exls-20260630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________________________________

FORM 10-Q

_________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 001-33089

_________________________________________________________

EXLSERVICE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_________________________________________________________


Delaware		82-0572194
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

320 Park Avenue,	29th Floor,
New York,	New York	10022
(Address of principal executive offices)		(Zip code)

(212) 277-7100

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:	Trading symbol(s)	Name of Each Exchange on Which Registered:
Common Stock, par value $0.001 per share	EXLS	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and

(2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 24, 2026, there were 151,612,499 shares of the registrant’s common stock outstanding, par value $0.001 per share.

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TABLE OF CONTENTS



		PAGE
ITEM
	Part I. Financial Information	3

1.	FINANCIAL STATEMENTS (UNAUDITED)
	Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	3
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2026 and 2025	4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025	5
	Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2026 and 2025	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025	8
	Notes to Consolidated Financial Statements	9

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38

3.	Quantitative and Qualitative Disclosures About Market Risk	53

4.	Controls and Procedures	53

	Part II. Other Information	53

1.	Legal Proceedings	53

1A.	Risk Factors	53

2.	Unregistered Sales of Equity Securities and Use of Proceeds	53

3.	Defaults Upon Senior Securities	54

4.	Mine Safety Disclosures	54

5.	Other Information	54

6.	Exhibits	56

Signatures		57

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EXLSERVICE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except per share amount and share count)


		As of
	Notes	June 30, 2026		December 31, 2025

Assets
Current assets:
Cash and cash equivalents	7	$	126,722	$	146,326
Short-term investments	8	157,102		182,041
Restricted cash	7	12,964		12,392
Accounts receivable, net	4	434,362		343,105
Other current assets	11	144,132		146,093
Total current assets		875,282		829,957
Property and equipment, net	9	114,587		111,821
Operating lease right-of-use assets	21	97,495		97,411
Restricted cash	7	7,086		7,251
Deferred tax assets, net	22	139,288		129,968
Goodwill	10	418,693		419,654
Other intangible assets, net	10	29,720		36,204
Long-term investments	8	6,396		8,198
Other assets	12	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	18	381,155		4,886
Deferred revenue		22,591		15,356
Accrued employee costs		112,908		146,775
Accrued expenses and other current liabilities	13	161,525		135,498
Current portion of operating lease liabilities	21	18,734		16,857

Total current liabilities		703,646		324,125
Long-term borrowings, less current portion	18	—		293,712
Operating lease liabilities, less current portion	21	88,130		88,167
Deferred tax liabilities, net	22	2,256		2,125
Other non-current liabilities	14	87,613		81,401
Total liabilities		881,645		789,530
Commitments and contingencies	25
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	19	210		209
Additional paid-in capital		724,432		677,562
Retained earnings		1,664,571		1,532,979
Accumulated other comprehensive loss	15	(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	19	(1,299,289)		(1,117,318)
Total stockholders’ equity		866,242		912,705
Total liabilities and stockholders’ equity		$	1,747,887	$	1,702,235

See accompanying notes to unaudited consolidated financial statements.

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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,
	Notes	2026		2025		2026		2025
Revenues, net	3, 4	$	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	9, 10	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	18	(5,068)		(4,282)		(9,019)		(8,426)
Other income, net	6	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	22	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:	5
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:	5
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.

See accompanying notes to unaudited consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)


		Three months ended June 30,				Six months ended June 30,
	Notes	2026		2025		2026		2025
Net income		$	64,511	$	66,051	$	131,592	$	132,612
Other comprehensive income/(loss):
Unrealized gain/(loss) on cash flow hedges	17	8,888		5,955		(37,047)		15,424
Retirement benefits	20	—		—		(1,177)		—
Currency translation adjustments		713		4,006		(23,091)		7,933
Reclassification adjustments:
(Gain)/loss on cash flow hedges(1)	17	7,807		(554)		12,729		1,044
Retirement benefits(2)	20	405		(117)		743		(228)
Income tax effects relating to above(3)	22	(4,121)		(937)		4,888		(3,885)
Total other comprehensive income/(loss)		13,692		8,353		(42,955)		20,288
Total comprehensive income		$	78,203	$	74,404	$	88,637	$	152,900

(1)These are reclassified to net income and are included in revenues, net, cost of revenues and operating expenses, as applicable in the unaudited consolidated statements of income.

(2)These are reclassified to net income and are included in other income, net in the unaudited consolidated statements of income.

(3)These are income tax effects recognized on cash flow hedges, retirement benefits and currency translation adjustments.

See accompanying notes to unaudited consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

For the three months ended June 30, 2026 and 2025

(In thousands, except share count)


		Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(loss)		Treasury Stock			Total

	Notes	Shares	Amount								Shares	Amount
Balance as of March 31, 2026		209,929,764	$	210	$	674,662	$	1,600,060	$	(237,374)	(56,930,339)	$	(1,258,754)	$	778,804
Stock issued against stock-based compensation plans	23	172,121	—		3,412		—		—		—	—		3,412
Stock-based compensation	23	—	—		24,631		—		—		—	—		24,631
Acquisition of treasury stock	19	—	—		—		—		—		(626,514)	(18,451)		(18,451)
Accelerated share repurchases	5, 19	—	—		21,727		—		—		(799,960)	(21,727)		—
Excise tax on repurchase of common stock, net of stock issuances	19	—	—		—		—		—		—	(357)		(357)

Other comprehensive income	15	—	—		—		—		13,692		—	—		13,692
Net income		—	—		—		64,511		—		—	—		64,511
Balance as of June 30, 2026		210,101,885	$	210	$	724,432	$	1,664,571	$	(223,682)	(58,356,813)	$	(1,299,289)	$	866,242


		Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(loss)		Treasury Stock			Total

	Notes	Shares	Amount								Shares	Amount
Balance as of March 31, 2025		207,758,497	$	207	$	609,592	$	1,348,521	$	(142,787)	(45,075,154)	$	(803,656)	$	1,011,877
Stock issued against stock-based compensation plans	23	52,138	—		—		—		—		—	—		—
Stock-based compensation	23	—	—		16,392		—		—		—	—		16,392
Acquisition of treasury stock	19	—	—		—		—		—		(906,150)	(41,752)		(41,752)
Excise tax on repurchase of common stock, net of stock issuances	19	—	—		—		—		—		—	29		29

Other comprehensive income	15	—	—		—		—		8,353		—	—		8,353
Net income		—	—		—		66,051		—		—	—		66,051
Balance as of June 30, 2025		207,810,635	$	207	$	625,984	$	1,414,572	$	(134,434)	(45,981,304)	$	(845,379)	$	1,060,950

See accompanying notes to unaudited consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

For the six months ended June 30, 2026 and 2025

(In thousands, except share count)


		Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(loss)		Treasury Stock			Total

	Notes	Shares	Amount								Shares	Amount
Balance as of December 31, 2025		208,855,566	$	209	$	677,562	$	1,532,979	$	(180,727)	(52,425,538)	$	(1,117,318)	$	912,705
Stock issued against stock-based compensation plans	23	1,246,319	1		3,411		—		—		—	—		3,412
Stock-based compensation	23	—	—		46,732		—		—		—	—		46,732
Acquisition of treasury stock	19	—	—		—		—		—		(1,784,595)	(59,101)		(59,101)
Accelerated share repurchases	5, 19	—	—		(3,273)		—		—		(4,146,680)	(121,727)		(125,000)
Excise tax on repurchase of common stock, net of stock issuances	19	—	—		—		—		—		—	(1,143)		(1,143)


Other comprehensive loss	15	—	—		—		—		(42,955)		—	—		(42,955)
Net income		—	—		—		131,592		—		—	—		131,592
Balance as of June 30, 2026		210,101,885	$	210	$	724,432	$	1,664,571	$	(223,682)	(58,356,813)	$	(1,299,289)	$	866,242


		Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(loss)		Treasury Stock			Total

	Notes	Shares	Amount								Shares	Amount
Balance as of December 31, 2024		206,510,587	$	206	$	588,583	$	1,281,960	$	(154,722)	(44,709,375)	$	(786,165)	$	929,862
Stock issued against stock-based compensation plans	23	1,300,048	1		1,822		—		—		—	—		1,823
Stock-based compensation	23	—	—		35,579		—		—		—	—		35,579
Acquisition of treasury stock	19	—	—		—		—		—		(1,271,929)	(59,243)		(59,243)
Excise tax on repurchase of common stock, net of stock issuances	19	—	—		—		—		—		—	29		29

Other comprehensive income	15	—	—		—		—		20,288		—	—		20,288
Net income		—	—		—		132,612		—		—	—		132,612
Balance as of June 30, 2025		207,810,635	$	207	$	625,984	$	1,414,572	$	(134,434)	(45,981,304)	$	(845,379)	$	1,060,950

See accompanying notes to unaudited consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	Six months ended June 30,
	2026		2025
Cash flows from operating activities:
Net income	$	131,592	$	132,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	28,473		27,689
Stock-based compensation expense	46,732		35,579
Reduction in the carrying amount of operating lease right-of-use assets	14,018		12,489
Fair value mark-to-market on investments	(3,054)		(1,304)
Unrealized foreign currency exchange (gain)/loss, net	(11,412)		(3,314)
Deferred income tax benefit	(4,930)		(15,605)






Others, net	4,315		1,581
Change in operating assets and liabilities:
Accounts receivable	(93,298)		(38,312)
Other current and non-current assets	(27,781)		(10,434)
Income taxes payable, net	31,392		4,202


Deferred revenue	7,303		2,426
Accrued employee costs	(29,637)		(31,278)
Accounts payable, accrued expenses and other liabilities	7,940		8,539
Operating lease liabilities	(12,042)		(12,250)

Net cash provided by operating activities	89,611		112,620

Cash flows from investing activities:
Purchases of property and equipment	(27,440)		(27,366)
Proceeds from sale of property and equipment	166		180



Purchases of investments	(137,311)		(144,935)
Proceeds from redemption of investments	158,999		136,434
Investment in equity affiliate	(600)		(600)
Net cash used for investing activities	(6,186)		(36,287)

Cash flows from financing activities:
Principal payments of finance lease liabilities	(277)		(247)
Proceeds from borrowings	175,000		50,000
Repayments of borrowings	(92,500)		(78,500)

Acquisition of treasury stock	(186,605)		(59,673)

Proceeds from issuance of common stock	3,620		3,868

Net cash used for financing activities	(100,762)		(84,552)
Effect of exchange rate changes	(1,860)		7,346
Net decrease in cash, cash equivalents and restricted cash	(19,197)		(873)
Cash, cash equivalents and restricted cash at the beginning of the period	165,969		171,398
Cash, cash equivalents and restricted cash at the end of the period	$	146,772	$	170,525

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	8,934	$	8,216

Supplemental disclosure of non-cash investing and financing activities:
Additions to property and equipment not yet paid	$	3,294	$	6,186
Assets acquired under finance lease	$	383	$	633

See accompanying notes to unaudited consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2026

(In thousands, except per share amount and share count)

1. Organization

ExlService Holdings, Inc. (“ExlService Holdings”) is organized as a corporation under the laws of the State of Delaware. ExlService Holdings, together with its subsidiaries and affiliates (collectively, the “Company”), 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. 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’s clients are located principally in the United States of America (“U.S.”) and the United Kingdom (“U.K”).

2. Summary of Significant Accounting Policies

(a)Basis of Preparation and Principles of Consolidation

The unaudited consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

The unaudited consolidated financial statements reflect all adjustments (of a normal and recurring nature) that management considers necessary for a fair presentation of such statements for the interim periods presented. The unaudited consolidated statements of income for the interim periods presented are not necessarily indicative of the results for the full year or for any subsequent period.

The accompanying unaudited consolidated financial statements include the financial statements of ExlService Holdings and all of its subsidiaries. The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. All intercompany balances and transactions are eliminated in consolidation. The Company’s investments in equity affiliates are recorded using equity method of accounting.

