Good day, and thank you for standing by. Welcome to the first quarter 2022 ExlService Holdings, Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's 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. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker for today, Mr. Steven Barlow, Vice President of Investor Relations. Please go ahead, sir. Thank you, Erica. Good morning, everyone. Thanks for joining us today for EXL's first quarter 2022 financial results conference call. I'm Steve Barlow, Vice President of Investor Relations. On the call today are Rohit Kapoor, our Vice Chairman and Chief Executive Officer, and Maurizio Nicolelli, our Chief Financial Officer. We hope you had an opportunity to review our Q1 2022 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 on 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 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 on the investor fact sheet. I'll now turn the call over to Rohit Kapoor, our Chief Executive Officer. Rohit? Thank you, Steve. Good morning, everyone. Welcome to our Q1 2022 earnings call. I hope all of you and your families are safe and healthy. I'm delighted to report that EXL had a strong start to the year. In terms of revenue and adjusted EPS, we outperformed our expectations for the quarter. Our first quarter revenue was $329.2 million, up 11.4% from the previous quarter and up 25.9% year-over-year. For the quarter, adjusted EPS was $1.42 per share, up 20.3% year-over-year. Our analytics segment had another excellent quarter, with revenue of $149 million, up 17.8% sequentially and 45.7% year-over-year. Analytics now accounts for 45% of our total revenue. The maturity, scale, and expertise of our data analytics business has differentiated us from competition and accelerated our overall growth. Our digital operations and solutions business also saw strong growth this quarter, with revenue of $180.2 million, up 6.6% quarter-over-quarter and up 13.2% year-over-year. This was driven primarily by double-digit revenue growth in our insurance and emerging segments. We've been able to drive consistent double-digit growth rates across our core industry verticals by, number one, delivering larger enterprise-wide digital transformation engagements, and number two, deploying new scalable solutions that are being leveraged across multiple clients and industries. I would like to share a few examples that illustrate these two aspects of our revenue growth acceleration. In our data analytics business, we recently added a strategic account from the financial services industry, which turned to EXL for our industry-leading strength in customer analytics, data engineering, and data management. This client, one of the largest investment management firms in the U.S., initiated its relationship with us across the entire analytics value chain. We are leveraging our technology and industry expertise to extract insight from this client's structured and unstructured datasets. This is allowing the client to deliver better consumer experiences across digital and non-digital channels, driving both higher customer engagement and building larger customer lifetime value. This win is also significant in terms of the scope and scale of the project. While historically, we would typically start a new client relationship with annualized revenue of $250,000-$500,000, we are now signing larger engagements with annualized revenue of $1 million or higher. In this particular client example, our annualized revenue for the first year is well above $5 million. It is a prime example of how clients are increasingly turning to EXL to drive bigger enterprise-wide initiatives, and our leadership in data analytics is now clearly well-established. An example of a new engagement that allows us to scale our offerings is our recent work with a leading credit union in the U.S. This client wanted to improve customer experience across multiple lending products by reducing the time to underwrite and accelerate the pace of customer onboarding. This transformation included challenges such as legacy lending technologies, lack of personalization in the underwriting process, and complex and manual onboarding workflows that slowed the customer acquisition journey. As their strategic digital partner, EXL designed a next-generation digital lending platform that allows faster response time and much more personalized offers based on real-time customer data. By combining our AI-powered data extraction capabilities and our comprehensive customer analytics, we were able to automate underlying operations and decisions. This helped our client immediately offer the right lending product to the right customer at the right time. This new digital lending platform is fully scalable within our existing client by expanding across multiple product lines and can now be deployed in a plug-and-play fashion across our entire client base. This one EXL approach of leveraging data, analytics, digital, and cloud capabilities to create scalable solutions is also helping us secure more wins in our emerging business segment. Each quarter, we have been increasing the depth and breadth of our client offerings in this vertical while adding a number of new logos. Our insurance business has become a prime example of our continued evolution as we become the partner of choice for large-scale enterprise transformation projects. In fact, we have recently announced a total of major industry recognitions that showcase this leadership capability. We were ranked second overall in the HFS Top 10 for Insurance Services, and in this year's ISG Provider Lens for Insurance BPO, EXL is a leader in all categories in the U.S. and Australia, including property and casualty, life, and third-party administration. For the third straight year, EXL earned the top spot in Everest Group's PEAK Matrix assessment for property and casualty insurance, recognized as both a leader and a star performer. The Everest analysts note