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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-24 · 208 added, 381 removed, 164 unchanged (78% of the section changed)

Summary of Material Risk Factors

The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and results of operations and could make an investment in our Company speculative or risky.

You should be aware that these risk factors and other information may not describe every risk facing our Company.

Additional risks and uncertainties not currently known to us may also materially adversely affect our business, financial condition and/or results of operations.

You should read this summary together with the more detailed description of each risk factor contained below.

Some of these material risks include:

Risks Related to Our Business

• 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.

• We may fail to attract and retain enough sufficiently trained employees to support our operations and we experience significant employee turnover rates, which may adversely affect us.

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

• 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

• 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.

Risks Related to Our Common Stock

• Our stock price continues to be volatile.

Risks Related to Our Industry

• 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 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 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;

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

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.

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

We have earned and believe that we will continue to earn in the near future or foreseeable a substantial portion of our total revenues from a limited number of large clients.

The loss of or financial difficulties at any of our large clients could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Moreover, the loss of a major customer could also impact our reputation in the market, making it more difficult to attract and retain customers more generally.

Our client contracts contain certain termination and other provisions that could have an adverse effect on our business, results of operations, financial condition and cash flows.

Our business depends on maintaining and growing client demand for our services and solutions, including by anticipating and incorporating the latest technology into our offerings, and a significant reduction in such demand or a failure to respond to the evolving technological environment could materially affect our results of operations.

Our success depends in part on the demand for our services and solutions, which could be negatively affected by a number of factors that may be outside of our control, including, for example, economic and political volatility or changed market conditions.

Our ability to maintain and grow demand for our services and solutions requires that we continue to develop and implement offerings that keep pace with changes in the industry and anticipate and respond to rapidly evolving technology and our clients’ evolving needs in areas such as AI, ML, digital transformation and solutions, advanced analytics, blockchain, augmented reality/virtual reality, cloud based solutions, bots, hyper-automation, data management, robotics and process automation, and data engineering.

We may not be successful in addressing these changes on a timely basis, or at all, or successfully marketing any changes that we implement.

In addition, products or technologies developed by others may render our services uncompetitive or obsolete.

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.

If we are successful in responding to these developments, as we expand our services and solutions into these new areas, we may be exposed to operational, legal, regulatory, ethical, technological and other risks specific to such new areas, which may negatively affect our reputation and demand for our services and solutions.

Technological developments may materially affect the cost and use of technology by our clients and, in the case of cloud and as-a-service solutions, could affect the nature of how we generate revenue.

Some of these technological developments have reduced and replaced some of our historical services and solutions and may continue to do so in the future.

This has caused, and may in the future cause, clients to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.

Such technological developments and spending delays can negatively impact our results of operations if we are unable to introduce new pricing or commercial models that reflect the value of these technological developments or if the pace and level of spending on new technologies are not sufficient to make up any shortfall.

Developments in the industries we serve, which may be rapid, also could shift demand to new services and solutions.

If, as a result of new technologies or changes in the industries we serve, our clients demand new services and solutions, we may be less competitive in these new areas or need to make significant investment to meet that demand.

Our growth strategy focuses on responding to these types of developments by driving innovation that will enable us to expand our business into new growth areas.

If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our business at sufficient speed and scale, 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 to execute on our growth strategy could be adversely 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.

Client demand may be impacted by the selling cycle and terms of our client contracts.

Consistent with industry practice, most of our client contracts may be terminated by our clients without cause and do not commit our clients to provide us with a specific volume of business.

Any failure to meet a client’s expectations could result in a cancellation or non-renewal of a contract or a decrease in business provided to us.

We may not be able to replace any client that elects to terminate or not renew its contract with us, which would reduce our revenues.

The loss of or financial difficulties at any of our large clients would have a material adverse effect on our business, results of operations, financial condition and cash flows.

A number of our contracts allow the client, in certain limited circumstances, to request a benchmark study comparing our pricing and performance with that of an agreed list of other service providers for comparable services.

Based on the results of the study and depending on the reasons for any unfavorable variance, we may be required to make improvements in the services we provide or reduce the pricing for services on a prospective basis to be performed under the remaining term of the contract or our client could elect to terminate the contract, which could have an adverse effect on our business, results of operations, financial condition and cash flows.

Many of our contracts contain provisions that would require us to pay penalties to our clients and/or provide our clients with the right to terminate the contract if we do not meet pre-agreed service level requirements or if we do not provide certain productivity benefits.

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.

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.

Any failure to meet a client’s expectations or a change in a client’s strategic direction could result in a cancellation or non-renewal of a contract or a decrease in the scope of services or solutions that we are able to provide to such client.

We may not be able to cover our costs or replace the associated revenues from such lost services or solutions, which could impact our results of operations in subsequent periods.

The terms of our project-based analytics and consulting services contracts generally do not exceed one year and may not produce ongoing or recurring business for us once the project is completed, and these contracts typically permit a client to terminate the agreement with shorter term notice.

The majority of our digital operations and solutions contracts have longer

terms, typically ranging from three to five years, and generally require a longer notice period for termination and may include an early termination fee to be paid to us, but this might not be sufficient to cover our costs or make up for anticipated ongoing revenues and loss of profit upon termination of the contract.

