What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-25 · 187 added, 216 removed, 264 unchanged (60% of the section changed)

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These factors include but are not limited to:

• 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, 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;

• fluctuations in our earnings;

• our ability to hire and retain enough sufficiently trained employees to support our operations or any changes in the senior management team;

• 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, including for our AI-related offerings;

• our ability to attract and retain enough sufficiently trained employees to support our operations or any changes in the senior management team;

• our ability to accurately estimate and/or manage costs;

• our ability to adjust our pricing terms or effectively manage our asset utilization levels to meet the changing demands of our clients and potential clients;

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

• cyber security incidents, data breaches, additional cybersecurity and privacy risks from growing use of AI, 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, and on third party data use rights for certain of our offerings;

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• 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 manage rapid infrastructure and personnel growth across countries, including losing key talent to competitors;

• 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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• legal liability arising out of customer and third party contracts;

• increasing competition in our industry;

• increasing competition in our industry, including from other providers and from internal resources of our clients;

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

• challenges related to upgrading our enterprise resource planning system;

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

• 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, 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 rising inflation, high interest rates and economic recessionary trends on currency exchange rates;

• 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;

• difficulty of enforcing judgments against our foreign subsidiaries or officers;

• 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 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;

• 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 initiatives.

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

In particular, you should consider the numerous risks outlined in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

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Executive Overview

We are a global data and artificial intelligence (“AI”) company that offers services and solutions to reinvent our 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, banking and capital markets, retail, communications and media, and energy and infrastructure, among others.

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

Through the end of 2024, we managed and reported financial information through our four strategic business units:

Insurance, Healthcare, Analytics and Emerging Business, which reflected how management reviewed financial information and made operating decisions.

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 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 and life sciences, banking and capital markets, retail, communications and media, and energy and infrastructure, among others.

One of our key assets is 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).

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.

Acquisition during the year 2024

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.

2025 Operating Model

In the first quarter of 2025, we began to implement operational and structural changes to accelerate the execution of our data and AI strategy, capture a greater share of the growing AI market and drive our long-term growth.

In the first quarter of 2025, we implemented operational and structural changes to accelerate the execution of our data and AI strategy and 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 capabilities specific to various industries and client needs.

This will enable us to further embed analytics throughout each of our IMUs, enhance our client relationships, deepen investments in data and AI capabilities, develop industry-specific AI solutions, form partnerships, access new client buying centers, enable expansion of our addressable markets across industries and geographies, and provide more professional development opportunities for our employees.

Our IMUs, Insurance, Healthcare and Life Sciences, Banking, Capital Markets and Diversified Industries, and International Growth Markets, reflect how management will review financial information and make operating decisions beginning in the first quarter of 2025.

These 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.

Our new reportable segments, aligned to our IMUs, effective for the first quarter of 2025 will be as follows:

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

Our IMUs focus on managing customer relationships and delivering the “One EXL” value proposition to clients, maintaining 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,

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• 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 former Healthcare reportable segment, and including data and analytics services, 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 and Asia-Pacific geographies across all industry verticals.

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

This change in segment presentation will not have any effect on our consolidated statements of income, balance sheets or statements of cash flows.

The revised presentation will be reflected in our periodic and annual reports beginning in the first quarter of 2025.

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

We market and sell our services to existing and prospective clients through our sales and client management teams, which are aligned by our clients’ industry verticals and our capabilities such as digital operations and solutions and analytics.

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 IMU to represent all our services 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 IMU is helping 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 solutions and services and digital operations solutions and services.

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.

We provide data and AI-led solutions and services and digital operations solutions and 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.

Digital Operations and Solutions:

We provide our clients with a range of data and AI-driven digital operations and solutions include:

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

We have transformed various client operations using the above solutions such as underwriting operations, claims processing, accounts payables processing, utilization management, member and provider contact center services and collections and accounts receivable.

We 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.

Outcome-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.

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 digital and AI capabilities that drive data and technology-led transformation for our clients include generative AI, reinforcement learning, hyper automation, cloud data management, conversational AI, robotics, enterprise architecture development, integration platform as a service and AI for operations.

Digital operations:

Our digital operations revenue comes from our technology-enabled managed services that blend our deep domain expertise with industry-specific solutions and services that help clients run business functions with enhanced productivity, greater speed and improved accuracy.

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 reportable segments, aligned to our IMUs, which provide data and AI-led solutions and services and digital operations solutions and services, are described below:

We serve insurance brokers, reinsurers, and insurtech companies and provide services to insurers in the areas of property and casualty, life, disability, annuity, and retirement services.

Our offerings include claims management, premium and benefit administration, agency management, account reconciliation, actuarial and risk analytics, policy research, digital marketing, new business acquisition, underwriting support, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, finance and accounting, and customer service using digital technology, AI, including agentic AI, generative AI, machine learning (“ML”) and advanced automation.

We also combine our cloud-first digital insurance software solutions and industry expertise with agentic AI, generative AI, machine learning, advanced analytics, and platforms.

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 industry.

Additionally, we provide third-party administration for life and annuity insurance through our LifePRO® and Life Digital Suite SaaS platforms and also offer subrogation services to property and casualty insurers using our Subrosource® BPaaS platform.

Healthcare and Life Sciences:

We serve U.S.-based healthcare payers, providers, pharmacy benefit managers (“PBMs”), and life sciences organizations by combining deep healthcare and life sciences domain expertise with data, analytics and AI-led insights and technology-enabled services that transform how care is delivered, managed and paid.

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We provide care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement, commercial analytics and regulatory support services to improve healthcare outcomes, enhanced patient and provider experience, optimized healthcare spending and streamline healthcare administration processes by simplifying complex workflows.

For healthcare payers, we offer payment integrity services, pre and post-pay auditing services, payment analytics, subrogation and claims recovery, care management and patient navigation solutions.

For healthcare providers, we offer revenue cycle management, digital transformation, data-driven analytics and contact center solutions.

