Wipro(WIT) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - IT services revenue for Q1 was $2.63 billion, reflecting a sequential decrease of 1% in constant currency, which was within the guided range for the quarter [12][29] - Operating margin was 16.5%, an increase of 0.1% from the last quarter [13][29] - Net income at INR 30 billion grew 6% sequentially, and EPS for the quarter at INR 5.75 grew 10% year-on-year [30] Business Line Data and Key Metrics Changes - Americas 1 delivered a sequential growth of 0.4%, with positive momentum in consumer and communication sectors [14] - BFSI in Americas 2 achieved a sequential growth of 1.4% and a year-on-year growth of 12.1% [14] - Capco business achieved a sequential growth of 3.4% [14] - Europe and APMEA experienced sequential declines of 1.4% and 4.2% respectively [15] Market Data and Key Metrics Changes - Banking and financial services grew 0.5% sequentially, while manufacturing and energy sectors experienced declines of 3% and 6.3% respectively [16] - Overall bookings for the quarter were$ 3.3 billion, with large deal TCV of $1.2 billion [17] Company Strategy and Development Direction - The company is focusing on large deal creation and has secured 10 large deals in Q1, exceeding$ 1 billion [18] - Strengthening relationships with major clients and strategic partners is a priority, with revenue from top 10 accounts growing 1.3% sequentially [21] - The company is developing AI-powered industry solutions to help clients transform their business models [22] Management's Comments on Operating Environment and Future Outlook - Management noted that clients remain cautious, with low discretionary spending, but there is optimism in sectors like BFSI and consumer business in the U.S. [6][12] - For Q2, the company is guiding for a sequential revenue growth of -1% to +1% in constant currency [28] Other Important Information - Cash flows for Q1 were $479 million, representing 132% of net income, with a current cash balance of$ 5.4 billion [30] - The company is actively investing in talent development and has rolled out an AI-powered career development platform [25] Q&A Session Summary Question: Were there any negative surprises in Q1 performance? - Management stated that performance was within the guidance range, and there was no significant change in the demand environment, with clients remaining cautious [6] Question: What is the outlook for the telco deal won in Q1? - Management indicated that such deals typically take time to ramp up and will realize full revenue potential over a few quarters [33] Question: How has the average tenure of deal wins changed? - Management noted that deal tenures are becoming shorter, with three to five-year deals becoming more common [36] Question: What is the strategy for implementing GenAI in internal software development? - Management highlighted three deployment areas for GenAI, including enhancing employee experience and improving productivity in software development [38][41] Question: What is driving the depreciation and amortization down? - Management indicated that there were no specific one-offs affecting depreciation and amortization for Q1 [47] Question: What is the current drag in BFSI? - Management noted that BFSI in Americas is performing well, while Europe is experiencing some softness due to macroeconomic factors [70] Question: Is there any impact from corporate actions in Europe? - Management clarified that the softness in Europe is due to a combination of factors and not specific to any one client [89] Question: What is the outlook for revenue growth? - Management refrained from commenting on growth beyond Q2 but acknowledged a cautious demand environment [74]