Genpact (NYSE: G) grows Q1 2026 profit as cash flow weakens
Filing Impact
Filing Sentiment
Form Type
10-Q
Genpact Limited reported higher results for the quarter ended March 31, 2026. Net revenues rose to $1,296,072 thousand from $1,214,926 thousand a year earlier, while net income increased to $147,992 thousand from $130,853 thousand. Diluted earnings per share improved to $0.86 from $0.73.
Operating cash flow turned negative at $(23,535) thousand versus positive $40,436 thousand in the prior-year quarter, reflecting higher working capital use. Cash and cash equivalents declined to $578,079 thousand from $853,836 thousand at year-end 2025, partly after paying a $77,500 thousand earn-out related to the XponentL Data acquisition. Total assets were $5,617,239 thousand and equity was $2,475,193 thousand as of March 31, 2026.
Positive
- None.
Negative
- None.
Insights
Revenue and earnings improved, but cash flow and hedging swings offset some strength.
Genpact delivered quarter-on-quarter growth with net revenues at $1,296,072 thousand and net income at $147,992 thousand, alongside higher diluted EPS of $0.86. This suggests solid operational performance across its data, AI and business process services franchise.
The quality of results is moderated by weaker cash generation. Net cash from operating activities fell to $(23,535) thousand, influenced by working capital movements and payments including the XponentL earn-out. Total debt remained sizeable at over $1,536,343 thousand, while cash declined to $578,079 thousand.
Hedging activity had a visible effect on comprehensive income. Large negative movements in cash flow hedges and currency translation drove other comprehensive loss of $(123,048) thousand, cutting comprehensive income to $24,944 thousand. Future filings will clarify whether cash conversion normalizes and how derivative positions evolve relative to debt and global revenue exposure.
Key Figures
Net revenues: $1,296,072 thousand
Net income: $147,992 thousand
Diluted EPS: $0.86 per share
+5 more
8 metrics
Net revenues
$1,296,072 thousand
Three months ended March 31, 2026
Net income
$147,992 thousand
Three months ended March 31, 2026
Diluted EPS
$0.86 per share
Three months ended March 31, 2026
Operating cash flow
$(23,535) thousand
Net cash provided by (used for) operating activities, Q1 2026
Cash and cash equivalents
$578,079 thousand
As of March 31, 2026
Total long-term debt
$1,536,343 thousand
Including current portion, as of March 31, 2026
XponentL total consideration
$160,157 thousand
Acquisition completed with final earn-out paid by Q1 2026
Shares outstanding
169,504,186 common shares
Issued and outstanding as of March 31, 2026
Key Terms
cash flow hedges, earn-out consideration, deferred compensation plan, right-of-use asset, +2 more
6 terms
cash flow hedges financial
"In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss)..."
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
earn-out consideration financial
"Final earn-out consideration of $77,500 paid by the Company in the three months ended March 31, 2026..."
deferred compensation plan financial
"On July 1, 2018, Genpact LLC... adopted an executive deferred compensation plan (the “Plan”)."
A deferred compensation plan is an arrangement where an employer agrees to pay part of an employee’s pay or bonus at a later date instead of immediately, often to reduce current tax bills or to tie rewards to long-term performance. For investors it matters because these promises create future cash obligations and influence executive incentives and retention; they can affect a company’s reported liabilities, cash flow planning and the risk profile if the business faces financial trouble.
right-of-use asset financial
"Operating lease right-of-use assets | 181,708 | 187,421"
A right-of-use asset is the value a company records on its balance sheet for the practical use of something it leases — like the benefit of living in a rented office or using leased equipment for a set period. Investors care because it turns many leases into on-balance-sheet assets and matching liabilities, which can change reported leverage, asset base and performance metrics much like taking on a loan would.
Accumulated other comprehensive income (loss) financial
"Accumulated other comprehensive income (loss) | ( 861,444 ) | ( 984,492 )"
A balance-sheet line that tracks certain gains and losses that haven’t flowed through the company’s profit-and-loss statement, such as unrealized changes in the value of investments, foreign-currency adjustments, and some pension-related items. Think of it like a storage closet for value swings the company hasn’t ‘realized’ by selling or settling them yet; it changes shareholders’ equity and helps investors see hidden volatility or potential future impacts on book value.
Adjusted Term SOFR financial
"Borrowings under the 2022 Credit Agreement bear interest at a rate equal to... either Adjusted Term SOFR... plus an applicable margin..."
Adjusted term SOFR is a forward‑looking interest benchmark based on short‑term overnight Treasury repo rates, with a small extra amount added to reflect differences from legacy rates. Think of it as a quoted price that has been nudged to make payments comparable to older benchmarks; it matters to investors because it directly influences borrowing costs, bond yields and cash‑flow forecasts, affecting valuations and hedging outcomes.
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, 2026
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
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(441 ) 298-3300
(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 class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller 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 5, 2026, there were 169,506,510 common shares, par value $0.01 per share, of the registrant issued and outstanding.
TABLE OF CONTENTS
| Item No. | Page No. | |||||||||||||||||||
PART I | Financial Information | |||||||||||||||||||
| 1. | Unaudited Consolidated Financial Statements | |||||||||||||||||||
Consolidated Balance Sheets as of December 31, 2025 and March 31, 2026 | 3 | |||||||||||||||||||
Consolidated Statements of Income for the three months ended March 31, 2025 and 2026 | 4 | |||||||||||||||||||
Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2025 and 2026 | 5 | |||||||||||||||||||
Consolidated Statements of Equity for the three months ended March 31, 2025 and 2026 | 6 | |||||||||||||||||||
Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2026 | 8 | |||||||||||||||||||
Notes to the Consolidated Financial Statements | 9 | |||||||||||||||||||
| 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 43 | ||||||||||||||||||
| 3. | Quantitative and Qualitative Disclosures About Market Risk | 56 | ||||||||||||||||||
| 4. | Controls and Procedures | 57 | ||||||||||||||||||
PART II | Other Information | |||||||||||||||||||
| 1. | Legal Proceedings | 58 | ||||||||||||||||||
| 1A. | Risk Factors | 58 | ||||||||||||||||||
| 2. | Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 58 | ||||||||||||||||||
| 5. | Other Information | 58 | ||||||||||||||||||
| 6. | Exhibits | 59 | ||||||||||||||||||
SIGNATURES | 60 | |||||||||||||||||||
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)
| Notes | As of December 31, 2025 | As of March 31, 2026 | |||||||||||||||
| Assets | |||||||||||||||||
| Current assets | |||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||
| Short-term investments | |||||||||||||||||
Accounts receivable, net of allowance for credit losses of $ | 4 | ||||||||||||||||
| Prepaid expenses and other current assets | 7 | ||||||||||||||||
| Total current assets | $ | $ | |||||||||||||||
| Property, plant and equipment, net | 8 | ||||||||||||||||
| Operating lease right-of-use assets | |||||||||||||||||
| Deferred tax assets | 22 | ||||||||||||||||
| Intangible assets, net | 9 | ||||||||||||||||
| Goodwill | 9 | ||||||||||||||||
| Contract cost assets | 19 | ||||||||||||||||
Other assets, net of allowance for credit losses of $ | |||||||||||||||||
| Total assets | $ | $ | |||||||||||||||
| Liabilities and equity | |||||||||||||||||
| Current liabilities | |||||||||||||||||
| Current portion of long-term debt | 11 | ||||||||||||||||
| Accounts payable | |||||||||||||||||
| Income taxes payable | 22 | ||||||||||||||||
| Accrued expenses and other current liabilities | 12 | ||||||||||||||||
| Operating lease liabilities | |||||||||||||||||
| Total current liabilities | $ | $ | |||||||||||||||
| Long-term debt, less current portion | 11 | ||||||||||||||||
| Operating lease liabilities | |||||||||||||||||
| Deferred tax liabilities | 22 | ||||||||||||||||
| Other liabilities | 13 | ||||||||||||||||
| Total liabilities | $ | $ | |||||||||||||||
| Shareholders' equity | |||||||||||||||||
Preferred shares, $ | |||||||||||||||||
Common shares, $ | |||||||||||||||||
| Additional paid-in capital | |||||||||||||||||
| Retained earnings | |||||||||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | |||||||||||||||
| Total equity | $ | $ | |||||||||||||||
| Commitments and contingencies | 23 | ||||||||||||||||
| Total liabilities and equity | $ | $ | |||||||||||||||
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, | |||||||||||||||||
| Notes | 2025 | 2026 | |||||||||||||||
| Net revenues | 19 | $ | $ | ||||||||||||||
| Cost of revenue | |||||||||||||||||
| Gross profit | $ | $ | |||||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||
| Amortization of acquired intangible assets | 9 | ||||||||||||||||
| Other operating (income) expense, net | 20 | ( | ( | ||||||||||||||
| Income from operations | $ | $ | |||||||||||||||
| Foreign exchange gains, net | |||||||||||||||||
| Interest income (expense), net | 21 | ( | ( | ||||||||||||||
| Other income (expense), net | ( | ||||||||||||||||
| Income before income tax expense | $ | $ | |||||||||||||||
| Income tax expense | 22 | ||||||||||||||||
| Net income | $ | $ | |||||||||||||||
| Earnings per common share | 17 | ||||||||||||||||
| Basic | $ | $ | |||||||||||||||
| Diluted | $ | $ | |||||||||||||||
| Weighted average number of common shares used in computing earnings per common share | 17 | ||||||||||||||||
| Basic | |||||||||||||||||
| Diluted | |||||||||||||||||
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, | |||||||||||
| 2025 | 2026 | ||||||||||
| Net income | $ | $ | |||||||||
| Other comprehensive income: | |||||||||||
| Currency translation adjustments | ( | ||||||||||
| Gain (loss) on cash flow hedging derivatives, net of taxes (Note 6) | ( | ||||||||||
| Retirement benefits (expense), net of taxes | ( | ||||||||||
| Other comprehensive income (loss) | ( | ||||||||||
| Comprehensive income | $ | $ | |||||||||
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, 2025
(Unaudited)
(In thousands, except share count)
| Common shares | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||
| No. of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Equity | |||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Issuance of common shares on exercise of options (Note 15) | — | — | |||||||||||||||||||||||||||||||||
| Issuance of common shares under the employee stock purchase plan (Note 15) | — | — | |||||||||||||||||||||||||||||||||
| Net settlement on vesting of restricted share units (Note 15) | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Net settlement on vesting of performance units (Note 15) | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Stock repurchased and retired (Note 16) | ( | ( | — | ( | — | ( | |||||||||||||||||||||||||||||
| Expenses related to stock repurchased (Note 16) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation expense (Note 15) | — | — | — | ||||||||||||||||||||||||||||||||
| Comprehensive income (loss): | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | ||||||||||||||||||||||||||||||||
Dividend ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
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, 2026
(Unaudited)
(In thousands, except share count)
| Common shares | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||
| No. of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Equity | ||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Issuance of common shares on exercise of options (Note 15) | — | — | — | |||||||||||||||||||||||||||||||||||
| Issuance of common shares under the employee stock purchase plan (Note 15) | — | — | ||||||||||||||||||||||||||||||||||||
| Net settlement on vesting of restricted share units (Note 15) | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Net settlement on vesting of performance units (Note 15) | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock repurchased and retired (Note 16) | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Expenses and taxes related to stock repurchased (Note 16) | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Stock-based compensation expense (Note 15) | — | — | — | |||||||||||||||||||||||||||||||||||
| Comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
Dividend ( $ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
See accompanying notes to the Consolidated Financial Statements.
7
GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
See accompanying notes to the Consolidated Financial Statements.
Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Amortization of acquired intangible assets | |||||||||||
| Allowance for credit losses (refer to Note 4) | |||||||||||
| Unrealized loss/(gain) on revaluation of foreign currency assets/liabilities | ( | ||||||||||
| Stock-based compensation expense | |||||||||||
| Deferred tax expense | |||||||||||
| Others, net | ( | ( | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Decrease (increase) in accounts receivable | ( | ||||||||||
| Increase in prepaid expenses, other current assets, contract cost assets, operating lease right-of-use assets and other assets | ( | ( | |||||||||
| Increase (decrease) in accounts payable | ( | ||||||||||
| Decrease in accrued expenses, other current liabilities, operating leases liabilities and other liabilities | ( | ( | |||||||||
| Increase in income taxes payable | |||||||||||
| Net cash provided by (used for) operating activities | $ | $ | ( | ||||||||
| Investing activities | |||||||||||
| Purchase of property, plant and equipment | ( | ( | |||||||||
| Payment for internally generated intangible assets (including intangible assets under development) | ( | ( | |||||||||
| Proceeds from maturity of short term investments | |||||||||||
| Net cash provided by (used for) investing activities | $ | $ | ( | ||||||||
| Financing activities | |||||||||||
| Repayment of finance lease obligations | ( | ( | |||||||||
| Payment of debt issuance and refinancing costs | ( | ||||||||||
| Repayment of long-term debt | ( | ( | |||||||||
| Proceeds from issuance of common shares under stock-based compensation plans | |||||||||||
| Payment for net settlement of stock-based awards | ( | ( | |||||||||
| Dividend paid | ( | ( | |||||||||
| Payment of earn-out consideration | ( | ||||||||||
| Payment for stock repurchased and retired (including expenses related to stock repurchased) | ( | ( | |||||||||
| Net cash used for financing activities | $ | ( | $ | ( | |||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Effect of exchange rate changes | ( | ( | |||||||||
| Cash and cash equivalents at the beginning of the period | |||||||||||
| Cash and cash equivalents at the end of the period | $ | $ | |||||||||
| Supplementary information | |||||||||||
| Cash paid during the period for interest | $ | $ | |||||||||
| Cash paid during the period for income taxes, net of refund | $ | $ | |||||||||
8
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
1. Organization
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") for interim financial information 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 U.S. GAAP 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, 2025. 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
(c) Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and amortization and accumulated impairment loss. Expenditures for replacements and improvements are capitalized, whereas the costs of maintenance and repairs are charged to earnings as incurred.
The Company depreciates and amortizes all property, plant and equipment using the straight-line method over the following estimated economic useful lives of the assets:
| Years | |||||||||||
| Buildings | |||||||||||
| Furniture and fixtures | |||||||||||
| Computer equipment and servers | |||||||||||
| Plant, machinery and equipment | |||||||||||
| Computer software | - | ||||||||||
| Leasehold improvements | Lease period or | ||||||||||
| Vehicles | - | ||||||||||
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)
The Company capitalizes certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use when both the preliminary project stage is completed and it is probable that the software development will be completed and the software will be used as intended. Capitalized software costs include only (i) external direct costs of materials and services utilized in developing or obtaining computer software, (ii) compensation and related benefits for employees who are directly associated with the software project, and (iii) interest costs incurred while developing internal-use computer software.
Capitalized computer software costs are included in property, plant and equipment on the Company’s consolidated balance sheets and amortized on a straight-line basis when placed into service over the estimated useful lives of the software. Costs incurred in connection with developing or obtaining software or technology for internal use which are under development or advances paid toward the acquisition of property, plant and equipment outstanding as of each balance sheet date and the cost of property, plant and equipment not put to use before such date are disclosed under “Capital work in progress.”