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

Our life sciences offerings combine domain expertise, data engineering, AI-driven insight generation, and digital operations to deliver outcomes across commercial, clinical, regulatory, and patient support functions.

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 and payment services, fintech, wealth and retirement services, capital markets, utilities, retail and consumer packaged goods, communications, media and entertainment, travel and leisure, transportation and logistics, infrastructure and other business services industries.

By integrating deep domain expertise with AI-driven decision-making, we enable financial institutions to innovate, enhance operational agility, and adapt to evolving market demands.

We provide risk management solutions, marketing and customer analytics solutions to our clients, along with our integrated operations services that encompass the full range of banking operations, including digital lending solutions that improve underwriting and compliance, omni-channel marketing, digital onboarding, know your customer (“KYC”)/anti-money laundering (“AML”) compliance, collections, fraud prevention, and customer servicing, among others.

Our industry-leading AI and automation-driven service offerings drive operational efficiency and foster innovation across the financial services and other industries.

Our enterprise services and solutions include domain-specific operations, integrated finance and accounting services, customer experience management, back-office operations, and revenue enhancement, such as pricing and billing, enabling our clients to deliver enhanced operational efficiency, and high-quality customer experiences.

For example, in the retail and consumer packaged goods sectors, we enable advanced supply chain performance through AI-driven analytics services supporting smarter merchandising, dynamic pricing, and accurate 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 operations, billing, and debt management.

International Growth Markets:

Our International Growth Markets (“IGM”) IMU is focused on strengthening our global footprint outside of North America.

We ensure customized delivery while leveraging EXL’s global capabilities in data, AI, and digital operations to drive differentiated business outcomes for our clients in growth markets.

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 clients and partners across the world.

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

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 transformation.

Outcome-based pricing arrangements are 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.

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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, in order to achieve 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, particularly 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 aspects of our clients’ business.

We provide care optimization and payment integrity 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 offerings, client base and go-to-market strategy, both organically and through acquisitions.

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For fiscal 2025, we generated revenues of $2,087.7 million compared to revenues of $1,838.4 million for fiscal 2024, an increase of $249.3 million, or 13.6%.

We serve clients mainly in the United States and the United Kingdom, with these two regions generating 82.6% and 11.7%, respectively, of our total revenues for fiscal 2024 and 84.1% and 10.9%, respectively, of our total revenues for fiscal 2023.

For fiscal 2024 and 2023, our total revenues from our top ten clients accounted for 33.2% and 34.0% of our total revenues, respectively.

We serve clients mainly in the North America, and the United Kingdom & Europe, with these two regions generating 82.7% and 14.7%, respectively, of our total revenues for fiscal 2025 and 82.3% and 14.8%, respectively, of our total revenues for fiscal 2024.

For fiscal 2025 and fiscal 2024, our total revenues from our top ten clients accounted for 34.0% and 33.2% 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.

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operational expenses for our operations centers;

• other costs which primarily include travel and costs relating to our direct mail operations.

• other costs which primarily include travel and costs relating to our direct marketing business.

The most significant components of our cost of revenues are salaries and benefits (including stock-based compensation), retirement benefits, recruitment, training, transport, meals, rewards and recognition and employee health and life insurance.

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We expect our cost of revenues to continue to increase as we continue to add professionals in our operations centers globally to service additional business and as wages continue to increase globally.

In particular, we expect recruitment and

training costs to continue to increase as we hire additional staff to service new clients and train existing staff to provide them with evolving skill sets.

In particular, we expect recruitment and training costs to continue to increase as we hire additional staff to service new clients and train existing staff to provide them with evolving skill sets.

There is significant competition for professionals with skills necessary to perform the services we offer to our clients.

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See Part I, Item 1A, “Risk Factors” under “Risks Related to Our Business––Employee wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.” However, a significant portion of our client contracts include inflation-based adjustments to our billing rates year over year which partially offset such increase in cost of revenues.

We generally experience a higher cost of revenues as a percentage of revenues during the initial 12 to 18 months in a long-term digital operations and solutions contract due to upfront investments in infrastructure, resource hiring and training during migration.

We generally experience a higher cost of revenues as a percentage of revenues during the initial 12 to 18 months in our long-term contracts due to upfront investments in infrastructure, resource hiring and training during migration.

The cost of revenues as a percentage of revenues improves as we scale up, achieve operational efficiencies and complete the migration.

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Operating Expenses

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dollar, however, a portion of our revenues are earned in the U.K.

pound sterling representing 10.7% and 10.1% of our total revenues in fiscal 2024 and 2023, respectively.

pound sterling representing 10.6% and 10.7% of our total revenues in fiscal 2025 and fiscal 2024, respectively.

We also incur a significant portion of our expenses in the Indian rupee, the Philippine peso, the South African rand and the U.K.

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The results of our operations could be substantially impacted as these currencies appreciate or depreciate against the U.S.

See Part I, Item 1A, “Risk Factors” under “Risks Related to the International Nature of Our Business––Currency exchange rate fluctuations in the various

currencies in which we do business, or the failure of our hedging strategies to mitigate such fluctuations, could have a material adverse effect on our results of operations,” as well as Note 2 - Summary of Significant Accounting Policies and Note 17 - Derivatives and Hedge Accounting to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data” and Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk-Components of Market Risk-Foreign Currency Risk.”

See Part I, Item 1A, “Risk Factors” under “Risks Related to the International Nature of Our Business––Currency exchange rate fluctuations in the various currencies in which we do business, or the failure of our hedging strategies to mitigate such fluctuations, could have a material adverse effect on our results of operations,” as well as Note 2 - Summary of Significant Accounting Policies and Note 17 - Derivatives and Hedge Accounting to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data” and Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk-Components of Market Risk-Foreign Currency Risk.”

Interest Expense

Interest expense primarily consist of interest on our borrowings under our revolving credit facility, term loan facility and convertible senior notes, finance leases and notional interest implicit in the purchase of property and equipment.

Interest expense primarily consists of interest on our borrowings under our revolving credit facility, term loan facility, finance leases and notional interest implicit in the purchase of property and equipment.

