NEW YORK, Nov. 2, 2020 /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, 2020.
"Our better-than-expected third quarter results continue to
demonstrate the resiliency of our business, providing essential,
non-discretionary services and solutions. We are partnering even
more closely with our clients to reimagine and transform their
business models in the new normal, driving growth in our digital
Transformation Services," said "Tiger" Tyagarajan, Genpact's
president and CEO. "We continue to invest in capabilities in
the growing experience economy, including our recent acquisition of
Something Digital that builds on our ability to deliver end-to-end
digital commerce solutions at scale, with customer experience being
front and center."
Key Financial Results – Third Quarter 2020
- Total revenue was $936 million,
up 5% year-over-year, both on an as reported and constant currency
basis.2
- Revenue from Global Clients was $824
million, up 7% year-over-year, both on an as reported
and constant currency basis2, representing 88% of total
revenue.
- Revenue from GE was $111 million,
down 8% year-over-year, representing 12% of total revenue.
- Net income was $85 million, down
3% year-over-year, with a corresponding margin of 9.1%.
- Income from operations was $125
million, up 10% year-over-year, with a corresponding margin
of 13.3%. Adjusted income from operations was
$160 million, up 12% year-over-year,
with a corresponding margin of 17.1%.3
- Diluted earnings per share was $0.43, down 4% year-over-year, and adjusted
diluted earnings per share4 was $0.56, flat year-over-year.
- Income from operations and diluted earnings per share include a
$5 million restructuring charge
related to employee severance costs. This restructuring charge is
excluded from adjusted income from operations3 and
adjusted diluted earnings per share.4
- Cash generated from operations was $252
million, up 14% year-over-year, compared to $220 million in the third quarter of 2019.
- Genpact repurchased approximately 740,000 of its common shares
during the quarter for total consideration of approximately
$29 million at an average price per
share of $38.59.
2020 Outlook
Genpact now expects:
- Total revenue for the full year of $3.68 to $3.695
billion, up 4.5% to 5.0% or 5% to 5.5% on a constant
currency basis, increased from the prior outlook of $3.63 to $3.67
billion, up 3% to 4% or 3.5% to 5% on a constant currency
basis.2
- Global Client revenue growth in the range of 6.0% to 6.5%, or
6.5% to 7.0% on a constant currency basis, increased from the prior
outlook of 5% to 6%, or 5% to 6.5% on a constant currency
basis.2
- Adjusted income from operations margin5 of
approximately 15.7%, increased from the prior outlook of
approximately 15.5%.
- Adjusted diluted EPS6 of $2.08 to $2.11,
increased from the prior outlook of $2.03 to $2.07.
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 2, 2020 to discuss the
company's performance for the third quarter ended September 30, 2020. 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, 9573522.
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.
About Genpact
Genpact (NYSE: G) is a global professional services firm that
makes business transformation real. We drive digital-led innovation
and digitally-enabled intelligent operations for our clients,
guided by our experience running thousands of processes
primarily for Global Fortune 500 companies. 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 companies' ways of working. 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 and 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, the health and
safety of our employees, clients, partners and suppliers, as well
