growth outside the top 5 clients, with successful onboarding of new clients contributing to this growth [25] Question: What is the outlook for new geographies like Indonesia and Brazil? - Management described Brazil as a tremendous success with rapid growth, while Indonesia is in early stages but showing promise [62][79] Question: Can you provide more color on the key client that reduced volumes? - Management explained that the reduction in volumes primarily affected the digital advertising sector, with some recovery expected in fintech later in the year [63][64]

Yes, Mr. Chin can take out this piece. Jason Lim Operator Just actually only have one. Could you give us some -- I guess, based on your revenue growth for this quarter, how much of it came from new geographies from the last several years, maybe just in terms of revenue growth? Jonathan Woo Around $8 million of revenue in Q1 was from new geographies, so around -- I think, around -- about -- just over $7 million of revenue growth is from new geographies. Thank you very much. Ladies and gentlemen, this conclud ...

Revenue and Growth - Revenue for the year ended December 31, 2022, was S$664.1 million, an increase from S$555.2 million in 2021, representing a growth of 19.6%[463] - Omnichannel CX solutions accounted for 57.8% of total revenue in 2022, down from 60.2% in 2021, while sales and digital marketing services increased to 25.1% from 20.7%[463] - Revenue from content, trust, and safety services was 16.5% of total revenue in 2022, down from 18.6% in 2021, indicating a shift in service demand[463] - Revenue increased by 19.6% to S$664.1 million (US$493.9 million) for the year ended December 31, 2022, driven by a 45.1% increase in sales and digital marketing services and a 15.0% increase in omnichannel CX solutions[483] - Revenue from omnichannel CX solutions increased by 15.0% to S$384.2 million (US$285.7 million) for the year ended December 31, 2022[483] - Revenue from sales and digital marketing services increased by 45.1% to S$166.5 million (US$123.8 million) for the year ended December 31, 2022[483] Profit and Expenses - Profit before income tax rose by 7.5% to S$142.0 million (US$105.6 million) for the year ended December 31, 2022[497] - Profit for the year increased by 1.1% to S$104.9 million (US$78.0 million) for the year ended December 31, 2022[499] - Employee benefits expense increased by 28.5% to S$436.4 million (US$324.5 million) for the year ended December 31, 2022, due to higher headcount and wage adjustments[486] - Other operating income decreased by 25.0% to S$4.7 million (US$3.5 million) for the year ended December 31, 2022, primarily due to lower government grants[496] - Total comprehensive income for the year decreased by 6.3% to S$91.4 million (US$68.0 million) for the year ended December 31, 2022[501] - Other operating expenses increased by 32.1% to S$14.7 million (US$10.9 million) for the year ended December 31, 2022[493] Tax and Incentives - The effective income tax expense for the years ended December 31, 2020, 2021, and 2022 was S$21.3 million, S$28.2 million, and S$37.0 million, respectively, reflecting an increase of 31.4% year-over-year in 2022[456] - The company has applied for the renewal of tax incentives in Malaysia, which expired on January 18, 2020, and is awaiting confirmation from authorities[456] Cash Flow and Financing - Cash and cash equivalents as of December 31, 2022, totaled S$389.1 million (US$289.4 million)[531] - Net cash from operating activities for the year ended December 31, 2022 was S$164.6 million (US$122.4 million), an increase from S$103.8 million in 2021[539] - Net cash used in investing activities in 2022 was S$29.7 million (US$22.1 million), primarily for the purchase of plant and equipment amounting to S$24.4 million[542] - Net cash used in financing activities in 2022 was S$50.5 million (US$37.5 million), mainly consisting of S$19.7 million for lease liabilities repayment and S$16.8 million for net repayment of bank loans[545] - The company plans to finance significant strategic acquisitions through debt or equity issuance, which may lead to dilution for existing shareholders[535] Employee and Workforce - Total employees increased to 17,883 as of December 31, 2022, up from 14,706 in 2021, representing a growth of 14.8%[609] - The Philippines had the largest employee base with 6,783 employees, a 17.9% increase from 5,750 in 2021[609] - Malaysia's workforce grew by 38.8% to 5,826 employees from 4,201 in 2021[609] - Employee benefits expense primarily consists of wages and salaries, commissions, and incentive payments, impacting overall operational costs[468] - Employee engagement surveys are conducted bi-weekly, resulting in higher participation rates compared to previous bi-annual surveys[615] - Employee retention programs include a two-day induction program and regular wellness events to promote physical and mental health[614][616] Corporate Governance - The board of directors consists of five members, with two being independent, ensuring compliance with NYSE independence standards[598] - The Audit Committee is composed of two members, both meeting the independence requirements of the NYSE[603] - The company has oversight on investor relations and corporate communications functions since 2021[573] Shareholder Information - As of March 31, 2023, the company had 144,918,462 ordinary shares issued and outstanding, including 21,418,462 Class A ordinary shares and 123,500,000 Class B ordinary shares[621] - Directors, executive officers, and certain employees collectively owned 899,517 Class A ordinary shares and 123,500,000 Class B ordinary shares, representing 85.8% of total ordinary shares and 98.4% of voting power[624] - Transformative Investments Pte Ltd held 123,500,000 Class B ordinary shares, accounting for 85.2% of total ordinary shares and 98.3% of voting power[624] Strategic Plans and Future Outlook - The company’s ability to expand and grow will depend on cash flow increases and the availability of financing options[535] - The company plans to expand the Performance Share Plan (PSP) to include additional categories of employees in the future[597]

