WNS - Earnings call 3 2024 | WNS (Holdings) Limited

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Operator

Good morning, and welcome to the WNS Holdings Fiscal 2024 Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes.

Now I would like to turn the call over to David Mackey, WNS' Executive Vice President of Finance and Head of Investor Relations. Please go ahead.

David Mackey

to XXXX welcome Call. Quarter and you, our Third fiscal Earnings Thank me I CFO, and call, on Sanjay WNS' With the Murugesh; have today CEO, Keshav Puria. WNS' results press issued A our financial detailing earlier release today. was website fiscal available also on Investor of will is release ended at for December on remarks the This www.wns.com. Today's results quarter Relations the section our third the XXXX. focus XX,

materially to such in on Please be website. uncertainties to, known keep and uncertainties cause from document company's or matters those the not today's factors on the company of statements and those discussed are unknown expressed This implied that forward-looking available and the will subject statements. mind risks Such that limited also in actual are are but by Form differ risks forth set Some XX-F. that results these include, is forward-looking. call could to

today's During useful non-GAAP measures press in the measures provide which earlier will today. believe financial be non-GAAP found to we investors. these certain call, release management issued of can results GAAP for financial information reference Reconciliations

management goodwill will amortization terms Some share-based acquisition-related repair discuss acquisition-related margin or the These expenses benefits, expenses throughout impairment. ANI, defined is and operating of compensation, share-based payments. associated measures defined used income, margin, revenue Net will taxes. and defined Adjusted benefits or the amortization assets, goodwill financial net non-GAAP assets, as profit, follows. Adjusted are defined intangible less excluding be all operating as call. impairment is of revenue is intangible of excluding as as or compensation,

Keshav Murugesh. call the turn to Keshav? to CEO, like WNS' now would I over

Keshav Murugesh

increase WNS' our revenue In were company everyone. third currency. basis expectations. financial year-over-year million, results of with net in Thank you, largely X.X% on David, reported and morning, constant and $XXX.X a a quarter the X.X% posted representing The line of third good quarter,

foreign adjusting currency a Sequentially, basis reported exchange. and net on after X.X% by decreased basis X.X% for revenue constant on a

As of client reduction for was largely revenues. in travel sequential result Internet-based discussed procurement on-site project-based last from offshore, softness the transition lower delivery our large and the to quarter, the a volumes

demand during Travel booked particularly major during quarter no were online for surprises reduced quarter. volumes the domestic Overall, revenue perspective, and the third changes from a there or travel.

of believe, While high-end we saw is travel of some normal This, a our portfolio. is issues. client-specific volume we spending both also to this customer function seasonality, attributable in experience business-to-business and reductions corporate

in WNS' analytics below for demand addition, project-based remains a procurement decline saw slight the In levels hyperautomation, a projects, expected sequential and macro including healthy environment. and in QX work,

work While requirements our healthy, continues process by certain have be client core initiatives for process volumes and project well as driven cost for reduction. as reduced, automation to demand management

pipeline business strategic new is are forward robust moving with and Our initiatives. clients

and process to also new commitment proceed large from quarter. expanded added This to begin plan. the logos third to new a X now that this portion During have we X excited our existing with later insurance of relationship Phase WNS I'm is relationships. the announce quarter, XX ramping received expected a captive

with clients. as well a leveraging our Gen as verticals well these expand AI use you our continues of initiatives steady to we across Gen AI brief as moving are pipeline we cases to AI forward progress The technologies. I offerings, to as making Today, service initiatives clients these update implement our and provide design, would like our for build, on solutions continue as with

shipping insurance, customer as experience. and secured implementations for as we procurement client financial CPG, services; verticals, span banking well and such travel, logistics AI and as and represent retail, commitments which Today, have Gen horizontals including operations

been new expansions of and a AI existing the examples, business, In including some solution relationships. these additions Gen has customer for catalyst of

solutions book deliver. were of Gen helping others, is that the existing previous unable AI and to improvements transform For business drive

which WNS, approach performance, accuracy to and to deliver to business combining industry with enhanced value AI our deep differentiated our and applications. levels Gen Gen of AI focus At is continues on expertise superior generic

leveraging client our currently agents a lengthy of and new powerful meet engine, documents the we an support customers' which implementation access numbers enables results AI information WNS example, decision For Gen and the complex, then to proprietary relevant large have existing quickly to summarize from synthesize requirements.

accuracy human The key solution, impacting which business combines intelligence, is metrics, as times, artificial first positively including resolution well handling rates. call most the improved intelligence power and of higher reduced as

