Company Quick10K Filing
EXL Service
Price65.82 EPS1
Shares35 P/E46
MCap2,287 P/FCF22
Net Debt151 EBIT73
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-04-29
10-K 2020-12-31 Filed 2021-02-25
10-Q 2020-09-30 Filed 2020-10-29
10-Q 2020-06-30 Filed 2020-08-06
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-02-27
10-Q 2019-09-30 Filed 2019-10-30
10-Q 2019-06-30 Filed 2019-07-30
10-Q 2019-03-31 Filed 2019-04-30
10-K 2018-12-31 Filed 2019-02-28
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-01
10-K 2017-12-31 Filed 2018-02-27
10-Q 2017-09-30 Filed 2017-10-26
10-Q 2017-06-30 Filed 2017-07-27
10-Q 2017-03-31 Filed 2017-05-02
10-K 2016-12-31 Filed 2017-03-15
10-Q 2016-09-30 Filed 2016-10-27
10-Q 2016-06-30 Filed 2016-07-28
10-Q 2016-03-31 Filed 2016-04-29
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-10-29
10-Q 2015-06-30 Filed 2015-07-30
10-Q 2015-03-31 Filed 2015-05-01
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-10-30
10-Q 2014-06-30 Filed 2014-07-29
10-Q 2014-03-31 Filed 2014-05-01
10-K 2013-12-31 Filed 2014-03-03
10-Q 2013-09-30 Filed 2013-11-06
10-Q 2013-06-30 Filed 2013-07-30
10-Q 2013-03-31 Filed 2013-05-03
10-K 2012-12-31 Filed 2013-03-07
10-Q 2012-09-30 Filed 2012-11-05
10-Q 2012-06-30 Filed 2012-08-03
10-Q 2012-03-31 Filed 2012-05-04
10-K 2011-12-31 Filed 2012-03-06
10-Q 2011-09-30 Filed 2011-11-08
10-Q 2011-06-30 Filed 2011-08-05
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-03-16
8-K 2021-01-18 Officers, Exhibits
8-K 2020-12-06 Officers
8-K 2020-10-29
8-K 2020-09-14
8-K 2020-08-21
8-K 2020-08-06
8-K 2020-08-03
8-K 2020-06-15
8-K 2020-05-01
8-K 2020-03-23
8-K 2020-02-27
8-K 2020-01-28
8-K 2019-12-31
8-K 2019-12-13
8-K 2019-10-29
8-K 2019-09-14
8-K 2019-08-22
8-K 2019-07-30
8-K 2019-06-17
8-K 2019-04-30
8-K 2019-03-29
8-K 2019-02-28
8-K 2018-11-01
8-K 2018-10-02
8-K 2018-10-01
8-K 2018-09-07
8-K 2018-08-02
8-K 2018-07-01
8-K 2018-06-15
8-K 2018-05-01
8-K 2018-04-28
8-K 2018-04-27
8-K 2018-02-27
8-K 2018-02-27
8-K 2018-01-30
8-K 2017-12-22

EXLS 10Q Quarterly Report

Part 1. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.2 exls-ex102x03312021x10q.htm
EX-10.3 exls-ex103x03312021x10q.htm
EX-10.4 exls-ex104x03312021x10q.htm
EX-31.1 exls-ex311x03312021x10q.htm
EX-31.2 exls-ex312x03312021x10q.htm
EX-32.1 exls-ex321x03312021x10q.htm
EX-32.2 exls-ex322x03312021x10q.htm

EXL Service Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin


Table of Contents
(Mark One)
FOR THE TRANSITION PERIOD FROM                      TO                     
(Exact name of registrant as specified in its charter)
Delaware 82-0572194
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
320 Park Avenue,
29th Floor,
New York,New York10022
(Address of principal executive offices) (Zip code)
(212) 277-7100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:Trading symbol(s)Name of Each Exchange on Which Registered:
Common Stock, par value $0.001 per share EXLSNASDAQ
Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.   Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files).   Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer  Accelerated filer 
Non-accelerated filer  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  

As of April 27, 2021, there were 33,457,656 shares of the registrant’s common stock outstanding, par value $0.001 per share.

