Ladies and gentlemen, thank you for standing by, and welcome to the ExlService Holdings, Inc. Q4 and full year 2020 earnings call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Steven Barlow. Thank you. Please go ahead, sir. Thank you, Amira. Good morning. Thanks to everyone for joining EXL's fourth quarter and fiscal 2020 financial results conference call. I'm Steve Barlow, EXL's Vice President of Investor Relations. On the call this morning are Rohit Kapoor, our Chief Executive Officer and Vice Chairman, and Maurizio Nicolelli, our Chief Financial Officer. We hope you've had an opportunity to review our Q4 2020 earnings release 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 this morning 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. Now I'll turn the call over to Rohit, EXL's Chief Executive Officer. Rohit? Thank you, Steve. Good morning, everyone. Welcome to our 2020 year-end earnings call. As I look back at 2020, I am proud of how the year has shaped up despite the uncertainties that marked this unprecedented year. The efforts we put in place early, such as shifting our 30,000+ global workforce to a work from home business model, ensuring the health and safety of our employees, and safeguarding the business continuity for our clients, helped establish the momentum we would carry throughout the year. Ultimately, through a combination of human ingenuity, creativity, hard work, and true collaboration, we demonstrated agility and resilience in the face of crisis. The end results have been stronger client relationships, expanded capabilities, and a reaffirmation of our mission to work as one team to help our clients transform. Each person within EXL pulled the organization forward. The true character and culture of our organization stood out more than ever. Throughout 2020, each one of us demonstrated a sense of purpose, looking deeper, finding a better way, and making it happen. We truly lived our core values of collaboration, innovation, excellence, integrity, and respect. For the fourth quarter 2020, we generated revenues of $249 million, which represents a 3.1% sequential increase on a constant currency basis. Adjusted EPS for the quarter grew by 9.6% sequentially to $1.14. This is our highest EPS earned in a quarter, representing 44.3% growth year-over-year. Our analytics business had an outstanding quarter with $98.1 million in revenue, which represents an 8.4% growth quarter-over-quarter. This strong performance was a result of multiple expansions within our strategic banking clients, growth from our payment integrity solutions in healthcare, and the increased demand for our data-led marketing solutions within our insurance clients. Our operations management business reported $150.9 million in revenue for the fourth quarter 2020, flat quarter-over-quarter. We continue to sign new business in operations management and our pipeline remains strong. As the economy emerges from the impact of the pandemic, our clients are focused on delivering personalized customer experiences, optimizing costs, and supporting resilient operating models. As a result, our data-led value creation framework is resonating nicely in the marketplace. We are seeing growth across two dimensions. One, accelerated demand for our full suite of data and analytics capabilities. Two, leveraging AI-powered solutions on the cloud to embed intelligence in operations. The shift of consumers to digital channels, along with an uneven economic recovery, has accelerated the adoption of data-driven decisioning. Clients are partnering with us to lead their enterprise-wide data and analytics agendas and unlock new insights that create a competitive advantage. One great example is a new client relationship with a mid-size U.S. mutual insurance carrier. Our client engaged us to significantly grow the number of new customers and reduce the acquisition cost per customer. We are leveraging our proprietary data assets, marketing analytic models, campaign analytics, technology and operations to acquire new customers profitably and at scale. As a result, our relationship expanded meaningfully in the last six months, and we have more opportunities for further expansion. Our differentiated capabilities in data and analytic services are recognized by our customers and analysts alike. We were recently named a visionary in the 2021 Gartner Magic Quadrant for data and analytics service providers. We have differentiated ourselves with a combination of deep expertise in our selected industry verticals and the scale we have been able to attain. Over the last six years, our analytics business has grown at a CAGR of 33%, with over 150 clients, and we have built a deep bench of 4,500+ data scientists, analysts, and engineers. A second area I want to highlight is our AI-powered solutions on the cloud that are driving growth in our operations management business. Today, our operations management clients are looking for more than just automation and efficiency. They are focused on, one, fundamentally redesigning the process architecture to fully leverage AI and analytics. Two, automating decisioning and improving