10-Q 1 g-20240331.htm 10-Q g-20240331
FALSE2024Q1000139865912-31P1YP6Mhttp://fasb.org/us-gaap/2023#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrentP3Y922xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesg:Employeeg:Countryxbrli:pureutr:Rateg:numberOfOperatingSegment00013986592024-01-012024-03-3100013986592024-05-0300013986592023-12-3100013986592024-03-3100013986592023-01-012023-03-310001398659us-gaap:CommonStockMember2022-12-310001398659us-gaap:AdditionalPaidInCapitalMember2022-12-310001398659us-gaap:RetainedEarningsMember2022-12-310001398659us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-3100013986592022-12-310001398659us-gaap:CommonStockMember2023-01-012023-03-310001398659us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001398659us-gaap:RetainedEarningsMember2023-01-012023-03-310001398659us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001398659us-gaap:CommonStockMember2023-03-310001398659us-gaap:AdditionalPaidInCapitalMember2023-03-310001398659us-gaap:RetainedEarningsMember2023-03-310001398659us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100013986592023-03-310001398659us-gaap:CommonStockMember2023-12-310001398659us-gaap:AdditionalPaidInCapitalMember2023-12-310001398659us-gaap:RetainedEarningsMember2023-12-310001398659us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001398659us-gaap:CommonStockMember2024-01-012024-03-310001398659us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001398659us-gaap:RetainedEarningsMember2024-01-012024-03-310001398659us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001398659us-gaap:CommonStockMember2024-03-310001398659us-gaap:AdditionalPaidInCapitalMember2024-03-310001398659us-gaap:RetainedEarningsMember2024-03-310001398659us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001398659srt:MinimumMember2024-03-310001398659us-gaap:CustomerRelatedIntangibleAssetsMembersrt:MinimumMember2024-03-310001398659srt:MaximumMemberus-gaap:CustomerRelatedIntangibleAssetsMember2024-03-310001398659us-gaap:MarketingRelatedIntangibleAssetsMembersrt:MinimumMember2024-03-310001398659us-gaap:MarketingRelatedIntangibleAssetsMembersrt:MaximumMember2024-03-310001398659us-gaap:TechnologyBasedIntangibleAssetsMembersrt:MinimumMember2024-03-310001398659srt:MaximumMemberus-gaap:TechnologyBasedIntangibleAssetsMember2024-03-310001398659srt:MinimumMember2024-01-012024-03-310001398659srt:MaximumMember2024-01-012024-03-3100013986592023-01-012023-12-310001398659us-gaap:FairValueMeasurementsRecurringMember2023-12-310001398659us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310001398659us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-12-310001398659us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-12-310001398659us-gaap:FairValueMeasurementsRecurringMember2024-03-310001398659us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-03-310001398659us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-03-310001398659us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2024-03-310001398659g:BusinessAcquisitionContingentConsiderationMember2022-12-310001398659g:BusinessAcquisitionContingentConsiderationMember2023-12-310001398659g:BusinessAcquisitionContingentConsiderationMember2023-01-012023-03-310001398659g:BusinessAcquisitionContingentConsiderationMember2024-01-012024-03-310001398659g:BusinessAcquisitionContingentConsiderationMember2023-03-310001398659g:BusinessAcquisitionContingentConsiderationMember2024-03-310001398659g:DeferredCompensationPlanAssetsMember2022-12-310001398659g:DeferredCompensationPlanAssetsMember2023-12-310001398659g:DeferredCompensationPlanAssetsMember2023-01-012023-03-310001398659g:DeferredCompensationPlanAssetsMember2024-01-012024-03-310001398659g:DeferredCompensationPlanAssetsMember2023-03-310001398659g:DeferredCompensationPlanAssetsMember2024-03-310001398659g:DeferredCompensationLiabilitiesMember2022-12-310001398659g:DeferredCompensationLiabilitiesMember2023-12-310001398659g:DeferredCompensationLiabilitiesMember2023-01-012023-03-310001398659g:DeferredCompensationLiabilitiesMember2024-01-012024-03-310001398659g:DeferredCompensationLiabilitiesMember2023-03-310001398659g:DeferredCompensationLiabilitiesMember2024-03-310001398659srt:MaximumMemberus-gaap:InterestRateSwapMember2024-03-310001398659srt:MaximumMemberus-gaap:ForeignExchangeContractMember2024-03-310001398659g:UnitedStatesDollarsSellIndianRupeesBuyMember2023-12-310001398659g:UnitedStatesDollarsSellIndianRupeesBuyMember2024-03-310001398659g:UnitedStatesDollarsSellMexicanPesoBuyMember2023-12-310001398659g:UnitedStatesDollarsSellMexicanPesoBuyMember2024-03-310001398659g:UnitedStatesDollarsSellPhilippinesPesoBuyMember2023-12-310001398659g:UnitedStatesDollarsSellPhilippinesPesoBuyMember2024-03-310001398659g:EuroSellUnitedStatesDollarsBuyMember2023-12-310001398659g:EuroSellUnitedStatesDollarsBuyMember2024-03-310001398659g:EuroSellRomanianLeuBuyMember2023-12-310001398659g:EuroSellRomanianLeuBuyMember2024-03-310001398659g:JapaneseYenSellChineseRenminbiBuyMember2023-12-310001398659g:JapaneseYenSellChineseRenminbiBuyMember2024-03-310001398659g:UnitedStatesDollarsSellChineseRenminbiBuyMember2023-12-310001398659g:UnitedStatesDollarsSellChineseRenminbiBuyMember2024-03-310001398659g:PoundSterlingSellUnitedStatesDollarBuyMember2023-12-310001398659g:PoundSterlingSellUnitedStatesDollarBuyMember2024-03-310001398659g:UnitedStatesDollarsSellHungarianForintBuyMember2023-12-310001398659g:UnitedStatesDollarsSellHungarianForintBuyMember2024-03-310001398659g:AustralianDollarsSellIndianRupeesBuyMember2023-12-310001398659g:AustralianDollarsSellIndianRupeesBuyMember2024-03-310001398659g:UnitedStatesDollarsSellPolishZlotyBuyMember2023-12-310001398659g:UnitedStatesDollarsSellPolishZlotyBuyMember2024-03-310001398659g:JapaneseYenSellUnitedStatesDollarBuyMember2023-12-310001398659g:JapaneseYenSellUnitedStatesDollarBuyMember2024-03-310001398659g:IsraelShekelSellUnitedStatesDollarBuyMember2023-12-310001398659g:IsraelShekelSellUnitedStatesDollarBuyMember2024-03-310001398659g:SouthAfricanRandSellUnitedStatesDollarBuyMember2023-12-310001398659g:SouthAfricanRandSellUnitedStatesDollarBuyMember2024-03-310001398659g:UnitedStatesDollarSellBrazilianRealBuyMember2023-12-310001398659g:UnitedStatesDollarSellBrazilianRealBuyMember2024-03-310001398659g:UnitedStatesDollarSellCostaRicaColonBuyMember2023-12-310001398659g:UnitedStatesDollarSellCostaRicaColonBuyMember2024-03-310001398659g:PoundSterlingBuyUnitedStatesDollarSellMember2023-12-310001398659g:PoundSterlingBuyUnitedStatesDollarSellMember2024-03-310001398659g:UnitedStatesDollarsSellMalaysianRinggitBuyMember2023-12-310001398659g:UnitedStatesDollarsSellMalaysianRinggitBuyMember2024-03-310001398659g:UnitedStatesDollarsSellCanadianDollarBuyMember2023-12-310001398659g:UnitedStatesDollarsSellCanadianDollarBuyMember2024-03-310001398659g:InterestRateSwapFloatingToFixedMember2023-12-310001398659g:InterestRateSwapFloatingToFixedMember2024-03-310001398659us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2023-12-310001398659us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2024-03-310001398659us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMember2023-12-310001398659us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMember2024-03-310001398659us-gaap:OtherAssetsMemberus-gaap:CashFlowHedgingMember2023-12-310001398659us-gaap:OtherAssetsMemberus-gaap:CashFlowHedgingMember2024-03-310001398659us-gaap:OtherAssetsMemberus-gaap:NondesignatedMember2023-12-310001398659us-gaap:OtherAssetsMemberus-gaap:NondesignatedMember2024-03-310001398659g:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2023-12-310001398659g:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2024-03-310001398659us-gaap:NondesignatedMemberg:AccruedExpensesAndOtherCurrentLiabilitiesMember2023-12-310001398659us-gaap:NondesignatedMemberg:AccruedExpensesAndOtherCurrentLiabilitiesMember2024-03-310001398659us-gaap:CashFlowHedgingMemberus-gaap:OtherLiabilitiesMember2023-12-310001398659us-gaap:CashFlowHedgingMemberus-gaap:OtherLiabilitiesMember2024-03-310001398659us-gaap:NondesignatedMemberus-gaap:OtherLiabilitiesMember2023-12-310001398659us-gaap:NondesignatedMemberus-gaap:OtherLiabilitiesMember2024-03-310001398659us-gaap:TreasuryLockMember2021-03-310001398659us-gaap:TreasuryLockMember2023-12-310001398659us-gaap:TreasuryLockMember2024-03-310001398659us-gaap:ForeignExchangeContractMember2023-01-012023-03-310001398659us-gaap:ForeignExchangeContractMember2024-01-012024-03-310001398659us-gaap:SalesMember2023-01-012023-03-310001398659us-gaap:SalesMember2024-01-012024-03-310001398659us-gaap:InterestRateSwapMember2023-01-012023-03-310001398659us-gaap:InterestRateSwapMember2024-01-012024-03-310001398659us-gaap:CostOfSalesMember2023-01-012023-03-310001398659us-gaap:CostOfSalesMember2024-01-012024-03-310001398659us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310001398659us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310001398659us-gaap:InterestExpenseMember2023-01-012023-03-310001398659us-gaap:InterestExpenseMember2024-01-012024-03-310001398659g:ForwardForeignExchangeContractsMemberus-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2023-01-012023-03-310001398659g:ForwardForeignExchangeContractsMemberus-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2024-01-012024-03-310001398659g:TheBusinessMember2023-12-310001398659g:FixedRateUnsecuredLoanNoteMemberg:TheBusinessMember2023-12-3100013986592023-11-300001398659g:FixedRateUnsecuredLoanNoteMemberg:TheBusinessMember2023-11-300001398659g:FixedRateUnsecuredLoanNoteMemberg:TheBusinessMember2024-03-310001398659g:TheBusinessMember2023-02-012023-02-280001398659g:TheBusinessMember2022-01-012022-12-310001398659g:FixedRateUnsecuredLoanNoteMemberg:TheBusinessMember2024-01-012024-03-310001398659g:DepreciationExpenseOnPropertyPlantAndEquipmentMember2023-01-012023-03-310001398659g:DepreciationExpenseOnPropertyPlantAndEquipmentMember2024-01-012024-03-310001398659us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-01-012023-03-310001398659us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2024-01-012024-03-310001398659g:FinancialServicesMember2022-12-310001398659g:ConsumerAndHealthcareMember2022-12-310001398659g:HighTechAndManufacturingMember2022-12-310001398659g:FinancialServicesMember2023-01-012023-12-310001398659g:ConsumerAndHealthcareMember2023-01-012023-12-310001398659g:HighTechAndManufacturingMember2023-01-012023-12-310001398659g:FinancialServicesMember2023-12-310001398659g:ConsumerAndHealthcareMember2023-12-310001398659g:HighTechAndManufacturingMember2023-12-310001398659g:FinancialServicesMember2024-01-012024-03-310001398659g:ConsumerAndHealthcareMember2024-01-012024-03-310001398659g:HighTechAndManufacturingMember2024-01-012024-03-310001398659g:FinancialServicesMember2024-03-310001398659g:ConsumerAndHealthcareMember2024-03-310001398659g:HighTechAndManufacturingMember2024-03-310001398659us-gaap:CustomerRelatedIntangibleAssetsMember2023-12-310001398659us-gaap:CustomerRelatedIntangibleAssetsMember2024-03-310001398659us-gaap:MarketingRelatedIntangibleAssetsMember2023-12-310001398659us-gaap:MarketingRelatedIntangibleAssetsMember2024-03-310001398659us-gaap:TechnologyBasedIntangibleAssetsMember2023-12-310001398659us-gaap:TechnologyBasedIntangibleAssetsMember2024-03-310001398659us-gaap:DevelopedTechnologyRightsMember2023-01-012023-03-310001398659us-gaap:DevelopedTechnologyRightsMember2024-01-012024-03-310001398659us-gaap:PropertyPlantAndEquipmentMember2023-01-012023-03-310001398659us-gaap:PropertyPlantAndEquipmentMember2024-01-012024-03-310001398659us-gaap:RevolvingCreditFacilityMember2022-12-130001398659srt:MaximumMemberg:A2022CreditAgreementMember2024-03-310001398659g:A2022CreditAgreementMembersrt:MinimumMember2024-03-310001398659g:A2022CreditAgreementMemberus-gaap:BaseRateMember2024-01-012024-03-310001398659g:BaseRatePlusApplicableMarginMemberg:A2022CreditAgreementMember2024-01-012024-03-310001398659g:NonFundBasedCreditFacilityMember2023-12-310001398659g:NonFundBasedCreditFacilityMember2024-03-310001398659g:A2022CreditAgreementMemberg:TermLoanCreditFacilityMember2022-12-310001398659g:A2022CreditAgreementMemberus-gaap:LineOfCreditMember2022-12-310001398659srt:MaximumMemberg:A2022CreditAgreementMember2023-12-310001398659g:A2022CreditAgreementMembersrt:MinimumMember2023-12-3100013986592018-08-012018-08-310001398659g:AmendedTwoThousandFifteenCreditFacilityMember2023-12-310001398659g:AmendedTwoThousandFifteenCreditFacilityMember2023-01-012023-12-310001398659g:TermLoanCreditFacilityMember2023-01-012023-12-310001398659g:TermLoanCreditFacilityMember2024-01-012024-03-310001398659g:TermLoanCreditFacilityMember2023-12-310001398659g:TermLoanCreditFacilityMember2024-03-310001398659g:TwoThousandNineteenSeniorNotesMembersrt:SubsidiaryIssuerMember2019-11-300001398659g:TwoThousandNineteenSeniorNotesMembersrt:SubsidiaryIssuerMember2023-01-012023-12-310001398659g:TwoThousandNineteenSeniorNotesMembersrt:SubsidiaryIssuerMember2024-01-012024-03-310001398659g:TwoThousandNineteenSeniorNotesMembersrt:SubsidiaryIssuerMember2023-12-310001398659g:TwoThousandNineteenSeniorNotesMembersrt:SubsidiaryIssuerMember2024-03-310001398659g:TwoThousandTwentyOneSeniorNotesMembersrt:SubsidiaryIssuerMember2021-03-310001398659g:TwoThousandTwentyOneSeniorNotesMembersrt:SubsidiaryIssuerMember2023-01-012023-12-310001398659g:TwoThousandTwentyOneSeniorNotesMembersrt:SubsidiaryIssuerMember2024-01-012024-03-310001398659g:TwoThousandTwentyOneSeniorNotesMembersrt:SubsidiaryIssuerMember2023-12-310001398659g:TwoThousandTwentyOneSeniorNotesMembersrt:SubsidiaryIssuerMember2024-03-310001398659g:TwoThousandNineteenSeniorNotesMembersrt:SubsidiaryIssuerMember2022-01-012022-12-310001398659g:TermLoanCreditFacilityMember2023-12-310001398659g:TermLoanCreditFacilityMember2024-03-310001398659g:TwoThousandNineteenSeniorNotesMember2023-12-310001398659g:TwoThousandNineteenSeniorNotesMember2024-03-310001398659g:TwoThousandTwentyOneSeniorNotesMember2023-12-310001398659g:TwoThousandTwentyOneSeniorNotesMember2024-03-310001398659country:IN2023-01-012023-03-310001398659country:IN2024-01-012024-03-310001398659country:US2023-01-012023-03-310001398659country:US2024-01-012024-03-310001398659country:GB2023-01-012023-03-310001398659country:GB2024-01-012024-03-310001398659country:CN2023-01-012023-03-310001398659country:CN2024-01-012024-03-310001398659g:OtherRegionsMember2023-01-012023-03-310001398659g:OtherRegionsMember2024-01-012024-03-310001398659country:USsrt:MinimumMember2018-07-012018-07-010001398659srt:MaximumMembercountry:US2018-07-012018-07-010001398659country:US2018-07-012018-07-010001398659g:VestingPeriodOneMembercountry:US2018-07-010001398659country:USg:VestingPeriodTwoMember2018-07-010001398659g:TwoThousandSevenOmnibusPlanMember2012-04-112012-04-110001398659g:TwoThousandSevenOmnibusPlanMember2012-04-110001398659g:TwoThousandSevenOmnibusPlanMember2012-01-012012-12-310001398659g:TwoThousandSeventeenOmnibusPlanMember2017-05-090001398659g:TwoThousandSevenOmnibusPlanMember2019-04-042019-04-050001398659g:TwoThousandSevenOmnibusPlanMember2019-04-050001398659g:TwoThousandSevenOmnibusPlanMember2022-04-052022-04-050001398659g:TwoThousandSevenOmnibusPlanMember2022-04-050001398659us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001398659us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2024-01-012024-03-310001398659srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001398659us-gaap:RestrictedStockUnitsRSUMember2023-12-310001398659us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001398659us-gaap:RestrictedStockUnitsRSUMember2024-03-310001398659us-gaap:RestrictedStockUnitsRSUMemberg:VestingPeriodTwoThousandTwentyTwoExcludingDirectorsMember2023-01-012023-12-310001398659us-gaap:RestrictedStockUnitsRSUMemberg:VestingPeriodTwoThousandTwentyTwoExcludingDirectorsMember2024-01-012024-03-310001398659us-gaap:RestrictedStockUnitsRSUMemberg:VestingPeriodTwoThousandTwentyOneMember2022-01-012022-12-310001398659us-gaap:RestrictedStockUnitsRSUMemberg:VestingPeriodTwoThousandTwentyOneMember2024-01-012024-03-310001398659srt:MinimumMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001398659srt:MaximumMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001398659us-gaap:PerformanceSharesMemberg:PriorToTwoThousandTwentyThreeMember2024-01-012024-03-310001398659us-gaap:PerformanceSharesMemberg:TwoThousandTwentyThreeMember2024-01-012024-03-310001398659us-gaap:PerformanceSharesMember2023-12-310001398659us-gaap:PerformanceSharesMember2024-01-012024-03-310001398659us-gaap:PerformanceSharesMember2024-03-310001398659g:EmployeeStockPurchasePlanMember2024-01-012024-03-310001398659g:EmployeeStockPurchasePlanMember2024-03-310001398659g:EmployeeStockPurchasePlanMember2023-01-012023-03-310001398659g:ShareRepurchaseOpenMarketMember2023-01-012023-03-310001398659g:ShareRepurchaseOpenMarketMember2024-01-012024-03-3100013986592023-02-092023-02-0900013986592022-02-102022-02-1000013986592023-03-242023-03-2400013986592024-02-082024-02-0800013986592024-03-262024-03-260001398659g:FinancialServicesMemberg:DataTechAIMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:FinancialServicesMemberg:DigitalOperationsMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:FinancialServicesMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:ConsumerAndHealthcareMemberg:DataTechAIMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:ConsumerAndHealthcareMemberg:DigitalOperationsMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:ConsumerAndHealthcareMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:HighTechAndManufacturingMemberg:DataTechAIMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:DigitalOperationsMemberg:HighTechAndManufacturingMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659g:HighTechAndManufacturingMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659us-gaap:OperatingSegmentsMemberg:DataTechAIMember2023-01-012023-03-310001398659g:DigitalOperationsMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659us-gaap:OperatingSegmentsMember2023-01-012023-03-310001398659us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2023-01-012023-03-310001398659us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001398659g:FinancialServicesMemberg:DataTechAIMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:FinancialServicesMemberg:DigitalOperationsMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:FinancialServicesMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:ConsumerAndHealthcareMemberg:DataTechAIMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:ConsumerAndHealthcareMemberg:DigitalOperationsMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:ConsumerAndHealthcareMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:HighTechAndManufacturingMemberg:DataTechAIMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:DigitalOperationsMemberg:HighTechAndManufacturingMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659g:HighTechAndManufacturingMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659us-gaap:OperatingSegmentsMemberg:DataTechAIMember2024-01-012024-03-310001398659g:DigitalOperationsMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659us-gaap:OperatingSegmentsMember2024-01-012024-03-310001398659us-gaap:CorporateNonSegmentMember2024-01-012024-03-310001398659g:DataTechAIMember2023-01-012023-03-310001398659g:DataTechAIMember2024-01-012024-03-310001398659g:DigitalOperationsMember2023-01-012023-03-310001398659g:DigitalOperationsMember2024-01-012024-03-310001398659g:DeferredTransitionRevenueMember2023-12-310001398659g:DeferredTransitionRevenueMember2024-03-310001398659g:AdvanceFromCustomersMember2023-12-310001398659g:AdvanceFromCustomersMember2024-03-3100013986592024-04-012024-03-3100013986592025-01-012024-03-3100013986592027-01-012024-03-3100013986592029-01-012024-03-310001398659g:SalesIncentiveProgramsMember2022-12-310001398659g:ProcessTransitionActivitiesMember2022-12-310001398659g:SalesIncentiveProgramsMember2023-12-310001398659g:ProcessTransitionActivitiesMember2023-12-310001398659g:SalesIncentiveProgramsMember2023-03-310001398659g:ProcessTransitionActivitiesMember2023-03-310001398659g:SalesIncentiveProgramsMember2024-03-310001398659g:ProcessTransitionActivitiesMember2024-03-310001398659g:SalesIncentiveProgramsMember2023-01-012023-03-310001398659g:ProcessTransitionActivitiesMember2023-01-012023-03-310001398659g:SalesIncentiveProgramsMember2024-01-012024-03-310001398659g:ProcessTransitionActivitiesMember2024-01-012024-03-310001398659us-gaap:CapitalAdditionsMember2023-01-012023-12-310001398659us-gaap:CapitalAdditionsMember2024-01-012024-03-310001398659us-gaap:MinistryOfFinanceIndiaMember2024-03-310001398659us-gaap:SubsequentEventMember2024-05-022024-05-02

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period ended March 31, 2024
Or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from              to             
Commission file number: 001-33626
 
GENPACT LIMITED
(Exact name of registrant as specified in its charter)
 
 
Bermuda98-0533350
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
Canon's Court
22 Victoria Street
Hamilton HM 12
Bermuda
(441298-3300
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common shares, par value $0.01 per shareGNew York Stock Exchange
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.
 
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
 
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 3, 2024, there were 179,979,368 common shares, par value $0.01 per share, of the registrant issued and outstanding.
 
 
 




TABLE OF CONTENTS
 
Item No.Page No.
1.
2.
3.
4.
1.
1A.
2.
5.
6.



PART I - FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements

GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share data and share count) 

NotesAs of December 31, 2023As of March 31, 2024
Assets
Current assets
Cash and cash equivalents$583,670 $478,398 
Accounts receivable, net of allowance for credit losses of $18,278 and $21,294 as of December 31, 2023 and March 31, 2024, respectively
31,116,273 1,147,233 
Prepaid expenses and other current assets6191,566 204,811 
Total current assets$1,891,509 $1,830,442 
Property, plant and equipment, net8189,803 193,805 
Operating lease right-of-use assets186,167 199,118 
Deferred tax assets22298,921 281,945 
Intangible assets, net953,028 46,305 
Goodwill91,683,782 1,679,720 
Contract cost assets19202,543 204,918 
Other assets, net of allowance for credit losses of $4,096 and $7,174 as of December 31, 2023 and March 31, 2024, respectively
299,960 304,389 
Total assets $4,805,713 $4,740,642 
Liabilities and equity
Current liabilities
Short-term borrowings10$10,000 $50,000 
Current portion of long-term debt11432,242 425,768 
Accounts payable27,739 28,032 
Income taxes payable2238,458 39,373 
Accrued expenses and other current liabilities12759,180 595,350 
Operating leases liability50,313 46,879 
Total current liabilities$1,317,932 $1,185,402 
Long-term debt, less current portion11824,720 818,327 
Operating leases liability168,015 180,724 
Deferred tax liabilities2211,706 11,589 
Other liabilities13234,948 246,230 
Total liabilities$2,557,321 $2,442,272 
Shareholders' equity
Preferred shares, $0.01 par value, 250,000,000 authorized, none issued
  
Common shares, $0.01 par value, 500,000,000 authorized, 179,494,132 and 179,979,368 issued and outstanding as of December 31, 2023 and March 31, 2024, respectively
1,789 1,794 
Additional paid-in capital1,883,944 1,879,099 
Retained earnings1,085,209 1,144,671 
Accumulated other comprehensive income (loss)(722,550)(727,194)
Total equity$2,248,392 $2,298,370 
Commitments and contingencies23
Total liabilities and equity$4,805,713 $4,740,642 


 See accompanying notes to the Consolidated Financial Statements.
3


GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data and share count)
 
Three months ended March 31,
Notes20232024
Net revenues19$1,089,319 $1,131,237 
Cost of revenue719,078 734,759 
Gross profit$370,241 $396,478 
Operating expenses:
Selling, general and administrative expenses216,485 235,031 
Amortization of acquired intangible assets98,255 6,927 
Other operating (income) expense, net20389 (5,466)
Income from operations $145,112 $159,986 
Foreign exchange gains (losses), net(1,040)837 
Interest income (expense), net21(9,627)(10,242)
Other income (expense), net4,030 5,787 
Income before income tax expense$138,475 $156,368 
Income tax expense2232,374 39,421 
Net income$106,101 $116,947 
Earnings per common share17
Basic$0.58 $0.65 
Diluted$0.57 $0.64 
Weighted average number of common shares used in computing earnings per common share17
Basic183,795,404 180,416,537 
Diluted187,586,277 181,937,555 
    
 
See accompanying notes to the Consolidated Financial Statements.
4


GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(In thousands)

 
Three months ended March 31,
20232024
Net income$106,101 $116,947 
Other comprehensive income:
Currency translation adjustments16,994 (15,975)
Gain on cash flow hedging derivatives, net of taxes (Note 5)13,091 11,411 
Retirement benefits (expense), net of taxes917 (80)
Other comprehensive income (loss) 31,002 (4,644)
Comprehensive income$137,103 $112,303 
 
See accompanying notes to the Consolidated Financial Statements.
5


GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Equity
For the three months ended March 31, 2023
(Unaudited)
(In thousands, except share count)
 
Common sharesAccumulated Other
Comprehensive
Income (Loss)
No. of
Shares
AmountAdditional 
Paid-in Capital
Retained
Earnings
Total
Equity
Balance as of January 1, 2023182,924,416 $1,823 $1,777,453 $780,007 $(733,125)$1,826,158 
Issuance of common shares on exercise of options (Note 15)642,280 6 12,797 — — 12,803 
Issuance of common shares under the employee stock purchase plan (Note 15)72,645 1 3,120 — — 3,121 
Net settlement on vesting of restricted share units (Note 15)309,531 3 (7,286)— — (7,283)
Net settlement on vesting of performance units (Note 15)410,843 4 (11,009)— — (11,005)
Stock repurchased and retired (Note 16)(630,605)(6)— (29,994)— (30,000)
Expenses related to stock repurchased, including taxes (Note 16)— — — (13)— (13)
Stock-based compensation expense (Note 15)— — 19,704 — — 19,704 
Comprehensive income (loss):
Net income (loss)— — — 106,101 — 106,101 
Other comprehensive income (loss)— — — — 31,002 31,002 
Dividend ( $0.1375 per common share, Note 16)
— — — (25,255)— (25,255)
Balance as of March 31, 2023183,729,110 $1,831 $1,794,779 $830,846 $(702,123)$1,925,333 
 
See accompanying notes to the Consolidated Financial Statements.

6



GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Equity
For the three months ended March 31, 2024
(Unaudited)
(In thousands, except share count)

Common sharesAccumulated Other
Comprehensive
Income (Loss)
No. of
Shares
AmountAdditional 
Paid-in Capital
Retained
Earnings
Total
Equity
Balance as of January 1, 2024179,494,132 $1,789 $1,883,944 $1,085,209 $(722,550)$2,248,392 
Issuance of common shares on exercise of options (Note 15)135,051 1 3,930 — — 3,931 
Issuance of common shares under the employee stock purchase plan (Note 15)93,659 1 2,865 — — 2,866 
Net settlement on vesting of restricted share units (Note 15)251,738 3 (3,908)— — (3,905)
Net settlement on vesting of performance units (Note 15)869,713 9 (16,913)— — (16,904)
Stock repurchased and retired (Note 16)(864,925)(9)— (29,976)— (29,985)
Expenses related to stock repurchased, including taxes (Note 16)— — — (17)— (17)
Stock-based compensation expense (Note 15)— — 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 16)
— — — (27,492)— (27,492)
Balance as of March 31, 2024179,979,368 $1,794 $1,879,099 $1,144,671 $(727,194)$2,298,370 
 