For user our increasing end revenue this satisfaction and clients, is retention. improving

additional WNS, For process in the and resulting opportunities. margin-accretive management solution revenue-neutral, is

that highlight as excited is both engine to scalable decision vertically We across are this WNS. Gen horizontally AI also as well

or application and within to are AI platform, routing of systems, are is with cognitive Malkom automate data extraction announce platform incoming human needed. our cutting-edge WNS's deep processed. demonstrates now Malkom, either capability industry which technologies. workflows upgrading knowledge for updated these organization pleased the AI AI, logistics as designed version, for expertise our called them we to and data fully process also as sources, automation of validation well intelligent flag enables and shipping Gen enhanced and and workflows now to turn now portals capabilities. Malkom EDI, clients' and that We to Gen in as revolutionize IT messaging, e-mails, in The other The way web are chats, the leverage AI is industry the specific including completion

a Overall, our catalyst AI as we continue business. see for to long-term Gen

clients from as ability this, as with discussions is both well our prospects. technologies, powerful value these well focus new both innovation, as positioning Our tools domain, investments in existing increased and quantity WNS new competitive process client the improve and combine people with and as to creation. other These generating well increasingly of quality the as as towards to shifting are enabling tools interest

share have willingness our we operational financial strong AI the In Gen these from of to seen and benefits addition, clients in solutions.

improved FTE-based models the stickier, to managed as outcome-based from the this services WNS, commercials well new includes streams, capture for revenue and So ability to higher-value margins. as shift models

you issued announced company WNS leadership decision-making change to headquarter of with reflect in ability our well that also like compete in the as also supports to help XX we share operational X by organizational senior in as for have highlighted our additions designed These well of revenue today, years, the our progress London company's press In structure well and headquartered company's as mix transitioned global financial past footprint. to Mumbai. as earlier a formally as some capital. York, improve geographic our including XXXX. as delivery This locations New activities decentralization diversification would evolution as over change announced I April the the to release

this this Directors our exercise approval plans to intends granted company ADSs end the of of to WNS' quarter XXXX. shares. move forward prior In week, first ordinary for Board to company with to addition, The earlier to fiscal the convert complete

The from WNS under shift foreign status to Board to IFRS of to under GAAP. end has the implemented also quarter fiscal prior U.S. expected reporting issuer voluntarily second XXXX. of approval, to be status domestic is reporting This granted the company private and intends, filer change

as to The to reduced governance. company indexes include investment long-term the additional improved U.S. believes WNS Key the these actions funds, through all are access of and active volatility well in enhanced ability the participate stakeholders. best share price as capital in objectives interest

nonrecurring macro to 'XX. year to than revenue challenging stable with more XXXX, the double-digit and XX% continues despite expect fiscal in full certain enters margins quarter environment and growth WNS summary, for visibility In industry-leading headwinds fourth now fiscal

We pipeline for automation based in well cost-reduction XXXX. and core growth fiscal set also the as our up optimistic that reducing remain growing accelerated as for headwinds services company

long-term analytics technology, domain in to and deliver competitive invest to stakeholders. enabling one continues our intact, key WNS every ensure to value of differentiation sustainable for remains the company our

I outlook. like Sanjay? results discuss CFO, our over well as to Puria, would turn to to now further as call the our Sanjay

Sanjay Puria

last Keshav. on constant fiscal currency came revenue currency Sequentially, constant year from a and the million, on third net same revenue million reported a basis. on in by you, $XXX.X quarter the Thank In and $XXX.X X.X% up X.X% decreased basis. X.X% at posted basis in a up net WNS X.X% quarter, of

reductions partially demand of in cost-reduction initiatives. certain recorded Internet million reduction by discretionary quarter, company by short-term of offshore OTA project-based with client revenue revenue sequential were In offset revenues. in and third primarily WNS for transition clients, margin. travel; driven at headwinds focused $X.X The average delivery large account; weakness the was a strong These volume the

operating same quarter by Adjusted the quarter. Year-over-year, quarter pressured margin fiscal and by of and in productivity movements. improved in X partially as compared and offset was reported XX.X% to annual increases XXXX headwind favorable return-to-office last margins was operating XX.X% were costs. This currency rate XX.X% adjusted

income higher of as million bank margins debt provision expense was result The incentives Sequentially, compared company's of in net quarter. the $X.X expenses for $X.X in expense XXXX net fiscal million net lower X revenue. and by SG&A reported a of as $X.X wage other and expense performance X decreased increases, of quarter reversals quarter third and to expense quarter million last net of driven

slightly interest higher and net result a due balances interest expense the our and repurchases. Year-over-year, lower last sale WNS' at increased acquisitions quarter. cash expense. ] quarter share was levels rate by [ debt favorable interest of XX% to driven tax year de-ramp to compared X.X% refunds, last on Sequentially, income and and of lower for tax X XX.X% assets in effective as came

tax sequentially, liability rate we third year-over-year resulting incentive benefit our on mix from reversal other of In in work the million onetime of the tax quarter, from the fiscal in the was of Both tax result mix our shifts $X.X to deferred changes changes a and and effective geographical facilities. tax realized a profit delivered of entitlements.

