Latest news with #ExlServiceHoldings
Yahoo
14-05-2025
- Business
- Yahoo
Does ExlService Holdings (EXLS) Have a Long Runway for Growth?
Polen Capital, an investment management company, released its 'Polen U.S. Small Company Growth Strategy' first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q1 2025, optimism fueled by the Trump election shifted to fear and uncertainty due to apprehension about cost-cutting measures and emerging trade policies. In the first quarter, the fund delivered -10.53% gross, and -10.83% net of fees, compared to a -11.12% return for the Russell 2000 Growth Index. In addition, you can check the fund's top 5 holdings to find out its best picks for 2025. In its first-quarter 2025 investor letter, Polen U.S. Small Company Growth Strategy highlighted stocks such as ExlService Holdings, Inc. (NASDAQ:EXLS). ExlService Holdings, Inc. (NASDAQ:EXLS) is a data analytics and digital operations and solutions company. The one-month return of ExlService Holdings, Inc. (NASDAQ:EXLS) was 1.85%, and its shares gained 53.19% of their value over the last 52 weeks. On May 13, 2025, ExlService Holdings, Inc. (NASDAQ:EXLS) stock closed at $46.86 per share with a market capitalization of $7.624 billion. Polen U.S. Small Company Growth Strategy stated the following regarding ExlService Holdings, Inc. (NASDAQ:EXLS) in its Q1 2025 investor letter: "ExlService Holdings, Inc. (NASDAQ:EXLS) is a business process outsourcing (BPO) company specializing in the insurance industry. Along with the broad IT services industry, EXL Service Holdings has been hampered by a weaker spending environment in recent quarters. However, early signs of a spending recovery suggest to us that earnings growth may accelerate, creating potential for depressed valuations to re-rate higher. Additionally, the company continues executing its Al strategy, introducing an insurance-specific large language model in partnership with NVIDIA. Given the insurance industry's traditionally slow pace of digital adoption, we think EXL Service has a long runway for growth ahead as digital adoption gains traction." A cross section of a data analyst overviewing code on several monitors. ExlService Holdings, Inc. (NASDAQ:EXLS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held ExlService Holdings, Inc. (NASDAQ:EXLS) at the end of the fourth quarter which was 22 in the previous quarter. ExlService Holdings, Inc. (NASDAQ:EXLS) reported revenue of $501 million an increase of 15% year-over-year. While we acknowledge the potential of ExlService Holdings, Inc. (NASDAQ:EXLS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered ExlService Holdings, Inc. (NASDAQ:EXLS) and shared the list of Jim Cramer stocks to watch as US-China prepare to begin talks. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
13-05-2025
- Business
- Yahoo
EXLS Q1 Earnings Call: Data and AI-Led Growth Drives Revenue Beat and Strategic Investments
Data analytics and digital solutions company ExlService Holdings (NASDAQ:EXLS) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 14.8% year on year to $501 million. The company expects the full year's revenue to be around $2.05 billion, close to analysts' estimates. Its non-GAAP profit of $0.48 per share was 8.9% above analysts' consensus estimates. Is now the time to buy EXLS? Find out in our full research report (it's free). Revenue: $501 million vs analyst estimates of $491.2 million (14.8% year-on-year growth, 2% beat) Adjusted EPS: $0.48 vs analyst estimates of $0.44 (8.9% beat) Adjusted EBITDA: $111.2 million vs analyst estimates of $105.6 million (22.2% margin, 5.2% beat) The company slightly lifted its revenue guidance for the full year to $2.05 billion at the midpoint from $2.04 billion Management reiterated its full-year Adjusted EPS guidance of $1.86 at the midpoint Operating Margin: 15.7%, up from 14.1% in the same quarter last year Free Cash Flow was -$9.6 million compared to -$33.08 million in the same quarter last year Market Capitalization: $7.62 billion ExlService Holdings' first quarter results reflected notable momentum in its data and AI-led solutions, with CEO Rohit Kapoor highlighting the impact of robust demand across the company's four newly defined segments. Management attributed much of the quarter's performance to expansion with existing clients—especially in healthcare, life sciences, and insurance—as well as the rapid adoption of new AI-driven workflows. Kapoor cited the launch of EXL's agentic AI platform, as a key step forward in embedding AI into client operations and delivering higher-value business outcomes. Looking ahead, management raised its full-year revenue guidance while reiterating its profit outlook, underpinned by a strong sales pipeline and continued investment in data and AI capabilities. Kapoor emphasized that EXL's balanced vertical mix, high proportion of annuity-like revenue, and focus on cost savings for clients provide resilience amid economic uncertainty. CFO