NASDAQ$EXLS

ExlService Holdings Inc. · Q2 2020 earnings

Q2 2020 earnings · · Investor relations

Briefing

Reported a decrease in revenue and EPS due to the impact of COVID-19, but exceeded expectations through a quick transition to a 'work-from-anywhere' model and cost management.

ExlService Holdings reported Q2 2020 results with revenues of $222.5 million, down 8.6% year-over-year, and a GAAP EPS of $0.24, down from $0.36 in Q2 2019. However, the company exceeded its revenue expectations and adjusted EPS guidance due to higher revenue and cost management amidst the COVID-19 pandemic. They are resuming guidance for 2020.

  • Revenues for Q2 2020 were $222.5 million, an 8.6% decrease year-over-year.
  • Q2 Diluted EPS (GAAP) was $0.24, down from $0.36 in Q2 2019.
  • Q2 Adjusted Diluted EPS (Non-GAAP) was $0.53, down from $0.74 in Q2 2019.
  • The company transitioned to a 'work-from-anywhere' model, meeting over 95% of client delivery needs.

Headline financials

Total Revenue

$222M

Previous: $244M-8.6%
EPS (adj)

$0.11

Previous: $0.15-26.7%
Gross Margin

28.8%

Previous: 33.3%-13.5%
Operating Margin

4.4%

Previous: 5.7%-22.8%
Capital Expenditures

-$22.1M

Previous: -$22.3M+1.1%
Free Cash Flow

-$13.6M

Previous: -$9.72M-40.1%
Net Income

$8.43M

Previous: $12.6M-32.9%
Operating Income

$9.87M

Previous: $13.9M-28.8%
Gross Profit

$64.1M

Previous: $81.1M-21.0%
Cash & Equivalents

$164M

Previous: $84.8M+92.9%
Total Assets

$1.19B

Previous: $1.14B+4.9%
Stock-Based Comp

$7.73M

Previous: $7.16M+8.0%

Revenue & EPS history

ExlService · Revenue · Quarterly

$222M

Q2 2020-8.6%vs Q2 2019
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

ExlService · $106M total across 2 segments · Q2 2020

  • Insurance
    $81.3M-5.0%
  • Healthcare and Life Sciences
    $25M+15.2%

Forward guidance

EXL is providing revenue guidance of $922 million to $938 million, representing a reduction of 3.5% to 5.0% on a constant currency basis from 2019, and adjusted diluted earnings per share of $2.60 to $2.80.

Tailwinds

  • Revenue of $922 million to $938 million
  • Adjusted diluted earnings per share of $2.60 to $2.80
  • Anticipate sequential revenue growth in the second half of the year
  • Anticipate sequential adjusted EPS growth in the second half of the year
  • Balance sheet has remained strong

Headwinds

  • Revenue represents an annual revenue reduction of 3.5% to 5.0% on a constant currency basis from 2019
  • Expectation could change given the unknown duration and severity of the pandemic
  • Market environment remains volatile due to the ongoing pandemic
  • Second quarter 2020 revenues decreased to $222.5 million compared to $243.5 million for the second quarter of 2019, a decrease of 8.6%
  • Revenues declined by 9.6% sequentially

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2020

Historical avgQ2 2020

+0.7%

Avg return

Earnings day

+1.7%

Avg return

5 days after

+2.3%

Avg return

30 days after

52%

34 / 65 earnings

Positive

+15.0%

Q1 2010

Best reaction

-13.2%

Q2 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.9%+4.5%-4.2%
Q4 2025-0.3%+8.6%+3.8%
Q3 2025-7.0%-5.6%-4.2%
Q1 2025+7.8%+3.5%+2.2%
Q4 2024-0.1%-1.8%-3.9%
Q3 2024+7.5%+7.5%+20.3%
Q2 2024-3.5%-3.2%+3.6%
Q1 2024+2.0%+5.6%+2.7%
Q4 2023+6.3%+4.5%+6.5%
Q3 2023+1.6%+3.5%+12.0%
Q2 2023-13.2%-14.2%-11.9%
Q1 2023+10.0%+8.9%-6.2%
Q4 2022-1.0%-3.3%-9.9%
Q3 2022+3.4%+8.2%+10.0%
Q2 2022+13.3%+14.0%+14.8%
Q1 2022-4.8%-4.2%+0.5%
Q4 2021+4.9%+7.6%+19.6%
Q3 2021+6.1%+11.5%+8.2%
Q2 2021+5.4%+9.5%+12.2%
Q1 2021-0.6%+3.0%+9.7%
Q4 2020+4.0%+5.0%+16.7%
Q3 2020+3.6%+7.9%+15.2%
Q2 2020+3.3%+3.1%-4.8%
Q1 2020-1.0%-6.2%+6.7%
Q4 2019+3.1%+5.8%-28.2%
Q3 2019+5.1%+4.3%+6.1%
Q2 2019+3.1%+1.5%+2.9%
Q1 2019-2.5%-0.5%-4.7%
Q4 2018-0.6%-1.6%-2.4%
Q3 2018-8.3%-9.7%-9.6%
Q2 2018-2.2%-1.1%+7.7%
Q1 2018-6.9%-6.7%-1.9%
Q4 2017-7.0%-7.3%-9.0%
Q3 2017+3.1%+3.0%+0.6%
Q2 2017+3.5%+4.9%-0.4%
Q1 2017+2.7%+3.9%+10.9%
Q4 2016-1.6%-3.2%-1.2%
Q3 2016-5.0%-6.7%+1.6%
Q2 2016-3.0%+1.2%-1.6%
Q1 2016-6.0%
Q4 2015+5.4%
Q3 2015+5.7%
Q2 2015+5.3%
Q1 2015+0.6%
Q4 2014+9.2%
Q3 2014+1.4%
Q2 2014-1.7%
Q1 2014+1.6%
Q4 2013+8.9%
Q3 2013-5.6%
Q2 2013-4.3%
Q1 2013-6.3%
Q4 2011+0.8%
Q1 2011+0.8%
Q4 2012+4.6%
Q3 2012-7.6%
Q2 2012-2.2%
Q1 2012-6.0%
Q4 2009+0.6%
Q3 2010-1.3%
Q3 2011-1.3%
Q4 2010-2.3%
Q2 2010-2.3%
Q2 2011-2.3%
Q1 2010+15.0%

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