EXLS - Earnings call transcript Q3 2018 | ExlService Holdings, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Q3 2018 ExlService Holdings Earnings Conference Call. [Operator Instructions] As a reminder, this call will be recorded. I'd now like to introduce your host for today's conference, Mr. Steve Barlow, Vice President of Investor Relations.

You may begin.

Steve Barlow

Katharine. you, Thank to financial thanks joining third EXL's Hello conference everyone call. XXXX results quarter and for I'm EXL's Steve Relations. Barlow, Vice President Investor and us Executive New Vice in our here Rohit Officer. With our Kapoor, Chief York, Financial Chairman and Officer; is Chief Vishal Chhibbar, and today, release that earnings had third you've morning. this hope opportunity to issued We our review an quarter we We've of EXL's section also Investor the Relations updated our in investor fact sheet website.

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

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

Rohit Kapoor

maintained of growth. quarter, revenues represents had third year-on-year million, XXXX morning, of Steve. a third earnings Good our trajectory we on call. you, reported We double-digit and strong quarter $XXX.X everyone, a a basis. quarter the growth generated which and to welcome XX.X% In third Thank our

We $X.XX. also an of adjusted EPS achieved

in with X.X% to Operations growing revenues Last in reported $XXX.X revenues quarter grew quarter, I full million Our growing including winning support large digital and X success I'd transformative of to organically, a year-on-year Operations to like in XX.X%, Management investments areas: growth talent my Management clients' outstanding X, our on of from the $XX.X Analytics number revenues, SCIO. deals, focus our in making basis, on one, discussed our we're our XX.X% growth had number agendas. Consulting. a another Analytics Today, strong business; and the business and quarter comments million.

Analytics segment growing we In across business. and XX% our capabilities represents our industries, of are Our now all geographies. Analytics,

We includes This organic business deliver and win have us built execution insights insight proprietary investments and stack to the strategy, and business tangible margin an that predictive of assets, those comprehensive through higher analytics data data engagements. generation to modeling, capability client complex end-to-end allows business management, analytics inorganic outcomes. more intelligence,

X revenue all observations we business Analytics within across about Analytics. performance business: verticals the seen growth highlight me one, of Let continued have our our

built banking, have as strengths several been and in by have on We top consistently ranked health a analysts. our care industry we insurance, and leader

We the have and new months. existing we in XXX from client wins customers, expanded past have received mandates X

two, Number media, also clients geographies transportation Analytics. logistics. in in utilities extended reach has across are we and Our & with winning retail, new

in have Continental in the We significant growth seen U.K. Europe. and

we the acquisitions In have our in to This unlocks successfully more comprehensive areas We such it we're stack. Analytics past integrated and markets America acquired for build Asia-Pacific, analytics new in in strategic sustained new strong capabilities X have a our into South and as we to years, be Canada, Australia also business seen expanding start Africa. Central and diversified, expansion drivers and Three, geographic allows growth. existing our in validated, analytics each enhance takes are sales now clients, our helping customers rationale to our performing overall couple however, as new enterprise be acquisitions services. strategic our and data thesis. our our on management, analytics assets of It proposition clients. per for generating of marketing win analytics, banking investment proprietary a acquisitions to us us acquisitions data at years is value and incremental These

have well. into SCIO analytics overall record I'm confidence say To integration that to that end, in the integrating of our is pleased offerings. We acquired our capabilities track proceeding

