What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-07-29 compared with 2025-04-29 · 196 added, 89 removed, 230 unchanged (55% of the section changed)

34 unchanged sentences

• 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;

• negative public reaction in the United States or elsewhere to offshore outsourcing;

• 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;

23 unchanged sentences

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.

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

For the three months ended June 30, 2025, we generated revenues of $514.5 million compared to revenues of $448.4 million for the three months ended June 30, 2024, an increase of $66.1 million, or 14.7%.

For the six months ended June 30, 2025, we generated revenues of $1,015.5 million compared to revenues of $884.9 million for the six months ended June 30, 2024, an increase of $130.6 million, or 14.8%.

We serve cli ents mainly in North America, and the United Kingdom and Europe , with these two regions generating 82.2% and 15.1%, respectively, of our total revenues for the three months ended June 30, 2025, and 82.3% and 14.8%, respectively, of our total revenues for the three months ended June 30, 2024.

For the six months ended June 30, 2025, these two regions generated 82.5% and 14.8%, respectively, of our total revenues and 82.6% and 14.7%, respectively, of our total revenues for the six months ended June 30, 2024.

For the three months ended June 30, 2025 and 2024, our total revenues from our top ten clients accounted for 33.5% and 33.0% of our total revenues, respectively.

For the six months ended June 30, 2025 and 2024, our total revenues from our top ten clients accounted for 33.6% and 32.9% 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.

16 unchanged sentences

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.

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:

21 unchanged sentences

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.

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.

1 unchanged sentence

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.

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 or emerging pricing models, such as consumption-based for AI.

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.

11 unchanged sentences

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.

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 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:

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:

(dollars in millions)

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

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

Three months ended June 30, 2025 Percentage of Revenues, net Three months ended June 30, 2024 Percentage of Revenues, net Dollar Change Percentage Change

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

20 unchanged sentences

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

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The following table summarizes our revenues by reportable segments:

Three months ended March 31, Percentage

change Percentage of Total Revenues for the three months ended

Three months ended June 30, Percentage

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

2025 2024 Dollar change 2025 2024

5 unchanged sentences

Total revenues, net $ 514.5 $ 448.4 $ 66.1 14.7 % 100.0 % 100.0 %

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.

Revenues for the three months ended June 30, 2025 were up by $66.1 million, or 14.7%, compared to the three months ended June 30, 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 during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Revenue growth in Healthcare and Life Sciences of $23.4 million was primarily driven by the expansion of business from our new and existing clients, including incremental revenue from our August 2024 acquisition of Incandescent Technologies, Inc.

(“ITI Data”) during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Revenue growth in Banking, Capital Markets and Diversified Industries of $16.5 million was primarily driven by expansion of business from our new and existing clients of $16.6 million, including incremental revenue from our August 2024 acquisition of ITI Data, partially offset by a foreign exchange loss of $0.1 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Revenue growth in International Growth Markets of $12.5 million was primarily driven by expansion of business from our new and existing clients of $11.9 million, including incremental revenue from our August 2024 acquisition of ITI Data and a foreign exchange gain, net of hedging of $0.6 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Cost of Revenues and Gross Margin :

1 unchanged sentence

Cost of Revenues Gross Margin

Three months ended March 31, Dollar Change Percentage

change Three months ended March 31, Percentage

Three months ended June 30, Dollar change Percentage

change Three months ended June 30, Percentage

2025 2024 2025 2024

5 unchanged sentences

Total $ 320.3 $ 282.1 $ 38.2 13.5 % 37.7 % 37.1 % 0.6 %

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.

Cost of revenues for the three months ended June 30, 2025 increased by $38.2 million, or 13.5% compared to the three months ended June 30, 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 June 30, 2025 was 37.7%, compared to 37.1% for the three months ended June 30, 2024, an increase of 60 basis points (“bps”) primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase in cost of revenues in Insurance of $7.8 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $12.1 million on account of higher headcount and wage inflation, higher technology costs of $0.9 million and higher other operating costs of $0.4 million, partially offset by lower mail and data expenses in our direct marketing business of $4.6 million, and foreign exchange gain, net of hedging of $1.0 million.

