EX-99.1 2 exlq125pressrelease.htm EX-99.1 Document

Exhibit 99.1


EXL REPORTS 2025 FIRST QUARTER RESULTS


2025 First Quarter Revenue of $501.0 Million, up 14.8% year-over-year
Q1 Diluted EPS (GAAP) (1) of $0.40, up 38.3% from $0.29 in Q1 of 2024
Q1 Adjusted Diluted EPS (Non-GAAP) (1) of $0.48, up 26.9% from $0.38 in Q1 of 2024



New York - April 29, 2025 (GLOBE NEWSWIRE) - ExlService Holdings, Inc. (NASDAQ: EXLS), a global data and AI company, today announced its financial results for the quarter ended March 31, 2025.

Chairman and Chief Executive Officer Rohit Kapoor said, “We are pleased with our first quarter results and strong start to the year, as we delivered revenue and adjusted diluted EPS growth of 15% and 27% respectively. Our strong business momentum underscores the successful execution of our differentiated data and AI-led strategy and demonstrates the enduring resilience and adaptability of EXL’s business model.”

Chief Financial Officer Maurizio Nicolelli said, “While we remain prudent in our outlook given the increasing level of macro-economic uncertainty, we are increasing our revenue guidance for the year, based on our business momentum and more favorable currency exchange rates. We now expect revenue to be in the range of $2.035 billion to $2.065 billion, up from our prior guidance of $2.025 billion to $2.060 billion. This represents 11% to 12% year-over-year growth on a reported basis, or 11% to 13% on a constant currency basis. We continue to expect our adjusted diluted earnings per share for 2025 to be in the range of $1.83 to $1.89, representing an 11% to 14% increase over 2024, as we continue to accelerate our data and AI investments to generate future growth.”














______________________________________________________________
1.Reconciliations of adjusted (non-GAAP) financial measures to the most directly comparable GAAP measures, where applicable, are included at the end of this release under “Reconciliation of Adjusted Financial Measures to GAAP Measures.” These non-GAAP measures, including adjusted diluted EPS and constant currency measures, are not measures of financial performance prepared in accordance with GAAP.


Financial Highlights: First Quarter 2025

•Revenue for the quarter ended March 31, 2025, increased to $501.0 million compared to $436.5 million for the first quarter of 2024, an increase of 14.8% on a reported basis and 15.1% on a constant currency basis. Revenue increased by 4.1% sequentially on a reported basis and 4.3% on a constant currency basis, from the fourth quarter of 2024.
RevenueGross Margin
Three months endedThree months ended
Reportable Segments(1)
March 31, 2025March 31, 2024March 31, 2025March 31, 2024
(dollars in millions)
Insurance$172.0 $158.3 36.6 %33.8 %
Healthcare and Life Sciences125.6 100.7 43.9 %45.3 %
Banking, Capital Markets and Diversified Industries117.7 103.2 37.3 %36.1 %
International Growth Markets85.7 74.3 36.6 %35.9 %
Total Revenue, net$501.0 $436.5 38.6 %37.4 %

(1) In the first quarter of 2025, the Company implemented operational and structural changes to accelerate the execution of its data and AI-led strategy. Under the new structure, the Company reports its financial performance based on new segments presented in the table above, and as described in more detail in its Quarterly Report on Form 10-Q for the three months ended March 31, 2025, that is being filed with the SEC. In conjunction with the new reporting structure, the Company has recast prior period amounts, wherever applicable, to conform to the way the Company internally manages and monitors segment performance.

•Operating income margin for the quarter ended March 31, 2025 was 15.7%, compared to 14.1% for the first quarter of 2024 and 14.8% for the fourth quarter of 2024. Adjusted operating income margin for the quarter ended March 31, 2025 was 20.1%, compared to 18.9% for the first quarter of 2024 and 18.8% for the fourth quarter of 2024.

•Diluted earnings per share for the quarter ended March 31, 2025 was $0.40, compared to $0.29 for the first quarter of 2024 and $0.31 for the fourth quarter of 2024. Adjusted diluted earnings per share for the quarter ended March 31, 2025 was $0.48, compared to $0.38 for the first quarter of 2024 and $0.44 for the fourth quarter of 2024.






