Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Item No. | Page No. | |||||||||||||||||||
1. | ||||||||||||||||||||
2. | ||||||||||||||||||||
3. | ||||||||||||||||||||
4. | ||||||||||||||||||||
1. | ||||||||||||||||||||
1A. | ||||||||||||||||||||
2. | ||||||||||||||||||||
6. | ||||||||||||||||||||
Notes | As of December 31, 2021 | As of September 30, 2022 | |||||||||||||||
Assets | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | $ | |||||||||||||||
Accounts receivable, net of allowance for credit losses of $ | 4 | ||||||||||||||||
Prepaid expenses and other current assets | 7 | ||||||||||||||||
Assets of business held for sale | 8 | $ | $ | ||||||||||||||
Total current assets | $ | $ | |||||||||||||||
Property, plant and equipment, net | 9 | ||||||||||||||||
Operating lease right-of-use assets | |||||||||||||||||
Deferred tax assets | 23 | ||||||||||||||||
Intangible assets, net | 10 | ||||||||||||||||
Goodwill | 10 | ||||||||||||||||
Contract cost assets | 20 | ||||||||||||||||
Other assets, net of allowance for credit losses of $ | |||||||||||||||||
Total assets | $ | $ | |||||||||||||||
Liabilities and equity | |||||||||||||||||
Current liabilities | |||||||||||||||||
Short-term borrowings | 11 | $ | $ | ||||||||||||||
Current portion of long-term debt | 12 | ||||||||||||||||
Accounts payable | |||||||||||||||||
Income taxes payable | 23 | ||||||||||||||||
Accrued expenses and other current liabilities | 13 | ||||||||||||||||
Operating leases liability | |||||||||||||||||
Liabilities of business held for sale | 8 | $ | $ | ||||||||||||||
Total current liabilities | $ | $ | |||||||||||||||
Long-term debt, less current portion | 12 | ||||||||||||||||
Operating leases liability | |||||||||||||||||
Deferred tax liabilities | 23 | ||||||||||||||||
Other liabilities | 14 | ||||||||||||||||
Total liabilities | $ | $ | |||||||||||||||
Shareholders' equity | |||||||||||||||||
Preferred shares, $ | |||||||||||||||||
Common shares, $ | |||||||||||||||||
Additional paid-in capital | |||||||||||||||||
Retained earnings | |||||||||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||||||||
Total equity | $ | $ | |||||||||||||||
Commitments and contingencies | 24 | ||||||||||||||||
Total liabilities and equity | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
Notes | 2021 | 2022 | 2021 | 2022 | |||||||||||||||||||||||||
Net revenues | 20 | $ | $ | $ | $ | ||||||||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||||||||
Gross profit | $ | $ | $ | $ | |||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||||||||
Amortization of acquired intangible assets | 10 | ||||||||||||||||||||||||||||
Other operating (income) expense, net | 21 | ( | ( | ||||||||||||||||||||||||||
Income from operations | $ | $ | $ | $ | |||||||||||||||||||||||||
Foreign exchange gains (losses), net | |||||||||||||||||||||||||||||
Interest income (expense), net | 22 | ( | ( | ( | ( | ||||||||||||||||||||||||
Other income (expense), net | ( | ( | |||||||||||||||||||||||||||
Income before income tax expense | $ | $ | $ | $ | |||||||||||||||||||||||||
Income tax expense | 23 | ||||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||||||||
Earnings per common share | 18 | ||||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
Weighted average number of common shares used in computing earnings per common share | 18 | ||||||||||||||||||||||||||||
Basic | |||||||||||||||||||||||||||||
Diluted |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||
Currency translation adjustments | ( | ( | ( | ( | |||||||||||||||||||
Net income (loss) on cash flow hedging derivatives, net of taxes (Note 6) | ( | ( | |||||||||||||||||||||
Retirement benefits, net of taxes | |||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ |
Common shares | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||
No. of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Equity | |||||||||||||||||||||||||||||||
Balance as of July 1, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of common shares on exercise of options (Note 16) | — | — | |||||||||||||||||||||||||||||||||
Issuance of common shares under the employee stock purchase plan (Note 16) | — | — | |||||||||||||||||||||||||||||||||
Net settlement on vesting of restricted share units (Note 16) | ( | — | — | ( | |||||||||||||||||||||||||||||||
Stock-based compensation expense (Note 16) | — | — | — | — | |||||||||||||||||||||||||||||||
Others | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividend ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance as of September 30, 2021 | $ | $ | $ | $ | ( | $ |
Common shares | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||
No. of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Equity | |||||||||||||||||||||||||||||||
Balance as of January 1, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of common shares on exercise of options (Note 16) | — | — | |||||||||||||||||||||||||||||||||
Issuance of common shares under the employee stock purchase plan (Note 16) | — | — | |||||||||||||||||||||||||||||||||
Net settlement on vesting of restricted share units (Note 16) | ( | — | — | ( | |||||||||||||||||||||||||||||||
Net settlement on vesting of performance units (Note 16) | ( | — | — | ( | |||||||||||||||||||||||||||||||
Stock repurchased and retired (Note 17) | ( | ( | — | ( | — | ( | |||||||||||||||||||||||||||||
Expenses related to stock purchase (Note 17) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation expense (Note 16) | — | — | — | — | |||||||||||||||||||||||||||||||
Others | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividend ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance as of September 30, 2021 | $ | $ | $ | $ | ( | $ |
Common shares | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||
No. of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Equity | ||||||||||||||||||||||||||||||||||
Balance as of July 1, 2022 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Issuance of common shares on exercise of options (Note 16) | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common shares under the employee stock purchase plan (Note 16) | — | — | ||||||||||||||||||||||||||||||||||||
Net settlement on vesting of restricted share units (Note 16) | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock repurchased and retired (Note 17) | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Expenses related to stock purchase (Note 17) | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Stock-based compensation expense (Note 16) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Dividend ($ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | $ | $ | ( | $ |
Common shares | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||
No. of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Equity | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2022 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Issuance of common shares on exercise of options (Note 16) | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common shares under the employee stock purchase plan (Note 16) | — | — | ||||||||||||||||||||||||||||||||||||
Net settlement on vesting of restricted share units (Note 16) | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Net settlement on vesting of performance units (Note 16) | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock repurchased and retired (Note 17) | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Expenses related to stock purchase (Note 17) | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Stock-based compensation expense (Note 16) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Dividend ($ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | $ | $ | ( | $ |
Nine months ended September 30, | |||||||||||
2021 | 2022 | ||||||||||
Operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of debt issuance costs | |||||||||||
Amortization of acquired intangible assets | |||||||||||
Write-down of intangible assets and property, plant and equipment | |||||||||||
Impairment charge on intangible assets and goodwill held-for-sale | |||||||||||
Allowance for credit losses | |||||||||||
Unrealized (gain)/ loss on revaluation of foreign currency asset/liability | ( | ||||||||||
Stock-based compensation expense | |||||||||||
Deferred tax benefit | ( | ( | |||||||||
Write-down of operating right-of-use assets and other assets | |||||||||||
Others, net | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Increase in accounts receivable | ( | ( | |||||||||
(Increase) decrease in prepaid expenses, other current assets, contract cost assets, operating lease right-of-use assets and other assets | ( | ||||||||||
Increase in accounts payable | |||||||||||
Decrease in accrued expenses, other current liabilities, operating leases liabilities and other liabilities | ( | ( | |||||||||
Increase in income taxes payable | |||||||||||
Net cash provided by operating activities | $ | $ | |||||||||
Investing activities | |||||||||||
Purchase of property, plant and equipment | ( | ( | |||||||||
Payment for internally generated intangible assets (including intangibles under development) | ( | ( | |||||||||
Proceeds from sale of property, plant and equipment | |||||||||||
(Payment)/ refund for business acquisitions, net of cash acquired | ( | ||||||||||
Proceed from sale of investment | |||||||||||
Net cash used for investing activities | $ | ( | $ | ( | |||||||
Financing activities | |||||||||||
Repayment of finance lease obligations | ( | ( | |||||||||
Payment of debt issuance costs | ( | ||||||||||
Proceeds from long-term debt | |||||||||||
Repayment of long-term debt | ( | ( | |||||||||
Proceeds from short-term borrowings | |||||||||||
Repayment of short-term borrowings | ( | ( | |||||||||
Proceeds from issuance of common shares under stock-based compensation plans | |||||||||||
Payment for net settlement of stock-based awards | ( | ( | |||||||||
Payment of earn-out consideration | ( | ( | |||||||||
Dividend paid | ( | ( | |||||||||
Payment for stock repurchased and retired (including expenses related to stock repurchase) | ( | ( | |||||||||
Others | ( | ||||||||||
Net cash used for financing activities | $ | ( | $ | ( | |||||||
Effect of exchange rate changes | ( | ( | |||||||||
Net increase/(decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at the beginning of the period | |||||||||||
Cash and cash equivalents at the end of the period | $ | $ | |||||||||
Supplementary information | |||||||||||
Cash paid during the period for interest | $ | $ | |||||||||
Cash paid during the period for income taxes, net of refund | $ | $ | |||||||||
Customer-related intangible assets | - | ||||||||||
Marketing-related intangible assets | - | ||||||||||
Technology-related intangible assets | - |
Year ended December 31, 2021 | Nine months ended September 30, 2022 | ||||||||||
Opening balance as of January 1 | $ | $ | |||||||||
Additions charged/reversal released to cost and expense | |||||||||||
Deductions/effect of exchange rate fluctuations | ( | ( | |||||||||
Closing balance | $ | $ |
As of December 31, 2021 | |||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Derivative instruments (Note a, c) | $ | $ | $ | $ | |||||||||||||||||||
Deferred compensation plan assets (Note a, e) | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Earn-out consideration (Note b, d) | $ | $ | $ | $ | |||||||||||||||||||
Derivative instruments (Note b, c) | |||||||||||||||||||||||
Deferred compensation plan liability (Note b, f) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
As of September 30, 2022 | |||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Derivative instruments (Note a, c) | $ | $ | $ | $ | |||||||||||||||||||
Deferred compensation plan assets (Note a, e) | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Earn-out consideration (Note b, d) | $ | $ | $ | $ | |||||||||||||||||||
Derivative instruments (Note b, c) | |||||||||||||||||||||||
Deferred compensation plan liability (Note b, f) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Opening balance | $ | $ | $ | $ | |||||||||||||||||||
Payments made on earn-out consideration (Note a) | ( | ( | ( | ||||||||||||||||||||
Change in fair value of earn-out consideration (Note b) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Others (Note c) | $ | $ | |||||||||||||||||||||
Closing balance | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Opening balance | $ | $ | $ | $ | |||||||||||||||||||
Additions (net of redemption) | |||||||||||||||||||||||
Change in fair value of deferred compensation plan assets (Note a) | ( | ( | ( | ||||||||||||||||||||
Closing balance | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Opening balance | $ | $ | $ | $ | |||||||||||||||||||
Additions (net of redemption) | |||||||||||||||||||||||
Change in fair value of deferred compensation plan liabilities (Note a) | ( | ( | ( | ||||||||||||||||||||
Closing balance | $ | $ | $ | $ |
Notional principal amounts (Note a) | Balance sheet exposure asset (liability) (Note b) | ||||||||||||||||||||||
As of December 31, 2021 | As of September 30, 2022 | As of December 31, 2021 | As of September 30, 2022 | ||||||||||||||||||||
Foreign exchange forward contracts denominated in: | |||||||||||||||||||||||
United States Dollars (sell) Indian Rupees (buy) | $ | $ | $ | $ | ( | ||||||||||||||||||
United States Dollars (sell) Mexican Peso (buy) | |||||||||||||||||||||||
United States Dollars (sell) Philippines Peso (buy) | ( | ( | |||||||||||||||||||||
Euro (sell) United States Dollars (buy) | |||||||||||||||||||||||
Singapore Dollars (buy) United States Dollars (sell) | ( | ||||||||||||||||||||||
Euro (sell) Romanian Leu (buy) | ( | ||||||||||||||||||||||
Japanese Yen (sell) Chinese Renminbi (buy) | |||||||||||||||||||||||
United States Dollars (sell) Chinese Renminbi (buy) | ( | ||||||||||||||||||||||
Pound Sterling (sell) United States Dollars (buy) | |||||||||||||||||||||||
United States Dollars (sell) Hungarian Font (buy) | ( | ( | |||||||||||||||||||||
Hungarian Font (Sell) Euro (buy) | ( | ||||||||||||||||||||||
Australian Dollars (sell) Indian Rupees (buy) | |||||||||||||||||||||||
USD (Sell) Polish Zloty (buy) | ( | ||||||||||||||||||||||
Japanese Yen (sell) US Dollar (buy) | |||||||||||||||||||||||
Israel Shekel (sell) US Dollar (buy) | |||||||||||||||||||||||
South African Rand (sell) US Dollar (buy) | |||||||||||||||||||||||
Interest rate swaps (floating to fixed) | ( | ||||||||||||||||||||||
$ | $ | ( |
Cash flow hedges | Non-designated | |||||||||||||||||||||||||
As of December 31, 2021 | As of September 30, 2022 | As of December 31, 2021 | As of September 30, 2022 | |||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Prepaid expenses and other current assets | $ | $ | $ | $ | ||||||||||||||||||||||
Other assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Accrued expenses and other current liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
Other liabilities | $ | $ | $ | $ |
Three months ended September 30, | ||||||||||||||||||||||||||||||||||||||
2021 | 2022 | |||||||||||||||||||||||||||||||||||||
Before tax Amount | Tax (Expense) or Benefit | Net of tax Amount | Before tax Amount | Tax (Expense) or Benefit | Net of tax Amount | |||||||||||||||||||||||||||||||||
Opening balance | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net gains (losses) reclassified into statement of income on completion of hedged transactions | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Changes in fair value of effective portion of outstanding derivatives, net | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Gain (loss) on cash flow hedging derivatives, net | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Closing balance | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( |
Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||
2021 | 2022 | |||||||||||||||||||||||||||||||||||||
Before tax Amount | Tax (Expense) or Benefit | Net of tax Amount | Before tax Amount | Tax (Expense) or Benefit | Net of tax Amount | |||||||||||||||||||||||||||||||||
Opening balance | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net gains (losses) reclassified into statement of income on completion of hedged transactions | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Changes in fair value of effective portion of outstanding derivatives, net | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Gain (loss) on cash flow hedging derivatives, net | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Closing balance | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( |
Derivatives in Cash Flow Hedging Relationships | Amount of Gain (Loss) recognized in OCI on Derivatives (Effective Portion) | Location of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion) | Amount of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion) | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Forward foreign exchange contracts | $ | $ | ( | $ | $ | ( | Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | ( | $ | $ | $ | Cost of revenue | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Treasury rate lock | $ | $ | $ | $ | Selling, general and administrative expenses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Amount of Gain (Loss) recognized in Statement of Income on Derivatives | ||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | Location of Gain (Loss) recognized in Statement of Income on Derivatives | 2021 | 2022 | 2021 | 2022 | |||||||||||||||||||||||||||
Forward foreign exchange contracts (Note a) | Foreign exchange gains (losses), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( |
As of December 31, 2021 | As of September 30, 2022 | ||||||||||
Advance income and non-income taxes | $ | $ | |||||||||
Contract asset (Note 20) | |||||||||||
Prepaid expenses | |||||||||||
Derivative instruments | |||||||||||
Employee advances | |||||||||||
Deposits | |||||||||||
Advances to suppliers | |||||||||||
Others | |||||||||||
$ | $ |
As of September 30, 2022 | ||||||||
Accounts receivable | $ | |||||||
Prepaid expense and other current assets | ||||||||
Property, plant and equipment, net | ||||||||
Intangible assets, net | ||||||||
Contract cost assets | ||||||||
Other assets | ||||||||
Assets of business held for sale | $ | |||||||
Accounts payable | $ | |||||||
Accrued expenses and other current liabilities | ||||||||
Other liabilities | ||||||||
Liabilities of business held for sale | $ |
As of December 31, 2021 | As of September 30, 2022 | ||||||||||
Property, plant and equipment, gross | $ | $ | |||||||||
Less: Accumulated depreciation and amortization | ( | ( | |||||||||
Property, plant and equipment, net | $ | $ |
For the year ended December 31, 2021 | For the nine months ended September 30, 2022 | ||||||||||
Opening balance | |||||||||||
Goodwill relating to acquisitions consummated during the period | |||||||||||
Impact of measurement period adjustments | |||||||||||
Reclassified as held for sale | ( | ||||||||||
Effect of exchange rate fluctuations | ( | ( | |||||||||
Closing balance |
Financial Services | Consumer and Healthcare | High Tech and Manufacturing | Total | ||||||||||||||||||||
Opening balance | |||||||||||||||||||||||
Goodwill relating to acquisitions consummated during the period | |||||||||||||||||||||||
Impact of measurement period adjustments | |||||||||||||||||||||||
Effect of exchange rate fluctuations | ( | ( | ( | ( | |||||||||||||||||||
Closing balance |
Financial Services | Consumer and Healthcare | High Tech and Manufacturing | Total | ||||||||||||||||||||
Opening balance | |||||||||||||||||||||||
Impact of measurement period adjustments | |||||||||||||||||||||||
Reclassified as held for sale | ( | ( | |||||||||||||||||||||
Effect of exchange rate fluctuations | ( | ( | ( | ( | |||||||||||||||||||
Closing balance |
As of December 31, 2021 | As of September 30, 2022 | ||||||||||||||||||||||||||||||||||
Gross carrying amount | Accumulated amortization & Impairment | Net | Gross carrying amount | Accumulated amortization & Impairment | Net | ||||||||||||||||||||||||||||||
Customer-related intangible assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Marketing-related intangible assets | |||||||||||||||||||||||||||||||||||
Technology-related intangible assets | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Technology related intangibles | $ | $ | $ | $ | |||||||||||||||||||
Customer related intangibles | |||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Total intangibles and goodwill | $ | $ | $ | $ | |||||||||||||||||||
Property, plant and equipment | $ | $ | $ | $ | |||||||||||||||||||
Total property, plant and equipment | $ | $ | $ | $ | |||||||||||||||||||
Total impairment and write-down | $ | $ | $ | $ | |||||||||||||||||||
Year ended | Amount | ||||
2022 | |||||
2023 | |||||
Total | $ |
As of December 31, 2021 | As of September 30, 2022 | ||||||||||
Credit facility, net of amortization expenses | $ | $ | |||||||||
Total | $ | $ | |||||||||
Current portion | |||||||||||
Non-current portion | |||||||||||
Total | $ | $ |
As of December 31, 2021 | As of September 30, 2022 | ||||||||||
Accrued expenses | $ | $ | |||||||||
Accrued employee cost | |||||||||||
Earn-out consideration | |||||||||||
Statutory liabilities | |||||||||||
Retirement benefits | |||||||||||
Compensated absences | |||||||||||
Derivative instruments | |||||||||||
Contract liabilities (Note 20) | |||||||||||
Other liabilities | |||||||||||
$ | $ |
As of December 31, 2021 | As of September 30, 2022 | ||||||||||
Accrued employee cost | $ | $ | |||||||||
Earn-out consideration | |||||||||||
Retirement benefits | |||||||||||
Compensated absences | |||||||||||
Derivative instruments | |||||||||||
Contract liabilities (Note 20) | |||||||||||
Others | |||||||||||
$ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Service costs | $ | $ | $ | $ | |||||||||||||||||||
Interest costs | |||||||||||||||||||||||
Amortization of actuarial loss | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Net defined benefit plan costs | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
India | $ | $ | $ | $ | |||||||||||||||||||
U.S. | |||||||||||||||||||||||
U.K. | |||||||||||||||||||||||
China | |||||||||||||||||||||||
Other regions | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Nine months ended September 30, 2021 | Nine months ended September 30, 2022 | ||||||||||||||||
Dividend yield | % | — | % | ||||||||||||||
Expected life (in months) | |||||||||||||||||
Risk-free rate of interest | % | — | % | ||||||||||||||
Volatility | % | — | % |
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
Shares arising out of options | Weighted average exercise price | Weighted average remaining contractual life (years) | Aggregate intrinsic value | ||||||||||||||||||||
Outstanding as of January 1, 2022 | — | ||||||||||||||||||||||
Granted | — | — | |||||||||||||||||||||
Forfeited | ( | — | — | ||||||||||||||||||||
Expired | — | — | |||||||||||||||||||||
Exercised | ( | — | |||||||||||||||||||||
Outstanding as of September 30, 2022 | |||||||||||||||||||||||
Vested as of September 30, 2022 and expected to vest thereafter (Note a) | |||||||||||||||||||||||
Vested and exercisable as of September 30, 2022 | |||||||||||||||||||||||
Weighted average grant date fair value of grants during the period |
Nine Months Ended September 30, 2022 | |||||||||||
Number of Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding as of January 1, 2022 | |||||||||||
Granted | |||||||||||
Vested (Note a) | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding as of September 30, 2022 | |||||||||||
Expected to vest (Note b) |
Nine Months Ended September 30, 2022 | |||||||||||||||||
Number of Performance Units | Weighted Average Grant Date Fair Value | Maximum Shares Eligible to Receive | |||||||||||||||
Outstanding as of January 1, 2022 | |||||||||||||||||
Granted | |||||||||||||||||
Vested (Note a) | ( | ( | |||||||||||||||
Forfeited | ( | ( | |||||||||||||||
Adjustment upon final determination of level of performance goal achievement (Note b) | |||||||||||||||||
Outstanding as of September 30, 2022 | |||||||||||||||||
Expected to vest (Note c) |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average number of common shares used in computing basic earnings per common share | |||||||||||||||||||||||
Dilutive effect of stock-based awards | |||||||||||||||||||||||
Weighted average number of common shares used in computing dilutive earnings per common share | |||||||||||||||||||||||
Earnings per common share | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
Net revenues | |||||||||||||||||||||||
Data-Tech-AI | Digital operations | Total | AOI | ||||||||||||||||||||
Financial Services | |||||||||||||||||||||||
Consumer and Healthcare | |||||||||||||||||||||||
High Tech and Manufacturing | |||||||||||||||||||||||
Total reportable segment | |||||||||||||||||||||||
Others# | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
Stock-based compensation | ( | ||||||||||||||||||||||
Amortization and impairment of acquired intangible assets (other than included above) | ( | ||||||||||||||||||||||
Foreign exchange gains (losses), net | |||||||||||||||||||||||
Interest income (expense), net | ( | ||||||||||||||||||||||
Income tax expense | ( | ||||||||||||||||||||||
Net income |
Net revenues | |||||||||||||||||||||||
Data-Tech-AI | Digital operations | Total | AOI | ||||||||||||||||||||
Financial Services | |||||||||||||||||||||||
Consumer and Healthcare | |||||||||||||||||||||||
High Tech and Manufacturing | |||||||||||||||||||||||
Total reportable segment | |||||||||||||||||||||||
Others* | ( | ( | ( | ||||||||||||||||||||
Total | |||||||||||||||||||||||
Business held for sale (refer to Note (a) below and Note 8) | ( | ||||||||||||||||||||||
Total (excluding business held for sale - refer to Note (a) below and Note 8) | |||||||||||||||||||||||
Stock-based compensation | ( | ||||||||||||||||||||||
Amortization and impairment of acquired intangible assets (other than included above) | ( | ||||||||||||||||||||||
Foreign exchange gains (losses), net | |||||||||||||||||||||||
Interest income (expense), net | ( | ||||||||||||||||||||||
