v3.25.2
Derivative financial instruments
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative financial instruments Derivative financial instruments
The Company is exposed to the risk of rate fluctuations on its foreign currency assets and liabilities and on foreign currency denominated forecasted cash flows and interest rates. The Company has established risk management policies, including the use of derivative financial instruments to hedge foreign currency assets and liabilities, foreign currency denominated forecasted cash flows and interest rate risk. These derivative financial instruments consist of deliverable and non-deliverable forward foreign exchange contracts, treasury rate locks and interest rate swaps. The Company enters into these contracts with counterparties that are banks or other financial institutions, and the Company considers the risk of non-performance by such counterparties not to be material. The forward foreign exchange contracts and interest rate swaps mature during a period of up to 54 months and the forecasted transactions are expected to occur during the same period.

The following table presents the aggregate notional principal amounts of outstanding derivative financial instruments together with the related balance sheet exposure:
 
Notional principal amounts (Note a)Balance sheet exposure asset (liability) (Note b)
As of December 31, 2024As of June 30, 2025As of December 31, 2024As of June 30, 2025
Foreign exchange forward contracts denominated in:
United States Dollars (sell) Indian Rupees (buy)$2,413,000 $2,372,551 $(36,478)$14,726 
United States Dollars (sell) Mexican Peso (buy)71,000 42,000 (8,188)(242)
United States Dollars (sell) Philippines Peso (buy)161,400 167,400 (3,274)1,914 
Euro (sell) United States Dollars (buy)219,706 222,127 10,282 (17,060)
Singapore Dollar (buy) United States Dollars (sell)12,000 12,000 (407)829 
Euro (sell) Romanian Leu (buy)67,144 43,995 (156)(221)
Japanese Yen (sell) Chinese Renminbi (buy)34,507 40,996 3,402 (142)
United States Dollars (sell) Chinese Renminbi (buy)46,800 71,400 (1,883)(1,156)
Pound Sterling (sell) United States Dollars (buy)15,507 17,070 463 (1,458)
United States Dollars (sell) Hungarian Font (buy)21,000 22,500 (1,611)3,044 
Australian Dollars (sell) Indian Rupees (buy)109,490 102,246 3,556 (438)
United States Dollars (sell) Polish Zloty (buy)39,000 30,000 (1,190)3,271 
Japanese Yen (sell) United States Dollars (buy)7,000 7,000 366 (58)
Israeli Shekel (buy) United States Dollars (sell)20,000 20,000 454 2,010 
South African Rand (sell) United States Dollars (buy)32,000 32,000 1,725 (1,005)
United States Dollars (sell) Brazilian Real (buy)4,000 4,000 (314)501 
United States Dollars (sell) Costa Rica Colon (buy)13,000 15,000 231 233 
United States Dollars (sell) Canadian Dollar (buy)9,000 9,000 (352)35 
United States Dollars (sell) Malaysian Ringgit (buy)5,000 9,500 (169)469 
Interest rate swaps (floating to fixed)234,375 228,125 (3,155)(5,386)
$(36,698)$(134)

(a)Notional amounts are key elements of derivative financial instrument agreements but do not represent the amount exchanged by counterparties and do not measure the Company’s exposure to credit, foreign exchange, interest rate or market risks. However, the amounts exchanged are based on the notional amounts and other provisions of the underlying derivative financial instrument agreements. Notional amounts are denominated in U.S. dollars.

(b)Balance sheet exposure is denominated in U.S. dollars and denotes the mark-to-market impact of the derivative financial instruments on the reporting date.
6. Derivative financial instruments (Continued)

FASB guidance on derivatives and hedging requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. In accordance with FASB guidance on derivatives and hedging, the Company designates foreign exchange forward contracts, interest rate swaps and treasury rate locks as cash flow hedges. Foreign exchange forward contracts are entered into to cover the effects of future exchange rate variability on forecasted revenues and purchases of services, and interest rate swaps and treasury rate locks are entered into to cover interest rate fluctuation risk. In addition to this program, the Company uses derivative instruments that are not accounted for as hedges under FASB guidance in order to hedge foreign exchange risks related to balance sheet items, such as receivables and intercompany borrowings, that are denominated in currencies other than the Company’s underlying functional currency.

The fair value of the Company’s derivative instruments and their location in the Company’s financial statements are summarized in the table below: 
Cash flow hedgesNon-designated
As of December 31, 2024As of June 30, 2025As of December 31, 2024As of June 30, 2025
Assets
Prepaid expenses and other current assets$11,855 $13,067 $5,419 $11,668 
Other assets$4,727 $7,810 $— $— 
Liabilities
Accrued expenses and other current liabilities$24,436 $14,989 $12,990 $2,696 
Other liabilities$21,273 $14,994 $— $— 
 
Cash flow hedges

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain (loss) on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction is recognized in the consolidated statements of income. Gains (losses) on the derivatives, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in earnings as incurred.