(b)Use of Estimates

The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the carrying amounts of assets and liabilities and disclosure of contingent assets and liabilities included in the unaudited consolidated financial statements. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates that affect the unaudited consolidated financial statements include, but are not limited to, estimates of the contingent consideration, credit risk of customers, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, variable consideration in a customer contract, expected recoverability from customers with contingent fee arrangements, estimated costs to complete fixed price contracts, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments and stock-based awards, and useful life of long-lived assets and other intangible assets. The significant assumptions underneath these estimates include, but are not limited to assumptions to calculate stock-based compensation expense, determine pattern of generation of economic benefits to calculate depreciation and amortization for long-lived assets and other intangible assets, and recoverability of long-lived assets, goodwill and other intangible assets.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

(c)Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement - Reporting Comprehensive Income (“ASC Topic 220”): Expense Disaggregation Disclosures. This ASU improves disclosures relating to the disaggregation of income statement expenses, requires additional disclosures about the nature of expenses in commonly presented financial statement captions on an annual and interim basis for all public business entities. The ASU will be effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). This ASU enhances the guidance for internal-use software development costs by removing references to project stages and simplifying the criteria for when capitalization of software development costs shall begin. The ASU will be effective for annual reporting periods beginning after December 15, 2027, including interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (“ASC Topic 832”): Accounting for Government Grants Received by Business Entities. This ASU provides authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants for business entities, creating a framework that previously did not exist under U.S. GAAP. The ASU will be effective for annual reporting periods beginning after December 15, 2028, including interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (“ASC Topic 270”): Narrow-Scope Improvements. This ASU provides a comprehensive list of interim disclosures that are required by U.S. GAAP and incorporates disclosure principle of material events or changes occurred since the prior year-end. The ASU will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

(d)Recently Adopted and Applicable Accounting Pronouncements

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (“ASC Topic 326”): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606. The ASU is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those years, with early adoption permitted. The Company has adopted this ASU beginning January 1, 2026. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and disclosures.

3. Segment Information

The Company is a provider of data and AI-led solutions and services and digital operations solutions and services in an integrated manner for clients across industry verticals.

The Company’s operating model is comprised of Industry Market Units (“IMUs”) to focus on delivering higher value to clients leveraging full suite of capabilities and Strategic Growth Units to focus on rapidly advancing the capabilities specific to various industries and client needs. The Company manages and reports financial information through its four reportable segments that are aligned to its IMUs: Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, and International Growth Markets, which reflects the manner in which the Company’s Chief Operating Decision Maker (“CODM”) reviews financial information and makes operating decisions.

The Company’s Chief Executive Officer has been identified as the CODM. The CODM generally reviews and uses financial information such as revenues, cost of revenues, and gross profit predominantly in the annual budgeting and forecasting process to allocate an overall budget, measure segment performance, and evaluate pricing strategy. The CODM considers budget-to-actuals variances on a quarterly basis for making decisions about the allocation of operating and capital resources to each segment.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Revenues, net and cost of revenues for the three months ended June 30, 2026 and 2025, respectively, for each of the reportable segments, are as follows:


	Three months ended June 30, 2026
	Insurance		Healthcare and Life Sciences		Banking, Capital Markets and Diversified Industries		International Growth Markets		Total

Revenues, net	$	197,783	$	157,968	$	133,856	$	105,156	$	594,763
Cost of revenues(1)
Employee costs	105,992		66,942		73,415		54,530		300,879
Infrastructure and technology costs	15,532		8,665		8,550		10,939		43,686
Other costs(2)	7,865		8,316		5,284		2,770		24,235
Gross profit(1)	$	68,394	$	74,045	$	46,607	$	36,917	$	225,963
Operating expenses									138,668
Income from operations									87,295
Foreign exchange gain, net, interest expense and other income, net									(3,329)
Income before income tax expense and earnings from equity affiliates									$	83,966

(1) Exclusive of depreciation and amortization expense.

(2) Other costs primarily include travel and entertainment costs and other direct pass-through expenses related to client contracts for the Company’s direct marketing business.


	Three months ended June 30, 2025
	Insurance		Healthcare and Life Sciences		Banking, Capital Markets and Diversified Industries		International Growth Markets		Total
Revenues, net	$	172,174	$	129,489	$	121,089	$	91,708	$	514,460
Cost of revenues(1)
Employee costs	95,370		60,972		66,158		49,637		272,137
Infrastructure and technology costs	13,380		7,067		6,367		8,294		35,108
Other costs(2)	3,558		5,066		2,845		1,558		13,027
Gross profit(1)	$	59,866	$	56,384	$	45,719	$	32,219	$	194,188
Operating expenses									113,050
Income from operations									81,138
Foreign exchange gain, net, interest expense and other income, net									3,600
Income before income tax expense and earnings from equity affiliates									$	84,738

(1) Exclusive of depreciation and amortization expense.

(2) Other costs primarily include travel and entertainment costs and other direct pass-through expenses related to client contracts for the Company’s direct marketing business.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Revenues and cost of revenues for the six months ended June 30, 2026 and 2025, respectively, for each of the reportable segments, are as follows:


	Six months ended June 30, 2026
	Insurance		Healthcare and Life Sciences		Banking, Capital Markets and Diversified Industries		International Growth Markets		Total
Revenues, net	$	391,713	$	309,888	$	261,249	$	202,264	$	1,165,114
Cost of revenues(1)
Employee costs	205,921		133,828		142,632		106,299		588,680
Infrastructure and technology costs	30,547		17,090		16,065		21,222		84,924
Other costs(2)	13,723		16,113		8,946		4,684		43,466
Gross profit(1)	$	141,522	$	142,857	$	93,606	$	70,059	$	448,044
Operating expenses									268,923
Income from operations									179,121
Foreign exchange gain, net, interest expense and other income, net									(3,754)
Income before income tax expense and earnings from equity affiliates									$	175,367

(1) Exclusive of depreciation and amortization expense.

(2) Other costs primarily include travel and entertainment costs and other direct pass-through expenses related to client contracts for the Company’s direct marketing business.


	Six months ended June 30, 2025
	Insurance		Healthcare and Life Sciences		Banking, Capital Markets and Diversified Industries		International Growth Markets		Total
Revenues, net	$	344,230	$	255,081	$	238,791	$	177,377	$	1,015,479
Cost of revenues(1)
Employee costs	185,919		119,896		130,452		94,457		530,724
Infrastructure and technology costs	26,626		13,805		12,536		16,455		69,422
Other costs(2)	8,930		9,916		6,131		2,854		27,831
Gross profit(1)	$	122,755	$	111,464	$	89,672	$	63,611	$	387,502
Operating expenses									227,949
Income from operations									159,553
Foreign exchange gain, net, interest expense and other income, net									5,351
Income before income tax expense and earnings from equity affiliates									$	164,904

(1) Exclusive of depreciation and amortization expense.

(2) Other costs primarily include travel and entertainment costs and other direct pass-through expenses related to client contracts for the Company’s direct marketing business.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Revenues, net by service type, were as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Data and AI-led(1)	$	362,558	$	278,770	$	704,180	$	546,699
Digital operations(2)	232,205		235,690		460,934		468,780
Revenues, net	$	594,763	$	514,460	$	1,165,114	$	1,015,479

(1) Data and AI-led revenue is derived from the Company’s 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.

(2) Digital operations revenue is derived from managed services that blend Company’s 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.

All four reportable segments of the Company include revenues from both data and AI-led solutions and services and digital operations solutions and services.

The Company attributes revenues based on geographical markets where the customer operations being served by it are located.


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Revenues, net
North America	$	489,593	$	422,822	$	962,736	$	838,171

United Kingdom & Europe	89,403		77,635		171,921		150,019
Rest of World	15,767		14,003		30,457		27,289

Revenues, net	$	594,763	$	514,460	$	1,165,114	$	1,015,479

Revenues, net by industry verticals, were as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Insurance	$	233,701	$	203,222	$	459,761	$	403,583
Healthcare and Life Sciences	158,257		129,737		310,372		255,563
Banking, Capital Markets and Diversified Industries	202,805		181,501		394,981		356,333
Revenues, net	$	594,763	$	514,460	$	1,165,114	$	1,015,479

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Long-lived assets by geographic area, which consist of property and equipment, net and operating lease ROU assets were as follows:


	As of
	June 30, 2026		December 31, 2025
Long-lived assets
India	$	69,188	$	63,999
North America	55,884		60,575
The Philippines	34,977		36,480
South Africa	18,456		19,635
Rest of World	33,577		28,543
Long-lived assets	$	212,082	$	209,232

4. Revenues, net and Accounts Receivable, net

Refer to Note 3 - Segment Information to the unaudited consolidated financial statements for revenues disaggregated by reportable segments, service type, geography and industry verticals.

Contract balances

The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:


	As of
	June 30, 2026		December 31, 2025

Accounts receivable, net	$	434,362	$	343,105
Contract assets	$	43,281	$	31,901
Contract liabilities:
Deferred revenue (consideration received in advance)	$	14,327	$	9,216
Consideration received for process transition activities	$	33,761	$	32,247

Accounts receivable includes $192,342 and $141,653 as of June 30, 2026 and December 31, 2025, respectively, representing unbilled receivables. The Company has accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers and considers no performance risk associated with its unbilled receivables. Contract assets as of June 30, 2026 and December 31, 2025, include receivables of $36,941 and $24,849, respectively, from payment integrity services. There are no performance risks associated with these contract assets.

There were no significant cumulative catch-up impact or impairment related to contract assets as of June 30, 2026 and December 31, 2025.

Revenue recognized during the three and six months ended June 30, 2026 and 2025, which was included in the contract liabilities balance at the beginning of the respective periods:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Deferred revenue (consideration received in advance)	$	1,883	$	3,877	$	6,498	$	11,306
Consideration received for process transition activities	$	1,932	$	1,279	$	3,924	$	2,656

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Contract acquisition and fulfillment costs

The following table provides details of the Company’s contract acquisition and fulfillment costs:


	Contract Acquisition Costs
	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Opening balance	$	1,766	$	2,126	$	1,947	$	2,287
Additions	—		284		—		365
Amortization	(160)		(218)		(341)		(460)
Closing balance	$	1,606	$	2,192	$	1,606	$	2,192


	Contract Fulfillment Costs
	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Opening balance	$	38,387	$	38,080	$	39,223	$	36,022
Additions	2,210		2,156		3,174		5,485
Amortization	(1,976)		(1,298)		(3,776)		(2,569)
Closing balance	$	38,621	$	38,938	$	38,621	$	38,938

There was no significant impairment for contract acquisition and contract fulfillment costs as of June 30, 2026 and December 31, 2025.

Allowance for expected credit losses

The following table provides information about accounts receivable, net of allowance for expected credit losses:


	As of
	June 30, 2026		December 31, 2025
Accounts receivable, including unbilled receivables	$	437,643	$	345,980
Less: Allowance for expected credit losses	(3,281)		(2,875)
Accounts receivable, net	$	434,362	$	343,105

The movement in “Allowance for expected credit losses” was as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Opening balance	$	3,065	$	4,734	$	2,875	$	3,528
Additions	266		29		516		1,248
Reductions due to write-off of accounts receivable	(50)		(34)		(111)		(47)
Currency translation adjustments	—		(2)		1		(2)
Closing balance	$	3,281	$	4,727	$	3,281	$	4,727

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Customer and credit risk concentration

No single customer accounted for more than 10% of the Company's revenues, net during the three and six months ended June 30, 2026 and 2025. The Company’s management believes that the loss of any of its top ten clients could have a material adverse effect on its financial performance.

To reduce credit risk, the Company conducts ongoing credit evaluations of its customers. No customer accounted for more than 10% of accounts receivable, net, as of June 30, 2026 and December 31, 2025.

5. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Numerator:
Net income	$	64,511	$	66,051	$	131,592	$	132,612
Denominator:
Basic weighted average common shares outstanding	152,554,401		162,925,484		154,292,120		162,709,034
Dilutive effect of stock-based awards	277,593		1,267,774		566,324		1,667,464

Diluted weighted average common shares outstanding	152,831,994		164,193,258		154,858,444		164,376,498
Earnings per share:
Basic	$	0.42	$	0.41	$	0.85	$	0.82
Diluted	$	0.42	$	0.40	$	0.85	$	0.81
Weighted average potentially dilutive shares considered anti-dilutive and not included in computing diluted earnings per share	2,440,204		728,203		2,028,225		523,472

On March 16, 2026, the Company entered into a fixed dollar accelerated share repurchase transaction pursuant to a confirmation (“2026 ASR Agreement”) with Morgan Stanley & Co. LLC (“Morgan Stanley”). During the six months ended June 30, 2026, the Company recorded the initial delivery and final settlement of shares in treasury stock, which resulted in an immediate reduction of its outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Refer to Note 19 - Capital Structure to the unaudited consolidated financial statements for further details.

6. Other Income, net

Other income, net consists of the following:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Interest and dividend income	$	2,437	$	2,682	$	3,990	$	5,307
Gain on sale and fair value mark-to-market on investments	1,550		2,259		3,040		4,207
Fair value changes of contingent consideration (1)	(3,000)		—		(3,000)		—
Others, net	(857)		730		(1,509)		860
Other income, net	$	130	$	5,671	$	2,521	$	10,374

(1) Refer to Note 16 - Fair Value Measurements to the unaudited consolidated financial statements for further details.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

7. Cash, Cash Equivalents and Restricted Cash

For the purposes of unaudited consolidated statements of cash flows, cash, cash equivalents and restricted cash consist of the following:


	As of
	June 30, 2026		June 30, 2025		December 31, 2025
Cash and cash equivalents	$	126,722	$	149,134	$	146,326
Restricted cash (current)(1)	12,964		11,503		12,392
Restricted cash (non-current)(2)	7,086		9,888		7,251
Cash, cash equivalents and restricted cash	$	146,772	$	170,525	$	165,969

(1) Restricted cash (current) primarily represents funds held on behalf of customers in dedicated bank accounts. The corresponding liability against the same is included under “Accrued expenses and other current liabilities.” Restricted cash also includes funds held as collateral in a dedicated bank account for irrevocable letters of credit issued in favor of third parties for facility leases.

(2) Restricted cash (non-current) represents deposits with banks against bank guarantees issued through banks in favor of relevant statutory authorities for equipment imports, deposits for obtaining indirect tax registrations and for demands against pending income tax and value added tax (“VAT”) assessments. Due to the associated restrictions, these deposits with banks are anticipated to mature one year after the balance sheet date.

8. Investments

Investments consist of the following:


	As of
	June 30, 2026		December 31, 2025
Short-term investments
Mutual funds(1)	$	98,499	$	129,549
Term deposits	58,603		52,492
Short-term investments	$	157,102	$	182,041

Long-term investments
Term deposits	$	255	$	2,626

Investment in equity affiliate	6,141		5,572
Long-term investments	$	6,396	$	8,198

(1) Refer to Note 16 - Fair Value Measurements to the unaudited consolidated financial statements for further details.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

9. Property and Equipment, net

Property and equipment consist of the following:


	As of
	June 30, 2026		December 31, 2025
Property and equipment, gross	$	383,761	$	367,558
Less: Accumulated depreciation and amortization	(269,174)		(255,737)
Property and equipment, net	$	114,587	$	111,821

During the three and six months ended June 30, 2026, there were no material changes in estimated useful lives of property and equipment during the ordinary course of operations.

The depreciation and amortization expense, excluding amortization of acquisition-related intangibles, recognized in the unaudited consolidated statements of income was as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Depreciation and amortization expense	$	11,346	$	10,778	$	22,123	$	21,089

Internally developed software costs included in property and equipment were as follows:


	As of
	June 30, 2026		December 31, 2025
Cost	$	66,051	$	59,391
Less: Accumulated amortization	(44,383)		(39,332)
Internally developed software, net	$	21,668	$	20,059

The amortization expense on internally developed software recognized in the unaudited consolidated statements of income was as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Amortization expense	$	2,628	$	2,743	$	5,051	$	5,483

During the three and six months ended June 30, 2026 and 2025, there were no indicators of impairment related to capitalized software.

10. Business Combinations, Goodwill and Other Intangible Assets

I Merit Inc.

On June 22, 2026, the Company, through its wholly owned subsidiary Clairvoyant AI, Inc. entered into a securities purchase agreement (the “Purchase Agreement”), which is expected to close on July 31, 2026, to acquire 100% of the equity securities of I Merit Inc., a Delaware Corporation (“iMerit”), in exchange for upfront cash consideration of $170,000, subject to certain post-closing adjustments, and up to an additional $140,000 in cash incentives and earnouts over two years contingent on meeting specified milestones, as set forth in the Purchase Agreement.

iMerit is a recognized leader in AI model training, evaluation and reinforcement learning. It is focused on helping its clients train large language and multimodal models to improve accuracy, precision, and effectiveness. The acquisition strengthens

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Company's ability to help enterprises achieve measurable outcomes from AI, builds partnerships with leading foundation model builders and expands its reach into high-growth AI tech sectors.

Goodwill

The following table sets forth details of changes in goodwill by reportable segment of the Company:


	Insurance		Healthcare and Life Sciences		Banking, Capital Markets and Diversified Industries		International Growth Markets		Total



Balance as of December 31, 2025	$	77,269	$	189,594	$	100,153	$	52,638	$	419,654


Currency translation adjustments	(42)		(28)		(494)		(397)		(961)
Balance as of June 30, 2026	$	77,227	$	189,566	$	99,659	$	52,241	$	418,693

During the three and six months ended June 30, 2026 and 2025, the Company performed an assessment to determine whether events or circumstances exist that may lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on such assessment, the Company concluded that there was no impairment on goodwill as of the three and six months ended June 30, 2026 and 2025.

Other Intangible Assets

Information regarding the Company’s intangible assets is set forth below:


	As of June 30, 2026						As of December 31, 2025
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$	108,550	$	(79,839)	$	28,711	$	108,550	$	(73,482)	$	35,068
Developed technology	3,609		(3,609)		—		3,636		(3,558)		78
Trade names and trademarks	1,700		(1,591)		109		1,700		(1,542)		158
Non-compete agreements	300		(300)		—		300		(300)		—
	114,159		(85,339)		28,820		114,186		(78,882)		35,304
Indefinite-lived intangible assets:
Trade names and trademarks	900		—		900		900		—		900
Other intangible assets	$	115,059	$	(85,339)	$	29,720	$	115,086	$	(78,882)	$	36,204

The amortization expense recognized in the unaudited consolidated statements of income was as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Amortization expense	$	3,258	$	3,277	$	6,484	$	6,523

During the three and six months ended June 30, 2026 and 2025, there were no indicators of impairment related to intangible assets.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Estimated future amortization expense related to finite-lived intangible assets as of June 30, 2026 was as follows:


2026 (July 1 - December 31)	$	6,292
2027	11,844
2028	9,228
2029	1,456

Total	$	28,820

11. Other Current Assets

Other current assets consist of the following:


	As of
	June 30, 2026		December 31, 2025
Contract assets	$	39,458	$	27,083
Prepaid expenses	38,488		26,465
Advance income tax, net	24,378		51,984
Receivables from statutory authorities	22,476		21,374

Deferred contract fulfillment costs	8,125		7,077

Derivative instruments	3,433		4,640
Others	7,774		7,470
Other current assets	$	144,132	$	146,093

12. Other Assets

Other assets consist of the following:


	As of
	June 30, 2026		December 31, 2025
Deferred contract fulfillment costs	$	30,496	$	32,146
Prepaid expenses	7,809		6,761
Deposits with statutory authorities	7,494		7,859
Lease deposits	7,314		7,087
Contract assets	3,823		4,818
Derivative instruments	1,050		1,424
Others	1,354		1,676
Other assets	$	59,340	$	61,771

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

13. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:


	As of
	June 30, 2026		December 31, 2025
Accrued expenses	$	70,620	$	64,220
Derivative instruments	32,156		15,443
Payable to statutory authorities	24,423		27,222

Client liabilities	13,180		12,601


Contingent consideration	8,000		5,000
Others	13,146		11,012
Accrued expenses and other current liabilities	$	161,525	$	135,498

14. Other Non-Current Liabilities

Other non-current liabilities consist of the following:


	As of
	June 30, 2026		December 31, 2025
Retirement benefits	$	41,507	$	41,632
Deferred transition revenue	25,726		26,139

Derivative instruments	16,344		9,765
Unrecognized tax benefits	2,429		2,176


Others	1,607		1,689
Other non-current liabilities	$	87,613	$	81,401

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

15. Accumulated Other Comprehensive Income/(Loss)

The following table sets forth the changes in Accumulated other comprehensive income/(loss) (“AOCI”) during the six months ended June 30, 2026 and 2025:


	Accumulated Other Comprehensive Income/(Loss)
	Currency translation adjustments		Unrealized gain/(loss) on cash flow hedges		Retirement benefits		Total
Balance as of December 31, 2025	$	(156,548)	$	(15,490)	$	(8,689)	$	(180,727)
Loss recognized during the period	(23,091)		(37,047)		(1,177)		(61,315)

Reclassification to net income(1)	—		12,729		743		13,472
Income tax effects(2)	—		4,873		15		4,888
Balance as of June 30, 2026	$	(179,639)	$	(34,935)	$	(9,108)	$	(223,682)

Balance as of December 31, 2024	$	(146,998)	$	(7,548)	$	(176)	$	(154,722)
Gain recognized during the period	7,933		15,424		—		23,357

Reclassification to net income(1)	—		1,044		(228)		816
Income tax effects(2)	(1,012)		(2,847)		(26)		(3,885)
Balance as of June 30, 2025	$	(140,077)	$	6,073	$	(430)	$	(134,434)

(1) Refer to Note 17 - Derivatives and Hedge Accounting and Note 20 - Employee Benefit Plans to the unaudited consolidated financial statements for reclassification to net income.

(2) These are income tax effects recognized on currency translation adjustments, cash flow hedges and retirement benefits. Refer to Note 22 - Income Taxes to the unaudited consolidated financial statements.

16. Fair Value Measurements

Assets and Liabilities Measured at Fair Value

The following table sets forth the Company’s assets and liabilities that were recognized at fair value:


	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
As of June 30, 2026	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash equivalents - Money market funds(1)	$	36,788	$	—	$	—	$	36,788
Mutual funds(1)	98,499		—		—		98,499
Derivative financial instruments	—		4,483		—		4,483
Total	$	135,287	$	4,483	$	—	$	139,770
Liabilities
Derivative financial instruments	$	—	$	48,500	$	—	$	48,500
Contingent consideration(2)	—		—		8,000		8,000
Total	$	—	$	48,500	$	8,000	$	56,500

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)



	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
As of December 31, 2025	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash equivalents - Money market funds(1)	$	50,971	$	—	$	—	$	50,971
Mutual funds(1)	129,549		—		—		129,549
Derivative financial instruments	—		6,064		—		6,064
Total	$	180,520	$	6,064	$	—	$	186,584
Liabilities
Derivative financial instruments	$	—	$	25,208	$	—	$	25,208
Contingent consideration(2)	—		—		5,000		5,000
Total	$	—	$	25,208	$	5,000	$	30,208

(1) Represents money market funds and short-term investments which are carried at the fair value option under ASC Topic 825 “Financial Instruments”.

(2) Contingent consideration is presented under “Accrued expenses and other current liabilities” in the consolidated balance sheets.

Fair Value of Derivative Financial Instruments:

Fair values for derivative financial instruments are based on independent sources including highly rated financial institutions and are classified as Level 2. Refer to Note 17 - Derivatives and Hedge Accounting to the unaudited consolidated financial statements for further details.

Fair Value of Contingent Consideration:

The fair value measurement of contingent consideration is determined using Level 3 inputs. The Company’s contingent consideration represents a component of the total purchase consideration for business acquisitions. The measurement is calculated using unobservable inputs based on the Company’s own assessment of achievement of certain performance goals. The Company estimated the fair value of the contingent consideration based on the Monte Carlo simulation model.

The following table summarizes the changes in the fair value of contingent consideration:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Opening balance	$	5,000	$	2,700	$	5,000	$	2,700

Fair value changes	3,000		—		3,000		—
Payments	—		—		—		—
Closing balance	$	8,000	$	2,700	$	8,000	$	2,700

During the three and six months ended June 30, 2026 and 2025, there were no transfers among Level 1, Level 2 and Level 3.

