GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) | | | | | | | | | | | |
| Six months ended June 30, |
| 2026 | | 2025 |
| Operating activities | | | |
| Net income | $ | 293,729 | | | $ | 263,569 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 35,000 | | | 34,089 | |
| Amortization of debt issuance costs | 1,414 | | | 1,105 | |
| Amortization of acquired intangible assets | 6,399 | | | 8,637 | |
| Allowance for credit losses (refer to Note 4) | 9,410 | | | 18,363 | |
| Unrealized (gain)/loss on revaluation of foreign currency assets/liabilities | 786 | | | 3,068 | |
| Stock-based compensation expense | 48,632 | | | 41,834 | |
| Deferred tax (benefit) expense | (649) | | | 9,307 | |
| Others, net | 116 | | | (89) | |
| Change in operating assets and liabilities: | | | |
| Increase in accounts receivable | (175,331) | | | (58,694) | |
| Increase in prepaid expenses, other current assets, contract cost assets, operating lease right-of-use assets and other assets | (111,828) | | | (69,358) | |
| Increase (Decrease) in accounts payable | (12,096) | | | 9,561 | |
| Decrease in accrued expenses, other current liabilities, operating leases liabilities and other liabilities | (55,938) | | | (63,608) | |
| Increase in income taxes payable | 9,264 | | | 20,017 | |
| Net cash provided by operating activities | $ | 48,908 | | | $ | 217,801 | |
| Investing activities | | | |
| Purchase of property, plant and equipment | (37,855) | | | (44,201) | |
| Payment for internally generated intangible assets (including intangibles under development) | (16,093) | | | (2,987) | |
| Payment for business acquisitions, net of cash acquired | — | | | (80,621) | |
| Proceeds from sale of property, plant and equipment | 3,717 | | | 30 | |
| Proceeds from maturity of short term investments | 350,000 | | | 23,359 | |
| Net cash provided by (used for) investing activities | $ | 299,769 | | | $ | (104,420) | |
| Financing activities | | | |
| Repayment of finance lease obligations | (3,826) | | | (4,487) | |
| Payment of debt issuance and refinancing costs | (394) | | | — | |
| Repayment of long-term debt | (363,250) | | | (13,250) | |
| Proceeds from short-term borrowings | — | | | 85,000 | |
| Proceeds from issuance of common shares under stock-based compensation plans | 5,118 | | | 9,345 | |
| Payment for net settlement of stock-based awards | (22,096) | | | (30,874) | |
| Dividend paid | (63,325) | | | (59,408) | |
| Payment of earn-out consideration | (77,500) | | | — | |
| Payment for stock repurchased and retired (including expenses related to stock repurchased) | (120,007) | | | (92,999) | |
| Net cash used for financing activities | $ | (645,280) | | | $ | (106,673) | |
| Net (decrease) increase in cash and cash equivalents | (296,603) | | | 6,708 | |
| Effect of exchange rate changes | (39,846) | | | 8,306 | |
| Cash and cash equivalents at the beginning of the period | 853,836 | | | 648,246 | |
| Cash and cash equivalents at the end of the period | $ | 517,387 | | | $ | 663,260 | |
| Supplementary information | | | |
| Cash paid during the period for interest | $ | 36,928 | | | $ | 29,790 | |
| Cash paid during the period for income taxes, net of refund | $ | 84,244 | | | $ | 52,192 | |
| | | |
See accompanying notes to the Consolidated Financial Statements.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
1. Organization
Genpact Limited (the "Company") is an Agentic Operations company, where applied AI meets context-rich process intelligence. The Company runs and transforms mission-critical operations for global enterprises. Its Agentic Operations are grounded in decades of operating core business processes across finance, supply chain, banking, insurance, and more. The Company has over 141,000 employees serving clients from more than 35 countries.
2. Summary of significant accounting policies
(a) Basis of preparation and principles of consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, they do not include certain information and note disclosures required by U.S. GAAP for annual financial reporting and should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The accompanying consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the results of operations for these periods.
The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Genpact Limited, a Bermuda company, and all of its subsidiaries that are more than 50% owned and controlled. When the Company does not have a controlling interest in an entity but exerts significant influence over the entity, the Company applies the equity method of accounting. All intercompany transactions and balances are eliminated in consolidation.
(b) Use of estimates
The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment and intangible assets, transaction prices (including variable consideration) of the Company's revenue contracts, allowances for credit losses, valuation allowances for deferred tax assets, valuation of derivative financial instruments, measurements of lease liabilities and right-of-use (“ROU”) assets, measurements of stock-based compensation, assets and obligations related to employee benefits, the nature and timing of the satisfaction of performance obligations, income tax uncertainties and other contingencies. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable. Although these estimates and assumptions are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements.
(c) Goodwill
Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company may perform quantitative testing where the fair value of the reporting unit is compared with its carrying amount, including goodwill, or choose to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Goodwill is tested for impairment by the Company as of December 31 every year.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
2. Summary of significant accounting policies (Continued)
(d) Income taxes
The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of income 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 loss and tax credit carry forwards, if any. Deferred tax assets and liabilities are measured using the enacted tax rates of the respective jurisdictions which are expected to apply to taxable income in the years in which the related temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recognized in the consolidated statements of income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the amount, based on the weight of available evidence, that is more likely than not to be realized.
The Company applies a two-step approach for recognizing and measuring the benefit of tax positions. The first step is to evaluate the tax position for recognition by determining, based on the technical merits, that the position will more likely than not be sustained upon examination. The second step is to measure the tax benefit as the largest amount of the tax benefit that has a greater than 50 percent likelihood of being realized upon settlement. The Company includes interest and penalties related to income taxes within income tax expense.
The Company follows the specific identification approach for releasing stranded tax effects from accumulated other comprehensive income (“AOCI”) upon recognition of these AOCI items in the consolidated statements of income.
(e) Reclassification and presentation adjustments
In the third quarter of 2025, the Company updated the financial presentation of its capitalized cloud computing arrangement (CCA) implementation costs and reclassified certain previously capitalized CCA implementation costs on its consolidated balance sheet, which decreased "property, plant and equipment, net" by $36,424, increased "other assets, net of allowances for credit losses" by $35,817 and increased "prepaid expenses and other current assets" by $607.
Similar reclassifications were reflected in the Company's consolidated balance sheet as of December 31, 2025.
For the six months ended June 30, 2026, cash flows related to the CCA implementation costs were correctly classified within "net cash provided by operating activities." However, for the six months ended June 30, 2025, these cash flows were incorrectly classified within "net cash used in investing activities" in the Company’s consolidated statements of cash flows and were not reclassified to "net cash provided by operating activities" as the amounts are considered immaterial.
The Company evaluated the impact of the reclassification and presentation adjustments and concluded they are not material to the consolidated financial statements for any of the periods presented.
(f) Recently issued accounting pronouncements
The authoritative bodies release standards and guidance which are assessed by management for impact on the Company’s consolidated financial statements.
The following recently released accounting standards have been adopted by the Company:
In July 2025, the Financial Accounting Standards Board ("FASB") issued ASU No. 2025-05, "Financial Instruments—Credit Losses (Topic 326)." This Accounting Standard Update ("ASU") provides public entities with an additional practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions under ASC 606. This includes assets acquired in business combinations or through consolidation of VIEs that is not a business if those assets arose from transactions that the acquiree or variable interest entity accounted for under ASC 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this ASU beginning January 1, 2026. The adoption of this ASU did not have a material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
2. Summary of significant accounting policies (Continued)
The following recently released accounting standards have not yet been adopted by the Company:
In November 2024, the FASB issued ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosure (Topic 220-40)." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB further issued ASU No 2025-01, which clarifies the effective date for adoption of ASU No 2024-03. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on the presentation of its consolidated statements of income and disclosures.
In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)." This ASU provides guidance to clarify and modernize the accounting for costs related to internal-use software. It removes all references to project stages in ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. The ASU also specifies that the property, plant and equipment disclosure requirements under ASC 360-10 apply to capitalized software costs accounted for under ASC 350-40, regardless of how those costs are presented in the financial statements. The guidance, which applies to all entities, is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Entities may apply the guidance using a prospective, retrospective or modified transition approach. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-09, “Derivatives and Hedging (Topic 815)." This ASU clarifies certain aspects of the guidance on hedge accounting and addresses several incremental hedge accounting issues arising from the global reference rate reform initiative. The amendments in this ASU apply to any entity that elects to apply hedge accounting in accordance with Topic 815. The guidance, which applies to all entities, is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU should be applied prospectively for all hedging relationships. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-10, “Government Grants (Topic 832)." This ASU adds guidance to ASC 832 on the recognition, measurement, and presentation of government grants. In the absence of such guidance, many for-profit entities historically have analogized to other U.S. GAAP, including IAS 20 or ASC 958-605, when accounting for government grants. The amendments in this ASU apply to business entities (specifically, all entities except for not-for-profit entities and employee benefit plans) that receive a government grant. The guidance under this ASU is effective for fiscal years beginning after December 15, 2028, and interim periods within those fiscal years. Early adoption is permitted. Entities may apply the guidance using a modified prospective, modified retrospective or retrospective transition approach. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, “Interim Reporting (Topic 270): Narrow-scope improvements." This ASU specifies the form and content choices for interim financial statements and accompanying notes, incorporates a comprehensive list of required interim disclosures and introduces a disclosure principle to disclose events since the end of the previous annual reporting period that have material impact on the entity. The amendments in this ASU apply to all entities that provide interim financial statements and notes in accordance with U.S. GAAP. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-12, “Codification Improvements." This ASU enhances the usability of the ASC by refining accounting guidance and streamlining its application through technical corrections, making standards more consistent and easier to interpret for preparers and users. The amendments in this ASU apply to all reporting entities. The guidance under this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
3. Business acquisitions
XponentL Data, Inc.
On June 5, 2025, the Company, by way of a merger, acquired 100% of the outstanding equity interest in XponentL Data, Inc., a Delaware corporation, and certain affiliated entities in Albania, India and Kosovo (collectively referred to as “XponentL”) for total purchase consideration of $160,157 (including $2,273 of cash acquired), which includes the following:
i.Cash consideration paid by the Company to the sellers of XponentL on the closing date of $82,657; and
ii.Final earn-out consideration of $77,500 paid by the Company in the three months ended March 31, 2026 to the sellers of XponentL based on the actual performance of the acquired business through the year ended December 31, 2025 relative to the thresholds specified in the earn-out calculation. See Note 5, “Fair value measurements,” for additional details.
