ExlService Holdings, Inc.

Good day, everyone, and thank you for standing by. Welcome to the third quarter 2023 EXL Service Holdings, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would like now to hand over the conference to your first speaker today, John Kristof, Vice President of Investor Relations. John?

Thanks, Maria. Hello, and thank you for joining EXL's third quarter 2023 financial results conference call. On the call with me today are Rohit Kapoor, Vice Chairman and Chief Executive Officer at and Maurizio Nicolelli, Chief Financial Officer. We hope you've had an opportunity to review the third quarter earnings release we issued this morning. We have also posted an earnings release slide deck and investor fact sheet in the investor relations section of our website. As a reminder, some of the matters we'll discuss this morning 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 SEC from time to time. EXL assumes no obligation to update the information presented on this conference call today. During our call, 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, slide deck, and investor fact sheet. With that, I'll turn the call over to Rohit.

Thanks, John. Good morning, everyone. Welcome to EXL's third quarter 2023 earnings call. I'm pleased to be with you this morning reporting another strong quarter. We continued our growth momentum in the third quarter with total revenue of $411 million, representing year-over-year growth of 14% on a reported basis and 13% in constant currency. We grew adjusted diluted EPS 21% to 37 cents per share. Our data-led strategy and balanced portfolio of businesses bolstered by our differentiated digital and AI capabilities position us well to consistently deliver superior growth in an unpredictable environment. We delivered analytics revenue of $183 million for the quarter, up 10% year over year, and a sequential increase from the second quarter. As anticipated, we experienced weaker demand and lower volumes in marketing analytics. Notwithstanding this headwind, we were able to achieve double-digit growth in our analytics business. This growth was driven by strength in our payment integrity and data management service lines. In our digital operations and solutions business, we generated third quarter revenue of $228 million, growing 17% year-over-year and 2% sequentially. This represents the 10th consecutive quarter of double-digit growth, which demonstrates the value clients place on our data-led integrated solutions. Each of our three segments within Digital Operations and Solutions delivered double-digit year-over-year growth during the quarter with particularly robust performance in insurance. The slowdown in the macroeconomic growth environment is driving our clients to increase their focus on cost efficiency and improve productivity. As they make this pivot towards a lower-cost operating structure, they are also looking to transform their operations. With EXL's technological capabilities of data, digital, and AI, combined with our domain expertise, we are able to create significant impact for our clients in an accelerated manner and with much greater certainty than they can achieve on their own. This has led to a material increase in demand for integrated digital operations, which plays to our strengths across both our data analytics and digital operations and solutions businesses. Our success pursuing large integrated deals is evident in our sales pipeline. For the past six quarters, we have averaged 20% plus year-over-year pipeline growth. And both our win rates and average deal sizes have increased. Over the past 12 months, we have won several deals over $50 million in total contract value, including a few deals over $100 million of total contract value. This validates the value clients see in our end-to-end solutions and gives us confidence in our ability to generate sustained double-digit growth going forward. Let me share an example of a recent win that illustrates the size, scope, and level of integration to unlock value for our clients. One of the top insurance companies in the United States chose EXL as their partner to operate and transform their claims operation as part of a large multi-year deal. We are the first point of contact for all claims and responsible for moving the claim through the process. In addition to providing a multi-shore delivery model, we are transforming the operation through extensive use of analytics, digital, and AI. For example, we are implementing an automated digital quality assistant that provides real-time monitoring and dashboard reporting of all KPIs. Our solution also includes an AI-based coaching module which provides guidance to individual advisors. We are also implementing EXL's smart data signals, which enables 100% real-time claim file review in a fully automated manner. This significantly improves claims outcomes by preventing leakage, improving customer sentiment, and ensuring regulatory compliance. This is just one high-level example of how we are combining all of our capabilities in analytics, data management, AI, and domain expertise to maximize value for our clients. We continue to receive growing interest from our clients regarding use cases and data structure required to support generative AI. This bolsters our confidence that generative AI provides tangible growth opportunities for both our data analytics and digital operations and solutions businesses moving forward. We are currently in more than 200 conversations with clients regarding generative AI use cases, and we have dozens of specific projects active in the sales pipelines. What is particularly encouraging is the diversity of use cases which are leading us into new areas where we previously did not play. For example, many of our clients struggle with software code management and modernizing legacy code to contemporary code languages to upscale their analytics infrastructure. This process often entails meticulous code management translation, and testing. We recently developed a new gen AI-based solution for code conversion, leveraging our domain expertise. Our solution automates the translation of legacy code to contemporary languages and features a robust debugging capability to ensure accuracy and efficiency. This significantly speeds this translation while reducing the potential for errors. We are currently working with a leading global bank on a proof of concept to migrate close to one million lines of legacy SAS code to Python. It would typically take many months to accomplish this, but with our solution, it can be accomplished in a few weeks, allowing our clients to focus on retiring their technical debt. This is an example of how Generative AI is helping us penetrate new buying centers as we now have several more customers interested in the solution. As planned, we have increased our investments in Generative AI in the third quarter and will accelerate these investments further in the fourth quarter. This includes developing solutions, training and hiring specialists, and further strengthening our Generative AI Center of Excellence, where we currently have active Gen AI engagements across all our key industry verticals. We believe these investments will position us well to capitalize on the strong pipeline of Gen AI opportunities. We also recently announced plans to invest in a new international operations headquarters in Dublin, Ireland. As part of the new center, we plan to hire up to 200 AI data engineering and other specialized technology positions over the next three years. This builds upon our existing staff of more than 8,000 data scientists globally who are developing AI, cloud enablement, and data integration technologies. As part of our investment, we will also establish new centers of excellence across our operations to develop best practices, improve efficiencies, and reduce costs. This new center will also serve as a hub for intellectual property development and future geographic market expansion. Looking ahead, we are raising our 2023 revenue and EPS guidance given our strong third quarter performance and current visibility for the remainder of the year. Maurizio will walk you through the details in a few moments. As we look forward to 2024, we are encouraged by the sustained growth in our revenue and EPS, the momentum in our growing sales pipeline, and the underlying strength and resiliency of our business. We are well positioned with our current generative AI offerings, and we continue to invest further in advancing our capabilities. This gives us confidence in our ability to sustain double-digit growth. And with that, I'll turn the call over to Maurizio.