Financial Instruments Not Carried at Fair Value:

The Company’s other financial instruments not carried at fair value consist primarily of cash and cash equivalents (except investments in money market funds, as disclosed above), short-term investments (except investments in mutual funds, as disclosed above), restricted cash, accounts receivable, net, long-term investments, accrued capital expenditures, accrued expenses, client liabilities and interest payable on borrowings for which fair values approximate their carrying amounts. The carrying value

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

of the Company’s outstanding revolving credit facility and term loan facility approximates its fair value because the Company’s interest rate yield is near current market rates for comparable debt instruments.

17. Derivatives and Hedge Accounting

The Company uses derivative instruments to mitigate cash flow volatility from risk of fluctuations in foreign currency exchange rates and interest rates. The Company enters into foreign currency forward contracts to hedge cash flow risks from forecasted revenues and other transactions denominated in certain foreign currencies. These contracts qualify as cash flow hedges under ASC Topic 815, Derivatives and Hedging, and are with counterparties that are highly rated financial institutions.

The following table sets forth the aggregate notional amount of derivatives in cash flow hedging relationship:


	As of
	June 30, 2026	December 31, 2025
Foreign currency forward contracts denominated in:
Sell U.S. dollar (USD)	992,400	1,134,800
Buy U.S. dollar (USD)	5,159	12,075

The Company estimates that approximately $28,304 of derivative loss, net, excluding tax effects, included in AOCI, representing changes in the value of cash flow hedges based on exchange rates prevailing as of June 30, 2026, could be reclassified into earnings within the next twelve months. As of June 30, 2026, the maximum outstanding term of the cash flow hedges was approximately 36 months.

The Company also enters into foreign currency forward contracts to hedge its intercompany balances and other monetary assets and liabilities denominated in currencies other than functional currencies, against the risk of fluctuations in foreign currency exchange rates associated with remeasurement of such assets and liabilities to functional currency. These foreign currency forward contracts do not qualify as fair value hedges under ASC Topic 815, Derivatives and Hedging. Changes in the fair value of these financial instruments are recognized in the unaudited consolidated statements of income and are included in the foreign exchange gain, net line item.

The following table sets forth the aggregate notional principal amounts of outstanding foreign currency forward contracts for derivatives not designated as hedging instruments:


	As of
Foreign currency forward contracts denominated in:	June 30, 2026	December 31, 2025
Sell USD	244,088	217,040
Sell GBP	27,880	35,962
Sell EUR	7,376	7,722
Sell AUD	4,619	4,917

Buy USD	3,176	1,837

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

The following table sets forth the fair value of the foreign currency forward contracts and their location on the consolidated balance sheets:


	Derivatives in cash flow hedging relationships				Derivatives not designated as hedging instruments
	As of				As of
	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
Assets:
Other current assets	$	3,419	$	4,444	$	14	$	196
Other assets	$	1,050	$	1,424	$	—	$	—
Liabilities:
Accrued expenses and other current liabilities	$	31,723	$	15,383	$	433	$	60
Other non-current liabilities	$	16,344	$	9,765	$	—	$	—

The following table sets forth the effect of foreign currency forward contracts on AOCI and the unaudited consolidated statements of income:


	Three months ended June 30,				Six months ended June 30,
Derivative financial instruments:	2026		2025		2026		2025
Unrealized gain/(loss) recognized in other comprehensive income (“OCI”)
Derivatives in cash flow hedging relationships	$	8,888	$	5,955	$	(37,047)	$	15,424

Gain/(loss) recognized in unaudited consolidated statements of income
Derivatives not designated as hedging instruments	$	1,747	$	(1,766)	$	(8,714)	$	(1,286)

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

The following table sets forth the location and amount of gain/(loss) recognized in unaudited consolidated statements of income for derivatives in cash flow hedging relationships and derivatives not designated as hedging instruments:


	Three months ended June 30,
	2026				2025
	As per unaudited consolidated statements of income		Gain/(loss) on derivative financial instruments		As per unaudited consolidated statements of income		Gain/(loss) on derivative financial instruments
Derivatives in cash flow hedging relationships
Location in unaudited consolidated statements of income where gain/(loss) was reclassified from AOCI
Revenues, net	$	594,763	$	319	$	514,460	$	(1,028)
Cost of revenues	$	368,800	(7,043)		$	320,272	1,360
General and administrative expenses	$	74,436	(841)		$	59,549	126
Selling and marketing expenses	$	49,628	(115)		$	39,446	7
Depreciation and amortization expense	$	14,604	(127)		$	14,055	89

Total before tax			(7,807)				554
Income tax effects on above			1,575				(165)
Net of tax			$	(6,232)			$	389

Derivatives not designated as hedging instruments
Location in unaudited consolidated statements of income where gain/(loss) was recognized

Foreign exchange gain, net	$	1,609	$	1,747	$	2,211	$	(1,766)

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)


	Six months ended June 30,
	2026				2025
	As per unaudited consolidated statements of income		Gain/(loss) on derivative financial instruments		As per unaudited consolidated statements of income		Gain/(loss) on derivative financial instruments
Derivatives in cash flow hedging relationships
Location in unaudited consolidated statements of income where gain/(loss) was reclassified from AOCI
Revenues, net	$	1,165,114	139		$	1,015,479	$	(1,028)
Cost of revenues	$	717,070	(11,178)		$	627,977	(53)
General and administrative expenses	$	143,487	(1,368)		$	118,966	(28)
Selling and marketing expenses	$	96,829	(187)		$	81,371	(9)
Depreciation and amortization expense	$	28,607	(135)		$	27,612	74

Total before tax			(12,729)				(1,044)
Income tax effects on above			2,667				217
Net of tax			$	(10,062)			$	(827)

Derivatives not designated as hedging instruments
Location in unaudited consolidated statements of income where gain/(loss) was recognized

Foreign exchange gain, net	$	2,744	$	(8,714)	$	3,403	$	(1,286)

18. Borrowings

The following table summarizes the Company’s debt position:


	As of
	June 30, 2026						December 31, 2025
	Revolving credit facility		Term loan facility		Total		Revolving credit facility		Term loan facility		Total
Current portion of long-term borrowings	$	290,000	$	91,250	$	381,250	$	—	$	5,000	$	5,000
Unamortized debt issuance costs	—		(95)		(95)		—		(114)		(114)
Current portion of long-term borrowings	290,000		91,155		381,155		—		4,886		4,886

Long-term borrowings	—		—		—		205,000		88,750		293,750
Unamortized debt issuance costs	—		—		—		—		(38)		(38)
Long-term borrowings	—		—		—		205,000		88,712		293,712
Borrowings	$	290,000	$	91,155	$	381,155	$	205,000	$	93,598	$	298,598

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Unamortized debt issuance costs for the Company’s revolving credit facility of $313 and $507 as of June 30, 2026 and December 31, 2025, respectively, are presented under “Other current assets” and “Other assets,” as applicable in the consolidated balance sheets.

Credit Agreement

The Company held a $300,000 revolving credit facility pursuant to its credit agreement (the “Credit Agreement”), dated as of November 21, 2017 with certain lenders and Citibank N.A. as Administrative Agent. This agreement was amended and restated in April 2022, followed by the First Amendment to Amended and Restated Credit Agreement in August 2024 (the “2024 Credit Agreement”). Among other things, the 2024 Credit Agreement increased revolving credit commitments to $500,000 and provided a new term loan facility of $100,000 with an annual repayment amount of 5%. The increased revolving credit facility and the new term loan facility both mature on April 18, 2027. The Company is in the process of refinancing its 2024 Credit Agreement, which is expected to be completed in the third quarter of 2026. The Company believes that it has access to adequate resources, which include cash and cash equivalents, short-term investments, cash provided by operating activities and unused amounts in its revolving credit facility to meet its needs for at least the next twelve months.

Under the 2024 Credit Agreement, obligations bear interest at a rate equal to specified prime rate (alternate base rate) or the adjusted secured overnight financing rate (SOFR) specified therein, plus, in each case, an applicable margin, and are guaranteed by the Company’s wholly-owned material domestic subsidiaries and secured by all or substantially all of the Company’s and its material domestic subsidiaries’ assets. The revolving credit commitments are subject to a commitment fee. The 2024 Credit Agreement includes a letter of credit sub facility and is voluntarily pre-payable from time to time without premium or penalty. Borrowings under the revolving credit facility can be used for working capital and general corporate purposes, including permitted acquisitions.

The effective interest rates of the revolving credit facility and the term loan facility are as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Revolving credit facility	5.0	%	5.8	%	5.0	%	5.8	%
Term loan facility	5.1	%	5.7	%	5.1	%	5.7	%

As of June 30, 2026 and December 31, 2025, the Company was in compliance with the financial covenants under the 2024 Credit Agreement.

The maturity profile of the Company’s long-term borrowings, excluding debt issuance costs, outstanding as of June 30, 2026 was as follows:


	Revolving credit facility		Term loan facility


2026 (July 1 - December 31)	$	—	$	2,500
2027	290,000		88,750

Total	$	290,000	$	91,250

Letters of Credit

In the ordinary course of business, the Company provides standby letters of credit to third parties primarily for facility leases. As of June 30, 2026 and December 31, 2025, the Company had outstanding letters of credit of $1,137 and $1,598, respectively, that were not recognized in the consolidated balance sheets.

19. Capital Structure

Common Stock

The Company has one class of common stock outstanding.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Share Repurchases

The Company purchased shares of its common stock from certain employees in connection with withholding tax payments related to the vesting of restricted stock units and performance-based restricted stock units, as below:


	Shares repurchased	Total consideration		Weighted average purchase price per share (1)
Three months ended June 30, 2026	—	$	—	$	—
Three months ended June 30, 2025	—	$	—	$	—

Six months ended June 30, 2026	129,695	$	4,847	$	37.37
Six months ended June 30, 2025	190,716	$	9,432	$	49.46

(1) The weighted average purchase price per share is based on the closing price of the Company’s common stock on the Nasdaq Global Select Market on the trading day prior to the applicable vesting date of the restricted stock units.

On February 26, 2024, the Company’s board of directors authorized a $500,000 (excluding excise tax) common stock repurchase program beginning March 1, 2024 (the “2024 Repurchase Program”), which was terminated effective February 28, 2026.

On February 19, 2026, the Company’s board of directors authorized a $500,000 (excluding excise tax) common stock repurchase program effective February 28, 2026 (the “2026 Repurchase Program”), which replaced the 2024 repurchase program.

On March 16, 2026, the Company entered into the 2026 ASR Agreement with Morgan Stanley to repurchase shares of its common stock for an aggregate purchase price of $125,000, as part of the Company’s 2026 Repurchase Program. Upon payment of the aggregate purchase price of $125,000, the Company received an initial delivery of 3,346,720 shares of its common stock at an initial price of $29.88 per share, representing 80% of the aggregate purchase price. The Company funded the repurchase with available cash on hand and borrowing from its revolving credit facility. The 2026 ASR Agreement was accounted for as a treasury stock transaction and forward stock purchase agreement indexed to the Company’s common stock. The forward stock purchase agreement was classified as an equity instrument under ASC Topic 815-40, Contracts in Entity's Own Equity, and deemed to have a fair value of zero at the effective date. The prepayment of $25,000 was initially recorded in additional paid-in capital, which reflected the pending settlement of the 2026 ASR Agreement. Under the terms of the 2026 ASR Agreement, the ultimate number of shares of common stock that the Company repurchased was based on the average of the daily volume-weighted average prices of the common stock during the term of the 2026 ASR Agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the 2026 ASR Agreement.

On May 13, 2026, upon final settlement of the 2026 ASR Agreement, the Company received 799,960 additional shares of its common stock based on a daily volume-weighted average price of $30.14 per share during the term of the 2026 ASR Agreement. The additional shares received were recorded as treasury stock at a fair market value of $27.16 per share.

