Steven N. Barlow - Vice President, Investor Relations Rohit Kapoor - Vice Chairman & Chief Executive Officer Vishal Chhibbar - Chief Financial Officer & Executive Vice President.

Joseph Dean Foresi - Cantor Fitzgerald & Co. Anil Kumar Doradla - William Blair & Co. LLC Rick M. Eskelsen - Wells Fargo Securities LLC David J. Koning - Robert W. Baird & Co., Inc. (Broker) Frank Carl Atkins - SunTrust Robinson Humphrey, Inc. S.K. Prasad Borra - Goldman Sachs International David M. Grossman - Stifel, Nicolaus & Co., Inc..

Good day, ladies and gentlemen, and welcome to the ExlService Holdings, Inc. Third Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will be given at that time. As a reminder, this call is being recorded.

I'd now like to turn the conference over to your host for today, Mr. Steven Barlow. Sir, you may begin..

Thank you, Ben. Hello, and thanks to everyone for joining EXL's third quarter 2015 financial results conference call. I'm Steve Barlow, EXL's Vice President of Investor Relations. With us here today in New York are Rohit Kapoor, our Vice Chairman and Chief Executive Officer; and Vishal Chhibbar, our Chief Financial Officer.

I hope that you've had an opportunity to review our quarterly press release we issued this morning. We've also updated our investor factsheet in the Investor Relations section of EXL's website. As you know, some of the matters we'll discuss in 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 that are expressed or implied by such statements.

Such risks and uncertainties include, but are not limited to, general economic condition, those factors set forth in today's press release, discussed in the company's periodic reports and other documents filed with the Securities and Exchange Commission from time to time.

EXL assumes no obligation to update the information presented on this conference call. During our call today, we may reference certain non-GAAP financial measures, which we believe provides useful information for investors. Reconciliation of these measures to GAAP can be found in our press release, as well as the investor factsheet.

Now I'll turn the call over to Rohit Kapoor, EXL's Chief Executive Officer..

number one, deliver superior customer experience; number two, design and manage operations that are global and nimble; number three, transform enterprise-wide decision-making, leveraging data analytics; and number four, navigate the increasingly complex regulatory environment.

EXL's suite of differentiated capabilities, domain expertise, ultra-client centricity, track record of world-class service delivery, and focus on delivering business impact, positions us well to deliver on these four objectives.

Our performance in the first nine months of 2015 has strengthened our belief that we can capitalize on this attractive market opportunity.

As we look ahead, a strong deal pipeline, market acceptance of our capabilities, successful ramp-ups, driven by strong service delivery and the potential to further expand margins, are enabling us to carry strong momentum into 2016.

We believe we have the right strategy, the right assets and the right people to capitalize on this momentum to deliver strong growth and improved profitability. With that, I will turn the call over to Vishal..

Thank you, Rohit, and thanks, everyone for joining us this morning. Unless otherwise stated, all numbers mentioned are excluding disentanglement cost for our transitioning client, which was accounted for in 2014. There are no disentanglement costs in 2015.

EXL reported a strong third quarter with revenues of $163.5 million, up 23.8% year-over-year or 25.9% on a constant currency basis. Organically revenue was up 15.4% year-over-year and on a constant currency basis excluding transitioning clients. Sequentially we grew 5.1% or 5.6% on a constant currency basis.

For the nine-month period, organic revenue growth at a constant currency basis excluding transitioning clients was 14.6%. EXL's revenue growth was broad-based across all business segments driven by growth from existing clients and ramp ups from client wins in 2014 and early 2015 across our verticals.

Operations Management revenues grew 15.3% year-over-year on a constant currency basis. Organically revenue was up 12.6% year-over-year on a constant currency basis excluding transitioning clients.

This organic revenue growth coupled with the tailwind from the impact of acquisitions more than offset the headwind of approximately $12.9 million from transitioning clients in Q3, 2014. Sequentially, Operations Management revenues increased 1.9% on a constant currency basis.

Analytics & Business Transformation revenues grew 60.1% year-over-year on a constant currency basis, including the impact of acquisition of RPM. Organically, the segment grew 23.2% year-over-year on a constant currency basis. Sequentially, Analytics & Business Transformation revenues increased 15.2% on a constant currency basis.

The core Analytics revenues grew 35.1% year-on-year on a constant currency basis. This Analytics revenue achievement marks the seventh quarter in a row where revenues have grown over 35% year-over-year. The revenues growth was led by clients from our healthcare and banking financial services verticals.

