What changed in this filing

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Item 1A. Risk Factors

2022-02-24 compared with 2021-02-25 · 179 added, 246 removed, 366 unchanged (54% of the section changed)

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Risks Related to Our Business

• We have been adversely affected, and could in the future be materially adversely affected, by the coronavirus pandemic.

• We have been adversely affected, and could in the future be materially adversely affected, by COVID-19.

• We earn a substantial portion of our revenues from a limited number of clients.

• Our client contracts contain certain termination and other provisions that could have an adverse effect on us.

• We often have a long selling and implementation cycle for our digital operations and solutions that requires significant funds, management bandwidth and resource commitments, and, once engaged, it may take several months before we start to recognize significant revenues.

• Our failure to accurately estimate the resources and time required for our contracts may negatively affect us.

• Our profitability will suffer if we are not able to price our services appropriately or manage our asset utilization levels or meet the changing demands and needs of our clients and potential clients.

• Loss of one or more members of our senior management team could harm our business.

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• Employee wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.

• We often have a long selling and implementation cycle for our operations management services that requires significant funds, management bandwidth and resource commitments.

• Our failure to accurately estimate the resources and time required for our contracts may negatively affect us.

• We may engage in strategic acquisitions or transactions, which could have a material adverse effect on us.

Risks Related to the International Nature of Our Business

• If more stringent labor laws become applicable to us or if our employees unionize, our profitability may be adversely affected

• Our global operations subject us to significant labor and employment risks.

• A substantial portion of our assets and operations are located in India, and we are subject to regulatory, economic and political uncertainties in India.

• We are subject to labor and employment laws across jurisdictions and if more stringent labor laws become applicable to us or if our employees unionize, our profitability may be adversely affected.

Risks Related to Our Indebtedness

• We may not be able to service our debt or obtain additional financing on competitive terms.

• We may not have the ability to use cash to settle the principal amount of the Notes upon conversion or to repurchase the Notes upon a fundamental change, which could result in dilution and could adversely affect us.

Risks Related to Our Common Stock

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• Our industry may not develop in ways that we currently anticipate due to negative public reaction in the United States and elsewhere to offshore outsourcing, recently proposed legislation or otherwise.

• Unauthorized disclosure of sensitive or confidential client and customer data, whether through breach of our computer systems or otherwise, could expose us to protracted and costly litigation and cause us to lose clients.

• Unauthorized disclosure of sensitive or confidential client and employee data, whether through breach of our computer systems or otherwise, could cause us significant reputational damage, expose us to protracted and costly litigation, and cause us to lose clients.

A) Material Risk Factors

Risks Related to Our Business

Our business, results of operations and financial condition have been adversely affected, and could in the future be materially adversely affected, by the coronavirus pandemic.

In March 2020, the World Health Organization declared the outbreak of a disease caused by a novel strain of the coronavirus (COVID-19) to be a global pandemic.

This global pandemic is having widespread, rapidly-evolving and unpredictable impacts on global societies, economies, financial markets and business practices.

COVID-19 has affected us, our customers, employees, contractors, suppliers and business partners, all of whom have been prevented from conducting business activities as usual, including due to the many and varying health and safety measures in response to COVID-19, including travel restrictions, quarantines, curfews, shelter in place and safer-at-home orders, and business shutdowns, as well as multi-step reopening policies.

The continued spread of COVID-19 and the measures taken by governmental authorities disrupted the continuity of our provision of services to our customers and adversely impacted our business, results of operations and financial condition (see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K).

COVID-19 and the actions taken by governments, businesses and individuals in response to the pandemic have resulted in, and are expected to continue to result in, a substantial curtailment of business activities, weakened economic conditions, significant economic uncertainty and volatility in the financial markets, both in the United States and abroad.

Our business, results of operations and financial condition have been adversely affected, and could in the future be materially adversely affected, by COVID-19.

The global outbreak of COVID-19 continues to rapidly evolve and has widespread and unpredictable impacts on global societies, economies, financial markets and business practices.

COVID-19 has adversely affected and may in the future materially adversely affect us, our clients, employees, contractors, suppliers and business partners, all of whom have been prevented from conducting business activities as usual, including due to the many and varying health and safety measures in response to COVID-19, including travel restrictions, quarantines, curfews, shelter in place and safer-at-home orders.

The continued spread of COVID-19 and the measures taken by governmental authorities disrupted the continuity of our provision of services to our clients and adversely impacted our business, results of operations and financial condition (see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K).

The ultimate impact of COVID-19 on our business, operations and financial results remains unknown and will depend on numerous evolving factors that we may not be able to accurately predict, including:

the duration, scope and severity of the pandemic;

governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic;

the impact of the pandemic on economic activity and actions taken in response;

the effect on our clients and client demand for our services and our solutions;

our ability to sell and provide our services and solutions, including as a result of travel restrictions and people working from home;

the ability of our clients to pay for our services and solutions;

any closures of our and our clients' offices and facilities, and any additional preventative or protective actions that we, our clients, and governments may implement that may result in a period of continued business interruption.

The global macroeconomic effects of the pandemic may have long-lasting effects, even after the pandemic has subsided.

In the United States, India, the Philippines, Europe and South Africa, we have large concentrations of employees performing critical operations, which are in varying stages of restrictions and re-opening to address COVID-19.

Certain jurisdictions have begun re-opening but have returned to restrictions in the face of increases in new COVID-19 cases.

There is considerable uncertainty regarding how current and future health and safety measures implemented in response to the pandemic will impact our business, including whether they will result in further changes in demand from our clients for our services and solutions and increases in operating costs.

An extended period of mass remote work by our employees may reduce our employees’ efficiency and productivity, which may cause delays in service delivery, disrupt employee relations, hamper innovation and may have other unforeseen adverse effects on our business.

For those employees who are permitted to come onsite, while we have implemented personal safety measures at all such locations, any actions we take with respect to our workforce may not be sufficient to mitigate the risk of infection by COVID-19 and further disruption to our business.

In addition, the effects of COVID-19 could affect our business in many ways, including, but not limited to, the following

• the impact of the pandemic on the economies and financial markets of the countries and regions in which we operate, including a potential global recession, a decline in customer confidence and spending;

• our inability to obtain rent deferrals, early exit or other relief from many of our landlords with respect to our leased corporate offices that were or still remain closed, which could result in litigation or other disruptions;

• COVID-19 and remote-work oriented phishing and similar cybersecurity attack attempts;

• remote work solutions may be limited in their ability to replicate the operational oversight and security controls of our office environments and we may suffer operational and information security failures as a result of the changed controls;

• we may be required to revise certain accounting estimates and judgments such as, but not limited to, those related to the valuation of long-lived assets, goodwill and intangibles, and deferred tax assets, which could have a material adverse effect on our financial position and results of operations;

• governmental actions in the geographies in which we operate may prevent us from adjusting the size of our workforce or modifying compensation terms;

• COVID-19 may also have a material adverse effect on our liquidity and cash flows.

If our business does not generate sufficient cash flows from operating activities, and sufficient funds are not otherwise available to us from borrowings under our credit facility or other sources, we may not be able to cover our expenses, fund our other liquidity and working capital needs, or execute on our strategic initiatives, each of which could significantly harm our business.

Management expects that all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the full impact of COVID-19 on our business in 2021 and beyond and the duration for which it may have an impact cannot be determined at this time.

and our ability to sell and provide our services and solutions, including as a result of travel restrictions and people working remotely.

COVID-19 has also led to, and may continue to lead to, increased costs, as we incur additional costs in order to ensure the continuity of our operations and support our remote work model.

We also expect that we will continue to incur additional costs to monitor and improve operational efficiency of our remote work model, implement new information technology solutions and security measures to safeguard against information security risks and protect the health and safety of our employees as they gradually return to the office.

All of our business segments, across all of our geographies, have been adversely affected and may in the future be materially adversely affected by COVID-19, but the significance of the full impact of COVID-19 on our business in 2022 and beyond and the duration for which it may have an impact cannot be determined at this time.

Any of these events could cause or contribute to risks and uncertainties enumerated in this Annual Report on Form 10-K or our other filings with the SEC, and could materially adversely affect our business, financial condition, results of operations and/or stock price.

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Failure to meet these requirements or accurately estimate the productivity benefits could result in the payment of significant penalties to our clients which in turn could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Some of our contracts with clients specify that if a change of control of our company occurs during the term of the contract, the client has the right to terminate the contract.

Some of our contracts with clients specify that if a

change of control of our company occurs during the term of the contract, the client has the right to terminate the contract.