Under the Company’s repurchase program, shares may be purchased by the Company from time to time from the open market and through private transactions, or otherwise, as determined by the Company’s management as market conditions warrant. Repurchases may be discontinued at any time by the management.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

The Company purchased shares of its common stock, for a total consideration including commissions but excluding excise tax, under its repurchase programs, as below:


	Shares repurchased	Total consideration		Weighted average purchase price per share
Three months ended June 30, 2026	1,426,474	$	43,451	$	30.46
Three months ended June 30, 2025	906,150	$	41,752	$	46.08

Six months ended June 30, 2026	5,801,580	$	179,254	$	30.90
Six months ended June 30, 2025	1,081,213	$	49,811	$	46.07

Repurchased shares have been recorded as treasury shares and will be held until the Company’s board of directors designates that these shares be retired or used for other purposes.

Pursuant to the Inflation Reduction Act, the Company is required to pay a 1% excise tax on the fair market value of each share of common stock repurchased, net of stock issuances. The Company recognized excise tax of $357 and $(29), during the three months ended June 30, 2026 and 2025, respectively, and $1,143 and $(29), during the six months ended June 30, 2026 and 2025, respectively.

20. Employee Benefit Plans

The Company maintains a Gratuity Plan in India (the “India Plan”) and a retirement benefit plan in the Philippines (the “Philippines Plan”). The India Plan is partially funded whereas the Philippines Plan is unfunded. The Company expects to earn a return of approximately 7.5% per annum on the India Plan for the year ending on December 31, 2026.


Change in Plan Assets
Plan assets as of December 31, 2025	$	24,358
Actual return	1,030
Employer contribution	2,852
Benefits paid	(1,329)
Currency translation adjustments	(1,230)
Plan assets as of June 30, 2026	$	25,681

During the year ended December 31, 2025, the implementation of the new Labor Codes in India resulted in the recognition of prior service cost in OCI. During March 2026, following the implementation of a revised salary structure, the Company performed an updated actuarial valuation and recognized additional prior service cost of $1,177 in OCI. The prior service cost recognized is being amortized over the estimated remaining service period of the defined benefit obligation.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Components of net periodic benefit costs recognized in unaudited consolidated statements of income and retirement benefits reclassified from AOCI, were as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Service cost	$	1,987	$	1,406	$	4,010	$	2,789
Interest cost	712		517		1,441		1,026
Expected return on plan assets	(404)		(351)		(817)		(696)
Reclassification of retirement benefits from AOCI:
Amortization of actuarial gain	(161)		(117)		(344)		(228)
Amortization of prior service cost	566		—		1,087		—


Net periodic benefit cost	$	2,700	$	1,455	$	5,377	$	2,891

Reclassification of retirement benefits from AOCI, gross of tax	$	405	$	(117)	$	743	$	(228)
Income tax effects	(150)		(13)		(281)		(26)
Reclassification of retirement benefits from AOCI, net of tax	$	255	$	(130)	$	462	$	(254)

The Company maintains several 401(k) plans (the “401(k) Plans”) under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), covering all eligible employees, as defined in the Code as a defined contribution plan. The Company may make discretionary contributions of up to a maximum of 3.0% of employee compensation within certain limits.

The Company’s contributions to various defined contribution plans were as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Contribution to the 401(k) Plans	$	1,504	$	1,376	$	4,522	$	4,171
Contributions to the defined contribution plans in foreign subsidiaries of the Company	$	9,153	$	8,692	$	18,060	$	16,477

21. Leases

The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates, with options to extend or terminate before expiration date. The Company finances its use of certain motor vehicles, leasehold improvements and other equipment under various lease arrangements provided by financial institutions. The lease agreements do not contain any covenants to impose any restrictions except for market-standard practice for similar lease arrangements.

The Company had performed an evaluation of its contracts with suppliers in accordance with ASC Topic 842, Leases, and had determined that, except for leases for office facilities, motor vehicles and other equipment as described above, none of the Company’s contracts contain a lease.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

The components of lease cost, which are included in the Company’s unaudited consolidated statements of income, are as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Finance lease:
Depreciation on underlying ROU assets	$	174	$	147	$	337	$	279
Interest on lease liabilities	54		77		134		146
	228		224		471		425
Operating lease(1)	7,225		6,528		14,265		12,707
Variable lease costs	1,274		1,214		2,359		2,287
Sublease income	—		(113)		—		(223)

Total lease cost	$	8,727	$	7,853	$	17,095	$	15,196

(1) Includes short-term leases, which are immaterial.

Supplemental cash flow and other information related to leases are as follows:


	Six months ended June 30,
	2026			2025
Cash payments for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	12,042		$	12,250
Operating cash outflows for finance leases	$	134		$	77
Financing cash outflows for finance leases	$	277		$	247
ROU assets obtained in exchange for new operating lease liabilities	$	12,202		$	12,332
ROU assets obtained in exchange for new finance lease liabilities	$	383		$	633
Weighted average remaining lease term (in years)
Finance lease	2.3 years			2.4 years
Operating lease	6.5 years			4.7 years
Weighted average discount rate
Finance lease	14.9		%	15.1		%
Operating lease	7.6		%	8.0		%

As part of the Company’s efforts to optimize its existing network of operations centers, the Company continued to evaluate its office facilities to determine where it can exit or consolidate its use of office space. The Company modified certain of its operating leases, resulting in an increase in lease liabilities by $2,623 and $3,107, during the six months ended June 30, 2026 and 2025, respectively, with a corresponding adjustment to ROU assets.

As of June 30, 2026 and December 31, 2025, the Company did not have any significant leases that have not yet commenced but that create significant rights and obligations for the Company.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Maturities of lease liabilities as of June 30, 2026 were as follows:


	Operating Leases		Finance Leases
2026 (July 1 - December 31)	$	13,112	$	946
2027	26,421		812
2028	23,919		580
2029	15,801		309
2030	11,440		82
2031 and thereafter	44,411		—
Total lease payments	135,104		2,729
Less: Imputed interest	28,240		582
Present value of lease liabilities	$	106,864	$	2,147

22. Income Taxes

The Company determines the tax provision for interim periods using an estimate of its annual effective tax rate. Each quarter, the Company updates its estimate of annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment.

The effective tax rate for the three months ended June 30, 2026 was 23.1%, an increase from 21.9% for the three months ended June 30, 2025. The Company recorded income tax expense of $19,426 and $18,546 for the three months ended June 30, 2026 and 2025, respectively. The increase in income tax expense for the three months ended June 30, 2026 was primarily a result of an increase in non-deductible expenses and lower excess tax benefits related to stock-based compensation, as compared to the three months ended June 30, 2025.

The effective tax rate for the six months ended June 30, 2026 was 24.9%, an increase from 19.5% for the six months ended June 30, 2025. The Company recorded income tax expense of $43,744 and $32,042 for the six months ended June 30, 2026 and 2025, respectively. The increase in income tax expense for the six months ended June 30, 2026 was primarily a result of higher profit and lower excess tax benefits related to stock-based compensation, partially offset by a decrease in non-deductible compensation expenses, as compared to the six months ended June 30, 2025.

Deferred income taxes recognized in OCI were as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Deferred taxes benefit / (expense) recognized on:
Unrealized gain/(loss) on cash flow hedges	$	(2,396)	$	(750)	$	7,540	$	(2,630)
Reclassification adjustment for cash flow hedges	(1,575)		165		(2,667)		(217)
Retirement benefits	—		—		296		—

Reclassification adjustment for retirement benefits	(150)		(13)		(281)		(26)

Currency translation adjustments	—		(339)		—		(1,012)
Total	$	(4,121)	$	(937)	$	4,888	$	(3,885)

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

23. Stock-Based Compensation

Stock-based compensation expense by function, as below, are included in the unaudited consolidated statements of income:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Cost of revenues	$	3,577	$	3,421	$	6,593	$	6,908
General and administrative expenses	10,708		6,617		20,031		13,803
Selling and marketing expenses	10,346		6,354		20,108		14,868
Total	$	24,631	$	16,392	$	46,732	$	35,579

Income tax benefit related to share-based compensation(1)	$	6,097	$	4,211	$	7,413	$	13,316

(1) Includes $(17) and $203 during the three months ended June 30, 2026 and 2025, respectively, and $1,263 and $14,728 during the six months ended June 30, 2026 and 2025, respectively, related to discrete benefits recognized in income tax expense in accordance with ASU No. 2016-09, Compensation - Stock Compensation.

As of June 30, 2026 and December 31, 2025, the Company had 3,301,245 and 5,919,466 shares, respectively, available for future grants under the 2025 Omnibus Incentive Plan (the “2025 Plan”).

Stock Options

Stock option activity under the Company’s stock-based compensation plans is shown below:


	Number of Options		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life (Years)
Outstanding as of December 31, 2025	1,734,720		$	30.14	$	21,344	7.5
Granted	—		—		—		—
Exercised	—		—		—		—
Forfeited	—		—		—		—
Outstanding as of June 30, 2026	1,734,720		$	30.14	$	—	7.0
Vested and exercisable as of June 30, 2026	1,264,700		$	30.14	$	—	7.0
Weighted average grant date fair value of per unit of stock option granted during the period	$	—

As of June 30, 2026, unrecognized compensation cost of $5,141 is expected to be expensed over a weighted average period of 1.0 years.

Share Matching Program

Under the Company’s 2018 Omnibus Incentive Plan (the “2018 Plan”), the Company established a share matching program (“SMP”) for executive officers and other specified employees. Under the SMP, the Company agreed to issue a number of restricted stock units equal to the number of newly acquired shares of the Company's common stock.

As of June 30, 2026 and December 31, 2025, restricted stock units vested for which the underlying common stock is yet to be issued are nil and 31,662, respectively.

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

Restricted Stock Units

Restricted stock unit activity under the Company’s stock-based compensation plans is shown below:


	Restricted Stock Units
	Number	Weighted Average Fair Value
Outstanding as of December 31, 2025(1)	2,789,601	$	37.65
Granted	1,653,889	30.83
Vested	(1,047,510)	34.64
Forfeited	(116,947)	36.36
Outstanding as of June 30, 2026(1)	3,279,033	$	35.22

(1) As of June 30, 2026 and December 31, 2025 restricted stock units vested for which the underlying common stock is yet to be issued are 328,139 and 348,636, respectively.

As of June 30, 2026, unrecognized compensation cost of $94,835 is expected to be expensed over a weighted average period of 2.8 years.

Performance-Based Stock Awards

Under the Company’s equity incentive plans, the Company grants performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees. The Company generally grants 40% of each award recipient’s equity grants in the form of PRSUs that cliff vest at the end of a three-year period based on an aggregated revenue target for a three-year period (“PU”). The remaining 60% of each award recipient’s equity grants are PRSUs that are based on market conditions, contingent on the Company’s meeting a total shareholder return relative to a group of peer companies specified under PRSU agreements, and are measured over a three-year performance period (“MU”).

PRSU activity under the Company’s stock plans is shown below:


	Revenue Based PRSUs			Market Condition Based PRSUs
	Number	Weighted Average Fair Value		Number	Weighted Average Fair Value
Outstanding as of December 31, 2025	696,439	$	39.20	841,966	$	56.31
Granted	409,256	30.90		613,778	36.42
Vested	—	—		—	—
Forfeited	(15,147)	37.03		(22,710)	53.63
Outstanding as of June 30, 2026	1,090,548	$	36.12	1,433,034	$	47.83

As of June 30, 2026, unrecognized compensation cost of $64,944 is expected to be expensed over a weighted average period of 1.9 years.

Employee Stock Purchase Plan

On June 21, 2022, at the annual meeting of stockholders of the Company, the Company’s stockholders approved the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan (the “2022 ESPP”).

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

The 2022 ESPP allows eligible employees to purchase the Company’s shares of common stock through payroll deductions at a pre-specified discount to the lower of the closing price of the Company’s common shares on the date of offering or the last business day of each purchase interval. The dollar amount of shares of common stock that can be purchased under the 2022 ESPP must not exceed 15% of the participating employee’s compensation during the offering period, subject to a cap of $25 per employee per calendar year. The Company has reserved 4,000,000 shares of common stock for issuance under the 2022 ESPP.

The eighth offering period under the 2022 ESPP commenced on January 1, 2026 with a term of six months.

