Data analytics and digital solutions company ExlService Holdings (NASDAQ: EXLS) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 13.8% year on year to $570.4 million. The company expects the full year’s revenue to be around $2.32 billion, close to analysts’ estimates. Its non-GAAP profit of $0.58 per share was 8.4% above analysts’ consensus estimates.

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Chairman and Chief Executive Officer Rohit Kapoor said, “We entered 2026 with strong momentum, delivering revenue growth of 14% and increased our adjusted diluted EPS by 20% year-over-year. Our sustained double-digit growth demonstrates the strength of our competitive position as well as strong execution against our data and AI strategy. EXL’s recognized industry expertise and leadership in helping clients adopt AI throughout their enterprise is resonating strongly with the market.”

Company Overview

Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ: EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $2.16 billion in revenue over the past 12 months, EXL is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, EXL’s 17.2% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows EXL’s demand was higher than many business services companies.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. EXL’s annualized revenue growth of 13.8% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, EXL reported year-on-year revenue growth of 13.8%, and its $570.4 million of revenue exceeded Wall Street’s estimates by 2%.

Looking ahead, sell-side analysts expect revenue to grow 9.5% over the next 12 months, a deceleration versus the last two years. Still, this projection is noteworthy and implies the market sees success for its products and services.

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Adjusted Operating Margin

EXL has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average adjusted operating margin of 19.1%.

Looking at the trend in its profitability, EXL’s adjusted operating margin rose by 1.3 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q1, EXL generated an adjusted operating margin profit margin of 20%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

EXL’s EPS grew at 21.4% compounded annual growth rate over the last five years, higher than its 17.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into EXL’s earnings to better understand the drivers of its performance. As we mentioned earlier, EXL’s adjusted operating margin was flat this quarter but expanded by 1.3 percentage points over the last five years. On top of that, its share count shrank by 8.6%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For EXL, its two-year annual EPS growth of 18.3% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q1, EXL reported adjusted EPS of $0.58, up from $0.48 in the same quarter last year. This print beat analysts’ estimates by 8.4%. Over the next 12 months, Wall Street expects EXL’s full-year EPS of $2.05 to grow 9.5%.

Key Takeaways from EXL’s Q1 Results

It was good to see EXL beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 6.5% to $32.66 immediately following the results.

EXL had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).