DERIVATIVES

12 Months Ended

Dec. 31, 2023

DERIVATIVES [ABSTRACT]

DERIVATIVES

(8)DERIVATIVES

Cash Flow Hedges

The Company enters into foreign exchange related derivatives. Foreign exchange derivatives entered into consist of forward and option contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Upon proper qualification, these contracts are designated as cash flow hedges. It is the Company’s policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets considers, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company’s creditworthiness. As of December 31, 2023, the Company had not experienced, nor does it anticipate, any issues related to derivative counterparty defaults. The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the years ended December 31, 2023, 2022 and 2021 (in thousands and net of tax):

	Year Ended December 31,
	2023		2022		2021
Aggregate unrealized net gain/(loss) at beginning of period	$	89	$	(40)	$	8,431
Add: Net gain/(loss) from change in fair value of cash flow hedges		3,292		2,281		(12,126)
Less: Net (gain)/loss reclassified to earnings from effective hedges		2,934		(2,152)		3,655
Aggregate unrealized net gain/(loss) at end of period	$	6,315	$	89	$	(40)

The Company’s foreign exchange cash flow hedging instruments as of December 31, 2023 and 2022 are summarized as follows (in thousands). All hedging instruments are forward contracts.

	Local
	Currency	U.S. Dollar			% Maturing		Contracts
	Notional	Notional			in the next		Maturing
As of December 31, 2023	Amount	Amount			12 months		Through
Canadian Dollar	2,250	$	1,670		100.0	%	September 2024
Philippine Peso	9,324,000		165,842	(1)	58.7	%	December 2026
Mexican Peso	938,000		44,155		60.8	%	December 2026
		$	211,667

	Local
	Currency	U.S. Dollar
	Notional	Notional
As of December 31, 2022	Amount	Amount
Canadian Dollar	12,000	$	9,177
Philippine Peso	8,617,000		157,855	(1)
Mexican Peso	1,024,500		44,690
		$	211,722

(1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on December 31, 2023 and December 31, 2022.

Fair Value Hedges

The Company enters into foreign exchange forward contracts to economically hedge against foreign currency exchange gains and losses on certain receivables and payables of the Company’s foreign operations. Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings in Other income (expense), net. As of December 31, 2023 and 2022, the total notional amount of the Company’s forward contracts used as fair value hedges was $73.3 million and $80.8 million, respectively.

Derivative Valuation and Settlements

The Company’s derivatives as of December 31, 2023 and 2022 were as follows (in thousands):

	December 31, 2023
	Designated		Not Designated
	as Hedging		as Hedging
Designation:	Instruments		Instruments
	Foreign		Foreign
Derivative contract type:	Exchange		Exchange
Derivative classification:	Cash Flow		Fair Value
Fair value and location of derivative in the Consolidated Balance Sheet:
Prepaids and other current assets	$	7,527	$	327
Other long-term assets		2,415		—
Other current liabilities		(1,214)		(120)
Other long-term liabilities		(197)		—
Total fair value of derivatives, net	$	8,531	$	207

	December 31, 2022
	Designated		Not Designated
	as Hedging		as Hedging
Designation:	Instruments		Instruments
	Foreign		Foreign
Derivative contract type:	Exchange		Exchange
Derivative classification:	Cash Flow		Fair Value
Fair value and location of derivative in the Consolidated Balance Sheet:
Prepaids and other current assets	$	4,001	$	281
Other long-term assets		3,019		—
Other current liabilities		(5,157)		(76)
Other long-term liabilities		(1,748)		—
Total fair value of derivatives, net	$	115	$	205

The effect of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023 and 2022 were as follows (in thousands):

	Year Ended December 31,
	2023		2022
	Designated as Hedging
Designation:	Instruments
Derivative contract type:	Foreign Exchange
Derivative classification:	Cash Flow
Amount of gain or (loss) recognized in Other comprehensive income (loss) - effective portion, net of tax	$	2,934	$	(2,152)
Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion:
Revenue	$	3,964	$	(2,906)

	Year Ended December 31,
	2023		2022
Designation:	Not Designated as Hedging Instruments
Derivative contract type:	Foreign Exchange
Derivative classification:	Fair Value
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income (Loss):
Other income (expense), net	$	1,882	$	827