See accompanying notes to the Consolidated Financial Statements.
7


GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Three months ended March 31,
20232024
Operating activities
Net income$106,101 $116,947 
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation and amortization18,757 17,280 
Amortization of debt issuance costs 487 488 
Amortization of acquired intangible assets8,255 6,927 
Loss on the sale of the business classified as held for sale (refer to Note 7)802  
Allowance for credit losses (refer to Note 3)3,324 10,897 
Unrealized gain on revaluation of foreign currency assets/liabilities(2,994)(6,700)
Stock-based compensation expense19,704 9,181 
Deferred tax expense1,710 11,510 
Others, net454 167 
Change in operating assets and liabilities:
Increase in accounts receivable(17,794)(40,148)
Increase in prepaid expenses, other current assets, contract cost assets, operating lease right-of-use assets and other assets(11,424)(22,495)
Increase (decrease) in accounts payable(13,261)285 
Decrease in accrued expenses, other current liabilities, operating leases liabilities and other liabilities(167,217)(131,129)
Increase in income taxes payable19,032 1,229 
Net cash used for operating activities$(34,064)$(25,561)
Investing activities
Purchase of property, plant and equipment(12,578)(24,005)
Payment for internally generated intangible assets (including intangibles under development)(828)(667)
Proceeds from sale of property, plant and equipment9  
Payment for business acquisitions, net of cash acquired(682) 
Payment for divestiture of business(19,510) 
Net cash used for investing activities$(33,589)$(24,672)
Financing activities
Repayment of finance lease obligations(3,705)(3,433)
Repayment of long-term debt(6,625)(13,250)
Proceeds from short-term borrowings75,000 50,000 
Repayment of short-term borrowings(46,000)(10,000)
Proceeds from issuance of common shares under stock-based compensation plans 15,924 6,797 
Payment for net settlement of stock-based awards(18,172)(20,820)
Payment of earn-out consideration(2,399) 
Dividend paid(25,255)(27,492)
Payment for stock repurchased and retired (including expenses related to stock repurchased)(30,013)(30,002)
Net cash used for financing activities$(41,245)$(48,200)
Net decrease in cash and cash equivalents(108,898)(98,433)
Effect of exchange rate changes 14,414 (6,839)
Cash and cash equivalents at the beginning of the period646,765 583,670 
Cash and cash equivalents at the end of the period$552,281 $478,398 
Supplementary information
Cash paid during the period for interest$6,112 $11,393 
Cash paid during the period for income taxes, net of refund$23,001 $20,108 
 See accompanying notes to the Consolidated Financial Statements.
8


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

1. Organization

The Company is a global professional services firm that drives digitally-led innovation and runs digitally-enabled intelligent operations for its clients, guided by its experience running thousands of processes for hundreds of Fortune Global 500 clients. The Company has over 131,000 employees serving clients in key industry verticals from more than 35 countries. 

2. Summary of significant accounting policies
 
(a) Basis of preparation and principles of consolidation

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, 2023. 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.
 
(b) Use of estimates

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, the valuation of derivative financial instruments, the measurement of lease liabilities and right-of-use (“ROU”) assets, measurements of stock-based compensation, assets and obligations related to employee benefits, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, variable consideration, other obligations for revenue recognition, 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.

(c) Business combinations, goodwill and other intangible assets

The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standard Codification (“ASC”) Topic 805, Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Contingent consideration is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is re-measured to fair value as of each reporting date until the contingency is resolved. Changes in fair value are recognized in earnings. All assets and liabilities of the acquired businesses, including goodwill, are assigned to reporting units. Acquisition-related costs are expensed as incurred under selling, general and administrative expenses.

9


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

2. Summary of significant accounting policies (Continued)

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 9 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 assets1-8 years
Marketing-related intangible assets1-8 years
Technology-related intangible assets2-10 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/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/lease to customers which are under development and not put to use are disclosed under “intangible assets under development.” Advances paid towards the acquisition of intangible assets outstanding as of each balance sheet date are disclosed under “intangible assets under development.”
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.
10


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

2. Summary of significant accounting policies (Continued)

(d) Financial instruments and concentration of credit risk

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.

(e) Accounts receivable

Accounts receivable are recorded at the invoiced or to be invoiced amount and do not bear interest. 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 de-recognizes 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.
 
(f) Revenue Recognition

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 generation or 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.
11


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

2. Summary of significant accounting policies (Continued)
 
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 perpetual licenses is recognized upfront at the point in time when the software is made available to the customer. Revenue from distinct, non-cancellable, subscription-based licenses is recognized at the point in time it 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. 

12


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

2. Summary of significant accounting policies (Continued)

(g) Leases

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 benefit 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 any accumulated impairment losses. 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”). 
 
Significant judgements
 
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.
13


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

2. Summary of significant accounting policies (Continued)

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.

(h) Cost of revenue

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 client or a set of processes. It also includes operational expenses, which consist of facilities maintenance expenses, travel and living expenses, rent, IT expenses, 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.
 
(i) Selling, general and administrative expenses
 
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.
 
(j) Credit losses

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 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. The Company believes the most relevant forward-looking factors are economic environment, gross domestic product, inflation rates and unemployment rates for each of the countries in which the Company or its customers operate, and accordingly the Company adjusts historical loss rates based on expected changes in these factors. At every reporting date, observed historical default rates are updated to reflect changes in the Company’s forward-looking estimates.

Credit losses for other financial assets and deferred billings are based on the discounted cash flow (“DCF”) method. Under the DCF method, the allowance for credit losses reflects the difference between the contractual cash flows due in accordance with the contract and the present value of the cash flows expected to be collected. The expected cash flows are discounted at the effective interest rate of the financial asset. Such allowances are based on the credit losses expected to arise over the life of the asset which includes consideration of prepayments based on the Company’s expectation as of the balance sheet date.

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.
14


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

2. Summary of significant accounting policies (Continued)

(k) Impairment of long-lived assets

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.

(l) Assets held for sale

A long-lived asset (or a disposal group for a long-lived asset comprising a group of assets and related liabilities) is classified as held for sale if it is highly probable that the asset will be recovered through sale rather than continuing use.

The Company records assets held for sale at the lower of its carrying value or fair value less costs to sell. The following criteria are used to determine if a business is held for sale: (i) management, having the authority to approve a sale, commits to a plan to sell; (ii) the business is available for immediate sale in its present condition; (iii) an active program to locate a buyer and a plan to sell the business have been initiated; (iv) the sale of the business is probable within one year; (v) the business is being actively marketed for sale at a reasonable price relative to its fair value; and (vi) it is unlikely that the plan to sell will be withdrawn or that significant changes to the plan will be made.

In determining the fair value of the assets less costs to sell, the Company considers factors including current sales prices for comparable assets, discounted cash flow projections, third party valuation and any indicative offers. The Company’s assumptions about fair value require significant judgment because the current market is highly sensitive to changes in economic conditions. The Company estimates the fair values of assets held for sale based on current market conditions and assumptions made by management, which may differ from actual results and may result in impairments if market conditions deteriorate.

Any impairment loss on the initial classification and subsequent measurement is recognized as an expense. Any subsequent increase in fair value less costs to sell (not exceeding the accumulated impairment loss that has been previously recognized) is recognized in the income statement.

When assets are classified as held for sale, the Company does not record any depreciation and amortization for the respective property, plant and equipment and intangibles.

(m) Recently issued accounting pronouncements

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 standard has 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. The 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 and it did not have any material impact on its consolidated results of operations, cash flows, financial position and disclosures.
15


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

2. Summary of significant accounting policies (Continued)

The following recently released accounting standard has not yet been adopted by the Company:

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. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its disclosures.

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.

3. Accounts receivable, net of allowance for credit losses

The following table provides details of the Company’s allowance for credit losses on accounts receivable:
 
Year ended December 31, 2023 Three months ended March 31, 2024
Opening balance as of January 1$20,442 $18,278 
Additions (net), charged to income statement3,081 7,819 
Deductions/effect of exchange rate fluctuations(5,245)(4,803)
Closing balance$18,278 $21,294 
 

Accounts receivable were $1,134,551 and $1,168,527, and allowances for credit losses were $18,278 and $21,294, resulting in net accounts receivable balances of $1,116,273 and $1,147,233 as of December 31, 2023 and March 31, 2024, respectively.

In addition, deferred billings were $90,094 and $96,945 and allowances for credit losses on deferred billings were $4,096 and $7,174, resulting in net deferred billings balances of $85,998 and $89,771 as of December 31, 2023 and March 31, 2024, respectively.

During the three months ended March 31, 2023 and 2024, the Company recorded a charge of $0 and $3,078, 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 Companys consolidated balance sheet as of December 31, 2023 and March 31, 2024.

The Company has a revolving accounts receivable-based facility of $75,000 as of December 31, 2023 and March 31, 2024, 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 period ended December 31, 2023 and March 31, 2024 was $51,367 and $55,870, respectively. The principal amount outstanding against this facility as of December 31, 2023 and March 31, 2024 was $51,344 and $55,870, respectively. The cost of factoring such accounts receivable during the three months ended March 31, 2023 and 2024 was $461 and $706, 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 Companys consolidated statements of income.

16


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

3. Accounts receivable, net of allowance for credit losses (Continued)

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 $324,401 during the year ended December 31, 2023, and $47,367 during the three months ended March 31, 2024, 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, 2023 and 2024 was $1,400 and $1,175, respectively.

4. Fair value measurements
 
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, 2023 and March 31, 2024: 

As of December 31, 2023
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)$22,307 $ $22,307 $ 
Deferred compensation plan assets (Note a, d)51,983   51,983 
Total$74,290 $ $22,307 $51,983 
Liabilities
Derivative instruments (Note b, c)17,363  17,363  
Deferred compensation plan liability (Note b, e)51,354   51,354 
Total$68,717 $ $17,363 $51,354 


As of March 31, 2024
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)$29,468 $ $29,468 $ 
Deferred compensation plan assets (Note a, d)55,559   55,559 
Total$85,027 $ $29,468 $55,559 
Liabilities
Derivative instruments (Note b, c)10,311  10,311  
Deferred compensation plan liability (Note b, e)54,519   54,519 
Total$64,830 $ $10,311 $54,519 
 
17


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

4. Fair value measurements (Continued)

(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 earn-out consideration categorized as level 3 in the fair value hierarchy for the three months ended March 31, 2023 and 2024:
 
Three months ended March 31,
20232024
Opening balance$2,517 $ 
Payments made on earn-out consideration(2,399)
Change in fair value of earn-out consideration (Note a)(118) 
Closing balance$ $ 

(a)Changes in the fair value of earn-out consideration are reported in “other operating (income) expense, net” in the consolidated statements of income.

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, 2023 and 2024:
 
Three months ended March 31,
20232024
Opening balance$40,261 $51,983 
Additions (net of redemption)2,098 368 
Change in fair value of deferred compensation plan assets (Note a)2,386 3,208 
Closing balance$44,745 $55,559 

(a)Changes in the fair value of plan assets are reported in “other income (expense), net” in the consolidated statements of income.
18


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

4. Fair value measurements (Continued)

The following table provides a roll-forward of the fair value of deferred compensation liabilities categorized as level 3 in the fair value hierarchy for the three months ended March 31, 2023 and 2024:

Three months ended March 31,
20232024
Opening balance$39,654 $51,354 
Additions (net of redemption)2,098 1 
Change in fair value of deferred compensation plan liabilities (Note a)2,343 3,164 
Closing balance$44,095 $54,519 

(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.

5. Derivative financial instruments

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 57 months and the forecasted transactions are expected to occur during the same period.
19


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

5. Derivative financial instruments (Continued)

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, 2023As of March 31, 2024As of December 31, 2023As of March 31, 2024
Foreign exchange forward contracts denominated in:
United States Dollars (sell) Indian Rupees (buy)$1,892,800 $2,254,500 $5,278 $10,525 
United States Dollars (sell) Mexican Peso (buy)66,000 81,750 2,129 4,107 
United States Dollars (sell) Philippines Peso (buy)118,500 154,250 637 (1,535)
Euro (sell) United States Dollars (buy)222,363 226,112 (3,499)2,028 
Euro (sell) Romanian Leu (buy)66,384 48,649 90 327 
Japanese Yen (sell) Chinese Renminbi (buy)52,562 42,715 803 3,211 
United States Dollars (sell) Chinese Renminbi (buy)40,800 31,800 (638)(1,083)
Pound Sterling (sell) United States Dollars (buy)14,915 22,634 (398)(89)
United States Dollars (sell) Hungarian Font (buy)32,000 32,750 809 (606)
Australian Dollars (sell) Indian Rupees (buy)90,077 132,478 (1,914)1,897 
United States Dollars (sell) Polish Zloty (buy)51,000 69,750 3,046 1,410 
Japanese Yen (sell) United States Dollars (buy)7,000 7,000 323 350 
Israeli Shekel (buy) United States Dollars (sell)15,000 15,000 1,175 117 
South African Rand (sell) United States Dollars (buy)27,000 27,000 216 260 
United States Dollars (sell) Brazilian Real (buy)4,000 4,000 55 (18)
United States Dollars (sell) Costa Rica Colon (buy)13,000 13,000 555 363 
Pound Sterling (buy) United States Dollar (sell)22,300 14,865 669 277 
United States Dollars (sell) Malaysian Ringgit (buy)18,000 13,500 161 (315)
United States Dollars (sell) Canadian Dollar (buy) 9,000  (79)
Interest rate swaps (floating to fixed)148,125 146,250 (4,553)(1,990)
$4,944 $19,157 

(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.
20


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

5. Derivative financial instruments (Continued)

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: 
Cash flow hedgesNon-designated
As of December 31, 2023As of March 31, 2024As of December 31, 2023As of March 31, 2024
Assets
Prepaid expenses and other current assets$13,273 $17,032 $5,783 $3,206 
Other assets$3,251 $9,230 $ $ 
Liabilities
Accrued expenses and other current liabilities$6,833 $3,721 $1,276 $853 
Other liabilities$9,254 $5,737 $ $ 
 
Cash flow hedges

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.

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 by Genpact Luxembourg S.à r.l. (“Genpact Luxembourg”) and Genpact USA, Inc. (“Genpact USA”), both wholly-owned subsidiaries of the Company, in March 2021 (the “2021 Senior Notes”), 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 and is being amortized to interest expense over the life of the 2021 Senior Notes. The remaining gain to be amortized related to the treasury rate lock agreement as of December 31, 2023 and March 31, 2024 was $368 and $328, respectively.
21


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

5. Derivative financial instruments (Continued)

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: 

Three months ended March 31,
20232024
Before 
tax
Amount
Tax 
(Expense)
 or Benefit
Net of 
tax
Amount
Before 
tax
Amount
Tax 
(Expense)
or Benefit
Net of 
tax
Amount
Opening balance$(7,255)$1,543 $(5,712)$805 $146 $951 
Net gains (losses) reclassified into statement of income on completion of hedged transactions2,191 (538)1,653 2,960 (758)2,202 
Changes in fair value of effective portion of outstanding derivatives, net18,824 (4,079)14,744 19,287 (5,674)13,613 
Gain on cash flow hedging derivatives, net16,633 (3,541)13,091 16,327 (4,916)11,411 
Closing balance$9,378 $(1,998)$7,379 $17,132 $(4,770)$12,362 
The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below: 
Derivatives in Cash Flow Hedging RelationshipsAmount of Gain (Loss) recognized in OCI on Derivatives (Effective Portion)Location of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion)Amount of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion)
Three months ended March 31,Three months ended March 31,
2023202420232024
Forward foreign exchange contracts$17,375 $16,449 Revenue$635 $391 
Interest rate swaps$1,449 $2,838 Cost of revenue(1,413)1,745 
Selling, general and administrative expenses(191)508 
Interest expense3,160 316 
$18,824 $19,287 $2,191 $2,960 

There were no gains (losses) recognized in the statement of income on the ineffective portion of derivatives and excluded from effectiveness testing for the three months ended March 31, 2023 and 2024, respectively.


Non-designated Hedges
Amount of Gain (Loss) recognized in Statement of Income on Derivatives
Three months ended March 31,
Derivatives not designated as hedging instrumentsLocation of Gain (Loss)  recognized in Statement of Income on Derivatives20232024
Forward foreign exchange contracts (Note a)Foreign exchange gains (losses), net$7,851 $730 
$7,851 $730 
22


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

5. Derivative financial instruments (Continued)

(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 (losses), net in the consolidated statements of income.
6. Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:
 
As of December 31, 2023As of March 31, 2024
Advance income and non-income taxes$90,136 $90,764 
Contract asset (Note 19)17,45419,296
Prepaid expenses36,19648,879
Derivative instruments (Note 5)19,05620,238
Employee advances5,0873,732
Deposits 4,4064,788
Advances to suppliers1,6891,098
Others17,54216,016
Total$191,566 $204,811 

7. Assets and liabilities held for sale

During the year ended December 31, 2022, the Company took actions to realign its portfolio to focus on services it believes have the greatest opportunities for growth, and deprioritized assets that no longer fit with its long-term strategy. Pursuant to a plan approved by management in the second quarter of 2022, the Company identified and divested a business (the “Business”) that was part of the Company's Consumer and Healthcare segment.

The transaction to divest the Business included the sale of 100% of the issued and outstanding shares of capital stock of an entity pursuant to a stock purchase agreement, which was completed in December 2022. It also included the sale of certain assets and liabilities pursuant to an asset purchase agreement signed during the fourth quarter of 2022. The sale of such assets was completed in February 2023.

Pursuant to the stock purchase agreement related to the sale of the Business, the Company is entitled to a potential earn-out of up to $10,600, contingent upon the Business signing contracts with certain clients and invoicing them during 2023. The Company has determined that the likelihood of achieving these events is uncertain, and accordingly, the Company has opted to record the earn-out if and when the consideration is determined to be realizable. During the year ended December 31 2023, the Company did not receive any earn-out consideration under the stock purchase agreement as the earn-out events were not achieved. Accordingly, the Company did not record any income from earn-out consideration.

Pursuant to the asset purchase agreement signed in 2022 related to the sale of the Business, the Company holds a 1.5% fixed rate unsecured loan note amounting to $18,001 issued by the buyer group. The Company's obligation to transfer $18,001 to the buyer group in exchange for the note was satisfied in February 2023 upon the closing of the transaction. The note and interest thereon become receivable by the Company upon a future share sale, disposal or listing by the buyer group or early voluntary repayment of the note at the discretion of the buyer group. The Company previously deemed the likelihood of recovery of principal and interest on the note to be remote and not in the control of the Company. Accordingly, the Company did not record a value for the note.
23


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

7. Assets and liabilities held for sale (Continued)

In November 2023, the Company and the buyer group signed a supplemental deed amending the loan note. Under the supplemental deed, the redemption period was shortened to six months from the execution of the supplemental deed, and the redemption sum was reduced to $1,500. However, under the terms of the supplemental deed, if the Company did not receive the payment of the redemption sum within the revised six month redemption period, the loan note would remain in full force and effect under its original terms and value without modification or amendment under the supplemental deed. In March 2024, the note was redeemed by the buyer group and the Company received the redemption sum of $1,500 against the loan note. The redemption sum received has been recorded in "other operating (income) expense, net" in the Company's consolidated statement of income. See Note 20 for additional information.

The Company completed the sale of the Business in February 2023, resulting in a net payout of $2,091 and a loss of $802 on the sale of the Business in the three months ended March 31, 2023, in addition to an impairment charge of $32,575 recorded in the year ended December 31, 2022. However, the Company recorded a gain of $1,500 in the three months ended March 31, 2024 upon the buyer group's redemption of the loan note as described above. The loss (gain) on the sale of business classified as held for sale has been recorded in "other operating (income) expense, net" in the Company's consolidated statement of income. See Note 20 for additional information.

8. Property, plant and equipment, net
 
The following table provides the gross and net amount of property, plant and equipment:
 
As of December 31, 2023As of March 31, 2024
Property, plant and equipment, gross$780,134 $791,103 
Less: Accumulated depreciation and amortization (590,331)(597,298)
Property, plant and equipment, net$189,803 $193,805 
 
Depreciation expense on property, plant and equipment for the three months ended March 31, 2023 and 2024 was $12,717 and $13,495, respectively. Computer software amortization for the three months ended March 31, 2023 and 2024 was $689 and $533, respectively.

9. Goodwill and intangible assets
 
The following table presents the changes in goodwill for the year ended December 31, 2023 and the three months ended March 31, 2024:
 
For the year ended December 31, 2023For the three months ended March 31, 2024
Opening balance1,684,1961,683,782
Effect of exchange rate fluctuations(414)(4,062)
Closing balance1,683,7821,679,720 


The following table presents the changes in goodwill by reporting unit for the year ended December 31, 2023:

Financial ServicesConsumer and HealthcareHigh Tech and ManufacturingTotal
Opening balance408,736592,907682,5531,684,196
Effect of exchange rate fluctuations(62)(127)(225)(414)
Closing balance408,674592,780682,3281,683,782
24


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
9. Goodwill and intangible assets (Continued)

The following table presents the changes in goodwill by reporting unit for the three months ended March 31, 2024: 
Financial ServicesConsumer and HealthcareHigh Tech and ManufacturingTotal
Opening balance408,674592,780682,3281,683,782
Effect of exchange rate fluctuations(1,133)(1,473)(1,456)(4,062)
Closing balance407,541 591,307 680,872 1,679,720 

The total amount of goodwill deductible for tax purposes was $263,910 and $256,767 as of December 31, 2023 and March 31, 2024, respectively.

The Company’s intangible assets are as follows:
 
As of December 31, 2023As of March 31, 2024
Gross 
carrying amount
Accumulated amortization 
& Impairment
NetGross 
carrying amount
Accumulated amortization 
& Impairment
Net
Customer-related intangible assets$474,090 $436,104 $37,986 $472,062 $439,269 $32,793 
Marketing-related intangible assets97,84088,6489,19297,74889,8507,898
Technology-related intangible assets129,600123,7505,850130,094124,4805,614
$701,530 $648,502 $53,028 $699,904 $653,599 $46,305 

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, 2023 and 2024 were $8,255 and $6,927, 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, 2023 and 2024 were $2,251 and $458, respectively.

During the three months ended March 31, 2023 and 2024, the Company tested for recoverability certain customer-related and technology-related intangible assets, including those under development, and certain property, plant and equipment, as a result of changes in market trends and the Company’s investment strategy, including the Company's decision to cease certain service offerings. Based on the results of this testing, the Company determined that the carrying values of the assets tested were recoverable. There was no impairment expense recorded in the three months ended March 31, 2023 and 2024.
25


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)


10. Short-term borrowings

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, 2023 and March 31, 2024, the limits available were $23,302 and $23,248, respectively, of which $9,336 and $9,277, 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., Inc. (“Genpact USA”), Genpact Global Holdings (Bermuda) Limited (“GGH”) and Genpact Luxembourg S.à r.l., wholly-owned subsidiaries of the Company (“Genpact Luxembourg”, and together with Genpact USA and GGH, the “Borrowers”), as borrowers, Wells Fargo Bank, 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, 2023 and March 31, 2024. As of December 31, 2023 and March 31, 2024, a total of $11,627 and $51,532, respectively, was utilized, of which $10,000 and $50,000, respectively, constituted funded drawdown and $1,627 and $1,532, respectively, 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, 2023 and March 31, 2024, the Company was in compliance with the financial covenants of the 2022 Credit Agreement.

11. Long-term debt
 
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, 2024, 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.
26


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

11. Long-term debt (Continued)

As of December 31, 2023 and March 31, 2024, the amount outstanding under the Company's term loan, net of debt amortization expense of $1,258 and $1,170, was $508,867 and $495,705, respectively.

Indebtedness under the 2022 Credit Agreement is unsecured. The amount outstanding on the term loan as of March 31, 2024 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, 2024, net of debt amortization expense, is as follows:
 
Year endingAmount
202419,616
202526,173 
202626,192 
2027423,724 
Total$495,705 

Genpact Luxembourg issued $400,000 aggregate principal amount of 3.375% senior notes in November 2019 (the “2019 Senior Notes”). The 2019 Senior Notes are fully guaranteed by the Company. The total debt issuance cost of $2,937 incurred in connection with the 2019 Senior Notes offering is being amortized over the life of the 2019 Senior Notes as an additional interest expense. As of December 31, 2023 and March 31, 2024, the amount outstanding under the 2019 Senior Notes, net of debt amortization expense of $536 and $391, was $399,464 and $399,609, respectively, which is payable on December 1, 2024.

In March 2021, Genpact Luxembourg and Genpact USA co-issued $350,000 aggregate principal amount of 1.750% senior notes (the “2021 Senior Notes,” and together with the 2019 Senior Notes, the “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, 2023 and March 31, 2024, the amount outstanding under the 2021 Senior Notes, net of debt amortization expense of $1,369 and $1,219, respectively, was $348,631 and $348,781, respectively, which is payable on April 10, 2026.

The Company pays interest on (i) the 2019 Senior Notes semi-annually in arrears on June 1 and December 1 of each year, and (ii) the 2021 Senior Notes semi-annually in arrears on April 10 and October 10 of each year, ending on the maturity dates of December 1, 2024 and April 10, 2026, 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 2019 Senior Notes, November 1, 2024, and in the case of the 2021 Senior Notes, March 10, 2026, a specified “make-whole” premium. 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, 2024, the Company and its applicable subsidiaries were in compliance with the covenants. 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 Senior Notes is subject to adjustment if the credit rating of the Senior Notes is downgraded, up to a maximum increase of 2.0%. 
27


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

11. Long-term debt (Continued)

A summary of the Company’s long-term debt is as follows:
 
As of December 31, 2023As of March 31, 2024
 Credit facility, net of amortization expenses $508,867 $495,705 
 3.375% 2019 Senior Notes, net of debt amortization expenses
399,464399,609
 1.750% 2021 Senior Notes, net of debt amortization expenses
348,631$348,781 
Total$1,256,962 $1,244,095 
 Current portion 432,242425,768
 Non-current portion 824,720818,327
Total $1,256,962 $1,244,095 
 
12. Accrued expenses and other current liabilities

 Accrued expenses and other current liabilities consist of the following:
As of December 31, 2023As of March 31, 2024
Accrued expenses $165,378 $158,231 
Accrued employee cost 322,601141,332
Statutory liabilities 76,022101,890
Retirement benefits 2,3861,896
Compensated absences29,77932,216
Derivative instruments (Note 5)8,1094,574
Contract liabilities (Note 19)112,435111,802
Finance leases liability10,8379,158
Other liabilities31,63334,251
$759,180 $595,350 

13. Other liabilities
 
Other liabilities consist of the following:
 
As of December 31, 2023As of March 31, 2024
Accrued employee cost $3,329 $2,702 
Retirement benefits 13,94719,126
Compensated absences50,21450,627
Derivative instruments (Note 5)9,2545,737
Contract liabilities (Note 19)59,39363,585
Finance leases liability6,8745,928
Others91,93798,525
$234,948 $246,230 

28


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

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

 Defined benefit plans
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, 2023 and 2024 include the following components: 
Three months ended March 31,
20232024
Service costs$3,760 $4,303 
Interest costs1,7362,018 
Amortization of actuarial loss 16762 
Expected return on plan assets (1,261)(1,362)
Net defined benefit plan costs$4,402 $5,021 

Defined contribution plans
During the three months ended March 31, 2023 and 2024, the Company contributed the following amounts to defined contribution plans in various jurisdictions:
 
Three months ended March 31,
20232024
India$11,151 $12,844 
U.S.5,4576,096 
U.K.5,9605,935 
China6,8517,340 
Other Regions5,2614,394 
Total$34,680 $36,609 
 
Deferred compensation plan
 
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.
29


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

14. Employee benefit plans (Continued)

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 $51,354 and $54,519 as of December 31, 2023 and March 31, 2024, 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 $51,983 and $55,559 as of December 31, 2023 and March 31, 2024, 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, 2023 and 2024, the change in the fair value of Plan assets was $2,386 and $3,208, respectively, which is included in “other income (expense), net,” in the consolidated statements of income. During the three months ended March 31, 2023 and 2024, the change in the fair value of deferred compensation liabilities was $2,343 and $3,164, respectively, which is included in “selling, general and administrative expenses.” 

15. Stock-based compensation
The Company has issued options 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, 2023 and March 31, 2024 were $19,341 and $8,819, respectively. These costs have been allocated to “cost of revenue” and “selling, general and administrative expenses.”     
30


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

15. Stock-based compensation (Continued)
Stock options
 All options granted under the 2007 and 2017 Omnibus Plans 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, 2023 and 2024.
A summary of stock option activity during the three months ended March 31, 2024 is set out below:
 
Three Months Ended March 31, 2024
Shares
 arising
out of options
Weighted
 average
exercise price
Weighted average
remaining
contractual life (years)
Aggregate
intrinsic
value
Outstanding as of January 1, 20245,998,14835.77 5.5— 
Granted  — — 
Forfeited(205,251)45.16 — — 
Expired  — — 
Exercised (135,051)29.11 — 519
Outstanding as of March 31, 20245,657,84635.59 5.212,471
Vested as of March 31, 2024 and expected to vest thereafter (Note a)5,502,87935.28 5.212,471
Vested and exercisable as of March 31, 20244,377,65432.28 4.712,471
Weighted average grant date fair value of grants during the period 
 
(a)Options expected to vest reflect an estimated forfeiture rate.
As of March 31, 2024, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $7,605, which will be recognized over the weighted average remaining requisite vesting period of 2.1 years.
31


GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)

15. Stock-based compensation (Continued)
Restricted share units

The Company has granted restricted share units (“RSUs”) under the 2007 and 2017 Omnibus Plans. 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, 2024 is set out below: