Good day, ladies and gentlemen, welcome to the EXL Q1 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Charlie Murphy. You may begin.

Thank you, operator. Welcome, and thanks to everyone for joining our first quarter 2012 earnings call. I'm Charlie Murphy, Head of Investor Relations. With us today in New York are Rohit Kapoor, our Vice Chairman and Chief Executive Officer; and Vishal Chhibbar, our Chief Financial Officer. We hope you got an opportunity to review the first quarter earnings press release we issued last evening after market closed. We've also made available the updated investor fact sheet on the Investor Relations section of EXL's website. 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 expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, general economic conditions, those factors set forth in today's press release, discussed in the company's periodic reports and other documents filed with the Securities and Exchange Commission from time to time. EXL assumes no obligations to update the information presented on this conference call. During the call today, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliations of those measures to GAAP can be found in the press release. Now, I will turn the call over to Rohit.

Thank you, Charlie, and welcome everyone to our first quarter earnings call. The agenda for today's call is as follows: I will begin by discussing first quarter performance and comment on the demand environment; then I will review some key recent additions to EXL's management team and discuss our expectations for 2012; after that, I will turn it to Vishal for a more in-depth review of first quarter financials and our guidance; and finally, we'll open it up to your questions. In the first quarter, EXL reported revenue of $104.6 million, up 43% year-over-year and in line with our expectations. Year-over-year growth was driven both by acquisition and organic growth. A major portion of our sequential revenue growth came from strategic outsourcing clients. Expanding relationships with our existing strategic clients remains one of our most important growth drivers. We see robust opportunity to magnify many of our strategic relationships to multiples of their current sites. While our outsourcing business was in line with our projections and showed strong growth, our transformation business performed slightly below our expectations. In transformation, start dates for a few key projects were pushed back. This led to lower revenue, utilization and gross margin versus the fourth quarter. In addition, during the quarter, we were hiring for several new projects which begin later this year. As many of you are aware, the transformation business has a relatively high degree of fixed costs as our most critical assets here are our industry-focused professionals. When there is a temporary pause between project engagements, this business sees negative operating leverage in the short term. However, when utilization fix back up, the business should see strong margin expansion. I am very optimistic we will see clear improvement in both revenue and gross margin in transformation over the course of the…

Thank you, Rohit. And good morning, everyone. In the fourth quarter, EXL reported of $104.6 million, up 43% year-over-year and 2% sequentially, meeting our expectations. Year-over-year revenue growth was driven both by acquisitions as well as strong revenue increases from new and existing clients. Our sourcing segment reported revenue of $89.7 million, up 58% year-over-year and 5% sequentially. The sequential growth was driven by growth from existing clients in insurance, including an impressive initial quarter of platform BPO revenue from a global retirement services provider. Transformation reported revenues of $14.9 million in the first quarter, down year-over-year and sequentially. Start dates for our 2 new project wins were pushed back into the next quarter affecting our top line. While our new deal revenue represents approximately 1/3 of our transformation business, approximately 2/3 is short-term projected business revenue, which is more volatile and difficult to predict quarter-on-quarter. As Rohit outlined, we are encouraged by a strong recent client win and the pipeline for rest of the year in this business. I remain optimistic about the transformation showing solid revenue growth for this year. In the first quarter, our gross margin was 36.3%, down approximately 300 basis points sequentially, driven by 3 drivers. First, 150 basis points from low utilization and advanced hiring in our transformation business and new capacity added in the Philippines. Second, 80 basis points from foreign exchange headwinds from -- an appreciating rupee, which was 51.4 in Q4 of '11, versus an average of 49.8 in Q1 of 2012. Third, 70 basis points from investments in our BPO platform business. We addressed the gross margin challenge early. As the quarter went on, we saw a pickup in our transformation revenues coupled with better utilization. With the utilization and transformation in coming quarters along with our ramp-ups in our…

[Operator Instructions] Our first question comes from Joseph Foresi from Janney Montgomery.

