WNS (Holdings) Ltd

NYSE:WNS

Earnings Call Transcript 2023-Q4

[Operator]

Good morning, and welcome to the WNS Holdings Fiscal 2023 Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. And now I'd like to turn the call over to David Mackey, WNS' Executive Vice President of Finance and Head of Investor Relations. David?

[David Mackey, executive]

Thank you, and welcome to our Fiscal 2023 4th Quarter and Full Year Earnings Call. With me today on the call, I have WNS' CEO, Keshav Murugesh; and WNS' CFO, Sanjay Puria. A press release detailing our 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, 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 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 provide useful information for investors. Reconciliations of these non-GAAP financial measures and 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 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.

I would now like to turn the call over to WNS's CEO, Keshav Murugesh. Keshav?

[Keshav Murugesh, executive]

Thank you, David, and good morning, everyone. Despite the challenging macro environment, WNS continues to perform well. Our fourth quarter financial results demonstrate the health of the BPM space, the strength and resiliency of WNS' business model and the company's ability to execute.

Net revenue for Q4 came in at $305 million, representing a year-over-year increase of 10.9% on a reported basis and 15.6% constant currency. Sequentially, net revenue increased by 4.1% on a reported basis and 2.5% on a constant currency basis after adjusting for foreign exchange. Our acquisitions added approximately 6% to year-over-year growth and 2% sequentially.

In the fourth quarter, WNS added 11 new logos and expanded 30 existing relationships. Sanjay will provide further details on our fourth quarter financial performance in his prepared remarks. For the 2023 fiscal full year, WNS delivered solid growth in revenue and earnings while continuing to invest for the future.

Top line expanded 18.8% on a constant currency basis, driven by broad-based strength across verticals, geographies and service offerings as well as our 3 tuck-in acquisitions. Despite the weak macro, it is clear our clients understand that leveraging digital technologies and advanced analytics across processes are not optional, but in fact, represent necessary business changes required to compete. WNS' ability to deliver these benefits while generating clear, immediate and significant savings means that the majority of our services are not subject to budgetary pressures or investment prioritization.

As a result, process outsourcing decisions have become strategic in nature, and are based on the client's evaluation of which activities are best transformed and managed by a client partner and which are best kept in-house. In addition to solid top line performance in fiscal '23, WNS once again posted industry-leading margins and delivered growth in earnings per share of 13%.

During the year, the company also continued to invest both organically as well as inorganically to ensure our ability to meet the evolving needs of our global clients. M&A remains an integral part of our investment plans and a key component of our balanced, disciplined, capital allocation program. WNS' approach and philosophy towards M&A is unchanged and is focused on adding niche tuck-in capabilities, which enable competitive differentiation, including domain expertise, data and analytics, and digital technologies.

Our targeted assets should help expand end-to-end capabilities across front, middle and back office and create client solutions which span, design, build and run. From a financial perspective, we expect acquisitions to accelerate our long-term growth rate, have a margin profile at or above company average and carry a reasonable industry valuation. In fiscal 2023, WNS completed 3 acquisitions, which we believe need these key M&A criteria and integration of these assets is going well.

In addition to M&A, share buybacks are also an important element of our capital allocation program. During fiscal '23, WNS purchased or repurchased 1.1 million shares of stock and since the inception of our buyback program 8 years ago, the company has now repurchased 9.9 million shares at an average share price of $50.47. Based on our 31st March share price, this equates to a total return of 85% and an IRR of more than 15%.

I would also like to provide you with a quick update on our ESG efforts over the past year. In fiscal '23, WNS made significant progress on our diversity, equity and inclusiveness initiatives, environmental commitments, corporate social responsibility impacts as well as training and human capital management programs. Our highlights include improved Board diversity, our commitment to the science-based targets initiative and a net zero objective financial aid to earthquake between in Turkey and Syria.

The launch of affordable internal tracking and reporting system for ESG and significant expansion of our training, reskilling and employee care initiatives.

