Core Viewpoint - Growth investors are increasingly focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - ExlService Holdings (EXLS) is currently highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth indicating strong prospects [3] - ExlService Holdings has a historical EPS growth rate of 20%, with projected EPS growth of 15.4% this year, significantly surpassing the industry average of 8.9% [4] Group 3: Cash Flow Growth - High cash flow growth is essential for growth-oriented companies, allowing them to fund new projects without external financing [5] - ExlService Holdings has a year-over-year cash flow growth of 2.1%, exceeding the industry average of 1.7% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 10.6%, compared to the industry average of 8.6% [6] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [7] - Current-year earnings estimates for ExlService Holdings have been revised upward, with the Zacks Consensus Estimate increasing by 0.1% over the past month [8] Group 5: Overall Positioning - ExlService Holdings has achieved a Growth Score of A and a Zacks Rank of 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [10]

Core Insights - EXL has been recognized as a Leader in Everest Group's Property and Casualty (P&C) Insurance BPS PEAK Matrix Assessment 2025, highlighting its strong position in the industry [1][3]. Company Overview - EXL is a global data and AI company that provides services and solutions aimed at transforming client business models and driving better outcomes across various industries, including insurance, healthcare, and banking [6]. - The company was founded in 1999 and has approximately 63,000 employees worldwide [6]. Industry Recognition - The Everest Group's assessment evaluated 25 P&C business process services providers based on their vision, capabilities, and market impact [2]. - EXL's consult-to-operate model, which integrates insurance domain expertise with data and AI, was a key factor in its recognition as a Leader [3][4]. Technological Advancements - EXL has been acknowledged for its leadership in generative AI and autonomous agents, as well as its outcome-driven pricing strategies that are linked to measurable business results [3][4]. - The company utilizes proprietary technologies such as EXL Insurance LLM, SubroSource™, and XTRAKTO.AI™, which contribute to reshaping claims and underwriting workflows [4]. Market Trends - As the P&C insurance industry undergoes digital transformation, there is a growing demand for partners that can leverage emerging technologies to deliver measurable business impacts [4].

Core Insights - EXL has been recognized as a Leader in the ISG Provider Lens Generative AI Services report for the second consecutive year, highlighting its strong position in the market [1][2] - The company excels in both Strategy and Consulting and Development and Deployment Services categories, showcasing its ability to assist enterprise leaders in making informed decisions and maximizing technological investments [2][3] Company Strengths - EXL's deep vertical domain expertise, governance-based consulting, and partner-led transformation are key differentiators that contribute to its leadership status [2][3] - The EXLerate.ai platform allows consultants to simulate agent workflows and validate architecture early in the engagement cycle, enhancing the consulting process [2] - The company's GenAI stack supports cross-LLM optimization and production-ready agents across various industries, leveraging reusable components and deep hyperscaler alignment [2] Industry Context - As Generative AI evolves, companies require partners with a comprehensive understanding of data and the ability to engineer end-to-end AI ecosystems to improve business outcomes [3] - EXL's structured approach to GenAI consulting integrates domain strategy, partner-led go-to-market strategies, and governance advisory, leading to operationally aligned transformation strategies [3] - The company demonstrates strong deployment maturity with a modular agent orchestration platform and a security-first governance stack, supporting enterprise-grade AI system development [3]

