EXLS - Earnings call transcript Q1 2018 | ExlService Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the EXL's First Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time.

As a reminder, today's conference may be recorded. I'd now like to turn the call over to Mr. Barlow. Steve begin. may you Sir,

Steven N. Barlow

us you, and first Victor. EXL's I'm the SCIO everyone joining Officer. and Relations. thanks Barlow, Kapoor, quarter hope our York, our two had release press review releases the We first section Vice Chhibbar, our an was Hello quarter our XXXX this issued acquisition our and We've Investor Chairman you've second our With Investor that the of first of in call. Executive updated the website. morning, Vice earnings to of in and financial Fact was New EXL's Rohit Health Officer; for Chief opportunity we announcement President Thank Sheet today Investor Vishal results Relations Steve Financial also conference to the Analytics. of Chief

are not set in the general to matters risks of the implied from these Commission mind in know, differ unknown call. and by press EXL no economic are the call limited you conditions, those Such and time. statements cause assumes could such materially in uncertainties forth forward-looking filed we'll in As and information those keep obligation conference from company's forward-looking. risks or update that Securities results expressed actual are release, factors discussed other reports and this that Exchange and to, today's discuss to periodic presented documents but uncertainties the known include, with time on Please to statements. some this to subject

over Reconciliation be on Fact Rohit Rohit? as as Kapoor, provide Chief we Officer. non-GAAP certain to our press call financial now GAAP useful EXL's to Investor can During which, found our call reference measures may the I'll information the investors. for these today, turn Executive believe, release Sheet. well of we measures

Rohit Kapoor

year for on year-on-year and reported adjusted $XXX been Good quarter, first exciting EXL. Steve. basis, the we morning, everyone, representing reported It and has In first revenues $X.XX. welcome growth an XX.X% earnings start a XXXX our an call. the to you, of to of Thank quarter EPS million,

driven existing from from we year. for This confidence growth clients gives in Our and large expansions outlook our us deals year. last the was ramp-ups won that by

I'm results the more excited SCIO and share two, quarter, of our While a I'm impact that Health first on Analytics. happy on bold positioning the trajectory; strategy EXL's will business with for acquisition moves future even deep to two and have one, the digital;

the have have all you're the digital. been investments As aware, met. not been hype on marches strategies world digital made, consumed is the promise deployed, digital digital Yet, Digital with is of relentlessly.

intelligence. data driving market outcomes. past intelligence What intelligence creating call months the extensively focus to been the We digital Many on Digital what working what competitors why intelligence? and missing is case is of few believe in this business is Digital what about context, intersection our data. and orchestration context, domain of technology. and can about digital have is be over been the the has done identify that differently. We we and is

focused domain. competitors advanced as on Some are of our analytics, are but not in solely

starts Successful and coordinated about together in delivering partnerships, new Without a with bringing implementation. teams of format, about digital right digital not deliver create heritage and focused domain and of requires digital orchestration. in leadership creation implementation context. on in to the multiple outcomes implementation the the with intelligence leading market in and technology will technologies, not transformation digital Digital digital Our in Digital successful helps us context success. analytics, any intelligence intersection business is building these leveraging domain orchestration outcomes. A of outcome. capability, data the strong coupled critical experienced is combination. with hone our optimal of to The harnessing is

in analytics us outcomes. working to our in and and commit clients our chain deliver strength positions the complete value Our across of experience

our digital for of we have Framework, As delivered Across client and including largest innovative truly has our our Analytics. clear what intelligence SCIO integrated to clients. SCIO's acquisition broad-basing about intelligence examples deliver our digital for example continue success suite, of intelligence and of of analytics, several delivering flexible Health and digital excited healthcare domain, methodologies orchestration technology actionable tangible history our our data, insights transform innovation delivery in a digital and means the proven our of both EXL use invest clients, data are labs, we our platforms. for EXLerator SCIO part represents data real technologies is A implementation the digital of acquisition digital digital industries, and where all the results. in our solutions we digital of into building proprietary outcomes. and it

eliminate extremely First, paid an area Payment of to than in acquisition this expand capabilities will more health fraud, each integrity for accounts abuse, and healthcare $XXX year. suite waste important our which solutions plans for is a billion by the industry.

