NEW YORK, Nov. 9, 2021 /PRNewswire/ -- Genpact Limited
(NYSE: G), a global professional services firm focused on
delivering digital transformation, today announced financial
results for the third quarter ended September 30, 2021.
"Our third quarter performance reflects continued momentum
across our business. Global Client top line performance, which grew
at 11% on a constant currency basis, was once again driven by
strong demand for Transformation Services, made up of Analytics,
Digital, and Consulting," said "Tiger" Tyagarajan, Genpact's
president and CEO. "Our strategic investments over the years in
capabilities and talent, including the continuous training and
development of our global workforce, positions us well to address
the pressing challenges and opportunities our clients are facing.
This quarter we achieved the milestone of crossing the threshold of
a billion dollars in quarterly total revenue for the first
time."
Key Financial Results – Third Quarter 2021
- Total revenue was $1.02 billion,
up 9% year-over-year (8% on a constant currency
basis).1
- Revenue from Global Clients was $921
million, up 12%2 year-over-year (11% on a
constant currency basis)1,2 representing 91% of total
revenue, including $10 million of
revenue from certain GE-divested businesses that is now included in
Global Client revenue. Excluding the revenue from such GE-divested
businesses, revenue from Global Clients increased 10% year over
year (9% on a constant currency basis).1
- Revenue from GE was $95 million,
down 15% year-over-year, representing 9% of total revenue. This
excludes $10 million of revenue from
certain GE-divested businesses that is now included as Global
Client revenue. If the revenue from these GE-divested businesses
had been counted as GE revenue in the third quarter of 2021,
revenue from GE would have decreased 6% year-over-year.
- Net income was $102 million, up
20% year-over-year, with a corresponding margin of 10.1%.
- Income from operations was $132
million, up 6% year-over-year, with a corresponding margin
of 13.0%. Adjusted income from operations was $169 million, up 6% year-over-year, with a
corresponding margin of 16.6%.4
- Diluted earnings per share was $0.53, up 23% year-over-year, and adjusted
diluted earnings per share3 was $0.66, up 18% year-over-year.
- Cash generated from operations was $210
million, compared to $252
million during the third quarter of 2020.
_________________________________________
|
1 Revenue
growth on a constant currency basis is a non-GAAP measure and is
calculated by restating current-period activity using the prior
fiscal period's foreign currency exchange rates adjusted for
hedging gains/losses in such period.
|
2 Global
Client revenue for the third quarter of 2021 includes revenue from
certain businesses divested by GE that we continue to serve as
Global Clients. Revenue from such businesses has been counted
as Global Client revenue beginning January 1, 2021.
|
3 Adjusted
diluted earnings per share is a non-GAAP measure. A reconciliation
of GAAP diluted earnings per share to adjusted diluted earnings per
share is attached to this release.
|
Full Year 2021 Outlook
Genpact continues to expect:
- Total revenue for the full year of $3.96 to $4.0
billion, up 7.0% to 8.0%, or 5.5% to 6.5% on a constant
currency basis.1
- Global Client revenue growth in the range of 10.5% to 11.5%, or
9% to 10% on a constant currency basis.1
- Adjusted income from operations margin5 of
approximately 16.5%.
Genpact now expects:
- Adjusted diluted EPS6 of $2.40 to $2.43,
increased from the prior outlook of $2.36 to $2.39.
- Cash flow from operations of at least $550 million, increased from the prior outlook of
at least $500 million.
Conference Call to Discuss Financial Results
Genpact's management will host an hour-long conference call
beginning at 4:30 p.m. ET on
November 9, 2021 to discuss the
company's performance for the third quarter ended September 30, 2021. To participate, callers can
dial +1 (877) 654-0173 from within the U.S. or +1 (281) 973-6289
from any other country. Callers will be prompted to enter the
conference ID, 6837459. A live webcast of the call will also
be made available on the Genpact Investor Relations website at
https://www.genpact.com/investors. For those who cannot join the
call live, a replay will be archived on the Genpact website after
the end of the call. A transcript of the call will also be made
available on the website.
