WNS Announces Fiscal 2022 Second Quarter Earnings, Revises Full Year Guidance

PTI | Mumbai | Updated: 28-10-2021 17:54 IST | Created: 28-10-2021 17:26 IST
WNS Announces Fiscal 2022 Second Quarter Earnings, Revises Full Year Guidance
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Business Wire India WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global Business Process Management (BPM) solutions, today announced results for the fiscal 2022 second quarter ended September 30, 2021.

Highlights – Fiscal 2022 Second Quarter: GAAP Financials Revenue of $273.6 million, up 22.9% from $222.6 million in Q2 of last year and up 8.0% from $253.2 million last quarter Profit of $32.1 million, compared to $29.2 million in Q2 of last year and $26.8 million last quarter Diluted earnings per ADS of $0.64, compared to $0.56 in Q2 of last year and $0.52 last quarter Non-GAAP Financial Measures* Revenue less repair payments of $254.4 million, up 18.7% from $214.4 million in Q2 of last year and up 7.7% from $236.3 million last quarter Adjusted Net Income (ANI) of $43.1 million, compared to $37.9 million in Q2 of last year and $39.0 million last quarter Adjusted diluted earnings per ADS of $0.86, compared to $0.73 in Q2 of last year and $0.76 last quarter Other Metrics Added 8 new clients in the quarter, expanded 32 existing relationships Days sales outstanding (DSO) at 31 days Global headcount of 49,511 as of September 30, 2021 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 second quarter was $273.6 million, representing a 22.9% increase versus Q2 of last year and an 8.0% increase from the previous quarter. Revenue fewer repair payments* in the second quarter was $254.4 million, an increase of 18.7% year-over-year and a 7.7% increase sequentially. Excluding exchange rate impacts, constant currency revenue fewer repair payments* in the fiscal second quarter was up 16.2% versus Q2 of last year and 8.5% sequentially. Year-over-year, fiscal Q2 revenue improved as a result of new client additions, the expansion of existing relationships, increased travel volumes, and currency movements net of hedging. Sequentially, revenue improvement was driven by broad-based revenue growth across verticals and service offerings and increased travel volumes, which were partially offset by currency movements net of hedging.

Profit in the fiscal second quarter was $32.1 million, as compared to $29.2 million in Q2 of last year and $26.8 million in the previous quarter. Year-over-year, profit increased as a result of revenue growth, favorable currency movements net of hedging, and a lower effective tax rate. These benefits more than offset the impact of wage increases, the reinstatement of our corporate leave policy, increased facility-related and business continuity costs, and higher share-based compensation expenses. Sequentially, Q2 profit increased as a result of revenue growth, reduced share-based compensation expense, and favorable currency movements net of hedging. These benefits were partially offset by wage increases and non-recurring Q1 profit items including interest income associated with a tax refund and a tax benefit on liquid mutual funds.

Adjusted net income (ANI)* in Q2 was $43.1 million, as compared to $37.9 million in Q2 of last year and $39.0 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 except for amortization of intangible expenses, share-based compensation costs, and associated tax impacts, which are excluded from ANI*.

From a balance sheet perspective, WNS ended Q2 with $332.2 million in cash and investments and $8.4 million of debt. In the second quarter, the company generated $47.3 million in cash from operations and incurred $7.1 million in capital expenditures. The company also made scheduled debt payments of $8.4 million. Second-quarter days sales outstanding were 31 days, as compared to 34 days reported in Q2 of last year and 32 days in the previous quarter.

"Our fiscal second-quarter financial results continue to highlight our differentiated positioning in the BPM marketplace and solid execution. The company delivered year-over-year revenue growth of 16.2% on a constant currency basis, posted adjusted operating margin of 21.8%, and expanded adjusted diluted earnings per share by 17.8%," said Keshav Murugesh, WNS's Chief Executive Officer. "We believe the BPM opportunity is both accelerating and expanding, as clients increasingly look for strategic digital transformation partners to help improve their competitive positioning." COVID-19 The COVID-19 pandemic is having a significant impact on the global economy, our client's businesses, and WNS's operations, financials, and visibility. Revenue has been pressured by lower client volumes, delays in new business ramps, client concessions, and facility lockdowns which impact service delivery. WNS is actively working to manage our clients' changing requirements, adapt our service delivery models, ensure data security, and manage costs. In the fiscal second quarter, the company delivered more than 99% of our client's requirements. Going forward, impacts to our financial performance will be a function of how long the COVID-19 pandemic lasts on a global basis, and how long it takes our clients' businesses to stabilize and recover.

Fiscal 2022 Guidance WNS is updating guidance for the fiscal year ending March 31, 2022, as follows: • Revenue fewer repair payments* is expected to be between $984 million and $1,016 million, up from $868.7 million in fiscal 2021. Guidance assumes an average GBP to the USD exchange rate of 1.36 for the remainder of fiscal 2022.

• ANI* is expected to range between $163 million and $171 million versus $141.7 million in fiscal 2021. Guidance assumes an average USD to INR exchange rate of 75.0 for the remainder of fiscal 2022.

• Based on a diluted share count of 51.2 million shares, the company expects fiscal 2022 adjusted diluted earnings* per ADS to be in the range of $3.18 to $3.34 versus $2.72 in fiscal 2021.

"The company has updated our forecast for fiscal 2022 based on current visibility levels and exchange rates," said Sanjay Puria, WNS's Chief Financial Officer. "Our guidance for the full year reflects growth in revenue fewer repair payments* of 13% to 17%, or 11% to 15% on a constant currency* basis. We currently have 98% visibility to the midpoint of the range, consistent with October guidance in previous years. For the year, we expect capital expenditures of up to $35 million." Conference Call WNS will host a conference call on October 28, 2021, 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 use the following details: US dial-in +1-888-656-9018; international dial-in +1-503-343-6030; participant passcode 1565479. A replay will be available for one week following the call at +1-855-859-2056; international dial-in +1-404-537-3406; passcode 1565479, 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 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 375 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 September 30, 2021, WNS had 49,511 professionals across 57 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. 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, express or implied forward-looking statements relating to our expectations regarding the impact of the COVID-19 pandemic on our business, our cost structure, the discussions of our strategic initiatives and the expected resulting benefits, our growth opportunities, industry environment, expectations concerning our future financial performance and growth potential, including our fiscal 2022 guidance, future profitability, 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; the impact of the 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 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; and future regulatory actions and conditions in our operating areas. 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 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 refer to International Financial Reporting Standards, as issued by the International Accounting Standards Board (IFRS).

*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.

To View the Complete Release, Click on the Link Below: WNS Announces Fiscal 2022 Second Quarter Earnings, Revises Full Year Guidance

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