ExlService Holdings, Inc. (NASDAQ: EXLS), a leading operations
management and analytics company, today announced an update to its
2020 guidance issued on August 6, 2020 and preliminary guidance
regarding the third quarter of 2020.
EXL expects full year revenue to be in the range
of $945 million to $955 million and adjusted diluted EPS (non-GAAP)
to be in the range of $3.35 to $3.45. Our previously issued 2020
guidance included revenue of $922 million to $938 million and
adjusted diluted EPS of $2.60 to $2.80. In addition, for the
third quarter of 2020, we expect revenue to be at least $239
million and adjusted diluted EPS to be at least $1.00. See below
for information regarding the use of our non-GAAP financial
measures.
Rohit Kapoor, Vice Chairman and Chief Executive
Officer, said, “While there continues to be considerable
uncertainty in the market as a result of the COVID-19 pandemic,
EXL’s business over the past few months has rebounded better than
initially expected. As a result, we have greater confidence in
expected performance for the remainder of the year. The
demand for our services in Analytics has grown very well as our
clients’ need for data analytics has accelerated. We are also
seeing faster decision making in operations management, including
new logos and expansions with current clients.”
Maurizio Nicolelli, Chief Financial Officer,
noted that, “Initiatives undertaken to align our cost structure to
the changing business environment and some one-time benefits have
helped margin growth for 2020. Based on the improving
strength of the business, at this time we also believe it is
prudent to accelerate our stock repurchase program. In
December 2019, we had announced a stock repurchase program of up to
$200 million beginning January 1, 2020 through December 31,
2022. As part of that $200 million program, we are now
targeting to repurchase up to $80 million for calendar year 2020,
subject to market conditions, versus our original intention of
repurchasing $40 million. EXL had approximately $335.6
million of cash and short-term investments as of its last interim
balance sheet date of June 30, 2020 and we do not believe the
increased repurchase activity precludes us from investing in our
business or pursuing strategic acquisitions or other
initiatives.”
About ExlService Holdings,
Inc.EXL (NASDAQ: EXLS) is a leading operations management
and analytics company that helps our clients build and grow
sustainable businesses. By orchestrating our domain expertise,
data, analytics and digital technology, we look deeper to design
and manage agile, customer-centric operating models to improve
global operations, drive profitability, enhance customer
satisfaction, increase data-driven insights, and manage risk and
compliance. Headquartered in New York, EXL has more than 31,600
professionals in locations throughout the United States, the UK,
Europe, India, the Philippines, Colombia, Australia and South
Africa. EXL serves multiple industries including insurance,
healthcare, banking and financial services, utilities, travel,
transportation and logistics, media and retail, among others. For
more information, visit www.exlservice.com.
Continuing Note 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 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, which
include our ability to successfully close and integrate strategic
acquisitions, our ability to respond to and manage public health
crises, including the outbreak and continued effects of the
coronavirus pandemic, are discussed in more detail in EXL’s filings
with the Securities and Exchange Commission, including EXL’s Annual
Report on Form 10-K and EXL’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2020. These risks could cause actual results
to differ materially from those implied by forward-looking
statements in this release. You should keep in mind that any
forward-looking statement made herein, or elsewhere, speaks only as
of the date on which it is made. New risks and uncertainties come
up from time to time, and it is impossible to predict these events
or how they may affect EXL. EXL has no obligation to update any
forward-looking statements after the date hereof, except as
required by federal securities laws.
Reconciliation of Adjusted Financial
Measures to GAAP Measures
In addition to financial measures in accordance
with U.S. generally accepted accounting principles (GAAP), EXL has
included in this release certain financial measures that are
considered non-GAAP financial measures, including the following:
adjusted diluted earnings per share.
These non-GAAP financial measures are not based
on any comprehensive set of accounting rules or principles, should
not be considered a substitute for, or superior to, financial
measures calculated in accordance with GAAP, and may be different
from non-GAAP financial measures used by other companies.
Accordingly, the financial results calculated in accordance with
GAAP and reconciliations from those financial statements should be
carefully evaluated. EXL believes that providing these non-GAAP
financial measures may help investors better understand EXL’s
underlying financial performance. Management also believes that
these non-GAAP financial measures, when read in conjunction with
EXL’s reported results, can provide useful supplemental information
for investors analyzing period-to-period comparisons of the
Company’s results and comparisons of the Company’s results with the
results of other companies. Additionally, management considers some
of these non-GAAP financial measures to determine variable
compensation of its employees. The Company believes that it is
unreasonably difficult to provide its earnings per share financial
guidance in accordance with GAAP, or a quantitative reconciliation
thereof, for a number of reasons, including, without limitation,
the Company’s inability to predict its future stock-based
compensation expense under ASC Topic 718, the amortization of
intangibles associated with further acquisitions and the currency
fluctuations and associated tax impacts. As such, the Company
presents guidance with respect to adjusted diluted earnings per
share. The Company also incurs significant non-cash charges for
depreciation that may not be indicative of the Company’s ability to
generate cash flow.
EXL non-GAAP financial measures exclude, where
applicable, stock-based compensation expense, amortization of
acquisition-related intangible assets, impairment charges of
acquired long-lived and intangible assets including goodwill,
provision for litigation settlement, non-cash interest expense on
convertible senior notes, restructuring charges and other
acquisition-related expenses or benefits. Acquisition-related
expenses or benefits include, changes in the fair value of earn-out
consideration liabilities, external deal costs, integration
expenses, direct and incremental travel costs and non-recurring
benefits. In addition to excluding the above items, our adjusted
net income and adjusted diluted EPS also excludes the effect of
incremental income tax expense related to the U.S. Tax Cuts and
Jobs Act of 2017 (the “Tax Reform Act”), non-recurring other tax
adjustments and income tax impact of the above pre-tax items, as
applicable. The income tax impact of each item is calculated by
applying the statutory rate and local tax regulations in the
jurisdiction in which the item was incurred.
A limitation of using non-GAAP financial
measures versus financial measures calculated in accordance with
GAAP is that non-GAAP financial measures do not reflect all of the
amounts associated with our operating results as determined in
accordance with GAAP and exclude costs that are recurring, namely
stock-based compensation and amortization of acquisition-related
intangible assets. EXL compensates for these limitations by
providing specific information regarding the GAAP amounts excluded
from non-GAAP financial measures to allow investors to evaluate
such non-GAAP financial measures.
Contact: Steven N. BarlowVice President, Investor Relations(917)
596-7684ir@exlservice.com
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