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EXL Reports 2015 Second Quarter Results

2015 Second Quarter Revenues of $155.6 Million

Diluted EPS (GAAP) of $0.35

Adjusted Diluted EPS (Non-GAAP) of $0.48

NEW YORK, July 30, 2015 (GLOBE NEWSWIRE) – ExlService Holdings, Inc. (NASDAQ:EXLS), a leading provider of Operations Management and Analytics & Business Transformation services, today announced its financial results for the second quarter of 2015.

Rohit Kapoor, Vice Chairman and CEO, commented: “We are pleased with EXL’s strong second quarter and first half of 2015 financial and operating results. We made good progress on the execution of our key priorities by winning new strategic deals, strengthening our leadership position in analytics and improving our profitability. Operations Management had strong revenue momentum driven by expansion in major client relationships and contribution from our acquisition of Overland Solutions. In addition, our pipeline for Operations Management services remains robust due to differentiated capabilities, as well as leveraging Business EXLerator and BPaaS solutions.

Analytics & Business Transformation revenue grew by 69% year-over-year reflecting strong organic growth for our analytics services and the impact of acquisitions. The demand for our analytics products and services remains strong across our chosen verticals.”

Vishal Chhibbar, EXL’s CFO, commented: “In the second quarter, EXL had revenues of $155.6 million, up 24% from second quarter 2014 revenues which excludes the reimbursement of disentanglement costs. During the quarter we expanded our margins, increased operating leverage and delivered an adjusted diluted EPS of $0.48, up $0.07 both year over year and sequentially.

Based on our strong year-to-date performance and continued growth momentum in the second half of 2015, EXL is raising its revenue guidance to$610 million - $625 million from $600 million - $620 million, representing an annual growth of 16% to 19%, despite a currency headwind. EXL is raising its adjusted diluted earnings per share guidance to $1.88 - $1.98 from $1.85 - $1.95.”

Our business is divided into two reporting segments: Operations Management and Analytics & Business Transformation.

Reconciliations of adjusted financial measures to GAAP are included at the end of this release.

  • Revenues for the quarter ended June 30, 2015 were $155.6 million compared to $119.7 million for the quarter ended June 30, 2014 and $143.5 million for the quarter ended March 31, 2015. Revenues for the quarter ended June 30, 2014 were reduced by $5.7 million due to the reimbursement of disentanglement costs. Operations Management revenues for the quarter ended June 30, 2015 were $112.6 millioncompared to $94.3 million for the quarter ended June 30, 2014 and $110.7 million for the quarter ended March 31, 2015. Analytics & Business Transformation revenues for the quarter ended June 30, 2015 were $43.0 million compared to $25.4 million for the quarter ended June 30, 2014and $32.8 million for the quarter ended March 31, 2015.
  • Gross margin for the quarter ended June 30, 2015 was 35.4% compared to 32.1% for the quarter ended June 30, 2014 and 35.1% for the quarter ended March 31, 2015. Operations Management gross margin for the quarter ended June 30, 2015 was 36.5% compared to 33.7% for the quarter ended June 30, 2014 and 36.3% for the quarter ended March 31, 2015. Analytics & Business Transformation gross margin for the quarter ended June 30, 2015 was 32.7% compared to 26.2% for the quarter ended June 30, 2014 and 31.0% for the quarter ended March 31, 2015.
  • Operating margin for the quarter ended June 30, 2015 was 9.8% compared to 5.1% for the quarter ended June 30, 2014 and 9.4% for the quarter ended March 31, 2015.
  • Net income for the quarter ended June 30, 2015 was $12.1 million compared to $7.8 million for the quarter ended June 30, 2014 and $9.6 million for the quarter ended March 31, 2015.
  • Adjusted operating margin for the quarter ended June 30, 2015 was 13.9% compared to 12.2% for the quarter ended June 30, 2014 and 13.8% for the quarter ended March 31, 2015. Adjusted EBITDA for the quarter ended June 30, 2015 was $26.9 million compared to $20.5 million for the quarter ended June 30, 2014 and $24.8 million for the quarter ended March 31, 2015.
  • Diluted earnings per share for the quarter ended June 30, 2015 was $0.35 compared to $0.23 for the quarter ended June 30, 2014 and $0.28 for the quarter ended March 31, 2015. Adjusted diluted earnings per share for the quarter ended June 30, 2015 was $0.48 compared to $0.41 for each of the quarters ended June 30, 2014 and March 31, 2015.

Business Highlights

  • Won six new clients in Operations Management and one new client in Analytics & Business Transformation.
  • Expanded multiple Operations Management relationships, including migrating 34 new processes in the second quarter of 2015.
  • Signed a definitive agreement with Carvajal Tecnologia y Servicios S.A.S. of Colombia that will allow EXL to address the growing demand for Spanish and bilingual Operations Management solutions from Bogotá and Cali.
  • Opened a delivery center in Cape Town, South Africa to provide English language customer service for UK clients.
  • Recognized among “The 100 Most Trustworthy Companies in America” for the year 2015 by Forbes.
  • Recognized with four industry innovation awards by the consultancy firm Aecus for technology and analytics-driven high business impact solutions in the Utilities, Insurance and Travel, Transportation and Logistics industries.
  • Positioned as a Leader in the Gartner “Magic Quadrant for Finance & Accounting BPO, 2015″ (1)
  • Positioned as a Leader in the “IDC MarketScape: Worldwide Finance and Accounting (F&A) BPO Services 2015 Vendor Assessment Report.”
  • Received an award for excellence for our Analytics solution on “Preventive Hospitalization” at the June 2015 NASSCOM Big Data & Analytics Summit for excellence for analytics service.
  • Released Version 18 of LifePRO® with 60 significant business and technology enhancements.
  • Recorded headcount as of June 30, 2015 of 22,684 compared to 22,618 as of March 31, 2015 and 23,071 (including employees under managed services) as of June 30, 2014.
  • Reported employee attrition for the quarter ended June 30, 2015 of 34.9%, compared with 33.6% for the quarter ended March 31, 2015 and 34.1% for the quarter ended June 30, 2014.

2015 Outlook

Based on current visibility and an Indian rupee to U.S. dollar exchange rate of 64, the Company is updating its guidance for the calendar year 2015:

  • Revenue of $610 million to $625 million.
  • Adjusted diluted earnings per share, excluding the impact of stock-based compensation expense, amortization of intangibles and associated tax impacts, of $1.88 to $1.98.

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