These provisions may result in our contracts being terminated if there is such a change in control, resulting in a potential loss of revenues.

In addition, these provisions may act as a deterrent to any attempt by a third party to acquire our company.

Our project-based analytics and consulting services are cyclical and can be significantly affected by variations in business cycles.

Changes in the deadlines or the scope of work required for compliance with the requirements of legislation applicable to our clients could curtail significantly those service offerings.

The terms of the contracts for our project-based analytics and consulting services generally do not exceed one year and may not produce ongoing or recurring business for us once the project is completed.

These contracts also usually contain provisions permitting termination of the contract after a short notice period.

The short-term nature and specificity of these projects could lead to material fluctuations and uncertainties in the revenues generated from providing analytics and consulting services.

We often have a long selling cycle for our digital operations and solutions that requires significant funds and management resources and a long implementation cycle that requires significant resource commitments, and, once engaged, it may take several months before we start to recognize significant revenues.

We often have a long selling cycle for our digital operations and solutions, which requires significant investment of capital, resources and time by both our clients and us.

Before committing to use our services, potential clients require us to expend substantial time and resources educating them as to the value of our services, including testing our services for a limited period of time, and assessing the feasibility of integrating our systems and processes with theirs.

Our clients then evaluate our services before deciding whether to use them.

Therefore, our selling cycle, which generally ranges from six to eighteen months, is subject to many risks and delays over which we have little or no control, including our clients’ decision to choose alternatives to our services (such as other providers or in-house offshore resources) and the timing of our clients’ budget cycles and approval processes.

In addition, we may not be able to successfully conclude a contract after the selling cycle is complete.

Implementing our services involves a significant commitment of resources over an extended period of time from both our clients and us.

Our clients may also experience delays in obtaining internal approvals or delays associated with technology or system implementations, thereby delaying further the implementation process.

Our clients and future clients may not be willing or able to invest the time and resources necessary to implement our services, and we may fail to close sales with potential clients to which we have devoted significant time and resources.

Once engaged, it takes from four to six weeks to integrate the client’s systems with ours, and from three months to six months thereafter to build our services to the client’s requirements and perform any necessary transformation initiatives.

Depending on the complexity of the processes being implemented, these time periods may be significantly longer.

Implementing processes can be subject to potential delays similar to certain of those affecting the selling cycle.

We do not recognize significant revenues until after we have completed the implementation phase, including any delay.

We generally enter into long-term contracts with our clients for our digital operations and solutions, and our failure to accurately estimate the resources and time required for our contracts may negatively affect our revenues, cash flows and profitability.

The initial terms of our digital operations and solutions contracts typically range from three to five years.

In many of our digital operations and solutions contracts we commit to long-term and other pricing structures (such as full-time equivalent-based pricing, fixed-price arrangements, transaction-based and outcome-based pricing) with our clients and therefore bear the risk of cost overruns, completion delays, resource requirements, wage inflation and adverse movements in exchange rates in connection with these contracts.

If we fail to estimate accurately the resources and time required for a contract, potential productivity benefits over time, future wage inflation rates or currency exchange rates (or fail to accurately hedge our currency exchange rate exposure) or if we fail to complete our contractual obligations within the contracted timeframe, our revenues, cash flows and profitability may be negatively affected.

We may face difficulties in delivering complex and large projects for our clients that could cause clients to discontinue their work with us, which in turn could harm our business.

We have been expanding the nature and scope of our engagements.

Our ability to effectively offer a wider breadth of end-to-end business services depends on our ability to attract existing or new clients to these expanded service offerings.

To obtain engagements for such complex and large projects, we also are more likely to compete with large, well-established international consulting firms, resulting in increased competition and marketing costs.

Accordingly, we cannot be certain that our new service offerings will effectively meet client needs or that we will be able to attract existing and new clients to these expanded service offerings.

The increased breadth of our service offerings may result in larger and more complex projects with our

This will require us to establish closer relationships with our clients and a thorough understanding of their operations.

Our ability to establish such relationships will depend on a number of factors, including the proficiency of our employees and management.

Our failure to deliver services that meet the requirements specified by our clients could result in termination of client contracts, and we could be liable to our clients for significant penalties or damages.

Larger projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel or delay additional planned engagements.

These terminations, cancellations or delays may result from factors that have little or nothing to do with the quality of our services, such as the business or financial condition of our clients or the economy generally.

Such cancellations or delays make it difficult to plan for project resource requirements and inaccuracies in such resource planning and allocation may have a negative impact on our profitability and cash flows.

If we are unable to adjust our pricing terms or effectively manage our asset utilization levels or the mix of products and services we provide to meet the changing demands of our clients and potential clients, our business, results of operations, financial condition and cash flows may be adversely affected.

Our profitability is, in part, a function of the efficiency with which we utilize our assets, in particular our people and our operations centers, and the prices we are able to charge for our services.

A significant portion of our contracts use a pricing model that provides for hourly or annual billing rates.

Industry pricing models are evolving and clients increasingly request transaction-based, outcome-based or other pricing models.

If we make inaccurate assumptions for contracts with such alternative pricing models, our profitability may be negatively affected.

Our asset utilization levels are affected by a number of factors, including our ability to transition employees from completed projects to new assignments, attract, train and retain employees, forecast demand for our services (including potential client terminations or reductions in required resources) and maintain an appropriate headcount in each of our locations, as well as our need to dedicate resources to employee training and development, other typically non-chargeable activities and seat utilization rate of our operations centers.

Therefore, if we are unable to adapt our operations to evolving pricing protocols or effectively manage our asset utilization levels, our results of operations may be adversely affected or we may not be able to offer pricing that is attractive relative to our competitors.

In addition, for the services we provide to our clients, the revenues and income from such services may decline or vary as the type and volume of services we provide under those contracts changes over time, including as a result of a shift in the mix of products and services we provide.

Furthermore, our clients, some of which have experienced significant and adverse changes in their prospects, substantial price competition and pressures on their profitability, including as a result of COVID-19, have in the past and may in the future demand price reductions, automate some or all of their processes or change their digital operations and solutions strategy by moving more work in-house or to other providers, any of which could reduce our profitability.

Any significant reduction in or elimination of any of our clients’ use of the services we provide, or any requirement to lower our prices, would have a material adverse impact on our business.

Our senior management team is critical to our continued success and the loss of one or more members of our senior management team could harm our business.

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We may fail to attract and retain enough sufficiently trained employees to support our operations, as competition for highly skilled personnel is intense and we experience significant employee turnover rates, which may result in loss of revenue and an inability to expand our business.

Our success depends to a significant extent on our ability to attract, hire, train and retain qualified employees, including our ability to attract employees with needed skills in the geographic areas in which we operate.

Our industry, including us, experiences high employee turnover.

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Increased competition for these professionals could have an adverse effect on us.

A significant increase in the turnover rate among our employees, particularly among our higher skilled workforce, would increase our recruiting and training costs and decrease our operating efficiency, productivity and profit margins, and could lead to a decline in demand for our services.

A significant increase in the turnover rate among our employees, particularly among our highly skilled workforce, would increase our cost of revenues and eventually impact our profit margins due to higher recruitment, training and retention costs and maintaining larger hiring,

training and human resources departments.

These additional costs could decrease our operating efficiency, impact our productivity and profit margins, and could also lead to a decline in demand for our services due to such higher cost getting baked in our pricing of services, making us less competitive.

High turnover rates generally do not impact our revenues as we factor the attrition rate into our pricing models by maintaining additional employees for each process.

However, high turnover rates do increase our cost of revenues and therefore impact our profit margins due to higher recruitment, training and retention costs.

High employee turnover increases training, recruitment and retention costs because we must maintain larger hiring, training and human resources departments and it also increases our operating costs due to having to reallocate certain business processes among our operations centers where we have access to the skilled workforce needed for our business.

These additional costs could have a material adverse effect on our results of operations and cash flows.

If we are unable to attract and retain highly-skilled technical personnel, our ability to effectively lead our current projects and develop new business could be jeopardized, and our business, results of operations and financial condition could be adversely affected.

If we are unable to attract and retain highly-skilled technical personnel and do not invest in reskilling and upskilling our employees, specifically in areas like AI, ML, digital transformation and solutions, advanced analytics, cloud based solutions, bots, hyper-automation, data management professionals, robotics and process automation, and data engineering, our ability to effectively lead our current projects and develop new business could be jeopardized, and our business, results of operations and financial condition could be adversely affected.

