WNS Announces Fiscal 2025 First Quarter Earnings, Revises Full Year Guidance
18.07.2024 - 12:30:53
Business Wire IndiaWNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global digital-led Business Process Management (BPM) solutions, today announced results for the fiscal 2025 first quarter ended June 30, 2024.
As announced previously, beginning this quarter WNS transitioned from reporting to the SEC on the forms available to foreign private issuers and preparing its financial statements in accordance with IFRS to voluntarily reporting on US domestic issuer forms and preparing its financial statements in accordance with US GAAP. On July 9, 2024, WNS furnished a report on Form 8-K with the SEC containing a supplementary financial information package comprising its unaudited quarterly financial results for each of the quarters in fiscal 2024 and for full year fiscal 2024 and 2023 prepared in accordance with US GAAP. The supplementary financial information package sets forth the key impact on our quarterly financial statements for each of the quarters in fiscal 2024 and for full year fiscal 2024 and 2023 as a result of our transition to US GAAP. The comparative financial information in this release for the previous fiscal periods are also under US GAAP.
Reconciliations of the non-GAAP financial measures discussed below to our GAAP operating results are included at the end of this release. See also “About Non-GAAP Financial Measures.”
Revenue in the first quarter was $323.1 million, representing a 1.0% decrease versus Q1 of last year and a decrease of 4.1% from the previous quarter. Revenue less repair payments* in the first quarter was $312.4 million, decreasing 1.6% year-over-year and 4.1% sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal first quarter was down 1.8% versus Q1 of last year and 3.9% sequentially. Year-over-year, Q1 revenue declined as a result of the offshore delivery transition of a large internet client, volume reductions with certain clients, particularly in our travel vertical, and reductions in discretionary project work. These headwinds were partially offset by new client additions, the expansion of existing relationships, and favorable currency movements. Sequentially, volume reductions with certain clients, ongoing project weakness, and unfavorable currency movements more than offset solid demand for business transformation and cost-reduction-focused initiatives.
Profit in the fiscal first quarter was $28.9 million, as compared to $32.0 million in Q1 of last year and $14.5 million in the previous quarter. Year-over-year, profit decreased as a result of lower revenue, higher SG&A expenses, an increase in net interest expense, and a higher effective tax rate. These headwinds were partially offset by reductions in share-based compensation expense, amortization of intangibles, and favorable currency movements. Sequentially, Q1 profit increased as a result of a $30.9 million intangible asset impairment recorded in Q4 of last year, and a reduction in expenses associated with our ADS program termination and transition to voluntarily reporting on US domestic issuer forms. These benefits were partially offset by lower revenue, higher share-based compensation expense, higher SG&A expenses, an increase in net interest expense, a higher effective tax rate, and unfavorable currency movements.
Adjusted net income (ANI)* in Q1 was $44.0 million, as compared to $51.1 million in Q1 of last year and $53.9 million in the previous quarter. Explanations for the ANI* movements on a year-over-year and sequential basis are the same as described for GAAP profit above with the exception of amortization of intangible expenses, share-based compensation expense, impairment of intangible assets, costs associated with ADS program termination and transition to voluntarily reporting on US domestic issuer forms, acquisition-related items, and associated tax impacts which are excluded from ANI*.
From a balance sheet perspective, WNS ended Q1 with $301.5 million in cash and investments and $301.5 million in debt. In the quarter, the company generated $21.4 million in cash from operations, incurred $10.7 million in capital expenditures, and repaid $10.5 million in debt. WNS also repurchased 1,643,731 ordinary shares at an average price of $51.24, impacting Q1 cash by $78.0 million. First quarter days sales outstanding were 36 days, as compared to 34 days reported in Q1 of last year and 33 days in the previous quarter.
“Our first quarter results were largely in line with company expectations and highlight some of the opportunities and challenges in our business today. Demand for digitally-led business transformation and cost reduction continues to be robust, including larger deals and a strengthening pipeline. At the same time, we continue to see headwinds from declining client volumes, particularly in the travel vertical, and reduced demand for project-based work,” said Keshav Murugesh, WNS’ Chief Executive Officer. “WNS is confident that our strategic growth initiatives are well underway, and that successful execution through the remainder of this year will position the company well entering fiscal 2026. In addition, we remain committed to investing ahead of the curve in technology-enabled offerings leveraging AI and GenAI, improving our access to capital, and opportunistically repurchasing stock.”
Fiscal 2025 Guidance
WNS is updating guidance for the fiscal year ending March 31, 2025, as follows:
“The company has updated our forecast for fiscal 2025 based on current visibility levels and exchange rates,” said Sanjay Puria, WNS’ Chief Financial Officer. “Our guidance for the full year reflects growth in revenue less repair payments* of 0% to 5% on both a reported* and constant currency* basis. For the year, we continue to expect capital expenditures of up to $65 million.”