Maurizio Nicolelli noted that 87% of projected full-year revenue is already contractually committed, reinforcing management's confidence in achieving its growth targets for 2025. EXL's management focused on the evolution of its business mix and the growing relevance of AI in driving both top-line growth and operational efficiency. Key takeaways from the call included: Data and AI-Led Revenue Expansion: Management reported that data and AI-powered solutions now account for 53% of total revenue, growing 16% year-over-year. These offerings span all segments and are increasingly embedded in client workflows to unlock productivity and efficiency gains. Segment Realignment and Growth: The company's new reporting structure—insurance, healthcare and life sciences, banking/capital markets/diversified industries, and international growth markets—helped clarify performance drivers. Healthcare and life sciences showed especially strong growth, fueled by higher payment services volumes and expanded relationships. Client Demand for Cost Savings: Kapoor highlighted that clients are seeking to lower costs in order to fund technology investments, positioning EXL's services as critical for both efficiency and transformation. This dual focus was cited as a key reason for the company's resilience during periods of economic volatility. Agentic AI Platform Launch: The introduction of an agentic AI platform with over 15 proprietary agents, was described as a differentiator for EXL. Early client adoption across insurance, energy, healthcare, and banking was noted, with management expecting this platform to support faster, lower-cost AI integration in client operations. Sales Pipeline and Client Activity: The sales pipeline grew both sequentially and year-over-year. While the number of new client wins was lower than last year, management stressed the higher quality and larger size of these contracts, as well as ongoing expansion with existing clients. Management's outlook for the rest of 2025 is shaped by continued investment in AI-related capabilities and a focus on driving higher-margin, outcome-based solutions, while balancing economic uncertainty and client cost pressures. AI Investment and Adoption: Management plans to increase investment in data and AI talent and solutions, aiming to maintain its first-mover advantage as clients transition from digital to AI-powered operations. Sustained growth in this area is expected to support margin improvement over time. Segment Diversification: The company's mix of annuity-like and mission-critical services across diversified industry verticals is seen as a buffer against potential macroeconomic slowdowns. Healthcare and life sciences remain a particular focus for expansion. Outcome-Based Revenue Growth: There is a strategic shift toward outcome-based contracts, especially in healthcare and life sciences, which typically carry higher margins. Management expects this model to gradually expand to other segments over the next several years. Bryan Bergin (TD Cowen): Asked for details on the contractual revenue base and visibility for 2025. CFO Maurizio Nicolelli stated that 87% of annual revenue is committed, with 95% overall visibility at the midpoint of guidance. Bryan Bergin (TD Cowen): Inquired about the impact of AI adoption on labor needs and revenue per employee. CEO Rohit Kapoor said AI will be adopted with 'human in the loop,' leading to higher revenue per headcount and slower staff growth. Surinder Thind (Jefferies): Questioned sustainability of EXL's AI leadership. Kapoor pointed to multi-year investments in domain expertise, analytics, and data science as supporting its advantage, but said continued investment is required to maintain this position. Puneet Jain (JPMorgan): Probed on exposure to discretionary client spending in a downturn. Kapoor responded that EXL's services are largely mission-critical, producing immediate return on investment and offering resilience should discretionary spending decline. David Grossman (Stifel Europe): Sought clarity on slower insurance segment growth. Kapoor attributed the lower Q1 growth rate to timing, expressing confidence that insurance will grow in line with the company for the full year. Over the coming quarters, the StockStory team will be watching (1) the pace of adoption and measurable impact of the platform and other AI-driven solutions, (2) the mix shift toward outcome-based contracts—especially outside healthcare and life sciences, and (3) any changes in client spending patterns tied to macroeconomic conditions. Updates on client expansion, particularly in international growth markets, and the company's ability to maintain its margin trajectory will also be important indicators of execution. EXL currently trades at a forward P/E ratio of 24.3×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-05-2025
- Business
- Yahoo
Jim Cramer Likes ExlService Holdings (EXLS): 'Solid Fintech, I'd Have Them on the Show!'
