Q4 2021 TDCX Inc Earnings Call
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Ladies and gentlemen, thank you for standing by.
I'm Stuart your chorus call operator, welcome and thank you for joining the <unk> incorporated fourth quarter 2021 results conference call.
Throughout today's recorded presentation, all participants in a listen only mode presentation will be followed by a question and answer session. If.
If you'd like to ask a question today Press star followed by one on your touch tone telephone Crystal Starkey, followed by zero for operator assistance I would now like to turn the call over to management. Please go ahead.
Yeah.
Hello, everyone and welcome to TD, CX 2021 fourth quarter and full year earnings Conference call. My name is Jason Lee head of Investor Relations and allow me to introduce management on the call.
We have our executive chairman founder and CEO , Mr. The whole journey.
Our CFO Mr Chin zoning.
Before we continue I would like to remind you that we will make forward looking statements, which are subject to recent uncertainties and may not be realized in the future.
Not place undue reliance on any forward looking statements.
Also this call includes a discussion of certain non <unk> financial measures such as adjusted EBITDA and adjusted EBITDA margins.
For a reconciliation of the non <unk>.
So that causes alright measures. Please refer to our press release or the form 6K, which are available on our website.
Lastly, we have provided a convenient translation for the translation so Singapore dollar into the U S. Dollar. This is all done at a rate of one U S dollar to 13517, Singapore dollar.
It should not be construed as representation that the Singapore dollar amounts could be called back into the U S. D. A diesel any other REIT.
Management will now share updates on the operating and financial performance. This will be followed by a Q&A session and at least where you're welcome any questions you may have.
So with that let me turn the call virtual the Hong Kong police.
Thank you, Jason and hi, everyone I'm very happy to report that in Q4 as well as for the whole of 2021 <unk>.
<unk> delivered financially deliberate operationally and deliver strategically.
A big Thank you to all 14700 employees, who have made 2021 a record year.
Small and hard work.
All of our employees have to adapt to the new hybrid work model N GT shakes up deliver enhanced services to support them in this constantly evolving environment.
Also a thought for all employees, who were severely impacted by typhoon bets in Cebu in the Philippines, and the floods in Malaysia.
For just around Christmas our teams came together strongly to help and I'm very proud of that.
Currently 80% of our employees are still working from home and I'm happy to report that our latest employee satisfaction survey Chase, it's 9% satisfaction score globally compared to 88% last year at the same show you.
What is also important to note. These are all indicators in that survey.
As a result of the contributions of our employees, we delivered strong financial performance.
Q4 revenue Rose 28, 8% year on year to a record $114 million or 155 million Singapore dollars.
Adjusted EBITDA was $40 million versus $32 million for the same period last year on.
On a full year basis revenue rose 27, 7% year on year to a record $411 million or 555, Singapore dollars, we managed to achieve our full year performance at both the top end of our guidance range.
In particular, we are seeing strong contributions across several verticals did.
Digital advertising and media continued its positive trajectory rising over 40% in FY 2021 of a very large base. We grew our business with these clients both in the work streams of omni channel.
Sales on digital marketing across multiple geographies.
Two of our newer verticals continued to grow we gained further traction in the fintech space as revenue from Fintech clients.
Rose 67%.
Why 2021 and one and drive and 14% in Q4 in particular compared to the same period in 2020 and it was also another bright spot as revenue Rose 19, 9% in FY 2021 compared to last year, the travel and hospitality vertical posted a 15%.
Gain in Q4, 2021 versus Q4, 2020, and showing signs of recovery for the full year. This vertical was still down 4% compared to 2020.
With our continued focus on new economy clients revenue from new economy now stands at 93% of total revenue in FY 'twenty one.
We delivered operationally so let me next touch on this in terms of hiring in Q4 alone. We hired close to 3000 staff, whom we called Tvp's. This meant we achieved a 99% fill rate of what I'll call asphalt demonstrating the effectiveness of our hiring.
I'm also very excited about some significant productivity gains we were able to deliver for some of our clients. In one instance, we were able to increase productivity by 170% on a project with more than 700 Ftes the positive impact of our client was significant.
In another instance to VCX presented a unique concept of customer lifecycle manage money new business programs that provides actionable insights, which resulted in 29% and cream and the acquisition of customers.
Numerous examples of performance quality and productivity improvements.
Timna C working towards adding value to the business and that of our clients.
The owned servicing and growing our existing clients, who are focused on ramping up our business development efforts and adding new logos.
First off showing great results, we added a record 20 logos in 2021 more than double the nine that we added in 2020.
