ExlService Holdings, Inc.EXLS

ExlService Holdings, Inc. Leases Disclosure

10-KFiled Feb 24, 20263 min read
Leases
The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates, with options to extend or terminate before expiration date. The Company finances its use of certain motor vehicles, leasehold improvements and other equipment under various lease arrangements provided by financial institutions. The lease agreements do not contain any covenants to impose any restrictions except for market-standard practice for similar lease arrangements.
The Company had performed an evaluation of its contracts with suppliers in accordance with ASC Topic 842, Leases, and had determined that, except for leases for office facilities, motor vehicles and other equipment as described above, none of the Company’s contracts contain a lease.
Supplemental balance sheet information
As of
December 31, 2025December 31, 2024
Operating Lease
Operating lease ROU assets$97,411 $68,784 
Operating lease liabilities - Current
$16,857 $16,491 
Operating lease liabilities - Non-current
88,167 59,851 
Total operating lease liabilities$105,024 $76,342 
Finance Lease
Property and equipment, gross$3,527 $3,268 
Accumulated amortization(1,494)(1,556)
    Property and equipment, net$2,033 $1,712 
Finance lease liabilities - Current
$616 $435 
Finance lease liabilities - Non-current
1,544 1,349 
Total finance lease liabilities$2,160 $1,784 
The components of lease cost, which are included in the Company’s consolidated statements of income, are as follows:
Year ended December 31,
202520242023
Finance lease:
Depreciation on underlying ROU assets$601 $382 $181 
Interest on lease liabilities305 196 90 
906 578 271 
Operating lease(1)
25,484 21,764 20,188 
Variable lease costs4,641 4,490 4,374 
Sublease income(334)(122)— 
Total lease cost$30,697 $26,710 $24,833 
(1) Includes short-term leases, which are immaterial.
Supplemental cash flow and other information related to leases are as follows:
Year ended December 31,
202520242023
Cash payments for amounts included in the measurement of lease liabilities :
Operating cash outflows for operating leases$24,923 $20,489 $20,181 
Operating cash outflows for finance leases$305 $196 $90 
Financing cash outflows for finance leases$511 $326 $169 
ROU assets obtained in exchange for new operating lease liabilities$44,764 $20,518 $24,880 
ROU assets obtained in exchange for new finance lease liabilities$985 $1,325 $461 
Weighted average remaining lease term (in years)
Finance lease2.6 years3.3 years3.1 years
Operating lease6.7 years4.9 years5.5 years
Weighted average discount rate
Finance lease15.0%15.1%14.6%
Operating lease7.6%8.0%7.7%
As part of the Company’s efforts to optimize its existing network of operations centers, the Company continued to evaluate its office facilities to determine where it can exit or consolidate its use of office space. The Company modified certain of its operating leases, resulting in an increase of its lease liabilities by $16,299 and $3,372, during the year ended December 31, 2025 and 2024, respectively, with a corresponding adjustment to ROU assets.
As of December 31, 2025 and 2024, the Company did not have any significant leases that have not yet commenced but that create significant rights and obligations for the Company.
There was no impairment of ROU assets as of December 31, 2025 and 2024.
Maturities of lease liabilities as of December 31, 2025 were as follows:
Operating LeasesFinance Leases
2026$24,083 $886 
202724,123 816 
202821,615 595 
202913,475 362 
20308,992 110 
2031 and thereafter42,334 — 
Total lease payments134,622 2,769 
Less: Imputed interest29,598 609 
Present value of lease liabilities$105,024 $2,160 

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 25, 2025
2023Feb 29, 2024
2022Feb 23, 2023
2021Feb 24, 2022
2020Feb 25, 2021
2019Feb 27, 2020
2018Feb 28, 2019
2017Feb 27, 2018
2016Mar 15, 2017
2015Feb 26, 2016

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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