Genpact LTD
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
G$42.27+2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001398659-24-000080
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001398659-24-000088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 166 current paragraphs.
81 unchanged; 54 reworded; 18 added; 0 removed; 1 previous and 13 current paragraphs rearranged.
Tables are not compared: 11 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Other operating (income) expense, net. Other operating income (net of expense) was $0.1 million in the second quarter of 2024, compared to $5.0 million in the second quarter of 2023. The decrease was primarily due to a gain recorded in the second quarter of 2023 upon the successful termination of a lease that was abandoned as part of a 2022 restructuring.
Current report
Six months ended June 30, 2024 Compared to the Six months ended June 30, 2023
Current report
Net revenues. Our net revenues were $2,307.4 million in the first half of 2024, up $112.6 million, or 5.1%, from $2,194.8 million in the first half of 2023.
Current report
Our average headcount increased by 10.5% to approximately 132,100 in the first half of 2024 from approximately 119,500 in the first half of 2023.
Current report
Net revenues from Digital Operations services in the first half of 2024 were $1,237.6 million, up $77.6 million, or 6.7%, from $1,159.9 million in the first half of 2023, primarily due to ramp-ups of services for new large deals signed in 2023.
Current report
Gross margin. Our gross margin increased from 34.6% in the first half of 2023 to 35.2% in the first half of 2024. The increase in gross margin was primarily due toimproved operating leverage, lower stock-based compensation expense and lower depreciation and amortization expense, partially offset by wage inflation inthe first half of 2024 compared to the first half of 2023.
Current report
Selling, general and administrative (SG&A) expenses. SG&A expenses as a percentage of total net revenues increased from 20.3% in thefirst half of 2023 to 20.6% in thefirst half of 2024. SG&A expenses were $474.7 million in thefirst half of 2024, up $28.8 million, or 6.5%, from $445.9 million in thefirst half of 2023. The increase in SG&A expenses was primarily due toan increase in our sales and marketing spend to support business growth, a higher allowance for credit losses and wage inflation in the first half of 2024 compared to the first half of 2023. This increase was partially offsetby lower stock-based compensation expense and operating leverage in support functions in thefirst half of 2024 compared to thefirst half of 2023.
Current report
Amortization of acquired intangible assets. Amortization of acquired intangible assets was $13.5 million in the first half of 2024, down $3.0 million, or 18.3%, from $16.5 million in the first half of 2023. This decrease was primarily due to the completion of useful lives of intangible assets acquired in prior periods.
Current report
Income from operations. As a result of the foregoing factors, income from operations as a percentage of total net revenues increased from 13.8% in the first half of 2023 to 14.3% in the first half of 2024. Income from operations increased by $27.8 million from $302.4 million in the first half of 2023 to $330.2 million in the first half of 2024, primarily due to a higher gross margin in the first half of 2024 compared to the first half of 2023.
Current report
Other income (expense), net. Our other income (net of expense) was $9.0 million in the first half of 2024 compared to $7.5 million in the first half of 2023. This change was primarily driven by higher sublease income and related corporate transactions in the first half of 2024 compared to the first half of 2023.
Current report
Income tax expense. Our income tax expense was $79.8 million in the first half of 2024, up from $66.5 million in the first half of 2023, representing an ETR of 25.0% in the first half of 2024, up from 23.0% in the first half of 2023. The increase in our ETR was primarily driven by lower tax deductions related to stock-based compensation in the first half of 2024 compared to the first half of 2023.
Current report
Net income. As a result of the foregoing factors, net income as a percentage of total net revenues was 10.4% in the first half of 2024, up from 10.1% in the first half of 2023. Net income increased by $16.6 million from $222.4 million in the first half of 2023 to $238.9 million in the first half of 2024, primarily due to higher income from operations, partially offset by higher income tax expense in the first half of 2024 compared to the first half of 2023.
Current report
Adjusted income from operations. Adjusted income from operations (“AOI”) increased by $15.3 million from $365.0 million in thefirst half of 2023 to $380.3 million in thefirst half of 2024. Our AOI margin decreased to 16.5% in the first half of 2024 from 16.6% in the first half of 2023, largely due to higher sales and marketing expenses, partially offset bygeneral operating leverage.
Current report
AOI of our Financial Services segment increased to $100.1 million in the first half of 2024 from $92.3 million in the first half of 2023, largely driven by higher revenues and operating efficiency in the first half of 2024 compared to the first half of 2023, partially offset by the impact of wage inflation. AOI of our Consumer and Healthcare segment increased to $137.5 million in the first half of 2024 from $115.3 million in the first half of 2023, largely driven by higher revenue from large deal ramp-ups and improved efficiencies, partially offset by the impact of wage inflation. AOI of our High Tech and Manufacturing segment increased to $143.6 million in the first half of 2024 from $133.9 million in the first half of 2023, largely driven by higher revenue and the reduction in scope of a low margin priority account in 2023, partially offset by the impact of wage inflation.
Current report
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 June 30, 2024, the amount outstanding under the 2024 Senior Notes, net of debt amortization expense of $4.3 million, was $395.7 million, which is payable on June 4, 2029.
Current report
1—“Unaudited Consolidated Financial Statements” above.
Current report
Recent Accounting Pronouncements
Current report
For a description of recent accounting pronouncements, see Note 2(m)—“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, 2023.
Reworded paragraphs (54)
Previous wording
•our relationship with the General Electric Company ("GE") and our ability to maintain relationships with former GE businesses;
Current wording
•our ability to maintain relationships with former General Electric Company businesses;
Previous wording
•financing terms, including changes in the Secured Overnight Financing Rate ("SOFR") and changes to our credit ratings;
Current wording
•financing terms, including the Secured Overnight Financing Rate ("SOFR") and changes to our credit ratings;
Previous wording
Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence. In the first quarter of 2024, continued economic and geopolitical uncertainty in many markets around the world, including with respect to monetary policy and slowing global economic growth, impacted our business and may continue to impact our business in the future.