Let me share some highlights of all local additions during the year, we further entrench our expertise in Fintech and gaming two new economy verticals upside, we're not even existing five years ago.
We're doing highly specialized work under the Fintech umbrella such as the <unk> for customer Onboarding.
And resolution of trading issues, the work of our sponsors segregated into various complexity and escalation levels and we're already helping authentic content at the most complex levels and gaming we are starting to move beyond the customer support work on gaming matters, and we don't even help to moderate speech and player in <unk>.
Action for our clients also in foreign languages, we added another two globally recognized gaming clients to a registered during the later part of the year.
In addition to this we also added an interesting new food delivery players.
Beyond the established international Western firms, we are seeing a wave of exciting Asian originated large logos across verticals. This includes e-commerce gaming Fintech and technology. They will provide a tailwind for TD six over the medium term, even as we continue to grow along with the established pods.
Already on Alcon and finished with a strong logos addition, we ended the December 2021 was 52 clients a 37% jump from the 38 tonnes.
End of last year, no I was saying that we also deliver strategically from a geographic perspective revenue rose across all the geographies, we operate in all key southeast Asian, geographies, Malaysia, Philippines and Thailand.
Continued to deliver very strong growth well, our Newark footprint in North Asia, China, and Japan is starting to contribute a sizable mix to overall revenue.
Recently, we've also announced that we commenced operations in South Korea.
U S geography with the three projects at the onset.
The augment our north Asia presence only know 2021 was a good year for geographical expansion and source achieving maiden revenue contribution from four geographies, Colombia, India, Romania, and South Korea is for newly added geographies under score and to continuously expand our global footprint.
Offer more language capabilities than ever.
Be better positioned global Rfps.
My Executive search unit also delivered the goods in 2021 and continues to be on overdrive mode.
<unk> talent and new market is super important that we have on boarded two senior hires who will be part of the cole team in Korea, It's worth noting that one of them towards us from large Korean CX, operator, where he oversaw the international business unit covering some exciting new economy clients.
In 2021, we also made some senior key hires in India, Romania in Colombia.
Besides from new Joe's Samsung ex Mckinsey consultant join us in 2020 , one as SVP business intelligence and solutions and to lead our in House Advisory unit.
And it has been very involved in redesigning our data and process solutions to provide management and our clients with data and insights for us to make procure embedded decisions now besides new hires we have made some internal August well recalled valve accounts, our EVP for Philippines on the Americas.
Promoter group Chief client solutions officer to oversee areas of BTB branding marketing solution in an RFP proposals management's well early 2020 , one N GT to the all important a new role of Chief operating officer.
See we have been busy and we still have an exciting pipeline of key hires to fill in 2022 and they will update along the way.
In terms of tools and innovation and through our very own digital lab.
Invest in developing tools based on artificial intelligence and machine learning to augment delivery of desired CX now has 39, six head count across Malaysia, and India, while doing two things one enhancing existing tools such as flash sweep our own proprietary suite.
Management tools to improve productivity and quality number two this team has been working on some new tools, we leverage artificial intelligence and machine learning to deploy seven books, which are now working in sync with our agents in the trust and safety teams for a new economy com.
<unk> truly augment our agents here and drove huge productivity gains in 2020 . One this team helped to rollout more than 100 R. P. A robots to drive efficiency across the group.
Our in House Advisory unit led by Benson functions as a true business partner to our ops teams to identify operational and process improvements I'm confident that these two units will make contributions to the productivity gains.
Our offerings to clients continue to evolve to meet the changing needs in 2021, we commenced providing data labeling services, we kept the garage and labor content on a concert platforms to train and improve machine learning, while also refining algorithms and predictive models. Our clients then use this information to <unk>.
The user experience and utilize key insights on user behavior evaluation mouse models of further product improvements and development for another client. We also set up our regional team in charge of driving sales.
So this is.
Now on the M&A fronts, we continue to build our pipeline being public listed are certainly given us a boost us all M&A units as we see more ideas in the last five months in the last five years.
The pipeline is healthy.
We have a good view of what's in the market or coming to the market and we want to be very selective and only on the right targets in terms of client mix footprint culture.
The financial profile.
Hope I've given you a good view of what we've achieved during the year with now more ready than ever to provide our clients with a truly global solution at home and I'm excited by the opportunities I look forward to 2022, we believe that what we've achieved so far and the plans that we've laid out sets us on the best possible paths forward.
I'll now pass over to Mr Chin to.
Share more details on the financials as well as the outlook for FY 2022.
Thank you Mohan.
So, let's touch on our track record over the past four years.
We have delivered consistent growth from 2018 to 2021.