Activity under the Company’s 2022 ESPP is shown below:


	Number	Total Proceeds Received
Shares available for issuance as of December 31, 2025	3,510,269

Issuance of common stock made during the seventh offering period	60,139	$	2,297
Shares available for issuance as of June 30, 2026	3,450,130
Issuance of common stock related to the eighth offering period made subsequent to June 30, 2026	146,650	$	3,413

24. Related Party Disclosures

The Company provides data and AI-led solutions and services to Corridor Platforms, Inc., which is an equity affiliate of the Company. The Company recognized revenues, net of $97 and $42, during the three months ended June 30, 2026 and 2025 respectively, and $181 and $84, during the six months ended June 30, 2026 and 2025 respectively. The Company had outstanding accounts receivable, net of $41 and $28, related to this service contract as of June 30, 2026 and December 31, 2025, respectively.

25. Commitments and Contingencies

Capital Commitments

As of June 30, 2026 and December 31, 2025, the Company had committed to spend approximately $11,900 and $8,700, respectively, net of capital advances, under agreements to purchase property and equipment.

On June 15, 2023, the Company, along with other limited partners, entered into a limited partnership agreement with the general partner, PNP Financial Services Fund GP I, LLC and initial limited partner and outgoing partner, to form a partnership with the name Plug and Play Financial Services Fund I, L.P. (the “Partnership”) for the primary purpose of making investments in growth-stage technology companies. The Company committed to make an aggregate investment of $4,000 in the Partnership. As of June 30, 2026, the Company has invested $3,000 in the Partnership and is committed to make further investments up to an amount of $1,000.

Other Commitments

Certain units of the Company’s Indian subsidiaries were established as 100% Export-Oriented units or under the Software Technology Parks of India or Special Economic Zone scheme promulgated by the Government of India. These units are exempt from customs, central excise duties, and levies on imported and indigenous capital goods, stores, and spares. The Company has undertaken to pay custom duties, service taxes, levies, and liquidated damages payable, if any, in respect of imported and indigenous capital goods, stores and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. The Company believes, however, that these units have in the past satisfied, and will continue to satisfy, the required conditions.

The Company’s operations centers in the Philippines are registered as qualified Philippines Economic Zone Authority units, which provides the Company fiscal incentives on the import of capital goods and local purchase of services and materials. The Company is required to meet certain requirements to retain the incentives. The Company has complied, and intends to continue compliance, with the requirements to avail itself of the incentives.

Contingencies

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EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

June 30, 2026

(In thousands, except per share amount and share count)

The transfer pricing regulations in the countries where the Company operates require that controlled intercompany transactions be at arm’s-length. Accordingly, the Company determines and documents pricing for controlled intercompany transactions based on an economic analysis as prescribed in the respective regulations. The tax authorities have jurisdiction to review the Company’s transfer pricing. If the Company’s transfer pricing is challenged by the authorities, they could assess additional tax, interest and penalties, thereby impacting the Company’s profitability and cash flows.

The Company is currently involved in transfer pricing and related income tax disputes with Indian tax authorities. The aggregate amount demanded by Indian tax authorities (net of advance payments) as of June 30, 2026 and December 31, 2025 is $44,376 and $42,205, respectively. The Company has made payments and/or provided bank guarantees against these demands in the amounts of $7,436 and $7,684, as of June 30, 2026 and December 31, 2025, respectively. The Company believes that its positions will more likely than not be sustained upon final examination by the tax authorities, and accordingly has not accrued any liabilities with respect to these matters in its consolidated financial statements.

Pursuant to reviewing the Company’s annual VAT and service tax filings, the Indian tax authorities raised aggregate demands for tax years 2015 and 2017, in the amounts of $4,923 and $5,186, as of June 30, 2026 and December 31, 2025, respectively. The Company has made payments and/or provided bank guarantees against these demands in the amounts of $4,832 and $5,090, as of June 30, 2026 and December 31, 2025, respectively. The Company has filed appeals against these matters and believes that it is more likely than not that upon final examination its position will be sustained based on technical merits.

The Indian Goods and Services Tax (“GST”) authorities rejected the Company’s refund claims in the amounts of $5,216 and $5,494 as of June 30, 2026 and December 31, 2025, respectively. The Company has filed appeals against these matters and believes that it is more likely than not that upon final examination its position will be sustained based on its technical merits. Accordingly, no allowances were recorded against these GST receivables as of June 30, 2026 and December 31, 2025, respectively.

Some of the Company’s subsidiaries in India have undergone assessments with the statutory authority with respect to defined contribution plan. Except for some components of the assessments for which the Company has recognized a provision in the unaudited consolidated financial statements, the Company believes that the amount demanded by such authority is not a meaningful indicator of the potential liabilities of the Company, and that these matters are without merit. The Company is defending against the assessment orders and in two cases, has instituted an appeal against the order before the relevant tribunal while also making a payment under protest of the amount demanded. As of the reporting date, the Company’s management does not believe that the ultimate assessments in any of these matters will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. The Company will continue to monitor and evaluate its position based on future events and developments on these matters.

From time to time, the Company, its subsidiaries, and/or their present officers or directors, may be or have been, named as a defendant in litigation matters, including employment-related claims. The plaintiffs in those cases seek damages, including, where applicable, compensatory damages, punitive damages and attorney’s fees. With respect to pending litigation matters as of the reporting date, the Company believes that the damages claimed are without merit, and the Company intends to vigorously defend them. The Company will continuously monitor developments on these matters to assess potential impacts to the financial statements.

The outcomes of legal actions are unpredictable and subject to significant uncertainties, and thus it is inherently difficult to determine the likelihood of the Company incurring a material loss or quantification of any such loss. With respect to certain pending litigation matters as of the reporting date, the Company has made provisions based on information currently available, including its evaluation of the facts underlying each matter and legal counsel’s advice on the estimated losses or range of reasonably possible losses. Based on the Company’s assessment, including the availability of insurance recoveries, the Company’s management does not believe that currently pending litigation, individually or in aggregate, will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. The Company will continuously monitor these matters to assess potential impacts to the financial statements.

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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 announced or future 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;

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

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•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.

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.

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.

Recent Developments

On June 22, 2026, we, through our wholly owned subsidiary Clairvoyant AI, Inc. entered into a securities purchase agreement (the “Purchase Agreement”) to acquire 100% of the equity securities of I Merit Inc., a Delaware Corporation (“iMerit”), in exchange for upfront cash consideration of $170 million, subject to certain post-closing adjustments, and up to an additional $140 million in cash incentives and earnouts over two years contingent on meeting specified milestones, as set forth in the Purchase Agreement. iMerit is a recognized leader in AI model training, evaluation and reinforcement learning. It is focused on helping its clients train large language and multimodal models to improve accuracy, precision, and effectiveness. The acquisition strengthens our ability to help enterprises achieve measurable outcomes from AI, builds partnerships with leading foundation model builders and expands its reach into high-growth AI tech sectors. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions, including expiration or termination of the waiting period for applicable antitrust regulations.

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Revenues

For the three months ended June 30, 2026, we generated revenues of $594.8 million compared to revenues of $514.5 million for the three months ended June 30, 2025, an increase of $80.3 million, or 15.6%. For the six months ended June 30, 2026, we generated revenues of $1,165.1 million compared to revenues of $1,015.5 million for the six months ended June 30, 2025, an increase of $149.6 million, or 14.7%.

We serve clients mainly in North America, and the United Kingdom & Europe, with these two regions generating 82.3% and 15.0%, respectively, of our total revenues for the three months ended June 30, 2026, and 82.2% and 15.1%, respectively, of our total revenues for the three months ended June 30, 2025. For the six months ended June 30, 2026, these two regions generated 82.6% and 14.8%, respectively, of our total revenues and 82.5% and 14.8%, respectively, of our total revenues for the six months ended June 30, 2025.

For the three months ended June 30, 2026 and 2025, our total revenues from our top ten clients accounted for 34.1% and 33.5% of our total revenues, respectively. For the six months ended June 30, 2026 and 2025, our total revenues from our top ten clients accounted for 34.3% and 33.6% 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.

Our Business

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.

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.

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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 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

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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 six months ended June 30, 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.

Results of Operations

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025:


									(dollars in millions)
	Three months ended June 30, 2026		Percentage of Revenues, net		Three months ended June 30, 2025		Percentage of Revenues, net		Dollar change		Percentage change
	(A)				(B)				(C=A-B)
Revenues, net	$	594.8	100.0	%	$	514.5	100.0	%	$	80.3	15.6	%
Cost of revenues (1)	368.8		62.0	%	320.3		62.3	%	48.5		15.2	%
Gross profit (1)	226.0		38.0	%	194.2		37.7	%	31.8		16.4	%
Operating expenses:
General and administrative expenses	74.4		12.5	%	59.5		11.6	%	14.9		25.0	%
Selling and marketing expenses	49.6		8.3	%	39.4		7.7	%	10.2		25.8	%
Depreciation and amortization expense	14.6		2.5	%	14.1		2.7	%	0.5		3.9	%

Total operating expenses	138.6		23.3	%	113.0		22.0	%	25.6		22.7	%
Income from operations	87.4		14.7	%	81.2		15.8	%	6.2		7.6	%
Foreign exchange gain, net	1.6		0.3	%	2.2		0.4	%	(0.6)		(27.2)	%
Interest expense	(5.1)		(0.9)	%	(4.3)		(0.8)	%	(0.8)		18.4	%
Other income, net	0.1		—	%	5.7		1.1	%	(5.6)		(97.7)	%

Income before income tax expense and earnings from equity affiliates	84.0		14.1	%	84.8		16.5	%	(0.8)		(0.9)	%
Income tax expense	19.4		3.3	%	18.6		3.6	%	0.8		4.7	%
Income before earnings from equity affiliates	64.6		10.9	%	66.2		12.9	%	(1.6)		(2.5)	%
Loss from equity-method investment	—		—	%	(0.1)		—	%	0.1		—	%
Net income	$	64.6	10.8	%	$	66.1	12.8	%	$	(1.5)	(2.3)	%

(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 June 30, 2026 compared to Three Months Ended June 30, 2025

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


	Three months ended June 30,				Dollar change		Percentage change		Percentage of Total Revenues for the three months ended June 30,
	2026		2025						2026		2025
	(dollars in millions)
Insurance	$	197.8	$	172.2	$	25.6	14.9	%	33.2	%	33.5	%
Healthcare and Life Sciences	158.0		129.5		28.5		22.0	%	26.6	%	25.2	%
Banking, Capital Markets and Diversified Industries	133.9		121.1		12.8		10.5	%	22.5	%	23.5	%
International Growth Markets	105.1		91.7		13.4		14.7	%	17.7	%	17.8	%
Revenues, net	$	594.8	$	514.5	$	80.3	15.6	%	100.0	%	100.0	%

Revenues for the three months ended June 30, 2026 were up by $80.3 million, or 15.6%, compared to the three months ended June 30, 2025, driven by the expansion of business from our existing clients across all reportable segments by 13.3% and revenue from new clients wins by 2.6%, partially offset by a foreign exchange loss, net of hedging by 0.3% during the three months ended June 30, 2026.

