ExlService Holdings, Inc. Q1 FY2025 earnings call

• Started the year with strong first quarter performance: revenue of $501 million, up 15% YOY; adjusted EPS up 27% to $0.48 per share. • New segments: Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, International Growth Markets. • Data and AI-led revenue reported quarterly starting with Q1 2025, grew 16% YOY and represented 53% of total revenue. • Launched excelerate.ai, an Agentic AI platform with over 15 use cases deployed. • Strong sales pipeline, invested in data and AI capabilities. • Differentiators: High annuity-like revenue, diversified client base, focus on cost savings for clients.

In the first quarter, ExlService generated revenue of $501 million, up 15% year-over-year. The Insurance segment had revenue of $172.1 million, growing 8.7% year-over-year and representing more than one-third of revenue. The Healthcare and Life Sciences segment had revenue of $125.6 million, growing 24.8% year-over-year and representing about 1/4 of revenue. The Banking, Capital Markets and Diversified Industries segment had revenue of $117.7 million, growing 14.3% year-over-year and representing nearly one-quarter of revenue. The International Growth Markets segment had revenue of $85.7 million, growing 17% year-over-year and representing over 17% of total revenue. Data and AI-led revenue grew 16% year-over-year and represented 53% of total revenue.

• Raised 2025 revenue guidance to $2.035 billion to $2.065 billion (11%-12% reported growth, 11%-13% constant currency). • Anticipate adjusted operating profit margin improvement of 10-20 basis points. • Adjusted EPS guidance $1.83 to $1.89 (11%-14% YOY growth). • Anticipate foreign exchange gain of $2M-$3M, net interest expense ~$1M, effective tax rate 22%-23%, capital expenditures $50M-$55M.

• General economic conditions, factors in press release and SEC filings. • Competitive landscape in AI adoption. • Macroeconomic headwinds impacting client spending.

Q: Bryan Bergin asks about annuitized revenue and contractually committed vs. new business in 2025 guidance A: Maurizio Nicolelli says ~87% committed at midpoint of guidance, 95% visibility overall Q: Bryan Bergin asks about labor allocation in AI-driven processes and cannibalization A: Rohit Kapoor says AI adopted with human in the loop, revenue per headcount to increase, labor component gradual Q: Surinder Thind asks about sustainability of first mover advantage A: Rohit Kapoor talks about domain, data, AI investments, excelerate.ai, need to continue investing Q: Surinder Thind asks about client willingness to adapt technology A: Rohit Kapoor says clients need cost reduction to invest in AI, EXL helps with cost management and innovation Q: Puneet Jain asks about macro headwinds impact A: Maurizio Nicolelli talks about cadence, margins, and investment in AI Q: Maggie Nolan asks about new client additions and expansions A: Rohit Kapoor says new clients quality good, expansions strong, pipeline healthy Q: Maggie Nolan asks about increasing outcome-based revenue in other verticals A: Rohit Kapoor says trend to see more outcome-based revenue from AI solutions over time Q: David Koning asks about data AI revenue growth sustainability A: Maurizio Nicolelli says sustainable, big driver, part of existing client workflows Q: Vincent Colicchio asks about AI competitive landscape and pricing A: Rohit Kapoor talks about competitor set, NPS, business outcomes, pricing competitive but focus on value Q: David Grossman asks about insurance vertical growth and AI deflationary impact A: Rohit Kapoor says insurance growth in line with company, AI adoption gradual, focus on value for clients Q: David Grossman asks about FX impact on revenue guide A: Maurizio Nicolelli says ~$5M FX impact