Current wording
Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence. In the second quarter of 2024, continued economic and geopolitical uncertainty in many markets around the world, including with respect to monetary policy and slowing global economic growth, impacted our business and may continue to impact our business in the future.
Previous wording
The ongoing conflict between Russia and Ukraine and actions taken by the United States and other countries in response, including the imposition of sanctions, as well as the ongoing conflict between Hamas and Israel, have contributed to and may continue to exacerbate supply chain disruption and inflation, regional instability and geopolitical tensions. While we do not have operations in Russia or Ukraine, it is difficult to anticipate the future impacts of the Russia-Ukraine conflict on our business or our clients’ businesses. We have limited operations in Israel and continue to closely monitor the situation there. To date, we do not believe the conflicts between Russia and Ukraine and Hamas and Israel, or the economic or political impacts of these conflicts, have had a material impact on our business, financial position or operations, but we plan to continue to monitor both conflicts.
Current wording
The ongoing conflict between Russia and Ukraine and actions taken by the United States and other countries in response, including the imposition of sanctions, as well as the ongoing conflict in the Middle East, have contributed to and may continue to exacerbate supply chain disruption and inflation, regional instability and geopolitical tensions. While we do not have operations in Russia or Ukraine, it is difficult to anticipate the future impacts of the Russia-Ukraine conflict on our business or our clients’ businesses. We have limited operations in Israel and continue to closely monitor the situation in the Middle East. To date, we do not believe the conflicts in Ukraine or the Middle East, or the economic or political impacts of these conflicts, have had a material impact on our business, financial position or operations, but we plan to continue to monitor both conflicts.
Previous wording
We are a global professional services firm that makes business transformation real. We drive digital-led innovation and run digitally-enabled intelligent operations for our clients, guided by our experience running thousands of processes for hundreds of Fortune Global 500 clients. We have over 131,000 employees serving clients in key industry verticals from more than 35 countries. Our registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.
Current wording
We are a global professional services firm that makes business transformation real. We drive digital-led innovation and run digitally-enabled intelligent operations for our clients, guided by our experience running thousands of processes for hundreds of Fortune Global 500 clients. We have over 135,200 employees serving clients in key industry verticals from more than 35 countries. Our registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.
Previous wording
In the quarter ended March 31, 2024, we recorded net revenues of $1,131.2 million, of which $523.8 million, or 46.3%, was from Data-Tech-AI services, with the remaining $607.4 million, or 53.7%, from Digital Operations services.
Current wording
In the quarter ended June 30, 2024, we recorded net revenues of $1,176.2 million, of which $546.0 million, or 46.4%, was from Data-Tech-AI services, with the remaining $630.2 million, or 53.6%%, from Digital Operations services.
Previous wording
For a description of ourcritical 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, 2023. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2024 from those described in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
For a description of ourcritical 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, 2023. There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2024 from those described in our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
The following table sets forth certain data from our consolidated statements of income for the three months ended March 31, 2023 and 2024.
Current wording
The following table sets forth certain data from our consolidated statements of income for the three and six months ended June 30, 2023 and 2024.
Previous wording
1 We disaggregate our revenue as revenue from either Digital Operations services or Data-Tech-AI services based on the nature of the services provided. During the first quarter of 2024, we realigned as Data-Tech-AI services certain services that had previously been designated as Digital Operations services based on the nature of work performed and the mode of delivery for these particular services, which have evolved over time. Accordingly, we have updated the classification of revenue derived from Digital Operations services and Data-Tech-AI services for the first quarter of 2023 to present comparable information. For additional information, see Note 19—“Net revenues” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Current wording
1 We disaggregate our revenue as revenue from either Digital Operations services or Data-Tech-AI services based on the nature of the services provided. During the first quarter of 2024, we realigned as Data-Tech-AI services certain services that had previously been designated as Digital Operations services based on the nature of work performed and the mode of delivery for these particular services, which have evolved over time. Accordingly, we have updated the classification of revenue derived from Digital Operations services and Data-Tech-AI services for the three and six months ended June 30, 2023 to present comparable information. For additional information, see Note 19—“Net revenues” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Previous wording
Net revenues. Our net revenues were $1,131.2 million in the first quarter of 2024, up $41.9 million, or 3.8%, from $1,089.3 million in the first quarter of 2023.
Current wording
Net revenues. Our net revenues were $1,176.2 million in the second quarter of 2024, up $70.7 million, or 6.4%, from $1,105.5 million in the second quarter of 2023.
Previous wording
Adjusted for foreign exchange, primarily the impact of changes in the values of the Japanese yen, Australian dollar, Chinese yuan and the South African rand against the U.S. dollar, our net revenues grew 4.3% in the first quarter of 2024 compared to the first quarter of 2023 on a constant currency 2 basis. We provide information about our revenue growth on a constant currency 2 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. Total net revenues on a constant currency 2 basis are calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates and adjusted for hedging gains/losses.
Current wording
Adjusted for foreign exchange, primarily the impact of changes in the values of the Japanese yen, Australian dollar, Chinese yuan, U.K pound sterling, Polish zloty and Indian rupee against the U.S. dollar, our net revenues grew 6.8% in the second quarter of 2024 compared to the second quarter of 2023 on a constant currency 2 basis. We provide information about our revenue growth on a constant currency 2 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. Total net revenues on a constant currency 2 basis are calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates and adjusted for hedging gains/losses.
Previous wording
Our average headcount increased by 9.7% to approximately 130,500 in the first quarter of 2024 from approximately 119,000 in the first quarter of 2023.
Current wording
Our average headcount increased by 11.4% to approximately 133,700 in the second quarter of 2024 from approximately 120,000 in the second quarter of 2023.
