ExlService Holdings (EXLS) Q2 FY26 earnings call: guidance and Q&A

How much of the data and AI-led growth is from new AI native programs versus traditional analytics modernization, and what gives confidence in sustained 20%+ growth?

Rohit explained that the growth is a mix of both, with newer areas like data management, AI services, and AI solutions growing very rapidly on a small base. He attributed confidence to the strong performance across all service lines within data and AI-led business and the increasing strategic engagement from clients.

“The reason why it's kind of showing this kind of strength is because each of the service lines within our data and AI-led business are actually performing really well. So Payment Integrity continues to grow very nicely. The data management part of our business is accelerating. The analytics and AI services are -- continues to grow nicely.”

asked by Bryan Bergin · answered by Rohit Kapoor

Is EXL developing IP for token optimization, and can this solution accelerate new opportunities?

Rohit confirmed that token economics will be an important part of AI modernization. EXL is building capabilities to provide advanced signals and help clients reduce token costs, leveraging its deep industry knowledge. He sees this as a rapidly expanding and complex area where EXL is well-positioned to deliver value.

“I think token economics is going to become a very important and integral part of any AI modernization program for an enterprise client. And there seems to be a tremendous amount of value that can be created for clients just in terms of the design, the engineering, and the way in which the implementation is done for AI models and the way in which AI -- agentic AI is used on the operating workflows.”

asked by Bryan Bergin · answered by Rohit Kapoor

Can the acceleration in international growth markets continue, and how should the segment be viewed going forward?

Rohit stated that international growth markets represent a huge untapped opportunity, with AI adoption keeping pace with US clients. EXL is aggressively investing in talent and solutions in these markets to serve clients more directly, making it an important strategic focus area for significant revenue volume.

“So look, our view is that the international growth markets is a huge opportunity for EXL. The adoption of AI by clients in the international growth markets is actually trying to keep our base with the adoption of AI from our U.S. clients.”

asked by Surinder Thind · answered by Rohit Kapoor

Are clients changing their willingness to outsource given AI complexity and potentially low ROI from some AI projects so far?

Rohit noted that clients are moving from pilots to production, but this is still in early stages, use case by use case. Enterprises are building AI foundations, getting data estates in order, and struggling with the massive effort required for AI enablement. EXL is well-positioned to help clients navigate this complex change.

“But the effort that is required to enable Tie for any enterprise is massive, and it's really an enormous opportunity. I think this is one area which is significantly underestimated by the market and what we are seeing is clients are really struggling with this change and we are in a great position to actually help them with this.”

asked by Puneet Jain · answered by Rohit Kapoor

Why does the guidance imply decelerating growth in the second half despite strong momentum in Q2?

Rohit attributed the prudent guidance to an unsettled macroeconomic environment, the continuous need to demonstrate AI ROI to clients, and the focus required for integrating the iMerit acquisition and building new capabilities. He acknowledged the challenges and risks in the business.

“We do need to continue to win the hearts and minds of the CIOs in our enterprise client organizations. And this enablement of AI and this change is hard. So it's something which needs to be worked upon and we need to be able to demonstrate the ROI to our clients on a daily basis to be able to continue to build and grow our business.”

asked by David Grossman · answered by Rohit Kapoor

How much of current AI revenue represents entirely new spending versus modernization of existing work?

Rohit clarified that stand-alone AI services and solutions are still a small but growing portion. AI enablement of digital operations has low penetration across the 2,000 unique processes and hundreds of clients. He emphasized that this is a long-term change, with customization required for each use case, and EXL's knowledge positions it well to drive adoption.

“The AI enablement of digital operations, again, the penetration of that remains quite low, and there's a lot more work to be done in terms of extending that to the entire existing portfolio. Keep in mind that the work that we do in digital operations is spread across 2,000 unique processes.”

asked by Vincent Colicchio · answered by Rohit Kapoor