management value-based historically for enterprise and Second, fragmented margins revenue SCIO's hindered capabilities solutions. at which manage cost been broader into extend increasingly beyond is and by payment payments. healthcare helps clients to data isolated an towards analytic and cost-related moving SCIO domain addresses important revenue By SCIO functions an clinical combining capabilities, analytics. level, industry integrity management and that have

will to has industry scale. optimization clinicians centers Third, ability risk new our SCIO's and well combined the to provides to significantly scientists X,XXX base and meet both the of health solutions be insurers the risk-bearing clinical of SCIO multiple management to in combining proposition team client our other our points our health powerful the same and our end-to-end Together, entities. needs value buying enable that time, cost cost at our and global new to focus. and entry for across and aligns care worldwide X,XXX-plus At talented applied us us with analytics Fourth, strategic account within synergies a revenue professionals potential and innovation clients. X,XXX-plus recovery, firms strong leading of analytics increases data verticals. clients into develop population combined management SCIO has management

entrepreneurial a business alignment is factors to with spirit by speed and In will strength opportunities an our companies. cultural there rapidly and exploit both success market environment, critical strong inherent we this Finally, are of and continue changing flexibility today's shared ours.

comprehensive better of Integrated Our us Adding EXL's contain acquisition enables of and as intersection SCIO solution well Health costs build position Integrating healthcare the Integrated integrity and a existing analytics. existing at improve payment into I'd outcomes. as With health Health the analytics behavioral acquisitions, algorithms to and solidify to our capabilities which on of proprietary more capabilities, revenue. care member domain end-to-end SCIO's improve to our network SCIO we a positions end and around us our to predictive management to deepened with our digital and our strategy. like both comment capabilities, have pipeline. amplifies intelligence data our management expertise

solid Healthcare, of already areas very and into has to pipeline & Finance was Analytics. large and opportunities in Our continued our the of months, in key coming mature XXXX Accounting, Insurance, few particularly past

clients. We to several large next expect new some sign deals the quarters over from

Our for large has influenced a addition already from U.S.-based of Health us. deal win Integrated clinicians

our engaging our through in are We organization. customers discussions Consulting also digital transformation strategically

Consulting robust. launched for a approach EXL. quarter-over-quarter the we powerful for Our in been now the extremely digital differentiated have this has pipeline exciting to start conclude, past In intelligence, and To year shown sharply has growth an Consulting is two and our digital. quarters business of

will market to large solve our continue and that turn factors. organically I talent in where deals the to invest to and Vishal. acquisitions the that, We and domain solutions over combine clients' biggest in data end-to-end see challenges, through our call technology expertise winning to continue and are our we With

Vishal Chhibbar

Thank thanks, year-over-year updated quarter basis. quarter up $XXX performance like XXXX for everyone, providing the first We to million, us XX.X% or of revenues had a guidance. strong followed for you, into a by on with our of insight would Rohit, joining this by I XX.X% and constant-currency morning. financial start

growth continues sequential basis to a basis. with or a X.X% reported highest Our in on XX of constant-currency growth rate last on X.X% quarters the accelerate

defined revenues XX.X% constant on million. to quarter, excluding year-over-year business, Management basis a our Analytics, from currency XX.X% or the five reportable For Operations grew segments as by $XXX.X

driven business XXXX, Analytics driven basis. All from increased XX.X% XX.X% grew XXXX driven by currency the with growth in of This was & double-digit its existing by performance and XX on wins XX.X% XXXX Our grew and Analytics basis, on Insurance double-digit Healthcare driven growth & was in a by segments basis, a on deal a Retail. growth XX.X% growth quarter. X.X%. on growth continued with Accounting revenues Integrated. wins constant momentum and Accounting Health sectors. continued in X.X%. or Operations expansion large X.X% of growth the last year-over-year Sequentially, up Management backed of rate momentum grew up clients Finance XXXX Health clients Other Integrated, Management Finance of driven $XX.X Consulting. on was $X.X The a basis. primarily year-over-year ramp This of million, L&A contributed was with a a BFS, to million grew Insurance, for in basis. from year-over-year its and year-over-year segments growth by Healthcare its in Sequentially, by clients. growth a from existing the both P&C year-over-year ramp-up Operations XX.X% strong This by which and our by revenues highest continues quarters. expansion

improve year-over-year, $XX,XXX to up per revenue Our to continues annum. X.X% per employee