customer experience using domain-specific AI and analytics solutions. Three, harvesting untapped data within the legacy processes to derive deeper customer insights. With our strong understanding of client processes, we are leveraging the flexibility and the computing power of cloud to deploy AI solutions that can transform operations at speed. To strengthen our cloud competencies across people, process, and technology, we are investing in a cloud center of excellence. We are also expanding our partnership ecosystem to develop and go to market with these cloud-native AI solutions. With several solution pilots underway, we are co-innovating with our clients to solve strategic business problems. One such example is our relationship with a large global insurance broker, where EXL has become their AI transformation partner. We are deploying our proprietary data extraction solution, XTRAKTO.AI, to eliminate manual ingestion of text and images. Hosting the solution on cloud allows the clients to leverage our AI accelerators and use the solution output without disrupting their existing operations. As a result, the clients can underwrite significant efficiency benefits at a rapid pace. Moreover, EXL is driving the end-to-end implementation, including the integration with existing downstream business workflows, enabling the clients to safely and seamlessly scale AI solutions across the enterprise, thereby driving significant productivity benefits in the downstream operations that are manual effort-intensive. Our solution also allows for the extraction of data that previously remained untapped and helps deliver deeper customer insights. Our operating model showed great resilience and stability amid the challenging circumstances of 2020. Two areas where we saw significant growth were our healthcare and our life insurance businesses. These businesses implemented highly complex and multi-geography engagements seamlessly in a virtual environment. In order to support our growth, we launched two new delivery centers in Colombia and in the Philippines. Going forward, we are well-positioned for healthy growth across all our businesses. The demand for our data-led digital solutions is strong, as evidenced by our pipeline, which has expanded significantly compared to last year. Moreover, we have added 45 new logos in 2020, a notable increase from 28 in 2019. With strong momentum built in our large deals pipeline, and by adding new marquee logos to our portfolio, we enter 2021 with great confidence. For 2021, our full-year revenue guidance is in the range of $1.04 billion-$1.06 billion, representing a 9%-11% increase year-over-year. This represents an accelerated growth of revenue for EXL, driven by an expanded demand for data-led solutions to solve high-value industry problems. We expect adjusted diluted EPS to be in the range of $3.90-$4.05, representing a 10%-15% increase over the prior year. This aligns with our focus on growing profits faster than revenue. We will continue to expand our margins by focusing on higher value business and improving productivity. However, we recognize that we are working through a period of heightened volatility that will continue to affect our clients and our own operations. The emergence of the new virus strains and the uneven vaccine rollout are creating uncertainties on the timeline for our larger scale return to office. When we do start that process, our new operating model is going to be a hybrid with some fraction of employees continuing to work from home. This requires us to invest in information and cybersecurity technologies and deploy virtual collaboration tools across the enterprise. We are also doubling down on talent acquisition to ensure that we have the right skill sets in place to keep growing our analytics business at double-digit growth rates. The explosion of demand in this market has made recruiting a challenge, but we continue to make strong progress. Last year caused its fair share of challenges, but it also opened up opportunities for companies to take a holistic look at strategic priorities. Clients have pulled forward their transformation agendas and are acting with urgency to be in sync with their customer base. They are embracing data-enabled insights to drive better decisions and embedding intelligence in operations to deliver superior outcomes. We will continue to be the indispensable partner for data-led businesses. With that, I will turn the call over to Maurizio. Thank you, Rohit, and thanks everyone for joining us this morning. I will provide insights into our financial performance for the fourth quarter and full year 2020, followed by our outlook for 2021. As Rohit mentioned, our quarter was better than expected, with revenue of $249 million, up 3.1% sequentially on a constant currency basis. Adjusted EPS was $1.14, exceeding the high end of our guidance by $0.05. All revenue growth numbers mentioned hereafter are on a constant currency basis. My discussion on year-over-year growth percentages or improvements will be excluding Health Integrated for 2019 for a true comparison with 2020 performance, unless mentioned