In addition, the selling cycle for such contracts, which generally ranges from six to eighteen months, and the implementation and initial transformation processes, which could take up to an additional six to twelve months, are subject to many risks and delays over which we have little or no control, including our clients’ decisions to choose alternatives to our services and solutions (such as other providers or in-house offshore resources) and the timing of our clients’ budget cycles and approval processes, or subsequent changes in technology and offerings, could result in changed demand.

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.

Our future success substantially depends on the continued services and performance of the members of our management team and other key employees possessing technical and business capabilities, including industry expertise, that are difficult to replace.

Specifically, the loss of the services of our Vice Chairman and Chief Executive Officer could seriously impair our ability to continue to manage and expand our business.

There is intense competition for experienced senior management and personnel with technical and industry expertise in the industry in which we operate, and we may not be able to retain these officers or key employees.

Although we have entered into employment and non-competition agreements with all of our executive officers, certain terms of those agreements may not be enforceable and in any event these agreements do not ensure the continued service of these executive officers.

In addition, we currently do not maintain “key person” insurance covering any member of our management team.

The loss of any of our key employees, particularly to competitors, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

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.

We may fail to attract and retain enough sufficiently trained employees to support our operations or professionals with sufficient leadership capabilities, 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 geographies where we operate.

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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 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.

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.

If we are unable to attract and retain highly-skilled technical personnel and do not invest in reskilling and upskilling our employees in the areas and skills that strategically important to our business, 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.

Our future success also depends substantially on the continued services and performance of the members of our management team and other key employees in leadership positions that possess technical and business capabilities, including industry expertise, and are difficult to replace.

Specifically, the loss of the services of our Vice Chairman and Chief Executive Officer could seriously impair our ability to continue to manage and expand our business.

We currently do not maintain “key person” insurance covering any member of our management team.

The loss of any of our key management personnel, particularly to competitors, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

If we are unable to accurately estimate the resources and time for a project, adjust our pricing terms or effectively manage our asset utilization levels 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 price we can charge for our services.

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 for employee training and development, other typically non-chargeable activities and optimizing our operational infrastructure.

If we fail to estimate accurately the resources and time required for a contract, or manage our asset utilization levels, future attrition rates, 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.

Industry pricing models are evolving and clients increasingly request alternative pricing models , rather than annual or hourly billing rates.

If we make inaccurate assumptions for contracts with such

alternative pricing models including pricing for our digital capabilities and complex transformation services or are unable to offer competitive pricing, our profitability may be negatively affected.

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’ 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, several states have enacted or are considering enacting privacy regulations such as the California Consumer Privacy Act (the “CCPA”) and the California Privacy Rights Act (the “CPRA”), and the EU’s General Data Protection Regulation (the “GDPR”) imposes privacy and data security compliance obligations and significant penalties for noncompliance.

A similar law in India that is currently progressing through Indian Parliament 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.

We may also face audits or investigations by one or more domestic or foreign government agencies or our clients pursuant to our contractual obligations relating to our compliance with these regulations.

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 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 is to some extent vulnerable due to rapidly evolving cyber-attacks, employee error, malfeasance, or a combination of the foregoing.

The remote work solutions that we employ in our hybrid and remote working models may also be limited in their ability to replicate the operational oversight and security controls of our office environments and may pose a higher risk of operational and information security failures.

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.

Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

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.

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.

Further, retaliatory acts by Russia in response to Western sanctions could include cyber attacks that could disrupt the global economy.

The growth in state sponsored cyber activity, including the increased rate of cyberattacks arising from the Russia-Ukraine crisis and the risk that these cyberattacks could spread globally, showcases the increasing sophistication of cyber threats and could dramatically expand the global threat landscape.

If a material security breach or incident occurs with respect to a cloud services provider, our clients and potential customers may lose trust in cloud solutions generally, and with respect to security in particular.

This could adversely impact our ability to retain existing customers or attract new customers, which, in turn, could have a serious impact on our reputation.

Although we have not experienced a material incident to date, there can be no assurance that these measures will prevent or limit the impact of a future incident.

We may incur significant costs in protecting against or remediating cyberattacks or other cyber incidents.

We rely on third party vendors and partners to deliver services and components for client critical services, which exposes us to a variety of risks that could have a material adverse effect on our business.

The services we provide are often critical to our clients’ businesses, and any failure to provide those services could result in a reduction in revenues or a claim for substantial damages against us, regardless of whether we are responsible for that failure.

We depend on certain significant vendors and partners for software, technology and data communications, related equipment and its maintenance, third party components that we use to deliver our services, including cloud services.

Our offshore operations centers require us to maintain active voice and data communications among our operations centers, our technology and data hubs and our clients’ offices.

Although we maintain our facilities and communications links with adequate business continuity and disaster recovery plans, disruptions could result from, among other things, technical breakdowns, computer glitches and viruses and weather conditions.

Any performance failure on the part of our vendors or partners, or the discontinuance by such vendors or partners of services that we have relied on them to perform for our clients, could delay our performance or require us to engage alternative third parties to perform the services at our cost or to perform them ourselves, any of which could deprive us of potential revenue or adversely impact our profitability.

