Q1 2022 WNS (Holdings) Ltd Earnings Call

Yeah.

Good morning, and welcome to the WNS Holdings fiscal 2022 first quarter earnings Conference call. At this time, all participants are in a listen only mode.

After managements prepared remarks, we will conduct a question and answer session and instructions for how to ask a question will follow at that time.

A reminder, this call is being recorded for replay purposes, now I would like to turn the call over to David Mackey, Wns's Executive Vice President of Finance and head of Investor Relations David.

Thank you and welcome to our fiscal 2022 first quarter earnings call with me today on the call I have WNS CEO ketchup, Marrakesh, Wns's, CFO, Sanjay Korea, and our C O O Gotham Barak.

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 Dot WNS dotcom.

Today's remarks will focus on the results for the fiscal first quarter ended June 30th 2021.

Some of the matters that will be discussed on today's call are forward looking.

Please keep in mind. 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 and the company's form 20-F.

This document is also available on the company website.

During today's call management will reference certain non-GAAP financial measures, which we believe provide useful information for investors reconciliations.

The Asian, so for 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 payments adjusted.

Operating margin is defined as operating margin, excluding amortization of intangible assets share based compensation and goodwill impairment adjusted net income or Eni is defined as profit excluding amortization of intangible assets share based compensation goodwill impairment and all associated.

Taxes. These terms will be used throughout the call.

I would now like to turn the call over to WNS to CEO of Acacia mortgage Acacia.

Thank you David and.

And good morning, everyone.

Despite some renewed COVID-19 related challenges this past quarter.

WNS continues to perform well and force solid financial results.

Net revenue for fiscal Q1 came and our 236, 4 and $3 million and.

And representing a year over year on increase of 17 for <unk>.

3 percentage on a reported basis and 11 points.

Workforce and constant currency.

Sequentially net revenue increased by $8 million, all 3 of the horse and on it.

Reported basis.

And 3% constant currency.

In the first quarter net.

Company average.

7 new logos and expanded 17 existing relationships.

Harvey and simulator and so.

And our boss numerous.

And coming from volume increases with existing clients with our company, adding almost 3000 employees during this quarter.

WNS also bolstered strong adjusted operating margins of 28%.

Despite the COVID-19 related margin pressure and we repurchase 1.1 billion share.

Sanjay will provide further details on our first quarter financial performance and.

And his prepared remarks.

Given the pandemic related volatility and the past quarter.

I wanted to provide you with a brief update on some of the associated impact to our business.

As expected, we are seeing that vaccination rates infection levels and economic recovery are not consistent across the globe.

And I'll leave me the country on India experienced a massive spike and COVID-19 cases.

Gamescom.

And for 400000 per day.

Moving to shopping and juice and oxygen and hospital beds.

Government imposed lockdown.

And increased capabilities.

WNS responder to the southern search, but dramatically reducing our in office head count.

But she is and oxygen concentrators and increase in employee benefits and hiring additional resources to manage productivity losses stemming from Boston on.

Our family Index.

These actions resulted in over $1 million of additional costs in the first quarter and sequentially.

The credit showed a decline.

Our global work from office percentage from 23% last year and last quarter to 15% with India and office dropping below 5%.

On a positive note our proactive response and neighbor WNS to support our employees' health and safety.

While successfully managing that transition back to work from home.

Service and delivery levels and the quarter remained stable at 99%.

And there were no material adverse impact declines operations on our company revenue.

This recent surge of cases and India for the stress tested our business continue to approach and validated the hybrid operating model and.

Structurally more resilient.

By mid of June gift columns, with India have dropped well below 100000 per day.

And infrastructure and their availability was largely restore and lockdown restrictions will be eased.

I'm also proud and Don on that last month.

And as we began procuring.

And delivering and vaccinations for our employees and debt.

Families and India.

So far we have and administer over 8000 doses.

And we are working to expand vaccinations across our global delivery network.

We are also planning to make these programs available to our clients employees and business affiliate of WNS.

While we struggled in Q1 with the Covid surge and the U S economy and benefited from declining Keystone and.

And the lifting of restrictions.

This progress extend it for the vertical for the traveler and bucket goes well and we are seeing meaningful improvement and the U S domestic leisure market and more specifically the online travel sector.

The magnitude and timing of the recovery.

Everybody has got a number of on travel clients by surprise.