No portion of the purchase consideration is outstanding as of June 30, 2026.
This acquisition adds differentiated domain-led data strategy, design, and engineering capabilities, deep industry experience, and strategic partnerships. It also builds on the Company's pivot to data, AI, and other advanced technologies, enhancing the Company's ability to help its clients across the lifecycle of AI transformation, from strategy through implementation.
In connection with this acquisition, the Company recorded $51,400 in customer-related intangibles and $6,000 in marketing-related intangibles, which have a weighted average amortization period of five years. Goodwill arising from the acquisition amounting to $112,271 has been allocated using a relative fair value allocation method to each of the Company’s reporting segments as follows: to the Financial Services segment in the amount of $6,151, to the Consumer and Healthcare segment in the amount of $88,793 and to the High Tech and Manufacturing segment in the amount of $17,327. The goodwill arising from this acquisition is not deductible for income tax purposes. The goodwill represents primarily the acquired capabilities and other benefits expected to result from combining the acquired operations with those of the Company.
Acquisition-related costs of $1,310 have been included in selling, general and administrative expenses as incurred. In connection with the acquisition, the Company also acquired certain assets with a value of $6,954, assumed certain liabilities amounting to $2,408 and recognized a net deferred tax liability of $14,060. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition.
4. Accounts receivable, net of allowance for credit losses
The following table provides details of the Company’s allowance for credit losses on accounts receivable:
| | | | | | | | | | | |
| Six months ended June 30, 2026 | | Year ended December 31, 2025 |
| Opening balance as of January 1 | $ | 22,097 | | | $ | 12,094 | |
| Additions (net), charged to income statement | 6,631 | | | 17,193 | |
| Deductions/effect of exchange rate fluctuations | (7,508) | | | (7,190) | |
| Closing balance | $ | 21,220 | | | $ | 22,097 | |
Accounts receivable were $1,424,035 and $1,262,647, and allowances for credit losses were $21,220 and $22,097, resulting in net accounts receivable balances of $1,402,815 and $1,240,550 as of June 30, 2026 and December 31, 2025, respectively.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
4. Accounts receivable, net of allowance for credit losses (Continued)
In addition, deferred billings were $297,009 and $232,647 and allowances for credit losses on deferred billings were $13,438 and $10,659, resulting in net deferred billings balances of $283,571 and $221,988 as of June 30, 2026 and December 31, 2025, respectively.
During the three months ended June 30, 2026 and 2025, the Company recorded charges of $1,003 and $1,989, respectively, and for the six months ended June 30, 2026 and 2025, a charge of $2,779 and $541, respectively, to the income statement on account of credit losses on deferred billings. Deferred billings, net of related allowances for credit losses, are included under “Other assets” in the Company’s consolidated balance sheets as of June 30, 2026 and December 31, 2025.
The Company has a revolving accounts receivable-based facility of $100,000 as of June 30, 2026 and December 31, 2025 that permits it to sell accounts receivable to banks on a non-recourse basis in the ordinary course of business. The aggregate maximum capacity utilized by the Company at any time during the six months ended June 30, 2026 and year ended December 31, 2025 was $79,461 and $59,952, respectively. The principal amount outstanding against this facility as of June 30, 2026 and December 31, 2025 was $77,081 and $55,140, respectively. The cost of factoring such accounts receivable during the three and six months ended June 30, 2026 and 2025 was $726 and $403, respectively, and $1,407 and $1,081, respectively. Gains or losses on the sales are recorded at the time of transfer of the accounts receivable and are included under "interest income (expense), net" in the Company’s consolidated statements of income.
The Company also has arrangements with financial institutions that manage the accounts payable program for certain of the Company's large clients. The Company sells certain accounts receivable pertaining to such clients to these financial institutions on a non-recourse basis. There is no cap on the value of accounts receivable that can be sold under these arrangements. The Company used these arrangements to sell accounts receivable amounting to $147,315 during the six months ended June 30, 2026 and $327,207 during the year ended December 31, 2025, which also represent the maximum capacity utilized under these arrangements in each such period. The cost of factoring such accounts receivable during the three and six months ended June 30, 2026 and 2025 was $1,143 and $1,403, respectively, and $2,444 and $2,579, respectively. These costs are included under "interest income (expense), net" in the Company’s consolidated statements of income.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
5. Fair value measurements
The Company measures certain financial assets and liabilities, including derivative instruments, at fair value on a recurring basis. The fair value measurements of these financial assets and liabilities were determined using the following inputs as of June 30, 2026 and December 31, 2025:
| | | | | | | | | | | | | | | | | | | | | | | |
| As of June 30, 2026 |
| Fair Value Measurements at Reporting Date Using |
| | | Quoted Prices in
Active Markets for
Identical Assets | | Significant
Other Observable
Inputs | | Significant
Other Unobservable
Inputs |
| Total | | (Level 1) | | (Level 2) | | (Level 3) |
| Assets | | | | | | | |
| Derivative instruments (Note a, c) | $ | 31,847 | | | $ | — | | | $ | 31,847 | | | $ | — | |
| Deferred compensation plan assets (Note a, e) | 86,670 | | | — | | | — | | | 86,670 | |
| Total | $ | 118,517 | | | $ | — | | | $ | 31,847 | | | $ | 86,670 | |
| Liabilities | | | | | | | |
| Derivative instruments (Note b, c) | 143,740 | | | — | | | 143,740 | | | — | |
| Deferred compensation plan liability (Note b, f) | 85,916 | | | — | | | — | | | 85,916 | |
| Total | $ | 229,656 | | | $ | — | | | $ | 143,740 | | | $ | 85,916 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2025 |
| Fair Value Measurements at Reporting Date Using |
| | | Quoted Prices in
Active Markets for
Identical Assets | | Significant
Other Observable
Inputs | | Significant
Other Unobservable
Inputs |
| Total | | (Level 1) | | (Level 2) | | (Level 3) |
| Assets | | | | | | | |
| Derivative instruments (Note a, c) | $ | 15,440 | | | $ | — | | | $ | 15,440 | | | $ | — | |
| Deferred compensation plan assets (Note a, e) | 75,586 | | | — | | | — | | | 75,586 | |
| Total | $ | 91,026 | | | $ | — | | | $ | 15,440 | | | $ | 75,586 | |
| Liabilities | | | | | | | |
| Earn-out consideration (Note b, d) | 77,500 | | | — | | | — | | | 77,500 | |
| Derivative instruments (Note b, c) | 105,009 | | | — | | | 105,009 | | | — | |
| Deferred compensation plan liability (Note b, f) | 74,820 | | | — | | | — | | | 74,820 | |
| Total | $ | 257,329 | | | $ | — | | | $ | 105,009 | | | $ | 152,320 | |
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
5. Fair value measurements (Continued)
(a)Derivative assets are included in “prepaid expenses and other current assets” and “other assets” in the consolidated balance sheets. Deferred compensation plan assets are included in “other assets” in the consolidated balance sheets.
(b)Included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets.
(c)The Company values its derivative instruments based on market observable inputs, including both forward and spot prices for the relevant currencies and interest rate indices for relevant interest rates. The quotes are taken from an independent market database.
(d)The fair value of earn-out consideration, calculated as the present value of expected future payments to be made to the sellers of acquired businesses, was derived by estimating the future financial performance of the acquired businesses using the earn-out formulas and performance targets specified in the purchase agreements and adjusting the result to reflect the Company’s estimate of the likelihood of achievement of such targets. Given the significance of the unobservable inputs, the valuations are classified in level 3 of the fair value hierarchy.
(e)Deferred compensation plan assets consist of life insurance policies held under a Rabbi Trust. Assets held in the Rabbi Trust are valued based on the cash surrender value of the insurance contract, which is determined based on the fair value of the underlying assets included in the insurance portfolio and are therefore classified within level 3 of the fair value hierarchy.
(f)The fair value of the deferred compensation plan liability is derived based on the fair value of the underlying assets in the insurance policies and is therefore classified within level 3 of the fair value hierarchy.
The following table provides a roll-forward of the fair value of earn-out consideration categorized as level 3 in the fair value hierarchy for the three and six months ended June 30, 2026 and 2025:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Opening balance | $ | — | | | $ | — | | | $ | 77,500 | | | $ | — | |
| Earn-out consideration payable in connection with acquisitions | — | | | 77,500 | | | (77,500) | | | 77,500 | |
| Closing balance | $ | — | | | $ | 77,500 | | | $ | — | | | $ | 77,500 | |
The following table provides a roll-forward of the fair value of deferred compensation plan assets categorized as level 3 in the fair value hierarchy for the three and six months ended June 30, 2026 and 2025:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Opening balance | $ | 76,775 | | | $ | 61,812 | | | $ | 75,586 | | | $ | 61,549 | |
| Additions (net of redemption) | 1,107 | | | 941 | | | 3,733 | | | 2,345 | |
| Change in fair value of deferred compensation plan assets (Note a) | 8,788 | | | 5,603 | | | 7,351 | | | 4,462 | |
| Closing balance | $ | 86,670 | | | $ | 68,356 | | | $ | 86,670 | | | $ | 68,356 | |
(a)Changes in the fair value of plan assets are reported in “other income (expense), net” in the consolidated statements of income.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
5. Fair value measurements (Continued)
The following table provides a roll-forward of the fair value of deferred compensation plan liabilities categorized as level 3 in the fair value hierarchy for the three and six months ended June 30, 2026 and 2025:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six Months Ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Opening balance | $ | 76,178 | | | $ | 61,196 | | | $ | 74,820 | | | $ | 60,924 | |
| Additions (net of redemption) | 962 | | | 941 | | | 3,748 | | | 2,345 | |
| Change in fair value of deferred compensation plan liabilities (Note a) | 8,776 | | | 5,595 | | | 7,348 | | | 4,463 | |
| Closing balance | $ | 85,916 | | | $ | 67,732 | | | $ | 85,916 | | | $ | 67,732 | |
(a)Changes in the fair value of deferred compensation plan liabilities are reported in “selling, general and administrative expenses” in the consolidated statements of income.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. Derivative financial instruments
The Company is exposed to the risk of rate fluctuations on its foreign currency assets and liabilities and on foreign currency denominated forecasted cash flows and interest rates. The Company has established risk management policies, including the use of derivative financial instruments to hedge foreign currency assets and liabilities, foreign currency denominated forecasted cash flows and interest rate risk. These derivative financial instruments consist of deliverable and non-deliverable forward foreign exchange contracts, treasury rate locks and interest rate swaps. The Company enters into these contracts with counterparties that are banks or other financial institutions, and the Company considers the risk of non-performance by such counterparties not to be material. The forward foreign exchange contracts and interest rate swaps mature during a period of up to 42 months and the forecasted transactions are expected to occur during the same period.
