Exlservice Holdings Inc at JPMorgan Ultimate Services Investor Conference Transcript

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

Question: Puneet Jain - JPMorgan - Analyst : So Maurizio, for investors who might be new to the story, could you talk about EXLS' positioning? You have come a long way from IPO back in 2007, talk to us how EXLS is positioned? What resonates with your clients in your service offerings?

Question: Puneet Jain - JPMorgan - Analyst : No, that's great. On execution, I have to say, EXLS is one of the few names in our coverage to demonstrate that defensiveness. You continue to grow double digits through this period of slowdown, which is amazing. Not many companies have done that. So talk to us what's driving that outperformance? you've seen a lot of large deals? Is it just that you -- because you are able to bring AI and digital capabilities, the clients are coming your way or there is something else broader going on and client behavior and how they're taking decisions that is driving this upside for you?

Question: Puneet Jain - JPMorgan - Analyst : All right. And so within your digital operations, operations management business, you recently introduced insurance LLM, an industry-specific LLM. So how large is that opportunity? How -- talk to us, feedback you've been getting from clients how large industry-specific LLMs can become within insurance -- within operations management, digital operations?

Question: Puneet Jain - JPMorgan - Analyst : Understood. And why is EXLS better position to create and win some of -- create these LLMs and when some of these deals compare to an IT services company that might be focused on Insurance vertical or the software companies, let's say, Duck Creek, Guidewire, that are also focused on insurance?

Question: Puneet Jain - JPMorgan - Analyst : Yeah. And let me ask staying on digital operations, and AI risk or opportunity, right? So this is the one question we get from investors a lot about what does AI mean for that business, right? And you are creating all these AI solutions that are helping you win share, drive growth, digital operations is growing double digits -- well into double digits right now. So if you think two or three years or maybe five years out, right, when AI adoption will be higher than what it is now, there will be some work that is being done manually will be automated. There might be more clients who will outsource. What does all of that mean for digital operations growth? Can that business continue growing into double digits for medium term or for the next three, four, five years?

Question: Puneet Jain - JPMorgan - Analyst : Right. And you have the AI capabilities, analytics capabilities, in both segments, digital operations and analytics data. How do you ensure when you -- like your go-to-market team, when they bid for a contract they bring the best of both to clients, how do you ensure there is efficient knowledge transfer between the two entities, which are both trying to build AI capabilities for clients?

Question: Puneet Jain - JPMorgan - Analyst : Got it. And within your Analytics business, you talked about the data management practice is growing 20% at very high clip, right?

Question: Puneet Jain - JPMorgan - Analyst : How large is that practice right now? And that -- it's clear that practice should have secular growth drivers, secular tailwinds behind it. So talk to us how large that practice is? And you also mentioned on the last earnings call payment services as being a growth driver within analytics. So talk to us what's driving growth there? And what should we expect for analytics overall over the next few years?

Question: Puneet Jain - JPMorgan - Analyst : Understood. And with all these investments that must have gone through in building data management practice, AI capabilities, your margins are still up a lot, last quarter, I think you reported 20% operating margins, for the full year, you expect between mid-19%s, give or take. So how should we think about margins going forward? Can you keep reporting these levels of margins, high teens, almost hitting 20% and yet continue to invest that much in the business to remix towards these new areas?

Question: Puneet Jain - JPMorgan - Analyst : At this time, are there any questions from audience? Just wait for the mic, please?

Question: Puneet Jain - JPMorgan - Analyst : Any other questions?? We have one minute left. Let me ask -- you started with giving the historical perspective, how EXLS pivoted multiple times, how you are right now, provider of data management, AI capabilities. Where do we go from here three to five years? How should we think about evolution of these practices within EXLS? And if there are any long-term trends that you are currently investing in that can become more relevant?

Question: Puneet Jain - JPMorgan - Analyst : And quickly, we are out of time, one word answer. How large AI can be within digital operations? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 14, 2024 / 6:10PM, EXLS.OQ - Exlservice Holdings Inc at JPMorgan Ultimate Services Investor Conference

Question: Puneet Jain - JPMorgan - Analyst : That's more than one word. But appreciate it. Thank you so much.