otherwise. For the quarter, we generated revenue of $249 million, down 2% year-over-year. This includes one-time COVID-related pass-through revenue of $1.7 million. Revenue from our operations management business, as defined by three recordable segments, excluding analytics, was $150.9 million, down 5.8% year-over-year. Sequentially, from the third quarter, revenue was flat. Insurance generated revenue of $88.9 million, up 0.4% year-over-year. Compared to the third quarter of 2020, insurance revenue was up 1%. Healthcare reported revenue of $24.2 million, down 3.3% year-over-year. This decline was due to lower volumes from transitioning customers. Emerging reported revenue of $37.8 million, down 18.9% year-over-year due to the reduction in travel, transportation, and logistics volumes. The business has stabilized with revenue up 0.3% compared to the third quarter of this year. Analytics had revenue of $98.1 million, up 4.5% year-over-year. This growth was driven by higher volumes in the insurance and healthcare industry verticals. Sequentially, from the third quarter of this year, revenue was up 8.3%, indicating strong momentum and demand for our analytics services. Our SG&A expenses declined by 120 basis points year-over-year to 18.8% of revenue, driven by cost optimization initiatives and lower discretionary spending. Our adjusted operating margin for the quarter was 19.7%, up 550 basis points year-over-year, driven by lower spending due to cost control measures, lower infrastructure expenses, and reduced discretionary spending. Our adjusted EPS for the quarter was $1.14, up 44.3% year-over-year on a reported basis. Now, reviewing our full year 2020 performance. Our revenue for the year was $958.4 million, down 1.8% year-over-year. This decline was a result of COVID-related supply and demand constraints, primarily in the second quarter. Our adjusted operating margin for the year was 15.9%, up 130 basis points year-over-year, driven by cost optimization initiatives offset partially by lower revenues and COVID-related expenses. Our effective tax rate for the year was 24.8%, down 130 basis points from 2019. This decrease was driven mainly by a favorable change in the geographic profit mix, reduced corporate tax rate for certain Indian entities on election of the new tax regime, partially offset by lower tax incentives and higher state income tax rates in the U.S. Adjusted EPS for the year was $3.53, up 14.2% year-over-year on a reported basis. During this pandemic period, liquidity and cash conservation remains a key priority. We exited the year with a very strong balance sheet. Our cash and short-term investments at December 31st was $403 million, and our debt was $239 million for a net cash position of $164 million. We generated cash flow from operations in 2020 of $203 million, up 21% compared to $168 million in 2019. Our DSO at December 31st was 53 days, the lowest since 2015. This result reflects an effective implementation of our cash conservation strategy and efficient working capital management. During the year, we spent $42 million on capital expenditures as we continued to invest in the business for long-term growth. We repurchased 1.1 million shares at a cost of $78 million, which was an increase from the $40 million spent in 2019. Moving on to our guidance for 2021. The economic environment, while better, still remains unclear, and there are a number of factors that we may not be able to predict accurately, but we feel confident that our business model is resilient and agile, as demonstrated by our 2020 performance. We are providing revenue guidance for 2021 to be in the range of $1.04 billion-$1.06 billion. This represents a year-over-year growth of 9%-11% on a reported basis and 8%-10% on a constant currency basis. This guidance aligns to the medium-term revenue targets we disclosed in our Investor Day in November. We expect analytics to grow over 13% and operations management to grow in the range of 6%-8%. We expect a foreign exchange gain between $2 million and $3 million, net interest expense of $1 million-$2 million, and our effective tax rate to be in the range of 23.5%-24.5%. Based on the above, we expect our adjusted EPS to be in the range of $3.90-$4.05, up 10%-15% from the $3.53 we reported today for 2020. In terms of capital allocation, we continue to invest in analytics, digital solutions, and technology. We expect CapEx to be in the range of $35 million-$40 million. We anticipate to buy back our shares at a pace similar to what we did in 2020. Our hybrid operating model of work from home and office is very flexible. Currently, the majority of our employees continue to work from home. As the year progresses, we expect an increase in the staffing at our delivery centers while ensuring the health and safety of our staff. That said, we expect our margins to be higher in the first half of the year compared to the second half of the year. During the first half of the year, we will begin to incur increased costs due to the reinstatement of salary increments, employee promotions, and higher technology costs related to our hybrid operating model. In addition, during the second half of the year, we anticipate increased operating expenses on facilities, transportation, and travel as we start to return to a more normalized operating environment. In conclusion, we had a good year despite the challenges created by the pandemic and have demonstrated our ability to quickly adapt to market changes. Our business is solid and resilient, with strong visibility to drive shareholder value in 2021. Now, Rohit and I would be happy to take your questions. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Per the request of EXL, each participant is allowed only one primary question and one follow-up question. No questions will be allowed from the media. Please stand by for the first question. Your first question will come from Maggie Nolan with William Blair. Please proceed. Thank you. I wanted to talk about the 45 new logo additions. That's obviously quite a nice improvement over the prior year, as you pointed out. Did those favor any particular business segment or end markets? What were the circumstances that you would attribute the strong growth in that figure to? Thanks, Maggie. This is Rohit. A, we were definitely surprised with our ability to acquire new customers in a pretty challenging environment, all of which was pretty much a virtual environment. The 45 new logos that we acquired in 2020 are actually nicely spread both between operations management and analytics. They are very nicely spread across industry verticals and across business lines. For us, this represents a ground-up activity and demand that's taking place and our ability to offer the right kind of products and solutions to our customers and be able to bring them on as new clients. I think the exciting part is that some of these clients are real marquee names, and we are really, really proud of having won these accounts in this kind of an environment. Okay. Our next question comes from Bryan Bergin with Cowen. Please proceed. Hi, thank you. Hope you're all doing well. Wanted to ask at a high level first, client budget levels in 2021, can you comment on what you're seeing in overall budgets? Understanding there are still levels of macro uncertainty, are there any areas where projected client volumes that are being presented to you seem somewhat overly conservative? Thanks, Bryan. I think I'd break up that question into a couple of different parts. One is the operating business of our customers, and those operating businesses obviously have to do with the recovery of the economy and the different segments that have been impacted. We are seeing a good recovery rate take place out there across our client businesses except for travel, which continues to remain challenged at the operating level. In terms of other budgetary spending and allocation of expenses to enable digital transformation, there is a fair amount of acceleration of the digital transformation agenda, and therefore, we are seeing clients engage very actively in terms of driving business transformation of their core operating processes. They're also finding that in this kind of a virtual environment, the use of data becomes really, really critical, and therefore, being able to derive the right kind of insights from that data, make the right kind of product and service offering to their end customers, and to be able to improve customer experience, which has become paramount. Clients are actually spending heavily on data analytics. They're spending heavily on digital. They're spending heavily on the transformation to the cloud. All of these areas are receiving a lot of focus, and that fits in very well with our capabilities and how we are helping our clients modernize their infrastructure and their operating business processes. Okay. Just to follow up on healthcare. Healthcare Ops Management. I did see that contracted sequentially in the quarter, but your gross margin for that industry looked to be up a lot. Can you just talk about the underlying dynamics there in healthcare and how you're seeing that outlook here in 2021 as well? Sure. Healthcare, you're looking at only the operations management piece. Right. The comparison to the previous year needs to exclude out Health Integrated, because I believe Health Integrated was there in the previous year, and so you need to adjust for that. We did have a few clients kind of transition in the fourth quarter. When you take a look at the growth of our operations management business in healthcare year-over-year, so you look at it not from a lens of a quarter, but rather from an annual perspective, that growth rate was 19%, excluding Health Integrated. Actually, it's very healthy, growing nicely, and I think there will always be volatility on a quarter-on-quarter basis, but we think our healthcare business is on a strong trajectory. Bryan, just to add to the healthcare discussion on gross margin. If you look at the gross margin just sequentially, this year from Q2 onward, you see a nice healthy increase in our gross margin in healthcare, and that's really driven by us really getting some nice operational efficiencies on a quarter-to-quarter sequentially