ExlService Holdings, Inc.

Previous wording

For the three months ended June 30, 2025, we generated revenues of $514.5 million compared to revenues of $448.4 million for the three months ended June 30, 2024, an increase of $66.1 million, or 14.7%. For the six months ended June 30, 2025, we generated revenues of $1,015.5 million compared to revenues of $884.9 million for the six months ended June 30, 2024, an increase of $130.6 million, or 14.8%.

Current wording

For the three months ended September 30, 2025, we generated revenues of $529.6 million compared to revenues of $472.1 million for the three months ended September 30, 2024, an increase of $57.5 million, or 12.2%. For the nine months ended September 30, 2025, we generated revenues of $1,545.1 million compared to revenues of $1,356.9 million for the nine months ended September 30, 2024, an increase of $188.2 million, or 13.9%.

Previous wording

We serve clients mainly in North America, and the United Kingdom and Europe, with these two regions generating 82.2% and 15.1%, respectively, of our total revenues for the three months ended June 30, 2025, and 82.3% and 14.8%, respectively, of our total revenues for the three months ended June 30, 2024. For the six months ended June 30, 2025, these two regions generated 82.5% and 14.8%, respectively, of our total revenues and 82.6% and 14.7%, respectively, of our total revenues for the six months ended June 30, 2024.

Current wording

We serve clients mainly in North America, and the United Kingdom & Europe, with these two regions generating 82.5% and 14.9%, respectively, of our total revenues for the three months ended September 30, 2025, and 81.7% and 15.1%, respectively, of our total revenues for the three months ended September 30, 2024. For the nine months ended September 30, 2025, these two regions generated 82.5% and 14.8%, respectively, of our total revenues and 82.3% and 14.8%, respectively, of our total revenues for the nine months ended September 30, 2024.

Previous wording

For the three months ended June 30, 2025 and 2024, our total revenues from our top ten clients accounted for 33.5% and 33.0% of our total revenues, respectively. For the six months ended June 30, 2025 and 2024, our total revenues from our top ten clients accounted for 33.6% and 32.9% of our total revenues, respectively. Although we continue to develop relationships with new clients to diversify our client base, we believe that the loss of any of our top ten clients could have a material adverse effect on our financial performance.

Current wording

For the three months ended September 30, 2025 and 2024, our total revenues from our top ten clients accounted for 34.5% and 34.2% of our total revenues, respectively. For the nine months ended September 30, 2025 and 2024, our total revenues from our top ten clients accounted for 33.8% and 33.2% of our total revenues, respectively. Although we continue to develop relationships with new clients to diversify our client base, we believe that the loss of any of our top ten clients could have a material adverse effect on our financial performance.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2025, as compared to the critical accounting policies and estimates referred in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Policies and Estimates” and Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 2025, as compared to the critical accounting policies and estimates referred in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Policies and Estimates” and Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

Revenue growth in Healthcare and Life Sciences of $23.4 million was primarily driven by the expansion of business from our new and existing clients, including incremental revenue from our August 2024 acquisition of Incandescent Technologies, Inc. (“ITI Data”) during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

Revenues for the three months ended September 30, 2025 were up by $57.5 million, or 12.2%, compared to the three months ended September 30, 2024, primarily driven by the expansion of business from our existing clients across all reportable segments by 9.7% and revenue from new client wins, including revenue from our August 2024 acquisition of Incandescent Technologies, Inc. (“ITI Data”) by 2.5% during the three months ended September 30, 2025.

Previous wording

Cost of revenues for the three months ended June 30, 2025 increased by $38.2 million, or 13.5% compared to the three months ended June 30, 2024. The increase in cost of revenues was primarily due to increases in employee-related costs and technology costs, partially offset by foreign exchange gain, net of hedging. Our gross margin for the three months ended June 30, 2025 was 37.7%, compared to 37.1% for the three months ended June 30, 2024, an increase of 60 basis points (“bps”) primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

Cost of revenues for the three months ended September 30, 2025 increased by $31.8 million, or 10.8% compared to the three months ended September 30, 2024. The increase in cost of revenues was primarily due to increases in employee-related costs of $38.4 million on account of higher headcount and wage inflation, higher facilities, technology and other operating costs of $2.9 million, partially offset by lower mail and data expenses in our direct marketing business of $4.3 million and a foreign exchange gain, net of hedging of $5.2 million. Our gross margin for the three months ended September 30, 2025 was 38.5%, compared to 37.8% for the three months ended September 30, 2024, an increase of 70 basis points (“bps”) primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs across all reportable segments during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

