Exlservice ((EXLS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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ExlService Holdings, Inc. recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance, particularly in data and AI initiatives. Despite some challenges such as decreased operating margins and increased employee costs, the overall outlook remains robust due to significant advancements in strategic partnerships and AI technologies.
Strong Revenue Growth
ExlService reported a remarkable revenue of $514 million for the second quarter of 2025, marking a 15% increase year-over-year. This growth was fueled by strong performance across all operating segments, with data and AI-led revenue experiencing a 17% year-over-year increase.
Increased EPS
The company showcased a significant improvement in financial performance with an adjusted EPS growth of 20%, reaching $0.49 per share. This indicates a strong upward trend in profitability.
Healthcare and Life Sciences Segment Growth
The healthcare and life sciences segment stood out with a 22% revenue growth year-over-year. This was primarily driven by higher volumes in payment services and the expansion of existing client relationships.
International Growth Market Expansion
ExlService’s international growth markets segment expanded to account for 18% of total revenue, indicating substantial potential for further client base expansion in these regions.
AI Advancements and New Offerings
The company expanded its proprietary large language model offerings, including solutions for property insurance underwriting and finance and accounting. These advancements are expected to enhance client services and operational efficiency.
Strategic Partnerships
ExlService announced a collaboration with Genesys to enhance AI-powered customer experience services. This partnership aims to transform customer engagement across multiple industries, showcasing the company’s commitment to innovation.
Adjusted Operating Margin Decrease
The adjusted operating margin for the quarter was 19.6%, a decrease of 20 basis points year-over-year. This decline was attributed to investments in new solutions, reflecting the company’s strategic focus on long-term growth.
Challenges in Maintaining Growth in Insurance Segment
While the insurance segment experienced stable growth, its rate was lower compared to other segments, with an 8.6% year-over-year revenue increase. This highlights a potential area for improvement.
Increased Employee Costs
Employee costs rose significantly as the company hired more highly skilled talent to support its data and AI initiatives, reflecting the growing demand for expertise in these areas.
Forward-Looking Guidance
Looking ahead, ExlService raised its full-year guidance, anticipating revenue between $2.05 billion and $2.07 billion, alongside adjusted EPS growth of 13% to 15%. The company aims to maintain its adjusted operating margin target slightly higher than last year’s 19.4%, signaling confidence in its ongoing strategies.
In summary, ExlService’s earnings call highlighted a strong financial performance with notable growth in data and AI initiatives. Despite some challenges, the company’s strategic partnerships and technological advancements position it well for future success. Investors can look forward to continued growth and innovation from ExlService.