What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-24 compared with 2025-02-25 · 520 added, 509 removed, 1493 unchanged (41% of the section changed)

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We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), to allow timely decisions regarding required disclosure.

In connection with the preparation of this Annual Report on Form 10-K, our management carried out an evaluation, under the supervision and with the participation of the CEO and CFO, of the effectiveness and operation of our disclosure controls and procedures as of December 31, 2024.

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disclosure controls and procedures as of December 31, 2025.

Based upon that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures, as of December 31, 2025, were effective.

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During the three months ended December 31, 2025, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Other Information

Rule 10b5-1 Trading Plans

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, except as described below:

Name and Title Character of Trading Arrangement (1)

Date Adopted Duration (2)

Aggregate Number of Shares of Common Stock to be Sold Pursuant to Trading Arrangement

Anita Mahon , Executive Vice President and Business Head, Healthcare

Trading Arrangement November 04, 2024 July 31, 2025 37,817

Ajay Ayyappan ,

Executive Vice President, General Counsel & Corporate Secretary

Trading Arrangement November 12, 2024 May 30, 2025 32,156

(1) Except as indicated by footnote, each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the “Rule”).

(2) Except as indicated by footnote, each trading arrangement permits transactions through and including the earlier to occur of (a) the completion of all sales or (b) the date listed in the table.

Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions upon expiration of the applicable mandatory cooling-off period under the Rule.

During the three months ended December 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Directors, Executive Officers and Corporate Governance

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Exercise/Vesting of

Options, Warrants and Rights* Weighted

Options, Warrants and Rights (1)

Average Exercise

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(1) This includes outstanding options and unvested restricted stock units, which include time-based restricted stock units and performance-based restricted stock units.

This also includes vested time-based restricted stock units and performance-based restricted stock units for which the underlying common stock was not issued as of December 31, 2024.

See Note 23 - Stock-Based Compensation to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data” for further details.

This also includes vested time-based restricted stock units, performance-based restricted stock units and employee stock purchase plan units for which the underlying common stock was not issued as of December 31, 2025.

(2) This includes 5,919,466 and 3,450,130 securities, under the 2025 Omnibus Incentive Plan (assuming performance at target for outstanding performance-based restricted stock units) and 2022 Employee Stock Purchase Plan, respectively.

We incorporate by reference the information responsive to this Item appearing in our Proxy Statement, including under the heading “Principal Stockholders.”

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Certain Relationships and Related Transactions, and Director Independence

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Not applicable.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned hereunto duly authorized.

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Andreas Fibig

/S/ PATRICK GERAGHTY Director February 24, 2026

Patrick Geraghty

/S/ KRISTY PIPES Director February 24, 2026

/S/ NITIN SAHNEY Director February 24, 2026

/S/ JAYNIE M.

STUDENMUND Director February 25, 2025

WILLIAMSON Director February 24, 2026

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INDEX TO EXHIBITS

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1-33089) filed on October 25, 2006).

4.2 Description of Common Stock.

4.2 Description of Common Stock (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K (File No.

1-33089) filed on February 25, 2025).

10.1+ Form of ExlService Holdings, Inc.

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1-33089) filed on July 27, 2023).

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10.15+ Form of Option Agreement (applicable to International Executive Officers) under the 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No.

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10.16+ ExlService Holdings, Inc.

2025 Omnibus Incentive Plan, effective June 17, 2025 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

1-33089) filed on June 17, 2025).

10.17+ Form of Restricted Stock Unit (applicable to CEO) under the 2025 Omnibus Incentive Plan.

10.18+ Form of Restricted Stock Unit (applicable to U.S.

Executive Officers) under the 2025 Omnibus Incentive Plan.

10.19+ Form of Restricted Stock Unit (applicable to International Executive Officers) under the 2025 Omnibus Incentive Plan.

10.20+ Form of Restricted Stock Unit (applicable to Directors) under the 2025 Omnibus Incentive Plan.

10.21+ ExlService Holdings, Inc.

2022 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

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1-33089) filed on March 18, 2024).

10.20+ Offer Letter, effective as of April 1, 2025, between ExlService Holdings, LLC and Anita Mahon.

19.1 ExlService Holdings, Inc.

Securities Trading Policy.

Securities Trading Policy (incorporated by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K (File No.

1-33089) filed on February 25, 2025).

21.1 Subsidiaries of the Company .

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104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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*This exhibit will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section.

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+Indicates management contract or compensatory plan required to be filed as an Exhibit.

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EXLSERVICE HOLDINGS, INC.

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Notes to Consolidated Financial Statements

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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This required extensive audit effort and a high degree of auditor judgment when performing

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audit procedures to audit management’s estimates of transaction price used to recognize revenue and evaluating the results of those procedures.

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We have served as the Company's auditor since 2018.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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February 24, 2026

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EXLSERVICE HOLDINGS, INC.

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See accompanying notes to consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

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Interest expense 18 ( 17,611 ) ( 19,256 ) ( 13,180 )

Other income/(expense), net 6 16,092 10,834 ( 10 )

Other income, net 6 16,054 16,092 10,834

Income before income tax expense and earnings from equity affiliates 315,052 261,347 237,941

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See accompanying notes to consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

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Total comprehensive income $ 225,014 $ 170,615 $ 201,661

(1) These are reclassified to net income and are included in cost of revenues, operating expenses and interest expense, as applicable in the consolidated statements of income.

(2) These are reclassified to net income and are included in other income/(expense), net in the consolidated statements of income.

(1) These are reclassified to net income and are included in revenues, net, cost of revenues, operating expenses and interest expense, as applicable in the consolidated statements of income.

(2) These are reclassified to net income and are included in other income, net in the consolidated statements of income.

(3) These are income tax effects recognized on cash flow hedges, retirement benefits and currency translation adjustments.

See accompanying notes to consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

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Notes Shares Amount Shares Amount

Balance as of January 1, 2022 197,541,700 $ 198 $ 395,584 $ 756,137 $ ( 89,474 ) ( 31,084,290 ) $ ( 369,289 ) $ 693,156

Balance as of December 31, 2022 199,939,880 $ 200 $ 444,948 $ 899,105 $ ( 144,143 ) ( 33,767,660 ) $ ( 441,931 ) $ 758,179

Stock issued against stock-based compensation plans 23 3,470,158 3 4,643 — — — — 4,646

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Acquisition of treasury stock 19 — — — — — ( 4,364,498 ) ( 133,268 ) ( 133,268 )

Other comprehensive loss 15 — — — — ( 54,669 ) — — ( 54,669 )

Excise tax on repurchase of common stock, net of stock issuances 19 — — — — — — ( 218 ) ( 218 )

Other comprehensive income 15 — — — — 17,103 — — 17,103

Net income — — — 184,558 — — — 184,558

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Acquisition of treasury stock 19 — — — — — ( 2,406,700 ) ( 81,790 ) ( 81,790 )

Accelerated share repurchase 5, 19 — — 2,862 — — ( 4,170,517 ) ( 127,862 ) ( 125,000 )

Excise tax on repurchase of common stock, net of stock issuances 19 — — — — — — ( 1,096 ) ( 1,096 )

Other comprehensive income 15 — — — — 17,103 — — 17,103

Other comprehensive loss 15 — — — — ( 27,682 ) — — ( 27,682 )

Net income — — — 198,297 — — — 198,297

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See accompanying notes to consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

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Net cash used for financing activities ( 312,764 ) ( 119,101 ) ( 181,450 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 4,328 ) 2,029 ( 6,060 )

Effect of exchange rate changes 5,878 ( 4,328 ) 2,029

Net increase/(decrease) in cash, cash equivalents and restricted cash ( 5,429 ) 25,997 19,780

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Interest $ 16,958 $ 19,604 $ 13,895

Income taxes $ 106,414 $ 104,882 $ 57,058

Supplemental disclosure of non-cash investing and financing activities:

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See accompanying notes to consolidated financial statements.

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EXLSERVICE HOLDINGS, INC.

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ExlService Holdings, together with its subsidiaries and affiliates (collectively, the “Company”), is a global data and artificial intelligence (“AI”) company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed.

The Company harnesses the power of data, AI, and deep industry knowledge to transform businesses, including the world’s leading corporations in industries including insurance, healthcare, banking and capital markets, retail, communications and media, and energy and infrastructure, among others.

The Company’s clients are located principally in the United States of America (“U.S.”) and the United Kingdom (“U.K.”).

The Company harnesses the power of data, AI, and deep industry knowledge to transform businesses, including the world’s leading corporations in industries including insurance, healthcare and life sciences, banking and capital markets, retail, communications and media, and energy and infrastructure, among others.

The Company’s clients are located principally in the United States of America and the United Kingdom.

Summary of Significant Accounting Policies

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Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates.

The significant estimates that affect the consolidated financial statements include, but are not limited to, estimates of the fair value of the identifiable intangible assets and contingent consideration, purchase price allocation, including revenue projections and the discount rate applied within the discounted cash flow model for business acquisitions, credit risk of customers, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, variable consideration in a customer contract, expected recoverability from customers with contingent fee arrangements, estimated costs to complete fixed price contracts, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments and stock-based awards, and useful life of long-lived assets and other intangible assets.

The significant assumptions underneath these estimates include, but are not limited to assumptions to calculate stock-based compensation expense, determine incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, determine lease term to calculate single operating lease cost, determine pattern of

The significant estimates that affect the consolidated financial statements include, but are not limited to, estimates of the contingent consideration, credit risk of customers, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, variable consideration in a customer contract, expected recoverability from customers with contingent fee arrangements, estimated costs to complete fixed price contracts, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments and stock-based awards, and useful life of long-lived assets and other intangible assets.

The significant assumptions underneath these estimates include, but are not limited to assumptions to calculate stock-based compensation expense, determine pattern of generation of economic benefits to calculate depreciation and amortization for long-lived assets and other intangible assets, and recoverability of long-lived assets, goodwill and other intangible assets.

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

generation of economic benefits to calculate depreciation and amortization for long-lived assets and other intangible assets, and recoverability of long-lived assets, goodwill and other intangible assets.

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dollar are translated into U.S.

dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet date.

dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet date and equity items are translated at exchange rates that prevailed on the date of inception of the transaction.

Revenues and expenses are translated into U.S.

dollars at the exchange rates prevailing on the last business day of each month, which approximates the average monthly exchange rate.

Share capital and other equity items are translated at exchange rates that prevailed on the date of inception of the transaction.

Resulting translation adjustments are included in “Accumulated other comprehensive income/(loss)” in the consolidated balance sheets.

(d) Revenue Recognition

Revenue is recognized when services are provided to the Company's customers, in an amount that reflects the consideration which the Company expect to be entitled to in exchange for the services provided.

Revenue is recognized when services are provided to the Company's customers, in an amount that reflects the consideration which the Company expects to be entitled to in exchange for the services provided.

The Company recognizes revenue when it satisfies a performance obligation by providing services to a customer.

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Nature of Services

The Company derives its revenues from digital operations and solutions and analytics services.

The Company provides digital operations and solutions and analytics services helping businesses enhance revenue growth and improve profitability.

The Company earns its revenues by providing data and AI-led solutions and services and digital operations solutions and services to clients.

The Company’s services help businesses achieve higher productivity, cost efficiency and business growth.

Identification of Performance Obligations

The Company identifies performance obligations by evaluating the distinct goods and services promised in a contract with customers.

Type of Contracts and Basis of Recognition

Revenues under time-and-material and transaction based contracts are recognized as the services are performed.

Revenues under time-and-material and transaction based contracts are recognized over time as the services are performed.

When the terms of the client contract specify service level parameters that must be met (such as turnaround time or accuracy), the Company monitors such service level parameters to determine if any service credits or penalties have been incurred.

Revenues are recognized net of any penalties or service credits that are due to a client.

Revenues for the Company’s fixed-price contracts, which include business support services provided on a fixed price basis or implementation of applications or solutions, are recognized considering costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations.

Incurred cost represents work performed, which corresponds with, and thereby reasonably reflects transfer of control to the client.

Revenues for the Company’s fixed-price contracts, which include business support services provided on a fixed price basis or implementation of applications or solutions, are recognized considering costs incurred to date relative to total estimated costs at completion to measure progress towards satisfying the Company’s performance obligations.

Incurred cost represents work performed, and thereby reasonably reflects transfer of control to the client.

The use of this method requires significant judgment to estimate the stage of completion and/or cost required to complete the contracted scope of work, including assumptions and estimates relative to the length of time to complete the project and the nature and complexity of the work to be performed and resources engaged.

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If a change in an estimate results in a projected loss on a project, such loss is recognized in the period in which it is first identified.

Revenue from the Company’s software and related services contracts, which are not significant, are primarily related to annual maintenance renewals or incremental license fees for additional users.

Maintenance revenues are generally recognized on a straight-line basis over the annual contract term.

Fees for incremental license without any associated services are recognized at the point in time upon delivery of the related incremental license.

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

To a lesser extent, certain contracts may include offerings such as sale of licenses, which may be perpetual or subscription-based.

The Company recognizes revenue from distinct perpetual licenses upfront at a point in time when the software is made available to the client, whereas for a combined software license and services performance obligation, revenue is recognized over the period that the services are performed.

Revenue from distinct subscription based licenses is recognized over the period of service performed.

Revenue from any associated maintenance or ongoing support services is recognized over the term of the contract.

Revenue from the Company’s software and platform-enabled solutions and related services contracts, are primarily software license fees, annual maintenance renewals, software subscription or software as a services fees, software implementation and/or customization fees.

Perpetual/distinct licenses with significant standalone functionality are recognized at a point in time when control transfers.

Maintenance/support services revenues are recognized ratably over the contract term.

Subscription or software as a service revenues are recognized over time.

