Original source text
July 28, 2026 16:01 ET | Source: EXL
2026 Second Quarter Revenue of $594.8 Million, up 15.6% year-over-year
Q2 Diluted EPS (GAAP) of $0.42, up 4.9% from $0.40 in Q2 of 2025
Q2 Adjusted Diluted EPS (Non-GAAP) (1) of $0.59, up 22.3% from $0.49 in Q2 of 2025
NEW YORK, July 28, 2026 (GLOBE NEWSWIRE) -- ExlService Holdings, Inc. (NASDAQ: EXLS), a global data and AI company, today announced its financial results for the quarter ended June 30, 2026.
Chairman and Chief Executive Officer Rohit Kapoor said, “We entered 2026 with strong momentum that accelerated through the first half, delivering second quarter revenue growth of 16% year-on-year and adjusted diluted EPS of 22% year-on-year. Our sustained double-digit growth reflects continued execution of our data and AI strategy and our differentiated position which helps clients effectively adopt AI across the enterprise. We have very good visibility into the balance of the year and look forward to a solid finish to 2026.”
Chief Financial Officer Maurizio Nicolelli said, “Our strong second quarter performance, sustained growth momentum and healthy pipeline give us the confidence to increase our organic full-year revenue growth guidance to 13% to 14%. In addition, we are also updating our guidance to include $28.0 million to $32.0 million of anticipated revenue from the iMerit acquisition, which is expected to close on July 31, 2026. We now expect full-year 2026 total revenue to be in the range of $2.390 billion to $2.415 billion, up from our prior guidance of $2.30 billion to $2.33 billion, reflecting 14% to 16% year-over-year growth on a reported basis. We now expect adjusted diluted earnings per share of $2.25 to $2.29, a 16% to 18% increase over 2025, up from our prior guidance of $2.18 to $2.23.”
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(1)Reconciliations of adjusted (non-GAAP) financial measures to the most directly comparable GAAP measures, where applicable, are included at the end of this release under “Reconciliation of Adjusted Financial Measures to GAAP Measures.” These non-GAAP measures, including adjusted diluted EPS and constant currency measures, are not measures of financial performance prepared in accordance with GAAP.
Financial Highlights: Second Quarter 2026
Revenue for the quarter ended June 30, 2026, increased to $594.8 million compared to $514.5 million for the second quarter of 2025, an increase of 15.6% on a reported basis and 15.9% on a constant currency basis. Revenue increased by 4.3% sequentially on a reported basis and 4.4% on a constant currency basis, from the first quarter of 2026. Revenue Gross Margin Three months ended Three months ended Reportable Segments June 30,
2026 June 30,
2025 March 31,
2026 June 30,
2026 June 30,
2025 March 31,
2026 (dollars in millions) Insurance $197.8 $172.2 $194.0 34.6 % 34.8 % 37.7 %Healthcare and Life Sciences 158.0 129.5 151.9 46.9 % 43.5 % 45.3 %Banking, Capital Markets and Diversified Industries 133.9 121.1 127.4 34.8 % 37.8 % 36.9 %International Growth Markets 105.1 91.7 97.1 35.1 % 35.1 % 34.1 %Total $594.8 $514.5 $570.4 38.0 % 37.7 % 38.9 % Operating income margin for the quarter ended June 30, 2026 was 14.7%, compared to 15.8% for the second quarter of 2025 and 16.1% for the first quarter of 2026. Adjusted operating income margin for the quarter ended June 30, 2026 was 19.7%, compared to 19.6% for the second quarter of 2025 and 20.5% for the first quarter of 2026.Diluted earnings per share for the quarter ended June 30, 2026 was $0.42, compared to $0.40 for the second quarter of 2025 and $0.43 for the first quarter of 2026. Adjusted diluted earnings per share for the quarter ended June 30, 2026 was $0.59, compared to $0.49 for the second quarter of 2025 and $0.58 for the first quarter of 2026. Business Highlights: Second Quarter 2026