The increase in cost of revenues in Insurance of $7.8 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $12.1 million on account of higher headcount and wage inflation, higher technology costs of $0.9 million and higher other operating costs of $0.4 million, partially offset by lower mail and data expenses in our direct marketing business of $4.6 million, and foreign exchange gain, net of hedging of $1.0 million. Gross margin in Insurance increased by 80 bps, primarily due to higher revenues and operational efficiencies during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

The increase in cost of revenues in Insurance by $7.8 million for the three months ended September 30, 2025 was primarily due to increases in employee-related costs of $12.9 million on account of higher headcount and wage inflation, higher other operating costs of $0.9 million, partially offset by lower mail and data expenses in our direct marketing business of $4.3 million and a foreign exchange gain, net of hedging of $1.7 million. Gross margin in Insurance increased by 70 bps, primarily due to higher volumes in certain existing clients during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

The increase in cost of revenues in Healthcare and Life Sciences of $13.0 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $11.9 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $1.0 million and higher other operating costs of $0.7 million, partially offset by foreign exchange gain, net of hedging of $0.6 million. Gross margin in Healthcare and Life Sciences increased by 10 bps primarily due to higher volumes in certain existing clients during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

The increase in cost of revenues in Healthcare and Life Sciences by $13.4 million for the three months ended September 30, 2025 was primarily due to increases in employee-related costs of $13.6 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities and other operating costs of $1.0 million, partially offset by a foreign exchange gain, net of hedging of $1.2 million. Gross margin in Healthcare and Life Sciences increased by 30 bps primarily due to higher volumes in certain existing clients during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries of $10.1 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $9.0 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $0.6 million and higher other operating costs $1.1 million, partially offset by foreign exchange gain, net of hedging of $0.6 million. Gross margin in Banking, Capital Markets and Diversified Industries increased by 20 bps, primarily due to higher revenues and operational efficiencies during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $6.6 million for the three months ended September 30, 2025 was primarily due to increases in employee-related costs of $7.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology and other operating costs of $0.6 million, partially offset by a foreign exchange gain, net of hedging of $1.2 million. Gross margin in Banking, Capital Markets and Diversified Industries increased by 110 bps, primarily due to higher revenues and operational efficiencies during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

The increase in cost of revenues in International Growth Markets of $7.3 million for the three months ended June 30, 2025 was primarily due to increases in employee-related costs of $6.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $0.6 million and higher other operating costs $0.5 million. Gross margin in International Growth Markets increased by 100 bps, primarily due to higher revenues and operational efficiencies during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

The increase in cost of revenues in International Growth Markets by $4.0 million for the three months ended September 30, 2025 was primarily due to increases in employee-related costs of $4.7 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology and other operating costs of $0.4 million, partially offset by a foreign exchange gain, net of hedging of $1.1 million. Gross margin in International Growth Markets increased by 20 bps, primarily due to higher volumes in certain existing clients during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

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

Current wording

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses as a percentage of net revenues increased by 1.1% to 21.3% during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

The increase in SG&A expenses of $7.0 million was primarily due to increases in employee-related costs of $8.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher investments in digital and generative AI capabilities of $1.0 million, higher sales and marketing costs of $0.5 million and foreign exchange loss, net of hedging of $0.4 million. This increase in SG&A was partially offset by one-time restructuring and litigation settlement costs of $3.1 million incurred during the three months ended June 30, 2024, compared to the three months ended June 30, 2025.

Current wording

The increase in SG&A expenses by$17.6 million during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 was primarily due to increases in employee-related costs of $17.0 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data and increase in investments in digital and generative AI capabilities and other operating costs of $0.6 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2025.

Previous wording

The increase in depreciation expense was $1.0 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to investments in infrastructure, technology assets and digital capabilities.

Current wording

The increase in depreciation and amortization expense by 9.6% during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 was primarily due to investments in infrastructure, technology assets and digital capabilities.

Previous wording

Income from Operations. Income from operations increased by $19.7 million, or 32.0%, from $61.5 million for the three months ended June 30, 2024 to $81.2 million for the three months ended June 30, 2025, primarily due to higher revenues and higher gross margins, partially offset by higher SG&A expenses during the three months ended June 30, 2025.

