Good day, ladies and gentlemen, and welcome to the ExlService Holdings, Inc., Q1 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference Steven Barlow. Please go ahead.

Thank you, Charlotte. Hello, and thanks to everyone for joining EXL's first quarter 2017 financial results conference call. I'm Steve Barlow, EXL's Vice President of Investor Relations. With us here today in New York is, Rohit Kapoor, our Vice Chairman and Chief Executive Officer; and Vishal Chhibbar, our Chief Financial Officer. We hope that you've had an opportunity to review our quarterly press releases we issued this morning. We've also updated our Investor Fact Sheet in the Investor Relations section of EXL's website. As you know, some of the matters we'll discuss in this call are forward-looking. Please keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, general economic conditions, those factors set forth in today's press release, discussed in the company's periodic reports and other documents filed with the Securities and Exchange Commission from time to time. EXL assumes no obligation to update the information presented on this conference call. During our call today, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliation of these measures to GAAP can be found in our press release, as well as the Investor Fact Sheet. I'll now turn the call over to Rohit Kapoor, EXL's Chief Executive Officer. Rohit?

Thank you, Steve. Good morning, everyone, and welcome to our first quarter 2017 earnings call. We've started the year on a strong note. We earned revenues of $183 million, representing a growth rate of 9.9% year-on-year on a constant currency basis. Our adjusted earnings per share grew 7.1% year-on-year to $0.60 per share. Revenue growth was broad based across all our businesses. Our performance was bolstered by a strong quarter in our customer acquisition analytics practice; full quarter revenue impact of Datasource, which was acquired in mid-October 2016; and additional license sales in our Insurance platform businesses. Now, let me provide more detail on our strong performance in the Analytics and operations management businesses. Our Analytics business had another outstanding quarter, and grew by 26.4% year-on-year on a constant currency basis, generating revenues of $49 million in the quarter. The strong revenue performance was driven by a growth in all our offerings, analytics services, data-enabled solutions and advanced analytics products across all industrial verticals. We ramped up clients won in 2016, and grew business from acquisitions completed last year. This quarter, we won five new clients in Banking, Financial Services and Insurance. I'm really excited about our Analytics business for several reasons. First, our analytics services segment continues on its growth trajectory. We broadened our risk management and marketing analytics offerings to address new customer demand and expanded our share of wallet at existing clients. We also extended data analytics services into new markets: Mexico and South Africa. We are establishing new analytic centers of excellence for two banking clients in these geographies. Second, our data-enabled solutions are gaining traction in the marketplace. Our digital customer acquisition solutions has generated significant demand and conversions this quarter. Our enterprise data management services have had a strong start to the year, and…

Thank you, Rohit, and thanks, everyone, for joining us this morning. I would like to start off by providing insight into our financial performance for the first quarter of 2017 followed by updated guidance. As you know, we are now reporting revenue and gross margins for six reportable segments. The previous reportable segment of operations management is now segregated into reportable segments of Insurance, Healthcare, Travel Transportation and Logistics, Finance and Accounting, and All Other. All Other includes Banking and Financial Services, Utilities and Consulting. Analytics remains a separate reportable segment. Revenues for the quarter were $183 million, up 9.6% year-over-year, or 9.9% on a constant currency basis. Sequentially, we grew 3.2% or 3% on a constant currency basis. For the quarter, operations management revenues, as defined earlier, grew 4.7% year-over-year or 4.9% on a constant currency basis. This growth was primarily driven by clients from our Healthcare, Insurance, Finance and Accounting reporting segments. Healthcare grew 15.6% year-over-year on a constant currency basis, driven by expansion in the existing clients. Insurance grew 15.2% year-over-year on a constant currency basis. This growth was driven by expansion in existing clients, license sales and $1 million of acquisition revenue from Liss. Excluding Liss contribution, Insurance grew 13.2%. Finance and Accounting grew 5.9% year-over-year on a constant currency basis, driven by expansion in existing clients. All Other declined by 17.9% year-over-year on a constant currency basis, driven by lower revenues in Consulting and Utilities. Sequentially, operations management revenue grew 1.7% or 1.5% on a constant currency basis. This growth was driven by Travel Transportation and Logistics, Finance and Accounting, and Insurance and Healthcare business being flattish. All Other down due to Consulting and Utilities. Analytics started this year strongly, with revenues up 25.8% year-over-year or 26.4% on a constant currency basis. Analytics is now…

Our first question comes from the line of Ashwin Shirvaikar from Citi. Your line is now open.

