Sign in

You're signed outSign in or to get full access.

W(

WNS (HOLDINGS) LTD (WNS)·Q1 2026 Earnings Summary

Executive Summary

  • Revenue of $353.8M rose 9.5% YoY and 5.2% QoQ, materially above consensus, driven by broad-based demand, higher transaction volumes, FX tailwinds, and contribution from Kipi.ai . Consensus revenue was $323.5M*, implying a beat of ~$30.3M and ~9.4%*.
  • Adjusted diluted EPS of $1.02 beat the Street ($0.95*) and was “ahead of company expectations,” while GAAP diluted EPS fell to $0.48 on seasonality, wage increases, and lapping a Q4 one-time asset sale benefit . EPS beat ≈ $0.07*.
  • Profit declined to $21.8M vs. $50.8M in Q4, pressured by non-GAAP-excluded items (share-based comp, Kipi.ai amortization, Capgemini transaction costs) and Q1 client productivity commitments; adjusted net income of $46.0M was resilient .
  • No Q1 earnings call and no FY26 guidance update due to the pending Capgemini acquisition; WNS completed its authorized share buyback, repurchasing 1.3M shares ($75.4M) .
  • Near-term stock narrative hinges on the sizable revenue/adjusted EPS beat and the Capgemini $76.50 per-share scheme of arrangement, with closing expected by end-2025 subject to approvals .

Values with asterisks were retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Strong top-line momentum: revenue $353.8M (+9.5% YoY, +5.2% QoQ) and revenue less repair payments $339.9M (+8.8% YoY, +5.2% QoQ); constant-currency RLRP +7.1% YoY and +2.9% QoQ .
  • Kipi.ai accretion and pipeline: Kipi.ai contributed ~2.0% YoY and 1.5% QoQ to constant-currency RLRP; management highlighted “robust” momentum and an industry-changing vision combining AI and domain expertise with Capgemini (“Intelligent Operations”) .
  • Adjusted results ahead of internal targets: “WNS also delivered adjusted net income and adjusted EPS ahead of company expectations,” and completed buyback of 1.3M shares .

What Went Wrong

  • GAAP profitability compressed: net income fell to $21.8M and GAAP diluted EPS to $0.48, impacted by seasonality, wage increases, and elevated non-GAAP-excluded costs (share-based comp $11.7M, amortization $8.7M, acquisition expenses $4.1M, Capgemini transaction expenses $2.2M) .
  • Vertical/client headwinds: continued drag from loss of a large Healthcare client and lower online travel volumes offset some growth .
  • No guidance update/call amid pending acquisition, reducing near-term visibility for investors; the company directed stakeholders to the forthcoming 10-Q .

Financial Results

MetricQ3 FY2025Q4 FY2025Q1 FY2026
Revenue ($USD Millions)$333.0 $336.3 $353.8
Revenue less repair payments ($USD Millions, non-GAAP)$319.1 $323.3 $339.9
Diluted EPS (GAAP, $)$1.07 $1.12 $0.48
Adjusted diluted EPS (non-GAAP, $)$1.04 $1.45 $1.02
Operating Margin % (GAAP)13.6% 15.0% 9.4%
Adjusted Operating Margin % (non-GAAP, on RLRP)19.3% 21.4% 18.0%
Net Income Margin % (GAAP)14.6% 15.1% 6.1%
Adjusted Net Income Margin % (non-GAAP, on RLRP)14.7% 20.5% 13.5%

Growth Summary (Q1 FY2026):

  • Revenue growth: +9.5% YoY; +5.2% QoQ
  • RLRP growth: +8.8% YoY; +5.2% QoQ
  • Constant-currency RLRP: +7.1% YoY; +2.9% QoQ

Vs. Wall Street Consensus (S&P Global):

MetricConsensus MeanActualSurprise
Revenue ($USD Millions)$323.5*$353.8 +$30.3*
Adjusted Diluted EPS ($)$0.95*$1.02 +$0.07*

Values with asterisks were retrieved from S&P Global.

KPIs and Balance Sheet/Cash Flow

KPIQ3 FY2025Q4 FY2025Q1 FY2026
DSO (days)34 34 36
Global headcount63,390 64,505 66,085
Cash & Investments ($M)$231.5 $267.4 $225.8
Total Debt ($M)$199.6 $243.5 $266.2
Cash from Operations ($M)$88.7 $53.4 $29.5
Capital Expenditures ($M)$12.1 $18.6 $14.8
Share repurchases (shares/$)—2.8M shares; $149.7M treasury balance 1.3M shares; $75.4M cash out

Note: Segment-level revenue was not disclosed in the Q1 FY2026 earnings release; RLRP (non-GAAP) reflects adjustments in BFSI for repair payments .

