Vio Limited Q4 FY24 Earnings Conference Call

Introduction

• Welcome by the host.
• Reminder: Participant lines in listen-only mode, with Q&A opportunity after the presentation.
• Assistance: Signal the operator by pressing star then zero.
• The call is being recorded.
• Handed over to Mr. Deep Bor, Senior VP, Corporate Treasurer and Investor Relations.

Opening Remarks

• Warm welcome to Q4 FY24 earnings call.
• Overview of the call's structure: Business highlights by CEO Shas Bala, Financial overview by CFO AA, followed by Q&A.
• Forward-looking statements caution.

CEO Shas Bala's Overview

• Bala's background with Vio since 1992.
• Vio's strong global presence in over 60 countries.
• Commitment to sustainability, diversity, and inclusivity.
• High expectations for his new role as CEO.
• Acknowledge challenges in the past year, industry-wide impact.

Immediate Priorities

• Accelerate growth: Despite challenges, the future opportunities are vast.
• Technological shift: Clients eager to leverage AI.
• Investments in strengthening capabilities.
• Simplified operating model.

Five Focus Areas

1. Accelerate large deal momentum by working closely with clients and partners.
2. Strengthen relationships with large clients and partners.
3. Industry-specific offerings and business solutions led by consulting and AI.
4. Talent building at scale to deliver industry-specific solutions.
5. Simplify operating model and focus on execution rigor.

Financial Performance (Q4 and FY24)

• IT Services Revenue: Grown sequentially by 0.1% in reported currency.
• Consulting Business: Continued traction, Capco's revenue grew by 6.6%, order bookings up 43.6%.
• Total Order Bookings: $3.6 billion in Q4, $14.9 billion for the full year.
• Large Deals: 18 large deals in Q4, worth $1.2 billion. Full year bookings of $4.6 billion, a 17.4% growth YoY.
• Overall Revenue: $10.8 billion for FY24.
• Margins: Expanded to 16.4% in Q4.
• Strategic Acquisitions: Majority share in ACG, launched Vio Enterprise AI Ready Platform with IBM.
• Guidance for Q1: Sequential growth of -1.5% to +0.5% in constant currency.

Financial Overview by CFO AA

• Reported currency growth: 0.1% sequentially; -0.3% in constant currency.
• Full-year decline: 3.8% in reported currency, 4.4% in constant currency.
• Market Unit Performance:
  • Americas 1: 8 large deals in Q4, 24.9% YoY order booking growth.
  • Americas 2: Revenues grew 1.9% QoQ but declined 6.1% YoY.
  • Europe: Revenue decreased 0.1% QoQ, and 7% YoY.
  • Asia-Pacific: Revenue declined 2.2% QoQ, 4.5% for the full year.
• Operating Margins: Expanded by 40 basis points in Q4.
• Net Income and EPS: Q4 net income increased by 5.2%, full-year EPS grew by 0.8%.
• Cash Flows: $626 million in Q4; $2.1 billion for the full year.
• Guidance for Q1 FY25: IT services revenue expected to be $2.617 billion to $2.67 billion.

Q&A Highlights

• Large Deal Momentum: Proactive client engagements, specific business solutions.
• Capco Utilization: Strategic advantage, leveraging end-to-end consulting to execution.
• Sector-Specific Insights: Bfsi seeing early stability, ongoing focus on profitable growth.
• Talent and Leadership: Emphasis on developing and retaining internal talent.
• Margin Improvements: Operational efficiencies, leveraging synergies from acquisitions.
• Capital Allocation: Continued focus on strategic M&A.

Closing Remarks

• Encouragement to reach out to investor relations for further questions.
• Call concluded.