EXLS - Earnings call 4 2023 | ExlService Holdings, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2023 ExlService Holdings, Inc. Earnings Conference Call. [Operator Instructions]

Please be advised that today's conference is being recorded. to John conference Relations. Kristoff, like first to now today, speaker VP would hand over the your I of Investor go ahead. Please

John Kristoff

EXL's Thanks, you Results Hello, ] Call. Fourth joining Conference [ Financial Quarter and XXXX Rivka for thank

Rohit On and Vice Nicolelli, Financial Chief today Maurizio Chairman Officer. and Kapoor, the Officer; me call Chief with are Executive

We earnings this issued release had morning. opportunity review to an you've we hope the quarter fourth

deck website. and Relations We investor sheet also release posted Investor our an in section slide of earnings the fact

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

certain reference slide deck measures and believe investors. Reconciliation may in release, press to found we our financial information of GAAP the call, for our fact measures, which we these non-GAAP useful During provide our can sheet. be investor

to over call the turn Rohit. I'll that, With

Rohit Kapoor

growth delivered macroeconomic to the weakness Operations growth everyone. full an performed our our work by business. in impressive and I'm strong and this & Solutions achieved well project-based morning, our revenue XX% Analytics outperform. EXL's Good EPS XX% morning and XXXX year Call. revenue you ability industry. a XX% for XXXX, for pleased and grew year business XX%. despite of We exceptionally the John. Thanks, with Earnings Quarter EXL continued challenging in results growth and Welcome be environment to Fourth across in discretionary and to We Year-end Digital discussing

generated XX% $XXX we quarter quarter, we XX% fourth XX% of grew revenue the in an increase by million, EPS and $X.XX. of to adjusted In constant currency. fourth And year-over-year

to ability and strategy difficult revenue is in of a our pivoted of businesses. balanced being sound environment, our result the of growth, which double-digit of a a industry-leading even execution X-year to consistently several and importance data the in resulted XX%. We Our ago years deliver differentiated data-led company, portfolio of CAGR recognize

and data deep we analytics uniquely Our AI and expertise to now data-led embrace in strategy in becoming everything AI-led has and pivots us that to positioned do.

impact Just is is the the our improving to growing and of driving clients. AI parts. Data the as accuracy to industry-leading years, for greater our us superior us several data our AI crucial clients much outputs proposition, and over performance offers better the sum all upon customer the total addressable foundation AI operational successful for going drive outputs, which AI data-led Combining outcomes built. is The revenue. and us data enabled is the positions and expand more AI of market value efficiencies, growth well together of the for and a experience The past richer forward. and This reliable than value enables

are superior operations, opportunity it and has EXL That's clients' embedding greater in the business results which, have so learning efficiencies and industry-specific machine enhance the of experience. business ahead. customer what AI unique from outcomes. in operations about to when Over takes with industry-leading reality and transform analytics combined we data AI models capabilities, to deep concept at experience excited forefront why drive years, AI past we to several the our and and been into

data our making forward. are investments to propel We meaningful AI-led and going strategy

center their excellence AI AI and to our training an them More of development and skills. employees expand advantage taken X,XXX tools established of help X/X knowledge with specialists. have have than already of We

finance. We employee have developed and as several generative AI applications for areas in enterprise recruiting self-service, use such

collaborating most use and We and recent including we with with partners, Microsoft our and AI core co-develop AI XX industries plans. AWS more leading go-to-market to with clients. across with XXX of than our accelerate deployments the our build embedded into announcements technology solutions to continue over And solutions are AI portfolio cases

fueled Officer, and leading speed. To to are helping leadership our reinvent AI expanded higher our new Executive President initiatives. by Singh, and Vice technology, Executive X Andy EXL's President, the the EXL's We AI-led advancing for models analytics deliver strategy, with support shift clients leads value their way recently team is Vice with digital Logani, Officer, we our and Information And enterprise executive data in Chief functions. Baljinder business Digital leaders. data, responsible AI and transformation Chief to cybersecurity and

businesses clients' AI. operations, focus our of of our leadership implementing we own is and understanding As that solutions crucial is with along to team made AI-led up on and it digital executives transform senior deep with our a data

of me strategy to value to more EXL data of Let deliver clients. our couple our enabling a examples how is share now led and AI

assistant to produce We have omnichannel clients approach, generative customers enables more working and end intelligence, and their personalized data solutions a reduce services offer to with which processes. AI the financial to We company pursued potential defaults. reinvent U.S.-based their leveraging and been large payment collections an

