WNS Announces Fiscal 2024 Third Quarter Earnings, Revises Full Year Guidance
- None.
- None.
Insights
The reported revenue growth of 6.3% year-over-year for WNS (Holdings) Limited is a positive indicator of the company's ability to increase its sales and market presence. However, the sequential decline of 2.3% from the previous quarter suggests a potential short-term volatility or seasonal factors that investors should consider. The profit increase from $34.7 million to $39.6 million year-over-year reflects improved operational efficiency or cost management, which is a strong signal for profitability sustainability.
On the other hand, the decrease in profit from the previous quarter's $57.8 million needs to be scrutinized for any underlying issues that may not be immediately apparent. A deeper analysis of the company's expense structures and revenue streams may reveal whether this is a trend or an anomaly. The diluted earnings per share (EPS) improvement year-over-year from $0.69 to $0.81 indicates that the company is generating more earnings for its shareholders, which is typically a key metric for stock valuation.
The addition of 8 new clients and the expansion of 32 existing relationships suggest that WNS is effectively growing its customer base and strengthening its market position. This could potentially translate into more stable and predictable future revenue streams. The Days Sales Outstanding (DSO) of 35 days is a critical measure of how quickly the company is able to collect revenue after a sale has been made. A DSO of 35 days is generally considered to be within a normal range, indicating efficient collections and cash flow management.
Furthermore, the increase in global headcount to 60,652 employees could be seen as a commitment to capacity expansion and service delivery improvement. However, it is essential to balance this growth with productivity and to avoid unnecessary cost inflation that could erode profit margins.
Examining the non-GAAP financial measures, such as Revenue less repair payments and Adjusted Net Income (ANI), provides a clearer picture of the company's core operational performance by excluding certain one-time or non-operational expenses. The increase in ANI from $50.6 million to $58.2 million year-over-year demonstrates a solid growth trajectory. However, stakeholders should be aware that non-GAAP measures can vary in definition from company to company, making cross-industry comparisons less straightforward.
It's also important to consider the broader economic context in which these financial results are being reported. Factors such as currency fluctuations, global economic trends and industry-specific challenges can all have significant impacts on a company's financial performance and should be taken into account when interpreting these results.
| Highlights – Fiscal 2024 Third Quarter: |
GAAP Financials
Non-GAAP Financial Measures*
Other Metrics
|
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 third quarter was
Profit in the fiscal third quarter was
Adjusted net income (ANI)* in Q3 was
From a balance sheet perspective, WNS ended Q3 with
“In the fiscal third quarter, WNS’ grew our year-over-year constant currency revenue less repair payments* by
WNS Adds New York, London Global Headquarters
WNS formally announced today that the company has added global headquarters locations in both
Fiscal 2024 Guidance
WNS is updating guidance for the fiscal year ending March 31, 2024, as follows:
-
Revenue less repair payments* is expected to be between
$1,270 million $1,292 million $1,162.0 million -
ANI* is expected to range between
$212 million $218 million $196.1 million -
Based on a diluted share count of 49.6 million shares, the company expects fiscal 2024 adjusted diluted earnings per share* to be in the range of
$4.27 $4.39 $3.86
“The company has updated our forecast for fiscal 2024 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
WNS Board Approves ADS to Share Exchange, Reporting Change
The WNS Board has granted approval for the company to move forward with plans to terminate its ADS program, exchange outstanding ADSs for its ordinary shares, and apply for the ordinary shares to be listed on the NYSE. WNS intends to complete this exercise prior to the end of fiscal Q1’25. In addition, the Board has granted approval for the company to shift from reporting on the forms available to foreign private issuers (FPIs) and filing our financial statements with the SEC under IFRS to voluntarily file on US domestic issuer forms and file our financial statements under US GAAP. WNS intends to complete this change prior to the end of fiscal Q2’25. The company believes these actions are in the long-term best interest of all WNS stakeholders and will improve the company’s ability to compete for capital, reduce share price volatility, and enhance governance.