Over this period, our revenue rose at a compounded annual growth rate.
A 45%.
Adjusted EBITDA rose at a figure of 49% and profit rose at a CAGR of 40%.
This was coupled with a track record of consistently high adjusted EBITDA margins rising to 33, 3% in FY thing one up from 32, 9% in FY 'twenty.
Numbers are the results of our business strategy and positioning.
Our focus remains on the high growth segment.
New economy clients.
Plex offerings.
Regionalization of operations underpinned by multilingual hubs.
Next let me share a bit about our geographical.
We have a strong global presence across 11 geographies.
And we continue to expand.
As mentioned earlier, you recognize maintenance revenue from phone new geographies in FY 2021.
This Romania, India, South Korea riches that got pushed out in Q4, it's anytime you want yourself.
In terms of revenue contribution, Philippines, Malaysia, and Singapore are the largest contributors to FY 'twenty one revenue.
Around 26% each.
I loved contributed 12.9%, Japan, five 6% and China two 1%.
Our global head count stands at just over 14700 employees as of December 2021.
Next let me elaborate a bit about our planned numbers.
As Ron mentioned earlier.
Our recon 70 logos in 2021.
This represents a significant increase more than double the nine that we added in 2020.
And is a testament to our intensified efforts.
And that much and in 'twenty, one is 52 clients, which represents a 37% increase compared with 30, new clients as at December 2020.
We continue to focus on new economy clients and for FY 'twenty, one even calling the clients how do you view that 93% of our revenue.
Let me now share some details on our Q4 'twenty to 'twenty one financial performance.
Revenue Rose 28, 8% 240 million U S dollars.
Our highest ever quarterly revenue.
This was driven by broad based growth across all of our key business segments and across all geographies.
In the next slide I'll share the breakdown by segment and geography.
We kept we introduced the performance share plan a PSP in November so anyway to Incent.
Antibodies are staff and act as a long term tenant retention and attraction to the.
The adjusted EBITDA metric excludes the costs from the PSD and it helps provide sort of like for like comparison.
This performance.
Adjusted EBITDA Rose 26, 1% from 40 million U S dollar against the highest achieved in our plants.
Adjusted EBITDA margin stood at 34, 8% for Q4 to anyone.
Against Q4, Thank you Jackie.
We had exceptionally high margins of 35, 6%.
Net profit for the period rose, 7% on a reported basis.
On a comparable basis, excluding TSB costs net profit would have risen by 26, 3%.
Excluding TSB costs net profit margins would have been 32% slightly below 22, 4% of the same period in 2020.
Next we share more details.
On our Q4 revenue performance of vital services to be offered.
And by the geographies in which we offer.
Right.
Revenue from Omnichannel, she exhibitions rose, 24% to 71 million U S dollar.
Due mainly to higher business volumes, driven by the expansion of existing campaigns.
In addition volumes benefit of the mildly tobey the travel and hospitality sector of the impact of the pandemic.
Compared to the Cynthia Thank you Jackie.
Revenue from sales of digital marketing services increased by 72% to 26 million U S. Dollar.
Pension of existing campaigns.
And the digital advertising and maybe I'll, let it go.
Revenue from content monitoring and moderation services increased by a modest 3% to $60 million due to higher business volumes from an existing site that would lead you to advertising and you get that ticked up.
In terms of revenue contribution by key geographies.
18% to $27 million.
Philippines Rose, 21% to 30 million U S dollar.
But each of those.
But he went into the U S dollar.
Highland Rose, 44% to 60 million U S dollars.
Let me now share some details on our expenses, we continue to monitor closely our overall cost structure and ensure that our total operating cost base.
A streamlined and aligned to support our fast growing business.
For Q4, 2021 operating costs as a percentage of revenues stood at 73% excluding TSB costs.
Generally lower than 73, 7% for the same period of 2020.
Being a people centric business and employee benefit expenses makes up the largest portion of our total operating cost base.
Our employee benefits expenses increased by 42% to 72 million U S. Dollar for Q4 tend to be a business volume expansion.
If we exclude <unk> costs and employee benefit expense would have increased by.
74%.
This is higher than the increase in average number of employees by 29% over the same period, you will ask me to compensation adjustments to employee.
Do customers cost of living and prevailing market.
Market conditions in their respective sectors and a one off recognition of walk bonus recorded through southern group of employees for the successful IPO project in Q4 to anything you want.
Our depreciation expense increased by 8% to 7 million U S. Dollar for Q4, primarily due to a higher depreciation on write offs FX.
Renovations and capital expenditure in relation to office expansion at the top schools.
