ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 82-0572194 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
280 PARK AVENUE, 38TH FLOOR, NEW YORK, NEW YORK | 10017 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
PAGE | |||
ITEM | |||
1. | |||
2. | |||
3. | |||
4. | |||
1. | |||
1A. | |||
2. | |||
3. | |||
4. | |||
5. | |||
6. | |||
As of | ||||||||
March 31, 2019 | December 31, 2018 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Short-term investments | ||||||||
Restricted cash | ||||||||
Accounts receivable, net | ||||||||
Prepaid expenses | ||||||||
Advance income tax, net | ||||||||
Other current assets | ||||||||
Total current assets | ||||||||
Property and equipment, net | ||||||||
Operating lease right-of-use assets | — | |||||||
Restricted cash | ||||||||
Deferred tax assets, net | ||||||||
Intangible assets, net | ||||||||
Goodwill | ||||||||
Other assets | ||||||||
Investment in equity affiliate | ||||||||
Total assets | $ | $ | ||||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | $ | ||||||
Current portion of long-term borrowings | ||||||||
Deferred revenue | ||||||||
Accrued employee costs | ||||||||
Accrued expenses and other current liabilities | ||||||||
Current portion of operating lease liabilities | — | |||||||
Income taxes payable | ||||||||
Current portion of finance lease obligations | ||||||||
Total current liabilities | ||||||||
Long term borrowings | ||||||||
Finance lease obligations, less current portion | ||||||||
Deferred tax liabilities, net | ||||||||
Operating lease liabilities, less current portion | — | |||||||
Other non-current liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies (Refer Note 26) | ||||||||
Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued | ||||||||
ExlService Holdings, Inc. Stockholders’ equity: | ||||||||
Common stock, $0.001 par value; 100,000,000 shares authorized, 38,256,036 shares issued and 34,365,437 shares outstanding as of March 31, 2019 and 37,850,544 shares issued and 34,222,476 shares outstanding as of December 31, 2018 | ||||||||
Additional paid-in capital | ||||||||
Retained earnings | ||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Total including shares held in treasury | ||||||||
Less: 3,890,599 shares as of March 31, 2019 and 3,628,068 shares as of December 31, 2018, held in treasury, at cost | ( | ) | ( | ) | ||||
Stockholders’ equity | ||||||||
Non-controlling interest | ||||||||
Total equity | ||||||||
Total liabilities and equity | $ | $ |
Three months ended March 31, | ||||||||
2019 | 2018 | |||||||
Revenues, net | $ | $ | ||||||
Cost of revenues(1) | ||||||||
Gross profit(1) | ||||||||
Operating expenses: | ||||||||
General and administrative expenses | ||||||||
Selling and marketing expenses | ||||||||
Depreciation and amortization | ||||||||
Impairment charges | ||||||||
Total operating expenses | ||||||||
Income from operations | ||||||||
Foreign exchange gain, net | ||||||||
Interest expense | ( | ) | ( | ) | ||||
Other income, net | ||||||||
Income before income tax expense/(benefit) and earnings from equity affiliates | ||||||||
Income tax expense/(benefit) | ( | ) | ||||||
Income before earnings from equity affiliates | ||||||||
Loss from equity-method investment | ||||||||
Net income attributable to ExlService Holdings, Inc. stockholders | $ | $ | ||||||
Earnings per share attributable to ExlService Holdings, Inc. stockholders: | ||||||||
Basic | $ | $ | ||||||
Diluted | $ | $ | ||||||
Weighted-average number of shares used in computing earnings per share attributable to ExlService Holdings, Inc. stockholders: | ||||||||
Basic | ||||||||
Diluted |
Three months ended March 31, | ||||||||
2019 | 2018 | |||||||
Net income | $ | $ | ||||||
Other comprehensive income/(loss): | ||||||||
Unrealized gain/(loss) on effective cash flow hedges, net of taxes $1,189 and ($800), respectively | ( | ) | ||||||
Foreign currency translation gain/(loss) | ( | ) | ||||||
Reclassification adjustments | ||||||||
Gain on cash flow hedges, net of taxes $354 and ($776), respectively(1) | ( | ) | ( | ) | ||||
Retirement benefits, net of taxes $109 and $1, respectively(2) | ( | ) | ( | ) | ||||
Total other comprehensive income/(loss) | $ | $ | ( | ) | ||||
Total comprehensive income | $ | $ |
(1) |
(2) |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Treasury Stock | Non - Controlling Interest | Total Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||
Stock issued against stock-based compensation plans | — | — | — | — | — | — | |||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Acquisition of treasury stock | — | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||||
Allocation of equity component related to issuance costs on convertible senior notes | — | — | ( | ) | — | — | — | — | — | ( | ) | ||||||||||||||||||||||
Non-controlling interest | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non - Controlling Interest | Total Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
Balance as of December 31, 2017 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||
Impact of adoption of ASU 2016-09 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Balance as of January 1, 2018 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||
Stock issued against stock-based compensation plans | — | — | — | — | — | ||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Acquisition of treasury stock | — | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||||
Non-controlling interest | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance as of March 31, 2018 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided/(used for) by operating activities: | |||||||
Depreciation and amortization | |||||||
Stock-based compensation expense | |||||||
Unrealized gain on short term investments | ( | ) | ( | ) | |||
Unrealized foreign exchange loss/(gain), net | ( | ) | |||||
Deferred income tax expense | |||||||
Allowance for doubtful accounts receivable | ( | ) | |||||
Loss from equity-method investment | |||||||
Amortization of non-cash interest expense related to convertible senior notes | |||||||
Impairment charges | |||||||
Others, net | |||||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | ( | ) | |||
Prepaid expenses and other current assets | ( | ) | |||||
Advance income tax, net | ( | ) | ( | ) | |||
Other assets | ( | ) | |||||
Accounts payable | ( | ) | ( | ) | |||
Deferred revenue | |||||||
Accrued employee costs | ( | ) | ( | ) | |||
Accrued expenses and other liabilities | |||||||
Net cash provided by/(used for) operating activities | ( | ) | |||||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | ( | ) | ( | ) | |||
Business acquisition (net of cash acquired) | ( | ) | |||||
Purchase of investments | ( | ) | ( | ) | |||
Proceeds from redemption of investments | |||||||
Net cash used for investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Principal payments on finance lease obligations | ( | ) | ( | ) | |||
Proceeds from borrowings | |||||||
Repayments of borrowings | ( | ) | ( | ) | |||
Payment of debt issuance costs | ( | ) | |||||
Acquisition of treasury stock | ( | ) | ( | ) | |||
Proceeds from exercise of stock options | |||||||
Net cash provided by/(used for) financing activities | ( | ) | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ( | ) | |||
Net decrease in cash, cash equivalents and restricted cash | ( | ) | ( | ) | |||
Cash, cash equivalents and restricted cash at beginning of period | |||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
i. | a) Revenues under time-and-material, transaction and outcome-based contracts are recognized as the services are performed. When the terms of the client contract specify service level parameters that must be met (such as turnaround time or accuracy), the Company monitors such service level parameters to determine if any service credits or penalties have been incurred. Revenues are recognized net of any penalties or service credits that are due to a client. |
ii. | Revenues for the Company’s fixed-price contracts are recognized using the proportional performance method when the pattern of performance under the contracts can be reasonably determined. The Company estimates the proportional performance of a contract by comparing the actual number of hours or days worked to the estimated total number of hours or days required to complete each engagement. The use of the proportional performance method requires significant judgment relative to estimating the number of hours or days required to complete the contracted scope of work, including assumptions and estimates relative to the length of time to complete the project and the nature and complexity of the work to be performed. The Company regularly monitors its estimates for completion of a project and record changes in the period in which a change in an estimate is determined. If a change in an estimate results in a projected loss on a project, such loss is recognized in the period in which it is first identified. |
iii. | Revenues from the Company's software and related services contracts, which are not significant, are primarily related to maintenance renewals or incremental license fees for additional users. Maintenance revenues are generally recognized on a straight-line basis over the annual contract term. Fees for incremental license without any associated services are recognized upon delivery of the related incremental license. To a lesser extent, software and related services contracts may contain software license, related services and maintenance elements as a multiple element arrangement. In such cases, revenue is allocated to maintenance based on the price charged when that element is sold separately. |
iv. | Revenues from reimbursement optimization services having contingent fee arrangements are recognized by the Company at the point in time when a performance obligation is satisfied, which is when it identifies an overpayment claim and the same is acknowledged by its customers. In such contracts, the Company’s consideration is contingent upon the actual collections made by its customers and subsequent potential retraction claims. Based on guidance on “variable consideration” in Topic 606, the Company uses its historical experience and projections to determine the expected recoveries from its customers and recognizes revenue based upon such expected recoveries. Any adjustment required due to change in estimates are recorded in the period in which such change is identified. |
• | Insurance |
• | Healthcare |
• | Travel, Transportation and Logistics (“TT&L”) |
• | Finance and Accounting (“F&A”) |
• | Analytics, and |
• | All Other (consisting of the Company's remaining operating segments, which are the Banking and Financial Services, Utilities and Consulting operating segments). |
Three months ended March 31, 2019 | ||||||||||||||||||||||||||||
Insurance | Healthcare | TT&L | F&A | All Other | Analytics | Total | ||||||||||||||||||||||
Revenues, net | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Cost of revenues(1) | ||||||||||||||||||||||||||||
Gross profit(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||
Foreign exchange gain, interest expense and other income, net | ||||||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||||
Loss from equity-method investment | ||||||||||||||||||||||||||||
Net income | $ |
Three months ended March 31, 2018 | ||||||||||||||||||||||||||||
Insurance | Healthcare | TT&L | F&A | All Other | Analytics | Total | ||||||||||||||||||||||
Revenues, net | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Cost of revenues(1) | ||||||||||||||||||||||||||||
Gross profit(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||
Foreign exchange gain, interest expense and other income, net | ||||||||||||||||||||||||||||
Income tax benefit | ( | ) | ||||||||||||||||||||||||||
Loss from equity-method investment | ||||||||||||||||||||||||||||
Net income | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
BPM and related services(1) | $ | $ | |||||
Analytics services | |||||||
Revenues, net | $ | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Revenues, net | |||||||
United States | $ | $ | |||||
Non-United States | |||||||
United Kingdom | |||||||
Rest of World | |||||||
Total Non-United States | |||||||
Revenues, net | $ | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Property and equipment, net | |||||||
India | $ | $ | |||||
United States | |||||||
Philippines | |||||||
Rest of World | |||||||
Property and equipment, net | $ | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Accounts receivable, net | $ | $ | |||||
Contract assets | $ | $ | |||||
Contract liabilities: | |||||||
Deferred revenue (advance payments portion) | $ | $ | |||||
Consideration received from customer for transitions activities | $ | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Numerator: | |||||||
Net income | $ | $ | |||||
Denominators: | |||||||
Basic weighted average common shares outstanding | |||||||
Dilutive effect of share based awards | |||||||
Diluted weighted average common shares outstanding | |||||||
Earnings per share attributable to ExlService Holdings Inc. stockholders: | |||||||
Basic | $ | $ | |||||
Diluted | $ | $ | |||||
Weighted average potentially dilutive shares considered anti-dilutive and not included in computing diluted earnings per share |
As of | |||||||
March 31, 2019 | March 31, 2018 | ||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash (current) | |||||||
Restricted cash (non-current) | |||||||
Cash, cash equivalents and restricted cash | $ | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Interest and dividend income | $ | $ | |||||
Gain on sale and mark-to-market of mutual funds | |||||||
Others, net | |||||||
Other income, net | $ | $ |
Estimated useful lives | As of | ||||||||
(Years) | March 31, 2019 | December 31, 2018 | |||||||
Owned Assets: | |||||||||
Network equipment and computers | 3-5 | $ | $ | ||||||
Software | 3-5 | ||||||||
Leasehold improvements | 3-8 | ||||||||
Office furniture and equipment | 3-8 | ||||||||
Motor vehicles | 2-5 | ||||||||
Buildings | 30 | ||||||||
Land | — | ||||||||
Capital work in progress | — | ||||||||
Less: Accumulated depreciation and amortization | ( | ) | ( | ) | |||||
$ | $ | ||||||||
Right-of-use assets under finance leases: | |||||||||
Leasehold improvements | $ | $ | |||||||
Office furniture and equipment | |||||||||
Motor vehicles | |||||||||
Less: Accumulated depreciation and amortization | ( | ) | ( | ) | |||||
$ | $ | ||||||||
Property and equipment, net | $ | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Depreciation and amortization expense | $ | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Cost | $ | $ | |||||
Less : Accumulated amortization | ( | ) | ( | ) | |||
Internally developed software, net | $ | $ |
Three months ended March 31 | |||||||
2019 | 2018 | ||||||
Amortization expense | $ | $ |
Assets: | ||||
Cash and cash equivalents | $ | |||
Restricted cash | ||||
Accounts receivable | ||||
Other current assets | ||||
Property and equipment | ||||
Other assets | ||||
Intangible assets | ||||
Customer relationships | ||||
Developed technology | ||||
Trade names and trademarks | ||||
Liabilities: | ||||
Current liabilities | ( | ) | ||
Deferred tax liabilities, net | ( | ) | ||
Other non-current liabilities | ( | ) | ||
( | ) | |||
Net assets acquired | $ | |||
Goodwill | ||||
Total purchase consideration | $ |
Insurance | Healthcare | TT&L | F&A | All Other | Analytics | Total | |||||||||||||||||||||
Balance at January 1, 2018 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||||||
Measurement period adjustments | ( | ) | ( | ) | |||||||||||||||||||||||
Currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Impairment charges | ( | ) | ( | ) | |||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Currency translation adjustments | |||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | $ | $ |
As of March 31, 2019 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Accumulated Impairment | Net Carrying Amount | ||||||||||||
Finite-lived intangible assets: | |||||||||||||||
Customer relationships | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
Leasehold benefits | ( | ) | |||||||||||||
Developed technology | ( | ) | |||||||||||||
Non-compete agreements | ( | ) | |||||||||||||
Trade names and trademarks | ( | ) | ( | ) | |||||||||||
$ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Indefinite-lived intangible assets: | |||||||||||||||
Trade names and trademarks | — | — | |||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | ( | ) | $ |
As of December 31, 2018 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Accumulated Impairment | Net Carrying Amount | ||||||||||||
Finite-lived intangible assets: | |||||||||||||||
Customer relationships | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
Leasehold benefits | ( | ) | |||||||||||||
Developed technology | ( | ) | |||||||||||||
Non-compete agreements | ( | ) | |||||||||||||
Trade names and trademarks | ( | ) | ( | ) | |||||||||||
$ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Indefinite-lived intangible assets: | |||||||||||||||
Trade names and trademarks | — | — | |||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | ( | ) | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Amortization expense | $ | $ |
(in years) | |
Customer relationships | |
Leasehold benefits | |
Developed technology | |
Non-compete agreements | |
Trade names and trademarks (Finite lived) |
Estimated future amortization expense related to intangible assets as of March 31, 2019 is as follows: | |||
2019 (April 1 - December 31) | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
2024 and thereafter | |||
Total | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Derivative instruments | $ | $ | |||||
Advances to suppliers | |||||||
Receivables from statutory authorities | |||||||
Contract assets | |||||||
Deferred contract fulfillment costs | |||||||
Others | |||||||
Other current assets | $ | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Lease deposits | $ | $ | |||||
Derivative instruments | |||||||
Deposits with statutory authorities | |||||||
Term deposits | |||||||
Contract assets | |||||||
Deferred contract fulfillment costs | |||||||
Others | |||||||
Other assets | $ | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Accrued expenses | $ | $ | |||||
Derivative instruments | |||||||
Client liabilities | |||||||
Other current liabilities | |||||||
Accrued expenses and other current liabilities | $ | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Derivative instruments | $ | $ | |||||
Unrecognized tax benefits | |||||||
Deferred rent | |||||||
Retirement benefits | |||||||
Deferred transition revenue | |||||||
Others | |||||||
Other non-current liabilities | $ | $ |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Cumulative foreign currency translation loss | $ | ( | ) | $ | ( | ) | |
Unrealized gain/(loss) on cash flow hedges, net of taxes of $1,658 and $115, respectively | ( | ) | |||||
Retirement benefits, net of taxes of $56 and ($53), respectively | |||||||
Accumulated other comprehensive loss | $ | ( | ) | $ | ( | ) |
As of March 31, 2019 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets | |||||||||||||||
Mutual funds* | $ | $ | $ | $ | |||||||||||
Derivative financial instruments | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Liabilities | |||||||||||||||
Derivative financial instruments | $ | $ | $ | $ | |||||||||||
Total | $ | $ | $ | $ | |||||||||||
As of December 31, 2018 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets | |||||||||||||||
Mutual funds* | $ | $ | $ | $ | |||||||||||
Derivative financial instruments | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Liabilities | |||||||||||||||
Derivative financial instruments | $ | $ | $ | $ | |||||||||||
Total | $ | $ | $ | $ |
Derivatives designated as hedging instruments: | As of | |||||||
Foreign currency exchange contracts | March 31, 2019 | December 31, 2018 | ||||||
Other current assets | $ | $ | ||||||
Other assets | $ | $ | ||||||
Accrued expenses and other current liabilities | $ | $ | ||||||
Other non-current liabilities | $ | $ | ||||||
Derivatives not designated as hedging instruments: | As of | |||||||
Foreign currency exchange contracts | March 31, 2019 | December 31, 2018 | ||||||
Other current assets | $ | $ | ||||||
Accrued expenses and other current liabilities | $ | $ |
Three months ended March 31, | ||||||||
Forward Exchange Contracts: | 2019 | 2018 | ||||||
Gain/(loss) recognized in AOCI | ||||||||
Derivatives in cash flow hedging relationships | $ | $ | ( | ) | ||||
Gain/(loss) recognized in unaudited consolidated statements of income | ||||||||
Derivatives not designated as hedging instruments | $ | $ | ( | ) |
Location and amount of gain/(loss) recognized in unaudited consolidated statements of income for cash flow hedging relationships and derivatives not designated as hedging instruments | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
