What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-29 compared with 2024-10-30 · 181 added, 282 removed, 138 unchanged (77% of the section changed)

12 unchanged sentences

• our ability to maintain and grow client demand for our services and solutions, including anticipating and incorporating the latest technologies, for instance, artificial intelligence (“AI”), including generative AI into our offerings;

• use of AI technology presents competitive, operational, reputational and legal risks, and our use of AI technology may not be successful ;

• impact on client demand by the selling cycle and terms of our client contracts;

• our ability to successfully transition to and implement new organization structure;

• fluctuations in our earnings;

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• cyber security incidents, data breaches, or other unauthorized disclosure of sensitive or confidential client and employee data;

• reliance on third parties to deliver services and infrastructure for client critical services;

• reliance on third parties to deliver services and infrastructure for client critical services, and on third party data use rights for certain of our offerings;

• employee wage increases;

• failure to protect our intellectual property;

• our dependence on a limited number of clients in a limited number of industries and our ability to withstand the loss of a significant client;

• our ability to grow our business or effectively manage growth and international operations;

• our dependence on a limited number of clients and our ability to withstand the loss of a significant client;

• our ability to manage rapid infrastructure and personnel growth across countries;

• our ability to successfully consummate or integrate strategic acquisitions including the impact from the impairment of goodwill and other intangible assets, if any;

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• increasing competition in our industry;

• telecommunications or technology disruptions or breaches, natural or other disasters, medical epidemics or pandemics, such as COVID-19, or acts of violence or war;

• operational and information security failures arising as a result of remote work solutions adopted due to COVID-19;

• adverse outcome of our disputes with the tax authorities in the geographies where we operate;

• the introduction of new or unfavorable tax legislation, including legal restrictions on repatriation of funds held abroad;

• exposure to currency exchange rate fluctuations in the various currencies in which we do business including the potential effects of Russian-Ukraine and Israel-Hamas conflicts, rising inflation, high interest rates and economic recessionary trends on currency exchange rates;

• restrictions on immigration;

• telecommunications or technology disruptions or breaches, natural or other disasters, medical epidemics or pandemics, or acts of violence or war;

• challenges by applicable tax authorities to transfer pricing determinations or the introduction of new or unfavorable tax legislation, tariffs, including legal restrictions on repatriation of funds held abroad;

• exposure to currency exchange rate fluctuations in the various currencies in which we do business including rising inflation, high interest rates and economic recessionary trends on currency exchange rates;

• restrictions on immigration and work permits;

• regulatory, legislative and judicial developments, including our ability to adhere to regulations or accreditation or licensing standards that govern our business;

• our ability to service debt or obtain additional financing on favorable terms.

Inception of interest rate swaps to hedge interest rate risk;

• our ability to service debt or obtain additional financing on competitive terms, or exposure to interest rate fluctuations that are not fully hedged through interest rate swaps;

• negative public reaction in the U.S.

or elsewhere to offshore outsourcing;

• effects of political and economic conditions globally, particularly in the geographies where we operate;

• effects of political and economic conditions globally including newly imposed U.S tariffs and any additional responsive non-U.S tariffs, particularly in the geographies where we operate;

• our ability to make accurate estimates and assumptions in connection with the preparation of our consolidated financial statements;

• credit risk fluctuations in the market values of our investment and derivatives portfolios;

• our ability to meet our sustainability-related goals and targets.

• our ability to execute our sustainability-related initiatives.

These and other factors are more fully discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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Executive Overview

We are a leading data analytics and digital operations and solutions company.

We partner with clients using a data and AI-led approach to reinvent business models, drive better business outcomes and unlock growth with speed.

We harness the power of data, analytics, AI, and deep industry knowledge to transform operations for the world’s leading corporations in industries including insurance, healthcare, banking and financial services, media and retail, among others.

We deliver data analytics and digital operations and solutions to our clients, driving enterprise-scale business transformation initiatives that leverage our deep expertise in advanced analytics, AI, generative AI and cloud technology.

We manage and report financial information through our four strategic business units:

Insurance, Healthcare, Analytics and Emerging Business, which reflects how management reviews financial information and makes operating decisions.

Our reportable segments are as follows:

• Healthcare,

• Analytics, and

• Emerging Business

We are a global data and artificial intelligence (“AI”) company that offers services and solutions to reinvent client business models, drive better outcomes and unlock growth with speed.

We harness the power of data, AI, and deep industry knowledge to transform businesses, including the world’s leading corporations in industries including insurance, healthcare, life sciences, banking and financial services, media and retail, communications and media, and energy and infrastructure, among others.

Our global delivery network, which includes highly trained industry and process specialists across the United States, the United Kingdom, Latin America, South Africa, Europe and Asia (primarily India and the Philippines), is a key asset.

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

On August 1, 2024, we completed the acquisition of Incandescent Technologies, Inc.

(“ITI Data”), a data management solutions firm that works with the global banks, financial services and healthcare companies.

It delivers enterprise business solutions for clients processing significant data volumes with complex data management requirements.

The acquisition strengthens our ability to deliver reliable, data-driven insights to our clients and ultimately drive greater value and innovation across their operations.

For the three months ended September 30, 2024, we generated revenues of $472.1 million compared to revenues of $411.0 million for the three months ended September 30, 2023, an increase of $61.1 million, or 14.9%.

For the nine months ended September 30, 2024, we generated revenues of $1,356.9 million compared to revenues of $1,216.6 million for the nine months ended September 30, 2023, an increase of $140.3 million, or 11.5%.

We serve cli ents mainly in the United States and the United Kingdom, with these two regions generating 82.2% and 12.0%, respectively, of our total revenues for the three months ended September 30, 2024, and 83.5% and 11.3%, respectively, of our total revenues for the three months ended September 30, 2023.

For the nine months ended September 30, 2024, these two regions generated 82.6% and 11.8%, respectively, of our total revenues and 84.1% and 10.8%, respectively, of our total revenues for the nine months ended September 30, 2023.

For the three months ended September 30, 2024 and 2023, our total revenues from our top ten clients accounted for 34.2% and 34.6% of our total revenues, respectively.

For the nine months ended September 30, 2024 and 2023, our total revenues from our top ten clients accounted for 33.2% and 34.2% of our total revenues, respectively.

In the first quarter of 2025, we implemented operational and structural changes to align with how our management reviews financial information and makes operating decisions.

The new operating model is comprised of Industry Market Units (“IMUs”) to focus on delivering higher value to clients leveraging our full suite of capabilities;

and Strategic Growth Units to focus on rapidly advancing our operational, analytics, data engineering, and AI capabilities specific to our chosen industries.

Our IMUs will focus on managing customer relationships and delivering the “One EXL” value proposition to clients, maintain a unified go-to-market approach and be integrally responsible for growth, profitability and client satisfaction.

Accordingly, our new reportable segments, aligned to our IMUs, are as follows:

• Healthcare and Life Sciences,

• Banking, Capital Markets and Diversified Industries,

• International Growth Markets

The primary changes in our new reportable segments reflect 1) the integration of our former Analytics reportable segment as a core capability within each of our IMUs, ensuring alignment with the specialized needs of our clients across IMUs, 2) the reorganization of our former Emerging Business reportable segment into a Banking, Capital Markets and Diversified Industries reportable segment, excluding Life Sciences, which is now a part of the new Healthcare and Life Sciences reportable segment, and 3) the formation of International Growth Markets as a separate business unit to represent all our service and solutions offerings to clients in the United Kingdom, Europe, Middle East, Asia-Pacific and South Africa geographies across all industry verticals.