X was quarter. in diluted versus quarter in fiscal of up the from quarter $XX.X $X.XX X% $X.XX The income share in company's quarter. the million same $X.XX per $XX.X last for were net XX% compared XXXX up earnings third million with last X, and of adjusted quarter last quarter and year $XX.X Adjusted million

and As operating generated and $XX.X million, stock company the in million company $XXX.X at $XX.X an million. In average X WNS' of X in third WNS by had capital quarter, December million debt impacted million of XXXX, activities, made from debt. of expenditures incurred of cash repurchased investments the of shares repayments in million. XX, The $XX.X which balances cash quarter $XX.X totaled million cash $XX.XX price also and $XXX.X

reported the will came days year repurchase DSO of in program Our in revised to upcoming fiscal full with and XX year as quarter. quarter days last fourth third last guidance our XX assumes compared X XX quarter. WNS continue in in at the share days quarter

the quarter was With as X XX% the attrition rate XX% metrics, reported total and last to the operating third compared was quarter other year the quarter quarter. of our in and previous of headcount respect key in at XX,XXX end XX% in to

WNS to environment. Filled averaged current XX% the rate the office at mid-XX% and quarter low attrition quarter. in end increased expect to quarter-to-quarter will the from seat average range, in the of work volatile but to We capacity during the X remain XX,XXX the

average earlier range revenue we year press be revised growth billion, both midpoint WNS our fiscal an to exchange U.S. our the basis. on release remainder expect Top reported XX% for In British currency today, XXXX. have visibility of to issued the year-over-year and in of XX% assumes company's and the pound net provided the Based range. full line levels, X.XX currently the guidance billion to on we representing of $X.XXX to X% to fiscal of projection $X.XXX of the constant current rate over for year, visibility dollar

implies remainder This share XXXX income With the respect on INR to our the assuming be approximately $XX adjusted to dollar to currently million of U.S. net shares. XX.X million XX.X is to $X.XX in of expected expenditures, based year be expects EPS rate XXXX. $XXX to for of $XXX of exchange adjusted to fiscal requirement for Full million. fiscal WNS million capital to up diluted fiscal a count XXXX for $X.XX range

open the We'll now questions. Operator? call for

Operator

comes Thind Instructions] first [Operator Jefferies. question from The with Surinder

Surinder Thind

X specifically start to how volumes aspect months to expectations business. what conversations wanting evolved current look just maybe are X talk kind we volume you then seeing slow client months Can client more ago demand maybe like to of a environment at a clients with little of relative the I'd forward the have this down? on the started point? And and about signals as of when question we maybe bit just first

David Mackey

Sure, Surinder.

we we've certain trend think seen So in quarters couple space, from projections a to especially conservative. when be the to volumes. clients; our we've our you proven what much look was guidance clients; their travel than kind what historically, seen they've What if commitments And seen closer and of we've I to what in of that and commitments across clients numbers over is last those have last included from for and the projections couple reducing expectations customers, seen clients, in the that in come these extremely quarters, of past. our had the from we've from

and not been that result, as during and a to to volume period. relative to we recognize upside So have able forecast guidance our relative

the So to essentially, volume us they be at the and good. day, had projections accurate end of provided would that the prove

I we the forecasts we seeing quarter, as upside to look forward the drop think projections. and clients fourth is the and those good news are those continuing into not

at these as stabilized volumes some we at we at least that there. have And XXXX, we the have So our if hope into then point this move out see levels. across fiscal upside macro benefits is

Keshav Murugesh

just was the a great current that business. volumes of I'd add that on And while the explanation

terms have both continue is as that spoke interest longer-term of to for that lot implementation in the some cost earlier. Gen fact clients I positive of kind as of well terms discussions new of about mention to in of as prospects savings other continue transformation, of also plans here existing The a we see very strategic AI to as well tools

So mixed bag, likely what it's I we now, to was like think but be quarter. right as looks last it of a it said exactly

Surinder Thind

How platforms, follow-up, as And of is to strategy, a we can you about AI bespoke want guess, is maybe you you to the we products? the kind about guess, that for of to, technologies That's build, the race some solutions that build the think tools, when I you client And here differentiated all win how do that the how AI the to think helpful. And question then truly build? is those dynamic? how here? your then, do accelerate that spend And arms of much I have overall, reusable?

