Keshav Murugesh - CEO Sanjay Puria - CFO Ron Gillette - COO David Mackey - Corporate SVP, Finance and Head, IR.

Joseph Foresi - Cantor Fitzgerald Ashwin Shirvaikar - Citi Frank Atkins - SunTrust Robinson Anil Doradla - William Blair Joseph Vafi - Loop Capital Bryan Bergin - Cowen Ed Caso - Wells Fargo Mayank Tandon - Needham & Company Brian Kinstlinger - Maxim Group Vincent Colicchio - Barrington Research Puneet Jain - JPMorgan.

Good morning, and welcome to the WNS Holdings’ Fiscal 2017 Fourth Quarter and Full Year 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.

As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Mr. David Mackey, WNS’s Corporate Senior Vice President of Finance and Head of Investor Relations.

David?.

Thank you, and welcome to our fiscal 2017 fourth quarter and full year earnings call. With me today on the call, I have WNS’s CEO, Keshav Murugesh; WNS’s CFO, Sanjay Puria; and our COO, Ron Gillette. A press release detailing our financial results was issued earlier today.

This release is also available on the Investor Relations section of our website at www.wns.com. Today’s remarks will focus on the results for the fiscal fourth quarter and full year ended March 31, 2017. 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 20-F.

This document is also available on the company website. During this call, management will reference certain non-GAAP financial measures, which we believe provides useful information for investors. Reconciliations to these non-GAAP financial measures to GAAP results can be found in the press release issued earlier today.

Some of the non-GAAP financial measures management will discuss are defined as follows. Net revenue is defined as revenue less repair payments; adjusted operating margin is defined as operating margins excluding amortization of intangible assets, share-based compensation and goodwill impairment.

Adjusted net income or ANI is defined as profit excluding amortization of intangible assets, share-based compensation, goodwill impairment, all associated taxes. These terms will be used throughout the call. I would now like to turn the call over to WNS’s CEO, Keshav Murugesh..

Thank you, David. In the fiscal fourth quarter WNS posted solid financial results and it to make progress in positioning the company for long-term success. Q4 net revenue came at $154.1 million, an increase of 13.9% versus last year on a reported basis and 19.1% constant currency.

Sequentially revenues were up 10.2% on a reported basis and 9.9% constant currency. Excluding our acquisitions, of Value Edge, Denali and HealthHelp , organic constant currency revenue increased 13.9% year-over-year and 6.2% sequentially.

In the fourth quarter WNS added 36 new clients, including acquisitions, expanded 10 existing relationships and renewed 14 contracts. Adjusted operating margin and adjusted net income margin which were impacted by acquisition costs of approximately $2 million came in at 18.1% and 15.6%, respectively.

During the fourth quarter we closed two strategic acquisitions designed to adjusted capability gaps in our horizontal and vertical service offerings. In January we finalized our acquisition of Denali Sourcing Services, a leading provider of strategic BPM procurement solutions.

The acquisition of Denali s highly complementary to WNS’s existing capabilities and enable us to get to market end to end source to pay procurement solutions and a strengthened financial accounting solution set. Integration is going well, and we have already being successful in expanding Denali’s revenues.

In March, we announced the acquisition of HealthHelp, an industry leader in care management. We believe this asset is an excellent fit for our BMP approach as it addresses three key focus areas for WNS. First, HealthHelp positions WNS as a strategic player in the care management BPM space and the healthcare vertical.

HealthHelp solutions are focused at the very top end of a payer’s environment, addressing high value, political business, processes including population heath management and healthcare utilization. As the core of HealthHelp’s solutions is deep domain expertise.

The team is largely comprised of industry experts, including MDs, Phds and registered nurses. The company is collaborator with non-denial [ph] model is truly differentiator in the marketplace and drives long-term sustainable cost savings for the healthcare industry, while helping to improve patient outcomes.

Second, HealthHelp’s solutions are delivered with a combination of proprietary technology and predictive analytics. Over 7-% of HealthHelp’s current assessments are handled automatically with a scalable political decision support platform called Consult.

The technology leverages predicative analytics which evaluate and drive further healthcare improvement opportunities. Third, this assets meets our key financial objectives, including strong growth, healthy margins, significant cross-selling opportunities and a recurring revenue model.

I would now like to provide you with a brief recap of our fiscal 2017 performance and then discuss the 2018 outlook, from both a financial and operational perspective, we are pleased with the progress we made in 2017. WNS was able to post full year growth of 8.9% or 15.8% on a constant currency basis.

Organic constant currency revenue growth was robust 14% and our adjusting operating margins finished the year at 19.4%. We believe both of these metrics are among the highest in the BPM industry. We also repurchased 2.2 million shares of stock in fiscal 2017, representing approximately 4% of the shares outstanding.

During the year, we continue to invest in creating differentiation in the marketplace and positioning the company for long-term success. WNS rollouts serve us new capabilities and offerings during the year, addressing key areas such as domain expertise, analytics, technology, digital solutions and employee training.

Examples include3, SocioSEER, a social media analytics platform, which combines machine learning and domain expertise to help companies manage brand health, customer centricity and revenue retention.

DecisionPoint, is a second offering for leadership platform designed to provide C suite executives with data driven perspectives on current and emerging business trends.

Brandttitude, a cloud based business intelligence analytics platform that tracks brand performance, understands customer behaviour and perception's and identifies buying patterns and WNS track are consolidated suite of comprehensive next generation technology solutions for managing complex business processes across industries.

Track leverages domain expertise, embedded analytics, in-depth process knowledge and cutting edge technology to create end to end offerings. WNS also accelerated employee training efforts, expanding on analytics MBA program and strengthening our domain universities to ensure our teams are prepared for the future of BPM.

