ExlService Holdings, Inc. (EXLS) Earnings Call Transcript & Summary

Welcome to EXL's Investor and Analyst Virtual Meeting. Before we begin, may I please request that you turn your attention to the cautionary statement regarding forward-looking statements on the screen. This presentation contains forward-looking statements, and you should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to EXL's operations and business environment, which are described in further detail in the cautionary statement. Please take a moment now to review the statement. Thank you. Now please welcome Vice Chairman and CEO of EXL, Rohit Kapoor.

Good morning, everyone, and thank you for joining our investor and Analyst Day. We're delighted that so many of you could join us. And me and our management team are really looking forward to presenting to you our vision, our strategy, the current positioning that we enjoy and the future outlook. Let me share with you what the agenda for today would look like. We're going to start out by providing an overview of where the business is and the playing field in which we operate. We're going to talk to you in terms of how we win, and that section will be led by Anita, who is our Chief Growth Officer. We will then have Vivek Jetley, who's our Global Head of Data Analytics, talk to you about our Analytics business. Pavan Bagai, who is our President and Chief Operating Officer, will talk about the power of digital. We are then going to switch over into 2 industry verticals. Vikas Bhalla, who's our Global Head of Insurance, will go and do a deep dive into the Insurance industry vertical. We'll also have a live conversation with a client just to share perspectives about how clients think about EXL. Sam Meckey, who's our Global Head of Healthcare, will talk in detail about our Healthcare industry vertical. And finally, we'll wrap it up with a financial review and a future outlook of our business by Maurizio, who's our Chief Financial Officer. So with that, we hope to be able to cover all of these aspects and have a discussion. We're going to be talking straight through, and we'll take questions and answers towards the end of this session. [Operator Instructions] So let's get started. In my section, I want to cover 3 things. One, there is an acceleration towards a shift on digital customer experience. What this really means is that every single business today has become a data-led business. And we want to talk to you about EXL is partnering with its clients to serve them a lot better. The pandemic actually has changed everything. And when we went into the pandemic in early March or April, we were quite unsure about what this might mean. But as the dust has settled, I think we now have a perspective that provides us with a much better insight into what the future might hold like. So what changed is the way in which we shop and the way in which we buy, the way in which we work, the way in which we manage our health and even our lifestyle, everything has changed quite dramatically. If you take a look at the digital online spending, that's increased dramatically in this time period. At the same time, physical stores still need to be there, and it's really a combination of a physical and an online world that needs to coexist. It's just that the emphasis has shifted over to the online world. Some of the more complex decisions and interactions that were there, particularly in healthcare, that has shifted dramatically into an online and digital world. So today, we are much more comfortable having an online visit with our primary care physician. And it's much more safer, it's much more convenient, it's much quicker and much better. And I think this trend is going to continue to stay. The same thing is happening in terms of our work environment. We are using a lot more of online tools and mechanisms. Take, for example, today's call that we are hosting, a completely virtual call and this adoption of Zoom or Microsoft Teams has just skyrocketed and just changed the way in which we operate and the way in which we work. The same is true about entertainment and leisure. Today, the family unit has become a really, really critical component, and everything is being watched online and in a separate and a segregated space. So what does this all mean? What it really means is that what we are seeing is that there needs to be hyper-personalization. Customers expect services, solutions and products to be served to them that are in the right context. They are customized for that individual, are served at the appropriate time and are relevant to them. We also expect this to be done in a very, very much accelerated pace. So there has to be an agile delivery of products and services and solutions that match the expectations of the customer, who will take a decision in 60 seconds or less. And there needs to be flexibility in terms of the channel that is used for interaction, whether that be online, whether that be chat, whether that be in the physical world, all of these need to coexist. The big change that has really taken place is in the past, digital transformation was moving along. But today, digital adoption of that has crossed the tipping point. And the pandemic has caused this to happen. But this shift that has taken place is likely to be a permanent shift because we find 75% of first-time digital users saying that they're going to continue on with it. And what becomes more important is customer experience. And therefore, as companies try and strive for market share and try and remain competitive, they've got to ensure that the end customer experience is much superior and much better. So the implications of that are that every single business has to be a data-led business. Data can point you in the right direction, can allow you to offer the right product or service to the end consumer and be -- allow you to stay competitive. Fundamentally, when you take a look at it, there are 2 fundamental ways of creating business value out of data. Number one, you can use data to make a better business decision. So you need to know what data to use, how to use it, build a predictive model, get the insight and execute upon it. We call that analytics. An example of that is a financial institution or a bank deciding to extend credit terms to a borrower needs to understand, not only their credit score, which actually provides a historical perspective, but actually needs to use alternate forms of data that will provide the creditworthiness of that borrower in the future and then make an appropriate decision whether to extend additional credit lines or to contract that credit line, and that decision is driven by data. On the second side, we need to apply intelligence into all operating processes, particularly those that touch the end consumer. And that is the application of digital and embedding intelligence into these operations. An example of that would be conversational AI, embedding artificial intelligence into a customer interaction process has become a critical component of ensuring competitiveness. We need to be able to use chat bots. We need to be able to use natural language processing. We need to be able to offer the customer the choice as to how they'd like to interact with you and applying intelligence and making sure that the right statement and the right offer is made at the right time, becomes a very, very critical component. So these 2 are fundamental ways in which business value is being created using data. At the end of this, organizations are going to invest a lot of money and capital to try and modernize their infrastructure and try and make a shift so that they can be much more relevant to the consumer. The investment in cloud, the investment in data infrastructure, the investment in AI is all going to skyrocket and is already a big trend that is taking place, and that is getting accelerated. What clients need today is a business partner to help them in this journey and help them be successful in the delivery of that business outcome. So an organization like EXL, is an indispensable partner for every single business that's becoming a data-led business. And that is where we come in because we had invested already in these 2 fundamental business value drivers, and we're going to continue to move forward and help our clients become competitive. Now when we do this, we can help our clients improve the end customer experience, by hyper-personalization and contextual offers that are going to be made to the end consumer, we can reduce the cost. Our cost is still a very, very important element in this whole transaction. And we need to be able to ensure that we can have resiliency built in alongside with these 2 other value drivers. So it's really about the customer experience, optimization of costs, and a resilient business model that is critical that we need to be able to deliver to. What this also means for EXL, is that over the past few years, we've shown that we are a resilient and a sustainable growth-oriented organization. Today, as it's becoming clearer as to where we stand and how the world is going to operate in the new business normal. It's becoming clearer to us that we, in fact, can grow at an accelerated pace. And the pandemic has, in many ways, caused the opportunity set for us to become a lot better. Let me share with you a little bit about our historical perspective and the future direction of where we are going to go. Over the past 14 years or so, EXL has constantly been able to build up its revenue and grow at a very fast pace of about 18% or so on a compounded annual growth rate. Even at the point of time of the crisis, which was the global financial crisis in 2008, 2009, we continued to grow and build our business. In 2020 with the pandemic, we are still able to not get impacted too much and continue to build and grow our business as we move forward. And we outperformed the S&P 600 very significantly. The same is true from a profitability perspective. Our EPS has grown at the time of the global financial crisis, and we emerged from there very, very successfully. And in 2020, based upon the midpoint of our guidance for the fourth quarter and for calendar year 2020, we hope to be able to increase our EPS year-over-year despite being impacted by the pandemic. So for us, we think the investment thesis is very clear and very simple. We are a resilient business, which operates in a large and growing market, and therefore, we have a huge opportunity to continue to build and grow and participate in this market. We think we can accelerate our growth rate from the high single digits to 10%-plus going forward. And we also have an opportunity to grow our margins and to be able to expand our EPS faster than our revenue growth rate. And this is on a constant currency organic basis. We do think we have opportunities to do acquisitions and, in fact, add to this growth rate and this profitability as we move forward. The pillars for our competitiveness and the reasons why we win, have remained pretty much constant through this journey of ours. And I think going forward also, it's going to remain exactly the same. We think there are 5 key reasons why we win and succeed in the marketplace. Number one, there's a deep domain expertise and a very sharp focus on serving clients in select industry verticals. We are fortunate to enjoy the sponsorship of some very satisfied and happy clients and more and more prospects and new clients want to join us and be part of this business model ecosystem that we've created. We have leading edge capabilities in data, analytics and digital, and we intend to leverage this to the advantage of our clients. We've got a fabulous leadership team in place, and we've got a talent pool, which is sourced globally, which is current in terms of their skill sets and operating in this world. And we've also created the capability to continuously reskill ourselves at scale. And finally, it's the teamwork, innovation, collaboration and creativity of actually demonstrating results to our clients that is critical. So with that, let me pass it on to Anita, who's going to talk to you a little bit more deeper about each one of these 5 elements as we move forward. Anita?