WNS is working closely with them to understand their changing requirements and we are aggressively hiring and training additional resources to bring and increase support levels online as quickly as possible.

Our revised guidance and reflects increased volume commitments and associated fulfillment and psychos for quarter, 2 and beyond.

There also remains further opportunity to improve revenue going forward.

U S domestic travel continues to rebound and when the business and international travel segments beginning to recover.

I also wanted to spend a few minutes per day speaking to you about the ongoing ESG activities at WNS.

In may and.

We released our first ever corporate sustainability report.

Highlights for WNS this effort in fiscal 'twenty 'twenty 1.

Towards developing and measuring and integrating sustainability goals and to the company's long term strategic plans.

With the help of KPMG.

For a comprehensive materiality assessment to better understand the ESG and demands of our business that are most critical to WNS is success and those that are Brian Murray and importance to our stakeholders.

In addition to expected focus areas, such as ethics, and compliance balance management diversity data security corporate social responsibility and climate change and the survey and also highlighted digitization and innovation.

Important success factors for WNS.

Many of the key ESG focus areas identified in this sustainability report has in fact been wiped out on the magazine and the impact of the Covid pandemic.

Beginning with the company's commitment to protecting our people clients and communities.

From an employee perspective, WNS has expended significant resources to ensure the health and safety.

And economic stability also on global stocks.

And for us, including Protectionist protection of our employees finance and <unk> by carrying excess headcount and.

On enhancing benefit programs and prioritizing the health and safety through for.

Active education program shift.

Shifting to work from home models implementing in office and safety protocols and.

And initiating vaccination programs.

For our clients WNS was able to support their immediate requirements by rapidly innovating co, creating and implementing new work from home solutions do maintain mission critical operations.

And also helping them meet their long term requirements by driving increased transformation and digitization and existing processes and by continuing to make the necessary strategic investments and our business. Despite COVID-19 related revenue and margin pressure.

With respect for the communities in which we live and work the company has shifted WNS scale initiatives to work here and there.

And I've made contributions of over $1.5 million.

The Covid relief efforts across the globe since the beginning of the pandemic.

In short I believe the company has been able to strike the proper about them and supporting our employees clients shareholders as well as communities and.

I'm also pleased to see that our sustainability efforts are gaining recognition and the market.

Recently WNS received the number 1 ranking in <unk> 'twenty 'twenty, 1 and ESG assessment I'm on 19 offline business services peers.

And also being included and achieved favorable score and the 'twenty 'twenty, 1 Bloomberg gender equality index and.

And it seems international awards for our learning and development programs and energy conservation and CSR initiatives.

While we have made significant strides on the ESG front.

These are only the first step and what must be on ongoing journey of continuous improvement the company leadership understands that our ability to remain competitive and drive long term success and <unk>.

From his boss on integrating critical and ESG confidence into our corporate strategy and goals.

Looking forward, we continue to see healthy momentum and the BPM space driven by increased demand for digital transformation.

Bonds and other fixed and cost reduction.

The transition of our business from outsourcing to automating and transforming he is not only helping our services become more mainstream it is also expanding our addressable market.

We believe WNS remains well positioned and the BPM space, having made the right investments over the past several years to capitalize on these strengths and differentiate our capabilities.

For this fiscal year, we currently have 95% visibility to double digit revenue growth and.

Factory, leading margins and strong free cash flow and.

And the broad based pipeline.

I would now like to turn the call over to our CFO Sanjay for reactor discuss further our results as well as our outlook Sanjay.

Thank you Alicia.

And the first in the fiscal first quarter WNS as net revenue came in at $236.3 million up 17.3, plus and from $201.4 billion posted in the same quarter of last year and up $11.4 per se.

On a constant currency basis.

Sequentially net revenue increased by 3 and a half, let's say on a reported basis and 3 plus day on a constant currency basis.

Sequential revenue improvement was broad based across what he does so this is and geographies and driven by both new logos and expansion of existing relationships.

Adjusted operating margin in quarter, 1 was 28 per se as compared to 17, 5% reported in the same quarter sales.

2021, and 28% last quarter.

Yeah on Europe.

Adjusted operating margin increased largely as a result of reduced COVID-19 related margin pressures increased.

Increased operating leverage on higher volumes and favorable currency movements net of hedging.

This benefit was partially offset by the firewall and impact of contractual productivity coming from ink employee wage increases and the reinstatement of our phosphate leave policy.