In addition to these investments, the company completed three tuck-in acquisitions during fiscal 2017, adding Value Edge, Denali, and HealthHelpto to the WNS family. These assets helped WNS to address capability gaps in the areas of pharma analytics, strategic procurement and technology enabled healthcare respectively.

We've also expanded our strategic partnership programs to augment our internal capabilities, including technologies such as RPA. WNS has formalized relationships with Blue Prism, Automation Anywhere and Fusion and we are currently in advanced discussions with several other product tool and platform companies.

During the year we received several awards from the analyst and adviser community, highlighting our favourable position in key verticals that services, including insurance, healthcare, finance and accounting, procurement, analytics, technology and digital services.

WNS was also recognized as a leader in quality, innovation, learning and development and corporate social responsibility. In addition, we announced several large deal wins with the potential to become top 10 accounts over the next few years and continue to make progress improving the productivity of both our hunting and farming sales teams.

It is clear that our investments in technology, analytics and domain expertise are paying off and helping us generate solid revenue growth. As we enter fiscal 2018, our business momentum, including the deal pipeline, contract signings and new project ramps remains broad based and healthy.

To date, we have not seen Brexit or potentially US policy changes meaningfully impact our existing business or client decision making. While we must remain vigilant regarding behaviour - regarding changes in behaviour, pardon me, we remain comfortable that the value we create for our clients will continue to drive business opportunities.

The BPM industry is rapidly evolving as client requirements change.

For WNS this will necessitate continued investment in our business with an emphasis on domain specialization, automation and technology, digital solutions and advanced analytics, successful BPM companies will only - will not only have these capabilities, but be able to combine them to provide clients with real solutions to real business problems.

Increasingly our clients will require that their processes to be delivered with components of automation, while this has the potential to reduce requirements for some lower level labour based functions in the coming years, we believe this trend creates a longer job opportunity to move up the value chain with our clients, as our clients willingness to embrace technology enabled solutions and outcome based models increases, WNS will be able to drive higher margins, make our relationships more resilient and generate more tangible value for our clients.

In our press release issued earlier today, WNS provided our initial guidance for fiscal 2018. We currently expect revenue to be in the range of $680 million to $713 million, representing top line growth of 18% to 23%. Excluding the impacts of currency and hedging, guidance reflects constant currency revenue growth of 19% to 25%.

Visibility to the midpoint of revenue is 90% consistent with April guidance in previous years, adjusted net income for fiscal 2018 is expected to be in the range of $97 million to $105 million or $1.88 to $2.04 per adjusted diluted share.

In summary we believe WNS has been executing well on our strategic plans and as a result is well positioned for success in the BPM marketplace. We will continue to target industrial leading financial performance and generating increased value for all of our key stakeholders.

I would now like to turn the call over to Sanjay Puria, our CFO to further discuss our results and guidance. Sanaj..

Thank you, Keshav. With respect to our fourth quarter financials, net revenue came in at $154.1 million, up 13.9% from $135.3 million posted in the same quarter of last year, and up 19.1% on a constant currency basis. Organic constant currency revenue grew 13.9% with acquisitions contributing $6.6 million.

Year-over-year, fourth quarter revenue was pressured by a 14% depreciation in the British pound against the US dollar. By vertical, revenue growth was broad based with the healthcare, retail CPG, shipping and logistics, and driver’s verticals each growing more than 10% year-over-year.

With respect to our service offerings, revenue growth versus the prior year was driven by strength in finance and accounting, research and analytics and high end customer interaction services. Sequentially, net revenue increased by 10.2% or 9.9% on a constant currency basis.

Our acquisitions contributed $5.3 million quarter-over-quarter or 3.7% of revenue. Fourth quarter revenues also included approximately $4 million of one-time revenues related to project extensions, gain sharing and client transition work. We do not expect this amount to continue in the first quarter of fiscal 2018.

Adjusted operating margin in quarter 4 was 18.1% as compared to 22% reported in the same quarter of fiscal 2016 and 21.3% last quarter. On a year-over-year basis, adjusted operating margin decreased due to acquisition cost of approximately $2 million. The impact of our annual wage increases and currency movements net of hedging.

This headwinds were partially offset by operating average or higher volumes. Sequentially, adjusted operating margins reduced as a result of acquisition costs, hiring in advance of large deal ramps and currency net of hedging. This margin pressures were partially offset by operating leverage on higher volumes.

The company's other income was $1.6 million in the fourth quarter, down from $2.6 million reported in quarter four of fiscal 2016, and $2.2 million last quarter.

The finances [ph] into other income, both over year-over-year and quarter-over- quarter reflects $0.4 million of interest expense on debt associated with our acquisitions and a lower effective interest rate on our investments. WNS’s effective tax rate in the fourth quarter was 18.9% down from 27.9% last year and 21.4% in the previous quarter.

Quarter four taxes included a one-time benefit of approximately $1.5 million resulting from the reversal of a 2011 tax reserve which was no longer required. Other changes in the tax rate are primarily due to the mix of profits between geographies, including lower US profits, resulting from one- time expenses associated with our acquisitions.

The company’s adjusted net income for quarter four was $24 million compared with $33.4 million in the same quarter of fiscal 2016 and $25.2 million last quarter. Adjusted deluded earnings was $0.46 per share in quarter four, versus $0.44 party forces in the fourth quarter of last year and $0.49 last quarter.

In the fourth quarter WNS recorded a non-recurring reduction in GAAP profit of $21.7 million for goodwill impairment related to our auto claims business.

The company believes this impairment charge was necessary, given quarter four developments, including proposed regulatory changes in the UK legal services market which will result in WNS exiting this portion of the business, the impact this change will have on our ability to sell bundled services in the auto claims marketplace and the loss of business due to contract reductions and cancellations in our traditional claim repair business.