As per unaudited consolidated statements of income | Gain/(loss) on foreign currency exchange contracts | As per unaudited consolidated statements of income | Gain/(loss) on foreign currency exchange contracts | |||||||||||||
Cash flow hedging relationships | ||||||||||||||||
Location in unaudited consolidated statements of income where gain/(loss) was reclassed from AOCI | ||||||||||||||||
Cost of revenues | $ | $ | $ | $ | ||||||||||||
General and administrative expenses | $ | $ | ||||||||||||||
Selling & marketing expenses | $ | $ | ||||||||||||||
Depreciation & amortization | $ | $ | ||||||||||||||
$ | $ | |||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Location in unaudited consolidated statements of income where gain/(loss) was recognized | ||||||||||||||||
Foreign exchange gain/(loss), net | $ | $ | $ | $ | ( | ) | ||||||||||
$ | $ | $ | $ | ( | ) |
Notes | Revolver Credit | Structured Payables | Total | |||||||||||||
2019 (April - December) | $ | $ | $ | $ | ||||||||||||
2020 | ||||||||||||||||
2021 | ||||||||||||||||
2022 | ||||||||||||||||
2023 | ||||||||||||||||
Thereafter | ||||||||||||||||
Total | $ | $ | $ | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Service cost | $ | $ | |||||
Interest cost | |||||||
Expected return on plan assets | ( | ) | ( | ) | |||
Amortization of actuarial (gain)/loss | ( | ) | ( | ) | |||
Net periodic benefit cost | $ | $ |
Change in Plan Assets | ||||
Plan assets at January 1, 2019 | $ | |||
Actual return | ||||
Employer contribution | ||||
Benefits paid* | ( | ) | ||
Effect of exchange rate changes | ||||
Plan assets at March 31, 2019 | $ |
As of | |||
March 31, 2019 | |||
Operating Lease | |||
Operating lease right-of-use assets | $ | ||
Operating lease liabilities - Current | $ | ||
Operating lease liabilities - Non-current | |||
Total operating lease liabilities | $ | ||
Finance Lease | |||
Property and equipment, gross | $ | ||
Accumulated depreciation | ( | ) | |
Property and equipment, net | $ | ||
Finance lease liabilities - Current | $ | ||
Finance lease liabilities - Non-current | |||
Total finance lease liabilities | $ |
Lease cost | Three months ended March 31, 2019 | ||
Finance lease: | |||
Amortization of right-of-use assets | $ | ||
Interest on lease liabilities | |||
Operating lease (a) | |||
Total lease cost | $ |
Three months ended March 31, 2019 | |||
Cash paid for amounts included in the measurement of lease liabilities : | |||
Operating cash flows from operating leases | $ | ||
Operating cash flows from finance leases | $ | ||
Financing cash flows from finance leases | $ | ||
Weighted-average remaining lease term | |||
Finance lease | |||
Operating lease | |||
Weighted-average discount rate | |||
Finance lease | % | ||
Operating lease | % |
Operating Leases | Finance Leases | ||||||
2019 (April 1 - December 31) | $ | $ | |||||
2020 | |||||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
2024 | |||||||
2025 and thereafter | |||||||
Total lease payments | |||||||
Less: Imputed interest | |||||||
Present value of lease liabilities |
During the next twelve months ending December 31, | Operating Leases | Capital Leases | |||||
2019 | $ | $ | |||||
2020 | |||||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
2024 | |||||||
2025 and thereafter | |||||||
Total minimum lease payment | $ | $ | |||||
Less: Imputed interest | NA | ||||||
Present value of minimum lease payments | NA | ||||||
Less: Current portion | NA | ||||||
Long term capital lease obligation | NA | $ |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
Cost of revenues | $ | $ | |||||
General and administrative expenses | |||||||
Selling and marketing expenses | |||||||
Total | $ | $ |
Number of Options | Weighted-Average Exercise Price | Aggregate Intrinsic Value | Weighted-Average Remaining Contractual Life (Years) | ||||||||||
Outstanding at December 31, 2018 | $ | $ | |||||||||||
Granted | — | — | |||||||||||
Exercised | ( | ) | — | ||||||||||
Forfeited | — | — | |||||||||||
Outstanding at March 31, 2019 | $ | $ | |||||||||||
Vested and exercisable at March 31, 2019 | $ | $ |
Restricted Stock | Restricted Stock Units | ||||||||||||
Number | Weighted Average Fair Value | Number | Weighted Average Fair Value | ||||||||||
Outstanding at December 31, 2018* | $ | $ | |||||||||||
Granted | |||||||||||||
Vested | ( | ) | ( | ) | |||||||||
Forfeited | ( | ) | |||||||||||
Outstanding at March 31, 2019* | $ | $ |
Revenue Based PRSUs | Market Condition Based PRSUs | ||||||||||||
Number | Weighted Average Fair Value | Number | Weighted Average Fair Value | ||||||||||
Outstanding at December 31, 2018 | $ | $ | |||||||||||
Granted | |||||||||||||
Vested | |||||||||||||
Forfeited | |||||||||||||
Outstanding at March 31, 2019 | $ | $ |
• | our dependence on a limited number of clients in a limited number of industries; |
• | worldwide political, economic or business conditions; |
• | negative public reaction in the U.S. or elsewhere to offshore outsourcing; |
• | fluctuations in our earnings; |
• | our ability to attract and retain clients including in a timely manner; |
• | our ability to successfully consummate or integrate strategic acquisitions; |
• | restrictions on immigration; |
• | our ability to hire and retain enough sufficiently trained employees to support our operations; |
• | our ability to grow our business or effectively manage growth and international operations; |
• | any changes in the senior management team; |
• | increasing competition in our industry; |
• | telecommunications or technology disruptions; |
• | our ability to withstand the loss of a significant customer; |
• | our ability to realize the entire book value of goodwill and other intangible assets from acquisitions; |
• | regulatory, legislative and judicial developments, including changes to or the withdrawal of governmental fiscal incentives; |
• | changes in tax laws or decisions regarding repatriation of funds held abroad; |
• | ability to service debt or obtain additional financing on favorable terms; |
• | legal liability arising out of customer contracts; |
• | technological innovation; |
• | political or economic instability in the geographies in which we operate; |
• | cyber security incidents, data breaches, or other unauthorized disclosure of sensitive or confidential client and customer data; and |
• | adverse outcome of our disputes with the Indian tax authorities. |
• | Insurance, |
• | Healthcare, |
• | Travel, Transportation and Logistics, |
• | Finance and Accounting, |
• | Analytics, and |
• | All Other (consisting of our remaining operating segments, including our Banking and Financial services, Utilities and Consulting operating segments). |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
(dollars in millions) | |||||||
Revenues, net | $ | 239.6 | $ | 207.0 | |||
Cost of revenues(1) | 157.3 | 138.1 | |||||
Gross profit(1) | 82.3 | 68.9 | |||||
Operating expenses: | |||||||
General and administrative expenses | 32.5 | 29.2 | |||||
Selling and marketing expenses | 18.0 | 14.0 | |||||
Depreciation and amortization | 13.7 | 10.5 | |||||
Impairment charges | 1.2 | — | |||||
Total operating expenses | 65.4 | 53.7 | |||||
Income from operations | 16.9 | 15.2 | |||||
Foreign exchange gain, net | 1.3 | 0.6 | |||||
Interest expense | (3.6 | ) | (0.5 | ) | |||
Other income, net | 4.4 | 3.5 | |||||
Income before income tax expense/(benefit) and earnings from equity affiliates | 19.0 | 18.8 | |||||
Income tax expense/(benefit) | 4.2 | (4.5 | ) | ||||
Income before earnings from equity affiliates | 14.8 | 23.3 | |||||
Loss from equity-method investment | 0.1 | 0.1 | |||||
Net income attributable to ExlService Holdings, Inc. stockholders | $ | 14.7 | $ | 23.2 |
Three months ended March 31, | Percentage change | |||||||||||||
2019 | 2018 | Change | ||||||||||||
(dollars in millions) | ||||||||||||||
Insurance | $ | 69.0 | $ | 63.9 | $ | 5.1 | 8.0 | % | ||||||
Healthcare | 20.6 | 22.8 | (2.2 | ) | (9.8 | )% | ||||||||
Travel, Transportation and Logistics | 17.4 | 17.5 | (0.1 | ) | (0.4 | )% | ||||||||
Finance and Accounting | 25.7 | 24.0 | 1.7 | 7.3 | % | |||||||||
All Other | 19.9 | 21.7 | (1.8 | ) | (8.5 | )% | ||||||||
Analytics | 87.0 | 57.1 | 29.9 | 52.3 | % | |||||||||
Total revenues, net | $ | 239.6 | $ | 207.0 | $ | 32.6 | 15.8 | % |
Cost of Revenues | Gross Margin | ||||||||||||||||||||||
Three months ended March 31, | Change | Percentage change | Three months ended March 31, | Change | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Insurance | $ | 46.7 | $ | 42.4 | $ | 4.3 | 10.1 | % | 32.4 | % | 33.6 | % | (1.2 | )% | |||||||||
Healthcare | 17.0 | 17.2 | (0.2 | ) | (1.4 | )% | 17.4 | % | 24.4 | % | (7.0 | )% | |||||||||||
TT&L | 9.8 | 10.5 | (0.7 | ) | (6.2 | )% | 43.8 | % | 40.3 | % | 3.5 | % | |||||||||||
F&A | 14.3 | 14.7 | (0.4 | ) | (3.1 | )% | 44.5 | % | 38.6 | % | 5.9 | % | |||||||||||
All Other | 12.6 | 15.2 | (2.6 | ) | (17.2 | )% | 36.7 | % | 30.0 | % | 6.7 | % | |||||||||||
Analytics | 56.9 | 38.1 | 18.8 | 49.4 | % | 34.6 | % | 33.3 | % | 1.3 | % | ||||||||||||
Total | $ | 157.3 | $ | 138.1 | $ | 19.2 | 13.9 | % | 34.4 | % | 33.3 | % | 1.1 | % |
Three months ended March 31, | Change | Percentage change | ||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
General and administrative expenses | $ | 32.5 | $ | 29.2 | $ | 3.3 | 11.2 | % | ||||||
Selling and marketing expenses | 18.0 | 14.0 | 4.0 | 29.4 | % | |||||||||
Selling, general and administrative expenses | $ | 50.5 | $ | 43.2 | $ | 7.3 | 17.0 | % | ||||||
As a percentage of revenues | 21.1 | % | 20.9 | % |
Three months ended March 31, | Change | Percentage change | ||||||||||||
2019 | 2018 | |||||||||||||
(dollars in millions) | ||||||||||||||
Depreciation expense | $ | 8.1 | $ | 6.6 | $ | 1.5 | 24.1 | % | ||||||
Intangible amortization expense | 5.6 | 3.9 | 1.7 | 40.1 | % | |||||||||
Depreciation and amortization expense | $ | 13.7 | $ | 10.5 | $ | 3.2 | 30.1 | % | ||||||
As a percentage of revenues | 5.7 | % | 5.1 | % |
Three months ended March 31, | Percentage change | ||||||||||||
2019 | 2018 | Change | |||||||||||
(dollars in millions) | |||||||||||||
Impairment charges | $ | 1.2 | $ | — | $ | 1.2 | N/A | ||||||
As a percentage of revenues | 0.5 | % | — |
Three months ended March 31, | Percentage change | |||||||||||||
2019 | 2018 | Change | ||||||||||||
(dollars in millions) | ||||||||||||||
Interest and dividend income | $ | 0.8 | $ | 0.3 | $ | 0.5 | 158.4 | % | ||||||
Gain on sale and mark-to-market of mutual funds | 3.5 | 3.1 | 0.4 | 12.5 | % | |||||||||
Other, net | 0.1 | 0.1 | — | 8.6 | % | |||||||||
Other income, net | $ | 4.4 | $ | 3.5 | $ | 0.9 | 25.2 | % |
Three months ended March 31, | |||||||
2019 | 2018 | ||||||
(dollars in millions) | |||||||
Opening cash, cash equivalents and restricted cash | $ | 104.1 | $ | 94.3 | |||
Net cash provided by/(used for) operating activities | 8.3 | (8.0 | ) | ||||
Net cash used for investing activities | (37.2 | ) | (3.0 | ) | |||
Net cash provided by/(used for) financing activities | 19.8 | (6.2 | ) | ||||
Effect of exchange rate changes | (0.4 | ) | (0.6 | ) | |||
Closing cash, cash equivalents and restricted cash | $ | 94.6 | $ | 76.5 |
Payment Due by Period | ||||||||||||||||||||
Less than | 1-3 | 4-5 | After | |||||||||||||||||
1 year | years | years | 5 years | Total | ||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Finance leases | $ | 0.4 | $ | 0.4 | $ | 0.2 | $ | — | $ | 1.0 | ||||||||||
Operating leases(a) | 23.6 | 40.5 | 31.4 | 32.7 | 128.2 | |||||||||||||||
Purchase obligations | 9.6 | — | — | — | 9.6 | |||||||||||||||
Other obligations(b) | 1.8 | 3.3 | 2.8 | 4.6 | 12.5 | |||||||||||||||
Borrowings: | ||||||||||||||||||||
Principal payments | 20.9 | 56.7 | 110.0 | 150.0 | 337.6 | |||||||||||||||
Interest payments(c) | 11.7 | 20.4 | 14.0 | 5.3 | 51.4 | |||||||||||||||
Total contractual cash obligations(d) | $ | 68.0 | $ | 121.3 | $ | 158.4 | $ | 192.6 | $ | 540.3 |
(a) | Represents minimum lease payments payable for cancellable and non-cancellable lease period. |
(b) | Represents estimated payments under the Gratuity Plan. |
(c) | Interest on borrowings is calculated based on the interest rate on the outstanding borrowings as of March 31, 2019. |
(d) | Excludes $0.8 million related to uncertain tax positions, since the extent of the amount and timing of payment is currently not reliably estimable or determinable. |
Period | Total Number of Shares Purchased | Average Price Paid per share(2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||
Jan 1, 2019 through Jan 31, 2019(1) | 100,289 | $ | 54.67 | 95,400 | $ | 34,792,477 | ||||||||
Feb 1, 2019 through Feb 28, 2019(1) | 95,344 | $ | 62.14 | 77,567 | $ | 30,000,041 | ||||||||
Mar 1, 2019 through Mar 31, 2019 | 66,898 | $ | 59.79 | 66,898 | $ | 26,000,095 | ||||||||
Total | 262,531 | $ | 58.69 | 239,865 | $ | — |
3.1 | ||
3.2 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Scheme | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Extension Presentation Linkbase | |
Date: April 30, 2019 | EXLSERVICE HOLDINGS, INC. | ||
By: | /S/ VISHAL CHHIBBAR | ||
Vishal Chhibbar Chief Financial Officer (Duly Authorized Signatory, Principal Financial and Accounting Officer) |
1. | I have reviewed this Quarterly Report of ExlService Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 30, 2019 | /s/ Rohit Kapoor |
Rohit Kapoor | |
Vice-Chairman and Chief Executive Officer |
1. | I have reviewed this Quarterly Report of ExlService Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 30, 2019 | /s/ Vishal Chhibbar |
Vishal Chhibbar | |
Chief Financial Officer |
(a) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(b) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Rohit Kapoor | |
Rohit Kapoor | |
Vice-Chairman and Chief Executive Officer | |
April 30, 2019 |
(a) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(b) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Vishal Chhibbar | |
Vishal Chhibbar | |
Chief Financial Officer | |
April 30, 2019 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 26, 2019 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Entity Registrant Name | EXLSERVICE HOLDINGS, INC. | |
Entity Central Index Key | 0001297989 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Trading Symbol | EXLS | |
Document Fiscal Period Focus | Q1 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 34,341,972 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 38,256,036 | 37,850,544 |
Common stock, outstanding (in shares) | 34,365,437 | 34,222,476 |
Treasury stock (in shares) | 3,890,599 | 3,628,068 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
||||||
Statement of Comprehensive Income [Abstract] | |||||||
Net income | $ 14,695 | $ 23,158 | |||||
Other comprehensive income/(loss): | |||||||
Unrealized gain/(loss) on effective cash flow hedges, net of taxes $1,189 and ($800), respectively | 4,748 | (4,214) | |||||
Foreign currency translation gain/(loss) | 2,680 | (7,811) | |||||
Reclassification adjustments | |||||||
Gain on cash flow hedges, net of taxes $354 and ($776), respectively | [1] | (1,025) | (1,895) | ||||
Retirement benefits, net of taxes $109 and $1, respectively | [2] | (148) | (40) | ||||
Total other comprehensive income/(loss) | 6,255 | (13,960) | |||||
Total comprehensive income | $ 20,950 | $ 9,198 | |||||
|
Consolidated Statements of Comprehensive (Loss)/Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Unrealized (loss)/gain on effective cash flow hedges, taxes | $ 1,189 | $ (800) |
Realized gain on cash flow hedges, taxes | 354 | (776) |
Retirement benefits, taxes | $ 109 | $ 1 |
Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive (Loss)/Income |
Treasury Stock |
Non - Controlling Interest |
---|---|---|---|---|---|---|---|
Impact of adoption of ASU 2016-09 | $ 454 | $ 0 | $ 454 | ||||
Adjusted equity balance | 600,499 | $ 37 | 322,246 | 427,518 | $ (45,710) | $ (103,816) | $ 224 |
Beginning balance (in shares) at Dec. 31, 2017 | 36,790,751 | (2,902,018) | |||||
Beginning balance at Dec. 31, 2017 | 600,045 | $ 37 | 322,246 | 427,064 | (45,710) | $ (103,816) | 224 |
Stock issued against stock-based compensation plans (in shares) | 778,222 | ||||||
Stock issued against stock-based compensation plans | 431 | $ 1 | 430 | ||||
Stock-based compensation | 5,074 | 5,074 | |||||
Acquisition of treasury stock (in shares) | (223,993) | ||||||
Acquisition of treasury stock | (13,504) | $ (13,504) | |||||
Non-controlling interest | 7 | 7 | |||||
Other comprehensive income | (13,960) | (13,960) | |||||
Net income | 23,158 | 23,158 | |||||
Ending balance (in shares) at Mar. 31, 2018 | 37,568,973 | (3,126,011) | |||||
Ending balance at Mar. 31, 2018 | $ 601,705 | $ 38 | 327,750 | 450,676 | (59,670) | $ (117,320) | 231 |
Beginning balance (in shares) at Dec. 31, 2018 | 34,222,476 | 37,850,544 | (3,628,068) | ||||
Beginning balance at Dec. 31, 2018 | $ 618,319 | $ 38 | 364,179 | 484,244 | (83,467) | $ (146,925) | 250 |
Stock issued against stock-based compensation plans (in shares) | 405,492 | ||||||
Stock issued against stock-based compensation plans | 22 | 22 | |||||
Stock-based compensation | 6,956 | 6,956 | |||||
Acquisition of treasury stock (in shares) | (262,531) | ||||||
Acquisition of treasury stock | (15,408) | $ (15,408) | |||||
Allocation of equity component related to issuance costs on convertible senior notes | (13) | (13) | |||||
Non-controlling interest | 9 | 9 | |||||
Other comprehensive income | 6,255 | 6,255 | |||||
Net income | $ 14,695 | 14,695 | |||||
Ending balance (in shares) at Mar. 31, 2019 | 34,365,437 | 38,256,036 | (3,890,599) | ||||
Ending balance at Mar. 31, 2019 | $ 630,835 | $ 38 | $ 371,144 | $ 498,939 | $ (77,212) | $ (162,333) | $ 259 |
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Cash flows from operating activities: | ||
Net income | $ 14,695 | $ 23,158 |
Adjustments to reconcile net income to net cash provided/(used for) by operating activities: | ||
Depreciation and amortization | 13,724 | 10,655 |
Stock-based compensation expense | 6,956 | 5,074 |
Unrealized gain on short term investments | (3,185) | (2,842) |
Unrealized foreign exchange loss/(gain), net | 127 | (3,319) |
Deferred income tax expense | 1,049 | 3,433 |
Allowance for doubtful accounts receivable | 298 | (612) |
Loss from equity-method investment | 67 | 56 |
Amortization of non-cash interest expense related to convertible senior notes | 600 | 0 |
Impairment charges | 1,227 | 0 |
Others, net | 417 | 28 |
Change in operating assets and liabilities: | ||
Accounts receivable | (12,016) | (590) |
Prepaid expenses and other current assets | 591 | (2,164) |
Advance income tax, net | (2,099) | (13,906) |
Other assets | 388 | (1,789) |
Accounts payable | (1,159) | (1,726) |
Deferred revenue | 3,262 | 877 |
Accrued employee costs | (22,436) | (27,655) |
Accrued expenses and other liabilities | 5,837 | 3,317 |
Net cash provided by/(used for) operating activities | 8,343 | (8,005) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (10,878) | (12,680) |
Business acquisition (net of cash acquired) | 0 | (380) |
Purchase of investments | (47,683) | (20,310) |
Proceeds from redemption of investments | 21,361 | 30,358 |
Net cash used for investing activities | (37,200) | (3,012) |
Cash flows from financing activities: | ||
Principal payments on finance lease obligations | (137) | (42) |
Proceeds from borrowings | 46,000 | 12,000 |
Repayments of borrowings | (10,572) | (5,036) |
Payment of debt issuance costs | (97) | 0 |
Acquisition of treasury stock | (15,408) | (13,504) |
Proceeds from exercise of stock options | 22 | 431 |
Net cash provided by/(used for) financing activities | 19,808 | (6,151) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (455) | (644) |
Net decrease in cash, cash equivalents and restricted cash | (9,504) | (17,812) |
Cash, cash equivalents and restricted cash at beginning of period | 104,131 | 94,277 |
Cash, cash equivalents and restricted cash at end of period | $ 94,627 | $ 76,465 |
Organization |
3 Months Ended |
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Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization ExlService Holdings, Inc. (“ExlService Holdings”) is organized as a corporation under the laws of the state of Delaware. ExlService Holdings, together with its subsidiaries and affiliates (collectively, the “Company”), operates in the Business Process Management (“BPM”) industry providing operations management services and analytics services that help businesses enhance revenue growth and improve profitability. Using its proprietary platforms, methodologies and tools, the Company looks deeper to help companies improve global operations, enhance data-driven insights, increase customer satisfaction, and manage risk and compliance. The Company’s clients are located principally in the United States of America (“U.S.”) and the United Kingdom (“U.K”). |