_______________________________
|
5 Adjusted income from operations
margin is a non-GAAP measure. A reconciliation of the outlook for
each of GAAP income from operations margin and GAAP net income
margin to adjusted income from operations margin is attached to
this release.
|
6Adjusted
diluted earnings per share is a non-GAAP measure. A reconciliation
of the outlook for GAAP diluted earnings per share to adjusted
diluted earnings per share is attached to this release.
|
About Genpact
Genpact (NYSE: G) is a global professional services firm that
makes business transformation real. Led by our purpose -- the
relentless pursuit of a world that works better for people -- we
drive digital-led innovation and digitally enabled intelligent
operations for our clients. Guided by our experience reinventing
and running thousands of processes for hundreds of clients, many of
them Global Fortune 500 companies, we drive real-world
transformation at scale. We think with design, dream in digital,
and solve problems with data and analytics. Combining our expertise
in end-to-end operations and our AI-based platform, Genpact Cora,
we focus on the details – all 90,000+ of us. From New York to New
Delhi, and more than 30 countries in between, we connect
every dot, reimagine every process, and reinvent the ways companies
work. We know that reimagining each step from start to finish
creates better business outcomes. Whatever it is, we'll be there
with you – accelerating digital transformation to create bold,
lasting results – because transformation happens here.
Safe Harbor
This press release contains certain statements concerning our
future growth prospects, including our outlook for 2021, financial
results and other forward-looking statements, as defined in the
safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. These statements involve a number of risks,
uncertainties and other factors that could cause actual results to
differ materially from those in such forward-looking statements.
These risks, uncertainties, and other factors include but are not
limited to the impact of the COVID-19 pandemic on our business and
on our employees, clients, partners and suppliers, a slowdown in
the economies and sectors in which our clients operate, a slowdown
in the business process outsourcing or information technology
services sectors, our ability to develop and successfully execute
our business strategies, the risks and uncertainties arising from
our past and future acquisitions, our ability to convert bookings
to revenues, our ability to manage growth, factors which may impact
our cost advantage, wage increases, changes in tax rates and tax
legislation and other laws and regulations, our ability to attract
and retain skilled professionals, risks and uncertainties regarding
fluctuations in our earnings, foreign currency fluctuations,
general economic conditions affecting our industry, political,
economic or business conditions in countries in which we operate,
including the withdrawal of the United
Kingdom from the European Union, commonly known as Brexit,
as well as other risks detailed in our reports filed with the U.S.
Securities and Exchange Commission, including Genpact's Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q. These
filings are available at www.sec.gov. Genpact may from time to time
make additional written and oral forward-looking statements,
including statements contained in our filings with the Securities
and Exchange Commission and our reports to shareholders. Although
Genpact believes that these forward-looking statements are based on
reasonable assumptions, you are cautioned not to put undue reliance
on these forward-looking statements, which reflect management's
current analysis of future events and should not be relied upon as
representing management's expectations or beliefs as of any date
subsequent to the time they are made. Genpact undertakes no
obligation to update any forward-looking statements that may be
made from time to time by or on behalf of Genpact.
