+ Continued diversification in revenue mix. Revenue, excluding its top 5 clients, grew 45% YoY. Top 5 clients’ revenue contribution as a % of total revenue stood at 76% in 1Q23 (1Q22: 83%). Newer geographies incorporated in 2021 (South Korea, Colombia, Romania) are also starting to show meaningful contributions, with revenue growing >4x in 1Q23 vs 1Q22.
+ Travel & hospitality continued to be a bright spot. Revenue from the company’s 2nd largest vertical was up 34% YoY, more than offsetting the slight contraction in YoY revenue from the company’s largest vertical (Digital Advertising & Media). Growth in this vertical was boosted by continued rebound in cross-border travel, with an expectation for this trend to continue as outbound China travel increases.
+ Leveraging AI for growth. ~70% of TDCX’s business is B2B, with many of these clients looking for increasingly complex business solutions. TDCX recently launched TDCX AI, a new specialised consulting division to meet this need – using AI insights and tools to deliver highly personalized and complex customer experience (CX) solutions for clients at a faster pace. Additionally, TDCX is also investing in generative AI tools for improved operational efficiency.
– Margin dip due to business expansion. 1Q23 Adj. EBITDA margins were down 7% point YoY to 24.2%. There were several reasons for this: 1) absence of non-recurring government grants from 1Q22; 2) increase in general overheads (hiring and training of new staff) due to expansion into 2 new geographies; 3) increase in group corporate costs excluding SBCs.