Financial Data and Key Metrics Changes - The company reported revenue of $530 million for Q3 2025, representing a 12% year-over-year increase and an 11% growth in Adjusted EPS to $0.48 per share [4][17] - Adjusted EPS for the quarter was $0.48, reflecting a year-over-year increase of 10.8% [20][21] - Revenue for the first nine months of 2025 was $1.55 billion, up 14% year-over-year on a constant currency basis [21] Business Line Data and Key Metrics Changes - Data and AI-led revenue grew 18% year-over-year, accounting for 56% of total revenue [4][5] - Digital operations revenue increased by 6% year-over-year, with some revenue shifting to the data and AI-led category [5][41] - The insurance segment grew 9% year-over-year, contributing a third of total revenue [5][18] - Healthcare and life sciences segment reported a 22% growth, driven by demand for data and AI solutions [6][18] - Banking, capital markets, and diversified industries grew 12%, representing nearly a quarter of total revenue [7][18] Market Data and Key Metrics Changes - International growth markets segment generated revenue of $92.8 million, up 8.4% year-over-year [19] - The company noted a positive demand environment, with a growing sales pipeline for data and AI-led opportunities [7][8] Company Strategy and Development Direction - The company is focused on embedding AI into client workflows and expanding its data and AI capabilities [4][9] - The launch of EXLdata.ai aims to help clients make their enterprise data AI-ready, addressing the challenge of unstructured data [10][11] - The company is investing in next-generation data and AI capabilities to bolster its competitive position [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining double-digit growth into 2026, supported by a strong sales pipeline and high renewal rates [9][24] - The overall demand environment remains strong, with clients increasingly looking to innovate and transform their business models [8][30] - The company raised its revenue and EPS guidance for the full year, anticipating revenue between $2.07 billion to $2.08 billion for 2025 [23] Other Important Information - More than 75% of the company's revenue is recurring or annuity, providing stability and predictability [9] - The company has a net cash position of $38 million as of September 30, with cash flow from operations improving to $233 million for the first nine months of the year [21][22] Q&A Session Summary Question: Change in overall demand environment - Management noted that overall demand continues to be strong, with an expanding total addressable market for services and solutions [30] Question: Sustainability of growth rate - Management expressed confidence in sustaining double-digit growth, driven by the growth of data and AI-led revenue [31] Question: Expectations for digital operations - Digital operations growth is impacted by revenue shifting to data and AI-led categories, but overall engagement with clients is strong [40] Question: Client relationship management changes - The company is enhancing client engagement by focusing on innovation and transformation, requiring account managers to be proficient in AI and data [46][47] Question: Healthcare segment growth outlook - Management believes the healthcare business has significant growth potential, with ongoing demand for data and AI solutions [56] Question: Margin expectations for next year - Management anticipates more stable margin growth in 2026, with a focus on investments in sales and capability development [59] Question: Landscape for EXLdata.ai - The company differentiates itself by using AI to prepare data for AI readiness, offering a comprehensive end-to-end solution [63] Question: International segment growth acceleration - The company is investing in marketing and local partnerships to accelerate growth in international markets [65]

Financial Data and Key Metrics Changes - The company reported revenue of $530 million for Q3 2025, a 12% year-over-year increase, and Adjusted EPS grew by 11% to $0.48 per share [4][17] - Adjusted EPS for the quarter was $0.48, reflecting a year-over-year increase of 10.8% [20][21] - Revenue for the first nine months of 2025 was $1.55 billion, up 14% year-over-year on a constant currency basis [21] Business Line Data and Key Metrics Changes - Data and AI-led revenue grew 18% year-over-year, accounting for 56% of total revenue [4][5] - Digital operations revenue increased by 6% year-over-year [5][41] - The insurance segment grew 9% year-over-year, contributing a third of total revenue [5][18] - Healthcare and life sciences segment grew 22% year-over-year, representing the fastest growth [6][18] - Banking, capital markets, and diversified industries grew 12% year-over-year [7][18] Market Data and Key Metrics Changes - International growth markets segment generated revenue of $92.8 million, up 8.4% year-over-year [19] - The company maintained a high renewal rate of over 75% for existing contracts, indicating strong client retention [9] Company Strategy and Development Direction - The company is focused on expanding its data and AI capabilities, launching the EXLdata.ai solution to help clients make their data AI-ready [9][10] - The strategy includes embedding AI into client workflows to enhance operational efficiency and drive growth [8][11] - The company aims to leverage its strong sales pipeline and existing client relationships to sustain double-digit growth into 2026 [9][24] Management's Comments on Operating Environment and Future Outlook - Management noted a positive demand environment, with clients increasingly seeking to innovate and transform their business models [8][30] - The company raised its revenue and EPS guidance for 2025, anticipating revenue in the range of $2.07 billion to $2.08 billion, representing 13% year-over-year growth [23][24] - Management expressed confidence in sustaining double-digit growth due to the strong performance of data and AI-led services [31][24] Other Important Information - The company reported a net cash position of $38 million as of September 30, with cash flow from operations improving to $233 million for the first nine months of the year [21][22] - The company received several industry recognitions for its AI services and solutions, validating its leadership in the market [15][16] Q&A Session Summary Question: Change in overall demand environment - Management characterized the overall demand as very strong, with a significant shift towards AI-led operations becoming visible in financials [30] Question: Sustainability of growth rate - Management indicated that the growth rate is sustainable due to the increasing demand for AI solutions and the company's ability to win market share [31] Question: Expectations for digital operations - Management explained that digital operations growth is impacted by the shift of revenue to data and AI-led categories, with a net growth of 6% for the quarter [41] Question: Top client strength and sustainability - Management noted that the penetration rate with top clients remains low, indicating significant growth potential [42] Question: Client relationship management changes - Management highlighted the need for account managers to be proficient in AI and data to engage clients effectively [47] Question: Revenue per employee growth - Management expects upward improvement in revenue per employee as AI is applied, with slower employee growth compared to revenue growth [51] Question: Healthcare segment growth outlook - Management expressed confidence in the healthcare segment's growth potential, citing the enormous market and data-rich environment [56] Question: Margin expectations for next year - Management anticipates stable margin growth in 2026, with a more balanced performance compared to the current year [59] Question: Landscape for EXLdata.ai - Management acknowledged competition in the data management space but emphasized the unique AI-driven approach of EXLdata.ai [63] Question: International segment growth acceleration - Management is investing in marketing and talent to accelerate growth in international markets [65]

