ExlService Holdings, Inc. Q2 FY2025 earnings call

• Rohit Kapoor noted a strong quarter with $514 million revenue, 15% YOY growth, and adjusted EPS up 20% to $0.49 per share. • Segments showed momentum: insurance (1/3 revenue) had stable growth, health care/life sciences (1/4 revenue) was fastest growing, banking/capital markets/diversified industries (nearly 1/4 revenue) had 4 consecutive quarters of accelerating growth, and international growth markets (18% revenue) grew via new clients and existing client ramp-ups. • Data and AI-led revenue increased 17% YOY to 54% of total revenue. • EXL has differentiated with a focus on domain-specific complex workflows, high renewal rates (>75% recurring revenue), and extensive data/AI solution portfolio. • Launched proprietary LLMs in insurance, finance, and health care; expanded EXLerate.AI platform; and formed partnerships like with Genesys.

In the second quarter, ExlService generated revenue of $514 million. The insurance segment grew 8.6% year-over-year with revenue of $172.2 million, representing 1/3 of total revenue. The Health Care and Life Sciences segment reported revenue of $129.5 million, growing 22% year-over-year and 3.1% sequentially, representing 1/4 of revenue. The Banking, Capital Markets and Diversified Industries segment had revenue of $121.1 million, growing 15.8% year-over-year and 2.7% sequentially, nearly 1/4 of revenue. The International Growth Markets segment generated $91.7 million, up 15% year-over-year and 4.7% sequentially, accounting for 18% of total revenue.

• Revised full-year 2025 revenue guidance to $2.05 billion to $2.07 billion, representing 12-13% YOY growth (constant currency). • Adjusted EPS guidance revised to $1.86 to $1.90, representing 13-15% YOY growth. • Anticipates foreign exchange gain of ~$4M to $5M, net interest expense ~$1M, and effective tax rate 22-23%. • Capital expenditures expected to be $50M to $55M.

• General economic conditions could impact results. • Factors set forth in the press release, periodic reports, and SEC filings that could cause actual results to differ from forward-looking statements. • Risks related to AI disruption affecting low-value work, though EXL has avoided such work.

Q: David Koning asked about employee costs and other costs in cost of services.

A: Maurizio Nicolelli said employee costs reflect hiring highly skilled talent for data/AI, and other costs decreased due to absence of prior year restructuring charges.