Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the TDCX Inc. First Quarter 2022 Results Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. Presentation will be followed by a question-and-answer session. If you would like to ask a question, you may press star followed by one on your touch tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to management. Please go ahead. Hello, everyone, and welcome to TDCX 2022 first quarter earnings conference call. My name is Jason Lim, Head of Investor Relations. Allow me to introduce management on the call. We have our Executive Chairman, Founder, and CEO, Mr. Laurent Junique, and our CFO, Mr. Chin Tze Neng. Before we continue, I would like to remind you that we will make forward-looking statements which are subject to risks and uncertainties and may not be realized in the future. You should not place undue reliance on any forward-looking statements. Also, this call includes the discussion of certain non-IFRS financial measures, such as adjusted EBITDA, adjusted EBITDA margins, adjusted net income, and adjusted net income margins. For reconciliation of the non-IFRS measures to the closest IFRS measures, please refer to our press release or the Form 6K, which are available on our website. Lastly, we have provided a convenient translation of Singapore dollar into US dollar. This was done at a rate of 1 US dollar to 1.3534 Singapore dollars. This should not be construed as representation that the Singapore dollar amount can be converted into USD at this or any other rate. Our management will now share updates on our operating and financial performance. This will be followed by a Q&A session. With that, let me hand over the call to Laurent. Laurent, please. Thank you, Jason. Welcome to our results briefing for the first quarter of 2022. We're happy to report a strong set of Q1 results despite a volatile operating environment. The TDCX team has demonstrated great resilience and execution despite so much disruption and uncertainties, and a big thanks to them for their incredible contribution. I also want to thank our clients for putting their faith and trust in us. For a change, I would like to start highlighting the good work that was done by our teams on climate change and corporate social responsibility. To begin with, we believe that businesses play an important role in promoting and accelerating sustainability. Given the impact of climate change, we made it a priority to reduce our carbon footprint across our operations globally. I'm happy to share that our carbon neutrality has now been independently verified by a third party. We have received a satisfactory opinion statement from BSI that our carbon footprint report meets the ISO criteria. We achieve carbon neutrality by taking a two-pronged approach. First of all, by reducing our carbon output and offsetting what we are currently unable to reduce through United Nations Climate Neutral Now initiative. We also collaborate very closely with our clients on their sustainability initiatives. In addition, during the quarter, we launched our Women's Empowerment Network. Women are a key part of TDCX success and make up 58% of our workforce with healthy representation in leadership positions. Through the network, we aim to continue to build a diverse and equitable workforce to empower our female colleagues to pursue their career goals and to uplift women in marginalized communities through digital literacy. Let me now cover some highlights of our financial performance. As a result of a joint team effort, our Q1 2022 revenue rose 26.9% to $113 million or SGD 152 million. Adjusted EBITDA was $35 million or SGD 48 million. That's up by 27.6% year-on-year. We maintained our EBITDA margins at 31.3% for Q1 2022 compared to 31.1% in Q1 2021. Adjusted net income, which strips out the performance share plan cost for a like-for-like basis comparison, was up 34.9% to $22 million or SGD 30 million. We continue to generate very strong cash flows. Q1 2022 net cash from operating activities was $37 million, up 188.1% year-on-year. Now for contribution from verticals. We continue to see strong contributions across key verticals. Travel and hospitality staged a rebound and was up 19% compared to Q1 2021. However, this was still 30% below Q1 2020 levels. While clients' orders grow, it takes time to train and onboard talent before the revenue impact flows through for us. Fintech rose at triple-digit percentages year-on-year and has become our third largest vertical at around 15% of group revenues for Q1 2022. We serve payment gateways, crypto exchanges, and other fintech companies requiring a high level of complexity. The crypto space is still only a small part of our business currently, and we are happy with this space. As mentioned before, we're keeping a close watch, especially for market risk around it. On the digital advertising continued with very strong growth trajectory, and we're happy to announce a major new client win with a leading short-form video sharing social media