WNS(WNS) - 2026 Q1 - Quarterly Results

Fiscal 2026 First Quarter Financial Highlights WNS reported solid revenue growth driven by acquisitions and client expansion, though GAAP profit declined due to increased expenses and strategic investments Overall Performance WNS reported solid revenue growth driven by acquisitions and client expansion, though GAAP profit declined due to increased expenses and strategic investments Q1 FY2026 Key Financial and Operational Metrics | Metric | Q1 FY2026 | Q1 FY2025 | Q4 FY2025 | | :--- | :--- | :--- | :--- | | GAAP Metrics | | | | | Revenue | $353.8 M | $323.1 M | $336.3 M | | Profit | $21.8 M | $28.9 M | $50.8 M | | Diluted EPS | $0.48 | $0.61 | $1.12 | | Non-GAAP Metrics | | | | | Revenue less repair payments* | $339.9 M | $312.4 M | $323.3 M | | Adjusted Net Income (ANI)* | $46.0 M | $44.0 M | $66.2 M | | Adjusted Diluted EPS* | $1.02 | $0.93 | $1.45 | | Operational Metrics | | | | | New Clients Added | 6 | N/A | N/A | | Existing Relationships Expanded | 28 | N/A | N/A | | Days Sales Outstanding (DSO) | 36 days | 36 days | 34 days | - The company repurchased 1,300,000 ordinary shares at an average price of $57.98, for a total cash impact of $75.4 million, completing its authorized share buyback program[7][8] Revenue Analysis First-quarter revenue increased by 9.5% year-over-year, driven by new clients and acquisitions, despite some client losses and volume reductions Q1 FY2026 Revenue Performance | Metric | Q1 FY2026 | YoY Growth | QoQ Growth | | :--- | :--- | :--- | :--- | | Revenue (GAAP) | $353.8 M | 9.5% | 5.2% | | Revenue less repair payments* (Non-GAAP) | $339.9 M | 8.8% | 5.2% | | Constant Currency Revenue less repair payments* (Non-GAAP) | N/A | 7.1% | 2.9% | - Key revenue drivers included new client additions, expansion of existing relationships, and the acquisition of Kipi.ai[3] - Revenue growth was negatively impacted by the loss of a large Healthcare client and lower volumes in the online travel segment[3] Profitability Analysis GAAP profit declined to $21.8 million due to acquisition and transaction costs, while Adjusted Net Income (ANI) modestly increased to $46.0 million Q1 FY2026 Profitability Comparison (in millions) | Metric | Q1 FY2026 | Q1 FY2025 | Q4 FY2025 | | :--- | :--- | :--- | :--- | | Profit (GAAP) | $21.8 | $28.9 | $50.8 | | Adjusted Net Income (ANI)* | $46.0 | $44.0 | $66.2 | - Year-over-year profit decline was driven by several factors[4] - Increased expenses from the Kipi.ai acquisition (costs and amortization) - Transaction expenses related to the proposed acquisition by Capgemini - Higher share-based compensation - Increased investments and hiring in advance of revenue ramps for large deals Q1 FY2026 Earnings Per Share (EPS) | Metric | Q1 FY2026 | Q1 FY2025 | Q4 FY2025 | | :--- | :--- | :--- | :--- | | Diluted EPS (GAAP) | $0.48 | $0.61 | $1.12 | | Adjusted Diluted EPS* (Non-GAAP) | $1.02 | $0.93 | $1.45 | Balance Sheet and Cash Flow The company maintained a strong financial position with $225.8 million in cash and investments, generating $29.5 million in operating cash flow while completing a $75.4 million share repurchase Key Financial Position Data (as of June 30, 2025) | Item | Amount (in millions) | | :--- | :--- | | Cash and Investments | $225.8 | | Debt | $266.2 | - Key cash flow activities for Q1 FY2026 included[7] - Generated $29.5 million in cash from operations - Incurred $14.8 million in capital expenditures - Repaid $21.1 million in debt - Used $75.4 million for share repurchases - Days sales outstanding (DSO) was 36 days, unchanged from Q1 of the previous year but up from 34 days in the prior quarter[7] Corporate Developments WNS entered a definitive agreement to be acquired by Capgemini, leading to the suspension of guidance and conference calls, while extending the CEO's contract - WNS entered into a definitive agreement to be acquired by Capgemini[9] - In light of the pending acquisition, WNS will not hold a Q1 2026 conference call or provide updated guidance for fiscal year 2026[9] - The contract of CEO Keshav Murugesh has been extended through the earlier of August 5, 2026, or the closure of the Capgemini acquisition[9] Financial Statements This section presents the company's condensed consolidated statements of income and financial position for the first quarter of fiscal year 2026 Condensed Consolidated Statements of Income The income statement details the company's revenues, costs, and expenses, resulting in a net income of $21.8 million for the quarter ended June 30, 2025 Condensed Consolidated Statements of Income (Unaudited, in millions) | | Three months ended Jun 30, 2025 | Three months ended Jun 30, 2024 | Three months ended Mar 31, 2025 | | :--- | :--- | :--- | :--- | | Revenue | $353.8 | $323.1 | $336.3 | | Cost of revenue | $237.2 | $209.4 | $216.3 | | Gross profit | $116.6 | $113.7 | $120.0 | | Selling and marketing expenses | $20.9 | $21.5 | $20.0 | | General and administrative expenses | $55.7 | $45.7 | $43.2 | | Amortization of intangible assets | $8.7 | $6.9 | $7.5 | | Operating income | $33.1 | $38.6 | $50.3 | | Income before income tax expense | $32.2 | $38.0 | $67.4 | | Income tax expenses | $10.5 | $9.1 | $16.6 | | Net income | $21.8 | $28.9 | $50.8 | Condensed Consolidated Statements of Financial Position The balance sheet as of June 30, 2025, shows total assets of $1,568.8 million and total liabilities of $771.1 million, with shareholders' equity decreasing due to share repurchases Key Balance Sheet Items (Unaudited, in millions) | | As at Jun 30, 2025 | As at Mar 31, 2025 | | :--- | :--- | :--- | | Total Current Assets | $548.1 | $564.8 | | Cash and cash equivalents | $100.9 | $106.9 | | Accounts receivable, net | $140.7 | $129.7 | | Total Assets | $1,568.8 | $1,547.5 | | Total Current Liabilities | $373.5 | $321.0 | | Short-term borrowings & Current portion of long-term debt | $125.1 | $83.7 | | Total Liabilities | $771.1 | $709.8 | | Total Shareholders' Equity | $797.8 | $837.7 | Non-GAAP Financial Measures and Reconciliations This section explains and reconciles WNS's non-GAAP financial measures, providing a clearer view of its core operating performance by adjusting for specific non-recurring or non-core items Explanation of Non-GAAP Measures WNS utilizes several non-GAAP financial measures to provide investors with a view of its core operating performance, including 'Revenue less repair payments', 'Constant currency revenue', and 'Adjusted Net Income (ANI)' - Revenue less repair payments: Calculated as revenue minus payments to third-party repair centers, intended to more accurately reflect the value of WNS's direct services[21] - Constant currency revenue less repair payments: Recalculates prior period revenues using current period exchange rates to eliminate the impact of currency fluctuations for better period-to-period comparison[22] - Adjusted Net Income (ANI): Calculated by excluding items such as share-based compensation, acquisition-related expenses, transaction expenses for the Capgemini deal, and amortization of intangible assets (and their tax effects) from GAAP net income[23] Reconciliation of GAAP to Non-GAAP Measures This section provides detailed tables that bridge the gap between reported GAAP results and the company's non-GAAP metrics for revenue, operating income, and net income, clarifying the specific adjustments made for each Revenue Reconciliation For Q1 FY2026, GAAP revenue of $353.8 million is reconciled to non-GAAP revenue less repair payments of $339.9 million by subtracting $13.9 million in payments to repair centers Reconciliation of Revenue (in millions) | | Three months ended Jun 30, 2025 | | :--- | :--- | | Revenue (GAAP) | $353.8 | | Less: Payments to repair centers | (13.9) | | Revenue less repair payments (non-GAAP) | $339.9 | | Exchange rate impact | 0.9 | | Constant currency revenue less repair payments (non-GAAP) | $340.9 | Operating Income Reconciliation GAAP Operating Income of $33.1 million for Q1 FY2026 is adjusted for items including share-based compensation ($11.7 million), amortization of intangibles ($8.7 million), acquisition expenses ($4.1 million), and Capgemini transaction expenses ($2.2 million) to arrive at an Adjusted Operating Income of $61.1 million Reconciliation of Operating Income (in millions) | | Three months ended Jun 30, 2025 | | :--- | :--- | | Operating income (GAAP) | $33.1 | | Add: Share-based compensation expense | 11.7 | | Add: Acquisition-related expenses | 4.1 | | Add: Transaction expenses (Capgemini) | 2.2 | | Add: Amortization of intangible assets | 8.7 | | Add: Other adjustments | 1.3 | | Adjusted operating income (non-GAAP) | $61.1 | Net Income Reconciliation GAAP Net Income of $21.8 million for Q1 FY2026 is reconciled to Adjusted Net Income (ANI) of $46.0 million, with major adjustments including adding back share-based compensation ($11.7 million), amortization of intangibles ($8.7 million), and acquisition-related expenses ($4.1 million), offset by a tax impact of $3.8 million Reconciliation of Net Income to ANI (in millions) | | Three months ended Jun 30, 2025 | | :--- | :--- | | Net income (GAAP) | $21.8 | | Add: Share-based compensation expense | 11.7 | | Add: Acquisition-related expenses / (benefits), net | 4.1 | | Add: Transaction expenses (Capgemini) | 2.2 | | Add: Amortization of intangible assets | 8.7 | | Add: Other adjustments | 1.3 | | Less: Tax impact on above | (3.8) | | Adjusted Net Income (non-GAAP) | $46.0 |