Exlservice (EXLS) Citi’s 2026 Global TMT Conference summary

Strategic evolution and business model

• Transitioned from BPO to data analytics in 2006, now positioned as a data and AI company with significant investments in data management and AI capabilities.

• Acquired iMerit to enhance model evaluation, red teaming, and AI model development for enterprise clients, supporting both foundational and proprietary models.

• 61% of portfolio is data and AI-led services, growing at 30% year-on-year; operations management, including embedded AI, is growing at 10%.

• Commercial models are shifting toward outcome-based pricing, with risk-sharing and productivity-based gains.

• 25% of revenue touches proprietary IP, driving differentiation, higher value, and stickier client relationships.

AI integration and operational impact

• AI implementation in enterprise requires deep domain knowledge, clean data estates, and iterative model improvement, achieving a 94% success rate versus a 30% industry average.

• AI is embedded in over 2,000 unique operational processes, with current maturity at early stages (L1-L2), focusing on data extraction, querying, and basic recommendations.

• Only 20-25% of digital operations are currently outsourced, leaving significant room for expansion as AI demonstrates ROI and builds client confidence.

• Net recurring revenue in operations is growing, with a ratio of 1.1, indicating continuous expansion of client engagements.

Market dynamics and competitive positioning

• AI-driven business outcomes and reliability are key differentiators, enabling competition against larger IT firms and multinationals.

• Demand is strong for both operations and data/AI services, with no significant exposure to discretionary spending cuts or geographic/client concentration risks.

• Sales cycles for AI projects are short but start small; rapid expansion follows demonstrated success.

• Clients are increasingly willing to outsource digital operations to leverage AI and automation, reducing previous resistance.