Release Details
EXL Reports 2015 Second Quarter Results
2015 Second Quarter Revenues of
Diluted EPS (GAAP) of
Adjusted Diluted EPS (Non-GAAP) of
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."
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
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 endedJune 30, 2014 and$143.5 million for the quarter endedMarch 31, 2015 . Revenues for the quarter endedJune 30, 2014 were reduced by$5.7 million due to the reimbursement of disentanglement costs. Operations Management revenues for the quarter endedJune 30, 2015 were$112.6 million compared to$94.3 million for the quarter endedJune 30, 2014 and$110.7 million for the quarter endedMarch 31, 2015 . Analytics & Business Transformation revenues for the quarter endedJune 30, 2015 were$43.0 million compared to$25.4 million for the quarter endedJune 30, 2014 and$32.8 million for the quarter endedMarch 31, 2015 . - Gross margin for the quarter ended
June 30, 2015 was 35.4% compared to 32.1% for the quarter endedJune 30, 2014 and 35.1% for the quarter endedMarch 31, 2015 . Operations Management gross margin for the quarter endedJune 30, 2015 was 36.5% compared to 33.7% for the quarter endedJune 30, 2014 and 36.3% for the quarter endedMarch 31, 2015 . Analytics & Business Transformation gross margin for the quarter endedJune 30, 2015 was 32.7% compared to 26.2% for the quarter endedJune 30, 2014 and 31.0% for the quarter endedMarch 31, 2015 . - Operating margin for the quarter ended
June 30, 2015 was 9.8% compared to 5.1% for the quarter endedJune 30, 2014 and 9.4% for the quarter endedMarch 31, 2015 . - Net income for the quarter ended
June 30, 2015 was$12.1 million compared to$7.8 million for the quarter endedJune 30, 2014 and$9.6 million for the quarter endedMarch 31, 2015 . - Adjusted operating margin for the quarter ended
June 30, 2015 was 13.9% compared to 12.2% for the quarter endedJune 30, 2014 and 13.8% for the quarter endedMarch 31, 2015 . Adjusted EBITDA for the quarter endedJune 30, 2015 was$26.9 million compared to$20.5 million for the quarter endedJune 30, 2014 and$24.8 million for the quarter endedMarch 31, 2015 . - Diluted earnings per share for the quarter ended
June 30, 2015 was$0.35 compared to$0.23 for the quarter endedJune 30, 2014 and$0.28 for the quarter endedMarch 31, 2015 . Adjusted diluted earnings per share for the quarter endedJune 30, 2015 was$0.48 compared to$0.41 for each of the quarters endedJune 30, 2014 andMarch 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 andCali . - Opened a delivery center in
Cape Town, South Africa to provide English language customer service forUK 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 ofMarch 31, 2015 and 23,071 (including employees under managed services) as ofJune 30, 2014 . - Reported employee attrition for the quarter ended
June 30, 2015 of 34.9%, compared with 33.6% for the quarter endedMarch 31, 2015 and 34.1% for the quarter endedJune 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 .
Conference Call
To listen to the conference call via phone, please dial 1-877-303-6384 or if dialing in internationally, 1-224-357-2191 and an operator will assist you. For those who cannot access the live broadcast, a replay will be available on the EXL website ir.exlservice.com).
(1) Gartner, Magic Quadrant for Finance and Accounting BPO, Cathy Tornbohm,
About EXL
EXL (NASDAQ:EXLS) is a leading business process solutions company that looks deeper to drive business impact through integrated services and industry knowledge. EXL provides operations management, decision analytics and technology platforms to organizations in insurance, healthcare, banking and financial services, utilities, travel, and transportation and logistics, among others. We work as a strategic partner to help our clients streamline business operations, improve corporate finance, manage compliance, create new channels for growth and better adapt to change. Headquartered in
Continuing Statement Regarding Forward-Looking Statements This press release contains forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to the 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 are discussed in more detail in EXL's filings with the
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (In thousands, except share and per share amounts) | ||||
| (Unaudited) | ||||
| Three months ended |
Six months ended |
|||
| 2015 | 2014 | 2015 | 2014 | |
| Revenues, net | $ 155,621 | $ 119,738 | $ 299,131 | $ 241,535 |
| Cost of revenues (exclusive of depreciation and amortization) | 100,478 | 81,259 | 193,603 | 156,181 |
| Gross profit | 55,143 | 38,479 | 105,528 | 85,354 |
| Operating expenses: | ||||
| General and administrative expenses | 19,990 | 16,240 | 38,611 | 31,040 |
| Selling and marketing expenses | 11,844 | 9,463 | 23,087 | 19,695 |
| Depreciation and amortization | 8,061 | 6,679 | 15,114 | 13,035 |
| Total operating expenses | 39,895 | 32,382 | 76,812 | 63,770 |
| Income from operations | 15,248 | 6,097 | 28,716 | 21,584 |
| Other income/(expense) : | ||||
| Foreign exchange income / (loss) | 1,022 | (137) | 2,156 | (970) |
| Interest and other income, net | 1,335 | 858 | 2,513 | 1,817 |
| Income before income taxes | 17,605 | 6,818 | 33,385 | 22,431 |
| Income tax expense / (benefit) | 5,531 | (944) | 11,744 | 3,521 |
| Net income | $ 12,074 | $ 7,762 | $ 21,641 | $ 18,910 |
| Earnings per share: | ||||
| Basic | $ 0.36 | $ 0.24 | $ 0.65 | $ 0.58 |
| Diluted | $ 0.35 | $ 0.23 | $ 0.63 | $ 0.56 |
| Weighted-average number of shares used in computing earnings per share: | ||||
| Basic | 33,417,079 | 32,812,155 | 33,327,169 | 32,668,620 |
| Diluted | 34,207,973 | 33,673,669 | 34,130,472 | 33,551,904 |
| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands, except share and per share amounts) | ||
| 2015 | 2014 | |
| (Unaudited) | ||
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 94,651 | $ 176,499 |
| Short-term investments | 77,880 | 11,577 |
| Restricted cash | 2,466 | 1,395 |
| Accounts receivable, net | 94,216 | 80,244 |
| Prepaid expenses | 7,738 | 5,783 |
| Deferred tax assets, net | 4,649 | 4,455 |
| Advance income tax, net | 6,321 | 9,905 |
| Other current assets | 13,687 | 12,533 |
| Total current assets | 301,608 | 302,391 |
| Fixed assets, net | 48,152 | 45,369 |
| Restricted cash | 3,342 | 3,258 |
| Deferred tax assets, net | 8,039 | 11,985 |
| Intangible assets, net | 58,960 | 46,979 |
| Goodwill | 170,129 | 139,599 |
| Other assets | 23,488 | 23,975 |
| Total assets | $ 613,718 | $ 573,556 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 5,832 | $ 4,663 |
| Short-term borrowings | 10,000 | -- |
| Deferred revenue | 11,994 | 7,690 |
| Accrued employee cost | 28,834 | 37,606 |
| Accrued expenses and other current liabilities | 37,571 | 40,206 |
| Current portion of capital lease obligations | 661 | 803 |
| Total current liabilities | 94,892 | 90,968 |
| Long term borrowings | 60,000 | 50,000 |
| Capital lease obligations, less current portion | 323 | 560 |
| Non-current liabilities | 14,041 | 12,870 |
| Total liabilities | 169,256 | 154,398 |
| Commitments and contingencies | ||
| Preferred stock, |
-- | -- |
| Stockholders' equity: | ||
| Common stock, |
35 | 34 |
| Additional paid-in-capital | 243,348 | 233,173 |
| Retained earnings | 291,065 | 269,424 |
| Accumulated other comprehensive loss | (56,917) | (55,509) |
| Total stockholders' equity including shares held in treasury | 477,531 | 447,122 |
| Less: 1,445,327 shares as of |
(33,069) | (27,964) |
| Total stockholders' equity | 444,462 | 419,158 |
| Total liabilities and stockholders' equity | $ 613,718 | $ 573,556 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
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 adjusted financial measures (adjusted EBITDA, adjusted net income and adjusted diluted earnings per share) that the
Additionally, EXL provides certain information on a constant currency basis, which reflects a comparison of current period results translated at the prior period currency rates. This information is provided because EXL believes that it provides useful incremental information to investors regarding EXL's operating performance.
The following table shows the reconciliation of these adjusted financial measures from GAAP measures for the three months ended
| Reconciliation of Adjusted Operating Income and Adjusted EBITDA | |||
| (Amounts in thousands) | |||
| Three Months Ended |
Three Months Ended |
||
| 2015 | 2014 | 2015 | |
| Revenues (GAAP) | $ 155,621 | $ 119,738 | $ 143,510 |
| add: Reimbursement of transition and disentanglement costs (a) | -- | 5,718 | -- |
| Revenues (Non-GAAP) | $ 155,621 | $ 125,456 | $ 143,510 |
| subtract: Cost of revenues (GAAP) | (100,478) | (81,259) | (93,125) |
| subtract: Operating expenses (GAAP) | (39,895) | (32,382) | (36,917) |
| Income from operations (Non- GAAP) | $ 15,248 | $ 11,815 | $ 13,468 |
| add: Stock-based compensation expense (b) | 3,553 | 1,967 | 4,255 |
| add: Amortization of acquisition-related intangibles (c) | 2,808 | 1,489 | 2,059 |
| Adjusted operating income (Non-GAAP) | $ 21,609 | $ 15,271 | $ 19,782 |
| Adjusted operating income margin as a % of Revenues (Non-GAAP) | 13.9% | 12.2% | 13.8% |
| add: Depreciation | 5,253 | 5,190 | 4,994 |
| Adjusted EBITDA (Non-GAAP) | $ 26,862 | $ 20,461 | $ 24,776 |
| Adjusted EBITDA margin as a % of Revenues (Non-GAAP) | 17.3% | 16.3% | 17.3% |
| (a) To exclude reimbursement of transition and disentanglement costs for a disclosed client issue. | |||
| (b) To exclude stock-based compensation expense under ASC Topic 718. | |||
| (c) To exclude amortization of acquisition-related intangibles. | |||
| Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share | |||
| (Amounts in thousands, except per share data) | |||
| Three Months Ended |
Three Months Ended |
||
| 2015 | 2014 | 2015 | |
| Net income (GAAP) | $ 12,074 | $ 7,762 | $ 9,567 |
| add: Stock-based compensation expense (a) | 3,553 | 1,967 | 4,255 |
| add: Amortization of acquisition-related intangibles (b) | 2,808 | 1,489 | 2,059 |
| add: reimbursement of transition and disentanglement costs (c) | -- | 5,718 | -- |
| subtract: Tax impact on stock-based compensation expense | (1,320) | (751) | (1,626) |
| subtract: Tax impact on amortization of acquisition-related intangibles | (716) | (170) | (433) |
| subtract: Tax impact on reimbursement of transition and disentanglement costs | -- | (2,173) | -- |
| Adjusted net income (Non-GAAP) | $ 16,399 | $ 13,842 | $ 13,822 |
| Adjusted diluted earnings per share (Non-GAAP) | $ 0.48 | $ 0.41 | $ 0.41 |
| (a) To exclude stock-based compensation expense under ASC Topic 718. | |||
| (b) To exclude amortization of acquisition-related intangibles. | |||
| (c) To exclude reimbursement of transition and disentanglement costs for a disclosed client issue. | |||
CONTACT:Source:Steven N. Barlow Vice President, Investor RelationsExlService Holdings, Inc. 280 Park Avenue New York, NY 10017 (212) 624-5913 ir@exlservice.com
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