EXL Reports 2021 Fourth Quarter, Issues 2022 Guidance and Updates Its Medium Term Financial TargetsThursday, February 24, 2022
2021 Fourth Quarter Revenues of $295.5 Million, up 18.7% year-over-year
Q4 Diluted EPS (GAAP) of $0.83, down from $0.94 in Q4 of 2020
Q4 Adjusted Diluted EPS (Non-GAAP) (1) of $1.21, up from $1.14 in Q4 of 2020
2021 Revenues of $1.12 Billion, up 17.1% year-over-year
2021 Diluted EPS (GAAP) of $3.35, up from $2.59 in 2020
2021 Adjusted Diluted EPS (Non-GAAP) (1) of $4.83, up from $3.53 in 2020
New York, NY – February 24, 2022 - ExlService Holdings, Inc. (NASDAQ: EXLS), a leading data analytics and digital operations and solutions company, today announced its financial results for the quarter and full year ended December 31, 2021.
Rohit Kapoor, Vice Chairman and Chief Executive Officer, said, “EXL had a strong fourth quarter of 2021 with revenue of $295.5 million and full year revenue of $1.12 billion. Our adjusted diluted EPS for the year was $4.83, a 37% increase. This was a pivotal year for us, not just from a revenue growth perspective, but also in terms of the evolution of our business into a data analytics and digital operations and solutions company. Our focus on high value, strategic initiatives that leverage our expertise in advanced analytics, AI (artificial intelligence), digital and cloud has helped us win significant new contracts and expand our relationships with existing clients. As we enter fiscal 2022, we see a strong pipeline across our business lines.”
Maurizio Nicolelli, Chief Financial Officer, said, “We ended 2021 with solid momentum in our business and a healthy balance sheet. Our guidance for 2022 revenue is in the range of $1.28 billion to $1.31 billion, representing a 14% to 17% increase year-over-year on a reported basis and 11% to 13% on an organic constant currency basis. We expect adjusted diluted EPS to be in the range of $5.35 to $5.60, representing a 11% to 16% increase over the prior year.
“We are also updating our medium term financial targets from our Investor Day in November 2020. We now expect annual organic constant currency revenue growth of 11% to 13%, an increase of approximately 200 basis points from the midpoint of our previous target of 10% or more. We expect Analytics revenue to grow in the range of 15% to 20% per annum and digital operations and solutions revenue to grow by 7% to 9% per annum. We are also increasing our annual adjusted operating income margin target to be in the range of 17% to 18%, an increase of 100 basis points from our prior target of 16% to 17%. ”
1. 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: Fourth Quarter 2021
- Revenues for the quarter ended December 31, 2021 increased to $295.5 million compared to $249.0 million for the fourth quarter of 2020, an increase of 18.7% on a reported basis and 18.8% on a constant currency basis from the fourth quarter of 2020. Revenues increased by 1.8% sequentially on a reported basis and 1.9% on a constant currency basis, from the third quarter of 2021.
- Operating income margin for the quarter ended December 31, 2021 was 12.2%, compared to 15.4% for the fourth quarter of 2020 and 14.6% for the third quarter of 2021. Adjusted operating income margin for the quarter ended December 31, 2021 was 17.0% compared to 19.7% for the fourth quarter of 2020 and 19.4% for the third quarter of 2021.
- Diluted earnings per share for the quarter ended December 31, 2021 was $0.83 compared to $0.94 for the fourth quarter of 2020 and $0.77 for the third quarter of 2021. Adjusted diluted earnings per share for the quarter ended December 31, 2021 was $1.21 compared to $1.14 for the fourth quarter of 2020 and $1.30 for the third quarter of 2021.
Financial Highlights: Full Year 2021
- Revenues for the year ended December 31, 2021 increased to $1.12 billion compared to $958.4 million for the year ended December 31, 2020, an increase of 17.1% on a reported basis and 16.5% on a constant currency basis.
- Operating income margin for the year ended December 31, 2021 was 13.9% compared to 11.5% for the year ended December 31, 2020. Adjusted operating income margin for the year ended December 31, 2021 was 18.6% compared to 15.9% for the year ended December 31, 2020.
- Diluted earnings per share for the year ended December 31, 2021 was $3.35 compared to $2.59 for the year ended December 31, 2020. Adjusted diluted earnings per share for the year ended December 31, 2021 was $4.83 compared to $3.53 for the year ended December 31, 2020.
Business Highlights: Fourth Quarter 2021
- Acquired Clairvoyant, a global data, AI, and cloud services firm.
- Won 18 new clients in the fourth quarter of 2021, with nine each in our digital operations and solutions business and analytics. For the year, we won 58 new clients, with 28 in our digital operations and solutions business and 30 in analytics.
- Board authorization of new $300 million stock repurchase program effective January 1, 2022.
- Published our second annual Sustainability Report.
- Named to Newsweek’s 2022 list of America’s Most Responsible Companies.
- Positioned in the Winners Circle in the HFS Research’s 2021 OneOffice™ Services Top 10 for Data and Decisions, with the top score for the Voice of the Customer.
- Named a Top Performer in the 2021 KLAS Risk Adjustment & Analytics Performance Report.
- Positioned as Leader and Star Performer in the Everest Group Life and Pensions Insurance BPS/TPA PEAK Matrix® Assessment 2022.
- Recognized as a Leader in all four categories in the ISG Provider Lens™ for Digital Finance and Accounting Outsourcing Services.
Based on current visibility, and a U.S. Dollar to Indian Rupee exchange rate of 75.0, British Pound to U.S. Dollar exchange rate of 1.37, U.S. Dollar to the Philippine Peso exchange rate of 51.0 and all other currencies at current exchange rates, we are providing the following guidance for the full year 2022:
- Revenue of $1.28 billion to $1.31 billion, representing an increase of 14% to 17% on a reported basis, which includes $40 million to $45 million of revenue from Clairvoyant, and 11% to 13% on an organic constant currency basis, from 2021.
- Adjusted diluted earnings per share of $5.35 to $5.60, representing an increase of 11% to 16% from 2021.
Medium Term Financial Targets
We are providing the following medium term financial targets:
- Annual organic constant currency revenue growth of 11% to 13%.
- Annual Analytics revenue growth of 15% to 20% and digital operations and solutions revenue growth of 7% to 9%.
- Annual adjusted operating income margin to be in the range of 17% to 18%.
ExlService Holdings, Inc. will host a conference call on Thursday, February 24, 2022 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 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 for a period of twelve months.
About ExlService Holdings, Inc.
EXL (NASDAQ: EXLS) is a leading data analytics and digital operations and solutions company that partners with clients to improve business outcomes and unlock growth. By bringing together deep domain expertise with robust data, powerful analytics, cloud, artificial intelligence (“AI”) and machine learning (“ML”), we create agile, scalable solutions and execute complex operations for the world’s leading corporations in industries including insurance, healthcare, banking and financial services, media, and retail, among others. Focused on driving faster decision-making and transforming operating models, EXL was founded on the core values of innovation, collaboration, excellence, integrity and respect. Headquartered in New York, our team is over 37,400 strong, with more than 50 offices spanning six continents. For more information, visit www.exlservice.com.
Cautionary 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, which include our ability to successfully close and integrate strategic acquisitions, our ability to respond to and manage public health crises, including the outbreak and continued effects of COVID-19, are discussed in more detail in EXL’s filings with the Securities and Exchange Commission, including EXL’s Annual Report on Form 10-K. 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