Table of Contents

Table of Contents
(In thousands, except share and per share amounts)
As of
March 31, 2021December 31, 2020
Current assets:
Cash and cash equivalents$177,121 $218,530 
Short-term investments198,721 184,286 
Restricted cash5,295 4,690 
Accounts receivable, net159,296 147,635 
Prepaid expenses12,709 11,344 
Advance income tax, net7,580 5,684 
Other current assets35,828 37,109 
Total current assets596,550 609,278 
Property and equipment, net90,153 92,875 
Operating lease right-of-use assets88,777 91,918 
Restricted cash2,298 2,299 
Deferred tax assets, net10,657 7,749 
Intangible assets, net56,243 59,594 
Goodwill349,098 349,088 
Other assets29,669 32,099 
Investment in equity affiliate2,921 2,957 
Total assets$1,226,366 $1,247,857 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$8,304 $6,992 
Current portion of long-term borrowings25,000 25,000 
Deferred revenue14,764 32,649 
Accrued employee costs43,492 67,645 
Accrued expenses and other current liabilities73,241 66,410 
Current portion of operating lease liabilities18,476 18,894 
Income taxes payable, net14,443 3,488 
Total current liabilities197,720 221,078 
Long-term borrowings, less current portion202,687 201,961 
Operating lease liabilities, less current portion81,948 84,874 
Income taxes payable1,790 1,790 
Deferred tax liabilities, net877 847 
Other non-current liabilities15,119 18,135 
Total liabilities500,141 528,685 
Commitments and contingencies (Refer to Note 24)
Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued
ExlService Holdings, Inc. Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized, 39,273,989 shares issued and 33,526,889 shares outstanding as of March 31, 2021 and 38,968,052 shares issued and 33,559,434 shares outstanding as of December 31, 2020
39 39 
Additional paid-in capital428,882 420,976 

Table of Contents
Retained earnings673,310 641,379 
Accumulated other comprehensive loss(78,753)(74,984)
Total including shares held in treasury1,023,478 987,410 
Less: 5,747,100 shares as of March 31, 2021 and 5,408,618 shares as of December 31, 2020, held in treasury, at cost
Stockholders’ equity726,225 719,172 
Total equity726,225 719,172 
Total liabilities and stockholders’ equity $1,226,366 $1,247,857 
See accompanying notes to unaudited consolidated financial statements.

Table of Contents
(In thousands, except share and per share amounts)

Three months ended March 31,
Revenues, net$261,415    $245,990 
Cost of revenues(1)
158,821    162,656 
Gross profit(1)
102,594 83,334 
Operating expenses:   
General and administrative expenses30,703 28,941 
Selling and marketing expenses18,235 14,456 
Depreciation and amortization expense12,101 12,450 
Total operating expenses61,039 55,847 
Income from operations41,555    27,487 
Foreign exchange gain, net434    1,377 
Interest expense(2,474)(3,072)
Other income, net1,410    2,529 
Income before income tax expense and earnings from equity affiliates40,925 28,321 
Income tax expense8,958 5,855 
Income before earnings from equity affiliates31,967 22,466 
Loss from equity-method investment36 55 
Net income attributable to ExlService Holdings, Inc. stockholders$31,931 $22,411 
Earnings per share attributable to ExlService Holdings, Inc. stockholders:
Basic$0.95 $0.65 
Diluted$0.93 $0.65 
Weighted-average number of shares used in computing earnings per share attributable to ExlService Holdings Inc. stockholders:   
Basic33,734,118    34,401,565
Diluted34,318,318 34,720,603

(1) Exclusive of depreciation and amortization expense.

See accompanying notes to unaudited consolidated financial statements.

Table of Contents
(In thousands)
Three months ended March 31,
Net income$31,931 $22,411 
 Other comprehensive income/(loss):
Unrealized gain/(loss) on cash flow hedges568 (14,846)
Foreign currency translation loss(1,911)(21,571)
Reclassification adjustments
Gain on cash flow hedges(1)
Retirement benefits(2)
179 101 
Income tax effects relating to above(3)
224 9,033 
  Total other comprehensive loss$(3,769)$(28,212)
Total comprehensive income/(loss)$28,162 $(5,801)

(1)These are reclassified to net income and are included either in cost of revenues or operating expenses, as applicable in the unaudited consolidated statements of income. Refer to Note 16 - Derivatives and Hedge Accounting to the unaudited consolidated financial statements.

(2)These are reclassified to net income and are included in other income, net in the unaudited consolidated statements of income. Refer to Note 19 - Employee Benefit Plans to the unaudited consolidated financial statements.

(3)These are income tax effects recognized on cash flow hedges, retirement benefits and foreign currency translation gains/(losses). Refer to Note 21 - Income Taxes to the unaudited consolidated financial statements.