Thank you, Rohit. I'm happy to be here with you all to talk about why we win. Our deep domain expertise and industry focus are mutually reinforcing. We choose to play in parts of the market where there's opportunity for outsized value creation with data, analytics and digital. We focus in these 4 specific areas. In analytics, not only do we have market-leading capabilities, but also extensive knowledge and experience gained by applying our analytics to important problem domains. In Insurance and Healthcare, we focus intensely in these verticals to shape solutions to core industry problems and in emerging, we incubate new digital solutions. Through our focus in these areas, we stay ahead and grow our lead over the competition using our domain expertise, which we deepen through our work with clients to innovate new solutions and bring more value from one engagement to the next. Client centricity is ingrained in our culture. And through our long track record of delivery, we're well positioned in strategic, trusted and engaged client relationships. We've grown our relationships with large clients and added $23 million-plus clients. On the journey of helping our clients modernize for a data-led future, we've grown the penetration of our analytics offerings into top clients reaching 67% adoption. And from the early days of the pandemic, we prioritized client intimacy, and we're gratified to see our Net Promotor Score increased this year to its highest level ever. We're one of the few providers that delivers full end-to-end data and analytics, proprietary data, data management, on and off cloud and advanced analytics and machine learning solutions across our clients' value chain. The combination of our leading-edge data science and digital with our deep industry domain and process expertise means our solutions are better, our outcomes are better and our clients do better. As a result, the role of analytics in our business has grown substantially, reaching 38% of overall revenue this year. Our global delivery model is built on a strategically designed network of locations. We grow and evolve on an ongoing basis, most recently opening a new delivery center in Colombia. Our network is standing up well to meet client needs in the new normal, including increased requirements for geographic diversification. The complex business solutions that provide in our chosen areas of focus require highly trained professionals with deep domain and industry expertise. Data scientists, digital experts, nurses, actuaries, our investment in developing and nurturing this specialized expertise globally is a source of value for our clients and a reason that they choose us. Leading our clients on the journey to data-led business requires an executive team that can lead change. Rohit has expanded this team to bring together highly experienced leaders with diverse and relevant backgrounds. Maurizio and I joined this year. Maurizio had been CFO at FactSet, and I came from IBM Watson. Sam was last in before us from UnitedHealth Group's Optum. Vivek and Ajay are EXL veterans recently appointed to the executive committee. We all work together to chart the course for change setting priorities and driving a focused growth agenda. To do that, we work with our operating committee comprised of senior leaders in key roles for leading innovation and aligning the organization for execution. Appointees have both enterprise roles like our Chief Digital Officer; and critical business roles like our Insurance Strategy Lead and our Chief Nursing and Operations Officer. One tool we use to link strategy and execution throughout leadership is OKRs, objectives and key results. For us, the power of the OKR is as a rallying point, uniting our teams around the world and helping us drive results. The last of the 5 elements of why we win lies in our people and the culture that has been built over so many years. This is our X factor, our human ingenuity at work. It's creativity rooted in competence and a dedication to client success that's embodied in all that we do. You see it in the speed of innovating new solutions for pandemic problems, like our work to invent a new business continuity solution, enabling work from home in just 3 weeks, and in our work with top lenders on the PPP program. And you see it in the scope of our impact, generating billions in dollars in value for clients and delivering solutions that impact large proportions of the population. And you'll continue to see the innovation, creativity and collaboration in our global future operating model. In our client survey, 3/4 of leaders believe work from home will continue beyond the pandemic. Our collaboration with clients helped us innovate an enabling platform of technology, tools and processes that we have already been using to acquire and implement new business. We anticipate future benefits in business resiliency, access to diverse talent, and ultimately, an improved employee experience. The 5 factors, deep focus and expertise, growing client relationships, leading data analytics and digital assets, global talent and our creativity, all work in tandem to deliver differentiated value for data-led businesses and to help us win and grow in the market. Now to go deeper on how we drive growth with analytics, I will hand it over to Vivek Jetley, EVP and Business Head of Analytics.