Sequentially Analytics revenues grew 16.1% on a constant currency basis. RPM this quarter contributed $11.6 million of revenues and we now expect it to contribute $33 million for the year.

Our top 10 client concentration has improved from 58% of total revenues at the beginning of 2014 to 42.4% in Q3, and sequentially our client concentration of top 10 clients improved by 150 basis points indicating our success in expanding our revenue base. Now, turning to margins.

Our efforts to improve margins are being reflected in this quarter's results. Gross margins improved by 120 basis points year-over-year to 36.9%. Excluding the impact of transitioning clients and lower gross margin profile of acquired businesses, our margins improved by 380 basis points year-over-year.

This was driven by an FX tailwind of 130 basis points, improved utilization in Analytics & Business Transformation of 170 basis points and productivity improvements in our Operations Management of 80 basis points.

Analytics & Business Transformation gross margins improved by 770 basis points driven by higher volumes and better utilization impact of about 680 basis points and an FX impact of 90 basis points.

Sequentially, gross margins improved by 150 basis points due to an FX tailwind of 60 basis points and 90 basis points due to increased volumes and better utilization in Analytics & Business Transformation.

By segment, Operations Management gross margins increased by 30 basis points sequentially and Analytics & Business Transformation gross margins increased by 440 basis points driven by improved utilization. SG&A expenses for the quarter was 19.3% of revenues, up 30 basis points year-over-year.

Sales and marketing expenses was 7.8% of revenues, up 90 basis points on a year-over-year basis. This increase is due to higher employee-related expenses on account of investments in our front-end teams.

The increase in sales and marketing expense was partially offset by improved operating leverage through productivity and cost optimization measures in our G&A expenses. As a result, our G&A expenses decreased 60 basis points year-on-year basis to 11.5%. Sequentially, SG&A expenses were down 110 basis points.

Depreciation and amortization expense decreased 40 basis points year-on-year basis to 4.9% of revenues. Sequentially, depreciation and amortization expense has decreased by 30 basis points owing to amortization of intangibles related to acquisitions.

Adjusted operating margins improved by 270 basis points year-over-year to 17%, driven by FX impact of 150 basis points, operating leverage of 90 basis points and gross margin impact net of transitioning clients of 30 basis points.

Sequentially, adjusted operating margins improved by 310 basis points driven by FX impact of 70 basis points, operating leverage of 150 basis points and 90 basis points due to significant improvement in our gross margin profile of Analytics & Business Transformation.

Based on our strong performance this quarter, we now expect our full year adjusted operating margins to be between 14.6% to 15%. Foreign exchange income for the quarter was $200,000. We expect foreign exchange gain of approximately $2.4 million to $2.6 million for the year 2015. Our tax rate for the third quarter was 33.3%.

Sequentially, the effective tax rate increased by 190 basis points due to impact of certain discrete items. Excluding the impact of these discrete items, Q3 tax rate would have been 30.6%. We forecast our tax rate to be in the range of 30% to 31% in fourth quarter.

Adjusted EPS for the third quarter was up $0.58 – was $0.58 up $0.14 year-over-year and $0.10 sequentially, driven by a strong revenue growth and improved operating margins which we have discussed earlier.

Adjusted EBITDA was $33.3 million for the quarter with adjusted EBITDA margins of 20.4%, and for the nine months the adjusted EBITDA was $85 million with a margin of 18.4%. We continue to maintain our focus on collection and generating operating cash flow. Our DSO for the quarter was unchanged at 54 days.

Capital spend for the third quarter was $6.7 million, which was primarily spent on facilities, hardware, software and telecommunication equipment. Our capital spend in the first nine months was $21.1 million and we expect the CapEx for the full year to be in the range of $24 million to $26 million.

We continue to buy back shares in Q3 and bought back 221,000 shares in the quarter for $8.1 million. Through September, we have purchased 354,000 shares for $12.8 million at an average purchase price of $36.2. Our balance sheet remains strong.

At the quarter end we had cash and short-term investments of approximately $184 million compared to $173 million as of June 2015. Our revolver balance remains constant at $70 million, thereby giving us a net cash position of $114 million as of this quarter end. Now, turning to our guidance.

We are pleased to raise our revenue guidance for the year based on the 65 rupee to a dollar exchange rate to $623 million to $626 million, from $610 million to $625 million despite a 0.5% FX headwind from previous guidance.