Business held for sale (refer to Note (a) below and Note 8) | ( | ||||||||||||||||||||||
Impairment charge on assets classified as held for sale (refer to Note (a) below and Note 8) | ( | ||||||||||||||||||||||
Income tax expense | ( | ||||||||||||||||||||||
Net income |
Net revenues | |||||||||||||||||||||||
Data-Tech-AI | Digital operations | Total | AOI | ||||||||||||||||||||
Financial Services | |||||||||||||||||||||||
Consumer and Healthcare | |||||||||||||||||||||||
High Tech and Manufacturing | |||||||||||||||||||||||
Total reportable segment | |||||||||||||||||||||||
Others## | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
Stock-based compensation | ( | ||||||||||||||||||||||
Amortization and impairment of acquired intangible assets (other than included above) | ( | ||||||||||||||||||||||
Foreign exchange gains (losses), net | |||||||||||||||||||||||
Interest income (expense), net | ( | ||||||||||||||||||||||
Income tax expense | ( | ||||||||||||||||||||||
Net income |
Net revenues | |||||||||||||||||||||||
Data-Tech-AI | Digital operations | Total | AOI | ||||||||||||||||||||
Financial Services | |||||||||||||||||||||||
Consumer and Healthcare | |||||||||||||||||||||||
High Tech and Manufacturing | |||||||||||||||||||||||
Total reportable segment | |||||||||||||||||||||||
Others** | ( | ( | ( | ||||||||||||||||||||
Total | |||||||||||||||||||||||
Business held for sale (refer to Note (b) below and Note 8) | ( | ||||||||||||||||||||||
Total (excluding business held for sale - refer to Note (b) below and Note 8) | |||||||||||||||||||||||
Stock-based compensation | ( | ||||||||||||||||||||||
Amortization and impairment of acquired intangible assets (other than included above) | ( | ||||||||||||||||||||||
Foreign exchange gains (losses), net | |||||||||||||||||||||||
Interest income (expense), net | ( | ||||||||||||||||||||||
Business held for sale (refer to Note (b) below and Note 8) | ( | ||||||||||||||||||||||
Impairment charge on assets classified as held for sale (refer to Note (b) below and Note 8) | ( | ||||||||||||||||||||||
Restructuring expenses (refer to Note (c) below and Note 25) | ( | ||||||||||||||||||||||
Income tax expense | ( | ||||||||||||||||||||||
Net income |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Data-Tech-AI | $ | $ | $ | $ | |||||||||||||||||||
Digital Operations | |||||||||||||||||||||||
Total net revenues | $ | $ | $ | $ |
As of December 31, 2021 | As of September 30, 2022 | ||||||||||
Contract assets (Note a) | $ | $ | |||||||||
Contract liabilities (Note b) | |||||||||||
Deferred transition revenue | $ | $ | |||||||||
Advance from customers | $ | $ |
Particulars | Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | |||||||||||||||||||||||||||
Transaction price allocated to remaining performance obligations | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Transaction price allocated to remaining performance obligations relating to business held for sale | $ | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Particulars | Sales incentive programs | Transition activities | Sales incentive programs | Transition activities | Sales incentive programs | Transition activities | Sales incentive programs | Transition activities | |||||||||||||||||||||||||||||||||||||||
Opening balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Closing balance | |||||||||||||||||||||||||||||||||||||||||||||||
Amortization |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Write-down of intangible assets and property, plant and equipment | $ | $ | $ | $ | |||||||||||||||||||
Write-down of operating right-of-use assets and other assets* | |||||||||||||||||||||||
Impairment charge on intangible assets and goodwill held-for-sale | |||||||||||||||||||||||
Other operating income | ( | ( | ( | ( | |||||||||||||||||||
Other operating (income) expense, net | $ | ( | $ | $ | ( | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | ||||||||||||||||||||
Interest income | $ | $ | $ | $ | |||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Interest income (expense), net | $ | ( | $ | ( | $ | ( | $ | ( |
Nine months ended September 30, 2022 | |||||
Opening balance at January 1 | $ | ||||
Increase related to prior year tax positions, including recorded in acquisition accounting | |||||
Decrease related to prior year tax positions | ( | ||||
Decrease related to prior year tax positions due to lapse of applicable statute of limitation | ( | ||||
Effect of exchange rate changes | ( | ||||
Closing balance at September 30 | $ |
Percentage Change Increase/(Decrease) | ||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2021 | 2022 | 2021 | 2022 | 2022 vs. 2021 | 2022 vs. 2021 | |||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||||||
Data-Tech-AI | $ | 428.8 | $ | 509.7 | $ | 1,208.5 | $ | 1,465.0 | 18.9 | % | 21.2 | % | ||||||||||||||||||||||||||
Digital Operations | 586.9 | 601.3 | 1,741.4 | 1,803.6 | 2.4 | % | 3.6 | % | ||||||||||||||||||||||||||||||
Total net revenues | $ | 1,015.7 | $ | 1,111.0 | $ | 2,949.9 | $ | 3,268.6 | 9.4 | % | 10.8 | % | ||||||||||||||||||||||||||
Cost of revenue | 653.7 | 717.2 | 1,887.6 | 2,117.4 | 9.7 | % | 12.2 | % | ||||||||||||||||||||||||||||||
Gross profit | 362.1 | 393.8 | 1,062.3 | 1,151.2 | 8.8 | % | 8.4 | % | ||||||||||||||||||||||||||||||
Gross profit margin | 35.6 | % | 35.4 | % | 36.0 | % | 35.2 | % | ||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 216.0 | 231.4 | 620.9 | 701.8 | 7.2 | % | 13.0 | % | ||||||||||||||||||||||||||||||
Amortization of acquired intangible assets | 13.9 | 10.6 | 44.6 | 32.8 | (23.7) | % | (26.5) | % | ||||||||||||||||||||||||||||||
Other operating (income) expense, net | (0.1) | 20.9 | (0.2) | 42.2 | NM* | NM* | ||||||||||||||||||||||||||||||||
Income from operations | 132.3 | 130.8 | 397.1 | 374.4 | (1.1) | % | (5.7) | % | ||||||||||||||||||||||||||||||
Income from operations as a percentage of net revenues | 13.0 | % | 11.8 | % | 13.5 | % | 11.5 | % | ||||||||||||||||||||||||||||||
Foreign exchange gains (losses), net | 2.7 | 3.9 | 11.5 | 9.3 | 41.5 | % | (19.2) | % | ||||||||||||||||||||||||||||||
Interest income (expense), net | (12.8) | (13.4) | (38.2) | (36.7) | 5.0 | % | (3.9) | % | ||||||||||||||||||||||||||||||
Other income (expense), net | 1.5 | (0.2) | 9.0 | (4.9) | (115.9) | % | (154.7) | % | ||||||||||||||||||||||||||||||
Income before income tax expense | 123.7 | 121.1 | 379.4 | 342.1 | (2.2) | % | (9.8) | % | ||||||||||||||||||||||||||||||
Income tax expense | 21.4 | 25.2 | 83.0 | 78.4 | 18.2 | % | (5.5) | % | ||||||||||||||||||||||||||||||
Net income | $ | 102.4 | $ | 95.8 | $ | 296.4 | $ | 263.7 | (6.4) | % | (11.0) | % | ||||||||||||||||||||||||||
Net income as a percentage of net revenues | 10.1 | % | 8.6 | % | 10.0 | % | 8.1 | % |
Three months ended September 30, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
2021 | 2022 | 2022 vs. 2021 | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Data-Tech-AI | $ | 428.8 | $ | 509.7 | 18.9 | % | ||||||||||||||
Digital Operations | 586.9 | 601.3 | 2.4 | % | ||||||||||||||||
Total net revenues | $ | 1,015.7 | $ | 1,111.0 | 9.4 | % |
Three months ended September 30, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
2021 | 2022 | 2022 vs. 2021 | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Financial Services | $ | 258.5 | $ | 303.8 | 17.5 | % | ||||||||||||||
Consumer and Healthcare | 388.1 | 412.8 | 6.4 | % | ||||||||||||||||
High Tech and Manufacturing | 366.7 | 425.3 | 16.0 | % | ||||||||||||||||
Total reportable segment | 1,013.3 | 1,142.0 | 12.7 | % | ||||||||||||||||
Others | 2.4 | (30.9) | NM* | |||||||||||||||||
Net revenues | 1,015.7 | 1,111.0 | 9.4 | % | ||||||||||||||||
Business held for sale | — | (3.9) | (100.0) | % | ||||||||||||||||
Net revenues (excluding business held for sale) | $ | 1,015.7 | $ | 1,107.1 | 9.0 | % |
Three months ended September 30, | ||||||||||||||
2021 | 2022 | |||||||||||||
(dollars in millions) | ||||||||||||||
Net income | $ | 102.4 | $ | 95.8 | ||||||||||
Foreign exchange (gains) losses, net | (2.7) | (3.9) | ||||||||||||
Interest (income) expense, net | 12.8 | 13.4 | ||||||||||||
Income tax expense | 21.4 | 25.2 | ||||||||||||
Stock-based compensation | 21.5 | 19.2 | ||||||||||||
Amortization and impairment of acquired intangible assets | 13.7 | 10.5 | ||||||||||||
Loss relating to business held for sale | — | 7.1 | ||||||||||||
Impairment charge on assets classified as held for sale | — | 21.4 | ||||||||||||
Adjusted income from operations | $ | 168.9 | $ | 188.8 |
Three months ended September 30, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
2021 | 2022 | 2022 vs. 2021 | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Financial Services | $ | 32.5 | $ | 41.0 | 26.1 | % | ||||||||||||||
Consumer and Healthcare | 63.7 | 49.6 | (22.1) | % | ||||||||||||||||
High Tech and Manufacturing | 68.3 | 69.6 | 1.9 | % | ||||||||||||||||
Total reportable segment | 164.5 | 160.2 | (2.6) | % | ||||||||||||||||
Others | 4.5 | 21.6 | NM* | |||||||||||||||||
Total | 168.9 | 181.8 | 7.6 | % | ||||||||||||||||
Loss relating to business held for sale | — | 7.1 | 100.0 | % | ||||||||||||||||
Adjusted income from operations | $ | 168.9 | $ | 188.8 | 11.8 | % |
Nine months ended September 30, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
2021 | 2022 | 2022 vs. 2021 | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Data-Tech-AI | $ | 1,208.5 | $ | 1,465.0 | 21.2 | % | ||||||||||||||
Digital Operations | 1,741.4 | 1,803.6 | 3.6 | % | ||||||||||||||||
Total net revenues | $ | 2,949.9 | $ | 3,268.6 | 10.8 | % |
Nine months ended September 30, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
2021 | 2022 | 2022 vs. 2021 | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Financial Services | $ | 750.6 | $ | 872.6 | 16.3 | % | ||||||||||||||
Consumer and Healthcare | 1,101.2 | 1,223.3 | 11.1 | % | ||||||||||||||||
High Tech and Manufacturing | 1,081.8 | 1,225.7 | 13.3 | % | ||||||||||||||||
Total reportable segment | 2,933.5 | 3,321.6 | 13.2 | % | ||||||||||||||||
Others | 16.4 | (53.0) | NM* | |||||||||||||||||
Net revenues | 2,949.9 | 3,268.6 | 10.8 | % | ||||||||||||||||
Business held for sale | — | (8.8) | (100.0) | % | ||||||||||||||||
Net revenues (excluding business held for sale) | $ | 2,949.9 | $ | 3,259.8 | 10.5 | % |
Nine months ended September 30, | ||||||||||||||
2021 | 2022 | |||||||||||||
(dollars in millions) | ||||||||||||||
Net income | $ | 296.4 | $ | 263.7 | ||||||||||
Foreign exchange (gains) losses, net | (11.5) | (9.3) | ||||||||||||
Interest (income) expense, net | 38.2 | 36.7 | ||||||||||||
Income tax expense | 83.0 | 78.4 | ||||||||||||
Stock-based compensation | 58.6 | 54.9 | ||||||||||||
Amortization and impairment of acquired intangible assets | 44.0 | 32.7 | ||||||||||||
Restructuring expense | — | 38.8 | ||||||||||||
Loss relating to business held for sale | — | 14.3 | ||||||||||||
Impairment charge on assets classified as held for sale | — | 21.4 | ||||||||||||
Adjusted income from operations | $ | 508.6 | $ | 531.6 |
Nine months ended September 30, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
2021 | 2022 | 2022 vs. 2021 | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Financial Services | $ | 99.0 | $ | 102.7 | 3.8 | % | ||||||||||||||
Consumer and Healthcare | 184.6 | 158.3 | (14.3) | % | ||||||||||||||||
High Tech and Manufacturing | 203.9 | 207.9 | 1.9 | % | ||||||||||||||||
Total reportable segment | 487.5 | 468.9 | (3.8) | % | ||||||||||||||||
Others | 21.1 | 48.5 | 129.8 | % | ||||||||||||||||
Total | 508.6 | 517.3 | 1.7 | % | ||||||||||||||||
Loss relating to business held for sale | — | 14.3 | 100.0 | % | ||||||||||||||||
Adjusted income from operations | $ | 508.6 | $ | 531.6 | 4.5 | % |
As of December 31, 2021 | As of September 30, 2022 | Percentage Change Increase/(Decrease) | ||||||||||||||||||
(dollars in millions) | 2022 vs. 2021 | |||||||||||||||||||
Cash and cash equivalents | $ | 899.5 | $ | 518.7 | (42.3) | % | ||||||||||||||
Short-term borrowings | — | 200.0 | NM* | |||||||||||||||||
Long-term debt due within one year | 383.4 | 535.1 | 39.6 | % | ||||||||||||||||
Long-term debt other than the current portion | 1,272.5 | 746.6 | (41.3) | % | ||||||||||||||||
Genpact Limited total shareholders’ equity | $ | 1,897.1 | $ | 1,731.8 | (8.7) | % |
Nine months ended September 30, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
2021 | 2022 | 2022 vs. 2021 | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Net cash provided by/ (used for): | ||||||||||||||||||||
Operating activities | $ | 447.5 | $ | 214.0 | (52.2) | % | ||||||||||||||
Investing activities | (37.3) | (37.3) | — | % | ||||||||||||||||
Financing activities | (151.1) | (471.2) | 211.8 | % | ||||||||||||||||
Net increase/(decrease) in cash and cash equivalents | $ | 259.1 | $ | (294.4) | (213.6) | % |
Summarized Statements of Income | Year ended December 31, 2021 | Nine months ended September 30, 2022 | ||||||||||||
(dollars in millions) | ||||||||||||||
Net revenues | $ | 214.2 | $ | 109.5 | ||||||||||
Gross profit | 214.2 | 109.5 | ||||||||||||
Net income | 102.7 | 52.7 |
Year ended December 31, 2021 | Nine months ended September 30, 2022 | |||||||||||||
(dollars in millions) | ||||||||||||||
Royalty income | $ | 4.4 | $ | — | ||||||||||
Revenue from services | 209.8 | 109.5 | ||||||||||||
Interest income (expense), net | 33.0 | 15.9 | ||||||||||||
Other cost, net | 17.7 | (1.6) |
Summarized Balance Sheets | As of December 31, 2021 | As of September 30, 2022 | ||||||||||||
(dollars in millions) | ||||||||||||||
Assets | ||||||||||||||
Current assets | $ | 2,257.8 | $ | 2,154.9 | ||||||||||
Non-current assets | 457.5 | 172.2 | ||||||||||||
Liabilities | ||||||||||||||
Current liabilities | $ | 3,758.5 | $ | 4,104.9 | ||||||||||
Non-current liabilities | 1,777.6 | 1,246.8 |
As of December 31, 2021 | As of September 30, 2022 | |||||||||||||
(dollars in millions) | ||||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Accounts receivable, net | $ | 211.3 | $ | 42.8 | ||||||||||
Loans receivable | 1,535.5 | 1,460.5 | ||||||||||||
Investment in debentures/bonds | — | 196.1 | ||||||||||||
Others | 410.1 | 395.8 | ||||||||||||
Non-current assets | ||||||||||||||
Investment in debentures/bonds | $ | 296.1 | $ | — | ||||||||||
Others | 31.5 | 70.4 | ||||||||||||
Liabilities | ||||||||||||||
Current liabilities | ||||||||||||||
Loans payable | $ | 2,431.2 | $ | 2,767.6 | ||||||||||
Others | 914.0 | 582.3 | ||||||||||||
Non-Current liabilities | ||||||||||||||
Loans payable | $ | 500.0 | $ | 500.0 |
Period | Total Number of Shares Purchased | Weighted Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program ($) | ||||||||||||||||||||||
July 1-July 31, 2022 | — | — | — | 186,910,219 | ||||||||||||||||||||||
August 1-August 31, 2022 | 627,092 | 47.86 | 627,092 | 156,899,039 | ||||||||||||||||||||||
September 1-September 30, 2022 | — | — | — | 156,899,039 | ||||||||||||||||||||||
Total | 627,092 | 47.86 | 627,092 |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
22.1 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1* | ||||||||
32.2* | ||||||||
101.INS* | Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
By: | /s/ N.V. Tyagarajan | |||||||
N.V. Tyagarajan | ||||||||
Chief Executive Officer | ||||||||
By: | /s/ Michael Weiner | |||||||
Michael Weiner | ||||||||
Chief Financial Officer |
/s/ N.V. Tyagarajan | ||
N.V. Tyagarajan | ||
Chief Executive Officer |
/s/ Michael Weiner | ||
Michael Weiner | ||
Chief Financial Officer |
/s/ N.V. Tyagarajan | ||
N.V. Tyagarajan | ||
Chief Executive Officer |
/s/ Michael Weiner | ||
Michael Weiner | ||
Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 20,437 | $ 24,329 |
Allowance for credit losses, other assets | $ 3,198 | $ 3,711 |
Preferred shares, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred shares, authorized (in shares) | 250,000,000 | 250,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Common shares, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common shares, authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, issued (in shares) | 185,336,357 | 185,336,357 |
Common shares, outstanding (in shares) | 183,008,135 | 183,008,135 |
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 95,843 | $ 102,386 | $ 263,692 | $ 296,363 |
Other comprehensive income: | ||||
Currency translation adjustments | (71,092) | (9,043) | (179,933) | (36,721) |
Net income (loss) on cash flow hedging derivatives, net of taxes (Note 6) | (14,198) | 7,789 | (23,056) | 10,321 |
Retirement benefits, net of taxes | 374 | 497 | 1,920 | 2,128 |
Other comprehensive income (loss) | (84,916) | (757) | (201,069) | (24,272) |
Comprehensive income (loss) | $ 10,927 | $ 101,629 | $ 62,623 | $ 272,091 |
Consolidated Statements of Equity (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 23, 2022 |
Jun. 24, 2022 |
Mar. 23, 2022 |
Feb. 10, 2022 |
Feb. 09, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Statement of Stockholders' Equity [Abstract] | ||||||||||
Dividends per common share (in usd per share) | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.1075 | $ 0.1250 | $ 0.1075 | $ 0.3750 | $ 0.3225 | $ 0.0975 |
Organization |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Organization | OrganizationThe Company is a global professional services firm that drives digitally-led innovation and runs digitally-enabled intelligent operations for its clients, guided by its experience running thousands of processes for hundreds of Fortune Global 500 clients. The Company has over 117,700 employees serving clients in key industry verticals from more than 30 countries. |
Summary of significant accounting policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant accounting policies | Summary of significant accounting policies (a) Basis of preparation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, they do not include certain information and note disclosures required by generally accepted accounting principles for annual financial reporting and should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The accompanying consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the results of operations for these periods. The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Genpact Limited, a Bermuda company, and all of its subsidiaries that are more than 50% owned and controlled. When the Company does not have a controlling interest in an entity but exerts significant influence over the entity, the Company applies the equity method of accounting. All intercompany transactions and balances are eliminated in consolidation. (b) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, intangible assets and goodwill, revenue recognition, allowance for credit losses, valuation allowances for deferred tax assets, the valuation of derivative financial instruments, the measurement of lease liabilities and right-of-use (“ROU”) assets, measurements of stock-based compensation, assets and obligations related to employee benefits, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, variable consideration, other obligations for revenue recognition, income tax uncertainties and other contingencies. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable, and management has made assumptions about the possible effects of the ongoing COVID-19 pandemic on critical and significant accounting estimates. Although these estimates and assumptions are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements. (c) Business combinations, goodwill and other intangible assets The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standard Codification (“ASC”) Topic 805, Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Contingent consideration is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is re-measured to fair value as of each reporting date until the contingency is resolved. Changes in fair value are recognized in earnings. All assets and liabilities of the acquired businesses, including goodwill, are assigned to reporting units. Acquisition-related costs are expensed as incurred under selling, general and administrative expenses. 2. Summary of significant accounting policies (Continued) Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis on December 31, based on a number of factors, including operating results, business plans and future cash flows. The Company performs an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the assessment of events or circumstances, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, based on the quantitative impairment analysis, the carrying value of the goodwill of a reporting unit exceeds the fair value of such goodwill, an impairment loss is recognized in an amount equal to the excess. In addition, the Company performs a qualitative assessment of goodwill impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 10 for information and related disclosures. Intangible assets acquired individually or with a group of other assets or in a business combination and developed internally are carried at cost less accumulated amortization and accumulated impairment loss based on their estimated useful lives as follows:
Intangible assets are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. In business combinations where the fair value of identifiable tangible and intangible net assets purchased exceeds the cost of the acquired business, the Company recognizes the resulting gain under “Other operating (income) expense, net” in the consolidated statements of income. The Company also capitalizes certain software and technology-related development costs incurred in connection with developing or obtaining software or technology for sale/lease to customers when the initial design phase is completed and commercial and technological feasibility has been established. Any development cost incurred before technological feasibility is established is expensed as incurred as research and development costs. Technological feasibility is established upon completion of a detailed design program or, in its absence, completion of a working model. Capitalized software and technology costs include only (i) external direct costs of materials and services utilized in developing or obtaining software and technology and (ii) compensation and related benefits for employees who are directly associated with the project. Costs incurred in connection with developing or obtaining software or technology for sale/lease to customers which are under development and not put to use are disclosed under “intangible assets under development.” Advances paid towards the acquisition of intangible assets outstanding as of each balance sheet date are disclosed under “intangible assets under development.” Capitalized software and technology costs are included in intangible assets under technology-related intangible assets on the Company’s balance sheet and are amortized on a straight-line basis when placed into service over the estimated useful lives of the software and technology. The Company evaluates the remaining useful life of intangible assets that are being amortized at each reporting period wherever events and circumstances warrant a revision to the remaining period of amortization, and the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. 2. Summary of significant accounting policies (Continued) (d) Financial instruments and concentration of credit risk Financial instruments that potentially subject the Company to concentration of credit risk are reflected principally in cash and cash equivalents, derivative financial instruments and accounts receivable. The Company places its cash and cash equivalents and derivative financial instruments with corporations and banks with high investment grade ratings, limits the amount of credit exposure with any one corporation or bank and conducts ongoing evaluations of the creditworthiness of the corporations and banks with which it does business. To reduce its credit risk on accounts receivable, the Company conducts ongoing credit evaluations of its customers. (e) Accounts receivable Accounts receivable are recorded at the invoiced or to be invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for current expected credit losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses which are adjusted to current market conditions and a reasonable and supportable forecast. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company uses revolving accounts receivable-based facilities in the normal course of business as part of managing its cash flows. The Company accounts for receivables sold under these facilities as a sale of financial assets pursuant to ASC 860 “Transfers and Servicing” and de-recognizes these receivables, as well as the related allowances, from its balance sheets. Generally, the fair value of accounts receivable sold approximates their book value due to their short-term nature, and any gains or losses on the sale of these receivables are recorded at the time of transfer and included under "interest income (expense), net" in the Company’s consolidated statements of income. (f) Revenue Recognition The Company derives its revenue primarily from business process management services, including analytics, consulting and related digital solutions and information technology services, which are provided primarily on a time-and-material, transaction or fixed-price basis. The Company recognizes revenue upon the transfer of control of promised services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. Revenues from services rendered under time-and-materials and transaction-based contracts are recognized as the services are provided. The Company’s fixed-price contracts include contracts for customization of applications, maintenance and support services. Revenues from these contracts are recognized ratably over the term of the agreement. The Company accrues for revenue and unbilled receivables for services rendered between the last billing date and the balance sheet date. The Company’s contracts with its customers also include incentive payments received for discrete benefits delivered or promised to be delivered to the customer or service level agreements that could result in credits or refunds to the customer. Revenues relating to such arrangements are accounted for as variable consideration when the amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur. The Company records deferred revenue attributable to certain process transition activities where such activities do not represent separate performance obligations. Revenues relating to such transition activities are classified under contract liabilities and subsequently recognized ratably over the period in which the related services are performed. Costs relating to such transition activities are fulfillment costs which are directly related to the contract and result in the generation or enhancement of resources. Such costs are expected to be recoverable under the contract and are therefore classified as contract cost assets and recognized ratably over the estimated expected period of benefit under cost of revenue. 