our strength as a digital transformation partner, combined with our strong foundational understanding of the insurance domain and operations. In December of last year, we announced the acquisition of Clairvoyant, a global data, AI, and cloud services company. The acquisition adds to our expertise and depth in data engineering, design capabilities, data management, cloud enablement, managed services, and data security. The addition of Clairvoyant's capabilities and team have strengthened our value proposition for our clients. We have significantly added to our talent base and are enabling a more integrated set of services for our clients to truly unlock the potential of their data. Over the course of the last quarter, our combined team has introduced new capabilities to our existing customers and prospects. We are thrilled with the response and adoption of our expanded value proposition. We have successfully started joint engagements with several of our large strategic customers across all verticals. This has significantly added to the overall growth potential for our analytics business. We are pleased that the Clairvoyant acquisition is meeting both our revenue and profitability expectations. The demand for skilled talent in our space, particularly around digital, cloud, data, and analytics-oriented skill sets, has significantly increased in the past few months. Talent management and wage inflation is a top priority that we are managing at EXL. We have adopted a comprehensive and holistic strategy to ensure employee well-being from a 360-degree perspective. First, our culture is a key driver that helps us collaborate as a team and brings out the best in our people. Our employees cherish the strong growth, collegial environment, entrepreneurial work culture, and the caring manner in which we engage with each other. This includes a continued focus on career pathing and growing and developing our talent organically. EXL has a long history of promoting from within, and our strong upskilling programs have been embraced widely. In 2021, our employees completed almost 571,000 hours of training to help them advance in their careers. Second, we have benchmarked our compensation and benefits to be competitive in the marketplace. This allows us to retain and attract the best possible talent. Over the last two years, we have chosen to be flexible in terms of our business operating model. We have expanded hybrid work models to best align the needs of our employees with our client requirements, compliance with regulatory policies, and create an environment to collaborate and innovate together. We have significantly accelerated our focus on employee health and well-being with a focus on both physical and mental wellness. Recruiting from outside EXL is also important as we are growing at a fast pace. Our growth provides opportunities for advancement and new challenges for our employees. The kind of work we do for our clients is very stimulating for our employees. It helps our employees learn, grow, and get exposed to cutting-edge technologies and path-breaking business models. In analytics, we continue to be a successful recruiter at the world's leading universities and technical schools. We have been a top recruiter for analytical talent for over 15 years. In summary, our people are our most important asset. We will continue to endeavor to make EXL a preferred destination for employees to build a rewarding career. This is an incredibly exciting time for EXL. While we are closely monitoring the volatile economic and geopolitical environment, we are enormously confident in our agility and ability to navigate changes in the marketplace. We are capitalizing on our data-driven solutions and strategic investments that have helped us create a great deal of momentum over the past several quarters. We are well-prepared to seize the market opportunity and create meaningful value for our clients. I will now invite Maurizio to highlight our Q1 financial performance and 2022 guidance. Thank you, Rohit, and thanks, everyone, for joining us this morning. I will provide insights into our financial performance for the first quarter, followed by our revised outlook for 2022. Our quarter was better than expected, with revenue of $329.2 million, up 22.6% year-over-year and 8.6% sequentially on an organic constant currency basis. Adjusted EPS was $1.42. All revenue growth numbers mentioned hereafter are on an organic constant currency basis. Revenue from our digital operations and solutions businesses, as defined by three reportable segments excluding analytics, was $180.2 million, up 14% year-over-year. Sequentially from the fourth quarter, revenue was up 6.8%. Insurance generated revenue of $103.3 million, up 13.9% year-over-year, driven by expansion in existing client relationships in life and annuities, higher volumes in audit and survey business lines, and new client wins in 2021. The insurance vertical, consisting of both our digital operations and solutions and analytics businesses, grew 15.1% year-over-year. Emerging reported revenue of $50.7 million, up 36.2% year-over-year. This growth was driven by new client wins in 2021 and higher volumes in our travel, transportation, and logistics businesses. The emerging vertical, consisting of both our digital operations and solutions and analytics businesses, grew 42% year-over-year. Healthcare reported revenue of $26.2 million, down 13.5% year-over-year due to lower volumes in our clinical services business due to a transitioning client. The healthcare vertical, consisting of digital operations and solutions and analytics businesses, grew 11.7% year-over-year. Analytics had revenue of $149 million, up 36% year-over-year on an organic constant currency basis. Clairvoyant contributed $10.2 million of revenue. Including Clairvoyant, analytics grew 45.7% year-over-year on a reported basis. This growth was driven by increased volumes in banking and financial services, payment