The following table presents the aggregate notional principal amounts of outstanding derivative financial instruments together with the related balance sheet exposure:
| | | | | | | | | | | | | | | | | | | | | | | |
| Notional principal amounts (Note a) | | Balance sheet exposure asset (liability) (Note b) |
| As of June 30, 2026 | | As of December 31, 2025 | | As of June 30, 2026 | | As of December 31, 2025 |
| Foreign exchange forward contracts denominated in: | | | | | | | |
| United States Dollars (sell) Indian Rupees (buy) | $ | 2,278,467 | | | $ | 2,771,310 | | | $ | (108,460) | | | $ | (72,843) | |
| United States Dollars (sell) Mexican Peso (buy) | 50,400 | | | 71,400 | | | 4,215 | | | 2,201 | |
| United States Dollars (sell) Philippines Peso (buy) | 187,100 | | | 234,000 | | | (8,979) | | | (5,739) | |
| Euro (sell) United States Dollars (buy) | 385,648 | | | 446,846 | | | 4,705 | | | (9,636) | |
| Euro (sell) Romanian Leu (buy) | 30,837 | | | 63,353 | | | (310) | | | 143 | |
| Japanese Yen (sell) Chinese Renminbi (buy) | 62,939 | | | 67,617 | | | 7,118 | | | 3,746 | |
| United States Dollars (sell) Chinese Renminbi (buy) | 61,800 | | | 82,800 | | | 1,963 | | | 144 | |
| Pound Sterling (sell) United States Dollars (buy) | 68,167 | | | 92,322 | | | 492 | | | (279) | |
| United States Dollars (sell) Hungarian Forint (buy) | 20,000 | | | 33,000 | | | 2,279 | | | 2,524 | |
| Australian Dollars (sell) Indian Rupees (buy) | 171,591 | | | 189,797 | | | (15,003) | | | (8,204) | |
| United States Dollars (sell) Polish Zloty (buy) | 28,500 | | | 42,000 | | | (69) | | | 1,884 | |
| Japanese Yen (sell) United States Dollars (buy) | — | | | 7,000 | | | — | | | 238 | |
| United States Dollars (sell) Israeli Shekel (buy) | 30,000 | | | 30,000 | | | 1,467 | | | 1,025 | |
| South African Rand (sell) United States Dollars (buy) | 15,000 | | | 18,000 | | | (1,346) | | | (1,186) | |
| United States Dollars (sell) Brazilian Real (buy) | 4,000 | | | 4,000 | | | 244 | | | (46) | |
| United States Dollars (sell) Costa Rica Colon (buy) | 27,500 | | | 44,400 | | | 2,758 | | | 773 | |
| United States Dollars (sell) Canadian Dollar (buy) | 9,000 | | | 9,000 | | | (167) | | | 193 | |
| United States Dollars (sell) Malaysian Ringgit (buy) | 21,500 | | | 21,000 | | | (64) | | | 486 | |
| United States Dollars (sell) Singapore Dollar (buy) | 75,000 | | | — | | | (972) | | | — | |
| Interest rate swaps (floating to fixed) | 215,625 | | | 221,875 | | | (1,764) | | | (4,993) | |
| | | | | $ | (111,893) | | | $ | (89,569) | |
(a)Notional amounts are key elements of derivative financial instrument agreements but do not represent the amount exchanged by counterparties and do not measure the Company’s exposure to credit, foreign exchange, interest rate or market risks. However, the amounts exchanged are based on the notional amounts and other provisions of the underlying derivative financial instrument agreements. Notional amounts are denominated in U.S. dollars.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. Derivative financial instruments (Continued)
(b)Balance sheet exposure is denominated in U.S. dollars and denotes the mark-to-market impact of the derivative financial instruments on the reporting date.
FASB guidance on derivatives and hedging requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. In accordance with FASB guidance on derivatives and hedging, the Company designates foreign exchange forward contracts, interest rate swaps and treasury rate locks as cash flow hedges. Foreign exchange forward contracts are entered into to cover the effects of future exchange rate variability on forecasted revenues and purchases of services, and interest rate swaps and treasury rate locks are entered into to cover interest rate fluctuation risk. In addition to this program, the Company uses derivative instruments that are not accounted for as hedges under FASB guidance in order to hedge foreign exchange risks related to balance sheet items, such as receivables and intercompany borrowings, that are denominated in currencies other than the Company’s underlying functional currency.
The fair value of the Company’s derivative instruments and their location in the Company’s financial statements are summarized in the table below:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cash flow hedges | | Non-designated |
| | As of June 30, 2026 | | As of December 31, 2025 | | As of June 30, 2026 | | As of December 31, 2025 |
| Assets | | | | | | | | |
| Prepaid expenses and other current assets | | $ | 15,068 | | | $ | 9,257 | | | $ | 6,655 | | | $ | 2,076 | |
| Other assets | | $ | 10,124 | | | $ | 4,107 | | | $ | — | | | $ | — | |
| | | | | | | | |
| Liabilities | | | | | | | | |
| Accrued expenses and other current liabilities | | $ | 71,501 | | | $ | 47,648 | | | $ | 11,221 | | | $ | 12,947 | |
| Other liabilities | | $ | 61,018 | | | $ | 44,414 | | | $ | — | | | $ | — | |
Cash flow hedges
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain (loss) on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction is recognized in the consolidated statements of income. Gains (losses) on the derivatives, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in earnings as incurred.
In March 2021, the Company executed a treasury rate lock agreement for $350,000 in connection with future interest payments to be made on its senior notes issued in March 2021 by Genpact Luxembourg S.à r.l. (“Genpact Luxembourg”) and Genpact USA, Inc. (“Genpact USA”), both wholly-owned subsidiaries of the Company, and the treasury rate lock was designated as a cash flow hedge. The treasury rate lock agreement was terminated on March 23, 2021 and a deferred gain was recorded in accumulated other comprehensive income (loss). This gain is being amortized to interest expense over the life of the 2021 Senior Notes (as defined in Note 11 below). The remaining gain to be amortized related to the treasury rate lock agreement as of June 30, 2026 and December 31, 2025 was $0 and $44, respectively. The 2021 Senior Notes were repaid on April 10, 2026.
In May 2024, the Company executed treasury rate lock agreements for $400,000 in connection with future interest payments to be made on its senior notes issued in June 2024 by Genpact Luxembourg and Genpact USA, and the treasury rate locks were designated as cash flow hedges. These treasury rate lock agreements were terminated on May 30, 2024 and a deferred loss was recorded in accumulated other comprehensive income (loss). This loss is being amortized to interest expense over the life of the 2024 Senior Notes (as defined in Note 11 below). The remaining loss to be amortized related to the treasury rate lock agreements as of June 30, 2026 and December 31, 2025 was $232 and $272, respectively.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. Derivative financial instruments (Continued)
In November 2025, the Company executed treasury rate lock agreements for $350,000 in connection with future interest payments to be made on its senior notes issued in November 2025 by Genpact UK Finco plc and Genpact USA, and the treasury rate locks were designated as cash flow hedges. These treasury rate lock agreements were terminated on November 13, 2025 and a deferred loss was recorded in accumulated other comprehensive income (loss). This loss is being amortized to interest expense over the life of the 2025 Senior Notes (as defined in Note 11 below). The remaining loss to be amortized related to the treasury rate lock agreements as of June 30, 2026 and December 31, 2025 was $203 and $226, respectively.
In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss) (“OCI”), and the related tax effects are summarized below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, |
| | 2026 | | 2025 |
| | Before
tax
Amount | | Tax
(Expense)
or Benefit | | Net of
tax
Amount | | Before
tax
Amount | | Tax
(Expense)
or Benefit | | Net of
tax
Amount |
| Opening balance | | $ | (157,767) | | | $ | 39,532 | | | $ | (118,235) | | | $ | (11,601) | | | $ | 2,966 | | | $ | (8,635) | |
| Net gains (losses) reclassified into statement of income on completion of hedged transactions | | (19,876) | | | 5,260 | | | (14,616) | | | (693) | | | 287 | | | (406) | |
| Changes in fair value of effective portion of outstanding derivatives, net | | 30,128 | | | (7,261) | | | 22,867 | | | 1,615 | | | 536 | | | 2,151 | |
| Gain (loss) on cash flow hedging derivatives, net | | 50,004 | | | (12,521) | | | 37,483 | | | 2,308 | | | 249 | | | 2,557 | |
| Closing balance | | $ | (107,763) | | | $ | 27,011 | | | $ | (80,752) | | | $ | (9,293) | | | $ | 3,215 | | | $ | (6,078) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six months ended June 30, |
| | 2026 | | 2025 |
| | Before
tax
Amount | | Tax
(Expense)
or Benefit | | Net of
tax
Amount | | Before
tax
Amount | | Tax
(Expense)
or Benefit | | Net of
tax
Amount |
| Opening balance | | $ | (79,151) | | | $ | 19,815 | | | $ | (59,336) | | | $ | (29,271) | | | $ | 6,809 | | | $ | (22,462) | |
| Net gains (losses) reclassified into statement of income on completion of hedged transactions | | (31,371) | | | 8,358 | | | (23,013) | | | (5,921) | | | 1,521 | | | (4,400) | |
| Changes in fair value of effective portion of outstanding derivatives, net | | (59,983) | | | 15,554 | | | (44,429) | | | 14,057 | | | (2,073) | | | 11,984 | |
| Gain (loss) on cash flow hedging derivatives, net | | (28,612) | | | 7,196 | | | (21,416) | | | 19,978 | | | (3,594) | | | 16,384 | |
| Closing balance | | $ | (107,763) | | | $ | 27,011 | | | $ | (80,752) | | | $ | (9,293) | | | $ | 3,215 | | | $ | (6,078) | |
The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Derivatives in Cash Flow Hedging Relationships | Amount of Gain (Loss) recognized in OCI on Derivatives (Effective Portion) | | Location of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion) | | Amount of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion) |
| Three months ended June 30, | | Six months ended June 30, | | | Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 | | | 2026 | | 2025 | | 2026 | | 2025 |
| Forward foreign exchange contracts | $ | 29,139 | | | $ | 2,713 | | | $ | (62,232) | | | $ | 16,552 | | | Revenue | | $ | 614 | | | $ | (155) | | | $ | 389 | | | $ | 844 | |
| Interest rate swaps | 989 | | | (1,098) | | | 2,249 | | | (2,495) | | | Cost of revenue | | (15,849) | | | (369) | | | (25,296) | | | (5,719) | |
| | | | | | | | | Selling, general and administrative expenses | | (4,114) | | | (52) | | | (5,467) | | | (822) | |
| | | | | | | | | Interest expense | | (527) | | | (117) | | | (997) | | | (224) | |
| $ | 30,128 | | | $ | 1,615 | | | $ | (59,983) | | | $ | 14,057 | | | | | $ | (19,876) | | | $ | (693) | | | $ | (31,371) | | | $ | (5,921) | |
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
6. Derivative financial instruments (Continued)
There were no gains (losses) recognized in the statement of income on the ineffective portion of derivatives designated as cash flow hedges and excluded from effectiveness testing for the three and six months ended June 30, 2026 and 2025, respectively.