Any failure by our vendors and partners to perform the services or deliver the components for which we contract with them or to provide such components or services within our expected price ranges and timelines, any quality issues from such third party services or components, any temporary or permanent loss of our equipment or systems, any disruptions to basic infrastructure like power and telecommunications could impede our ability to provide services to our clients, or any failure of our vendors or partners to comply with current good business practices or applicable laws and regulations, could result in a negative impact on our reputation, cause us to lose clients, reduce our revenues and cash flows and harm our business.

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

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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.

However, because of 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 digital operations and solutions.

Wages are generally higher for employees performing analytics and digital transformation 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.

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.

Since we were founded in April 1999, we have experienced rapid growth and significantly expanded our operations, and that growth has continued in recent years as well.

We have operations centers across India, the United States, the Philippines, Colombia, United Kingdom, South Africa, Bulgaria, Romania, and the Czech Republic.

Further, we have acquired multiple regional offices in the United States as part of our acquisitions.

Our headcount has increased significantly over the past several years.

We expect to develop and improve our internal systems in the locations where we operate in order to address the anticipated continued growth of our business.

We are also continuing to look for operations centers at locations outside of our current operating geographies.

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 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.

We may engage in strategic acquisitions or transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

As part of our business strategy, we intend to continue to selectively consider acquisitions or investments, some of which may be material.

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.

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.

Acquisitions, including completed acquisitions, involve a number of risks, including diversion of management’s attention, ability to finance the acquisition on attractive terms, failure to retain key personnel or valuable customers, legal liabilities and the need to amortize acquired intangible assets, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Future acquisitions may also result in the incurrence of indebtedness or the issuance of additional equity securities.

The intellectual property of an acquired business may be an important component of the value that we agree to pay for such a business.

Although we conduct due diligence in connection with each of our acquisitions, such acquisitions are subject to the risks that the acquired business may not own the intellectual property that we believe we are acquiring, that the intellectual property is dependent upon licenses from third parties, that the acquired business infringes upon the intellectual property rights of others or that the technology does not have the acceptance in the marketplace that we anticipated.

We could also experience financial or other setbacks if transactions encounter unanticipated problems, including problems related to execution, integration or underperformance relative to prior expectations.

Our management may not be able to successfully integrate any acquired business into our operations or maintain our standards, controls and policies, which could have a material adverse effect on our business, results of operations and financial condition.

Consequently, any acquisition we complete may not result in long-term benefits to us or we may not be able to further develop the acquired business in the manner we anticipated.

Following the completion of some acquisitions, we may need to rely on the seller to provide administrative and other support, including financial reporting and internal controls, and other transition services to the acquired business for a period of time.

There can be no assurance that the seller will do so in a manner that is acceptable to us, and failure of such seller to do so could result in a material adverse effect on our business, results of operations and financial condition.

We may not be able to realize the entire book value of goodwill and other intangible assets from acquisitions.

We periodically assess our goodwill and intangible assets to determine if they are impaired and we monitor for impairment of goodwill relating to all acquisitions.

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.

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.

In the event that the carrying amount of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment.

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.

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.

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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 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.

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

We have earned and believe that we will continue to earn in the near future or foreseeable a substantial portion of our total revenues from a limited number of large clients.

Any change in demand from any of our large clients, whether resulting from our services and solutions lagging behind current technology and industry developments, or political and economic developments, or otherwise, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Moreover, the loss of a major customer could also impact our reputation in the market, making it more difficult to attract and retain customers more generally.

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

We have operations centers across India, the United States, the Philippines, Colombia, the United Kingdom, the Republic of Ireland, South Africa, Bulgaria, Romania, and the Czech Republic.

Further, we have acquired multiple regional offices in the United States as part of our acquisitions.

Our headcount has increased significantly over the past several years.

We expect to develop and improve our internal systems in the locations where we operate in order to address the anticipated continued growth of our business.

We are also continuing to look for operations centers at locations outside of our current operating geographies.

We have also recently made changes to our operating model driven by delivery of a significant portion of our services from a hybrid and remote working models leading to potential contraction of our operation centers.

We believe that expanding our geographic base of operations and our new hybrid and remote working models will provide higher value to our clients by decreasing the risks of operating from a single location or country (including potential shortages of skilled employees, increases in wage costs during strong economic growth 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.

Changes in our operating model, such as the foregoing, or other changes to our infrastructure facilities or how we are organized, as the needs and size of our business change, 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 also need to manage cultural differences among our employee populations and varying legal and regulatory regimes across jurisdictions, and that may create a risk for employment claims.

We may engage in strategic acquisitions or transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows, including the impact from the impairment of goodwill and other intangible assets, if any.

As part of our business strategy, we intend to continue to selectively consider acquisitions or investments, some of which may be material.

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.

Future acquisitions may also result in the incurrence of indebtedness or the issuance of additional equity securities.

The intellectual property of an acquired business may be an important component of the value that we agree to pay for such a business.

Consequently, any acquisition we complete may not result in long-term benefits to us or we may not be able to further develop the acquired business in the manner we anticipated.

In the event that the carrying amount of goodwill and other intangible assets are impaired, as determined by impairment testing that we conduct on at least an annual basis, any such impairment would be charged to earnings in the period of impairment.