Gross margin in Insurance increased by 80 bps, primarily due to higher revenues and operational efficiencies during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase in cost of revenues in Healthcare and Life Sciences of $13.0 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $11.9 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $1.0 million and higher other operating costs of $0.7 million, partially offset by foreign exchange gain, net of hedging of $0.6 million.

Gross margin in Healthcare and Life Sciences increased by 10 bps primarily due to higher volumes in certain existing clients during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries of $10.1 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $9.0 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $0.6 million and higher other operating costs $1.1 million, partially offset by foreign exchange gain, net of hedging of $0.6 million.

Gross margin in Banking, Capital Markets and Diversified Industries increased by 20 bps, primarily due to higher revenues and operational efficiencies during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase in cost of revenues in International Growth Markets of $7.3 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $6.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $0.6 million and higher other operating costs $0.5 million.

Gross margin in International Growth Markets increased by 100 bps, primarily due to higher revenues and operational efficiencies during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

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

Three months ended June 30, Dollar change Percentage

(dollars in millions)

General and administrative expenses $ 59.5 $ 56.5 $ 3.0 5.5 %

Selling and marketing expenses 39.4 35.4 4.0 11.3 %

Selling, general and administrative expenses $ 98.9 $ 91.9 $ 7.0 7.7 %

The increase in SG&A expenses of $7.0 million was primarily due to increases in employee-related costs of $8.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher investments in digital and generative AI capabilities of $1.0 million, higher sales and marketing costs of $0.5 million and foreign exchange loss, net of hedging of $0.4 million.

This increase in SG&A was partially offset by one-time restructuring and litigation settlement costs of $3.1 million incurred during the three months ended June 30, 2024, compared to the three months ended June 30, 2025.

Depreciation and Amortization.

Three months ended June 30, Dollar change Percentage

(dollars in millions)

Depreciation expense $ 10.8 $ 9.8 $ 1.0 9.6 %

Intangible amortization expense 3.3 3.1 0.2 6.5 %

Depreciation and amortization expense $ 14.1 $ 12.9 $ 1.2 8.9 %

The increase in depreciation expense was $1.0 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to investments in infrastructure, technology assets and digital capabilities.

Income from Operations.

Income from operations increased by $19.7 million, or 32.0%, from $61.5 million for the three months ended June 30, 2024 to $81.2 million for the three months ended June 30, 2025, primarily due to higher revenues and higher gross margins, partially offset by higher SG&A expenses during the three months ended June 30, 2025.

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 June 30, 2025, compared to the three months ended June 30, 2024.

The average exchange rate of the U.S.

dollar against the Indian rupee increased from 83.42 during the three months ended June 30, 2024 to 85.27 during the three months ended June 30, 2025.

The average exchange rate of the U.S.

dollar against the Philippine peso decreased from 58.29 during the three months ended June 30, 2024 to 55.97 during the three months ended June 30, 2025.

The average exchange rate of the U.K.

pound sterling against the U.S.

dollar increased from 1.26 during the three months ended June 30, 2024 to 1.35 during the three months ended June 30, 2025.

The average exchange rate of the U.S.

dollar against the South African rand decreased from 18.53 during the three months ended June 30, 2024 to 18.12 during the three months ended June 30, 2025.

We recorded a foreign exchange gain, net of $2.2 million for the three months ended June 30, 2025 compared to a foreign exchange gain, net of $nil for the three months ended June 30, 2024.

Interest expens e.

Interest expense decreased from $5.3 million for the three months ended June 30, 2024 to $4.3 million for the three months ended June 30, 2025, primarily due to lower average borrowings and a lower effective interest rate of 5.8% during the three months ended June 30, 2025, compared to 6.5% to the three months ended June 30, 2024.

