WNS Holdings (WNS) Tops Q1 EPS by 36c, Revenues Beat; Offers 2Q EPS Guidance Above Consensus, 2Q Revenue Mid-Point Guidance Above Consensus

WNS Holdings (NYSE: WNS) reported Q1 EPS of $0.50, $0.36 better than the analyst estimate of $0.14. Revenue for the quarter came in at $207.8 million versus the consensus estimate of $179.32 million.

GAAP Financials

• Revenue of $207.8 million, down 3.1% from $214.6 million in Q1 of last year and down 16.3% from $248.3 million last quarter
• Profit of $14.8 million, compared to $27.6 million in Q1 of last year and $29.5 million last quarter
• Diluted earnings per ADS of $0.29, compared to $0.53 in Q1 of last year and $0.57 last quarter

Non-GAAP Financial Measures*

• Revenue less repair payments of $201.4 million, down 4.8% from $211.6 million in Q1 of last year and down 14.6% from $235.8 million last quarter
• Adjusted Net Income (ANI) of $26.1 million, compared to $37.6 million in Q1 of last year and $42.4 million last quarter
• Adjusted diluted earnings per ADS of $0.50, compared to $0.72 in Q1 of last year and $0.82 last quarter

Other Metrics

• Added 7 new clients in the quarter, expanded 13 existing relationships
• Days sales outstanding (DSO) at 39 days
• Global headcount of 43,422 as of June 30, 2020

“As expected, the COVID-19 pandemic had a material adverse impact on our fiscal first quarter financial performance. Revenue headwinds in Q1 were driven by volume reductions across several key verticals, and by service delivery constraints resulting from global facility lockdowns,” said Keshav Murugesh, WNS’s Chief Executive Officer. “During Q1, WNS made tremendous progress in transitioning our delivery to a work-from-home model and providing business continuity to our clients. Today, WNS is delivering 95% of our clients’ requirements, primarily from our employees’ homes. In addition, we are beginning to see clients willing to discuss, and in some cases move forward with, new BPM opportunities despite the challenging and uncertain business environment. WNS remains focused on ensuring the health and safety of our more than 43,000 global employees and on securely servicing the needs of our clients. While we understand that our financial performance in fiscal 2021 will be impacted by the COVID-19 pandemic, our goal is to manage what is within our control, continue to invest and innovate, and remain focused on the long-term BPM opportunity. We believe that over the next few years, this pandemic may have potential to drive acceleration in the adoption of BPM services.”

GUIDANCE:

WNS Holdings sees Q2 2021 EPS of $0.46-$0.58, versus the consensus of $0.42. WNS Holdings sees Q2 2021 revenue of $198-208 million, versus the consensus of $199.38 million.

WNS is providing guidance for the fiscal 2021 second quarter ending September 30, 2020 as follows:

• Revenue less repair payments* is expected to be between $198 million and $208 million. The company currently has over 98% visibility to the midpoint of this range. Guidance assumes an average GBP to USD exchange rate of 1.25 for the quarter.
• ANI* is expected to range between $24 million and $30 million. Guidance assumes an average USD to INR exchange rate of 75.00 for the quarter.
• Based on a diluted share count of 51.7 million shares, the company expects adjusted diluted earnings* per ADS to be in the range of $0.46 to $0.58 for the quarter.

“Based on the volatility and lack of visibility stemming from the COVID-19 pandemic and the associated impacts on WNS’s and our clients’ businesses, the company has extended our suspension of annual guidance. WNS will continue to monitor the COVID-19 situation and plans to resume annual guidance when visibility improves. In the meantime, our business remains in a strong financial position, ending the first quarter with $288 million in net cash*, $84 million in unused lines of credit, and a business model with low capital requirements and substantial operating cost flexibility,” said Sanjay Puria, WNS’s Chief Financial Officer.

For earnings history and earnings-related data on WNS Holdings (WNS) click here.

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