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

Failure to adhere to the regulations or accreditation or licensing standards that govern our business could have an adverse impact on our operations.

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.

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

In addition, we are required under various laws to obtain and maintain accreditations, permits and/or licenses for the conduct of our business in all jurisdictions in which we have operations and, in some cases, we are additionally required to maintain accreditations, permits and/or licenses where our clients receive our services, including the United States and Europe.

If we do not maintain our accreditations, licenses or other qualifications to provide our services or if we do not adapt to changes in legislation or regulation, we may have to cease operations in the relevant jurisdictions and may not be able to provide services to existing clients or be able to attract new clients.

In addition, we may be required to expend significant resources in order to comply with laws and regulations in the jurisdictions mentioned above.

Any failure to abide by regulations relating either to our business or our clients’ businesses may also, in some limited circumstances, result in civil fines and criminal penalties for us.

Any such ceasing of operations or civil or criminal actions may have a material adverse effect on our business, results of operations, financial condition and cash flows.

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.

We also face competition from non-U.S.-based business process

management and IT companies (including those in the United Kingdom and India) and U.S.-based outsourcing and IT companies.

Further, a client may choose to use its own internal resources rather than engage an outside firm to perform the types of services we provide.

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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.

Increased competition, our inability to compete successfully against competitors, pricing pressures or loss of market share could result in reduced gross margins, which could harm our business, results of operations, financial condition and cash flows.

Increased competition, our inability to compete successfully against competitors, pricing pressures or loss of market share could harm our business, results of operations, financial condition and cash flows.

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

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Any inability to compete effectively would adversely affect our business, results of operations, financial condition and cash flows.

We may disrupt our clients’ operations as a result of inadequate service or other factors, including telecommunications or technology downtime or interruptions.

Most of our agreements with clients contain service level and performance requirements, including requirements relating to the quality of our services.

Failure to consistently meet service requirements of a client or errors made by our employees in the course of delivering services to our clients could disrupt the client’s business and result in a reduction in revenues or a claim for damages against us.

Lockdowns and other measures imposed by governments around the world, as well as other resulting impacts of COVID-19, may result in our temporary inability to meet the service level and performance requirements of our clients.

Our business is dependent on the secure and reliable operation of controls within our and our clients’ information systems and processes, whether operated or executed by our clients themselves or by us in connection with our provision of services to them.

Although we believe we take adequate measures to safeguard against system-related and other fraud, there can be no assurance that we would be able to prevent fraud or even detect them on a timely basis, particularly where it relates to our clients’ information systems which are not managed by us.

We could incur certain liabilities if a process we manage for a client were to result in internal control failures or processing errors, or impair our client’s ability to comply with its own internal control requirements.

Our dependence on our offshore operations centers requires us to maintain active voice and data communications among our operations centers, our international technology hubs and our clients’ offices.

Although we maintain redundant facilities and communications links, disruptions could result from, among other things, technical breakdowns, computer glitches and viruses and weather conditions.

We also depend on certain significant vendors for facility storage and related maintenance of our main technology equipment and data at those technology hubs, as well as for some of the third party technology and platforms we sometimes use to deliver our services.

Any failure by these vendors to perform those services, any temporary or permanent loss of our equipment or systems, or any disruptions to basic infrastructure like power and telecommunications could impede our ability to provide services to our clients, have a negative impact on our reputation, cause us to lose clients, reduce our revenues and cash flows and harm our business.

Our contractual limitations on liability with our clients and third parties may not be enforceable.

Under most of our agreements with our clients, our liability for breach of certain of our obligations is generally limited to actual damages suffered by the client and is typically capped at the fees paid or payable to us for a period of time under the relevant agreement.

These limitations and caps on liability may be unenforceable or otherwise may not protect us from liability for damages.

In addition, certain liabilities, such as claims of third parties for which we may be required to indemnify our clients, including intellectual property infringement claims, or liability for fraud or breaches of confidentiality or notification costs relating to data breaches may not be limited under those agreements or may be subject to higher limitations.

Because our agreements are governed by laws of different jurisdictions, the interpretation of certain provisions, and the availability of certain defenses to us, may vary, which, in certain circumstances, may contribute to uncertainty as to the scope of our potential liability.

Failure to adhere to the regulations or accreditation or licensing standards that govern our business could have an adverse impact on our operations.

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

In addition, we may be required to expend significant resources in order to comply with laws and regulations in the jurisdictions mentioned above.

Any failure to abide by regulations relating either to our business or our clients’ businesses may also, in some limited circumstances, result in civil fines and criminal penalties for us.

Any such ceasing of operations or civil or criminal actions may have a material adverse effect on our business, results of operations, financial condition and cash flows.

We are vulnerable to natural disasters, technical disruptions, pandemics and societally created events that could severely disrupt the normal operations of our business and if our risk management, business continuity and disaster recovery plans are not 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, such as COVID-19, 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, other acts of violence or war, protests, riots and labor unrest.

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 and for us to deliver our solutions and services.

In particular, a local or global outbreak of a pandemic, such as the COVID-19 pandemic, may have widespread and unpredictable impacts on global societies, economies, financial markets and business practices.

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

Measures taken by governmental authorities have and may in the future disrupt the continuity of our provision of services to our clients and adversely impacted our business, results of operations and financial condition.

