ExlService Holdings, Inc.

ExlService Holdings, Inc. is a global data and artificial intelligence company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed. The company 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. The company was founded in 1999 and is headquartered in New York with over 65,000 employees spanning six continents.

The company competes primarily against large global companies with data and AI-led capabilities such as Cognizant Technology Solutions, Genpact Limited, Infosys, NTT DATA, and Tata Consultancy Services; niche industry-specific digital operations solutions and services providers such as Cotiviti and Optum Health; niche analytics/AI services providers and platform providers such as Fractal, Latentview Analytics and platform vendors like Guidewire; pure-play AI solutions/platform vendors such as Salesforce, Gradient AI; global capability centers or other internal resources of a potential client; and leading management consulting firms providing AI advisory and embedding AI solutions in workflows such as Accenture, Deloitte, Capgemini. The company generated revenues from approximately 590 clients and 570 clients in 2025 and 2024, respectively. The top three, five and ten clients generated 17.8% ¹, 23.9% ² and 34.0% ³ of revenues, respectively, in 2025, compared to 17.2% ⁴, 23.0% ⁵ and 33.2% ⁶ in 2024. No client accounted for more than 10% of total revenues in 2025 or 2024.

The company generates revenue by providing data and AI-led solutions and services and digital operations solutions and services to clients. The company charges for its 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. The company's contracts with clients typically take the form of a master services agreement, which is a framework agreement supplemented with individually negotiated statements of work. Most digital operations solutions and services contracts are long term, typically ranging from three to five years, generally requiring a longer termination notice period and may include an early termination fee.

The company's reportable segments, aligned to its Industry Market Units, are Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, and International Growth Markets. The Insurance segment serves property and casualty insurance, life insurance, disability insurance, insurance brokers, reinsurers, annuity and retirement services and insurtech companies, providing end-to-end data and AI-led solutions and services and digital operations solutions and services across the insurance value chain including 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. The Healthcare and Life Sciences segment primarily serves U.S.-based healthcare payers, providers, pharmacy benefit managers, and life sciences organizations, providing services related to care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement, commercial analytics, and regulatory support. The Banking, Capital Markets and Diversified Industries segment delivers comprehensive solutions across 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. The International Growth Markets segment is focused on strengthening the company's global footprint outside of North America and customizing offerings for diverse regional requirements, servicing clients in the insurance, life sciences, banking and capital markets, energy and infrastructure, retail, consumer goods, and travel industries in growth markets.

The company's revenues by service type are presented as data and AI-led solutions and services and digital operations solutions and services. For fiscal 2025, data and AI-led revenues were $1,155,342 thousand ⁷ and digital operations revenues were $932,337 thousand ⁸. For fiscal 2024, data and AI-led revenues were $979,731 thousand ⁹ and digital operations revenues were $858,641 thousand ¹⁰. For fiscal 2023, data and AI-led revenues were $834,737 thousand ¹¹ and digital operations revenues were $795,931 thousand ¹². Revenues by reportable segment for fiscal 2025 were Insurance $710,575 thousand ¹³, Healthcare and Life Sciences $532,584 thousand ¹⁴, Banking, Capital Markets and Diversified Industries $482,356 thousand ¹⁵, and International Growth Markets $362,164 thousand ¹⁶. For fiscal 2024, segment revenues were Insurance $656,419 thousand ¹⁷, Healthcare and Life Sciences $430,679 thousand ¹⁸, Banking, Capital Markets and Diversified Industries $426,716 thousand ¹⁹, and International Growth Markets $324,558 thousand ²⁰.

