Revenue of $123.1 million, up 8.8% from $113.1 million in Q2 of last year and up 0.8% from $122.1 million last quarter
Profit of $9.3 million, compared to $4.3 million in Q2 of last year and $6.7 million last quarter
Diluted earnings per ADS of $0.18, compared to $0.08 in Q2 of last year and $0.13 last quarter
Non-GAAP Financial Measures*
Revenue less repair payments of $115.4 million, up 7.6% from $107.3 million in Q2 of last year and up 1.4% from $113.8 million last quarter
Adjusted Net Income (ANI) of $17.2 million, compared to $12.2 million in Q2 of last year and $14.4 million last quarter
Adjusted diluted earnings per ADS of $0.33, compared to $0.24 in Q2 of last year and $0.28 last quarter
Added 6 new clients in the quarter, expanded 9 existing relationships
Days sales outstanding (DSO) at 30 days
Global headcount of 26,630 as of September 30, 2013
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 less repair payments* in the fiscal second quarter was $115.4 million, representing a 7.6% increase versus the second quarter of last year and a 1.4% increase from the previous quarter. Year-over-year, revenue improvement was broad-based with the growth rate paced by strength in the Banking & Financial Services, Utilities, and Shipping & Logistics verticals. On a year-over-year basis, revenue was pressured by currency headwinds resulting from depreciation in the British pound, South African rand and Australian dollar against the US dollar. Excluding exchange rate impacts, constant currency revenue less repair payments* in the second quarter grew 9.8% year-over-year and 3.2% sequentially.
Adjusted operating margin* for the quarter was 16.2%, as compared to 13.7% in Q2 of last year, and 13.9% reported in the first quarter. On a year-over-year basis, operating margin improved as a result of depreciation in the Indian rupee against the US dollar, and operating leverage associated with higher revenue. Partially offsetting this favorability were investments in global infrastructure which reduced seat utilization, revenue headwinds from a stronger US dollar, and the impact of our annual wage increases. The sequential improvement in adjusted operating margin* from Q1 to Q2 was largely driven by operating leverage and enhanced productivity.
Adjusted net income (ANI)* in the fiscal second quarter was $17.2 million, up $5.0 million as compared to Q2 of last year, and up$2.7 million from the previous quarter. The second quarter ANI* margin was 14.9%, as compared to 11.4% in Q2 of last year, and 12.7% reported last quarter.
From a balance sheet perspective, WNS ended the fiscal second quarter with $108.4 million in cash and investments and $91.1 million of gross debt. In the second quarter, the company generated $25.3 million in cash from operations, and had $5.0 millionin capital expenditures. Days sales outstanding were 30 days, representing a decrease from 38 days reported in Q2 of last year and 31 days reported in the previous quarter.
“WNS was able to post solid constant currency revenue growth in the second quarter, and significantly expand our adjusted operating and net income margins. During the quarter, we continued to make progress in growing the overall size of our new business pipeline, and moving deals along towards final decisions. The company added 6 new logos this quarter, including our third large deal of the year with a new client in the Retail/CPG vertical,” said Keshav Murugesh, WNS’s Chief Executive Officer.
“We believe the macro environment for BPM services is healthy, and WNS remains committed to capitalizing on our differentiated position in the market to meet or exceed the industry’s secular growth trends. While the timing for some project decisions and deal ramps remains uncertain, we continue to be excited about our business opportunities and the client response to our offerings and approach.”
Fiscal 2014 Guidance
WNS has updated guidance for the fiscal year ending March 31, 2014 as follows:
Revenue less repair payments* is expected to be between $464 million and $476 million, up from $436.1 million in fiscal 2013. This assumes an average GBP to USD exchange rate of 1.60 for the remainder of fiscal 2014.
ANI* is expected to range between $68 million and $72 million, up from $53.1 million in fiscal 2013. This assumes an average USD to INR exchange rate of 62.0 for the remainder of fiscal 2014.
“Consistent with the company’s guidance philosophy, our updated forecast for fiscal 2014 is based on current visibility levels and exchange rates. Our revised guidance for the year reflects top line growth of 6% to 9%, with 99% visibility to the midpoint of the range. This guidance represents 7% to 10% revenue growth on a constant currency* basis. Our ANI* guidance reflects 28% to 36% year-over-year improvement. We will continue to invest in creating new service offerings, enhanced domain capabilities and technology-enabled solutions to meet the needs of our clients. At the same time, we are focused on leveraging our existing investments in sales, infrastructure and our capability creation group to fund these investments and drive sustainable margin improvement,”
WNS (Holdings) Limited (NYSE: WNS), is a leading global business process management company. WNS offers business value to 200+ global clients by combining operational excellence with deep domain expertise in key industry verticals including Travel, Insurance, Banking and Financial Services, Manufacturing, Retail and Consumer Packaged Goods, Shipping and Logistics, Healthcare and Utilities. For more information, visit www.wns.com (http://cts.businesswire.com/
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,”
These and other factors are more fully discussed in our most recent annual report on Form 20-F and subsequent reports on Form 6-K filed with or furnished to the US Securities and Exchange Commission (SEC) which are available at www.sec.gov (http://cts.businesswire.com/