Other Income/(Expense), Net

Other income/(expense), net primarily consists of gain/(loss) on sale and mark-to-market, dividend income and interest income on our short-term and long-term investments, cash equivalents, as applicable.

Other income/(expense), net also consists of changes in fair value of contingent consideration related to business combinations, interest on refunds received from income tax authorities in India on completion of tax assessments, profit or loss on disposal of long-lived assets and components of net periodic benefit cost such as interest cost, expected return on plan assets and amortization of actuarial gain or loss.

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periodic benefit cost such as interest cost, expected return on plan assets, amortization of actuarial gain/(loss) and prior period service costs.

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

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

In October 2021, the Organization for Economic Co-operation and Development (“OECD”) introduced Pillar Two Framework imposing a global minimum tax rate of 15%.

In October 2021, the Organization for Economic Co-operation and Development (“OECD”) introduced the Pillar Two Framework imposing a global minimum tax rate of 15%.

We have determined that the impact of the Pillar Two Framework did not have material impact on our consolidated financial statements.

Critical Accounting Policies and Estimates

On July 4, 2025, the United States enacted new tax legislation known as the One Big Beautiful Bill Act (“OBBBA”), which effectively extends certain provisions of the 2017 Tax Cuts and Jobs Act, including adjustments to several provisions that were scheduled to sunset, phase out, or phase in.

As a result of our election to expense research or experimental expenditures incurred in the United States and the related transition provisions, our U.S.

cash taxes for 2025 will decrease, while there will be no significant impact on our effective tax rate.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon the consolidated financial statements included in this Annual Report on Form 10-K, which have been prepared in accordance with U.S.

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A summary of our significant accounting policies is included in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data.”

We consider the policies discussed below to be critical to an understanding of our consolidated financial statements, as their application places the most significant demands on management’s judgment regarding matters that are inherently uncertain at the time an estimate is made.

These policies include revenue recognition, allowance for expected credit losses, business combinations and goodwill, stock-based compensation, income taxes, employee benefits, and contingencies.

We consider the following accounting estimates to be the most critical to an understanding of our consolidated financial statements, as their application places the most significant demands on management’s judgment regarding matters that are inherently uncertain at the time an estimate is made.

These accounting policies, estimates and the associated risks are set out below.

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Revenue Recognition

Revenue is recognized when services are provided to our customers, in an amount that reflects the consideration which we expect to be entitled to in exchange for the services provided.

We recognize revenue when we satisfy a performance obligation by providing services to a customer.

Revenue is measured based on consideration specified in a contract with a customer and excludes value added tax, business tax, any applicable discounts and amounts collected on behalf of third parties.

Reimbursements of out-of-pocket expenses are included as a part of revenue.

Significant judgments

Arrangements with Multiple Performance Obligations

We sometimes enter into contracts with our customers which include promises to transfer multiple products and services to the customer.

Determining whether products and services are considered as distinct performance obligations that should be accounted for separately rather than as one performance obligation may require significant judgment.

The transaction price is allocated to performance obligations on relative standalone selling price basis.

Judgment is also required to determine the standalone selling price for each distinct performance obligation.

In instances where the standalone selling price is not directly observable, it is determined using information that may include market conditions and other observable inputs.

The contracts with our customers may be modified to add, remove or change existing performance obligations, which requires judgment to evaluate and determine whether such performance obligations are to be accounted for on a prospective basis as a separate contract or as a termination of an existing contract and creation of a new contract.

Variable Consideration

Variability in the transaction price arises primarily due to service level agreements, volume discounts entailing variability in revenue earned, and contracts under our payment integrity services whereby variability in revenue is attributable to the amount we enable our customers to recover.

We consider our historical experience, including trends with similar transactions and expectations regarding the contract in estimating the amount of variable consideration that should be recognized during a period.

We believe that the expected value method is most appropriate for determining the variable consideration since we have a large number of contracts with similar nature of transactions/services.

Type of Contracts Requiring Judgment

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Based on guidance on “variable consideration” in Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), we use our historical experience and projections to determine the expected recoveries from our customers and recognize revenue based upon such expected recoveries.

We believe that the expected value method is most appropriate for determining the variable consideration since we have a large number of contracts with similar nature of transactions/services.

Any adjustment required due to change in estimates are recorded in the period in which such change is identified.

The estimated amount of revenue to be collected from our customers are presented as contract assets within “Other Current Assets”.

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Revenues from fixed-price contracts are recognized considering costs incurred to date relative to total estimated costs at completion to measure progress towards satisfying the performance obligations.

The use of this method requires significant judgment to estimate the stage of completion and/or cost required to complete the contracted scope of work, including assumptions and estimates relative to the length of time to complete the project and the nature and complexity of the work to be performed and resources engaged.

We regularly monitor these estimates throughout the execution of the project and record changes in the period in which a change in an estimate is determined.

Allowance for Expected Credit Losses

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We account for all business combinations using the acquisition method of accounting as prescribed by ASC Topic 805, Business Combinations .

The guidance requires the use of significant estimates and assumptions in determining the fair value of identifiable assets acquired and liabilities assumed, including intangible assets and contingent consideration, and allocation of

purchase price over such assets and liabilities on the acquisition date.

The significant estimates and assumptions include, but are not limited to, the timing and amount of future revenue and cash flows based on, among other things, discount rate reflecting the risk inherent in future cash flows, customer attrition rates and the long-term growth rate applied within the discounted cash flow model.

This requires a high degree of our judgment and the need to involve fair value specialists to evaluate the reasonableness of our valuation methodology and the selection of inputs to the valuation.

In addition, assets acquired and liabilities assumed including uncertain tax positions and tax-related valuation allowances in connection with business combinations are initially estimated as of the acquisition date.

We subsequently re-evaluate the assets acquired and liabilities assumed, including additional assets and liabilities identified subsequent to acquisition date, with any adjustments to our preliminary estimates being recorded to goodwill within the measurement period (up to one year from the acquisition date).