Won 17 new clients in the second quarter of 2026.EXL agreed to acquire iMerit, advancing its leadership in enterprise AI by adding foundation model expertise and technology.EXL achieved gold status with Databricks and deepened its collaboration to help enterprises build trusted data foundations for AI at scale.EXL became an OpenAI Services Partner, expanding its AI delivery capabilities through OpenAI’s enterprise capabilities.EXL joined the Claude Partner Network, further strengthening its AI ecosystem with Anthropic’s frontier AI models.EXL achieved Snowflake Premier Partner status, reinforcing its commitment to delivering strategic data and AI solutions for clients.EXL integrated with NVIDIA Transaction Foundation Model, bringing next-generation fraud detection and risk intelligence to financial institutions.EXL named a Horizon 3 - Market Leader in the HFS Horizons Data Modernization and AI, 2026 report for EXL’s ability to operationalize AI through semantic data foundations, agentic workflow orchestration, and proven enterprise-scale transformation outcomes.Appointed Bhupender Singh as president and head of international growth markets. 2026 Guidance
Based on current visibility, and a U.S. dollar to Indian rupee exchange rate of 95.0, U.K. pound sterling to U.S. dollar exchange rate of 1.33, U.S. dollar to the Philippine peso exchange rate of 61.0 and all other currencies at current exchange rates, we are providing the following guidance for the full year 2026:
Revenue of $2.390 billion to $2.415 billion, representing an increase of 14% to 16% on a reported basis, which includes $28.0 million to $32.0 million of anticipated revenue from the iMerit acquisition, which is expected to close on July 31, 2026, and 13% to 14% on an organic constant currency basis from 2025.Adjusted diluted earnings per share of $2.25 to $2.29, representing an increase of 16% to 18% from 2025. Conference Call
ExlService Holdings, Inc. will host a conference call on Wednesday, July 29, 2026, at 10:00 A.M. ET to discuss the Company’s second quarter operating and financial results. The conference call will be available live via the internet by accessing the investor relations section of EXL’s website at ir.exlservice.com, where an accompanying investor-friendly spreadsheet of historical operating and financial data can also be accessed. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software.
To join the live call, please register here. A dial-in and unique PIN will be provided to join the call. For those who cannot access the live broadcast, a replay will be available on the EXL website ir.exlservice.com for a period of twelve months.
About ExlService Holdings, Inc.
EXL (NASDAQ: EXLS) is a global data and artificial intelligence ("AI") company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed. EXL harnesses the power of data, AI, and deep industry knowledge to transform businesses, including the world’s leading corporations in industries including insurance, healthcare and life sciences, banking and capital markets, retail, communications and media, and energy and infrastructure, among others. EXL was founded in 1999 with the core values of innovation, collaboration, excellence, integrity and respect. We are headquartered in New York and have over 68,000 employees spanning six continents. For more information, visit www.exlservice.com.
Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. 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, all of which are difficult to predict and many of which are beyond EXL’s control. Forward-looking statements include information concerning EXL’s possible or assumed future results of operations, including descriptions of its business strategy. These statements may include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of management's experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although EXL believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect EXL’s actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors, which include the satisfaction or waiver of applicable closing conditions to the consummation of the iMerit acquisition and the expected timing thereof, our ability to successfully integrate announced or future strategic acquisitions or achieve anticipated synergies, our ability to maintain and grow client demand, risks related to the use of AI technology, impact on client demands by our selling cycles, our ability to hire and retain sufficiently trained employees, and our ability to accurately estimate and/or manage costs, and risks related to the international nature of our business and other factors are discussed in more detail in EXL’s filings with the Securities and Exchange Commission, including EXL’s Annual Report on Form 10-K. You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect EXL. EXL has no obligation to update any forward-looking statements after the date hereof, except as required by applicable law.
EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amount and share count)
Three months ended June 30, Six months ended June 30, 2026
2025
2026
2025
Revenues, net$594,763 $514,460 $1,165,114 $1,015,479 Cost of revenues(1) 368,800 320,272 717,070 627,977 Gross profit(1) 225,963 194,188 448,044 387,502 Operating expenses: General and administrative expenses 74,436 59,549 143,487 118,966 Selling and marketing expenses 49,628 39,446 96,829 81,371 Depreciation and amortization expense 14,604 14,055 28,607 27,612 Total operating expenses 138,668 113,050 268,923 227,949 Income from operations 87,295 81,138 179,121 159,553 Foreign exchange gain, net 1,609 2,211 2,744 3,403 Interest expense (5,068) (4,282) (9,019) (8,426)Other income, net 130 5,671 2,521 10,374 Income before income tax expense and earnings from equity affiliates 83,966 84,738 175,367 164,904 Income tax expense 19,426 18,546 43,744 32,042 Income before earnings from equity affiliates 64,540 66,192 131,623 132,862 Loss from equity-method investment (29) (141) (31) (250)Net income$64,511 $66,051 $131,592 $132,612 Earnings per share: Basic$0.42 $0.41 $0.85 $0.82 Diluted$0.42 $0.40 $0.85 $0.81 Weighted average number of shares used in computing earnings per share: Basic 152,554,401 162,925,484 154,292,120 162,709,034 Diluted 152,831,994 164,193,258 154,858,444 164,376,498 (1) Exclusive of depreciation and amortization expense.
EXLSERVICE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except per share amount and share count)
As of June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $126,722 $146,326 Short-term investments 157,102 182,041 Restricted cash 12,964 12,392 Accounts receivable, net 434,362 343,105 Other current assets 144,132 146,093 Total current assets 875,282 829,957 Property and equipment, net 114,587 111,821 Operating lease right-of-use assets 97,495 97,411 Restricted cash 7,086 7,251 Deferred tax assets, net 139,288 129,968 Goodwill 418,693 419,654 Other intangible assets, net 29,720 36,204 Long-term investments 6,396 8,198 Other assets 59,340 61,771 Total assets $1,747,887 $1,702,235 Liabilities and stockholders’ equity Current liabilities: Accounts payable $6,733 $4,753 Current portion of long-term borrowings 381,155 4,886 Deferred revenue 22,591 15,356 Accrued employee costs 112,908 146,775 Accrued expenses and other current liabilities 161,525 135,498 Current portion of operating lease liabilities 18,734 16,857 Total current liabilities 703,646 324,125 Long-term borrowings, less current portion — 293,712 Operating lease liabilities, less current portion 88,130 88,167 Deferred tax liabilities, net 2,256 2,125 Other non-current liabilities 87,613 81,401 Total liabilities 881,645 789,530 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued — — Common stock, $0.001 par value; 400,000,000 shares authorized, 210,101,885 shares issued and 151,745,072 shares outstanding as of June 30, 2026 and 208,855,566 shares issued and 156,430,028 shares outstanding as of December 31, 2025 210 209 Additional paid-in capital 724,432 677,562 Retained earnings 1,664,571 1,532,979 Accumulated other comprehensive loss (223,682) (180,727)Total including shares held in treasury 2,165,531 2,030,023 Less: 58,356,813 shares as of June 30, 2026 and 52,425,538 shares as of December 31, 2025, held in treasury, at cost (1,299,289) (1,117,318)Total stockholders’ equity 866,242 912,705 Total liabilities and stockholders’ equity $1,747,887 $1,702,235
EXLSERVICE HOLDINGS, INC.
Reconciliation of Adjusted Financial Measures to GAAP Measures
In addition to its reported operating results in accordance with U.S. generally accepted accounting principles (GAAP), EXL has included in this release certain financial measures that are considered non-GAAP financial measures, including the following:
Adjusted operating income and adjusted operating income margin;Adjusted EBITDA and adjusted EBITDA margin;Adjusted net income and adjusted diluted earnings per share; andRevenue growth on a constant currency basis. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated. EXL believes that providing these non-GAAP financial measures may help investors better understand EXL’s underlying financial performance. Management also believes that these non-GAAP financial measures, when read in conjunction with EXL’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s results and comparisons of the Company’s results with the results of other companies. Additionally, management considers some of these non-GAAP financial measures to determine variable compensation of its employees. The Company believes that it is unreasonably difficult to provide its earnings per share financial guidance in accordance with GAAP, or a qualitative reconciliation thereof, for a number of reasons, including, without limitation, the Company’s inability to predict its future stock-based compensation expense under ASC Topic 718, the amortization of intangibles associated with future acquisitions and the currency fluctuations and associated tax effects. As such, the Company presents guidance with respect to adjusted diluted earnings per share. The Company also incurs significant non-cash charges for depreciation that may not be indicative of the Company’s ability to generate cash flow.
