WNS (Holdings) Ltd. (NYSE:WNS) Q2 2019 Earnings Conference Call Transcript

Oct 25, 2018 • 08:00 am ET

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WNS (Holdings) Ltd. (NYSE:WNS) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

(Operator Instructions) Maggie Nolan, William Blair.

Analyst
Maggie Nolan

I'm wondering if you can break down the year-over-year margin expansion in a little more detail between foreign currency and productivity and other factors. And then where do you expect the full year margins to come in relative to your long-term goals, operating margins in the high-teens, just given that you've had strong margins in the first half of the year?

Executive
David Mackey

Sure, let me take that, Maggie. In terms of the year-over-year margins, obviously, if you look at what's implied in our guidance, we're looking at for fiscal 2019 now, a 20% operating margin for the full year, which is in comparison to a 19% adjusted operating margin that we did last year. So we're actually planning for fiscal 2019 to be 100 basis points, slightly over 100 basis points better on the adjusted operating margin year-over-year. Safe to assume that based on our current visibility and in the current exchange assumptions, about half of that increase is going to be related to FX, net of hedging, and half of that increase is going to be operational and related to increased volume and leverage on our business.

Analyst
Maggie Nolan

Okay, great. And then can you share any updated thoughts that you guys have on the potential impact of Brexit? And are you seeing any impact on the business yet?

Executive
Keshav Murugesh

Yeah, I'll take that. So Brexit has been discussed for such a long time and as we have been reminding all of you over the past few quarters, we have actually not seen any significant impact from Brexit particularly around the pipeline of business, the need for clients to continue to move ahead with their strategic programs. And at this point in time, as we interact with clients and prospects, we haven't seen any let up in their need to save money, become more efficient and also transform their businesses. So at this point in time, no impact.

Operator
Operator

Moshe Katri, Wedbush.

Analyst
Moshe Katri

Just to verify here, you mentioned, in terms of your guide, there was a constant currency for the year, for the fiscal year. Is that also organic constant currency? The 12% number that you gave? And then can you remind us what were the prior expectations for the FX impact on grants that you had last quarter?

Executive
David Mackey

Sure, so let me take that. Yes, the short answer to your first question is that the entire growth for fiscal 2019 is going to be organic. So when you look at the guidance that we've provided for this fiscal year from a revenue perspective, which currently sits at $775 million to $801 million, we are looking at 5% to 8% on a recorded basis and 8% to 12% on a constant-currency basis. The comparable numbers from last quarter's guidance were $777 million to $821 million from a revenue perspective, which represented 7% to 13% organic constant currency. So essentially, in the last three months, what we've done is we've increased the low end of the range by 1%. We've