ExlService Holdings

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 24 Feb 2026, plus the 10-Q filed 28 Jul 2026 and 9 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• The growing use of AI in our offerings presents additional cybersecurity and privacy risks and could result in increased legal exposure.

  Could happen

  Our growing use of AI in our offerings presents additional risks such as cybersecurity vulnerabilities, bias, and reputational or legal exposure. Testing and managing AI systems is complex and costly, requiring processes that meet industry standards and customer expectations. AI technologies also depend on high-quality datasets, models, and other components, many of which we source from third parties. Inappropriate or controversial data practices by us or others or flawed AI algorithms could undermine the decisions, predictions or analysis AI applications produce, or lead to unintentional bias and discrimination, subjecting us to competitive, brand or reputational harm and legal liability. If our clients use AI that is provided by us in a manner that does not comply with the use restrictions in our agreements or if they modify such AI without our authorization, those actions could further subject us to competitive, brand or reputational harm and legal liability.

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• We are upgrading our enterprise resource planning (“ERP”) system, and its implementation may impact our internal controls over financial reporting, business and operations.

  Could happen

  We are in the process of upgrading our ERP system, which requires significant capital investment, human resources and complex integration with existing systems and processes. Any design deficiencies, delays, or challenges during the upgrade could result in increased costs, operational inefficiencies, and impair our ability to maintain accurate financial records or produce timely and accurate financial statements. These issues may also impact the effectiveness of our internal controls over financial reporting, which could adversely affect our business processes, results of operations, financial condition, and compliance with regulatory requirements.

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• The growing use of AI in our offerings presents additional cybersecurity and privacy risks and could result in increased legal exposure.

  Could happen

  Further, the increased prevalence of misuse of AI identities, accesses and privileges and advanced use of social engineering tactics by bad actors, state-sponsored cyber activities, and the risk that these cyberattacks could spread globally, showcases the increasing sophistication of cyber threats and could dramatically expand the global threat landscape and increase the difficulty of threat attribution and mitigation. Further, we rely on certain vendors and partners for software, technology, and data communications, including high-quality datasets, related equipment and maintenance services, as well as third-party components—such as cloud services—that are integral to the delivery of our AI solutions and services. Any performance failure, interruption, or discontinuation by our vendors or partners could delay our ability to perform our obligations, require us to identify replacement providers or internalize such services, and adversely affect our reputation and revenue.

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