_______________________
* 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 January 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 ir.wns.com. For call participants, please register using this online form 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 December 31, 2023, WNS had 60,652 professionals across 66 delivery centers worldwide including facilities in
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 2024 guidance, estimated capital expenditures, expected foreign currency exchange rates, and our plans to exchange outstanding ADSs for our ordinary shares and reporting change discussed above and the expected resulting benefits. 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; the impact of the ongoing COVID-19 pandemic on our and our clients’ business, financial condition, results of operations and cash flows; 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
References to “$” and “USD” refer to
WNS (HOLDINGS) LIMITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, amounts in millions, except share and per share data) |
||||||||||||||
|
|
|
Three months ended |
|||||||||||
|
|
|
Dec 31, 2023 |
|
|
Dec 31, 2022 |
|
|
Sep 30, 2023 |
|||||
Revenue |
|
|
$ |
326.2 |
|
|
$ |
306.9 |
|
$ |
333.9 |
|
||
Cost of revenue |
|
|
|
208.9 |
|
|
|
198.1 |
|
|
210.2 |
|
||
Gross profit |
|
|
|
117.3 |
|
|
|
108.9 |
|
|
123.7 |
|
||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Selling and marketing expenses |
|
|
|
20.3 |
|
|
|
16.2 |
|
|
18.8 |
|
||
General and administrative expenses |
|
|
|
45.6 |
|
|
|
42.2 |
|
|
46.5 |
|
||
Foreign exchange (gain) / loss, net |
|
|
|
0.5 |
|
|
|
0.1 |
|
|
(0.0 |
) |
||
Amortization of intangible assets |
|
|
|
8.6 |
|
|
|
6.5 |
|
|
8.7 |
|
||
Operating profit |
|
|
|
42.3 |
|
|
|
43.9 |
|
|
49.7 |
|
||
Other income, net |
|
|
|
(4.1 |
) |
|
|
(3.6 |
) |
|
(25.6 |
) |
||
Finance expense |
|
|
|
7.1 |
|
|
|
5.0 |
|
|
7.5 |
|
||
Profit before income taxes |
|
|
|
39.3 |
|
|
|
42.6 |
|
|
67.9 |
|
||
Income tax expense |
|
|
|
(0.4 |
) |
|
|
7.9 |
|
|
10.0 |
|
||
Profit after tax |
|
|
$ |
39.6 |
|
|
$ |
34.7 |
|
$ |
57.8 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Earnings per share of ordinary share |
|
|
|
|
|
|
|
|
|
|
|
|
||
Basic |
|
|
$ |
0.84 |
|
|
$ |
0.72 |
|
$ |
1.22 |
|
||
Diluted |
|
|
$ |
0.81 |
|
|
$ |
0.69 |
|
$ |
1.16 |
|
||
WNS (HOLDINGS) LIMITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, amounts in millions, except share and per share data) |
||||||||
|
|
As at Dec 31, 2023 |
|
|
As at Mar 31, 2023 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
94.6 |
|
|
$ |
127.9 |
|
Investments |
|
|
165.5 |
|
|
|
101.1 |
|
Trade receivables, net |
|
|
127.8 |
|
|
|
113.1 |
|
Unbilled revenue |
|
|
104.5 |
|
|
|
99.8 |
|
Funds held for clients |
|
|
7.1 |
|
|
|
9.4 |
|
Derivative assets |
|
|
9.0 |
|
|
|
6.4 |
|
Contract assets |
|
|
15.0 |
|
|
|
12.6 |
|
Prepayments and other current assets |
|
|
29.7 |
|
|
|
33.9 |
|
Total current assets |
|
|
553.2 |
|
|
|
504.1 |
|
Non-current assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
357.9 |
|
|
|
353.6 |
|
Intangible assets |
|
|
160.6 |
|
|
|
179.2 |
|
Property and equipment |
|
|
71.4 |
|
|
|
62.4 |
|
Right-of-use assets |
|
|
172.3 |
|
|
|
175.5 |
|
Derivative assets |
|
|
2.7 |
|
|
|
2.7 |
|
Investments |
|
|
0.3 |
|
|
|
75.9 |
|
Contract assets |
|
|
54.1 |
|
|
|
54.7 |
|
Deferred tax assets |
|
|
49.3 |
|
|
|
46.7 |
|
Other non-current assets |
|
|
58.5 |
|
|
|
49.6 |
|
Total non-current assets |
|
|
927.0 |
|
|
|
1,000.4 |
|
TOTAL ASSETS |
|
$ |
1,480.2 |
|
|
$ |
1,504.4 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Trade payables |
|
$ |
21.4 |
|
|
$ |
25.4 |
|
Provisions and accrued expenses |
|
|
33.3 |
|
|
|
41.8 |
|
Derivative liabilities |
|
|
6.1 |
|
|
|
7.5 |
|
Pension and other employee obligations |