The International Growth Markets business unit will help strategically expand our footprint in markets outside of North America and drive focus on offerings and expansion in those markets in new and existing clients.

In addition, our revenues by service type are now presented as data and AI-led and digital operations services.

Revenues attributable to geographical regions are now presented as North America (including the United States, Canada and Mexico), U.K.

& Europe, and Rest of World.

We have recast our segment disclosures for all prior periods presented to conform to the way we internally manage and monitor segment level performance of our business.

For the three months ended March 31, 2025, we generated revenues of $501.0 million compared to revenues of $436.5 million for the three months ended March 31, 2024, an increase of $64.5 million, or 14.8%.

We serve clients mainly in North America and U.K.

& Europe, with these two regions generating 82.9% and 15.1%, respectively, of our total revenues for the three months ended March 31, 2025 and 83.0% and 15.0%, respectively, of our total revenues for the three months ended March 31, 2024.

For the three months ended March 31, 2025 and 2024, our total revenues from our top ten clients accounted for 33.7% and 33.3% of our total revenues, respectively.

Although we continue to develop relationships with new clients to diversify our client base, we believe that the loss of any of our top ten clients could have a material adverse effect on our financial performance.

We provide data analytics and digital operations and solutions to our clients.

We market our services to our existing and prospective clients through our sales and client management teams, which are aligned by key industry verticals and cross-industry domains such as finance and accounting.

Our sales and client management teams operate primarily from the United States, Europe and Australia.

Digital Operations and Solutions:

We provide our clients with a range of data and AI-led digital operations and solutions from our Insurance, Healthcare and Emerging Business strategic business units, which are focused on solving complex industry challenges, which include:

a) multi-modal data ingestion using AI, and converting unstructured content into curated and usable data, b) real-time and comprehensive data insights including end-to-end data management and building a 360-degree view of our clients’ customers, c) omni-channel and frictionless customer experience including self-service, conversational AI and smart agent assist, d) intelligent and AI-powered redesign and automation of transaction processing and e) automated quality, compliance and audit.

Some of our clients’ operations that we have transformed using the above solutions include underwriting operations, claims processing, accounts payables processing, utilization management, member and provider contact center services and collections and accounts receivable.

We either manage and digitally transform these operations for our clients by deploying our solutions through a software-as-a-service model via our partners’ cloud network or a client’s on-cloud deployment model, to digitally transform their retained operations.

For a portion of our digital operations and solutions, we hire and train employees to work at our operations centers on the relevant business operations, implement a process migration to these operations centers and then provide services either to the client or directly to the client’s customers.

Each client contract has different terms based on the scope, deliverables and complexity of the engagement.

We also provide consulting services related to digital operations and solutions that include industry-specific digital transformational services as well as cross-industry finance and accounting services as part of the Emerging Business strategic business unit.

We provide our services under contracts with our clients, which typically have terms of three or more years, with some being contracts with no end dates.

These contracts provide us with a relatively predictable revenue base for a substantial portion of our digital operations and solutions business.

However, our clients can typically terminate these contracts with or without cause and with short notice periods.

We have a long selling cycle for our services and the budget and approval processes of prospective clients make it difficult to predict the timing of entering into definitive agreements with new clients.

Similarly, new license sales and implementation projects for our technology service platforms and other software-based services have a long selling cycle, however ongoing annual maintenance and support contracts for existing arrangements provide us with a relatively predictable revenue base.

We charge for our services using various pricing models like time-and-material pricing, full-time-equivalent pricing, transaction-based pricing, outcome-based pricing, subscription-based pricing and other alternative pricing models.

based pricing arrangements are examples of non-linear pricing models where clients link revenues from platforms and solutions and the services we provide to usage or savings rather than the efforts deployed to provide these services.

We provide data and AI-led and digital operations services to our clients.

We market and sell our solutions and services to existing and prospective clients through our sales and client management teams, which are aligned by our IMUs.

Our sales and client management teams operate primarily from the United States, India, the United Kingdom, Ireland and Australia.

Data and AI-led:

Our data and AI-led revenue comes from AI-powered solutions and services in which we embed data and AI into client workflows.

Leveraging our depth of domain knowledge, analytics, data management and digital engineering expertise, our industry-specific offerings are designed to help clients accelerate growth, improve customer experience, enhance efficiency, and deliver lasting competitive advantages.

As clients evolve from digital operations to data and AI-powered operations and outcomes, these capabilities represent the next stage of enterprise transformation.

Digital operations:

Our digital operations revenue comes from our industry-specific solutions and services that help clients run essential business functions with greater speed, accuracy, and efficiency.

We apply deep industry expertise and tailored technology—whether our proprietary technology or client technology—to solve complex challenges and drive measurable outcomes.

These digital operations deployments form the foundation for future client transformation opportunities to infuse AI into client workflows and unlock even greater value.

Our industry market units, which provide data and AI-led and digital operations services, are described below:

We combine our cloud-first digital insurance software solutions and industry expertise with generative AI, machine learning, advanced analytics, and platforms, to enable insurance businesses to transform operations and embed artificial intelligence into workflows.

Our data and AI-powered operations and services span across the insurance value chain.

We provide services to insurers in the areas of property and casualty, life, disability, annuity, and retirement services.

Additionally, we serve insurance brokers, reinsurers, and insurtech companies.

Our offerings include digital marketing, new business acquisition, actuarial, underwriting support, claims processing, premium and benefit administration, policy servicing, premium audit, surveys, billing and collection, commercial and residential surveys, finance and accounting and customer service..

This includes our Insurance Large Language Model

(“LLM”), a specialized generative AI platform for claims, underwriting and subrogation, developed leveraging our deep experience and proprietary data in the insurance space.

Healthcare and Life Sciences:

We work with clients across the healthcare ecosystem to meet their current and dynamic business challenges.

We deliver integrated solutions and services at the intersection of domain, data, and AI to enable AI transformation for healthcare payers and providers, pharmacy benefit managers (“PBMs”), and life sciences organizations.

Through the provision of a range of data and AI-powered operations and solutions, we focus on streamlining healthcare administration processes to enhance operational efficiency, aimed at reducing costs for both providers and consumers and improving consumer experience.

We leverage innovative technologies to provide offerings intended to simplify complex workflows, minimize bureaucratic hurdles, and improve overall effectiveness.

For healthcare payers, we offer pre and post-pay auditing services, payment analytics, payment integrity, a care management platform and services and patient navigation.

For healthcare providers, we offer revenue cycle management, digital transformation, data and analytics and call center modernization.

For PBMs, we provide digital transformation, data and analytics and call center modernization.

Within the life sciences space, we provide finance and accounting operations and data analytics.

Across our segments, we leverage AI, analytics, and cloud-based solutions to enhance value-based care, optimize claims, and ensure regulatory compliance.

Banking, Capital Markets, and Diversified Industries:

Our Banking and Capital Markets and Diversified Industries group delivers comprehensive solutions across retail and commercial banking, credit card services, payment services, fintech, banking infrastructure services, capital markets, mortgage services, utilities, retail and consumer packaged goods, media, communications and entertainment, travel and leisure, transportation and logistics, and other business services industries.

By integrating domain expertise with AI-driven data management, we empower financial institutions to innovate, enhance operational agility, and navigate evolving market demands.

Our tailored services span retail banking operations such as digital lending solutions that enhance underwriting and compliance, sales and demand generation, omni-channel marketing, digital onboarding, know your customer (“KYC”)/anti-money laundering (“AML”) compliance, and collections;

credit card services including customer acquisition, fraud management, and payment processing;

and payment services structured for secure, multi-currency transaction processing.

Additionally, we support fintechs with AI-driven hyper-personalization and analytics, while our capital markets solutions cover investment banking, asset management, custodian banking, and fund administration.