Contacts
Investors
|
|
Roger Sachs,
CFA
|
|
|
+1 (203)
808-6725
|
|
|
roger.sachs@genpact.com
|
|
|
Media
|
|
Michael
Schneider
+1 (217)
260-5041
michael.schneider@genpact.com
|
GENPACT LIMITED
AND ITS SUBSIDIARIES
|
|
Consolidated
Balance Sheets
|
(Unaudited)
|
(In thousands,
except per share data and share count)
|
|
|
|
As of December 31,
2020
|
|
As of September
30, 2021
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
680,440
|
|
$
|
922,475
|
Accounts receivable,
net of allowance for credit losses of $27,707 and $29,527 as of
December 31, 2020 and September 30, 2021, respectively
|
|
881,020
|
|
951,171
|
Prepaid expenses and
other current assets
|
|
187,408
|
|
201,598
|
Total current
assets
|
$
|
1,748,868
|
|
$
|
2,075,244
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
231,122
|
|
207,920
|
Operating lease
right-of-use assets
|
|
304,714
|
|
273,587
|
Deferred tax
assets
|
|
106,674
|
|
108,871
|
Intangible assets,
net
|
|
236,732
|
|
171,008
|
Goodwill
|
|
1,695,688
|
|
1,685,684
|
Contract cost
assets
|
|
225,897
|
|
240,378
|
Other assets, net of
allowance for credit losses of $3,134 and $2,593 as of December 31,
2020 and September 30, 2021, respectively
|
|
323,818
|
|
286,439
|
Total
assets
|
$
|
4,873,513
|
|
$
|
5,049,131
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Short-term
borrowings
|
$
|
250,000
|
|
$
|
—
|
Current portion of
long-term debt
|
|
33,537
|
|
383,293
|
Accounts
payable
|
|
13,910
|
|
24,834
|
Income taxes
payable
|
|
41,941
|
|
110,019
|
Accrued expenses and
other current liabilities
|
|
806,769
|
|
735,980
|
Operating leases
liability
|
|
56,479
|
|
58,222
|
Total current
liabilities
|
$
|
1,202,636
|
|
$
|
1,312,348
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,307,371
|
|
1,280,571
|
Operating leases
liability
|
|
289,363
|
|
254,347
|
Deferred tax
liabilities
|
|
1,516
|
|
1,237
|
Other
liabilities
|
|
238,398
|
|
247,742
|
Total
liabilities
|
$
|
3,039,284
|
|
$
|
3,096,245
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Preferred shares,
$0.01 par value, 250,000,000 authorized, none issued
|
|
—
|
|
—
|
Common shares, $0.01
par value, 500,000,000 authorized, 189,045,661 and 188,056,571
issued and outstanding as of December 31, 2020 and September 30,
2021, respectively
|
|
1,885
|
|
1,876
|
Additional paid-in
capital
|
|
1,636,026
|
|
1,690,250
|
Retained
earnings
|
|
741,658
|
|
830,372
|
Accumulated other
comprehensive income (loss)
|
|
(545,340)
|
|
(569,612)
|
Total
equity
|
$
|
1,834,229
|
|
$
|
1,952,886
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
4,873,513
|
|
$
|
5,049,131
|
GENPACT LIMITED
AND ITS SUBSIDIARIES
|
|
Consolidated
Statements of Income
|
(Unaudited)
|
(In thousands,
except per share data and share count)
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September
30,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Net
revenues
|
|
$
|
935,523
|
|
|
|
$
|
1,015,737
|
|
|
$
|
2,758,809
|
|
|
$
|
2,949,934
|
|
Cost of
revenue
|
|
605,829
|
|
|
|
653,686
|
|
|
1,804,492
|
|
|
1,887,596
|
|
Gross
profit
|
|
$
|
329,694
|
|
|
|
$
|
362,051
|
|
|
$
|
954,317
|
|
|
$
|
1,062,338
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
198,335
|
|
|
|
215,957
|
|
|
581,989
|
|
|
620,857
|
|
Amortization of
acquired intangible assets
|
|
10,235
|
|
|
|
13,898
|
|
|
31,673
|
|
|
44,624
|
|
Other operating
(income) expense, net
|
|
(3,518)
|
|
|
|
(93)
|
|
|
14,991
|
|
|
(217)
|
|
Income from
operations
|
|
$
|
124,642
|
|
|
|
$
|
132,289
|
|
|
$
|
325,664
|
|
|
$
|
397,074
|
|
Foreign exchange
gains (losses), net
|
|
(2,402)
|
|
|
|
2,733
|
|
|
11,611
|
|
|
11,529
|
|
Interest income
(expense), net
|
|
(12,757)
|
|
|
|
(12,765)
|
|
|
(38,072)
|
|
|
(38,198)
|
|
Other income
(expense), net
|
|
960
|
|
|
|
1,480
|
|
|
946
|
|
|
8,966
|
|
Income before
income tax expense
|
|
