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Bermuda						98-0533350
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

 

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 6, 2025, there were 174,874,354 common shares, par value $0.01 per share, of the registrant issued and outstanding.

 

 

 

 

 

									Three months ended March 31,
			Notes						2024						2025
Net revenues			18						$	1,131,237					$	1,214,926
Cost of revenue									734,759						785,932
Gross profit									$	396,478					$	428,994
Operating expenses:
Selling, general and administrative expenses									235,031						241,084
Amortization of acquired intangible assets			8						6,927						4,320
Other operating (income) expense, net			19						(5,466)						(112)
Income from operations									$	159,986					$	183,702
Foreign exchange gains, net									837						1,289
Interest income (expense), net			20						(10,242)						(11,446)
Other income (expense), net									5,787						1,678
Income before income tax expense									$	156,368					$	175,223
Income tax expense			21						39,421						44,370
Net income									$	116,947					$	130,853
Earnings per common share			16
Basic									$	0.65					$	0.75
Diluted									$	0.64					$	0.73
Weighted average number of common shares used in computing earnings per common share			16
Basic									180,416,537						175,528,308
Diluted									181,937,555						178,435,142

    

 

 

			Three months ended March 31,
			2024						2025
Net income			$	116,947					$	130,853
Other comprehensive income:
Currency translation adjustments			(15,975)						15,413
Gain (loss) on cash flow hedging derivatives, net of taxes (Note 5)			11,411						13,827
Retirement benefits (expense), net of taxes			(80)						(103)
Other comprehensive income (loss)			(4,644)						29,137
Comprehensive income			$	112,303					$	159,990

 

 

			Common shares																								Accumulated Other Comprehensive Income (Loss)
			No. of Shares						Amount						Additional  Paid-in Capital						Retained Earnings												Total Equity
Balance as of January 1, 2024			179,494,132						$	1,789					$	1,883,944					$	1,085,209					$	(722,550)					$	2,248,392
Issuance of common shares on exercise of options (Note 14)			135,051						1						3,930						—						—						3,931
Issuance of common shares under the employee stock purchase plan (Note 14)			93,659						1						2,865						—						—						2,866
Net settlement on vesting of restricted share units (Note 14)			251,738						3						(3,908)						—						—						(3,905)
Net settlement on vesting of performance units (Note 14)			869,713						9						(16,913)						—						—						(16,904)
Stock repurchased and retired (Note 15)			(864,925)						(9)						—						(29,976)						—						(29,985)
Expenses related to stock repurchased (Note 15)			—						—						—						(17)						—						(17)
Stock-based compensation expense (Note 14)			—						—						9,181						—						—						9,181
Comprehensive income (loss):
Net income (loss)			—						—						—						116,947						—						116,947
Other comprehensive income (loss)			—						—						—						—						(4,644)						(4,644)
Dividend ($0.1525 per common share, Note 15)			—						—						—						(27,492)						—						(27,492)
Balance as of March 31, 2024			179,979,368						$	1,794					$	1,879,099					$	1,144,671					$	(727,194)					$	2,298,370

 

 

(In thousands)

			Three months ended March 31,
			2024						2025
Operating activities
Net income			$	116,947					$	130,853
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Depreciation and amortization			17,280						16,892
Amortization of debt issuance costs			488						550
Amortization of acquired intangible assets			6,927						4,320
Allowance for credit losses (refer to Note 3)			10,897						7,294
Unrealized (gain)/loss on revaluation of foreign currency assets/liabilities			(6,700)						3,207
Stock-based compensation expense			9,181						20,036
Deferred tax expense			11,510						8,063
Others, net			167						(66)
Change in operating assets and liabilities:
(Increase) Decrease in accounts receivable			(40,148)						6,972
Increase in prepaid expenses, other current assets, contract cost assets, operating lease right-of-use assets and other assets			(22,495)						(23,915)
Increase in accounts payable			285						1,835
Decrease in accrued expenses, other current liabilities, operating leases liabilities and other liabilities			(131,129)						(140,240)
Increase in income taxes payable			1,229						4,635
Net cash (used for) provided by operating activities			$	(25,561)					$	40,436
Investing activities
Purchase of property, plant and equipment			(24,005)						(21,979)
Payment for internally generated intangible assets (including intangibles under development)			(667)						(601)
Proceeds from maturity of short term investments			—						23,359
Net cash (used for) provided by investing activities			$	(24,672)					$	779
Financing activities
Repayment of finance lease obligations			(3,433)						(2,349)
Repayment of long-term debt			(13,250)						(6,625)
Proceeds from short-term borrowings			50,000						—
Repayment of short-term borrowings			(10,000)						—
Proceeds from issuance of common shares under stock-based compensation plans			6,797						6,943
Payment for net settlement of stock-based awards			(20,820)						(30,742)
Dividend paid			(27,492)						(29,784)
Payment for stock repurchased and retired (including expenses related to stock repurchased)			(30,002)						(62,987)
Net cash used for financing activities			$	(48,200)					$	(125,544)
Net decrease in cash and cash equivalents			(98,433)						(84,329)
Effect of exchange rate changes			(6,839)						(2,302)
Cash and cash equivalents at the beginning of the period			583,670						648,246
Cash and cash equivalents at the end of the period			$	478,398					$	561,615
Supplementary information
Cash paid during the period for interest			$	11,393					$	7,145
Cash paid during the period for income taxes, net of refund			$	20,108					$	21,402

 See accompanying notes to the Consolidated Financial Statements.

The Company is a global advanced technology services and solutions company. Powered by its mix of deep industry expertise, operational excellence and advanced technology, the Company helps companies reimagine finance and risk, supply chain and other core industry operations. The Company has over 145,000 employees serving clients in key industry verticals from more than 35 countries. 

 

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, they do not include certain information and note disclosures required by generally accepted accounting principles for annual financial reporting and should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The accompanying consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the results of operations for these periods.

The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Genpact Limited, a Bermuda company, and all of its subsidiaries that are more than 50% owned and controlled. When the Company does not have a controlling interest in an entity but exerts significant influence over the entity, the Company applies the equity method of accounting. All intercompany transactions and balances are eliminated in consolidation.