as the physical and economic impacts of actions taken by local and
national governmental agencies in response to the pandemic, 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
uncertainty relating to 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,
|
|
|
As of September
30,
|
|
|
|
2019
|
|
|
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
467,096
|
|
|
$
|
803,399
|
|
Accounts receivable,
net of reserve for doubtful receivables of $29,969 and
allowance for credit losses of $25,552 as of December 31, 2019 and
September 30, 2020, respectively
|
|
|
914,255
|
|
|
|
859,070
|
|
Prepaid expenses and
other current assets
|
|
|
170,325
|
|
|
|
216,244
|
|
Total current
assets
|
|
$
|
1,551,676
|
|
|
$
|
1,878,713
|
|
Property, plant and
equipment, net
|
|
|
254,035
|
|
|
|
237,473
|
|
Operating lease
right-of-use assets
|
|
|
330,854
|
|
|
|
331,149
|
|
Deferred tax
assets
|
|
|
89,715
|
|
|
|
105,160
|
|
Intangible assets,
net
|
|
|
230,861
|
|
|
|
176,908
|
|
Goodwill
|
|
|
1,574,466
|
|
|
|
1,567,603
|
|
Contract cost
assets
|
|
|
205,498
|
|
|
|
211,794
|
|
Other assets, net of
reserve for doubtful assets of $0 and allowance for credit losses
of $2,566 as of December 31, 2019 and September 30, 2020,
respectively
|
|
217,079
|
|
|
|
294,838
|
|
Total
assets
|
|
$
|
4,454,184
|
|
|
$
|
4,803,638
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
70,000
|
|
|
$
|
245,000
|
|
Current portion of
long-term debt
|
|
|
33,509
|
|
|
|
33,530
|
|
Accounts
payable
|
|
|
21,981
|
|
|
|
30,754
|
|
Income taxes
payable
|
|
|
43,186
|
|
|
|
94,744
|
|
Accrued expenses and
other current liabilities
|
|
|
683,871
|
|
|
|
677,430
|
|
Operating leases
liability
|
|
|
57,664
|
|
|
|
65,192
|
|
Total current
liabilities
|
|
$
|
910,211
|
|
|
$
|
1,146,650
|
|
Long-term debt, less
current portion
|
|
|
1,339,796
|
|
|
|
1,315,477
|
|
Operating leases
liability
|
|
|
302,100
|
|
|
|
305,074
|
|
Deferred tax
liabilities
|
|
|
3,990
|
|
|
|
3,236
|
|
Other
liabilities
|
|
|
208,916
|
|
|
|
256,021
|
|
Total
liabilities
|
|
$
|
2,765,013
|
|
|
$
|
3,026,458
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
Preferred shares,
$0.01 par value, 250,000,000 authorized, none issued
|
|
—
|
|
|
—
|
|
Common shares, $0.01
par value, 500,000,000 authorized, 190,118,181 and 190,403,947 issued and outstanding as
of December 31, 2019 and
September 30, 2020, respectively
|
|
|
1,896
|
|
|
|
1,900
|
|
Additional paid-in
capital
|
|
|
1,570,575
|
|
|
|
1,612,084
|
|
Retained
earnings
|
|
|
648,656
|
|
|
|
748,621
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(531,956)
|
|
|
|
(585,425)
|
|
Total
equity
|
|
$
|
1,689,171
|
|
|
$
|
1,777,180
|
|
Total liabilities
and equity
|
|
$
|
4,454,184
|
|
|
$
|
4,803,638
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
Net
revenues
|
|
$
|
888,799
|
|
|
$
|
935,523
|
|
|
$
|
2,579,804
|
|
|
$
|
2,758,809
|
|
Cost of
revenue
|
|
|
573,659
|
|
|
|
605,829
|
|
|
|
1,664,040
|
|
|
|
1,804,492
|
|
Gross
profit
|
|
$
|
315,140
|
|
|
$
|
329,694
|
|
|
$
|
915,764
|
|
|
$
|
954,317
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
194,537
|
|
|
|
198,335
|
|
|
|
582,251
|
|
|
|
581,989
|
|
Amortization of
acquired intangible assets
|
|
|
6,960
|
|
|
|
10,235
|
|
|
|
23,565
|
|
|
|
31,673
|
|
Other operating
(income) expense, net
|
|
|
59
|
|
|
|
(3,518)
|
|
|
|
90
|
|
|
|
14,991
|
|
Income from
operations
|
|
$
|
113,584
|
|
|
$
|
124,642
|
|
|
$
|
309,858
|
|
|
$
|
325,664
|
|
Foreign exchange
gains (losses), net
|
|
|
6,727
|
|
|
|
(2,402)
|
|
|
|
3,646
|
|
|
|
11,611
|
|
Interest income
(expense), net
|
|
|
(10,221)
|
|
|
|
(12,757)
|
|
|
|
(33,487)
|
|
|
|
(38,072)
|
|
Other income
(expense), net
|
|
|
704
|
|
|
|
960
|
|
|
|
5,067
|
|
|
|
946
|
|
