ExlService Holdings, Inc. (EXLS)

ITEM 1. Business

ExlService Holdings, Inc. (“EXL,” “we,” “us,” “our” or the “Company”), incorporated in Delaware in 2002, 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 65,000 employees spanning six continents.

Using our deep understanding of the industry that we have developed in over 25 years of managing critical business operations, we help enterprises unlock the full value of their structured and unstructured data and embed AI into their workflows. We deliver business outcomes for our clients at speed and scale, by reinventing their business models through advanced analytics and AI powered digital operations to help them achieve superior customer experience, higher productivity, cost efficiency and business growth. Our vision of being an indispensable partner for data and AI-led transformation reflects the long-term priorities of our clients' businesses across industry sectors, and we continue to evolve our offerings with a variety of AI services and solutions.

One of our key assets is our global delivery network, which includes highly trained industry and process specialists across the United States, the United Kingdom, Latin America, South Africa, Europe and Asia (primarily India and the Philippines). We have operations centers in India, the United States, the Philippines, South Africa, Colombia, Bulgaria, Romania, the United Kingdom, the Czech Republic, Mexico and the Republic of Ireland.

In the first quarter of 2025, we implemented operational and structural changes to accelerate the execution of our data and AI strategy and align with how our management reviews financial information and makes operating decisions. The new operating model is comprised of Industry Market Units (“IMUs”) to focus on delivering higher value to clients leveraging our full suite of capabilities; and Strategic Growth Units (“SGUs”) to focus on rapidly advancing our operational, analytics, data management, digital engineering, and AI capabilities specific to our chosen industries. Our IMUs focus on managing customer relationships and delivering the “One EXL” value proposition to clients, maintaining a unified go-to-market approach and being integrally responsible for growth, profitability and client satisfaction.

Accordingly, our new reportable segments, aligned to our IMUs, are as follows:

•Insurance,

•Healthcare and Life Sciences,

•Banking, Capital Markets and Diversified Industries,

•International Growth Markets

The primary changes in our new reportable segments reflect 1) the integration of our former Analytics reportable segment as a core capability within each of our IMUs, ensuring alignment with the specialized needs of our clients across IMUs, 2) the reorganization of our former Emerging Business reportable segment into a Banking, Capital Markets and Diversified Industries reportable segment, excluding Life Sciences, which is now a part of the new Healthcare and Life Sciences reportable segment, and 3) the formation of International Growth Markets as a separate IMU to represent all our services and solutions offerings to clients in the United Kingdom, Europe, Middle East, Asia-Pacific and South Africa geographies across all industry verticals. The International Growth Markets IMU is helping strategically expand our footprint in markets outside of North America and drive focus on offerings and expansion in those markets in new and existing clients.

In addition, our revenues by service type are now presented as data and AI-led solutions and services and digital operations solutions and services. Revenues attributable to geographical regions are now presented as North America (including the United States, Canada and Mexico), the United Kingdom and Europe, and Rest of World.

Our Services

We provide data and AI-led solutions and services and digital operations solutions and services to our clients. We market and sell our solutions and services to existing and prospective clients through our sales and client management teams, which are aligned by our IMUs. Our sales and client management teams operate primarily from the United States, India, the United Kingdom, Ireland and Australia.

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Data and AI-led

In our data and AI-led solutions and services we embed data and AI into client workflows, leveraging our deep domain knowledge, analytics, data management and digital engineering expertise. Our industry-specific offerings are designed to help our clients address large and complex business challenges, accelerate growth, improve customer experience, enhance efficiency, and deliver lasting competitive advantages. As clients evolve from digital operations to data and AI-powered operations, this evolution represents the next stage of enterprise transformation.

We deliver modern, cloud ready data management by unifying fragmented data, strengthening governance, and enabling AI driven decisioning. Our capabilities span data modernization, automated quality, secure pipelines, and enterprise grade data architecture.

Our digital engineering teams design and build scalable, intelligent solutions across cloud, automation, application modernization, and digital product development. By combining engineering rigor with deep domain knowledge, we help clients accelerate transformation, modernize legacy systems, and rapidly deploy AI-enabled digital experiences.