Other expenses, which includes items, such as recruitment and transport and telecommunication expenses rose, 2%, while Q4 anything you want.
Next let me touch on our full year 2021 financial performance.
We achieved our highest ever revenue adjusted EBITDA and net profit for a full year.
Revenue Rose 37, 7% to 411 million U S dollar our top two clients make up 62% of revenue compared to 60% for FY 2020.
And I'll talk about it.
84% compared to 83% for FY 2020.
Well, we have added new clients during the year. This will take time to contribute more meaningfully in terms of revenue mix.
Meanwhile.
Our top clients continued to grow very strongly because in FY 2021.
Leading to a slightly increasing the concentration.
In terms of earnings you would implicitly be that margins to 33, 3% for FY 2021 margin earnings higher than 32, 9% for FY 'twenty.
Adjusted EBITDA Rose 29, 4% 237 million U S dollars.
Accordingly, net profit for the period rose, 26% to 77 million U S dollars <unk>.
Excluding TSB expenses net profit would have been 26, 7% while margins would have stood at 19, 6%.
Yeah.
Let me touch on the revenue by service and geography for the full year.
From Omnichannel CX solutions rose, 22% in FY 2021 while revenue from sales and digital marketing services increased by 73%.
And revenue from content monitoring and moderation rose 7%.
<unk> remains the largest contributor at 62% of revenue followed by SDM at 31%.
And CMS at 15%.
In terms of revenue contribution by key geographies.
Singapore Rose, 22% to $106 5 million U S dollar.
It means rose, 30% to $106 8 million U S dollar.
Malaysia Rose, 27% to $107 4 million U S dollar.
While the Thailand rose, 32% to 53 million U S dollars.
Let me round up.
On a full year 2021 expenses.
Financial section.
For the full year 2021 operating costs as a percentage of revenues stood at 75%, excluding PST costs marginally lower compared to 76, 7% for the same period of 2020.
Excluding TSB costs employee benefit expense rose 30%.
Slightly higher than the increase in average number of employees of 29% over the same period.
Depreciation expense increased by 21% due to depreciation on capital expenditures and investing in new and expansion capacities.
The pieces of growth in several locations. In addition, there was increased depreciation with respect to our office property leased in Spain, and Japan to replace the co working space memberships occupy previously.
All other expenses were out of that.
As increases in telecom expenses were offset by lower transport and traveling.
Other operating expenses.
Lastly, let me now move to the financial outlook, we expect full financial year 2022 revenue to be in the range of 510 million U S. Dollar.
That 19 million U S dollar is.
This translates to a 689 to 702 million, Singapore dollar assuming an exchange rate of U S. Dollar one too.
Singapore dollar 1.3517.
At the midpoint of the range revenue growth is expected to be 25, 3% compared to 30 31.
We expect full year 2032, adjusted EBITDA margins to be approximately 30% to 32%.
The revenue guidance reflects our latest perspective on the business after iterations with existing science and includes some anticipation of growth from our business development activities.
The margin guidance.
In our expectations as we continue to invest in business development efforts.
I think the expansion and market conditions, while tenant.
With that let me hand over back to Lafarge.
Thank you Mr. Chen I believe we've given you a good view of what we've achieved in 2020 , one as well as some of our plans moving forward. Thank you for your time, we're happy to take any questions you have Jason please.
Thanks Mohan.
I think right now we are ready for Q&A and I ask that you all you restrict yourself to treat questions.
So operator.
For the first question.
It's a gentleman at this time, we will begin the question and answer session.
Who wishes to ask a question press star followed by one on their touch tone telephone.
Wish to remove yourself from the question queue, you May press star followed by two.
Are you using speaker equipment today, please lift the handset before making their selections.
Who has a question press star followed by one.
Oh It was the first question please.
The first question comes from the line of Casey from C. G. S. S. I N B. Please go ahead.
Hi, Thanks for taking my question.
And congrats on a strong set of results Uh Huh I've two questions first one can you provide more color and brought our parameters around your revenue guidance for FY 'twenty, two and secondly could you give us some comments on the trends that you're observing for not just counting on Facebook.
Most of that that they have guided for a rather soft outlook for first quarter 'twenty one F office productivity tools, sorry, while another peer of yours seems to have mentioned that they are shifting roles. So they can start to come out of town to Asian countries.
Okay.
Alright, Hi, Casey. Thank you for the question appreciate it.
So yeah and in terms of the guidance for 2022 with a we're looking at are really a continuation from from last year.
Well first of all we see a fintech as a as a big big growth driver for us.