SG&A our expenses. to moving Now, on

XX.X% investments XXX This a lawsuit in lawsuit which by earlier. the advanced of points as million, of robotics, basis of numbers XXX my one-time XX XXX recorded operating XX technologies, points, and is for margin basis Adjusted the basis remarks impact by increased and excluded year-over-year. non-GAAP for quarter mentioned of year-over-year basis points, XX which points and to we of quarter, platform calculating mentioned higher Integrated bps was the We subsequently a of offset SG&A $X.X decline of while digital achieved charge operating settlement basis was points leverage, XX.X%, automation revenues. Health impact of in quarter.

points XX as adjusted of quarter, incremental operating investments basis by mentioned of XX.X%, Excluding dilutive operating Health by of Integrated, impact driven for earlier. the our Sequentially, excluding basis year-over-year, of points by the margins a XXX basis digital margins were Health driven adjusted improved anticipated the points, leverage. Integrated operating areas, in impact XXX our decline

EBITDA quarter adjusted $XX.X was Our million. the for

of impact which on in recorded to compensation XXXX the the quarter excise certain was quarter. Our provisional tax transition benefit discrete stock for rate XX.X%, negative tax tax one-time adjustment a and this namely, items, includes recognized the

is Excluding discrete rate tax in our items, expectations. line these with our normalized XX%,

Our adjusted of diluted of $X.XX. from in Integrated was EPS was $X.XX, impact QX net Health $X.XX XXXX. The up a X.X% loss

EPS the XX.X% year-over-year. our of impact was $X.XX, up diluted Integrated, Health Excluding adjusted dilutive

at looking Now, other metrics. financial

QX. an the days, of day Our X XX improvement was quarter DSO for from

During the quarter, $XX and share we spent $XX.X on on repurchases expenditure. million capital million

cash of on short-term investments million Our and March balance XXXX. million in XX, $XXX sheet remains credit a on as $XX facility strong with drawn

Now, for moving to our guidance XXXX.

business We are revenues increasing for and $XXX of to updating XX% at We the to by lower constant increase of This a on between guidance unchanged $XXX strong unchanged our range. year to X% across Other be adjusted verticals. from the basis. expect EPS the million prior revenue these QX of year $X.XX. aspects our for to Based growth a guidance factors, a remain million visibility remains our $X.XX reflect the on to now represents diluted end currency guidance guidance.

of not Our acquisition. SCIO impact the guidance does include

in costs, In terms revenue to acquisition-related QX, adjusted investments increments, to and annual Integrated. continued wage continued diluted for and we EPS digital due be sequential in flattish investment expect transformation, of quarterly Health trend growth

As SCIO of close other including three we're in part regulatory is have and The customary the to subject to Rohit closing months, acquisition expected mentioned, next fulfillment EXL. certain as conditions, to a consents. of excited

XXXX guidance closing. our We update expect for to post

drawn. the fund which The $XXX our drawing has to cash been hand facility. million current million facility $XXX acquisition on $XX million, expect We credit and is of using down of

and $XXX In revenues diluted generated of of We million $XXX achieved us In for XX.X% conclusion, growth on capacity reported unused of QX a adjusted million. milestone quarter. revenue million achievement with addition, a it has X.X% an an giving the in accordion a growth. basis $XXX strong EPS we had year-over-year feature over of

would that year. Our to of strong XXXX Thank be our be visibility happy further will confidence questions. addition long-term will growth I you. SCIO And your us support initiative. now, take and gives revenue The Rohit

Operator

first Wells line our the Caso will come from Edward And from of Fargo. question

begin. may You

Edward S. Caso

revenue morning. acquisition, Can accretion to some not? size, provide Good latest or of expectations you Thanks. your framework

Rohit Kapoor

Ed. Yeah. Good morning,

just for So, to our we're perspective really about And profile excited scale on size, SCIO. a and of $XX acquisition of SCIO the approximately million. SCIO, everybody XXXX give was the revenue

numbers. unaudited a these are However, these final numbers are audit subject and to

and SCIO. we XXXX don't acquisition In of the we beyond. our We accretive fact be because to and completed expect of the impact company acquisition the three to expect the months in have integration SCIO that any next to be in because expenses, XXXX, of the EPS will

we scale and to to growth our rate profitability, to growth In profitability and long-term to contribute terms mid- of it and gains the do in SCIO size. positively expect as our

So, of acquiring scale, for very of sense hopefully, to at be and assets this is time. great this space a we complexion and of company the the good in that this gives size you and a a the attractive and the that bet think this strategic we Analytics. And we are that the of point Healthcare asset think making is

Edward S. Caso

to clients from And willing are you deploy to themselves? My clients automation allow flexibility And is Yeah, in-house their in helpful. just much to model do general, Are other Thank you. it? you losing very more are process it as solutions work robotics they change RPA, with that getting Thanks. automation. how pressure think they pricing question to you can FTEs? around

Rohit Kapoor

Sure.