The company also received numerous awards and recognitions for our ESG programs including the Golden Peacock Award for our WNS Care's corporate social responsibility impacts, inclusion in the 2022 Bloomberg Gender Equality Index and being named to the Forbes 2022 list of the world's best employers. Back in February, we announced upcoming changes to WNS' organizational structure. The company has now moved to a strategic business unit, or SBU structure, which combines the company's existing and verticals into 4 logical groups, each headed by our Chief Business Officer.

The Chief Business Officers will report directly into me and will be based around the globe, including the U.S., U.K. as well as India. The 88 verticals will remain stand-alone independent business units each with a dedicated vertical leader in order to protect our differentiated domain-centric approach to BPM. We believe the new organizational structure is vital at this stage of our evolution and will help facilitate next level growth by enabling the company to better drive business synergies, enhance scalability, generate operating leverage as well as create organizational depth.

Turning our attention to the fiscal 2024 outlook. Despite the weak global macro. WNS enters the year with a broad-based demand for our offerings and expanding new business pipeline and strong revenue momentum. In addition, at present, our client volumes remained stable including the travel vertical.

The company begins fiscal 2024 with 88% visibility to the midpoint of guidance which represents constant currency net revenue growth of 13%. We also expect our margins to be stable and healthy for the upcoming year despite ongoing investments in our business, the continued shift to work from office and normal annual wage pressure. Margin expansion opportunities going forward will largely be a function of industry evolution as clients increase adoption of higher value and end-to-end solutions and migrate engagements towards more non-FTE pricing models.

In summary, I believe the company has strong business momentum, is executing at a high level and is extremely well-positioned in a healthy BPM environment. We remain focused on operating at the intersection of domain, technology and talent to help our clients to transform their business models, manage their rapidly evolving requirements and create competitive advantage. This will enable WNS to drive long-term sustainable business value for all of our key stakeholders.

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

[Sanjay Puria, executive]

Thank you, Keshav. In the fiscal fourth quarter, WNS net revenue came in at $305 million up 10.9% from $275 million posted in the same quarter of last year and up 15.6% on a constant currency basis. Sequentially, Net revenue increased by 4.1% on a reported basis and 2.5% on a constant currency basis.

Acquisitions contributed approximately 6% to year-over-year revenue growth and 2% quarter-over-quarter. Our sequential revenue growth was driven by broad-based momentum with both new and existing clients. The full quarter impact of our OptiBuy and The Smart Cube acquisitions and favorable currency movements. These benefits were partially offset by the ramp-down of a large Health care process, first highlighted on our July earnings call.

In the fourth quarter, WNS recorded $1.6 million of short-term revenue. Adjusted operating margin in Quarter 4 was 20.6% and as compared to 21.5% reported in the same quarter of fiscal 2022 and 21.9% last quarter. Year-over-year, adjusted operating margin decreased as a result of annual wage increases, higher costs associated with our return to office and the impact of unfavorable currency movements on our monetary assets and liabilities.

These headwinds more than offset operating leverage on higher volumes, improved productivity and favorable currency movements on operating costs. Sequentially, margin decreased as a result of higher wages, increased return to office costs, currency impacts on our monetary assets and liabilities, performance bonuses and advanced hiring for project ramps. These headwinds were partially offset by higher volumes and favorable currency movements on revenue during the quarter.

The company's net other income of big expense was $0.4 million of net expense in the fourth quarter as compared to $0.9 million of net income reported in Quarter 4 of fiscal 2022 and $1.2 million of net expense last quarter. Year-over-year benefits from higher interest rates and interest income on tax refunds were more than offset by lower cash balances resulting from share repurchases and acquisitions, and increased interest expense from long-term debt and operating leases.

Sequentially, the favorable variance was the result of nonrecurring interest income stemming from tax refunds and increase in our average cash balances and higher interest rates. These benefits were partially offset by higher interest expense driven by operating leases and a full quarter of long-term debt. WNS' effective tax rate for Quarter 4 came in at 15.8%, down from 19.7% last year and 19.8% last quarter. Both year-over-year and sequentially, changes our tax -- effective tax rate are largely the result of shifts in our geographical profit mix, changes to the mix of work delivered from tax incentive facilities and a onetime tax accounting benefit of $1.7 million.

