ExlService Holdings, Inc.

Previous wording

•our ability to maintain and grow client demand for our services and solutions, including anticipating and incorporating the latest technologies, for instance, artificial intelligence (“AI”), including generative AI, agentic AI into our offerings;

Current wording

•our ability to maintain and grow client demand for our services and solutions, including anticipating and incorporating the latest technologies, for instance, artificial intelligence (“AI”), including generative AI and agentic AI into our offerings;

Previous wording

On June 22, 2026, we, through our wholly owned subsidiary Clairvoyant AI, Inc. entered into a securities purchase agreement (the “Purchase Agreement”) to acquire 100% of the equity securities of I Merit Inc., a Delaware Corporation (“iMerit”), in exchange for upfront cash consideration of $170 million, subject to certain post-closing adjustments, and up to an additional $140 million in cash incentives and earnouts over two years contingent on meeting specified milestones, as set forth in the Purchase Agreement. iMerit is a recognized leader in AI model training, evaluation and reinforcement learning. It is focused on helping its clients train large language and multimodal models to improve accuracy, precision, and effectiveness. The acquisition strengthens our ability to help enterprises achieve measurable outcomes from AI, builds partnerships with leading foundation model builders and expands its reach into high-growth AI tech sectors. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions, including expiration or termination of the waiting period for applicable antitrust regulations.

Current wording

On July 31, 2026, we completed the acquisition of I Merit Inc., a Delaware Corporation (“iMerit”), a recognized leader in AI model training, evaluation and reinforcement learning, through our wholly owned subsidiary Clairvoyant AI, Inc. pursuant to a securities purchase agreement dated June 22, 2026. It is focused on helping its clients train large language and multimodal models to improve accuracy, precision, and effectiveness. The acquisition strengthens our ability to help enterprises achieve measurable outcomes from AI, build partnerships with leading foundation model builders and expands our reach into high-growth AI tech sectors.

Previous wording

For the three months ended June 30, 2026, we generated revenues of $594.8 million compared to revenues of $514.5 million for the three months ended June 30, 2025, an increase of $80.3 million, or 15.6%. For the six months ended June 30, 2026, we generated revenues of $1,165.1 million compared to revenues of $1,015.5 million for the six months ended June 30, 2025, an increase of $149.6 million, or 14.7%.

Current wording

For the three months ended September 30, 2026, we generated revenues of $634.0 million compared to revenues of $529.6 million for the three months ended September 30, 2025, an increase of $104.4 million, or 19.7%. For the nine months ended September 30, 2026, we generated revenues of $1,799.1 million compared to revenues of $1,545.1 million for the nine months ended September 30, 2025, an increase of $254.0 million, or 16.4%.

Previous wording

We serve clients mainly in North America, and the United Kingdom & Europe, with these two regions generating 82.3% and 15.0%, respectively, of our total revenues for the three months ended June 30, 2026, and 82.2% and 15.1%, respectively, of our total revenues for the three months ended June 30, 2025. For the six months ended June 30, 2026, these two regions generated 82.6% and 14.8%, respectively, of our total revenues and 82.5% and 14.8%, respectively, of our total revenues for the six months ended June 30, 2025.

Current wording

We serve clients mainly in North America, and the United Kingdom & Europe, with these two regions generating 82.2% and 15.0%, respectively, of our total revenues for the three months ended September 30, 2026, and 82.5% and 14.9%, respectively, of our total revenues for the three months ended September 30, 2025. For the nine months ended September 30, 2026, these two regions generated 82.5% and 14.9%, respectively, of our total revenues and 82.5% and 14.8%, respectively, of our total revenues for the nine months ended September 30, 2025.

Previous wording

For the three months ended June 30, 2026 and 2025, our total revenues from our top ten clients accounted for 34.1% and 33.5% of our total revenues, respectively. For the six months ended June 30, 2026 and 2025, our total revenues from our top ten clients accounted for 34.3% and 33.6% of our total revenues, respectively. Although we continue to develop relationships with new clients to diversify our client base, we believe that the loss of any of our top ten clients could have a material adverse effect on our financial performance.