2. Summary of significant accounting policies (Continued) Revenues are reported net of value-added tax, business tax and applicable discounts and allowances. Reimbursements of out-of-pocket expenses received from customers have been included as part of revenues. Revenue for performance obligations that are satisfied over time is recognized in accordance with the methods prescribed for measuring progress. The input (cost expended) method has been used to measure progress towards completion as there is a direct relationship between input and the satisfaction of a performance obligation. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates. The Company enters into multiple-element revenue arrangements in which a customer may purchase a combination of products or services. The Company determines whether each product or service promised to a customer is capable of being distinct, and is distinct in the context of the contract. If not, the promised products or services are combined and accounted for as a single performance obligation. In the event of a multiple-element revenue arrangement, the Company allocates the arrangement consideration to separately identifiable performance obligations based on their relative stand-alone selling prices. Certain contracts may include offerings such as sale of licenses, which may be perpetual or subscription-based. Revenue from distinct perpetual licenses is recognized upfront at the point in time when the software is made available to the customer. Revenue from distinct, non-cancellable, subscription-based licenses is recognized at the point in time it is transferred to the customer. Revenue from any associated maintenance or ongoing support services is recognized ratably over the term of the contract. For a combined software license/services performance obligation, revenue is recognized over the period that the services are performed. All incremental and direct costs incurred for acquiring contracts, such as certain sales commissions, are classified as contract cost assets. Such costs are amortized over the expected period of benefit and recorded under selling, general and administrative expenses. Other upfront fees paid to customers are classified as contract assets. Such fees are amortized over the expected period of benefit and recorded as an adjustment to the transaction price and deducted from revenue. Timing of revenue recognition may differ from the timing of invoicing. If a payment is received in respect of services prior to the delivery of services, the payment is recognized as an advance from the customer and classified as a contract liability. Contract assets and contract liabilities relating to the same customer contract are offset against each other and presented on a net basis in the consolidated financial statements. Significant judgements The Company often enters into contracts with its customers that include promises to transfer multiple products and services to the customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately rather than together may require significant judgement. Judgement is also required to determine the standalone selling price for each distinct performance obligation. In instances where the standalone selling price is not directly observable, it is determined using information that may include market conditions and other observable inputs. Customer contracts sometimes include incentive payments received for discrete benefits delivered to the customer or service level agreements that could result in credits or refunds to the customer. Such amounts are estimated at contract inception and are adjusted at the end of each reporting period as additional information becomes available only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. 2. Summary of significant accounting policies (Continued) (g) Leases At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. At the inception of a lease, the consideration in the contract is allocated to each lease component based on its relative standalone price to determine the lease payments. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of the above criteria. For all leases at the lease commencement date, a ROU asset and a lease liability are recognized. The lease liability represents the present value of the lease payments under the lease. Lease liabilities are initially measured at the present value of the lease payments not yet paid, discounted using the discount rate for the lease at the lease commencement. The lease liabilities are subsequently measured on an amortized cost basis. The lease liability is adjusted to reflect interest on the liability and the lease payments made during the period. Interest on the lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. The ROU asset represents the right to use the leased asset for the lease term. The ROU asset for each lease initially includes the amount of the initial measurement of the lease liability adjusted for any lease payments made to the lessor at or before the commencement date, accrued lease liabilities and any lease incentives received or any initial direct costs incurred by the Company. The ROU asset of finance leases is subsequently measured at cost, less accumulated amortization and any accumulated impairment losses. The ROU asset of operating leases is subsequently measured from the carrying amount of the lease liability at the end of each reporting period, and is equal to the carrying amount of lease liabilities adjusted for (1) unamortized initial direct costs, (2) prepaid/(accrued) lease payments and (3) the unamortized balance of lease incentives received. The carrying value of ROU assets is reviewed for impairment, similar to long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company has elected to not separate lease and non-lease components for all of its leases and to use the recognition exemptions for lease contracts that, at commencement date, have a lease term of 12 months or less and do not contain a purchase option (“short-term leases”). Significant judgements The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. Under certain of its leases, the Company has a renewal and termination option to lease assets for additional terms between and ten years. The Company applies judgement in evaluating whether it is reasonably certain to exercise the option to renew or terminate the lease. The Company considers all relevant factors that create an economic incentive for it to exercise the renewal or termination option. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within the Company’s control and affects its ability to exercise (or not to exercise) the option to renew or terminate. 2. Summary of significant accounting policies (Continued) The Company has applied an incremental borrowing rate for the purpose of computing lease liabilities based on the remaining lease term and the rates prevailing in the jurisdictions where leases were executed. (h) Cost of revenue Cost of revenue primarily consists of salaries and benefits (including stock-based compensation), recruitment, training and related costs of employees who are directly responsible for the performance of services for customers, their supervisors and certain support personnel who may be dedicated to a particular client or a set of processes. It also includes operational expenses, which consist of facilities maintenance expenses, travel and living expenses, rent, IT expenses, and consulting and certain other expenses. Consulting charges represent the cost of consultants and contract resources with specialized skills who are directly responsible for the performance of services for clients and travel and other billable costs related to the Company’s clients. It also includes depreciation of property, plant and equipment, and amortization of intangible and ROU assets which are directly related to providing services that generate revenue. (i) Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses consist of expenses relating to salaries and benefits (including stock-based compensation) as well as costs related to recruitment, training and retention of senior management and other support personnel in enabling functions such as human resources, finance, legal, marketing, sales and sales support, and other support personnel. The operational costs component of SG&A expenses also includes travel and living costs for such personnel. SG&A expenses also include acquisition-related costs, legal and professional fees (which represent the costs of third party legal, tax, accounting and other advisors), investment in research and development, digital technology, advanced automation and robotics, and an allowance for credit losses. It also includes depreciation of property, plant and equipment, and amortization of intangibles and ROU assets other than those included in cost of revenue. (j) Credit losses An allowance for credit losses is recognized for all debt instruments other than those held at fair value through profit or loss. The Company pools its accounts receivable (other than deferred billings) based on similar risk characteristics in estimating expected credit losses. Credit losses for accounts receivable are based on the roll-rate method, and the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date. The Company has established a provision matrix based on historical credit loss experience, adjusted for forward-looking factors and the economic environment. The Company believes the most relevant forward-looking factors are economic environment, gross domestic product, inflation rates and unemployment rates for each of the countries in which the Company or its customers operate, and accordingly the Company adjusts historical loss rates based on expected changes in these factors. At every reporting date, observed historical default rates are updated to reflect changes in the Company’s forward-looking estimates. Credit losses for other financial assets and deferred billings are based on the discounted cash flow (“DCF”) method. Under the DCF method, the allowance for credit losses reflects the difference between the contractual cash flows due in accordance with the contract and the present value of the cash flows expected to be collected. The expected cash flows are discounted at the effective interest rate of the financial asset. Such allowances are based on the credit losses expected to arise over the life of the asset which includes consideration of prepayments based on the Company’s expectation as of the balance sheet date. A financial asset is written off when it is deemed uncollectible and there is no reasonable expectation of recovering the contractual cash flows. Expected recoveries of amounts previously written off, not to exceed the aggregate amounts previously written off, are included in determining the allowance at each reporting period. Credit losses are presented as a credit loss expense within “Selling, general and administrative expenses.” Subsequent recoveries of amounts previously written off are credited against the same line item. 2. Summary of significant accounting policies (Continued) (k) Reclassification Certain reclassifications have been made in the consolidated financial statements of prior periods to conform to the classification used in the current period. The impact of such reclassifications on the consolidated financial statements is not material. (l) Impairment of long-lived assets Long-lived assets, including certain intangible assets, to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such assets are required to be tested for impairment if the carrying amount of the assets is higher than the future undiscounted net cash flows expected to be generated by the assets. The impairment amount to be recognized is measured as the amount by which the carrying value of the assets exceeds their fair value. The Company determines fair value by using a discounted cash flow approach. (m) Assets held for sale A long-lived asset (or a disposal group for a long-lived asset comprising a group of assets and related liabilities) is classified as held for sale if it is highly probable that the asset will be recovered through sale rather than continuing use. The Company records assets held for sale at the lower of its carrying value or fair value less costs to sell. The following criteria are used to determine if a business is held for sale: (i) management, having the authority to approve a sale, commits to a plan to sell; (ii) the business is available for immediate sale in its present condition; (iii) an active program to locate a buyer and a plan to sell the business have been initiated; (iv) the sale of the business is probable within one year; (v) the business is being actively marketed for sale at a reasonable price relative to its fair value; and (vi) it is unlikely that the plan to sell will be withdrawn or that significant changes to the plan will be made. In determining the fair value of the assets less costs to sell, the Company considers factors including current sales prices for comparable assets, discounted cash flow projections, third party valuation and any indicative offers. The Company’s assumptions about fair value require significant judgment because the current market is highly sensitive to changes in economic conditions. The Company estimates the fair values of assets held for sale based on current market conditions and assumptions made by management, which may differ from actual results and may result in impairments if market conditions deteriorate. Any impairment loss on the initial classification and subsequent measurement is recognized as an expense. Any subsequent increase in fair value less costs to sell (not exceeding the accumulated impairment loss that has been previously recognized) is recognized in the income statement. When assets are classified as held for sale, the Company does not record any depreciation and amortization for the respective property, plant and equipment and intangibles. (n) Recently issued accounting pronouncements The authoritative bodies release standards and guidance which are assessed by management for impact on the Company’s consolidated financial statements. The following recently released accounting standard has not yet been adopted by the Company: In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance.” This ASU improves financial reporting by requiring disclosures that increase the transparency of transactions with governments. The ASU is effective for the Company for annual periods, beginning December 15, 2021. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated results of operations, cash flows, financial position and disclosures.
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Business acquisitions |
9 Months Ended |
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Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Business acquisitions | Business acquisitions (a) Hoodoo Digital, LLC On December 31, 2021, the Company acquired 100% of the outstanding equity/limited liability company interests in Hoodoo Digital, LLC, a Utah limited liability company, for total purchase consideration of $66,722. This amount represents cash consideration of $64,439, net of cash acquired of $2,283. The total purchase consideration paid by the Company to the sellers was $67,695, resulting in a recoverable of $973 on the closing date, which was subsequently recovered. The Company has made measurement period adjustments of $1,688 related to taxes, and this amount was outstanding as of September 30, 2022. The Company is evaluating adjustments related to certain income and other taxes, which, when determined, may result in the recognition of additional assets or liabilities as of the acquisition date. The measurement period will not exceed one year from the acquisition date. This acquisition furthers the Company's strategy to fuse experience and process innovation to help clients drive end-to-end digital transformation. Hoodoo Digital’s expertise with Adobe Experience Manager and other Adobe applications expands the Company's existing capabilities to provide clients with an end-to-end solution that integrates digital content, e-commerce, data analytics, and marketing operations. In connection with this acquisition, the Company recorded $16,200 in customer-related intangibles and $2,400 in marketing-related intangibles which have a weighted average amortization period of five years. Goodwill arising from the acquisition amounting to $46,033 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $4,338, to the Consumer and Healthcare segment in the amount of $7,321 and to the High Tech and Manufacturing segment in the amount of $34,374. Goodwill arising from this acquisition is deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with the Company’s existing operations. Acquisition-related costs of $1,177 have been included in selling, general and administrative expenses as incurred. In connection with the acquisition, the Company also acquired certain assets with a value of $5,629 and assumed certain liabilities amounting to $1,852. The agreement with the sellers provides a full indemnity to the Company for all pre-closing income and non-income tax liabilities up to a maximum of the purchase consideration, including interest and penalties thereon. The Company would not be financially or materially affected by any liabilities that may arise from such exposures. Accordingly, the Company recognized an indemnification asset of $278 based on the information that was available at the date of the acquisition, which is included in the assets taken over by the Company. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. (b) Enquero Inc On December 31, 2020, the Company acquired 100% of the outstanding equity interests in Enquero Inc, a California corporation, and certain affiliated entities in India, the Netherlands and Canada (collectively referred to as “Enquero”) for total purchase consideration of $148,797. This amount represents cash consideration of $137,166, net of cash acquired of $11,631. The total purchase consideration paid by the Company to the sellers on the closing date was $141,938. No portion of the purchase consideration is outstanding as of September 30, 2022. This acquisition increased the scale and depth of the Company’s data and analytics capabilities and enhanced the Company’s ability to accelerate the digital transformation journeys of its clients through cloud technologies and advanced data analytics. 3. Business acquisitions (Continued) In connection with this acquisition, the Company recorded $49,000 in customer-related intangibles, $9,500 in marketing-related intangibles and $1,400 in technology-related intangibles, which have a weighted average amortization period of four years. Goodwill arising from the acquisition amounting to $87,874 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $2,594, to the Consumer and Healthcare segment in the amount of $22,548 and to the High Tech and Manufacturing segment in the amount of $62,732. The goodwill arising from this acquisition is not deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with the Company’s existing operations. Acquisition-related costs of $1,590 have been included in selling, general and administrative expenses as incurred. In connection with the transaction, the Company also acquired certain assets with a value of $32,879, assumed certain liabilities amounting to $17,232 and recognized a net deferred tax liability of $14,343. The agreement with the sellers provides a full indemnity to the Company for all pre-closing income and non-income tax liabilities up to a maximum of the purchase consideration, including interest and penalties thereon. The Company would not be financially or materially affected by any liabilities that may arise from such exposures. Accordingly, the Company recognized an indemnification asset of $5,968 based on the information that was available at the date of the acquisition, which is included in the assets taken over by the Company. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. (c) SomethingDigital.Com LLC On October 5, 2020, the Company acquired 100% of the outstanding equity/limited liability company interests in SomethingDigital.Com LLC, a New York limited liability company, for total purchase consideration of $57,451. This amount represents cash consideration of $56,073, net of cash acquired of $1,378. The total purchase consideration paid by the Company to the sellers on the closing date was $57,704, resulting in a recoverable of $253. No portion of the purchase consideration is outstanding as of September 30, 2022. This acquisition supported the Company’s strategy to integrate experience and process innovation to help clients on their digital transformation journeys and expanded on the Company’s existing experience capabilities to support end-to-end digital commerce solutions, both business-to-business and business-to-consumer. Additionally, this acquisition expanded the Company’s capabilities into Magento Commerce, which powers Adobe Commerce Cloud, and Shopify Plus, a cloud-based e-commerce platform for high volume merchants. In connection with this acquisition, the Company recorded $11,900 in customer-related intangibles and $3,500 in marketing-related intangibles which have a weighted average amortization period of four years. Goodwill arising from the acquisition amounting to $36,926 has been allocated using a relative fair value allocation method to two of the Company’s reporting segments as follows: to the Consumer and Healthcare segment in the amount of $30,373 and to the High Tech and Manufacturing segment in the amount of $6,553. Of the total goodwill arising from this acquisition, $35,084 is deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with those of the Company’s existing operations. Acquisition-related costs of $1,060 have been included in selling, general and administrative expenses as incurred. In connection with the transaction, the Company also acquired certain assets with a value of $9,538, assumed certain liabilities amounting to $4,494 and recognized a net deferred tax asset of $81. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. 3. Business acquisitions (Continued) (d) Rightpoint Consulting, LLC On November 12, 2019, the Company acquired 100% of the outstanding equity/limited liability company interests in Rightpoint Consulting, LLC, an Illinois limited liability company, and certain affiliated entities in the United States and India (collectively referred to as “Rightpoint”) for total purchase consideration of $270,669. This amount includes cash consideration of $268,170, net of cash acquired of $2,499. The total purchase consideration paid by the Company to the sellers on the closing date was $248,470, resulting in a payable of $22,199. $2,517 of the total purchase consideration remains payable as of September 30, 2022. This acquisition expanded the Company’s capabilities in improving customer experience. The securities purchase agreement between the Company and the selling equity holders of Rightpoint provided certain of the selling equity holders the option to elect to either (a) receive 100% consideration in cash at the closing date for their limited liability company interests and vested options or (b) “roll over” and retain 25% of their Rightpoint limited liability company interests and vested options for a three-year rollover period and receive cash consideration at closing for the remaining 75% of their Rightpoint limited liability company interests and vested options. Certain selling equity holders elected to receive deferred, variable earn-out consideration with an estimated value of $21,500 over the rollover period of three years. The amount of deferred earn-out consideration ultimately payable by the Company to the selling equity holders of Rightpoint will be based on the future revenue multiple of the acquired business. Additionally, under the purchase agreement the selling equity holders are obligated to sell their rollover interests to the Company. Accordingly, the Company has obtained control over 100% of the outstanding equity/limited liability company interests of Rightpoint as of November 12, 2019. See Note 5, “Fair value measurements,” for additional details. In connection with this acquisition, the Company recorded $46,000 in customer-related intangibles and $29,000 in marketing-related intangibles which have a weighted average amortization period of five years. Goodwill arising from the acquisition amounting to $177,181 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $16,983, to the Consumer and Healthcare segment in the amount of $42,993 and to the High Tech and Manufacturing segment in the amount of $117,205. Of the total goodwill arising from this acquisition, $91,929 is deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with those of the Company. Acquisition-related costs of $7,385 have been included in selling, general and administrative expenses as incurred. In connection with the transaction, the Company also acquired certain assets with a value of $39,140, assumed certain liabilities amounting to $22,295 and recognized a net deferred tax liability of $1,643. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition.
