WNS (WNS) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 was $323.1 million, down 1.0% year-over-year and 4.1% sequentially; revenue less repair payments (non-GAAP) was $312.4 million, down 1.6% year-over-year.

• Net income for Q1 was $28.9 million, down from $32.0 million year-over-year; adjusted net income was $44.0 million, down from $51.1 million year-over-year and $53.9 million sequentially.

• Added 8 new clients and expanded 36 existing relationships; closed one large transformational deal and have over 20 large deals in the pipeline, each over $10 million in ACV.

• Transitioned to US GAAP and US domestic filer status, enhancing index eligibility and financial comparability.

• Gross profit margin improved to 35.2% of revenue, up from 34.5% year-over-year; operating profit margin increased to 11.9% from 11.6% year-over-year.

Financial highlights

• Adjusted operating margin was 18.4%, down from 20.1% year-over-year and 20.9% sequentially.

• Adjusted diluted EPS was $0.93, compared to $1.02 last year and $1.12 last quarter.

• Cash and investments totaled $301.5 million, with debt also at $301.5 million as of June 30, 2024.

• Generated $21.4 million in operating cash flow, spent $10.7 million on capex, and repurchased 1.64 million shares for $84.2 million.

• Net cash from operating activities was $21.4 million, up from $12.9 million year-over-year.

Outlook and guidance

• FY25 net revenue guidance: $1.29–$1.354 billion, representing 0–5% year-over-year growth.

• Adjusted net income guidance: $203–$215 million; adjusted EPS: $4.42–$4.68.

• Capex expected up to $65 million for FY25.

• Guidance assumes continued weakness in client volumes, especially in travel, and does not include short-term or incremental insurance captive revenue.

• Guidance based on average GBP/USD of 1.28 and USD/INR of 83.4 for the remainder of FY25.