integrity, direct marketing, and new client wins in 2021. Sequentially, from the fourth quarter of 2021, organic constant currency revenue was up 11.1%, indicating continued strong momentum and demand for our analytics services. Our SG&A expenses increased by 80 basis points year-over-year to 19.5% of revenue, driven by investment in front-end sales and digital capabilities. Our adjusted operating margin for the quarter was 18.2%, down 200 basis points year-over-year due to investments needed in ramping up new client wins in 2021 and investments in front-end sales and digital capabilities. Sequentially, our adjusted operating margin increased by 120 basis points, driven by lower marketing expenses and operating leverage. Our effective tax rate for the quarter was 23.9%, down 30 basis points year-over-year. This decrease was driven mainly by lower taxes in certain U.S. jurisdictions. Our adjusted EPS for the quarter was $1.42, up 20.3% year-over-year on a reported basis. Our balance sheet remains strong. Our cash and short-term investments at March 31 was $269 million, and our debt was $295 million, for a net debt position of $26 million. Subsequent to the close of the quarter, we entered into an amended five-year credit agreement totaling $400 million with an accordion feature which allows EXL to borrow an additional $200 million. Our first quarter cash flow from operations was an outflow of $26.9 million, compared to an inflow of $15.2 million in the first quarter of 2021. This is due to the timing of client receivable collections, which were received in early April, and higher bonus payouts due to our strong financial performance in 2021. During the quarter, we repurchased 221,000 shares at an average price of $127, totaling $28 million. In addition, we spent $16 million on capital expenditures as we continued to invest in the business for the long-term growth. Based on our first quarter performance and current growth visibility for the rest of the year in all our verticals, we are increasing our guidance for 2022. First quarter revenue includes 2% of one-time revenue that may not occur in the subsequent quarters. Our revised 2022 guidance is as follows. Revenue is expected to be in the range of $1.315 billion-$1.335 billion. This represents a year-over-year growth rate of 17%-19% on a reported basis and 14%-16% on an organic constant currency basis. This is an increase of $30 million at the midpoint from the previous guidance of $1.28 billion-$1.31 billion. Our guidance includes $40-$45 million of revenue from Clairvoyant, which is in line with our previous guidance. Our guidance includes higher salary expenses in certain areas such as analytics, AI, and cloud compared to 2021. We have started our return to the office in March in a phased manner and expect the percentage of our employees working from the office to rise over the course of the year. We will have a hybrid model of working going forward. We expect approximately two-thirds of our employees to work either full-time or part-time from the office and one-third to work remotely. We expect a foreign exchange gain between $3 million and $4 million, net interest income approximately $1 million, and our effective tax rate to be in the range of 23%-25%. In the Philippines, where we have approximately 8,000 employees, the government has issued regulations mandating the percentage of employees required to return to the office as of April 1st. There is significant uncertainty around the definition of the regulations and the implications on local tax rates. While we are working to comply with these regulations and manage our workforce, any additional one-time tax expense in the Philippines has not been included in our guidance. Based on the above, we expect our adjusted EPS to be in the range of $5.40-$5.65, up 12%-17% from the $4.83 we reported in 2021. In terms of capital allocation, we continue to look at reasonably priced tuck-in acquisitions with revenue growth rates similar to our current business in the areas of analytics, digital capabilities, and solutions in insurance and healthcare. In addition, we will continue to spend on internally developed capabilities and expect capital expenditures to be in the range of $40 million-$45 million. We anticipate our buyback program will continue at a pace similar to 2021. Looking at the second quarter, we expect the revenue to be similar to the first quarter results due to one-time revenue in the first three months of 2022. Adjusted EPS in the second quarter will be lower than the first quarter due to annual wage increments starting April 1st, higher return to office expenses as we gradually return to the office, investments in digital transformations, and acquisition-related costs. In conclusion, we have started 2022 with very good momentum. Our pipeline of opportunities continues to grow with larger deal sizes, expansions of work with our long-term clients and new client wins. In addition, we remain vigilant on our cost structure as the business grows while addressing market volatility. Based on the visibility we have for the rest of the year, we are confident in our 2022 growth, which will enable us to drive shareholder value. Now, Rohit and I would be happy to take your questions. At this time, I would like to remind everyone in order to ask a question, you may press star one on your telephone. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Bryan Bergin from Cowen. Your line is open. Hi, good morning. Thank you. I'll start on the outlook here. You had a strong 1Q beat here across the board, and you raised the fiscal 2022 revenue outlook on top of that 1Q outperformance. Maurizio, I know you mentioned your 1Q revenue includes, I think, 2% that may not occur. Can you dig into that more? What is that? And then the EPS looks like it shifted around a little bit within the year. Can you talk about any notable changes in the margin expectations there that would differ, you know, versus three months ago? Just curious if there's something that notably changed or if it's more about, you know, this is 1Q kinda early in the year dynamic that drove your approach there. Yeah, sure. Sure, Bryan. Your first question on the 2% one-time revenue. We did get some unexpected higher volumes in the first quarter in both our digital operations and solutions and analytics businesses that we did not anticipate or expect. We're not foreseeing those volumes going forward. We've categorized them as one-time and don't foresee that really going forward. That's why we wanted to highlight that to everyone on this call. In terms of our EPS guidance, it's still very early in the year. I mean, we're only three months into 2022. There is a certain level of uncertainty into the rest of the year. You know, we are seeing a certain amount of wage inflation that we're managing in some critical areas of our business, and we wanna make sure that we properly forecast for that. We do see a certain amount of attrition in certain pieces of our workforce, particularly in the Philippines. Again, we're starting to return to the office, and that's gonna start to increase our expense throughout the year. To a certain extent, you know, we have raised our EPS guidance. It's still early in the year, so you could categorize it as being conservative. You know, we'll adjust our guidance as we go forward as we get more visibility. Okay. Okay, that makes sense. Just to follow up on the workforce here. You did have healthy additions to headcount in spite of that attrition spiking. Can you just dig in a little bit more? Is it any more than just in the Philippines where you're seeing that occur? Then just your comfort levels as far as you know, where in the workforce that's occurring and just plans for remediation. Sure, Bryan. You know, we've added a significant amount of employees in the first quarter of 2022, and that's largely being driven by the growth that we are seeing from our existing clients and the new clients that we've had. We did have a higher attrition rate in the first quarter of 2022, and that was principally driven by attrition that went up in the Philippines. I think it went up pretty much for the entire industry in the Philippines. There's a considerable amount of uncertainty out there that drove that attrition rate up there. We feel confident in our ability to recruit, onboard, and manage service delivery for our clients and execute to the business that we have won. We've got a very strong brand positioning among our employee base and in the market for us to be able to attract and retain the talent. This is something which, you know, is a core part of our business, and we invest very significantly in this area, and we feel confident in our ability to continue to add and build and grow our business. Okay, thank you. Your next question comes from the line of Maggie Nolan from William Blair. Your line is open. Hi, thank you. Can you talk a little bit about your top account dynamics, what you're seeing amongst kind of the top couple in those buckets that you break out? Sure, Maggie. You know, our top accounts are actually continuing to diversify and kind of, you know, our customer concentration out there continues to kind of come down as we grow our business with existing clients and we add new client relationships. We've got really strong client relationships that you know are reflected in the growth rate of our existing strategic accounts. I think our top you know 10 accounts continue to grow very, very nicely. They grew very sharply in 2021, and we think we will continue to grow that in 2022 as well. The number of new service offerings and the share of wallet that we can take with these clients c ontinues to remain a huge opportunity for us. Our penetration, you know, with these clients still is relatively low, and therefore, our ability to continue to grow and expand with these clients is very high. As we, you know, engage with them in different buying centers, in different geographies, in different product lines, we believe that we can continue to grow with our existing clients and with our top clients in a meaningful way. Okay. Thank you. Can you provide a little more detail on the circumstances of the transitioning healthcare client in the ops business and, you know, what that transition timeline looks like and when you expect the impact to annualize? Sure. This is something which we had disclosed previously as well. This is, you know, a client that wanted to transition some of the work into a captive, you know, format. That's something which, you know, we are helping that client in terms of that transition. We've got a terrific relationship with that client where we are, you know, helping them on the clinical side in terms of the transition and building up our capabilities on the analytics side where we can, you know, assist them. This type of transition happens pretty much all the time. It's something which is pretty normal in our business. The key thing to take a look at is the combined growth rate of the analytics business of the healthcare business. If you see, the combined growth rate of the healthcare business, that's very healthy in double digits despite the transition. We're actually very happy with how the overall portfolio is performing. Thank you. Your next question comes from the line of Ashwin Shirvaikar from Citibank. Your line is open. Thank you. Hey, yeah, good results. I'd like to start asking about the top line. In your prepared remarks, you've mentioned, you know, the trend towards larger contracts. The example given was specifically for analytics, but I just wanna broaden out and say, are you seeing larger contracts across the board? Or is it still more sporadic? And then on the ramping of those contracts, is that also happening faster? And does that, you know, down the road just gonna lead to a sustainably higher growth rate? Thanks, Ashwin. Yes, you know, we are