Yes. On the margin guidance to answer CK's question in the first one month of this year there is a little bit of continuation of the ForEx volatility that was factored into the guidance. KC Ong come back to you. Operator, can we have our first caller please. Question-and-Answer Session Hi. Morning management. Thanks for taking my question. Two questions from me. Firstly, can you provide more breakdown in terms of segmental trends around the revenue guidance provided please? And with the recent headlines on ...

Revenue Performance - Revenue for the year ended December 31, 2021, was S$555.2 million, an increase from S$434.7 million in 2020, representing a growth of 27.7%[415] - Omnichannel CX solutions accounted for 62.4% of total revenue in 2021, while sales and digital marketing services contributed 20.7%[415] - Revenue from content monitoring and moderation services was S$85.9 million in 2021, accounting for 15.5% of total revenue[415] - Revenue increased by 27.7% to S$555.2 million (US$410.7 million) for the year ended December 31, 2021, driven by a 22.3% increase in omnichannel CX solutions and a 73.2% increase in sales and digital marketing services[433] - Revenues from omnichannel CX solutions increased by 22.3% to S$346.6 million (US$256.4 million) for the year ended December 31, 2021[437] - Revenues from sales and digital marketing services increased by 73.2% to S$114.7 million (US$84.9 million) for the year ended December 31, 2021[437] Profitability - Profit before income tax increased by 23.0% to S$132.1 million (US$97.7 million) for the year ended December 31, 2021[446] - Profit for the year increased by 20.6% to S$103.8 million (US$76.8 million) for the year ended December 31, 2021[448] - Total comprehensive income for the year increased by 12.7% to S$97.6 million (US$72.2 million) for the year ended December 31, 2021[450] Expenses - Employee benefits expense rose by 31.7% to S$339.7 million (US$251.3 million) for the year ended December 31, 2021, due to increased headcount and the introduction of a performance share plan[435] - Depreciation expense increased by 20.5% to S$39.9 million (US$29.5 million) for the year ended December 31, 2021, due to capital expenditure on new and expanded capacities[436] - Interest expense surged by 175.1% to S$8.4 million (US$6.2 million) for the year ended December 31, 2021, primarily due to a term loan drawdown[442] - Recruitment expenses increased by 36.0% to S$10.9 million (US$8.1 million) for the year ended December 31, 2021, due to higher referral and placement fees[439] Taxation - The effective tax expense for the years ended December 31, 2019, 2020, and 2021 was S$7.5 million, S$21.3 million, and S$28.2 million, respectively, indicating a significant increase in tax obligations[410] - The company has initiated discussions to renew tax benefits in Malaysia that expired in January 2020, which could positively affect future tax expenses[410] - Income tax expenses rose by 183.1% to S$21.3 million for the year ended December 31, 2020, due to the expiration of tax incentives in Malaysia[463] Geographic Distribution - The company operates in 11 geographies, with Singapore, the Philippines, and Malaysia each contributing approximately 25.9%, 26.0%, and 26.1% to total revenue in 2021[418] - The geographic revenue distribution shows a diverse client base, with significant contributions from Southeast Asia and North Asia markets[416] Cash Flow and Financing - Net cash from operating activities for the year ended December 31, 2021 was S$103.8 million (US$76.8 million), a decrease from S$130.5 million in 2020[484] - Net cash used in investing activities in 2021 was S$44.1 million (US$32.6 million), primarily for office space expansion of S$20.6 million[487] - Net cash from financing activities in 2021 was S$199.6 million (US$147.7 million), mainly from S$502.4 million proceeds from the issuance of new shares[490] - Cash and cash equivalents at the end of 2021 increased to S$313.1 million from S$59.8 million at the end of 2020[483] - The company reported a net increase in cash and cash equivalents of S$259.3 million in 2021, compared to S$23.5 million in 2020[483] - The company plans to finance significant strategic acquisitions through debt or equity issuance, which may lead to shareholder dilution[480] - The company had cash flows from operations expected to be adequate for the next 12 months[480] - The company may face additional contractual restrictions if it raises cash through debt issuance or refinancing existing credit facilities[480] Client Growth - The number of clients increased to 52 in 2021, up from 38 in 2020[469] Accounting and Compliance - The company is monitoring recently issued accounting pronouncements that may impact its financial position and results of operations[516] - The company recorded equity-settled share-based payment expenses of S$5.2 million for the year ended December 31, 2021[515] - Expected volatility for share awards was determined to be 29.0% based on historical data from comparable companies over the previous four years[515] - The expected term for share awards ranges from 0.45 to 3.45 years, with a risk-free rate between 0.1% and 0.9%[515] - The lease liability is remeasured when there is a change in lease term or significant events affecting the assessment of purchase options[514] - Lease payments may change due to adjustments in an index or rate, requiring remeasurement of lease liability using an unchanged discount rate[514] - If a lease contract is modified and not accounted for as a separate lease, the lease liability is remeasured based on the modified lease term[514]

