SEC Filings

20-F
WNS (HOLDINGS) LTD filed this Form 20-F on 05/16/2018
Entire Document
 


Table of Contents

The increase in cost of revenue was primarily due to higher employee cost on account of higher headcount (including headcount of businesses acquired during the fourth quarter of fiscal 2017), wage inflation and an increase in share-based compensation expense; higher facilities costs on account of the expansion of existing facilities, addition of new facilities in Philippines, India, China and Romania and the addition of new facilities of acquired businesses; higher legal and professional costs; higher depreciation costs; and higher travel cost. Further, the appreciation of the Indian rupee and South African rand against the US dollar by an average of 3.9% and 7.8%, respectively, in fiscal 2018, as compared to the average exchange rate in fiscal 2017, resulted in an increase of approximately $12.1 million in the cost of revenue. These increases were partially offset by lower repair payments, on account of an overall decrease in revenue from the auto claims segment. Further, the depreciation of the Philippine peso against the US dollar by an average of 5.4% in fiscal 2018, as compared to the average exchange rate in fiscal 2017, resulted in a decrease of approximately $2.1 million in the cost of revenue.

Gross Profit

The following table sets forth our gross profit for the periods indicated:

 

     Year ended March 31,        
     2018     2017     Change  
     (US dollars in millions)  

Gross profit

   $ 254.8     $ 199.2     $ 55.6  

As a percentage of revenue

     33.6     33.1  

As a percentage of revenue less repair payments (non-GAAP)

     34.4     34.4  

Gross profit as a percentage of revenue increased marginally and gross profit as a percentage of revenue less repair payments (non-GAAP) remained constant primarily due to lower cost of revenue as a percentage of revenue and revenue less repair payments (non-GAAP) and an increase in hedging gain on our revenue by $2.4 million to $9.2 million in fiscal 2018 from $6.8 million in fiscal 2017. Cost of revenue as a percentage of revenue and revenue less repair payments (non-GAAP) were lower notwithstanding the appreciation of the Indian rupee and South African rand against the US dollar by an average of 3.9% and 7.8%, respectively, in fiscal 2018, as compared to the average exchange rate for fiscal 2017.

During fiscal 2018, our built up seats increased by 8.5% from 28,008 as at the end of fiscal 2017 to 30,390 as at the end of fiscal 2018 as we added new facilities in Philippines; Romania; Pune, India and Shanghai, China. We also expanded our facilities in Nashik and Pune, India and Guangzhou, China. Our total headcount increased by 5.8% from 34,547 to 36,540 during the same period. The increase in builtup seats was greater than the increase in headcount, resulting in a decrease in our seat utilization rate from 1.23 in fiscal 2017 to 1.22 in fiscal 2018. This 0.01 decrease in our seat utilization rate decreased our gross profit as a percentage of revenue by approximately 0.1% and decreased our gross profit as a percentage of revenue less repair payments (non-GAAP) by approximately 0.2%.

Selling and Marketing Expenses

The following table sets forth the composition of our selling and marketing expenses for the periods indicated:

 

     Year ended March 31,        
     2018     2017     Change  
     (US dollars in millions)  

Employee costs

   $ 31.4     $ 24.7     $ 6.7  

Other costs

     10.4       7.9       2.5  
  

 

 

   

 

 

   

 

 

 

Total selling and marketing expenses

   $ 41.8     $ 32.6     $ 9.1  
  

 

 

   

 

 

   

 

 

 

As a percentage of revenue

     5.5     5.4  

As a percentage of revenue less repair payments (non-GAAP)

     5.6     5.6  

The increase in selling and marketing expenses was primarily due to an increase in employee costs as a result of an increase in sales headcount, wage inflation, and higher share based compensation; higher travel cost; higher miscellaneous cost and higher marketing costs. Further, the appreciation of the pound sterling and Indian rupee against the US dollar by an average of 1.4% and 3.9% respectively, in fiscal 2018, as compared to the average exchange rate for fiscal 2017, resulted in an increase of approximately $0.3 million of selling and marketing expenses. Our selling and marketing expenses also increased as a result of our acquisitions during the fourth quarter of fiscal 2017.

 

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