Sequentially margins declined as a result, all committed productivity coming from mix vision disease.

Related to the Boyd's Spike in India, the reinstatement of our Corporately policy and hiring in advance of revenue.

These headwinds were partially offset by operating leverage on higher volume.

SG&A, resulting from partner for bonus and incentive on malls and favorable currency movements net of hedging.

And the company's net other income and expense was half a million dollar of net income in the first quarter and going back to half a million dollars of net expense reported in quarter 1.

And I need 91.

And $200000 of net expense last quarter.

Yahoo.

Favorable debt and.

It's a group of people, who won $2 million of.

Non recurring interest income on a tax refund and lower interest expense, resulting from scheduled debt repayments.

These items were partially offset by lower interest rates on cash and investments.

Sequentially net interest and net income is driven by an incremental $4 million.

Interest income on tax refunds and higher cash balances.

The other is in Ifs.

Active tax rate for quarter, 1 gaming net 21, 5% down from 25, 1% last year and down from 32, 6% last.

And last quarter.

This quarter's tax rate included a 1 time line.

$8 million tax benefit relating to the tax treatment for liquid mutual funds.

Other changes in the quarterly tax rate are primarily due to a mix of profits between geographies and the mix of won't delivered from tax incentive facilities.

The company's adjusted net income for quarter, 1 was $39 million.

So with $26.1 million in the same quarter of fiscal 2021, and $36.7 million last quarter.

Adjusted diluted earnings was <unk> 76 per share in quarter 1.

The 15th day in the first quarter of last year, and 71 thing last quarter.

As of June 3200, 91 day.

The net balances in cash and investments totaled $311.3 million and.

And the company had $16.8 million uptick.

WNS generated 15, $1.3 million of cash from operating activities and this quarter and incurred $7.7 million and capital expenditures.

During the quarter the company is equal.

1.1 million shares of stock at an average price of $77 and 31 thing, which impacted quarter walk cash by $85 million.

DSO in the first quarter Gaming Act, particularly as compared to 39 days last year and 30 day last quarter.

With respect to other key operating metrics.

And head count at the end of the quarter was 46918 and on.

Attrition rate in the first quarter increased to 32 per se.

Upfront 11, plus sales reported in quarter, 1 of last year and up from 30% in the previous quarter.

Hiding in the quarter was for new business that dominate volume increases and travel and COVID-19 related backup resources.

<unk> capacity at the end of the first quarter and remained relatively steady at 34738.

The seat utilization metrics and this is a company typically provide as a measure of infrastructure productivity are not meaningful.

We are currently operating at 85% work from home globally.

In our press release issued earlier today WNS provided our revised full year guidance for fiscal 2020.2.

Based on other companies' current visibility levels, we expect net revenue to be in the range of $961 million.

$1 billion and $90 million.

President day, you all the other growth of 11 closer to 16 per se on a reported basis and 8% to 14% on a constant currency basis.

And revenue guidance assumes an average British pound to Euro dollar exchange rate of 1.38 for the remainder of fiscal 2020.2.

Consistent EBITDA guidance approach and previous years, we currently have 95% and visibility to the midpoint of the range and our projections do not include any uncommitted shocked on revenue.

Full year adjusted net income for fiscal 2022 is expected to be in the range of $158 million.

$168 million.

Based on a $74.5 rupee to US dollar exchange rate for the remainder of fiscal 2020.2.

This implies adjusted EPS of $3 and 9 to $3 and 20, <unk>, assuming a diluted share zone on that.

<unk> 51.2 million shares.

With respect to capital expenditure.

And that's currently expects our requirement for fiscal 2020.2 to be up to $35 million.

We'll now open the call for questions operator.

Ladies and gentlemen, if you wish to ask a question at this time. Please press Star then 1 more you touched on and telephone.

And with your question has been answered or you wish remove yourself from the queue. Please press the pound key and <unk>.

Interest and time and to enable everyone on the call to participate please limit your questions to 1 question and 1.

Our first question comes from the line of Maggie Nolan with William Blair. Your line is open.

And as Ted on for Maggie.

Can you talk about the ability to add new clients.

Thank you for the client sentiment right now on outsourcing and and.

Delivery ability just kind of.

Covid going on and India.

Yes.

In terms of what we are seeing that decline and demand continues to be robust and we continue to add new clients is also on you did buy cash up in his prepared remarks earlier.