Moreover, it is difficult to predict the ultimate impact of COVID-19 on our business, operations and financial results, which continues to remain 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, emergence of new variants and ongoing availability of treatments and vaccines;

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

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

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.

We may also be liable to our clients for disruption in service resulting from such damage or destruction.

While we currently have commercial liability insurance, our insurance coverage may not be sufficient.

Furthermore, we may be unable to secure such insurance coverage at premiums acceptable to us in the future or at all.

Prolonged disruption of our services would also entitle our clients to terminate their contracts with us.

Any of the above factors may adversely affect our business, results of operations, financial condition and cash flows.

Risks Related to the International Nature of Our Business

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.

If these labor laws become applicable to our employees, it may become difficult for us to maintain flexible human resource policies and attract and employ the numbers of sufficiently qualified candidates that we need or discharge employees for business or operational reasons, and our compensation expenses may increase significantly.

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.

It still remains unclear whether the interpretation set out in the pronouncement has retrospective application.

If applied retrospectively, the interpretation may result in a significant increase in contributions payable by the Company for past periods for certain of its India-based employees and could have a material adverse effect on our results of operations, financial condition and cash flows.

Further, in September 2020, the Indian Parliament passed various consolidating labor codes, including the Code on Social Security, 2020 (the “Indian Social Security Code”) which aims to rationalize labor laws.

The Indian Social Security Code has implications on defined social security contribution plans, provision of certain benefits or facilities to employees at employer’s costs and post-retirement benefits.

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.

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.

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

and Indian transfer pricing regulations, as well as regulations applicable in other countries in which we operate, require that any international transaction involving associated enterprises be at an arm’s-length price.

Transactions among the Company’s subsidiaries and the Company may be required to satisfy such requirements.

Accordingly, the Company determines the pricing among its associated enterprises on the basis of detailed functional and economic analysis involving benchmarking against transactions among entities that are not under common control.

The tax authorities have jurisdiction to review this arrangement and in the event that they determine that the transfer price applied was not appropriate, the Company may incur increased tax liability, including accrued interest and penalties, which would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows.

The Company is currently involved in disputes with the Indian tax authorities over the application of some of its transfer pricing policies for past years.

See Note 21 - Income Taxes and Note 25 - Commitments and Contingencies to our consolidated financial statements for details.

We may choose to expand operations to additional countries and may not be successful in maintaining our current profit margins in our new locations due to factors beyond our control.

We have offices and operations in various countries around the world and provide services to customers globally.

We continually evaluate additional locations outside our current operating geographies in which to invest in operations centers, in order to maintain an appropriate cost structure for our clients’ needs.

In recent years we have opened new operations centers in countries outside of the United States.

We cannot predict the extent of government support, availability of qualified workers, or monetary and economic conditions in other countries.

Additionally, we may expand into less developed countries that have less political, social or economic stability and less developed infrastructure and legal systems.

Although some of these factors will influence our decision to establish operations in another country, there are inherent risks beyond our control, including exposure to currency fluctuations, political uncertainties, foreign exchange restrictions and foreign regulatory restrictions.

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.

This may affect our relationships with our clients.

One or more of these factors or other factors relating to expanded international operations could result in increased operating expenses and make it more difficult for us to manage our costs and operations, which could harm our business and negatively impact our operating results and cash flows.

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.

We are subject to income taxes in the United States and other foreign jurisdictions.

Our tax expense and cash tax liability in the future could be adversely affected by various factors, including, but not limited to, changes in tax laws, regulations, accounting principles or interpretations and the potential adverse outcome of tax examinations.

Changes in the valuation of deferred tax assets and liabilities, which may result from a decline in our profitability or changes in tax rates or legislation, could have a material adverse effect on our tax expense.

Certain operations centers in India, which were established in Special Economic Zones (“SEZs”), are eligible for a 100% income tax exemption for the first five years of operations and a 50% exemption for a period of five years thereafter.

In 2019, the government of India introduced a new tax regime for certain Indian companies by enacting the Taxation Laws (Amendment) Act, 2019.

The new tax regime is optional and provides for a lower tax rate for Indian companies, subject to agreeing to certain conditions, which, among other things, include not taking advantage of benefits from any tax holidays associated with SEZs and certain other tax incentives.

Once a company has opted in to the new tax regime, it may not in the future opt out.

During 2019 and 2020, our Indian subsidiaries opted into this new tax regime and accordingly gave-up the tax exemption associated with SEZs that were used prior to opting in.

This decision is based on a number of current assumptions and financial projections.

If such assumptions and financial projections are not correct, our election to opt in to the new tax regime may materially increase our effective income tax rate and decrease our earnings per share.

Similarly, if alternative minimum taxes are imposed by certain jurisdictions on otherwise exempt income, this may result in increases to our tax expense in future years.

We also benefit from a corporate tax holiday in the Philippines for our operations centers established there over the last several years.

The tax holiday already expired for few of our centers and will expire in the future for the other centers, which may lead to an increase in our overall tax rate.

We anticipate establishing additional operations centers in PEZA or other tax advantaged locations in the future.

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

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.

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.

Furthermore, we also strive to optimize the tax and financial efficiencies of the group structure.