The impairment charge has been excluded from our calculation of adjusted operating margin and adjusted net income and it is non-recurring in nature and headwinds associated with the reduced auto claims volumes have been included in our fiscal 2018 guidance.

As of March 31st 2017, WNS balances in cash and investments totalled $182.2 million and the company had $116.7 million of that. WNS generated $30.7 million of cash from operating activities this quarter and free cash flow of $33.3 million after accounting for $7.4 million in capital expenditures.

DSO in the fourth quarter came in at 29 days versus 28 days reported in quarter four of last year and 30 days reported last quarter.

With respect to other key operating metrics, our total headcount at the end of the quarter was 33,968, similar to last year the company had aggressively hired and began training for firm committed client requirements, including last deal ramps in the first half of fiscal 2018.

Our attrition rate in the fourth quarter was 34% as compared to 35% reported in quarter four of last year and 32% in the previous quarter. Global built seat capacity at the end of the fourth quarter was 28,008 and average built seat utilization was 1.20.

We expect the city seat utilization metric will offer fluctuate quarter-to-quarter this is on facility build out requirements and hiring cycles. I would now like to provide you with a brief financial summary for fiscal 2017 before we turn our attention to the coming year.

Net revenue for the year came in at $578.4 million growing 8.9% on a reported basis and 13.8% on a constant currency basis. Excluding the impact of acquisitions, organic constant currency growth was Possum's 14%. Full revenue growth was led by the healthcare retail CPG, shipping and logistics and driver verticals which all grew over 15%.

The company's fiscal 2017 existed operating margins were down 240 basis points to 19.4% driven by the impacts of our annual wage increases, currency movement, net of hedging and cost associated with our acquisitions. This headwind was partially offset by operating leverage on higher volumes and operational productivity.

Our effective tax rate came in at 23.5%, down from 26.8% in fiscal 2017, primarily due to $2.5 million of one-time benefits taken in quarter three and quarter four. Full year adjusted net income increased from $90.9 1 million in fiscal 2016 to $92.2 million in fiscal 2017 and adjusted diluted earnings per share rose from 1.6 9 to 1.74.

WNS generated $92.1 million in cash from operations and $69.3 million in free cash. The company spent $135.6 million on acquisitions, $22.9 million on capital expenditures and repurchased 2.2 million shares of stock at a cost of $64.2 million or 29.10 per share.

We borrowed $118 million this year to help finance our acquisitions and had $116.7 million in debt on March 31. The net result of these moments was that WNS ended fiscal 2017 with a net cash balance of $65.5 million or approximately $1.35 per diluted share.

The company was also pleased with the continued progress in several of our key operating mostly in 2017, including reduced customer concentration levels and an increase of over 7% in constant currency revenue per employee. In our press release issued earlier today, WNS provided our initial guidance for fiscal 2018.

Based on the company’s current visibility levels, we expect net revenue to be in the range of $680 million to $713 million, representing year-over-year revenue growth of 18% to 23%. Revenue guidance assumes an average British pound to US dollar exchange rate of 1.25 for fiscal 2018 as compared to 1.31 last year.

Excluding exchange impact, revenue guidance represents faster currency growth of 19% to 25%. Acquisitions have added $69 million of year-over-year revenue to the guidance or 12% of revenue.

Fiscal 2018 revenue guidance includes a headwind of approximately 8% relating to committed productivity improvements, project run-offs and lower client volumes, including the forecasted reduction for the auto claims business discussed earlier. Similar to prior year, this headwind are queued towards our fiscal first quarter.

We currently have 90% visibility to the midpoint of the revenue range consistent with April guidance in prior years. Adjusted net income is expected to be in the range of $97 million to $105 million based on a 64.5 rupee to US dollar exchange rate for fiscal 2018.

This implies adjusted EPS of $1.88 to $2.04 assuming a diluted share count of approximately 51.5 million shares. With respect to capital expenditures, WNS anticipates our requirements for fiscal 2018 to be in the range of $28 million to $30 million. We’ll now open up the call for question s.

Operator?.

Thank you. [Operator Instructions] Our first question comes from Joseph Foresi with Cantor Fitzgerald. Your question please..

Hi. I was wondering if you delve a little bit deeper into HealthHelp.

Can you give us some broad parameters on the financial impact there and is there any client concentration or client overlap that you could point to?.

Sure. I’ll take that Joe. In terms of the financials, we’ve talked about having a $69 million dollars year-over-year impact as a result of the 3 acquisitions that we've done. We do expect the run rate at HealthHelp to be around $55 million annually. So we had just over $2 million of revenue in the fiscal fourth quarter.

We expect roughly $55 billion for next year. From a margin perspective on HealthHelp we do expect the margins to be slightly below corporate average just because we know we have to make some investments into this business.

The technology needs a bit of a refresh and there are definitely some opportunities on the sales side that we can take advantage of. So we obviously expect it to be accretive to our numbers in fiscal ‘18 and a contributor to what we're seeing in terms of growth on the top line.

But I think what's more important is how it fits within our overall service portfolio, the positioning it gives us within the healthcare vertical. There is virtually no overlap with our existing customer base.

So we do view that as a nice cross-selling opportunity both in terms of our ability to sell HealthHelp capabilities into the WNS client base, as well as the opportunity to sell incremental WNS services into the HealthHelp client base. So it should be a real nice fit for us in fiscal ‘18 and beyond..

Okay. And then my follow up is just on the FX side, what is the impact on the top and bottom line, can you give us a little more granularity there and particularly on the margin front, wondering what the rupee impacts going to be versus hedging for the upcoming year? Thanks..