$
|
110,443
|
|
|
|
$
|
123,737
|
|
|
$
|
300,149
|
|
|
$
|
379,371
|
|
Income tax
expense
|
|
25,008
|
|
|
|
21,351
|
|
|
66,855
|
|
|
83,008
|
|
Net
income
|
|
$
|
85,435
|
|
|
|
$
|
102,386
|
|
|
$
|
233,294
|
|
|
$
|
296,363
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.45
|
|
|
|
$
|
0.55
|
|
|
$
|
1.22
|
|
|
$
|
1.58
|
|
Diluted
|
|
$
|
0.43
|
|
|
|
$
|
0.53
|
|
|
$
|
1.19
|
|
|
$
|
1.54
|
|
Weighted average
number of common shares used in computing earnings per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
190,949,108
|
|
|
|
187,856,026
|
|
|
190,705,671
|
|
|
187,945,234
|
|
Diluted
|
|
196,655,140
|
|
|
|
193,159,929
|
|
|
196,100,067
|
|
|
192,885,252
|
|
GENPACT LIMITED
AND ITS SUBSIDIARIES
|
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Nine months ended
September 30,
|
|
|
|
2020
|
|
|
2021
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
233,294
|
|
|
|
$
|
296,363
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
88,273
|
|
|
|
|
82,344
|
|
|
Amortization of debt
issuance costs
|
|
|
1,685
|
|
|
|
|
1,969
|
|
|
Amortization of
acquired intangible assets
|
|
|
31,673
|
|
|
|
|
44,624
|
|
|
Write-down of
intangible assets and property, plant and equipment
|
|
|
10,647
|
|
|
|
|
915
|
|
|
Allowance for credit
losses
|
|
|
3,226
|
|
|
|
|
2,412
|
|
|
Unrealized loss
(gain) on revaluation of foreign currency
asset/liability
|
|
|
6,164
|
|
|
|
|
(4,252)
|
|
|
Stock-based
compensation expense
|
|
|
55,818
|
|
|
|
|
58,604
|
|
|
Deferred tax
benefit
|
|
|
(9,287)
|
|
|
|
|
(6,236)
|
|
|
Write-down of
operating lease right-of-use assets and other assets
|
|
|
10,244
|
|
|
|
|
—
|
|
|
Others,
net
|
|
|
(1,131)
|
|
|
|
|
806
|
|
|
Change in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
|
|
49,299
|
|
|
|
|
(78,626)
|
|
|
(Increase) decrease in
prepaid expenses, other current assets, contract cost assets,
operating lease right-of-use assets and other assets
|
|
|
(148,909)
|
|
|
|
|
43,071
|
|
|
Increase (decrease) in
accounts payable
|
|
|
(2,646)
|
|
|
|
|
11,138
|
|
|
Increase (decrease) in
accrued expenses, other current liabilities, operating lease
liabilities and other liabilities
|
|
|
44,830
|
|
|
|
|
(74,085)
|
|
|
Increase in income
taxes payable
|
|
|
52,033
|
|
|
|
|
68,430
|
|
|
Net cash provided
by operating activities
|
|
$
|
425,213
|
|
|
|
$
|
447,477
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
|
(47,932)
|
|
|
|
|
(31,385)
|
|
|
Payment for
internally generated intangible assets (including intangibles under
development)
|
|
|
(8,391)
|
|
|
|
|
(3,907)
|
|
|
Proceeds and recovery
from sale of property, plant and equipment and intangible
assets
|
|
|
447
|
|
|
|
|
4,511
|
|
|
Payment for business
acquisitions, net of cash acquired
|
|
|
—
|
|
|
|
|
(6,613)
|
|
|
Proceeds from sale of
investment
|
|
|
—
|
|
|
|
|
142
|
|
|
Net cash (used
for) investing activities
|
|
$
|
(55,876)
|
|
|
|
$
|
(37,252)
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Repayment of finance
lease obligations
|
|
|
(7,240)
|
|
|
|
|
(8,659)
|
|
|
Payment of debt
issuance costs
|
|
|
(620)
|
|
|
|
|
(3,018)
|
|
|
Proceeds from
long-term debt
|
|
|
—
|
|
|
|
|
350,000
|
|
|
Repayment of
long-term debt
|
|
|
(25,500)
|
|
|
|
|
(25,500)
|
|
|
Proceeds from
short-term borrowings
|
|
|
455,000
|
|
|
|
|
—
|
|
|
Repayment of
short-term borrowings
|
|
|
(280,000)
|
|
|
|
|
(250,000)
|
|
|
Proceeds from
issuance of common shares under stock-based compensation
plans
|
|
|
19,261
|
|
|
|
|
29,786
|
|
|
Payment for net
settlement of stock-based awards
|
|
|
(33,157)
|
|
|
|
|
(33,467)
|
|
|
Payment of earn-out
consideration
|
|
|
—
|
|
|
|
|
(2,556)
|
|
|
Dividend
paid
|
|
|
(55,775)
|
|
|
|
|
(60,461)
|
|
|
Payment for stock
repurchased and retired (including expenses related to stock
repurchase)
|
|
|
(73,588)
|
|
|
|
|
(147,224)
