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1. Company Snapshot

1.a. Company Description

ExlService 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.

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1.b. Last Insights on EXLS

ExlService Holdings' recent performance faced challenges due to decelerating revenue growth. Despite beating Q3 earnings and revenue estimates with $0.48 per share, concerns arise from a relatively modest guidance. Moreover, while Ethic Inc. increased its stake by 17%, there's no clear indication this significantly impacted short-term performance. On a positive note, collaborations like the one with Whitbread to transform finance operations and drive business value showcase growth potential. Additionally, the appointment of Patrick Geraghty to the Board of Directors brings valuable healthcare industry expertise.

1.c. Company Highlights

2. EXLService Holdings' Q3 2025 Earnings: A Strong Beat

EXLService Holdings reported its third-quarter 2025 financial results, with revenue of $529.6 million, up 12.2% year-over-year, and adjusted EPS of $0.48, up 10.8%. The actual EPS beat analyst estimates of $0.4653. The company's data and AI-led revenue grew 18% year-over-year, reaching 56% of total revenue. The adjusted operating margin was 19.4%, down 50 basis points year-over-year. The company raised its revenue and adjusted EPS guidance for 2025, now expecting revenue of $2.07 billion to $2.08 billion, representing year-over-year growth of 13%, and adjusted EPS of $1.88 to $1.92, representing year-over-year growth of 14% to 16%.

Publication Date: Nov -02

📋 Highlights
  • Revenue & EPS Growth:: Q3 revenue rose 12.2% YoY to $529.6M; adjusted EPS increased 10.8% to $0.48.
  • Data/AI Revenue Expansion:: AI-led revenue grew 18% YoY, accounting for 56% of total revenue.
  • Segment Outperformance:: Healthcare segment surged 21.6% YoY, highest growth among all business units.
  • Guidance Upgrade:: 2025 revenue now projected at $2.07–2.08B (13% YoY growth); adjusted EPS at $1.88–1.92 (14–16% growth).
  • AI Productivity Impact:: AI-enabled operations achieved 35% transaction automation and 30% productivity gains without revenue loss.

Segment Performance

The company's segments, including Insurance, Healthcare and Life Sciences, and Banking, Capital Markets and Diversified Industries, grew 8.5%, 21.6%, and 11.8% year-over-year, respectively. The International Growth Markets segment grew 8.4% year-over-year. The growth across segments indicates a diversified revenue stream, with Healthcare and Life Sciences being a significant contributor. As Rohit Kapoor mentioned, the healthcare market is enormous, data-rich, and adopting AI, providing a huge opportunity for growth.

Operational Efficiency and Margin

SG&A expenses increased by 120 basis points year-over-year to 21.3%, driven by investments in front-end sales and marketing. The adjusted operating margin was 19.4%, down 50 basis points year-over-year. Maurizio Nicolelli mentioned that the company expects 10-20 basis points of margin improvement per year, indicating a focus on operational efficiency.

Valuation and Growth Prospects

With a P/E Ratio of 26.96 and an expected revenue growth of 11.3% next year, the company's valuation appears to be reasonable. The ROE of 24.17% and ROIC of 16.01% indicate strong profitability. The company's focus on data and AI-led operations, as well as its investments in talent, solutions, and partnerships, are expected to drive growth. EXL's growth strategy involves two main motions: a stand-alone data management capability, EXLdata.ai, and an integrated AI embedding service, which are resonating with clients.

Conclusion on Growth and Valuation

The company's strong revenue growth, diversified revenue stream, and focus on operational efficiency position it for long-term growth. With a reasonable valuation and strong profitability metrics, EXLService Holdings appears to be an attractive investment opportunity. Analysts estimate next year's revenue growth at 11.3%, and the company's guidance for 2025 indicates continued growth momentum.

3. NewsRoom

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LDOS or EXLS: Which Is the Better Value Stock Right Now?

Dec -02

Source: zacks.com

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ExlService Holdings, Inc. (NASDAQ:EXLS) Given Average Recommendation of “Moderate Buy” by Analysts

Nov -27

Source: defenseworld.net

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Innodata vs. EXL: Which Data Services Stock Is a Buy Now?