See accompanying notes to unaudited consolidated financial statements.

Table of Contents
For the three months ended March 31, 2021 and 2020
(In thousands, except share and per share amounts)
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Equity
Balance as of January 1, 202138,968,052 $39 $420,976 $641,379 $(74,984)(5,408,618)$(268,238)$719,172 
Stock issued against stock-based compensation plans305,937 — 74 — — — — 74 
Stock-based compensation— — 7,832 — — — — 7,832 
Acquisition of treasury stock— — — — — (338,482)(29,015)(29,015)
Other comprehensive loss— — — — (3,769)— — (3,769)
Net income— — — 31,931 — — — 31,931 
Balance as of March 31, 202139,273,989 $39 $428,882 $673,310 $(78,753)(5,747,100)$(297,253)$726,225 

Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Equity
Balance as of January 1, 202038,480,654 $39 $391,240 $551,903 $(84,892)(4,295,413)$(188,289)$670,001 
Stock issued against stock-based compensation plans333,121 — 921 — — — — 921 
Stock-based compensation— — 4,778 — — — — 4,778 
Acquisition of treasury stock— — — — — (202,366)(13,995)(13,995)
Other comprehensive loss— — — — (28,212)— — (28,212)
Net income— — — 22,411 — — — 22,411 
Balance as of March 31, 202038,813,775 $39 $396,939 $574,314 $(113,104)(4,497,779)$(202,284)$655,904 
See accompanying notes to unaudited consolidated financial statements.


Table of Contents
(In thousands)
Three months ended March 31,
Cash flows from operating activities:
Net income$31,931 $22,411 
Adjustments to reconcile net income to net cash provided by / (used for) operating activities:
Depreciation and amortization expense12,266 12,472 
Stock-based compensation expense7,832 4,778 
Amortization of operating lease right-of-use assets6,761 6,853 
Unrealized (gain) / loss on short term investments(1,103)267 
Unrealized foreign exchange (gain), net(1,139)(6,490)
Deferred income tax (benefit)/expense(2,695)3,539 
Allowance for expected credit losses48 195 
Loss from equity-method investment36 55 
Amortization of non-cash interest expense related to convertible senior notes673 635 
Others, net216 (26)
Change in operating assets and liabilities:
Accounts receivable(11,818)(17,518)
Prepaid expenses and other current assets(21)(1,871)
Advance income tax, net9,057 (1,109)
Other assets1,268 925 
Accounts payable1,902 1,400 
Deferred revenue(17,986)2,579 
Accrued employee costs(23,611)(37,046)
Accrued expenses and other liabilities8,456 972 
Operating lease liabilities(6,868)(6,576)
Net cash provided by /(used for) operating activities15,205 (13,555)
Cash flows from investing activities:
Purchases of property and equipment(12,680)(12,347)
Proceeds from sale of property and equipment129 73 
Investment in equity affiliate (700)
Purchase of investments(18,835)(23,830)
Proceeds from redemption of investments5,357 72,844 
Net cash (used for) /provided by investing activities(26,029)36,040 
Cash flows from financing activities:
Principal payments of finance lease liabilities(57)(67)
Proceeds from borrowings25,000 110,000 
Repayments of borrowings(25,000)(10,201)
Acquisition of treasury stock(29,015)(13,995)
Proceeds from exercise of stock options75 921 
Net cash (used for)/provided by financing activities(28,997)86,658 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(984)(2,653)
Net (decrease)/increase in cash, cash equivalents and restricted cash(40,805)106,490 
Cash, cash equivalents and restricted cash at the beginning of the period225,519 127,044 
Cash, cash equivalents and restricted cash at the end of the period$184,714 $233,534 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest$610 $775 
Income taxes, net of refunds$2,415 $2,646 
Supplemental disclosure of non-cash investing and financing activities:
Assets acquired under finance lease$10 $28 

See accompanying notes to unaudited consolidated financial statements.