ESL's guidance at the midpoint represents a strong annual revenue growth of approximately 19% including the impact of acquisition. Our full-year adjusted operating margin estimate is 14.6% to 15%, which represents a 50 basis point increase at the midpoint to our previous adjusted operating margin range.

We are raising our adjusted EPS guidance to $1.95 to $2.01, from $1.88 to $1.98, increasing the midpoint by $0.05 due to higher revenue and higher margin, offset by investment in production technology and people to drive growth in future years.

In conclusion, we had a strong revenue growth in both of our operating segments and delivered organic growth and a profitable quarter. We remain on track for a record year in revenues, cash flow and adjusted EPS.

Our predictable recurring revenue stream combined with a revenue visibility from client ramp ups and new logo (27:58) wins puts us on track to achieve our two (27:58) goals in future quarters. And now, Rohit and I would be happy to take your questions. Thank you..

In the interest of time, we are asking that you please limit yourself to one question and one follow-up. And our first question comes from the line of Joseph Foresi of Cantor Fitzgerald. Your line is open. Please go ahead..

Hi. Good morning. I just had a couple of quick questions here. First, on the 15% organic growth rate, I think that obviously excludes disentanglements.

Was there anything else there from the transitioning clients? I guess where can that rate go from here and were there any one-times in the number? I'm just trying to get a better feel for what that number represents..

Yeah. So this quarter we had organic growth rate of 15.4% and though you are right, there were some one-time benefits we had, especially due in our Transformation Analytics business, where Q3 seasonally is the most strongest, and we had higher project revenues in that.

We also had a one-time license sale which contributed growth in our Operations Management. And based on that, I think the Q4 we expect, there will be marginal to flattish quarter in terms of – marginal decline to flattish quarter sequentially for Q4..

Okay. And then, my follow-up, or my second question, just so I get an understanding of the margins. I thought you might have said that there was 150 basis points from currency.

But maybe we could just get the margin breakdown year-over-year, and your expectations on what the margin increase would be, currency versus productivity, going forward?.

Yes. So on adjusted operating margins, we grew by 270 basis points year-over-year, and we are at 17%. This was driven by FX impact; we had about 150 basis points, so the core growth was about 120 basis points excluding FX. Operating leverage of that was 90 basis points and gross margin impact, net of transitioning clients, was 30 basis points.

Like I said, going forward, we do expect that for the full year, we will be between 14.6% to 15% of operating margins, and we will continue to expand that in 2016..

Got it.

With about half of that being productivity gains, just to be clear?.

Yes..

Okay. Thank you..

Thank you. Our next question comes from the line of Anil Doradla of William Blair. Your line is open. Please go ahead..

Hi, Rohit, Vishal, congrats on the results and great to see the company turning around. So, Rohit, first big picture question. So clearly, 2015 is turning out to be a breakout year, some good strategic investments, changes in business model.

So going forward, when we look at 2016 and beyond, without really giving any guidance per se, but what do you think is the new norm of EXL's growth rate? Is this a low-teens growth rate company or a mid-teens growth rate company?.

Thanks, Anil. I think one of the most fundamental changes that is taking place in our business that's reflecting in the growth rate is, in the previous quarters, a large part of our growth used to come by just one business segment, which was the Analytics business growing at a very, very rapid pace.

Now what we are seeing is that the larger part of our business, which is Operations Management, that has also kicked into high gear and has now demonstrated two quarters of growth rate which has been in the double-digits.

So frankly, we've got both our business segments, Operations Management as well as Analytics & Transformation services, both growing nicely. And I think that's what is extremely positive for looking at 2016.

The Operations Management business, again, we break it up into looking at our top 10 clients in Operations Management, looking at the next 20 clients, and then looking at new client acquisitions in Operations Management.

We're actually extremely pleased that all three segments within Operations Management from this client breakout analysis is showing good strong growth. So typically for us, our top 10 clients would have grown at a moderate level, but now we are seeing that our top 10 clients are actually growing at, again, a double-digit pace.

We're seeing the next level growing even faster, and then we are seeing the pace of acquiring new customers being very, very healthy and strong. So actually, we feel good about the momentum.

To address your question about the growth rates going forward, I think we've said that we would expect organic revenue growth rate on constant currency to be in the 10% to 12% range, and we would expect that our Operations Management business would be slightly below that, and our Analytics & Transformation business would be above that.

And we have full confidence that that's something which is going to continue going forward..

Great. And coming to the Analytics business, it was interesting that you pointed out that a proportion of your business is geared towards longer-term contracts.

Can you give us some sense of the breakdown on what proportion of your Analytics business is now geared towards long-term contracts? And eventually, as you look out at next two years, three years, four years, how do you think this will play out? Would this be 100% long-term business? Or you think it's going to be broken out half and half and so forth?.

Sure. So, Analytics for us is a very differentiated and a strong product offering that we've got as a service provider. We have two-thirds of our Analytics business currently which is in an annuity format. So we've got long-term contracts representing two-thirds of our business volume here in long-term annuity contracts.

We would expect, on a go-forward basis, that this trend would continue. We would continue to acquire new customers, which might engage with us on a project basis or with shorter-term contracts.

And as they see our capabilities and our service delivery and our ability to add value to the company and deliver strong business outcomes, we would expect them to convert from a project-based revenue format to an annuity-based revenue format.

And we think that this is a very healthy mix to have the predominant part of our Analytics business be on an annuity format and then a small part of it to be on a project-based format..

Wonderful. And final question is, you talked about a 400 bps margin expansion from primarily greater utilization on the Analytics front.

Have you extracted most of the kind of margin improvements on that business line? Or do you think you're halfway through? You've got some more to go? Or how should I be looking at continued improvements on that front?.

So our viewpoint is that for Analytics to play out at its full profit potential. Because of the fact that we deliver significantly higher business value and outcomes to our clients, that this would be a business line that delivers, over the long term, higher margins than our corporate average.

At present, we have been able to take up the margins on this business very, very meaningfully. Going forward, a large part of this is also going to be contingent upon the utilization rates because that's a very, very significant component of the margins of this business.

There is a fair amount of investments that we are making in this business in terms of creating new products. We've just announced creating a product development and an innovation lab just for Analytics.

So as we grow larger in size and scale and as our utilization rates improve and as these investments that we are making get normalized over a much larger revenue base, we think there is opportunity to expand margins in the future..

Great. And congrats once again, and looking forward to an exciting 2016 too..

Thank you..

Thank you. Our next question comes from the line of Edward Caso of Wells Fargo. Your line is open. Please go ahead..

Hi. Good morning. It's Rick Eskelsen on for Ed. I guess, just building off of the last couple of questions on margins. I'm wondering if you could talk about where you think your longer-term adjusted operating margins could get to.

Do you think we could get back to the 16% plus levels that you've reached in the past?.

Hi, Rick. Good morning. This is Vishal. As I've been saying earlier that we will be able to improve our adjusted operating margins and, for 2016, we expect that the margins will improve year-over-year and I think we have accelerated some of that margin improvement into this year.

So we expect that next year we should be able to improve adjusted operating margins by another 30 basis points to 50 basis points over and above where we will end up this year. But over the long run, we should be in the mid-teens in terms of higher to mid-teens in the long run being our target for adjusted operating margin..

Thank you. Then just a follow-up.

Just wondering if you could kind of help us with the seasonality now with RPM being added into the mix on the Analytics & Transformation side of things, what's the typical seasonality we should be looking for, particularly in the fourth quarter as you move forward for really both business lines, but the focus more on Analytics side? Thank you..

Yeah, hi. So I think typically Q3 is our strongest quarter for our Business Transformation and Analytics segment.

And Q4 we do expect that due to the impact of number of days – working days and holidays, there will be lower impact, lower volumes, from our project business and also in RPM, which is a volume-driven business, and we expect that the volumes will decline in the RPM business.

Overall, we do expect that the Operations Management business actually will grow sequentially from Q3 to Q4. Analytics core business, excluding our RPM business, would also sequentially grow.

But there will be a significant decline in our Business Transformation and Consulting business of us (40:05) and some of the utilization and volumes in our LifePRO, in our OSI and RPM business will go down..

Thank you very much..

Thank you. Our next question comes from the line of Dave Koning of Baird. Your line is open. Please go ahead..

Yeah. Hey, guys. Great job. I just have a few here. So, usually EPS is up sequentially in Q4 I think we went back several years and in this year, too, you had a little higher tax rate in Q3 than you expect in Q4.

So it just seems like, if we look at any sort of normal trend, you'd have a really nice progression to Q4, but it looks like you're guiding it down just a bit. Maybe you can talk through that thought process..

