WNS Announces Fiscal 2023 Fourth Quarter and Full Year Earnings, Provides Guidance for Fiscal 2024

 WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global Business Process Management (BPM) solutions, today announced results for the fiscal 2023 fourth quarter and full year ended March 31, 2023.

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 fourth quarter was $314.9 million, representing a 5.4% increase versus Q4 of last year and a 2.6% increase from the previous quarter. Revenue less repair payments* in the fourth quarter was $305.0 million, an increase of 10.9% year-over-year and 4.1% sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal fourth quarter was up 15.6% versus Q4 of last year and 2.5% sequentially. Year-over-year, fiscal Q4 revenue improved as a result of our new client additions, the expansion of existing relationships, our acquisitions of Vuram, OptiBuy, and The Smart Cube, and increased travel volume which more than offset the ramp-down of a large HealthCare process and unfavorable currency movements. Sequentially, growth driven by broad-based revenue momentum, our acquisitions of OptiBuy and The Smart Cube, and favorable currency movements was partially offset by the ramp-down of a large HealthCare process discussed above.

Profit in the fiscal fourth quarter was $36.4 million, as compared to $38.9 million in Q4 of last year and $34.7 million in the previous quarter. Year-over-year, profit decreased as a result of wage increases, increased return-to-office costs, currency movements impacting monetary assets and liabilities, higher share-based compensation expense, and increased costs associated with our acquisitions of Vuram, OptiBuy, and The Smart Cube including amortization of intangibles, interest expense, and other acquisition-related expenses. These headwinds more than offset favorable impacts from revenue growth, improved productivity, and a lower effective tax rate. Sequentially, Q4 profit increased as a result of revenue growth, improved productivity, one-time tax and interest income benefits, and lower acquisition-related expenses. These benefits were partially offset by wage increases, return-to-office costs, currency impacts on monetary assets and liabilities, and increased amortization of intangibles associated with our recent acquisitions.

Adjusted net income (ANI)* in Q4 was $52.4 million, as compared to $48.3 million in Q4 of last year and $50.6 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, acquisition-related expenses, and associated tax impacts which are excluded from ANI*.

From a balance sheet perspective, WNS ended Q4 with $304.9 million in cash and investments and $173.4 million in debt. In the fourth quarter, the company generated $84.3 million in cash from operations, incurred $14.7 million in capital expenditures, and repaid $8.0 million in long-term debt. Fourth quarter days sales outstanding were 32 days, as compared to 30 days reported in Q4 of last year and 34 days in the previous quarter.

“In the fiscal fourth quarter, WNS once again delivered solid financial performance despite the weak macro environment,” said Keshav Murugesh, WNS’ Chief Executive Officer. “For the fiscal 2023 full year, the company grew constant currency revenue less repair payments* by 19% and expanded our adjusted diluted earnings* per share by 13%. We enter fiscal 2024 with healthy demand for our services, strong revenue momentum, a resilient business model, and differentiated positioning in the BPM space. The company remains focused on investing for the future, driving strong operational and financial execution, and delivering long-term sustainable value for all of our stakeholders.”

Fiscal 2024 Guidance

WNS is providing guidance for the fiscal year ending March 31, 2024, as follows:

• Revenue less repair payments* is expected to be between $1,290 million and $1,348 million, up from $1,162.0 million in fiscal 2023. Guidance assumes an average GBP to USD exchange rate of 1.24 versus 1.21 in fiscal 2023.
• ANI* is expected to range between $209 million and $221 million versus $196.1 million in fiscal 2023. Guidance assumes an average USD to INR exchange rate of 82.0 versus 80.3 in fiscal 2023.
• Based on a diluted share count of 50.7 million shares, the company expects fiscal 2024 adjusted diluted earnings per share* to be in the range of $4.12 to $4.36 versus $3.86 in fiscal 2023.

“The company has provided our initial 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 11% to 16% on both a reported and constant currency* basis, with 88% visibility to the midpoint of the range. This includes an estimated 3% inorganic growth related to our acquisitions of Vuram, OptiBuy and The Smart Cube. For the year, we expect capital expenditures of up to $60 million.”

*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 April 27, 2023, 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 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 March 31, 2023, WNS had 59,755 professionals across 64 delivery centers worldwide including facilities in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the United Kingdom, and the United States. For more information, visit www.wns.com.