Wipro Announces Results for the Quarter-Ended December 31, 2023

IT services segment revenue near top-end of guidance

Delivers IT services operating margin at 16%, EPS increases 2.0% QoQ

$3.8 billion order booking with 14 large deal wins

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 December 31, 2023.

Highlights of the Results

Results for the Quarter ended December 31, 2023:

1. Gross revenue reached Rs 222.1 billion ($2.7 billion¹), a decrease of 1.4% QoQ.
2. IT services segment revenue was at $2,656.1 million, a decrease of 2.1% QoQ.
3. Non-GAAP² constant currency IT Services segment revenue decreased 1.7% QoQ.
4. Total bookings³ was at $3.8 billion, up by 0.2% QoQ and large deal bookings⁴ was at $0.9 billion.
5. IT services segment EBIT for the quarter was Rs 35.4 billion ($425.8 million¹), a decrease of 1.8% QoQ.
6. IT services operating margin⁵ for the quarter was at 16.0%, down by 11 bps QoQ.
7. Net income for the quarter was at Rs 26.9 billion ($323.9 million¹), an increase of 1.8% QoQ.
8. Earnings per share for the quarter was at Rs 5.16 ($0.06¹), an increase of 2.0% QoQ.
9. Operating cash flows at 177.3% of Net Income for the quarter was at Rs 47.9 billion ($575.7 million¹).
10. Voluntary attrition⁶ has continued to moderate QoQ, coming in at 10-quarter low of 12.3% in Q3'24.
11. Interim dividend declared of Rs 1 ($0.012¹) per equity share/ADS.

Outlook for the Quarter ending March 31, 2024

We expect revenue from our IT Services business segment to be in the range of $2,615 million to $2,669 million*. This translates to sequential guidance of -1.5% to +0.5% in constant currency terms.

* Outlook for the Quarter ending March 31, 2024, is based on the following exchange rates: GBP/USD at 1.24, Euro/USD at 1.08, AUD/USD at 0.65, USD/INR at 83.54 and CAD/USD at 0.72

Performance for the Quarter ended December 31, 2023

"Our investments in people, processes, and business operations are continuing to pay off," said Thierry Delaporte, CEO and Managing Director. "In a seasonally soft quarter, deal booking momentum remained strong. Our large deals recorded a 20 percent year-to-date growth. Further, we are starting to see early signs of a return to growth in Consulting, as demonstrated by the double-digit growth in order bookings in our Capco business.

"Under our ai360 strategy, AI is now embedded across most of our existing solutions and client offerings. We're deploying AI internally across all business and functional areas as well, with the goals of efficiency, productivity, and scale. We are confident that these investments will allow us to capitalize on emerging opportunities, as the macro environment improves."

Aparna C. Iyer, Chief Financial Officer, said, "I am pleased with our rigor of execution across all financial metrics - revenue, margin, EPS, and cash flow. We are building a more resilient, agile, and efficient organization which has helped us sustain our margins at 16%, a 63 basis point improvement on a year-to-date basis despite revenue headwinds and absorbing the impact of the investments we are making for growth and people."

IT Products

1. IT Products segment revenue for the quarter was Rs 0.8 billion ($9.7 million¹)
2. IT Products segment results for the quarter was a gain of Rs 0.11 billion ($1.37 million¹)

Please refer to the table at the end for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.

1. 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 = Rs 83.19, as published by the Federal Reserve Board of Governors on December 31, 2023. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2023, was US$1= Rs 83.40.
2. Constant currency for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period.
3. Total Bookings refers to the total contract value of all orders that were booked during the period including new orders, renewals, and increases to existing contracts. Bookings do not reflect subsequent terminations or reductions related to bookings originally recorded in prior fiscal periods. Bookings are recorded using then-existing foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange rate fluctuations. The revenues from these contracts accrue over the tenure of the contract. For constant currency growth rates, refer note 2.
4. Large deal bookings consist of deals greater than or equal to $30 million in total contract value.
5. IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials.
6. Voluntary attrition is in IT Services computed on a quarterly annualised basis and excludes DOP.
7. Effective April 1, 2023, we merged our ISRE segment with our IT Services segment. The YoY growth rates for the quarter ended December 31, 2023, were computed by rebase lining Q3'23 numbers.

Highlights of Strategic Deal Wins

In the third quarter, Wipro continued to win large and strategic deals across industries. Key highlights include:

1. Wipro was selected by a US-based member-governed health insurance non-profit to deploy an integrated Business Platform as a Service to deliver end-to-end plan administration services. Leveraging its proprietary Individual & Family Health Insurance Exchange platform, Wipro will help streamline the enrollment, billing and claims process for the client. The platform will also use AI to reconcile premiums with subsidies offered by the government to minimize costs for members. The client will benefit from increased satisfaction amongst providers, clinics and pharmacies and improved compliance with evolving regulations.
2. A global technology leader has chosen Wipro to develop capabilities for their AI-driven orchestration platform. Wipro will collaborate closely with the client to integrate various systems involved in the process lifecycle, simplifying navigation, and streamlining workflows for end-users. This will improve overall productivity and accuracy, enabling tasks to be completed more efficiently. Additionally, this partnership will allow the client to expand the market reach of their solution.
3. An American Retail Bank has chosen Wipro as the end-to-end product development partner for the client's Payments & Digital Platform groups. Capco, Designit, and Wipro teams will provide fully-staffed, cross-functional working groups to deliver on key initiatives across the bank – including cloud migration, marketing analytics, and relationship management modernization. The combined teams will bring architecture, design, and tech delivery capacity, alongside banking domain expertise, and will be underpinned by an offshore delivery model. The resulting effort will deliver immediate efficiencies and power the maturity of the client's Digital platforms.
4. A Middle Eastern financial regulatory body has selected Wipro as a technology partner to strengthen its IT applications and infrastructure. Wipro will create a unique solution to support the client's business applications, infrastructure technology, service desk, and IT operating model. Wipro will also provide a host of value-added components, including dedicated consulting services from Capco which is aimed at business and IT strategic transformation including data, supervisory tech, and AI. The resulting increased efficiency and productivity will help the client attract both domestic and foreign investments to the region.
5. One of the world's largest wind turbine manufacturers has selected Wipro to transform its Enterprise Resource Planning landscape to harmonize the Finance, Manufacturing, Sales, Supply Chain and Customer service processes. Wipro will deliver a tailored solution that unifies the client's regional platforms, while matching the individual needs of the business units. This will empower each unit with data-driven decision-making while improving the speed-to-market, as well as supporting the rapid addition of new product lines. Leveraging its Controlled Global Template and Industrialized Rollout Framework, Wipro will ensure shorter and smoother global rollouts with increased business user satisfaction for the client.
6. A leading automotive manufacturer's financial services organization selected Wipro to consolidate their IT services, with the goal of harmonizing their IT processes across the entire enterprise, creating new synergies across functions, and a consolidation of current supplier landscape. The project involves the transformation towards a managed service operation model and providing services for the client's core infrastructure, central platform services, and end-user computing services. The solutions delivered by the Wipro team will help the client realize its business transformation goals and support their evolution to a mobility services provider.
7. An international banking institution has selected Wipro to transform its business applications portfolio. The Wipro team will create a bespoke, automation-based solution to assess, transform, and manage the client's applications estate. The project will lead to increased operational efficiency, cost reduction, and increased cloud adoption.
8. Wipro was selected by one of the world's largest airlines to deliver omni-channel customer services support across its e-commerce and loyalty program. Through this engagement, Wipro will streamline the customer service process for agents, provide automated visualization for performance management, and track quality through enhanced reporting and analysis. The agents will be trained through gamified learning modules, which will quickly lead to improved processes, reduced wait times and better end-customer experience.
9. A US-based technology services company has selected Wipro to augment its navigation assistance offering. For the client's end users, the Wipro team will improve navigation and create new map features, enhancing the search functionality of 2D and 3D mapping, as well as improving transit, indoor and business listings. For the client's B2B customers, Wipro will assist in building customized features targeting Autonomous Driving & Simulation (ADAS) technology for the transportation, hospitality, and automotive sectors. The client can expect to see enhanced data and product quality, as well as monetization of their offering.
10. An integrated healthcare network has selected Wipro to deliver end-to-end managed services to transform their IT environment and digital infrastructure. As part of this project, the Wipro team will leverage hyper-automation to help the client improve customer service and overall efficiency, increase speed and scalability, as well as achieve cost optimization.
11. A US-based education assistance agency has selected Wipro to deliver digitally enabled customer care services. The Wipro team will build a custom solution to transform the client's end-user journey. The solution will also ensure better contract compliance, more profitable service delivery, improved customer satisfaction, and enhance the client's overall industry ranking.
12. A North American banking group has selected Wipro to test and improve their overall technology efficiency. The Wipro team will improve the testing automation efficiency of their legacy technology stack. This will enable the business to onboard new applications within its infrastructure while improving year-on-year automation efficiency across the client's portfolio.
13. A Swiss multinational corporation has selected Wipro to be its Global Network systems integrator to refresh & transform their 600+ sites to be cloud native. The Wipro team will build a completely customized solution that will allow for flexibility and speed of execution in a time-bound manner using Wipro accelerators. This integration project will align with the client's overall cloud strategy, increase their speed to market, and will produce cost savings of up to 20 percent.

Analyst Recognition

1. Wipro was positioned as a Leader in Avasant's Data Management and Advanced Analytics Services RadarView™ 2023
2. Wipro was rated as a Leader in ISG Provider Lens™ – Future of Work Services and Solutions 2023 - Germany (multiple quadrants)
3. Wipro was recognized as a Leader in IDC MarketScape: Worldwide Managed Public Cloud Services 2023 Vendor Assessment (Doc # US49116023 Nov 2023)
4. Wipro was featured as a Horizon 3 - Leader in HFS Horizons: Generative Enterprise™ Services, 2023
5. Wipro was ranked as a Leader in Avasant's Digital Talent Capability RadarView™ 2023 – 2024
6. Wipro was positioned a Leader in Everest Group's Cloud Security Services PEAK Matrix® Assessment 2023
7. Wipro was designated a Leader in Everest Group's Cloud Services in Insurance PEAK Matrix® Assessment 2023
8. Wipro was named a Leader in IDC MarketScape: Worldwide Supply Chain All Other Ecosystems Services 2023 Vendor Assessment (Doc # US51314123 Nov 2023)
9. Wipro was recognized as a Leader in ISG Provider Lens™ – Oil and Gas Industry Services and Solutions 2023 (all quadrants)
10. Wipro was positioned as a Leader in ISG Provider Lens™ – AWS Ecosystem Partners 2023 - Germany (all quadrants)
11. Wipro was positioned as a Horizon 3 - Leader in HFS Horizons: Retail and CPG Service Providers, 2023
12. Wipro was positioned as a Leader in the 2023 Gartner® Magic Quadrant™ for Managed Network Services

Source & Disclaimer: *Gartner, "Magic Quadrant for Managed Network Services", Ted Corbett, et al, 18 November 2023.

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and MAGIC QUADRANT is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved.

Gartner does not endorse any vendor, product, or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner's research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

The Gartner content described herein (the "Gartner Content") represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this press release, and the opinions expressed in the Gartner Content are subject to change without notice.

About Key Metrics and Non-GAAP Financial Measures

This press release contains key metrics and 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 from the most directly comparable financial measure calculated and presented in accordance with IFRS.

The table at the end 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.

Our key metrics and non-GAAP financial measures are 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. Our key metrics and non-GAAP financial measures are not comparable to, nor should be substituted for, an analysis of our revenue over time and involve estimates and judgments. In addition to our non-GAAP measures, 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 December 31, 2023, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com/investors/

Quarterly Conference Call

We will hold an earnings conference call today at 07:00 p.m. Indian Standard Time (9:30 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 webcast and can be accessed at the following link - https://links.ccwebcast.com/?EventId=WIP12012024

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 nearly 240,000 employees and business partners across 65 countries, we deliver on the promise of helping our clients, colleagues, and communities thrive in an ever-changing world. For additional information, visit us at www.wipro.com

Forward-Looking Statements

The forward-looking statements contained herein represent Wipro's beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro's control. Such statements include, but are not limited to, statements regarding Wipro's growth prospects, its future financial operating results, the benefits its customers' experience and its plans, expectations, and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, complete proposed corporate actions, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our business and industry.

Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.

Additional Information:

Effective April 1, 2023, we merged our India State Run Enterprise segment ("ISRE") with our IT Services segment. Currently, the Company is organized into the following operating segments: IT Services and IT Products.

IT Services: As announced on November 12, 2020, effective January 1, 2021, we re-organized our IT Services segment into four Strategic Market Units ("SMUs") - Americas 1, Americas 2, Europe and Asia Pacific Middle East Africa ("APMEA").

Americas 1 and Americas 2 are primarily organized by industry sector, while Europe and APMEA are organized by countries.

Americas 1 includes Healthcare and Medical Devices, Consumer Goods and Lifesciences, Retail, Transportation and Services, Communications, Media and Information services, Technology Products and Platforms, in the United States of America and entire business of Latin America ("LATAM"). Americas 2 includes Banking, Financial Services and Insurance, Manufacturing, Hi-tech, Energy and Utilities industry sectors in the United States of America and entire business of Canada. Europe consists of United Kingdom and Ireland, Switzerland, Germany, Benelux, Nordics and Southern Europe. APMEA consists of Australia and New Zealand, India, Middle East, South East Asia, Japan and Africa.

IT Products: The Company is a value-added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. Revenue relating to the above items is reported as revenue from the sale of IT Products.

Reconciliation of selected GAAP measures to Non-GAAP measures

Reconciliation of Free Cash Flow for three months and nine months ended December 31, 2023

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