Previous wording
Net revenues from Digital Operations services in the first quarter of 2024 were $607.4 million, up $28.0 million, or 4.8%, from $579.4 million in the first quarter of 2023, primarily due to ramp-ups from certain new large deals signed in 2023.
Current wording
Net revenues from Digital Operations services in the second quarter of 2024 were $630.2 million, up $49.6 million, or 8.5%, from $580.6 million in the second quarter of 2023, primarily due to ramp-ups of services for new large deals signed in 2023.
Previous wording
Gross margin. Our gross margin increased from 34.0% in the first quarter of 2023 to 35.0% in the first quarter of 2024. The increase in gross margin was primarily due to lower upfront investments made in the first quarter of 2024 compared to the first quarter of 2023 to support large deal wins and lower severance and travel related expenses in the first quarter of 2024 compared to the first quarter of 2023. This increase was partially offset by wage inflation in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Gross margin. Our gross margin increased from 35.3% in the second quarter of 2023 to 35.4% in the second quarter of 2024. The increase in gross margin was primarily driven by improved operating leverage and lower stock-based compensation expense, partially offset by wage inflation in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Selling, general and administrative (SG&A) expenses. SG&A expenses as a percentage of total net revenues increased from 19.9% in the first quarter of 2023 to 20.8% in the first quarter of 2024. SG&A expenses were $235.0 million in the first quarter of 2024, up $18.5 million, or 8.6%, from $216.5 million in the first quarter of 2023. The increase in SG&A expenses was primarily due to increased investments in our sales and marketing teams to support growth, an increase in travel related expenses and an increase in allowances for credit losses during the first quarter of 2024 compared to the first quarter of 2023. This increase was partially offset by lower stock-based compensation expense in the first quarter of 2024 than in the first quarter of 2023.
Current wording
Selling, general and administrative (SG&A) expenses. SG&A expenses as a percentage of total net revenues decreased from 20.8% in the second quarter of 2023 to 20.4% in the second quarter of 2024. SG&A expenses were $239.6 million in the second quarter of 2024, up $10.2 million, or 4.5%, from $229.4 million in the second quarter of 2023. The increase in SG&A expenses was primarily due toan increase in our sales and marketing spend to support growth as well as higher professional servicesand travel related expensesin the second quarter of 2024 compared to the second quarter of 2023. This increase was partially offset bylower stock-based compensation expense and operating leverage in support functions in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Amortization of acquired intangibles. Amortization of acquired intangibles was $6.9 million in the first quarter of 2024, down $1.3 million, or 16.1%, from $8.3 million in the first quarter of 2023. This decrease was primarily due to the completion of useful lives of intangibles acquired in prior periods.
Current wording
Amortization of acquired intangible assets. Amortization of acquired intangible assets was $6.6 million in the second quarter of 2024, down $1.7 million, or 20.6%, from $8.3 million in the second quarter of 2023. This decrease was primarily due to the completion of useful lives of intangible assets acquired in prior periods.
Previous wording
Income from operations. As a result of the foregoing factors, income from operations as a percentage of total net revenues increased from 13.3% in thefirst quarter of 2023 to 14.1% in thefirst quarter of 2024. Income from operations increased by $14.9 million from $145.1 million in the first quarter of 2023 to $160.0 million in the first quarter of 2024, primarily due to a higher gross margin and higher other operating (income) expense, net, partially offset by higher selling, general and administrative expenses in thefirst quarter of 2024 compared to thefirst quarter of 2023.
Current wording
Income from operations. As a result of the foregoing factors, income from operations as a percentage of total net revenues increased from 14.2% in the second quarter of 2023 to 14.5% in the second quarter of 2024. Income from operations increased by $12.9 million from $157.3 million in the second quarter of 2023 to $170.3 million in the second quarter of 2024, primarily due to higher revenue and a higher gross margin in the second quarter of 2024 than in the second quarter of 2023.
Previous wording
Foreign exchange gains (losses), net. We recorded a net foreign exchange gain of $0.8 million in the first quarter of 2024 compared to a net foreign exchange loss of $1.0 million in the first quarter of 2023. The gain in the first quarter of 2024 resulted primarily from the depreciation of the Indian rupee against the U.S. dollar and the loss in the first quarter of 2023 resulted primarily from the appreciation of the Costa Rican colon against the U.S. dollar.
Current wording
Foreign exchange gains (losses), net. We recorded a net foreign exchange gain of $2.5 million in the second quarter of 2024 compared to a net foreign exchange gain of $1.8 million in the second quarter of 2023. The gain in the second quarter of 2024 resulted primarily from gains on fair value hedges and the depreciation of the Indian rupee against the U.S. dollar. The gain in the second quarter of 2023 resulted primarily from gains on fair value hedges, partially offset by the appreciation of the Indian rupee against the U.S. dollar.
Previous wording
Interest income (expense), net. Our interest expense (net of interest income) was $10.2 million in the first quarter of 2024, up $0.6 million from $9.6 million in the first quarter of 2023, primarily due to a $2.1 million increase in interest expense, largely offset by a $1.5 million increase in interest income. Our interest income increased from $4.9 million in thefirst quarter of 2023 to $6.4 million in thefirst quarter of 2024, primarily due to higher interest rates on deposits in thefirst quarter of 2024 compared to thefirst quarter of 2023. The increase in interest expense was largely due to a higher average benchmark-based rate on our revolving credit facility and term loan as well as lower gains on interest rate swaps entered into to hedge interest rate exposure on our term loan, partially offset by lower drawdown of our revolving credit facility in the first quarter of 2024 compared to thefirst quarter of 2023, which we discuss in the section titled “Liquidity and Capital Resources—Financial Condition” below. The weighted average rate of interest on our debt, including the net impact of interest rate swaps, increased from 3.3% in the first quarter of 2023 to 4.2% in the first quarter of 2024.
Current wording
Interest income(expense), net. Our interest expense (net of interest income) was $13.5 million in the second quarter of 2024, up $1.4 million from $12.1 million in the second quarter of 2023, primarily due to a $3.9 million increase in interest expense, largely offset by a $2.5 million increase in interest income. Our interest income increased from $3.5 million in the second quarter of 2023 to $6.0 million in the second quarter of 2024, primarily due to higher interest rates and higher cash balances in the second quarter of 2024 compared to the second quarter of 2023. The increase in interest expense was largely due to (i) incremental interest expense on the senior notes issued in June 2024, (ii) a higher average benchmark-based rate on our revolving credit facility and term loan, and (iii) lower gains on interest rate swaps entered into to hedge interest rate exposure on our term loan. This was partially offset by lower usage of our revolving credit facility and a lower term loan balance in the second quarter of 2024 compared to the second quarter of 2023. The weighted average rate of interest on our debt, including the net impact of interest rate swaps, increased from 3.3% in the second quarter of 2023 to 4.4% in the second quarter of 2024. See the section titled “Liquidity and Capital Resources—Financial Condition” for further discussion.
Previous wording
Other income (expense), net. Our other income (net of expense) was $5.8 million in the first quarter of 2024 compared to other income (net of expense) of $4.0 million in the first quarter of 2023. This change was primarily due to a larger gain on changes in the fair value of assets in our deferred compensation plan in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Other income (expense), net. Our other income, net of expense, was $3.3 million in the second quarter of 2024, down from $3.4 million in the second quarter of 2023, primarily due to a lower gain on changes in the fair value of assets in our deferred compensation plan, largely offset by higher miscellaneous receipts in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Income tax expense. Our income tax expense was $39.4 million in the first quarter of 2024, up from $32.4 million in the first quarter of 2023, representing an effective tax rate (“ETR”) of 25.2% in the first quarter of 2024, up from 23.4% in the first quarter of 2023. The increase in our ETR in the first quarter of 2024 compared to the first quarter of 2023 was primarily driven by lower tax deductions on stock-based compensation expense.
Current wording
Income tax expense. Our income tax expense was $40.4 million in the second quarter of 2024, up from $34.1 million in the second quarter of 2023, representing an effective tax rate (“ETR”) of 24.9% in the second quarter of 2024, up from 22.7% in the second quarter of 2023. The increase in our ETR was primarily driven by lower tax deductions related to stock-based compensation and other discrete items in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Net income. As a result of the foregoing factors, net income as a perc entage of total net revenues was 10.3% in the first quarter of 2024, up from 9.7% in the first quarterof 2023. Net income increased from $106.1 million in the first quarter of 2023 to $116.9 million in the first quarter of 2024, primarily due to higher income from operations, partially offset by higher income tax expense in thefirst quarter of 2024 compared to the first quarter of 2023.
Current wording
Net income. As a result of the foregoing factors, net income as a percentage of total net revenues was 10.4% in the second quarter of 2024, down from 10.5% in the second quarterof 2023. Net income increased from $116.3 million in the second quarter of 2023 to $122.0 million in the second quarter of 2024, primarily due to higher income from operations, partially offset by higher income tax expense in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Adjusted income from operations. Adjusted income from operations (“AOI”) increased by $2.9 million from $179.0 million in the first quarter of 2023 to $181.9 million in the first quarter of 2024. Our AOI margin decreased from 16.4% in the first quarter of 2023 to 16.1% in the first quarter of 2024, largely due to increased investment in support functions to support growth and anincrease in allowances for credit lossesin thefirst quarter of 2024 compared tothe first quarter of 2023.
Current wording
Adjusted income from operations. Adjusted income from operations (“AOI”) increased by $12.5 million from $186.0 million in the second quarter of 2023 to $198.4 million in the second quarter of 2024. Our AOI margin increased from 16.8% in the second quarter of 2023 to 16.9% in the second quarter of 2024, largely due to improved operational efficiencies in the second quarter of 2024 compared tothe second quarter of 2023.
Previous wording
AOI of our Financial Services segment increased to $47.0 million in the first quarter of 2024 from $45.6 million in the first quarter of 2023, primarily due to higher revenues in the first quarter of 2024 compared to the first quarter of 2023. AOI of our Consumer and Healthcare segment increased to $66.8 million in the first quarter of 2024 from $56.3 million in the first quarter of 2023, largely due to higher revenues and improved efficiencies in the first quarter of 2024 compared to the first quarter of 2023. AOI of our High Tech and Manufacturing segment increased to $69.0 million in the first quarter of 2024 from $64.3 million in the first quarter of 2023, primarily driven by higher revenue and the reduction in scope of a low margin priority account in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
AOI of our Financial Services segment increased to $53.1 million in the second quarter of 2024 from $46.7 million in the second quarter of 2023, primarily due to higher revenues and operating efficiency in the second quarter of 2024 compared to the second quarter of 2023. AOI of our Consumer and Healthcare segment increased to $70.7 million in the second quarter of 2024 from $59.0 million in the second quarter of 2023, largely due to higher revenue from large deal ramp-ups and operating efficiencies in the second quarter of 2024 compared to the second quarter of 2023. AOI of our High Tech and Manufacturing segment increased to $74.6 million in the second quarter of 2024 from $69.6 million in the second quarter of 2023, primarily driven by higher revenue and the reduction in scope of a low margin priority account, partially offset by productivity commitments in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Net revenues from Data-Tech-AI services in the first quarter of 2024 were $523.8 million, up $13.8 million, or 2.7%, from $510.0 million in the first quarter of 2023. This increase was largely driven by an increase in revenue from our data and analytics solutions embedded in our finance and accounting, supply chain and risk management services in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Net revenues from Data-Tech-AI services in the first half of 2024 were $1,069.9 million, up $35.0 million, or 3.4%, from $1,034.9 million in the first half of 2023. This increase was largely driven by an increase in revenue from our data and analytics solutions embedded in our finance and accounting, supply chain and risk management services in the first half of 2024 compared to the first half of 2023.
Previous wording
Net revenues from our Financial Services segment increased by 2.7% in the first quarter of 2024 compared to the first quarter of 2023, largely due to large deal ramp-ups and growth in our financial crimes services, partially offset by a reduction in discretionary spending on technology services by existing clients in the first quarter of 2024 compared to the first quarter of 2023. Net revenues from our Consumer and Healthcare segment increased by 4.6% in the first quarter of 2024 compared to the first quarter of 2023, largely driven by ramp-ups of client deals signed in 2023 and an increase in supply chain engagements in the first quarter of 2024 compared to the first quarter of 2023. Net revenues from our High Tech and Manufacturing segment increased by 4.0% in the first quarter of 2024 compared to the first quarter of 2023, largely driven by ramp-ups of recently signed client deals, partially offset by the impact of a reduction in deal scope for a large client in 2023. Net revenues from "Business held for sale" in the table above represents revenues from the business we had previously classified as held for sale with effect from April 1, 2022 as part of a series of strategic actions we took in 2022 to focus our business on the areas where we see the greatest opportunities for growth and to deprioritize assets that no longer fit with our long-term strategy. The sale of the business we had previously classified as held for sale was completed in the first quarter of 2023. For additional information, see Note 7 “Assets and liabilities held for sale” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Current wording
Net revenues from our Financial Services segment increased by 4.3% in the first half of 2024 compared to the first half of 2023, primarily due to large deal ramp-ups, partially offset by a reduction in services provided to a client in the banking vertical. Net revenues from our Consumer and Healthcare segment increased by 6.0% in thefirst half of 2024 compared to thefirst half of 2023, primarily driven by ramp-ups of services from large deals signed in 2023 and recently signed deals as well as an increase in supply chain engagements. Net revenues from our High Tech and Manufacturing segment increased by 4.9% in thefirst half of 2024 compared to thefirst half of 2023, largely driven by ramp-ups of client deals signed in 2023, partially offset by the impact of a reduction in deal scope for a large client in 2023. Net revenues from "Business held for sale" in the table above represent revenues from a business we had previously classified as held for sale with effect from April 1, 2022 as part of a series of actions we took in 2022 to focus our business on emerging solutions where we see the greatest opportunities for growth and to deprioritize assets that no longer fit with our long-term strategy. The sale of the business we had previously classified as held for sale was completed in the first quarter of 2023. For additional information, see Note 7—“Assets and liabilities held for sale” and Note 18—“Segment reporting” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Previous wording
Cost of revenue. Cost of revenue was $734.8 million in the first quarter of 2024, up $15.7 million, or 2.2%, from $719.1 million in thefirst quarter of 2023. The increase in cost of revenue in the first quarter of 2024 compared to the first quarter of 2023 was primarily due to (i) an increase in our operational headcount to support revenue growth, (ii) wage inflation and (iii) higher infrastructure costs in the first quarter of 2024 compared to the first quarter of 2023. This increase was partially offset by lower consulting expenses, lower severance and travel related expenses, a decrease in depreciation and amortization expense, and lower stock-based compensation expense in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Cost of revenue. Cost ofrevenue was $1,494.6 million in the first half of 2024, up $60.0 million, or 4.2%, from $1,434.6 million in the first half of 2023. The increase in cost of revenue in the first half of 2024 compared to the first half of 2023 was primarily due to (i) an increase in our operational headcount to support revenue growth, (ii) wage inflation and (iii) higher infrastructure expenses in the first half of 2024 compared to the first half of 2023. This increase was partially offset by lower consulting expenses, lower stock-based compensation expense and lower depreciation and amortization expense in the first half of 2024 compared to the first half of 2023.
Previous wording
Other operating (income) expense, net. Other operating income (net of expense) was $5.5 million in the first quarter of 2024, compared to other operating expense (net of income) of $0.4 million in the first quarter of 2023. The change in other operating income/expense was primarily due to the receipt of $1.5 million upon the redemption of a loan note associated with the sale of a business previously classified as held for sale and the waiver by a vendor of a liability during thefirst quarter of 2024. We recorded a loss of $0.8 million in the first quarter of 2023 on the sale of a business previously classified as held for sale. For additional information, see Note 20—"Other operating (income) expense, net" and Note 7—“Assets and liabilities held for sale” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Current wording
Other operating (income) expense, net. Other operating income (net of expense) was $5.5 million in the first half of 2024 compared to $4.6 million in the first half of 2023. The change in other operating income (net of expense) was primarily due to the receipt of $1.5 million upon the redemption of a loan note associated with the sale of a business previously classified as held for sale and the waiver by a vendor of a liability in the first half of 2024. Additionally, a gain was recorded in the first half of 2023 upon the successful termination of a lease that was abandoned as part of the 2022 restructuring described above. For additional information, see Note 7—"Assets and liabilities held for sale" and Note 24—“Restructuring” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Previous wording
We calculate AOI as net income, excluding (i) stock-based compensation, (ii) amortization and impairment of acquired intangible assets, (iii) foreign exchange (gains)/losses, (iv) any loss or gain from businesses held for sale, (v) interest (income) expense, and (vi) income tax expense, as we believe that our results after taking into account these adjustments more accurately reflect our ongoing operations. To calculate AOI margin, we divided AOI (as calculated above) by total revenue, excluding revenue from the business previously classified as held for sale. For additional information, see Note 18—“Segment reporting” under Part I, Item 1—“Unaudited Consolidated Finan cial Statements” above.
Current wording
We calculate AOI as net income, excluding (i) stock-based compensation, (ii) amortization and impairment of acquired intangible assets, (iii) foreign exchange (gain)/loss, (iv) restructuring (income) expense, (v) any loss (gain) on the sale of businesses classified as held for sale, (vi) interest (income) expense, (vii) operating losses from businesses classified as held for sale, and (viii) income tax expense, as we believe that our results after taking into account these adjustments more accurately reflect our ongoing operations. To calculate AOI margin, we divided AOI (as calculated above) by total revenue, excluding revenue from the business previously classified as held for sale. For additional information, see Note 18—“Segment reporting” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Previous wording
During the second quarter of 2022, management approved a plan to divest a business (the "Business") that was a part of our Consumer and Healthcare segment, which divestiture was completed in the first quarter of 2023. As a result, we classified the assets and liabilities of the Business as held for sale and recorded net revenues of $0.5 million and a loss of $1.2 million for the first quarter of 2023. The sale of the Business was completed in the first quarter of 2023. Accordingly, there was no revenue or operating loss in the first quarter of 2024 from the Business. We also recorded a loss of $0.8 million in the first quarter of 2023 on the sale of the Business. For additional information, see Note 7— "Assets and liabi lities held for sale" and Note 18—“Segment reporting” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Current wording
During the second quarter of 2022, management approved a plan to divest a business (the "Business") that was part of our Consumer and Healthcare segment, which divestiture was completed in the first quarter of 2023. As a result, we classified the assets and liabilities of the Business as held for sale and recorded net revenues of $0.5 million and a loss of $1.2 million in the first half of 2023. The sale of the Business was completed in the first quarter of 2023. Accordingly, there was no revenue or operating loss in the first half of 2024 from the Business. We also recorded a loss of $0.8 million in the first half of 2023 on the sale of the Business. For additional information, see Note 7— "Assets and liabilities held for sale" and Note 18—“Segment reporting” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Previous wording
AOI for “Others” in the table above primarily represents the adjustment of allowances for credit losses and over- or under-absorption of overheads, none of which is allocated to any individual segment for management's internal reporting purposes. AOI for "Business held for sale" in the table above primarily represents the loss attributable to a business previously classified as held for sale. See Note 7—“Assets and liabilities held for sale” and Note 18—“Segment reporting” under Part I, Item 1— “Unaudited Consolidated Financial Statements” above.
Current wording
AOI for “Others” in the table above primarily represents the adjustment of allowances for credit losses and over- or under-absorption of corporate overheads, none of which is allocated to any individual segment for management's internal reporting purposes. AOI for "business classified as held for sale" in the table above primarily represents the loss attributable to a business previously classified as held for sale. See Note 7—“Assets and liabilities held for sale” and Note 18—“Segment reporting” under Part I, Item 1— “Unaudited Consolidated Financial Statements” above.
Previous wording
On February 9, 2023, our Board of directors approved a 10% increase in our quarterly cash dividend from $0.125 per common share to $0.1375 per common share, representing an annual dividend of $0.55 per common share for 2023, up from $0.50 per common share in 2022. On March 24, 2023, we paid a dividend of $0.1375 per share, amounting to $25.3 million in the aggregate, to shareholders of record as of March 10, 2023.
Current wording
On February 9, 2023, our board of directors approved a 10% increase in our quarterly cash dividend from $0.125 per common share to $0.1375 per common share, representing an annual dividend of $0.55 per common share for 2023, up from $0.50 per common share in 2022. On March 24, 2023 and June 26, 2023, we paid a dividend of $0.1375 per share, amounting to $25.3 million and $25.0 million in the aggregate, to shareholders of record as of March 10, 2023 and June 9, 2023, respectively.
Previous wording
On February 8, 2024, our board of directors approved an 11% increase in our quarterly cash dividend from $0.1375 per common share to $0.1525 per common share, representing a planned annual dividend of $0.61 per common share for 2024, up from $0.55 per common share in 2023. On March 26, 2024, we paid a dividend of $0.1525 per share, amounting to $27.5 million in the aggregate, to shareholders of record as of March 11, 2024.
Current wording
On February 8, 2024, our board of directors approved an 11% increase in our quarterly cash dividend from $0.1375 per common share to $0.1525 per common share, representing a planned annual dividend of $0.61 per common share for 2024, up from $0.55 per common share in 2023. On March 26, 2024 and June 26, 2024, we paid a dividend of $0.1525 per share, amounting to $27.5 million and $27.3 million in the aggregate, to shareholders of record as of March 11, 2024 and June 10, 2024, respectively.
Previous wording
As of March 31, 2024, $476.2 million of our $478.4 million in cash and cash equivalents was held by our foreign (non-Bermuda) subsidiaries. $128.0 million of this cash was held by foreign subsidiaries for which we expect to incur and have accrued a deferred tax liability on the repatriation of $92.3 million of retained earnings. $245.0 million of the cash and cash equivalents was held by foreign subsidiaries in jurisdictions where no tax is expected to be imposed upon repatriation. The remaining $103.2 million in cash and cash equivalents held by foreign subsidiaries is being indefinitely reinvested.
Current wording
As of June 30, 2024, $909.3 million of our $914.2 million in cash and cash equivalents was held by our foreign (non-Bermuda) subsidiaries. $136.2 million of this cash was held by foreign subsidiaries for which we expect to incur and have accrued a deferred tax liability on the repatriation of $80.4 million of retained earnings. $288.0 million of the cash and cash equivalents was held by foreign subsidiaries in jurisdictions where no tax is expected to be imposed upon repatriation. The remaining $485.1 million in cash and cash equivalents held by foreign subsidiaries is being indefinitely reinvested.
Previous wording
The total authorization under our existing share repurchase program is$2,250.0 million, of which$369.6 million remained available as of March 31, 2024. Since our share repurchase program was initially authorized in 2015, we have repurchased 59,043,000 of our common shares at an average price of $31.85 per share, for an aggregate purchase price of $1,880.4 million.
Current wording
The total authorization under our existing share repurchase program is $2,250.0 million, of which $306.9 million remained available as of June 30, 2024. Since our share repurchase program was initially authorized in 2015, we have repurchased 60,963,063 of our common shares at an average price of $31.87 per share, for an aggregate purchase price of $1,943.1 million.
Previous wording
During the three months ended March 31, 2023 and 2024, we repurchased 630,605 and 864,925 of our common shares, respectively, on the open market at a weighted average price of $47.57 and $34.67 per share for an aggregate cash amount of $30.0 million and $30.0 million, respectively. All repurchased shares have been retired.
Current wording
During the six months ended June 30, 2023 and 2024, we repurchased 3,828,084 and 2,784,988 of our common shares, respectively, on the open market at a weighted average price of $39.31 and $33.26 per share, respectively, for an aggregate purchase price of $150.5 million and $92.6 million, respectively. All repurchased shares have been retired.
Previous wording
Cash flows used for operating activities. Net cash used for operating activities was $25.6 million in the three months ended March 31, 2024 compared to $34.1 million in the three months ended March 31, 2023. This decrease in cash used for operating activities is primarily due to a $10.8 million increase in net income in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This decrease was partially offset by (i) a $1.6 million increase in operating assets and liabilities driven by higher investments in accounts receivable and higher bonus payments in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, partially offset by higher refunds of Indian Goods and Services Tax payments in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, and (ii) a $0.7 million reduction in non-cash expense, primarily due to lower stock-based compensation expense, a decrease in depreciation and amortization and a higher unrealized gain on the revaluation of foreign currency assets/liabilities, largely offset by an increase in deferred tax expense in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
Cash flows provided by operating activities. Net cash provided by operating activities was $183.7 million in the six months ended June 30, 2024 compared to net cash provided by operating activities of $137.4 million in the six months ended June 30, 2023. This increase in cash provided by operating activities was primarily driven by (i) a $16.6 million increase in net income in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 and (ii) a $30.8 million decrease in operating assets and liabilities. The decrease in operating assets and liabilities was primarily driven by lower tax payments, higher refunds of Indian Goods and Services Tax payments and higher advances received from customers, partially offset by higher investments in accounts receivable in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was partially offset by a $1.1 million reduction in non-cash expense, primarily due to lower stock-based compensation expense, a decrease in depreciation and amortization and a higher unrealized gain on the revaluation of foreign currency assets/liabilities, partially offset by an increase in deferred tax expense and an increase in allowances for credit losses in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Previous wording
Cash flows used for investing activities. Our net cash used for investing activities was $24.7 million in the three months ended March 31, 2024 compared to $33.6 million in the three months ended March 31, 2023. Cash used for the business previously classified as held for sale was $19.5 million and cash used for business combinations was $0.7 million in the three months ended March 31, 2023, while no corresponding payments were made in the three months ended March 31, 2024. Cash used for payments (net of sales proceeds) for the purchase of property, plant and equipment and acquired/internally generated intangible assets was $11.3 million higher in the three months ended March 31, 2024 than in the three months ended March 31, 2023.
Current wording
Cash flows used for investing activities. Our net cash used for investing activities was $44.4 million in the six months ended June 30, 2024 compared to $45.9 million in the six months ended June 30, 2023. Cash used for the divestiture of a business previously classified as held for sale was $19.5 million and cash used for business combinations was $0.7 million in the six months ended June 30, 2023, while no corresponding payments were made in the six months ended June 30, 2024. Cash used for payments (net of sales proceeds) for the purchase of property, plant and equipment and internally generated intangible assets was $18.7 million higher in the six months ended June 30, 2024 than in the six months ended June 30, 2023.
Previous wording
Cash flows used for financing activities. Our net cash used for financing activities was $48.2 million in the three months ended March 31, 2024 compared to $41.2 million in the three months ended March 31, 2023. This increase was primarily due to (i) a decrease in proceeds from the issuance of common shares under our stock-based compensation plans to $6.8 million in the three months ended March 31, 2024 from $15.9 million in the three months ended March 31, 2023, (ii) higher dividend payments, amounting to $27.5 million in the three months ended March 31, 2024 compared to $25.3 million in the three months ended March 31, 2023, and (iii) higher payments for the net settlement of stock-based awards, amounting to $20.8 million in the three months ended March 31, 2024 compared to $18.2 million in the three months ended March 31, 2023. This increase in cash used for financing activities was partially offset by (i) a payment of earn-out consideration amounting to $2.4 million in the three months ended March 31, 2023 with no corresponding payment in the three months ended March 31, 2024 and (ii) higher proceeds from borrowings (net of repayment), amounting to $26.8 million in the three months ended March 31, 2024 compared to $22.4 million in the three months ended March 31, 2023.
Current wording
Cash flows used for/provided by financing activities. Our net cash provided by financing activities was $202.3 million in the six months ended June 30, 2024 compared to cash used for financing activities of $257.7 million in the six months ended June 30, 2023. This change was primarily due to (i) higher proceeds from borrowings (net of repayment), amounting to $370.1 million in the six months ended June 30, 2024 compared to repayment of borrowings (net of proceeds) of $61.3 million in the six months ended June 30, 2023, (ii) lower payments for stock repurchased and retired (including payments of expenses and taxes related to stock repurchase activity), amounting to $92.7 million in the six months ended June 30, 2024 compared to $150.5 million in the six months ended June 30, 2023, and (iii) a $2.4 million payment of earn-out consideration in the six months ended June 30, 2023 with no corresponding payment in the six months ended June 30, 2024. This increase in cash flow from financing activities was partially offset by (i) a decrease in proceeds from the issuance of common shares under our stock-based compensation plans to $9.7 million in the six months ended June 30, 2024 from $31.9 million in the six months ended June 30, 2023, (ii) higher dividend payments, amounting to $54.8 million in the six months ended June 30, 2024 compared to $50.3 million in the six months ended June 30, 2023, and (iii) higher payments for the net settlement of stock-based awards, amounting to $21.1 million in the six months ended June 30, 2024 compared to $18.3 million in the six months ended June 30, 2023.