seeing a very strong demand environment in the marketplace right now. We're seeing large contracts not only in our data analytics business but also in our digital operations and digital solutions business. That's because clients are engaging with us much more holistically. They're looking at enterprise-wide processes that they want us to run and manage. That's been very helpful. We're also seeing the speed of decision-making accelerate. In the past, you know, the sales cycle might have typically been a 12- to 18-month sales cycle for a digital operations deal. Today, it's about six months in terms of that speed. Frankly, larger contracts, faster decision-making, many more services that we can provide to our clients, and it's a very demand-rich target environment right now. Got it. On the Philippines, with regards to the sort of the regulatory uncertainty, let's just call it that, with return to office, you know, how do you see that playing out? I know it's still early days, but is there sort of a categorization in the type of employees that are perhaps saying no to coming back? You know, are there longer-term strategic options with regards to moving the work out of country? Could you just broaden out that discussion and talk about it? Sure. You know, look, I think in the Philippines the regulatory authorities have asked for all employees to be brought back to the office, you know, 100%. That change was effective 1st of April. However, the way in which they are defining that is something which, you know, is getting clarified in terms of how many days in a month does an employee need to be in the office, what categorizes a person who's working from the office versus working from home, versus, you know, working remotely. I think this will all get stabilized, and it'll get clarified over the next few months. There are also, you know, presidential elections that are taking place in the Philippines in the next quarter or so. It's likely that, you know, the alignment with the new administration will sort itself out. As far as the employees are concerned, we want to make sure that we remain flexible to meet the needs of our employees, but we also want to balance it out with the needs of our clients, with the regulatory requirements, and an ability for us to get together to collaborate and to innovate. It's really balancing out the employee flexibility, the customer requirement, the regulatory regime in a particular jurisdiction, and our overall thesis around coming together and collaborating and innovating. We're gonna work towards that with an optimal mix of that. I'm sure over the next few months, this will stabilize. Right. Just a clarification, the other part of that question was, is it voice-based as well as healthcare? Is that a higher focus from the Philippines, or is that not the case? Yes, that's the case. We do have clinical resources in the Philippines, which you know have qualified nurses and U.S.-licensed and registered nurses in the Philippines. We do have voice work that we do in the Philippines. But keep in mind, a lot of the work that we do out there is now completely integrated with our digital capabilities. So it's you know it's really high-end complex work that we do that leverages a lot of data analytics, digital into these operations. Good point. Thank you. Your next question comes from the line of Puneet Jain from J.P. Morgan. Your line is open. Hey, thanks for taking my question. Rohit, it was nice to know that you are seeing larger size deals in analytics. But how defensive that business can be in an event of a macro slowdown, like, some of the work that's been committed, the new contracts, how defensive some of that work can be if there is a macro slowdown? If you can also talk about impact on digital operations in an event of a macro slowdown. Sure, Puneet. You know, as we have consistently said for several years now, in an environment where there is high growth in the economy, our services and solutions resonate very strongly with our clients because they need, you know, our partnership to help them support that growth. In an environment which is a slowdown or a recessionary environment, actually the need to optimize your cost structure and focus and leverage on data to really spend the money that any organization is investing in the most optimal manner, again, requires our services. We feel that, you know, we've been able to demonstrate this across multiple types of environment, economic environment cycles. The analytics business will actually... The importance of that only increases, if, you know, there is a slowdown because every dollar has to be spent, to be able to generate that return. Everything is focused in on a return on investment for our clients. As we drive more and more and better and better business outcomes for them, I think the need for our services becomes even more strategic. Frankly, whether it's a growth environment or an economic slowdown and a recessionary environment, we think our business services will continue to, you know, be important to our clients. Understood. On wage inflation, can you size, like, the level of wage inflation you are seeing? I know you talked about you're seeing high wage inflation in analytics, digital cloud areas. Can you talk about how much wage inflation there is compared to last year? Is there any difference in wage inflation across different regions? This Philippines issue, is this mostly about taxes or attrition, or are you also seeing higher wage inflation there? Right. The wage inflation, Puneet, as you know, is a very complex topic because it varies by geography, it varies by level, it varies by skill set. Because we add so many new employees, it also varies by tenure of the employees. It's a very complicated kind of an algorithm that's being put to work. What we can tell you is that we factored in a much higher salary increment this year in 2022 as compared to previous year, and that's very meaningful and