Thank you, Anita, and thank you to everyone that's joined us today and spend this time with us. What I wanted to do over the next few minutes is walk you through what is the Analytics business for us, talk to you a little bit about how we've become one of the largest services providers in the space. And how do we maintain a market growth rate -- a growth rate that's above the market. I'm going to try and give you a vignette into what is the work that we do for our customers, for our marquee customers. And how is it that we drive value for them using our full stack capabilities and our global talent pool. And finally, I'll end with talking to you a little bit about our growth projection for the future and why we believe that the demand for analytics will be higher in the new normal. Our success in Analytics is really grounded in our early start, and our investment in Analytics goes back to our 2006 acquisition of Inductis. That investment paid off very well for us, and we've grown the business several fold since then. Most notably, as Rohit alluded to, right in the period coming out of the financial crisis. But more importantly, over the last few years, we've made some very big strategic investments into enhancing the capability of that business. We -- in 2015, we acquired a proprietary data asset that covers the entire U.S. population. And along with it, a data-driven marketing solution, which allowed us to start targeting the spend that was being made by CMOs and in the space of acquiring new customers. In 2016, we made an early investment into data management and cloud capabilities by acquiring Datasource. And that allowed us to target the Chief Data Officer space and the data modernization spend. And since 2017, we've been building up our advanced solutions team, our advanced AI and ML team and investing pretty heavily in that, which gave us the ability to actually start taking some of these advanced analytics and AI solutions to our customers and kind of created a big demand boost for us. As a result of these investments, we've actually experienced significant sustained growth over the last few years. We've had a very high organic growth rate, which has been boosted by some of these capability acquisitions. We've grown by about 33% of on a compounded annual growth rate basis over the last 7 years, and Analytics is now 38% of the company's total. Let me show you some of the metrics that lie beneath that growth rate. So at this point in time, the Analytics business has about 150-plus clients spread across our target verticals. 36 of those clients are Fortune 500, with several of them being global leaders in their verticals. And in order to support that demand, we've built one of the largest teams of data analysts, data scientists and engineers in this space. Our work today spans the entire C-suite. We work with some of the largest companies in the world, helping them with complex problem-solving at scale. And on the other end of the spectrum, we work with some of the new fintechs and the insurtechs and the innovators, helping them drive innovation at speed. And the work that we do with them is resonating across both parts of this chain, for the large customers as well as the innovators. Now as you can imagine, the data and analytics market is very crowded and very competitive. We participated in a study along with 60-plus different providers the world over, a study that was conducted by Gartner. What they did was they looked at responses from verified customers for each one of these companies. And looked at that responses to try and create what they call a Peer Insights report. EXL received more than 50-plus customers that responded to this and put their feedback in. At the end of the analysis, we were the only company in this space to get the Customers' Choice 2020 distinction. We're very, very proud of the distinction. And we're very grateful to our customers that kind of gave us the feedback and put us pretty much all by ourselves. Now the value that has been provided by our teams has been appreciated by these customers throughout the pandemic. And Anita alluded to this as a result of that, we've actually just received our highest NPS score ever in the business' history. What I want to do now is talk to you a little bit about how we deliver this business impact and value to our clients. And I'm going to go back to the framework that Rohit introduced you to. And on the left-hand side, what we're looking at is how do we actually help our clients unlock deep insights from their data. We do this in a 3-step way. First of all, we help them modernize the way that they store, clean, update and use their data. This requires breaking down the data silos to create modern data assets. It requires cloud-enabling them and moving some of these data processes onto the cloud. And our teams are helping both with the strategy as well as the implementation of this work. You also then need to enrich the data by combining it with curated external data by helping customers, our clients, understand how their consumers behave and what is it that they could do to predict consumer behavior and influence it. And there's a huge amount of work that we do in terms of enriching that data. Once the data is all prepared, you need to start actually creating the insights from it. And this is where our services team actually help our clients accelerate and enhance the work that is required in order to produce these insights. We bring in our prebuilt accelerators, our frameworks, our infrastructure to help them speed up the way that they build up these teams. And finally, once you've created the insights, you need to actually incorporate it into predictive models. You need to incorporate it into decision frameworks that can then start driving outcomes for our clients. And this is where our industry solutions teams and with their deep domain expertise, start creating offerings for our customers based on that particular insight and creating something that helps them influence the behavior. An example of this would be something where we've actually helped some of our credit risk teams within banks use machine learning and use it in a manner which actually complies with the regulatory guidelines. Now our capability to clients is relevant across the entire enterprise, and we think that there's a very robust demand for these capabilities, especially as more companies transform into data-led businesses. And what I wanted to do is show you how that demand comes across. Now what we've done here is shown you the graduation of how demand matures. On one end of the spectrum, we have customers that come to us for foundational capabilities. They're starting their journey into becoming a data-led business, and they need a team, they need a stand-up capability to say, can you come help me build this out. On the other end of the spectrum, you have the very large mature analytics providers who still require, in certain cases, the industrialization, the automation capabilities to help them become more cost effective. And in other cases, that required the innovation edge to try out new tools and techniques and give them that edge. And we have offerings that cater to that entire spectrum. We measure ourselves by our client impact. And our client impact is -- produces a pretty high return for all of our customers. In fact, we -- the metric we use is we need to produce between 4 to 10x of what a client spends with us in terms of the first year ROI that we produce for them. Now as we go into the next page, what you'll see is a -- what we'll see is the way we drive this demand and the way we fulfill this demand through our talent. That increased demand requires a pretty large number of talented individuals with multidisciplinary skill sets. And what we've been doing is creating and focusing on our programs of recruiting the best-in-class talent from some of the leading schools in the world. We focused on giving them the best training to train them extensively in specific domains, and then equip them as part of our multidisciplinary teams. And that's when we start deploying them to our clients, and that's when they start driving value. I want to now illustrate the way in which our teams bring some of these deep insights for our clients with a case example. Now this is a case example that illustrates what we did in the pandemic. As the pandemic took hold in March, it led to an unprecedented lockdown across the world. In the U.S., it led to the sharpest increase in unemployment and a steep drop in economic activity. All of our clients transitioned instantly from boom economy into a recessionary mode, tightened lending, cut down marketing activities and so on. Now as companies looked to manage through the crisis, all of the traditional metrics that they used to look at like the unemployment rate and so on, were lagging indicators and in a lot of cases were not useful anymore. So what we did for our customers is created a high frequency, granular data-driven indicator of what the recovery was doing and what was the impact of the pandemic. We identified 50 different variables across consumer behavior, underlying health metrics, government restrictions, business activity and identified them across all 3,000-plus counties in the U.S. and started tracking them to show what the recovery was doing at each granular level. More importantly, our index became for them a leading indicator, which was better than the traditional variables and started predicting things like unemployment and consumer spending at that granular level. What we were then able to do was use the recovery index to track and predict the recovery for our customers across the U.S. What you're going to see on this graph here is how the recovery index spanned and changed over a period of time for each county, predicting exactly how -- what was going on in that county, how the recovery was tracking with the blues being a high recovery score and the oranges and the reds being a low recovery score and a high-impact score. What our clients were able to do was use this index in conjunction with risk scores to identify pockets where the recovery was shaping well, identify areas where the recovery was not doing so well and come up with targeted products and targeted offers for that particular population. Our work actually contributed to the restart of marketing programs for some of the nation's largest marketers and has ended up driving billions of dollars in new consumer spend that we've been able to create. Now the interesting thing for us here was that our team took this idea from concept to test to production in a matter of weeks. And that's the pace at which some of this new inhibition is driven right now. Now finally, as we look to the new normal and as the economy emerges from the pandemic, as Rohit talked about it earlier, some trends that are fundamentally accelerated and they are here to stay. The shift to digital is here to stay. The cloud shift is going faster than ever before. And even companies that were never into the mass customer personalization model are now adopting at whole scale. What we believe is that all of these trends are going to drive an increased demand for analytics, more data, more data-driven decisions, more frameworks on how to incorporate those insights and decisions into processes. And we believe that we are well suited to capitalize on this increased demand. We believe that it will drive an increased growth rate for us over the next 3 years, and we are increasing our growth objectives for this as a result, which Maurizio is going to talk about in the financial section. At this point, I will hand it over to our President and COO, Pavan, to talk to you a little bit more about our digital value proposition. Pavan, over to you.