We support our clients wherever they are in their AI transformation journey—early discovery, data modernization, pilot experimentation, or enterprise-scale deployment. Our role includes defining strategy, strengthening data readiness, building and operationalizing AI products, and embedding AI within everyday processes. As part of this journey, we help clients build scalable, cloud-native data platforms by migrating legacy environments using our proprietary accelerators and strong partnerships ecosystem. Our focus is on creating AI-ready data foundations—ensuring that client data is well-organized, high-quality, secure, and accessible across the enterprise. By modernizing data environments and enabling reliable, governed, and unified data assets, we position organizations to confidently adopt advanced analytics, machine learning, and generative AI at scale. This accelerates their transformations and unlocks faster, more measurable business value from AI. We aim to facilitate AI adoption in a manner that is practical, secure, value-driven, and aligned to our clients’ business priorities and industry-related requirements.

With our proprietary agentic AI platform, the orchestration of data, digital, and domain-specialized AI solutions is being enabled to transform mission-critical operations at scale. Our key digital and AI capabilities that drive data and technology-led transformation for our clients include generative AI, reinforcement learning, hyper automation, cloud data management, conversational AI, robotics, enterprise architecture development, integration platform as a service and AI for operations.

Some of our key solutions are:

•EXL Domain or Industry Specific Large Language Model (“LLM”). For example, Insurance LLM is an industry-specific LLM that supports claims and underwriting-related tasks, such as claims reconciliation, data extraction and interpretation, question-answering, anomaly detection and chronology summarization.

•EXLData.AI, an agentic AI-native solution which modernizes and unifies fragmented, siloed enterprise data embeds intelligence across the full data lifecycle using agentic architecture, integrates seamlessly with Databricks, Snowflake, AWS and other ecosystems, and accelerates AI adoption by making enterprise data “AI ready”.

•Generative AI platform for the development and deployment of our proprietary solutions, including, among others, Smart Agent Assist, Claims Assist, Conversational Business Intelligence and Code Harbor.

•Xtrakto.AI is a patented and AI-powered solution designed to alleviate the challenges of managing unstructured data. PayMentor is an AI-powered collections and receivables management solution designed to optimize the debt collection process.

Our generative AI ecosystem spans data to decision pipelines, combining platform-native accelerators, agentic automation, domain specific LLMs, workflow orchestration, code modernization tools, and enterprise enablement frameworks. Together, these tools make AI deeply embedded in client workflows, delivering faster, more intelligent, end to end digital transformation.

Digital Operations

Our digital operations business comprises technology-enabled managed services that blend our deep domain expertise with our industry-specific solutions and services that help clients run mission-critical business functions with enhanced productivity, streamlined workflows, greater speed and improved accuracy, reduce operating costs and gain more scalable business outcomes. Drawing on over two decades of experience in managing complex operations across insurance,

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healthcare and life sciences, banking, capital markets, and diversified industries across markets, our digital operations team applies deep industry expertise and tailored proprietary or client-owned technology to solve complex challenges and drive measurable outcomes. These digital operations deployments form the foundation for future client transformation opportunities to infuse AI into client workflows and unlock even greater value.

Our Segments

Our reportable segments, aligned to our IMUs, which provide data and AI-led solutions and services and digital operations solutions and services, are described below.

Insurance: Our Insurance IMU serves property and casualty insurance, life insurance, disability insurance, insurance brokers, reinsurers, annuity and retirement services and insurtech companies. Our data and AI-led solutions and services and digital operations solutions and services span across the insurance value chain.

We provide end-to-end data and AI-led solutions and services and digital operations solutions and services across the insurance industry encompassing claims management, premium and benefit administration, agency management, account reconciliation, actuarial and risk analytics, policy research, digital marketing, new business acquisition, underwriting support, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey and customer service using digital technology, AI, including agentic AI, generative AI, machine learning (“ML”) and advanced automation. We also combine our cloud-first digital insurance software solutions and industry expertise with agentic AI, generative AI, machine learning, advanced analytics, and platforms. Our Insurance Large Language Model (“LLM”), an industry-specific generative AI platform for claims, underwriting and subrogation that we developed leveraging our deep experience and proprietary data in the insurance industry. In addition, we provide a suite of data and AI-led finance and accounting services that include financial planning and analysis, decision support, GAAP and STAT accounting, regulatory and statutory reporting, and compliance services in addition to core finance operations. We bring a data and AI-led and practical digital approach to finance and accounting, enabling our clients to simplify and scale their finance and accounting processes, drive stakeholder centricity, improve controls and compliance, reduce operating costs and deliver rich data and AI-led insights to our clients’ businesses.