As a result, we may carry out certain re-organizations under the tax laws of various jurisdictions in which we operate and take certain positions to qualify for tax neutrality for such internal re-organization.

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.

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.

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

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

The transfer pricing regulations in the countries we operate in require that controlled intercompany transactions be at arm’s-length.

Accordingly, the Company determines and documents pricing for controlled intercompany transactions based on an economic analysis as prescribed in the respective regulations.

The tax authorities have jurisdiction to review our transfer pricing.

If our transfer pricing is challenged by the authorities, they could assess additional tax, interest and penalties, thereby impacting our profitability and cash flows.

Our financial condition could be negatively affected if governments in the countries we operate in introduces new unfavorable tax legislation.

We are subject to taxes in the countries we operate in.

Our future tax liabilities could be adversely affected by any new unfavorable tax legislative changes in the countries we operate in.

We continuously monitor such changes to assess and quantify the potential impacts on our consolidated financial statements.

We currently benefit from corporate tax holidays in our qualified Philippines Economic Zone Authority operations centers in the Philippines.

Our ability to utilize these tax holidays could be adversely affected by any new unfavorable tax legislative changes.

We continuously monitor such changes to assess and quantify the potential impacts on our consolidated financial statements.

We face risks related to repatriating our earnings from outside of the United States.

We earn a significant amount of our earnings outside of the United States.

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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, U.K pound sterling versus the U.S.

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

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

Although we report our operating results in U.S.

We report our operating results in U.S.

dollars, a portion of our revenues and expenses are denominated in currencies other than the U.S.

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dollars at exchange rates in effect during or at the end of each reporting period.

The exchange rates among the Indian rupee, Philippine peso and other currencies in which we incur costs or receive revenues and the U.S.

The exchange rates among the Indian rupee, the Philippine peso, the U.K pound sterling and other currencies in which we incur costs or earn revenues and the U.S.

dollar have changed substantially in recent years and may fluctuate substantially in the future.

See Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.” Additionally, because a majority of our employees are based in India and the Philippines and paid in Indian rupees or Philippine peso while our revenues are primarily reported in U.S.

See Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.” Additionally, because a majority of our employees are based in India and the Philippines and paid in Indian rupee or Philippine peso, while our revenues are primarily reported in U.S.

dollars and U.K.

pounds sterling, our employee costs as a percentage of revenues may increase or decrease significantly if the exchange rates among the Indian rupee, Philippine peso and the U.S.

pound sterling, our employee costs as a percentage of revenues may increase or decrease significantly if the exchange rates among the Indian rupee, the Philippine peso, the U.K pound sterling and the U.S.

dollar fluctuate significantly.

Our results of operations could be adversely affected over time by certain movements in exchange rates, particularly if the Indian rupee or other currencies in which we incur expenses or receive revenues, change substantially against the U.S.

In addition, Russia-Ukraine military conflict coupled with chronic inflation pressures, high interest rates and the lingering consequences of COVID-19 has led the International Monetary Fund to downgrade its outlook for the world economy for 2023.

This has led to and may continue to lead to uncertainty over global economic conditions and unpredictable fluctuations in foreign currency exchange rates, and in particular, has impacted and may continue to impact the Indian rupee, the Philippine peso, the U.K pound sterling and other currencies in which we incur expenses.

Although we take steps to hedge a substantial portion of our Indian rupee/U.S.

dollar, U.K pounds sterling/U.S.

dollar, U.K pound sterling/U.S.

dollar and Philippine peso/U.S.

dollar foreign currency exposures, there is no assurance that our hedging strategy will be successful or that the hedging markets will have sufficient liquidity or depth to allow us to implement our hedging strategy in a cost-effective manner.

Any failure by our hedging counterparties to meet their contractual obligations could materially and adversely affect our profitability.

We are subject to legal restrictions on hedging activities as well as the convertibility of currencies in India.

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

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.

pound sterling as compared to the U.S.

dollar and causing adverse impacts to our U.K.

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.

related to Brexit may adversely affect our financial results, operations and cash flows.

Restrictions on visas and work permits may affect our ability to compete for and provide services to clients in the United States and other jurisdictions, which could make it more difficult to staff engagements and could increase our costs, which could have an adverse effect on our net income.

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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, 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.

Our primary operating subsidiaries are organized outside the United States and some of our executive officers may reside outside of the United States.

A substantial portion of our assets are located in India and the Philippines.

As a result, you may be unable to effect service of process upon our affiliates who reside in India and the Philippines outside their jurisdiction of residence.

A substantial portion of our assets are located in India.

As a result, you may be unable to effect service of process upon our affiliates who reside in India outside their jurisdiction of residence.

In addition, you may be unable to enforce against these persons outside the jurisdiction of their residence judgments obtained in courts of the United States, including judgments predicated solely upon the federal securities laws of the United States.

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

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.

Our credit facility has a maturity date of November 21, 2022 and is voluntarily payable from time to time without premium or penalty.

We are party to a credit agreement for our bank debt facility that contains covenants, among other things, requiring maintenance of certain financial ratios (being, an interest coverage ratio and a total net leverage ratio) and restricting our ability to incur additional indebtedness, create liens, make certain investments and acquisitions, pay dividends, repurchase common shares and make other restricted payments or undertake certain fundamental changes (including, consolidations, liquidations or disposal of certain assets or subsidiaries).

