EXLS · 10-Q · 2026Q1 · Full report

Interest Rate and Refinancing Exposure

ExlService Holdings, Inc. · 2026-04-28 · Importance 84 · Surprise 74

Total borrowings increased to $417.4 million as of March 31, 2026 from $298.7 million as of December 31, 2025, driven primarily by an increase in revolver borrowings to $325.0 million (from $205.0 million at year-end). Management reports a slight decrease in interest expense ($4.0 million vs. $4.1 million) due to a lower average effective interest rate but discloses exposure to interest rate fluctuations not fully hedged by swaps. The company remains in compliance with its credit agreement covenants and notes the potential need for additional financing for acquisitions or accelerated stock repurchases. The increased reliance on revolver capacity and higher overall borrowings materially raises sensitivity to future interest rate movements and refinancing market conditions.

Key facts

• Interest expense for the three months ended March 31, 2026: $(4.0) million, compared to $(4.1) million for the three months ended March 31, 2025, a decrease of $0.1 million.