(d) 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.
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, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company may perform quantitative testing where the fair value of the reporting unit is compared with its carrying amount, including goodwill, or choose to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Goodwill is tested for impairment by the Company as of December 31 every year.
Intangible assets acquired individually or with a group of other assets or in a business combination and developed internally are carried at cost less accumulated amortization and accumulated impairment loss based on their estimated useful lives as follows:
| Customer-related intangible assets | - | ||||||||||
| Marketing-related intangible assets | - | ||||||||||
| Technology-related intangible assets | - | ||||||||||
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)
The Company also capitalizes certain software and technology-related development costs incurred in connection with developing or obtaining software or technology for sale or lease to customers when the initial design phase is completed and commercial and technological feasibility has been established. Any development cost incurred before technological feasibility is established is expensed as incurred as research and development costs. Technological feasibility is established upon completion of a detailed design program or, in its absence, completion of a working model. Capitalized software and technology costs include only (i) external direct costs of materials and services utilized in developing or obtaining software and technology, (ii) compensation and related benefits for employees who are directly associated with the software and technology project, and (iii) interest costs incurred while developing or obtaining software or technology for sale or lease to customers.
Costs incurred in connection with developing or obtaining software or technology for sale to customers which are under development and not put to use or advances paid towards the acquisition of intangible assets outstanding as of each balance sheet date are classified as “intangible assets under development” and are included in capital work in progress. Capitalized software and technology costs are included in intangible assets under technology-related intangible assets on the Company’s consolidated balance sheets 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.
(e) Implementation Costs Incurred in a Cloud Computing Arrangement
The Company incurs costs to implement cloud computing arrangements for internal use that are service contracts and capitalizes certain costs associated with the implementation of the cloud computing arrangements, including employee payroll and related benefits and third party consulting costs, incurred during the application development stage of a project. These costs will be amortized on a straight-line basis over the term of the hosting service contracts after go-live, including renewal periods which the Company is reasonably certain to exercise, and recognized as a component of selling, general and administrative expenses. These costs are included as a component of "prepaid expenses and other current assets" and "other assets, net of allowances for credit losses" in the consolidated balance sheets.
(f) Financial instruments and concentration of credit risk
(g) Accounts receivable
Accounts receivable are recorded at the invoiced or to be invoiced amount and do not bear interest. The amount to be invoiced represents the unbilled receivables for services rendered between the last billing date and the balance sheet date. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for current expected credit losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses which are adjusted to current market conditions and a reasonable and supportable forecast. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers.
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)
(h) 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, resource, transaction or fixed-price basis. The Company recognizes revenue upon the transfer of control of promised services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. Revenues from services rendered under time-and-materials and transaction-based contracts are recognized as the services are provided. The Company’s fixed-price contracts include contracts for customization of applications, maintenance and support services. Revenues from these contracts are recognized ratably over the term of the agreement. The Company accrues for revenue and unbilled receivables for services rendered between the last billing date and the balance sheet date.
The Company’s contracts with its customers also include incentive payments received for discrete benefits delivered or promised to be delivered to the customer or service level agreements that could result in credits or refunds to the customer. Revenues relating to such arrangements are accounted for as variable consideration when the amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any incremental revenue will not occur.
The Company records deferred revenue attributable to certain process transition activities where such activities do not represent separate performance obligations. Revenues relating to such transition activities are classified under contract liabilities and subsequently recognized ratably over the period in which the related services are performed. Costs relating to such transition activities are fulfillment costs which are directly related to the contract and result in the enhancement of resources. Such costs are expected to be recoverable under the contract and are therefore classified as contract cost assets and recognized ratably over the estimated expected period of benefit under cost of revenue.
Revenues are reported net of value-added tax, business tax and applicable discounts and allowances. Reimbursements of out-of-pocket expenses received from customers have been included as part of revenues.
Revenue for performance obligations that are satisfied over time is recognized in accordance with the methods prescribed for measuring progress. The input (cost expended) method has been used to measure progress towards completion as there is a direct relationship between input and the satisfaction of a performance obligation. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates.
The Company enters into multiple-element revenue arrangements in which a customer may purchase a combination of products or services. The Company determines whether each product or service promised to a customer is capable of being distinct, and is distinct in the context of the contract. If not, the promised products or services are combined and accounted for as a single performance obligation. In the event of a multiple-element revenue arrangement, the Company allocates the arrangement consideration to separately identifiable performance obligations based on their relative stand-alone selling prices.
Certain contracts may include offerings such as sale of licenses, which may be subscription-based. Revenue from distinct, non-cancellable, subscription-based licenses is recognized at the point in time when the license is transferred to the customer. Revenue from any associated maintenance or ongoing support services is recognized ratably over the term of the contract. For a combined software license/services performance obligation, revenue is recognized over the period that the services are performed.
All incremental and direct costs incurred for acquiring contracts, such as certain sales commissions, are classified as contract cost assets. Such costs are amortized over the expected period of benefit and recorded under selling, general and administrative expenses.
Other upfront fees paid to customers are classified as contract assets. Such fees are amortized over the expected period of benefit and recorded as an adjustment to the transaction price and deducted from revenue.
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)
(i) 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: (i) the contract involves the use of a distinct identified asset, (ii) the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the term of the contract, and (iii) 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: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset or (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of the above criteria.
For all leases at the lease commencement date, a ROU asset and a lease liability are recognized. The lease liability represents the present value of the lease payments under the lease. Lease liabilities are initially measured at the present value of the lease payments not yet paid, discounted using the discount rate for the lease at the lease commencement. The lease liabilities are subsequently measured on an amortized cost basis. The lease liability is adjusted to reflect interest on the liability and the lease payments made during the period. Interest on the lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability.
The ROU asset represents the right to use the leased asset for the lease term. The ROU asset for each lease initially includes the amount of the initial measurement of the lease liability adjusted for any lease payments made to the lessor at or before the commencement date, accrued lease liabilities and any lease incentives received or any initial direct costs incurred by the Company.
The ROU asset of finance leases is subsequently measured at cost, less accumulated amortization and accumulated impairment losses, if any. The ROU asset of operating leases is subsequently measured from the carrying amount of the lease liability at the end of each reporting period, and is equal to the carrying amount of lease liabilities adjusted for (i) unamortized initial direct costs, (ii) prepaid/(accrued) lease payments and (iii) 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 the lease.
The Company has applied an incremental borrowing rate for the purpose of computing lease liabilities based on the remaining lease term and the rates prevailing in the jurisdictions where leases were executed.
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)
(j) 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 customer or a set of processes. It also includes operational expenses, which consist of facilities maintenance expenses, travel and living expenses, lease expenses, IT expenses, and consulting and certain other expenses. Consulting charges represent the cost of consultants and contract resources with specialized skills who are directly responsible for the performance of services for clients and travel and other billable costs related to the Company’s clients. It also includes depreciation of property, plant and equipment, and amortization of intangible and ROU assets which are directly related to providing services that generate revenue.
(k) Selling, general and administrative expenses
An allowance for credit losses is recognized for all debt instruments other than those held at fair value through profit or loss. The Company pools its accounts receivable (other than deferred billings) based on similar risk characteristics in estimating expected credit losses. Credit losses for accounts receivable due within one year are based on the roll-rate method, and the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date. The Company has established a provision matrix based on historical credit loss experience, adjusted for forward-looking factors and the economic environment. Credit losses for deferred billings are based on the historical credit loss experience, adjusted for forward-looking factors. At every reporting date, observed historical default rates are updated to reflect changes in the Company’s forward-looking estimates.
A financial asset is written off when it is deemed uncollectible and there is no reasonable expectation of recovering the contractual cash flows. Expected recoveries of amounts previously written off, not to exceed the aggregate amounts previously written off, are included in determining the allowance at each reporting period.
(m) 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.
(n) Reclassification and presentation adjustments
In the third quarter of 2025, the Company updated the financial presentation of its capitalized cloud computing arrangement (CCA) implementation costs and reclassified certain previously capitalized CCA implementation costs on its consolidated balance sheet, which decreased "property, plant and equipment, net" by $36,424 , increased "other assets, net of allowances for credit losses" by $35,817 and increased "prepaid expenses and other current assets" by $607 .
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)
For the three months ended March 31, 2026, cash flows related to the CCA implementation costs were correctly classified within "net cash provided by (used for) operating activities." However, for the three months ended March 31, 2025, these cash flows were incorrectly classified within "net cash used for investing activities" in the Company’s consolidated statements of cash flows and have not been reclassified to "net cash provided by (used for) operating activities" as the amounts are considered immaterial.
The Company evaluated the impact of the reclassification and presentation adjustments and concluded they are not material to the consolidated financial statements for any of the periods presented.
(o) 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 standards have been adopted by the Company:
In July 2025, the FASB issued ASU No. 2025-05, "Financial Instruments—Credit Losses (Topic 326)." This Accounting Standard Update ("ASU") provides public entities with an additional practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions under ASC 606. This includes assets acquired in business combinations or through consolidation of VIEs that is not a business if those assets arose from transactions that the acquiree or variable interest entity accounted for under ASC 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this ASU beginning January 1, 2026. The adoption of this ASU did not have a material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.
The following recently released accounting standards have not yet been adopted by the Company:
In November 2024, the FASB issued ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosure (Topic 220-40)." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB further issued ASU No 2025-01, which clarifies the effective date for adoption of ASU No 2024-03. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on the presentation of its consolidated statements of income and disclosures.
In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)." This ASU provides guidance to clarify and modernize the accounting for costs related to internal-use software. It removes all references to project stages in ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. The ASU also specifies that the property, plant and equipment disclosure requirements under ASC 360-10 apply to capitalized software costs accounted for under ASC 350-40, regardless of how those costs are presented in the financial statements. The guidance, which applies to all entities, is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Entities may apply the guidance using a prospective, retrospective or modified transition approach. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
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)
In November 2025, the FASB issued ASU No. 2025-09, “Derivatives and Hedging (Topic 815)." This ASU clarifies certain aspects of the guidance on hedge accounting and addresses several incremental hedge accounting issues arising from the global reference rate reform initiative. The amendments in this ASU apply to any entity that elects to apply hedge accounting in accordance with Topic 815. The guidance, which applies to all entities, is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU should be applied prospectively for all hedging relationships. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-10, “Government Grants (Topic 832)." This ASU adds guidance to ASC 832 on the recognition, measurement, and presentation of government grants. In the absence of such guidance, many for-profit entities historically have analogized to other U.S. GAAP, including IAS 20 or ASC 958-605, when accounting for government grants. The amendments in this ASU apply to business entities (specifically, all entities except for not-for-profit entities and employee benefit plans) that receive a government grant. The guidance under this ASU is effective for fiscal years beginning after December 15, 2028, and interim periods within those fiscal years. Early adoption is permitted. Entities may apply the guidance using a modified prospective, modified retrospective or retrospective transition approach. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, “Interim Reporting (Topic 270): Narrow-scope improvements." This ASU specifies the form and content choices for interim financial statements and accompanying notes, incorporates a comprehensive list of required interim disclosures and introduces a disclosure principle to disclose events since the end of the previous annual reporting period that have material impact on the entity. The amendments in this ASU apply to all entities that provide interim financial statements and notes in accordance with U.S. GAAP. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-12, “Codification Improvements." This ASU enhances the usability of the ASC by refining accounting guidance and streamlining its application through technical corrections, making standards more consistent and easier to interpret for preparers and users. The amendments in this ASU apply to all reporting entities. The guidance under this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
3. Business acquisitions
XponentL Data, Inc.
On June 5, 2025, the Company, by way of a merger, acquired 100 % of the outstanding equity interest in XponentL Data, Inc., a Delaware corporation, and certain affiliated entities in Albania, India and Kosovo (collectively referred to as “XponentL”) for total purchase consideration of $160,157 (including $2,273 of cash acquired), which includes the following:
i.Cash consideration paid by the Company to the sellers of XponentL on the closing date of $82,657 ; and
ii.Final earn-out consideration of $77,500 paid by the Company in the three months ended March 31, 2026 to the sellers of XponentL based on the actual performance of the acquired business through the year ended December 31, 2025 relative to the thresholds specified in the earn-out calculation. See Note 5, “Fair value measurements,” for additional details.
No portion of the purchase consideration is outstanding as of March 31, 2026. The Company is evaluating adjustments related to certain income and other taxes, which, when determined, may result in the recognition of additional assets or liabilities as of the acquisition date. The measurement period will not exceed one year from the acquisition date.
16
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
3. Business acquisitions (Continued)
This acquisition adds differentiated domain-led data strategy, design, and engineering capabilities, deep industry experience, and strategic partnerships. It also builds on the Company's pivot to data, AI, and other advanced technologies, enhancing the Company's ability to help its clients across the lifecycle of AI transformation, from strategy through implementation.
In connection with this acquisition, the Company recorded $51,400 in customer-related intangibles and $6,000 in marketing-related intangibles, which have a weighted average amortization period of five years . Goodwill arising from the acquisition amounting to $112,271 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $6,151 , to the Consumer and Healthcare segment in the amount of $88,793 and to the High Tech and Manufacturing segment in the amount of $17,327 . The goodwill arising from this acquisition is not deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with those of the Company.
Acquisition-related costs of $1,310 have been included in selling, general and administrative expenses as incurred. In connection with the acquisition, the Company also acquired certain assets with a value of $6,954 , assumed certain liabilities amounting to $2,408 and recognized a net deferred tax liability of $14,060 . The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition.
4. 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, 2025 | Three months ended March 31, 2026 | ||||||||||
| Opening balance as of January 1 | $ | $ | |||||||||
| Additions (net), charged to income statement | |||||||||||
| Deductions/effect of exchange rate fluctuations | ( | ( | |||||||||
| Closing balance | $ | $ | |||||||||
Accounts receivable were $1,262,647 and $1,282,630 , and allowances for credit losses were $22,097 and $22,708 , resulting in net accounts receivable balances of $1,240,550 and $1,259,922 as of December 31, 2025 and March 31, 2026, respectively.
In addition, deferred billings were $232,647 and $253,483 and allowances for credit losses on deferred billings were $10,659 and $12,435 , resulting in net deferred billings balances of $221,988 and $241,048 as of December 31, 2025 and March 31, 2026, respectively.
During the three months ended March 31, 2025 and 2026, the Company recorded charges of $1,448 and $1,776 , respectively, to the income statement on account of credit losses on deferred billings. Deferred billings, net of related allowances for credit losses, are included under “Other assets” in the Company’s consolidated balance sheets as of December 31, 2025 and March 31, 2026.
The Company has a revolving accounts receivable-based facility of $100,000 59,952 and $79,461 , respectively. The principal amount outstanding against this facility as of December 31, 2025 and March 31, 2026 was $55,140 and $79,436 , respectively. The cost of factoring such accounts receivable during the three months ended March 31, 2025 and 2026 was $678 and $681 , respectively. Gains or losses on the sales are recorded at the time of transfer of the accounts receivable and are included under "interest income (expense), net" in the Company’s consolidated statements of income.