Keshav Murugesh

Yes.

stab take I think I'll a answer at that first.

think we movement see sure very this partner foremost, clients So traction. leading make job to this now responsible charge. will right in our only a keep is are a that our first us I And clear that and them as is gaining that

completely that. because So on current get are to many like stresses ready around of band volumes, them may seeing they're not profitability, that the yet of this focused be more things some

as point and have tools, our they that technologies; and them is strongly all of seeing their are the very and the from that is being to training that place, we've giving people, some used that of the positively. are from AI in invested So got Gen required our right very we solutions enabled being something are through view, in partnerships the WNS tools, AI comfort we seen

our they which of all strong for the look some the the if our are even view are from so very to seeing they is understood to very second of And short-term we that build in implementation that them. order is more from revenue it relationships tools faster intent need of The thing point are clients. that positively WNS intent at means to have core to partner-like of these do long-term with us, sustainable a WNS understand actually business, that areas cannibalization

that it Gen stage, completely In tools, partnerships and new AI. all is enabling through creating also use quite these available for something which cases, is of the existing a look about at these most the have you we tool a But often, current bespoke tools if create is particular tools. ability base out reuse then to many So client. we the and building few

relationships just first cost on opportunity built plain share clients ability to terms use cost I trust is And opportunity. some is that case of them as to ability opposed how about our clients a earlier, or while when the So at about multiple therefore, talking these that in have with start to in branded discussions onetime spoke high-quality are our incurring or tools we the of high. our to across also the

David Mackey

just Surinder. the that as what transformation. And they're add of is one to I And think only digital Keshav At for clients the said, end of looking to Gen for. day, tool what is a are reality component looking AI the

components expertise. to can the of customized whatever the client. point, problem; The key certain and understand our solve technology, same leverage Keshav's understand at is specific creating client's to be, to that components solution also that to might client's bring the across differentiator the process, to But to the technology people, proprietary time, that we certainly, and business, leverage portfolio. So entire have that that believe we're we domain problem. And reusable to continue ability be leverage

XX So well I think strength approach years. the works actually into of our company and last the the where XX, this plays made over investments has

Operator

The TD next Cowen. with question comes Bergin from Bryan

Bryan Bergin

of aware as be implications financial items just the to shift. I one status Just top the have, tax up from relates these there share year? class Are anything file of to an First accounting different from versus as it dramatically voluntary or notable next you any hedges transition conversion, aware the And really change, maybe structure? just anything be to around moving? potentially

Sanjay Puria

No.

common financial a from there specifically same. the objectives. But and structure capital the taxes the volume moving is no implications, from financial So are remains impact. reduce no just the even or from stock the for are volatility of there, areas share from tax the to primarily, prime It those a -- structuring perspective, over

David Mackey

reality There exactly the of no from the referring will to ADSs to, to certain from types treat be to how you point, certain IFRS changes some change there types GAAP as metrics be the transition of shares. conversion and U.S. transactions is, based were we standards different to costs. X from on what But financial Sanjay's the of should ordinary

Bryan Bergin

operating as changes? discuss the you implications any margin? have to it growing medium-term difference view global these then of margin the just adjusted relates And in from on and diversification, you additions potential good. the Do can Very headquarter Okay. and kind the

David Mackey

There result to anything approach no embedded today of as the access. we've in that discussed already relative a to They're capital be should change our structure.

Operator

Wedbush comes Spencer Lebov question with next The Instructions] Securities. from [Operator

Moshe Katri

me? hear you Can

David Mackey

hear you can we now. Yes,

Moshe Katri

question, Katri update client, then have we Moshe from an It's I the another we've on about Wedbush. week? heard last the delays the pause captive or And A get specifically can that follow-up.

Sanjay Puria

Yes.

So as a there. that last a mentioned part the that delivery there X may the from as And will client. there forward X. next of portion be we And portion the balance in Phase move the later what the of X, or remarks, from forward, quarter the discussions the as as already which Phase we got good for news, the delay to was starting the commitment over But the we quarter, further months. XX a we of move on for part we be of

David Mackey

Yes.

to I reiterate they're business. continue to think going it All said Sanjay nice to in Obviously, there believe were we were not and piece from of saying. question consternation that out just that client with to steps. they when, the direction, delay. is what tentative going a last move still quarter, lot about the as taking company concern get a forward of process were the this it see was addition. that And to we this if steps of indications And the was had

Sanjay Puria

again, overall remind, there's the to just commitment of client. part And from that a the

it it's but mentioned, to about the happen Dave as all need So contract. tenure when, during the of

Keshav Murugesh

sorry, transformation well some are mention conversations of mostly that thing, as about To cost as mention to want savings. -- one I just these

on client initiatives, can on how based only of Now be these that well-prepared may they larger much. delay a some

journeys. Thereafter, to actually need, on it's the macros, these the smart with customers based just ahead based move for on business

WNS is deeper high in particular with delays, we've that the mention the So only these again saw this quite they transformation. are of few the this But confident X or come client just next areas we go into also Phase to more X I opportunity that X while not quarters, over many will of quarters. very over back want for last to terms

Moshe Katri

Okay.