We recently published a list of . In this article, we are going to take a look at where ExlService Holdings, Inc. (NASDAQ:EXLS) stands against other stocks that Jim Cramer discussed. On Thursday's episode of Mad Money, Jim Cramer voiced his exasperation over the skepticism surrounding AI infrastructure as he stated that it was never backed by solid evidence to begin with. He expressed frustration that so many investors had been misled into believing that the AI infrastructure boom had somehow stalled. 'Earnings season, it's a pain in the neck. It's convoluted stuff coming at you from all different directions. Loss of sleep, just a total time suck and I love it. I love it because it clears things up. The false narratives are exposed. You can go back to playing offense, not defense. And few false narratives have gone as far as this story about the end of data center spending.' READ ALSO: 8 Stocks on Jim Cramer's Radar Recently and Jim Cramer Listed 20 Best Performing Stocks of the Last 20 Years According to Cramer, the story took root back on January 27th, 'DeepSeek Monday,' when a Chinese company said that they developed a generative AI model requiring significantly fewer computing resources than industry leaders. He added: 'All the previously red-hot AI infrastructure stocks were immediately crushed. You know what? They never really recovered.' Cramer questioned how the doubt could have been spread so easily. He pointed to the media's role and wondered whether reporters asked the right questions or enough questions at all. He criticized the consistent spotlight given to bearish voices, many of whom had clear financial motives. As per Cramer, some of these commentators failed to disclose that they had short positions across the AI sector. He accused them of putting profits ahead of facts as he noted that too much money was at stake for them to let reality interfere with their narrative. He added: 'I know it may be hard to believe that huge companies with tens of billions of dollars to spend actually keep funneling that money to the data center suppliers… but that's exactly what's happening, and I think it's not too late to own a lot of the members of the complex. Even as I expect that if we wait a few days, the bears will be out again… They just can't stop trying to make money at your expense.' For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on April 30 and May 1. We listed the stocks in ascending order of their hedge fund sentiment as of the fourth quarter of 2024, which was taken from Insider Monkey's database of over 1,000 hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). Number of Hedge Fund Holders: 27 During the lightning round, a caller asked about ExlService Holdings, Inc. (NASDAQ:EXLS), and Cramer said: 'I actually like it. I agree with you. It's one of the fintech stocks that's been proving to be very solid and, and I like it. I should actually spend, we should have them on the show. They're doing very well.' ExlService (NASDAQ:EXLS) provides digital and analytics-driven services using AI, automation, and software platforms to support operations in areas like customer service, healthcare, finance, and supply chain management. As per ExlService's (NASDAQ:EXLS) 2025 guidance, revenue is expected to range from $2.035 billion to $2.065 billion, which is a growth of 11% to 12% on a reported basis, and 11% to 13% on a constant currency basis from 2024. The company also reported that adjusted diluted EPS are projected to be between $1.83 and $1.89, an increase of 11% to 14% from the prior year. The guidance is based on current exchange rate assumptions. Overall, EXLS ranks 10th on our list of stocks that Jim Cramer discussed. While we acknowledge the potential of EXLS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than EXLS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
30-04-2025
- Business
- Yahoo
EXL (NASDAQ:EXLS) Beats Q1 Sales Targets
