WNS (Holdings) Limited ((WNS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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WNS (Holdings) Limited’s recent earnings call painted a picture of cautious optimism. The company showcased promising sequential growth and a robust pipeline, particularly in Gen AI solutions and significant deals. However, challenges were evident, with stagnant year-over-year revenue growth and pressure on margins. Despite these hurdles, strong cash flow and business expansions hinted at a positive future outlook.
Sequential Revenue Growth and Expansion
WNS recorded a sequential revenue growth of 2.7% on a reported basis and 3.2% on a constant currency basis in Q3 2025. This growth was primarily driven by a widespread demand for digitally led business transformation, showcasing the company’s ability to expand in a dynamic market.
Strong New Business Momentum
The company demonstrated strong momentum in new business by adding seven new logos and expanding 52 existing relationships during Q3 2025. This reflects a strong pipeline and stable demand for process management deals, positioning WNS for sustained growth.
Gen AI Solutions Progress
WNS has made significant strides in its Gen AI solutions, developing over 30 use cases and 13 digital assets. With 13 clients already in production and another 20 committed or underway, the company is solidifying its position in the AI-driven transformation space.
Healthy Cash Flow
In Q3 2025, WNS generated $88.7 million in cash from operating activities, maintaining a strong cash position of $231.5 million. This healthy cash flow underscores the company’s financial stability amid market challenges.
Large Deal Pipeline
The company’s large deal pipeline remains robust and healthy, with several opportunities on the horizon that could potentially accelerate growth in the coming quarters.
Flat Year-over-Year Revenue Growth
Despite sequential improvements, WNS reported only a 1% increase in net revenue year-over-year for Q3 2025, remaining flat on a constant currency basis. This highlights a need for strategic initiatives to bolster year-over-year performance.
Operating Margin Pressure
The adjusted operating margin fell to 19.3% from 19.7% the previous year, reflecting challenges such as lower employee utilization and increased infrastructure investments. Addressing these issues will be key to improving profitability.
High Attrition Rates
WNS continues to face high attrition rates, which rose to 32% from 29% in the same quarter last year. This presents a challenge for talent retention and operational efficiency.
Lower Adjusted Net Income
Adjusted net income for Q3 2025 decreased to $47 million from $58.5 million the previous year, indicating pressure on profitability amid growing operational costs.
Forward-Looking Guidance
Looking ahead, WNS expects high single to low double-digit revenue growth in fiscal 2026, driven by stable demand for digital transformation services. The firm is advancing its large deal pipeline and anticipates it will contribute significantly to growth. Fiscal 2025 guidance projects net revenue between $1.255 billion and $1.271 billion, with adjusted net income ranging from $205 million to $209 million. Investments in AI capabilities are expected to further enhance the company’s competitive edge.
In summary, WNS’s earnings call reflected a careful balance of optimism and caution. While sequential growth and a strong pipeline provide a positive outlook, challenges such as stagnant year-over-year revenue growth and high attrition rates remain. The company’s strategic focus on digital transformation and AI capabilities positions it well for future growth, but execution will be critical to overcoming current hurdles.
