Q2 2024 WNS (Holdings) Ltd Earnings Call

Okay.

Good morning, ladies and gentlemen, and welcome to the WNS Holdings fiscal 'twenty 'twenty four second quarter earnings Conference call. At this time all participants are in a listen only mode. After management's prepared remarks, we will conduct a question and answer session and instructions for how to ask a question will follow at that time.

Speaker 1: Good morning ladies and gentlemen and welcome to the WNS Holdings fiscal 2024 second quarter earnings conference.

Speaker 1: At this time, all participants are on a listen-only mode. After management's prepared remarks, we will conduct a question and answer session, and instructions for how to ask a question will fly at that time. As a reminder, this call is being recorded for replay.

As a reminder, this call is being recorded for replay purposes.

Now I would like to turn the call over to David Mackey, WNS Executive Vice President of Finance and head of Investor Relations David.

Thank you and welcome to our fiscal 2024 second quarter earnings call with me today on the call I have wns's, CEO ketchup, Marrakech and Wns's CFO Sanjay Puria.

Speaker 2: Thank you and welcome to our fiscal 2024 second quarter earnings call. With me today on the call, I have WNS's CEO Keshav Muragesh and WNS's CFO Sanjay Puri.

Speaker 2: Press release detailing our financial results was issued earlier.

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 Dot com.

Speaker 2: This release is also available on the investor relations section of our website at www.wns.com.

Today's remarks will focus on our results for the fiscal second quarter ended September 32023.

Speaker 2: Today's remarks will focus on the results for the fiscal second quarter ended September 30th, 2023.

Speaker 2: Some of the matters that will be discussed on today's call are forward looking. Please keep in mind that these forward looking statements are subject to known and unknown risks and uncertainties. It could cause actual results to differ materially from those expressed or implied by such a particular scenario.

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

Speaker 2: such risks and uncertainties include, but are not limited to, those factors set forth in the company's Form 20F. This document is also a...

Such risks and uncertainties include but are not limited to those factors set forth in the Companys form 20-F.

This document is also available on the company's website.

Speaker 2: During today's call, management will reference certain non-GAAP financial measures, which we believe provide useful information for...

During today's call management will reference certain non-GAAP financial measures, which we believe provide useful information for investors reconciliations of these non-GAAP financial measures to GAAP results can be found in the press release issued earlier today.

Speaker 2: Reconciliations of these non-GAAP financial measures to GAAP results can be found in the press release issued earlier today.

Speaker 2: Some of the non-GAAP financial measures management will discuss are defined as follows. Net revenue is defined as revenue.

Some of the non-GAAP financial measures management will discuss are defined as follows net.

Net revenue is defined as revenue less repair payments.

Speaker 2: Adjusted operating margin is defined as operating margin excluding amortization of intangible assets, share-based compensation, acquisition related expenses or benefits, and goodwill impairments.

Adjusted operating margin is defined as operating margin, excluding amortization of intangible assets share based compensation.

Acquisition related expenses or benefits and goodwill impairment.

Adjusted net income or Eni is defined as profit excluding amortization of intangible assets share based compensation acquisition related expenses or benefits goodwill impairment and all associated taxes.

Speaker 2: Adjusted net income, or ANI, is defined as profit excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits, goodwill impairment, and all associated taxes.

These terms will be used throughout the call.

Speaker 2: I would now like to turn the call over to WNSF CEO , Kasia Murgen. Kasia?

I would now like to turn the call over to WNS CEO <unk> <unk>.

Sure.

Thank you David good morning, everyone.

Speaker 3: In the second quarter, WNS delivered healthy financial results in the face of a challenging macro environment and continued to make progress on our AI and generative AI initiatives.

In the second quarter WNS delivered healthy financial results in the face of a challenging macro environment.

We continue to make progress on our AI agenda initiatives.

Speaker 3: The company posted Q2 net revenue of $325 million, representing a year-over-year increase of 12.3% on a reported basis and 11% constant currency.

The company posted Q2 net revenue of $325 million, representing a year over year increase of 12, 3% on a reported basis and 11% constant currency.

Speaker 3: Sequentially, net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency basis after adjusting for effect.

Sequentially net revenue increased by two 4% on a reported basis and two 1% on a constant currency basis after adjusting for FX.

In the quarter.

Speaker 3: In the quarter, WNS added seven new logos and expanded 27 existing relationships.

WNS added seven new logos and expanded 27 existing relationships.

Speaker 3: The company also posted adjusted operating margins of more than 22% and delivered year-over-year growth in adjusted EPS of 16%.

<unk> also posted adjusted operating margins of more than 22% and delivered year over year growth and adjusted EPS of 16%.

While second quarter results were solid.

Speaker 3: While second quarter results were solid, we do expect increasing revenue pressure in the second half of fiscal 2024 driven by further reductions in volume commitments from certain clients.

We do expect increasing the revenue pressure in the second half of fiscal 'twenty 'twenty four.

Driven by further reductions in volume commitments from certain times slowing demand for project based work.

Speaker 3: slowing demand for project-based work, and delays in the ramp of our large insurance captive.

And delays in the ramp up of our large insurance captive.

Speaker 3: Overall, Q2 volumes remained fairly resilient. However, we did see some erosion in September and have received additional reductions in volume commitments for Q3 and Q4 from certain clients.

Overall Q2 volumes remained fairly resilient.

However, we did see some erosion in September and have received additional reductions in volume commitments.

Q3, and Q4 from certain clients.

Speaker 3: These reductions are most evident in the travel vertical and are driven by both macro trends and some client-specific dynamics.

These reductions are most evident in the travel vertical and are driven by both macro trends.

And some client specific dynamics.

We have also seen a modest deterioration in demand for certain types of projects.

Speaker 3: We've also seen a modest deterioration in demand for certain types of projects.

Unknown Executive: Good morning, ladies and gentlemen, and welcome to the WNS Holdings fiscal 2024 2nd quarter earnings conference call. At this time, all participants are in a listen-only mode. After management prepared remarks, we will conduct a question-and-answer session, and instructions for how to ask a question will fall at that time. As a reminder, this call is being recorded for replay purposes.

Speaker 3: This is impacting our analytics and procurement businesses, including a deceleration in growth for our newly acquired entities.

This is impacting our analytics and procurement businesses.

Including a deceleration in growth for our newly acquired entities.

Speaker 3: Additionally, second half visibility has also been reduced to reflect client delays in the ramp of our large insurance carve-out.

Additionally, second half visibility has also been reduced.

Reflect client delays in the ramp up of our large insurance skybox.

Speaker 3: This avenue, which is contractually committed over the life of the contract, is now expected to show meaningful ramps in both 2025 and fiscal 26.

David Mackey: Now, I would like to send a call over to David Mackey, WNS Executive Vice President of Finance and Head of Investulations. Thank you, and welcome to our fiscal 2024 2nd quarter earnings call. With me today on the call, I have WNS CEO, Keshav Murugesh, and WNS CFO Sanjay Puria. The 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.wns.co.

This revenue, which is contractually committed over the life of the contract.

It is now expected to show meaningful ramps in both 2025 and fiscal 2006.

Speaker 3: Despite these short-term macro challenges, demand for our services remains strong, and the demand to long-term outlook is excellent.

Despite these short term macro challenges demand for our services remains strong and the demand to long term outlook is excellent.

Speaker 3: Our new business pipeline continues to be extremely healthy, driven by clients' need to digitize and automate their processes as well as reduce costs.

Our new business pipeline continues to be extremely healthy.

By clients need to digitize and automate their processes as well as various cost.

David Mackey: Today's remarks will focus on the results for the fiscal 2nd quarter ended September 30, 2023. Some of the matters that will be discussed on today's call are forward-looking. Please keep in mind that 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 in the company's form 20F.

Speaker 3: The pipeline now includes more large deal opportunities than ever, which are spread across verticals, services as well as geography.

Pipeline now includes more large deal opportunities than ever which are spread across verticals services as well as geographies.

Speaker 3: We also continue to see solid deal flow and client decision making with both new client additions and existing client expansions remaining robust.

We also continue to see solid deal flow and client decision, making with Boston, new client additions and existing client expansions remaining robust.

I would also like to reiterate that.

Speaker 3: I would also like to reiterate that the pressure we are facing is entirely related to macro challenges and client specific issues and not impacts from AI or generative AI.

The pressure we are facing is entirely related to macro challenges and client specific issues and not impact from our.

David Mackey: This document is also available on the company's website. During today's call, management will refer in certain non-gap financial measures, which we believe provide useful information for investors. Reconciliation of these non-gap financial measures to gap results can be found in the press release issued earlier today. Some of the non-gap 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, acquisition related expenses or benefits and goodwill impairment. Adjusted net income or ANI is defined as profit excluding amortization of intangible assets, share-based compensation, acquisition related expenses or benefits, goodwill impairment, and all associated taxes. These terms will be used throughout the call.

Our agenda.

Speaker 3: We currently anticipate that the outsized revenue headwinds of 18% that we are facing in fiscal 2024, including the ramp down of a large healthcare process, the transition of a top procurement client from onsite to offshore and slowdowns in both volume and discretionary projects should present an accelerated growth opportunity for WNES in fiscal 2025.

We currently anticipate that the outsized revenue headwinds of 18% that we are facing in fiscal 2024.

Including the ramp down of a large healthcare process the transition of adult procurement client from onsite to offshore and slowdowns in both volume and discretionary projects should present, an accelerated growth opportunity for WNS in fiscal 2025.

I would now like to provide you with an update on our progress.

Speaker 3: I would now like to provide you with an update on our progress with AI as well as generative AI.

As well as gender.

First let me begin by saying that we have seen nothing to date with changes our belief that AI and Jenny.

Speaker 3: First, let me begin by saying that we have seen nothing to date, which changes our belief that AI and Genie are tools that are most impactful when integrated as part of a broader end-to-end digital solution.

Tools that are most impactful when integrated as part of a broader end to end digital solution.

Keshav Murugesh: I would now like to turn the call over to WNF CEO, Keshav Murge. Thank you, David.

Speaker 3: Every use case WNS is developing requires deep domain expertise, process knowledge, analytics capabilities, and human intelligence to leverage these technologies and deliver business outcomes.

Every use case wns's developing requires deep domain expertise process knowledge and analytics capabilities and human intelligence to leverage these technologies and deliver business outcomes.

Keshav Murugesh: Good morning, everyone. In the second quarter, WNF delivered healthy financial results in the face of a challenging macro environment and continued to make progress on our AI and generative AI initiators. The company posted Q2 net revenue of $325 million representing a year-over-year increase of 12.3% on a reported basis and 11% constant currency. Sequentially, net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency basis after adjusting for effect.

Speaker 3: In addition, co-creation remains foundational to how we collaborate with our clients to identify opportunities, build and then deploy these solutions.

In addition, co creation remains foundational to how we collaborate with our clients to identify opportunities build and then deploy these solutions.

Speaker 3: Since last quarter, we have formalized strategic partnerships with industry leaders, including Microsoft Azure, OpenAI, AWS, and Google, and are working closely with other partners like Appian, Imagia, Blackline, and Nice, who are building Gen AI into their product.

Since last quarter, we have formalized strategic partnerships with industry leaders.

<unk>, Microsoft Azure opening.

AWS and Google.

Working closely with other partners like RPM imagine Black line and nice what building journey into their products.

Keshav Murugesh: In the quarter, WNS added seven new logos and expanded 27 existing relationships. The company also posted adjusted operating margins of more than 22% and delivered year-over-year growth in adjusted EPS of 16%. While second-quarter results were solid, we do expect increasing revenue pressure in the second half of fiscal 2024, driven by further reductions in volume commitments from certain times, slowing demand for project-based work and delays in the ramp of our large insurance captive.

Speaker 3: We have also rolled out company-wide AI and Gen AI training programs, which today include 25 unique courses across four tracks designed to promote awareness, evangelism, expertise and leadership.

We have also rolled out companywide AI engine AI training programs, which today include 25 unique courses across four tracks designed to promote awareness evangelism expertise and leadership.

Speaker 3: WNS has partnered with industry leaders such as Google, MindMap Consulting, KPMG, LinkedIn Learning and Oxford University to create these programs.

WNS has partnered with industry leaders such as Google.

Mac consulting KPMG, Linkedin learning and Oxford University to create these programs as a result of our focused efforts. We have now expanded the number of use cases to more than 90.

Speaker 3: As a result of our focused efforts, we have now expanded the number of use cases to more than 90, with approximately 20 currently built and ready for deployment, and an additional seven of our proprietary digital assets, which now have Gen AI embedded.

With approximately 20 currently built and ready for deployment and an additional seven of our proprietary digital assets, which now have.

Keshav Murugesh: Overall, Q2 volumes remained fairly resilient. However, we did see some erosion in September and have received additional reductions in volume commitments for Q3 and Q4 from certain clients. These reductions are most evident in the travel vertical and are driven by both macro trends and some client-specific dynamics. We've also seen a modest deterioration in demand for certain types of projects. This is impacting our analytics and procurement businesses, including a deceleration in growth for our newly acquired entities.

Embedded.

Our active client conversations have doubled to more than 40.

Speaker 3: Our active client conversations have doubled to more than 40.

Speaker 3: with over 10 of these in advanced discussions, and three, already committed to Gen AI implementation with us.

With over 10 of these in advanced discussions and three already committed to journey II implementation with us and.

Speaker 3: And while we continue to make solid progress across the pipeline of activities, it is important to note that we are seeing many clients wanting to proceed carefully on Gen AI initiatives as they move towards the implementation phase.

While we continue to make solid progress across the pipeline of activities. It is important to note that we are seeing many clients wanting to proceed carefully on Jennie O initiatives as they move towards the implementation phase.

This is the result of a wide range of issues and risks, including build and run costs.

Speaker 3: This is the result of a wide range of issues and risks, including build and run costs.

Keshav Murugesh: Additionally, second half visibility has also been reduced to reflect client delays in the ramp of our large insurance carve-out. This revenue, which is contractually committed over the life of the contract, is now expected to show meaningful ramps in both 2025 and fiscal 26. Despite these short-term macro challenges, demand for our services remains strong and the demand to long-term outlook is excellent. Our new business pipeline continues to be extremely healthy, driven by clients' need to digitize and automate their processes as well as reduce cost.

Speaker 3: Data privacy concerns, legal and regulatory issues, and the inherent potential for poor data quality and false results.

Data privacy concerns legal and regulatory issues and the inherent potential for broad data quality and false results.

Speaker 3: With that being said, we now have two examples of in-production solutions. We would like, which we would like to share with you today.

With that being said, we now have two examples of in production solutions, we would like which we would like to share with you today.

Speaker 3: In August , the SmartCube launched a new release of Amplify Pro, the company's on-demand digital procurement intelligence platform.

In August <unk> launched a new release of amplify pro the companies on demand digital procurement intelligence platform.

Speaker 3: The latest version is powered by Gen AI and a custom natural language query framework to provide enhanced search capabilities, expanded category coverage, and improved user experience.

The latest version is powered by journey II and custom natural language <unk> framework to provide enhanced search capabilities expanded category coverage and improved user experience.

Keshav Murugesh: The pipeline now includes more large-deal opportunities than ever, which are spread across verticals, services, as well as geographies. We also continue to see solid deal flow and client decision-making with both new client additions and existing client expansions remaining robust. I would also like to reiterate that the pressure we are facing is entirely related to macro challenges and client-specific issues and not impacts from AI or generative AI. We currently anticipate that the outsized revenue headwinds of 18% that we are facing in fiscal 2024, including the ramp down of a large healthcare process, the transition of a top procurement client from onsite to offshore and slowdowns in both volume and discretionary projects should present an accelerated growth opportunities for WNS in fiscal 2025.

Speaker 3: The upgraded platform leverages GPT 3.5 models, which have been specifically trained for procurement professionals based on proprietary content curated by the SmartCube's category and commodity specialists.

The upgraded platform Leverages GPT $3 five models, which have been specifically trained for procurement professional professionals based on proprietary content.

By the smart Gibbs category and commodity specialists.

Speaker 3: The model also provides creativity of answers to source data and area where many current GPT models often fall short.

The model also provides traceability of answers to source data and area, where many current GPT models often fall short.

Speaker 3: The enhanced capabilities are currently being used by more than 80 clients who subscribe to Amplify Pro's unlimited paid tier model. And clearly feedback in the early days has been extremely positive.

The enhanced capabilities are currently being used by more than 80 clients, who subscribed to amplify bros. Unlimited bid tier model.

And clearly.

Feedback in the early days has been extremely positive.

Speaker 3: We expect these new enhancements along with future upgrades to the platform will now help drive increases in paid subscription revenue.

We expect these new enhancements along with future upgrades to the platform will now help drive increases in paid subscription revenue.

Speaker 3: In addition, W&S has also recently implemented a new recovery as a service solution for a large client in the insurance vertical. This proprietary offering combines AI models and a team of claims specialists with deep insurance expertise to identify and recover property claims costs, which should have been paid by third parties.

In addition, WNS has also recently implemented a new recovery as a service solution for a large client in the insurance vertical.

Keshav Murugesh: I would now like to provide you with an update on our progress with AI as well as generative AI. First, let me begin by saying that we have seen nothing to date which changes our belief that AI and Genie are tools that are most impactful when integrated as part of a broader end-to-end digital solution. Every use case, WNS is developing, requires deep domain expertise, process knowledge, analytics capabilities, and human intelligence to leverage these technologies and deliver business outcomes.

This proprietary offering combines AI models and a team of claims specialists with deep insurance expertise to identify and recover property claims costs.

It should have been paid by third parties.

Speaker 3: WNS has engineered, cleansed and structured the clients' historical data, built and trained the models, integrated them into the clients' cloud technology environment, and started delivering immediate results. This solution was identified by the WNS Digital Consulting team using our co-creation approach and represents a completely new offering for the industry, for the insurance industry and our clients.

WNS has engineered cleansed and structure the client's historical data.

And trend the models integrated them into the clients' cloud technology environment and started delivering immediate results.

This solution was identified by the WNS digital consulting team.

Using our co creation approach and represents a completely new offering for the industry for the insurance industry and our clients.

Keshav Murugesh: In addition, co-creation remains foundational to how we collaborate with our clients to identify opportunities, build, and then deploy these solutions. Since last quarter, we have formalized strategic partnerships with industry leaders, including Microsoft, Azure, OpenAI, AWS, and Google, and are working closely with other partners like Appian, Imagia, Blackline, and Knife who are building Genie into their products. We have also rolled out company-wide AI and Genie AI training programs which today include 25 unique courses across four tracks designed to promote awareness, evangelism, expertise, and leadership.

Claims recoveries are a key area of focus for P&C insurance clients and the WNS solution is able to meaningfully reduce cost leakage when compared to current approaches.

Speaker 3: Claims recoveries are a key area of focus for PNC insurance clients, and the W&S solution is able to meaningfully reduce cost leakage when compared to current approaches.

The offering has been priced in an outcome based model, where WNS receives a person page of the amounts recovered for the client.

Speaker 3: The offering has been priced in an outcome-based model, where WNAS receives a percentage of the amounts recovered for the client.

Speaker 3: This results-oriented approach ensures that we are rewarded for performance and that both WNS and the client share in the value delivered.

This results oriented approach ensures that we are rewarded for performance and that both WNS and the client share in the value delivered.

Speaker 3: In summary, while the macroeconomic environment is creating some challenges for WNS in the back half of this year, the company continues to expect double-digit revenue growth and is best for leading stable margins.

In summary, while the macroeconomic.

<unk> is creating some challenges for WNS in the back half of this year.

The company continues to expect double digit revenue growth and that's three leading stable margins.

Keshav Murugesh: WNS has partnered with industry leaders such as Google, Mindmap, Consulting, KPMG, LinkedIn Learning, and Oxford University to create these programs. As a result of our focused efforts, we have now expanded the number of use cases to more than 90, with approximately 20 currently built and ready for deployment, and an additional seven of our appropriately digital assets which now have Genie AI embedded. Our active client conversations have doubled to more than 40, with over 10 of these in advanced discussions and three already committed to Genie AI implementation with us.

Speaker 3: We also remain optimistic that the company's healthy pipeline strong underlying business momentum and reducing headwinds sets the company up for accelerated growth in fiscal 2025.

We also remain optimistic that the company's healthy pipeline strong underlying business momentum.

And reducing headwinds sets the company up for accelerated growth in fiscal 2025.

In addition, we have seen nothing that changes our belief that AI and Jenny.

Speaker 3: In addition, we have seen nothing that changes our beliefs, that AI and Gen AI represent more opportunity than risk for our business.

Represent more opportunity than risk for our business.

Speaker 3: By actively embracing this technology shift, WNS remains well positioned to deliver meaningful business outcomes and help our clients create value.

Actively embracing this technology shift WNS remains well positioned to deliver meaningful business outcomes and help our clients create value.

Speaker 3: I would now like to turn the call over to our CFO Sanjay Puria to further discuss our results as well as the outlook. Sanjay?

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

Keshav Murugesh: And while we continue to make solid progress across the pipeline of activities, it is important to note that we are seeing many clients wanting to proceed carefully on Genie AI initiatives as they move towards the implementation phase. This is the result of a wide range of issues and risks including build and run costs, data privacy concerns, legal and regulatory issues, and the inherent potential for poor data quality and false results.

Yes.

Thank you Keisha.

Speaker 3: In the fiscal second quarter, Dublunus net revenue came in at $325 million of 12.3% from $289.3 million posted in the same quarter of last year and of 11% on a constant currency base.

In the fiscal second quarter, Bob unit net revenue came in at $325 million up.

12, 3%.

Yeah.

$89 $3 million posted in the same quarter of last year.

11% on a constant currency basis.

Sequentially net revenue increased by $2 four plus they're on a reported basis and two acquired once let's say on a constant currency basis.

Speaker 3: Sequentially net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency

Keshav Murugesh: With that being said, we now have two examples of in-production solutions we would like which we would like to share with you today. In August, the Smart Cube launched a new release of Amplify Pro, the company's own demand digital procurement intelligence platform. The latest version is powered by Gen AI and a custom natural language query framework to provide enhanced search capabilities, expanded category coverage, and improved user experience. The model also provides traceability of answers to source data and area where many current GPT models often fall short.

Our sequential revenue growth was driven by broad based momentum with both new and existing clients and favorable currency movement.

Speaker 3: Our sequential revenue growth was driven by broad-based momentum with both new and existing lines and favorable guarantee movement. This benefit was partially upset by volume reduction with certain lines primarily in travel.

Keshav Murugesh: The enhanced capabilities are currently being used by more than 80 clients who subscribe to amplify pros unlimited paid tier model. And clearly feedback in the early days has been extremely positive. We expect these new enhancements along with future upgrades to the platform will now help drive increases in paid subscription revenue.

The benefit was partially offset by volume reduction with total decline primarily in travel.

Speaker 3: In the second quarter, WNF recorded half million dollars of high margin short term revenue.

In the second quarter diluted recorded $5 million of high margin short term revenue.

Speaker 3: Existed operating margin in quarter two was 22.4% as compared to 20.6% reported in the same quarter of fiscal 2023 and 21% last quarter.

Adjusted operating margin in quarter, two was 22, 4%.

Compared to 96% reported in the same quarter of fiscal 2023 and 21%.

Last quarter.

The other way.

Speaker 3: Year-over-year adjusted operating margin improvement was the result of operating leverage on higher volumes, improved productivity, lower SG&E expenses driven by provision reversals for performance incentives and bad debt, and favorable currency movement.

Adjusted operating margin improvement was the result of operating leverage on higher volumes improved productivity.

Lower SG&A expenses driven by provision reversal.

<unk> incentives and bad debt.

It was around a few moments.

Speaker 3: This benefits more than offset headwinds from annual wage increases and increased return to office costs.

These benefits more than offset Henry.

We will be doing crazy and increase our return to office costs.

Sequentially margin.

Speaker 3: Sequentially, margin increased as a result of higher volumes, improved productivity, and lower SG&A costs.

As a result of higher volumes improved productivity and lower SG&A costs.

This benefit was partially offset by wage increases and higher return to office costs.

Speaker 3: These benefits were partially offset by wage increases and higher return to office costs.

The company's net other income expense was $3 6 million of.

Speaker 3: The company's net other income expense was $3.6 million of net expense in the second quarter as compared to $.7 million of net expense reported in quarter two of fiscal 2023 and $2 million of net expense last quarter.

Net expense in the second quarter.

As compared to $1 7 million of net expense, we reported in quarter, two after 2023 and $2 million of net expense last quarter.

Keshav Murugesh: In addition, WNS has also recently implemented a new recovery as a service solution for a large client in the insurance vertical. This proprietary offering combines AI models and a team of claims specialists with deep insurance expertise to identify and recover property claims costs, which should have been paid by third parties. WNS has engineered, cleansed, and structured the client's historical data, built and trained the models, integrated them into the client's cloud technology environment, and started delivering immediate results.

Year over year net interest expense increased due to higher debt levels and lower cash balances driven by our acquisition and share repurchases.

Speaker 3: Year over year, net interest expense increased due to higher debt level and lower cash balances, driven viral acquisition and share reporters.

Speaker 4: Sequentially, the unfavorable variance was a result of higher debt levels and lower average cash balances and $0.8 million of interest income on tax refunds received in Q1.

Sequentially. The unfavorable variance was a result of higher debt levels and lower average cash balances and five 8 million of interest income on tax refund received in quarter one.

Speaker 4: In quarter two, the company also reversed $21.9 million provision for contingent consideration relating to our acquisition of Buram. The reversal is based on current growth expectations, which remain healthy but below targeted levels. This benefit has been excluded from our adjusted net income.

In quarter two the company also.

$21 9 million provision.

Provision for contingent consideration relating to our acquisition of <unk>.

But you must always be current.

Expectations.

It should remain healthy but below targeted levels.

Benefit has been excluded from our adjusted net income.

Keshav Murugesh: Claims recoveries are a key area of focus for PNC insurance clients and the WNS solution is able to meaningfully reduce cost leakage when compared to current approaches. The offering has been priced in an outcome based model where WNS receives a percentage of the amounts recovered for the client. This results oriented approach ensures that we are rewarded for performance and that both WNS and the client share in the value delivered.

Speaker 4: WNS effective tax rate for quarter 2 came in at 22% up from 19.8% last year and up from 21.8% last quarter.

WNS effective tax rate for quarter two came in at 22%.

From 19, 8% last year and up from 21, 8% last quarter.

Speaker 4: both year-over-year and sequentially, changes in our effective tax rate are largely the result of shifts in our geographical profit mix and changes to the mix of both delivered from tax incentive-fethics.

Both year over year and sequentially changes in our effective tax rate is largely the result of shifts in our geographical profit mix and changes with a mix of both delivered from tax incentive facilities.

The companys existing net income for quarter, two was $54 1 million.

Speaker 4: The company's existing net income for quarter 2 was $54.1 million compared with $47.2 million in the same quarter of fiscal 2023 and $50.6 million last quarter.

Compared with third party $7 2 million in the same quarter of fiscal 2023, and $50 6 million last quarter.

Keshav Murugesh: In summary, while the macroeconomic environment is creating some challenges for WNS in the back half of this year, the company continues to expect double digit revenue growth and especially leading stable margins. We also remain optimistic that the company is healthy by applying strong underlying business momentum and reducing headwinds such that the company up for accelerated growth in fiscal 2025. In addition, we have seen nothing that changes our belief that AI and Gen AI represent more opportunity than risk for our business. By actively embracing this technology shift, WNS remains well positioned to deliver meaningful outcomes and help our clients create value.

Speaker 4: Adjusted diluted earnings were $1.09 per share in quarter two, up 16% versus 94% in the second quarter of last year and up 8% from $1.01 last quarter.

Adjusted diluted earnings were $1, and 90% plus share in quarter, two up 16% versus 90% in the second quarter of last year and up 8% from $1 in Boston last pocket.

As of September 32000.

Speaker 4: As of September 30, 2023, WNS balances in cash and investments totaled $248.1 million and the company had $154.1 million in debt.

'twenty three WNS balances in cash and investments.

$248 1 million.

And the company had $164 $1 million index.

In quarter, two WNS generated $68 $5 million of cash from operating activities.

Speaker 4: In Q2, WNS generated $68.5 million of cash from operating activities, tinkered $15.7 million in capital expenditures, and made debt repayments of $38 million.

We incurred $15 7 million in capital expenditures.

Sanjay Puria: I would now like to turn the call over to our CFO, Sanjay Puria, to further discuss our results as well as the outlook. Sanjay? Thank you, I mean at $325 million of 12.3% from $289.3 million posted in the same quarter of last year and of 11% on a constant currency basis. Sequentially net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency basis. Our sequential revenue growth was driven by broad-based momentum with both new and existing clients and favorable currency movements.

And made debt repayments of $38 million.

DSO in the second quarter came in at 35 days.

Speaker 4: DSO in the 2nd quarter came in at 35 days as compared to 30 days reported in Q2 of last year and 34 days last quarter.

Compared to 30 days reported in quarter two of last year, and 44 days last quarter.

Speaker 4: In September , at our annual general meeting, WNS shareholders approved a 3.3 million share repurchase proposal.

In September at our annual General meeting WNS shareholders approved a three 3 million shares equals proposal.

Our board of Directors also approved a new repurchase program.

Speaker 4: Our board of directors had also approved a new repurchase program and the company expects to begin buying back shares during fiscal quarter 3.

The company expects to begin buying back shares during fiscal <unk>.

Speaker 4: With respect to our key operating metrics, total headcount at the end of quarter was 59,873. And our attrition rate in the second quarter was 30%.

With respect to our key operating metrics total head count at the end of quarter was 59873.

Attrition rate in the second quarter was 30%.

Speaker 4: As compared to 41% reported in order to last year and 32% in the previous quarter.

As compared to 41% reported in order to last year.

Sanjay Puria: This benefit was partially offset by volume reduction with certain clients, primarily in travel. In the second quarter, WNS recorded $1,500,000 of high margin short term revenue. Existed operating margin in quarter two was 22.4% as compared to 20.6% reported in the same quarter of fiscal 2023 and 21% last quarter. Year over year, adjusted operating margin improvement was the result of operating leverage on higher volumes, improved productivity, lower S.G.N, expenses driven by provision reversals for performance incentives and back debt and favorable currency movements.

2% in the previous quarter.

Speaker 4: We expect attrition to average the mid 30% is

We expect accretion to avid.

Yes.

Well Cynthia.

Speaker 4: but the rate would remain volatile quarter to quarter in the current labour environment.

But the rate will remain volatile.

Quarter to quarter in the current labor and wildlife.

Speaker 4: build speed capacity at the end of the quarter two increased to 39,775 and WNS continued our progress towards in-person operation, averaging 69% work from office during the quarter.

<unk> capacity at the end of the quarter to increase to 39775 and WNS continue our progress toward Infosys operation.

Averaging 69% was put them office during the quarter.

In our press release issued earlier today.

Speaker 4: In our press release issued earlier today, WNS provided our revised full year guidance for fiscal 2024.

<unk> provided our revised full year guidance for fiscal 2024.

Speaker 4: Based on the company's current visibility level, we expect net revenue to be in the range of $1,254,000,000 to $1,300,000,000, representing year-over-year growth of 8% to 12% on a both reported and constant currency basis.

Sanjay Puria: This benefits more than offset headwinds from annual wage increases and increase return to office costs. Sequentially margin increase as a result of higher volumes, improved productivity and lower S.G.N, costs. This benefits was partially offset by wage increases and higher return to office costs. The company's net other income expense was $3.6 million of net expense in the second quarter as compared to $0.7 million of net expense reported in quarter two of fiscal 2023 and $2 million of net expense last quarter.

Based on the company's current visibility levels, we expect net revenue to be in the range of $1 billion and $254 million to $1 billion and $300 million.

It is presently.

Audience growth of eight gross.

Gross let's say on a both reported and constant currency basis.

Topline projection assumes an average British pound to Euro dollar exchange rate of 123 for the remainder of the fiscal year.

Speaker 4: Topline Projection assumes an average British pound to US dollar exchange rate of 1.23 for the remainder of the fiscal year.

Speaker 4: And we currently have 97% visibility to the midpoint of the range.

And we currently have 97% visibility to the midpoint of the range.

Speaker 4: As Keshav mentioned, our revised revenue guidance includes additional headwinds from reduced volume projection from certain clients, lower project revenue expectations, and delays in the ramp of our large insurance capital.

<unk> mentioned, our revised revenue guidance includes.

Headwinds from reduced volume projections from certain clients.

Sanjay Puria: Year over year, net interest expense increased due to higher debt level and lower cash balances driven by acquisition and share repercussions. Sequentially, the unfavorable variance was a result of higher debt levels and lower average cash balances and $0.8 million of interest income on tax reference received in quarter one. In order to the company also reverse $21.9 million provision for contingent consideration relating to our acquisition of Hura. The reversal is based on current growth expectations which remain healthy but below targeted levels.

Lower project revenue expectation.

And the ramp of our not insurance gasket.

Speaker 4: As was the case last quarter, it is important to note that some of the volume reduction are based on client commitment which could prove to be conservative based on the focusing process.

As was the case last quarter. It is important to note there.

Some of the volume reduction RBS offline commitment, which could prove to be conservative based on the forecasting process.

Speaker 4: We have incorporated this lower estimate into our guidance consistent with the company's visibility based approach.

We have incorporated this lower estimate into our guidance.

Assistant with the company's visibility did afterwards.

Speaker 4: Fully adjusted net income for fiscal 2024 is expected to be in the range of 201 million dollars to 211 million dollars based on an 83 rupee to US dollar exchange rate for the remainder of fiscal 2024.

Full year adjusted net income.

2024.

It will be in the range of $201 million.

$211 million.

Just on an 83 rupee.

Sanjay Puria: This benefits has been excluded from our existing net income. WNS effective tax rates for quarter two, came in at 22% up from 19.8% last year and up from 21.8% last quarter Both year over year and sequentially changes in our effective tax rate are largely the result of shifts in our geographical profit mix and changes to the mix of both delivered from tax incentive facilities. The company's existing net income for quarter two was $54.1 million compared with $47.2 million in the same quarter of fiscal 2023 and $50.6 million last quarter.

Dollar exchange rate for the remainder of fiscal 2024.

This implied existed EPS of $4 <unk>.

Speaker 4: This implies, exhausted EPS of $4.04 to $4.24, assuming a diluted share count of approximately 49.8 million shares.

Before dollars and 24 things, assuming a diluted share count of approximately $49 8 million shares.

Speaker 4: With respect to capital expenditure, WNF currently expects our requirement for fiscal 2024 to be up to $60 million. We'll now open the call for questions. Operator.

With respect to capital expenditures WNS currently expects our requirement for fiscal 2024 will be up to $60 million will now open the call for questions operator.

Certainly ladies and gentlemen, if you wish to ask a question at this time. Please press star one one on your Touchtone telephone.

Speaker 1: Certainly, please sign gentlemen if you wish to ask a question at this time, please press star 11 on your touch on telephone. If your question has been answered or you wish to remove yourself from the queue, please press star 11 again. In the interest of time and to enable everyone on the call to

Your question has been answered or you wish you well yourself from the queue. Please press star one again, and then Joseph Tom and to enable everyone on the call to participate please limit your questions to one question and one follow up please standby, while we compile the Q&A roster.

Sanjay Puria: Adjusted deluded earnings were $1.9 per share in quarter two of 16% versus 94% in the second quarter of last year and up 8% from $1.1 last quarter. As of September 30, 2023, WNS balances in cash and investment totaled $248.1 million and the company had $164.1 million in debt. In quarter two, WNS generated $68.5 million of cash from operating activities incurred $15.7 million in capital expenditures and made debt repayments of $38 million.

Speaker 5: Please limit your questions to one question and one follow up. Please send by while we compile the K&A roster. And our first question.

And our first question coming from the line of.

Bryan Bergin with TD Cowen Your line is now open.

Yeah.

Hi, Thank you I wanted to start here with one of our own client behavior. So I am trying to understand what appears to be a hurry up and wait behavior from a lot of enterprises.

Speaker 6: I thank you. I wanted to start here with one around client behavior. So I'm trying to understand what appears to be a hurry up and weight behavior from a lot of enterprises. So you have clients.

Lyons with an urgency for cost reduction pipeline commentary is all positive and we all see solid deal signings across the services sector associated with productivity and reductions, but then these ramps seem to move more slowly than maybe the insurance captive as a company specific situations, but can you share your perspective on what seems to be key.

Speaker 6: with an urgency for cost reduction, pipeline commentary is all positive, and we all see solid deal signings across the services sector associated with productivity and reductions, but then these ramps seem to move more slowly, and maybe the insurance cap that is a company-specific situation, but can you share your perspective on what seems to be causing this disconnect, are there common threads that are not leading to more normal or faster ramps to achieve faster cost savings across the system?

Sanjay Puria: DSO in the second quarter came in at 35 days as compared to 30 days reported in quarter two of last year and 34 days last quarter. In September at our annual general meeting, WNS shareholders approved a 3.3 million share repurchase proposal. Our board of directors had also approved a new repurchase program and the company expects to begin buying back shares during fiscal quarter three. With respect to our key operating metrics, total headcount at the end of quarter was $59,873 and our attrition rate in the second quarter was 30%.

This disconnect their common threads that are that are not leading to more normal or faster ramps to effect to achieve SaaS for cost savings across these clients.

Sure Let me, let me take that Brian in the case of the Sanjay.

Speaker 2: Sure, let me take that Brian and Keisha of the Thunderjick and can chime in as well. I think when you look at our business for this year, the top line engine is really working well, right? I mean, we're, as Thunder mentioned in his prepared remarks, we're facing an 18% headwind in terms of lost revenues for this year, which is a combination of ramp downs and volume project related issues.

