SEC Filings

6-K
WNS (HOLDINGS) LTD filed this Form 6-K on 11/05/2018
Entire Document
 


Table of Contents

The increase in cost of revenue was primarily due to higher employee cost on account of higher headcount and wage inflation; higher facilities costs on account of the expansion of existing facilities in Gurgaon, Bangalore, and Nasik, India and China and the addition of new facilities in India at Pune and Vizag, and Philippines; higher travel costs, higher other costs primarily due to an increase in subcontracting costs; and higher legal and professional costs. These increases were partially offset by lower repair payments, and lower depreciation costs. Further, the depreciation of the Indian rupee, the South African rand, and Philippine peso against the US dollar by an average of 9.1%, 7.2%, and 5.4%, respectively, for the three months ended September 30, 2018 as compared to the respective average exchange rates for the three months ended September 30, 2017 resulted in a decrease of approximately $6.1 million in the cost of revenue.

Gross Profit

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

 

     Three months ended September 30,        
     2018     2017     Change  
     (US dollars in millions)  

Gross profit

   $ 70.1     $ 61.0     $ 9.1  

As a percentage of revenue

     35.2     32.7  

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

     35.9     33.5  

Gross profit as a percentage of revenue and revenue less repair payments (non-GAAP) increased primarily due to higher revenues, and lower cost of revenue as a percentage of revenue and revenue less repair payments (non-GAAP) as discussed above. Cost of revenue was also lower due to the depreciation of the Indian rupee, the South African rand, and Philippine peso against the US dollar by an average of 9.1%, 7.2%, and 5.4%, respectively, for the three months ended September 30, 2018 as compared to the respective average exchange rates for the three months ended September 30, 2017, partially offset by a decrease in hedging gain in our revenue by $4.1 million to loss of $1.5 million for the three months ended September 30, 2018 from a gain of $2.6 million for the three months ended September 30, 2017.

Our built up seats increased by 11.4% from 28,541 as at September 30, 2017 to 31,798 as at September 30, 2018, during which we expanded seating capacities in our existing delivery centers in Gurgaon, Bangalore, and Nasik, India and China and added new facilities in Pune, Vizag India and the Philippines. This was part of our strategy to expand our delivery capabilities. Our total headcount increased by 9.7% from 35,121 as at September 30, 2017 to 38,516 as at September 30, 2018, resulting in a decrease in our seat utilization rate from 1.23 for the three months ended September 30, 2017 to 1.21 for the three months ended September 30, 2018. This 0.03 decrease in seat utilization resulted in a decrease in our gross profit as a percentage of revenue by approximately 0.3% and our gross profit as a percentage of revenue less repair payments (non-GAAP) by approximately 0.3% in the three months ended September 30, 2018.

Selling and Marketing Expenses

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

 

     Three months ended September 30,        
     2018     2017     Change  
     (US dollars in millions)  

Employee costs

   $ 8.8     $ 8.2     $ 0.6  

Other costs

     2.5       2.1       0.4  
  

 

 

   

 

 

   

 

 

 

Total selling and marketing expenses

   $ 11.3     $ 10.3     $ 1.0  
  

 

 

   

 

 

   

 

 

 

As a percentage of revenue

     5.7     5.5  

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 expense, and an increase in other costs as a result of higher legal and professional costs, and higher travel costs. This increase was partially offset by a depreciation of the Indian rupee against the US dollar by an average of 9.1% for the three months ended September 30, 2018 as compared to the average exchange rate for the three months ended September 30, 2017 which resulted in a decrease of approximately of $0.1 million of selling and marketing expenses.

 

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