company. That's placing our total number of clients in this space at 4 of the market leaders. This reaffirms our leadership in this particular space, helping digital advertisers support and grow their customer base. All in all, revenue from new economy clients up to 93% of total revenue in Q1. On new client wins, we have continued our business development momentum with 10 new logo wins compared to 4 in Q1 2021. We've won another leading Southeast Asia e-commerce platform. Sectors within these new logos include the e-commerce, fashion, tech, fintech and digital advertising as mentioned earlier. Our client count stands now at 55 as of March 31, up 41% compared to the 39 a year ago. Now, if I look at performance by services, just to recap for those who are joining our call for the first time, our business comprises three key service offerings. One, omnichannel CX solutions. Two, sales and digital marketing services. And three, content monitoring and moderation services. The market opportunities for each of these services remain significant over the medium to long term, as indicated on the slides. The content monitoring and moderation service represents a single business stream for a single client, and is a subset of a larger Trust and Safety market. For Trust and Safety related work, we already clocked in around $4 million a quarter, which is currently classified under the omnichannel CX stream. This includes data annotation work where we help enable machine learning, listing verifications to ensure authenticity and accuracy of listings for rental or sale, as well as the KYC procedures for onboarding of new trading accounts. Such businesses are growing at over 50% year-over-year, and we are now looking into regrouping them into a wider Trust and Safety service grouping moving forward. Watch out for this in the next earnings call. On the geographic expansion front, a quick recap of our geographic presence. We are now in 11 geographies, the 3 latest additions being Romania, India and South Korea. This year we are planning to expand into Indonesia and Vietnam, and we will share more details over time. As our clients start to look into decentralizing their services into new markets, our regional expansion will help us capture these new businesses. Now on our growth strategy, I'd like to reiterate the growth that we have for the longer term. One, continued opportunities to expand business and service offerings with our existing blue-chip clients. Two, strengthening our business development and marketing efforts to accelerate new client growth. Three, a third pillar will be prudent expansion in, into new geographic markets. Fourth, strategic M&A that will complement our capabilities, geographies or client coverage. Last but not least, continuous discipline on operational cost efficiencies as well as productivity. Now, on the current economic environment, we all know the near-term environment remains uncertain as the global economy faces many headwinds such as inflation, the ongoing war and continuing supply chain issues. Clients have become more cautious and are wary of committing. Some of them are slower than expected in implementing projects. As much as our long-term prospects remain intact and our fundamentals are solid, we have decided to make some adjustments to our FY 2022 guidance to reflect the current macroeconomic uncertainties. I will now hand over to Mr. Chin to cover the financials in detail, as well as to provide an update on the guidance. Mr. Chin, over to you. Thank you, Laurent. Let me first share some details on our Q1 2022 financial performance. Revenue rose 26.9% to $113 million. This was driven by growth across the omnichannel CX and sales and digital marketing business segments. Just to recap, we implemented the performance share plan or PSP in November 2021 as a long-term employee incentive program. Therefore, the adjusted EBITDA and adjusted net income metrics exclude the charge from the share-based plan expense to facilitate a like-for-like comparison with the same period last year. Accordingly, adjusted EBITDA rose 27.6% to $35 million. As the EBITDA margin rose marginally to 31.3% for Q1 2022, compared to 31.1% in Q1 2021. Net profit for the period declined 0.6% on a reported basis, due largely to the implementation of the PSP, which did not appear in the same period last year, and to a lesser extent, higher income tax expense. On a like-for-like basis, excluding PSP costs, adjusted net income would have risen by 34.9% to $22 million. Adjusted net income margin would have been 19.8% compared to 18.6% in Q1 2021. Next, we share more details on our Q1 revenue performance by the services we offer and by the geographies in which we operate. Revenue from omnichannel CX solutions rose 25% to $69 million, due mainly to higher business volumes driven by the expansion of existing campaigns. Business volumes of our two travel and hospitality clients benefited from the gradual recovery from the impact of the COVID-19 pandemic. Revenue from