Current wording

Income from Operations. The increase in income from operations by 9.8% during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 was primarily due to higher revenues and gross margins, partially offset by higher SG&A expenses.

Previous wording

Foreign Exchange Gain, net. Foreign exchange gains and losses are primarily attributable to the movement of the U.S. dollar against the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand during the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The average exchange rate of the U.S. dollar against the Indian rupee increased from 83.42 during the three months ended June 30, 2024 to 85.27 during the three months ended June 30, 2025. The average exchange rate of the U.S. dollar against the Philippine peso decreased from 58.29 during the three months ended June 30, 2024 to 55.97 during the three months ended June 30, 2025. The average exchange rate of the U.K. pound sterling against the U.S. dollar increased from 1.26 during the three months ended June 30, 2024 to 1.35 during the three months ended June 30, 2025. The average exchange rate of the U.S. dollar against the South African rand decreased from 18.53 during the three months ended June 30, 2024 to 18.12 during the three months ended June 30, 2025.

Current wording

Foreign Exchange Gain, net. We recorded a foreign exchange loss, net of $1.0 million for the three months ended September 30, 2025, compared to a foreign exchange gain, net of $0.3 million for the three months ended September 30, 2024. Foreign exchange gains and losses are primarily attributable to the movement of the U.S. dollar against the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

Interest expense. Interest expense decreased from $5.3 million for the three months ended June 30, 2024 to $4.3 million for the three months ended June 30, 2025, primarily due to lower average borrowings and a lower effective interest rate of 5.8% during the three months ended June 30, 2025, compared to 6.5% to the three months ended June 30, 2024.

Current wording

Interest expense. The decrease in interest expense by $0.6 million during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 was primarily due to lower average borrowings and a lower average effective interest rate of 5.7% during the three months ended September 30, 2025, compared to 6.5% during the three months ended September 30, 2024.

Previous wording

Income Tax Expense. The effective tax rate decreased from 23.2% during the three months ended June 30, 2024 to 21.9% during the three months ended June 30, 2025. We recorded income tax expense of $18.6 million and $13.9 million for the three months ended June 30, 2025 and 2024, respectively. The increase in income tax expense was primarily as a result of higher profit, partially offset by lower state taxes and higher excess tax benefits during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

Income Tax Expense. The effective tax rate decreased from 22.6% during the three months ended September 30, 2024 to 22.1% during the three months ended September 30, 2025. We recorded income tax expense of $16.5 million and $15.5 million for the three months ended September 30, 2025 and 2024, respectively. The increase in income tax expense was primarily as a result of higher profit and lower excess tax benefits, partially offset by lower state taxes and decrease in non-deductible expenses during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

Previous wording

Revenues for the three months ended June 30, 2025 were up by $66.1 million, or 14.7%, compared to the three months ended June 30, 2024, driven primarily by revenue growth from our new and existing clients in all of our reportable segments.

Current wording

Revenues for the nine months ended September 30, 2025 were up by $188.2 million, or 13.9%, compared to the nine months ended September 30, 2024, primarily driven by the expansion of business from our existing clients across all reportable segments by 10.8% and revenue from new client wins, including revenue from ITI Data by 3.1% during the nine months ended September 30, 2025.

Previous wording

Cost of revenues for the six months ended June 30, 2025 increased by $72.5 million, or 13.0%, compared to the six months ended June 30, 2024. The increase in cost of revenues was primarily due to increases in employee-related costs and technology costs, partially offset by foreign exchange gain, net of hedging. Our gross margin for the six months ended June 30, 2025 was 38.2% compared to 37.2% for the six months ended June 30, 2024, an increase of 100 bps primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Cost of revenues for the nine months ended September 30, 2025 increased by $104.3 million, or 12.3%, compared to the nine months ended September 30, 2024. The increase in cost of revenues was primarily due to increases in employee-related costs of $116.1 million on account of higher headcount and wage inflation, higher facilities, technology and other operating costs of $13.3 million, partially offset by lower mail and data expenses in our direct marketing business of $13.3 million and a foreign exchange gain, net of hedging of $11.8 million. Our gross margin for the nine months ended September 30, 2025 was 38.3% compared to 37.4% for the nine months ended September 30, 2024, an increase of 90 bps primarily driven by higher revenues and operational efficiencies, partially offset by increases in employee-related costs during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

