Genpact LTD

Previous wording

Our results of operations are affected by economic conditions, including the overall inflationary environment and levels of business confidence. Throughout 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 and geopolitical conditions, new and rapidly changing technologies, and shifting levels of business confidence. Since the beginning of 2025, economic uncertainty has increased in several markets globally, driven by shifting trade policy and the prospect of slowing global growth, which has 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 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 continue to monitor both conflicts.

Current wording

Geopolitical tensions have also continued to intensify globally. The Russia-Ukraine war and ongoing conflicts in the Middle East are contributing to global market volatility and regional instability. We do not have operations in Russia or Ukraine and have limited operations in Israel or other affected countries. To date, these conflicts have not had a material impact on our business, financial position or operations, but it is difficult to anticipate the future impacts of these conflicts and other geopolitical tensions on our business or our clients’ businesses.

Previous wording

Our 2024 net revenues were $4.8 billion, an increase of 6.5% year-over-year, or 6.7% on a constant currency 1 basis.

Current wording

Our 2025 net revenues were $5.1 billion, an increase of 6.6% year-over-year, or 6.4% on a constant currency 1 basis.

Previous wording

Revenue by top clients. The table below sets forth the percentage of our total net revenues derived from our largest clients in the years ended December 31,2023 and 2024:

Current wording

Revenue by top clients. The table below sets forth the percentage of our total net revenues derived from our largest clients in the years ended December 31,2024 and 2025:

Previous wording

We earn revenues pursuant to contracts that generally take the form of a master service agreement ("MSA"), which is a framework agreement that is then supplemented by statements of work ("SOWs"). Our MSAs specify the general terms applicable to the services we will provide. Our MSAs are generally for terms of three to seven years, although they may also have an indefinite term or be for terms of less than three years. In most cases they do not specify pricing terms or obligate the client to purchase a particular amount of services. We then enter into SOWs under an MSA, which specify particular services to be provided and the pricing terms. Most of our revenues are from SOWs with terms of two to five years. We typically have multiple SOWs under any given MSA, and the terms of our SOWs vary depending on the nature of the services to be provided. We seek to develop long-term relationships with our clients.

Current wording

We earn revenues pursuant to contracts that generally take the form of a master service agreement ("MSA"), which is a framework agreement that is then supplemented by statements of work ("SOWs"). Our MSAs specify the general terms applicable to the services we will provide. Our MSAs are generally for terms of three to seven years, although they may also have an indefinite term or be for terms of less than three years. In most cases they do not specify pricing terms or obligate the client to purchase a particular amount of services. We then enter into SOWs under an MSA, which specify particular services to be provided and the pricing terms.

Previous wording

Expenses. Personnel expenses are a major component of both our cost of revenue and our selling, general and administrative expenses. Personnel expenses include salaries and benefits (including stock-based compensation) as well as costs related to recruitment and training. Personnel expenses are allocated between cost of revenue and selling, general and administrative expenses based on the allocation of the employee. Depreciation and amortization expense are allocated between cost of revenue and selling, general and administrative expenses using an appropriate allocation basis.

Current wording

Expenses. Personnel expenses are a major component of both our cost of revenue and our selling, general and administrative ("SG&A") expenses. Personnel expenses include salaries and benefits (including stock-based compensation) as well as costs related to recruitment and training. Personnel expenses are allocated between cost of revenue and selling, general and administrative expenses based on the allocation of the employee. Depreciation and amortization expense are allocated between cost of revenue and selling, general and administrative expenses using an appropriate allocation basis.

Previous wording

Our industry is labor-intensive. Wage levels in the countries in which our delivery centers are located have historically increased on a year-over-year basis. We attempt to address the impact of wage increases, and pressures to increase wages, in a number of ways, which include seeking to control entry-level wages, managing attrition, delivering productivity and “right-skilling,” which refers to ensuring that positions are not filled by overqualified employees. We try to control increases in entry-level wages by implementing innovative recruitment policies, utilizing continuous training techniques, emphasizing promotion opportunities and maintaining an attractive work atmosphere and culture.

