PRESS RELEASE
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WNS Announces Fiscal 2017 First Quarter Earnings, Revises Full Year Guidance
Highlights – Fiscal 2017 First Quarter: | |||
GAAP Financials |
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Revenue of $148.0 million, up 10.3% from $134.1 million in Q1 of last year and up 3.7% from $142.6 million last quarter |
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Profit of $12.2 million, compared to $12.8 million in Q1 of last year and $15.9 million last quarter |
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Diluted earnings per ADS of $0.23, compared to $0.24 in Q1 of last year and $0.30 last quarter |
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Non-GAAP Financial Measures* |
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Revenue less repair payments of $140.8 million, up 11.3% from $126.5 million in Q1 of last year and up 4.0% from $135.3 million last quarter |
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Adjusted Net Income (ANI) of $23.9 million, compared to $22.6 million in Q1 of last year and $26.9 million last quarter |
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Adjusted diluted earnings per ADS of $0.45, compared to $0.42 in Q1 of last year and $0.50 last quarter |
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Other Metrics |
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Added 6 new clients in the quarter, expanded 6 existing relationships |
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Days sales outstanding (DSO) at 29 days |
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Global headcount of 32,448 as of June 30, 2016 |
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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 first quarter was
Operating margin in the first quarter was 9.8%, as compared to 11.5% in Q1 of last year and 13.2% reported in the previous quarter. First quarter adjusted operating margin* was 18.6%, versus 20.0% in Q1 of last year and 22.0% last quarter. On a year-over-year basis, these margins were pressured by the impact of our annual wage increases, balance sheet revaluation resulting from depreciation in the British Pound, and increased compensation associated with the India Payment of Bonus Act. In addition, our GAAP operating margins were adversely impacted by an increase in our share-based compensation. Partially offsetting these costs was increased operating leverage from higher volumes. Sequentially, margins reduced as a result of wage increases and currency movements net of hedging. These headwinds more than offset margin benefits from productivity improvements and higher volumes.
Profit in the fiscal first quarter was
From a balance sheet perspective, WNS ended Q1 with
“During the fiscal first quarter, WNS delivered solid revenue growth and
continued to position the company for long-term success. In Q1, we added
several new strategic relationships which highlighted our capabilities
in domain expertise, technology-enabled solutions and analytics,” said
Fiscal 2017 Guidance
WNS is updating guidance for the fiscal year ending
-
Revenue less repair payments* is expected to be between
$541 million and $569 million , up from$531.0 million in fiscal 2016. This assumes an average GBP to USD exchange rate of 1.30 for the remainder of fiscal 2017. -
ANI* is expected to range between
$94 million and $100 million versus$103.0 million in fiscal 2016. This assumes an average USD to INR exchange rate of 67.5 for the remainder of fiscal 2017. -
Based on a diluted share count of 53.0 million shares, the company
expects adjusted diluted earnings* per ADS to be in the range of
$1.78 to$1.89 .
“The company has updated our forecast for fiscal 2017 based on current
visibility levels and exchange rates,” said
Conference Call
WNS will host a conference call on
About WNS
Safe Harbor Statement
This release contains forward-looking statements, as defined in the safe
harbor provisions of the US Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on our current
expectations and assumptions about our Company and our industry.
Generally, these forward-looking statements may be identified by the use
of terminology such as “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “will,” “seek,” “should” and similar expressions. These
statements include, among other things, the discussions of our strategic
initiatives and the expected resulting benefits, our growth
opportunities, industry environment, expectations concerning our future
financial performance and growth potential, including our fiscal 2016
guidance and future profitability, and expected foreign currency
exchange rates. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from
those expressed or implied by such statements. Such risks and
uncertainties include but are not limited to worldwide economic and
business conditions; political or economic instability in the
jurisdictions where we have operations; our dependence on a limited
number of clients in a limited number of industries; regulatory,
legislative and judicial developments; increasing competition in the BPM
industry; technological innovation; telecommunications or technology
disruptions; our liability arising from fraud or unauthorized disclosure
of sensitive or confidential client and customer data; our ability to
attract and retain clients; negative public reaction in the US or the
References to “$” and “USD” refer to
* See “About Non-GAAP Financial Measures” and the reconciliations of the historical non-GAAP financial measures to our GAAP operating results at the end of this release.
