EXL Reports 2016 Fourth Quarter and Full Year Results

Tuesday, February 28, 2017
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2016 Fourth Quarter Revenues of $177.3 Million, up 6.9% year over year

4Q Diluted EPS (GAAP) of $0.45, up from $0.43 in Q4 of 2015

4Q Adjusted Diluted EPS (Non-GAAP) of $0.61, up from $0.56 in Q4 of 2015

2016 Revenues of $686.0 Million, up 9.1% year over year

2016 Diluted EPS (GAAP) of $1.79, up from $1.51 in 2015

2016 Adjusted Diluted EPS (Non-GAAP) of $2.33, up from $2.03 in 2015

NEW YORK, Feb. 28, 2017 (GLOBE NEWSWIRE) — ExlService Holdings, Inc.(NASDAQ:EXLS), a leading operations management and analytics company, today announced its financial results for the quarter ended December 31, 2016 and the full year 2016.

Rohit Kapoor, Vice Chairman and CEO, commented, “Our fourth quarter 2016 revenues beat expectations, and for the full year 2016 revenues increased 9.1% year over year or 10.9% in constant currency (non-GAAP) to $686.0 million. We achieved an 18.4% increase in diluted EPS to $1.79 and a 14.8% increase in adjusted diluted EPS to $2.33 for the full year 2016. Our revenues growth this year was led by our Analytics segment which grew 35.7% for the full year. Our Operations Management segment revenues growth was 2.7% for the full year driven by new and existing clients offset by weakness in our consulting business.

“Our growth was broad-based, the result of our driving superior customer experiences and our investments in automation and robotics including the Business EXLerator Framework™. The integrated selling of our business process management and analytics solutions continues to strengthen our competitive positioning with our clients and prospects. Our three acquisitions in 2016 have been assimilated and are performing at or above expectations. I believe our market position is strong, and we have great momentum to execute our growth plans in 2017.”

Vishal Chhibbar, CFO, commented, “In 2016, we generated $100.3 million of cash flow from operations and ended the year with $226.6 million in cash and short term investments. For 2017, we are providing revenue guidance of $735 million to $760 million, representing annual revenue growth of 8% to11% in constant currency. Our adjusted diluted earnings per share guidance is $2.50 to $2.60, representing an increase of 7% to 12%.”

Financial Highlights: Fourth Quarter 2016
We have two reportable segments: Operations Management and Analytics. Reconciliations of adjusted (non-GAAP) financial measures, including those reflecting constant currency, to GAAP measures are included at the end of this release.

  • Revenues for the quarter ended December 31, 2016 increased to $177.3 million compared to $165.9 million for the fourth quarter of 2015, up 6.9% (8.4% on a constant currency basis) from the fourth quarter of 2015 and up 3.5% sequentially from the quarter ended September 30, 2016.
    • Operations Management revenues in the fourth quarter of 2016 increased 1.8% to $131.8 million compared to $129.4 million in the fourth quarter of 2015 and increased 1.7% sequentially from the quarter ended September 30, 2016.
    • Analytics revenues in the fourth quarter of 2016 increased 24.9% to $45.5 million compared to $36.5 million in the fourth quarter of 2015, and increased 9.3% sequentially from the quarter ended September 30, 2016.
  • Operating income margin for the quarter ended December 31, 2016 was 8.0% compared to 10.8% in the fourth quarter of 2015 and 10.1% for the quarter ended September 30, 2016. Adjusted operating income margin was 12.9% compared to 14.7% in the fourth quarter of 2015 and 14.4% for the quarter ended September 30, 2016.
  • Diluted earnings per share for the quarter ended December 31, 2016 was $0.45 compared to $0.43 in the fourth quarter of 2015 and $0.46 for the quarter ended September 30, 2016. Adjusted diluted earnings per share was $0.61 compared to $0.56 in the fourth quarter of 2015 and $0.61 for the quarter ended September 30, 2016.

Financial Highlights: Full Year 2016

  • Revenues for the year ended December 31, 2016 increased 9.1% to $686.0 million compared to $628.5 million for the year ended December 31, 2015.
    • Operations Management revenues for the year ended December 31, 2016 increased 2.7% to $520.3 million compared to $506.3 million for the year ended December 31, 2015.
    • Analytics revenues for the year ended December 31, 2016 increased 35.7% to $165.7 million compared to $122.2 million for the year ended December 31, 2015.
  • Operating income margin for the year ended December 31, 2016 was 9.4% compared to 10.7% for the year ended December 31, 2015. Adjusted operating income margin for the year ended December 31, 2016 was 14.0% compared to 14.9% for the year ended December 31, 2015.
  • Diluted earnings per share for the year ended December 31, 2016 was $1.79 compared to $1.51 for the year ended December 31, 2015. Adjusted diluted earnings per share for the year ended December 31, 2016 was $2.33 compared to $2.03 for the year ended December 31, 2015.

Business Highlights: Fourth Quarter 2016

  • Acquired Datasource Consulting, LLC, a provider of enterprise management and business intelligence solutions.
  • Won 13 new clients, consisting of 6 new clients in Operations Management and 7 new clients in Analytics. For the full year, we won 40 new clients, 21 in Operations Management and 19 in Analytics.
  • Announced the appointment of Nagaraja Srivatsan as the Company’s EVP, Chief Growth Officer.
  • Positioned as a Leader in the “IDC MarketScape: Worldwide Business Analytics BPO Services 2016 Vendor Assessment.”
  • Included in both the HfS Research “2016 RPA Premier League Table” and “HfS Blueprint Report: Intelligent Automation 2016.”
  • Positioned as a High Performer in the “HfS Blueprint Report: Digital Marketing Operations 2016.”
  • Expanded multiple Operations Management relationships, including migrating 61 new processes. For the full year we migrated 213 processes.

Share Repurchase

Today, we announced that our Board of Directors authorized an additional $100 million common stock repurchase program, effective immediately. The approval increases the 2017 authorization from $20 million to $40 million and authorizes stock repurchases of up to $40 million in 2018 and 2019. The shares may be purchased through December 31, 2019 by the Company on the open market and through private transactions as determined by EXL’s management.

2017 Guidance

Based on current visibility and a U.S. Dollar to Indian rupee exchange rate of 67.0, British Pound to U.S. Dollar exchange rate at 1.25, U.S. Dollar to the Philippine Peso exchange rate of 50.0 and all other currencies at current exchange rates, the Company is providing the following guidance for the calendar year 2017:

  • Revenues of $735 million to $760 million, representing an annual revenue growth of 8% to 11% on a constant currency basis.
  • Adjusted diluted earnings per share of $2.50 to $2.60, representing an annual increase of 7% to 12%.

Conference Call

ExlService Holdings, Inc. will host a conference call on Tuesday, February 28, 2017 at 8:00 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 ir.exlservice.com, 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.

To listen to the conference call via phone, please dial 1-877-303-6384, or if dialing internationally, 1-224-357-2191 and an operator will assist you. For those who cannot access the live broadcast, a replay will be available on the EXL website ir.exlservice.com.

About ExlService Holdings, Inc.

EXL (NASDAQ:EXLS) is a leading operations management and analytics company that designs and enables agile, customer-centric operating models to help clients improve their revenue growth and profitability. Our delivery model provides market-leading business outcomes using EXL’s proprietary Business EXLerator Framework™, cutting-edge analytics, digital transformation and domain expertise. At EXL, we look deeper to help companies improve global operations, enhance data-driven insights, increase customer satisfaction, and manage risk and compliance. EXL serves the insurance, healthcare, banking and financial services, utilities, travel, transportation and logistics industries. Headquartered in New York, New York, EXL has more than 26,000 professionals in locations throughout the United States, Europe, Asia (primarily India and Philippines), South America, Australia and South Africa. For more information, visit www.exlservice.com.

Continuing Statement Regarding Forward-Looking Statements This press release contains forward-looking statements. 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 are discussed in more detail in EXL’s filings with the Securities and Exchange Commission, including EXL’s Annual Report on Form 10-K for the year ended December 31, 2015. These risks could cause actual results to differ materially from those implied by forward-looking statements in this release. 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 federal securities laws.

For a full view of EXL’s financial tables, click here