Are you talking about for fiscal ’18, the currency impact on the marginal line?.

Yes.

Fiscal ’18.top and bottom line?.

Particularly the margins with the rupee move, sure. So right now I'm on the top line, we're looking at about a 2% - to 1.5% to 2% headwind on the revenue line as a result of currency.

We still do have obviously depreciation with the pound at 1.25 which is what's assumed in guidance that we are seeing depreciation versus the 1.31 that we've used this year. On the operating margin side the combination, the net impact of all the currency movements net of hedging is about 120 basis points of headwind year-over-year..

Okay. Thank you..

Thank you. Our next question comes from Ashwin Shirvaikar with Citi. Your question please..

Thanks. Good morning, guys. I guess my question – the first question is, can you provide a bridge between fiscal ’17, ‘18 7 years in terms of sort of a specific acquisition contribution FX, I wasn't clear about the piece you're walking away from in the UK.

And in regards to the organic part of the I mean - how much of that is ramping new work recently signed times, was this – has anything changed positively with regard to legacy clients stepping up the level of outsourcing to you, because it seemed to be a much stronger level of growth than one might normally expect?.

Sure. Let me let me take a crack at that. Ashwin, a lot of things embedded in there. You know, I think as we spoke about when you look at the growth that we're expecting in fiscal 2018 there were some moving parts.

Obviously we do have some healthy organic growth and at the midpoint of guidance right now we're at 10% organic constant currency growth and I think the mix between expansion of existing customers and the addition of new customers is similar to what we've seen in the past, but I don’t see that trend changing if you will.

Acquisitions are going to contribute about $69 million on a year-over-year basis, so roughly 12% of the top line growth is going to come from acquisitions. As I mentioned, we do have a currency headwind which is going to negatively affect the revenue line by roughly $6 million to $7 million on a year-over-year basis.

And you know I think the balance, we haven't called out specifically the headwind, but we do know that we had roughly an 8% headwind in total for the year as Sanjay mentioned in his prepared remarks, 5% is kind of our normal recurring headwind that we typically see for productivity improvements, volume reductions, changes in client behaviour things like that.

But on top of that normal 5% percent. Today we've got visibility to an incremental 3% headwind on a year-over-year basis, related to items like auto claims, some ramp down of a few accounts that extended into Q4 and some additional volume pressures with a few large clients.

So just kind of a mixed bag, but overall I think you know, the 10% organic constant currency growth that we have 90% visibility today to actually include this incremental headwind of 3%. So we feel really good about where we are, where the momentum and the trajectory in the business is.

And you know hope that if things line up here we're positioned to meet and beat our numbers throughout the year as we did in fiscal ‘17.

Got it. And then Keshav, I appreciate the comment that you're not seeing any impact from Brexit or US policy changes, that's what he says. But are you proactively taking any steps in either country.

You know, just kind of anticipating what might happen, business changes things like that?.

Yes. I think that’s a interesting question, Ashwin.

So from our perspective you know, obviously our clients and our prospects are probably reading the same news that you know all of us are also seeing in each of the other countries and therefore are also wary about you know what could be potential changes that could impact their decision making longer term.

Having said that, in what we could do as a company is really focus our energies with our clients, as well as our prospects in terms of pushing them towards taking the right decisions around the significant change that they have to face in terms of business models, in terms of technology, in terms of being relevant to the end customers.

And you know, I think, we’ve don't great job I would say of really enabling our clients and prospects to remain focused on the business issues that had, as a result of which we feel so confident about, you know, we are so confident about our bolt-on pipeline, as well as the growth trajectory from here.

In terms of specific actions in specific countries you know, wherever it is required we are taking the necessary steps in terms of making the investments and building the comfort and the confidence with that client, which is I think the right thing for us to do at this stage..

So that would include things like you know, building local canters and stuff like that?.

Oh yes. Absolutely.

So at this point in time we'll just remind you that you know, we know operate out of 12 countries on about 47 deliver centres across the globe So we are doing whatever is right to run our business and to be very relevant to our clients across geographic footprint, as well our offering programs, as well as our technology kind of affiliated program.

So it's business as usual and we are stepping up investments in each one of these areas..

And I think just to add to that Ashwin.

I think you know, when you look at the business and how it's evolved from a customer perspective, as well as from an execution perspective you know, for us I think the one thing we can do in light of all of the global economic uncertainty that's going on and political uncertainty that's going on is to make sure that we continue to diversify our business and I think what you'll see is that both from a customer perspective, as well as from a deliberate perspective we've done a pretty good job of doing that over the last four to five years.

So I would hope and expect to see that continue going forward..

Got it. Thank you, guys. Congratulations..

Thank you..

Thank you. Our next question comes from Frank Atkins with SunTrust Robinson.

Your question please?.

Thanks. Following up on the last question a little bit, there is a increase headcount in the US and UK.

Just want to know how much of that is related to acquisitions and how much of that is kind of client demand or shifting mix of services? And then more broadly any comments on the talent environment and your ability to hire given what’s going on in the US, as well as changes in the way you jump pricing?.

So you know, from a headcount perspective the increase in the US is primarily related to the acquisitions what we have and even UK its due to the new relationship what we have started in UK and as Keshav alluded you know, we are having 47 delivery canters and its expanding globally, so that’s you know, that’s newly started expansion what we have in UK for that.

So this is the prime advantages, there is nothing from a big mix or something change, it is as what we have seen in the past. We are expanding in the location where the demand is and where the business is coming from the plan..

But at the same time let me add on to that, in terms of your other part of the question, which was around hiring and talent and skills and things like that. And I must say that’s a first and foremost you know from an overall demand environment I think we are extremely comfortable with how the demand is panning out for WNS.