And what we are also able to do is effectively ramp up due to our hybrid operating model, which balances other work from home to work from office requirements. So we are seeing no pressure in terms of ability to deliver and execute to our committed ramp up cycles without line.

And just to add a little color to that.

I think what this really shows is.

How mission critical these services and solutions are to our clients today. The reality is given the disruption given some of the challenges that are going on out there clients understand that this isn't going to be easy, but the reality is they understand that they can't wait a year or 2 years for 3 years until we're completely passed.

On a COVID-19 cycle to be able to start to transform and to automate their businesses. So.

And what this really is doing and help helping to demonstrate just how critical and just how strategic these types of initiatives are to our clients.

Right.

Okay. Thanks Thats helpful.

And my follow up question.

And being in terms of their current wage inflation levels.

And the current pricing environment.

So.

The current reach.

Back to the pre COVID-19 level reduced but normal.

And what we used to have approximate he is on average of 8% and the organization.

And you know.

We are not seeing any pricing pressure the whole discussion is all about productivity efficiency transformation and thats, what the decision on what the total cost of ownership.

Alright, great. Thank you.

Thanks for that.

Thank you our net.

Our next question comes from Bryan Bergin with Cowen Your line is open.

Hi, Thank you question on travel and leisure client conversations and just curious what youre seeing and projected spending and the budgets that they are providing for the year and are you seeing any recent volatility based on variance.

So cash.

You have alluded in his prepared remarks of what our guidance assumes the confirmed ramp ups that our clients are provided.

Over the next 2 to 3 quarters. What we are seeing is a current ramp up across other otas, especially due to the domestic travel bookings and the U S and some forward leisure bookings domestically in the U S and certain other countries, but definitely there is a scope that we see is as the depending on the week.

The Covid pandemic evolving maybe see is increased bookings and hotels to transcontinental flights should they pick up that gives us additional.

Volumes, but at the moment the clients are also conservative and providing confirmed forecasts.

Yes, Brian.

And just add a little bit share and.

And.

Obviously, what's happening around travel is very optimistic very positive from our point of view and.

And clearly.

Benefiting from some increased volumes based on what both of them just spoke about.

At the same time I would like to mention that at this point in time on.

Revenue was up to almost 25% below pre COVID-19 levels. So there is a huge potential for growth from here and for that to be realized lots more has to happen for.

First and foremost we think that the whole.

Health passport system.

Airlines and.

Countries are talking about has to pick off more of explanation and each are good.

And most importantly.

Trans Atlantic traffic as Gordon mentioned shifted so having said that while we are positive about it and we expect to keep benefiting along the way, we will wait with caution and to see how our clients actually predict these numbers over the next few months.

A couple of things I'd like to add to that too Brian 1 other thing that's important to remember and in case you touched on it and his prepared remarks, a little bit.

Is that there is a there is a lead time, that's associated with with what the travel clients want and so for example, if they do start to see a pickup in volume and they come to us and and are willing to commit to higher volumes going forward.

And we're still as a 2 to 3 months cycle for us to go out and hire these resources and frame. These resources for this specific processes that there's demand for it so theres always going to be somewhat of a lag between what you see and a pick up pick up externally and what we see in terms of the ability to generate revenue the other color I'd like to give.

For you around the travel vertical and in addition to as both day, Kevin mentioned the opportunity to recover the lost business. We are also seeing significant traction and the travel vertical with new logos. So we are seeing.

New companies coming to us looking for help and a post pandemic environment and and these are really all centered around not just saving costs, but also trying to attract and retain customers and and.

Improving the customer experience and an environment, where that's going to be extremely important to trying to rebuild loyalty and rebuilt capability.

Okay. Thank you for all that color and.

And just a follow up here on gross margin and can.

And your comment on on what drove that change here relative to where you've been the last several quarters. How much of this was pandemic related costs versus some other normal course of business and how should we expect gross margin to trend over the next couple of quarters.

Yeah, so and I'll take that specifically for this quarter, we had less than linear.

And 1 and half million dollar of the Covid related impact specifically for this quarter, which.

Mutuals and some of the hiring and just not hiring what we have to do because of that.

The Covid absenteeism, because there was a surge and employees who are not able to come to work as well as the.

And on some of the benefits program, what we don't.

And what they started doing this quarter, which gave you touched up on whether it goes up and the insurance coverage for our people and whether Theres, a homecare vaccination GAAP and so on what we expect.

