Genpact Reports Full Year and Fourth Quarter 2020 Results

Feb 9, 2021
2020 Total Revenue of $3.7 billion, Up 5% (6% on a constant currency basis)(1)
2020 Global Client Revenue of $3.3 billion, Up 7%(2)
2020 Diluted EPS of $1.57, Up 1%; Adjusted Diluted EPS(3) of $2.12, Up 3%
Quarterly Cash Dividend Increased By 10%
Board Approves $500 Million Increase to Share Repurchase Program

NEW YORK, Feb. 9, 2021 /PRNewswire/ -- Genpact Limited (NYSE: G), a global professional services firm focused on delivering digital transformation, today announced financial results for the fourth quarter and full year ended December 31, 2020.

"Our performance during 2020 reflects our agility and culture of embracing change that allowed us to rapidly meet client needs and successfully pivot to new ways of working," said "Tiger" Tyagarajan, Genpact's president and CEO. "Led by the dedication of our global workforce, our ability to grow our top and bottom line is a testament to the resiliency of our business. The acceleration of digital transformation into new buying centers across all industries is expanding our total addressable market and providing us with many more opportunities to drive sustainable and profitable long-term growth."

Key Financial Highlights – Full Year 2020

  • Total revenue was $3.7 billion, up 5% year-over-year (6% on a constant currency basis).1
  • Revenue from Global Clients was $3.3 billion, up 7% year-over-year, both on an as reported and constant currency basis1, representing 88% of total revenue.
  • Revenue from GE was $459 million, down 4% year-over-year, representing 12% of total revenue.
  • Net income attributable to Genpact Limited shareholders was $308 million, up 1% year-over-year, with a corresponding margin of 8.3%.
  • Income from operations was $439 million, up 2% year-over-year, with a corresponding margin of 11.8%. Adjusted income from operations was $589 million, up 5% year-over-year, with a corresponding margin of 15.9%.4
  • Diluted earnings per share was $1.57, up 1% year-over-year, and adjusted diluted earnings per share3 was $2.12, up 3% year-over-year.
  • Income from operations and diluted earnings per share include $26.5 million of restructuring charges related to employee severance costs and lease impairment charges recorded in the second and third quarters of 2020. These restructuring charges are excluded from adjusted income from operations4 and adjusted diluted earnings per share.3
  • New bookings were approximately $3.1 billion, down 20% year-over-year. Global Client new bookings were down 8% year-over-year.5
  • Cash generated from operations was $584 million, up 36% from $428 million in 2019.
  • Genpact repurchased approximately 3.4 million of its common shares for total consideration of approximately $137 million at an average price per share of $40.16.

Key Financial Highlights – Fourth Quarter 2020

  • Total revenue was $951 million, up 1% year-over-year, both on an as reported and constant currency basis.1
  • Revenue from Global Clients was $841 million, up 4% year-over-year (3% on a constant currency basis)1, representing 89% of total revenue.
  • Revenue from GE was $109 million, down 16% year-over-year, representing 11% of total revenue.
  • Net income was $75 million, down 9% year-over-year, with a corresponding margin of 7.9%.
  • Income from operations was $113 million, down 5% year-over-year, with a corresponding margin of 11.9%. Adjusted income from operations was $148 million, down 7% year-over-year, with a corresponding margin of 15.5%.4
  • Diluted earnings per share was $0.38, down 10% year-over-year, and adjusted diluted earnings per share3 was $0.51, down 11% year-over-year.
  • Cash generated from operations was $159 million, up 83% from $87 million in the fourth quarter of 2019.
  • Genpact repurchased approximately 1.6 million of its common shares during the quarter for total consideration of approximately $63 million at an average price per share of $38.94.

Capital Allocation

  • Genpact's Board of Directors approved a quarterly cash dividend of $0.1075, a 10% increase, payable on March 19, 2021 to shareholders of record as of the close of business on March 10, 2021, and an increase of $500 million to the Company's existing share repurchase authorization.

Full Year 2021 Outlook
Genpact expects:

  • Total revenue of $3.93 to $3.99 billion, up 6% to 7.5%, or 5.0% to 6.5% on a constant currency basis.1
  • Global Client revenue growth in the range of 8.0% to 10%, or 7.0% to 9.0% on a constant currency basis.1
  • Adjusted income from operations margin6 of approximately 16.0%.
  • Adjusted diluted EPS7 of $2.26 to $2.29.

Conference Call to Discuss Financial Results
Genpact's management will host an hour-long conference call beginning at 4:30 p.m. ET on February 9, 2021 to discuss the company's performance for the fourth quarter and full year ended December 31, 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, 5589896.

