Exlservice (EXLS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $448.4 million, up 10.7% year-over-year, with adjusted EPS rising 10.8% to $0.40 and GAAP EPS at $0.28; growth was driven by analytics and digital operations, with data and AI-led revenue now over half of total revenue.

• Net income for Q2 2024 was $45.8 million, down from $49.1 million in Q2 2023, mainly due to higher SG&A and interest expenses.

• Strategic partnership with NVIDIA and acquisition of ITI Data to enhance AI and data management capabilities and expand the client base.

• 23 new clients were added in Q2, including 10 in digital operations and 13 in analytics.

Financial highlights

• Digital operations and solutions revenue: $254.6 million, up 14.3% year-over-year; analytics segment: $193.8 million, up 6.4% year-over-year.

• Insurance segment revenue: $149.3 million, up 16.2% year-over-year; emerging segment: $77.2 million, up 14.9% year-over-year; healthcare segment: $28.1 million, up 3.5% year-over-year.

• Adjusted operating margin for Q2: 19.8%, down 20 bps year-over-year; adjusted EBITDA: $98.6 million, margin 22.0%.

• Net income (GAAP) for Q2: $45.8 million; cash flow from operations: $75 million, up from $48 million in Q2 2023.

• Gross margin for Q2: 37.1%, down from 37.5% in Q2 2023.

Outlook and guidance

• 2024 revenue guidance raised to $1.805–$1.83 billion, representing 11–12% year-over-year growth.

• Adjusted EPS guidance for 2024 increased to $1.59–$1.62, up 11–13% year-over-year.

• ITI Data expected to contribute $7–$9 million in revenue for 2024 and be neutral to adjusted EPS; capital expenditures expected at $50–$55 million.

• Existing liquidity and cash flow from operations are expected to be sufficient for the next 12 months.