WNS Q1 results: Net profit down 9%, revenue up 10%

Revenue in the first quarter was $326.5 million, up 10.5% YoY and an increase of 3.7% sequentially.

The company said in a statement that profit decreased YoY due to wage increases, increased return-to-office costs, higher share-based compensation expense, and increased costs with acquisitions, including amortisation of intangibles, interest expense, and other acquisition-related expenses.

Also, these headwinds more than offset revenue growth and favourable impacts from currency movements.

Sequentially, Q1 profit decreased as a result of wage increases, return-to-office costs, higher share-based compensation expense, and one-time benefits in Q4 from tax and interest income.

Keshav Murugesh, chief executive of WNS, said the company has updated its revenue guidance based on current market visibility. As part of its guidance for FY24, WNS said that revenue, less repair payments, is expected to be between $1,296 million and $1,354 million compared to $1,290 million and $1,348 million guided last quarter.

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“Despite the challenging macro environment, WNS grew constant currency revenue less repair payments by more than 17% and maintained our industry-leading adjusted operating margins. Our updated guidance and visibility demonstrate the healthy and resilient nature of our business, and we believe WNS remains well-positioned to meet the evolving needs of our clients,” said Murugesh.The company said its revenue in the quarter improved as a result of our client additions, the expansion of existing relationships, and acquisitions from the previous fiscal.

“During the quarter, the company witnessed the ramp-down of a large healthcare process and unfavourable currency movements impacting revenue growth. Sequentially, growth driven by broad-based revenue momentum and favorable currency movements was partially offset by contractual productivity commitments to certain clients, said the company statement.

“Our guidance for the full year reflects growth in revenue, less repair payments, of 12% to 17% on a reported basis, or 11% to 16% on constant currency. This includes an estimated 3% inorganic growth related to our fiscal 2023 acquisitions,” said Sanjay Puria, CFO, WNS.