Data analytics and digital solutions company ExlService Holdings (NASDAQ:EXLS) reported Q1 CY2025 results exceeding the market's revenue expectations , with sales up 14.8% year on year to $501 million. The company expects the full year's revenue to be around $2.05 billion, close to analysts' estimates. Its non-GAAP profit of $0.48 per share was 8.8% above analysts' consensus estimates. Is now the time to buy EXL? Find out in our full research report. Revenue: $501 million vs analyst estimates of $491.2 million (14.8% year-on-year growth, 2% beat) Adjusted EPS: $0.48 vs analyst estimates of $0.44 (8.8% beat) Adjusted EBITDA: $111.2 million vs analyst estimates of $105.8 million (22.2% margin, 5.1% beat) The company slightly lifted its revenue guidance for the full year to $2.05 billion at the midpoint from $2.04 billion Management reiterated its full-year Adjusted EPS guidance of $1.86 at the midpoint Operating Margin: 15.7%, up from 14.1% in the same quarter last year Market Capitalization: $7.22 billion Chairman and Chief Executive Officer Rohit Kapoor said, 'We are pleased with our first quarter results and strong start to the year, as we delivered revenue and adjusted diluted EPS growth of 15% and 27% respectively. Our strong business momentum underscores the successful execution of our differentiated data and AI-led strategy and demonstrates the enduring resilience and adaptability of EXL's business model.' Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ:EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. With $1.9 billion in revenue over the past 12 months, EXL is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it's working from a smaller revenue base. As you can see below, EXL's sales grew at an exceptional 13.8% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows EXL's demand was higher than many business services companies. Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. EXL's annualized revenue growth of 13.3% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong. This quarter, EXL reported year-on-year revenue growth of 14.8%, and its $501 million of revenue exceeded Wall Street's estimates by 2%. Looking ahead, sell-side analysts expect revenue to grow 10.7% over the next 12 months, a slight deceleration versus the last two years. Despite the slowdown, this projection is admirable and suggests the market is forecasting success for its products and services. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. EXL has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average operating margin of 14%. Analyzing the trend in its profitability, EXL's operating margin rose by 2 percentage points over the last five years, as its sales growth gave it operating leverage. This quarter, EXL generated an operating profit margin of 15.7%, up 1.6 percentage points year on year. This increase was a welcome development and shows it was more efficient. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. EXL's EPS grew at an astounding 22.4% compounded annual growth rate over the last five years, higher than its 13.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into EXL's earnings quality to better understand the drivers of its performance. As we mentioned earlier, EXL's operating margin expanded by 2 percentage points over the last five years. On top of that, its share count shrank by 5.2%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. In Q1, EXL reported EPS at $0.48, up from $0.38 in the same quarter last year. This print beat analysts' estimates by 8.8%. Over the next 12 months, Wall Street expects EXL's full-year EPS of $1.76 to grow 9.9%. We enjoyed seeing EXL beat analysts' revenue, EPS, and EBITDA expectations this quarter. On the other hand, its full-year EPS guidance slightly missed. Still, this quarter had some key positives. The stock remained flat at $45.09 immediately following the results. Big picture, is EXL a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Yahoo
29-04-2025
- Business
- Yahoo
EXL Reports 2025 First Quarter Results
