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ExlService Holdings (EXLS)·Q4 2025 Earnings Summary

EXL Beats Q4 Estimates as AI-Driven Data Services Fuel 13% Revenue Growth

February 24, 2026 · by Fintool AI Agent

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EXL Service Holdings delivered a solid Q4 2025, beating both revenue and earnings estimates as the data and AI services provider extended its streak of outperformance to eight consecutive quarters. Revenue grew 12.7% year-over-year to $542.6 million, while adjusted EPS increased 15.0% to $0.50. The company's Board authorized a new $500 million stock repurchase program, signaling confidence in the business trajectory despite broader market headwinds that have pressured the stock this year.

Did EXL Beat Earnings?

Yes — EXL beat on both revenue and adjusted EPS.

MetricActualConsensusSurprise
Revenue$542.6M $532.2M+2.0%
Adjusted EPS$0.50 $0.465+7.5%
GAAP EPS$0.38 —+21.8% YoY

This marks EXL's eighth consecutive quarter of adjusted EPS beats, demonstrating consistent execution across its data and AI services portfolio.

Full Year 2025 Results:

MetricFY 2025FY 2024YoY Growth
Revenue$2.09B $1.84B+13.6%
Adjusted EPS$1.95 $1.65+18.0%
GAAP EPS$1.54 $1.21+28.0%
Adjusted Operating Margin19.5% 19.4%+10 bps
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What Did Management Guide for 2026?

EXL provided FY 2026 guidance reflecting continued confidence in its data and AI positioning:

MetricFY 2026 GuidanceImplied Growth
Revenue$2.275B - $2.315B 9% - 11%
Adjusted EPS$2.14 - $2.19 10% - 12%

Guidance assumptions include USD/INR at 90.0, GBP/USD at 1.34, and USD/PHP at 59.0.

Capital Return: The Board authorized a $500 million stock repurchase program effective February 28, 2026, for a two-year period. CFO Maurizio Nicolelli noted this "represents confidence in our ability to continue our growth trajectory and generate significant free cash flow."

What's Driving the Growth?

Healthcare & Life Sciences: The Standout Performer

Segment Breakdown

Q4 2025 Segment Performance:

SegmentQ4 RevenueYoY GrowthGross Margin
Insurance$185.8M +7.2%36.5%
Healthcare & Life Sciences$142.2M +26.2%44.0%
Banking, Capital Markets & Diversified$122.6M +10.8%38.8%
International Growth Markets$92.0M +8.5%34.3%

Healthcare & Life Sciences stood out with 26.2% YoY growth and the highest gross margin at 44.0%, reflecting strong demand for EXL's data analytics and AI solutions in clinical operations and health plan services.

Strategic Highlights

  • Won 21 new clients in Q4 2025 and 65 new clients for full year 2025
  • Launched EXLdata.ai — a first-of-its-kind agentic AI-native suite of data solutions
  • Insurance fraud platform collaboration announced with Insurance Council of Australia and Shift
  • Named a Leader in ISG Provider Lens for Generative AI Services (Global) and Healthcare Digital Services (US)

CEO Rohit Kapoor emphasized: "EXL's recognized industry expertise and leadership in embedding AI in our clients' businesses are resonating strongly with the market and fueling our growth with new and existing clients."

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How Did the Stock React?

Post-Earnings Reaction: EXLS stock rose +1.05% on earnings day to $28.75, a muted response despite the beat.

Context matters: The stock has been under significant pressure in 2026:

MetricValue
Current Price$28.75
52-Week High$51.31
52-Week Low$27.88
YTD Performance-30.2%
vs. 50-Day MA-26.5% below
vs. 200-Day MA-31.7% below

The stock's YTD decline appears driven by broader concerns around IT services spending and valuation compression in the sector, rather than company-specific issues. The new $500M buyback program may provide support at these depressed levels.

What Changed From Last Quarter?

MetricQ3 2025Q4 2025Change
Revenue$529.6M$542.6M +2.5% QoQ
Adj. Operating Margin19.4%18.8% -60 bps
Adj. EPS$0.48$0.50 +4.2% QoQ
Healthcare Gross Margin43.0%44.0% +100 bps

Key delta: Adjusted operating margin dipped 60 bps sequentially to 18.8%, though this remained flat vs. Q4 2024. Healthcare margin expansion continued, while International Growth Markets saw margin compression from 35.8% to 34.3%.

Historical Beat/Miss Track Record

EXL has delivered consistent execution with 8 consecutive quarters of EPS beats:

QuarterRevenue BeatEPS Beat
Q1 2024+1.1%+3.9%
Q2 2024+0.8%+3.3%
Q3 2024+2.4%+7.3%
Q4 2024+1.2%+6.0%
Q1 2025+2.2%+8.8%
Q2 2025+1.4%+8.2%
Q3 2025+1.4%+3.2%
Q4 2025+2.0%+7.5%

Margin Trends

MetricQ4 2024Q1 2025Q2 2025Q3 2025Q4 2025
Gross Margin38.1%38.6%37.7%38.5%38.6%
Adj. Operating Margin18.8%19.7%19.6%19.4%18.8%
Adj. EBITDA Margin21.4%21.7%21.7%21.6%21.2%

Margins have been stable with slight compression in Q4, likely reflecting seasonal factors and continued investment in AI capabilities.

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The Bottom Line

EXL delivered a clean beat in Q4 2025, extending its streak of execution to 8 straight quarters. The standout was Healthcare & Life Sciences growing 26% with 44% gross margins — a clear indicator of AI-enabled services demand. FY 2026 guidance of 9-11% revenue growth and 10-12% EPS growth remains solid, supported by a new $500M buyback that signals management confidence.

The disconnect: Despite consistent beats, the stock is down 30% YTD and trades near 52-week lows. The valuation compression across IT services has created a situation where EXL trades at a significant discount to its historical multiple. For investors, the question is whether the market is pricing in a growth slowdown that hasn't materialized — or if there's deeper concern about AI-driven disruption to traditional BPO models that EXL has been adept at navigating.

Data sourced from EXL's Q4 2025 8-K filing and earnings press release dated February 24, 2026. Values retrieved from S&P Global where noted.