So very healthy pipeline, very strong traction in terms of existing clients and as well as prospects. And I think that confidence in that message is available to our sales people, to our operational folks and it is also being reflected in the discussion we're having with the talent in the market as well.

Now having said that, one of the things that we have been very, very focussed on is to lead the industry in terms of some of the new programs that we have spoken about over the years.

And as we look at changing our business profile, as well as leading our customers in terms of certain areas, we have invested significantly in the area of business analytics with our MBA business analytics program that we spoke about earlier and I covered again in my prepared remarks, as well as certain specific kind of courses that we have co-creating with some of the – with other university in the area of design thinking.

We believe that these kinds of investments are called for. These are required in order to train not only you know to bring an employee, I mean, a customer very talented, but also to retrain and re-skill the talent that we have within the company as well. So from a overall perspective really comfortable with the talent pipeline.

Our skilling program, our learning and development program, and I would say WNS really is a talent magnet at this point in time. And you know, we have no issues in terms of hiring the best talent into this company..

And just to give you a little more colour Frank on your question about the numbers, you know, we hired roughly - we added I should say roughly 1800 people in the fourth quarter, approximately 700 of those resources came via the acquisitions of HealthHelp and Denali. The balance represents our visibility to growth in the first half of the year.

So this is not that we're hiring people and hoping that we can go sell these resources. This is a similar pattern to what we saw in the third in the fourth quarter of last fiscal year where we’re hiring at the end of the year for firm demand in large ramps that we see occurring in the first half of fiscal 2018.

So obviously that’s part of the reason that we have good visibility to healthy growth as we enter the year..

Okay. That's fantastic. Appreciate the colour there. And for my follow up, I wanted to ask a little bit about the goodwill impairment.

Can you give us a little bit more specific around the regulatory change, the areas that you're exiting? And as we modelled going forward, should that have an impact on the amount of repair repayments?.

Okay.

So as in my prepared remarks I said, the regulatory changes what has happened on the personal injury claim side, and as the small cap limit on the re-flash, as well as an non-re-flash, you know, amount from you know 1000 to 5000 pounds that's a range and due to that we believe that it's going to impact the transmission volume, as well as outcome fees, related to the legal services where we have invested a couple of – we started investment last 18 months into this business and we were seeing good traction.

But due to this proposed regulatory changes, we believe it's going to impact the business. And it's going to force us to exit the bigger services part of it.

Having said that, as always the legal services it was a bundled – the service what we are giving for the auto insurance part, so it may have some impact on some of the volumes going forward based on that.

And accordingly as I’ve said, it's going to be a 1% headwind on the auto claims business in fiscal 2018 which we have already baked into the guidance..

And I just also want to mention that this impairment start that we took actually related to some acquisitions that were done between 2002 and 200 8. And therefore you know from our perspective you know we'll keep our options open as far as the business was concerned. But this is caused essentially by some other factors that Sanjay spoke about..

And you know just to add, I know there was another development during quarter four, along with the proposed regulatory changes for some of those contract termination, as well as a contract reduction, which – due to which we will have also the headwind going forward into fiscal 2018..

So then the net all of that Frank is that you know, not only is the growth opportunity in the legal services business impaired, but as we look forward we've got because of an inability to sell bundled services that will affect our claims volumes, as well as some of the contractual issues that Sanjay mentioned.

So at this point in time, we've actually baked in a roughly 30% drop in our in our auto claims business on a year- over-year basis and that's included in the guidance..

Thank you. .

Thank you. Our next question comes from Anil Doradla with William Blair.

Your question please?.

Hey, guys. Thanks for taking my question. So starting with the big picture question Keshav, over the last almost year, year and half you know, you've had a series of acquisitions healthcare, some of the analytics and so forth.

So stepping back can you share with us you know what is the big strategy here, it sounds like it’s something you've been active on. You talked about being active on the M&A front, but is this more claim driven requirement acquisitions or it's part of the kind of you know, weaving in a bigger theme here.

So how are you looking at this whole strategy right now? And I have a follow up..

Well, that's an excellent question, Anil. So you know, start by saying that you know, the acquisition strategy, as well as the entire acquisition strategy at WNS comes from the excitement that we have around the trends in the marketplace.

The inflection point that we saw in the past maybe 18 months or so and the potential for us to accelerate both revenues, as well as profitability from a long term point of view and lead the industry.

And let me start by saying that for a while now I've been saying that your clients as they have matured in terms of the business cycle have now emerged as having three soft clients inside each client environment.

You know the traditional client that looked at the old model, the client that has had certain processes you know, serviced by WNS for the past few years or looking to go into a new model based on outcome based pricing or is more pricing, on output based pricing or whatever.

And at the same time also trying to drive a digital strategy to become even more impactful in terms of the end customer.

So traditional, transitional, transformational on all three clients now baked into one client and it therefore you know, you could actually look at this as something that can scare you or you can look at it as something that is big opportunity.

We have seen this as a big opportunity, based essentially on the fact that we are a company that goes to the market around domain specialist, that we understand the business domain, we understand the changes that are taking place in the business domains.

We understand the impact of disruption and disruptive trends that we are seeing in you know business environments and each of those areas we believe are actually posing new opportunities for us, whether it be the Internet of everything, whether it is another whole area of personalization, whether it is automation and everything, whether it is the ability to provide asset light models from a client to an end customer, whether it is all the changes that you’re seeing around remote medicine, tele medicine and the healthcare.

All of this really is an opportunity for us and from our perspective therefore we have said we must understand that this disruption has to be seen as part of our business model. We had to take these models into our model. We have to understand, appreciate the technology that qualify. We have to build IP within the company.

