What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-04-28 compared with 2025-10-28 · 304 added, 493 removed, 694 unchanged (53% of the section changed)

3 unchanged sentences

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

Notes September 30, 2025 December 31, 2024

Notes March 31, 2026 December 31, 2025

Current assets:

33 unchanged sentences

Common stock, $ 0.001 par value;

400,000,000 shares authorized, 207,938,011 shares issued and 158,882,631 shares outstanding as of September 30, 2025 and 206,510,587 shares issued and 161,801,212 shares outstanding as of December 31, 2024

400,000,000 shares authorized, 209,929,764 shares issued and 152,999,425 shares outstanding as of March 31, 2026 and 208,855,566 shares issued and 156,430,028 shares outstanding as of December 31, 2025

Additional paid-in capital 674,662 677,562

2 unchanged sentences

Total including shares held in treasury 2,037,558 2,030,023

49,055,380 shares as of September 30, 2025 and 44,709,375 shares as of December 31, 2024, held in treasury, at cost

56,930,339 shares as of March 31, 2026 and 52,425,538 shares as of December 31, 2025, held in treasury, at cost

19 ( 1,258,754 ) ( 1,117,318 )

5 unchanged sentences

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

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

Notes 2026 2025

10 unchanged sentences

Income from operations 91,826 78,415

Foreign exchange gain/(loss), net ( 1,013 ) 278 2,390 673

Foreign exchange gain, net 1,135 1,192

Interest expense 18 ( 3,951 ) ( 4,144 )

16 unchanged sentences

(In thousands)

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

Notes 2026 2025

2 unchanged sentences

Unrealized gain/(loss) on cash flow hedges 17 ( 45,935 ) 9,469

Retirement benefits 20 ( 1,177 ) —

Currency translation adjustments ( 23,804 ) 3,927

Reclassification adjustments:

(Gain)/loss on cash flow hedges (1)

Loss on cash flow hedges (1)

17 4,922 1,598

5 unchanged sentences

Total comprehensive income $ 10,434 $ 78,496

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

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

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

3 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

For the three months ended September 30, 2025 and 2024

(In thousands, except share count)

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income/(Loss) Treasury Stock Total

Notes Shares Amount Shares Amount

Balance as of June 30, 2025 207,810,635 $ 207 $ 625,984 $ 1,414,572 $ ( 134,434 ) ( 45,981,304 ) $ ( 845,379 ) $ 1,060,950

Stock issued against stock-based compensation plans 23 127,376 — 3,843 — — — — 3,843

Stock-based compensation 23 — — 23,139 — — — — 23,139

Acquisition of treasury stock 19 — — — — — ( 771,520 ) ( 33,467 ) ( 33,467 )

Excise tax on repurchase of common stock, net of stock issuances 19 — — — — — — ( 694 ) ( 694 )

Accelerated share repurchase 5, 19 — — ( 25,000 ) — — ( 2,302,556 ) ( 100,000 ) ( 125,000 )

Other comprehensive loss 15 — — — — ( 34,543 ) — — ( 34,543 )

Net income — — — 58,161 — — — 58,161

Balance as of September 30, 2025 207,938,011 $ 207 $ 627,966 $ 1,472,733 $ ( 168,977 ) ( 49,055,380 ) $ ( 979,540 ) $ 952,389

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income/(Loss) Treasury Stock Total

Notes Shares Amount Shares Amount

Balance as of June 30, 2024 204,783,113 $ 204 $ 520,922 $ 1,178,251 $ ( 136,108 ) ( 42,606,731 ) $ ( 710,663 ) $ 852,606

Stock issued against stock-based compensation plans 23 533,889 1 2,414 — — — — 2,415

Stock-based compensation 23 — — 21,232 — — — — 21,232

Acquisition of treasury stock 19 — — — — — ( 1,009,246 ) ( 34,830 ) ( 34,830 )

Excise tax on repurchase of common stock, net of stock issuances 19 — — — — — — ( 412 ) ( 412 )

Accelerated share repurchase 5, 19 — — 27,862 — — ( 820,433 ) ( 27,862 ) —

Other comprehensive income 15 — — — — 13,515 — — 13,515

Net income — — — 53,037 — — — 53,037

Balance as of September 30, 2024 205,317,002 $ 205 $ 572,430 $ 1,231,288 $ ( 122,593 ) ( 44,436,410 ) $ ( 773,767 ) $ 907,563

See accompanying notes to unaudited consolidated financial statements.

EXLSERVICE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

For the nine months ended September 30, 2025 and 2024

For the three months ended March 31, 2026 and 2025

(In thousands, except share count)

5 unchanged sentences

Acquisition of treasury stock 19 — — — — — ( 1,158,081 ) ( 40,650 ) ( 40,650 )

Accelerated share repurchases 5, 19 — — ( 25,000 ) — — ( 3,346,720 ) ( 100,000 ) ( 125,000 )

Excise tax on repurchase of common stock, net of stock issuances 19 — — — — — — ( 786 ) ( 786 )

Accelerated share repurchase 5, 19 — — ( 25,000 ) — — ( 2,302,556 ) ( 100,000 ) ( 125,000 )

Other comprehensive loss 15 — — — — ( 56,647 ) — — ( 56,647 )

Net income — — — 67,081 — — — 67,081

Balance as of September 30, 2025 207,938,011 $ 207 $ 627,966 $ 1,472,733 $ ( 168,977 ) ( 49,055,380 ) $ ( 979,540 ) $ 952,389

Balance as of March 31, 2026 209,929,764 $ 210 $ 674,662 $ 1,600,060 $ ( 237,374 ) ( 56,930,339 ) $ ( 1,258,754 ) $ 778,804

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income/(loss) Treasury Stock Total

4 unchanged sentences

Acquisition of treasury stock 19 — — — — — ( 365,779 ) ( 17,491 ) ( 17,491 )

Excise tax on repurchase of common stock, net of stock issuances 19 — — — — — — ( 1,030 ) ( 1,030 )

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

Other comprehensive income 15 — — — — 11,935 — — 11,935

Net income — — — 66,561 — — — 66,561

Balance as of September 30, 2024 205,317,002 $ 205 $ 572,430 $ 1,231,288 $ ( 122,593 ) ( 44,436,410 ) $ ( 773,767 ) $ 907,563

Balance as of March 31, 2025 207,758,497 $ 207 $ 609,592 $ 1,348,521 $ ( 142,787 ) ( 45,075,154 ) $ ( 803,656 ) $ 1,011,877

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Reduction in the carrying amount of operating lease right-of-use assets 6,904 6,061

Fair value mark-to-market of investments ( 3,191 ) ( 1,233 )

Unrealized foreign currency exchange (gain)/loss, net ( 10,978 ) ( 3,064 )

Fair value mark-to-market on investments ( 1,502 ) ( 84 )

Unrealized foreign currency exchange gain, net ( 11,411 ) ( 1,270 )

