WNS (Holdings) Limited

Good morning, and welcome to the WNS Holdings Fiscal 2025 Second Quarter Earnings Conference Call. At this time, all participants are in absent-only mode. After management-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, the call is being recorded for replay purposes. Now, I would like to send the call over to David Mackey, WNS Executive Vice President of Finance and Head of Investillations. David?

Thank you, and welcome to our fiscal 2025 second quarter earnings call. With me today on the call, I have WNS's CEO, Keshav Muragesh, and WNS's CFO, Arjit Sen. 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 second quarter ended September 30th, 2024. 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 payment. Adjusted operating margin is defined as operating margin excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits, and impairment of goodwill and intangible assets. We are also excluding costs related to our ADS program termination and costs associated with the transition to voluntarily reporting on U.S. domestic issue reforms. Adjusted net income, or ANI, is defined as profit excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits, goodwill and intangible asset impairment, ADS program termination costs, the transition to voluntarily reporting on U.S. domestic issuer forms, 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?

hey thank you david good morning everyone wns's second quarter revenue and margin were largely in line with company expectations while eps came in above forecast based on one-time tax benefits of nine million dollars the company posted net revenue of 310.7 billion dollars representing a year-over-year decrease of 4.4% on a reported basis and 5.2% on a constant currency basis after adjusting for foreign exchange. Versus the previous quarter, net revenue decreased by 0.6% on a reported basis and by 1.5% on a constant currency basis. The ramp of four large deals sold in fiscal Q4 of last year and broad-based demand for process automation and cost reduction initiatives in the first half of 2025 largely offset the loss of a large healthcare client and continued reductions in our online travel revenues. during the second quarter we added nine new logos and expanded 41 existing relationships for the full year guidance has been lowered to reflect continued reductions in online travel volumes and slower than expected conversion of large deals while the large deal pipeline continues to expand The timing of these contract signings, as well as associated revenue ramps, is proving difficult to predict. As a result, at this time, we have removed the large deal revenue contribution from our fiscal 2025 guidance. Currently, we have more than 20 large deals representing over $500 million in annual contract value. spread across all key verticals, services, as well as geographies. We are making good progress moving these deals through the pipeline and remain confident that WNS is well positioned to win more than our fair share of these opportunities. For the past several quarters, we've been discussing how WNS is increasingly delivering outcomes for our clients at the intersection of domain, digital, as well as data. We continue to make strategic investments in all three of these areas with a focus on developing proprietary technology tools and platforms, forging new strategic relationships, as well as reshaping our global talent. Today, I want to spend a little time highlighting our organizational capabilities and progress in our data analytics and AI practice. At WNS, we believe the true power of analytics is realized when combined with technology, domain specialization, and process expertise. As a result, we are focused on ensuring that analytics and technology are integrated into everything we do, from customer solutions to end-to-end transformational engagements. Today, WNS boasts a mature, robust, and differentiated analytics practice that has been built over the past 20 years through a combination of organic investments as well as strategic acquisitions. At the core of our analytics practice is data management, which is the foundation for all analytics work, including AI as well as generative AI. WNS has built a strong portfolio of data management services and platforms that enable our clients to source, clean, organize, integrate, as well as secure their data to unlock its inherent value. This includes expertise in converting unstructured data from sources like emails, images, text, audio, sensors, as well as social media posts into structured data to create usable, analyzable constructs. Our strengths in optimizing data quality and managing data as an asset are critical to help deliver actionable insights as well as business outcomes. In addition, our strategic acquisitions over the past several years have helped turbocharge WNS's ability to combine analytics and technology to create reusable components which underpin our services and solutions. These proprietary assets are stitched together with domain and process expertise, adding humans in the loop to create productized services across both horizontals and verticals. Our productized services enable WNS to accelerate speed to market and deploy our solutions at scale while maintaining the flexibility to co-create customized, differentiated solutions for each of our clients. To date, WNS has built AI-led analytics assets across all key horizontals, including finance and accounting, procurement, and supply chain, and customer support. The company has also created unique industry-specific capabilities, such as claims management and recovery services for insurance companies, R&D, and clinical specialization offerings for big pharma, revenue growth management services for retail and CPG firms, and a GenAI-led documentation platform for shipping and logistics. These offerings have enabled WNS Analytics to attract some of the world's largest brands as clients, including industry leaders in beverages, biopharma, as well as restaurants. Within our data practice, we have also been investing in the expansion and enhancement of our front office on-site centric consulting capabilities. And with the pace of change and technological advancement accelerated, clients are increasingly looking for experts to help them assess their current situations and help them co-create solutions. Over the past two years, WNS has built a global analytics client solutions team of senior resources that is solely focused on helping clients achieve these objectives. These senior level consultants have data as well as domain specialist backgrounds and are responsible for helping clients with their data, AI, and analytics requirements across strategies, gap analysis, roadmaps, change management, governance, and processes. The upfront consulting efforts help set the foundation for successful business transformation programs, as well as value-driven relationships. As a result of these investments, WLS's analytics is experiencing strong growth, despite the weak macro environment, with our standalone analytics work growing at a 20% gager over the past three years. And while standalone reported analytics today represents 14% of WNS revenue, it is safe to say that the majority of total company revenues now has analytics embedded as part of the client solution. And all of the large deals in our pipeline have technology-enabled analytics as a critical component of our value proposition. wns's solid growth and expanding capabilities in data analytics and ai are increasingly being recognized by the analyst and the advisor community we've now been named the market leader by hfs in analytics ai data platforms and automation services a star performer for analytics business process services by everest a leader in data science services by Analytics India magazine, and an AI game changer by NASSCOM. The company also received seven Stevie Awards for its AI, machine learning, and Gen AI solutions, and an AI Excellence Award from Business Intelligence Group for our Gen AI capabilities. As the analysts and advisors remain important gatekeepers to many client initiatives this positive recognition is critical to ensuring that wns remains top of the mind for outsourcing opportunities in summary by combining the power of data digital as well as domain today wns is able to deliver impactful business outcomes for our clients including generating actionable insights to improve decision making, reducing business risk, enhancing customer experience, and enabling innovation and competitive differentiation. With respect to our fiscal 2025 guidance, while we remain comfortable in our ability to close some of the large opportunities, given the uncertain timing, we have removed the large deal revenue contribution from our updated projections. Guidance also assumes a further reduction in OTA revenues in the second half of the year based on current volume trends. And despite these challenges, we are comfortable in our ability to sequentially grow revenues in fiscal Q3 as well as Q4, providing solid momentum exiting the year. Any second half large deal signings should provide some incremental revenue this year, but more importantly, will provide enhanced visibility to revenue acceleration in fiscal 2026. WNS remains committed to continuing our investments in domain expertise, data and analytics, and technology-enabled offerings leveraging AI and GenAI to ensure our ability to deliver long-term profitable growth and sustainable shareholder value. I would now like to turn the call over to our CFO, Arijit Sen, to further discuss our results as well as outlook. Arijit?