v3.25.0.1
Derivatives and Hedge Accounting
 12 Months Ended
Dec. 31, 2024
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, Derivatives and Hedging, and are with counterparties that are highly rated financial institutions.

The following table sets forth the aggregate notional amount of derivatives in cash flow hedging relationship:
As of
December 31, 2024December 31, 2023
Foreign currency forward contracts denominated in:
Sell U.S. dollar (USD)984,300 722,800 
Interest rate swaps (Floating to fixed) denominated in:
USD— 75,000 

The Company estimates that approximately $5,693 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 December 31, 2024, could be reclassified into earnings within the next twelve months. As of December 31, 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 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 aggregate notional principal amounts of outstanding foreign currency forward contracts for derivatives not designated as hedging instruments:
As of
Foreign currency forward contracts denominated in:December 31, 2024December 31, 2023
Sell USD179,491 170,543 
Sell GBP20,956 14,544 
Sell EUR9,008 5,231 
Sell AUD4,770 3,452 
Sell ZAR10,006 150,150 
Buy USD588 — 
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
December 31, 2024December 31, 2023December 31, 2024December 31, 2023
Assets:
Other current assets$1,711 $4,216 $262 $92 
Other assets$852 $3,299 $— $— 
Liabilities:
Accrued expenses and other current liabilities$7,404 $1,859 $50 $150 
Other non-current liabilities$4,363 $216 $— $— 
The following table sets forth the effect of foreign currency forward contracts and interest rate swaps on AOCI and the consolidated statements of income:
Year ended December 31,
Derivative financial instruments:202420232022
Unrealized gain/(loss) recognized in OCI
Derivatives in cash flow hedging relationships$(14,513)$14,403 $(27,333)
Gain/(loss) recognized in consolidated statements of income
Derivatives not designated as hedging instruments$(3,110)$296 $(9,571)
The following table sets forth the location and amount of gain/(loss) recognized in consolidated statements of income for derivatives in cash flow hedging relationships and derivatives not designated as hedging instruments:
Year ended December 31,
202420232022
As per consolidated statements of incomeGain/(loss) on derivative financial instrumentsAs per consolidated statements of incomeGain/(loss) on derivative financial instrumentsAs per consolidated statements of incomeGain/(loss) on derivative financial instruments
Derivatives in cash flow hedging relationships
Location in consolidated statements of income where gain/(loss) was reclassified from AOCI
Cost of revenues$1,147,359 $(722)$1,022,902 $(5,180)$896,595 $(1,304)
General and administrative expenses$225,672 110 $198,294 (454)$169,016 141 
Selling and marketing expenses$146,502 18 $120,227 (40)$97,989 10 
Depreciation and amortization expense$55,219 2 $50,490 (236)$56,282 (32)
Interest expense$19,256 723 $13,180 702 $8,252 (110)
Total before tax131 (5,208)(1,295)
Income tax effects on above(339)797 (455)
Net of tax$(208)$(4,411)$(1,750)
Derivatives not designated as hedging instruments
Location in consolidated statements of income where gain/(loss) was recognized
Foreign exchange gain/(loss), net$891 $(3,110)$1,532 $296 $6,199 $(9,571)