You should read the following discussion in connection with our unaudited
consolidated financial statements and the related notes included elsewhere in
this Quarterly Report on Form 10-Q and our audited consolidated financial
statements and the related notes included in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2020. Some of the statements in the following
discussion are forward looking statements.

We have described in this Quarterly Report on Form 10-Q, the impact of the
global Coronavirus Disease 2019 pandemic ("COVID-19") on our financial results
for the three months ended September 30, 2021. See "Cautionary Note Regarding
Forward-Looking Statements" below, Item 1A -"Risk Factors" included elsewhere in
this Quarterly Report on Form 10-Q and Part I, Item 1A, "Risk Factors" in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for
further information regarding risks and uncertainties relating to COVID-19.
Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of the United States Private Securities Litigation Reform Act of
1995. You should not place undue reliance on these statements because they are
subject to numerous uncertainties and factors relating to our operations and
business environment, all of which are difficult to predict and many of which
are beyond our control. These statements often include words such as "may,"
"will," "should," "believe," "expect," "anticipate," "intend," "plan,"
"estimate" or similar expressions. These statements are based on assumptions
that we have made in light of our experience in the industry as well as our
perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate under the
circumstances. As you read and consider this Quarterly Report on Form 10-Q, you
should understand that these statements are not guarantees of performance or
results. They involve known and unknown risks, uncertainties and assumptions.
Although we believe that these forward-looking statements are based on
reasonable assumptions, you should be aware that many factors could affect our
actual financial results or results of operations and could cause actual results
to differ materially from those in the forward-looking statements. Many of the
following risks, uncertainties and other factors identified below have been, and
will be, amplified by the COVID-19 pandemic ("COVID-19"). These factors include
but are not limited to:

•the impact of COVID-19 and related response measures on our business, results
of operations and financial condition, including the impact of governmental
lockdowns and other restrictions on our operations and processes and those of
our clients and suppliers;
•our dependence on a limited number of clients in a limited number of
industries;
•worldwide political, economic or business conditions;
•negative public reaction in the U.S. or elsewhere to offshore outsourcing;
•fluctuations in our earnings;
•our ability to attract and retain clients including in a timely manner;
•our ability to successfully consummate or integrate strategic acquisitions;
•our ability to accurately estimate and/or manage the costs and/or timing of
winding down businesses;
•restrictions on immigration;
•our ability to hire and retain enough sufficiently trained employees to support
our operations;
•our ability to grow our business or effectively manage growth and international
operations;
•any changes in the senior management team;
•increasing competition in our industry;
•telecommunications or technology disruptions or breaches, natural or other
disasters, or medical epidemics or pandemics;
•our ability to withstand the loss of a significant customer;
•our ability to realize the entire book value of goodwill and other intangible
assets from acquisitions;
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•our ability to make accurate estimates and assumptions in connection with the
preparation of our consolidated financial statements;
•regulatory, legislative and judicial developments, including changes to or the
withdrawal of governmental fiscal incentives;
•changes in tax laws or decisions regarding repatriation of funds held abroad;
•ability to service debt or obtain additional financing on favorable terms;
•legal liability arising out of customer contracts;
•technological innovation;
•political or economic instability in the geographies in which we operate;
•operational and information security failures arising as a result of remote
work solutions adopted due to COVID-19;
•cyber security incidents, data breaches, or other unauthorized disclosure of
sensitive or confidential client and customer data; and
•adverse outcome of our disputes with the Indian tax authorities.

These and other factors are more fully discussed in our Annual Report on Form
10-K for the fiscal year ended December 31, 2020. These and other risks could
cause actual results to differ materially from those implied by forward-looking
statements in this Quarterly Report on Form 10-Q.

The forward-looking statements made by us in this Quarterly Report on Form 10-Q,
or elsewhere, speak only as of the date on which they were made. New risks and
uncertainties come up from time to time, and it is impossible for us to predict
those events or how they may affect us. We have no obligation to update any
forward-looking statements in this Quarterly Report on Form 10-Q after the date
of this Quarterly Report on Form 10-Q, except as required by federal securities
laws.
Executive Overview

We are a leading global analytics and digital solutions company that helps our
clients build and grow sustainable businesses. By bringing together our deep
domain expertise with robust data, powerful analytics, cloud, and AI, we create
agile, scalable solutions and execute complex operations for the world's leading
corporations in industries including insurance, healthcare, banking and
financial services, media, and retail, among others.

We operate in the Business Process Management ("BPM") industry and we provide
operations management and analytics services. We manage and report financial
information through our four strategic business units: Insurance, Healthcare,
Analytics and Emerging Business.

Our global delivery network, which includes highly trained industry and process
specialists across the United States, Latin America, South Africa, Europe and
Asia (primarily India and the Philippines), is a key asset. We have operations
centers in India, the United States, the United Kingdom, the Philippines,
Bulgaria, Colombia, South Africa, Romania and the Czech Republic.

Continued impact of COVID-19 on Our Business



The global COVID-19 pandemic continues to materially impact worldwide economic
activity and levels of business confidence and has had widespread,
rapidly-evolving and unpredictable impacts on global societies, economies,
financial markets and business practices. During 2020, COVID-19 materially
impacted our business, however during the first nine months of 2021, we saw
improvement in key indicators, despite being prevented from conducting business
activities as usual from geographies affected by new variants of the COVID-19
virus. Over the course of 2020, and continuing into 2021, our customers,
contractors, suppliers, and other partners adapted in order to conduct business
activities in a COVID-19 environment. The U.S. economy continued on a path to
recovery in the first nine months of 2021 with millions of Americans receiving
the COVID-19 vaccine, and states and municipalities increasingly reopening. In
addition, the U.S. federal government continued to enact policies to provide
fiscal stimulus to the economy and relief to those affected by the pandemic. As
the global economy begins to emerge from the impact of COVID-19 in 2021, our
clients are focused on receiving personalized customer experiences, optimizing
costs and supporting resilient operating models. We remain committed to helping
our clients adapt and
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thrive through the ongoing uncertainties caused by COVID-19 and, going forward,
to the shifting business environment. Notwithstanding the recent improvement in
conditions during the first nine months of 2021, the COVID-19 pandemic
continues, with temporary shutdowns at our operations centers requested or
mandated by governmental authorities, and due to the associated uncertainties,
we continue to evaluate the nature and scope of the impact to our business and
may take further strategic actions in order to manage our business operations,
costs and liquidity in response to the ongoing impacts and changing conditions
and markets resulting from COVID-19.
We have a business continuity plan in place and have, since early in the
pandemic, adapted delivery to a work from home model, while actively working to
understand our clients' changing requirements, continuing to ensure data
security, prioritizing critical processes, adjusting service levels and managing
discretionary costs (such as travel costs) and fixed costs (such as non-critical
personnel costs). We have made ongoing efforts to reduce our reliance on travel
by incorporating into our business model the ability to conduct business using
virtual conferencing and collaboration tools to enable our employees to stay
connected with each other, and our sales, marketing and support teams to
continue to engage with and remain responsive to our clients. Our work from home
delivery capability steadily improved throughout 2020 and continued to improve
during the first nine months of 2021. We estimate that we are able to deliver a
significant portion of our clients' current requirements in a work from home
model given the current lockdown restrictions in the locations in which we
operate and certain clients not authorizing us to perform the remaining process
work remotely due to its sensitive nature. In addition, we have also worked, and
continue to work with national, state, and local authorities to comply with
applicable rules and regulations related to COVID-19. There continues to be
volatility and economic and geopolitical uncertainty in many markets around the
world due to the emergence and spread of new variants of COVID-19 across
geographies. Despite the efforts described above, there is a risk that if
jurisdictions in which we operate reinstate prior restrictions, stagnate in
their reopening processes, or implement new restrictions in response to new
outbreaks or continued spread, our operations and business could be materially
impacted. In late March 2021, a new serious outbreak of the COVID-19 virus began
affecting India with an exorbitant spike in the number of COVID patients. The
Indian government reinstated lockdowns limiting in certain cases the movement of
our employees to offices, however these lockdowns were lifted as the situation
in India improved. During the same period, the Philippines also began
experiencing a spike in the number of COVID patients. In July 2021, we saw a
significant increase in number of COVID-19 cases across the U.S. brought on by
the new variant of the COVID-19 virus. Our Indian, Philippines and U.S.
operations were not materially affected as we initiated appropriate business
continuity procedures, so as to minimize the effects of these new developments,
but it is possible that our business and results of operations could
nevertheless be materially affected if any further developments, including new
variants of the COVID-19 virus, emerge.