Thanks, Vivek. Morning. So in this session, I actually want to leave you 3 key messages. One is, given the strength and analytics that Vivek talked about, we have actually founded our digital initiative and efforts such that it leverages and capitalizes on our strengths in analytics. Obviously, there has to be an element of technology and automation, and that is most essential. But the key differentiator for us relative to our competitors is the very strong grounding in data, analytics and artificial intelligence. Secondly, our experience has demonstrated that digital transformation, if executed effectively [indiscernible] significant business impact for our clients, which are far out of proportion relative to their spend with us. And this actually becomes a catalyst to growth in our Insurance, in our Healthcare, in our emerging businesses. And lastly, digital is likely to be a new revenue engine of growth for EXL. We are already in -- catalyzing growth in our existing verticals. We are also looking at developing AI-infused solutions of the cloud that would generate independent revenue in the years to come. Digital for us is applying intelligence to operations. Rohit talked about analytics being using insights to generate better business decisions. When we apply intelligence, it's to operations that may have been outsourced to us. It could well be operations that are in-house. It could well be operations that solve significant business or industry problems. In order to achieve this, we have a set of what we call digital technologies, and these encompass data, machine learning, automation, cloud, analytics. Data, we've got a set of proprietary data. We've got access to our swath of process-generated data through our outsourcing operations. We've got partnerships with data providers. So data is one area that we are very well equipped to capitalize on and assist our clients to become data-led businesses. Where we are different in terms of machine learning and artificial intelligence is because of our years of experience in the domains of Insurance, Healthcare and some others, we've got ontologies that are contextualized for those particular industry domains. And what that means is that our machine learning models can actually learn faster. We've built some proprietary bots to equip our automation repertoire. We've got partnerships with all the major cloud infrastructure providers, and the analytics is the foundation that we've built digital on. We obviously try to deliver a trifecta impact for our clients, which effectively means improving their customer experience, improving their business outcomes as well as enhancing efficiency. And in order to do that, we need to integrate with their core systems. We need to transform their business processes, but most importantly, we need to use data to actually re-architect the entire process flow. It's very gratifying when an independent research firm, actually rates you at -- as a leader in insights-driven business process outsourcing. This particular report from Forrester is hot off the press. And what actually I will highlight and draw your attention to, is the comment in the middle where EXL has demonstrated the ability to think both wide, across the scope of a business process, and deep from data to insight, to action and outcome. While we don't work in order to get accolades from external world, it's gratifying when this does happen, and in many ways, is a validation that we are indeed on the right path. When we start an engagement with a client, off the bat, we are able to commit to significant improvements in productivity and efficiency by using our levers of embedded analytics, process excellence, robotics. But what is different then is, as we gain credibility, we are able to move our levers to deliver outcomes, both upstream and downstream. And that then generates business impact beyond just the work that may have been outsourced to us. And this value typically is 3 to 5x what the client may be spending with EXL. And as we traverse this path, over time, we gave the confidence of the client and become a partner in order to not just address their cost challenges, but actually enhance revenue and most importantly, impact their end customer experience. An example of a strategic client and the life cycle of what I just talked about, it started off with a pure-play outsourcing engagement, where we were delivering labor cost arbitrage. But 2 years in, we introduced robotics. 3 years later, we introduced analytics and intelligence. And now we are in the process of infusing AI -- conversational AI in order to truly make a dent in their NPS scores to satisfy their clients better. And if you look at the numbers on this page, these are benefits that accrue in perpetuity or at least until the customer changes their system or operating model. These are huge benefits, and it's engagements like this that actually enable us to build the strong strategic relationships we have across our business verticals and also power their growth. Where we are different from a traditional process improvement exponent is, while we do look at process maps, we actually look at them through a different lens. We look for where is data being generated in a process, where is it being stored and what's being done with it? And our methodology, EXLerator.AI actually follows the data. We use artificial intelligence and ML to basically extract unstructured data and convert it into structured data. We use data management to convert the structured data into data lakes. We then use analytics and deploy it on that structured data to generate insights and prescriptions. And then we use robotics to actually put into -- to execute those prescriptions. And by doing that, we are able to take raw data, which, hitherto, was totally unutilized and deliver superior outcomes. We've built a proprietary stack of digital transformation levers, and these have evolved over time. Our key differentiator is our investment in cutting-edge R&D. Our data scientists and our automation experts develop these superior digital solutions, which lead to better client impact, which in turn, results in higher growth, new business, a broader canvas to play on. And effectively, this becomes a virtuous cycle. I will also highlight that we do have a very closely integrated partner ecosystem, which straddles the major cloud architecture providers, it straddles the major robotics providers, data providers and specific boutique capabilities and we worked very closely within this partner ecosystem in order to essentially trigger this flywheel of virtual. I'm going to end with 2 case studies, and I'll touch upon them very briefly. Now this one essentially talks about a content extraction solution that we've built that is powered by NLP. Here, we have a life insurance company that underwrites policies. Attending physician statements are provided by potential customers or existing customers. And these are typically 100-page documents. What the client -- the customer is looking for is where are their impairments, typical impairments are chronic diseases, other ailments. Extracting these from a 100-page document, it's a very, very manual intensive effort. What we were able to do is to build an NPS solution -- an NLP solution. Leveraging our healthcare ontology, such that we created a dataset -- database, a repertoire of this on our own cloud, which was then accessed by this client, their underwriters, so that they use this information in order to build better underwriting models, better mortality models, price finer, manage their risk better. And most importantly, turn all of this around much quicker, thereby improving customer experience. The second example that I want to talk about actually is our customized management information assistance solution as well as our digital command center that we call NerveHub. Now this is -- we've deployed at a number of our outsourcing client processes. What this does is basically looks at customer journeys in a unified manner. The data that is thrown up by various functional processes is fragmented and disaggregated. Our solution actually brings it all together in order to generate insights on how a particular customer journey is progressing and where, if any, there are any -- there are obstructions that need attention, that require a rebalancing of the workforce and also throw up key information in dashboards that enable superior operations management. What this does is it leads to better NPS scores. It leads to a more efficient operation and thereby, generates significant business impact in reducing customer churn, retaining customers, generating more revenue. Everything that I've talked about actually is a foundation, an engine on the basis of which the 10%-plus growth that Rohit talked about is -- will be catalyzed. I'm going to now hand over to my colleague, Vikas, who leads our Insurance business to further expand on this principle. Over to you, Vikas.