payments their track initially on for collection credit AI-based digital net and products We PayMentor, one our credit are loss million solution $XX by reducing deployed their year. of to and proprietary per

extending to several initial our a over months. lending next the solution success, PayMentor our As are other various products result we of

data customer typically run only mandate solution not operations the and also to AI-led where This human-in-the-loop. their a delivers In won end-to-end with the collections but we experience adversary. using area collections, outcomes, engagement an been addition, improved has in a better

assistance and recent services debt payment high requiring rate clients restructuring. environment, many are our in With and interest increase an of customers the seeing inflation financial

reviewed latest errors. CX claims technologies. help and of confident a clients We our In audit collections using of each ability losses the we We payments health example, AI year. help basis potential clients one millions another hundreds on from to incorrect large functions using identify, their care recover AI dollars are in to to are and data, from our their significantly of billing data reduced running overall

encounters we the As into reducing further this greater enables us providers. embed of generative AI in of a errors while false of our identify time shorter to billing period solutions, significantly number positive with number a

AI-based our errors billing in faster, We productivity to more are also using auditors tools aid gains. finding creating

to real exciting submission is of most AI and of One allows identify time us root causes or payment identify Gen prior of it to errors. payment the errors aspects in

making We investments adopting proposition. a core to value AI as strengthen our data put part further leading in have EXL our strategy position and of growth by significant and

competition, outcome-based clients. our model are we This to to ahead, to share business tangible a data we we solid in greater capture business create for and move an clients competitive and larger Looking more of have improving grow enables our momentum AI, value our deliver and win us our we through than deals of our more winning as revenue rates. faster the value

our XXXX, allocation This program. is authorized $XXX cash ongoing million deliver effective growth to generate for of Our capital ability in and industry-leading a stock reflects part our to X, Board flow. confidence Directors X March continue program significant years. This of repurchase free

weeks. of Therefore, and our change would a our transformation has business. an of Please insights strategy. our tremendous your mark in Investor There been provide we to data informed business and stakeholders like be and Strategy AI-led event will the further keep Update coming about Event about amount holding on we the will provide to our May in X calendars we details

XXXX. we in results exceptional challenging In environment summary, delivered in a

exceptionally and to analytics dedicated deliver XXXX team, Our and capabilities performance and an winning beyond. strategy, industry-leading position well talented AI unique in data, and us

performance that, cover to I'll detail. call to turn financial over Maurizio in With the our

Maurizio Nicolelli

for joining by I Thank you, and provide outlook our into XXXX. quarter our for will fourth this insights XXXX, and for year full thanks, Rohit, followed financial morning. performance the the us everyone,

basis, All hereafter up and on constant in on solid with $X.XX, growth of X.X% a XX.X% mentioned a delivered XX.X%. currency revenue year-over-year was Adjusted currency are million, constant sequentially. quarter of a We $XXX.X year-over-year a EPS basis. fourth XX.X% percentages increase reported revenue

Digital our segments, businesses growth excluding Solutions was defined year-over-year as revenue X million, grew & reportable $XXX.X by from X.X%. representing we Analytics, Operations of Revenue XX.X%. Sequentially,

vertical generated of million, driven consisting grew by client The we our revenue new of million. and and an X.X% existing $XXX.X revenue wins. $XXX.X of businesses segment, and Insurance year-over-year XX.X% growth insurance the Analytics This both Digital & Solutions of increase client of relationships XX.X% the with year-over-year In was sequentially. Operations expansion

relationships client with sequentially. vertical both $XXX.X year-over-year This segment, revenue we and XX.X% reported The year-over-year Operations growing wins. and expansion revenue Emerging client driven businesses Digital of Analytics of the $XX consisting by & was X.X% existing million. grew the growth X.X% In Solutions new of our of emerging million and

segment million, $XX.X sequentially. revenue Solutions Healthcare relationships. XX.X% client Operations of and Healthcare reported was consisting of of and year-over-year The X.X% Analytics businesses, of our revenue X.X% year-over-year in with The existing growth decrease by representing Digital driven The million. a expansion year-over-year of $XX growth grew vertical &

by services. we payment was volumes -- Digital decline in the Analytics in Solutions was services, generated driven business banking revenue revenue financial highlighted million, payment previous from partially was our Analytics we've the segment, growth revenue from This in reflecting $XXX million higher marketing offset In quarters. Growth -- X.X% trends of year-over-year. by in and Operations up analytics, $XXX.X

by and percentage marketing. SG&A basis revenue to XXX driven front-end generative XX.X%, in expenses solutions, as a digital points AI, were sales up of year-over-year investments

for points Our margin by XX.X%, year-over-year, adjusted SG&A XX increased was operating investments. driven basis the down quarter

$X.XX, basis. EPS for the was Our on quarter a year-over-year XX.X% reported up adjusted

XXXX year to Turning full our performance.