So that's positive definitely development. a

ahead. is a So there go

revenue of be Phase X generation end the recognized it? gets of -- recognized Some of those that some And of way will in towards 'XX. the QX? looking Is that there's right at that then fiscal

Sanjay Puria

financial the be more be as But we the revenue 'XX revenue to right. recognized. year. of the during this when absolutely most going going start FY transition, you're minimal it's year of Yes, It's to

David Mackey

components also move fiscal hope what give throughout contributes the basically And that is point. Moshe. to of been above we also continue Phase this the at as additional sorry, X beyond awarded that 'XX I'm and us we've

Moshe Katri

Okay.

client? Can go to us rate what this. from back captive specific Sorry, the to you remind run just this potential is

David Mackey

'XX Yes. quarter, about our financials, out revenue. the X% of We talked almost pushing that delay in company last the costing revenue of fiscal

Moshe Katri

fiscal is some that's And to of been -- pushed 'XX? getting it out

David Mackey

going 'XX our because in it higher fiscal is, guidance, later we're because Well, of rate to last still starting good in fiscal award. of was anything fourth But until revenue recognizing in fourth the this pushed a The out should out. fiscal the pushed majority in run this we're quarter. not news all of it be have we quarter, is from

Sanjay Puria

mentioned, are this and we'll as was just same So But I'll XX% the balance, Dave is we is us able that awarded year. there's of maybe of we opportunity the for which been with next impacted to which Moshe, help working, now, you FY that, completely Out recognize And help that. a got which fiscal still, fiscal during have it which year. at X% what 'XX. awarded which time, will XX%, in an be the and

Moshe Katri

question. of Any going Just those of indications -- impacted your has cetera? terms Since someone Gen right? May cannibalization, in be to prophecy et clear. revenue AI, WNS that that of Okay. materialized that is kind Final exclusively by base, any any to last year, decided get of again, of Great.

Keshav Murugesh

earlier, wherever ready. if we think embracing AI, the of Not voluntarily, at benefit even will they like not all. view, from said I clients Actually by point our Gen are

expects. industry We building will a conversations, our are cannibalization plans out clients those having building connections the help of in, deep level that net at and going that us the grow with

David Mackey

terms what Gen to very to clear, date there this we've from what seen we've Moshe, revenue X negative our and guidance, into AI. embedded But been impact to of be in has

Operator

Blair. next question [Operator William The Maggie from with Instructions] Nolan comes

Margaret Nolan

the whether their given to of and starting budgets Congratulations quarters, in next for on project-based finalize that all about the clients couple any just are developments. wanted calendar you I kind changes work 'XX. over of have expectations to the ask

David Mackey

take I'll that, Sure. Maggie.

this did that in and did that good numbers, revenue, talked clients we doesn't about, a couldn't that time, of take you see and stabilized the to at it a in the mean fourth is it has happen. But that The projected some as in don't quarter quarter. sustainable us. expected be somewhat run from not this we we're in extent think point the decline that I And where the seeing we for look is when third belief further again our it's project the was leg committed the don't that see macro, level going to another project softness project-based down the macro news the that here. materialize rate we meaningful pickup for work at here in probably

Sanjay Puria

And maybe budgets time for have more further because next where getting fiscal will year. the color start is January client's we'll the the

And started on have that. some discussions already based

be better for we'll updates able the So to quarter. maybe color next have we a provide when

Margaret Nolan

But are a mean, great margins, record And product of with lot you then continue there project-based new do posting strong margin-accretive. mentioned so. I and have and that's volumes work, parts you a track you and to -- this you moving of

could takes I'm fiscal on us margins XXXX. the some puts maybe So think hoping you even into and help of through

Sanjay Puria

associated keeps you're there's the or And perspective. down those due we to able to business lot that accordingly, and So a from moving moving costs with a cost volume though those of manage associated right up perspective. variability. parts from But quarter-over-quarter, on variable are

as keep that as the on with been on seeing operating business, our some volatility delivering, we to So in that. and in accordingly, of we about investing expect keep into volume, consistent we we have continue we XX% margin, what the margin, believe

David Mackey

believe said, and stable, takes models. there and of transition value reiterate and towards Yes. as continue puts models margins to just in be margins continue are and the outcome, these continue ability we what those business wage improve subscription-based to customers Sanjay this will to deliver transaction, in our would to we totally for higher that I do that increases terms

to that company range operating the forward. of adjusted expectation XX% the be to moving for XX% So margin continues

Operator

[Operator next Instructions] with comes Deutsche The Nate Bank. from question Svensson

Christopher Svensson

revenue that touch for it's up 'XX. in prepared came the reacceleration fiscal remarks, and about to I wanted base something on the in potential in growth

questions work. volumes few slightly earlier to environment. about whether confidence next your your point, ramping this a to other year, I reacceleration captive insurance or But short-term the hear kind think I it's expectations have for down So work of gotten project-based given visibility year of kind of potential is and in or stable this wanted next particularly sort that just at into

Keshav Murugesh

Yes.

take I'll So that.