Software implementation and customization revenues are recognized over time as services are performed.

Revenues from software license bundled with services are recognized over time when services are performed.

Revenues from payment integrity services having contingent fee arrangements are recognized by the Company at the point in time when a performance obligation is satisfied, which is when it identifies an overpayment claim.

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Based on guidance on “variable consideration” in Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), the Company uses its historical experience and projections to determine the expected amount of revenue to be recognized based on the expected consideration to be received from its customers.

Any adjustment required due to change in estimates are recorded in the period in which such change is identified.

The estimated amount of revenue to be collected from our customers are presented as contract assets within “Other Current Assets”.

Any adjustment required due to a change in estimates is recorded in the period in which such change is identified.

The estimated amount of revenue to be collected from the Company’s customers is presented as contract assets within “Other Current Assets”.

Modification to Contracts

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Arrangements with Multiple Performance Obligations

The Company’s contracts with customers do not generally bundle different services together except for software and related services contracts, which are not significant, involving implementation services and post contract maintenance services.

In such software and related services contracts, revenue is recognized based upon the transaction price allocated to each performance obligation based on the relative standalone selling price.

The Company’s contracts with customers do not generally bundle different services together except for software and related services contracts, involving implementation services and post contract maintenance services.

As such in multiple performance obligations arrangements, performance obligations are determined and revenue is recognized based on the transaction price allocated to each performance obligation determined using its relative standalone selling price.

Allocation of Transaction Price to Performance Obligations

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The Company believes that the expected value method is most appropriate for determining the variable consideration since the Company has a large number of contracts with a similar nature of transactions/services.

Unbilled Receivables

Unbilled receivables represents revenues recognized for services rendered between the last billing date and the balance sheet date.

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

Unbilled Receivables

Unbilled receivables represents revenues recognized for services rendered between the last billing date and the balance sheet date.

Deferred Revenue and Contract Fulfillment Costs

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Pursuant to the Company’s investment policy, surplus funds are invested in highly-rated debt mutual funds, money market funds and time deposits to reduce its exposure to market risk with regard to these funds.

The Company’s investment in money market funds is considered as cash equivalents.

These investments are accounted for in accordance with the fair value option under ASC Topic 825, Financial Instruments .

The fair value is represented by original cost on the acquisition date and the net asset value (“NAV”) as quoted, at each reporting period and any changes in fair value

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

are included in other income/(expense), net.

The Company’s investment in money market funds is considered as cash equivalents.

These investments are accounted for in accordance with the fair value option under ASC Topic 825, Financial Instruments .

The fair value is represented by original cost on the acquisition date and the net asset value (“NAV”) as quoted, at each reporting period and any changes in fair value are included in other income/(expense), net.

Gain or loss on the disposal of these investments is calculated using the first in, first out (“FIFO”) method and is included in other income/(expense), net.

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(f) Short-Term and Long-Term Investments

The Company’s short-term investments consist of investments in mutual funds and those term deposits with more than three months of original maturity and less than twelve months of remaining maturity as of the reporting date, while long-term investments consist of term deposits with more than twelve months of remaining maturity as of the reporting date and investments in equity affiliate.

The Company’s investments in term deposits with financial institutions are measured and recognized at amortized cost.

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Equipment held under finance leases are capitalized at the commencement of the lease at an amount equal to the lease liability, adjusted for any lease prepayments, initial direct costs and lease incentives, which usually approximate the fair value of the underlying asset.

Expenditures for replacements and improvements are capitalized, if they enhance the production capacity and future benefits whereas the costs of maintenance and repairs are charged to earnings as incurred.

Advances paid towards acquisition of property and equipment and the cost of property and equipment not yet placed in service before the end of the reporting period, net of impairment, if any, are classified as capital work in progress.

Expenditures for replacements and improvements are capitalized, if they enhance the production

EXLSERVICE HOLDINGS, INC.

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capacity and future benefits whereas the costs of maintenance and repairs are charged to earnings as incurred.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets and is presented under “Depreciation and amortization expense” in the consolidated statements of income.

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

The estimated useful life have been disclosed in Note 9 - Property and Equipment to the consolidated financial statements.

The estimated useful life have been disclosed in Note 9 - Property and Equipment, net to the consolidated financial statements.

(i) Software Development Costs

The Company capitalizes certain costs related to the development or enhancements to existing software products to be sold, leased or otherwise marketed and / or used for internal-use.

The Company begins to capitalize costs to develop or enhance software when planning stage efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended.

The Company capitalizes certain costs related to the development of or enhancements to existing internal-use software.

The Company begins to capitalize such costs when planning stage efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended.

Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred and recorded within “General and administrative expenses” in the Company’s consolidated statements of income.

The Company also capitalizes certain costs incurred in connection with developing or obtaining software or technology for sale to customers when the initial design phase is completed and commercial and technological feasibility has been established.

The Company capitalizes costs incurred after technological feasibility is reached but before software is available for general release to customers, which primarily includes coding and testing activities.

Any development cost incurred before technological feasibility is established is expensed as incurred as research and development costs.

Costs incurred on internally developed software not yet ready for its intended use before the end of the reporting period, net of impairment, if any, are classified as capital work in progress.

The Company exercises judgment in determining the point at which various projects may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized.

Annual amortization of internally developed software products meant for sale, lease or otherwise marketing is the greater of the amount computed using the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the software product, generally estimated to be up to 5 years from the date the product became available for use.

Annual amortization of internally developed software products meant for sale, lease or otherwise marketable is the greater of the amount computed using the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the software product, generally estimated to be up to 3 to 5 years from the date the product became available for use.

Annual amortization of internally developed software products meant for internal-use is based on the straight-line method over the estimated useful lives of the internally developed software products.

Amortization of such internally developed software is presented under “Depreciation and amortization expense” in the consolidated statements of income.

The Company also capitalizes certain implementation costs that are incurred when implementing cloud computing services or software-as-a-service arrangements, which primarily include efforts associated with configuration and development activities.

These capitalized costs are reported in "Other current assets" and "Other non-current assets" in the consolidated balance sheets.

Once the service is ready for use, the capitalized costs are expensed over the term of the hosting arrangement and recognized in consolidated statements of income.

(j) Business Combinations, Goodwill and Other Intangible Assets

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Acquisition related costs are expensed as incurred under general and administrative expenses.

In addition, assets acquired and liabilities assumed including uncertain tax positions and tax-related valuation allowances in connection with business combinations are initially estimated as of the acquisition date.

The Company subsequently re-evaluates the assets acquired and liabilities assumed, including additional assets and liabilities identified subsequent to acquisition date, with any adjustments to its preliminary estimates being recorded to goodwill within the measurement period (up to one year from the acquisition date).

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

In addition, assets acquired and liabilities assumed, including uncertain tax positions and tax-related valuation allowances, are initially estimated as of the acquisition date and subsequently re-evaluated, with any measurement-period adjustments (up to one year) recorded to goodwill.

Goodwill represents the cost of the acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased in a business combination.

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The Company examines the carrying value and fair value of the reporting unit that includes goodwill as and when the circumstances warrant, to determine whether there are any impairment losses.

Refer to Note 10 - Business Combinations, Goodwill and Other Intangible Assets to the consolidated financial statements.

The Company performs an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Based on the assessment of events or circumstances, the Company performs a quantitative assessment of goodwill impairment

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Based on the assessment of events or circumstances, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If, based on the quantitative impairment analysis, the carrying value of the goodwill of a reporting unit exceeds the fair value of such goodwill, an impairment loss is recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to that reporting unit.

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Such assets are required to be tested for impairment if the carrying amount of the assets is higher than the future undiscounted net cash flows expected to be generated from the assets.

Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any.

In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available.

The Company derives the required undiscounted cash flow estimates from its historical experience and its internal business plans.

To determine fair value, the Company follows the discounted cash flow approach and uses its internal cash flow estimates discounted at an appropriate discount rate and independent appraisals, as appropriate.

To determine fair value, the Company follows the discounted cash flow approach.

The impairment amount to be recognized is measured as the amount by which the carrying value of the assets exceeds their fair value.

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In the normal course of business, the Company uses derivative instruments to mitigate the exposure from risk of foreign currency and interest rate fluctuations.

The Company enters into foreign currency forward contracts to hedge cash flow risks from forecasted transactions denominated in certain foreign currencies, and interest rate swaps to hedge cash flow risks from its revolving credit facility having variable interest rate obligations.

These contracts adhere to the Company’s treasury operations’ objectives and policies to qualify as cash flow hedges, and are with counterparties that are highly rated financial institutions.

Changes in the fair value of these cash flow hedges are recorded as a component of accumulated other comprehensive income/(loss) (“AOCI”), net of tax.

The resultant foreign exchange gain/(loss) upon settlement of cash flow hedges of forecasted transactions are recorded in the consolidated statements of income along with the underlying hedged item in the same line as part of “Cost of revenues,” “General and administrative expenses,” “Selling and marketing expenses,” and “Depreciation and amortization expense,” as applicable.

The accumulated changes in the fair value of interest rate swaps

EXLSERVICE HOLDINGS, INC.

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recognized in AOCI are reclassified to the consolidated statements of income and are presented as a part of “Interest expense” over the term of the contract.

fluctuations in interest rates on its indebtedness.

These contracts adhere to the Company’s treasury operations’ objectives and policies to qualify as cash flow hedges, and are with counterparties that are highly rated financial institutions.

The Company recognizes derivative instruments and hedging activities as either assets or liabilities in its consolidated balance sheets and measures them at fair value.

Changes in the fair value of these cash flow hedges are recorded as a component of accumulated other comprehensive income/(loss) (“AOCI”), net of tax.

The resultant foreign exchange gain/(loss) upon settlement of cash flow hedges of forecasted transactions are reclassified from AOCI to the consolidated statements of income along with the underlying hedged item in the same line as part of “Revenues, net,” “Cost of revenues,” “General and administrative expenses,” “Selling and marketing expenses,” and “Depreciation and amortization expense,” as applicable.

The accumulated changes in the fair value of interest rate swaps recognized in AOCI are reclassified to the consolidated statements of income and are presented as a part of “Interest expense” over the term of the contract.

The Company evaluates hedge effectiveness of cash flow hedges at the time a contract is entered into as well as on an ongoing basis.

2 unchanged sentences

These derivatives do not qualify as fair value hedges under ASC Topic 815.

Changes in the fair value of these derivatives are recognized in the consolidated statements of income and are included in foreign exchange gain, net.

The Company also uses foreign currency forward contracts designated as net investment hedges to hedge the foreign currency risks related to the Company's investment in foreign subsidiaries.

Fair value changes on these forward contracts and gains and losses on settlement of such forward contracts are recognized in AOCI as part of the foreign currency translation adjustments and are reclassified to consolidated statements of income when a foreign operation is disposed or partially disposed.

Changes in the fair value of these derivatives are recognized in the consolidated statements of income and are included in foreign exchange gain/(loss), net.

All of the assets and liabilities related to the Company’s forward contracts are subject to master netting arrangements with each individual counterparty.

These master netting arrangements generally provide for net settlement of all outstanding contracts with the counterparty in the case of an event of default or a termination event.

The Company has presented all of the assets and liabilities related to these contracts on a gross basis, with no offsets, in its consolidated statements of financial position.

The Company has presented all of the assets and liabilities related to these contracts on a gross basis, with no offsets, in its consolidated balance sheets.

There is no financial collateral (including cash collateral) provided or received by the Company related to these contracts.

The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

(m) Employee Benefits

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The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method.

The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return on plan assets, future compensation increases and attrition rates.

The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so.

The effect of modifications to those assumptions is recorded in other comprehensive income (loss) (“OCI”) and amortized to net periodic benefit cost over the expected remaining period of service of the covered employees using the corridor method.

The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions.

These assumptions may not be within the control of the Company and accordingly it is reasonably possible that these assumptions could change in future periods.

The Company records annual amounts relating to its defined benefit plans using actuarial assumptions such as discount rates, mortality, assumed rates of return on plan assets, future compensation increases and attrition rates.

The Company reviews its assumptions on an annual basis and makes modifications to the assumptions as needed.

The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period.

The interest cost, expected return on plan assets and amortization of actuarial gains/loss, are included in “ Other income/(expense), net.

The interest cost, expected return on plan assets and amortization of actuarial gains/(loss) and prior period service costs, are included in “ Other income/(expense), net.

” Refer to Note 20 - Employee Benefit Plans to the consolidated financial statements.

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The Company recognizes stock-based compensation expense in the consolidated statements of income for awards of equity instruments to employees and non-employee directors based on the grant-date fair value of those awards.

The Company recognizes these compensation costs on straight-line basis over the requisite service period of the award, or to the date on which retirement eligibility is achieved, if shorter.

Forfeitures are accounted when the actual forfeitures occur.

On June 17, 2025, the Company’s stockholders approved the 2025 Omnibus Incentive Plan (the "2025 Plan"), which among other things, reserves 6,800,000 shares (as adjusted under the terms thereof) of the Company’s common stock for grant

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

recognizes these compensation costs on straight-line basis over the requisite service period of the award, or to the date on which retirement eligibility is achieved, if shorter.

Forfeitures are accounted when the actual forfeitures occur.

Under the Company’s 2018 Omnibus Incentive Plan (the “2018 Plan”), which was adopted by the Company's stockholders on June 15, 2018, which replaces and supersedes the 2015 Amendment and Restatement of the Company’s 2006 Omnibus Award Plan (the “Prior Plan”) and is effective upon the date approved by the Company’s stockholders, the Company grants performance-based restricted stock units (“PRSU”) to executive officers and other specified employees.