Deferred income tax benefit ( 2,683 ) ( 7,932 )

4 unchanged sentences

Income taxes payable, net 20,261 11,664

Accounts payable, accrued expenses and other liabilities 18,464 22,901

Deferred revenue 7,607 753

Accrued employee costs ( 69,254 ) ( 65,566 )

Accounts payable, accrued expenses and other liabilities 15,068 10,177

Operating lease liabilities ( 5,984 ) ( 5,840 )

Payment of contingent consideration — ( 11,000 )

Net cash provided by operating activities 1,719 3,243

2 unchanged sentences

Proceeds from sale of property and equipment 121 95

Investment in equity affiliate ( 1,174 ) ( 600 )

Business acquisition (net of cash acquired) — ( 24,466 )

Purchases of investments ( 44,942 ) ( 90,185 )

Proceeds from redemption of investments 101,779 81,362

Net cash used for investing activities ( 82,609 ) ( 94,475 )

Investment in equity affiliate — ( 600 )

Net cash provided by/(used for) investing activities 44,025 ( 22,268 )

Cash flows from financing activities:

3 unchanged sentences

Acquisition of treasury stock ( 165,988 ) ( 17,994 )

Payment of contingent consideration — ( 4,000 )

Proceeds from issuance of common stock 2,787 2,765

Payment of debt issuance costs — ( 593 )

Net cash used for financing activities ( 147,929 ) ( 52,171 )

Net cash (used for)/provided by financing activities ( 44,604 ) 3,405

Effect of exchange rate changes ( 2,331 ) 2,700

Net increase in cash, cash equivalents and restricted cash 8,435 17,863

Net decrease in cash, cash equivalents and restricted cash ( 1,191 ) ( 12,920 )

Cash, cash equivalents and restricted cash at the beginning of the period 165,969 171,398

3 unchanged sentences

Interest $ 3,535 $ 3,790

Income taxes $ 55,119 $ 78,069

Supplemental disclosure of non-cash investing and financing activities:

4 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

March 31, 2026

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

3 unchanged sentences

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.

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

Summary of Significant Accounting Policies

8 unchanged sentences

The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis.

Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing consolidated financial statements.

All intercompany balances and transactions are eliminated in consolidation.

The Company’s investments in equity affiliates are recorded using equity method of accounting.

In the first quarter of 2025, the Company implemented operational and structural changes to accelerate the execution of its data and AI strategy.

Under the new structure, the Company reports its financial performance based on new segments described in Note 3 - Segment Information to the unaudited consolidated financial statements.

In conjunction with the new reporting structure, the Company has recast prior period amounts, wherever applicable, to conform to the way the Company internally manages and monitors segment performance.

This change primarily impacted Note 3 - Segment Information and Note 10 - Goodwill and Other Intangible Assets to the unaudited consolidated financial statements.

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

(b) Use of Estimates

1 unchanged sentence

GAAP requires management to make estimates and assumptions that affect the carrying amounts of assets and liabilities and disclosure of contingent assets and liabilities included in the unaudited consolidated financial statements.

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

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 unaudited 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.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

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.

In December 2023, the Financial Accounting Standards Board (“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 is currently evaluating the impact of the new disclosure requirements.

This ASU will affect the Company’s annual income tax disclosures but is not expected to impact its consolidated balance sheets or statements of income for the year ending December 31, 2025.

In November 2024, the 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”):

3 unchanged sentences

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.

3 unchanged sentences

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.

(d) Recently Adopted and Applicable Accounting Pronouncements

In March 2024, the FASB issued ASU No.

2024-01, Compensation-Stock Compensation (“ASC Topic 718”) .

This ASU clarifies how to evaluate whether profits interest and similar awards given to employees and non-employees are within the scope of share-based payment arrangement under ASC Topic 718.

The ASU will be effective for annual periods beginning after December 15, 2024, including interim periods within those years, 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 unaudited consolidated financial statements.

Segment Information

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

In the first quarter of 2025, the Company implemented operational and structural changes to 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”) which focus on delivering higher value to clients by

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

The Company has adopted this ASU beginning January 1, 2026.

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

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

leveraging full suite of capabilities;

and Strategic Growth Units which rapidly advance 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 business unit to represent all service 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 business unit will help the Company to 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 and digital operations 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 unaudited consolidated statements of income, balance sheet or statements of cash flows.

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.

The Company’s operating model is comprised 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.

The Company manages and reports financial information through its four reportable segments that are aligned to its IMUs:

Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, and International Growth Markets, which reflects the manner in which the Company’s Chief Operating Decision Maker (“CODM”) reviews financial information and makes operating decisions.

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.

Revenues and cost of revenues for the three months ended September 30, 2025 and 2024, respectively, for each of the reportable segments, are as follows:

Three months ended September 30, 2025

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

Revenues, net $ 180,547 $ 135,271 $ 120,996 $ 92,771 $ 529,585

Cost of revenues (1)

Employee costs 96,661 63,561 65,116 49,106 274,444

Infrastructure and technology costs 13,670 7,490 6,617 8,920 36,697

Other costs (2)

4,080 5,999 2,908 1,521 14,508

Gross profit (1)

$ 66,136 $ 58,221 $ 46,355 $ 33,224 $ 203,936

Operating expenses 127,762

Income from operations 76,174

Foreign exchange gain, net, interest expense and other income, net ( 1,477 )

Income before income tax expense and earnings from equity affiliates $ 74,697

(1) Exclusive of depreciation and amortization expense.

(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.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

Three months ended September 30, 2024

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

Revenues, net $ 166,416 $ 111,197 $ 108,300 $ 86,160 $ 472,073

Cost of revenues (1)

Employee costs 85,808 51,096 59,446 45,851 242,201

Infrastructure and technology costs 12,744 7,578 5,817 8,104 34,243

Other costs (2)

8,097 5,052 2,699 1,514 17,362

Gross profit (1)

$ 59,767 $ 47,471 $ 40,338 $ 30,691 $ 178,267

Operating expenses 108,862

Income from operations 69,405

Foreign exchange gain, net, interest expense and other income, net ( 874 )

Income before income tax expense and earnings from equity affiliates $ 68,531

(1) Exclusive of depreciation and amortization expense.

(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 and cost of revenues for the nine months ended September 30, 2025 and 2024, respectively, for each of the reportable segments, are as follows:

Nine months ended September 30, 2025

The CODM generally reviews and uses financial information such as revenues, cost of revenues, and gross profit predominantly in the annual budgeting and forecasting process to allocate an overall budget, measure segment performance, and evaluate pricing strategy.

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

Revenues, net and cost of revenues for the three months ended March 31, 2026 and 2025, respectively, for each of the reportable segments, are as follows:

Three months ended March 31, 2026

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

15 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

Nine months ended September 30, 2024

Three months ended March 31, 2025

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

14 unchanged sentences

Revenues, net by service type, were as follows:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Data and AI-led (1)

3 unchanged sentences

Revenues, net $ 570,351 $ 501,019

(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, the Company’s industry-specific offerings are designed to help clients accelerate growth, improve customer experience, enhance efficiency, and deliver lasting competitive advantages.

