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Exlservice Holdings (EXLS)
NASDAQ:EXLS
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Exlservice Holdings
(NASDAQ:EXLS)
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Rating:73Outperform
Price Target:
$49.00
▲(12.00% Upside)
Exlservice Holdings demonstrates strong financial performance and positive earnings call sentiment, driven by data and AI-led growth. However, the high P/E ratio and neutral technical indicators suggest caution. The company's confidence in future growth, despite some segment-specific challenges, supports a moderately positive outlook.
Positive Factors
Revenue Growth
Consistent revenue growth reflects strong market demand and effective business expansion, particularly in health care and life sciences.
Data and AI-Led Solutions
The focus on data and AI solutions positions EXL well for future growth, leveraging technology to enhance service offerings and client value.
Cash Flow Management
Strong cash flow growth indicates robust operational efficiency and financial health, supporting future investments and shareholder returns.
Negative Factors
Insurance Segment Growth Lag
Slower growth in the insurance segment may indicate competitive pressures or market saturation, impacting overall diversification and growth.
Adjusted Operating Margin Decline
Declining margins due to investments could pressure profitability, requiring careful management to balance growth and cost efficiency.
EPS Guidance for H2 2025
Lower expected EPS in H2 2025 highlights potential short-term profitability challenges from increased investment in growth initiatives.
Exlservice Holdings (EXLS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.07B
Dividend YieldN/A
Average Volume (3M)1.37M
Price to Earnings (P/E)30.3
Beta (1Y)0.83
Revenue Growth15.15%
EPS Growth34.33%
CountryUS
Employees59,500
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.49
Shares Outstanding161,513,150
10 Day Avg. Volume1,690,974
30 Day Avg. Volume1,368,359
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue3.64
Enterprise Value/Gross Profit9.57
Enterprise Value/Ebitda18.35
Forecast
1Y Price Target
$53.00Price Target Upside21.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Exlservice Holdings Business Overview & Revenue Model
Company DescriptionExlService Holdings, Inc. operates as a data analytics, and digital operations and solutions company in the United States and internationally. It operates through Insurance, Healthcare, Analytics, and Emerging Business segments. The company provides digital operations and solutions and analytics-driven services across the insurance industry in areas, such as claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business acquisition, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer service using digital technology, artificial intelligence, machine learning, and advanced automation; digital customer acquisition services using a software-as-a-service delivery model through LifePRO and LISS platforms; subrogation services; and Subrosource software platform, an end-to-end subrogation platform. It also offers CareRadius, an integrated care management offering; and health care services related to care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement to healthcare payers, providers, pharmacy benefit managers, and life sciences organizations. Further, it offers predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management, risk underwriting and pricing, operational effectiveness, credit and operational risk monitoring and governance, payment integrity and care management, and data management. The company was founded in 1999 and is headquartered in New York, New York.
How the Company Makes MoneyExlservice generates revenue primarily through its business process management (BPM) services and analytics solutions. The company charges clients on a fee-for-service basis, which can include fixed-price contracts, time-and-materials contracts, and performance-based pricing models. Key revenue streams come from long-term contracts with large enterprises in various sectors, including insurance, healthcare, and financial services. Exl also benefits from strategic partnerships and alliances with technology providers, which enhance its service offerings and expand its market reach. Additionally, the company's focus on digital transformation and automation has positioned it well to capture growth in the evolving business landscape, contributing to its overall earnings.
Exlservice Holdings Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth driven by data and AI initiatives and expansion across segments, particularly in health care and life sciences and international markets. However, the insurance segment's growth lagged slightly, and there are indications of lower EPS performance in the second half due to ongoing investments. Despite these challenges, the company's increased full-year guidance reflects confidence in sustaining growth.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
EXL reported revenue of $514 million in Q2 2025, an increase of 15% year-over-year. The adjusted EPS grew by 20% to $0.49 per share.
Health Care and Life Sciences Segment Growth
The health care and life sciences segment reported revenue of $129.5 million, representing growth of 22% year-over-year, driven by higher volumes in payment services and expansion in existing client relationships.
Data and AI-Led Revenue Surge
Data and AI-led revenue increased 17% year-over-year, growing to 54% of total revenue.
International Growth Markets Expansion
The international growth markets segment generated revenue of $91.7 million, up 15% year-over-year.
Raising Full-Year Revenue and EPS Guidance
EXL raised its full-year revenue and EPS guidance, anticipating 2025 revenue to be in the range of $2.05 billion to $2.07 billion, representing year-over-year growth of 12% to 13%.
Negative Updates
Insurance Segment Growth Lagging
The insurance segment grew 8.6% year-over-year, which is slower compared to other segments, but still stable.
Adjusted Operating Margin Decline
Adjusted operating margin for the quarter was 19.6%, down 20 basis points year-over-year due to investments in new solutions.
EPS Guidance Suggests Lower Performance in H2 2025
The EPS guidance for the full year suggests lower performance in the second half due to increased investments in data and AI solutions.
Company Guidance
In the second quarter of 2025, ExlService Holdings, Inc. reported revenue of $514.5 million, representing a 14.7% increase year-over-year on a reported basis and 14.6% on a constant currency basis. The company achieved an adjusted EPS of $0.49, marking a 20.3% year-over-year growth. The insurance segment contributed $172.2 million, reflecting an 8.6% increase. The Health Care and Life Sciences segment saw a 22% rise, reaching $129.5 million in revenue. The banking, capital markets, and diversified industries segment reported $121.1 million, a 15.8% growth. International growth markets revenue was $91.7 million, up 15% year-over-year. The company aims to achieve a 12% to 13% year-over-year growth in 2025, with revenue projected between $2.05 billion to $2.07 billion and an adjusted EPS of $1.86 to $1.90. Over 54% of total revenue was derived from data and AI-led solutions, which grew 17% year-over-year. The company also reported a strong cash position with $356 million in cash and short-term investments as of June 30, and announced a $125 million accelerated share repurchase program.Exlservice Holdings Financial Statement Overview
Summary
Exlservice Holdings exhibits a robust financial position with strong revenue and profit growth. The company has low leverage and efficient cash flow management, positioning it well for future growth. Continued monitoring of liabilities and maintaining strong margins will be crucial to sustain its financial health.Income Statement
Exlservice Holdings has shown strong revenue growth, with a consistent increase over the years, reaching $1.97 billion in TTM. Gross Profit Margin stands at 38.0%, and Net Profit Margin is robust at 12.0% for TTM, indicating solid profitability. EBIT and EBITDA Margins are also healthy at 15.3% and 19.3% respectively. The revenue growth rate from 2024 to TTM is 7.1%, reflecting strong market demand and business expansion.85
Very Positive
Balance Sheet
The company maintains a solid balance sheet with a Debt-to-Equity Ratio of 0.08 in TTM, indicating low leverage. Return on Equity (ROE) is strong at 22.3%, reflecting efficient management of shareholder funds. The Equity Ratio stands at 62.1%, suggesting a stable financial structure. However, the increase in total liabilities requires monitoring for future leverage risks.78
Positive
Cash Flow
Exlservice Holdings demonstrates strong cash flow management. The Free Cash Flow has grown by 25.0% from 2024 to TTM. The Operating Cash Flow to Net Income Ratio is 1.39, indicating effective cash generation from operations. The Free Cash Flow to Net Income Ratio is 1.18, showing strong capability to cover net income with free cash flow.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.97B | 1.84B | 1.63B | 1.41B | 1.12B | 958.43M |
| Gross Profit | 749.17M | 691.01M | 607.77M | 515.45M | 431.36M | 334.50M |
| EBITDA | 390.52M | 297.20M | 305.72M | 262.32M | 208.15M | 180.03M |
| Net Income | 236.32M | 198.30M | 184.56M | 142.97M | 114.76M | 89.48M |
Balance Sheet | ||||||
| Total Assets | 1.71B | 1.62B | 1.44B | 1.35B | 1.28B | 1.25B |
| Cash, Cash Equivalents and Short-Term Investments | 353.29M | 340.58M | 290.83M | 297.70M | 313.88M | 402.82M |
| Total Debt | 85.66M | 364.83M | 271.76M | 313.13M | 347.01M | 330.73M |
| Total Liabilities | 647.55M | 688.54M | 552.53M | 587.94M | 589.75M | 528.68M |
| Stockholders Equity | 1.06B | 929.86M | 889.44M | 758.18M | 693.16M | 719.17M |
Cash Flow | ||||||
| Free Cash Flow | 277.81M | 222.26M | 158.40M | 121.31M | 147.14M | 160.75M |
| Operating Cash Flow | 328.11M | 268.52M | 211.20M | 166.14M | 184.39M | 202.97M |
| Investing Cash Flow | -112.14M | -119.10M | -12.00M | -96.55M | -114.27M | -18.32M |
| Financing Cash Flow | -176.35M | -119.10M | -181.45M | -81.72M | -146.88M | -89.56M |
Exlservice Holdings Technical Analysis
Positive
43.75
Price Trends
43.13
Positive
44.34
Negative
45.64
Negative
Market Momentum
>-0.01
Negative
52.81
Neutral
77.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXLS, the sentiment is Positive. The current price of 43.75 is above the 20-day moving average (MA) of 43.48, above the 50-day MA of 43.13, and below the 200-day MA of 45.64, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 52.81 is Neutral, neither overbought nor oversold. The STOCH value of 77.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EXLS.
Exlservice Holdings Risk Analysis
Exlservice Holdings disclosed 32 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | 3.27B | 20.31 | 20.43% | ― | 1.94% | 26.15% | |
76 Outperform | 7.36B | 13.87 | 20.81% | 1.57% | 7.37% | -14.64% | |
73 Outperform | $7.07B | 30.28 | 24.70% | ― | 15.15% | 34.33% | |
70 Outperform | 10.68B | 21.73 | 12.84% | ― | 12.64% | 19.79% | |
69 Neutral | 3.00B | 11.62 | 5.72% | 2.79% | 3.40% | 53.14% | |
68 Neutral | 8.46B | 21.65 | 10.94% | ― | 9.73% | -0.29% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
EXLS
Exlservice Holdings
43.75
5.60
14.68%
CACI
Caci International
485.59
-18.97
-3.76%
EPAM
Epam Systems
151.84
-47.19
-23.71%
G
Genpact
42.21
3.57
9.24%
WNS
WNS
76.17
23.46
44.51%
CNXC
Concentrix
47.66
-2.30
-4.60%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.