We also provide end-to-end third-party administration for life and annuity insurance policies, which include digital customer acquisition services using a SaaS delivery model through our LifePRO® and Life Digital Suite platforms that help clients administer life insurance, annuities and credit life and disability insurance policies. In addition, we provide subrogation services to property and casualty insurers using a business process-as-a-service delivery model and our proprietary Subrosource® software platform, the largest commercial end-to-end subrogation platform. Subrosource® integrates with client systems, manages recovery workflow, increases recoveries and reduces costs.

Healthcare and Life Sciences: Our Healthcare and Life Sciences IMU primarily serves U.S.-based healthcare payers, providers, pharmacy benefit managers (“PBMs”), and life sciences organizations, helping them address their operational, regulatory and customer-facing dynamic business challenges. We combine deep healthcare and life sciences domain expertise with data, analytics and AI-led insights and technology-enabled services to transform how care is delivered, managed and paid at these organizations.

We provide services related to care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement, commercial analytics, regulatory support, which address the market need for improved healthcare outcomes, enhanced patient and provider experience and optimized healthcare spending.

Through our integrated range of data and AI-led solutions and services and digital operations solutions and services offerings, we streamline healthcare administration processes, enhance operational efficiency, reduce costs for both providers and consumers and improve consumer experience by simplifying complex workflows and, minimizing administrative hurdles.

For healthcare payers, our payment integrity services help improve claims accuracy and reduce fraud, and waste. We offer pre-pay and post-pay audit solutions, payment analytics that leverage advanced analytics, data mining, AI, NLP, and automation to identify overpayment claims, verify eligibility, assess contractual compliance to support both pre‑pay and post‑pay audit programs. In addition, we offer subrogation and claims recovery, care management and patient navigation solutions to our clients. For healthcare providers, we offer revenue cycle management, digital transformation, data-driven analytics and contact center solutions. For PBMs, we provide digital transformation, data and analytics and call center modernization. Our integrated care management offering, including our proprietary clinical data, connects payers, providers and members to increase efficiency and effectiveness across all aspects of care management, including medical, pharmacy and behavioral health.

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Our Life Sciences offerings combine domain expertise, data engineering, AI-driven insight generation, and digital operations to deliver outcomes across commercial, clinical, regulatory, and patient support functions. We act as a transformation partner for life sciences organizations seeking to modernize operations, comply with evolving regulations, accelerate clinical and commercial performance, and embed AI deeply into the enterprise.

We leverage AI, including agentic AI and generative AI, ML, advanced analytics, and cloud-based solutions across the segment to enhance value-based care, optimize claims, and ensure regulatory compliance to deliver improved efficiency, business outcomes and consumer experience.

Banking, Capital Markets and Diversified Industries: Our Banking, Capital Markets, and Diversified Industries group delivers comprehensive solutions across a broad spectrum of sectors, including consumer and commercial banking, credit card and payment services, fintech, wealth and retirement services, capital markets, utilities, retail and consumer packaged goods, communications, media and entertainment, travel and leisure, transportation and logistics, infrastructure and other business services.

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-04-28 (period ending 2026-03-31).

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in connection with our unaudited consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Some of the statements in the following discussion are forward looking statements.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 these statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. These statements often 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 our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include but are not limited to:

•our ability to maintain and grow client demand for our services and solutions, including anticipating and incorporating the latest technologies, for instance, artificial intelligence (“AI”), including generative AI, agentic AI into our offerings;

•use of AI technology presents competitive, operational, reputational and legal risks, and our use of AI technology may not be successful;

•impact on client demand by the selling cycle and terms of our client contracts; including for our AI-related offerings;

•our ability to attract and retain enough sufficiently trained employees to support our operations or any changes in the senior management team;

•our ability to accurately estimate and/or manage costs;

•our ability to adjust our pricing terms or effectively manage our asset utilization levels to meet the changing demands of our clients and potential clients;