NEW YORK, April 29, 2025 (GLOBE NEWSWIRE) -- ExlService Holdings, Inc. (NASDAQ: EXLS), a global data and AI company, today announced its financial results for the quarter ended March 31, 2025. Chairman and Chief Executive Officer Rohit Kapoor said, 'We are pleased with our first quarter results and strong start to the year, as we delivered revenue and adjusted diluted EPS growth of 15% and 27% respectively. Our strong business momentum underscores the successful execution of our differentiated data and AI-led strategy and demonstrates the enduring resilience and adaptability of EXL's business model.' Chief Financial Officer Maurizio Nicolelli said, 'While we remain prudent in our outlook given the increasing level of macro-economic uncertainty, we are increasing our revenue guidance for the year, based on our business momentum and more favorable currency exchange rates. We now expect revenue to be in the range of $2.035 billion to $2.065 billion, up from our prior guidance of $2.025 billion to $2.060 billion. This represents 11% to 12% year-over-year growth on a reported basis, or 11% to 13% on a constant currency basis. We continue to expect our adjusted diluted earnings per share for 2025 to be in the range of $1.83 to $1.89, representing an 11% to 14% increase over 2024, as we continue to accelerate our data and AI investments to generate future growth.' ______________________________________________________________ Reconciliations of adjusted (non-GAAP) financial measures to the most directly comparable GAAP measures, where applicable, are included at the end of this release under 'Reconciliation of Adjusted Financial Measures to GAAP Measures.' These non-GAAP measures, including adjusted diluted EPS and constant currency measures, are not measures of financial performance prepared in accordance with GAAP. Financial Highlights: First Quarter 2025 Revenue for the quarter ended March 31, 2025, increased to $501.0 million compared to $436.5 million for the first quarter of 2024, an increase of 14.8% on a reported basis and 15.1% on a constant currency basis. Revenue increased by 4.1% sequentially on a reported basis and 4.3% on a constant currency basis, from the fourth quarter of 2024. Revenue Gross Margin Three months ended Three months ended Reportable Segments (1) March 31, 2025 March 31, 2024 March 31, 2025 March 31, 2024 (dollars in millions) Insurance $ 172.0 $ 158.3 36.6 % 33.8 % Healthcare and Life Sciences 125.6 100.7 43.9 % 45.3 % Banking, Capital Markets and Diversified Industries 117.7 103.2 37.3 % 36.1 % International Growth Markets 85.7 74.3 36.6 % 35.9 % Total Revenue, net $ 501.0 $ 436.5 38.6 % 37.4 % (1) In the first quarter of 2025, the Company implemented operational and structural changes to accelerate the execution of its data and AI-led strategy. Under the new structure, the Company reports its financial performance based on new segments presented in the table above, and as described in more detail in its Quarterly Report on Form 10-Q for the three months ended March 31, 2025, that is being filed with the SEC. In conjunction with the new reporting structure, the Company has recast prior period amounts, wherever applicable, to conform to the way the Company internally manages and monitors segment performance. Operating income margin for the quarter ended March 31, 2025 was 15.7%, compared to 14.1% for the first quarter of 2024 and 14.8% for the fourth quarter of 2024. Adjusted operating income margin for the quarter ended March 31, 2025 was 20.1%, compared to 18.9% for the first quarter of 2024 and 18.8% for the fourth quarter of 2024. Diluted earnings per share for the quarter ended March 31, 2025 was $0.40, compared to $0.29 for the first quarter of 2024 and $0.31 for the fourth quarter of 2024. Adjusted diluted earnings per share for the quarter ended March 31, 2025 was $0.48, compared to $0.38 for the first quarter of 2024 and $0.44 for the fourth quarter of 2024. Business Highlights: First Quarter 2025 Won 10 new clients in the first quarter of 2025. Named a Leader in four categories in the ISG Provider Lens™ Insurance Services 2024 report. Earning top honors in the North American Life & Retirement, Property & Casualty, Life & Retirement TPA Insurance Services, and Insurance IT Services. Named a Leader and a Star Performer in Everest Group's Life and Annuities Insurance Business Process Services and Third-Party Administrator (TPA) PEAK Matrix® Assessment 2025. Recognized as part of Newsweek's America's Most Responsible Companies 2025, Forbes' Most Trusted Companies in America 2025, USA Today's America's Climate Leaders 2025, and The Financial Times' Best Employers Asia-Pacific 2025. 