I and it implementation RPA characterize talent to in RPA, for shift that like certainly providers certainly get to So, that that RPA and is tools and EXL providers market such where certainty execution increase. maintain sustained their general that gets deployed. reason business continues of the than trying relying implementation would created now place and getting is on is on RPA a more model are outcomes, for internally rather and of strategies to robots able do The that execution clients with customers a these available the themselves. there much sure all for taking very that the to the as resources heavily there engagement is EXL the that's third-party be making are the business pool on and the topical by manage, days

we in where is, business organization, new and a for We existing clients continue on in that automation. allows take the and our two businesses seeing opportunities increased is advisory therefore, we of do our not play think us for and is that process we to in a because for winning RPA maintain end-to-end creates help play in the entire demand the company. robotic much clients, but wider for to an the positive chain are we automation, clients Consulting us as processes and environment We landscape marketplace our a expands value increase with So, our execute we the with it the that engagements Management. And this part and were robotic for that significantly in our and our allows actually of one Operations our buckets; our us, RPA; on role business to implement and to net second business us think process managing only the clients. in are

Edward S. Caso

you. Thank

Operator

the from comes question Ashwin Citi. next our line Shirvaikar from And

You may begin.

Ashwin Shirvaikar

Thanks. Hi, Hi, Vishal. Rohit.

of revenue costs slower this digital. Integrated the to think making question of should go we I Obviously, And cadence then, of new ramp the of contracts start through the year? you're as like guess also as that. fairly well the and How Health year. in we regards should through think and as is we course significant of earnings the the rest of those first with stuff my investments because So, that of

Rohit Kapoor

Ashwin. Sure,

absolutely you're right. So,

to much, holistically pivot big continued a at our more making out level. significant digital embracing for we are success We and position and a here are making by much investments around fundamental long-term business digital

that capabilities about how positioning shift. which about of articulation the and way we very to intelligence, of are in go our are building digital reflective making going around think we those ourselves think I

in and acquisition that us we're digital, terms make opportunity in that and from make with there's SCIO, for as industry Integrated the on with same Healthcare be existing acquisition to up vertical and Analytics we significant to acquire we along our focus As next provide Apart our have of certainly sure in elements. the of that we refocus dominance business we the another will business as well and Healthcare. our the can the and level profitability and an SCIO, the want sustained three integrity investments business that within building making management, ours. taking that care growth healthcare payment build up shift, both also And also pillars Health those insurance customer capabilities in to the then, on revenue of gearing and are engagement. particularly the we industry want capability to And of in vertical, Healthcare

these good our be to And first Integrated. So, nice. for I than even And make if has are we focused momentum continues the we has continues that about might some revenue by the for quarterly a be the will it it growth Health certainly our building to much, think, us as the profitability worry on this that experience growth quarter, of speed the more mid- for and transition acquisition bumps we look are make that us organization impacted been short-term the in we to long-term quite have. The and XXXX, on take much to shift, at but you revenue impact strong. revenue and been

to to to We which And at continue we to that to of are the a meet the we've can to build beginning confident plan EXL. execute delivered foundation our of able and guidance our our grow fully continue strong being goal year. on is

Vishal Chhibbar

first what earlier to remarks, mentioned we (XX:XX:XX) Rohit, had Health our mentioned we in had add, be dilutive prepared in to my half, that's our we call. just expected as Integrated in and

and improve to the So, margins. implementation our Integrated on positive Health margins help and and actually side, the in year the integration Health on that QX in us exit Integrated will investment platform CareRadius

improved mentioned margins basis XX to we basis of points leverage. the XXX XX the in by points earlier. we've do basis had excluding operating Based to the planned, deliver on Integrated, quarter-on-quarter, Health optimization our and margin have I impact improvement as driven facts these earlier, we our by mentioned profile initiatives cost As the expect points

Ashwin Shirvaikar

is – comfortable things leverage making think inorganic keep an if level Analytics, what and what be of if you then, there conceptually, might of you areas as and to with in both through you And and you eventually us it. and like are just leverage level help balance investments leverage comfortable intention Got like think of Healthcare and sheet organic with? can of sort that,