Generally, the Company grants PRSUs that cliff vest based on an aggregated revenue target (“PU”) for a three-year period, and PRSUs that are based on market conditions (“MU”) and cliff vest upon meeting or exceeding the Company's total shareholder return relative to a group of peer companies specified under the 2018 Plan, and are measured over a three-year performance period.

of awards under the 2025 Plan, at which time new awards under the 2018 Omnibus Incentive Plan (the "2018 Plan") were not permitted to be made, but outstanding awards under the 2018 Plan will continued to be governed by the terms thereof.

Under the Company’s Plans (the “2025 Plan and the 2018 Plan”), the Company grants performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees.

Generally, the Company grants PRSUs that cliff vest based on an aggregated revenue target (“PU”) for a three-year period, and PRSUs that are based on market conditions (“MU”) and cliff vest upon meeting or exceeding the Company's total shareholder return relative to a group of peer companies specified under the Plans, and are measured over a three-year performance period.

The award recipient may earn up to 200 % of the PRSUs granted based on the actual achievement of the respective targets.

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Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which the applicable temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates or tax status is recognized in the statements of income in the period in which the change is identified.

The effect on deferred tax assets and liabilities of a change in tax rates or tax status is recognized in the consolidated statements of income in the period in which the change is identified.

The Company releases (reclassifies) the tax effects from AOCI to the consolidated statements of income at the time of settlement of cash flows hedges and amortization of deferred actuarial gain/(loss) on retirement benefits.

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However, the Company continues to indefinitely reinvest earnings from its controlled foreign corporation subsidiaries and has not recorded deferred tax liabilities for such earnings.

The Company recognizes the tax effects of Global Intangible Low-Taxed Income of certain foreign subsidiaries as a period cost.

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

The Company recognizes the tax effects of Global Intangible Low-Taxed Income of certain foreign subsidiaries as a period cost.

(p) Concentration of Credit Risk in Financial Instruments

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, time deposits, mutual fund investments, accounts receivable and derivative financial instruments.

By their nature, all such financial instruments involve risks including the credit risks of non-performance by counterparties.

Pursuant to the Company’s investment policy, surplus funds are maintained as cash equivalents and short-term investments, and are invested in highly-rated mutual funds, money market funds and time deposits, placed with highly rated financial institutions to reduce its exposure to market risk with regard to these funds.

The Company’s exposure to credit risk on account receivable is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customer s.

To mitigate this risk the Company evaluates the creditworthiness of its customers in conjunction with its revenue recognition processes as well as through its ongoing collectability assessment processes for accounts receivable.

The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Company’s exposure to credit risk on account receivable is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers .

To mitigate this risk, the Company conducts ongoing credit evaluations of its customers.

(q) Fair value measurements

ASC Topic 820, Fair Value Measurements and Disclosures defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability.

The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability as against assumptions specific to the entity.

In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk.

In accordance with ASC Topic 820, Fair Value Measurements , the Company calculates fair value based on assumptions that market participants would use in pricing the asset or liability, rather than entity specific assumptions.

The fair value hierarchy consists of the following three levels:

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• Level III — Instruments whose significant value drivers are unobservable.

The Company determines if an arrangement is a lease at inception of the contract.

The Company’s assessment is based on whether:

(1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset.

A lease is classified as a finance lease if any one of the following criteria are met:

(1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset.

The Company determines if an arrangement contains a lease at the inception of the contract by assessing whether there is an identified asset and whether the Company has the right to control its use.

At the lease commencement date, the Company classifies the lease as either an operating lease or a finance lease, based on the terms of the arrangement.

Operating leases are presented within “Operating lease right-of-use assets,” “Current portion of operating lease liabilities” and “Operating lease liabilities, less current portion” in the Company's consolidated balance sheets.

Long-lived assets underlying finance leases are presented within “Property and equipment” and the current and non-current portion of finance lease liabilities are presented within “Accrued expenses and other current liabilities - others” and “other non-current liabilities - others,” respectively, in the Company's consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement.

Long-lived assets underlying finance leases are presented within “Property and equipment, net” and the current and non-current portion of finance lease liabilities are presented within “Accrued expenses and other current liabilities - others” and “other non-current liabilities - others,” respectively, in the Company's consolidated balance sheets.

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement.

Lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

3 unchanged sentences

Lease terms includes the effects of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise that option.

Lease expense for operating lease arrangements is recognized on a

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

straight-line basis over the lease term reflecting single operating lease cost.

Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single operating lease cost.

The Company evaluates lease agreements to determine lease and non-lease components, which are accounted for separately.

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Lease payments include payments for common area maintenance, utilities such as electricity, heating and water, among others, and property taxes, and other similar payments paid to the landlord, which are treated as non-lease component.

The Company accounts for lease-related concessions in accordance with guidance in Topic 842, Leases , to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted for as a lease modification.

The Company accounts for a modification as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract.

Modifications which are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date.

Upon modification, the Company remeasures the lease liability to reflect changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an adjustment to the ROU assets.

However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining amount of the remeasurement is recognized as an expense in consolidated statements of income.

The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

(s) Earnings per share

5 unchanged sentences

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recognized when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.

A disclosure for a contingent liability is made when there is a possible obligation that may require an outflow of resources.

When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Legal costs incurred in connection with such liabilities are expensed as incurred.

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(u) Recent Accounting Pronouncements

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-06, Disclosure Improvements :

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .

This ASU modifies the disclosure or presentation requirements of a variety of Topics in the Codification.

Certain of the amendments represent clarifications to or technical corrections of the current requirements.

For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

The amendments in this ASU should be applied prospectively.

For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

The Company will continue to monitor for SEC action, and plan accordingly for adoption.

In December 2023, FASB issued ASU No.

2023-09, Income Taxes (“Accounting Standards Codification (“ASC”) Topic 740”) , Improvements to Income Tax Disclosures.

This ASU expands disclosures relating to the entity’s income tax rate reconciliation, income taxes paid and certain other disclosures related to income taxes.

The ASU will be effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In November 2024, FASB issued ASU No.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income (“ASC Topic 220”):

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This ASU improves disclosures relating to the disaggregation of income statement expenses, requires additional disclosures about the nature of expenses in commonly presented financial statement captions on an annual and interim basis for all public business entities.

The ASU will be effective for annual periods beginning after December 15, 2026, with early adoption permitted.

The ASU will be effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (“ASC Topic 326”):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

This ASU provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606.

The ASU will be effective for annual reporting periods beginning after December 15, 2025, including interim periods within those years, with early adoption permitted.

The Company is currently evaluating the impact of this ASU and does not expect it to have a material effect on the consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40).

This ASU enhances the guidance for internal-use software development costs by removing references to project stages and simplifying the criteria for when capitalization of software development costs shall begin.

The ASU will be effective for annual reporting periods beginning after December 15, 2027, including interim periods within those years, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In December 2025, the FASB issued ASU No.

2025-10, Government Grants (“ASC Topic 832”):

Accounting for Government Grants Received by Business Entities.

This ASU provides authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants for business entities, creating a framework that previously did not exist under U.S.

The ASU will be effective for annual reporting periods beginning after December 15, 2028, including interim periods within those years, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (“ASC Topic 270”):

Narrow-Scope Improvements.

This ASU provides a comprehensive list of interim disclosures that are required by U.S.

GAAP and incorporates disclosure principle of material events or changes occurred since the prior year-end.

The ASU will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

(v) Recently Adopted and Applicable Accounting Pronouncements

In November 2023, FASB issued ASU No.

2023-07, Segment Reporting (“ASC Topic 280”):

Improvements to Reportable Segment Disclosures .

This ASU improves reportable segment disclosure requirements for all public entities by requiring disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss and other segment items.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company has adopted this ASU, the impact of which is reflected in Note 3 - Segment and Geographical Information to the consolidated financial statements.

In March 2024, FASB issued ASU No.

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The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In March 2024, FASB issued ASU No.

2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements .

This ASU contains amendments to the ASC that remove references to various FASB Concepts Statements.

The ASU will be effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company has early adopted this ASU beginning January 1, 2024.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

Segment and Geographical Information

The Company is a provider of data analytics and digital operations and solutions.

The Company manages and reports financial information through its four reportable segments:

Insurance, Healthcare, Analytics and Emerging Business, which reflects how management reviews financial information and makes operating decisions.

These business units develop client-specific solutions, build capabilities, maintain a unified go-to-market approach and are integrally responsible for service delivery, customer satisfaction, growth and profitability.

The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker ("CODM").

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-09, Income Taxes (“Accounting Standards Codification (“ASC”) Topic 740”), Improvements to Income Tax Disclosures.

This ASU expands disclosures relating to the entity’s income tax rate reconciliation, income taxes paid and certain other disclosures related to income taxes.

The ASU is effective for annual periods beginning after December 15, 2024.

The Company has adopted the disclosure requirements on a prospective basis, effective for the year ended December 31, 2025.

Refer to Note 22 - Income Taxes to the consolidated financial statements for further details.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Segment Information

The Company is a provider of data and AI-led solutions and services and digital operations solutions and services in an integrated manner for clients across industry verticals.

In the first quarter of 2025, the Company implemented operational and structural changes to accelerate the execution of Company’s data and AI strategy and align with how the Company’s Chief Operating Decision Maker (“CODM”) reviews financial information and makes operating decisions.

This new operating model comprises of Industry Market Units (“IMUs”) to focus on delivering higher value to clients leveraging full suite of capabilities;

and Strategic Growth Units to focus on rapidly advancing the capabilities specific to various industries and client needs.

Consequently, the Company realigned its reportable segments to the IMUs as follows:

• Healthcare and Life Sciences,

• Banking, Capital Markets and Diversified Industries,

• International Growth Markets

The primary changes in the new reportable segments reflect 1) the integration of the former Analytics reportable segment as a core capability within each of the IMUs, ensuring alignment with the specialized needs of clients across IMUs, 2) the reorganization of the former Emerging Business reportable segment into a Banking, Capital Markets and Diversified Industries reportable segment, excluding Life Sciences, which is now a part of the new Healthcare and Life Sciences reportable segment, and 3) the formation of International Growth Markets as a separate IMU to represent all services and solutions offerings to clients in the United Kingdom, Europe, Middle East, Asia-Pacific and South Africa geographies across all industry verticals.

The International Growth Markets IMU is helping the Company strategically expand its footprint in markets outside of North America and drive focus on offerings and expansion in those markets in new and existing clients

In addition, revenues by service type are now presented as data and AI-led solutions and services and digital operations solutions and services.

Revenues attributable to geographical regions are now presented as North America (including the United States, Canada and Mexico), the United Kingdom & Europe, and the Rest of World.

The Company has recast segment disclosures for the prior periods presented herein to conform to the new segment structure.

This change in segment presentation does not affect the Company’s consolidated statements of income, balance sheets or statements of cash flows.

The Company’s Chief Executive Officer has been identified as the CODM.

The CODM generally reviews financial information such as revenues, cost of revenues and gross profit to allocate an overall budget and measure segment performance.

The CODM uses revenue, cost of revenues and gross profit for each segment predominantly in the annual budgeting and forecasting process.

The CODM considers budget-to-actual variances on a quarterly basis for making decisions about the allocation of operating and capital resources to each segment.

The CODM also uses segment gross profit for evaluating pricing strategy and performance of each individual segment.

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

The August 2024 acquisition of Incandescent Technologies, Inc.

(“ITI Data”) is included in the Analytics reportable segment.

Refer to Note 10 - Business Combinations, Goodwill and Other Intangible Assets to the consolidated financial statements for further details.

Revenues and cost of revenues for the years ended December 31, 2024, 2023 and 2022, respectively, for each of the reportable segments, are as follows:

Revenues, net and cost of revenues for the years ended December 31, 2025, 2024 and 2023, respectively, for each of the reportable segments, are as follows:

Year ended December 31, 2025

Insurance Healthcare Emerging Business Analytics Total

Insurance Healthcare and Life Sciences Banking, Capital Markets and Diversified Industries International Growth Markets Total

Revenues, net $ 710,575 $ 532,584 $ 482,356 $ 362,164 $ 2,087,679

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Employee costs 380,703 249,119 260,234 193,270 1,083,326

320,335 63,597 147,316 416,293 947,541

Infrastructure and technology costs 54,310 28,943 25,952 34,002 143,207

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Operating expenses 487,326

Income from operations 313,750

Foreign exchange gain, net, interest expense and other income, net 1,302

Income tax expense 62,936

Loss from equity-method investment ( 114 )

Net income $ 198,297

Income before income tax expense and earnings from equity affiliates $ 315,052

(1) Exclusive of depreciation and amortization expense.

(2) Employee costs include restructuring costs of $ 607 , $ 16 , $ 73 and $ 2,382 for Insurance, Healthcare, Emerging Business and Analytics segments respectively.

Refer to Note 26 – Restructuring Costs to the consolidated financial statements for further details.

(3) Other costs primarily include travel and entertainment costs and direct expenses related to lead generation and direct marketing business which are a part of analytics business segment.

(2) Other costs primarily include travel and entertainment costs and other direct pass-through expenses related to client contracts for the Company’s direct marketing business.

Year ended December 31, 2024

Insurance Healthcare Emerging Business Analytics Total

Insurance Healthcare and Life Sciences Banking, Capital Markets and Diversified Industries International Growth Markets Total

Revenues, net $ 656,419 $ 430,679 $ 426,716 $ 324,558 $ 1,838,372

1 unchanged sentence

Employee costs (2)

337,483 198,957 236,361 174,740 947,541

Infrastructure and technology costs 49,349 25,230 21,809 30,471 126,859

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Operating expenses 427,393

Income from operations 263,620

Foreign exchange gain, net, interest expense and other income, net ( 2,273 )

Income tax expense 53,536

Gain from equity-method investment 153

Net income $ 184,558

Income before income tax expense and earnings from equity affiliates $ 261,347

(1) Exclusive of depreciation and amortization expense.