2025 GuidanceBased on current visibility, and a U.S. dollar to Indian rupee exchange rate of 85.5, U.K. pound sterling to U.S. dollar exchange rate of 1.30, U.S. dollar to the Philippine peso exchange rate of 57.0 and all other currencies at current exchange rates, we are providing the following guidance for the full year 2025: Revenue of $2.035 billion to $2.065 billion, representing an increase of 11% to 12% on a reported basis, and 11% to 13% on a constant currency basis from 2024; and Adjusted diluted earnings per share of $1.83 to $1.89, representing an increase of 11% to 14% from Holdings, Inc. will host a conference call on Wednesday, April 30, 2025 at 10:00 A.M. ET to discuss the Company's quarterly operating and financial results. The conference call will be available live via the internet by accessing the investor relations section of EXL's website at where an accompanying investor-friendly spreadsheet of historical operating and financial data can also be accessed. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software. Please note that there is a new system to access the live call-in order to ask questions. To join the live call, please register here. A dial-in and unique PIN will be provided to join the call. For those who cannot access the live broadcast, a replay will be available on the EXL website for a period of twelve months. About ExlService Holdings, (NASDAQ: EXLS) is a global data and artificial intelligence ("AI") company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed. EXL harnesses the power of data, AI, and deep industry knowledge to transform businesses, including the world's leading corporations in industries including insurance, healthcare, banking and financial services, media and retail, among others. EXL was founded in 1999 with the core values of innovation, collaboration, excellence, integrity and respect. We are headquartered in New York and have more than 60,000 employees spanning six continents. For more information, visit Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to EXL's operations and business environment, all of which are difficult to predict and many of which are beyond EXL's control. Forward-looking statements include information concerning EXL's possible or assumed future results of operations, including descriptions of its business strategy. These statements may include words such as 'may,' 'will,' 'should,' 'believe,' 'expect,' 'anticipate,' 'intend,' 'plan,' 'estimate' or similar expressions. These statements are based on assumptions that we have made in light of management's experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although EXL believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect EXL's actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors, which include our ability to maintain and grow client demand, our ability to hire and retain sufficiently trained employees, and our ability to accurately estimate and/or manage costs, rising interest rates, rising inflation and recessionary economic trends, are discussed in more detail in EXL's filings with the Securities and Exchange Commission, including EXL's Annual Report on Form 10-K. You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect EXL. EXL has no obligation to update any forward-looking statements after the date hereof, except as required by applicable law. EXLSERVICE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share amount and share count) Three months ended March 31, 2025 2024 Revenues, net $ 501,019 $ 436,507 Cost of revenues (1) 307,705 273,424 Gross profit (1) 193,314 163,083 Operating expenses: General and administrative expenses 59,417 53,243 Selling and marketing expenses 41,925 35,970 Depreciation and amortization expense 13,557 12,346 Total operating expenses 114,899 101,559 Income from operations 78,415 61,524 Foreign exchange gain, net 1,192 359 Interest expense (4,144 ) (3,291 ) Other income, net 4,703 3,952 Income before income tax expense and earnings from equity affiliates 80,166 62,544 Income tax expense 13,496 13,753 Income before earnings from equity affiliates 66,670 48,791 Loss from equity-method investment (109 ) (28 ) Net income $ 66,561 $ 48,763 Earnings per share: Basic $ 0.41 $ 0.30 Diluted $ 0.40 $ 0.29 Weighted-average number of shares used in computing earnings per share: Basic 162,490,179 165,082,387 Diluted 164,557,333 166,726,853 (1) Exclusive of depreciation and amortization expense. EXLSERVICE HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except per share amount and share count) As of March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 140,442 $ 153,355 Short-term investments 190,978 187,223 Restricted cash 9,826 9,972 Accounts receivable, net 339,856 304,322 Other current assets 150,203 140,317 Total current assets 831,305 795,189 Property and equipment, net 107,148 101,837 Operating lease right-of-use assets 71,150 68,784 Restricted cash 8,210 8,071 Deferred tax assets, net 109,953 104,747 Goodwill 420,494 420,387 Other intangible assets, net 46,092 49,331 Long-term investments 20,134 13,972 Other assets 61,925 56,085 Total assets $ 1,676,411 $ 1,618,403 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 5,648 $ 5,884 Current portion of long-term borrowings 4,886 4,886 Deferred revenue 20,138 19,264 Accrued employee costs 63,575 129,994 Accrued expenses and other current liabilities 131,980 113,597 Current portion of operating lease liabilities 17,426 16,491 Total current liabilities 243,653 290,116 Long-term borrowings, less current portion 302,377 283,598 Operating lease liabilities, less current portion 61,408 59,851 Deferred tax liabilities, net 1,625 1,403 Other non-current liabilities 55,471 53,573 Total liabilities 664,534 688,541 Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued — — Common stock, $0.001 par value; 400,000,000 shares authorized, 207,758,497 shares issued and 162,683,343 shares outstanding as of March 31, 2025 and 206,510,587 shares issued and 161,801,212 shares outstanding as of December 31, 2024 207 206 Additional paid-in capital 609,592 588,583 Retained earnings 1,348,521 1,281,960 Accumulated other comprehensive loss (142,787 ) (154,722 ) Total including shares held in treasury 1,815,533 1,716,027 Less: 45,075,154 shares as of March 31, 2025 and 44,709,375 shares as of December 31, 2024, held in treasury, at cost (803,656 ) (786,165 ) Total Stockholders' equity 1,011,877 929,862 Total liabilities and stockholders' equity $ 1,676,411 $ 1,618,403 EXLSERVICE HOLDINGS, INC. Reconciliation of Adjusted Financial Measures to GAAP Measures In addition to its reported operating results in accordance with U.S. generally accepted accounting principles (GAAP), EXL has included in this release certain financial measures that are considered non-GAAP financial measures, including the following: (i) Adjusted operating income and adjusted operating income margin;(ii) Adjusted EBITDA and adjusted EBITDA margin;(iii) Adjusted net income and adjusted diluted earnings per share; and(iv) Revenue growth on constant currency basis. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated. EXL believes that providing these non-GAAP financial measures may help investors better understand EXL's underlying financial performance. Management also believes that these non-GAAP financial measures, when read in conjunction with EXL's reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company's results and comparisons of the Company's results with the results of other companies. Additionally, management considers some of these non-GAAP financial measures to determine variable compensation of its employees. The Company believes that it is unreasonably difficult to provide its earnings per share financial guidance in accordance with GAAP, or a qualitative reconciliation thereof, for a number of reasons, including, without limitation, the Company's inability to predict its future stock-based compensation expense under ASC Topic 718, the amortization of intangibles associated with future acquisitions and the currency fluctuations and associated tax effects. As such, the Company presents guidance with respect to adjusted diluted earnings per share. The Company also incurs significant non-cash charges for depreciation that may not be indicative of the Company's ability to generate cash flow. EXL non-GAAP financial measures exclude, where applicable, stock-based compensation expense, amortization of acquisition-related intangible assets, provision for litigation matters, effects of termination of leases, certain defined social security contributions, allowance for certain material expected credit losses, other acquisition-related expenses or benefits and effect of any non-recurring tax adjustments. Acquisition-related expenses or benefits include, changes in the fair value of contingent consideration, external deal costs, integration expenses, direct and incremental travel costs and non-recurring benefits or losses. Our adjusted net income and adjusted diluted EPS also excludes the effects of income tax on the above pre-tax items, as applicable. The effects of income tax of each item is calculated by applying the statutory rate of the local tax regulations in the jurisdiction in which the item was incurred. A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and exclude costs that are recurring, namely stock-based compensation and amortization of acquisition-related intangible assets. EXL compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures. EXL's primary exchange rate exposure is with the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand. The average exchange rate of the U.S. dollar against the Indian rupee increased from 83.12 during the quarter ended March 31, 2024 to 86.52 during the quarter ended March 31, 2025, representing a depreciation of 4.1% against the U.S. dollar. The average exchange rate of the U.S. dollar against the Philippine peso increased from 56.24 during the quarter ended March 31, 2024 to 57.86 during the quarter ended March 31, 2025, representing a depreciation of 2.9% against the U.S. dollar. The average exchange rate of the U.K. pound sterling against the U.S. dollar decreased from 1.27 during the quarter ended March 31, 2024 to 1.26 during the quarter ended March 31, 2025, representing a depreciation of 0.1% against the U.S. dollar. The average exchange rate of the U.S. dollar against the South African rand decreased from 18.96 during the quarter ended March 31, 2024 to 18.49 during the quarter ended March 31, 2025, representing an appreciation of 2.5% against the U.S. dollar. The following table shows the reconciliation of these non-GAAP financial measures for the three months ended March 31, 2025 and March 31, 2024, and the three months ended December 31, 2024: Reconciliation of Adjusted Operating Income and Adjusted EBITDA (Amounts in thousands) Three months ended March 31, December 31, 2025 2024 2024 Net Income (GAAP) $ 66,561 $ 48,763 $ 50,672 add: Income tax expense 13,496 13,753 19,850 add/(subtract): Foreign exchange gain, net, interest expense, gain/(loss) from equity-method investment and other income/(loss), net (1,642 ) (992 ) 720 Income from operations (GAAP) $ 78,415 $ 61,524 $ 71,242 add: Stock-based compensation expense 19,187 17,852 15,479 add: Amortization of acquisition-related intangibles 3,246 3,080 4,024 Adjusted operating income (Non-GAAP) $ 100,848 $ 82,456 $ 90,745 Adjusted operating income margin as a % of Revenue (Non-GAAP) 20.1 % 18.9 % 18.8 % add: Depreciation on long-lived assets 10,311 9,266 12,140 Adjusted EBITDA (Non-GAAP) $ 111,159 $ 91,722 $ 102,885 Adjusted EBITDA margin as a % of revenue (Non-GAAP) 22.2 % 21.0 % 21.4 % Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share (Amounts in thousands, except per share data) Three months ended March 31, December 31, 2025 2024 2024 Net income (GAAP) $ 66,561 $ 48,763 $ 50,672 add: Stock-based compensation expense 19,187 17,852 15,479 add: Amortization of acquisition-related intangibles 3,246 3,080 4,024 add/(subtract): Changes in fair value of contingent consideration — (589 ) — add/(subtract): Other tax expense/(benefits) (a) — 151 3,860 subtract: Tax impact on stock-based compensation expense (b) (9,105 ) (5,358 ) (1,769 ) subtract: Tax impact on amortization of acquisition-related intangibles (799 ) (766 ) (921 ) Adjusted net income (Non-GAAP) $ 79,090 $ 63,133 $ 71,345 Adjusted diluted earnings per share (Non-GAAP) $ 0.48 $ 0.38 $ 0.44 (a) To exclude other tax expenses/(benefits), primarily related to certain deferred tax assets and liabilities. (b) Tax impact includes $14,526 and $7,523 during the three months ended March 31, 2025 and 2024 respectively, and $500 during the three months ended December 31, 2024, related to discrete benefit recognized in income tax expense in accordance with ASU No. 2016-09, Compensation - Stock Compensation. Contacts:Investor RelationsJohn KristoffVice President, Investor Relations+1 212 209 4613ir@ Media - USKeith LittleAssistant Vice President, Media Relations+1 703 598 0980 This press release was published by a CLEAR® Verified in to access your portfolio