Revenue growth in Insurance by 14.9% was driven by the expansion of business from our existing clients by 13.7% and new clients by 1.2% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Revenue growth in Healthcare and Life Sciences by 22.0% was driven by the expansion of business from our existing clients by 21.0% and new clients by 1.0% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Revenue growth in Banking, Capital Markets and Diversified Industries by 10.5% was driven by the expansion of business from our existing clients by 5.2% and new clients by 5.3% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Revenue growth in International Growth Markets of 14.7% was driven by the expansion of business from our existing clients by 12.1%, new clients by 4.2%, partially offset by a foreign exchange loss, net of hedging by 1.6% during the three months ended June 30, 2026, compared to the three months ended June 30, 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 June 30,				Dollar change		Percentage change		Three months ended June 30,				Percentage change
	2026		2025						2026		2025
	(dollars in millions)
Insurance	$	129.4	$	112.3	$	17.1	15.2	%	34.6	%	34.8	%	(0.2)	%
Healthcare and Life Sciences	83.9		73.1		10.8		14.8	%	46.9	%	43.5	%	3.4	%
Banking, Capital Markets and Diversified Industries	87.3		75.4		11.9		15.8	%	34.8	%	37.8	%	(3.0)	%
International Growth Markets	68.2		59.5		8.7		14.7	%	35.1	%	35.1	%	—	%
Total	$	368.8	$	320.3	$	48.5	15.2	%	38.0	%	37.7	%	0.3	%

Cost of revenues for the three months ended June 30, 2026 increased by $48.5 million, or 15.2% compared to the three months ended June 30, 2025. The increase in cost of revenues was due to increases in employee-related costs of $44.9 million on account of higher headcount and wage inflation, and higher technology costs of $8.4 million, facilities and other operating costs

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of $4.4 million, partially offset by a foreign exchange gain, net of hedging of $9.2 million. Our gross margin for the three months ended June 30, 2026 was 38.0%, compared to 37.7% for the three months ended June 30, 2025, an increase of 30 basis points (“bps”), primarily driven by higher revenues and operational efficiencies, partially offset by lower volumes from certain existing clients.

The increase in cost of revenues in Insurance by $17.1 million for the three months ended June 30, 2026 was due to increases in employee-related costs of $15.6 million on account of higher headcount and wage inflation, higher technology costs of $2.5 million, and other operating costs of $1.3 million, partially offset by foreign exchange gain, net of hedging of $2.3 million. Gross margin in Insurance decreased by 20 bps, primarily due to lower volumes from certain existing clients during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

The increase in cost of revenues in Healthcare and Life Sciences by $10.8 million for the three months ended June 30, 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 $1.9 million, and higher facilities and other operating costs of $1.7 million, partially offset by foreign exchange gain, net of hedging of $2.1 million. Gross margin in Healthcare and Life Sciences increased by 340 bps, primarily due to higher volumes from certain existing clients during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $11.9 million for the three months ended June 30, 2026 was due to increases in employee-related costs of $11.4 million on account of higher headcount and wage inflation, higher technology costs of $1.8 million, and higher facilities and other operating costs of $1.0 million, partially offset by foreign exchange gain, net of hedging of $2.3 million. Gross margin in Banking, Capital Markets and Diversified Industries decreased by 300 bps, primarily due to lower volumes from certain existing clients during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

The increase in cost of revenues in International Growth Markets by $8.7 million for the three months ended June 30, 2026 was due to increases in employee-related costs of $8.6 million on account of higher headcount and wage inflation, and higher technology costs of $2.2 million and other operating costs $0.4 million, partially offset by a foreign exchange gain, net of hedging of $2.5 million. Gross margin in International Growth Markets remained flat during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues increased from 19.2% during the three months ended June 30, 2025 to 20.9% during the three months ended June 30, 2026.

The increase in SG&A expenses by $25.1 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $19.7 million on account of higher headcount and wage inflation, iMerit acquisition related expenses of $1.9 million, increased investments in digital and generative AI capabilities of $1.8 million, and higher sales and marketing and other operating costs of $1.7 million.

Depreciation and Amortization. Depreciation and amortization expenses as a percentage of net revenues decreased by 0.2% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

The increase in depreciation and amortization expense by 3.9% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was primarily due to investments in infrastructure, technology assets and digital capabilities.

Income from Operations. The increase in income from operations by 7.6% during the three months ended June 30, 2026, compared to the three months ended June 30, 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 $1.6 million for the three months ended June 30, 2026, compared to a foreign exchange gain, net of $2.2 million for the three months ended June 30, 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 June 30, 2026, compared to the three months ended June 30, 2025.

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Interest expense. The increase in interest expense by $0.8 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was primarily due to a higher average borrowings.

Other Income, net.


	Three months ended June 30,				Change		Percentage change
	2026		2025
	(dollars in millions)


Interest and dividend income	$	2.4	$	2.7	$	(0.3)	(9.1)	%
Gain on sale and fair value mark-to-market on investments	1.6		2.3		(0.7)		(31.4)	%
Fair value changes of contingent consideration	(3.0)		—		(3.0)		(100.0)	%
Others, net	(0.9)		0.7		(1.6)		(217.4)	%
Other income, net	$	0.1	$	5.7	$	(5.6)	(97.7)	%

Other income, net decreased by $5.6 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 primarily due to changes in the fair value consideration related to our August 2024 acquisition of Incandescent Technologies, Inc. (“ITI Data”), lower yield on our investments and higher other expenses, net.

Income Tax Expense. The effective tax rate for the three months ended June 30, 2026 was 23.1%, an increase from 21.9% for the three months ended June 30, 2025. We recorded income tax expense of $19.4 million and $18.6 million for the three months ended June 30, 2026 and 2025, respectively. The increase in income tax expense was primarily as a result of an increase in non-deductible expenses and lower excess tax benefits related to stock-based compensation, as compared to the three months ended June 30, 2025.

Net Income. The decrease in net income by 2.3% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was attributable to the aforementioned factors.

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Results of Operations

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:


									(dollars in millions)
	Six months ended June 30, 2026		Percentage of Revenues, net		Six months ended June 30, 2025		Percentage of Revenues, net		Dollar Change		Percentage Change
	(A)				(B)				(C=A-B)
Revenues, net	$	1,165.1	100.0	%	$	1,015.5	100.0	%	$	149.6	14.7	%
Cost of revenues (1)	717.1		61.5	%	628.0		61.8	%	89.1		14.2	%
Gross profit (1)	448.0		38.5	%	387.5		38.2	%	60.5		15.6	%
Operating expenses:
General and administrative expenses	143.5		12.3	%	119.0		11.7	%	24.5		20.6	%
Selling and marketing expenses	96.8		8.3	%	81.4		8.0	%	15.4		19.0	%
Depreciation and amortization expense	28.6		2.5	%	27.6		2.7	%	1.0		3.6	%

Total operating expenses	268.9		23.1	%	228.0		22.4	%	40.9		18.0	%
Income from operations	179.1		15.4	%	159.5		15.7	%	19.6		12.3	%
Foreign exchange gain, net	2.7		0.2	%	3.4		0.3	%	(0.7)		(19.4)	%
Interest expense	(9.0)		(0.8)	%	(8.4)		(0.8)	%	(0.6)		7.0	%
Other income, net	2.5		0.2	%	10.4		1.0	%	(7.9)		(75.7)	%

Income before income tax expense and earnings from equity affiliates	175.3		15.1	%	164.9		16.2	%	10.4		6.3	%
Income tax expense	43.7		3.8	%	32.0		3.2	%	11.7		36.5	%
Income before earnings from equity affiliates	131.6		11.3	%	132.9		13.1	%	(1.3)		(0.9)	%
Loss from equity-method investment	—		—	%	(0.3)		—	%	0.3		(87.6)	%
Net income	$	131.6	11.3	%	$	132.6	13.1	%	$	(1.0)	(0.8)	%

(1) Exclusive of depreciation and amortization expense.

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Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

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


	Six months ended June 30,				Dollar change		Percentage change		Percentage of Total Revenues for the six months ended June 30,
	2026		2025						2026		2025
	(dollars in millions)
Insurance	$	391.7	$	344.2	$	47.5	13.8	%	33.6	%	33.9	%
Healthcare and Life Sciences	309.9		255.1		54.8		21.5	%	26.6	%	25.1	%
Banking, Capital Markets and Diversified Industries	261.2		238.8		22.4		9.4	%	22.4	%	23.5	%
International Growth Markets	202.3		177.4		24.9		14.0	%	17.4	%	17.5	%
Revenues, net	$	1,165.1	$	1,015.5	$	149.6	14.7	%	100.0	%	100.0	%

Revenues for the six months ended June 30, 2026 were up by $149.6 million, or 14.7%, compared to the six months ended June 30, 2025, driven by the expansion of business from our existing clients across all reportable segments by 12.4% and revenue from new clients wins by 2.3% during the six months ended June 30, 2026.

Revenue growth in Insurance by 13.8% was driven by the expansion of business from our existing clients by 12.6% and new clients by 1.2% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Revenue growth in Healthcare and Life Sciences by 21.5% was driven by the expansion of business from our existing clients by 20.8% and new clients by 0.7% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Revenue growth in Banking, Capital Markets and Diversified Industries by 9.4% was driven by the expansion of business from our existing clients by 4.7% and new clients by 4.7% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Revenue growth in International Growth Markets of 14.0% was driven by the expansion of business from our existing clients by 10.1%, new clients by 3.6% and a foreign exchange gain, net of hedging by 0.3% during the six months ended June 30, 2026, compared to the six months ended June 30, 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
	Six months ended June 30,				Dollar change		Percentage change		Six months ended June 30,				Percentage change
	2026		2025						2026		2025
	(dollars in millions)
Insurance	$	250.2	$	221.5	$	28.7	13.0	%	36.1	%	35.7	%	0.4	%
Healthcare and Life Sciences	167.0		143.6		23.4		16.3	%	46.1	%	43.7	%	2.4	%
Banking, Capital Markets and Diversified Industries	167.7		149.1		18.6		12.4	%	35.8	%	37.6	%	(1.8)	%
International Growth Markets	132.2		113.8		18.4		16.2	%	34.6	%	35.9	%	(1.3)	%
Total	$	717.1	$	628.0	$	89.1	14.2	%	38.5	%	38.2	%	0.3	%

Cost of revenues for the six months ended June 30, 2026 increased by $89.1 million, or 14.2%, compared to the six months ended June 30, 2025. The increase in cost of revenues was due to increases in employee-related costs of $80.4 million on account of higher headcount and wage inflation, and higher technology costs of $14.5 million, and higher facilities and other operating

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costs of $7.2 million, partially offset by a foreign exchange gain, net of hedging of $13.0 million. Our gross margin for the six months ended June 30, 2026 was 38.5%, compared to 38.2% for the six months ended June 30, 2025, an increase of 30 bps, primarily driven by higher revenues and operational efficiencies, partially offset by lower volumes from certain existing clients.

The increase in cost of revenues in Insurance by $28.7 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $26.8 million on account of higher headcount and wage inflation, higher technology costs of $4.3 million, and higher other operating costs of $1.0 million, partially offset by foreign exchange gain, net of hedging of $3.4 million. Gross margin in Insurance increased by 40 bps, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

The increase in cost of revenues in Healthcare and Life Sciences by $23.4 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $18.6 million on account of higher headcount and wage inflation, higher technology costs of $3.5 million, and higher facilities and other operating costs of $4.5 million, partially offset by foreign exchange gain, net of hedging of $3.2 million. Gross margin in Healthcare and Life Sciences increased by 240 bps, primarily due to higher volumes from certain existing clients during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $18.6 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $18.3 million on account of higher headcount and wage inflation, higher technology costs of $2.8 million, and higher facilities and other operating costs of $0.8 million, partially offset by a foreign exchange gain, net of hedging of $3.3 million. Gross margin in Banking, Capital Markets and Diversified Industries decreased by 180 bps, primarily due to lower volumes from certain existing clients during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

The increase in cost of revenues in International Growth Markets by $18.4 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $16.7 million on account of higher headcount and wage inflation, higher technology costs of $3.9 million, and higher facilities and other operating costs of $0.9 million, partially offset by a foreign exchange gain, net of hedging of $3.1 million. Gross margin in International Growth Markets decreased by 130 bps, primarily due to lower volumes from certain existing clients during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues increased from 19.7% during the six months ended June 30, 2025 to 20.6% during the six months ended June 30, 2026.

The increase in SG&A expenses by $39.9 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $31.7 million on account of higher headcount and wage inflation, increased investments in digital and generative AI capabilities of $3.7 million, higher sales and marketing costs of $2.0 million, iMerit acquisition related expenses of $1.9 million, and other operating costs of $0.6 million.

Depreciation and Amortization. Depreciation and amortization expenses as a percentage of net revenues decreased by 0.2% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

The increase in depreciation and amortization expense by 3.6% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was primarily due to investments in infrastructure, technology assets and digital capabilities.

Income from Operations. The increase in income from operations by 12.3% during the six months ended June 30, 2026, compared to the six months ended June 30, 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 $2.7 million for the six months ended June 30, 2026, compared to a foreign exchange gain, net of $3.4 million for the six months ended June 30, 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 six months ended June 30, 2026, compared to the six months ended June 30, 2025.

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Interest expense. The increase in interest expense by $0.6 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was primarily due to higher average borrowings.

Other Income, net.


	Six months ended June 30,				Change		Percentage change
	2026		2025
	(dollars in millions)

Interest and dividend income	$	4.0	$	5.3	$	(1.3)	(24.8)	%
Gain on sale and fair value mark-to-market on investments	3.0		4.2		(1.2)		(27.7)	%
Fair value changes of contingent consideration	(3.0)		—		(3.0)		(100.0)	%

Others, net	(1.5)		0.9		(2.4)		(275.5)	%
Other income, net	$	2.5	$	10.4	$	(7.9)	(75.7)	%

Other income, net decreased by $7.9 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 primarily due to changes in the fair value consideration related to our August 2024 acquisition of ITI Data, lower yield on our investments and higher other expenses, net.

Income Tax Expense. The effective tax rate for the six months ended June 30, 2026 was 24.9%, an increase from 19.5% for the six months ended June 30, 2025. We recorded income tax expense of $43.7 million and $32.0 million for the six months ended June 30, 2026 and 2025, respectively. The increase in income tax expense was primarily as a result of higher profit and lower excess tax benefits related to stock-based compensation, partially offset by a decrease in non-deductible compensation expenses, as compared to the six months ended June 30, 2025.

Net Income. The decrease in net income by 0.8% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was attributable to the aforementioned factors.

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Liquidity and Capital Resources


	Six months ended June 30,				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	89.6		112.6		(23.0)		(20.4)	%
Net cash used for investing activities	(6.2)		(36.3)		30.1		(83.0)	%
Net cash used for financing activities	(100.8)		(84.6)		(16.2)		19.2	%
Effect of exchange rate changes	(1.8)		7.4		(9.2)		(125.3)	%
Closing cash, cash equivalents and restricted cash	$	146.8	$	170.5	$	(23.7)	(13.9)	%

As of June 30, 2026 and December 31, 2025, we had $283.8 million and $328.4 million, respectively, in cash, cash equivalents and short-term investments, of which $249.3 million and $285.8 million, respectively, is located in foreign jurisdictions that upon distribution may be subject to withholding and other taxes. We periodically evaluate opportunities to distribute cash among our group entities to fund our operations, expand our business and make strategic acquisitions in the United States and other geographies. As and when we decide to distribute, we may have to accrue additional taxes in accordance with local tax laws, rules and regulations in the relevant foreign jurisdictions. During the six months ended June 30, 2026, some of our foreign subsidiaries repatriated $13.0 million to the United States.

Operating Activities: Net cash provided by operating activities was $89.6 million during the six months ended June 30, 2026, compared to $112.6 million during the six months ended June 30, 2025, reflecting higher working capital needs, partially offset by higher cash earnings. The major drivers contributing to the decrease of $23.0 million year-over-year included the following:

•Changes in accounts receivable, including advance billings, contributed lower cash flow of $50.1 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Our days sales outstanding were 69 days as of June 30, 2026, compared to 64 days as of June 30, 2025.

•Increase in cash earnings, including adjustments for non-cash and other items contributed higher cash flow of $16.0 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These adjustments include unrealized foreign currency exchange (gain)/loss, net, fair value mark-to-market on investments, stock-based employee compensation, depreciation and amortization of long-lived assets and intangibles acquired in business combinations, among others.

•Changes in other assets, accounts payables including other liabilities contributed to a lower cash payout of $11.1 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Investing Activities: Net cash used for investing activities were $6.2 million during the six months ended June 30, 2026, compared to net cash used of $36.3 million for the six months ended June 30, 2025. The decrease of $30.1 million was primarily due to higher proceeds from redemption of investments of $30.2 million during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.

Financing Activities: Net cash used for financing activities were $100.8 million during the six months ended June 30, 2026, compared to net cash used of $84.6 million during the six months ended June 30, 2025. The increase of $16.2 million was primarily due to higher purchases of treasury stock of $126.9 million under our share repurchase programs, partially offset by higher net proceeds from borrowings of $111.0 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

We expect to use cash from operating activities to maintain and expand our 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.

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We incurred $27.4 million of capital expenditure during the six months ended June 30, 2026. We expect to incur total capital expenditures of between $58.0 million to $62.0 million in fiscal 2026, primarily to meet our growth requirements, including additions to our facilities and infrastructure, as well as investments in technology applications, product development, and other digital technologies.

In connection with any tax assessment orders that have been issued, or may be issued against us or our subsidiaries, we may be required to deposit additional amounts with the relevant authorities with respect to such assessment orders. See Note 25 - Commitments and Contingencies to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements” for further information.

We believe that our existing cash, cash equivalents and short-term investments and sources of liquidity will be sufficient to satisfy our cash requirements over the next twelve months. Our future cash requirements will depend on many factors, including our rate of revenue growth, our investments in strategic initiatives like acquisition of complementary businesses, capital expenditures and continued stock repurchases, including accelerated stock repurchases under our board-authorized stock repurchase program, which may require the use of significant cash resources and/or additional financing. We anticipate that we will continue to rely upon cash from operating activities to finance most of our above-mentioned requirements, although if we have significant growth through acquisitions, we may need to obtain additional financing.

In the ordinary course of business, we enter into contracts and commitments that obligate us to make payments in the future. These obligations include borrowings, including interest obligations, purchase commitments, operating and finance lease commitments, employee benefit payments under gratuity plans, payments for contingent consideration and uncertain tax positions. See Note 16 - Fair Value Measurements - Fair Value of Contingent Consideration, Note 18 - Borrowings, Note 20 - Employee Benefit Plans, Note 21 - Leases, Note 22 - Income Taxes and Note 25 - Commitments and Contingencies to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements” for further information on material cash requirements from known contractual and other obligations.

In the ordinary course of business, we provide standby letters of credit to third parties primarily for facility leases. As of June 30, 2026 and December 31, 2025, we had outstanding letters of credit of $1.1 million and $1.6 million respectively, that were not recognized in our consolidated balance sheets. These are unlikely to have, a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. We had no other off-balance sheet arrangements or obligations.

Financing Arrangements

The following table summarizes our debt position:


	As of
	June 30, 2026						December 31, 2025
	(dollars in millions)
	Revolving credit facility		Term loan facility		Total		Revolving credit facility		Term loan facility		Total
Current portion of long-term borrowings	$	290.0	$	91.3	$	381.3	$	—	$	5.0	$	5.0
Unamortized debt issuance costs	—		(0.1)		(0.1)		—		(0.1)		(0.1)
Current portion of long-term borrowings	290.0		91.2		381.2		—		4.9		4.9

Long-term borrowings	—		—		—		205.0		88.8		293.8
Unamortized debt issuance costs	—		—		—		—		—		—
Long-term borrowings	—		—		—		205.0		88.8		293.8
Borrowings	$	290.0	$	91.2	$	381.2	$	205.0	$	93.7	$	298.7

Our 2024 Credit Agreement will mature on April 18, 2027, and all outstanding amounts will be due and payable. We are in the process of refinancing our 2024 Credit Agreement, which is expected to be completed in the third quarter of 2026. We believe

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that we have access to adequate resources, which include cash and cash equivalents, short-term investments, cash provided by operating activities and unused amounts in our revolving credit facility to meet our needs for at least the next twelve months.

As of June 30, 2026 and December 31, 2025, we were in compliance with the financial covenants under our credit agreement with certain lenders and Citibank N.A. as administrative agent. See Note 18 – Borrowings to our unaudited consolidated financial statements.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see Note 2 - Summary of Significant Accounting Policies - Recent Accounting Pronouncements to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements.”

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), to allow timely decisions regarding required disclosure. In connection with the preparation of this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of the CEO and CFO, of the effectiveness and operation of our disclosure controls and procedures as of June 30, 2026. Based upon that evaluation, our CEO and CFO have concluded that the Company’s disclosure controls and procedures, as of June 30, 2026, were effective.

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2026, we completed the implementation of an upgraded enterprise resource planning (“ERP”) system. In connection with the implementation, we modified certain business processes and related internal controls over financial reporting, as appropriate. We do not believe these changes have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

In the course of our normal business activities, various lawsuits, claims and proceedings may be instituted or asserted against us. Although there can be no assurance, we believe that the disposition of matters currently instituted or asserted will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. See Note 25 - Commitments and Contingencies to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements” for details regarding our tax proceedings.

ITEM 1A. Risk Factors

We have disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, a number of risks which may materially affect our business, financial condition or results of operations. You should carefully consider those risk factors and the other information set forth elsewhere in this Quarterly Report on Form 10-Q. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us may also materially adversely affect our business, financial condition and/or results of operations.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

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Use of Proceeds

None.

Purchases of Equity Securities by the Issuer

During the three months ended June 30, 2026, purchases of common stock were as follows:


	Shares Purchased from Employees in connection with satisfaction of Withholding Tax Obligations			Shares Purchased as Part of Publicly Announced Programs			Total Number of Shares Purchased	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
Period	Number of Shares Purchased	Average Price Paid per share		Number of Shares Purchased	Average Price Paid per share
April 1, 2026 through April 30, 2026	—	$	—	277,745	$	30.77	277,745	$	360,000,038
May 1, 2026 through May 31, 2026	—	$	—	922,413	$	30.94	922,413	$	356,460,324
June 1, 2026 through June 30, 2026	—	$	—	226,316	$	28.12	226,316	$	350,095,275
Total	—	$	—	1,426,474	$	30.46	1,426,474

On February 26, 2024, the Company’s board of directors authorized a $500 million (excluding excise tax) common stock repurchase program beginning March 1, 2024 (the “2024 Repurchase Program”), which was terminated effective February 28, 2026.

On February 19, 2026, the Company’s board of directors authorized a $500 million (excluding excise tax) common stock repurchase program effective February 28, 2026 (the “2026 Repurchase Program”), which replaced the 2024 Repurchase Program, and which will terminate on February 29, 2028 unless terminated earlier.

On March 16, 2026, we entered into the 2026 ASR Agreement with Morgan Stanley to repurchase shares of our common stock for an aggregate purchase price of $125 million, as part of our 2026 Repurchase Program. Upon payment of the aggregate purchase price of $125 million, we received an initial delivery of 3,346,720 shares of our common stock at an initial price of $29.88 per share, representing 80% of the aggregate purchase price.

On May 13, 2026, upon final settlement of the 2026 ASR Agreement, we received 799,960 additional shares of our common stock based on a daily volume-weighted average price of $30.14 per share during the term of the 2026 ASR Agreement. See Note 19 – Capital Structure to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements” for further details.

Under our repurchase program, shares may be purchased by us from time to time from the open market and through private transactions, or otherwise, as determined by our management as market conditions warrant. We have structured open market purchases under our repurchase program to comply with Rule 10b-18 under the Exchange Act. Repurchases may be discontinued at any time by management or our board of directors. Repurchased shares are recorded as treasury shares and are held until our board of directors designates that these shares be retired or used for other purposes.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

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Rule 10b5-1 Trading Plans

During the three months ended June 30, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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INDEX TO EXHIBITS

ITEM 6. Exhibits

The following exhibits are being filed as part of this report or incorporated by reference as indicated therein:



3.1						Fourth Amended and Restated Certificate of Incorporation of the Company, as in effect as of the date hereof (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 1-33089) filed on June 25, 2024).

3.2						Sixth Amended and Restated By-laws of the Company, as in effect as of the date hereof (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 1-33089) filed on June 21, 2023).

31.1						Certification of the Chief Executive Officer of ExlService Holdings, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of the Chief Financial Officer of ExlService Holdings, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2						Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase

101.PRE						Inline XBRL Extension Presentation Linkbase

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*This exhibit will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such exhibit will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: July 28, 2026	EXLSERVICE HOLDINGS, INC.

	By:	/S/ MAURIZIO NICOLELLI
		MAURIZIO NICOLELLI Chief Financial Officer (Duly Authorized Signatory, Principal Financial and Accounting Officer)