Thank you. Good morning, Rohit. Hi, Vishal.

Hi.

My first question is with regards to, I think, Rohit, you mentioned in your comment, the top 10 clients in operations management grew north of 10%, which is quite healthy, but the overall growth is slower. So is there some pruning going on? Or do you need to build out more of your farming capabilities? And in that context, any metrics you can provide about your sales force in terms of total size, attrition, things like that?

Sure, Ashwin. Thanks for that question. So, the top 10 clients grew quite nicely. As you would have also noticed, in terms of our key industry segments and reportable segments, they grew very nicely. But we do have challenges in our Consulting line of business, as well as our Utilities business, which declined over that same period. So we are focusing in on strengthening some of our core industry verticals. The effort that we are making with our sales and account management teams is to introduce a strong cadence of account planning, being able to monitor the share of wallet with our existing clients and to expand that. We had a few examples of successfully being able to grow our share of wallet with our existing client relationships and we are very encouraged with that. The turnover of our sales and account management teams remains at a normal level. And in fact, we are strengthening those teams by adding on more resources in that area. Our expectation is that the growth rate in our operations management business will start to pick up as soon as some of these businesses start to perform at par.

Okay. With regards to Consulting, as you sort of redo the business, what's your strategic intent? I mean you mentioned it's supposed to be tip of the spear. But could you put some numbers around how big you expect this to be, what kind of investment is going into the hiring of the talent at the upper end, and so on and so forth?

Right. So for us, Consulting is strategically very, very important. It is going to be a business line for us that is a lead-in for our operations management business, and for it to act as the tip of the spear and to allow for flow-through work of operations management is critical. It's also extremely important for us to have our Consulting business with some of our existing client relationships to help them with the transformation changes that are taking place, particularly around robotics and around digital transformation and around some of the finance advisory work that we are doing. The first task before us in the Consulting business is to make sure that our service offerings and the capabilities that we have in terms of serving our clients, those are resonating well in the marketplace. Our interaction and engagement with clients in Consulting along these service lines has certainly increased over the last few quarters. But we haven't been able to realize the revenue from that as yet. We expect that in the next several quarters that our Consulting business will rebound, and that this will become a vibrant and an important part of our overall business, contributing significantly more than where we are right now in the life cycle. We don't have a specific number in terms of the absolute size of the Consulting business or a percentage of revenue as a target for ourselves, but we do look at this as strategically important for us to be able to fix and for us to allow us to grow the company on a go-forward basis.

And last real quick question, property survey business, could you update, given the issues of the last couple of quarters? In particular, I may have missed it, but I thought you had launched a product to target the lower end of the business. How is that product doing? And any color around that? Thanks.

Sure, Ashwin. On the property survey business, we did launch a product called the Express Property Survey. This is a lower cost, faster turnaround service that we have launched. It's still too early for us to tell as to how this product is performing. The initial response has been quite good, but it needs to build up momentum, and we will get to see the traction out here over the next couple of quarters. For the property survey business, the actions that we had intended to take, those are fully implemented, and we should see the results of that coming through this year.

Great. Thank you, guys.

Thank you. Our next question comes from the line of Anil Doradla from William Blair. Your line is now open. Anil Kumar Doradla - William Blair & Co. LLC: Hey, guys. Thanks for taking my question. And Rohit, Vishal, congrats on a good quarter.

Thank you. Anil Kumar Doradla - William Blair & Co. LLC: So, Rohit, I mean, clearly Analytics is shaping the company. You can see that with the numbers. But the question is around how tightly coupled is the operations management with Analytics? Given that we're seeing such a growth disparity between these two segments, I understand that Consulting is playing a role, but clearly there is such a diverse growth. So once you capture the logo, once you have a logo, it looks like Analytics has its own trajectory within the business. So can you help us understand the level of coupling or decoupling between these two segments as you're seeing right now?

