Actionable news
0
All posts from Actionable news
Actionable news in WNS: WNS HOLDINGS LIMITED,

WNS Announces Fiscal 2018 First Quarter Earnings, Revises Full Year Guidance

NEW YORK & MUMBAI, India--(BUSINESS WIRE)--WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global Business Process Management (BPM) services, today announced results for the fiscal 2018 first quarter ended June 30, 2017.

Highlights – Fiscal 2018 First Quarter:

GAAP Financials

  • Revenue of $180.1 million, up 21.7% from $148.0 million in Q1 of last year and up 13.0% from $159.4 million last quarter
  • Profit/(Loss) of $16.7 million, compared to $12.2 million in Q1 of last year and ($5.0) million last quarter
  • Diluted earnings/(loss) per ADS of $0.32, compared to $0.23 in Q1 of last year and ($0.10) last quarter

Non-GAAP Financial Measures*

  • Revenue less repair payments of $175.3 million, up 24.5% from $140.8 million in Q1 of last year and up 13.7% from $154.1 million last quarter
  • Adjusted Net Income (ANI) of $23.6 million, compared to $21.1 million in Q1 of last year and $24.0 million last quarter
  • Adjusted diluted earnings per ADS of $0.45, compared to $0.40 in Q1 of last year and $0.46 last quarter

Other Metrics

  • Added 7 new clients in the quarter, expanded 16 existing relationships
  • Days sales outstanding (DSO) at 30 days
  • Global headcount of 34,789 as of June 30, 2017

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.”

*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.

Revenue in the first quarter was $180.1 million, representing a 21.7% increase versus Q1 of last year and a 13.0% increase from the previous quarter. Revenue less repair payments* in the first quarter was $175.3 million, an increase of 24.5% year-over-year and 13.7% sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal first quarter grew 27.5% versus Q1 of last year and 11.7% sequentially. Year-over-year, fiscal Q1 revenue growth was driven by our acquisitions of HealthHelp and Denali, which closed in March 2017 and January 2017 respectively, and solid organic revenue performance across verticals and services. These benefits were partially offset by depreciation in the British pound against the US dollar. Sequentially, revenue growth was driven by our acquired businesses, broad-based growth with both new and existing clients, and favorable currency movements. These increases partially offset headwinds from annual committed productivity and the ramp-down of non-recurring revenues from Q4.

Operating margin in the first quarter was 11.0%, as compared to 9.8% in Q1 of last year and an operating loss margin of (2.0%) reported in the previous quarter. On a year-over-year basis, margin improvement was driven by a step-down in amortization of intangible asset expense, hedging gains net of currency movements, and increased operating leverage from higher volumes. These benefits more than offset headwinds from the impact of our annual wage increases and lower productivity associated with Q1 hiring. Sequentially, margins increased due to a Q4 non-recurring charge of $21.7 million for goodwill impairment, higher Q1 volume, and lower share based compensation expense as a percentage of revenue. These benefits more than offset headwinds from our annual wage increases, currency movements net of hedging, and a step-up in amortization of intangible asset expense associated with our Q4 acquisitions.

First quarter adjusted operating margin* was 17.1%, versus 18.6% in Q1 of last year and 18.1% last quarter. On a year-over-year basis, adjusted operating margin* reduced primarily due to the impact of our annual wage increases and lower productivity associated with Q1 hiring. These reductions were partially offset by hedging gains net of currency movements and increased operating leverage from higher volumes. Sequentially, adjusted operating margin* reduced as a result of the impact of our annual wage increases and currency movements net of hedging, which more than offset benefits from higher volumes.

Profit in the fiscal first quarter was $16.7 million, as compared to $12.2 million in Q1 of last year and a loss of ($5.0) million in the previous quarter. Adjusted net income (ANI)* in Q1 was $23.6 million, up $2.5 million as compared to Q1 of last year and down $0.4 million from the previous quarter. In addition to the explanations discussed above, fiscal first quarter profit and adjusted net income* decreased by $1.5 million sequentially as a result of a one-time tax benefit in Q4 resulting from the reversal of a 2011 tax reserve which was no longer required.

From a balance sheet perspective, WNS ended Q1 with $194.5 million in cash and investments and $116.9 million of debt. In the first quarter, the company generated $14.1 million in cash from operations, and had $7.3 million in capital expenditures. Days sales outstanding were 30 days, as compared to 29 days in Q1 of last year and 29 days reported in the previous quarter.

“Our first quarter results demonstrate the business momentum we have been able to create over the past few years. WNS delivered $175.3 million in revenue less repair payments* which represents year-over-year constant currency growth in excess of 27%, and excluding the revenue impact of our fiscal Q4 2017 acquisitions, over 13% on an organic constant currency basis,” said Keshav Murugesh, WNS’s Chief Executive Officer. “We firmly believe that our corporate focus on domain expertise, coupled with expanded investments and capabilities in key areas such as analytics, automation and digital solutions has positioned the company for long-term success in the BPM industry. We will continue to create unique solutions which help our clients solve problems and better compete in their increasingly complex and fast-moving business environments.”

Fiscal 2018 Guidance

WNS is updating guidance for the fiscal year ending March 31, 2018 as follows:

  • Revenue less repair payments* is expected to be between $693 million and $723 million, up from $578.4 million in fiscal 2017. This assumes an average GBP to USD exchange rate of 1.29 for the remainder of fiscal 2018.
  • ANI* is expected to range between $98 million and $106 million versus $92.2 million in fiscal 2017. This assumes an average USD to INR exchange rate of 64.5 for the remainder of fiscal 2018.
  • Based on a diluted share count of 51.9 million shares, the company expects adjusted diluted earnings* per ADS to be in the range of $1.89 to $2.04 versus $1.74 in fiscal 2017.

“The company has updated our forecast for fiscal 2018 based on current visibility levels and exchange rates,” said Sanjay Puria, WNS’s Chief Financial Officer. “Our revised guidance for the year reflects growth in revenue less repair payments* of 20% to 25%, or 19% to 25% on a constant currency* basis. We currently have 95% visibility to the midpoint of the range.”

Conference Call

WNS will host a conference call on July 20, 2017 at 8:00 am (Eastern) to discuss the company's quarterly results. To participate in the call, please use the following details: +1-888-656-9018; international dial-in +1-503-343-6030; participant passcode 50086758. A replay will be available for one week following the call at +1-855-859-2056; international dial-in +1-404-537-3406; passcode 50086758, as well as on the WNS website, www.wns.com, beginning two hours after the end of the call.

About WNS

WNS (Holdings) Limited (NYSE: WNS), is a leading global business process management company. WNS offers business value to 300+ global clients by combining operational excellence with deep domain expertise in key industry verticals including Travel, Insurance, Banking and Financial Services, Manufacturing, Retail and Consumer Packaged Goods, Shipping and Logistics, Healthcare and Utilities. WNS delivers an entire spectrum of business process management services such as finance and accounting, customer interaction services, technology solutions, research and analytics and industry specific back office and front office processes. As of June 30, 2017, WNS had 34,789 professionals across 52 delivery centers worldwide including China, Costa Rica, India, Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, United Kingdom and the United States. For more information, visit


More