Our was double-digit revenue driven Solutions and Digital year-over-year. by XX.X% This in period $X.XX Operations was Analytics our the both billion, businesses. growth for & up

Solutions $XXX.X of Revenue from XX.X% year-over-year. business & Digital Operations million, increase an our was

generated and XX.X% Healthcare of XX.X%, Our Insurance, respectively. year-over-year X.X%, growth segments and Emerging

total Our business XX.X%, revenue operating XX% year-over-year. year-over-year the for of basis Analytics Adjusted was growth of represented Analytics year million, of revenue. XXX points margin generated representing XX.X%. up $XXX.X

was rate year our XXXX. the comparable XX.X%, in Our to for effective rate tax

Our $X.XX, year-over-year for on adjusted XX.X% a the reported basis. year EPS was up

sheet remains balance Our strong.

of We revenue and long-term million This XXXX. Our up million improvement operations $XXX net $XXX was our driven a the XXXX, cash, our $XXX XX% cash million. higher in operating revolver and of for $XX flow of including expansion December was debt was year-over-year short- as position cash and adjusted from with compared by of XX margin. million, generated investments

shares. During spent the on million $XXX and on million $XX X.X repurchasing million year, we expenditures capital

mentioned, Rohit to remain and is sticky, remains or through the a business rates. believe the will half Now on at competitive by our outlook our unpredictable first maintains as and XXXX. strong Fed win near macroeconomic But environment the at pipeline, rates larger inflation year least of current levels. moving driven for as momentum robust, We increasing contracts the interest

billion the be XXXX, in For we and our $X.XX representing to X% to to of revenue and adjusted X% on We in range $X.XX growth range anticipate basis representing both billion, year-over-year basis. year-over-year reported EPS to XX%. $X.XX, to $X.XX to of growth a currency be the anticipate XX% constant of of

largely assumes guidance full XXXX. year profit be with in line also operating Our adjusted margin will

exchange We full foreign the expect year $X to in interest XX% approximately million, effective be gain of net rate million XX%. tax approximately range our income of $X a to and of

the expenditures capital $XX million. expect We be million of to in $XX range to

increase we as our revenue In to rates quarterly of progression, terms progresses. quarterly anticipate the year year-over-year growth

margin profit operating adjusted with also in revenue. our expect to line percentage increase We

to enables industry our to and XXXX growth part environment. ability summary, as our strategy our a and By deliver confident making data to enhance execution growth superior exceptional generate in results challenging leadership in and of further us strategy in AI beyond. position investments are we and In consistent significant differentiated adopting our

to questions. that, Rohit be I happy and With will take your

Operator

comes question of Callen. of from Bergin Bryan first line Our the Instructions] [Operator TD

Bryan Bergin

of bit those And the the overall more Maybe on conversations maybe talk start more fiscal areas demand little underlying the and 'XX first? Digital assumptions bit here. X on a a in just Analytics Ops? flavor client growth Can you outlook each about across

Rohit Kapoor

Sure, Bryan.

and slightly expectation Analytics and able Digital between Analytics same between Operations a our XX% this to X% are for business bit revenues our is the year in in year. Data grow So The growth a X Data Digital calendar higher rate about growth to expected rate little with to business our operating XXXX. segments predominantly to rate Operations be our be lower growth of

outlined, to we the would growth increase Maurizio gradually expect reflect to from QX As and quarterly rates that. QX, progression our

seeing very in And see already continue In number X we executing will up of XXXX, which Operations. environment of we much both the that in terms deals pipeline. We're demand Digital to the larger we XXXX. deals these won be strong into a segments, signed have in in demand we come

was marketing On and in year impacted side, as the work Analytics project-based well was area last discretionary that the analytics financial some banking as services.

that is the towards and that the therefore, second that, there. half back come normalize growth out expectation should we of Our the would year see

needs you is management, in there on adoption know, to that of getting data done work to and of movement As data Data on AI. generative a Analytics, shifting for lot data ready the the be the cloud, the

perspective So we to for frankly, think to be is from the in us our And is very a able that our great robust. demand environment business grow double-digits. this opportunity

Bryan Bergin

increased change comment share here nice any capital see the to $XXX repo, this priority, surrounding on buyback? any then just program, new this urgency allocation And million you can in Okay.