We also took actions in response to the pandemic that focused on helping our
employees. In the geographies most affected by the recent COVID-19 variants,
these actions included healthcare support including securing and administering
vaccines for our employees, facilitating our employees' access to medical
equipment, providing ambulance services and online medical consultations,
extending medical insurance to our employees' family members and enhancing the
dollar value of such coverage. We also instituted a one-time employee
compensation payment to beneficiaries of employees, facilitated voluntary
contributions from our clients and employees to support the family members of
deceased employees and providing financial support for their children's
education. Other actions included disseminating guidance and information to our
employees, facilitating work from home, implementing best practices for
employees while working from home, periodic CEO messaging, various programs
aimed at employee wellness, including a global wellness program, enhanced leave
for employees affected by COVID-19, enhanced awareness towards information
security, and updated cyber security and data privacy policies, among others. We
continue to have broad travel restrictions, and while we expect some level of
travel to return, we do not expect it to be at pre-pandemic levels. We are
largely operating in virtual-only events for the safety of our employees and our
customers with some expectations of return to office for selected employees, as
and when necessary. We also implemented pandemic-specific protocols for our
essential employees whose jobs require them to be on-site or with our customers
by implementing additional safety measures at all of our facilities, including
increased frequency in cleaning and disinfecting, and enhanced hygiene and
social distancing practices.

We continue to incur additional costs in order to ensure the continuity of our
operations and support our work from home model. Such costs include purchase of
desktops and laptops for our employees, software and internet connectivity
devices, technology tools for productivity enhancement, accommodation, meal,
overtime, transportation and regular sanitization and cleaning costs of our
offices and facilities. We also expect that we will continue to incur additional
costs to monitor and improve operational efficiency of our work from home model,
implement new information technology solutions and security measures to
safeguard against information security risks and protect the health and safety
of our employees as they gradually return to the office. We believe that these
short-to-medium-term costs may benefit us in the long-term, as these steps have
broadened our "remote working" capabilities, which we expect to become a
permanent feature in our future delivery model, as well as our business
continuity plans.
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In response to certain anticipated impacts from COVID-19, we implemented a
series of temporary cost reduction measures in 2020 which continued in the first
nine months of 2021 to further preserve financial flexibility. These actions
included the postponement of certain discretionary spending including travel and
marketing expenses, reevaluating the pace of our capital expenditures,
rationalizing certain of our real estate and facilities, deferring non-critical
hiring among others.

Certain impacts of COVID-19 on our business, results of operations, financial
position and cash flow during the first nine months of 2021 has been described
above and below, however the full extent of the impact for the period beyond the
first nine months of 2021 is currently uncertain and will depend on many factors
that are not within our control, including, but not limited to: the duration and
scope of the pandemic; the effectiveness of actions taken to contain or mitigate
the pandemic, prevent or limit any reoccurrence and emergence of new variants of
the virus; governmental, business and individuals' actions that have been and
continue to be taken in response to the pandemic; development and availability
of effective treatments and vaccines, the speed at which such vaccines are
administered, the extent of vaccine aversion, as well as the effect of emerging
targeted vaccine mandates and booster vaccines, and breakthrough infections
among the fully vaccinated; significant increases in healthcare costs in the
event that a significant number of our personnel become infected with COVID-19
and require medical treatment; general economic uncertainty in key global
markets and financial market volatility; global economic conditions and levels
of economic growth; and the pace of recovery when COVID-19 subsides. Due to the
above circumstances and as described generally in this Quarterly Report on Form
10-Q, our financial results, including but not limited to net revenues, income
from operations, net income, cash flow and earnings per share, are not
necessarily indicative of the results to be expected for the full fiscal year of
2021. We continue to monitor the implications of COVID-19 on our business, as
well as our customers' and suppliers' businesses.

For additional information and risks related to COVID-19, see Item 1A - "Risk
Factors" included elsewhere in this Quarterly Report on Form 10-Q and Part I,
Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2020.

Revenues

For the three months ended September 30, 2021, we had revenues of $290.3 million
compared to revenues of $241.0 million for the three months ended September 30,
2020, an increase of $49.3 million, or 20.5%. For the nine months ended
September 30, 2021, we had revenues of $826.8 million compared to revenues of
$709.5 million for the nine months ended September 30, 2020, an increase of
$117.3 million, or 16.5%.

We serve clients mainly in the United States and the United Kingdom, with these
two regions generating 86.0% and 9.4%, respectively, of our total revenues for
the three months ended September 30, 2021, and 84.6% and 9.5%, respectively, of
our total revenues for the three months ended September 30, 2020. For the nine
months ended September 30, 2021, these two regions generated 85.8% and 9.5%,
respectively, of our total revenues and 84.7% and 9.2%, respectively, of our
total revenues for the nine months ended September 30, 2020.

For the three months ended September 30, 2021 and 2020, our total revenues from
our top ten clients accounted for 38.7% each of our total revenues. For the nine
months ended September 30, 2021 and 2020, our total revenues from our top ten
clients accounted for 38.6% and 37.3% of our total revenues, respectively. Our
revenue concentration with our top clients remains largely consistent
year-over-year and we continue to develop relationships with new clients to
diversify our client base. We believe that the loss of any of our top ten
clients could have a material adverse effect on our financial performance.
Our Business

We provide operations management and analytics services. We market our services
to our existing and prospective clients through our sales and client management
teams, which are aligned by key industry verticals and cross-industry domains
such as finance and accounting. Our sales and client management teams operate
from the United States, Europe and Australia.