So that's the first thing second is we continued to see digital advertising to be a big contributor.
Because a large portion of what we do but we also see a high growth from new clients that we've acquired over the past two to three years and they're starting to show in a in a big way.
So we will have a higher roof as well outside of the top two clients.
We've also incorporated a the good work that was done in our business development activities.
To to significantly increase from from last year on the travel and hospitality business, we've factored in a modest recovery.
And then for any further recovery, we'll update those as we go along now.
Now for fall Mythos Facebook question.
Really I don't want to comment on specifics for.
For the clients I can say that festival did.
Digital advertising you have a number of clients not just the Midtown South Arlington.
Advertising and so I believe there is still great growth opportunities in the sector.
I also want to point out that we work primarily in Asia Pacific and typically the proof of our digital advertising Asia Pacific is.
It's faster than the rest of the world and what we can see and we're continuing to watch for us.
Densification of competition in the digital advertising landscape, which we believe could become a fertile ground for TD CX.
Sales on digital marketing and you can see that in.
In 2021.
Sales in digital marketing was quite the hero for us in terms of growth.
We expect a cellphone digital marketing for 'twenty to 'twenty two to still be the faster growing segments of the three that we have so so we're going to continue to stay the course on the business and.
We think we'll be doing quite well.
Thank you Casey and thank you so much.
Yeah.
Next question is from the line of paying Vitt from Goldman Sachs. Please go ahead.
Thank you very much Bahamas ballparkish.
Okay.
Maybe I'll follow on from <unk> question, just now on the guidance.
2022, I just wanted to explain a little bit off the call like a high bar.
It can be can you also comment on how visibility that you currently have behind this guidance, even got a guidance that based on the contracts already signed and do all they can see kind of an impact like it put it into guidance.
Have any of that actually already cow.
Looking up a little.
I'll, let you perfunctory cocaine Oh, yeah well.
The way, we talk about the possibility of travel and hospitality like lumpy office, how do we actually you know like I actually understand what that actually talking about it going back to the rate of recovery are you still going to expect to see some softball.
So that would be really appreciated.
That's question number one question number two is you're talking about call. It a peak season in fourth quarter bought in omni channel.
Excellent quarter on quarter to quarter of course, Connecticut.
Especially on omni channels, but that's what it looks like about 4% can you explain what actually happened.
In the fourth quarter of that natural quite that level, but you can count on us.
NGL facility basis.
Proceeding to be seen that the opening up of Carnival Petsmart Paring back you see at the empty how somebody called quite a course that well have you seen kind of Chinese bus b. After so that they can also expand that and last question would be on that you'd get that margin guidance. How comfortable are you that this guidance, especially after the last call.
But you can't take the countries, but I appreciate it.
Thank you.
Great.
Appreciate it.
So on the on the growth that is planned for 2022, we've taken the majority of the growth will come from existing contracts with existing clients.
We've incorporated our growth from business in Brooklyn activities.
But it's it's a it's a lower number.
And.
Really oh.
Large large large majority of our growth is from existing clients.
Of the more established clients as well as the new plant that was acquired over the past two years.
So, it's a pretty a pretty stable.
<unk> revenue guidance.
From a travel hospitality are in terms of that forecast.
It's it's moderate.
We did it at the time of Oh, only corn Ah.
Thank you.
Ukraine crisis looming I think we were well advised to put it as a modest recovery at this point.
The Aldo.
The other question around I think the last question was.
It was around the way we see also a recovery on the all the trouble.
So.
No in Q2 fall right.
The fact that the.
Growth between Q3, and Q4 is not so strong.
I just wanted to look back at the growth we had in Q3, which was I think 41%.
He was a very big quarter in growth and then carrying through that in a in Q4 and the role of travel in Q4 was an increase of 15% I think on the travel and hospitality.
So I think we still have a.
Reasonable growth for Q4 versus Q3, considering we were carried through the.
Q3 are very.
Very big quarter.
Okay, and how about on the license how comfortable are ideal with recycling, especially after your quality into the game.
I'll start off on that.
Well do you foresee ashish any pricing pressure when that contract comes off probably they won't bother anybody off.
There's always negotiations going on with with clients. So we are we haven't.
I haven't anticipated.
Price pressure, but what we've done in our.
Forecasting.
We forecast some modest inflation.
Modest in the sense that it's higher than last year.
And but we've not.
Factored in a price increase.
So once again I think we've taken a fairly conservative stance.
Hence, we imagine the impact on our margins to be between 30% to 32%. So there is a range here.
Due to that specific aspect.
Thank you.
Yeah.
