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, Derivatives and Hedging, and are with counterparties that are highly rated financial institutions. For derivatives in cash flow hedging relationships as of June 30, 2023 and December 31, 2022, the Company had outstanding foreign currency forward contracts totaling $831,250 and $841,620, respectively and interest rate swaps totaling $75,000, each.

The Company estimates that approximately $1,578 of derivative gains, net, excluding tax effects, included in AOCI, representing changes in the value of cash flow hedges based on exchange rates prevailing as of June 30, 2023, could be reclassified into earnings within the next twelve months. As of June 30, 2023, the maximum outstanding term of the cash flow hedges was approximately 39 months.

The Company also enters into foreign currency forward contracts to 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, Derivatives and Hedging. 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 Philippine peso and the U.K. pound sterling (GBP). The Company also has exposure to Colombian pesos (COP), the Euro (EUR), South African ZAR, the Australian dollar (AUD), the Canadian dollar (CAD) and other local currencies in which it operates.


	As of
Foreign currency forward contracts denominated in:	June 30, 2023	December 31, 2022
U. S. dollar (USD)	165,793	163,990
U.K. pound sterling (GBP)	11,235	8,351
Euro (EUR)	3,947	1,956
Australian dollar (AUD)	4,471	1,951
South African ZAR	102,249	—
Colombian peso (COP)	2,449,676	—


	Derivatives in cash flow hedging relationships				Derivatives not designated as hedging instruments
	As of				As of
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Assets:
Other current assets	$	4,775	$	1,271	$	287	$	255
Other assets	$	5,238	$	820	$	—	$	—
Liabilities:
Accrued expenses and other current liabilities	$	3,197	$	10,044	$	98	$	15
Other non-current liabilities	$	613	$	6,218	$	—	$	—


	Three months ended June 30,				Six months ended June 30,
Derivative financial instruments:	2023		2022		2023		2022
Unrealized gain/(loss) recognized in AOCI
Derivatives in cash flow hedging relationships	$	8,851	$	(14,632)	$	16,145	$	(15,149)

Gain/(loss) recognized in unaudited consolidated statements of income
Derivatives not designated as hedging instruments	$	(370)	$	(5,457)	$	2,158	$	(6,356)

The following table sets forth the 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 June 30,
	2023				2022
	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
Derivatives in cash flow hedging relationships
Location in unaudited consolidated statements of income where gain/(loss) was reclassified from AOCI

Cost of revenues	$	253,220	$	(1,141)	$	221,207	$	1,194
General and administrative expenses	$	45,605	(133)		$	40,434	181
Selling and marketing expenses	$	28,238	(13)		$	23,985	15
Depreciation and amortization expense	$	13,122	(43)		$	14,075	69
Interest expense	$	3,240	166		$	1,502	—
Total before tax			(1,164)				1,459
Income tax effects on above			231				(420)
Net of tax			$	(933)			$	1,039

Derivatives not designated as hedging instruments
Location in unaudited consolidated statements of income where gain/(loss) was recognized

Foreign exchange gain/(loss), net	$	324	$	(370)	$	1,423	$	(5,457)
	$	324	$	(370)	$	1,423	$	(5,457)


	Six months ended June 30,
	2023				2022
	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
Derivatives in cash flow hedging relationships
Location in unaudited consolidated statements of income where gain/(loss) was reclassified from AOCI

Cost of revenues	$	504,689	$	(3,896)	$	428,723	$	2,777
General and administrative expenses	$	92,351	(375)		$	80,379	475
Selling and marketing expenses	$	57,731	(32)		$	48,155	29
Depreciation and amortization expense	$	26,609	(166)		$	27,677	167
Interest expense	$	6,625	240		$	2,378	—
Total before tax			(4,229)				3,448
Income tax effects on above			765				(935)
Net of tax			$	(3,464)			$	2,513

Derivatives not designated as hedging instruments
Location in unaudited consolidated statements of income where gain/(loss) was recognized

Foreign exchange gain/(loss), net	$	429	$	2,158	$	3,179	$	(6,356)
	$	429	$	2,158	$	3,179	$	(6,356)