As clients evolve from digital operations to data and AI-powered operations and outcomes, these capabilities represent the next stage of enterprise transformation.

(2) Digital operations revenue comes from the Company’s industry-specific solutions and services that help clients run essential business functions with greater speed, accuracy, and efficiency.

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

(1) Data and AI-led revenue is derived from the Company’s Data Management, Analytics, AI services and solutions businesses.

It includes revenue from fully integrated business operations like payment integrity services and platform-based solutions and services, which combine operations, technology, data, analytics, and AI.

It also includes revenue from operations that embed data and AI within clients’ operational workflows.

(2) Digital operations revenue is derived from managed services that blend Company’s deep domain expertise with industry-specific solutions and services to operate clients’ business functions with enhanced productivity, greater speed and improved accuracy.

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 and digital operations services.

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.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

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

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Revenues, net

4 unchanged sentences

Revenues, net by industry verticals, were as follows:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Insurance $ 226,060 $ 200,361

3 unchanged sentences

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Long-lived assets

5 unchanged sentences

Long-lived assets $ 202,368 $ 209,232

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

Revenues, net and Accounts Receivable, net

2 unchanged sentences

The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Accounts receivable, net $ 388,563 $ 343,105

3 unchanged sentences

Consideration received for process transition activities $ 33,694 $ 32,247

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

Accounts receivable includes $ 147,896 and $ 121,817 as of September 30, 2025 and December 31, 2024, respectively, representing unbilled receivables.

Accounts receivable includes $ 170,511 and $ 141,653 as of March 31, 2026 and December 31, 2025, respectively, representing unbilled receivables.

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 September 30, 2025 and December 31, 2024, includes receivables of $ 25,863 and $ 33,472 , respectively, from our payment integrity services.

Contract assets as of March 31, 2026 and December 31, 2025, include receivables of $ 21,783 and $ 24,849 , respectively, from payment integrity services.

There are no performance risks associated with these contract assets.

There were no significant cumulative catch-up impact or impairment related to contract assets as of September 30, 2025 and December 31, 2024.

Revenue recognized during the three and nine months ended September 30, 2025 and 2024, which was included in the contract liabilities balance at the beginning of the respective periods:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

There were no significant cumulative catch-up impact or impairment related to contract assets as of March 31, 2026 and December 31, 2025.

Revenue recognized during the three months ended March 31, 2026 and 2025, which was included in the contract liabilities balance at the beginning of the respective periods:

Three months ended March 31,

Deferred revenue (consideration received in advance) $ 4,615 $ 7,429

2 unchanged sentences

The following table provides details of the Company’s contract acquisition and fulfillment costs:

Contract Acquisition Costs

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Opening balance $ 2,192 $ 1,990 $ 2,287 $ 2,122

Additions 198 6 563 377

Amortization ( 235 ) ( 218 ) ( 695 ) ( 721 )

Closing balance $ 2,155 $ 1,778 $ 2,155 $ 1,778

Contract Fulfillment Costs

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Contract Acquisition Costs Contract Fulfillment Costs

Three months ended Three months ended

March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025

Opening balance $ 1,947 $ 2,287 $ 39,223 $ 36,022

2 unchanged sentences

Closing balance $ 1,766 $ 2,126 $ 38,387 $ 38,080

There was no significant impairment for contract acquisition and contract fulfillment costs as of September 30, 2025 and December 31, 2024.

There was no significant impairment for contract acquisition and contract fulfillment costs as of March 31, 2026 and December 31, 2025.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

Allowance for expected credit losses

The following table provides information about accounts receivable, net of allowance for expected credit losses:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Accounts receivable, including unbilled receivables $ 391,628 $ 345,980

1 unchanged sentence

Accounts receivable, net $ 388,563 $ 343,105

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

The movement in “Allowance for expected credit losses” was as follows:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Opening balance $ 2,875 $ 3,528

Additions / (reductions) 8 342 1,256 274

Additions 250 1,219

Reductions due to write-off of accounts receivable ( 61 ) ( 13 )

2 unchanged sentences

Customer and credit risk concentration

No single customer accounted for more than 10% of the Company's revenues, net during the three and nine months ended September 30, 2025 and 2024.

No single customer accounted for more than 10% of the Company's revenues, net during the three months ended March 31, 2026 and 2025.

The Company’s management believes that the loss of any of its top ten clients could have a material adverse effect on its financial performance.

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

No customer accounted for more than 10% of accounts receivable, net, as of September 30, 2025 and December 31, 2024.

No customer accounted for more than 10% of accounts receivable, net, as of March 31, 2026 and December 31, 2025.

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Net income $ 67,081 $ 66,561

6 unchanged sentences

Weighted average potentially dilutive shares considered anti-dilutive and not included in computing diluted earnings per share 1,616,245 318,740

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”).

On 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 three months ended September 30, 2025, the Company recorded the initial delivery of shares in treasury stock at cost, 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.

The forward contracts indexed to the Company's own common stock met the criteria for equity classification, and prepayment of $ 25,000 was initially recorded in additional paid-in capital, which reflects the pending settlement of the 2025 ASR Agreement.

Had the 2025 ASR Agreement been settled as of September 30, 2025, determined based on the volume-weighted average price per share since its effective date, Citibank would have been required to deliver additional estimated shares to the Company.

The effect of the potential share settlement under the 2025 ASR Agreement was excluded from the computation of diluted earnings per share as its inclusion would have been anti-dilutive.

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

On March 16, 2026, the Company entered into a fixed dollar accelerated share repurchase transaction pursuant to a confirmation (“2026 ASR Agreement”) with Morgan Stanley & Co.

LLC (“Morgan Stanley”).

During the three months ended

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

March 31, 2026, the Company recorded the initial delivery of shares in treasury stock at cost, 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.

Had the 2026 ASR Agreement been settled as of March 31, 2026, determined based on the volume-weighted average price per share since its effective date, Morgan Stanley would have been required to deliver additional estimated shares to the Company.

The effect of the potential share settlement under the 2026 ASR Agreement was excluded from the computation of diluted earnings per share as its inclusion would have been anti-dilutive.

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

Other Income, net

Other income, net consists of the following:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Gain on sale and fair value mark-to-market on investments $ 2,196 $ 1,766 $ 6,403 $ 3,944

Three months ended March 31,

Interest and dividend income $ 1,553 $ 2,625

Fair value changes of contingent consideration (1)

Gain on sale and fair value mark-to-market on investments 1,490 1,948

Others, net ( 652 ) 130

3 unchanged sentences

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

September 30, 2025 September 30, 2024 December 31, 2024

March 31, 2026 March 31, 2025 December 31, 2025

Cash and cash equivalents $ 145,405 $ 140,442 $ 146,326

7 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 UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

Investments consist of the following:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Short-term investments

9 unchanged sentences

Property and equipment consists of the following:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Property and equipment, gross $ 367,561 $ 367,558

1 unchanged sentence

Property and equipment, net $ 109,388 $ 111,821

During the three and nine months ended September 30, 2025, there were no material changes in estimated useful lives of property and equipment during the ordinary course of operations.