Current wording

For the three months ended September 30, 2026 and 2025, our total revenues from our top ten clients accounted for 33.3% and 34.5% of our total revenues, respectively. For the nine months ended September 30, 2026 and 2025, our total revenues from our top ten clients accounted for 34.0% and 33.8% of our total revenues, respectively. Although we continue to develop relationships with new clients to diversify our client base, we believe that the loss of any of our top ten clients could have a material adverse effect on our financial performance.

Previous wording

We provide care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement, commercial analytics and regulatory support services to improve healthcare outcomes, enhanced patient and provider experience, optimized healthcare spending and streamline healthcare administration processes by simplifying complex workflows.

Current wording

We provide care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement, commercial analytics and regulatory support services to improve healthcare outcomes, enhance patient and provider experience, optimize healthcare spending and streamline healthcare administration processes by simplifying complex workflows.

Previous wording

For healthcare payers, we offer payment integrity services, pre and post-pay auditing services, payment analytics, subrogation and claims recovery, care management and patient navigation solutions. For healthcare providers, we offer revenue cycle management, digital transformation, data-driven analytics and contact center solutions. For PBMs, we provide digital transformation, data and analytics and call center modernization. Our life sciences offerings combine domain expertise, data engineering, AI-driven insight generation, and digital operations to deliver outcomes across commercial, clinical, regulatory, and patient support functions. We leverage AI, analytics, and cloud-based solutions to enhance value-based care, optimize claims, and ensure regulatory compliance.

Current wording

For healthcare payers, we offer payment integrity services, pre and post-pay auditing services, payment analytics, subrogation and claims recovery, care management and patient navigation solutions. For healthcare providers, we offer revenue cycle management, digital transformation, data-driven analytics and contact center solutions. For PBMs, we provide digital transformation, data and analytics and call center modernization. Our life sciences offerings combine domain expertise, data engineering, AI-driven insight generation, and digital operations to deliver outcomes across commercial, clinical, regulatory, and patient support functions. Our AI capabilities also include specialized model training, evaluation and reinforcement learning, supported by a global network of domain specialists, including physicians, scientists and other subject matter experts. We leverage AI, analytics, and cloud-based solutions to enhance value-based care, optimize claims, and ensure regulatory compliance.

Previous wording

By integrating deep domain expertise with AI-driven decision-making, we enable financial institutions to innovate, enhance operational agility, and adapt to evolving market demands. We provide risk management solutions, marketing and customer analytics solutions to our clients, along with our integrated operations services that encompass the full range of banking operations, including digital lending solutions that improve underwriting and compliance, omni-channel marketing, digital onboarding, know your customer (“KYC”)/anti-money laundering (“AML”) compliance, collections, fraud prevention, and customer servicing, among others. Our industry-leading AI and automation-driven service offerings drive operational efficiency and foster innovation across the financial services and other industries.

Current wording

By integrating deep domain expertise with AI-driven decision-making, we enable financial institutions to innovate, enhance operational agility, and adapt to evolving market demands. We provide risk management solutions, marketing and customer analytics solutions to our clients, along with our integrated operations services that encompass the full range of banking operations, including digital lending solutions that improve underwriting and compliance, omni-channel marketing, digital onboarding, know your customer (“KYC”)/anti-money laundering (“AML”) compliance, collections, fraud prevention, and customer servicing, among others. Our industry-leading AI and automation-driven service offerings drive operational efficiency and foster innovation across the financial services and other industries. Our AI capabilities also encompass multimodal data across text, image, video, voice and light detection and ranging (“LiDAR”), providing a strong foundation for AI solutions across high-tech, mobility, autonomous systems and physical AI, including robotics, autonomous vehicles and intelligent real-world environments.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2026, as compared to the critical accounting policies and estimates referred in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Estimates” and Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 2026, as compared to the critical accounting policies and estimates referred in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Estimates” and Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Previous wording

Revenues for the three months ended June 30, 2026 were up by $80.3 million, or 15.6%, compared to the three months ended June 30, 2025, driven by the expansion of business from our existing clients across all reportable segments by 13.3% and revenue from new clients wins by 2.6%, partially offset by a foreign exchange loss, net of hedging by 0.3% during the three months ended June 30, 2026.