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Accounts receivable, net of allowance for credit losses |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable, net of allowance for credit losses | Accounts receivable, net of allowance for credit losses The following table provides details of the Company’s allowance for credit losses on accounts receivable:
4. Accounts receivable, net of allowance for credit losses (Continued) Accounts receivable were $912,071 and $1,014,687, and allowances for credit losses were $24,329 and $20,437, resulting in net accounts receivable balances of $887,742 and $994,250 as of December 31, 2021 and September 30, 2022, respectively. As of September 30, 2022, the Company reclassified accounts receivable amounting to $4,653 as assets held for sale. See Note 8 for additional information. In addition, deferred billings were $48,071 and $59,103 and allowances for credit losses on deferred billings were $3,711 and $3,198, resulting in net deferred billings balances of $44,360 and $55,905 as of December 31, 2021 and September 30, 2022, respectively. During the nine months ended September 30, 2021 and 2022, the Company recorded a release of $541 and $513, respectively, to cost and expense on account of credit losses on deferred billings. Deferred billings, net of related allowances for credit losses, are included under “other assets” in the Company's consolidated balance sheet as of December 31, 2021 and September 30, 2022. The Company has a revolving accounts receivable-based facility of $100,000 permitting it to sell accounts receivable to banks on a non-recourse basis in the ordinary course of business. The aggregate maximum capacity utilized by the Company at any time during the period ended December 31, 2021 and September 30, 2022 was $7,053 and $67,439, respectively. The principal amount outstanding against this facility as of December 31, 2021 and September 30, 2022 was $0 and $27,302, respectively. The cost of factoring such accounts receivable during the three and nine months ended September 30, 2021 and 2022 was $29 and $146, respectively, and $40 and $304, respectively. Gains or losses on the sales are recorded at the time of transfer of the accounts receivable and are included under "interest income (expense), net" in the Company's consolidated statements of income.
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Fair value measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements The Company measures certain financial assets and liabilities, including derivative instruments, at fair value on a recurring basis. The fair value measurements of these financial assets and liabilities were determined using the following inputs as of December 31, 2021 and September 30, 2022:
5. Fair value measurements (Continued)
(a)Derivative assets are included in “prepaid expenses and other current assets” and “other assets.” Deferred compensation plan assets are included in “other assets” in the consolidated balance sheets. (b)Included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets. (c)The Company values its derivative instruments based on market observable inputs, including both forward and spot prices for the relevant currencies and interest rate indices for relevant interest rates. The quotes are taken from an independent market database. (d)The fair value of earn-out consideration, calculated as the present value of expected future payments to be made to the sellers of acquired businesses, was derived by estimating the future financial performance of the acquired businesses using the earn-out formula and performance targets specified in each purchase agreement and adjusting the result to reflect the Company’s estimate of the likelihood of achievement of such targets. Given the significance of the unobservable inputs, the valuations are classified in level 3 of the fair value hierarchy. (e)Deferred compensation plan assets consist of life insurance policies held under a Rabbi Trust. Assets held in the Rabbi Trust are valued based on the cash surrender value of the insurance contract, which is determined based on the fair value of the underlying assets included in the insurance portfolio and are therefore classified within level 3 of the fair value hierarchy. (f)The fair value of the deferred compensation plan liability is derived based on the fair value of the underlying assets in the insurance policies and is therefore classified within level 3 of the fair value hierarchy. 5. Fair value measurements (Continued) The following table provides a roll-forward of the fair value of earn-out consideration categorized as level 3 in the fair value hierarchy for the three and nine months ended September 30, 2021 and 2022:
(a)Includes an interest payment on earn-out consideration in excess of the acquisition date fair value, which is included in “cash flows from operating activities,” amounting to $440 for the three and nine months ended September 30, 2021 and $0 for the three and nine months ended September 30, 2022. (b)Changes in the fair value of earn-out consideration are reported in “other operating (income) expense, net” in the consolidated statements of income. (c)“Others” is comprised of interest expense included in “interest income (expense), net” and the impact of changes in foreign exchange reported in “foreign exchange gains (losses), net” in the consolidated statements of income. This also includes a cumulative translation adjustment reported as a component of “other comprehensive income (loss).” The following table provides a roll-forward of the fair value of deferred compensation plan assets categorized as level 3 in the fair value hierarchy for the three and nine months ended September 30, 2021 and 2022:
(a)Changes in the fair value of plan assets are reported in “other income (expense), net” in the consolidated statements of income. The following table provides a roll-forward of the fair value of deferred compensation liabilities categorized as level 3 in the fair value hierarchy for the three and nine months ended September 30, 2021 and 2022:
5. Fair value measurements (Continued) (a)Changes in the fair value of deferred compensation plan liabilities are reported in “selling, general and administrative expenses” in the consolidated statements of income.
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Business acquisitions | Business acquisitions (a) Hoodoo Digital, LLC On December 31, 2021, the Company acquired 100% of the outstanding equity/limited liability company interests in Hoodoo Digital, LLC, a Utah limited liability company, for total purchase consideration of $66,722. This amount represents cash consideration of $64,439, net of cash acquired of $2,283. The total purchase consideration paid by the Company to the sellers was $67,695, resulting in a recoverable of $973 on the closing date, which was subsequently recovered. The Company has made measurement period adjustments of $1,688 related to taxes, and this amount was outstanding as of September 30, 2022. The Company is evaluating adjustments related to certain income and other taxes, which, when determined, may result in the recognition of additional assets or liabilities as of the acquisition date. The measurement period will not exceed one year from the acquisition date. This acquisition furthers the Company's strategy to fuse experience and process innovation to help clients drive end-to-end digital transformation. Hoodoo Digital’s expertise with Adobe Experience Manager and other Adobe applications expands the Company's existing capabilities to provide clients with an end-to-end solution that integrates digital content, e-commerce, data analytics, and marketing operations. In connection with this acquisition, the Company recorded $16,200 in customer-related intangibles and $2,400 in marketing-related intangibles which have a weighted average amortization period of five years. Goodwill arising from the acquisition amounting to $46,033 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $4,338, to the Consumer and Healthcare segment in the amount of $7,321 and to the High Tech and Manufacturing segment in the amount of $34,374. Goodwill arising from this acquisition is deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with the Company’s existing operations. Acquisition-related costs of $1,177 have been included in selling, general and administrative expenses as incurred. In connection with the acquisition, the Company also acquired certain assets with a value of $5,629 and assumed certain liabilities amounting to $1,852. The agreement with the sellers provides a full indemnity to the Company for all pre-closing income and non-income tax liabilities up to a maximum of the purchase consideration, including interest and penalties thereon. The Company would not be financially or materially affected by any liabilities that may arise from such exposures. Accordingly, the Company recognized an indemnification asset of $278 based on the information that was available at the date of the acquisition, which is included in the assets taken over by the Company. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. (b) Enquero Inc On December 31, 2020, the Company acquired 100% of the outstanding equity interests in Enquero Inc, a California corporation, and certain affiliated entities in India, the Netherlands and Canada (collectively referred to as “Enquero”) for total purchase consideration of $148,797. This amount represents cash consideration of $137,166, net of cash acquired of $11,631. The total purchase consideration paid by the Company to the sellers on the closing date was $141,938. No portion of the purchase consideration is outstanding as of September 30, 2022. This acquisition increased the scale and depth of the Company’s data and analytics capabilities and enhanced the Company’s ability to accelerate the digital transformation journeys of its clients through cloud technologies and advanced data analytics. 3. Business acquisitions (Continued) In connection with this acquisition, the Company recorded $49,000 in customer-related intangibles, $9,500 in marketing-related intangibles and $1,400 in technology-related intangibles, which have a weighted average amortization period of four years. Goodwill arising from the acquisition amounting to $87,874 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $2,594, to the Consumer and Healthcare segment in the amount of $22,548 and to the High Tech and Manufacturing segment in the amount of $62,732. The goodwill arising from this acquisition is not deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with the Company’s existing operations. Acquisition-related costs of $1,590 have been included in selling, general and administrative expenses as incurred. In connection with the transaction, the Company also acquired certain assets with a value of $32,879, assumed certain liabilities amounting to $17,232 and recognized a net deferred tax liability of $14,343. The agreement with the sellers provides a full indemnity to the Company for all pre-closing income and non-income tax liabilities up to a maximum of the purchase consideration, including interest and penalties thereon. The Company would not be financially or materially affected by any liabilities that may arise from such exposures. Accordingly, the Company recognized an indemnification asset of $5,968 based on the information that was available at the date of the acquisition, which is included in the assets taken over by the Company. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. (c) SomethingDigital.Com LLC On October 5, 2020, the Company acquired 100% of the outstanding equity/limited liability company interests in SomethingDigital.Com LLC, a New York limited liability company, for total purchase consideration of $57,451. This amount represents cash consideration of $56,073, net of cash acquired of $1,378. The total purchase consideration paid by the Company to the sellers on the closing date was $57,704, resulting in a recoverable of $253. No portion of the purchase consideration is outstanding as of September 30, 2022. This acquisition supported the Company’s strategy to integrate experience and process innovation to help clients on their digital transformation journeys and expanded on the Company’s existing experience capabilities to support end-to-end digital commerce solutions, both business-to-business and business-to-consumer. Additionally, this acquisition expanded the Company’s capabilities into Magento Commerce, which powers Adobe Commerce Cloud, and Shopify Plus, a cloud-based e-commerce platform for high volume merchants. In connection with this acquisition, the Company recorded $11,900 in customer-related intangibles and $3,500 in marketing-related intangibles which have a weighted average amortization period of four years. Goodwill arising from the acquisition amounting to $36,926 has been allocated using a relative fair value allocation method to two of the Company’s reporting segments as follows: to the Consumer and Healthcare segment in the amount of $30,373 and to the High Tech and Manufacturing segment in the amount of $6,553. Of the total goodwill arising from this acquisition, $35,084 is deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with those of the Company’s existing operations. Acquisition-related costs of $1,060 have been included in selling, general and administrative expenses as incurred. In connection with the transaction, the Company also acquired certain assets with a value of $9,538, assumed certain liabilities amounting to $4,494 and recognized a net deferred tax asset of $81. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. 3. Business acquisitions (Continued) (d) Rightpoint Consulting, LLC On November 12, 2019, the Company acquired 100% of the outstanding equity/limited liability company interests in Rightpoint Consulting, LLC, an Illinois limited liability company, and certain affiliated entities in the United States and India (collectively referred to as “Rightpoint”) for total purchase consideration of $270,669. This amount includes cash consideration of $268,170, net of cash acquired of $2,499. The total purchase consideration paid by the Company to the sellers on the closing date was $248,470, resulting in a payable of $22,199. $2,517 of the total purchase consideration remains payable as of September 30, 2022. This acquisition expanded the Company’s capabilities in improving customer experience. The securities purchase agreement between the Company and the selling equity holders of Rightpoint provided certain of the selling equity holders the option to elect to either (a) receive 100% consideration in cash at the closing date for their limited liability company interests and vested options or (b) “roll over” and retain 25% of their Rightpoint limited liability company interests and vested options for a three-year rollover period and receive cash consideration at closing for the remaining 75% of their Rightpoint limited liability company interests and vested options. Certain selling equity holders elected to receive deferred, variable earn-out consideration with an estimated value of $21,500 over the rollover period of three years. The amount of deferred earn-out consideration ultimately payable by the Company to the selling equity holders of Rightpoint will be based on the future revenue multiple of the acquired business. Additionally, under the purchase agreement the selling equity holders are obligated to sell their rollover interests to the Company. Accordingly, the Company has obtained control over 100% of the outstanding equity/limited liability company interests of Rightpoint as of November 12, 2019. See Note 5, “Fair value measurements,” for additional details. In connection with this acquisition, the Company recorded $46,000 in customer-related intangibles and $29,000 in marketing-related intangibles which have a weighted average amortization period of five years. Goodwill arising from the acquisition amounting to $177,181 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $16,983, to the Consumer and Healthcare segment in the amount of $42,993 and to the High Tech and Manufacturing segment in the amount of $117,205. Of the total goodwill arising from this acquisition, $91,929 is deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with those of the Company. Acquisition-related costs of $7,385 have been included in selling, general and administrative expenses as incurred. In connection with the transaction, the Company also acquired certain assets with a value of $39,140, assumed certain liabilities amounting to $22,295 and recognized a net deferred tax liability of $1,643. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition.
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Derivative financial instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments | Derivative financial instruments The Company is exposed to the risk of rate fluctuations on its foreign currency assets and liabilities and on foreign currency denominated forecasted cash flows and interest rates. The Company has established risk management policies, including the use of derivative financial instruments to hedge foreign currency assets and liabilities, foreign currency denominated forecasted cash flows and interest rate risk. These derivative financial instruments consist of deliverable and non-deliverable forward foreign exchange contracts, treasury rate locks and interest rate swaps. The Company enters into these contracts with counterparties that are banks or other financial institutions, and the Company considers the risk of non-performance by such counterparties not to be material. The forward foreign exchange contracts and interest rate swaps mature during a period of up to 51 months and the forecasted transactions are expected to occur during the same period. The following table presents the aggregate notional principal amounts of outstanding derivative financial instruments together with the related balance sheet exposure:
(a)Notional amounts are key elements of derivative financial instrument agreements but do not represent the amount exchanged by counterparties and do not measure the Company’s exposure to credit, foreign exchange, interest rate or market risks. However, the amounts exchanged are based on the notional amounts and other provisions of the underlying derivative financial instrument agreements. Notional amounts are denominated in U.S. dollars. (b)Balance sheet exposure is denominated in U.S. dollars and denotes the mark-to-market impact of the derivative financial instruments on the reporting date. 6. Derivative financial instruments (Continued) FASB guidance on derivatives and hedging requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. In accordance with the FASB guidance on derivatives and hedging, the Company designates foreign exchange forward contracts, interest rate swaps and treasury rate locks as cash flow hedges. Foreign exchange forward contracts are entered into to cover the effects of future exchange rate variability on forecasted revenues and purchases of services, and interest rate swaps and treasury rate locks are entered into to cover interest rate fluctuation risk. In addition to this program, the Company uses derivative instruments that are not accounted for as hedges under the FASB guidance in order to hedge foreign exchange risks related to balance sheet items, such as receivables and intercompany borrowings, that are denominated in currencies other than the Company’s underlying functional currency. The fair value of the Company’s derivative instruments and their location in the Company’s financial statements are summarized in the table below:
Cash flow hedges For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain (loss) on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction is recognized in the consolidated statements of income. Gains (losses) on the derivatives, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in earnings as incurred. The Company executed a treasury rate lock agreement for $350,000 in connection with future interest payments to be made on its senior notes issued by Genpact Luxembourg S.à r.l. (“Genpact Luxembourg”) and Genpact USA, Inc. (“Genpact USA”), both wholly-owned subsidiaries of the Company, in March 2021 (the “2021 Senior Notes”), and the treasury rate lock was designated as a cash flow hedge. The treasury rate lock agreement was terminated on March 23, 2021 and a deferred gain was recorded in accumulated other comprehensive income and is being amortized to interest expense over the life of the 2021 Senior Notes. The remaining gain to be amortized related to the treasury rate lock agreement as of September 30, 2022 was $571. 6. Derivative financial instruments (Continued) In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss) (“OCI”), and the related tax effects are summarized below:
The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below:
6. Derivative financial instruments (Continued) There were no gains (losses) recognized in the statement of income on the ineffective portion of derivatives and excluded from effectiveness testing for the three and nine months ended September 30, 2021 and 2022, respectively. Non-designated Hedges
(a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items such as receivables and intercompany borrowings, and were not originally designated as hedges under FASB guidance on derivatives and hedging. Realized gains (losses) and changes in the fair value of these derivatives are recorded in foreign exchange gains (losses), net in the consolidated statements of income. In connection with the COVID-19 pandemic, the Company has reevaluated its hedging arrangements. The Company has considered the effect of changes, if any, in both counterparty credit risk and the Company’s own non-performance risk while assessing hedge effectiveness and measuring hedge ineffectiveness. The Company believes that its hedges continue to be effective after taking into account the expected impact of the COVID-19 pandemic on the Company’s hedged transactions.
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Prepaid expenses and other current assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following:
As of September 30, 2022, the Company reclassified certain prepaid expenses and other current assets amounting to $1,200 to assets held for sale. See Note 8 for additional information.