I wonder if you could give us some color around the reasoning for the delays in the transformation and it sounds like outsourcing business, how they progressed. And any color on the number and quality of the pipeline at this point?

Sure, Joe. So I think, I would like to kind of break up the delays into 2 parts. One is the delay that we saw in the transformation line of business. In that particular instance, we think the delay was only a shift from one quarter to the next quarter. And the delay took place between Q1 and Q2. We've already seen a pickup in activity on the transformation business and we don't think that there was anything substantive behind that in terms of a significant trend that we could point you to. It was essentially a couple of our clients pushing back their decisions because of internal factors as they thought about that business. On the outsourcing side, I guess we would again split it up into 2 buckets. Bucket 1 is the smaller sized deal, which we are seeing a fair amount of in the recent past. I think the decision-making on the smaller sized deals continues to remain at the same pace at what it was previously. However, with the strategic prospects that we've got and the strategic views that we are seeing, we are seeing a delay in the decision-making and we would have expected there to be some decision on the qualified strategic prospects that we have in the pipeline by sometime around now. That has not taken place. We've tried to evaluate as to why that decision has been pushed out. And please keep in mind, this 3 strategic prospects which we are qualified, have simply not taken a decision. It's not that we've lost the business to a competitor or it's not as if they have decided not to outsource, just that decision cycles are getting elongated out here. We really can't point you to anything in particular as to what might be the reason for that delay. The only area which we think could be a possible cause for this is, as we engage with clients doing more complex in-house processes for them, all of the opportunities that we are now seeing fall into that category of more complex processes. And perhaps, for outsourcing of these more complex processes, clients need to prepare their organizations internally and it does take a much longer lead time for them to take the decision. From a pipeline standpoint, I think our pipeline is actually very robust and full. And there are a number of deals behind the qualified strategic prospects that we've got as well as some smaller deals in the pipeline. And therefore, our confidence in the demand environment remains very strong. And our confidence in our ability of the front end to execute on winning deals continues to remain very strong.

Okay. And my follow-up question is that -- help us reconcile the confidence in the pipeline. I imagine those 3 strategic deals would be more of a 2013. Again, help us reconcile that with the decision to guide to the lower end of guidance, one quarter into the year. That seems to be a -- it may be a little bit on the mixed side of a message, maybe you can help us understand why. I know part of it's currency, but outside of the currency, why would you take that step this early if you still have confidence on the pipeline?

Sure. I think the reason for us to guide at the bottom end of the range is as follows: number one is the fact that the transformation business for us in Q1 was soft and that's something which we experienced. Number two, the decisions that we expected from our strategic qualified prospects are not materializing in a manner that we have thought them to. But all of these are, as you know, have small impacts to our revenue in the current year. And the biggest impact and the most predominant impact is the impact on account of the foreign exchange rate movement. As we've articulated in our press release as well as in my comments and Vishal's comments, based on the dollar-rupee exchange rate being at 53 rupees to the dollar today and if that currency rate remains the same for the rest of the year, we think there is a $6 million headwind to our revenues for the calendar year 2012. And that's the predominant part why we are pointing everybody towards the bottom end of our range. Please keep in mind, that the foreign exchange rate impacts to our revenues has no bearing on the volume of business that we do with our customers. And as Vishal articulated, on a constant currency basis, we still would expect to grow our business organically at 16% even at the bottom end of range.

Just one more numerical question. What was your organic growth rate for the BPO practice this quarter? Thanks.

Yes. The organic growth rate of our outsourcing business for the first quarter was about 12%, but on a constant currency basis it was about 15%.

Our next question comes from Ashwin Shirvaikar of Citi.

I guess my question is with regards to the existing clients -- because my impression from your comments, Rohit, was that there are some existing clients or clients whom you have just signed, who are not ramping according to your plan. First of all, is that a correct assumption? And if so, why would a client go through a 12- or 18-month sales process and then not do what they're supposed to do on their side?