Mortgage services include loan origination, account servicing, default management, and title settlement services.

Our industry-leading AI and automation-driven service offerings drive efficiency and innovation across financial services.

Our enterprise services and solutions include domain-specific operations, finance and accounting, customer experience management, back-office operations, and revenue enhancement, such as pricing and billing, enabling our clients to deliver superior economic performance.

For example, in the retail and consumer packaged goods sectors, we provide supply chain management services and AI-led advanced analytical services including merchandising, pricing, and demand forecasting and for our clients in the utilities sector, we offer AI-enabled operations and solutions related to end-to-end customer life cycle management, including onboarding and terminations, engineering field services, customer service, billing, and debt management and collections.

International Growth Markets:

Our International Growth Markets (“IGM”) unit is focused on extending our global reach in growth markets outside North America.

This provides us with opportunities to leverage our investments, experience, and expertise from the North America market to expand our global client base, drive further growth, and bring us closer to our customers across the world.

IGM consists of dedicated teams servicing clients in the banking and capital markets, insurance, life sciences, energy and infrastructure, retail, consumer goods, and travel industries in growth markets.

This unit is instrumental in localizing our global capabilities in these industry segments to align with the local regulatory, cultural, linguistic and economic needs.

Across all regions in which we operate, we combine deep domain experience with our data and AI expertise to help clients innovate, enhance operational agility, adapt to changing market demands, and drive better business outcomes.

Outcome-based pricing arrangements is an example of a non-linear pricing model where our revenues from platforms and solutions and the services we provide are compensated based on our clients’ usage or savings rather than the efforts we deploy to provide these services.

We continue to observe a shift in the industry pricing models toward transaction-based pricing, outcome-based pricing and other alternative pricing models.

We believe this trend will continue and we use such alternative pricing models with some of our current clients and are seeking to move certain other clients from a full-time-equivalent pricing model to a transaction-based or other alternative pricing model.

We believe this trend will continue and we use such alternative pricing models with some of our current clients and are seeking to move certain other

clients from a full-time-equivalent pricing model to a transaction-based or other alternative pricing model.

These alternative pricing models place the focus on operating efficiency in order to maintain or improve our gross margins.

We have also observed that prospective larger clients are entering into multi-vendor relationships with regard to their digital operations and solutions needs to seek more favorable contract terms and diversification of the risk of concentration on a few vendors.

We believe that the trend toward multi-vendor relationships will continue.

A multi-vendor relationship allows a client to seek more favorable pricing and other contract terms from each vendor, which can result in significantly reduced gross margins from the provision of services to such client for each vendor.

To the extent our large clients expand their use of multi-vendor relationships and are able to extract more favorable contract terms from other vendors, our gross margins and revenues may be reduced with regard to such clients if we are required to modify the terms of our relationships with such clients to meet competition.

Our analytics services aim to drive better business outcomes for our clients by unlocking deep insights from data and creating data and AI-led solutions across all parts of our clients’ business.

We provide care optimization and reimbursement optimization services for our clients through our healthcare analytics solutions and services.

We also offer integrated solutions to help our clients in cost containment by leveraging technology platforms, customizable and configurable analytics and expertise in healthcare reimbursements to help clients enhance their claim payment accuracy.

Our Analytics teams deliver predictive and prescriptive analytics in the areas of customer acquisition and life cycle management, risk underwriting and pricing, operational effectiveness, credit and operational risk monitoring and governance, regulatory reporting and data management.

We enhance, modernize and enrich structured and unstructured data and use a spectrum of advanced analytical tools and techniques, including our in-house and third-party AI, generative AI, and ML capabilities and proprietary solutions to create insights, improve decision making for our clients and address a range of complex industry-wide priorities.

We actively cross-sell and, where appropriate, integrate our analytics services with other digital operations and solutions as part of a comprehensive offering for our clients.

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

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

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

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

We anticipate that revenues from our analytics services will grow as we expand our service offerings and client base, both organically and through acquisitions.

The Organization for Economic Cooperation and Development, issued a Pillar II model for implementing a 15% global minimum tax effective January 1, 2024.

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Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates during the three and nine months ended September 30, 2024, as compared to the critical accounting policies and estimates referred in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Policies and Estimates” and Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

In the first quarter of 2025, we implemented operational and structural changes which resulted in the realignment of our reporting segments.

Refer to Note 3- Segment Information and Note 10- Goodwill and Other Intangible Assets to our unaudited consolidated financial statements for further details.

Goodwill has been re-allocated to reporting units based on the relative fair value approach.

We tested goodwill for impairment prior to the segment realignment and immediately thereafter, for events and conditions identified in accordance with the guidance in ASC Topic 350, Intangibles- Goodwill and Other .

The fair value of our reporting units was calculated using a discounted cash flow model using estimated future cash flows.

The results of our evaluation demonstrated that the fair value of each reporting unit exceeded its book value as of the date of the segment realignment.

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2025, as compared to the critical accounting policies and estimates referred in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Policies and Estimates” and Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Results of Operations

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023:

The following table summarizes our results of operations:

(dollars in millions)

Three months ended September 30, 2024 Percentage of Revenues, net Three months ended September 30, 2023 Percentage of Revenues, net Dollar Change Percentage Change

Three months ended March 31, 2025 Three months ended March 31, 2024

Percentage of Revenues, net Percentage of Revenues, net Dollar Change Percentage Change

(A) (B) (C=A-B)

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Income before earnings from equity affiliates 66.7 13.3 % 48.8 11.2 % 17.9 36.6 %

Gain/(loss) from equity-method investment — — % 0.1 — % (0.1) — %

Loss from equity-method investment (0.1) — % — — % (0.1) 289.3 %

Net income $ 66.6 13.3 % $ 48.8 11.2 % $ 17.8 36.5 %

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Due to rounding, the numbers presented in the tables included in this Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may not add up precisely to the totals provided.

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

The following table summarizes our revenues by reportable segments:

Three months ended September 30, Percentage

change Percentage of Total Revenues for the three months ended September 30,

Three months ended March 31, Percentage

change Percentage of Total Revenues for the three months ended

2025 2024 Dollar Change 2025 2024

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Insurance $ 172.0 $ 158.3 $ 13.7 8.7 % 34.3 % 36.3 %

Healthcare 30.5 26.2 4.3 16.5 % 6.5 % 6.4 %

Emerging Business 80.0 65.3 14.7 22.5 % 16.9 % 15.9 %

Analytics 204.0 183.1 20.9 11.4 % 43.2 % 44.5 %

Healthcare and Life Sciences 125.6 100.7 24.9 24.8 % 25.1 % 23.0 %

Banking, Capital Markets and Diversified Industries 117.7 103.2 14.5 14.0 % 23.5 % 23.7 %

International Growth Markets 85.7 74.3 11.4 15.3 % 17.1 % 17.0 %

Total revenues, net $ 501.0 $ 436.5 $ 64.5 14.8 % 100.0 % 100.0 %

Revenues for the three months ended September 30, 2024 were up by $61.1 million, or 14.9%, compared to the three months ended September 30, 2023, driven primarily by revenue growth from our new and existing clients in all of our reportable segments.

