ExlService Holdings, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue reached $634.0 million, a 19.7% increase year-over-year (YoY) from $529.6 million in Q3 2025, and a 6.6% sequential increase from $594.8 million in Q2 2026.
• Q3 2026 GAAP diluted EPS was $0.45, up 25.3% from $0.36 in Q3 2025.
• Q3 2026 Non-GAAP adjusted diluted EPS was $0.62, up 28.5% from $0.48 in Q3 2025.
• Gross margin for Q3 2026 was 38.0%, compared to 38.5% in Q3 2025 and 38.0% in Q2 2026.
• Operating income margin for Q3 2026 was 14.0%, down from 14.4% in Q3 2025 and 14.7% in Q2 2026.
• Adjusted operating income margin for Q3 2026 was 19.3%, down slightly from 19.4% in Q3 2025 and 19.7% in Q2 2026.
• Adjusted EBITDA for Q3 2026 was $135.0 million, with an adjusted EBITDA margin of 21.3%, compared to 21.6% in Q3 2025 and Q2 2026.
• Total assets as of September 30, 2026, were $2.073 billion, up from $1.702 billion as of December 31, 2025.
• Long-term borrowings increased to $501.3 million as of September 30, 2026, from $293.7 million as of December 31, 2025.
• Deferred revenue increased to $20.3 million as of September 30, 2026, from $15.4 million as of December 31, 2025.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance raised to $2.430 billion–$2.440 billion, reflecting 16%–17% YoY growth on a reported basis and 15% on an organic constant currency basis.
• Full-year 2026 adjusted diluted EPS guidance raised to $2.34–$2.36, representing a 20%–21% increase over 2025.
• Management cited strong momentum and visibility into the balance of 2026, projecting a solid finish to the year.
• Guidance assumes a U.S. dollar to Indian rupee exchange rate of 95, U.K. pound sterling to U.S. dollar rate of 1.33, and U.S. dollar to Philippine peso rate of 63.

Business Segments and Product Lines:

• Data and AI-led revenue, comprising almost two-thirds of the business, grew 36% on a reported basis and 31% organically.
• All business segments grew more than 15% organically.
• Insurance segment revenue was $208.5 million (up from $180.5 million YoY) with a gross margin of 36.2%.
• Healthcare and Life Sciences segment revenue was $160.4 million (up from $135.3 million YoY) with a gross margin of 45.2%.
• Banking, Capital Markets and Diversified Industries segment revenue was $153.5 million (up from $121.0 million YoY) with a gross margin of 34.4%.
• International Growth Markets segment revenue was $111.6 million (up from $92.8 million YoY) with a gross margin of 36.2%.
• Completed the acquisition of iMerit to establish a Model Training Solutions practice.
• Won 14 new clients in the third quarter of 2026.

Market and Competitive Landscape:

• Earned multiple Leader recognitions from ISG in Healthcare AI and Insurance Services.
• The company's strategy leverages deep domain expertise combined with data and AI capabilities to help clients implement AI effectively across the enterprise.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to successfully integrate the iMerit acquisition or future strategic acquisitions and achieve anticipated synergies.
• Risks include maintaining and growing client demand, risks related to the use of AI technology, impacts from selling cycles, and the ability to hire and retain sufficiently trained employees.
• Risks also include the ability to accurately estimate and manage costs, and risks related to the international nature of the business and currency fluctuations.

Management Commentary and Tone:

• Chairman and CEO Rohit Kapoor stated the company entered 2026 with strong momentum that accelerated through the year, delivering 20% revenue growth and 29% adjusted diluted EPS growth year-on-year.
• CFO Maurizio Nicolelli expressed confidence in the strong third-quarter performance, citing the ability to raise full-year outlook again.
• Management highlighted the strength of their data and AI strategy and differentiated market position.

Other Key Points:

• Closed a new $1 billion senior secured credit facility.
• Marked EXL's 20th year as a publicly listed company by launching the new "Go Beyond" brand.
• Earned the 2026 Great Place To Work Certification™ in the U.S. and Colombia.
• Goodwill increased to $581.6 million as of September 30, 2026, from $419.7 million as of December 31, 2025, likely due to the iMerit acquisition.
• Other intangible assets increased to $99.5 million as of September 30, 2026, from $36.2 million as of December 31, 2025.
• The company has over 74,000 employees spanning six continents.