•cyber security incidents, data breaches, additional cybersecurity and privacy risks from growing use of AI, or other unauthorized disclosure of sensitive or confidential client and employee data;

•reliance on third parties to deliver services and infrastructure for client critical services, and on third party data use rights for certain of our offerings;

•employee wage increases;

•failure to protect our intellectual property;

•our dependence on a limited number of clients and our ability to withstand the loss of a significant client;

•our ability to manage rapid infrastructure and personnel growth across countries, including losing key talent to competitors;

•our ability to successfully consummate or integrate strategic acquisitions including the impact from the impairment of goodwill and other intangible assets, if any;

•legal liability arising out of customer and third party contracts;

•increasing competition in our industry, including from other providers and from internal resources of our clients;

•our ability to make accurate estimates and assumptions in connection with the preparation of our consolidated financial statements;

•challenges related to upgrading our enterprise resource planning system;

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•credit risk fluctuations in the market values of our investment and derivatives portfolios;

•telecommunications or technology disruptions or breaches, natural or other disasters, medical epidemics or pandemics, or acts of violence or war;

•challenges by applicable tax authorities to transfer pricing determinations or the introduction of new or unfavorable tax legislation, tariffs, including legal restrictions on repatriation of funds held abroad;

•exposure to currency exchange rate fluctuations in the various currencies in which we do business including rising inflation, high interest rates and economic recessionary trends on currency exchange rates;

•restrictions on immigration and work permits;

•regulatory, legislative and judicial developments, including our ability to adhere to regulations or accreditation or licensing standards that govern our business;

•our ability to service debt or obtain additional financing on competitive terms, or exposure to interest rate fluctuations that are not fully hedged through interest rate swaps; and

•negative public reaction in the United States or elsewhere to offshore outsourcing;

These and other factors are more fully discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. These and other risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report on Form 10-Q.

The forward-looking statements made by us in this Quarterly Report on Form 10-Q, or elsewhere, speak only as of the date on which they were made. New risks and uncertainties may occur from time to time, and it is impossible for us to predict those events or how they may affect us. We have no obligation to update any forward-looking statements in this Quarterly Report on Form 10-Q after the date of this Quarterly Report on Form 10-Q, except as required by federal securities laws.

Executive Overview

We are 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. We harness 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.

We manage and report financial information through four reportable segments, aligned to our Industry Market Units (“IMUs”): Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, and International Growth Markets, which reflects the manner in which our management reviews financial information and makes operating decisions.

Revenues

For the three months ended March 31, 2026, we generated revenues of $570.4 million compared to revenues of $501.0 million for the three months ended March 31, 2025, an increase of $69.4 million, or 13.8%.

We serve clients mainly in North America, and the United Kingdom & Europe, with these two regions generating 83.0% and 14.5%, respectively, of our total revenues for the three months ended March 31, 2026 and 82.9% and 15.1%, respectively, of our total revenues for the three months ended March 31, 2025.

For the three months ended March 31, 2026 and 2025, our total revenues from our top ten clients accounted for 34.6% and 33.7% of our total revenues, respectively. Although we continue to develop relationships with new clients to diversify our client base, we believe that the loss of any of our top ten clients could have a material adverse effect on our financial performance.

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Our Business

Data and AI-led: Data and AI-led revenue is derived from our Data Management, Analytics, AI services and solutions businesses. It includes revenue from fully integrated business operations like payment integrity services and platform-based solutions and services, which combine operations, technology, data, analytics, and AI. It also includes revenue from operations that embed data and AI within clients’ operational workflows.

Digital operations: Digital operations revenue is derived from managed services that blend our deep domain expertise with industry-specific solutions and services to operate clients’ business functions with enhanced productivity, greater speed and improved accuracy. These digital operations deployments form the foundation for future client transformation opportunities to infuse AI into client workflows and unlock even greater value.

Our reportable segments, aligned to our IMUs, which provide data and AI-led solutions and services and digital operations solutions and services, are described below:

Insurance: We serve insurance brokers, reinsurers, and insurtech companies and provide services to insurers in the areas of property and casualty, life, disability, annuity, and retirement services.