*See “About Non-GAAP Financial Measures” and the reconciliations of the historical non-GAAP financial measures to our GAAP operating results at the end of this release.
Conference Call
WNS will host a conference call on July 18, 2024, at 8:00 am (Eastern) to discuss the company's quarterly results. To access the call in “listen-only” mode, please join live via the company’s investor relations website at to receive your dial-in number and unique PIN/passcode which can be used to access the call. A replay of the webcast will be archived on the company website at ir.wns.com.
About WNS
WNS (Holdings) Limited (NYSE: WNS) is a leading Business Process Management (BPM) company. WNS combines deep industry knowledge with technology, analytics, and process expertise to co-create innovative, digitally led transformational solutions with over 600 clients across various industries. WNS delivers an entire spectrum of BPM solutions including industry-specific offerings, customer experience services, finance and accounting, human resources, procurement, and research and analytics to re-imagine the digital future of businesses. As of June 30, 2024, WNS had 60,513 professionals across 64 delivery centers worldwide including facilities in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the United Kingdom, and the United States. For more information, visit www.wns.com.
Safe Harbor Statement
This release contains forward-looking statements, as defined in the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations and assumptions about our Company and our industry. Generally, these forward-looking statements may be identified by the use of terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “seek,” “should” and similar expressions. These statements include, among other things, expressed or implied forward-looking statements relating to discussions of our strategic initiatives and the expected resulting benefits, our growth opportunities, industry environment, our expectations concerning our future financial performance and growth potential, including our fiscal 2025 guidance, estimated capital expenditures, and expected foreign currency exchange rates. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include but are not limited to worldwide economic and business conditions, our dependence on a limited number of clients in a limited number of industries; currency fluctuations; political or economic instability in the jurisdictions where we have operations; regulatory, legislative and judicial developments; increasing competition in the BPM industry; technological innovation; our liability arising from fraud or unauthorized disclosure of sensitive or confidential client and customer data; telecommunications or technology disruptions; our ability to attract and retain clients; negative public reaction in the US or the UK to offshore outsourcing; our ability to collect our receivables from, or bill our unbilled services to our clients; our ability to expand our business or effectively manage growth; our ability to hire and retain enough sufficiently trained employees to support our operations; the effects of our different pricing strategies or those of our competitors; our ability to successfully consummate, integrate and achieve accretive benefits from our strategic acquisitions, and to successfully grow our revenue and expand our service offerings and market share; future regulatory actions and conditions in our operating areas; our ability to manage the impact of climate change on our business; volatility of our share price; the possibility of a resurgence of coronavirus disease 2019 pandemic and related impact on our and our clients’ business, financial condition, results of operations and cash flows; and our ability to transition to reporting on US domestic issuer forms. These and other factors are more fully discussed in our most recent annual report on Form 20-F and subsequent reports on Form 6-K and Form 8-K filed with or furnished to the US Securities and Exchange Commission (SEC) which are available at www.sec.gov. We caution you not to place undue reliance on any forward-looking statements. Except as required by law, we do not undertake to update any forward-looking statements to reflect future events or circumstances.
References to “$” and “USD” refer to the United States dollars, the legal currency of the United States; references to “GBP” refer to the British pound, the legal currency of Britain; and references to “INR” refer to Indian Rupees, the legal currency of India. References to GAAP or US GAAP refer to United States generally accepted accounting principles. References to IFRS refer to International Financial Reporting Standards, as issued by the International Accounting Standards Board.
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, amounts in millions, except share and per share data)
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, amounts in millions, except share and per share data)
| Highlights – Fiscal 2025 First Quarter: |
GAAP Financials
Non-GAAP Financial Measures*
Other Metrics
|
As announced previously, beginning this quarter WNS transitioned from reporting to the SEC on the forms available to foreign private issuers and preparing its financial statements in accordance with IFRS to voluntarily reporting on US domestic issuer forms and preparing its financial statements in accordance with US GAAP. On July 9, 2024, WNS furnished a report on Form 8-K with the SEC containing a supplementary financial information package comprising its unaudited quarterly financial results for each of the quarters in fiscal 2024 and for full year fiscal 2024 and 2023 prepared in accordance with US GAAP. The supplementary financial information package sets forth the key impact on our quarterly financial statements for each of the quarters in fiscal 2024 and for full year fiscal 2024 and 2023 as a result of our transition to US GAAP. The comparative financial information in this release for the previous fiscal periods are also under US GAAP.
Reconciliations of the non-GAAP financial measures discussed below to our GAAP operating results are included at the end of this release. See also “About Non-GAAP Financial Measures.”