(2) Employee costs include restructuring costs of $ 782 , $ 267 , $ 1,050 and $ 979 for Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries and International Growth Markets, respectively.

Refer to Note 26 – Restructuring Costs to the consolidated financial statements for further details.

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

(2) Other costs primarily include travel and entertainment costs and direct expenses related to lead generation and direct marketing business which are a part of analytics business segment.

(3) Other costs primarily include travel and entertainment costs and other direct pass-through expenses related to client contracts for the Company’s direct marketing business.

Year ended December 31, 2023

Insurance Healthcare Emerging Business Analytics Total

Insurance Healthcare and Life Sciences Banking, Capital Markets and Diversified Industries International Growth Markets Total

Revenues, net $ 586,403 $ 366,392 $ 411,828 $ 266,045 $ 1,630,668

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Operating expenses 369,011

Foreign exchange gain, net, interest expense and other expense, net ( 2,063 )

Income tax expense 47,565

Gain from equity-method investment 434

Net income $ 142,968

Income from operations 238,755

Foreign exchange gain, net, interest expense and other income, net ( 814 )

Income before income tax expense and earnings from equity affiliates $ 237,941

(1) Exclusive of depreciation and amortization expense.

(2) Other costs primarily include travel and entertainment costs and direct expenses related to lead generation and direct marketing business which are a part of analytics business segment.

(2) Other costs primarily include travel and entertainment costs and other direct pass-through expenses related to client contracts for the Company’s direct marketing business.

Revenues, net by service type, were as follows:

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2025 2024 2023

Digital operations and solutions (1)

Data and AI-led (1)

$ 1,155,342 $ 979,731 $ 834,737

Analytics services 796,198 729,127 647,351

Digital operations (2)

932,337 858,641 795,931

Revenues, net $ 2,087,679 $ 1,838,372 $ 1,630,668

(1) Digital operations and solutions include revenues of the Company’s Insurance, Healthcare and Emerging Business reportable segments.

Refer to the reportable segment disclosure above.

(1) Data and AI-led revenue comes from AI-powered solutions and services in which the Company embeds data and AI into client workflows, leveraging the Company’s depth of domain knowledge, analytics, data management and digital engineering expertise.

Company’s digital and AI capabilities that drive data and technology-led transformation for the clients include generative AI, reinforcement learning, hyper automation, cloud data management, conversational AI, robotics, enterprise architecture development, integration platform as a service and AI for operations.

(2) Digital operations revenue comes from the technology-enabled managed services that blend Company’s deep domain expertise with industry-specific solutions and services that help clients run business functions with enhanced productivity, greater speed and improved accuracy.

The Company applies deep industry expertise and tailored technology—whether its proprietary technology or client technology—to solve complex challenges and drive measurable outcomes.

These digital operations deployments form the foundation for future client transformation opportunities to infuse AI into client workflows and unlock even greater value.

All four reportable segments of the Company include revenues from both data and AI-led solutions and services and digital operations solutions and services.

EXLSERVICE HOLDINGS, INC.

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(In thousands, except per share amount and share count)

The Company attributes the revenues to regions based upon the location of its customers.

The Company attributes revenues based on geographical markets where the customer operations being served by it are located.

Year ended December 31,

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Revenues, net

The United States $ 1,518,894 $ 1,370,707 $ 1,213,477

Non-United States

The United Kingdom 215,958 177,479 134,630

North America $ 1,725,612 $ 1,513,812 $ 1,364,449

United Kingdom & Europe 307,305 272,530 226,757

Rest of World 54,762 52,030 39,462

Total Non-United States 319,478 259,961 198,567

Revenues, net $ 2,087,679 $ 1,838,372 $ 1,630,668

Revenues, net by industry verticals, were as follows:

Year ended December 31,

2025 2024 2023

Insurance $ 829,899 $ 767,311 $ 672,869

Healthcare and Life Sciences 533,542 431,790 367,340

Banking, Capital Markets and Diversified Industries 724,238 639,271 590,459

Revenues, net $ 2,087,679 $ 1,838,372 $ 1,630,668

Long-lived assets by geographic area, which consist of property and equipment, net and operating lease ROU assets were as follows:

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India $ 63,999 $ 63,040

The United States 52,510 61,592

North America 60,575 52,510

The Philippines 36,480 25,881

2 unchanged sentences

Long-lived assets $ 209,232 $ 170,621

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Revenues, net and Accounts Receivable, net

Refer to Note 3 - Segment and Geographical Information to the consolidated financial statements for revenues disaggregated by reportable segments and geography.

Refer to Note 3 - Segment Information to the consolidated financial statements for revenues disaggregated by reportable segments, service type, geography and industry verticals.

Contract balances

8 unchanged sentences

The Company has accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers and considers no performance risk associated with its unbilled receivables.

Contract assets as of December 31, 2024, includes receivables of $ 33,472 from our payment integrity services.

Contract assets as of December 31, 2025 and 2024, includes receivables of $ 24,849 and $ 33,472 , respectively, from payment integrity services.

There are no performance risks associated with these contract assets.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

There were no significant cumulative catch-up impact or impairment related to contract assets as of December 31, 2025 and 2024.

15 unchanged sentences

There was no significant impairment for contract acquisition and contract fulfillment costs as of December 31, 2025 and 2024.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Allowance for expected credit losses

11 unchanged sentences

Closing balance $ 2,875 $ 3,528

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Customer and credit risk concentration

8 unchanged sentences

Net income $ 251,019 $ 198,297 $ 184,558

Denominators:

Basic weighted average common shares outstanding 161,028,312 162,718,840 166,341,213

5 unchanged sentences

Weighted average potentially dilutive shares considered anti-dilutive and not included in computing diluted earnings per share 786,093 2,073,990 1,628,932

On March 15, 2024, the Company entered into a master confirmation (the “Master Accelerated Share Repurchase Confirmation”) and a supplemental confirmation (together with the Master Accelerated Share Repurchase Confirmation, the “2024 ASR Agreement”), with Citibank, N.A.

In March 2024, the Company entered into a master confirmation (the “Master Accelerated Share Repurchase Confirmation”) and a supplemental confirmation (together, the “2024 ASR Agreement”), with Citibank, N.A.

(“Citibank”).

Refer to Note 19 - Capital Structure to the consolidated financial statements for further details.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

July 29, 2025, the Company entered into a new supplemental confirmation to the prior Master Accelerated Share Repurchase Confirmation (together, the “2025 ASR Agreement”).

During the year ended December 31, 2025, the Company recorded the initial delivery and final settlement of shares in treasury stock, which resulted in an immediate reduction of its outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Other Income/(Expense), Net

Other income/(expense), net consists of the following:

The Company privately repurchased shares from Orogen Echo LLC (an affiliate of The Orogen Group LLC, hereafter referred to as “Orogen”) under a Stock Purchase Agreement dated December 15, 2025, which also resulted in an immediate reduction of its outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Refer to Note 19 - Capital Structure to the consolidated financial statements for further details.

Other Income, Net

Other income, net consists of the following:

Year ended December 31,

5 unchanged sentences

Others, net 371 ( 80 ) ( 306 )

Other income/(expense), net $ 16,092 $ 10,834 $ ( 10 )

Other income, net $ 16,054 $ 16,092 $ 10,834

(1) Refer to Note 16 - Fair Value Measurements to the consolidated financial statements for further details.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Cash, Cash Equivalents and Restricted Cash

For the purposes of statements of cash flows, cash, cash equivalents and restricted cash consist of the following:

For the purposes of consolidated statements of cash flows, cash, cash equivalents and restricted cash consist of the following:

December 31, 2025 December 31, 2024 December 31, 2023

8 unchanged sentences

(2) Restricted cash (non-current) represents deposits with banks against bank guarantees issued through banks in favor of relevant statutory authorities for equipment imports, deposits for obtaining indirect tax registrations and for demands against pending income tax and value added tax (“VAT”) assessments.

These deposits with banks will mature one year after the balance sheet date.

Due to the associated restrictions, these deposits with banks are anticipated to mature one year after the balance sheet date.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Investments consist of the following:

3 unchanged sentences

Term deposits 52,492 78,972

Total Short-term investments $ 187,223 $ 153,881

Short-term investments $ 182,041 $ 187,223

Long-term investments

1 unchanged sentence

Investment in equity affiliate 5,572 4,677

Total Long-term investments $ 13,972 $ 4,430

Long-term investments $ 8,198 $ 13,972

Refer to Note 16 - Fair Value Measurements to the consolidated financial statements for further details.

3 unchanged sentences

(In thousands, except per share amount and share count)

Property and Equipment

Property and Equipment, net

Property and equipment consists of the following:

20 unchanged sentences

Motor vehicles 2,944 2,208

Accumulated depreciation ( 1,556 ) ( 1,332 )

Accumulated amortization ( 1,494 ) ( 1,556 )

$ 2,033 $ 1,712

5 unchanged sentences

Depreciation and amortization expense $ 45,944 $ 41,589 $ 35,812

Internally developed software costs included in property and equipment was as follows:

Internally developed software costs included in property and equipment were as follows:

December 31, 2025 December 31, 2024

10 unchanged sentences

Amortization expense $ 13,403 $ 12,849 $ 9,282

During the years ended December 31, 2024 and 2023, the Company performed an impairment test of its capitalized software for recoverability and determined that the carrying values of certain software were not fully recoverable.

The Company recorded impairment charges amounting to $ 1,187 and $ nil for the years ended December 31, 2024 and 2023, respectively under “ Depreciation and amortization ” expense in the consolidated statements of income.

Business Combinations, Goodwill and Other Intangible Assets

Incandescent Technologies, Inc.

On August 1, 2024, the Company, through its wholly owned subsidiary Clairvoyant AI, Inc., completed the acquisition of ITI Data, a Nebraska corporation, pursuant to an equity securities purchase agreement dated July 31, 2024 (the "Purchase Agreement").

The Company purchased 100 % of the issued and outstanding equity securities in ITI Data.

The ITI Data acquisition is treated as a stock acquisition for tax purposes.

ITI Data is a data management solutions firm that works with the global banks, financial services and healthcare companies.

It delivers enterprise business solutions for clients processing significant data volumes with complex data management requirements.

The acquisition strengthens the Company’s ability to deliver reliable, data-driven insights to its clients and ultimately drive greater value and innovation across their operations.

The Company’s purchase price allocation to net tangible and intangible assets of ITI Data as at August 1, 2024 is as follows:

Intangible assets $ 12,800

Other assets, net 220

Goodwill 15,335

Total purchase consideration (1)

(1) Includes contingent consideration of $ 2,700 recognized at fair value as of the date of acquisition.

In connection with this acquisition, the Company recorded $ 12,500 in customer-related intangibles which are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated weighted average amortization period of 5 years.

The goodwill recognized represents the acquired capabilities, operating synergies and other benefits expected to result from combining the acquired operations with the Company’s existing operations.

The goodwill has been assigned to the Company’s Analytics reportable segment based upon the Company’s assessment of nature of services rendered by ITI Data.

The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition.

The acquisition did not materially impact the Company's financial position, results of operations or cash flows, and therefore, the Company has not provided any supplemental pro forma results.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

During the years ended December 31, 2025 and 2024, the Company performed an impairment test of its capitalized software for recoverability to determine whether the carrying values of certain software are fully recoverable or not.

The Company recorded impairment charges amounting to $ nil and $ 1,187 for the years ended December 31, 2025 and 2024, respectively under “ Depreciation and amortization ” expense in the consolidated statements of income.

Goodwill and Other Intangible Assets

In the first quarter of 2025, the Company implemented operational and structural changes, which resulted in the realignment of its reporting segments.

Refer to Note 3- Segment Information for further details.

Goodwill has been re-allocated to reporting units based on the relative fair value approach.

The Company tested goodwill for impairment prior to the segment realignment and immediately thereafter, for events and conditions identified in accordance with the guidance in ASC Topic 350, Intangibles- Goodwill and Other .

The fair value of the reporting units was calculated using a discounted cash flow model using estimated future cash flows.

The results of the evaluation demonstrated that the fair value of each reporting unit exceeded its book value as of the date of the segment realignment .

The following table sets forth details of changes in goodwill by reportable segment of the Company:

Insurance Healthcare Emerging Business Analytics Total

Balance as of January 1, 2023 $ 49,929 $ 21,875 $ 47,101 $ 286,732 $ 405,637

Currency translation adjustments 106 ( 3 ) ( 100 ) ( 1 ) 2

Insurance Healthcare and Life Sciences Banking, Capital Markets and Diversified Industries International Growth Markets Total

Balance as of December 31, 2023 $ 73,371 $ 189,352 $ 92,545 $ 50,371 $ 405,639

3 unchanged sentences

Balance as of December 31, 2024 77,099 189,621 100,639 53,028 420,387

During the year ended December 31, 2024, the Company recognized measurement period adjustments, which led to decrease in goodwill in an amount of $ 6,700 .

These adjustments primarily relate to a change in fair value of contingent consideration and customer-related intangible assets and did not have any significant impact on “Depreciation and amortization” expense in the consolidated statements of income for the year ended December 31, 2024.