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Assets and liabilities held for sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities held for sale | Assets and liabilities held for sale The Company is taking actions to realign its portfolio to focus on emerging solutions where it sees the greatest opportunities for growth, and deprioritizing assets that no longer fit with its long-term strategy. Pursuant to a plan approved by management in the second quarter of 2022, the Company is in the process of divesting a business that comprises part of the Company's Consumer and Healthcare segment. It is the Company’s intention to complete the sale of this business within the twelve months following the end of the second quarter of 2022. Accordingly, the Company classified this business as held for sale during the second quarter of 2022. As a result, the Company classified $37,047 of assets (before recording an impairment charge of $21,426) and $8,410 of liabilities as held for sale as of September 30, 2022. During the three and nine months ended September 30, 2022, the Company recorded a non-cash impairment charge of $21,426 to adjust the carrying amount of assets to their fair value. Of the total impairment charge of $21,426, $19,801 pertains to intangible assets and $1,625 pertains to goodwill. The impairment loss has been recorded in "other operating (income) expense, net" in the consolidated statement of income. See Note 10 for additional information. The components of assets and liabilities of the business classified as held for sale (after recording an impairment charge) in the consolidated balance sheet consist of the following:
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Property, plant and equipment, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment, net | Property, plant and equipment, net The following table provides the gross and net amount of property, plant and equipment:
Depreciation expense on property, plant and equipment for the nine months ended September 30, 2021 and 2022 was $46,305 and $42,102, respectively, and for the three months ended September 30, 2021 and 2022 was $14,131 and $13,442, respectively. Computer software amortization for the nine months ended September 30, 2021 and 2022 was $4,469 and $3,874, respectively, and for the three months ended September 30, 2021 and 2022 was $1,461 and $1,192, respectively. The Company recorded a write-down to certain property, plant and equipment during the three and nine months ended September 30, 2021 and 2022, as described in Note 10. 9. Property, plant and equipment, net (Continued) As of September 30, 2022, the Company reclassified certain property, plant and equipment with a gross carrying value and accumulated depreciation of $368 and $350, respectively, to assets held for sale. See Note 8 for additional information.
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Goodwill and intangible assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and intangible assets | Goodwill and intangible assets The following table presents the changes in goodwill for the year ended December 31, 2021 and nine months ended September 30, 2022:
The following table presents the changes in goodwill by reporting unit for the year ended December 31, 2021:
The following table presents the changes in goodwill by reporting unit for the nine months ended September 30, 2022:
As of September 30, 2022, the Company reclassified goodwill (before impairment) amounting to $1,625 attributable to its Consumer and Healthcare segment as assets held for sale. See Note 8 for additional information. The total amount of goodwill deductible for tax purposes was $326,795 and $305,244 (including goodwill reclassified as held for sale) as of December 31, 2021 and September 30, 2022, respectively. 10. Goodwill and intangible assets (Continued) The Company’s intangible assets are as follows:
As of September 30, 2022, the Company reclassified certain intangible assets (before impairment) with a gross carrying value and accumulated amortization of $50,432 and $24,261, respectively, to assets held for sale. See Note 8 for additional information. Amortization expenses for intangible assets acquired as part of a business combination and disclosed in the consolidated statements of income under amortization of acquired intangible assets for the nine months ended September 30, 2021 and 2022 were $44,624 and $32,805, respectively, and for the three months ended September 30, 2021 and 2022 were $13,898 and $10,604, respectively. Amortization expenses for internally-developed and other intangible assets disclosed in the consolidated statements of income under cost of revenue and selling, general and administrative expenses for the nine months ended September 30, 2021 and 2022 were $18,841 and $12,264, respectively, and for the three months ended September 30, 2021 and 2022 were $6,919 and $2,595, respectively. During the three and nine months ended September 30, 2021 and 2022, the Company tested for recoverability certain customer-related and technology-related intangible assets, including those under development, and certain property, plant and equipment, as a result of changes in market trends and the Company’s investment strategy, including the Company's decisions to cease certain service offerings. Based on the results of this testing, the Company determined that the carrying values of the assets tested were not recoverable, and the Company recorded complete write-downs of the carrying values of these assets amounting to $915 and $1,377 for the nine months ended September 30, 2021 and 2022, respectively, and zero for the three months ended September 30, 2021 and 2022, respectively. These write-downs have been recorded in “other operating (income) expense, net” in the consolidated statement of income. 10. Goodwill and intangible assets (Continued) The summary below presents the impairment charges (on intangibles and goodwill) and write-downs (on property, plant and equipment) recorded for various categories of assets during the three and nine months ended September 30, 2021 and September 30, 2022:
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Short-term borrowings |
9 Months Ended |
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Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Short-term borrowings | Short-term borrowings The Company has the following borrowing facilities: a.Fund-based and non-fund-based credit facilities with banks, which are available for operational requirements in the form of overdrafts, letters of credit, guarantees and short-term loans. As of December 31, 2021 and September 30, 2022, the limits available were $24,727 and $22,869, respectively, of which $5,848 and $5,025, respectively, was utilized, constituting non-funded drawdown. b.A fund-based and non-fund based revolving credit facility of $500,000, which the Company obtained through an amendment of its existing credit agreement on August 9, 2018. The amended credit facility expires on August 8, 2023. The Company is in the process of refinancing its credit facility, and is currently in negotiation with various financial institutions, and the refinancing is expected to close in the fourth quarter of 2022. The funded drawdown amount under the Company’s revolving facilities bore interest at a rate equal to LIBOR plus a margin of 1.375% as of December 31, 2021 and September 30, 2022. The unutilized amount on the revolving facilities bore a commitment fee of 0.20% as of December 31, 2021 and September 30, 2022. As of December 31, 2021 and September 30, 2022, a total of $2,017 and $202,658, respectively, was utilized, of which $0 and $200,000, respectively, constituted funded drawdown and $2,017 and $2,658, respectively, constituted non-funded drawdown. The Company’s amended credit agreement contains certain customary covenants, including a maximum leverage covenant and a minimum interest coverage ratio. During the period ended December 31, 2021 and September 30, 2022, the Company was in compliance with the financial covenants of the credit agreement.
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Long-term debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | Long-term debt Borrowings under the Company's credit facility, which was amended in August 2018, bear interest at a rate equal to, at the election of the Company, either LIBOR plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum, in each case subject to adjustment based on the Company’s debt ratings provided by Standard & Poor’s Rating Services and Moody’s Investors Service, Inc. Based on the Company’s election and current credit rating, the applicable interest rate is equal to LIBOR plus 1.375% per annum. The amended credit agreement restricts certain payments, including dividend payments, if there is an event of default under the amended credit agreement or if the Company is not, or after making the payment would not be, in compliance with certain financial covenants contained in the amended credit agreement. These covenants require the Company to maintain a net debt to EBITDA leverage ratio of below 3x and an interest coverage ratio of more than 3x. During the period ended September 30, 2022, the Company was in compliance with the terms of the credit agreement, including all of the financial covenants therein. 12. Long-term debt (Continued) The Company’s retained earnings are not subject to any restrictions on availability to make dividend payments to shareholders, subject to compliance with the financial covenants described above that are contained in the amended credit agreement. As of December 31, 2021 and September 30, 2022, the amount outstanding under the term loan under the amended credit agreement, net of debt amortization expense of $687 and $358, was $560,313 and $535,142, respectively. As of December 31, 2021 and September 30, 2022, the term loan bore interest at a rate equal to LIBOR plus a margin of 1.375% per annum. Indebtedness under the amended credit facility is unsecured. The amount outstanding on the term loan as of September 30, 2022 requires quarterly payments of $8,500, and the balance of the loan is due and payable upon the maturity of the term loan on August 8, 2023. The Company is in the process of refinancing its credit facility, and is currently in negotiation with various financial institutions, and the refinancing is expected to close in the fourth quarter of 2022. The maturity profile of the term loan outstanding as of September 30, 2022, net of debt amortization expense, is as follows:
Genpact Luxembourg S.à r.l., a wholly-owned subsidiary of the Company, issued $400,000 aggregate principal amount of 3.375% senior notes in November 2019 (the “2019 Senior Notes”). The 2019 Senior Notes are fully guaranteed by the Company. The total debt issuance cost of $2,937 incurred in connection with the 2019 Senior Notes offering is being amortized over the life of the 2019 Senior Notes as an additional interest expense. As of December 31, 2021 and September 30, 2022, the amount outstanding under the 2019 Senior Notes, net of debt amortization expense of $1,702 and $1,266, was $398,298 and $398,734, respectively, which is payable on December 1, 2024. In March 2021, Genpact Luxembourg S.à r.l. and Genpact USA, Inc., both wholly-owned subsidiaries of the Company, co-issued $350,000 aggregate principal amount of 1.750% senior notes (the “2021 Senior Notes,” and together with the 2019 Senior Notes, the “Senior Notes”). The 2021 Senior Notes are fully guaranteed by the Company. The total debt issuance cost of $3,032 incurred in connection with the 2021 Senior Notes is being amortized over the life of the 2021 Senior Notes as additional interest expense. As of December 31, 2021 and September 30, 2022, the amount outstanding under the 2021 Senior Notes, net of debt amortization expense of $2,571 and $2,121, respectively, was $347,429 and $347,879, respectively, which is payable on April 10, 2026. The Company pays interest on (i) the 2019 Senior Notes semi-annually in arrears on June 1 and December 1 of each year, and (ii) the 2021 Senior Notes semi-annually in arrears on April 10 and October 10 of each year, ending on the maturity dates of December 1, 2024 and April 10, 2026, respectively. The Company, at its option, may redeem the Senior Notes at any time in whole or in part, at a redemption price equal to (i) 100% of the principal amount of the notes redeemed, together with accrued and unpaid interest on the redeemed amount, and (ii) if the notes are redeemed prior to, in the case of the 2019 Senior Notes, November 1, 2024, and in the case of the 2021 Senior Notes, March 10, 2026, a specified “make-whole” premium. The Senior Notes are subject to certain customary covenants, including limitations on the ability of the Company and certain of its subsidiaries to incur debt secured by liens, engage in certain sale and leaseback transactions and consolidate, merge, convey or transfer their assets substantially as an entirety. During the period ended September 30, 2022, the Company and its applicable subsidiaries were in compliance with the covenants. Upon certain change of control transactions, the applicable issuer or issuers will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus accrued and unpaid interest. The interest rate payable on the Senior Notes is subject to adjustment if the credit rating of the Senior Notes is downgraded, up to a maximum increase of 2.0%. 12. Long-term debt (Continued) A summary of the Company’s long-term debt is as follows:
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Accrued expenses and other current liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities Accrued expenses and other current liabilities consist of the following:
As September 30, 2022, the Company reclassified certain accrued expenses and other current liabilities amounting to $7,141 to liabilities held for sale. See Note 8 for additional information.
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Other liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | Other liabilities Other liabilities consist of the following:
As September 30, 2022, the Company reclassified certain other liabilities amounting to $859 to liabilities held for sale. See Note 8 for additional information.
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Employee benefit plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee benefit plans | Employee benefit plans The Company has employee benefit plans in the form of certain statutory and other programs covering its employees. Defined benefit plans In accordance with Indian law, the Company maintains a defined benefit retirement plan covering substantially all of its Indian employees. In accordance with Mexican law, the Company provides termination benefits to all of its Mexican employees. In addition, certain of the Company’s subsidiaries in the Philippines, Israel and Japan sponsor defined benefit retirement programs. Net defined benefit plan costs for the three and nine months ended September 30, 2021 and 2022 include the following components:
15. Employee benefit plans (Continued) Defined contribution plans During the three and nine months ended September 30, 2021 and 2022, the Company contributed the following amounts to defined contribution plans in various jurisdictions:
Deferred compensation plan On July 1, 2018, Genpact LLC, a wholly-owned subsidiary of the Company, adopted an executive deferred compensation plan (the “Plan”). The Plan provides a select group of U.S.-based members of Company management with the opportunity to defer from 1% to 80% of their base salary and from 1% to 100% of their qualifying bonus compensation (or such other minimums or maximums as determined by the Plan administrator from time to time) pursuant to the terms of the Plan. Participant deferrals are 100% vested at all times. The Plan also allows for discretionary supplemental employer contributions by the Company, in its sole discretion, which will be subject to a two-year vesting schedule (50% vesting on the one-year anniversary of approval of the contribution and 50% vesting on the second year anniversary of approval of the contribution) or such other vesting schedule as determined by the Company. However, no such contribution has been made by the Company to date. The Plan also provides an option for participants to elect to receive deferred compensation and earnings thereon on either fixed date(s) no earlier than 2 years following the applicable Plan year (or end of the applicable performance period for performance-based bonus compensation) or following a separation from service, in each case either in a lump sum or in annual installments over a term of up to 15 years. Participants can elect to change or re-defer their rights to receive the deferred compensation until the 10th anniversary following their separation from service, subject to fulfillment of certain conditions. Each Plan participant’s compensation deferrals are credited or debited with notional investment gains and losses equal to the performance of selected hypothetical investment funds offered under the Plan and elected by the participant. The Company has investments in funds held in Company-owned life insurance policies which are held in a Rabbi Trust that are classified as trading securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. The securities are classified as trading securities because they are held for resale in anticipation of short-term fluctuations in market prices. The trading securities are stated at fair value. The liability for the deferred compensation plan was $38,007 and $36,583 as of December 31, 2021 and September 30, 2022, respectively, and is included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets. In connection with the administration of the Plan, the Company has purchased Company-owned life insurance policies insuring the lives of certain employees. The cash surrender value of these policies was $38,584 and $37,183 as of December 31, 2021 and September 30, 2022, respectively. The cash surrender value of these insurance policies is included in “other assets” in the consolidated balance sheets. 15. Employee benefit plans (Continued)During the nine months ended September 30, 2021 and 2022, the change in the fair value of Plan assets was $2,658 and $(10,011), respectively, and for the three months ended September 30, 2021 and 2022, the change in the fair value of Plan assets was $(84) and $(1,964), respectively, which is included in “other income (expense), net,” in the consolidated statements of income. During the nine months ended September 30, 2021 and 2022, the change in the fair value of deferred compensation liabilities was $2,526 and $(10,035), respectively, and for the the three months ended September 30, 2021 and 2022, the change in the fair value of deferred compensation liabilities was $(159) and $(1,977), respectively, which is included in “selling, general and administrative expenses.”
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Stock-based compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | Stock-based compensation The Company has issued options under the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007 Omnibus Plan”) and the Genpact Limited 2017 Omnibus Incentive Compensation Plan (the “2017 Omnibus Plan”) to eligible persons, including employees, directors and certain other persons associated with the Company. Under the 2007 Omnibus Plan, shares underlying options forfeited, expired, terminated or cancelled under any of the Company’s predecessor plans were added to the number of shares otherwise available for grant under the 2007 Omnibus Plan. The 2007 Omnibus Plan was amended and restated on April 11, 2012 to increase the number of common shares authorized for issuance by 5,593,200 shares to 15,000,000 shares. Further, during the year ended December 31, 2012, the number of common shares authorized for issuance under the 2007 Omnibus Plan was increased by 8,858,823 shares as a result of a one-time adjustment to outstanding unvested share awards in connection with a special dividend payment. On May 9, 2017, the Company’s shareholders approved the adoption of the 2017 Omnibus Plan, pursuant to which 15,000,000 Company common shares are available for issuance. The 2017 Omnibus Plan was amended and restated on April 5, 2019 and April 5, 2022 to increase the number of common shares authorized for issuance by 8,000,000 shares to 23,000,000 shares and by 3,500,000 shares to 26,500,000 shares, respectively. No grants may be made under the 2007 Omnibus Plan after the date of adoption of the 2017 Omnibus Plan. Grants that were outstanding under the 2007 Omnibus Plan as of the date of Company’s adoption of the 2017 Omnibus Plan remain subject to the terms of the 2007 Omnibus Plan. Stock-based compensation costs relating to the foregoing plans during the nine months ended September 30, 2021 and September 30, 2022 were $57,554 and $53,712, respectively, and for the three months ended September 30, 2021 and September 30, 2022 were $21,150 and $18,873, respectively. These costs have been allocated to “cost of revenue” and “selling, general and administrative expenses.” Stock options All options granted under the 2007 and 2017 Omnibus Plans are exercisable into common shares of the Company, have a contractual period of ten years and vest over to five years unless specified otherwise in the applicable award agreement. The Company recognizes compensation cost over the vesting period of the option. Compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholes option-pricing model. The following table shows the significant assumptions used in determining the fair value of options granted in the nine months ended September 30, 2021 and September 30, 2022. The Company granted options covering 1,831,180 common shares in the nine months ended September 30, 2021.
16. Stock-based compensation (Continued) A summary of stock option activity during the nine months ended September 30, 2022 is set out below:
(a)Options expected to vest reflect an estimated forfeiture rate. As of September 30, 2022, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $21,073, which will be recognized over the weighted average remaining requisite vesting period of 3.0 years. Restricted share units The Company has granted restricted share units (“RSUs”) under the 2007 and 2017 Omnibus Plans. Each RSU represents the right to receive one common share. The fair value of each RSU is the market price of one common share of the Company on the date of the grant. The RSUs granted to date have graded vesting schedules of three months to four years. The compensation expense is recognized on a straight-line basis over the vesting term. A summary of RSU activity during the nine months ended September 30, 2022 is set out below:
(a)28,866 RSUs vested during the nine months ended September 30, 2022 in respect of which 19,992 shares (net of minimum statutory tax withholding) were issued during the nine months ended September 30, 2022. (b)The number of RSUs expected to vest reflects the application of an estimated forfeiture rate. 16. Stock-based compensation (Continued) 49,513 RSUs vested in the year ended December 31, 2020, in respect of which 49,446 shares were issued during the nine months ended September 30, 2022 after withholding shares to the extent required to satisfy minimum statutory withholding obligations. 7,863 RSUs vested in the year ended December 31, 2021, in respect of which 5,496 shares were issued during the nine months ended September 30, 2022 after withholding shares to the extent required to satisfy minimum statutory withholding obligations. As of September 30, 2022, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $15,478, which will be recognized over the weighted average remaining requisite vesting period of 2.0 years. Performance units The Company also grants stock awards in the form of performance units (“PUs”) and has granted PUs under both the 2007 and 2017 Omnibus Plans. Each PU represents the right to receive one common share at a future date based on the Company’s performance against specified targets. PUs granted to date have vesting schedules of six months to three years. The fair value of each PU is the market price of one common share of the Company on the date of grant and assumes that performance targets will be achieved. PUs granted under the plans are subject to cliff vesting. The compensation expense for such awards is recognized on a straight-line basis over the vesting terms. During the performance period, the Company’s estimate of the number of shares to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets. A summary of PU activity during the nine months ended September 30, 2022 is set out below:
(a)2,161,789 PUs that vested during the period were net settled upon vesting by issuing 1,300,511 shares (net of minimum statutory tax withholding). (b)Represents an adjustment made in March 2022 to the number of shares subject to the PUs granted in 2021 upon certification of the level of achievement of the performance targets underlying such awards. (c)The number of PUs expected to vest reflects the application of an estimated forfeiture rate. As of September 30, 2022, the total remaining unrecognized stock-based compensation cost related to PUs amounted to $72,523, which will be recognized over the weighted average remaining requisite vesting period of 1.8 years. 16. Stock-based compensation (Continued) Employee Stock Purchase Plan (ESPP) On May 1, 2008, the Company adopted the Genpact Limited U.S. Employee Stock Purchase Plan and the Genpact Limited International Employee Stock Purchase Plan (together, the “ESPP”). In April 2018, these plans were amended and restated, and their terms were extended to August 31, 2028. The ESPP allows eligible employees to purchase the Company’s common shares through payroll deductions at 90% of the closing price of the Company’s common shares on the last business day of each purchase interval. The dollar amount of common shares purchased under the ESPP may not exceed 15% of the participating employee’s base salary, subject to a cap of $25 per employee per calendar year. With effect from September 1, 2009, the offering periods commence on the first business day in March, June, September and December of each year and end on the last business day of the subsequent May, August, November and February. 4,200,000 common shares have been reserved for issuance in the aggregate over the term of the ESPP. During the nine months ended September 30, 2021 and 2022, 216,378 and 253,377 common shares, respectively, were issued under the ESPP. The ESPP is considered compensatory under the FASB guidance on Compensation-Stock Compensation. The compensation expense for the ESPP is recognized in accordance with the FASB guidance on Compensation-Stock Compensation. The compensation expense for the ESPP during the nine months ended September 30, 2021 and 2022 was $1,050 and $1,182, respectively, and for the three months ended September 30, 2021 and 2022 was $335 and $329, respectively, and has been allocated to cost of revenue and selling, general and administrative expense
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Capital stock |
9 Months Ended |
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Sep. 30, 2022 | |
Equity [Abstract] | |
Capital stock | Capital stock Share repurchases The Board of Directors of the Company (the “Board”) has authorized repurchases of up to $1,750,000 under the Company’s existing share repurchase program. Under the program, shares may be purchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. During the nine months ended September 30, 2021 and 2022, the Company repurchased 3,592,409 and 4,067,044 of its common shares, respectively, on the open market at a weighted average price of $40.96 and $44.75 per share, respectively, for an aggregate cash amount of $147,152 and $182,012, respectively. All repurchased shares have been retired. The Company records repurchases of its common shares on the settlement date of each transaction. Shares purchased and retired are deducted to the extent of their par value from common stock and from retained earnings for the excess over par value. Direct costs incurred to acquire the shares are included in the total cost of the shares purchased. For the nine months ended September 30, 2021 and 2022, retained earnings were reduced by the direct costs related to share repurchases of $72 and $81, respectively. $156,899 remained available for share repurchases under the Company’s existing share repurchase program as of September 30, 2022. This repurchase program does not obligate the Company to acquire any specific number of shares and does not specify an expiration date. 17. Capital stock (Continued) Dividend On February 9, 2021, the Company announced that its Board had approved a 10% increase in its quarterly cash dividend to $0.1075 per share, up from $0.0975 per share in 2020, representing an annual dividend of $0.43 per common share, up from $0.39 per share in 2020, payable to holders of the Company’s common shares. On March 19, 2021, June 23, 2021 and September 24, 2021, the Company paid a dividend of $0.1075 per share, amounting to $20,115, $20,133 and $20,213 in the aggregate, to shareholders of record as of March 10, 2021, June 11, 2021 and September 10, 2021, respectively. On February 10, 2022, the Company announced that its Board had approved a 16% increase in its quarterly cash dividend to $0.125 per share, up from $0.1075 per share in 2021, representing a planned annual dividend of $0.50 per common share, up from $0.43 per share in 2021, payable to holders of the Company’s common shares. On March 23, 2022, June 24, 2022 and September 23, 2022, the Company paid a dividend of $0.125 per share, amounting to $23,134, $22,935 and $22,873 in the aggregate, to shareholders of record as of March 10, 2022, June 10, 2022 and September 9, 2022, respectively.