sales and digital marketing services increased by 60% to $26 million, with the expansion of existing campaigns for key clients in the digital advertising and media vertical. Revenue from content monitoring and moderation services declined by 3% to $15 million, primarily due to lower revenue per agent in our digital advertising and media vertical. Omni-channel CX now makes up 61% of our business, while sales and digital marketing is at 23% and content moderation 14% respectively. In terms of revenue contribution by key geographies, Singapore rose 7% to $26 million. Philippines rose 23% to twenty-seven million US dollars. Malaysia rose 44% to $34 million. Thailand rose 37% to $60 million. Malaysia continued to be the key landing point for many clients in the region, and we will continue to apply our land and expand strategy to broaden coverage for these clients to the various other geographies. Malaysia's contributions to the group revenue stood at 30% for Q1, while Philippines and Singapore contributed 24% and 23% respectively. Thailand stood at 14%, followed by Japan at 4% and China at 2%. Revenue from new economy clients stood at 93% for Q1 2022. As Laurent shared earlier, we added 10 logos in Q1 compared to 4 logos in the same period last year. Client count stood at 55 as at 31st March 2022, a 41% increase compared to 31st March 2021. Let me next share some details on our expenses. For Q1 2022, operating costs as a percentage of revenue stood at 81.3%. Excluding PSP costs, this stood at 76.1%, marginally lower than 78.6% for the same period of 2021. Employee benefit expense remains the largest portion of our total operating cost base. Our employee benefit expense increased by 39% to $77 million for Q1. If we exclude the PSP costs, employee benefit expense would have increased by 28%, largely in tandem with revenue growth of 27%. Our depreciation expense declined by 4%, largely due to certain renovation assets in Singapore, Thailand and Philippines being fully depreciated during the period. All other expenses, which include items such as recruitment, transport, and telecommunication expenses, rose 8% for Q1 2022, lower than our revenue growth, which demonstrates our focus on cost management. Lastly, let me provide an update on our full year 2022 outlook. While we have achieved a solid Q1 performance, the current business outlook remains uncertain. With the current environment, there is now a wider range of scenarios and possible downside risks. In particular, some clients are holding off on their earlier plans, commitments, and delaying projects. Given this uncertainty, we are being practical about the current environment and erring on the side of caution in terms of our outlook. As such, we are reducing our FY 2022 revenue growth guidance to SGD 650 million-SGD 675 million, or $480 million-$499 million. This is down from SGD 689 million-SGD 702 million or $510 million-$519 million previously. FY 2022 revenue growth at midpoint is expected to be at 19.3% compared to 25.3% previously. This takes into account lower assumptions of revenue growth from our top clients in the digital advertising and media, fintech and e-commerce verticals. This was partly offset by slightly higher growth expectations in the travel and hospitality vertical. With a continued focus on cost efficiencies and productivity, we are maintaining our full year 2022 adjusted EBITDA margins to be approximately 30%-32%. With that, let me hand over back to Laurent. Thanks, Mr. Chin, for taking us through the financials. We're now ready for Q&A. Okay. Thanks, Laurent. We're now going for Q&As. Can I just ask each of you keep yourself to three questions each, please? Operator, please take over. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question, may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question, may press star followed by one at this time. One moment for the first question, please. First question is from the line of Jonathan Woo from Phillip Securities. Please go ahead. Hi, Laurent Junique. Starting the call. I've got two questions. The first would be on your new kind of big clients or big logos you just added, your leading global short-form social media platform as well as your e-commerce platform. I'm just wondering how big, you know, is the initial headcount for these operations, and then what countries are they operating in? What kind of for them. For the second question, mainly be on the outlook. We noticed the revised revenue guidance. Can you shed a bit more color on why the revision in guidance, you know, are there any specific verticals that you expect to slow down? Also, maybe shed a little bit of color on Airbnb pulling out of China, whether you know that affects your business in China. Thank you. Thank you, Jonathan. Hi, everyone. Look, the new logo we're very excited about, for sure, and our new e-commerce client from Southeast Asia as well. On the short form video platform, I think it's a high growth client that's been very successful in disrupting the