The increase in cost of revenues in Insurance of $12.3 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $22.8 million on account of higher headcount and wage inflation, higher technology costs of $1.8 million, partially offset by lower mail and data expenses in our direct marketing business of $9.0 million, other operating costs of $0.9 million and foreign exchange gain, net of hedging of $2.4 million. Gross margin in Insurance increased by 180 bps, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

The increase in cost of revenues in Insurance by $20.0 million for the nine months ended September 30, 2025 was primarily due to increases in employee-related costs of $35.7 million on account of higher headcount and wage inflation, higher technology costs of $2.8 million, partially offset by lower mail and data expenses in our direct marketing business of $13.3 million, other operating costs of $1.2 million and a foreign exchange gain, net of hedging of $4.0 million. Gross margin in Insurance increased by 140 bps, primarily due to higher revenues and operational efficiencies during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

The increase in cost of revenues in Healthcare and Life Sciences of $28.4 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $26.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $1.2 million, higher technology costs of $1.3 million, and higher other operating costs of $1.3 million, partially offset by foreign exchange gain, net of hedging of $1.6 million. Gross margin in Healthcare and Life Sciences decreased by 60 bps, primarily due to lower volumes in certain existing clients during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

The increase in cost of revenues in Healthcare and Life Sciences by $41.8 million for the nine months ended September 30, 2025 was primarily due to increases in employee-related costs of $39.8 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $1.6 million, higher technology and other operating costs of $3.1 million, partially offset by a foreign exchange gain, net of hedging of $2.7 million. Gross margin in Healthcare and Life Sciences decreased by 20 bps, primarily due to lower revenues in certain existing clients during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries of $17.9 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $16.3 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher facilities costs of $1.1 million, higher technology costs of $1.1 million, and higher other operating costs of $1.1 million, partially offset by foreign exchange gain, net of hedging of $1.7 million. Gross margin in Banking, Capital Markets and Diversified Industries increased by 70 bps, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

The increase in cost of revenues in Banking, Capital Markets and Diversified Industries by $24.5 million for the nine months ended September 30, 2025 was primarily due to increases in employee-related costs of $23.4 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $1.6 million, higher facilities and other operating costs of $2.4 million, partially offset by a foreign exchange gain, net of hedging of $2.9 million. Gross margin in Banking, Capital Markets and Diversified Industries increased by 80 bps, primarily due to higher revenues and operational efficiencies during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

The increase in cost of revenues in International Growth Markets of $13.9 million for the six months ended June 30, 2025 was primarily due to increases in employee-related costs of $12.5 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology costs of $1.7 million, and higher other operating costs of $0.7 million, partially offset by foreign exchange gain, net of hedging of $1.0 million. Gross margin in International Growth Markets increased by 100 bps during the six months ended June 30, 2025, primarily due to higher revenues and operational efficiencies during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

The increase in cost of revenues in International Growth Markets by $18.0 million for the nine months ended September 30, 2025 was primarily due to increases in employee-related costs of $17.2 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher technology and other operating costs of $3.0 million, partially offset by a foreign exchange gain, net of hedging of $2.2 million. Gross margin in International Growth Markets increased by 60 bps, primarily due to higher revenues and operational efficiencies during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

The increase in SG&A expenses of $19.3 million was primarily due to increases in employee-related costs of $18.0 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, higher investments in digital and generative AI capabilities of $1.6 million, higher sales and marketing costs of $0.9 million and higher other operating costs of $1.9 million. This increase in SG&A was partially offset by one-time restructuring and litigation settlement costs of $3.1 million incurred during the six months ended June 30, 2024, compared to the six months ended June 30, 2025.

Current wording

The increase in SG&A expenses by $36.8 million during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 was primarily due to increases in employee-related costs of $35.0 million on account of higher headcount and wage inflation, including incremental costs related to the acquisition of ITI Data, increase in investments in digital and generative AI capabilities of $2.1 million, higher sales and marketing costs of $1.0 million and other operating costs of $1.8 million. This increase in SG&A was partially offset by one-time restructuring and litigation settlement costs of $3.1 million incurred during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2025.

Previous wording

The increase in depreciation expense was $2.0 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to investments in infrastructure, technology assets and digital capabilities.

Current wording

The increase in depreciation and amortization expense by 9.4% during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 was primarily due to investments in infrastructure, technology assets and digital capabilities.