Business Highlights: First Quarter 2025

•Won 10 new clients in the first quarter of 2025.

•Named a Leader in four categories in the ISG Provider Lens™ Insurance Services 2024 report. Earning top honors in the North American Life & Retirement, Property & Casualty, Life & Retirement TPA Insurance Services, and Insurance IT Services.

•Named a Leader and a Star Performer in Everest Group’s Life and Annuities Insurance Business Process Services and Third-Party Administrator (TPA) PEAK Matrix® Assessment 2025.

•Recognized as part of Newsweek’s America’s Most Responsible Companies 2025, Forbes’ Most Trusted Companies in America 2025, USA Today's America’s Climate Leaders 2025, and The Financial Times’ Best Employers Asia-Pacific 2025.


2025 Guidance
Based on current visibility, and a U.S. dollar to Indian rupee exchange rate of 85.5, U.K. pound sterling to U.S. dollar exchange rate of 1.30, U.S. dollar to the Philippine peso exchange rate of 57.0 and all other currencies at current exchange rates, we are providing the following guidance for the full year 2025:

•Revenue of $2.035 billion to $2.065 billion, representing an increase of 11% to 12% on a reported basis, and 11% to 13% on a constant currency basis from 2024; and

•Adjusted diluted earnings per share of $1.83 to $1.89, representing an increase of 11% to 14% from 2024.


Conference Call
ExlService Holdings, Inc. will host a conference call on Wednesday, April 30, 2025 at 10:00 A.M. ET to discuss the Company’s quarterly operating and financial results. The conference call will be available live via the internet by accessing the investor relations section of EXL’s website at ir.exlservice.com, where an accompanying investor-friendly spreadsheet of historical operating and financial data can also be accessed. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software.
Please note that there is a new system to access the live call-in order to ask questions. To join the live call, please register here. A dial-in and unique PIN will be provided to join the call. For those who cannot access the live broadcast, a replay will be available on the EXL website ir.exlservice.com for a period of twelve months.




About ExlService Holdings, Inc.
EXL (NASDAQ: EXLS) is a global data and artificial intelligence ("AI") company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed. EXL harnesses the power of data, AI, and deep industry knowledge to transform businesses, including the world’s leading corporations in industries including insurance, healthcare, banking and financial services, media and retail, among others. EXL was founded in 1999 with the core values of innovation, collaboration, excellence, integrity and respect. We are headquartered in New York and have more than 60,000 employees spanning six continents. For more information, visit www.exlservice.com.

Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to EXL's operations and business environment, all of which are difficult to predict and many of which are beyond EXL’s control. Forward-looking statements include information concerning EXL’s possible or assumed future results of operations, including descriptions of its business strategy. These statements may include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of management's experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although EXL believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect EXL’s actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors, which include our ability to maintain and grow client demand, our ability to hire and retain sufficiently trained employees, and our ability to accurately estimate and/or manage costs, rising interest rates, rising inflation and recessionary economic trends, are discussed in more detail in EXL’s filings with the Securities and Exchange Commission, including EXL’s Annual Report on Form 10-K. You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect EXL. EXL has no obligation to update any forward-looking statements after the date hereof, except as required by applicable law.


EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amount and share count)
 Three months ended March 31,
20252024
Revenues, net$501,019 $436,507 
Cost of revenues (1)
307,705 273,424 
Gross profit (1)
193,314 163,083 
Operating expenses:   
General and administrative expenses59,417 53,243 
Selling and marketing expenses41,925 35,970 
Depreciation and amortization expense13,557 12,346 
Total operating expenses114,899 101,559 
Income from operations78,415    61,524 
Foreign exchange gain, net1,192 359 
Interest expense(4,144)(3,291)
Other income, net4,703 3,952 
Income before income tax expense and earnings from equity affiliates80,166 62,544 
Income tax expense13,496 13,753 
Income before earnings from equity affiliates66,670 48,791 
Loss from equity-method investment(109)(28)
Net income$66,561 $48,763 
Earnings per share:   
Basic$0.41 $0.30 
Diluted$0.40 $0.29 
Weighted-average number of shares used in computing earnings per share:
Basic162,490,179 165,082,387 
Diluted164,557,333 166,726,853 
(1) Exclusive of depreciation and amortization expense.



