EXLS - Earnings call transcript Q3 2024 | ExlService Holdings, Inc.

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Operator

Hello, and welcome to the ExlService Holdings, Inc. Q3 2024 Earnings Call. [Operator Instructions] Also a reminder, this conference is being recorded today.

If you have any objections, please disconnect at this time.

I will now turn the call over to John Kristoff, Vice President of Investor Relations.

John Kristoff

Leila. Thanks, you Third thank Results XXXX joining Call. Conference for and Quarter EXL's Financial Hello,

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

an opportunity we release afternoon. We hope yesterday you to the earnings issued third review press quarter had

We posted deck a and in fact sheet have Investor website. Relations also the section slide investor of our

by implied to time. Please forward-looking the in periodic SEC differ As we'll or reports discuss actual subject conditions, forward-looking. some Such statements economic are these those to that include, uncertainties of factors cause matters filed from and set and and time keep other the but company's reminder, documents materially risks mind today's a morning and with in discussed are such could expressed unknown uncertainties known are forth this from that the limited release, general statements. those to not to, in risks press results

to presented no assumes on the today. call obligation EXL conference this update information

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

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

Rohit Kapoor

million, In everyone. results. Thanks, increase the be Call. of I'm third with Third we John. pleased an Good Welcome financial Quarter quarter, morning, revenue to our XX% reviewing you EXL's to XXXX $XXX of strong Earnings year-over-year. this generated morning

We also $X.XX XX% to per share. grew quarter by third adjusted EPS

both and are of quarter. This the year-over-year. growth on quarterly the for of we accelerate our delivering and quarters. accelerate XX% million Analytics our we And the revenue data growth year-over-year Solutions for strategy XXXX. Operations and further us our across second AI-led enabled sequential $XXX quarter, stated analytics previously half Analytics both sequentially to and in growth The of Digital the delivered our up In during in X businesses our sound execution Analytics, objective sequentially strongest to and X% momentum marks

double-digit management. across care strong continue data growth health services drive and payment We to

While services discretionary markets, across for demand we care banking. we in vertical analytics growth including remain cautious are insurance, and on seeing health overall our projects,

the Operations growth X strong by delivered and as to domain, Solutions sequentially we our our we of win market. revenue growth business This AI data was capabilities during and our driven Digital We year-over-year third segments. X% leverage quarter, acceleration revenue across In XX% double-digit in the operations all $XXX million. grew to double-digit digital and

focus environment by experience digital stable to in and driven continue and our a operations, efficiency demand digital favorable We clients' on transformation. cost

addressable to our not total Our only and expertise, and AI, our domain clients from but achieve it our capabilities benefits us runway competitors, delivery data services expands strategy AI for growth. real-world management from differentiates our helps leverage also extends our market

is This double to is in beginning pipeline, itself strong up digits manifest our which sales year-to-date.

by our value our the have grown recognized large capabilities as confidence solutions clients. deals contract of This year-over-year. and are We industry-leading us gives $XX in more by total than million that over XX% being number

would provide capabilities: primary it of innings, modernization early new how to AI, AI details data While generative is and still X our streams revenue I with implementation. particularly across on are building we like

data, foundational in migrate This all securing and model Let me to of we application. high-quality includes data, AI for pipelines. structure by describe build and cloud start structuring AI, data clients' including data our helping To asset with modernization them optimizing more business data aspects the our the data reliable, each area. gather any estate, implement robust data,

with existing expanded Data capacity of with enhances ITI the client not our capabilities with management AI and talent Databricks-certified grows the Databricks banking. of and acquisition for data our footprint to into and partnership continued clients. new our deploying engineering and data cutting-edge ecosystem. we in only the Data building data implementation generative expanded our of have our solutions management speeding during of actions acquisition We data partnership are solutions development are modernization team quarter robust Together, a ITI Databricks, enhance Under these Databricks. The our but strategic the also

data place, for foundation models Once cost, in the and the we is the select to of embed and combination optimize latency workflow into accuracy. AI in best order