The company's adjusted net income for Quarter 4 was $52.4 million compared with $48.3 million in the same quarter of fiscal 2022 and $50.6 million last quarter. Adjusted diluted earnings were $1.04 per share in Quarter 4 versus $0.95 in the fourth quarter of last year and $1.01 last quarter. As of March 31, 2023, WNS' balances in cash and investments totaled $304.9 million, and the company had $173.4 million in debt.

In the fourth quarter, WNS generated $84.3 million of cash from operating activities incurred $14.7 million in capital expenditures and made scheduled debt repayments of $8 million. DSO in the fourth quarter came in at 32 days as compared to 30 days reported in Quarter 4 of last year and 34 days last quarter. With respect to other key operating metrics, total headcount at the end of the quarter was 59,755, and our attrition rate in the fourth quarter was 40% as compared to 44% reported in Quarter 4 of last year and 28% in the previous quarter.

In the quarter, sequential attrition increased for entry-level voice-based CX services in the Philippines and South Africa driven by our clients' desire for in-office delivery. We expect attrition will normalize over time in the low to mid-30% range but continue to be volatile quarter-to-quarter in the current labor environment. Build seat capacity at the end of the Quarter 4 was 37,222 and WNS continued our progress towards in-person operations averaging 63% work from office during the quarter.

I would now like to provide you with a brief financial summary of fiscal 2023 before discussing our outlook for the coming year. Net revenue in fiscal 2023 came in at $1,162.0 million, up 13.2% on a reported basis and up 18.8% on a constant currency. Our acquisitions of Vuram, OptiBuy and The Smart Cube contributed 3% to the company's growth rate.

Organic revenue growth was broad-based across geographies, services and verticals and driven by strength in both new logo additions and existing client expansions. Top line in fiscal 2023 also benefited from a partial recovery of a prepandamic travel volumes. Revenue growth during the year was partially offset by ramp-downs in the healthcare business and unfavorable currency movements.

The company's fiscal 2023 adjusted operating margin came in at 21%, down 40 basis points from 21.4% reported in fiscal 2022. Margin favorability from operating leverage on higher volumes, improved productivity and currency movements were more than offset by wage increases, return to office cost and the resumption of corporate travel. In fiscal 2023, net other expense was unfavorable by $2.6 million as a result of increased interest expense associated with the new long-term debt positions, higher operating lease costs and lower average cash balances during the year. These headwinds more than offset higher interest rates realized on our cash balances.

The company's effective tax rate for the year was 19.1%, down from 20.7% last year as a result of a change in the mix of profits by geography, the percentage of work delivered from tax incentive facilities and a onetime benefit in Quarter 4 from the creation of a deferred tax asset. Overall, our full year adjusted diluted earnings per share improved 13%, coming in at $3.86. In fiscal 2023, the company generated $205 million in cash from operations, $160 million in free cash.

During the year, WNS spent $312.8 million on acquisitions and captive callouts, repurchased 1.1 million shares of stock at a cost of $81.6 million or $74.21 per share, spent $25 million on capital expenditures and made scheduled debt payments of $8 million. We ended the year with a net cash balance of $131.5 million or approximately $2.60 per diluted share.

In our press release issued earlier today, WNS provided our initial full year guidance for fiscal 2024. Based on the company's current visibility levels, we expect net revenue to be in the range of $1,290 million to $1,348 million, representing year-over-year growth of 11% to 16% on both a reported and constant currency basis. Our acquisitions are expected to contribute 3% inorganic growth in fiscal 2024. And our top line projection assumes an average British pound to U.S. dollar exchange rate of 1.24 for the year.

As our recent acquisitions have added an element of high-growth project-based work to the WNS portfolio and our short-term revenues have fallen to a very low levels, we have modified our approach to visibility accordingly. As a result, WNS enters fiscal 2024 with 88% visibility to the midpoint of the range. Full year adjusted net income for fiscal 2024 is expected to be in the range of $209 million to $221 million based on a INR 82 to US dollar exchange rate. This implies adjusted EPS of $4.12 to $4.36, assuming a diluted share count of approximately 50.7 million shares.

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?

[Operator]

[Operator Instructions] And our first question comes from the line of Mayank Tandon from Needham.