We also perform a quantitative assessment of goodwill impairment, if based on the qualitative factors, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

We also perform a quantitative assessment of goodwill impairment if, based on the qualitative factors assessed during the fourth quarter, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

The significant estimates and assumptions include, the timing and amount of future revenue and cash flows, discount rate reflecting the risk inherent in future cash flows and the long-term growth rate applied within the discounted cash flow model.

If based on the quantitative impairment analysis, the carrying value of the goodwill of a reporting unit exceeds the fair value of such goodwill, an impairment loss is recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to that reporting unit.

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 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.

Stock-Based Compensation

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We grant performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees.

Generally, we grant PRSUs cliff vest based on an aggregated revenue target (“PUs”) for a three-year period, while grants based on market conditions (“MUs”) are contingent on meeting or exceeding the total shareholder return relative to a group of peer companies specified under our 2018 Omnibus Incentive Plan (the “2018 Plan”), and are measured over a three-year performance period.

Generally, we grant PRSUs that cliff vest based on an aggregated revenue target (“PUs”) for a three-year period, while grants based on market conditions (“MUs”) are contingent on meeting or exceeding the total shareholder return relative to a group of peer companies, and are measured over a three-year performance period.

The fair value of each PU is determined based on the market price of one share of our common stock on the day prior to the date of grant.

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We periodically assess the reasonableness of our assumptions and update our estimates as required.

If actual results differ significantly from our estimates, stock-based compensation expense and our results of operations could be materially affected.

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results differ significantly from our estimates, stock-based compensation expense and our results of operations could be materially affected.

Stock-based compensation expense associated with our 2022 Employee Stock Purchase Plan is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period.

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With respect to any entity that benefits from a corporate tax holiday, deferred tax assets or liabilities for existing temporary differences are recorded only to the extent such temporary differences are expected to reverse following the expiration of the tax holiday.

We also evaluate potential exposures related to tax contingencies or claims made by the tax authorities in various jurisdictions in order to determine whether a reserve may be required.

A reserve is recorded if we believe that a loss is more likely than not, and if the amount of such loss can be reasonably estimated.

Such reserves are based on estimates and, consequently, are subject to changing facts and circumstances, including the progress of ongoing audits, changes in case law and the passage of new legislation.

We have established adequate reserves to cover any potential tax contingencies or claims.

ASC Topic 740, Income Taxes , requires companies to recognize, measure, present and disclose uncertain tax positions.

We employ a two-step process for recognizing and measuring uncertain tax positions.

The first step is to evaluate the tax position for recognition by determining, based on the technical merits, that the position will, more likely than not, be sustained upon examination.

The second step is to measure the tax benefit as the largest amount of the tax benefit that is more likely than not to be realized upon settlement.

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.

We recognize interest and penalties related to uncertain tax positions as a component of the provision for income taxes.

We have established adequate reserves to cover all uncertain tax positions.

Employee Benefits

We record contributions to defined contribution plans in our consolidated statements of income in the period in which services are rendered by the covered employees.

Current service costs for defined benefit plans are recognized in the period to which they relate.

The liability in respect of defined benefit plans is calculated annually by using the projected unit credit method and various actuarial assumptions including discount rates, mortality, expected return on assets, expected increase in the compensation rates and attrition rates.

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If actual results differ significantly from our estimates, current service costs for defined benefit plans and our results of operations could be materially impacted.

Effective November 21, 2025, the Government of India has consolidated multiple existing labor legislations into a unified framework comprising four labor codes collectively referred to as the new “Labor Codes”.

The Labor Codes, among other things introduce changes, including a uniform definition of wages.

These legislative changes have resulted in an increase in the projected benefit obligation, which has been recognized as prior service cost in other comprehensive income.

Additionally, the Government of India is in the process of issuing rules and regulations and clarifying certain aspects of the Labor Codes.

The issuance of rules and regulations, as well as the outcome of these clarifications, could impact our compensation and benefit expenses in India.

Contingencies

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Such revisions in estimates of any potential liabilities could have a material impact on our results of operations, financial position and cash flows.

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Results of Operations

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Due to rounding, the numbers presented in the tables included in this Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may not add up precisely to the totals provided.

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Fiscal 2025 Compared to Fiscal 2024

Revenues, net:

The following table summarizes our revenues by reportable segments:

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Insurance $ 710.6 $ 656.4 $ 54.2 8.3 % 34.0 % 35.7 %

Healthcare 116.4 106.0 10.4 9.8 % 6.3 % 6.5 %

Emerging Business 311.7 265.7 46.0 17.3 % 17.0 % 16.3 %

Analytics 796.3 729.1 67.2 9.2 % 43.3 % 44.7 %

Total revenues, net $ 1,838.4 $ 1,630.7 $ 207.7 12.7 % 100.0 % 100.0 %

Revenues for fiscal 2024 were up by $207.7 million, or 12.7%, compared to fiscal 2023, driven primarily by revenue growth from our new and existing clients in all of our reportable segments.

Revenue growth in Insurance of $84.1 million from fiscal 2023, was primarily driven by expansion of business from our new and existing clients during fiscal 2024.

Revenue growth in Healthcare of $10.4 million from fiscal 2023, was primarily driven by expansion of business from our existing clients during fiscal 2024.

Revenue growth in Emerging Business of $46.0 million from fiscal 2023 was primarily driven by expansion of business from our new and existing clients of $45.4 million and an increase in revenues of $0.6 million that was mainly attributable to the appreciation of the U.K.

pound sterling against the U.S.

dollar during fiscal 2024.

Revenue growth in Analytics of $67.2 million from fiscal 2023 was primarily driven by higher volumes in our annuity and project-based engagements from our new and existing clients of $66.5 million, including incremental revenue from our August 2024 acquisition of ITI Data and an increase in revenues of $0.7 million that was mainly attributable to the appreciation of the U.K.

pound sterling against the U.S.

dollar during fiscal 2024.

Healthcare and Life Sciences 532.5 430.7 101.8 23.7 % 25.5 % 23.4 %

Banking, Capital Markets and Diversified Industries 482.4 426.7 55.7 13.0 % 23.1 % 23.2 %

International Growth Markets 362.2 324.6 37.6 11.6 % 17.4 % 17.7 %

Revenues, net $ 2,087.7 $ 1,838.4 $ 249.3 13.6 % 100.0 % 100.0 %

Revenues for fiscal 2025 were up by $249.3 million, or 13.6%, compared to fiscal 2024, driven by the expansion of business from our existing clients across all reportable segments by 10.6% and revenue from new client wins, including revenue from our August 2024 acquisition of Incandescent Technologies, Inc.

(“ITI Data”) by 3.0% during fiscal 2025.

Revenue growth in Insurance by 8.3% was driven by the expansion of business from our existing clients by 7.5% and new clients by 0.8% during fiscal 2025, compared to fiscal 2024.

Revenue growth in Healthcare and Life Sciences by 23.7% was driven by the expansion of business from our existing clients by 22.4% and new clients, including revenue from ITI Data, by 1.3% during fiscal 2025, compared to fiscal 2024.

Revenue growth in Banking, Capital Markets and Diversified Industries by 13.0% was driven by the expansion of business from our existing clients by 5.6% and new clients, including revenue from ITI Data, by 7.4% during fiscal 2025, compared to fiscal 2024.

Revenue growth in International Growth Markets by 11.6% was driven by the expansion of business from our existing clients by 8.0% and new clients, including revenue from ITI Data, by 3.9%, partially offset by a foreign exchange loss, net of hedging by 0.3% during fiscal 2025, compared to fiscal 2024.

Cost of Revenues and Gross Margin:

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Insurance $ 453.8 $ 424.9 $ 28.9 6.8 % 36.1 % 35.3 % 0.8 %

Healthcare 77.9 69.3 8.6 12.5 % 33.0 % 34.6 % (1.6) %

Emerging Business 181.4 150.9 30.5 20.2 % 41.8 % 43.2 % (1.4) %

Analytics 497.7 460.9 36.8 8.0 % 37.5 % 36.8 % 0.7 %

Healthcare and Life Sciences 300.2 243.2 57.0 23.5 % 43.6 % 43.6 % — %

Banking, Capital Markets and Diversified Industries 298.8 268.6 30.2 11.2 % 38.1 % 37.1 % 1.0 %

International Growth Markets 233.8 210.7 23.1 10.9 % 35.5 % 35.1 % 0.4 %

Total $ 1,286.6 $ 1,147.4 $ 139.2 12.1 % 38.4 % 37.6 % 0.8 %

Cost of revenues for fiscal 2025 increased by $139.2 million, or 12.1%, compared to fiscal 2024.

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.

See Note 26 – Restructuring Costs to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data.” Our gross margin for fiscal 2024 was 37.6% compared to 37.3% for fiscal 2023, an increase of 30 basis points ("bps").

The increase in cost of revenues in Insurance of $48.6 million from fiscal 2023 was primarily due to increases in employee-related costs of $42.3 million on account of higher headcount, restructuring costs and wage inflation, higher technology costs of $4.8 million on account of increased subscription to cloud-based software licenses and our continued investments in our hybrid working model, higher facilities costs of $3.9 million and higher other operating costs of

$3.1 million, partially offset by foreign exchange gain, net of hedging of $5.5 million.

Gross margin in Insurance increased by 90 bps from fiscal 2023, primarily due to operational efficiencies during fiscal 2024.

The increase in cost of revenues in Healthcare of $8.6 million from fiscal 2023 was primarily due to increases in employee-related costs of $9.0 million on account of higher headcount and wage inflation, and higher technology costs of $1.3 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model, partially offset by foreign exchange gain, net of hedging of $1.7 million.

Gross margin in Healthcare decreased by 160 bps from fiscal 2023, primarily due to ramp-ups for certain existing clients during fiscal 2024.

The increase in cost of revenues in Emerging Business of $30.5 million from fiscal 2023 was primarily due to increases in employee-related costs of $28.6 million on account of higher headcount, restructuring costs and wage inflation, higher technology costs of $3.0 million on account of increased subscription to cloud-based software licenses and use of the hybrid working model and higher other operating costs $2.0 million, partially offset by foreign exchange gain, net of hedging of $3.1 million.

Gross margin in Emerging Business decreased by 140 bps from fiscal 2023, primarily due to ramp-ups for certain existing clients during fiscal 2024.

The increase in cost of revenues in Analytics of $36.8 million from fiscal 2023 was primarily due to increases in employee-related costs of $34.8 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 $8.6 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 $4.2 million and foreign exchange gain, net of hedging of $2.4 million.

Gross margin in Analytics increased by 70 bps from fiscal 2023, primarily due to higher revenues and operational efficiencies, partially offset by impact of restructuring costs of 40 bps during fiscal 2024.

The increase in cost of revenues was primarily due to increases in employee-related costs of $152.9 million on account of higher headcount and wage inflation, higher facilities, technology and other operating costs of $18.9 million, partially offset by lower mail and data expenses in our direct marketing business of $16.7 million and a foreign exchange gain, net of hedging of $15.9 million.

Our gross margin for fiscal 2025 was 38.4%, compared to 37.6% for fiscal 2024, an increase of 80 basis points (“bps”) primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs during fiscal 2025, compared to fiscal 2024.

The increase in cost of revenues in Insurance by $28.9 million for fiscal 2025 was primarily due to increases in employee-related costs of $48.4 million on account of higher headcount and wage inflation, higher technology and facilities costs of $5.0 million, partially offset by lower mail and data expenses in our direct marketing business of $16.7 million, other operating

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costs of $2.3 million and a foreign exchange gain, net of hedging of $5.5 million.

Gross margin in Insurance increased by 80 bps, primarily due to higher revenues and operational efficiencies during fiscal 2025, compared to fiscal 2024.

