EXL posts 16% revenue growth as AI services demand accelerates
ExlService Holdings (NASDAQ: EXLS), a New York-headquartered data and AI services company with more than 68,000 employees across six continents, has reported second-quarter 2026 revenues of $594.8 million, up 15.6% year-on-year, as corporate demand for AI-enabled analytics and process transformation continues to outpace the broader IT services market.
The results pushed the company to raise its full-year 2026 organic revenue growth guidance to 13–14%, with total reported revenue now forecast at $2.39 billion to $2.415 billion, a range that incorporates $28 million to $32 million of anticipated contribution from the pending acquisition of iMerit, expected to close on 31 July 2026. Adjusted diluted EPS guidance was lifted to $2.25–$2.29, representing 16–18% growth over 2025.
Foundation models meet financial services
The iMerit deal is the quarter's most strategically significant move. iMerit specialises in AI data labelling and foundation-model development services, capabilities that sit upstream of the AI deployment work EXL sells into its insurance, healthcare and banking client base. By absorbing iMerit, EXL is effectively vertically integrating: rather than relying on third-party training data and model-fine-tuning capacity, it will own that layer of the stack. Chief Financial Officer Maurizio Nicolelli framed the rationale in performance terms, noting that "strong second quarter performance, sustained growth momentum and healthy pipeline" gave management confidence to absorb the acquisition into upgraded guidance rather than treat it as dilutive noise.
Segment performance underlines where AI-driven transformation spend is concentrating. Healthcare and Life Sciences grew to $158 million in Q2, up from $129.5 million a year earlier, with gross margins expanding from 43.5% to 46.9%, a signal that higher-value AI analytics work is displacing lower-margin transactional processing within that vertical. Insurance, EXL's largest segment at $197.8 million, grew 14.9% year-on-year, though gross margin edged down slightly. Banking, Capital Markets and Diversified Industries posted $133.9 million, a 10.6% increase.
Ecosystem positioning and the platform race
Beyond the iMerit acquisition, EXL used the quarter to accelerate its position within the generative-AI platform ecosystem. The company became an OpenAI Services Partner and joined Anthropic's Claude Partner Network, while simultaneously achieving gold status with Databricks, Premier Partner status with Snowflake, and integrating with NVIDIA's Transaction Foundation Model for fraud detection in financial services. Taken together, these moves suggest EXL is deliberately spreading its bets across competing AI platform stacks rather than committing to a single vendor, a posture that gives its enterprise clients optionality while insulating EXL from any single platform's commercial terms.
This matters beyond EXL's own P&L. For Disrupts readers watching capital flows across the AI-to-enterprise adoption curve, the pattern is instructive. Large outsourcing and professional-services firms are quietly becoming the connective tissue between foundation-model providers and regulated industries, insurance carriers, hospital networks, and banks, that cannot or will not build bespoke AI capabilities in-house. EXL's revenue trajectory suggests this intermediary layer is monetising faster than many market observers expected twelve months ago.
Macro read-across
The scale of EXL's offshore delivery footprint, India, the Philippines and other emerging-market hubs, also places these results in a broader geopolitical frame. The company's guidance embeds specific currency assumptions (the US dollar at 95 Indian rupees, sterling at 1.33 to the dollar), and operating income margin compressed slightly year-on-year to 14.7% from 15.8%, in part reflecting the cost of building out AI capability and integrating acquisitions. For sovereign-wealth and institutional investors tracking the global AI-services market, EXL's willingness to absorb short-term margin pressure in exchange for ecosystem positioning is a data point worth weighing against the more capital-light rhetoric coming from pure-play AI software vendors.
The company the company says it has good visibility into the second half of 2026. Whether the iMerit integration delivers the foundation-model differentiation management is forecasting, or proves a costly distraction during a period of rapid platform consolidation, will be the question to watch when Q3 numbers land in October.