ExlService Holdings, Inc.

Good day, and thank you for standing by. Welcome to the second quarter 2024 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, John Kristof, VP of Investor Relations. John, please go ahead.

Thanks, Felicia. Hello, and thank you for joining EXL's second quarter 2024 financial results conference call. On the call with me today are Rohit Kapoor, Chairman and Chief Executive Officer, and Maurizio Nicolelli, Chief Financial Officer. We hope you've had an opportunity to review the second quarter earnings release we issued this morning. We also have 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. And with that, I'll turn the call over to Rohit. Thanks, John.

Good morning, everyone. Welcome to EXL's second quarter 2024 earnings call. I'm pleased to be with you this morning, sharing our strong financial results. In the second quarter, we generated revenue of $448 million, an increase of 11% year over year. We also grew second quarter adjusted EPS by 11% to 40 cents per share. The execution of our data and AI-led strategy enabled us to accelerate our growth momentum across both our analytics and digital operations and solutions businesses during the quarter. In analytics, we delivered revenue of $194 million for the quarter, up 2% sequentially and 6% year over year, driven by strong double-digit growth in healthcare payment services and data management. I am pleased to share that this marks the second consecutive quarter of sequential growth for analytics, which positions us well to accelerate our growth rate in the second half of the year. Data management continues to be a major focus area for eXcel and for our clients on their AI journey. The ability to generate insights and outcomes using AI hinges on accessible, quality data, both structured and unstructured. In line with our strategy, I'm thrilled to announce our acquisition of ITI Data, a leading information and data management company serving the world's largest banks, financial services, and healthcare firms. This acquisition not only bolsters our data management capabilities, but also greatly complements EXL's existing vertical markets, expanding our data and AI partner ecosystem, and grows our geographic and global 1000 client footprint. This acquisition is an example of our commitment to further enhance our competitive differentiation by acquiring wider skill sets and deeper expertise in data management as we strengthen our position as a data and AI-led company. In our digital operations and solutions business during the second quarter, we once again delivered strong double-digit growth as we leverage our domain, data, and AI capabilities to win in the market. We grew revenue 4% sequentially and 14% year-over-year to $255 million. This acceleration of growth was driven by our insurance and emerging business segments, which grew 16% and 15% respectively. Our clients continue to focus on cost efficiency and digital transformation, creating a favorable demand environment for us. Last month marked EXL's 25th anniversary, and we commemorated the milestone by ringing the opening bell on NASAC. As I reflect on our journey over the past two and a half decades, our transformation from a traditional outsourcing company to a recognized leader in data and AI has been truly remarkable and stands out. Our strategic decisions to make timely pivots and evolve into a data and AI-led company has contributed to our industry-leading growth rates. More importantly, we have positioned EXL for success in the rapidly evolving and expanding AI era. As we shared in our investor strategy update event in May, AI has changed the business transformation landscape from one that was historically technology-led to one that is now increasingly domain and data-led. This plays to our core strength in domain expertise, data mastery, and AI implementation capabilities. It has significantly expanded our total addressable market and accelerated our growth rates. Data and AI-led revenue now accounts for more than half of the company's total revenue and we anticipate that percentage to grow over time. We recently announced a strategic collaboration with NVIDIA to create enterprise-wide data and AI applications for insurance, healthcare, banking, retail, and other industries. eXcel's adoption of advanced AI technologies powered by NVIDIA AI helps our clients with fast and scalable AI in complex enterprise production environments. As a leader in helping clients redesign customer journeys and reinvent business models by integrating data, analytics, and AI directly into critical workflows, Excel will play a pivotal role in fine-tuning and applying the NVIDIA AI platform to highly specialized use cases. I am happy to share that our first insurance-specific LLM, which has been fine-tuned on 2 billion tokens curated from insurance domain data, is now production-ready. Our fine-tuned model outperforms several foundational models such as GPT-4-0, Claude Sonnet, and LAMA-3, 70 billion on insurance-specific tasks in the medical claims space. We leverage a number of proprietary data pre-processing and fine-tuning techniques in close collaboration with NVIDIA's engineering teams to achieve this outcome. Given our success, we will continue to create additional domain-specific LLMs across our chosen industries. Our growing ability to tangibly improve our clients' businesses through domain data and AI is reflected in the continued strength of our sales pipeline. We are particularly encouraged by the year-over-year growth we have experienced in the data and AI portion of our pipeline. Let me share a couple of recent examples of how we are harnessing our differentiated capabilities to deliver meaningful value for our clients. We partnered with a global personal and commercial lines insurer to help them improve underwriter utilization and drive higher premium growth. As part of the engagement, we deployed our SaaS-based underwriting solution on our proprietary AI platform. This included our patented GenAI-based extractor.ai solution for structured and unstructured data processing, an advanced scoring engine to generate a risk score for all incoming leads, and automated decision-making algorithms. The whole underwriting process now just takes a few hours, where it used to take multiple days. This solution not only improves our client's quote to policy conversion, but it also helps them improve the broker experience and drives better underwriter productivity and higher premium growth. This is a great example of how EXL is combining our insurance domain expertise along with our data and AI solutions to help our clients transform their operating model. In another example, we have been working with a Fortune 50 consumer goods company to help them solve challenges in their rapidly growing e-commerce business. They were experiencing a surge in data volume, which had strained their internal resources, resulting in frequent data pipeline failures and unreliable data quality. Leveraging our data engineering experience and capabilities, we helped the clients streamline data flow and improve data quality. This included combining data in various disparate formats across supply chain, marketing, and sales into a comprehensive data warehouse. We also optimized their data extraction algorithms and developed various actionable executive dashboards, empowering leaders to make informed decisions faster. This resulted in a reduction in pipeline failures of approximately 95% with consistent data availability and smooth processing. In addition, we were able to reduce the computing costs related to extracting, transforming, and loading data for those pipelines by over a third. These impressive results demonstrate our ability to leverage our deep data management capabilities to become the data and AI partner of choice for some of the largest companies in the world. We continue to see growing opportunities in data management and engineering as more clients focus on complex foundational work necessary to prepare for broader AI deployment in the future. And we continue to successfully attract new specialized talent to Excel as well as train and develop our existing talent in data and AI. In summary, we delivered strong results in the second quarter and we are encouraged by the acceleration of growth across our analytics and digital operations and solutions businesses. The consistent execution of our data and AI-led strategy combined with our growing data and AI sales pipeline puts us in a strong position for further growth in the second half of the year. With that, I'll turn the call over to Maurizio to cover our financial performance in detail.