Maurizio Nicolelli

Maurizio. Bryan, it's

you when investments. $XXX This our share time were at XXXX. still it M&A up doubling from allocation significantly spend of we still pipeline robust to plan did as next our internal capital million over review fairly is to what we our strategy. our ongoing look increase essentially, in in program, an pretty on. We meaning part XXXX. half the in budgeting plan take is X repurchase part of -- capital We allocate still continually of still essentially have $XXX where we that years, did a still go and a lot overall we to did So XXXX. And we million to

to and million XXXX lastly, dollars $XXX XXXX over And our it's our ongoing XXXX. share looking cash then from growing allocating and and rate, operations -- And in growth then given particularly beyond. our confidence repurchase. in also in being that flow our well And into at

those of forward. We of be allocate capital areas to all to now able going X have plenty to

Operator

Shirvaikar question of comes Ashwin the Citigroup. from Our next line of

Ashwin Shirvaikar

enrollments the and a mentioned remind us you flow the how of seeing Is and care opportunity vertical, -- fashion might if health to Healthcare possible as have as expected? in healthcare In that of sort through guys past well the you through help the granular on. kind in it walk as dependence on so are the more

Rohit Kapoor

Sure, Ashwin.

would that direct our health increased taking quarter. And QX, cycle, expect on increase the So we had between come care, with typically which direct the was in. result health our fourth we quarter-on-quarter We see stated a did and place. enrollment in to associated revenue which that sequentially see revenue Analytics of actually in QX therefore, the happens enrollments marketing care

giving clients that our we more our us we take therefore, really we grow produce we But the to out for set fact very and AI, well strong We've nicely can if and results given leverage business volume overall, business, of are look like work and the there. and anybody pretty stronger we our business data, integrity can broad at very Healthcare more portfolio up, else producing clients a leverage can continues the much that you within than are a and do have. pretty got which Healthcare that payment we is

us have part We and of be been to line positive. diversified. of the broad-based that's to help business operations, there, a again, customer that improve out continues and the clinical experience around very well application pretty And for AI

are There have And areas are in Healthcare. technology own There data to pretty for more technology getting leveraging proves our platforms proprietary within are resilient these where we which are complex. areas be that other and into, areas we us. again,

and more grow very continue apply to this able nicely. more been And has business performing of expect continue of more kind a Healthcare be very, a for lot therefore, business this data, broad-based, be of to to build our lot in we vertical. to and overall, AI quite large apply So industry

Ashwin Shirvaikar

on which could with be projects? the moving of of process into and regards prepared into in I you do? data your of past primary POC to AWS, Or terms are have? the regards the Are from that, contribution forth. ask -- And building so so stage, and remarks access if of LLMs you, can sort did of because got going to on, out to And you with the collaboration is kind getting but if sort things have clients you you other specifically, contribution the stage there collaboration, your to have you primarily pilot larger because that should perspective the and with

Rohit Kapoor

Yes.

into their let allows us infrastructure, partnership much So more solutions part business be on horizontal works are me into them with got a leverage partnership on of a the have vertical marketplace. extremely that's able apply we comment technology We've now, to [ hosted this and that which well. case. the platforms, hyperscalers ]. Essentially, their that why use which AWS And the and cloud a to right are number

immediately. of solutions get a So developed applied well seeing that these the can pretty We're that be much are deployed acceptance also broader enterprise-wide. solutions

So when across the other across streamlining AWS across we apply with -- cuts and with such helps generally providers, our and and to data build enterprise. geographies the functions business enterprise work the across that ability and

in results results in taking of larger that transactions. transactions, it the place. forefront strategic It us and more it transformation much at So embeds that's

the this of think is manner the I be in in finally, side, is important. on our where seems seeing understanding in a marketplace. the be to the strongly the And the partner of the and to that the models. and and data evolving we're application And these the a data more and we LLMs marketplace, that, help these that's AI-led critical quite really becomes all are understanding in clients resonating And therefore, process our and market strategic business to becomes and ability winning why really, evolving, understanding way of of the the which

Ashwin Shirvaikar

beyond in now those and marketplace that you confirm, such? deals win are Okay. And the pilots larger to

Rohit Kapoor

That's right.