We have to align with the right technology provider and that's where we have created assets like you know WNS track and others. As a result of which in some of the wins that we have announced recently, we are actually leading with technology.

now along with this, we also found that there were certain gaps in our portfolio in terms of offerings and all we have done is plugged those gaps through these acquisitions. So you know clearly every one of these acquisitions has been very carefully thought through.

They fill a particular gap that we may have had in specific areas that we've spoken about and one the exciting is all of it has come together you know quite well and the timing is right, while many others are struggling with you know what's happening in the market around demand, around disruption.

From our perspective our clients actually are responding very favourable to our investment, very favourably to our investment program and the fact that we are probably the only company that understands that business domains [indiscernible].

So from our perspective we believe that this is something that we will continue to do, be very opportunistic in terms of M&A any tuck-in kind of acquisitions, and you know grow faster than the market..

And when I look at the $69 million through acquisition revenues in fiscal ’18, and I look at the attributes in terms of growth, organically you're talking about a 10% growth.

Should we be expecting these acquisitions to be outpacing over the next three, four years, then the core business?.

Yeah, I think when you look at the positioning of these assets and the track record of growth in most of these businesses and most importantly the opportunity for cross-sell, I think it's definitely safe to assume that these businesses should be growing faster than the corporate average over the next two to three years..

Great. And if you don't mind me squeezing one Sanjay can you clarify, there seem to be a tailwind on FX this quarter, but a headwind for the full year.

And what's the basic reason for that?.

So you know in quarter four as I mentioned there were a couple of items you know including the one time, which as alluded the revenue. So in quarter four we had revenue coming from acquisitions which is Denali and HealthHelp.

We have coming from the new wins, the new logos what we started, as well as some of the one times which impute as gain sharing from the time, the contract extension, as well as some of the accelerated client transition is on the base what we had, which we expect it's not going to be there in 2018..

All right. Thanks a lot of guys..

Thanks, Anil..

Thank you. Our next question comes from Joseph Vafi with Loop Capital.

Your question please?.

Hey guys, good morning. Just another question on acquisitions and modelling guidance. You've obviously done a good job in modelling the core business. This year we've got a lot of acquisition revenue in guidance for the year.

And I was wondering if you think modelling the acquisitions for guidance is more difficult than the core business or did you have to be a little more conservative with the guidance on these new assets versus the core business?.

Let me take that Joe. I think you know when we look at these businesses again, the nice thing about them is and then part of the reason that we've acquired them is from an operating model perspective they look and behave and act like our businesses. So most of these companies have recurring revenue streams.

We certainly believe we have a very good feel for what the run rate is in the business. You know there is a heavy project component to it. So we're not either counting on that falling off or expecting it to ramp up. You know the real question is, is how successful can the combination of these two companies be in accelerating it.

And certainly what we've seen with Denali for example in just a few months is that there was some very, very significant low hanging fruit in terms of the ability to sell - to nullify and procurement services into our customer base and our ability to sell everything else that WNS does into what was essentially a high end procurement only relationship.

So you know, clearly that type of a business has some very easy lines of sight to and to opportunities in growth.

HealthHelp a little bit of different animal in terms of the acquisition opportunities looking forward because the businesses that when a physician does differently in a vertical and I think the sales cycles and the cross-sell opportunities within our HealthHelp will be a little bit longer than they were for example with an asset like Denali..

Okay. That's helpful. And then just curious on growth, I think it was – I think Keshav said 6% sequential in the quarter, and then obviously 10% for the year.

It would be interesting to get your perspective on the growth - the growth is where the growth is coming from in terms of classifying the volumes kind of new or kind of maybe Internet centric or online businesses looking that are more or less growth companies versus your growth coming from perhaps kind of old school brick and mortar that are really more in cost cutting mode than the growth mode themselves?.

Yeah. Great question Joe. And I think it's extremely safe to say that our internet based businesses, our digital based businesses if you will are growing much faster on a percentage basis than the rest of our business in the traditional brick and mortar business in terms of their outsourcing spend.

However I will also put the caveat on that, that the base that they're growing off of is also much smaller. So you know we think it's a huge opportunity. We see some good traction. We expect it to be a contributor in fiscal ‘18 and beyond. And we've seen some real good traction with some great brand name logos in the digital Internet based world.

But you know again I think the growth rate should be extremely healthy, should be well above corporate average, but off to the much smaller base..

Thanks so much..

Thank you..

Thank you. Our next question comes from Bryan Bergin with Cowen. Your question please..

Hi, guys. Can you talk about the sequential change in scale composition of the pipeline? Any specific services you're seeing increased appetite versus others.

And then how clients are approaching bundled services?.

Yeah, let me take that. In terms of the overall pipeline, I will say that it's very strong.

So we are actually seeing strong demand across verticals, across geographies and across all our key operate areas and what is also interesting is as we have been investing very strongly on the technology front, a number of deals that we are working on and which we have won recently have been led by technology you know, you're not going to platform on deals, where we are to the IP, gone in and then driven process kind of services around that.

What’s also very interesting is more and more clients are looking at, you know, looking at us because of our superior understanding of that domain, but also the fact that you know, on our appreciation of technology and the ability to bundle analytics with it is very, very strong.

So let me tell you that at this point in time we believe that, that many of our clients, whether they are new prospects or our existing plans as well, these are now become stable – table stakes.

So while with our existing client in many areas we are still working on some of the old traditional kind of processes and models, many of them are also shifting into completely new areas as WNS has made these investments in these areas.

And therefore from an overall perspective we believe the pipeline is very robust and the potential for us to grow continues to be very high..

Okay. Thanks. And then on capital allocation priority than 89, any changes there. Can you kind of give us puts and takes around continued M&A versus repo versus debt payment.

Just trying to understand the levers you may have on that EPS range?.

