WNS (Holdings) Limited

Good morning and welcome to the WNS Holdings fiscal 2023 third quarter earnings conference call. At this time, all participants are in the listen-only 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 will turn the call over to David Mackey, WNS's Executive Vice President of Finance and Head of Investor Relations. David?

Thank you, and welcome to our fiscal 2023 third quarter earnings call. With me today on the call, I have WNS's CEO, Keshav Murugesh, WNS's CFO, Sanjay Puriya, and our COO, Gautam Barai. 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 results for the fiscal third quarter ended December 31st, 2022. Some of the matters that will be discussed on today's call are forward-looking. Please keep in mind that 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 uncertainty 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 this 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, acquisition-related expenses or benefits, and goodwill impairment. Adjusted net income, or ANI, is defined as profit excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits, 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' CEO, Keshav Murugesh. Keshav?

Hey, thank you, David, and good morning, everyone. In the fiscal third quarter, WNS continued to invest for the future while executing well and delivering solid financial results. Overall, our business continues to show both strength and resilience despite the challenging macro environment. Net revenue for Q3 came in at $292.9 million, representing a year-over-year increase of 12.2% on a reported basis and 19% on constant currency. Sequentially, net revenue increased by 1.3% on a reported basis and 2.3% on a constant currency basis after adjusting for foreign exchange. Our acquisitions added approximately 3.6% to growth year over year and 0.7% In the third quarter, WNS added 11 new logos and expanded 24 existing relationships. Sanjay will provide further details on our third quarter financial performance during his prepared remarks. As many of you are aware, in mid-December, WNS announced the acquisition of two token strategic assets. In line with our stated criteria for M&A, we believe that these companies fill gaps in our capabilities, are strong cultural fits, meet or exceed our financial objectives, and were fairly valued. At a high level, the additions of OptiBuy and the Smart Cube elevate WNS's offerings in digital solutions, procurement, supply chain, and advanced analytics while helping expand our European footprint. These all represent identified areas of strategic focus for the company. Based in Poland and founded in 2010, OptiBuy helps companies leverage the world's leading digital procurement and supply chain platforms by providing consulting, implementation, and integration solutions. Deploying third-party technologies, including iValua, Jagger, and O9, OptiBuy is able to deliver significant benefits to clients across the procurement value chain, including cost reduction, improved cash management, and streamlined supply chain performance. The company's focus on designing and building optimized digital processes is the perfect complement to WNS's existing expertise in running procurement functions. In addition, OptiBuy brings front-end digital strategy and consulting services to the WNS portfolio and helps expand our geographic procurement footprint in the whole of continental Europe. The Smart Cube is a platform-led analytics firm focused on procurement, supply chain, and commercial sales and marketing. They have a unique on-demand digital market intelligence platform called Amplify Pro that helps generate actionable insights and improved decision making. This technology accelerator combines artificial intelligence with human intelligence to scan the competitive landscape, benchmark costs, measure KPIs, identify trends, and manage risks for clients. In addition, the Smart Cube has a seasoned team of approximately 600 research and analytics experts, including more than 400 with master's degrees. These resources possess deep domain expertise in procurement and supply chain and technical skills, including data engineering, data visualization, artificial intelligence, as well as machine learning. For procurement and supply chain, the Smart Cube delivers analytical market intelligence across category management, commodity management, and supply risk including expertise in ESG sourcing. In commercial sales and marketing, they help drive revenue growth management, consumer and market insights, and pharmaceutical marketing effectiveness. Both OptiBuy and the Smart Cube bring strong domain leadership, highly specialized teams, and proven track records of performance across revenue growth, operating margins, and customer satisfaction. They also serve blue chip client rosters that present significant cross-sell and up-sell opportunities. While these firms have niche areas of vertical expertise, including retail, PPG, and healthcare, WNS views both assets as horizontal in nature, allowing us to easily take their offerings across our verticals as well as geographies. These services are highly complementary with our existing offerings and with each other and will enable WNS to provide differentiated end-to-end solutions to our global clients. As I mentioned earlier, procurement, supply chain, and analytics are strategic areas of investment for WNS. The global procurement space is rapidly growing and evolving as clients shift their attention from transactional processing to tactical buying to strategic objectives, including risk and compliance, e-sourcing, category management, as well as sourcing innovation. Driven by digitally led solutions with integrated analytics and deep domain expertise, clients are looking for their BPM partners to help reduce supply hazards increase agility, drive sustainability, streamline capital, and improve cash flows for them. Since our acquisition of Denali in March of 2017, WNS has consistently been recognized by the industry analysts as a leader in procurement BPO. Over this time period, our procurement revenues have grown by more than 25% compounded and now represent approximately 10% of total company revenue. And while we are happy with the progress we have made, we believe our new acquisitions will help accelerate WNS's leadership position and business momentum by enabling WNS to better compete for large global multi-tower transformational deals. Looking forward, we remain excited about the current demand environment for BPM and WNS's differentiated positioning in the market. We continue to invest both organically as well as inorganically in creating solutions which combine state of the art technology with best in class talent. Despite the weak macro, our new business pipeline has never been healthier and the company is delivering solid top line growth while maintaining industry leading margins. additionally we are making steady progress on our key esg and corporate sustainability goals this past quarter wns was named to the forbes 2022 list of world's best employers highlighting our success in creating a globally collaborative inclusive and rewarding organization in addition the company signed our commitment letter with the Science-Based Target Initiative, or SBTI, to reduce our emissions in line with the latest climate science. Combined with our financial and operational performance, we believe our ESG initiatives will allow WNS to deliver maximum value to our customers, our employees, shareholders, and the communities we work in. I would now like to turn the call over to our CFO, Sanjay Puria, to further discuss our results as well as the outlook. Sanjay. Thank you, Keshav.