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Derivatives and Hedge Accounting
 9 Months Ended
Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedge Accounting Derivatives and Hedge Accounting
The Company uses derivative instruments to mitigate cash flow volatility from risk of fluctuations in foreign currency exchange rates and interest rates. The Company enters into foreign currency forward contracts to hedge cash flow risks from forecasted transactions denominated in certain foreign currencies, and interest rate swaps to hedge cash flow risks from its revolving credit facility having variable interest rate obligations. These contracts qualify as cash flow hedges under ASC Topic 815 and are with counterparties that are highly rated financial institutions. As of September 30, 2022 and December 31, 2021, the Company had outstanding foreign currency forward contracts totaling $604,560 and $514,580, respectively and interest rate swaps totaling $75,000 and $nil, respectively.

The Company estimates that approximately $10,757 of derivative losses, net, excluding tax effects, included in AOCI, representing changes in the value of cash flow hedges based on exchange rates prevailing as of September 30, 2022, could be reclassified into earnings within the next twelve months. As of September 30, 2022, the maximum outstanding term of the cash flow hedges was approximately 45 months.

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, against the risk of fluctuations in foreign currency exchange rates associated with remeasurement of such assets and liabilities to functional currency. These foreign currency forward contracts do not qualify as fair value hedges under ASC Topic 815. Changes in the fair value of these financial instruments are recognized in the unaudited consolidated statements of income and are included in the foreign exchange gain/(loss) line item. The Company’s primary exchange rate exposure is with the Indian rupee, the U.K. pound sterling (GBP) and the Philippine peso. The Company also has exposure to Colombian pesos (COP), Czech koruna, the Euro (EUR), South African ZAR, the Australian dollar (AUD) and other local currencies in which it operates. Outstanding foreign currency forward contracts amounted to USD 162,473, GBP 9,254, EUR 1,906 and COP 3,619,127 as of September 30, 2022 and USD 134,612, GBP 6,763, EUR 1,343 and COP 2,541,902 as of December 31, 2021.

The following table sets forth the fair value of the foreign currency forward contracts and interest rate swaps and their location on the consolidated balance sheets:
Derivatives in cash flow hedging relationshipsDerivatives not designated as hedging instruments
As ofAs of
Derivative financial instrumentsSeptember 30, 2022December 31, 2021September 30, 2022December 31, 2021
Other current assets$995 $8,669 $367 $13 
Other assets$219 $6,307 $— $— 
Accrued expenses and other current liabilities$11,752 $1,324 $145 $528 
Other non-current liabilities$8,114 $1,785 $— $— 
The following tables set forth the effect of foreign currency forward contracts and interest rate swaps on AOCI and the unaudited consolidated statements of income:
Three months ended September 30,Nine months ended September 30,
Derivative financial instruments:2022202120222021
Unrealized gain/(loss) recognized in AOCI
Derivatives in cash flow hedging relationships$(13,489)$261 $(28,638)$(42)
Loss recognized in unaudited consolidated statements of income
Derivatives not designated as hedging instruments$(4,889)$(464)$(11,245)$(1,054)
Location and amount of gain/(loss) recognized in unaudited consolidated statements of income for derivatives in cash flow hedging relationships and derivatives not designated as hedging instruments
Three months ended September 30,
20222021
As per unaudited consolidated
statements of
income		Loss on derivative financial instrumentsAs per unaudited consolidated
statements of
income		Gain/(loss) on derivative financial instruments
Cash flow hedging relationships
Location in unaudited consolidated statements of income where gain was reclassified from AOCI
Cost of revenues$230,462 $(1,381)$177,743 $1,801 
General and administrative expenses$42,519 (109)$36,167 223 
Selling and marketing expenses$23,879 (6)$21,672 11 
Depreciation and amortization expense$14,380 (71)$12,305 115 
Interest expense$2,442 — $1,810 — 
Total before tax(1,567)2,150 
Income tax effects on above133 (370)
Net of tax$(1,434)$1,780 
Derivatives not designated as hedging instruments
Location in unaudited consolidated statements of income where gain/(loss) was recognized
Foreign exchange gain, net$1,504 $(4,889)$1,171 $(464)
$1,504 $(4,889)$1,171 $(464)
Location and amount of gain/(loss) recognized in unaudited consolidated statements of income for derivatives in cash flow hedging relationships and derivatives not designated as hedging instruments
Nine months ended September 30,
20222021
As per unaudited consolidated
statements of
income
Gain/(loss) on derivative financial instruments
As per unaudited consolidated
statements of
income
Gain/(loss) on derivative financial instruments
Cash flow hedging relationships
Location in unaudited consolidated statements of income where gain was reclassified from AOCI
Cost of revenues$659,185 $1,396 $507,265 $6,643 
General and administrative expenses$122,898 366 $103,369 769 
Selling and marketing expenses$72,034 23 $59,631 39 
Depreciation and amortization expense$42,057 96 $36,716 394 
Interest expense$4,820 — $6,804 — 
Total before tax1,881 7,845 
Income tax effects on above(802)(1,186)
Net of tax$1,079 $6,659 
Derivatives not designated as hedging instruments
Location in unaudited consolidated statements of income where gain/(loss) was recognized
Foreign exchange gain, net$4,683 $(11,245)$2,958 $(1,054)
$4,683 $(11,245)$2,958 $(1,054)
Effect of net investment hedges on accumulated other comprehensive income/(loss):
Three months ended September 30,Nine months ended September 30,
Amount of loss recognized in AOCIAmount of loss recognized in AOCI
Net investment hedging relationships2022202120222021
Foreign currency forward contracts$— $— $— $1,134