Margin definitely 2 in Peru.

Sequentially. After the next quarter as we move forward because some of this cost as we are seeing is a COVID-19.

Situation is getting relaxed and also we may have that improve but again, if there is us again and be able to toward where.

And then definitely that and maybe some impact to protect the revenue.

And some impact on the module.

And and I think Brian just to reiterate you know Q1 is typically a seasonally low quarter for us from a margin perspective, both in terms of the wage increases that we give to our employees as well as the productivity commitments that we give to our clients. So.

The reduction sequentially. It was something that was expected I would actually say that if you look at where we finished the first quarter. Our gross margin came in probably a little bit below expectation because of the COVID-19 surge, but the SG&A also came in lower on a sequential basis because of some of the.

Some of the and.

Incentives and bonuses that Sanjay.

And Q4 that were not material not recurring in Q1, and so certainly it was a it was a good overall quarter from an operating margin perspective, but we do see upside as we move across the 3 quarters for the rest of this year, which is what's implied in our and our full year guidance, which still has adjusted operating margins and the 21% to 22% range.

Okay. Thank you very much.

Okay.

Thank you. Our next question comes from my Young Tandon with Needham Your line is open.

Thank you congrats on the quarter catch.

Cash up maybe I would ask you sort of a high level question to start are you seeing the pace of deals and worthy.

And from signing to revenue accelerate here at this stage and the pandemic versus say other.

And then make a I'm assuming that given the cost pressures and the focus on digital transformation there might be more of an impetus on the part of clients to move faster I just wanted to get your thoughts around that.

Yeah. Thanks, Mike for the question, So first and foremost I would say the 3 things are working in our favor..1 is the investments we have made over the years and some other core programs that I have already spoken about.

Which I think at this point in time on all resonating extremely well from a client point of view when we talk about digital when you talk about technology, when we talk about domain and when we talk about analytics and we'll be talking about the fact that as a company, we were able to actually deliver transformation and as well as our transition program.

And even in a remote manner and discussion.

And those very well for us.

The second thing I must say is that anyone who is not debt.

Growth in this model actually I see them scrambling to actually stop testing this model and start getting involved.

With this model and for.

For those who on a mature outsourcers or being part of this program for Hawaii I.

I think a lot of them on looking at revenue as the next wave likely to hit and what decisions should I take quickly. So in terms of the overall demand environment I actually think that the demand is very very solid across.

All 4 verticals that is across all geographies. It is across all the operating programs, we have and in terms of guidance.

And from the sales cycle to actual revenue it depends a lot on the.

And what the clients actually want.

From our perspective, we've actually Paul and number of clients that have been pushing this for the past few months have been looked at very quickly and some people who are looking at larger transformational kind of bid on.

This progress things and programs, but moving a little slower at this point in time, but overall I'm really positive about the way our pipeline has shaped up and the way our clients and prospects on responding to us and I must say at this point and time the number of large deals that we have.

Interacting it on.

And actually very very healthy.

That's very helpful. Thank you for that than other quick follow up here I wanted to go back to the guidance should we expect that trajectory on revenue and margins to be fairly linear for the next 3 quarters or do you expect any.

He's analogy or any sort of onetime drivers that might skew the growth rate on margins.

For 1 or 2 quarters, just wanted to get a better handle on how the model and shakes out now and this schedule the pandemic and some other headwinds that you've called out and some businesses around travel, but less so obviously than what you were seeing before.

So I'll take that.

And now for the guidance definitely what we expected a sequential growth.

<unk>.

The next 2 quarters and this is based on our visibility of the guidance, what we have which is 95% and our decision to the midpoint.

The guidance and just wanted to remind that this doesn't include the short term revenue weighted we don't have a visibility as well as you know.

The possibility from our cloud vertical in case it picks up because right now we are only building what black has given the bids on that visibility. So we're not expecting any volatility because if you recall earlier the volatility specifically and what continues to happen from the travel vertical.

And anyway.

It builds on the mini.

And most of them had been work lined up you on cost.

Yeah, So just to add a little bit for that Mike I think when you look at the cadence across the last 3 quarters of the year.

Good healthy quarter over quarter growth across the last 3 quarters and kind of nothing that we see that debt.

You unique or 1 time and those numbers today, obviously, our visibility for next quarters better than it is for Q4 at this point in time, so hopefully things continue to firm up as we move across the year, but let's see.