AI adoption technical to effective architecture agents expertise tasks. of the but business into the advanced deliver models in fine-tune pretrained the are provide language designing domain These requires context loop. and deep then to outcomes. along suited repertoire superior intelligent AI includes workflow, with not in targeted also models most domain-specific knowledge This AI only Our increase models models, and integrated for human

One by documents An detection for Agentic example multinational AI frameworks in into the focuses agent drive specializes system illustrative The on them these to all stages against involves pharmaceutical client the each on based identifying findings client specific where AI have AI we collaborate cover a for from Together, processes another anomaly AI developed auditors. generating compliance while large summarizing audit risks recommendations actionable analyzing improvements. industry issues, agent needs process. to audit multi-agent their contextualizing significant integrated AI of audit. various of handles aspects audit to we agents and

audit is completion and one and to in EXL tangible overall deliver our just and accuracy has how today their in real-world compliance of This leveraging for AI time to reduction domain, our its benefits been clients. XX% assurance. client result improvement greater expertise is data a example The

proprietary a services, we addition in developed AI number our capabilities In to and solutions. data modernization of generative AI implementation have

designed insurance handle example auto claims. general which injury, to announced nuances of bodily liability specifically is workers' compensation recently and our is the LLM, One prominent

insurer. and casualty have regional built was and LLM; proprietary and casualty the We with than LLM clients in Our live experience of EXL's XX this a claims-related on large decade insurer a data. of currently years X insurance more life U.S.-based a industry

insurance improve its our and LLM fine-tune multiple access to proprietary performance. implement we can further LLM data we our clients, sets across As additional

of We to driver additional clients. IP domain-specific intend productivity and lower a developing claim out by combination continue our faster autonomous enhanced The resolution our is LLMs and proprietary including powerful costs going new agents. solutions, for to leakage indemnity and with claims forward value build

enterprise agent now platform pleased embed platform. of as We on based as new the development revenue offer AI these can can AI that these into stand-alone solutions to or integral solution recently solutions contracts accelerate long-term perspective, code our them I'm part and From an we the this proprietary services solutions, live say AI a we EXL And client needs. smart to of overall launched solutions leveraging harbor insurance NVIDIA LLM, software. on are assist

retain One the keys the industry. advantage AI talent of ability is develop and competitive in to maintaining attract, the in to best data our our and

data comes Global leader management to Our to an end, experience diverse foster practice. talent attract leadership that Accenture. is across Sanjay and extensive top welcomed EXL To building as we to practice We goal Sanjay conducive continuous recently environment a large, innovation at practices to our employees. with Leader senior President clients. Joshi, Senior continue XX,XXX recently data to our served most amongst data for than EXL. more Vice as He

where insurance Varanasi for from Insurance led years' Analytics. and Sarat a He he recently Global nearly Cognizant Insurance most XX America has their addition, Sarat in industry. joined Leader as joins as consulting In North Vice us unit. business Senior recently the experience EXL President leader

to continue in employee invest development. also heavily We

platforms, year. Our we NVIDIA, data from on critical million partner have partners' of employees of have this our hours and include completed platforms and X Google, have training our AI and Azure. completed nearly training X,XXX Nearly engineers These another AWS enrolled. Microsoft Databricks, XXX certification certifications

of We to but work a are are helping them growth with by enabling The has highly skilled talent. and growing AI them a stable career creating employees not our attrition a opportunities purpose only marketable also environment. result add skills, levels been we for in pool

we results businesses. delivered puts are by growth in expanding and the operations strong in solutions AI-led data AI-based investments in analytics to third and continue industry our strong our trajectory. execute partnerships quarter are the a summary, digital position of successfully across and employees and strategy encouraged and The us developing solutions our and on new acceleration developing making we our growth continued we In our

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

Maurizio Nicolelli

and Rohit, the revenue for for performance everyone, joining quarter revised a X financial million, outlook third year. $XXX.X strong year-over-year of morning. on our quarter into you, insights basis. us with ended thanks, third Thank provide September this full up for months We I by a and our reported will delivered XX.X% the followed XX,