EXLSERVICE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except per share amount and share count)
As of
March 31, 2025December 31, 2024
Assets
Current assets:
Cash and cash equivalents$140,442 $153,355 
Short-term investments190,978 187,223 
Restricted cash9,826 9,972 
Accounts receivable, net 339,856 304,322 
Other current assets150,203 140,317 
Total current assets831,305 795,189 
Property and equipment, net 107,148 101,837 
Operating lease right-of-use assets71,150 68,784 
Restricted cash8,210 8,071 
Deferred tax assets, net109,953 104,747 
Goodwill420,494 420,387 
Other intangible assets, net 46,092 49,331 
Long-term investments20,134 13,972 
Other assets61,925 56,085 
Total assets$1,676,411 $1,618,403 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$5,648 $5,884 
Current portion of long-term borrowings4,886 4,886 
Deferred revenue20,138 19,264 
Accrued employee costs63,575 129,994 
Accrued expenses and other current liabilities131,980 113,597 
Current portion of operating lease liabilities17,426 16,491 
Total current liabilities243,653 290,116 
Long-term borrowings, less current portion302,377 283,598 
Operating lease liabilities, less current portion61,408 59,851 
Deferred tax liabilities, net1,625 1,403 
Other non-current liabilities55,471 53,573 
Total liabilities664,534 688,541 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued— — 
Common stock, $0.001 par value; 400,000,000 shares authorized, 207,758,497 shares issued and 162,683,343 shares outstanding as of March 31, 2025 and 206,510,587 shares issued and 161,801,212 shares outstanding as of December 31, 2024
207 206 
Additional paid-in capital609,592 588,583 
Retained earnings1,348,521 1,281,960 
Accumulated other comprehensive loss(142,787)(154,722)
Total including shares held in treasury1,815,533 1,716,027 
Less: 45,075,154 shares as of March 31, 2025 and 44,709,375 shares as of December 31, 2024, held in treasury, at cost
(803,656)(786,165)
Total Stockholders’ equity1,011,877 929,862 
Total liabilities and stockholders’ equity $1,676,411 $1,618,403 


EXLSERVICE HOLDINGS, INC.
Reconciliation of Adjusted Financial Measures to GAAP Measures

In addition to its reported operating results in accordance with U.S. generally accepted accounting principles (GAAP), EXL has included in this release certain financial measures that are considered non-GAAP financial measures, including the following:
(i)Adjusted operating income and adjusted operating income margin;
(ii)Adjusted EBITDA and adjusted EBITDA margin;
(iii)Adjusted net income and adjusted diluted earnings per share; and
(iv)Revenue growth on constant currency basis.

These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated. EXL believes that providing these non-GAAP financial measures may help investors better understand EXL’s underlying financial performance. Management also believes that these non-GAAP financial measures, when read in conjunction with EXL’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s results and comparisons of the Company’s results with the results of other companies. Additionally, management considers some of these non-GAAP financial measures to determine variable compensation of its employees. The Company believes that it is unreasonably difficult to provide its earnings per share financial guidance in accordance with GAAP, or a qualitative reconciliation thereof, for a number of reasons, including, without limitation, the Company’s inability to predict its future stock-based compensation expense under ASC Topic 718, the amortization of intangibles associated with future acquisitions and the currency fluctuations and associated tax effects. As such, the Company presents guidance with respect to adjusted diluted earnings per share. The Company also incurs significant non-cash charges for depreciation that may not be indicative of the Company’s ability to generate cash flow.

EXL non-GAAP financial measures exclude, where applicable, stock-based compensation expense, amortization of acquisition-related intangible assets, provision for litigation matters, effects of termination of leases, certain defined social security contributions, allowance for certain material expected credit losses, other acquisition-related expenses or benefits and effect of any non-recurring tax adjustments. Acquisition-related expenses or benefits include, changes in the fair value of contingent consideration, external deal costs, integration expenses, direct and incremental travel costs and non-recurring benefits or losses. Our adjusted net income and adjusted diluted EPS also excludes the effects of income tax on the above pre-tax items, as applicable. The effects of income tax of each item is calculated by applying the statutory rate of the local tax regulations in the jurisdiction in which the item was incurred.