We with deliver combined growth drivers key are Four, to significant receptive our being clients. outcomes building have more held are we workshops proposition about value create of clients new the very capabilities our who for business for teams. advanced and

include application our analytics a data management across value advanced machine built business by in analytics problems property We're business assets learning which intellectual solutions, expertise market verticals. and business practitioners, X,XXX our by specialists, taken industry resources. data experienced than This world-class which and with leveraging team experts, architects scientists, create data have capability We techniques the deep more has creating data solving and our operational professionals, being through enterprise chosen of data also us to predictive partners. are to our channel analytical and

studies better them shift the kind the of an In help entertainment to work quarter, significantly won case doing. we're Let leading we with engagement customer to engagement a models media channels. third me digital client to company illustrate provide legacy European X and their

enterprise partnering are significantly example, Better their customer of optimize enhanced and we strategies. investing to insurer overall improving is which capability. the drive for thousands to retention another EXL implementation and to we clients' implement management generating lifetime the engagement, and sales is Insurance component manner. are includes a improved throughout every companies business, this visualization performing also truly data and client, to experiments journey. improve reporting We're and team framework decision-makings a greater and better customer overlapping insights large values. and better analytics. results part of mobile new In of and management customer renewal rates scaled we're an annuities inform subscriptions. of are life key customer understanding data across engagement customer this This higher with to digital can in desktop end-customers transformation in the embedded result a in Our digital in devices. helping rapidly an higher In engagement, into is as agile drive

information forms insights and from of client, for this to establishing For and strategies all assets are we data. that value managing creating practices generate best

governance are is policies, enterprise aligned data are a standards, a that for deliver and We data we processes strategy architecture an that business data building building with structure fully and to goals.

growth our solutions, across of acquired develop in our Our the business. advance integrate verticals us geographies, continued combined ability with new confidence to and capabilities growth and Analytics gives

to like The today of investing I'd building are is area our second focus in we how talent. discuss

Acquisition of of our as a levels: operating talent. best acquire at upon and partner, depends to our critically X different the the goal ability acquisition a Our talent We're technology-oriented develop lead U.S., we're digital talent have strategic that new of businesses. across appointed first, strengthening To company. consulting all the U.S. tier teams goal Talent process Head acquiring we transformation top approaching from in a

also teams businesses. Consulting, each Analytics. priorities engage These and within talent with be acquire the and are talent-acquisition teams to of strategic Digital able We will forecast, these of embedding in alignment

to our U.S. we we strong of a In continue expand grow hired the in third building operations executive capacity, on while to the quarter, senior leadership customer-assistance Second, foundation a talent. digital

development insurance with LifePRO management, also from with who the We a XXX professionals managing past software our us we digital business, running businesses. a of and and hired backgrounds platform new in strong product In more year, Oracle program have technologies. added background in Head than joined

from leadership a and program top enterprise-wide now component program our of training campuses management Our includes development hires rigorous a is This key program. building pipeline.

Third, active demand. in investing talent Consulting light businesses of and strong we in Digital building are an our pool in

EXL. on executed successfully model always had we now this business Analytics are that extending Our parts strategy, other of and to

of all X is training important of trained steps program a such employee's digital XXX thinking. an and equally around robotics digital are we In acquisition own in half artificial which year, direction: development, This first critical another our design across role important, is as of have people and the we this have and robotics first, capabilities, program to in X this thinking. EXL broad to on comprehensive design we nearly anchored based training customized methodologies capability. focus on includes talent is and talent levels, it XXX While launched intelligence, taken the certification develop in

initiatives a innovate. encourages to focused are on talent digital digital allows we Second, building and culture that

We and in have digital halls in more solutions. to that solve hackathons that internal client and delivered and processes new talent. are our internal global We more town are host create digitally the problems, communications now including best solutions pivoted of out participating our our teams bring digital

Third, academies to continue capability. build our domain we that strengthen

in content line and in update development respective the their digital with Our domains. Insurance, space the for their Analytics Healthcare academies

intelligence. for clearly talent. initiative experiential on of We learning becoming quality educate all, approach in to are destination employees Above our our XX,XXX using top digital are now we all a an

we of and on assignments interesting and careers. We to strong are are enables with in nature employees as challenging stay our of provide that growth curve. engaged The learn to their people talented technology in the well able as top work