About Non-GAAP Financial Measures
The financial information in this release is focused on non-GAAP
financial measures as we believe that they reflect more accurately our
operating performance. Reconciliations of these non-GAAP financial
measures to our GAAP operating results are included below. A discussion
of our GAAP measures is contained in “Part I – Item 5. Operating and
Financial Review and Prospects” in our annual report on Form 20-F filed
with the
For financial statement reporting purposes, WNS has two reportable
segments: WNS Global BPM and WNS Auto Claims BPM. Revenue less repair
payments is a non-GAAP financial measure that is calculated as (a)
revenue less (b) in the auto claims business, payments to repair centers
for “fault” repair cases where WNS acts as the principal in its dealings
with the third party repair centers and its clients. WNS believes that
revenue less repair payments for “fault” repairs reflects more
accurately the value addition of the business process management
services that it directly provides to its clients. For more details,
please see the discussion in “Part I – Item 5. Operating and Financial
Review and Prospects – Overview” in our annual report on Form 20-F filed
with the
Constant currency revenue less repair payments is a non-GAAP financial measure. We present constant currency revenue less repair payments so that revenue less repair payments may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Constant currency revenue less repair payments is presented by recalculating prior period’s revenue less repair payments denominated in currencies other than in US dollars using the foreign exchange rate used for the latest period, without taking into account the impact of hedging gains/losses. Our non-US dollar denominated revenues include, but are not limited to, revenues denominated in pound sterling, South African rand, Australian dollar and euro.
WNS also presents (1) adjusted operating margin, which refers to adjusted operating profit (calculated as operating profit excluding amortization of intangible assets and share-based compensation expense) as a percentage of revenue less repair payments, and (2) ANI, which is calculated as profit excluding amortization of intangible assets and share-based compensation expense, and other non-GAAP measures included in this release as supplemental measures of its performance. WNS presents these non-GAAP measures because it believes they assist investors in comparing its performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance. In addition, it uses these non-GAAP measures (i) as a factor in evaluating management’s performance when determining incentive compensation and (ii) to evaluate the effectiveness of its business strategies. These non-GAAP measures are not meant to be considered in isolation or as a substitute for WNS’s financial results prepared in accordance with IFRS.
WNS (HOLDINGS) LIMITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, amounts in millions, except share and per share data) |
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Three months ended | ||||||||||||||||||
Jun 30,
2016 |
Jun 30,
2015 |
Mar 31,
2016 |
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Revenue | $ | 148.0 | $ | 134.1 | $ | 142.6 | ||||||||||||
Cost of revenue | 98.7 | 88.8 | 92.2 | |||||||||||||||
Gross profit | 49.3 | 45.3 | 50.4 | |||||||||||||||
Operating expenses: | ||||||||||||||||||
Selling and marketing expenses | 7.7 | 7.4 | 7.4 | |||||||||||||||
General and administrative expenses | 20.9 | 18.0 | 20.8 | |||||||||||||||
Foreign exchange loss/ (gain), net | (0.1 | ) | (1.8 | ) | (2.8 | ) | ||||||||||||
Amortization of intangible assets | 6.3 | 6.2 | 6.2 | |||||||||||||||
Operating profit | 14.5 | 15.4 | 18.8 | |||||||||||||||
Other income, net | (2.3 | ) | (2.2 | ) | (2.6 | ) | ||||||||||||
Finance expense | 0.1 | 0.1 | 0.0 | |||||||||||||||
Profit before income taxes | 16.8 | 17.5 | 21.4 | |||||||||||||||
Provision for income taxes | 4.6 | 4.7 | 5.5 | |||||||||||||||
Profit | $ | 12.2 | $ | 12.8 | $ | 15.9 | ||||||||||||
Earnings per share of ordinary share | ||||||||||||||||||
Basic | $ | 0.24 | $ | 0.25 | $ | 0.31 | ||||||||||||
Diluted | $ | 0.23 | $ | 0.24 | $ | 0.30 | ||||||||||||
Growth of revenue (GAAP) and revenue less repair payments (non-GAAP) |
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Three months ended Jun 30, 2016 compared to |
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Jun 30, 2016 |
Jun 30, 2015 |
Mar 31, 2016 |
Jun 30, 2015 |
Mar 31, 2016 |
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(Amounts in millions) | (% growth) | ||||||||||||||||||||||||||||
Revenue (GAAP) | $ | 148.0 | $ | 134.1 | $ | 142.6 |
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10.3 | % | 3.7 | % | ||||||||||||||||||
Less: Payments to repair centers | 7.2 | 7.6 | 7.3 | (6.0 | )% | (1.9 | )% | ||||||||||||||||||||||
Revenue less repair payments (Non-GAAP) | $ | 140.8 | $ | 126.5 | $ | 135.3 | 11.3 | % | 4.0 | % | |||||||||||||||||||
Exchange rate impact | (1.2 | ) | (6.9 | ) | (0.7 | ) | |||||||||||||||||||||||
Constant currency revenue less repair payments (Non-GAAP) |
$ | 139.6 | $ | 119.6 | $ | 134.6 | 16.7 | % | 3.7 | % | |||||||||||||||||||
Reconciliation of cost of revenue (GAAP to non-GAAP) |
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Jun 30, 2015 |
Mar 31, 2016 |
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(Amounts in millions) | |||||||||||||||
Cost of revenue (GAAP) | $ | 98.7 | $ | 88.8 | $ | 92.2 | |||||||||
Less: Payments to repair centers | 7.2 | 7.6 | 7.3 | ||||||||||||
Less: Share-based compensation expense | 0.6 | 0.6 | 0.5 | ||||||||||||
Adjusted cost of revenue (excluding payment to repair centers and share-based compensation expense) (Non-GAAP) |
$ | 90.9 | $ | 80.6 | $ | 84.4 | |||||||||
Reconciliation of gross profit (GAAP to non-GAAP) |
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Jun 30, 2015 |
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(Amounts in millions) | ||||||||||||||||||
Gross profit (GAAP) | $ | 49.3 | $ | 45.3 | $ | 50.4 | ||||||||||||
Add: Share-based compensation expense | 0.6 | 0.6 | 0.5 | |||||||||||||||
Adjusted gross profit (excluding share-based compensation expense) (Non-GAAP) | $ | 49.9 | $ | 45.9 | $ | 50.9 | ||||||||||||
Three months ended | ||||||||||||||||||
Jun 30, 2016 |
Jun 30, 2015 |
Mar 31, 2016 |
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Gross profit as a percentage of revenue (GAAP) | 33.3 | % | 33.8 | % |
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35.3 | % | |||||||||||
Adjusted gross profit (excluding share-based compensation expense) as a percentage of revenue less repair payments (Non-GAAP) | 35.4 | % | 36.3 | % | 37.6 | % | ||||||||||||
Reconciliation of selling and marketing expenses (GAAP to non-GAAP) |
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Jun 30, 2015 |
Mar 31, 2016 |
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(Amounts in millions) | ||||||||||||||||||
Selling and marketing expenses (GAAP) | $ | 7.7 | $ | 7.4 | $ | 7.4 | ||||||||||||
Add: Share-based compensation expense | 0.3 | 0.5 | 0.3 | |||||||||||||||
Adjusted selling and marketing expenses (excluding share-based compensation expense) (Non-GAAP) | $ | 7.4 | $ | 6.9 | $ | 7.1 | ||||||||||||
Three months ended | ||||||||||||||||||
Jun 30, 2016 |
Jun 30, 2015 |
Mar 31, 2016 |
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Selling and marketing expenses as a percentage of revenue (GAAP) | 5.2 | % | 5.5 | % |
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5.2 | % | |||||||||||
Adjusted selling and marketing expenses (excluding share-based compensation expense) as a percentage of revenue less repair payments (Non-GAAP) | 5.3 | % | 5.5 | % | 5.2 | % | ||||||||||||
Reconciliation of general and administrative expenses (GAAP to non-GAAP) |
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Jun 30, 2015 |
Mar 31, 2016 |
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(Amounts in millions) | ||||||||||||||||||
General and administrative expenses (GAAP) | $ | 20.9 | $ | 18.0 | $ | 20.8 | ||||||||||||
Less: Share-based compensation expense | 4.5 | 2.6 | 3.9 | |||||||||||||||
Adjusted general and administrative expenses (excluding share-based compensation expense) (Non-GAAP) |
$ | 16.4 | $ | 15.4 | $ | 16.9 | ||||||||||||
Three months ended | ||||||||||||||||||
Jun 30, 2016 |
Jun 30, 2015 |
Mar 31, 2016 |
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General and administrative expenses as a percentage of revenue (GAAP) | 14.1 | % | 13.5 | % | 14.6 | % | ||||||||||||
Adjusted general and administrative expenses (excluding share-based compensation expense) as a percentage of revenue less repair payments (Non-GAAP) |
11.6 | % | 12.2 | % | 12.5 | % | ||||||||||||
Reconciliation of operating profit (GAAP to non-GAAP) |
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Jun 30, 2015 |
Mar 31, 2016 |
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(Amounts in millions) | ||||||||||||||||||
Operating profit (GAAP) | $ | 14.5 | $ | 15.4 | $ | 18.8 | ||||||||||||
Add: Amortization of intangible assets | 6.3 | 6.2 | 6.2 | |||||||||||||||
Add: Share-based compensation expense | 5.4 | 3.7 | 4.8 | |||||||||||||||
Adjusted operating profit (excluding amortization of intangible assets and share-based compensation expense) (Non-GAAP) | $ | 26.3 | $ | 25.3 | $ | 29.8 | ||||||||||||
Three months ended | ||||||||||||||||||
Jun 30, 2016 |
Jun 30, 2015 |
Mar 31, 2016 |
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Operating profit as a percentage of revenue (GAAP) | 9.8 | % | 11.5 | % | 13.2 | % | ||||||||||||
Adjusted operating profit (excluding amortization of intangible assets and share-based compensation expense) as a percentage of revenue less repair payments (Non-GAAP) | 18.6 | % | 20.0 | % | 22.0 | % | ||||||||||||
Reconciliation of profit (GAAP to non-GAAP) |
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Jun 30, 2015 |
Mar 31, 2016 |
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(Amounts in millions) | ||||||||||||||||||
Profit (GAAP) | $ | 12.2 | $ | 12.8 | $ | 15.9 | ||||||||||||
Add: Amortization of intangible assets | 6.3 | 6.2 | 6.2 | |||||||||||||||
Add: Share-based compensation expense | 5.4 | 3.7 | 4.8 | |||||||||||||||
Adjusted net income (excluding amortization of intangible assets and share-based compensation expense) (Non-GAAP) | $ | 23.9 | $ | 22.6 | $ | 26.9 | ||||||||||||
Three months ended | ||||||||||||||||||
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Jun 30, 2015 |
Mar 31, 2016 |
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Profit as a percentage of revenue (GAAP) | 8.2 | % | 9.5 | % | 11.1 | % | ||||||||||||
Adjusted net income (excluding amortization of intangible assets and share-based compensation expense) as a percentage of revenue less repair payments (Non-GAAP) | 17.0 | % | 17.9 | % | 19.9 | % | ||||||||||||
Reconciliation of basic income per ADS (GAAP to non-GAAP) |
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Jun 30, 2015 |
Mar 31, 2016 |
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Basic earnings per ADS (GAAP) | $ | 0.24 | $ | 0.25 | $ | 0.31 | |||||||||
Add: Adjustments for amortization of intangible assets and share-based compensation expense | 0.23 | 0.19 | 0.21 | ||||||||||||
Adjusted basic net income per ADS (excluding amortization of intangible assets and share-based compensation expense) (Non-GAAP) | $ | 0.47 | $ | 0.44 | $ | 0.52 | |||||||||
Reconciliation of diluted income per ADS (GAAP to non-GAAP) |