A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and exclude costs that are recurring, namely stock-based compensation and amortization of acquisition-related intangible assets. EXL compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.

EXL’s primary exchange rate exposure is with the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand. The average exchange rate of the U.S. dollar against the Indian rupee increased from 83.12 during the quarter ended March 31, 2024 to 86.52 during the quarter ended March 31, 2025, representing a depreciation of 4.1% against the U.S. dollar. The average exchange rate of the U.S. dollar against the Philippine peso increased from 56.24 during the quarter ended March 31, 2024 to 57.86 during the quarter ended March 31, 2025, representing a depreciation of 2.9% against the U.S. dollar. The average exchange rate of the U.K. pound sterling against the U.S. dollar decreased from 1.27 during the quarter ended March 31, 2024 to 1.26 during the quarter ended March 31, 2025, representing a depreciation of 0.1% against the U.S. dollar. The average exchange


rate of the U.S. dollar against the South African rand decreased from 18.96 during the quarter ended March 31, 2024 to 18.49 during the quarter ended March 31, 2025, representing an appreciation of 2.5% against the U.S. dollar.

The following table shows the reconciliation of these non-GAAP financial measures for the three months ended March 31, 2025 and March 31, 2024, and the three months ended December 31, 2024:

Reconciliation of Adjusted Operating Income and Adjusted EBITDA
(Amounts in thousands)
 Three months ended
March 31,December 31,
202520242024
Net Income (GAAP)$66,561 $48,763 $50,672 
add: Income tax expense13,496 13,753 19,850 
add/(subtract): Foreign exchange gain, net, interest expense, gain/(loss) from equity-method investment and other income/(loss), net(1,642)(992)720 
Income from operations (GAAP)$78,415 $61,524 $71,242 
add: Stock-based compensation expense19,187 17,852 15,479 
add: Amortization of acquisition-related intangibles3,246 3,080 4,024 
Adjusted operating income (Non-GAAP) $100,848  $82,456  $90,745 
Adjusted operating income margin as a % of Revenue (Non-GAAP)20.1 %18.9 %18.8 %
add: Depreciation on long-lived assets10,311 9,266 12,140 
Adjusted EBITDA (Non-GAAP)$111,159 $91,722 $102,885 
Adjusted EBITDA margin as a % of revenue (Non-GAAP) 22.2 %21.0 %21.4 %







Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share
(Amounts in thousands, except per share data)
Three months ended
March 31,December 31,
202520242024
Net income (GAAP)$66,561 $48,763 $50,672 
add: Stock-based compensation expense19,187 17,852 15,479 
add: Amortization of acquisition-related intangibles3,246 3,080 4,024 
add/(subtract): Changes in fair value of contingent consideration— (589)— 
add/(subtract): Other tax expense/(benefits) (a)— 151 3,860 
subtract: Tax impact on stock-based compensation expense (b)(9,105)(5,358)(1,769)
subtract: Tax impact on amortization of acquisition-related intangibles(799)(766)(921)
Adjusted net income (Non-GAAP)$79,090 $63,133 $71,345 
Adjusted diluted earnings per share (Non-GAAP)$0.48 $0.38 $0.44 

(a) To exclude other tax expenses/(benefits), primarily related to certain deferred tax assets and liabilities.

(b) Tax impact includes $14,526 and $7,523 during the three months ended March 31, 2025 and 2024 respectively, and $500 during the three months ended December 31, 2024, related to discrete benefit recognized in income tax expense in accordance with ASU No. 2016-09, Compensation - Stock Compensation.









Contacts:
Investor Relations
John Kristoff
Vice President, Investor Relations
+1 212 209 4613
ir@exlservice.com

Media - US
Keith Little
Assistant Vice President, Media Relations
+1 703 598 0980
media.relations@exlservice.com