It's a reminder, if you'd like to ask a question. Please press star followed by one on your touch tone telephone.
Next question is from the line of the room.
From Credit Suisse. Please go ahead.
Yeah, Hi, good evening management, congrats on a good set of numbers I've got a few questions are starting to test it on revenues.
But I won't.
There's some sort of guidance.
A question on the revenue front, Oh, so do you have adequate declines.
How long does it take for them to ramp up the I believe the contracts with the.
Bill Clinton.
I believe that next year they should be.
Good.
They can pop so wanted to understand.
Because you mentioned, you're still looking at existing clients.
How much of these didn't decline stuff, that's kind of contributing to what can take action.
And Oh.
Secondly, how many people have you added.
Inside.
Yeah.
Yeah.
And what's your target.
Makes sense.
The organization.
And totally on but let me say it again.
What sort of realistic on gross margin and you're still very much focused on high.
By end market.
Maintaining margin.
Yeah.
You can kind of quote unquote.
At this stage I wanted to capture market share.
And lastly on the content monitoring and what usually.
How should we think about this segment.
For the last two quarters, maybe a little bit.
Is it any more flying W. Boston.
Uh huh.
Yeah.
It's oh shoot.
The motor of not just kind of hoping over the next few quarters.
Hi, Arun.
Nice to hearing you again, so coming back to your first question the 20 clients that we've.
<unk> acquired last year are definitely contributing this year to the revenue they do take time to.
Bring a certain amount of resin renew but every client is different so the way we.
The larger ones with smaller ones, but they will all be contributing a what we've seen in general is that they take about two to.
Two three years to come to maturity and that's what we're monitoring right now in 2022.
We brought in a tool.
2019, 2020 are starting to really contribute.
Contribute to the to the group.
From revenue so.
It does take time.
But we will see some immediate revenue from them in a modestly this year and we've taken that into account in our forecast.
In terms of business development team are I mentioned earlier on that.
We've appointed we talked to all of it tends to accelerate on that front beyond the head count that we've added the three last year.
One of the other another five this this year.
Not as fast as I'd like a in terms of.
In addition, our.
We're really looking for top quality of our personnel.
Personnel in the right geographies.
But oh at least the theaters is really helping us.
<unk> acquired the right caliber of personnel beyond our hiring.
With the <unk>.
Proved on all of them.
Contributions are too.
Also in our advertising and marketing budget, so there's quite a bit of things going on on that front and once again, we're starting to see the results in terms of a new plant.
Acquisitions are on the growth the quality growth we spoke about.
Can you shake the screen quality growth.
The question is can we grow faster with are looking.
We're looking at a wider group of clients.
So we're open to it we're looking at that we're looking at opportunities to expand into new geographies require new verticals like the e-commerce food delivery.
We've acquired a food delivery plan.
And with more growth.
And they could bring us lower margins.
We want to be able to balance that.
Quality growth for volume and maintain the right balance so we're not closing the door on drawing.
Larger volume accounts, when the opportunities arise indirect geographies as well.
So, but you still continue to believe that we can continue to drive more complex work.
And the loss potential.
Central Hall business coming from the.
Complex work on the content moderation side of your question do you expect it to be stable, we don't expect tremendous growth from it at this point in all bunch of 2022 we required a new clients in 'twenty or 'twenty one.
Sometimes with a ration at what we see is an increase in business from trust and safety or some clients, which is related with either a nice uptick also offer data labeling, which all more or less in the same category of business sort of fall to the shifts I hope that answers your question for Arun.
Sure It does.
Lastly, if I can take the that's the confirmation.
Yes, because it's almost like as an employee benefit.
With this one.
They didn't used to treat it as an opportunity for you to answer this question.
Could you repeat that question I can see bits and pieces of it sure.
Kevin This is Jim.
In the U S. Because the stock compensation cost is it all of it in employee benefits.
No.
Okay.
All of them are in and in the employee benefit expense separately.
Okay. Okay. Thank you.
Next question is from a line of Hun Tun from HSBC. Please go ahead.
Okay. Thanks very much.
I can ask a little bit about how does the impact.
You then get seen staying in Nicaragua.
Just thinking about that margin guidance.
32%.
Yeah.
Maybe if you could help us understand the sensitivity impact of color.
On earnings and margins. Thanks.
Mr Chin.
Yeah in our.
Any guidance are we took a stab offline neutral forex assumption.
Assumption.
That's how we ended up.
The year before.
So there is no we didn't take any views on how the U S. Dollar Bill will behave in the coming in the current year.
Yeah.
Yes.
Strengthened by 3%, what what sort of a bunch of them pregnant.