Rohit Kapoor

think the business, the moderate right Yeah. the we as scale, past, Sure, balance took Ashwin. the strategy In size particularly having leverage us, in you I in B, I for and think leverage Look, is and in our time. for grow because, if a of at was and, it look conservative our very at scale us. that smaller would not that's point and right we the do much sheet, opportunities; use have been of have A, size

capability. profitable to also revenue and our we going after that increases as capabilities, for can that get reason of the actually be that sheet. scale a profitable use SCIO. annuity-based the broader much As clients size of each business business far our greater highly and with flow take acquisitions our today is The more This predictable scale. are are to are to business an is our lot is that the and and of and we largely leverage making are balance our business efficient more optimal an and and grows size confidence amount the And our going in where a we a have year adding cash even acquisition than is,

our and would acquisition, organically right leverage this as path making. inorganically. going see, strategic be the we strategic demonstrated make down So, to bets, as doing for that's we're business our choice can we that are sheet we've well And the to balance those as to you kind willing and frankly, the of asset, growing of continue by

Ashwin Shirvaikar

Got it. the All Thank you. best.

Operator

the Fitzgerald. Thank Foresi Joseph comes you. And from from our next question line of Cantor

You may begin.

Joseph Foresi

and expect deals. drivers those little color the at still margins Are them take-outs moved large these Health give I expand you any that if to on the more deals that a mentioned year. higher. know Integrated, you into wondering of was I expectation? Are think this I could large built you some cost us

Vishal Chhibbar

Hi, Joe. This is Yeah. Vishal.

in productivity our it will productivity acquisition, benefits will Integrated cost think which we drive some which implementation will of combination benefits and I So, delivering be include platform the take-outs. anticipate also Health a the of

uptick, the Secondly, our business Rohit in and I good further increase margin improvement Consulting mentioned are think as there business, that and we our our Analytics improve. profile revenue will

in actually of QX, you see their impact We on do driven As that's and can low utilization our are project-based by in improvement down, Analytics revenue. advanced margins Analytics business hiring business, in profile impact, that their one-time Integrated the be further our being but will half. anticipate Health from margin Consulting add the will positive which the apart also business, second improvement to the

Joseph Foresi

had just the then, we acquisition, sort on them. due relationships And aware made case any assume And Health test of and it. a concentration for should I of? that your any be served Got diligence on overlapping Integrated client a

give you how that us changed? color maybe So, that can any on and Thanks.

Rohit Kapoor

Sure. Yeah.

clients are between are common some which there clients EXL SCIO. and So,

However, that of do combined, are much same correlated that deliver. for confidence takes business the outcomes multiple revenue increase deliver from that us is It's outcome, centers SCIO of work that level centers. the the greater ingesting EXL the smaller capability organization allows they there of data, business clients large because and a deliver to ability terms insights deriving years And size overlap a to and in multiple outcomes. additional to quite combined a the and in mind the managing be clients. us, And in that scale think data, serving client well keep because into of of We these customer. buying to very and in. is it's they for great that with therefore, to business SCIO. strong us SCIO and going that stream we additional opportunity large working coming penetrate able good expand opportunity to wallet the to EXL data of our to business is particularly is It think got a SCIO with a was it these within these the that actually clients, service The is got buying share lines SCIO – runs with for

So, are high the sticky and delivering payments very visibility the outcomes, business the value-based associated the basis got made rate it's a is business very and retention a of a extremely very this on and where business. is high with

we trying business So, is pivot attractive in particularly business it with to that is very on digital that this very and make EXL think outcomes. model the fits well and to focus on

Joseph Foresi

you. Thank

Operator

next Thank from you. Nolan And the line our William question Maggie comes Blair. of from

You may begin.

Maggie Nolan

Hi. integration of margin is upfront going investments Good what morning. and of the any beyond like I'm typical acquisition significant wondering profile kind SCIO the require whether expenses. to those is

Rohit Kapoor

Hi, Yeah. Maggie.

So, as margin SCIO my the profile mentioned over the earlier overall EXL contribute expect in remarks, of to do to positively mid-term. we I

payment that that However, allows but to not work to a to be scale, service there we clients us more structure capability and that SCIO towards at and of investments significantly creating prepay have business shift data that on are integration, us even of unified will side offerings real-time a only has platform terms make making allow with data integrity. also in in the the the

case this into factored making and investments acquisition are these think, be we necessary that of doing right we business is our these for us the the have time SCIO. which, So, and to while are investments,

Maggie Nolan

segment Analytics And acquisition? then aside of recent there set if kind for organic are beyond then, assumptions both Thanks. year to the and any this Okay. you changes too, the your growth

Rohit Kapoor

Yeah.

three the acquisition that the will SCIO is expectation closed our months. So, next get over

business EPS certainly As associated updated with will SCIO providing revenue when margin combination closes, EXL. the the and transaction and provide and both be of reflect guidance we guidance with will that. to we And

Maggie Nolan

organic for the intact XX% segment But, that of that is guidance, kind still Analytics ex-SCIO? Analytics

Rohit Kapoor

Yes. and to think continues that Analytics on as standalone, The opportunity us very be growing is perform well, a should for we do there huge mid-teens, we in Analytics for us think excluding the business SCIO business absolutely. nicely, and that and

Maggie Nolan

Okay. Great. you. Thank

Operator

Bergin line from Bryan our comes And the from of question Cowen. next

begin. You may

Bryan C. Bergin

whether you. then, to you in them. I'm or of morning. that talk just Good SCIO them. developing if curious here bit leverage you're Thank partnered bringing competed from synergy already over about onshore previously And about Can able the some talk U.S.? guys. about Hi, on you you're the resources with had the a little you're

Rohit Kapoor

Sure.

Health hadn't side, at with really interesting competed Integrated. part overlapped So, we SCIO and looked is the that management on SCIO with The had previously. care partnering

of so, a that your and it was strong a the care combination stronger. actually, of gives much to making together with bringing management part combining Integrated capabilities question. There very And us offering Health and second SCIO that

Vishal Chhibbar

Resources you are over. bringing

Rohit Kapoor

yeah. resources, The

So, of has that be to build to the with of the SCIO's pure will well revenue market and very have as EXL. impressed exploit for of opportunities on this amount respect play. therefore, able been we is And that and the in capabilities full we've base talent absolutely incredible And SCIO will continuing a synergy talent us, base be leadership we and the market. be leveraging entire part talent team as the to base SCIO

Bryan C. Bergin

clients about existing Okay. And or curious the mentioned. there clients. the you had new deals then, existing between out relates of behavior large that pursuing? and these large you're outsourcers that to time I'm follow-up talk deals on my Thanks. ones? with Can you Are types first

Rohit Kapoor

Sure.

We and offerings suite leverage us. So, We're that we also carriers and when fair offshoring that And we that Finance outsourcing. a seeing think talk of principally play again, with Insurance. there of strong for come amount Finance seeing that intersection out Insurance, out can the of opportunity time Accounting, & at given insurance becomes for strong We're around is in Accounting, and a there deals, about about in we the first opportunities & large we new leverage. talk deals clients. large

and there. Europe there's just U.S. then, geographically, we tremendous seeing our into So, think and much into of more we UK from And footprint also are also opportunity the Australia. a expand amount

are deals So, that seeing in U.S. mature likely we geographies outside additional the some well. to are as

Bryan C. Bergin

Thanks.

Operator

Thank And of you. Atkins the our next comes from line from Frank question SunTrust.

begin. may You

Frank C. Atkins

taking for questions. my Thanks

color the of can a the up were Insurance particularly the question in on on us strong Following give last little the vertical bit bit, little quarter. you They on margins? a

Vishal Chhibbar

Yeah.

So, past platforms, that build have can I see, businesses, the quarters. in driven the do margin more you improve, the are business the over onshore the profile Insurance margins, integrated several improved by business and/or the all offerings, scale and expect new continue more winning. they to they And have Insurance and scale as size as in the will more

Frank C. Atkins

then, in environment? as you Okay. healthcare, forward That's describe acquisitions And helpful. look how at pipeline that for the we would additional

Rohit Kapoor

of as to companies that right private us now. acquisitions of So, in a doing advantage fit. great I course, I environment looking It right right think financial approach will acquisition for and are the and of is options, very attractive actually for seems it's coming think strategic up and very disciplined the in the at our terms right the time multiple well. more more at be with and market We, strategic cultural take the of like doing

us, there good. M&A three exploring deals elements pipeline we could we we is do those We've additional But, and got as currently in critically be could are think are well. opportunity For do that the we that think important. here several our

Frank C. Atkins

great. very much. you Thank Okay,

Operator

the Thank Tandon Needham you. And our Company. line Mayank next & question comes of from from

begin. may You

Mayank Tandon

on just I Rohit, the you more today. morning. wanted acquisition a announced bit little Good clarification you. that to Thank get

what In terms you profile numbers and least? can margin or growth at share couple trajectory has last been any years profile, their of the the of

