New York, United States & Mumbai, Maharashtra, India: WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global Business Process Management (BPM) solutions, today announced results for the fiscal 2023 first quarter ended June 30, 2022.
|Highlights – Fiscal 2023 First Quarter:|
- Revenue of $295.3 million, up 16.6% from $253.2 million in Q1 of last year and down 1.2% from $298.8 million last quarter.
- Profit of $33.1 million, compared to $26.8 million in Q1 of last year and $38.9 million last quarter.
- Diluted earnings per ADS of $0.65, compared to $0.52 in Q1 of last year and $0.76 last quarter.
Non-GAAP Financial Measures*
- Revenue less repair payments of $274.8 million, up 16.3% from $236.3 million in Q1 of last year and down 0.1% from $275.0 million last quarter.
- Adjusted Net Income (ANI) of $45.9 million, compared to $39.0 million in Q1 of last year and $48.3 million last quarter.
- Adjusted diluted earnings per ADS of $0.90, compared to $0.76 in Q1 of last year and $0.95 last quarter.
- Added 7 new clients in the quarter, expanded 30 existing relationships.
- Days sales outstanding (DSO) at 29 days.
- Global headcount of 55,146 as of June 30, 2022
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 $295.3 million, representing a 16.6% increase versus Q1 of last year and a 1.2% decrease from the previous quarter. Revenue less repair payments* in the first quarter was $274.8 million, an increase of 16.3% year-over-year and decrease of 0.1% sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal first quarter was up 20.8% versus Q1 of last year and 2.0% sequentially. Year-over-year, fiscal Q1 revenue improved as a result of new client additions, the expansion of existing relationships, and increased travel volumes which more than offset unfavorable currency movements net of hedging. Sequentially, underlying revenue momentum was masked by currency depreciation and the impact of contractual productivity commitments to certain clients.
Profit in the fiscal first quarter was $33.1 million, as compared to $26.8 million in Q1 of last year and $38.9 million in the previous quarter. Year-over-year, profit increased as a result of revenue growth, improved productivity, and favorable currency movements net of hedging. These benefits more than offset the impact of wage increases, increased facility-related and travel costs, and one-time benefits in Q1 of last year from interest income associated with a tax refund and a tax benefit on liquid mutual funds. Sequentially, Q1 profit decreased as a result of wage increases, higher share-based compensation expense, increased travel and facility-related costs, lower interest income resulting from a $0.6 million benefit from interest income on a tax refund in Q4, and a higher effective tax rate. These headwinds were partially offset by improved productivity and reduced SG&A costs driven by Q4 bonus and incentive amounts.
Adjusted net income (ANI)* in Q1 was $45.9 million, as compared to $39.0 million in Q1 of last year and $48.3 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 costs and associated tax impacts, which are excluded from ANI. 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.
From a balance sheet perspective, WNS ended Q1 with $373.5 million in cash and investments and $31.7 million in short-term debt. In addition, the company has also taken an $80.0 million term loan for general corporate purposes on July 7, 2022. In the first quarter, the company generated $15.8 million in cash from operations and incurred $10.9 million in capital expenditures. WNS also repurchased 741,618 ADSs at an average price of $72.48 per ADS, which impacted Q1 cash by $51.2 million. First quarter days sales outstanding were 29 days, as compared to 32 days reported in Q1 of last year and 30 days in the previous quarter.
“We are pleased with our financial results for the fiscal first quarter and our enhanced outlook for the full year which includes the acquisition of Vuram – a global leader in intelligent automation services,” said Keshav Murugesh, WNS’ Chief Executive Officer. “Despite the weakening macro environment, we continue to see stability in our existing relationships and strength in demand for our solutions which deliver both strategic transformational benefits and cost savings. With this healthy backdrop for BPM, WNS is investing for the future by adding differentiated capabilities which we believe help us address the expanding and evolving BPM market.”
Fiscal 2023 Guidance
WNS is updating guidance for the fiscal year ending March 31, 2023, as follows:
- Revenue less repair payments* is expected to be between $1,100 million and $1,152 million, up from $1,026.8 million in fiscal 2022. Guidance includes 9 months of revenue from Vuram and assumes an average GBP to USD exchange rate of 1.20 for the remainder of fiscal 2023.
- ANI* is expected to range between $183 million and $195 million versus $174.8 million in fiscal 2022. Guidance assumes an average USD to INR exchange rate of 79.0 for the remainder of fiscal 2023.
- Based on a diluted share count of 50.6 million shares, the company expects fiscal 2023 adjusted diluted earnings* per ADS to be in the range of $3.62 to $3.86 versus $3.41 in fiscal 2022.
“The company has updated our forecast for fiscal 2023 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 7% to 12% on a reported basis, or 11% to 17% constant currency*. This includes approximately 2% inorganic growth related to our acquisition of Vuram. We currently have 95% visibility to the midpoint of the range, consistent with July guidance in previous years. For the year, we expect capital expenditures of up to $40 million.
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 400 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, 2022, WNS had 55,146 professionals across 53 delivery centers worldwide including facilities in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the United Kingdom, and the United States.
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