Summary of Significant Accounting Policies |
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Mar. 31, 2019 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Basis of Preparation and Principles of Consolidation The unaudited consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“US GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The unaudited consolidated financial statements reflect all adjustments (of a normal and recurring nature) that management considers necessary for a fair presentation of such statements for the interim periods presented. The unaudited consolidated statements of income for the interim periods presented are not necessarily indicative of the results for the full year or for any subsequent period. The accompanying unaudited consolidated financial statements include the financial statements of ExlService Holdings and all of its subsidiaries. The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and income and expenses arising from intra-group transactions, are eliminated while preparing those financial statements. Accounting policies of the respective individual subsidiary and associate are aligned, wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under US GAAP. The Company’s investments in equity affiliates are initially recorded at cost and any excess cost over proportionate share of the fair value of the net assets of the investee at the acquisition date is recognized as goodwill. The proportionate share of net income or loss of the investee is recognized in the unaudited consolidated statements of income. Non-controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to the parent and it represents the minority partner’s interest in the operations of ExlService Colombia S.A.S. Non-controlling interest consists of the amount of such interest at the date of obtaining control over the subsidiary, and the non-controlling interest's share of changes in equity since that date. The non-controlling interest in the operations for all periods presented were insignificant and is included under general and administrative expenses in the unaudited consolidated statements of income. (b) Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the unaudited consolidated statements of income during the reporting period. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates and assumptions that affect the financial statements include, but are not limited to, allowance for doubtful receivables, expected recoverability from customers with contingent fee arrangements, recoverability of dues from statutory authorities, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments, assumptions used to calculate stock-based compensation expense, assumptions used to determine incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, lease term to calculate lease cost, depreciation and amortization periods, purchase price allocation, recoverability of long-lived assets including goodwill and intangibles, and estimated costs to complete fixed price contracts. (c) Employee Benefits Contributions to defined contribution plans are charged to the unaudited consolidated statements of income in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are accrued in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. Prior service cost, if any, resulting from an amendment to a plan is recognized and amortized over the remaining period of service of the covered employees. The Company recognizes its liabilities for compensated absences depending on whether the obligation is attributable to employee services already rendered, relates to rights that vest or accumulate and payment is probable and estimable. The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period. The interest cost, expected return on plan assets and amortization of actuarial gains/loss are classified in “Other income, net”. Refer Note 20 to the unaudited consolidated financial statements for details. (d) Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of ninety days or less to be cash equivalents. Pursuant to the Company’s investment policy, surplus funds are invested in highly-rated debt mutual funds, money market accounts and time deposits to reduce its exposure to market risk with regard to these funds. Restricted cash represents amounts on deposit with banks against bank guarantees issued through banks in favor of relevant statutory authorities for equipment imports, deposits for obtaining indirect tax registrations and for demands against pending income tax assessments (refer Note 26 to the unaudited consolidated financial statements for details). These deposits with banks have maturity dates after March 31, 2020. Restricted cash presented under current assets represents funds held on behalf of clients in dedicated bank accounts. For purposes of the unaudited statements of cash flows, the Company includes in its cash and cash-equivalent balances those amounts that have been classified as restricted cash and restricted cash equivalents. (e) Revenue Recognition Revenue is recognized when services are provided to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for our services. Revenue is measured based on consideration specified in a contract with a customer and excludes discounts and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by providing services to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Adoption of ASU 2014-09 Topic 606, “Revenue from Contracts with Customers” (Topic 606) On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method and applied its guidance to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The effect from the adoption of Topic 606 was not material to the Company's financial statements. Nature of services The Company derives its revenues from operations management and analytics services. The Company operates in the business process management (“BPM”) industry providing operations management and analytics services helping businesses enhance revenue growth and improve profitability. The Company provides BPM or “operations management” services, which typically involve transfer to the Company of business operations of a client, after which it administers and manages those operations for its client on an ongoing basis. The Company also provides industry-specific digital transformational services related to operations management services, and analytics services that focus on driving improved business outcomes for clients by generating data-driven insights across all parts of their business. The Company also provides care optimization and reimbursement optimization services, for its clients through its healthcare analytics solutions and services. The Company offers integrated solutions to help its clients with cost containment by leveraging technology platforms, customizable and configurable analytics and expertise in healthcare reimbursements to help clients enhance their claims payment accuracy. Type of Contracts
b) In respect of arrangements involving subcontracting, in part or whole of the assigned work, the Company evaluates whether it is in control of the services before the same are transferred to the customer to assess whether it is Principal or Agent in the arrangement based on guidance on “Principal versus agent considerations” in Topic 606.
Arrangements with Multiple Performance Obligations The Company’s contracts with customers do not generally bundle different services together except for software and related services contracts, which are not significant, involving implementation services and post contract maintenance services. In such software and related services contracts, revenue is allocated to each performance obligation based on the relative standalone selling price. A separate contract is generally drafted for each type of service sold, even if to the same customer. The typical length of a contract is 3 to 5 years for our operations management contracts. Allocation of transaction price to performance obligations The transaction price is allocated to performance obligations on a relative standalone selling price basis. Standalone selling prices are estimated by reference to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the contract. In assessing whether to allocate variable consideration to a specific part of the contract, the Company considers the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Variable Consideration Variability in the transaction price arises primarily due to service level agreements, cost of living adjustments, and pre-payment and volume discounts. The Company considers its experience with similar transactions and expectations regarding the contract in estimating the amount of variable consideration that should be recognized during a period. The Company believes that the expected value method is most appropriate for determining the variable consideration since the company has large number of contracts with similar nature of transactions/services. Unbilled Receivables Unbilled receivables represents revenues recognized for services rendered between the last billing date and the balance sheet date. Unbilled receivables also include revenues recognized from reimbursement optimization services when the Company identifies an overpayment claim and the same is acknowledged by its customers, however not invoiced at the balance sheet date. Accordingly, amounts for services that the Company has performed and for which an invoice has not yet been issued to the customers are presented as a part of contract assets as accounts receivable. Deferred Revenue The Company has deferred revenue attributable to certain process transition activities, with respect to its customers where such activities do not represent separate performance obligations. Revenues related to such transition activities are contract liabilities classified under “Deferred Revenue” in the Company's unaudited consolidated balance sheets and subsequently recognized ratably over the period in which the related services are performed. Deferred revenue also includes the amount for which services have been rendered but other conditions of revenue recognition are not met, for example where the Company does not have persuasive evidence of an arrangement with customer. Costs related to such transition activities are contract fulfillment costs, and thereby classified under “Other Current Assets” and “Other Assets” in the unaudited consolidated balance sheets, and are recognized ratably over the estimated expected period of benefit, under Cost of Revenues in the unaudited consolidated statements of income. Other incremental and direct costs incurred for acquiring contracts, such as sales commissions are contract acquisition costs and thereby classified under “Other Current Assets” and “Other Assets” in the unaudited consolidated balance sheets. Such costs are amortized over the expected period of benefit and recorded under Selling and marketing expenses in the unaudited consolidated statements of income. Any upfront payments made to customers are contract assets and classified under “Other Current Assets and Other Assets” in the unaudited consolidated balance sheets. Such costs are amortized over the expected period of benefit and are recorded as an adjustment to transaction price and reduced from revenues. Reimbursements of out-of-pocket expenses received from clients are included as part of revenues. Payment terms All Contracts entered into by the Company specify the payment terms and are defined for each contract separately. Usual payment terms range between 30-60 days. The Company does not have any extended payment terms clauses in existing contracts. At times, the Company enters into fixed price contracts and software licenses involving significant implementation wherein the milestones are defined such that the Company can recover the costs with a reasonable margin. Practical expedients and exemptions The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of 1 year or less and (ii) contracts for which the Company recognizes revenue at the amount to which we have the right to invoice for services performed. Accounts Receivable We record accounts receivable net of allowances for doubtful accounts. Allowances for doubtful accounts are established through the evaluation of aging of accounts receivables, prior collection experience, current market conditions, clients’ financial condition and the amount of accounts receivables in dispute to estimate the collectability of these accounts receivables. (f) Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, current portion of operating lease liabilities and operating lease liabilities, less current portion in the Company's unaudited consolidated balance sheets. Finance leases are included in property and equipment, current portion of finance lease obligations and finance lease obligations, less current portion in the Company's unaudited consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for separately. On January 1, 2019, the date of initial application, the Company adopted, Leases (Topic 842), using the modified retrospective method. The modified retrospective method provides a method of recording those leases which had not expired as of the date of adoption of January 1, 2019. The prior period unaudited consolidated financial statements have not been retrospectively adjusted and continues to be reported under Topic 840. The Company elected the practical expedient permitted under the transition guidance under Topic 842, which amongst other matters, allowed the Company (i) not to apply the recognition requirements to short-term leases (leases with a lease term of 12 months or less), (ii) not to reassess whether any expired or existing contracts are or contain leases, (iii) not to reassess the lease classification for any expired or existing leases, and (iv) not to reassess initial direct costs for any existing leases. The adoption resulted in the recognition of ROU assets of $80,328, net of deferred rent of $8,626 and lease liabilities of $88,954 for operating leases as of January 1, 2019. The Company's accounting for finance leases remained substantially unchanged. The adoption had no impact on opening balance of retained earnings. Refer Note 21 to the unaudited consolidated financial statements for details. (g) Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-13, Financial Instruments - Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is to be deducted from the amortized cost of the financial asset(s) so as to present the net carrying value at the amount expected to be collected on the financial asset. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment should be applied through a modified retrospective approach. Early adoption as of the fiscal years beginning after December 15, 2018 is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In June 2018, FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting. This ASU involves several aspects of the accounting for non-employee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees. The amendments in this ASU affect all entities that enter into share-based payment transactions for acquiring goods and services from non-employees. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The adoption of this ASU is not expected to have any material effect on the Company’s consolidated financial statements. In August 2018, FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic 820, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments in ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The adoption of this ASU is not expected to have any material effect on the Company’s consolidated financial statements. In August 2018, FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this Update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in ASU are effective for fiscal years beginning after December 15, 2020. An entity is permitted to early adopt this Update. The adoption of this ASU is not expected to have any material effect on the Company’s consolidated financial statements. In August 2018, FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the ASU requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in FASB Accounting Standard Codification Subtopic 350-40 on internal-use software to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The ASU 2018-15 also provides guidance on amortization and impairment of any costs capitalized, along with new presentation and disclosure requirements. The new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and both prospective and retrospective transition methods are allowed. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. (h) Recently Adopted Accounting Pronouncements In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), which requires the identification of arrangements that should be accounted for as leases. Lease arrangements exceeding a twelve months term should be recognized as assets with corresponding liabilities on the balance sheet of the lessee. This ASU requires recognition of an ROU asset and lease obligation for those leases classified as operating leases under Topic 840, while the income statement will reflect lease expense for operating leases. The balance sheet amounts recorded for existing operating leases at the date of adoption of this ASU must be calculated using the applicable incremental borrowing rate. The Company adopted Topic 842 as of January 1, 2019 using the modified retrospective method provided by ASU 2018-11. The adoption had a material impact on the Company's unaudited consolidated balance sheets, but did not have a material impact on the Company's unaudited consolidated income statements and unaudited consolidated statements of cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the Company's accounting for finance leases remained substantially unchanged. Refer Note 21 to the unaudited consolidated financial statements for details. In July 2018, FASB issued ASU No. 2018-11, Leases (Topic 842), which provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). The Company adopted Topic 842 as of January 1, 2019 using this ASU. Refer Note 21 to the unaudited consolidated financial statements for details.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographical Information | Segment and Geographical Information The Company operates in the BPM industry and is a provider of operations management and analytics services. The Company has eight operating segments, which are strategic business units that align its products and services with how it manages its business, approaches its key markets and interacts with its clients. Six of those operating segments provide BPM or “operations management” services, five of which are industry-focused operating segments (Insurance, Healthcare, Travel, Transportation and Logistics, Banking and Financial Services, and Utilities) and one of which is a “capability” operating segment (Finance and Accounting) that provides services to clients in our industry-focused segments as well as clients across other industries. In each of these six operating segments, the Company provides operations management services, which typically involve transfer to the Company of the business operations of a client, after which it administers and manages those operations for its client on an ongoing basis. The remaining two operating segments are Consulting, which provides industry-specific transformational services related to operations management services, and Analytics, which provides services that focus on driving improved business outcomes for clients by generating data-driven insights across all parts of their business. The Company presents information for the following reportable segments:
The chief operating decision maker (“CODM”) generally reviews financial information such as revenues, cost of revenues and gross profit, disaggregated by the operating segments to allocate an overall budget among the operating segments. The Company does not allocate and therefore the CODM does not evaluate other operating expenses, interest expense or income taxes by segment. Many of the Company’s assets are shared by multiple operating segments. The Company manages these assets on a total Company basis, not by operating segment, and therefore asset information and capital expenditures by operating segment are not presented. Revenues and cost of revenues for the three months ended March 31, 2019 and 2018, respectively, for each of the reportable segments, are as follows:
(1) Exclusive of depreciation and amortization. Revenues, net by service type, were as follows:
(1) BPM and related services include revenues of the Company's five industry-focused operating segments, one capability operating segment and the consulting operating segment, which provides services related to operations management services. Refer reportable segment disclosure above. The Company attributes the revenues to regions based upon the location of its customers.