|
|
94.9 |
|
|
|
107.9 |
|
Short term line of credit |
|
|
29.6 |
|
|
|
— |
|
Current portion of long-term debt |
|
|
36.8 |
|
|
|
36.1 |
|
Contract liabilities |
|
|
14.4 |
|
|
|
15.7 |
|
Current taxes payable |
|
|
12.0 |
|
|
|
2.2 |
|
Lease liabilities |
|
|
28.0 |
|
|
|
26.6 |
|
Other liabilities |
|
|
26.6 |
|
|
|
40.7 |
|
Total current liabilities |
|
|
303.2 |
|
|
|
303.8 |
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
Derivative liabilities |
|
|
1.7 |
|
|
|
2.4 |
|
Pension and other employee obligations |
|
|
22.2 |
|
|
|
19.5 |
|
Long-term debt |
|
|
111.0 |
|
|
|
137.3 |
|
Contract liabilities |
|
|
12.4 |
|
|
|
9.7 |
|
Other non-current liabilities |
|
|
12.7 |
|
|
|
20.8 |
|
Lease liabilities |
|
|
169.4 |
|
|
|
172.3 |
|
Deferred tax liabilities |
|
|
25.6 |
|
|
|
37.3 |
|
Total non-current liabilities |
|
|
355.0 |
|
|
|
399.5 |
|
TOTAL LIABILITIES |
|
$ |
658.2 |
|
|
$ |
703.3 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Share capital (ordinary shares |
|
|
7.6 |
|
|
|
7.7 |
|
Share premium |
|
|
35.0 |
|
|
|
81.1 |
|
Retained earnings |
|
|
1,079.8 |
|
|
|
951.6 |
|
Other reserves |
|
|
6.2 |
|
|
|
6.8 |
|
Other components of equity |
|
|
(248.5 |
) |
|
|
(246.0 |
) |
Total shareholders’ equity including shares held in treasury |
|
$ |
880.1 |
|
|
$ |
801.1 |
|
Less: 1,000,000 shares as at December 31, 2023 and Nil shares as at March 31, 2023, held in treasury, at cost |
|
|
(58.1 |
) |
|
|
— |
|
Total shareholders’ equity |
|
$ |
822.0 |
|
|
$ |
801.1 |
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
1,480.2 |
|
|
$ |
1,504.4 |
|
WNS Segment Reporting
Effective April 1, 2023, WNS has adopted a new organizational structure featuring four strategic business units (“SBUs”), each headed by a chief business officer (“CBO”). Under the new organizational structure, WNS has combined our existing verticals into the four SBUs (as set out below). The new organizational structure is expected to help drive improved outcomes for our global clients and enable our company to better drive business synergies, enhance scalability, generate operating leverage, and create organizational depth. To align with this new structure, WNS has changed our segments for financial statement reporting purposes. Reportable segments are as follows:
1. TSLU (comprising of Travel, Shipping/Logistics and Utilities verticals)
2. MRHP (comprising of Manufacturing/Retail/Consumer, Hi-tech/Professional Services and Procurement verticals)
3. HCLS (comprising of Healthcare vertical, which we have renamed as our Healthcare/Life Sciences vertical)
4. BFSI (comprising of Banking/Financial Services and Insurance verticals)
About Non-GAAP Financial Measures
The financial information in this release includes certain non-GAAP financial measures that we believe more accurately reflect our core operating performance. Reconciliations of these non-GAAP financial measures to our GAAP operating results are included below. A more detailed discussion of our GAAP results is contained in “Part I –Item 5. Operating and Financial Review and Prospects” in our annual report on Form 20-F filed with the SEC on May 16, 2023.
Revenue less repair payments is a non-GAAP financial measure that is calculated as (a) revenue less (b) in our BFSI segment, payments to repair centers for “fault” repair cases where WNS acts as the principal in its dealings with the third party repair centers and its clients. WNS believes that revenue less repair payments for “fault” repairs reflects more accurately the value addition of the business process management services that it directly provides to its clients. For more details, please see the discussion in “Part I – Item 5. Operating and Financial Review and Prospects – Overview” in our annual report on Form 20-F filed with the SEC on May 16, 2023.