Non-designated Hedges
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Amount of Gain (Loss) recognized in Statement of Income on Derivatives |
| | | | Three months ended June 30, | | Six months ended June 30, |
| Derivatives not designated as hedging instruments | | Location of Gain (Loss) recognized in Statement of Income on Derivatives | | 2026 | | 2025 | | 2026 | | 2025 |
| Forward foreign exchange contracts (Note a) | | Foreign exchange gains (losses), net | | $ | 3,439 | | | $ | 3,846 | | | $ | (20,865) | | | $ | 8,476 | |
| | | | $ | 3,439 | | | $ | 3,846 | | | $ | (20,865) | | | $ | 8,476 | |
(a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items such as receivables and intercompany borrowings and were not originally designated as hedges under FASB guidance on derivatives and hedging. Realized gains (losses) and changes in the fair value of these derivatives are recorded in foreign exchange gains, net in the consolidated statements of income.
7. Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following:
| | | | | | | | | | | |
| As of June 30, 2026 | | As of December 31, 2025 |
| Advance income and non-income taxes | $ | 60,973 | | | $ | 61,065 | |
| Contract asset (Note 19) | 43,644 | | | 35,583 | |
| Prepaid expenses | 54,788 | | | 51,778 | |
| Derivative instruments (Note 6) | 21,723 | | | 11,333 | |
| Employee advances | 4,188 | | | 3,353 | |
| Deposits | 3,313 | | | 2,280 | |
| Advances to suppliers | 2,162 | | | 2,913 | |
| Others | 59,761 | | | 43,676 | |
| Total | $ | 250,552 | | | $ | 211,981 | |
8. Property, plant and equipment, net
The following table provides the gross and net amount of property, plant and equipment: | | | | | | | | | | | |
| As of June 30, 2026 | | As of December 31, 2025 |
| Property, plant and equipment, gross* | $ | 755,330 | | | $ | 773,392 | |
| Less: Accumulated depreciation and amortization | (570,893) | | | (582,944) | |
| Property, plant and equipment, net | $ | 184,437 | | | $ | 190,448 | |
*Including capital work in progress
Depreciation expense on property, plant and equipment for the three months ended June 30, 2026 and 2025 was $12,625 and $13,515, respectively, and for the six months ended June 30, 2026 and 2025 was $26,000 and $26,992, respectively. Computer software amortization for the three months ended June 30, 2026 and 2025 was $269 and $573, respectively, and for the six months ended June 30, 2026 and 2025 was $630 and $1,075, respectively.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
9. Goodwill and intangible assets
The following table presents the changes in goodwill for the six months ended June 30, 2026 and year ended December 31, 2025:
| | | | | | | | | | | |
| For the six months ended June 30, 2026 | | For the year ended December 31, 2025 |
| Opening balance | $ | 1,781,116 | | | $ | 1,669,769 | |
| Goodwill relating to acquisitions consummated during the period | — | | 111,925 | |
| Impact of measurement period adjustments | — | | 346 | |
| Effect of exchange rate fluctuations | (12,254) | | (924) | |
| Closing balance | $ | 1,768,862 | | | $ | 1,781,116 | |
The following table presents the changes in goodwill by reporting unit for the six months ended June 30, 2026:
| | | | | | | | | | | | | | | | | | | | | | | |
| Financial Services | | Consumer and Healthcare | | High Tech and Manufacturing | | Total |
| Opening balance | $ | 411,428 | | | $ | 676,484 | | | $ | 693,204 | | | $ | 1,781,116 | |
| Effect of exchange rate fluctuations | (2,781) | | | (4,585) | | | (4,888) | | | (12,254) | |
| Closing balance | $ | 408,647 | | | $ | 671,899 | | | $ | 688,316 | | | $ | 1,768,862 | |
The following table presents the changes in goodwill by reporting unit for the year ended December 31, 2025:
| | | | | | | | | | | | | | | | | | | | | | | |
| Financial Services | | Consumer and Healthcare | | High Tech and Manufacturing | | Total |
| Opening balance | $ | 404,997 | | | $ | 587,797 | | | $ | 676,975 | | | $ | 1,669,769 | |
| Goodwill relating to acquisitions consummated during the period | 6,132 | | | 88,519 | | | 17,274 | | | 111,925 | |
| Impact of measurement period adjustments | 19 | | | 274 | | | 53 | | | 346 | |
| Effect of exchange rate fluctuations | 280 | | | (106) | | | (1,098) | | | (924) | |
| Closing balance | $ | 411,428 | | | $ | 676,484 | | | $ | 693,204 | | | $ | 1,781,116 | |
The total amount of the Company's goodwill deductible for income tax purposes was $196,284 and $210,585 as of June 30, 2026 and December 31, 2025, respectively.
The Company’s intangible assets are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As of June 30, 2026 | | As of December 31, 2025 |
| Gross
carrying amount | | Accumulated amortization
& Impairment | | Net | | Gross
carrying amount | | Accumulated amortization
& Impairment | | Net |
| Customer-related intangible assets | $ | 510,856 | | | $ | 462,760 | | | $ | 48,096 | | | $ | 513,977 | | | $ | 459,682 | | | $ | 54,295 | |
| Marketing-related intangible assets | 102,153 | | | 102,153 | | | — | | | 102,233 | | | 102,208 | | | 25 | |
| Technology-related intangible assets | 158,807 | | | 133,630 | | | 25,177 | | | 141,659 | | | 128,939 | | | 12,720 | |
| $ | 771,816 | | | $ | 698,543 | | | $ | 73,273 | | | $ | 757,869 | | | $ | 690,829 | | | $ | 67,040 | |
Amortization expenses for intangible assets acquired as part of a business combination and disclosed in the consolidated statements of income under amortization of acquired intangible assets for the three months ended June 30, 2026 and 2025 were $3,287 and $4,317, respectively, and for the six months ended June 30, 2026 and 2025 were $6,399 and $8,637, respectively.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
9. Goodwill and intangible assets (Continued)
Amortization expenses for internally-developed and other intangible assets disclosed in the consolidated statements of income under cost of revenue and selling, general and administrative expenses for the three months ended June 30, 2026 and 2025 were $2,286 and $700, respectively, and for the six months ended June 30, 2026 and 2025 were $4,070 and $1,318, respectively.
10. Short-term borrowings
The Company has the following borrowing facilities:
a.Fund-based and non-fund-based credit facilities with banks, which are available for operational requirements in the form of overdrafts, letters of credit, guarantees and short-term loans. As of June 30, 2026 and December 31, 2025, the limits available were $30,920 and $26,563, respectively, of which $7,644 and $7,988, respectively, was utilized, constituting non-funded drawdown.
b.A fund-based and non-fund based revolving credit facility of $650,000, which the Company obtained by entering into an amended and restated credit agreement (the "2022 Credit Agreement") with Genpact USA, Genpact Global Holdings (Bermuda) Limited ("GGH") and Genpact Luxembourg, each wholly owned subsidiaries of the Company (Genpact Luxembourg, Genpact USA and GGH, collectively, the "Borrowers"), as borrowers, Wells Fargo, National Association ("Wells Fargo"), as administrative agent, swingline lender and issuing bank, and the lenders and other parties thereto on December 13, 2022. The term loan and revolving credit facility under the 2022 Credit Agreement expire on December 13, 2027. Borrowings under the 2022 Credit Agreement bear interest at a rate equal to, at the election of the Company, either Adjusted Term SOFR (which is the rate per annum equal to (a) Term SOFR (the forward-looking secured overnight financing rate) plus (b) a Term SOFR Adjustment of 0.10% per annum, but in no case lower than 0.0%) plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum. The unutilized amount on the revolving credit facility under the 2022 Credit Agreement bore a commitment fee of 0.20% as of June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, a total of $1,257 was utilized, all of which constituted non-funded drawdown. The 2022 Credit Agreement contains certain customary covenants, including a maximum leverage covenant and a minimum interest coverage ratio. As of June 30, 2026 and December 31, 2025, the Company was in compliance with the financial covenants of the 2022 Credit Agreement.
11. Long-term debt
In December 2022, the Company amended its existing credit facility under its amended and restated credit agreement entered into in August 2018 and entered into the 2022 Credit Agreement, which is comprised of a $530,000 term loan and a $650,000 revolving credit facility. The 2022 Credit Agreement is guaranteed by the Company and certain of its subsidiaries. The obligations under the 2022 Credit Agreement are unsecured.
Borrowings under the 2022 Credit Agreement bear interest at a rate equal to, at the election of the Company, either Adjusted Term SOFR (which is the rate per annum equal to (a) Term SOFR (the forward-looking secured overnight financing rate) plus (b) a Term SOFR Adjustment of 0.10% per annum, but in no case lower than 0.00%) plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum, in each case subject to adjustment based on the Borrowers' debt ratings provided by Standard & Poor’s Rating Services and Moody’s Investors Service, Inc. (the "Debt Ratings"). The revolving credit commitments under the 2022 Credit Agreement are subject to a commitment fee equal to 0.20% per annum, subject to adjustment based on the Debt Ratings. The commitment fee accrues on the actual daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving loans and letter of credit obligations.