very significant. It definitely is much more in the areas where there is a scarcity of talent, which is all around analytics, digital and cloud and technology. Those are scarce resources definitely, you know, are areas where we are seeing the market compensation go up more significantly. In order to remain competitive, we are matching those kinds of increments out there. The wage inflation in general that we've got, we now have a salary increment cycle, which typically is on 1st of April. Then we also have another increment cycle for our senior employees, which is typically on 1st of October. That's how it kind of gets factored in for us, you know, through the year. Understood. Thank you. Your next question comes from the line of Mayank Tandon from Needham & Company. Your line is open. Yeah. Good morning. This is actually Kyle Peterson on from Mayank. Thanks for taking the questions. I just wanna touch a little bit about demand. It seems like the growth outlook, you know, has been, you know, really solid, and the guidance for the year seems like you're running above your kinda updated medium-term targets on growth for the coming year. What do you think is the biggest factor driving that? Is that just the demand environment is healthier than what you would consider in more of that medium-term range or are you guys noticing share gains? Or what do you think is the biggest driver being the stronger organic growth? Yeah. I think there are two fundamental factors. One, there is definitely a change in the marketplace, which we have spoken about before. The consumer has adopted digital in a much more holistic fashion and therefore all companies are trying to embrace digital transformation and use data analytics in a much more meaningful way, and that's driving, you know, the demand up. The second is, the positioning of our company, which has been strategically and thoughtfully and deliberately put together over the past several years, is meant to address the most, strategic areas of our clients' requirements. We believe that our focus on data is resonating really, really strongly in the marketplace. Every single client is looking to create value out of data, and they find the partnership with EXL to be very, very strategic and very helpful in their endeavors in terms of providing the right kind of an experience to their end consumers and being able to optimize on pricing, on underwriting, on customer acquisition, on settlement of claims across a multiple you know set of activities. It seems to be resonating very broadly. I would say both the demand the pull factor, which is driven by the consumer changing its behavior and clients you know wanting to adopt digital transformation much more aggressively and much more quickly, and two, our positioning and our capability set, which seems to resonate with the highest growth areas in the marketplace. Makes sense. It's helpful. Just a quick follow-up on M&A. You guys kinda mentioned that you're still, like, on the lookout for kinda reasonably priced tuck-in deals. Have you noticed with the recent market volatility, have valuations gotten a little more reasonable, where it's probably a little easier to find attractive targets at good prices? Or has some of the recent market volatility not really trickled down to some of the private market and M&A valuations? I would categorize the M&A market as still pretty frothy. I think valuations are still fairly high right now. You know, we're active on a weekly basis looking at many different opportunities that come our way. We listed out those areas that we have been looking at, specifically, you know, analytics. It's within digital capabilities, you know, and solutions within insurance and healthcare. You know, we haven't really seen too much of a change in terms of valuations. You know, again, it's similar to the Clairvoyant transaction that we did. It needs to be very strategic, and it needs to be at a reasonable price for us to move forward on M&A, which, you know, will become a bigger portion of our growth story going forward. Yes. Good quarter. Your next question comes from the line of Moshe Katri from Wedbush Securities. Your line is open. Yeah, thanks. Two questions, one specific and the other one is kind of more big picture. Did you kind of mention, spoke a bit about guidance for margins for this calendar year? I'm not sure if you'd, you know, maybe talk about levels versus a year ago. Then, big picture, going back to the question about visibility and a potential economic slowdown. In the past, if I remember correctly, budgets for, you know, for BPO and some of the work that you guys were doing were not necessarily coming out of IT budgets. They were coming out of operational budgets, and these tend to be a bit more defensive. Has that changed in the past few years in terms of the types of people that you're selling to? Any color there will be helpful. Thanks. Why don't I take the first question that you had on margins? We gave medium-term guidance on margins of 17%-18% for the next two years. You know, when you look at our guidance that we gave, we don't give specific guidance for 2022 on margins. When you backtrack kind of the calculation from EPS back to revenue, you'll get to margins right around the low 18% range, which is consistent with the guidance that we gave for the year back in February. You know, we feel fairly comfortable with that for the year. You know, I get back to, there are a number of uncertainties in terms of costs during 2022. You know, at that range, you know, we feel, you know, fairly comfortable, at a minimum for 2022. You know, in response to the broader question and the visibility and the defensiveness of our business mix, Moshe, I think, you know, the primary buyer for us continues to remain the chief operating officer and the business head. Frankly, IT budgets are being folded in alongside with the business. You know, it's become part and parcel of running and managing