Our offerings include claims management, premium and benefit administration, agency management, account reconciliation, actuarial and risk analytics, policy research, digital marketing, new business acquisition, underwriting support, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, finance and accounting, and customer service using digital technology, AI, including agentic AI, generative AI, machine learning (“ML”) and advanced automation. We also combine our cloud-first digital insurance software solutions and industry expertise with agentic AI, generative AI, machine learning, advanced analytics, and platforms. This includes our Insurance Large Language Model (“LLM”), a specialized generative AI platform for claims, underwriting and subrogation, developed leveraging our deep experience and proprietary data in the insurance industry. Additionally, we provide third-party administration for life and annuity insurance through our LifePRO® and Life Digital Suite SaaS platforms and also offer subrogation services to property and casualty insurers using our Subrosource® BPaaS platform.

Healthcare and Life Sciences: We serve U.S.-based healthcare payers, providers, pharmacy benefit managers (“PBMs”), and life sciences organizations by combining deep healthcare and life sciences domain expertise with data, analytics and AI-led insights and technology-enabled services that transform how care is delivered, managed and paid.

We provide care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement, commercial analytics and regulatory support services to improve healthcare outcomes, enhanced patient and provider experience, optimized healthcare spending and streamline healthcare administration processes by simplifying complex workflows.

For healthcare payers, we offer payment integrity services, pre and post-pay auditing services, payment analytics, subrogation and claims recovery, care management and patient navigation solutions. For healthcare providers, we offer revenue cycle management, digital transformation, data-driven analytics and contact center solutions. For PBMs, we provide digital transformation, data and analytics and call center modernization. Our life sciences offerings combine domain expertise, data engineering, AI-driven insight generation, and digital operations to deliver outcomes across commercial, clinical, regulatory, and patient support functions. We leverage AI, analytics, and cloud-based solutions to enhance value-based care, optimize claims, and ensure regulatory compliance.

Banking, Capital Markets, and Diversified Industries: Our Banking and Capital Markets and Diversified Industries group delivers comprehensive solutions across retail and commercial banking, credit card and payment services, fintech, wealth and retirement services, capital markets, utilities, retail and consumer packaged goods, communications, media and entertainment, travel and leisure, transportation and logistics, infrastructure and other business services industries.

By integrating deep domain expertise with AI-driven decision-making, we enable financial institutions to innovate, enhance operational agility, and adapt to evolving market demands. We provide risk management solutions, marketing and customer analytics solutions to our clients, along with our integrated operations services that encompass the full range of banking

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operations, including digital lending solutions that improve underwriting and compliance, omni-channel marketing, digital onboarding, know your customer (“KYC”)/anti-money laundering (“AML”) compliance, collections, fraud prevention, and customer servicing, among others. Our industry-leading AI and automation-driven service offerings drive operational efficiency and foster innovation across the financial services and other industries.

Our enterprise services and solutions include domain-specific operations, integrated finance and accounting services, customer experience management, back-office operations, and revenue enhancement, such as pricing and billing, enabling our clients to deliver enhanced operational efficiency, and high-quality customer experiences. For example, in the retail and consumer packaged goods sectors, we enable advanced supply chain performance through AI-driven analytics services supporting smarter merchandising, dynamic pricing, and accurate demand forecasting and for our clients in the utilities sector, we offer AI-enabled operations and solutions related to end-to-end customer life cycle management, including onboarding and terminations, engineering field operations, billing, and debt management.

International Growth Markets: Our International Growth Markets (“IGM”) IMU is focused on strengthening our global footprint outside of North America. We ensure customized delivery while leveraging EXL’s global capabilities in data, AI, and digital operations to drive differentiated business outcomes for our clients in growth markets. This provides us with opportunities to leverage our investments, experience, and expertise from the North America market to expand our global client base, drive further growth, and bring us closer to our clients and partners across the world. IGM consists of dedicated teams servicing clients and localizing our global capabilities in insurance, life sciences, banking and capital markets, energy and infrastructure, retail, consumer goods, and travel industries in growth markets. Across all regions in which we operate, we combine deep domain experience with our data and AI expertise to help clients innovate, enhance operational agility, adapt to changing market demands, and drive better business transformation.

