ExlService Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Your conference call shall begin momentarily. Thank you. Thank you. Thank you for standing by, and welcome to the Q4EXL Service Holdings Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question at that time, please press star then 1 on your touch-tone telephone. As a reminder, today's conference call is being recorded. I will now turn the conference over to your host, Mr. Steve Barlow. Sir, you may begin. Thank you, Valerie.

Thank you, Valerie. Good morning, and thanks to everyone for joining EXL's fourth quarter and full year 2021 financial results conference call. I'm Steve Barlow, EXL's Vice President of Investor Relations. On the call today are Rohit Kapoor, our Vice Chairman and Chief Executive Officer, and Maurizio Nicolelli, our Chief Financial Officer. We hope you've had an opportunity to review our Q4 and full year 2021 earnings release we issued this morning. We've also updated our investor fact sheet and 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. EXL 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 Rohit Kapoor, EXL's Chief Executive Officer. Rohit?

Thank you, Steve. Good morning, everyone. Welcome to our 2021 year-end earnings call. I hope all of you and your families are safe and healthy. The past financial year was truly an extraordinary year for EXL. We have had excellent financial results, and our focus on becoming the indispensable partner for data-led businesses is resonating strongly in the marketplace. Our clear-sighted investments in data, analytics, and digital solutions have been well-timed to address the massive changes happening in the marketplace. Put simply, we thoughtfully and proactively positioned our services and solutions to better address market needs in this period of rapid change. We did this by systematically changing our business model to a data-led value creation business. With each new client engagement, whether we are working with digital natives, digital reinventors, or legacy clients, we now lead with data and digital to drive large-scale transformation initiatives and accelerate new market introductions. Empowered by our strength in advanced analytics, AI, and the cloud, combined with our deep domain-based operational expertise, we are developing scalable, integrated solutions to leverage an opportunity-rich demand environment. This allows us to drive new efficiencies, have a much bigger impact on our clients' business, while creating solutions that can be rolled out to clients across a wide variety of industries. We were always a strong operations management and analytics company. We have evolved to become a leading data analytics and digital operations and solutions company with exceptional talent. Our strategic shift towards front-ending our work with data and digital transformation has allowed us to surpass our projections, take on bigger and more complex and impactful projects with shorter sales cycles, and deliver higher margins for our stakeholders. Our 2021 financial performance is a clear indication that the rapid evolution of our value proposition is resonating in the marketplace. we generated revenues of $1.12 billion, representing a 17.1% increase year-over-year on a reported basis. In addition, our adjusted operating margin was 18.6%, which drove adjusted EPS for the year of $4.83, a 37% year-over-year increase. our analytics business had an outstanding year with $460.7 million in revenue, representing 27% growth year over year. This performance was attributable to multiple expansions within our strategic banking and healthcare clients, increased revenue from our data-led client marketing solutions, and continued demand for our payment integrity business. our digital operations and solutions businesses reported $661.6 million in revenue in 2021, up 11.1% year-over-year. This growth was driven by new client wins from 2020 and 2021, especially within our insurance and emerging business segments. We continue to expand our existing client relationships and build a greater share of wallet. We feel confident that the growth that we have experienced will continue to play out longer term. A combination of healthy growth across all of our businesses and a large pipeline of mature deals that have more than doubled over the past two years are strong indicators of robust demand. In November 2020, at our Analyst Day, we provided medium-term financial performance targets for revenue and margins. Our target for revenue growth was 10% plus per annum, based on our analytics business growing at 13% to 15%, and our operations management business, now referred to as digital operations and solutions, growing at 6% to 8% per annum. We also targeted an adjusted operating margin of 16% to 17% by 2022. We are updating and increasing our medium-term financial targets. We now expect organic constant currency revenue growth to increase by approximately 200 basis points at the midpoint to 11% to 13% per annum. We believe that digital operations and solutions revenue can grow faster at 7% to 9% per annum and that analytics revenue growth will accelerate to 15% to 20% per annum. In addition, we also expect our profitability to improve by 100 basis points. Our new targeted range for adjusted operating profit margins is increased to 17 to 18%. And lastly, in line with our previous goals, we will endeavor to continue to grow our EPS faster than revenue. Behind our financial milestones is the story of breakthrough projects that have increasingly come to define our unique approach to the marketplace. As an example, we were recently selected as the preferred data analytics partner to support an enterprise-wide digital transformation initiative at a major global automaker. The engagement, which involves collecting voice of the vehicle data, includes