Current wording

Revenues for the three months ended September 30, 2026 were up by $104.4 million, or 19.7%, compared to the three months ended September 30, 2025, driven by 13.9% growth from the expansion of business with existing clients across all reportable segments and 6.0% growth from new client wins, including 2.9% growth from our acquisition of iMerit, partially offset by 0.2% foreign exchange loss, net of hedging during the three months ended September 30, 2026.

Previous wording

Revenue growth in International Growth Markets of 14.7% was driven by the expansion of business from our existing clients by 12.1%, new clients by 4.2%, partially offset by a foreign exchange loss, net of hedging by 1.6% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Revenue growth in International Growth Markets of 20.3% was driven by 16.6% growth from the expansion of business with existing clients and 4.6% growth from new clients, including 1.1% growth from our acquisition of iMerit, partially offset by 0.9% foreign exchange loss, net of hedging during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

Cost of revenues for the three months ended June 30, 2026 increased by $48.5 million, or 15.2% compared to the three months ended June 30, 2025. The increase in cost of revenues was due to increases in employee-related costs of $44.9 million on account of higher headcount and wage inflation, and higher technology costs of $8.4 million, facilities and other operating costs of $4.4 million, partially offset by a foreign exchange gain, net of hedging of $9.2 million. Our gross margin for the three months ended June 30, 2026 was 38.0%, compared to 37.7% for the three months ended June 30, 2025, an increase of 30 basis points (“bps”), primarily driven by higher revenues and operational efficiencies, partially offset by lower volumes from certain existing clients.

Current wording

Cost of revenues for the three months ended September 30, 2026 increased by $67.2 million, or 20.6% compared to the three months ended September 30, 2025. The increase in cost of revenues was due to increases in employee-related costs of $56.1 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, higher technology costs of $8.1 million, and higher facilities and other operating costs of $8.3 million, partially offset by a foreign exchange gain, net of hedging of $5.3 million. Our gross margin for the three months ended September 30, 2026 was 38.0%, compared to 38.5% for the three months ended September 30, 2025, a decrease of 50 basis points (“bps”), primarily driven by investments in ramp-ups in certain existing clients and higher operating expenses.

Previous wording

The increase in cost of revenues in Insurance by $17.1 million for the three months ended June 30, 2026 was due to increases in employee-related costs of $15.6 million on account of higher headcount and wage inflation, higher technology costs of $2.5 million, and other operating costs of $1.3 million, partially offset by foreign exchange gain, net of hedging of $2.3 million. Gross margin in Insurance decreased by 20 bps, primarily due to lower volumes from certain existing clients during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

The increase in cost of revenues in Insurance by $18.7 million for the three months ended September 30, 2026 was due to increases in employee-related costs of $15.6 million on account of higher headcount and wage inflation, higher technology costs of $2.3 million, and higher other operating costs of $1.8 million, partially offset by foreign exchange gain, net of hedging of $1.0 million. Gross margin in Insurance decreased by 40 bps, primarily due to investments in ramp-ups in certain existing clients during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

The increase in cost of revenues in Healthcare and Life Sciences by $10.8 million for the three months ended June 30, 2026 was due to increases in employee-related costs of $9.3 million on account of higher headcount and wage inflation, higher technology costs of $1.9 million, and higher facilities and other operating costs of $1.7 million, partially offset by foreign exchange gain, net of hedging of $2.1 million. Gross margin in Healthcare and Life Sciences increased by 340 bps, primarily due to higher volumes from certain existing clients during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

The increase in cost of revenues in Healthcare and Life Sciences by $10.7 million for the three months ended September 30, 2026 was due to increases in employee-related costs of $8.7 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, higher technology costs of $1.7 million, and higher other operating costs of $1.6 million, partially offset by foreign exchange gain, net of hedging of $1.3 million. Gross margin in Healthcare and Life Sciences increased by 220 bps, primarily due to higher volumes from certain existing clients during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $11.9 million for the three months ended June 30, 2026 was due to increases in employee-related costs of $11.4 million on account of higher headcount and wage inflation, higher technology costs of $1.8 million, and higher facilities and other operating costs of $1.0 million, partially offset by foreign exchange gain, net of hedging of $2.3 million. Gross margin in Banking, Capital Markets and Diversified Industries decreased by 300 bps, primarily due to lower volumes from certain existing clients during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $26.1 million for the three months ended September 30, 2026 was due to increases in employee-related costs of $21.6 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, higher technology costs of $2.1 million, and higher other operating costs of $3.7 million, partially offset by foreign exchange gain, net of hedging of $1.3 million. Gross margin in Banking, Capital Markets and Diversified Industries decreased by 390 bps, primarily due to investments in ramp-ups, lower volumes from certain existing clients, and higher operating expenses during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues increased from 19.2% during the three months ended June 30, 2025 to 20.9% during the three months ended June 30, 2026.