Thank you, Pavan. Good morning. It's great to be talking with you today. Insurance is one of the larger business verticals at EXL. So in this section, some of the key messages that we'll be highlighting are: one, that insurance remains a large, underpenetrated and a fast-growing market, and that gives us significant headroom for growth. Two, EXL is a leader in operations management and analytics, both in property and casualty, and life and annuities at a global level. And three, with this accelerated move of insurance companies to become more data-led, as we've been talking about. EXL is uniquely positioned in insurance with end-to-end capabilities. So let's first talk about the market. Now insurance is a large market. For operations management, data and analytics, domain platforms and digital. And these are the 4 services that EXL offers. For these 4 services or solutions, the current size of the outsourced market is about USD 34 billion, growing at about 7% to 8%. And Analytics, which is a key focus area for EXL is growing faster at 10% to 15%. Having said that, if you look at the total addressable market, which is difficult to estimate accurately, but it is significantly higher as potentially a large part of the expense ratio for insurance is a potential market for organizations like EXL. Let's switch to capabilities. In Insurance, you can think of our capabilities as fairly end-to-end. And it is end-to-end in 3 dimensions, 3 critical dimensions of product line coverage, which is insurance product line coverage, value chain coverage and services coverage. For product lines, we are a leader in all product lines in both property and casualty, and life and annuities, particularly disability and growth. I'm focused -- I'm just calling out, which have been later pursuits for EXL, but we are already a leader in that, too. In the Insurance value chain, we covered the complete value chain from new business and underwriting to claims. Now historically, our focus was more on the claims and the admin side, which meant that we were paying more on the cost side for our insurance clients. However, over the last few years, as a strategy, we have started focusing much more on the revenue side, which is new business and underwriting, and we've made both organic and inorganic investments to do so. And finally, in service lines, as I had mentioned earlier, we offer of a complete suite of services, including very sophisticated areas like insurance F&A, where we think we are the undisputed leader, analytics and targeted technology platforms. So what's the outcome as a result of these capabilities, as recognized by our clients and the industry at large. Now all the analysts, which cover the services for insurance industry, including analytics and BPO end platforms, they'll play EXL very favorably in their assessment of the provider landscape. What you see here is the latest Everest rating, which does one of the most comprehensive assessments for both property and casualty, and life and annuities. And as you will see, EXL is ranked #1 in P&C and #2 in L&A. And there is no other provider that has that distinction. Moving from the analyst ratings to what our clients think of us and how we engage with our clients. For the insurance capabilities, services and relationship management, we believe we are the partner of choice for Tier 1 insurance companies globally, and we've had made a strategic shift also to cover more of the mid-market segment in the last few years. Our clients see us as a trusted partner, somebody who understands their business and somebody who can challenge them as is endorsed by the CEO of a top-tier group life insurer that you see here. Our clients have appreciated our commitment, flexibility, resiliency, particularly during the pandemic because as we pivoted to become equally successful in a work-from-home environment, you can see our clients liked it, as you see from the quote by a top-tier P&C company. And finally, you can assess client relationships from the breadth and depth of the engagement as shown here. Whether it is providing multiple services for a P&C provider globally or it's about transforming complex actuarial function for a large L&A player. If you look at talent, which is one of the most ingredient, if not the most important ingredient for success, we have one simple message. We build insurance career professionals at EXL. Now this is validated by our abundant talent, as you can see on this slide, across geographies in multiple specialized areas. And it is enabled by insurance education system that we've been running for last many years with some of the best institutes, insurance institutes globally. This is a unique value proposition, not only for our employees, who know that we'd help them build carriers in insurance, but also for our clients who know that our larger staff has the context and the insurance expertise to be working on their businesses and their operations. Let's double-click on some of our capabilities, and I'm going to use the data-led value creation framework that Rohit spoke about and then Vivek and Pavan referred. On this slide, we are focusing on the left-hand side of the pyramid. This is the data-led analytics services. Now as Vivek said, our insurance analytics services has the scale. But let me just mention about 3 specific areas of high expertise. The first one is to modernize and enrich. We do this by helping insurance companies strategize and create data factories. Second is to accelerate and enhance. For example, use of proprietary EXL industry and client data assets, a combination of that, for better lead prioritization and hyperpersonalization as you look at servicing your insurance customers. This is a capability that we've built on the acquisition of RPM that we made a few years back. And finally, to predict and recommend this is use of, as an example, use of conversational AI in customer interaction in all areas of -- for insurance companies ranging from new business and policy maintenance, to claims. So this is on the analytics services side, which we have been doing for many years, and we have the scale and the expertise. Now let's look at the right-hand side of the pyramid, where we're going to talk about a newer but an already established and fast-growing area of expertise at EXL. And the way to think about this is that we actually play at the 3 levels of digital disruption for insurance. The first level is digital transformation of the back end. An example here is use of EXL's Xtrakto.AI, and I'm going to talk about this thing as a case example later on. But we use this for automating content extraction using AI and NLP. The second level of disruption is changing customer interaction channels to digital media. We have all seen that there is an accelerated move the use of digital channels across industries and even in insurance. And here is where we are facilitating our insurance clients to be able to do so. An example is the EXL LifePRO digital suite, where we actually have a digital customer onboarding and underwriting engine in the life and annuities insurance. And I'm going to talk about that also in a little bit more detail. And finally, level 3, which is using data to make the same, rather than depending on gut feel or historical knowledge or customer interaction how do we use multiple data sources to make decisions? So for example, EXL is using proprietary and industry data flows to help insurers take underwriting decisions in what is known as data-driven, art, right? So like I said, now let's click -- double-click again on the first 2 through a couple of case studies. The first case study is where we are actually helping a top-tier global broker in back-end automation. And let's use an example of claims. Now the claims engine is -- can be fairly integrated and automated, but it still needs those manual interfaces with different kinds of documents, a huge manual effort. And documents could be e-mails, phone calls, written documents, forms, structured, semi structured and so on and so forth. And these could be in sub functional areas like first notification of loss, loss assessment and so on and so forth. And what's the result? The result is a very high cost, you have quality issues. And more importantly, the final customer experience is very clunky because if you think about it, they do have the digital interface with respect to claims, but because the back-end system has got this huge manual interfaces, you get a digital interface but not necessarily a digital experience. So EXL's Xtrakto.AI solution uses artificial intelligence and NLP to automate this content extraction. And our expertise lies in finding out where it is going to be more applicable than others in the area of insurance. And in those applicable areas, we've been able to generate huge cost and turnaround time reduction. The second example is from a different company, which is really a market disruptor. And this market and disruptor has entered the U.K. market about 2 years back. Now in the U.K. life and protection market, which is financial advisor led, there are 2 big challenges: the first is, for a new customer, a new potential policyholder, the time it takes to go from quote to policy can take days. And because it can take days, the experience is not very good, and you can always have a competitor coming up with a better offer. And the second is that if you want to launch new products into the market as the market is dynamic and you need to tweak your product features, you need significant code writing, both on the policy admin and the underwriting and new business side. And that product launch can typically take months. Now what we designed using our digital technology stack, which is our LifePRO digital suite, this enables a low code, highly configurated system with digital customer onboarding journey and an automated underwriting engine. So if you think about it, it's low code. It does not need a lot of code writing. It is digital customers, so the customer gets digital experience, and it's got an automated underwriting engine. And what's the outcome? Now the policy issuance can happen in minutes rather than days, new product launches can happen in days. And frankly, most importantly, there's a significant productivity improvement for the financial adviser. So as I talked to you through the journey that we've had in insurance and how we're looking at the future, I would like to iterate the 3 key points that we started with: number one, insurance remains a large growing market; number two, EXL is a leader in operations management and analytics and increasingly in digital in insurance; and number three, with the insurance companies becoming more data led, we are uniquely positioned with our end-to-end capabilities.

