DERIVATIVES

9 Months Ended

Sep. 30, 2024

DERIVATIVES [ABSTRACT]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

(6)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 September 30, 2024, the Company has 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 three and nine months ended September 30, 2024 and 2023 (in thousands and net of tax):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Aggregate unrealized net gain/(loss) at beginning of period	$	(470)	$	7,164	$	6,315	$	89
Add: Net gain/(loss) from change in fair value of cash flow hedges		3,514		(1,786)		(1,801)		6,312
Less: Net (gain)/loss reclassified to earnings from effective hedges		(504)		(989)		(1,974)		(2,012)
Aggregate unrealized net gain/(loss) at end of period	$	2,540	$	4,389	$	2,540	$	4,389

The Company’s foreign exchange cash flow hedging instruments as of September 30, 2024 and December 31, 2023 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts.

	Local
	Currency	U.S. Dollar			% Maturing		Contracts
	Notional	Notional			in the next		Maturing
As of September 30, 2024	Amount	Amount			12 months		Through
Philippine Peso	7,087,000		124,228	(1)	62.6	%	March 2027
Mexican Peso	680,000		32,728		59.3	%	December 2026
		$	156,956

	Local
	Currency	U.S. Dollar
	Notional	Notional
As of December 31, 2023	Amount	Amount
Canadian Dollar	2,250	$	1,670
Philippine Peso	9,324,000		165,842	(1)
Mexican Peso	938,000		44,155
		$	211,667

(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 September 30, 2024 and December 31, 2023.

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 September 30, 2024 and December 31, 2023 the total notional amounts of the Company’s forward contracts used as fair value hedges were $25.3 million and $73.3 million, respectively.

Derivative Valuation and Settlements

The Company’s derivatives as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

	September 30, 2024
	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	$	2,703	$	3
Other long-term assets		757		—
Other current liabilities		(654)		(40)
Other long-term liabilities		(430)		—
Total fair value of derivatives, net	$	2,376	$	(37)

	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

The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30, 2024 and 2023 were as follows (in thousands):

	Three Months Ended September 30,
	2024		2023
	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	$	504	$	989
Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion:
Revenue	$	681	$	1,336

	Three Months Ended September 30,
	2024		2023
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	$	(683)	$	(369)

The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2024 and 2023 were as follows (in thousands):

	Nine Months Ended September 30,
	2024		2023
	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	$	1,974	$	2,012
Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion:
Revenue	$	2,669	$	2,719

	Nine Months Ended September 30,
	2024		2023
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	$	(1,213)	$	1,017