Current wording

Our industry is labor-intensive. Wage levels in the countries in which our delivery centers are located have historically increased on a year-over-year basis. We attempt to address the impact of wage increases, and pressures to increase wages, in a number of ways, which include seeking to control entry-level wages, managing attrition, internal training to re-skill existing employees, delivering productivity and “right-skilling,” which refers to ensuring that positions are not filled by overqualified employees. We try to control increases in entry-level wages by implementing innovative recruitment policies, utilizing continuous training techniques, emphasizing promotion opportunities and maintaining an attractive work atmosphere and culture.

Previous wording

Selling, general and administrative expenses. Our selling, general and administrative ("SG&A") expenses are primarily comprised of personnel expenses for senior management and other support personnel in enabling functions, such as human resources, finance, legal, marketing, sales and sales support, and other non-billable support personnel. The operational costs component of SG&A expenses also includes travel and living costs for such personnel. Additionally, the operational costs component of SG&A expenses includes acquisition related costs, legal and professional fees (which represent the costs of third-party legal, tax, accounting and other advisors), strategic investments in research and development, digital technology, advanced automation and robotics, and an allowance for credit losses.

Current wording

Selling, general and administrative expenses. Our SG&A expenses are primarily comprised of personnel expenses for senior management and other support personnel in enabling functions, such as human resources, finance, legal, marketing, sales and sales support, and other non-billable support personnel. The operational costs component of SG&A expenses also includes travel and living costs for such personnel. Additionally, the operational costs component of SG&A expenses includes acquisition related costs, legal and professional fees (which represent the costs of third-party legal, tax, accounting and other advisors), strategic investments in research and development, digital technology, advanced automation and robotics, and an allowance for credit losses.

Previous wording

Other operating (income) expense, net. Other operating (income) expense, net primarily consists of the impact of certain operating losses resulting from the write-down of operating lease right-of-use assets, other assets, property, plant and equipment and intangible assets, impairment charges and losses on the sale of assets classified as held for sale, gains on lease terminations, the waiver of a vendor liability and a gain on the redemption of a loan note associated with the sale of a business classified as held for sale.

Current wording

Other operating (income) expense, net. Other operating (income) expense, net primarily consists of the impact of certain operating losses resulting from the write-down of operating lease right-of-use assets, property, plant and equipment and intangible assets, losses on the sale of assets classified as held for sale, gains on lease terminations, the waiver of a vendor liability and a gain on the redemption of a loan note associated with the sale of a business classified as held for sale.

Previous wording

76% of our fiscal 2024 net revenues were earned in U.S. dollars. We also received payments in euros, UK pounds sterling, Australian dollars, Indian rupees and Japanese yen. Our costs are primarily incurred in U.S. dollars, as well as in Indian rupees, Romanian leu, Chinese renminbi, U.K. pounds sterling, Philippine pesos and the currencies of the other countries in which we have operations. While some of our contracts provide for limited sharing of the risk of inflation and fluctuations in currency exchange rates, we bear a substantial portion of this risk, and therefore our operating results could be negatively affected by adverse changes in wage inflation rates and foreign currency exchange rates. See our discussion of wage inflation under “Expenses” above. We enter into forward currency contracts, which are generally designed to qualify for hedge accounting, in order to hedge most of our net cost currency exposure between the U.S. dollar and the Indian rupee and Mexican peso, between the Australian dollar and the Indian rupee, and between the euro and the Romanian leu, and our revenue currency exposure between the U.S. dollar and the U.K. pound sterling, Philippine peso, Hungarian forint, Chinese renminbi, Malaysian ringgit, Polish zloty and the euro, and between the Chinese renminbi and the Japanese yen. However, our ability to hedge such risks is limited by local law, the liquidity of the market for such hedges and other practical considerations. Thus, our results of operations may be adversely affected if we are not able to enter into the desired hedging arrangements or if our hedging strategies are not successful. See Note 2—“Summary of significant accounting policies” to our consolidated financial statements under Part IV, Item 15—“Exhibits and Financial Statement Schedules” for additional information.