Constant currency revenue less repair payments is a non-GAAP financial measure. We present constant currency revenue less repair payments so that revenue less repair payments may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Constant currency revenue less repair payments is presented by recalculating prior period’s revenue less repair payments denominated in currencies other than in US dollars using the foreign exchange rate used for the latest period, without taking into account the impact of hedging gains/losses. Our non-US dollar denominated revenues include, but are not limited to, revenues denominated in pound sterling, South African rand, Australian dollar and Euro.
WNS also presents or discusses (1) adjusted operating margin, which refers to adjusted operating profit (calculated as operating profit / (loss) excluding goodwill impairment, share-based compensation expense, acquisition-related expenses or benefits and amortization of intangible assets) as a percentage of revenue less repair payments, (2) ANI, which is calculated as profit excluding goodwill impairment, share-based compensation expense, acquisition-related expenses or benefits and amortization of intangible assets and including the tax effect thereon, (3) Adjusted net income margin, which refers to ANI as a percentage of revenue less repair payments, (4) net cash, which refers to cash and cash equivalents plus investments less long-term debt (including the current portion and short term) and other non-GAAP financial measures included in this release as supplemental measures of its performance. Acquisition-related expenses or benefits consists of transaction costs, integration expenses, employment-linked earn-out as part of deferred consideration and changes in the fair value of contingent consideration including the impact of present value thereon. WNS presents these non-GAAP financial measures because it believes they assist investors in comparing its performance across reporting periods on a consistent basis by excluding items that are non-recurring in nature and those it believes are not indicative of its core operating performance. In addition, it uses these non-GAAP financial measures (i) to evaluate the effectiveness of its business strategies and (ii) (with certain adjustments) as a factor in evaluating management’s performance when determining incentive compensation. WNS is excluding acquisition-related expenses as described above with effect from fiscal 2023 second quarter.
These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for WNS’ financial results prepared in accordance with IFRS.
The company is not able to provide our forward-looking GAAP revenue, profit and earnings per share without unreasonable efforts for a number of reasons, including our inability to predict with a reasonable degree of certainty the payments to repair centers, our future share-based compensation expense under IFRS 2 (Share Based payments), amortization of intangibles and acquisition-related expenses or benefits associated with future acquisitions, goodwill impairment and currency fluctuations. As a result, any attempt to provide a reconciliation of the forward-looking GAAP financial measures (revenue, profit, earnings per share) to our forward-looking non-GAAP financial measures (revenue less repair payments*, ANI* and Adjusted diluted earnings per share*, respectively) would imply a degree of likelihood that we do not believe is reasonable.
Reconciliation of revenue (GAAP) to revenue less repair payments (non-GAAP) and constant currency revenue less repair payments (non-GAAP)
|
|
Three months ended |
|
Three months ended
|
||||||||||||||||||
|
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Dec 31, 2023 |
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Dec 31, 2022 |
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Sep 30, 2023 |
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|
Dec 31, 2022 |
|
Sep 30,
|
|||||||||
|
|
(Amounts in millions) |
|
(% growth) |
||||||||||||||||||
Revenue (GAAP) |
|
$ |
326.2 |
|
|
$ |
306.9 |
|
|
$ |
333.9 |
|
|
|
6.3 |
% |
|
(2.3 |
%) |
|||
Less: Payments to repair centers |
|
|
10.3 |
|
|
|
14.0 |
|
|
|
8.9 |
|
|
|
(26.4 |
%) |
15.5 |
% |
||||
Revenue less repair payments (non-GAAP) |
|
$ |
315.9 |
|
|
$ |
292.9 |
|
|
$ |
325.0 |
|
|
|
7.8 |
% |
|
(2.8 |
%) |
|||
Exchange rate impact |
|
|
1.1 |
|
|
|
6.3 |
|
|
|
(0.5 |
) |
|
|
|
|
|
|
||||
Constant currency revenue less repair payments (non-GAAP) |
|
$ |
317.0 |
|
|
$ |
299.3 |
|
|
$ |
324.5 |
|
|
|
5.9 |
% |
|
(2.3 |
%) |
|||
Reconciliation of operating profit (GAAP to non-GAAP)
|
|
Three months ended |
||||||||||
|
|
Dec 31, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2023 |
||||||
|
|
(Amounts in millions) |
||||||||||
Operating profit (GAAP) |
|
$ |
42.3 |
|
|
$ |
43.9 |
|
$ |
49.7 |
|
|
Add: Share-based compensation expense |
|
|
13.1 |
|
|
|
11.7 |
|
|
|
13.4 |
|
Add: Amortization of intangible assets |
|
|
8.6 |
|
|
|
6.5 |
|
|
|
8.7 |
|
Add: Acquisition-related expenses |
|
|
1.0 |
|
|
|
2.1 |
|
|
|
1.1 |
|
Adjusted operating profit (non-GAAP) |
|
$ |
65.0 |
|
|
$ |
64.3 |
|
|
$ |
72.9 |
|
Operating profit as a percentage of revenue (GAAP) |
|
|
13.0 |
% |
|
|
14.3 |
% |
|
|
14.9 |
% |
Adjusted operating profit as a percentage of revenue less repair payments (non-GAAP) |
|
|
20.6 |
% |
|
|
21.9 |
% |
|
|
22.4 |
% |
Reconciliation of profit (GAAP) to ANI (non-GAAP)
|
|
Three months ended |
||||||||||
|
|
Dec 31, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2023 |
||||||
|
|
(Amounts in millions) |
||||||||||
Profit (GAAP) |
|
$ |
39.6 |
|
|
$ |
34.7 |
|
$ |
57.8 |
|
|
Add: Share-based compensation expense |
|
|
13.1 |
|
|
|
11.7 |
|
|
|
13.4 |
|
Add: Amortization of intangible assets |
|
|
8.6 |
|
|
|
6.5 |
|
|
|
8.7 |
|
Add: Acquisition-related expenses / (benefits), net(1) |
|
|
1.2 |
|
|
|
2.3 |
|
|
|
(20.5 |
) |
Less: Tax impact on share-based compensation expense(2) |
|
|
(2.3 |
) |
|
|
(3.0 |
) |
|
|
(3.1 |
) |
Less: Tax impact on amortization of intangible assets(2) |
|
|
(2.1 |
) |
|
|
(1.5 |
) |
|
|
(2.1 |
) |
Less: Tax impact on acquisition related expenses (2) |
|
|
0.0 |
|
|
|
(0.0 |
) |
|
|
(0.0 |
) |
Adjusted Net Income (non-GAAP) |
|
$ |
58.2 |
|
|
$ |
50.6 |
|
$ |
54.1 |
|
|
Profit after tax as a percentage of revenue (GAAP) |
|
|
12.2 |
% |
|
|
11.3 |
% |
|
|
17.3 |
% |
Adjusted net income as a percentage of revenue less repair payments (non-GAAP) |
|
|
18.4 |
% |
|
|
17.3 |
% |
|
|
16.6 |
% |
Adjusted diluted earnings per share (non-GAAP) |
|
$ |
1.18 |
|
|
$ |
1.01 |
|
|
$ |
1.09 |
|
(1) Acquisition related expenses / (benefits) includes reversal of contingent consideration related to acquisition of Vuram. |
||||||||||||
(2) The company applies GAAP methodologies in computing the tax impact on its non-GAAP ANI adjustments (including amortization of intangible assets, acquisition-related expenses and share-based compensation expense). The company’s non-GAAP tax expense is generally higher than its GAAP tax expense if the income subject to taxes is higher considering the effect of the items excluded from GAAP profit to arrive at non-GAAP profit. |
||||||||||||
Reconciliation of net cash
|
|
As at Dec 31, 2023 |
|
|
As at Mar 31, 2023 |
|
||
Gross cash (including investments) |
|
$ |
260.4 |
|
|
$ |
304.9 |
|
Less: Debt (short term and long term) |
|
|
(177.4 |
) |
|
|
(173.4 |
) |
Net cash |
|
$ |
83.0 |
|
|
$ |
131.5 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240117018619/en/
Investors:
David
EVP – Finance & Head of Investor Relations
WNS (Holdings) Limited
+1 (646) 908-2615
david.mackey@wns.com
Media:
Archana Raghuram
EVP & Global Head – Marketing & Communications
WNS (Holdings) Limited
+91 (22) 4095 2397
archana.raghuram@wns.com; pr@wns.com
Source: WNS (Holdings) Limited
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