ExlService Holdings, Inc.

Hello, and welcome to the EXL Service Holdings Incorporated Q3 2024 earnings call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I will now turn the call over to John Kristof, Vice President of Investor Relations.

Thanks, Leila. Hello, and thank you for joining EXL's third 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 had an opportunity to review the third quarter earnings press release we issued yesterday afternoon. We've also posted a 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 third quarter 2024 earnings call. I'm pleased to be with you this morning, reviewing our strong financial results. In the third quarter, we generated revenue of $472 million and increase of 15% year over year. We also grew third quarter adjusted EPS by 16% to 44 cents per share. The sound execution of our data and AI led strategy enabled us to further accelerate our growth momentum across both our analytics and digital operations and solutions businesses during the quarter. In analytics, we delivered revenue of $204 million for the quarter, up 5% sequentially and 11% year over year. This marks the strongest analytics in six quarters. And we are delivering on our previously stated objective to accelerate our analytics growth both sequentially and year over year in the second half of 2024. We continue to drive strong double-digit growth across healthcare payment services and data management. While we remain cautious on overall demand for discretionary projects across our vertical markets, including insurance, healthcare, and banking. In our digital operations and solutions business during the third quarter, we delivered strong double digit growth as we leverage our domain, data, and AI capabilities to win in the market. We grew revenue 5% sequentially and 18% year over year to $268 million. This revenue acceleration was driven by double digit growth across all three of our digital operation segments. we continue to experience a stable and favorable demand environment in digital operations driven by our clients' focus on cost efficiency and digital transformation. Our strategy to leverage our domain expertise, data management capabilities, and AI services delivery not only helps our clients achieve real world benefits from AI, but it also differentiates us from our competitors, expands our total addressable market, and extends our runway for growth. This is beginning to manifest itself in our sales pipeline, which is up strong double digits year to date. We have grown the number of large deals over $25 million in total contract value by more than 25% year over year. This gives us confidence that our solutions and capabilities are being recognized as industry leading by our clients. While it is still early innings, particularly with generative AI, I would like to provide details on how we are building new revenue streams across two of our primary capabilities, data modernization and AI implementation. Let me describe our business model in each area. To implement AI, we start with data modernization by securing and structuring high quality data, the foundational asset for any AI application. This includes all aspects of optimizing our client's data estate, including helping them gather data, structure data, migrate data to the cloud, and build more reliable, robust data pipelines. We have continued to enhance our data management capabilities during the quarter with the acquisition of ITI data and our expanded partnership with Databricks. The acquisition of ITI data not only enhances our data engineering capacity, but also grows our existing client footprint in banking. Under our expanded partnership with Databricks, we are building a robust team of Databricks certified talent and deploying new data management and generative AI solutions into the Databricks ecosystem. Together, these strategic actions are speeding the development and implementation of cutting edge data modernization solutions for our clients. Once the data foundation is in place, we select and embed the best combination of AI models into the workflow in order to optimize for cost, latency, and accuracy. Our repertoire of AI models includes advanced pre-trained language models, domain-specific fine-tuned models, and intelligent AI agents suited for targeted tasks. These models are then integrated into the workflow along with human in the loop. This not only requires technical expertise in designing the most effective AI architecture, but also deep domain knowledge to provide context and increase adoption to deliver superior business outcomes. An illustrative client example involves a large multinational pharmaceutical client where we have integrated agentic AI into their audit processes to drive significant improvements. The AI multi agent system we developed handles various aspects of the audit process. One AI agent specializes in anomaly detection by analyzing documents for compliance issues, while another AI agent focuses on summarizing findings for auditors. Together, these AI agents collaborate to cover all audit stages from identifying risks to generating actionable recommendations and contextualizing them against industry frameworks based on the specific needs of each audit. The result for our client has been completion time an improvement in compliance accuracy and overall greater assurance this is just one example of how exl is leveraging its domain data and ai expertise today to deliver real world tangible benefits to our clients In addition to our capabilities in data modernization and AI implementation services, we have developed a number of proprietary generative AI solutions. One prominent example is our recently announced insurance LLM, which is specifically designed to handle the nuances of auto bodily injury, workers' compensation, and general liability claims. Our LLM was built on EXL's 25 years of experience in the insurance industry and more than a decade of proprietary claims-related data. We currently have two clients live with this LLM, a large US-based casualty and life insurer and a regional casualty insurer. As we implement our proprietary insurance LLM across multiple clients, we can access additional data sets to further fine tune our LLM and improve its performance. The combination of enhanced productivity and faster claim resolution with lower indemnity costs and claims leakage is a powerful value driver for our clients. We intend to continue to build out our IP going forward by developing new proprietary solutions, including additional domain-specific LLMs and autonomous agents. We recently launched the new EXL Enterprise AI platform to accelerate development of these solutions leveraging NVIDIA AI software. And I'm pleased to say that our Insurance LLM, Smart Agent Assist, and Code Harbor solutions are now live on this platform. From a revenue perspective, we can embed these proprietary AI solutions into long-term services contracts as an integral part of the overall solution, or we can offer them as standalone solutions based on client needs. One of the keys to maintaining our competitive advantage in data and AI is our ability to attract, develop and retain the best talent in the industry. Our goal is to foster an environment conducive to continuous innovation amongst our more than 57,000 employees. To that end, we continue to attract top talent to EXCEL. We recently welcomed Sanjay Joshi as senior vice president and global leader for our data management practice. Sanjay comes to EXL with extensive leadership experience building data practices across large diverse clients. He most recently served as a senior data practice leader at Accenture. In addition, Sarath Varanasi recently joined EXL as Senior Vice President and Global Leader for Insurance Analytics. Sarath has nearly 30 years experience as a consulting leader in the insurance industry. He joins us from Cognizant, where he most recently led the North America Insurance Business Unit. We also continue to invest heavily in employee development. Our employees have completed nearly 1 million hours of training this year. Nearly 800 of our engineers have completed certification training on our partners' data and AI platforms, and we have another 1,200 enrolled. AWS and Microsoft Azure. We are not only creating career opportunities for our employees by helping them add marketable skills, but we are also enabling them to work with a purpose in a growth environment. The result has been stable attrition levels and a growing pool of highly skilled AI talent. In summary, we delivered in the third quarter and we are encouraged by the continued acceleration of growth across our analytics and digital operations and solutions businesses. The investments we are making in developing new AI-based solutions, expanding our industry partnerships and developing our employees puts us in a strong position successfully execute on our data and AI led strategy and continue our growth trajectory. With that, I'll turn the call over to Mauricio to cover our financial performance in detail.