Current wording

75% of our fiscal 2025 net revenues were earned in U.S. dollars. We also received payments in euros, UK pounds sterling, Australian dollars, Indian rupees and Japanese yen. Our costs are primarily incurred in Indian rupees, as well as U.S. dollars, Romanian leu, UK pounds sterling, Chinese renminbi, Philippine pesos, Polish zloty, euros, Mexican pesos, Costa Rican colón, Japanese yen, Canadian dollars, Malaysian ringgit, Guatemalan quetzals, Australian dollars, South African rand and Hungarian forint and the currencies of the other countries in which we have operations. While some of our contracts provide for limited sharing of the risk of inflation and fluctuations in currency exchange rates, we bear a substantial portion of this risk, and therefore our operating results could be negatively affected by adverse changes in wage inflation rates and foreign currency exchange rates. See our discussion of wage inflation under “Expenses” above. We enter into forward currency contracts, which are generally designed to qualify for hedge accounting, in order to hedge most of our net cost currency exposure between the U.S. dollar and the Indian rupee and Mexican peso, between the Australian dollar and the Indian rupee, and between the euro and the Romanian leu, and our revenue currency exposure between the U.S. dollar and the UK pound sterling, Philippine peso, Hungarian forint, Chinese renminbi, Malaysian ringgit, Polish zloty, Costa Rican colón, and the euro, and between the Chinese renminbi and the Japanese yen. However, our ability to hedge such risks is limited by local law, the liquidity of the market for such hedges and other practical considerations. Thus, our results of operations may be adversely affected if we are not able to enter into the desired hedging arrangementsor if our hedging strategies are not successful. See Note 2—“Summary of significant accounting policies” to our consolidated financial statements under Part IV, Item 15—“Exhibits and Financial Statement Schedules” for additional information.

Previous wording

Bermuda taxes. We are organized in Bermuda. Bermuda does not currently impose any income tax on us. On December 27, 2023, the government of Bermuda passed legislation introducing a corporate income tax of 15%, which became effective on January 1, 2025. As a result of this new legislation, we recorded a deferred tax asset on net operating losses, which was fully offset by a valuation allowance.

Current wording

Bermuda taxes. We are organized in Bermuda. On December 27, 2023, the government of Bermuda passed legislation introducing a corporate income tax of 15%, which became effective on January 1, 2025. As a result of this new legislation, we recorded a deferred tax asset on net operating losses, which was fully offset by a valuation allowance.

Previous wording

Transfer pricing. We have transfer pricing arrangements among our subsidiaries involved in various aspects of our business, including operations, marketing, sales and delivery functions. U.S., U.K., and Indian transfer pricing regulations, as well as the regulations applicable in the other countries in which we operate, require that any international transaction involving affiliated enterprises be made on arm’s-length terms. We consider the transactions among our subsidiaries to be substantially on arm’s-length pricing terms. If, however, a tax authority in any jurisdiction reviews any of our tax returns and determines that the transfer prices we have applied are not appropriate, or that other income of our affiliates should be taxed in that jurisdiction, we may incur increased tax liability, including accrued interest and penalties, which would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows.

Current wording

Transfer pricing. We have transfer pricing arrangements among our subsidiaries involved in various aspects of our business, including operations, marketing, sales and delivery functions. U.S., UK, and Indian transfer pricing regulations, as well as the regulations applicable in the other countries in which we operate, require that any international transaction involving affiliated enterprises be made on arm’s-length terms. We consider the transactions among our subsidiaries to be substantially on arm’s-length pricing terms. If, however, a tax authority in any jurisdiction reviews any of our tax returns and determines that the transfer prices we have applied are not appropriate, or that other income of our affiliates should be taxed in that jurisdiction, we may incur increased tax liability, including accrued interest and penalties, which would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows.

Previous wording

Other taxes. We have operating subsidiaries or branches in several countries, including Argentina, Australia, Brazil, Bulgaria, Canada, China, Colombia, Costa Rica, the Czech Republic, Egypt, Germany, Guatemala, Hungary, India, Ireland, Israel, Japan, Malaysia, Mexico, the Netherlands, the Philippines, Poland, Portugal, Romania, Singapore, Slovakia, South Africa, Thailand, Turkey, the United Kingdom and the United States, as well as sales and marketing subsidiaries in certain jurisdictions, including the United States and the United Kingdom, which are subject to tax in such jurisdictions.

Current wording

Other taxes. We have operating subsidiaries or branches in several countries, including Albania, Argentina, Australia, Brazil, Bulgaria, Canada, China, Colombia, Costa Rica, the Czech Republic, Egypt, Germany, Guatemala, Hungary, India, Ireland, Israel, Japan, Kosovo, Malaysia, Mexico, the Netherlands, Norway, the Philippines, Poland, Portugal, Romania, Singapore, Slovakia, South Africa, Thailand, Turkey, the United Kingdom, the United States and Vietnam, as well as sales and marketing subsidiaries in certain jurisdictions, including the United States and the United Kingdom, which are subject to tax in such jurisdictions.

Previous wording

One of our subsidiaries in China obtained a ruling from the Government of China certifying it to be a Technologically Advanced Service Enterprise. As a result, that subsidiary is subject to a lower corporate income tax rate of 15% through December 31, 2026, subject to the fulfillment of certain conditions. Our delivery centers also enjoy corporate tax holidays or concessional tax rates in certain other jurisdictions, including Costa Rica, Israel, Malaysia, the Philippines and Poland. These tax concessions will expire over the next few years, possibly increasing our overall tax rate.

Current wording

One of our subsidiaries in China obtained a ruling from the Government of China certifying it to be a Technologically Advanced Service Enterprise. As a result, that subsidiary is subject to a lower corporate income tax rate of 15% through December 31, 2026, subject to the fulfillment of certain conditions. Our delivery centers are eligible for corporate tax holidays or concessional tax rates in certain other jurisdictions, including Costa Rica, Israel, Malaysia, the Philippines and Poland. These tax concessions will expire over the next few years, possibly increasing our overall tax rate.

Previous wording

New bookings can vary significantly year to year depending in part on the timing of signing of large contracts. The typesof services clients are demanding, the duration of the contract and the pace and level of client spending may impact the conversion of new bookings to revenues. For example, bookings for our Digital Operations services, which are typically provided under multi-year contracts, generally convert to revenue over a longer period of time than do bookings for our Data-Tech-AI services, which often include shorter cycle, project-based work.

Current wording

New bookings can vary significantly year to year depending in part on the timing of signing of large contracts. The typesof services clients are demanding, the duration of the contract and the pace and level of client spending may impact the conversion of new bookings to revenues. For example, bookings for our Digital Operations services and Core Business Services, which are typically provided under multi-year contracts, generally convert to revenue over a longer period of time than do bookings for our Data-Tech-AI services and Advanced Technology Solutions, which often include shorter cycle, project-based work.

Previous wording

Goodwill and other intangible assets. Goodwill represents the cost of acquired businesses in excess of the fair value of the identifiable tangible and intangible net assets purchased. Goodwill is tested for impairment at least on an annual basis on December 31, or as circumstances warrant based on a number of factors, including operating results, business plans and future cash flows. We perform an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on our assessment of events or circumstances, we perform a quantitative assessment of goodwill impairment if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the results of our assessments of qualitative factors, we determined that the fair values of all of our reporting units are likely to be higher than their respective carrying amounts as of December 31,2023 and 2024.

Current wording

Goodwill and other intangible assets. Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. We test goodwill for impairment as of December 31 every year. We may perform quantitative testing where the fair value of the reporting unit is compared with its carrying amount, including goodwill, or choose to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Based on the results of the qualitative assessment, we perform the quantitative assessment of goodwill impairment if we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Previous wording

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

Current wording

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

Previous wording

Income taxes. We calculate and provide for income taxes in each of the tax jurisdictions in which we operate. We account for income taxes using the asset and liability method. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and for all operating losses and tax credits carried forward, if any. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or tax status is recognized in the statement of income in the period that includes the enactment date or the filing or approval date of the tax status change. Deferred tax assets are recognized in full, subject to a valuation allowance that reduces the amount recognized to that which is more likely than not to be realized. In assessing the likelihood of realization, we consider estimates of future taxable income.

Current wording

Income taxes. We calculate and provide for income taxes in each of the tax jurisdictions in which we operate. We accountfor income taxes using the asset and liability method. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and for all operating losses and tax credits carried forward, if any. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or tax status is recognized in the statement of income in the period that includes the enactment date or the filing or approval date of the tax status change. Deferred tax assets are recognized in full, subject to a valuation allowance that reduces the amount recognized to that which is more likely than not to be realized. In assessing the likelihood of realization, we consider estimates of future taxable income.

Previous wording

We generally plan to indefinitely reinvest the undistributed earnings of foreign subsidiaries, except for those earnings that can be repatriated in a tax-free manner. Accordingly, we do not currently accrue any material income, distribution or withholding taxes that would arise if such earnings were repatriated.