Yeah. So I think one of the things which will happen in Q4 is that we're also making some investment in Q4 to drive growth into next year. So we are making investments in robotics and software tools. We are making some investments on employee engagements and we're also making investments in sales and marketing.

So I think if you factor that in, combined with the fact that the adjusted operating margins will decline sequentially due to the seasonal factor that I outlined earlier, we do expect that the – as you are rightly pointing out, typically we have had EPS growth in Q4, but this year I think the Q4 would be slightly down in terms of adjusted EPS..

Okay. No, that totally makes sense. And then, I guess, secondly, the RPM business has been doing really well.

What's kind of the organic growth rate just of RPM by itself? And the reason I ask is I know you're going to anniversary that I think in maybe four months or something like that, and so all of a sudden it will be part of your total Analytics organic growth.

But is it pretty similar to that 30% growth that you guys get organically to?.

Hi, Dave. This is Rohit. On our RPM business, the organic growth rate currently is not at the same level as the Analytics Services business. It's a moderate growth rate business for us.

However, keep in mind that we've just been six months or seven months into this acquisition and some of the revenue synergies that we have anticipated in terms of doing this acquisition have still not fully kicked in. So we would expect a much better growth rate, given the fact that we can cross-sell these services to our existing insurance clients.

And as we expand these services out of P&C and move into life insurance and into healthcare and as we expand geographically out of the U.S. and take it global, we will get a much better growth rate associated with this business.

So, frankly, we are pleased with how the RPM business is currently performing, and it's performing in line with the original business case at the time that we did the acquisition, but we anticipate that there is a further opportunity for us to accelerate the growth rate here..

Okay. Great. And just two quick ones.

What was Overland revenue during Q3? And then if tax rate for next year are pretty similar to that kind of 30%, 31% normalized rate?.

Yeah. I think the tax rate would be between the 30% to 31% range for 2016. I think that was something I've highlighted earlier also. And Overland contributed about $17 million this quarter..

Okay. Great. Well, great job, guys..

Thank you. Our next question comes from the line of Frank Atkins with SunTrust. Your line is open. Please go ahead..

Thanks for taking my questions.

Wanted to ask a little bit about retention initiatives and the hiring environment on the Analytics side specifically? What are you seeing out there?.

Yes. I think for us on the Analytics side, number one, we are very, very pleased with some of the branding and the employee – our ability to attract the right set of employees from the premier engineering colleges and the management colleges in India. And so we've got a great employee brand reputation out there that seems to be working nicely.

From a retention standpoint, I think this is one area which is obviously growing very, very rapidly and, therefore, there is attrition associated with this business. Our attrition rates tend to be a little lower than the industry.

And we are making conscious investments in a number of different areas to try and make sure that our retention rates remain above industry average. So we're investing in a number of employee engagement activities.

There is a very clear career pathing that we've established for folks in this business, which is a strong career growth given the strong growth rate of our Analytics business.

There's new investments that we've made in the infrastructure and the physical infrastructure associated with this business, as well as I think the investments that we are making to engage everybody in idea generation and innovation, that makes us a really, really attractive place for folks in Analytics to be part of.

So we think we would be able to manage this a lot better than competition..

Okay. Great. That's helpful. We've seen some mixed results in the insurance vertical at some peers.

I wanted to ask, any areas of strength or weaknesses within that vertical that you've seen?.

Insurance for us now has become a fairly significant and a meaningful vertical by absolute dollar, size and scale. We are seeing that that business for us is growing quite nicely. However, there have been some transitioning clients, which everybody is fully aware of.

One of the new trends that we are seeing in the insurance space, which we are really pleased about, is the expansion of our client relationships with European carriers. And that's giving us an opportunity to expand our business in that segment across geographies and I think that's a very, very attractive opportunity set for us..

Okay. Great. And last one from me.

Could you just give us an update on delivery mix, and do you see any changes in that going forward as you look at the portfolio of delivery service?.

Yeah. Hi. I think currently, our major locations for delivery have been India, Philippines, Europe and U.S. And with the acquisitions which we have done in the past, last with the Overland acquisition and the RPM acquisition, our delivery from U.S. has significantly increased.

And as a consequences, I think the delivery percentage from India is now at about 70%, compared to maybe 18 months ago or two years ago at which was about 85%, and so U.S. has very significantly increased to about – how much is that, the total (47:55) number – 30%? About 28%, 29% – 22%..