 

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, intangible assets and goodwill, revenue recognition, allowance for credit losses, valuation allowances for deferred tax assets, valuation of derivative financial instruments, measurement of lease liabilities and right-of-use (“ROU”) assets, measurements of stock-based compensation, assets and obligations related to employee benefits, nature and timing of the satisfaction of performance obligations, income tax uncertainties and other contingencies. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable. Although these estimates and assumptions are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements.

Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis on December 31, based on a number of factors, including operating results, business plans and future cash flows. The Company performs an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the assessment of events or circumstances, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. 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. In addition, the Company performs a qualitative assessment of goodwill impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 8 for information and related disclosures.

 

Intangible assets acquired individually or with a group of other assets or in a business combination and developed internally are carried at cost less accumulated amortization and accumulated impairment loss based on their estimated useful lives as follows:

 

Customer-related intangible assets			1			-			9 years
Marketing-related intangible assets			1			-			8 years
Technology-related intangible assets			2			-			10 years

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Intangible assets are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized.

In business combinations where the fair value of identifiable tangible and intangible net assets purchased exceeds the cost of the acquired business, the Company recognizes the resulting gain under “Other operating (income) expense, net” in the consolidated statements of income.

The Company also capitalizes certain software and technology-related development costs incurred in connection with developing or obtaining software or technology for sale or lease to customers when the initial design phase is completed and commercial and technological feasibility has been established. Any development cost incurred before technological feasibility is established is expensed as incurred as research and development costs. Technological feasibility is established upon completion of a detailed design program or, in its absence, completion of a working model. Capitalized software and technology costs include only (i) external direct costs of materials and services utilized in developing or obtaining software and technology and (ii) compensation and related benefits for employees who are directly associated with the project.

Costs incurred in connection with developing or obtaining software or technology for sale to customers which are under development and not put to use or advances paid towards the acquisition of intangible assets outstanding as of each balance sheet date are classified as “intangible assets under development” and are included in capital work in progress. Capitalized software and technology costs are included in intangible assets under technology-related intangible assets on the Company’s balance sheet and are amortized on a straight-line basis when placed into service over the estimated useful lives of the software and technology.

The Company evaluates the remaining useful life of intangible assets that are being amortized at each reporting period wherever events and circumstances warrant a revision to the remaining period of amortization, and the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life.

Financial instruments that potentially subject the Company to concentration of credit risk are reflected principally in cash and cash equivalents, derivative financial instruments and accounts receivable. The Company places its cash and cash equivalents and derivative financial instruments with corporations and banks with high investment grade ratings, limits the amount of credit exposure with any one corporation or bank and conducts ongoing evaluations of the creditworthiness of the corporations and banks with which it does business. To reduce its credit risk on accounts receivable, the Company conducts ongoing credit evaluations of its customers.

Accounts receivable are recorded at the invoiced or to be invoiced amount and do not bear interest. The amount to be invoiced represents the unbilled receivables for services rendered between the last billing date and the balance sheet date. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for current expected credit losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses which are adjusted to current market conditions and a reasonable and supportable forecast. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The Company uses revolving accounts receivable-based facilities in the normal course of business as part of managing its cash flows. The Company accounts for receivables sold under these facilities as a sale of financial assets pursuant to ASC 860 “Transfers and Servicing” and derecognizes these receivables, as well as the related allowances, from its balance sheets. Generally, the fair value of accounts receivable sold approximates their book value due to their short-term nature, and any gains or losses on the sale of these receivables are recorded at the time of transfer and included under "interest income (expense), net" in the Company’s consolidated statements of income. The Company does not have any off-balance sheet credit exposure related to its customers.

 

The Company derives its revenue primarily from business process management services, including analytics, consulting and related digital solutions and information technology services, which are provided primarily on a time-and-material, transaction or fixed-price basis. The Company recognizes revenue upon the transfer of control of promised services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. Revenues from services rendered under time-and-materials and transaction-based contracts are recognized as the services are provided. The Company’s fixed-price contracts include contracts for customization of applications, maintenance and support services. Revenues from these contracts are recognized ratably over the term of the agreement. The Company accrues for revenue and unbilled receivables for services rendered between the last billing date and the balance sheet date.

 

The Company’s contracts with its customers also include incentive payments received for discrete benefits delivered or promised to be delivered to the customer or service level agreements that could result in credits or refunds to the customer. Revenues relating to such arrangements are accounted for as variable consideration when the amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur.

 

The Company records deferred revenue attributable to certain process transition activities where such activities do not represent separate performance obligations. Revenues relating to such transition activities are classified under contract liabilities and subsequently recognized ratably over the period in which the related services are performed. Costs relating to such transition activities are fulfillment costs which are directly related to the contract and result in the enhancement of resources. Such costs are expected to be recoverable under the contract and are therefore classified as contract cost assets and recognized ratably over the estimated expected period of benefit under cost of revenue.

 

Revenues are reported net of value-added tax, business tax and applicable discounts and allowances. Reimbursements of out-of-pocket expenses received from customers have been included as part of revenues.

Revenue for performance obligations that are satisfied over time is recognized in accordance with the methods prescribed for measuring progress. The input (cost expended) method has been used to measure progress towards completion as there is a direct relationship between input and the satisfaction of a performance obligation. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates.

 

The Company enters into multiple-element revenue arrangements in which a customer may purchase a combination of products or services. The Company determines whether each product or service promised to a customer is capable of being distinct, and is distinct in the context of the contract. If not, the promised products or services are combined and accounted for as a single performance obligation. In the event of a multiple-element revenue arrangement, the Company allocates the arrangement consideration to separately identifiable performance obligations based on their relative stand-alone selling prices.

 

Certain contracts may include offerings such as sale of licenses, which may be perpetual or subscription-based. Revenue from distinct, non-cancellable, subscription-based licenses is recognized at the point in time when the license is transferred to the customer. Revenue from any associated maintenance or ongoing support services is recognized ratably over the term of the contract. For a combined software license/services performance obligation, revenue is recognized over the period that the services are performed.

 

All incremental and direct costs incurred for acquiring contracts, such as certain sales commissions, are classified as contract cost assets. Such costs are amortized over the expected period of benefit and recorded under selling, general and administrative expenses.

 

Other upfront fees paid to customers are classified as contract assets. Such fees are amortized over the expected period of benefit and recorded as an adjustment to the transaction price and deducted from revenue.

 

Timing of revenue recognition may differ from the timing of invoicing. If a payment is received in respect of services prior to the delivery of services, the payment is recognized as an advance from the customer and classified as a contract liability. Contract assets and contract liabilities relating to the same customer contract are offset against each other and presented on a net basis in the consolidated financial statements. 

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. At the inception of a lease, the consideration in the contract is allocated to each lease component based on its relative standalone price to determine the lease payments.

Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of the above criteria.

 

For all leases at the lease commencement date, a ROU asset and a lease liability are recognized. The lease liability represents the present value of the lease payments under the lease. Lease liabilities are initially measured at the present value of the lease payments not yet paid, discounted using the discount rate for the lease at the lease commencement. The lease liabilities are subsequently measured on an amortized cost basis. The lease liability is adjusted to reflect interest on the liability and the lease payments made during the period. Interest on the lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability.

 

The ROU asset represents the right to use the leased asset for the lease term. The ROU asset for each lease initially includes the amount of the initial measurement of the lease liability adjusted for any lease payments made to the lessor at or before the commencement date, accrued lease liabilities and any lease incentives received or any initial direct costs incurred by the Company.

 

The ROU asset of finance leases is subsequently measured at cost, less accumulated amortization and accumulated impairment losses, if any. The ROU asset of operating leases is subsequently measured from the carrying amount of the lease liability at the end of each reporting period, and is equal to the carrying amount of lease liabilities adjusted for (1) unamortized initial direct costs, (2) prepaid/(accrued) lease payments and (3) the unamortized balance of lease incentives received.

The carrying value of ROU assets is reviewed for impairment, similar to long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

 

The Company has elected to not separate lease and non-lease components for all of its leases and to use the recognition exemptions for lease contracts that, at commencement date, have a lease term of 12 months or less and do not contain a purchase option (“short-term leases”). 

 

 

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. Under certain of its leases, the Company has a renewal and termination option to lease assets for additional terms between one and ten years. The Company applies judgement in evaluating whether it is reasonably certain to exercise the option to renew or terminate the lease. The Company considers all relevant factors that create an economic incentive for it to exercise the renewal or termination option. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within the Company’s control and affects its ability to exercise (or not to exercise) the option to renew or terminate the lease.

The Company has applied an incremental borrowing rate for the purpose of computing lease liabilities based on the remaining lease term and the rates prevailing in the jurisdictions where leases were executed.

Cost of revenue primarily consists of salaries and benefits (including stock-based compensation), recruitment, training and related costs of employees who are directly responsible for the performance of services for customers, their supervisors and certain support personnel who may be dedicated to a particular customer or a set of processes. It also includes operational expenses, which consist of facilities maintenance expenses, travel and living expenses, lease expenses, IT expenses, and consulting and certain other expenses. Consulting charges represent the cost of consultants and contract resources with specialized skills who are directly responsible for the performance of services for clients and travel and other billable costs related to the Company’s clients. It also includes depreciation of property, plant and equipment, and amortization of intangible and ROU assets which are directly related to providing services that generate revenue.

 

 

Selling, general and administrative ("SG&A") expenses consist of expenses relating to salaries and benefits (including stock-based compensation) as well as costs related to recruitment, training and retention of senior management and other support personnel in enabling functions such as human resources, finance, legal, marketing, sales and sales support, and other support personnel. The operational costs component of SG&A expenses also includes travel and living costs for such personnel. SG&A expenses also include acquisition-related costs, legal and professional fees (which represent the costs of third party legal, tax, accounting and other advisors), investment in research and development, digital technology, advanced automation and robotics, and an allowance for credit losses. It also includes depreciation of property, plant and equipment, and amortization of intangibles and ROU assets other than those included in cost of revenue.

 

An allowance for credit losses is recognized for all debt instruments other than those held at fair value through profit or loss. The Company pools its accounts receivable (other than deferred billings) based on similar risk characteristics in estimating expected credit losses. Credit losses for accounts receivable due within one year are based on the roll-rate method, and the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date. The Company has established a provision matrix based on historical credit loss experience, adjusted for forward-looking factors and the economic environment. Credit losses for deferred billings are based on the historical credit loss experience, adjusted for forward-looking factors. At every reporting date, observed historical default rates are updated to reflect changes in the Company’s forward-looking estimates.

A financial asset is written off when it is deemed uncollectible and there is no reasonable expectation of recovering the contractual cash flows. Expected recoveries of amounts previously written off, not to exceed the aggregate amounts previously written off, are included in determining the allowance at each reporting period.

Credit losses are presented as a credit loss expense within “Selling, general and administrative expenses.” Subsequent recoveries of amounts previously written off are credited against the same line item.

Long-lived assets, including certain intangible assets, to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such assets are required to be tested for impairment if the carrying amount of the assets is higher than the future undiscounted net cash flows expected to be generated by the assets. The impairment amount to be recognized is measured as the amount by which the carrying value of the assets exceeds their fair value. The Company determines fair value by using a discounted cash flow approach.

The authoritative bodies release standards and guidance which are assessed by management for impact on the Company’s consolidated financial statements.

The following recently released accounting standards have been adopted by the Company:

In March 2023, the FASB issued ASU No. 2023-01, “Leases (Topic 842).” This ASU requires a lessee in a common-control lease arrangement to amortize leasehold improvements that it owns over the improvements’ useful life to the common control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease. This ASU is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The Company adopted this ASU beginning January 1, 2024. The adoption of this ASU did not have a material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280)." This ASU improves reportable segment disclosure requirements by enhancing disclosures about significant segment expenses. It requires public entities to disclose significant segment expenses, other segment items, and additional measures of segment profit or loss, providing more comprehensive information for investors and stakeholders. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this ASU for the fiscal year beginning January 1, 2024 and updated its segment information disclosure with the requirements of this ASU for the quarter ended March 31, 2025. See Note 17 for additional information.

The following recently released accounting standards have not yet been adopted by the Company:

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740)." This ASU enhances income tax disclosures by requiring public business entities on an annual basis (1) to disclose specific categories in the rate reconciliation, and (2) to provide additional information for reconciling items that meet a quantitative threshold, i.e., if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate. It also requires entities to disclose the income taxes paid (net of refunds received), broken out between federal (national), state/local and foreign, as well as the amounts paid to an individual jurisdiction when 5% or more of the total income taxes were paid to such jurisdiction. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its disclosures.