with the lowest point being in Q2 when really the pandemic hit. Okay. Thank you. Our next question will come from Moshe Katri with Wedbush Securities. Please proceed. Hey, thanks. Good morning. Just going back to the discussion that's related to the new logo adds that they're really impressive. Maybe you can talk a bit about the scenario where you will have to have some startup costs in terms of ramp. What does it mean to at least near-term margins? On top of that, obviously, if we're looking at the pre-pandemic cost base of the business, and then given the fact that the model has changed and given the fact that maybe part of your T&E expenses may not come back, what does it mean to your future margin trends? Kind of a general discussion on margins. Thanks. Sure, Moshe. Why don't I take that? When you see the number of new logos come on board, there is a certain amount of ramp-up cost for those logos, no different than any other period that we've been in. We incur those ramp-up costs, and we embed them into our overall cost base. We've already included that into our projections really going forward. The increase in cost is really comparable to prior periods, even though there's a little bit of an uptick in terms of the number of new logos. Just overall, within our guidance, we do continue to see a healthy gross margin going forward. You saw a nice uptick really driven by revenue in Q4. Going into 2021, you'll continue to see a healthy gross margin coming down a little bit, related to some of the cost items that I talked about within my script. Going forward, just overall, our gross margin will continue to be healthy going forward. Okay, understood. You mentioned comp increases that are being budgeted into the guidance. Maybe can you talk a bit about what sort of increases we're kind of looking at? Are we talking about maybe in the context of the pre-pandemic levels? Yeah. Starting in Q1, you're going to start to see some of our compensation costs come back into our P&L. Specifically in Q1, we'll see promotion expense starting to come through. In Q2, you're going to start to see salary increases start to come through. Those increases are very similar to pre-pandemic. Nothing significantly different, really getting back to a more normalized cost structure. Also rewarding our employees for really the hard work. Nothing different than what you've seen in the past pre-pandemic. All right. Final question, just structurally looking at the new logo wins, is there anything different in terms of how you're structuring some of these engagements, compared to where we were pre-pandemic? Thanks. So- Go ahead, Maurizio. I was going to say significantly different than from pre-pandemic. A lot of the engagements are still structured very similarly. All right. Thanks, guys. Your next question will come from Ashwin Shirvaikar with Citi. Please proceed. Hello, Ashwin, your line is open. Please proceed with your question. Your line may be muted at this time. Please proceed. We will move on to the next question. Your next question will be from David Grossman with Stifel. Please proceed. Thank you. Good morning. I wonder if we could just talk a little bit about the bookings activity and a little bit about how much of your revenue kind of guidance in 2021 is from new contract activity versus the installed base, and just how the cadence of that new contract activity is going to ramp over the course of the year. Sure, David. As I mentioned in my prepared remarks, A, the pipeline for our business is strong, and B, we have had a fair amount of conversion, so the bookings are also strong. We've got good visibility into our revenue number that we've guided to for 2021. Typically, in any given year for us, new clients contribute very little revenue, and typically they contribute less than 5% revenue for the year. The reason is they start off small, and then it expands over a period of time. The real growth in revenue from new clients typically comes in year two and year three. For 2021, we would expect that trajectory to be pretty much similar. The bulk of the growth will actually come from existing clients doing more work with us and the new clients contributing incrementally to that. We feel very comfortable with the level of bookings that we've got and the level of backlog that we've got in terms of our bookings. The pipeline certainly has expanded very significantly and is also moving much quicker. We are seeing decision-making actually take place at an accelerated pace. That's very positive. I see. A quick question on margins. I mean, Maurizio, you did a good job of explaining the cadence over the course of the year and the underlying drivers. I'm just curious, I know this is kind of a hard question to answer at this point in time, but as we look beyond this year, since it's going to be so noisy, including this change in work from home dynamic, how should we think about it at the EBIT line beyond this year? Is it going to be at least after 2021 and 2022 difficult to expand margins because of that dynamic of increasing expenses over the course of 2021? Or is the way that you're gearing expenses kind of set up in a way that you can still see margin expansion in 2022 despite this increase over the course of 2021? Yep. Very good question. I guess, in answering your question, I would go back to Investor Day, where we talked about increasing margins to between 16% and 17% by 2022. In a normalized environment, we do see the opportunity to get some higher margins in a normalized environment. If you go back to where we were in Q1, without any COVID expenses, we were right around 15.6%. What we're seeing today is what you talk about, is this hybrid whereby it's tough to get a handle on just exactly the margin, because you're not sure when we get back to a more normalized environment. We tried our best here to really forecast that out within our guidance to more the second half of the year. To answer your question, I think there is opportunity. We're really focused on getting to what we talked about in Investor Day by 2022. We'll take the next initiative to see where the next point will be for margins thereafter. Right now, we're really just focused on getting to that level for 2022 in a more normalized environment. Your next question will come from Puneet Jain with JPMorgan. Please proceed. Hey, thanks for taking my question. Can you provide more details on the transition clients within healthcare? As in, what was the impact in this quarter? Will this be Q4 specific? Who are those clients? Hi, Puneet. The transition of clients that took place in healthcare in Q4 was anticipated and planned. It just was planned for Q4 because the decisions were taken actually when COVID hit in Q2 of the year. These are normal timelines and windows that our clients need to provide for the transition and the ramp downs. There's nothing unusual about it. This is something which is planned. I don't think it impacts our business going forward. It is only going to impact Q4. Our expectation is that Q1 onwards, we'll see a full recovery of the operations management part of the healthcare business. Like I said, the operations management business for healthcare grew 19% year-over-year despite the pandemic in 2020. There are some new areas that we have signed up clients in healthcare in operations management, particularly around providers. That's one area that we did not focus on in the past. In 2020, there's been a huge constraint on the providers, and they've been looking at ways in which they can get more efficiency and productivity. We've been very successful in terms of being able to acquire several new providers that will provide us with the operations management revenue in 2021 and beyond. On the payer side, there's always going to be work that kind of fluctuates depending on how things go. As you know elective surgeries kind of declined very rapidly in 2020. You are going to see the impact of that. There's nothing unusual about Q4. It's something which is pretty much anticipated and planned for. Got it. How large is your travel vertical right now? How much of a headwind it was in fiscal 2020, and what do you expect from the vertical this year? Puneet, as you know, we don't break out our travel vertical completely. We have an emerging business that basically clubs all of these pieces together. The travel part for us is not very big. It was, I believe, about 3% or so in terms of total revenue. The work that we do really pertains to business travel, and business travel obviously has been very badly hit– Right. –in the COVID environment, and that's where the impact is. Got you. You expect it to remain weak this year? Well, as travel recovers, I think first we might see a recovery in personal travel and leisure travel and then I think business travel will recover thereafter. It will show up in analytics whenever it recovers for you? No, it shows up in our emerging business. Got you. Okay. Thank you. Your next question will come from Dave Koning with Baird. Please proceed. Oh, yeah. Hey, guys. Thanks. Nice job. Thank you, Dave. I guess first of all, just trying to get Q1 right, in terms, I guess, first of all, of revenue. You've by far the toughest comp in Q1. To me, it kind of looks like Q1 might be low single digit growth, or maybe up a couple percent sequentially. That would be kind of a normal pattern. Then the rest of the year is probably over 10% growth to kind of get you the full year, but just trying to get that quarter right on revenue. Right. If you take Q4's revenue and you model out similar to what we've done in the past, going from Q4 to Q1, you'll get that sequential growth that you just talked about. Then you'll see a typical pattern of what we've done in the past with a stronger quarter in Q3 versus the other quarters. When you go out and you model out your revenue, you're going to see a similar pattern this year from a more normalized year, not 2020. Yeah. Okay. That totally makes sense looking at it sequentially like that. That's good. Margins, I know you spent a lot of time on that already, but it sounds like the early part of the year, like you said, first half stronger than second half. Is it fair to think of it looked like full year to us looked like somewhere in the