Yeah.
If the dollar.
Thanks Ben.
Because that looks like.
Excellent.
That's 3%.
Oh, how much would that benefit marches in earnings.
Oh, if I mean, if the peso us or the Thai baht move deteriorate against the U S. Dollar. Yes didn't you were you were definitely helped the margins are on a topline basis.
As to how much is it.
It really depends on.
And what great no.
At what rate that we bill and then at what rate that would be a collapse.
Sometimes the timing between our billing and collection can can flux the far.
As far as something that you can be at the top line and then later.
Collection tons, it's the other way on the Forex cause you gotta be upon collection.
It could be neutralized, so essentially so far in <unk>.
Hum.
Conclude it yeah Q4, actually we did have a enjoy a bit of a forex gain.
Because.
I'm talking about that historical trend a 2021 .
The currency of our peso Thai baht, and the Malaysian ringgit actually.
So you sold I think due to the repowering of the strengthening of the U S dollar versus the.
2020, our situation there and we began the year strongly with most cutting to begin to get stronger and then.
Gearing at the plant.
At the onset of Covid and even doing Kobe these currency.
Pun turned around so I think I mean, you asked all the Oh.
Became stronger so in a way one be needed at some oh.
Forex movement in our favor in quite a treat.
And also a bit on some colorful so I would say that that really helps.
On the hypothetical basis maybe.
On a constant currency basis, I would seem to be a percent or two.
It will help on that front.
Okay, and then couldn't understand.
Merchandised According to plan.
The first one.
What what factors.
Are you thinking of.
On the lower end of that range.
Yes.
I would now.
I mean, it will stay within that range I really can't comment.
We will land.
At the lower end or the higher end I would just.
A comment that that would be a quite comfortable to stay within that range, but for now I guess so.
We can come in.
Sort of a better.
Our narrowed guidance after the instance of epic.
Quarter rose by that much I would be able to.
Say for now.
Okay.
Just one last question for me I Wonder if you could tell a bit more about.
Yeah.
Send them.
How should this thing.
Is it more because if you can't.
And is it strictly just a bit.
Okay.
Contribution could be.
Thanks.
Yep.
No.
So yes, the that segments for now is a is not very big so we would call them tactical but.
But it's a nice complement to all services to our clients. So are we.
Well, we're watching it and we are looking at it and Oh, creating value for our clients our rebel segment and that's as it goes further.
Then we will we will see whether it should become a segment.
But now it's an adjacent services to the services. We provide are so the bulk of what we do still.
Omnichannel CX and the cellphone digital marketing.
But where we're all building our competence we are building our client base.
On that sector, and we're definitely watching that space.
Okay.
Okay.
There are no further telephone questions are are there any questions from the webcast.
Ah, yes, do it so I have two questions on the.
What costs are around the same thing is how do you expect revenue concentration to evolve in to anything tool and know how do we expect the top two client concentration through changing things into.
Thank you Jason So we have a concentration.
In 2022, we see it coming down due.
Due to the fact that the.
The plants that are not those are high concentration.
Our clients are growing faster.
And I mentioned, the Fintech I mentioned, some sectors that are bringing us the accelerated growth.
So so that's from that organic growth.
We're seeing a reduction in concentration and they are continuing to monitor this as we want to continue reducing our concentration on possibly accelerates up.
Two other options as well, that's where we're going.
To bring a discipline.
Thanks, Andre sorry, another question on the webcast.
What guidance you provided for Q1 I think he drew a sponsor that we only provide full year guidance for FY 'twenty, two or you did not have a specific guidance for the quarter.
So I think that's 50, we've reached the end of the questions for the wet cast can I check you know for the conference call. We have actually a few more minutes you can take more questions either on the conference call at a less cost.
Any of the end of this on the call would like to ask any more questions.
As a reminder, if he would like to ask a telephone question. Please press star followed by one on your Touchtone telephone.
Yeah.
We have a follow up question from the line of paying fit from Goldman Sachs. Please go ahead.
Yeah.
Alright, Thank you very much.
Quick follow up.
Our current update on what's going on with the Appian you bought him does he have any time line.
Christine.
Should come into play.
Very helpful.
So I think he also that's probably going to have to cut it.
Last time, that's why kind of it sounds you mentioned that's in half one so far.
Oh, the first nine months of 2025.
I tried to find that right I mean back in the fourth quarter at Pall mall clients right.
And any update about the collab I'll come back.
New client activity.
Yeah.
Yeah.
Yes.
Thank you for this question so.
The clients are those are the airbnb a warrant.
A discussion is ongoing.