Employee wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.

Our most significant costs are the salaries and related benefits of our operations staff and other employees.

For example, wage costs in India and the Philippines have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals, and having a significant number of employees in those countries has been one of our competitive advantages.

However, because of rapid economic growth in India, increased demand for outsourcing services from India and increased competition for skilled employees in India, wages for comparably skilled employees in India are increasing at a faster rate than in the United States and Europe, which may reduce this competitive advantage.

For example, wage costs in India and the Philippines have historically been significantly lower than wage costs in the United States and Europe for comparable skilled professionals, and having a significant number of employees in those countries has been one of our competitive advantages.

However, because of rapid economic growth in India and the Philippines, increased demand for outsourced services from such countries and increased competition for skilled employees, wages for comparably skilled employees are increasing at a faster rate than in the United States and Europe.

This may reduce the competitive advantage.

We may need to increase the levels of employee compensation more rapidly than in the past to remain competitive in attracting and retaining the quality and number of employees that our business requires.

Wages are generally higher for employees performing analytics services than for employees performing operations management services.

Wages are generally higher for employees performing analytics services than for employees performing digital operations and solutions.

As the scale of our analytics services increases, wages as a percentage of revenues may increase.

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We will attempt to control such costs by our efforts to add capacity in locations where we consider wage levels of skilled personnel to be satisfactory, but we may not be successful in doing so.

We often have a long selling cycle for our operations management services that requires significant funds and management resources and a long implementation cycle that requires significant resource commitments.

We often have a long selling cycle for our operations management services, which requires significant investment of capital, resources and time by both our clients and us.

Our clients then evaluate our services before deciding whether to use them.

In addition, we may not be able to successfully conclude a contract after the selling cycle is complete.

Implementing our services involves a significant commitment of resources over an extended period of time from both our clients and us.

Our clients may also experience delays in obtaining internal approvals or delays associated with technology or system implementations, thereby delaying further the implementation process.

These factors could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Once we are engaged by a client, it may take us several months before we start to recognize significant revenues.

When we are engaged by a client after the selling process for our operations management services, it takes from four to six weeks to integrate the client’s systems with ours, and from three months to six months thereafter to build our services to the client’s requirements and perform any necessary transformation initiatives.

Depending on the complexity of the processes being implemented, these time periods may be significantly longer.

Implementing processes can be subject to potential delays similar to certain of those affecting the selling cycle.

Therefore, we do not recognize significant revenues until after we have completed the implementation phase.

We generally enter into long-term contracts with our clients for our operations management services, and our failure to accurately estimate the resources and time required for our contracts may negatively affect our revenues, cash flows and profitability.

The initial terms of our operations management contracts typically range from three to five years.

In many of our operations management contracts we commit to long-term and other pricing structures (such as full-time equivalent-based pricing, fixed-price arrangements, transaction-based and outcome-based pricing) with our clients and therefore bear the risk of cost overruns, completion delays, resource requirements, wage inflation and adverse movements in exchange rates in connection with these contracts.

Our profitability is largely a function of the efficiency with which we utilize our assets, in particular our people and our operations centers, and the prices we are able to charge for our services.

A significant portion of our contracts use a pricing model that provides for hourly or annual billing rates.

Industry pricing models are evolving and clients increasingly request transaction-based, outcome-based or other pricing models.

If we make inaccurate assumptions for contracts with such alternative pricing models, our profitability may be negatively affected.

Furthermore, our clients, some of which have experienced significant and adverse changes in their prospects, substantial price competition and pressures on their profitability, including as a result of COVID-19, have in the past and may in the future demand price reductions, automate some or all of their processes or change their operations management strategy by moving more work in-house or to other providers, any of which could reduce our profitability.

Any significant reduction in or elimination of any of our clients’ use of the services we provide, or any requirement to lower our prices, would have a material adverse impact on our business.

Our projects-based analytics and consulting services are cyclical involving short-term contracts.

Our projects-based analytics and consulting services are cyclical and can be significantly affected by variations in business cycles.

Changes in the deadlines or the scope of work required for compliance with the requirements of legislation applicable to our clients could curtail significantly those service offerings.

In addition, our projects-based analytics and consulting services consists of contracts with terms generally not exceeding one year and may not produce ongoing or recurring business for us once the project is completed.

These contracts also usually contain provisions permitting termination of the contract after a short notice period.

The short-term nature and specificity of these projects could lead to material fluctuations and uncertainties in the revenues generated from providing analytics and consulting services.

Our inability to manage our rapid infrastructure and personnel growth effectively could have a material adverse effect on our business, results of operations, financial condition and cash flows.

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We believe that expanding our geographic base of operations will provide higher value to our clients by decreasing the risks of operating from a single country (including potential shortages of skilled employees, increases in wage costs during strong economic times and currency fluctuations), while also giving our clients access to a wider talent pool and establishing a base in countries that may be competitive in the future.

However, we may not be able to effectively manage our infrastructure and employee expansion, open additional operations centers or hire additional skilled employees as and when they are required to meet the ongoing needs of our clients, and we may not be able to develop and improve our internal systems.

We also need to manage cultural differences amongst our employee populations and varying employment law regimes across jurisdictions, and that may create a risk for employment law claims.

However, we may not be able to effectively manage our infrastructure due to changes to our operating model driven by delivery of a significant portion of our services from a remote work model leading to potential contraction of our operation centers.

Changes in our operating model limit our ability to forecast the need to hire additional skilled employees as and when they are required to meet the ongoing needs of our clients, and we may not be able to develop and improve our internal systems.

We may not be able to maintain our culture and effectively communicate our core values, policies and procedures, strategies and goals, particularly given our world-wide operations, rate of new hires, and significant percentage of our employees who have the option to work remotely or who have been required to work remotely because of the COVID-19 related restrictions.

We also need to manage cultural differences among our employee populations and varying employment law regimes across jurisdictions, and that may create a risk for employment law claims.

In addition, from time to time, we have made, and may continue to make, changes to our operating model, including our infrastructure facilities, how we are organized, as the needs and size of our business change, and if we do not successfully implement the changes or if the key stakeholders such as our employees, clients and regulators are not fully receptive to such changes made or proposed to be made, our business and results of operation may be negatively impacted.

Our inability to execute our growth strategy, to ensure the continued adequacy of our current systems or to manage our expansion effectively could have a material adverse effect on our business, results of operations, financial condition and cash flows.

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Through the acquisitions we pursue, we may seek opportunities to expand the scope of our existing services, add new clients or enter new geographic markets.

There can be no assurance that we will successfully identify suitable candidates in the future for strategic transactions at acceptable prices, have sufficient capital resources to finance potential acquisitions or be able to consummate any desired transactions.

There can be no assurance that we will successfully identify suitable

candidates in the future for strategic transactions at acceptable prices, have sufficient capital resources to finance potential acquisitions or be able to consummate any desired transactions.

Our failure to close transactions with potential acquisition targets for which we have invested significant time and resources could have a material adverse effect on our financial condition and cash flows.

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Goodwill is not amortized but is tested for impairment at least once on an annual basis in the fourth quarter of each year, based on a number of factors including operating results, business plans and future cash flows.

Impairment testing of goodwill may also be performed between annual tests if an event occurs or

circumstances change that would more likely than not reduce the fair value of goodwill below its carrying amount.

Impairment testing of goodwill may also be performed between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of goodwill below its carrying amount.

We perform a quantitative impairment test to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

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Because this involves use of critical accounting estimates, we cannot assure you that future impairment of goodwill will not have a material adverse effect on our business, financial condition or results of operations.

We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to those estimates and assumptions could adversely affect our financial results.

Our financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (U.S.

The application of U.S.

GAAP requires us to make estimates and assumptions about certain items and future events that affect our reported financial condition, and our accompanying disclosure.

Our most critical accounting estimates are described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Policies and Estimates.” We base our estimates on historical experience, contractual commitments and on various other assumptions that we believe to be reasonable under the circumstances and at the time they are made.

These estimates and assumptions involve the use of judgment and are subject to significant uncertainties, some of which are beyond our control.

The extent to which COVID-19 will impact our business depends on numerous dynamic factors, which we still cannot reliably predict.

As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve with respect to COVID-19, our estimates may materially change in future periods.

If our estimates, or the assumptions underlying such estimates, are not correct, actual results may differ materially from our estimates, and we may need to, among other things, adjust revenues or accrue additional charges that could adversely affect our results of operations.

Our operating results may experience significant variability and as a result it may be difficult for us to make accurate financial forecasts.