Rohit Kapoor

Yeah.

close going the So, full acquisition. share we're details once Mayank, to we

EXL's be said, size than like be and going about growth calendar to is to the of wanted estimate The is EXL business I we which, year of this rough additive $XX now, of are and EXL, additive higher a gross margins million margin to XXXX. give As to profile. will for their

scale. details nicely, that once we profile. and more and It's growing is a share we guidance good close transaction margin significant has So, we and size about this is think the of that But, the a update we'll it our year. business for

Mayank Tandon

after some being offsetting quarter fourth the as highlighted any Understood. the be might there's strength climate, Sure. you called maybe that seeing a had some verticals stronger guidance intact. of of just you maybe Give on then, out key you're question positive than really spots numbers? you if your on that the in obviously, sound And sense soft but any demand. holding us that follow-up you're Rohit, demand

Rohit Kapoor

Sure.

that's taken lower taken in the as we up, well end the our midpoint and environment We as demand the basis that QX, strong of a do of have up see. guidance the on and performance

ability that's larger pipeline, enter seeing and more think and effectively win deals to us, we're what the these larger EXL and deals, of I compete for pronounced. the more is becoming

is the of revenue be thing very in Insurance hitting in bit So, I'd XX% amplify we grow and our you of stream, same our our a if as in at take we strong to seem build a ability little revenue kind component terms on of business, this, that on, us Analytics, are more second getting growing both and Insurance as like in business. EXL's for The stride terms confident true a nicely. business margin well Analytics dimension expansion. our which is A very business, become to growth, of to of over look has portfolio where which to is our also

around the we've that we that need think, all up for SCIO an healthcare in create build push growth, in is However, create business. to and do And that's of the analytics capability third to which a and to opportunity engine company. we're going something I which with got along margins

marketplace So, that a valuable in, that got out good different we we and areas so about profile, and build margin and a can good feel demand the characteristics this. we that solid business franchise in of very the a has can and real play good

Mayank Tandon

you. That's helpful. Thank

Operator

from Puneet line on of Thank you. the And our next question JPMorgan. comes Jain

begin. You may

Puneet Jain

Thanks taking for Hi. my question.

new within your in win much Management, are Consulting Operations of digital Consulting advisory So, versus rest And business? what versus the how rates of consulting? the services legacy your is

Rohit Kapoor

engagements automation would towards don't I business And and digital newer consulting of some of the guess, that the some roughly particularly in around the business, of But carefully. and metrics those portfolio mind capabilities, I two-thirds is we continuously process Puneet, upgrade on say pivot our one-third. as transformation. we consulting new around this our track is continue part that services consulting So, to keep robotic capabilities legacy our evolving. of is about add

your I question was... other think

Puneet Jain

Consulting. rates Win within

Rohit Kapoor

Yeah.

– it's win client course to a So, compete we the I firms as the the decides pretty consulting consulting win on, and are project. out four, think, engagements consulting firms. and can there. sourced times, our we And ahead qualitatively, there. And of don't ability are a the And you. of the management go do with rates I the our very decide strong well, – our we with response either specific of to many share business rates that feel will the are big which some the difficult any that say win they are there good in chosen or we with But sole you and have I the the compete broader ahead against project, because to if win there. provider. situations, I other give to would share fair And good that about numbers we have

Puneet Jain

how business opportunities with like second, been And large And your that area? for acquisition, have that the segment? with are should recently this it. Healthcare to you Got deals long-term higher you Management Operations in you as rest given expect integrate and of SCIO going add capabilities we growth winning

Rohit Kapoor

Sure.

business, it, the got Management. Analytics some see of SCIO's and way we business, is Operations business is which its an largely it's So, portion

that way build For a integrate standalone a to we're and us as what's integrate to and is a will grow business for as and separate, that. with invest continue going be will of EXL period able operate be out and to SCIO now, time, to and the it right to we the way And is EXL capabilities kept unit portfolio. within over SCIO in other the of to going combine figure we part which SCIO

details transaction of more get you. with we'll have to once and be the closing closed, we share to the As able we

Puneet Jain

it. Got you. Thank

Operator

line Colicchio question Barrington from of next our And Research. comes the from Vincent

may You begin.

Vincent A. Colicchio

Consulting curious, it is on concentrated? so of relatively the Yeah. follow-up across business. or just large number one a I'm Is strength clients the

Rohit Kapoor

what very is of actually of We're able the strong. also different business industry attract be projects Yes, the gives strong Consulting and our to credentials out a it's Consulting of talent verticals winning. new be confidence And across foundation new of across Vincent. clients, gives deployed us growth and here. in these win us to are ability can number that the we to that's It's that on to that quite happy right organization attract the work projects our that to talent really some

Vincent A. Colicchio

is revenue years? tied to an you and that of do portion see what how over element the outcome-based Then, trending coming over the

Rohit Kapoor

towards is to so is and and their that right now, pricing to shift transaction our is shift higher, this meaningfully. closer So, next that business in of the to years. be and very tied outcome-based SCIO, proportion over to that the going us, Certainly, tied outcome-based moving pricing, significantly for XX% for the think for transaction-based much three it much, therefore, and or is XX% business going combined. We of pricing of is EXL direction

Vincent A. Colicchio

Thank Okay. you.

Operator

Thank you.

comes question Stifel. Grossman next line from Our David from the of

You may begin.

David Michael Grossman

morning. I well of service end Good I as you. Rohit, understand as markets Thank evolution the the acquisitions. with think changes offering in the the

perhaps of at mix, can and perhaps as the you of an offshore onsite the inverse-type you margin most the are However, the legacy times, in moved in impacting acquisitions and terms growth, relationship? end how change help which scalability, us model the has understand in know, markets business and interaction importantly,

Rohit Kapoor

Sure, David.

is, clients fundamental changes be So, and that and done piece we're one of work past, the service that efficiently high a shifts at in quality outsource to the and lowest would of the seeing point. at want price

providing solving as to place specialists the more in ones making and is digital and become are doing technologies our grow particularly remain solutions competitive them. we technology of those are players manage that are to and that solving that problems create profitable. newer emerging shift that providing the and that customer much some And taking in is for that our solutions. we think, today, going to I and are create think and our industry-specific that knowledge, ability data, well direction and And towards those shift industry factor can integrate that leveraging I ability by the value are the that's differentiating domain for as clients our problems

choosing successful annuity I towards if think able outcome you the think are and we a involves deliver think, from the opportunity. complex and the becomes exploit can but business the an overriding really stream, pricing, a few and and the business that you revenue is very associated away positioned higher. towards an that, outcome-based solution And delivery in well-orchestrated you're a move moving that risk with factor to I well the is the be focus transaction-based the value EXL pricing more therefore, of as on to commoditized end become on we're I success. areas shift And and of set, more certainty greater market and much can (XX:XX:XX) categorical opportunity because to integrated a risk make for end declines,

David Michael Grossman

the tied So, does it vertical? outcome-based of pricing, revenue to that imply the and in transaction- is that's XX% primarily Insurance

Rohit Kapoor

Yeah. we we have Logistics vertical & It's but well. of do place vertical where in in taking as have Insurance that largely play, Transportation our the some a dominant

We our model. in that to also Utilities that something is over have shifted business,

think you're these that's more strength as leadership I of solutions we lot got where I spread and that out, it's but of think likely So, a emerge. to industry-specific make we've verticals see a shift in where position,

Vishal Chhibbar

And Analytics, Rohit, is also around XX%-plus.

David Michael Grossman

it. Got

growth analyze revenue Can the maybe organic that. quick one just by for Thanks the constant in follow-up Okay. (XX:XX:XX) currency at And quarter? you the financials. on segment

Vishal Chhibbar

Yeah.

the a company – overall, on growth rate Management So, basis. Operations XX.X%. was constant-currency X%; the about and Management Operations was organic around about X.X% Analytics,

David Michael Grossman

you. Thank Great.

Operator

this turn you. actually I'd no closing further Thank Kapoor showing And remarks. at questions to to back the and call I'm Mr. like for time,

Rohit Kapoor

Great. attending Thanks, quarter everyone, earnings first our for call.

on forward to of the year, we year. continuing We've on had to on hosting our Thank building We update our about quarter acquisition excited momentum the look then. progress making this the well a for to are the as second call on execute very and are We as our SCIO. that start look digital strong the rest sharing we and pivots and of to earnings forward you.

Operator

the participating great thank today's Everyone in does you .This for have day. conclude a you gentlemen, may disconnect. and conference program and all Ladies

ExlService (EXLS) 1 May 182018 Q1 Earnings call transcript