WNS (Holdings) Limited

Good morning, and welcome to the WNS Holdings Fiscal 2022 First Quarter Earnings Conference Call. At this time, all participants are in a listening mode. After management's prepared remarks, we will conduct a question and answer session, and instructions for how to ask a question will follow at that time. As a reminder, this call is being recorded for replay purposes. Now, I would like to turn the call over to David Mackey, WNS's Executive Vice President of Finance and Head of Investor Relations. David? David?

Thank you, and welcome to our fiscal 2022 first quarter earnings call. With me today on the call, I have WNS's CEO, Keshav Muragesh, WNS's CFO, Sanjay Puria, and our COO, Gautam Burai. A press release detailing our financial results was issued earlier today. This release is also available on the investor relations section of our website at www.wns.com. Today's remarks will focus on the results for the fiscal first quarter ended June 30, 2021. Some of the matters that will be discussed on today's call are forward-looking. Please keep in mind these forward-looking statements are subject to known and unknown 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, those factors set forth in the company's Form 20F. This document is also available on the company website. During today's call, management will reference certain non-GAAP financial measures which we believe provide useful information for investors. Reconciliations of these non-GAAP financial measures to GAAP results can be found in the press release issued earlier today. Some of the non-GAAP financial measures management will discuss are defined as follows. Net revenue is defined as revenue less repair payments. Adjusted operating margin is defined as operating margin excluding amortization of intangible assets, share-based compensation, and goodwill impairment. Adjusted net income, or ANI, is defined as profit excluding amortization of intangible assets, share-based compensation, goodwill impairment, and all associated taxes. These terms will be used throughout the call. I would now like to turn the call over to WNS's CEO, Keshav Muragesh.

Keshav? Thank you, David, and good morning, everyone. Despite some renewed COVID-related challenges this past quarter, WNS continued to perform well and post solid financial results. Net revenue for fiscal Q1 came in at $236.3 million, representing a year-over-year increase of 17.3% on a reported basis and 11.4% constant currency. Sequentially, net revenue increased by $8 million or 3.5% on a reported basis and 3% constant currency. In the first quarter, the company added seven new logos and expanded 17 existing relationships. Hiring accelerated in support of both new wins and committed volume increases with existing clients, with the company adding almost 3,000 employees during this quarter. WNS also posted strong adjusted operating margins of 20.8% despite COVID-related margin pressure, and we repurchased 1.1 million shares. Sanjay will provide further details on our first quarter financial performance in his prepared remarks. Given the pandemic-related volatility in the past quarter, I wanted to provide you with a brief update on some of the associated impacts to our business. As expected, we are seeing that vaccination rates, infection levels and economic recoveries are not consistent across the globe. In early May, the country of India experienced a massive spike in COVID-19 cases. Case counts peaked at over 400,000 per day, leading to shortages in oxygen and hospital beds, government-imposed lockdowns, and increased fatalities. WLS responded to the sudden surge by dramatically reducing our in-office headcount, purchasing oxygen concentrators, increasing employee benefits, and hiring additional resources to manage productivity loss stemming from personal or family illness. These actions resulted in over-reducing $1 million of additional costs in the first quarter and a sequential decline in our global work-from-office percentage from 23% last year or last quarter to 15% with India headcount in office dropping below 5%. On a positive note, our proactive response enabled WNS to support our employees' health and safety while successfully managing a rapid transition back to work from home. Service and delivery levels in the quarter remained stable at 99% and there were no material adverse impacts to client operations or company revenue. This recent surge of cases in India Further stress tested our business continuity approach and validated the hybrid operating model as being structurally more resilient. By mid-June, case counts in India had dropped well below 100,000 per day. Hospital and infrastructure availability was largely restored and lockdown restrictions were being eased. I am also proud to announce that last month, WNS began procuring and delivering vaccinations for our employees and their families in India. So far, we have administered over 8,000 doses and we are working to expand vaccinations across our global delivery network. We are also planning to make these programs available to our clients, employees, and business affiliates of WNS. While India struggled in Q1 with the COVID surge, the U.S. economy benefited from declining case counts and the lifting of restrictions. This progress extended to the travel vertical, where we are seeing meaningful improvement in the U.S. domestic leisure market, and more specifically, the online travel sector. The magnitude and timing of the recovery, however, has caught a number of our travel clients by surprise. WLS is working closely with them to understand their changing requirements, and we are aggressively hiring and training additional resources to bring increased support levels as quickly as possible. Our revised guidance reflects increased volume commitments and associated fulfillment cycles for Q2 and beyond. There also remains further opportunity to improve revenue going forward as U.S. domestic travel continues to rebound and when the business and international travel segments begin to recover. I also wanted to spend a few minutes today speaking to you about the ongoing ESG activities at WNS. In May, we released our first-ever Corporate Sustainability Report, which highlights WNS's efforts in fiscal 2021 towards developing, measuring, and integrating sustainability goals into the company's long-term strategic plans. With the help of KPMG, we perform a comprehensive materiality assessment to better understand the ESG elements of our business that are most critical to WMS's success and those that are of primary importance to our stakeholders. In addition to expected focus areas such as ethics and compliance, talent management, diversity, data security, corporate social responsibility, and climate change, the survey also highlighted digitization and innovation as important success factors for WNS. Many of the key ESG focus areas identified in this sustainability report has in fact been vital to managing the impacts of the COVID pandemic, beginning with the company's commitment to protecting our people, clients and communities. From an employee perspective, WNS has expended significant resources to ensure the health, safety and economic stability of our global staff, efforts including protection of our employees' financial well-being by carrying excess headcount and enhancing benefit programs and prioritizing their health and safety through proactive education programs, shifting to work-from-home models, implementing in-office safety protocols, and initiating vaccination programs. For our clients, WMS was able to support their immediate requirements by rapidly innovating, co-creating and implementing new work from home solutions to maintain mission critical operations. We are also helping meet their longer term requirements by driving increased transformation and digitization in existing processes and by continuing to make the necessary strategic investments in our business despite COVID-related revenue and margin pressure. With respect to the communities in which we live and work, the company shifted our WRS care initiatives to virtual and has made contributions of over $1.5 million to COVID relief efforts across the globe since the beginning of the pandemic. In short, I believe the company has been able to strike the proper balance in supporting our employees, clients, shareholders, as well as communities. I am also pleased to see that our sustainability efforts are gaining recognition in the market. Recently, WNS received the number one ranking in COVID's 2021 ESG assessment among 19 of our business services peers. We have also been included and achieved favorable scoring in the 2021 Bloomberg Gender Equality Index and received international awards for our learning and development programs, energy conservation, and CSR initiatives. While we have made significant strides on the ESG front, these are only the first steps in what must be an ongoing journey of continuous improvement. The company leadership understands that our ability to remain competitive and drive long-term success depend in part on integrating critical ESG components into our corporate strategy and goals. Looking forward, we continue to see healthy momentum in the BPM space, driven by increased demand for digital transformation, advanced analytics, and cost reduction. The transition of our business from outsourcing to automating and transforming is not only helping our services become more mainstream, it is also expanding our addressable market. We believe WRS remains very positioned in the BPM space, having made the right investments over the past several years to capitalize on these trends and differentiate our capabilities. For this fiscal year, We currently have 95% visibility to double-digit revenue growth, industry-leading margins, strong free cash flow, and a healthy broad-based pipeline. I would now like to turn the call over to our CFO, Sanjay Puria, to discuss further our results as well as our outlook. Sanjay? Thank you, Keshav.