ExlService Holdings, Inc. (NASDAQ:EXLS) Q3 2023 Earnings Call Transcript

Surinder Thind: Perfect. Thank you, guys.

Operator: Wonderful. Thank you. [Operator Instructions] Our next question comes from the line of Vincent Colicchio of Barrington Research. Go ahead.

Vincent Colicchio: Yes. Curious, is the Yellow Corp situation sort of a one-off? Or are there any other clients who are under financial distress that require monitoring?

Maurizio Nicolelli: Yeah. Vince, it’s Maurizio, and thanks for the question. But no, it’s a — this is a one-off. We don’t have any other client in this type of a situation. And when you look at our DSO and we also look at the health of our clients, this right now really is a one-off at the end of the day and we don’t have any other situation that’s significant like that.

Vincent Colicchio: Okay. Second question as a follow-up. You haven’t done M&A in some time. Your business is in solid shape, I would imagine, better than some others. So as your pipeline is strong and have valuations come down, making it an attractive time to look?

Maurizio Nicolelli: Yeah. So, Vince, M&A is still a significant opportunity for us. We do have a fairly healthy pipeline of M&A opportunities that we’re evaluating. And we continue to go through that process. I think valuations have become a bit more reasonable than they had been in 2022, and so you are seeing that. It’s — as we go forward and we want to add capabilities, and given the amount of cash flow that we generate now, this is an area that we truly want to focus on. And it’s areas within data, analytics, technology, digital, AI, it’s really adding additional capabilities to those key core areas for us to really continue to drive the business. So going forward, we will be allocating capital between M&A and share repurchase. And you’ll start to see more of an allocation between the two versus being more on the buyback side over the last kind of 1.5 years.

Vincent Colicchio: Okay. Thank you. Nice quarter.

Rohit Kapoor: Thank you.

Operator: Thank you. One moment while we prepare the next question. Our next question comes from the line of David Grossman from Stifel. David, go ahead. David Grossman? Wonderful. So we’re going to go ahead and head back to the speaker. I would now like to turn it back to John Kristoff for closing remarks.

John Kristoff: Thank you, Maria. Thank you, everyone, for joining our call today. And as always, for follow-up questions, please don’t hesitate to reach out to me directly. Thank you again.

Operator: Thank you for participating in today’s conference. This does conclude the program. You may now disconnect.