TDCX posts 0.6% fall in Q1 net profit on almost 40% jump in employee benefits expenses
Net income would have grown 34.9% without the performance share plan-related expenses
Wong Pei Ting
TDCX, a Singapore-headquartered digital customer experience solutions provider, on Wednesday (May 25) posted a slight dip in net profit for its first quarter as it reported a nearly 40 per cent jump in employee benefits expenses.
Net profit for the 3 months ended Mar 31, 2022, fell 0.6 per cent to S$22.2 million, from S$22.3 million during the same period a year earlier.
As it released its latest set of unaudited financial results, the company, which listed on the New York Stock Exchange last October, said its employee benefits expenses increased by 38.9 per cent to S$103.9 million, from S$74.8 million for the same period in 2021.
The group attributed this to higher share-based payment expenses arising from the implementation of its performance share plan (PSP) in November last year. It also paid employees more in response to cost of living inflation and talent market conditions, it said.
Besides, its average workforce in the first 3 months of this year grew 29.6 per cent compared to the same period last year on the back of business volumes expansion of its current campaigns and staffing requirements of new campaign launches, it pointed out.
Leaving aside the PSP-related expenses, TDCX, however, noted that its net income grew 34.9 per cent to S$30.1 million, from S$22.3 million in the same period last year.
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Its revenue also grew to S$152.4 million in the first quarter, up 26.9 per cent from S$102.1 million in the same period last year. TDCX attributed the increase to a 25 per cent rise in revenue from providing omnichannel customer experience solutions and a 59.9 per cent rise in revenue from providing sales and digital marketing services.
Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) margins improved to 31.3 per cent in the first quarter, from 31.1 per cent in the same period last year.
Given the first-quarter results, TDCX adjusted its projected full-year revenue downwards to between S$650 million and S$675 million, from between S$689 million and S$702 million.
The company also revised its year-on-year revenue growth at midpoint to 19.3 per cent from 25.3 per cent, while keeping its adjusted Ebitda margin projection unchanged at between 30 and 32 per cent.
However, TDCX said it had gained several strong clients, which include a global short-form video social media platform, as well as a South-east Asia e-commerce platform. It did not name these 2 companies.
It also pointed out that 10 new clients came onboard in the first quarter alone, which is more than double what it managed to clinch in the same period last year. With the additions, TDCX started serving 55 clients as of end-March, compared to 39 clients a year ago.
The company added that 93 per cent of its revenue for the first quarter is contributed by “new economy clients”, or companies in high-growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth.
TDCX, meanwhile, said it has reinforced its Global English capabilities with the launch of a new 45,000-square-foot campus in Hyderabad, India. The campus complements its wide footprint of delivery centres across Asia, parts of Europe and a Latin America site, it said.
On the company’s outlook, chief executive Laurent Junique said growing geopolitical and economic instabilities may create headwinds for TDCX in the short term. However, he noted optimism about the company’s market opportunities and long-term growth potential.
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