If we breach any of these covenants and do not cure such breach within the applicable cure periods or obtain a waiver from the lenders, the outstanding indebtedness (and any other indebtedness with cross-default provisions) could be declared immediately due and payable and such acceleration could adversely affect our liquidity and

financial condition.

The credit agreement provides for a $400 million revolving credit facility including a letter of credit sub-facility and is guaranteed by certain subsidiaries.

Our revolving credit facility has a maturity date no later than April 18, 2027 and is voluntarily payable from time to time without premium or penalty.

See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Liquidity and Capital Resources-Financing Arrangements (Debt Facility and Notes).”

Our cash flow from operations provides the primary source of funds for our debt service payments.

If our cash flow from operations declines, we may not be able to service or refinance our current debt which could adversely affect our business and financial condition.

In addition, we have limited ability to increase our borrowings under our existing credit agreement.

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.

Given the uncertainty over global economic conditions and regulatory, competitive or other factors outside of our control, including but not limited to the Russia-Ukraine military conflict and COVID-19, there can be no assurance that business activity will be maintained at our expected level in order to generate the anticipated cash flows from operations.

If our cash flow from operations declines, we may not be able to service or refinance our current debt or obtain financing on favorable terms to us or at all, which could adversely affect our business and financial condition.

A substantial portion of our floating rate indebtedness is exposed to interest rate fluctuations as only a portion is hedged through interest rate swaps.

Accordingly, any adverse change in interest rates due to market conditions or otherwise could increase our cost of funding substantially.

Risks Related to Our Common Stock

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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.

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

Furthermore, we believe our stock price should reflect future growth and profitability expectations and, if we fail to meet these expectations, this may have a materially adverse effect on the trading price of our common stock.

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For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock.

Any future determination to pay dividends will be at the discretion of our board of directors and will be dependent on then-existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, including restrictions under our credit agreement, business prospects and other factors that our board of directors considers relevant.

prospects and other factors that our board of directors considers relevant.

Furthermore, because we are also a holding company, any dividend payments would also depend on the cash flow from our subsidiaries.

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Risks Related to Our Industry

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.

We have based our strategy of future growth on certain assumptions regarding our industry and future developments in the market for outsourcing services.

For example, we believe that there will continue to be changes in product and service requirements, and investments in the products offered by our clients will continue to increase.

However, the trend to outsource business processes may not continue and could reverse.

Offshore outsourcing is a politically sensitive topic in the United States and elsewhere, and many organizations and public figures have publicly expressed concern about a perceived association between offshore outsourcing providers and the loss of jobs in the United States and elsewhere.

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, anti-outsourcing legislation or otherwise.

Current or prospective clients may elect to perform such services themselves or may be discouraged from transferring these services to offshore providers to avoid any negative perception that may be associated with using an offshore provider.

Any slowdown or reversal of existing industry trends would harm our ability to compete effectively with competitors that operate out of facilities located in the United States and elsewhere.

A variety of U.S.

federal and state legislation has been proposed that, if enacted, could restrict or discourage U.S.

companies from outsourcing their services to companies with facilities outside the United States.

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, 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.

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.

Measures aimed at limiting or restricting outsourcing by U.S.

companies have been put forward by the U.S.

Congress and in state legislatures to address these concerns.

If any such measure is enacted, our ability to do business with U.S.

clients through our non-U.S.

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

In other countries, such as the United Kingdom, there has also been some negative publicity and concern expressed regarding the possible effect of job losses caused by outsourcing.

Legislation enacted in the United Kingdom as well as other European jurisdictions provides that if a company transfers or outsources its business or a part of its business to a transferee or a service provider, the employees who were employed in such business are entitled to become employed by the transferee or service provider on the same terms and conditions as they had been employed before the transfer.

The dismissal of such employees as a result of such transfer of business is deemed unfair dismissal and entitles the employees to compensation.

As a result, we may become liable for redundancy payments to the employees of our clients who outsource business to us from those jurisdictions.

We are generally indemnified in our existing contracts with clients in those jurisdictions to the extent we incur losses or additional costs due to the application of this legislation to us, and we intend to obtain indemnification in future contracts with clients.

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 increased unemployment in the regions in which they operate as a result of COVID-19.

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

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

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.

The GDPR presents numerous privacy-related changes for companies operating in the EU, including rights guaranteed to data subjects, requirements for data portability for EU consumers, data breach notification requirements and significant fines for noncompliance.

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.

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.

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.

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.

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.

Our industry is characterized by rapid technological change, evolving industry standards, changing client preferences and new product introductions.

The success of our business depends, in part, upon our ability to develop services that keep pace with changes in the industry.

We may not be successful in addressing these changes on a timely basis, or at all, or successfully marketing any changes that we implement.

In addition, products or technologies developed by others may render our services uncompetitive or obsolete.

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.

B) General Risk Factors

affiliates could be negatively impacted.

General Risk Factors

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.

The domestic and international capital and credit markets have been experiencing volatility and disruption for the past several years, resulting in uncertainty in the financial markets in general, which includes companies in the banking, financial services, healthcare and insurance industries to which we provide services, and which industries were further disrupted by COVID-19.