The increase in cost of revenues in Healthcare and Life Sciences by $57.0 million for fiscal 2025 was primarily due to increases in employee-related costs of $53.4 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $2.0 million, higher technology costs of $1.6 million and other operating costs of $3.7 million, partially offset by a foreign exchange gain, net of hedging of $3.7 million.

Gross margin in Healthcare and Life Sciences remained flat during fiscal 2025, compared to fiscal 2024.

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $30.2 million for fiscal 2025 was primarily due to increases in employee-related costs of $28.9 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $2.2 million, higher facilities and other operating costs of $2.8 million, partially offset by a foreign exchange gain, net of hedging of $3.7 million.

Gross margin in Banking, Capital Markets and Diversified Industries increased by 100 bps, primarily due to higher revenues and operational efficiencies during fiscal 2025, compared to fiscal 2024.

The increase in cost of revenues in International Growth Markets by $23.1 million for fiscal 2025 was primarily due to increases in employee-related costs of $22.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology and other operating costs of $3.9 million, partially offset by a foreign exchange gain, net of hedging of $3.0 million.

Gross margin in International Growth Markets increased by 40 bps, primarily due to higher revenues and operational efficiencies during fiscal 2025, compared to fiscal 2024.

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

Fiscal Dollar Change Percentage

(dollars in millions)

General and administrative expenses $ 225.7 $ 198.3 $ 27.4 13.8 %

Selling and marketing expenses 146.5 120.2 26.3 21.9 %

Selling, general and administrative expenses $ 372.2 $ 318.5 $ 53.7 16.8 %

The increase in SG&A expenses of $53.7 million from fiscal 2023 was primarily due to higher employee-related costs of $34.2 million on account of higher headcount and wage inflation, including incremental costs related to our August 2024 acquisition of ITI Data, higher investments in digital and generative AI capabilities of $13.2 million, higher sales and marketing spend of $1.9 million, restructuring costs, litigation settlement costs and associated legal fees of $3.1 million and higher other operating costs of $2.7 million.

This increase in SG&A expenses was partially offset by foreign exchange gain, net of hedging of $1.4 million during fiscal 2024, compared to fiscal 2023.

SG&A expenses as a percentage of net revenues increased by 0.2% to 20.5% during fiscal 2025, compared to fiscal 2024.

The increase in SG&A expenses by $56.0 million during fiscal 2025, compared to fiscal 2024 was primarily due to increases in employee-related costs of $52.9 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, increase in investments in digital and generative AI capabilities of $2.8 million, higher sales and marketing and other operating costs of $3.4 million.

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

Depreciation and Amortization.

Fiscal Dollar Change Percentage change

(dollars in millions)

Depreciation expense $ 41.6 $ 35.8 $ 5.8 16.1 %

Intangible amortization expense 13.6 14.7 (1.1) (7.1) %

Depreciation and amortization expense $ 55.2 $ 50.5 $ 4.7 9.4 %

The increase in depreciation expense of $5.8 million from fiscal 2023 was primarily due to investments in digital capabilities, computers and networking equipment during fiscal 2024.

The decrease in intangibles amortization expense of $1.1 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 fiscal 2024, compared to fiscal 2023.

Depreciation and amortization expenses as a percentage of net revenues decreased by 0.2% during fiscal 2025, compared to 2024.

The increase in depreciation and amortization expense by 7.0% during fiscal 2025, compared to fiscal 2024 was primarily due to investments in infrastructure, technology assets and digital capabilities, partially offset by intangibles amortization expense.

Income from Operations.

Income from operations increased by $24.8 million, or 10.4%, from $238.8 million for fiscal 2023 to $263.6 million for fiscal 2024, primarily due to higher revenues and higher gross margins, partially offset by higher SG&A expenses during fiscal 2024.

The increase in income from operations by 19.0% during fiscal 2025, compared to fiscal 2024 was primarily due to higher revenues and gross margins, partially offset by higher SG&A expenses.

Foreign Exchange Gain, net.

We recorded a foreign exchange gain, net of $2.8 million for fiscal 2025, compared to a foreign exchange gain, net of $0.9 million for fiscal 2024.

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

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pound sterling and the South African rand during fiscal 2025, compared to fiscal 2024.

The average exchange rate of the U.S.

dollar against the Indian rupee increased from 82.60 during fiscal 2023 to 83.76 during fiscal 2024.

The average exchange rate of the U.S.

dollar against the Philippine peso increased from 55.56 during fiscal 2023 to 57.39 during fiscal 2024.

The average exchange rate of the U.K.

pound sterling against the U.S.

dollar increased from 1.25 during fiscal 2023 to 1.28 during fiscal 2024.

The average exchange rate of the U.S.

dollar against the South African rand decreased from 18.51 during fiscal 2023 to 18.35 during fiscal 2024.

We recorded a foreign exchange gain, net of $1.5 million for fiscal 2023 compared to a foreign exchange gain, net of $0.9 million for fiscal 2024.

Interest expense .

Interest expense increased from $13.2 million for fiscal 2023 to $19.3 million for fiscal 2024, primarily due to higher average borrowings during fiscal 2024, compared to fiscal 2023.

The decrease in interest expense by $1.7 million during fiscal 2025, compared to fiscal 2024 was primarily due to a lower average effective interest rate during fiscal 2025, compared to fiscal 2024.

Other Income, net.

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(dollars in millions)

Gain on sale and mark-to-market on investments $ 5.7 $ 5.0 $ 0.7 12.9 %

Gain on sale and fair value mark-to-market on investments $ 8.3 $ 5.7 $ 2.6 47.3 %

Interest and dividend income 9.6 9.9 (0.3) (2.8) %

Fair value changes of contingent consideration 0.6 (1.9) 2.5 (131.0) %

Others, net (0.1) (0.3) 0.2 (73.9) %

Fair value changes of contingent consideration (2.3) 0.6 (2.9) NM (1)

Others, net 0.4 (0.1) 0.5 NM (1)

Other income, net $ 16.0 $ 16.1 $ (0.1) (0.2) %

Other income, net increased by $5.3 million, from $10.8 million for fiscal 2023 to $16.1 million for fiscal 2024.