During 2024 and 2023, the Company performed an assessment to determine whether events or circumstances exist that may lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Currency translation adjustments 170 ( 27 ) ( 486 ) ( 390 ) ( 733 )

Balance as of December 31, 2025 $ 77,269 $ 189,594 $ 100,153 $ 52,638 $ 419,654

The Company performs its annual goodwill impairment assessment during the fourth quarter, to determine whether events or circumstances exist that may lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Based on such assessment, the Company concluded that there was no impairment on goodwill as of December 31, 2025 and 2024.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Other Intangible Assets

13 unchanged sentences

Trade names and trademarks 900 — 900 900 — 900

Total intangible assets $ 114,979 $ ( 65,648 ) $ 49,331 $ 105,238 $ ( 55,074 ) $ 50,164

Other intangible assets $ 115,086 $ ( 78,882 ) $ 36,204 $ 114,979 $ ( 65,648 ) $ 49,331

The amortization expense recognized in the consolidated statements of income was as follows:

2 unchanged sentences

Amortization expense $ 13,140 $ 13,630 $ 14,678

During the years ended December 31, 2024 and 2023, the Company performed an impairment test of its intangible assets for recoverability and determined that the carrying values of certain intangible assets were not fully recoverable.

During the years ended December 31, 2025 and 2024, the Company performed an impairment test of its intangible assets for recoverability to determine whether the carrying values of certain software are fully recoverable or not.

The Company recorded impairment charges amounting to $ nil and $ 429 for the years ended December 31, 2025 and 2024, respectively under “ Depreciation and amortization ” expense in the consolidated statements of income.

Estimated future amortization expense related to finite-lived intangible assets as of December 31, 2025 was as follows:

2026 $ 12,776

Total $ 35,304

EXLSERVICE HOLDINGS, INC.

2 unchanged sentences

(In thousands, except per share amount and share count)

recorded impairment charges amounting to $ 429 and $ nil for the years ended December 31, 2024 and 2023, respectively under “ Depreciation and amortization ” expense in the consolidated statements of income.

Estimated future amortization expense related to finite-lived intangible assets as of December 31, 2024 was as follows:

2025 $ 13,120

Total $ 48,431

Other Current Assets

6 unchanged sentences

Deferred contract fulfillment costs 7,077 4,281

Advances to suppliers 4,009 1,883

Derivative instruments 4,640 1,973

6 unchanged sentences

Lease deposits 7,087 6,495

Contract assets 3,628 6,835

Prepaid expenses 6,761 2,775

Contract assets 4,818 3,628

Derivative instruments 1,424 852

1 unchanged sentence

Other assets $ 61,771 $ 56,085

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Accrued Expenses and Other Current Liabilities

3 unchanged sentences

Payable to statutory authorities 27,222 22,935

Client liabilities 9,711 6,909

Derivative instruments 15,443 7,454

Accrued capital expenditures 2,059 4,134

Client liabilities 12,601 9,711

Contingent consideration 5,000 1,280

Income taxes payable, net 284 1,213

Others 11,012 8,669

Accrued expenses and other current liabilities $ 135,498 $ 113,597

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Other Non-Current Liabilities

9 unchanged sentences

Accumulated Other Comprehensive Income/(Loss)

Accumulated other comprehensive income/(loss) (“AOCI”) consists of actuarial gain/(loss) on retirement benefits and foreign currency translation adjustments.

In addition, the Company enters into foreign currency forward contracts and interest rate swaps, which are designated as cash flow hedges and net investment hedges, as applicable, in accordance with ASC Topic 815, Derivatives and Hedging .

Cumulative changes in the fair values of cash flow hedges are recognized in AOCI on the Company’s consolidated balance sheets.

The fair value changes are reclassified from AOCI to consolidated statements of income upon settlement of foreign currency forward contracts designated as cash flow hedges of a forecast transaction, whereas such changes for interest rate swaps are reclassified over the term of the contract.

Fair value changes related to net investment hedges are included in AOCI and are reclassified to consolidated statements of income when a foreign operation is disposed or partially disposed.

The following table sets forth the changes in AOCI during the years ended December 31, 2025, 2024 and 2023:

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Accumulated Other Comprehensive Income/(Loss)

Currency translation adjustments Unrealized gain/(loss) on cash flow hedges Retirement benefits Total

Balance as of January 1, 2022 $ ( 95,437 ) $ 8,420 $ ( 2,457 ) $ ( 89,474 )

Gains / (losses) recognized during the year ( 47,734 ) ( 27,333 ) 2,574 ( 72,493 )

Balance as of December 31, 2022 $ ( 133,139 ) $ ( 11,303 ) $ 299 $ ( 144,143 )

Gain recognized during the year 652 14,403 1,337 16,392

Reclassification to net income (1)

3 unchanged sentences

Accumulated other comprehensive income/(loss) as of December 31, 2023 $ ( 132,643 ) $ 4,198 $ 1,405 $ ( 127,040 )

Gains recognized during the year 652 14,403 1,337 16,392

Loss recognized during the year ( 17,484 ) ( 14,513 ) ( 1,414 ) ( 33,411 )

Reclassification to net income (1)

2 unchanged sentences

3,129 2,898 435 6,462

Accumulated other comprehensive income/(loss) as of December 31, 2023 $ ( 132,643 ) $ 4,198 $ 1,405 $ ( 127,040 )

Losses recognized during the year ( 17,484 ) ( 14,513 ) ( 1,414 ) ( 33,411 )

Accumulated other comprehensive loss as of December 31, 2024 $ ( 146,998 ) $ ( 7,548 ) $ ( 176 ) $ ( 154,722 )

Loss recognized during the year ( 13,819 ) ( 15,062 ) ( 11,196 ) ( 40,077 )

Reclassification to net income (1)

4 unchanged sentences

(1) Refer to Note 17 - Derivatives and Hedge Accounting and Note 20 - Employee Benefit Plans to the consolidated financial statements for reclassification to net income.

(2) These are income tax effects recognized on cash flow hedges, retirement benefits and currency translation adjustments .

(2) These are income tax effects recognized on currency translation adjustments, cash flow hedges and retirement benefits.

Refer to Note 22 - Income Taxes to the consolidated financial statements.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Fair Value Measurements

13 unchanged sentences

Total $ — $ 25,208 $ 5,000 $ 30,208

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Other Unobservable Inputs

10 unchanged sentences

Total $ — $ 11,817 $ 2,700 $ 14,517

(1) Represents money market funds which are carried at the fair value option under ASC Topic 825 “Financial Instruments”.

(2) Represents those short-term investments which are carried at the fair value option under ASC Topic 825 “Financial Instruments”.

(1) Represents money market funds and short-term investments which are carried at the fair value option under ASC Topic 825 “Financial Instruments” .

(2) Contingent consideration is presented under “Accrued expenses and Other current liabilities” and “Other non-current liabilities”, as applicable in the consolidated balance sheets.

Fair Value of Derivative Financial Instruments :

The Company’s derivative financial instruments consist of foreign currency forward contracts and interest rate swaps.

Fair values for derivative financial instruments are based on independent sources including highly rated financial institutions and are classified as Level 2.

3 unchanged sentences

The Company’s contingent consideration represents a component of the total purchase consideration for business acquisitions.

The measurement is calculated using unobservable inputs based on the Company’s own assessment of achievement of certain performance goals.

The measurement is

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

calculated using unobservable inputs based on the Company’s own assessment of achievement of certain performance goals.

The Company estimated the fair value of the contingent consideration based on the Monte Carlo simulation model.

7 unchanged sentences

During the years ended December 31, 2025 and 2024, there were no transfers among Level 1, Level 2 and Level 3.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Financial Instruments Not Carried at Fair Value :

The Company’s other financial instruments not carried at fair value consist primarily of cash and cash equivalents (except investments in money market funds, as disclosed above), short-term investments (except investments in mutual funds, as disclosed above), restricted cash, accounts receivable, net, long-term investments, accrued capital expenditures, accrued expenses, client liabilities and interest payable on borrowings for which fair values approximate their carrying amounts.

The carrying value of the Company’s outstanding revolving credit facility approximates its fair value because the Company’s interest rate yield is near current market rates for comparable debt instruments.

The carrying value of the Company’s outstanding revolving credit facility and term loan facility approximates its fair value because the Company’s interest rate yield is near current market rates for comparable debt instruments.

Derivatives and Hedge Accounting

The Company uses derivative instruments to mitigate cash flow volatility from risk of fluctuations in foreign currency exchange rates and interest rates.

The Company enters into foreign currency forward contracts to hedge cash flow risks from forecasted revenues and other transactions denominated in certain foreign currencies.

These contracts qualify as cash flow hedges under ASC Topic 815, Derivatives and Hedging , and are with counterparties that are highly rated financial institutions.

3 unchanged sentences

dollar (USD) 1,134,800 984,300

Interest rate swaps (Floating to fixed) denominated in:

The Company estimates that approximately $ 5,693 of derivative losses, net, excluding tax effects, included in AOCI, representing changes in the value of cash flow hedges based on exchange rates prevailing as of December 31, 2024, could be reclassified into earnings within the next twelve months.

dollar (USD) 12,075 —

The Company estimates that approximately $ 10,939 of derivative loss, net, excluding tax effects, included in AOCI, representing changes in the value of cash flow hedges based on exchange rates prevailing as of December 31, 2025, could be reclassified into earnings within the next twelve months.

As of December 31, 2025, the maximum outstanding term of the cash flow hedges was approximately 42 months.

1 unchanged sentence

These foreign currency forward contracts do not qualify as fair value hedges under ASC Topic 815, Derivatives and Hedging .

Changes in the fair value of these financial instruments are recognized in the consolidated statements of income and are included in the foreign exchange gain/(loss) line item.

The Company’s primary exchange rate exposure is with the Indian rupee (INR), the Philippine peso (PHP), the U.K.

pound sterling (GBP) and South African rand (ZAR).

The Company also has exposure to the Colombian peso (COP), the Euro (EUR), the Australian dollar (AUD), the Canadian dollar (CAD) and other local currencies in which it operates.

Changes in the fair value of these financial instruments are recognized in the consolidated statements of income and are included in the foreign exchange gain/(loss), net line item.

EXLSERVICE HOLDINGS, INC.

9 unchanged sentences

Sell AUD 4,917 4,770

Sell ZAR 10,006 150,150

Buy USD 588 —

The following table sets forth the fair value of the foreign currency forward contracts and interest rate swaps and their location on the consolidated balance sheets:

1) This includes $ 1,130 related to USD purchases against sale of CAD 1,545 as of December 31, 2025 and $ 10,006 related to USD purchases against sale of ZAR 188,373 as of December 31, 2024.

The following table sets forth the fair value of the foreign currency forward contracts and their location on the consolidated balance sheets:

Derivatives in cash flow hedging relationships Derivatives not designated as hedging instruments

8 unchanged sentences

2025 2024 2023

Unrealized gain/(loss) recognized in OCI

Unrealized gain/(loss) recognized in other comprehensive income (“OCI”)

Derivatives in cash flow hedging relationships $ ( 15,062 ) $ ( 14,513 ) $ 14,403

11 unchanged sentences

Location in consolidated statements of income where gain/(loss) was reclassified from AOCI

Revenues, net $ 2,087,679 $ ( 2,157 ) $ 1,838,372 $ — $ 1,630,668 $ —

Cost of revenues $ 1,286,603 ( 2,517 ) $ 1,147,359 ( 722 ) $ 1,022,902 ( 5,180 )

9 unchanged sentences

Foreign exchange gain/(loss), net $ 2,859 $ ( 10,715 ) $ 891 $ ( 3,110 ) $ 1,532 $ 296

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

The following tables summarizes the Company’s debt position:

3 unchanged sentences

Unamortized debt issuance costs — ( 114 ) ( 114 ) — ( 114 ) ( 114 )

Total current portion of long-term borrowings — 4,886 4,886 65,000 — 65,000

Current portion of long-term borrowings — 4,886 4,886 — 4,886 4,886

Long-term borrowings 205,000 88,750 293,750 190,000 93,750 283,750

Unamortized debt issuance costs — ( 38 ) ( 38 ) — ( 152 ) ( 152 )

Total long-term borrowings 190,000 93,598 283,598 135,000 — 135,000

Total borrowings $ 190,000 $ 98,484 $ 288,484 $ 200,000 $ — $ 200,000

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Long-term borrowings 205,000 88,712 293,712 190,000 93,598 283,598

Borrowings $ 205,000 $ 93,598 $ 298,598 $ 190,000 $ 98,484 $ 288,484

Unamortized debt issuance costs for the Company’s revolving credit facility of $ 507 and $ 895 as of December 31, 2025 and 2024, respectively, are presented under “Other current assets” and “Other assets,” as applicable, in the consolidated balance sheets.

1 unchanged sentence

The Company held a $ 300,000 revolving credit facility pursuant to its credit agreement (the “Credit Agreement”), dated as of November 21, 2017 with certain lenders and Citibank N.A.

as Administrative Agent, which was amended and restated on April 18, 2022 (the “2022 Credit Agreement”), Among other things, the 2022 Credit Agreement (a) provides for the issuance of new revolving credit commitments such that the aggregate amount of revolving credit commitments available as of April 18, 2022 to the Company is equal to $ 400,000 ;

and (b) extends the maturity date of the revolving credit facility from November 21, 2022 to April 18, 2027.

On August 9, 2024, the Company and each of the Company’s wholly owned material domestic subsidiaries entered into a First Amendment to Amended and Restated Credit Agreement with Citibank, N.A., as Administrative Agent, and certain lenders (the “2024 Credit Agreement”), pursuant to which the parties thereto amended and restated the 2022 Credit Agreement.

Among other things, the 2024 Credit Agreement (a) provides for a $ 100,000 increase to the revolving credit commitments such that the aggregate amount of revolving credit commitments available as of August 9, 2024 to the Company is equal to $ 500,000 ;

and (b) provides for the issuance of a new term loan facility in the aggregate amount of $ 100,000 with an annual prepayment amount of 5 %.

as Administrative Agent.

This agreement was amended and restated in April 2022, followed by the First Amendment to Amended and Restated Credit Agreement in August 2024 (the “2024 Credit Agreement”).

Among other things, the 2024 Credit Agreement increased revolving credit commitments to $ 500,000 and provided a new term loan facility of $ 100,000 with an annual repayment amount of 5 %.