Guidance Changes

MetricPeriodPrevious Guidance (Apr 24, 2025)Current Guidance (Q1 FY2026)Change
Revenue less repair payments ($M, non-GAAP)FY2026$1,352–$1,404 No update provided due to pending Capgemini transaction No update
ANI ($M, non-GAAP)FY2026$199–$211 No update No update
Adjusted diluted EPS ($)FY2026$4.43–$4.70 (based on ~44.9M diluted shares) No update No update
Capex ($M)FY2026Up to $65 No update No update

Earnings Call Themes & Trends

Note: WNS did not hold a Q1 FY2026 earnings call .

TopicPrevious Mentions (Q3 FY2025)Previous Mentions (Q4 FY2025)Current Period (Q1 FY2026)Trend
AI/technology initiativesEmphasis on AI/GenAI-enabled offerings and pipeline progress Acquisition of Kipi.ai; two large transformational deals signed; margin expansion Kipi.ai contributed ~2.0% YoY/~1.5% QoQ to cc RLRP; vision with Capgemini to deliver “Intelligent Operations” Strengthening capability and integration
Demand/macroNew logos and expansions offset healthcare client loss and online travel softness Sequential growth cadence restored; some FX and project completion headwinds Broad-based growth; FX tailwinds; online travel still lower; annual productivity commitments weighed sequentially Sequential momentum with residual headwinds
Profitability driversContingent consideration reversal aided profit; margin expansion One-time facility asset sale +$12.2M; higher margins; share repurchase Seasonality, wage increases, and non-GAAP-excluded costs compressed GAAP profit; adjusted metrics ahead of plan GAAP margin compression QoQ; adjusted resilience
Corporate actions—FY2026 guidance provided; share repurchase executed Pending acquisition by Capgemini; no call and no guidance update; scheme document published Transition to transaction closing

Management Commentary

  • “In the fiscal first quarter, WNS delivered solid growth in constant currency revenue less repair payments of 7.1% year-over-year and 2.9% sequentially. Our acquisition of Kipi.ai contributed 2.0% and 1.5% respectively… WNS also delivered adjusted net income and adjusted EPS ahead of company expectations and completed our authorized share buyback program” — Keshav Murugesh, CEO .
  • “As we work toward closing the previously announced transaction with Capgemini… Together, we are creating an industry-changing force uniting cutting edge AI and technology with deep domain and process expertise to deliver ‘Intelligent Operations’” — Keshav Murugesh, CEO .

Q&A Highlights

  • No Q1 FY2026 conference call was held; management did not provide an update to FY2026 guidance, directing investors to the upcoming 10-Q .

Estimates Context

  • Revenue of $353.8M vs. consensus $323.5M*; Adjusted diluted EPS of $1.02 vs. $0.95*. Beat driven by broad-based demand, Kipi.ai contribution, higher volumes, and FX tailwinds; GAAP EPS weighed by seasonality and higher non-GAAP-excluded expenses .
  • Street models likely need to reflect stronger RLRP trajectory and higher Q1 cost intensity (share-based comp, amortization, transaction costs) affecting GAAP EPS profile .

Values with asterisks were retrieved from S&P Global.

Key Takeaways for Investors

  • Strong top-line outperformance and adjusted EPS beat, with cc RLRP growth of 7.1% YoY and 2.9% QoQ; revenue quality supported by new clients, expansions, and Kipi.ai .
  • Expect near-term GAAP margin pressure to normalize post-Q1 seasonality and as transaction-related and acquisition-related costs moderate; adjusted metrics showed durability .
  • Capgemini scheme at $76.50 per share sets a ceiling on equity upside near term; timeline targets effectiveness by end-2025, subject to approvals .
  • Capital allocation remains shareholder-friendly: buyback completion (1.3M shares, $75.4M) alongside debt repayment; monitor leverage as total debt rose to $266.2M .
  • Watch online travel and healthcare exposures for recovery vs. lingering volume/client losses; demand otherwise broad-based .
  • Kipi.ai is strategically accretive (AI/data/analytics), contributing 1.5–2.0% to cc RLRP; integration with Capgemini could accelerate “Intelligent Operations” positioning .
  • Trading implications: near-term spread likely anchored by deal terms; fundamental beats may support deal certainty narrative and reduce downside risk while awaiting court/shareholder approvals .