17
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
4. 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 $327,207 during the year ended December 31, 2025 and $85,052 during the three months ended March 31, 2026, which also represent 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, 2025 and 2026 was $1,176 and $1,301 , respectively. These costs are included under "interest income (expense), net" in the Company’s consolidated statements of income.
5. 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, 2025 and March 31, 2026:
| As of December 31, 2025 | |||||||||||||||||||||||
| Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||||||||
| Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Derivative instruments (Note a, c) | $ | $ | $ | $ | |||||||||||||||||||
| Deferred compensation plan assets (Note a, e) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Earn-out consideration (Note b, d) | |||||||||||||||||||||||
| Derivative instruments (Note b, c) | |||||||||||||||||||||||
| Deferred compensation plan liability (Note b, f) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
18
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
5. Fair value measurements (Continued)
| As of March 31, 2026 | |||||||||||||||||||||||
| 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) | $ | $ | $ | $ | |||||||||||||||||||
| Deferred compensation plan assets (Note a, e) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Earn-out consideration (Note b, d) | |||||||||||||||||||||||
| Derivative instruments (Note b, c) | |||||||||||||||||||||||
| Deferred compensation plan liability (Note b, f) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
(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)The fair value of earn-out consideration, calculated as the present value of expected future payments to be made to the sellers of acquired businesses, was derived by estimating the future financial performance of the acquired businesses using the earn-out formulas and performance targets specified in the purchase agreements and adjusting the result to reflect the Company’s estimate of the likelihood of achievement of such targets. Given the significance of the unobservable inputs, the valuations are classified in level 3 of the fair value hierarchy.
(e)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.
(f)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.
19
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
5. Fair value measurements (Continued)
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, 2025 and 2026:
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Opening balance | $ | $ | |||||||||
| Payments made on earn-out consideration | $ | $ | ( | ||||||||
| Closing balance | $ | $ | |||||||||
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, 2025 and 2026:
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Opening balance | $ | $ | |||||||||
| Additions (net of redemption) | |||||||||||
| Change in fair value of deferred compensation plan assets (Note a) | ( | ( | |||||||||
| Closing balance | $ | $ | |||||||||
The following table provides a roll-forward of the fair value of deferred compensation plan liabilities categorized as level 3 in the fair value hierarchy for the three months ended March 31, 2025 and 2026:
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Opening balance | $ | $ | |||||||||
| Additions (net of redemption) | |||||||||||
| Change in fair value of deferred compensation plan liabilities (Note a) | ( | ( | |||||||||
| Closing balance | $ | $ | |||||||||
(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.
20
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. 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 45
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, 2025 | As of March 31, 2026 | As of December 31, 2025 | As of March 31, 2026 | ||||||||||||||||||||
| Foreign exchange forward contracts denominated in: | |||||||||||||||||||||||
| United States Dollars (sell) Indian Rupees (buy) | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| United States Dollars (sell) Mexican Peso (buy) | |||||||||||||||||||||||
| United States Dollars (sell) Philippines Peso (buy) | ( | ( | |||||||||||||||||||||
| Euro (sell) United States Dollars (buy) | ( | ||||||||||||||||||||||
| Euro (sell) Romanian Leu (buy) | |||||||||||||||||||||||
| Japanese Yen (sell) Chinese Renminbi (buy) | |||||||||||||||||||||||
| United States Dollars (sell) Chinese Renminbi (buy) | |||||||||||||||||||||||
| Pound Sterling (sell) United States Dollars (buy) | ( | ||||||||||||||||||||||
| United States Dollars (sell) Hungarian Forint (buy) | |||||||||||||||||||||||
| Australian Dollars (sell) Indian Rupees (buy) | ( | ( | |||||||||||||||||||||
| United States Dollars (sell) Polish Zloty (buy) | |||||||||||||||||||||||
| Japanese Yen (sell) United States Dollars (buy) | |||||||||||||||||||||||
| Israeli Shekel (buy) United States Dollars (sell) | |||||||||||||||||||||||
| South African Rand (sell) United States Dollars (buy) | ( | ( | |||||||||||||||||||||
| United States Dollars (sell) Brazilian Real (buy) | ( | ||||||||||||||||||||||
| United States Dollars (sell) Costa Rica Colon (buy) | |||||||||||||||||||||||
| United States Dollars (sell) Canadian Dollar (buy) | |||||||||||||||||||||||
| United States Dollars (sell) Malaysian Ringgit (buy) | |||||||||||||||||||||||
| Interest rate swaps (floating to fixed) | ( | ( | |||||||||||||||||||||
| $ | $ | $ | ( | $ | ( | ||||||||||||||||||
(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.
21
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. 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 hedges | Non-designated | |||||||||||||||||||||||||
| As of December 31, 2025 | As of March 31, 2026 | As of December 31, 2025 | As of March 31, 2026 | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Prepaid expenses and other current assets | $ | $ | $ | $ | ||||||||||||||||||||||
| Other assets | $ | $ | $ | $ | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Accrued expenses and other current liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
| Other liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
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.
In March 2021, the Company executed a treasury rate lock agreement for $350,000 in connection with future interest payments to be made on its senior notes issued in March 2021 by Genpact Luxembourg S.à r.l. (“Genpact Luxembourg”) and Genpact USA, Inc. (“Genpact USA”), both wholly-owned subsidiaries of the Company, and the treasury rate lock was designated as a cash flow hedge. The treasury rate lock agreement was terminated on March 23, 2021 and a deferred gain was recorded in accumulated other comprehensive income (loss). This gain is being amortized to interest expense over the life of the 2021 Senior Notes (as defined in Note 11 below). The remaining gain to be amortized related to the treasury rate lock agreement as of December 31, 2025 and March 31, 2026 was $44 and $4 , respectively.
In May 2024, the Company executed treasury rate lock agreements for $400,000 in connection with future interest payments to be made on its senior notes issued in June 2024 by Genpact Luxembourg and Genpact USA, and the treasury rate locks were designated as cash flow hedges. These treasury rate lock agreements were terminated on May 30, 2024 and a deferred loss was recorded in accumulated other comprehensive income (loss). This loss is being amortized to interest expense over the life of the 2024 Senior Notes (as defined in Note 11 below). The remaining loss to be amortized related to the treasury rate lock agreements as of December 31, 2025 and March 31, 2026 was $272 and $252 , respectively.
22
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. Derivative financial instruments (Continued)
In November 2025, the Company executed treasury rate lock agreements for $350,000 in connection with future interest payments to be made on its senior notes issued in November 2025 by Genpact UK Finco plc and Genpact USA, and the treasury rate locks were designated as cash flow hedges. These treasury rate lock agreements were terminated on November 13, 2025 and a deferred loss was recorded in accumulated other comprehensive income (loss). This loss is being amortized to interest expense over the life of the 2025 Senior Notes (as defined in Note 11 below). The remaining loss to be amortized related to the treasury rate lock agreements as of December 31, 2025 and March 31, 2026 was $226 and $214 , respectively.
In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss) (“OCI”), and the related tax effects are summarized below:
| Three months ended March 31, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2026 | |||||||||||||||||||||||||||||||||||||
| Before tax Amount | Tax (Expense) or Benefit | Net of tax Amount | Before tax Amount | Tax (Expense) or Benefit | Net of tax Amount | |||||||||||||||||||||||||||||||||
| Opening balance | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||
| Net gains (losses) reclassified into statement of income on completion of hedged transactions | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Changes in fair value of effective portion of outstanding derivatives, net | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Gain (loss) on cash flow hedging derivatives, net | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Closing balance | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||
The gains or losses recognized in OCI and their effects on financial performance are summarized below:
| Derivatives in Cash Flow Hedging Relationships | Amount 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, | |||||||||||||||||||||||||||||||
| 2025 | 2026 | 2025 | 2026 | |||||||||||||||||||||||||||||
| Forward foreign exchange contracts | $ | $ | ( | Revenue | $ | $ | ( | |||||||||||||||||||||||||
| Interest rate swaps | ( | Cost of revenue | ( | ( | ||||||||||||||||||||||||||||
| Treasury rate lock | Selling, general and administrative expenses | ( | ( | |||||||||||||||||||||||||||||
| Interest expense | ( | ( | ||||||||||||||||||||||||||||||
| $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||
23
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. Derivative financial instruments (Continued)
There were no gains (losses) recognized in the statement of income on the ineffective portion of derivatives designated as cash flow hedges and excluded from effectiveness testing for the three months ended March 31, 2025 and 2026, 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 instruments | Location of Gain (Loss) recognized in Statement of Income on Derivatives | 2025 | 2026 | |||||||||||||||||
| Forward foreign exchange contracts (Note a) | Foreign exchange gains (losses), net | $ | $ | ( | ||||||||||||||||
| $ | $ | ( | ||||||||||||||||||
(a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items such as receivables and intercompany borrowings and were not originally designated as hedges under FASB guidance on derivatives and hedging. Realized gains (losses) and changes in the fair value of these derivatives are recorded in foreign exchange gains, net in the consolidated statements of income.
7. Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following:
| As of December 31, 2025 | As of March 31, 2026 | ||||||||||
| Advance income and non-income-based taxes | $ | $ | |||||||||
| Contract asset (Note 19) | |||||||||||
| Prepaid expenses | |||||||||||
| Derivative instruments (Note 6) | |||||||||||
| Employee advances | |||||||||||
| Deposits | |||||||||||
| Advances to suppliers | |||||||||||
| Others | |||||||||||
| Total | $ | $ | |||||||||
24
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
8. Property, plant and equipment, net
The following table provides the gross and net amount of property, plant and equipment:
| As of December 31, 2025 | As of March 31, 2026 | ||||||||||
| Property, plant and equipment, gross* | $ | $ | |||||||||
| Less: Accumulated depreciation and amortization | ( | ( | |||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
*Including capital work in progress
9. Goodwill and intangible assets
The following table presents the changes in goodwill for the year ended December 31, 2025 and the three months ended March 31, 2026:
| For the year ended December 31, 2025 | For the three months ended March 31, 2026 | ||||||||||
| Opening balance | $ | $ | |||||||||
| Goodwill relating to acquisitions consummated during the period | |||||||||||
| Impact of measurement period adjustments | |||||||||||
| Effect of exchange rate fluctuations | ( | ( | |||||||||
| Closing balance | $ | $ | |||||||||
The following table presents the changes in goodwill by reporting unit for the year ended December 31, 2025:
| Financial Services | Consumer and Healthcare | High Tech and Manufacturing | Total | ||||||||||||||||||||
| Opening balance | $ | $ | $ | $ | |||||||||||||||||||
| Goodwill relating to acquisitions consummated during the period | |||||||||||||||||||||||
| Impact of measurement period adjustments | |||||||||||||||||||||||
| Effect of exchange rate fluctuations | ( | ( | ( | ||||||||||||||||||||
| Closing balance | $ | $ | $ | $ | |||||||||||||||||||
The following table presents the changes in goodwill by reporting unit for the three months ended March 31, 2026:
| Financial Services | Consumer and Healthcare | High Tech and Manufacturing | Total | ||||||||||||||||||||
| Opening balance | $ | $ | $ | $ | |||||||||||||||||||
| Goodwill relating to acquisitions consummated during the period | |||||||||||||||||||||||
| Impact of measurement period adjustments | |||||||||||||||||||||||
| Effect of exchange rate fluctuations | ( | ( | ( | ( | |||||||||||||||||||
| Closing balance | $ | $ | $ | $ | |||||||||||||||||||
25
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 total amount of the Company’s goodwill deductible for income tax purposes was $210,585 and $203,435 as of December 31, 2025 and March 31, 2026, respectively.
The Company’s intangible assets are as follows:
| As of December 31, 2025 | As of March 31, 2026 | ||||||||||||||||||||||||||||||||||
| Gross carrying amount | Accumulated amortization & Impairment | Net | Gross carrying amount | Accumulated amortization & Impairment | Net | ||||||||||||||||||||||||||||||
| Customer-related intangible assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Marketing-related intangible assets | |||||||||||||||||||||||||||||||||||
| Technology-related intangible assets | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
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, 2025 and 2026 were $4,320 and $3,112 , 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, 2025 and 2026 were $618 and $1,784 , respectively.
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, 2025 and March 31, 2026, the limits available were $26,563 and $30,996 , respectively, of which $7,988 and $7,760 , respectively, was utilized, constituting non-funded drawdown.
b.A fund-based and non-fund based revolving credit facility of $650,000 , which the Company obtained by entering into an amended and restated credit agreement (the "2022 Credit Agreement") with Genpact USA, Genpact Global Holdings (Bermuda) Limited ("GGH") and Genpact Luxembourg, each wholly owned subsidiaries of the Company (Genpact Luxembourg, Genpact USA and GGH, collectively, the "Borrowers"), as borrowers, Wells Fargo, National Association ("Wells Fargo"), as administrative agent, swingline lender and issuing bank, and the lenders and other parties thereto on December 13, 2022. The term loan and revolving credit facility under the 2022 Credit Agreement expire on December 13, 2027. Borrowings under the 2022 Credit Agreement bear interest at a rate equal to, at the election of the Company, either Adjusted Term SOFR (which is the rate per annum equal to (a) Term SOFR (the forward-looking secured overnight financing rate) plus (b) a Term SOFR Adjustment of 0.10 % per annum, but in no case lower than 0.0 %) plus an applicable margin equal to 1.375 % per annum or a base rate plus an applicable margin equal to 0.375 % per annum. The unutilized amount on the revolving credit facility under the 2022 Credit Agreement bore a commitment fee of 0.20 1,257 and $1,257 , respectively, was utilized, of which $0 and $0 , respectively, constituted funded drawdown and $1,257 and $1,257 , 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, 2025 and March 31, 2026, 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.
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)
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 3 x and an interest coverage ratio of more than 3 x. During the period ended March 31, 2026, the Company was in compliance with the terms of the 2022 Credit Agreement, including all of the financial covenants therein. The Company’s retained earnings are not subject to any restrictions on availability to make dividend payments to shareholders, subject to compliance with the financial covenants described above that are contained in the 2022 Credit Agreement.
As of December 31, 2025 and March 31, 2026, the amount outstanding under the Company's term loan, net of debt amortization expense of $584 and $507 , was $449,916 and $443,368 , respectively.
Indebtedness under the 2022 Credit Agreement is unsecured. The amount outstanding on the term loan as of March 31, 2026 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, 2026, net of debt amortization expense, is as follows:
| Year ended | Amount | ||||
| 2026 | |||||
| 2027 | |||||
| Total | $ | ||||
In March 2021, Genpact Luxembourg and Genpact USA co-issued $350,000 aggregate principal amount of 1.750 % senior notes (the “2021 Senior Notes”). The 2021 Senior Notes were fully guaranteed by the Company and Genpact UK Finco plc. The total debt issuance cost of $3,032 incurred in connection with the 2021 Senior Notes was amortized over the life of the 2021 Senior Notes as additional interest expense. As of December 31, 2025 and March 31, 2026, the amount outstanding under the 2021 Senior Notes, net of debt amortization expense of $165 and $16 , respectively, was $349,835 and $349,984 , respectively. The 2021 Senior Notes were repaid on April 10, 2026.