Although there has been recent improvement in general economic conditions in these industries, there can be no assurance that the economic environment will continue to improve.

Our business largely depends on continued demand for our services from clients and potential clients in these industries.

If there is a significant consolidation in these industries or a decrease in growth due to any adverse development or consolidation in other industry verticals on which we focus, such events could materially reduce the demand for our services and negatively affect our revenue and profitability.

In addition, we currently earn, and are likely to continue to earn, a significant portion of our revenues from clients located in the United States.

Weakness in the U.S.

labor market could also adversely affect the demand for our services.

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.

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.

The domestic and international capital and credit markets have in the past, and may in the future, experience volatility and disruption and uncertainty from geopolitical tensions, inflation, economic tensions, changes in legislation in the various jurisdictions in which we and our clients operate, changes in global trade policies, or global health emergencies or pandemics, such as COVID-19, which may affect our clients, us directly, or our client industries, and could result in changing demand patterns.

Our business largely depends on continued demand for our services.

Weakness in the global labor market could also adversely affect the demand for our services and impact our ability to recruit, train and retain qualified employees, resulting in a significant negative impact on our business and results of operations.

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.

Our business depends on our ability to successfully obtain payment from our clients for work performed.

We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles.

We maintain allowances against receivables and unbilled services.

Actual losses on client balances could differ from those that we currently anticipate and, as a result, we might need to adjust our allowances.

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, 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.

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

Our business could be negatively affected if we incur legal liability, including with respect to our contractual obligations, in connection with providing our solutions and services.

Our business could be negatively affected if we incur financial penalties or legal liability, including with respect to our contractual obligations, in connection with providing our solutions and services.

Most of our agreements with clients contain service level and performance requirements, including requirements relating to the quality of our services.

If we fail to meet our contractual obligations or otherwise breach obligations to our clients or vendors, we could be subject to legal liability.

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In addition, with respect to our client contracts, the contracting practices of our competitors may cause contract terms and conditions that are unfavorable to us to become standard in the marketplace.

If we cannot or do not perform our obligations with clients or vendors, we could face legal liability and our contracts might not always protect us adequately through limitations on the scope and/or amount of our potential liability.

If we cannot, or do not, meet our contractual obligations to provide solutions and services to clients, and if our exposure is not adequately limited through the enforceable terms of our agreements, we might face significant legal liability and our business could be adversely affected.

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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.

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.

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.

Any deterioration of the credit and capital markets in the United States, Europe, 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.

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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.

Changing laws, regulations and standards relating to accounting, corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”), other SEC regulations, rules and regulations of the Consumer Financial Protection Bureau, Public Company Accounting Oversight Board, and the NASDAQ Global Select Market, and generally accepted accounting principles issued by FASB can create uncertainty for companies like ours.

Changing laws, regulations and standards relating to accounting, corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”), other SEC regulations, rules and regulations of the Consumer Financial Protection Bureau, Public Company Accounting Oversight Board, and the NASDAQ Global Select Market, and generally accepted accounting principles issued by Financial Accounting Standard Board can create uncertainty for companies like ours.

These laws, regulations and standards may lack specificity and are subject to varying interpretations.

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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.

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.

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.

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.

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.

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, other acts of violence or war, protests, riots and labor unrest.

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.

We may also be liable to our clients for disruption in service resulting from such damage or destruction.

While we currently have commercial liability insurance, our insurance coverage may not be sufficient.

Furthermore, we may be unable to secure such insurance coverage at premiums acceptable to us in the future or at all.

Prolonged disruption of our services would also entitle our clients to terminate their contracts with us.

Any of the above factors may adversely affect our business, results of operations, financial condition and cash flows.

Our environmental, social and governance commitments and disclosures may expose us to reputational risks and legal liability.

Our brand and reputation are also associated with our public commitments to various corporate environmental, social and governance (“ESG”) initiatives, including our goals relating to sustainability, inclusion and diversity.

Our disclosures on these matters and any failure or perceived failure to achieve or accurately report on our commitments, could harm our reputation.

In addition, positions we take or do not take on social issues may be unpopular with some of our employees, our clients or potential clients, governments or advocacy groups, which may impact our ability to attract or retain employees or the demand for our services.

We also may choose not to conduct business with potential clients or discontinue or not expand business with existing clients due to these positions.

Governmental bodies, investors, clients and businesses are increasingly focused on ESG issues, which has resulted and may in the future continue to result in the enactment of new laws and regulations, reporting requirements and changing buying practices.

Increasing focus on ESG matters has resulted in, and is expected to continue to result in, the adoption of legal and regulatory requirements designed to mitigate the effects of climate change on the environment, human rights and supply chain-related disclosures.

If new laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet such obligations.

In addition, our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or may not meet the expectations of investors or other stakeholders.

Our ability to achieve our ESG commitments, including our goals relating to sustainability, inclusion and diversity, is subject to numerous risks, many of which are outside of our control.

In addition, standards for tracking and reporting on ESG matters have not been harmonized and continue to evolve.

Methodologies for reporting ESG data may be updated and previously reported ESG data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances.

Our processes and controls for reporting ESG matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by the SEC and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

Unresolved Staff Comments

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