revenue also at employee Our rate. per a is strong growing

for this investment decision strength Orogen game. leading of investment we've companies. startups talent as board the well digital digital on October, Their development board. in business experience corporate validates we and digital that and created $XXX of close term. and to brings emphasis is our sustainability on Jaynie EXL directors Our a bright, public our past in of former capability welcomed our our banking of into in and the model At a Citigroup, governance. In reputation of Vikram invest transaction, Pandit, our months, strong CEO and attracts also million internet several the culture EXL. early our a September, long in X In that as intelligence, has In made Group who joined top also heavy Studenmund its the career strengthened the

board. I'd and our update to to The excited are global with Jaynie positive. macroeconomic join Vikram brief on is We environment a have close pipeline. our like

bigger on the of and overall is a the several we nature seen driven by and more of that industry transformation. years. types strength. much demand are strongest These This in with play deals some past global Our demand great deals in being that focused to in larger is have position our

collaborative delivering outcomes, focusing strategic, building been consciously on execution. clients have on We our focused business and with relationships better

Our pleased in for first we promoter growth client saw is validated approach we will our the satisfaction and, our I pipeline. performance survey, recent call increase and visible XXXX. have is which Overall, created our months are our deliver over a over solid very value With terms year. to believe, from scores X year being we through with client XX-point of in turn the net our a of Vishal. the both last the that we that, to our foundation And

Vishal Chhibbar

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

is organic year-over-year second organic rate last on Sequentially, X.X% constant currency grew X the constant on revenues Our basis. basis. in our an highest the revenues X.X% grew This quarters. currency growth an

clients. in grew business, reportable Accounting This segments year-over-year was is Integrated XX.X% -- our was to year-over-year, growth a prior by prior-year currency expansion XXXX and driven with of Insurance growth to All a the and revenues by Accounting XX.X% revenues and year-over-year Consulting. currency acquisition year-on-year. strong This and on on a in constant basis. on continued and from growth growth $XXX.X other Insurance, our or -- by SCIO Finance constant last X.X% highest an and revenues. X% in X.X% on wins this contributed XXXX of by X.X% its quarter, 'XX expansion currency on our XXXX grew $X.X Healthcare the rate the Analytics. This Finance segments. year-over-year, this Operations basis, year-over-year ramp-up strong increase of growth delivered growth For currency and second is from basis. by driven existing of a year-over-year the deal of including basis, of quarters. in the Health organic existing a large driven segments, a Management as was an basis. grew from primarily wins basis. X XX.X% clients of currency other with This defined million double-digit currency Health constant constant quarter wins constant performance our million double-digit grew $XX.X ramp-up clients. constant of XX.X% revenues Analytics On million Analytics $XX.X grew X million, up driven

XX% of across As last compared mentioned quarter. all organic our Rohit acquisition growth geographies. saw grew X.X% revenues, to currency total earlier, basis. contributes Sequentially, XX% our capabilities industries, Analytics now on Analytics Analytics and post-SCIO constant an

X.X% This new For new points a to up from first an or having months and become to accounts top all XX% $XX.X year. and currency for year-over-year existing client Health basis. $XX.X XX first our constant revenues constant client grew million and wins year-on-year contributed We and the of basis. clients X X Analytics year. These years markets new XXX in driven wins across revenues first are a X last million basis, months potential the SCIO constant of strategic in on our in the X.X% our the grew for won broad-based across of new future. organic the on businesses currency some the million quarter new On XX was of XXXX, clients year. Management third in XX.X% and of with contributed XX.X% basis $XXX us the currency Operations wins months by XXXX. relationships expansion growth prior revenue our verticals, grew year-over-year, Integrated

employee Our up $XX,XXX by contribution Analytics is year-over-year. This is revenue XX.X% per annum, revenues. per driven higher of improvement

Our for by SG&A of had sequentially, of points. operating margin was year-on-year XX operating an quarter XX points the leverage XX leverage Integrated FX operating the of points a expenses XX.X%, tailwind. XXX driven revenues, basis points dilutive basis and FX improvement declined of basis to points quarter. tailwind XX impact XX.X% by of Adjusted for by driven Health and basis basis