Table of Contents
March 31, 2021
(In thousands, except share and per share amounts)
1. Organization

ExlService Holdings, Inc. (“ExlService Holdings”) is organized as a corporation under the laws of the state of Delaware. ExlService Holdings, together with its subsidiaries and affiliates (collectively, the “Company”), operates in the Business Process Management (“BPM”) industry providing operations management services and analytics services that helps its clients build and grow sustainable businesses. By orchestrating its domain expertise, data, analytics and digital technology, the Company looks 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. The Company’s clients are located principally in the United States of America (“U.S.”) and the United Kingdom (“U.K.”).
2. Summary of Significant Accounting Policies
(a) Basis of Preparation and Principles of Consolidation

The unaudited consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

The unaudited consolidated financial statements reflect all adjustments (of a normal and recurring nature) that management considers necessary for a fair presentation of such statements for the interim periods presented. The unaudited consolidated statements of income for the interim periods presented are not necessarily indicative of the results for the full year or for any subsequent period.

The accompanying unaudited consolidated financial statements include the financial statements of ExlService Holdings and all of its subsidiaries. The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing consolidated financial statements.

Accounting policies of the respective individual subsidiary and associate are aligned wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under U.S. GAAP.

The Company’s investments in equity affiliates are initially recorded at cost and any excess purchase consideration paid over proportionate share of the fair value of the net assets of the investee at the acquisition date is recognized as goodwill. The proportionate share of net income or loss of the investee after its acquisition is recognized in the unaudited consolidated statements of income.
(b) Use of Estimates
The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the unaudited consolidated statements of income during the reporting period. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates and assumptions that affect the unaudited consolidated financial statements include, but are not limited to, allowance for expected credit losses, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, and variable consideration in a customer contract, expected recoverability from customers with contingent fee arrangements, estimated costs to complete fixed price contracts, recoverability of dues from statutory authorities, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments, assumptions used to calculate stock-based compensation expense, assumptions used to determine the incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, lease term to calculate amortization of ROU, depreciation and amortization periods, purchase price allocation and recoverability of long-lived assets, goodwill and intangibles.


Table of Contents
March 31, 2021
(In thousands, except share and per share amounts)

As of March 31, 2021, the extent to which the global Coronavirus Disease 2019 pandemic (“COVID-19”) will ultimately impact the Company's business depends on numerous dynamic factors, which the Company still cannot reliably predict. As a result, many of the Company's estimates and assumptions herein required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve with respect to COVID-19, the Company’s estimates may materially change in future periods. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements.
(c) Recent Accounting Pronouncements

In January 2021, Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment (commonly referred to as the discounting transition) are within the scope of Accounting Standard Codification (“ASC”) 848. The amendments in this ASU further clarify that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of the discontinuation of the use of LIBOR as a benchmark interest rate due to reference rate reform. This ASU is effective immediately for all entities with the option to be applied retrospectively as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, and prospectively to any new contract modifications made on or after January 7, 2021 through December 31, 2022. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and London Inter-Bank Offered Rate (“LIBOR”). The ASU provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and are effective upon issuance for all entities through December 31, 2022. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In August 2020, FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU removes separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature and hence most of the instruments will be accounted for as a single model (either debt or equity). The ASU also states that entities must apply the if-converted method to all convertible instruments for calculation of diluted EPS and the treasury stock method is no longer available. An entity can use either a full or modified retrospective approach to adopt the ASU’s guidance. The ASU is effective for fiscal years beginning after December 15, 2021 and may be early adopted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this ASU on its consolidated financial statements.

(d) Recently Adopted Accounting Pronouncements

In December 2019, FASB issued ASU No. 2019-12, Income Taxes Simplifying the Accounting for Income Taxes. This ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company adopted this ASU on January 1, 2021. The adoption of this ASU has a minimal impact on the Company’s unaudited consolidated financial statements.

In October 2020, FASB issued ASU No. 2020-10, Codification Improvements, to provide guidance for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements. The amendments in this ASU improve the consistency of the ASC by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the disclosure section of the ASC. The Company adopted this ASU on January 1, 2021. The adoption of this ASU did not have a material impact on the Company’s unaudited consolidated financial statements.


Table of Contents
March 31, 2021
(In thousands, except share and per share amounts)

3. Segment and Geographical Information

The Company operates in the BPM industry and is a provider of operations management and analytics services.

The Company manages and reports financial information through its four strategic business units: Insurance, Healthcare, Analytics and Emerging Business. These business units develop client-specific solutions, build capabilities, maintain a unified go-to-market approach and are integrally responsible for service delivery, customer satisfaction, growth and profitability.