It's going well and according to our plan I cant provide a particular date.
We'll definitely see a little differently.
Bring it to your attention as soon as we.
We know them.
In terms of coming back to the new clients, we had the comps well.
Interesting sectors in the gaming in the last quarter.
Two clients in the gaming one clients in the tech sector as well another one actually in the social space.
So it's still mostly new economy are all the kind of clients that we are.
You attract and we're able to close them and we're excited about that for sure.
And just to be clear argue just calling out what we expected and mainly in Asia.
The fashion and then kind of come up on Monday.
So it looks like the Rockaway.
Well, there's one in Korea.
The other two are in are in Asia, and then there's one that there's going to be both in Asia and Columbia.
And actually one correct also in Spain as well for us.
It's a mix of geographies.
Okay. Thank you very much.
The work from home.
They also have another follow up question from the line of Casey I'm sure.
That's correct.
Please go ahead.
Hi, Thanks for taking my question again.
Just wanted to come.
From two numbers, that's one I think on the Fintech vertical you did emphasize I guess as a segment. They get excited about last question too.
Just understand better how big is that revenue contribution currently you have seen from from Fintech Trackman.
In FY 'twenty one.
And second question is.
Okay.
Revenue breakdown.
Customer retention rate for FY 'twenty, one as well.
So I'll I'll defer the synthetic question to Mr. Chin in the meantime, the other question is around the retention.
Clients are when you did the revenue weighted average was a 139 this time versus in 2020, I think it was 128%.
So very stable.
The one that felt yeah, let me start.
On the Fintech contribution in 2021 what is the question.
Thank you.
We also have a follow up question from the room, who you from credit Suisse. Please go ahead.
Yeah. Thanks.
Two questions first if you can tell us at a club its fourth quarter and for the overall U S.
Has it been the gentleman in the blind date, so obviously.
When you're going to take me 20, you were kind of thing.
Client base and local petsmart bucket or is that something you Gabe.
Where do you normally strong level of unplanned and number two.
On the new door expansion for the drug.
The feedback looking to add I remember I think you mentioned about Taiwan, something so badly on the line and you saw that expansion that we're looking at.
And given the geographies that you've entered the contributions can be made maybe the right person to how could we think about pharma medium for bus.
Congratulations.
Thank you.
Yeah.
Thank you Vern and so did the client retention was I think the first question.
And so when we were at 79% in the in 2021.
And so that's where we all on the new Geos, Yes, Taiwan is on our list of new countries.
The new list as well for 2022, we're not ready to share that just yet.
We will continue to increase our expansion in the different geos.
And then and then their contribution to revenue is is.
Is it going to take time, Oh, that's what he said before it takes a few years about two to three years and I think I mentioned before we have two strategies, one where we do a strategic.
Entry into a market too.
Add to the network and when we do this we go in without our clients. So it takes two to three years to build this in our revenue, but it's an investment into the future and then we have geographies that you've set up very closely with our clients and those stops yielding revenue stream.
With South Korea, as an example of that it was starting with those clients and and South Korea, and we've already started last year.
So that's that's how we play.
In our budget 2022 we haven't bid out revenue contribution from new deals, but it's still very very moderate at this point.
Thank you.
Okay. I think we just have time to squeeze in one on one very last question on the west cost what's the best way to think about receivables are widely increasing didn't one.
And what's the how do we think about.
EBITDA to free cash flow conversion.
Maybe Mr. Jean do you want to take that.
Yes.
During the year end of 2021 there was some.
Increase eating a bump up in the receivables are.
Primarily due to a couple of the top clients.
<unk> had some administrative.
Challenges hiccups in the a billing process.
Culminating to a large a.
Backlog in the buildings are in the last quarter.
Having said that we have managed to Oh.
<unk> got those buildings.
Billings are paid off in by end of February so, there's a slight hiccup happening on that front on the EBITDA or cash.
Cash flow basis.
You're still looking a healthy.
<unk>.
<unk> is tracking quite healthy me on that.
Fun.
We are still going through careful cash management.
Until it's all working capital.
Or was it as far as our Capex.
Capex are pacing our involuntary if our intent.
Hello.
Planning of our capacities and our business expansion.
Yeah.
Thanks, Mr. Chin I think that's all the time, we have on the call maybe we have a long deep.
Keep some closing remarks, well, thank you very much everyone and.
For your support and then we will see you next quarter. Thank you.
Thanks and goodbye.
Ladies and gentlemen, the conference has now concluded and you may disconnect. Your telephone. Thank you for joining and have a pleasant day goodbye.
Okay.
Yeah.
Yeah.