• EXL Reports 2025 First Quarter Results

    Source: Nasdaq GlobeNewswire / 29 Apr 2025 16:01:00   America/New_York

    2025 First Quarter Revenue of $501.0 Million, up 14.8% year-over-year
    Q1 Diluted EPS (GAAP) (1) of $0.40, up 38.3% from $0.29 in Q1 of 2024
    Q1 Adjusted Diluted EPS (Non-GAAP) (1) of $0.48, up 26.9% from $0.38 in Q1 of 2024

    NEW YORK, April 29, 2025 (GLOBE NEWSWIRE) -- ExlService Holdings, Inc. (NASDAQ: EXLS), a global data and AI company, today announced its financial results for the quarter ended March 31, 2025.

    Chairman and Chief Executive Officer Rohit Kapoor said, “We are pleased with our first quarter results and strong start to the year, as we delivered revenue and adjusted diluted EPS growth of 15% and 27% respectively. Our strong business momentum underscores the successful execution of our differentiated data and AI-led strategy and demonstrates the enduring resilience and adaptability of EXL’s business model.”

    Chief Financial Officer Maurizio Nicolelli said, “While we remain prudent in our outlook given the increasing level of macro-economic uncertainty, we are increasing our revenue guidance for the year, based on our business momentum and more favorable currency exchange rates. We now expect revenue to be in the range of $2.035 billion to $2.065 billion, up from our prior guidance of $2.025 billion to $2.060 billion. This represents 11% to 12% year-over-year growth on a reported basis, or 11% to 13% on a constant currency basis. We continue to expect our adjusted diluted earnings per share for 2025 to be in the range of $1.83 to $1.89, representing an 11% to 14% increase over 2024, as we continue to accelerate our data and AI investments to generate future growth.”

    ______________________________________________________________

    1. Reconciliations of adjusted (non-GAAP) financial measures to the most directly comparable GAAP measures, where applicable, are included at the end of this release under “Reconciliation of Adjusted Financial Measures to GAAP Measures.” These non-GAAP measures, including adjusted diluted EPS and constant currency measures, are not measures of financial performance prepared in accordance with GAAP.

    Financial Highlights: First Quarter 2025

    • Revenue for the quarter ended March 31, 2025, increased to $501.0 million compared to $436.5 million for the first quarter of 2024, an increase of 14.8% on a reported basis and 15.1% on a constant currency basis. Revenue increased by 4.1% sequentially on a reported basis and 4.3% on a constant currency basis, from the fourth quarter of 2024.
      Revenue Gross Margin
      Three months ended Three months ended
    Reportable Segments (1) March 31, 2025 March 31, 2024 March 31, 2025 March 31, 2024
      (dollars in millions)    
    Insurance $172.0 $158.3 36.6% 33.8%
    Healthcare and Life Sciences  125.6  100.7 43.9% 45.3%
    Banking, Capital Markets and Diversified Industries  117.7  103.2 37.3% 36.1%
    International Growth Markets  85.7  74.3 36.6% 35.9%
    Total Revenue, net $501.0 $436.5 38.6% 37.4%
     

    (1) In the first quarter of 2025, the Company implemented operational and structural changes to accelerate the execution of its data and AI-led strategy. Under the new structure, the Company reports its financial performance based on new segments presented in the table above, and as described in more detail in its Quarterly Report on Form 10-Q for the three months ended March 31, 2025, that is being filed with the SEC. In conjunction with the new reporting structure, the Company has recast prior period amounts, wherever applicable, to conform to the way the Company internally manages and monitors segment performance.

    • Operating income margin for the quarter ended March 31, 2025 was 15.7%, compared to 14.1% for the first quarter of 2024 and 14.8% for the fourth quarter of 2024. Adjusted operating income margin for the quarter ended March 31, 2025 was 20.1%, compared to 18.9% for the first quarter of 2024 and 18.8% for the fourth quarter of 2024.

    • Diluted earnings per share for the quarter ended March 31, 2025 was $0.40, compared to $0.29 for the first quarter of 2024 and $0.31 for the fourth quarter of 2024. Adjusted diluted earnings per share for the quarter ended March 31, 2025 was $0.48, compared to $0.38 for the first quarter of 2024 and $0.44 for the fourth quarter of 2024.

    Business Highlights: First Quarter 2025

    • Won 10 new clients in the first quarter of 2025.