Okay, great. Thanks so much..

Thank you. Our next question comes from the line of S.K. Prasad Borra of Goldman Sachs. Your line is open. Please go ahead..

Thanks for taking my question. A couple, if I may. First, probably on Operations Management, you talked about some one-time benefits from license growth.

Can you elaborate on that? Are you seeing some more momentum on license growth, given the new products you are coming out with?.

Sure. What we have done, S.K., is that we've actually invested in upgrading our technology platforms significantly. And so, for example, we introduced a new version of LifePRO 17 that got rolled out, and we are preparing to work on LifePRO Version Number 18. Similarly, we have upgraded our technology platform in CareRadius, which is CareRadius 3.0.

And what we are doing is, we are embedding analytics and data visualization as key new attributes in these technology platforms. And I think the addition of these elements is resonating quite nicely in the marketplace. And so we are seeing growth take place here.

While we continue to make the shift towards BPaaS using these technology platforms, the standalone license sales continue to take place, and those are going to be lumpy, and they are going to be – I guess, they'll fall when they fall, and we did have a good quarter in Q3 from those license sales..

Okay. That's great. And in terms of the focus you have on the verticals, obviously insurance seem to be doing much better than others, but you've also talked about healthcare quite a lot over the last few quarters.

What's been the momentum in healthcare and, both from an organic investment perspective and also acquisitions, what's your latest thinking on that?.

Sure. I think we continue to think that healthcare is a very, very attractive opportunity. I think our business in healthcare continues to grow very, very strongly, and the growth rate of our healthcare business is much higher than the corporate average, and it's one of our fastest-growing industry verticals.

The part that we are pleased about in healthcare is that we've broadened out our growth across multiple clients and multiple different types of processes and capabilities. So that's been very encouraging. There's also been a tremendous amount of traction that has built up around analytics and healthcare.

And again, some of the work that we are doing around payment integrity and claims overpayment, these are very, very large and rich opportunity sets for us, and I think that's progressing very nicely..

Okay. That's great. Good set of results. Thanks, Rohit. Thanks, Vishal..

Thank you. And once again, ladies and gentlemen, as a reminder, please limit yourself to one question and one follow-up. Our next question comes from the line of David Grossman of Stifel. Your line is open. Please go ahead..

Thank you. So, Rohit, you mentioned the optimization of pricing, both in your comments about the Operations Management business as well as the Analytics business.

Can you help us better understand what you mean by that, and how sustainable these pricing actions are as we go into next year?.

Sure, David. I think one of the things which we have seen is that there has been a movement away from an FTE-based pricing model towards transaction-based pricing and outcome-based pricing model.

And it's really – as we move towards these different types of engagement models, our ability to understand the appropriateness of pricing and being able to price them at the right price points, that becomes a critical judgment factor.

And as we experience more of these clients, our ability to hone in our skills associated with that becomes a lot better.

The other thing is, when we go in for pricing, which is on an outcome-based pricing model, it does takes us some time to be able to get to the right levels of productivity and get to the right levels of profitability associated with these contracts. And we've been able to do that.

So frankly, we think the changes that we've made out here, these are sustainable changes and these would carry forward as we go into 2016..

So is there any way you can disaggregate the unit growth versus pricing growth that you're seeing in the two segments?.

It's very difficult for us to do that because the price realization increase that takes place on transaction-based or outcome-based is all pooled together in terms of the revenue. It's very difficult to break it out between volume and price..

Okay. And then just secondly on just the backlog.

Can you give us any sense on the Operations Management side what the backlog looks like at the end of September versus what it looked like at the end of September last year?.

Sure. So I think the backlog for us is good and strong and let me just try and help you a bit out here.

There were a number of new strategic clients that we signed up last year and the growth that you're seeing in the Operations Management business this year, particularly in Q2 and Q3 of 2015, is a reflection of us onboarding those new clients that we signed up in 2014, and that revenue is coming through right now.

Now in addition to that, we are very pleased with the new clients that we've signed up in 2015, and these are likely to contribute revenue growth for us in 2016. Now as you know, the steepest ramp in revenue growth from new clients really takes place in year two and year three.

So frankly, where we are today from a backlog perspective is a very, very good position where we've got new clients of the vintage of 2014 that are going to scale up in 2016 and 2017, and then we've also got the new clients from the vintage of 2015 being added to that portfolio. So we feel very good about where we are. [Abrupt End].