[Mayank Tandon, analyst]

From our side here. I wanted to ask in terms of the guidance, how should the quarter shape up? If you could just talk about the linearity of the quarters, both on the top line and in terms of margins, that would be helpful.

[Sanjay Puria, executive]

Quarter 1 usually, as we know that there is an upfront loaded productivity. Accordingly, at this time, we expect the Quarter 1 to be flat from a revenue perspective. Also, there is the wage inflation, which generally hit from Quarter 1 as well as the productivity, as I mentioned. So margins usually are a couple of percentages down from an operating margin perspective, sequentially as well as the tax rate is -- as we saw in Quarter 4 because of some onetime benefits, it was lower, so the tax rate approximately is going to be somewhere around 22%.

[David Mackey, executive]

Kind of all said and done, Mayank, when you look at the progression throughout the year. Obviously, if you look historically at the seasonality to our business, Q1 is soft on both top line and the bottom line. but the expectation should be as we progress across the quarters that the growth rate should accelerate, margins should expand.

[Mayank Tandon, analyst]

Got it. That's helpful. And then just as a follow-up. I wanted to ask about the deal sizes as you've entered this year. Are you seeing larger deals in terms of scope and size, just given that's such an important initiative for many enterprise clients around transformation? Or are you seeing actually deals maybe break into smaller pieces as clients deal with uncertainty in their own business?

[Keshav Murugesh, executive]

Yes. Mayank, I'll take that question. This is Keshav. So I think the -- the most important point I would like to make here is that with a lot of comfort now being seen around potentially a mild recession, what we are starting to see is not only the transformation agenda continues to be front end sector but clients now moving quickly on the other agenda of agility, and cost savings, and cost leadership and things like that. So a combination of both of these actually will be very positive, we believe, for the sector. And more importantly for WNS, a company that has invested so much not just in domain but also in terms of technology transformation as well as data to insights.

In terms of deal sizes, I must say that I'm not seeing any significant change. I'm continuing to see a lot of focus on clients wanting to progress with larger-sized deals. So we are in a number of these conversations. The pipeline continues to look very, very strong at this point in time. What has also been really good for us is we are seeing decisions coming through faster probably because clients are looking to be ahead of any changes in the macro environment may push towards them.

And the other interesting kind of discussion that we are also seeing is a number of discussions around potential carve-outs. The combination of all of this actually, I think, all goes well for WNS in terms of the immediate future and potentially the long term.

[Mayank Tandon, analyst]

Congrats on the quarter.

[Operator]

And our next question comes from the line of Maggie Nolan from William Blair.

[Margaret Nolan, analyst]

Can you talk a little bit about is there a structural change in the contract types that you're seeing, the pricing methodologies, which is influencing that change into the visibility that you have in the guidance?

[David Mackey, executive]

I'll take that, Maggie. I think the answer -- the short answer to that is no. I mean when you look at structurally, the contract types and you look at the overall mix of our business, we're still running pretty close to that 70-30 mix between FTE and non-FTE. I think the contract mix type that you're seeing that's affected the visibility is more about the acquisitions that we've done, which are really focused on the design build side of our business, right? So implementation, integration, consultative types of efforts that have, as a result of them being shorter duration type of projects, if you will, as opposed to a 5-year contract the shorter duration, but the higher growth profile of this business has reduced the visibility slightly. So I think in terms of the contract types, no major change, but obviously, adding 6% of revenue to the company through the 3 tuck-ins that we've done have changed a little bit of the mix between kind of the 5-year contracts and the 6 months or 1-year contracts.

[Sanjay Puria, executive]

And I'll just add, even from a pricing perspective, we are not seeing any dramatic change because the shift already happened earlier where clients are not focused anymore on the build rates, but they are all focused upon the total cost of the ownership. And that's where the transformation as well as enabling through technology and analytics from a business outcome perspective of stock.

[Margaret Nolan, analyst]

Got it. That's helpful. And then I think you mentioned you characterized it as normal annual wage pressure does that imply levels similar to last year or the new normal? Or has the inflation level come down to kind of more of a historical level? And then can you comment on specific geographies?