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, including our outlook for 2021, financial results, intention to pay dividends or repurchase our common shares 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 the various recommendations, orders and protocols issued 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, 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,

2019



As of December 31,

2020


Assets









Current assets









Cash and cash equivalents


$

467,096



$

680,440


Accounts receivable, net of reserve for doubtful receivables of $29,969 and
allowance for credit losses of $27,707 as of December 31, 2019 and 2020,
respectively



914,255




881,020


Prepaid expenses and other current assets



170,325




187,408


Total current assets


$

1,551,676



$

1,748,868











Property, plant and equipment, net



254,035




231,122


Operating lease right-of-use assets



330,854




304,714


Deferred tax assets



89,715




106,674


Intangible assets, net



230,861




236,732


Goodwill



1,574,466




1,695,688


Contract cost assets



205,498




225,897


Other assets, net of reserve for doubtful assets of $0 and allowance for credit
losses of $3,134 as of December 31, 2019 and 2020, respectively



217,079




323,818


Total assets


$

4,454,184



$

4,873,513











Liabilities and equity









Current liabilities









Short-term borrowings


$

70,000



$

250,000


Current portion of long-term debt



33,509




33,537


Accounts payable



21,981




13,910


Income taxes payable



43,186




41,941


Accrued expenses and other current liabilities



683,871




806,769


Operating leases liability



57,664




56,479


Total current liabilities


$

910,211



$

1,202,636











Long-term debt, less current portion



1,339,796




1,307,371


Operating leases liability



302,100




289,363


Deferred tax liabilities



3,990




1,516


Other liabilities



208,916




238,398


Total liabilities


$

2,765,013



$

3,039,284











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
189,045,661 issued and outstanding as of December 31, 2019 and 2020,
respectively



1,896




1,885


Additional paid-in capital



1,570,575




1,636,026


Retained earnings



648,656




741,658


Accumulated other comprehensive income (loss)



(531,956)




(545,340)


Total equity


$

1,689,171



$

1,834,229











Total liabilities and equity


$

4,454,184



$

4,873,513


 

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data and share count)

 







Three months ended December 31,




2018



2019



2020


Net revenues


$

835,339



$

940,739



$

950,568


Cost of revenue



533,134




630,648




613,645


Gross profit


$

302,205



$

310,091



$

336,923


Operating expenses:













Selling, general and administrative expenses



178,580




212,650




207,860


Amortization of acquired intangible assets



9,716




9,047




11,670


Other operating (income) expense, net



3,068




(31,124)




4,340


Income from operations


$

110,841



$

119,518



$

113,053


Foreign exchange gains (losses), net



186




4,083




(4,129)


Interest income (expense), net



(9,473)




(9,971)




(10,888)


Other income (expense), net



5,078




719




2,292


Income before equity-method investment activity, net and
income tax expense


$

106,632



$

114,349



$

100,328


Equity-method investment activity, net



10








Income before income tax expense


$

106,642



$

114,349



$1,00,328


Income tax expense



27,495




32,151




25,346


Net income


$

79,147



$

82,198



$

74,982


Net loss (income) attributable to redeemable non-controlling interest










Net income attributable to Genpact Limited shareholders


$

79,147



$

82,198



$

74,982















Net income available to Genpact Limited common
shareholders


$

79,147



$

82,198



$

74,982


Earnings per common share attributable to Genpact Limited common

Shareholders













Basic


$

0.42



$

0.43



$

0.40


Diluted


$

0.41



$

0.42



$

0.38


Weighted average number of common shares used in computing
earnings per common share attributable to Genpact Limited common
shareholders













Basic



189,724,744




190,083,647




189,470,107


Diluted



193,149,836




196,592,325




194,823,683


 

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data and share count)

 







Year ended December 31,




2018



2019



2020


Net revenues


$

3,000,790



$

3,520,543



$

3,709,377


Cost of revenue



1,921,768




2,294,688




2,418,137


Gross profit


$

1,079,022



$

1,225,855



$

1,291,240


Operating expenses:













Selling, general and administrative expenses



693,865




794,901




789,849


Amortization of acquired intangible assets



38,850




32,612




43,343


Other operating (income) expense, net



(1,845)




(31,034)




19,331


Income from operations


$

348,152



$

429,376



$

438,717


Foreign exchange gains (losses), net



15,239




7,729




7,482


Interest income (expense), net



(37,119)




(43,458)




(48,960)


Other income (expense), net



35,761




5,786




3,238


Income before equity-method investment activity, net and
income tax expense


$

362,033



$

399,433



$

400,477


Equity-method investment activity, net



(12)




(16)