EXL non-GAAP financial measures exclude, where applicable, stock-based compensation expense, amortization of acquisition-related intangible assets, amortization of prior service cost arising from implementation of new Labor Codes in India, certain defined social security contributions, other acquisition-related expenses or benefits and effect of any non-recurring tax adjustments. Acquisition-related expenses or benefits include changes in the fair value of contingent consideration, external deal costs, integration expenses, direct and incremental travel costs and non-recurring benefits or losses. Our adjusted net income and adjusted diluted EPS also excludes the effects of income tax on the above pre-tax items, as applicable. The effects of income tax of each item is calculated by applying the statutory rate of the local tax regulations in the jurisdiction in which the item was incurred.
EXL provides information about revenues on a constant currency basis so that the revenues may be viewed without the impact of foreign currency exchange rate fluctuations compared to prior fiscal periods, thereby facilitating period-to-period comparisons of the Company's underlying business performance. Revenue growth on a constant currency basis is calculated by restating current-period activity using the prior fiscal period's foreign currency exchange rates adjusted for hedging gains/losses in such period. Foreign currency translation impacted revenue growth, primarily driven by movements in the U.S. dollar against the Indian rupee (INR), the U.K. pound sterling (GBP), and Australian dollar (AUD).
A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and exclude costs that are recurring, namely stock-based compensation and amortization of acquisition-related intangible assets. EXL compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.
The following table shows the reconciliation of these non-GAAP financial measures for the three months ended June 30, 2026 and June 30, 2025, and the three months ended March 31, 2026:
Reconciliation of Adjusted Operating Income and Adjusted EBITDA
(Amounts in thousands)
Three months ended June 30, March 31, 2026
2025
2026
Net income (GAAP) $64,511 $66,051 $67,081 add: Income tax expense 19,426 18,546 24,318 add/(subtract): Foreign exchange gain/(loss), net, interest expense, gain/(loss)
from equity-method investment and other income/(loss), net 3,358 (3,459) 427 Income from operations (GAAP) $87,295 $81,138 $91,826 add: Stock-based compensation expense 24,631 16,392 22,101 add: Amortization of acquisition-related intangibles 3,258 3,277 3,226 add: Acquisition-related expenses (a) 1,894 — — Adjusted operating income (Non-GAAP) $117,078 $100,807 $117,153 Adjusted operating income margin as a % of revenue (Non-GAAP) 19.7 % 19.6 % 20.5 %add: Depreciation on long-lived assets 11,346 10,778 10,777 Adjusted EBITDA (Non-GAAP) $128,424 $111,585 $127,930 Adjusted EBITDA margin as a % of revenue (Non-GAAP) 21.6 % 21.7 % 22.4 % (a) To exclude acquisition-related expenses incurred for the announced acquisition of I Merit Inc. (“iMerit”) during the three months ended June 30, 2026.
Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share
(Amounts in thousands, except per share amount)
Three months ended June 30, March 31, 2026
2025
2026
Net income (GAAP) $64,511 $66,051 $67,081 add: Stock-based compensation expense 24,631 16,392 22,101 add: Amortization of acquisition-related intangibles 3,258 3,277 3,226 add: Changes in fair value of contingent consideration 3,000 — — add: Acquisition-related expenses (a) 1,894 — — add: Amortization of prior service cost (b) 566 — 521 subtract: Acquisition-related adjustments — (945) — subtract: Tax impact on stock-based compensation expense (c) (6,097) (4,211) (1,316)subtract: Tax impact on amortization of acquisition-related intangibles (821) (807) (812)subtract: Tax impact on amortization of prior service cost (144) — (133)Adjusted net income (Non-GAAP) $90,798 $79,757 $90,668 Adjusted diluted earnings per share (Non-GAAP) $0.59 $0.49 $0.58 (a)To exclude acquisition-related expenses incurred for the announced acquisition of iMerit during the three months ended June 30, 2026.(b)To exclude amortization of prior service cost arising from the implementation of the new Labor Codes in India.(c)Tax impact includes ($17) and $203 during the three months ended June 30, 2026 and 2025 respectively, and $1,280 during the three months ended March 31, 2026, related to discrete benefits recognized in income tax expense in accordance with ASU No. 2016-09, Compensation - Stock Compensation.