Current wording

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues decreased from 21.3% during the three months ended September 30, 2025 to 21.0% during the three months ended September 30, 2026.

Previous wording

The increase in SG&A expenses by $25.1 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $19.7 million on account of higher headcount and wage inflation, iMerit acquisition related expenses of $1.9 million, increased investments in digital and generative AI capabilities of $1.8 million, and higher sales and marketing and other operating costs of $1.7 million.

Current wording

The increase in SG&A expenses by $20.7 million during the three months ended September 30, 2026, compared to the three months ended September 30, 2025 was primarily due to increases in employee-related costs of $14.1 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, increased investments in digital and generative AI capabilities of $3.9 million, acquisition related expenses of $1.8 million and higher sales and marketing costs of $0.9 million.

Previous wording

Depreciation and Amortization. Depreciation and amortization expenses as a percentage of net revenues decreased by 0.2% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Depreciation and Amortization. Depreciation and amortization expenses as a percentage of net revenues increased by 0.1% during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

The increase in depreciation and amortization expense by 3.9% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was primarily due to investments in infrastructure, technology assets and digital capabilities.

Current wording

The increase in depreciation and amortization expense by $3.8 million during the three months ended September 30, 2026, compared to the three months ended September 30, 2025 was primarily due to an increase in amortization of intangibles of $3.0 million related to our acquisition of iMerit.

Previous wording

Income from Operations. The increase in income from operations by 7.6% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was primarily due to higher revenues and gross margins, partially offset by higher SG&A expenses.

Current wording

Income from Operations. The increase in income from operations by 16.6% during the three months ended September 30, 2026, compared to the three months ended September 30, 2025 was primarily due to higher revenues and gross profit, partially offset by higher SG&A expenses.

Previous wording

Foreign Exchange Gain, net. We recorded a foreign exchange gain, net of $1.6 million for the three months ended June 30, 2026, compared to a foreign exchange gain, net of $2.2 million for the three months ended June 30, 2025. Foreign exchange gains and losses are primarily attributable to the movement of the U.S. dollar against the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Foreign Exchange Gain, net. We recorded a foreign exchange gain, net of $1.5 million for the three months ended September 30, 2026, compared to a foreign exchange loss, net of $1.0 million for the three months ended September 30, 2025. Foreign exchange gains and losses are primarily attributable to the movement of the U.S. dollar against the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

Interest expense. The increase in interest expense by $0.8 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was primarily due to a higher average borrowings.

Current wording

Interest expense. The increase in interest expense by $1.4 million during the three months ended September 30, 2026, compared to the three months ended September 30, 2025 was primarily due to higher average borrowings.

Previous wording

Other income, net decreased by $7.9 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 primarily due to changes in the fair value consideration related to our August 2024 acquisition of ITI Data, lower yield on our investments and higher other expenses, net.

Current wording

Other income, net decreased by $1.9 million during the three months ended September 30, 2026, compared to the three months ended September 30, 2025 primarily due to lower yield on our investments and higher other expenses, net.

Previous wording

Income Tax Expense. The effective tax rate for the three months ended June 30, 2026 was 23.1%, an increase from 21.9% for the three months ended June 30, 2025. We recorded income tax expense of $19.4 million and $18.6 million for the three months ended June 30, 2026 and 2025, respectively. The increase in income tax expense was primarily as a result of an increase in non-deductible expenses and lower excess tax benefits related to stock-based compensation, as compared to the three months ended June 30, 2025.

Current wording

Income Tax Expense. The effective tax rate for the three months ended September 30, 2026 was 20.7%, a decrease from 22.1% for the three months ended September 30, 2025. We recorded income tax expense of $17.9 million and $16.5 million for the three months ended September 30, 2026 and 2025, respectively. The increase in income tax expense was primarily as a result of higher profit, compared to the three months ended September 30, 2025.

Previous wording

Net Income. The decrease in net income by 2.3% during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was attributable to the aforementioned factors.

Current wording

Net Income. The increase in net income by 18.2% during the three months ended September 30, 2026, compared to the three months ended September 30, 2025 was attributable to the aforementioned factors.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2026 and 2025:

Previous wording

Revenues for the six months ended June 30, 2026 were up by $149.6 million, or 14.7%, compared to the six months ended June 30, 2025, driven by the expansion of business from our existing clients across all reportable segments by 12.4% and revenue from new clients wins by 2.3% during the six months ended June 30, 2026.

Current wording

Revenues for the nine months ended September 30, 2026 were up by $254.0 million, or 16.4%, compared to the nine months ended September 30, 2025, driven by 12.9% growth from the expansion of business with existing clients across all reportable segments and 3.5% growth from new client wins, including 1.0% growth from our acquisition of iMerit during the nine months ended September 30, 2026.

Previous wording

Cost of revenues for the six months ended June 30, 2026 increased by $89.1 million, or 14.2%, compared to the six months ended June 30, 2025. The increase in cost of revenues was due to increases in employee-related costs of $80.4 million on account of higher headcount and wage inflation, and higher technology costs of $14.5 million, and higher facilities and other operating costs of $7.2 million, partially offset by a foreign exchange gain, net of hedging of $13.0 million. Our gross margin for the six months ended June 30, 2026 was 38.5%, compared to 38.2% for the six months ended June 30, 2025, an increase of 30 bps, primarily driven by higher revenues and operational efficiencies, partially offset by lower volumes from certain existing clients.

Current wording

Cost of revenues for the nine months ended September 30, 2026 increased by $156.3 million, or 16.4%, compared to the nine months ended September 30, 2025. The increase in cost of revenues was due to increases in employee-related costs of $136.7 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, higher technology costs of $22.7 million, and higher facilities and other operating costs of $15.3 million, partially offset by a foreign exchange gain, net of hedging of $18.4 million. Our gross margin remained flat during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

The increase in cost of revenues in Insurance by $28.7 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $26.8 million on account of higher headcount and wage inflation, higher technology costs of $4.3 million, and higher other operating costs of $1.0 million, partially offset by foreign exchange gain, net of hedging of $3.4 million. Gross margin in Insurance increased by 40 bps, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

The increase in cost of revenues in Insurance by $47.4 million for the nine months ended September 30, 2026 was due to increases in employee-related costs of $42.5 million on account of higher headcount and wage inflation, higher technology costs of $6.6 million, and higher other operating costs of $2.7 million, partially offset by foreign exchange gain, net of hedging of $4.4 million. Gross margin in Insurance increased by 10 bps, primarily due to higher revenues and operational efficiencies during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

The increase in cost of revenues in Healthcare and Life Sciences by $23.4 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $18.6 million on account of higher headcount and wage inflation, higher technology costs of $3.5 million, and higher facilities and other operating costs of $4.5 million, partially offset by foreign exchange gain, net of hedging of $3.2 million. Gross margin in Healthcare and Life Sciences increased by 240 bps, primarily due to higher volumes from certain existing clients during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

The increase in cost of revenues in Healthcare and Life Sciences by $34.2 million for the nine months ended September 30, 2026 was due to increases in employee-related costs of $27.3 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, higher technology costs of $5.2 million, and higher other operating costs of $6.2 million, partially offset by foreign exchange gain, net of hedging of $4.5 million. Gross margin in Healthcare and Life Sciences increased by 230 bps, primarily due to higher revenues and operational efficiencies during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $18.6 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $18.3 million on account of higher headcount and wage inflation, higher technology costs of $2.8 million, and higher facilities and other operating costs of $0.8 million, partially offset by a foreign exchange gain, net of hedging of $3.3 million. Gross margin in Banking, Capital Markets and Diversified Industries decreased by 180 bps, primarily due to lower volumes from certain existing clients during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $44.6 million for the nine months ended September 30, 2026 was due to increases in employee-related costs of $40.0 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, higher technology costs of $5.0 million, and higher facilities and other operating costs of $4.2 million, partially offset by a foreign exchange gain, net of hedging of $4.6 million. Gross margin in Banking, Capital Markets and Diversified Industries decreased by 250 bps, primarily due to investments in ramp-ups, lower volumes from certain existing clients, and higher operating expenses during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