Revenue in the first quarter was $323.1 million, representing a 1.0% decrease versus Q1 of last year and a decrease of 4.1% from the previous quarter. Revenue less repair payments* in the first quarter was $312.4 million, decreasing 1.6% year-over-year and 4.1% sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal first quarter was down 1.8% versus Q1 of last year and 3.9% sequentially. Year-over-year, Q1 revenue declined as a result of the offshore delivery transition of a large internet client, volume reductions with certain clients, particularly in our travel vertical, and reductions in discretionary project work. These headwinds were partially offset by new client additions, the expansion of existing relationships, and favorable currency movements. Sequentially, volume reductions with certain clients, ongoing project weakness, and unfavorable currency movements more than offset solid demand for business transformation and cost-reduction-focused initiatives.
Profit in the fiscal first quarter was $28.9 million, as compared to $32.0 million in Q1 of last year and $14.5 million in the previous quarter. Year-over-year, profit decreased as a result of lower revenue, higher SG&A expenses, an increase in net interest expense, and a higher effective tax rate. These headwinds were partially offset by reductions in share-based compensation expense, amortization of intangibles, and favorable currency movements. Sequentially, Q1 profit increased as a result of a $30.9 million intangible asset impairment recorded in Q4 of last year, and a reduction in expenses associated with our ADS program termination and transition to voluntarily reporting on US domestic issuer forms. These benefits were partially offset by lower revenue, higher share-based compensation expense, higher SG&A expenses, an increase in net interest expense, a higher effective tax rate, and unfavorable currency movements.
Adjusted net income (ANI)* in Q1 was $44.0 million, as compared to $51.1 million in Q1 of last year and $53.9 million in the previous quarter. Explanations for the ANI* movements on a year-over-year and sequential basis are the same as described for GAAP profit above with the exception of amortization of intangible expenses, share-based compensation expense, impairment of intangible assets, costs associated with ADS program termination and transition to voluntarily reporting on US domestic issuer forms, acquisition-related items, and associated tax impacts which are excluded from ANI*.
From a balance sheet perspective, WNS ended Q1 with $301.5 million in cash and investments and $301.5 million in debt. In the quarter, the company generated $21.4 million in cash from operations, incurred $10.7 million in capital expenditures, and repaid $10.5 million in debt. WNS also repurchased 1,643,731 ordinary shares at an average price of $51.24, impacting Q1 cash by $78.0 million. First quarter days sales outstanding were 36 days, as compared to 34 days reported in Q1 of last year and 33 days in the previous quarter.
“Our first quarter results were largely in line with company expectations and highlight some of the opportunities and challenges in our business today. Demand for digitally-led business transformation and cost reduction continues to be robust, including larger deals and a strengthening pipeline. At the same time, we continue to see headwinds from declining client volumes, particularly in the travel vertical, and reduced demand for project-based work,” said Keshav Murugesh, WNS’ Chief Executive Officer. “WNS is confident that our strategic growth initiatives are well underway, and that successful execution through the remainder of this year will position the company well entering fiscal 2026. In addition, we remain committed to investing ahead of the curve in technology-enabled offerings leveraging AI and GenAI, improving our access to capital, and opportunistically repurchasing stock.”
Fiscal 2025 Guidance
WNS is updating guidance for the fiscal year ending March 31, 2025, as follows:
- Revenue less repair payments* is expected to be between $1,290 million and $1,354 million, up from $1,284.3 million in fiscal 2024. Guidance assumes an average GBP to USD exchange rate of 1.28 for the remainder of fiscal 2025.
- ANI* is expected to range between $203 million and $215 million versus $218.0 million in fiscal 2024. Guidance assumes an average USD to INR exchange rate of 83.4 for the remainder of fiscal 2025.
- Based on a diluted share count of 45.9 million shares, the company expects fiscal 2025 adjusted diluted earnings per share* to be in the range of $4.42 to $4.68 versus $4.42 in fiscal 2024.
“The company has updated our forecast for fiscal 2025 based on current visibility levels and exchange rates,” said Sanjay Puria, WNS’ Chief Financial Officer. “Our guidance for the full year reflects growth in revenue less repair payments* of 0% to 5% on both a reported* and constant currency* basis. For the year, we continue to expect capital expenditures of up to $65 million.”
*See “About Non-GAAP Financial Measures” and the reconciliations of the historical non-GAAP financial measures to our GAAP operating results at the end of this release.
Conference Call
WNS will host a conference call on July 18, 2024, at 8:00 am (Eastern) to discuss the company's quarterly results. To access the call in “listen-only” mode, please join live via the company’s investor relations website at to receive your dial-in number and unique PIN/passcode which can be used to access the call. A replay of the webcast will be archived on the company website at ir.wns.com.