transformation I we the pressure continue that agenda that to into go for think year thing first also economists continue growth just core right? for go the think be smart this want potential are this and the from businesses. whole next quarters, decisions taking in hearing while they about macros, business, positive the much in the about how to One. more they're are as few at So pressure will business our the point in to We time we caused will order causing have push probably is their weak be cost and to be and customers start savings beyond to running now

higher well company. quality made also think, will terms of in structure our market, the customers. org we that understood existing been well and We evoke start over actually the and that for now time, even has is has better been digested as that now starting a of is period to conversations our thing second well, lot higher evoking change a as with our benefits prospects by actually of much The

larger-sized after we around changes conversations of see higher-quality these with around say these to we actually of deals, deals very thing we the is generating as third on that But that deliver term. that, connects I time the will teams pipeline, deals are focus, crack may and decisions. actually pipeline having seeing now of will things, the some the a the take farming believe level made we of entering discussions longer we The actually our focus, well are sales other number quality as to go specific are growth strong which, actually again, creating for

org continue I continue view, white with clients far to see to of industry to the in huge need our in change continue ago. being the are very spaces see we business I potential X our BPM I saw to point interacting positive. us after superior my structure, that penetration. long-term being go a way from the that even years therefore, And And tailwinds. with underpenetrated and for see and us the prospects

David Mackey

The unusual the macro, to X%, our relative do challenge nothing And remember that Keshav's has business. that the to year that has for X% to do X%, business that stays I accelerate there growth these headwinds we've thing with has should is got nothing healthy that core with the extent to fiscal us our 'XX. volume, services, long to growth the have comments, do to that types unusual things, To would ability to demand are right? other in add the as we headwind we Nate, biggest for are our nothing of this with in really have projects, extent to as that be

Christopher Svensson

reversal been? Great. what the The really guess follow-up, can answer. particularly was you impact inorganic detailed expectations your in what quarter, the had appreciate I That's color. my I tied super versus for had helpful ask share sort the the you work I quarter. is contingent last discretionary had been highly and term of sort reason know the of project I of sort to Vuram short of considerations

OptiBuy update just on was have Cube we and been performing. how if I could get So Smart wondering an

David Mackey

below terms relative expectations perform we to in average of overall, these they to contribution. when assets, do I continue they're obviously, performing company above purchased Yes. but mean, their

a over year-over-year the standpoint the saying X% assets. looking you're from revenue from mislead and contribution a to these basis, to growth, at want aren't of healthy well-performing terms -- But year-over-year. don't little in of that So on

Operator

[Operator from with Peterson Instructions] next question Kyle Needham. The comes

Kyle Peterson

here but I Great. Peterson couple of on are This for puts what streamline Mayank. guys the just you is off to start some wanted reduce some of and takes you macro there's guess Kyle seeing. costs. quarters, help operations, the of do I over been obviously challenges on last guys

versus cost guys savings some So what's I just could the discretionary some efficiency the are those wanted conversations walk on questions And between going. kind to of see and spend how of initiatives? of and impact you client through focus if

David Mackey

Sure, Kyle.

of I and remarks, seeing. think in I what his to terms overall, to portfolio revenue prepared the of there in mean, kind components right, we're Keshav it X are alluded

kind core requirements have. clients is automation, cost transformation those reduction, One that of

a second clients upfront fixed -- start paying and for and to essentially the the opposed are the is number to through benefits fixed need definition, where that already they benefit it's that is we the go The and pay third which as they end, by that for discretionary then of getting receive. pushed And are manage. own projects got transactions volume, as processes the

to volume about, we've certain certain a of obviously, some and it's from spend processes. We've perspective well as talked and both And pressure of specific it's certain discretionary in subverticals. to perspective as as specific from a verticals some verticals seen

upside total, represents piece That for that's XX% driving benefit, core loss/leakage That the whether almost of whether the for tangible which business, cost client said, whether where us that's prevention, business of being the demand for we're is for reason our driver right? revenue reduction, our our what the growth this that's business than is generation, been really that the to normal, more from And That's about is healthy. again, the extremely services. company this year. remains it's below headwinds this business our

Kyle Peterson

very just pipeline. helpful. on That's a M&A follow-up And Great. the then

a made targets, about conversations You last of are environment? the valuations guys But years. going where how guys and you this here few in stand in couple acquisitions how potential thinking are

Keshav Murugesh

Yes.

for that all capability before, to us, in. assets it's just we be So continue we we I'll that have interested about at to are Like creation. look mention we in chosen said continue -- areas

can So capability really would we that if really focus. the be M&A in, that our new there is core is, bring around some

And area believe, Valuations, constructive be control the productive is ability in high. and or our very X under therefore, are so. this much years to over past we

of make We look a very to small also from team number midsized some business these and is carefully at make do that doesn't in us. of constantly for us assets that insights a order our to make the assets starting sometimes scanning Having even then sure not giving will much larger-sized a that, the we sense do market decision. to anything said to

activities M&A I future can are and any of like that can't on. that, you timing being very the comment only So stuff constructive. we But tell

Sanjay Puria

Adding acquisitions, in specific and target we just point stage. a various are I'll a capability what valuation multiple this discussion upon add over And of focus at of Yes. from those There are stages perspective. there.

to with it actually has in discussions over we fact, of proper, seeing come and the are various the are what level. now high various valuations In which that's reasonable discussions. earlier, And our interested are were of targets which in

David Mackey

that to And right That are right at have in assets We're are company that the those not to the available fit do to right and going We're acquisitions. the the we're cultural find being opportunities then the the same. from going if approach aren't said, capability, be market, the Kyle, going price. remains opportunistic.