Pricing: We charge for our services using various pricing models like time-and-material pricing, full-time-equivalent pricing, transaction-based pricing, outcome-based pricing, subscription-based pricing and other alternative or emerging pricing models. Outcome-based pricing arrangements are an example of a non-linear pricing model where our revenues from platforms and solutions and the services we provide are compensated based on our clients’ usage or savings rather than the efforts we deploy to provide these services. We continue to observe a shift in the industry pricing models toward transaction-based pricing, outcome-based pricing and other alternative pricing models. We believe this trend will continue and we use such alternative pricing models with some of our current clients and are seeking to move certain other clients from a full-time-equivalent pricing model to a transaction-based or other alternative pricing model. These alternative pricing models place the focus on operating efficiency in order to maintain or improve our gross margins.

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2026, as compared to the critical accounting policies and estimates referred in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Estimates” and Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

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Results of Operations

The following table summarizes our results of operations:

									(dollars in millions)
	Three months ended March 31, 2026				Three months ended March 31, 2025
			Percentage of Revenues, net				Percentage of Revenues, net		Dollar change		Percentage change
	(A)				(B)				(C=A-B)
Revenues, net	$	570.4	100.0	%	$	501.0	100.0	%	$	69.4	13.8	%
Cost of revenues(1)	348.3		61.1	%	307.7		61.4	%	40.6		13.2	%
Gross profit(1)	222.1		38.9	%	193.3		38.6	%	28.8		14.9	%
Operating expenses:
General and administrative expenses	69.1		12.1	%	59.4		11.9	%	9.7		16.2	%
Selling and marketing expenses	47.2		8.3	%	41.9		8.4	%	5.3		12.6	%
Depreciation and amortization expense	14.0		2.5	%	13.6		2.7	%	0.4		3.3	%
Total operating expenses	130.3		22.8	%	114.9		22.9	%	15.4		13.4	%
Income from operations	91.8		16.1	%	78.4		15.6	%	13.4		17.1	%
Foreign exchange gain/(loss), net	1.1		0.2	%	1.2		0.2	%	(0.1)		(4.8)	%
Interest expense	(4.0)		(0.7)	%	(4.1)		(0.8)	%	0.1		(4.7)	%
Other income, net	2.5		0.4	%	4.7		0.9	%	(2.2)		(49.2)	%
Income before income tax expense and earnings from equity affiliates	91.4		16.0	%	80.2		16.0	%	11.2		14.0	%
Income tax expense	24.3		4.3	%	13.5		2.7	%	10.8		80.2	%
Income before earnings from equity affiliates	67.1		11.8	%	66.7		13.3	%	0.4		0.6	%
Gain/(loss) from equity-method investment	—		—	%	(0.1)		—	%	0.1		(98.2)	%
Net income	$	67.1	11.8	%	$	66.6	13.3	%	$	0.5	0.8	%

(1) Exclusive of depreciation and amortization expense.

Due to rounding, the numbers presented in the tables included in this Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may not add up precisely to the totals provided.

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Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025

Revenues, net: The following table summarizes our revenues by reportable segments:

	Three months ended March 31,				Dollar change		Percentage change		Percentage of Total Revenues for the three months ended
	2026		2025						2026		2025
	(dollars in millions)
Insurance	$	194.0	$	172.0	$	22.0	12.7	%	34.0	%	34.3	%
Healthcare and Life Sciences	151.9		125.6		26.3		21.0	%	26.7	%	25.1	%
Banking, Capital Markets and Diversified Industries	127.4		117.7		9.7		8.2	%	22.3	%	23.5	%
International Growth Markets	97.1		85.7		11.4		13.4	%	17.0	%	17.1	%
Revenues, net	$	570.4	$	501.0	$	69.4	13.8	%	100.0	%	100.0	%

Revenues for the three months ended March 31, 2026 were up by $69.4 million, or 13.8%, compared to the three months ended March 31, 2025, driven by the expansion of business from our existing clients across all reportable segments by 11.8% and revenue from new clients wins by 2.0% during the three months ended March 31, 2026.

Revenue growth in Insurance by 12.7% was driven by the expansion of business from our existing clients by 11.5% and new clients by 1.2% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Revenue growth in Healthcare and Life Sciences by 21.0% was driven by the expansion of business from our existing clients by 20.5% and new clients by 0.5% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Revenue growth in Banking, Capital Markets and Diversified Industries by 8.2% was driven by the expansion of business from our existing clients by 4.1% and new clients by 4.1% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Revenue growth in International Growth Markets of 13.4% was driven by the expansion of business from our existing clients by 8.0%, new clients by 2.9% and a foreign exchange gain, net of hedging by 2.5% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Cost of Revenues and Gross Margin: The following table sets forth cost of revenues and gross margin of our reportable segments.

	Cost of Revenues								Gross Margin
	Three months ended March 31,				Dollar change		Percentage change		Three months ended March 31,				Percentage change
	2026		2025						2026		2025
	(dollars in millions)
Insurance	$	120.8	$	109.2	$	11.6	10.7	%	37.7	%	36.6	%	1.1	%
Healthcare and Life Sciences	83.1		70.5		12.6		17.9	%	45.3	%	43.9	%	1.4	%
Banking, Capital Markets and Diversified Industries	80.4		73.7		6.7		9.0	%	36.9	%	37.3	%	(0.4)	%
International Growth Markets	64.0		54.3		9.7		17.9	%	34.1	%	36.6	%	(2.5)	%
Total	$	348.3	$	307.7	$	40.6	13.2	%	38.9	%	38.6	%	0.3	%

Cost of revenues for the three months ended March 31, 2026 increased by $40.6 million, or 13.2%, compared to the three months ended March 31, 2025. The increase in cost of revenues was due to increases in employee-related costs of $35.5 million on account of higher headcount and wage inflation, and higher technology, facilities and other operating costs of $8.8 million, partially offset by a foreign exchange gain, net of hedging of $3.7 million. Our gross margin for the three months ended March 31, 2026 was 38.9%, compared to 38.6% for the three months ended March 31, 2025, an increase of 30 basis points (“bps”) primarily driven by higher revenues and operational efficiencies, partially offset by lower volumes in certain existing clients during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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The increase in cost of revenues in Insurance by $11.6 million for the three months ended March 31, 2026 was due to increases in employee-related costs of $11.2 million on account of higher headcount and wage inflation, and higher technology costs of $1.8 million, partially offset by a foreign exchange gain, net of hedging of $1.1 million and lower other operating costs of $0.3 million. Gross margin in Insurance increased by 110 bps, primarily due to higher revenues and operational efficiencies during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in cost of revenues in Healthcare and Life Sciences by $12.6 million for the three months ended March 31, 2026 was due to increases in employee-related costs of $9.3 million on account of higher headcount and wage inflation, higher technology costs of $1.6 million, and higher facilities and other operating costs of $2.7 million, partially offset by foreign exchange gain, net of hedging of $1.0 million. Gross margin in Healthcare and Life Sciences increased by 140 bps, primarily due to higher volumes in certain existing clients during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $6.7 million for the three months ended March 31, 2026 was due to increases in employee-related costs of $6.9 million on account of higher headcount and wage inflation, and higher technology costs of $1.1 million, partially offset by a foreign exchange gain, net of hedging of $1.0 million and lower other operating costs of $0.3 million. Gross margin in Banking, Capital Markets and Diversified Industries decreased by 40 bps, primarily due to lower volumes in certain existing clients during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in cost of revenues in International Growth Markets by $9.7 million for the three months ended March 31, 2026 was due to increases in employee-related costs of $8.1 million on account of higher headcount and wage inflation, and higher technology, facilities and other operating costs of $2.2 million, partially offset by a foreign exchange gain, net of hedging of $0.6 million. Gross margin in International Growth Markets decreased by 250 bps, primarily due to lower volumes in certain existing clients during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues increased from 20.2% during the three months ended March 31, 2025 to 20.4% during the three months ended March 31, 2026.

The increase in SG&A expenses by $15.0 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 was primarily due to increases in employee-related costs of $11.8 million on account of higher headcount and wage inflation, increased investments in digital and generative AI capabilities of $1.9 million, and higher sales and marketing and other operating costs of $1.3 million.

Depreciation and Amortization. Depreciation and amortization expenses as a percentage of net revenues decreased by 0.2% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in depreciation and amortization expense by 3.3% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 was primarily due to investments in infrastructure, technology assets and digital capabilities.

Income from Operations. The increase in income from operations by 17.1% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 was primarily due to higher revenues and gross margins, partially offset by higher SG&A expenses.

Foreign Exchange Gain, net. We recorded a foreign exchange gain, net of $1.1 million for the three months ended March 31, 2026, compared to a foreign exchange gain, net of $1.2 million for the three months ended March 31, 2025. Foreign exchange gains and losses are primarily attributable to the movement of the U.S. dollar against the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Interest expense. The decrease in interest expense by $0.1 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 was primarily due to a lower average effective interest rate.

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Other Income, net.

	Three months ended March 31,				Dollar change		Percentage change
	2026		2025
	(dollars in millions)
Interest and dividend income	$	1.6	$	2.7	$	(1.1)	(40.8)	%
Gain on sale and fair value mark-to-market on investments	1.5		1.9		(0.4)		(23.5)	%
Others, net	(0.6)		0.1		(0.7)		NM(1)
Other income, net	$	2.5	$	4.7	$	(2.2)	(49.2)	%

(1) Not Meaningful

Other income, net decreased by $2.2 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 due to lower yield on our investments and higher other expenses.

Income Tax Expense. The effective tax rate for the three months ended March 31, 2026 was 26.6%, an increase from 16.9% for the three months ended March 31, 2025. We recorded income tax expense of $24.3 million and $13.5 million for the three months ended March 31, 2026 and 2025, respectively. The increase in income tax expense was primarily as a result of lower excess tax benefits related to stock-based compensation of $13.2 million and higher profit, partially offset by a decrease in non-deductible compensation expenses, as compared to the three months ended March 31, 2025.

Net Income. The increase in net income by 0.8% during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 was attributable to the aforementioned factors.

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Liquidity and Capital Resources

	Three months ended March 31,				Dollar change		Percentage change
	2026		2025
	(dollars in millions)
Opening cash, cash equivalents and restricted cash	$	166.0	$	171.4	$	(5.4)	(3.2)	%
Net cash provided by operating activities	1.7		3.2		(1.5)		(47.0)	%
Net cash provided by/(used for) investing activities	44.0		(22.3)		66.3		(297.7)	%
Net cash (used for)/provided by financing activities	(44.6)		3.4		(48.0)		NM(1)
Effect of exchange rate changes	(2.3)		2.7		(5.0)		(186.3)	%
Closing cash, cash equivalents and restricted cash	$	164.8

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 3 transactions across 2 insiders. Net: -29,093 shares, -$828,537.

Date	Insider	Role	Action	Shares	Price	Value
2026-07-01	Bhalla Vikas	President of EXL	Sell	-12,000	$26.47	-$317,640
2026-06-04	Bhalla Vikas	President of EXL	Sell	-12,000	$30.22	-$362,640
2026-05-20	AYYAPPAN AJAY	EVP & Gen Counsel/Corp. Sec'y.	Sell	-5,093	$29.11	-$148,257

Source: SEC Form 4 filings.

Next expected filings

~2026-07-28 10-Q expected by 2026-08-09 (in 2 days)
~2026-10-27 10-Q expected by 2026-11-08 (in 93 days)
~2027-02-23 10-K expected by 2027-02-28 (in 212 days)
~2027-04-27 10-Q expected by 2027-05-09 (in 275 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-07-21 8-K Officer/Director Change; Other Events; Financial Statements and Exhibits
2026-06-24 8-K Other Events; Financial Statements and Exhibits
2026-05-12 8-K Officer/Director Change; Other Events; Financial Statements and Exhibits
2026-04-28 8-K Earnings Release; Financial Statements and Exhibits
2026-04-28 10-Q Quarterly Report
2026-04-27 DEF 14A Proxy Statement
2026-03-18 8-K Material Agreement Entered; Officer/Director Change; Financial Statements and Exhibits
2026-02-24 10-K Annual Report
2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
2025-12-15 8-K Other Events; Financial Statements and Exhibits
2025-10-28 10-Q Quarterly Report
2025-10-28 8-K Earnings Release; Financial Statements and Exhibits
2025-10-20 8-K Officer/Director Change; Other Events; Financial Statements and Exhibits
2025-07-29 10-Q Quarterly Report
2025-07-29 8-K Material Agreement Entered; Earnings Release; Financial Statements and Exhibits

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