Operations Management Services: We provide our clients with a range of operations management services from our Insurance, Healthcare and Emerging Business operating segments, which typically involve the transfer by our clients to EXL of certain of their business operations, such as claims processing, clinical operations, or financial transaction processing, after which we administer and manage those operations on an ongoing basis. As part of this transfer, we hire and train employees to


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work at our operations centers on the relevant business operations, implement a
process migration to these operations centers and then provide services either
to the client or directly to the client's customers. Each client contract has
different terms based on the scope, deliverables and complexity of the
engagement. We also provide consulting services related to operations management
that include industry-specific digital transformational services as well as
cross-industry finance and accounting services as part of the Emerging Business
operating segment.

We provide our services under contracts with our clients, which typically have
terms of three or more years, with some being rolling contracts with no end
dates. Typically, our clients can terminate these contracts with or without
cause and with short notice periods. These contracts provide us with a
relatively predictable revenue base for a substantial portion of our operations
management business. However, we have a long selling cycle for our services and
the budget and approval processes of prospective clients make it difficult to
predict the timing of entering into definitive agreements with new clients.
Similarly, new license sales and implementation projects for our technology
service platforms and other software-based services have a long selling cycle,
however ongoing annual maintenance and support contracts for existing
arrangements provide us with a relatively predictable revenue base.

We charge for our services using various pricing models like time-and-material
pricing, full-time-equivalent pricing, transaction-based pricing, outcome-based
pricing, subscription-based pricing and other alternative pricing models.
Outcome-based pricing arrangements are examples of non-linear pricing models
where clients link revenues from platforms and solutions and the services we
provide to usage or savings rather than the efforts deployed to provide these
services. We continue to observe a shift in the industry pricing models toward
transaction-based pricing, outcome-based pricing and other alternative pricing
models. We believe this trend will continue and we use such alternative pricing
models with some of our current clients and are seeking to move certain other
clients from a full-time-equivalent pricing model to a transaction-based or
other alternative pricing model. These alternative pricing models place the
focus on operating efficiency in order to maintain or improve our gross margins.

We have also observed that prospective larger clients are entering into
multi-vendor relationships with regard to their outsourcing needs. We believe
that the trend toward multi-vendor relationships will continue. A multi-vendor
relationship allows a client to seek more favorable pricing and other contract
terms from each vendor, which can result in significantly reduced gross margins
from the provision of services to such client for each vendor. To the extent our
large clients expand their use of multi-vendor relationships and are able to
extract more favorable contract terms from other vendors, our gross margins and
revenues may be reduced with regard to such clients if we are required to modify
the terms of our relationships with such clients to meet competition.

Analytics: Our analytics services focus on driving improved business outcomes
for our customers by unlocking deep insights from data and create data-driven
solutions across all parts of our customers' business. We also provide care
optimization and reimbursement optimization services, for our clients through
our healthcare analytics solutions and services. We also offer integrated
solutions to help our clients in cost containment by leveraging technology
platforms, customizable and configurable analytics and expertise in healthcare
reimbursements to help clients enhance their claim payment accuracy. Our teams
deliver predictive and prescriptive analytics in the areas of customer
acquisition and lifecycle management, risk underwriting and pricing, operational
effectiveness, credit and operational risk monitoring and governance, regulatory
reporting, payment integrity and care management and data management. We
enhance, modernize and enrich structured and unstructured data and use a
spectrum of advanced analytical tools and techniques, including our in-house
Machine Learning ("ML") and Artificial Intelligence ("AI") capabilities to
create insights and improve decision making for our clients. We actively
cross-sell and, where appropriate, integrate our Analytics services with other
operations management services as part of a comprehensive offering for our
clients. Our projects-based analytics services are cyclical and can be
significantly affected by variations in business cycles. In addition, our
projects-based analytics services are documented in contracts with terms
generally not exceeding one year and may not produce ongoing or recurring
business for us once the project is completed. These contracts also usually
contain provisions permitting termination of the contract after a short notice
period. The short-term nature and specificity of these projects could lead to
fluctuations and uncertainties in the revenues generated from providing
analytics services.

We anticipate that revenues from our analytics services will grow as we expand our service offerings and client base, both organically and through acquisitions.

Critical Accounting Policies and Estimates


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There have been no significant changes in our critical accounting policies and
estimates, during the three and nine months ended September 30, 2021, as
compared to the critical accounting policies and estimates referred in Part II,
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations" under "Critical Accounting Policies and Estimates" and Note 2 -
Summary of Significant Accounting Policies to our consolidated financial
statements included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2020.
Results of Operations
The following table summarizes our results of operations for the three months
and nine months ended September 30, 2021 and 2020:
                                                     Three months ended September
                                                                  30,                     Nine months ended September 30,
                                                        2021               2020               2021               2020
                                                         (dollars in millions)                 (dollars in millions)

Revenues, net                                       $    290.3          $  241.0          $    826.8          $  709.5
Cost of revenues(1)                                      177.7             152.1               507.2             473.1
Gross profit(1)                                          112.6              88.9               319.6             236.4
Operating expenses:
General and administrative expenses                          36.2           26.8                  103.4           84.5
Selling and marketing expenses                               21.7           15.3                   59.7           42.8
Depreciation and amortization expense                        12.3           12.4                   36.7           37.3

Total operating expenses                                  70.2              54.5               199.8             164.6
Income from operations                                    42.4              34.4               119.8              71.8
Foreign exchange gain, net                                 1.2               0.7                 3.0               3.5
Interest expense                                          (1.8)             (2.6)               (6.8)             (8.6)
Other income, net                                          1.7               2.5                 5.3               9.2
Loss on settlement of convertible notes                  (12.8)                -               (12.8)                -

Income before income tax expense and earnings from equity affiliates

                                         30.7              35.0               108.5              75.9
Income tax expense                                         4.2               8.5                22.1              18.4
Income before earnings from equity affiliates             26.5              26.5                86.4              57.5
Loss from equity-method investment                           -               0.1                   -               0.2
Net income attributable to ExlService Holdings,
Inc. stockholders                                   $     26.5          $   26.4          $     86.4          $   57.3

(1) Exclusive of depreciation and amortization expense.


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Three Months Ended September 30, 2021 Compared to Three Months Ended
September 30, 2020
Revenues.

The following table summarizes our revenues by reportable segments for the three months ended September 30, 2021 and 2020:


                                Three months ended September 30,                          Percentage
                                       2021                       2020        Change        change
                                     (dollars in millions)
 Insurance             $            98.0                        $  87.8      $ 10.2           11.6  %
 Healthcare                         27.3                           25.1         2.2            8.9  %
 Emerging Business                  44.5                           37.6         6.9           18.5  %
 Analytics                         120.5                           90.5        30.0           33.1  %
 Total revenues, net   $           290.3                        $ 241.0      $ 49.3           20.5  %


Revenues for the three months ended September 30, 2021 were $290.3 million, up $49.3 million, or 20.5%, compared to the three months ended September 30, 2020.