Income before
equity-method investment activity, net and income tax
expense
|
|
$
|
110,794
|
|
|
$
|
110,443
|
|
|
$
|
285,084
|
|
|
$
|
300,149
|
|
Equity-method
investment activity, net
|
|
|
(5)
|
|
|
|
-
|
|
|
|
(16)
|
|
|
|
—
|
|
Income before
income tax expense
|
|
$
|
110,789
|
|
|
$
|
110,443
|
|
|
$
|
285,068
|
|
|
$
|
300,149
|
|
Income tax
expense
|
|
|
22,669
|
|
|
|
25,008
|
|
|
|
62,385
|
|
|
|
66,855
|
|
Net
income
|
|
$
|
88,120
|
|
|
$
|
85,435
|
|
|
$
|
222,683
|
|
|
$
|
233,294
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.46
|
|
|
$
|
0.45
|
|
|
$
|
1.17
|
|
|
$
|
1.22
|
|
Diluted
|
|
$
|
0.45
|
|
|
$
|
0.43
|
|
|
$
|
1.14
|
|
|
$
|
1.19
|
|
Weighted average
number of common shares used in computing earnings per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
190,599,049
|
|
|
|
190,949,108
|
|
|
|
190,071,418
|
|
|
|
190,705,671
|
|
Diluted
|
|
|
195,890,841
|
|
|
|
196,655,140
|
|
|
|
194,683,699
|
|
|
|
196,100,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENPACT LIMITED
AND ITS SUBSIDIARIES
Consolidated
Statements of Cash Flows
(Unaudited)
(In
thousands)
|
|
|
|
Nine months ended
September 30,
|
|
|
|
2019
|
|
|
2020
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
222,683
|
|
|
$
|
233,294
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
70,234
|
|
|
|
88,273
|
|
Amortization of debt
issuance costs (including loss on extinguishment of
debt)
|
|
|
1,288
|
|
|
|
1,685
|
|
Amortization of
acquired intangible assets
|
|
|
23,565
|
|
|
|
31,673
|
|
Write-down of
intangible assets and property, plant and equipment
|
|
|
3,511
|
|
|
|
10,647
|
|
Reserve for doubtful
receivables/allowance for credit losses
|
|
|
7,169
|
|
|
|
3,226
|
|
Unrealized loss
(gain) on revaluation of foreign currency
asset/liability
|
|
|
(4,862)
|
|
|
|
6,164
|
|
Stock-based
compensation expense
|
|
|
61,307
|
|
|
|
55,818
|
|
Deferred income
taxes
|
|
|
(6,946)
|
|
|
|
(9,287)
|
|
Write-down of
operating lease right-of-use assets and other assets
|
|
|
-
|
|
|
|
10,244
|
|
Others,
net
|
|
|
(2,605)
|
|
|
|
(1,131)
|
|
Change in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
|
|
(97,269)
|
|
|
|
49,299
|
|
Increase in prepaid
expenses, other current assets, contract cost assets, operating
lease right-of-use assets and other assets
|
|
|
(87,064)
|
|
|
|
(148,909)
|
|
Decrease in accounts
payable
|
|
|
(20,670)
|
|
|
|
(2,646)
|
|
Increase in accrued
expenses, other current liabilities, operating leases liability and
other liabilities
|
|
|
122,411
|
|
|
|
44,830
|
|
Increase in income
taxes payable
|
|
|
48,567
|
|
|
|
52,033
|
|
Net cash provided
by operating activities
|
|
$
|
341,319
|
|
|
$
|
425,213
|
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
|
(55,071)
|
|
|
|
(47,932)
|
|
Payment for
internally generated intangible assets (including intangibles under
development)
|
|
|
(26,261)
|
|
|
|
(8,391)
|
|
Proceeds from sale of
property, plant and equipment
|
|
|
1,621
|
|
|
|
447
|
|
Payment for business
acquisitions, net of cash acquired
|
|
|
(6,305)
|
|
|
|
-
|
|
Net cash used for
investing activities
|
|
$
|
(86,016)
|
|
|
$
|
(55,876)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Repayment of finance
lease obligations
|
|
|
(6,256)
|
|
|
|
(7,240)
|
|
Payment of debt
issuance costs
|
|
|
-
|
|
|
|
(620)
|
|
Repayment of
long-term debt
|
|
|
(25,500)
|
|
|
|
(25,500)
|
|
Proceeds from
short-term borrowings
|
|
|
50,000
|
|
|
|
455,000
|
|
Repayment of
short-term borrowings
|
|
|
(100,000)
|
|
|
|
(280,000)
|
|
Proceeds from
issuance of common shares under stock-based compensation
plans
|
|
|
15,949
|
|
|
|
19,261
|
|
Payment for net
settlement of stock-based awards
|
|
|
(3,177)
|
|
|
|
(33,157)
|
|