During the three months ended March 31, 2026, there were no material changes in estimated useful lives of property and equipment during the ordinary course of operations.

The depreciation and amortization expense, excluding amortization of acquisition-related intangibles, recognized in the unaudited consolidated statements of income was as follows:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Depreciation and amortization expense $ 10,777 $ 10,311

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

September 30, 2025 December 31, 2024

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

March 31, 2026 December 31, 2025

Cost $ 59,390 $ 59,391

1 unchanged sentence

Internally developed software, net $ 17,635 $ 20,059

The amortization expense on internally developed software recognized in the unaudited consolidated statements of income was as follows:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Amortization expense $ 3,498 $ 2,961 $ 8,981 $ 8,408

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

During the three and nine months ended September 30, 2025 and 2024, there were no indicators of impairment related to capitalized software.

The amortization expense on internally developed software recognized in the unaudited consolidated statements of income was as follows:

Three months ended March 31,

Amortization expense $ 2,423 $ 2,740

During the three months ended March 31, 2026 and 2025, there were no indicators of impairment related to capitalized software.

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:

2 unchanged sentences

Currency translation adjustments ( 45 ) ( 29 ) ( 511 ) ( 410 ) ( 995 )

Balance as of September 30, 2025 $ 77,264 $ 189,600 $ 100,273 $ 52,734 $ 419,871

During the three and nine months ended September 30, 2025 and 2024, 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.

Based on such assessment, the Company concluded that there was no impairment on goodwill during the three and nine months ended September 30, 2025 and 2024.

Balance as of March 31, 2026 $ 77,224 $ 189,565 $ 99,642 $ 52,228 $ 418,659

During the three months ended March 31, 2026 and 2025, 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.

Based on such assessment, the Company concluded that there was no impairment on goodwill as of March 31, 2026 and 2025.

Other Intangible Assets

Information regarding the Company’s intangible assets is set forth below:

As of September 30, 2025 As of December 31, 2024

Amount Accumulated

Amortization Net

Amount Gross Carrying

As of March 31, 2026 As of December 31, 2025

Gross Carrying

Amount Accumulated Amortization Net

Carrying Amount Gross Carrying

Amount Accumulated Amortization Net

Finite-lived intangible assets:

7 unchanged sentences

Other intangible assets $ 115,057 $ ( 82,079 ) $ 32,978 $ 115,086 $ ( 78,882 ) $ 36,204

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

Three months ended March 31,

Amortization expense $ 3,226 $ 3,246

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

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

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Amortization expense $ 3,310 $ 3,449 $ 9,833 $ 9,606

During the three and nine months ended September 30, 2025 and 2024, there were no indicators of impairment related to intangible assets.

Estimated future amortization expense related to finite-lived intangible assets as of September 30, 2025 was as follows:

2025 (October 1 - December 31) $ 3,302

During the three months ended March 31, 2026 and 2025, there were no indicators of impairment related to intangible assets.

Estimated future amortization expense related to finite-lived intangible assets as of March 31, 2026 was as follows:

2026 (April 1 - December 31) $ 9,550

Total $ 32,078

1 unchanged sentence

Other current assets consist of the following:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Prepaid expenses $ 47,219 $ 26,465

Advance income tax, net 34,587 51,984

Contract assets 24,243 27,083

Prepaid expenses 26,176 21,061

Receivables from statutory authorities 20,992 21,374

4 unchanged sentences

Other assets consist of the following:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Deferred contract fulfillment costs $ 31,450 $ 32,146

Deposits with statutory authorities 7,515 7,859

Lease deposits 7,451 6,495

Prepaid expenses 7,249 6,761

Lease deposits 7,089 7,087

Contract assets 4,594 4,818

4 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

1 unchanged sentence

Accrued expenses and other current liabilities consist of the following:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Accrued expenses $ 54,056 $ 64,220

Payable to statutory authorities 40,492 27,222

Client liabilities 16,753 9,711

Derivative instruments 39,012 15,443

Accrued capital expenditures 3,379 2,059

Client liabilities 12,647 12,601

Contingent consideration 5,000 5,000

Income taxes payable 237 284

Others 20,727 11,012

2 unchanged sentences

Other non-current liabilities consist of the following:

September 30, 2025 December 31, 2024

Deferred transition revenue $ 25,364 $ 18,213

March 31, 2026 December 31, 2025

Retirement benefits $ 42,970 $ 41,632

Deferred transition revenue 27,402 26,139

Derivative instruments 25,317 9,765

Unrecognized tax benefits 2,301 2,176

Contingent consideration — 1,420

Others 1,596 1,689

1 unchanged sentence

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, 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 unaudited 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.

The following table sets forth the changes in AOCI during the nine months ended September 30, 2025 and 2024:

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

The following table sets forth the changes in Accumulated other comprehensive income/(loss) (“AOCI”) during the three months ended March 31, 2026 and 2025:

Accumulated Other Comprehensive Income/(Loss)

6 unchanged sentences

— 8,844 165 9,009

Accumulated other comprehensive loss as of September 30, 2025 $ ( 154,905 ) $ ( 13,516 ) $ ( 556 ) $ ( 168,977 )

Balance as of March 31, 2026 $ ( 180,352 ) $ ( 47,659 ) $ ( 9,363 ) $ ( 237,374 )

Balance as of December 31, 2024 $ ( 146,998 ) $ ( 7,548 ) $ ( 176 ) $ ( 154,722 )

Gain/(Loss) recognized during the period ( 483 ) 7,257 — 6,774

Gain recognized during the period 3,927 9,469 — 13,396

Reclassification to net income (1)

2 unchanged sentences

( 673 ) ( 2,262 ) ( 13 ) ( 2,948 )

Accumulated other comprehensive income/(loss) as of September 30, 2024 $ ( 132,980 ) $ 9,440 $ 947 $ ( 122,593 )

Balance as of March 31, 2025 $ ( 143,744 ) $ 1,257 $ ( 300 ) $ ( 142,787 )

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

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

2 unchanged sentences

The following table sets forth the Company’s assets and liabilities that were recognized at fair value:

Quoted Prices in

Active Markets for

Identical Assets Significant Other

Inputs Significant Other

As of September 30, 2025 (Level 1) (Level 2) (Level 3) Total

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

As of March 31, 2026 (Level 1) (Level 2) (Level 3) Total

Cash equivalents - Money market funds (1)

8 unchanged sentences

Total $ — $ 64,329 $ 5,000 $ 69,329

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

Quoted Prices in

Active Markets for

Identical Assets Significant Other

Inputs Significant Other

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

As of December 31, 2025 (Level 1) (Level 2) (Level 3) Total

9 unchanged sentences

Total $ — $ 25,208 $ 5,000 $ 30,208

(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”.