The chief operating decision maker (“CODM”) generally reviews financial information such as revenues, cost of revenues and gross profit, disaggregated by the operating segments to allocate an overall budget among the operating segments.
The Company does not allocate and therefore the CODM does not evaluate, certain operating expenses, interest expense or income taxes by segment. Many of the Company’s assets are shared by multiple operating segments. The Company manages these assets on a total Company basis, not by operating segment, and therefore asset information and capital expenditures by operating segment are not presented.
Revenues and cost of revenues for the three months ended March 31, 2021 and 2020, respectively, for each of the reportable segments, are as follows:
Three months ended March 31, 2021
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$91,160 $30,265 $37,668 $102,322 $261,415 
Cost of revenues(1)
56,093 17,391 20,844 64,493 158,821 
Gross profit(1)
$35,067 $12,874 $16,824 $37,829 $102,594 
Operating expenses61,039 
Foreign exchange gain, interest expense and other income, net(630)
Income tax expense8,958 
Loss from equity-method investment36 
Net income$31,931 

(1) Exclusive of depreciation and amortization expense.
Three months ended March 31, 2020
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$83,739 $27,029 $42,791 $92,431 $245,990 
Cost of revenues(1)
58,965 19,593 25,482 58,616 162,656 
Gross profit(1)
$24,774 $7,436 $17,309 $33,815 $83,334 
Operating expenses55,847 
Foreign exchange gain, interest expense and other income, net834 
Income tax expense5,855 
Loss from equity-method investment55 
Net income$22,411 

(1) Exclusive of depreciation and amortization expense.


Table of Contents
March 31, 2021
(In thousands, except share and per share amounts)

Revenues, net by service type, were as follows:
Three months ended March 31,
BPM and related services(1)
$159,093 $153,559 
Analytics services102,322 92,431 
Revenues, net$261,415 $245,990 

(1) BPM and related services include revenues of the Company's Insurance, Healthcare and Emerging Business reportable segments. Refer to the reportable segment disclosure above.

The Company attributes the revenues to regions based upon the location of its customers.
 Three months ended March 31,
Revenues, net
United States$224,368 $207,880 
Non-United States
United Kingdom24,751 23,278 
Rest of World12,296 14,832 
Total Non-United States37,047 38,110 
Revenues, net$261,415 $245,990 

Long-lived assets by geographic area, which consist of property and equipment, net and operating lease right-of-use assets were as follows:
As of
March 31, 2021December 31, 2020
Long-lived assets
India$93,329 $97,261 
United States47,676 46,659 
Philippines27,486 29,434 
Rest of World10,439 11,439 
Long-lived assets$178,930 $184,793 

4. Revenues, net

Refer to Note 3 - Segment and Geographical Information to the unaudited consolidated financial statements for revenues disaggregated by reportable segments and geography.

Contract balances
The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:

Table of Contents
March 31, 2021
(In thousands, except share and per share amounts)

As of
March 31, 2021December 31, 2020
Accounts receivable, net$159,296 $147,635 
Contract assets3,984 4,437 
Contract liabilities:
   Deferred revenue (consideration received in advance)12,971 30,450 
   Consideration received for process transition activities$2,280 $2,774 

Accounts receivable includes $78,502 and $63,995 as of March 31, 2021 and December 31, 2020, respectively, representing unbilled receivables. The Company has accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers and considers no significant performance risk associated with its unbilled receivables.

Contract assets represent upfront payments such as deal signing discounts or deal signing bonuses made to customers. These costs are amortized over the expected period of the benefit and are recorded as an adjustment to transaction price and reduced from revenues. The Company’s assessment did not indicate any impairment losses on its contract assets for the periods presented.

Contract liabilities represent that portion of deferred revenue for which payments have been received in advance from customers. The Company also defers revenues attributable to certain process transition activities for which costs have been capitalized by the Company as contract fulfillment costs. Consideration received from customers, if any, relating to such transition activities are classified under contract liabilities and are included within “Deferred revenues” and “Other non-current liabilities” in the unaudited consolidated balance sheets. The revenues are recognized as (or when) the performance obligation is fulfilled under the contract with customer.

Revenue recognized during the three months ended March 31, 2021 and 2020, which was included in the contract liabilities balance at the beginning of the respective periods:

 Three months ended March 31,
Deferred revenue (consideration received in advance)
$23,621 $5,968 
Consideration received for process transition activities
$679 $274 

Contract acquisition and fulfillment costs
The following table provides details of the Company’s contract acquisition and fulfillment costs:
Contract Acquisition CostsContract Fulfillment Costs
Quarter EndedYear EndedQuarter EndedYear Ended
March 31, 2021March 31, 2020December 31, 2020March 31, 2021March 31, 2020December 31, 2020
Opening Balance$1,027 $1,307 $1,307 $5,631 $7,255 $7,255 
Additions  310 6 284 779 
Closing Balance$785 $1,215 $1,027 $4,419 $6,916 $5,631 

There was no impairment for contract acquisition and contract fulfillment costs as of March 31, 2021 and December 31, 2020. The capitalized costs are amortized over the expected period of benefit of the contract.


Table of Contents
March 31, 2021
(In thousands, except share and per share amounts)

Allowance for expected credit losses

The Company evaluates the credit risk of its customers based on a combination of various financial and qualitative factors that may affect the ability of each customer to pay. The Company considered current and anticipated future economic conditions relating to the industries of the Company’s customers and the countries where it operates. In calculating expected credit loss, the Company also considered past payment trends, credit rating and other related credit information for its significant customers to estimate the probability of default in the future and estimates relating to the possible effects resulting from COVID-19.

The duration and severity of COVID-19 and continued market volatility is highly uncertain and, as such, the impact on expected losses is subject to significant judgment, including but not limited to changes in customers’ credit rating, and may cause variability in the Company’s allowance for credit losses in future periods.
As of
March 31, 2021December 31, 2020
Accounts receivable, including unbilled receivables$160,479 $148,824 
Less: Allowance for expected credit loss(1,183)(1,189)
Accounts receivable, net$159,296 $147,635 

The movement in allowance for expected credit loss on customer balances for the three months ended March 31, 2021 and year ended December 31, 2020 was as follows:
Three months endedYear ended
March 31, 2021March 31, 2020December 31, 2020
Balance at the beginning of the period$1,189 $1,163 $1,163 
Additions during the period50 195 300 
Charged against allowance(60) (269)
Translation adjustment4 (12)(5)
Balance at the end of the period$1,183 $1,346 $1,189 

5. Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding, adjusted for outstanding shares that are subject to repurchase during each period. Diluted earnings per share is computed using the weighted average number of common shares plus the potentially dilutive effect of common stock equivalents (outstanding stock options, restricted stock and restricted stock units) issued and outstanding at the reporting date, and assumed conversion premium of outstanding convertible notes, using the treasury stock method. Common stock equivalents and the conversion premium of outstanding convertible notes that are anti-dilutive are excluded from the computation of weighted average shares outstanding. The Company includes performance stock unit awards in dilutive potential common shares when they become contingently issuable and have a dilutive impact per authoritative guidance and excludes such awards when they are not contingently issuable.

The Company has a choice to settle the Notes in cash, shares or any combination of the two. The Company presently intends and has the ability to settle the principal balance of the Notes in cash, and as such, the Company has applied the treasury stock method. The dilution related to the conversion premium, if any, of the Notes is included in the calculation of diluted weighted-average shares outstanding to the extent the issuance is dilutive based on the average stock price during the reporting period being greater than the conversion price of $75. Refer to Note 17 - Borrowings to the unaudited consolidated financial statements for further details.

The following table sets forth the computation of basic and diluted earnings per share:

Table of Contents
March 31, 2021
(In thousands, except share and per share amounts)

 Three months ended March 31,
Net income$31,931 $22,411 
Basic weighted average common shares outstanding33,734,118 34,401,565 
Dilutive effect of share based awards342,993 319,038 
Dilutive effect of conversion premium on convertible notes241,207  
Diluted weighted average common shares outstanding34,318,318 34,720,603 
Earnings per share attributable to ExlService Holdings Inc. stockholders:
Basic$0.95 $0.65 
Diluted$0.93 $0.65 
Weighted average potentially dilutive shares considered anti-dilutive and not included in computing diluted earnings per share 170,313 
6. Cash, Cash Equivalents and Restricted Cash

For the purpose of unaudited statements of cash flows, cash, cash equivalents and restricted cash comprise of the following:
 As of
 March 31, 2021March 31, 2020
Cash and cash equivalents$177,121 $224,874 
Restricted cash (current)5,295 6,369 
Restricted cash (non-current)2,298 2,291 
Cash, cash equivalents and restricted cash$184,714 $233,534 

7. Other Income, net
Other income, net consists of the following:
Three months ended March 31,
Gain on sale and mark-to-market of mutual funds$1,103 $2,056 
Interest and dividend income602 532 
Others, net(295)(59)
Other income, net$1,410