ExlService Holdings, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Q3 2021 EXL Service Holdings, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star zero on your touchtone telephone. I would like to turn the conference over to your host, Mr. Stephen Barlow. Please go ahead, sir.

I'm Steve Barlow, EXL Vice President of Investor Relations. We meet today in our offices in New York, Aurob Kabor, our Vice Chairman and Chief Executive Officer, and Maurizio Nicolelli, our Chief Financial Officer. We hope you've had an opportunity to review our Q3 2021 earnings release we issued this morning, as well as the press release announcing a new $300 million share repurchase authorization. We have also updated our investor fact sheet in the Investor Relations section of EXL's website. As you know, some of the matters we'll discuss in this call are forward-looking. Please keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, general economic conditions. Those factors set forth in today's press release, discussed in the company's periodic reports and other documents filed with the Securities and Exchange Commission from time to time. Each fellow assumes no obligation to update the information presented on this conference call. During our call today, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliation of these measures to GAAP can be found in our press release as well as on the investor fact sheet. I'll now turn the call over to Robert Kapoor, ESL Chief Executive Officer. Robert. Thank you, Steve.

Good morning, everyone. Welcome to our third quarter 2021 earnings call. I hope you and your families are safe and healthy. I'm delighted to report another outstanding quarter. EXL achieved better than expected results in the third quarter on revenue and adjusted EPS. Our Q3 revenue was $290.3 million, which represents a 5.8% sequential increase and a 20.1% year-over-year increase, both on a constant currency basis. was $1.30 per share. Our analytics business reported revenue of $120.5 million, growing 8.3% sequentially and 32.7% year-over-year. Consistent with the first half of the year, demand for analytics has increased significantly in the post-pandemic environment. We foresee continued healthy growth in analytics, driven by consistent demand for our expertise in data-driven solutions. Our operations management business also achieved growth this quarter, generating $169.9 million in revenue, which is up 4.1% quarter over quarter and 12.6% year over year driven primarily by higher revenues from our suite of insurance solutions and new wins in our emerging business. Our revenue growth this quarter has been broad-based. We have continued to win across all industry verticals, with analytics and digital being our core differentiators. We see this trend continuing with a strong pipeline of large deals and surging demand for our digital solutions and analytics capabilities. We feel confident that we will maintain our strong position in the market by continuing to secure strategic wins. To illustrate what we are seeing in the market, I would like to share some insights on a few of our recent showcase our unique strengths. Starting with our analytics business, point of sale financing through buy now, pay later solutions have become a rapidly growing segment in the banking and retail industries. The popularity of the format is due to how seamless and easy it is from the customer perspective. Real-time credit approvals at the point of purchase allows for a much smoother customer experience. This creates significant value for the customer, the bank or lending institution, and the merchant. On the merchant side, by integrating a financing solution directly into the purchase journey, we are able to drive higher conversions and higher order value. On the financing side, we are enabling banks to expand their share of wallet with existing customers, attract new customers, and create an efficient merchant services workflow. We've developed and implemented a buy now, pay later solution for First National Bank of Omaha, the largest privately held bank subsidiary in the United States. It is unique for two reasons. First, It allows merchants to provide information about a customer in real time, enabling an instantaneous credit decision with comprehensive credit analytics, free approvals, fraud prevention, know your customer support built directly into the process. Second, it is highly scalable. Working together with our partners, the solution was developed as an in-the-box capability that can be deployed rapidly across margins. In the case of First National Bank of Omaha, we built and launched the solution in a live retail environment in just four months. Given our deep client base in retail banking, we see good traction for this solution going forward. Similarly, our innovative digital solutions built on our proprietary AIOS architecture are helping clients reimagine traditional business functions. EXL partnered with a leading Australian insurer to proactively identify claims payment leakages and prevent regulatory breaches. Our AI-powered smart audit solution has helped the insurer automate 100% of the claims reviews, which has streamlined workflows and improved the accuracy of claims processing. Additionally, our powerful algorithms are now tracking data across the claims lifecycle to identify over 10 times more leakage than previous benchmarks. The smart audit solution is highly scalable, By making simple changes to our algorithms, we have been able to pivot the solution to also address audit and compliance issues within other industries. This expands our addressable market. For example, a major healthcare payer is using the solution to improve accuracy and compliance across 200 different outbound member communications in multiple languages. Additionally, a leading manufacturer of electrical components leveraged smart audit to identify 20% leakages within their vendor payments. We are also seeing strong demand for our payment integrity solutions. This is evident in our recent audit services and deploys several components of our payment integrity solutions. With a strong alignment to our growth strategy, this multi-year win represents a significant step forward for our payment services business. The common theme across all these examples is the extensive use of data, analytics, AI, and cloud. and evolved, we've doubled down on our analytics and digital focus to create solutions that address their biggest challenges, unlock opportunities for growth, and drive efficiency. This trajectory has been central to our growth. In order to better communicate our focus on analytics and digital solutions, we launched our bold new brand platform in September. Anchored in the client value proposition, we make sense of data to drive your business forward. The new brand more accurately reflects the critical role we play in our clients' strategic growth agendas. It also emphasizes the critical role data plays in driving better decision-making and more intelligent operations, enabling companies to predict trends and streamline workflows. With greater volumes of data and more focus on delivering real-time insights and solutions, making sense of data has become the most important baseline capability for businesses today. This is a noteworthy evolution of our business and positions us well in the marketplace. To realize our brand promise, we are making significant investments in advanced analytics, AI-based content extraction, conversational AI, and cloud-based operations analytics. As we look to the future, we will continue to keep the health and safety of our employees and their families as our top priority. We have conducted vaccinations the last quarter. Currently, 70% of our employees globally have received at least one dose of the vaccine. As vaccines become more readily available in geographies such as the Philippines and South Africa, we will continue to push ahead for greater vaccination rates amongst our workforce and enable a safer work environment. We have also built a future of work operating model which focuses on maintaining a distributed workforce to maximize our resilience and deliver an optimal working environment for our employees. As we've seen over the past several months, the flexibility of a hybrid work-from-home model has been great for our employees and clients alike. As we have continued to grow and evolve as a company, we have made a very conscious effort to cultivate a strong bench of leaders who will help drive our business forward. I'm pleased to share that we have elevated two of our senior leaders to our executive committee. Amkur Rai, our chief digital officer, leader of our emerging business, are both now part of the Leadership Executive Committee. Amkur joined EXL in 2006 as part of our acquisition of Inductus and was co-head of analytics for several years. Kimi is a 21-year veteran of EXL and has held numerous leadership roles since joining in 2001. I am confident that Ankur and Kiri will play pivotal roles in achieving the promise of our new brand and meeting our growth aspirations. Going forward, our pipeline remains strong and our capabilities in the analytics and digital space are resonating well in the market. Similarly, within operations management, to becoming truly digital. In conclusion, 2021 is shaping up to be a great year for EXF. We have been able to grow our business across our verticals and form stronger partnerships with our clients. We have created unique solutions using data and analytics, AI, and the cloud that solve their most pressing problems. I am confident in the resilience of our business model and extremely proud of the commitment and ingenuity of our people to support one another and our clients in a fast-changing and complex business environment. I will now invite Maurizio to highlight our Q3 financial performance and 2021 guidance.