In June 2024, Genpact Luxembourg and Genpact USA co-issued $400,000 aggregate principal amount of 6.000 % senior notes (the “2024 Senior Notes”). The 2024 Senior Notes are fully guaranteed by the Company and Genpact UK Finco plc. The total debt issuance cost of $4,395 incurred in connection with the 2024 Senior Notes is being amortized over the life of the 2024 Senior Notes as additional interest expense. As of December 31, 2025 and March 31, 2026, the amount outstanding under the 2024 Senior Notes, net of debt amortization expense of $3,005 and $2,789 , respectively, was $396,994 and $397,211 , respectively, which is payable on June 4, 2029.
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)
In November 2025, Genpact UK Finco plc and Genpact USA co-issued $350,000 aggregate principal amount of 4.950 % senior notes (the “2025 Senior Notes,” and together with the 2024 Senior Notes, the "Senior Notes"). The 2025 Senior Notes are fully guaranteed by the Company and Genpact Luxembourg. The total debt issuance cost of $4,551 incurred in connection with the 2025 Senior Notes is being amortized over the life of the 2025 Senior Notes as additional interest expense. As of December 31, 2025 and March 31, 2026, the amount outstanding under the 2025 Senior Notes, net of debt amortization expense of $4,444 and $4,220 , respectively, was $345,556 and $345,780 , respectively, which is payable on November 18, 2030.
The Company paid interest on the 2021 Senior Notes semi-annually in arrears on April 10 and October 10 of each year through the maturity date of April 10, 2026. The Company pays interest on (i) the 2024 Senior Notes semi-annually in arrears on June 4 and December 4 of each year and (ii) the 2025 Senior Notes semi-annually in arrears on May 18 and November 18 of each year, ending on the maturity dates of June 4, 2029 and November 18, 2030, 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 2024 Senior Notes, May 4, 2029, and in the case of the 2025 Senior Notes, October 18, 2030, a specified “make-whole” premium. Additionally, the Company may redeem any series of Senior Notes in whole, but not in part, at any time at a redemption price equal to 100 % of the principal amount thereof, together with accrued and unpaid interest to the redemption date, in the event of certain changes in taxation in any jurisdiction (other than the U.S.) having authority to tax the issuers. Upon certain change of control transactions, the applicable issuer or issuers will be required to make an offer to repurchase the Senior Notes at a price equal to 101 % of the aggregate principal amount of the Senior Notes, plus accrued and unpaid interest. The interest rate payable on the 2021 Senior Notes was subject to adjustment if the credit rating of the 2021 Senior Notes was downgraded, up to a maximum increase of 2.0 %. The Senior Notes are subject to certain customary covenants, including limitations on the ability of the Company and certain of its subsidiaries to incur debt secured by liens, engage in certain sale and leaseback transactions and consolidate, merge, convey or transfer their assets substantially as an entirety. During the period ended March 31, 2026, the Company and its applicable subsidiaries were in compliance with the covenants under the Senior Notes.
A summary of the Company’s long-term debt is as follows:
| As of December 31, 2025 | As of March 31, 2026 | ||||||||||
| Credit facility, net of amortization expenses | $ | $ | |||||||||
| Total | $ | $ | |||||||||
| Current portion | |||||||||||
| Non-current portion | |||||||||||
| Total | $ | $ | |||||||||
28
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
12. Accrued expenses and other current liabilities
| As of December 31, 2025 | As of March 31, 2026 | ||||||||||
| Accrued expenses | $ | $ | |||||||||
| Accrued employee cost | |||||||||||
| Statutory liabilities | |||||||||||
| Retirement benefits | |||||||||||
| Compensated absences | |||||||||||
| Derivative instruments (Note 6) | |||||||||||
| Contract liabilities (Note 19) | |||||||||||
| Finance lease liabilities | |||||||||||
| Earn-out consideration | |||||||||||
| Deferred compensation plan liability (Note 5) | |||||||||||
| Other liabilities | |||||||||||
| $ | $ | ||||||||||
13. Other liabilities
| As of December 31, 2025 | As of March 31, 2026 | ||||||||||
| Accrued expenses | $ | $ | |||||||||
| Accrued employee cost | |||||||||||
| Retirement benefits | |||||||||||
| Compensated absences | |||||||||||
| Derivative instruments (Note 6) | |||||||||||
| Contract liabilities (Note 19) | |||||||||||
| Finance lease liabilities | |||||||||||
| Deferred compensation plan liability (Note 5) | |||||||||||
| Others | |||||||||||
| $ | $ | ||||||||||
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 plans.
On November 21, 2025, the Government of India implemented four new labor codes—the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020—which consolidate 29 existing labor laws into a unified legislative framework. The implementation of these codes has significant accounting impacts for the Company's employee benefit obligations.
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)
In accordance with ASC 715, the Company accounted for plan amendments in 2025 and recognized $19,055 as prior service costs in OCI as of the amendment date. The Company continued to review the requirements of the new labor codes and determined the final impact to be $15,362 and adjusted the amount previously recognized as prior service costs in OCI. The costs recognized in OCI as prior service costs will subsequently be reclassified to the Company's consolidated statements of income over the future service periods of employees active as of the amendment date who are expected to receive benefits under the plan.
The Company has assessed and disclosed the incremental impact of these legislative changes based on legal opinions received and the best available information. The Company continues to monitor the finalization of implementing rules and clarifications from the Government of India and will recognize any additional accounting effects as required.
Net defined benefit plan costs for the three months ended March 31, 2025 and 2026 include the following components:
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Service costs | $ | $ | |||||||||
| Interest costs | |||||||||||
| Amortization of actuarial loss | |||||||||||
| Amortization of prior service cost | |||||||||||
| Expected return on plan assets | ( | ( | |||||||||
| Net defined benefit plan costs | $ | $ | |||||||||
Defined contribution plans
During the three months ended March 31, 2025 and 2026, the Company contributed the following amounts to defined contribution plans in various jurisdictions:
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| India | $ | $ | |||||||||
| U.S. | |||||||||||
| U.K. | |||||||||||
| China | |||||||||||
| Other Regions | |||||||||||
| Total | $ | $ | |||||||||
30
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)
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.
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 10 th 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 Plan was $74,820 and $76,178 as of December 31, 2025 and March 31, 2026, 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 $75,586 and $76,775 as of December 31, 2025 and March 31, 2026, 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, 2025 and 2026, the change in the fair value of deferred compensation plan assets was $(1,141 ) and $(1,437 ), respectively, which is included in “other income (expense), net,” in the consolidated statements of income. During the three months ended March 31, 2025 and 2026, the change in the fair value of deferred compensation plan liabilities was $(1,132 ) and $(1,428 ), respectively, which is included in “selling, general and administrative expenses.”
15. Stoc k-based compensation
The Company has granted stock-based awards, including options, restricted share unit awards and performance share unit awards, under the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007 Omnibus Plan”) and the Genpact Limited 2017 Omnibus Incentive Compensation Plan (the “2017 Omnibus Plan”) to eligible persons, including employees, directors and certain other persons associated with the Company.
Under the 2007 Omnibus Plan, shares underlying options forfeited, expired, terminated or cancelled under any of the Company’s predecessor plans were added to the number of shares otherwise available for grant under the 2007 Omnibus Plan. The 2007 Omnibus Plan was amended and restated on April 11, 2012 to increase the number of common shares authorized for issuance by 5,593,200 shares to 15,000,000 shares. Further, during the year ended December 31, 2012, the number of common shares authorized for issuance under the 2007 Omnibus Plan was increased by 8,858,823 shares as a result of a one-time adjustment to outstanding unvested share awards in connection with a special dividend payment.
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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)
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, 2025 and 2026 were $19,910 and $21,928 , respectively, and have been allocated to “cost of revenue” and “selling, general and administrative expenses.”
Stock options
All options granted under the 2007 Omnibus Plan and 2017 Omnibus Plan are exercisable into common shares of the Company, have a contractual period of ten years and vest over three to five years unless specified otherwise in the applicable award agreement. The Company recognizes compensation cost over the vesting period of the option.
Compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholes option-pricing model.
A summary of stock option activity during the three months ended March 31, 2026 is set out below:
Three months ended March 31, 2026 | |||||||||||||||||||||||
| Shares arising out of options | Weighted average exercise price | Weighted average remaining contractual life (years) | Aggregate intrinsic value | ||||||||||||||||||||
| Outstanding as of January 1, 2026 | $ | — | |||||||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Forfeited | — | — | |||||||||||||||||||||
| Expired | — | — | |||||||||||||||||||||
| Exercised | ( | — | |||||||||||||||||||||
| Outstanding as of March 31, 2026 | |||||||||||||||||||||||
| Vested as of March 31, 2026 and expected to vest thereafter (Note a) | |||||||||||||||||||||||
| Vested and exercisable as of March 31, 2026 | |||||||||||||||||||||||
| 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, 2026, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $812 , which will be recognized over the weighted average remaining requisite vesting period of 0.7 years.
32
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 Omnibus Plan and 2017 Omnibus Plan. Each RSU represents the right to receive one common share. The fair value of each RSU is the market price of one common share of the Company on the date of grant. The RSUs granted to date have graded vesting schedules of three months to four years . The compensation expense is recognized on a straight-line basis over the vesting term. A summary of RSU activity during the three months ended March 31, 2026 is set out below:
Three months ended March 31, 2026 | |||||||||||
| Number of Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||
| Outstanding as of January 1, 2026 | $ | ||||||||||
| Granted | |||||||||||
| Vested (Note a) | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Outstanding as of March 31, 2026 | |||||||||||
| Expected to vest (Note b) | |||||||||||
(a)912,286 RSUs vested during the three months ended March 31, 2026, in respect of which 571,247 shares (net of minimum statutory tax withholding) were issued.
As of March 31, 2026, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $89,881 , which will be recognized over the weighted average remaining requisite vesting period of 2.3 years.
Performance units
The Company also grants stock awards in the form of performance units (“PUs”) and has granted PUs under both the 2007 Omnibus Plan and 2017 Omnibus Plan.
Each PU represents the right to receive one common share at a future date based on the Company’s performance against specified targets. PUs granted to date have vesting schedules of approximately six months to three years . PUs granted under the plans are subject to cliff vesting. The compensation expense for such awards is recognized on a straight-line basis over the vesting terms.
For PUs granted prior to 2023, the fair value of each PU was the market price of one common share of the Company on the date of grant and the performance period for such grants was one year. For PUs that have a performance period of one year , the Company’s estimate of the number of shares to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.
For the PUs granted since 2023, the performance period of the awards increased to three years from one year . The number of PUs that will ultimately vest under the PU awards will be determined, subject to certain conditions and limitations, based on the Company’s achievement of the performance targets set forth in the awards as well as its total shareholder return ("TSR") relative to the TSR of the companies included as of the beginning of the performance period in the S&P 400 Midcap Index (the “Peer Group”) over the three-year performance period.
33
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)
The grant date fair value for PUs is determined using a Monte Carlo simulation model. This model simulates a range of possible future share prices and estimates the probabilities of the potential payouts. This model also incorporates the following assumptions:
•The historical volatility for the companies in the Peer Group was measured using the most recent three-year period.
•The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period.
•For determining the TSR of the Company and the companies in the Peer Group, dividends are assumed to have been reinvested in the stock of the issuing entities on a continuous basis.
•The correlation coefficients used to model the way in which each entity tends to move in relation to each other are based upon the price data used to calculate historical volatility.
The fair value of each PU granted to employees in the three months ended March 31, 2025 and March 31, 2026 was estimated on the date of grant using the following valuation assumptions:
| Three months ended March 31, 2025 | Three months ended March 31, 2026 | |||||||||||||
| Dividend yield | % | % | ||||||||||||
| Expected life (years) | ||||||||||||||
| Risk-free rate of interest for expected life | % | % | ||||||||||||
| Volatility for expected life | % | % | ||||||||||||
A summary of PU activity during the three months ended March 31, 2026 is set out below:
| Three months ended March 31, 2026 | |||||||||||||||||
| Number of Performance Units | Weighted Average Grant Date Fair Value | Maximum Shares Eligible to Receive | |||||||||||||||
| Outstanding as of January 1, 2026 | $ | ||||||||||||||||
| Granted | |||||||||||||||||
| Vested (Note a) | ( | ( | |||||||||||||||
| Forfeited | ( | ( | |||||||||||||||
| Adjustment upon final determination of level of performance goal achievement | ( | ( | |||||||||||||||
| Outstanding as of March 31, 2026 | $ | ||||||||||||||||
| Expected to vest (Note b) | |||||||||||||||||
(a)417,364 PUs vested during the three months ended March 31, 2026, in respect of which 259,792 shares (net of minimum statutory tax withholding) were issued during the three months ended March 31, 2026. 477 PUs that vested in the three months ended March 31, 2026 will be issued subsequent to March 31, 2026 after withholding shares to the extent of minimum statutory withholding taxes.
(b)The number of PUs expected to vest is based on the probable achievement of the performance targets after considering an estimated forfeiture rate.
As of March 31, 2026, the total remaining unrecognized stock-based compensation cost related to PUs amounted to $82,626 , which will be recognized over the weighted average remaining requisite vesting period of 2.3 years.
34
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)
Employee Stock Purchase Plan (ESPP)
On May 1, 2008, the Company adopted the Genpact Limited U.S. Employee Stock Purchase Plan and the Genpact Limited International Employee Stock Purchase Plan (together, the “ESPP”). In April 2018, these plans were amended and restated, and their terms were extended to August 31, 2028.
The ESPP allows eligible employees to purchase the Company’s common shares through payroll deductions at 90 % of the closing price of the Company’s common shares on the last business day of each purchase interval. The dollar amount of common shares purchased under the ESPP cannot exceed 15 % of the participating employee’s base salary, subject to a cap of $25 per employee per calendar year. With effect from September 1, 2009, the offering periods commence on the first business day in March, June, September and December of each year and end on the last business day of the subsequent May, August, November and February. 4,200,000 common shares have been reserved for issuance in the aggregate over the term of the ESPP.
During the three months ended March 31, 2025 and 2026, 59,945 and 76,679 common shares, respectively, were issued under the ESPP.
The ESPP is considered compensatory under FASB guidance on Compensation-Stock Compensation.
The compensation expense for the ESPP is recognized in accordance with the FASB guidance on Compensation—Stock Compensation. The compensation expense for the ESPP during the three months ended March 31, 2025 and 2026 was $126 and $345 , respectively, and has been allocated to cost of revenue and selling, general and administrative expenses.
16. Capital stock
Share repurchases
The Board of Directors of the Company (the “Board”) has authorized repurchases of up to $2,750,000 under the Company’s existing share repurchase program. Under the program, shares may be purchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
During the three months ended March 31, 2025 and 2026, the Company repurchased 1,206,812 and 1,811,986 of its common shares, respectively, on the open market at a weighted average price of $52.17 and $38.61 per share, respectively, for an aggregate cash amount of $62,963 and $69,956 , respectively. All repurchased shares have been retired.