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Earnings per share |
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Earnings per share | Earnings per share The Company calculates earnings per share in accordance with FASB guidance on earnings per share. Basic and diluted earnings per common share give effect to the change in the number of Company common shares outstanding. The calculation of basic earnings per common share is determined by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the respective periods. The potentially dilutive shares, consisting of outstanding options on common shares, restricted share units, common shares to be issued under the ESPP and performance units, have been included in the computation of diluted net earnings per share and the number of weighted average shares outstanding, except where the result would be anti-dilutive. The number of shares subject to stock awards outstanding but not included in the computation of diluted earnings per common share because their effect was anti-dilutive is 1,698,735 and 2,757,114 for the nine months ended September 30, 2021 and 2022, respectively, and 1,556,671 and 2,667,958 for the three months ended September 30, 2021 and 2022, respectively.
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Segment reporting |
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Segment reporting | Segment reporting The Company manages various types of business process and transformation services in an integrated manner for clients in various industries and geographic locations. The Company's operating segments are significant strategic business units that align its products and services with how it manages its business, approaches key markets and interacts with its clients. During the second quarter of 2022, the Company renamed its three reportable segments. Beginning in the second quarter of 2022, the Company's: (1) Banking, Capital Markets and Insurance segment has been renamed the Financial Services segment; (2) Consumer Goods, Retail, Life Sciences and Healthcare segment has been renamed the Consumer and Healthcare segment; and (3) High Tech, Manufacturing and Services segment has been renamed the High Tech and Manufacturing segment. The Company’s Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"), reviews operating segment revenue, which is a GAAP measure, and operating segment adjusted income from operations ("AOI"), which is a non-GAAP measure. The Company does not allocate, and therefore the CODM does not evaluate, stock-based compensation expenses, amortization and impairment of acquired intangible assets, foreign exchange gain/(losses), interest income/(expense), restructuring expenses, acquisition related expenses, any losses or gains from businesses held for sale, including impairment charges, other income/(expense), or income taxes by segment. The Company’s operating assets and liabilities pertain to multiple segments. The Company manages assets and liabilities on a total company basis, not by operating segment, and therefore asset and liabilities information and capital expenditures by operating segment are not presented to the CODM and are not reviewed by the CODM. The CODM continues to review the operating segment revenue, which is a GAAP measure, and operating segment adjusted income from operations, which is a non-GAAP measure. Revenues and adjusted income from operations for each of the Company’s segments for the three months ended September 30, 2021 were as follows:
#Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of over-absorption of overhead and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes. 19. Segment reporting (Continued) Revenues and adjusted income from operations for each of the Company’s segments for the three months ended September 30, 2022 were as follows:
(a) During the second quarter of 2022, the Company's management approved a plan to divest a business that comprises part of the Company's Consumer and Healthcare segment. The revenues and associated losses, including an impairment charge recorded in the third quarter of 2022, attributable to this business have been excluded from the computation of adjusted operating income margin with effect from April 1, 2022, as management believes that excluding these items provides useful information about the Company's financial performance and underlying business trends. *Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of under-absorption of overhead, unallocated allowance for credit losses and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes. 19. Segment reporting (Continued) Revenues and adjusted income from operations for each of the Company’s segments for the nine months ended September 30, 2021 were as follows:
##Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of over-absorption of overhead and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes. 19. Segment reporting (Continued) Revenues and adjusted income from operations for each of the Company’s segments for the nine months ended September 30, 2022 were as follows:
(b) During the second quarter of 2022, the Company's management approved a plan to divest a business that comprises part of the Company's Consumer and Healthcare segment. The revenues and associated losses, including an impairment charge recorded in the third quarter of 2022, attributable to this business have been excluded from the computation of adjusted operating income margin with effect from April 1, 2022, as management believes that excluding these items provides useful information about the Company's financial performance and underlying business trends. (c) The Company does not allocate these charges to individual segments in internal management reports used by the CODM. Accordingly, such expenses are included in the Company's segment reporting as “unallocated costs.” **Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of under-absorption of overhead, unallocated allowance for credit losses and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes.
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Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues | Net revenues Disaggregation of revenue In the following table, the Company’s revenue is disaggregated by the nature of services provided:
All three of the Company's segments include revenue from both Data-Tech-AI and Digital Operations. See Note 19 for additional information. During the second quarter of 2022, the Company's management modified the manner in which it disaggregates revenue for reporting and internal tracking purposes, and the Company now reports revenue disaggregated by the nature of services provided to the client, namely either Data-Tech-AI or Digital Operations. Prior to the second quarter of 2022, the Company disaggregated its revenue as revenue from the General Electric Company (GE) or revenue from Global Clients (other than GE). The Company has evaluated the impact of the COVID-19 pandemic on the Company’s net revenues for the three and nine months ended September 30, 2021 and 2022, respectively, to ensure that revenue is recognized after considering all impacts to the extent currently known. Impacts observed include constraints on the Company’s ability to render services, whether due to full or partial shutdowns of the Company’s facilities or travel restrictions, penalties relating to breaches of service level agreements, and contract terminations or contract performance delays initiated by clients. The Company’s net revenues for the three and nine months ended September 30, 2021 were lower than expected before the onset of the pandemic, primarily due to delays in obtaining client approvals to shift to a virtual, work-from-home operating environment, whether as a result of regulatory constraints or due to privacy or security concerns. The COVID-19 pandemic did not have a significant impact on the Company’s net revenues for the three and nine months ended September 30, 2022. Due to the nature of the pandemic, the Company will continue to monitor developments to identify significant uncertainties relating to revenue in future periods. Contract balances Accounts receivable include amounts for services that the Company has performed but for which payment has not been received. The Company typically follows a 30-day billing cycle and, as such, at any point in time may have accrued up to 30 days of revenues that have not been billed. The Company has determined that in instances where the timing of revenue recognition differs from the timing of invoicing, the related contracts generally do not include a significant financing component. Refer to Note 4 for details on the Company’s accounts receivable and allowance for credit losses. The following table shows the details of the Company’s contract balances:
(a)Included in "prepaid expenses and other current assets" and "other assets" in the consolidated balance sheet. 20. Net revenues (Continued) (b)Included in "accrued expenses and other current liabilities" and "other liabilities" in the consolidated balance sheet. As of September 30, 2022, the Company reclassified certain contract assets and contract liabilities of $2,270 and $2,038, respectively, to assets and liabilities held for sale. See Note 8 for additional information. Contract assets represent the contract acquisition fees or other upfront fees paid to a customer. Such costs are amortized over the expected period of benefit and recorded as an adjustment to the transaction price and deducted from revenue. The Company’s assessment did not indicate any significant impairment losses on its contract assets for the periods presented. Contract liabilities include that portion of revenue for which payments have been received in advance from customers. The Company also defers revenues attributable to certain process transition activities for which costs have been capitalized by the Company as contract fulfillment costs. Consideration received from customers, if any, relating to such transition activities is also included as part of contract liabilities. The contract liabilities are included within “Accrued expenses and other current liabilities” and “Other liabilities” in the unaudited consolidated balance sheets. The revenues are recognized as (or when) the performance obligation is fulfilled under the contract with the customer. Changes in the Company’s contract asset and liability balances during the three and nine months ended September 30, 2021 and 2022 were a result of normal business activity and not materially impacted by any other factors. Revenue recognized during the three months ended September 30, 2021 and 2022 that was included in the Company's contract liabilities balance at the beginning of the period was $60,756 and $63,762, respectively. Revenue recognized during the nine months ended September 30, 2021 and 2022 that was included in the Company's contract liabilities balance at the beginning of the period was $128,628 and $129,046, respectively. The following table includes estimated revenue expected to be recognized in the future related to remaining performance obligations as of September 30, 2022:
The following table provides details of the Company’s contract cost assets:
As of September 30, 2022, the Company reclassified certain contract assets amounting to $1,417 to assets and liabilities held for sale. See Note 8 for additional information.
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Other operating (income) expense, net |
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Other operating (income) expense, net | Other operating (income) expense, net
*See Notes 10 and 25 for additional information about other operating (income) expense, net for the three and nine months ended September 30, 2022.
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Interest income (expense), net |
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Interest income (expense), net | Interest income (expense), net
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Income taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes | Income taxes The Company determines its tax provision for interim periods using an estimate of its annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment. The Company’s effective tax rate (“ETR”) was 20.8% for the three months ended September 30, 2022, up from 17.3% for the three months ended September 30, 2021. The increase in the Company’s ETR in the three months ended September 30, 2022 is primarily due to a lower mix of benefits recorded in the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The following table summarizes activities related to the Company’s unrecognized tax benefits for uncertain tax positions for the nine months ended September 30, 2022:
As of December 31, 2021 and September 30, 2022, the Company had unrecognized tax benefits amounting to 25,651 and $22,673, respectively, which, if recognized, would impact the Company’s effective tax rate. As of December 31, 2021 and September 30, 2022, the Company had accrued $2,842 and $2,904, respectively, in interest and $628 and $528, respectively, for penalties relating to unrecognized tax benefits. |
Commitments and contingencies |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Capital commitments As of December 31, 2021 and September 30, 2022, the Company has committed to spend $13,317 and $22,403, respectively, under agreements to purchase property, plant and equipment. This amount is net of capital advances paid in respect of these purchases. Bank guarantees The Company has outstanding bank guarantees and letters of credit amounting to $7,865 and $7,683 as of December 31, 2021 and September 30, 2022, respectively. Bank guarantees are generally provided to government agencies and excise and customs authorities for the purpose of maintaining a bonded warehouse. These guarantees may be revoked if the government agencies suffer any losses or damages through the breach of any of the covenants contained in the agreements governing such guarantees. Other commitments Certain units of the Company’s Indian subsidiaries are established as Software Technology Parks of India units or Special Economic Zone (“SEZ”) units under the relevant regulations issued by the Government of India. These units are exempt from customs and other duties on imported and indigenous capital goods, stores and spares. SEZ units are also exempt from the Goods and Services Tax (“GST”) that was introduced in India in 2017. The Company has undertaken to pay taxes and duties, if any, in respect of capital goods, stores, spares and services consumed duty-free, in the event that certain terms and conditions are not fulfilled. Contingency (a) In February 2019, there was a judicial pronouncement in India with respect to defined contribution benefit payments interpreting certain statutory defined contribution obligations of employees and employers. It is not currently clear whether the interpretation set out in the pronouncement has retrospective application. If applied retrospectively, the interpretation would result in an increase in contributions payable by the Company for past periods for certain of its India-based employees. There are numerous interpretative challenges concerning the retrospective application of the judgment. Due to such challenges and a lack of interpretive guidance, and based on legal advice the Company has obtained on the matter, it is currently impracticable to reliably estimate the timing and amount of any payments the Company may be required to make. Accordingly, the Company plans to obtain further clarity and will evaluate the amount of a potential provision, if any. (b) The Indian taxing authorities (“ITA”) have initiated proceedings to examine the availability of a tax exemption claimed by the Company in respect of exports of services and related refunds under the Indian Goods and Services (“GST”) tax regime and the previous service tax regime. In the second quarter of 2020, the ITA began to challenge or reject the Company’s Indian GST and service tax refunds in certain Indian states. In total, refunds of $28,535 have been denied or challenged by the ITA. Additional refunds may be denied. The Company is pursuing appeals of the denied refunds before relevant appellate authorities. The Company had requested these refunds pursuant to the tax exemption available for exports under the previous service tax regime as well as the current GST regime in respect of services performed by the Company in India for affiliates and clients outside of India. In denying the refunds, the ITA have taken the position that the services provided are local services, which interpretation, if correct, would make the service tax and GST exemption on exports unavailable to the Company in respect of such services. Additional potentially material challenges and assessments may result from ongoing proceedings related to service tax recovery. The Company believes that the denial of the refunds claimed pursuant to the service tax and GST exemption is incorrect and that the risk that the liability will materialize is remote. The Government of India has issued an administrative circular which supports the Company’s position, and the Company believes that the appellate authorities will reverse the previous orders denying refunds owed to the Company. Accordingly, no reserve has been provided as of September 30, 2022. 24. Commitments and contingencies (Continued) (c) The ITA have also issued assessment orders to certain subsidiaries of the Company seeking to assess income tax on certain transactions that occurred in 2013 and 2015. The Company has received demands for potential tax claims related to these orders in an aggregate amount of $209,042, including interest through the date of the orders. This amount excludes penalties or interest accrued since the date of the orders. The Company is pursuing appeals before the relevant appellate authorities in respect of these orders. The Income Tax Appellate Tribunal of India (the “Tribunal”) has accepted the legal arguments made by the Company and ruled in favor of the Company in relation to demands of $100,589, and the corresponding assessment order has been cancelled. The ITA may appeal the Tribunal's ruling before a higher court. Based on its evaluation of the facts underlying the transactions and legal advice received on the matter, the Company believes that it is more likely than not that the Company’s position will ultimately prevail in respect of these transactions. Accordingly, no reserve has been provided as of September 30, 2022. (d) In September 2020, the Indian Parliament approved the Code on Social Security, 2020 (the “Code”), which will impact the Company’s contributions to its defined contribution and defined benefit plans for employees based in India. The date the changes will take effect is not yet known and the rules for quantifying the financial impact have not yet been published. The Company will evaluate the impact of the Code on the Company in its financial statements for the period in which the Code becomes effective and the related rules are published.
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Restructuring |
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Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring The Company has implemented a flexible, hybrid global delivery model in line with the Company's long-term strategy that incorporates a mix of offshore, onshore, near shore, and remote working. As a result, the Company determined that certain leases and employee roles were no longer needed. Accordingly, in the second quarter of 2022, the Company recorded a $38,815 restructuring charge relating to the abandonment of leased office premises and an employee severance charge. Of the total charge of $38,815, $21,684 was a non-cash charge (including $1,377 related to writing down of certain property, plant and equipment) recorded as other operating expense, which pertains to the abandonment of various leased office premises. The Company also recorded a severance charge of $17,131 in personnel expenses. The Company has sought out one or more third parties to sublease certain office premises from the Company, wherever applicable, instead of abandoning them. However, the Company has not been successful in such attempts, and the Company believes it is unlikely that it will be able to sublease such premises in the foreseeable future. No restructuring costs were incurred related to this restructuring plan in the third quarter of 2022.
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Subsequent Events |
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Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events Dividend On October 13, 2022, the Company announced that its Board of Directors has declared a dividend for the fourth quarter of 2022 of $0.125 per common share, which is payable on December 23, 2022 to shareholders of record as of the close of business on December 9, 2022. The declaration of any future dividends will be at the discretion of the Board of Directors and subject to Bermuda and other applicable laws.
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Summary of significant accounting policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Basis of preparation and principles of consolidation | (a) Basis of preparation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, they do not include certain information and note disclosures required by generally accepted accounting principles for annual financial reporting and should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The accompanying consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the results of operations for these periods. The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Genpact Limited, a Bermuda company, and all of its subsidiaries that are more than 50% owned and controlled. When the Company does not have a controlling interest in an entity but exerts significant influence over the entity, the Company applies the equity method of accounting. All intercompany transactions and balances are eliminated in consolidation.
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Use of estimates | (b) Use of estimatesThe preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, intangible assets and goodwill, revenue recognition, allowance for credit losses, valuation allowances for deferred tax assets, the valuation of derivative financial instruments, the measurement of lease liabilities and right-of-use (“ROU”) assets, measurements of stock-based compensation, assets and obligations related to employee benefits, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, variable consideration, other obligations for revenue recognition, income tax uncertainties and other contingencies. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable, and management has made assumptions about the possible effects of the ongoing COVID-19 pandemic on critical and significant accounting estimates. Although these estimates and assumptions are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||||||||||||
Business combinations | The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standard Codification (“ASC”) Topic 805, Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Contingent consideration is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is re-measured to fair value as of each reporting date until the contingency is resolved. Changes in fair value are recognized in earnings. All assets and liabilities of the acquired businesses, including goodwill, are assigned to reporting units. Acquisition-related costs are expensed as incurred under selling, general and administrative expenses. | ||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis on December 31, based on a number of factors, including operating results, business plans and future cash flows. The Company performs an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the assessment of events or circumstances, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, based on the quantitative impairment analysis, the carrying value of the goodwill of a reporting unit exceeds the fair value of such goodwill, an impairment loss is recognized in an amount equal to the excess. In addition, the Company performs a qualitative assessment of goodwill impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 10 for information and related disclosures. | ||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets | Intangible assets acquired individually or with a group of other assets or in a business combination and developed internally are carried at cost less accumulated amortization and accumulated impairment loss based on their estimated useful lives as follows:
Intangible assets are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. In business combinations where the fair value of identifiable tangible and intangible net assets purchased exceeds the cost of the acquired business, the Company recognizes the resulting gain under “Other operating (income) expense, net” in the consolidated statements of income. The Company also capitalizes certain software and technology-related development costs incurred in connection with developing or obtaining software or technology for sale/lease to customers when the initial design phase is completed and commercial and technological feasibility has been established. Any development cost incurred before technological feasibility is established is expensed as incurred as research and development costs. Technological feasibility is established upon completion of a detailed design program or, in its absence, completion of a working model. Capitalized software and technology costs include only (i) external direct costs of materials and services utilized in developing or obtaining software and technology and (ii) compensation and related benefits for employees who are directly associated with the project. Costs incurred in connection with developing or obtaining software or technology for sale/lease to customers which are under development and not put to use are disclosed under “intangible assets under development.” Advances paid towards the acquisition of intangible assets outstanding as of each balance sheet date are disclosed under “intangible assets under development.” Capitalized software and technology costs are included in intangible assets under technology-related intangible assets on the Company’s balance sheet and are amortized on a straight-line basis when placed into service over the estimated useful lives of the software and technology. The Company evaluates the remaining useful life of intangible assets that are being amortized at each reporting period wherever events and circumstances warrant a revision to the remaining period of amortization, and the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life.
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Financial instruments and concentration of credit risk | (d) Financial instruments and concentration of credit riskFinancial instruments that potentially subject the Company to concentration of credit risk are reflected principally in cash and cash equivalents, derivative financial instruments and accounts receivable. The Company places its cash and cash equivalents and derivative financial instruments with corporations and banks with high investment grade ratings, limits the amount of credit exposure with any one corporation or bank and conducts ongoing evaluations of the creditworthiness of the corporations and banks with which it does business. To reduce its credit risk on accounts receivable, the Company conducts ongoing credit evaluations of its customers. | ||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | (e) Accounts receivable Accounts receivable are recorded at the invoiced or to be invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for current expected credit losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses which are adjusted to current market conditions and a reasonable and supportable forecast. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company uses revolving accounts receivable-based facilities in the normal course of business as part of managing its cash flows. The Company accounts for receivables sold under these facilities as a sale of financial assets pursuant to ASC 860 “Transfers and Servicing” and de-recognizes these receivables, as well as the related allowances, from its balance sheets. Generally, the fair value of accounts receivable sold approximates their book value due to their short-term nature, and any gains or losses on the sale of these receivables are recorded at the time of transfer and included under "interest income (expense), net" in the Company’s consolidated statements of income.
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Revenue Recognition | (f) Revenue Recognition The Company derives its revenue primarily from business process management services, including analytics, consulting and related digital solutions and information technology services, which are provided primarily on a time-and-material, transaction or fixed-price basis. The Company recognizes revenue upon the transfer of control of promised services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. Revenues from services rendered under time-and-materials and transaction-based contracts are recognized as the services are provided. The Company’s fixed-price contracts include contracts for customization of applications, maintenance and support services. Revenues from these contracts are recognized ratably over the term of the agreement. The Company accrues for revenue and unbilled receivables for services rendered between the last billing date and the balance sheet date. The Company’s contracts with its customers also include incentive payments received for discrete benefits delivered or promised to be delivered to the customer or service level agreements that could result in credits or refunds to the customer. Revenues relating to such arrangements are accounted for as variable consideration when the amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur. The Company records deferred revenue attributable to certain process transition activities where such activities do not represent separate performance obligations. Revenues relating to such transition activities are classified under contract liabilities and subsequently recognized ratably over the period in which the related services are performed. Costs relating to such transition activities are fulfillment costs which are directly related to the contract and result in the generation or enhancement of resources. Such costs are expected to be recoverable under the contract and are therefore classified as contract cost assets and recognized ratably over the estimated expected period of benefit under cost of revenue. 2. Summary of significant accounting policies (Continued) Revenues are reported net of value-added tax, business tax and applicable discounts and allowances. Reimbursements of out-of-pocket expenses received from customers have been included as part of revenues. Revenue for performance obligations that are satisfied over time is recognized in accordance with the methods prescribed for measuring progress. The input (cost expended) method has been used to measure progress towards completion as there is a direct relationship between input and the satisfaction of a performance obligation. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates. The Company enters into multiple-element revenue arrangements in which a customer may purchase a combination of products or services. The Company determines whether each product or service promised to a customer is capable of being distinct, and is distinct in the context of the contract. If not, the promised products or services are combined and accounted for as a single performance obligation. In the event of a multiple-element revenue arrangement, the Company allocates the arrangement consideration to separately identifiable performance obligations based on their relative stand-alone selling prices. Certain contracts may include offerings such as sale of licenses, which may be perpetual or subscription-based. Revenue from distinct perpetual licenses is recognized upfront at the point in time when the software is made available to the customer. Revenue from distinct, non-cancellable, subscription-based licenses is recognized at the point in time it is transferred to the customer. Revenue from any associated maintenance or ongoing support services is recognized ratably over the term of the contract. For a combined software license/services performance obligation, revenue is recognized over the period that the services are performed. All incremental and direct costs incurred for acquiring contracts, such as certain sales commissions, are classified as contract cost assets. Such costs are amortized over the expected period of benefit and recorded under selling, general and administrative expenses. Other upfront fees paid to customers are classified as contract assets. Such fees are amortized over the expected period of benefit and recorded as an adjustment to the transaction price and deducted from revenue. Timing of revenue recognition may differ from the timing of invoicing. If a payment is received in respect of services prior to the delivery of services, the payment is recognized as an advance from the customer and classified as a contract liability. Contract assets and contract liabilities relating to the same customer contract are offset against each other and presented on a net basis in the consolidated financial statements. Significant judgements The Company often enters into contracts with its customers that include promises to transfer multiple products and services to the customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately rather than together may require significant judgement. Judgement is also required to determine the standalone selling price for each distinct performance obligation. In instances where the standalone selling price is not directly observable, it is determined using information that may include market conditions and other observable inputs. Customer contracts sometimes include incentive payments received for discrete benefits delivered to the customer or service level agreements that could result in credits or refunds to the customer. Such amounts are estimated at contract inception and are adjusted at the end of each reporting period as additional information becomes available only to the extent that it is probable that a significant reversal of any incremental revenue will not occur.
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Leases | (g) Leases At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. At the inception of a lease, the consideration in the contract is allocated to each lease component based on its relative standalone price to determine the lease payments. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of the above criteria. For all leases at the lease commencement date, a ROU asset and a lease liability are recognized. The lease liability represents the present value of the lease payments under the lease. Lease liabilities are initially measured at the present value of the lease payments not yet paid, discounted using the discount rate for the lease at the lease commencement. The lease liabilities are subsequently measured on an amortized cost basis. The lease liability is adjusted to reflect interest on the liability and the lease payments made during the period. Interest on the lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. The ROU asset represents the right to use the leased asset for the lease term. The ROU asset for each lease initially includes the amount of the initial measurement of the lease liability adjusted for any lease payments made to the lessor at or before the commencement date, accrued lease liabilities and any lease incentives received or any initial direct costs incurred by the Company. The ROU asset of finance leases is subsequently measured at cost, less accumulated amortization and any accumulated impairment losses. The ROU asset of operating leases is subsequently measured from the carrying amount of the lease liability at the end of each reporting period, and is equal to the carrying amount of lease liabilities adjusted for (1) unamortized initial direct costs, (2) prepaid/(accrued) lease payments and (3) the unamortized balance of lease incentives received. The carrying value of ROU assets is reviewed for impairment, similar to long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company has elected to not separate lease and non-lease components for all of its leases and to use the recognition exemptions for lease contracts that, at commencement date, have a lease term of 12 months or less and do not contain a purchase option (“short-term leases”). Significant judgements The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. Under certain of its leases, the Company has a renewal and termination option to lease assets for additional terms between and ten years. The Company applies judgement in evaluating whether it is reasonably certain to exercise the option to renew or terminate the lease. The Company considers all relevant factors that create an economic incentive for it to exercise the renewal or termination option. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within the Company’s control and affects its ability to exercise (or not to exercise) the option to renew or terminate. 2. Summary of significant accounting policies (Continued) The Company has applied an incremental borrowing rate for the purpose of computing lease liabilities based on the remaining lease term and the rates prevailing in the jurisdictions where leases were executed.
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Cost of revenue | (h) Cost of revenue Cost of revenue primarily consists of salaries and benefits (including stock-based compensation), recruitment, training and related costs of employees who are directly responsible for the performance of services for customers, their supervisors and certain support personnel who may be dedicated to a particular client or a set of processes. It also includes operational expenses, which consist of facilities maintenance expenses, travel and living expenses, rent, IT expenses, and consulting and certain other expenses. Consulting charges represent the cost of consultants and contract resources with specialized skills who are directly responsible for the performance of services for clients and travel and other billable costs related to the Company’s clients. It also includes depreciation of property, plant and equipment, and amortization of intangible and ROU assets which are directly related to providing services that generate revenue.
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Selling, general and administrative expenses | (i) Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses consist of expenses relating to salaries and benefits (including stock-based compensation) as well as costs related to recruitment, training and retention of senior management and other support personnel in enabling functions such as human resources, finance, legal, marketing, sales and sales support, and other support personnel. The operational costs component of SG&A expenses also includes travel and living costs for such personnel. SG&A expenses also include acquisition-related costs, legal and professional fees (which represent the costs of third party legal, tax, accounting and other advisors), investment in research and development, digital technology, advanced automation and robotics, and an allowance for credit losses. It also includes depreciation of property, plant and equipment, and amortization of intangibles and ROU assets other than those included in cost of revenue.
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Credit losses | (j) Credit losses An allowance for credit losses is recognized for all debt instruments other than those held at fair value through profit or loss. The Company pools its accounts receivable (other than deferred billings) based on similar risk characteristics in estimating expected credit losses. Credit losses for accounts receivable are based on the roll-rate method, and the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date. The Company has established a provision matrix based on historical credit loss experience, adjusted for forward-looking factors and the economic environment. The Company believes the most relevant forward-looking factors are economic environment, gross domestic product, inflation rates and unemployment rates for each of the countries in which the Company or its customers operate, and accordingly the Company adjusts historical loss rates based on expected changes in these factors. At every reporting date, observed historical default rates are updated to reflect changes in the Company’s forward-looking estimates. Credit losses for other financial assets and deferred billings are based on the discounted cash flow (“DCF”) method. Under the DCF method, the allowance for credit losses reflects the difference between the contractual cash flows due in accordance with the contract and the present value of the cash flows expected to be collected. The expected cash flows are discounted at the effective interest rate of the financial asset. Such allowances are based on the credit losses expected to arise over the life of the asset which includes consideration of prepayments based on the Company’s expectation as of the balance sheet date. A financial asset is written off when it is deemed uncollectible and there is no reasonable expectation of recovering the contractual cash flows. Expected recoveries of amounts previously written off, not to exceed the aggregate amounts previously written off, are included in determining the allowance at each reporting period. Credit losses are presented as a credit loss expense within “Selling, general and administrative expenses.” Subsequent recoveries of amounts previously written off are credited against the same line item. 2. Summary of significant accounting policies (Continued)
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Reclassification | (k) Reclassification Certain reclassifications have been made in the consolidated financial statements of prior periods to conform to the classification used in the current period. The impact of such reclassifications on the consolidated financial statements is not material. | ||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of long-lived assets | (l) Impairment of long-lived assets Long-lived assets, including certain intangible assets, to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such assets are required to be tested for impairment if the carrying amount of the assets is higher than the future undiscounted net cash flows expected to be generated by the assets. The impairment amount to be recognized is measured as the amount by which the carrying value of the assets exceeds their fair value. The Company determines fair value by using a discounted cash flow approach. | ||||||||||||||||||||||||||||||||||||||||||||||||
Assets held for sale | (m) Assets held for sale A long-lived asset (or a disposal group for a long-lived asset comprising a group of assets and related liabilities) is classified as held for sale if it is highly probable that the asset will be recovered through sale rather than continuing use. The Company records assets held for sale at the lower of its carrying value or fair value less costs to sell. The following criteria are used to determine if a business is held for sale: (i) management, having the authority to approve a sale, commits to a plan to sell; (ii) the business is available for immediate sale in its present condition; (iii) an active program to locate a buyer and a plan to sell the business have been initiated; (iv) the sale of the business is probable within one year; (v) the business is being actively marketed for sale at a reasonable price relative to its fair value; and (vi) it is unlikely that the plan to sell will be withdrawn or that significant changes to the plan will be made. In determining the fair value of the assets less costs to sell, the Company considers factors including current sales prices for comparable assets, discounted cash flow projections, third party valuation and any indicative offers. The Company’s assumptions about fair value require significant judgment because the current market is highly sensitive to changes in economic conditions. The Company estimates the fair values of assets held for sale based on current market conditions and assumptions made by management, which may differ from actual results and may result in impairments if market conditions deteriorate. Any impairment loss on the initial classification and subsequent measurement is recognized as an expense. Any subsequent increase in fair value less costs to sell (not exceeding the accumulated impairment loss that has been previously recognized) is recognized in the income statement. When assets are classified as held for sale, the Company does not record any depreciation and amortization for the respective property, plant and equipment and intangibles.
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Recently issued accounting pronouncements | (n) Recently issued accounting pronouncements The authoritative bodies release standards and guidance which are assessed by management for impact on the Company’s consolidated financial statements. The following recently released accounting standard has not yet been adopted by the Company: In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance.” This ASU improves financial reporting by requiring disclosures that increase the transparency of transactions with governments. The ASU is effective for the Company for annual periods, beginning December 15, 2021. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated results of operations, cash flows, financial position and disclosures.
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Summary of significant accounting policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated useful lives of intangible assets | Intangible assets acquired individually or with a group of other assets or in a business combination and developed internally are carried at cost less accumulated amortization and accumulated impairment loss based on their estimated useful lives as follows:
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Accounts receivable, net of allowance for credit losses (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allowance for credit losses | The following table provides details of the Company’s allowance for credit losses on accounts receivable:
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Fair value measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of assets and liabilities, including derivative instruments, at fair value on a recurring basis | The Company measures certain financial assets and liabilities, including derivative instruments, at fair value on a recurring basis. The fair value measurements of these financial assets and liabilities were determined using the following inputs as of December 31, 2021 and September 30, 2022:
5. Fair value measurements (Continued)
(a)Derivative assets are included in “prepaid expenses and other current assets” and “other assets.” Deferred compensation plan assets are included in “other assets” in the consolidated balance sheets. (b)Included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets. (c)The Company values its derivative instruments based on market observable inputs, including both forward and spot prices for the relevant currencies and interest rate indices for relevant interest rates. The quotes are taken from an independent market database. (d)The fair value of earn-out consideration, calculated as the present value of expected future payments to be made to the sellers of acquired businesses, was derived by estimating the future financial performance of the acquired businesses using the earn-out formula and performance targets specified in each purchase agreement and adjusting the result to reflect the Company’s estimate of the likelihood of achievement of such targets. Given the significance of the unobservable inputs, the valuations are classified in level 3 of the fair value hierarchy. (e)Deferred compensation plan assets consist of life insurance policies held under a Rabbi Trust. Assets held in the Rabbi Trust are valued based on the cash surrender value of the insurance contract, which is determined based on the fair value of the underlying assets included in the insurance portfolio and are therefore classified within level 3 of the fair value hierarchy. (f)The fair value of the deferred compensation plan liability is derived based on the fair value of the underlying assets in the insurance policies and is therefore classified within level 3 of the fair value hierarchy.
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Schedule of roll-forward of fair value of earn-out consideration categorized as level 3 in fair value hierarchy | The following table provides a roll-forward of the fair value of earn-out consideration categorized as level 3 in the fair value hierarchy for the three and nine months ended September 30, 2021 and 2022:
(a)Includes an interest payment on earn-out consideration in excess of the acquisition date fair value, which is included in “cash flows from operating activities,” amounting to $440 for the three and nine months ended September 30, 2021 and $0 for the three and nine months ended September 30, 2022. (b)Changes in the fair value of earn-out consideration are reported in “other operating (income) expense, net” in the consolidated statements of income. (c)“Others” is comprised of interest expense included in “interest income (expense), net” and the impact of changes in foreign exchange reported in “foreign exchange gains (losses), net” in the consolidated statements of income. This also includes a cumulative translation adjustment reported as a component of “other comprehensive income (loss).” The following table provides a roll-forward of the fair value of deferred compensation liabilities categorized as level 3 in the fair value hierarchy for the three and nine months ended September 30, 2021 and 2022:
5. Fair value measurements (Continued) (a)Changes in the fair value of deferred compensation plan liabilities are reported in “selling, general and administrative expenses” in the consolidated statements of income.
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Schedule of roll-forward of fair value of deferred compensation plan assets categorized as level 3 in fair value hierarchy | The following table provides a roll-forward of the fair value of deferred compensation plan assets categorized as level 3 in the fair value hierarchy for the three and nine months ended September 30, 2021 and 2022:
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Derivative financial instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of aggregate notional principal amounts of outstanding derivative financial instruments with related balance sheet exposure | The following table presents the aggregate notional principal amounts of outstanding derivative financial instruments together with the related balance sheet exposure:
(a)Notional amounts are key elements of derivative financial instrument agreements but do not represent the amount exchanged by counterparties and do not measure the Company’s exposure to credit, foreign exchange, interest rate or market risks. However, the amounts exchanged are based on the notional amounts and other provisions of the underlying derivative financial instrument agreements. Notional amounts are denominated in U.S. dollars. (b)Balance sheet exposure is denominated in U.S. dollars and denotes the mark-to-market impact of the derivative financial instruments on the reporting date. 6. Derivative financial instruments (Continued)
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Schedule of fair value of derivative instruments and their location in the Company's financial statements | The fair value of the Company’s derivative instruments and their location in the Company’s financial statements are summarized in the table below:
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Schedule gains (losses) recorded as component of other comprehensive income (loss) in connection with cash flow hedges | In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss) (“OCI”), and the related tax effects are summarized below:
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Schedule of gains or losses recognized in other comprehensive income (loss) | The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below:
(a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items such as receivables and intercompany borrowings, and were not originally designated as hedges under FASB guidance on derivatives and hedging. Realized gains (losses) and changes in the fair value of these derivatives are recorded in foreign exchange gains (losses), net in the consolidated statements of income.
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Prepaid expenses and other current assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following:
As of September 30, 2022, the Company reclassified certain prepaid expenses and other current assets amounting to $1,200 to assets held for sale. See Note 8 for additional information.
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Assets and liabilities held for sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities held for sale | The components of assets and liabilities of the business classified as held for sale (after recording an impairment charge) in the consolidated balance sheet consist of the following:
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Property, plant and equipment, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of gross and net amount of property, plant and equipment | The following table provides the gross and net amount of property, plant and equipment:
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Goodwill and intangible assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in goodwill | The following table presents the changes in goodwill for the year ended December 31, 2021 and nine months ended September 30, 2022:
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Schedule of goodwill | The following table presents the changes in goodwill by reporting unit for the year ended December 31, 2021:
The following table presents the changes in goodwill by reporting unit for the nine months ended September 30, 2022:
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Summary of intangible assets | The Company’s intangible assets are as follows:
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Schedule of impairment charge recorded for various categories of assets | The summary below presents the impairment charges (on intangibles and goodwill) and write-downs (on property, plant and equipment) recorded for various categories of assets during the three and nine months ended September 30, 2021 and September 30, 2022:
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Long-term debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of maturity profile of term loan outstanding net of debt amortization expense | The maturity profile of the term loan outstanding as of September 30, 2022, net of debt amortization expense, is as follows:
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Summary of long term debt | A summary of the Company’s long-term debt is as follows:
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Accrued expenses and other current liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following:
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Other liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other liabilities | Other liabilities consist of the following:
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Employee benefit plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net defined benefit plan costs | Net defined benefit plan costs for the three and nine months ended September 30, 2021 and 2022 include the following components:
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Schedule of amounts contributed to defined contribution plans in various jurisdictions | During the three and nine months ended September 30, 2021 and 2022, the Company contributed the following amounts to defined contribution plans in various jurisdictions:
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Stock-based compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of significant assumptions used in determining fair value of options granted | The following table shows the significant assumptions used in determining the fair value of options granted in the nine months ended September 30, 2021 and September 30, 2022. The Company granted options covering 1,831,180 common shares in the nine months ended September 30, 2021.
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Schedule of stock option activity | A summary of stock option activity during the nine months ended September 30, 2022 is set out below:
(a)Options expected to vest reflect an estimated forfeiture rate.
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Schedule of restricted share units activity | A summary of RSU activity during the nine months ended September 30, 2022 is set out below:
(a)28,866 RSUs vested during the nine months ended September 30, 2022 in respect of which 19,992 shares (net of minimum statutory tax withholding) were issued during the nine months ended September 30, 2022. (b)The number of RSUs expected to vest reflects the application of an estimated forfeiture rate.
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Schedule of performance units activity | A summary of PU activity during the nine months ended September 30, 2022 is set out below:
(a)2,161,789 PUs that vested during the period were net settled upon vesting by issuing 1,300,511 shares (net of minimum statutory tax withholding). (b)Represents an adjustment made in March 2022 to the number of shares subject to the PUs granted in 2021 upon certification of the level of achievement of the performance targets underlying such awards. (c)The number of PUs expected to vest reflects the application of an estimated forfeiture rate.
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Earnings per share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | The number of shares subject to stock awards outstanding but not included in the computation of diluted earnings per common share because their effect was anti-dilutive is 1,698,735 and 2,757,114 for the nine months ended September 30, 2021 and 2022, respectively, and 1,556,671 and 2,667,958 for the three months ended September 30, 2021 and 2022, respectively.
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Segment reporting (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue and adjusted income from operations by reporting segments | Revenues and adjusted income from operations for each of the Company’s segments for the three months ended September 30, 2021 were as follows:
#Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of over-absorption of overhead and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes. Revenues and adjusted income from operations for each of the Company’s segments for the three months ended September 30, 2022 were as follows:
(a) During the second quarter of 2022, the Company's management approved a plan to divest a business that comprises part of the Company's Consumer and Healthcare segment. The revenues and associated losses, including an impairment charge recorded in the third quarter of 2022, attributable to this business have been excluded from the computation of adjusted operating income margin with effect from April 1, 2022, as management believes that excluding these items provides useful information about the Company's financial performance and underlying business trends. *Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of under-absorption of overhead, unallocated allowance for credit losses and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes. Revenues and adjusted income from operations for each of the Company’s segments for the nine months ended September 30, 2021 were as follows:
##Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of over-absorption of overhead and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes. Revenues and adjusted income from operations for each of the Company’s segments for the nine months ended September 30, 2022 were as follows:
(b) During the second quarter of 2022, the Company's management approved a plan to divest a business that comprises part of the Company's Consumer and Healthcare segment. The revenues and associated losses, including an impairment charge recorded in the third quarter of 2022, attributable to this business have been excluded from the computation of adjusted operating income margin with effect from April 1, 2022, as management believes that excluding these items provides useful information about the Company's financial performance and underlying business trends. (c) The Company does not allocate these charges to individual segments in internal management reports used by the CODM. Accordingly, such expenses are included in the Company's segment reporting as “unallocated costs.” **Revenues, net for “Others” primarily represents the impact of foreign exchange fluctuations, which is not allocated to the Company’s segments for management’s internal reporting purposes. Adjusted income from operations for “Others” primarily represents the impact of under-absorption of overhead, unallocated allowance for credit losses and foreign exchange fluctuations, which are not allocated to the Company’s segments for management’s internal reporting purposes.