Our operating results may vary significantly from period to period.

Although our existing agreements with original terms of three or more years provide us with a relatively predictable revenue base for a substantial portion of our business, the long selling cycle for our services and the budget and approval processes of prospective clients make it difficult to predict the timing of entering into definitive agreements with new clients.

The timing of revenue recognition under new client agreements also varies depending on when we complete the implementation phase with new clients.

The completion of implementation varies significantly based upon the complexity of the processes being implemented.

Our period-to-period results have in the past and may also in the future fluctuate due to other factors, including the loss of clients, delays or failure by our clients to provide anticipated business, variations in employee utilization rates resulting from changes in our clients’ operations, delays or difficulties in expanding our operations centers and infrastructure (including hiring new employees or constructing new operations centers), changes to our pricing structure or that of our competitors, currency fluctuations, seasonal changes in the operations of our clients and other events identified in this Annual Report on Form 10-K.

Our revenues are also affected by changes in pricing under our contracts at the time of renewal or by pricing under new contracts.

In addition, most of our contracts do not commit our clients to provide us with a specific volume of business.

Further, as we increase our capabilities utilizing technology service platforms and other software-based services, we expect that revenues from such services will continue to grow in proportion to our total revenues.

Revenues from annual maintenance and support contracts for our software platforms provide us with a relatively predictable revenue base whereas revenues from new license sales and implementation projects have a long selling cycle and it is difficult to predict the timing of when such new contracts will be signed which may lead to fluctuations in our short term revenues.

All of these factors may make it difficult to make accurate financial forecasts or replace anticipated revenues that we do not receive as a result of delays in implementing our services or client losses.

If our actual results do not meet any estimated results that we announce, or if we underperform market expectations as a result of such factors, trading prices for our common stock could be adversely affected.

Our business could be materially and adversely affected if we do not protect our intellectual property or if our services are found to infringe on the intellectual property of others.

Our success depends in part on certain methodologies, practices, tools and technical expertise we utilize in providing our services.

We engage in designing, developing, implementing and maintaining applications and other proprietary materials.

In order to protect our rights in these various materials, we may seek protection under trade secret, patent, copyright and trademark laws.

We also generally enter into confidentiality and nondisclosure agreements with our clients and potential clients, and third party vendors, and seek to limit access to and distribution of our proprietary information.

For our employees and independent contractors, we generally require confidentiality and work-for-hire agreements.

These measures may not prevent misappropriation or infringement of our intellectual property or proprietary information and a resulting loss of competitive

Additionally, we may not be successful in obtaining or maintaining patents or trademarks for which we have applied.

Our success depends in part on certain methodologies, practices, tools and technical expertise we utilize in providing our services and solutions.

Our intellectual property consists of proprietary and licensed platforms, software and databases, trade secrets, methodologies and know-how, trademarks, service marks, copyrighted software, operating procedures and other materials, and patents and pending patent applications.

We consider many of our business processes and implementation methodologies to be trade secrets or proprietary know-how and confidential information.

We seek to protect our intellectual property through a combination patent, trademark, copyright and trade secret laws, confidentiality procedures and contractual provisions.

Clients and business partners typically agree in writing to confidential treatment of our information.

Our employees and independent contractors are required to sign work-for-hire and confidentiality covenants as a condition to their employment and engagement, respectively.

We also have policies requiring our associates to respect the intellectual property rights of others.

However, these measures may not prevent misappropriation or infringement of our intellectual property or proprietary information and a resulting loss of competitive advantage.

Additionally, we may not be successful in obtaining or maintaining patents, trademarks or other intellectual property rights protections for which we have applied or may in the future apply.

We may be unable to protect our intellectual property and proprietary technology effectively, which may allow competitors to duplicate our technology and products and may adversely affect our ability to compete with them.

To the extent that we do not protect our intellectual property effectively through patents or other means, other parties, including former employees, with knowledge of our intellectual property may leave and seek to exploit our intellectual property for their own or others’ advantage.

To the extent that we do not protect our intellectual property effectively through contractual provisions, confidentiality procedures, patents,

trade secret laws or other means including those set forth above, other parties, including former employees, with knowledge of our intellectual property may leave and seek to exploit our intellectual property for their own or others’ advantage.

We may not be able to detect unauthorized use and take appropriate steps to enforce our rights, and any such steps may not be successful.

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Non-practicing entities may also bring baseless, but nonetheless costly to defend, infringement claims.

We could be required to indemnify our clients if they are sued by a third party for intellectual property infringement arising from materials that we have provided to the clients in connection with our services and deliverables.

We may not be successful in defending against such intellectual property claims or in obtaining licenses or an agreement to resolve any intellectual property disputes.

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Any such claim for intellectual property infringement may have a material adverse effect on our business, results of operations, financial condition and cash flows.

We may face difficulties in delivering complex and large projects for our clients that could cause clients to discontinue their work with us, which in turn could harm our business.

We have been expanding the nature and scope of our engagements.

Our ability to effectively offer a wider breadth of end-to-end business services depends on our ability to attract existing or new clients to these expanded service offerings.

Accordingly, we cannot be certain that our new service offerings will effectively meet client needs or that we will be able to attract existing and new clients to these expanded service offerings.

The increased breadth of our service offerings may result in larger and more complex projects with our clients.

This will require us to establish closer relationships with our clients and a thorough understanding of their operations.

Our ability to establish such relationships will depend on a number of factors, including the proficiency of our employees and management.

Larger projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel or delay additional planned engagements.

We face competition from U.S.-based and non-U.S.-based BPM and IT companies and from our clients, who may build shared services centers to perform BPM and Analytics services themselves, either in-house, in the United States or through offshore groups or other arrangements.

The market for outsourcing services is highly competitive, and we expect competition to intensify and increase from a number of sources.

We believe that the principal competitive factors in our markets are breadth and depth of process expertise, knowledge of industries served, service quality, the ability to attract, train and retain qualified people, compliance rigor, global delivery capabilities, price and sales and client management capabilities.

We face competition from U.S.-based and non-U.S.-based BPM and IT companies and from our clients, who may build shared services centers to perform digital operations and solutions and analytics services themselves, either in-house, in the United States or through offshore groups or other arrangements.

The market for digital operations and solutions and analytics services is highly competitive, and we expect competition to intensify and increase from a number of sources.

We believe that the principal competitive factors in our markets are breadth and depth of process expertise, knowledge of industries served, service quality, compliance rigor, global delivery capabilities, price and sales and client management capabilities.

We also face competition from non-U.S.-based outsourcing and IT companies (including those in the United Kingdom and India) and U.S.-based outsourcing and IT companies.

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Some of these existing and future competitors have greater financial, personnel and other resources, a broader range of service offerings, greater technological expertise, more recognizable brand names and more established relationships in industries that we currently serve or may serve in the future.

addition, some of our competitors may enter into strategic relationships or mergers or acquisitions with larger, more established companies in order to increase their ability to address client needs, or enter into similar arrangements with potential clients.

In addition, some of our competitors may enter into strategic relationships or mergers or acquisitions with larger, more established companies in order to increase their ability to address client needs, or enter into similar arrangements with potential clients.

The trend in multi-vendor relationships has been growing, which could reduce our revenues to the extent that we are required to modify the terms of our relationship with clients or that clients obtain services from other vendors.

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We expect competition to intensify in the future as more companies enter our markets.

Increased competition may result in lower prices and volumes, higher costs for resources, especially people, and lower profitability.

Increased competition may result in lower prices and volumes, and lower profitability.

We may not be able to supply clients with services that they deem superior and at competitive prices and we may lose business to our competitors.

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Our clients’ business operations are often subject to regulation and accreditation and licensing standards, and our clients may require that we perform our services in a manner that will enable them to comply with applicable regulations or accreditations or licensing standards.

Our clients are located around the world, and the laws and regulations that apply include,

among others, United States federal laws such as the Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act, the Health Information Technology for Economic and Clinical Health Act, state laws on third party administration services, utilization review services, telemarketing services or state laws on debt collection in the United States and the Financial Services Act in the United Kingdom as well as similar consumer protection laws in other countries in which our clients’ customers are based.

Our clients are located around the world, and the laws and regulations that apply include, among others, United States federal laws such as the Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act, the Health Information Technology for Economic and Clinical Health Act, state laws on third party administration services, utilization review services, telemarketing services or state laws on debt collection in the United States and the Financial Services Act in the United Kingdom as well as similar consumer protection laws in other countries in which our clients’ customers are based.

