EXL Raises 2026 Outlook as Q3 Revenue Grows Nearly 20%

ExlService Holdings Inc. (NASDAQ: EXLS) raised its 2026 revenue and adjusted earnings outlook after third-quarter revenue increased nearly 20%, supported by strong growth in data- and AI-led services and across its major industry groups.

Revenue for the third quarter of 2026 reached $634.0 million, up 19.7% from a year earlier on a reported basis and 19.9% in constant currency. Adjusted diluted earnings per share rose 28.5% to $0.62, while adjusted operating margin declined 10 basis points year over year to 19.3%.

The results extended EXL’s sequential revenue growth from $594.8 million in the second quarter and $529.6 million in the third quarter of 2025. Adjusted diluted EPS increased from $0.59 in the prior quarter and $0.48 a year earlier.

Data and AI-led revenue drives growth

Data and AI-led revenue was $406.9 million, accounting for 64.2% of total revenue and rising 36.7% year over year in constant currency. EXL defines the category as revenue from data management, analytics, AI services and solutions, including integrated operations and workflows that embed data and AI.

Digital Operations revenue declined 1.8% in constant currency to $227.1 million, representing 35.8% of total revenue. Total Operations revenue, which includes Digital Operations and Data and AI-led Operations, increased 11.9% in constant currency to $326.2 million.

Banking, Capital Markets and Diversified Industries was the fastest-growing reportable segment, with revenue rising 27.0% in constant currency to $153.5 million. Insurance revenue increased 15.5% to $208.5 million, while Healthcare and Life Sciences grew 18.6% to $160.4 million. International Growth Markets generated $111.6 million, up 21.1% in constant currency.

Measured by client industry, including International Growth Markets, Banking, Capital Markets and Diversified Industries produced $226.6 million of revenue, an increase of 24.7% in constant currency. Insurance generated $246.4 million, up 16.5%, and Healthcare and Life Sciences contributed $160.9 million, up 18.8%.

North America remained EXL’s largest geographic market, accounting for 82.2% of revenue. The United Kingdom and Europe represented 15.0%, with the rest of the world contributing 2.8%.

EXL added 14 clients during the quarter. Its workforce increased by 5,694 from the second quarter to 74,107 employees, including about 3,500 employees from the iMerit acquisition. The third-quarter employee attrition rate was 22.3%.

2026 outlook increased

Based on current visibility, EXL now expects full-year 2026 revenue of $2.43 billion to $2.44 billion, compared with its previous range of $2.39 billion to $2.415 billion. The new forecast implies organic constant-currency growth of 15% and reported-currency growth of 16% to 17%. The prior outlook called for organic constant-currency growth of 13% to 14% and reported growth of 14% to 16%.

The company also increased its adjusted diluted EPS forecast to $2.34 to $2.36, representing growth of 20% to 21%. Its previous forecast was $2.25 to $2.29, or growth of 16% to 18%.

The outlook assumes a U.S. dollar-to-Indian rupee exchange rate of 95, a pound sterling-to-U.S. dollar rate of 1.33 and a U.S. dollar-to-Philippine peso rate of 63.0, with other currencies held at current exchange rates.

EXL’s adjusted measures are non-GAAP and exclude items including stock-based compensation, amortization of acquisition-related intangible assets, certain acquisition-related costs or benefits, and specified tax adjustments. The company cautioned that actual results could differ from its forecasts because of factors including the integration of iMerit, the ability to sustain client demand, AI-related risks, selling cycles, employee hiring and retention, cost management, currency movements and the international nature of its operations.