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues, net | Revenues, net Adoption of ASU 2014-09 Topic 606, “Revenue from Contracts with Customers” On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method and applied its guidance to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The effect from the adoption of Topic 606 was not material to the Company financial statements. Refer Note 3 to the unaudited consolidated financial statements for revenues disaggregated by reportable segments and geography. Contract balances The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:
Accounts receivable includes $75,832 and $63,952 as of March 31, 2019 and December 31, 2018, respectively, representing amounts not billed to customers. The Company has accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers and considers no significant performance risk associated with its unbilled receivables. Contract assets represents upfront payments made to customers. Contract liabilities represents that portion of deferred revenue for which payments have been received in advance from customers including revenues attributable to certain process transition activities for which costs have been capitalized by the Company as contract fulfillment costs. The contract liabilities are included within deferred revenues in the unaudited consolidated balance sheet and are recognized as revenue as (or when) the performance obligation is fulfilled under the contract. Revenue recognized during the three months ended March 31, 2019 and 2018 that was included in the contract liabilities balance at the beginning of the period was $2,777 and $3,710 respectively. Contract acquisition costs The Company had contract acquisition costs of $513 as of March 31, 2019 and $713 as of December 31, 2018. Further, there was no additional capitalization made during the three months ended March 31, 2019. The Company amortized $200 and $73 during the three months ended March 31, 2019 and 2018, respectively. There was no impairment loss in relation to costs capitalized. The capitalized costs will be amortized on a straight-line basis over the life of contract. Contract fulfillment costs The Company had deferred contract fulfillment costs relating to transition activities amounting to $4,472 as of March 31, 2019 and $4,051 as of December 31, 2018. Further, we capitalized an additional $726 during the three months ended March 31, 2019. The Company amortized $305 and $111 during the three months ended March 31, 2019 and 2018, respectively. There was no impairment loss in relation to costs capitalized. The capitalized costs will be amortized on a straight-line basis over the life of contract. Consideration received from customers, if any, relating to such transition activities are classified under Contract Liabilities and are recognized ratably over the period in which the related performance obligations are fulfilled.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income to common stockholders by the weighted average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common shares plus the potentially dilutive effect of common stock equivalents (outstanding stock options, restricted stock and restricted stock units) issued and outstanding at the reporting date, using the treasury stock method. Stock options, restricted stock and restricted stock units that are anti-dilutive are excluded from the computation of weighted average shares outstanding. The following table sets forth the computation of basic and diluted earnings per share:
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Cash, Cash Equivalents and Restricted Cash |
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Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash For the purpose of unaudited statements of cash flows, cash, cash equivalents and restricted cash comprise of the following:
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Other Income, net |
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Other Income, net | Other Income, net Other income, net consists of the following:
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Property and Equipment, net |
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Property and Equipment, net | Property and Equipment, net Property and equipment, net consists of the following:
Capital work in progress represents advances paid towards acquisition of property and equipment and cost incurred to develop software not yet ready to be placed in service. During the three months ended March 31, 2019, there were no changes in estimated useful lives of property and equipment. The depreciation and amortization expense, excluding amortization of acquisition-related intangibles, recognized in the unaudited consolidated statements of income was as follows:
Effective January 1, 2017, the depreciation and amortization expenses set forth above includes the effect of foreign exchange gain/(loss) upon settlement of cash flow hedges, amounting to $57 and $151 for the three months ended March 31, 2019 and 2018, respectively. Refer Note 17 to the unaudited consolidated financial statements for further details. Internally developed software costs, included under Software, was as follows:
During the three months ended March 31, 2019, the Company performed an impairment test of its long-lived assets of its Health Integrated business. Based on the results, the long-lived assets carrying value exceeded their fair value. The primary factor contributing to a reduction in the fair value is the commencement of the wind down of the Health Integrated business, and an anticipated reduction to the Company's estimated future cash flows. As a result of this analysis, the Company recognized a provisional impairment charge of $1,227 during the three months ended March 31, 2019 to write down the carrying value of internally developed software to its fair value. This impairment loss was recorded in the unaudited consolidated statements of income under "impairment charges". The amortization expense on internally developed software recognized in the unaudited consolidated statements of income was as follows:
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Business Combinations, Goodwill and Intangible Assets |
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Business Combination, Goodwill And Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations, Goodwill and Intangible Assets | Business Combinations, Goodwill and Intangible Assets SCIOinspire Holdings Inc. On July 1, 2018, the Company, through its wholly owned subsidiary ExlService.com, LLC (“Buyer”) and Buyer’s wholly owned subsidiary, ExlService Cayman Merger Sub, completed the acquisition of SCIO pursuant to an Agreement of Merger dated April 28, 2018 (the "Merger Agreement"). ExlService Cayman Merger Sub, merged with and into SCIO, with SCIO surviving the merger as a wholly-owned subsidiary of the Buyer. SCIO is a health analytics solution and services company serving healthcare organizations including providers, health plans, pharmacy benefit managers, employers, health services and global life sciences companies. The acquisition is expected to significantly strengthen the Company’s capability in the high growth cost optimization and care optimization markets. The acquisition of SCIO is included in the Analytics reportable segment. The aggregate purchase consideration was $245,044, including cash and cash equivalents acquired and post-closing adjustments. The aggregate base purchase consideration payable at closing of the merger was $236,500 based on completion of diligence, which was adjusted based on, among other things, SCIO’s cash, debt, working capital position and other adjustments as of the Closing as set forth in the Merger Agreement. To finance the acquisition at Closing, the Company utilized its revolving Credit Facility in the amount of $233,000, issued 69,459 shares of restricted common stock of the Company in the amount of $4,080 and paid the balance with available cash on hand. Pursuant to the Company’s business combinations accounting policy, the total purchase consideration for SCIO was allocated to identifiable net tangible and intangible assets based upon their preliminary fair values. The excess of the purchase consideration over fair value of identifiable net tangible and intangible assets was recorded as goodwill. In order to allocate the consideration transferred for SCIO, the fair values of all identifiable assets and liabilities were established. For accounting and financial reporting purposes, fair value is defined under ASC No. 820, Fair Value Measurement and Disclosure, as the price that would be received upon sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. Use of different estimates and judgments could yield different results. The fair value of assets acquired and liabilities assumed from the acquisition of SCIO is based on a preliminary valuation. The primary areas of the purchase price that are not yet finalized are related to direct and indirect taxes, and, as such, the Company's estimates and assumptions are subject to change within the measurement period. The Company’s preliminary purchase price allocation to net tangible and intangible assets of SCIO is as follows:
The fair values of the trade names and trademarks intangible assets were determined by using an “income approach”, specifically the relief-from-royalty approach. The basic principle of the relief-from-royalty method is that without ownership of the subject intangible asset, the user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. By acquiring the intangible asset, the user avoids these payments. Therefore, a portion of SCIO’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to the firm’s ownership. The trade names and trademarks are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 3 years. The fair values of the developed technology intangible assets were also determined by the relief-from-royalty approach. Similarly, this approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of the technology. Therefore, a portion of SCIO’s earnings, equal to the after-tax royalty that would have been paid for the use of the technology, can be attributed to the firm’s ownership of the technology. The technology assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 5 years. The fair values of the customer relationships were determined by using an “income approach”, specifically the Multi-Period Excess Earnings Method ("MPEEM"). The MPEEM is a specific application of the discounted cash flow method. The principle behind the MPEEM is that the value of an intangible asset is equal to the present value of the incremental after-tax cash flows attributable only to the subject intangible asset after deducting Contributory Asset Charges ("CAC"). The principle behind a CAC is that an intangible asset ‘rents’ or ‘leases’ from a hypothetical third party all the assets it requires to produce the cash flows resulting from its development, that each project rents only those assets it needs (including elements of goodwill) and not the ones that it does not need, and that each project pays the owner of the assets a fair return on (and of, when appropriate) the value of the rented assets. The customer relationship assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 10 years. The goodwill recognized is attributable primarily to expected synergies from continuing operations of SCIO and the Company. The amount of goodwill recognized from SCIO's acquisition is not deductible for tax purposes. The goodwill has been assigned to our Analytics reportable segment based upon the Company’s assessment of nature of services rendered by SCIO. Acquisition-related costs Acquisition-related costs are being expensed as incurred and are included in general and administrative expenses in the unaudited consolidated statements of income. The Company recognized acquisition-related costs, which were incurred to effect business combination, for its SCIO and Health Integrated acquisitions of $nil and $363 during the three months ended March 31, 2019 and 2018, respectively. Goodwill The following table sets forth details of changes in goodwill by reportable segment of the Company:
During the fourth quarter of 2018, the Company performed its annual impairment test of goodwill for all its reporting units. Based on the results, the fair values of each of the Company’s reporting units exceeded their carrying values except for the Health Integrated reporting unit, within the Healthcare operating segment. The primary factors contributing to a reduction in the fair value of the Health Integrated reporting unit were: (i) revenues and profitability in 2018 were significantly lower than the Company’s budget; and (ii) significant changes to the Company's estimated future cash flows and long-term growth assumptions for the Health Integrated reporting unit driven by loss of customer contracts, cost pressures and the Company’s most recent views of the long-term outlook for the Health Integrated business. As a result of this analysis, the Company recognized a goodwill impairment charge of $14,229 during the fourth quarter to write down the carrying value of Health Integrated’s goodwill to its fair value of $nil as of December 31, 2018. This impairment loss was recorded in the consolidated statements of income under "impairment charges". As of March 31, 2019, the Company believes no other goodwill impairment exists, apart from the impairment charges discussed above, and that the remaining goodwill is recoverable for all of its reporting units; however, there can be no assurances that additional goodwill will not be impaired in future periods. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods. Intangible Assets Information regarding the Company’s intangible assets is set forth below:
The amortization expense for the period is as follows:
During the fourth quarter of 2018, the Company recognized impairment charges of $5,549 and $278 related to its customer relationships and trademarks intangible assets, respectively, in the Health Integrated reporting unit, within the Healthcare operating segment. The Company tested these intangible assets for recoverability due to indicators warranting the impairment test such as: (i) revenues and profitability in 2018 were significantly lower than the Company’s budget, and (ii) significant changes to the Company's estimated future cash flows and long-term growth assumptions for the Health Integrated reporting unit driven by loss of customer contracts, cost pressures and the Company’s most recent views of the long-term outlook for the Health Integrated business. Based on the results of its testing, the Company determined that the carrying value of the intangible assets was not recoverable, and an impairment charge was recorded to the extent that carrying value exceeded estimated fair value. This impairment charge was recorded in the consolidated statements of income under "impairment charges". Subsequent to the impairment test, Health Integrated reporting unit’s customer relationships and trademarks intangibles assets were reduced to $nil as of December 31, 2018. The remaining weighted average life of intangible assets is as follows:
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Investment in Equity Affiliate |
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Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Affiliate | Investment in Equity AffiliateOn December 12, 2017, the Company acquired preferred stock in Corridor Platform Inc. (“Corridor”), a big data credit risk management platform for $3,000. The Company has determined that based on its ownership interest and other rights, Corridor is an equity method affiliate. The Company has the right and option to acquire additional preferred stock from Corridor as per the terms of the agreement. The Company's proportionate share of net loss for the three months ended March 31, 2019 and 2018 was $67 and $56, respectively. |
Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Assets | Other Current Assets Other current assets consist of the following:
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Other Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets Other assets consist of the following:
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Accrued Expenses and Other Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following:
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Other Non-Current Liabilities |
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Liabilities, Noncurrent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Non-Current Liabilities | Other Non-Current Liabilities Other non-current liabilities consist of the following:
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consists of amortization of actuarial gain/(loss) on retirement benefits and changes in the cumulative foreign currency translation adjustments. In addition, the Company enters into foreign currency exchange contracts, which are designated as cash flow hedges in accordance with ASC topic 815. Changes in the fair values of forward contracts are recognized in accumulated other comprehensive loss on the Company's unaudited consolidated balance sheet until the settlement of those contracts. The balances as of March 31, 2019 and December 31, 2018 are as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value The following table sets forth the Company’s assets and liabilities that were accounted for at fair value as of March 31, 2019 and December 31, 2018.
* Represents short-term investments carried on fair value option under ASC 825 “Financial Instruments” as of March 31, 2019 and December 31, 2018. Derivative Financial Instruments: The Company’s derivative financial instruments consist of foreign currency forward exchange contracts. Fair values for derivative financial instruments are based on independent sources including highly rated financial institutions and are classified as Level 2. Refer Note 17 to the unaudited consolidated financial statements for further details. Financial instruments not carried at fair value: The Company’s other financial instruments not carried at fair value consist primarily of accounts receivable, accounts payable and accrued expenses for which fair values approximate their carrying amounts due to their short-term nature. Convertible Senior Notes: The total estimated fair value of the convertible senior notes as of March 31, 2019 and December 31, 2018 was $137,374 and $130,510, respectively. The fair value was determined based on the market yields for similar Notes as of the March 31, 2019 and December 31, 2018. The Company considers the fair value of the Notes to be a Level 2 measurement due to the limited inputs available for its fair valuation.
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Derivatives and Hedge Accounting |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedge Accounting | Derivatives and Hedge Accounting The Company uses derivative instruments and hedging transactions to mitigate exposure to foreign currency fluctuation risks associated with forecasted transactions denominated in certain foreign currencies and to minimize earnings and cash flow volatility associated with changes in foreign currency exchange rates. The Company’s derivative financial instruments are largely forward foreign exchange contracts that are designated as effective hedges and that qualify as cash flow hedges under ASC 815. The Company had outstanding cash flow hedges totaling $410,189 (including $6,250 of range forward contracts) as of March 31, 2019 and $362,435 (including $6,900 of range forward contracts) as of December 31, 2018. Changes in the fair value of these cash flow hedges are recorded as a component of accumulated other comprehensive income/(loss), net of tax, until the hedged transactions occurs. The resultant foreign exchange gain/(loss) are recorded along with the underlying hedged item in the same line of unaudited consolidated statements of income as either part of “Cost of revenues”, “General and administrative expenses”, “Selling and marketing expenses”, “Depreciation and amortization”, as applicable. The Company also enters into foreign currency forward contracts to economically hedge its intercompany balances and other monetary assets and liabilities denominated in currencies other than functional currencies. These derivatives do not qualify as fair value hedges under ASC 815. Changes in the fair value of these derivatives are recognized in the unaudited consolidated statements of income and are included in foreign exchange gain/(loss). The Company’s primary exchange rate exposure is with the Indian Rupee, the U.K. pound sterling and the Philippine peso. The Company also has exposure to Colombian pesos, Czech Koruna, the Euro, South African ZAR and other local currencies in which it operates. Outstanding foreign currency forward contracts amounted to $100,204 and GBP 12,767 as of March 31, 2019 and amounted to $125,503, GBP 15,616 and EUR 512 as of December 31, 2018. The Company estimates that approximately $2,467 of net derivative gains, excluding tax effects, included in accumulated other comprehensive loss representing changes in the value of cash flow hedges, could be reclassified into earnings within the next twelve months based on exchange rates prevailing as of March 31, 2019. At March 31, 2019, the maximum outstanding term of the cash flow hedges was 45 months. The Company evaluates hedge effectiveness at the time a contract is entered into as well as on an ongoing basis. For hedging positions that are discontinued because the forecasted transaction is not expected to occur by the end of the originally specified period, any related amounts recorded in equity are reclassified to earnings. The following tables set forth the fair value of the foreign currency exchange contracts and their location on the unaudited consolidated financial statements:
The following tables set forth the effect of foreign currency exchange contracts on the unaudited consolidated statements of income and accumulated other comprehensive loss for the three months ended March 31, 2019 and 2018:
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings Revolver Credit Agreement On November 21, 2017, the Company and each of the Company’s wholly owned material domestic subsidiaries entered into a Credit Agreement with certain lenders, and Citibank, N.A. as Administrative Agent (the “Credit Agreement”). The Credit Agreement provides for a $200,000 revolving credit facility (the “Credit Facility”) with an option to increase the commitments by up to $100,000, subject to certain approvals and conditions as set forth in the Credit Agreement. The Credit Agreement also includes a letter of credit sub facility. The Credit Facility has a maturity date of November 21, 2022 and is voluntarily pre-payable from time to time without premium or penalty. Borrowings under the Credit Agreement may be used for working capital and general corporate purposes, including permitted acquisitions. On July 2, 2018, the Company exercised its option under the Credit Agreement to increase the commitments by $100,000 thereby utilizing the entire revolver under the Credit Facility of $300,000, to fund SCIO acquisition. The incremental commitments were made pursuant to (and constitute part of) the existing commitments and shall be subject to the terms and conditions applicable to the existing commitments as set forth in the Credit Agreement. Depending on the type of borrowing, loans under the Credit Agreement bear interest at a rate equal to the specified prime rate (alternate base rate) or adjusted LIBO rate, plus, in each case, an applicable margin. The applicable margin is tied to the Company’s total net leverage ratio and ranges from 0% to 0.75% per annum with respect to loans pegged to the specified prime rate, and 1.00% to 1.75% per annum on loans pegged to the adjusted LIBO rate. The revolving credit commitments under the Credit Agreement are subject to a commitment fee, which is also tied to the Company’s total net leverage ratio, and ranges from 0.15% to 0.30% per annum on the average daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving loans and letter of credit obligations. The Credit Facility carried an effective interest rate of 3.9% and 3.3% per annum during the three months ended March 31, 2019 and 2018. Obligations under the Credit Agreement are guaranteed by the Company’s material domestic subsidiaries and are secured by all or substantially all of the assets of the Company and our material domestic subsidiaries. The Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on the ability to incur indebtedness, create liens, make certain investments, make certain dividends and related distributions, enter into, or undertake, certain liquidations, mergers, consolidations or acquisitions and dispose of assets or subsidiaries. In addition, the Credit Agreement contains a covenant to not permit the interest coverage ratio (the ratio of EBITDA to cash interest expense) or the total net leverage ratio (total funded indebtedness, less unrestricted domestic cash and cash equivalents not to exceed $50,000 to EBITDA) for the four consecutive quarter period ending on the last day of each fiscal quarter, to be less than 3.5 to 1.0 or more than 3.0 to 1.0, respectively. As of March 31, 2019, the Company was in compliance with all financial and non-financial covenants listed under the Credit Agreement. The Company entered into a second amendment (the “Amendment”) to its Credit Agreement, as amended, among the Company, as borrower, with certain lenders, and Citibank, N.A. as Administrative Agent to, among other things, permit the issuance by the Company of the convertible notes, and settlement upon maturity or conversion thereof, in accordance with the Investment Agreement, the indenture dated as of October 4, 2018 and the other documents entered into in connection therewith. As of March 31, 2019, the Company had outstanding indebtedness under the credit facility of $186,000, of which $20,000 is expected to be repaid within the next twelve months and is included under “current portion of long-term borrowings” and of which $166,000 is included under “long-term borrowings” in the unaudited consolidated balance sheets. As of December 31, 2018, the Company had an outstanding indebtedness under the credit facility of $150,000, of which $20,000 was included under “current portion of long-term borrowings,” and the balance of $130,000 was included under “long-term borrowings” in the consolidated balance sheets. The Company incurred certain debt issuance costs, which are deferred and amortized as an adjustment to interest expense over the term of the credit facility. The unamortized debt issuance costs as of March 31, 2019 and December 31, 2018 was $942 and $1,006, respectively, and is included under "other current assets" and “other assets” in the unaudited consolidated balance sheets. Convertible Senior Notes On October 1, 2018, the Company entered into an investment agreement (the “Investment Agreement”) with Orogen Echo LLC (the “Purchaser”), an affiliate of The Orogen Group LLC, relating to the issuance to the Purchaser of $150,000 in an aggregate principal amount of 3.50% Convertible Senior Notes due October 1, 2024 (the “Notes”). The transactions contemplated by the Investment Agreement, including the issuance of the Notes, closed on October 4, 2018. The Notes bear interest at a rate of 3.50% per annum, payable semi-annually in arrears in cash on April 1 and October 1 of each year. During the three months ended March 31, 2019, the Company recognized interest expense of $1,313. The Notes are convertible at an initial conversion rate of 13.3333 shares of the common stock per $1,000 principal amount of the Notes (which represents an initial conversion price of approximately $75 per share). With certain exceptions, upon a fundamental change, as defined in the Indenture, the holders of the Notes may require that the Company to repurchase all or part of the principal amount of the Notes at a purchase price equal to the principal amount plus accrued and unpaid interest. The Company may redeem the principal amount of the Notes, at its option, in whole but not in part, at a purchase price equal to the principal amount plus accrued and unpaid interest on or after October 1, 2021, if the closing sale price of the common stock exceeds 150% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading day period preceding the Company’s exercise of this redemption right (including the trading day immediately prior to the date of the notice of redemption).The Company may elect to settle conversions of the Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock. The Company used the proceeds from the issuance of Notes to repay $150,000 of its outstanding borrowings under the Credit Facility. The net proceeds from the issuance of Notes were approximately $149,000, after deducting debt issuance costs of $1,000 and offering expenses of approximately $442 paid by the Company. These transaction and debt issuance costs were allocated between the liability and equity components based on their relative values. The transaction costs and debt issuance costs allocated to the liability and equity components were $1,279 and $163 respectively. The debt issuance costs allocated to the liability component are deferred and amortized as an adjustment to interest expense over the term of the Notes. The unamortized debt issuance costs is presented as a direct reduction from the Notes in the unaudited consolidated balance sheets. The unamortized debt issuance costs as of March 31, 2019 and December 31, 2018 was $1,178 and $1,127, respectively. The Company accounted for the liability and equity components of the Notes separately to reflect its non-convertible debt borrowing rate. The estimated fair value of the liability component at issuance of $133,077 was determined using a discounted cash flow technique, which considered debt issuances with similar features of the Company’s debt, excluding the conversion feature. The resulting effective interest rate for the Notes was 5.75% per annum. The excess of the gross proceeds received over the estimated fair value of the liability component totaling $16,923 was allocated to the conversion feature (equity component, recorded as additional paid-in capital) with a corresponding offset recognized as a discount to reduce the net carrying value of the Notes. The discount is being amortized to interest expense over a six-year period ending October 1, 2024 (the expected life of the liability component) using the effective interest method. During the three months ended March 31, 2019, the Company amortized $600 of the discount to interest expense. At the time of issuance, the Company evaluated the Notes in accordance with ASC 815-15 and determined that the Notes contain a single embedded derivative, being the call option having market interest rates as underlying, which does not require bifurcation as the features clearly and closely related to the host instrument. The Company determined that the value of this embedded derivative was nominal as of the date of issuance. Borrowings also includes structured payables which are in the nature of debt, amounting to $1,542 and $2,114 as of March 31, 2019 and December 31, 2018, respectively, of which $876 and $1,423 is included under "current portion of long-term borrowings", $666 and $691, respectively, under "long-term borrowings" in the unaudited consolidated balance sheets. Future principal payments/maturities for all of the Company's borrowings as of March 31, 2019 were as follows:
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Capital Structure |
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Equity [Abstract] | |
Capital Structure | Capital Structure Common Stock The Company has one class of common stock outstanding. During the three months ended March 31, 2019 and 2018, the Company acquired 22,666 and 41,811 shares of common stock, respectively, from employees in connection with withholding tax payments related to the vesting of restricted stock for a total consideration of $1,408 and $2,565, respectively. The weighted average purchase price per share of $62.11 and $61.34, respectively, was the average of the high and low price of the Company's share of common stock on the Nasdaq Global Select Market on the trading day prior to the vesting date of the shares of restricted stock. On December 30, 2014, the Company’s Board of Directors authorized a common stock repurchase program (the “2014 Repurchase Program”), under which shares were authorized to be purchased by the Company from time to time from the open market and through private transactions during each of the fiscal years 2017 through 2019 up to an annual amount of $20,000. On February 28, 2017, the Company’s Board of Directors authorized an additional common stock repurchase program (the “2017 Repurchase Program”), under which shares may be purchased by the Company from time to time from the open market and through private transactions during each of the fiscal years 2017 through 2019 up to an aggregate additional amount of $100,000. The approval increased the 2017 authorization from $20,000 to $40,000 and authorizes stock repurchases of up to $40,000 in each of 2018 and 2019. During the three months ended March 31, 2019, the Company purchased 239,865 shares of its common stock, for an aggregate purchase price of approximately $14,000, including commissions, representing an average purchase price per share of $58.37 under the 2017 Repurchase Program. During the three months ended March 31, 2018, the Company purchased 182,182 shares of its common stock, for an aggregate purchase price of approximately $10,939, including commissions, representing an average purchase price per share of $60.05 under the 2017 Repurchase Programs. Repurchased shares have been recorded as treasury shares and will be held until the Board of Directors designates that these shares be retired or used for other purposes.
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Employee Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans The Company’s Gratuity Plans in India ("Gratuity Plan") provide for lump sum payment to vested employees on retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities with regard to the Gratuity Plans are determined by actuarial valuation using the projected unit credit method. Current service costs for the Gratuity Plan are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans are recognized and amortized over the remaining period of service of the employees. In addition, the Company’s subsidiary operating in the Philippines conforms to the minimum regulatory benefit which provide for lump sum payment to vested employees on retirement from employment in an amount based on the respective employee’s salary and years of employment with the Company (the "Philippines Plan"). The benefit costs of the Philippines Plan for the year are calculated on an actuarial basis. Components of net periodic benefit cost:
The Gratuity Plan in India is partially funded and the Philippines plan is unfunded. The Company makes annual contributions to the employees' gratuity fund established with Life Insurance Corporation of India and HDFC Standard Life Insurance Company. They calculate the annual contribution required to be made by the Company and manage the Gratuity Plans, including any required payouts. Fund managers manage these funds on a cash accumulation basis and declare interest retrospectively on March 31 of each year. The Company earned a return of approximately 7.8% per annum on these Gratuity Plans for the three months ended March 31, 2019.
*Benefit payments were substantially made through the plan assets during the three months ended March 31, 2019. The Company maintains several 401(k) plans (the "401(k) Plans") under Section 401(k) of the Internal Revenue Code of 1986 (the “Code”), covering all eligible employees, as defined in the Code as a defined contribution plan. The Company may make discretionary contributions of up to a maximum of 4% of employee compensation within certain limits. The Company accrued for contributions to the 401(k) Plans of $1,213 and $1,230 for the three months ended March 31, 2019 and 2018, respectively. During the three months ended March 31, 2019 and 2018, the Company contributed $2,004 and $1,914, respectively, for various defined contribution plans on behalf of its employees in India, the Philippines, Bulgaria, Romania, the Czech Republic, South Africa, Colombia, and Singapore.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company finances its use of certain motor vehicles and other equipment under various lease arrangements provided by financial institutions. The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates. The Company has performed an evaluation of its contracts with suppliers in accordance with Topic 842 and has determined that, except for leases for office facilities, motor vehicles and other equipments as described above, none of the Company’s contracts contain a lease. Supplemental balance sheet information
The components of lease cost, which are included in the Company's unaudited consolidated statements of income, are as follows:
Operating lease cost for leases classified as such under Topic 840 for the three months ended March 31, 2018 was $6,422. (a) Includes short-term leases, which are immaterial. Supplemental cash flow and other information related to leases are as follows:
The Company determines the incremental borrowing rate by adjusting the benchmark reference rates, applicable to the respective geographies where the leases were entered, with appropriate financing spreads and lease specific adjustments for the effects of collateral. Maturities of lease liabilities as of March 31, 2019 are as follows:
Maturities of minimum lease payments as of December 31, 2018 are as follows:
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Leases | Leases The Company finances its use of certain motor vehicles and other equipment under various lease arrangements provided by financial institutions. The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates. The Company has performed an evaluation of its contracts with suppliers in accordance with Topic 842 and has determined that, except for leases for office facilities, motor vehicles and other equipments as described above, none of the Company’s contracts contain a lease. Supplemental balance sheet information
The components of lease cost, which are included in the Company's unaudited consolidated statements of income, are as follows:
Operating lease cost for leases classified as such under Topic 840 for the three months ended March 31, 2018 was $6,422. (a) Includes short-term leases, which are immaterial. Supplemental cash flow and other information related to leases are as follows:
The Company determines the incremental borrowing rate by adjusting the benchmark reference rates, applicable to the respective geographies where the leases were entered, with appropriate financing spreads and lease specific adjustments for the effects of collateral. Maturities of lease liabilities as of March 31, 2019 are as follows:
Maturities of minimum lease payments as of December 31, 2018 are as follows:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company determines the 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 annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment. The Company recorded income tax expense (benefit) of $4,200 and $(4,453) for the three months ended March 31, 2019 and 2018, respectively. The effective tax rate increased from (23.7)% during the three months ended March 31, 2018 to 22.1% during the three months ended March 31, 2019 primarily as a result of (i) an adjustment of $4,836 reducing the provisional transition tax on the mandatory deemed repatriation of accumulated earnings and profits ("E&P") of foreign subsidiaries recognized during the three months ended March 31, 2018, and (ii) the recording of excess tax benefits related to stock awards of $4,827 pursuant to ASU No. 2016-09 during the three months ended March 31, 2018 compared to $1,015 during the three months ended March 31, 2019.
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Stock Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation | Stock-Based Compensation The following costs related to the Company’s stock-based compensation plans are included in the unaudited consolidated statements of income:
As of March 31, 2019, the Company had 2,671,960 shares available for grant under the 2018 Omnibus Incentive Plan. Stock Options Stock option activity under the Company’s stock-based compensation plans is shown below:
The unrecognized compensation cost for unvested options as of March 31, 2019 was $nil. Restricted Stock and Restricted Stock Units Restricted stock and restricted stock unit activity under the Company’s stock-based compensation plans is shown below:
* As of March 31, 2019 and December 31, 2018 restricted stock units vested for which the underlying common stock is yet to be issued are 155,753 and 155,753, respectively. As of March 31, 2019, unrecognized compensation cost of $58,948 is expected to be expensed over a weighted average period of 3.11 years. Performance Based Stock Awards Performance based restricted stock unit (the “PRSUs”) activity under the Company’s stock-based compensation plans is shown below:
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Exit Cost |
3 Months Ended |
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Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Exit Cost | Exit Costs |
Related Party Disclosures |
3 Months Ended |
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Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Disclosures | Related Party Disclosures The Company provides consulting services to PharmaCord, LLC. One of the Company’s directors, Nitin Sahney, is the member-manager and chief executive officer of PharmaCord, LLC. The Company recognized revenue of $nil and $199 in the three months ended March 31, 2019 and 2018, respectively, for services provided. As of March 31, 2019 and December 31, 2018, the Company had accounts receivable of $nil and $5, respectively, related to these services. On October 1, 2018, the Company entered into the Investment Agreement with the Purchaser relating to the issuance to the Purchaser of $150,000 aggregate principal amount of the Notes. In connection with the investment, Vikram S. Pandit, Chairman and CEO of The Orogen Group LLC (an affiliate of the Purchaser), was appointed to Company’s Board of Directors. During the quarter ended March 31, 2019, the Company reimbursed $35 to The Orogen Group LLC in connection with legal costs. The Company had outstanding Notes with a principle amount of $150,000 as of March 31, 2019 and December 31, 2018 and interest accrued of $2,625 and $1,313 as of March 31, 2019 and December 31, 2018, respectively, related to the Investment Agreement. Refer Note 18 to the unaudited consolidated financial statements for details.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Fixed Asset Commitments At March 31, 2019, the Company has committed to spend approximately $9,552 under agreements to purchase property and equipment. This amount is net of capital advances paid in respect of these purchases. Other Commitments Certain units of the Company’s Indian subsidiaries were established as 100% Export-Oriented units or under the Software Technology Parks of India (“STPI”) scheme promulgated by the Government of India. These units are exempt from customs, central excise duties, and levies on imported and indigenous capital goods, stores, and spares. The Company has undertaken to pay custom duties, service taxes, levies, and liquidated damages payable, if any, in respect of imported and indigenous capital goods, stores and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. The Company’s management believes, however, that these units have in the past satisfied and will continue to satisfy the required conditions. The Company’s operations centers in the Philippines are registered with the Philippine Economic Zone Authority (“PEZA”). The registration provides the Company with certain fiscal incentives on the import of capital goods and requires ExlService Philippines, Inc. to meet certain performance and investment criteria. The Company’s management believes that these centers have in the past satisfied and will continue to satisfy the required criteria. In March 2017, the Company was named as a defendant in a putative class action lawsuit filed in California, which challenged the classification of independent contractors. The parties participated in a mediation in early 2018. As the result of the mediation, a settlement was reached pursuant to which the Company agreed, without admission of wrongdoing, to pay a total of $2,400, of which $1,200 was paid in 2018 and the remainder has been paid during the three months ended March 31, 2019. Contingencies U.S. and Indian transfer pricing regulations require that any international transaction involving associated enterprises be at an arm’s-length price. Accordingly, the Company determines the appropriate pricing for the international transactions among its associated enterprises on the basis of a detailed functional and economic analysis involving benchmarking against transactions among entities that are not under common control. The tax authorities have jurisdiction to review this arrangement and in the event that they determine that the transfer price applied was not appropriate, the Company may incur increased tax liability, including accrued interest and penalties. The Company is currently involved in disputes with the Indian tax authorities over the application of some of its transfer pricing policies for some of its subsidiaries. Further, the Company and a U.S. subsidiary are engaged in tax litigation with the income-tax authorities in India on the issue of permanent establishment. The Company is subject to taxation in the United States and various states and foreign jurisdictions. For the U.S. and India, tax year 2015 and subsequent tax years remain open for examination by the tax authorities as of March 31, 2019. The aggregate amount demanded by Income tax authorities (net of advance payments, if any) from the Company related to its transfer pricing issues for tax years 2003 to 2014 and its permanent establishment issues for tax years 2003 to 2007 as of March 31, 2019 and December 31, 2018 is $17,863 and $18,177, respectively, of which the Company has made payments or provided bank guarantee to the extent $8,244 and $8,171, respectively. Amounts paid as deposits in respect of such assessments aggregating to $6,328 and $6,273 as of March 31, 2019 and December 31, 2018, respectively, are included in “Other assets” and amounts deposited for bank guarantees aggregating to $1,916 and $1,899 as of March 31, 2019 and December 31, 2018, respectively, are included in “Restricted cash” in the non-current assets section of the Company’s unaudited consolidated balance sheets. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended | ||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Basis of Preparation | The unaudited consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“US GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.The unaudited consolidated financial statements reflect all adjustments (of a normal and recurring nature) that management considers necessary for a fair presentation of such statements for the interim periods presented. The unaudited consolidated statements of income for the interim periods presented are not necessarily indicative of the results for the full year or for any subsequent period. | ||||||||||||||||
Principles of Consolidation | The accompanying unaudited consolidated financial statements include the financial statements of ExlService Holdings and all of its subsidiaries. The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and income and expenses arising from intra-group transactions, are eliminated while preparing those financial statements. Accounting policies of the respective individual subsidiary and associate are aligned, wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under US GAAP. The Company’s investments in equity affiliates are initially recorded at cost and any excess cost over proportionate share of the fair value of the net assets of the investee at the acquisition date is recognized as goodwill. The proportionate share of net income or loss of the investee is recognized in the unaudited consolidated statements of income. Non-controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to the parent and it represents the minority partner’s interest in the operations of ExlService Colombia S.A.S. Non-controlling interest consists of the amount of such interest at the date of obtaining control over the subsidiary, and the non-controlling interest's share of changes in equity since that date. The non-controlling interest in the operations for all periods presented were insignificant and is included under general and administrative expenses in the unaudited consolidated statements of income.
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Use of Estimates | The preparation of the unaudited consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the unaudited consolidated statements of income during the reporting period. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates and assumptions that affect the financial statements include, but are not limited to, allowance for doubtful receivables, expected recoverability from customers with contingent fee arrangements, recoverability of dues from statutory authorities, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments, assumptions used to calculate stock-based compensation expense, assumptions used to determine incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, lease term to calculate lease cost, depreciation and amortization periods, purchase price allocation, recoverability of long-lived assets including goodwill and intangibles, and estimated costs to complete fixed price contracts. | ||||||||||||||||
Employee Benefits | Contributions to defined contribution plans are charged to the unaudited consolidated statements of income in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are accrued in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. Prior service cost, if any, resulting from an amendment to a plan is recognized and amortized over the remaining period of service of the covered employees. The Company recognizes its liabilities for compensated absences depending on whether the obligation is attributable to employee services already rendered, relates to rights that vest or accumulate and payment is probable and estimable. The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period. The interest cost, expected return on plan assets and amortization of actuarial gains/loss are classified in “Other income, net”. Refer Note 20 to the unaudited consolidated financial statements for details.
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Cash and Cash Equivalents and Restricted Cash | The Company considers all highly liquid investments purchased with an original maturity of ninety days or less to be cash equivalents. Pursuant to the Company’s investment policy, surplus funds are invested in highly-rated debt mutual funds, money market accounts and time deposits to reduce its exposure to market risk with regard to these funds. Restricted cash represents amounts on deposit with banks against bank guarantees issued through banks in favor of relevant statutory authorities for equipment imports, deposits for obtaining indirect tax registrations and for demands against pending income tax assessments (refer Note 26 to the unaudited consolidated financial statements for details). These deposits with banks have maturity dates after March 31, 2020. Restricted cash presented under current assets represents funds held on behalf of clients in dedicated bank accounts. For purposes of the unaudited statements of cash flows, the Company includes in its cash and cash-equivalent balances those amounts that have been classified as restricted cash and restricted cash equivalents.
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Revenue Recognition | Revenue is recognized when services are provided to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for our services. Revenue is measured based on consideration specified in a contract with a customer and excludes discounts and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by providing services to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Adoption of ASU 2014-09 Topic 606, “Revenue from Contracts with Customers” (Topic 606) On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method and applied its guidance to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The effect from the adoption of Topic 606 was not material to the Company's financial statements. Nature of services The Company derives its revenues from operations management and analytics services. The Company operates in the business process management (“BPM”) industry providing operations management and analytics services helping businesses enhance revenue growth and improve profitability. The Company provides BPM or “operations management” services, which typically involve transfer to the Company of business operations of a client, after which it administers and manages those operations for its client on an ongoing basis. The Company also provides industry-specific digital transformational services related to operations management services, and analytics services that focus on driving improved business outcomes for clients by generating data-driven insights across all parts of their business. The Company also provides care optimization and reimbursement optimization services, for its clients through its healthcare analytics solutions and services. The Company offers integrated solutions to help its clients with cost containment by leveraging technology platforms, customizable and configurable analytics and expertise in healthcare reimbursements to help clients enhance their claims payment accuracy. Type of Contracts
b) In respect of arrangements involving subcontracting, in part or whole of the assigned work, the Company evaluates whether it is in control of the services before the same are transferred to the customer to assess whether it is Principal or Agent in the arrangement based on guidance on “Principal versus agent considerations” in Topic 606.
Arrangements with Multiple Performance Obligations The Company’s contracts with customers do not generally bundle different services together except for software and related services contracts, which are not significant, involving implementation services and post contract maintenance services. In such software and related services contracts, revenue is allocated to each performance obligation based on the relative standalone selling price. A separate contract is generally drafted for each type of service sold, even if to the same customer. The typical length of a contract is 3 to 5 years for our operations management contracts. Allocation of transaction price to performance obligations The transaction price is allocated to performance obligations on a relative standalone selling price basis. Standalone selling prices are estimated by reference to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the contract. In assessing whether to allocate variable consideration to a specific part of the contract, the Company considers the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Variable Consideration Variability in the transaction price arises primarily due to service level agreements, cost of living adjustments, and pre-payment and volume discounts. The Company considers its experience with similar transactions and expectations regarding the contract in estimating the amount of variable consideration that should be recognized during a period. The Company believes that the expected value method is most appropriate for determining the variable consideration since the company has large number of contracts with similar nature of transactions/services. Unbilled Receivables Unbilled receivables represents revenues recognized for services rendered between the last billing date and the balance sheet date. Unbilled receivables also include revenues recognized from reimbursement optimization services when the Company identifies an overpayment claim and the same is acknowledged by its customers, however not invoiced at the balance sheet date. Accordingly, amounts for services that the Company has performed and for which an invoice has not yet been issued to the customers are presented as a part of contract assets as accounts receivable. Deferred Revenue The Company has deferred revenue attributable to certain process transition activities, with respect to its customers where such activities do not represent separate performance obligations. Revenues related to such transition activities are contract liabilities classified under “Deferred Revenue” in the Company's unaudited consolidated balance sheets and subsequently recognized ratably over the period in which the related services are performed. Deferred revenue also includes the amount for which services have been rendered but other conditions of revenue recognition are not met, for example where the Company does not have persuasive evidence of an arrangement with customer. Costs related to such transition activities are contract fulfillment costs, and thereby classified under “Other Current Assets” and “Other Assets” in the unaudited consolidated balance sheets, and are recognized ratably over the estimated expected period of benefit, under Cost of Revenues in the unaudited consolidated statements of income. Other incremental and direct costs incurred for acquiring contracts, such as sales commissions are contract acquisition costs and thereby classified under “Other Current Assets” and “Other Assets” in the unaudited consolidated balance sheets. Such costs are amortized over the expected period of benefit and recorded under Selling and marketing expenses in the unaudited consolidated statements of income. Any upfront payments made to customers are contract assets and classified under “Other Current Assets and Other Assets” in the unaudited consolidated balance sheets. Such costs are amortized over the expected period of benefit and are recorded as an adjustment to transaction price and reduced from revenues. Reimbursements of out-of-pocket expenses received from clients are included as part of revenues. Payment terms All Contracts entered into by the Company specify the payment terms and are defined for each contract separately. Usual payment terms range between 30-60 days. The Company does not have any extended payment terms clauses in existing contracts. At times, the Company enters into fixed price contracts and software licenses involving significant implementation wherein the milestones are defined such that the Company can recover the costs with a reasonable margin. Practical expedients and exemptions The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of 1 year or less and (ii) contracts for which the Company recognizes revenue at the amount to which we have the right to invoice for services performed.
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Accounts Receivable | We record accounts receivable net of allowances for doubtful accounts. Allowances for doubtful accounts are established through the evaluation of aging of accounts receivables, prior collection experience, current market conditions, clients’ financial condition and the amount of accounts receivables in dispute to estimate the collectability of these accounts receivables. |
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Leases | The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, current portion of operating lease liabilities and operating lease liabilities, less current portion in the Company's unaudited consolidated balance sheets. Finance leases are included in property and equipment, current portion of finance lease obligations and finance lease obligations, less current portion in the Company's unaudited consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for separately. On January 1, 2019, the date of initial application, the Company adopted, Leases (Topic 842), using the modified retrospective method. The modified retrospective method provides a method of recording those leases which had not expired as of the date of adoption of January 1, 2019. The prior period unaudited consolidated financial statements have not been retrospectively adjusted and continues to be reported under Topic 840. The Company elected the practical expedient permitted under the transition guidance under Topic 842, which amongst other matters, allowed the Company (i) not to apply the recognition requirements to short-term leases (leases with a lease term of 12 months or less), (ii) not to reassess whether any expired or existing contracts are or contain leases, (iii) not to reassess the lease classification for any expired or existing leases, and (iv) not to reassess initial direct costs for any existing leases. The adoption resulted in the recognition of ROU assets of $80,328, net of deferred rent of $8,626 and lease liabilities of $88,954 for operating leases as of January 1, 2019. The Company's accounting for finance leases remained substantially unchanged. The adoption had no impact on opening balance of retained earnings. |
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Recent Accounting Pronouncements and Recently Adopted Accounting Pronouncements | In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-13, Financial Instruments - Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is to be deducted from the amortized cost of the financial asset(s) so as to present the net carrying value at the amount expected to be collected on the financial asset. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment should be applied through a modified retrospective approach. Early adoption as of the fiscal years beginning after December 15, 2018 is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In June 2018, FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting. This ASU involves several aspects of the accounting for non-employee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees. The amendments in this ASU affect all entities that enter into share-based payment transactions for acquiring goods and services from non-employees. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The adoption of this ASU is not expected to have any material effect on the Company’s consolidated financial statements. In August 2018, FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic 820, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments in ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The adoption of this ASU is not expected to have any material effect on the Company’s consolidated financial statements. In August 2018, FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this Update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in ASU are effective for fiscal years beginning after December 15, 2020. An entity is permitted to early adopt this Update. The adoption of this ASU is not expected to have any material effect on the Company’s consolidated financial statements. In August 2018, FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the ASU requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in FASB Accounting Standard Codification Subtopic 350-40 on internal-use software to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The ASU 2018-15 also provides guidance on amortization and impairment of any costs capitalized, along with new presentation and disclosure requirements. The new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and both prospective and retrospective transition methods are allowed. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. (h) Recently Adopted Accounting Pronouncements In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), which requires the identification of arrangements that should be accounted for as leases. Lease arrangements exceeding a twelve months term should be recognized as assets with corresponding liabilities on the balance sheet of the lessee. This ASU requires recognition of an ROU asset and lease obligation for those leases classified as operating leases under Topic 840, while the income statement will reflect lease expense for operating leases. The balance sheet amounts recorded for existing operating leases at the date of adoption of this ASU must be calculated using the applicable incremental borrowing rate. The Company adopted Topic 842 as of January 1, 2019 using the modified retrospective method provided by ASU 2018-11. The adoption had a material impact on the Company's unaudited consolidated balance sheets, but did not have a material impact on the Company's unaudited consolidated income statements and unaudited consolidated statements of cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the Company's accounting for finance leases remained substantially unchanged. Refer Note 21 to the unaudited consolidated financial statements for details. In July 2018, FASB issued ASU No. 2018-11, Leases (Topic 842), which provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). The Company adopted Topic 842 as of January 1, 2019 using this ASU. Refer Note 21 to the unaudited consolidated financial statements for details.
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Segment and Geographical Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues and Cost of Revenues for Company's Reportable Segments | Revenues and cost of revenues for the three months ended March 31, 2019 and 2018, respectively, for each of the reportable segments, are as follows:
(1) Exclusive of depreciation and amortization. Revenues, net by service type, were as follows:
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Revenues Based on Geographical Information | The Company attributes the revenues to regions based upon the location of its customers.
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Property, Plant and Equipment based on Geographical Information | Property and equipment, net by geographic area, were as follows:
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Revenues, net (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contracts with Customer, Receivables and Liabilities | The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share:
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Cash, Cash Equivalents and Restricted Cash (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | For the purpose of unaudited statements of cash flows, cash, cash equivalents and restricted cash comprise of the following:
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Restrictions on Cash and Cash Equivalents | For the purpose of unaudited statements of cash flows, cash, cash equivalents and restricted cash comprise of the following:
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Other Income, net (Tables) |
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Summary of Other Income, net | Other income, net consists of the following:
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Property and Equipment, net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | The depreciation and amortization expense, excluding amortization of acquisition-related intangibles, recognized in the unaudited consolidated statements of income was as follows:
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Business Combinations, Goodwill and Intangible Assets (Tables) |
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Business Combination, Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allocation of purchase price to assets acquired and liabilities assumed | The Company’s preliminary purchase price allocation to net tangible and intangible assets of SCIO is as follows:
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Schedule of Goodwill | The following table sets forth details of changes in goodwill by reportable segment of the Company:
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Schedule of indefinite lived Intangible Assets | Information regarding the Company’s intangible assets is set forth below:
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Schedule of amortization of Intangible Assets | The amortization expense for the period is as follows:
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Schedule of finite lived Intangible Assets useful lives | The remaining weighted average life of intangible assets is as follows:
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Schedule of estimated future amortization of Intangible Assets |
|
Other Current Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets | Other current assets consist of the following:
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Other Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets consist of the following:
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Accrued Expenses and Other Current Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following:
|
Other Non-Current Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities, Noncurrent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Non-Current Liabilities | Other non-current liabilities consist of the following:
|
Accumulated Other Comprehensive Loss (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The balances as of March 31, 2019 and December 31, 2018 are as follows:
|
Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value | The following table sets forth the Company’s assets and liabilities that were accounted for at fair value as of March 31, 2019 and December 31, 2018.
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Derivatives and Hedge Accounting (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Foreign Currency Exchange Contracts | The following tables set forth the fair value of the foreign currency exchange contracts and their location on the unaudited consolidated financial statements:
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Summary of Effect of Foreign Currency Exchange Contracts on Consolidated Statements of Income | The following tables set forth the effect of foreign currency exchange contracts on the unaudited consolidated statements of income and accumulated other comprehensive loss for the three months ended March 31, 2019 and 2018:
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Borrowings Borrowings (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | Future principal payments/maturities for all of the Company's borrowings as of March 31, 2019 were as follows:
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Employee Benefit Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | Components of net periodic benefit cost:
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Change in Plan Assets |
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental balance sheet information | Supplemental balance sheet information
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Schedule of components of lease cost | The components of lease cost, which are included in the Company's unaudited consolidated statements of income, are as follows:
Operating lease cost for leases classified as such under Topic 840 for the three months ended March 31, 2018 was $6,422. (a) Includes short-term leases, which are immaterial.
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Schedule of supplemental cash flow informaton related to leases | Supplemental cash flow and other information related to leases are as follows:
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Schedule of maturities of lease liabilities | Maturities of lease liabilities as of March 31, 2019 are as follows:
Maturities of minimum lease payments as of December 31, 2018 are as follows:
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Schedule of maturities of lease liabilities | Maturities of lease liabilities as of March 31, 2019 are as follows:
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Schedule of future minimum lease payments for capital leases | Maturities of minimum lease payments as of December 31, 2018 are as follows:
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Schedule of future minimum rental payments for operating leases | Maturities of minimum lease payments as of December 31, 2018 are as follows:
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Stock Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of costs related to company's stock-based compensation plan | The following costs related to the Company’s stock-based compensation plans are included in the unaudited consolidated statements of income:
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Schedule of stock options activity | Stock option activity under the Company’s stock-based compensation plans is shown below:
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Schedule of restricted stock and RSU activity | Restricted stock and restricted stock unit activity under the Company’s stock-based compensation plans is shown below:
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Schedule of performance based stock awards activity | Performance based restricted stock unit (the “PRSUs”) activity under the Company’s stock-based compensation plans is shown below:
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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2019 |
Jan. 01, 2019 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenue recognition contract terms | The typical length of a contract is 3 to 5 years for our operations management contracts. | |
Value of unsatisfied performance obligations not disclosed for contracts (less than) | 1 year | |
Operating lease right-of-use assets | $ 89,835 | |
Operating lease liabilities | $ 99,366 | |
Minimum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Payment terms | 30 days | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Payment terms | 60 days | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 80,328 | |
Deferred rent | 8,626 | |
Operating lease liabilities | $ 88,954 |
Segment and Geographical Information - Additional Information (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019
operating_segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 8 |
Number of operating segments, operations management | 6 |
Number of operating segments, industry focused | 5 |
Number of operating segments, finance and accounting | 1 |
Number of operating segments, company provides operations management services | 6 |
Number of non-operations management services | 2 |
Segment and Geographical Information - Revenues and Cost of Revenues for Company's Reportable Segments (Details) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2019
USD ($)
operating_segment
|
Mar. 31, 2018
USD ($)
|
||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | $ 239,573 | $ 206,973 | |||
Cost of revenues | [1] | 157,240 | 138,101 | ||
Gross profit | [1] | 82,333 | 68,872 | ||
Operating expenses | 65,472 | 53,722 | |||
Foreign exchange gain, interest expense and other income, net | 2,101 | 3,611 | |||
Income tax expense/(benefit) | 4,200 | (4,453) | |||
Loss from equity-method investment | 67 | 56 | |||
Net income attributable to ExlService Holdings, Inc. stockholders | $ 14,695 | 23,158 | |||
Number of operating segments, industry focused | operating_segment | 5 | ||||
Number of capability operating segments | operating_segment | 1 | ||||
BPM and related services | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | $ 152,612 | 149,871 | |||
Analytics services | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | 86,961 | 57,102 | |||
Insurance | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | 69,038 | 63,903 | |||
Cost of revenues | 46,692 | 42,427 | |||
Gross profit | 22,346 | 21,476 | |||
Healthcare | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | 20,569 | 22,797 | |||
Cost of revenues | 16,995 | 17,242 | |||
Gross profit | 3,574 | 5,555 | |||
TT&L | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | 17,425 | 17,499 | |||
Cost of revenues | 9,800 | 10,443 | |||
Gross profit | 7,625 | 7,056 | |||
F&A | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | 25,724 | 23,972 | |||
Cost of revenues | 14,274 | 14,729 | |||
Gross profit | 11,450 | 9,243 | |||
All Other | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | 19,856 | 21,700 | |||
Cost of revenues | 12,577 | 15,185 | |||
Gross profit | 7,279 | 6,515 | |||
Analytics | |||||
Revenues and cost of revenues for Company's reportable segments [Line Items] | |||||
Revenues, net | 86,961 | 57,102 | |||
Cost of revenues | 56,902 | 38,075 | |||
Gross profit | $ 30,059 | $ 19,027 | |||
|
Segment and Geographical Information - Revenues based on Geographical Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues, net | $ 239,573 | $ 206,973 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues, net | 196,104 | 171,198 |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues, net | 29,101 | 28,016 |
Rest of World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues, net | 14,368 | 7,759 |
Total Non-United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues, net | $ 43,469 | $ 35,775 |
Segment and Geographical Information - Property, Plant and Equipment, Net Based On Geographical Information (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 73,447 | $ 73,510 |
India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 34,527 | 36,152 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 27,210 | 28,254 |
Philippines | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 7,703 | 5,985 |
Rest of World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 4,007 | $ 3,119 |
Revenues, net - Contracts with Customer, Receivables, Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 176,889 | $ 164,752 |
Contract assets | 5,241 | 5,445 |
Contract liabilities: | ||
Deferred revenue (advance payments portion) | 8,906 | 6,345 |
Consideration received from customer for transitions activities | $ 1,495 | $ 1,669 |
Revenues, net - Additional Information (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable not billed | $ 75,832,000 | $ 63,952,000 | |
Contract liability, revenue recognized | 2,777,000 | $ 3,710,000 | |
Contract Acquisition Costs | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Capitalized contract acquisition costs | 513,000 | 713,000 | |
Capitalized contract acquisition costs, amount amortized | 200,000 | 73,000 | |
Impairment loss in relation to costs capitalized | 0 | ||
Contract Fulfillment Costs | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase in capitalized contract costs | 726,000 | ||
Capitalized contract acquisition costs, amount amortized | 305,000 | $ 111,000 | |
Impairment loss in relation to costs capitalized | 0 | ||
Deferred costs, contract fulfillment | $ 4,472,000 | $ 4,051,000 |
Earnings Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Numerator: | ||
Net income | $ 14,695 | $ 23,158 |
Denominators: | ||
Basic weighted average outstanding (in shares) | 34,374,815 | 34,446,265 |
Dilutive effect of share based awards (in shares) | 458,620 | 856,661 |
Diluted weighted average outstanding (in shares) | 34,833,435 | 35,302,926 |
Earnings per share attributable to ExlService Holdings Inc. stockholders: | ||
Basic (in dollars per share) | $ 0.43 | $ 0.67 |
Diluted (in dollars per share) | $ 0.42 | $ 0.66 |
Weighted average potentially dilutive considered anti-dilutive and not included in computing diluted earnings per share (in shares) | 425,432 | 148,522 |
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 86,688 | $ 95,881 | $ 69,955 | |
Restricted cash (current) | 5,364 | 5,608 | 2,727 | |
Restricted cash (non-current) | 2,575 | 2,642 | 3,783 | |
Cash, cash equivalents and restricted cash | $ 94,627 | $ 104,131 | $ 76,465 | $ 94,277 |
Other Income, net - Summary of Other Income, net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Other Income and Expenses [Abstract] | ||
Interest and dividend income | $ 796 | $ 308 |
Gain on sale and mark-to-market of mutual funds | 3,526 | 3,133 |
Others, net | 101 | 93 |
Other income, net | $ 4,423 | $ 3,534 |
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Owned Assets: | ||
Owned assets, gross | $ 236,298 | $ 228,850 |
Less: Accumulated depreciation and amortization | (163,600) | (155,798) |
Owned assets, net | 72,698 | 73,052 |
Right-of-use assets under finance leases: | ||
Finance lease, right of use asset, gross | 1,845 | 1,459 |
Less: Accumulated depreciation and amortization | (1,096) | (1,001) |
Property and equipment, net | 749 | 458 |
Property and equipment, net | 73,447 | 73,510 |
Network equipment and computers | ||
Owned Assets: | ||
Owned assets, gross | 88,566 | 85,921 |
Software | ||
Owned Assets: | ||
Owned assets, gross | 71,419 | 69,752 |
Leasehold improvements | ||
Owned Assets: | ||
Owned assets, gross | 40,312 | 39,533 |
Right-of-use assets under finance leases: | ||
Finance lease, right of use asset, gross | 794 | 778 |
Office furniture and equipment | ||
Owned Assets: | ||
Owned assets, gross | 20,783 | 20,097 |
Right-of-use assets under finance leases: | ||
Finance lease, right of use asset, gross | 344 | 53 |
Motor vehicles | ||
Owned Assets: | ||
Owned assets, gross | 719 | 635 |
Right-of-use assets under finance leases: | ||
Finance lease, right of use asset, gross | $ 707 | 628 |
Buildings | ||
Owned Assets: | ||
Estimated useful lives | 30 years | |
Owned assets, gross | $ 1,150 | 1,140 |
Land | ||
Owned Assets: | ||
Owned assets, gross | 753 | 746 |
Capital work in progress | ||
Owned Assets: | ||
Owned assets, gross | $ 12,596 | $ 11,026 |
Minimum | Network equipment and computers | ||
Owned Assets: | ||
Estimated useful lives | 3 years | |
Minimum | Software | ||
Owned Assets: | ||
Estimated useful lives | 3 years | |
Minimum | Leasehold improvements | ||
Owned Assets: | ||
Estimated useful lives | 3 years | |
Minimum | Office furniture and equipment | ||
Owned Assets: | ||
Estimated useful lives | 3 years | |
Minimum | Motor vehicles | ||
Owned Assets: | ||
Estimated useful lives | 2 years | |
Maximum | Network equipment and computers | ||
Owned Assets: | ||
Estimated useful lives | 5 years | |
Maximum | Software | ||
Owned Assets: | ||
Estimated useful lives | 5 years | |
Maximum | Leasehold improvements | ||
Owned Assets: | ||
Estimated useful lives | 8 years | |
Maximum | Office furniture and equipment | ||
Owned Assets: | ||
Estimated useful lives | 8 years | |
Maximum | Motor vehicles | ||
Owned Assets: | ||
Estimated useful lives | 5 years |
Property and Equipment, net - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization expense | $ 8,139 | $ 6,557 |
Impairment charges | 1,227 | 0 |
Depreciation and Amortization | ||
Property, Plant and Equipment [Line Items] | ||
Effect of the foreign exchange gains upon settlement of cash flow hedges | $ 57 | $ 151 |
Property and Equipment, net - Internally Developed Software Costs, Included under Software (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Abstract] | |||
Cost | $ 9,457 | $ 8,783 | |
Less : Accumulated amortization | (2,889) | (2,393) | |
Internally developed software, net | 6,568 | $ 6,390 | |
Amortization expense | 647 | $ 218 | |
Impairment charges | $ 1,227 | $ 0 |
Business Combinations, Goodwill and Intangible Assets - Additional Information - SCIO (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jul. 01, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
SCIO | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 245,044 | ||
Trade names and trademarks | SCIO | |||
Business Acquisition [Line Items] | |||
Weighted average useful life | 3 years | ||
Developed technology | SCIO | |||
Business Acquisition [Line Items] | |||
Weighted average useful life | 5 years | ||
Customer relationships | SCIO | |||
Business Acquisition [Line Items] | |||
Weighted average useful life | 10 years | ||
Restricted Stock | SCIO | |||
Business Acquisition [Line Items] | |||
Stock issued during period (in shares) | 69,459 | ||
Restricted common stock issued for acquisition of SCIO | $ 4,080 | ||
Minimum | SCIO | |||
Business Acquisition [Line Items] | |||
Purchase consideration | 236,500 | ||
Revolving Credit Facility | SCIO | |||
Business Acquisition [Line Items] | |||
Utilized revolver credit facility to finance acquisition | $ 233,000 | ||
General and administrative expenses | SCIO and Health Integrated | |||
Business Acquisition [Line Items] | |||
Acquisition related costs | $ 0 | $ 363 |
Business Combinations, Goodwill and Intangible Assets - Purchase Price Allocation - SCIO (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 350,239 | $ 349,984 | $ 204,481 | |
SCIO | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 9,842 | |||
Restricted cash | 2,790 | |||
Accounts receivable | 19,924 | |||
Other current assets | 2,076 | |||
Property and equipment | 1,824 | |||
Other assets | 1,751 | |||
Assets | 111,107 | |||
Current liabilities | (12,482) | |||
Deferred tax liabilities, net | (17,132) | |||
Other non-current liabilities | (200) | |||
Liabilities | (29,814) | |||
Net assets acquired | 81,293 | |||
Goodwill | 163,751 | |||
Total purchase consideration | 245,044 | |||
Customer relationships | SCIO | ||||
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | 47,800 | |||
Developed technology | SCIO | ||||
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | 21,400 | |||
Trade names and trademarks | SCIO | ||||
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | $ 3,700 |
Business Combinations, Goodwill and Intangible Assets - Summary of Company's Goodwill (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2018 |
|
Goodwill [Line Items] | |||
Finite-Lived Intangible Assets, Accumulated Impairment | $ 5,827,000 | $ 5,827,000 | $ 5,827,000 |
Goodwill [Roll Forward] | |||
Beginning Balance | 349,984,000 | 204,481,000 | |
Acquisitions | 163,751,000 | ||
Measurement period adjustments | (1,728,000) | ||
Currency translation adjustments | 255,000 | (2,291,000) | |
Impairment charges | 14,229,000 | 14,229,000 | |
Ending Balance | 350,239,000 | 349,984,000 | 349,984,000 |
Insurance | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 38,203,000 | 38,333,000 | |
Acquisitions | 0 | ||
Measurement period adjustments | 0 | ||
Currency translation adjustments | 45,000 | (130,000) | |
Impairment charges | 0 | ||
Ending Balance | 38,248,000 | 38,203,000 | 38,203,000 |
Healthcare | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 19,276,000 | 35,233,000 | |
Acquisitions | 0 | ||
Measurement period adjustments | (1,728,000) | ||
Currency translation adjustments | 0 | 0 | |
Impairment charges | 14,229,000 | ||
Ending Balance | 19,276,000 | 19,276,000 | 19,276,000 |
TT&L | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 12,697,000 | 13,679,000 | |
Acquisitions | 0 | ||
Measurement period adjustments | 0 | ||
Currency translation adjustments | 95,000 | (982,000) | |
Impairment charges | 0 | ||
Ending Balance | 12,792,000 | 12,697,000 | 12,697,000 |
F&A | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 47,193,000 | 48,372,000 | |
Acquisitions | 0 | ||
Measurement period adjustments | 0 | ||
Currency translation adjustments | 115,000 | (1,179,000) | |
Impairment charges | 0 | ||
Ending Balance | 47,308,000 | 47,193,000 | 47,193,000 |
All Other | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 5,326,000 | 5,326,000 | |
Acquisitions | 0 | ||
Measurement period adjustments | 0 | ||
Currency translation adjustments | 0 | 0 | |
Impairment charges | 0 | ||
Ending Balance | 5,326,000 | 5,326,000 | 5,326,000 |
Analytics | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 227,289,000 | 63,538,000 | |
Acquisitions | 163,751,000 | ||
Measurement period adjustments | 0 | ||
Currency translation adjustments | 0 | 0 | |
Impairment charges | 0 | ||
Ending Balance | 227,289,000 | 227,289,000 | 227,289,000 |
Health Integrated, Inc. | |||
Goodwill [Roll Forward] | |||
Beginning Balance | $ 0 | ||
Ending Balance | $ 0 | $ 0 |
Business Combinations, Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Mar. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | $ 181,272 | $ 181,370 |
Accumulated Amortization | (80,850) | (86,435) |
Accumulated Impairment | (5,827) | (5,827) |
Total | 94,595 | 89,108 |
Total intangible assets, gross carrying amount | 182,172 | 182,270 |
Total intangible assets, net carrying amount | 95,495 | 90,008 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 129,790 | 129,832 |
Accumulated Amortization | (56,367) | (59,826) |
Accumulated Impairment | (5,549) | (5,549) |
Total | 67,874 | 64,457 |
Indefinite lived intangible assets [Abstract] | ||
Impairment of intangible assets | 5,549 | |
Leasehold benefits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 2,644 | 2,668 |
Accumulated Amortization | (2,567) | (2,636) |
Accumulated Impairment | 0 | 0 |
Total | 77 | 32 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 37,154 | 37,182 |
Accumulated Amortization | (14,653) | (16,279) |
Accumulated Impairment | 0 | 0 |
Total | 22,501 | 20,903 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 2,045 | 2,045 |
Accumulated Amortization | (1,937) | (1,975) |
Accumulated Impairment | 0 | 0 |
Total | 108 | 70 |
Trade names and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 9,639 | 9,643 |
Accumulated Amortization | (5,326) | (5,719) |
Accumulated Impairment | (278) | (278) |
Total | 4,035 | 3,646 |
Indefinite lived intangible assets [Abstract] | ||
Impairment of intangible assets | 278 | |
Trade names and trademarks | ||
Indefinite lived intangible assets [Abstract] | ||
Trade names and trademarks | 900 | $ 900 |
Health Integrated, Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net carrying amount | $ 0 |
Business Combinations, Goodwill and Intangible Assets - Amortization of Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Business Combination, Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 5,528 | $ 3,947 |
Business Combinations, Goodwill and Intangible Assets - Weighted Average Life of Intangible Assets (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 7 years 10 months 2 days |
Leasehold benefits | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 2 months 1 day |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 4 years 2 months 1 day |
Non-compete agreements | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 5 months 19 days |
Trade names and trademarks (Finite lived) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 2 years 11 months 1 day |
Business Combinations, Goodwill and Intangible Assets - Estimated Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Business Combination, Goodwill And Intangible Assets Disclosure [Abstract] | ||
2019 (April 1 - December 31) | $ 16,034 | |
2020 | 14,452 | |
2021 | 12,749 | |
2022 | 11,334 | |
2023 | 9,045 | |
2024 and thereafter | 25,494 | |
Total | $ 89,108 | $ 94,595 |
Investment in Equity Affiliate (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 12, 2017 |
|
Schedule of Equity Method Investments [Line Items] | |||
Loss from equity-method investment | $ (67) | $ (56) | |
Corridor | |||
Schedule of Equity Method Investments [Line Items] | |||
Aggregate cost | $ 3,000 | ||
Loss from equity-method investment | $ 67 | $ 56 |
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Derivative instruments | $ 4,601 | $ 4,059 |
Advances to suppliers | 1,643 | 2,910 |
Receivables from statutory authorities | 13,889 | 14,145 |
Contract assets | 1,217 | 1,201 |
Deferred contract fulfillment costs | 1,246 | 1,236 |
Others | 3,986 | 4,689 |
Other current assets | $ 26,582 | $ 28,240 |
Other Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Lease deposits | $ 8,949 | $ 8,891 |
Derivative instruments | 3,824 | 1,971 |
Deposits with statutory authorities | 6,315 | 6,259 |
Term deposits | 325 | 315 |
Contract assets | 4,024 | 4,244 |
Deferred contract fulfillment costs | 3,226 | 2,815 |
Others | 6,501 | 6,520 |
Other assets | $ 33,164 | $ 31,015 |
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 42,335 | $ 44,711 |
Derivative instruments | 2,046 | 3,204 |
Client liabilities | 6,632 | 6,933 |
Other current liabilities | 14,814 | 9,321 |
Accrued expenses and other current liabilities | $ 65,827 | $ 64,169 |
Other Non-Current Liabilities - Summary of Other Non-Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Liabilities, Noncurrent [Abstract] | ||
Derivative instruments | $ 1,243 | $ 3,075 |
Unrecognized tax benefits | 804 | 804 |
Deferred rent | 0 | 7,834 |
Retirement benefits | 3,791 | 3,616 |
Deferred transition revenue | 713 | 945 |
Others | 243 | 247 |
Other non-current liabilities | $ 6,794 | $ 16,521 |
Accumulated Other Comprehensive Loss - Summary of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Cumulative foreign currency translation loss | $ (81,425) | $ (84,105) |
Unrealized gain/(loss) on cash flow hedges, net of taxes of $1,658 and $115, respectively | 3,390 | (333) |
Retirement benefits, net of taxes of $56 and ($53), respectively | 823 | 971 |
Accumulated other comprehensive loss | (77,212) | (83,467) |
Unrealized gain on cash flow hedges, taxes | 1,658 | 115 |
Retirement benefits, taxes | $ 56 | $ (53) |
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets | ||
Mutual funds | $ 168,693 | $ 142,408 |
Derivative financial instruments | 8,425 | 6,030 |
Total | 177,118 | 148,438 |
Liabilities | ||
Derivative financial instruments | 3,289 | 6,279 |
Total | 3,289 | 6,279 |
Level 1 | ||
Assets | ||
Mutual funds | 168,693 | 142,408 |
Derivative financial instruments | 0 | 0 |
Total | 168,693 | 142,408 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Total | 0 | 0 |
Level 2 | ||
Assets | ||
Mutual funds | 0 | 0 |
Derivative financial instruments | 8,425 | 6,030 |
Total | 8,425 | 6,030 |
Liabilities | ||
Derivative financial instruments | 3,289 | 6,279 |
Total | 3,289 | 6,279 |
Level 3 | ||
Assets | ||
Mutual funds | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Level 2 | ||
Business Acquisition [Line Items] | ||
Fair value of convertible notes | $ 137,374 | $ 130,510 |
Derivatives and Hedge Accounting - Additional Information (Details) € in Thousands, £ in Thousands, $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2019
USD ($)
|
Mar. 31, 2019
GBP (£)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2018
EUR (€)
|
Dec. 31, 2018
GBP (£)
|
|
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net derivative gains which could be reclassified into earnings within the next 12 months | $ 2,467 | ||||
Maximum outstanding term of cash flow hedges | 45 months | ||||
Derivatives Designated as Hedging Instruments | Derivatives in Cash Flow Hedging Relationships | Foreign currency exchange contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign exchange contracts outstanding | $ 410,189 | $ 362,435 | |||
Derivatives not designated as hedging instruments | Foreign currency exchange contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign exchange contracts outstanding | 100,204 | £ 12,767 | 125,503 | € 512 | £ 15,616 |
Forward Contracts | Derivatives Designated as Hedging Instruments | Derivatives in Cash Flow Hedging Relationships | Foreign currency exchange contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Foreign exchange contracts outstanding | $ 6,250 | $ 6,900 |
Derivatives and Hedge Accounting - Summary of Fair Value of Foreign Currency Exchange Contracts (Details) - Foreign currency exchange contracts - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivatives Designated as Hedging Instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, asset | $ 4,467 | $ 4,022 |
Derivatives Designated as Hedging Instruments | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, asset | 3,824 | 1,971 |
Derivatives Designated as Hedging Instruments | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, liability | 2,000 | 3,137 |
Derivatives Designated as Hedging Instruments | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, liability | 1,243 | 3,075 |
Derivatives not designated as hedging instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, asset | 134 | 37 |
Derivatives not designated as hedging instruments | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, liability | $ 46 | $ 67 |
Derivatives and Hedge Accounting - Summary of Effect of Foreign Currency Exchange Contracts (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain/(loss) recognized in unaudited consolidated statements of income | $ 1,260 | $ 615 |
Derivatives in cash flow hedging relationships | Derivatives in hedging relationships | Foreign currency exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives in cash flow hedging relationships | 5,937 | (5,014) |
Reclassification out of Accumulated Other Comprehensive Income | Derivatives not designated as hedging instruments | Foreign currency exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain/(loss) recognized in unaudited consolidated statements of income | $ 1,396 | $ (2,928) |
Derivatives and Hedge Accounting Derivatives and Hedge Accounting - Location of Gain or Loss Recognized (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cost of revenues | $ 157,240 | $ 138,101 |
General and administrative expenses | 32,531 | 29,266 |
Selling & marketing expenses | 18,047 | 13,952 |
Depreciation & amortization | 13,667 | 10,504 |
Foreign exchange gain, net | 1,260 | 615 |
Reclassification out of Accumulated Other Comprehensive Income | Derivatives Designated as Hedging Instruments | Derivatives in cash flow hedging relationships | Foreign currency exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cost of revenues | 531 | 2,145 |
General and administrative expenses | 80 | 331 |
Selling & marketing expenses | 7 | 33 |
Depreciation & amortization | 53 | 162 |
Reclassification from AOCI, before tax | 671 | 2,671 |
Reclassification out of Accumulated Other Comprehensive Income | Derivatives not designated as hedging instruments | Foreign currency exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Foreign exchange gain, net | $ 1,396 | $ (2,928) |
Borrowings - Additional Information (Details) |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Oct. 01, 2018
USD ($)
$ / shares
|
Nov. 21, 2017
USD ($)
|
Mar. 31, 2019
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
Jul. 02, 2018
USD ($)
|
|
Credit Facilities [Line Items] | ||||||
Interest coverage ratio, minimum | 3.5 | |||||
Leverage ratio, maximum | 3.0 | |||||
Long-term debt, maturities, repayments of principal in next twelve months | $ 20,000,000 | |||||
Payment of debt issuance costs | 97,000 | $ 0 | ||||
Allocation of equity component related to issuance costs on convertible senior notes | (13,000) | |||||
Debt discount amortization | 600,000 | $ 0 | ||||
Structured payable | 337,542,000 | |||||
Current portion of long-term borrowings | 20,876,000 | $ 21,423,000 | ||||
Long term borrowings | 299,765,000 | 263,241,000 | ||||
Notes Payable, Other Payables | ||||||
Credit Facilities [Line Items] | ||||||
Structured payable | 1,542,000 | 2,114,000 | ||||
Current portion of long-term borrowings | 876,000 | 1,423,000 | ||||
Long term borrowings | 666,000 | 691,000 | ||||
3.50% Convertible Senior Notes due October 1, 2024 | Convertible Notes Payable | ||||||
Credit Facilities [Line Items] | ||||||
Debt instrument face amount | $ 150,000,000 | |||||
Interest rate | 3.50% | |||||
Interest expense | 1,313,000 | |||||
Conversion rate | 0.0133333000 | |||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 75 | |||||
Threshold percentage of stock price trigger | 150.00% | |||||
Net proceeds from convertible notes | $ 149,000,000 | |||||
Debt issuance costs | 1,000,000 | |||||
Payment of debt issuance costs | 442,000 | |||||
Liability component of debt issuance costs | 1,279,000 | |||||
Equity component of debt issuance costs | 163,000 | |||||
Unamortized debt issuance costs | 1,178,000 | $ 1,127,000 | ||||
Convertible notes, liability component | 133,077,000 | |||||
Convertible senior notes, interest rate | 5.75% | |||||
Allocation of equity component related to issuance costs on convertible senior notes | $ 16,923,000 | |||||
Remaining discount amortization period | 6 years | |||||
Debt discount amortization | $ 600,000 | |||||
Structured payable | 150,000,000 | $ 150,000,000 | ||||
Revolving Credit Facility | ||||||
Credit Facilities [Line Items] | ||||||
Outstanding debt | 186,000,000 | 150,000,000 | ||||
Outstanding debt, noncurrent | 166,000,000 | 130,000,000 | ||||
Outstanding debt, current | 20,000,000 | |||||
Unamortized debt issuance costs | 942,000 | $ 1,006,000 | ||||
Repayments of outstanding borrowings | $ 150,000,000 | |||||
Structured payable | $ 186,000,000 | |||||
Revolving Credit Facility | New Credit Agreement | ||||||
Credit Facilities [Line Items] | ||||||
Maximum borrowing capacity | $ 200,000,000 | |||||
Line of credit interest rate during period | 3.90% | 3.30% | ||||
Unrestricted domestic cash and cash equivalents threshold | $ 50,000,000 | |||||
Interest coverage ratio, minimum | 3.5 | |||||
Leverage ratio, maximum | 3.0 | |||||
Revolving Credit Facility | New Credit Agreement | Maximum | ||||||
Credit Facilities [Line Items] | ||||||
Commitment fee percentage range on unused credit facility | 0.30% | |||||
Revolving Credit Facility | New Credit Agreement | Minimum | ||||||
Credit Facilities [Line Items] | ||||||
Commitment fee percentage range on unused credit facility | 0.15% | |||||
Revolving Credit Facility | New Credit Agreement | Prime Rate | Maximum | ||||||
Credit Facilities [Line Items] | ||||||
Basis spread on variable rate | 0.75% | |||||
Revolving Credit Facility | New Credit Agreement | Prime Rate | Minimum | ||||||
Credit Facilities [Line Items] | ||||||
Basis spread on variable rate | 0.00% | |||||
Revolving Credit Facility | New Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | ||||||
Credit Facilities [Line Items] | ||||||
Basis spread on variable rate | 1.75% | |||||
Revolving Credit Facility | New Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | ||||||
Credit Facilities [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
SCIO | Revolving Credit Facility | New Credit Agreement | ||||||
Credit Facilities [Line Items] | ||||||
Maximum borrowing capacity | $ 300,000,000 | |||||
SCIO | Revolving Credit Facility | New Credit Agreement | Maximum | ||||||
Credit Facilities [Line Items] | ||||||
Option to increase additional credit facility | $ 100,000,000 |
Borrowings - Principle Maturities of Borrowings and Credit Arrangements (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
2019 (April - December) | $ 15,876 | |
2020 | 26,666 | |
2021 | 28,000 | |
2022 | 117,000 | |
2023 | 0 | |
Thereafter | 150,000 | |
Total | 337,542 | |
Notes | 3.50% Convertible Senior Notes due October 1, 2024 | ||
Debt Instrument [Line Items] | ||
2019 (April - December) | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 150,000 | |
Total | 150,000 | $ 150,000 |
Structured Payables | ||
Debt Instrument [Line Items] | ||
2019 (April - December) | 876 | |
2020 | 666 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total | 1,542 | $ 2,114 |
Revolver Credit | ||
Debt Instrument [Line Items] | ||
2019 (April - December) | 15,000 | |
2020 | 26,000 | |
2021 | 28,000 | |
2022 | 117,000 | |
2023 | 0 | |
Thereafter | 0 | |
Total | $ 186,000 |
Capital Structure - Additional Information (Details) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2019
USD ($)
ClassOfCommonStock
$ / shares
shares
|
Mar. 31, 2018
USD ($)
$ / shares
shares
|
Feb. 28, 2017
USD ($)
|
Dec. 30, 2014
USD ($)
|
|
Equity, Class of Treasury Stock [Line Items] | ||||
Number of classes of common stock outstanding | ClassOfCommonStock | 1 | |||
Acquisition of restricted stock from employees in connection with withholding tax payments (in shares) | shares | 22,666 | 41,811 | ||
Withholding tax payments related to the vesting of restricted stock for total consideration | $ 1,408,000 | $ 2,565,000 | ||
Weighted average purchase price prior to the vesting date (in dollars per share) | $ / shares | $ 62.11 | $ 61.34 | ||
2014 Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchase of common stock authorized, maximum | $ 20,000,000 | |||
2017 Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Additional authorized amount | $ 100,000,000 | |||
Authorized increase in repurchase amount, 2018 | 40,000,000 | |||
Common stock purchased under the repurchase program (in shares) | shares | 239,865 | 182,182 | ||
Common stock aggregate purchase price including commissions | $ 14,000,000 | $ 10,939,000 | ||
Common stock average purchase price per share (in dollars per share) | $ / shares | $ 58.37 | $ 60.05 | ||
2017 Repurchase Program | Minimum | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized increase in repurchase amount | 20,000,000 | |||
2017 Repurchase Program | Maximum | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized increase in repurchase amount | $ 40,000,000 |
Employee Benefit Plans - Net Gratuity Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Retirement Benefits [Abstract] | ||
Service cost | $ 487 | $ 438 |
Interest cost | 219 | 180 |
Expected return on plan assets | (142) | (124) |
Amortization of actuarial (gain)/loss | (39) | (39) |
Net periodic benefit cost | $ 525 | $ 455 |
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Retirement Benefits [Abstract] | ||
Expected return on plan assets, percentage | 7.80% | |
Discretionary contributions towards 401(k) plan, maximum percentage | 4.00% | |
Discretionary contributions to 401(k) plans | $ 1,213 | $ 1,230 |
Defined contribution plan, cost | $ 2,004 | $ 1,914 |
Employee Benefit Plans - Change in Plan Assets (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |
Plan assets at January 1, 2019 | $ 7,420 |
Actual return | 150 |
Employer contribution | 0 |
Benefits paid | (130) |
Effect of exchange rate changes | 67 |
Plan assets at March 31, 2019 | $ 7,507 |
Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Operating Lease | ||
Operating lease right-of-use assets | $ 89,835 | |
Operating lease liabilities - Current | 22,306 | |
Operating lease liabilities - Non-current | 77,060 | |
Total operating lease liabilities | 99,366 | |
Finance Lease | ||
Property and equipment, gross | 1,845 | $ 1,459 |
Accumulated depreciation | (1,096) | (1,001) |
Property and equipment, net | 749 | 458 |
Finance lease liabilities - Current | 283 | 223 |
Finance lease liabilities - Non-current | 492 | $ 315 |
Total finance lease liabilities | $ 775 |
Leases - Components of Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Finance lease: | ||
Amortization of right-of-use assets | $ 95 | |
Interest on lease liabilities | 25 | |
Operating lease | 7,017 | |
Total lease cost | $ 7,137 | |
Operating lease costs for leases classified as such under Topic 840 | $ 6,422 |
Leases - Cash Flow and Other Information (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Cash paid for amounts included in the measurement of lease liabilities : | |
Operating cash flows from operating leases | $ 5,199 |
Operating cash flows from finance leases | 20 |
Financing cash flows from finance leases | $ 137 |
Weighted-average remaining lease term | |
Finance lease | 2 years 10 months 24 days |
Operating lease | 6 years 4 months 24 days |
Weighted-average discount rate | |
Finance lease | 8.70% |
Operating lease | 7.30% |
Leases - Maturities of Lease Liabilities (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Operating Leases | |
2019 (April 1 - December 31) | $ 17,904 |
2020 | 22,265 |
2021 | 19,545 |
2022 | 17,251 |
2023 | 15,071 |
2024 | 12,754 |
2025 and thereafter | 23,372 |
Total lease payments | 128,162 |
Less: Imputed interest | 28,796 |
Lease liabilities | 99,366 |
Finance Leases | |
2019 (April 1 - December 31) | 286 |
2020 | 294 |
2021 | 200 |
2022 | 94 |
2023 | 73 |
2024 | 3 |
2025 and thereafter | 0 |
Total lease payments | 950 |
Less: Imputed interest | 175 |
Lease liabilities | $ 775 |
Leases - Future Lease Payments under Topic 840 (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Operating Leases | |
2019 | $ 23,431 |
2020 | 20,039 |
2021 | 16,924 |
2022 | 14,804 |
2023 | 12,859 |
2024 | 11,114 |
2025 and thereafter | 15,000 |
Total minimum lease payment | 114,171 |
Capital Leases | |
2019 | 283 |
2020 | 163 |
2021 | 120 |
2022 | 58 |
2023 | 49 |
2024 | 0 |
2025 and thereafter | 0 |
Total minimum lease payment | 673 |
Less: Imputed interest | 135 |
Present value of minimum lease payments | 538 |
Less: Current portion | 223 |
Long term capital lease obligation | $ 315 |
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense/(benefit) | $ 4,200 | $ (4,453) |
Effective tax rate, current income tax expense (benefit) | 22.10% | (23.70%) |
Excess tax benefits, stock awards | $ 1,015 | $ 4,827 |
Measurement period adjustment, transition tax increase (decrease) | $ (4,836) |
Stock Based Compensation - Costs Related to Company's Stock-Based Compensation Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | $ 6,956 | $ 5,074 |
Cost of revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | 1,326 | 1,093 |
General and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | 2,975 | 2,250 |
Selling and marketing expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | $ 2,655 | $ 1,731 |
Stock Based Compensation - Costs Related to Company's Stock-Based Compensation Plan Additional Information (Details) |
Mar. 31, 2019
shares
|
---|---|
2018 Omnibus Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number available for grant (in shares) | 2,671,960 |
Stock Based Compensation - Stock Based Compensation Stock Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of Options, Outstanding, Beginning Balance (in shares) | 162,475 | |
Number of Options, Granted (in shares) | 0 | |
Number of Options, Exercised (in shares) | (2,500) | |
Number of Options, Forfeited (in shares) | 0 | |
Number of Options, Outstanding, Ending Balance (in shares) | 159,975 | 162,475 |
Number of Options, Vested and exercisable at end of period (in shares) | 159,975 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted-Average Exercise Price, Outstanding, Beginning Balance (in dollars per share) | $ 20.21 | |
Weighted-Average Exercise Price, Granted (in dollars per share) | 0 | |
Weighted-Average Exercise Price, Exercised (in dollars per share) | 8.75 | |
Weighted-Average Exercise Price, Forfeited (in dollars per share) | 0 | |
Weighted-Average Exercise Price, Outstanding, Ending Balance (in dollars per share) | 20.39 | $ 20.21 |
Weighted Average Exercise Price, Vested and exercisable at end of period (in dollars per share) | $ 20.39 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Aggregate Intrinsic Value, Outstanding | $ 6,341 | $ 5,267 |
Aggregate Intrinsic Value, Exercised | 131 | |
Aggregate Intrinsic Value, Vested and exercisable at end of period | $ 6,341 | |
Weighted-Average Remaining Contractual Life | 2 years 10 days | 2 years 2 months 26 days |
Weighted-Average Remaining Contractual Life, Vested and exercisable at end of period | 2 years 10 days |
Stock Based Compensation - Stock Options Additional Information (Details) |
Mar. 31, 2019
USD ($)
|
---|---|
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, unvested options | $ 0 |
Stock Based Compensation - Restricted Stock and Restricted Stock Units Activity Under Company's Stock Plans (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number, Outstanding, at Beginning Balance (in shares) | 103,623 | |
Number, Granted (in shares) | 0 | |
Number, Vested (in shares) | (48,854) | |
Number, Forfeited (in shares) | 0 | |
Number, Outstanding, at Ending Balance (in shares) | 54,769 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted-Average Fair Value, Outstanding, at Beginning Balance (in dollars per share) | $ 42.68 | |
Weighted-Average Fair Value, Granted (in dollars per share) | 0 | |
Weighted-Average Fair Value, Vested (in dollars per share) | 35.91 | |
Weighted-Average Fair Value, Forfeited (in dollars per share) | 0 | |
Weighted-Average Fair Value, Outstanding, at Ending Balance (in dollars per share) | $ 48.72 | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number, Outstanding, at Beginning Balance (in shares) | 953,578 | |
Number, Granted (in shares) | 449,523 | |
Number, Vested (in shares) | (354,138) | |
Number, Forfeited (in shares) | (21,623) | |
Number, Outstanding, at Ending Balance (in shares) | 1,027,340 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted-Average Fair Value, Outstanding, at Beginning Balance (in dollars per share) | $ 51.81 | |
Weighted-Average Fair Value, Granted (in dollars per share) | 64.26 | |
Weighted-Average Fair Value, Vested (in dollars per share) | 46.01 | |
Weighted-Average Fair Value, Forfeited (in dollars per share) | 55.19 | |
Weighted-Average Fair Value, Outstanding, at Ending Balance (in dollars per share) | $ 59.19 | |
Units vested for which the underlying common stock is yet to be issued (in shares) | 155,753 | 155,753 |
Stock Based Compensation - Restricted Stock and Restricted Stock Unit Additional Information (Details) - Restricted Stock and Restricted Stock Units $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 58,948 |
Cost not yet recognized, period for recognition | 3 years 1 month 9 days |
Stock Based Compensation - Performance Based Stock Awards (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019
$ / shares
shares
| |
Revenue Based PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number, Outstanding, at Beginning Balance (in shares) | shares | 100,353 |
Number, Granted (in shares) | shares | 54,062 |
Number, Vested (in shares) | shares | 0 |
Number, Forfeited (in shares) | shares | 0 |
Number, Outstanding, at Ending Balance (in shares) | shares | 154,415 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted-Average Fair Value, Outstanding, at Beginning Balance (in dollars per share) | $ / shares | $ 54.07 |
Weighted-Average Fair Value, Granted (in dollars per share) | $ / shares | 64.33 |
Weighted-Average Fair Value, Vested (in dollars per share) | $ / shares | 0 |
Weighted-Average Fair Value, Forfeited (in dollars per share) | $ / shares | 0 |
Weighted-Average Fair Value, Outstanding, at Ending Balance (in dollars per share) | $ / shares | $ 57.66 |
Market Condition Based PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number, Outstanding, at Beginning Balance (in shares) | shares | 100,336 |
Number, Granted (in shares) | shares | 54,053 |
Number, Vested (in shares) | shares | 0 |
Number, Forfeited (in shares) | shares | 0 |
Number, Outstanding, at Ending Balance (in shares) | shares | 154,389 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted-Average Fair Value, Outstanding, at Beginning Balance (in dollars per share) | $ / shares | $ 62.43 |
Weighted-Average Fair Value, Granted (in dollars per share) | $ / shares | 92.13 |
Weighted-Average Fair Value, Vested (in dollars per share) | $ / shares | 0 |
Weighted-Average Fair Value, Forfeited (in dollars per share) | $ / shares | 0 |
Weighted-Average Fair Value, Outstanding, at Ending Balance (in dollars per share) | $ / shares | $ 72.83 |
Stock Based Compensation - Performance Based Stock Awards Additional Information (Details) - Performance Based Stock Awards $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 16,647 |
Cost not yet recognized, period for recognition | 2 years 3 months 3 days |
Related Party Disclosures (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
Oct. 01, 2018 |
|
Related Party Transaction [Line Items] | ||||
Revenues from related party | $ 239,573,000 | $ 206,973,000 | ||
Accounts receivable from related party | 0 | $ 5,000 | ||
Related Party Transaction, Amounts of Transaction | 35,000 | |||
Debt outstanding | 337,542,000 | |||
Consulting Services | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Revenues from related party | 0 | $ 199,000 | ||
Convertible Notes Payable | 3.50% Convertible Senior Notes due October 1, 2024 | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument face amount | $ 150,000,000 | |||
Debt outstanding | 150,000,000 | 150,000,000 | ||
Interest accrued | $ 2,625,000 | $ 1,313,000 |
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase commitments, net of advances | $ 9,552 | |
Export-oriented units established, percentage | 100.00% | |
Aggregate disputed amount amount related to transfer pricing and permanent establishment | $ 17,863 | $ 18,177 |
Litigation, settlement amount | 2,400 | |
Settlement payments made during the period | 1,200 | |
Total bank guarantees and deposits in respect of contingencies | 8,244 | 8,171 |
Amounts paid as deposits in respect of contingencies | 6,328 | 6,273 |
Bank guarantee issued | $ 1,916 | $ 1,899 |
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