WNS revises full year revenue guidance upward

The company's Q3 net income up 52.5% y-o-y

Business process outsourcing (BPO) services provider WNS revised its full year guidance for FY13 upwards on better visibility on revenue growth. The guidance reflects a top line growth rate of 11%.

WNS, which is listed on the New York Stock Exchange (NYSE), revised its guidance for FY13, and expects it to be in the range of $437 million and $439 million. The company had earlier guided for a revenue growth at $426 million and $438 million. It also revised its adjusted net income to be in the range of $52 million and $54 million.

WNS reported net profit of $6.1 million for the third quarter ended December 31, 2012, up 52.5% from $4 million in the same quarter last fiscal. Sequentially too the company’s profit went up 41.8% from $4.3 million.

Revenue for the quarter was up 2.5% at $120.2 million from $117.2 million on a year-on-year basis. Sequential basis the company saw its revenue go up by 6.3%.

“We are pleased with the top line progress made during the quarter, as revenue was positively impacted by the start of several new projects and broad-based growth across verticals, services and geographies. While some of this new project revenue came with higher costs in the short term, we are confident that as the processes and relationships mature, our margins will expand. At a macro level, overall demand for BPO services remains stable and healthy as we enter calendar 2013,” said Keshav Murugesh, WNS Chief Executive Officer.

During the quarter WNS added nine clients and expanded eight existing relationships. Better than last quarter when it added three clients.

Revenue less repair payments were up 16.8% from $97.8 million to $113.5 million. Revenue less repair payments are non-Gaap measure that includes auto claims business, and payments to repair centres.

WNS ended the fiscal third quarter with $86.3 million in cash and marketable securities and $84.6 million of gross debt.  The company generated $25.8 million in cash from operations, and capital expenditures for the quarter came in at $5.8 million.

Third quarter adjusted operating margin was 13.9%, as compared to 16.7% in Q3 of last year and 13.7% reported in the second quarter.  Year-over-year, the reduction in adjusted operating margin is the result of infrastructure expansion, project transition costs and integration costs associated with the acquisition of Fusion Outsourcing.