Income before income tax expense


$

362,021



$

399,417



$

400,477


Income tax expense



80,763




94,536




92,201


Net income


$

281,258



$

304,881



$

308,276


Net loss (income) attributable to redeemable non-controlling interest



761








Net income attributable to Genpact Limited shareholders


$

282,019



$

304,881



$

308,276















Net income available to Genpact Limited common shareholders


$

282,019



$

304,881



$

308,276


Earnings per common share attributable to Genpact Limited common

shareholders













Basic


$

1.48



$

1.60



$

1.62


Diluted


$

1.45



$

1.56



$

1.57


Weighted average number of common shares used in computing
earnings per common share attributable to Genpact Limited common
shareholders













Basic



190,674,740




190,074,475




190,396,780


Diluted



193,980,038




195,160,855




195,780,971


 

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 







Year ended December 31,




2018



2019



2020


Operating activities













Net income attributable to Genpact Limited shareholders


$

282,019



$

304,881



$

308,276


Net loss attributable to redeemable non-controlling interest



(761)








Net income


$

281,258



$

304,881



$

308,276


Adjustments to reconcile net income to net cash provided by operating activities:













Depreciation and amortization



64,868




96,101




116,499


Amortization of debt issuance costs (including loss on extinguishment of debt)



3,975




1,779




2,248


Amortization of acquired intangible assets



38,850




32,612




43,343


Write-down of intangible assets and property, plant and equipment



4,265




3,511




14,083


Reserve for doubtful receivables/allowance for credit losses



1,857




7,443




5,707


Unrealized loss (gain) on revaluation of foreign currency asset/liability



3,352




(5,171)




9,578


Stock-based compensation expense



48,998




83,885




74,008


Deferred tax expense (benefit)



6,054




(16,315)




(22,587)


Write-down of operating lease right-of-use assets and other assets









18,084


Gain on exchange of non-monetary asset






(31,380)





Others, net



1,329




(2,213)




(1,291)


Change in operating assets and liabilities:













(Increase) decrease in accounts receivable



(76,894)




(121,983)




42,505


Increase in prepaid expenses, other current assets, contract cost assets,
operating lease right-of-use assets and other assets



(76,392)




(69,813)




(99,852)


Increase (decrease) in accounts payable



26,401




(21,375)




(12,480)


Increase in accrued expenses, other current liabilities, operating lease liabilities
and other liabilities



5,993




157,580




87,180


Increase (decrease) in income taxes payable



5,597




8,346




(993)


Net cash provided by operating activities


$

339,511



$

427,888



$

584,308


Investing activities













Purchase of property, plant and equipment



(84,978)




(74,927)




(70,170)


Payment for internally generated intangible assets (including intangibles under
development)



(75,439)




(33,834)




(10,201)


Proceeds from sale of property, plant and equipment



668




1,750




607


Proceeds from sale of equity affiliates






2,168





Payment for business acquisitions, net of cash acquired



(111,571)




(252,276)




(186,633)


Payment for redeemable non-controlling interest



(4,730)








Net cash used for investing activities


$

(276,050)



$

(357,119)



$

(266,397)


Financing activities













Repayment of capital/finance lease obligations



(2,395)




(7,380)




(10,567)


Payment of debt issuance costs



(4,293)




(2,317)




(620)


Proceeds from long-term debt



129,186




400,000





Repayment of long-term debt



(166,186)




(34,000)




(34,000)


Proceeds from short-term borrowings



250,000




400,000




610,000


Repayment of short-term borrowings



(125,000)




(625,000)




(430,000)


Proceeds from issuance of common shares under stock-based compensation plans



14,034




19,670




25,135


Payment for net settlement of stock-based awards



(15,919)




(3,850)




(34,083)


Payment of earn-out consideration



(3,356)




(12,790)




(6,552)


Dividend paid



(57,102)




(64,671)




(74,212)


Payment for stock repurchased and retired (including expenses related to stock
repurchase)



(154,156)




(30,015)




(137,112)


Net cash provided by/ (used for) financing activities


$

(135,187)



$

39,647



$

(92,011)


Effect of exchange rate changes



(64,346)




(11,716)




(12,556)


Net increase (decrease) in cash and cash equivalents



(71,726)




110,416




225,900


Cash and cash equivalents at the beginning of the period



504,468




368,396




467,096


Cash and cash equivalents at the end of the period


$

368,396



$

467,096



$

680,440


Supplementary information













Cash paid during the period for interest on borrowings (including interest rate swaps)


$

41,484



$

45,084



$

49,101


Cash paid during the period for income taxes, net of refunds


$

81,411



$

104,217



$

193,946


Property, plant and equipment acquired under capital/finance lease obligations


$

2,031



$

5,008



$

29,526


Non-cash transaction: Gain on exchange of non-monetary asset


$



$

(31,380)



$


 