Revenue growth in Insurance of $10.2 million was primarily driven by expansion
of business from our existing clients aggregating to $9.9 million and an
increase in revenues of $0.3 million that was mainly attributable to the
appreciation of the U.K. pound sterling against the U.S. dollar during the three
months ended September 30, 2021, compared to the three months ended
September 30, 2020. Insurance revenues were 33.8% and 36.4% of our total
revenues in the three months ended September 30, 2021 and September 30, 2020,
respectively.

Revenue growth in Healthcare of $2.2 million was primarily driven by expansion
of business from our new clients aggregating to $2.2 million during the three
months ended September 30, 2021. Healthcare revenues were 9.4% and 10.4% of our
total revenues in the three months ended September 30, 2021 and September 30,
2020, respectively.

Revenue growth in Emerging Business of $6.9 million was primarily driven by
expansion of business from our new and existing clients aggregating to $6.8
million and an increase in revenues of $0.1 million that was mainly attributable
to the appreciation of the U.K. pound sterling against the U.S. dollar during
the three months ended September 30, 2021, compared to the three months ended
September 30, 2020. Emerging Business revenues were 15.3% and 15.6% of our total
revenues in the three months ended September 30, 2021 and September 30, 2020,
respectively.

Revenue growth in Analytics of $30.0 million was attributable to the higher
volumes in our annuity and project-based engagements from our new and existing
clients of $29.6 million and an increase in revenues of $0.4 million mainly
attributable to the appreciation of the U.K. pound sterling and the South
African ZAR against the U.S. dollar during the three months ended September 30,
2021, compared to the three months ended September 30, 2020. Analytics revenues
were 41.5% and 37.5% of our total revenues in the three months ended
September 30, 2021 and September 30, 2020, respectively.

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                                                     Cost of Revenues                                                         Gross Margin
                          Three months ended September
                                       30,                       Change            Percentage              Three months ended September 30,             Change
                             2021               2020                                 change                   2021                  2020
                              (dollars in millions)
Insurance                $     61.4          $   56.8          $   4.6                     8.1  %                37.3  %               35.3  %             2.0  %
Healthcare                     17.1              18.0             (0.9)                   (5.0) %                37.6  %               28.4  %             9.2  %
Emerging Business              23.7              20.8              2.9                    13.9  %                46.8  %               44.7  %             2.1  %
Analytics                      75.5              56.5             19.0                    33.6  %                37.3  %               37.6  %            (0.3) %
Total                    $    177.7          $  152.1          $  25.6                    16.8  %                38.8  %               36.9  %             1.9  %



For the three months ended September 30, 2021, cost of revenues was $177.7
million compared to $152.1 million for the three months ended September 30,
2020, an increase of $25.6 million, or 16.8%. Our gross margin for the three
months ended September 30, 2021 was 38.8% compared to 36.9% for the three months
ended September 30, 2020, an increase of 190 basis points ("bps") primarily
driven by higher revenues and operational efficiencies during the three months
ended September 30, 2021, compared to three months ended September 30, 2020.

The increase in cost of revenues in Insurance of $4.6 million for the three
months ended September 30, 2021 was primarily due to increases in
employee-related costs of $6.0 million, partially offset by lower travel costs
of $1.3 million and foreign exchange gain, net of hedging $0.1 million. Gross
margin in Insurance increased by 200 bps during the three months ended
September 30, 2021, compared to the three months ended September 30, 2020,
primarily due to operational efficiencies during the three months ended
September 30, 2021, compared to the three months ended September 30, 2020.

The decrease in cost of revenues in Healthcare of $0.9 million for the three
months ended September 30, 2021 was primarily due to decreases in
employee-related costs of $0.5 million and lower technology costs of $0.4
million. Gross margin in Healthcare increased by 920 bps during the three months
ended September 30, 2021, compared to the three months ended September 30, 2020,
primarily due to higher revenues and operational efficiencies during the three
months ended September 30, 2021, compared to the three months ended
September 30, 2020.

The increase in cost of revenues in Emerging Business of $2.9 million for the
three months ended September 30, 2021 was primarily due to increases in
employee-related costs of $2.5 million and higher technology costs of $0.4
million. Gross margin in Emerging Business increased by 210 bps during the three
months ended September 30, 2021, compared to the three months ended
September 30, 2020, primarily due to higher revenues and operational
efficiencies during the three months ended September 30, 2021, compared to the
three months ended September 30, 2020.

The increase in cost of revenues in Analytics of $19.0 million for the three
months ended September 30, 2021 was primarily due to increases in
employee-related costs of $15.8 million and higher other operating costs of $4.1
million, partially offset by lower infrastructure costs of $0.5 million and
foreign exchange gain, net of hedging $0.4 million. Gross margin in Analytics
decreased by 30 bps during the three months ended September 30, 2021, compared
to the three months ended September 30, 2020, primarily due to increases in
employee-related costs, partially offset by higher revenues and operational
efficiencies during the three months ended September 30, 2021, compared to the
three months ended September 30, 2020.
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Selling, General and Administrative ("SG&A") Expenses.
                                                        Three months ended September 30,              Change             Percentage
                                                             2021                   2020                                   change
                                                              (dollars in millions)
General and administrative expenses                  $          36.2            $    26.8          $    9.4                      35.1  %
Selling and marketing expenses                                  21.7                 15.3               6.4                      41.8  %

Selling, general and administrative expenses $ 57.9

$    42.1          $   15.8                      37.5  %
As a percentage of revenues                                     19.9    %            17.5  %



The increase in SG&A expenses of $15.8 million was primarily due to higher
employee-related costs of $13.5 million, COVID-19-related expenses of $0.7
million primarily related to financial support to family members of deceased
employees, higher other operating costs of $2.6 million and higher travel costs
of $0.3 million, partially offset by lower facilities costs of $1.3 million due
to optimization of office space.
Depreciation and Amortization.
                                                      Three months ended September 30,            Change             Percentage
                                                           2021                   2020                                 change
                                                            (dollars in millions)
Depreciation expense                               $           9.3            $     9.0          $  0.3                       3.3  %
Intangible amortization expense                                3.0                  3.4            (0.4)                    (11.8) %
Depreciation and amortization expense              $          12.3            $    12.4          $ (0.1)                     (0.8) %
As a percentage of revenues                                    4.2    %     

5.2 %





The decrease in intangibles amortization expense of $0.4 million was primarily
due to end of useful lives for certain intangible assets during the three months
ended September 30, 2021, compared to the three months ended September 30, 2020.
The increase in depreciation expense of $0.3 million was primarily due to
depreciation related to our investments in new operating centers, internally
developed software and accelerated depreciation resulting from a reduction in
useful lives related to certain operating centers, due to the impact of COVID-19
during the three months ended September 30, 2021, compared to the three months
ended September 30, 2020.

Income from Operations. Income from operations increased by $8.0 million, or
23.3%, from $34.4 million for the three months ended September 30, 2020 to $42.4
million for the three months ended September 30, 2021, primarily due to higher
revenues, partially offset by higher cost of revenues and higher SG&A expenses
during the three months ended September 30, 2021. As a percentage of revenues,
income from operations increased from 14.3% for the three months ended
September 30, 2020 to 14.6% for the three months ended September 30, 2021.