Previous wording
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 term 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 existing 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.
Current wording
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 term 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.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (13)
Current report — wording carried from elsewhere
Net revenues from Data-Tech-AI services in the second quarter of 2024 were $546.0 million, up $21.1 million, or 4.0%, from $525.0 million in the second quarter of 2023. This increase was largely driven by an increase in revenue from our supply chain and risk management services in the second quarter of 2024 compared to the second quarter of 2023.
Current report — wording carried from elsewhere
Net revenues from our Financial Services segment increased by 5.9% in the second quarter of 2024 compared to the second quarter of 2023, largely due to large deal ramp-ups, partially offset by a reduction in services provided to a client in the banking vertical in the second quarter of 2024 compared to the second quarter of 2023. Net revenues from our Consumer and Healthcare segment increased by 7.4% in the second quarter of 2024 compared to the second quarter of 2023, largely driven by ramp-ups of services from large deals signed in 2023 as well as recently signed deals. Net revenues from our High Tech and Manufacturing segment increased by 5.8% in the second quarter of 2024 compared to the second quarter of 2023, largely driven by ramp-ups of client deals signed in 2023, partially offset by the impact of a reduction in deal scope for a large client in 2023.
Current report — wording carried from elsewhere
Cost of revenue. Cost of revenue was $759.8 million in the second quarter of 2024, up $44.3 million, or 6.2%, from $715.5 million in the second quarter of 2023. The increase in cost of revenue in the second quarter of 2024 compared to the second quarter of 2023 was primarily due to (i) an increase in our operational headcount to support revenue growth, (ii) wage inflation and (iii) higher infrastructure expenses. This increase was partially offset by (i) lower depreciation and amortization expense, (ii) lower stock-based compensation expense and (iii) improved operating leverage in the second quarter of 2024 compared to the second quarter of 2023.
Current report — wording carried from elsewhere
We calculate AOI as net income, excluding (i) stock-based compensation, (ii) amortization and impairment of acquired intangible assets, (iii) foreign exchange (gains)/losses, net, (iv) interest (income) expense, net, (v) restructuring (income) expense and (vi) income tax expense, as we believe that our results after taking into account these adjustments more accurately reflect our ongoing operations. To calculate AOI margin, we divided AOI (as calculated above) by total revenue. For additional information, see Note 18—“Segment reporting” under Part I, Item 1—“Unaudited Consolidated Financial Statements” above.
Current report — wording carried from elsewhere
AOI for “Others” in the table above primarily represents the adjustment of over- or under-absorption of corporate overheads which is 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.
Current report — wording carried from elsewhere
Adjusted for foreign exchange, primarily the impact of changes in the values of the Japanese yen, Australian dollar, South African rand, Chinese yuan, U.K pound sterling, Polish zloty and Indian rupee against the U.S. dollar, our net revenues grew 5.6% in the first half of 2024 compared to the first half of 2023 on a constant currency 3 basis. We provide information about our revenue growth on a constant currency 3 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. Total net revenues on a constant currency 3 basis are calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates and adjusted for hedging gains/losses.
Current report — wording carried from elsewhere
3 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.
Current report — wording carried from elsewhere
Revenues by segment were as follows:
Current report — wording carried from elsewhere
Foreign exchange gains (losses), net. We recorded a net foreign exchange gain of $3.3 million in the first half of 2024 compared to a net foreign exchange gain of $0.7 million in the first half of 2023. The gain in the first half of 2024 resulted primarily from gains on fair value hedges and the depreciation of the Indian rupee against the U.S. dollar during the first half of 2024. The gain in the first half of 2023 resulted primarily from gains on fair value hedges, partially offset by the appreciation of the Indian rupee against the U.S. dollar during that period.
Current report — wording carried from elsewhere
Interest income (expense), net. Our interest expense (net of interest income) was $23.8 million in the first half of 2024, up $2.0 million from $21.8 million in the first half of 2023, primarily due to a $6.0 million increase in interest expense, largely offset by a $4.0 million increase in interest income. Our interest income increased from $8.4 million in the first half of 2023 to $12.4 million in the first half of 2024, due to higher interest rates and higher cash balances in the first half of 2024 compared to the first half of 2023. The increase in interest expense was largely due to (i) incremental interest expense on our senior notes issued in June 2024, (ii) a higher average benchmark-based rate on our revolving credit facility and term loan, and (iii) lower gains on interest rate swaps entered into to hedge interest rate exposure on our term loan. This was partially offset by lower usage of our revolving credit facility and a lower principal amount outstanding under our term loan in the first half of 2024 compared to the first half of 2023. The weighted average rate of interest on our debt, including the net impact of interest rate swaps, increased from 3.3% in the first half of 2023 to 4.3% in the first half of 2024. See the section titled “Liquidity and Capital Resources—Financial Condition” for further discussion.
Current report — wording carried from elsewhere
AOI and AOI margin are non-GAAP measures and are not based on any comprehensive set of accounting rules or principles and should not be considered 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 together with our reported results can provide 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.
Current report — wording carried from elsewhere
The following table shows the reconciliation of AOI to net income, the most directly comparable GAAP measure, for the six months ended June 30, 2023 and 2024:
Current report — wording carried from elsewhere
The following table sets forth our AOI by segment for the six months ended June 30, 2023 and 2024:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
As of December 31, 2023 and March 31, 2024, our outstanding term loan, net of debt amortization expense of $1.3 million and $1.2 million, respectively, was $508.9 million and $495.7 million, respectively.