Our million X% quarter $XX adjusted was million, EBITDA $XX.X QX compared XXXX, for up to in year-over-year. the

namely items, benefits tax on recognized the for rate the compensation. stock impact discrete Our was which of excess XX.X%, includes tax quarter

the Excluding impact of tax was items, XX.X%. quarter discrete our for the rate normalized

year. transition Our This line impact range of expected XX% excess to our QX was recognized compensation. adjustment X months first in as tax for excluding on and rate is of tax XX.X%, in the XX% tax for the the stock year of items, benefit the discrete with such

EPS Our quarter was the for adjusted $X.XX. diluted

up tax months X the year-over-year, $X.XX X.X% adjusted the XXXX. QX diluted our excluding For XXXX, of onetime was of EPS in $X.XX, benefit

Now financial other talking about metrics.

short-term Our $XXX.X and balance sheet borrowing of XX investments at September and cash million. $XXX a as of million of

debt closed with On in notes, million senior Group. of Our October net the to of coupon $XX.X we million. due XXX a convertible X, XXXX, sale X.X% is Orogen

we mentioned, outstanding have used pleased Orogen this EXL. We repay Rohit of our proceeds revolver. As the million in to make to investment are $XXX

million with million on the the spent $XX for expectation year, of an $XX.X capital During nine the of first months year. we expenditure million capital expenditures $XX of to

We also shares under million for repurchase repurchased XXX,XXX $XX the share program.

to Now moving our guidance for XXXX.

in to This XX%, in million million year-over-year compared guidance. to XX% $XXX for a We guidance At are rate. XX% $XXX by headwind exchange current range XX% to year guidance $X million, the our million. is $XXX $XXX to be driven million prior midpoint, to updating to of $XXX our to our the at revenue growth to prior million, our revenue the constant million guidance entirely of $XXX represents compared in guidance of of prior currency FX guidance, compared

$X.XX $X.XX. growth with a adjusted X-month $X.XX, the terms narrowed midpoint quarter we delivered third we of a In maintaining revenues basis. conclusion, EPS, constant to while In year-to-date the currency and have range at to XX.X% for performance diluted XXXX, of on strong

growth core revenue well and business is Our with very performing margin improvements. growth improving trends

and revenue expect We happy with can be year questions. we trends are strong visibility now, Rohit to for in would And that business continue QX, we I as exit take XXXX and the confident these to growth.

Operator

Instructions]. [Operator

Blair. question with Our Maggie Nolan first from comes William

Your line is open.

Maggie Nolan

a guidance ask range constant to guidance, currency brought the the low-end up wanted the you of basis. I about on

seeing the you previous and that end towards outperformance what's are where higher So range? you driving of

Vishal Chhibbar

well, based for the business midpoint has see and of Analytics to in performance, were growth have range narrowed continue confident we we sustained year, of that the we and outlook Management. our seek our guidance, our terms you in Operations our very on to And our of can performed accordingly. So the hit rest

Maggie Nolan

quarter, that then guidance in currency changed you as guidance constant provided is And Or last constant consistent? Okay. organic has currency that that of organic that underlying well? terms

Vishal Chhibbar

XX%. our have growth year. our we I same. XX% I think, it mentioned XX% for currency basis, in range to XX% And the down to On as narrowed prepared fact, range In was organic constant earlier the my remarks, remains organic to

Maggie Nolan

wanted to talent acquisition. that Great. made talk the I about And about comments you

to just the strengthening the does of to of significant about quarters the you. reorganization is coming P&L the a here? entail? that's talked that teams? Is XXXX? in teams, You show in Thank is what needs more there something a wondering, that and it Or place over into going take that investment up And

Rohit Kapoor

Sure.

talent. on digital So

in have. as capabilities. reorient and our to our talent planned of businesses, adoption and we team, continue digital core investments the These work investments of all We leadership they the assets well are towards technological middle-management doing in strengthen develop the terms they both technologies. make more people And for of that

up human we clients scale want for that as technological much more digital transformation, assets right make and in engage investments strategy we to As us these is this of our the assets. think, business we and with our

Operator

Thank you.

question Mayank Our Company. comes from next with Needham Tandon &

Your is open. line

Kyle Peterson

Hey, good morning. actually Peterson, for Kyle questions. the Mayank. taking on Thanks is for This

Just little about to growth. wanted talk a revenue bit

quarter forward had the come fold, growth Management revenue think SCIO Just, very see Analytics, kind on with side. strong the Operations of, the on should kind going how Analytics obviously, the of now you we, of, in a versus

Rohit Kapoor

Kyle. Sure,

an it basis then So a I And think with our of it business, basis. grew SCIO. on the very grew part analytics combined we on nicely nicely organic think, very along

revenue our resonate couple of marketplace. mentioned fully and the normally to years synergies acquisition in a the play takes out in we prepared remarks, an As associated with

quite associated show this up proceeding of is I however, on quarters will imagine, only is in subsequent terms nicely, the results right and synergy, now, revenue in acquisition subsequent would and business years. to So real with integration SCIO of start proceeding track the

think our business We Operations also nicely. quite is with it our in expectations. line And that performing Management is

So areas company these are performing. frankly, how we're the of of pleased both with X

Kyle Peterson

then, vertical. hop And guess, to if I out. color just you side see great. Okay, BFS on have any and guys for I'll last I just me one wanted the

that looks get like, have there more at revenue least, that on Or Was color revenue just, it want quarter, have little last the of, up? This bit. to might any beefed little onetime might quarter sequentially a a kind dipped that. number

Vishal Chhibbar

Yes.

some which because flattish, see the quarter don't So hi. down The volume. slightly underlying we we And and normal, is from segment something, of of expect -- -- was in that's Insurance ours in or the of terms last issues any seasonality business. don't

In fact in quite year. YTD, organic an basis, over XX% that well business has been growing this has on grown

Operator

you. Thank

Our next Cowen. with comes Bergin question from Bryan

open. is line Your

Bryan Bergin

you. And morning. Good on Ops then quarter? Integrated you what Thank Health growth Management constant in was currency Can performance? the the say rate organic comments

Rohit Kapoor

Sure.

Ops currency was growth the And Health the were organic revenues rate $X.X constant So X.X%. Management million. Integrated

Vishal Chhibbar

$X.X million.

Bryan Bergin

was That performing with Integrated Health for that well? expectations Is in question one. the line as

Rohit Kapoor

Sure.

Health challenge going Integrated, So, is a has asset, it. previously we a as on bit which have mentioned restructuring within of

to in We provide to strengthening have implementation year. delivery, operational adding execution end the by the of track, we expect terms put platform this take And in that the would and that in our our continuing business and the Integrated greater clients. CareRadius terms huge of much provide CareRadius visibility on of to would pretty of is program Health emphasis that a service the we place

that now impact line we profitability Health a at been Health $XX also full revised quarter, on our has in it to have revenue Integrated revenue we dilutive million And we guidance come about but expectations, Health said $X.XX to of of Integrated to range. the last Integrated, with expect the profitability, the that is high-end and baseline clearly year. the million below for which having the of $XX be in that would of provided terms the In And of $X.XX. initial

Bryan Bergin

that Okay, was helpful.

base versus gross the in the Analytics As annuity Analytics then overall discretionary into you. you stream the your about profile Analytics talk can business project-based the fold of you SCIO Thank -- that now. in business, on mix And the work of expectations margin?

Rohit Kapoor

Sure.

have provide it does average. operating slightly And is time and a in it's quarter. deliver of the related and business, margin and The value therefore, compensated So substantial now place. doing mind, basis, and, than be Analytics model of is business in out will consistency which our clients, a for acquisition, part more its higher previously expect, third large-size driving company has clients higher for a SCIO keep adjusted indicated does a should that. which we've smoothened have some gross is we more in business an we operating on to as to business, therefore, will be large these our lumpy the outcomes SCIO -- be and, a higher become the in its lumpiness only at to much frankly, margin this the overall will associated of very outcome-based results. business that's get as ongoing of how able get and a quite basis exactly played And but how well-diversified. we out is and terms our we of to But very with pricing

Operator

Our next with SunTrust. Frank Atkins comes from question

line Your open. is

Frank Atkins

Thanks for question. my taking

Digital. ask wanted First, on Consulting to and

of You talked you us toward? of give there. some little investments areas just where bit But a And could demand, going update talent going of status growth you are the what there the a stand? on about

Rohit Kapoor

business. Frank. in very can And automation. they client of that them robotic strategy. them help we're growth where And digital being and process that of strong which have help some we as and amount thinking we've operate, areas is around lines then you heightened performer. our through their something, levers And reoriented be of they consult The seeing operations, transformed, and nicely of in engagement, for the with us resonating leading nicely. that That's also can as Sure, to off the in implementation been use we're on of growth to how businesses Consulting to demand how business these execution the a this is know, go into able in right-sized work a some Consulting very which to this within has service is business. is, year strategy

have for also working our which they optimal capability well. very We structure terms operating creates of digital exercise in and a of clients, their businesses. doing a blueprint processes an outlines a should blueprinting that's that And transform their rarely how

the our analytics, very well machine working And with of some capabilities, clients. some embedding learning, AI are implementations applying around those

this we per for play exactly the have the shaping right this already thesis. was made us and think So in investments our investment as been is

Frank Atkins

wanted That's very give segment. then Logistics in quarter? briefly, just Okay. Transportation terms any the helpful. of touch you on Travel, going And what color And forward to do & can What see pipeline? happened in the you

Vishal Chhibbar

Yes, this They Logistics, expect had of well. don't Frank. one which Transportation are again, building XXXX. And think onetime the impact. is & clients our of, volumes lower some the The shaping Travel, good business for We was seasonality we that think And business to something, this quarter underlying we a emanating that from pipeline is continue. there. of impact this

Operator

with from Koning comes question Baird. next Dave Our

Dave Koning

headwinds, in again kind high of, some anniversary back single-digit we, negative, I Healthcare of first the for just kind turn you the organic normal, growth for has some the called and more of, segment get of guess, me, that. as reasons that Is, in 'XX, to we should mid- been itself, And, to that than positive of I segment? know growth early on all, out should the

Rohit Kapoor

right, we're the into us, Hi, next would in would out we this, we growth correct Yes. year, go as expect strong this is that's The that look a of take we that had terms rate. seeing a industry clients called pipeline fully within at the If you're we Healthcare, itself some very Healthcare absolutely and that strong. of vertical there, of for it's, the very transitioned Dave. segment, but out

capabilities well differentiated. nicely very that clients. very they And some the with Healthcare within got resonate of which are And something, are we've our

that we seeing are had. So already we've some wins

year pipeline. more should there differently this very that think in next we the year on an some And out therefore, currency play organic constant are from basis. And

Dave Koning

single-digit least, Okay, there the sure acquisition, of, we, done be to level? anything at I high long like Or want it far. benefits need a so think is low-to-mid-teens. next guess, we that for be, kind if are And understand get that your EPS that continues just time, you're core year, should next secondly, seems at make you've we that growth in I margin Can mark, the and kind you tax going grow of about revenue one-off plus rate? around of, great. seeing that or year from either same standpoint if to a there's not, to into that anything, if

Rohit Kapoor

Right.

So said, has the adjusted for have by of reason it really for year that to our as the about $X.XX biggest EPS be Integrated, which, the been this we us margins drag expect we to has Health for And on year. range. now impacted at $X.XX top-end the

our and EPS. expect fully we second would on in such XXXX, XXXX, drag get For that of the at a levels breakeven not would have half Health Integrated to be

So be XXXX, as different to going to XXXX. actually opposed quite factor that's that's big one in

SCIO should these for our if think for we to growth margins. gives that opportunity the operating we also our can think it rates, of integration able has us at improve grow us that better double-digit and which that be helpful. margins to into leverage And to be We business, continue our business

in this a be So we should XXXX line line. nice think going growth the in the that into both and bottom top

Dave Koning

okay. Great,

and have So normal long-term profile. the year year well this too. as more, wasn't if it Integrated, would one-off here, good next Health fit have this the kind been of, year a year that things to very would starts really And typical for

Rohit Kapoor

correct. That's

Health our quite a operating think, take adjusted expanded those have excluding I look So nicely margins if you at year. Integrated, over the

Vishal Chhibbar

a for reported Integrated. the the basis, just is XXXX, facts, on of impact our Health but So XX.X%, UPM give to you includes

YTD in would Health of impact year, basis the operating for about range. exclude XX.X%. you XXXX. If in XX margin an And be our adjusted our increase the we same the Integrated, that to do number expect and is from XXXX about be points That

Operator

comes next Edward from Our Wells Fargo. question Caso with

Your line is open.

Justin Donati

This customers? is Justin cross-selling health any solutions you analytics talk success Donati you've in had Ed. Can early your about care on SCIO's for

Rohit Kapoor

have to think discussions and think, So of therefore, between right SCIO nicely. combined the quite consummated. too we clients dialogue we've I EXL that for play the for success been of X. now, there resonating are the clients the with synergy had of cross-sell nice it's those Certainly, a do that be and some capabilities, And early would

SCIO the the had we for the that the That where as capability plus One And offshore of the that both is the EXL the we clients. brought was highlighted combination the CareRadius, unique plus platform rationale technology our Management capabilities technology comprehensive resonating Management, in that had. platform acquisition Management. have around around and within nicely that would clinical Care onshore doing would in conversation a is ownership healthcare of marketplace. capability strategic already have capabilities, of that the we And analytics very with operations Care analytics and areas Care

there's therefore, We over lot there's to of to a as X-year SCIO much as And the out also opportunity out up play with some the business, well opportunity both integrity these right X I discussion integrate now, think, and a period. a there. phase. acquisitions, in a think of clients But we're of And the payment of scale huge with EXL. clients pretty

deliver us to business the take some results. it'll so to able And be time

Justin Donati

Over clients accounts. top commented what adding do see out? And Great. could that you that frame few playing then a you time on become

Rohit Kapoor

Yes.

very pleased been acquisitions have we So client in our with XXXX.

take these that up to think top that few are ramp very over And should clients they acquisitions some XX strategic. of and time frame. we've substantial contributing place be start clients XX And these of In we the will our months. and in that the the a some next cases, of of had

Operator

with And our question Barrington Colicchio you. next from comes Thank Vincent Research.

Your open. line is

Vincent Colicchio

in given UK of Brexit, you the any the in Curious pipeline? some impacts Rohit. seeing the around are turbulence Yes,

Rohit Kapoor

no, And business Vincent, Brexit seeing where there. opportunities. Hi, new in any Europe. GDPR we with our in more with think take well the our clients regulations. some in increase and something are We're diversification an as as particularly is is our in that What the also place. UK I our of we're seeing to seeing clients growth pipeline Continental demand not more And that's opportunity, with Yes. growth impact out with real us we are seeing with there providing some in that's the

Vincent Colicchio

And portion see if outcome-based to -- the and that And sorry, period on you based question trending? is outcome at the business the organic where year-ago outcome-based on what compare business, does we look that the -- organic do how today?

Rohit Kapoor

or we So pricing is this pricing. continue previous have next This over years, will expectation is year, increase. of revenues, increased to and our today, our that is into as we the and following which transaction-based about the year forward XX% outcome-based move

these take and time because over However, it period time. of types slow, the change clients quite of a pricing commercial to these to models. takes pricing to place is adjust new of transaction-based And for outcome-based pace

a but trend. this continue not a for I to going is move secular it's be think switch, pretty part much that So rapid to in a in going to

Vincent Colicchio

Thanks my questions. for answering

Operator

And our Thank JP Morgan. you. comes next question with Puneet Jain from

open. line Your is

Puneet Jain

my taking question. Thanks Hey. for

So the this to running margins clear, year's just that next of be level Health if be like, excluding margins should at Integrated baseline XX.X% are headwinds, year? for

Vishal Chhibbar

will that, to the like and the Health over and for for marginal XXXX. around turn a business -- this if improvement the expect Puneet, able base year We Integrated -- XX.X% we expect breakeven up business we of Health we'll where do do I the half us be including Integrated. Rohit second base end there in mentioned, So be Health rate, Integrated at are think, to

Puneet Jain

FX also think a levels. currency Understood. next Is current let's stays FX at year? about And there benefits margins you if, should to way say, some tailwinds get to like

Vishal Chhibbar

take benefits, GDP FX our with We is the or client by currency of original our So are portfolio but being and or the that typically, very of where currency. the billing losses, in USD marginal, borne is dollar our we do so have treatment. revenues are gain some because those accounting XX%

out. the XX% hedge on balance loss we and movement. And gain offset the typically hedge currency the So

neutral. of So -- in gets for of are Indian FX basis example, interest that bear offset And that tailwind, because offset XX our for impact so from from you investments. this margins quarter, only your we XX mind our on by at had investments, we typically large amount EPS and get adjusted income Indian lower offsets -- basis but

we EPS our or impact expect or big depreciation. don't the to tailwinds So currency margin any adjusted from

Puneet Jain

EXL's out, decisions? Integrated. SCIO from those Understood. talk clients they heritage reasons about, the the came what like for or And healthcare that were can clients, like, also those And also Health you were transitioned

Rohit Kapoor

well basically, Yes, at previously were clients transitioning to Integrated clients, wanted took who I And expect revenues We news, Integrated. was time move was was to QX this win well. X, from we QX and, see captive place. that into declined of transitioned slightly as as clients what that's revenue above and the have Integrated. out Puneet. and is had good the Health new on therefore, QX. there that Integrated actually we for Health that shared down QX EXL now And Health operations. their out be the And The QX, acquisition, quarter above an doing large a client revenue to think, in in started us have Health Health to QX Integrated

quarters. So provide on into we growth us it Integrated going Health And next we've a revenue think with bottom opportunities hit should that few from standpoint. the

Operator

Thank you.

Craig next Jones Our with comes from question Stifel.

Your line is open.

Craig Jones

the I'm for comp amortization and just looking for stock XXXX.

Vishal Chhibbar

million is between want? of to is $XX million. $XX you million Amortization year. comp what Stock intangibles $XX for Yes. this did else about And

Craig Jones

And and will for have operating for what then margins year, looks like down, for great. XXXX? Okay, that your then expectations new do so -- coming come you a in what be it the

Vishal Chhibbar

operating Health to it margins So the as expect I excluding earlier, mentioned year, XX.X%, around for be our we Integrated.

to we be For do XX.X% that to Health the year, including Integrated, XX%. expect around

Operator

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

Rohit Kapoor

for third all joining you quarter Thank operator. our earnings you, call. Thank

transition look around focus this sharply that And continue we the you. gaining going that our you Our core very the Thank And sure digital. and execute focused strength we acquisitions the business, making quarter's integrations and forward capabilities very year. are next year. as continues we And have to We'll we on of next the go perform call towards make forward well. strategy to on in to well. said, hosting

Operator

program. you This Ladies concludes and today's conference. today's for thank participating in gentlemen,

great all Everyone, a disconnect. have You may day.

ExlService (EXLS) 3 Nov 182018 Q3 Earnings call transcript