ExlService Holdings Inc Reports 15% YoY Revenue Growth, Strong Data and AI-Led Growth, and 20% YoY Increase in Adjusted EPS

ExlService Holdings Inc reported Q2 2025 revenue of $514 million, a 15% YoY increase, with data and AI-led revenue growing 17% YoY to 54% of total revenue. The Health Care and Life Sciences segment saw a 22% YoY increase, driven by demand for data and AI solutions. However, the adjusted operating margin was 19.6%, down 20 basis points YoY, due to investments in new solutions. The company anticipates a slightly lower growth rate in the digital operations business and EPS guidance suggests a potential decline YoY due to increased investments.

ExlService Holdings Inc (NASDAQ: EXLS) has reported robust financial performance for the second quarter of 2025, with revenue of $514 million, marking a 15% year-over-year (YoY) increase. The company's adjusted earnings per share (EPS) reached $0.49, representing a 20% YoY growth. This positive performance was driven by strong growth in the data and AI-led revenue segment, which increased by 17% YoY to account for 54% of total revenue [1].

The Health Care and Life Sciences segment experienced the fastest growth, with a 22% YoY increase, driven by the rising demand for data and AI solutions. The segment's revenue reached $129.5 million, highlighting the company's strong position in the healthcare industry [1].

Despite the impressive growth, the adjusted operating margin for the quarter was 19.6%, down 20 basis points YoY. This decline was primarily attributed to increased investments in new solutions, which are expected to drive future growth [1].

The company's guidance for 2025 revenue has been raised to a range of $2.05 billion to $2.07 billion, reflecting a 12% to 13% YoY growth. Adjusted diluted EPS expectations have also been increased to a range of $1.86 to $1.90, indicating a 13% to 15% rise over 2024 [1].

However, the company anticipates a slightly lower growth rate in the digital operations business compared to data and AI-led operations. The EPS guidance for the second half of the year suggests a potential decline YoY due to increased investments [1].

Employee costs increased by 16% to 17% YoY, outpacing the 9% increase in employee numbers, reflecting higher costs for skilled talent [1].

In addition to the strong financial performance, ExlService Holdings has been actively engaging in strategic activities to bolster its market position. The company announced a $125 million accelerated share repurchase agreement with Citibank, as part of its $500 million stock repurchase program [3]. This move underscores the company's confidence in its financial health and commitment to enhancing shareholder value.

ExlService Holdings has also been recognized as a Microsoft Solutions Partner for Data and AI, highlighting its advanced capabilities in delivering transformative analytics and AI solutions. Furthermore, the company expanded its partnership with Databricks to deploy a generative AI-enabled SAS to Databricks Data Intelligence Platform migration solution, leveraging its Code Harbor™ to support enhanced cloud modernization initiatives [3].

References:
[1] https://ca.finance.yahoo.com/news/exlservice-holdings-inc-exls-q2-072309335.html
[2] https://finance.yahoo.com/news/exlservice-holdings-second-quarter-2025-110213883.html
[3] https://www.ainvest.com/news/exlservice-holdings-2025-q2-earnings-strong-performance-net-income-grows-44-2507/