Nov -26

Source: zacks.com

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Data and AI Leader EXL to host ‘IdeaTank' innovation event at the Nasdaq MarketSite

Nov -25

Source: globenewswire.com

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12,717 Shares in ExlService Holdings, Inc. $EXLS Acquired by AXQ Capital LP

Nov -23

Source: defenseworld.net

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Avantax Advisory Services Inc. Boosts Stock Position in ExlService Holdings, Inc. $EXLS

Nov -22

Source: defenseworld.net

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EXL named a Leader in Everest Group's 2025 Clinical and Care Management Operations PEAK Matrix® Assessment

Nov -20

Source: globenewswire.com

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ExlService Holdings, Inc. (EXLS) Presents at J.P. Morgan 2025 Ultimate Services Investor Conference Transcript

Nov -19

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.32%)

6. Segments

Analytics

Expected Growth: 12%

ExlService Holdings, Inc.'s 12% growth is driven by increasing demand for digital transformation, outsourcing, and automation in the BFSI sector. The company's expertise in analytics, AI, and cloud-based solutions has enabled it to capitalize on this trend, resulting in strong revenue growth.

Insurance

Expected Growth: 10%

ExlService Holdings, Inc.'s 10% growth in insurance is driven by increasing demand for digital transformation, expansion into new geographies, and strategic acquisitions. Additionally, the company's focus on operational efficiency, cost savings, and investments in advanced analytics and AI capabilities are contributing to its growth momentum.

Emerging Business

Expected Growth: 13%

ExlService Holdings' Emerging Business segment growth of 13% is driven by increasing demand for digital transformation services, expansion into new geographies, and strategic acquisitions. Additionally, the company's investments in analytics, artificial intelligence, and automation have enhanced its service offerings, attracting new clients and increasing wallet share from existing ones.

Healthcare

Expected Growth: 9%

ExlService Holdings, Inc.'s 9% growth in Healthcare is driven by increasing demand for digital transformation, outsourcing of non-core functions, and focus on value-based care. The company's expertise in analytics, operational excellence, and digital solutions resonates with healthcare providers seeking to improve patient outcomes, reduce costs, and enhance operational efficiency.

7. Detailed Products

Operations and Analytics

ExlService Holdings, Inc. provides operations management and analytics services to help clients improve their business processes and make data-driven decisions.

Digital Transformation

ExlService Holdings, Inc. offers digital transformation services to help clients leverage technology and innovation to drive business growth and improve customer experience.

Consulting

ExlService Holdings, Inc. provides consulting services to help clients improve their business operations, reduce costs, and enhance customer experience.

Data Analytics

ExlService Holdings, Inc. offers data analytics services to help clients gain insights from their data and make informed business decisions.

Risk and Compliance

ExlService Holdings, Inc. provides risk and compliance services to help clients manage risk, ensure regulatory compliance, and protect their reputation.

8. ExlService Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for ExlService Holdings, Inc. is medium due to the presence of alternative BPO service providers in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of clients in the financial services industry, which gives them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of skilled labor in the BPO industry and the company's ability to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the BPO industry, including the need for significant capital investment and specialized expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the BPO industry, leading to a competitive market environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.32%
Debt Cost 6.59%
Equity Weight 80.68%
Equity Cost 8.94%
WACC 8.49%
Leverage 23.94%

11. Quality Control: ExlService Holdings, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Leidos

A-Score: 5.7/10

Value: 4.3

Growth: 6.7

Quality: 5.9

Yield: 2.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

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ExlService

A-Score: 5.4/10

Value: 2.4

Growth: 7.9

Quality: 7.3

Yield: 0.0

Momentum: 6.5

Volatility: 8.0

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Dolby Laboratories

A-Score: 5.3/10

Value: 3.4

Growth: 4.2

Quality: 8.5

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

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Concentrix

A-Score: 5.0/10

Value: 8.7

Growth: 6.0

Quality: 4.0

Yield: 4.0

Momentum: 4.5

Volatility: 3.0

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Jack Henry

A-Score: 5.0/10

Value: 2.7

Growth: 5.7

Quality: 7.4

Yield: 3.0

Momentum: 1.5

Volatility: 10.0

1-Year Total Return ->

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N-able

A-Score: 3.7/10

Value: 3.0

Growth: 8.4

Quality: 5.0

Yield: 0.0

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.92$

Current Price

40.92$

Potential

-0.00%

Expected Cash-Flows