The analogy as it sits today and it's pretty pretty even both from a from a top line expansion as well as from a margin expansion.

The 1 thing I do want to provide a little bit of a caveat on it relative to Q2 earnings.

While we do expect revenue to grow and we expect margins to expand a little bit and Q2. We also know that there were some 1 timers in terms of interest income and in terms of tax benefit that will not be recurring and Q2 and so so we do view Q2 at this point and time is having relatively flattish earnings.

That's helpful. Thank you.

Yeah.

Thank you Barak you. Our next question comes from Puneet Jain with Jpmorgan. Your line is open.

Hey, Thanks for taking my question.

Okay. So you talked about hybrid and EV.

Martin going forward.

And last quarter.

Will there be opportunities from them.

And they reduced media spend and not paid for.

And then back model and can you talk about timing and margin implications for that.

Sure so putting it on stopped and then we will have growth on top of liver about there. So the first thing I must say is that I think the greatest comfort debt.

We have given to our clients as well as a number of prospects is the fact that we can operate in any model as opposed to the traditional model that everyone came for the office and operated and we were able to demonstrate how quickly and efficiently we were able to move.

Bulk of on us.

For all of our teams back into the 2 homes and still deliver a great experience.

So were all up for clients.

And I actually think as a result of this it will actually be very satisfactory.

To WNS in terms of the revenue line I think a lot of processes that clients traditionally have kept in the basketball cash are kept.

Closer to themselves or the head office and they are far more comfortable with hand them over to US now in terms of the hybrid delivery model and that you spoke about.

And what we are doing is working with governments across the globe to make sure that some of the relaxation that day.

Provided during the pandemic or made permanent.

Now as long as the pandemic remains and as long as these relaxations are available we are extremely comfortable operating on a model, which is predominantly driven from home, but I wanted to mention 1 thing that first and foremost at this point and time, India has Inc has relapsed after the panel.

They have not made final decisions on what's the model will be in terms of the OSP energy as well as in terms of labor laws from us.

Governance and point of view, we will have to wait and see how that actually works out before we make final calls on this second thing is because we manage very mission critical kind of work now and you've been different for from a different companies, we believe that our need to bring people back.

Back into the office are thought of as possible for <unk>.

Why is it normalcy and resumes and to keep building on the culture of the company as well as the innovation culture of this company is critical and that can be done predominantly when people are working in the office. So I would say that maybe at this point and time intercept assumed debt 20% to 30%.

Sure.

And we look from home divest over a period of time, we'll come back for the office in terms of non free but the company is prepared to work in.

Any model and has demonstrated this very well for clients and even as we speak all through this pandemic, we have kept rationalizing cost and <unk>.

And just focusing on our infrastructure cost as relative.

Tightening our belt in terms of new facilities and things like that so that is something that we'll always continue.

Understood.

And can you also talk about.

And your exposure to high tech or ecommerce clients. That's good that's good.

Could you share what percentage of them missed and sometimes clients and how much did do it.

Sure, let me take debt Puneet.

I think we've spoken in the past about some of the progress that we've made along the lines of acquiring these clients and growing these relationships I think we continue to do that and we continue to see that we've got a really good reputation and in the high Tech space and.

In terms of our ability to connect with these types of clients.

And you looked at last fiscal year, we were at 17% of overall company revenue that came from.

Digital Disruptors are companies that were born born digital if you will and we.

We continue to see that number in terms of what we had here on the fiscal first quarter. So.

Both in terms of the names and the logos that we've been able to add and and the growth and the expansion within those what we're very pleased with our overall reputation and the space and more importantly, how our reputation in and the Internet space helps us help our traditional brick and mortar clients compete with.

The digital Disrupters, because that's really what they're looking for that that's what's driving transformation and digitization and the need to be more competitive with these types of these types of clients and we certainly believe that we have a unique perspective to offer clients.

I would suggest.

Dave mentioned beyond the traditional high Tech companies, we have been working very strongly over the past 2 to 3 years with some of the largest index in short text and health Tech across the board, which have been extremely heavily funded.

Understood. Thanks for the classification.

Thanks Puneet.

Thanks for my next question.

Our next question comes from Vincent Colicchio with Barrington. Your line is open.

Yes.

I'm curious what has to happen to hit the high end of the revenue outlook for the year.

So you know I.

Thank you.

The prepared remarks is it Ted.