Payment of earn-out
consideration
|
|
|
(12,790)
|
|
|
|
-
|
|
Dividend
paid
|
|
|
(48,515)
|
|
|
|
(55,775)
|
|
Payment for stock
repurchased and retired (including expenses related to stock
repurchase)
|
|
|
(23,913)
|
|
|
|
(73,588)
|
|
Net cash used for
financing activities
|
|
$
|
(154,202)
|
|
|
$
|
(1,619)
|
|
Effect of exchange
rate changes
|
|
|
(12,625)
|
|
|
|
(31,415)
|
|
Net increase in cash
and cash equivalents
|
|
|
101,101
|
|
|
|
367,718
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
368,396
|
|
|
|
467,096
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
456,872
|
|
|
$
|
803,399
|
|
Supplementary
information
|
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
|
31,633
|
|
|
$
|
28,160
|
|
Cash paid during the
period for income taxes, net of refund
|
|
$
|
65,562
|
|
|
$
|
131,456
|
|
|
|
|
|
|
|
|
|
|
|
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 frequent 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. During
the second quarter of 2020, as a result of the COVID-19 pandemic,
the Company initiated restructuring measures. In connection with
the restructuring, the Company has recorded a charge 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 has 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 and
amortization and impairment of acquired intangibles. 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, 2019 and 2020:
Reconciliation of
Net income/Margin to Adjusted Income from
Operations/Margin
(In
thousands)
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
Net income
|
|
$
|
88,120
|
|
|
$
|
85,435
|
|
|
$
|
222,683
|
|
|
$
|
233,294
|
|
Foreign exchange
(gains) losses, net
|
|
|
(6,727)
|
|
|
|
2,402
|
|
|
|
(3,646)
|
|
|
|
(11,611)
|
|
Interest (income)
expense, net
|
|
|
10,221
|
|
|
|
12,757
|
|
|
|
33,487
|
|
|
|
38,072
|
|
Income tax
expense
|
|
|
22,669
|
|
|
|
25,008
|
|
|
|
62,385
|
|
|
|
66,855
|
|
Stock-based
compensation expense
|
|
|
21,320
|
|
|
|
19,487
|
|
|
|
61,306
|
|
|
|
55,818
|
|
Amortization and
impairment of acquired intangible assets
|
|
|
6,712
|
|
|
|
9,995
|
|
|
|
22,690
|
|
|
|
32,218
|
|
Restructuring
expenses
|
|
|
-
|
|
|
|
4,889
|
|
|
|
-
|
|
|
|
26,547
|
|
Acquisition-related
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
967
|
|
|
|
-
|
|
Adjusted income
from operations
|
|
$
|
142,315
|
|
|
$
|
159,973
|
|
|
$
|
399,872
|
|
|
$
|
441,193
|
|
Net income
margin
|
|
|
9.9
|
%
|
|
|
9.1
|
%
|
|
|
8.6
|
%
|
|
|
8.5
|
%
|
Adjusted income
from operations margin
|
|
|
16.0
|
%
|
|
|
17.1
|
%
|
|
|
15.5
|
%
|
|
|
16.0
|
%
|
Reconciliation of
Income from Operations/Margin to Adjusted Income from
Operations/Margin
(In
thousands)
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
Income from
operations
|
|
$
|
113,584
|
|
|
$
|
124,642
|
|
|
$
|
309,858
|
|
|
$
|
325,664
|
|
Stock-based
compensation expense
|
|
|
21,320
|
|
|
|
19,487
|
|
|
|
61,306
|
|
|
|
55,818
|
|
Amortization and
impairment of acquired intangible assets
|
|
|
6,712
|
|
|
|
9,995
|
|
|
|
22,690
|
|
|
|
32,218
|
|
Acquisition-related
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
967
|
|
|
|
-
|
|
Other income
(expense), net
|
|
|
704
|
|
|
|
960
|
|
|
|
5,067
|
|
|
|
946
|
|
Restructuring
expenses
|
|
|
-
|
|
|
|
4,889
|
|
|
|
-
|
|
|
|
26,547
|
|
Equity-method
investment activity, net
|
|
|
(5)
|
|
|
|
-
|
|
|
|
(16)
|
|
|
|
-
|
|
Adjusted income
from operations
|
|
$
|
142,315
|
|
|
$
|
159,973
|
|
|
$
|
399,872
|
|
|
$
|
441,193
|
|
Income from
operations margin
|
|
|
12.8
|
%
|
|
|
13.3
|
%
|
|
|
12.0
|
%
|
|
|
11.8
|
%
|
Adjusted income
from operations margin
|
|
|
16.0
|
%
|
|
|
17.1
|
%
|
|
|
15.5
|
%
|
|
|
16.0
|
%
|
Reconciliation of
Diluted EPS to Adjusted Diluted EPS7
(Per share
