Quantitative and Qualitative Disclosures About Market Risk
−Removed: Market risk is the volatility of future earnings and cash flows that may result from changes in interest rates and foreign currency exchange rates.
−Removed: The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments.
−Removed: Market risk is attributable to all market sensitive financial instruments including foreign currency receivables and payables.
−Removed: Our exposure to market risk is a function of our expenses and revenue generating activities in foreign currencies.
+Added: Our exposure to market risk arises from our expenses and revenue generating activities in foreign currencies, and changes in interest rates.
The objective of market risk management is to avoid excessive exposure to our earnings and equity of such market driven losses.
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dollar and currencies of other countries where we have operations.
−Removed: The exchange rates among the Indian rupee, the Philippine peso, the U.K.
+Added: The exchange rates among the Indian rupee, the Philippine peso, the South African rand, the U.K.
pound sterling and the U.S.
dollar have fluctuated within the fiscal 2025, over the recent years and may fluctuate in the future.
−Removed: Our foreign currency exchange rate risk primarily arises from our foreign currency revenues, expenses incurred by our subsidiaries, including foreign subsidiaries in foreign currencies and foreign currency accounts receivable and payable.
−Removed: The average exchange rate of the U.S dollar against the Indian rupee increased from 82.60 for fiscal 2023 to 83.76 for fiscal 2024, representing a depreciation of 1.4% against the U.S dollar.
−Removed: The average exchange rate of the U.S dollar against the Philippine peso increased from 55.56 for fiscal 2023 to 57.39 for fiscal 2024, representing a depreciation of 3.3% against the U.S dollar.
−Removed: The average exchange rate of the U.K.
−Removed: pound sterling against the U.S.
−Removed: dollar increased from 1.25 for fiscal 2023 to 1.28 for fiscal 2024, representing an appreciation of 2.6% against the U.S dollar.
−Removed: Based upon our level of operations for fiscal 2024 and excluding any hedging arrangements that we had in place during that period, a 10% appreciation/depreciation in the Indian rupee, the Philippine peso and the U.K.
+Added: Based upon our level of operations for fiscal 2025 and excluding any hedging arrangements that we had in place during that period, a 10% appreciation/depreciation in the Indian rupee, the Philippine peso, the South African rand and the U.K.
pound sterling against the U.S.
−Removed: dollar would have increased/decreased our revenues by approximately $7.1 million, $0.5 million and $10.8 million, respectively and increased/decreased our expenses incurred by approximately $46.8 million, $12.9 million and $4.5 million, respectively for fiscal 2024.
+Added: dollar would have increased/decreased our revenues by approximately $8.0 million, $0.2 million, $1.8 million and $14.4 million, respectively and increased/decreased our expenses incurred by approximately $55.2 million, $14.8 million, $5.9 million and $5.4 million, respectively for fiscal 2025.
In order to mitigate our exposure to foreign currency fluctuation risks and minimize the earnings and cash flow volatility associated with forecasted transactions denominated in certain foreign currencies, we enter into foreign currency forward contracts designated as cash flow hedges.
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We do not enter into foreign currency forward contracts for speculative or trading purposes.
−Removed: As such, we may not purchase adequate contracts to insulate ourselves from the foreign exchange currency risks.
−Removed: In addition, any such contracts may not perform effectively as a hedging mechanism.
−Removed: We may, in the future, make changes to our hedging policies, and have done so in the past.
The principal foreign currencies that are hedged are the Indian rupee, the Philippine peso and the South African rand.
−Removed: The impact related to these foreign currency forward contracts on earnings and/or cash flows is immaterial as the impact of the maturing cash flow hedges in respective periods are intended to primarily offset the foreign currency impact on the related expenses.
+Added: The impact related to these foreign currency forward contracts on earnings and/or cash flows is immaterial as the impact of the maturing cash flow hedges in respective periods are intended to primarily offset the foreign currency impact on the related revenue and expenses.
Further, some of our client contracts include protection against foreign currency exchange rate fluctuations which minimizes the impact of volatility in the exchange rates on our operating results.
As of December 31, 2025 and 2024, we had outstanding cash flow hedges with notional amounts of $1,134.8 million and $984.3 million, respectively, with the maximum outstanding term of approximately 42 months and 45 months, respectively.
−Removed: The mark-to-market gain/(loss), net upon fair valuation of outstanding cash flow hedges as of December 31, 2024 and 2023 was $(9.2) million and $5.4 million, respectively, and is included in “Accumulated other comprehensive income/(loss)” on our consolidated balance sheets.