In November 2024, the FASB issued ASU No. 2024-03, " Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosure (Topic 220-40)." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB further issued ASU No 2025-01, which clarifies the effective date for adoption of the ASU No 2024-03. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on the presentation of its consolidated statements of income and disclosures.

The following table provides details of the Company’s allowance for credit losses on accounts receivable:

 

 

Accounts receivable were $1,210,700 and $1,211,841, and allowances for credit losses were $12,094 and $19,747, resulting in net accounts receivable balances of $1,198,606 and $1,192,094 as of December 31, 2024 and March 31, 2025, respectively.

In addition, deferred billings were $130,253 and $167,838 and allowances for credit losses on deferred billings were $7,320 and $5,872, resulting in net deferred billings balances of $122,933 and $161,966 as of December 31, 2024 and March 31, 2025, respectively.

During the three months ended March 31, 2024 and 2025, the Company recorded a charge of $3,078 and a release of $1,448, respectively, to the income statement on account of credit losses on deferred billings. Deferred billings, net of related allowances for credit losses, are included under “Other assets” in the Company’s consolidated balance sheet as of December 31, 2024 and March 31, 2025.    

The Company has a revolving accounts receivable-based facility of $60,000 as of December 31, 2024 and March 31, 2025 permitting it to sell accounts receivable to banks on a non-recourse basis in the ordinary course of business. The aggregate maximum capacity utilized by the Company at any time during the year ended December 31, 2024 and the three months ended March 31, 2025 was $55,870 and $52,946, respectively. The principal amount outstanding against this facility as of December 31, 2024 and March 31, 2025 was $26,583 and $52,921, respectively. The cost of factoring such accounts receivable during the three months ended March 31, 2024 and 2025 was $706 and $678, respectively. Gains or losses on the sales are recorded at the time of transfer of the accounts receivable and are included under "interest income (expense), net" in the Company’s consolidated statements of income.

The Company also has arrangements with financial institutions that manage the accounts payable program for certain of the Company's large clients. The Company sells certain accounts receivable pertaining to such clients to these financial institutions on a non-recourse basis. There is no cap on the value of accounts receivable that can be sold under these arrangements. The Company used these arrangements to sell accounts receivable amounting to $270,211 during the year ended December 31, 2024 and $69,797 during the three months ended March 31, 2025, which also represents the maximum capacity utilized under these arrangements in each such period. The cost of factoring such accounts receivable during the three months ended March 31, 2024 and 2025 was $1,175 and $1,176, respectively.

 

The Company measures certain financial assets and liabilities, including derivative instruments, at fair value on a recurring basis. The fair value measurements of these financial assets and liabilities were determined using the following inputs as of December 31, 2024 and March 31, 2025: 

			As of March 31, 2025
			Fair Value Measurements at Reporting Date Using
									Quoted Prices in Active Markets for Identical Assets						Significant  Other Observable  Inputs						Significant  Other Unobservable Inputs
			Total						(Level 1)						(Level 2)						(Level 3)
Assets
Derivative instruments (Note a, c)			$	22,801					$	—					$	22,801					$	—
Deferred compensation plan assets (Note a, d)			61,812						—						—						61,812
Total			$	84,613					$	—					$	22,801					$	61,812
Liabilities
Derivative instruments (Note b, c)			31,321						—						31,321						—
Deferred compensation plan liability (Note b, e)			61,196						—						—						61,196
Total			$	92,517					$	—					$	31,321					$	61,196

 

(a)Derivative assets are included in “prepaid expenses and other current assets” and “other assets” in the consolidated balance sheets. Deferred compensation plan assets are included in “other assets” in the consolidated balance sheets.

(b)Included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets.

(c)The Company values its derivative instruments based on market observable inputs, including both forward and spot prices for the relevant currencies and interest rate indices for relevant interest rates. The quotes are taken from an independent market database.

(d)Deferred compensation plan assets consist of life insurance policies held under a Rabbi Trust. Assets held in the Rabbi Trust are valued based on the cash surrender value of the insurance contract, which is determined based on the fair value of the underlying assets included in the insurance portfolio and are therefore classified within level 3 of the fair value hierarchy.

(e)The fair value of the deferred compensation plan liability is derived based on the fair value of the underlying assets in the insurance policies and is therefore classified within level 3 of the fair value hierarchy.

The following table provides a roll-forward of the fair value of deferred compensation plan assets categorized as level 3 in the fair value hierarchy for the three months ended March 31, 2024 and 2025:

 

			Three months ended March 31,
			2024						2025
Opening balance			$	51,983					$	61,549
Additions (net of redemption)			368						1,404
Change in fair value of deferred compensation plan assets (Note a)			3,208						(1,141)
Closing balance			$	55,559					$	61,812

(a)Changes in the fair value of plan assets are reported in “other income (expense), net” in the consolidated statements of income.

The following table provides a roll-forward of the fair value of deferred compensation plan liabilities categorized as level 3 in the fair value hierarchy for the three months ended March 31, 2024 and 2025:

(a)Changes in the fair value of deferred compensation plan liabilities are reported in “selling, general and administrative expenses” in the consolidated statements of income.

The Company is exposed to the risk of rate fluctuations on its foreign currency assets and liabilities and on foreign currency denominated forecasted cash flows and interest rates. The Company has established risk management policies, including the use of derivative financial instruments to hedge foreign currency assets and liabilities, foreign currency denominated forecasted cash flows and interest rate risk. These derivative financial instruments consist of deliverable and non-deliverable forward foreign exchange contracts, treasury rate locks and interest rate swaps. The Company enters into these contracts with counterparties that are banks or other financial institutions, and the Company considers the risk of non-performance by such counterparties not to be material. The forward foreign exchange contracts and interest rate swaps mature during a period of up to 45 months and the forecasted transactions are expected to occur during the same period.