(3) Contingent consideration is presented under “Accrued Expenses and Other Current Liabilities” and “Other Non-Current Liabilities,” as applicable, in the consolidated balance sheets.

(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”, in the consolidated balance sheets.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

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.

6 unchanged sentences

The following table summarizes the changes in the fair value of contingent consideration:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Opening balance $ 5,000 $ 2,700

Acquisitions — 7,700 — 7,700

Fair value changes — —

Payments — — — ( 15,000 )

Closing balance $ 5,000 $ 2,700

During the three and nine months ended September 30, 2025 and 2024, there were no transfers among Level 1, Level 2 and Level 3.

During the three months ended March 31, 2026 and 2025, there were no transfers among Level 1, Level 2 and Level 3.

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

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

Financial Instruments Not Carried at Fair Value :

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.

Derivatives and Hedge Accounting

3 unchanged sentences

The following table sets forth the aggregate notional amount of derivatives in cash flow hedging relationship:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Foreign currency forward contracts denominated in:

1 unchanged sentence

dollar (USD) 13,344 12,075

The Company estimates that approximately $ 8,660 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 September 30, 2025, could be reclassified into earnings within the next twelve months.

As of September 30, 2025, the maximum outstanding term of the cash flow hedges was approximately 45 months.

The Company estimates that approximately $ 35,560 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 March 31, 2026, could be reclassified into earnings within the next twelve months.

As of March 31, 2026, the maximum outstanding term of the cash flow hedges was approximately 39 months.

The Company also enters into foreign currency forward contracts to hedge its intercompany balances and other monetary assets and liabilities denominated in currencies other than functional currencies, against the risk of fluctuations in foreign currency exchange rates associated with remeasurement of such assets and liabilities to functional currency.

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 unaudited consolidated statements of income and are included in the foreign exchange gain/(loss) line item.

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

The following table sets forth the aggregate notional principal amounts of outstanding foreign currency forward contracts for derivatives not designated as hedging instruments:

Foreign currency forward contracts denominated in:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Sell USD 267,185 217,040

2 unchanged sentences

Sell AUD 4,301 4,917

(1) This includes $ 5,455 and $ 10,006 related to USD purchases against sale of ZAR 94,303 and ZAR 188,373 as of September 30, 2025 and December 31, 2024, respectively.

Buy USD 1,357 1,837

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

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

September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024

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

March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025

Other current assets $ 3,148 $ 4,444 $ 219 $ 196

Other assets $ 584 $ 1,424 $ — $ —

Accrued expenses and other

current liabilities $ 12,560 $ 7,404 $ 317 $ 50

Accrued expenses and other current liabilities $ 38,708 $ 15,383 $ 304 $ 60

Other non-current liabilities $ 25,317 $ 9,765 $ — $ —

The following table sets forth the effect of foreign currency forward contracts and interest rate swaps on AOCI and the unaudited consolidated statements of income:

Three months ended September 30, Nine months ended September 30,

The following table sets forth the effect of foreign currency forward contracts on AOCI and the unaudited consolidated statements of income:

Three months ended March 31,

Derivative financial instruments:

2025 2024 2025 2024

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

Derivatives in cash flow hedging relationships $ ( 45,935 ) $ 9,469

Loss recognized in unaudited consolidated statements of income

Derivatives not designated as hedging instruments $ ( 7,273 ) $ ( 259 ) $ ( 8,559 ) $ ( 2,332 )

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

The following table sets forth the location and amount of gain/(loss) recognized in unaudited consolidated statements of income for derivatives in cash flow hedging relationships and derivatives not designated as hedging instruments:

Three months ended September 30,

As per unaudited consolidated

statements of

income Gain/(loss) on derivative financial instruments As per unaudited consolidated

statements of

income Gain/(loss) on derivative financial instruments

Derivatives in cash flow hedging relationships

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

Revenues, net $ 529,585 $ ( 816 ) $ 472,073 $ —

Cost of revenues $ 325,649 ( 764 ) $ 293,806 518

General and administrative expenses $ 66,251 ( 99 ) $ 57,495 77

Selling and marketing expenses $ 46,383 ( 21 ) $ 37,568 9

Depreciation and amortization expense $ 15,128 64 $ 13,799 38

Interest expense $ 4,923 — $ 5,526 240

Total before tax ( 1,636 ) 882

Income tax effects on above 354 ( 107 )

Net of tax $ ( 1,282 ) $ 775

Gain/(loss) recognized in unaudited consolidated statements of income

Derivatives not designated as hedging instruments $ ( 10,461 ) $ 480

Location in unaudited consolidated statements of income where gain/(loss) was recognized

Foreign exchange gain/(loss), net $ ( 1,013 ) $ ( 7,273 ) $ 278 $ ( 259 )

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

Nine months ended September 30,

As per unaudited consolidated

statements of

income Gain/(loss) on derivative financial instruments As per unaudited consolidated

statements of

income Gain/(loss) on derivative financial instruments

Three months ended March 31,

As per unaudited consolidated statements of income Gain/(loss) on derivative financial instruments As per unaudited consolidated statements of income Gain/(loss) on derivative financial instruments

Derivatives in cash flow hedging relationships

5 unchanged sentences

Depreciation and amortization expense $ 14,003 ( 8 ) $ 13,557 ( 15 )

Interest expense $ 13,349 — $ 14,145 723

Total before tax ( 4,922 ) ( 1,598 )

3 unchanged sentences

Location in unaudited consolidated statements of income where gain/(loss) was recognized

Foreign exchange gain/(loss), net $ 2,390 $ ( 8,559 ) $ 673 $ ( 2,332 )

The following tables summarizes the Company’s debt position under its credit agreement with Citibank, N.A:

September 30, 2025 December 31, 2024

Foreign exchange gain, net $ 1,135 $ ( 10,461 ) $ 1,192 $ 480

The following table summarizes the Company’s debt position:

March 31, 2026 December 31, 2025

Revolving credit facility Term loan facility Total Revolving credit facility Term loan facility Total

6 unchanged sentences

Borrowings $ 325,000 $ 92,377 $ 417,377 $ 205,000 $ 93,598 $ 298,598

Unamortized debt issuance costs for the Company’s revolving credit facility of $ 410 and $ 507 as of March 31, 2026 and December 31, 2025, respectively, are presented under “Other current assets” and “Other assets,” as applicable, in the consolidated balance sheets.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

Unamortized debt issuance costs for the Company’s revolving credit facility of $ 604 and $ 895 as of September 30, 2025 and December 31, 2024, respectively, are presented under “Other current assets” and “Other assets,” as applicable in the consolidated balance sheets.

Credit Agreement

2 unchanged sentences

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 increases revolving credit commitments to $ 500,000 and provides a new term loan facility of $ 100,000 with an annual repayment amount of 5 %.

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.

4 unchanged sentences

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

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Revolving credit facility 5.1 % 5.8 %

Term loan facility 5.1 % 5.7 %

As of September 30, 2025 and December 31, 2024, the Company was in compliance with the financial covenants under the 2024 Credit Agreement.

The maturity profile of the Company’s long-term borrowings, excluding debt issuance costs, outstanding as of September 30, 2025 was as follows:

As of March 31, 2026 and December 31, 2025, the Company was in compliance with the financial covenants under the 2024 Credit Agreement.

The maturity profile of the Company’s long-term borrowings, excluding debt issuance costs, outstanding as of March 31, 2026 was as follows:

Revolving credit facility Term loan facility

2025 (October 1 - December 31) $ — $ 1,250

2026 (April 1 - December 31) $ — $ 3,750

2027 325,000 88,750

2 unchanged sentences

In the ordinary course of business, the Company provides standby letters of credit to third parties primarily for facility leases.

As of September 30, 2025 and December 31, 2024, the Company had outstanding letters of credit of $ 741 and $ 761 , respectively, that were not recognized in the consolidated balance sheets.

As of March 31, 2026 and December 31, 2025, the Company had outstanding letters of credit of $ 1,137 and $ 1,598 , respectively, that were not recognized in the consolidated balance sheets.

Capital Structure

2 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

2 unchanged sentences

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

Three months ended September 30, 2025 — $ — $ —

Three months ended September 30, 2024 91,565 $ 3,346 $ 36.54

Nine months ended September 30, 2025 190,716 $ 9,432 $ 49.46

Nine months ended September 30, 2024 291,967 $ 9,721 $ 33.29

Three months ended March 31, 2026 129,695 $ 4,847 $ 37.37

Three months ended March 31, 2025 190,716 $ 9,432 $ 49.46

(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 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 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.

On February 19, 2026, the Company’s board of directors authorized a $ 500,000 (excluding excise tax) common stock repurchase program effective February 28, 2026 (the “2026 Repurchase Program”), which replaced the 2024 repurchase program.

On March 16, 2026, the Company entered into the 2026 ASR Agreement with Morgan Stanley to repurchase shares of its common stock for an aggregate purchase price of $ 125,000 , as part of the Company’s 2026 Repurchase Program.

Upon payment of the aggregate purchase price of $ 125,000 , the Company received an initial delivery of 3,346,720 shares of its common stock at an initial price of $ 29.88 per share, representing 80 % of the aggregate purchase price.

3 unchanged sentences

Under the terms of the 2026 ASR Agreement, the ultimate number of shares of common stock that the Company will repurchase will be based on the average of the daily volume-weighted average price of the common stock during the term of the 2026 ASR Agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the 2026 ASR Agreement.

At final settlement, Citibank may be required to deliver additional shares of Common Stock to the Company, or, under certain circumstances, the Company may be required to make a cash payment or deliver shares of Common Stock at its election to Citibank.

The final settlement of the 2025 ASR Agreement is expected to be completed on December 1, 2025, subject to acceleration at Citibank’s discretion, which could be completed as early as October 30, 2025.

At final settlement, Morgan Stanley may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to make a cash payment or deliver shares of common stock at its election to Morgan Stanley.

The final settlement of the 2026 ASR Agreement is expected to be completed on June 16, 2026, subject to acceleration at Morgan Stanley’s discretion, which may occur on or after the lock-out date of April 10, 2026.

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.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

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

Three months ended September 30, 2025 3,074,076 $ 133,467 $ 43.42

Three months ended September 30, 2024 1,738,114 $ 59,346 $ 34.14

Nine months ended September 30, 2025 4,155,289 $ 183,278 $ 44.11

Nine months ended September 30, 2024 6,012,285 $ 187,599 $ 31.20

Three months ended March 31, 2026 4,375,106 $ 135,803 $ 31.04

Three months ended March 31, 2025 175,063 $ 8,058 $ 46.03

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, 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 $ 694 and $ 412 , during the three months ended September 30, 2025 and 2024, respectively, and $ 665 and $ 1,030 , during the nine months ended September 30, 2025 and 2024, respectively.

The Company recognized excise tax of $ 786 and $ nil during the three months ended March 31, 2026 and 2025, respectively.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

Employee Benefit Plans

8 unchanged sentences

These funds are managed on a cash accumulation basis, inclusive of interest, which is declared periodically.

The Company expects to earn a return of approximately 7.0 % per annum on the India Plan for the year ending December 31, 2025.

The Company expects to earn a return of approximately 6.5 % per annum on the India Plan for the year ending on December 31, 2026.

Change in Plan Assets

4 unchanged sentences

Currency translation adjustments ( 1,271 )

Plan assets as of September 30, 2025

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

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

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Plan assets as of March 31, 2026 $ 22,973

During the year ended December 31, 2025, the implementation of the new Labor Codes in India resulted in the recognition of prior service cost in OCI.

During March 2026, following the implementation of a revised salary structure, the Company performed an updated actuarial valuation and recognized additional prior service cost of $ 1,177 in OCI.

The prior service cost recognized is being amortized over the estimated remaining service period of the defined benefit obligation.

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

Three months ended March 31,

Service cost $ 2,023 $ 1,383

1 unchanged sentence

Expected return on plan assets ( 413 ) ( 345 )

Amortization of actuarial (gain)/loss, gross of tax ( 113 ) ( 153 ) ( 341 ) ( 455 )

Net gratuity cost $ 1,407 $ 1,041 $ 4,298 $ 3,099

Amortization of actuarial (gain)/loss, gross of tax $ ( 113 ) $ ( 153 ) $ ( 341 ) $ ( 455 )

Income tax effects on above ( 13 ) ( 1 ) ( 39 ) ( 3 )

Amortization of actuarial (gain)/loss, net of tax $ ( 126 ) $ ( 154 ) $ ( 380 ) $ ( 458 )

Reclassification of retirement benefits from AOCI:

Amortization of actuarial gain ( 183 ) ( 111 )

Amortization of prior service cost 521 —

Net periodic benefit cost $ 2,677 $ 1,436

Reclassification of retirement benefits from AOCI, gross of tax $ 338 $ ( 111 )

Income tax effects ( 131 ) ( 13 )

Reclassification of retirement benefits from AOCI, net of tax $ 207 $ ( 124 )

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

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.

1 unchanged sentence

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

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Contribution to the 401(k) Plans $ 3,018 $ 2,795

Contributions to the defined contribution plans in foreign subsidiaries of the Company $ 8,907 $ 7,785

$ 8,291 $ 7,112 $ 24,768 $ 20,752

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 UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

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

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Finance lease:

1 unchanged sentence

Interest on lease liabilities 80 69

236 164 661 395

Operating lease (1)

6,414 5,995 19,121 17,088

Variable lease costs 1,085 1,073

2 unchanged sentences

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

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

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

Nine months ended September 30,

Three months ended March 31,

Cash payments for amounts included in the measurement of lease liabilities :

11 unchanged sentences

As part of the Company’s efforts to optimize its existing network of operations centers, the Company continued to evaluate its office facilities to determine where it can exit or consolidate its use of office space.

The Company modified certain of its operating leases, resulting in an increase of its lease liabilities by $ 5,766 and $ 3,383 , during the nine months ended September 30, 2025 and 2024, respectively, with a corresponding adjustment to ROU assets.

As of September 30, 2025 and December 31, 2024, the Company did not have any significant leases that have not yet commenced but that create significant rights and obligations for the Company.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

Maturities of lease liabilities as of September 30, 2025 were as follows:

The Company modified certain of its operating leases, resulting in an increase in lease liabilities by $ 1,336 during the three months ended March 31, 2026 and a decrease by $ 234 during the three months ended March 31, 2025, respectively, with a corresponding adjustment to ROU assets.

As of March 31, 2026 and December 31, 2025, the Company did not have any significant leases that have not yet commenced but that create significant rights and obligations for the Company.

Maturities of lease liabilities as of March 31, 2026 were as follows:

Operating Leases Finance Leases

2025 (October 1 - December 31) $ 6,149 $ 840

2026 (April 1 - December 31) $ 18,027 $ 891

2027 24,151 794

6 unchanged sentences

Present value of lease liabilities $ 101,202 $ 2,108

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

The Company determines the tax provision for interim periods using an estimate of its annual effective tax rate.

Each quarter, the Company updates its estimate of annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment.

The effective tax rate decreased from 22.6 % to 22.1 %, during the three months ended September 30, 2024 and 2025, respectively.

The Company recorded income tax expense of $ 16,456 and $ 15,460 during the three months ended September 30, 2025 and 2024, respectively.

The increase in income tax expense was primarily driven by higher profit, and lower excess tax benefits, partially offset by lower state taxes and a decrease in non-deductible expenses during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The effective tax rate decreased from 22.6 % to 20.3 %, during the nine months ended September 30, 2024 and 2025, respectively.

The Company recorded income tax expense of $ 48,498 and $ 43,086 during the nine months ended September 30, 2025 and 2024, respectively.

The increase in income tax expense was primarily driven by higher profit, and an increase in non-deductible expenses, partially offset by lower state taxes and higher excess tax benefits during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

On July 4, 2025, President Trump signed new tax legislation known as the One Big Beautiful Bill Act (“OBBBA”), which effectively extends certain provisions of the 2017 Tax Cuts and Jobs Act, including adjustments to several provisions that were scheduled to sunset, phase out, or phase in.

As a result of the Company’s election to expense research or experimental expenditures incurred in the United States and the related transition provisions, the Company’s U.S.

cash taxes for 2025 will decrease, while there will be no significant impact on its effective tax rate.

The effective tax rate for the three months ended March 31, 2026 was 26.6 %, an increase from 16.9 % for the three months ended March 31, 2025.

The Company recorded income tax expense of $ 24,318 and $ 13,496 for the three months ended March 31, 2026 and 2025, respectively.

The increase in income tax expense for the three months ended March 31, 2026 was primarily a result of lower excess tax benefits related to stock-based compensation and higher profit, partially offset by a decrease in non-deductible compensation expenses, as compared to the three months ended March 31, 2025.

Deferred income taxes recognized in OCI were as follows:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Deferred taxes benefit/(expense) recognized on:

1 unchanged sentence

Reclassification adjustment for cash flow hedges ( 1,092 ) 382

Retirement benefits 296 —

Reclassification adjustment for retirement benefits ( 131 ) ( 13 )

1 unchanged sentence

Total $ 9,009 $ ( 2,948 )

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

Stock-Based Compensation

Stock-based compensation expense by function, as below, are included in the unaudited consolidated statements of income:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Cost of revenues $ 3,016 $ 3,487

2 unchanged sentences

Total $ 22,101 $ 19,187

Income tax benefit related to share-based compensation (1)

Income tax benefit related to stock-based compensation (1)

$ 1,316 $ 9,105

(1) Includes $ 64 and $ 1,673 during the three months ended September 30, 2025 and 2024, respectively, and $ 14,792 and $ 9,214 during the nine months ended September 30, 2025 and 2024, respectively, related to discrete benefits recognized in income tax expense in accordance with ASU No.

(1) Includes $ 1,280 and $ 14,526 during the three months ended March 31, 2026 and 2025, respectively, related to discrete benefits recognized in income tax expense in accordance with ASU No.

2016-09, Compensation - Stock Compensation .

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 grant 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 September 30, 2025, the Company had 5,702,547 shares available for future grants under the 2025 Plan.

As of March 31, 2026 and December 31, 2025, the Company had 3,395,894 and 5,919,466 shares, respectively, available for future grants under the 2025 Omnibus Incentive Plan (the “2025 Plan”).

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

Stock Options

Stock option activity under the Company’s stock-based compensation plans is shown below:

Number of Options

Weighted Average Exercise Price

Aggregate Intrinsic Value

Weighted Average Remaining Contractual Life (Years)

Outstanding at December 31, 2024 1,768,305 $ 30.14 $ 25,187 8.5

Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (Years)

Outstanding as of December 31, 2025 1,734,720 $ 30.14 $ 21,344 7.5

Granted — — — —

1 unchanged sentence

Forfeited — — — —

Outstanding at September 30, 2025 1,734,720 $ 30.14 $ 24,102 7.7

Vested and exercisable at September 30, 2025 861,740 $ 30.14 $ 11,973 7.7

Outstanding as of March 31, 2026 1,734,720 $ 30.14 $ 545 7.2

Vested and exercisable as of March 31, 2026

861,740 $ 30.14 $ 271 7.2

Weighted average grant date fair value of per unit of stock option granted during the period $ —

As of September 30, 2025, unrecognized compensation cost of $ 9,067 is expected to be expensed over a weighted average period of 1.8 years.

As of March 31, 2026, unrecognized compensation cost of $ 6,450 is expected to be expensed over a weighted average period of 1.3 years.

Share Matching Program

Under the Company’s 2018 Plan, the Company established a share matching program (“SMP”) for executive officers and other specified employees.

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 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.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

Restricted stock unit activity under the SMP is shown below:

Restricted Stock Units (SMP)

Number Weighted Average

Outstanding as of December 31, 2024* 144,845 $ 24.95

Vested* ( 144,845 ) 24.95

Forfeited — —

Outstanding as of September 30, 2025* — $ —

* As of September 30, 2025 and December 31, 2024 restricted stock units vested for which the underlying common stock is yet to be issued are 217,230 and 72,385 , respectively.

As of March 31, 2026 and December 31, 2025 restricted stock units vested for which the underlying common stock is yet to be issued are nil and 31,662 , respectively.

Restricted Stock Units

3 unchanged sentences

Outstanding as of December 31, 2025 (1)

2,789,601 $ 37.65

Granted 1,518,404 30.91

1 unchanged sentence

Forfeited ( 41,653 ) 37.39

Outstanding as of September 30, 2025* 2,843,050 $ 37.60

* As of September 30, 2025 and December 31, 2024 restricted stock units vested for which the underlying common stock is yet to be issued are 346,431 and 289,547 , respectively.

As of September 30, 2025, unrecognized compensation cost of $ 80,207 is expected to be expensed over a weighted average period of 2.7 years.

Outstanding as of March 31, 2026 (1)

3,278,076 $ 35.55

(1) As of March 31, 2026 and December 31, 2025 restricted stock units vested for which the underlying common stock is yet to be issued are 294,376 and 348,636 , respectively.

As of March 31, 2026, unrecognized compensation cost of $ 104,444 is expected to be expensed over a weighted average period of 3.0 years.

Performance-Based Stock Awards

Under the Company’s equity incentive plans, the Company grants performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees.

During the nine months ended September 30, 2025, under the 2025 Plan and the 2018 Plan, 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 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 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

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

March 31, 2026

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

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”).

PRSU activity under the Company’s stock plans is shown below:

6 unchanged sentences

Forfeited ( 5,918 ) 38.93 ( 8,873 ) 59.55

Outstanding as of September 30, 2025 767,068 $ 36.70 1,150,113 $ 53.33

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

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

As of September 30, 2025, unrecognized compensation cost of $ 45,697 is expected to be expensed over a weighted average period of 1.8 years.

Outstanding as of March 31, 2026 1,099,777 $ 36.11 1,446,871 $ 47.85

As of March 31, 2026, unrecognized compensation cost of $ 74,470 is expected to be expensed over a weighted average period of 2.1 years.

Employee Stock Purchase Plan

4 unchanged sentences

The Company has reserved 4,000,000 shares of common stock for issuance under the 2022 ESPP.

The seventh offering period under the 2022 ESPP commenced on July 1, 2025 with a term of six months .

The eighth offering period under the 2022 ESPP commenced on January 1, 2026 with a term of six months .

Activity under the Company’s 2022 ESPP is shown below:

Total Proceeds Received

Number Total Proceeds Received

Shares available for issuance as of December 31, 2025 3,510,269

Issuance of common stock related to the:

Fifth offering period

64,939 $ 1,823

Sixth offering period

97,536 $ 3,844

Shares available for issuance as of September 30, 2025

Contributions received for the seventh offering period up to September 30, 2025

Issuance of common stock made during the seventh offering period 60,139 $ 2,297

Shares available for issuance as of March 31, 2026 3,450,130

Contributions received for the eighth offering period up to March 31, 2026

Related Party Disclosures

The Company provides data and AI-led services to Corridor Platforms, Inc., which is an equity affiliate of the Company.

The Company recognized revenues, net of $ 42 and $ 80 during the three months ended September 30, 2025 and 2024, respectively, and $ 126 and $ 382 during the nine months ended September 30, 2025 and 2024, respectively.

The Company had outstanding accounts receivable, net of $ 14 and $ 56 , related to this service contract as of September 30, 2025 and December 31, 2024, respectively.

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 $ 84 and $ 42 during the three months ended March 31, 2026 and 2025, respectively.

The Company had outstanding accounts receivable, net of $ 28 related to this service contract as of March 31, 2026 and December 31, 2025.

Commitments and Contingencies

Capital Commitments

As of September 30, 2025 and December 31, 2024, the Company had committed to spend approximately $ 6,000 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 in growth-stage technology companies.

The Company committed to make an aggregate investment of $ 4,000 in the Partnership.

As of September 30, 2025, the Company has invested $ 2,400 in the Partnership and is committed to make further investments up to an amount of $ 1,600 .

As of March 31, 2026 and December 31, 2025, the Company had committed to spend approximately $ 10,000 and $ 8,700 , respectively, net of capital advances, under agreements to purchase property and equipment.

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

with the name Plug and Play Financial Services Fund I, L.P.

(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 March 31, 2026, 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

12 unchanged sentences

The Company is currently involved in transfer pricing and related income tax disputes with Indian tax authorities.

The aggregate amount demanded by Indian tax authorities (net of advance payments) as of September 30, 2025 and December 31, 2024 is $ 46,645 and $ 49,588 , respectively.

The Company has made payments and/or provided bank guarantees against these demands in the amounts of $ 7,757 and $ 7,506 , as of September 30, 2025 and December 31, 2024, respectively.

The aggregate amount demanded by Indian tax authorities (net of advance payments) as of March 31, 2026 and December 31, 2025 is $ 44,429 and $ 42,205 , respectively.

The Company has made payments and/or provided bank guarantees against these demands in the amounts of $ 7,282 and $ 7,684 , as of March 31, 2026 and December 31, 2025, respectively.

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.

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 $ 5,249 and $ 5,339 , as of September 30, 2025 and December 31, 2024, respectively.

The Company has provided bank guarantees against these demands in the amounts of $ 5,148 and $ 5,339 , as of September 30, 2025 and December 31, 2024, 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 $ 4,915 and $ 5,186 , as of March 31, 2026 and December 31, 2025, respectively.

The Company has made payments and/or provided bank guarantees against these demands in the amounts of $ 4,823 and $ 5,090 , as of March 31, 2026 and December 31, 2025, 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 $ 5,537 and $ 5,885 as of September 30, 2025 and December 31, 2024, respectively.

The Indian Goods and Services Tax (“GST”) authorities rejected the Company’s refund claims in the amounts of $ 5,207 and $ 5,494 as of March 31, 2026 and December 31, 2025, 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 allowance was recorded against these GST receivables as of September 30, 2025 and December 31, 2024, respectively.

Accordingly, no allowances were recorded against these GST receivables as of March 31, 2026 and December 31, 2025, respectively.

Some of the Company’s subsidiaries in India have undergone assessments with the statutory authority with respect to defined contribution plan.

3 unchanged sentences

The Company will continue to monitor and evaluate its position based on future events and developments on these matters.

From time to time, the Company, its subsidiaries, and/or their present officers or directors, may be or have been, named as a defendant in litigation matters, including employment-related claims.

The plaintiffs in those cases seek damages, including, where applicable, compensatory damages, punitive damages and attorney’s fees.

With respect to pending litigation matters as of the reporting date, the Company believes that the damages claimed are without merit, and the Company intends to vigorously

EXLSERVICE HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)

September 30, 2025

March 31, 2026

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

From time to time, the Company, its subsidiaries, and/or their present officers or directors, may be or have been, named as a defendant in litigation matters, including employment-related claims.

The plaintiffs in those cases seek damages, including, where applicable, compensatory damages, punitive damages and attorney’s fees.

With respect to pending litigation matters as of the reporting date, the Company believes that the damages claimed are without merit, and the Company intends to vigorously defend them.

The Company will continuously monitor developments on these matters to assess potential impacts to the financial statements.

4 unchanged sentences

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-Q

Item 1. Financial Statements