Ashwin, with our existing clients, we continue to see their decision-making phase to be in line with historical precedent. It's only in a few existing clients in the transformation line of business that they push back their decision from Q1 to Q2. But otherwise, there is no delay that's taking place with our existing clients. And you're absolutely right that after such a long sales cycle, they pretty much move ahead with determination and certainty in terms of their outsourcing plan.

Got it. So the existing client piece was on the transformation side. And I know you don't have very long-term visibility on the transformation business. But would you say that given the 5 clients you signed and the existing base of business, do you think we can get back to a $17 million, $18 million per quarter run rate on the transformation side?

Yes. Let me share some -- shed some color on the transformation wins that we've just seen and what we're seeing with our existing client decision-making in transformation, in particular. Firstly, we have signed up 8 clients between January to April of this year in transformation. Not only have we signed 8 which represents the highest numbers that we've ever signed in the last two years, but also the quality of the customer base is a global blue-chip client base. Many of these contracts that we have signed are actually much larger value than what we typically would sign up as a first engagement within transformation. And many of these are also annuity-based contracts that we have signed up. So we have a tremendous amount of confidence that we will be able to grow our transformation line of business very, very significantly. Within transformation, Decision Analytics continues to outpace the growth rate, not only amongst other service lines within transformation, but also across the company. And we would expect that on Decision Analytics, our growth rate year-over-year will end up being somewhere close to 40% to 50% year-on-year.

Okay. The overall growth rate of 15% to 20%, is that the constant currency? Just a clarification.

So, Ashwin, yes. I think the 15% to 20% growth rates that we -- I have typically said that our company's capability of performing over a long term would be on a constant currency basis. And that is something which we've tracked to and we think over a long period of time, that that's the right growth rate for our company. And that's where our current trajectory would be at.

Your next question comes from Tien-Tsin Huang from JPMorgan.

So can you go through the expense management? The -- some of the key messages there, again? I missed -- because I was curious how quickly you were able to get the expenses in line given you did report a little bit later in the quarter. So maybe just go through that again, I apologize.

Yes, Tien-Tsin. On the expense management for Q1, with the -- some of the discretionary expenses on our travel and D&E expenses which we are able to clamp down, we -- there are discretionary expenses on professional services which we were able to clamp down and that helped us. And obviously, bear in mind, that there are some loss expenses in Q4 which don't reoccur, which also helped us reduce expenses quarter-on-quarter. And I think that is the reason why we were able to reduce the G&A dramatically in Q1. But for the rest of the year, we expect the G&A run rate will be in line, maybe a slight improvement on the 20 to 30 basis points.

Okay, understood. Just the -- I guess on the transformation side, just the timing. I understand the delays and they've come on since. But it sounds like they're actually relatively recent. So should we assume that the full run rate of some of those, whatever, the 9 projects come on really in Q -- more full -- for full quarter based on Q3 and you just got half of the benefit in Q2. I'm just trying to understand the timing of when some of these things will come on.

Yes. I think it will be towards the end of Q2 and for all of Q3, absolutely.

Our next question comes from David Koning of Robert W. Baird.

Guys, I think you mentioned that gross margin would come down a little bit sequentially in Q2 given the wage hikes has started in April. And then it sounds like you've got a pretty good insight that costs are going to stay in a little lower rates here, on a percent basis at least. But, you would -- does that suggest really that EPS should be down sequentially if gross margins stay under a little bit of pressure?

So I couldn't clearly hear you, David. What was your question, in the end?

Yes, sure. I guess the main question was just gross margins are going to come down sequentially due to the wage hikes. And then G&A expenses were very low in Q1, it seems like they'll probably stay low but it's hard to have them come down much more. So net, it seems like EPS might be down a bit sequentially in Q2.

Yes. Q2, bear in mind, we will also get a little bit of bump up on the gross margin from the improved utilization in transformation business. So, you're right there, there might be a sequential decline in the EPS because of the increments we're giving out. But on the gross margin line, we may have impact over the increments but some of that will get offset by the improved utilization also.

