Home Market WNS Q2 profit jumps 31% YoY to $25 million

WNS Q2 profit jumps 31% YoY to $25 million


WNS on Thursday reported a 31 per cent year-on-year rise in profit at $24.80 million for quarter ended September 30. It had posted a profit of $18.90 million in the corresponding quarter last year.

Net revenue jumped 7.20 per cent YoY to $195.50 million in Q2FY19.

“Year-over-year, fiscal Q2 revenue improvement was driven by healthy organic growth across key verticals, services, and geographies, which more than offset headwinds from currency movements and hedging losses. Sequentially, organic revenue growth was more than offset by currency movements and hedging losses,” WNS said in a release.

Operating margin in second quarter was 14.5 per cent compared with 10.8 per cent last year and 12.6 per cent in the sequential quarter.

On a year-over-year basis, margin improvement was the result of increased productivity, lower share-based compensation expense, operating leverage on higher volumes, and currency movements net of hedging.

“These benefits more than offset the impact of our annual wage increases and lower seat utilization. Sequentially, margins improved due to increased productivity, favorable currency movements net of hedging, and operating leverage on higher volume. These benefits more than offset the impact of our annual wage increases,” the company said in a release.

From a balance sheet perspective, WNS ended Q2 with $158.1 million in cash and investments and $75.3 million of debt. In the second quarter, the company generated $30.6 million in cash from operations, and incurred $10.7 million in capital expenditures.

During the quarter, WNS repurchased 6,49,700 ADSs at an average price of $50.73 per ADS. Share repurchases impacted Q2 cash by $33.3 million, and the company also made scheduled debt payments of $14.1 million.

Days sales outstanding were 35 days compared with 30 days reported in Q2 of last year and 31 days in the previous quarter.

“WNS second quarter financial performance continued to demonstrate our solid business momentum and differentiated positioning in the BPM marketplace. In the fiscal second quarter, the company grew revenue less repair payments at 7% year-over-year, or 11% on an organic, constant currency basis. We were also able to expand our margins during the quarter and deliver a 23% increase in adjusted diluted earnings per ADS versus the same quarter of last year,” said Keshav Murugesh, Chief Executive Officer of WNS.

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