[Sanjay Puria, executive]

Yes. From a wage perspective, in fact, the last 2 years, there was a couple of percentage up specifically regarding some of the high skills which we spoke about around technology and digital and those talent, but as we move forward, we believe it's -- we expect it to be normalized, and that's what we have made in our guidance.

[Operator]

And our next question comes from the line of Puneet Jain from JPMorgan.

[Puneet Jain, analyst]

I wanted to ask about like applications of generative AI, Chat GPT and all that new AI technologies in your client processes?

[Keshav Murugesh, executive]

Yes. So Puneet, first of all, thank you for being on this call and for that question. Now actually, we are quite excited about all the discussion that is now started happening on Chat GPT and generative AI and things like that because we actually believe that for a company that is so focused on domain, all of this will continue to be new tools that we will add into our armory as we deliver excellence to our clients.

So first and foremost, I think a lot of this is not really new because if you look at it, NLP and artificial intelligence has been around for quite a while. And I think what is -- what we are seeing is changing really is the size and the complexity of the models around which we can use some of these kind of tools and technology. I would say that as we look at the evolution of some of this, the real benefits will probably be around cost, scale, language, support, the accuracy of data, reduced cycle times, the ability to learn and things like that. And it will also help us in the longer term in terms of pushing our people into higher level kind of work while some of the lower-level work and repeatable tasks will get done by some of these tools.

The important thing that we like to discern here is that this is really a tool for us. And we'll have to wait to see how it evolves, obviously. But we think this is a tool not really a long-term solution that takes care of everything that we provide. So you cannot -- the tool really will always suffer from the lack of critical thinking -- it will not, at this point in time, be able to understand the context, emotion.

It will -- in terms of creativity, there will be limitations, its ability. It will also introduce bias, which in humans do not introduce. And therefore, to that extent, it is a tool. It is not yet a solution. And we actually think that overall, it's a good tool that we will leverage. But at the same time, for companies like us that are so focused on domain as a core differentiator on understanding clients' business so well. Remember, one also cannot really outsource ethics, morality, fairness, things like that, which human beings are very good at. So we're quite excited.

[Puneet Jain, analyst]

That's great. So tool not a solution. I like that characterization. Switching gears, and I'm sorry, like if you've already shared this. Like what does the guidance -- full year guidance imply for operating margins this year? And can you also comment on margin profile of the new acquisitions or new business that's incoming, whether it's like the large client, large account or the new acquisitions?

[Sanjay Puria, executive]

Yes. So Puneet, this is Sanjay here. From a guidance perspective, the operating margin assumed is 21% to 22% range pretty stable, what we have been seeing earlier quarters. as well as some of the acquisitions margin profile, they are better than the company level margin because it's a project-based revenue with a high-growth profile what we have been seeing. At the same time, some of the large client, typically, we know that the whole transition phase, it takes time. It can range from 6 months to 18 months. And accordingly, the margin gradually starts expanding once we are through [indiscernible]. So with the mix of all those elements, we expect operating margin to be at 21% to 22% for the next year.

[David Mackey, executive]

And I think just to add to that, Puneet, Obviously, you talked a little bit about some of the unusual onetime margin pressures that we had in Q4 of this year that drove the fourth quarter operating margin down below kind of what we had expected walking into the quarter and corresponding, we drove the full year operating margin to 21%. Excluding those items, we would have been at 21.5% adjusted operating margin for the quarter which would have been the third consecutive year that we've been at 21.4%, 21.5%. I think when you look at the guidance for fiscal 2024 and Sanjay mentioned the range of 21% to 22%. The midpoint of that guidance is spot in line with where we've been for 3 years.

[Operator]

And our next question comes from the line of Bryan Bergin from Cowen.

[Jared Levine, analyst]

This is actually Jared Levine on for Brian today. In terms of the internal reorganization, can you talk about early performance under this new operating structure in terms of any key learnings or surprises thus far?

[Keshav Murugesh, executive]

Yes, sure. Actually, we are quite excited about the new operating structure and no surprises at all. In fact, we've seen the new leaders go into those roles with a lot of excitement and positivity. We've seen clients respond very well because they're not seeing any difference in terms of operational rigor and impact but they're also seeing a lot more of attention in terms of their core businesses, core focus because the leaders now are very tenured leaders running end-to-end businesses for them. Decision-making is much faster, flexibility much higher. And even within each of those structures, we're seeing a lot of excitement because I think the ability to move with agility is much, much higher. So I think the start has been very positive.

[Jared Levine, analyst]

Okay. Great. And then in terms of travel, what are you seeing in terms of the various travel client subsectors you serve? And are you anticipating any additional improvements in FY '24 here?

[David Mackey, executive]

Yes. Let me take that, Jared. I think we're certainly happy to see that the travel business for us has been stable on the volume side. We continue to progress well with the new logos that we've added and our ability to expand the services that we're providing to our existing customers. If you look at the guidance for fiscal '24, we have not assumed a pickup in travel. So we would still have relative to kind of the pre-pandemic levels in those businesses that were artificially reduced primarily around international travel and around business travel. We still see about 1.5% to 2% revenue recovery opportunity looking forward.

[Operator]

[Operator Instructions] Our next question comes from the line of Vincent Colicchio from Barrington Research.

[Vincent Colicchio, analyst]

Yes. Keshav, if you just -- we just called out the travel will be -- you're assuming flattish this year. I'm wondering if you look at your pipeline, sales pipeline, do any verticals particular standout or is it fairly broad-based in terms of growth aside from travel?

[Keshav Murugesh, executive]

Yes. So Vince, thank you for that question. So first and foremost, I think demand that we are seeing is broad-based across all core verticals, geographies as well as horizontals. And as far as travel is concerned, I'll have Dave give you a little more color so that you appreciate what he said, slightly better.

[David Mackey, executive]

Yes. I think just to clarify a little bit. The expectation and the guidance does not assume a pickup in the volumes of travel that we're pumping through the processes that we already own. It doesn't mean that we don't expect the travel vertical to grow this year but that growth will be driven by the addition of new clients and the expansion of existing relationships as opposed to the recovery of volumes that we had lost. So the assumption on volumes is stable and it's in line with what our clients have projected going forward.

To Keshav's point, again, I think we see the overall composition of the verticals extremely healthy across the board. We're not really seeing any weakness relative to the end market. We do obviously expect to see weakness in our healthcare vertical this quarter this year based on the ramp down of the large healthcare client that we saw in Q4.

[Vincent Colicchio, analyst]

And what are your thoughts on top 5 and top 10 clients in terms of growth opportunities for '24? And are there any large deals that make close of lumpiness in those groupings?

[Sanjay Puria, executive]

Yes, from a top 5 or top 10 client, the growth was, in fact, a little bit lower than the company level growth. And specifically, we mentioned about one of the healthcare -- a large healthcare client process ramp down around that. But as we move forward and we are very excited with the number of additions of the new clients because that has a really good opportunity to really penetrate and radiate and scale from a growth perspective and opportunity for them to be part of the top 10 clients.

[David Mackey, executive]

And just to add for that. I think when you look at our largest customers, I think the vast majority of those top 10 clients have expansion opportunities going forward, the ability to add additional work to make those relationships broader and deeper. But the expectation, when you look at kind of the plan for fiscal '24, would be that the growth in those clients will be at a rate below the company average. So the expectations will continue to grow, and there are opportunities, the concentration levels across the company will continue to reduce.

[Keshav Murugesh, executive]

Yes. I just want to add one element here because while all of this is happening, and we are excited with the fact that we're getting a lot of new clients coming in that we think over a period of time, will enter the top 10 and top 5. What's also exciting for us is the fact that with all the dialogue taking place on recession, mild, deep, whatever, we are also seeing new sets of clients and prospects have very engaging conversations with us.

For example, the PEs who are all preparing for recession, looking for help from WNS in terms of helping them with their cost, their transformation, things like that. Lots of conversations happening in some of those areas. We're looking at new sets of kind of prospects and clients who are looking at this opportunity, not just for us to manage their costs but also to help them with their top line challenges, right? So I think there's a very interesting change taking place in the quality of the business for us, and I think that's -- we are very positive about it.

[Operator]

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