I guess, David, the best way to think about it are the various elements that would have an impact on our gross margin in the second quarter. Number one is, with our rupee depreciating, it will actually increase our gross margins quarter-on-quarter, sequentially. Number two, as Vishal mentioned, as our utilization of the transformation business improves, that would actually help us in terms of our gross margins. The offset to that is that the salary increments that come into play in Q2, which would basically take that down. As such, we would expect gross margins for the year to increase from where we are in the first quarter. However, we would not see that kind of an increase in Q2.

Okay. Great, that's good color on that. And then just 1 vertical, transportation. It's been running revenue at about $4 million a quarter now for, I think, 9 quarters in a row. But this quarter, it has stepped down to about $3 million. Maybe just a little color on that.

Transportation revenues were actually down by about 9% and the overall quarter-on-quarter decline was about $300,000 only. So it's not much and some of that is attributable to the seasonality of the volumes perking up in Q4. I think the rounding out of the percentages might be causing you to think that, that number is quite different because the percentage gross's from 4% to 3%. However, that's because of the rounding out of those percentages. In actual dollar terms, there hasn't been too much of a shift in the revenues from that vertical and there isn't anything significant that's changing as far as our vertical is concerned.

Our next question comes from Ed Caso of Wells Fargo.

I was wondering if you could talk a little bit about the political environment, particularly on the decision cycle of your clients. Are you seeing them asking more about world sourcing or U.S.-based sourcing? Are they are trying to encourage you maybe to set up sites here in the United States? Has it caused some to set a pause on their decisions until after the November elections? Any thoughts would be appreciated.

Sure, Ed. I think that's a very good point that you raised. It is something that comes up often times in our conversations with our customers. And what we are seeing is our clients react in a number of different ways. In some situations, we've seen our clients push back the decision and they want to wait just until the process is completed. In other situations we have seen them ask for a combination of onshore and offshore processing capability. And in other situations, they're still trying to evaluate and understand as to how this might play and have an impact in terms of their operating business as such. We don't see any one single trend playing out but it's rather multiple options that clients are taking. We -- by the way, we also see some clients just pushing forward with the economic agenda and the business value agenda and moving forward with their decision-making.

Okay. Can you just remind us of your exposure to visas, HSLs and Abyss or any other that we don't know about. Have they impacted your business given all the noise in the market at the moment and particularly with the emphasis situation getting closer to the trial date?

Sure. So for us, within the outsourcing business, all the works that we do within outsourcing is either done offshore or it is done onshore with onshore resources that we've hired. On the transformation side of our business, which is about 20% of our revenues but obviously a much lesser headcount, we do the work predominantly with offshore-based resources but we do have some onshore resources. And within the onshore resources, we have a combination of people who we've hired locally, as well as India-based professionals who are either relocated or who travel to the U.S. for performing the work. However, for EXL, the number of individuals that rely upon visa for doing work within transformation is a very small number. And as such, we are not really impacted by the visa situation, which some of the IT services companies might be getting impacted with.

Our next question comes from Manish Hemrajani from Oppenheimer.

A question on the overall environment, if I may. Last quarter you talked about a strong pipeline and in fact an uptick in the demand environment in the beginning of 2012. What have you seen transpired between then and now to impact the demand environment especially on the larger deals?

So, our assessment of this is that the demand continues to be strong. And the pipeline continues to be strong. It's -- that, I don't think has changed in our assessment. Typically, if you -- if we go back in terms of historical precedent, if you would win some smaller deals, it would actually diminish the size of the pipeline. Or what we have seen is that pipeline has been constantly replenished and the size of our pipeline has not declined. In fact, it continues to remain at similar levels. The only change that has taken place for us which we are pointing out to is in our qualified strategic prospects for outsourcing, there is a delay in the decision-making and we're not sure as to why that is there but we would have expected to sign up a strategic prospect by now, but the decision has not been taken. Now, we don't know what the real reason for that is. In each situation, I guess the reason is different. We continue to work with these strategic prospects and we do think that over the next couple of quarters, decision will be taken. And we do think EXL is favorably positioned in these strategic prospects that we've got in the pipeline.

