IT Services revenue for the quarter increased 4.1% and 12.9% YoY
Order bookings (Total Contract Value) grew by 23.8% YoY
Large deal bookings grew by 42% YoY in H1’23
IT Services Operating Margins at 15.1%
Free cash flow to Net Income at 166% for the quarter
NEW YORK | BANGALORE, India – Oct. 12, 2022: Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading technology services and consulting company, announced financial results under International Financial Reporting Standards (IFRS) for the quarter ended September 30, 2022.
Highlights of the Results
Results for the Quarter ended September 30, 2022:
- Gross Revenue was ₹225.4 billion ($2.8 billion1), an increase of 14.6% YoY
- IT Services Segment Revenue was at $2,797.7 million, an increase of 8.4% YoY
- Non-GAAP2 constant currency IT Services segment revenue increased by 4.1% QoQ and 12.9% YoY
- IT Services Operating Margin3 for the quarter was at 15.1%, an increase of 16 bps QoQ
- Net Income for the quarter was ₹26.6 billion ($326.8 million1) and Earnings Per Share for the quarter was at ₹4.86 ($0.061)
- Operating Cash Flows at 180.6% of Net Income for the quarter was at ₹48.0 billion ($590.0 million1), an increase of 101.0% YoY
- Our closing employee count in IT Services increased to 259,179
- Voluntary attrition4 measured in trailing twelve months for the quarter was at 23.0%, a moderation of 30 bps from the previous quarter
- Our top 5 clients grew 19% YoY and top 10 clients grew 17% YoY in constant currency terms
- For the convenience of the readers, the amounts in Indian Rupees in this release have been translated into United States Dollars at the certified foreign exchange rate of US$1 = ₹81.37, as published by the Federal Reserve Board of Governors on September 30, 2022. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2022 was US$1= ₹79.93
- Constant currency revenue for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period
- IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials
- Voluntary attrition is at IT Services excluding DOP measured in trailing twelve months for the quarter
- Large deal bookings constitute of deals greater than or equal to $30 million in Total contract value terms
Performance for the Quarter ended September 30, 2022
Thierry Delaporte, CEO and Managing Director, said, “Our strong performance in the quarter is further proof that our strategy is yielding the intended results. The solid growth in our bookings, large deal signings, and revenues underscore our improved market competitiveness and enhanced value proposition.
Our ongoing investments in high-growth strategic areas have allowed us to steadily increase our win rate and enhance the quality of our pipeline. As a result of these efforts and our sharp focus on operational excellence, we are now seeing an improvement in our margins.
We continue to invest in and upskill our talent to stay ahead of our clients’ evolving needs. In the second quarter, we promoted more than 10,000 colleagues and increased salaries across bands. We are pleased to report that we recorded a third consecutive quarter of moderation in attrition.
As the market conditions evolve, I believe our comprehensive portfolio of differentiated offerings position us extremely well to serve the changing needs of our clients and help them face the challenges of an uncertain macro environment with confidence.”
Jatin Dalal, Chief Financial Officer, said, “We achieved margins of 15.1% in Q2 after absorbing the impact of salary increases and promotions. Our margin improvement was led by better price realisations and strong operational improvements in automation-led productivity. Our Operating Cash Flows was robust and at 181% of our Net Income for the quarter.”
Outlook for the Quarter ending December 31, 2022
We expect Revenue from our IT Services business to be in the range of $2,811 million to $2,853 million*. This translates to a sequential growth of 0.5% to 2.0%. *Outlook is based on the following exchange rates: GBP/USD at 1.18, Euro/USD at 1.01, AUD/USD at 0.68, USD/INR at 79.47 and CAD/USD at 0.75
IT Services – Large deals
Wipro continued its momentum in winning large deals with our customers as described below:
- A US-based technology company has selected Wipro as their preferred transformation partner for engineering services to modernize their advertising-technology suite of products as well as the underlying enterprise-wide infrastructure. Wipro will help the customer migrate their workloads to the cloud and provide these services from four global locations in an agile POD-based delivery model.
- A global chemicals company has selected Wipro to deliver Service Desk, Field Services and Service Integration & Management for its employees across 63 countries. This strategic partnership will consolidate multiple vendors into one single provider and standardize processes to improve efficiency.
- A large, US-based healthcare plan has selected Wipro as its strategic partner to help expand its self-funded small group business. Wipro will be using its proprietary healthcare payer digital platform for processing claims and providing member services, ensuring cost efficiencies.
- A global technology company has selected Wipro for the consolidation and transformation of its quality engineering services for their flagship products. Wipro will accelerate the time-tomarket and improve overall productivity and ensure the highest standards of excellence.