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Jun 30, 2015 |
Mar 31, 2016 |
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Diluted earnings per ADS (GAAP) | $ | 0.23 | $ | 0.24 | $ | 0.30 | |||||||||
Add: Adjustments for amortization of intangible assets and share-based compensation expense | 0.22 | 0.18 |
0.20 |
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Adjusted diluted net income per ADS (excluding amortization of intangible assets and share-based compensation expense) (Non-GAAP) | $ | 0.45 | $ | 0.42 | $ | 0.50 | |||||||||
WNS (HOLDINGS) LIMITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, amounts in millions, except share and per share data) |
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As at Jun 30, 2016 |
As at Mar 31, 2016 |
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ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 64.4 | $ | 41.9 | ||||||||
Investments | 82.1 | 133.0 | ||||||||||
Trade receivables, net | 58.1 | 54.9 | ||||||||||
Unbilled revenue | 45.5 | 44.3 | ||||||||||
Funds held for clients | 11.3 | 11.9 | ||||||||||
Derivative assets | 19.4 | 13.9 | ||||||||||
Prepayments and other current assets | 23.1 | 22.6 | ||||||||||
Total current assets | 304.0 | 322.5 | ||||||||||
Non-current assets: | ||||||||||||
Goodwill | 73.3 | 76.2 | ||||||||||
Intangible assets | 22.0 | 27.1 | ||||||||||
Property and equipment | 47.8 | 50.4 | ||||||||||
Derivative assets | 6.8 | 4.8 | ||||||||||
Cash consideration, pending allocation | 11.7 |
– |
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Investments | 0.1 |
– |
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Deferred tax assets | 21.3 | 22.5 | ||||||||||
Other non-current assets | 27.0 | 21.8 | ||||||||||
Total non-current assets | 209.9 | 203.0 | ||||||||||
TOTAL ASSETS | $ | 513.9 | $ | 525.5 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Trade payables | $ | 18.7 | $ | 19.9 | ||||||||
Provisions and accrued expenses | 23.1 | 24.7 | ||||||||||
Derivative liabilities | 11.7 | 3.3 | ||||||||||
Pension and other employee obligations | 35.8 | 44.8 | ||||||||||
Deferred revenue | 4.5 | 2.9 | ||||||||||
Current taxes payable | 5.1 | 1.7 | ||||||||||
Other liabilities | 8.4 | 6.0 | ||||||||||
Total current liabilities | 107.2 | 103.3 | ||||||||||
Non-current liabilities: | ||||||||||||
Derivative liabilities | 0.7 | 0.5 | ||||||||||
Pension and other employee obligations | 9.9 | 6.9 | ||||||||||
Deferred revenue | 0.2 | 0.3 | ||||||||||
Other non-current liabilities | 4.7 | 4.5 | ||||||||||
Deferred tax liabilities | 2.1 | 1.8 | ||||||||||
Total non-current liabilities | 17.6 | 13.9 | ||||||||||
TOTAL LIABILITIES | 124.7 | 117.3 | ||||||||||
Shareholders' equity: | ||||||||||||
Share capital (ordinary shares $0.16 (10 pence) par value, authorized 60,000,000 shares; issued: 52,667,089 shares and 52,406,304 shares; outstanding: 50,817,089 shares and 51,306,304 shares; each as at June 30, 2016 and March 31, 2016, respectively) | 8.2 | 8.2 | ||||||||||
Share premium | 312.4 | 306.9 | ||||||||||
Retained earnings | 252.4 | 240.2 | ||||||||||
Other components of equity | (130.6 | ) | (116.7 | ) | ||||||||
Total shareholders’ equity including shares held in treasury | 442.5 | 438.6 | ||||||||||
Less: 1,850,000 shares as of June 30, 2016 and 1,100,000 shares as of March 31, 2016, held in treasury, at cost | (53.4 | ) | (30.5 | ) | ||||||||
Total shareholders’ equity | 389.1 | 408.2 | ||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 513.9 | $ | 525.5 | ||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160714005478/en/
Source:
WNS (Holdings) Limited
Investors:
David
Mackey
Corporate SVP – Finance & Head of Investor Relations
+1
(201) 942-6261
david.mackey@wns.com
or
Media:
Archana
Raghuram
Head – Corporate Communications
+91 (22) 4095 2397
archana.raghuram@wns.com
pr@wns.com