The increased revolving credit facility and the new term loan facility both mature on April 18, 2027.

The 2024 Credit Agreement includes a letter of credit sub facility and is voluntarily pre-payable from time to time without premium or penalty.

Borrowings under the revolving credit facility can be used for working capital and general corporate purposes, including permitted acquisitions.

Borrowings of $ 100,000 under the term loan facility (which was drawn based on adjusted SOFR) were used to repay the borrowings outstanding under the revolving credit facility on August 9, 2024.

Obligations under the 2024 Credit Agreement are guaranteed by the Company’s wholly-owned material domestic subsidiaries and are secured by all or substantially all of the Company’s and its material domestic subsidiaries’ assets.

Under the 2024 Credit Agreement, obligations are guaranteed by the Company’s wholly-owned material domestic subsidiaries and secured by substantially all of the assets of the Company and its material domestic subsidiaries.

The agreement includes a letter of credit sub-facility, permits voluntary prepayments without premium or penalty, and allows borrowings to be used for working capital, general corporate purposes, and permitted acquisitions.

The 2024 Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on the ability to incur indebtedness, create liens, make certain investments, make certain dividends and distributions, enter into, or undertake, certain liquidations, mergers, consolidations or acquisitions and dispose of certain assets or subsidiaries.

In addition, the 2024 Credit Agreement contains a covenant to not permit the interest coverage ratio or the total net leverage ratio for the four consecutive quarter period ending on the last day of each fiscal quarter, to be less than 3.0 to 1.0 or more than 3.5 to 1.0, respectively.

The 2024 Credit Agreement bears interest at a rate equal to specified prime rate (alternate base rate) or adjusted SOFR, plus, in each case, an applicable margin.

The applicable margin on the revolving credit facility is tied to the Company’s total net leverage ratio and ranges from 0 % to 0.75 % per annum on loans pegged to the specified prime rate, and 0.875 % to 1.75 % per annum on loans pegged to the adjusted SOFR.

The applicable margin on the term loan facility is also tied to the Company’s total net leverage ratio and ranges from 0.125 % to 1.00 % per annum on loans pegged to the specified prime rate, and 1.125 % to 2.00 % per annum on loans pegged to the adjusted SOFR.

As of December 31, 2025 and 2024, the Company was in compliance with the financial covenants under the 2024 Credit Agreement.

Under the 2024 Credit Agreement, obligations bear interest at a rate equal to either the specified prime rate (alternate base rate) or the adjusted secured overnight financing rate (SOFR), in each case plus an applicable margin tied to the Company’s total net leverage ratio.

The applicable margin on the revolving credit facility ranges from 0 % to 0.75 % per annum on loans pegged to the specified prime rate and 0.88 % to 1.75 % per annum on loans pegged to the adjusted SOFR, while the margin on the term loan facility ranges from 0.13 % to 1.00 % per annum on loans pegged to the specified prime rate, and 1.13 % to 2.00 % per annum on loans pegged to the adjusted SOFR.

The revolving credit commitments under the 2024 Credit Agreement are subject to a commitment fee which is also tied to the Company’s total net leverage ratio, and ranges from 0.13 % to 0.28 % per annum on the average daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving loans and letter of credit obligations.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

The effective interest rates of the revolving credit facility and the term loan facility are as follows:

3 unchanged sentences

Term loan facility 5.7 % 6.5 % — %

As of December 31, 2024 and 2023, the Company was in compliance with the financial covenants under the 2024 Credit Agreement.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

The maturity profile of the Company’s long-term borrowings, excluding debt issuance costs, outstanding as of December 31, 2025 was as follows:

14 unchanged sentences

Shares repurchased Total consideration Weighted average purchase price per share (1)

Twelve months ended December 31, 2024 303,836 $ 10,266 $ 33.79

Twelve months ended December 31, 2023 237,047 $ 7,853 $ 33.13

Twelve months ended December 31, 2022 164,080 $ 4,121 $ 25.12

Year ended December 31, 2025 229,483 $ 11,089 $ 48.32

Year ended December 31, 2024 303,836 $ 10,266 $ 33.79

Year ended December 31, 2023 237,047 $ 7,853 $ 33.13

(1) The weighted average purchase price per share is based on the closing price of the Company’s common stock on the Nasdaq Global Select Market on the trading day prior to the applicable vesting date of the restricted stock units.

On October 5, 2021, the Company’s board of directors authorized a $ 300,000 (excluding excise tax) common stock repurchase program beginning January 1, 2022 (the “2022 Repurchase Program”), and terminated the 2019 Repurchase Program on December 31, 2021.

On February 26, 2024, the Company’s board of directors authorized a $ 500,000 (excluding excise tax) common stock repurchase program beginning March 1, 2024 (the “2024 Repurchase Program”), and terminated the 2022 Repurchase Program on February 29, 2024.

On March 15, 2024, the Company entered into a 2024 ASR Agreement with Citibank to repurchase shares of its common stock for an aggregate purchase price of $ 125,000 , as part of the Company’s 2024 Repurchase Program.

Upon payment of the aggregate purchase price of $ 125,000 , the Company received an initial delivery of 3,350,084 shares of its common stock at an initial price of $ 29.85 per share, representing 80 % of the aggregate purchase price.

The Company funded the repurchase with available cash on hand and borrowing from its revolving credit facility.

The 2024 ASR Agreement was accounted for as a treasury stock transaction and forward stock purchase agreement indexed to the Company’s common stock.

The forward stock purchase agreement was classified as an equity instrument under ASC Topic 815-40, Contracts in Entity's Own Equity, and

On February 26, 2024, the Company’s board of directors authorized a $ 500,000 (excluding excise tax) common stock repurchase program beginning March 1, 2024 (the “2024 Repurchase Program”), and, on February 29, 2024, terminated the previous repurchase program, which had been effective since the beginning of 2022.

In March 2024, the Company entered into the 2024 ASR Agreement with Citibank to repurchase shares of its common stock for an aggregate purchase price of $ 125,000 under the 2024 Repurchase Program.

The Company received an initial delivery of 3,350,084 shares in March 2024, representing 80 % of the aggregate purchase price, which was recorded in treasury

EXLSERVICE HOLDINGS, INC.

2 unchanged sentences

(In thousands, except per share amount and share count)

deemed to have a fair value of zero at the effective date.

stock, while a prepayment of $ 25,000 was recorded in additional paid-in capital to reflect the pending settlement.

The Company received an additional 820,433 shares upon final settlement in July 2024.

On July 29, 2025, the Company entered into the 2025 ASR Agreement with Citibank to repurchase shares of its common stock for an aggregate purchase price of $ 125,000 , as part of the Company’s 2024 Repurchase Program.

Upon payment of the aggregate purchase price of $ 125,000 , the Company received an initial delivery of 2,302,556 shares of its common stock at an initial price of $ 43.43 per share, representing 80 % of the aggregate purchase price.

The Company funded the repurchase with available cash on hand and borrowing from its revolving credit facility.

The 2025 ASR Agreement was accounted for as a treasury stock transaction and forward stock purchase agreement indexed to the Company’s common stock.

The forward stock purchase agreement was classified as an equity instrument under ASC Topic 815-40, Contracts in Entity's Own Equity , and deemed to have a fair value of zero at the effective date.

The prepayment of $ 25,000 was initially recorded in additional paid-in capital, which reflected the pending settlement of the 2025 ASR Agreement.

Under the terms of the 2025 ASR Agreement, the ultimate number of shares of Common Stock that the Company repurchased was based on the average of the daily volume-weighted average prices of the Common Stock during the term of the 2025 ASR Agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the 2025 ASR Agreement.

On July 19, 2024, upon final settlement of the 2024 ASR Agreement, the Company received 820,433 additional shares of its common stock based on a daily volume-weighted average price of $ 29.97 per share during the term of the 2024 ASR Agreement.

On October 31, 2025, upon final settlement of the 2025 ASR Agreement, the Company received 678,980 additional shares of its common stock based on a daily volume-weighted average price of $ 41.92 per share during the term of the 2025 ASR Agreement.

The additional shares received were recorded as treasury stock at a fair market value of $ 39.10 per share, and $ 1,548 was recorded in additional paid-in capital.

Under the Company’s two repurchase programs, shares may be purchased by the Company from time to time from the open market and through private transactions, or otherwise, as determined by the Company’s management as market conditions warrant.

Under the Company’s repurchase program, shares may be purchased by the Company from time to time from the open market and through private transactions, or otherwise, as determined by the Company’s management as market conditions warrant.

Repurchases may be discontinued at any time by the management.

The Company purchased shares of its common stock, for a total consideration including commissions but excluding excise tax, under its two repurchase programs, as below:

The Company purchased shares of its common stock, for a total consideration including commissions but excluding excise tax, under its repurchase programs, as below:

Shares repurchased Total consideration Weighted average purchase price per share

Twelve months ended December 31, 2024 6,273,381 $ 196,524 $ 31.33

Twelve months ended December 31, 2023 4,127,451 $ 125,416 $ 30.39

Twelve months ended December 31, 2022 2,519,290 $ 68,521 $ 27.20

Year ended December 31, 2025 5,934,710 $ 253,208 $ 42.67

Year ended December 31, 2024 6,273,381 $ 196,524 $ 31.33

Year ended December 31, 2023 4,127,451 $ 125,416 $ 30.39

On December 15, 2025, the Company repurchased 1,551,970 shares of the Company’s common stock from Orogen for an aggregate purchase price of $ 63,374 , based on a purchase price per share of $ 40.83 , which is the volume weighted average price over the 5 days prior to settlement.

The shares were privately repurchased from Orogen under a Stock Purchase Agreement dated December 15, 2025, which is separate from the Company’s 2024 Repurchase Program.

Repurchased shares have been recorded as treasury shares and will be held until the Company’s board of directors designates that these shares be retired or used for other purposes.

Pursuant to the Inflation Reduction Act, effective January 1, 2023, the Company is required to pay a 1% excise tax on the fair market value of each share of common stock repurchased, net of stock issuances.

The Company recognized excise tax of $ 1,096 and $ 218 on repurchase of common stock as a part of cost of such repurchases for the years ended December 31, 2024 and 2023, respectively.

Pursuant to the Inflation Reduction Act, the Company is required to pay a 1% excise tax on the fair market value of each share of common stock repurchased, net of stock issuances.

The Company recognized excise tax of $ 1,934 and $ 1,096 during the years ended December 31, 2025 and 2024, respectively.

The Company has not paid or declared any cash dividends on its common stock during the years ended December 31, 2025, 2024 and 2023.

The Company’s borrowings under its revolving credit facility could restrict its ability to declare or make any dividends or similar distributions.

The Company’s borrowings under its 2024 Credit Agreement could restrict its ability to declare or make any dividends or similar distributions.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Employee Benefit Plans

9 unchanged sentences

The Company earned a return of approximately 7.0 % per annum on the India Plan for the year ended December 31, 2025.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

The benefit obligation has been measured as of December 31, 2025 and 2024.

7 unchanged sentences

Acquisition adjustments — 398

Actuarial loss/(gain) (1)

1,546 ( 1,166 )

Effect of exchange rate changes ( 845 ) ( 114 )

Actuarial loss (2)

Currency translation adjustments ( 1,530 ) ( 845 )

Projected benefit obligation as of December 31 $ 45,568 $ 29,854

4 unchanged sentences

Benefits paid ( 1,747 ) ( 1,338 )

( 1,338 ) ( 1,343 )

Effect of exchange rate changes ( 555 ) ( 105 )

Currency translation adjustments ( 1,100 ) ( 555 )

Plan assets as of December 31 $ 24,358 $ 19,963

Unfunded status as of December 31 $ 21,210 $ 9,891

Unfunded amount recognized in the consolidated balance sheets

Non-current liability (included under other non-current liabilities) $ 9,555 $ 6,925

Current liability (included under accrued employee costs) 336 178

Total accrued liability $ 9,891 $ 7,103

Amounts recognized in the consolidated balance sheets

Non-current liabilities (included under other non-current liabilities) $ 20,780 $ 9,555

Current liabilities (included under accrued employee costs) 430 336

Total accrued liabilities $ 21,210 $ 9,891

Accumulated benefit obligation as of December 31 $ 29,774 $ 20,181

Plan assets in excess/(shortfall) of accumulated benefit obligation as of December 31 $ ( 218 ) $ 479

(1) During the years ended December 31, 2024 and 2023, actuarial gain was driven by changes in actuarial assumptions, offset by experience adjustments on present value of benefit obligations.

(2) Benefits payments were substantially made through the plan assets during the years ended December 31, 2024 and 2023.

Plan assets in shortfall of accumulated benefit obligation as of December 31 $ 5,416 $ 218

EXLSERVICE HOLDINGS, INC.

2 unchanged sentences

(In thousands, except per share amount and share count)

Components of net periodic benefit costs recognized in consolidated statements of income and actuarial (gain)/loss reclassified from AOCI, were as follows:

(1) Effective November 21, 2025, the Government of India has consolidated multiple existing labor legislations into a unified framework comprising four labor codes collectively referred to as the new “Labor Codes”.

The Labor Codes, amongst other things introduces changes, including a uniform definition of wages.

These legislative changes have resulted in an increase in the projected benefit obligation and the same has been recognized as prior service cost in OCI.

(2) During the years ended December 31, 2025 and 2024, actuarial loss was driven by changes in actuarial assumptions, offset by experience adjustments on present value of benefit obligations.

Components of net periodic benefit costs recognized in consolidated statements of income and retirement benefits reclassified from AOCI, were as follows:

Year ended December 31,

3 unchanged sentences

Expected return on plan assets ( 1,410 ) ( 1,237 ) ( 1,048 )

Amortization of actuarial (gain)/loss, gross of tax ( 602 ) ( 94 ) 592

Net gratuity cost $ 4,142 $ 4,226 $ 4,722

Amortization of actuarial (gain)/loss, gross of tax $ ( 602 ) $ ( 94 ) $ 592

Income tax effects on above 33 ( 74 ) ( 179 )

Amortization of actuarial (gain)/loss, net of tax $ ( 569 ) $ ( 168 ) $ 413

Reclassification of retirement benefits from AOCI:

Amortization of actuarial gain ( 441 ) ( 602 ) ( 94 )

Amortization of prior service cost 306 — —

Net periodic benefit cost $ 6,328 $ 4,142 $ 4,226

Reclassification of retirement benefits from AOCI, gross of tax $ ( 135 ) $ ( 602 ) $ ( 94 )

Income tax effects ( 267 ) 33 ( 74 )

Reclassification of retirement benefits from AOCI, net of tax $ ( 402 ) $ ( 569 ) $ ( 168 )

The components of retirement benefits included in AOCI, excluding tax effects, were as follows:

4 unchanged sentences

Amount recognized in AOCI, excluding tax effects $ ( 12,574 ) $ ( 1,243 ) $ 772

The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were:

The Company estimates that it will make contributions of $ 10,000 during the year ending on December 31, 2026 for the defined benefit plans.

The weighted average actuarial assumptions used to determine benefit obligations and net periodic benefit cost were:

Year ended December 31,

3 unchanged sentences

Expected long-term rate of return on plan assets per annum 7.0 % 7.3 % 7.3 %

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards.

The discount rates are either based on current market yields on government securities or yields on government securities adjusted for a suitable risk premium, if available.

Expected benefit payments during the year ending December 31,

2030 to 2033 $ 12,899

EXLSERVICE HOLDINGS, INC.

2 unchanged sentences

(In thousands, except per share amount and share count)

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards.

The discount rates are either based on current market yields on government securities or yields on government securities adjusted for a suitable risk premium, if available.

Expected benefit payments during the year ending December 31,

2031 to 2035 $ 20,119

The Company maintains several 401(k) plans (the “401(k) Plans”) under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), covering all eligible employees, as defined in the Code as a defined contribution plan.

The Company may make discretionary contributions of up to a maximum of 3.0 % of employee compensation within certain limits.

The Company’s contributions to various defined contribution plans was as follows:

The Company’s contributions to various defined contribution plans were as follows:

Year ended December 31,

2 unchanged sentences

Contributions to the defined contribution plans in foreign subsidiaries of the Company $ 33,544 $ 28,070 $ 23,045

The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates.

The Company finances its use of certain motor vehicles and other equipment under various lease arrangements provided by financial institutions.

The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates, with options to extend or terminate before expiration date.

The Company finances its use of certain motor vehicles, leasehold improvements and other equipment under various lease arrangements provided by financial institutions.

The lease agreements do not contain any covenants to impose any restrictions except for market-standard practice for similar lease arrangements.

The Company had performed an evaluation of its contracts with suppliers in accordance with ASC Topic 842, Leases, and had determined that, except for leases for office facilities, motor vehicles and other equipment as described above, none of the Company’s contracts contain a lease.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Supplemental balance sheet information

9 unchanged sentences

Property and equipment, gross $ 3,527 $ 3,268

Accumulated depreciation ( 1,556 ) ( 1,332 )

Accumulated amortization ( 1,494 ) ( 1,556 )

Property and equipment, net $ 2,033 $ 1,712

2 unchanged sentences

Total finance lease liabilities $ 2,160 $ 1,784

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

The components of lease cost, which are included in the Company’s consolidated statements of income, are as follows:

10 unchanged sentences

(1) Includes short-term leases, which are immaterial.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Supplemental cash flow and other information related to leases are as follows:

17 unchanged sentences

There was no impairment of ROU assets as of December 31, 2025 and 2024.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Maturities of lease liabilities as of December 31, 2025 were as follows:

9 unchanged sentences

Present value of lease liabilities $ 105,024 $ 2,160

Maturities of lease liabilities as of December 31, 2023 were as follows:

Operating Leases Finance Leases

2024 $ 17,806 $ 297

2025 16,878 256

2026 16,220 222

2027 13,712 191

2028 10,132 98

2029 and thereafter 14,018 —

Total lease payments 88,766 1,064

Imputed interest 17,811 260

Present value of lease liabilities $ 70,955 $ 804

The components of income/(loss) before income taxes consist of the following:

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

The components of income before income tax expense consist of the following:

Year ended December 31,

3 unchanged sentences

$ 315,052 $ 261,347 $ 237,941

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

Income tax expense/(benefit) consists of the following:

2 unchanged sentences

Current provision:

Domestic $ 41,230 $ 51,450 $ 43,416

Federal $ 2,047 $ 31,323 $ 32,796

State and local 20,613 9,907 18,654

Foreign 56,131 41,591 33,828

1 unchanged sentence

Deferred provision/(benefit):

Domestic $ ( 19,172 ) $ ( 32,024 ) $ ( 17,624 )

Federal $ ( 8,309 ) $ ( 20,812 ) $ ( 26,079 )

State and local ( 4,462 ) 1,640 ( 5,945 )

Foreign ( 2,292 ) ( 713 ) 282

11 unchanged sentences

Total $ 9,221 $ 6,462 $ ( 4,403 )

The effective income tax rate differs from the amount computed by applying the U.S.

federal statutory income tax rate to income before income taxes approximately as follows:

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

In accordance with the requirements of ASU 2023-09 for the year ended December 31, 2025, the reconciliation of taxes at the federal statutory rate to the income tax expense was as follows:

Amount Percentage

federal statutory tax rate $ 66,097 21.0 %

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects

Statutory tax rate differential 4,422 1.4 %

Statutory tax rate differential ( 5,519 ) ( 1.8 ) %

Statutory tax rate differential 918 0.3 %

Tax incentives ( 4,068 ) ( 1.3 ) %

Other foreign jurisdictions 1,537 0.5 %

Effect of cross-border tax laws

Foreign-derived intangible income ( 7,429 ) ( 2.4 ) %

Others 312 0.1 %

Research and development tax credits ( 4,404 ) ( 1.4 ) %

foreign tax credit ( 4,237 ) ( 1.3 ) %

Non-taxable or non-deductible items

Officers compensation 9,278 2.9 %

Excess tax benefit ( 13,113 ) ( 4.2 ) %

Others 2,072 0.7 %

Changes in unrecognized tax benefits 217 0.1 %

Income tax expense $ 63,728 20.3 %

(1) State and local taxes in New York state and city, Kentucky, Rhode Island, California, and Pennsylvania made up the majority of the tax effect in this category.

(2) Others include tax withholdings related to cross-border payments.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

The reconciliation of taxes at the federal statutory rate to income tax expense for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

Year ended December 31,

2024 2023 2022

Expected tax expense $ 54,883 $ 49,968

6 unchanged sentences

Others 102 ( 1,468 )

Tax expense $ 62,936 $ 53,536 $ 47,565

The effective tax rate increased from 22.5 % during the year ended December 31, 2023 to 24.1 % during the year ended December 31, 2024.

The Company recorded income tax expense of $ 62,936 and $ 53,536 for the years ended December 31, 2024 and 2023, respectively.

The increase in income tax expense was primarily as a result of higher profit, increase in non-deductible expenses and lower excess tax benefits related to stock-based compensation, partially offset by decrease in foreign tax rate differential during the year ended December 31, 2024 compared to the year ended December 31, 2023.

Income tax expense $ 62,936 $ 53,536

As of December 31, 2025, the Company has accumulated net earnings of $ 75,081 from its foreign operations that are not indefinitely reinvested.

Most of the accumulated net earnings generated by the foreign operations has already been taxed for U.S.

federal and state income tax purposes, and any additional taxes due with respect to the repatriation of such earnings would generally be limited to the tax effect of currency gains or losses recognized on repatriation and foreign withholding taxes.

Income taxes paid, net of refunds, during the year ended December 31, 2025 were as follows:

Federal $ 18,906

State and local 11,588

United Kingdom 7,044

Ireland 4,361

Total $ 77,231

Income taxes paid, net of refunds, during the years ended December 31, 2024, and 2023 were $ 108,549 and $ 106,549 , respectively.

EXLSERVICE HOLDINGS, INC.

2 unchanged sentences

(In thousands, except per share amount and share count)

During the year ended December 31, 2024, some of the Company’s foreign subsidiaries repatriated $ 38,161 (net of $ 2,649 withholding taxes) to the United States.

As of December 31, 2024, and December 31, 2023, accumulated net earnings generated by our foreign operations were approximately $ 658,454 and $ 546,828 respectively, of which $ 635,396 and $ 546,828 respectively, are indefinitely reinvested.

Because most of the accumulated net earnings generated by our foreign operations has already been taxed for U.S.

federal and state income tax purposes, any additional taxes due with respect to the repatriation of such earnings would generally be limited to the tax effect of currency gains or losses recognized on repatriation and foreign withholding taxes.

The components of the deferred tax balances were as follows:

6 unchanged sentences

Accrued employee costs and other expenses 41,440 33,897

Net operating loss carry forwards 281 212

Net unrealized foreign exchange loss 20,541 20,242

1 unchanged sentence

Others 791 620

166,866 137,090

Total deferred tax assets 191,055 166,866

Valuation allowance ( 2,640 ) ( 3,172 )

Deferred tax assets $ 163,694 $ 136,608

Deferred tax assets, net of valuation allowance $ 188,415 $ 163,694

Deferred tax liabilities:

2 unchanged sentences

Capitalized costs 8,012 7,665

Lease liability 16,586 16,188

Lease liabilities 21,436 16,586

Others 408 2,198

Deferred tax liabilities $ 60,350 $ 55,176

Total deferred tax liabilities $ 60,572 $ 60,350

Net deferred tax assets $ 127,843 $ 103,344

Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying values of assets and liabilities and their respective tax bases and operating loss carry forwards.

The Company performed an analysis of the realizability of deferred tax assets as of December 31, 2025, and 2024, and recorded a valuation allowance of $ 2,640 and $ 3,172 , respectively.

The Company has state research and development tax credit carryforwards as of December 31, 2024 of $ 4,083 (tax effected $ 3,226 , net of federal benefit) that will expire by 2034, if not utilized.

The Company has state net operating loss carryforwards as of December 31, 2024 of $ 5,515 (tax effected $ 281 , net of federal benefit) of which $ 4,992 (tax effected $ 174 , net of federal benefit) is allowed to be carried forward indefinitely and the balance will expire by 2039, if not utilized.

The Company has state research and development tax credit carryforwards as of December 31, 2025 of $ 3,371 ($ 2,663 , net of federal tax impact) that will expire by 2035, if not utilized.

The Company’s income tax expense also includes provisions established for uncertain income tax positions determined in accordance with ASC Topic 740, Income Taxes .

8 unchanged sentences

2025 2024 2023

Balance as of January 1 $ 1,262 $ 1,449 $ 1,068

Balance as of December 31 $ 1,966 $ 1,262 $ 1,449

Additions based on tax positions related to the current year 524 561 423

5 unchanged sentences

Stock-Based Compensation

On June 15, 2018, at the Company’s 2018 Annual Meeting of Stockholders, the Company's stockholders approved the 2018 Omnibus Incentive Plan, which among other things, reserves 15,875,000 shares of the Company’s common stock for grants of awards under the 2018 Omnibus Incentive Plan.

As of December 31, 2024 and 2023, the Company had 1,813,592 and 4,096,102 shares, respectively, available for grant under the 2018 Omnibus Incentive Plan.

Under the 2018 Omnibus Incentive Plan, the Compensation and Talent Management Committee (the “Committee”) may grant awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards, performance-based compensation awards (including cash bonus awards and market condition based awards) or any combination of the foregoing.

On June 17, 2025, the Company’s stockholders approved 2025 Omnibus Incentive Plan (the "2025 Plan"), which among other things, reserves 6,800,000 shares (as adjusted under the terms thereof) of the Company’s common stock for grants of awards under the 2025 Plan, at which time new awards under the 2018 Omnibus Incentive Plan (the "2018 Plan") were not permitted to be made, but outstanding awards under the 2018 Plan will continued to be governed by the terms thereof.

As of December 31, 2025, the Company had 5,919,466 shares available for future grants under the 2025 Plan.

Under the 2025 Plan, the Compensation and Talent Management Committee (the “Committee”) may grant awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based compensation awards (including revenue target based and market condition based awards), stock bonuses and cash bonus awards, or any combination or variation of the foregoing.

The Committee determines which employees are eligible to receive the equity awards, the number of equity awards to be granted, the exercise price, the vesting period and the exercise period.

2 unchanged sentences

Restricted stock units generally vest proportionally over a period of four years from the date of grant, unless specified otherwise.

Stock-based compensation expense by nature of function, as below, are included in the consolidated statements of income:

Stock-based compensation expense by function, as below, are included in the consolidated statements of income:

Year ended December 31,

20 unchanged sentences

Outstanding as of December 31, 2025 1,734,720 $ 30.14 $ 21,344 7.5

Vested and exercisable as of December 31, 2024 425,265 $ 30.14 $ 6,058 8.5

Vested and exercisable at December 31, 2025 861,740 $ 30.14 $ 10,603 7.5

Weighted average grant date fair value of per unit of stock option granted during the period $ —

15 unchanged sentences

Share Matching Program

Under the Company’s 2018 Omnibus Incentive Plan (the “2018 Plan”), the Company established a share matching program (“SMP”) for executive officers and other specified employees.

Under the Company’s 2018 Plan, the Company established a share matching program (“SMP”) for executive officers and other specified employees.

Under the SMP, the Company agreed to issue a number of restricted stock units equal to the number of newly acquired shares of the Company's common stock.

For purposes of the match, “newly acquired shares” includes the employee’s first quarter 2022 open market purchase of the common stock, and

For purposes of the match, “newly acquired shares” includes the employee’s first quarter 2022 open market purchase of the common stock, and crediting of equity awards vesting under any existing stock award plan of the Company as having been purchased by such employees, in an amount between $ 100 to $ 500 per such employee.

EXLSERVICE HOLDINGS, INC.

2 unchanged sentences

(In thousands, except per share amount and share count)

crediting of equity awards vesting under any existing stock award plan of the Company as having been purchased by such employees, in an amount between $ 100 to $ 500 per such employee.

The matching restricted stock units granted under the SMP will vest in two installments, with one-third to vest on the second anniversary of the grant date and the remaining two-thirds to vest on the third anniversary of the grant date;

10 unchanged sentences

Outstanding as of December 31, 2025 — $ —

144,845 $ 24.95

*As of December 31, 2024 and 2023 restricted stock units vested for which the underlying common stock is yet to be issued are 72,385 and nil , respectively.

As of December 31, 2024, unrecognized compensation cost of $ 445 is expected to be expensed over a weighted average period of 0.3 years.

(1) As of December 31, 2025 and 2024 restricted stock units vested for which the underlying common stock is yet to be issued are 31,662 and 72,385 , respectively.

Due to administrative processes, the restricted stock units issued during the year ended December 31, 2025, were reduced based on applicable U.S.

tax rules and regulations.

Restricted Stock Units

11 unchanged sentences

Granted 1,072,380 50.43

Vested* ( 1,818,180 ) 22.26

( 1,347,614 ) 26.69

Forfeited ( 175,365 ) 36.92

1 unchanged sentence

2,789,601 $ 37.65

(1) As of December 31, 2025 and 2024, restricted stock units vested for which the underlying common stock is yet to be issued are 348,636 and 289,547 , respectively.

The fair value of restricted stock units is generally the market price of the Company’s shares on the date of grant.

As of December 31, 2025, unrecognized compensation cost of $ 69,303 is expected to be expensed over a weighted average period of 2.5 years.

EXLSERVICE HOLDINGS, INC.

2 unchanged sentences

(In thousands, except per share amount and share count)

* As of December 31, 2024 and 2023, restricted stock units vested for which the underlying common stock is yet to be issued are 289,547 and 324,125 , respectively.

The fair value of restricted stock units is generally the market price of the Company’s shares on the date of grant.

As of December 31, 2024, unrecognized compensation cost of $ 63,066 is expected to be expensed over a weighted average period of 2.6 years.

The weighted average fair value of restricted stock units granted and the grant date fair value of restricted stock units vested (including SMP) was as follows:

The weighted average fair value of restricted stock units granted and the grant date fair value of restricted stock units vested was as follows:

Year ended December 31,

3 unchanged sentences

Performance-Based Stock Awards

Under the 2018 Plan, the Company grants performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees.

During the year ended December 31, 2024, the Company granted 40 % of each award recipient’s equity grants in the form of PRSUs that cliff vest at the end of a three-year period based on an aggregated revenue target for a three-year period (“PU”).

The remaining 60 % of each award recipient’s equity grants are PRSUs that are based on market conditions contingent on the Company's meeting the total shareholder return relative to a group of peer companies specified under the 2018 Plan, and are measured over a three-year performance period (“MU”).

Under the Company’s equity incentive plans, the Company grants performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees.

The Company generally grants 40 % of each award recipient’s equity grants in the form of PRSUs that cliff vest at the end of a three-year period based on an aggregated revenue target for a three-year period (“PU”).

The remaining 60 % of each award recipient’s equity grants are PRSUs that are based on market conditions, contingent on the Company’s meeting a total shareholder return relative to a group of peer companies specified under PRSU agreements, and are measured over a three-year performance period (“MU”).

The fair value of each PU is determined based on the market price of one common share on a day prior to the date of grant, and the associated stock compensation expense is calculated on the basis that performance targets at 100 % are probable of being achieved.

11 unchanged sentences

• The correlation coefficients are used to model the way in which each entity tends to move in relation to each other are based upon the price data used to calculate the historical volatilities.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

The fair value of each MU granted to employees is estimated on the date of grant using the following weighted average assumptions:

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Volatility for expected life 27.3 % - 29.8 %

29.9 % 32.9 %

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

PRSU activity under the Company’s stock plans is shown below:

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Adjustment upon final determination of level of performance goal achievement (1)

Vested** ( 426,870 ) 24.00 ( 639,950 ) 31.13

31,877 34.56 139,523 44.72

( 229,250 ) 34.56 ( 435,303 ) 44.72

Forfeited ( 23,817 ) 38.06 ( 35,688 ) 56.11

9 unchanged sentences

The Company has reserved 4,000,000 shares of common stock for issuance under the 2022 ESPP.

The fifth offering period under the 2022 ESPP commenced on July 1, 2024 with a term of six months .

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

The seventh offering period under the 2022 ESPP commenced on July 1, 2025 with a term of six months .

Activity under the Company’s 2022 ESPP is shown below:

3 unchanged sentences

Issuance of common stock related to the:

Third offering period 71,645 $ 1,948

Fourth offering period 86,936 $ 2,414

Fifth offering period 64,939 $ 1,823

Sixth offering period 97,536 $ 3,844

Shares available for issuance as of December 31, 2025 3,510,269

Issuance of common stock related to the fifth offering

Issuance of common stock related to the seventh offering

period made subsequent to December 31, 2025 60,139 $ 2,297

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

The ESPP is compensatory and results in compensation expense.

The fair value of common stock to be issued under the ESPP was determined using the Black-Scholes option pricing model with the following assumptions:

Fifth offering period of

July 1, 2024 to December 31, 2024 Fourth offering period of

January 1, 2024 to June 30, 2024 Third offering period of

Seventh offering period of

July 1, 2025 to

December 31, 2025 Sixth offering period of

January 1, 2025 to

June 30, 2025 Fifth offering period of

July 1, 2024 to December 31, 2024

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Related Party Disclosures

In April 2022, the Company entered into a service contract for providing analytics services to The Vanguard Group Inc., which reported that it beneficially owns approximately 10% of the Company’s common stock as of December 31, 2024.

During the years ended December 31, 2024 and 2023, the Company recognized revenues, net of $ 638 and $ 1,975 , respectively, related to this service contract.

The Company provides data and AI-led solutions and services to Corridor Platforms, Inc., which is an equity affiliate of the Company.

The Company recognized revenues, net of $ 203 and $ 424 during the year ended December 31, 2025 and 2024, respectively.

The Company had outstanding accounts receivable, net of $ 28 and $ 56 related to this service contract as of December 31, 2025 and 2024, respectively.

In February 2024, the Company entered into a service contract for providing analytics services to Corridor Platforms, Inc., which is an equity affiliate of the Company.

During the year ended December 31, 2024, the Company recognized revenues, net of $ 424 related to this service contract.

The Company had outstanding accounts receivable, net of $ 56 related to this service contract as of December 31, 2024.

In December 2025, the Company entered into a transaction to privately repurchase 1,551,970 shares for $ 63,373 from Orogen Echo LLC, an affiliate of The Orogen Group LLC where one of the Company’s directors is the CEO and Chairman.

Commitments and Contingencies

Capital Commitments

As of December 31, 2024 and 2023, the Company had committed to spend approximately $ 6,500 and $ 7,100 , respectively, under agreements to purchase property and equipment.

This amount is net of capital advances paid which are recognized in consolidated balance sheets as “Capital work in progress” under “Property and equipment.”

As of December 31, 2025 and 2024, the Company had committed to spend approximately $ 8,700 and $ 6,500 , respectively, net of capital advances, under agreements to purchase property and equipment.

On June 15, 2023, the Company, along with other limited partners, entered into a limited partnership agreement with the general partner, PNP Financial Services Fund GP I, LLC and initial limited partner and outgoing partner, to form a partnership with the name Plug and Play Financial Services Fund I, L.P.

(the “Partnership”) for the primary purpose of making investments

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

in growth-stage technology companies.

During the year ended December 31, 2024, the Company further invested $ 600 in the Partnership and is committed under the Partnership to make further investments up to an amount of $ 2,800 .

(the “Partnership”) for the primary purpose of making investments in growth-stage technology companies.

The Company committed to make an aggregate investment of $ 4,000 in the Partnership.

As of December 31, 2025, the Company has invested $ 2,400 in the Partnership and is committed to make further investments up to an amount of $ 1,600 .

Other Commitments

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Accordingly, the Company determines and documents pricing for controlled intercompany transactions based on an economic analysis as prescribed in the respective regulations.

The tax authorities have jurisdiction to review the Company’s transfer pricing.

The tax authorities have jurisdiction to

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

review the Company’s transfer pricing.

If the Company’s transfer pricing is challenged by the authorities, they could assess additional tax, interest and penalties, thereby impacting the Company’s profitability and cash flows.

3 unchanged sentences

The Company believes that its positions will more likely than not be sustained upon final examination by the tax authorities, and accordingly has not accrued any liabilities with respect to these matters in its consolidated financial statements.

India’s VAT regime ended in June 2017 and was replaced by the current Goods and Service Tax (“GST”) regime.

Pursuant to reviewing the Company’s annual VAT filings, the Indian tax authorities raised aggregate VAT demands for tax years 2015 and 2017, in the amounts of $ 5,339 and $ 5,493 , as of December 31, 2024 and 2023, respectively.

The Company has provided bank guarantees against these demands in the amounts of $ 5,339 and $ 4,570 , as of December 31, 2024 and 2023, respectively.

The GST authorities rejected the Company’s refunds claims in the amounts of $ 5,885 and $ 4,748 as of December 31, 2024 and 2023, respectively.

Pursuant to reviewing the Company’s annual VAT and service tax filings, the Indian tax authorities raised aggregate demands for tax years 2015 and 2017, in the amounts of $ 5,186 and $ 5,339 , as of December 31, 2025 and 2024, respectively.

The Company has made payments and/or provided bank guarantees against these demands in the amounts of $ 5,090 and $ 5,339 , as of December 31, 2025 and 2024, respectively.

The Company has filed appeals against these matters and believes that it is more likely than not that upon final examination its position will be sustained based on technical merits.

The Indian GST authorities rejected the Company’s refund claims in the amounts of $ 5,494 and $ 5,885 as of December 31, 2025 and 2024, respectively.

The Company has filed appeals against these matters and believes that it is more likely than not that upon final examination its position will be sustained based on its technical merits.

Accordingly, no provision was recognized as of December 31, 2024 and 2023, respectively.

Accordingly, no allowances was recorded against these GST receivables as of December 31, 2025 and 2024, respectively.

Some of the Company’s subsidiaries in India have undergone assessments with the statutory authority with respect to defined contribution plan.

Except for some components of the assessments for which the Company has recognized a provision in the financial statements, the Company believes that the amount demanded by such authority is not a meaningful indicator of the potential liabilities of the Company, and that these matters are without merit.

Except for some components of the assessments for which the Company has recognized a provision in the consolidated financial statements, the Company believes that the amount demanded by such authority is not a meaningful indicator of the potential liabilities of the Company, and that these matters are without merit.

The Company is defending against the assessment orders and in one case, has instituted an appeal against the order before the relevant tribunal while also making a payment under protest of the amount demanded.

5 unchanged sentences

The Company will continuously monitor developments on these matters to assess potential impacts to the financial statements.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2024

(In thousands, except per share amount and share count)

The outcomes of legal actions are unpredictable and subject to significant uncertainties, and thus it is inherently difficult to determine the likelihood of the Company incurring a material loss or quantification of any such loss.

4 unchanged sentences

In second quarter of 2024, the Company initiated a strategic restructuring plan to align its workforce with market opportunities, business strategies and evolving customer needs.

This plan was executed in the second quarter of 2024, which affected less than 1 % of the Company’s global workforce.

The restructuring costs include costs in relation to employee severance and other associated costs including legal fees and outplacement support costs.

These costs have been recognized under cost of revenues (across all reporting segments), general & administrative and selling & marketing expenses in the consolidated statements of income.

The following table summarizes the activity related to the restructuring costs incurred and paid during the year ended December 31, 2024:

Year ended December 31, 2024

Employee-Related Costs Other Associated Costs Total

Opening balance $ — $ — $ —

Costs incurred during the period 4,397 365 4,762

Payments during the period 4,397 365 4,762

Closing balance $ — $ — $ —

This plan was executed in the second quarter of 2024, which affected less than 1 % of the Company’s global workforce, and was completed as of December 31, 2024.

The restructuring costs of $ 4,762 included costs in relation to employee severance and other associated costs including legal fees and outplacement support costs.

These costs were recognized under cost of revenues (across all reporting segments), general & administrative and selling & marketing expenses in the consolidated statements of income during the year ended December 31, 2024.

EXLSERVICE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

December 31, 2025

(In thousands, except per share amount and share count)

Subsequent Event

In the first quarter of 2025, the Company began to implement operational and structural changes, resulting in the realignment of its reporting segments.

The new reportable segments will be Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, and International Growth Markets.

Beginning in the first quarter of 2025, the Company will reflect this change in segment presentation in its periodic and annual reports.

On February 19, 2026, the Company’s board of directors authorized a $ 500,000 common stock repurchase program (the “2026 Repurchase Program”), effective February 28, 2026, for a two-year period, unless earlier terminated, suspended or modified by the board.

Under the 2026 Repurchase Program, shares may be purchased by the Company from time to time on the open market or otherwise, in such quantities, at such prices, in such manner and on such terms and conditions as determined by the Company’s management to be in the best interests of the Company.

The 2026 Repurchase Program replaces the 2024 Repurchase Program, which was terminated effective February 28, 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures