The argument against outsourcing companies fits on a napkin: if a business bills by the human hour, software that does the hour for nothing takes the revenue with it. Five companies built on that model have now reported, and their results sort them by an unexpected variable — not what they do, but how much revenue each employee generates.

Where the deflation is actually showing up

Concentrix runs more customer-service agents than any other listed company: 455,000 employees against $9.83bn of revenue last fiscal year, or about $21,600 a head. That is the purest version of the model, and it is the one visibly breaking. In the quarter to 31 May, revenue rose 1.9% to $2.46bn while gross profit fell 2.9% and operating income dropped 35.7% to $95.4m. On 29 June the company cut its full-year revenue guidance to $9.925–10.025bn and its adjusted earnings forecast to $10.83–11.18 a share, citing an accelerating client shift toward cheaper offshore delivery locations. The shares fell about 23% the next day.

NIQ Global Intelligence does something adjacent — it collects and sells shopper and retail measurement data to consumer brands — with a fifth of the payroll. On 10 August it reported organic revenue growth, excluding currency, accelerating to 5.8%, with adjusted EBITDA up 21.9% to $262m and margin 270 basis points wider at 23.3%. Management credited roughly half that margin gain to AI-led productivity in data operations, engineering and support. Levered free cash flow swung to +$74.1m from -$80.6m a year earlier, and full-year adjusted earnings guidance rose to $1.08–1.12 from $0.95–0.99. The shares gapped 41% on 11 August.

The caveat matters. NIQ's reported revenue of $1.124bn was down 7.8% year over year, it lost $30.5m at the net line, and at $17.45 it trades below the $21 at which Advent International and KKR floated it in July 2025. At 12.1x trailing enterprise value to EBITDA, it has round-tripped to roughly its IPO valuation of 12.3x.

The middle of the group

Genpact, which runs finance, procurement and risk operations for banks, insurers and drugmakers with 141,000 staff, has now grown faster for four straight quarters, reaching 7.1% in the June period. Its Advanced Technology Solutions unit grew 24.1% to $363m on record quarterly bookings, and management expects to sign more than $1bn of agentic contract value this year, about five times the 2025 figure. It also left full-year revenue guidance at "at least 7%" rather than raising it.

ExlService, which handles claims, underwriting and payment-integrity work for insurers and banks, has also accelerated four quarters running, to 15.6% in the second quarter. Its data-and-AI revenue grew 30% and is now 61% of the total, while standalone digital operations shrank 1.5% as work migrated across. But operating income rose only 7.6% against that 15.6% top line, and gross margin narrowed 90 basis points on April salary increases. The transition is winning revenue; it is not yet dropping through.

The one that fell

Innodata supplies annotation and training data to foundation-model developers, and it had the best quarter of the five: revenue up 57.8% to $92.1m, gross margin 630 basis points wider at 46.1%, operating income up 73.8%, full-year growth guidance reaffirmed above 40%. Its largest customer fell to 37% of revenue from 56% as a big technology client scaled to 34% — concentration easing, not worsening. The stock rose 16% intraday on 7 August, closed lower, and is down 29% over three months. Its forward price-to-earnings multiple of 59.1x sits above its 44.7x trailing: analysts expect earnings per share to fall.

What lifted the group

The month's gains were not a steady re-rating. A semiconductor drawdown of roughly $1.3trn in late July pushed money into de-rated services names, taking Accenture up 29% in thirty days — on rotation, not a guidance raise — and Cognizant up 36%, though Cognizant's quarterly bookings fell 6%. Both remain 28% and 15% below year-ago prices. Remove each of the five smaller names' two largest single sessions and the +18.8% thirty-day average becomes about -6.9%, with four of five negative. Remove NIQ alone and it is +8.8%.

On valuation the split holds. Genpact trades at 8.3x forward and 10.0x trailing earnings with a 10.0% free-cash-flow yield, against roughly 15x at each of its last two year-ends. ExlService is at 15.2x forward versus 21.9x trailing. Concentrix is at 0.55x book and 2.2x forward earnings, with a 9% guidance cut behind it.

The setup

Where it stands — Five weeks of gains inside a twelve-month de-rating, driven by one 41% session and a rotation out of chips.

Would confirm — Concentrix holding its cut FY26 guidance of $9.925–10.025bn at its next report, and NIQ margins staying above 23%.

Would invalidate — Genpact or ExlService guiding full-year revenue growth below current levels, or another offshore-mix warning on pricing.

Watch next — Concentrix reports its August-quarter results in late September; NIQ's third quarter follows in November.

Valuation — Genpact 8.3x forward against 10.0x trailing and ~15x at its last two year-ends; Innodata 59.1x forward above 44.7x trailing.