EXL Reports 2016 Second Quarter Results

Thursday, July 28, 2016
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2016 Second Quarter Revenues of $170.5 Million, up 9.5% year over year
Diluted EPS (GAAP) of $0.47, up from $0.35 in Q2 of 2015
Adjusted Diluted EPS (Non-GAAP) of $0.55, up from $0.48 in Q2 of 2015

New York, July 28, 2016 (GLOBE NEWSWIRE) — ExlService Holdings, Inc.(NASDAQ:EXLS), a leading provider of operations management and analytics services, today announced its financial results for the quarter ended June 30, 2016.

Rohit Kapoor, Vice Chairman and CEO, commented, “EXL achieved strong second quarter results led by Healthcare and Banking & Financial Services through new strategic deal wins and the expansion of existing client relationships.

“Growth remains strong in both of our business segments; Analytics continued its momentum with 30% year-over-year growth as clients across our verticals continue to leverage our insights and proven proprietary models to grow revenue, manage risk and compliance, identify and mitigate fraud, and improve profitability. In Operations Management, our investments in automation, robotics and digital capabilities continue to be validated in the market.

Earlier this month, we announced the acquisition of Liss Systems Limited, a leader in the digital insurance market in the UK and Europe. Liss strengthens our UK presence and further enhances our solutions and leadership in the insurance domain.”

Vishal Chhibbar, EXL’s CFO, commented, “Our second quarter revenue was $170.5 million, an increase year over year of 11.4% and 1.9% sequentially, in constant currency. Our adjusted diluted EPS was up 14.6% year-over year to $0.55 due to higher revenue and operating leverage. EXL’s balance sheet remains strong with cash and short-term investments of $201 million.

“We have updated our revenue guidance for 2016 to $691 million – $703 million, which represents annual revenue growth of 12-14% on a constant currency basis, from $694 million – $706 million to reflect primarily the impact of currency movements in the second half of the year. Our adjusted diluted EPS guidance for 2016 is unchanged.”

Financial Highlights: Second Quarter 2016
Our business is divided into two reporting segments: Operations Management and Analytics. Reconciliations of adjusted (non-GAAP) financial measures to GAAP measures are included at the end of this release.

  • Revenues increased to $170.5 million compared to $155.6 million, up 9.5% (11.4% on a constant currency basis) from the second quarter of 2015 and up 2.1% sequentially from the quarter ended March 31, 2016.
    • Operations Management revenues increased 4.7% to $130.9 million (6.6% on a constant currency basis) compared to $125.0 million in the second quarter of 2015 and increased 2.2% sequentially from the quarter ended March 31, 2016.
    • Analytics revenues increased 29.6% to $39.6 million (31.2% on a constant currency basis) compared to $30.6 million in the second quarter of 2015, and increased 1.7% sequentially from the quarter ended March 31, 2016.
  • Operating income margin for the quarter ended June 30, 2016 was 9.5% compared to 9.8% in the second quarter of 2015 and 9.8% for the quarter ended March 31, 2016. Adjusted operating income margin was 13.7% compared to 13.9% in the second quarter of 2015 and 15.0% for the quarter ended March 31, 2016.
  • Diluted earnings per share for the quarter ended June 30, 2016 was $0.47 compared to $0.35 in the second quarter of 2015 and $0.40 for the quarter ended March 31, 2016. Adjusted diluted earnings per share was $0.55 compared to $0.48 in the second quarter of 2015 and $0.56 for the quarter ended March 31, 2016.

Business Highlights: Second Quarter 2016

  • Acquired Liss Systems Limited on July 1, a London-based provider of digital customer acquisition and policy administration solutions for the insurance industry.
  • Won 7 new clients, consisting of 2 new clients in Operations Management and 5 new clients in Analytics.
  • Achieved highest “Leader” and “Star Performer” in Everest Group’s “Property and Casualty Insurance BPO – Service Provider Landscape with PEAK Matrix™ Assessment 2016”.
  • Named in the “Winner’s Circle” in “HfS Blueprint: Finance As-a-Service 2016”.
  • Positioned as a “Leader” and “Star Performer” in Everest Group’s “Analytics Business Process Services (BPS) – Service Provider Landscape with PEAK Matrix™ Assessment 2016”.
  • Expanded multiple Operations Management relationships, including migrating 53 new processes.

2016 Guidance

Based on current visibility and an Indian rupee to U.S. dollar exchange rate of 67.5, British Pound to U.S. Dollar exchange rate at 1.32, the Philippine Peso to U.S. Dollar exchange rate of 47.0 and all other currencies at current exchange rates, the Company is providing the following guidance for the calendar year 2016:

  • Revenues of $691 million to $703 million, representing annual revenue growth 12% to 14% on a constant currency basis year-over-year.
  • Adjusted diluted earnings per share of $2.25 to $2.35, representing an increase of 11% to 16% year-over-year.

Conference Call

ExlService Holdings, Inc. will host a conference call on Thursday, July 28, 2016 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 helps businesses enhance growth and profitability in the face of relentless competition and continuous disruption. Using our proprietary award-winning Business EXLerator Framework™, which integrates analytics, automation, benchmarking, BPO, consulting, industry best practices and technology platforms, EXL looks 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 24,000 professionals in locations throughout the United States, Europe, Asia (primarily India and Philippines), Latin 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 the 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