WNS (Holdings) Limited

Good morning and welcome to the WNS Holdings Fiscal 2024 First Quarter Earnings Conference Call. At this time, all participants are in 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 would like to turn your call over to David Mackey, WNS's Executive Vice President of Finance and Head of Investor Relations. Please go ahead.

Thank you, and welcome to our fiscal 2024 first quarter earnings call. With me today on the call, I have WNS's CEO, Keshav Murugesh, and WNS's CFO, Sanjay Puria. 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 30th, 2023. 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 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 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 today's call. I would now like to turn the call over to WNS's CEO, Keshav Muragesh. Keshav?

Thank you, David. And good morning, everyone. In the first quarter, WNS continued to deliver healthy financial results and position our business for long-term success. Despite the challenging macro environment, WNS posted Q1 net revenue of $317.5 million, representing a year-over-year increase of 15.5% on a reported basis and 17.5% constant currency. Sequentially, net revenue increased by 4.1% on a reported basis and 3.6% on a constant currency basis after adjusting for foreign exchange. Our acquisitions added approximately 6% to year-over-year growth and had no impact sequentially. In the first quarter, WNS added six new logos and expanded 36 existing relationships. Sanjay will provide further details on our first quarter financial performance in his prepared remarks. The advance of generative AI and its potential impacts on business and society are being discussed and debated globally. The growth in the size and sophistication of large language models is a significant technological advance that will have meaningful and wide-ranging impacts. But there is still much to be learned in the coming months and years about its costs, benefits, risks, and applicability. That being said, WNS is extremely excited about the opportunities GenAI will create for our business moving forward. As we work to create new and innovative use cases for GenAI, it is important to remember that GenAI is a tool that represents only one component of an impactful solution. Leveraging the benefits from this and other technologies will require the expertise of firms like WNS, who can combine deep domain and process expertise, advanced analytics, and global talent to deliver business outcomes. In fact, we believe that meaningful disruptions to our clients' models, such as technology advancements, help drive increased opportunity for bpm providers including expanding the addressable market growing existing relationships and accelerating adoption over the past 15 years we have seen several disruptive forces impact our clients business such as macro cost pressure the internet the cloud, the emergence of big data, digitization and automation, as well as the COVID pandemic. Each of these themes has now proven to generate increased adoption of new services and process outsourcing. In addition, we also see GenAI as a catalyst for driving higher value services solutions as well as engagement models. We believe that GenAI will enable WNS to continue moving our relationships up the value chain and shift engagements from headcount-based pricing to models based on ownership and accountability for results. As a result, we will be able to better align relationship objectives, delivering great outcomes for clients, and stickier revenues with increased margin opportunities for WNS. As we are seeing already, one undisputable impact from Gen AI will be improvements in productivity. Similar to other disruptive technologies, we understand that this will reduce the reliance on some existing skills, enhance the performance of others, and result in the creation of completely new roles For BPM providers, committed year-over-year productivity improvements are business as usual. At WNS, our experience demonstrates that increased productivity headwinds driven by technology and automation have been more than offset by relationship scope expansion and the ability to attract new clients. This is due to the underpenetrated nature of both our industry and the majority of our client engagements, as well as the need for clients to increasingly leverage new technologies to remain competitive. As a result, despite market fears to the contrary, technology advancements have proven to generate net outsourcing gains for BPM providers. With this backdrop, I want to provide you with a look at WNS's current approach and capabilities with respect to generative AI. Over the past 10 plus years, WNS has demonstrated a unique ability to leverage our culture of innovation, flexibility, and client centricity to adapt and flourish. We've been able to successfully manage several key industry changes and challenges. including brexit smack digital and covid while delivering industry leading growth and margins for the company and co-creating differentiated solutions for all our clients we believe that with respect to gen ai innovation and adaptability will be important requirements for success in addition WNS has also the foundational skills necessary to help our clients leverage the capabilities of Jene AI. Our internal investments and strategic acquisitions over the past several years in technology, data, and analytics as well as domain expertise, have positioned WNS to meet our client's evolving requirements. And today, we have approximately 5,000 people in the company with data, AI, and Gen AI skills, and another 1,000-plus people with the core skill sets to be rapidly trained and upskilled for growth. These include analysts, engineers, scientists, developers, and architects with skills across data, AI, cloud, enterprise, and UI and UX. In terms of solution development, WNS has already embedded GenAI capabilities into seven of our existing digital assets, which are now enabled and ready to go. In addition, we currently have more than 75 GenAI use cases in various stages of development across horizontals as well as verticals, of which nine are currently built, demoed, and ready for deployment. For example, in the healthcare space, we have combined our deep industry knowledge with GenAI to create a medical summarization solution which can summarize, analyze, and synthesize complex clinical as well as medical records. By leveraging GENE-AI to process diverse data sets, including patient histories, lab results, medical codes, and treatment plans, WNS is able to help healthcare payers and providers access critical information rapidly, improve decision making, and drive better patient outcomes. Most importantly, we continue to believe that our decades-long focus on domain-first remains our key differentiator and that industry knowledge will be the most important enabler to leveraging generative AI. Our role as a domain-centric partner provides us with unmatched visibility and knowledge of industry-specific processes, data, and operations across a large number of clients. Since domain expertise is critical to data sourcing and selection, model training and utilizing large language models to create new solutions We feel WNS is uniquely qualified to help our clients leverage GenAI to solve industry problems as well as drive great outcomes for them. So to summarize, we believe that AI and GenAI create more opportunity than threat for our business and that WNS is best embracing and well positioned to take advantage of this technological advancement. With respect to our full-year outlook, companies appear to be slightly more cautious about a sustained macro slowdown. As a result, we are seeing defensive behaviors from some clients, such as reduced volume projections and delays in decision-making. To date, this has not impacted our revenues, and we believe the volume projections they are providing are conservative. Despite these challenges, we continue to expect low to middle double-digit revenue growth and stable industry-leading margins for this year. WNS's new business pipeline remains extremely strong. The company is executing well, and we continue to invest in domain, technology, and talent in order to drive long-term sustainable value for all of our key stakeholders. I would now like to turn the call over really to CFO Sanjay Puria to further discuss our results and outlook. Over to you, Sanjay.