Sure. Let me take that. So I think as everyone knows, we have an outstanding share repurchase program where we have 3.3 million shares authorized. We've used 2.2 million shares. We bought 2.2 million shares against that debt outstanding offering. And you know as a result we've got about a million one left to buy that we are allowed to buy.

We certainly are going to watch what happens with the stock and with the cash, what the alternate opportunities for us. But you know we continue to see share repurchases as one of the important tools in our toolkit for capital allocation.

We are going to continue to be opportunistic on the tuck-in M&A side, you know, continue to build the pipeline, continue to look for assets that are a good fit for us, while balancing obviously what our cash needs are, what our cash requirements are.

Our ability to successfully integrate multiple acquisitions at the same time and making sure that we're still finding the right assets at the right price. We went several years without doing anything. Now we've done three in one year.

But I think it's more about getting the right assets at the right time at the right price then you know, formally saying we're going to buy one or two assets and we're going to add 5% or 10% to revenue, that's not what we're looking for. We're looking for the right assets that fit with what we're trying to do within the business.

So from an overall capital allocation perspective, I think we just need to make sure we continue to move forward with a balanced approach looking at you know putting our capital to work through a combination of tuck-in acquisitions and share repurchases..

Thank you..

Thanks, Bryan..

Thank you. Our next question comes from Ed Caso with Wells Fargo.

Your question please?.

Hi, good morning, good evening. I'm curious about the movement toward automation and how that has changed the conversation with the client. A little bit around the – is there a movement away from starting relationships on an FDA - FDE basis.

I mean, do you think over that step and moving more towards a sort of a managed or fixed price relationship sooner on? Thanks..

Again, great question. I must mention that no, with new clients the conversation is still around, can you do all these things for me. So it's a question of just their getting comfort that we understand the business domain.

We understand technology well, that we are willing to service them in models that resonate with them for the long-term, that we can embed analytics, we can help them with their big day and the data kind of issues, and we can also help them in terms of providing corporate decision support.

But when they actually start working they want to still start with the, you know, with the traditional kind of model. But because of the intensity with which we have kept investing in the technology side, and creating our own IP or creating these partnerships, I think the trust factor with these people is increasing significantly.

So where in the past somebody would have said you know maybe this other strategic partner is better for me than WNS because of the technology, because of technology, that is not you know - we are seeing less of that at this point in time is all I want to say.

We're actually seen as a full service kin d of player and all of the strategic messages are resonating well from our perspective. But that shouldn’t take away from the fact that when client start they start with the you know, FT basis..

So maybe extending on to that. Are you suggesting that the sort of the IP, plus BPO model you know sort of how I run your software therefore let me run your process.

Is that gaining traction or not gaining traction? Maybe said more simply are you losing business to the big Indian IT players?.

No, actually it's just a converse.

I think there is a much greater belief in our customers that around people like us who understand their business well, who understand the business process, as well as business innovation well and are able to work with multiple technology platforms that they may have and consolidate it with connectors that we may have created ourselves in order to give them better impact in terms of the overall ROI for their investment.

You know, I must again clarify, clients are extremely discerning, where there was confusion in the past around the IT, the Integrated IT kind of players factored on something in BPO and the BPM players, they are getting more and more convinced that people like us who understand BPM and who are not on the application development and maintenance areas, but who are using technology to give them better ROI, are much, much more trustworthy and you know, based on assets like WNS Track and some of the other things we spoke about, the belief is much, much stronger and therefore I must say, in many deals we are leading with technology IP that we have created.

But the reason they do business with us is because they understand that we know business domain very well. We can integrate analytics into it, and we are providing the technology solution which gives them very quick returns on investment..

Okay. Thank you..

Thanks, Ed..

Thank you. Our next question comes from Mayank Tandon with Needham & Company.

Your question please?.

Great. Thank you. Good morning. Most of my questions have been answered, but I just for either Keshav or Dave.

I wanted to get your thoughts in terms of as you look at the guidance range for the year what are the various puts and takes that would get you to the high end versus coming in at the lower end of that range?.

So let me – maybe let me let me start by saying that you know, at this point in time the guidance range - range that we given which is consistent with our philosophy that we give each year. And from that point of view you know, we don’t want to make any change there. And that was the same basis on which we gave guidance for last year.

But as the year progressed, you know, we probably did much better than what was stated in the initial guidance. Having said that, I must give you a sense about the fact that our pipeline going into this year is very strong.

And as I said earlier again it is across industries, it is across verticals, it is across geographies, and because of the impact of some of the new acquisitions offerings that we have now been to the table is actually getting stronger.

So going into the year, we are extremely comfortable, first and foremost with the guidance range, but also the fact that you know if we execute well and if decisions get taken all the time, some of which didn't see last year, there were in some – we kept saying last year or so you know, while we were confident, some of the decisions actually got pushed towards the end of the year.

So the ability to recover revenue during last year was minimal, but which will now flow into this year. I think as long as we don’t see those kind of surprises, the potential for us to go you know to grow beyond that midpoint and towards the higher point of the guidance range is high. And that's the confidence with which we go into the year..

I think just real Mayank, the flip side to that is, when you look at the range and you look at 90% visibility to the midpoint for us to stand up at the low end of the range, something would have to go wrong..

Right. That's helpful colour. And then just a quick follow up.

In terms of the quarterly trajectory should we expect the usual seasonality in terms of you know a softer 1Q and then the revenue and margin profile builds up over the course of the year?.

Yes. I think its right to expect that you know the seasonality within the quarters because usually like in quarter one we'll have the wage increases. The bulk of wage increase happens in quarter one. So that's where the operating margin have a pressure you know, some seasonality in quarter three from travel vertical, year-over-year we are seeing.