1 the short term revenue is not baked into Linda Linda just based on the visibility what we average is 95%.

And that's again.

Travel again, the client has given comes on reduced commitment at this stage and you know as if that looks like this opens up.

So there's a good opportunity for 92.

And to really increase the revenue as well as some of the quick sales conversion and <unk>.

Not bullish on deal what <unk> was talking about can definitely help us for driving by the high end on the guidance.

Thanks for that and curious is any of the current unrest and South Africa, having any impact on your operations or demand trends.

No I think I'll take that.

Yes, so I think what.

The unrest obviously disturbing on.

We're really sorry for all the people who are impacted as it is.

Sales of this at this point and time, we've not actually being impacted from an operations point of view, but we have 1.

And the situation very very closely.

And I'll just add as geisha said, specifically because work from home, what we are driving across the globe and.

And then my daughter pipe us and other people and I'm working from home and that has really helped.

The operation and not to get impacted even in this.

And to what incident.

Thanks for answering my questions good quarter guys.

Thanks, Vince Thank you rich.

Our next question comes from Dave Koning with Baird. Your line is open.

Yeah, Hey, guys. Thanks nice job.

I guess my first question.

The banking the banking vertical for a long time was kind of running 9 and $10 million a quarter and then the last couple of quarters kind of ran through 11, and 13 and now it sounds like 15, so I.

I guess, maybe what's happening there is that 1 big client. That's just all of a sudden ramping and maybe is there a lot of ramp still to come or are we kind of at a $15 million kind of level now for a while.

What we are seeing this across the board multiple clients starting to ramp up.

And this is especially because of our strategy about a couple of years ago to focus on on the Fintech and the regionals and the Super Regional players who are starting to expand quite significantly for us. So almost every client that we won and lost.

2 years are seeing significant growth.

And I think this is this is an area where the strategy to focus on the parts of the banking financial services space that we're significantly underpenetrated or that we're evolving and nature really has paid off for us and obviously the very large global banks.

Pick partners and hip outsource quite a bit over the years and that's an area, where we would struggle to make an impact but to <unk> point. When you look at regional banking when you look at Super Regional banking when you look at Fintech and these are all areas that had been under serviced are emerging and certainly a place where we think we can play a meaningful role and where.

Moving to see that traction within banking and financial services vertical.

Gotcha, Okay. Thank you and then and then on the work for US I think it's interesting and the last couple of quarters.

A lot of times you hear about it's hard to find people there's higher attrition.

And your attrition and back to kind of normal levels, but you've hired actually faster than revenue growth I would imagine that's in preparation this quarter, 7% sequential growth. It's the biggest head count growth in and years right and.

So I guess, maybe that's a question and then I guess part of it too it's the Philippines and yeah.

In particular, the Philippines is a huge place India normally you know that was good but the rest of the region didn't grow that much maybe maybe just talk about region by region why certain ones that have grown a ton others not quite as much.

Yes.

And like you said in terms of this quarter, we have had to hire quite a quite a large workforce. This is in anticipation for.

For the ramps that are happening with other travel clients and frankly confirmed volumes that we have received which requires about a 6 to 12 weeks in terms of hiring and training so that the anticipated ramp ups that we're seeing and the Philippines.

<unk> chunk of the Philippines growth is centered around our OTC clients and.

And some of our financial services and fuel for healthcare clients and Thats, all expanding and that particular region.

So is the case within our India head count that we see a growth happening from our analytics side of the business. The digital services that we need to provide to multitude of our clients and our financial services clients.

Again, we have not seen any untoward pressure and in terms of our Hyatt and capabilities that are few selective skills.

And all of it and demand across our clusters across the board depending on the macroeconomic conditions. So we have seen the largest growth happening in these 2 regions and the other regions and kind of static at the moment.

And we are seeing incremental growth.

And just just to follow up on that Steve I think as cash.

And I've mentioned in his prepared remarks.

And the massive hiring this past quarter was really for 3 reasons. Some of it was and preparation for the growth and the Otas space, which got them alluded to some of it was for the new logos and the expansions that have taken place over the last couple of quarters, but we also had hiring and India from a from a COVID-19 disaster recovery business continuity.

He perspective, because that's where we saw the big impact from the Spike. So we had to hire additional resources just to make sure we were able to deliver for our clients and when we carried some of that cost as well, so where they're really 3 drivers for that for that.

Massive head count Spike and now now we certainly hope to leverage that.