Adjusted quarter. XX.X%. of to $X.XX, for is from basis, a XX.X% On sequentially. a nonrecurring repeat revenue and Approximately year-over-year revenue increase that our grew X% of X.X% expected constant quarter the not the this year-over-year quarter in subsequent came currency revenue was we EPS

digital revenue businesses from revenue All quarter grew hereafter our the was a are on by XXXX, percentages operations ]. Sequentially, represents from analytics, mentioned (sic) XX.X% growth which year-over-year and segments, X.X%. $XXX.X Revenue second currency growth excluding reportable solutions as X XX.X% of million, [ constant of we defined basis.

year-over-year and grew sequentially. we Insurance was vertical the generated an and new operations of wins. ramp-up with and the This insurance In consisting increase expansion of analytics existing million. of revenue by our segment, driven growth both of solutions of $XXX revenue relationships $XXX.X client client digital XX.X% year-over-year and of businesses XX.X% X.X% The million,

Emerging In million. we of expansion revenue year-over-year analytics relationships revenue and sequentially wins primarily of grew our segment, $XX client digital existing new of with million. was driven XXXX. client to operations The Emerging the growth of by grew ramp-up X.X% and This both year-over-year solutions XX.X% $XXX.X businesses in and XX.X% consisting vertical and

was of and client volumes sequentially. our year-over-year grew digital and higher vertical driven business. businesses in of of revenue and existing XX.X% The our consisting year-over-year relationships clinical million, This growth Healthcare of $XXX.X operations XX.X% reported segment services revenue X.X% by with growing The million. and expansion analytics Healthcare solutions $XX.X

was we segment, analytics client Analytics in higher year-over-year in existing generated payment management relationships in expansion and our the by new up of Growth sequentially. XX.X% services, $XXX driven businesses. and volumes in client and services data Analytics In revenue X% wins million,

SG&A driven points of down XX revenue year-over-year expenses as a basis XX.X%, were operating by percentage to leverage.

in quarter driven on year-over-year, operating XX higher margin new down adjusted basis XX.X%, points the was by opened for Our operating centers XXXX. depreciation

XX down by the driven rate basis XX.X%, profits jurisdictions. was points effective Our for was tax higher tax This in year-over-year. lower quarter

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

our Turning months performance. X to

up a Adjusted was $X.XX operating XX.X%, Our Analytics revenue a margin Solutions down grew was XX.X% currency on Year-over-year, and and on X.X%. XX.X% Operations constant constant XX.X% basis. for XX Digital year-over-year period year-over-year. on basis currency the period basis, billion, the up basis for a reported points

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

strong. remains sheet balance Our

short- September third flow cash, of of long-term a $XXX.X million, debt was position our management. in million operations $XX improved the of XX% and profitability Our working driven year-over-year from and quarter increase capital investments million was including generated revolver debt as $XXX to million. $XXX million by compared $XX.X a and for XX cash net We

we During This the share expenditures shares as previously for first received repurchase at X million average per $XX.XX X approximately million of announced part repurchased $XXX.X million. and plan. X.X million $XXX of share a million our accelerated months, on spent includes $XX approximately cost shares capital an of total

now at $X.XXX represents and year-over-year year-to-date to our the This basis. reported revenue range outlook representing billion. current raising XX% from basis are visibility on year, an on earnings revenue $X.XXX the billion increase approximately our midpoint guidance. to we strong XX% performance our on on growth to in of full million XXXX. previous our constant the a a of of the for of remainder We moving billion, guidance XX% to $X.XXX of billion $XX currency be to year and the $X.XX Based Now anticipate and for

The current from $X million million $X assumes of to ITI still revenue Data. guidance

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

AI similar and to data also fourth the the increased pattern anticipate We in last year. quarter in investments

is anticipate assumptions, in to ITI adjusted EPS to EPS an adjusted these $X.XX, prior in representing neutral XXXX. to we our be our be on acquisition expected growth Data range is $X.XX. from This of year-over-year of increase $X.XX EPS to adjusted of Based guidance The the XX%. XX% $X.XX to to

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

in and summary, our results pleased growth fourth data By acceleration our with encouraged are beyond. are our and our into quarter momentum across In ability double-digit in invest our by of and the we we third continuing to confident AI-led our strategy, all growth business quarter maintain of segments. to the trajectory

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

Operator

first Our Surinder [Operator from Thind Instructions] from question Jefferies. comes

Surinder Thind

are question the I'd a in AI models. models idea Is yourself? like point? build-out to strategy to of how proprietary broader you proprietary the the And fit many hyperscalers at start as parties well that as industry-specific here of build Can the company about guess, also the this models of ecosystem with talk as about maybe in you does that these more in by at of being essentially, the solutions more their third of the of point? are what are developers. sense the software traditional software I this a building terms becoming much built maybe

Rohit Kapoor

Sure, Surinder.