About WNS
WNS (Holdings) Limited (NYSE: WNS) is a leading Business Process Management (BPM) company. WNS combines deep industry knowledge with technology, analytics, and process expertise to co-create innovative, digitally led transformational solutions with over 600 clients across various industries. WNS delivers an entire spectrum of BPM solutions including industry-specific offerings, customer experience services, finance and accounting, human resources, procurement, and research and analytics to re-imagine the digital future of businesses. As of June 30, 2024, WNS had 60,513 professionals across 64 delivery centers worldwide including facilities in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the United Kingdom, and the United States. For more information, visit www.wns.com.
Safe Harbor Statement
This release contains forward-looking statements, as defined in the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations and assumptions about our Company and our industry. Generally, these forward-looking statements may be identified by the use of terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “seek,” “should” and similar expressions. These statements include, among other things, expressed or implied forward-looking statements relating to discussions of our strategic initiatives and the expected resulting benefits, our growth opportunities, industry environment, our expectations concerning our future financial performance and growth potential, including our fiscal 2025 guidance, estimated capital expenditures, and expected foreign currency exchange rates. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include but are not limited to worldwide economic and business conditions, our dependence on a limited number of clients in a limited number of industries; currency fluctuations; political or economic instability in the jurisdictions where we have operations; regulatory, legislative and judicial developments; increasing competition in the BPM industry; technological innovation; our liability arising from fraud or unauthorized disclosure of sensitive or confidential client and customer data; telecommunications or technology disruptions; our ability to attract and retain clients; negative public reaction in the US or the UK to offshore outsourcing; our ability to collect our receivables from, or bill our unbilled services to our clients; our ability to expand our business or effectively manage growth; our ability to hire and retain enough sufficiently trained employees to support our operations; the effects of our different pricing strategies or those of our competitors; our ability to successfully consummate, integrate and achieve accretive benefits from our strategic acquisitions, and to successfully grow our revenue and expand our service offerings and market share; future regulatory actions and conditions in our operating areas; our ability to manage the impact of climate change on our business; volatility of our share price; the possibility of a resurgence of coronavirus disease 2019 pandemic and related impact on our and our clients’ business, financial condition, results of operations and cash flows; and our ability to transition to reporting on US domestic issuer forms. These and other factors are more fully discussed in our most recent annual report on Form 20-F and subsequent reports on Form 6-K and Form 8-K filed with or furnished to the US Securities and Exchange Commission (SEC) which are available at www.sec.gov. We caution you not to place undue reliance on any forward-looking statements. Except as required by law, we do not undertake to update any forward-looking statements to reflect future events or circumstances.
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, amounts in millions, except share and per share data)
| Three months ended | |||||||||||||||
| Jun 30, 2024 |
Jun 30, 2023 |
Mar 31, 2024 |
|||||||||||||
| Revenue | $ | 323.1 | $ | 326.5 | $ | 336.8 | |||||||||
| Cost of revenue (1) | 209.4 | 213.9 | 217.7 | ||||||||||||
| Gross profit | 113.7 | 112.6 | 119.1 | ||||||||||||
| Operating expenses: | |||||||||||||||
|
Selling and marketing expenses
|
21.5 | 20.0 | 19.3 | ||||||||||||
|
General and administrative expenses
|
45.7 | 46.9 | 45.2 | ||||||||||||
|
Foreign exchange loss/ (gain), net
|
1.0 | (0.9) | (0.3) | ||||||||||||
|
Amortization of intangible assets
|
6.9 | 8.7 | 7.0 | ||||||||||||
|
Impairment of intangible assets
|
— | — | 30.9 | ||||||||||||
| Operating income | 38.6 | 37.9 | 16.9 | ||||||||||||
| Other income, net | (3.9) | (4.8) | (4.9 | ) | |||||||||||
| Interest expense | 4.4 | 3.6 | 3.8 | ||||||||||||
| Income before income tax expense | 38.0 | 39.0 | 18.0 | ||||||||||||
| Income tax expenses | 9.1 | 7.0 | 3.5 | ||||||||||||
| Net income | $ | 28.9 | $ | 32.0 | $ | 14.5 | |||||||||
| Earnings per share | |||||||||||||||
|
Basic
|
$ | 0.64 | $ | 0.67 | $ | 0.31 | |||||||||
|
Diluted
|
$ | 0.61 | $ | 0.64 | $ | 0.30 | |||||||||
| Weighted average number of shares used in computing earnings per share | |||||||||||||||
| Basic | 45,443,899 | 47,997,486 | 46,274,349 | ||||||||||||
| Diluted | 47,425,017 | 50,259,257 | 48,252,531 | ||||||||||||
| (1) Exclusive of amortization expense | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, amounts in millions, except share and per share data)
| As at Jun 30, 2024 |
As at Mar 31, 2024 |
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| ASSETS | ||||||||
| Current assets: | @ businesswireindia.com
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