The following table presents the aggregate notional principal amounts of outstanding derivative financial instruments together with the related balance sheet exposure:

 

			Notional principal amounts (Note a)												Balance sheet exposure asset (liability) (Note b)
			As of December 31, 2024						As of March 31, 2025						As of December 31, 2024						As of March 31, 2025
Foreign exchange forward contracts denominated in:
United States Dollars (sell) Indian Rupees (buy)			$	2,413,000					$	2,382,350					$	(36,478)					$	(4,071)
United States Dollars (sell) Mexican Peso (buy)			71,000						56,000						(8,188)						(4,819)
United States Dollars (sell) Philippines Peso (buy)			161,400						191,400						(3,274)						(1,257)
Euro (sell) United States Dollars (buy)			219,706						256,621						10,282						873
Singapore Dollar (buy) United States Dollars (sell)			12,000						12,000						(407)						227
Euro (sell) Romanian Leu (buy)			67,144						55,055						(156)						555
Japanese Yen (sell) Chinese Renminbi (buy)			34,507						45,502						3,402						1,395
United States Dollars (sell) Chinese Renminbi (buy)			46,800						83,100						(1,883)						(2,039)
Pound Sterling (sell) United States Dollars (buy)			15,507						25,610						463						(622)
United States Dollars (sell) Hungarian Font (buy)			21,000						30,750						(1,611)						806
Australian Dollars (sell) Indian Rupees (buy)			109,490						103,882						3,556						2,925
United States Dollars (sell) Polish Zloty (buy)			39,000						37,500						(1,190)						1,149
Japanese Yen (sell) United States Dollars (buy)			7,000						7,000						366						184
Israeli Shekel (buy) United States Dollars (sell)			20,000						20,000						454						251
South African Rand (sell) United States Dollars (buy)			32,000						32,000						1,725						69
United States Dollars (sell) Brazilian Real (buy)			4,000						4,000						(314)						208
United States Dollars (sell) Costa Rica Colon (buy)			13,000						15,000						231						398
United States Dollars (sell) Canadian Dollar (buy)			9,000						9,000						(352)						(340)
United States Dollars (sell) Malaysian Ringgit (buy)			5,000						14,750						(169)						12
Interest rate swaps (floating to fixed)			234,375						231,250						(3,155)						(4,424)
															$	(36,698)					$	(8,520)

(a)Notional amounts are key elements of derivative financial instrument agreements but do not represent the amount exchanged by counterparties and do not measure the Company’s exposure to credit, foreign exchange, interest rate or market risks. However, the amounts exchanged are based on the notional amounts and other provisions of the underlying derivative financial instrument agreements. Notional amounts are denominated in U.S. dollars.

(b)Balance sheet exposure is denominated in U.S. dollars and denotes the mark-to-market impact of the derivative financial instruments on the reporting date.

FASB guidance on derivatives and hedging requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. In accordance with FASB guidance on derivatives and hedging, the Company designates foreign exchange forward contracts, interest rate swaps and treasury rate locks as cash flow hedges. Foreign exchange forward contracts are entered into to cover the effects of future exchange rate variability on forecasted revenues and purchases of services, and interest rate swaps and treasury rate locks are entered into to cover interest rate fluctuation risk. In addition to this program, the Company uses derivative instruments that are not accounted for as hedges under FASB guidance in order to hedge foreign exchange risks related to balance sheet items, such as receivables and intercompany borrowings, that are denominated in currencies other than the Company’s underlying functional currency.

The fair value of the Company’s derivative instruments and their location in the Company’s financial statements are summarized in the table below: 

 

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain (loss) on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction is recognized in the consolidated statements of income. Gains (losses) on the derivatives, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in earnings as incurred.

In March 2021, the Company executed a treasury rate lock agreement for $350,000 in connection with future interest payments to be made on its senior notes issued in March 2021 by Genpact Luxembourg S.à r.l. (“Genpact Luxembourg”) and Genpact USA, Inc. (“Genpact USA”), both wholly-owned subsidiaries of the Company, and the treasury rate lock was designated as a cash flow hedge. The treasury rate lock agreement was terminated on March 23, 2021 and a deferred gain was recorded in accumulated other comprehensive income. This gain is being amortized to interest expense over the life of the 2021 Senior Notes (as defined in Note 10 below). The remaining gain to be amortized related to the treasury rate lock agreement as of December 31, 2024 and March 31, 2025 was $206 and $166, respectively.

In May 2024, the Company executed treasury rate lock agreements for $400,000 in connection with future interest payments to be made on its senior notes issued in June 2024 by Genpact Luxembourg and Genpact USA, and the treasury rate locks were designated as cash flow hedges. These treasury rate lock agreements were terminated on May 30, 2024 and a deferred loss was recorded in accumulated other comprehensive income. This loss is being amortized to interest expense over the life of the 2024 Senior Notes (as defined in Note 10 below). The remaining loss to be amortized related to the treasury rate lock agreements as of December 31, 2024 and March 31, 2025 was $351 and $331, respectively.

In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss) (“OCI”), and the related tax effects are summarized below: 

The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below: 

There were no gains (losses) recognized in the statement of income on the ineffective portion of derivatives designated as cash flow hedges and excluded from effectiveness testing for the three months ended March 31, 2024 and 2025, respectively.

(a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items such as receivables and intercompany borrowings and were not originally designated as hedges under FASB guidance on derivatives and hedging. Realized gains (losses) and changes in the fair value of these derivatives are recorded in foreign exchange gains, net in the consolidated statements of income.

Prepaid expenses and other current assets consist of the following:

 

			As of December 31, 2024						As of March 31, 2025
Advance income and non-income taxes			$	69,668					$	57,002
Contract asset (Note 18)			32,572						38,136
Prepaid expenses			43,936						52,659
Derivative instruments (Note 5)			17,274						17,055
Employee advances			3,186						3,161
Deposits			3,886						3,720
Advances to suppliers			6,377						1,310
Others			32,994						16,036
Total			$	209,893					$	189,079

 

The following table provides the gross and net amount of property, plant and equipment:

 

			As of December 31, 2024						As of March 31, 2025
Property, plant and equipment, gross*			$	787,509					$	799,876
Less: Accumulated depreciation and amortization			(579,566)						(589,159)
Property, plant and equipment, net			$	207,943					$	210,717

 

*Including capital work in progress

Depreciation expense on property, plant and equipment for the three months ended March 31, 2024 and 2025 was $13,495 and $13,477, respectively. Computer software amortization for the three months ended March 31, 2024 and 2025 was $533 and $502, respectively.

 

The following table presents the changes in goodwill for the year ended December 31, 2024 and the three months ended March 31, 2025:

 

			For the year ended December 31, 2024						For the three months ended March 31, 2025
Opening balance			1,683,782						1,669,769
Effect of exchange rate fluctuations			(14,013)						3,308
Closing balance			1,669,769						1,673,077

The following table presents the changes in goodwill by reporting unit for the year ended December 31, 2024:

The following table presents the changes in goodwill by reporting unit for the three months ended March 31, 2025: 

The total amount of goodwill deductible for tax purposes was $237,125 and $230,025 as of December 31, 2024 and March 31, 2025, respectively.

The Company’s intangible assets are as follows:

 

 

Amortization expenses for intangible assets acquired as part of a business combination and disclosed in the consolidated statements of income under amortization of acquired intangible assets for the three months ended March 31, 2024 and 2025 were $6,927 and $4,320, respectively.

Amortization expenses for internally-developed and other intangible assets disclosed in the consolidated statements of income under cost of revenue and selling, general and administrative expenses for the three months ended March 31, 2024 and 2025 were $458 and $618, respectively.

The Company has the following borrowing facilities:

 

a.Fund-based and non-fund-based credit facilities with banks, which are available for operational requirements in the form of overdrafts, letters of credit, guarantees and short-term loans. As of December 31, 2024 and March 31, 2025, the limits available were $22,421 and $27,389, respectively, of which $8,482 and $8,684, respectively, was utilized, constituting non-funded drawdown.

b.A fund-based and non-fund based revolving credit facility of $650,000, which the Company obtained by entering into an amended and restated credit agreement (the "2022 Credit Agreement") with Genpact USA, Genpact Global Holdings (Bermuda) Limited ("GGH") and Genpact Luxembourg, each wholly owned subsidiaries of the Company (Genpact Luxembourg, Genpact USA and GGH, collectively, the "Borrowers"), as borrowers, Wells Fargo, National Association ("Wells Fargo"), as administrative agent, swingline lender and issuing bank, and the lenders and other parties thereto on December 13, 2022. The term loan and revolving credit facility under the 2022 Credit Agreement expire on December 13, 2027. Borrowings under the 2022 Credit Agreement bear interest at a rate equal to, at the election of the Company, either Adjusted Term SOFR (which is the rate per annum equal to (a) Term SOFR (the forward-looking secured overnight financing rate) plus (b) a Term SOFR Adjustment of 0.10% per annum, but in no case lower than 0.0%) plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum. The unutilized amount on the revolving credit facility under the 2022 Credit Agreement bore a commitment fee of 0.20% as of December 31, 2024 and March 31, 2025. As of December 31, 2024 and March 31, 2025, a total of $1,532 and $1,257, respectively, was utilized, all of which constituted non-funded drawdown. The 2022 Credit Agreement contains certain customary covenants, including a maximum leverage covenant and a minimum interest coverage ratio. As of December 31, 2024 and March 31, 2025, the Company was in compliance with the financial covenants of the 2022 Credit Agreement.

 

In December 2022, the Company amended its existing credit facility under its amended and restated credit agreement entered into in August 2018 and entered into the 2022 Credit Agreement, which is comprised of a $530,000 term loan and a $650,000 revolving credit facility. The 2022 Credit Agreement is guaranteed by the Company and certain of its subsidiaries. The obligations under the 2022 Credit Agreement are unsecured.

Borrowings under the 2022 Credit Agreement bear interest at a rate equal to, at the election of the Company, either Adjusted Term SOFR (which is the rate per annum equal to (a) Term SOFR (the forward-looking secured overnight financing rate) plus (b) a Term SOFR Adjustment of 0.10% per annum, but in no case lower than 0.00%) plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum, in each case subject to adjustment based on the Borrowers' debt ratings provided by Standard & Poor’s Rating Services and Moody’s Investors Service, Inc. (the "Debt Ratings"). The revolving credit commitments under the 2022 Credit Agreement are subject to a commitment fee equal to 0.20% per annum, subject to adjustment based on the Debt Ratings. The commitment fee accrues on the actual daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving loans and letter of credit obligations.

The 2022 Credit Agreement restricts certain payments, including dividend payments, if there is an event of default under the 2022 Credit Agreement or if the Company is not, or after making the payment would not be, in compliance with certain financial covenants contained in the 2022 Credit Agreement. These covenants require the Company to maintain a net debt to EBITDA leverage ratio of less than 3x and an interest coverage ratio of more than 3x. As of March 31, 2025, the Company was in compliance with the terms of the 2022 Credit Agreement, including all of the financial covenants therein. The Company’s retained earnings are not subject to any restrictions on availability to make dividend payments to shareholders, subject to compliance with the financial covenants described above that are contained in the 2022 Credit Agreement.

As of December 31, 2024 and March 31, 2025, the amount outstanding under the Company's term loan, net of debt amortization expense of $911 and $829, was $476,089 and $469,546, respectively.

Indebtedness under the 2022 Credit Agreement is unsecured. The amount outstanding on the term loan as of March 31, 2025 requires quarterly payments of $6,625, and the balance of the loan is due and payable upon the maturity of the term loan on December 13, 2027.

The maturity profile of the term loan outstanding as of March 31, 2025, net of debt amortization expense, is as follows:

 

In March 2021, Genpact Luxembourg and Genpact USA co-issued $350,000 aggregate principal amount of 1.750% senior notes (the “2021 Senior Notes”). The 2021 Senior Notes are fully guaranteed by the Company. The total debt issuance cost of $3,032 incurred in connection with the 2021 Senior Notes is being amortized over the life of the 2021 Senior Notes as additional interest expense. As of December 31, 2024 and March 31, 2025, the amount outstanding under the 2021 Senior Notes, net of debt amortization expense of $766 and $618, respectively, was $349,234 and $349,382, respectively, which is payable on April 10, 2026.

In June 2024, Genpact Luxembourg and Genpact USA co-issued $400,000 aggregate principal amount of 6.000% senior notes (the “2024 Senior Notes,” and together with the 2021 Senior Notes, the "Senior Notes"). The 2024 Senior Notes are fully guaranteed by the Company. The total debt issuance cost of $4,395 incurred in connection with the 2024 Senior Notes is being amortized over the life of the 2024 Senior Notes as additional interest expense. As of December 31, 2024 and March 31, 2025, the amount outstanding under the 2024 Senior Notes, net of debt amortization expense of $3,883 and $3,666, respectively, was $396,117 and $396,334, respectively, which is payable on June 4, 2029.

The Company pays interest on (i) the 2021 Senior Notes semi-annually in arrears on April 10 and October 10 of each year and (ii) the 2024 Senior Notes semi-annually in arrears on June 4 and December 4 of each year, ending on the maturity dates of April 10, 2026 and June 4, 2029, respectively. The Company, at its option, may redeem the Senior Notes at any time in whole or in part, at a redemption price equal to (i) 100% of the principal amount of the notes redeemed, together with accrued and unpaid interest on the redeemed amount, and (ii) if the notes are redeemed prior to, in the case of the 2021 Senior Notes, March 10, 2026, and in the case of the 2024 Senior Notes, May 4, 2029, a specified “make-whole” premium. Additionally, the Company may redeem any series of Senior Notes in whole, but not in part, at any time at a redemption price equal to 100% of the principal amount thereof, together with accrued and unpaid interest to the redemption date, in the event of certain changes in taxation in any jurisdiction (other than the U.S.) having authority to tax the issuers. Upon certain change of control transactions, the applicable issuer or issuers will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus accrued and unpaid interest. The interest rate payable on the 2021 Senior Notes is subject to adjustment if the credit rating of the 2021 Senior Notes is downgraded, up to a maximum increase of 2.0%. The Senior Notes are subject to certain customary covenants, including limitations on the ability of the Company and certain of its subsidiaries to incur debt secured by liens, engage in certain sale and leaseback transactions and consolidate, merge, convey or transfer their assets substantially as an entirety. During the period ended March 31, 2025, the Company and its applicable subsidiaries were in compliance with the covenants under the Senior Notes.

A summary of the Company’s long-term debt is as follows:

 

			As of December 31, 2024						As of March 31, 2025
Credit facility, net of amortization expenses			$	476,089					$	469,546
1.750% 2021 Senior Notes, net of debt amortization expenses			349,234						349,382
6.000% 2024 Senior Notes, net of debt amortization expenses			396,117						396,334
Total			$	1,221,440					$	1,215,262
Current portion			26,173						26,178
Non-current portion			1,195,267						1,189,084
Total			$	1,221,440					$	1,215,262

 

 Accrued expenses and other current liabilities consist of the following:

 

Other liabilities consist of the following:

 

			As of December 31, 2024						As of March 31, 2025
Accrued expenses			$	60,905					$	83,505
Accrued employee cost			2,854						1,767
Retirement benefits			13,843						16,938
Compensated absences			48,527						52,068
Derivative instruments (Note 5)			21,273						13,640
Contract liabilities (Note 18)			50,336						46,689
Finance leases liability			8,811						11,245
Deferred compensation plan liability (Note 4)			57,111						58,410
Others			5,381						5,845
			$	269,041					$	290,107

 

The Company has employee benefit plans in the form of certain statutory and other programs covering its employees.

In accordance with Indian law, the Company maintains a defined benefit retirement plan covering substantially all of its Indian employees. In accordance with Mexican law, the Company provides termination benefits to all of its Mexican employees. In addition, certain of the Company’s subsidiaries in the Philippines, Israel and Japan sponsor defined benefit retirement programs.

Net defined benefit plan costs for the three months ended March 31, 2024 and 2025 include the following components: 

During the three months ended March 31, 2024 and 2025, the Company contributed the following amounts to defined contribution plans in various jurisdictions:

 

			Three months ended March 31,
			2024						2025
India			$	12,844					$	14,342
U.S.			6,096						5,518
U.K.			5,935						4,583
China			7,340						7,398
Other Regions			4,394						5,093
Total			$	36,609					$	36,934

 

 

On July 1, 2018, Genpact LLC, a wholly-owned subsidiary of the Company, adopted an executive deferred compensation plan (the “Plan”). The Plan provides a select group of U.S.-based members of Company management with the opportunity to defer from 1% to 80% of their base salary and from 1% to 100% of their qualifying bonus compensation (or such other minimums or maximums as determined by the Plan administrator from time to time) pursuant to the terms of the Plan. Participant deferrals are 100% vested at all times. The Plan also allows for discretionary supplemental employer contributions by the Company, in its sole discretion, which will be subject to a two-year vesting schedule (50% vesting on the one-year anniversary of approval of the contribution and 50% vesting on the second year anniversary of approval of the contribution) or such other vesting schedule as determined by the Company. However, no such contributions have been made by the Company to date.

 

The Plan also provides an option for participants to elect to receive deferred compensation and earnings thereon on either fixed date(s) no earlier than two years following the applicable Plan year (or end of the applicable performance period for performance-based bonus compensation) or following a separation from service, in each case either in a lump sum or in annual installments over a term of up to 15 years. Participants can elect to change or re-defer their rights to receive the deferred compensation until the 10th anniversary following their separation from service, subject to fulfillment of certain conditions. Each Plan participant’s compensation deferrals are credited or debited with notional investment gains and losses equal to the performance of selected hypothetical investment funds offered under the Plan and elected by the participant.

The Company has investments in funds held in Company-owned life insurance policies which are held in a Rabbi Trust that are classified as trading securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date.

The liability for the deferred compensation plan was $60,924 and $61,196 as of December 31, 2024 and March 31, 2025, respectively, and is included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets.

 

In connection with the administration of the Plan, the Company has purchased Company-owned life insurance policies insuring the lives of certain employees. The cash surrender value of these policies was $61,549 and $61,812 as of December 31, 2024 and March 31, 2025, respectively. The cash surrender value of these insurance policies is included in “other assets” in the consolidated balance sheets.

During the three months ended March 31, 2024 and 2025, the change in the fair value of Plan assets was $3,208 and $(1,141), respectively, which is included in “other income (expense), net,” in the consolidated statements of income. During the three months ended March 31, 2024 and 2025, the change in the fair value of deferred compensation liabilities was $3,164 and $(1,132), respectively, which is included in “selling, general and administrative expenses.”

14. Stock-based compensation

The Company has granted stock-based awards, including options, restricted share unit awards and performance share unit awards, under the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007 Omnibus Plan”) and the Genpact Limited 2017 Omnibus Incentive Compensation Plan (the “2017 Omnibus Plan”) to eligible persons, including employees, directors and certain other persons associated with the Company.

Under the 2007 Omnibus Plan, shares underlying options forfeited, expired, terminated or cancelled under any of the Company’s predecessor plans were added to the number of shares otherwise available for grant under the 2007 Omnibus Plan. The 2007 Omnibus Plan was amended and restated on April 11, 2012 to increase the number of common shares authorized for issuance by 5,593,200 shares to 15,000,000 shares. Further, during the year ended December 31, 2012, the number of common shares authorized for issuance under the 2007 Omnibus Plan was increased by 8,858,823 shares as a result of a one-time adjustment to outstanding unvested share awards in connection with a special dividend payment.

On May 9, 2017, the Company’s shareholders approved the adoption of the 2017 Omnibus Plan, pursuant to which 15,000,000 Company common shares are available for issuance. The 2017 Omnibus Plan was amended and restated on April 5, 2019 and April 5, 2022 to increase the number of common shares authorized for issuance by 8,000,000 shares to 23,000,000 shares and by 3,500,000 shares to 26,500,000 shares, respectively. No grants may be made under the 2007 Omnibus Plan after the date of adoption of the 2017 Omnibus Plan. Grants that were outstanding under the 2007 Omnibus Plan as of the date of the Company’s adoption of the 2017 Omnibus Plan remain subject to the terms of the 2007 Omnibus Plan.

Stock-based compensation costs relating to the foregoing plans during the three months ended March 31, 2024 and 2025 were $8,819 and $19,910, respectively, and have been allocated to “cost of revenue” and “selling, general and administrative expenses.”     

 All options granted under the 2007 Omnibus Plan and 2017 Omnibus Plan are exercisable into common shares of the Company, have a contractual period of ten years and vest over three to five years unless specified otherwise in the applicable award agreement. The Company recognizes compensation cost over the vesting period of the option.

Compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholes option-pricing model.

No options were granted in the three months ended March 31, 2024 and March 31, 2025.

A summary of stock option activity during the three months ended March 31, 2025 is set out below:

 

 

(a)Options expected to vest reflect an estimated forfeiture rate.

As of March 31, 2025, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $3,772, which will be recognized over the weighted average remaining requisite vesting period of 1.3 years.

The Company has granted restricted share units (“RSUs”) under the 2007 Omnibus Plan and 2017 Omnibus Plan. Each RSU represents the right to receive one common share. The fair value of each RSU is the market price of one common share of the Company on the date of grant. The RSUs granted to date have graded vesting schedules of three months to four years. The compensation expense is recognized on a straight-line basis over the vesting term. A summary of RSU activity during the three months ended March 31, 2025 is set out below:

 

			Three Months Ended March 31, 2025
			Number of Restricted Share Units						Weighted Average Grant Date Fair Value
Outstanding as of January 1, 2025			2,134,269						36.71
Granted			816,936						49.61
Vested (Note a)			(748,410)						37.32
Forfeited			(54,055)						36.60
Outstanding as of March 31, 2025			2,148,740						41.40
Expected to vest (Note b)			1,907,510

    

(a)745,571 RSUs vested during the three months ended March 31, 2025, in respect of which 462,297 shares (net of minimum statutory tax withholding) were issued. 2,839 RSUs vested in the three months ended March 31, 2025, shares in respect of which will be issued in 2025 after withholding shares to the extent of minimum statutory withholding taxes.

(b)The number of RSUs expected to vest reflects the application of an estimated forfeiture rate.    

22,551 RSUs vested in the year ended December 31, 2024, in respect of which 13,626 shares were issued during the three months ended March 31, 2025 after withholding shares to the extent of minimum statutory withholding taxes.

47,193 RSUs vested in the year ended December 31, 2023, in respect of which 46,982 shares were issued during the three months ended March 31, 2025 after withholding shares to the extent of minimum statutory withholding taxes.

As of March 31, 2025, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $63,728, which will be recognized over the weighted average remaining requisite vesting period of 2.1 years.

 

The Company also grants stock awards in the form of performance units (“PUs”) and has granted PUs under both the 2007 Omnibus Plan and 2017 Omnibus Plan.

Each PU represents the right to receive one common share at a future date based on the Company’s performance against specified targets. PUs granted to date have vesting schedules of approximately six months to three years. PUs granted under the plans are subject to cliff vesting. The compensation expense for such awards is recognized on a straight-line basis over the vesting terms.

For PUs granted prior to 2023, the fair value of each PU was the market price of one common share of the Company on the date of grant and the performance period for such grants was one year. For PUs that have a performance period of one year, the Company’s estimate of the number of shares to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.

For the PUs granted annually beginning in 2023, the performance period of the awards increased to three years from one year. The number of PUs that will ultimately vest under the PU awards granted in 2024 and 2025 will be determined, subject to certain conditions and limitations, based on the Company’s achievement of the performance targets set forth in the awards as well as its total shareholder return ("TSR") relative to the TSR of the companies included as of the beginning of the performance period in the S&P 400 Midcap Index (the “Peer Group”) over the three-year performance period.

The grant date fair value for PUs granted in 2024 and 2025 is determined using a Monte Carlo simulation model. This model simulates a range of possible future share prices and estimates the probabilities of the potential payouts. This model also incorporates the following assumptions:

•The historical volatility for the companies in the Peer Group was measured using the most recent three-year period.

•The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period.

•For determining the TSR of the Company and the companies in the Peer Group, dividends are assumed to have been reinvested in the stock of the issuing entities on a continuous basis.

•The correlation coefficients used to model the way in which each entity tends to move in relation to each other are based upon the price data used to calculate historical volatility.

The fair value of each PU granted to employees in the three months ended March 31, 2024 and March 31, 2025 was estimated on the date of grant using the following valuation assumptions:

A summary of PU activity during the three months ended March 31, 2025 is set out below: