EXL 10-Q Details Q3: Revenue $634.0M (+19.7%), Net Income $68.8M, iMerit Purchase Accounting
EXLS sits 65% above its 52-week low of $24.85 on elevated volume (1.9× avg).
Summary
EXL's Q3 10-Q backs up the earnings release with $634.0M revenue (+19.7%) and $68.8M net income, while showing gross margin down 50 bps to 38.0%, weaker nine-month operating cash flow of $208.8M, and the $229.9M iMerit acquisition on the balance sheet.
Key Events · Earnings and Guidance · EXLS
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Q3 Revenue Up 19.7% to $634.0M
Revenue rose to $634.0 million from $529.6 million a year ago, with net income of $68.8 million and GAAP diluted EPS of $0.45 versus $0.36.
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Gross Margin Slips 50 bps
Gross margin fell to 38.0% from 38.5% on ramp-up investments and higher operating costs; operating income still grew 16.6% to $88.9 million.
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iMerit Deal Adds $163.1M Goodwill
The July 31, 2026 acquisition totaled $229.9 million of consideration — $161.8 million cash, $53.1 million contingent and $15.0 million deferred — adding $163.1 million of goodwill and $76.1 million of intangibles.
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Operating Cash Flow Falls to $208.8M
Nine-month operating cash flow dropped from $233.3 million a year ago as receivables absorbed $106.8 million of cash and days sales outstanding rose to 67 from 63.
Analysis · EXLS · Trade & Services
The full quarterly report behind this afternoon's earnings release fills in what the headline numbers did not. Gross margin slipped to 38.0% from 38.5% as the company absorbed ramp-up costs and the iMerit acquisition, and nine-month operating cash flow fell to $208.8M from $233.3M a year ago because receivables grew faster than revenue (days sales outstanding up to 67 from 63). The iMerit deal closed July 31 for $229.9M of total consideration, including $53.1M of contingent payments and $15.0M deferred, and put $163.1M of goodwill and $76.1M of intangibles on the balance sheet. Debt rose to $511.0M from $298.6M at year-end, reflecting the new $1B facility and the buyback, while $323.9M remains available under the 2026 repurchase program. The earnings and guidance raise were already public via the concurrent 8-K; the incremental value here is the margin, cash-flow and acquisition detail.
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At the time of this filing, EXLS was trading at $40.99 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $6.2B. The 52-week trading range was $24.85 to $43.88. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.