data)
|
|
|
|
Three months ended September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
Diluted
EPS
|
|
$
|
0.45
|
|
|
$
|
0.43
|
|
|
$
|
1.14
|
|
|
$
|
1.19
|
|
Stock-based
compensation expense
|
|
|
0.11
|
|
|
|
0.10
|
|
|
|
0.31
|
|
|
|
0.28
|
|
Amortization and
impairment of acquired intangible assets
|
|
|
0.03
|
|
|
|
0.05
|
|
|
|
0.12
|
|
|
|
0.16
|
|
Acquisition-related
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Restructuring
expenses
|
|
|
-
|
|
|
|
0.02
|
|
|
|
-
|
|
|
|
0.14
|
|
Tax impact on
stock-based compensation expense
|
|
|
(0.02)
|
|
|
|
(0.03)
|
|
|
|
(0.07)
|
|
|
|
(0.08)
|
|
Tax impact on
amortization and impairment of acquired intangible
assets
|
|
|
(0.01)
|
|
|
|
(0.01)
|
|
|
|
(0.03)
|
|
|
|
(0.04)
|
|
Tax impact on
restructuring expenses
|
|
|
-
|
|
|
|
(0.01)
|
|
|
|
-
|
|
|
|
(0.03)
|
|
Tax impact on
acquisition-related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Adjusted diluted
EPS
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
|
$
|
1.48
|
|
|
$
|
1.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
2020:
Reconciliation of
Outlook for Net income Margin to Adjusted Income from Operations
Margin8
|
|
|
|
Year ending
December 31, 2020
|
Net income
margin
|
|
|
8.3
|
%
|
Estimated foreign
exchange (gains) losses, net
|
|
|
(0.3)
|
%
|
Estimated interest
(income) expense, net
|
|
|
1.3
|
%
|
Estimated income tax
expense
|
|
|
2.5
|
%
|
Estimated stock-based
compensation expense
|
|
|
2.1
|
%
|
Estimated amortization
and impairment of acquired intangible assets
|
|
|
1.1
|
%
|
Estimated
restructuring expenses
|
|
|
0.7
|
%
|
Adjusted income
from operations margin
|
|
|
15.7
|
%
|
Reconciliation of
Outlook for Income from Operations Margin to Adjusted Income from
Operations Margin8
|
|
|
|
Year ending
December 31, 2020
|
Income from
operations margin
|
|
|
11.8
|
%
|
Estimated stock-based
compensation expense
|
|
|
2.1
|
%
|
Estimated amortization
and impairment of acquired intangible assets
|
|
|
1.1
|
%
|
Estimated
restructuring expenses
|
|
|
0.7
|
%
|
Adjusted income
from operations margin
|
|
|
15.7
|
%
|
Reconciliation of
Outlook for Diluted EPS to Adjusted Diluted
EPS8
(Per share
data)
|
|
|
|
Year ending
December 31, 2020
|
|
|
|
Lower
|
|
|
Upper
|
|
Diluted
EPS
|
|
$
|
1.54
|
|
|
|
1.57
|
|
Estimated stock-based
compensation expense
|
|
|
0.39
|
|
|
|
0.39
|
|
Estimated amortization
and impairment of acquired intangible assets
|
|
|
0.21
|
|
|
|
0.21
|
|
Estimated
restructuring expenses
|
|
|
0.14
|
|
|
|
0.14
|
|
Estimated tax impact
on stock-based compensation expense
|
|
|
(0.11)
|
|
|
|
(0.11)
|
|
Estimated tax impact
on amortization and impairment of acquired intangible
assets
|
|
|
(0.05)
|
|
|
|
(0.05)
|
|
Estimated tax impact
on restructuring expenses
|
|
(0.03)
|
|
|
(0.03)
|
|
Adjusted diluted
EPS
|
|
$
|
2.08
|
|
|
|
2.11
|
|
1 Both on
an as reported and constant currency basis. 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 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.
|
3 Adjusted
income from operations and adjusted income from operations margin
are non-GAAP measures. Reconciliations of each of GAAP income from
operations and GAAP net income to adjusted income from operations
and GAAP income from operations margin and GAAP net income margin
to adjusted income from operations margin are attached to this
release.
|
4 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.
|
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.
|
6 Adjusted
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.
|
7 Due to
rounding, the numbers presented in this table may not add up
precisely to the totals provided.
|
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