      • Named a Leader in four categories in the ISG Provider Lens™ Insurance Services 2024 report. Earning top honors in the North American Life & Retirement, Property & Casualty, Life & Retirement TPA Insurance Services, and Insurance IT Services.

      • Named a Leader and a Star Performer in Everest Group’s Life and Annuities Insurance Business Process Services and Third-Party Administrator (TPA) PEAK Matrix® Assessment 2025.

      • Recognized as part of Newsweek’s America’s Most Responsible Companies 2025, Forbes’ Most Trusted Companies in America 2025, USA Today's America’s Climate Leaders 2025, and The Financial Times’ Best Employers Asia-Pacific 2025.

    2025 Guidance
    Based on current visibility, and a U.S. dollar to Indian rupee exchange rate of 85.5, U.K. pound sterling to U.S. dollar exchange rate of 1.30, U.S. dollar to the Philippine peso exchange rate of 57.0 and all other currencies at current exchange rates, we are providing the following guidance for the full year 2025:

    • Revenue of $2.035 billion to $2.065 billion, representing an increase of 11% to 12% on a reported basis, and 11% to 13% on a constant currency basis from 2024; and

    • Adjusted diluted earnings per share of $1.83 to $1.89, representing an increase of 11% to 14% from 2024.

    Conference Call

    ExlService Holdings, Inc. will host a conference call on Wednesday, April 30, 2025 at 10:00 A.M. ET to discuss the Company’s quarterly operating and financial results. The conference call will be available live via the internet by accessing the investor relations section of EXL’s website at ir.exlservice.com, where an accompanying investor-friendly spreadsheet of historical operating and financial data can also be accessed. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software.

    Please note that there is a new system to access the live call-in order to ask questions. To join the live call, please register here. A dial-in and unique PIN will be provided to join the call. For those who cannot access the live broadcast, a replay will be available on the EXL website ir.exlservice.com for a period of twelve months.

    About ExlService Holdings, Inc.
    EXL (NASDAQ: EXLS) is a global data and artificial intelligence ("AI") company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed. EXL harnesses the power of data, AI, and deep industry knowledge to transform businesses, including the world’s leading corporations in industries including insurance, healthcare, banking and financial services, media and retail, among others. EXL was founded in 1999 with the core values of innovation, collaboration, excellence, integrity and respect. We are headquartered in New York and have more than 60,000 employees spanning six continents. For more information, visit www.exlservice.com.

    Cautionary Statement Regarding Forward-Looking Statements This press release 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 or assumed future results of operations, including descriptions of its business strategy. These statements may include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of management's experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although EXL believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect EXL’s actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors, which include our ability to maintain and grow client demand, our ability to hire and retain sufficiently trained employees, and our ability to accurately estimate and/or manage costs, rising interest rates, rising inflation and recessionary economic trends, are discussed in more detail in EXL’s filings with the Securities and Exchange Commission, including EXL’s Annual Report on Form 10-K. You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect EXL. EXL has no obligation to update any forward-looking statements after the date hereof, except as required by applicable law.

    EXLSERVICE HOLDINGS, INC.
    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
    (In thousands, except per share amount and share count)
     
     Three months ended March 31,
      2025   2024 
    Revenues, net$501,019  $436,507 
    Cost of revenues (1) 307,705   273,424 
    Gross profit (1) 193,314   163,083 
    Operating expenses:   
    General and administrative expenses 59,417   53,243 
    Selling and marketing expenses 41,925   35,970 
    Depreciation and amortization expense 13,557   12,346 
    Total operating expenses 114,899   101,559 
    Income from operations 78,415   61,524 
    Foreign exchange gain, net 1,192   359 
    Interest expense (4,144)  (3,291)
    Other income, net 4,703   3,952 
    Income before income tax expense and earnings from equity affiliates 80,166   62,544 
    Income tax expense 13,496   13,753 
    Income before earnings from equity affiliates 66,670   48,791 
    Loss from equity-method investment (109)  (28)
    Net income$66,561  $48,763 
    Earnings per share:   
    Basic$0.41  $0.30 
    Diluted$0.40  $0.29 
    Weighted-average number of shares used in computing earnings per share:   
    Basic 162,490,179   165,082,387 
    Diluted 164,557,333   166,726,853 

    (1) Exclusive of depreciation and amortization expense.

    EXLSERVICE HOLDINGS, INC.
    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    (In thousands, except per share amount and share count)
     
      As of
      March 31, 2025 December 31, 2024
         
    Assets    
    Current assets:    
    Cash and cash equivalents $140,442  $153,355 
    Short-term investments  190,978   187,223 
    Restricted cash  9,826   9,972 
    Accounts receivable, net  339,856   304,322 
    Other current assets  150,203   140,317 
    Total current assets  831,305   795,189 
    Property and equipment, net  107,148   101,837 
    Operating lease right-of-use assets  71,150   68,784 
    Restricted cash  8,210   8,071 
    Deferred tax assets, net  109,953   104,747 
    Goodwill  420,494   420,387 
    Other intangible assets, net  46,092   49,331 
    Long-term investments  20,134   13,972 
    Other assets  61,925   56,085 
    Total assets $1,676,411  $1,618,403 
    Liabilities and stockholders’ equity    
    Current liabilities:    
    Accounts payable $5,648  $5,884 
    Current portion of long-term borrowings  4,886   4,886 
    Deferred revenue  20,138   19,264 
    Accrued employee costs  63,575   129,994 
    Accrued expenses and other current liabilities  131,980   113,597 
    Current portion of operating lease liabilities  17,426   16,491 
    Total current liabilities  243,653   290,116 
    Long-term borrowings, less current portion  302,377   283,598 
    Operating lease liabilities, less current portion  61,408   59,851 
    Deferred tax liabilities, net  1,625   1,403 
    Other non-current liabilities  55,471   53,573 
    Total liabilities  664,534   688,541 
    Commitments and contingencies    
    Stockholders’ equity:    
    Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued  —   — 
    Common stock, $0.001 par value; 400,000,000 shares authorized, 207,758,497 shares issued and 162,683,343 shares outstanding as of March 31, 2025 and 206,510,587 shares issued and 161,801,212 shares outstanding as of December 31, 2024  207   206 
    Additional paid-in capital  609,592   588,583 
    Retained earnings  1,348,521   1,281,960 
    Accumulated other comprehensive loss  (142,787)  (154,722)
    Total including shares held in treasury  1,815,533   1,716,027 
    Less: 45,075,154 shares as of March 31, 2025 and 44,709,375 shares as of December 31, 2024, held in treasury, at cost  (803,656)  (786,165)
    Total Stockholders’ equity  1,011,877   929,862 
    Total liabilities and stockholders’ equity $1,676,411  $1,618,403 
     

    EXLSERVICE HOLDINGS, INC.

    Reconciliation of Adjusted Financial Measures to GAAP Measures

    In addition to its reported operating results in accordance with U.S. generally accepted accounting principles (GAAP), EXL has included in this release certain financial measures that are considered non-GAAP financial measures, including the following:

    (i) Adjusted operating income and adjusted operating income margin;
    (ii) Adjusted EBITDA and adjusted EBITDA margin;
    (iii) Adjusted net income and adjusted diluted earnings per share; and
    (iv) Revenue growth on constant currency basis.

    These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated. EXL believes that providing these non-GAAP financial measures may help investors better understand EXL’s underlying financial performance. Management also believes that these non-GAAP financial measures, when read in conjunction with EXL’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s results and comparisons of the Company’s results with the results of other companies. Additionally, management considers some of these non-GAAP financial measures to determine variable compensation of its employees. The Company believes that it is unreasonably difficult to provide its earnings per share financial guidance in accordance with GAAP, or a qualitative reconciliation thereof, for a number of reasons, including, without limitation, the Company’s inability to predict its future stock-based compensation expense under ASC Topic 718, the amortization of intangibles associated with future acquisitions and the currency fluctuations and associated tax effects. As such, the Company presents guidance with respect to adjusted diluted earnings per share. The Company also incurs significant non-cash charges for depreciation that may not be indicative of the Company’s ability to generate cash flow.

    EXL non-GAAP financial measures exclude, where applicable, stock-based compensation expense, amortization of acquisition-related intangible assets, provision for litigation matters, effects of termination of leases, certain defined social security contributions, allowance for certain material expected credit losses, other acquisition-related expenses or benefits and effect of any non-recurring tax adjustments. Acquisition-related expenses or benefits include, changes in the fair value of contingent consideration, external deal costs, integration expenses, direct and incremental travel costs and non-recurring benefits or losses. Our adjusted net income and adjusted diluted EPS also excludes the effects of income tax on the above pre-tax items, as applicable. The effects of income tax of each item is calculated by applying the statutory rate of the local tax regulations in the jurisdiction in which the item was incurred.

    A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and exclude costs that are recurring, namely stock-based compensation and amortization of acquisition-related intangible assets. EXL compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.

    EXL’s primary exchange rate exposure is with the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand. The average exchange rate of the U.S. dollar against the Indian rupee increased from 83.12 during the quarter ended March 31, 2024 to 86.52 during the quarter ended March 31, 2025, representing a depreciation of 4.1% against the U.S. dollar. The average exchange rate of the U.S. dollar against the Philippine peso increased from 56.24 during the quarter ended March 31, 2024 to 57.86 during the quarter ended March 31, 2025, representing a depreciation of 2.9% against the U.S. dollar. The average exchange rate of the U.K. pound sterling against the U.S. dollar decreased from 1.27 during the quarter ended March 31, 2024 to 1.26 during the quarter ended March 31, 2025, representing a depreciation of 0.1% against the U.S. dollar. The average exchange rate of the U.S. dollar against the South African rand decreased from 18.96 during the quarter ended March 31, 2024 to 18.49 during the quarter ended March 31, 2025, representing an appreciation of 2.5% against the U.S. dollar.

    The following table shows the reconciliation of these non-GAAP financial measures for the three months ended March 31, 2025 and March 31, 2024, and the three months ended December 31, 2024:

    Reconciliation of Adjusted Operating Income and Adjusted EBITDA
    (Amounts in thousands)
     
      Three months ended
      March 31, December 31,
       2025   2024   2024 
    Net Income (GAAP) $66,561  $48,763  $50,672 
    add: Income tax expense  13,496   13,753   19,850 
    add/(subtract): Foreign exchange gain, net, interest expense, gain/(loss) from equity-method investment and other income/(loss), net  (1,642)  (992)  720 
    Income from operations (GAAP) $78,415  $61,524  $71,242 
    add: Stock-based compensation expense  19,187   17,852   15,479 
    add: Amortization of acquisition-related intangibles  3,246   3,080   4,024 
    Adjusted operating income (Non-GAAP) $100,848  $82,456  $90,745 
    Adjusted operating income margin as a % of Revenue (Non-GAAP)  20.1%  18.9%  18.8%
    add: Depreciation on long-lived assets  10,311   9,266   12,140 
    Adjusted EBITDA (Non-GAAP) $111,159  $91,722  $102,885 
    Adjusted EBITDA margin as a % of revenue (Non-GAAP)  22.2%  21.0%  21.4%
     


    Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share
    (Amounts in thousands, except per share data)
     
      Three months ended
      March 31, December 31,
       2025   2024   2024 
    Net income (GAAP) $66,561  $48,763  $50,672 
    add: Stock-based compensation expense  19,187   17,852   15,479 
    add: Amortization of acquisition-related intangibles  3,246   3,080   4,024 
    add/(subtract): Changes in fair value of contingent consideration  —   (589)  — 
    add/(subtract): Other tax expense/(benefits) (a)  —   151   3,860 
    subtract: Tax impact on stock-based compensation expense (b)  (9,105)  (5,358)  (1,769)
    subtract: Tax impact on amortization of acquisition-related intangibles  (799)  (766)  (921)
    Adjusted net income (Non-GAAP) $79,090  $63,133  $71,345 
    Adjusted diluted earnings per share (Non-GAAP) $0.48  $0.38  $0.44 
     

    (a) To exclude other tax expenses/(benefits), primarily related to certain deferred tax assets and liabilities.

    (b) Tax impact includes $14,526 and $7,523 during the three months ended March 31, 2025 and 2024 respectively, and $500 during the three months ended December 31, 2024, related to discrete benefit recognized in income tax expense in accordance with ASU No. 2016-09, Compensation - Stock Compensation.

    Contacts:
    Investor Relations
    John Kristoff
    Vice President, Investor Relations
    +1 212 209 4613
    ir@exlservice.com

    Media - US
    Keith Little
    Assistant Vice President, Media Relations
    +1 703 598 0980
    media.relations@exlservice.com

    This press release was published by a CLEAR® Verified individual.


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