In the first quarter of 2025, the company implemented operational and structural changes to accelerate the execution of its data and AI strategy, creating a new operating model comprised of Industry Market Units and Strategic Growth Units. On February 26, 2024, the board of directors authorized a $500 million ²¹ common stock repurchase program beginning March 1, 2024. During the year ended December 31, 2025, as part of the publicly announced program, the company purchased 5,934,710 ²² shares of common stock for an aggregate purchase consideration of $253.2 million ²³, representing an average purchase price per share of $42.67 ²⁴. The company also purchased 229,483 ²⁵ shares from employees in connection with withholding tax payments related to the vesting of restricted stock units for an aggregate purchase consideration of $11.1 million ²⁶. Additionally, the company purchased 1,551,970 ²⁷ shares as part of a private transaction from Orogen Echo LLC for an aggregate purchase price of $63.4 million ²⁸ under a Stock Purchase Agreement dated December 15, 2025. In 2025, the company added 9 ²⁹ new patents, increasing its total number of patents to 12 ³⁰ since the inception of its patent program. The company entered into a new supplemental confirmation to the prior Master Accelerated Share Repurchase Confirmation on July 29, 2025.

For fiscal 2025, the company generated revenues of $2,087,679 thousand ³¹ compared to $1,838,372 thousand ³² for fiscal 2024, an increase of $249,307 thousand ³³ or 13.6% ³⁴. Net income was $251,019 thousand ³⁵ for fiscal 2025 compared to $198,297 thousand ³⁶ for fiscal 2024, an increase of 26.6% ³⁷. Diluted earnings per share were $1.54 ³⁸ for fiscal 2025 compared to $1.21 ³⁹ for fiscal 2024. Gross profit was $801,076 thousand ⁴⁰ for fiscal 2025 compared to $691,013 thousand ⁴¹ for fiscal 2024, with gross margin increasing to 38.4% ⁴² from 37.6% ⁴³. Income from operations was $313,750 thousand ⁴⁴ for fiscal 2025 compared to $263,620 thousand ⁴⁵ for fiscal 2024, an increase of 19.0% ⁴⁶. Net cash provided by operating activities was $350,717 thousand ⁴⁷ for fiscal 2025 compared to $268,525 thousand ⁴⁸ for fiscal 2024.

The company expects to incur total capital expenditures of between $50 million to $55 million ⁴⁹ in fiscal 2026, primarily to meet growth requirements, including additions to facilities and infrastructure, as well as investments in technology applications, product development and other digital technologies.

The company's growth strategy focuses on expanding its addressable markets by continuing to focus on insurance, healthcare and life sciences, banking, capital markets and diversified industries including retail, communications and media, and energy and infrastructure industries, which are large markets with high demand, as well as pursuing opportunities in emerging industries. The company aims to strengthen its market presence by acquiring new clients and continue to enhance its offerings through innovation and expanding its partner network. The International Growth Markets IMU is helping strategically expand the company's footprint in markets outside of North America and drive focus on offerings and expansion in those markets in new and existing clients.

The company's growth strategy also focuses on integrating its data and AI-led capabilities and domain expertise, which has been central to its market differentiation. The company continues to maintain its focus on cultivating long-term client relationships as well as attracting new clients, seeking to expand these relationships by increasing the depth and breadth of services provided across clients' value chains and geographies, offering the full suite of services including data and AI-led solutions and services and digital operations solutions and services, and supporting clients' geographic expansions by leveraging the company's global footprint. The company intends to continue building a portfolio of Fortune 500 and Forbes Global 2000 companies in its focus industries and also intends to cultivate long-term relationships with medium-sized companies by leveraging its data, AI solutions and services, and digital capabilities.

The company expects its cost of revenues to continue to increase as it continues to add professionals in its operations centers globally to service additional business and as wages continue to increase globally. The company expects recruitment and training costs to continue to increase as it hires additional staff to service new clients and train existing staff to provide them with evolving skill sets. The company expects that it will continue to incur additional costs to monitor and improve operational efficiency of its hybrid working model, invest in information technology solutions, including adaption to evolving modes of seeking such solutions through cloud-based hosting arrangements and security measures to safeguard against information security risks. The company expects its general and administrative costs to increase as it continues to strengthen its support and enabling functions and invest in leadership development, performance management and training programs. The company expects that sales and marketing expenses will continue to increase as it invests in its sales and client management functions to better serve its clients and in its branding.