Financial Performance - Total revenue for FY2021 reached US$410.7 million, representing a year-on-year growth of 27.7%[4] - Profit for the period was US$76.8 million, reflecting a year-on-year increase of 20.6%[4] - Adjusted EBITDA for FY2021 was US$136.9 million, marking a year-on-year growth of 29.4%[4] - For FY2022, the company expects revenue to be between US$510 million and US$519 million, indicating a year-on-year growth of approximately 25.3% at the midpoint[8] - Basic earnings per share for the full year ended December 31, 2021, was US$0.601, compared to US$0.52 for the full year ended December 31, 2020[23] - Total comprehensive income for the full year ended December 31, 2021, was US$72.2 million, up from US$64.1 million in 2020[23] - Profit for the year rose by 20.6% to S$103.8 million (US$76.8 million) compared to S$86.1 million (US$63.7 million) in the previous year[54] - Profit before income tax for the full year ended December 31, 2021, was US$97.712 million, up from US$79.453 million in 2020, reflecting a growth of 22.9%[65] Revenue Breakdown - Revenue contribution from new economy clients accounted for 93.1% of total revenue in FY2021[7] - Revenue from omnichannel Customer Experience (CX) solutions rose by 22.3% to US$256.4 million for the year ended December 31, 2021, driven by higher business volumes from key clients[40] - Revenue from sales and digital marketing services surged by 73.2% to US$84.9 million for the year ended December 31, 2021, primarily due to campaign expansions for key clients[40] - Total revenue for the year ended December 31, 2021, increased by 27.6% to S$555.2 million (US$410.7 million) from S$434.7 million (US$321.6 million) in 2020[42] Client and Market Expansion - The company added 20 new logos in FY2021, more than double the nine logos added in FY2020[7] - As of December 31, 2021, the total number of clients increased to 52, a 37% rise from 38 clients in the previous year[7] - The company expanded its geographic presence by opening a new office in South Korea in Q4 2021[7] Operational Growth - The company increased its headcount by 30% in 2021 to support operational growth[3] - Employee benefits expense increased by 41.8% to US$72.3 million for the three months ended December 31, 2021, reflecting a rise in staff force and share-based payment expenses[28] - Recruitment expenses increased by 49.8% to US$2.5 million for the three months ended December 31, 2021, due to higher referral and placement fees[32] Expenses and Liabilities - Depreciation expense for the three months ended December 31, 2021, increased by 7.8% to US$7.1 million, attributed to capital expenditures in new capacities[29] - Interest expense rose by 149.6% to US$1.5 million for the three months ended December 31, 2021, primarily due to the recognition of unamortized loan fees[34] - Employee benefits expense increased by 31.7% to S$339.7 million (US$251.3 million) due to higher headcount and performance-related compensation adjustments[42] - Depreciation expense rose by 20.5% to S$39.9 million (US$29.5 million) primarily due to capital expenditures in new capacities across multiple countries[43] - Interest expense surged by 175.1% to S$8.4 million (US$6.2 million) due to a term loan drawdown of S$252.7 million[48] Cash Flow and Assets - Cash and cash equivalents rose significantly to US$231.669 million from US$44.246 million, marking an increase of 424.5% year-over-year[65] - Net cash from operating activities was US$76.812 million for 2021, compared to US$96.533 million in 2020, indicating a decrease of 20.5%[65] - Total assets increased to US$430.206 million as of December 31, 2021, compared to US$180.081 million in 2020, representing a growth of 138.5%[63] - Total current liabilities decreased to US$63.528 million in 2021 from US$66.393 million in 2020, a reduction of 4.2%[63] - Total equity attributable to owners of the Group was US$343.039 million, up from US$83.249 million in 2020, representing a substantial increase of 313.5%[63] - The company reported a net increase in cash and cash equivalents of US$191.858 million for the year, compared to US$17.406 million in the previous year, an increase of 1006.5%[65] Shareholder Information - The company’s share capital remained at US$14 million, with share premium increasing to US$371.670 million from zero in 2020[63]