What happens to overall revenue when an Operations Management client implements AI with EXL, considering efficiency gains and incremental work?

Rohit Kapoor explained that outsourcing penetration remains low, and AI enables more complex processes to be outsourced. EXL's ability to deliver tangible business outcomes and ROI with AI-enabled operations builds client confidence, leading to more work and differentiated growth. “What clients are looking for is a trusted AI-enabled operator of their business. And EXL is uniquely positioned to serve as a trusted AI operator for our clients.”

Why is 2026 growth guidance (9-11%) lower than initial 2025 guidance, given AI strength? Is it due to client budget pressures or added uncertainty?

Rohit Kapoor clarified that 2025 guidance included inorganic growth, while 2026 guidance is organic constant currency, making it comparable to prior organic guidance. He noted stronger visibility and backlog for 2026, with a very strong exit from Q4 2025. “in 2025, when we gave guidance, that included inorganic growth... the guidance that we are giving you today for 2026 is exactly the same as the guidance that we gave to you in 2025 on an organic constant currency basis.”

Payment integrity was thought vulnerable to AI. Why did this client expand with EXL, given new technologies?

Vivek Jetley stated that cost pressures for payers create a tailwind for payment integrity, as they seek efficiency. EXL's AI-powered solution helps optimize costs. Rohit Kapoor added that clients prioritize superior business outcomes, and EXL's proven capability led to the expansion. “what happens is right now, as the payers start facing more costs on their medical loss ratios as well as on their admin costs, they're going to be forced to become more efficient and manage those costs in a better way. And EXL's payment integrity offerings is one of those things that they will turn to in order to optimize that.”

EXLS

ExlService Holdings (EXLS) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Information Technology· Feb 25, 2026

Source: earnings call transcript

Executive summary

ExlService Holdings, Inc. Q4 FY25 — Strong AI-led Growth and Strategic Wins

ExlService Holdings delivered a strong Q4 and full year 2025, driven by robust demand for its data and AI-led services, which now constitute 57% of total revenue. The company is strategically positioned as an outcome-focused partner, leveraging its domain expertise to operationalize AI end-to-end for clients. Management anticipates continued strong momentum into 2026, supported by a robust pipeline and significant client wins, despite minor headwinds from new labor codes.

Highlights

Full year 2025 revenue increased 14% to nearly $2.1 billion.
Adjusted EPS grew 18% year-over-year to $1.95 per share for FY25.
Q4 revenue reached $543 million, representing 13% year-over-year organic growth.
Data and AI-led revenue grew 21% year-over-year and now represents 57% of total revenue.
Dollar volume of wins in Q4 was more than double that of any other quarter in 2025.

Concerns

India labor code changes resulted in a one-time increase of $10.3 million in defined benefit liability and an expected $0.02 to $0.03 dilution to adjusted EPS in 2026.
SG&A expenses as a percentage of revenue increased by 130 basis points year-over-year to 21.2% in Q4 2025.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue	$2.275 billion to $2.315 billion high materiality	FY26	High
Adjusted diluted EPS	$2.14 to $2.19 high materiality	FY26	High
Foreign exchange gain	approximately $2 million low materiality	FY26	Medium
Net interest expense	approximately $1 million low materiality	FY26	Medium
Effective tax rate	21% to 22% medium materiality	FY26	Medium
Capital expenditures	$50 million to $55 million medium materiality	FY26	Medium
Common stock repurchase program authorization	$500 million high materiality	2-year period · FY28	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Insurance Growth primarily driven by expansion in existing client relationships. The insurance vertical, including revenue from international growth markets, grew 6.7% year-over-year with revenue of $215.2 million.	$185.8 million	7.2%	2.9%	—
Healthcare and Life Sciences Broad-based growth, driven by higher volumes in Payment Services business and expansion in existing client relationships. The Healthcare and Life Sciences vertical, including revenue from international growth markets, grew 26.1% year-over-year with revenue of $142.5 million.	$142.2 million	26.2%	5.1%	—
Banking, Capital Markets and Diversified Industries Growth driven by the expansion of existing client relationships, primarily in banking capital markets and new client wins. The Banking Capital Markets and Diversified Industries vertical, including revenue from international growth markets, grew 10.6% year-over-year with revenue of $185 million.	$122.6 million	10.8%	1.3%	—
International Growth Markets Growth primarily driven by higher volumes with existing clients in banking capital markets and diversified industries and new client wins.	$92 million	8.1%	—	—

Product announcements

Product	Type	Timeline	Details
EXLdata.ai	launch	Q4 FY25
AI agents on life and annuities platform	update	Q4 FY25

Deals & partnerships

Large North American insurance carrier Enterprise transformation, data and AI partnership. multiyear

Deploy agentic AI into operational workflows, build a comprehensive data strategy powered by EXLdata.ai, and deliver end-to-end customer experience transformation. This was a new client.

Top 5 health care payer Significant expansion of existing relationship for AI-powered payment integrity solution.

Client selected EXL's AI-powered payment integrity solution to reengineer clinical auditing processes. This client has been with EXL for many years.

Leading financial services company Renewal and expansion of multiyear engagement with expanded scope of AI services. multiyear

Expanded scope of AI services spans risk strategy, regulatory modeling, forecasting, collections, and fraud. EXL will also design and deliver the company's first-ever governance framework for generative AI models.

Sonos Collaboration with AWS to deploy agentic AI for IT service management workflows.

Collaborated with AWS to deploy agentic AI for Sonos' IT service management workflows.

Risks & headwinds

Impact of new Indian labor codes Q4 FY25 (balance sheet), FY26 (EPS dilution)

one-time increase of $10.3 million in our defined benefit liability in Q4 2025; prospective increase in employee costs for the year, resulting in an approximately $0.02 to $0.03 dilution to adjusted EPS in 2026.

Mitigation:incorporated in our guidance for 2026.

Talent constraint for data and AI-led business Ongoing

our data and AI-led business today is constrained for growth due to talent.

Mitigation:working very actively on to make sure that we have adequate talent resources to be able to leverage the full potential of the data and AI piece.

What to watch in Q1 FY26

H2 2026 growth visibility

H2 FY26

Current visibility into the first half of '26 is much better than the second half of '26

Target Development of visibility for H2 2026

Why it matters

Management will update guidance based on this, impacting full-year performance.

at this point of time, clearly, the visibility into the first half of '26 is much better than the second half of '26, just because of the timing perspective... we're going to wait and see how the visibility develops in the second half of the year. And based on that, we will update our guidance accordingly.

Find out whether EXLS delivers this. Inve re-checks your case every morning.

Q&A highlights

Is the accelerated client decision-making due to recent AI news flow (Anthropic, agentic solutions), or other factors?

Rohit Kapoor confirmed accelerated decision-making, noting a shift from proof-of-concepts to scaled enterprise AI adoption. He highlighted a focus shift from cost takeout to growth, making the environment more active for EXL.

“There's also a change in terms of shifting the focus from a cost takeout to growth. And I think using AI for growth allows companies to be a lot more competitive and to be able to build up their businesses.”

asked by Puneet Jain · answered by Rohit Kapoor

2 min read 6 chapters

Detailed narrative

AI-led Growth and Strategic Advantage

EXL's data and AI-led revenue grew 21% YoY, now comprising 57% of total revenue, highlighting a successful pivot. The company positions itself as a trusted partner orchestrating enterprise workflows and making AI real, particularly in complex, data-intensive, and regulated industries. This integrated approach, combining domain expertise, data mastery, and AI application, differentiates EXL from traditional service providers and new tech entrants.

Market Opportunity and Client Adoption

The market is seeing accelerated decision-making for AI adoption, shifting focus from cost takeout to growth. Clients are increasingly seeking partners who can deliver tangible business outcomes and ROI from AI implementations, a role EXL claims to fulfill effectively. This trend is driving significant client wins, with Q4 2025 dollar volume of wins more than double any other quarter in the year.

Segment Performance Highlights

Healthcare and Life Sciences was the fastest-growing segment at 26% YoY, driven by demand for data and AI solutions and payment services. Insurance, the largest vertical, grew 7% YoY, with a notable multiyear enterprise transformation win. Banking, Capital Markets, and Diversified Industries grew 11% YoY, focusing on risk strategy, regulatory modeling, and generative AI governance.

EXLdata.ai and Platform Innovation

EXL launched EXLdata.ai, an agentic Data Solutions suite, which is gaining strong market traction by helping clients establish robust data foundations for AI. Recent wins include modernizing a fintech's tech stack and creating a centralized governed contract repository for a healthcare payer. Additionally, EXL embedded new AI agents into its life and annuities platform, automating complex tasks for insurers.

Ecosystem Partnerships and Talent Development

EXL expanded co-innovation with hyperscalers like AWS, Google, Microsoft, and NVIDIA, with 16 solutions now available on marketplaces. The company is also building an "AI native workforce" through training, certifications, and internal innovation programs like Idea Tank, which generated over 11,000 employee ideas.

Financial Strength and Capital Allocation

EXL reported strong full-year 2025 financial performance with 14% revenue growth and 18% adjusted EPS growth. The balance sheet remains strong with $331 million in cash and short-term investments, and a net cash position of $32 million. The Board authorized a new $500 million common stock repurchase program for a two-year period, reflecting confidence in future growth and free cash flow generation.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.