Sure, Anil. And I think that's a really, really good question. And for us, the differentiating factor is our strong capability in Analytics and what impact the Analytics business is having to the overall company, both in terms of the business mix as well as the growth rate and the differentiation that we are creating in the marketplace. As you know, we offer analytics services as a stand-alone service, but we also embed analytics into every single client where we manage operations management through our Business EXLerator Framework. That integration of Analytics along with operations management is a key differentiator for us and that's what has been resonating very well for us over the last couple of years. Of course, we charge our clients only for the stand-alone analytics services, and we charge them a combined pricing for the operations management work that we do for them. What we are finding and which is very encouraging for us is as we get into more advanced capabilities in Analytics, particularly around machine learning, artificial intelligence, cognitive and natural language processing, our ability to integrate operations management and analytics is becoming tighter and tighter. So our expectation is that analytics will have a profound impact on the overall company as such, and allow us to differentiate ourselves in the marketplace, command premium pricing, and win a much larger share of market, as we go forward. To us, that combination is critical. We are fortunate that we started on this journey several years ago, and are ahead of competition as far as this is concerned. And, to us, we truly believe that this is what gives the edge to our customers, and that's what they're seeking from us. We are adding, as you know, multiple capabilities in analytics, whether that be on the data side or on the data management side or on the insight generation side, and I think the most valuable part of this is really converting insight to action, and then that's what we are being able to do right now. So we are very, very encouraged by how this shaping up, and I think it truly means a differentiated positioning for us. Anil Kumar Doradla - William Blair & Co. LLC: Great. And as a follow-up, Vishal, when you look at your two headwinds, be Consulting and property survey, what was the proportion of revenues and year-over-year declines combined? Thank you.

Yeah. Thanks, Anil. I think the way to look at it is that our ops management, now that we report it by separate reportable segments, you can see that all our other verticals, except All Other, grew quite nicely. So if you were to look at our erstwhile ops management combination of the reportable segments, the impact of Consulting business was roughly about – year-over-year impact was about 300 basis points. And the impact quarter-on-quarter was about 90 basis points on the growth. The survey business, as you see, it's part of the Insurance business. And the Insurance business has done well. And as Rohit mentioned, the survey business has actually coming back up again in terms of the work we have done. So that had a minimal impact on the growth of Insurance business. Anil Kumar Doradla - William Blair & Co. LLC: Great. Thanks, guys.

Thank you. Our next question comes from the line of Frank Atkins from SunTrust. Your line is now open.

Thanks for taking my questions, and thanks for the additional transparency on individual segments. As we look at the segments, can you talk a little bit more about some of the major drivers of gross margin, specifically in the insurance sector?

Hi, Frank. This is Vishal. So, one of the reasons, as you can see, is the growth in our Insurance business was over 15%. And the growth has led to improved margins, as we have done a license sale, which helps our margins; as we've improved our survey business in terms of the performance on prior quarter; and overall the existing clients also had very good growth. So the margin improvement is both scale and also the impact of license sale.

Okay. And how much visibility do you have in the pipeline on margins in that segment?

So overall, when you look at our gross margins, I would look at the overall company gross margins and adjusted operating margins. For this quarter, we improved our adjusted operating margins sequentially by 100 basis points to about 13.9%. Despite that, there was a little bit of currency headwind also. As I mentioned in the last call, we do expect, and there is a clear line of sight as we are going to improve the utilization in our Consulting business in the coming quarters, where we have good line of sight for the next quarter. We do expect sequential growth overall in our revenues from Q1 to Q2. There are other several levers which we are pulling in terms of cost management and productivity across our business. So we do expect that the adjusted operating margin will expand in the second half of the year. And as I mentioned earlier, that expectation now with the adjustment of FX would be about 40 basis points to 50 basis points. Now, bear in mind, while the foreign exchange, the strengthening of the Indian rupee does impact our margins on a negative basis in terms of the cost going up, but for our adjusted EPS, there is no impact. So if the currency strengthens, our revenues go up. So for every INR 1 strengthening, our revenues go up by $1.5 million, our adjusted operating margins get impacted by about 30 basis points and our foreign exchange gain or loss go up by $1 million. So net-net, impact on adjusted EPS is zero, or we don't expect adjusted EPS to get impacted. So while the rupee has strengthened to a certain extent and in our guidance we've assumed full-year number of about INR 66, we do expect that the margins will improve by 40 basis points to 50 basis points.

Okay. Great. And then, can you talk about areas of strength and weakness on the revenue side in the Healthcare segment?

