Data analytics and digital solutions company ExlService Holdings (NASDAQ: EXLS) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 15.6% year on year to $594.8 million. The company’s full-year revenue guidance of $2.40 billion at the midpoint came in 3.1% above analysts’ estimates. Its non-GAAP profit of $0.59 per share was 7.8% above analysts’ consensus estimates.

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Chairman and Chief Executive Officer Rohit Kapoor said, “We entered 2026 with strong momentum that accelerated through the first half, delivering second quarter revenue growth of 16% year-on-year and adjusted diluted EPS of 22% year-on-year. Our sustained double-digit growth reflects continued execution of our data and AI strategy and our differentiated position which helps clients effectively adopt AI across the enterprise. We have very good visibility into the balance of the year and look forward to a solid finish to 2026.”

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

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $2.24 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 grew its sales at an incredible 16.9% compounded annual growth rate over the last five years. 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 14.4% 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 15.6%, and its $594.8 million of revenue exceeded Wall Street’s estimates by 3.5%.

Looking ahead, sell-side analysts expect revenue to grow 10.2% over the next 12 months, a deceleration versus the last two years. Still, this projection is healthy and indicates the market is forecasting 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 19.2%.

Looking at the trend in its profitability, EXL’s adjusted operating margin rose by 1.1 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, EXL generated an adjusted operating margin profit margin of 18.8%, 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 19% compounded annual growth rate over the last five years, higher than its 16.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of EXL’s earnings can give us a better understanding of its performance. As we mentioned earlier, EXL’s adjusted operating margin was flat this quarter but expanded by 1.1 percentage points over the last five years. On top of that, its share count shrank by 11.1%. 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 shorter period to see if we are missing a change in the business.

For EXL, its two-year annual EPS growth of 19.7% is similar to its five-year trend, implying strong and stable earnings power.

In Q2, EXL reported adjusted EPS of $0.59, up from $0.49 in the same quarter last year. This print beat analysts’ estimates by 7.8%. Over the next 12 months, Wall Street expects EXL’s full-year EPS to grow 9.2% from $2.15 to $2.35.

Key Takeaways from EXL’s Q2 Results

We enjoyed seeing EXL beat analysts’ revenue expectations this quarter. We were also glad its full-year revenue guidance exceeded Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 2.3% to $31.25 immediately after reporting.

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. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).