+Added: The mark-to-market loss, net upon fair valuation of outstanding cash flow hedges as of December 31, 2025 and 2024 was $19.3 million and $9.2 million, respectively, and is included in “Accumulated other comprehensive income/(loss)” on our consolidated balance sheets.
For fiscal 2025 and 2024, we recognized $5.0 million and $0.6 million, respectively, as foreign exchange loss from maturing cash flow hedges, which was largely offset by the foreign exchange translation gain on the related expenses.
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dollar (USD) 215.2 million, the U.K.
−Removed: pound sterling (GBP) 21.0 million, the Euro (EUR) 9.0 million, South African rand (ZAR) 10.0 million and the Australian dollar (AUD) 4.8 million were outstanding as of December 31, 2024 compared to USD 170.5 million, GBP 14.5 million, EUR 5.2 million, ZAR 150.2 million and AUD 3.5 million outstanding as of December 31, 2023.
−Removed: The fair values of these financial instruments as of December 31, 2024 and 2023 were insignificant and are included in the “Foreign exchange gain, net” in our consolidated statements of income.
−Removed: As of December 31, 2024 and 2023, the outstanding derivative instruments had maturities of a maximum of 31 days, each.
+Added: pound sterling (GBP) 36.0 million, the Euro (EUR) 7.7 million, and the Australian dollar (AUD) 4.9 million were outstanding as of December 31, 2025 compared to USD 168.9 million, GBP 21.0 million, EUR 9.0 million and AUD 4.8 million outstanding as
+Added: Ta ble of Contents
+Added: of December 31, 2024.
+Added: The changes in the fair values of these financial instruments as of December 31, 2025 and 2024 were included in the “Foreign exchange gain, net” in our consolidated statements of income.
+Added: See Note 17- Derivatives and Hedge Accounting to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data” for further information.
+Added: As of December 31, 2025 and 2024, the outstanding derivative instruments had maturities of a maximum of 30 days and 31 days, respectively.
Interest Rate Risk.
We are also exposed to interest rate risk arising from our indebtedness.
−Removed: In order to mitigate our exposure to fluctuations in interest rates and minimize the earnings and cash flow volatility associated with floating rate indebtedness, we enter into interest rate swaps to hedge cash flow risks on our revolving credit facility having floating interest rate obligations.
+Added: In order to mitigate our exposure to fluctuations in interest rates and minimize the earnings and cash flow volatility associated with floating rate indebtedness, we may enter into interest rate swaps to hedge cash flow risks on our revolving credit facility having floating interest rate obligations.
The swap transaction involves the exchange of fixed for floating interest payments.
However, in circumstances where we believe additional fixed-rate debt would be beneficial, we may choose to terminate a previously executed swap, or swap certain floating interest payments to fixed.
−Removed: As described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we held a $300.0 million revolving credit facility and a letter of credit sub-facility pursuant to our Credit Agreement dated as of November 21, 2017, which was amended and restated on April 18, 2022 (the “2022 Credit Agreement”).
−Removed: On April 18, 2022, we entered into the 2022 Credit Agreement, that provides for a $400.0 million revolving credit facility and a letter of credit sub-facility.
−Removed: On August 9, 2024, we entered into the 2024 Credit Agreement, that provides for a $100.0 million increase to the revolving credit commitments such that the aggregate amount of revolving credit commitments available is now equal to $500.0 million and provides for the issuance of a new term loan facility in the aggregate amount of $100.0 million with an annual amortization of 5%.
−Removed: The increased credit facility and the new term loan facility both mature on April 18, 2027.
+Added: As described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the 2024 Credit Agreement, provides for revolving credit commitments of $500.0 million and a term loan facility of $100.0 million, with an annual repayment of 5%.
+Added: The revolving credit facility and the term loan facility both mature on April 18, 2027.
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.
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A 100 basis point increase or decrease in interest rates would have impacted our interest expense for fiscal 2025 by approximately $3.1 million.
−Removed: We manage a portion of our interest rate risk related to our revolving credit facility having variable interest rate obligations by entering into interest rate swaps under which we receive floating rate payments based on SOFR and make payments based on a fixed rate.
−Removed: As of December 31, 2024 and 2023, we had outstanding interest rate swaps having a notional amount of $nil and $75.0 million, respectively.
We had cash, cash equivalents and short-term investments totaling $328.4 million and $340.6 million as of December 31, 2025 and 2024, respectively.
4 unchanged sentences
The interest income from these funds is subject to fluctuations due to changes in interest rates.
−Removed: Declines in interest rates would reduce our future investment income.
+Added: Decline in interest rates would reduce our future investment income.
A 100 basis point increase or decrease in short term rates would have impacted our interest and dividend income for fiscal 2025 by approximately $1.7 million.
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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.