As our top line growth.

Gotcha.

And I just wanted to add 1 perspective here and.

It is on the fact that you've complimented us on the large scale hiring and maybe once again demonstrates how talent looks at WNS.

And as a great company to work for as a company, where the debt unique experiences and.

And in a market, where just quite fast and where there is a war for talent. The fact that they appreciate it. This is a learning company for them. So actually I really thank you for the question because and once again demonstrates that all the investments that we've made on our business and particularly around HR and talent.

And is resonating extremely well.

Workforce ophthalmology.

Great to see that thank you.

Thanks, Dave Thanks for that.

As a reminder to ask a question you will need to press star 1 of your telephone. Our next question comes from Ashwin <unk> with Citi. Your line is open.

Thank you.

Good day to day off and speak to you on again.

I think let me start with.

You commented a few times on the call on that.

Visibility is based on minimum commitments.

And is.

It is not different than how you've done it before but the question really is has the tendency from the client side to exceed minimum commitments coming out of the pandemic here.

And and media and make good question.

And it's.

With more of your growth coming outside your top 20 is that sort of it.

Different.

Factor on our behavior that we should expect for.

From from maybe a different client base.

So.

I'll take that.

So for right now other than on cloud.

Clients as we mentioned there have been a little.

And if it comes out of revenue because they don't have seized up and visibility.

Beyond the volume.

We're not seeing any conservative bend.

And then from the client unless and until it is contractual because you don't know does debt.

Is it gives us on Mcmahon and Daniel.

That much.

Volume other.

I believe and has always done right. So that is ready and become conservative but other than that we've not seen any particular pattern other different behavior from a client perspective.

<unk>.

And you provided the government went and that is that is and if you recall and the last call, we decided that and all this.

<unk>.

Productivity and the ramp is.

It was higher than the usual watch and despite that we have for Whiting and 11%.

At the midpoint from on constant currency growth perspective based on that visibility.

And I do think though.

And we have seen last year, we were talking about how what what's happening with clients we are forecasting declining volume.

And as a result.

What was happening is they were beating those numbers.

And the fact that they were being conservative and didn't want to get stuck with excess resource for excess cost.

That's clearly moved to a situation that when you look at the hiring patterns to where not only other forecasting flat volume, but they are they're forecasting increasing volume and the reality is it's not a forecast for them. They need those resources today, the problem that they have and they didn't forecast debt or commit to it 3 months ago 6 months ago.

So now we've got to go through the whole fulfillment cycle to make sure that they are able to get those resources.

And if they do continue to moving that direction, there's certainly upside going forward. The question will be how quickly can we hire and train to that accelerating volume so.

Some of this is what's going on with respect to the commitments, but you have to understand and the back side of it which is once a clients willing to commit to that how quickly can WNS. Then go find those resources and train those resources, so that they're ready to deliver for clients.

Understood understood and.

And then second question is on cash and use of cash.

Was there anything 1 time driving the free cash flow kind of in the quarter.

The Hyatt and been jam.

Okay.

Is there something changing as it relates to contact you and terms or is it more timing related and the use of cash part of it is.

The EU repurchase $85 million.

And that.

It's the biggest 1 day do you ever done and a quarter and your.

History.

On.

Yes.

Again.

And then your opportunistic later on you.

And that should we expect a step up.

Hum.

So we don't specifically Butler, just average quarter, 1 and all.

That's typically a low cash <unk>.

Generation quarters, because we have on bonus payout.

B M of wage inflation and you know what.

And as well and with the expansion and the growth I'll, let him answer simple.

And I'll have gone up a little bit including some.

On the contract renewals, what we had lost contract renewed and they will just on 1 time change from a billing perspective.

A couple of days, we just bought into the next month.

The 1 time impact might be headed copper, 1 and from a utilization of the cash perspective, yes, you know.

Share buyback program, but we are completed with $35 million in the quarter.

And as well as our inorganic plans are in place we continuously.

And I'll keep on actively pursuing other opportunities and the prospect for almost strategy gave you a perspective with charter and they are tuck in acquisitions on the capability side.

Just a bargain.

Right.

Diamond price.

That would be the utilization of the cash as we move forward from.

And any growth.

And perspective.

Got it thank you guys.

Thanks Ashwin.

Thank you at this time, we have no further questions in queue. This will conclude today's call. Thank you for your participation you may now disconnect.

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