The increase is primarily due to higher yield on our investments of $2.6 million and net impact of $2.5 million from changes in fair value of contingent consideration related to our June 2022 acquisition of Inbound Media Group, LLC and December 2021 acquisition of Clairvoyant during fiscal 2024, compared to fiscal 2023.

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(1) Not Meaningful

Other income, net decreased marginally by $0.1 million during fiscal 2025, compared to fiscal 2024 due to changes in the fair value of contingent consideration related to our August 2024 acquisition of ITI Data of $2.3 million and reversal of contingent consideration liability of $0.6 million related to our June 2022 acquisition of Inbound Media Group, LLC during fiscal 2024, partially offset by higher yield on our investments and other income of $1.9 million, and reversal of certain contingent liabilities of $0.9 million that were no longer required in fiscal 2025.

Income Tax Expense .

The effective tax rate increased from 22.5% for fiscal 2023 to 24.1% for fiscal 2024.

We recorded income tax expense of $62.9 million and $53.5 million for fiscal 2024 and 2023, respectively.

The increase in income tax expense was primarily as a result of higher profit, increase in non-deductible expenses and lower excess tax benefits related to stock-based compensation, partially offset by decrease in foreign tax rate differential during fiscal 2024, compared to fiscal 2023.

Net income increased from $184.6 million for fiscal 2023 to $198.3 million for fiscal 2024, primarily due to increase in income from operations of $24.8 million and higher other income, net of $5.3 million, partially offset by higher interest expense of $6.1 million, lower foreign exchange gain, net of $0.6 million and higher income tax expense of $9.4 million.

The effective tax rate decreased from 24.1% for fiscal 2024 to 20.3% for fiscal 2025.

We recorded income tax expense of $63.7 million and $62.9 million for fiscal 2025 and fiscal 2024, respectively.

The increase in income tax expense was primarily as a result of higher profit and an increase in non-deductible expenses, partially offset by higher excess tax benefits and foreign derived intangible income deduction during fiscal 2025, compared to fiscal 2024.

The increase in net income by 26.6% during fiscal 2025, compared to fiscal 2024 was attributable to the aforementioned factors.

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Liquidity and Capital Resources

Fiscal Dollar Change

2024 2023 Percentage Change

Fiscal Dollar Change Percentage Change

(dollars in millions)

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As of December 31, 2025 and 2024, we had $328.4 million and $340.6 million, respectively, in cash, cash equivalents and short-term investments, of which $285.8 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.

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.

During 2025, some of our foreign subsidiaries repatriated $90.8 million (net of $5.6 million withholding taxes) to the United States.

Operating Activities:

Net cash provided by operating activities was $268.5 million for fiscal 2024, compared to $211.2 million for fiscal 2023, reflecting higher cash earnings, partially offset by higher working capital needs.

Net cash provided by operating activities was $350.7 million for fiscal 2025, compared to $268.5 million for fiscal 2024, reflecting higher cash earnings and lower working capital needs.

The major drivers contributing to the increase of $82.2 million year-over-year included the following:

• Increase in cash earnings, including adjustments for non-cash and other items contributed higher cash flow of $66.8 million for fiscal 2025, compared to fiscal 2024.

These adjustments include fair value changes in investments, unrealized foreign currency exchange gain, deferred tax effects, stock-based employee compensation, fair value changes in contingent consideration, depreciation and amortization of long-lived assets and intangibles acquired in business combinations, among others.

• Changes in accounts receivable, including advance billings, contributed higher cash flow of $61.8 million for fiscal 2024, compared to fiscal 2023.

Collections in accounts receivable, including advance billings was driven by revenue growth for fiscal 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 $51.8 million in fiscal 2025, compared to the fiscal 2024.

Our days sales outstanding were 60 days as of December 31, 2025, compared to 62 days as of December 31, 2024.

• Payment of contingent consideration related to our December 2021 acquisition of Clairvoyant contributed to a higher cash payout of $11.0 million for fiscal 2024, compared to fiscal 2023.

• Changes in other assets, accounts payables including other liabilities contributed higher cash payout of $11.5 million for fiscal 2024, compared to fiscal 2023.

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

(“Clairvoyant”) contributed to a higher cash payout of $11.0 million during fiscal 2024, whereas no such payment occurred during fiscal 2025.

• Changes in other assets, accounts payables including other liabilities contributed to lower cash payout of $56.2 million for fiscal 2025, compared to fiscal 2024.

Investing Activities:

Cash used for investing activities were $119.1 million for fiscal 2024, compared to $12.0 million for fiscal 2023.

The increase in cash used for investing activities of $107.1 million year-over-year is primarily due to higher net purchase of investments of $88.8 million and net cash used for business acquisition of $24.3 million for fiscal 2024, compared to fiscal 2023.

This was partially offset by lower capital expenditures in infrastructure, technology assets, software and product developments of $6.5 million for fiscal 2024, compared to fiscal 2023.

Net cash used for investing activities were $49.2 million for fiscal 2025, compared to $119.1 million for fiscal 2024.

The decrease of $69.9 million was primarily due to higher proceeds from redemption of investments of $52.3 million during fiscal 2025, as compared to fiscal 2024 and net cash used for business acquisition of $24.3 million during fiscal 2024 whereas no such payment occurred during fiscal 2025.

This was partially offset by higher cash paid for capital expenditures, including investments in infrastructure, technology assets and digital capabilities of $6.2 million during fiscal 2025, compared to fiscal 2024.

Financing Activities:

Cash used for financing activities were $119.1 million for fiscal 2024, compared to $181.4 million for fiscal 2023.

The decrease in cash used for financing activities of $62.3 million year-over-year was primarily due to net proceeds from borrowings under our revolving credit facility and new term loan facility of $88.8 million for fiscal 2024, compared to net repayment of our borrowings of $50.0 million for fiscal 2023.

The increase was also due to higher purchases of treasury stock of $76.1 million under our share repurchase program for fiscal 2024, compared to fiscal 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 AI, infrastructure and purchase telecommunications equipment and computer hardware and software in connection with managing client operations.