The 2022 Credit Agreement restricts certain payments, including dividend payments, if there is an event of default under the 2022 Credit Agreement or if the Company is not, or after making the payment would not be, in compliance with certain financial covenants contained in the 2022 Credit Agreement. These covenants require the Company to maintain a net debt to EBITDA leverage ratio of less than 3x and an interest coverage ratio of more than 3x. As of June 30, 2026, the Company was in compliance with the terms of the 2022 Credit Agreement, including all of the financial covenants therein. The Company’s retained earnings are not subject to any restrictions on availability to make dividend payments to shareholders, subject to compliance with the financial covenants described above that are contained in the 2022 Credit Agreement.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
11. Long-term debt (Continued)
As of June 30, 2026 and December 31, 2025, the amount outstanding under the Company's term loan, net of unamortized debt issuance costs of $429 and $584, was $436,821 and $449,916, respectively.
Indebtedness under the 2022 Credit Agreement is unsecured. The amount outstanding on the term loan as of June 30, 2026 requires quarterly payments of $6,625, and the balance of the loan is due and payable upon the maturity of the term loan on December 13, 2027.
The maturity profile of the term loan outstanding as of June 30, 2026, net of unamortized debt issuance costs, is as follows:
| | | | | |
| Year ended | Amount |
| 2026 | 13,097 | |
| 2027 | 423,724 | |
| Total | $ | 436,821 | |
In March 2021, Genpact Luxembourg and Genpact USA co-issued $350,000 aggregate principal amount of 1.750% senior notes (the “2021 Senior Notes”). The 2021 Senior Notes were fully guaranteed by the Company and Genpact UK Finco plc. The total debt issuance cost of $3,032 incurred in connection with the 2021 Senior Notes was amortized over the life of the 2021 Senior Notes as additional interest expense. As of June 30, 2026 and December 31, 2025, the amount outstanding under the 2021 Senior Notes, net of unamortized debt issuance costs of $0 and $165, respectively, was $0 and 349,835, respectively. The 2021 Senior Notes were repaid on April 10, 2026.
In June 2024, Genpact Luxembourg and Genpact USA co-issued $400,000 aggregate principal amount of 6.000% senior notes (the “2024 Senior Notes”). The 2024 Senior Notes are fully guaranteed by the Company and Genpact UK Finco plc. The total debt issuance cost of $4,395 incurred in connection with the 2024 Senior Notes is being amortized over the life of the 2024 Senior Notes as additional interest expense. As of June 30, 2026 and December 31, 2025, the amount outstanding under the 2024 Senior Notes, net of unamortized debt issuance costs of $2,571 and $3,005, respectively, was $397,429 and $396,994, respectively, which is payable on June 4, 2029.
In November 2025, Genpact UK Finco plc and Genpact USA co-issued $350,000 aggregate principal amount of 4.950% senior notes (the “2025 Senior Notes,” and together with the 2024 Senior Notes, the "Senior Notes"). The 2025 Senior Notes are fully guaranteed by the Company and Genpact Luxembourg. The total debt issuance cost of $4,551 incurred in connection with the 2025 Senior Notes is being amortized over the life of the 2025 Senior Notes as additional interest expense. As of June 30, 2026 and December 31, 2025, the amount outstanding under the 2025 Senior Notes, net of unamortized debt issuance costs of $3,993 and $4,444, respectively, was $346,007 and $345,556, respectively, which is payable on November 18, 2030.
The Company paid interest on the 2021 Senior Notes semi-annually in arrears on April 10 and October 10 of each year through the maturity date of April 10, 2026. The Company pays interest on (i) the 2024 Senior Notes semi-annually in arrears on June 4 and December 4 of each year and (ii) the 2025 Senior Notes semi-annually in arrears on May 18 and November 18 of each year, ending on the maturity dates of June 4, 2029 and November 18, 2030, respectively. The Company, at its option, may redeem the Senior Notes at any time in whole or in part, at a redemption price equal to (i) 100% of the principal amount of the notes redeemed, together with accrued and unpaid interest on the redeemed amount, and (ii) if the notes are redeemed prior to, in the case of the 2024 Senior Notes, May 4, 2029, and in the case of the 2025 Senior Notes, October 18, 2030, a specified “make-whole” premium. Additionally, the Company may redeem any series of Senior Notes in whole, but not in part, at any time at a redemption price equal to 100% of the principal amount thereof, together with accrued and unpaid interest to the redemption date, in the event of certain changes in taxation in any jurisdiction (other than the U.S.) having authority to tax the issuers. Upon certain change of control transactions, the applicable issuer or issuers will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus accrued and unpaid interest. The Senior Notes are subject to certain customary covenants, including limitations on the ability of the Company and certain of its subsidiaries to incur debt secured by liens, engage in certain sale and leaseback transactions and consolidate, merge, convey or transfer their assets substantially as an entirety. During the period ended June 30, 2026, the Company and its applicable subsidiaries were in compliance with the covenants under the Senior Notes.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
11. Long-term debt (Continued)
A summary of the Company’s long-term debt is as follows:
| | | | | | | | | | | |
| As of June 30, 2026 | | As of December 31, 2025 |
| Credit facility, net of unamortized debt issuance costs | $ | 436,821 | | | $ | 449,916 | |
1.750% 2021 Senior Notes, net of unamortized debt issuance costs | — | | | 349,835 | |
6.000% 2024 Senior Notes, net of unamortized debt issuance costs | 397,429 | | | 396,994 | |
4.950% 2025 Senior Notes, net of unamortized debt issuance costs | 346,007 | | | 345,556 | |
| Total | $ | 1,180,257 | | | $ | 1,542,301 | |
| Current portion | 26,201 | | 376,027 |
| Non-current portion | 1,154,056 | | 1,166,274 |
| Total | $ | 1,180,257 | | | $ | 1,542,301 | |
12. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following:
| | | | | | | | | | | |
| As of June 30, 2026 | | As of December 31, 2025 |
| Accrued expenses | $ | 299,235 | | | $ | 221,316 | |
| Accrued employee cost | 246,072 | | | 380,914 | |
| Statutory liabilities | 71,937 | | | 88,847 | |
| Retirement benefits | 1,800 | | | 2,334 | |
| Compensated absences | 34,587 | | | 30,414 | |
| Derivative instruments (Note 6) | 82,722 | | | 60,595 | |
| Contract liabilities (Note 19) | 152,588 | | | 203,128 | |
| Finance lease liabilities | 8,658 | | | 9,444 | |
| Earn-out consideration | — | | | 77,500 | |
| Deferred compensation plan liability (Note 5) | 7,142 | | | 3,831 | |
| Other liabilities | 26,223 | | | 25,302 | |
| $ | 930,964 | | | $ | 1,103,625 | |
13. Other liabilities
Other liabilities consist of the following:
| | | | | | | | | | | |
| As of June 30, 2026 | | As of December 31, 2025 |
| Accrued expenses | $ | 124,105 | | | $ | 100,573 | |
| Accrued employee cost | 5,578 | | | 4,406 | |
| Retirement benefits | 18,844 | | | 17,237 | |
| Compensated absences | 53,941 | | | 51,780 | |
| Derivative instruments (Note 6) | 61,018 | | | 44,414 | |
| Contract liabilities (Note 19) | 45,248 | | | 47,063 | |
| Finance lease liabilities | 8,569 | | | 9,864 | |
| Deferred compensation plan liability (Note 5) | 78,774 | | | 70,989 | |
| Others | 5,342 | | | 7,038 | |
| $ | 401,419 | | | $ | 353,364 | |
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
14. Employee benefit plans
The Company has employee benefit plans in the form of certain statutory and other programs covering its employees.
Defined benefit plans
In accordance with Indian law, the Company maintains a defined benefit retirement plan covering substantially all of its Indian employees. In accordance with Mexican law, the Company provides termination benefits to all of its Mexican employees. In addition, certain of the Company’s subsidiaries in the Philippines, Israel and Japan sponsor defined benefit retirement plans.
On November 21, 2025, the Government of India implemented four new labor codes—the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020—which consolidate 29 existing labor laws into a unified legislative framework. The implementation of these codes had significant accounting impacts for the Company's employee benefit obligations.
The Company has assessed and disclosed the incremental impact of these legislative changes based on legal opinions received and the best available information. The Company continues to monitor the finalization of implementing rules and clarifications from the Government of India and will recognize any additional accounting effects as required.
Net defined benefit plan costs for the three and six months ended June 30, 2026 and 2025 include the following components:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Service costs | $ | 6,036 | | | $ | 4,659 | | | $ | 12,148 | | | $ | 9,551 | |
| Interest costs | 2,683 | | 2,194 | | | 5,452 | | | 4,353 | |
| Amortization of actuarial loss | 95 | | 77 | | | 190 | | | 151 | |
| Amortization of prior service cost | 748 | | | — | | | 1,359 | | | — | |
| Expected return on plan assets | (2,075) | | | (1,743) | | | (4,266) | | | (3,450) | |
| Net defined benefit plan costs | $ | 7,487 | | | $ | 5,187 | | | $ | 14,883 | | | $ | 10,605 | |
Defined contribution plans
During the three and six months ended June 30, 2026 and 2025, the Company contributed the following amounts to defined contribution plans in various jurisdictions:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| India | $ | 15,197 | | | $ | 15,534 | | | $ | 30,321 | | | $ | 29,876 | |
| U.S. | 4,680 | | 4,583 | | | 10,381 | | | 10,101 | |
| U.K. | 2,673 | | 4,482 | | | 10,120 | | | 9,065 | |
| China | 7,616 | | 7,372 | | | 15,104 | | | 14,770 | |
| Other regions | 4,678 | | 4,859 | | | 9,659 | | | 9,952 | |
| Total | $ | 34,844 | | | $ | 36,830 | | | $ | 75,585 | | | $ | 73,764 | |
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
14. Employee benefit plans (Continued)
Deferred compensation plan
On July 1, 2018, Genpact LLC, a wholly-owned subsidiary of the Company, adopted an executive deferred compensation plan (the “Plan”). The Plan provides a select group of U.S.-based members of Company management with the opportunity to defer from 1% to 80% of their base salary and from 1% to 100% of their qualifying bonus compensation (or such other minimums or maximums as determined by the Plan administrator from time to time) pursuant to the terms of the Plan. Participant deferrals are 100% vested at all times. The Plan also allows for discretionary supplemental employer contributions by the Company, in its sole discretion, which will be subject to a two-year vesting schedule (50% vesting on the one-year anniversary of approval of the contribution and 50% vesting on the second year anniversary of approval of the contribution) or such other vesting schedule as determined by the Company. However, no such contributions have been made by the Company to date.