Okay. Thank you, Vikas, and good morning, everybody. I'm very pleased to have a privilege of discussing our health care business with you today. And please allow me to add my gratitude and appreciation for each of you for joining us today to talk about EXL. For the next several minutes, as I talk about our health care business, I'd like you to keep 3 main ideas in mind. First, as all of you know, the health care market in the United States is very large. We've organized our business around 4 specific lines of service, which we are leveraging to sell into very focused and targeted segments of the health care market. Second, we've built a very resilient business model in health care, and we have developed expansive industry solutions that are built upon the data-led business model, which we have been discussing with you today. Finally, we are investing in our commercial expertise. And we have developed a sales model that is flexible, it's scalable, and is delivering results. Our sales team right now is powering health care as a significant growth vector for EXL into the future. Over the past several years, EXL has made significant investment in our health care business, and that investment is paying dividends. In 2017, we expanded our operations work into end-to-end utilization management. In 2018, we acquired SCIO Health Analytics, bringing us greater scale and capabilities for our Data and Analytics business as well as significant industry solutions around payment integrity and risk adjustment. In 2018, we pivoted towards digitally enabled solutions. We also focused on services, which deliver greater value for our clients. And finally, this year, in 2020, we launched our EXL Health brand with a specific focus on human ingenuity as the key, which helps us bring together our data and analytics, our technology and our domain expertise to solve our clients' most complex problems. As you can see, these investments have been critical to the health care business growing very nicely over the past 4 years. Mentioned previously that the health care industry in the United States is very large. Today, the health care market accounts for almost 18% of the U.S. economy. Over $3.5 trillion flow through the industry each year. Now most of those funds eventually make their way to providers who deliver care to over 340 million people. So the sheer size of the market demands that companies who compete in the market be very focused in terms of what they're doing. At EXL, we've chosen to focus on the health care services and technology segment of the market. The health care services and technology sector of the market is about a $275 billion segment of the health care market. The addressable market that EXL is pursuing represents about half of this market segment. This market segment continues to grow faster than the health care industry as a whole. When you look at the health care services and technology market pre-COVID, it was growing at an 8% to 10% annual growth rate. Now with a lot of industries, the growth rates have slowed as the pandemic and COVID-19 have accelerated over the past year, but growth rates for this market are still at about 6% to 8%. And as the vaccine takes hold and we start to come out of the COVID pandemic experience, we expect growth rates to return and actually increase slightly to 10% to 12% as some of the capacity that hasn't been consumed over the past year makes its way back into the system. At EXL, we have spent a lot of time studying the health care services and technology market. We've chosen this market very carefully, and we are laser-focused on executing in the parts of the market where we believe that we can grow and grow faster than the market overall. We've chosen 4 key customer segments that we want to focus on. We work with payers, pharmacy benefit managers, providers and life sciences companies. We've also chosen to orient our business and concentrate on 4 specific lines of service. As you can see, those lines of service are data and analytics, payment, clinical and pharmacy. We believe that this focus on these key market segments and our key offerings are going to allow us to deliver significant value to the clients that we serve. By focusing on targeted market segments in the health care services and technology market to drive growth, we have become the partner of choice for our clients. As you can see from this slide, we work across these segments. We serve 6 of the top 10 U.S. health insurers. We work with 4 of the top 5 pharmacy benefit managers, and we currently work with the top 15 life sciences companies. Further, we've developed a portfolio of over 125 health care clients, which are giving us access to over 260 million unique lives and the data that comes with serving that many unique lives. The power of this business model is really illustrated by our clients and how they work with us here at EXL. I particularly appreciate the comment by the Chief Network Officer of a client of ours who runs their health care services provider part of their business. She recently said, "EXL empowers us to deliver complex and technical solutions, which we need to exceed customers' expectations." This is exactly what we want to do in at EXL Health, leverage the power of human ingenuity to help our clients solve their most complex problems. Fortunately, for us, it's not just our clients who are recognizing the value of our good work. We're very proud of the industry recognition that we have received as well. And as you can see, several of the industry's top analysts have recognized EXL for our work in data and analytics, risk adjustment, care management, and business process transformation. To achieve these great results, we've also focused on attracting some of the industry's best talent to complement our existing EXL leadership. Our Health care leadership team brings a combined 200 years of health care industry experience, having worked at such industry leaders as Change Healthcare, Kaiser Permanente, Medtronic and Optum. This leadership team has a privilege of leading some of the best talent in the industry. Our talent includes over 6,000 health care professionals, we have almost 2,000 licensed clinicians, we have over 500 data scientists and we have 300 clinical coding specialists. This amazing group of health care professionals, it's focused on creating data-led, digitally enabled industry solutions. We spent a lot of time today talking about our data-led business framework. And the data-led business framework is what we are building all of our industry solutions on. With this data-led business framework, we are leveraging intelligent operations, deep analytic insights and a global operating model to deliver our solutions and to create exceptional value for our clients. As I mentioned before, we're very focused. We're focused on 4 specific areas to drive growth. And I want to give you a bit of an example of some of the industry solutions that we are developing in these areas. In Data and Analytics, we've created solutions such as risk adjustment and population health. In our Payment Services business, we've created solutions such as payment integrity. In our Clinical Services business, we've built solutions around utilization management and care management. And finally, in our Pharmacy Services business, we've built out, among other things, our specialty pharmacy audit solution. What all of these industry solutions have in common is that they focus on large, significant problems for our clients that impact not only their revenue growth, but also their ability to generate significant returns for their clients and for their investors. Best way for me to show you this, is to talk about a case study, and I'd like to spend the next few minutes discussing an example, which illustrates everything that I've been talking about so far. This case study is about a large national payer client of EXL. This client historically did a little bit of work with our legacy EXL business, but they also did a good amount of work with SCIO, which we acquired back in 2018. At the time of the acquisition, at SCIO, this client's revenue was flat to declining with both organizations. We realized that we had some significant work to do to turn that around. And over the past 2 years, we have focused on engaging C-suite leaders at this client, and we have educated them about our data-led business model, and all of the different industry solutions that we could bring to bear to help them solve their most complex problems. But most importantly, we stepped back, we slowed down and we listened to our client. We listened to them describe the problems that they were having with overutilization. We listened to them describe the problems that they are having with high cost claimants, and we listened to them describe the problems that they were having with overpayments. Fast forward 2 years, and as you can see, this payer has become EXL's third largest client. Highlighting the strength of our business model, they currently purchase 12 different solutions from EXL coming across all 4 of our lines of service. This past year, they gave us one of our highest NPS score, and we estimate that we have delivered over $1 billion of value to them. Most significantly, this client provides EXL with a road map for what is possible when we apply human ingenuity and collaborate with the client to help them solve their most complex problems. The concept of human ingenuity is very important to us at EXL. And I talked about the road map around what the art of the possible looks like. This is what that road map looks like to us. When our people bring their best innovation, their best collaboration and their best ideas to our clients, we are able to unlock tremendous value on their behalf. When we combine our domain expertise with our data-led business framework, we create value in many ways. Some of the ways that we do this include optimizing revenue, improving quality of care, reducing unnecessary health care consumption and spend; and finally, enabling value-based contracts, which is increasingly becoming more and more important for both our payer and our provider clients. Finally, the reason that we are doing all this, why we are focused on human ingenuity and why we're focused on becoming a client-led organization and what our destination and our road map is, is to make health care into a growth vector for EXL. When I began my discussion, I shared with you how large the health care market is and how important it is for us to be focused. Over the past several minutes I've talked about our focus on industry solutions and how our focus on developing and selling industry solutions into the market is accelerating our growth. These solutions are enabled by key capability investments that EXL is making in the areas of product management, digital enablement, which was so eloquently described earlier by Pavan, and commercial excellence in our front-end team, with the upskilling of our client executives and sales leaders to focus more on consultative selling and on understanding our clients' most complex problems. When you put all of this together, we expect above-market growth for our health care business. We expect earnings to continue to grow faster than our revenue, and we expect continued improvement to our return on invested capital. Thank you all very much for your attention so far and your interest in EXL and our health care business. Now I'd like to pass the presentation along to my colleague, Maurizio, who's going to describe our financial performance.