the business. We do think the digital operations and digital solutions business will remain very defensive, you know, even if there is a slowdown. Again, the data analytics part of our business is a defensive business because most of the work that we do out there is all around helping clients do customer acquisition and customer management, do pricing and risk management, and do operational analytics and optimize their cost structure. Frankly, all of these are ongoing activities that are gonna be needed even in the event of a slowdown. Just the last one here. You know, during the last cycle, when we got into a slowdown, we did get an impact on sales cycles, right? These typically get much longer, when we go through a slowdown. Is that the right way of looking at it? Yes. I think that's correct. You might see the sales cycle kind of increase in timeline, but I think in terms of existing clients wanting to do more business, that's probably gonna, you know, continue, and it's probably gonna accelerate the lifetime. Understood. Thanks. Helpful. Thank you. Again, if you would like to ask a question, please press star one on your telephone keypad. Again, that's star one on your telephone keypad. Your next question comes from the line of Vince Colicchio. Your line is open. Yeah. Rohit, can you give us some color on the new logos they had in the quarter? If you had mentioned that you know new deals are seeing a stronger start to the process in terms of rolling out the business. Are you seeing that with most of the new logos? Yes, Vince. One of the things which we are very happy about is not only the number of new logos that we've signed up, but the quality of the new logos. We are also happy that it's well-balanced between digital operations and solutions and our data analytics business. Some of these logos we believe you know have got a tremendous opportunity for us to be able to build up and scale up. The initial size of the engagement are much larger as compared to you know previous years. Frankly, we're very happy with the new logo sign-ups. I'm not sure if you'd mentioned this already, but if you have, I apologize. I've heard from others that in the Philippines, despite the increase in attrition, there's a substantial supply to offset that and manage through this. Would you agree that that's the case for you? Yes. That is very true. Keep in mind one thing that, you know, as a operating business, we've got processes and systems in place to be able to manage through periods of high attrition because of the additional bench that we carry and the trained resources that we carry. Frankly, from a service delivery perspective, we're able to maintain that, you know, and manage that even if the attrition rate is high in a particular quarter. The availability of talent in the Philippines continues to be good, and we are not finding a challenge in terms of our recruiting abilities. Particularly when it comes to, you know, recruiting at the entry level, the availability of talent, you know, is actually pretty strong. Lastly, are there any other regulatory issues bubbling up in other offshore locations we should be, you know, aware of? No, there are none that have, you know, bubbled up. I think this entire piece around the future of work and the future operating business, and, you know, model, that's going to continue to evolve, and it's likely going to settle down. Every jurisdiction is gonna come up with its own definition of how they'd like the workforce to operate between the facilities, between home and the hybrid model. I think this will continue to evolve, you know, as we go along. The good thing is, it's likely to kind of evolve to a place that will provide for greater flexibility to our employees, allow for, you know, our clients to be able to take advantage of that, and it's gonna be, you know, it's good for the overall growth of our industry. We are very, very optimistic in terms of how this might settle down. Thank you, and nice quarter. Thank you. We have a follow-up question from the line of Ashwin Shirvaikar from Citibank. Your line is open. Thank you. The question was on the amended credit agreement, sort of the upsizing as well. How should we think of this? Is this more offense or defense? Offense being, you know, looking at more M&A, defense being, I would say, you know, recession fear is rising, and you're just being careful and, you know, bulking up your optionality and flexibility. Hi, Ashwin, it's Maurizio. You know, we redid our revolver. It was gonna become, it was gonna terminate in November. It became current, so we wanted to increase it. You know, the increase is really for two things. It's really for having the flexibility in terms of operating capacity, in terms of capital. But the other piece of it is also, should we need capital for M&A going forward, we have that opportunity now with a larger facility. You know, as we talked about a little bit on M&A, you know, we wanna grow the company both organically and also inorganically, you know, really going forward. That mix will help us, you know, leverage the company that much further and add those capabilities to our overall suite so that we can grow the company that much faster. I would say it's a little bit of both. It's one, it's for having that operational capacity for capital should we need it, but then also having that ability to leverage it for an M&A opportunity that comes in the future. Got it. Thank you, Maurizio. Yeah. We have, Your next question comes from the line of David Grossman from Stifel. Your line is open. Good morning. Thank you. I wonder if I could just follow up a couple of the margin questions that have been asked. I think you mentioned that you know you typically have a wage cycle, one in the 1st of April, one on the 1st of October. When you think about the guidance that you've provided for the year, have you provided some incremental wage pressure in that guidance relative to what you're planning