The increase in cost of revenues in International Growth Markets by $18.4 million for the six months ended June 30, 2026 was due to increases in employee-related costs of $16.7 million on account of higher headcount and wage inflation, higher technology costs of $3.9 million, and higher facilities and other operating costs of $0.9 million, partially offset by a foreign exchange gain, net of hedging of $3.1 million. Gross margin in International Growth Markets decreased by 130 bps, primarily due to lower volumes from certain existing clients during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

The increase in cost of revenues in International Growth Markets by $30.1 million for the nine months ended September 30, 2026 was due to increases in employee-related costs of $26.9 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, higher technology costs of $5.9 million, and higher facilities and other operating costs of $2.2 million, partially offset by a foreign exchange gain, net of hedging of $4.9 million. Gross margin in International Growth Markets decreased by 60 bps, primarily due to investments in ramp-ups and lower volumes from certain existing clients during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues increased from 19.7% during the six months ended June 30, 2025 to 20.6% during the six months ended June 30, 2026.

Current wording

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues increased from 20.3% during the nine months ended September 30, 2025 to 20.8% during the nine months ended September 30, 2026.

Previous wording

The increase in SG&A expenses by $39.9 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $31.7 million on account of higher headcount and wage inflation, increased investments in digital and generative AI capabilities of $3.7 million, higher sales and marketing costs of $2.0 million, iMerit acquisition related expenses of $1.9 million, and other operating costs of $0.6 million.

Current wording

The increase in SG&A expenses by $60.7 million during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 was primarily due to increases in employee-related costs of $45.3 million on account of higher headcount and wage inflation, including incremental cost related to our acquisition of iMerit, increased investments in digital and generative AI capabilities of $7.9 million, higher sales and marketing costs of $3.8 million, and acquisition related expenses of $3.7 million.

Previous wording

Depreciation and Amortization. Depreciation and amortization expenses as a percentage of net revenues decreased by 0.2% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

Depreciation and Amortization. Depreciation and amortization expenses as a percentage of net revenues decreased by 0.2% during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

The increase in depreciation and amortization expense by 3.6% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was primarily due to investments in infrastructure, technology assets and digital capabilities.

Current wording

The increase in depreciation and amortization expense by $4.7 million during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 was due to an increase in amortization of intangibles of $3.0 million in connection with our acquisition of iMerit, and investments in infrastructure, technology assets and digital capabilities of $1.7 million.

Previous wording

Income from Operations. The increase in income from operations by 12.3% during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was primarily due to higher revenues and gross margins, partially offset by higher SG&A expenses.

Current wording

Income from Operations. The increase in income from operations by 13.7% during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 was primarily due to higher revenues and gross profit, partially offset by higher SG&A expenses.

Previous wording

Foreign Exchange Gain, net. We recorded a foreign exchange gain, net of $2.7 million for the six months ended June 30, 2026, compared to a foreign exchange gain, net of $3.4 million for the six months ended June 30, 2025. Foreign exchange gains and losses are primarily attributable to the movement of the U.S. dollar against the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

Foreign Exchange Gain, net. We recorded a foreign exchange gain, net of $4.2 million for the nine months ended September 30, 2026, compared to a foreign exchange gain, net of $2.4 million for the nine months ended September 30, 2025. Foreign exchange gains and losses are primarily attributable to the movement of the U.S. dollar against the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

Interest expense. The increase in interest expense by $0.6 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 was primarily due to higher average borrowings.

Current wording

Interest expense. The increase in interest expense by $2.0 million during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 was primarily due to higher average borrowings.

Previous wording

Other income, net decreased by $5.6 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 primarily due to changes in the fair value consideration related to our August 2024 acquisition of Incandescent Technologies, Inc. (“ITI Data”), lower yield on our investments and higher other expenses, net.

Current wording

Other income, net decreased by $9.6 million during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 primarily due to changes in the fair value consideration related to our August 2024 acquisition of Incandescent Technologies, Inc. (“ITI Data”), lower yield on our investments and higher other expenses, net.