The Company records repurchases of its common shares on the settlement date of each transaction. Shares purchased and retired are deducted to the extent of their par value from common shares and from retained earnings for the excess over par value. Direct costs incurred to acquire the shares are included in the total cost of the shares purchased. For the three months ended March 31, 2025 and 2026, retained earnings were reduced by the direct costs, including taxes, related to share repurchases of $24 and $36 , respectively.
$294,120 remained available for share repurchases under the Company’s existing share repurchase program as of March 31, 2026. This repurchase program does not obligate the Company to acquire any specific number of shares and does not specify an expiration date.
35
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
16. Capital stock (Continued)
Dividend
On February 6, 2025, the Company announced that its Board had approved an 11 % increase in its quarterly cash dividend to $0.17 per share, up from $0.1525 per share in 2024, representing an annual dividend of $0.68 per common share, up from $0.61 per share in 2024, payable to holders of the Company’s common shares. On March 26, 2025, the Company paid a dividend of $0.17 per share, amounting to $29,784 in the aggregate, to shareholders of record as of March 11, 2025.
On February 5, 2026, the Company announced that its Board had approved a 10 % increase in its quarterly cash dividend to $0.1875 per share, up from $0.17 per share in 2025, representing a planned annual dividend of $0.75 per common share, up from $0.68 per share in 2025, payable to holders of the Company’s common shares. On March 31, 2026, the Company paid a dividend of $0.1875 per share, amounting to $31,773 in the aggregate, to shareholders of record as of March 16, 2026.
17. Earnings per share
The Company calculates earnings per share in accordance with FASB guidance on earnings per share. Basic and diluted earnings per common share give effect to the change in the number of Company common shares outstanding. The calculation of basic earnings per common share is determined by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the respective periods. The potentially dilutive shares, consisting of outstanding options on common shares, RSUs, common shares to be issued under the ESPP and PUs, have been included in the computation of diluted net earnings per share and the number of weighted average shares outstanding, except where the result would be anti-dilutive.
The number of shares subject to stock awards outstanding but not included in the computation of diluted earnings per common share because their effect was anti-dilutive was 615,890 and 3,190,967 for the three months ended March 31, 2025 and 2026, respectively.
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Net income | $ | $ | |||||||||
| Weighted average number of common shares used in computing basic earnings per common share | |||||||||||
| Dilutive effect of stock-based awards | |||||||||||
| Weighted average number of common shares used in computing dilutive earnings per common share | |||||||||||
| Earnings per common share | |||||||||||
| Basic | $ | $ | |||||||||
| Diluted | $ | $ | |||||||||
36
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
18. Segment reporting
The Company's operating segments are significant strategic business units that align its products and services with how it manages its business, approaches key markets and interacts with its clients.
The Company’s reportable segments are as follows: (i) Financial Services, (ii) Consumer and Healthcare, and (iii) High Tech and Manufacturing.
The Company’s Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"), is presented with operating segment revenue and operating segment adjusted income from operations ("AOI"). The CODM uses both revenue and AOI to review the monthly and quarterly performance of the Company's operating segments. The CODM uses AOI, which is gross margin and general and administrative expenditures, to assess capacity for investments in each segment, including sales capacity, delivery resources, offerings and solutions, or partnerships. The Company does not allocate, and therefore the CODM does not evaluate, stock-based compensation expenses, amortization of acquired intangible assets, unallocated corporate expenses, foreign exchange gain/(loss), interest income/(expense), restructuring (expense)/income, other income/(expense), or income taxes by segment. Unallocated corporate expenses primarily represent the impact of certain under or over-absorption of overhead, and allowances for credit losses, which are not allocated to the Company’s segments for management’s internal reporting purposes. The Company’s operating assets and liabilities pertain to multiple segments. The Company manages assets and liabilities on a total company basis, not by operating segment, and therefore asset and liability information and capital expenditures by operating segment are not presented to the CODM and are not reviewed by the CODM. The Company has identified cost of revenue as the significant segment expense which is provided to the CODM on a regular basis. The Company has also provided information related to other segment items.
Revenues, cost of revenue, other segment items and AOI for each of the Company’s segments for the three months ended March 31, 2025 were as follows:
| Net revenues | Cost of Revenue | Other segment items* | AOI | ||||||||||||||||||||
| Financial Services | $ | $ | $ | $ | |||||||||||||||||||
| Consumer and Healthcare | |||||||||||||||||||||||
| High Tech and Manufacturing | |||||||||||||||||||||||
| Net revenues | $ | ||||||||||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||||||||
| Stock-based compensation expense | ( | ||||||||||||||||||||||
| Amortization of acquired intangible assets | ( | ||||||||||||||||||||||
| Foreign exchange gains, net | |||||||||||||||||||||||
| Interest income (expense), net | ( | ||||||||||||||||||||||
| Income tax expense | ( | ||||||||||||||||||||||
| Net income | $ | ||||||||||||||||||||||
*Other segment items primarily include selling, general and administrative expenses (excluding stock-based compensation expenses), other operating (income) expense, net and other income (expense), net.
37
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
18. Segment reporting (Continued)
Revenues, cost of revenue, other segment items and AOI for each of the Company’s segments for the three months ended March 31, 2026 were as follows:
| Net revenues | Cost of Revenue | Other segment items* | AOI | ||||||||||||||||||||
| Financial Services | $ | $ | $ | $ | |||||||||||||||||||
| Consumer and Healthcare | |||||||||||||||||||||||
| High Tech and Manufacturing | |||||||||||||||||||||||
| Net revenues | $ | ||||||||||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||||||||
| Stock-based compensation | ( | ||||||||||||||||||||||
| Amortization of acquired intangible assets | ( | ||||||||||||||||||||||
| Foreign exchange gains, net | |||||||||||||||||||||||
| Interest income (expense), net | ( | ||||||||||||||||||||||
| Income tax expense | ( | ||||||||||||||||||||||
| Net income | $ | ||||||||||||||||||||||
*Other segment items primarily include selling, general and administrative expenses (excluding stock-based compensation expenses), other operating (income) expense, net and other income (expense), net.
19. Net revenues
Disaggregation of revenue
Effective January 1, 2026, the Company revised its revenue disaggregation to better align with its current business structure, strategic priorities and internal reporting. The Company's revenue is now disaggregated between Advanced Technology Solutions and Core Business Services, replacing the prior disaggregation between Data-Tech-AI and Digital Operations. Accordingly, no disaggregation of revenue between Data-Tech-AI and Digital Operations has been presented for the three months ended March 31, 2025 and March 31, 2026.
Advanced Technology Solutions includes revenues from solutions and services focused on data and AI, digital technology, advisory services and agentic solutions.
Core Business services includes revenues from decision support services, technology services and Digital Operations.
In the following table, the Company’s revenue is disaggregated by the nature of solutions and services provided between Advanced Technology Solutions and Core Business Services:
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
Advanced Technology Solutions | $ | $ | |||||||||
Core Business Services | |||||||||||
| Net revenues | $ | $ | |||||||||
38
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
19. Net revenues (Continued)
All three of the Company's segments include revenue from each of the service types included in the tables above. See Note 18 for additional information.
Contract balances
Contract assets represent the contract acquisition fees or other upfront fees paid to a customer. Such costs are amortized over the expected period of benefit and recorded as an adjustment to the transaction price and deducted from revenue. The Company’s assessment did not indicate any significant impairment losses on its contract assets for the periods presented.
Contract liabilities include that portion of revenue for which payments have been received in advance from customers. The Company also defers revenues attributable to certain process transition activities for which costs have been capitalized by the Company as contract fulfillment costs. Consideration received from customers, if any, relating to such transition activities is also included as part of contract liabilities. The contract liabilities are included within “Accrued expenses and other current liabilities” and “Other liabilities” in the consolidated balance sheets. The revenues are recognized as (or when) the performance obligation is fulfilled pursuant to the contract with the customer.
The following table shows the details of the Company’s contract balances:
| As of December 31, 2025 | As of March 31, 2026 | ||||||||||
| Contract assets (Note a) | $ | $ | |||||||||
| Contract liabilities (Note b) | |||||||||||
| Deferred transition revenue | $ | $ | |||||||||
| Advance from customers | $ | $ | |||||||||
(a)Included in "prepaid expenses and other current assets" and "other assets" in the consolidated balance sheets.
(b)Included in "accrued expenses and other current liabilities" and "other liabilities" in the consolidated balance sheets.
Changes in the Company’s contract asset and liability balances during the three months ended March 31, 2025 and 2026 were a result of normal business activity and not materially impacted by any other factors.
The amount of revenue recognized during the three months ended March 31, 2025 and 2026 that was included in the Company's contract liabilities balance at the beginning of each period was $52,493 and $84,086 , respectively.
The following table includes estimated revenue expected to be recognized in the future related to remaining performance obligations as of March 31, 2026:
| Particulars | Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | |||||||||||||||||||||||||||
| Transaction price allocated to remaining performance obligations | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
39
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
19. Net revenues (Continued)
The following table provides details of the Company’s contract cost assets:
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | ||||||||||||||||||||||
| Particulars | Sales incentive programs | Transition activities | Sales incentive programs | Transition activities | |||||||||||||||||||
| Opening balance | $ | $ | $ | $ | |||||||||||||||||||
| Closing balance | |||||||||||||||||||||||
| Amortization | |||||||||||||||||||||||
20. Other operating (income) expense, net
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Other operating (income) expense | $ | ( | $ | ( | |||||||
| Other operating (income) expense, net | $ | ( | $ | ( | |||||||
21. Interest income (expense), net
| Three months ended March 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Interest income | $ | $ | |||||||||
| Interest expense | ( | ( | |||||||||
| Interest income (expense), net | $ | ( | $ | ( | |||||||
22. Income taxes
The Company determines its tax provision for interim periods using an estimate of its annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment.
The Company’s effective tax rate (“ETR”) was 23.7 % for the three months ended March 31, 2026, down from 25.3 % for the three months ended March 31, 2025. The decrease in the Company’s ETR was primarily driven by optimization of intercompany financing, as well as the mix of the Company's pre-tax income and the impacts of other discrete items.
23. Commitments and contingencies
Capital commitments
As of December 31, 2025 and March 31, 2026, the Company has committed to spend $16,542 and $13,874 , respectively, under agreements to purchase property, plant and equipment. This amount is net of capital advances paid in respect of these purchases.
40
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
23. Commitments and contingencies (Continued)
Bank guarantees
The Company has outstanding bank guarantees and letters of credit amounting to $9,245 and $9,017 as of December 31, 2025 and March 31, 2026, respectively. Bank guarantees are generally provided to government agencies or for leases. These guarantees may be revoked if the beneficiary suffers any losses or damages through the breach of any of the covenants contained in the agreements governing such guarantees.
Other commitments
Certain units of the Company’s Indian subsidiaries are established as Software Technology Parks of India units or Special Economic Zone (“SEZ”) units under the relevant regulations issued by the Government of India. These units are exempt from customs and other duties on imported and indigenous capital goods, stores and spares. SEZ units are also exempt from the Indian Goods and Services Tax that was introduced in India in 2017. The Company has undertaken to pay taxes and duties, if any, in respect of capital goods, stores, spares and services consumed duty-free, in the event that certain terms and conditions are not fulfilled.
Contingency
The Company is involved in various claims and legal proceedings arising in the ordinary course of business. The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. Based on the Company’s assessment, including the availability of insurance recoveries, the Company’s management does not believe that any current claims or legal proceedings (other than the specific matters described below, if decided adversely), individually or in aggregate, will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future. The Company will continuously monitor these matters to assess potential impacts to the financial statements.
(a) In February 2019, there was a judicial pronouncement in India with respect to defined contribution benefit payments interpreting certain statutory defined contribution obligations of employees and employers. If applied retrospectively, the interpretation would result in an increase in contributions payable by the Company for past periods for certain of its India-based employees. Due to a lack of interpretive guidance and based on legal advice the Company has obtained on the matter, it is currently impracticable to reliably estimate the timing and amount of any payments the Company may be required to make. Accordingly, the Company will await further clarity to evaluate the amount of a potential provision, if any.
(b) The Indian taxing authorities ("ITA") have issued assessment orders to certain subsidiaries of the Company seeking to assess income tax on certain transactions that occurred in 2015. The Company has received demands for potential tax claims related to these orders in an aggregate amount of $93,471 , including interest through the date of the orders. This amount excludes penalties or interest accrued since the date of the orders. The Company is pursuing appeals before the relevant appellate authorities in respect of these orders. Further, in respect of a 2015 transaction, the ITA has attempted to revise a previously closed assessment. In 2022, the Income Tax Appellate Tribunal of India (the "Tribunal") ruled in favor of the Company denying the ITA's ability to revise the assessment, and the ITA appealed this ruling before the Delhi High Court. In January 2023, notwithstanding the Tribunal’s decision in the Company's favor, the ITA issued a revised assessment order to the Company, and in March 2023, this assessment order was struck down by the Tribunal. The ITA then filed an appeal to the Delhi High Court challenging the decision of the Tribunal. In December 2024, the Delhi High Court dismissed the ITA's appeal of the Tribunal's order, upholding the Company’s position. Although the ITA has filed an appeal before the Supreme Court of India, the Company believes that it is more likely than not that the Company’s position will ultimately prevail in respect of these transactions. Accordingly, no unrecognized tax benefit has been provided with respect to this matter as of March 31, 2026.
41
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
24. Subsequent events
Dividend
On April 23, 2026, the Company announced that its Board of Directors declared a dividend for the second quarter of 2026 of $0.1875 per common share, which is payable on June 25, 2026 to shareholders of record as of the close of business on June 10, 2026. The declaration of any future dividends will be at the discretion of the Board of Directors and subject to Bermuda and other applicable laws.
42
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is meant to provide material information relevant to an assessment of the financial condition and results of operations of our company, including an evaluation of the amounts and uncertainties of cash flows from operations and from outside sources, so as to allow investors to better view our company from management’s perspective. The following discussion should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025 and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to historical information, this discussion includes forward-looking statements and information that involves risks, uncertainties and assumptions, including but not limited to those listed below and under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Special Note Regarding Forward-Looking Statements
We have made statements in this Quarterly Report on Form 10-Q (the “Quarterly Report”) in, among other sections, Part I, Item 2—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are forward-looking statements. In some cases, you can identify these statements by forward-looking terms such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “could,” “may,” “shall,” “will,” “would” and variations of such words and similar expressions, or the negative of such words or similar expressions. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, which in some cases may be based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks outlined in Part I, Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Forward-looking statements we may make include, but are not limited to, statements relating to:
•our ability to retain existing clients and contracts;
•our ability to win new clients and engagements;
•the expected value of the statements of work under our master service agreements;
•our beliefs about future trends in our market;
•political, economic or business conditions in countries where we have operations or where our clients operate, and heightened economic uncertainty and geopolitical tensions;
•expected spending by existing and prospective clients on our solutions and services;
•foreign currency exchange rates;
•our ability to convert bookings to revenue;
•our rate of employee attrition;
•our effective tax rate; and
•competition in our industry.