mid-16%, maybe a little better than that, actually. Is it kind of 17% in the first half, and is that pretty stable, or is Q1 and Q2 different, and then the back half would be more like 16%? Is that just how to think about it? Yes. You've done the math already. On our guidance. Your 16% range, if you do the math with what I just talked about, you're going to get that mid-16% range. Obviously, what you just talked about, the first half is going to be slightly higher. Inevitably, if you're at the mid-16% range, you're going to be somewhere in the 17% range in the first half of the year based on the guidance and your model calculation. Okay. I just want to make sure, though, that Q1 and Q2 aren't dramatically different. I just don't want to be way too high on Q1 or anything, but are both quarters pretty similar for Q1 and Q2? They will be comparable. They won't be exact, but they'll be comparable. Q2, you've got to factor in the salary increments that take place, and therefore that will impact the margins in Q2. Got you. Great. Yeah, great point. Thanks, guys. Good job. Thank you. Your next question will come from Vincent Colicchio with Barrington Research. Please proceed. Yeah. Rohit, I'm curious actually on the 15 new logos added this quarter. To what extent do you think some of them may be strategic longer term for the company? Sure, Vincent. We are actually very pleased with the profile of the 15 new logos that we added, and it is pretty much balanced between large and strategic deals that we would sign and normal businesses where we might do proof of concepts and where we might do work to be able to demonstrate our capabilities to our clients. It's got a fair mix of that. We've already started to engage with these clients. Some of the revenue will kick in fairly quickly. I think the advantage of working in a virtual world is some of these ramp-ups can take place much quicker. We are actually quite happy with the kind and the complexion of that 15 new clients that we won into Q4. I'm curious, are you seeing any clients as this pandemic wears on for some time now, looking for maybe price relief from at-home work? That's an interesting question that often does come up, and let me just try and explain the whole thing to you. While working from home reduces some discretionary costs pertaining to transportation and facility operating costs, certainly travel and entertainment costs are down. There are increased costs that we have to incur on account of information security, collaboration tools, and some of the technologies that we are putting into place to be able to make sure that while our employees are working from home, this provides a safe and secure working environment. As we kind of factor both of these things in, as well as we factor in that we need to have flexibility to move our people from a work from home model to a work from office model, and there are costs incurred as those transitions take place one way or the other, and the frequency of that is unknown at this point of time. The cost equation basically is a wash. Yeah. I think the conversation that we are having with our clients right now is what kind of permanent business operating model do our clients want, and what is it that they'd like us to structure for them? Based on that operating model and the cost associated with that, we would have a conversation about whether the pricing needs to be increased or decreased or maintained exactly where it is. On balance, there isn't much room for changing the cost structure given some of these investments that we'll be making. Thank you, and have a nice quarter. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. Per the request of EXL, you are allowed one primary question and one follow-up question. Your next question in queue is a follow-up from Maggie Nolan with William Blair. Please proceed. Thank you. Just one more for me on the expansion of the analytics services within financial services clients. How did those client relationships and the type of work progress, and do you feel this is repeatable in other clients? Thanks, Maggie. Financial services certainly is seeing a fair amount of volume of activity that's taking place. There's also more work that needs to be done from a risk management standpoint. As well as the customer relationships are starting to primarily a digital relationship. Actually, the use of data and the use of analytics in the banking and financial services world is very strong. Therefore, we see the growth in that industry vertical continue to take place as we go forward into 2021. We are very well-positioned on data and data analytics, and that is something which I think is shining through in terms of our business model and our operating financial results. Thank you very much. Thank you, Maggie. Your next question and final question comes from Ashwin Shirvaikar with Citi. Please proceed. Thank you. Hi, Rohit. Hi, Maurizio. Sorry, could not ask when I was called last time. I was taking a call from my manager. On the bright side, I've been approved for head count, so if anyone on the call wants to work for Citi, that's out there. Hey, one