WNS (WNS) Q4 2025 Earnings Call April 24, 2025 08:00 AM ET Company Participants David Mackey - Executive VP of Finance & Head of Investor RelationsKeshav Murugesh - Group CEO & DirectorArijit Sengupta - Chief Financial OfficerBryan Bergin - MD - Equity ResearchPuneet Jain - Associate - Equity ResearchRobert Bamberger - VP - Senior Equity Research AssociateVincent Colicchio - Managing Director Conference Call Participants Mayank Tandon - Senior AnalystSurinder Thind - Senior VP & Equity Analyst Operator Goo ...

Revenue Performance - Revenue for Q4 fiscal 2025 was $336.3 million, a decrease of 0.2% year-over-year and an increase of 1.0% sequentially[4] - For the full fiscal year 2025, revenue was $1,314.9 million, down 0.6% from $1,323.4 million in fiscal 2024[4] - Revenue for the three months ended March 31, 2025, was $336.3 million, a slight decrease of 0.15% compared to $336.8 million for the same period in 2024[18] - Revenue less repair payments for the three months ended March 31, 2025, was $323.3 million, a decrease of 0.8% from $325.9 million in the same period of 2024[30] - Constant currency revenue less repair payments for the three months ended March 31, 2025, was $324.6 million, showing a slight increase from $324.3 million in the same period of 2024[30] Profit and Income - Profit for Q4 fiscal 2025 was $50.8 million, compared to $14.5 million in Q4 of last year, reflecting a significant year-over-year increase[6] - Adjusted Net Income (ANI) for Q4 was $66.2 million, up from $53.9 million in the same quarter last year[7] - Net income for the three months ended March 31, 2025, was $50.8 million, up from $14.5 million in the same period of 2024, reflecting a year-over-year increase of 250.3%[18] - Adjusted net income (non-GAAP) for Q1 2025 was $66.2 million, up from $53.9 million in Q1 2024, reflecting a 22.6% growth[32] Earnings Per Share - Adjusted diluted earnings per share for fiscal 2026 is projected to be in the range of $4.43 to $4.70, an increase of 8% to 15% compared to fiscal 2025[11] - Basic earnings per share for the three months ended March 31, 2025, was $1.17, compared to $0.31 for the same period in 2024[18] - Adjusted diluted earnings per share (non-GAAP) for Q1 2025 was $1.45, up from $1.12 in Q1 2024, a growth of 29.5%[32] Operational Efficiency - Cash generated from operations in Q4 was $53.4 million, with capital expenditures of $18.6 million and debt repayments of $33.0 million[8] - Days sales outstanding (DSO) remained stable at 34 days, consistent with the previous quarter and slightly up from 33 days in Q4 of last year[8] - Operating income increased significantly to $50.3 million for the three months ended March 31, 2025, compared to $16.9 million in the same period of 2024[18] - Operating income (GAAP) for Q1 2025 was $50.3 million, up from $16.9 million in Q1 2024, representing a 197% increase[31] - Operating income as a percentage of revenue (GAAP) improved to 15.0% in Q1 2025 from 5.0% in Q1 2024[31] Client Engagement and Growth - The company added 9 new clients in Q4 and expanded 50 existing relationships, indicating growth in client engagement[4] - The acquisition of Kipi.ai was completed in Q4, enhancing capabilities in data, analytics, and AI[9] - Acquisition-related expenses for Q1 2025 totaled $2.0 million, compared to $0.6 million in Q1 2024, indicating increased investment in growth initiatives[31] Assets and Liabilities - Total assets as of March 31, 2025, increased to $1,547.5 million, up from $1,434.1 million as of March 31, 2024, indicating a growth of 7.9%[20] - Total current assets rose to $564.8 million as of March 31, 2025, compared to $529.7 million as of March 31, 2024, marking an increase of 6.6%[20] - Total liabilities increased to $709.8 million as of March 31, 2025, from $646.8 million as of March 31, 2024, reflecting a rise of 9.7%[21]

Group 1: WNS Holdings Limited - WNS shares increased by 8.3% to close at $66.59, supported by strong trading volume, and have gained 8.9% over the past four weeks [1] - The company is expected to report quarterly earnings of $1.41 per share, reflecting a year-over-year increase of 25.9%, with revenues projected at $325.57 million, a slight decrease of 0.1% from the previous year [2] - The consensus EPS estimate for WNS has been revised 3.7% higher in the last 30 days, indicating a positive trend that may lead to further price appreciation [3] Group 2: Industry Context - WNS operates within the Zacks Business - Services industry, where another company, Everi Holdings, closed 0.3% higher at $13.71, with a return of -0.6% over the past month [3] - Everi Holdings has seen a significant revision in its EPS estimate, increasing by 35.4% to $0.19, which represents a remarkable change of 280% from the previous year [4]

Core Viewpoint - WNS (Holdings) Limited has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is expected to influence stock prices favorably [1][2]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for WNS for the fiscal year ending March 2025 is projected at $4.48 per share, reflecting a 2.3% increase from the previous year [7]. - Over the past three months, analysts have raised their earnings estimates for WNS by 8.1%, indicating a strong upward trend in earnings outlook [7]. Impact of Institutional Investors - Changes in earnings estimates are strongly correlated with near-term stock price movements, as institutional investors adjust their valuations based on these estimates, leading to significant buying or selling activity [3]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [6]. - The upgrade of WNS to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Core Insights - Investors in the Business - Services sector should consider WNS (Holdings) Limited and SGS SA as potential value opportunities [1] - WNS has a stronger Zacks Rank of 2 (Buy) compared to SGS SA's 3 (Hold) [3] - WNS is likely to have a better earnings outlook than SGS SA, making it more appealing to value investors [3][7] Valuation Metrics - WNS has a forward P/E ratio of 14.47, while SGS SA has a higher forward P/E of 22.31 [5] - The PEG ratio for WNS is 2, indicating a more favorable growth outlook compared to SGS SA's PEG ratio of 2.59 [5] - WNS's P/B ratio stands at 3.93, significantly lower than SGS SA's P/B ratio of 18.81 [6] - Based on these metrics, WNS holds a Value grade of B, while SGS SA has a Value grade of C [6] Earnings Outlook - WNS is currently experiencing an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model [7]

Core Insights - Seroda Ventures announced the acquisition of its portfolio company Kipi.ai by WNS Holdings Limited, marking Seroda's second successful exit in two and a half years [1][5] - Kipi.ai is recognized as a leader in data modernization and AI-driven transformation within the Snowflake AI Data Cloud ecosystem, providing advanced analytics solutions to enterprises globally [2][5] - The acquisition is seen as a strategic move for WNS to enhance its AI and data capabilities, leveraging Kipi.ai's expertise and proprietary AI-driven accelerators [3][5] Company Overview - Kipi.ai has rapidly grown to become one of the fastest-growing Snowflake pure-play services providers, focusing on modernizing and centralizing data strategies for organizations [2][5] - The company has established itself as a market leader in AI-driven data transformation, responding to the increasing demand for scalable AI solutions among enterprises [5] Strategic Implications - The acquisition is expected to amplify Kipi.ai's capabilities and global reach, further driving innovation and business transformation at scale for WNS [3][5] - Seroda Ventures emphasizes its commitment to incubating and scaling technology ventures, with Kipi.ai exemplifying its ability to identify and nurture high-growth opportunities [5] Market Position - Kipi.ai's success is underscored by its significant contributions to the Snowflake AI Data Cloud ecosystem, positioning it as a trusted partner for enterprises seeking real-world AI solutions [5] - The acquisition aligns with the trend of increasing AI adoption, highlighting the importance of partnerships in delivering effective data and analytics solutions [5] Additional Information - Kipi.ai was advised by Canaccord Genuity during the acquisition process [6] - Seroda Ventures is recognized for its expertise in AI, cloud, and enterprise technology modernization, with a proven track record in building and exiting category-defining firms [7]