Simon as well, but I think when you look at our business for this year.

The topline engine is really working well right I mean, we're as Sanjay mentioned in his prepared remarks.

Facing an 18% headwind in terms of lost revenues for this year, which is a combination of ramp downs in volume project related issues.

Speaker 2: the productivity commitments that we give to clients, the fact that we walked into the year with unusual headwinds from a large healthcare client and from an internet client moving work offshore. So, these were all kind of...

The productivity commitments that we give the clients. The fact that we walked into the year with unusual headwinds from a from a large health care client from an internet clients moving work offshore. So these are all kind of.

Sanjay Puria: As compared to 41% reported in quarter two of last year and 32% in the previous quarter, we expect attrition to average the mid 30% is but the rate could remain volatile, quarter to quarter in the current labor environment. We'll see capacity at the end of the quarter two increased to 39,775 and WNS continued our progress towards in-person operation, averaging 69% work from office during the quarter.

Headwinds to the business.

Speaker 2: The 10% that we have guided to at the midpoint is actually.

The 10% that we have guided to at the midpoint is.

It actually shows a gross growth number of 28% for the year. So we believe that when you look at deal signing deal closures deal flow, especially as it relates to the cost reduction types of initiatives, we're not seeing slowdowns I think the issue with the insurance captive as they can.

Speaker 2: shows a gross growth number of 28% for the year. So we believe that when you look at deal signing, deal closures, deal flow, especially as it relates to the cost reduction types of initiatives, we're not seeing slowdowns. I think the issue with the insurance captive is a completely separate one and it is highly company specific.

Lately separate one and it is highly company specific.

Sanjay Puria: In our press release issued earlier today, WNS provided our revised full year guidance for fiscal 2024. Based on the company's current visibility levels, we expect net revenue to win the range of $1 billion and $254 million to $1 billion and $300 million. Representing year over year growth of 8% to 12% on a both reported and constant currency basis. Topline Projection assumes an average British pound to use dollar exchange rate of 1.23 for the remainder of the fiscal year.

Speaker 2: And it's structural in nature based on priorities within the organization. But again, with that initiative, the goal was to drive cost savings. Right? So, I think we're not seeing significant delays in cost reduction based activities where we've seen the delays and we're in the impact to this guidance.

And it's structural in nature based on priorities within the organization, but but again with that initiative. The goal was to drive cost savings right. So I think we're not seeing significant delays in cost reduction based activities, where we've seen the delays in <unk> and the impact to this guidance.

Speaker 2: versus last quarter is more on the volumes that are being pumped through the processes we own already and the discretionary projects or the shorter term project as they relate to the acquisitions that we've done and procurement business.

Versus last quarter is more on the volumes that are being pumped through the processes we own already.

And the discretionary projects are the shorter term project as they relate to the acquisitions that we've done in procurement business.

And I would just add to what Dave said.

Sanjay Puria: We currently have 97% visibility to the midpoint of the range. As Keshav mentioned, our revised revenue guidance includes additional headwind from reduced volume projection from certain clients, lower project revenue expectations and delays in the ramp of our large insurance capture. As was the case last quarter, it is important to note that some of the volume reductions are based on client commitment which could prove to be conservative based on the focusing process.

This slide volume forecast.

Speaker 4: believe is conservative because still water to what we have seen that those volumes, you know, in fact, have not reduced only in September , very specific to some clients in travel, what we saw some reduction, but broadly in place. And this reduction is also to be just consistent with our visibility based, right? We drive now, we have 97% visibility against 92% visibility last quarter, what we mentioned. And still this does not include the short term revenue where we do not have visibility. So, and this is also with a net net.

We believe it's conservative because third quarter too.

What we have seen that goes volumes.

In fact have not reduced only in September very specific to some clients in travel once we saw some reduction but broadly in place and this reduction is also moving just consistent with our visibility based we right now have 97% visibility against 92% visibility last quarter, what we mentioned.

Still this does not include the short term revenue, maybe you don't have visibility.

Sanjay Puria: We have incorporated this lower estimate into our guidance consistent with the company's visibility based approach. Full your Expected Net Income for fiscal 2024 is expected to be in the range of $201 million to $211 million based on an 83 rupee to US dollar exchange rate for the remainder of fiscal 2024. This implies Expected EPS of $4.04 to $4.24 assuming a diluted share sum of approximately $4.9.8 million share with respect to capital expenditure, WNS currently expects our requirement for fiscal 2024 to be up to $60 million.

Speaker 4: So and this is also with the net net of a growth of 1% what we what we saw in quarter two So I think what you know what the impact what Dave what kind of a loot is definitely very client specific and you know You know some conservatism in the client for

So and this is also with US net net growth of 1% what we saw in quarter two so I think.

What are the impact more Dave I was trying to allude to definitely maybe client specific and.

Some conservatism in the client for us.

Speaker 6: Okay, just a quick follow up on the 18%. What is kind of transitory within that that gives you the confidence for the 25 recovery? And then just my follow up, as we think about the second half headwinds on the top line that you talk about, do you take an immediate reduction in 3Q and have the ability to build off of that? Or should we think about the second half, the 3Q-4Q being more level in revenue?

Okay, just a quick follow up on the 18% what is kind of.

Transitory within that that gives you the confidence for the 25 recovery and then just my follow up as we think about the second half headwinds on the top line that you're talking about do you taken immediate reduction in <unk> and have the ability to build off of that or should we think about the second half of the <unk> being more level and revenue.

Sure. So let me take a stab at that Brian I think when you look at the at this point.

Speaker 2: Sir, let me take a stab at that Brian . I think when you look at the, at this point, if we don't make assumptions about volume and projects as we head into next year, right, if we assume that it...

We don't make assumptions about volume and projects as we head into next year, if we assume that it's status quo right and obviously, we know that those numbers could get.

Unknown Executive: We'll now open the call for questions. Operator? Certainly, please sign gelman if you wish to ask a question at this time, please press star 1-1 on your touchstone telephone. If your question has been answered or you wish to move yourself on the queue, please press star 1-1 again. In the interest of time and to enable everyone on the call to participate, please limit your questions to one question and one follow-up.

Speaker 2: status quo, right? And obviously we know that those numbers could get...

Speaker 2: could get slightly better, could get slightly worse. But we're looking at at least a 4% headwind to the business in that 18% that is transitory. We typically see in a given year anywhere between a 10 and an 11% headwind to our business, which is 3 to 4% on the productivity side, 1 to 2% on the project side, and then we typically have 4 to 5% of the business that are known ramps.

Get slightly better could get slightly worse, but we're looking at at least a 4% headwind to the business in that 18% that is transitory. We typically see in a given year anywhere between the 10 and 11% headwind to our business, which is 3% to 4% on the productivity side.

Unknown Executive: Please send by while we compile the candidate roster.

Yelena Sopin: And our first question coming from the line up, Brian Bergen with TD Cowan Yelena Sopen. I thank you. I wanted to start here with one of our own client behavior. So I'm trying to understand what appears to be a hurry up and weight behavior from a lot of enterprises. So you have clients with an urgency for cost reduction, pipeline commentaries all positive. And we all see solid deal signings across the services sector associated with productivity and reductions. But then these ramps seem to move more slowly and maybe the insurance cap that is a company specific situation.

Percent to 2% on the project side and then we typically have 45% of the business that are known ramp downs.

Speaker 2: The transitory stuff really relates to the large healthcare process, which obviously is going to anniversary here in Q4 of this year, and having a large internet-based client that we do procurement work for that has transitioned the solution from onsite-centric...

The transitory stuff really relates to the large healthcare process, which obviously is going to anniversary here in Q4 of this year and having a large internet based clients that we do procurement work forward that has transitioned the solution from onsite centric software centric. So these are really kind of the two unusual ones obviously.

Speaker 2: So these are really kind of the two unusual ones. Obviously the hope is that volume stabilize or pick back up and that the project based work starts to...

The hope is that that volume stabilized or picked back up and that the project based work starts the starts to settle in here as well, but the reality is in that in that ramp down we're looking at at least a 4% improvement on a year over year basis on top of the fact that our insurance captive.

Speaker 2: starts to settle in here as well, but the reality is in that ramp down, we're looking at at least a 4% improvement on a year over your basis. On top of the fact that our insurance captive, which SonJ mentioned has committed revenues,

Keshav Murugesh: But can you share your perspective on what seems to be causing this disconnect? Are there common threads that are not leading to more normal or faster ramps to affect, to achieve faster cost savings across these clients? Sure, let me take that Brian and Keshav and Sanjay can chime in as well. But I think when you look at our business for this year, the top line engine is really working well, right? I mean, we're, as Sanjay mentioned in his prepared remarks, we're facing an 18% headwind in terms of lost revenues for this year, which is a combination of, you know, ramp downs and volume project related issues.

Sanjay mentioned has committed revenues.

Speaker 2: We'll have to ramp next year fiscal 26 in order for them to meet their five year commitment targets. We feel pretty good about the opportunity as we head into next year, both in some of the abatement of the headwinds as well as the acceleration in some of the things that are creating challenges.

We will have to ramp next year fiscal 'twenty six in order for them to meet their five year commitment targets. So.

We feel pretty good about the opportunity as we head into next year. Both in terms of the abatement of the headwinds as well as the acceleration in some of the things that are creating challenges right now.

Speaker 4: In front of it. I'm sorry. Sorry. I meant it. Yeah. And you know, if it's just talking about quarter three day, you know, so your specific question then definitely, you know, the quarter three, we believe and we expect that it's going to be three and a half to four percent lower as compared to quarter two. Right now, you know, it's impacts one person almost coming from an effect.

And I'm, sorry, I'm, sorry, it's country, yes.

And then just talking about quarter three David.

So your specific question that indefinitely.

Keshav Murugesh: The Productivity Commitments that we give to clients, the fact that we walked into the year with unusual headwinds from a large healthcare client and from an internet client moving work off shore. So, you know, these are all kind of headwinds to the business. The 10% that we have guided to at the midpoint is, you know, it actually shows a gross growth number of 28% for the year. So, we believe that when you look at that deal signing, deal closures, deal flow, especially as it relates to the cost reduction types of initiatives, we're not seeing slowdowns.

We believe and we expect that it's going to be three and half to 4% lower as compared to quarter two right now.

<unk>.

1% all of it's coming from and are fixed.

Speaker 4: because quarter two was almost at 1.27 from a pound perspective. And now what we have assumed is 1.23 for the balance half as well as what Dave was talking about large internet client from an offshoring perspective, that impacted quarter two as well as going to impact quarter three. By that phase, it will just complete its entire offshoring.

<unk>.

Carter, who was almost one point to seven from our own perspective, and now what we have.

He is 123 for the balance as.

As well as you know what they were talking about larger the next line from an operating perspective that impacted quarter too as there is going to impact part of fleet by debt fees. If we just completed that opportunity, but it also gives us a lot of opportunity from a growth perspective, because the slide is intact. The relationship is there as well as we have renewed.

Speaker 4: But you know, it also gives us a large opportunity from a growth perspective because the client is inside the relationship is there as well as we have renewed, you know, kind of it's much longer term as well as it helps to drive over margin. Also, just wanted to remind that audit fee is usually our travel seasonality.

Keshav Murugesh: I think the issue with the insurance captive is a completely separate one and it is highly company specific and it's structural in nature based on priorities within the organization. But again, with that initiative, the goal was to drive cost savings. Right. So, I think we're not seeing significant delays in cost reduction based activities, where we've seen the delays and where we've seen the impact to this guidance versus last quarter is more on the volumes that are being pumped through the processes we own are ready and the discretionary projects or the shorter term projects as they relate to the acquisitions that we've done and procurement business.

I'm, just wondering how much longer as well as it has to drive our margin.

Also I just wanted to remind that quarter three is usually our travel seasonality and that impacts the quarter three revenue.

Speaker 4: and that impacts the quarter three revenue. But as we move forward, we believe that we should come back from quarter four onwards as compared to the bottom.

As we move forward, we believe that we should come back.

From ultra for onward as compared to March.

Speaker 3: Yeah, this is Genshev, just wanna add one last bit here.

Yes, yes sure.

Just wanted to add one last brief here.

Speaker 3: And that is that first and foremost in terms of just the quality of discussions we are having with clients and prospects there at a level that we have not seen before. So I just want to give the confidence that there is a lot of activity taking place.

And that is that first and foremost in terms of just the quality of discussions, we're having with clients and prospects. They are at a level that we have not seen the board. So I just wanted to give you confidence that there is a lot of activity taking place around both the transformation agenda as well as the cost savings agenda, and I think a lot of <unk>.

Keshav Murugesh: And I just add, you know, to what Dave said, you know, this client volume forecast, you know, still we believe is conservative because still quarter to what we have seen that those volumes, you know, in fact, have not reduced only in September, very specific to some clients in travel, what we saw some reduction, but broadly in place. And this reduction is also to be just consistent with our visibility based, right. We drive now have 97% visibility against 92% visibility last quarter, what we mentioned.

Speaker 3: around both the transformation agenda as well as the cost-faving agenda. And I think a lot of clients focus a lot on the transformation agenda earlier, but I'm now doubling down on the cost-faving agenda. But while it's moving ahead, I think the potential for some of it to accelerate, you know, sometime later it's much higher. I think a lot of them are taking a conservative view, because of the disruption involved in their, you know, kind of, programs to do it. The second thing I want to mention is...

<unk> focused a lot on the transformation agenda earlier, but are now doubling down on the cost saving agenda.

It's moving ahead I think the potential for so I'll try to accelerate some time later is much higher I think a lot of them are taking a conservative view because of the disruption involved in there.

Programs are doing the second thing I want to mention is pricing has been extremely stable from our point of view. So I think thats a very good sign.

Speaker 3: pricing has been extremely stable from our point of view. So I think that's a very very good sign and

Keshav Murugesh: And still this does not include the short term revenue, where we don't have visibility. So, and this is also with a net net off of a growth of 1% what we saw in quarter to. So, I think what, you know, what the impact for Dave, what kind of a lead is differently, very client specific, and you know, you know, some conservatism in the client for us.

Overall, the large deal progress the pipeline the interaction with customers.

Speaker 3: The large deal progress, the pipeline, the interaction with customers, the travel between customers and our people, up and down across the ice continuously is very, very strong. And the conversations around all the new trends, again, continue to be strong. So I think it's a very unusual headwind that we are seeing in fiscal 24-as-day when Sanjay explains.

The travel between customers on our people.

Non across sites continues to be very very strong and the conversations around all the new trends again continues to be strong. So I think it's a very unusual headwinds that we're seeing in fiscal 'twenty for us Dave and Sanjay explain.

Keshav Murugesh: Okay, just a quick follow up on the 18% what is kind of transitory within that that gives you the confidence for the 25 recovery and then just my follow up as we think about the second half headwinds on the top line that you talk about, do you take an immediate reduction in 3Q and have the ability to build off of that, what should we think about the second half, you know, the 3Q 4Q being more level in revenue. Sure, so let me take a stab at that Brian.

Speaker 3: And you know, quite confident that 25 will be quite different. Okay.

Quite confident that 25 will be quite different.

Okay. That's all great detail. Thank you very much.

Thanks, Brian .

Thank you and our next question coming from the line of.

Speaker 1: Thank you. And our next question coming from the line up. Mayoung.

My young tandem with Needham Your line is open.

Speaker 6: Thank you. Keshav, thank you for sharing those examples on the Gen AI opportunities. I wanted to focus in on that for a second. As you look to take advantage of the opportunities down the road, do you have to overhaul your sales engine? Do you have to revamp it? Do you have to retool and rescale your workforce? What are the investments you have to make to truly be positioned to take advantage of the opportunities down the road?

Thank you.

Thank you for sharing those examples on the <unk> opportunities I wanted to focus in on that for a second as you look to take advantage of the opportunities down the road do you have to overhaul.

Keshav Murugesh: I think when you look at the, at this point, if we don't make assumptions about volume and projects as we head into next year, right. If we assume that it status quo, right. And obviously we know that those numbers could get, you know, could get slightly better, could get slightly worse. But we're looking at at least a 4% headwind to the business in that 18% that is transitory. We typically see in a given year anywhere between a 10 and an 11% headwind to our business, which is 3 to 4% on the productivity side, you know, 1 to 2% on the project side.

Sure sales engine you have to revamp it you have to retool and Reskill. Your workforce what are the investments you have to make to truly be positioned to take advantage of the opportunities down the road.

Yes, that's an excellent question.

Speaker 3: Yeah, that's an excellent question, my, my, my, and can, I would say all of the about, you know, whatever you, you know, spoke asked about, I think what we are doing is really focusing on making sure that first of all the capability engines inside the company are, you know, well, taken care of and invested in like, you know, spoke about my prepared remarks.

I would say all of the above whatever.

You asked about having what we are doing is really focusing on making sure that first of all the capability engines inside the company.

Keshav Murugesh: And then we typically have 45% of the business that are known ramps, down. The transitory stuff really relates to the large healthcare process, which obviously is going to anniversary here in Q4 this year, and having a large internet-based client that we do procurement work for that is transition the solution from onsite-centric to offshore-centric. So these are really kind of the two unusual ones. Obviously, the hope is that volume stabilize or pick back up and that the project-based work starts to settle in here as well, but the reality is in that ramp down, we're looking at at least a 4% improvement on a year-over-year basis, on top of the fact that our insurance captive, which Sanjay mentioned, has committed revenues, will have to ramp next year, fiscal 26, in order for them to meet their five-year commitment targets.

Taken care of and invested in.

I spoke about in my prepared remarks.

Speaker 3: We are building relationships outside of WNAS also beyond just the traditional partner network.

Building relationships outside of WNS also beyond just traditional Boston our network, but also with universities in the U S UK and other places in order to.

Speaker 3: But also with universities in the US, you can other places in order to just ensure that we have direct access to research, as well as have our people interested in with the researchers there to be useful to our clients at the second.

Ensure that we have direct access to research as well as our people interacting with the research out there to be useful to our clients at the second.

Curtis.

Speaker 3: accelerated kind of learning programs that we are using with our skills people in order to bring them up to speed in terms of

Accelerated kind of learning.

Rams that.

Using with.

Our salespeople in order to bring them up to speed in terms of.

What.

Speaker 3: what we have inside how we are changing some of those offerings and to actually have intelligent and a penetrative conversations with our clients.

What we have insights how we are changing some of those offerings and to actually have intelligent.

Conversations with our clients I think the most wonderful thing that we're seeing as a result of these investments being made the excitement being created as well as the fact that Jay.

Speaker 3: I think the most wonderful thing that we're seeing as a result of these investments being made, the excitement being created as well as the fact that AI and Gen-I is obviously something that is top of the attention in all boardrooms, is that forest

Keshav Murugesh: So we feel pretty good about the opportunity as we head into next year, both in the abatement of the headwinds, as well as the acceleration in some of the things that are creating challenges right now. I'm sorry. And you know, if we're just talking about quarter three, David, you know, so your specific question, then definitely, you know, the quarter three, we believe, and we expect that, you know, it's going to be three and a half to 4% lower as compared to quarter two.

<unk> is obviously something that is top off.

The attention and all board rooms is that WNS salespeople and leaders across technology across domains are actually having far better and more conversations with clients and prospects.

Speaker 3: salespeople and leaders across technology across domains are actually having far better and more conversation.

Speaker 3: with clients and prospects that then we have ever seen before. So I just want to mention that we are investing in every one of those areas, but at the same time, we're also seeing the quality of conversations has increased. We recently have, you know, our advisor, you know, day in the US. And we have the highest ever attendance of both clients.

We have ever seen before right. So I just want to mention that we are investing in every one of those areas, but at the same time, we're also seeing the quality of cognizant.

Keshav Murugesh: Right now, you know, it's impacts one person almost coming from an effect, because, you know, quarter two was almost at 1.27 from a pound perspective, and now, what we have assumed is 1.23 for the balance half, as well as, you know, what they were talking about a large internet client from an optioning perspective, you know, that impacted quarter two, as well as going to impact quarter three, by that phase, it was just completely center of sharing. But, you know, it also gives us a large opportunity from a growth perspective, because the client is inside the relationship is there, as well as we have renewed, you know, kindness, water for a much longer term, as well as it helps to drive over margin.

As increased we recently had.

Our adviser.

In the U S and we had the highest attendance of more clients as well as the adviser.

Speaker 3: as well as the advisors at that event because clearly where we showcase a lot of examples of things that were being created at W&S and we had clients actually talk about how they were impacted by some of these ideas.

Clearly very shortly it's a lot of examples of things spectrum are being created at WNS.

WNS and we had clients actually talk about how they are really impacted by some of these ideas.

Got it very helpful. And then I have to ask you a follow up on that.

Speaker 6: What do you see in terms of the impact on the model, when do we actually see the effects on revenue or March?

What do you see in terms of the impact on our model when do we actually see the effects on revenue or margins or for that matter also wanted to get a sense of the size and scope of these engagements going to be larger or smaller as you think about it longer term just from a financial standpoint, how should we view it.

Speaker 6: or for that matter, you know, also want to get a sense how the size of scope of these engagements going to be larger or smaller as you think about it longer term. Just from a financial standpoint, how should we view it?

Keshav Murugesh: Also, just wanted to remind that quarter three is usually our travel seasonality, and that impacts, you know, the quarter three revenue. But as we move forward, we believe that, you know, we should come back, you know, from quarter four onwards as compared to ours. Yes, this is Kinshav. Just want to add one last bit here.

Yes, I think I'll take a stab at that first and then have Dave and Sanjay talk a little more on the financial models, but.

Speaker 3: Yeah, I think I'll take a stab at that first and then have Dave and Sanjay talk a little more on the financial models But you know, I think right now some of these topics are front and center and you know receiving a lot of attention at the top of the house

I think right now some of these topics are front and center and receiving a lot of attention at the top of the house I think most clients at this point in time as.

Keshav Murugesh: And that is that first and foremost, in terms of just the quality of discussions we're having with clients and prospects, they're at a level that we have not seen before. So, I just want to give the confidence that there's a lot of activity taking place around both the transformation agenda, as well as the cost-faving agenda. And, I think a lot of clients focus a lot on the transformation agenda earlier, but are now doubling down on the cost saving agenda.

Speaker 3: I think most clients at this point in time, you know, as the hype is settling down to more business oriented kind of discussions are just getting much more comfortable with who are the partners that can actually help them navigate, you know, some of these new technologies and whom they can trust, who understand their businesses, first and foremost, their business domain.

As the HIFU settling down to more business oriented kind of discussions are just getting much more comfortable with who are the partners that can actually help them.

Navigate some of these new technologies.

Whom they can trust who understand their business is first and foremost that business domains and who can help them take them through the changes right and I think in that journey WNS has made all the investments is having lots of conversations is building.

Keshav Murugesh: But, you know, while it's moving ahead, I think the potential for some of it to accelerate, you know, sometime later is much higher. I think a lot of them are taking a conservative view because of the disruption involved in their, you know, kind of, programs to do it. The second thing I want to mention is pricing has been extremely stable from our point of view. So, I think that's a very, very good sign.

Speaker 3: and who can help them, you know, take them, you know, through the changes, right? And I think in that journey, WNS has made all the investments, is having lots of conversations, is building, you know, a lot of, you know, a lot of confidence with our clients that we are the right partner, you know, to work with, you know, for the long term. That is one.

A lot of.

A lot of confidence with our clients.

We have the right partner.

Work with.

For the long term that is one at the same time. We are also seeing that a few guys. Adam one thing to bolster the early conversations willing to actually take the risk of dipping their toes.

Keshav Murugesh: And overall, the large deal progress, the pipeline, the interaction with customers, the, you know, the travel between customers and our people, you know, up and down across sites, continuously very, very strong. And the conversations around all the new trends, again, continue to be strong. So, I think it's a very unusual headwind that we are seeing in fiscal, you know, 24 as Dave and Sanjay explained.

Speaker 3: At the same time, we are also seeing that a few clients are wanting to post the early conversations.

Speaker 3: willing to actually take the risk of dipping their toes and in the model and actually taking, you know, adding on more disruption to what they're already seeing from a macro point of view or from their own business point of view. So we gave examples of a few clients and where this is already being experimented with.

In the model and actually taking.

Adding on more disruption doing what theyre already seeing from a macro point of view or from their own business point of view. We gave examples of a few clients on revenues already being experimented risks, but my own.

Speaker 3: Like my own commitment with my internal team is to start pushing for more...

Yelena Sopin: And, yes, you know, quite confident that 25 will be quite Okay, that was all great detail. Thank you very much. Thanks, Brian.

My own commitment with my internal teams is to stop pushing for more.

Speaker 3: you know, commitment from clients, you know, during this year, somewhere along this fiscal, but driving much more of it next year. So I would expect that this whole year will be all about building commitment, getting clients to actually get comfortable, and then over a period of time, as they get, you know, more comfortable about willing to add on more disruption to their models, you know, walk with their feet, so to speak, in terms of, you know, getting on board with some of these models.

Went from clients during this year somewhere around this fiscal but driving much more next.

Mayank Tandon: Thank you, and our next question coming from the Lionel. My young tandem would need him, Yelena Sopin. Thank you, Keshav, thank you for sharing those examples on the GNI opportunities. I wanted to focus on that for a second. As you look to take advantage of the opportunities down the road, do you have to overhaul your sales engine, you have to revamp it, you have to retool and re-skill your workforce. What are the investments you have to make to truly be positioned to take advantage of the opportunities down the road?

Next year, so I would expect that this whole year will be all about building commitment.

Getting clients to actually get comfortable.

Then over a period of time as they get.

More comfortable about willing to add on more disruption to their models.

What we've got feet so to speak in terms of.

Getting onboard with some of these models.

Speaker 3: And the clients who are experimenting are already seeing the change in productivity, the kind of impact that we're able to give them in even those minor processes in terms of their cost management programs. And now they're able to get a sense of how they can size it and scale some of these projects even into areas that they may not have outsourced or handled over before.

But clients who are.

Experimenting are already seeing the change in productivity the kind of impact that we are able to give them.

Mayank Tandon: Yeah, that's an excellent question, Mayank, and I would say all of the above. Whatever you asked about, I think what we are doing is really focusing on making sure that first of all the capability engines inside the company are well taken care of and invested in, like I spoke about in my prepare remarks. We are building relationships outside of WNS also beyond just a traditional partner network, but also with universities in the US, UK and other places in order to just ensure that we have direct access to research, as well as have our people interacting with the researchers there to be useful to our clients at the second.

Even those microprocessors in terms of their cost management programs and now they are able to get a sense of how they can size. It in scale. Some of these projects even into areas that they may not have outsourced.

Outsource our handler, what before so I think the potential is high.

Speaker 3: So I think the potential is high, but we will have to wait and watch because we have to build confidence and we have to get the clients to actually be willing to take the risk of doing some of these things.

But we would have to wait and watch because we have to build.

Confidence and be able to get the clients to actually be willing to take the risk of doing some of these things.

Yes, I would just add to that mine from a financial perspective, we've seen nothing to date that changes our philosophy that for our clients to really take advantage of.

Speaker 2: I would just add to that mind from a financial perspective, you know, we've seen nothing to date that changes our philosophy that for clients to really take advantage of.

Mayank Tandon: The third is accelerated kind of learning programs that we are using with our salespeople in order to bring them up to speed in terms of what we have inside, how we are changing some of those offerings and to actually have intelligent and penetrative conversations with our clients. I think the most wonderful thing that we are seeing as a result of these investments being made, the excitement being created as well as the fact that AI and Genai is something that is top of the attention in all both rooms is that WNS salespeople and leaders across technology across domains are actually having far better and more conversations with clients and prospects than we have ever seen before.

Speaker 2: what AI and Gen AI can do. It does require that the process is completely re-engineered. And as a result, we continue to see that the opportunity for the financial model going forward is to move away from FTE-based types of pricing schemes. And more towards transaction, outcome subscription-based models where the clients pay for results instead of for bodies.

AI and Jenny I can do it does require that the process.

Completely re engineered.

And as a result, we continue to see the opportunity for the financial model going forward is to move away from FTE based types of pricing schemes and more towards transaction and outcome subscription based models, where the clients pay for results instead of four bodies.

<unk>.

When you look at logically how these engagements are going to have to work there's going to be a lot of effort on the front end to clean data to build models right and unless those costs are amortized over the life of the project, it's going to be very difficult for our clients to justify so when we look at these types of initiatives we.

Speaker 2: When you look at logically how these engagements are going to have to work, there's going to be a lot of effort on the front end to clean data to build models. Right? And unless those costs are amortized over the life of the project. It's going to be very difficult for a client to justify. So when we look at these types of initiatives.

Speaker 6: We see a clear catalyst with AI and Gen AI as clients get more comfortable with these types of engagements, as Kisha said, moving us away from FTE based models, and obviously as we've shown over the last seven, eight years, we believe that as we move away from FTE based models, our opportunities for margin expansions improve. That's helpful. Thank you so much. Thank you, Bank. Thank you.

See a clear catalyst with AI engine AI as clients get more comfortable with these types of engagements.

Mayank Tandon: I just want to mention that we are investing in every one of those areas, but at the same time we are also seeing the quality of conversations has increased. We recently had our advisor in the US and we had the highest ever attendance of both clients as well as the advisors at that event because clearly very shocking a lot of examples of things that were being created at WNS. And we had clients actually talk about how they were impacted by some of these ideas.

As I've said.

Moving moving us away from FTE based models and obviously as we've shown over the last seven eight years, we believe that as we move away from FTE based models are opportunities for margin expansion to improve.

That's helpful. Thank you so much.

Thank you Mike.

Thank you.

And our next question coming from the line of.

Ashwin <unk> with Citi. Your line is now open.

Yes.

Mayank Tandon: Got it. Very helpful. And then I have to ask you a follow up on that. What do you see in terms of the impact on the model, when do we actually see the effects on revenue or margins or for that matter, you know, also want to get a sense. Other side of scope of these engagements going to be larger or smaller as you think about it longer term, just from a financial standpoint, how should we view it?

Thank you.

Good day, good day guys.

Speaker 7: Good day, good day guys. I guess this is.

I guess this is.

Speaker 7: It's a mathematical question. If I look at 97% of the new range versus 92% of the prior range, so it's basically the visibility metric at times the midpoint. The number, the dollar, the actual dollar number you have visibility to.

It's a mathematical question, if I look at 97% of the new range versus 92% of the pricing so just make equally.

Mayank Tandon: Yeah, I think I'll take a stab at that first and then have David Sanjay talk a little more on the financial models. But, you know, I think right now some of these topics are front and center and you know receiving a lot of attention at the top of the house. I think most clients at this point in time, you know, as the hype is settling down to more business oriented kind of discussions.

The ability.

At times the midpoint.

The number the dawn of the extra dollar done where you have visibility to it seems to have gone up by about $20 million. So.

Speaker 7: seems to have gone up by about 20 million dollars. So gone up, right? So my question is, what needs to happen for you to call something visible?

Alright. So my question is what needs to happen for you to call something visible.

Speaker 7: And I guess the flip side of the question is when did you learn of some of these changes?

And I guess.

Mayank Tandon: I'm just getting much more comfortable with who are the partners that can actually help them navigate, you know, some of these new technologies. And whom they can trust, who understand their businesses first and foremost, their business domains. And who can help them, you know, take them, you know, through the changes, right? And I think in that journey, WNS has made all the investments. It's having lots of conversations is building, you know, a lot of, you know, a lot of confidence with our clients that we are the right partner, you know, to work with, you know, for the long term, that is one.

Flip side of that question is when did you learn of some of these changes that are causing your actual overall range to go down but your visibility to go up.

Speaker 7: that are causing your actual overall range to go down, but your visibility to go up.

That makes sense.

Yes, absolutely.

Speaker 4: Yeah, I know, actually, your absolute, you know, right. And you know, the visibility goes up specifically when, you know, we have a committed contract from the client perspective, you know, perspective, whether it's a volume commitment, whether it's a new logo, the expansion, it's all about the client commitment. So you're right. The 20 million goes up, you know, from a visibility base, it's all about those, you know, those contracts be executed at this particular sketch. And you know,

Absolutely.

Right.

The visibility goes up specifically when we haven't gone we did find contract from a client.

If anything it's a volume commitment.

New logo expansion is all of our clients.

Right.

<unk> goes up.

From a facility it is all about those.

Mayank Tandon: At the same time, we are also seeing that a few clients are wanting to post the early conversations, willing to actually take the risk of dipping their toes and in the model. And actually taking, you know, adding on more disruption to what they're all be seeing from a macro point of view or from their own business point of view. So we gave examples of a few clients and then this is all being experimented with.

This contract.

This particular.

Steve.

As we keep on moving forward under discussion.

Speaker 4: As we keep on moving forward in the discussion, from a visibility perspective, it is all about the conservative, what we mentioned, the client.

From a visibility.

<unk> is all about.

Already what we kept on saying well.

What we mentioned.

And then they give the volume data.

Speaker 4: When they give the volume, they commit it, we take it. Because we have no other means from a client and perspective that how their volumes from a future perspective are going to be because they have a better understanding of that particular business.

Congregate.

You take it because we have no we have no other mean from Edison light and persuaded that at all.

Mayank Tandon: But my own, you know, my own commitment with my internal teams is to start pushing for more, you know, commitment from clients, you know, during this year, somewhere along this fiscal, but driving much more of it. Next year, I would expect that this whole year will be all about building commitment, getting clients to actually get comfortable. And then over a period of time, as they get, you know, more comfortable about willing to add on more disruption to their models, you know, both with their feet sort of speak in terms of, you know, getting on board with some of these models.

Volumes from a future perspective are going to be because.

Do you have a better understanding of that particular business at this stage.

Speaker 2: And just to add to the second part of your question, Ashwin, I think a lot of the deterioration that we've seen is, as Keshav mentioned in this prepared remarks, from a volume perspective, we started seeing some erosion in the travel vertical in September . You'll see that when you look at our second quarter financials.

And just just to add to the second part of your question Ashwin I think a lot of the deterioration that we've seen as Acacia mentioned in his prepared remarks.

From a volume perspective, we.

We started seeing some erosion in the travel vertical in September .

Youll see that when you look at our second quarter financials.

Speaker 2: In addition to seeing the volume erosion show up in September , we also got forecast in September that showed lower commitment levels going forward. So some of this was really a function of what happened in September similarly with the delays in our captives. Those discussions were ongoing throughout the quarter, but it really wasn't until later in the quarter that we had.

In addition to seeing the volume erosion show up in September . We also got forecast in September that showed lower commitment levels going forward right. So some of this was really a function of what happened in September similarly, with the delays in our captives those discussions were ongoing throughout the quarter, but it really.

Mayank Tandon: And the clients who are, you know, experimenting are already seeing the change in productivity, they kind of impact that we're able to give them in, you know, even those, you know, minor processes in terms of their cost management programs. And now they're able to get a sense of how they can size it and scale some of these projects, even into areas that they may not have, you know, outsourced or handled over before.

Wasn't until later in the quarter that we had.

Speaker 2: had knowledge that the client was going to be pushing out phase two of this of this relationship. So, you know, I think a lot of this was clearly not visible to us in July when we provided guidance. Some of this is related to a deterioration in the macro, right? I think some of that is showing up in the travel vertical on the volume side. Some of it is showing up in the...

The knowledge that the client was going to be pushing out phase two of this of this relationship so.

Think a lot of this was clearly not visible to us.

Mayank Tandon: So I think the potential is high, but we will have to wait and watch because we have to build confidence and we have to get the clients to actually be willing to take the risk of doing some of these things. I would just add to that mind from a financial perspective, we've seen nothing to date that changes our philosophy, that for clients to really take advantage of what AI and Gen AI can do.

In July when we provided guidance. Some of this is related to a deterioration in the macro rate I think some of that it's showing up in the travel vertical on the volume side. Some of it is showing up in the.

Speaker 2: the lack of accelerated growth in the project side of our business where when you look at our visibility, remember when we came into the year, we actually came into the year with 2% lower visibility than we typically did, right? We started with 87, 790 and the reason was because we had added 6% of revenue through our acquisitions.

The lack of accelerated growth in and the project side of our business, where when you look at our visibility remember when we came into the year, we actually came into the year with 2% lower visibility than we typically did right. We started with 88 of 90 and the reason was because we had added 6% of revenue through our.

Mayank Tandon: It does require that the process be completely re-engineered. And as a result, we continue to see that the opportunity for the financial model going forward is to move away from FTE-based types of pricing schemes and more towards transaction outcomes, subscription-based models where the clients pay for results instead of for bodies. When you look at logically how these engagements are going to have to work, there's going to be a lot of effort on the front end to clean data, to build models, right?

Physicians that we're growing at a much faster clip than the company. So we have comfort in those assets being able to bridge that gap and obviously given what's gone on with the macro here, while those assets continue to grow at a healthy clip, they're growing below our expectation and as a result of our ability to bridge that gap has has dropped but.

Speaker 2: that we're growing at a much faster clip than the company. So we had comfort in those assets being able to bridge that gap.

Speaker 2: And obviously, given what's going on with the macro here, while those assets continue to grow at a healthy clip, they're growing below our expectation. And as a result, our ability to bridge that gap has has dropped. But at the end of the day, I think a lot of what you're seeing here, you're right. We've gotten new commitments from clients. We've been able to add.

At the end of the day I think a lot of what Youre seeing here you're right. We've got new commitments from clients, we've been able to add revenue to the top line. The challenge has been.

Mayank Tandon: And unless those costs are amortized over the life of the project, it's going to be very difficult for clients to justify. So when we look at these types of initiatives, we see a clear catalyst with AI and Gen AI, as clients get more comfortable with these types of engagements, as Kisha said, moving us away from FTE-based models, and obviously as we've shown over the last seven, eight years, we believe that as we move away from FTE-based models, our opportunities for margin expansions improve. Thank you so much. Thank you, Bank. Thank you.