question that wasn't really asked, M&A. How are you guys feeling now about stepping back in for M&A? Can you talk a little bit about the processes that have been put in place from a diligence perspective since the last one, what might be possible targets, and so on? Sure, Ashwin. Let me talk a little bit about what we have been doing on M&A. The pipeline on M&A has been very significant, and there's been a lot of opportunity for us to look at different companies that have come to market. I would say that the valuations are very high right now, as you can imagine, especially in the areas that we are interested in data analytics, digital. When we go through our process on evaluating those opportunities, we're really looking at two specific areas. One is, what is our return going forward? What is our ROIC going forward? That's really important for us to ensure that we can see the visibility and are confident with that return on the capital going forward. That's become a very big focus for us internally, not just for M&A, but also for the overall business and our business segments. We have a very sharp lens now on ROIC, which is also in our M&A process. Secondly, it has to be a very strong strategic fit for us going forward, whereby it brings either a capability or a product or service that we can bundle with the rest of our services and really drive value going forward to enhance the overall business. As we go through our process, those are kind of the two big areas that we are focusing on. We continue to look at opportunities that come in front of us. The hurdle is a little bit high for us, especially with those two items that I just talked about. We are very active in looking at M&A opportunities, and look forward to the next one that we will be doing. Understood. Thank you for that. In answer to a previous question on work from home, I guess you guys talked about sort of the cost offsets. From a strategic standpoint, do you want to continue to offer work from home as a choice down the road? What sort of demand might you see now that, I guess, clients have got to become comfortable a year down with that as an option? Could you talk about that? Sure, Ashwin. I think work from home is likely to continue to be a permanent option that I think our clients will choose to exercise, and we would very much welcome the opportunity to offer that to them. I think it's great for our employees, it's great for our clients, and it actually works really well. The expectation that we have is that we basically get into a hybrid operating model, where some part of our workforce will permanently work from home, some part of our workforce will permanently work from office, but there'll be a lot of fluidity and flexibility in terms of people who are working from home that might come to work in the office for a few days in a week or a few days in a month. We would have the ability to physically interact with them and be there and have the social interactions there. I think our expectation at this point of time is that we're likely to end somewhere closer to about 30%-40% of the work being done from a work-from-home business model, and the balance work being done from the office. Keep in mind one thing, that in the office, we do need to de-densify the facility operating structure because we do need to space out the workspaces and have people separated out, so that we can make sure that they are safe and healthy and secure. A number of these elements are going to change, and they're going to evolve as we go along. In essence, I think a hybrid operating model seems to be what we would all evolve towards. Some proportion working from home, maybe 30%- 40%, and the balance working from the office. Certainly, there being times when we will have people come into the office or come in and meet with their colleagues and meet with their supervisors so that we can have an interaction which is in a live physical format. Got it. Wow, 30%- 40% even down the road. That's quite interesting. Thank you. At this time, there are no further questions in queue. I would now like to turn the call back over to Rohit for closing remarks at this time. Thank you. I just want to thank everybody for attending our earnings call. We are actually in a very fortunate situation. Last year, which could have been a really challenging year, we ended up really doing well and coming out ahead. The market environment seems to have shifted in our favor, and the services, solutions, and capabilities that we have are resonating with what clients need at this point of time. We are excited about the possibilities in 2021. As you all know, we all focused in on getting our employees safe and secure, making sure that our business relationships were resilient, and we could continue to provide services to our clients and focus in on getting our revenue right, and then focus on margins, and then focus in on capital. That's what we are continuing to do, and we look forward to a great 2021, and we'll update you at our first quarter earnings call at the end of April. Thank you very much. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.