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.


	As of
	June 30, 2024	December 31, 2023
Foreign currency forward contracts denominated in:
Sell U. S. dollar (USD)	832,900	722,800
Sell U.K. pound sterling (GBP)	1,500	—

Interest rate swaps (Floating to fixed) denominated in:
USD	75,000	75,000

The Company estimates that approximately $953 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, 2024, could be reclassified into earnings within the next twelve months. As of June 30, 2024, the maximum outstanding term of the cash flow hedges was approximately 45 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 (INR), the Philippine peso (PHP), the U.K. pound sterling (GBP) and South African rand (ZAR). The Company also has exposure to the Colombian peso (COP), the Euro (EUR), the Australian dollar (AUD), the Canadian dollar (CAD) and other local currencies in which it operates.

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 relationships				Derivatives not designated as hedging instruments
	As of				As of
	June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023
Assets:
Other current assets	$	5,925	$	4,216	$	307	$	92
Other assets	$	4,166	$	3,299	$	—	$	—
Liabilities:
Accrued expenses and other current liabilities	$	4,972	$	1,859	$	181	$	150
Other non-current liabilities	$	2,487	$	216	$	—	$	—


	Three months ended June 30,				Six months ended June 30,
Derivative financial instruments:	2024		2023		2024		2023
Unrealized gain/(loss) recognized in OCI
Derivatives in cash flow hedging relationships	$	(2,778)	$	8,851	$	(2,840)	$	16,145

Gain/(loss) recognized in unaudited consolidated statements of income
Derivatives not designated as hedging instruments	$	(2,113)	$	(370)	$	(2,073)	$	2,158

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,
	2024				2023
	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	$	282,106	$	(732)	$	253,220	$	(1,141)
General and administrative expenses	$	56,457	40		$	45,605	(133)
Selling and marketing expenses	$	35,444	10		$	28,238	(13)
Depreciation and amortization expense	$	12,910	(34)		$	13,122	(43)
Interest expense	$	5,328	241		$	3,240	166
Total before tax			(475)				(1,164)
Income tax effects on above			(207)				231
Net of tax			$	(682)			$	(933)

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

Foreign exchange gain/(loss), net	$	36	$	(2,113)	$	324	$	(370)
	$	36	$	(2,113)	$	324	$	(370)


	Six months ended June 30,
	2024				2023
	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	$	555,530	$	(582)	$	504,689	$	(3,896)
General and administrative expenses	$	109,700	79		$	92,351	(375)
Selling and marketing expenses	$	71,414	14		$	57,731	(32)
Depreciation and amortization expense	$	25,256	(26)		$	26,609	(166)
Interest expense	$	8,619	483		$	6,625	240
Total before tax			(32)				(4,229)
Income tax effects on above			(309)				765
Net of tax			$	(341)			$	(3,464)

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

Foreign exchange gain/(loss), net	$	395	$	(2,073)	$	429	$	2,158
	$	395	$	(2,073)	$	429	$	2,158