Key Highlights

  • Revenue was $634.0 million, up 19.7% reported and 19.9% in constant currency, and up 6.6% sequentially.
  • Adjusted diluted EPS was $0.62, up 28.5% from $0.48, against a screen estimate of $0.56.
  • Full-year revenue guidance was raised to $2.430 billion to $2.440 billion from $2.390 billion to $2.415 billion.
  • Data and AI-led revenue grew 36% reported and 31% organically, and is almost two-thirds of the business.
  • Adjusted operating margin was 19.3%, against 19.4% a year earlier and 19.7% in the second quarter.

ExlService Earnings: Did Revenue Growth of 19.7% and a Guidance Raise Beat Expectations?

ExlService (NASDAQ:EXLS) reported third-quarter 2026 results on Tuesday, October 27, with revenue of $634.0 million, up 19.7% from $529.6 million. Adjusted diluted EPS was $0.62 against $0.48, up 28.5%, ahead of the $0.56 screen estimate, an as-screened surprise of 11.02%. GAAP diluted EPS was $0.45, up 25.3% from $0.36.

The company raised its full-year outlook for the second time this year. Revenue is now expected at $2.430 billion to $2.440 billion, from $2.390 billion to $2.415 billion, which equals reported growth of 16% to 17% and organic constant-currency growth of about 15%.

Adjusted EPS guidance rose to $2.34 to $2.36 from $2.25 to $2.29, or growth of 20% to 21%. The assumptions include a rupee rate of 95 per dollar, a sterling rate of 1.33 and a peso rate of 63.

Segment Results: Where Did the Growth Come From, and What Happened to Margins?

Every segment grew more than 15% organically, according to the release. By our calculation, Banking, Capital Markets and Diversified Industries rose about 26.9% to $153.5 million, International Growth Markets about 20.3% to $111.6 million, Healthcare and Life Sciences about 18.6% to $160.4 million and Insurance about 15.5% to $208.5 million.

Gross margin was 38.0%, compared with 38.5% a year ago. Banking gross margin fell to 34.4% from 38.3%, while Healthcare and Life Sciences improved to 45.2% from 43.0%.

GAAP operating income was $88.9 million, a 14.0% margin against 14.4%. Adjusted operating income was $122.5 million, a 19.3% margin, and adjusted EBITDA was $135.0 million, a 21.3% margin versus 21.6% a year earlier. Net income was $68.8 million versus $58.2 million.

Data and AI Demand: What Did Management Say Is Driving the Acceleration?

The chief executive said momentum accelerated through the year and that data and AI-led revenue, described as almost two-thirds of the business, grew 36% reported and 31% organically. He credited the data and AI strategy combined with deep domain expertise, and said the model gives very good visibility into the rest of the year. The chief financial officer said the quarter supported raising guidance once again.

The company completed the iMerit acquisition, creating a Model Training Solutions practice, and won 14 new clients in the quarter. Goodwill rose to $581.6 million from $419.7 million and other intangibles to $99.5 million from $36.2 million.

Balance Sheet and Buyback: How Did Borrowing and Share Count Change?

Total borrowings were about $511.0 million, up from roughly $298.6 million at year-end, after the company closed a new $1 billion senior secured credit facility. Cash was $154.1 million. Receivables rose to $457.3 million from $343.1 million.

Shares outstanding fell to 151.0 million from 156.4 million at year-end, and treasury stock at cost rose by about $208.4 million, which points to net repurchases. Weighted diluted shares were 152.6 million versus 161.7 million a year ago.

What to Watch Next: What Will the Wednesday, October 28 Call Clarify?

The earnings call is scheduled for Wednesday, October 28 at 10 a.m. ET. Investors will look for detail on iMerit integration, the Banking segment margin, and how long data and AI demand can sustain this growth rate.