Revenue growth in Insurance of $21.2 million was primarily driven by expansion of business from our new and existing clients of $20.6 million and an increase in revenues of $0.6 million, mainly attributable to the appreciation of the U.K.

pound sterling and the Australian dollar against the U.S.

dollar during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Revenue growth in Healthcare of $4.3 million was primarily driven by expansion of business from our existing clients of $4.3 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Revenue growth in Emerging Business of $14.7 million was primarily driven by expansion of business from our new and existing clients of $14.2 million and an increase in revenues of $0.5 million, mainly attributable to the appreciation of the U.K.

pound sterling against the U.S.

dollar during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Revenue growth in Analytics of $20.9 million was primarily driven by higher volumes in our annuity and project-based engagements from our new and existing clients of $20.5 million, including incremental revenue from our August 2024 acquisition of ITI Data and an increase in revenues of $0.4 million, mainly attributable to the appreciation of the U.K.

pound sterling against the U.S.

dollar during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Revenues for the three months ended March 31, 2025 were up by $64.5 million, or 14.8%, compared to the three months ended March 31, 2024, driven primarily by revenue growth from our new and existing clients in all of our reportable segments.

Revenue growth in Insurance of $13.7 million was primarily driven by expansion of business from our new and existing clients, partially offset by lower volumes in our direct marketing business during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Revenue growth in Healthcare and Life Sciences of $24.9 million was primarily driven by the expansion of business from our new and existing clients and incremental revenue from our August 2024 acquisition of Incandescent Technologies, Inc.

(“ITI Data”) during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Revenue growth in Banking, Capital Markets and Diversified Industries of $14.5 million was primarily driven by expansion of business from our new and existing clients of $14.7 million and incremental revenue from our August 2024 acquisition of ITI Data.

This was partially offset by decrease in revenues of $0.2 million that was mainly attributable to depreciation of the Indian Rupee against the U.S.

dollar during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Revenue growth in International Growth Markets of $11.4 million was primarily driven by expansion of business from our new and existing clients of $12.6 million and incremental revenue from our August 2024 acquisition of ITI Data.

This was partially offset by decrease in revenues of $1.2 million that was mainly attributable to depreciation of the Indian Rupee and Australian dollar against the U.S.

dollar, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Cost of Revenues and Gross Margin:

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Cost of Revenues Gross Margin

Three months ended September 30, Dollar

Change Percentage

change Three months ended September 30, Percentage

Three months ended March 31, Dollar Change Percentage

change Three months ended March 31, Percentage

2025 2024 2025 2024

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Insurance $ 109.2 $ 104.7 $ 4.5 4.2 % 36.6 % 33.8 % 2.8 %

Healthcare 20.3 16.5 3.8 22.5 % 33.6 % 36.8 % (3.2) %

Emerging Business 47.8 37.6 10.2 27.2 % 40.2 % 42.4 % (2.2) %

Analytics 125.4 115.4 10.0 8.6 % 38.5 % 37.0 % 1.5 %

Healthcare and Life Sciences 70.5 55.0 15.5 28.1 % 43.9 % 45.3 % (1.4) %

Banking, Capital Markets and Diversified Industries 73.7 66.0 7.7 11.8 % 37.3 % 36.1 % 1.2 %

International Growth Markets 54.3 47.7 6.6 13.8 % 36.6 % 35.9 % 0.7 %

Total $ 307.7 $ 273.4 $ 34.3 12.5 % 38.6 % 37.4 % 1.2 %

Cost of revenues for the three months ended September 30, 2024 increased by $37.8 million, or 14.8% compared to the three months ended September 30, 2023.

Cost of revenues for the three months ended March 31, 2025 increased by $34.3 million, or 12.5% compared to the three months ended March 31, 2024.

The increase in cost of revenues was primarily due to increases in employee-related costs and technology costs, partially offset by foreign exchange gain, net of hedging.

Our gross margin for the three months ended September 30, 2024 was 37.8%, compared to 37.7% for the three months ended September 30, 2023, an increase of 10 basis points (“bps”).

The increase in cost of revenues in Insurance of $13.8 million for the three months ended September 30, 2024 was primarily due to increases in employee-related costs of $11.4 million on account of higher headcount and wage inflation, higher technology costs of $1.4 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model, higher facilities costs of $1.4 million and higher other operating costs of $0.6 million, partially offset by foreign exchange gain, net of hedging of $1.0 million.

Gross margin in Insurance decreased by 30 bps during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to investment in ramp-ups in certain existing clients during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

The increase in cost of revenues in Healthcare of $3.8 million for the three months ended September 30, 2024 was primarily due to increases in employee-related costs of $3.1 million on account of higher headcount and wage inflation, higher technology costs of $0.8 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model and higher other operating costs of $0.3 million, partially offset by foreign exchange gain, net of hedging of $0.4 million.

Gross margin in Healthcare decreased by 320 bps during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to investment in ramp-ups in certain existing clients during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

The increase in cost of revenues in Emerging Business of $10.2 million for the three months ended September 30, 2024 was primarily due to increases in employee-related costs of $9.0 million on account of higher headcount and wage inflation, higher technology costs of $1.0 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model and higher other operating costs of $0.7 million, partially offset by foreign exchange gain, net of hedging of $0.5 million.

Gross margin in Emerging Business decreased by 220 bps during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to investment in ramp-ups for certain new and existing clients during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

The increase in cost of revenues in Analytics of $10.0 million for the three months ended September 30, 2024 was primarily due to increases in employee-related costs of $7.3 million on account of higher headcount and wage inflation, including incremental cost related to our August 2024 acquisition of ITI Data, higher technology costs of $2.7 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model and higher other operating costs of $0.7 million, partially offset by foreign exchange gain, net of hedging of $0.7 million.

Gross margin in Analytics increased by 150 bps during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to higher revenues and operational efficiencies during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Selling, General and Administrative (“SG&A”) Expenses.

Three months ended September 30, Dollar Change Percentage

(dollars in millions)

General and administrative expenses $ 57.5 $ 52.2 $ 5.3 10.1 %

Selling and marketing expenses 37.6 31.0 6.6 21.4 %

Selling, general and administrative expenses $ 95.1 $ 83.2 $ 11.9 14.3 %

The increase in SG&A expenses of $11.9 million was primarily due to increases in employee-related costs of $9.8 million on account of higher headcount and wage inflation, including incremental cost related to our August 2024 acquisition of ITI Data, higher investments in digital and generative AI capabilities of $2.6 million, and higher other operating costs of $0.2 million.

This was partially offset by lower sales and marketing spend of $0.7 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Depreciation and Amortization.

Three months ended September 30, Dollar Change Percentage

(dollars in millions)

Depreciation expense $ 10.4 $ 8.4 $ 2.0 22.8 %

Intangible amortization expense 3.4 3.2 0.2 9.2 %

Depreciation and amortization expense $ 13.8 $ 11.6 $ 2.2 19.2 %

The increase in depreciation expense of $2.0 million was primarily due to investments in digital capabilities, computers and networking equipment during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

The increase in intangibles amortization expense of $0.2 million was primarily due to amortization of intangibles associated with our August 2024 acquisition of ITI Data, partially offset by decrease in intangibles amortization expense due to end of useful lives for certain intangible assets during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Income from Operations.

Income from operations increased by $9.2 million, or 15.2%, from $60.2 million for the three months ended September 30, 2023 to $69.4 million for the three months ended September 30, 2024, primarily due to higher revenues and higher gross margins, partially offset by higher SG&A expenses during the three months ended September 30, 2024.

Foreign Exchange Gain, net.

Foreign exchange gains and losses are primarily attributable to the movement of the U.S.

dollar against the Indian rupee, the Philippine peso, the U.K.

pound sterling and the South African rand during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

The average exchange rate of the U.S.

dollar against the Indian rupee increased from 82.69 during the three months ended September 30, 2023 to 83.79 during the three months ended September 30, 2024.

The average exchange rate of the U.S.

dollar against the Philippine peso increased from 56.02 during the three months ended September 30, 2023 to 56.84 during the three months ended September 30, 2024.

The average exchange rate of the U.K.

pound sterling against the U.S.

dollar increased from 1.26 during the three months ended September 30, 2023 to 1.31 during the three months ended September 30, 2024.

The average exchange rate of the U.S.

dollar against the South African rand decreased from 18.49 during the three months ended September 30, 2023 to 17.74 during the three months ended September 30, 2024.

We recorded a foreign exchange gain, net of $0.4 million for the three months ended September 30, 2023 compared to a foreign exchange gain, net of $0.3 million for the three months ended September 30, 2024.

Interest expens e.

Interest expense increased from $3.4 million for the three months ended September 30, 2023 to $5.5 million for the three months ended September 30, 2024, primarily due to higher average borrowings during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Other Income, net.

Three months ended September 30, Change Percentage

(dollars in millions)

Gain on sale and mark-to-market on investments $ 1.8 $ 1.3 $ 0.5 32.1 %

Interest and dividend income 2.5 2.1 0.4 20.9 %

Fair value changes of contingent consideration — (2.5) 2.5 (100.0) %

Other, net — (0.1) 0.1 (137.0) %

Other income, net $ 4.3 $ 0.8 $ 3.5 462.2 %

Other income, net increased by $3.5 million, from $0.8 million for the three months ended September 30, 2023 to $4.3 million for the three months ended September 30, 2024.

The increase is primarily due to higher yield on our investments of $0.9 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, and recognition of contingent consideration liability of $2.5 million related to our December 2021 acquisition of Clairvoyant AI, Inc.

(“Clairvoyant”) during the three months ended September 30, 2023.

Income Tax Expense.

The effective tax rate decreased from 24.4% during the three months ended September 30, 2023 to 22.6% during the three months ended September 30, 2024.

We recorded income tax expense of $15.5 million and $14.2 million for the three months ended September 30, 2024 and 2023, respectively.

The increase in income tax expense was primarily as a result of higher profit during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, partially offset by higher excess tax benefits related to stock-based compensation during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Net income increased from $43.9 million for the three months ended September 30, 2023 to $53.0 million for the three months ended September 30, 2024, primarily due to an increase in income from operations of $9.2 million and higher other income, net of $3.5 million, partially offset by higher interest expense of $2.1 million, higher income tax expense of $1.3 million and lower foreign exchange gain, net of $0.1 million.

Results of Operations

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:

(dollars in millions)

Nine months ended September 30, 2024 Percentage of Revenues, net Nine months ended September 30, 2023 Percentage of Revenues, net Dollar Change Percentage Change

(A) (B) (C=A-B)

Revenues, net $ 1,356.9 100.0 % $ 1,216.6 100.0 % $ 140.3 11.5 %

Cost of revenues (1)

849.3 62.6 % 760.7 62.5 % 88.6 11.7 %

Gross profit (1)

507.6 37.4 % 455.9 37.5 % 51.7 11.3 %

Operating expenses:

General and administrative expenses 167.2 12.3 % 144.5 11.9 % 22.7 15.7 %

Selling and marketing expenses 109.0 8.0 % 88.7 7.3 % 20.3 22.9 %

Depreciation and amortization expense 39.0 2.9 % 38.2 3.1 % 0.8 2.3 %

Total operating expenses 315.2 23.2 % 271.4 22.3 % 43.8 16.1 %

Income from operations 192.4 14.2 % 184.5 15.2 % 7.9 4.3 %

Foreign exchange gain, net 0.7 — % 0.8 0.1 % (0.1) (19.6) %

Interest expense (14.1) (1.0) % (10.0) (0.8) % (4.1) 41.0 %

Other income, net 11.8 0.9 % 6.6 0.5 % 5.2 80.1 %

Income before income tax expense and earnings from equity affiliates 190.8 14.1 % 181.9 15.0 % 8.9 4.9 %

Income tax expense 43.1 3.2 % 37.8 3.1 % 5.3 14.1 %

Income before earnings from equity affiliates 147.7 10.9 % 144.1 11.8 % 3.6 2.5 %

Gain/(loss) from equity-method investment (0.1) — % 0.2 — % (0.3) (145.2) %

Net income $ 147.6 10.9 % $ 144.3 11.9 % $ 3.3 2.3 %

(1) Exclusive of depreciation and amortization expense.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

The following table summarizes our revenues by reportable segments:

Nine months ended September 30, Percentage

change Percentage of Total Revenues for the nine months ended September 30,

2024 2023 Dollar Change 2024 2023

(dollars in millions)

Insurance $ 452.0 $ 390.8 $ 61.2 15.7 % 33.3 % 32.1 %

Healthcare 84.8 80.0 4.8 6.0 % 6.3 % 6.6 %

Emerging Business 231.6 198.7 32.9 16.6 % 17.1 % 16.3 %

Analytics 588.5 547.1 41.4 7.6 % 43.3 % 45.0 %

Total revenues, net $ 1,356.9 $ 1,216.6 $ 140.3 11.5 % 100.0 % 100.0 %

Revenues for the nine months ended September 30, 2024 were up by $140.3 million, or 11.5%, compared to the nine months ended September 30, 2023, driven primarily by revenue growth from our new and existing clients in all of our reportable segments.

Revenue growth in Insurance of $61.2 million was primarily driven by expansion of business from our new and existing clients of $61.0 million and an increase in revenues of $0.2 million, mainly attributable to the appreciation of the U.K.

pound sterling against the U.S.

dollar during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Revenue growth in Healthcare of $4.8 million was primarily driven by expansion of business from our existing clients of $4.8 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Revenue growth in Emerging Business of $32.9 million was primarily driven by expansion of business from our new and existing clients of $32.1 million and an increase in revenues of $0.8 million that was mainly attributable to the appreciation of the U.K.

pound sterling against the U.S.

dollar during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Revenue growth in Analytics of $41.4 million was primarily driven by higher volumes in our annuity and project-based engagements from our new and existing clients of $40.6 million, including incremental revenue from our August 2024 acquisition of ITI Data and an increase in revenues of $0.8 million that was mainly attributable to the appreciation of the U.K.

pound sterling against the U.S.

dollar during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Cost of Revenues and Gross Margin :

The following table sets forth cost of revenues and gross margin of our reportable segments:

Cost of Revenues Gross Margin

Nine months ended September 30, Dollar

Change Percentage change Nine months ended September 30, Percentage change

2024 2023 2024 2023

(dollars in millions)

Insurance $ 288.1 $ 253.1 $ 35.0 13.9 % 36.3 % 35.2 % 1.1 %

Healthcare 56.4 52.9 3.5 6.6 % 33.6 % 33.9 % (0.3) %

Emerging Business 133.9 111.4 22.5 20.2 % 42.2 % 43.9 % (1.7) %

Analytics 370.9 343.3 27.6 8.0 % 37.0 % 37.3 % (0.3) %

Total $ 849.3 $ 760.7 $ 88.6 11.7 % 37.4 % 37.5 % (0.1) %

Cost of revenues for the nine months ended September 30, 2024 increased by $88.6 million, or 11.7%, compared to the nine months ended September 30, 2023.

The increase in cost of revenues was primarily due to increases in employee-related costs including restructuring costs and technology costs, partially offset by foreign exchange gain, net of hedging.

Our gross margin for the nine months ended September 30, 2024 was 37.4% compared to 37.5% for the nine months ended September 30, 2023, a decrease of 10 bps.

The increase in cost of revenues in Insurance of $35.0 million for the nine months ended September 30, 2024 was primarily due to increases in employee-related costs of $30.9 million on account of higher headcount, restructuring costs and wage inflation, higher technology costs of $3.9 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model, higher facilities costs of $3.0 million and higher other operating costs of $1.6 million, partially offset by foreign exchange gain, net of hedging of $4.4 million.

Gross margin in Insurance increased by 110 bps during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to higher revenues and operational efficiencies during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

The increase in cost of revenues in Healthcare of $3.5 million for the nine months ended September 30, 2024 was primarily due to increases in employee-related costs of $4.4 million on account of higher headcount and wage inflation and higher technology costs of $0.6 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model, partially offset by lower other operating costs of $0.3 million and foreign exchange gain, net of hedging of $1.2 million.

Gross margin in Healthcare decreased by 30 bps during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to increases in employee-related costs, partially offset by higher revenues during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

The increase in cost of revenues in Emerging Business of $22.5 million for the nine months ended September 30, 2024 was primarily due to increases in employee-related costs of $21.7 million on account of higher headcount, restructuring costs and wage inflation, higher technology costs of $2.0 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model and higher other operating costs of $1.3 million, partially offset by foreign exchange gain, net of hedging of $2.5 million.

Gross margin in Emerging Business decreased by 170 bps during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to investment in ramp-ups for certain new and existing clients during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

The increase in cost of revenues in Analytics of $27.6 million for the nine months ended September 30, 2024 was primarily due to increases in employee-related costs of $23.5 million on account of higher headcount, restructuring costs and wage inflation, including incremental cost related to our August 2024 acquisition of ITI Data, and higher technology costs of $6.5 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model, partially offset by lower other operating costs of $1.0 million and foreign exchange gain, net of hedging of $1.4 million.

Gross margin in Analytics decreased by 30 bps during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to the impact of restructuring costs of 40 bps and increases in employee-related costs, partially offset by higher revenues during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Our gross margin for the three months ended March 31, 2025 was 38.6% compared to 37.4% for the three months ended March 31, 2024, an increase of 120 basis points (“bps”)

primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

The increase in cost of revenues in Insurance of $4.5 million for the three months ended March 31, 2025 was primarily due to increases in employee-related costs of $10.8 million on account of higher headcount and wage inflation, higher technology costs of $0.9 million on account of increased subscription to cloud-based software licenses, partially offset by lower mail and data expenses in our direct marketing business of $4.4 million, other operating costs of $1.4 million and foreign exchange gain, net of hedging of $1.4 million.

Gross margin in Insurance increased by 280 bps, primarily due to higher revenues and operational efficiencies during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

The increase in cost of revenues in Healthcare and Life Sciences of $15.5 million for the three months ended March 31, 2025 was primarily due to increases in employee-related costs of $14.3 million on account of higher headcount and wage inflation, including incremental cost related to acquisition of ITI Data, higher technology costs of $1.1 million on account of increased subscription to cloud-based software licenses, and higher other operating costs of $1.0 million, partially offset by foreign exchange gain, net of hedging of $0.9 million.

Gross margin in Healthcare and Life Sciences decreased by 140 bps primarily due to lower volumes in certain existing clients during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries of $7.7 million for the three months ended March 31, 2025 was primarily due to increases in employee-related costs of $7.2 million on account of higher headcount and wage inflation, including incremental cost related to acquisition of ITI Data, higher technology costs of $0.5 million on account of increased subscription to cloud-based software licenses, and higher other operating costs $1.1 million, partially offset by foreign exchange gain, net of hedging of $1.1 million.

Gross margin in Banking, Capital Markets and Diversified Industries increased by 120 bps, primarily due to higher revenues and operational efficiencies during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

The increase in cost of revenues in International Growth Markets of $6.6 million for the three months ended March 31, 2025 was primarily due to increases in employee-related costs of $6.4 million on account of higher headcount and wage inflation, including incremental cost related to acquisition of ITI Data and higher technology costs of $1.1 million on account of increased subscription to cloud-based software licenses, partially offset by foreign exchange gain, net of hedging of $0.9 million.

Gross margin in International Growth Markets increased by 70 bps during the three months ended March 31, 2025, primarily due to higher revenues and operational efficiencies during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Selling, General and Administrative (“SG&A”) Expenses.

Nine months ended September 30, Percentage change

Three months ended March 31, Percentage

2025 2024 Dollar Change

3 unchanged sentences

Selling, general and administrative expenses $ 101.3 $ 89.2 $ 12.1 13.6 %

The increase in SG&A expenses of $43.0 million was primarily due to higher employee-related costs of $26.4 million on account of higher headcount and wage inflation, including incremental cost related to our August 2024 acquisition of ITI Data, higher investments in digital and generative AI capabilities of $10.9 million, higher sales and marketing spend of $1.2 million, restructuring costs, litigation settlement costs and associated legal fees of $3.1 million and higher other operating costs of $2.3 million.

This was partially offset by foreign exchange gain, net of hedging of $0.9 million, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

The increase in SG&A expenses of $12.1 million was primarily due to increases in employee-related costs of $9.8 million on account of higher headcount and wage inflation, including incremental cost related to acquisition of ITI Data, higher investments in digital and generative AI capabilities of $0.6 million, higher sales and marketing costs of $0.4 million and higher other operating costs of $1.7 million.

This increase in SG&A was partially offset by foreign exchange gain, net of hedging of $0.4 million, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Depreciation and Amortization.

Nine months ended September 30, Percentage change

Three months ended March 31, Percentage change

2025 2024 Dollar Change

3 unchanged sentences

Depreciation and amortization expense $ 13.6 $ 12.4 $ 1.2 9.8 %

The increase in depreciation expense of $2.7 million was primarily due to investments in digital capabilities, computers and networking equipment during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

The decrease in intangibles amortization expense of $1.9 million was primarily due to end of useful lives for certain intangible assets, partially offset by amortization of intangibles associated with our acquisition of ITI Data in August 2024, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

The increase in depreciation expense was $1.1 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to investments in infrastructure, technology assets and digital capabilities.

Income from Operations.

Income from operations increased by $7.9 million, or 4.3%, from $184.5 million for the nine months ended September 30, 2023 to $192.4 million for the nine months ended September 30, 2024, primarily due to higher revenues, partially offset by higher SG&A expenses during the nine months ended September 30, 2024.

Income from operations increased by $16.9 million, or 27.5%, from $61.5 million for the three months ended March 31, 2024 to $78.4 million for the three months ended March 31, 2025, primarily due to higher revenues and higher gross margins, partially offset by higher SG&A expenses during the three months ended March 31, 2025.

Foreign Exchange Gain, net.

1 unchanged sentence

dollar against the Indian rupee, the Philippine peso, the U.K.

pound sterling and the South African rand during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

pound sterling and the South African rand during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

The average exchange rate of the U.S.

dollar against the Indian rupee increased from 82.38 during the nine months ended September 30, 2023 to 83.44 during the nine months ended September 30, 2024.

dollar against the Indian rupee increased from 83.12 during the three months ended March 31, 2024 to 86.52 during the three months ended March 31, 2025.

The average exchange rate of the U.S.

dollar against the Philippine peso increased from 55.46 during the nine months ended September 30, 2023 to 57.12 during the nine months ended September 30, 2024.

dollar against the Philippine peso increased from 56.24 during the three months ended March 31, 2024 to 57.86 during the three months ended March 31, 2025.

The average exchange rate of the U.K.

pound sterling against the U.S.

dollar increased from 1.25 during the nine months ended September 30, 2023 to 1.28 during the nine months ended September 30, 2024.

dollar decreased from 1.27 during the three months ended March 31, 2024 to 1.26 during the three months ended March 31, 2025.