Failure to perform our services in a manner that complies with any such requirements could result in breaches of contracts with our clients.

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Risks Related to the International Nature of Our Business

If more stringent labor laws become applicable to us or if our employees unionize, our profitability may be adversely affected.

Some of the geographies where we operate have stringent employee friendly labor legislation, including legislation that sets forth detailed procedures for dispute resolution, employee separation, provision of benefits or facilities to employees at employer’s costs as well as imposing financial obligations and other compliance on employers upon retrenchment.

We are subject to labor and employment laws across jurisdictions and if more stringent labor laws become applicable to us or if our employees unionize, our profitability may be adversely affected.

We are subject to labor and employment laws across the jurisdictions in which we operate, and may from time to time be subject to litigation or administrative actions resulting from claims against us by current or former employees, individually or as part of a class action, including for claims of wrongful termination, discrimination (including on grounds of nationality, ethnicity, race, faith, gender, marital status, age or disability), misclassification, redundancy payments described above, or other

violations of labor laws, or other alleged conduct.

If we are found liable for any such claim, such liabilities could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.

Additionally, some of the geographies where we operate have stringent employee-friendly labor legislation, including legislation that sets forth detailed procedures for dispute resolution, employee separation, provision of benefits or facilities to employees at employer’s costs as well as imposing financial obligations and other compliance on employers upon retrenchment.

Though we are exempt from some of these labor laws at present under applicable exceptions in relevant jurisdictions, there can be no assurance that such laws will not become applicable to us in the future.

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Regulations in other countries in which we operate also regulate our relations with our employees.

In addition, our employees may in the future form unions.

If employees at any of our operations centers become eligible for union membership, we may be required to raise wage levels or grant other benefits that could lead to an increase in our compensation expenses, or productivity at relevant operations centers may be adversely affected, resulting, in each case to possible adverse impacts on our profitability and cash flows.

During the quarter ended March 31, 2019, the Supreme Court of India clarified that certain allowances paid by an employer to an employee should be included in the definition of “basic wage” for the purposes of defined social security contribution plans.

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Most specifically, it broadens the definition of an employee and wages and liberalizes the definition of “continuous period” for the purpose of determining employee benefits, amongst others and could have a material adverse effect on our results of operations, financial condition and cash flows.

In addition, our employees may in the future form unions.

The Government of India in the past few years has focused on the occupational health and safety concerns experienced by workers in the outsourcing industry.

The introduction of legislation imposing restrictions on working hours or conditions of professionals in the outsourcing industry could have an adverse effect on our business, results of operations, cash flows and financial condition.

Our global operations subject us to significant labor and employment risks.

We may from time to time be subject to litigation or administrative actions resulting from claims against us by current or former employees, individually or as part of a class action, including for claims of wrongful termination, discrimination (including on grounds of nationality, ethnicity, race, faith, gender, marital status, age or disability), misclassification, redundancy payments described above, or other violations of labor laws, or other alleged conduct.

If we are held liable for unpaid compensation, redundancy payments, statutory penalties, and other damages arising out of such actions and litigations, such liabilities could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.

A substantial portion of our assets and operations are located in India, and we are subject to regulatory, economic and political uncertainties in India.

Many of our operating subsidiaries are incorporated in India, and a substantial portion of our assets and our professionals are located in India.

We intend to continue to develop and expand our offshore facilities in India.

In the past, India experienced significant inflation, low growth in gross domestic product and shortages of foreign currency reserves.

The Indian government, however, has exercised and continues to exercise significant influence over many aspects of the Indian economy.

India’s government has provided significant tax incentives and relaxed certain regulatory restrictions in order to encourage foreign investment in specified sectors of the economy, including our industry.

Certain of those programs, which have benefited us, include tax holidays, liberalized import and export duties and preferential rules on foreign investment and repatriation.

We cannot assure you that liberalization policies will continue or that any other changes made by the Indian government will be favorable to our operations or business.

The choice of India as an outsourcing destination and our financial performance may be adversely affected by general economic conditions and economic and fiscal policy in India, including changes in exchange rates and controls, interest rates and taxation policies, as well as social stability and political, economic or diplomatic developments affecting India in the future.

In particular, India has experienced significant economic growth over the last several years, but faces major challenges in sustaining that growth in the years ahead.

These challenges include the need for substantial infrastructure development and improving access to healthcare and education.

Our ability to recruit, train and retain qualified employees, develop and operate our operations centers, and attract and retain clients could be adversely affected if India does not successfully meet these challenges.

If the transfer pricing arrangements we have among our subsidiaries are determined to be inappropriate, our tax liability may increase.

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We may also face difficulties integrating new facilities in different countries into our existing operations.

As we expand our business into new countries we may encounter regulatory, personnel, technological and other difficulties that increase our expenses or delay our ability to start up our operations or become profitable in such countries.

As we expand our business into new countries, we may encounter regulatory, personnel, technological and other difficulties that increase our expenses or delay

our ability to start up our operations or become profitable in such countries.

This may affect our relationships with our clients.

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Following the expiry of the tax exemption, income generated from centers in the Philippines will be taxed at the prevailing annual tax rate.

As a result of the foregoing, our overall effective tax rate may increase in future years and such increase may be material and may have impact on our business, results of operations, financial condition and cash flows.

Introduction of tax legislation and disputes with tax authorities may have an adverse effect on our operations and our overall effective tax rate.

Governments in countries in which we operate or provide services could enact new tax legislation, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Guidelines issued by Philippines Fiscal Incentives Review Board allows PEZA registered units to work remotely with certain thresholds.

We are managing our business in accordance with the guidelines, however, if the prescribed thresholds are not met, it may adversely affect our income tax rate.

Governments in countries in which we operate or provide services could enact new tax legislation, including the Made in America Tax Plan in the United States, announced in April 2021, and the Finance Act 2021 in the United Kingdom, enacted in June 2021, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

In addition, our ability to repatriate surplus earnings from our operations centers in a tax-efficient manner is dependent upon interpretations of local laws, possible changes in such laws and the renegotiation of existing double tax avoidance treaties.

Changes to any of these may adversely affect our overall tax rate, which would have a material adverse effect on our business, results of operations, financial condition and cash flows.

The Company’s legal entity rationalization project is an ongoing endeavor to simplify our global legal entity structure, remove redundancies and reduce compliance risks and costs.

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However, we cannot assure you that any of these projects will be fully implemented or implemented in a manner satisfactory to the Company, or, if it is implemented, that there will not be any adverse actions brought by the tax authorities of certain jurisdictions if this re-organization is implemented.

Our earnings may be adversely affected if we repatriate funds held by our foreign subsidiaries.

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All of these risks and uncertainties could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Currency exchange rate fluctuations in the various currencies in which we do business, especially the Indian rupee and Philippine peso versus the U.S.

Currency exchange rate fluctuations in the various currencies in which we do business, especially the Indian rupee and Philippine peso, U.K pound sterling versus the U.S.

dollar, could have a material adverse effect on our results of operations.

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This could limit our ability to use cash generated in one country in another country and could limit our ability to hedge our exposures.

Under the withdrawal agreement, there is a transitional period until December 31, 2020 (extendable up to two years).

On December 24, 2020, the United Kingdom and the EU struck a provisional trade and cooperation agreement that provides for zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin.

trade deal was approved by the U.K.

parliament on December 30, 2020, and, is provisionally effective from January 1, 2021 until February 28, 2021, while pending approval and ratification by the EU parliament.

In June 2016, the United Kingdom held a referendum in which British citizens approved an exit from the European Union ("EU"), commonly referred to as “Brexit.” Following protracted negotiations, the United Kingdom left the EU on January 31, 2020 and entered into a trade and cooperation agreement with the EU that provides for zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin.

trade and cooperation agreement was signed on December 30, 2020 and went into force on May 1, 2021.

As a result of the referendum and the recent exit of the United Kingdom from the EU, the global markets and currencies have been and may in the future be adversely impacted, including experiencing a decline in the value of the U.K.

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operations and those of our clients.

We are not able to predict the extent of those impacts.

As a result, it is possible that events in the U.K.

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In addition, immigration laws are subject to legislative change and varying standards of application and enforcement due to political forces, economic conditions or other events, including terrorist attacks.

We cannot predict the political or economic events that could affect immigration laws or any restrictive impact those events could have on obtaining or monitoring visas or work permits for our professionals.

The ability to move our employees around the world as necessary to meet client demands is important to our business.