The company expects depreciation to decrease on assets related to operations centers, such as office furniture and equipment and leasehold improvements, as part of its ongoing evaluation of business needs and optimization of operations centers. As the business continues to expand, the company expects additional investments in digital technologies and equipment, including laptops, desktop computers, servers and other infrastructure, and increased reliance on hybrid working model, leading to increases in depreciation on assets related to such investments. The company expects amortization of intangible assets to increase further as it pursues strategic relationships and acquisitions.

The company expects to use cash from operating activities to maintain and expand its business by making investments, primarily related to building new digital capabilities, including AI, and purchase telecommunications equipment and computer hardware and software in connection with managing client operations. The company anticipates that it will continue to rely upon cash from operating activities to finance most of its requirements, although if it has significant growth through acquisitions, it may need to obtain additional financing. The company expects to incur total capital expenditures of between $50 million to $55 million ⁵⁰ in fiscal 2026.

The company faces headwinds from global macroeconomic and geopolitical conditions that can undermine business confidence and cause clients to reduce or defer their spending on new initiatives and technologies. The company also faces headwinds from the rapid evolution of AI technology, which presents competitive, reputational and legal risks, and the company's use of AI technology may not be successful. The company faces constraints from the highly competitive market for skilled employees, particularly in AI, machine learning, data science, and digital transformation, and the shortage of AI and data experts in the global market, which may be further affected by changes in U.S. immigration laws and policies limiting the availability of H-1B or other visas.

The company faces headwinds from currency exchange rate fluctuations, as a significant portion of its expenses are incurred in Indian rupee, Philippine peso, South African rand and U.K. pound sterling, representing 31.1% ⁵¹, 8.4% ⁵², 3.3% ⁵³ and 3.1% ⁵⁴ of total expenses in fiscal 2025, respectively, while revenues are primarily denominated in U.S. dollar and U.K. pound sterling. The company also faces constraints from the potential for new unfavorable tax legislation in the countries it operates in, including the Pillar Two Framework prescribed by the OECD, and from legal restrictions on repatriation of earnings. The company faces headwinds from the potential for increased tariffs and trade regulations, which could significantly affect customers' businesses and their ability or willingness to engage the company for its offerings.

The company's business depends on maintaining and growing client demand for its services and solutions, including by anticipating and incorporating the latest technology into its offerings, and a significant reduction in such demand, a failure to respond to the evolving technological environment or a change in service or solution delivery could materially affect results of operations. The use of AI technology presents competitive, reputational and legal risks, and the company's use of AI technology may not be successful. The company earns a substantial portion of its revenues from a limited number of clients that are mainly located in the United States, with the top ten clients generating 34.0% ⁵⁵ of revenues in 2025. Employee wage increases may prevent the company from sustaining its competitive advantage and may reduce its profit margin, as wage costs in India, the Philippines and South Africa have historically been significantly lower than wage costs in the United States, the United Kingdom and Europe. Currency exchange rate fluctuations in the various currencies in which the company does business, or the failure of its hedging strategies to mitigate such fluctuations, could have a material adverse effect on results of operations, as a 10% appreciation/depreciation in the Indian rupee against the U.S. dollar would have increased/decreased expenses by approximately $55.2 million ⁵⁶ for fiscal 2025.

Management's message emphasizes the company's transformation into a global data and AI company that provides strategic data and AI-led solutions and services and digital operations solutions and services to help clients reinvent their business models, drive better business outcomes and unlock growth with speed. The key strategic priorities emphasized for the period ahead include expanding addressable markets by focusing on large markets with high demand such as insurance, healthcare and life sciences, banking, capital markets and diversified industries; integrating data and AI-led capabilities and domain expertise to maintain market differentiation; cultivating long-term client relationships and expanding the client base; optimizing the global delivery footprint and operational infrastructure; and pursuing strategic acquisitions and partnerships to strengthen capabilities and enhance the solutions roadmap. Management expects to incur total capital expenditures of between $50 million to $55 million ⁵⁷ in fiscal 2026.