We incurred $46.3 million of capital expenditures during fiscal 2024.

Net cash used for financing activities were $312.8 million for fiscal 2025, compared to $119.1 million for fiscal 2024.

The increase of $193.7 million was primarily due to higher purchases of treasury stock of $120.6 million under our share repurchase programs and privately repurchased shares during fiscal 2025, compared to fiscal 2024 and lower net proceeds from borrowings of $78.1 million during fiscal 2025, compared to fiscal 2024.

This was partially offset by payment of contingent consideration related to our December 2021 acquisition of Clairvoyant of $4.0 million during fiscal 2024 whereas no such payment occurred during fiscal 2025.

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.

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We incurred $52.6 million of capital expenditure during fiscal 2025.

We expect to incur total capital expenditures of between $50 million to $55 million in fiscal 2026, 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.

See Note 25 - Commitments and Contingencies to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data” for further details.

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

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.

See Note 25 - Commitments and Contingencies to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data” for further information.

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

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December 31, 2025 December 31, 2024

(dollars in millions)

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

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We held a $300.0 million revolving credit facility pursuant to our credit agreement (the “Credit Agreement”), dated as of November 21, 2017, with certain lenders and Citibank N.A.

as Administrative Agent, which was amended and restated on April 18, 2022 (the “2022 Credit Agreement”).

Among other things, the 2022 Credit Agreement (a) provides for the issuance of new revolving credit commitments such that the aggregate amount of revolving credit commitments available as of April 18, 2022 is equal to $400.0 million;

and (b) extends the maturity date of the revolving credit facility from November 21, 2022 to April 18, 2027.

On August 9, 2024, we and each of our wholly owned material domestic subsidiaries entered into a First Amendment to Amended and Restated Credit Agreement with Citibank, N.A., as Administrative Agent, and certain lenders (the “2024 Credit Agreement”), pursuant to which the parties thereto amended and restated the 2022 Credit Agreement.

Among other things, the 2024 Credit Agreement (a) provides for a $100.0 million increase to the revolving credit commitments such that the aggregate amount of revolving credit commitments available as of August 9, 2024 is equal to $500.0 million;

and (b) provides for the issuance of a new term loan facility in the aggregate amount of $100.0 million with an annual prepayment amount of 5%.

as Administrative Agent.

The Credit agreement was amended and restated in April 2022 followed by the First Amendment to Amended and Restated Credit Agreement in August 2024 (the “2024 Credit Agreement”).

Among other things, the 2024 Credit Agreement increased revolving credit commitments to $500.0 million and provided a new term loan facility of $100.0 million with an annual repayment amount of 5%.

The increased revolving credit facility and the new term loan facility both mature on April 18, 2027.

The 2024 Credit Agreement includes a letter of credit sub facility and is voluntarily pre-payable from time to time without premium or penalty.

Borrowings under the revolving credit facility can be used for working capital and general corporate purposes, including permitted acquisitions.

Borrowings of $100.0 million under the term loan facility (which was drawn based on adjusted SOFR) were used to repay the borrowings outstanding under the revolving credit facility on August 9, 2024.

Obligations under the 2024 Credit Agreement are guaranteed by our wholly-owned material domestic subsidiaries and are secured by all or substantially all of our and our material domestic subsidiaries’ assets.

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Under the 2024 Credit Agreement, obligations are guaranteed by our wholly-owned material domestic subsidiaries and secured by substantially all of our and our material domestic subsidiaries’ assets.

The agreement includes a letter of credit sub-facility, permits voluntary prepayments without premium or penalty, and allows borrowings to be used for working capital, general corporate purposes, and permitted acquisitions.

The 2024 Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on the ability to incur indebtedness, create liens, make certain investments, make certain dividends and distributions, enter into, or undertake, certain liquidations, mergers, consolidations or acquisitions and dispose of certain assets or subsidiaries.

In addition, the 2024 Credit Agreement contains a covenant to not permit the interest coverage ratio or the total net leverage ratio for the four consecutive quarter period ending on the last day of each fiscal quarter, to be less than 3.0 to 1.0 or more than 3.5 to 1.0, respectively.

The 2024 Credit Agreement bears interest at a rate equal to specified prime rate (alternate base rate) or adjusted SOFR, plus, in each case, an applicable margin.

The applicable margin on the revolving credit facility is tied to our total net leverage ratio and ranges from 0% to 0.75% per annum on loans pegged to the specified prime rate, and 0.875% to 1.75% per annum on loans pegged to the adjusted SOFR.

The applicable margin on the term loan facility is also tied to our total net leverage ratio and ranges from 0.125% to 1.00% per annum on loans pegged to the specified prime rate, and 1.125% to 2.00% per annum on loans pegged to the adjusted SOFR.

We were in compliance with the financial covenants under the 2024 Credit Agreement.

Under the 2024 Credit Agreement, obligations bear interest at a rate equal to either the specified prime rate (alternate base rate) or the adjusted secured overnight financing rate (SOFR), in each case plus an applicable margin tied to our total net leverage ratio.

The applicable margin on the revolving credit facility ranges from 0% to 0.75% per annum on loans pegged to the specified prime rate and 0.88% to 1.75% per annum on loans pegged to the adjusted SOFR, while the margin on the term loan facility ranges from 0.13% to 1.00% per annum on loans pegged to the specified prime rate, and 1.13% to 2.00% per annum on loans pegged to the adjusted SOFR.

The revolving credit commitments under the 2024 Credit Agreement are subject to a commitment fee which is also tied to our total net leverage ratio, and ranges from 0.13% to 0.28% per annum on the average daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving loans and letter of credit obligations.

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Term loan facility 5.7 % 6.5 %

As of December 31, 2024 and 2023, we were in compliance with the financial covenants under the 2024 Credit Agreement.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see Note 2 - Summary of Significant Accounting Policies - Recent Accounting Pronouncements to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data.”

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

What changed 10-K

Item 7. Management’s Discussion and Analysis