digital advertising business. We're proud and happy to have been selected for their expansion and their plans. What's interesting about this client is that we are covering them at the first start, both in Singapore and in Barcelona. It's a simultaneous launch across two and actually now three LOBs, lines of business, which will eventually get into a third geography fairly quickly as well. While it's starting small but steady, it's got a great potential growth for especially 2023. It's really reaffirming or confirming TDCX expertise in both sales, support and more for this client and for the other clients we have in this sector. That's exciting for sure. Our e-commerce client will give us also options to expand in new geographies that we are currently working on. That's great. That's for that. Now on the revised guidance, there's no real specific industry or clientele that has been singled out here. There's a bit of a drop in the number of the clients we have. Really on the back of macro environment uncertainty to begin with, things have moved very fast. They're moving very fast. You can see how the stock markets are behaving, and how quickly things are happening, with the prospect of inflation, the ongoing war, and its escalation, the possible recession next year, the impact on supply chain, China. Clients we feel have become more cautious. They are holding back decisions. They're taking a bit longer than expected, and that's reduced our visibility as well. It's a cross vertical to answer your question, Jonathan, but it's in general an overall feeling of softness that's caused us to make that decision to reduce our guidance. We're erring on the side of caution and we'll continue to work really hard to meet that target for sure. We wanted to make sure that we we're aligned with the market conditions of the moment. Just to play into your next question around Airbnb in China, it's one of these unforeseen situations, not expecting it at all. We have not received any warning. I don't think anybody there either had received such warnings. That was definitely a setback. In the grand scheme of things, it's a small part of our business. China is a small part of our business, we will be able to weather that. It's a disappointment for sure and I'm sure for many in general. We'll ride through this and it doesn't alter our commitment to China in general despite the challenges that China is encountering, you know, beyond just that specific challenge. There are challenges everywhere currently in China with the pandemic, which we understand. TDCX is committed to China, in as I've described it in the past. It's really a very focused strategy working with international clients which are an extension of our network needing some very specific work and that's working well for us. We know it's not a very large piece of our business and I hope that answers the question, Jonathan. Thank you. Yeah, it does. Next question is from the line of Pang Vitt from Goldman Sachs. Please go ahead. Hi, good evening, and thank you for the opportunity. Two questions for me. Firstly, on the revenue trend, just want to have a better understanding on a quarter-on-quarter revenue trajectory. We noticed that the omnichannel was a little bit weaker than Q, and specifically the content monitoring as well. Just want to understand why the trend weaker, even though we start to see the recovery in travel segment, what has been the reason? And particularly for the content monitorings, I noticed that one of the reason why we see this lower trend in revenue is because of the lower revenue per agent from your social media clients. How much lower are we talking about? And is this from the renewal of your contract? Will we continue to see pressure through the rest of the year as well? That's question number one. Question number two, circling back to the guidance, you lower it down. Just want to understand, right, how should we think about the growth still on a segment by segment basis with your new guidance? At the same time, why is there no change in margin guidance? Have you been baking any further impact from inflation to your guidance now? Thank you. For the content moderation decline, what I probably want to confirm is that this is a single business line. It's not coming back from a cost reduction or a new contract. It seems to be a seasonal and business adjustment, I would say for that program. Maybe I take this opportunity to mention that content moderation is part of, and we've spoken about this before, but again, of a bigger Trust and Safety work that we do that is classified under OCX, Omni-Channel CX Solutions. And that's clocking at about $4 million a quarter, right? What we see here is actually a classification for content moderation for that single product line that should actually be taking in the overall Trust and Safety work that we do, which is data annotation, KYC, and machine learning support. That's, if I lump it together, grows at about 50% per year on year. It's a fast growth segment of a sub-segment of the OCX. We have mentioned in the call just now that we will be reclassifying in the next quarter. You'll see maybe a better representation of that particular sector, so it's easier for you to look at it or to tackle it because it's not just as hard for us as clients. Now, coming back on the guidance, the question was around. Seasonality. Yeah, the seasonality on the guidance. No. Sorry, seasonality from Q4 to Q1 results. Yeah. From Q4 to Q1 results, I think similar to Q3, which was a big bump in our Q4. Q1 and Q4 are fairly different. In general, Q1 is slightly softer. We have, first of all, in Q1, less days in different geographies than we do have in Q4. In Q4, we also have some bonuses. We have some overtime. These are different quarters. It's not unusual that you will see a Q1 that is softer than your Q4. Pang, I missed a part of your question. I couldn't hear very well. You can please repeat the last part. Sure. The last question is around guidance, in particular, how to think about the guidance on a segment by segment basis. Which segment likely will grow faster and which country as well. Together with that, have you built in any increases in wage inflation in your margin guidance? I noticed that there is no change in margin guidance on the first one. The margins and the difference between the different segments. In the different segments in the guidance, we expect that in a crisis, we expect that sales and digital marketing will do better. We expect omni-channel CX to do a bit less because that's a support function. If our clients, let's say in fintech or in digital advertising, are receiving less requests, less volume, then we'll have a reduction. What we see in general is sales and digital marketing comes into play and helps to counter that. It's been kind of forecast that way in our guidance. As you can see, we have not planned for any margin reduction. Right now, if I look at Q1 as an indicator, we don't see a very big impact on inflation yet. We have to be ready to see that happen in the coming quarters. This is, we factor that in at this point in our guidance that inflation will be mitigated through the way we run our operations and operational efficiency, and in some cases, some price increases in some for some clients. All in all, we've planned it such that it doesn't impact our margins at this point. Thank you. As 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 Varun Ahuja from Credit Suisse. Please go ahead. Yeah. Hi, good evening, management, and thanks for the opportunity. A few questions from me. I wanna touch back on the seasonality part. I remember you mentioning fourth Q that that's a seasonally weak quarter. Now, I understand you're kind of referring Q1 as a seasonally weak quarter. Just wanted to understand are these two more seasonally weak quarters for you, and then we should expect ramp up on the revenue front? That's number one. Number two, I just wanted to understand on the travel part. I missed your comment. I think you mentioned something on the travel, if you can get back again on that front. Overall, how do you see a travel contribution as it's opening up? And then obviously you've acquired a lot of new clients also. How do you marry that with the guidance? I'm trying to figure out, is the existing clients, more specifically your large two clients, maybe the largest client, some pressure there? You're seeing some kind of a reluctance or a cautious view on that front because the expectation is some of the new clients would have started to ramp up or that you've added over the last 12 months or so. That's number 2. Just on number 3, geographic expansion, right? Are you now, given the current macro backdrop, going to open up more offices aggressively? I know you mentioned two, Vietnam and Indonesia, but are your plans to continue to expand? Is it little bit now, cautious mode or you still on the same expansion mode and as it recovery happens, you wanna benefit on that front? That's it. Thank you. Great. Thank you, Varun. Hi. Talking about quarter seasonality, I think a good point that you're bringing here. I think Q3 is where we probably can see the impact of the travel recovery, as much as Q1 is a bit more muted. Q3 is where the impact of travel recovery as it happens. We received very decent orders for ramping up, and we are ramped up. We're starting to see the effects, but they will really truly come in at Q3. So that's the seasonality, if you'd like. Q4 end of the year. Q1, depending on the region, will be a bit more muted. Q3 will pick up on the travel side. That's linking to your second question on the travel. Yes, we do see some impact on the airline work we do. It's significant, but it's a small part of our business. On our large hospitality business, it's also a nice pickup as well, and that's been put in our forecast. The other clients which are in fintech or in digital advertising have probably a more muted growth for the following quarters. By the same token, the new business that we've brought in is taking a little bit slower than expected to materialize, whether it's e-commerce, whether this is the short-form video platform that we're launching. It was supposed to launch much earlier, to be honest. It's about to launch. We're doing training right now. I was hoping it would have started earlier. There's been some delays in general, and all these contribute to that revised guidance. Now, on the geographical expansion, whether we wanna stay the course, yes. The objective for TDCX is to expand in more geographies, as we said before, in a prudent manner. We need them. We need those geos to attract more business from our clients. That land and expand strategy is more valid today than ever before. It also provides us a hedge to provide also more competitive services should we need to do so and to grab more market share in those expanding markets that we've identified. We are staying the course. We've revised our guidance. It's 19.3%. It's a good guidance. It's a good growth number. It's not what I want, but it's what it is. Sure. Can I ask two more questions? There are no questions on the queue. Otherwise, I'll get back on the queue. Yeah, we do have a couple more callers on the queue, Varun. Yeah. Maybe- Sure. I'll get back on the queue. Yeah. Thank you. Bye. Next question is from the line of Sean Hyatt from Zeta Capital. Please go ahead. Hi. Thanks, management, for giving me the opportunity to ask questions here. I have a few questions and I'll go one at a time for your convenience. The two large clients you have added that you highlighted to us this quarter, how material is their business today and how do you see that business in a year's time? Thank you, Sean. We've added 10 new clients in the quarter, in Q1, right? For the ten new logos. Those two clients that you're saying are significant will contribute this year. They will really start pulling their weight in 2023, 2024. The other eight logos as well will show up a bit more in 2023. We're already mid-year. It's not gonna have a massive impact on this year, but we have factored that in our forecast. Understand. My second question on the hospitality and travel vertical. You mentioned earlier about seeing a recovery in Q3 as things reopen. How large is that segment today, and what kind of recovery trajectory, you know, versus 2019, do you expect in Q3? Look, in Q1, it was 19% up, right, compared to last year, but it was still lower by 30% compared to 2020, 2019. All right. During pre-COVID time, there's still potential to grow. It's a good recovery, but once again, I would have hoped for more. It's not as massive as I was anticipating. We had taken a conservative stance anyway in our forecast. We wanted to be on the side of caution as well. Understand. Just so I hear correctly, the 19%, is it 19% of Q1 revenue is from the hospitality and travel segment? No, it grew by 19% compared to 2021, for us. Got it. Understand. My last question, have you seen this trend whereby, you know, tech companies, your clients, who are cost cutting in this environment today, and shifting their workforce from internally to outsourced, given it's likely cheaper for them to outsource function to guys like yourself and the industry? Are you seeing that trend yourself in this region? The trend of outsourcing to cut costs. That's right. From tech companies. Yeah. Yeah, Yeah, from tech companies. I think it's not new. They've been doing that for quite some time. The possible trend that may come up is the rise of the CPI in North America, and as a result, labor inflation that could cause more clients to consider offshoring to mitigate that. There's labor tension as well. Difficulty to find the people to do the job is a sign that clients may be looking for these options. It's not a new trend. I just think it may accelerate. We don't see it immediately on our forecast at this point, but this is a trend that could be developing for sure. Understand. Thanks a lot. Thanks, Laurent. Welcome. Just 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 Han Tan from HSBC. Please go ahead. Hello, good evening. Can I just ask two questions, please? First question, have you seen any increase in churn as a result of the macro situation? Can you share a little of your latest retention rate, either by revenue or by client count? Yes. What we've seen since 2021, we see an increase in attrition. Can you hear me? Yeah. We see an increase in attrition, and that's continued so far the first quarter of 2022. We see a bit of tapering in April, but we're not crying victory. There's different reasons for this. The first one we believe is work from home makes it very easy for someone to switch job. They don't need to have a consideration of whether this office is near my home, for example. They can switch job very quickly and have a laptop delivered to their home. That ease of transferring is appealing, not to mention the demand and some of the shifts that you're gonna see. Some people have... Where in the travel, they lost their job, then they moved into a company like ours, for example, and then now the hotel is recruiting, they're gonna be tempted to go back. There's gonna be some labor demand that's causing a staff turnover. There are many options available now for employees who work for our types of organizations. Fortunately, we are in the higher end, more complex type of work. We hire people. Many of our people are expatriates on an offshore basis. That helps mitigate. We believe we're tracking below some of our peers. We don't have. I cannot confirm those numbers because they're not independently confirmed. We're still able to manage. We're able to manage with those increased attrition numbers, and we're able to deliver the headcount that we're looking for. It's not getting easier, that's for sure. It's not easier for our clients. Our clients are also telling us the same, that they're having challenges. We've taken steps to address this from a structure point of view with the global head of talent acquisition, and we're pushing ahead further in measures and actions to make sure that we still are able to deliver the important quality resources our client are trusting us to deliver for them. Thanks very much. Second question on share-based expense. Do you expect this to be front-loaded in the first quarter, or should we expect a similar amount in the next few quarters? Share-based expense? Yeah, the PSP costs that we have. Mr. Chin is on the call. Hello. Yes. Hi. Yes. Hi. Mr. Chin, can you answer this question? Yeah. It is an effect of amortization that the PSP was launched in November, so there was a two-month accounting for the PSP in quarter four as opposed to a full three months in Q1. It is a front-loaded issue, as you said, and over the next few quarters, it will taper out from the current figure. Also due to there being a few tranches of the PSP that was taken care of. In the next few quarters, there will be one last tranche that will be handled as opposed to full tranches that was accounted for in Q4 and Q1 already. Yeah. Okay. Thank you. I think just speaking a final question, I want to ask, TaskUs has expanded outside of tech clients, right? Is this something you might consider doing given that, sort of the short-term trends within, the old traditional economy clients are much better than tech clients? Is that something you think you might do? Yes, for sure. I mean, we're not turning down any particular clients, and some of them are from the more traditional economy. We're definitely looking at those clients as well, where they are looking for digital transformation, where they're looking for high-quality services. And then we've onboarded some or expanded on some existing traditional economy logos recently in Thailand, for example. We've acquired a client in that field in Colombia in quarter one as well. Yes, absolutely. I think there was a question earlier on that I didn't really pick up properly. It was about client retention. Maybe I address this here quickly. Client retention has increased from Q1 2021 to Q1 2022. It stands at 125% by net revenue retention rate versus it was about 113% in the prior year. We're retaining our clients. We're retaining our revenue. The business is solid. Okay. That's very helpful. Thanks so much. I think next up we have a call, a question on the webcast from Wilson Wong, Gencon. How big in terms of sales was travel and hospitality in 1Q 2022? I can take this. I think it's for 1Q around 19% of group revenues, travel and hospitality sector. I think that's actually all the questions we have on the webcast as well as the call. I think we will just hold a short while, see if there's any questions coming in for the next minute or so. If not, then now we will sort of end. Oh, sorry, I shouldn't have said too fast, right? The next question. Operator, please take over. We have a question on the line. Okay. Thank you. We have a question from the line of KC Ong from CGS-CIMB. Please go ahead. Hi. Thanks for taking my question. I have a few quick questions. Firstly, on your new customer win regarding the short-form video platform. May I confirm which segment will they be contributing? Is it OCX or is it the sales and digital marketing segment? It will be both. That's what's interesting about it, because if I compare them to the other clients we had acquired in 2012 and 2015, we started with just one product line, one geo. This one, we're starting two product lines in two geos, expanding into a third one. It's interesting how the pace of expansion is different a few years later. Yeah, that answers the question. Okay. Thank you. That's very exciting. Secondly, of course, I think near term you are lowering your revenue guidance because of some uncertainties regarding some customers maybe pulling back a bit in terms of making decisions. Maybe can you comment a bit more on how do you see your medium to longer term growth profile? Yeah, any comments would be helpful. Oh, thank you for this question, really. Look, the fundamentals have not changed. We're in the faster growing region. New economy companies need our service. These are exceptional circumstances. We've had years of COVID. As we thought we were gonna come out of it's back again with the prospect of a recession. This is not a normal environment. Assuming the macro backdrop stabilizes, our long-term growth outlook does not change. We'll be back with our growth plans. Look, it's pretty much what we had anticipated that is gonna happen if the macro backdrop stabilizes in terms of our growth outlook. There's no changes for the long term, 2023, 2024. That's where we stand at this point. The fundamentals are good. We're doing well. We're acquiring new customers. We're expanding geos. We're performing well. Our margins are holding up. We just have to bear with the short-term blip, and we'll be able to ride it through. Okay, I understand. Nothing structural. I guess as you mentioned previously, customers are still continuing to outsource part of their work to third-party, et cetera. These are the trends that are still ongoing. Completely. Okay. Got it. Last question is on M&A. I guess with the recent stock market weakness, just wondering if you have seen, you know, private company valuations has also come down with this. Are we closer to, you know, acquiring any company? Yeah. Because we do have a very strong cash pile on hand. Yes, absolutely, and we want to make this put it to work. Look, yes, our pipeline is growing with very interesting targets and a nice range of targets that we're talking to. As you know, M&A takes time and we have to make sure that the price will adjust to the markets, which it will unavoidably. It's a question of time. We're looking for quality targets, profitable companies that really add to our story and add to our strategic position. Our team has really worked really hard and I'm very confident of the opportunities. We'll announce when we have really closed the deal. Right now we're still building the pipeline. Got it. Thank you. That's all the questions I have. Thank you. We have a follow-up question from the line of Varun Ahuja from Credit Suisse. Please go ahead. Yeah, no, thanks. Just wanna follow up on this capital allocation thing. I wanna talk about a little bit different, dividends, right? Have you changed your thought process around it since IPO time, given you have interacted with so many investors now? Looking at the free cash flow yield is so strong, is there any way you're thinking about it? Or rather, I should ask, what would kind of make you pay dividends? What are the data points that you're looking at from that perspective, right? I know there aren't many things there in the capital allocation, but judging by you won't go for a big bang M&A. Just wanted to hear your thoughts on that. Lastly, one other thing I wanted to check is one of your obviously global peer TaskUs is kind of mentioning they are seeing pressure wherein they've been offshoring some of the US work to low cost location and hence seeing revenue and costs both have an impact. You have a high cost location of Singapore. Are you seeing some kind of a talks with your clients about the same? Thank you. No. Great question on the dividends, Varun. So look, the plan has not changed. We went to market on the first of October. It still feels like yesterday for me, although the numbers are very different as we speak. The company is high growth, even at 19.3%. We're one of the fastest growing in our sector, probably the second fastest growing with this kind of numbers. We have a plan for M&A. And I don't think it would be wise at this moment, given the current market situation, to jump into giving dividends so early in our history. It's not immediately on the plans. The story that you were mentioning about offshoring from a high-cost location in the U.S. into lower-cost locations of India and the Philippines is an interesting trend that we watch and where we are ready to do business, as business is becoming increasingly difficult to do in North America and increasingly expensive. Singapore is a different world in a way where we're doing multilingual work of a very high-end or a very domestic work for clients from the government, for example, which need to be operating from Singapore. We have a bit of it of some of our work that has been moved into our other locations. That's why we have a moderate growth outlook into Singapore, which we had planned and anticipated. We're growing our network, but it's not at a severe pace at this point. Very clear. Thank you very much, Laurent Junique. You're welcome, Varun. There are no further questions at this time, and I would like to turn back to management for any closing comments. Please go ahead. Well, thank you, everyone. Okay. Thanks, everybody, for dialing in and spending time with us. You know, if you have any other questions, please feel free to reach out to us. You know, have a good evening or morning, wherever you are. Thank you. Bye-bye. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.