Thank you, Sam, and I want to welcome everyone to Investor and Analyst Day. In my financial review, I'm going to cover 3 areas which will be the takeaways for you for our financial review. One is going to be -- I'm going to talk about our accelerated revenue growth. Two, I'm going to talk about -- also our margin improvement opportunity that we have going forward. I'll also speak a little bit about our strong cash flow from operations and our effective capital deployment going forward. And then lastly, I'll talk about our 2020 guidance and also talk about our medium-term outlook, which is for our next 2 years. When you take a look at our performance over the last 3 years, we have consistently driven financial performance very well since 2017. If you take a look at our revenue, we have grown revenues at an 8% CAGR since 2017. We've seen our margins expand by 120 basis points from 14.5% to 15.7%, and then we've also seen adjusted EPS increase at a CAGR of 9% since 2017. When we take a look at our -- when we go through our financial growth model, there's really 3 areas that we want to cover and take a look at. One is our revenue growth, which is really being driven by Analytics, and you'll see that when I go through a number of additional slides. We also take a look at our margin expansions because we're really focused on growth and also profitability. And lastly, we're focused on EPS growing faster than revenues. When we take a look at our revenue growth, if we take a look at our momentum in Analytics, and when you look at where we were in 2017, Analytics was 28% of our total revenue in 2017. It has grown to be 38% of total revenues in 2020. You've actually seen a little bit of growth in Analytics from 2019 to 2020, which really shows the resiliency and really the need for analytics in a COVID year that we were able to grow Analytics revenues in a COVID year versus 2019. When you look at also at our revenue base, there's a very strong reoccurring revenue stream within our base. When we talk about reoccurring revenue, we talk about revenues that are contracted more than 12 months. And that really has become 80% of our total revenue base, up from 77% in 2017. If you look at the average length of our contracts in Operations Management, they're very solidly between 4 and 5 years, which really creates that steady revenue stream for us. And now we're starting to see also a portion of our Analytics business become much more annuity-based now going forward. And all in all, you start to see our project total based revenue come down to right around 20% now. So really being driven by that reoccurring revenue stream of 80% of our overall business. When we take a look at our adjusted operating margins, we have seen expansion from 2017 to 2020 from 14.5% to 15.7%. And so what is really driving that expansion at the end of the day. One is the growing share of a more profitable Analytics business. Overall, Analytics is going to have a more profitable operating margin than our Operations Management business. Two, is also our effective cost management that we've put in place over the last couple of years that's really helped drive our margins. And then lastly is operating leverage. And more specifically, at the SG&A line, as it is becoming a smaller percentage of overall revenues. What you are seeing also in our P&L is our operating margin being inflated in the second half of 2020 at right around 19%. And so what's really driving right now, that increase in our margins during the 6-month period. One is, there's a number of temporary cost benefits that we're seeing because of the COVID environment. And we're really seeing lower T&E, transportation and facilities costs that are really helping drive up our margins. Two is also the 2020 people cost initiatives that we enacted back in Q2 that we talked a little bit about in a number of our earnings calls that we put in place back at the beginning of the pandemic period. And then lastly, you'll -- we also saw some higher employee utilization during the 6-month period. So that has all contributed at a higher margin in the second half of the year. When we take a look at adjusted EPS, we have seen EPS grow at a 9% CAGR since 2017. And really, the 2 big drivers of that is our revenue growth, which I just talked about at an 8% CAGR, and then also our AOPM improvement from 14.5% to 15.7%, and it's really from effective cost management and SG&A leverage during that period. When we take a look at our performance, in 2020 during this COVID period, you're seeing the business come back very well beginning in the third quarter. We generated $246 million in revenue in Q1 in the pre-COVID period. We dipped to $222 million in Q2, really in the heart of this COVID pandemic period. But we're seeing a bounce back in our business significantly, really starting with Q3. And Q3's revenues are right at $241 million and we have visibility now into Q4 and that the midpoint of our guidance really puts us back to where we were in Q1, which really sets us up really well for going into 2021 in a growth trajectory now going forward in that we were able to get ourselves back to Q1 in revenue in Q4 of this year. And then on top of all of that, what you're seeing also on adjusted EPS is an acceleration in our adjusted EPS. We were at $0.81 in adjusted EPS in Q1, dipped a little bit down to $0.53 in Q2 with the reduction in revenue, but we've had a very nice bounce back in adjusted EPS in Q3. And in Q4, we continue to see that really driven by the increase in our margins that I just talked about at right around 19% for the second half of the year. When we take a look at our capital, we have been effectively deploying and managing our capital. You're seeing our cash balance at $265 million in December 2017, growing to an estimated $330 million at the end of December in 2020. The big driver here is cash flow from operations. Really driving $370 plus million in free cash flow during this period. The one thing I will highlight here is if you take a look at Q2 of this year, we generated $72 million in cash flow from operations during that period. It is the highest amount ever in cash flow from operations that we have generated. And it really shows the resiliency of the business model, really being able to generate a significant amount of cash in a -- right in the middle of the COVID pandemic period. If we take a look at our criteria now for deploying capital to both M&A and share repurchase, what are we really focused on now, going forward? We're focused on digital, analytics and cloud investments. We're focused on industry solutions, particularly for health care and insurance. When we think about M&A, we were funding M&A with existing cash and some debt. And the big driver to our financial decision now going forward is ROIC, return on invested capital, which is really going to guide us now going forward on where to make our best investments from a financial point of view, going forward. When we take a look at the share repurchase, we do have a program in place now that steadily reduces our share count now going forward. And we are using our excess cash now to buy back shares. When we take a look at 2020 guidance, I would just want to remind everyone where we are in terms of guidance, now that we are coming to the end of our calendar year. Our revenue last year was $991 million, this year, we're -- the midpoint of our range is $954 million, which is just a 2% to 3% decline on a year-over-year basis in the middle of this pandemic period. And this -- keep in mind, this incorporates a little bit of a trough in Q2, but we've come back very nicely in Q3 and Q4. But also, when you take a look at our adjusted EPS, we've been able to grow EPS between 10% and 13% since the prior year period, which really shows the resiliency of our business model and the opportunity to really be able to reflect some increased margin during 2020. And then lastly is our medium-term outlook, and I want to focus on a number of areas here. One is, we do look at revenue growth of 10%-plus for the medium-term, and I'm talking about the next 2 years. That's up from an 8% CAGR rate from 2017 to 2020. So we are seeing an acceleration from an 8% CAGR rate to 10% plus now, going forward. So what's really driving that 10% plus revenue growth? One is, we believe Analytics will grow between 13% and 15% within next 2 years, which is really going to help our revenue net growth really going forward in this medium-term outlook. We also envisioned Operations Management to grow between 6% and 8% during this 2-year period. The one thing to note in the 6% to 8% is that is net of productivity improvements during that period. So if you take a look at the gross growth of Operations Management, it is higher than 6% to 8%. This is just the net -- this is just net of productivity improvements for the next 2 years. Overall, we do see our operating margin being between 16% and 17% in 2022. So keep in mind, we were at 14.5% in 2017. We're growing our margin to right around 15.7% in 2020, with an incremental margin benefit from temporary cost benefits in the second half of the year, and we do see ourselves growing AOPM to between 16% and 17% in 2022 in a more normalized period than where we are today. So it's really getting back to more of a normalized operation period during 2022. And then lastly, given the growth in revenue of 10% plus, an expansion of margins between -- to get to between 16% and 17% in 2022, that all contributes to EPS growing much faster than revenue growth for the next 2 years in our medium-term outlook. So in summary, when we look at our medium-term outlook, we're very confident in our numbers. We are very confident in the 10%-plus revenue growth. We do see margin expansion getting to between 16% and 17% in 2022. And then we also envision EPS growth growing faster than revenues and really being contributed by revenue growth and AOPM growth. From there, we'll go to our question-and-answer period. [Operator Instructions]