Factors that may cause actual results to differ from expected results include, among others:
•our ability to anticipate, develop and incorporate advanced technologies, including artificial intelligence (“AI”) and generative and agentic AI, into our solutions and services as well as our internal operations and to compete in the rapidly evolving technological environment and successfully implement and generate revenue from new solutions and services;
•our ability to develop and successfully execute our business strategies;
•evolving global trade dynamics, including newly imposed or changing tariffs, trade restrictions and other measures introduced by major economies, any of which may disrupt global supply chains, increase operating costs for our clients and delay their business decisions;
•deterioration in the global economic environment and its impact on our clients;
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•our ability to hire and retain enough qualified employees to support our business, especially our advanced technology solutions;
•our ability to safeguard our systems and protect client, Genpact or employee data from security incidents or cyberattacks;
•our ability to effectively price our solutions and services and maintain our pricing and employee and asset utilization rates;
•general inflationary pressures and our ability to share increased costs with our clients;
•increasing competition in our industry;
•increases in wages in locations where we have operations;
•our ability to retain senior management;
•our ability to comply with data protection laws and regulations and to maintain the security and confidentiality of personal and other sensitive data of our clients, employees or others;
•telecommunications or technology disruptions or breaches, natural or other disasters, or medical epidemics or pandemics;
•our dependence on favorable policies and tax laws that may be changed or amended in a manner adverse to us or be unavailable to us in the future, including as a result of tax policy changes in India, and our ability to effectively execute our tax planning strategies;
•claims and lawsuits, including by clients, employees or third parties;
•regulatory, legislative and judicial developments, including the withdrawal of governmental fiscal incentives, particularly in India;
•our dependence on revenues derived from clients in North America and Europe and clients that operate in certain industries;
•geopolitical tensions, including the Russia-Ukraine war and the Middle East conflicts, and actions that may be taken by the United States and other countries in response;
•our ability to successfully consummate or integrate strategic acquisitions;
•our ability to attract and retain clients and to develop and maintain client relationships on attractive terms;
•our ability to service our defined contribution and benefit plan payment obligations;
•clarification as to the possible retrospective application of a judicial pronouncement in India regarding our defined contribution and benefit plan payment obligations;
•financing terms, including changes in the Secured Overnight Financing Rate ("SOFR") and changes to our credit ratings;
•our ability to meet our corporate funding needs, pay dividends and service debt, including our ability to comply with the restrictions that apply to our indebtedness that may limit our business activities and investment opportunities;
•our ability to successfully implement our new enterprise resource planning system;
•our ability to grow our business and effectively manage growth and international operations while maintaining effective internal controls;
•restrictions on visas for our employees, in particular for employees traveling to the United States, the United Kingdom and the European Union, and restrictions on immigration more generally, as well as the potentially increased costs of visas and the wages we are required to pay employees on visas;
•fluctuations in currency exchange rates between the currencies in which we transact business;
•the selling cycle for our client relationships;
•legislation in the United States or elsewhere that restricts or adversely affects demand for our services offshore;
•our ability to protect our intellectual property and the intellectual property of others;
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•the international nature of our business;
•technological innovation; and
•unionization of a significant number of our employees.
Although we believe the expectations reflected in the forward-looking statements are reasonable at the time they are made, we cannot guarantee future results, level of activity, performance or achievements. Achievement of future results is subject to risks, uncertainties, and potentially inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements. We undertake no obligation to update any of these forward-looking statements after the date of this filing to conform our prior statements to actual results or revised expectations. You are advised, however, to consult any further disclosures we make on related subjects in our Form 10-K, Form 10-Q and Form 8-K reports to the Securities and Exchange Commission (the “SEC”).
Macroeconomic and business environment
Our results of operations are affected by economic and geopolitical conditions, including overall levels of business confidence, inflationary pressures, monetary policy uncertainty and the pace of global growth. Economic uncertainty continues to increase in several markets globally, which has impacted our business and may continue to impact our business in the future. Any extended periods of slower sales cycles could have a material adverse effect on our business, financial position and results of operations.
Geopolitical tensions also continue to intensify. Conflicts in the Middle East, in particular the Iran conflict, as well as the ongoing conflict between Russia and Ukraine, are exacerbating global market volatility and regional instability. We do not have operations in Iran, Russia or Ukraine, and our direct exposure to affected countries in the Middle East remains limited. To date, these conflicts have not had a material impact on our business, financial position or operations, but it is difficult to anticipate the future impacts of these conflicts on our business or our clients’ businesses.
For additional information about the risks we face, see Part I, Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Overview
We are an agentic and advanced technology solutions company recognized for our deep industry knowledge, process intelligence and last-mile expertise. We have over 145,000 employees serving clients from more than 35 countries. Our registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.
In the quarter ended March 31, 2026, we recorded net revenues of $1,296.1 million. Net revenues from Advanced Technology Solutions were $345.2 million and net revenues from Core Business Services were $950.8 million.
Critical Accounting Policies and Estimates
For a description of our critical accounting policies and estimates, see Note 2—“Summary of significant accounting policies” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above, as well as Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and Note 2—“Summary of significant accounting policies” under Part IV, Item 15—“Exhibits and Financial Statement Schedules” in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026 from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.
Due to rounding, the numbers presented in the tables or in the narrative included in this “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” may not add up precisely to the totals provided.
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Results of Operations
The following table sets forth certain data from our consolidated statements of income for the three months ended March 31, 2025 and 2026.
| Percentage Change Increase/(Decrease) | ||||||||||||||||||||
| Three months ended March 31, | Three months ended March 31, | |||||||||||||||||||
| 2025 | 2026 | 2026 vs. 2025 | ||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||
| Net revenues | $ | 1,214.9 | $ | 1,296.1 | 6.7 | % | ||||||||||||||
| Cost of revenue | 785.9 | 824.4 | 4.9 | % | ||||||||||||||||
| Gross profit | 429.0 | 471.7 | 9.9 | % | ||||||||||||||||
| Gross profit margin | 35.3 | % | 36.4 | % | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Selling, general and administrative expenses | 241.1 | 270.3 | 12.1 | % | ||||||||||||||||
| Amortization of acquired intangible assets | 4.3 | 3.1 | (28.0) | % | ||||||||||||||||
| Other operating (income) expense, net | (0.1) | (0.4) | NM* | |||||||||||||||||
| Income from operations | 183.7 | 198.6 | 8.1 | % | ||||||||||||||||
| Income from operations as a percentage of net revenues | 15.1 | % | 15.3 | % | ||||||||||||||||
| Foreign exchange gains, net | 1.3 | 7.3 | 466.5 | % | ||||||||||||||||
| Interest income (expense), net | (11.4) | (11.6) | 1.4 | % | ||||||||||||||||
| Other income (expense), net | 1.7 | (0.3) | (117.2) | % | ||||||||||||||||
| Income before income tax expense | 175.2 | 194.0 | 10.7 | % | ||||||||||||||||
| Income tax expense | 44.4 | 46.0 | 3.7 | % | ||||||||||||||||
| Net income | $ | 130.9 | $ | 148.0 | 13.1 | % | ||||||||||||||
| Net income as a percentage of net revenues | 10.8 | % | 11.4 | % | ||||||||||||||||
*Not Meaningful
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Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025
Net revenues. Our net revenues were $1,296.1 million in the first quarter of 2026, up $81.1 million, or 6.7%, from $1,214.9 million in the first quarter of 2025.
Adjusted for foreign exchange, primarily the impact of changes in the values of the euro, British pound and Australian Dollar against the U.S. dollar, our net revenues grew 5.6% in the first quarter of 2026 compared to the first quarter of 2025 on a constant currency1 basis. We provide information about our revenue growth on a constant currency1 basis so that our revenue may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of our business performance.
Our average headcount increased by 1.8% to approximately 145,500 in the first quarter of 2026 from approximately 142,900 in the first quarter of 2025.
Effective January 1, 2026, we revised our revenue disaggregation to better align with our current business structure, strategic priorities and internal reporting. Our revenue is now disaggregated between Advanced Technology Solutions and Core Business Services, replacing the prior disaggregation between Data-Tech-AI and Digital Operations. Accordingly, no disaggregation of revenue between Data-Tech-AI and Digital Operations has been presented for the first quarters of 2026 and 2025.
Net revenues disaggregated between Advanced Technology Solutions and Core Business Services were as follows:
Three months ended March 31, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
| 2025 | 2026 | 2026 vs. 2025 | ||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||
Advanced Technology Solutions | $ | 277.6 | $ | 345.2 | 24.3 | % | ||||||||||||||
Core Business Services | 937.3 | 950.8 | 1.4 | % | ||||||||||||||||
| Net revenues | $ | 1,214.9 | $ | 1,296.1 | 6.7 | % | ||||||||||||||
Net revenues from Advanced Technology Solutions in the first quarter of 2026 were $345.2 million, up $67.6 million, or 24.3%, from $277.6 million in the first quarter of 2025. This increase was largely driven by increased demand for our data and AI solutions and services, agentic solutions, and advisory services in the first quarter of 2026 compared to the first quarter of 2025.
Net revenues from Core Business Services in the first quarter of 2026 were $950.8 million, up $13.5 million, or 1.4%, from $937.3 million in the first quarter of 2025, primarily due to an increase in revenue from technology-related services and ramp-ups of recently signed deals in the first quarter of 2026 compared to the first quarter of 2025.
Net revenues by reportable segment were as follows:
Three months ended March 31, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
| 2025 | 2026 | 2026 vs. 2025 | ||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||
| Financial Services | $ | 327.2 | $ | 345.0 | 5.4 | % | ||||||||||||||
| Consumer and Healthcare | 420.5 | 446.3 | 6.1 | % | ||||||||||||||||
| High Tech and Manufacturing | 467.2 | 504.7 | 8.0 | % | ||||||||||||||||
| Net revenues | $ | 1,214.9 | $ | 1,296.1 | 6.7 | % | ||||||||||||||
1 Revenue growth on a constant currency basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates adjusted for hedging gains/losses in such period.
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Net revenues from our Financial Services segment increased by 5.4% in the first quarter of 2026 compared to the first quarter of 2025, largely due to an increase in demand for our data and AI solutions and services, advisory services and ramp-ups of services from recently signed deals. Net revenues from our Consumer and Healthcare segment increased by 6.1% in the first quarter of 2026 compared to the first quarter of 2025, largely due to an increase in demand for our data and AI solutions and services, digital solutions, advisory services and technology-related services. Net revenues from our High Tech and Manufacturing segment increased by 8.0% in the first quarter of 2026 compared to the first quarter of 2025, primarily driven by an increase in demand for our agentic solutions, advisory services, technology-related services and ramp-ups of services from recently signed deals.
Cost of revenue. Cost of revenue was $824.4 million in the first quarter of 2026, up $38.5 million, or 4.9%, from $785.9 million in the first quarter of 2025. This increase was primarily due to an increase in our operational headcount to support revenue growth, wage inflation, and an increase in costs for resold partnership technologies in the first quarter of 2026 compared to the first quarter of 2025.
Gross margin. Our gross margin increased from 35.3% in the first quarter of 2025 to 36.4% in the first quarter of 2026, primarily due to a foreign exchange benefit in the first quarter of 2026.
Selling, general and administrative ("SG&A") expenses. SG&A expenses as a percentage of net revenues increased from 19.8% in the first quarter of 2025 to 20.9% in the first quarter of 2026. SG&A expenses were $270.3 million in the first quarter of 2026, up $29.3 million, or 12.1%, from $241.1 million in the first quarter of 2025. The increase was primarily due to increased strategic investments in partnerships, alliances, and other sales and marketing capabilities, wage inflation, and higher spending on professional services in the first quarter of 2026 compared to the first quarter of 2025.
Amortization of acquired intangible assets. Amortization of acquired intangible assets was $3.1 million in the first quarter of 2026, down $1.2 million, or 28.0%, from $4.3 million in the first quarter of 2025. This decrease was primarily driven by the completion of useful lives of intangible assets acquired in prior periods, partially offset by the amortization of acquired intangible assets from our acquisition of XponentL in June 2025. For additional information about the acquisition of XponentL, see Note 3—“Business acquisitions” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Other operating (income) expense, net. Other operating income (net of expense) was $0.4 million in the first quarter of 2026, consistent with $0.1 million in the first quarter of 2025.
Income from operations. As a result of the foregoing factors, income from operations as a percentage of net revenues increased from 15.1% in the first quarter of 2025 to 15.3% in the first quarter of 2026. Income from operations increased by $14.9 million from $183.7 million in the first quarter of 2025 to $198.6 million in the first quarter of 2026, primarily due to higher gross margin, partially offset by higher SG&A expenses in the first quarter of 2026 compared to the first quarter of 2025.
Foreign exchange gains, net. We recorded a net foreign exchange gain of $7.3 million in the first quarter of 2026 compared to a gain of $1.3 million in the first quarter of 2025. The gain in the first quarter of 2026 resulted primarily from the depreciation of the Indian rupee against the U.S. dollar, partially offset by losses from fair value hedges. The gain in the first quarter of 2025 resulted primarily from gains on fair value hedges, partially offset by losses resulting from the appreciation of the Indian rupee against the U.S. dollar.
Interest income (expense), net. Our interest expense (net of interest income) was $11.6 million in the first quarter of 2026, up $0.2 million from $11.4 million in the first quarter of 2025. Our interest income increased from $6.3 million in the first quarter of 2025 to $10.2 million in the first quarter of 2026, due to higher cash and cash equivalents and investments. Our interest expense increased to $21.8 million in the first quarter of 2026 from $17.7 million in the first quarter of 2025, primarily due to incremental interest expense on our senior notes issued in November 2025, partially offset by lower interest expense on our term loan due to a lower SOFR and reduced volume in the first quarter of 2026 compared to the first quarter of 2025. The weighted average rate of interest on our debt, including the net impact of interest rate swaps, was 4.7% in both the first quarters of 2025 and 2026. See the section titled “Liquidity and Capital Resources—Financial Condition” for further discussion.
Other income (expense), net. Our other expense (net of income) was $0.3 million in the first quarter of 2026, compared to other income (net of expense) of $1.7 million in the first quarter of 2025, largely due to sales of excess infrastructure and technology equipment in the first quarter of 2025 compared to the first quarter of 2026.
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Income tax expense. Our income tax expense was $46.0 million in the first quarter of 2026, up from $44.4 million in the first quarter of 2025, due to higher pre-tax income, representing an effective tax rate (“ETR”) of 23.7% in the first quarter of 2026, down from 25.3% in the first quarter of 2025. The decrease in our ETR was primarily driven by optimization of intercompany financing as well as the mix of our pre-tax income and the impacts of other discrete items.
Net income. As a result of the foregoing factors, net income was $148.0 million in the first quarter of 2026, up $17.1 million from $130.9 million in the first quarter of 2025. Net income as a percentage of net revenues was 11.4% in the first quarter of 2026, up from 10.8% in the first quarter of 2025.
Adjusted income from operations. Adjusted income from operations (“AOI”) was $223.7 million in the first quarter of 2026, up $13.9 million from $209.7 million in the first quarter of 2025. Our AOI margin was 17.3% in both the first quarters of 2025 and 2026, largely driven by higher gross margin, partially offset by higher SG&A expenses related to investments in sales capabilities and development costs associated with our advanced data and agentic solutions.
AOI and AOI margin are non-GAAP measures and are not based on any comprehensive set of accounting rules or principles. They should not be considered as a substitute for, or superior to, financial measures calculated in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. We believe that presenting AOI alongside our reported results offers useful supplemental information to our investors and management regarding financial and business trends relating to our financial condition and results of operations. A limitation of using AOI versus net income calculated in accordance with GAAP is that AOI excludes certain recurring costs and certain other charges, namely stock-based compensation and amortization of acquired intangibles. We compensate for this limitation by providing specific information on the GAAP amounts excluded from AOI.
We calculate AOI as net income, excluding (i) stock-based compensation expense, (ii) amortization of acquired intangible assets, (iii) foreign exchange gains, net, (iv) interest (income) expense, net, and (v) income tax expense, as we believe that our results after considering these adjustments more accurately reflect our ongoing operations. To calculate AOI margin, we divided AOI (as calculated above) by net revenue. For additional information, see Note 18—“Segment reporting” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
The following table shows the reconciliation of AOI to net income, the most directly comparable GAAP measure, for the three months ended March 31, 2025 and 2026:
Three months ended March 31, | ||||||||||||||
| 2025 | 2026 | |||||||||||||
| (dollars in millions) | ||||||||||||||
| Net income | $ | 130.9 | $ | 148.0 | ||||||||||
| Foreign exchange gains, net | (1.3) | (7.3) | ||||||||||||
| Interest (income) expense, net | 11.4 | 11.6 | ||||||||||||
| Income tax expense | 44.4 | 46.0 | ||||||||||||
| Stock-based compensation expense | 20.0 | 22.3 | ||||||||||||
| Amortization of acquired intangible assets | 4.3 | 3.1 | ||||||||||||
| Adjusted income from operations | $ | 209.7 | $ | 223.7 | ||||||||||
The following table sets forth our AOI by segment for the three months ended March 31, 2025 and 2026:
Three months ended March 31, | Percentage Change Increase/(Decrease) | |||||||||||||||||||
| 2025 | 2026 | 2026 vs. 2025 | ||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||
| Financial Services | $ | 58.2 | $ | 66.3 | 13.8 | % | ||||||||||||||
| Consumer and Healthcare | 70.3 | 64.7 | (8.0) | % | ||||||||||||||||
| High Tech and Manufacturing | 80.1 | 92.5 | 15.4 | % | ||||||||||||||||
| Total reportable segment | $ | 208.6 | $ | 223.5 | 7.1 | % | ||||||||||||||
| Unallocated corporate expenses | 1.1 | 0.3 | NM* | |||||||||||||||||
| Adjusted income from operations | $ | 209.7 | $ | 223.7 | 6.6 | % | ||||||||||||||
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AOI of our Financial Services and High Tech and Manufacturing segments increased by 13.8% and 15.4%, respectively, primarily driven by higher revenues and operating efficiency in the first quarter of 2026 compared to the first quarter of 2025. AOI of our Consumer and Healthcare segment decreased by 8.0%, largely driven by investments in additional delivery capabilities and resources to drive business growth in the first quarter of 2026 compared to the first quarter of 2025.
AOI for “Unallocated corporate expenses” in the table above primarily represents the adjustment of allowances for credit losses, write-downs of property, plant and equipment and right-of-use assets, and over- or under-absorption of corporate overheads, which are not allocated to any individual segment for management's internal reporting purposes. See Note 18—“Segment reporting” under Part I, Item 1— “Unaudited Consolidated Financial Statements” above.
Liquidity and Capital Resources
Overview
Information about our financial position as of December 31, 2025 and March 31, 2026 is presented below:
As of December 31, 2025 | As of March 31, 2026 | Percentage Change Increase/(Decrease) | ||||||||||||||||||
| (dollars in millions) | 2026 vs. 2025 | |||||||||||||||||||
| Cash and cash equivalents | $ | 853.8 | $ | 578.1 | (32.3 | %) | ||||||||||||||
| Short-term investments | 350.0 | 350.0 | — | |||||||||||||||||
| Current portion of long-term debt | 376.0 | 376.2 | 0.1 | % | ||||||||||||||||
| Long-term debt, less current portion | 1,166.3 | 1,160.2 | (0.5) | % | ||||||||||||||||
| Total equity | $ | 2,549.4 | $ | 2,475.2 | (2.9 | %) | ||||||||||||||
Financial Condition
We have historically financed our operations and our expansion, including acquisitions, with cash from operations and borrowing facilities.
On February 6, 2025, our board of directors approved an 11% increase in our quarterly cash dividend from $0.1525 per common share to $0.17 per common share, representing an annual dividend of $0.68 per common share for 2025, up from $0.61 per common share in 2024. On March 26, 2025, we paid a dividend of $0.17 per share, amounting to $29.8 million in the aggregate, to shareholders of record as of March 11, 2025.
On February 5, 2026, our board of directors approved a 10% increase in our quarterly cash dividend from $0.17 per common share to $0.1875 per common share, representing a planned annual dividend of $0.75 per common share for 2026, up from $0.68 per common share in 2025. On March 31, 2026, the Company paid a dividend of $0.1875 per share, amounting to $31.8 million in the aggregate, to shareholders of record as of March 16, 2026.
As of March 31, 2026, the total authorization under our existing share repurchase program was $2,750.0 million, of which $294.1 million remained available as of March 31, 2026. Since our share repurchase program was initially authorized in 2015, we have repurchased 72,711,132 of our common shares at a weighted average price of $33.78 per share, for an aggregate purchase price of $2,455.9 million. This amount includes shares repurchased under our 2017 accelerated share repurchase program.
During the three months ended March 31, 2025 and 2026, we repurchased 1,206,812 and 1,811,986 of our common shares, respectively, on the open market at a weighted average price of $52.17 and $38.61 per share, respectively, for an aggregate purchase price of $63.0 million and $70.0 million, respectively. All repurchased shares have been retired.
For additional information, see Note 16—“Capital stock” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
We expect that for the next twelve months and for the foreseeable future, our cash from operations, cash reserves and debt capacity will be sufficient to finance our operations, our growth and expansion plans, dividend payments and additional share repurchases we may make under our share repurchase program. In addition, we may raise additional funds through public or private debt or equity financing. Our working capital needs are primarily to finance our payroll and other administrative and information technology expenses in advance of the receipt of accounts receivable. Our primary capital requirements include opening new delivery centers, expanding existing operations to support our growth, financing acquisitions and enhancing capabilities, including building certain advanced technology solutions.
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Cash flows from operating, investing and financing activities, as reflected in our consolidated statements of cash flows, are summarized in the following table:
| Three months ended March 31, | Percentage Change | |||||||||||||||||||
| 2025 | 2026 | 2026 vs. 2025 | ||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||
| Net cash provided by/(used for): | ||||||||||||||||||||
| Operating activities | $ | 40.4 | $ | (23.5) | (158.2) | % | ||||||||||||||
| Investing activities | 0.8 | (31.4) | NM* | |||||||||||||||||
| Financing activities | (125.5) | (204.3) | 62.8 | % | ||||||||||||||||
Net decrease in cash and cash equivalents | $ | (84.3) | $ | (259.3) | 207.5 | % | ||||||||||||||
*Not Meaningful
Cash flows used for/provided by operating activities. Net cash used for operating activities was $23.5 million in the three months ended March 31, 2026 compared to cash provided by operating activities of $40.4 million in the three months ended March 31, 2025. This decrease was primarily driven by a $74.5 million increase in operating assets and liabilities, primarily driven by higher receivable balances, a reduction in customer advances and higher income tax and employee related payments. The impact of these items was partially offset by lower vendor related payments in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Additionally, there was a $6.6 million decrease in non-cash expenses, primarily due to an unrealized (gain)/loss on the revaluation of foreign currency assets/liabilities in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This combined net decrease was partially offset by a $17.1 million increase in net income in the three months ended March 31, 2026 compared to the three months ended March 31, 2025,
Cash flows used for/provided by investing activities. Our net cash used for investing activities was $31.4 million in the three months ended March 31, 2026 compared to net cash provided by investing activities of $0.8 million in the three months ended March 31, 2025. Net cash used for investing activities increased primarily due to (i) the maturity of $23.4 million in term deposits in the three months ended March 31, 2025 with no corresponding proceeds from investments in the three months ended March 31, 2026, and (ii) an $8.9 million increase in payments (net of sales proceeds) for the purchase of property, plant and equipment and internally generated intangible assets in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Cash flows used for financing activities. Our net cash used for financing activities was $204.3 million in the three months ended March 31, 2026 compared to $125.5 million in the three months ended March 31, 2025. This change was primarily due to (i) a $77.5 million earn-out consideration payment in connection with our acquisition of XponentL in the three months ended March 31, 2026 with no corresponding payments in the three months ended March 31, 2025, (ii) higher payments for stock repurchased and retired (including related expenses), amounting to $70.0 million in the three months ended March 31, 2026 compared to $63.0 million in the three months ended March 31, 2025, and (iii) lower proceeds from the issuance of common shares under stock-based compensation plans, amounting to $2.8 million in the three months ended March 31, 2026 compared to $6.9 million in the three months ended March 31, 2025. This was partially offset by lower payments for the net settlement of stock-based awards, amounting to $18.4 million in the three months ended March 31, 2026 compared to $30.7 million in the three months ended March 31, 2025.
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Financing Arrangements
In December 2022, we entered 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. (“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, which consists of a $530.0 million term loan and a $650.0 million revolving credit facility. An additional third-party fee paid in connection with the 2022 Credit Agreement is being amortized over the duration of the term loan and revolving credit facility, which expire on December 13, 2027. In connection with our entry into the 2022 Credit Agreement, we terminated our previous credit facility under our amended and restated credit agreement entered into in August 2018 (the “2018 Credit Agreement”) with the Borrowers, as borrowers, Wells Fargo, as administrative agent, and the lenders and other financial institutions party thereto, which was comprised of a $680.0 million term loan and a $500.0 million revolving credit facility. The 2022 Credit Agreement replaced the 2018 Credit Agreement.
The 2022 Credit Agreement is guaranteed by us and certain of our subsidiaries. The obligations under the 2022 Credit Agreement are unsecured.
Borrowings under the 2022 Credit Agreement bear interest at a rate equal to, at our election, 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. from time to time (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 we are not, or after making the payment would not be, in compliance with certain financial covenants contained in the 2022 Credit Agreement. These covenants require us to maintain a net debt to EBITDA leverage ratio of less than 3x and an interest coverage ratio of more than 3x. During the period ended March 31, 2026, we were in compliance with the terms of the 2022 Credit Agreement, including all of the financial covenants therein. Our retained earnings are not subject to any restrictions on availability to make dividend payments to shareholders, subject to compliance with the financial covenants described above that are contained in the 2022 Credit Agreement.
As of December 31, 2025 and March 31, 2026, our outstanding term loan, net of debt amortization expense of $0.6 million and $0.5 million, respectively, was $449.9 million and $443.4 million, respectively.
We also have 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, 2025 and March 31, 2026, the limits available under such facilities were $26.6 million and $31.0 million, respectively, of which $8.0 million and $7.8 million, respectively, was utilized, constituting non-funded drawdown. As of December 31, 2025 and March 31, 2026, a total of $1.3 million and $1.3 million, respectively, of our revolving credit facility was utilized, of which $0.0 million and $0.0 million, respectively, constituted funded drawdown and $1.3 million and $1.3 million, respectively, constituted non-funded drawdown. Our outstanding term loan and revolving credit facility expire on December 13, 2027.
We manage a portion of our interest rate risk related to floating rate indebtedness by entering into interest rate swaps under which we receive floating rate payments based on the greater of Term SOFR and the floor rate under our term loan and make payments based on a fixed rate. As of March 31, 2026, we were party to interest rate swaps covering a total notional amount of $218.8 million. Under these swap agreements, the rate that we pay to banks in exchange for Term SOFR ranges between 4.25% and 4.72%.
In March 2021, Genpact Luxembourg and Genpact USA co-issued $350 million aggregate principal amount of 1.750% senior notes (the "2021 Senior Notes"). The 2021 Senior Notes were fully guaranteed by the Company and Genpact UK Finco plc. The total debt issuance cost of $3.0 million incurred in connection with the 2021 Senior Notes offering was amortized over the life of the 2021 Senior Notes as additional interest expense. As of December 31, 2025 and March 31, 2026, the amount outstanding under the 2021 Senior Notes, net of debt amortization expense of $0.2 million and $0.0 million, respectively, was $349.8 million and $350.0 million, respectively. The 2021 Senior Notes were repaid on April 10, 2026.
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In June 2024, Genpact Luxembourg and Genpact USA co-issued $400 million aggregate principal amount of 6.000% senior notes (the "2024 Senior Notes"). The 2024 Senior Notes are fully guaranteed by the Company. The total debt issuance cost of $4.4 million incurred in connection with the 2024 Senior Notes offering is being amortized over the life of the 2024 Senior Notes as additional interest expense. As of December 31, 2025 and March 31, 2026, the amount outstanding under the 2024 Senior Notes, net of debt amortization expense of $3.0 million and $2.8 million, respectively, was $397.0 million and $397.2 million, respectively, which is payable on June 4, 2029.
In November 2025, Genpact UK Finco plc and Genpact USA co-issued $350.0 million aggregate principal amount of 4.950% senior notes (the “2025 Senior Notes,” and together with the 2024 Senior Notes, the "Senior Notes"). The 2025 Senior Notes are fully guaranteed by the Company and Genpact Luxembourg. The total debt issuance cost of $4.6 million incurred in connection with the 2025 Senior Notes is being amortized over the life of the 2025 Senior Notes as additional interest expense. As of December 31, 2025 and March 31, 2026, the amount outstanding under the 2025 Senior Notes, net of debt amortization expense of $4.4 million and $4.2 million, respectively, was $345.6 million and $345.8 million, respectively, which is payable on November 18, 2030.
We paid interest on the 2021 Senior Notes semi-annually in arrears on April 10 and October 10 of each year. We pay interest on (i) the 2024 Senior Notes semi-annually in arrears on June 4 and December 4 of each year and (ii) the 2025 Senior Notes semi-annually in arrears on May 18 and November 18 of each year, ending on the maturity dates of June 4, 2029 and November 18, 2030, respectively.
For additional information, see Notes 10 and 11—“Short-term borrowings” and “Long-term debt” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
We use a revolving accounts receivable-based facility for managing our cash flows. As part of this arrangement, accounts receivable sold under this facility are de-recognized upon sale along with the related allowances, if any. As of each of December 31, 2025 and March 31, 2026, we had a revolving accounts receivable-based facility of $100.0 million permitting us to sell accounts receivable to banks on a non-recourse basis in the ordinary course of business. The aggregate maximum capacity utilized at any time during the period ended December 31, 2025 and March 31, 2026 was $60.0 million and $79.5 million, respectively. The principal amount outstanding against this facility as of December 31, 2025 and March 31, 2026 was $55.1 million and $79.4 million, respectively. The cost of factoring accounts receivable sold under this facility during the three months ended March 31, 2025 and 2026 was $0.7 million and $0.7 million, respectively.