Financial Position - As of December 31, 2024, total assets amounted to $1,409,773,000, a decrease from $1,434,073,000 as of March 31, 2024[23] - Total current liabilities decreased to $285,753,000 from $312,028,000, representing a reduction of about 8.5%[23] - Shareholders' equity decreased to $763,112,000 from $787,308,000, a decline of approximately 3.1%[23] - Retained earnings increased to $1,156,213,000 from $1,034,388,000, showing a growth of about 11.8%[23] - As of December 31, 2024, total cash, cash equivalents, and restricted cash amounted to $108,535, an increase from $94,284 as of March 31, 2024, representing a 15% growth[169] - Accounts receivable and unbilled revenue totaled $222,255 as of December 31, 2024, down from $232,347 as of March 31, 2024, indicating a decrease of approximately 4.3%[170] - The total operating lease liabilities decreased from $189,880 as of March 31, 2024, to $181,902 as of December 31, 2024, reflecting a reduction of about 4.2%[171] - Long-term debt increased from $139,204 as of March 31, 2024, to $199,575 as of December 31, 2024, marking a significant rise of approximately 43.4%[176] Revenue and Income - Revenue for the three months ended December 31, 2024, was $332,963 thousand, a 2.2% increase from $326,203 thousand in the same period of 2023[26] - Net income for the three months ended December 31, 2024, was $48,573 thousand, compared to $41,537 thousand for the same period in 2023, reflecting a 16.3% increase[29] - Operating income for the three months ended December 31, 2024, was $45,237 thousand, up from $39,388 thousand in the prior year, representing a 14.7% increase[26] - Basic earnings per share for the three months ended December 31, 2024, was $1.12, compared to $0.88 for the same period in 2023, indicating a 27.3% increase[26] - Net income for the nine months ended December 31, 2024, was $119,283, a decrease of 10% compared to $132,943 in 2023[37] - The company reported a total employee benefit cost of $601,488,000 for the nine months ended December 31, 2024, compared to $625,474,000 for the same period in 2023, reflecting a decrease of about 3.8%[205] Cash Flow and Investments - Net cash provided by operating activities increased to $153,767, up 10% from $139,624 in the previous year[37] - Cash flows used in investing activities improved to a net outflow of $3,201, compared to a net outflow of $25,252 in the prior year[37] - The company made a payment of $35,501 for property and equipment and intangible assets, down from $43,844 in the previous year[37] - The company has implemented a share buyback program, purchasing 1,000,000 treasury shares during the three months ended December 31, 2024[31] Acquisitions and Goodwill - The Company acquired The Smart Cube Limited on December 16, 2022, enhancing its capabilities in high-end procurement and advanced analytics[138] - The total consideration for the acquisition of The Smart Cube was $121,643, including a contingent consideration of $15,761 payable over 2 years and 5 months linked to target revenues and adjusted EBITDA[139] - Goodwill from the acquisition of The Smart Cube amounted to $86,444, primarily due to expected synergies and assembled workforce[146] - The acquisition of OptiBuy sp. z.o.o. was for a total consideration of €30,192 ($31,756), including a contingent consideration of €5,800 ($6,103) payable over 2 years and 3 months[150] - Goodwill from the acquisition of OptiBuy was $25,627, also attributed to expected synergies and assembled workforce[158] - The total consideration for the acquisition of Vuram Technology Solutions was $170,347, including a contingent consideration of $21,670 payable over 18 months[162] - Goodwill from the acquisition of Vuram was $110,714, reflecting expected synergies and assembled workforce[168] Financial Reporting and Compliance - The company transitioned to US GAAP for financial reporting starting from the quarter ended June 30, 2024, impacting comparability with previous reports[16] - The company has chosen to voluntarily file reports with the SEC, indicating a strategic shift in compliance and reporting practices[15] Risks and Strategic Initiatives - The company faces various risks including currency fluctuations and competition in the BPM industry, which could impact future performance[21] - The company plans to continue investing in new technologies and market expansion strategies to drive future growth[26] - The company has made strategic acquisitions to expand its service offerings and market share, although specific details are not provided in the content[21] Employee Obligations and Compensation - Total current employee obligations increased from $91,996,000 as of December 31, 2024 to $105,352,000 as of March 31, 2024, reflecting a rise of approximately 14.4%[205] - Salaries and bonuses for the three months ended December 31, 2024 were $202,384,000, compared to $205,461,000 for the same period in 2023, indicating a slight decrease of about 1.0%[205] - The net periodic cost for the defined benefit plan for the three months ended December 31, 2024 was $1,381,000, up from $990,000 in the same period of 2023, representing an increase of approximately 39.4%[207] Derivatives and Foreign Exchange - The company’s primary exchange rate exposure is with the US dollar and pound sterling against the Indian rupee, managing risks through derivative instruments[196] - The notional value of outstanding foreign exchange forward contracts increased to $869,247,000 as of December 31, 2024, compared to $671,800,000 as of March 31, 2024[197] - The total unrealized loss recognized in other comprehensive income for derivatives in cash flow hedging relationships was $(108,000) for the three months ended December 31, 2024[199]

Group 1 - The analyst assigned a hold rating to WNS (Holdings) (NYSE: WNS) in October 2024, citing a lack of positive growth indicators [1] - The analyst views FY26 as a potential turning point but remains cautious due to current growth trends [1] - The investment strategy focuses on identifying undervalued companies with long-term growth potential, emphasizing value investing principles [1]

Financial Data and Key Metrics - The company reported financial results for the fiscal third quarter ended December 31, 2024 [3] - Management will reference certain non-GAAP financial metrics during the call [4] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to individual markets were provided in the content Company Strategy and Industry Competition - No specific details on company strategy or industry competition were provided in the content Management Commentary on Operating Environment and Future Outlook - Management discussed forward-looking statements, noting that they are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied [3] - Risks and uncertainties include factors set forth in the company's Form 20-F, which is available on the company website [3] Other Important Information - A press release detailing the financial results was issued earlier and is available on the Investor Relations section of the company website [2] - The call is being recorded for replay purposes [1] Q&A Session Summary - No Q&A session details were provided in the content

WNS (WNS) Q3 2025 Earnings Call January 23, 2025 08:00 AM ET Company Participants David Mackey - EVP of Finance & Head of IRKeshav Murugesh - Group CEO & DirectorNate Sison - SPEAKERBryan Bergin - MD - Equity ResearchPuneet Jain - Associate - Equity Research Conference Call Participants Surinder Thind - Equity Research AnalystMaggie Nolan - Research Analyst - Technology, Media & CommunicationsDavid J. koning - Associate Director of Research & Senior Research Analyst Operator Good morning, and welcome to the ...