The Plan also provides an option for participants to elect to receive deferred compensation and earnings thereon on either fixed date(s) no earlier than two years following the applicable Plan year (or end of the applicable performance period for performance-based bonus compensation) or following a separation from service, in each case either in a lump sum or in annual installments over a term of up to 15 years. Participants can elect to change or re-defer their rights to receive the deferred compensation until the 10th anniversary following their separation from service, subject to fulfillment of certain conditions. Each Plan participant’s compensation deferrals are credited or debited with notional investment gains and losses equal to the performance of selected hypothetical investment funds offered under the Plan and elected by the participant.
The Company has investments in funds held in Company-owned life insurance policies which are held in a Rabbi Trust that are classified as trading securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date.
The liability for the Plan was $85,916 and $74,820 as of June 30, 2026 and December 31, 2025, respectively, and is included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets.
In connection with the administration of the Plan, the Company has purchased Company-owned life insurance policies insuring the lives of certain employees. The cash surrender value of these policies was $86,670 and $75,586 as of June 30, 2026 and December 31, 2025, respectively. The cash surrender value of these insurance policies is included in “other assets” in the consolidated balance sheets.
During the three months ended June 30, 2026 and 2025, the change in the fair value of deferred compensation plan assets was $8,788 and $5,603, respectively, and during the six months ended June 30, 2026 and 2025, the change in the fair value of deferred compensation plan assets was $7,351 and $4,462, respectively, which is included in “other income (expense), net,” in the consolidated statements of income. During the three months ended June 30, 2026 and 2025, the change in the fair value of deferred compensation plan liabilities was $8,776 and $5,595, respectively, and during the six months ended June 30, 2026 and 2025, the change in the fair value of deferred compensation plan liabilities was $7,348 and $4,463, respectively, which is included in “selling, general and administrative expenses.”
15. Stock-based compensation
The Company has granted stock-based awards under the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007 Omnibus Plan”) and the Genpact Limited 2017 Omnibus Incentive Compensation Plan (the “2017 Omnibus Plan”) to eligible persons, including employees, directors and certain other persons associated with the Company.
A brief summary of each plan is provided below:
2007 Omnibus Plan
The Company adopted the 2007 Omnibus Plan on July 13, 2007 and amended and restated it on April 11, 2012. The 2007 Omnibus Plan provided for the grant of awards intended to qualify as incentive stock options, non-qualified stock options, share appreciation rights, restricted share awards, restricted share units ("RSUs"), PUs, cash incentive awards and other equity-based or equity-related awards. Under the 2007 Omnibus Plan, the Company was authorized to grant awards for the issuance of up to a total of 23,858,823 common shares.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
15. Stock-based compensation (Continued)
2017 Omnibus Plan
On May 9, 2017, the Company’s shareholders approved the adoption of the 2017 Omnibus Plan, pursuant to which 15,000,000 Company common shares are available for issuance. The 2017 Omnibus Plan was amended and restated on April 5, 2019 and April 5, 2022 to increase the number of common shares authorized for issuance by 8,000,000 shares to 23,000,000 shares and by 3,500,000 shares to 26,500,000 shares, respectively. No grants may be made under the 2007 Omnibus Plan after the date of adoption of the 2017 Omnibus Plan. Grants that were outstanding under the 2007 Omnibus Plan as of the date of the Company’s adoption of the 2017 Omnibus Plan remain subject to the terms of the 2007 Omnibus Plan.
Stock-based compensation costs relating to the foregoing plans during the three months ended June 30, 2026 and 2025 were $26,003 and $21,431, respectively, and for the six months ended June 30, 2026 and 2025 were $47,931 and $41,341, respectively, and have been allocated to “cost of revenue” and “selling, general and administrative expenses.”
Stock options
All options granted under the 2007 Omnibus Plan and 2017 Omnibus Plan are exercisable into common shares of the Company, have a contractual period of ten years and vest over three to five years unless specified otherwise in the applicable award agreement. The Company recognizes compensation cost over the vesting period of the option.
Compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholes option-pricing model.
No options were granted in the six months ended June 30, 2026 and June 30, 2025.
A summary of stock option activity during the six months ended June 30, 2026 is set out below:
| | | | | | | | | | | | | | | | | | | | | | | |
| Six months ended June 30, 2026 |
| Shares
arising
out of options | | Weighted
average
exercise price | | Weighted average remaining contractual life (years) | | Aggregate
intrinsic
value |
| Outstanding as of January 1, 2026 | 5,036,542 | | $ | 35.20 | | | 3.4 | | — | |
| Granted | — | | | — | | | — | | | — | |
| Forfeited | — | | | — | | | — | | | — | |
| Expired | — | | | — | | | — | | | — | |
| Exercised | (2,800) | | | 27.65 | | | — | | | — |
| Outstanding as of June 30, 2026 | 5,033,742 | | 35.21 | | | 2.9 | | 193 |
| Vested as of June 30, 2026 and expected to vest thereafter (Note a) | 5,028,681 | | 35.19 | | | 2.9 | | 193 |
| Vested and exercisable as of June 30, 2026 | 4,742,980 | | 34.20 | | | 2.8 | | 193 |
| Weighted average grant date fair value of grants during the period | — | | | | | | | |
(a)Options expected to vest reflect an estimated forfeiture rate.
As of June 30, 2026, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $478, which will be recognized over the weighted average remaining requisite vesting period of 0.5 years.
Restricted share units
The Company has granted restricted share units (“RSUs”) under the 2007 Omnibus Plan and 2017 Omnibus Plan. Each RSU represents the right to receive one common share. The fair value of each RSU is the market price of one common share of the Company on the date of grant. The RSUs granted to date have graded vesting schedules of three months to four years. The compensation expense is recognized on a straight-line basis over the vesting period. A summary of RSU activity during the six months ended June 30, 2026 is set out below:
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
15. Stock-based compensation (Continued) | | | | | | | | | | | |
| Six months ended June 30, 2026 |
| Number of Restricted Share Units | | Weighted Average Grant Date Fair Value |
| Outstanding as of January 1, 2026 | 2,302,336 | | $ | 42.29 | |
| Granted | 1,390,989 | | 43.69 |
| Vested (Note a) | (926,732) | | | 40.69 | |
| Forfeited | (170,716) | | 44.27 |
| Outstanding as of June 30, 2026 | 2,595,877 | | 43.48 |
| Expected to vest (Note b) | 2,348,090 | | |
(a)922,834 RSUs vested during the six months ended June 30, 2026, in respect of which 578,258 shares (net of minimum statutory tax withholding) were issued. 3,898 RSUs that vested in the six months ended June 30, 2026 will be issued subsequent to June 30, 2026 after withholding shares to the extent of minimum statutory withholding taxes.
(b)The number of RSUs expected to vest reflects the application of an estimated forfeiture rate.
64,195 RSUs vested in the year ended December 31, 2024, in respect of which 64,175 shares were issued during the six months ended June 30, 2026 after withholding shares to the extent of minimum statutory withholding taxes.
50,536 RSUs that vested in the year ended December 31, 2025 will be issued at the end of 2026 after withholding shares to the extent of minimum statutory withholding taxes.
As of June 30, 2026, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $79,061, which will be recognized over the weighted average remaining requisite vesting period of 2.1 years.
Performance units
The Company also grants stock awards in the form of performance units (“PUs”) and has granted PUs under both the 2007 Omnibus Plan and the 2017 Omnibus Plan.
Each PU represents the right to receive a number of common shares at a future date based on the Company’s performance against specified targets. PUs granted to date have vesting schedules of approximately six months to three years. PUs granted under the plans are subject to cliff vesting. The compensation expense for such awards is recognized on a straight-line basis over the vesting period.
For PUs granted prior to 2023, the fair value of each PU was the market price of one common share of the Company on the date of grant and the performance period for such grants was one year. For PUs that have a performance period of one year, the Company’s estimate of the number of shares to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.
For the PUs granted since 2023, the performance period of the awards increased to three years from one year. The number of PUs that will ultimately vest under the PU awards will be determined, subject to certain conditions and limitations, based on the Company’s achievement of the performance targets set forth in the awards as well as its total shareholder return ("TSR") relative to the TSR of the companies included as of the beginning of the performance period in the S&P 400 Midcap Index (the “Peer Group”) over the three-year performance period.
The grant date fair value for PUs is determined using a Monte Carlo simulation model. This model simulates a range of possible future share prices and estimates the probabilities of the potential payouts. This model also incorporates the following assumptions:
•The historical volatility for the companies in the Peer Group was measured using the most recent three-year period.
•The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
15. Stock-based compensation (Continued)
•For determining the TSR of the Company and the companies in the Peer Group, dividends are assumed to have been reinvested in the stock of the issuing entities on a continuous basis.
•The correlation coefficients used to model the way in which each entity tends to move in relation to each other are based upon the price data used to calculate historical volatility.
The fair value of each PU granted to employees in the six months ended June 30, 2026 and June 30, 2025 was estimated on the date of grant using the following valuation assumptions:
| | | | | | | | | | | | | | | | | | | | |
| | Six months ended June 30, 2026 | | Six months ended June 30, 2025 |
| Dividend yield | | 1.54 | % | | 1.37 | % |
| Expected life (years) | | 2.92 | | 2.81 |
| Risk-free rate of interest for expected life | | 3.56 | % | | 3.89 | % |
| Volatility for expected life | | 28.86 | % | | 25.78 | % |
A summary of PU activity during the six months ended June 30, 2026 is set out below:
| | | | | | | | | | | | | | | | | |
| Six months ended June 30, 2026 |
| Number of Performance Units | | Weighted Average Grant Date Fair Value | | Maximum Shares Eligible to Receive |
| Outstanding as of January 1, 2026 | 2,652,354 | | | $ | 42.39 | | | 6,368,794 |
| Granted | 1,119,220 | | | 44.59 | | 2,686,128 |
| Vested (Note a) | (418,753) | | | 44.02 | | (418,753) |
| Forfeited | (203,622) | | | 44.01 | | (488,640) |
| Adjustment upon final determination of level of performance goal achievement | (273,757) | | | 44.03 | | (1,243,271) | |
| Outstanding as of June 30, 2026 | 2,875,442 | | | $ | 42.74 | | | 6,904,258 |
| Expected to vest (Note b) | 3,305,656 | | | | | |
(a)417,841 PUs vested during the six months ended June 30, 2026, in respect of which 260,106 shares (net of minimum statutory tax withholding) were issued during the six months ended June 30, 2026. 912 PUs that vested in the six months ended June 30, 2026 will be issued subsequent to June 30, 2026 after withholding shares to the extent of minimum statutory withholding taxes.
(b)The number of PUs expected to vest is based on the probable achievement of the performance targets after considering an estimated forfeiture rate.
As of June 30, 2026, the total remaining unrecognized stock-based compensation cost related to PUs amounted to $73,806, which will be recognized over the weighted average remaining requisite vesting period of 2.1 years.
Employee Stock Purchase Plan (ESPP)
On May 1, 2008, the Company adopted the Genpact Limited U.S. Employee Stock Purchase Plan and the Genpact Limited International Employee Stock Purchase Plan (together, the “ESPP”). In April 2018, these plans were amended and restated, and their terms were extended to August 31, 2028.
The ESPP allows eligible employees to purchase the Company’s common shares through payroll deductions at 90% of the closing price of the Company’s common shares on the last business day of each purchase interval. The dollar amount of common shares purchased under the ESPP cannot exceed 15% of the participating employee’s base salary, subject to a cap of $25 per employee per calendar year. With effect from September 1, 2009, the offering periods commence on the first business day in March, June, September and December of each year and end on the last business day of the subsequent May, August, November and February. 4,200,000 common shares have been reserved for issuance in the aggregate over the term of the ESPP.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
15. Stock-based compensation (Continued)
During the six months ended June 30, 2026 and 2025, 154,214 and 121,936 common shares, respectively, were issued under the ESPP.
The ESPP is considered compensatory under FASB guidance on Compensation-Stock Compensation.
The compensation expense for the ESPP is recognized in accordance with the FASB guidance on Compensation—Stock Compensation. The compensation expense for the ESPP during the three months ended June 30, 2026 and 2025 was $356 and $367, respectively, and for the six months ended June 30, 2026 and 2025 was $701 and $493, respectively, and has been allocated to cost of revenue and selling, general and administrative expenses.
16. Capital stock
Share repurchases
The Board of Directors of the Company (the “Board”) has authorized repurchases of up to $2,750,000 under the Company’s existing share repurchase program. Under the program, shares may be purchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
During the six months ended June 30, 2026 and 2025, the Company repurchased 3,372,227 and 1,898,010 of its common shares, respectively, on the open market at a weighted average price of $35.57 and $48.98 per share, respectively, for an aggregate cash amount of $119,940 and $92,961, respectively. All repurchased shares have been retired.
The Company records repurchases of its common shares on the settlement date of each transaction. Shares purchased and retired are deducted to the extent of their par value from common shares and from retained earnings for the excess over par value. Direct costs incurred to acquire the shares are included in the total cost of the shares purchased. For the six months ended June 30, 2026 and 2025, retained earnings were reduced by the direct costs, including taxes, related to share repurchases of $67 and $538, respectively.
$244,137 remained available for share repurchases under the Company’s existing share repurchase program as of June 30, 2026. This repurchase program does not obligate the Company to acquire any specific number of shares and does not specify an expiration date.
Dividend
On February 5, 2026, the Company announced that its Board approved a 10% increase in its quarterly cash dividend to $0.1875 per share for 2026, up from $0.17 per share in 2025, representing a planned annual dividend of $0.75 per common share for 2026, up from $0.68 per share in 2025, payable to holders of the Company’s common shares. On March 31, 2026 and June 25, 2026, the Company paid a dividend of $0.1875 per share, amounting to $31,773 and $31,552 in the aggregate, to shareholders of record as of March 16, 2026 and June 10, 2026, respectively.
On February 6, 2025, the Company announced that its Board had approved an 11% increase in its quarterly cash dividend to $0.17 per share for 2025, up from $0.1525 per share in 2024, representing an annual dividend of $0.68 per common share for 2025, up from $0.61 per share in 2024, payable to holders of the Company’s common shares. On March 26, 2025 and June 30, 2025, the Company paid a dividend of $0.17 per share, amounting to $29,784 and $29,624 in the aggregate, to shareholders of record as of March 11, 2025 and June 18, 2025, respectively.
17. Earnings per share
The Company calculates earnings per share in accordance with FASB guidance on earnings per share. Basic and diluted earnings per common share give effect to the change in the number of Company common shares outstanding. The calculation of basic earnings per common share is determined by dividing net income by the weighted average number of common shares outstanding during the respective periods. The potentially dilutive shares, consisting of outstanding options on common shares, RSUs, common shares to be issued under the ESPP and PUs, have been included in the computation of diluted net earnings per share and the number of weighted average shares outstanding, except where the result would be anti-dilutive.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
17. Earnings per share (Continued)
The number of shares subject to stock awards outstanding but not included in the computation of diluted earnings per common share because their effect was anti-dilutive is 3,845,295 and 868,648 for the six months ended June 30, 2026 and 2025, respectively, and 4,499,624 and 1,121,406 for the three months ended June 30, 2026 and 2025, respectively.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Net income | $ | 145,737 | | | $ | 132,716 | | | $ | 293,729 | | | $ | 263,569 | |
| Weighted average number of common shares used in computing basic earnings per common share | 169,068,546 | | | 174,611,241 | | | 169,688,011 | | | 175,069,775 | |
| Dilutive effect of stock-based awards | 1,357,250 | | 2,441,105 | | 1,947,476 | | 2,673,970 |
| Weighted average number of common shares used in computing dilutive earnings per common share | 170,425,796 | | 177,052,346 | | 171,635,487 | | 177,743,745 |
| Earnings per common share | | | | | | | |
| Basic | $ | 0.86 | | | $ | 0.76 | | | $ | 1.73 | | | $ | 1.51 | |
| Diluted | $ | 0.86 | | | $ | 0.75 | | | $ | 1.71 | | | $ | 1.48 | |
18. Segment reporting
The Company's operating segments are significant strategic business units that align its products and services with how it manages its business, approaches key markets and interacts with its clients.
The Company’s reportable segments are as follows: (i) Financial Services, (ii) Consumer and Healthcare, and (iii) High Tech and Manufacturing.
The Company’s Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"), is presented with operating segment revenue and operating segment adjusted income from operations ("AOI"). The CODM uses both revenue and AOI to review the monthly and quarterly performance of the Company's operating segments. The CODM uses AOI, which is gross margin and general and administrative expenditures, to assess capacity for investments in each segment, including sales capacity, delivery resources, offerings and solutions, or partnerships. The Company does not allocate, and therefore the CODM does not evaluate, stock-based compensation expenses, amortization of acquired intangible assets, unallocated corporate expenses, foreign exchange gain/(loss), interest income/(expense), restructuring (expense)/income, other income/(expense), or income taxes by segment. Unallocated corporate expenses primarily represent the impact of certain under or over-absorption of overhead and allowances for credit losses, which are not allocated to the Company’s segments for management’s internal reporting purposes. The Company’s operating assets and liabilities pertain to multiple segments. The Company manages assets and liabilities on a total company basis, not by operating segment, and therefore asset and liability information and capital expenditures by operating segment are not presented to the CODM and are not reviewed by the CODM. The Company has identified cost of revenue as the significant segment expense which is provided to the CODM on a regular basis. The Company has also provided information related to other segment items.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
18. Segment reporting (Continued)
Net revenues, cost of revenue, other segment items and AOI for each of the Company’s segments for the three months ended June 30, 2026 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Net revenues | | Cost of Revenue | | Other segment items* | | AOI |
| Financial Services | $ | 349,890 | | | $ | 212,208 | | | $ | 69,842 | | | $ | 67,840 | |
| Consumer and Healthcare | 469,172 | | | 308,143 | | | 88,495 | | | 72,534 | |
| High Tech and Manufacturing | 524,376 | | | 332,749 | | | 101,952 | | | 89,675 | |
| Net revenues | $ | 1,343,438 | | | | | | | |
| Unallocated corporate expenses | | | | | (3,509) | | | 3,509 | |
| Stock-based compensation expense | | | | | | | (26,359) | |
| Amortization of acquired intangible assets | | | | | | | (3,278) | |
| Foreign exchange gains, net | | | | | | | 2,109 | |
| Interest income (expense), net | | | | | | | (15,147) | |
| Income tax expense | | | | | | | (45,146) | |
| Net income | | | | | | | $ | 145,737 | |
*Other segment items primarily includes selling, general and administrative expenses (excluding stock-based compensation expenses), other operating (income) expense, net and other income (expense), net.
Net revenues, cost of revenue, other segment items and AOI for each of the Company’s segments for the three months ended June 30, 2025 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Net revenues | | Cost of Revenue | | Other segment items* | | AOI |
| Financial Services | $ | 338,617 | | | $ | 213,791 | | | $ | 61,369 | | | $ | 63,457 | |
| Consumer and Healthcare | 428,565 | | | 278,815 | | | 73,719 | | | 76,031 | |
| High Tech and Manufacturing | 487,236 | | | 311,744 | | | 85,476 | | | 90,016 | |
| Net revenues | $ | 1,254,418 | | | | | | | |
| Unallocated corporate expenses | | | | | 12,234 | | | (12,234) | |
| Stock-based compensation | | | | | | | (21,798) | |
| Amortization of acquired intangible assets | | | | | | | (4,315) | |
| Foreign exchange gains, net | | | | | | | 376 | |
| Interest income (expense), net | | | | | | | (13,485) | |
| Acquisition-related expenses | | | | | | | (1,310) | |
| Income tax expense | | | | | | | (44,022) | |
| Net income | | | | | | | $ | 132,716 | |
*Other segment items primarily include selling, general and administrative expenses (excluding stock-based compensation expenses), other operating (income) expense, net and other income (expense), net.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
18. Segment reporting (Continued)
Net revenues, cost of revenue, other segment items and AOI for each of the Company’s segments for the six months ended June 30, 2026 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Net revenues | | Cost of Revenue | | Other segment items* | | AOI |
| Financial Services | $ | 694,928 | | | $ | 423,364 | | | $ | 137,474 | | | $ | 134,090 | |
| Consumer and Healthcare | 915,483 | | | 606,049 | | | 172,198 | | | 137,236 | |
| High Tech and Manufacturing | 1,029,099 | | | 648,091 | | | 198,859 | | | 182,149 | |
| Net revenues | $ | 2,639,510 | | | | | | | |
| Unallocated corporate expenses | | | | | (3,761) | | | 3,761 | |
| Stock-based compensation | | | | | | | (48,632) | |
| Amortization of acquired intangible assets | | | | | | | (6,389) | |
| Foreign exchange gains, net | | | | | | | 9,411 | |
| Interest income (expense), net | | | | | | | (26,749) | |
| Income tax expense | | | | | | | (91,148) | |
| Net income | | | | | | | $ | 293,729 | |
*Other segment items primarily include selling, general and administrative expenses (excluding stock-based compensation expenses), other operating (income) expense, net and other income (expense), net.