on today? Yes, David. We have provided for a higher salary increment in 2022 as compared to previous years, and that is factored in our guidance. Yeah. I think the question, Rohit, was whether you've gone beyond what you're currently planning as a, you know, kind of a provision, if you will, for incremental wage inflation extending through the year. I think we've just gone through that increment cycle, David, in April. If there is a need for us to be relooking at that, we'll evaluate that a few months down the line. We do have an opportunity to assess that in the October cycle, so six months down the line we do have an opportunity. At this point of time, we believe we've adequately planned for it and adjusted for it already. What do you expect the gross margins, how do you expect them to trend over the course of the year? Should we expect them to remain relatively flat, or do you see some movement over the course of the year? They'll trend similarly to where we are today, maybe a little bit of an uptick going forward. You know, keep in mind, the second quarter, we do have a number of expenses coming on board. You know, the biggest piece of the increments is April 1st, and then there's a smaller piece on October 1st. That's usually, you know, an area that affects the margin to a certain extent. It's a little bit what I talked about in terms of second quarter guidance, both on revenue and on EPS that's affecting it. You know, as we grow going into the rest of the year, you know, our margin will be similar to where it is today. Maurizio, should we think about, you know, the gross margin remaining relatively flat and seeing most of the operating leverage in the margin coming from operating expenses? Is that how you want us to think about the model going forward? I think you'll see a fairly comparable gross margin, you know, going forward, just in the overall business. We're, you know, we've got a lot of expenses coming on board. We have a lot of ramp-ups. You know, we have, as I talked about, the increments. We have return-to-office expenses coming on board. You know, but, you know, overall, we're gonna manage to that adjusted operating margin that we gave guidance to, and also within the guidance for 2022. It gets back to, you know, you focusing on the overall margin for the year, in the low 18% range 'cause that's what you're gonna back calculate from EPS. Right. Just one last question. You know, I know, Rohit, you don't like to talk about specifics around backlog, pipeline, and bookings, and a question came up earlier about that. I mean, can you give us any incremental color at all on the, you know, pace and cadence of bookings and how you're thinking about bookings on a year-over-year basis, in calendar 2022? Sure, David. You know, first of all, we did sign up a large number of new clients in 2021, and so that's, you know, something which results in revenue growth in 2022, and so that feels very good. The pipeline strength we've spoken about in the past, that's gone up more than twice the pipeline that used to exist previously, so that's been very strong. Our win rate is actually a very healthy win rate, so we feel very good about, you know, the opportunities that we have in the pipeline and our ability to convert. With the shortening of the sales cycle and larger deals coming into the pipeline, you know, the quality of the pipeline, the backlog, and the business momentum looks pretty solid. You know, from a qualitative standpoint, it's all looking very healthy. Got it. Great. Thanks very much. Thank you. Your last question comes from the line of Robbie Bamberger from Baird Capital. Your line is open. Yeah, thanks for taking my question. Are you guys seeing more companies starting to outsource because they can't deal with employee attrition themselves? I guess digital solutions and analytics are a big selling point too, but are you seeing that accelerating trend toward outsourcing given this tougher hiring environment? Yes, Robbie. I think that's a reality which most of our clients face. Our clients, if you just think about their business model, they're seeing strong growth and they're seeing, you know, a talent scarcity. They're seeing a need for changing their business models, enabling digital transformation, leveraging data and getting into new areas, and therefore partnering with providers like EXL becomes a necessity for them. Yes, we are seeing that take place. Many of our clients, particularly, you know, in the markets in which we operate in the U.S. and U.K., Europe and in Australia, are finding it difficult to recruit talent and, you know, leveraging a strategic partner like EXL becomes an imperative for them. Yep. Thank you. One follow-up just on inflation. How easily have you been able to raise pricing for your existing and new clients just given this inflation environment? Raising pricing is never easy, but, you know, look, in this kind of an environment, it's absolutely necessary and important. We've started the dialogue with our clients, in terms of, making sure that the commercial arrangements are appropriate so that we can continue to be a strong, sustainable partner for them and provide them with the right talent, with the right skill sets and the right tenure and the right experience. This is something which is obviously being done, you know, client by client, and we are working through this. It is a change from the way in which I think the entire industry operated previously. It's a bit of a change management. Our advantage is that the work that we do for our clients is higher on the complexity spectrum, and our ability to demonstrate the value that we are generating for them is very transparent. Therefore, asking for the price increase is something which, you know, we hope will be an easier conversation with our clients. Great. Thank you. Thank you for all the questions. This concludes today's conference call. Thank you all for joining. You may now disconnect.