Speaker 2: Revenue to the top line, the challenge has been the erosion and stuff that's fallen out of the box.

The erosion of the stuff that's fallen out of the bottle.

Understood and then with regards to the.

Speaker 7: And then, with regards to the expected inorganic contribution.

The.

Expected inorganic contribution I think it was supposed to be 300 basis points before.

Speaker 7: I think it was supposed to be 300 basis points before, but I do believe it's lapped in the quarter. What's the new expected inorganic contribution in...

But I do believe Ram lamps, it's an app in the quarter whats the new expected inorganic contribution.

Just given some of the commentary that you had how these acquisitions are doing I mean, what I'm for example.

Speaker 7: Just given some of the commentary that you had with how these acquisitions are doing, I mean, Wuram, for example, the low-code intelligent automation services company, I would imagine that's the, that's exactly...

Ashwin Shirvaikar: And our next question coming from the line-up, Ashwin Survicar with City, Ilana Sopin. Thank you. Good day, good day, guys.

Low code intelligent automation services company.

Imagine that.

That's exactly the kind of work.

Speaker 7: that clients are demanding now. So why the

Clients are demanding now.

So why the.

Ashwin Shirvaikar: I guess this is a mathematical question. If I look at 97% of the new range versus 92% of the prior range, so it's basically the visibility metric at the time's the midpoint, right? The number, the dollar, the actual dollar number you have visibility to seems to have gone up by about 20 million dollars, so gone up, right? So my question is, what needs to happen for you to call something visible? And I guess the flip side of the question is when did you learn of some of these changes that are causing your actual overall range to go down, but your visibility to go up?

Significant weakness and it may not be associated with specific any wuhan so idaho.

Speaker 7: It may not be associated with specifically WOOM. So I know that there may be other facts.

The factors.

Speaker 7: but could you plan to provide some?

But could you.

Provide some color on that.

Speaker 4: Yeah, so, you know, Ashwin, you know, still 3% is intact from an acquisitions perspective. You know, what we guided earlier, in fact, you know, Buram and, you know, the other acquisitions have been growing north of 20%, you know, much better than the company level growth.

Yes, so in Australia.

People as soon as the impact from an acquisitions perspective.

What we guided earlier in.

In fact.

And you hope that that acquisition has been great.

So for any person you don't much better than the company level growth.

Speaker 4: I think the reversal, what we have spoken about is based on the business plan of the target revenue what was given for the valuation which was discussed with them. So according to it was much higher expectation from a group perspective and accordingly.

Wilson.

What we have spoken about is based on the business line or the target revenue what was given other valuation which was discussed with them.

Accordingly, it was much higher expectation from a group perspective and accordingly.

Ashwin Shirvaikar: That makes sense? Yeah, Ashwin, you're absolutely right. And the visibility goes up specifically when we have a committed contract from the client perspective. Whether it's a volume commitment, whether it's a new logo, the expansion, it's all about the client commitment. So you're right, the 20 million goes up. From a visibility base, it's all about those contacts being exhibited at this particular stage. And as we keep on moving forward in the discussion, from a visibility perspective, it is all about the conservative, what we kept on saying, what we mentioned, the clients, then they give the volume, they committed, we take it because we have no other means from at a client and perspective that, you know, how their volumes from a future perspective are going to be because, you know, they have a better understanding of that particular business at this point, and just to add to the second part of your question, Ashwin.

Speaker 4: That visibility of those growth is not there and according to those reversal but in fact, you know the growth is much healthier, much better discussion what we are having, you know, including the top line as well as driving the productivity internally as well as for the

Visibility.

All of those growth is is.

Is not dead and according to those reversal, but in fact.

The growth is much healthier much better discussion what we are having.

Including the top line as well as driving the productivity internally as well as product line.

Speaker 2: Demand for the acquisitions remain healthy, Ashwin. Like Sonji said, they are still growing all three of the assets faster than the company average by a significant margin. The only issue is that they're growing below what we had hoped or anticipated and below what they've grown historic.

Demand for the acquisitions remains healthy ashwin.

Like I said they are still growing all three of the assets faster than the company average by a significant margin.

The only issue is that theyre growing below what we had hoped or anticipated and below what they've grown historically.

Speaker 2: So, you know, there's just clearly been a slowdown, and that's why the word we used in the prepared remarks with a de-stalleration in their growth. But making them a stake, these are still really good assets that are growing at really healthy rates.

So there's clearly been a slowdown and that's why the word we used in the prepared remarks with a deceleration in their growth, but make no mistake. These are still really good assets that are growing at really healthy rates.

Speaker 2: We're just seeing some of that top end get removed here.

We're just seeing some of that top end get get removed here.

Speaker 7: Okay, can I throw in a certification question with regards to the buyback? It was reupt. I think it was relatively late in the quarter is that why we haven't seen an impact in the quarter and should we expect you to continue to, maybe stuff indicated down, would you be willing to step up and defend and so on? If you can comment.

Okay can I turn that clarification question with regards to the buyback it was.

I think it does relatively late in the quarter is that why we haven't seen.

Ashwin Shirvaikar: I think a lot of the deterioration that we've seen, as Keshav mentioned in this prepared remarks, from a volume perspective, we started seeing some erosion in the travel vertical in September. You'll see that when you look at our second quarter financials. In addition to seeing the volume erosion show up in September, we also got forecast in September. Over the show, lower commitment levels going forward. Some of this was really a function of what happened in September, similarly with the delays in our captives.

An impact in the quarter and should we expect you to continue to to maybe stuffing.

<unk> indicated down would you be willing to step up and defend and so on if you can comment on that.

So ashwin no we didn't see any.

Speaker 4: So as you know, we didn't see any, you know, any sheriff but there's a little quarter because...

Any share repurchases during the quarter because.

Speaker 4: We got, you know, completed with our share, we purchased approval, what we had from the shareholder's perspective. And, you know, as the agent was there in September , we got that, you know, new approval for 3.3 million shares from our shareholders.

We got.

Completed with our share repurchase approval, what we heard from a shareholder's perspective annual as a GM was there.

September we gardeners.

<unk> was $3 3 million shares from our shareholders and as in my prepared remarks.

Ashwin Shirvaikar: Those discussions were ongoing throughout the quarter, but it really wasn't until later in the quarter that we had had knowledge that the client was going to be pushing out phase two of this relationship. I think a lot of this was clearly not visible to us in July when we provided guidance. Some of this is related to a deterioration in the macro. I think some of that is showing up in the travel vertical on the volume side.

Speaker 4: And as you might prepare the marks, you know, I mentioned that the board have already approved.

I mentioned that the board has already approved.

Speaker 4: you know to start the new program for the shared approaches and accordingly we expect.

To start the new program for the share repurchases and accordingly, we expect.

Speaker 4: to start the share repurchase is in quarter three as we move forward. Understood.

To start the share repurchases and part of it.

Sure.

Understood. So no limitations. Thanks. Thank you.

Yes.

Yeah.

Yeah.

Thank you and our next question coming from the line of Maggie Nolan with Merlin Blair. Your line is open.

Speaker 1: Thank you. And our next question coming from the line-up, Maggie Nolan with Will and Blair, you'll sign up for the zweitegonate.

Ashwin Shirvaikar: Some of it is showing up in the lack of accelerated growth in the project side of our business where when you look at our visibility. When we came into the year, we actually came into the year with 2% lower visibility than we typically did. We started with 8.8% of 90% and the reason was because we had added 6% of revenue through our acquisitions that were growing at a much faster clip than the company.

Hi, Thank you.

Speaker 8: Hi, thank you. You mentioned the expectation for continued industry leading margin profile, given some of the headwinds on the revenue side. Can you talk about some of the puts and takes on the margins and and the trajectory for the remainder of this year?

The expectation for continued industry, leading margin profile given some of the headwinds on the revenue side can you talk about some of the puts and takes on the margins and the trajectory for the remainder of this year.

Sure let me take that Maggie you are right. Obviously, we had a really good quarter here in terms of margin in Q2. Some of that was what I would call nonrecurring in nature, especially as it relates to the SG&A benefits that we had during the quarter.

Speaker 2: Sure, let me take that Maggie. You're right. Obviously, we had a really good quarter here in terms of margin in Q2. Some of that was what I would call non-recurring in nature, especially as it relates to the S-GNA benefits that we had during the quarter. To Sunjee's point, when you look at a reduction in Q3 on the top line of in the 3 1 1 2 4% range sequentially, I think...

Ashwin Shirvaikar: We had comfort in those assets being able to bridge that gap. Obviously, given what's going on with the macro here, while those assets continue to grow at a total clip, they're growing below our expectation and as a result, our ability to bridge that gap has dropped. At the end of the day, I think a lot of what you're seeing here, you're right. We've got new commitments from clients. We've been able to add revenue to the top line.

<unk>.

Sanjay <unk> point, when you look at a reduction in Q3 on the top line.

The three 5% to 4% range sequentially I think.

Ashwin Shirvaikar: The challenge has been the erosion that's fallen out of the bottom. Understood. And then with regards to the expected inorganic contribution, I think it was supposed to be 300 basis points before. But I do believe Wuram, it's lapped in the quarter. What's the new expected inorganic contribution? And just given some of the commentary that you had with how these acquisitions are doing. I mean, Wuram, for example, the low-code intelligent automation services company, I would imagine that's exactly the kind of work that clients are demanding now.

The margin profile is also going to be down so I think what we get back to for Q3 Q4 in terms of margins is a more normal cadence so something in the range of 21% plus in Q3 and 22% plus in Q4.

Speaker 2: The margin profile is also going to be down. So I think what we get back to for Q3, Q4 in terms of margins is a more normal cadence. So something in the range of 21% plus in Q3 and 22% plus in Q4, which when you average out over the full year will bring us, again, somewhere slightly north of the midpoint between 21 and 22%.

Which when you average out over the full year will bring us again somewhere.

North of the midpoint between 'twenty, one and 22% for the full year.

Yes, the debate and the big issue, obviously in terms of Q3 margins as coverage of expenses given the revenue drop.

Speaker 2: The big issue obviously in terms of Q3 margins is coverage of expenses given the revenue.

Sure. Thank you.

Speaker 8: Sure, thank you. And then on the client that shifted from onshore to offshore, how long do you expect that shift will take?

And then on the client that shifted from onshore to offshore how long do you expect that shipped will take.

Speaker 8: Or is it already complete? And then are there other parts of the portfolio where you're evaluating the potential for them to do similar things throughout the remainder of the year? And what do you expect the impact to be and the timing of the impact on the margins from this shift?

Or is it already complete and then are there other parts of the portfolio, where you are evaluating the potential for them to get similar things throughout the remainder of the year.

Ashwin Shirvaikar: So why the suggested weakness, it may not be associated with specifically Wuram, so I know that there may be other factors. But could you provide some color on that? Yeah, so Ashwin still 3% is intact from an acquisition perspective, what we guided earlier. In fact, Wuram and the other acquisitions have been growing north of 20%, much better than the company levels rose. So I think the reversal, what we have spoken about is based on the business plan of the target revenue, what was given for the valuation which was discussed with them.

What do you expect the <unk>.

Impact could be and the timing of the impact on the margin from this shift.

So the.

Speaker 4: So the procurement line, which began is journey from an offshoring perspective impact it started in quarter two. And that's going to take at least couple of more quarters, which is going to be expected to get completed by year end. And accordingly, when we will step in in FY25, from a next year on, that's where we'll start things, some of the improvement from a margin perspective. Also, as we will be done with that entire offshoring, we expect the growth also to be rapid as we move forward, because of our long-term relations.

The procurement line, which began his journey from an offshoring perspective package started in quarter, two and that's going to take at least a couple of more quarters, which is going to be.

We expect it will get completed by year end.

And accordingly.

<unk> will step in FY 'twenty five.

On the next year onwards will study that has been a bit start seeing some of the improvement from a margin perspective also.

Ashwin Shirvaikar: So accordingly, it was much higher expectation from a growth perspective. And accordingly, that visibility of those growth is not there. And according to those reversal, but in fact, the growth is much healthier, much better discussion. What we are having, including the top line, as well as driving the productivity internally, as well as further. Yeah, demand for the acquisitions remain healthy, Ashwin. You know, like Sanjay said, they are still growing all three of the assets faster than the company average by a significant margin.

Ask me will be done with that and that opportunity. We expect the growth also to be rapid.

But as we move forward it won't be because of our long term relationship.

Speaker 9: Oh.

Thank you very much.

Thank you and our next question coming from the line of David Koning with Baird. Your line is now open.

Speaker 1: Thank you. And our next question coming from the line of David Coning with Baird. Your line is now open.

Oh.

Ashwin Shirvaikar: The only issue is that they're growing below what we had hoped or anticipated and below what they've grown historically. So, you know, there's clearly been a slowdown and that's why the word we used in the prepared remarks with a deep celebration in their growth. But make no mistake, these are still all really good assets that are growing at really healthy rates. We're just seeing some of that top end get removed here.

Hey, Dave are you on you on the call.

Please check your mute button.

I would you like me to go to the next person yes.

Speaker 1: If you'd like me to go to the next person's queue. Yeah, let's do that and we can get Dave back into the queue. Sure. And our next question coming from the line of.

Well do that and we can get them back into the queue.

Ashwin Shirvaikar: Okay, can I throw in a certification question with regards to the buyback it was reupped. I think it was relatively late in the quarter is that why we haven't seen an impact in the quarter and should we expect you to continue to, maybe, you know, stuff indicated down would you be willing to step up and defend and so on. We can comment on that. So, Ashwin, now we didn't see any, you know, any sharey purchase during the quarter because we got, you know, completed with our share, we purchased approval what we had from a shareholder perspective and, you know, as the agent was there in September, we got that, you know, new approval for 3.3 million shares from our shareholders.

Sure.

Our next question coming from the line of.

Nathan Salmon with Deutsche Bank. Your line is open.

Speaker 6: Hi guys, thanks for the question. I wanted to ask about your outlook for head count growth going forward. So I think head count grew 8% last year. And just looking sequentially in one, Q and two, Q was pretty flat. So just wondering what your thoughts on head count of this?

Hi, guys. Thanks for the question. So I wanted to ask about your outlook for head count growth going forward. So I think head count grew 8% last year and just looking sequentially in <unk> and <unk> was pretty flat. So just wondering what your thoughts on head count additions sort of in the current macro environment and in light of your revised revenue expectations.

Speaker 6: current macro environment and in light of your revised revenue.

<unk> for the year and I guess the related question. There is you've had this talk about shifting project from FTE based to outcome based and you called out the P&C insurance project in your prepared remarks, you. One example of that so maybe what percent of projects today, our outcome based versus the FTE based and kind of where do you see that going over time.

Speaker 6: and I guess the related question there is you've had this talk about shipping projects from FTE based to outcome based and you've called out the PMC Insurance Project and you're prepared remarks. It's one example of that. So maybe what percent of projects today are outcome based versus the FTE based and kind of where do you see that going?

Ashwin Shirvaikar: And as you might prepare the marks, you know, I mentioned that the board have already approved, you know, to start the new program for the sharey purchases. And accordingly, we expect to start the sharey purchases in quarter three as we were all understood. It's an all limitations there.

Maybe I'll start from a head count costs money and then you can add further we expect.

Speaker 4: Maybe I'll start from a headcount perspective and then you can add further. You know, we expect, you know, headcount to come down at this important free based on, you know, what we are seeing from a revenue reduction perspective based on certain reasons like, like, offsuring and others of what they spoke about.

Ashwin Shirvaikar: Thank you. Yes.

Headcount did not exist in quarter three based on what we are seeing from a.

Ashwin Shirvaikar: Thank you.

Revenue reduction perspective on certain reasons like offshoring, another somewhat just spoke about.

Maggie Nolan: And our next question coming from the line up, Maggie Nolan with Will and Blair, you're on a soap. Hi, thank you. You mentioned the expectation for continued industry leading margin profile. Given some of the headlines on the revenue side, can you talk about some of the puts and takes on the margins and the trajectory for the remainder of this year? Sure, let me take that, Maggie. You're right. Obviously, we had a really good quarter here in terms of margin in Q2.

But as we head.

In quarter four.

We expect that head count to go up because it will start hiring for some of the revenue growth, which is going to be getting a 585 million beginning from quarter one.

And including.

Depending upon how soon the ramp from the insurance captive what we spoke about stock we may have to stock Heidi because there is always a training period, which are required so.

Speaker 2: and captive what we spoke about start, we may have to start hiring because there is always a training period which are required. So, you know, if those things are well intact, we believe that we may be having either a flat or a little higher head count, you know, as compact as today. Yeah, and just to say that the Sunji is commenting, that it's kind of gets the rest of your question here. The expectation, you know, while head count should be flatish here and then hopefully we can really kick up here again in Q4. The expectation is the similar to what we've been able to deliver over the last three to four years. We do expect-

Those.

Those things are well intact, we believe that we may be having either a flat or a little higher head count.

Maggie Nolan: Some of that was what I would call non-recurring in nature, especially as it relates to the SGNA benefits that we had during the quarter. You know, to Sanjay's point, when you look at a reduction in Q3 on the top line of, you know, in the three and a half to four percent range sequentially, I think the margin profile is also going to be down. So I think what we get back to for Q3, Q4 in terms of margins is a more normal cadence.

At some back of equity and just just to add to <unk> comment that kind of get the rest of your question here.

Speaker 2: Yeah, and just just add to Sonji's comment and it's gonna get the rest of your question here.

The expectation, while head count should be flattish year, and then hopefully pick up here again in Q4, the expectation is that similar to what we've been able to deliver over the last three years to four years, we do expect revenue per employee to increase in that 3% to 4% range, which again I think gives us that that long term margin leverage and really them.

Speaker 2: The expectation, you know, what law head count should be flatish here and then hopefully check up here again in Q4. The expectation is that similar to what we've been able to deliver over the last three to four years, we do expect revenue per employee to increase in that three to four percent range, which again, I think gives us that long-term margin leverage and really demonstrates the shift towards the

<unk> the shift.

Maggie Nolan: So, you know, something in the range of 21 percent plus in Q3 and 22 percent plus in Q4, which when you average out over the full year will bring us again somewhere completely north of the midpoint between 21 and 22 percent for the full year. The big issue, obviously, in terms of Q3 margins is coverage of expenses given the revenue. Druff. And what do you expect the impact to be and the timing of the impact on the margins from the ship?

Strip towards the.

Speaker 2: you know, the non-linear models. When you look at revenue by contract type, we're still in that kind of 70-30 mix between FTE and non-FTE. I will tell you guys, though, that that true mix has been masked by the large healthcare clients.

The non linear models when you look at revenue by contract type, we're still in that kind of 70 30 mix between FTE in non FTE.

I'll tell you guys know that the true mix has been masked by the large health care client.

Speaker 2: that we, that we, that we, the process that we lost, which was entirely subscription based.

The process that we lost which was entirely subscription based.

Speaker 2: So I think had we not had that headwind from a revenue perspective and that headwind from a non-FTE perspective, you would have seen the mix starting to move here. So part of what you're seeing is a function of kind of client behavior, but part of what you're seeing here in terms of the mix between FTE and non-FTE is also client specific and specific to the WNS portfolio.

<unk> I think had had we not had that headwind from a revenue perspective and that headwind.

And the non FTE perspective, you would've seen the mix starting to move here. So.

Part of what Youre seeing is a function of kind of client behavior, but part of what you're seeing here in terms of the mix between FTE in non FTE is also client specific and specific to the WNS portfolio.

I just wanted to very healthy I would just want to underline one more thing one more point here and that is in.

Speaker 3: I just want to, I just want to underline one more thing, one more point here. That is in, you know, we've added almost 830 new seats in this quarter. And we're also looking at, you know, we're possibly bringing on stream, some more facilities that will add more seats.

Maggie Nolan: So the procurement line, which begins journey from an offshoring perspective, impact it started in quarter two, and that's going to take at least a couple of more quarters, which is going to be expected to get completed by year end. And accordingly, when we will step in in FY25, from a next year onwards perspective, that is where we'll start seeing some of the improvement from a margin perspective. Also, as we will be done with that entire offshoring, we expect the growth also to be rapid as we move forward because of our long-term relationship. Thank you very much. Thank you.

We've added almost 830 new seats in this quarter.

And we're also looking at bringing on stream some more facilities.

We'll add more seats over the next few months so on the one hand.

Speaker 3: over the next few months. So on the one hand, while we're seeing all these headwinds at this point, and therefore, H2, we're also confident that based on the commutations we're having the fact that some of these revenues that we're talking about will actually get deferred and move into the outer, the rest of the year, or go beyond. And we will actually have much more coming into 25. We're already preparing for the ramp for 25. I must mention that as well.

We're seeing all those headwinds at this point and barefoot H two.

We're confident that based on the conversations you're having the fact that some of these revenue that we're talking about will actually get deferred and move into the Alta.

For the year.

Beyond and.

We will actually have much more of it coming into 'twenty five we're already preparing for the Ram 2005, I must mention that as well.

Speaker 2: And we need to continue to delink that growth in revenue from that growth.

And we need to continue to de link that drop in revenue from net growth in head count.

David Koning: And our next question, coming from the line of David Koning with Bert, he'll on his now open. Hey, David, are you on the call?

Speaker 6: All, all very helpful. I appreciate the detailed answers there. So my, my follow up.

All very helpful. I appreciate the detailed answers there. So my follow up question I was hoping you could compare and contrast, some of the demand trends that you're seeing across regions I know you've called out the travel vertical before but just kind of looking at your results in North America and the U K specifically you saw it looks like youre seeing a bit of a dip.

Speaker 6: and contrast some of the demand trends that you're seeing across regions. I know you've called out the travel vertical before but just kind of looking at your results.

Speaker 6: North America and the UK specifically. So it looks like you're seeing a bit of a deceleration in North America, whereas the UK has had a couple of quarters of sequential accelerates.

Celebration in North America, whereas the U K has had a couple of quarters of sequential acceleration, which is nice to see sort of given the macro headlines that you see around that country. So maybe you could compare and contrast, what you're seeing across your different geographies. How much that is tied into what youre seeing in say say travel just get more color that would be very helpful. Thank you.

Unknown Executive: Please check your mute button. All right, would you like me to go to the next person? Yeah, let's look at that and we can get that back into the queue. Sure.

Speaker 6: the macro headlines that you see around that country. So maybe you could compare contrast what you're seeing across your different geographies, how much that's tied into what you're seeing and say, hey, travel, just get more color, though.

Speaker 2: Sure, let me take that. I think when you look at our business and you kind of look at cases of commentary about the pipeline and demand for both digitization automation as well as cost reduction, what you'll see is that across services, across geographies, across vertical.

Let me take that I think when you look at our business and you kind of look at case with commentary about the pipeline and demand for both Digitization automation as well as cost reduction what youll see is that across services across geographies across verticals. Our demand is really healthy right.

Puneet Jain: And our next question, coming from the line of. Nathanson, would you like to thank you on his open? Hi, guys, thanks for the question. I wanted to ask about your outlook for head count growth going forward. So I think head count grew eight percent last year, and just looking sequentially in one queue and two queue was pretty flat. So just wondering what your thoughts on head count additions, sort of in the current macro environment and in light of your revised revenue expectations for the year.

Speaker 2: Our demand is really healthy, right? Where you see gaps, whether they're in a vertical or in a geography or in a service offering, they're more about the client-specific issues that we've been talking to you about, right? So obviously you're gonna see healthcare is weak because of the healthcare process that we lost, right? That's also gonna show up as a headwind to the US revenues. It's also gonna show up as a headwind to the non-.

Where you see gaps whether they're in a vertical or geography or in a service offering they're more about the client specific issues that we've been talking to you about right. So obviously youre going to see health care as weak because of the the healthcare process that we loss rate. That's also going to show up as a headwind to the U.

Puneet Jain: And I guess the related question there is you've had this talk about shipping projects from FTE base to outcome base. And you've called out the PMC insurance project and you're prepared remarks with one example of that. So maybe what percent of projects today are outcome base versus the FTE base and kind of where do you see that going over time?

<unk> revenues, it's also going to show up as a headwind to the non FTE revenues. When you look at the large procurement client that is transitioning from onsite to offshore.

Speaker 2: When you look at the large procurement client that's transitioning from onsite to offshore, that's going to show up as a headwind to our manufacturing retail. It's going to show up as a headwind to finance and accounting, and it's also going to show up as a headwind to our US

Puneet Jain: Maybe I'll start from a head count perspective and then you can add further. We expect head count to come down at least in quarter three based on what we are seeing from a revenue reduction perspective based on certain reasons like octuring and others of what they spoke about. But as we had in quarter four, we expect the head count to go up because we'll start hiring for some of the revenue growth, which is going to be there in a 525 and beginning from quarter one.

It's going to show up as a headwind to our manufacturing retail it's going to show up as a headwind to finance and accounting and it's also going to show up as a headwind to our U S. Based revenues. So the reason you see U S soft isn't because U S demand is off the reason youre seeing in the U S being soft is because of the health care clients the large internet based clients and.

Speaker 2: So the reason you see US soft isn't because US demand is soft. The reason you're seeing US is being soft is because of the healthcare client, the large internet-based client, and the softness in traffic. So a lot of what you see, what I'm trying to get at here is that the optics on these are not really what I would call macro trends, but more about the specific company issues that we have within our portfolio.

Softness in traffic.

So.

A lot of what you see what I'm trying to get at here is that the optics on these are not really what I would call macro trends, but more about the specific company issues that we have within our portfolio.

Puneet Jain: And including depending upon how soon the ramp from the insurance captive, what we spoke about start, we may have to start hiring because there is always a training period which are required. So you know, if those things are well intact, we believe that we may be having either a flat or a little higher head count as compared to today. And just to add to Sunji's comment and to kind of get the rest of your question here.

Thanks, Dave I appreciate it.

Thank you.

Yeah.

Speaker 1: Thank you. And our next question coming from the line of, Puneet Chan, would JP Morgan, you want to open?

Thank you and our next question coming from the line of Puneet Jain with Jpmorgan. Your line is open.

Hi, Thanks for taking my question.

Speaker 10: Hi, thanks for taking my question. Sunday or David, if you can break down the revenue kind of 40 to 15 million in annual revenue into various components like the insurance client, travel volume project delays, and I believe currency should also have impact to for on 10 million.

Sunday or David if you can breakdown the revenue guidance.

Puneet Jain: The expectation, you know, what while head count should be flatish here and then hopefully check up here again in Q4. The expectation is that similar to what we've been able to deliver over the last three to four years, we do expect revenue to per employee to increase in that three to four percent range, which again, I think gives us that that long term margin leverage and really demonstrates the shift towards the non-linear models.

What is the $15 million annually.

Venue.

And two there is confidence like the insurance client travel volume project delays.

I believe currency should also have an impact of around 10 million.

Relative to prior guidance.

Yes, so Bob.

Speaker 4: Yeah, so you know, so you're talking about the reduction in the guidance, the component of that specifically, correct? Yes.

Youre talking about the reduction in the guidance the component of that.

Puneet Jain: When you look at revenue by contract type, we're still in that 70, 30 mix between FTE and non FTE. I will tell you guys though that true mix has been masked by the large healthcare client that we the process that we lost, which was entirely subscription based. So I think had we not had that headwind from a revenue perspective and that headwind from a non FTE perspective, you would have seen the mix starting to move here.

Specifically Brett.

Yes.

Speaker 4: Yeah, so I think, you know, 1% is coming from FX itself, as I mentioned earlier.

Yes, so I think Bob.

1% is coming from FX itself as I mentioned earlier.

Speaker 4: You know, 2% is coming from a large insurance captive, I'm referring, that there's a thing 1% from client.

2% is coming from a large insurance captive audience for it.

There's only one person frontline.

Speaker 4: volume forecast from conservative perspective and another one person is some slowed down in decision making from project based on some of the acquisitions what we spoke about and this is getting net off with the 1% growth what we had in quarter two specifically so net net if you will see it shows like

Volume forecast from a conservative perspective, and another one percentage some slowdown in decision making from project based on some of the acquisitions.

We spoke about and just getting net health with a 1% growth what we had in quarter two.

Puneet Jain: So part of what you're seeing is a function of kind of client behavior, but part of what you've seen here in terms of the mix between FTE and non FTE is also client specific and specific to the WNUS portfolio. I just want to, I just want to underline one more thing, one more point here and that is in, you know, we've added almost 830 new seats in this quarter and we're also looking at, you know, we're possibly on stream some more facilities that will add more seats over the next few months.

Specifically as a net negative youll see it shows like.

Speaker 4: 4% on a reported currency and 6% on a auction.

4% on a reported currency and people like that.

Yes.

Speaker 10: And I also want you to have... sorry, good.

Got it.

I also want to perhaps I'm sorry go ahead.

No.

Speaker 10: No, but it's going. Okay. And I also wanted to ask about like the lower growth expectations from Puram. We thought like their services would be more relevant in the current environment as clients looking to cut cost. Could you share more details on what growth of weakness is?

Okay.

And I also wanted to ask about like the lower growth expectations from put them.

<unk> talked like their services would be murdered 11 can the current environment is clients looking to cut costs.

Sure.

So on what drove that weakness.

Speaker 4: And you know, just, so put it again, you know, it's not the weakness.

And just.

Put it again, it's not the Venus.

Puneet Jain: So on the one hand, you know, while we're seeing all these headwinds at this point, we're also confident that based on the conversations we're having, the fact that some of these revenues that we're talking about will actually get deferred and move into the, you know, the rest of the year of, you know, go beyond. And, and we will actually have, you know, much more coming into 25, we're already preparing for the ramp, you know, for 25, I must mention that as well. Yep, and, and we, and we need to continue to de-link that Joseph and revenue from that growth and headcount. All, all very helpful. I appreciate the detailed answers there.

Speaker 4: from a growth perspective. Vora has been growing more than 20%.

From a growth perspective, we're up has been growing more than 3% a year over year.

As expected this is all about.

PJM consideration what was.

What was agreed with them for a much higher growth.

Speaker 4: for a much higher growth, you know, from a valuation perspective. And accordingly, that particular number is not there or is not expected at this stage and accordingly at reversal. But having said that, you know, it's much relevant, you know, it's providing a much healthier growth as we discussed with our client, as well as the pipeline is very, very healthy, you know, across all the verticals, wherever we are discussing with our existing clients or the new logos. And Puneet, I think at the end of the day.

From a valuation perspective, and accordingly that particular number is.

Net art.

It is not expected at this stage and accordingly.

Having said that.

As much relevant it's providing a much healthier growth as we as we discussed with our clients as well as our pipeline is very very healthy.

Keshav Murugesh: So my, my follow up question I was hoping you could compare and contrast some of the demand trends that you're seeing across regions. I know you've called out the travel vertical before, but just kind of looking at your results in North America and the UK specifically. So it looks like you're seeing a bit of a acceleration in North America, whereas the UK has had a couple of quarters of sequential acceleration, which is nice to see sort of given the macro headlines that you see around that country. So maybe you can compare and contrast what you're seeing across your different geographies, how much that's tied into what you're seeing and say, hey, travel just get more color. That would be very helpful. Thank you.

Across our group.

Most all of the verticals, we are discussing with our existing plants are the new logos.

<unk> I think at the end of the day, whether it's the services from Burnham or whether it's what we're seeing in procurement projects or what we're seeing in certain instances on the analytics side right I think it's more about client prioritization and if the type of service that you are selling requires.

Speaker 2: the services from VIRM or whether it's what we're seeing in, you know, procurement projects or what we're seeing in certain instances on the analytics side, right? I think it's more about client prioritization and if

Speaker 2: The type of service that you're selling requires the clients to pay upfront for something that they need to get the benefit of over time.

The clients to pay upfront for something that they need to get the benefit of over time. These.

Speaker 2: These are the kinds of things that clients are having to make hard decisions. There's a bulk of our business.

These are the kinds of things that clients are having to make hard decisions on right. The bulk of our business doesn't involve an upfront payment from clients.

Keshav Murugesh: Sure, let, let me take that. I think when you look at our business and you kind of look at cases of commentary about the pipeline and demand for both digitization automation, as well as cost reduction, what you'll see is that across services, across geographies, across verticals. Our, our demand is really healthy, right? Where you see gaps, whether they're in a vertical or in a geography or in a service offering, they're more about the client specific issues that we've been talking to you about, right?

Speaker 2: doesn't involve an upfront payment from the client, right? Our core mission critical process outsourcing work does not require the client to make an upfront investment, right? Whereas even though projects like what VIRM does in terms of low-code, no-code automation drives cost production over time, the reality is the client has to pay for that service upfront. So in this environment, I think clients are thinking about

Our core mission critical process outsourcing work does not require the client to make an upfront investment right, whereas even though projects like what berm does in terms of low code no code automation drives cost reduction over time. The reality is the client has to pay for that service upfront. So in this environment I think <unk>.

Lions are thinking about what they wanted to do first how they want to prioritize and we believe that these these projects will all get done clients need to do this right. The question is in this environment as it now is it next quarter or is it in 2025, but the Sun just point berms business remains extremely.

Speaker 2: what they want to do first, how they want to prioritize, right? And we believe that these projects will all get done, right? Clients need to do this, right? The question is, in this environment, is it now? Is it next quarter? Is it in 2025? But to Sanjay's point, Burm's business remains extremely healthy. It's growing at a very nice clip. It's growing well above company average. He said over 20%. The issue is it's not growing at the expected level that we had had.

Keshav Murugesh: So obviously you're going to see health care is weak because of the, the health care process that we lost, right? That's also going to show up as a headwind to the US revenues. It's also going to show up as a headwind to the non FTE revenues. When you look at the large procurement client that's transitioning from on site to offshore, that's going to show up as a headwind to our manufacturing retail.

Greenlee healthy it's growing at a very nice clip, it's growing well above company average you said over over 20%. The issue is it's not growing at the expected level that we had had.

Keshav Murugesh: It's going to show up as a headwind to finance and accounting, and it's also going to show up as a headwind to our US based revenues. So the reason you see US soft isn't because US demand is soft. The reason you're seeing US, it's being soft, it's because of the health care client, the large internet based client, and the softness in traffic. So, you know, a lot of what you see, you know, what I'm trying to get at here is that the optics on these are not really what I would call macro trends, but more about the specific company issues that we have within our portfolio. Thank you. I appreciate it. Thank you.

Okay, no that makes sense thanks for the classification.

Puneet Jain: And our next question coming from the line up.

Yeah.

Thanks, Tony.

Speaker 11: Thanks, Tony.

Thank you and our next question coming from the line of Moshe country with Wedbush. Your line is open.

Speaker 1: You our next question coming from the lineout moshi country with what bushhel and is.

Speaker 12: Hey, thanks. Just some clarifications you spoke about the travel vertical where you're seeing some weak volumes. I guess the last time we really spoke about the travel vertical that's being ahead went here was during the pandemic.

Hey, Thanks, just some clarification you spoke about the travel vertical where you're seeing.

Weak volumes I guess, the last time, we really spoke about the travel vertical that that's being a headwind here. It was during the pandemic.

Sure.

Maybe you can talk a bit about some of those weaker volumes, what's really kind of driving that and what sort of visibility do you have into this vertical for the next few quarters. That's my first question. Thanks.

Speaker 12: Maybe you can talk a bit about some of those weaker volumes. What's really kind of driving that. And what sort of visibility do you have into this vertical for the next few quarters? That's my first one.

Puneet Jain: Who needs to join with JP Morgan, you want to open? Hi, thanks for taking my question. Sanjay or David, like if you can break down the revenue cards cut of $40 to $15 million in annual revenue into various components, like the insurance clients, travel volume project delays, and I believe currency should also have impact to around $10 million in financial, related to product aid. Yeah, so, you know, so you're talking about the reduction in the guidance, the component of that specifically for it?

Okay.

Sure, let me take a crack at that Moshe So look I think when you when you look at what's going on in travel right. You can bifurcate. It by geography, you can bifurcate it by by sub vertical right I mean, some of the behaviors that we're seeing any hotelier space. For example, the online travel space are different than some of the behaviors that we're seeing in the <unk>.

Speaker 2: Sir, let me take a crack at that motion. So look, I think when you look at what's going on in travel.

Speaker 2: Right? You can bifurcate it by geography. You can bifurcate it by by sub vertical. Right? And then some of the behaviors that we're seeing in the space, for example, the online travel space.

Speaker 2: our difference in some of the behaviors that we're seeing in the airline space. We have certain clients where the volumes are higher than they were.

Airline space, we have certain clients, where the volumes are higher than they were the prior quarter. We have other clients where the volumes are lower right. So some of this is at a macro level I think there's pressure. Some of this also to the Sundays comment earlier is about client specific issues, whether it's about <unk>.

Speaker 2: prior quarter. We have other clients where the volumes are lower, right. So some of this is, you know, at a macro level, I think there's pressure.

Speaker 2: Some of this also, to Sanjay's comment earlier, is about client-specific issues, whether it's about changes in their business models, whether it's about market share gains and losses, right? So there are volume issues within the travel industry that go beyond just kind of macro.

Puneet Jain: Yes. Yeah, so I think you know, one percent is coming from effects itself, as I mentioned earlier. You know, two percent is coming from a large insurance captive reference, that there's a thing one percent from client volume forecast from conservative perspective, and another one percent is some slow down in decision making from project based on some of the acquisitions what we spoke about, and this is getting net up with the one percent growth what we had in quarter two specifically. So, net net, if you'll see, it shows like a poor person on a reported currency and three percent on asset. Got it. And I also wanted to ask, sorry, go ahead. No, but it's going. Okay.

As in their business models, whether it's about market share gains and losses right. So there are volume issues within the travel industry that go beyond just kind of macro.

Speaker 2: You know, we did see some of that show up in September when we look forward to the projections that we've gotten over the next couple of quarters. Again, we hope they will prove to be conserved.

We did see some of that show up in September when we look forward to the projections that we've gotten over the next couple of quarters again, we hope they will prove to be conservative.

We have historically seen that and as we've discussed many times on these calls we believe that the way. These contracts are structured and the way the forecasting process works in <unk>.

Speaker 2: We've historically seen that. And as we've discussed many times on these calls, we believe that the way these contracts are structured and the way the forecasting process works, incentivize his clients in this type of an environment to be conservative. So, you know, the hope certainly is that some of these reductions don't materialize, but to be completely transparent, we did see a little bit of a dip in September . So I think...

Advises clients in this type of an environment to be conservative so.

The hope certainly is that some of these reductions don't materialize, but to be completely transparent we did see a little bit of a dip in September . So I think hopefully what we've done is we've de risked the forecast based on the volume commitments that clients have given us and what we've included in our visibility, which is now up to 97%.

Puneet Jain: And I also wanted to ask about like the lower growth expectations from Puram. We thought like their services would be more relevant in the current environment as clients looking to cut cost. Could you share more details on what growth of weaknesses? And, you know, just so put it again, you know, it's not the weakness from a growth perspective. Puram has been growing more than 20 percent a year over year, you know, they expected.

Speaker 2: Hopefully, what we've done is we've de risk the forecast based on the volume commitments that clients have given us and what we've included in our visibility, which is now up to 97% but again, we kind of have to watch and wait and we're dealing with both.

But again, we kind of have to watch and wait and we're dealing with both potential macro issues as well as client specific issues under that umbrella.

Speaker 2: potential macro issues as well as client specific issues under that.

Okay. So you brought down the mid range by about 350 basis points in terms of constant currency revenue growth for the year from the last quarter.

Speaker 12: So you brought down the mid range by about 350 bases.

Puneet Jain: This is all about the contingent consideration. What was, what was, you know, agreed with them for a much higher growth, you know, from a valuation perspective. And accordingly, that particular number is, it's not there or is not expected at this stage and accordingly at reversal. But having said that, you know, it's much relevant, you know, it's providing a much healthier growth as we, as we discussed with our client, as well as the pipeline is very, very, you know, healthy, you know, across, across all the verticals, wherever we are discussing with our existing clients, all the new levels.

Speaker 12: constant currency revenue growth for the year from the last quarter, which part of that came from that travel vertical?

Part of that came from the travel vertical specifically.

Speaker 2: So close to 1%, right? I mean, the bottom line is Sanjay kind of reconciled for you the three and a half percent. And by the way, at the midpoint, constant currency revenue is only down three.

So close to 1%.

I mean, the bottom line as Sanjay kind of reconciled before you the the three 5% and by the way at the midpoint constant currency revenue was only down 3%.

Alright.

Speaker 2: Yep, understood. And then the last question. Sorry, go ahead. No, go ahead. I was going to say, so, you know, the 1% that we've seen in client volume reductions that we've baked into the guidance is predominantly driven by the

Understood.

And then the last question sorry, Sorry go ahead. No go ahead I was going to say so the 1% that we've seen in client volume reductions that we baked into the guidance is predominantly driven by the travel vertical.

Puneet Jain: And Puneet, I think at the end of the day, whether it's the services from Burham or whether it's what we're seeing in, you know, procurement projects or what we're seeing in certain instances on the analytics side, right? I think it's more about client prioritization. And if the type of service that you're selling requires the client to pay up front for something that they need to get the benefit of over time, these are the kinds of things that clients are having to make hard decisions on, right?

Okay. Okay and then the last question here is I guess more about capital deployment in the amount of cash you have on the balance sheet.

Speaker 12: Okay, okay. And then the last question here is, I guess, more about capital deployment and the amount of cash you have on the balance sheet.

Clearly the market is not giving you guys any sort of credit for your ability to outgrow or actually to outperform in this market compared to your peers.

Speaker 12: Clearly, the market is not giving you guys any sort of credit for your ability to outgrow or actually to outperform in this market compared to your peers.

I mean, what what can we do internally to kind of offset that.

Speaker 12: I mean, what can we do internally to kind of offset that, given the multiple, given the valuation, given the free cash or generation, on an annual basis?

Puneet Jain: The bulk of our business doesn't involve an upfront payment from the client, right? Our core mission critical process outsourcing work does not require the client to make an upfront investment, right? Whereas, even though projects like what Burham does in terms of low code, no code automation drives cost production over time, the reality is the client has to pay for that service upfront. So in this environment, I think clients are thinking about what they want to do first, how they want to prioritize, right?

Given the multiple given the valuations of any free cash flow generation on an annual basis.

Speaker 3: So I think I'll take that. I think from our point of view, you know, we will, we continue to look at how our

So I think I'll take that I think from our point of view.

We continue to look at how our business overall is trending for the long term we may have.

Speaker 3: Business overall is trending for the long term. We may have a short term issue with H2 of this year, which we have spoken about in this.

Short term issue, where the H two of this year, which we have spoken about this.

Speaker 3: at this call and their interest results. But overall, we continue to be very confident about how our business is trending, the kind of conversations we're making. And the pivot the company is making around some of the new technology changes that are exciting clients. And therefore creating opportunities for WNES.

This call and getting these results, but overall, we continue to be very confident about how our business is trending there.

Puneet Jain: And we believe that these projects will all get done, right? Clients need to do this, right? The question is, in this environment, is it now, is it next quarter, is it in 2025? But the Sunday's point, Burham's business remains extremely healthy. It's growing at a very nice clip. It's growing well above company average. You said over over 20%. The issue is it's not growing at the expected level that we Gautic, no, that makes sense. Thanks for the clarification. Thanks, Puneet. Thank you.

Conversations are making here.

The company is making around some of the new technology changes that I'm excited and clients and therefore, creating opportunities for WNS. So from our point of view in terms of capital allocation first and foremost we will continue to keep looking for those tuck in M&A targets.

Speaker 3: So from our point of view in terms of capital allocation, first and foremost, we will continue to keep looking for those tuck-in M&A targets.

Speaker 3: you know that we have spoken about that can add more capability so that things turn around we can leverage that capability to become you know even more impactful with every one of our clients there's a strong pipeline of candidates that they're constantly looking at and if something you know they make sense for us and add the bright kind of impact from a capability point of view we will implement a record of cooperation

You know that we have spoken about that Ken.

More capabilities, so that things turn around we can leverage that capability to become even more impactful with every one of our clients.

Moshe Katri: Our next question coming from the line-up, Moshe Katri, with Wethbushil, on a cell phone. Thanks, just some clarification. You spoke about the travel vertical where you're seeing some weak volumes. I guess the last time we really spoke about the travel vertical that's being a headwind here was during the pandemic. Maybe you can talk a bit about some of those weaker volumes. What's really kind of driving that? And what sort of visibility do you have into this vertical for the next few quarters? That's my first question. Thanks.

Strong pipeline of candidates that they're constantly looking at and if something.

It makes sense for us.

<unk> kind of impact from a capability point of view, we will pull the trigger there.

Other than that.

Speaker 3: Other than that, as Sanjay and Dave mentioned, we've also taken approvals for our buyback programs, right? So we continue to be very, very positive about the overall health of the business, the momentum that we can create for the long term. And as and when we believe the opportunity is right, we will continue to accelerate our buyback programs like we did earlier this year.

David mentioned, we have also taken approvals for our buyback programs right. So we continue to be very very positive about the overall health of the business. The momentum that we can create for the long term and as and when and where we believe the opportunity is right. We will continue to accelerate our buyback programs like we did.

Keshav Murugesh: Let me take a crack at that, Moshe. So look, I think when you look at what's going on in travel, you can buy forcated by geography, you can buy forcated by subvertical, right? I mean, some of the behaviors that we're seeing in the OTA space, for example, the online travel space are different than some of the behaviors that we're seeing in the airline space. We have certain clients where the volumes are higher than they were in the prior quarter.

Earlier this year.

Alright, thanks, guys.

Yeah.

Okay.

Got it.

Thank you and our next question coming from the line of David Koning with Baird. Your line is now open.

Speaker 1: Thank you. And our next question coming from the line of David Koning with Baird. Your line is now open.

Keshav Murugesh: We have other clients where the volumes are lower, right? So some of this is at a macro level. I think there's pressure, right? Some of this also to the Sanjay's comment earlier is about client-specific issues, whether it's about changes in their business models, whether it's about market share games and losses, right? So there are volume issues within the travel industry that go beyond just kind of macro. You know, we did see some of that show up in September when we look forward to the projections that we've gotten over the next couple of quarters.

Steven Your line is open please check your mute button.

David seems to be having a problem with the.

The speaker.

Our next question coming from the line of Steven Chin with Jefferies. Your line is open.

Speaker 1: Our next question coming from Delyna, Episode 10 with Jeffrey Filan?a.

Keshav Murugesh: Again, we hope they will prove to be conservative. We've historically seen that. And as we've discussed many times on these calls, we believe that the way these contracts are structured and the way the forecasting process works incentivizes clients in this type of an environment to be conservative. So, you know, the hope certainly is that some of these reductions don't materialize, but to be completely transparent, we did see a little bit of a dip in September.

Speaker 13: Good morning. So I'd like to start with a question about just the commentary earlier about having more large deal opportunity than at any point in the past. And then you also mentioned something about potentially a mix of changes ever increasing.

Good morning, So I'd like to start with a question about just the commentary earlier about having more large deal opportunities than at any point in the past.

And then you also mentioned something about potentially a mix shift changes ever increasing.

Focus on cost take out projects versus the transformation projects.

Speaker 13: Focus on cost-take-up projects versus the transformation project.

Speaker 13: Can you provide a little bit of additional color there in terms of, is that a lot of the product of the?

Can you provide a little bit of additional color. There in terms of is that a lot of the product or the curtains and certain macro environment that we're seeing what's kind of driving that and if we should begin to see.

Speaker 13: macro environment that we're seeing, what's kind of driving that? And if we should begin to see the macro.

Keshav Murugesh: So I think hopefully what we've done is we've de-risked the forecast based on the volume commitments that clients have given us and what we've included in our visibility, which is now up to 97%. But again, we kind of have to watch and wait. And we're dealing with both potential macro issues as well as client-specific issues under that umbrella.

The macro economy normalize how should we think about that opportunity in client decision, making at that point should we expect a step back or what specific picture look like from your grosses perspective.

Speaker 13: How should we think about that opportunity in client decision-making at that point? Should we expect to step back or what does the big picture look like for me?

Yes, maybe I'll take a stab at that first and foremost I think the trial.

Speaker 3: Yeah, maybe I'll take a stab at that. You know, first and foremost, I think the, you know, the pivoting of the model around some of the new technology changes, as well as, you know, the requirements that customers are facing because of the stress macros.

Moshe Katri: Okay. So you brought down the mid-range by about 350 basis points in terms of constant currency revenue growth for the year from the last quarter. Which part of that came from that travel vertical specifically? So close to 1%, right? I mean, the bottom line is, you know, it's a fungic kind of reconciled for you. The, the three and a half percent. And by the way, if the mid-point constant currency revenue is only down 3%, right? Yeah. So it just says, right?

The pivoting of the model around some of the new technology changes as well as the.

The requirements of the customers are facing because of the stressed macros also means that they are looking for partners, who can actually engage with them at the highest levels and can really help them in terms of navigating.

Speaker 3: also means that they are looking for partners who can actually engage with them at the highest

Speaker 3: levels and can really help them in terms of navigating the current crisis and creating opportunity for the future.

Current prices and creating opportunity for the future.

Speaker 3: And that is actually resulting first and foremost in a number of CXO level conversations for us.

And that has actually resulted in first and foremost in number of <unk> level conversations more apps.

Moshe Katri: And then the last question. Sorry. Sorry, go ahead. No, go ahead. I was going to say, so the 1% that we've seen in client volume reductions that we've baked into the guidance is predominantly driven by the- and Travel Word. Okay, okay.

Speaker 3: at a level that we have not seen before. I think it's very exciting to see the kind of conversations we are having with prospects.

The level that we have not seen before I think it is.

It's very exciting to see the kind of conversations we're having with prospects as well as existing clients in terms of completely new programs.

Speaker 3: as well as existing clients in terms of completely new programs that you know they may not have considered before but are now being pushed to look.

Ashwin Shirvaikar: And then the last question here is, I guess more about capital deployment, the amount of cash you have on the balance sheet. You know, clearly the market is not giving you guys any sort of credit for your ability to outgrow or actually to outperform in this market compared to your peers. I mean, what can we do internally to kind of offset that? Given the multiple given the valuation, given the free cash or generation on an annual basis?

You may not have considered before but are now being pushed to look at because they want to stay ahead of the game as far as some of these new trends are concerned and at the same time also.

Speaker 3: because they want to stay ahead of the game as far as AI, Gen AI, some of these new trends are concerned. And at the same time, also, you know, be smart in terms of cost leadership programs. So that is the excitement for WNS.

Be smart in terms of cost leadership programs. So that is the right thing for WNS in terms of just the quantity of conversations we are having the size of some of the deals.

Speaker 3: in terms of just the quality of conversations we're having, the size of some of the deals that we are looking at, let me start with the capital takeout, which may have differed, but it's committed to providing us that revenue that we spoke about earlier. So that's the first act.

But we are looking at.

Like we saw with the capital takeout, which may have differed but is committed to providing us.

That revenue that we spoke about earlier.

Ashwin Shirvaikar: So, I think I'll take that. I think from our point of view, you know, we will, we continue to look at how our business overall is trending for the long term. We may have, you know, a short term issue with H2 of this year, which we have spoken about at this at this call and getting these results. But overall, we continue to be very confident about, you know, how our business is trending, the kind of conversations we are making and the pivot the company is making around some of the new technology changes that are exciting clients and therefore creating opportunities for WNS.

The first aspect.

Speaker 3: beyond that, you know, as we come out of the macro environment, I actually think because of the quality of conversations that are taking place and the new relationships being built.

Beyond that.

As we come out of the macro environment I actually think because of the quality of propositions that are taking place and the new relationships being built by WNS would be client community the prospect community as well as the analyst and the advisor community the ability for us to continue to <unk>.

Speaker 3: by WNS with the client community, the prospect community, as well as the analysts and the advisor community.

Speaker 3: The ability for us to continue to lead them in terms of programs that they must do to stay relevant and ahead of their competition is going to be front and center. And that gives us a lot of confidence about the business momentum for WNS, as well as I would say for the sector for the long term.

Lead there in terms of programs that they must do to stay relevant and ahead of their competition is going to be front and center and that gives us a lot of confidence on Barbie.

Ashwin Shirvaikar: So, from our point of view, in terms of capital allocation, first and foremost, we will continue to keep looking for those, you know, tuck in M&A targets, you know, that we have spoken about that can add more capability so that things turn around. We can leverage that capability to become, you know, even more impactful with every one of our clients. There's a strong pipeline of candidates that they're constantly looking at. And if something, you know, it makes sense for us and adds the right kind of impact from a capability point of view, we will pull the trades out there.

Momentum for WNS as well as I would say for the sector for the long term and just just to reiterate Kipp gives his comments are under I think when you look at for example, the four years prior to the pandemic when the macro was healthy what youll see is that our business was steadily accelerating and.

Speaker 2: Yeah, and just just to reiterate, Kisha's comments surrender. I think when you look at, for example, the 4 years prior to the pandemic, when the macro was healthy. What you'll see is that our business was steadily accelerating and.

Speaker 2: To the extent that traditionally people looked at these businesses as cost-production types of plays, the reality was I think what you saw in a healthy macro, both in terms of clients, willingness to look at strategic outsourcing engagements in terms of the types of clients that we're looking at them, right? These were clients that weren't struggling, these were clients looking for competitive advantage, looking for digitization and automation, looking for excess capacity, right? The reasons clients were coming to us.

To the extent that traditionally people looked at these businesses as cost reduction types of plays the reality was I think what you saw in our healthy macro both in terms of clients' willingness to look at strategic outsourcing engagements in terms of the types of clients that we're looking at them right. This is where clients that weren't struggling there.

Ashwin Shirvaikar: Other than that, as Sanjay and Dave mentioned, we've also taken approvals for our buyback programs, right? So, we continue to be very, very positive about the overall health of the business, the momentum that we can create for the long term. And as and when we believe the opportunity is right, we will continue to, you know, accelerate our buyback programs like we did, you know, earlier this year.

For clients looking for a competitive advantage looking for Digitization and automation looking for excess capacity right. The reasons clients were coming to us for the four years prior to the pandemic were not about cost reductions they were about needing to automate in order to remain competitive in the fact that we're in this environment now where automated.

Speaker 2: for the four years prior to the pandemic were not about cost reductions. They were about needing to automate in order to remain competitive.

Keshav Murugesh: So, thanks. Thank you.

Speaker 2: The fact that we're in this environment now where automation, digitization, and now the potential impacts for AI and Gen AI are front and center, right? That digitization theme is not going away. The only question is does cost production layer an additional catalyst on top of it or not? But again, I think back to my comment earlier, when you look at our top line growth, when you look at the growth engine in our business, extremely healthy right now.

<unk> Digitization and now the potential impacts for AI and <unk> are front and center.

David Koning: And our next question coming from the line up, David Coney with beer, do you want us to open? Even your line is open, please check in with button. And Dave seems to be having a problem with the speaker.

Digitization theme is not going away. The only question is does cost reduction.

<unk>, an additional catalyst on top of it or not but again I think back to my comment earlier when you look at our top line growth. When you look at the growth engine in our business extremely healthy right now in this environment.

Speaker 2: It's the lost business. It's the volume, it's the project.

The lost business, it's the volume that's the projects it's the.

Speaker 2: the healthcare client, that's creating the challenge for us.

The healthcare client that is creating the challenge for us this year.

Understood and then as a follow up.

Speaker 13: understood. And then as a follow-up, just the commentary on how important it is to kind of continue increasing the number of employees that are working from the office.

Just the commentary on how important it is to kind of continue increasing the number of employees that are working from the office.

Unknown Executive: Our next question coming from the line up, sir, and you're thin with Jeffrey, feel on a cell phone.

Speaker 13: Is that being driven by client requirements here? And maybe how does that impact your margin profile in terms of just the optimization of global?

Is that being driven by claim requirements here and maybe how does that impact your margin profile in terms of just the optimization of global delivery.

Keshav Murugesh: Good morning. So, I'd like to start with a question about just the commentary earlier about having more large deal opportunity than at any point in the past. And then you also mentioned something about potentially a mix of changes ever increasing, and focus on cost-take-up projects versus the transformation projects. Can you provide a little bit of additional color there in terms of is that a lot of the product of the curtain on certain macro environment that we're seeing?

Keshav Murugesh: What's kind of driving that? And if we should begin to see the macro economy normalize, how should we think about that opportunity and incline decision making at that point? Should we expect a step back or what that's a big picture look like for me?

Speaker 4: Yeah, you know, so those work from office basically, you know, depending upon various factors, one definitely, as you mentioned, you know, based on the client requirement, it can be regulatory because of the data privacy and some of those other requirements.

Yes.

No.

From office basically depending upon various factors one definitely as you mentioned is the client requirements.

It can be accurately because of the data privacy and some of those others.

The requirement.

Speaker 4: Third, it can be also from a geography specific, and specifically in the tier two because of the infrastructure, whether it's because in tier two cities, you have power outages, you have bandwidth challenges. So employees are required to be working from office. So these are various factors which get considered to return to office. And we believe at this stage.

So what it gives me also from.

We hope geography specific and specifically next year or two because of the infrastructure right.

Cost.

Two cities you have outages you have.

Bandwidth challenges so.

Employees are required to be walking from office. So these are the biggest factors, which get consider return to office and we believe at this stage.

Keshav Murugesh: Yeah, maybe I'll take a stab at that, you know, first and foremost, I think the, you know, the pivoting of the model around some of the new technology changes, as well as, you know, the requirements that customers are facing because of the stressed macro also means that they're looking for partners who can actually engage with them at the highest levels and can, you know, really help them in terms of navigating, you know, the current crisis and creating opportunity for the future. And that is actually resulting, first and foremost, in a number of CXO level conversations for us at a level that we have not seen before.

Speaker 4: By the year end, as an average, 70% is a good number from a work-from-office. And it will depend as we move forward. Just to remind, even from a country like India, where it is a temporary concession, what has been given by the government to work from home at this stage, and we'll have to wait and watch how those things move as we move forward.

Oh.

But the Euro has an average 70% is a good number from a work from office.

It will depend as we move forward just to remind you went from a country like India.

I know there is a temporary.

Concession, whereas reviewed by the government to work from office.

At this stage and we'll have to wait and watch households. These moves as we move forward, but having said that if those things continue we believe 70% to 75% is a good.

Speaker 4: But having said that, if those things continue, we believe 70-75% is a good...

Speaker 4: ratio to have a work from office as a mimics.

Issue to to have a work from office as a mix.

Speaker 4: because this is a new this hybrid model of the new way of from a BCB perspective as we move forward because you know client water will much prepare.

Because this is a new.

This hybrid model of the new <unk>.

Keshav Murugesh: I think it's, you know, it's very exciting to see the kind of conversations we're having with prospects, as well as existing clients in terms of completely new programs that, you know, they may not have considered before, but are now being pushed to look at, because they want to stay ahead of a game as far as AI and some of these new trends are concerned. And at the same time, also, you know, be smart in terms of cost leadership programs.

BCP perspective, as we move forward because.

And our client wanted to be much prepared for that and then I think from a margin perspective with.

Speaker 2: And I think from a margin perspective, what that means is that we should have.

What that means is that we should have easing headwinds right. I mean, this has been a pretty significant headwind for us over the last year year and a half as we got back into the office here, but we moved from 65% last quarter to 69% now what you should see over the next several quarters as if we're targeting 75%.

Speaker 2: easing headwinds, right? I mean, this has been a pretty significant headwind for us over the last year, year and a half as we got back into the office here, but we moved from 65% last quarter to 69%. Now, what you should see over the next several quarters is if we're targeting 75% for example, as an end state here, that quarter to quarter and the year over your headwinds that we see should start to obey from a margin perspective.

Keshav Murugesh: So that is the excitement for WNS in terms of, you know, just the quality of conversations we're having, the size of some of the deals, you know, that we are looking at. Let me talk with the, you know, cap to take out, which may have deferred, but it's committed to providing us that revenue that we spoke about, you know, earlier. So that's the first aspect. Beyond that, you know, as we come out of the macro environment, I actually think because of the quality of conversations that are taking place, and the new relationships being built by WNS with the, you know, client community, the prospect community, as well as the analyst and the advisor community, the ability for us to continue to lead them in terms of, you know, programs that they must do to stay relevant and ahead of their competition, is going to be front and center.

<unk> for example, as an end state here that the quarter to quarter and the year over year headwinds that we see should start to abate from a margin perspective.

Got it thank you.

Yeah.

Speaker 1: Thank you. And our next question coming from the line of Vincent Colenskill with Barrington Research, LNSO.

Thank you and our next question coming from the line of Ben.

<unk> scaled with Barrington Research your line is open.

Yeah.

Speaker 14: uh... yes uh... curious if we look at the travel volume decline uh... how much uh... in order of magnitude is company related versus the mac

Yes, I'm curious if we look at the travel volume decline.

How much.

Order of magnitude as company related versus the macro.

Yes. Good question, Vince I think if you look at again, it's hard to tell sometimes it's very difficult.

Speaker 2: Yeah, good question, Vince. I think if you look at, again, it's hard to tell. Sometimes it's very difficult, you know, in working with a client to decipher.

Working with the client to decipher.

Keshav Murugesh: And that gives us a lot of, you know, confidence about the business momentum, you know, for WNS, as well as I would say for the sector for the long term. Yeah, and just to reiterate, Keisha's comments are in there.

Speaker 2: If the volume is down, if it because the macro has dropped for their services and their geography or for the type of services that they're providing.

If the volume is down is it because the macro is dropped for their services and their geography or for the type of services that they're providing versus they are losing market share to another player or they've got internal challenges that they're dealing with what they've got.

Speaker 2: Versus they're losing market share to another player or they've got internal challenges that they're dealing with or they've got other, you know, other structural issues.

Keshav Murugesh: I think when you look at, for example, the four years prior to the pandemic, when the macro was healthy, what, what you'll see is that our business was steadily accelerating. And, you know, to the extent that traditionally people looked at these business, as cost production types of plays, the reality was, I think what you saw in a healthy macro, both in terms of clients, willingness to look at strategic outsourcing engagements in terms of the types of clients that we're looking at them, right.

Other other structural issues.

Speaker 2: You know, I would if just putting a cocktail napkin on this, I would say that, you know, two thirds of this is company specific and a third of this is macro.

I would.

Just putting a cocktail napkin on this I would say that two thirds of this is company specific in the third of this is macro.

Okay.

And my follow up is.

Speaker 14: And my follow up is if we look at the customer interactive business

If we look at the customer interactive business and.

Speaker 14: And we weigh opportunities and threats over say a three to five year time horizon, you know, from generative to AI. So what is your current thing?

We weigh opportunities and threats over say a three to five year time horizon.

Keshav Murugesh: These were clients that weren't struggling, these were clients looking for competitive advantage, looking for digitization and automation, looking for excess capacity, right. The reasons clients were coming to us for the four years prior to the pandemic were not about cost production. They were about needing to automate in order to remain competitive. The fact that we're in this environment now where automation, automation digitization and now the potential impacts for AI and Gen AI are front and center, right.

Oh.

From generally from Genesis.

<unk> AI.

Sort of what is your current thinking.

Speaker 2: I think we look at it as an opportunity, Vince. I mean, certainly there will be productivity pressure, but some of that is standard to our business as it is. Our contracts typically include three to 4% headwinds on a year-over-year basis structurally today.

I think we look at it as an opportunity events I mean, certainly there will be productivity pressure, but some of that is standard to our business as it is our contracts typically include 3% to 4% headwinds on a year over year basis structurally today.

Keshav Murugesh: That digitization theme is not going away. The only question is cost production, layer, an additional catalyst on top of it or not. But, again, I think back to my comment earlier, when you look at our top lying growth, when you look at the growth engine in our business, extremely healthy right now in this environment. It's the lost business, it's the volume, it's the project, it's the healthcare client, that's creating the challenge for us. This year, understood.

Speaker 2: What we've seen in the use cases and the client conversations that we've had today, and remember WNS is not operating at the entry level on CX work. What we're not doing low end level one helped us work. The stuff that we're doing is domain-centric, it's specialized, and that's the reason why clients are using us and not a...

What we've seen in the use cases and the client conversations that we've had to date and remember WNS is not operating at the entry level.

On <unk>, we're not doing low end level, one helped us work the stuff that we're doing is domains vend correct. Its specialized and thats. The reason why clients are using us and not a pure context center or a pure call center right.

Speaker 2: a peer contact center or a peer call center, right? But when we look at the opportunities that we're seeing in CX moving forward, especially as they relate to our customer.

But when we look at the opportunities that we're seeing in CX moving forward, especially as they relate to.

Sanjay Puria: And then as a follow up, just the commentary on how important it is to kind of continue increasing that number of employees that are working from the office. Is that being driven by client requirements here and maybe how does that impact your margin profile in terms of just the optimization of global delivery? Yeah, you know, so well from office, basically, you know, depending upon various factors, one, definitely as you mentioned, you know, it's based on the client requirement, it can be regulatory because of the data privacy and some of those other, you know, requirement.

Our customer base.

Speaker 2: It's more about improving quality of service. It's more about improving.

It's more about improving quality of service, it's more about improving retention of end customers or end customer satisfaction or hyper personalization of these interactions than it is about removing cost from the system. So.

Speaker 2: retention of end-customers or end-customer satisfaction or hyper-personalization of these interactions.

Speaker 2: than it is about removing cost from the system. So as Keisha said in his prepared remarks, almost everything that we're looking at here involves the human in the loop.

<unk> said in his prepared remarks, almost everything that we're looking at here involves the human in the loop when we look at these types of activities.

Speaker 2: When we look at these types of activities and benefits that we're going to be able to deliver for clients.

But we're going to be able to deliver for clients I think they're not thinking about this as how do I take 10%, 20%, 30% out of my cost I think they are thinking about this thing how do I improve the quality of my service so that I can drive topline.

Speaker 2: I think they're not thinking about this is how do I take 10, 20, 30% out of my cost. I think they're thinking about this thing. How do I improve the quality of my service so that I can drive top?

Sanjay Puria: So, it can be also from a, you know, geography specific and specifically in the tier two because of the infrastructure, right? Whether it's because in tier two cities, you have power outages, you have, you know, bandwidth challenges. So, you know, employees are required to be working from office. So, these are various factors which get considered to return to office. And we believe at this stage, you know, by the year end as an average 70% is a good number from a work from office.

Speaker 3: Yeah, I just want to add here that, you know, our dependence on pure contact center work is minimal. Really, what we do is much more in a digital CX kind of work where, you know, we're doing a lot of technology oriented work and the human is interacting much more to deliver an outcome for our clients. So the need for both to work together is critical. I think clients understand that WNS is constantly adding new technology, including Gen AI models.

Yes, I just wanted to add that you know our dependence on pure contact center work is minimal really what we do is much more in our digital CX kind of work.

We're doing a lot of technology oriented work.

Humans are interacting much motor delivering outcomes for our clients. So the need for both to work together.

I think clients understand the WNS is constantly adding new technology, including Jim AI models to possibly cannibalize some part of our own digital CX revenue in order to stay very relevant and become far more sticky in terms of the client relationships.

Sanjay Puria: And it will depend as we move forward, you know, just to remind even from a country like India, you know, where it is a temporary, you know, concession, what has been given by the government to work from office, work from home at this stage and we'll have to wait and watch how those things move as we move forward. But having said that if those things continue, we believe 70, 75% is a good ratio to have work from office as a mix because this is a new, this hybrid model of the new way of from a BCB perspective as we move forward because, you know, client want to be much prepared for that.

Speaker 3: to possibly cannibalize some part of our own digital CX revenue in order to stay very relevant and become far more sticky in terms of the client relationship and that's that's with the trust.

That's where their trust.

Speaker 3: you know, gets built out, you know, significantly. And we're also seeing a trend where, you know, where, you know, clients have moved completely to automated models. Customers, their end customers are now pushing back, saying that's not the model they want, particularly in, you know, premier kind of processes where ultimately an end customer.

It gets built out.

Significantly and we are also seeing a trend where.

Yes.

Clients have moved completely to automated and models customers. Their end customers are now pushing back saying that's not the model they want particularly.

Premier kind of processes.

Sanjay Puria: Yeah. And I think from a margin perspective, under what that means is that we should have easing headwinds, right? I mean, this has been a pretty significant headwind for us over the last year, year and a half as we got back into the office here. But, you know, we moved from 65% last quarter to 69% now. What you should see over the next several quarters is if we're targeting 75% for example, as an end state here, that the quarter to quarter and the year over your headwinds that we see should start to obey from a margin perspective. Got it.

Ultimately an end customer.

Speaker 3: very quickly wants the solution, wants to have an interaction sometimes with it, high quality individual as well. And that's the space that we are taking, that we are spending a lot of time on, which is, you know, the high growth, if you ask me, as potential for the long term, as well as, you know, high margin profile as well.

Very quickly launched our solution and wants to have an interaction and sometimes we're a bit high.

Unknown Executive: Thank you.

Entity individually as well.

The space that we are taking that we are spending a lot of time on rich's.

Hi go up if you ask me as potential for the long term as well as half.

The margin profile as well.

Speaker 3: Whatever we have discussed as of now on this call till now has been more around age 2 related issues and more around specific

Whatever we have discussed as of now on this call to now has been more around age two related issues are more around a specific.

Speaker 3: you know, customer-related issues around volumes, project-based work, you know, the delay that we spoke about in the large insurance, you know, capital ramp, and most importantly, around conservative client outlooks that have been provided to us at this point in time. But if you look at the macro, you know, kind of interactions that WMS is having, we are actually having really top-quality interactions with prospects on the other side, our existing customers.

Customer related issue is around volume project based work.

Delay that we spoke about in the large insurance captive.

Vincent Colicchio: And our next question coming from the line of Vincent Colensky with Braringson Research, you want to open? Yes, curious. If we look at the travel volume decline, how much in order of magnitude is company related versus the macro? Yeah, good question, Vince. I think if you look at, again, it's hard to tell. Sometimes it's very difficult, you know, in working with a client to decipher, you know, if the volume is down, is it because the macro has dropped for their services and their geography or for the type of services that they're providing versus their losing market share to another player or they've got internal challenges that they're dealing with or they've got.

And most importantly around comes over to client outlooks that have been provided to us at this point in time, but if you look at the macro.

For interactions the government misses hybrid actually having really top quality interactions with prospects on the other side, our existing customers beyond the three or four it is three or four clients that we spoke about on actually having great conversations with that all our acquired entities.

Speaker 3: Beyond the three or four clients that we spoke about are actually having great conversations with us. All our acquired entities are looking at growing even faster through new conversations they're having on an integrated basis with our client partner teams.

We are looking at growing even faster through new conversations that you're having on an integrated business with ours.

Client partner.

Teams and finally, we believe that with the investments we have made in AI and <unk> AI and the pilots that we are now driving sooner rather than later.

Speaker 3: And finally, we believe that with the investments we have made in AI and Gen AI and the pilots that we are now driving, sooner rather than later, boards

Keshav Murugesh: Other, you know, other structural issues, you know, I would just putting a cocktail napkin on this, I would say that, you know, two thirds of this is company specific and the third of this is macro. Okay, and my follow-up is if we look at the customer interactive business and we weigh opportunities and threats over say a three to five-year time horizon, you know, you know, from January, from January to January to via AI, so what is your current thinking?

Our boards.

<unk> companies, where our clients are desired will also be asking them about how quickly they will go.

Speaker 3: where our clients reside, we'll also be asking them about how quickly are they going to take the benefits of some of the solutions that people like WNS are providing for them. So I think the pressure will also be on the clients to start moving with their feet over the next few quarters. I think at that point in time, we will see a lot more opportunity and revenue schemes as well as margin uptake coming from some of those opportunities. So quite bullish about the long-term future based on how we're seeing our business momentum. Thank you.

The benefits of some of the solutions that people like WNS are providing for them. So I think that pressure will also be on the clients will start moving their feet over the next few quarters.

Wanted to ask you can see a lot more opportunity on revenues James as well as margin uptick coming from some of those opportunities. So we're quite bullish about the long term future.

Future based on how we're seeing our business momentum.

Thanks for all the color.

Keshav Murugesh: I think we look at it as an opportunity fence. I mean, certainly, there will be productivity pressure. But, you know, some of that is standard to our business as it is, our contract typically include three to four percent headwinds on a year over your basis structurally today. What we've seen in the use cases and the client conversations that we've had today, and remember WNS is not operating at the entry level on CX work.

Thanks Vince.

Speaker 15: Thank you.

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

Speaker 1: Thank you, ladies and gentlemen. At this time, we have no further questions in the Q&A queue. This will conclude today's conference call. Thank you for your participation. You may now disconnect.

Keshav Murugesh: We're not doing low-end level one help desk work. The stuff that we're doing is domain centric, it's specialized. And that's the reason why clients are using us and not a pure context and a pure call center, right? But when we look at the opportunities that we're seeing in CX moving forward, especially as they relate to our customer base, it's more about improving quality of service. It's more about improving retention of end customers or end customer satisfaction or hyper-personalization of these interactions than it is about removing cost from the system.

Okay.

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Okay.

[music].

Keshav Murugesh: So it's cases that this prepared remarks, almost everything that we're looking at here involves a human in the loop. When we look at these types of activities and benefits that we're going to be able to deliver for clients, I think they're not thinking about this is how do I take 10, 20, 30 percent out of my cost. I think they're thinking about this saying, how do I improve the quality of my service so that I can drive that line?

Yeah.

[music].

Keshav Murugesh: Yeah, I just want to add here that our dependence on pure context center work is minimal really. What we do is much more digital CX kind of work, where we're doing a lot of technology oriented work, and the human is interacting much more to deliver an outcome for our clients. So the need for both to work together is critical. I think clients understand that WNS is constantly adding new technology, including Genai models, to possibly cannibalize some part of our own digital CX revenue in order to stay very relevant and become far more sticky in terms of the client relationship.

Keshav Murugesh: That's where the trust gets built out significantly. And we're also seeing a trend where clients have moved completely to automated models. Customers, their end customers are now pushing back saying that's not the model they want, particularly in a premier kind of processes, where ultimately an end customer very quickly wants the solution, wants to have an end customer. The interaction sometimes with a high quality individual as well.

Okay.

[music].

Yes.

Hum.

[music].

Keshav Murugesh: And that's the space that we are taking, that we are spending a lot of time on, which is, you know, the high growth, if you ask me, as potential for the long term, as well as have, you know, high margin profile as well. Whatever we have discussed as of now on this call till now has been more around age 2 related issues and more around specific, you know, customer related issues around volumes, project ways, this work, you know, the delay that we spoke about in the large insurance, you know, capital ramp and most importantly around conservative, you know, client outlooks that have been provided to us, you know, at this point in time.

Yeah.

[music].

Yes.

[music].

Okay.

Hum.

[music].

Keshav Murugesh: But if you look at the macro, you know, kind of interactions that WNS is having, we're actually having really tough quality interactions with prospects on the side, our existing customers, beyond the three or four areas, you know, three or four trends that we spoke about are actually having great conversations with us, all are required entities, you know, looking at, you know, growing even faster through new conversations that are having on an integrated basis with our, you know, client partner teams and[inaudible] you know, you know, you know, you know, you know,[inaudible] Ltd. [inaudible] Ltd. Ltd.

[music].

Speaker 16: you

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Speaker 1: Good morning ladies and gentlemen, and welcome to the WNS Holdings fiscal 2024 2nd quarter earnings conference.

Good morning, ladies and gentlemen, and welcome to the WNS Holdings fiscal 'twenty 'twenty four second quarter earnings Conference call. At this time all participants are in a listen only mode. After management's prepared remarks, we will conduct a question and answer session and instructions for how to ask a question will follow at that time.

Speaker 1: At this time, all participants are in a listen-only mode. After management's prepared remarks, we will conduct a question-and-answer session and instructions for how to ask a question will follow at that time. As a reminder, this call is being recorded for replay purposes.

As a reminder, this call is being recorded for replay purposes.

Speaker 1: Now, I would like to turn the call over to David Mackey, WNS Executive Vice President of Finance and Head of Investor Relations. David?

Now I would like to turn the call over to David Mackey, WNS Executive Vice President of Finance and head of Investor Relations David.

Thank you and welcome to our fiscal 2024 second quarter earnings call with me today on the call I have Wns's CEO ketchup Mara Geis, and Wns's CFO Sanjay Puria.

Speaker 2: Thank you and welcome to our fiscal 2024 second quarter earnings call. With me today on the call, I have WNSS CEO , Keshav Murugesh, and WNSS CFO , Sanji Puri.

Speaker 2: Press release, detailing our financial results was issued earlier.

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 Dot com.

Speaker 2: This release is also available on the investor relations section of our website at www.wns.com.

Today's remarks will focus on our results for the fiscal second quarter ended September 32023.

Speaker 2: Today's remarks will focus on the results for the fiscal second quarter ended September 30th, 2023.

Speaker 2: Some of the matters that will be discussed on today's call are forward looking. Please keep in mind that these forward looking statements are subject to known and unknown risks and uncertainties. It could cause actual results to differ materially from those expressed or implied by.

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

David Mackey: [inaudible][inaudible] and thank you for your time[inaudible] Now, I would like to turn the call over to David Mackey, WNS Executive Vice President of Finance and Head of Investulations. David? Thank you and welcome to our fiscal 2024 second quarter earnings call. With me today on the call, I have WNS CEO, Keshav Murugesh, and WNS CFO, Sanjay Puria. Today's remarks will focus on the results for the fiscal second quarter ended September 30th, 2023.

Speaker 2: Such risks and uncertainties include, but are not limited to, those factors set forth in the company's form 20F. This document is also-

Such risks and uncertainties include but are not limited to those factors set forth in the Companys form 20-F.

This document is also available on the company's website.

Speaker 2: During today's call, management will reference certain non-GAAP financial measures, which we believe provide useful information for...

During today's call management will reference certain non-GAAP financial measures, which we believe provide useful information for investors reconciliations of these non-GAAP financial measures to GAAP results can be found in the press release issued earlier today.

Speaker 2: Reconciliation of these non- GAAP financial measures to gap results can be found in the press release issued earlier today.

Speaker 2: Some of the non-GAAP financial measures management will discuss are defined as follows net revenue is defined as.

Some of the non-GAAP financial measures management will discuss are defined as follows net revenue is defined as revenue less repair payments.

Speaker 2: Adjusted operating margin is defined as operating margin, excluding amortization of intangible assets, share-based compensation.

Adjusted operating margin is defined as operating margin, excluding amortization of intangible assets share based compensation acquisition related expenses or benefits and goodwill impairment.

Speaker 2: acquisition related expenses or benefits, and goodwill impairment.

Speaker 2: Adjusted Net Income or ANI is defined as profit excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits, goodwill impairment, and all associated taxes. These terms will be used in the future.

Adjusted net income or a ni is defined as profit excluding amortization of intangible assets share based compensation acquisition related expenses or benefits goodwill impairment and all associated taxes.

These terms will be used throughout the call.

Speaker 2: I would now like to turn the call over to WNSF's CEO , Kesha Murugan. Kesha?

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

Ketchup merger.

Yes.

Yeah.

Thank you David good morning, everyone.

Speaker 3: In the second quarter, WNAS delivered healthy financial results in the face of a challenging metro environment and continued to make progress on our AI and gendered AI initiative.

In the second quarter WNS deliver healthy financial results in the face of a challenging macro environment.

<unk> continued to make progress on our AI agenda initiatives.

Speaker 3: The company posted Q2 net revenue of $325 million, representing a year-over-year increase of 12.3% on a reported basis and 11% constant currency.

The company posted Kyoto net revenue of $325 million.

Presenting a year over year increase of 12, 3% on a reported basis and 11% constant currency.

Speaker 3: sequentially net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency basis after adjusting for effect.

Sequentially net revenue increased by two 4% on a reported basis and two 1% on a constant currency basis after adjusting for FX.

In the quarter WNS added seven new logos and expanded 27 existing relationships.

Speaker 3: In the quarter, WNS added seven new logos and expanded 27 existing relationships.

Speaker 3: The company also posted adjusted operating margins of more than 22% and delivered year-over-year growth in adjusted EPS of 16%.

<unk> also posted adjusted operating margins of more than 22% and delivered year over year growth and adjusted EPS of 16%.

While second quarter results were solid.

Speaker 3: While second quarter results were solid, we do expect increasing revenue pressure in the second half of fiscal 2024, driven by further reductions in volume commitments from certain clients.

Do expect increasing the revenue pressure in the second half of fiscal 'twenty when before driven by further reductions in volume commitments from certain times slowing demand for project based work and delays in the ramp up of our large insurance captive.

Speaker 3: slowing demand for project-based work, and delays in the ramp of our large insurance captive.

Speaker 3: Overall, Q2 volumes remained fairly resilient. However, we did see some erosion in September and have received additional reductions in volume commitments for Q3 and Q4 from certain clients.

Overall Q2 volumes remained fairly resilient. However, we did see some erosion in September .

And have received additional reductions and volume commitments for Q3 and Q4 from certain clients.

Speaker 3: These reductions are most evident in the travel vertical and are driven by both macro trends and some client specific dynamics.

These reductions are most evident in the travel vertical and are driven by both macro trends.

And some client specific dynamics.

We've also seen a modest deterioration in demand for certain types of projects.

Speaker 3: We have also seen a modest deterioration in demand for certain types of projects.

Speaker 3: This is impacting our analytics and procurement businesses, including a desaleration in growth for our newly acquired entities.

This is impacting our analytics and procurement businesses.

<unk> deceleration in growth for our newly acquired entities.

Speaker 3: Additionally, second half visibility has also been reduced to reflect client delays in the ramp of our large insurance carve-out.

Additionally, <unk>.

Second half visibility has also been reduced.

Flex client delays in the ramp of our large ensuring skye walls.

Speaker 3: This revenue, which is contractually committed over the life of the contract, is now expected to show meaningful ramps in both 2025 and fiscal 26.

This revenue, which is contractually committed over the life of the contract is now expected to show meaningful ramps in both 2025 in fiscal 2006.

Speaker 3: Despite these short-term macro challenges, demand for our services remains strong, and the demand to long-term outlook is excellent.

Despite these short term macro challenges demand for our services remained strong and the demand the long term outlook is excellent.

Speaker 3: Our new business pipeline continues to be extremely healthy, driven by clients' need to digitize and automate their processes, as well as reduce costs.

Our new business pipeline continues to be extremely healthy driven by clients need to digitize and automate their processes as well as reduced cost.

The pipeline now includes more large deal opportunities than ever.

Speaker 3: The pipeline now includes more large deal opportunities than ever, which are spread across verticals, services, as well as geography.

David Mackey: Some of the matters that will be discussed on today's call are forward-looking. Please keep in mind that 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 in the company's form 20F. This document is also available on the company's website. During today's call, management will reference certain non-gap financial measures which we believe provide useful information for investors.

Our spread across verticals services as well as geographies.

Speaker 3: We also continue to see solid deal flow and client decision making with both new client additions and existing client expansions remaining robust.

We also continue to see solid deal flow and client decision, making with both with new client additions and existing client expansions remaining robust.

I would also like to reiterate that.

Speaker 3: I would also like to reiterate that the pressure we are facing is entirely related to macro challenges and client-specific issues and not impacts from AI or generative AI.

The pressure we are facing is entirely related to macro challenges and client specific issues and not impact from AI.

David Mackey: Reconciliation of these non-gap financial measures to gap results can be found in the press release issued earlier today. Some of the non-gap financial measures management will discuss are defined as follows. Net revenue is defined as revenue less repair payments. Adjusted operating margin, if defined as operating margin, excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits, and goodwill impairments. Adjusted net income, or ANI, is defined as profit excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits, goodwill impairments, and all associated taxes. These terms will be used throughout the call.

Our agenda.

Speaker 3: We currently anticipate that the outsized revenue headwinds of 18% that we are facing in fiscal 2024, including the ramp down of a large healthcare process, the transition of a top procurement client from onsite to offshore, and slowdowns in both volume and discretionary projects should present an accelerated growth opportunity for WNS in fiscal 2025.

We currently anticipate that the outsized revenue headwinds of 18% that we are facing in fiscal 2024, including the ramp down of a large health care process. The transition of adult procurement client from onsite to offshore and.

Slowdowns in both volume and discretionary projects should present, an accelerated growth opportunities for WNS in fiscal 2025.

I would now like to provide you with an update on our progress with AI as well as gender to reality.

Speaker 3: I would now like to provide you with an update on our progress with AI as well as generative AI.

Speaker 3: First, let me begin by saying that we have seen nothing to date, which changes our belief that AI and Gen AI are tools that are most impactful when integrated as part of a broader end-to-end digital solution.

First let me begin by saying that we have seen nothing to date with changes our belief that AI and Jenny.

David Mackey: I would now like to turn the call over to WNF. Thank you, David. Good morning, everyone. In the second quarter, WNF delivered healthy financial results in the face of a challenging macro environment and continued to make progress on our AI and generative AI initiatives. Sequentially, net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency basis after adjusting for effects. In the quarter, WNF added seven new logos and expanded 27 existing relationships.

That are most impactful when integrated as part of a broader end to end digital solution.

Every use case wns's develop it requires deep domain expertise process knowledge and analytics capabilities and human intelligence to leverage these technologies and deliver business outcomes.

Speaker 3: Every use case WNS is developing requires deep domain expertise, process knowledge, analytics capabilities, and human intelligence to leverage these technologies and deliver business outcomes.

David Mackey: The company also posted adjusted operating margins of more than 22% and delivered year-over-year growth in adjusted EPS of 16%. While second-quarter results were solid, we do expect increasing revenue pressure in the second half of fiscal 2024, driven by further reductions in volume commitments from certain times, slowing demand for project-based work and delays in the ramp of our large insurance capital. Overall, Q2 volumes remained fairly resilient. However, we did see some erosion in September and have received additional reductions in volume commitments for Q3 and Q4 from certain clients.

Speaker 3: In addition, co-creation remains foundational to how we collaborate with our clients to identify opportunities, build and then deploy these solutions.

In addition.

Creation remains foundational to how we collaborate with our clients to identify opportunities build and then deploy these solutions.

Since last quarter, we have formalized strategic partnerships with industry leaders, including Microsoft Azure opening.

Speaker 3: Since last quarter, we have formalized strategic partnerships with industry leaders, including Microsoft, Azure, OpenAI, AWS, and Google, and are working closely with other partners like Appian, Imagia, BlackLine, and Nice, who are building GenAI into their products.

AWS and Google.

Working closely with other partners like <unk> <unk>.

<unk> Black line and nice who are building gen AI into their products.

Speaker 3: We have also rolled out company-wide AI and Gen AI training programs, which today include 25 unique courses across four tracks designed to promote awareness, evangelism, expertise, and leadership.

We have also rolled out companywide AI and <unk> AI training programs, which today include 25 unique courses across four tracks designed to promote awareness evangelism expertise and leadership.

David Mackey: These reductions are most evident in the travel vertical and are driven by both macro trends and some client-specific dynamics. We have also seen a modest deterioration in demand for certain types of projects. This is impacting our analytics and procurement businesses, including a deceleration in growth for our newly acquired entities. Additionally, second half visibility has also been reduced to reflect client delays in the ramp of our large insurance carve-out. This revenue, which is contractually committed over the life of the contract, is now expected to show meaningful ramps in both 2025 and fiscal 26.

Speaker 3: WNS has partnered with industry leaders such as Google, Mindmap Consulting, KPMG, LinkedIn Learning, and Oxford University to create these programs.

WNS has partnered with industry leaders such as Google.

Mac consulting KPMG, Linkedin learning and Oxford University to create these programs.

Speaker 3: As a result of our focused efforts, we have now expanded the number of use cases to more than 90 with approximately 20 currently built and ready for deployment and an additional 7 of our proprietary digital assets which now have Gen AI embedded.

As a result of our focused efforts we have now expanded the number of use cases to more than 90.

Approximately 20 currently built and ready for deployment and an additional seven of our proprietary digital assets, which now have gen AI embedded.

Our active client conversations have doubled to more than 40.

Speaker 3: Our active client conversations have doubled to more than 40.

Speaker 3: with over 10 of these in advanced discussions and three already committed to Gen AI implementation with us.

With over 10 of these in advanced discussions and three already committed to journey II implementation with us.

Speaker 3: And while we continue to make solid progress across the pipeline of activities, it is important to note that we are seeing many clients wanting to proceed carefully on Gen AI initiatives as they move towards the implementation phase.

And while we continue to make solid progress across the pipeline of activities.

It is important to note that we are seeing many clients wanting to proceed carefully on Jennie O initiatives as they move towards the implementation phase.

Speaker 3: This is the result of a wide range of issues and risks, including build and run costs.

This is the result of a wide range of issues and risks, including build and run costs.

Data privacy concerns legal and regulatory issues and the inherent potential for board data quality and false results.

Speaker 3: Data privacy concerns, legal and regulatory issues, and the inherent potential for poor data quality and false results.

Speaker 3: With that being said, we now have two examples of in-production solutions which we would like to share with you today.

With that being said, we now have two examples of in production solutions, we would like which we would like to share with you today.

Speaker 3: In August , the SmartCube launched a new release of Amplify Pro, the company's on-demand digital procurement intelligence platform.

In August just Martin you've launched a new release of <unk>.

Keshav Murugesh: Despite these short-term macro challenges, demand for our services remains strong and the demand to long-term outlook is excellent. Our new business pipeline continues to be extremely healthy, driven by client's need to digitize and automate their processes as well as reduce cost. The pipeline now includes more large-deal opportunities than ever, which are spread across verticals services as well as geographies. We also continue to see solid deal flow and client decision-making with both new client additions and existing client expansions remaining robust.

<unk> brought the company's on demand digital procurement intelligence platform.

Speaker 3: The latest version is powered by Gen AI and a custom natural language query framework to provide enhanced search capabilities, expanded category coverage, and improved user experience.

The latest version is powered by <unk>, and then custom natural language, creating a framework to provide enhanced such capabilities expanded category coverage.

Proved user experience.

Speaker 3: The upgraded platform leverages GPT 3.5 models, which have been specifically trained for procurement professionals based on proprietary content curated by the SmartCubes category and commodity specialists.

The upgraded platform Leverages GPT three five models, which have been specifically trained for procurement professional professionals based on proprietary content curated by the smart Gibbs category and commodity specialists.

Speaker 3: The model also provides creativity of answers to source data and area where many current GPT models often fall short.

Keshav Murugesh: I would also like to reiterate that the pressure we are facing is entirely related to macro challenges and client-specific issues and not impacts from AI or generative AI. We currently anticipate that the outsized revenue headwinds of 18% that we are facing in fiscal 2024, including the ramp down of a large healthcare process, the transition of a top procurement client from onsite to offshore and slowdowns in both volume and discretionary projects should present an accelerated growth opportunity for WNES.

The model also provides traceability of answers to source data and area, whereas many current GPT models often fall short.

Speaker 3: The enhanced capabilities are currently being used by more than 80 clients who subscribe to Amplify Pro's unlimited paid tier model. And clearly feedback in the early days has been extremely positive.

The enhanced capabilities are currently being used by more than 80 clients, who subscribed to amplify Bros. Unlimited bid deal model and clearly.

Feedback in the early days has been extremely positive.

We expect these new enhancements along with future upgrades to the platform will now help drive increases in paid subscription revenue.

Speaker 3: We expect these new enhancements, along with future upgrades to the platform, will now help drive increases in paid subscription revenue.

Speaker 3: In addition, WNS has also recently implemented a new recovery as a service solution for a large client in the insurance vertical. This proprietary offering combines AI models and a team of claims specialists with deep insurance expertise to identify and recover property claims costs which should have been paid by

In addition, WNS has also recently implemented a new recovery as a service solution for a large client in the insurance political.

Keshav Murugesh: In fiscal 2025, I would now like to provide you with an update on our progress with AI as well as generative AI. First, let me begin by saying that we have seen nothing to date which changes our belief that AI and gen AI are tools that are most impactful when integrated as part of a broader end-to-end digital solution. Every use case, WNS is developing, requires deep domain expertise, process knowledge, analytics capabilities and human intelligence to leverage these technologies and deliver business outcomes.

This proprietary offering combines AI models and a team of claims specialists with deeply insurance expertise to identify and recover property claims costs.

It should have been paid by third parties.

Speaker 3: WNS has engineered, cleansed and structured the client's historical data, built and trained the models, integrated them into the client's cloud technology environment and started delivering immediate results.

WNS has engineered cleansed and structure the client's historical data.

<unk> trend the models integrated them into the client's cloud technology environment and started delivering immediate results. This solution was identified by the WNS digital consulting team using our co creation approach and represents a completely new offering for the industry.

Speaker 3: This solution was identified by the WNS Digital Consulting team using our co-creation approach and represents a completely new offering for the insurance industry and our clients.

For the insurance industry and our clients.

Claims recoveries are a key area of focus for our P&C insurance clients and the WNS solution is able to meaningfully reduce cost leakage when compared to current approaches.

Speaker 3: Claims recoveries are a key area of focus for PNC insurance clients and the WNS solution is able to meaningfully reduce cost leakage when compared to current approaches.

Keshav Murugesh: Since last quarter, we have formalized strategic partnerships with industry leaders, including Microsoft, Azure, OpenAI, AWS and Google, and are working closely with other partners like Appian, Imagine, Imagine, Blackline and Knife who are building Gen AI into their products. We have also rolled out company-wide AI and Gen AI training programs, which today include 25 unique courses across four tracks designed to promote awareness, evangelism, expertise and leadership. WNS has partnered with industry leaders such as Google, Mindmap, Consulting, KPMG, LinkedIn Learning and Oxford University to create these programs.

The offering has been priced in an outcome based model, where WNS receives a person page of the amounts recovered for the client.

Speaker 3: The offering has been priced in an outcome-based model where WNS receives a percentage of the amounts recovered for the client.

Speaker 3: This results oriented approach ensures that we are rewarded for performance and that both WNS and the client share in the value delivered.

This results oriented approach ensures that we are rewarded for performance and that both WNS and the client share in the value delivered.

Speaker 3: In summary, while the macroeconomic environment is creating some challenges for WNS in the back half of this year, the company continues to expect double-digit revenue growth and especially leading stable margins.

In summary, while the macroeconomic environment is creating some challenges for WNS in the back half of this year.

The company continues to expect double digit revenue growth.

Keshav Murugesh: As a result of our focused efforts, we have now expanded the number of use cases to more than 90, with approximately 20 currently built and ready for deployment, and an additional seven of our appropriately digital assets, which now have Gen AI embedded. Our active client conversations have doubled to more than 40, with over 10 of these in advanced discussions, and three already committed to Gen AI implementation with us. And while we continue to make solid progress across the pipeline of activities, it is important to note that we are seeing many clients wanting to proceed carefully on Gen AI initiatives as they move towards the implementation phase. This is the result of a wide range of issues and risks, including build and run costs, data privacy concerns, legal and regulatory issues and the inherent potential for poor data quality and false results.

That's the leading stable margins.

Speaker 3: We also remain optimistic that the company's healthy pipeline, strong underlying business momentum, and reducing headwinds sets the company up for accelerated growth in fiscal 2025.

We also remain optimistic that the company's healthy pipeline strong underlying business momentum.

Reducing headwinds sets the company up for accelerated growth in fiscal 2025.

In addition, we have seen nothing that changes our belief that AI and Jenny rep.

Speaker 3: In addition, we have seen nothing that changes our belief that AI and Gen AI represent more opportunity than risk for our business.

Represent more opportunity than risk for our business.

Speaker 3: By actively embracing this technology shift, WNS remains well positioned to deliver meaningful business outcomes and help our clients create value.

By actively embracing this technology shift WNS remains well positioned to deliver meaningful business outcomes and help our clients create value.

Speaker 3: I would now like to turn the call over to our CFO , Sanjay Puria, to further discuss our results as well as the outlook. Sanjay?

I would now like to turn the call over to our CFO Sanjay Puria.

Further discuss our results as well as the outlook Sanjay.

Thank you Keisha.

Speaker 4: In the fiscal second quarter, WNET net revenue came in at $325 million, up 12.3% from $289.3 million posted in the same quarter of last year, and up 11% on a constant currency basis.

In the fiscal second quarter WNS net revenue came in at <unk> hundred $25 million.

12, 3% from $289 $3 million posted in the same quarter of last year.

11% on a constant currency basis.

Speaker 4: Sequentially net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency base.

Gradually net revenue increased by $2 four plus they're on a reported basis and to acquire once let's say on a constant currency basis.

Keshav Murugesh: With that being said, we now have two examples of in-production solutions we would like to share with you today. In August, the Smart Cube launched a new release of Amplify Pro, the company's own demand digital procurement intelligence platform. The latest version is powered by Gen AI and a custom natural language query framework to provide enhanced search capabilities, expanded category coverage and improved user experience. The upgraded platform leverages GPT 3.5 models, which have been specifically trained for procurement professionals based on proprietary content curated by the Smart Cube's category and commodity specialists.

Our sequential revenue growth was driven by broad based momentum with both new and existing clients and favorable currency movements.

Speaker 4: Our sequential revenue growth was driven by broad-based momentum with both new and existing clients and favorable currency movements. This benefit was partially offset by volume reductions with certain clients, primarily in transit.

Keshav Murugesh: The model also provides traceability of answers to source data and area where many current GPT models often fall short. The enhanced capabilities are currently being used by more than 80 clients who subscribe to Amplify Pro's unlimited paid tier model. And clearly feedback in the early days has been extremely positive. We expect these new enhancements along with future upgrades to the platform will now help drive increases in paid subscription revenue. In addition, WNS has also recently implemented a new recovery as a service solution for a large client in the insurance vertical.

This benefit was partially offset by volume reduction with telcos lie primarily in planning.

Speaker 4: In the second quarter, WNF recorded $500,000 of high-margin short-term revenue.

In the second quarter diluted recorded half a million dollars of high margin short term revenue.

Speaker 4: Existing operating margin in quarter 2 was 22.4% as compared to 20.6% reported in the same quarter of fiscal 2023 and 21% last quarter.

Adjusted operating margin in quarter, two was 22, 4% as compared to 26% reported in the same quarter of fiscal 2023.

21% last quarter.

<unk> adjusted operating margin improvement was the result of operating leverage on higher volumes improved productivity lower SG&A expenses driven by provision reversal.

Speaker 4: Year over year, adjusted operating margin improvement was the result of operating leverage on higher volumes, improved productivity, lower SGM expenses, driven by provision reversals for performance incentives and back there. And favorable guarantee moment.

Performance incentives on bad debt.

Liberty was R&D moments.

Speaker 4: This benefits more than offset headwinds from annual wage increases and increased return to office costs.

These benefits more than offset Henry.

Annual wage increases.

Please let me turn to office costs.

Sequentially margins increased as a result of higher volumes improved productivity and lower SG&A costs.

Speaker 4: Sequentially, margin increased as a result of higher volumes, improved productivity, and lower SG&A costs.

This benefit was partially offset by wage increases and higher return to office costs.

Speaker 4: These benefits were partially offset by wage increases and higher return to office costs.

The company's net other income expense was <unk> 6 million of net expense in the second quarter.

Speaker 4: The company's net other income expense was $3.6 million of net expense in the second quarter as compared to $0.7 million of net expense reported in quarter two of fiscal 2023 and $2 million of net expense last quarter.

As compared to $1 7 million of net expense, we reported in quarter, two our fiscal 2023 and two.

$2 million of net expense last quarter.

Year over year net interest expense increased due to higher debt levels and lower cash balances driven by our acquisition and share repurchases.

Speaker 4: Year over year, net interest expense increased due to higher debt level and lower cash balances, private vital acquisition and share reporting.

Keshav Murugesh: This proprietary offering combines AI models and a team of claims specialists with deep insurance expertise to identify and recover property claims costs which should have been paid by third parties. WNS has engineered, clenched and structured the client's historical data, built and trained the models, integrated them into the client's cloud technology environment and started delivering immediate results. This solution was identified by the WNS Digital Consulting team using our co-creation approach and represents a completely new offering for the insurance industry and our clients.

Speaker 4: Sequentially, the unfavorable variance was a result of higher debt levels and lower average cash balances and $0.8 million of interest income on tax refunds received in Q1.

Sequentially the unfavorable net and was a result of higher debt levels and lower average cash balances and $8 million of interest income on tax refund received in quarter one.

Speaker 4: In quarter two, the company also reversed $21.9 million provision for contingent consideration relating to our acquisition of Buram. The reversal is based on current growth expectations, which remain healthy but below targeted levels. This benefit has been excluded from our adjusted net income.

In quarter two the company also he was $21 9 million provision.

<unk> consideration.

Turning to our acquisition of <unk>.

The demand based on current expectations.

Our expectation.

<unk> remain healthy but below targeted levels.

Benefit has been excluded from our adjusted net income.

Keshav Murugesh: Claims recoveries are a key area of focus for PNC insurance clients and the WNS solution is able to meaningfully reduce cost leakage when compared to current approaches. The offering has been priced in an outcome-based model where WNS receives a percentage of the amounts recovered for the client. This results oriented approach ensures that we are rewarded for performance and that both WNS and the client share in the value delivered.

Speaker 4: WNS effective tax rate for quarter 2 came in at 22% up from 19.8% last year and up from 21.8% last quarter.

WNS effective tax rate for the quarter to gaming at 22% up from 19, 8% last year and up from 21, 8% last quarter.

Speaker 4: both year over year and sequentially, changes in our effective tax rate are largely the result of shifts in our geographical profit mix and changes to the mix of bulk delivered from tax incentive facilities.

Both year over year and sequentially J&J.

<unk> tax rate.

Largely the result of shift in our geographical profit mix changes with a mix of both delivered from tax incentive facilities.

Speaker 4: The company's Excessive Net Income for Quarter 2 was $54.1 million compared with $47.2 million in the same quarter of fiscal 2023 and $50.6 million last quarter.

The Companys adjusted net income for quarter, two was $54 1 million.

Keshav Murugesh: In summary, while the macroeconomic environment is creating some challenges for WNS in the back half of this year, the company continues to expect double digit revenue growth and especially leading stable margins. We also remain optimistic that the company is healthy by applying strong underlying business momentum and reducing headwinds such that the company up for accelerated growth in fiscal 2025. In addition, we have seen nothing that changes our belief that AI and Gen AI represent more opportunity than risk for our business. By actively embracing this technology shift, WNS remains well-positioned to deliver meaningful business outcomes and help our clients create value.

This was $47 2 million in the same quarter of fiscal 2023, and $15 6 million last quarter.

Speaker 4: Adjusted deluded earnings were $1.09 per share in order to up 16% versus 94% in the second quarter of last year and up 8% from $1.01 last quarter.

Adjusted diluted earnings were $1, and 90% plus share in quarter, two up 16% versus 90% in the second quarter of last year and up 8% from $1.01 loss market.

As of September 3200, 23, WNS balances in cash and investments.

Speaker 4: As of September 30, 2023, WNS balances in cash and investments totaled $248.1 million and the company had $154.1 million in debt.

<unk> hundred $48 1 million.

And the company had $164 1 million in debt.

Speaker 4: In quarter two, WNS generated $68.5 million of cash from operating activities, incurred $15.7 million in capital expenditures, and made debt repayments of $38 million.

In quarter, two WNS generated $68 $5 million of cash from operating activities.

$15 7 million in capital expenditures.

Sanjay Puria: I would now like to turn the call over to our CFO, Sanjay Puriya, to further discuss our results as well as the outlook. Sanjay. Thank you, Keshav.

And made debt repayments of $38 million.

DSO in the second quarter came in at 35 days.

Speaker 4: DSO in the second quarter came in at 35 days as compared to 30 days reported in quarter 2 of last year and 34 days last quarter.

Compared to 30 days reported in quarter two of last year, and 44 days last quarter.

Sanjay Puria: In the fiscal second quarter, WNS net revenue came in at $325 million of 12.3% from $289.3 million posted in the same quarter of last year and of 11% on a constant currency Situentially Net Revenue Increased by 2.4% on a reported basis and 2.1% on a constant currency base. Our sequential revenue growth was driven by broad-based momentum with both new and existing lines and favorable currency movements. This benefit was partially offset by volume reduction with certain lines, primarily in travel.

Speaker 4: In September , at our annual general meeting, WNF shareholder approved a 3.3 million share repurchase proposal.

In September at our annual General meeting WNS shareholders approved a three 3 million shares he put in Buffalo.

Our board of Directors also approved annuity purchase program and the company expects to begin buying back shares during fiscal <unk>.

Speaker 4: Our Board of Directors had also approved a new repartus program and the company expects to begin buying back shares during the skills of autumn 3.

Speaker 4: With respect to our key operating metrics, total headcount at the end of quarter was 59,873. And our attrition rate in the second quarter was 30%, as compared to 41% reported in quarter two of last year, and 32% in the previous quarter.

With respect to our key operating metrics total head count at the end of quarter was 59 873.

Depletion rate in the second quarter was pretty closely.

Compared to Q1.

<unk> in order to last year.

2% in the previous quarter.

Speaker 4: We expect attrition to average the mid 30% is, but the rate could remain volatile, water to quarter in the current labour and wire.

We expect accretion to average.

Sanjay Puria: In the second quarter, W was recorded half million dollars of high margin short term revenue. Existed operating margin in quarter two was 22.4% as compared to 20.6% reported in the same quarter of fiscal 2023 and 21% last quarter. Year over year, adjusted operating margin improvement was the result of operating leverage on higher volumes, improved productivity, lower S.G.N, expenses, driven by provision reverses for performance incentives and back there and favorable currency movements.

Great.

Well Cynthia.

But the rate will remain volatile.

Quarter to quarter in direct labor and widening.

Speaker 4: Build seat capacity at the end of the quarter two increased to 39,775 and WNS continued our progress towards in-person operation, averaging 69% work from office during the quarter.

These capacity at the end of the quarter too.

Is 239775, and WNS continue our progress toward important operations, averaging 69, firstly, what put them office during the quarter.

In our press release issued earlier today.

Speaker 4: In our press release issued earlier today, WNES provided our revised full-year guidance for fiscal 2024.

<unk> provided our revised full year guidance for fiscal 2024.

Speaker 4: Based on the company's current visibility levels, we expect net revenue to be in the range of $1,254,000,000 to $1,300,000,000, representing year-over-year growth of 8% to 12% on a both reported and constant currency basis.

Based on the company's current visibility levels, we expect net revenue to be in the range of $1 billion and $254 million to $1 billion and $300 million.

Sanjay Puria: This benefits more than offset headwinds from annual wage increases and increase return to office costs. Sequentially, margin increase as a result of higher volumes, improved productivity and lower S.G.N, costs. This benefits was partially offset by wage increases and higher return to office costs.

At present the year over year.

Our growth is plus <unk>.

On a both a reported and constant currency basis.

Speaker 4: Top-line projection assumes an average British pound to US dollar exchange rate of 1.23 for the remainder of the fiscal year.

Topline projection assumes an average British pound to Euro dollar exchange rate of 123 for the remainder of the fiscal year.

Sanjay Puria: The company's net other income expense was 3.6 million dollars of net expense in the second quarter as compared to 0.7 million dollars of net expense reported in quarter two of fiscal 2023 and 2 million dollars of net expense last quarter. Year over year, net interest expense increased due to higher debt levels and lower cash balances, driven by acquisition and share repercussions. Sequentially, the unfavorable variance was the result of higher debt levels and lower average cash balances and 0.8 million dollars of interest income or tax reference received in quarter one.

And we currently have 97% visibility to the midpoint of the range.

Speaker 4: and we currently have 97% visibility to the midpoint of the range.

<unk> mentioned, our revised revenue guidance includes.

Speaker 4: As Keshav mentioned, our revised revenue guidance includes additional headwinds from reduced volume projection from certain clients, lower project revenue expectations, and delays in the ramps of our large insurance capital.

Headwinds from reduced volume projections from certain clients.

Lower project revenue expectation.

And the last of our large insurance captive.

Speaker 4: As was the case last quarter, it is important to note that some of the volume reduction are based on client commitment which could prove to be conservative based on the focus in process.

As was the case last quarter. It is important to note that some of the volume reduction RBS offline commitment, which could prove to be closed already based on the forecasting process.

Speaker 4: We have incorporated this lower estimates into our guidance consistent with the company's visibility base.

We have incorporated this lower estimate into our guidance.

Sanjay Puria: In quarter two, the company also reversed 21.9 million dollars provision for contingent consideration relating to our acquisition of Gura. The reversal is based on certain growth expectations which remain healthy but below targeted levels. This benefits has been excluded from our adjusted net income.

Systems with the company's visibility did afterwards.

Speaker 4: Full year adjusted net income for fiscal 2024 is expected to be in the range of 201 million dollars to 211 million dollars based on an 83 rupee to US dollar exchange rate for the remainder of fiscal 2024.

Full year adjusted net income for fiscal 2024.

This will be in the range of $201 million.

$111 million.

Based on 83 rupee to U S dollar exchange rate for the remainder of fiscal year 'twenty to 'twenty four.

Sanjay Puria: WS effective tax rates for quarter two came in at 22% up from 19.8% last year and up from 21.8% last quarter. Both year over year and sequentially changes in our effective tax rate are largely the result of shifts in our geographical profit mix and changes to the mix of both delivered from tax incentive facilities.

This implied existed EPS of $4 and four to $4 and 24 things assuming.

Speaker 4: This implies adjusted EPS of $4.04 to $4.24, assuming a diluted share sum of approximately 49.8 million you get from a

Diluted shares of <unk>.

<unk> 49 8 million shares.

With respect to capital expenditures WNS currently expects our requirement for fiscal 2024.

Speaker 4: With respect to capital expenditures, WNS currently expects our requirement for fiscal 2024 to be up to $60 million. We'll now open the call for questions. Operator.

Up to $60 million.

But the calls for questions operator.

Sanjay Puria: The company's adjusted net income for quarter two was 54.1 million dollars compared with 47.2 million dollars in the same quarter of fiscal 2023 and 50.6 million dollars last quarter, were $1.09 per share in order to up 16% versus 94% in the second quarter of last year and of 8% from $1.01 last quarter. As of September 30, 2023, WNS balances in cash and investment totaled $248.1 million and the company had $164.1 million in debt.

Certainly ladies and gentlemen, if you wish to ask a question at this time. Please press star one one on your Touchtone telephone.

Speaker 1: Certainly, please sign Jellman if you wish to ask a question at this time. Please press star 11 on your touchstone tell phone. If your question has been answered or you wish to remove yourself from the queue, please press star 11 again. In the interest of time and to enable everyone on the call.

Question has been answered or you wish to have yourself from the queue. Please press star one again.

And then Josef time and to enable everyone on the call to participate please limit your questions to one question and one follow up please standby, while we compile the Q&A roster.

Speaker 5: Please limit your questions to one question and one follow up. Please send by while we compile the canning roster. And our first question.

And our first question coming from the line of.

Bryan Bergin with TD Cowen Your line is now open.

Hi, Thank you.

Speaker 17: Hi, thank you. I wanted to start here with one around client behavior. So I'm trying to understand what appears to be a hurry up and wait behavior from a lot of enterprises. So you have clients.

I wanted to start here with one around kind of client behavior. So I am trying to understand what appears to be a hurry up and wait behavior from a lot of enterprises you have clients with an urgency for cost reduction pipeline commentary is all positive and we all see solid deal signings across the services sector associated with productivity and.

Speaker 17: with an urgency for cost reduction, pipeline commentaries all positive, and we all see solid deal signings across the services sector associated with productivity and reductions, but then these ramps seem to move more slowly, and maybe the insurance cap that is a company-specific situation, but can you share your perspective on what seems to be causing this disconnect, are there common threads that are not leading to more normal or faster ramps to achieve faster cost savings across the country?

Sanjay Puria: In quarter to WNS generated $68.5 million of cash from operating activities incurred $15.7 million in capital expenditures and made debt repayments of $38 million. DSO in the second quarter came in at 35 days as compared to 30 days reported in quarter to of last year and 34 days last quarter.

<unk>, but then these ramps seem to move more slowly than maybe the insurance captive as a company specific situation, but can you share your perspective on what seems to be causing this disconnect. Their common threads that are that are not leading to more normal or faster ramps to effect to achieve faster cost savings across these clients.

Sanjay Puria: In September at our annual general meeting, WNS shareholders approved a 3.3 million share repurchase proposal. Our board of directors had also approved a new repurchase program and the company expects to begin buying back shares during fiscal quarter 3.

Sure Let me, let me take that Brian in the case of Sanjay can chime in as well, but I think when you look at our business for this year.

Speaker 2: Sure, let me, let me take that Brian , and in case of Sanjay can can chime in as well. But I think when you look at our business for this year, the top line engine is really working well, right? I mean, we're, as Sanjay mentioned in his prepared remarks, you know, we're facing an 18% headwind in terms of lost revenues for this year, which is a combination of, you know, ramp downs in volume, project related issues.

The topline engine is really working well right I mean.

As Sanjay mentioned in his prepared remarks, we're facing an 18% headwind in terms of lost revenues for this year, which is a combination of ramp downs in volume project related issues.

Sanjay Puria: With respect to our key operating metrics total headcount at the end of quarter was $59,873 and our attrition rate in the second quarter was 30%. As compared to 41% reported in quarter to of last year and 32% in the previous quarter. We expect attrition to average the mid 30% is but the rate could remain volatile quarter to quarter in the current labor environment. Build speed capacity at the end of the quarter to increase to 39,775 and WNS continued our progress towards in-person operation averaging 69% work from office during the quarter.

Speaker 2: The productivity commitments that we give to clients, the fact that we walked into the year with unusual headwinds from a large healthcare client and from an Internet client moving work offshore. So these were all kind of.

The productivity commitments that we give the clients. The fact that we walked into the year with unusual headwinds from a from a large healthcare client from an internet clients moving work offshore so.

These are all kind of.

Headwinds to the business.

Speaker 2: The 10% that we have guided to at the midpoint is, you know, actually...

The 10% that we guided to at the midpoint is.

Actually shows a gross growth number of 28% for the year. So we believe that when you look at deal signing deal closures deal flow, especially as it relates to the cost reduction types of initiatives, we're not seeing slowdowns I think the issue with the insurance captive as a.

Speaker 2: shows a gross growth number of 28% per year. So we believe that when you look at deal signing, deal closures, deal flow, especially as it relates to the cost reduction types of initiatives, we're not seeing slowdowns. I think the issue with the insurance captive is a completely separate one, and it is highly company-specific.

Lately separate one and it is highly company specific.

Sanjay Puria: In our press release issued earlier today, WNS provided our revised full year guidance for fiscal 2024. Based on the company's current visibility levels, we expect net revenue to be in the range of $1 billion and $254 million to $1 billion and $300 million, representing year over year growth of 8% to 12% on a both reported and constant currency basis. Top-line projection assumes an average British palm to use dollar exchange rate of 1.23 for the remainder of the fiscal year and we currently have 97% visibility to the mid point of the range.

Speaker 2: and its structural and nature based on priorities within the organization. But again, with that initiative, the goal was to drive cost savings. So I think we're not seeing significant delays in cost reduction based activities, where we've seen the delays and we're in the impact to this guidance.

And it's structural in nature based on priorities within the organization, but but again with that initiative. The goal was to drive cost savings right. So I think we're not seeing significant delays in cost reduction based activities, where we've seen the delays in <unk> and the impact to this guidance.

Speaker 2: Versus last quarter is more on the volumes that are being pumped through the processes. We own already and the discretionary projects or the shorter term project as they relate to the acquisitions that we've done and procurement business.

Versus last quarter is more on the volumes that are being pumped through the processes we own already.

And the discretionary projects are the shorter term project as they relate to the acquisitions that we've done in procurement business.

And I would just add to what Dave said.

Speaker 4: This client volume forecast, you know, still we believe is conservative because still quarter two, what we have seen that those volumes, you know, in fact, have not reduced. Only in September , very specific to some clients in travel, what we saw some reduction, but broadly in place.

This slide volume forecast.

We believe is conservative because third quarter to what we have seen that goes volumes.

Sanjay Puria: As Keshe mentioned, our revised revenue guidance includes additional headwind from reduced volume projection from certain client, lower project revenue expectation and delays in the ramp of our NAS insurance captive. As was the Keshe NAS quarter, it is important to note that some of the volume reduction are based on client commitment which could prove to be conservative based on the forecasting process. We have incorporated this lower estimate into our guidance, consistent with the company's visibility based approach.

In fact have not reduced only in September very specific to some clients in travel want we saw some reduction.

Broadly in place.

Speaker 4: And this reduction is also to be just consistent with our visibility base. We right now have 97% visibility against 92% visibility last quarter what we mentioned. And still this does not include the short-term revenue where we do not have visibility.

And this reduction is also will be just consistent with our visibility we now have 97% visibility against 92% visibility last quarter, what we mentioned.

Still this does not include the short term revenue, maybe you don't have visibility.

Speaker 4: So, and this is also with a net net of a growth of 1% what we what we saw in quarter two. So I think what you know, what the impact what Dave was trying to elude is definitely very client specific. And you know, you know, some conservatism in the client focus.

So and this is also with US net net growth of 1% what we saw in quarter two so I think what.

Sanjay Puria: Pulling our exhausted net income for fiscal 2024 is expected to be in the range of $201 million to $211 million based on an 83 rupee US dollar exchange rate for the remainder of fiscal 2024. This implies exhausted EPS of $4.04 to $4.24 assuming a diluted share amount of approximately $49.8 million share. With respect to capital expenditure, WNS currently expects our requirement for fiscal 2024 to be up to $60 million.

What are the impact more Dave Watson and you alluded definitely very client specific and you know.

Sometimes already during the plan for us.

Speaker 17: Okay, just a quick follow up on the 18%. What is kind of transitory within that that gives you the confidence for the 25 recovery? And then just my follow up, as we think about the second half headwinds on the top line that you talk about, do you take an immediate reduction in 3Q and have the ability to build off of that, or should we think about the second half, you know, the 3Q, 4Q being more level in revenue?

Okay, just a quick follow up on the 18% what is kind of.

Transitory within that that gives you the confidence for the 25 recovery and then just my follow up as we think about the second half headwinds on the top line that you're talking about do you take an immediate reduction in <unk> and have the ability to build off of that or should we think about the second half of the <unk> being more level and revenue.

Sure. So let me take a stab at that Brian I think when you look at the at this point, if we don't make assumptions about volume and projects as we head into next year. If we assume that it's status quo right and obviously, we know that those numbers could get could.

Speaker 2: Sure, so let me take a stab at that Brian . I think when you look at the, at this point, if we don't make assumptions about volume and projects as we head into next year, right? If we assume that it.

Unknown Executive: We'll now open the call for questions. Certainly, ladies and gentlemen, if you wish to ask a question at this time, please press star 11 on your touch.

Speaker 2: status quo, right? And ob

Speaker 2: could get slightly better, could get slightly worse. But we're looking at at least a 4% headwind to the business in that 18% that is transitory. We typically see in a given year anywhere between a 10 and an 11% headwind to our business, which is three to 4% on the productivity side, one to 2% on the project side, and then we typically have four or five% of the business that are known ramps.

Unknown Executive: Don't tell someone. If your question has been answered or you wish to remove yourself from the queue, please press star 11 again. In the interest of time and to enable everyone on the call to participate, please limit your questions to one question and one follow-up.

Could get slightly better could get slightly worse, but we're looking at at least a 4% headwind to the business in that 18% that is transitory. We typically see in a given year anywhere between the 10 and 11% headwind to our business, which is 3% to 4% on the productivity side.

Unknown Executive: Please send by while we compile the county roster.

Yelena Sopin: And our first question coming from the line up. Brian Bergen with TD Cowan Yelena Sopin. I thank you.

1% to 2% on the project side and then we typically have four 5% of the business that are known ramp downs.

Speaker 2: The transitory stuff really relates to the large healthcare process, which obviously is going to anniversary here in Q4 this year and having a large Internet-based client that we do procurement work for that is transition the solution from onsite centric

The transitory stuff really relates to the large healthcare process, which obviously is going to anniversary here in Q4 of this year and having a large internet based clients that.

Keshav Murugesh: I wanted to start here with one on around client behavior. I'm trying to understand what appears to be a hurry up and wait behavior from a lot of enterprises. So you have clients with an urgency for cost reduction, pipeline commentaries all positive. And we all see solid deal signings across the services sector associated with productivity and reductions. But then these ramps seem to move more slowly. And maybe the insurance cap that is a company specific situation.

Keshav Murugesh: But can you share your perspective on what seems to be causing this disconnect? Are there common threads that are that are not leading to more normal or faster ramps to affect to achieve faster cost savings across these clients?

We do procurement work forward that his transition to solution from onsite centric software centric. So these are really kind of the two unusual ones. Obviously, the hope is that that volume stabilized or picked back up and that the project based work starts the starts to settle in here as well, but the reality is in that in that.

Speaker 2: So these are really kind of the two unusual ones. Obviously the hope is that the volume stabilize or pick back up and that the project-based work starts to.

Speaker 2: starts to settle in here as well, but the reality is in that ramp down, we're looking at at least a 4% improvement on a year-over, your basis. On top of the fact that our insurance captive, which SonJ mentioned has committed revenues,

<unk> ramped up we're looking at at least a 4% improvement on a year over year basis on top of the fact that our insurance captive, which Sanjay mentioned has committed revenues.

Speaker 2: We'll have to ramp next year, fiscal 26, in order for them to meet their five year commitment targets. So we feel pretty good about the opportunity as we head into next year, both in front of the abatement of the headwinds, as well as the acceleration in some of the things that are creating challenge.

We'll have to ramp next year fiscal 'twenty six in order for them to meet their five year commitment targets. So we.

Keshav Murugesh: Sure, let me take that Brian and in case you have the subject can chime in as well. But I think when you look at our business for this year, the top line engine is really working well, right? I mean, we're, as Sanjay mentioned in his prepared remarks, you know, we're facing an 18% headwind in terms of lost revenues for this year, which is a combination of, you know, ramp down some volume project related issues.

We feel pretty good about the opportunity as we head into next year, both in some of the abatement of the headwinds.

As well as the acceleration in some of the things that are creating challenges right now.

Speaker 4: In front of it. I'm sorry. Yeah, and you know, if it's just talking about quarter three day, you know, so your specific question then Definitely, you know, the quarter three we believe and we expect that you know it's going to be three and a half to four percent lower as compared to quarter two right now You know, it's impacts one person almost coming from an effect

I'm, sorry, sorry, Yeah, I was just talking about Basel III David.

So your specific question.

Lately the quarter's fee, we believe and we expect that it's going to be three and half to 4% lower as compared to quarter. Two right. Now is in fact, 1% all of us coming from our fixed because.

Keshav Murugesh: The productivity commitments that we give to clients, the fact that we walked into the year with unusual headwinds from a large health care client and from an internet client moving work off shore. So, you know, these are all kind of headwinds to the business. The 10% that we have guided to at the midpoint is, you know, it actually shows a gross growth number of 28% per year. So we believe that when you look at deal signing, deal closures, deal flow, especially as it relates to the cost reduction types of initiatives, we're not seeing slowdowns.

Speaker 4: Because you know quarter two was almost at 1.27 from a pound perspective and now what we have assumed is 1.23 for the balance half. As well as you know what Dave was talking about a large internet client from an offshoring perspective. You know that impacted quarter two as well as going to impact quarter three. By that phase it will just complete its entire offshoring.

Carter, who was almost a 127 from a volume perspective now what we assume is 123 for the balance.

Well as you know what Dave was talking about the larger the next line from an operating perspective.

In fact this quarter too is there is going to be.

Odyssey by Dec fees, if we just completed that opportunity, but it also gives us a lot of opportunity from a growth perspective, because the slide is intact. The relationship is there as well as we have renewed and as well.

Speaker 4: But, you know, it also gives us a lot of opportunity from a growth perspective because the client is intact, the relationship is there, as well as we have renewed, you know, kind of for a much longer term, as well as it helps to drive over margin.

Keshav Murugesh: I think the issue with the insurance captive is a completely separate one and it is highly company specific and its structural and nature based on priorities within the organization. But again, with that initiative, the goal was to drive cost savings, right? So I think we're not seeing significant delays in cost reduction based activities where we've seen the delays and we've seen the impact to this guidance versus last quarter is more on the volumes that are being pumped through the processes we own already.

Much longer com as well as it has to drive a lower margin.

Speaker 4: Also, just wanted to remind that water 3 is usually our travel seasonality. And that impacts the water 3 revenue. But as we move forward, we believe that we should come back from water 4 onwards as compared to water.

Also just wanted to remind at quarter three is usually our travel seasonality and that impacts the quarter three revenue.

As we move forward, we believe that we should come back.

From quarter four onwards asphalt back in March.

Speaker 3: Yeah, this is Genshev, just wanna add one last bit here.

Yes. This is <unk> just wanted to add one last brief here and that is that first and foremost in terms of just the quality of discussions, we're having with clients and prospects there at a level that we have not seen before so I just wanted to give you confidence that there is a lot of activity taking place around both the transformation.

Speaker 3: And that is that first and foremost in terms of just the quality of discussions we are having with clients and prospects there at a level that we have not seen before. So I just want to give the confidence that there is a lot of activity taking place.

Keshav Murugesh: And the discretionary projects or the shorter term projects as they relate to the acquisitions that we've done, and Procurement Business. And I just add, you know, to what Dave said, you know, this client, volume forecast, you know, still, we believe, is conservative because still caught up to what we have seen, that those volumes, you know, in fact, have not reduced only in September, very specific to some clients in travel, what we saw some reduction, but broadly in place, and this reduction is also to be just consistent with our visibility based, right, we drive, now we have 97% visibility, again, 92% visibility last quarter, what we mentioned, and still does not include the short term revenue, where we don't have visibility.

Speaker 3: around both the transformation agenda as well as the cost saving agenda. And I think a lot of clients focus a lot on the transformation agenda earlier, but are now doubling down on the cost saving agenda. But

Agenda as well as the cost savings agenda, and I think a lot of clients focus a lot on the transformation agenda earlier, but are now doubling down on the cost saving agenda.

Speaker 3: While it's moving ahead, I think the potential for some of it to accelerate sometime later is much higher. I think a lot of them are taking a conservative view because of the disruption involved in their programs to do it. The second thing I want to mention is...

While it's moving ahead I think the potential for so I'll try to accelerate some time later is much higher I think a lot of them are take Nick Conservative view because of the disruption involved in there.

Our programs to do it the second thing I want to mention is pricing has been extremely stable from our point of view. So I think thats very very good sign and all the large deal progress the pipeline the interaction with customers.

Speaker 3: pricing has been extremely stable from our point of view. So I think that's a very very good sign and

Speaker 3: the large deal progress, the pipeline, the interaction with customers, the travel between customers and our people up and down across sites continues to be very, very strong. And the conversations around all the new trends, again, continues to be strong. So I think it's a very unusual headwind that we are seeing in fiscal, you know, 24 as Dave and Sanjay explained.

Keshav Murugesh: So, and this is also with a net, net of a growth of 1% what we, what we saw in quarter two. So, I think what, you know, what the impact, what Dave, what kind of allude is definitely very client specific, and, you know, some conservatism in the client forecast.

The travel between customers on our people.

Non across sites continues to be very very strong and the conversations around all the new trends again continues to be strong. So I think it's a very unusual headwind that we're seeing in fiscal 'twenty for us, Dave and Sanjay explain I'm quite confident that 25 will be quite different.

Keshav Murugesh: Okay, just a quick follow up on the 18% what is kind of transitory within that, that gives you the confidence for the 25 recovery, and then just my follow up, as we think about the second half headwinds on the top line that you talk about, do you take an immediate reduction in 3Q, and have the ability to build off of that, or should we think about the second half, you know, the 3Q 4Q being more level in revenue. Sure, so let me take a stab at that Brian, I think when you look at the, at this point, if we don't make assumptions about volume and projects as we head into next year, right, if we assume that it status quo, right, and obviously we know that those numbers could get, you know, could get slightly better, could get slightly worse, but we're looking at at least a 4% headwind to the business in that 18% that is transitory.

Speaker 3: And we are quite confident that 25 will be quite different. Okay.

Okay, that's great detail. Thank you very much.

Thanks, Brian .

Thank you and our next question coming from the line of.

Speaker 1: Thank you. And our next question coming from the line up By A ground onto house.

My young tandem with Needham Your line is open.

Speaker 6: Thank you. Keshav, thank you for sharing those examples on the Gen AI opportunities. I wanted to focus in on that for a second. As you look to take advantage of the opportunities down the road, do you have to overhaul your sales engine? Do you have to revamp it? Do you have to retool and reskill your workforce? What are the investments you have to make to truly be positioned to take advantage of the opportunities down the road?

Thank you Keisha.

<unk>. Thank you for sharing those examples on the Jennie O opportunities I wanted to focus in on that for a second.

You would look to take advantage of the opportunities down the road do you have to overhaul.

Your sales engine you have to revamp it you have to retool and Reskill. Your workforce what are the investments you have to make to truly be positioned to take advantage of the opportunities down the road.

Yes, that's an excellent question.

Speaker 3: Yeah that's an excellent question. My mind can. I would say all of the above. Whatever you asked about. I mean what we are doing is really focusing on making sure that first of all the capability engines inside the company are well taken care of and invested in. Like I spoke about my prepared remarks.

Keshav Murugesh: We typically see in a given year anywhere between a 10 and an 11% headwind to our business, which is 3 to 4% on the productivity side, you know, 1 to 2% on the project side, and then we typically have 4 or 5% of the business that are known ramped out. The transitory stuff really relates to the large healthcare process, which obviously is going to anniversary here in Q4 this year, and having a large internet based client that we do procurement work for that is transition the solution from onsite centric offshore centric.

I would say all of the above whatever.

<unk> asked about having what we are doing is really focusing on making sure that first of all the capability engines inside the company.

Taken care of and invested in like I spoke about in my prepared remarks.

Speaker 3: We are building relationships outside of WNS also, beyond just a traditional partner network.

We are building relationships outside of WNS also beyond just traditional Boston our network, but also with universities in the U.

Speaker 3: but also with universities in the U.S., U.K., and other places in order to just ensure that we have direct access to research, as well as have our people interacting with the researchers there to be useful to our clients. The third

The us UK and other places in order to.

Sure that we have direct access to research as well as have our people and drop in with the research shows there.

Keshav Murugesh: So these are really kind of the two unusual ones, obviously the hope is that that volume stabilize or pick back up and that the project based work starts to start to settle in here as well, but, you know, the reality is in that in that ramp down, we're looking at at least a 4% improvement on a year over your basis on top of the fact that our insurance captive, which Sunday mentioned has committed revenues. You know, we'll have to ramp next year fiscal 26 in order for them to meet their five year commitment targets, so, you know, we feel pretty good about the opportunity as we head into next year, both in the abatement of the headwind, as well as the acceleration in some of the things that are creating challenges right now.

It would be useful to our clients that the second the third is.

Speaker 3: accelerated kind of learning programs that we are, you know, using with our salespeople in order to bring them up to speed in terms of

Accelerated.

Learning programs.

Using with.

Our salespeople in order to bring them up to speed in terms of.

What.

What we have inside how we are changing some of those offerings and to actually have intelligent.

But again the conversations with our clients I think the most wonderful thing that we're seeing as a result of these investments being made the excitement being created as well as the fact that <unk> is obviously something that is top of.

Speaker 3: I think the most wonderful thing that we're seeing as a result of these investments being made, the excitement being created as well as the fact that AI in general is obviously something that is top of the attention in all boardrooms is that WLS sales people and WLS sorry.

<unk> doubled the attention and all ballrooms.

Is that WNS salespeople and leaders across technology across domains.

Speaker 3: across technology, across domains are actually having far better and more conversations.

Keshav Murugesh: I'm sorry, yeah, and you know, if we're just talking about quarter three, you know, so your specific question, then definitely, you know, the quarter three, we believe and we expect that it's going to be three and a half to 4% lower compared to quarter two right now, you know, it's impacts 1% almost coming from an effects because, you know, quarter two was almost at 1.27 from a pound perspective. And now what we have assumed is 1.23 for the balance half, as well as, you know, what they were talking about a large internet client from an option perspective, you know, that impacted quarter two, as well as going to impact quarter three by that phase, it will just complete its entire option.

Italy, having far better and more congregations.

Speaker 3: with clients and prospects that than we have ever seen before. Right. So I just want to mention that we are investing in every one of those areas. But at the same time, we're also seeing the quality of competition has increased. We recently had, you know, our advisor in a day in the US and we had the highest ever attendance of both clients.

<unk> and prospects than we are.

I've ever seen before right. So I just want to mention that we are investing in every one of those areas, but at the same time, we're also seeing the quality of cognizant.

Has increased recently.

Our adviser.

The U S and we had the highest attendance of more clients as well as the adviser.

Speaker 3: as well as the advisors at that event, because clearly very shocking, a lot of examples of things that were being created at WNS. And we have clients actually talk about how they were impacted by some of these ideas. Got it.

W minutes because.

Clearly very shortly it's a lot of examples of things Thats.

<unk>.

Created.

WNS and we had clients actually you talk about how they are impacted by some of these ideas.

Keshav Murugesh: But, you know, it also gives us a lot of opportunity from a growth perspective, because the client is inside the relationship is there, as well as we have renewed, you know, kindness, water for a much longer term, as well as it helps to drive over margin. Also, just wanted to remind that quarter three is usually our travel seasonality, and that impacts, you know, the quarter three revenue, but as we move forward, we believe that, you know, we should come back, you know, from quarter four onwards as compared to what.

Got it very helpful. And then I have to ask you a follow up on that.

Speaker 6: What do you see in terms of the impact on a model? When do we actually see the effects on revenue or margin?

What do you see in terms of the impact on the model when do we actually see the effects on revenue or margins or for that matter also want to get a sense of the size and scope of these engagements going to be larger or smaller as you think about it longer term just from a financial standpoint, how should we view it.

Speaker 17: or for that matter, you know, also want to get a sense of the size and scope of these engagements going to be larger or smaller as you think about it longer term, just from a financial standpoint, how should we view it?

Yes, I think I'll take a stab at that first and then have Dave and Sanjay talk a little more of the financial models, but.

Speaker 3: Yeah, I think I'll take a stab at that first and then have Dave and Sanjay talk a little more on the financial models. But, you know, I think right now some of these topics are front and center and, you know, receiving a lot of attention at the top of the house.

I think right now some of these topics are front and center and receiving a lot of attention at the top of the house I think most clients at this point in time as the hype is settling down to more business oriented kind of discussions are just getting much more comfortable with who are the box.

Keshav Murugesh: Yes, this is Keshav, just want to add one last bit here, and that is that first and foremost in terms of just the quality of discussions we are having with clients and prospects there at a level that we have not seen before. So I just want to give the confidence that there's a lot of activity taking place around both the transformation agenda as well as the cost-faving agenda. And I think a lot of clients focus a lot on the transformation agenda earlier, but are now doubling down on the cost saving agenda, but while it's moving ahead, I think the potential for some of it to accelerate sometime later is much higher.

Speaker 3: I think most clients at this point in time, you know, as the hype is settling down to more business oriented kind of discussions are just getting much more comfortable with who are the partners that can actually help them navigate, you know, some of these new technologies and whom they can trust, who understand their businesses, first and foremost, their business domain.

Noticed that can actually help them navigate some of these new technologies, and whom they can trust who understand their business is first and foremost that business domains and who can help them take them through the changes right and I think in that journey WNS has made all the investments is having lots of cannibalization.

Speaker 3: and who can help them, you know, take them, you know, through the changes, right? And I think in that journey, WNS has made all the investments, is having lots of conversations, is building, you know, a lot of, you know, a lot of confidence with our clients that we are the right partner, you know, to work with, you know, for the long term. That is one.

Keshav Murugesh: I think a lot of them are taking a conservative view because of the disruption involved in their programs to do it. The second thing I want to mention is pricing has been extremely stable from our point of view, so I think that's a very, very good sign. And overall, the large deal progress, the pipeline, the interaction with customers, the travel between customers and our people up and down across the sites continuously is very, very strong. And the conversations around all the new trends, again, continues to be strong. So I think it's a very unusual headwind that we are seeing in fiscal 24 as Dave and Sanjay explained.

<unk> is building.

A lot of.

A lot of confidence with our clients that we have the right partner.

Work with.

For the long term that is one at the same time. We're also seeing that a few guys. Adam one thing to boost the early conversations willing to actually take the risk off.

Speaker 3: At the same time, we are also seeing that a few clients are wanting to post the early conversations.

Speaker 3: willing to actually take the risk of dipping their toes in the model and actually taking, you know, adding on more disruption to what they're already seeing from a macro point of view or from their own business point of view. So we gave examples of a few clients and where this is already being experimented with.

That does.

In the model and actually taking.

Adding on more disruption doing what theyre already seeing from a macro point of view or from their own business point of view. We gave examples of a few clients on revenues already being experimented with.

Speaker 3: But my own, you know, my own commitment with my internal teams is to start pushing for more.

But my own.

Yelena Sopin: I'm just quite confident that 25 will be quite different.

My own commitment with my internal teams is to stop pushing for more.

Yelena Sopin: Okay, that was all great detail. Thank you very much. Thanks, Priya.

Mayank Tandon: Thank you.

Speaker 3: you know, commitment from clients, you know, during this year, somewhere along this fiscal, but driving much more of it next year. So I would expect that this whole year will be all about building commitment, getting clients to actually get comfortable, and then over a period of time, as they get, you know, more comfortable about willing to add on more disruption to their models, you know, work with their feet, so to speak, in terms of, you know, getting on board with some of these models.

Went from clients during this year somewhere along this fiscal but driving much more of it next year. So I would expect that this whole year will be all about building commitment getting.

Ashwin Shirvaikar: And our next question coming from the line now. My young tandem would need him. Yalan is open.

Ashwin Shirvaikar: Thank you. Hey, chef, thank you for sharing those examples on the gen AI opportunities. I wanted to focus on that for a second. And as you look to take advantage of the opportunities down the road, do you have to overhaul your sales engine, you have to revamp it, you have to re-tool and re-skill your workforce. What are the investments you have to make to truly be positioned to take advantage of the opportunities down the road?

Getting clients to actually get comfortable.

And then over a period of time as they get.

More comfortable about willing to add on more disruption to their models.

What we've got feet so to speak in terms of.

Get them onboard with some of these models and the clients who are.

Speaker 3: And the clients who are experimenting are already seeing the change in productivity, the kind of impact that we are able to give them in even those minor processes in terms of their cost management programs. And now they're able to get a sense of how they can size it and scale some of these projects even into areas that they may not have outsourced or handled before.

Experimenting are already seeing the change in productivity the kind of impact that we are able to give them.

Ashwin Shirvaikar: Yeah, that's an excellent question, Mayank. And I would say all of the above, whatever you asked about. I think what we are doing is really focusing on making sure that first of all, the capability engines inside the company are well taken care of and invested in, like I spoke about and I prepared remarks. We are building relationships outside of WNS also beyond just the traditional partner network, but also with universities in the US, UK and other places in order to just ensure that we have direct access to research as well as have our people interacting with the researchers there to be useful to our clients at the second.

Even though microprocessors in terms of their cost management programs and now they are able to get a sense of how they can size. It in scale. Some of these projects even into areas that they may not have outsourced.

Outsource or handle what before so I think the potential is high.

Speaker 3: So I think the potential is high, but we will have to wait and watch because we have to build confidence and we have to get the clients to actually be willing to take the risk of doing some of these things.

But we will have to wait and watch because we have to bear.

Your confidence and we have to get our clients to actually be willing to take the risk of doing some of these things.

Yes, I would just add to that mine from a financial perspective, we've seen nothing to date that changes our philosophy that for clients to really take advantage of.

Speaker 2: I would just add to that mind from a financial perspective, we've seen nothing to date that changes our philosophy that for clients to really take advantage of.

Ashwin Shirvaikar: The third is accelerated kind of learning programs that we are using with our salespeople in order to bring them up to speed in terms of what we have inside, how we are changing some of those offerings and to actually have intelligent and penetrative conversations with our clients. I think the most wonderful thing that we are seeing as a result of these investments being made, the excitement being created as well as the fact that you know AI and Genie is obviously something that is top of the attention in all both rooms is that WNS salespeople and leaders across technology across domains are actually having far better and more conversations with clients and prospects than we have ever seen before.

Speaker 2: what AI and Gen AI can do. It does require that the process be completely re-engineered. And as a result, we continue to see that the opportunity for the financial model going forward is to move away from FTE-based types of pricing schemes and more towards transaction outcome subscription-based models where the clients pay for results instead of for bodies.

What AI and Jenny I can do it does require that the process completely re engineered.

And as a result, we continue to see the opportunity for the financial model going forward is to move away from FTE based types of pricing schemes and more towards transaction and outcome subscription based models, where the clients pay for results instead of four bodies.

<unk>.

When you look at logically how these engagements are going to have to work there's going to be a lot of effort on the front end to clean data to build models right and unless those costs are amortized over the life of the project, it's going to be very difficult for our clients to justify so when we look at these types of initiatives we.

Speaker 2: When you look at logically how these engagements are going to have to work, there's going to be a lot of effort on the front end to clean data to build models. Right? And unless those costs are amortized over the life of the project, it's going to be very difficult for a client to justify. So, when we look at these types of initiatives.

Speaker 18: We see a clear catalyst with AI and Gen AI as clients get more comfortable with these types of engagements as Kish have said. Moving us away from FTE based models and obviously as we've shown over the last seven, eight years, we believe that as we move away from FTE based models, our opportunities for margin expansion to improve. That's helpful. Thank you so much. Thank you, Bank. Thanks.

See a clear catalyst with AI engine AI as clients get more comfortable with these types of engagements.

Ashwin Shirvaikar: So I just want to mention that we are investing in every one of those areas, but at the same time we are also seeing the quality of conversations has increased. We recently had our advisor in the US and we had the highest ever attendance of both clients as well as the advisors at that event because clearly very shocking a lot of examples of things that were being created at WNS. And we had clients actually talk about how they were impacted by some of these ideas.

As I've said.

Moving moving us away from FTE based models and obviously as we've shown over the last seven eight years, we believe that as we move away from FTE based models are opportunities for margin expansion to improve.

That's helpful. Thank you so much.

Bank.

Thank you.

And our next question coming from the line of.

Ashwin <unk> with Citi. Your line is open.

Ashwin Shirvaikar: I got it very helpful, and then I have to ask you a follow-up on that. What do you see in terms of the impact on the model, when do we actually see the effects on revenue or margins, or for that matter, you know, also want to get a sense, other sizes, scope of these engagements are going to be larger or smaller as you think about it longer term, just from a financial standpoint, how should we view it?

Yes.

Thank you.

Good day, good day guys.

Speaker 7: Yes, guys.

I guess this is.

Speaker 7: It's a mathematical question. If I look at 97% of the new range versus 92% of the prior range, so just basically the visibility metric times the midpoint, the dollar, the actual dollar number you have visibility to.

It's a mathematical question, if I look at 97% of the new range versus 92% of the pricing so just make equally.

Ashwin Shirvaikar: Yeah, I think I'll take a stab at that first and then have David and Sanjay talk a little more on the financial models, but I think right now some of these topics are front and center and receiving a lot of attention at the top of the house. I think most clients at this point in time, as the hype is settling down to more business-oriented kind of discussions, are just getting much more comfortable with who are the partners that can actually help them navigate some of these new technologies, and whom they can trust, who understand their business is first and foremost that business domains and who can help them, you know, take them, you know, through the changes, right?

The ability.

At times the mid point.

The number the dawn of the extra dollar done where you have visibility to it seems to have gone up by about $20 million. So gone up right. So my question is what needs to happen for you to call something visible.

Speaker 7: seems to have gone up by about 20 million dollars. So gone up, right? So my question is, what needs to happen for you to call something visible?

Speaker 7: And I guess the flip side of the question is when did you learn of some of these changes?

And I guess.

Flip side of that question is when did you learn of some of these changes that are causing your actual overall range to go down but your visibility to go up.

Speaker 7: that causing your actual overall range to go down, but your visibility to go up.

That makes sense.

Yes.

Speaker 4: Yeah, Ashwin, you're absolutely right. And the visibility goes up specifically when we have a committed signed contract from the client perspective. Whether it's a volume commitment, whether it's a new logo, the expansion, it's all about the client commitment. So you're right. When 20 million goes up, from a visibility gauge, it's all about those contracts being executed at this particular stage. And you know.

Absolutely.

Right.

The visibility goes up specifically when we haven't gone we did sign a contract from the clients.

Ashwin Shirvaikar: And I think in that journey, WNS has made all the investments, is having lots of conversations, is building, you know, a lot of confidence with our clients that they are the right partner, you know, to work with, you know, for the long term. That is one. At the same time, we are also seeing that a few clients are wanting to post the early conversations, willing to actually take the risk of dipping their toes and in the model and actually taking, you know, adding on more disruption to what they're all be seeing from a macro point of view or from their own business point of view.

I think the volume commitments.

New logo expansion is all of our clients.

So you're right <unk> goes up.

From a facility it is all about those.

This contract.

This particular.

And you know.

As we keep on moving forward under discussion.

Speaker 4: as we keep on moving forward in the discussion, you know, from a visibility perspective, it is all about, you know, the conservative, what we kept on say, you know, what we mentioned, they don't client.

From a visibility.

<unk> is all about conservative what we kept on saying what.

What we mentioned.

<unk>.

Speaker 4: When they give the volume, they come with it, we take it. Because we have no other means from a client and perspective that how their volumes from a future perspective are going to be because they have a better understanding of that particular business.

<unk> given the volume.

Congregate.

Ashwin Shirvaikar: So we gave examples of a few clients and where this is all being experimented with, but my own, you know, my own commitment with my internal teams is to start pushing for more, you know, commitment from clients, you know, during this year, somewhere along this fiscal, but driving much more of it next year. And the clients who are, you know, experimenting are already seeing the change in productivity, they kind of impact that we're able to give them in, you know, even those, you know, minor processes in terms of their cost management programs.

We've taken because we had no we have no other mean from Edison light and persuaded that it all holiday volumes from a future perspective are going to be because.

Do you have a better understanding of that particular business at this stage.

Speaker 2: And just to add to the second part of your question, Ashwin, I think a lot of the deterioration that we've seen, as Keisha mentioned in his prepared remarks, from a volume perspective, we started seeing some erosion in the travel vertical in September . You'll see that when you look at our second quarter financials.

And just just to add to the second part of your question Ashwin I think a lot of the deterioration that we've seen as case you have mentioned in this prepared remarks.

From a volume perspective, we started seeing some erosion in the travel vertical in September .

You'll see that when you look at our second quarter financials.

Speaker 2: In addition to seeing the volume erosion show up in September , we also got forecast in September that showed lower commitment levels going forward. Right? So some of this was really a function of what happened in September , similarly with the delays in our captives. You know, those discussions were ongoing throughout the quarter, but it really wasn't until later in the quarter that we had.

In addition to seeing the volume erosion show up in September . We also got forecast in September that showed lower commitment levels going forward right. So some of this was really a function of what happened in September similarly, with the delays in our captives those discussions were ongoing throughout the quarter, but it really was.

Ashwin Shirvaikar: And now they're able to get a sense of how they can size it and scale some of these projects, even into areas that they may not have, you know, outsourced or handled over before. So I think the potential is high, but we will have to wait and watch because we have to build confidence and we have to get the clients to actually be willing to take the risk of doing some of these things.

Until later in the quarter that we had at knowledge that the client was going to be pushing out phase two of this of this relationship so.

Speaker 2: at knowledge that the client was going to be pushing out phase two of this of this relationship. So, you know, I think a lot of this was clearly not visible to us in July when we provided guidance. Some of this is related to a deterioration in the macro, right? I think some of that is showing up in the travel vertical on the volume side. Some of it is showing up in the

I think a lot of this was clearly not visible to us in July when we provided guidance. Some of this is related to a deterioration in the macro rate I think some of that it's showing up in the travel vertical on the volume side. Some of it is showing up in the.

Ashwin Shirvaikar: I would just add to that mine from a financial perspective, you know, we've seen nothing to date that changes our philosophy that for clients to really take advantage of what AI and Genie I can do, it does require that the process we completely re-engineered. And as a result, we continue to see that the opportunity for the financial model going forward is to move away from FTE based types of pricing schemes and more towards transaction outcomes, subscription based models where the clients pay for results instead of for bodies.

Speaker 2: The, the, the lack of accelerated growth in in the project side of our business, where, when you look at our visibility, remember when we came into the year, we actually came into the year with 2% lower visibility than we typically did. Right? We started with 88 instead of 90 and the reason was because we had added 6% of revenue through our acquisitions.

The lack of accelerated growth in the project side of our business, where when you look at our visibility remember when we came into the year, we actually came into the year with 2% lower visibility than we typically did right. We started with 88 or 90 and the reason was because we had added 6% of revenue through our app.

<unk>.

Speaker 2: that we're growing at a much faster clip than the company. So we had comfort in those assets being able to bridge that gap.

We're growing at a much faster clip than the company. So we had comfort in those assets being able to bridge that gap and obviously given what's gone on with the macro here, while those assets continue to grow at a healthy clip, they're growing below our expectation and as a result, our ability to bridge that gap has has dropped but at the end of the day.

Speaker 2: And obviously, given what's going on with the macro here, while those assets continue to grow at a healthy clip, they're growing below our expectation. And as a result, our ability to bridge that gap has has dropped. But at the end of the day, I think a lot of what you're seeing here, you're right. We've gotten new commitments from clients. We've been able to add.

Ashwin Shirvaikar: So, when you look at logically how these engagements are going to have to work, there's going to be a lot of effort on the front end to clean data, to build models, right? And unless those costs are amortized over the life of the project, it's going to be very difficult for a client to justify. So, when we look at these types of initiatives, we see a clear catalyst with AI and Gen AI as clients get more comfortable with these types of engagements, as Keshav said. Moving us away from FT based models, and obviously as we've shown over the last seven, eight years, we believe that as we move away from FT based models, our opportunities for margin expansion to improve.

I think a lot of what youre seeing here, you're right. We've got new commitments from clients, we've been able to add revenue to the topline the challenge has been.

Speaker 2: Revenue to the top line, the challenge has been the erosion and stuff that's falling out of the box.

The erosion in stuff, that's fallen out of the bottle.

Understood and then with regards to the.

Speaker 7: Understood. And then with regards to the expected inorganic contribution.

Expected inorganic.

In addition, I think it was supposed to be 200 basis points before.

Speaker 7: I think it was supposed to be 300 basis points before, but I do believe the Wuram, it's lapped in the quarter. What's the new expected in organic contribution?

But I do believe Ram lamps, it's an app in the quarter whats the new expected inorganic contribution.

Ashwin Shirvaikar: Thank you so much. Thank you, Bank. Thank you.

Just given some of the commentary that you had how these acquisitions are doing I mean, what I'm for example.

Speaker 7: Just given some of the comment that you had with how these acquisitions are doing, I mean, would I, for example, the low-code intelligent automation services company? I would imagine that's the exact...

Ashwin Shirvaikar: And our next question coming from the line up, as when Sir Vicar would sit here on his open. Thank you, good day, guys. I guess this is a mathematical question. If I look at 97% of the new range versus 92% of the prior range, so this basically the visibility metric times the midpoint, right? The number, the dollar, the actual dollar number you have visibility to seems to have gone up by about 20 million dollars, so gone up, right?

No code intelligent automation services company I would imagine that that's exactly the kind of work.

Speaker 7: that clients are demanding now, so why the...

That clients are demanding now.

So why the.

I guess can weakness and it may not be associated with specific any wood and so they.

Speaker 7: And it may not be associated with specifically WOOM, so I know that there may be other facts.

There may be other factors.

Speaker 7: But could you please provide some?

But could you provide.

Provide some color on that.

Speaker 4: Yeah, so you know, Ashwin, you know, still 3% is intact from an acquisition perspective, you know, what we guided earlier. In fact, you know, groom and you know, the other acquisition have been growing more, not of 20%, you know, much better than the company levels rose.

So you're not shooting off still.

Two 3% as the impact from an acquisitions perspective.

What we guided earlier.

In fact, you don't worry.

And you look at that acquisition have been growing not.

Ashwin Shirvaikar: So my question is, what needs to happen for you to call something visible? And I guess the flip side of the question is, when did you learn of some of these changes that causing your actual overall range to go down, but your visibility to go up? Does that make sense? Yeah, I know. Actually, you're absolutely right.

And also for any percent much better than the company level growth I think the reversal.

Speaker 4: I think the reversal what you know what we have spoken about is based on the business plan or the target revenue what was given based on the valuation which was discussed with them.

What we have spoken about is based on the business plan or the target revenue what was the other.

Valuation, which was discussed with them.

Speaker 4: So according it was much higher expectation from a group perspective and accordingly.

Accordingly, it was much higher expectation from a group perspective and accordingly.

Speaker 4: That visibility of those growth is not there and according to those reversal. But in fact, you know, the growth is much healthier, much better discussion. What we are having, you know, including the top line as well as driving the productivity internally as well as for the.

That visibility.

All of those growth is.

Ashwin Shirvaikar: And the visibility goes up specifically when we have a committed contract from the client perspective, whether it's a volume commitment, whether it's a new logo, the expansion, it's all about the client commitment. So you're right. The 20 million goes up, you know, from a visibility gauge is all about those, you know, those contract being executed at this particular stage. And, you know, as we keep on moving forward and the discussion, you know, from a visibility perspective, it is all about, you know, the conservative, what we kept on say, you know, what we mentioned, the clients, then they give the volume, they committed.

Is not dead and accordingly, those reversal, but in fact.

The growth is much healthier much better discussion what we are having.

Including the top line as well as driving the productivity internally is better for the client demand for the acquisitions remains healthy ashwin.

Speaker 2: Demand for the acquisitions remains healthy, Ashwin. Like Sonji said, they are still growing all three of the assets faster than the company average by a significant margin. The only issue is that they're growing below what we had hoped or anticipated and below what they've grown historical.

And as I said, they are still growing all three of the assets faster than the company average by a significant margin.

The only issue is that theyre growing below what we had hoped or anticipated and below what they've grown historically.

Speaker 2: So, you know, there's this clearly been a slowdown, and that's why the word we used in the prepared remarks with a de-selleration in their growth. But make no mistake, these are still really good assets that are growing at really healthy rates.

So there's clearly been a slowdown and that's why the word we used in the prepared remarks with a deceleration in their growth, but make no mistake. These are still really good assets that are growing at really healthy rates were.

Ashwin Shirvaikar: We take it because we have no, we have no other means from at a client and perspective that, you know, how, how their volumes from a future perspective are going to be, because, you know, they have a better understanding of that particular business at this stage. Yeah. And just to add to the second part of your question, Ashwin, I think a lot of the deterioration that we've seen, as Keisha mentioned in this prepared remarks, from a volume perspective, we started seeing some erosion in the travel vertical in September.

Speaker 2: We're just seeing some of that top end get removed here.

We're just seeing some of that top end get get removed here.

Speaker 7: Okay, can I throw in a certification question with regards to the buyback? It was reupt. I think it was relatively late in the quarter. Is that why we haven't seen an impact in the quarter and should we expect you to continue to, or to maybe stop indicated down? Would you be willing to step up and defend and so on? If you can come.

Okay can I toner.

<unk> question with regards to the buyback it was.

I think it does relatively.

Relatively late in the quarter is that why we haven't seen.

And impact in the quarter and should we expect you to continue to do to maybe.

Stuck indicated down would you be willing to step up and defend and so on if you can comment on that.

Ashwin Shirvaikar: You'll see that when you look at our second quarter financials. In addition to seeing the volume erosion show up in September, we also got forecast in September that showed lower commitment levels going forward. Some of this was really a function of what happened in September similarly with the delays in our captives. Those discussions were ongoing throughout the quarter, but it really wasn't until later in the quarter that we had had knowledge that the client was going to be pushing out phase two of this relationship.

So ashwin no we didn't see any.

Speaker 4: So actually, no, we didn't see any, you know, any share repurchase during the quarter because

Any share repurchases during the quarter because.

Speaker 4: We got, you know, completed with our share, we purchased approval, what we had from the shareholder suspecting. And, you know, as the agent was there in September , we got that, you know, we got a new approval for 3.3 million shares from our shareholder. We got, you know, completed with our shareholder.

We got.

Completed with our share repurchase approval, what we heard from a shareholder's perspective annual as a GM was there in September the gardeners.

<unk> grew by three 3 million shares from our shareholders and as in my prepared remarks.

Speaker 4: And as you might prepare the marks, you know, I mentioned that the board have already approved.

I mentioned that the board has already approved.

Speaker 4: to start the new program for the share repurchases and accordingly we expect

To start the new program for the share repurchases and accordingly, we expect.

Ashwin Shirvaikar: So I think a lot of this was clearly not visible to us in July when we provided guidance. Some of this is related to a deterioration in the macro, right? I think some of that is showing up in the travel vertical on the volume side. Some of it is showing up in the lack of accelerated growth in the project side of our business where when you look at our visibility, remember when we came into the year.

Speaker 4: 6. The shared bot is inOn. The shared bot is inOn.

<unk> stock the share repurchase is important as we move forward.

Understood. So no limitations. Thanks. Thank you.

Okay.

Thank you and our next question coming from the line of Maggie Nolan with Merlin Blair. Your line is open.

Speaker 1: Thank you. And our next question, coming from the line of Maggie Nolan with Will and Blair, Yolanda Smith.

Ashwin Shirvaikar: We actually came into the year with 2% lower visibility than we typically did, right? We started with eighty eight set of ninety and the reason was because we had added 6% of revenue through our acquisitions that were growing at a much faster clip than the company. So we had comfort in those assets being able to bridge that gap. And obviously, given what's going on with the macro here, while those assets continue to grow at a healthy clip, they're growing below our expectation and as a result, our ability to bridge that gap has dropped.

Hi, Thank you you mentioned the expectation for continued industry, leading margin profile given some of the headwinds on the revenue side can you talk about some of the puts and takes on the margins and the trajectory for the remainder of this year.

Speaker 8: Hi, thank you. You mentioned the expectation for continued industry leading margin profile. Given some of the headwinds on the revenue side, can you talk about some of the puts and takes on the margins and the trajectory for the remainder of this year?

Speaker 2: Sure, let me take that Maggie. You're right. Obviously, we had a really good quarter here in terms of margin in Q2. Some of that was what I would call non-recurring in nature, especially as it relates to the S-GNA benefits that we had during the quarter. You know, to Sanjay's point, when you look at a reduction in Q3 on the top line of, you know, in the 3 1 1 2 4% range sequentially, I think...

Sure, let me take that Maggie.

Youre right, obviously, we had a really good quarter here in terms of margin in Q2. Some of that was what I would call nonrecurring in nature, especially as it relates to the SG&A benefits that we had during the quarter.

To <unk> point, when you look at a reduction in Q3 on the top line.

Ashwin Shirvaikar: But at the end of the day, I think a lot of what you're seeing here, you're right. We've gotten new commitments from clients. We've been able to add revenue to the top line. The challenge has been the erosion that's fallen out of the bottom. Understood.

In the three 5% to 4% range sequentially.

Thank.

The margin profile is also going to be down so I think what we get back to for Q3 Q4 in terms of margins is a more normal cadence so something in the range of 21% plus in Q3 and 22% plus in Q4.

Speaker 2: The margin profile is also going to be down. So I think what we get back to for Q3, Q4 in terms of margins is a more normal cadence. So, you know, something in the range of 21% plus in Q3 and 22% plus in Q4. Which when you average out over the full year will bring us again somewhere slightly north of the midpoint between 21 and 22%.

Ashwin Shirvaikar: And then with regards to the expected inorganic contribution, I think it was supposed to be 300 basis points before. But I do believe Wuram, it's lapped in the quarter. What's the new expected inorganic contribution? And just given some of the commentary that you had with how these acquisitions are doing. I mean, Wuram, for example, the low code intelligent automation services company. I would imagine that's exactly the kind of work that clients are demanding now.

When you average out over the full year will bring us again somewhere slightly north of the midpoint between 'twenty, one and 22% for the full year.

Yes, the big the Big issue, obviously in terms of Q3 margins as coverage of expenses given the revenue drop.

Speaker 2: The big issue, obviously, in terms of Q3 margins is coverage of expenses given the revenue.

Sure. Thank you.

Speaker 8: Sure, thank you. And then on the client that shifted from onshore to offshore, how long do you expect that shift will take?

And then on the client that shifted from onshore to offshore how long do you expect that shift will take.

Speaker 8: Or is it already complete? And then are there other parts of the portfolio where you're evaluating the potential for them to do similar things throughout the remainder of the year? And what do you expect the impact to be and the timing of the impact on the margins from this year?

Or is it already complete and then are there other parts of the portfolio, where you are evaluating the potential for them to get similar things throughout the remainder of the year.

Ashwin Shirvaikar: So why the suggested weakness. It may not be associated with specifically Wuram, so I know that there may be other factors. But could you provide some color on that? Yeah. So, you know, Ashwin, you know, still 3% is intact from an acquisition perspective. You know, what we guided earlier. In fact, you know, Wuram and you know, the other acquisition have been growing more, not of 20% much better than the company levels rose.

And what do you expect the impact to be and the timing of the impact on the margins from this shift.

So we don't.

Speaker 4: So, the procurement line which began its journey from an offshoring perspective, in fact, it started in quarter two, and that's going to take at least couple of more quarters, which is going to be, we expect it to get completed by year end. And accordingly, when we will step in in FY25, from a next year onwards perspective, that is where we'll start seeing some of the improvement from a margin perspective. Also, as we will be done with that entire offshoring, we expect the growth also to be rapid as we move forward, because of our long-term relationship.

Procurement line, which began his journey from an offshoring perspective package started in quarter, two and that's going to take at least a couple of more quarters, which is going to be.

Ashwin Shirvaikar: I think the reversal, what, you know, what we have spoken about is based on the business plan of the target revenue, what was given for the valuation, which was discussed with them. So according, it was much higher expectation from a growth perspective. And accordingly, that visibility of those growth is not there. And according to those reversal, but in fact, you know, the growth is much healthier, much better discussion. What we are having, you know, including the top line as well as driving the productivity internally as well as others.

It will get completed by year end.

And accordingly.

Then we will step in FY.

25.

On the next year onward facility that is where we will start seeing some of the improvement from a margin perspective also.

As we will be done with it and head off should we expect the growth also to be.

But as we move forward.

Because of our long term relationship.

Speaker 9: Thank you.

Thank you very much.

Thank you and our next question coming from the line of David Koning with Baird. Your line is now open.

Speaker 1: Thank you. And our next question coming from the line of David Koenig with Baird. Your line is now open.

Ashwin Shirvaikar: Black. Yeah, demand for the acquisitions remains healthy, Ashwin. You know, like Sanjay said, they are still growing all three of the assets faster than the company average by a significant margin. The only issue is that they're growing below what we had hoped or anticipated and below what they've grown historically. So, you know, there's clearly been a slowdown and that's why the word we used in the prepared remarks with a deep celebration in their growth. But make no mistake, these are still really good assets that are growing at really healthy rates. We're just seeing some of that top end get removed here.

Hi.

Hey, Dave are you on you on the call.

Please check your mute button.

I would you like me to go to the next person yes.

Speaker 1: Do you like me to go to the next person? Cute. Yeah, let's look through that and we can get they back into the queue. Sure. And our next question coming from the line of.

Ashwin Shirvaikar: Okay, can I throw in a certification question with regards to the buyback. It was reupped. I think it was relatively late in the quarter.

Did that and we can get them back into the queue.

Sure.

And our next question coming from the line of.

Ladies Vinson with Deutsche Bank. Your line is open.

Ashwin Shirvaikar: Is that why we haven't seen an impact in the quarter and should we expect you to continue to maybe stop indicated down. Would you be willing to step up and defend and so on. We can comment on that. So, Ashwin, you know, we didn't see any, you know, any share reporters during the quarter because we got, you know, completed with our share reporters approval what we had from shareholder suspected and, you know, as the agent was there in September, we got that, you know, new approval for 3.3 million shares from our shareholders.

Speaker 6: Hi, guys. Thanks for the question. So I wanted to ask about your outlook for headcount growth going forward. So I think headcount grew 8% last year, and just looking sequentially in 1Q and 2Q was pretty flat. So just wondering what your thoughts on headcount addition.

Hi, guys. Thanks for the question. So I wanted to ask about your outlook for head count growth going forward. So I think head count grew 8% last year and just looking sequentially in <unk> and <unk> was pretty flat. So just wondering what your thoughts on head count additions sort of in the current macro environment and in light of your revised revenue expectations.

Speaker 6: current macro environment and in light of your revised revenue.

<unk> for the year and I guess the related question. There is you've had this talk about shipping projects from FTE based to outcome based when you called out the P&C insurance project in your prepared remarks, you. One example of that so maybe what percent of projects today are outcome base versus the FTE based and kind of where do you see that going over time.

Speaker 6: And I guess the related question there is you've had this talk about shifting projects from FTE based to outcome based and you call out the PNC insurance project and your prepared remarks is one example of that. So maybe what percent of projects today are outcome based versus the FTE based and kind of where do you see that going?

Ashwin Shirvaikar: And as in my prepared remarks, you know, I mentioned that the board have already approved, you know, to start the new program for the share reporters and accordingly, we expect to start the share reporters is in caught up as we move forward.

Maybe I'll start from a head count perspective, and then you can add.

Speaker 4: Maybe I'll start from a headcount perspective and then you can add further. You know, we expect, you know, headcount to come down existing quarter three, based on, you know, what we are seeing from a revenue reduction perspective, based on certain reasons like, lecturing and others of what they spoke about.

We expect.

Head count I'm not existing auto free based on what we are seeing from a.

Ashwin Shirvaikar: I understood, so no limitations there. Thank you. Yeah.

Our revenue projection perspective based on certain reasons like offshoring and other stuff what we spoke about.

Maggie Nolan: Thank you. And our next question coming from the line of Maggie Nolan with Will and Blair. You're on us open. Hi, thank you. You mentioned the expectation for continued industry leading margin profile. Given some of the headwinds on the revenue side, can you talk about some of the puts and takes on the margins and the trajectory for the remainder of this year? Sure, let me take that Maggie. You're right. Obviously, we had a really good quarter here in terms of margin in Q2.

But as we head.

In quarter four.

We expect that head count to go up because you know we will start hiring for some of the revenue growth, which is going to be that in FY 2015, beginning from quarter one and.

And including.

Depending upon how soon the ramp from the insurance captive what we spoke about stock we may have to stock Heidi because there is always a trailing period, which are required so.

Speaker 2: and it's not going to be a good idea. But we're going to have to start hiring because there is always a training period which are required. So, you know, if those things are well intact, we believe that we may be having either a flat or a little higher head count as compacted today. And just to add to Sunji's comment, it's going to get the rest of your question here. The expectation, you know, while head count should be flatish here and then hopefully again, Q4. The expectation is that similar to what we've been able to deliver over the last three to four years, we do expect-

Those things.

In fact, we believe that we may be having either a flat or a little higher head count.

Maggie Nolan: Some of that was what I would call non recurring in nature, especially as it relates to the SGNA benefits that we had during the quarter. You know, to Sanjay's point, when you look at a reduction in Q3 on the top line of, you know, in the 3.5 to 4% range sequentially, I think the margin profile is also going to be down. So I think what we get back to for Q3, Q4 in terms of margins is a more normal cadence.

Yes, and just just to add to <unk> comment.

Speaker 2: Yeah, and just just add the Sunji's comment and it's gonna get the rest of your question here.

The rest of your question here.

The expectation, while head count should be flattish here and then hopefully kick up here again in Q4, the expectation is that similar to what we've been able to deliver over the last three years to four years, we do expect revenue per employee to increase in that 3% to 4% range, which again I think gives us that that long term margin leverage and really <unk>.

<unk> the shift.

Maggie Nolan: So, you know, something in the range of 21% plus in Q3 and 22% plus in Q4, which when you average out over the full year will bring us again somewhere, slightly north of the midpoint between 21 and 22% for the full year. Yes, the big issue, obviously, in terms of Q3 margins is coverage of expenses given the revenue. Crop.

The shift towards the.

Speaker 2: the non-linear models. When you look at revenue by contract type, we're still in that 70, 30 mix between FTE and non-FTE. I will tell you guys though that true mix has been masked by the large healthcare client that we, the process that we lost, which was entirely subscription based.

The non linear models when you look at revenue by contract type, we're still in that kind of 70 30 mix between FTE in non FTE.

I will tell you guys know that debt.

Through mix has been masked by the large health care client.

The process that we lost which was entirely subscription based.

Speaker 2: So I think head, had we not had that headwind from a revenue perspective and that headwind from a non FTE perspective, you would have seen the mix starting to move here. So part of what you're seeing is a function of kind of client behavior, but part of what you're seeing here in terms of the mix between FTE and non FTE is also client specific and specific to the WNUS portfolio.

So I think had we not had that headwind from a revenue perspective and that headwind.

Often the non FTE perspective, you would have seen the mix starting to move here. So.

Part of what Youre seeing is a function of kind of client behavior, but part of what you're seeing here in terms of the mix between FTE in non FTE is also client specific and specific to the WNS portfolio.

Speaker 3: I just want to underline one more thing, one more point here, and that is, you know, we've added almost 830 new seats in this quarter, and we're also looking at, you know, we're also bringing on stream some more facilities that will add more seats.

I just wanted to very healthy I would just want to underline one more thing one more point here and there.

It is in.

We've added almost 830 new seats in this quarter.

Sanjay Puria: The procurement line, which began is journey from an offshoring perspective, impact it started in quarter two, and that's going to take at least couple of more quarters, which is going to be expected to get completed by year end, and accordingly, when we will step in in FI-25, from the next year onwards perspective, that is where we'll start seeing some of the improvement from a margin perspective, also, you know, as we will be done with that entire offshoring, we expect the growth also to be, you know, rapid as we move forward, you know, be because of our long-term relationship. Thank you very much.

And we're also looking at we had positive bringing on stream some more facilities that will add more seats over the next few months. So on the one hand, while we were seeing all these headwinds at this point and barefoot H two.

Speaker 3: over the next few months. So on the one hand, while we're seeing all these headwinds at this point in time for H2, we're also confident that based on the conversations we're having, the fact that some of these revenues that we're talking about will actually get deferred and move into the rest of the year or go beyond. And we will actually have much more coming into 25. We're already preparing for the ramp for 25. I must mention that as well.

So confident that based on the convolutions, yet having the fact that some of these revenue that we're talking about will actually get deferred and moving to the outlook.

For the year.

Beyond and.

We will actually have much more of a coming into 'twenty five we're already preparing for the Ram 2005, I must mention that as well yes.

Speaker 2: And we need to continue to do the link that Jonathan revenue from that growth.

And we need to continue to de link that drop in revenue from net growth in head count.

David Koning: Thank you, and our next question coming from the line of David Koning with Bert, you'll on his now open. Hey, David, are you on the call? Please check your mid-line.

Speaker 6: All, all very helpful. I appreciate the detailed answers there. So my, my follow up.

All very helpful. I appreciate the detailed answers there so Mike My follow up question I was hoping you could compare and contrast, some of the demand trends that you're seeing across regions I know you've called out the travel vertical before but just kind of looking at your results in North America and the U K specifically you saw it looks like youre seeing a bit of a <unk>.

Speaker 6: and contrast some of the demand trends that you're seeing across regions. I know you've called out the travel vertical before but just kind of looking at your results.

Speaker 6: North America and the UK specifically. So it looks like you're seeing a bit of a deceleration in North America, whereas the UK has had a couple of quarters of sequential acceleration.

Deceleration in North America, whereas the U K has had a couple of quarters of sequential acceleration, which is nice to see sort of given the macro headlines that you see around that country. So maybe you can compare and contrast, what you're seeing across your different geographies. How much that is tied into what youre seeing in say say travel just get more color that would be very helpful. Thank you.

Speaker 6: the macro headlines that you see around that country. So maybe you could compare and contrast what you're seeing across your different geographies, how much that's tied into what you're seeing in, say, travel. Just more color, though.

Puneet Jain: All right, would you like me to go to the next person? Yeah, let's do that, and we can get Dave back into the queue. Sure, and our next question coming from the line of, Nate Swinson, would you thank you on his open? Hi, guys, thanks for the question. So I wanted to ask about your outlook for head count growth going forward. So I think head count grew eight percent last year, and just looking sequentially in one queue and two queue was pretty flat.

Sure let me take that I think when you look at our business and you kind of look at case of the commentary about the pipeline and demand for both Digitization automation as well as cost reduction what youll see is that across services across geographies across verticals. Our demand is really healthy right.

Speaker 2: Sure, let me take that. I think when you look at our business and you kind of look at case of commentary about the pipeline and demand for both digitization automation as well as cost reduction, what you'll see is that across services, across geographies, across verdicts.

Puneet Jain: So just wondering what your thoughts on head count additions, sort of in the current macro environment, and in light of your revised revenue expectations for the year. And I guess the related question there is, you've had this talk about shipping projects from FTE base to outcome base, and you've called out the PMC insurance project, and you're prepared a remarkable example of that. So maybe what percent of projects today are outcome base versus the FTE base, and kind of where do you see that going over time?

Speaker 2: Our demand is really healthy, right? Where you see gaps, whether they're in a vertical or in a geography or in a service offering, they're more about the client specific issues that we've been talking to you about. Right? So, obviously, you're gonna see healthcare is weak because of the healthcare process that we lost, right? That's also gonna show up as a headwind to the US revenues. It's also gonna show up as a headwind to the non.

Where you see gaps whether they're in a vertical or geography or in a service offering they're more about the client specific issues that we've been talking to you about right. So obviously youre going to see healthcare is weak because of the the healthcare process that we loss rate. That's also going to show up as a headwind to the.

The US revenues, it's also going to show up as a headwind to the non FTE revenues. When you look at the large procurement client that is transitioning from on site offshore.

Speaker 2: When you look at the large procurement client that's transitioning from onsite to offshore, that's gonna show up as a headwind to our manufacturing retail. It's gonna show up as a headwind to finance in the county. And it's also gonna show up as a headwind to our US.

Puneet Jain: Maybe I'll start from a head count perspective, and then you can add further. We expect head count to come down existing quarter three based on what we are seeing from a revenue reduction perspective based on certain reasons like auctioning and others of what we spoke about. But as we had in quarter four, we expect the head count to go up, because we'll start hiring for some of the revenue growth, which is going to be there in a fight 25 and beginning from quarter one.

That's going to show up as a headwind to our manufacturing retail it's going to show up as a headwind to finance and accounting and it's also going to show up as a headwind to our U S based revenues.

Speaker 2: So the reason you see US soft isn't because US demand is soft. The reason you're seeing US being soft is because of the healthcare client, the large internet-based client, and the softness in traffic. So, you know, a lot of what you see, you know, what I'm trying to get at here is that the optics on these are not really what I would call macro trends, but more about the specific company issues that we have within our portfolio.

The reason you see U S soft isn't because U S demand is off the reason youre seeing in the U S being soft is because of the health care client the large internet based clients and the softness in traffic.

So.

A lot of what you see what I'm trying to get at here is that the optics on these are not really what I would call macro trends, but more about the specific company issues that we have within our portfolio.

Puneet Jain: And including, depending upon how soon the ramp from the insurance capital, what we spoke about start, we may have to start hiring because there is always a training period which are required. So, you know, if those things are well intact, we believe that we may be having either a flat or a little higher head count, you know, as compared to today. Yeah, and just to add to Sunday's comment and to kind of get the rest of your question here.

Thanks, Dave I appreciate it.

Thank you.

Yeah.

Speaker 1: Thank you. And our next question coming from the line of, who needs time with JP Morgan you want us open.

Thank you and our next question coming from the line of Puneet Jain with Jpmorgan. Your line is open.

Hi, Thanks for taking my question.

Speaker 10: Hi, thanks for taking my question. Sanjay or David, if you can break down the revenue guidance cut of 40 to 50 million in annual revenue into various components like the insurance clients, travel volume, project delays, and I believe currency should also have impact of around 10 million.

Sunday or David if you can break down the revenue guidance.

Puneet Jain: The expectation, you know, what while head count should be flatish here, and then hopefully kick up here again in Q4. The expectation is that similar to what we've been able to deliver over the last three to four years, we do expect revenue to per employee to increase in that three to four percent range, which again, I think gives us that. At long-term margin leverage and really demonstrates the shift towards the... You know, the non-linear models.

$15 million annually.

Annual revenue.

And two there is confidence like the insurance client travel volume project delays and they've been I believe currency you should also have an impact of around $10 million.

Related to cash guidance.

Yes, so we would hope so.

Speaker 4: Yeah, so you know, so you're talking about the reduction in the guidance, the component of that specifically for it. Yes.

You are talking about the reduction in the guidance the component of that.

Puneet Jain: When you look at revenue by contact type, we're still in that kind of 70, 30 mix between FTE and non-FTE. I will tell you guys though that that true mix has been masked by the large healthcare client that we the process that we lost, which was entirely subscription based. So I think had had we not had that headwind from a revenue perspective and that headwind from a non-FTE perspective, you would have seen the mix starting to move here.

Yes.

Speaker 4: Yeah, so I think you know, 1% is coming from FX itself as I mentioned earlier.

Yes, so I think Bob.

1% is coming from FX et cetera, as I mentioned earlier.

Speaker 4: You know, 2% is coming from a large insurance captive. There is 1% from client to client.

2% is coming from a large insurance captive.

Great.

There isn't any one person frontline.

Speaker 4: volume forecast from a conservative perspective. And another 1% is some slowdown in decision making from project based on some of the acquisitions what we spoke about. And this is getting met up with the 1% growth what we had in quarter two specifically. So next net, if you'll see, it shows like.

Our volume forecast from a conservative perspective, and another 1% as some slowdown in decision making from project bids on some of the acquisitions.

We spoke about and just getting net out with a 1% growth what we had in quarter two.

Puneet Jain: So part of what you're seeing is a function of kind of client behavior, but part of what you're seeing here in terms of the mix between FTE and non-FTE is also client specific and specific to the WNS portfolio.

Specifically as a net negative youll see it shows like.

Speaker 4: uh four percent on a reported currency and three percent on a function

4% on a reported CN people.

Speaker 10: And I also want you to have, sorry, good.

Got it.

I also wanted to perhaps I'm sorry go ahead.

Keshav Murugesh: I just want to very help. I just want to underline one more thing, one more point here, and that is in, you know, we've added almost 830 new seats in this quarter and we're also looking at, you know, we're possibly on stream some more facilities that will add more seats over the next few months. So on the one hand, you know, while we're seeing all these headwinds at this point out for each two, we're also confident that based on the commutations we're having, the fact that some of these revenues that we're talking about will actually get deferred and move into the, you know, out of the rest of the year or, you know, go beyond. And we will actually have, you know, much more coming into 25. We're already preparing for the ramp, you know, for 25. I must mention that as well.

No Greg.

Speaker 10: No, but it's going. Okay. And I also wanted to ask about like the lower growth expectations from Puram. We thought like their services would be more relevant in the current environment. There's clients looking to cut cost. Could you share more details on what growth of weaknesses?

Okay.

Also wanted to ask about like the lower growth expectations from <unk>.

We talked like their services would be murdered 11 in the current environment clients looking to cut cost could you share more details on what drove that weakness.

Speaker 4: And, you know, just so put it again, you know, it's not the weakness.

And just.

Put it again, it's not the weakness.

Speaker 4: From a growth perspective, Vora has been growing more than 30%.

From a growth perspective, where it has been growing more than offset a year over year.

Speaker 4: year over year, as expected. This is all about the contingent consideration, what was, you know, agreed with them.

As expected this is all about.

PJM consideration what was.

<unk> agreed with them for a much higher growth.

Speaker 4: for a much higher growth, you know, from a valuation perspective. And accordingly, that particular number is not there, or is not expected at this stage. And accordingly, it's a reversal. But having said that, you know, it's much relevant, you know, it's providing a much healthier growth as we discussed with our client, as well as the pipeline is very, very, you know, healthy, you know, across all the verticals, wherever we are discussing with our existing clients, all the new levels. And Puneet, I think at the end of the day.

From a valuation perspective, and accordingly that particular number is not that is not expected at this stage and I didn't get reversed, but having said that.

Keshav Murugesh: Yep. And we need to continue to do the link that Joseph and revenue from that growth and headcount. All very helpful. I appreciate the detailed answers there.

It's much relevant it's providing a much healthier growth as we as we discussed with our clients as well as the pipeline is very very healthy.

Keshav Murugesh: So my my follow up question. I was hoping you could compare and contrast some of the demand trends that you're seeing across regions. I know you've called out the travel vertical before, but just kind of looking at your results in North America and the UK specifically. So it looks like you're seeing a bit of a deceleration in North America, whereas the UK has had a couple of quarters of sequential acceleration, which is nice to see sort of given the macro headlines that you see around that country. So maybe you could compare and contrast what you're seeing across your different geographies. How much that's tied into what you're seeing and say, say, travel just get more color that will be very helpful. Thank you.

Across our group.

Most all of the verticals, where we are.

Discussing with our existing clients or the new logos.

Puneet I think at the end of the day, whether it's the services from Burnham or whether it's what we're seeing in procurement projects or what we're seeing in certain instances on the analytics side I think it's more about client prioritization and if the type of service that youre selling required.

Speaker 2: the services from VRM or whether it's what we're seeing in, you know, procurement projects or what we're seeing in certain instances on the analytics side, right? I think it's more about client prioritization. And if

Speaker 2: The type of service that you're selling requires the clients to pay upfront for something that they need to get the benefit of over time.

As the client to pay upfront for something that they need to get the benefit of over time.

Speaker 2: These are the kinds of things that clients are having to make hard decisions. There's a bulk of our business.

These are the kinds of things that clients are having to make hard decisions on right. The bulk of our business doesn't involve an upfront payment from clients.

Keshav Murugesh: Sure. Let me take that. I think when you look at our business and you kind of look at case of commentary about the pipeline and demand for both digitization automation as well as cost reduction, what you'll see is that across services across geographies across verticals. Our demand is really healthy, right? Where you see gaps, whether they're in a vertical or in a geography or in a service offering, they're more about the client specific issues that we've been talking to you about, right?

Speaker 2: doesn't involve an upfront payment from the client. Our core mission critical process outsourcing work does not require the client to make an upfront investment, right? Whereas even though projects like what Verim does in terms of low code, no code automation drives cost reduction over time, the reality is the client has to pay for that service upfront. So in this environment, I think clients are thinking about

Core mission critical process outsourcing work does not require the client to make an upfront investment right, whereas even though projects like what berm does in terms of low code no code automation drives cost reduction over time. The reality is the client has to pay for that service upfront. So in this environment I think.

Lions are thinking about what they wanted to do first how they want to prioritize right and we believe that these these projects will all get done right clients need to do this right. The question is in this environment as it now is it next quarter or is it in 2025, but to <unk> point berms business remains extremely.

Speaker 2: what they want to do first, how they want to prioritize. And we believe that these projects will all get done. Clients need to do this. The question is, in this environment, is it now, is it next quarter, is it in 2025? But the Sunjuist point, Burns business remains extremely healthy. It's growing at a very nice clip. It's growing well above company average. You said over 20%. The issue is it's not growing at the expected level that we had had. Got it. No.

Keshav Murugesh: So obviously you're going to see health care is weak because of the health care process that we lost, right? That's also going to show up as a headwind to the US revenues. It's also going to show up as a headwind to the non FTE revenues. When you look at the large procurement client that's transitioning from onsite to offshore, that's going to show up as a headwind to our manufacturing retail. It's going to show up as a headwind to finance and accounting.

Greenlee healthy it's growing at a very nice clip, it's growing well above company average you said over over 20%.

You is it is not growing at the expected level that we had had.

Keshav Murugesh: And it's also going to show up as a headwind to our US. The reason you see US soft isn't because US demand is soft. The reason you're seeing US being soft is because of the healthcare client, the large internet-based client, and the softness in traffic. So, you know, a lot of what you see, you know, what I'm trying to get at here is that the optics on these are not really what I would call macro trends, but more about the specific company issues that we have within our portfolio. Thank you.

Okay, no that makes sense thanks for the classification.

Thanks, Tony.

Speaker 19: Thanks, Tony.

Thank you and our next question coming from the line of Mushy country with Wedbush. Your line is now open.

Speaker 1: Our next question coming from the line-up, Mochika, through with wet push, she learned a-

Speaker 12: Hey, thanks. Just some clarification. You spoke about the travel vertical where you're seeing some weak volumes. I guess the last time we really spoke about the travel vertical that's being ahead when here was during the pandemic.

Hey, Thanks, just some clarification you spoke about the travel vertical where youre seeing some.

Weak volumes I guess, the last time, we really spoke about the travel vertical.

Being a headwind here it was during the pandemic.

Maybe you can talk a bit about some of those weaker volumes, what's really kind of.

Speaker 12: Maybe you can talk a bit about some of those weaker volumes. What's really kind of driving that? And what sort of visibility do you have into this vertical for the next few quarters? That's my first remark.

Driving that.

And what sort of visibility do you have into this vertical for the next few quarters. That's my first question. Thanks.

Puneet Jain: And our next question coming from the line of Puneet Jain, would JP Morgan, you want to open? Hi, thanks for taking my question. Sanjay would David, like, if you can break down the revenue cards cut of $40 to $15 million in annual revenue into various components like the insurance clients, travel volume project delays, and I believe currency should also have impact of around $10 million. So, you're talking about the reduction in the guidance, the component of that specifically for it?

Okay.

Sure, let me take a crack at that Moshe So look I think when you when you look at what's going on in travel right. You can bifurcate it by geography, you can bifurcate it bye bye.

Speaker 2: Sure, let me take a crack at that motion. So look, I think when you when you look at what's going on and travel.

Puneet Jain: Yes. Yeah, so I think you know, 1% is coming from effects itself as I mentioned earlier, you know, 2% is coming from a large insurance captive reference that there's a thing 1% from client volume forecast from conservative perspective. And another 1% is some slow down and decision making from project based on some of that position, what we spoke about. And this is getting net off with the 1% growth what we had in quarter two specifically. So, next night, if you will see, it shows like 4% on a reported currency and 3% on a constant currency. Got it. And I also wanted to ask, sorry, go ahead. No, but it's going.

Speaker 2: You can bifurcate it by geography, you can bifurcate it by sub-vertical, right? And then some of the behaviors that we're seeing in the OTA space, for example, the online travel space.

<unk> vertical right I mean, some of the behaviors that we're seeing in the Ot space. For example, the online travel space are different than some of the behaviors that we're seeing in the airline space, we have certain clients, where the volumes are higher than they were the prior quarter. We have other clients where the volumes are lower rates. So some of this is at a macro level I think there's pressure right.

Speaker 2: are different than some of the behaviors that we're seeing in the airline space. We have certain clients where the volumes are higher than they were.

Speaker 2: prior court. We have other clients where the volumes are lower. Right? So some of this is, you know, at a macro level, I think there's pressure.

Speaker 2: Some of this also to the sun jays comment earlier is about client specific issues, whether it's about changes in the business models, whether it's about market share gains and losses. Right? So there are volume issues within the travel industry that go beyond just kind of Mac.

Some of this also to the Sundays comment earlier is about client specific issues, whether it's about changes in their business models, whether it's about market share gains and losses right. So there are volume issues within the travel industry that go beyond just kind of macro.

Speaker 2: You know, we did see some of that show up in September when we look forward to the projections that we've gotten over the next couple of quarters. Again, we hope they will prove to be concerned.

We did see some of that show up in September when we look forward to the projections that we've gotten over the next couple of quarters again, we hope they will prove to be conservative.

Speaker 2: We've historically seen that. And as we've discussed many times on these calls, we believe that the way these contracts are structured and the way the forecasting process works, incentivizes clients in this type of an environment to be conservative. So, you know, the hope certainly is that some of these reductions don't materialize, but to be completely transparent, we did see a little bit of a dip in September . So I think...

We have historically seen that and as we've discussed many times on these calls we believe that the way. These contracts are structured and the way the forecasting process works in <unk>.

Devises clients in this type of an environment to be conservative so.

The hope certainly is that some of these reductions don't materialize, but to be completely transparent we did see a little bit of a dip in September . So I think hopefully what we've done is we've derisked the forecast based on the volume commitments that clients have given us and what we've included in our visibility, which is now up to 97%.

Puneet Jain: Okay, and I also wanted to ask about like the lower growth expectations from forum. We thought like their services would be more relevant in the current environment as clients looking to cut cost. Could you share more details on what growth of weaknesses? And you know, just so put it again, you know, it's not the weakness from a growth perspective, where I've been growing more than 20% a year over here, you know, as expected.

Speaker 2: Hopefully what we've done is we've de-risked the forecast based on the volume commitments that clients have given us and what we've included in our visibility, which is now up to 97%. But again, we kind of have to watch and wait and we're dealing with both.

But again, we kind of have to watch and wait and we're dealing with both potential macro issues as well as client specific issues under that umbrella.

Speaker 2: potential macro issues as well as client-specific issues under that umbrella.

Okay. So you brought down the mid range by about 350 basis points in terms of constant currency revenue growth for the year from the last quarter.

Speaker 12: Okay, so you brought down the mid range by about 350 bases.

Puneet Jain: This is all about the contingent consideration, what was what was you know, agreed with them for a much higher growth, you know, from a valuation perspective. And accordingly, that particular number is not there or is not expected at this stage. And according to that reversal, but having said that, you know, it's much relevant. You know, it's providing a much healthier growth as we discussed with our client, as well as the pipeline is very, very healthy, you know, across all the verticals, wherever we are discussing with our existing clients or the new rules.

Speaker 12: constant currency revenue growth for the year from the last quarter, which part of that came from that travel vertical?

Part of that came from the travel vertical specifically.

So close to 1%.

Speaker 2: So close to 1%, right? I mean, the bottom line is, you know, Sunjai kind of reconciled for you the 3.5%. And by the way, at the midpoint, constant currency revenue is only down 3%.

I mean, the bottom line as Sanjay kind of reconciled before you the the three 5% and by the way at the midpoint constant currency revenue was only down 3%.

Right.

Speaker 2: Yeah, so yeah, so just that right and then the last question. Yeah, sorry. Sorry. Go ahead. No, go ahead I was gonna say so what you know the 1% that we've seen in client volume reductions that we've baked into the guidance is predominantly driven by the

Understood.

And then the last question sorry, Sorry go ahead. No go ahead I was going to say so.

Puneet Jain: And I think at the end of the day, whether it's the services from Burham or whether it's what we're seeing in procurement projects or what we're seeing in certain instances on the analytics side, right. I think it's more about client prioritization and if the type of service that you're selling requires the clients to pay upfront for something that they need to get the benefit of over time. These are the kinds of things that clients are having to make hard decisions on, right.

1% that we've seen in client volume reductions that we baked into the guidance is predominantly driven by the travel vertical.

Okay. Okay and then the last question here is I guess more about capital deployment the amount of cash you have on the balance sheet.

Speaker 12: Okay, okay, and then the last question here is I guess more about capital deployment. The amount of cash you have on the balance sheet.

Yes.

Speaker 12: Clearly the market is not giving you guys any sort of credit for your ability to outgrow or actually to outperform in this market compared to your peers.

Clearly the market is not giving you guys any sort of credit for your ability to outgrow or actually to outperform in this market compared to your peers.

I mean, what can we do internally to kind of offset that.

Speaker 12: I mean, what can we do internally to kind of offset that?

Puneet Jain: There's a bulk of our business doesn't involve an upfront payment from the client. Our core mission critical process outsourcing work does not require the client to make an upfront investment, right. Whereas even though projects like what Burham does in terms of low code, no code automation drives cost reduction over time, the reality is the client has to pay for that service upfront. So in this environment, I think clients are thinking about what they want to do first, how they want to prioritize, right.

Speaker 12: given the multiple, given the valuation, given the free cash or generation, on an annual basis.

Given the multiple given the valuations have been a free cash flow generation.

On an annual basis.

Speaker 3: I think I'll take that. I think from our point of view, you know, we will we continue to look at how our

So I think I'll take that I think from our point of view.

We continue to look at how our business overall is trending for the long term we may have.

Speaker 3: business overall, it's trending for the long term. We may have a short-term issue with H2 of this year, which we have spoken about at this

Short term issue, where the H two of this year, which we have spoken about this.

Speaker 3: at this call and during these results. But overall, we continue to be very confident about how our business is trending, the kind of conversations we are making, and the pivot the company is making around some of the new technology changes that are exciting clients, and therefore creating opportunities for WNS.

This call and getting these results, but overall, we continue to be very confident about how our business is trending kind.

Puneet Jain: And we believe that these projects will all get done, right. Clients need to do this, right. The question is, in this environment, is it now, is it next quarter, is it in 2025. But to Sunji's point, Burham's business remains extremely healthy. It's growing at a very nice clip. It's growing well above company average. You said over over 20%. The issue is it's not growing at the expected level that we are. Gautic, no, that makes sense. Thanks for the clarification. Thanks, Puneet. Thank you.

Kind of conversations you are making on the pivot to the company is making around some of the new technology changes that I'm excited and clients and therefore, creating opportunities for WNS. So from our point of view in terms of capital allocation first and foremost we will continue to keep looking for those tuck in M&A targets.

Speaker 3: So from our point of view in terms of capital allocation, first and foremost, we will continue to keep looking for those, you know, tuck in M&A targets.

Speaker 3: you know that we have spoken about that can add more capability so that things turn around we can leverage that capability to become you know even more impactful with every one of our clients there's a strong pipeline of candidates that they're constantly looking at and if something you know that makes sense for us and adds the bright kind of impact from a capability point of view we will pull the trees out there

We have spoken about that add more capabilities. So that things turn around we can leverage that capability to become even more impactful with every one of our clients and a strong pipeline of candidates that we are constantly looking at and if something.

Moshe Katri: Our next question coming from the line-up, Moshe Katri, with Westbush, Shilana Sullivan. Hey, thanks. Just some clarification. You spoke about the travel vertical where you're seeing some weak volumes. I guess the last time we're really spoke about the travel vertical that's being a headwind here, it was during the pandemic. Maybe you can talk a bit about some of those weaker volumes, what's really kind of driving that. And what sort of visibility do you have into this vertical for the next few quarters? That's my first question. Thanks.

Makes sense for us.

<unk> kind of impact from a capability point of view, we will pull the trigger.

Speaker 3: Other than that, as Sanjay and Dave mentioned, we've also taken approvals for our buyback programs. So we continue to be very, very positive about the overall health of the business, the momentum that we can create for the long term. And as and when we believe the opportunity is right, we will continue to accelerate our buyback programs like we did earlier this year.

Other than that.

David mentioned, we have also taken approvals for our buyback programs right. So we continue to be very very positive about the overall health of the business. The momentum that we can create for the long term and as and when we believe the opportunity is right. We will continue to accelerate our buyback programs like we did.

Keshav Murugesh: Sure, let me take a crack at that, Moshe. So look, I think when you look at what's going on in travel, right? You can bi-fricated by geography, you can bi-fricated by sub-vertical, right? I mean, some of the behaviors that we're seeing in the OTA space, for example, the online travel space are different than some of the behaviors that we're seeing in the airline space. We have certain clients where the volumes are higher than they were in the prior quarters.

Earlier this year.

Alright, thanks, guys.

Good morning.

Thank you and our next question coming from the line of.

Speaker 1: Thank you, and our next question coming from the line up. David Coney with Bear, do you want to see it open?

David Koning with Baird. Your line is now open.

Keshav Murugesh: We have other clients where the volumes are lower, right? So some of this is, you know, at a macro level, I think there's pressure, right? Some of this also to the Sanjay's comment earlier is about client-specific issues, whether it's about changes in their business models, whether it's about market share gains and losses, right? So there are volume issues within the travel industry that go beyond just kind of macro. You know, we did see some of that show up in September when we look forward to the projections that we've gotten over the next couple of quarters.

Your line is open please check your mute button.

David seems to be having a problem with the.

The speaker.

Speaker 1: Our next question coming from the line of 7-10 with Jeffrey Thiel on his cell.

Our next question coming from the line of Steven Chin with Jefferies. Your line is open.

Keshav Murugesh: Again, we hope they will prove to be conservative. We've historically seen that. And as we've discussed many times on these calls, we believe that the way these contracts are structured in the way the forecasting process works, incentivizes clients in this type of an environment to be conservative. So, you know, the hope certainly is that some of these reductions don't materialize, but to be completely transparent, we did see a little bit of a dip in September.

Yes.

Speaker 13: Good morning. So, I'd like to start with a question about just the commentary earlier about having more large deal opportunity than at any point in the past. And then you also mentioned something about potentially a mix of changes. Ever increasing.

Good morning, So I'd like to start with a question about just the commentary earlier about having more large deal opportunities than at any point in the past.

And then you also mentioned something about potentially a mix shift changes ever increasing.

Focus on cost take out projects versus the transformation projects.

Speaker 13: focus on cost-take-up projects versus the transformation project.

Speaker 13: Can you put a little bit of additional color there in terms of is that a lot of the product of the color?

Can you provide a little bit of additional color. There in terms of is that a lot of the product or the curtains and certain macro environment that we're seeing what's kind of driving that and if we should begin to see.

Speaker 13: certain macro environment that we're seeing, what's kind of driving that? And if we should begin to see the macro.

Keshav Murugesh: So I think hopefully what we've done is we've de-risked the forecast based on the volume commitments that clients have given us, and what we've included in our visibility, which is now up to 97%. But again, we kind of have to watch and wait, and we're dealing with both, you know, potential macro issues, as well as client-specific issues under that umbrella. Okay, so you brought down the mid-range by about 350 basis points in terms of constant currency revenue growth for the year from the last quarter.

The macro economy normalized.

Speaker 13: How should we think about that opportunity and client decision making at that point? Should we expect a step back or what is a big picture like for me?

Should we think about that opportunity in client decision, making at that point should we expect a step back or what specific picture look like from your grosses perspective.

Yes, maybe I'll take a stab at that first and foremost I think the trial.

Speaker 3: Yeah, maybe I'll take a stab at that. You know, first and foremost, I think the, you know, the pivoting of the model around some of the new technology changes, as well as, you know, the, the requirements that customers are facing because of the stress macros.

The pivoting of the model around some of the new technology changes as well as.

The requirements that customers are facing because of the stressed macros also means that they are looking for partners, who can actually engage with them at the highest levels and can really help them in terms of navigating.

Keshav Murugesh: Which part of that came from that travel vertical specifically? So close to 1%, right? I mean, the bottom line is, you know, it's a fungic kind of reconciled for you. This is a three and a half percent. And by the way, it's the mid-point constant currency revenue is only down to 3%. Right, yeah, so this says, right? And then the last question, sorry, go ahead. No, go ahead. I was going to say, so, you know, the 1% that we've seen in client volume reductions that we've baked into the guidance is predominantly driven by this, and Travel Vertical. Okay, okay.

Speaker 3: also means that they are looking for partners who can actually engage with them at the highest

Speaker 3: levels and can really help them in terms of navigating the current crisis and creating opportunity for the future.

At current prices and creating opportunity for the future and that is actually resulted in first and foremost in number of <unk> level conversations more apps.

Speaker 3: And that is actually resulting, first and foremost, in a number of CXO-level conversations for us.

Speaker 3: at a level that we have not seen before. I think it's, you know, it's very exciting to see the kind of conversations we're having with Prosper.

The level that we have not seen before I think it is.

It's very exciting to see the kind of conversations we're having with prospects.

Speaker 3: as well as existing clients in terms of completely new programs that they may not have considered before, but are now being pushed to look for new opportunities.

As well as existing clients in terms of completely new programs that they may not have considered before but are now being pushed to look at because they want to stay ahead of the game as far as Jamie some of these new trends are concerned and at the same time also be smart in terms of cost leadership programs. So that is the.

Keshav Murugesh: And then the last question here is, I guess, more about capital deployment, the amount of cash you have on the balance sheet. You know, clearly the market is not giving you guys any sort of credit for your ability to outgrow or actually to outperform in this market compared to your peers. I mean, what can we do internally to kind of offset that? Given the multiple given the valuation, given the free cash or generation, on an annual basis.

Speaker 3: because they want to stay ahead of the game as far as AR, Gen AR, some of these new trends are concerned. And at the same time also, you know, be smart in terms of cost leadership programs. So that is the excitement for WNS.

For WNS in terms of just a quality of conversations we are having the size of some of the deals.

Speaker 3: in terms of just the quality of conversations we are having, the size of some of the deals that we are looking at, like we saw with the capital takeout, which may have differed, but it's committed to providing us that revenue that we spoke about earlier. So that's the first aspect.

Yes.

<unk> at <unk>.

We saw would be capital takeout, which may have differed but is committed to providing us that.

Revenue that we spoke about earlier.

Keshav Murugesh: So, I think I'll take that. I think from our point of view, you know, we will, we continue to look at how our business overall is trending for the long term. We may have, you know, a short term issue with H2 of this year, which we have spoken about at this at this call and getting these results. But overall, we continue to be very confident about, you know, how our business is trending, the kind of conversations we're making and the pivot the company is making around some of the new technology changes that are exciting clients and therefore creating opportunities for WNS.

The first aspect.

Beyond that.

Speaker 3: Beyond that, you know, as we come out of the macro environment, I actually think because of the quality of conversations that are taking place and the new relationships being built.

As we come out of the macro environment I actually think because of the quality of propositions that are taking place and the new relationships being built by WNS would be client community the prospect community as well as the analyst and the advisor community.

Speaker 3: by WNS with the client community, the prospect community, as well as the analysts and the advisor community.

Speaker 3: the ability for us to continue to lead them in terms of programs that they must do to stay relevant and ahead of their competition is going to be front and center. And that gives us a lot of confidence about the business momentum for WNS, as well as I would say for the sector for the long term.

The ability for us to continue to lead there in terms of programs that they must do to stay relevant and ahead of their competition is going to be front and center and that gives us a lot of confidence on Barbie business momentum for WNS as well as I would say for the sector for the long term.

Keshav Murugesh: So, from our point of view, in terms of capital allocation, first and foremost, we will continue to keep looking for those, you know, tuck in M&A targets, you know, that we have spoken about. That can add more capability so that things turn around. We can leverage that capability to become, you know, even more impactful with every one of our clients. There's a strong pipeline of candidates that they're constantly looking at. And if something, you know, it makes sense for us and adds the bright kind of impact from a capability point of view, we will pull the trees out there.

Yeah, and just just to reiterate gives his comments are under I think when you look at for example, the four years prior to the pandemic when the macro was healthy.

Speaker 2: Yeah, and just just to reiterate, Kisha's comments surrender. I think when you look at, for example, the 4 years prior to the pandemic, when the macro was healthy. What you'll see is that our business was steadily accelerating and.

What youll see is that our business was steadily accelerating and.

Speaker 2: To the extent that traditionally people looked at these businesses as cost reduction types of plays, the reality was I think what you saw in a healthy macro, both in terms of clients willingness to look at strategic outsourcing engagements in terms of the types of clients that we're looking at them, right? These were clients that weren't struggling, these were clients looking for competitive advantage, looking for digitization and automation, looking for excess capacity, right? The reasons clients were coming to us.

To the extent that traditionally people looked at these businesses as cost reduction types of plays the reality was I think what you saw in our healthy macro both in terms of clients' willingness to look at strategic outsourcing engagements in terms of the types of clients that we're looking at them right.

Keshav Murugesh: Other than that, as Sanjay and Dave mentioned, we've also taken approvals for our buyback programs, right? So, we continue to be very, very positive about the overall, you know, health of the business, the momentum that we can create for the long term. And as and when we believe the opportunity is right, we will continue to, you know, accelerate our buyback programs like we did earlier this year.

Our clients that weren't struggling these were clients looking for competitive advantage looking for Digitization and automation looking for excess capacity right. The reasons clients were coming to us for the four years prior to the pandemic were not about cost reductions they were about needing to automate in order to remain competitive in the fab.

Speaker 2: for the four years prior to the pandemic were not about cost reductions. They were about needing to automate in order to remain competitive.

Keshav Murugesh: All right, thanks. Thank you.

Speaker 2: The fact that we're in this environment now where automation, digitization, and now the potential impacts for AI and Gen AI are front and center, right? That digitization theme is not going away. The only question is does cost production layer an additional catalyst on top of it or not? But again, I think back to my comment earlier, when you look at our top line growth, when you look at the growth engine in our business, extremely healthy right now.

We're in this environment, now where automate automation digitization and now the potential impacts for AI and <unk> are front and center.

David Koning: And our next question coming from the line up, David Coney with beer, do you want us to open? Even your line is open, please check in with button. And Dave seems to be having a problem with the speaker.

Digitization theme is not going away. The only question is does cost reduction layer in additional catalyst on top of it or not but again I think back to my comment earlier when you look at our top line growth. When you look at the growth engine in our business extremely healthy right now in this environment.

Speaker 2: It's the lost business, it's the volume, it's the project.

It's the lost business, it's the volume that's the projects.

Speaker 2: the healthcare client that is creating the challenge for us.

The healthcare client that is creating the challenge for us this year.

Understood and then as a follow up.

Speaker 13: Understood. And then as a follow up, just the commentary on how important it is to kind of continue increasing the number of employees that are working from the office.

Just the commentary on how important it is to kind of continue increasing the number of employees that are working from the office.

Unknown Executive: Our next question coming from the line up, sir, and your tin, what's your free feel on a cell phone?

Speaker 13: Is that being driven by client requirements here, and maybe how does that impact your margin profile in terms of just the optimization of Google?

Is that being driven by claim requirements here and maybe how does that impact your margin profile in terms of just the optimization of global delivery.

Keshav Murugesh: Good morning. So I'd like to start with a question about just the commentary earlier about having more large deal opportunity than at any point in the past. And then you also mentioned something about potentially a mix of changes ever increasing, and focus on cost-take-up projects versus the transformation projects. Can you provide a little bit of additional color there in terms of is that a lot of the product of the curtains and certain macro environment that we're seeing?

Speaker 4: Yeah, you know, so the work from office basically, you know, depending upon various factors, one definitely, as you mentioned, you know, based on the client requirement, it can be regulatory because of the data privacy and some of those other, you know, requirements.

Yes.

No.

From office basically depending upon various factors one definitely as you mentioned is the client requirements.

It can be immediately because of the data privacy and some of those others.

No.

The requirement.

Speaker 4: Third, it can be also from a, you know, geography specific and specifically in that tier two, because of the infrastructure, right? Whether it's because in tier two cities, you have power outages, you have, you know, bandwidth challenges, so, you know, employees are required to be working from office. So there's a various factors which gets considered to return to office and we believe at this stage.

Give me also promo.

Geography specific.

Typically in the year or two because of the infrastructure alright, because tier two cities you have power outages you have.

Keshav Murugesh: What's kind of driving that? And if we should begin to see the macro economy normalize, how should we think about that opportunity and client decision making at that point? Should we expect a step back or what does the big picture look like for me directly?

Bandwidth challenges.

<unk> are required to be walking from office. So these are the biggest factors, which we get consider return to office and we believe at this stage.

Keshav Murugesh: Yeah, maybe I'll take a stab at that. First and foremost, I think the pivoting of the model around some of the new technology changes, as well as the requirements that customers are facing because of the stress macro also means that they're looking for partners who can actually engage with them at the highest levels and can really help them in terms of navigating the current crisis and creating opportunity for them. And that is actually resulting, first and foremost, in a number of CXO level conversations for us at a level that we have not seen before.

Speaker 4: By the year end, as an average, 70% is a good number from a work-from-office. And it will depend as we move forward. Just to remind, even from a country like India, where it is a temporary concession, what has been given by the government to work from home at this stage, and we'll have to wait and watch how those things move as we move forward.

No.

Baidu has an average 70% is a good number from a work from office.

And it will depend as we move forward just to remind everyone from a country like India.

I know there is a temporary <unk>.

Question, what has been fueled by the government to work from office.

At this stage and we'll have to wait and watch households, these moves as we move forward.

Speaker 4: But having said that, if those things continue, we believe 70-75% is a good...

But having said that if those things continue we believe 70% to 75% is a good issue.

Speaker 4: ratio to have work from office as a mimics.

Sure.

To have firm office as a mix.

Speaker 4: Uh, because this is a new, uh, this hybrid model of the new way of, from a BCB perspective, as we move forward, because, uh, you know, client want to be much prepared.

This is a new.

This hybrid model of the new <unk>.

Keshav Murugesh: I think it's very exciting to see the kind of conversations we're having with prospects, as well as existing clients in terms of completely new programs that we may not have considered before, but are now being pushed to look at because they want to stay ahead of the game as far as AI, Gen AI, some of these new projects. And at the same time, also these smart in terms of cost leadership programs.

BCP plus I think as we move forward because.

Clients want to be much prepared for that and then I think from a margin perspective.

Speaker 2: And I think from a margin perspective, Senator, what that means is that we should have

What that means is that we should have easing headwinds right. I mean, this has been a pretty significant headwind for us over the last year year and a half as we got back into the office here, but we moved from 65% last quarter to 69% now what you should see over the next several quarters, if we're targeting 75 <unk>.

Speaker 2: easing headwinds, right? I mean, this has been a pretty significant headwind for us over the last year, year and a half as we got back into the office here. But, you know, we moved from 65% last quarter to 69% now. What you should see over the next several quarters is if we're targeting 75%, for example, as an end state here, that quarter to quarter and the year over year headwinds that we see should start to abate from a margin perspective.

Keshav Murugesh: So that is the excitement for WNS in terms of just the quality of conversations we're having, the size of some of the deals that we are looking at. Let me solve with the cap to take out which may have differed, but it's committed to providing us that revenue that we spoke about earlier. So that's the first aspect. Beyond that, as we come out of the macro environment, I actually think because of the quality of conversations that are taking place, and the new relationships being built by WNS with the client community, the prospect community, as well as the analyst and the advisor community.

<unk> for example, as an end state here.

The quarter to quarter and the year over year headwinds that we see should start to abate from a margin perspective.

Got it thank you.

Thank you and our next question coming from the line of.

Speaker 1: Thank you. And our next question coming from the lineup, Vincent Colescale with Farrington Research. You're on a cell phone.

<unk> scaled with Barrington Research your line is now open.

Yes.

Speaker 14: Yes, curious if we look at the travel volume decline, how much in order of magnitude is company related versus the max?

Yes.

If we look at the travel volume decline.

How much.

In order of magnitude as company related versus the macro.

Keshav Murugesh: The ability for us to continue to lead them in terms of programs that they must do to stay relevant and ahead of their competition is going to be front and center. And that gives us a lot of confidence about the business momentum for WNS, as well as I would say for the sector for the long term.

Yes. Good question, Vince I think if you look at again, it's hard to tell sometimes it's very difficult.

Speaker 2: Yeah, good question, Vince. I think if you look at, again, it's hard to tell. Sometimes it's very difficult in working with a client to decipher.

Working with the client to decipher.

Speaker 2: You know, if the volume is down, is it because the macro has dropped for their services and their geography or for the type of services that they're providing?

If the volume is down is it because the macro is dropped for their services and their geography or for the type of services that they're providing versus they are losing market share to another player or they've got internal challenges that they're dealing with what they've got.

Keshav Murugesh: Yeah, and just to reiterate, I think when you look at, for example, the four years prior to the pandemic when the macro was healthy, what you'll see is that our business was steadily accelerating. And to the extent that traditionally people looked at these businesses as cost reduction types of plays, the reality was I think what you saw in a healthy macro, both in terms of clients willingness to look at strategic outsourcing engagements, in terms of the types of clients that we're looking at them.

Speaker 2: versus they're losing market share to another player, or they've got internal challenges that they're dealing with, or they've got other structural issues.

Other other structural issues.

Speaker 2: You know, I would if just putting a cocktail napkin on this, I would say that two thirds of this is company specific and a third of this is macro.

I would.

Just putting a cocktail napkin on this I would say that two thirds of this is company specific in the third of this is macro.

Okay.

And my follow up is.

Speaker 14: And my follow up is if we look at the customer interactive business

If we look at the customer interactive business, and we weigh opportunities and threats over say a three to five year time horizon.

Speaker 14: And we weigh opportunities and threats over, say, a three to five-year time horizon, you know, from generative AI. So what is your current thing?

Keshav Murugesh: These were clients that weren't struggling, these were clients looking for competitive advantage, looking for digitization and automation, looking for excess capacity. The reasons clients were coming to us for the four years prior to the pandemic, were not about cost production. They were about needing to automate in order to remain competitive. The fact that we're in this environment now where automation digitization and now the potential impacts for AI and Gen AI are front and center, right, that digitization theme is not going away.

Oh.

From generally from Shannon.

Generative AI.

Sort of what is your current thinking.

Speaker 2: I think we look at it as an opportunity, Vince. I mean, certainly there will be productivity pressure, but some of that is standard to our business as it is. Our contracts typically include three to 4% headwinds on a year-over-year basis structurally today.

I think we look at it as an opportunity events I mean, certainly there will be productivity pressure, but some of that is standard to our business as it is our contracts typically include 3% to 4% headwinds on a year over year basis structurally today, what we've seen in the use cases and the client.

Speaker 2: what we've seen in the use cases and the client conversations that we've had to date. And remember, WNS is not operating at the entry level.

Keshav Murugesh: The only question is cost reduction, layer, and additional catalyst on top of it or not. But again, I think back to my comment earlier, when you look at our top-lying growth, when you look at the growth engine in our business, extremely healthy right now in this environment. It's the lost business, it's the volume, it's the project, it's the healthcare client, it's creating the challenge for us, this year, understood.

Conversations that we've had to date and remember WNS is not operating at the entry level.

Speaker 2: on CX work. We're not doing low-end, level one help desk work. The stuff that we're doing is domain-centric, it's specialized, and that's the reason why clients are using us and not a peer contact center or peer calls.

On <unk>, we're not doing low end level, one helped us work the stuff that we're doing is domain has been corrected specialized and thats. The reason why clients are using us and not a pure context center or a pure call center right.

Speaker 2: But when we look at the opportunities that we're seeing in CX moving forward, especially if they relate to our cuss.

But when we look at the opportunities that we're seeing in CX moving forward, especially as they relate to.

Sanjay Puria: And then as a follow up, just the commentary on how important it is to kind of continue increasing that number of employees that are working from the office, is that being driven by client requirements here and maybe how does that impact your margin profile in terms of just the optimization of global delivery? Yeah, you know, so well from office basically, depending upon various factors, one, definitely as you mentioned, you know, it's based on the client requirement, it can be regulatory because of the data privacy and some of those other, you know, the requirement.

To our customer base.

Speaker 2: It's more about improving quality of service. It's more about improving.

It's more about improving quality of service, it's more about improving retention of end customers or end customer satisfaction or hyper personalization of these interactions than it is about removing cost from the system. So.

Speaker 2: retention of end customers or end customer satisfaction or hyper-personalization of these interactions than it is about removing costs from the system.

Speaker 2: It's Kasia Sedans prepared remarks. Some of everything that we're looking at here involves a human in the loop.

<unk> said in his prepared remarks, almost everything that we're looking at here involves the human in the loop. When we look at these types of activities and benefits that we're going to be able to deliver for clients I think they're not thinking about this as how do I take 10% to 20% 30% out of my costs I think they are thinking about this thing how do I improve the quality of my service so that.

Speaker 2: When we look at these types of activities and benefits that we're going to be able to deliver for clients.

Speaker 2: I think they're not thinking about this as how do I take 10, 20, 30% out of my costs. I think they're thinking about this saying how do I improve the quality of my service so that I can drive top.

Sanjay Puria: Third, it can be also from a, you know, geography specific and specifically in that tier two because of the infrastructure, right? Whether it's because in tier two cities, you have power outages, you have bandwidth challenges, so employees are required to be working from office. So these are various factors which get considered to return to office and we believe at this stage, you know, by the year end as an average 70 person is a good number from a work from office and it will depend as we move forward, you know, just to remind even from a country like India, you know, where it is a temporary, you know, concession, what has been given by the government to work from office, work from home at this stage and we'll have to wait and watch how those things move as we move forward.

I can drive topline.

Speaker 3: Yeah, I just want to add here that, you know, our dependence on pure contact center work is minimal. Really, what we do is much more, you know, digital CX kind of work where, you know, we're doing a lot of technology oriented work and the human is interacting much more to deliver an outcome for our clients. So the need for both to work together is critical. I think clients understand that WNS is constantly adding new technology, including Gen AI models.

Yes, I just wanted to add that you know.

Our dependence on pure contact center work is minimal really what we do is much more in our digital CX kind of work.

We're doing a lot of technology oriented work.

Humans are interacting much more to deliver an outcome for our clients. So the need for both to work together.

I think clients understand the WNS is constantly adding new technology, including Jim AI models to possibly cannibalize some part of our own digital CX revenue in order to stay very relevant and become far more sticky in terms of the client relationship and.

Speaker 3: to possibly cannibalize some part of our own digital CX revenue in order to stay very relevant and become far more sticky in terms of the client relationship and that's with the trust.

That's where the trust.

Speaker 3: you know gets built out, you know, significantly. And we're also seeing a trend where, you know, where clients have moved completely to automated models. Customers, their end customers are now pushing back, saying that's not the model they want, particularly in, you know, premier kind of processes, where ultimately an end customer,

Sanjay Puria: But having said that, if those things continue, we believe 70, 75% is a good ratio to have work from office as a mix because this is a new, this hybrid model of the new way off from a BCB plus specie as we move forward because, you know, Klein wanted to be much prepared for that. Yeah, and I think from a margin perspective, so under what that means is that we should have easing headwinds, right?

<unk> built out.

Significantly and we are also seeing a trend where.

Yes.

Clients have moved completely to automated and models customers that end customers are now pushing back saying that's not the model they want particularly.

Premier kind of processes and ultimately an end customer.

Speaker 3: very quickly wants a solution, wants to have an interaction sometimes with a high quality individual as well. And that's the space that we are taking, that we are spending a lot of time on, which is high growth, if you ask me, has potential for the long term, as well as has a high margin profile as well.

Very quickly launched our solution wants to have an interaction and sometimes we're a bit high quality individual as well.

Sanjay Puria: I mean, this has been a pretty significant headwind for us over the last year, year and a half as we got back into the office here, but, you know, we moved from 65% last quarter to 69% now. What you should see over the next several quarters is if we're targeting 75% for example, as an end state here, that quarter to quarter and the year over your headwinds that we see should start to obey from a margin perspective.

The space that we are taking that we are spending a lot of time on rich's.

Hydro up if you asked me as potential for the long term as well as half.

Unknown Executive: Got it.

The margin profile as well.

Speaker 3: whatever we have discussed as of now on this call till now has been more around h2 related issues and more around specific

Whatever we have discussed as of now on this call to now has been more around age two related issues are more around specific customer related issue that our volumes project based work that delay that we spoke about in the large insurance captive ramp and most importantly.

Speaker 3: customer-related issues around volumes, project-based work, the delay that we spoke about in the large insurance capital ramp, and most importantly, around conservative client outlooks that have been provided to us at this point in time. But if you look at the macro kind of interactions that WMS is having, we are actually having really top-quality interactions with prospects on the other side, our existing customers.

Unknown Executive: Thank you.

Unknown Executive: And our next question coming from the line of Vincent Colensky with Browns and Research, you want to open? Yes, curious if we look at the travel volume decline, how much in order of magnitude is company-related versus the macro? Yeah, good question, Vince. I think if you look at, again, it's hard to tell, sometimes it's very difficult, you know, in working with the client to decipher, you know, if the volume is down, is that because the macro has dropped for their services and their geography or for the type of services that they're providing versus their losing market share to another player or they've got internal challenges that they're dealing with or they've got other, you know, other structural issues. You know, I would, if just putting a cocktail napkin on this, I would say that, you know, two-thirds of this is company-specific and the third of this is macro.

Ron comes over there no client outlooks that have been provided to us.

At this point in time, but if you look at the macro.

For interactions that <unk> had we had actually having really top quality interactions with prospects on the other side our existing customers.

Speaker 3: beyond the three or four areas, the three or four trends that we spoke about are actually having great conversations with us. All are required entities are looking at growing even faster through new conversations that are having on an integrated business with our client partner teams.

The three or four areas.

For clients that we spoke about on actually having great conversations with us all on acquired entities.

Looking at growing even faster through new conversations that you're having.

On an integrated business with ours.

Our client partner.

Teams and finally, we believe that with the investments we have made in AI and <unk> and.

Speaker 3: And finally, we believe that with the investments we have made in AI and Gen AI and the pilots that we are now driving, sooner rather than later, you know, boards.

And the pilots that we are now driving sooner rather than later.

The boards of companies, where our clients are required will also be asking them about how quickly they will take the benefits of some of the solutions that people like WNS are providing for them. So I think that pressure will also be on the clients will start moving their feet over the next few quarters.

Speaker 3: where our clients reside will also be asking them about how quickly are they going to take the benefits of some of the solutions that people like WNES are providing for them. So I think the pressure will also be on the clients to start moving their feet over the next few quarters. I think at that point in time, we will see a lot more opportunity and revenue schemes as well as margin updates coming from some of those opportunities. So quite bullish about the long term future days, how we are seeing our business momentum.

Vincent Colicchio: And my follow-up is if we look at the customer interactive business and we weigh opportunities and threats, over say a three to five-year time horizon, you know, you know, from January, from January to January to via AI, sort of what is your current thinking? I think we look at it as an opportunity fence. I mean, certainly there will be productivity pressure, but you know, some of that is standard to our business as it is.

Just wanted to add we're going to see a lot more opportunity on revenue streams as well as margin uptick coming from some of those opportunities. So we're quite bullish about the long term future.

Future bids.

We're seeing our business momentum.

Thanks for all the color.

Thanks Vince.

Speaker 20: Thanks, Ben.

Vincent Colicchio: Our contracts typically include three to four percent headwinds on a year-over-year basis structurally today. What we've seen in the use cases and the client conversations that we've had today, and remember WNS is not operating at the entry level on CX work. We're not doing low-end level one help desk work. The stuff that we're doing is domain centric, it's specialized. And that's the reason why clients are using us and not a peer context and a peer call center, right?

Speaker 1: Thank you, ladies and gentlemen. At this time, we have no further questions in the Q&A queue. This will conclude today's conference call. Thank you for your participation. You may now disconnect.

Thank you ladies and gentlemen at this time, we have no further questions in the county.

This will conclude today's conference call.

Thank you for your participation you may now disconnect.

Vincent Colicchio: But when we look at the opportunities that we're seeing in CX moving forward, especially if they relate to our customer base, it's more about improving quality of service, it's more about improving retention of end customers or end customer satisfaction or hyper personalization of these interactions. Then it is about removing cost from the system. So it's cases that this prepared remarks, almost everything that we're looking at here involves a human in the loop.

Vincent Colicchio: When we look at these types of activities and benefits that we're going to be able to deliver for clients, I think they're not thinking about this is how do I take 10, 20, 30 percent out of my cost. I think they're thinking about this thing, how do I improve the quality of my service so that I can drive top line? Yeah, I just want to add here that our dependence on peer contact center work is minimal really.

Vincent Colicchio: What we do is much more digital CX kind of work, where we're doing a lot of technology oriented work and the human is interacting much more to deliver an outcome for our clients. So the need for both to work together is critical. I think clients understand that WNS is constantly adding new technology, including Genai models to possibly cannibalize some part of our own digital CX revenue in order to stay very relevant and become far more sticky in terms of the client relationship.

Vincent Colicchio: That's where the trust gets built out significantly. We're also seeing a trend where clients have moved completely to automated models. Customers, their end customers are now pushing back saying that's not the model they want, particularly in a premier kind of processes where ultimately an end customer very quickly wants the solution and wants to have an end customer. The interaction sometimes with a high quality individual as well.

Keshav Murugesh: And that's the space that we are taking that we are spending a lot of time on, which is, you know, the high growth, if you ask me, as potential for the long term as well as has, you know, high margin profile as well.

Keshav Murugesh: Whatever we have discussed, as of now on this call till now, has been more around H2 related issues and more around specific, you know, customer related issues around volumes, project ways, this work, you know, the delay that we spoke about in the large insurance, you know, capital ramp and most importantly around conservative, you know, client outlooks that have been provided to us, you know, at this point in time. But if you look at the macro, you know, kind of interactions that WNS is having, we're actually having really tough quality interactions with customers on the side, our existing customers, beyond the three or four areas, you know, three or four clients that we spoke about are actually having great conversations with us, all are required entities, you know, looking at, you know, growing even faster through new conversations that are having on an integrated basis with our, you know, client partner teams.

Keshav Murugesh: And finally, we believe that with the investments we have made in AI and Gen AI and the pilots that we are now driving sooner rather than later, you know, boards of companies where our clients reside will also be asking them about how quickly are they going to take the benefits of some of the solutions that people like WNS are providing for them. So I think the pressure will also be on the clients to start moving their feet, you know, over the next few quarters.

Keshav Murugesh: I think at that point in time, we will see a lot more opportunity and revenue schemes as well as margin update coming from some of those opportunities. So quite bullish about the long term future based on, you know, how we're seeing our business momentum.

Keshav Murugesh: Thanks for all the color.

Keshav Murugesh: Thanks, Vince.

Unknown Executive: Thank you, Lee Sinjoman.

Unknown Executive: At this time, we have no further questions in the CUNY queue.

Unknown Executive: This welcome to today's conference call. Thank you for your participation.

Unknown Executive: You may now.