Other Income, net.

Three months ended June 30, Change Percentage

(dollars in millions)

Gain on sale and fair value mark-to-market on investments $ 2.3 $ 1.2 $ 1.1 94.4 %

Interest and dividend income 2.7 2.4 0.3 12.9 %

Others, net 0.7 (0.1) 0.8 — %

Other income, net $ 5.7 $ 3.5 $ 2.2 59.7 %

Other income, net increased from $3.5 million for the three months ended June 30, 2024 to $5.7 million for the three months ended June 30, 2025.

The increase is primarily due to higher yield on our investments and reversal of certain contingent liabilities of $0.9 million that were no longer required during the three months ended June 30, 2025.

Income Tax Expense.

The effective tax rate decreased from 23.2% during the three months ended June 30, 2024 to 21.9% during the three months ended June 30, 2025.

We recorded income tax expense of $18.6 million and $13.9 million for the three months ended June 30, 2025 and 2024, respectively.

The increase in income tax expense was primarily as a result of higher profit, partially offset by lower state taxes and higher excess tax benefits during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Net income increased from $45.8 million for the three months ended June 30, 2024 to $66.1 million for the three months ended June 30, 2025, primarily due to higher in income from operations of $19.7 million, higher foreign exchange and other income, net of $2.2 million each and lower interest expense by $1.0 million.

This was partially offset by higher income tax expense of $4.7 million.

Results of Operations

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:

(dollars in millions)

Six months ended June 30, 2025 Percentage of Revenues, net Six months ended June 30, 2024 Percentage of Revenues, net Dollar Change Percentage Change

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

Revenues, net $ 1,015.5 100.0 % $ 884.9 100.0 % $ 130.6 14.8 %

Cost of revenues (1)

628.0 61.8 % 555.5 62.8 % 72.5 13.0 %

Gross profit (1)

387.5 38.2 % 329.4 37.2 % 58.1 17.7 %

Operating expenses:

General and administrative expenses 119.0 11.7 % 109.7 12.4 % 9.3 8.4 %

Selling and marketing expenses 81.4 8.0 % 71.4 8.1 % 10.0 13.9 %

Depreciation and amortization expense 27.6 2.7 % 25.3 2.9 % 2.3 9.3 %

Total operating expenses 228.0 22.4 % 206.4 23.3 % 21.6 10.5 %

Income from operations 159.5 15.7 % 123.0 13.9 % 36.5 29.7 %

Foreign exchange gain, net 3.4 0.3 % 0.4 — % 3.0 761.5 %

Interest expense (8.4) (0.8) % (8.6) (1.0) % 0.2 (2.2) %

Other income, net 10.4 1.0 % 7.4 0.8 % 3.0 38.3 %

Income before income tax expense and earnings from equity affiliates 164.9 16.2 % 122.2 13.8 % 42.7 34.9 %

Income tax expense 32.0 3.2 % 27.6 3.1 % 4.4 16.0 %

Income before earnings from equity affiliates 132.9 13.1 % 94.6 10.7 % 38.3 40.4 %

Loss from equity-method investment (0.3) — % — — % (0.3) 575.7 %

Net income $ 132.6 13.1 % $ 94.6 10.7 % $ 38.0 40.2 %

(1) Exclusive of depreciation and amortization expense.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The following table summarizes our revenues by reportable segments:

Six months ended June 30, Percentage

change Percentage of Total Revenues for the six months ended June 30,

2025 2024 Dollar change 2025 2024

(dollars in millions)

Insurance $ 344.2 $ 316.7 $ 27.5 8.7 % 33.9 % 35.8 %

Healthcare and Life Sciences 255.1 206.8 48.3 23.4 % 25.1 % 23.4 %

Banking, Capital Markets and Diversified Industries 238.8 207.9 30.9 14.9 % 23.5 % 23.5 %

International Growth Markets 177.4 153.5 23.9 15.5 % 17.5 % 17.3 %

Total revenues, net $ 1,015.5 $ 884.9 $ 130.6 14.8 % 100.0 % 100.0 %

Revenues for the six months ended June 30, 2025 were up by $130.6 million, or 14.8%, compared to the six months ended June 30, 2024, driven primarily by revenue growth from our new and existing clients in all of our reportable segments.

Revenue growth in Insurance of $27.5 million was primarily driven by expansion of business from our new and existing clients during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Revenue growth in Healthcare and Life Sciences of $48.3 million was primarily driven by the expansion of business from our new and existing clients, including incremental revenue from our August 2024 acquisition of ITI Data during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Revenue growth in Banking, Capital Markets and Diversified Industries of $30.9 million was primarily driven by expansion of business from our new and existing clients of $31.2 million, including incremental revenue from our August 2024 acquisition of ITI Data, partially offset by a foreign exchange loss of $0.3 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Revenue growth in International Growth Markets of $23.9 million was primarily driven by expansion of business from our new and existing clients of $24.5 million, including incremental revenue from our August 2024 acquisition of ITI Data, partially offset by a foreign exchange loss, net of hedging of $0.6 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

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

Six months ended June 30, Dollar change Percentage change Six months ended June 30, Percentage change

2025 2024 2025 2024

(dollars in millions)

Insurance $ 221.5 $ 209.2 $ 12.3 5.8 % 35.7 % 33.9 % 1.8 %

Healthcare and Life Sciences 143.6 115.2 28.4 24.7 % 43.7 % 44.3 % (0.6) %

Banking, Capital Markets and Diversified Industries 149.1 131.2 17.9 13.6 % 37.6 % 36.9 % 0.7 %

International Growth Markets 113.8 99.9 13.9 13.9 % 35.9 % 34.9 % 1.0 %

Total $ 628.0 $ 555.5 $ 72.5 13.0 % 38.2 % 37.2 % 1.0 %

Cost of revenues for the six months ended June 30, 2025 increased by $72.5 million, or 13.0%, compared to the six months ended June 30, 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 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.

Our gross margin for the six months ended June 30, 2025 was 38.2% compared to 37.2% for the six months ended June 30, 2024, an increase of 100 bps primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in cost of revenues in Insurance of $12.3 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $22.8 million on account of higher headcount and wage inflation, higher technology costs of $1.8 million, partially offset by lower mail and data expenses in our direct marketing business of $9.0 million, other operating costs of $0.9 million and foreign exchange gain, net of hedging of $2.4 million.

Gross margin in Insurance increased by 180 bps, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in cost of revenues in Healthcare and Life Sciences of $28.4 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $26.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $1.2 million, higher technology costs of $1.3 million, and higher other operating costs of $1.3 million, partially offset by foreign exchange gain, net of hedging of $1.6 million.

Gross margin in Healthcare and Life Sciences decreased by 60 bps, primarily due to lower volumes in certain existing clients during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries of $17.9 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $16.3 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $1.1 million, higher technology costs of $1.1 million, and higher other operating costs of $1.1 million, partially offset by foreign exchange gain, net of hedging of $1.7 million.

Gross margin in Banking, Capital Markets and Diversified Industries increased by 70 bps, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in cost of revenues in International Growth Markets of $13.9 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $12.5 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $1.7 million, and higher other operating costs of $0.7 million, partially offset by foreign exchange gain, net of hedging of $1.0 million.

Gross margin in International Growth Markets increased by 100 bps during the six months ended June 30, 2025, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

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

Three months ended March 31, Percentage

Six months ended June 30, Percentage change

2025 2024 Dollar change

3 unchanged sentences

Selling, general and administrative expenses $ 200.4 $ 181.1 $ 19.3 10.6 %

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.

The increase in SG&A expenses of $19.3 million was primarily due to increases in employee-related costs of $18.0 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher investments in digital and generative AI capabilities of $1.6 million, higher sales and marketing costs of $0.9 million and higher other operating costs of $1.9 million.

This increase in SG&A was partially offset by one-time restructuring and litigation settlement costs of $3.1 million incurred during the six months ended June 30, 2024, compared to the six months ended June 30, 2025.

Depreciation and Amortization.

Three months ended March 31, Percentage change

Six months ended June 30, Percentage change

2025 2024 Dollar change

3 unchanged sentences

Depreciation and amortization expense $ 27.6 $ 25.3 $ 2.3 9.3 %

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.

The increase in depreciation expense was $2.0 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to investments in infrastructure, technology assets and digital capabilities.

Income from Operations.

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.

Income from operations increased by $36.5 million, or 29.7%, from $123.0 million for the six months ended June 30, 2024 to $159.5 million for the six months ended June 30, 2025, primarily due to higher revenues and higher gross margins, partially offset by higher SG&A expenses during the six months ended June 30, 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 three months ended March 31, 2025, compared to the three months ended March 31, 2024.

pound sterling and the South African rand during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The average exchange rate of the U.S.

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.

dollar against the Indian rupee increased from 83.27 during the six months ended June 30, 2024 to 85.90 during the six months ended June 30, 2025.

The average exchange rate of the U.S.

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.

dollar against the Philippine peso decreased from 57.27 during the six months ended June 30, 2024 to 56.91 during the six months ended June 30, 2025.

The average exchange rate of the U.K.

pound sterling against the U.S.

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

dollar increased from 1.26 during the six months ended June 30, 2024 to 1.31 during the six months ended June 30, 2025.

The average exchange rate of the U.S.

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.

dollar against the South African rand decreased from 18.74 during the six months ended June 30, 2024 to 18.30 during the six months ended June 30, 2025.

We recorded a foreign exchange gain, net of $3.4 million for the six months ended June 30, 2025 compared to a foreign exchange gain, net of $0.4 million for the six months ended June 30, 2024.

Interest expense.

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.

Interest expense decreased from $8.6 million for the six months ended June 30, 2024 to $8.4 million for the six months ended June 30, 2025, primarily due to a lower effective interest rate of 5.8% during the six months ended June 30, 2025, compared to 6.6% to the six months ended June 30, 2024.

Other Income, net.

Three months ended March 31, Percentage

2025 2024 Dollar Change

(dollars in millions)

Six months ended June 30, Percentage change

2025 2024 Change

Gain on sale and fair value mark-to-market on investments $ 4.2 $ 2.2 $ 2.0 93.2 %

3 unchanged sentences

Other income, net $ 10.4 $ 7.4 $ 3.0 38.3 %

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.

Other income, net increased from $7.4 million for the six months ended June 30, 2024 to $10.4 million for the six months ended June 30, 2025.

The increase is primarily due to higher yield on our investments and reversal of certain contingent liabilities of $0.9 million that were no longer required during the six months ended June 30, 2025, partially offset by reversal of contingent consideration liability of $0.6 million related to our June 2022 acquisition of Inbound Media Group, LLC during the six months ended June 30, 2024.

Income Tax Expense.

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.

The effective tax rate decreased from 22.6% during the six months ended June 30, 2024 to 19.5% during the six months ended June 30, 2025.

We recorded income tax expense of $32.0 million and $27.6 million for the six months ended June 30, 2025 and 2024, respectively.

The increase in income tax expense was primarily driven by higher profit and an increase in non-deductible expenses, partially offset by lower state taxes and higher excess tax benefits during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Net income increased from $94.6 million for the six months ended June 30, 2024 to $132.6 million for the six months ended June 30, 2025, primarily due to increases in income from operations of $36.5 million, higher foreign exchange and other income, net of $3.0 million each and lower interest expense by $0.2 million, partially offset by lower income tax expense of $4.4 million and loss from equity-method investment of $0.3 million.

Liquidity and Capital Resources

Three months ended March 31, Percentage Change

2025 2024 Dollar Change

Six months ended June 30, Dollar Change Percentage Change

(dollars in millions)

Opening cash, cash equivalents and restricted cash $ 171.4 $ 141.0 $ 30.4 21.5 %

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)/provided by financing activities 3.4 (9.8) 13.2 (134.8) %

Net cash provided by operating activities 112.6 53.0 59.6 112.3 %

Net cash used for investing activities (36.3) (43.2) 6.9 (16.1) %

Net cash used for financing activities (84.6) (27.3) (57.3) 209.7 %

Effect of exchange rate changes 7.4 (1.8) 9.2 (498.4) %

Closing cash, cash equivalents and restricted cash $ 170.5 $ 121.7 $ 48.8 40.2 %

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.

As of June 30, 2025 and December 31, 2024, we had $353.3 million and $340.6 million, respectively, in cash, cash equivalents and short-term investments, of which $315.7 million and $296.0 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:

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.

Net cash provided by operating activities was $112.6 million during the six months ended June 30, 2025, compared to $53.0 million during six months ended June 30, 2024, reflecting higher cash earnings and lower working capital needs.

The major drivers contributing to the increase of $59.6 million year-over-year included the following:

• 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.

• An increase in cash earnings including adjustments for non-cash and other items contributed higher cash flow of $44.0 million during the six months ended June 30, 2025 compared to the six months ended June 30, 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.

• Changes in accounts receivable, including advance billings, contributed lower cash flow of $19.0 million in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Collections in accounts receivable, including advance billings, was driven by revenue growth during the six months ended June 30, 2025.

Our days sales outstanding were 64 days as of June 30, 2025, compared to 63 days as of June 30, 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.

(“Clairvoyant”) during the six months ended June 30, 2024 contributed to a higher cash payout of $11.0 million, whereas no such payment occurred during the six months ended June 30, 2025.

• Changes in other assets, accounts payables including other liabilities contributed to a lower cash payouts of $23.6 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Investing Activities:

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.

Net cash used for investing activities was $36.3 million for the six months ended June 30, 2025, compared to $43.2 million for the six months ended June 30, 2024.

The decrease of $6.9 million was primarily due to lower net purchase of investments of $11.5 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

This was partially offset by higher cash paid for capital expenditures, including investments in infrastructure, technology assets and digital capabilities of $4.0 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Financing Activities:

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.

Net cash used for financing activities was $84.6 million during the six months ended June 30, 2025, compared to $27.3 million during the six months ended June 30, 2024.

The increase of $57.3 million was primarily due to net repayments of borrowings of $28.5 million during the six months ended June 30, 2025, compared to net proceeds from borrowings of $135.0 million during the six months ended June 30, 2024.

This was partially offset by lower purchases of treasury stock of $101.0 million under our share repurchase programs during the six months ended June 30, 2025, compared to the six months ended June 30, 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 incurred $27.4 million of capital expenditures during the six months ended June 30, 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.

2 unchanged sentences

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 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.

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, including accelerated stock repurchase 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, we may need to obtain additional financing.

Subsequent to the end of the second quarter of 2025, on July 29, 2025, we entered into an Accelerated Share Repurchase Agreement with Citibank to repurchase shares of our common stock for an aggregate purchase price of $125 million, as part of our previously announced 2024 Repurchase Program of $500 million.

We plan to fund the repurchase with available cash on hand and/or borrowings from our credit facility.

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

2 unchanged sentences

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

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.

As of June 30, 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.

2 unchanged sentences

The following table summarizes our debt position:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

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

6 unchanged sentences

Total borrowings $ 164.0 $ 96.1 $ 260.1 $ 190.0 $ 98.5 $ 288.5

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 of June 30, 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.

3 unchanged sentences

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