Business Wire IndiaWNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global Business Process Management (BPM) services, today announced results for the fiscal 2020 third quarter ended December 31, 2019.
| Highlights – Fiscal 2020 Third Quarter: |
GAAP Financials
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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 third quarter was $239.2 million, representing a 19.7% increase versus Q3 of last year and a 5.7% increase from the previous quarter. Revenue less repair payments* in the third quarter was $228.2 million, an increase of 16.5% year-over-year and a 3.4% increase sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal third quarter grew 16.1% versus Q3 of last year and 3.0% sequentially. Year-over-year, fiscal Q3 revenue improvement was broad-based across several key verticals, services, and geographies. Sequentially, revenue strength was driven by healthy growth with both new and existing clients, and favorable currency impacts net of hedging. Operating margin in the third quarter was 16.3%, as compared to 16.7% in Q3 of last year and 16.1% in the previous quarter. On a year-over-year basis, margin reduced as a result of the impact of our annual wage increases, lower productivity, and currency movements net of hedging. These headwinds more than offset favorability from the impact of IFRS 16 lease accounting, improved seat utilization, and operating leverage on higher volume. Sequentially, margins improved due to lower share-based compensation expense, improved seat utilization, and operating leverage on higher volume. These benefits were partially offset by higher Selling and Marketing and General and Administrative expenses associated with increased staffing levels and bonus provisioning based on updated visibility. Third quarter adjusted operating margin* was 22.8%, versus 23.0% in Q3 of last year and 23.5% last quarter. Explanations for the adjusted operating margin* movements on a year-over-year basis are the same as described for GAAP operating margins above. Sequentially, adjusted operating margin* reduced due to higher Selling and Marketing and General and Administrative expenses, which more than offset favorability from improved seat utilization and operating leverage on higher volume.
Profit in the fiscal third quarter was $30.9 million, as compared to $28.6 million in Q3 of last year and $28.7 million in the previous quarter. Year-over-year, profit favorability was driven by revenue growth and a lower effective tax rate which more than offset the impact of IFRS 16 and higher share-based compensation expense. Sequentially, profit increased as revenue growth and lower share-based compensation expenses more than offset lower operating margins. Adjusted net income (ANI)* in Q3 was $40.9 million, up $2.9 million as compared to Q3 of last year and up $0.3 million from 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 share-based compensation and associated tax impacts, which are excluded from ANI*. From a balance sheet perspective, WNS ended Q3 with $280.1 million in cash and investments and $47.5 million of debt. In the third quarter, the company generated $62.5 million in cash from operations and incurred $4.8 million in capital expenditures. Third quarter days sales outstanding were 30 days, as compared to 32 days reported in Q3 of last year and 29 days in the previous quarter. “WNS’s differentiated capabilities in the BPM marketplace are resonating well with both existing and prospective clients, enabling the company to continue delivering solid financial and operating results. In the fiscal third quarter, revenue less repair payments* grew 16% year-over-year on both a reported and constant currency* basis. The company also posted 23% adjusted operating margin*, $0.80 in adjusted diluted earnings per share, and $62 million in cash from operations,” said Keshav Murugesh, WNS’s Chief Executive Officer. “WNS remains focused on enhancing our ability to “co-create” unique, industry-specific solutions which enable our clients to improve their competitive positioning. To do this, we will continue to invest in technology, transformation, analytics, and domain to insure we remain relevant today and in the future. Our focus remains on the long-term BPM opportunity, and on superior execution which will enable value creation for all our key stakeholders.”
- Revenue less repair payments* is expected to be between $890 million and $900 million, up from $794.0 million in fiscal 2019. This assumes an average GBP to USD exchange rate of 1.31 for the remainder of fiscal 2020.
- ANI* is expected to range between $158 million and $162 million versus $140.4 million in fiscal 2019. This assumes an average USD to INR exchange rate of 71.00 for the remainder of fiscal 2020.
- Based on a diluted share count of 51.9 million shares, the company expects adjusted diluted earnings* per ADS to be in the range of $3.05 to $3.12 versus $2.69 in fiscal 2019.
Source: Businesswire