Previous wording

Income from Operations. Income from operations increased by $36.5 million, or 29.7%, from $123.0 million for the six months ended June 30, 2024 to $159.5 million for the six months ended June 30, 2025, primarily due to higher revenues and higher gross margins, partially offset by higher SG&A expenses during the six months ended June 30, 2025.

Current wording

Income from Operations. The increase in income from operations by 22.5% during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 was primarily due to higher revenues and gross margins, partially offset by higher SG&A expenses.

Previous wording

Other income, net increased from $7.4 million for the six months ended June 30, 2024 to $10.4 million for the six months ended June 30, 2025. The increase is primarily due to higher yield on our investments and reversal of certain contingent liabilities of $0.9 million that were no longer required during the six months ended June 30, 2025, partially offset by reversal of contingent consideration liability of $0.6 million related to our June 2022 acquisition of Inbound Media Group, LLC during the six months ended June 30, 2024.

Current wording

The increase in other income, net by $3.0 million during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 was primarily due to higher yield on our investments, and reversal of certain contingent liabilities of $0.9 million that were no longer required during the nine months ended September 30, 2025, partially offset by reversal of contingent consideration liability of $0.6 million related to our June 2022 acquisition of Inbound Media Group, LLC during the nine months ended September 30, 2024.

Previous wording

Income Tax Expense. The effective tax rate decreased from 22.6% during the six months ended June 30, 2024 to 19.5% during the six months ended June 30, 2025. We recorded income tax expense of $32.0 million and $27.6 million for the six months ended June 30, 2025 and 2024, respectively. The increase in income tax expense was primarily driven by higher profit and an increase in non-deductible expenses, partially offset by lower state taxes and higher excess tax benefits during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Income Tax Expense. The effective tax rate decreased from 22.6% during the nine months ended September 30, 2024 to 20.3% during the nine months ended September 30, 2025. We recorded income tax expense of $48.5 million and $43.1 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in income tax expense was primarily as a result of higher profit and an increase in non-deductible expenses, partially offset by lower state taxes and higher excess tax benefits during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

As of June 30, 2025 and December 31, 2024, we had $353.3 million and $340.6 million, respectively, in cash, cash equivalents and short-term investments, of which $315.7 million and $296.0 million, respectively, is located in foreign jurisdictions that upon distribution may be subject to withholding and other taxes. We periodically evaluate opportunities to distribute cash among our group entities to fund our operations, expand our business and make strategic acquisitions in the United States and other geographies, and as and when we decide to distribute, we may have to accrue additional taxes in accordance with local tax laws, rules and regulations in the relevant foreign jurisdictions.

Current wording

As of September 30, 2025 and December 31, 2024, we had $390.1 million and $340.6 million, respectively, in cash, cash equivalents and short-term investments, of which $349.7 million and $296.0 million, respectively, is located in foreign jurisdictions that upon distribution may be subject to withholding and other taxes. We periodically evaluate opportunities to distribute cash among our group entities to fund our operations, expand our business and make strategic acquisitions in the United States and other geographies, and as and when we decide to distribute, we may have to accrue additional taxes in accordance with local tax laws, rules and regulations in the relevant foreign jurisdictions.

Previous wording

Operating Activities: Net cash provided by operating activities was $112.6 million during the six months ended June 30, 2025, compared to $53.0 million during six months ended June 30, 2024, reflecting higher cash earnings and lower working capital needs. The major drivers contributing to the increase of $59.6 million year-over-year included the following:

Current wording

Operating Activities: Net cash provided by operating activities was $233.3 million during the nine months ended September 30, 2025, compared to $163.2 million during nine months ended September 30, 2024, reflecting higher cash earnings and lower working capital needs. The major drivers contributing to the increase of $70.1 million year-over-year included the following:

Previous wording

•An increase in cash earnings including adjustments for non-cash and other items contributed higher cash flow of $44.0 million during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. These adjustments include fair value changes in investments, unrealized foreign currency exchange (gain)/loss, net, stock-based employee compensation, depreciation and amortization of long-lived assets and intangibles acquired in business combinations, among others.

Current wording

•An increase in cash earnings including adjustments for non-cash and other items contributed higher cash flow of $62.2 million during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. These adjustments include fair value changes in investments, unrealized foreign currency exchange (gain)/loss, net, stock-based employee compensation, depreciation and amortization of long-lived assets and intangibles acquired in business combinations, among others.