The average exchange rate of the U.S.

dollar against the South African rand decreased from 18.47 during the nine months ended September 30, 2023 to 18.41 during the nine months ended September 30, 2024.

We recorded a foreign exchange gain, net of $0.8 million for the nine months ended September 30, 2023 compared to a foreign exchange gain, net of $0.7 million for the nine months ended September 30, 2024.

dollar against the South African rand decreased from 18.96 during the three months ended March 31, 2024 to 18.49 during the three months ended March 31, 2025.

We recorded a foreign exchange gain, net of $1.2 million for the three months ended March 31, 2025 compared to a foreign exchange gain, net of $0.4 million for the three months ended March 31, 2024.

Interest expense .

Interest expense increased from $10.0 million for the nine months ended September 30, 2023 to $14.1 million for the nine months ended September 30, 2024, primarily due to higher average borrowings during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Interest expense increased from $3.3 million for the three months ended March 31, 2024 to $4.1 million for the three months ended March 31, 2025, primarily due to higher average borrowings during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Other Income, net.

Nine months ended September 30, Percentage change

2024 2023 Change

Gain on sale and mark-to-market on investments $ 3.9 $ 4.1 $ (0.2) (3.2) %

Three months ended March 31, Percentage

2025 2024 Dollar Change

(dollars in millions)

Gain on sale and fair value mark-to-market on investments $ 1.9 $ 1.0 $ 0.9 91.7 %

Interest and dividend income 2.7 2.3 0.4 14.9 %

Fair value changes of contingent consideration — 0.6 (0.6) (100.0) %

Other, net 0.1 (0.5) 0.6 (129.7) %

Others, net 0.1 0.1 — 106.3 %

Other income, net $ 4.7 $ 4.0 $ 0.7 19.0 %

Other income, net increased by $5.2 million, from $6.6 million for the nine months ended September 30, 2023 to $11.8 million for the nine months ended September 30, 2024.

The increase is primarily due to higher yield on our investments of $1.5 million, lower other expenses of $0.6 million, a decrease of $0.6 million in contingent consideration liability related to our June 2022 acquisition of Inbound Media Group, LLC as a result of fair value adjustment during the nine months ended September 30, 2024, and recognition of contingent consideration liability of $2.5 million related to our December 2021 acquisition of Clairvoyant during the nine months ended September 30, 2023.

Other income, net increased by $0.7 million, from $4.0 million for the three months ended March 31, 2024 to $4.7 million for the three months ended March 31, 2025.

The increase is primarily due to higher yield on our investments of $1.3 million, partially offset by decrease in contingent consideration liability of $0.6 million related to our June 2022 acquisition of Inbound Media Group, LLC during the three months ended March 31, 2024.

Income Tax Expense .

The effective tax rate increased from 20.8% during the nine months ended September 30, 2023 to 22.6% during the nine months ended September 30, 2024.

We recorded income tax expense of $43.1 million and $37.8 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase in income tax expense was primarily as a result of higher profit during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 and lower excess tax benefits related to stock-based compensation during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Net income increased from $144.3 million for the nine months ended September 30, 2023 to $147.6 million for the nine months ended September 30, 2024, primarily due to an increase in income from operations of $7.9 million and higher other income, net of $5.2 million, partially offset by higher income tax expense of $5.3 million, higher interest expense of $4.1 million, loss from equity-method investment of $0.3 million and lower foreign exchange gain, net of $0.1 million.

The effective tax rate decreased from 22.0% during the three months ended March 31, 2024 to 16.9% during the three months ended March 31, 2025.

We recorded income tax expense of $13.5 million and $13.8 million for the three months ended March 31, 2025 and 2024, respectively.

The decrease in income tax expense was primarily as a result of higher excess tax benefits related to stock-based compensation, partially offset by higher profit and increase in non-deductible compensation expense during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Net income increased from $48.8 million for the three months ended March 31, 2024 to $66.6 million for the three months ended March 31, 2025, primarily due to higher income from operations of $16.9 million, higher other income, net of $0.7 million, and lower income tax expense of $0.3 million, partially offset by loss from equity-method investment of $0.1 million.

Liquidity and Capital Resources

Nine months ended September 30, Dollar Change Percentage Change

Three months ended March 31, Percentage Change

2025 2024 Dollar Change

(dollars in millions)

Opening cash, cash equivalents and restricted cash $ 171.4 $ 145.4 $ 26.0 17.9 %

Net cash provided by operating activities 163.2 132.2 31.0 23.5 %

Net cash (used for)/provided by operating activities 3.2 (21.9) 25.1 (114.8) %

Net cash (used for)/provided by investing activities (22.3) 4.7 (27.0) (574.9) %

Net cash used for financing activities (52.2) (141.0) 88.8 (63.0) %

Net cash (used for)/provided by financing activities 3.4 (9.8) 13.2 (134.8) %

Effect of exchange rate changes 2.7 (1.2) 3.9 (322.8) %

Closing cash, cash equivalents and restricted cash $ 158.4 $ 117.2 $ 41.2 35.2 %

As of September 30, 2024 and 2023, we had $325.8 million and $274.2 million, respectively, in cash, cash equivalents and short-term investments, of which $288.5 million and $256.5 million, respectively, is located in foreign jurisdictions that upon distribution may be subject to withholding and other taxes.

We periodically evaluate opportunities to distribute cash among our group entities to fund our operations, expand our business and make strategic acquisitions in the United States and other geographies, and as and when we decide to distribute, we may have to accrue in the year of distribution any additional taxes required in accordance with local tax laws, rules and regulations in the relevant foreign jurisdictions.

During the nine months ended September 30, 2024, one of our subsidiaries in India repatriated $18.3 million (net of $1.0 million withholding taxes) to the United States.

As of March 31, 2025 and 2024, we had $331.4 million and $246.2 million, respectively, in cash, cash equivalents and short-term investments, of which $305.4 million and $213.7 million, respectively, is located in foreign jurisdictions that upon distribution may be subject to withholding and other taxes.

We periodically evaluate opportunities to distribute cash among our group entities to fund our operations, expand our business and make strategic acquisitions in the United States and other geographies, and as and when we decide to distribute, we may have to accrue additional taxes in accordance with local tax laws, rules and regulations in the relevant foreign jurisdictions.

Operating Activities:

Cash provided by operating activities were $163.2 million during the nine months ended September 30, 2024, compared to $132.2 million during nine months ended September 30, 2023, reflecting higher cash earnings and lower working capital needs.

Net cash provided by operating activities was $3.2 million during the three months ended March 31, 2025, compared to net cash used for operating activities of $21.9 million during the three months ended March 31, 2024, reflecting higher cash earnings and lower working capital needs.

The major drivers contributing to the increase of $25.1 million year-over-year included the following:

• Increase in cash earnings including adjustments for non-cash and other items contributed higher cash flow of $4.5 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

These adjustments include fair value mark-to-market of investments, unrealized foreign currency exchange (gain)/loss, net, stock-based compensation expense, fair value changes in contingent consideration, depreciation and amortization of long-lived assets and intangibles acquired in business combination, among others.

• Changes in accounts receivable, including advance billings, contributed higher cash flow of $15.3 million in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Collections in accounts receivable, including advance billings, was driven by revenue growth during the nine months ended September 30, 2024.

Our days sales outstanding remained flat at 64 days as of September 30, 2024 and 2023.

• Payment of contingent consideration related to our December 2021 acquisition of Clairvoyant contributed to a higher cash payout of $11.0 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

• Changes in other assets, accounts payables including other liabilities contributed to a higher cash flow of $22.2 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

• Increase in cash earnings including adjustments for non-cash and other items contributed higher cash flow of $22.6 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

These adjustments include fair value changes in investments, unrealized foreign currency exchange (gain)/loss, net, stock-based employee compensation, depreciation and amortization of long-lived assets and intangibles acquired in business combinations, among others.

• Changes in accounts receivable, including advance billings, contributed lower cash flow of $12.7 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Collections in accounts receivable, including advance billings was driven by revenue growth during the three months ended March 31, 2025.

Our days sales outstanding were 67 days as of March 31, 2025, compared to 66 days as of March 31, 2024.

• Payment of contingent consideration related to our December 2021 acquisition of Clairvoyant AI, Inc.

(“Clairvoyant”) during the three months ended March 31, 2024 contributed to a higher cash payout of $11.0 million, whereas no such payment occurred during the three months ended March 31, 2025.

• Changes in other assets, accounts payables including other liabilities contributed to a lower cash payouts of $4.2 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Investing Activities:

Cash used for investing activities were $94.5 million for the nine months ended September 30, 2024, compared to cash provided by investing activities of $11.4 million for the nine months ended September 30, 2023.

The decrease of $105.9 million was primarily due to net purchase of investments of $33.4 million and net cash used for business acquisition of $24.5 million during the nine months ended September 30, 2024, compared to net redemption of investments $52.5 million during the nine months ended September 30, 2023.

This was partially offset by lower cash paid for purchase of long-lived assets, including investments in infrastructure, technology assets, digital capabilities of $4.9 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Cash used for investing activities was $22.3 million for the three months ended March 31, 2025, compared to cash provided of $4.7 million for the three months ended March 31, 2024.

The decrease of $27.0 million was primarily due to higher net purchases of investments of $8.8 million during the three months ended March 31, 2025, compared to net redemption of investments of $15.9 million during the three months ended March 31, 2024 and higher cash paid for purchase of long-lived assets, including investments in infrastructure, technology assets and digital capabilities of $1.7 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Financing Activities:

Cash used for financing activities were $52.2 million during the nine months ended September 30, 2024, compared to $141.0 million during the nine months ended September 30, 2023.

The decrease of $88.8 million was primarily due to net proceeds from borrowings under our revolving credit facility and new term loan facility of $145.0 million during the nine months ended September 30, 2024, compared to net repayment of our borrowings of $40.0 million during the nine months ended September 30, 2023.

This was partially offset by higher purchases of treasury stock of $95.3 million under our share repurchase programs for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

We expect to use cash from operating activities to maintain and expand our business by making investments, primarily related to building new digital capabilities, including generative AI and purchase telecommunications equipment and computer hardware and software in connection with managing client operations.

We incurred $36.2 million of capital expenditures during the nine months ended September 30, 2024.

We expect to incur total capital expenditures of between $48.0 million to $52.0 million in fiscal 2024, primarily to meet our growth requirements, including additions to our facilities as well as investments in technology applications, product development, digital technology, advanced automation, robotics and infrastructure.

Cash provided by financing activities was $3.4 million during the three months ended March 31, 2025, compared to cash used of $9.8 million during the three months ended March 31, 2024.

The increase of $13.2 million was primarily due to lower purchases of treasury stock of $134.2 million under our share repurchase programs during the three months ended March 31, 2025, compared to the three months ended March 31, 2024 and payment of contingent consideration related to our December 2021 acquisition of Clairvoyant of $4.0 million during the three months ended March 31, 2024, with no such payment during the three months ended March 31, 2025.

This has been partially offset by net borrowings of $18.7 million during the three months ended March 31, 2025, compared to net borrowings of $145.0 million three months ended March 31, 2024.

We expect to use cash from operating activities to maintain and expand our business by making investments, primarily related to building new digital capabilities, including AI and purchase telecommunications equipment and computer hardware and software in connection with managing client operations.

We incurred $12.9 million of capital expenditures during the three months ended March 31, 2025.

We expect to incur total capital expenditures of between $50.0 million to $55.0 million in fiscal 2025, primarily to meet our growth requirements, including additions to our facilities and infrastructure, as well as investments in technology applications, product development, and other digital technologies.

In connection with any tax assessment orders that have been issued, or may be issued against us or our subsidiaries, we may be required to deposit additional amounts with the relevant authorities with respect to such assessment orders.

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We believe that our existing cash, cash equivalents and short-term investments and sources of liquidity will be sufficient to satisfy our cash requirements over the next 12 months.

Our future cash requirements will depend on many factors, including our rate of revenue growth, our investments in strategic initiatives, applications or technologies, operation centers and acquisition of complementary businesses, continued stock repurchases under our board-authorized stock repurchase program, which may require the use of significant cash resources and/or additional financing.

We anticipate that we will continue to rely upon cash from operating activities to finance most of our above-mentioned requirements, although if we have significant growth through acquisitions or significant stock repurchases, including any shares purchased under an accelerated stock repurchase program, we may need to obtain additional financing.

Our future cash requirements will depend on many factors, including our rate of revenue growth, our investments in strategic initiatives like acquisition of complementary businesses, capital expenditures and continued stock repurchases under our board-authorized stock repurchase program, which may require the use of significant cash resources and/or additional financing.

In the ordinary course of business, we enter into contracts and commitments that obligate us to make payments in the future.

These obligations include borrowings, including interest obligations, purchase commitments, operating and finance lease commitments, employee benefit payments under gratuity plans, payments for contingent consideration and uncertain tax positions.

See Note 16 - Fair Value Measurements - Fair Value of Contingent Consideration, Note 18 - Borrowings, Note 21 - Leases and Note 25 - Commitments and Contingencies to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements” for further information on material cash requirements from known contractual and other obligations.

See Note 16 - Fair Value Measurements - Fair Value of Contingent Consideration, Note 18 - Borrowings, Note 20 - Employee Benefit Plans, Note 21 - Leases, Note 22 - Income Taxes and Note 25 - Commitments and Contingencies to our unaudited consolidated financial statements under Part I, Item 1, “Financial Statements” for further information on material cash requirements from known contractual and other obligations.

In the ordinary course of business, we provide standby letters of credit to third parties primarily for facility leases.

As of September 30, 2024 and December 31, 2023, we had outstanding letters of credit of $0.7 million and $0.5 million, respectively, that were not recognized in our consolidated balance sheets.

As of March 31, 2025 and December 31, 2024, we had outstanding letters of credit of $0.7 million and $0.8 million respectively, that were not recognized in our consolidated balance sheets.

These are unlikely to have, a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

We had no other off-balance sheet arrangements or obligations.

Financing Arrangements (Debt Facility)

Financing Arrangements

The following table summarizes our debt position:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Revolving credit facility Term loan facility Total Revolving credit facility Term loan facility Total

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Total current portion of long-term borrowings — 4.9 4.9 — 4.9 4.9

— 4.9 4.9 65.0 — 65.0

Long-term borrowings 210.0 92.5 302.5 190.0 93.8 283.8

245.0 95.0 340.0 135.0 — 135.0

Unamortized debt issuance costs — (0.1) (0.1) — (0.2) (0.2)

Total long-term borrowings 210.0 92.4 302.4 190.0 93.6 283.6

245.0 94.8 339.8 135.0 — 135.0

Total borrowings $ 210.0 $ 97.3 $ 307.3 $ 190.0 $ 98.5 $ 288.5

As of September 30, 2024 and December 31, 2023, we were in compliance with the financial and non-financial covenants under the applicable credit agreement.

As of March 31, 2025 and December 31, 2024, we were in compliance with the financial covenants under our credit agreement with certain lenders and Citibank N.A.

as administrative agent.

See Note 18 – Borrowings to our unaudited consolidated financial statements.

Recent Accounting Pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis