Exlservice Holdings Inc at Cowen Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Maurizio, let's start off just kind of an overall demand level set. So can you talk about how you see the demand environment now and what are some of the primary themes driving engagements for EXL in your client discussions?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. So you mentioned larger deals, faster deals. That's always encouraging us. That's a nice bullish demand signal for you. How have you seen the actual pipeline evolve? Any sense of scale now versus pre-pandemic or right afterwards?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Okay. And obviously, a pipeline would inform medium-term outlook and growth potential for the business. You did raise that. Can you kind of flesh out what you see there across both segments or business practices?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Yeah, that's a strong start to the year for a 1Q -- usually build after that -- to an extent. Okay. So it doesn't sound like there is any identification of any pullback or concern or anything like that among clients. But what do you see? Is there anything -- obviously, there's big macro concerns out there. Are you seeing anything in conversations, anything in sentiments that's different?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Just about -- as it relates to larger deal closure, are you seeing that with new clients into the organization as well?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : And are those first-time outsourcers for that functions or the areas you might be supporting them on?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Okay. Let's stick with analytics. So can you dig into that business more? Really one of the composition of the work that you do in that business, give the audience a sense for that.

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. As we think about stronger medium-term numbers for your outlook for analytics, if we try and kind of segment or decompose the growth, how would you attribute it to existing clients versus new clients or I guess -- and volume versus pricing? How do those dynamics work within the growth that you see coming?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. No pushbacks there? You're having constructive conversations within that that require --?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. How far through the client base are you with that update?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : It will carry into the next year.

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. And then just as it relates to kind of penetration of your digital ops clients by your analytics practice, where does that stand? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 6:45PM, EXLS.OQ - Exlservice Holdings Inc at Cowen Technology, Media & Telecom Conference

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Let's pivot to digital ops, and so talk about some of the industries or the service offerings that you're most excited about here over the medium term?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. So now we talked about pricing on the analytics side of the business. Let's talk about it on the digital ops side. So obviously, there's wage inflation across the industry, but you have an inherent value proposition within digital ops for your clients. So how do those conversations going? How do you -- can you pass through all the inflation through price? Do you just have to do things better on your end? How does -- how do you drive that?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Kind of bringing this down into margin now, so margin execution over the last two years, you've demonstrated, notably, more consistent execution there within profitability and really outperformance on all expectations on that front. What do you attribute to that strength and is there any changes in strategy? Any key operational initiatives? What's helped you there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 02, 2022 / 6:45PM, EXLS.OQ - Exlservice Holdings Inc at Cowen Technology, Media & Telecom Conference

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Is that -- as we think about just income statement, is that gross margin and SG&A or is it one more than the other? Anything about that, where that resonates?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : What's -- remind us again, what's the mix of your total headcount across digital outsource with analytics, roughly?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Let's keep talking about talent. So attrition -- there's been a recent rise in attrition in the industry. Give us a sense on what you're doing to manage that going forward and kind of what you've built into this year's outlook as it relates to -- on attrition target.

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Let's dig in a little bit to -- into the Philippines here. So what's -- they obviously have mandated return to office. It's caused a lot of churn for the BPM industry. How are you dealing with that?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Let's try capital allocation. So, just give us your framework there -- priorities, the order there, what -- and then M&A is something. You mentioned Clairvoyant earlier. Where does that fit in the pie?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. [And just on repurchase], is there an intent to do more than offset dilution or just kind of maintain?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : So M&A dependent, I guess that's the way to read that. Now what's the ideal profile of that next M&A target?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. You see the industry -- is there any need to consolidate the industry at a larger scale? Are you just shy with larger deals -- transformational larger deals?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Just stick -- on free cash flow, is there a target that you have out there as we think about either conversion or free cash flow margin? How should we think about that?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. I'm going to pause here and see if the audience -- if there are any questions. And I will [stop] with top clients. So have you had any notable changes in top 10 client composition recently, less two years or so?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : How does that look from an industry composition? Is it pretty well represented similar to your overall company mixes?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. As you think -- you kind of step back at a high level, what do you consider like the top one or two risks to performance right now? I mean, like, what type of question.

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Have you had to change how you resourced? Pre-funding is one thing, but how do you go find the talent? Any changes in the recruiting organization?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. How about competitive environment? Has there been any -- do you see the same cast of characters out there in cloud environment or has it changed much in post-COVID?

Question: Bryan Bergin - Cowen and Company, LLC - Analyst : Okay. Well, we've run out time, Maurizio. I want to thank you. It was a great discussion and thank you everybody in the audience. Enjoy the rest of the conference. Thank you.