We also have arrangements with financial institutions that manage the accounts payable program for certain of our large clients. We sell 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. We used these arrangements to sell accounts receivable amounting to $327.2 million and $85.1 million during the periods ended December 31, 2025 and March 31, 2026, respectively, which also represents the maximum utilization under these arrangements in each such period. The cost of factoring such accounts receivable during the three months ended March 31, 2025 and 2026 was $1.2 million and $1.3 million, respectively.
For additional information, see Note 4—“Accounts receivable, net of allowance for credit losses” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Off-Balance Sheet Arrangements
Our off-balance sheet arrangements consist of foreign exchange contracts. For additional information, see Part I, Item 1A—“Risk Factors”—“Currency exchange rate fluctuations in various currencies in which we do business, especially the Indian rupee, the euro and the U.S. dollar, could have a material adverse effect on our business, results of operations and financial condition” in our Annual Report on Form 10-K for the year ended December 31, 2025, and Note 6— "Derivative financial instruments" under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Other Liquidity and Capital Resources Information
As of December 31, 2025 and March 31, 2026, we have purchase commitments, net of capital advances, of $16.5 million and $13.9 million, respectively, to be paid in respect of such purchases over the next year. For additional information, see Note 23—“Commitments and contingencies” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above and Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations”—“Other Liquidity and Capital Resources Information” in our Annual Report on Form 10-K for the year ended December 31, 2025.
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As of December 31, 2025 and March 31, 2026, we have operating and finance lease commitments of $268.4 million and $273.9 million, respectively, to be paid over the lease terms. For additional information, see Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations”—“Other Liquidity and Capital Resources Information” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Supplemental Guarantor Financial Information
As discussed in Note 11, “Long-term debt,” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above, Genpact Luxembourg and Genpact USA co-issued the 2021 Senior Notes and the 2024 Senior Notes. Genpact UK Finco plc and Genpact USA co-issued the 2025 Senior Notes. As of March 31, 2026, the outstanding balance of the 2021 Senior Notes, the 2024 Senior Notes and the 2025 Senior Notes (collectively, the "Senior Notes") was $350.0 million, $397.2 million, and $345.8 million, respectively. Each series of Senior Notes is fully and unconditionally guaranteed by the Company. Genpact UK Finco plc co-guaranteed the 2021 Senior Notes and the 2024 Senior Notes, and Genpact Luxembourg S.à r.l co-guaranteed the 2025 Senior Notes. Our other subsidiaries (such subsidiaries are referred to as the “non-Guarantors”) do not guarantee any series of outstanding Senior Notes.
The Company (with respect to all series of Senior Notes) has fully and unconditionally guaranteed (i) that the payment of the principal, premium, if any, and interest on the Senior Notes shall be promptly paid in full when due, whether at stated maturity of the Senior Notes, by acceleration, redemption or otherwise, and that the payment of interest on the overdue principal and interest on the Senior Notes, if any, if lawful, and all other obligations of the applicable issuer or issuers of the Senior Notes, respectively, to the holders of the Senior Notes or the trustee under the Senior Notes shall be promptly paid in full or performed, and (ii) in case of any extension of time of payment or renewal of any Senior Notes or any of such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failure of payment by Genpact Luxembourg, Genpact UK Finco plc or Genpact USA when due of any amount so guaranteed or any performance so guaranteed for whatever reason shall obligate the Company to pay the same immediately. The Company has agreed that the guarantees described above are guarantees of payment of the Senior Notes and not guarantees of collection.
The following tables present summarized financial information for Genpact Luxembourg, Genpact USA, Genpact UK Finco plc and the Company (collectively, the “Debt Issuers and Guarantors”) on a combined basis after elimination of (i) intercompany transactions and balances among the Debt Issuers and Guarantors and (ii) equity in earnings from and investments in the non-Guarantors.
| Summarized Statements of Income | Year ended December 31, 2025 | Three months ended March 31, 2026 | ||||||||||||
| (dollars in millions) | ||||||||||||||
| Net revenues | $ | 398.6 | $ | 106.8 | ||||||||||
| Gross profit | 398.6 | 106.8 | ||||||||||||
| Net income | 224.4 | 777.4 | ||||||||||||
Below is a summary of transactions with non-Guarantors included in the summarized statement of income above:
| Year ended December 31, 2025 | Three months ended March 31, 2026 | |||||||||||||
| (dollars in millions) | ||||||||||||||
| Revenue from services | $ | 398.6 | $ | 106.8 | ||||||||||
| Interest income (expense), net | 11.1 | 16.1 | ||||||||||||
| Other income (expense), net | (11.3) | (2.9) | ||||||||||||
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| Summarized Balance Sheets | As of December 31, 2025 | As of March 31, 2026 | ||||||||||||
| (dollars in millions) | ||||||||||||||
| Assets | ||||||||||||||
| Current assets | $ | 2,658.1 | $ | 2,818.8 | ||||||||||
| Non-current assets | 966.0 | 969.4 | ||||||||||||
| Liabilities | ||||||||||||||
| Current liabilities | $ | 5,017.3 | $ | 5,644.1 | ||||||||||
| Non-current liabilities | 1,058.6 | 1,026.2 | ||||||||||||
Below is a summary of the balances with non-Guarantors included in the summarized balance sheets above:
| As of December 31, 2025 | As of March 31, 2026 | |||||||||||||
| (dollars in millions) | ||||||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Accounts receivable, net | $ | 175.9 | $ | 111.0 | ||||||||||
| Loans receivable | 1,731.5 | 2,131.8 | ||||||||||||
| Others | 302.3 | 188.9 | ||||||||||||
| Non-current assets | ||||||||||||||
| Others | $ | — | — | |||||||||||
| Liabilities | ||||||||||||||
| Current liabilities | ||||||||||||||
| Loans payable | $ | 3,170.1 | $ | 3,583.6 | ||||||||||
| Others | 1,475.5 | 1,637.8 | ||||||||||||
| Non-Current liabilities | ||||||||||||||
| Loans payable | $ | 38.0 | $ | 13.0 | ||||||||||
The Senior Notes and the related guarantees rank pari passu in right of payment with all senior and unsecured debt of the Debt Issuers and the Guarantors and rank senior in right of payment to all of the Debt Issuers’ and the Guarantors’ future subordinated debt. The Senior Notes are effectively subordinated to all of the Debt Issuers’ and Guarantors’ existing and future secured debt to the extent of the value of the assets securing such debt. The Senior Notes are structurally subordinated to all of the existing and future debt and other liabilities of the Guarantors' subsidiaries (other than the Issuer), including the liabilities of certain subsidiaries pursuant to our senior credit facility. The non-Guarantors are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due under the Senior Notes or to make the funds available to pay those amounts, whether by dividend, distribution, loan or other payment. If the Debt Issuers or the Guarantors have any right to receive any assets of any of the non-Guarantors upon the insolvency, liquidation, reorganization, dissolution or other winding-up of any non-Guarantor, all of that non-Guarantor’s creditors (including trade creditors) would be entitled to payment in full out of that non-Guarantor’s assets before the holders of the Senior Notes would be entitled to any payment. Claims of holders of the Senior Notes are structurally subordinated to the liabilities of certain non-Guarantors pursuant to their liabilities under our senior credit facility.
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Recent Accounting Pronouncements
For a description of recent accounting pronouncements, see Note 2, "Summary of significant accounting policies —(o) Recently issued accounting pronouncements” under Item 1—“Unaudited Consolidated Financial Statements” above and Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations”—“Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to interest rate risk arising from changes in interest rates on the floating rate indebtedness under our term loan and revolving credit facility and we were exposed to interest rate risk in relation to the 2021 Senior Notes. Borrowings under our term loan and revolving credit facility bear interest at floating rates based on Term SOFR, but in no event less than the floor rate of 0.0% plus an applicable margin. The interest rate on our 2021 Senior Notes was subject to adjustment based on the ratings assigned to our debt by Moody’s Investors Service, Inc. and Standard & Poor’s Rating Services, Inc. from time to time. A decline in such ratings could have resulted in an increase of up to 2% in the rate of interest on the 2021 Senior Notes. Accordingly, fluctuations in market interest rates or a decline in ratings may increase or decrease our interest expense which would, in turn, increase or decrease our net income and cash flow.
We manage a portion of our interest rate risk related to floating rate indebtedness by entering into interest rate swaps under which we receive floating rate payments based on the greater of Term SOFR and the floor rate under our term loan and make payments based on a fixed rate. Under these swap agreements, the rate that we pay to banks in exchange for Term SOFR ranges between 4.25% and 4.72%.
In March 2021, we executed a treasury rate lock agreement covering $350.0 million in connection with future interest payments to be made on our 2021 Senior Notes, and the treasury rate lock agreement 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 March 31, 2026 was $0.0 million.
In May 2024, we executed treasury rate lock agreements for $400.0 million in connection with future interest payments to be made on our 2024 Senior Notes, and the treasury rate lock agreements were designated as cash flow hedges. The treasury rate lock agreements were terminated on May 30, 2024, and a deferred loss was recorded in accumulated other comprehensive income and is being amortized to interest expense over the life of the 2024 Senior Notes. The remaining loss to be amortized related to the treasury rate lock agreements as of March 31, 2026 was $0.3 million.
In November 2025, we executed treasury rate lock agreements for $350.0 million in connection with future interest payments to be made on our 2025 Senior Notes, and the treasury rate lock agreements were designated as cash flow hedges. These treasury rate lock agreements were terminated on November 13, 2025 and a deferred loss was recorded in accumulated other comprehensive income and is being amortized to interest expense over the life of the 2025 Senior Notes. The remaining loss to be amortized related to the treasury rate lock agreements as of March 31, 2026 was $0.2 million.
For a discussion of our market risk associated with foreign currency risk, interest rate risk and credit risk, see Part II, Item 7A—“Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2025.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are the Company’s controls and other procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarterly period ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth in Part I, Item 1A—“Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 related to the 2023 ITA Order and in subsection (b) to Note 23—“Commitments and contingencies—Contingency” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above is incorporated herein by reference.
Item 1A. Risk Factors
We have disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 the risk factors that materially affect our business, financial condition or results of operations. You should carefully consider the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 as well as the other information that appears elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us may also materially adversely affect our business, financial condition and/or results of operations.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
Unregistered Sales of Equity Securities
None.
Use of Proceeds
None.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
Share repurchase activity during the three months ended March 31, 2026 was as follows:
| Period | Total Number of Shares Purchased | Weighted Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program ($) | ||||||||||||||||||||||
| January 1-January 31, 2026 | — | — | — | 364,076,328 | ||||||||||||||||||||||
| February 1-February 28, 2026 | 1,356,752 | 38.30 | 1,356,752 | 312,116,503 | ||||||||||||||||||||||
| March 1-March 31, 2026 | 455,234 | 39.53 | 455,234 | 294,119,770 | ||||||||||||||||||||||
| Total | 1,811,986 | 38.61 | 1,811,986 | |||||||||||||||||||||||
Our total authorization under our share repurchase program, which was first announced in 2015, is $2.750 billion. This repurchase program does not obligate us to acquire any specific number of shares and does not specify an expiration date. All shares repurchased under the plan have been retired. For additional information, see Note 16—“Capital stock” under Part I, Item 1— “Unaudited Consolidated Financial Statements” above.
Item 5. Other Information
(c) Director and Officer Trading Arrangements
None of our directors or officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934) adopted terminated
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Item 6. Exhibits
Exhibit Number | Description | |||||||
| 3.1 | Memorandum of Association of the Registrant (incorporated by reference to Exhibit 3.1 to Amendment No. 2 of the Registrant’s Registration Statement on Form S-1 (File No. 333-142875) filed with the SEC on July 16, 2007). | |||||||
| 3.2 | Bye-laws of the Registrant (incorporated by reference to Exhibit 3.3 to Amendment No. 4 of the Registrant’s Registration Statement on Form S-1 (File No. 333-142875) filed with the SEC on August 1, 2007). | |||||||
10.1*† | Form of 2026 Restricted Share Unit Issuance Agreement for executive officers under the Genpact Limited 2017 Omnibus Incentive Compensation Plan. | |||||||
10.2*† | Form of 2026 Performance Share Award Agreement for executive officers under the Genpact Limited 2017 Omnibus Incentive Compensation Plan. | |||||||
10.3*† | Form of Restricted Share Unit Issuance Agreement for non-employee directors under the Genpact Limited 2017 Omnibus Incentive Compensation Plan. | |||||||
19.1* | Genpact Limited Insider Trading Policy. | |||||||
| 22.1 | List of Issuers and Guarantor Subsidiaries (incorporated by reference to Exhibit 22.1 to the Registrant's Annual Report on Form 10-K (File No. 001-33626) filed with the SEC on February 26, 2026). | |||||||
| 31.1* | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1* | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2* | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS* | Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* Filed or furnished with this Quarterly Report on Form 10-Q.
† Indicates a management contract or compensatory plan, contract or arrangement in which any director or executive officer participates.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 8, 2026
GENPACT LIMITED
| By: | /s/ Balkrishan Kalra | |||||||
| Balkrishan Kalra | ||||||||
| Chief Executive Officer | ||||||||
| By: | /s/ Michael Weiner | |||||||
| Michael Weiner | ||||||||
| Chief Financial Officer | ||||||||
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FAQ
How did Genpact (G) perform financially in Q1 2026?
Genpact posted higher revenue and profit in Q1 2026. Net revenues reached $1,296,072 thousand and net income was $147,992 thousand, both above the prior-year quarter. Diluted EPS increased to $0.86, indicating improved profitability on a per-share basis.
What was Genpact’s cash flow from operations in Q1 2026?
Genpact’s operating cash flow was negative in Q1 2026. Net cash provided by (used for) operating activities was $(23,535) thousand, compared with positive $40,436 thousand a year earlier, mainly reflecting changes in working capital and other operating items during the period.
How much cash and debt does Genpact (G) have as of March 31, 2026?
Genpact ended Q1 2026 with substantial cash and debt. Cash and cash equivalents were $578,079 thousand. Long-term debt, including the current portion, totaled $1,536,343 thousand, comprising the term loan and multiple senior notes with staggered maturities.
What was the impact of the XponentL Data acquisition on Genpact?
Genpact completed the XponentL Data earn-out in early 2026. Total purchase consideration for XponentL was $160,157 thousand, including a final earn-out payment of $77,500 thousand in Q1 2026. The deal added customer and marketing intangibles and goodwill across Genpact’s segments.
How did derivatives and hedging affect Genpact’s Q1 2026 results?
Derivative hedges significantly reduced other comprehensive income. Cash flow hedging derivatives produced a net loss of $(58,899) thousand in other comprehensive income. Combined with currency translation effects, this led to total other comprehensive loss of $(123,048) thousand for the quarter.
What were Genpact’s key per-share metrics in Q1 2026?
Per-share profitability improved year over year. Basic EPS was $0.87 and diluted EPS was $0.86, up from $0.75 and $0.73 respectively in the prior-year quarter. Weighted average diluted shares were 172,845,179 during the period.