Current wording

We generally plan to indefinitely reinvest the undistributed earnings of foreign subsidiaries, except for those earnings that can be repatriated in a tax-efficient manner. As a result, we recognize tax that would be incurred on undistributed earnings not subject to indefinite reinvestment.

Previous wording

The following table sets forth certain data from our income statement for the years ended December 31, 2023 and 2024:

Current wording

The following table sets forth certain data from our consolidated statements of income for the years ended December 31, 2024 and 2025:

Previous wording

Net revenues. Our net revenues were $4,767.1 million in 2024, up $290.3 million, or 6.5%, from $4,476.9 million in 2023. Growth in our net revenues was driven by both Data-Tech-AI and Digital Operations services.

Current wording

Net revenues. Our net revenues were $5,079.9 million in 2025, up $312.7 million, or 6.6%, from $4,767.1 million in 2024.

Previous wording

Adjusted for foreign exchange, primarily the impact of changes in the values of the Japanese yen, Argentine peso, Chinese yuan and Indian rupee against the U.S. dollar, our net revenues grew 6.7% in 2024 compared to 2023 on a constant currency 3 basis. Revenue growth on a constant currency 3 basis is a non-GAAP measure. 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 compared to prior fiscal periods, 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 wording

Adjusted for foreign exchange, primarily the impact of changes in the values of the euro and UK pound sterling against the U.S. dollar, our net revenues grew 6.4% in 2025 compared to 2024 on a constant currency 2 basis. Revenue growth on a constant currency 2 basis is a non-GAAP measure. 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 compared to prior fiscal periods, 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 to approximately 135,400 in 2024 from approximately 123,400 in 2023.

Current wording

Our average headcount increased to approximately 146,000 in 2025 from approximately 135,400 in 2024.

Previous wording

Net revenues from Data-Tech-AI services in 2024 were$2,233.9 million, up $144.4 million, or 6.9%, from$2,089.5 million in 2023. This increase was driven by strong demand for data and technology solutions embedded in our finance and accounting, supply chain and risk management services in 2024 compared to 2023.

Current wording

Net revenues from Data-Tech-AI services in 2025 were $2,442.4 million, up $208.5 million, or 9.3%, from $2,233.9 million in 2024. This increase was driven by increased demand for our data and AI solutions and services as well as technology services in 2025 compared to 2024.

Previous wording

Net revenues from Digital Operations services in 2024 were $2,533.3 million, up $145.9 million, or 6.1%, from $2,387.4 million in 2023, primarily driven by ramp-ups of services from recently signed large deals.

Current wording

Net revenues from Digital Operations services in 2025 were $2,637.5 million, up $104.2 million, or 4.1%, from $2,533.3 million in 2024, primarily driven by ramp-ups of services from recently signed deals.

Previous wording

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 wording

2 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.

Previous wording

Revenues by segment were as follows:

Current wording

Net revenues by segment were as follows:

Previous wording

Cost of revenue. Cost of revenue was $3,077.1 million in 2024, up $170.9 million, or 5.9%, from $2,906.2 million in 2023. The increase in our cost of revenue in 2024 compared to 2023 was primarily due to (i) an increase in our operational headcount to support revenue growth, (ii) wage inflation, (iii) higher infrastructure expenses and (iv) increased spending on professional services. This increase was partially offset by (i) lower depreciation and amortization expense, (ii) lower stock-based compensation expense and (iii) lower travel related expenses in 2024 compared to 2023.

Current wording

Cost of revenue. Cost of revenue was $3,248.9 million in 2025, up $171.8 million, or 5.6%, from $3,077.1 million in 2024. The increase in our cost of revenue in 2025 compared to 2024 was primarily due to (i) an increase in our operational headcount to support revenue growth, (ii) wage inflation, (iii) an increase in costs for resold partnership technologies, (iv) higher stock-based compensation expense, and (v) increased spending on professional services. This increase was partially offset by lower communication and travel-related expenses in 2025 compared to 2024.

Previous wording

Gross margin. Our gross margin increased from 35.1% in 2023 to 35.5% in 2024. The increase in gross margin was primarily due to improved operating leverage in 2024 compared to 2023.

Current wording

Gross margin. Our gross margin increased from 35.5% in 2024 to 36.0% in 2025 primarily due to improved operating leverage in 2025 compared to 2024.

Previous wording

Selling, general and administrative (SG&A) expenses. SG&A expenses as a percentage of total net revenues were 20.3% in 2024 and 20.4% 2023. SG&A expenses were $967.1 million in 2024, up $54.0 million, or 5.9%, from $913.1 million in 2023. The increase in SG&A expenses was primarily due to increased strategic investments in partnerships, alliances, and other sales and marketing capabilities, a higher allowance for credit losses, higher travel related expenses and wage inflation in 2024 compared to 2023. This increase was partially offset by lower stock-based compensation expense and improved G&A cost management in 2024 compared to 2023.

Current wording

Selling, general and administrative (SG&A) expenses. SG&A expenses as a percentage of total net revenues were 20.6% in 2025 and 20.3% 2024. SG&A expenses were $1,046.7 million in 2025, up $79.6 million, or 8.2%, from $967.1 million in 2024. The increase in SG&A expenses was primarily due to (i) increased strategic investments in partnerships, alliances, and other sales and marketing capabilities, (ii) higher stock-based compensation expense, (iii) a higher allowance for credit losses, and (iv) wage inflation in 2025 compared to 2024.

Previous wording

Amortization of acquired intangible assets. Amortization of acquired intangible assets was $26.5 million in 2024, down $5.0 million, or 15.9%, from $31.5 million in 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 $24.3 million in 2025, down $2.2 million, or 8.2%, from $26.5 million in 2024. This decrease was primarily due to the completion of useful lives of intangibles acquired in prior periods, partially offset by the amortization of acquired intangible assets from our recent acquisition of XponentL. For additional information, see Note 3—“Business acquisitions”to our consolidated financial statements under Part IV, Item 15—“Exhibits and Financial Statement Schedules.”

Previous wording

Other operating (income) expense, net. Other operating income (net of expense) was$5.6 million in 2024, compared to $4.7 million in 2023. This change was primarily due to the receipt of $1.5 million upon the redemption of a loan note associated with the sale of a business classified as held for sale and the waiver by a vendor of a liability in 2024. Additionally, a gain of $4.9 million was recorded in 2023 upon the successful termination of a lease that was abandoned as part of a restructuring we undertook in 2022. For additional information, see Note 7—“Assets and liabilities held for sale” and Note 26—“Restructuring”to our consolidated financial statements under Part IV, Item 15—“Exhibits and Financial Statement Schedules.”

Current wording

Other operating (income) expense, net. Other operating expense (net of income) was$9.8 million in 2025, compared to Other operating income (net of expense) of $5.6 million in 2024. During 2025, we recorded a charge of $10.1 million related to the abandonment of certain leased premises no longer in use with no such corresponding charge in 2024. During 2024, we recorded a gain 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, with no such corresponding income recorded in 2025.

Previous wording

Income from operations. As a result of the foregoing factors, income from operations as a percentage of total net revenues increased from 14.1% in 2023 to 14.7% in 2024. Income from operations increased by $71.2 million from $630.9 million in 2023 to $702.1 million in 2024, primarily due to a higher gross margin, partially offset by an increase in SG&A expenses in 2024 compared to 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 14.7% in 2024 to 14.8% in 2025. Income from operations increased by $48.1 million from $702.1 million in 2024 to $750.2 million in 2025, primarily due to a higher gross margin, partially offset by an increase in SG&A expenses and Other operating expense (net of income) in 2025 compared to 2024.

Previous wording

Foreign exchange gains (losses), net. We recorded a net foreign exchange gain of $2.9 million in 2024, compared to $4.3 million in 2023. The gains in both years resulted primarily from the depreciation of the Indian rupee against the U.S. dollar.

Current wording

Foreign exchange gains (losses), net. We recorded a net foreign exchange gain of $7.4 million in 2025, compared to $2.9 million in 2024. The gains in both years resulted primarily from the weakening of the Indian rupee against the U.S. dollar.

Previous wording

Interest income (expense), net. Our interest expense (net of interest income) was $47.2 million in 2024, down $0.7 million from $47.9 million in 2023, reflecting the net impact of a $13.9 million increase in interest income in 2024 compared to 2023 and an offsetting $13.2 million increase in interest expense in 2024 compared to 2023. Our interest income increased from $18.4 million in 2023 to $32.3 million in 2024 due to higher cash balances in 2024 compared to 2023. The increase in interest expense was largely due to incremental interest expense on the senior notes issued in June 2024, 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 3.7% in 2023 to 4.5% in 2024.