Operator

[Operator Instructions] from The JPMorgan. with next Mafi question comes Mina

Mina Nezam-Mafi

X This I is Gen AI. Puneet questions Mina have on for Jain. quick on

kind Are that first implementation? getting is share projects more clients of discovery The as outsourcers or clients market in Gen existing. AI well takeaways? expanding these are new your drawing the as in stage competitive these first-time mentioned or into And still you is of that new

Keshav Murugesh

Yes.

that, these higher. about into where the much we're of fact are are having with ability And lead solutions of that's with existing outsourcers that's think change particular our to a I that to ability and obviously the is, conversations the new conversations a with management upfront on things having we things lot this their there these be climb AI with because way, seeing conversations, lots a with the has is implementing into implemented, while also and to of solutions of significant one bandwagon get be take high. quite them used are But doing are has great the a very existing a because with a experimenting Gen Gen existing to whom these first-time with are to lot the model portfolio, process -- to they these little is a high. take longer AI even is because excited ability an some they our we process. But of we that we of have in clients, to question

that tell And platform-based core I AI-led the discussion is the that of you of many of some is first-time solutions about can and of strong around. at with pipeline the I spoke And sales Gen this very point happening some of these in solutions in them, where is the outsourcers. it time

Mina Nezam-Mafi

you in are margin higher guess, question Great. guys Gen is as How towards profile AI to AI you shift you margin enough just higher it? stated have more significant also guys shifting and it -- expect the was your raise a outsourcing, that are My these other I Gen profile that are coming margins. structurally and mentioned have projects higher you have projects? at structurally, And much also

David Mackey

point we've parts time, right? this AI, this at small and extremely, to it's about extremely talked At quantum in projects clients that's look work small, processes leveraged existing Mina, very of that these handful at that we've of a tools shifted implemented you Gen the when in been of point time. on We've for

to is be this everything else. So evolution going like an

I subscription-based present tools to we an are move transformation transaction or as to outcome our or non-FTE think and a able digital model, at for disposal models either from company margin levers FTE that a we is higher. that we're significantly when have need opportunity that like know a Gen the the the to models. shift to AI the clients presents ability And

want relationship accountability at our levers in be that multiple But margins what do we the lock to model we and time, take we those portfolio is the results. customer, want we stickier. what to for able improvement. us the component. ownership ownership therefore move to FTE higher current are component accountability And results see So margin meaningfully make non-FTE We want of we to on where for our to want that take is the the business drive to in than a and to same and give

the higher-value deliver from. potential the move. expansion it to one just comes believe is those for margin as for models component opportunity And the higher-value that the where and to to Gen It do really AI to But the space in of that. is services services. that's catalyst evolution help we So has serve

Operator

question next Instructions] Citi. with [Operator The Shirvaikar comes Ashwin from

Ashwin Shirvaikar

on you good and with Congratulations the that resolution guys client. rapid have the quarter the

transition, now the like number an ability the who Let if the buying. apologies didn't feel at have that me you you significant terms the just used But But and been before? access be sized just to you the but able to to have that about general have done WNS things misinterpreted of investors be That of ask of once can kind to impact on might I've shares look capital. to now of like investor what I analysis? of this, you index ADS incremental can process, complete in meant by be that very flows, levels

David Mackey

Sure.

of that reality to the is are and fast access structure, continue Obviously, capabilities we the institutional approach index what demonstrate the the be metrics, take And assessments we me we've know -- there The the right, are opportunity to funds. to that, both to the opportunities you're across us. those Let no right several meaningful. done and potential need Ashwin. rules, is hard right entire right for able

things are So to given, time, at definitively be say this these to we we do in certain know that I that. point able don't can think

say our shares to company access portfolio you that look our And over today, major positions doing at what to here have much we a here obviously, of what this funds, is certainly has think the X% company funds. several much, with deficiency those past sitting can the certainty with I index we're in been better for shareholder years. held if the

Keshav Murugesh

I this Ashwin, think higher-level question, I answer stab a take So would at this to like to question.