Previous wording

•Changes in accounts receivable, including advance billings, contributed lower cash flow of $19.0 million in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Collections in accounts receivable, including advance billings, was driven by revenue growth during the six months ended June 30, 2025. Our days sales outstanding were 64 days as of June 30, 2025, compared to 63 days as of June 30, 2024.

Current wording

•Changes in accounts receivable, including advance billings, driven by revenue growth, contributed lower cash flow of $18.6 million in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Our days sales outstanding were 63 days as of September 30, 2025, compared to 64 days as of September 30, 2024.

Previous wording

•Payment of contingent consideration related to our December 2021 acquisition of Clairvoyant AI, Inc. (“Clairvoyant”) during the six months ended June 30, 2024 contributed to a higher cash payout of $11.0 million, whereas no such payment occurred during the six months ended June 30, 2025.

Current wording

•Payment of contingent consideration related to our December 2021 acquisition of Clairvoyant AI, Inc. (“Clairvoyant”) contributed to a higher cash payout of $11.0 million during the nine months ended September 30, 2024, whereas no such payment occurred during the nine months ended September 30, 2025.

Previous wording

•Changes in other assets, accounts payables including other liabilities contributed to a lower cash payouts of $23.6 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

•Changes in other assets, accounts payables including other liabilities contributed to a lower cash payout of $15.5 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

Investing Activities: Net cash used for investing activities was $36.3 million for the six months ended June 30, 2025, compared to $43.2 million for the six months ended June 30, 2024. The decrease of $6.9 million was primarily due to lower net purchase of investments of $11.5 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This was partially offset by higher cash paid for capital expenditures, including investments in infrastructure, technology assets and digital capabilities of $4.0 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Investing Activities: Net cash used for investing activities was $82.6 million for the nine months ended September 30, 2025, compared to $94.5 million for the nine months ended September 30, 2024. The decrease of $11.9 million was primarily due to net cash used for business acquisition of $24.5 million during the nine months ended September 30, 2024 whereas no such payment occurred during the nine months ended September 30, 2025. This was partially offset by higher net purchase of investments of $6.6 million and higher cash paid for capital expenditures, including investments in infrastructure, technology assets and digital capabilities of $5.4 million during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

Financing Activities: Net cash used for financing activities was $84.6 million during the six months ended June 30, 2025, compared to $27.3 million during the six months ended June 30, 2024. The increase of $57.3 million was primarily due to net repayments of borrowings of $28.5 million during the six months ended June 30, 2025, compared to net proceeds from borrowings of $135.0 million during the six months ended June 30, 2024. This was partially offset by lower purchases of treasury stock of $101.0 million under our share repurchase programs during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Financing Activities: Net cash used for financing activities was $147.9 million during the nine months ended September 30, 2025, compared to $52.2 million during the nine months ended September 30, 2024. The increase of $95.7 million was primarily due to lower net proceeds from borrowings of $78.7 million during the nine months ended September 30, 2025, compared to nine months ended September 30, 2024 and higher purchases of treasury stock of

Previous wording

Subsequent to the end of the second quarter of 2025, on July 29, 2025, we entered into an Accelerated Share Repurchase Agreement with Citibank to repurchase shares of our common stock for an aggregate purchase price of $125 million, as part of our previously announced 2024 Repurchase Program of $500 million. We plan to fund the repurchase with available cash on hand and/or borrowings from our credit facility.

Current wording

On July 29, 2025, we entered into a new supplemental confirmation to the prior Master Accelerated Share Repurchase Confirmation (together, the “2025 ASR Agreement”) with Citibank to repurchase shares of our common stock for an aggregate purchase price of $125 million, as part of our 2024 Repurchase Program of $500 million. We funded the repurchase with available cash on hand and borrowing from our credit facility.

Previous wording

We incurred$27.4 million of capital expenditures during the six months ended June 30, 2025. We expect to incur total capital expenditures of between$50.0 million to$55.0 million in fiscal 2025, primarily to meet our growth requirements, including additions to our facilities and infrastructure, as well as investments in technology applications, product development, and other digital technologies.

Current wording

We incurred$41.7 million of capital expenditures during the nine months ended September 30, 2025. We expect to incur total capital expenditures of between$50.0 million to$55.0 million in fiscal 2025, primarily to meet our growth requirements, including additions to our facilities and infrastructure, as well as investments in technology applications, product development, and other digital technologies.