Operator

comes of the question next William of Maggie Our Blair. from Nolan line

Jesse Wilson

This Jesse Maggie. is on for

one pricing on work related my how be important drive Have the first for increases the a lever on business? increases. given demand to GenAI So do is been will think pricing pricing seeing? as And you able you you're

Maurizio Nicolelli

become more Jesse. to wage the more XXXX. a and X ours Sure, is years, inflation -- with Pricing has of X in particularly over focus last

transactional throughout focused say, in focusing particularly our We that an area are really price but a or is in we our within and one I bit have that but on AI a also within AI, would like to becomes GenAI, evolving, still that's that itself been where also. more pricing more business, more intensely. And bit outcome-based. really focus -- It's we want

So done I where we've it. of continue it solution It's to will a lot would on evolving we work evolve and it's say, our as build out still one set.

Jesse Wilson

for with quarters? then have for there over from your your level partnerships my Microsoft, been follow-up, Has and past change AWS historically? the more And revenues the contributing you few to seen example, in any

Rohit Kapoor

with partnerships we from and think to as build our to 'XX, Jesse, the excited and growth, likely for and announced we to opportunity up not of beyond our forward. the channel I over contribution our these driver a application that. domain is leverage important And and an think, a going partnerships but that, growth next that's So strong way The Microsoft horizontal us go for going few be market be quarters such. of to and their capabilities to functional AWS, tremendously just knowledge revenue about on we're basis the joint will, only

pretty to far, contribution a small, be channel us going but thus expect sizable for is this the So we forward. revenue fairly

Operator

Our the Puneet Jain next JPMorgan. line of from question of comes

Puneet Jain

like that And those employees' business infuse Or Rohit, AI core you that on systems who solutions like, a to create? about productivity, make more to clients' and as that you those them models improve efficient? wanted IP onto AI the you solutions talked owns ask tool your processes? use do about, I

Rohit Kapoor

Sure, Puneet.

the So solutions are creating, IP this is are by we the and these that AI proprietary owned on EXL. solutions

AI We clients. have deploying solutions multiple these our ways of for

are these cloud. AI of the All solutions on

in workflow our their so can system to their on cloud clients' operating their can workloads the this we can it and data the they We on clients' through benefit on So of what attach host on applications get platforms and we the -- deploy and that it. run these is cloud. and do it

we into lastly, operation clients' over And embed have and this ability it. that the and our deploy to take

it, forward. clients. which how what multiple on the platforms and are workflow and and of models level there our kind but maturity they'd of and So coming amount -- the what preference depends clients. that very applications because seeing have ways much work AI deploy can -- and upon the with can our on is can the the engage that their It of out of is, we of like we've in associated going the really to with client are superior this quickly. developed. They so business see very, And quickly very we these tremendous outcomes traction here benefits with flexibility we solutions a we

Puneet Jain

Analytics can across But sequentially, you cadence I know quarters? in you also like of the the share like revenue quarters? over first different grow could back-end like be few in can year throughout like more the quarter especially And this next it mentioned loaded. you half,

Rohit Kapoor

Yes, I and as that's let me address question, really important can. that try transparently I as and a think

one, an revenue overall progress our sequentially. Number should on basis,

So year-on-year should our improve sequentially. quarter quarterly rates growth --

we on an higher end what the basis. much That's year. and company off lower means So of towards overall that slightly the is start progress

is perhaps as we far Analytics the the bottom business. As Analytics of XXXX, QX was concerned, do of think

sequential QX that of growth on in QX Keep growth QX. analytics of very We from was for 'XX rate. expect strong revenue mind a Analytics

is over us Analytics But QX expect business in QX in quite for our actually of comp XXXX. the sequential should strong. you QX growth So in

of the think and the 'XX. is QX as We momentum, of through back comps QX, the easier forward go tremendous the into And returning is in the year. Analytics obviously, become a to think terms we into we this business. going progress of And rest this signal QX

in And sequential shape the we going go of to QX increase progression of year. expect should is in a as Analytics along. last basically, over So be the increase you quarter-on-quarter QX

Operator

our next for One question. moment

Mayank of from of & line the Company. Our Tandon next question comes Needham

Mayank Tandon

What's the starts short-cycle ask under months. in be your has been you normalize past XXXX? to wanted baked already that that of if guidance? that Or about words, work obviously for into the pressure for the XX-plus the you outlook have level could In I activity, work other upside? embedded to the

Rohit Kapoor

Mayank. Yes. Thanks,

So manage. cycle work you look, predict as think, I is to difficult short know, difficult to and

a very work where of portfolio. in percentage Operations, our XX% is short are the within Digital Data longer-term position annuity a XX% And small large business percentage cycle annuity contracts. fortunate to We segment, is Analytics of be is overall our a which even the long-term of of that tends contracts.

short normalize last and impacted services. was think that cycle largely got The some as particularly of that XXXX. marketing short and in well We work, analytics that, work year cycle would the as do in banking discretionary financial

We have rate. that and our guidance, our growth come in how we've that's up with into factored

expect recovery revenue face, there economic range. of weaker, our work pretty expect short we work guidance recovery environment revenue and is we in But has is top difficulties cycle the much of guidance in short growth visibility that the you to the part our to range our be would the are end the and range. towards clients our would lower is that If narrow. growth If be cycle at faster, strong our know guidance the

do tight very primarily as So And tend concerned. percentage be work. small pretty that portfolio as a to which got to has band of a our reliance on we that's in is project-based with far

Mayank Tandon

of follow-up, it getting that to Because there don't clients revenue implications the then deployments. about quick deployments, I'm of been perspective benefits. impact but of a get wanted financial to GenAI those these early What to I right, I'm on downside? a sort of GenAI the been so given accretive be more productivity as your has some if assuming your gave. on but to those implications you ask the that getting I Rohit, you're margin passing speak? examples you're love the then would financial Has know you, would And on just automation

Rohit Kapoor

Sure, sure.

rate overall entrust faster more business part. the is this more here's are low is build with growth faster the and the rate grow So to faster. deployment our the cannibalization, clients because much that and the our and ironic and The actually penetration able us we so more of

revenue AI cannibalize much a faster even And deals have with of the benefits. be us revenues typically the generative much on on -- on, do overall bigger organization that side, retained which they our particular enterprise-wide our clients, not So of deploy and are get portion while headroom are create deployed our of would this clients working that that productivity from impacting. bigger we we the the solutions they much and delivering clients our we process for grow the part normally actually to the

So on side, the positive for us. net revenue growth it's a actually

we lower we full seeing volume profitability get And better enterprise these solutions side, the margin proof-of-concept and from of the are these full certainly a it up solutions. maturity, to starts on then as off on But kind being side. scale margin these GenAI across the and as

bottom positive an about and net-net, can get we rate and it's how our So quickly advantage accelerate we us can growth how our line. for and this quickly a it's deploy to

Operator

Our the Moshe line of Wedbush next of Katri Securities. question from comes

Moshe Katri

strong results. Congrats on

having are this Maybe uptick. talk to your is attributed there win connection can an are bit You other X about, first, a rate some that spoke what's any on And uptick? here direct rates challenges? to having you peers about that win

Rohit Kapoor

and business the results pretty the Moshe. And from benefit domain and or Look, of area don't get business Thanks, benefit. differentiation amount transparent with they the get terms. customer towards greater business strategic to going are a gravitate going between as to act tangible the clients benefits deliver And losers. have to those you're and winners them therefore, will of partners where AI whole in the Yes. either a players they alongside in deploying this that viewpoint data

able the being such. prospect with, amount client we our our and growing to with base, and actually And of are the us, playing the of our as of in having business benefit portfolio deals rates success are terms we faster For therefore, are to that the a tremendous and clients. deliver base we are our increasing, size increasing win are

solutions do successfully, the amount going you're the a think of tangible it it's the create clients. ability able if differentiation. And So your efficacy of to all and benefit I business to a greater that depends to deliver on to

going to mediocre will and terms down benefit, that in the rates execution of be and are the quickly. very, delivery come you very I growth If that think win of business

that have all the this an time. stay game is area on of the you to top So

in to easy together, clients, X invested for And growth We on. early that superior an these what's on. We us. are and our in do it's able task, fortunate that in we domain AI a in early demonstrate but not that rate and on. to We invested early that's invested been resulting data we've bringing

Moshe Katri

And then deals Would some that actually because suggest you visibility? converting that in getting of deal line? convert indicated impacting flow is are that longer larger, how they're Understood. And they're kind to you taking these is the larger. or of

Rohit Kapoor

Yes.

So the for deals time is the much are them the cycle and same. definitely actually It's longer. larger not

it decisions to did much environment, benefits So be quicker they're larger to the used and clients case them in the today's business time much to the previously. want you would cycle past, actually therefore, much they if be be speed, deal, faster bolder taking than In these the delivered that longer. had a with

clients functions. are much becoming longer reason our sizes, in playing deals no geographies And in with silos, in bigger are we or these the in

and And We in the deals bigger are enterprise, the that's cycle deal because smaller actually right? data transcends across the the size. these same a playing across making enterprise across as size, time the that's is much how board,

Operator

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

David Grossman

] kind of heard kind deals. you you I earlier of AI outcome-based in engage Rohit, more that just the and in right, the allowing kind offering [ to call the said is of you if

So is? on what And can you just maybe exactly the elaborate explain that? dynamic

Rohit Kapoor

David. Yes,

it benefits. looking So just business and and business clients them In with for are to about look, our be outcomes the past, efficacy. providing used efficiency

it's quantified. Now can delivering about that more business and measured, outcomes can that be much to tangible them be

and cause business what a the clearly a As of more that that lot becomes more visible lot is benefit. in as to increase transparent

of benefit becoming investment we that the Our where us, get towards to we the in clients. having benefit outcome-based of deliver pricing the initial sharing of that with our clients open are the mechanism but can take much we an business implementation risk more

to model to the that of our clients our business to to prefer and they ability that deliver invest to benefit And risk don't want don't because upfront, they tend them. want carry

place pricing this shift are model. in we seeing a gradual So outcome-based take

is this clients, our be to it's We to advantageous to going be frankly and going advantageous think to us.

For And investment, carry us, for risk. have beneficial we need don't our initial high up business the to ability clients, it's advantageous because because benefit. they deliver don't the it's in upfront and confidence to our put they the

David Grossman

that characteristic? has example So can a perhaps us you give of that deal current an

Rohit Kapoor

Yes.

dollar shared of are in I of amount or number like in to identifying my greater we a terms deals we identifying Healthcare are them collections, and that in remarks, doing a billing where these where clients. our So receivables of prepared collect for upfront are we errors able

Our clients a are of willing percentage billing us to them. of as avoiding pay percentage that errors a we collection the as for the are or

David Grossman

guidance. on had guess was -- And margin question I your the second I

you Maybe take you're dynamics year-over-year. much of where, and you outcome-based out margin some margins flattish maybe on with dilution be to of participation of guiding upfront the of with any risk in the and affecting pricing you're taking the the may that how you is think cost said, like upfront, could share I other the XXXX? deals, wage downside these versus that being timing opportunity implementation it assuming

Maurizio Nicolelli

to are in And with margins we we guiding flat David, basis keep XXXX. Yes, XXX up points in went mind, XXXX.

uptick significant a in XXXX. had we So

for us, investments significant lot front all to GenAI As really the that that making that in a grow there's of of large Rohit opportunities opportunity us forward. talked about, going of are we're

that area for it's fairly be going year. flat our this to big keep invest and this to year, to a in going margins us so is And

significant is Now the comparable improvement. this of margin being prior years having to year flat

So this investments going within year year pivot in is a to business, the we're going AI, going to our as AOPM really really, be which and we number of be make margins. a or profit our reflected that's to in

David Grossman

across would we I they is but it, would some how relatively flat you Or mention margins, there expect year? be quarters? going all if be to missed Sorry variation Maurizio, did

Maurizio Nicolelli

No, no, no.

look will it's be line the be flat in on to when a total margin you basis, operating But with year. going So -- revenue total the XXXX. to be it quarterly at will compared it growth. in for

and the So you'll with quarterly the increase a see being then average basis right on XXXX. around a year flat lower margin for at

Operator

of from Dave comes Our the Baird. next Koning of line question

David Koning

on And I employees. guess my question is

Your I to grow was the year-over-year, say, maybe, it way for is at look which I think strongest growth, only is I good the kind I years -- to guess employees for in, revenue good XX%, future. the grew other is growth sequential X in up employees XX%. over think, think setting up of wins setting for

should at you look do done? side either way to the need I'm at of of it? we kind How the So people get looking on it revenue more

Maurizio Nicolelli

Yes. Maurizio. David, it's

year-over-year and So count with when quarter. the around XX%, our slightly end correct, fourth XX.X% you growth, a around it's basis of at the head on you're look

If being revenue but we're that investments, down, -- recognize in also fairly has growth Operations making year-over-year to in you'll Digital coming with are start It's that Analytics in we a in count head in on break that for overall. that Solutions digital you both about see XXXX, where ramping revenue X% that we'll line deals new that have implemented grown that today, XXXX. are basis, up

fourth Operations, a particularly and a XX.X% in that's also So growth that for in an investment in employees, it's the ramp-up embedded year-over-year bit quarter. Digital of

David Koning

of to in And XX%. have industry, by one been couple low quarters I only last revenue then the digits. The kind question, the emerging other markets, somewhere grew think around mid-single XXXX of

Emerging really for While the well. industries, like industry market you? are Insurance the Healthcare what's But happening and other in doing

Maurizio Nicolelli

you solid segment, So periods you our that they revenue take had extremely the those growth in within growth when previous a at mentioned. revenue Emerging look

ours that for we to year-over-year and on think a is a the significant the really group bit in that a more Emerging those of that there's you smaller a I a a pipeline, little it. all the Emerging opportunity over the segment When operate creates growth lot clients clients little new basis. it's basis different And many in. scale difficult year-over-year of of up little rates really that make very a that of comparables has in segments on segments bit And time. still at new then -- bring on look

So Emerging. within opportunity we still a see significant

rate. difficult when just growth basis, -- think makes in look at it you the comps year-over-year you terms a of it over the I little bit a

Operator

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

Vincent Colicchio

mine Yes. the adding of asked. key Most from? the about these clients some And little talk driver in verticals they new was bit of in a quarter. were Curious, what Rohit, can if clients? you come AI do added a

Rohit Kapoor

Vincent. Sure,

for we we up full And pleased clients. at pace we clients. that are XX very year, added all, good. of first adding of we So adding are new very also the new clients with the very, are which quality are The

we XXXX within So large up. like deals there clients are of Fortune these are clients. that that of And a some deals this are number are signing mentioned, we

industry different a Keep Amongst Insurance we amount that of pretty industry vertical industries. is the growth Emerging Emerging verticals, of clearly, sub diversified traction. industry seeing and And in number across tremendous growth the is industry our seeing then are also vertical in a the mind vertical. well

that see across. trend we So

scaling We are up signing that up their companies are some businesses.

growth companies terms up, of are we signed companies. so seeing And number a in of that size we've of

and global mature a We are number companies. of a number of size companies seeing

growth a Europe rate stronger. seeing also and U.K. in to be We're

thing client the diversify with good business our the are a And we'd logos us more the globe. for across quality pace and signing lot be of been a up. that's to because we've able new So to we happy that love very

Vincent Colicchio

And marketing analytics growth the your in did right, return second meet in to heard you quarter? you if a expect I half. expectations the And

gives you If color more on us little give what can confidence? a bit you

Rohit Kapoor

Sure.

of marketing in not and increases. know, come because get had to in a down had Services, carriers you -- in It's So marketing us, different it's Insurance, analytics, significantly being Financial in analytics segments. able to Insurance, is slowed as quite number were for it's Banking Healthcare. price In

are last go into market, seeing has to couple acquisition seeing regulators new insurance And of the changed initial of take pricing. companies regulators and increase we're quarters, the insurance Over customers are that now -- that place. of therefore, carriers signs allowing back and we

marketing expect or that stabilize XXXX. interest If interest gone and rates Within the to customers new up, and customers. acquisition here start of had Banks would Services, rates Financial Financial for we have restart in move Banking out dried up will again the and that the the new Services therefore, down,

in think us lot we it new vertical opportunity. Healthcare a that a as then started much revenue And a for Is up revenue a of for 'XX. new we segment we'd to from we we And picked industry number 'XX. to as got payers And in in. and us more No, get? like different there's was the target

to get out been base there. that's on very a love we'd nice more such. that So up lot as revenue got a But we've built

is year. second So able terms continue our compared on some be of things then will growth QX And 'XX see themselves, as should to be expectation reverse absolute higher the we 'XX. of in that dollar should these the Analytics that out to to in QX -- half and of in certainly

Operator

to like I'm showing Kristoff turn would at I remarks. now further this back closing questions time. no it for to John

John Kristoff

what your on conducting investors on our just event be mark we to details X. Thank ]. Session This are for wanted follow individual Strategy May But a Rivka your I and And for going [ Rohit a questions. City be you, always, And with reiterate call calendars. in live to Thank forthcoming New as held that will you. joining said, be Update me please you today. up thank York event. with will

Operator

your Thank program. does participation you for This conference. conclude today's in the

disconnect. You may now

ExlService (EXLS) 29 Feb 242023 Q4 Earnings call transcript