If we are unable to efficiently deploy talent because of increased regulation of immigration or work visas, including limitations placed on the number of visas granted, limitations on the type of work performed or location in which the work can be performed, and new or higher minimum salary requirements, it could be more difficult to staff our employees on client engagements and could increase our costs and have an adverse effect on our net income and cash flows.

Further, COVID-19 has resulted in the temporary suspension of existing visas and several governments not granting new visas.

Further, if COVID-19 persists for an extended period, then obtaining visas for our personnel may become difficult and several governments may not grant new visas.

Investors may have difficulty effecting service of process or enforcing judgments obtained in the United States against our subsidiaries in India or our executive officers.

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We may not be able to service our debt or obtain additional financing on competitive terms.

We are party to an investment agreement pursuant to which we issued $150 million aggregate principal amount of convertible senior notes due October 1, 2024 (the “Notes”) to Orogen Echo LLC, which bear interest at a rate of 3.50% per annum and are payable semi-annually in arrears in cash on April 1 and October 1 of each year.

See Note 18 - Borrowings to our consolidated financial statements for key terms of the Notes.

We are further party to a credit agreement for our bank debt facility that contains covenants, requiring, among other things, maintenance of certain financial ratios, indebtedness and, under certain conditions, restricting our ability to pay dividends, repurchase common shares and make other restricted payments as defined in the credit agreement.

We are party to a credit agreement for our bank debt facility that contains covenants, requiring, among other things, maintenance of certain financial ratios, indebtedness and, under certain conditions, restricting our ability to pay dividends, repurchase common shares and make other restricted payments as defined in the credit agreement.

The credit agreement provides for a $300 million revolving credit facility including a letter of credit sub-facility.

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We may in the future require additional financing to fund one or more acquisitions and may not be able to obtain such additional financing on competitive terms or at all, which could restrict our ability to complete such transactions, or could impose financial or operational restrictions on our business.

We may not have the ability to use cash to settle the principal amount of the Notes upon conversion or to repurchase the Notes upon a fundamental change, which could result in dilution and could adversely affect our financial condition.

The Notes are convertible any time prior to their maturity on October 1, 2024 into cash, stock or a combination of cash and stock at an initial conversion rate set forth in the indenture governing the Notes (the "Indenture").

Notes that are converted in connection with a make-whole fundamental change (as defined in the Indenture) may be entitled to an increase in the conversion rate for such Notes.

Upon a conversion event, if we do not have adequate cash available or cannot obtain additional financing, or our use of cash is restricted by applicable law, regulations or agreements governing our current or future indebtedness, we may not be able to use cash to settle the principal amount of the Notes upon conversion.

If we settle any

portion of the principal amount of the Notes upon conversion in stock, it will result in immediate dilution to existing stockholders and such dilution could be material.

In addition, holders of the Notes have the right to require us to repurchase their Notes upon the occurrence of a fundamental change (as defined in the Indenture) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any.

If we do not have adequate cash available or cannot obtain additional financing, or our use of cash is restricted by applicable law, regulations or agreements governing our current or future indebtedness, we may not be able repurchase the Notes when required under the Indenture, which would constitute an event of default under the Indenture.

An event of default under the Indenture could also lead to a default under other agreements governing our current and future indebtedness, and if the repayment of such other indebtedness were accelerated, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or make cash payments upon conversion of the Notes.

The terms of the Notes could delay or prevent an attempt to take over our Company.

The terms of the Notes require us to repurchase the Notes in the event of a fundamental change.

A takeover of our Company would constitute a fundamental change.

This could have the effect of delaying or preventing a takeover of our Company that may otherwise be beneficial to our stockholders.

We may be required to transition from the use of the LIBOR interest rate index in the future.

We could be unable to refinance our outstanding indebtedness on reasonable terms or at all.

Our credit facility, which represents a portion of our borrowing, bears interest at a variable rate based on the London Interbank Offered Rate ("LIBOR").

In July 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that it will no longer persuade or compel banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021.

This announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021.

On November 30, 2020, ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct Authority, announced plans to consult on ceasing publication of USD LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD LIBOR tenors.

While this announcement extends the transition period to June 2023, the United States Federal Reserve concurrently issued a statement advising banks to cease new USD LIBOR issuances by the end of 2021.

In light of these recent announcements, the future of LIBOR at this time is uncertain and any changes in the methods by which LIBOR is determined or regulatory activity related to LIBOR’s phase-out could cause LIBOR to perform differently than in the past or cease to exist.

Although regulators and IBA have made clear that the recent announcements should not be read to say that LIBOR has ceased or will cease, in the event LIBOR does cease to exist, alternative index rates or benchmarks may become applicable to our credit facility and some financing agreements extending beyond 2021 that presently utilize LIBOR as a factor in determining the interest rate, and such index rates or benchmarks may be less favorable to us than LIBOR.

This may result in interest rates and/or payments that do not correlate over time with the interest rates and / or payments that would have been made on our obligations if LIBOR had not ceased to exist.

Changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative rate or benchmark, may adversely affect interest rates and result in higher borrowing costs.

This could materially and adversely affect our results of operations, cash flow and liquidity.

We are exposed to credit risk and fluctuations in the market values of our investment and derivatives portfolios.

Any deterioration of the credit and capital markets in the United States, Asia or other regions of the world could result in volatility of our investment earnings and impairments to our investment portfolio, which could negatively impact our financial condition and reported income.

Changes in economic conditions could adversely affect the ability of counterparties, including counterparties to our foreign exchange forward contracts, to meet their obligations to us, which could materially affect our positions and investments.

Risks Related to Our Common Stock

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Our stock has at times experienced substantial price volatility as a result of, among other reasons, variations between our actual and anticipated financial results, announcements by us and our competitors, terrorist attacks, natural disasters, epidemics or pandemics, or other such events impacting countries where we or our clients have operations, loss of one or more significant clients, announcements of technological developments, projections or speculation about our business or that of our competitors by the media or investment analysts or uncertainty about current global economic conditions.

The stock market, as a whole, experiences extreme price and volume fluctuations that affect the market price of many companies, including technology

companies, in ways that may have been unrelated to these companies’ operating performance.

The stock market, as a whole, experiences extreme price and volume fluctuations that affect the market price of many companies, including technology companies, in ways that may have been unrelated to these companies’ operating performance.

Where the global stock markets have experienced, and may continue to experience, significant decline from COVID-19, could result in a material adverse effect on our stock price.

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For example, legislation has been proposed that would require offshore providers to identify where they are located and that would require notice to individuals whose personal information is disclosed to non-U.S.

In addition, bills have been proposed that would provide tax and other economic incentives for companies that create employment in the United States by reducing their offshore outsourcing.

Other bills have proposed requiring call centers to disclose their geographic locations, requiring notice to individuals whose personal information is disclosed to non-U.S.

In addition, bills have been proposed that would provide tax and other economic incentives for companies that create employment in the United States by reducing their offshore outsourcing, including the Made in America legislation described above.

See Part I, Item 1A, “Risk Factors” under “Risks Related to the International Nature of Our Business-Our financial condition could be negatively affected if foreign governments introduces new legislation, reduce or withdraw tax benefits and other incentives currently provided to companies within our industry or if we are not eligible for these benefits.” Other bills have proposed requiring call centers to disclose their geographic locations, requiring notice to individuals whose personal information is disclosed to non-U.S.

affiliates or subcontractors, requiring disclosures of companies’ foreign outsourcing practices or restricting U.S.

private sector companies that have federal government contracts, federal grants or guaranteed loan programs from outsourcing their services to offshore service providers.

Because most of our clients are located in the United States, any expansion of existing laws or the enactment of new legislation restricting offshore

outsourcing could adversely impact our ability to do business with U.S.

In March 2021, Congressional Democrats introduced the “No Tax Breaks for Outsourcing Act” and “Stop Tax Haven Abuse Act,” both of which seek to increase U.S.

taxes related to the non-U.S.

activities of U.S.

headquartered companies.

If enacted, these proposed changes could have an impact on our results of operations and cash flows.

Because most of our clients are located in the United States, any expansion of existing laws or the enactment of new legislation restricting offshore outsourcing could adversely impact our ability to do business with U.S.

clients through our non-U.S.

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However, if we are unable to obtain indemnification in future contracts with clients or if the existing indemnification is not enforceable or available, we may be liable under those agreements we enter into with clients in the United Kingdom and other European jurisdictions.

Additionally, we cannot accurately predict the impact that COVID-19 might have on our clients’ outsourcing needs and efforts, as some of our clients might decide to refrain from offshore outsourcing due to the pressures they face from their increased unemployment resulting from COVID-19.