billions of discrete touchpoints between drivers and their connected vehicles, consumer shopping behaviors, and customer experience data, represents the cutting edge in integrated data and analytics work. We are partnering with the clients to analyze millions of connected vehicles, handling dozens of petabytes of data, and to top it all, we had an entire solution up and running at full speed in under 12 months. The quality of our work and the ability to tangibly deliver superior business outcomes were instrumental in not only ensuring high customer satisfaction scores, but also resulted in improving employee satisfaction scores within our client's direct team. In this engagement, EXL was selected over much larger competitors for two important reasons. One, our AI technology and analytics capabilities were at an advanced level that allowed us to process complex interactions quickly and seamlessly. And two, the confidence that our client had in our ability to deliver business outcomes and build solutions that are an integral part of our client's enterprise workflow. The tight connection between digital and analytics and technological innovation were also instrumental in securing a strategic win for our EXL Health business. In December, we were selected by one of the largest consumer-governed non-profit healthcare organizations in the nation to develop a next-generation care management solution. Our deep healthcare domain expertise helped us to redesign how care is delivered to patients by leveraging insightful analytics cutting-edge digital engineering and platforms, and omni-channel operational execution. This solution sits at the center of our clients' value-based care strategy, allowing them to identify at-risk patients, spot gaps in care, and drive effective care management. This project is a good example of EXL's ability to break down silos and create a world-class integrated solution. In this engagement, we extracted real-time patient data, analyzing it to stratify risk and identify gaps in care, and manage patient outreach and engagement through a multi-channel combination of automated and human touchpoints. Engagements like this one demonstrate how our roots within a data and process intensive world have enabled us to enhance our digital analytics and AI driven capabilities. These engagements are successful because of our focus on domain expertise that leads to a comprehensive understanding of our clients' businesses and ensures that we deliver digital transformation strategies that work in the real world. We have continued to invest significantly in scaling digital transformation capabilities as we grow. Notably, in December, we announced the acquisition of Clairvoyant, a global data, AI, and cloud services firm. The acquisition adds to our expertise and depth in data engineering and in the cloud enablement space. The addition of Clairvoyant's talent and capabilities in data engineering and cloud will accelerate our progress on our chosen path of becoming an indispensable partner for data-led businesses. Clairvoyant helps us become an even more effective partner for digital transformation. We can help clients design, implement, and operate AI-enabled, cloud-native digital processes and data flows. We've integrated our clairvoyant capabilities in our go-to-market strategy and are in active discussions with multiple strategic clients. This acquisition is performing very well and in line with our expectations. In terms of full-year revenue guidance for 2022, we expect revenues in the range of $1.28 to $1.31 billion, representing a 14% to 17% increase year-over-year. This implies an organic constant currency growth of 11% to 13%, excluding Claire White. We expect adjusted diluted EPS to be in the range of $5.35 to to $5.60, representing an 11% to 16% increase over the prior year. This aligns well with our medium-term financial targets. Before I hand over to Maurizio, it is important for me to recognize the effort of our entire team for making this exciting transformation possible despite the obstacles we've encountered over the last two years. I've always been humbled by the quality of contribution and the depth of commitment in our global team. I am incredibly proud of our talent and feel fortunate to be part of this team. We will continue to progress on creating a workplace that reflects our core values of innovation, collaboration, excellence, integrity, and respect. Our core belief is to create an inclusive work environment that uses the diverse experience, ideas, and contributions of each and every employee. This provides us a competitive advantage and makes us a great place to work for our team. In December, we published our second annual sustainability report, which highlights our progress across key environmental social and governance performance metrics, and highlights our emphasis on human capital management as a key part of our overall business strategy. We consider sustainability to be an integral part of how we operate our business, and we are keenly focused on continual improvement. To that end, as it relates to environmental sustainability in particular, we announced in our sustainability report our efforts to seek to become a net zero emissions business by 2045. Our commitment to ESG was recently recognized by Newsweek, which named us to its 2022 list of America's most responsible companies, and by Barron, who recognized EXL as one of the top 100 most sustainable companies. I feel confident about EXL's growth and impact in the market. Our capabilities in digital and data are now well established. Along with our leadership in analytics, we believe that we are uniquely positioned to be an indispensable partner for data-led businesses and to outperform in this growing market. With that, I will turn the call over to Mauricio.