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Net revenues (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net revenues disaggregated by customer | In the following table, the Company’s revenue is disaggregated by the nature of services provided:
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Schedule of details of contract balances | The following table shows the details of the Company’s contract balances:
(a)Included in "prepaid expenses and other current assets" and "other assets" in the consolidated balance sheet. 20. Net revenues (Continued) (b)Included in "accrued expenses and other current liabilities" and "other liabilities" in the consolidated balance sheet.
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Schedule of estimated revenue expected to be recognized in the future related to remaining performance obligation | The following table includes estimated revenue expected to be recognized in the future related to remaining performance obligations as of September 30, 2022:
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Schedule of contract cost assets | The following table provides details of the Company’s contract cost assets:
|
Other operating (income) expense, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other operating (income) expense, net |
|
Interest income (expense), net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift, Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest income (expense), net |
|
Income taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activities related to unrecognized tax benefits for uncertain tax positions | The following table summarizes activities related to the Company’s unrecognized tax benefits for uncertain tax positions for the nine months ended September 30, 2022:
|
Organization - Narrative (Detail) |
Sep. 30, 2022
Employee
Country
|
---|---|
Product Information [Line Items] | |
Number of countries in which entity operates | Country | 30 |
Minimum | |
Product Information [Line Items] | |
Number of employees around the globe, minimum | Employee | 117,700 |
Summary of Significant Accounting Policies - Narrative (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Minimum | |
Schedule Of Significant Accounting Policies [Line Items] | |
Additional terms of termination option | 1 year |
Maximum | |
Schedule Of Significant Accounting Policies [Line Items] | |
Additional terms of termination option | 10 years |
Accounts Receivable, Net of Allowance for Credit Losses - Allowance for credit losses (Detail) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Receivables [Abstract] | ||
Opening balance as of January 1 | $ 24,329 | $ 27,707 |
Additions charged/reversal released to cost and expense | 1,558 | 910 |
Deductions/effect of exchange rate fluctuations | (5,450) | (4,288) |
Closing balance | $ 20,437 | $ 24,329 |
Fair Value Measurements - Schedule of roll-forward of fair value of earn-out consideration categorized as level 3 in fair value hierarchy (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Payment of earn-out consideration include in cash flows from operating activities | $ 0 | $ 440 | $ 0 | $ 440 |
Business acquisition contingent consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Opening balance | 5,406 | 5,716 | 5,406 | 8,272 |
Payments made on earn-out consideration (Note a) | (2,437) | 0 | (2,437) | (2,556) |
Change in fair value of earn-out consideration (Note b) | (452) | 0 | (452) | 0 |
Others (Note c) | 0 | 440 | 0 | 440 |
Closing balance | $ 2,517 | $ 6,156 | $ 2,517 | $ 6,156 |
Fair Value Measurements - Schedule of roll-forward of fair value of deferred compensation plan assets categorized as level 3 in fair value hierarchy (Detail) - Deferred compensation assets - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Opening balance | $ 38,422 | $ 35,533 | $ 38,584 | $ 26,832 |
Additions (net of redemption) | 725 | 857 | 8,610 | 6,816 |
Change in fair value of deferred compensation plan assets | (1,964) | (84) | (10,011) | 2,658 |
Closing balance | $ 37,183 | $ 36,306 | $ 37,183 | $ 36,306 |
Fair Value Measurements - Roll-forward of fair value of deferred compensation liabilities categorized as Level 3 in fair value hierarchy (Detail) - Deferred compensation liabilities - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Opening balance | $ 37,833 | $ 35,034 | $ 38,007 | $ 26,390 |
Additions (net of redemption) | 727 | 840 | 8,611 | 6,799 |
Change in fair value of deferred compensation plan liabilities | (1,977) | (159) | (10,035) | 2,526 |
Closing balance | $ 36,583 | $ 35,715 | $ 36,583 | $ 35,715 |
Derivative Financial Instruments - Narrative (Detail) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Mar. 31, 2021 |
|
Interest rate swaps | Maximum | ||
Derivative [Line Items] | ||
Derivatives, maturity period | 51 months | |
Treasury rate lock | ||
Derivative [Line Items] | ||
Treasury lock on fair value edges, amount | $ 350,000 | |
Derivative instrument, gain amortized | $ 571 | |
Forward foreign exchange contracts | Maximum | ||
Derivative [Line Items] | ||
Derivatives, maturity period | 51 months |
Prepaid expenses and other current assets - Schedule of prepaid expenses and other current assets (Detail) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Advance income and non-income taxes | $ 110,908 | $ 28,075 |
Contract asset (Note 20) | 14,506 | 8,506 |
Prepaid expenses | 44,341 | 38,528 |
Derivative instruments | 30,090 | 19,194 |
Employee advances | 3,199 | 2,797 |
Deposits | 4,970 | 5,839 |
Advances to suppliers | 797 | 804 |
Others | 21,014 | 30,698 |
Prepaid expenses and other current assets, net | $ 229,825 | $ 134,441 |
Prepaid expenses and other current assets -Narrative (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Prepaid expense and other current assets | $ 1,200 |
Assets and liabilities held for sale (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract] | ||
Accounts receivable | $ 4,653 | |
Intangible assets, net | 6,370 | |
Assets of business held for sale | 15,621 | $ 0 |
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract] | ||
Prepaid expense and other current assets | 1,200 | |
Property, plant and equipment, net | 18 | |
Contract cost assets | 1,417 | |
Other assets | 1,963 | |
Accounts payable | 410 | |
Accrued expenses and other current liabilities | 7,141 | |
Other liabilities | 859 | |
Liabilities of business held for sale | $ 8,410 | $ 0 |
Property, Plant and Equipment, Net - Schedule of gross and net amount of property, plant and equipment (Detail) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, gross | $ 754,762 | $ 818,452 |
Less: Accumulated depreciation and amortization | (574,383) | (603,363) |
Property, plant and equipment, net | $ 180,379 | $ 215,089 |
Property, Plant and Equipment, Net - Narrative (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | $ 68,169 | $ 82,344 | |||
Property, plant and equipment, gross | $ 754,762 | 754,762 | $ 818,452 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 368 | 368 | |||
Property, plant, and equipment, owned, accumulated depreciation | 350 | 350 | |||
Depreciation on PPE | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | 13,442 | $ 14,131 | 42,102 | 46,305 | |
Computer software | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | $ 1,192 | $ 1,461 | $ 3,874 | $ 4,469 |
Goodwill and Intangible Assets - Schedule of changes in goodwill (Detail) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Goodwill [Roll Forward] | ||
Opening balance | $ 1,731,027 | $ 1,695,688 |
Goodwill relating to acquisitions consummated during the period | 0 | 44,216 |
Impact of measurement period adjustments | 1,817 | 1,205 |
Reclassified as held for sale | (1,625) | 0 |
Effect of exchange rate fluctuations | (50,287) | (10,082) |
Closing balance | $ 1,680,932 | $ 1,731,027 |
Goodwill and Intangible Assets - Schedule of intangible assets (Detail) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 695,082 | $ 760,616 |
Accumulated amortization & Impairment | 593,856 | 590,981 |
Net | 101,226 | 169,635 |
Customer-related intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 471,875 | 489,974 |
Accumulated amortization & Impairment | 402,357 | 394,688 |
Net | 69,518 | 95,286 |
Marketing-related intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 97,710 | 98,870 |
Accumulated amortization & Impairment | 81,215 | 76,663 |
Net | 16,495 | 22,207 |
Technology-related intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 125,497 | 171,772 |
Accumulated amortization & Impairment | 110,284 | 119,630 |
Net | $ 15,213 | $ 52,142 |
Goodwill and Intangible Assets - Schedule of impairment charge recorded for various categories of assets (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 1,625 | $ 0 | $ 1,625 | $ 0 |
Total intangibles and goodwill | 21,426 | 0 | 21,426 | 205 |
Impairment charge on intangible assets and goodwill held-for-sale | 21,426 | 0 | 21,426 | 0 |
Total impairment and write-down | 21,426 | 0 | 22,803 | 915 |
Property, plant and equipment | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Impairment charge on intangible assets and goodwill held-for-sale | 0 | 0 | 1,377 | 710 |
Technology-related intangible assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets, finite-lived | 19,116 | 0 | 19,116 | 205 |
Customer-related intangible assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets, finite-lived | $ 685 | $ 0 | $ 685 | $ 0 |
Short-Term Borrowings - Narrative (Detail) - USD ($) |
1 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Aug. 31, 2018 |
Sep. 30, 2022 |
Dec. 31, 2021 |
Aug. 09, 2018 |
|
Line of Credit Facility [Line Items] | ||||
Fund-based and non-fund-based credit facilities limits available | $ 22,869,000 | $ 24,727,000 | ||
Utilization of credit facility for non fund-based usage | $ 5,025,000 | $ 5,848,000 | ||
Margin over LIBOR (in percentage) | 1.375% | 1.375% | 1.375% | |
Commitment fee (in percentage) | 0.20% | 0.20% | ||
Credit facility, amount utilized | $ 202,658,000 | $ 2,017,000 | ||
Short-term borrowings | $ 200,000,000 | $ 0 | ||
Revolving credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 500,000,000 | |||
Fund-based credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Margin over LIBOR (in percentage) | 1.375% | 1.375% | ||
Non fund-based credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Credit facility, amount utilized | $ 2,658,000 | $ 2,017,000 |
Long-Term Debt - Schedule of maturity profile of term loan outstanding net of debt amortization expense (Detail) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Total | $ 1,281,755 | $ 1,655,909 |
Term loan credit facility | ||
Debt Instrument [Line Items] | ||
2022 | 8,393 | |
2023 | 526,749 | |
Total | $ 535,142 | $ 560,313 |
Accrued Expenses and Other Current Liabilities - Schedule of accrued expenses and other current liabilities (Detail) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 129,877 | $ 162,054 |
Accrued employee cost | 230,013 | 307,777 |
Earn-out consideration | 2,517 | 2,501 |
Statutory liabilities | 69,857 | 67,948 |
Retirement benefits | 1,657 | 1,746 |
Compensated absences | 24,505 | 26,596 |
Derivative instruments | 49,121 | 12,498 |
Contract liabilities (Note 20) | 144,441 | 160,602 |
Finance leases liability | 13,321 | 18,549 |
Other liabilities | 35,175 | 31,169 |
Accrued expenses and other current liabilities, net | $ 700,484 | $ 791,440 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities, net | Accrued expenses and other current liabilities, net |
Accrued expenses and other current liabilities - Narrative (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Accrued expenses and other current liabilities | $ 7,141 |
Other Liabilities - Schedule of other liabilities (Detail) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Accrued employee cost | $ 20,647 | $ 15,790 |
Earn-out consideration | 0 | 2,905 |
Retirement benefits | 11,987 | 11,993 |
Compensated absences | 46,293 | 52,023 |
Derivative instruments | 10,078 | 2,756 |
Contract liabilities (Note 20) | 63,868 | 80,222 |
Finance leases liability | 11,897 | 16,297 |
Others | 70,643 | 63,224 |
Other Liabilities | $ 235,413 | $ 245,210 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities | Other Liabilities |
Other liabilities -Narrative (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Other liabilities | $ 859 |
Employee Benefit Plans - Schedule of net defined benefit plan costs (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Retirement Benefits [Abstract] | ||||
Service costs | $ 3,505 | $ 3,454 | $ 10,804 | $ 10,528 |
Interest costs | 1,424 | 1,363 | 4,394 | 4,135 |
Amortization of actuarial loss | 178 | 558 | 550 | 1,704 |
Expected return on plan assets | (1,457) | (1,534) | (4,502) | (4,605) |
Net defined benefit plan costs | $ 3,650 | $ 3,841 | $ 11,246 | $ 11,762 |
Stock-Based Compensation - Schedule of significant assumptions used in determining fair value of options granted (Detail) |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.96% | |
Expected life (in months) | 84 months | 84 months |
Risk-free rate of interest | 1.71% | |
Volatility | 26.29% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.84% | |
Risk-free rate of interest | 1.12% | |
Volatility | 26.05% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 1.08% | |
Risk-free rate of interest | 1.37% | |
Volatility | 26.18% |
Stock-Based Compensation - Schedule of restricted share units activity (Detail) - Restricted share units (RSUs) - $ / shares |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Number of Restricted Share Units | |
Outstanding number of shares (Units), beginning balance | 759,507 |
Granted (in shares) | 206,280 |
Vested (in shares) | (28,866) |
Forfeited (in shares) | (54,200) |
Outstanding number of shares (Units), ending balance | 882,721 |
Expected to vest, number of shares (Units) | 803,557 |
Weighted Average Grant Date Fair Value | |
Outstanding weighted average grant date fair value, beginning balance (in usd per share) | $ 42.29 |
Granted, weighted average grant date fair value (in usd per share) | 45.66 |
Vested, weighted average grant date fair value (in usd per share) | 47.63 |
Forfeited, weighted average grant date fair value (in usd per share) | 42.49 |
Outstanding weighted average grant date fair value, ending balance (in usd per share) | $ 42.89 |
Net settlement on vesting of restricted share units (Note 16) (in shares) | 19,992 |
Capital Stock (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 23, 2022 |
Jun. 24, 2022 |
Mar. 23, 2022 |
Feb. 10, 2022 |
Sep. 24, 2021 |
Jun. 23, 2021 |
Mar. 19, 2021 |
Feb. 09, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Class of Stock [Line Items] | |||||||||||||
Stock repurchase authorized amount | $ 1,750,000 | $ 1,750,000 | |||||||||||
Shares repurchased and retired (in shares) | 4,067,044 | 3,592,409 | |||||||||||
Common stock shares repurchased price per share (in usd per share) | $ 44.75 | $ 40.96 | |||||||||||
Expenses related to stock purchases | $ 81 | $ 72 | |||||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 156,899 | $ 156,899 | |||||||||||
Increase in quarterly cash dividend (in percentage) | 16.00% | 10.00% | |||||||||||
Quarterly dividend declared (in usd per share) | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.1075 | $ 0.1250 | $ 0.1075 | $ 0.3750 | $ 0.3225 | $ 0.0975 | |||
Annual dividend | $ 0.50 | $ 0.43 | $ 0.39 | ||||||||||
Dividends paid (USD per share) | $ 0.1075 | ||||||||||||
Initial dividend paid | $ 22,873 | $ 22,935 | $ 23,134 | $ 20,213 | $ 20,133 | $ 20,115 | |||||||
Share Repurchase Open Market | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Aggregate amount of common stock shares repurchased | $ 182,012 | $ 147,152 |
Earnings Per Share (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||
Number of stock awards outstanding but not included in the computation of diluted earnings per common share | 2,667,958 | 1,556,671 | 2,757,114 | 1,698,735 |
Earnings Per Share - Schedule of Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Earnings Per Share (Abstract) | ||||
Net income | $ 95,843 | $ 102,386 | $ 263,692 | $ 296,363 |
Weighted average number of common shares used in computing basic earnings per common share (in shares) | 183,312,013 | 187,856,026 | 184,456,047 | 187,945,234 |
Dilutive effect of stock-based awards (in shares) | 4,087,191 | 5,303,903 | 3,818,373 | 4,940,018 |
Weighted average number of common shares used in computing diluted earnings per common share ( in shares) | 187,399,204 | 193,159,929 | 188,274,420 | 192,885,252 |
Earnings per common share, Basic (in usd per share) | $ 0.52 | $ 0.55 | $ 1.43 | $ 1.58 |
Earnings per common share, Diluted (in usd per sahre) | $ 0.51 | $ 0.53 | $ 1.40 | $ 1.54 |
Net Revenues - Schedule of net revenues disaggregated by customer (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 1,111,037 | $ 1,015,737 | $ 3,268,627 | $ 2,949,934 |
Data-Tech-AI | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 509,730 | 428,808 | 1,465,019 | 1,208,512 |
Digital operations | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 601,307 | $ 586,929 | $ 1,803,608 | $ 1,741,422 |
Net Revenues - Narrative (Detail) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022
USD ($)
numberOfOperatingSegment
|
Sep. 30, 2021
USD ($)
|
|
Disaggregation of Revenue [Line Items] | ||||
Number of reportable segments | numberOfOperatingSegment | 3 | |||
Billing cycle period | 30 days | |||
Contract assets held for sale | $ 2,270 | $ 2,270 | ||
Contract liabilities held for sale | 2,038 | 2,038 | ||
Revenue recognized | $ 63,762 | $ 60,756 | $ 129,046 | $ 128,628 |
Net Revenues - Schedule of details of contract balances (Detail) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Revenues [Abstract] | ||
Contract assets | $ 18,646 | $ 13,741 |
Deferred transition revenue | 136,845 | 155,077 |
Advance from customers | $ 71,464 | $ 85,747 |
Net Revenues - Schedule of contract cost assets (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Opening balance | $ 238,794 | |||
Closing balance | $ 218,137 | 218,137 | ||
Sales incentive programs | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Opening balance | 29,186 | $ 31,559 | 32,296 | $ 33,390 |
Closing balance | 28,718 | 31,058 | 28,718 | 31,058 |
Amortization | 6,632 | 5,041 | 19,220 | 14,576 |
Transition activities | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Opening balance | 198,401 | 210,747 | 206,498 | 192,507 |
Closing balance | 189,419 | 209,320 | 189,419 | 209,320 |
Amortization | $ 23,767 | $ 23,028 | $ 66,180 | $ 58,644 |
Other operating (income) expense, net - Schedule of other operating (income) expense, net (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Other Income and Expenses [Abstract] | ||||
Write-down of intangible assets and property, plant and equipment | $ 0 | $ 0 | $ 1,377 | $ 915 |
Write-down of operating right-of-use assets and other assets | 0 | 0 | 20,307 | 0 |
Impairment charge on intangible assets and goodwill held-for-sale | 21,426 | 0 | 21,426 | 0 |
Other operating income | (489) | (93) | (953) | (1,132) |
Other operating (income) expense, net | $ 20,937 | $ (93) | $ 42,157 | $ (217) |
Interest Income (Expense), Net - Schedule of interest income (expense), net (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Banking and Thrift, Interest [Abstract] | ||||
Interest income | $ 1,440 | $ 2,068 | $ 4,042 | $ 4,544 |
Interest expense | (14,839) | (14,833) | (40,733) | (42,742) |
Interest income (expense), net | $ (13,399) | $ (12,765) | $ (36,691) | $ (38,198) |
Income taxes - Schedule of activities related to unrecognized tax benefits for uncertain tax positions (Detail) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Opening balance at January 1 | $ 25,651 |
Increase related to prior year tax positions, including recorded in acquisition accounting | 16 |
Decrease related to prior year tax positions | 1,678 |
Decrease related to prior year tax positions due to lapse of applicable statute of limitation | (84) |
Effect of exchange rate changes | (1,232) |
Closing balance at September 30 | $ 22,673 |
Income taxes - Narrative (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (in percentage) | 20.80% | 17.30% | ||
Unrecognized tax benefits that would impact effective tax rate | $ 22,673 | $ 22,673 | $ 25,651 | |
Unrecognized tax benefits, interest on income taxes accrued | 2,904 | 2,904 | 2,842 | |
Accrued penalties | $ 528 | 528 | 628 | |
Unrecognized tax benefits, excluding exchange rate differences for interest recognized | $ (664) | $ (13,851) |
Commitments and Contingencies (Detail) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
Dec. 31, 2016 |
Jun. 30, 2020 |
|
Commitments And Contingencies [Line Items] | ||||
Bank guarantees and letters of credits, outstanding | $ 7,683 | $ 7,865 | ||
Income tax examination, assessed tax, affiliate | $ 209,042 | |||
Income Tax Examination, Increase (Decrease) in Liability from Prior Year | 100,589 | |||
Affiliated entity | ||||
Commitments And Contingencies [Line Items] | ||||
Refunds challenged by taxing authority, amount | $ 28,535 | |||
Capital addition purchase commitments | ||||
Commitments And Contingencies [Line Items] | ||||
Commitments and contingencies | $ 22,403 | $ 13,317 |
Restructuring (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2022 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | $ 21,426 | $ 38,815 |
Severance charge | 17,131 | |
Property, plant and equipment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | 1,377 | |
Non-cash Charge | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | 21,684 | |
Office Premises and Employee Severance Charge | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | $ 38,815 |
Subsequent events (Detail) - $ / shares |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 13, 2022 |
Sep. 23, 2022 |
Jun. 24, 2022 |
Mar. 23, 2022 |
Feb. 10, 2022 |
Feb. 09, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Subsequent Event [Line Items] | |||||||||||
Dividends per common share (in usd per share) | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.1075 | $ 0.1250 | $ 0.1075 | $ 0.3750 | $ 0.3225 | $ 0.0975 | |
Subsequent Event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Dividends per common share (in usd per share) | $ 0.125 |
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