|
|
|
Others
|
|
|
—
|
|
|
|
|
(6)
|
|
|
Net cash (used
for) financing activities
|
|
$
|
(1,619)
|
|
|
|
$
|
(151,105)
|
|
|
Effect of exchange
rate changes
|
|
|
(31,415)
|
|
|
|
|
(17,085)
|
|
|
Net increase in cash
and cash equivalents
|
|
|
367,718
|
|
|
|
|
259,120
|
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
467,096
|
|
|
|
|
680,440
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
803,399
|
|
|
|
$
|
922,475
|
|
|
Supplementary
information
|
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
|
28,160
|
|
|
|
$
|
25,715
|
|
|
Cash paid during the
period for income taxes, net of refund
|
|
$
|
131,456
|
|
|
|
$
|
38,040
|
|
|
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented
in accordance with GAAP, this press release includes the following
non-GAAP financial measures:
- Adjusted income from operations;
- Adjusted income from operations margin;
- Adjusted diluted earnings per share; and
- Revenue growth on a constant currency basis.
These non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles and should not
be considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and may be different from
non-GAAP financial measures used by other companies. Accordingly,
these non-GAAP financial measures, the financial statements
prepared in accordance with GAAP and the reconciliations of
Genpact's GAAP financial statements to such non-GAAP financial
measures should be carefully evaluated.
Prior to July 2012, Genpact's
management used financial statements that excluded significant
acquisition-related expenses, amortization of related acquired
intangibles, and amortization of acquired intangibles recorded at
the company's formation in 2004 for its internal management
reporting, budgeting and decision-making purposes, including
comparing Genpact's operating results to that of its competitors.
However, considering Genpact's acquisitions of varying scale and
size, and the difficulty in predicting expenses relating to
acquisitions and the amortization of acquired intangibles thereof,
since July 2012 Genpact's management
has used financial statements that exclude all acquisition-related
expenses and amortization of acquired intangibles for its internal
management reporting, budgeting and decision-making purposes,
including comparing Genpact's operating results to those of its
competitors. For the same reasons, since April 2016 Genpact's management has excluded the
impairment of acquired intangible assets from the financial
statements it uses for internal management purposes.
Acquisition-related expenses are excluded in the period in which an
acquisition is consummated.
Genpact's management also uses financial statements that
exclude stock-based compensation expense. Because of varying
available valuation methodologies, subjective assumptions and the
variety of award types that companies can use when adopting ASC 718
"Compensation-Stock Compensation," Genpact's management believes
that providing non-GAAP financial measures that exclude such
expenses allows investors to make additional comparisons between
Genpact's operating results and those of other companies. As a
result of the COVID-19 pandemic, during the second and third
quarters of 2020 the Company initiated several restructuring
measures. In connection with the restructuring, the Company
recorded non-recurring charges related to the following: i)
right-of-use lease assets and other assets related to certain
abandoned leased office properties in the second quarter of 2020
and ii) employee severance costs related to a focused reduction in
Genpact's workforce in the second and third quarters of 2020.
Genpact's management believes that excluding such charges provides
useful information to both management and investors regarding the
Company's financial performance and underlying business trends.
Additionally, in its calculations of non-GAAP financial measures,
Genpact's management has adjusted foreign exchange gains and
losses, interest income and expense and income tax expenses from
GAAP net income, and other income and expenses, and certain gains,
losses and impairment charges attributable to equity-method
investments from GAAP income from operations, because management
believes that the Company's results after taking into account these
adjustments more accurately reflect the Company's ongoing
operations. In its calculations of adjusted diluted earnings per
share, Genpact's management adds back adjusted stock-based
compensation expense, amortization and impairment of acquired
intangible assets, acquisition-related expenses and restructuring
expenses and the related tax impact of such adjustments from GAAP
diluted earnings per share. For the purpose of calculating adjusted
diluted earnings per share, the combined current and deferred tax
effect is determined by multiplying each pre-tax adjustment by the
applicable statutory income tax rate.
Genpact's management provides information about revenues on a
constant currency basis so that the revenues may be viewed without
the impact of foreign currency exchange rate fluctuations compared
to prior fiscal periods, thereby facilitating period-to-period
comparisons of the Company's true business performance. Revenue
growth on a constant currency basis is calculated by restating
current-period activity using the prior fiscal period's foreign
currency exchange rates adjusted for hedging gains/losses in such
period.
Accordingly, Genpact believes that the presentation of
adjusted income from operations, adjusted income from operations
margin, adjusted diluted earnings per share and revenue growth on a
constant currency basis, when read in conjunction with the
Company's reported results, can provide useful supplemental
information to investors and management regarding financial and
business trends relating to its financial condition and results of
operations.
A limitation of using adjusted income from operations and
adjusted income from operations margin versus income from
operations, income from operations margin, net income and net
income margin calculated in accordance with GAAP is that these
non-GAAP financial measures exclude certain recurring costs and
certain other charges, namely stock-based compensation expense and
amortization and impairment of acquired intangible assets.
Management compensates for this limitation by providing specific
information on the GAAP amounts excluded from adjusted income from
operations and adjusted income from operations margin.
The following tables show the reconciliation of these non-GAAP
financial measures to the most directly comparable GAAP measures
for the three and nine months ended September 30, 2020 and 2021:
Reconciliation of
Net Income/Margin to Adjusted Income from
Operations/Margin
|
(In
thousands)
|
|
|
Three
months ended September 30,
|
|
Nine
months ended September 30,
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Net income
|
$
|
85,435
|
|
$
|
102,386
|
|
$
|
233,294
|
|
$
|
296,363
|
Foreign exchange
(gains) losses, net
|
2,402
|
|
(2,733)
|
|
(11,611)
|
|
(11,529)
|
Interest (income)
expense, net
|
12,757
|
|
12,765
|
|
38,072
|
|
38,198
|
Income tax
expense
|
25,008
|
|
21,351
|
|
66,855
|
|
83,008
|
Stock-based
compensation expense
|
19,487
|
|
21,485
|
|
55,818
|
|
58,604
|
Amortization and
impairment of acquired intangible assets
|
9,995
|
|
13,688
|
|
32,218
|
|
43,977
|
Restructuring
expenses
|
4,889
|
|
—
|
|
26,547
|
|
—
|
Adjusted income from
operations
|
$
|
159,973
|
|
$
|
168,942
|
|
$
|
441,193
|
|
$
|
508,621
|
Net income
margin
|
9.1%
|
|
10.1%
|
|
8.5%
|
|
10.0%
|
Adjusted income from
operations margin
|
17.1%
|
|
16.6%
|
|
16.0%
|
|
17.2%
|
Reconciliation of
Income from Operations/Margin to Adjusted Income from
Operations/Margin
|
(In
thousands)
|
|
|
Three
months ended September 30,
|
|
Nine
months ended September 30,
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Income from
operations
|
$
|
124,642
|
|
$
|
132,289
|
|
$
|
325,664
|
|
$
|
397,074
|
Stock-based
compensation expense
|
19,487
|
|
21,485
|
|
55,818
|
|
58,604
|
Amortization and
impairment of acquired intangible assets
|
9,995
|
|
13,688
|
|
32,218
|
|
43,977
|
Other income
(expense), net
|
960
|
|
1,480
|
|
946
|
|
8,966
|
Restructuring
expenses
|
4,889
|
|
—
|
|
26,547
|
|
—
|
Adjusted income from
operations
|
$
|
159,973
|
|
$
|
168,942
|
|
$
|
441,193
|
|
$
|
508,621
|
Income from operations
margin
|
13.3%
|
|
13.0%
|
|
11.8%
|
|
13.5%
|
Adjusted income from
operations margin
|
17.1%
|
|
16.6%
|
|
16.0%
|
|
17.2%
|
Reconciliation of
Diluted EPS to Adjusted Diluted EPS7
|
(Per share
data)
|
|
|
Three
months ended September 30,
|
|
Nine months ended
September 30,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
Diluted EPS
|
$
|
0.43
|
|
$
|
0.53
|
|
$
|
1.19
|
|
|
$
|
1.54
|
|
|
Stock-based
compensation expense
|
0.10
|
|
0.11
|
|
0.28
|
|
0.30
|
|
Amortization and
impairment of acquired intangible assets
|
0.05
|
|
0.07
|
|
0.16
|
|
0.23
|
|
Restructuring
expenses
|
0.02
|
|
—
|
|
0.14
|
|
—
|
|
Tax impact on
stock-based compensation expense
|
(0.03)
|
|
(0.03)
|
|
(0.08)
|
|
(0.10)
|
|
Tax impact on
amortization and impairment of acquired intangible
assets
|
(0.01)
|
|
(0.02)
|
|
(0.04)
|
|
(0.06)
|
|
Tax impact on
restructuring expenses
|
(0.01)
|
|
—
|
|
(0.03)
|
|
—
|
|
Adjusted diluted
EPS
|
$
|
0.56
|
|
$
|
0.66
|
|
$
|
1.61
|
|
$
|
1.91
|
|
_________________________________
|
7 Due to
rounding, the numbers presented in this table may not add up
precisely to the totals provided.
|
The following tables show the reconciliation of forward-looking
non-GAAP financial measures to the most directly comparable GAAP
measures for the year ending December 31,
2021:
Reconciliation of
Outlook for Net Income Margin to Adjusted Income from Operations
Margin8
|
|
|
|
Year ending
December 31, 2021
|
|
Net income
margin
|
|
|
9.3
|
%
|
Estimated foreign
exchange (gains) losses, net
|
|
|
(0.3)
|
%
|
Estimated interest
(income) expense, net
|
|
|
1.3
|
%
|
Estimated income tax
expense
|
|
|
2.8
|
%
|
Estimated stock-based
compensation expense
|
|
|
2.0
|
%
|
Estimated amortization
and impairment of acquired intangible assets
|
|
|
1.4
|
%
|
Adjusted income
from operations margin
|
|
|
16.5
|
%
|
Reconciliation of
Outlook for Income from Operations Margin to Adjusted Income
from Operations Margin8
|
|
|
|
Year ending
December 31, 2021
|
|
Income from
operations margin
|
|
12.8
|
%
|
Estimated stock-based
compensation expense
|
|
2.0
|
%
|
Estimated amortization
and impairment of acquired intangible assets
|
|
1.4
|
%
|
Estimated other income
(expense), net
|
|
0.2
|
%
|
Adjusted income
from operations margin
|
|
16.5
|
%
|
Reconciliation of
Outlook for Diluted EPS to Adjusted Diluted
EPS8
|
(Per share
data)
|
|
|
|
Year ending
December 31, 2021
|
|
|
|
Lower
|
|
|
Upper
|
|
Diluted
EPS
|
|
$
|
1.89
|
|
|
$
|
1.92
|
|
Estimated stock-based
compensation expense
|
|
|
0.42
|
|
|
|
0.42
|
|
Estimated amortization
and impairment of acquired intangible assets
|
|
|
0.30
|
|
|
|
0.30
|
|
Estimated tax impact
on stock-based compensation expense
|
|
|
(0.13)
|
|
|
|
(0.13)
|
|
Estimated tax impact
on amortization and impairment of acquired intangible
assets
|
|
|
(0.08)
|
|
|
|
(0.08)
|
|
Adjusted diluted
EPS
|
|
$
|
2.40
|
|
|
$
|
2.43
|
|
___________________________________________
|
8 Due to
rounding, the numbers presented in this table may not add up
precisely to the totals provided.
|
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SOURCE Genpact