So it’s nice to assume, those similar pattern of seasonality as we walk in FY ’18..

Right. So I think Mayank, I think to keep in mind is, you know, we certainly should have a little bit of a lift from having a four quarters worth of the acquisitions on board. The flip side to that is we had roughly $4 million of one timers in fourth quarter which are non-recurring.

We have a little bit of a headwind from the auto claims business, as that ramps down and then we do have the annual seasonality in our business which is the productivity improvements that we get to our larger clients that are front end loaded to our business. So you know we do expect the business to grow.

We’ll probably be growing at less than what we expect the business to grow. It's kind of a normal straight line basis as Sanjay mentioned a little bit soft in Q1, little bit soft in Q3 because of the travel seasonality, but other than that good trajectory throughout the year..

Great. Great. Thank you so much..

Thanks, Mayank..

Our next question comes from Brian Kinstlinger of Maxim Group.

Your question please?.

Great, thanks. You know, Dave with all those moving parts, in the non-recurring, the acquisitions currency repairman reductions in volumes and with the high visibility you have maybe is reasonable in the first quarter to give kind of a range of what you're thinking because there are so many moving parts.

I know it's not typical of management to do that, but maybe in this case it's appropriate?.

You know, we're not going to deviate from our standard approach Brian. You know, we don't want people focussed on quarter-to-quarter. We want people looking at the long-term opportunities in our business.

I think you know what we're happy to discuss some of the things that affect us on a quarter-over-quarter basis and in some of the moving parts and we've tried to call out, specifically those that are non-recurring like $4 million in revenue and $2 million in acquisition costs.

But you know in terms of formal guidance for first quarter or even range for first quarter we're not going to do that at this point in time..

Okay. Lastly you sufficiently covered efficiencies for existing customers. Can you talk about the pricing environment for new customers are rate relatively the same for first and second time projects or are they higher or lower than you've seen.

You know maybe in the past?.

Look there is moment, it has been quite stable, and I think from our perspective because of the fact that we’re embedding so much of technology analytics and [indiscernible] models, our ability to both leverage those pricing kind of models to deliver the kind of margin that we expect is also strong.

So overall I would say that moving on from the traditional build rate to kind of model to much more TCO kind of model, customers appreciate it, understand it and are focussed with us on totally an ROI kind of approach which works well for both sides..

Okay. Thank you..

Thanks, Brian..

Thank you. Our next question comes from Vincent Colicchio with Barrington Research. Your question please..

Yeah, just one for me Keshav, in process automation clearly you know, for your comments you're doing well and you're not seeing a lot of inroads from IT players.

I am just curious are you seeing any start ups or any sort of other form of new competition that may become a factor down the road at any of your domains?.

Yes. So, I think you know that’s an interesting question. You know, I think there were - there are always you know, point solution kind of players that come in with specific offerings which are attractive to our clients. If our clients want just that and not the rest of the experience that a company like WNS gives them.

So yes, there will be you know some players and some people would gravitate toward them. We haven't seen you know too much of that.

From our perspective, I think the correct lines we’ve been attracting with our clients who are really looking at bringing in a long-term strategic partner to help them really handle all the kind of disruption they are seeing in terms of their business models for the long-term. So that's one aspect I want to talk about.

The second thing I want to mention is that, if you just look at the demand trends of our business and the pipeline and if you just look at the kind of clients that even we are bringing you into this business model, I actually think that you know the demand trends still are very nascent, those market is still very underpenetrated.

I think there is enough business for you know for many more players if you ask me at this point time, provided you have a very strong kind of value proposition and you're really adding value to your customer.

So from our perspective you know, while we partner with a number of these kind of start-ups to give them a bigger kind of platform, we also believe that there's enough business for us to keep getting out there without being disturbed by any impact that we may see from one or two of these players..

Thank you. That was helpful. That's it for me. Good quarter, guys..

Thanks a lot..

Thank you. Our next question comes from Puneet Jain with JPMorgan. Your question please..

Yeah, hi. Great quarter, guys. So Keshav your comments on no impacting client decision is very different from what [indiscernible] have been saying, would you say that difference stems from nature of BPO services that breaking in nature and has no visa exposure.

What are the blueness specific drivers given you have been investing in the business for a while?.

Yeah, I think you know you more or less answered one of the other questions about the difference between IT services and business process management you know, these are two - l think the realization with client that these are two completely different businesses is out there in out years.

I've been talking about it for a while, but the buyers are completely different, the value proposition is completely different, the sales cycles are completely different, definition of large deals for BPM with the 10 million and for IT at 100 million is completely different and the risk profile for a procurement manager to want to bundle everything with one player, you know, is also not there.

So from our perspective really, I think it is a case of how we go to the market, position our value proposition, showcase to a client that in this era of tremendous disruption how we can make their costs completely very acceptable and the potential for upside actual, right.

I think there is a lot of the IT centres, there is players they just still all about you know, can you give me part of your budget, and frankly speaking there is no one out there who has a budget anymore. Everyone out there from a business point of view has to only deliver business outcomes in an era of disruption, automation, robotics and big data.

So I think the kind of conversation is completely different in terms of what I think the well investing BPM companies are having and I am proud to say that in that perspective, I think WNS is right on top in terms of the quality of conversations that we are having with our clients..

I appreciate it. And one last one from me. More like a follow up on auto claims.

Why not explore strategic options for that business given that it's not part of its core services, does not grow and is not profitably there?.

No, that's excellent suggestion. We very frankly speaking of being responsible kind of corporate. We will keep all our options open..

Thank you. .

Thanks, Puneet..

Thanks Tony. At this time, we have no further questions in queue. This will conclude today's conference call. Thank you for your participation. You may now disconnect. Have a wonderful day..