First question is you can you talk about the profitability potential for the business as EXL moves to more IP-related industry solutions? Would that change how you're contracting or engaging with your clients?

I guess, Steve, I could offer a couple of thoughts. And then I think some others may want to weigh in. I would say it does bring us the opportunity for more value-based pricing as we incorporate more of our AI-driven solutions in our end-to-end sort of our client. I know this may take the form of subscription-based pricing or -- but likely be wrapped up in a larger end-to-end value proposition for a client's particular need. In regard to engaging and profitability, I do think we'll get more leverage as we're able to put an marketing effort concentrated on these IP solutions. And so there is opportunity to improve margin as we go.

So if I could just emphasize that a little bit. So there are 2 aspects to how the contracting on that changes a little bit. One is, I think we start taking more accountability for the outcomes. And you would see that across the business right now, there's a greater percentage of our work that is outcome-based pricing. And in our experience, outcome-based pricing actually increases our overall profitability because we are taking ownership of it. The other portion of it is just the scope of what we do starts to increase. So it starts becoming more end-to-end and the contracting then starts having to place SLAs on the end-to-end output as opposed to a more minute portion of the work, which used to happen a few years ago. So in both of those cases, while the nature of the contracting changes, but it's to add to the overall value of the contract as well as the profitability of it.

If I could just expand on that in a number of instances where we've actually contracted for some of our newer industry solutions. Unlike in the past, where effectively, it turned out to be a cost-plus type pricing regime and where there was, to a great extent, price was determined by competitive pressures. Where you've got distinct IP infused solutions, clients are actually willing to quantify the value that they're going to extract from that solution and share some of that value. So your pricing, like Anita said, becomes value based. And we are actually seeing that in actuality as we sort of move forward down the path of more and more IP infused industry solutions.

Thank you, Pavan. Maurizio and Vivek, please. How important is doing more M&A to the future growth of the Analytics segment? And how long can our organic growth in Analytics sustain at this current level? You gave a medium-term target of -- out there, but it can it go further than that in years ahead?

Sure. So I could go first, Maurizio, if that's okay. So I think for us, M&A continues to be a very important lever for looking at continued growth in the Analytics business. But for us, M&A is more about capability enhancement rather than scale. So we're looking at several discrete opportunities in building out our cloud capabilities, in boosting our AI and ML capabilities and doing more with the data modernization theme which would help us capture that growth rate in a much faster way. Active discussions underway, and we certainly hope to see more activity and more M&A happen there. On the point about the organic growth, as Maurizio pointed out in his section, we are actually seeing a fundamental shift coming out of the pandemic, and we believe that the result of that shift is actually going to increase the opportunities for Analytics. So as a result, what we've done today in terms of our long-term guidance is we are actually taking up that organic growth rate and showing you what that growth rate could be just based on some of these trends that we are seeing. Maurizio, over to you.

Yes. So Vivek has hit on a lot of points that I would have brought up. The only other thing that I would add is as we think about these capabilities that we add to our existing stack of capabilities that we have today. It's really to augment our growth now going forward. We are accelerating our growth of 13% to 15%. Acquisitions, it should really be able to augment that going forward in really that capability space now going forward. So I would think we're more as augmenting a very good organic growth rate going forward.

Thank you. Can you talk about, please, what's the revenue model for digital and data based services within Operations Management? How large is it? And how much of your 6% to 8% growth is going to come from digital and data related services?

So let me take that. So firstly, digital is actually infused in our Operations Management. So to some extent, it's a little difficult to sort of clearly demarcate how much is digital and how much is pure-play Operations Management. But I will say that digital plays a key role in winning new business and growing new business. Now in terms of the pricing models, typically, when we bid for new business we actually commit to productivity improvements or efficiency improvements. A lot of these actually require the deployment of digital solutions in order to deliver those. So that's actually built into our Operations Management pricing. But we also have a suite of stand-alone AI infused solutions that work off the cloud for which we use the pricing models that we have -- out earlier in terms of value-based pricing. Now the extent of deployment of Digital, I'd say in our top 25 strategic clients in some form or manner, AI and ML has been deployed, be it for import, intake, whether it be for customer interaction, whether it be for decisioning within a process, whether it be in terms of preparing data in order to actually improve the effectiveness of the process. We expect that to continue to grow and I would think that over a reasonable period of time, more than 50% of our large clients would actually have an element of digital AI/ML integral in their operations with us. Vikas, Sam, you want to add to that?

Sorry. Pavan, go ahead.