Exlservice ((EXLS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for EXLService Holdings was largely positive, with the company showcasing strong revenue growth and success in data and AI-led segments. However, there were some concerns regarding increased expenses and a slight decline in operating margin, which were addressed during the call.
Significant Revenue Growth
EXLService Holdings reported an impressive revenue of $530 million in Q3 2025, marking a 12% year-over-year increase. This growth underscores the company’s robust financial performance and its ability to capitalize on market opportunities.
Strong Data and AI-Led Revenue
Data and AI-led revenue grew by 18% year-over-year, representing 56% of the total revenue. This highlights EXLService’s leadership in AI-driven solutions and its strategic focus on leveraging data and AI to drive business growth.
Healthcare and Life Sciences Surge
The Healthcare and Life Sciences segment experienced a remarkable 22% year-over-year growth. This surge was driven by the increasing demand for data and AI solutions, positioning EXLService as a key player in this rapidly expanding market.
Launch of EXLdata.ai
The company introduced EXLdata.ai, an agentic AI suite designed to make enterprise data AI-ready. This launch is expected to significantly reduce implementation time, further enhancing the company’s competitive edge in the AI solutions space.
High Client Retention and Recurring Revenue
EXLService boasts more than 75% of its revenue as recurring, providing stability and predictability. The company also reported exceptionally high renewal rates, reflecting strong client satisfaction and loyalty.
Improved Cash Flow
The company generated $233 million in cash flow from operations in the first nine months of the year, up from $163 million in the same period last year. This improvement in cash flow is a positive indicator of the company’s financial health.
Increased SG&A Expenses
SG&A expenses as a percentage of revenue increased by 120 basis points year-over-year to 21.3%. This rise was attributed to investments in front-end sales and marketing, which are crucial for sustaining growth.
Decline in Adjusted Operating Margin
The adjusted operating margin for the quarter was 19.4%, down 50 basis points year-over-year. This decline was due to investments in front-end sales and new solutions, reflecting the company’s commitment to long-term growth.
Forward-Looking Guidance
EXLService Holdings provided a robust forward-looking guidance, raising its full-year revenue and EPS projections. The company expects revenue to range between $2.07 billion and $2.08 billion, with an adjusted EPS between $1.88 and $1.92. The introduction of the EXLdata.ai solution positions the company to capitalize on the rising demand for AI-driven solutions, reinforcing its leadership in embedding AI into client workflows.
In summary, the earnings call for EXLService Holdings highlighted a positive outlook with strong revenue growth and success in data and AI-led segments. Despite concerns over increased expenses and a slight decline in operating margin, the company’s strategic investments and innovative solutions like EXLdata.ai are expected to drive future growth and maintain its competitive edge.