- Wipro has signed a multi-year deal with a large Europe-based facilities management and professional services company. Wipro will help drive automation and digitalisation of business processes to create value for their business.
IT Services - Digital services deals
We continue to see increasing traction in digital oriented and other strategic deals as illustrated below:
- Designit is supporting one of Europe’s largest home appliances manufacturers to define a brand neutral and sustainable design vision for laundry care. Designit will conceptualize and outline the innovative new machine architecture and sustainable product story, including design of the product, the experience, and relevant digital touchpoints. The visionary washing machine concept will act as a lighthouse and will be setting the direction for future sustainable products in this segment.
- A US-based automotive component manufacturer has selected Wipro for the comprehensive development of next generation in-vehicle infotainment applications, cloud enablement, device testing and validation. Wipro will deploy a large team of engineers, in a Center of Excellence model, to significantly improve device and platform integration across multiple vehicle programs.
- Wipro has been awarded a contract by a US-based water utilities company to modernize their customer care and billing platform. Through this program, Wipro FullStride Cloud Services will help the client improve its meter-to-cash and field services management capabilities in the cloud.
- A global pharmaceutical and medical devices company has selected Wipro to automate their complaint management process leveraging Wipro Digital Operations Platform and Services. Wipro will help the client address complaints related to medical devices from patients,physicians and nurses in a timely manner and ensure compliance to regulatory requirements.
Wipro was featured in HFS Top 10: Cybersecurity Service Providers, 2022
- Wipro was positioned as a Leader in IDC MarketScape: Worldwide Managed Cloud Security Services in the Multicloud Era 2022 (Doc #US48761022 September 2022)
- Wipro was recognized as a Leader in ISG Provider Lens™ Network Software Defined Solutions and Services 2022 - Malaysia & Singapore (all quadrants)
- Wipro was named as a Leader in ISG Provider Lens™ Cybersecurity Solutions and Services 2022 – Technical Security Services & Managed Security Services - Singapore & Malaysia
- Wipro was named as a Leader in Everest Group’s Digital Workplace Services PEAK Matrix® Assessment 2022 – North America and Europe
- Wipro was named as a Leader in Everest Group’s Digital Twin Services, Industry 4.0 Services and Data and Analytics (D&A) Services PEAK Matrix® Assessment 2022
- Wipro was recognized as a Leader in Everest Group’s SI Capabilities on AWS and Microsoft Azure PEAK Matrix® Assessment 2022
- Wipro was rated as a Leader in Everest Group’s Life Sciences Digital and Financial Crime & Compliance (FCC) Operations Services PEAK Matrix® Assessment 2022
- Wipro was recognized as a Leader in Everest Group’s IT Security Services PEAK Matrix® Assessment 2022 – North America and Europe
- Wipro was rated as a Leader in Avasant Life Sciences Digital Services 2022-2023 RadarView™
- Wipro was featured in HFS Top 10: HCP Service Providers, 2022
- IT Products segment revenue for the quarter was ₹1.2 billion ($15.3 million1 )
- IT Products segment results for the quarter was a loss of ₹0.10 billion ($1.27 million1 )
India business from State Run Enterprises (ISRE)
- India SRE segment revenue for the quarter was ₹1.6 billion ($19.4 million1 )
- India SRE segment results for the quarter was a profit of ₹0.15 billion ($1.79 million1 )
Please refer to the table on page 11 for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.
The table on page 11 provides IT Services Revenue on a constant currency basis, which is a non-GAAP financial measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Further, in the normal course of business, we may divest a portion of our business which may not be strategic. We refer to the growth rates in both reported and constant currency adjusting for such divestments in order to represent the comparable growth rates.
This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.
Results for the Quarter ended September 30, 2022, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com
Quarterly Conference Call
We will hold an earnings conference call today at 07:30 p.m. Indian Standard Time (10:00 a.m. U.S. Eastern Time) to discuss our performance for the quarter. The audio from the conference call will be available online through a web-cast and can be accessed at the following link- https://links.ccwebcast.com/?EventId=WIP121022
An audio recording of the management discussions and the question-and-answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com
About Wipro Limited
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading technology services and consulting company focused on building innovative solutions that address clients’ most complex digital transformation needs. Leveraging our holistic portfolio of capabilities in consulting, design, engineering, and operations, we help clients realize their boldest ambitions and build future-ready, sustainable businesses. With over 250,000 employees and business partners across 66 countries, we deliver on the promise of helping our customers, colleagues, and communities thrive in an ever-changing world. For additional information, visit us at www.wipro.com