ExlService: 3 Key Takeaways for Long-Term Investors
The iMerit acquisition gives EXL control over the full AI stack, from data foundation through deployment, a rare vertical integration that protects margins as competition intensifies.
ExlService reported a 20% year-over-year revenue growth to $634 million in its third quarter of 2026. This surge in revenue is primarily driven by clients migrating their routine workflows to artificial intelligence applications, resulting in a stickier base of recurring business. The company's Chairman and Chief Executive Officer, Rohit Kapoor, highlighted that clients are moving beyond early experimentation into full operational deployments of AI.
Three key takeaways from ExlService's management include: first, clients are shifting from experimental to operational AI deployments; second, data and AI-led revenue now accounts for almost two-thirds of EXL's total revenue; and third, ExlService has acquired iMerit to expand its reach into data foundation, model training, and model validation services, enabling the business to manage every phase of enterprise AI adoption.
Maurizio Nicolelli, ExlService's Chief Financial Officer, added that the company has expanded its borrowing capacity to $1 billion through a term loan and revolving line of credit. These funds are earmarked for targeted acquisitions to secure specialized talent and maintain share buybacks. This increased debt capacity allows ExlService to extend its competitive advantage through strategic mergers and acquisitions while continuing to return capital to shareholders under its $500 million share repurchase authorization.
ExlService's organic growth is accelerating across all operating units, leading management to raise full-year financial forecasts. The company's strong third-quarter performance provides confidence for these higher forecasts. The business' deep workflow access, high client retention, and proprietary domain knowledge give it a durable advantage as software automation expands.
Leadership is monitoring deal velocity, contract structure evolution, and disciplined acquisition integration to protect long-term margins. This durable and adaptable business model positions ExlService well for sustaining momentum through the remainder of 2026 and beyond into 2027.
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