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 ...

Financial Performance - Revenue for Q3 fiscal 2025 was $333.0 million, a 2.1% increase year-over-year and a 3.2% increase sequentially[4] - Profit for Q3 fiscal 2025 was $48.6 million, compared to $41.5 million in Q3 of the previous year and $41.8 million in the previous quarter[5] - Adjusted Net Income (ANI) for Q3 was $47.0 million, down from $58.5 million in Q3 of last year and $51.5 million in the previous quarter[7] - Revenue (GAAP) for the three months ended December 31, 2024, was $333.0 million, reflecting a growth of 2.1% compared to $326.2 million for the same period in 2023[30] - Revenue less repair payments (non-GAAP) increased to $319.1 million, up 1.0% from $315.9 million year-over-year[30] - Adjusted operating income (non-GAAP) for the three months ended December 31, 2024, was $61.7 million, with an adjusted operating income margin of 19.3%[31] - Net income (GAAP) rose to $48.6 million for the three months ended December 31, 2024, compared to $41.5 million in the same period last year, marking a year-over-year increase of 17.0%[32] - Adjusted net income (non-GAAP) was $47.0 million, down from $58.5 million in the prior year, resulting in an adjusted net income margin of 14.7%[32] - The company reported an adjusted diluted earnings per share (non-GAAP) of $1.04 for the three months ended December 31, 2024[32] Client Acquisition and Relationships - The company added 7 new clients and expanded 52 existing relationships during the quarter[6] Cash Flow and Debt - WNS ended Q3 with $231.5 million in cash and investments and $199.6 million in debt[8] - The company generated $88.7 million in cash from operations during the quarter[8] Guidance and Projections - WNS updated its fiscal 2025 guidance, expecting revenue less repair payments to decline by 2% to 1% on a reported basis[10] - Expected ANI for fiscal 2025 is projected to range between $205 million and $209 million, down from $218.0 million in fiscal 2024[13] - The company anticipates adjusted diluted earnings per share for fiscal 2025 to be in the range of $4.46 to $4.55, compared to $4.42 in fiscal 2024[13] Balance Sheet Changes - Total assets decreased from $1,434.1 million as of March 31, 2024, to $1,409.8 million as of December 31, 2024, representing a decline of approximately 1.7%[20] - Current liabilities decreased from $312.0 million to $285.8 million, a reduction of about 8.4%[20] - Total shareholders' equity decreased from $787.3 million to $763.1 million, a decline of approximately 3.1%[21] Acquisition-Related Expenses - The company highlighted the impact of acquisition-related expenses, which included a reversal of contingent consideration related to acquisitions in 2024[32] Days Sales Outstanding - Days sales outstanding (DSO) improved to 34 days, compared to 35 days in Q3 of last year[8]

I gave WNS Holdings (NYSE: WNS ) a hold rating from my last coverage on 23 rd July. My key thesis was that the business growth outlook was poor as the majority ofI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value and holding the ...

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Financial Data and Key Metrics Changes - The company reported net revenue of $310.7 million, a year-over-year decrease of 4.4% and a 5.2% decrease on a constant currency basis [4][15] - Adjusted operating margin for Q2 was 18.6%, down from 21.5% in the same quarter last year [16] - Adjusted net income for Q2 was $51.5 million, compared to $54.4 million in the same quarter of fiscal 2024 [17] - The effective tax rate for Q2 was 8.5%, significantly lower than 22% last year, primarily due to a one-time tax benefit [17] Business Line Data and Key Metrics Changes - The company added nine new logos and expanded 41 existing relationships during the quarter [4] - Revenue declines were partially offset by the ramp of large deals closed in Q4 and healthy demand for digitization and cost reduction initiatives [15] - Excluding the loss of a large healthcare client, each vertical posted sequential growth [15] Market Data and Key Metrics Changes - The company has more than 20 large deals in the pipeline, representing over $500 million in annual contract value [5] - OTA revenues in Q2 were below 4% of total company revenue, reflecting ongoing challenges in that sector [37] Company Strategy and Development Direction - The company is focused on delivering outcomes at the intersection of domain, digital, and data, with strategic investments in these areas [6][12] - WNS aims to leverage AI and generative AI to enhance its service offerings and drive long-term growth [12][51] - The company has removed large deal revenue contributions from its fiscal 2025 guidance due to timing uncertainties [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to strong growth rates, citing specific client-related issues rather than overall demand trends as the cause of current challenges [29] - The company anticipates sequential revenue growth in Q3 and Q4, despite the removal of large deal contributions from guidance [14][31] - Management emphasized the importance of maintaining investments in capabilities and infrastructure to support future growth [45] Other Important Information - The company repurchased 2.8 million shares in the first half of the year, with another 1.3 million shares remaining under the authorization [67] - The attrition rate was 34%, consistent with the previous quarter, and headcount at the end of Q2 was 62,951 [19] Q&A Session All Questions and Answers Question: Can you provide clarity on the large deal pipeline and win rates? - Management confirmed that the large deal pipeline remains strong, with over 25 large deals in progress, but emphasized the need for executive involvement and the complexity of these deals [22][23] Question: How do you view the company's ability to return to historical growth rates? - Management expressed confidence in returning to strong growth rates, attributing current challenges to specific client-related issues rather than overall demand trends [29][30] Question: Can you comment on the OTA side and its impact on guidance? - Management indicated that the OTA sector's challenges contributed approximately 1% to 2% impact on the full-year guidance reduction [33] Question: What are the expectations for margins in the back half of the year? - Management expects adjusted operating margins to improve in Q3 and Q4, aiming for low 20s EBIT margins in the long term [45][46] Question: How is client behavior changing regarding AI and analytics? - Management noted that clients are increasingly recognizing the value of AI and analytics, leading to more significant discussions about transformation and business model changes [49][51]