On August 1, 2024, ExlService Holdings Inc (EXLS, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. ExlService Holdings Inc. is a business process management company that provides digital operations and analytical services to clients driving enterprise-scale business transformation initiatives that leverage the company's deep expertise in analytics, AI, ML, and cloud. The company offers business process outsourcing and automation services, and data-driven insights to customers across multiple industries. The company operates through four segments: Insurance, Healthcare, Emerging, and Analytics. The vast majority of the company's revenue is earned in the United States, with more than half coming from the Analytics segment.
Performance Overview
ExlService Holdings Inc (EXLS, Financial) reported revenue of $448.4 million for Q2 2024, a 10.7% increase from $405.0 million in Q2 2023, surpassing the analyst estimate of $444.67 million. However, the company reported a GAAP diluted EPS of $0.28, which fell short of the analyst estimate of $0.29 and represented a 3.4% decrease from $0.29 in Q2 2023. The adjusted diluted EPS (Non-GAAP) was $0.40, up 11.1% from $0.36 in Q2 2023.
Financial Achievements and Challenges
Despite the revenue growth, ExlService Holdings Inc (EXLS, Financial) faced challenges with its operating income margin, which decreased to 13.7% in Q2 2024 from 16.0% in Q2 2023. The adjusted operating income margin also saw a slight decline to 19.8% from 20.0% in the same period. These margins are critical as they reflect the company's efficiency in managing its operational costs relative to its revenue.
Segment Performance
| Segment | Q2 2024 Revenue ($ million) | Q2 2023 Revenue ($ million) | Q1 2024 Revenue ($ million) | Q2 2024 Gross Margin (%) | Q2 2023 Gross Margin (%) | Q1 2024 Gross Margin (%) |
|---|---|---|---|---|---|---|
| Insurance | 149.3 | 128.5 | 145.1 | 36.0 | 34.4 | 36.4 |
| Healthcare | 28.1 | 27.2 | 26.3 | 33.1 | 35.4 | 34.0 |
| Emerging Business | 77.2 | 67.1 | 74.4 | 41.6 | 43.7 | 44.9 |
| Analytics | 193.8 | 182.2 | 190.7 | 36.7 | 37.7 | 35.6 |
| Total | 448.4 | 405.0 | 436.5 | 37.1 | 37.5 | 37.4 |
Income Statement Highlights
For the quarter ended June 30, 2024, ExlService Holdings Inc (EXLS, Financial) reported a gross profit of $166.3 million, up from $151.8 million in Q2 2023. Operating expenses increased to $104.8 million from $87.0 million in the same period, leading to an operating income of $61.4 million, down from $64.8 million in Q2 2023. The net income attributable to ExlService Holdings Inc stockholders was $45.8 million, compared to $49.1 million in Q2 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, ExlService Holdings Inc (EXLS, Financial) had total assets of $1.50 billion, up from $1.44 billion as of December 31, 2023. The company's cash and cash equivalents stood at $115.3 million, down from $137.0 million at the end of 2023. Total liabilities increased to $651.2 million from $552.5 million, primarily due to an increase in long-term borrowings.
Business Highlights and Future Outlook
During Q2 2024, ExlService Holdings Inc (EXLS, Financial) won 23 new clients and established a strategic collaboration with NVIDIA to create domain-trained, enterprise-wide data and AI applications. The company also announced the acquisition of ITI Data, expected to add $7 million to $9 million in revenue for the remainder of 2024.
"We are pleased with our second quarter results. We delivered both revenue and adjusted diluted EPS growth of 11%. The ongoing execution of our data and AI-led strategy enabled us to accelerate our growth rates across both our data analytics and digital operations and solutions businesses during the quarter as we continue our momentum heading into the second half of 2024." - Rohit Kapoor, Chairman and CEO
Looking ahead, ExlService Holdings Inc (EXLS, Financial) has raised its full-year guidance for revenue to be in the range of $1.805 billion to $1.
Explore the complete 8-K earnings release (here) from ExlService Holdings Inc for further details.
