ExlService Holdings, Inc.

Hello and welcome to the EXL Service Holdings Inc Q1 2025 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, Abigail. Hello, and thank you for joining EXL's first quarter 2025 financial results conference call. On the call with me today are Rohit Kapoor, Chairman and Chief Executive Officer, and Maurizio Nicalelli, Chief Financial Officer. We hope you've had an opportunity to review the first quarter earnings press release we issued yesterday afternoon. We have also posted a slide deck and investor fact sheet on our investor relations 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 our 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 first quarter 2025 earnings call. I'm pleased to report that we started the year with strong first quarter performance. In the first quarter, we generated revenue of $501 million, an increase of 15% year over year. And we grew first quarter adjusted EPS by 27% to 48 cents per share. Our results demonstrate significant momentum across all our segments. Effective this quarter, we are reporting our business performance across four new segments consistent with how we are reviewing financial information and making operating decisions. The new segments are insurance, healthcare and life sciences, banking capital markets and diversified industries, and international growth markets. We delivered solid growth in the insurance segment, which represented more than a third of our revenue in the quarter. Insurance is a core strategic market for us where we have been a consistent leader for many years. We are excited about our growth opportunities in insurance as clients move from digital operations to AI-powered operations. Healthcare and life sciences is becoming a larger part of our business, representing about a quarter of our revenue. We continue to deliver exceptionally strong revenue growth in this segment, driven by higher volumes in payment services and expansion of business with existing clients, powered by our data and AI capabilities. banking, capital markets, and diversified industries also represented nearly a quarter of our revenue. And we were able to accelerate revenue growth in the quarter. With a significant customer base in this segment, the opportunity to drive value through integrated capabilities leveraging data and AI is tremendous. Our international growth markets segment enables us to leverage our data and AI strengths in growing markets outside the US, diversifying our business geographically, which is a strategic priority. In the first quarter, we grew revenue in this segment, and it now represents over 17% of our total revenue. We have immense potential to grow our revenue with existing clients in this segment, and we have significant opportunities to expand our client base. Beginning with the first quarter and going forward, we will be reporting data and AI-led revenue on a quarterly basis. Our data and AI-led revenue is made up of AI-powered solutions and services in which we embed data and AI into client workflows. As clients evolve from digital operations to data and AI-powered operations and outcomes, these capabilities represent the next stage of enterprise transformation. During the quarter, our data and AI-led revenue grew 16% year over year and represented 53% of total revenue with strong performance across all four of our reporting segments. The robust execution of our data and AI strategy has positioned EXL as an industry leader in embedding AI into the workflow and deliver business outcomes that are much superior for our clients. As our clients navigate current economic uncertainty, they are increasingly focused on lowering their costs As a result, our overall market demand environment remains robust. Our sales pipeline remains strong and grew both year over year and sequentially in the first quarter. We continue to invest in growing and maturing our data and AI capabilities to bolster our competitive advantage and drive revenue growth. and we have fully leaned into agentic AI as a key value driver for clients and a differentiator for eXcel. During the quarter, we launched eAccelerate.ai, our agentic AI platform, which enables clients to reimagine their workflows by embedding eXcel or third-party AI agents into their business operations. Our platform enables us to deploy AI much more quickly and at a significantly lower cost, resulting in substantial return on investment. Autonomous AI agents have the power to unlock exponential productivity gains, especially when they are domain optimized and seamlessly integrated into the workflow. Our open and modular platform includes more than 15 industry-specific proprietary AI agents that have been already deployed with clients across our vertical markets. Examples of our agentic AI use cases include A leading specialty insurance company using underwriting agents to efficiently search, extract, enrich, and categorize risk from a variety of unstructured data sources. A top 10 global insurer using specialized claims agents to identify and assist in third-party recovery Determine accuracy of payments and identify potential fraud. A Fortune 500 energy company using EXL governance agents to ensure security and regulatory compliance. A large healthcare client leveraging our audit agents to identify potential violations, analyze root causes, and ensure compliance with regulatory standards. And a large global bank utilizing operational training agents to enable real-time knowledge access, conversation analysis, and simulations. These are just a few examples of the many agentic AI use cases we have deployed. We are thrilled by the overwhelming client response to excelerate.ai, underscoring our leadership as an AI-first mover within the industry. We look forward to providing an in-depth update on our data and AI strategy and solutions next tuesday at our investor strategy update event here in new york simply put we are executing with precision and discipline amid a rapidly evolving macroeconomic landscape our financial results and strong sales pipeline demonstrate the strength and durability of our business model Excell benefits from several differentiators and structural advantages that help insulate us from economic volatility. These advantages include a high percentage of annuity-like revenue, which is tied to mission-critical operations for our clients, A strong diversified client base anchored by Fortune 1000 leaders in stable, less cyclical sectors like healthcare and insurance. And finally, a business model focused on driving efficiencies and cost savings to our clients, which becomes even more relevant during slower economic cycles. These factors provide us with an incredibly resilient business model, which has historically performed well in a variety of economic environments. While we are encouraged by our strong performance in the first quarter, we are mindful of the potential challenges that our clients face in the current environment. Therefore, we remain confident but prudent in our outlook for the year. We are raising our revenue guidance range to account for our current business momentum and adjusting for more favorable currency exchange rates. In conclusion, our balanced and resilient mix of business unique industry exposure, and the growing demand to reduce costs and improve business outcomes positions us well to deliver on our 2025 revenue and earnings growth targets despite broad economic uncertainty. With that, I'll turn the call over to Maurizio.