July 18, 2024

London, United Kingdom & New York, United States & Mumbai, Maharashtra, India

WNS (Holdings) Limited , 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.

• Highlights – Fiscal 2025 First Quarter:
• GAAP Financials
• Revenue of $323.1 million, down 1.0% from $326.5 million in Q1 of last year and down 4.1% from $336.8 million last quarter
• Profit of $28.9 million, compared to $32.0 million in Q1 of last year and $14.5 million last quarter
• Diluted earnings per share of $0.61, compared to $0.64 in Q1 of last year and $0.30 last quarter

• Non-GAAP Financial Measures*
• Revenue less repair payments of $312.4 million, down 1.6% from $317.5 million in Q1 of last year and down 4.1% from $325.9 million last quarter
• Adjusted Net Income (ANI) of $44.0 million, compared to $51.1 million in Q1 of last year and $53.9 million last quarter
• Adjusted diluted earnings per share of $0.93, compared to $1.02 in Q1 of last year and $1.12 last quarter
• Other Metrics
• Added 8 new clients in the quarter, expanded 36 existing relationships
• Days sales outstanding (DSO) at 36 days
• Global headcount of 60,513 as of 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:

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.”