So let take me that. try and

and autonomous you have AI is belief So of first off, agents will AI, language ecosystem an models. that large Agentic models, proprietary our

whole going to a or an types Each own on is or ultimately a useful and there. process capabilities relevant being manage be combination host these be achieve a able one entire task to goal to being undertake have to that you're So an able of different to capabilities of are for either these going are a objective. of its going using

The thinking responsiveness have first AI proprietary in marketplace. out What that the the have we At and seen or what anything that insurance competency in we productivity which very those models might we any proprietary. own as cost using latency would of be EXL, far domain a today LLM available our and to we is, low, therefore, have is areas sets is real-time what's where about in the our other than that get of are marketplace. can for are build paid the access fraction the greater the building hyperscalers and that is out LLM be LLMs available data we we of

of developed proprietary to the best frankly, models Does of together terms in two, balance cannot our for to the So capability and to marketplace; productivity, be language in proprietary build can we make twofold: AI by create create one, able that AI stitch embed and models optimize own be can strategy differentiation large sense? agents our be benefit Agentic is appropriate where cost. latency we the to for us able others and models, client capabilities, that autonomous AI the and to

Surinder Thind

the enter just then you of Can a bit kind Yes. Is with more there's traditional an R&D build where to a investment it period of kind of view. required? CapEx, that's That's this level investments to helpful. out? the continue models? you Or And elevated be of perhaps from near-term bit of talk these some about of of arms to we a first build a do race slightly the

Rohit Kapoor

that, Sure. and as Maurizio can to address I'm add well. to that happy

And be for up technological viewpoint our to is tools the to and can of be build landscape, proprietary level So we rapidly to processes. that to in greater going models there as able evolving significantly investment. a our general, to leveraged on as OpEx be create on need with client and in is stepping be our CapEx well investments at able capabilities much a be will EXL, both these

investments And capability. because specific the we stay we've to that changing way forward In this, the significant year the are on in we can so Maurizio quarter will because -- and Maurizio? and as talk this investing ahead need we go be which going make we that can continue amount forward. highlighted is as rapidly, that's these in about investment only necessary will fourth a landscape

Maurizio Nicolelli

us of particularly When OpEx just in to from Really making to over look And said. line what in the investment really be X kind next will value P&L really X you P&L, our in investments, be Rohit by overall margin. going to gross the Rohit. more our we at add to Sure, just that's years. driving funded

on that provide an margin driving by data this particularly services do in order gross grow our if we to value really to Our that to fund in we needs price But clients start increase AI. and to investment. higher

offset So higher AOPM higher basis of an not an in forward seeing going a forward flowing what a basis, into increase and that significant up an increase, but an on investments our going margin amount you'll gross on annual incremental increase a by is end forward. going annual

Operator

will TD Bryan come next Our question from Cowen. with Bergin

Bryan Bergin

start with wanted Operations. Digital to I

quarter strong Another here organic on growth.

you to industries? ops sustaining Let's and growth ask conviction Do the see contributing growth medium-term here. elevated relative higher have And outlook in on your in a the potential near-term been of industries and sustainability any good to particular level this it's digital of higher conviction the for segment. all

Rohit Kapoor

Sure, Bryan.

our very And actually, business. quarters. think are of it's So been rate that growth we've elevated all, in a of we at of look strong. first seen a with services for pleased number of continues I growth our rate. at the be operations a the When And this of the take demand environment we digital for growth operations, bit acceleration digital to

look growing what the of is When And large to increase. deals actually number very previously, continues the a also take of is at we've pipeline, nicely. and our shared value large pipeline deals see pipeline our in that the we as we

signs the of very So the digital demand growth these in environment, pipeline and ability all operations. to encouraging frankly, revenue generate are our about

Number Operations revenue one, couple of digital segment. would Digital are everything do of -- like in pure part to of of as included things a There I that which kind is digital highlight. selling terms we our

a revenue but Digital the digital includes growth basis. stand-alone Operations segment from that that derived that includes we So operations, it the on sold in also revenue capabilities from all our to and all the the derive revenue clients are we

growing the stand-alone basis. a operations digital on digital more core capabilities than much rapidly piece the are Obviously,

we're the in strength strength frankly, in emerging board. of And strength take see industry health globally. We're this seeing care insurance. terms our unit. seeing segments, seeing we're and in In it across We business broad place

in as U.S. well Zealand. in U.K., and Europe and Australia seeing are So New we as this the strength in

there on terms So forward to seems in this. shift a of moving be secular broad

expectation is forward, would sustainable able would And Going that's in trajectory. grow our would our what and be of kind a be to something be us, that be operations we double-digit that should that we still targeting. digital for low business a

Bryan Bergin

notable balance Okay. just shifting fourth And are analytics? remains customer sounds about analytics, growth the to Management and decisioning solid. view Payment just any how it marketing Understood. Integrity forecasting analytics? And in What then and analytics, you just like of Data the in quarter changes the

Rohit Kapoor

Sure.

think I in look, So has growth the accelerated. we very, analytics, happy that are very business

We are as alongside line seeing line. with management be payment analytics growing well well data business our services as our to integrity as business

some are more lot in think out and a that reflected pipeline, there. we deals we see I is of again seeing the the many strength very nicely

cycle The but are value to associated very, our volatility business of always be there derive level business analytics traction that And thing business. higher they the seeing is with only shorter this be nicely. that with the from the the we and resonating our very therefore, and fundamentals here here, note underlying that's a will clients a will fairly business, services

Bryan Bergin

quarter? on commentary fourth the Any

Maurizio Nicolelli

Yes, the quarter our analytics. about fourth for view for

Rohit Kapoor

Sorry.

than therefore, would getting we quarter. itself our do we XXXX, see that Analytics will both low business think fourth fourth forward. we our business for expect quarter, digital going year. look, expect And would had had guided to calendar to the grow our we business kind For guided that continue. the of trend momentum slightly in year faster we But the growth When double-digit I business to lines rates operations this maintain

Maurizio Nicolelli

the on look flat QX. And year, Bryan, between you analytics we when to keep revenue mind, and fairly in at were QX prior

revenue an rate, to into So continue reflected going you continues and would that as see in this QX. growth QX, the do we total increase QX, QX, increase, in that's see been now and you as momentum

Operator

Nolan The from next with question Maggie Blair. will come William

Margaret Nolan

ops larger the deals you rates Is in assessing a for are there change your business? of note digital How conversion anything of there? to risk

Rohit Kapoor

the deals and able little conversion it our we tend what our ramp to deals rates the amount us to and rates the bit but as so be more win large large see about up a lumpy, portfolio. for actually, Clearly, to rest deals. with takes large same fair of be the the is implement a in of Maggie, time

a we've competitiveness we've amount got our pipeline, in the and deals with still we So won as good seem be to And of in terms which 'XX. that think shared a got very be far, client in the associated in of we win fair of we've need and deals. place a implemented large of into amount traction terms forward I of to going our wins, rates fair kind

Margaret Nolan

terms segment the can synergies commentary acquisition in particular, organically some of And you give data is and versus in so management, data what and in your adding success analytics on organically far? the in

Rohit Kapoor

Sure.

of place. organic having us So we for but largely our coming back, had certainly out impact in analytics material is been really seeing portfolio of data has not taking data analytics, our And demand is growth and services. on are now the frankly, therefore, there, analytics the analytics reversion a business growth therefore, on business. XX% us less that a of declined, for much Marketing of than and

a add acquisition if an still. have of ITI, organic grow been came ITI X% our growth would revenue to excluded years between of The But segment quarter. very we have third X on to nicely in our revenue number basis. are analytics management part, that data the the of XX% growth The from that did built over capabilities the growth continue the that to there we last

a accelerate growth So still continues acquisition to ITI. healthy excluding actually, of rate it's the after even pretty still and it's

Margaret Nolan

results. on the Congrats

Operator

will come Our Puneet next Jain from JPMorgan. from question

Puneet Jain

data the analytics. Great up question about wanted quarter. follow I Maggie on asked the and like that to

the and stuff for an that segment came the offer like basis, or XX% AI building and mentioned, on that organic now. to services X% Clairvoyant do example, segment, from Like ago? ITI, much years of didn't X stems like you say, analytics you models the like right X management, that through data How So you're segment, overall Rohit. the

ago? segment comes from of you X that much how years services offer that didn't overall So

Rohit Kapoor

the Puneet. quite think capabilities done. of to reporting Thanks, services the to used analytics business used that the a be used fair continue And data I done, amount have lot is visualization data that past, be Look, and that there to we to the In of rapidly. kind of changing evolve. a of be kind

completely of we've services. has and All complex that analytical much changed, AI more much moved and towards more

The adds Amazon, us data each to with these out of data rapidly. that the nicely we hyperscalers of to that adding management the analytics that The Google, our ability to the we are for build with growth very our Databricks part partnership with continues have and partnership to with grow with business. this but rate also the Microsoft, all have

big shifting the thing Analytics which and and from also include is clients us the Officer Technology with center think as the to gain the this in space Chief confidence Information I buying Chief Chief is Officer the Officer.

that's think very build also helping grow and us nicely. business this I

much that that's evolution that now taking business. in our a that. is that for me We say on versus data new coming of of services we share Analytics Decision old. don't on how have really Hard there's lot growth place to frankly, So externally right from

Puneet Jain

but you insurance about talked the fair And earlier. then for That's explanation. thanks LLM

LLMs? those use build do tied proprietary of like are any you I tasks solutions? be data you these like know industry-specific can some automation like are models? you which of of on to much existing had a allowed you like or processes but follow-up build using data, these some that specific models, to use some achieved train as to be these So client, would not how what And AI data to clients'

Rohit Kapoor

Sure.

able which us data, expressed to we So our give we first by absolutely clients off, trained use has be the that that insurance clients only data data, LLM written able set. be and on use the to permissioning have and been And to contractual to permission our rights use.

a lot data it injury, XX those liability. at allow carriers that's to is auto set this of compensation over last that data on the and insurance This that the got data, to our medical use us years, take used claims-related you If and a train look bodily from carriers insurance LLM. we've work insurance workers' we've

have as out. data what result was basically, was a finally got that of what was claim and that incident comes the is we a claim is So the that the incidents that a that sets in, what took settled when and paid outcome what place

be very identified data It's improve to that which to so because with it's perspective, allows It share is health and us they valuable are it to that time basically out. comes personal a data can be personal in, PII set settled, Now willing information. best PHI. know not is claim client is use a that paid really, not derivative the models not to train you that we information, pathway and able so next new it's And data from to LLM. accuracy set, a really continuously our we for because claim already negotiated the what of the that

our be continue productivity and And in. to we terms that the expert actually fine-tune going an from deploy of accuracy operations, as LLMs become data sets them, can and be these our LLMs we deployed and to really more therefore, train in client LLM insurance can in getting we are and the these more and

a cases. Now privileged use able institutions the then to particular types banking ability do industry, for that a to be banks to these carriers industry of in into keep it in it's case of pretty mind because we other financial makes data we having position take develop in use expand with we narrow from is a case narrow LLMs. And and set payers or and unique or that in industry in much to a where we work be particular use player that our it that access so are do going how and us a

what to are clients. about ability process we proprietary our models creating the our and allowing knowledge and domain us, access for handling what's these our finding differentiation be expertise, build is able this what that's combined the That's for with to data. to And is our us

Operator

from come next from David Our Koning will RW Baird. question

David Koning

Okay.

that. about Sorry

like to growing it the is of biggest serving? of seems functionality most lot do Is I or just a the faster seem doing So than what lot both you stuff you're is has guess, competitors? recently, your some X X Like IT, that are high-level it struggled the clients industry like yet cetera, of better? a et you're differentiators significantly mix guys perspective, think the it serving and you just be from a BPO, you're that of doing compared just to you're -- industries

Rohit Kapoor

Yes, Dave.

to to our one the believe execution, two our in we customer capability. we in commitments to clients. On business, the able think maniacal we've And the I and that look, the quarter, satisfaction being we've survey highest down is results. And our of it completed X customer execution in ultimately outstanding deliver ingredients. the to terms scores got that been and satisfaction in is boils So third absolutely just essential of annual make we industry. we in have One

in referenceability business stands And prospects generally faster our able in other existing that at it acceptance to industry, and grow and I the kind results clients by a our us think players and being of to out, our to pace.

is capability. The second aspect

clients. be market in and little were relevant processes investing analytics, of we and think into capability digital in can in embedded our building the a investing bit that operations of just terms up early I

So our today, win capability and differentiated to integrate able trying into ability when in been capability, business. our healthy we've execute to that every and find our build to workflow. single are the to rates and is on therefore, grow very that AI client our and be embed They

ahead the continue well, important. And think relevant capability need to able clients. invest to So these we and will our more a a to X be for stay very go-forward I basis, will to be partner much to front things and on continue execute on are we

David Koning

organically, But or I like to accelerate guess mean analytics, been question, I that guys that also And accelerated had it but so better. quarters quarter. crushing analytics this seems on basis the maybe so falls? last And Is where it's ITI it. X much? or you follow-up didn't why growth a give so, flattish, for it are year-over-year my about insurance take, XX% doing or insurance

Rohit Kapoor

analytics, a and stream has but health in couple the where analytics banking It much declined year-over-year It's from. largely services. a marketing different it. is firstly, And something that previously marketing got has analytics of care, on little insurance in on we've shared ITI it. came stabilized. and that's with bit was So most analytics to revenue the pieces pretty focused have as of Insurance that in did you

the that's So huge And value a we are do indemnity the We amount our critical around clients. a that There a work which services longer of we insurance services do around provide spend. therefore, work. work something that is no analytics insurance and to aspect of actuarial is drag.

that to is That like able of growing be seeing as leadership strongly and well. being within aspect as good traction And insurance for up analytics here that's growing out management management resonating becomes on critical continue systems, capacity we've and data element, data seems is grow have of to and the other carriers well. platforms One most well. invested kind we're nicely we and also building got in therefore, that. said, insurance and And to legacy a them

Operator

Stifel will question come from with Grossman next Europe. Our David

David Grossman

you is to that. there the understand better the you refine I you're fairly quite units, sure several bucket. the elements it kind us includes you the us do in mentioned that further growth whatever better the some versus pure that can of mentioned, of now. including pricing not help what understand could exactly As core business? growth for could I'm you help it's of in legacy ops revenue. quarters digital But dynamics anything digital been And know it you perhaps Rohit, strong

Rohit Kapoor

David. Sure,

So which from clients that up we have is break can our us we on revenue the stand-alone One X basis. first digital solutions created, pieces. all, broadly have, that into digital a digital buy you of the revenue

sharply. So think bucket regardless of very about as therefore, their this solutions operations or growing clients tools digital whether want and us platforms give they our or that's nicely one to not. that us bucket, And been enterprise, and very for has the leverage across or that

the digital on embed with side it are and operating embedded work workflow. that part our workflow and clients' we we is doing, that we it's gets the second digital combine work The the into digitizing operations and therefore,

that this tend is of to us. both integrated buy an and much of -- So from they these more service

within digital. the So X those are elements

number towards of forward that but winning and deals that low the only been future can we there a digital should has fortunate work incremental are we've apply deliver presently players is delivery, them. how value, there levels. service out they execute large to and naturally been can to and thinking what gravitate that operations and deliver rate And at for managed not clients, growth we've are that about our those and think at value seeing exceptional be when is be deliver that elevated they data, analytics, high them can apply of apply And can cost those accelerated able also

David Grossman

technology sold you the these solutions tool? that are model? that are mentioned, Is a So like revenue those as stand-alone

Rohit Kapoor

that's Yes, correct.

David Grossman

how just how big And are? you can dimension components big these

Rohit Kapoor

difficult they'll for shared tool, are well buy. the do as to are not for David, me tool that with on the clients But of buy client. tool as and in the these data also that the services We've it's to be that license will externally. need that. kind a of implementation mind, fee associated by that tools purchased the pay there Keep

but software time this service. environment, are paying buying they from for us any them that use we us, have to that in fee into their charge being us implement to IP we and license also able is a client that, for and come they're asking our So this

David Grossman

Right.

the is up? to gross -- to continue need margin impact Is that in we -- fund the what go to you I margin? talked should shift mean there ops So expect in incremental I when investment, about is gross that the mean mix

Rohit Kapoor

go stand-alone the certainly these to kind be as margin we built, because up scale, expect So us on the provide we with able of would is it get solution solutions, gross keep once to should But gross margins. higher that or scale, don't that gross is new drag lower margin it's on actually, the and introduced X in margin. mind size a a the or in gross initial we actually we when have every years because single X tool

the So tools and are we and portfolio solutions. how fast achieving it are and scale really introducing in fast we solutions depends existing new on how

David Grossman

Got it.

just more. sorry, one And

quarter-to-quarter not of Is year? on line. are we to Just margins Or see unique the -- volatility going going that the EBIT it's to volatility hard this that in to forward well? kind as notice

Maurizio Nicolelli

Maurizio. it's David,

half little bit The a and now started you're about a We around It right this in with average lower was do believe be it XX.X%. the in volatility year the seen margin year. XX.X%. And around we QX. of with will first increased of right for XX.X% year. the XX.X%, Last was half line in You've to last AOPM right XX.X%. QX, seeing second year XX%

have we little investments we're So of a to we in a QX. higher talked do bit want in QX. number Rohit But make as about, that

really you've on got at to this basis. think annual I an So look

manage it basis about of annual and incrementally stress little will bit that trajectory. the volatility, the I at but less We marginally. have AOPM on an a margin think annual the But quarter-to-quarter, would builds really so quarters we'll looking

Operator

Colicchio Our last question Barrington will Associates. come from with Vincent Research

Vincent Colicchio

Rohit, new relevant can Were outsourcing? Were quarter? to new added them the in other large? you they about deals commentary? Any the particularly talk any of

Rohit Kapoor

Sure, Vincent.

business. with operations the quarter. pretty and So our new digital well I deals we are this our spread we think business out very that between analytics won It's happy

client it's It won, the and the names. terms XXXX Global the pretty In that XXXX includes of the much quality some to past. Fortune quality we deals of and the of names logos similar

the And are be ramp would significant should those couple up expect next to there we for So that are always deals therefore, us. there large great. a over of few quarters. And

quarters, from kind this of that this pretty So we of the complexion and nothing previous much deals in -- same would quality have quarter. different so won

Vincent Colicchio

the your allocation substantial are valuations a Maurizio, And are pipeline? market? you thinking? could And you How seeing in M&A reiterate capital

Maurizio Nicolelli

Sure.

assets opportunities we're of strategic in terms market. very selective be market, to of come continue we the the M&A in Obviously, to to So that going us. to see and value plenty

a forward, management of to different base. we particularly our in data more for really Going client capability expand number drive also purchased reasons, ITI and

that allocated Going activity, million gotten this repurchase, forward, to share capital a of relatively year. a on repurchase. M&A and slightly good we'll continue we've price north allocate both Share on those $XXX repurchase just very to share. -- $XX And about we've

really forward, and trajectory balanced M&A repurchase. allocation So capital fairly you'll going between see tailored a share

Operator

We call have the to questions no closing for Kristoff back time. further turn at I this will remarks. John

John Kristoff

Okay. joining additional everyone to always, Well, if to questions, reach directly. as morning. Thank And you I'd feel to for us me this out like free have please thank you.

ExlService (EXLS) 30 Oct 242024 Q3 Earnings call transcript