Financial Data and Key Metrics Changes - The company reported revenue of $530 million for Q3 2025, representing a 12% year-over-year increase and an adjusted EPS of $0.48, up 11% year-over-year [4][21] - Adjusted EPS for the quarter was $0.48, reflecting a 10.8% year-over-year increase [24] - Revenue for the first nine months of 2025 was $1.55 billion, up 14% year-over-year on a constant currency basis [25] Business Line Data and Key Metrics Changes - Data and AI-led revenue grew 18% year-over-year, accounting for 56% of total revenue [4][6] - Digital operations revenue increased by 6% year-over-year, with some revenue shifting to the data and AI-led category [6] - The insurance segment grew 9% year-over-year, contributing a third of total revenue [6] - Healthcare and life sciences segment grew 22% year-over-year, driven by demand for data and AI solutions [6][22] - Banking, capital markets, and diversified industries grew 12% year-over-year, representing nearly a quarter of total revenue [7][22] Market Data and Key Metrics Changes - International growth markets segment generated revenue of $92.8 million, up 8.4% year-over-year [23] - The company noted a positive demand environment and an expanding sales pipeline for data and AI-led opportunities [8][9] Company Strategy and Development Direction - The company is focused on embedding AI into client workflows and has launched EXLdata.ai to help clients make their data AI-ready [12][13] - The strategy includes expanding capabilities in data and AI, with a strong emphasis on client engagement and innovation [11][56] - The company aims to maintain double-digit growth momentum into 2026, supported by a healthy new business pipeline [20][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained double-digit growth due to the increasing demand for AI-driven solutions [36][40] - The company is raising its revenue and EPS guidance for the full year based on strong performance and visibility [27][28] - Management highlighted the importance of transforming client business models and expanding total addressable markets through AI adoption [9][36] Other Important Information - More than 75% of the company's revenue is recurring or annuity, providing stability and predictability [11] - The company has received several industry recognitions for its AI services and solutions leadership [17][18] Q&A Session Summary Question: Change in overall demand environment - Management characterized the overall demand as very strong, with an expanding total addressable market for services and solutions [30][32] Question: Expectations for digital operations growth - Management indicated that digital operations growth is impacted by revenue shifting to data and AI-led categories, with a current growth rate of 6% [46][47] Question: Client relationship management changes - The company is enhancing client engagement by training teams to discuss complex technologies and expanding conversations to include higher-level executives [52][54] Question: Outlook for healthcare segment growth - Management believes the healthcare business has significant growth potential due to the data-rich and fragmented nature of the market [62][64] Question: Margin expectations for next year - Management expects more stable margin growth in 2026, with an adjusted margin improvement of 10 to 20 basis points per year [67][68] Question: Landscape for EXLdata.ai product - Management noted that while other companies are developing similar solutions, EXLdata.ai differentiates itself by using AI to prepare data for AI readiness [71][72] Question: International segment growth acceleration - The company is investing in marketing and talent to accelerate growth in international markets [75] Question: Requirements for deploying enterprise AI - Management discussed two engagement motions: standalone capabilities for data readiness and integrated solutions for embedding AI into workflows [78][80]

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Safe harbor Forward-looking statements This presentation contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to EXL's operations and business environment, all of which are difficult to predict and many of which are beyond EXL's control. Forward-looking statements include information concerning EXL's possible ...