Foreign Exchange Gain/(Loss). Net foreign exchange gains and losses are
primarily attributable to the movement of the U.S. dollar against the Indian
rupee, the U.K. pound sterling, the Philippine peso and the South African ZAR
during the three months ended September 30, 2021. The average exchange rate of
the U.S. dollar against the Indian rupee decreased from 74.06 during the three
months ended September 30, 2020 to 73.88 during the three months ended
September 30, 2021. The average exchange rate of the U.K. pound sterling against
the U.S. dollar increased from 1.31 during the three months ended September 30,
2020 to 1.37 during the three months ended September 30, 2021. The average
exchange rate of the U.S. dollar against the Philippine peso increased from
48.71 during the three months ended September 30, 2020 to 50.24 during the three
months ended September 30, 2021. The average exchange rate of the U.S. dollar
against the South African ZAR decreased from 16.84 during the three months ended
September 30, 2020 to 14.76 during the three months ended September 30, 2021.

We recorded a net foreign exchange gain of $1.2 million for the three months ended September 30, 2021, compared to the net foreign exchange gain of $0.7 million for three months ended September 30, 2020.


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Interest expense. Interest expense decreased from $2.6 million for the three
months ended September 30, 2020 to $1.8 million for the three months ended
September 30, 2021, primarily due to settlement of outstanding obligations under
the Notes on August 27, 2021, partially offset by increase in interest expense
under our Credit Facility due to higher effective interest rates of 2.3% during
the three months ended September 30, 2021, compared to 1.9% during the three
months ended September 30, 2020.
Other Income, net.
                                                       Three months ended September 30,                                 Percentage
                                                            2021                   2020             Change                change
                                                             (dollars in millions)
Gain on sale and mark-to-market of mutual funds     $             1.2          $     2.0          $   (0.8)                    (40.0) %
Interest and dividend income                                      0.8                0.8                 -                         -  %
Other, net                                                       (0.3)              (0.3)                -                         -  %
Other income, net                                   $             1.7          $     2.5          $   (0.8)                    (32.0) %



Other income, net decreased by $0.8 million, from $2.5 million for the three
months ended September 30, 2020 to $1.7 million for the three months ended
September 30, 2021, primarily due to lower amount invested in mutual funds and
lower returns on such investments of $0.8 million, during the three months ended
September 30, 2021, compared to the three months ended September 30, 2020.

Loss on settlement of Notes. On August 27, 2021, we settled our outstanding
obligations under the Notes and recognized a loss of $12.8 million during the
three months ended September 30, 2021. See Note 17 - Borrowings to our unaudited
consolidated financial statements.

Income Tax Expense. The effective tax rate decreased from 24.3% during the three
months ended September 30, 2020 to 13.7% during the three months ended
September 30, 2021. We recorded income tax expense of $4.2 million and $8.5
million for the three months ended September 30, 2021 and 2020, respectively.
The decrease in income tax expense was primarily a result of (i) the recording
of a one-time deferred tax benefit of $2.4 million on settlement of the Notes
during the three months ended September 30, 2021, (ii) the recording of excess
tax benefits related to stock awards of $0.5 million pursuant to ASU No. 2016-09
during the three months ended September 30, 2021, and (iii) lower profit during
the three months ended September 30, 2021, compared to the three months ended
September 30, 2020.

Net Income. Net income increased from $26.4 million for the three months ended
September 30, 2020 to $26.5 million for the three months ended September 30,
2021, primarily due to increase in income from operations of $8.0 million, lower
income tax expense of $4.3 million, lower interest expense of $0.8 million,
higher net foreign exchange gain of $0.5 million and lower loss from
equity-method investment of $0.1 million, partially offset by loss on settlement
of the Notes of $12.8 million and lower other income, net of $0.8 million . As a
percentage of revenues, net income decreased from 11.0% for the three months
ended September 30, 2020 to 9.1% for the three months ended September 30, 2021.

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Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020



Revenues.

The following table summarizes our revenues by reportable segments for the nine months ended September 30, 2021 and 2020:



                               Nine months ended September 30,                           Percentage
                                      2021                      2020        Change         change
                                    (dollars in millions)
Insurance             $           283.8                       $ 252.9      $  30.9           12.3  %
Healthcare                         85.9                          77.1          8.8           11.3  %
Emerging Business                 122.9                         114.9          8.0            6.9  %
Analytics                         334.2                         264.6         69.6           26.3  %
Total revenues, net   $           826.8                       $ 709.5      $ 117.3           16.5  %



Revenues for the nine months ended September 30, 2021 were $826.8 million, up $117.3 million, or 16.5%, compared to the nine months ended September 30, 2020.



Revenue growth in Insurance of $30.9 million was primarily driven by expansion
of business from our existing clients aggregating to $28.3 million and an
increase in revenues $2.6 million that was mainly attributable to the
appreciation of the Australian dollar, the U.K. pound sterling and the South
African ZAR against the U.S. dollar during the nine months ended September 30,
2021, compared to the nine months ended September 30, 2020. Insurance revenues
were 34.3% and 35.6% of our total revenues in the nine months ended
September 30, 2021 and September 30, 2020, respectively.

Revenue growth in Healthcare of $8.8 million was primarily driven by expansion
of business from our new and existing clients aggregating to $8.8 million during
the nine months ended September 30, 2021. Healthcare revenues were 10.4% and
10.9% of our total revenues in the nine months ended September 30, 2021 and
September 30, 2020, respectively.

Revenue growth in Emerging Business of $8.0 million was primarily driven by
expansion of business from our new clients and existing clients aggregating to
$7.1 million and an increase in revenues of $0.9 million that was mainly
attributable to the appreciation of the U.K. pound sterling and the Indian rupee
against the U.S. dollar during the nine months ended September 30, 2021 compared
to the nine months ended September 30, 2020. Emerging Business revenues were
14.9% and 16.2% of our total revenues in the nine months ended September 30,
2021 and September 30, 2020, respectively.

Revenue growth in Analytics of $69.6 million was attributable to the higher
volumes in our annuity and project based engagements from our new and existing
clients of $67.5 million and an increase in revenues $2.1 million mainly
attributable to the appreciation of the U.K. pound sterling and the South
African ZAR against the U.S. dollar during the nine months ended September 30,
2021, compared to the nine months ended September 30, 2020. Analytics revenues
were 40.4% and 37.3% of our total revenues in the nine months ended
September 30, 2021 and September 30, 2020, respectively.

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Cost of Revenues and Gross Margin: The following table sets forth cost of revenues and gross margin of our reportable segments.


                                                        Cost of Revenues                                                       Gross Margin
                               Nine months ended September
                                           30,                                                              Nine months ended September 30,
                                  2021              2020           Change         Percentage change            2021                  2020               Change
                                  (dollars in millions)
Insurance                     $   176.9          $ 174.9          $  2.0                     1.1  %               37.7  %              30.8  %             6.9  %
Healthcare                         52.2             57.2            (5.0)                   (8.7) %               39.3  %              25.8  %            13.5  %
Emerging Business                  66.8             68.7            (1.9)                   (2.8) %               45.6  %              40.2  %             5.4  %
Analytics                         211.3            172.3            39.0                    22.6  %               36.8  %              34.9  %             1.9  %
Total                         $   507.2          $ 473.1          $ 34.1                     7.2  %               38.6  %              33.3  %             5.3  %




For the nine months ended September 30, 2021, cost of revenues was $507.2
million compared to $473.1 million for the nine months ended September 30, 2020,
an increase of $34.1 million, or 7.2%. Our gross margin for the nine months
ended September 30, 2021 was 38.6% compared to 33.3% for nine months ended
September 30, 2020, an increase of 530 bps primarily driven by higher revenues,
operational efficiencies and lower COVID-19 related expenses during the nine
months ended September 30, 2021, compared to the nine months ended September 30,
2020.

The increase in cost of revenues in Insurance of $2.0 million for the nine
months ended September 30, 2021 was primarily due to increases in
employee-related costs of $7.9 million and higher technology costs of $0.5
million, partially offset by lower travel costs of $6.1 million and foreign
exchange gain, net of hedging of $0.3 million. Gross margin in Insurance
increased by 690 bps during the nine months ended September 30, 2021, compared
to the nine months ended September 30, 2020, primarily due to higher revenues,
expansion in margin in certain existing clients, operational efficiencies and
lower COVID-19 related expenses during the nine months ended September 30, 2021,
compared to the nine months ended September 30, 2020.

The decrease in cost of revenues in Healthcare of $5.0 million for the nine
months ended September 30, 2021 was primarily due to decreases in
employee-related costs of $4.8 million, lower travel costs of $0.5 million and
lower technology costs of $0.2 million, partially offset by higher facility
costs of $0.3 million and foreign exchange loss, net of hedging $0.2 million.
Gross margin in Healthcare increased by 1,350 bps during the nine months ended
September 30, 2021, compared to the nine months ended September 30, 2020,
primarily due to higher revenues, operational efficiencies and lower COVID-19
related expenses during the nine months ended September 30, 2021, compared to
the nine months ended September 30, 2020.

The decrease in cost of revenues in Emerging Business of $1.9 million for the
nine months ended September 30, 2021 was primarily due to decreases in
employee-related costs of $1.3 million, lower facility costs of $0.5 million,
lower travel costs of $0.5 million and foreign exchange gain, net of hedging
$0.3 million, partially offset by higher technology costs of $0.7 million,
primarily due to increased usage of the work from home model. Gross margin in
Emerging Business increased by 540 bps during the nine months ended
September 30, 2021, compared to the nine months ended September 30, 2020,
primarily due to higher revenues, operational efficiencies and lower COVID-19
related expenses during the nine months ended September 30, 2021, compared to
the nine months ended September 30, 2020.

The increase in cost of revenues in Analytics of $39.0 million for the nine
months ended September 30, 2021 was primarily due to increases in
employee-related costs of $29.1 million, higher other operating costs of $11.6
million and higher technology costs of $0.7 million, primarily due to increased
usage of the work from home model. This was partially offset by lower travel
costs of $1.1 million, lower facility costs of $0.6 million and foreign exchange
gain, net of hedging of $0.7 million. Gross margin in Analytics increased by 190
bps during the nine months ended September 30, 2021, compared to the nine months
ended September 30, 2020, primarily due to higher revenues, operational
efficiencies and lower COVID-19 related expenses during the nine months ended
September 30, 2021, compared to the nine months ended September 30, 2020.


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Selling, General and Administrative ("SG&A") Expenses.
                                                 Nine months ended September 30,
                                                     2021                  2020              Change          Percentage change
                                                      (dollars in millions)
General and administrative expenses           $        103.4           $     84.5          $  18.9                      22.4  %
Selling and marketing expenses                          59.7                 42.8             16.9                      39.5  %
Selling, general and administrative expenses  $        163.1           $    127.3          $  35.8                      28.1  %
As a percentage of revenues                             19.7   %             17.9  %



The increase in SG&A expenses of $35.8 million was primarily due to higher
employee-related costs of $33.4 million, COVID-19-related expenses of $2.9
million primarily related to financial support to family members of deceased
employees, higher other operating costs of $4.5 million, partially offset by
lower facilities costs of $4.1 million due to optimization of office space and
lower travel costs of $0.9 million due to COVID-19 cost reduction measures.

Depreciation and Amortization.


                                                Nine months ended September 30,
                                                     2021                  2020            Change           Percentage change
                                                     (dollars in millions)
Depreciation expense                         $          26.9            $   26.3          $  0.6                         2.3  %
Intangible amortization expense                          9.8                11.0            (1.2)                      (10.9) %
Depreciation and amortization expense        $          36.7            $   37.3          $ (0.6)                       (1.6) %
As a percentage of revenues                              4.4    %           

5.3 %





The decrease in intangibles amortization expense of $1.2 million was primarily
due to end of useful lives for certain intangible assets during the nine months
ended September 30, 2021, compared to the nine months ended September 30, 2020.
The increase in depreciation expense of $0.6 million was primarily due to
depreciation related to our investments in new operating centers, internally
developed software and accelerated depreciation resulting from a reduction in
useful lives related to certain operating centers, due to the impact of COVID-19
during the nine months ended September 30, 2021, compared to the nine months
ended September 30, 2020.

Income from Operations. Income from operations increased by $48.0 million, or
66.9%, from $71.8 million for the nine months ended September 30, 2020 to $119.8
million for the nine months ended September 30, 2021, primarily due to higher
revenues, partially offset by higher cost of revenues, higher SG&A expenses
during the nine months ended September 30, 2021. As a percentage of revenues,
income from operations increased from 10.1% for the nine months ended
September 30, 2020 to 14.5% for the nine months ended September 30, 2021.

Foreign Exchange Gain/(Loss). Net foreign exchange gains and losses are
primarily attributable to the movement of the U.S. dollar against the Indian
rupee, the U.K. pound sterling, the Philippine peso and the South African ZAR
during the nine months ended September 30, 2021. The average exchange rate of
the U.S. dollar against the Indian rupee decreased from 74.18 during the nine
months ended September 30, 2020 to 73.57 during the nine months ended
September 30, 2021. The average exchange rate of the U.K. pound sterling against
the U.S. dollar increased from 1.27 during the nine months ended September 30,
2020 to 1.38 during the nine months ended September 30, 2021. The average
exchange rate of the U.S. dollar against the Philippine peso decreased from
49.94 during the nine months ended September 30, 2020 to 48.94 during the nine
months ended September 30, 2021. The average exchange rate of the U.S. dollar
against the South African ZAR decreased from 16.88 during the nine months ended
September 30, 2020 to 14.64 during the nine months ended September 30, 2021.

We recorded a net foreign exchange gain of $3.0 million for the nine months ended September 30, 2021, compared to the net foreign exchange gain of $3.5 million for the nine months ended September 30, 2020.

Interest expense. Interest expense decreased from $8.6 million for the nine months ended September 30, 2020 to $6.8 million for the nine months ended September 30, 2021, primarily due to settlement of outstanding obligations under the Notes


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on August 27, 2021, and lower effective interest rates of 2.0% under our Credit
Facility during the nine months ended September 30, 2021, compared to 2.4%
during the nine months ended September 30, 2020.

Other Income, net.

                                                     Nine months ended September 30,
                                                          2021                  2020            Change         Percentage change
Gain on sale and mark-to-market of mutual funds   $             3.9          $    7.1          $ (3.2)                   (45.1) %
Interest and dividend income                                    2.1               1.9             0.2                     10.5  %
Other, net                                                     (0.7)              0.2            (0.9)                  (450.0) %
Other income, net                                 $             5.3          $    9.2          $ (3.9)                   (42.4) %




Other income, net decreased by $3.9 million, from $9.2 million for the nine
months ended September 30, 2020 to $5.3 million for the nine months ended
September 30, 2021, primarily due to lower amount invested in mutual funds and
lower returns on such investments of $3.2 million, partially offset by increase
in interest income of $0.2 million during the nine months ended September 30,
2021, compared to the nine months ended September 30, 2020.

Loss on settlement of Notes. On August 27, 2021, we settled our outstanding obligations under the Notes and recognized loss of $12.8 million during the nine months ended September 30, 2021. See Note 17 - Borrowings to our unaudited consolidated financial statements.



Income Tax Expense. The effective tax rate decreased from 24.3% during the nine
months ended September 30, 2020 to 20.3% during the nine months ended
September 30, 2021. We recorded income tax expense of $22.1 million and $18.4
million for the nine months ended September 30, 2021 and 2020, respectively. The
increase in the income tax expense was primarily a result of higher profit
during the nine months ended September 30, 2021, compared to the nine months
ended September 30, 2020, and the recording of higher excess tax benefits
related to stock awards of $1.8 million pursuant to ASU No. 2016-09 during the
nine months ended September 30, 2020, compared to $1.6 million during the nine
months ended September 30, 2021, partially offset by (i) the recording of a
one-time deferred tax benefit of $2.4 million on settlement of the Notes during
the nine months ended September 30, 2021, and (ii) the recording of a one-time
tax expense of $1.3 million due to the election of a new tax regime, during the
nine months ended September 30, 2020, for two of our Indian subsidiaries that
provides for a lower tax rate on earnings in exchange for foregoing certain tax
credits, including minimum alternative tax credits.

Net Income. Net income increased from $57.3 million for the nine months ended
September 30, 2020 to $86.4 million for the nine months ended September 30,
2021, primarily due to increase in income from operations of $48.0 million,
lower interest expense of $1.8 million and lower loss from equity-method
investment of $0.2 million, partially offset by loss on settlement of the Notes
of $12.8 million, lower other income, net of $3.9 million, higher income tax
expense of $3.7 million and lower foreign exchange gain, net of $0.5 million. As
a percentage of revenues, net income increased from 8.1% for the nine months
ended September 30, 2020 to 10.5% for the nine months ended September 30, 2021.

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Liquidity and Capital Resources
                                                                          

Nine months ended September 30,


                                                                              2021                   2020
                                                                               (dollars in millions)
Opening cash, cash equivalents and restricted cash                    $           225.5          $    127.0
Net cash provided by operating activities                                         113.8               126.3
Net cash (used for)/provided by investing activities                              (21.5)               11.1
Net cash used for financing activities                                           (189.1)              (48.4)
Effect of exchange rate changes                                                    (5.0)                  -
Closing cash, cash equivalents and restricted cash                    $     

123.7 $ 216.0





As of September 30, 2021 and 2020, we had $284.3 million and $362.6 million,
respectively, in cash, cash equivalents and short-term investments, of which
$254.2 million and $300.7 million, respectively, is located in foreign
jurisdictions that upon distribution may be subject to withholding and other
taxes. We periodically evaluate opportunities to distribute cash among our group
entities to fund our operations in the United States and other geographies, and
as and when we decide to distribute, we may have to accrue, additional taxes in
accordance with local tax laws, rules and regulations in the relevant foreign
jurisdictions. During the three months ended September 30, 2021, we repatriated
to the United States $17.0 million (net of $0.9 million withholding taxes) from
India. During the nine months ended September 30, 2021, we repatriated to the
United States $66.0 million (net of $3.5 million withholding taxes) from India
and $42.5 million (net of $7.5 million withholding taxes) from the Philippines.
These distributions do not constitute a change in our permanent reinvestment
assertion. We base our decision to continue to indefinitely reinvest earnings in
India and the Philippines on our estimate of the working capital required to
support our operations in these geographies and periodically review our capital
initiatives to support and expand our global operations, as well as an
economically viable rate of return on our investments made in India and the
Philippines as compared to those made in the United States.

Operating Activities: Net cash provided by operating activities was $113.8
million for the nine months ended September 30, 2021 as compared to net cash
provided by operating activities of $126.3 million for the nine months ended
September 30, 2020, reflecting higher working capital needs, offset by higher
cash earnings. The major drivers contributing to the decrease of $12.5 million
year-over-year included the following:

•Changes in accounts receivable, including advance billings, contributed lower
cash flow of $78.4 million in the nine months ended September 30, 2021 compared
to the nine months ended September 30, 2020. The decrease was a result of higher
accounts receivable resulting from revenue growth, change in credit terms for
certain clients during the nine months ended September 30, 2021, and advance
collections during the three months ended December 31, 2020. Lower cash flows
were also affected by our accounts receivable days sales outstanding, which
marginally increased to 58 days as of September 30, 2021 from 57 days as of
September 30, 2020.

•Increase in net income of $29.1 million in the nine months ended September 30,
2021 compared to the nine months ended September 30, 2020, primarily due to an
increase in income from operations of $48.0 million driven by higher revenues,
lower interest expense of $1.8 million, partially offset by loss on settlement
of the Notes of $12.8 million, lower other income, net of $3.9 million, and
higher income tax expense of $3.7 million.

•Increase in accrued employee costs, accrued expenses and other liabilities
contributed higher cash flow of $56.3 million in the nine months ended
September 30, 2021 compared to the nine months ended September 30, 2020. The
increase was primarily due to lower payment and higher provisions of annual
performance incentives of $37.2 million, higher other employee cost accruals of
$2.5 million and higher accrued expenses and other liabilities of $16.6 million,
during the nine months ended September 30, 2021 compared to the nine months
ended September 30, 2020.

•Other drivers decreasing cash flows during the nine months ended September 30,
2021 compared to the nine months ended September 30, 2020 included: income tax
payments, net of refunds, of $19.6 million, primarily due to higher advance
income tax payments on higher net income.

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Investing Activities: Cash flows used for investing activities were $21.5
million for the nine months ended September 30, 2021 as compared to cash flows
provided by investing activities of $11.1 million for the nine months ended
September 30, 2020. The decrease is mainly due to net redemption of investments
of $6.7 million during nine months ended September 30, 2021 as compared to net
redemption of investments of $45.8 million during the nine months ended
September 30, 2020. This was partially offset by lower capital expenditures for
purchase of long-lived assets, including investments in infrastructure,
technology assets, software and product developments of $5.8 million during the
nine months ended September 30, 2021 as compared to the nine months ended
September 30, 2020 and acquisition of an additional stake in our equity
affiliate of $0.7 million during the nine months ended September 30, 2020.