So, Frank, this is Rohit. I'll take that. On the Healthcare side, we continue to see a broad adoption, and particularly strong on the payer side in Healthcare. We are adding on new client relationships there, and expanding our relationship with existing clients. When we take a look at our pipeline, the pipeline is actually grown very, very significantly in Healthcare. And particularly as our capabilities expand in Healthcare, our ability to do work, which is more complex and higher up on the value chain, increases. For us, Healthcare is a huge marketplace, and the positioning that we've adopted is a great positioning early on. We find very few competitors that can do integrated service offering that includes our technology platform, that includes strong offshore delivery capabilities using clinical resources, and that includes a very strong analytics capability which as you know in Healthcare is extremely important. So, we are actually quite pleased with the positioning that we've adopted in Healthcare, and we see a tremendous opportunity set in front of us in Healthcare.

Okay. Great. Thank you very much.

Thank you. Our next question comes from the line of Joseph Foresi from Cantor Fitzgerald. Your line is now open.

Hi, guys. This is Mike Reid on for Joe. Thanks for taking our call. Did you break out the impact from acquisitions on total revenues and Analytics segment for the period?

Yeah. Hi, Mike. I did mention in my prepared remarks that the contribution of revenues from our acquisitions in this quarter were $6.4 million.

Okay. Thanks. And then, kind of a different direction. I know you spoke a lot about automation, machine-learning intelligence on the call. But maybe just give us a little color on how you're seeing the impact from automation in general to the business and industry maybe in the short term and long term, in regards to opportunities but then again possible threats.

Sure, Mike. So, look, I think automation and robotics and machine learning, they certainly will eliminate a fair amount of work that is currently done manually. However, I think the part to be kept in mind is that the penetration rate in our industry today is still very low and it's about 20%. And therefore, the opportunity set for us to expand that is very, very significant. And we feel that, even while there would be a reduction in the work that is to be done manually, when you take a look at the combined effort of using automation, analytics and process management, our ability to expand that is going to be very significant. And we also think that as we go into some of the areas that require automation, analytics, and operations management, we should be able to command premium pricing associated with that benefit.

Okay. Thanks for the detail.

Thank you. Our next question comes from the line of Ed Caso from Wells Fargo. Your line is open.

Great. Hey. Good morning. I believe I heard you mention that clients are seeking more onshore capabilities, and I wonder if you could flesh that out a little bit more and what margin impacts that might have.

Sure, Ed. So, we are seeing some of our clients seek more onshore capabilities for a couple of different reasons. Number one, they're looking at us providing services to them in an integrated format both onshore and offshore. They've seen our capabilities of running and managing their operations offshore, and now they want us to apply the same capabilities, whether that be a strong discipline around operations management or the integration of analytics and operations management, or the integration of technology with process management. So, that's the number one driver. Number two is, there are a number of regulatory requirements that require work to be done onshore, whether it's from a licensing standpoint or from a regulatory standpoint. So for example, in the Healthcare business, some of the work that needs to be done in Medicare, that needs to be done onshore. And clients are now looking at us providing some of that work capability onshore. In terms of margins, certainly, the gross margins are going to be much lower for work that's going to be done onshore. However, the revenue per employee is going to be a lot higher for the work that's done onshore. And when you apply a much lower allocation of SG&A to this business, primarily because the revenue per employee is much higher, we think that this is going to be still a profitable business for us, and it will allow us to play a much more tightly integrated role with our clients.

Okay. Are you working to build centers in the U.S. and bring the work to the centers? Or is this sort of on the client site? Thanks.

Sure. So, we are looking at primarily building our own centers onshore. We will do this in small, incremental steps, and do this as we go along. As you know, we already have existing onshore delivery centers, and we do serve several clients onshore for insurance processing, for F&A, and we're looking at how can we expand these capabilities of our onshore operations. As we go forward, and as we engage with clients that want this work to be done onshore, we'll expand that capability and that footprint that we've got onshore.

Great. Thank you.

Thank you. Our next question comes from the line of Bryan Bergin from Cowen. Your line is now open. Bryan C. Bergin - Cowen & Co. LLC: Hi, guys. Good morning. On automation, what share of your client base would you characterize as advanced in their adoption? And then, as far as the clients that have come through the EXLerator Framework, can you talk about how that's impacting the profitability profiles of the engagements?

Sure. So, on automation, what we are finding is most of our clients have been pitched robotics by some of the robotics bot companies that have created these technologies, and that can be applied to operations management. Many of our clients have tried to do this on their own, and they have not been able to get either the business benefit or meet their business case as far as the adoption is concerned. And the reason for that is that you need to apply these technologies with a strong understanding of the business. And therefore, there needs to be a strong understanding of the technology and the business that needs to be applied together. So they're now turning to providers like EXL to help them with that implementation and provide them with a committed benefit, which we are quite easily able to do. On the Business EXLerator Framework, I think that's a differentiator for us. And that stands out as our ability to provide incremental value to our clients as we run their operations management business. And that should result in our ability to defend our existing business, win more work, and be able to maintain our margins associated with that business. Bryan C. Bergin - Cowen & Co. LLC: Okay. Can you talk about what you're seeing in the M&A pipeline? Has there been any increased competition there? And then, your target – your inorganic contribution for the quarter, are those businesses growing faster than you expected?

Okay. Vishal, will you take that?

Yeah. So, in terms of our M&A pipeline, we remain very focused in terms of developing a strong pipeline. The core area of focus for us are Healthcare, Insurance and Analytics business. We've looked at several deals, and we continue to look at the deals. The market for M&A, I think, remains pretty competitive, but I think there are several opportunities, and we can build our pipeline and have the deals priced accordingly, and not go and price them or have deal values higher than what we expect. In terms of the impact on our future growth, I think that will depend on when we close out these deals. Bryan C. Bergin - Cowen & Co. LLC: Was the – for Liss, for Datasource, IQR, are those – can you just talk about how those are performing relative to your expectations?

Yeah, sure. So, the Liss acquisition has been a very, very good acquisition, as we mentioned. It has created a digital platform, and some of the license sales we have done this year has been because of the combination of LifePRO and Liss platform. And I think that is resonating very, very well in the market. In terms of Datasource, that's a recent acquisition and we are integrating. And as Rohit mentioned, that we are very pleased with the combined capability now we have in Analytics, where we are really able to now also provide data management and enterprise – our data architecture solutioning to our clients. And I think that's shaping up well. I think in coming quarters we'll see an impact of that in our growth of our Analytics business. In terms of IQR, that was a smaller tuck-in acquisition. But again, I think, there we had the capability to get into more capital markets and banking clients. And that has integrated very well. So overall, I think the growth from these acquisitions, which have been very strategic and expanding our capabilities, are doing pretty well, and are in line with our expectations. Bryan C. Bergin - Cowen & Co. LLC: Okay. Great. Thank you very much.

Thank you. Our next question comes from the line of Vincent Colicchio from Barrington Research. Your line is now open.

Yeah. Rohit, I'm curious, have you seen any impact from regulatory uncertainty in the Healthcare and Financial Services sides?

Vincent, as of yet, we haven't seen any real change in the healthcare industry as such. I think that the work that we are doing for our clients continues as normal. The pipeline continues to look solid. Certainly, in terms of some of the large scale combination of businesses that were originally planned which are not taking place, that had no real impact to our business. So nothing noticeable as yet.

And has there been any change in the pricing environment?

No. The pricing environment continues to be stable. I think the emphasis has shifted from pricing to a lot more around productivity benefits that can be provided on a committed basis to our clients. And therefore, the use of advanced automation technologies, robotics, analytics and being able to deliver that productivity benefit is becoming a critical factor in terms of competing and winning deals.

Okay. Thank you. Nice quarter.

Thank you.

Thank you. Our next question comes from the line of Craig Jones from Stifel. Your line is now open. Craig Jones - Stifel, Nicolaus & Co., Inc.: Thanks for taking the question. So in terms of margins, besides headwinds from Consulting, survey and acquisitions, anything else we should be aware of that's currently affecting?

No. I think in terms of margin, Consulting and improving the utilization rate in Consulting. Overall, our pricing environment, as Rohit mentioned, remains stable, so I think as we scale up, as some of these ramps which had these initial investments which we had made go into a full ramp and full productivity, we will get the benefits and improving margin across our business. Craig Jones - Stifel, Nicolaus & Co., Inc.: Okay. Great. Thank you. And then, did you mention what you're expecting for the year in terms of stock-based comp and then amortization for the non-GAAP add-backs?

I think stock comp is between $26 million to $27 million, and the amortization of intangibles is about $13 million to $14 million, I think. Craig Jones - Stifel, Nicolaus & Co., Inc.: Okay. Great. Thank you.

Thank you. And at this time, I'm not showing any further questions, and would like to turn the call back over to Rohit Kapoor for any closing remarks.

Thank you, all, for joining this first quarter earnings call. We've had a strong start to our business, and we are excited about our ability to compete and execute for 2017. We look forward to all of you joining us on our next earnings call at the end of Q2. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.