Current wording

Interest income (expense), net. Our interest expense (net of interest income) was $49.6 million in 2025, up $2.4 million from $47.2 million in 2024, reflecting the net impact of an $8.4 million decrease in interest income in 2025 compared to 2024 and an offsetting $6.0 million decrease in interest expense in 2025 compared to 2024. Our interest income decreased from $32.3 million in 2024 to $23.9 million in 2025 due to lower interest rates and lower cash balances in 2025 compared to 2024. The decrease in interest expense was largely driven by lower interest expense on our term loan due to a lower SOFR and reduced volume in 2025 compared to 2024, 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 4.5% in 2024 to 4.7% in 2025.

Previous wording

Other income (expense), net. Our other income (net of expense) was $19.0 million in 2024, compared to$15.0 million in 2023. This change was primarily driven by a gain on the sale of land and higher sublease income in 2024 compared to 2023.

Current wording

Other income (expense), net. Our other income (net of expense) was $22.1 million in 2025, compared to $19.0 million in 2024. This change was primarily due to higher gain on the fair value of deferred compensation plan assets in 2025 compared to 2024.

Previous wording

Income tax expense/(benefit). Our income tax expense was$163.2 million in 2024, compared to an income tax benefit of $29.0 million in 2023. Our effective tax rate ("ETR") was 24.1% in 2024 and (4.8%) in 2023. The negative ETR in 2023 was primarily due to recording a non-recurring tax benefit of $169.9 million on an intercompany transfer of certain intellectual property rights from certain of our non-US subsidiaries to certain wholly-owned US subsidiaries.

Current wording

Income tax expense/(benefit). Our income tax expense was $177.7 million in 2025, compared to an income tax expense of $163.2 million in 2024. Our effective tax rate ("ETR") was 24.3% in 2025 and 24.1% in 2024. The increase in our ETR in 2025 was primarily driven by the impact of non-recurring discrete items.

Previous wording

Net income. As a result of the foregoing factors, net income as a percentage of net revenues was 10.8% in 2024, down from 14.1% in 2023. Net income decreased by $117.6 million from $631.3 million in 2023 to $513.7 million in 2024, primarily due to a non-recurring tax benefit in 2023, partially offset by higher income from operations in 2024 compared to 2023.

Current wording

Net income. As a result of the foregoing factors, net income increased by $38.8 million from $513.7 million in 2024 to $552.5 million in 2025. Net income as a percentage of net revenues was 10.9% in 2025, up from 10.8% in 2024.

Previous wording

Adjusted income from operations. Adjusted income from operations ("AOI") increased by $51.0 million from $762.9 million in 2023 to $813.9 million in 2024. Our AOI margin increased from 17.0% in 2023 to 17.1% in 2024, primarily driven by cost efficiencies and operating leverage in 2024 compared to 2023. In calculating our AOI margin for 2023, we adjusted total net revenues to exclude net revenues of $0.5 million in 2023 from the business classified as held for sale.

Current wording

Adjusted income from operations. Adjusted income from operations ("AOI") increased by $73.6 million from $813.9 million in 2024 to $887.6 million in 2025. Our AOI margin increased from 17.1% in 2024 to 17.5% in 2025, primarily driven by cost efficiencies and operating leverage in 2025 compared to 2024.

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), net, (iv) restructuring (income) expense, (v) the operating loss from the business classified as held for sale, (vi) losses on the sale of businesses classified as held for sale, (vii) interest (income) expense, and (viii) income tax expense/(benefit), 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 net revenue, excluding revenue from the business classified as held for sale. For additional information, see Note 23—“Segment reporting” to our consolidated financial statements under Part IV, Item 15—“Exhibits and Financial Statement Schedules.”

Current wording

We calculate AOI as net income, excluding (i) stock-based compensation, (ii) amortization and impairment of acquired intangible assets, (iii) foreign exchange gains, net, (iv) interest (income) expense, (v)acquisition-related expensesand (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 net revenue, excluding revenue from the business classified as held for sale. For additional information, see Note 23—“Segment reporting” to our consolidated financial statements under Part IV, Item 15—“Exhibits and Financial Statement Schedules.”