Core Insights - ExlService Holdings (EXLS) reported quarterly earnings of $0.48 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, and showing an increase from $0.44 per share a year ago, resulting in an earnings surprise of +4.35% [1][2] - The company achieved revenues of $529.59 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.55% and up from $472.07 million year-over-year [2] - ExlService Holdings has consistently surpassed consensus EPS estimates over the last four quarters [2] Earnings Outlook - The future performance of ExlService Holdings' stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on the recently released numbers [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.46 on revenues of $528.51 million, and for the current fiscal year, it is $1.90 on revenues of $2.07 billion [7] Industry Context - The Computers - IT Services industry, to which ExlService Holdings belongs, is currently ranked in the top 18% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Financial Performance - Total revenues for Q3 2025 reached $529.6 million, a 12.2% increase from $472.1 million in Q3 2024[13] - Gross profit for Q3 2025 was $203.9 million, up 14.5% from $178.3 million in Q3 2024[13] - Net income for Q3 2025 was $58.2 million, compared to $53.0 million in Q3 2024, reflecting a 9.5% increase[13] - Basic earnings per share for Q3 2025 were $0.36, an increase from $0.33 in Q3 2024[13] - Total revenues for the nine months ended September 30, 2025, reached $1,545.06 million, a 13.9% increase from $1,356.94 million in the same period of 2024[55] - Gross profit for the nine months ended September 30, 2025, was $591.43 million, compared to $507.61 million for the same period in 2024, reflecting a 16.5% increase[55] - Net income for the nine months ended September 30, 2025, was $190,773,000, an increase from $147,625,000 in the same period of 2024, representing a growth of 29.2%[26] - For the three months ended September 30, 2025, net income was $58,161,000, compared to $53,037,000 for the same period in 2024, representing an increase of 4.0%[77] Assets and Liabilities - Total assets as of September 30, 2025, were $1.73 billion, up from $1.62 billion as of December 31, 2024[11] - Total liabilities increased to $781.2 million as of September 30, 2025, compared to $688.5 million at the end of 2024[11] - Total stockholders' equity increased to $952.4 million as of September 30, 2025, from $929.9 million at the end of 2024[11] - The company reported accounts receivable, net of allowance for expected credit losses, of $351.426 million as of September 30, 2025, compared to $304.322 million as of December 31, 2024[72] - Contract assets decreased to $31.148 million as of September 30, 2025, from $39.700 million as of December 31, 2024[67] - Deferred revenue as of September 30, 2025, was $12.239 million, down from $15.484 million as of December 31, 2024[67] Cash Flow and Investments - Cash and cash equivalents rose to $160.3 million as of September 30, 2025, from $153.4 million at the end of 2024[11] - Total cash provided by operating activities for the nine months ended September 30, 2025, was $233,336,000, compared to $163,179,000 for the same period in 2024, indicating a 43% increase[26] - The company experienced a net cash used for investing activities of $82,609,000 for the nine months ended September 30, 2025, compared to $94,475,000 in 2024, indicating a decrease of 12.6%[26] - The company reported a closing balance of contingent consideration at $2,700,000 as of September 30, 2025, unchanged from the previous quarter, while it was $7,700,000 in Q3 2024[115] Operating Expenses - Operating expenses for Q3 2025 were $127.8 million, a 17.4% increase from $108.9 million in Q3 2024[13] - Employee costs for Q3 2025 totaled $274,444,000, compared to $242,200,000 in Q3 2024, showing an increase of 13.3%[49][54] - Employee costs for the nine months ended September 30, 2025, totaled $805.16 million, up from $701.42 million in 2024, reflecting a 14.8% increase[55] Segment Performance - Revenues from the Healthcare and Life Sciences segment were $135,271,000 in Q3 2025, up from $111,197,000 in Q3 2024, marking a 21.6% increase[49][54] - Data and AI-led revenues for the nine months ended September 30, 2025, amounted to $845.169 million, an increase from $722.743 million in 2024, marking a 17.0% rise[61] - North America generated $1,275.036 million in revenues for the nine months ended September 30, 2025, up from $1,117.238 million in 2024, representing a 14.2% growth[65] Shareholder Activities - The Company repurchased 3,074,076 shares for a total consideration of $133,467, with a weighted average purchase price of $43.42 during the three months ended September 30, 2025[145] - For the nine months ended September 30, 2025, the Company repurchased 4,155,289 shares for a total consideration of $183,278, with a weighted average purchase price of $44.11[145] - The Company entered into the 2025 ASR Agreement with Citibank to repurchase shares for an aggregate purchase price of $125,000, receiving an initial delivery of 2,302,556 shares at an initial price of $43.43 per share[142] Tax and Compliance - The effective tax rate decreased from 22.6% to 22.1% for the three months ended September 30, 2025, compared to the same period in 2024[162] - The Company recorded an income tax expense of $16,456 for the three months ended September 30, 2025, up from $15,460 in 2024, primarily due to higher profit[162] - The Company believes that the outcomes of pending litigation matters will not have a material adverse effect on its consolidated financial condition, results of operations, or cash flows[198] Operational Changes - The new segment structure includes Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, and International Growth Markets, aimed at enhancing client value[46][47] - The Company has implemented operational changes to accelerate its data and AI strategy, aligning financial performance reporting with new segments[33][42] - The Company has made payments and/or provided bank guarantees totaling $7,757 and $7,506 against these demands as of September 30, 2025, and December 31, 2024, respectively[191]