Financing Activities: Cash flows used for financing activities were $189.1
million during the nine months ended September 30, 2021 as compared to cash
flows used for financing activities of $48.4 million during the nine months
ended September 30, 2020. The increase in cash flows used for financing
activities was primarily due to higher net repayment of our borrowings of $94.0
million under our revolving Credit Facility and the Notes and higher purchases
of treasury stock by $46.7 million under our share repurchase program during the
nine months ended September 30, 2021 as compared to the nine months ended
September 30, 2020.

We expect to use cash from operating activities to maintain and expand our
business by making investments primarily related to new facilities and capital
expenditures associated with leasehold improvements to build our facilities,
digital capabilities and purchase telecommunications equipment and computer
hardware and software in connection with managing client operations.

We incurred $29.0 million of capital expenditures in the nine months ended
September 30, 2021. We expect to incur capital expenditures of between $35.0
million and $40.0 million in 2021, primarily to meet our growth requirements,
including additions to our facilities as well as investments in technology
applications, product development, digital technology, advanced automation,
robotics and infrastructure.

In connection with any tax assessment orders that have been issued or may be
issued against us or our subsidiaries, we may be required to deposit additional
amounts with respect to such assessment orders (see Note 24 - Commitments and
Contingencies to our unaudited consolidated financial statements herein for
further details). We anticipate that we will continue to rely upon cash from
operating activities to finance our working capital needs, capital expenditures
and smaller acquisitions. If we have significant growth through acquisitions, we
may need to obtain additional financing.

The Coronavirus Aid, Relief, and Economic Security Act, (the "CARES Act") allows
employers to defer the payment of the employer share of Federal Insurance
Contributions Act ("FICA") taxes for the period from April 1, 2020 and ending
December 31, 2020. As of September 30, 2021 and December 31, 2020, we deferred
our contributions to FICA of $6.3 million each under the CARES Act. The deferred
amount will be payable as follows: (1) 50% of the deferred amount will be paid
on or before December 31, 2021 and (2) the remaining 50% of the deferred amount
will be paid on or before December 31, 2022.
Financing Arrangements (Debt Facility)
The following tables summarizes our Debt balances as of September 30, 2021 and
December 31, 2020:



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                                       As of September 30, 2021                            As of December 31, 2020
                                         (dollars in millions)                              (dollars in millions)
                                      Revolving Credit                      Revolving Credit
                                          Facility        Total                 Facility                  Notes             Total
Current portion of long-term
borrowings                           $          15.0    $  15.0          $              25.0          $        -          $  25.0

Long-term borrowings                 $         170.0    $ 170.0          $              64.0          $    150.0          $ 214.0
Unamortized debt discount                          -          -                            -               (11.2)           (11.2)
Unamortized debt issuance
costs*                                             -          -                            -                (0.8)            (0.8)
Long-term borrowings                 $         170.0    $ 170.0          $              64.0          $    138.0          $ 202.0
Total borrowings                     $         185.0    $ 185.0          $              89.0          $    138.0          $ 227.0


*Unamortized debt issuance costs for our revolving Credit Facility of $0.3
million and $0.5 million as of September 30, 2021 and December 31, 2020,
respectively, is presented under "Other current assets" and "Other assets," as
applicable in our consolidated balance sheets.
On August 27, 2021, we entered into a Payoff and Termination Agreement (the
"Payoff and Termination Agreement") with the Purchaser, pursuant to which we
prepaid and settled its outstanding obligations under the Notes for an aggregate
consideration of $236.7 million, excluding accrued and unpaid interest under the
Notes calculated through and including, August 26, 2021, in the form of a
combination of cash and share of our common stock. As a result, we made a cash
payment of $200.0 million to the Purchaser and satisfied the remainder of the
obligation under the Notes by issuing to the Purchaser 310,394 shares of our
common stock calculated at $118.37 per share based on a 20-day volume weighted
average price ending on, and including, August 26, 2021. We satisfied the cash
payment obligation under the Payoff and Termination Agreement by drawing
$200.0 million from our existing revolving Credit Facility, and our common stock
was issued from our existing treasury shares. See Note 17 - Borrowings and Note
18 - Capital Structure to our unaudited consolidated financial statements herein
for further details.
Off-Balance Sheet Arrangements
In the ordinary course of business, we provide standby letters of credit to
third parties primarily for facility leases. As of September 30, 2021 and
December 31, 2020, we had outstanding letters of credit of $0.5 million each,
that were not recognized in our unaudited and audited consolidated balance
sheets, respectively. These are not reasonably likely to have, a current or
future material effect on our financial condition, revenues or expenses, results
of operations, liquidity, capital expenditures or capital resources. We had no
other off-balance sheet arrangements or obligations.
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Contractual Obligations
The following table sets forth our contractual obligations as of September 30,
2021:
                                                            Payment Due by Period
                                               Less than         1-3         4-5         After
                                                 1 year         years       years       5 years       Total
                                                                   (dollars in millions)
  Finance leases                              $      0.2      $   0.2      $  0.1      $     -      $   0.5
  Operating leases(a)                               24.3         43.2        20.9         28.2        116.6
  Purchase obligations                               5.2            -           -            -          5.2
  Other obligations(b)                               2.8          5.0         4.0          7.0         18.8
  Borrowings:
  Principal payments                                15.0        170.0           -            -        185.0
  Interest payments(c)                               1.9          0.2           -            -          2.1

Total contractual cash obligations(d) $ 49.4 $ 218.6 $ 25.0 $ 35.2 $ 328.2






(a)Represents undiscounted operating lease liabilities payable over the lease
term.
(b)Represents estimated employee benefit payments under the Gratuity Plan.
(c)Interest on borrowings is calculated based on the interest rate on the
outstanding borrowings as of September 30, 2021.
(d)Excludes $0.9 million related to uncertain tax positions, since the extent of
the amount and timing of payment is currently not reliably estimable or
determinable.

Certain units of our Indian subsidiaries were established as 100%
Export-Oriented units under the Software Technology Parks of India or Special
Economic Zone scheme promulgated by the Government of India. These units are
exempt from customs, central excise duties, and levies on imported and
indigenous capital goods, stores, and spares. We have undertaken to pay custom
duties, service taxes, levies, and liquidated damages payable, if any, in
respect of imported and indigenous capital goods, stores, and spares consumed
duty free, in the event that certain terms and conditions are not fulfilled. We
believe, however, that these units have in the past satisfied and will continue
to satisfy the required conditions.

Our operations centers in the Philippines are registered with the Philippine
Economic Zone Authority. The registration provides us with certain fiscal
incentives on the import of capital goods and local purchase of services and
materials and requires our Philippines subsidiary to meet certain performance
and investment criteria. We believe that these centers have in the past
satisfied and will continue to satisfy the required criteria.
Recent Accounting Pronouncements
For a description of recent accounting pronouncements, see Note 2-"Recent
Accounting Pronouncements" to the unaudited consolidated financial statements
contained herein.
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