Exlservice (EXLS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $472.1 million, up 14.9% year-over-year and 5.3% sequentially, with double-digit growth in analytics and digital operations.

• Adjusted EPS for Q3 was $0.44, up 16.3% year-over-year; GAAP diluted EPS was $0.33, up 24.2% year-over-year.

• Net income for Q3 was $53.0 million, up 20.9% year-over-year.

• Growth was driven by expansion across all segments, especially Insurance and Analytics, and the ITI Data acquisition.

• Full-year revenue and EPS guidance raised, reflecting strong year-to-date performance and continued investment in AI, data, and talent.

Financial highlights

• Q3 2024 revenue: $472.1 million (+14.9% YoY); adjusted EPS: $0.44 (+16.3% YoY); net income: $53.0 million (+20.9% YoY).

• Gross margin for Q3: 37.8%, up from 37.7% in Q3 2023; operating margin: 14.7% (flat YoY); adjusted operating margin: 19.9% (down 10 bps YoY).

• Adjusted EBITDA for Q3 was $104.4 million, with a margin of 22.1%.

• Cash flow from operations in Q3 was $110.1 million, up 60% year-over-year; cash and cash equivalents at $150.1 million as of September 30, 2024.

• SG&A expenses increased 14.3% in Q3, mainly due to higher headcount, wage inflation, and investments in digital and AI capabilities.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $1.825–$1.835 billion, representing 12–13% year-over-year growth.

• Adjusted EPS guidance increased to $1.61–$1.63, up 13–14% year-over-year.

• Capital expenditures expected to be $48–$52 million for the year, focused on growth and technology.

• Liquidity is expected to be sufficient for the next 12 months, with future cash needs dependent on growth, acquisitions, and stock repurchases.

• Continued investments in data, AI, and technology infrastructure anticipated in Q4 and beyond.