Net revenues, cost of revenue, other segment items and AOI for each of the Company’s segments for the six months ended June 30, 2025 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Net revenues | | Cost of Revenue | | Other segment items* | | AOI |
| Financial Services | $ | 665,837 | | | $ | 420,629 | | | $ | 123,559 | | | $ | 121,649 | |
| Consumer and Healthcare | 849,049 | | | 552,445 | | | 150,249 | | | 146,355 | |
| High Tech and Manufacturing | 954,458 | | | 617,208 | | | 167,119 | | | 170,131 | |
| Net revenues | $ | 2,469,344 | | | | | | | |
| Unallocated corporate expenses | | | | | 11,131 | | | (11,131) | |
| Stock-based compensation | | | | | | | (41,834) | |
| Amortization of acquired intangible assets | | | | | | | (8,633) | |
| Foreign exchange gains, net | | | | | | | 1,665 | |
| Interest income (expense), net | | | | | | | (24,931) | |
| Acquisition-related expenses | | | | | | | (1,310) | |
| Income tax expense | | | | | | | (88,392) | |
| Net income | | | | | | | $ | 263,569 | |
*Other segment items primarily includes selling, general and administrative expenses (excluding stock-based compensation expenses), other operating (income) expense, net and other income (expense), net.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
19. Net revenues
Disaggregation of revenue
Effective January 1, 2026, the Company revised its revenue disaggregation to better align with its current business structure, strategic priorities and internal reporting. The Company's revenue is now disaggregated between Advanced Technology Solutions and Core Business Services, replacing the prior disaggregation between Data-Tech-AI and Digital Operations. Accordingly, no disaggregation of revenue between Data-Tech-AI and Digital Operations has been presented for the three and six months ended June 30, 2026 and June 30, 2025.
Advanced Technology Solutions includes revenues from solutions and services focused on data and AI, digital technology, advisory services and agentic solutions.
Core Business Services includes revenues from decision support services, technology services and Digital Operations.
In the following table, the Company’s revenue is disaggregated by the nature of solutions and services provided between Advanced Technology Solutions and Core Business Services:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
Advanced Technology Solutions | $ | 363,323 | | | $ | 292,655 | | | $ | 708,552 | | | $ | 570,282 | |
Core Business Services | 980,115 | | 961,763 | | 1,930,958 | | 1,899,062 |
| Net revenues | $ | 1,343,438 | | | $ | 1,254,418 | | | $ | 2,639,510 | | | $ | 2,469,344 | |
All three of the Company's segments include revenue from each of the service types included in the tables above. See Note 18 for additional information.
Contract balances
Contract assets represent the contract acquisition fees or other upfront fees paid to a customer. Such costs are amortized over the expected period of benefit and recorded as an adjustment to the transaction price and deducted from revenue. The Company’s assessment did not indicate any significant impairment losses on its contract assets for the periods presented.
Contract liabilities include that portion of revenue for which payments have been received in advance from customers. The Company also defers revenues attributable to certain process transition activities for which costs have been capitalized by the Company as contract fulfillment costs. Consideration received from customers, if any, relating to such transition activities is also included as part of contract liabilities. The contract liabilities are included within “Accrued expenses and other current liabilities” and “Other liabilities” in the consolidated balance sheets. The revenues are recognized as (or when) the performance obligation is fulfilled pursuant to the contract with the customer.
The following table shows the details of the Company’s contract balances:
| | | | | | | | | | | |
| As of June 30, 2026 | | As of December 31, 2025 |
| Contract assets (Note a) | $ | 75,167 | | | $ | 64,811 | |
| Contract liabilities (Note b) | | | |
| Deferred transition revenue | $ | 88,207 | | | $ | 90,607 | |
| Advance from customers | $ | 109,629 | | | $ | 159,584 | |
(a)Included in "prepaid expenses and other current assets" and "other assets" in the consolidated balance sheet.
(b)Included in "accrued expenses and other current liabilities" and "other liabilities" in the consolidated balance sheet.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
19. Net revenues (Continued)
Changes in the Company’s contract asset and liability balances during the three and six months ended 2026 and 2025 were a result of normal business activity and not materially impacted by any other factors.
The amount of revenue recognized during the three months ended June 30, 2026 and 2025 that was included in the Company's contract liabilities balance at the beginning of each period was $100,835 and $47,059, respectively, and the amount of revenue recognized during the six months ended June 30, 2026 and 2025 that was included in the Company's contract liabilities balance at the beginning of the period was $154,461 and $74,672, respectively.
The following table includes estimated revenue expected to be recognized in the future related to remaining performance obligations as of June 30, 2026:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Particulars | | Total | | Less than 1 year | | 1-3 years | | 3-5 years | | After 5 years |
| Transaction price allocated to remaining performance obligations | | $ | 197,836 | | | $ | 152,588 | | | $ | 35,010 | | | $ | 9,321 | | | $ | 917 | |
The following table provides details of the Company’s contract cost assets:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Particulars | Sales incentive programs | | Transition activities | | Sales incentive programs | | Transition activities | | Sales incentive programs | | Transition activities | | Sales incentive programs | | Transition activities |
| Opening balance | $ | 30,773 | | | $ | 162,100 | | | $ | 38,230 | | | $ | 162,199 | | | $ | 34,556 | | | $ | 162,863 | | | $ | 41,348 | | | $ | 159,552 | |
| Closing balance | 23,880 | | 165,513 | | 36,486 | | 171,012 | | 23,880 | | 165,513 | | 36,486 | | 171,012 |
| Amortization | 3,243 | | 17,352 | | 5,611 | | 18,909 | | 7,348 | | 34,723 | | 11,969 | | 38,283 |
20. Interest income (expense), net
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Interest income | $ | 4,748 | | | $ | 4,534 | | | $ | 14,901 | | | $ | 10,789 | |
| Interest expense | (19,895) | | | (18,019) | | | $ | (41,650) | | | (35,720) | |
| Interest income (expense), net | $ | (15,147) | | | $ | (13,485) | | | $ | (26,749) | | | $ | (24,931) | |
21. Income taxes
The Company determines its tax provision for interim periods using an estimate of its annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment.
The Company’s effective tax rate (“ETR”) was 23.7% for the three months ended June 30, 2026, down from 24.9% for the three months ended June 30, 2025. The Company’s ETR was 23.7% for the six months ended June 30, 2026, down from 25.1% for the six months ended June 30, 2025. The decrease in the Company’s ETR in both periods was primarily driven by optimization of intercompany financing, as well as the mix of the Company's pre-tax income and the impacts of other discrete items.
22. Commitments and contingencies
Capital commitments
As of June 30, 2026 and December 31, 2025, the Company has committed to spend $9,538 and $16,542, respectively, under agreements to purchase property, plant and equipment. This amount is net of capital advances paid in respect of these purchases.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
22. Commitments and contingencies (Continued)
Bank guarantees
The Company has outstanding bank guarantees and letters of credit amounting to $8,901 and $9,245 as of June 30, 2026 and December 31, 2025, respectively. Bank guarantees are generally provided to government agencies or for leases. These guarantees may be revoked if the beneficiary suffers any losses or damages through the breach of any of the covenants contained in the agreements governing such guarantees.
Other commitments
Certain units of the Company’s Indian subsidiaries are established as Software Technology Parks of India units or Special Economic Zone (“SEZ”) units under the relevant regulations issued by the Government of India. These units are exempt from customs and other duties on imported and indigenous capital goods, stores and spares. SEZ units are also exempt from the Indian Goods and Services Tax that was introduced in India in 2017. The Company has undertaken to pay taxes and duties, if any, in respect of capital goods, stores, spares and services consumed duty-free, in the event that certain terms and conditions are not fulfilled.
Contingency
The Company is involved in various claims and legal proceedings arising in the ordinary course of business. The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. Based on the Company’s assessment, including the availability of insurance recoveries, the Company’s management does not believe that any current claims or legal proceedings (other than the specific matters described below, if decided adversely), individually or in aggregate, will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future. The Company will continuously monitor these matters to assess potential impacts to the financial statements.
(a) In February 2019, there was a judicial pronouncement in India with respect to defined contribution benefit payments interpreting certain statutory defined contribution obligations of employees and employers. If applied retrospectively, the interpretation would result in an increase in contributions payable by the Company for past periods for certain of its India-based employees. Due to a lack of interpretive guidance and based on legal advice the Company has obtained on the matter, it is currently impracticable to reliably estimate the timing and amount of any payments the Company may be required to make. Accordingly, the Company will await further clarity to evaluate the amount of a potential provision, if any.
(b) The Indian taxing authorities ("ITA") have issued assessment orders to certain subsidiaries of the Company seeking to assess income tax on certain transactions that occurred in 2015. The Company has received demands for potential tax claims related to these orders in an aggregate amount of $93,168, including interest through the date of the orders. This amount excludes penalties or interest accrued since the date of the orders. The Company is pursuing appeals before the relevant appellate authorities in respect of these orders. Further, in respect of a 2015 transaction, the ITA has attempted to revise a previously closed assessment. In 2022, the Income Tax Appellate Tribunal of India (the "Tribunal") ruled in favor of the Company denying the ITA's ability to revise the assessment, and the ITA appealed this ruling before the Delhi High Court. In January 2023, notwithstanding the Tribunal’s decision in the Company's favor, the ITA issued a revised assessment order to the Company, and in March 2023, this assessment order was struck down by the Tribunal. The ITA then filed an appeal to the Delhi High Court challenging the decision of the Tribunal. In December 2024, the Delhi High Court dismissed the ITA's appeal of the Tribunal's order, upholding the Company’s position. Although the ITA has filed an appeal before the Supreme Court of India, the Company believes that it is more likely than not that the Company’s position will ultimately prevail in respect of these transactions. Accordingly, no unrecognized tax benefit has been provided with respect to this matter as of June 30, 2026.
GENPACT LIMITED AND ITS SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(In thousands, except per share data and share count)
23. Subsequent events
Dividend
On July 16, 2026, the Company announced that its Board of Directors declared a dividend for the third quarter of 2026 of $0.1875 per common share, which is payable on September 24, 2026 to shareholders of record as of the close of business on September 10, 2026. The declaration of any future dividends will be at the discretion of the Board of Directors and subject to Bermuda and other applicable laws.