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WNS (Holdings) Limited today announced results for the fiscal 2022 second quarter ended September 30, 2021.WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global Business Process Management (BPM) solutions, today announced results for the fiscal 2022 second quarter ended September 30, 2021.

Highlights – Fiscal 2022 Second Quarter:

GAAP Financials

* Revenue of $273.6 million, up 22.9% from $222.6 million in Q2 of last year and up 8.0% from $253.2 million last quarter

* Profit of $32.1 million, compared to $29.2 million in Q2 of last year and $26.8 million last quarter

* Diluted earnings per ADS of $0.64, compared to $0.56 in Q2 of last year and $0.52 last quarter

Non-GAAP Financial Measures^*

* Revenue less repair payments of $254.4 million, up 18.7% from $214.4 million in Q2 of last year and up 7.7% from $236.3 million last quarter

* Adjusted Net Income (ANI) of $43.1 million, compared to $37.9 million in Q2 of last year and $39.0 million last quarter

* Adjusted diluted earnings per ADS of $0.86, compared to $0.73 in Q2 of last year and $0.76 last quarter

Other Metrics

* Added 8 new clients in the quarter, expanded 32 existing relationships

* Days sales outstanding (DSO) at 31 days

* Global headcount of 49,511 as of September 30, 2021

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 second quarter was $273.6 million, representing a 22.9% increase versus Q2 of last year and an 8.0% increase from the previous quarter. Revenue less repair payments* in the second quarter was $254.4 million, an increase of 18.7% year-over-year and a 7.7% increase sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal second quarter was up 16.2% versus Q2 of last year and 8.5% sequentially. Year-over-year, fiscal Q2 revenue improved as a result of new client additions, the expansion of existing relationships, increased travel volumes, and currency movements net of hedging. Sequentially, revenue improvement was driven by broad-based revenue growth across verticals and service offerings and increased travel volumes, which were partially offset by currency movements net of hedging.
 
Profit in the fiscal second quarter was $32.1 million, as compared to $29.2 million in Q2 of last year and $26.8 million in the previous quarter. Year-over-year, profit increased as a result of revenue growth, favorable currency movements net of hedging, and a lower effective tax rate. These benefits more than offset the impact of wage increases, the reinstatement of our corporate leave policy, increased facility-related and business continuity costs, and higher share-based compensation expense. Sequentially, Q2 profit increased as a result of revenue growth, reduced share-based compensation expense, and favorable currency movements net of hedging.  These benefits were partially offset by wage increases and non-recurring Q1 profit items including interest income associated with a tax refund and a tax benefit on liquid mutual funds.
 
Adjusted net income (ANI)* in Q2 was $43.1 million, as compared to $37.9 million in Q2 of last year and $39.0 million in 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 amortization of intangible expenses, share-based compensation costs and associated tax impacts, which are excluded from ANI*.
 
From a balance sheet perspective, WNS ended Q2 with $332.2 million in cash and investments and $8.4 million of debt. In the second quarter, the company generated $47.3 million in cash from operations and incurred $7.1 million in capital expenditures. The company also made scheduled debt payments of $8.4 million. Second quarter days sales outstanding were 31 days, as compared to 34 days reported in Q2 of last year and 32 days in the previous quarter.
 
“Our fiscal second quarter financial results continue to highlight our differentiated positioning in the BPM marketplace and solid execution.  The company delivered year-over-year revenue growth of 16.2% on a constant currency basis, posted adjusted operating margin of 21.8%, and expanded adjusted diluted earnings per share by 17.8%,” said Keshav Murugesh, WNS’s Chief Executive Officer. “We believe the BPM opportunity is both accelerating and expanding, as clients increasingly look for strategic digital transformation partners to help improve their competitive positioning.” 
 
COVID-19
The COVID-19 pandemic is having a significant impact on the global economy, our clients’ businesses, and on WNS’s operations, financials, and visibility. Revenue has been pressured by lower client volumes, delays in new business ramps, client concessions, and facility lockdowns which impact service delivery. WNS is actively working to manage our clients’ changing requirements, adapt our service delivery models, ensure data security, and manage costs. In the fiscal second quarter, the company delivered more than 99% of our clients’ requirements. Going forward, impacts to our financial performance will be a function of how long the COVID-19 pandemic lasts on a global basis, and how long it takes our clients’ businesses to stabilize and recover.
 
Fiscal 2022 Guidance
WNS is updating guidance for the fiscal year ending March 31, 2022 as follows:
 

* Revenue less repair payments* is expected to be between $984 million and $1,016 million, up from $868.7 million in fiscal 2021. Guidance assumes an average GBP to USD exchange rate of 1.36 for the remainder of fiscal 2022.

* ANI* is expected to range between $163 million and $171 million versus $141.7 million in fiscal 2021. Guidance assumes an average USD to INR exchange rate of 75.0 for the remainder of fiscal 2022.

* Based on a diluted share count of 51.2 million shares, the company expects fiscal 2022 adjusted diluted earnings* per ADS to be in the range of $3.18 to $3.34 versus $2.72 in fiscal 2021.
 

​“The company has updated our forecast for fiscal 2022 based on current visibility levels and exchange rates,” said Sanjay Puria, WNS’s Chief Financial Officer. “Our guidance for the full year reflects growth in revenue less repair payments* of 13% to 17%, or 11% to 15% on a constant currency* basis. We currently have 98% visibility to the midpoint of the range, consistent with October guidance in previous years. For the year, we expect capital expenditures of up to $35 million.”

Conference Call
WNS will host a conference call on October 28, 2021 at 8:00 am (Eastern) to discuss the company's quarterly results. To access the call in “listen-only” mode, please join live via the company’s investor relations website at ir.wns.com. For call participants, please use the following details: US dial-in +1-888-656-9018; international dial-in +1-503-343-6030; participant passcode 1565479. A replay will be available for one week following the call at +1-855-859-2056; international dial-in +1-404-537-3406; passcode 1565479, as well as on the WNS website, www.wns.com, beginning two hours after the end of the call.

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