In March 2021, the Company executed a treasury rate lock agreement for $350,000 in connection with future interest payments to be made on its senior notes issued in March 2021 by Genpact Luxembourg S.à r.l. (“Genpact Luxembourg”) and Genpact USA, Inc. (“Genpact USA”), both wholly-owned subsidiaries of the Company, and the treasury rate lock was designated as a cash flow hedge. The treasury rate lock agreement was terminated on March 23, 2021 and a deferred gain was recorded in accumulated other comprehensive income. This gain is being amortized to interest expense over the life of the 2021 Senior Notes (as defined in Note 11 below). The remaining gain to be amortized related to the treasury rate lock agreement as of December 31, 2024 and June 30, 2025 was $206 and $126, respectively.

In May 2024, the Company executed treasury rate lock agreements for $400,000 in connection with future interest payments to be made on its senior notes issued in June 2024 by Genpact Luxembourg and Genpact USA, and the treasury rate locks were designated as cash flow hedges. These treasury rate lock agreements were terminated on May 30, 2024 and a deferred loss was recorded in accumulated other comprehensive income. This loss is being amortized to interest expense over the life of the 2024 Senior Notes (as defined in Note 11 below). The remaining loss to be amortized related to the treasury rate lock agreements as of December 31, 2024 and June 30, 2025 was $351 and $312, respectively.
6. Derivative financial instruments (Continued)

In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss) (“OCI”), and the related tax effects are summarized below: 

Three months ended June 30,
20242025
Before 
tax
Amount		Tax 
(Expense)
 or Benefit		Net of 
tax
Amount		Before 
tax
Amount		Tax 
(Expense)
or Benefit		Net of 
tax
Amount
Opening balance$17,132 $(4,770)$12,362 $(11,601)$2,966 $(8,635)
Net gains (losses) reclassified into statement of income on completion of hedged transactions3,585 (1,014)2,571 (693)287 (406)
Changes in fair value of effective portion of outstanding derivatives, net(1,896)(171)(2,067)1,615 536 2,151 
Gain (loss) on cash flow hedging derivatives, net(5,481)843 (4,638)2,308 249 2,557 
Closing balance$11,651 $(3,927)$7,724 $(9,293)$3,215 $(6,078)


Six months ended June 30,
20242025
Before 
tax
Amount		Tax 
(Expense)
 or Benefit		Net of 
tax
Amount		Before 
tax
Amount		Tax 
(Expense)
or Benefit		Net of 
tax
Amount
Opening balance$805 $146 $951 $(29,271)$6,809 $(22,462)
Net gains (losses) reclassified into statement of income on completion of hedged transactions6,545 (1,772)4,773 (5,921)1,521 (4,400)
Changes in fair value of effective portion of outstanding derivatives, net17,391 (5,845)11,546 14,057 (2,073)11,984 
Gain (loss) on cash flow hedging derivatives, net10,846 (4,073)6,773 19,978 (3,594)16,384 
Closing balance$11,651 $(3,927)$7,724 $(9,293)$3,215 $(6,078)


The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below: 
Derivatives in Cash Flow Hedging RelationshipsAmount of Gain (Loss) recognized in OCI on Derivatives (Effective Portion)Location of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion)Amount of Gain (Loss) reclassified from OCI into Statement of Income (Effective Portion)
Three months ended June 30,Six months ended June 30,Three months ended June 30,Six months ended June 30,
20242025202420252024202520242025
Forward foreign exchange contracts$(1,559)$2,713 14,890 16,552 Revenue$521 $(155)$912 $844 
Interest rate swaps$60 $(1,098)2,898 (2,495)Cost of revenue2,303 (369)4,048 (5,719)
Treasury rate lock$(397)$— (397)— Selling, general and administrative expenses332 (52)840 (822)
Interest expense429 (117)745 (224)
$(1,896)$1,615 17,391 14,057 $3,585 $(693)$6,545 $(5,921)
6. Derivative financial instruments (Continued)
There were no gains (losses) recognized in the statement of income on the ineffective portion of derivatives designated as cash flow hedges and excluded from effectiveness testing for the three and six months ended June 30, 2024 and 2025, respectively.

Non-designated Hedges
Amount of Gain (Loss) recognized in Statement of Income on Derivatives
Three months ended June 30,Six months ended June 30,
Derivatives not designated as hedging instrumentsLocation of Gain (Loss)  recognized in Statement of Income on Derivatives2024202520242025
Forward foreign exchange contracts (Note a)Foreign exchange gains (losses), net$(1,165)$3,846 $(435)$8,476 
$(1,165)$3,846 $(435)$8,476 

(a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items such as receivables and intercompany borrowings and were not originally designated as hedges under FASB guidance on derivatives and hedging. Realized gains (losses) and changes in the fair value of these derivatives are recorded in foreign exchange gains, net in the consolidated statements of income.