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Exlservice (EXLS)
:EXLS
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Exlservice Holdings
(NASDAQ:EXLS)
79Outperform
Positive Factors
Client Acquisition
EXLS signed an impressive 17 new logos, reflecting solid end market demand.
Financial Performance
EXLS posted results which were strong and came in above expectations on both the top and bottom lines, driven by an acceleration in growth in both digital operations and analytics while maintaining healthy margins.
Negative Factors
Foreign Exchange Impact
The FY25 guide was mixed, largely due to a ~$10 million FX headwind.
Exlservice Holdings (EXLS) vs. S&P 500 (SPY)
Market Cap
$7.49B
Dividend YieldN/A
Average Volume (3M)1.16M
Price to Earnings (P/E)37.5
Beta (1Y)1.03
Revenue Growth12.74%
EPS Growth9.92%
CountryUS
Employees59,500
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)1.21
Shares Outstanding162,304,670
10 Day Avg. Volume1,216,921
30 Day Avg. Volume1,162,073
Financial Highlights & Ratios
PEG Ratio3.78
Price to Book (P/B)N/A
Price to Sales (P/S)4.07
Price to Cash Flow (P/CF)17.80
P/FCF Ratio19.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$54.14Price Target Upside19.22% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Exlservice Holdings Business Overview & Revenue Model
Company DescriptionExlService Holdings, Inc. is an operations management and analytics company, which engages in providing business process management. It operates through the following segments: Insurance; Healthcare; Travel, Transportation, and Logistics; Finance and Accounting; Analytics; and All Other. The Insurance segment serves property and casualty insurance, life insurance, disability insurance, annuity, and retirement services companies. The Healthcare segment offers services related to care management or population health, payment integrity, revenue optimization, and customer engagement. The Travel, Transportation, and Logistics segment includes business processes in corporate and leisure travel such as reservations, customer service, fulfilment, and finance and accounting. The Finance and Accounting segment comprises of procure-to-pay, order-to-cash, hire-to-retire, record-to-report, regulatory reporting, financial planning and analysis, audit and assurance, treasury, and tax processes. The Analytics segment consists of driving improved business outcomes for customers by generating data-driven insights. The All Other segment involves in banking, financial, utilities, and consulting services. The company was founded by Vikram Talwar and Rohit Kapoor in April 1999 and is headquartered in New York, NY.
How the Company Makes MoneyExlservice Holdings generates revenue primarily through long-term contracts with clients in diverse industries, offering solutions that integrate analytics, automation, and business process outsourcing (BPO). The company’s key revenue streams are derived from its analytics services, which provide data-driven insights to enhance decision-making, and its operations management services, which improve business processes and efficiency. EXLS also engages in strategic partnerships with technology providers and invests in innovative tools to expand its digital capabilities, thereby contributing to its financial growth.
Exlservice Holdings Financial Statement Overview
Summary
Exlservice Holdings demonstrates robust financial health across all metrics. With strong revenue growth, high profitability, stable leverage, and efficient cash flow management, the company is well-positioned in the competitive software industry. Continued focus on managing liabilities and sustaining growth will enhance long-term financial performance.Income Statement
Exlservice Holdings exhibits strong profitability and growth. The gross profit margin improved to 37.61%, and the net profit margin stands at 10.79%, reflecting efficient cost management. The revenue growth rate from 2023 to 2024 was 12.73%, indicating robust demand for the company's offerings. The EBIT and EBITDA margins are healthy at 14.34% and 16.17%, respectively, showcasing operational efficiency.92
Very Positive
Balance Sheet
The balance sheet is stable with a debt-to-equity ratio of 0.09, suggesting conservative leverage. The return on equity is impressive at 21.32%, reflecting effective utilization of equity. The equity ratio of 57.44% underscores financial stability. However, an increase in total liabilities over the years requires monitoring.85
Very Positive
Cash Flow
The cash flow statement is strong, with a free cash flow growth of 40.33% from 2023 to 2024, indicating enhanced cash generation capabilities. The operating cash flow to net income ratio is 1.35, and the free cash flow to net income ratio is 1.12, highlighting efficient cash conversion and utilization.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.84B | 1.63B | 1.41B | 1.12B | 958.43M | Gross Profit |
| 691.01M | 607.77M | 515.45M | 431.36M | 334.50M | EBIT |
| 263.62M | 238.75M | 192.16M | 155.88M | 110.02M | EBITDA |
| 297.20M | 305.72M | 262.32M | 208.15M | 180.03M | Net Income Common Stockholders |
| 198.30M | 184.56M | 142.97M | 114.76M | 89.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 340.58M | 290.83M | 297.70M | 313.88M | 402.82M | Total Assets |
| 1.62B | 1.44B | 1.35B | 1.28B | 1.25B | Total Debt |
| 81.23M | 271.76M | 313.13M | 347.01M | 330.73M | Net Debt |
| -72.13M | 134.81M | 194.46M | 211.67M | 112.20M | Total Liabilities |
| 688.54M | 552.53M | 587.94M | 589.75M | 528.68M | Stockholders Equity |
| 929.86M | 889.44M | 758.18M | 693.16M | 719.17M |
| Cash Flow | Free Cash Flow | |||
| 222.26M | 158.40M | 121.31M | 147.14M | 160.75M | Operating Cash Flow |
| 268.52M | 211.20M | 166.14M | 184.39M | 202.97M | Investing Cash Flow |
| -119.10M | -12.00M | -96.55M | -114.27M | -18.32M | Financing Cash Flow |
| -119.10M | -181.45M | -81.72M | -146.88M | -89.56M |
Exlservice Holdings Technical Analysis
Negative
45.41
Price Trends
48.27
Negative
46.24
Negative
40.21
Positive
Market Momentum
-0.90
Positive
33.64
Neutral
12.37
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXLS, the sentiment is Negative. The current price of 45.41 is below the 20-day moving average (MA) of 48.30, below the 50-day MA of 48.27, and above the 200-day MA of 40.21, indicating a neutral trend. The MACD of -0.90 indicates Positive momentum. The RSI at 33.64 is Neutral, neither overbought nor oversold. The STOCH value of 12.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EXLS.
Exlservice Holdings Risk Analysis
Exlservice Holdings disclosed 31 risk factors in its most recent earnings report. Exlservice Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Exlservice Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $39.32B | 17.64 | 16.21% | 1.52% | 1.98% | 7.16% | |
80 Outperform | $8.63B | 17.25 | 22.15% | 1.24% | 6.46% | -16.94% | |
79 Outperform | $7.49B | 37.47 | 21.80% | ― | 12.74% | 9.92% | |
75 Outperform | $79.10B | 23.76 | 33.16% | 2.24% | 3.08% | 11.92% | |
69 Neutral | $17.13B | 14.49 | 29.12% | 1.15% | 7.93% | 541.97% | |
58 Neutral | $21.67B | 10.04 | -18.58% | 2.39% | 5.01% | -23.17% | |
47 Neutral | $3.17B | 267.98 | -2.46% | ― | -5.65% | 78.20% |
* Technology Sector Average
Performance Comparison
EXLS
Exlservice Holdings
45.41
14.68
47.77%
CTSH
Cognizant
78.34
3.17
4.22%
G
Genpact
49.35
16.47
50.09%
INFY
Infosys
18.29
-0.83
-4.34%
LDOS
Leidos Holdings
132.86
6.05
4.77%
DXC
DXC Technology
16.85
-3.66
-17.84%
Exlservice Holdings Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -6.76% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance with significant revenue growth and a robust increase in adjusted EPS, driven by success in digital operations and AI integration. However, there are challenges with foreign exchange headwinds and the need for increased investment, which may impact margins. Overall, the positive aspects significantly outweigh the negatives.Highlights
Strong Revenue Growth
Revenue for the fourth quarter was $481 million, an increase of 16% year over year. Full year 2024 revenue was $1.838 billion, up 12.7% year over year.
Significant Growth in Digital Operations
Digital operations and solutions businesses grew revenue by 18% year over year to $274 million. This growth was consistent across all three industry verticals: insurance, healthcare, and emerging markets.
Increase in Adjusted EPS
Fourth quarter adjusted EPS increased by 26% to $0.44 per share. Full year adjusted EPS was $1.65, up 15.4% year over year.
AI and Data Integration
AI and data accounted for 53% of revenue in 2024. The company launched eaccelerate.ai, an agentic AI platform, and expanded partnerships with NVIDIA, Databricks, AWS, Microsoft, and Google.
Strong Cash Flow and Share Repurchase
Generated cash flow from operations of $269 million in 2024, up 27% year over year. Repurchased 6.3 million shares for $196.5 million.
Lowlights
Foreign Exchange Headwind
Anticipated a foreign exchange headwind of $10 million for 2025.
Investment Needs Impacting Margins
Need for increased investment in R&D and development of AI solutions may affect gross margins, with operating margin increases projected to be only 10 to 20 basis points for 2025.
Deceleration in Analytics Revenue Growth
Analytics revenue growth was 9.1% year over year for 2024, which is lower compared to other segments.
Company Guidance
During the fourth quarter and full year 2024 earnings call, ExlService Holdings, Inc. provided robust guidance, highlighting their strong financial performance and strategic direction. The company reported a 16% year-over-year increase in fourth-quarter revenue to $481 million, with the adjusted EPS growing by 26% to $0.44 per share. Their analytics business generated $208 million in revenue, marking a 14% year-over-year increase, while the digital operations and solutions business grew 18% year over year to $274 million. For 2025, ExlService anticipates revenue to range between $2.025 billion and $2.06 billion, representing a 10% to 12% year-over-year growth, with adjusted EPS expected to be between $1.83 and $1.89, reflecting an 11% to 14% increase. The company also reported that data and AI accounted for 53% of their 2024 revenue, underscoring their strategic focus on these areas. They plan to transition their operating model to include industry market units and new financial reporting segments starting in the first quarter of 2025, aligning with their data and AI growth strategy.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.