I -- how macros look playing you If this out is the where at demand are in notwithstanding mean, time. and point

tailwinds high, is. ability in lead this and than for WNS sector the particular. grow our business we year just taken that's If very the maybe X, will to you to see a and faster where continue the There industry, that focus for us itself and really grow the is for that view or for have be back continue to step a you very, and

one will that conversations gain other having to WNS companies the we've its lead companies the the very ability few been space. for penetration the Gen some the quarters, high. last We therefore, is over the of changes smart us, believe smart market of including the low. And with and BPO taking in some place AI, world AI levels continue for is around that of to be

we settled more nimble, all made this, that in innovative see have and We will order That And changes. rightsized prepare now flexible, has an in and our order organization some change of structure made customers. -- organization to significant in you while all be we're for of doing this, of well. even to attentive change we

absorbed across have a company, with comfortable number that We very added got of the have in, leaders leaders new a this. come number of

this to well aligned are Our around have the some The things or customer that we technology about I've X X AI, done is as as prospect resonate new very org Gen well. starting quarters implementations the base, around spoken base and that structure. last AI of

said, impact believe this Although like revenue is time, all this at will for right? us in it minimal. on of cashing the point keep Dave we But out,

all in this conversations, As company a company. appropriately conversations proper base of be emerging has deals in for are growth a constructive now think this as larger-sized participate starting over think of investor to we why events therefore And capital, few next allow much of of the And the run with this, to that all larger-sized potential at when this, as the we of capital we've done. one done that the we are result emerge for do way reasons this. all the to our quarters, rate access this allocation program will as that's prospects well manage story

indices. actually of you opportunity, is when set of you peer their you look said, indices. of you I like the the and in And X% at significantly Now holding larger our owned sizing the that by terms a of others, equity Dave part tell look are can at know

that behind sure And as management, some doing success is scenes well So as long-term these the to is the part stakeholders growth we other that our required are as own make to of actually of whatever funds we WNS everyone growing. believe stock. deserve of

that's this is So really where conversations headed.

Sanjay Puria

the the ahead the whole this that timing, on. there you a a revenue diversification, was years. Why WNS-specific was to these been from it on from over evolution earlier? And right, it's time? we of perspective, just perspective, over really see that to add is so the the this if company market, some about adjustments. right time believe from where is what Why is just change whether how that move not North has especially right? And America, I'll the Ashwin, the maybe, this with it entire And whether what And support it for other we evolving question the where is the that is growth, because spoke the structure

Operator

[Operator Baird. last comes David question from Instructions] The Koning with

David Koning

Yes. Great job.

Keshav Murugesh

Thanks, Dave.

David Koning

Yes. quick And of just couple ones. a

transition? so the we understanding an real QX fast fast growing But transition. easier business, the a all, forward? QX kind health get going hits question that first is declining had comp. which dramatically here the can ex Really pretty obviously similar we've of the is kind of implies could So a with X of now how decline, And -- how still quarters I of grow of guess, and

David Mackey

Yes.

took year, care Obviously, me Dave. . significant Let know lost in health with of and we one take last clients. large our of QX fiscal process a we we step a down that,

project you vertical the If this for at in was the quarter, the example, past care on look work. it health analytics challenges, actually

and we've work of for and the us, or space. seen part the last some that quarter in to project work in relative in softness is analytics So specifically subvertical pharmaceutical what X here the the vertical

you're But right.

see should up, I to the on QX to those think headwinds see we reacceleration the point growth. anniversary. stability step a project that year-over-year And getting of extent we should where we're now the we've that and to start got side, sequentially

David Koning

growth? I just flat. last up sign. a behind what's sequentially. seems looking up quarters with going lot couple of were employees stocks good exactly That's base Okay. And you just there to employees the that a Often, grow. the like That building need employee for. The then that? Great. just pretty grew of X% when mean, second confidence Good. Maybe was keep start again start I to is what accelerating over thing,

David Mackey

Sure.

caught while the forward, we go question QX. what Obviously, to having went down. revenue XX% rehiring and up What Let headcount quarter visibility that one, that at me the where letting this them quarters is, we at went we look a X.X expected you our then given when reality sequential fully quarter, the we to you Dave. look to when do get fact in is want QX the healthy take And from didn't people see were in situation growth going over later.

for the margins willing we So you willing this going the were because kind employee And part to visibility it that of reason the a and maintaining was that we excess look absorb this absolutely do per at the little the reality to quarter, to margins range, the to soft weak. we of that When year, XX.X% that forward. do were carried revenue overall given a in of willing is full growth have quarter resource. in terms

Sanjay Puria

client insurance are And Phase we where perspective, also when we add, their transition in just spoke the quarter will X, start. from the to work a X large about

preparedness other for of also the some it's So are visibility the as some those growth, of well and as what we seeing.

what it's because right, it we timing. So just a accordingly, different we -- from yes, a quarter-to-quarter And different And the that skills from matter are absolutely have the that. changes, of perspective. also mentioned, balance business just have was mix

Operator

questions This have no conclude we the will time, participating. conference further queue. you this call. today's for in Thank At

disconnect. now may You

WNS (WNS) 18 Jan 242024 Q3 Earnings call transcript