Got it. And just a follow-up, could you comment on pricing environment and competitive landscape? Are you seeing any pressure on the pricing front?

Yes. From a competitive landscape standpoint, we continue to see a greater prevalence of India-based IT services companies competing for business in BPO. There has always been pricing pressure within our environment. However, we continue to be very, very disciplined in terms of how we approach our customers because we are establishing long-term relationships for our clients and pricing is just one lever. We've got multiple levers of being able to add value to our clients. And typically the clients that choose us, choose us for the overall package and the value that we can create for them, using our domain-focused capabilities, our transformational skill set, our operational execution and our focus on our client's objectives.

Got it. One last one for me. What is your wage inflation expectation for the next quarter?

So as we mentioned, we've implemented salary increments across-the-board in various geographies. We've gone ahead with a wage increment, which is in the high single digits in India, which is where the bulk of our employee population is.

Our next question comes from David Grossman of Stifel, Nicolaus.

Maybe if, just for a minute, if we go back to some of the questions on the gross margin. If you look back, 3 months, how much of the gross margin compression had been anticipated going into the quarter? And how much of that was incremental, based on some of the issues you discussed?

Yes. David, this is Vishal. In terms of what came to us as a surprise, I think was the fact that the lower utilization in transformation of about -- the impact was about 150 bps. It was something which we had not anticipated. Obviously, the currency movement, we didn't predict. We had targeted -- when we were looking at -- that the currency would be more like 51, but the currency actually quarter-on-quarter has strengthened. But the BPO platform conversion costs were known to us and we had -- that was in our projections.

Okay. And could you repeat what those BPO basis points are? I missed that one.

Sorry?

Could you repeat what the impact was from the BPO platform conversion was?

70 basis points.

Okay. And then secondly, just looking at the transformation business and the business that you signed and the ramp rates, when do we get back to a more normalized revenue run rate for that business?

David, I think, the revenue run rate for that business picks up in Q2. And I think Q3 we would be back on track as far as our business is concerned.

So should we see -- expect year-over-year growth in the third quarter, Rohit?

Yes, you absolutely should.

Okay. And then, in terms of the -- someone was asking earlier about the June quarter. I would assume based on what you're saying about the transformation business, that you would see sequential increases in revenue in the June quarter but perhaps some modest compression in gross margin as the wage increase goes in, when you net all that stuff out, can you grow EPS sequentially? Or should we anticipate a modest decline in EPS sequentially?

David, I think, it would be prudent to assume that their -- the EPS will decline quarter on quarter. But only for Q2. Q3 and Q4 our EPS would sequentially increase. And we would expect -- if you took it for the full 4 quarters that our EPS would increase in Q3 and Q4 above where we are in Q1.

Okay. So Rohit, based on what you're seeing now, do you have pretty good visibility on that EPS for the second half of the year?

Yes, David, I think -- we feel confident about the growth in the transformation business. The outsourcing business, as you know, is fairly predictable and stable. And based upon what we can see in terms of some of the of factors that are playing in, we feel good and confident about the guidance that we've given out.

Okay. And that was $3.5 million to $4 million of FX gains assumed, with the rupee at 53, is that correct?

David, not FX gains, but FX losses for the year.

Okay. I'm sorry, I misspoke. Okay. And should that be pretty evenly distributed across those 3 quarters?

Yes. With the exchange rate where it is today and assuming that remains for that -- for the remainder of the year, that will be the case.

Okay. And just one last question I guess for you, Rohit. You brought up the competition, somebody just asked that in the last question. But is your sense of the IT service companies with growth slowing are getting more focused on this market? Or is there some other dynamic that may be driving a more competitive landscape, if you will, for some of these BPO deals? Or perhaps it's just that you're going after larger deals and that be -- may be a part of it. But perhaps you could help us better understand why you think the competitive environment is getting more intense as it has been historically.

Yes. I think there are 2 fundamental reasons why we see more IT services companies compete for the BPO business. Number one, as you point out, perhaps the growth rate in their core business in IT services may not be as attractive as it was previously. And number two, I think, they've started to recognize the value of the BPO business and the annuity nature and the margin profile of the BPO business. And they find this to be an attractive business segment to focus their energy and effort on.

Okay. And just one last question. Just going back to the BPO business itself and the delayed decision-making. At what point do we start thinking about, if these deals -- at what point do they have to close, if you will, for us to kind of think about your ability to maintain your growth trajectory or your target, if you will, next year? I mean as long as -- is it still the 3 to 4 deals closed by the end of the calendar year, and you still, at this revenue rate, can still grow organically at your target rate? Or has that number gone up? Or -- help us frame how we should look at bookings over the balance of the year and how it may impact growth next year.

Yes, David. I think for us to win the 3 to 4 strategic clients for the remainder part of this year, it would be adequate for us to be on the growth trajectory. I think for these 3 clients that we have got in the pipeline, we would expect them to take their decision over the next couple of quarters. And I think you'll clearly get a sense of that as we disclose how those decisions were taken.

Our next question comes from Mayank Tandon of Needham.

Rohit, I have one question regarding competition. So I think in the past, we've talked about the synergy between IT and BPO. And I was just wondering, is that becoming more relevant and that might be one of the reasons why clients are taking longer and you're seeing more competition from the bigger IT services flares?

Sure, Mayank. That's a subject which we internally continuously debate and try and understand as well as we can. Our stance continues to remain that there is little synergy between IT services and BPO services. There is a fair amount of synergy between owning a platform, which is proprietary and performing services on top of that. And so far, we have not seen the major IT services companies demonstrate synergy between their knowledge of doing application development on the systems that our clients work on and the processing capability that's required to manage the business operationally. I think our view continues to remain that in order to be efficient and effective processor for our clients, you need to have domain focus and knowledge. You need to have an understanding of operational management and skill sets for process management as opposed to project management. And that we continue to remain a better choice for our customers. We also haven't seen very many examples of clients choosing to go with our competition in that regard. So I think the jury's still out on that and we will wait and watch and see of what happens.

Okay. So just to be clear, the decision-making is generally very different when people are considering outsourcing BPO work versus ADM work? Is that fair?

Yes.

Okay, got it. I also wanted to just ask you a little bit in terms of the model mix. How much of this revenue is now FTE-driven versus transaction-driven today? And where is that trending?

So, Mayank, on the revenue mix right now, I think primarily we have majority of our revenue still on FTE-based. And I would say roughly about 20% of our revenues would be on transaction-based pricing for the overall portfolio.

Okay. And is that going to change as you ramp up some of these larger deals? Or is that dynamic going to remain pretty much the same?

I think our long-term endeavor is to increase that transaction-based pricing percentage for the overall business, as we do more complex work and get more of these with some of our existing bigger clients. And we hope that, that number will increase over the period, in the next few years, to more 30%.

What is the margin differential typically on FTE-driven work versus transaction-driven work?

I think there is no particular trend as such you can demonstrate. I think it works -- depends on what work you are doing for the client. And over a period of time, you do carry a risk, so -- in transaction-based pricing. But typically, I think you do get a boost in your gross margins over the longer period.

Okay. And Rohit, finally, in terms of the large strategic deals that you talk about, can you just remind us what is the typical size of these engagements annually?

Sure, Mayank. The way we categorize our strategic prospect is that it would generate revenues of between $5 million to $10 million on an annual basis once it's fully ramped up.

And how long does it take for a deal to ramp up typically?

Typically, it would take us between 6 to 12 months.

Our next question comes from Jason Kupferberg of Jefferies.

This is Amit Singh for Jason Kupferberg. I have a quick question regarding, first of all, your -- the geographies of the new client additions. If you could just provide a little bit more color on, if you can, about where these clients are located geographically. And just relating to that, is there any particular geography that is -- where you're witnessing more headwind than others in this client decision-making delays?

Sure, Amit. For us, as you know, 70% of our revenue comes in from clients which are based in the U.S. and 30%-or-so comes in from clients that are based in U.K. and Europe. In terms of our new customer wins, it's broadly spread in equal proportion to that revenue base that we have got. We don't see different decision-making cycles as of now between the 2 regions. For us, it looks pretty much the same and consistent across both the geographies.

All right, perfect. And quick question on -- you mentioned that your pipeline is strong but do you foresee any sort of upcoming investments that you need to make in any of the verticals?

We've constantly make investments in our chosen verticals and domains. And as you know, we've got 5 industry verticals and 1 horizontal domain that we're focusing on. We've now got business leaders for heading up each one of these industry verticals and domains and we will continue to make investments on these each year. For us, the areas where we make these investments are in the areas of acquiring subject matter expertise: setting up training academies to be able to train our employee workforce in these areas, acquiring platforms and tools so that we can serve our clients with these platforms and tools creating greater efficiency and effectiveness, continuing to focus in on transformation skill set that would be relevant for these domains. So we make those investments across-the-board and in addition to that, we will look at making some acquisitions that will add to our capabilities at -- for enhancing our status within these domains.

Our next question comes from Vincent Colicchio of Noble Financial.

Yes, Rohit, how did your finance and accounting business perform in the quarter? And have you exhausted the cross-selling opportunities from the acquisition?

Sure. I think our finance and accounting business performed as per plan in the first quarter. In terms of cross-selling, we think there is much more opportunity for us to cross sell. And so far, what we've had is -- we've got a number of conversations going for cross-selling, outsourcing services to our finance and accounting clients, as well as selling -- cross selling transformations to our finance and accounting clients and vice versa. We've seen a few examples of this cross-sell materialize. But I think we've got a huge opportunity and leg room for us to continue to mine the existing customer base.

And given the increased competition from the IT services firms, have your win rates changed since that's been occurring?

No. Our win rates continue to remain the same. And as I mentioned previously on the call, we just haven't seen a decision being taken by our strategic clients. And so our win rate continues to be to same. It's just that the sales cycle has gotten elongated.

Could you remind us what verticals are represented by the client? The prospects of the pipeline, the strategic pipeline?

Sure. We've got 1, which is in the travel vertical. And we've got 2, which is in the insurance and healthcare vertical.

Our next question comes from Kunal Tayal with Bank of America Merrill Lynch.

In terms of some of the push outs on the transformation side, Rohit. Was there any particular vertical that saw ramp up impact? I know insurance is the largest vertical. But outside of insurance, also, did you see any delays?

No, actually we did not. The delay took place in a couple of specific clients. But it wasn't all focused in any one industry vertical.

And in terms of the 8 new wins that you have had, how does that split by industry?

Again, the 8 new wins that we've had is broad-based, across industry verticals. I would say that we have seen some greater activity in the banking and financial services industry verticals for these 8 Transformation Services wins.

Sure. And have you identified the 2 clients that caused delay? And which verticals are they from?

No, we have not disclosed that. And these are existing clients and they take decisions based on their internal budgeting and operating needs and it's -- as I mentioned earlier, they've just shifted their work from one quarter to the next.

I'm showing no further questions in the queue at this time. I'll hand the call back over to Rohit Kapoor for closing comments.

Thanks, operator. Thank you all for joining EXL's first quarter call. We continue to remain focused on execution and making sure that we deliver to our guidance in 2012. We look forward to joining you again at our second quarter's call, possibly end of July, beginning of August. Thank you.

Thank you. Ladies and gentleman, this concludes the conference for today. You may all disconnect, and have a wonderful day.