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 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 year and three months ended December 31, 2019 and 2020:

 

 

Reconciliation of Net income attributable to Genpact Limited shareholders/Margin to Adjusted Income from Operations/Margin

(In thousands)

 




Year ended December 31,



Three months ended December 31,




2019



2020



2019



2020


Net income attributable to Genpact Limited
shareholders


$

304,881



$

308,276



$

82,198



$

74,982


Foreign exchange (gains) losses, net



(7,729)




(7,482)




(4,083)




4,129


Interest (income) expense, net



43,458




48,960




9,971




10,888


Income tax expense



94,536




92,201




32,151




25,346


Stock-based compensation expense



83,885




74,008




22,579




18,190


Amortization and impairment of acquired
intangible assets



31,458




43,648




8,768




11,430


Restructuring expenses



-




26,547




-




-


Acquisition-related expenses



8,352




2,650




7,385




2,650


Adjusted income from operations


$

558,841



$

588,808



$

158,969



$

147,615


Net income attributable to Genpact Limited
shareholders margin



8.7

%



8.3

%



8.7

%



7.9

%

Adjusted income from operations margin



15.9

%



15.9

%



16.9

%



15.5

%

 

 

Reconciliation of Income from Operations/Margin to Adjusted Income from Operations/Margin

(In thousands)

 






Year ended December 31,



Three months ended December 31,




2019



2020



2019



2020


Income from operations


$

429,376



$

438,717



$

119,518



$

113,053


Stock-based compensation expense



83,885




74,008




22,579




18,190


Amortization and impairment of acquired
intangible assets



31,458




43,648




8,768




11,430


Acquisition-related expenses



8,352




2,650




7,385




2,650


Other income (expense), net



5,786




3,238




719




2,292


Restructuring expenses



-




26,547




-




-


Equity-method investment activity, net



(16)




-




-




-


Adjusted income from operations


$

558,841



$

588,808



$

158,969



$

147,615


Income from operations margin



12.2

%



11.8

%



12.7

%



11.9

%

Adjusted income from operations margin



15.9

%



15.9

%



16.9

%



15.5

%

 



 

Reconciliation of Diluted EPS to Adjusted Diluted EPS8

(Per share data) 

 



Year ended December 31,



Three months ended December 31,




2019



2020



2019



2020


Diluted EPS


$

1.56



$

1.57



$

0.42



$

0.38


Stock-based compensation expense



0.43




0.38




0.11




0.09


Amortization and impairment of acquired
intangible assets



0.16




0.22




0.04




0.06


Acquisition-related expenses



0.04




0.01




0.04




0.01


Restructuring expenses



-




0.14




-




-


Tax impact on stock-based compensation expense



(0.10)




(0.11)




(0.02)




(0.03)


Tax impact on amortization and impairment of
acquired intangible assets



(0.04)




(0.06)




(0.01)




(0.01)


Tax impact on acquisition-related expenses



(0.01)




(0.00)




(0.01)




(0.00)


Tax impact on restructuring expenses



-




(0.03)




-




-


Adjusted diluted EPS


$

2.05



$

2.12



$

0.57



$

0.51



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 attributable to Genpact Limited shareholders Margin to Adjusted Income from Operations Margin9






Year ending December 31, 2021


Net income attributable to Genpact Limited shareholders margin



8.8

%

Estimated interest (income) expense, net



1.1

%

Estimated income tax expense



2.8

%

Estimated stock-based compensation expense



1.9

%

Estimated amortization of acquired intangible assets



1.4

%

Adjusted income from operations margin



16.0

%

 

Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from Operations Margin9 






Year ending December 31, 2021


Income from operations margin



12.6

%

Estimated stock-based compensation expense



1.9

%

Estimated amortization of acquired intangible assets



1.4

%

Estimated other income (expense), net



0.1

%

Adjusted income from operations margin



16.0

%

 

 

Reconciliation of Outlook for Diluted EPS to Adjusted Diluted EPS9

(Per share data)

 






Year ending December 31, 2021




Lower



Upper


Diluted EPS


$

1.77




1.80


Estimated stock-based compensation expense



0.38




0.38


Estimated amortization of acquired intangible assets



0.29




0.29


Estimated tax impact on stock-based compensation expense



(0.11)




(0.11)


Estimated tax impact on amortization of acquired intangible assets



(0.08)




(0.08)


Adjusted diluted EPS


$

2.26




2.29


 

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

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.

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. 

4

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.

5

New bookings, an operating measure, represents the total contract value of new contracts and certain renewals, extensions and changes to existing
contracts.  Regular renewals of contracts with no change in scope are not counted as new bookings.

6

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.

7

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.

8

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

9

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

 

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SOURCE Genpact