Unauthorized disclosure of sensitive or confidential client and customer data, whether through breach of our computer systems or otherwise, could expose us to protracted and costly litigation and cause us to lose clients.

Additionally, we cannot accurately predict the impact that COVID-19 might have on our clients’ outsourcing needs and efforts, as some of our clients might decide to refrain from offshore outsourcing due to the pressures they face from increased unemployment in the regions in which they operate as a result of COVID-19.

Unauthorized disclosure of sensitive or confidential client and employee data, whether through breach of our computer systems or otherwise, could cause us significant reputational damage, expose us to protracted and costly litigation, and cause us to lose clients.

We are typically required to process, and sometimes collect and/or store sensitive data, including data regulated by the U.S.

Health Insurance Portability and Accountability Act of 1996, as amended, of our clients’ end customers in connection with our services, including names, addresses, social security numbers, personal health information, credit card account numbers, checking and savings account numbers and payment history records, such as account closures and returned checks.

Health Insurance Portability and Accountability Act of 1996, as amended, of our clients’ customers in connection with our services, including names, addresses, social security numbers, personal health information, credit card account numbers, checking and savings account numbers and payment history records, such as account closures and returned checks.

In addition, we collect and store data regarding our employees.

In the United States, the California Consumer Privacy Act (the “CCPA”), went into effect in January 2020.

The CCPA imposes privacy and data security obligations on companies and provides California consumers with certain rights as data subjects.

Several other U.S.

states have enacted or proposed data privacy laws that impose similar obligations.

In addition, some states have passed laws imposing increased data security and breach notification obligations on companies operating in the United States.

In the United States, several states have enacted or are considering enacting privacy regulations.

In California, the California Consumer Privacy Act (the “CCPA”) went into effect in January 2020.

The CCPA imposes privacy and data security obligations on companies collecting, accessing or processing the personal information of California residents and provides California consumers with certain rights as data subjects.

The CCPA was substantially amended through the passage of the California Privacy Rights Act (the “CPRA”) which takes effect on January 1, 2023.

The CPRA expands the definition of personal information to include certain categories of sensitive data, or “sensitive personal information,” which is subject to heightened protection.

The CPRA also expanded the scope of coverage to include requirements with respect to employee data and created a new state agency vested with authority to implement and enforce the CCPA and the CPRA.

In 2021, Virginia and Colorado enacted comprehensive privacy laws through the passage of the Virginia Consumer Data Protection Act (“VCDPA”) and Colorado Privacy Act (“CPA”), respectively, which embody similar privacy principles underlying the CCPA and CPRA with some notable differences in how such principles are transcribed into law.

The VCDPA takes effect on January 1, 2023, and the CPA takes effect on July 1, 2023.

In the EU, the General Data Protection Regulation (the “GDPR”) imposes privacy and data security compliance obligations and significant penalties for noncompliance.

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In GDPR enforcement matters, companies have faced fines for violations of certain provisions.

Additionally, in India, the Personal Data Protection Bill, 2019 continues to make progress through the Indian Parliament.

If enacted in its current form it would impose stringent obligations on the handling of personal data, including certain localization requirements for sensitive data.

Other countries have enacted or are considering enacting data localization laws that require certain data to stay within their borders.

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Complying with changing regulatory requirements requires us to incur substantial costs, exposes us to potential regulatory action or litigation, and may require changes to our business practices in certain jurisdictions.

As a result, we are subject to various data protection and privacy laws, including the GDPR and CCPA, in the countries in which we operate, and the failure to comply could result in significant fines and penalties.

As a result, we are subject to various data protection and privacy laws in the countries in which we operate, and the failure to comply could result in significant fines and penalties.

In addition, many of our agreements with our clients do not include any limitation on our liability to them with respect to breaches of our obligation to keep the information we receive from them confidential.

Although we devote substantial resources to protect our information assets and our clients' confidential information, any network infrastructure are subject to be vulnerable to rapidly evolving cyber-attacks, and our user data and corporate systems and security measures may be breached due to the actions of outside parties (including cyber-attacks), employee error, malfeasance, a combination of these, or otherwise, allowing an unauthorized party to obtain access to our data or our users’ or customers’ data.

Although we devote substantial resources to protect our information assets and our clients' confidential information, any network infrastructure is to some extent vulnerable due to rapidly evolving cyber-attacks, employee error, malfeasance, or a combination of the foregoing.

Additionally, outside parties may attempt to fraudulently induce employees, users, or customers to disclose sensitive information in order to gain access to our data or our users’ or customers’ data.

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If an actual or perceived breach of our security occurs (or a breach of a customer’s security that can be attributed to our fault or is perceived to be our fault), the market perception of the effectiveness of our security measures could be harmed and we could lose users and customers.

Security breaches expose us to a risk of loss of this information, litigation, remediation costs, increased costs for security measures, loss of revenue, damage to our reputation, and potential liability.

If unauthorized access to or disclosure of data in our possession or control occurs, we could be subject to significant liability to our clients or our clients’ customers for breaching contractual confidentiality and security provisions or privacy laws, as well as liability and penalties in connection with any violation of applicable privacy laws or criminal prosecution.

Unauthorized disclosure of sensitive or confidential client or employee data, whether through breach of computer systems, systems failure, employee negligence, fraud or misappropriation, or otherwise, could damage our reputation and cause us to lose clients.

Similarly, unauthorized access to or through our information systems and networks or those we develop or manage for our clients, whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation.

If any person, including any of our employees, is able to penetrate our perimeter or internal network security, data centers, computing infrastructure or otherwise mismanages or misappropriates sensitive data, discloses or distributes any such data in an unauthorized manner, we could be subject to significant liability and lawsuits from our clients or their customers for breaching contractual confidentiality provisions or privacy laws, or investigations and penalties from regulators.

Under some of our client contracts, we have agreed to pay for the costs of remediation or notice to end users or credit monitoring, as well as other costs.

breaches expose us to a risk of loss of this information, litigation, remediation costs, increased costs for security measures, loss of revenue, damage to our reputation, and potential liability.

Unauthorized access to or disclosure of sensitive or confidential client or employee data by any person, including any of our employees, whether through breach our perimeter or internal network security, data centers, computing infrastructure, computer systems, or systems failure, employee negligence, fraud or misappropriation, or otherwise, could result in negative publicity, subject us to significant liability and lawsuits from our employees, clients or their customers for breaching contractual confidentiality provisions or privacy laws, or investigations and penalties from regulators or criminal prosecution, damage to our reputation and cause us to lose clients.

Under some of our client contracts, we have agreed to pay for the costs of remediation or notice to end users or credit monitoring, as well as other costs, in the event of a breach.

Our industry is subject to rapid technological change, and we may not be successful in addressing these changes.

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If we do not sufficiently invest in new technology and industry developments or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations, and our ability to develop and maintain a competitive advantage and continue to grow could be negatively affected.

Our growing use of AI (including ML) in our offerings presents additional risks.

AI algorithms may be flawed and datasets may be insufficient or contain biased information.

Inappropriate or controversial data practices by us or others could impair the acceptance of AI solutions or subject us to lawsuits and regulatory investigations.

These deficiencies could undermine the decisions, predictions or analysis AI applications produce, or lead to unintentional bias and discrimination, subjecting us to competitive harm, legal liability, and brand or reputational harm.

B) General Risk Factors

Our results of operations could be adversely affected by economic and political conditions and the effects of these conditions on our clients’ businesses and levels of business activity.

Our results of operations could be adversely affected by economic and political conditions globally and the effects of these conditions on our clients’ businesses and levels of business activity.

Global economic and political conditions affect our clients’ businesses and the markets they serve, which are increasingly becoming more interdependent.

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Other developments in response to economic events, such as restructurings or reorganizations, particularly involving our clients, could also cause the demand for our services to decline.

Market disruptions may limit our ability to access financing or increase our cost of financing to meet liquidity needs, and affect the ability of our customers to use credit to purchase our services or to make timely payments to us.

Many of our operating subsidiaries are incorporated in India and the Philippines, and a substantial portion of our assets and our employees are located in such locations.

Although we intend to continue to develop and expand our offshore facilities in such locations, our ability to recruit, train and retain qualified employees, develop and operate our operations centers, and attract and retain clients could be adversely affected due to economic and political uncertainties in such locations.

Market disruptions may limit our ability to access financing or increase our cost of financing to meet liquidity needs, and affect the ability of our clients to use credit to purchase our services or to make timely payments to us.

If we are unable to collect our receivables from, or bill our unbilled services to, our clients, our results of operations and cash flows could be adversely affected.

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We might not accurately assess the creditworthiness of our clients.

Macroeconomic conditions, such as any domestic or global credit crisis and disruption of the global financial system, including on account of COVID-19, could also result in financial difficulties for our clients, such as limited access to the credit markets, limited government stimulus support, insolvency or bankruptcy, and, as a result, could cause such clients to delay payments to us, request modifications to their payment arrangements that could increase our receivables balance, or default on their payment obligations to us.

Macroeconomic conditions, such as any domestic or global credit crisis and disruption of the global financial system, including on account of COVID-19, have resulted and may continue to result in financial difficulties for our clients, such as limited access to the credit markets, limited government stimulus support, insolvency or bankruptcy, and, as a result, have caused and may continue to cause, clients to delay payments to us, request modifications to their payment arrangements that could increase our receivables balance, or default on their payment obligations to us.

Timely collection of client balances also depends on our ability to complete our contractual commitments and bill and collect our contracted revenues.

If we are unable to meet our contractual requirements, we might experience delays in

collection of and/or be unable to collect our client balances, and if this occurs, our results of operations and cash flows could be adversely affected.

If we are unable to meet our contractual requirements, we might experience delays in collection of and/or be unable to collect our client balances, and if this occurs, our results of operations and cash flows could be adversely affected.

In addition, if we experience an increase in the time to bill and collect for our services, our cash flows could be adversely affected.

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Similarly, if we cannot, or do not, meet our contractual obligations with vendors, such as licensors, the vendors may have the right to terminate the contract, in which case we may not be able to provide client solutions and services dependent on the products or services provided to us by such contracts.

Our financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (U.S.

The application of U.S.

GAAP requires us to make estimates and assumptions about certain items and future events that affect our reported financial condition, and our accompanying disclosure.

These estimates and assumptions involve the use of judgment and are subject to significant uncertainties, some of which are beyond our control.

COVID-19 has impacted our business and the extent to which COVID-19 may continue to impact our business depends on numerous dynamic factors, which we still cannot reliably predict.

As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve with respect to COVID-19, our estimates may materially change in future periods.

We are exposed to credit risk and fluctuations in the market values of our investment and derivatives portfolios.

We may not be fully insured for all losses we may incur.

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Insurance is not available for certain types of claims, including patent infringement, violation of wage and hour laws, failure to provide equal pay in the U.S., and our indemnification obligations to our clients based on employment law.

The successful assertion of one or more large claims against us that are excluded from our insurance coverage or exceed available insurance coverage, or changes in our insurance policies (including premium increases, the imposition of large deductible or co-insurance requirements, or our insurers’ disclaimer of coverage as to future claims), could have a material adverse effect on our business, results of operations, financial condition and cash flows.

The successful assertion of one or more large claims against us that are excluded from our insurance coverage or exceed available insurance coverage, or changes in our

insurance policies (including premium increases, the imposition of large deductible or co-insurance requirements, or our insurers’ disclaimer of coverage as to future claims), could have a material adverse effect on our business, results of operations, financial condition and cash flows.

New and changing laws, corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.

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In addition, the laws, regulations and standards regarding corporate governance may make it more difficult for us to obtain director and officer liability insurance.

Further, our board members, chief executive officer and chief

financial officer could face an increased risk of personal liability in connection with their performance of duties.

Further, our board members, chief executive officer and chief financial officer could face an increased risk of personal liability in connection with their performance of duties.

As a result, we may face difficulties attracting and retaining qualified board members and executive officers, which could harm our business.

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Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violations of these regulations could harm our business.

We provide services to clients throughout the world, therefore we are subject to numerous, and sometimes conflicting, legal rules on matters as diverse as import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, government affairs, internal and disclosure control obligations, securities regulation, including anti-competition, anti-money-laundering, data privacy and protection, government compliance, wage-and-hour standards, employment and labor relations and human rights.

The global nature of our operations increases the difficulty of compliance.

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Our failure to comply with applicable legal and regulatory requirements could have a material adverse effect on our business, results of operations, financial condition and cash flows.

In addition, it may be difficult to enforce our intellectual property rights both within and outside of the United States, India is a member of the Berne Convention, an international intellectual property treaty, and has agreed to recognize protections on intellectual property rights conferred under the laws of other foreign countries, including the laws of the United States.

There can be no assurance, however, that the laws, rules, regulations and treaties in effect in the United States, India and the other jurisdictions in which we operate and the contractual and other protective measures we take, are adequate to protect us from misappropriation or unauthorized use of our intellectual property, or that such laws will not change.

Governmental bodies, investors, clients and businesses are increasingly focused on environmental, social, and governance (“ESG”) issues, which has resulted and may in the future continue to result in the adoption of new laws and regulations and changing buying practices.

If we fail to keep pace with ESG trends and developments or fail to meet the expectations of our clients and investors, our reputation and business could be adversely impacted.

In addition, it may be difficult to enforce our intellectual property rights both within and outside of the United States.

India is a member of the Berne Convention, an international intellectual property treaty, and has agreed to recognize protections on intellectual property rights conferred under the laws of other foreign countries, including the laws of the United States.

can be no assurance, however, that the laws, rules, regulations and treaties in effect in the United States, India and the other jurisdictions in which we operate and the contractual and other protective measures we take, are adequate to protect us from misappropriation or unauthorized use of our intellectual property, or that such laws will not change.

Among other anti-corruption laws and regulations, including the U.K.

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Violations of these laws or regulations could subject us to criminal or civil enforcement actions, including fines and suspension or disqualification from government contracting or contracting with private entities in certain highly regulated industries, any of which could have a material adverse effect on our business.

Terrorist attacks and other acts of violence involving India, the Philippines, the United States or other countries could adversely affect the financial markets, result in a loss of client confidence and adversely affect our business, results of operations, financial condition and cash flows.

Terrorist attacks and other acts of violence or war, including those involving India, the Philippines, the United States or other countries, may adversely affect worldwide financial markets and could lead to economic recession, which could adversely affect our business, results of operations, financial condition and cash flows.

These events could adversely affect our clients’ levels of business activity and precipitate sudden significant changes in regional and global economic conditions and cycles.

These events also pose significant risks to our people and to our operations centers.

South Asia has, from time to time, experienced instances of civil unrest and hostilities among neighboring countries, including Bangladesh, Pakistan and China.

In recent years there have been several instances of military confrontations along the Indo-Pakistani and Indo-China border.

There continues to be potential for hostilities between India and Pakistan due to recent terrorist activities and the geopolitical climate along the border.

Although this has not been the case to date, such political tensions could create a perception that there is a risk of disruption of services provided by companies with operations in India, which could have a material adverse effect on the market for our services.

Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involved the threat or use of nuclear weapons, we might not be able to continue our operations in India.

Our insurance policies may not insure us against losses and interruptions caused by terrorist attacks and other acts of violence or war.

We are vulnerable to natural disasters, technical disruptions and man-made events that could severely disrupt the normal operation of our business and if our business continuity and disaster recovery plans are nor effective, it may adversely affect our business, results of operations, financial condition and cash flows.

Our operations centers and our data and voice communications, particularly in India and the Philippines, may be damaged or disrupted as a result of natural disasters such as earthquakes, floods, volcano eruptions, heavy rains, epidemics or pandemics, tsunamis and cyclones, technical disruptions such as electricity or infrastructure breakdowns, including damage to telecommunications cables, computer glitches and electronic viruses or man-made events such as political unrest, terrorist attacks, protests, riots and labor unrest.

We are vulnerable to natural disasters, technical disruptions and man-made events that could severely disrupt the normal operation of our business and if our risk management, business continuity and disaster recovery plans are nor effective, it may adversely affect our business, results of operations, financial condition and cash flows.

Such events may lead to the disruption of information systems and telecommunication services for sustained periods.

They also may make it difficult or impossible for employees to reach our business locations.

Our business continuity and disaster recovery plans may not be effective at preventing or mitigating the effects of such disruptions, particularly in the case of a catastrophic event.

Our risk management, business continuity and disaster recovery plans may not be effective at preventing or mitigating the effects of such disruptions, particularly in the case of a catastrophic events.

Damage or destruction that interrupts our provision of services could adversely affect our reputation, our relationships with our clients, our leadership team’s ability to administer and supervise our business or it may cause us to incur substantial additional expenditure to repair or replace damaged equipment or delivery centers.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors