Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.


Executive Summary

Cognizant is one of the world’s leading professional services companies, engineering modern business for the digital era. Our services include digital services and solutions, consulting, application development, systems integration, application testing, application maintenance, infrastructure services and business process services. Digital services have become an increasingly important part of our portfolio, aligning with our clients' focus on becoming data-enabled, customer-centric and differentiated businesses. We are focused on continued investment in four key areas of digital: IoT, AI, experience-driven software engineering and cloud. We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers.

Q3 2021 Financial Results

During the quarter ended September 30, 2021, revenues increased by $501 million as compared to the quarter ended September 30, 2020, representing growth of 11.8%, or 11.0% on a constant currency basis1. Our recently completed acquisitions contributed 300 basis points to our revenue growth. Our revenue growth also reflected our clients' continued adoption and integration of digital technologies and the acceleration in the demand for cloud, mobile workplace solutions, e-commerce, automation and AI and was aided by the negative impact on 2020 revenues of the COVID-19 pandemic. Revenues in our Communications, Media and Technology segment benefited from our technology clients' growing demand for services related to digital content. Revenue growth was strong among our manufacturing, logistics, energy and utilities clients in our Products and Resources segment due to their continued adoption and integration of digital technologies. Revenue growth in our Healthcare segment was driven by increased demand for our services from our pharmaceutical clients. We continue to experience pricing pressure on our non-digital services as our clients, particularly those in our Financial Services segment, optimize the cost of supporting their legacy systems and operations.

Our operating margin increased to 15.4% for the quarter ended September 30, 2021, from 14.2% for the quarter ended September 30, 2020. Our Adjusted Operating Margin1 decreased slightly to 15.8% for the quarter ended September 30, 2021 from 15.9% for the September 30, 2020. Our 2021 GAAP and Adjusted Operating Margins benefited from savings from the implementation of the delivery cost optimization initiatives of our 2020 Fit for Growth Plan. These benefits were partially offset by investments intended to drive and support organic revenue growth, including additions to our sales organization and initiatives to reposition our brand, as well as the negative impact on margin of our recently completed acquisitions, increased subcontractor and compensation costs (net of modestly lower incentive-based compensation accrual rates) as a result of significantly elevated attrition and costs related to the modernization of our core IT systems. Our 2020 GAAP and Adjusted Operating Margins1 were adversely impacted by the decline in revenues brought on by the COVID-19 pandemic and an asset impairment related to the discontinuation of certain real estate construction projects. Our 2021 GAAP operating margin was

1 Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Diluted EPS and constant currency revenue growth are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.


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negatively impacted by the Class Action Settlement Loss, while our 2020 GAAP operating margin was negatively impacted by costs related to our restructuring program that concluded at the end of 2020.

In the fourth quarter of 2020, we made an offer to settle and exit a large customer engagement in Financial Services in Continental Europe. The offer included, among other terms, a proposed payment and the forgiveness of certain receivables. In the second quarter of 2021, we reached a settlement agreement with two of the three customers that were part of the engagement. The payment made to the two customers in the second quarter as part of the settlement agreement was consistent with the payment that had been proposed in the offer to such customers. Additionally, the settlement includes a provision for the continuation of certain of our services to the two customers. Our negotiations with the third customer are ongoing and, as such, we may not reach an agreement or the final terms of the agreement that is reached may materially differ from those contemplated in our accounting. In either instance, there could be additional impacts to our statement of operations, financial condition and our cash flows.

In the third quarter of 2021, the parties to the consolidated putative securities class action suit described in Note 12 of our unaudited consolidated financial statements filed a settlement agreement that, subject to the approval of the USDC-NJ, would resolve the consolidated putative securities class action against us and certain of our former officers. As a result, we recorded a $20 million Class Action Settlement Loss in "Selling, general and administrative expenses" in our unaudited consolidated financial statements. The loss is excluded from Adjusted Operating Margin and Adjusted Diluted EPS. For further information see Note 12 to our unaudited consolidated financial statements.

Business Outlook

As we seek to increase our commercial momentum and accelerate growth, our four strategic priorities are:

Repositioning our brand - improving our global brand recognition and becoming better known as a global digital partner to the entire C-suite;
Accelerating digital - growing our digital business organically and inorganically;
Globalizing Cognizant - growing our business in key international markets and diversifying leadership, capabilities and delivery footprint; and
Increasing our relevance to our clients - leading with thought leadership and capabilities to address clients' business needs.

During the third quarter of 2021, we acquired TQS and Hunter to expand our IoT, data, analytics and digital engineering capabilities. We intend to continue to pursue strategic acquisitions, investments and alliances to expand our talent, experience and capabilities in key digital areas or in particular geographies or industries.

We continue to expect the long-term focus of our clients to be on their digital transformation into software-driven, data-enabled, customer-centric and differentiated businesses. Clients continue to adopt and integrate digital technologies. Demand for our digital operations services and solutions has increased since the beginning of the COVID-19 pandemic. At the same time, as our clients seek to optimize the cost of supporting their legacy systems and operations, our non-digital services have been and may continue to be subject to pricing pressure. In addition, our clients will likely continue to contend with industry-specific changes driven by evolving digital technologies, uncertainty in the regulatory environment, industry consolidation and convergence as well as international trade policies and other macroeconomic factors, which could affect their demand for our services.

The evolving nature of the COVID-19 pandemic makes it difficult to estimate its future impact on our ongoing business, results of operations and overall financial performance. For example, India saw a considerable and sudden increase in new COVID-19 cases in the spring of 2021. A significant worsening of the pandemic, particularly in India, where a significant majority of our operations and technical personnel are located, could present challenges to our ability to deliver services to clients. We remain focused on protecting our employees’ health, safety and well-being.

As a global professional services company, we compete on the basis of the knowledge, experience, insights, skills and talent of our employees and the value they can provide to our clients. Our success is dependent, in large part, on our ability to keep our supply of skilled employees, in particular those with experience in key digital areas, in balance with client demand. For the three months ended September 30, 2021, our annualized attrition, including both voluntary and involuntary, was 37.0%. Competition for skilled employees in the current labor market is intense, and we experienced significantly elevated voluntary attrition during the third quarter of 2021. Challenges attracting and retaining highly qualified personnel have negatively impacted, and we expect will continue to impact, our ability to satisfy client demand and achieve our full revenue potential. Further, our ongoing and anticipated future efforts with respect to recruitment, talent management and employee engagement may not be successful and will result in increased delivery costs during the remainder of 2021.


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In addition, our future results may be affected by potential tax law changes and other potential regulatory changes, including possible U.S. corporate income tax reform and potentially increased costs for employment and post-employment benefits in India as a result of the Code on Social Security, 2020. We may also incur additional costs related to the potential resolution of legal and regulatory matters discussed in Note 12 to our unaudited consolidated financial statements.


Results of Operations

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

The following table sets forth, for the periods indicated, certain financial data for the three months ended September 30:


			% of			% of	Increase / Decrease
(Dollars in millions, except per share data)	2021		Revenues	2020		Revenues	$		%
Revenues	$	4,744	100.0	$	4,243	100.0	$	501	11.8
Cost of revenues(a)	2,947		62.1	2,647		62.4	300		11.3
Selling, general and administrative expenses(a)	924		19.5	804		18.9	120		14.9
Restructuring charges	—		—	51		1.2	(51)		(100.0)
Depreciation and amortization expense	144		3.0	138		3.3	6		4.3
Income from operations	729		15.4	603		14.2	126		20.9
Other income (expense), net	2			21			(19)		(90.5)
Income before provision for income taxes	731		15.4	624		14.7	107		17.1
Provision for income taxes	(187)			(276)			89		(32.2)

Net income	$	544	11.5	$	348	8.2	$	196	56.3
Diluted earnings per share	$	1.03		$	0.64		$	0.39	60.9

Other Financial Information2
Adjusted Income from Operations and Adjusted Operating Margin	$	749	15.8	$	675	15.9	$	74	11.0
Adjusted Diluted EPS	$	1.06		$	0.97		$	0.09	9.3

(a)Exclusive of depreciation and amortization expense.


Revenues - Overall

2 Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Diluted EPS and constant currency revenue growth are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.


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Revenues - Reportable Business Segments

The following charts set forth revenues and change in revenues by business segment and geography for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020:




	Financial Services					Healthcare
			Increase / (Decrease)					Increase / (Decrease)
Dollars in millions	Revenues		$	%	CC %3	Revenues		$	%	CC %3
North America	$	1,075	42	4.1	3.8	$	1,162	108	10.2	10.2
United Kingdom	140		17	13.8	8.7	44		4	10.0	6.3
Continental Europe	187		6	3.3	2.4	118		2	1.7	1.1
Europe - Total	327		23	7.6	5.0	162		6	3.8	2.4
Rest of World	142		10	7.6	6.6	30		9	42.9	42.6
Total	$	1,544	75	5.1	4.3	$	1,354	123	10.0	9.8

	Products and Resources					Communications, Media and Technology
			Increase / (Decrease)					Increase / (Decrease)
Dollars in millions	Revenues		$	%	CC %3	Revenues		$	%	CC %3
North America	$	749	83	12.5	12.3	$	500	74	17.4	17.4
United Kingdom	125		29	30.2	22.4	121		35	40.7	35.2
Continental Europe	145		48	49.5	47.3	34		(9)	(20.9)	(22.0)
Europe - Total	270		77	39.9	34.9	155		26	20.2	16.1
Rest of World	88		20	29.4	27.6	84		23	37.7	37.6
Total	$	1,107	180	19.4	18.1	$	739	123	20.0	19.1


Financial Services - revenues increased 5.1%, or 4.3% on a constant currency basis3



Banking	é	$49M

Insurance	é	$26M

Revenue growth reflected the negative impact to our 2020 revenues of the COVID-19 pandemic as well as a reduction in 2020 revenues on a large transformation project as a result of delivery delays. Additionally, growth in this segment benefited from recently completed acquisitions and revenue generated by our digital services in both banking and insurance. Declines related to our non-digital services reflected clients' continued cost optimization of supporting their legacy systems and operations. Revenues from clients added since September 30, 2020, including those related to acquisitions, were $33 million.3


Healthcare - revenues increased 10.0%, or 9.8% on a constant currency basis3



Healthcare	é	$53M

Life Sciences	é	$70M

3 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.


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Products and Resources - revenues increased 19.4%, or 18.1% on a constant currency basis4


Manufacturing, Logistics, Energy and Utilities	é	$102M

Retail and Consumer Goods	é	$58M

Travel and Hospitality	é	$20M

Revenues from our manufacturing, logistics, energy and utilities clients benefited from our clients' adoption and integration of digital technologies. Revenue growth in this segment included approximately 600 basis points related to recently completed acquisitions. Additionally, revenue growth reflected the negative impact to our 2020 revenues of the COVID-19 pandemic. Revenues from clients added since September 30, 2020, including those related to acquisitions, were $51 million.4


Communications, Media and Technology - revenues increased 20.0%, or 19.1% on a constant currency basis4

Revenue growth in this segment reflected the growing demand from our technology clients for services related to digital content, primarily driven by our largest clients in this segment, and the negative impact to our 2020 revenue of the COVID-19 pandemic. Revenue growth in this segment included approximately 500 basis points related to recently completed acquisitions. Revenues from clients added since September 30, 2020, including those related to acquisitions, were $48 million.


Communications and Media	é	$44M

Technology	é	$79M


Revenues - Geographic Markets

Revenues of $4,744 million by geographic market were as follows for the three months ended September 30, 2021:


Q3 2021 as compared to Q3 2020			Increase / (Decrease)
(Dollars in millions)	$	%			CC %4
North America			$	307		9.7	9.5
United Kingdom			85			24.6	18.8
Continental Europe			47			10.8	9.6
Europe - Total			132			16.9	13.7
Rest of World			62			22.0	21.0
Total revenues			$	501		11.8	11.0

North America continues to be our largest market, representing 73.5% of total revenues and 61.3% of total revenue growth. Revenue growth across all regions benefited from our recently completed acquisitions and was also aided by the negative impact on our 2020 revenues of the COVID-19 pandemic. United Kingdom and Continental Europe regions also benefited from favorable foreign currency exchange rate movements. A significant portion of revenue growth in our Continental Europe and Rest of World regions is related to clients, including those from recent acquisitions, in Germany and Australia, respectively.


Cost of Revenues (Exclusive of Depreciation and Amortization Expense)


é			$300M
ê			0.3% as a % of revenue
¡			% of Revenues

Our cost of revenues consists primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, project-related immigration and travel for technical personnel, subcontracting and equipment costs relating to revenues. The decrease in cost of revenues, as a percentage of revenues, was due primarily to savings from the implementation of the delivery cost optimization initiatives of our 2020 Fit for Growth Plan as well as the negative impact on our 2020 results of the COVID-19 pandemic, partially offset by increased subcontractor and compensation costs (net of modestly lower incentive-based compensation accrual rates) as a result of significantly elevated attrition.

4 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.


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SG&A Expenses (Exclusive of Depreciation and Amortization Expense)

SG&A expenses consist primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, immigration, travel, marketing, communications, management, finance, administrative and occupancy costs. The increase, as a percentage of revenues, was due primarily to investments intended to drive and support organic revenue growth, including additions to our sales organization and initiatives to reposition our brand, increased costs as a result of our recently completed acquisitions, costs related to the modernization of our core IT systems and the Class Action Settlement Loss, partially offset by a reduction in expenses attributable to the COVID-19 pandemic. Additionally, our 2020 SG&A expenses included an asset impairment related to the discontinuation of certain real estate construction projects.


é			$120M
é			0.6% as a % of revenue
¡			% of Revenues


Depreciation and Amortization Expense

Depreciation and amortization expense increased by 4.3% but remained relatively flat as a percentage of revenue during the third quarter of 2021 as compared to the third quarter of 2020. The increase was due to the amortization of intangible assets from recently completed acquisitions.


Operating Margin and Adjusted Operating Margin5 - Overall

Our 2021 GAAP and Adjusted Operating Margins benefited from savings from the implementation of the delivery cost optimization initiatives of our 2020 Fit for Growth Plan. These benefits were partially offset by investments intended to drive and support organic revenue growth, including additions to our sales organization and initiatives to reposition our brand, as well as the negative impact on margin of our recently completed acquisitions, increased subcontractor and compensation costs (net of modestly lower incentive-based compensation accrual rates) as a result of significantly elevated attrition and costs related to the modernization of our core IT systems. Our 2020 margins were adversely impacted by the decline in revenues brought on by the COVID-19 pandemic and an asset impairment related to the discontinuation of certain real estate construction projects. Our 2021 GAAP operating margin was negatively impacted by the Class Action Settlement Loss, while our 2020 GAAP operating margin was negatively impacted by costs related to our restructuring program that concluded at the end of 2020.5

Excluding the impact of applicable designated cash flow hedges, the appreciation of the Indian rupee against the U.S. dollar negatively impacted our operating margin by 7 basis points during the three months ended September 30, 2021. Each additional 1.0% change in exchange rate between the Indian rupee and the U.S. dollar will have the effect of moving our operating margin by 18 basis points.

We enter into foreign exchange derivative contracts to hedge certain Indian rupee denominated payments in India. These hedges are intended to mitigate the volatility of the changes in the exchange rate between the U.S. dollar and the Indian rupee. The settlement of our cash flow hedges positively impacted our operating margin by 32 basis points during the three months ended September 30, 2021, and by 14 basis points during the three months ended September 30, 2020.

5 Adjusted Income from Operations and Adjusted Operating Margin are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.


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We finished the third quarter of 2021 with approximately 318,400 employees. Annualized attrition, including both voluntary and involuntary, was approximately 37.0% for the three months ended September 30, 2021. In 2021, voluntary attrition was significantly elevated and constituted the vast majority of our attrition for the period. In comparison, voluntary attrition in the third quarter 2020 represented only approximately half of our attrition for the period as our personnel actions taken under our Fit for Growth Plan increased involuntary attrition while voluntary attrition was suppressed due to the COVID-19 pandemic. Attrition in all periods presented is weighted towards our more junior employees.




¡ Annualized attrition


Segment Operating Profit

Segment operating profit and operating margin percentage were as follows:

Across all our business segments, operating margins were negatively impacted by increased subcontractor and compensation costs as a result of significantly elevated attrition and benefited from savings from the implementation of the delivery cost optimization initiatives of our 2020 Fit for Growth Plan and the negative impact on our 2020 results of the COVID-19 pandemic. In addition, segment operating profit in out Communications, Media and Technology segment during the three months ended September 30, 2020 was affected by an unfavorable allocation of costs.

Total segment operating profit and operating margin were as follows for the three months ended September 30:


(Dollars in millions)	2021		% of Revenues	2020		% of Revenues	Increase / (Decrease)
Total segment operating profit	$	1,450	30.6	$	1,339	31.6	$	111
Less: unallocated costs	721			736			(15)
Income from operations	$	729	15.4	$	603	14.2	$	126


Other Income (Expense), Net

The following table sets forth total other income (expense), net for the three months ended September 30:


(in millions)	2021		2020		Increase/ Decrease
Foreign currency exchange (losses) gains	$	(4)	$	56	$	(60)
Gains (losses) on foreign exchange forward contracts not designated as hedging instruments	1		(57)		58
Foreign currency exchange gains (losses), net	(3)		(1)		(2)
Interest income	7		27		(20)
Interest expense	(3)		(6)		3
Other, net	1		1		—
Total other income (expense), net	$	2	$	21	$	(19)

The foreign currency exchange gains and losses were attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries. The gains and losses on foreign exchange forward contracts not designated as hedging instruments related to the realized and unrealized gains and losses on contracts entered into to offset foreign currency exposure to non-U.S. dollar denominated net monetary assets and liabilities. As of September 30, 2021, the notional value of our undesignated hedges was $919 million. The decrease in interest income of $20


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million was primarily attributable to lower invested balances in India, which generate higher yields. Our invested balances in India are lower in 2021 as a result of our repatriation of cash from India in the fourth quarter of 2020.


Provision for Income Taxes


ê			$89M

¡ Effective Income Tax Rate ê 18.6%


Net Income

The increase in net income was driven by higher income from operations and a lower provision for income taxes due to the Q3 2020 Tax on Accumulated Indian Earnings, partially offset by lower interest income.


é			$196M

¡ % of Revenues

Non-GAAP Financial Measures

Portions of our disclosure include non-GAAP financial measures. 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. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of our non-GAAP financial measures to the corresponding GAAP measures, set forth below, should be carefully evaluated.

Our non-GAAP financial measures, Adjusted Operating Margin, Adjusted Income From Operations and Adjusted Diluted EPS, exclude unusual items. Additionally, Adjusted Diluted EPS excludes net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. The income tax impact of each item is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred. Constant currency revenue growth is defined as revenues for a given period restated at the comparative period’s foreign currency exchange rates measured against the comparative period's reported revenues.

We believe providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results. For our internal management reporting and budgeting purposes, we use various GAAP and non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to determine portions of the compensation for our executive officers and for making comparisons of our operating results to those of our competitors. Therefore, it is our belief that the use of non-GAAP financial measures excluding certain costs provides a meaningful supplemental measure for investors to evaluate our financial performance. We believe that the presentation of our non-GAAP financial measures along with reconciliations to the most comparable GAAP measure, as applicable, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.

A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring such as our net non-operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from our non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.


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The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the three months ended September 30:


(Dollars in millions, except per share amounts)	2021		% of Revenues	2020		% of Revenues
GAAP income from operations and operating margin	$	729	15.4	$	603	14.2
Class Action Settlement Loss (1)	20		0.4	—		—
Realignment charges (2)	—		—	8		0.2
2020 Fit for Growth Plan restructuring charges (3)	—		—	43		1.0
COVID-19 Charges (4)	—		—	21		0.5
Adjusted Income from Operations and Adjusted Operating Margin	$	749	15.8	$	675	15.9

GAAP diluted EPS	$	1.03		$	0.64
Effect of above adjustments, pre-tax	0.04			0.13
Non-operating foreign currency exchange (gains) losses, pre-tax (5)	0.01			—
Tax effect of above adjustments (6)	(0.02)			(0.06)
Tax on Accumulated Indian Earnings (7)	—			0.26
Adjusted Diluted EPS	$	1.06		$	0.97

(1)During the three months ended September 30, 2021, we recorded a Class Action Settlement Loss in "Selling, general and administrative expenses" in our unaudited consolidated financial statements. See Note 12 to our unaudited consolidated financial statements for additional information.

(2)As part of the realignment program, during the three months ended September 30, 2020, we incurred certain professional fees. See Note 4 to our unaudited consolidated financial statements for additional information.

(3)As part of our 2020 Fit for Growth plan, during the three months ended September 30, 2020, we incurred certain employee separation, employee retention and facility exit costs and other charges. See Note 4 to our unaudited consolidated financial statements for additional information.

(4)During the three months ended September 30, 2020, we incurred costs in response to the COVID-19 pandemic including costs to enable our employees to work remotely. Most of the costs related to the pandemic are reported in "Cost of revenues" in our unaudited consolidated statements of operations.

(5)Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency exchange gains (losses), net" in our unaudited consolidated statements of operations.

(6)Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income:


	Three Months Ended September 30,
(in millions)	2021		2020
Non-GAAP income tax benefit (expense) related to:
Class Action Settlement Loss	$	6	$	—
Realignment charges	—		2
2020 Fit for Growth Plan restructuring charges	—		11
COVID-19 Charges	—		6
Foreign currency exchange gains and losses	3		15

(7)During the three months ended September 30, 2020, we reversed our indefinite reinvestment assertion on Indian earnings accumulated in prior years and recorded $140 million in income tax expense.


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

The following table sets forth, for the periods indicated, certain financial data for the nine months ended September 30:


			% of			% of	Increase / Decrease
(Dollars in millions, except per share data)	2021		Revenues	2020		Revenues	$		%

Revenues	$	13,730	100.0	$	12,468	100.0	$	1,262	10.1
Cost of revenues(a)	8,574		62.4	8,009		64.2	565		7.1
Selling, general and administrative expenses(a)	2,632		19.2	2,226		17.9	406		18.2
Restructuring charges	—		—	177		1.4	(177)		(100.0)
Depreciation and amortization expense	430		3.1	407		3.3	23		5.7
Income from operations	2,094		15.3	1,649		13.2	445		27.0
Other income (expense), net	(4)			(20)			16		(80.0)
Income before provision for income taxes	2,090		15.2	1,629		13.1	461		28.3
Provision for income taxes	(531)			(552)			21		(3.8)
Income (loss) from equity method investments	2			(1)			3		(300.0)
Net income	$	1,561	11.4	$	1,076	8.6	$	485	45.1
Diluted EPS	$	2.96		$	1.98		$	0.98	49.5
Other Financial Information6
Adjusted Income From Operations and Adjusted Operating Margin	$	2,114	15.4	$	1,878	15.1	$	236	12.6
Adjusted Diluted EPS	$	3.02		$	2.75		$	0.27	9.8

(a)Exclusive of depreciation and amortization expense.


Revenues - Overall

During the nine months ended September 30, 2021, revenues increased by $1,262 million as compared to the nine months ended September 30, 2020, representing growth of 10.1%, or 8.4% on a constant currency basis. Our revenue growth reflected our clients' continued adoption and integration of digital technologies and the acceleration in the demand for cloud, mobile workplace solutions, e-commerce, automation and was aided by the negative impact on 2020 revenues of the COVID-19 pandemic and the April 2020 ransomware attack. Our recently completed acquisitions contributed 330 basis points to our revenue growth. We continue to experience pricing pressure on our non-digital services as our clients optimize the cost of supporting their legacy systems and operations. In addition, our revenues from clients added since September 30, 2020, including those related to acquisitions, were $305 million.6

6 Adjusted Income From Operations, Adjusted Operating Margin and Adjusted Diluted EPS are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures.


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Revenues - Reportable Business Segments

The following charts set forth revenues and change in revenues by business segment and geography for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020:




	Financial Services					Healthcare
			Increase / (Decrease)					Increase / (Decrease)
Dollars in millions	Revenues		$	%	CC %7	Revenues		$	%	CC %7
North America	$	3,137	114	3.8	3.4	$	3,394	303	9.8	9.8
United Kingdom	395		42	11.9	5.2	129		13	11.2	4.7
Continental Europe	565		11	2.0	(3.6)	356		39	12.3	7.2
Europe - Total	960		53	5.8	(0.3)	485		52	12.0	6.6
Rest of World	407		21	5.4	1.8	88		30	51.7	49.7
Total	$	4,504	188	4.4	2.5	$	3,967	385	10.7	10.0

	Products and Resources					Communications, Media and Technology
			Increase / (Decrease)					Increase / (Decrease)
Dollars in millions	Revenues		$	%	CC %7	Revenues		$	%	CC %7
North America	$	2,190	215	10.9	10.5	$	1,420	134	10.4	10.3
United Kingdom	347		69	24.8	14.9	332		83	33.3	24.2
Continental Europe	380		80	26.7	18.6	121		(1)	(0.8)	(7.5)
Europe - Total	727		149	25.8	16.9	453		82	22.1	13.8
Rest of World	243		48	24.6	20.4	226		61	37.0	34.1
Total	$	3,160	412	15.0	12.5	$	2,099	277	15.2	13.2


Financial Services - revenues increased 4.4%, or 2.5% on a constant currency basis7


Banking	é	$114M

Insurance	é	$74M

Revenues in this segment benefited from recently completed acquisitions. Additionally, revenue growth reflected the negative impact on 2020 revenues of the COVID-19 pandemic. Our digital services generated revenue growth in both banking and insurance. Declines related to our non-digital services reflected clients' continued cost optimization of supporting their legacy systems and operations.7Revenues from clients added since September 30, 2020, including those related to acquisitions, were $58 million.


Healthcare - revenues increased 10.7%, or 10.0% on a constant currency basis7

Revenue growth among our life sciences clients was driven by increased demand for our services among pharmaceutical companies while revenue growth among our healthcare customers benefited from increased demand by health insurance customers for our integrated software solutions. Revenues in this segment also benefited from recently completed acquisitions. Additionally, revenue growth reflected the negative impact on 2020 revenues of the COVID-19 pandemic and the April 2020 ransomware attack. Revenues from clients added since September 30, 2020, including those related to acquisitions, were $50 million.



Healthcare	é	$192M

Life Sciences	é	$193M

7 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.


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Products and Resources - revenues increased 15.0%, or 12.5% on a constant currency basis8


Manufacturing, Logistics, Energy and Utilities	é	$290M

Retail and Consumer Goods	é	$103M

Travel and Hospitality	é	$19M

Revenue growth in this segment included approximately 500 basis points related to recently completed acquisitions. Revenues from our manufacturing, logistics, energy and utilities clients benefited from our clients' adoption and integration of digital technologies. Additionally, revenue growth reflected the negative impact of the COVID-19 pandemic on our 2020 revenue in this segment. Revenues from clients added since September 30, 2020, including those related to acquisitions, were $95 million.8


Communications, Media and Technology - revenues increased 15.2%, or 13.2% on a constant currency basis8

Revenue growth in this segment included approximately 750 basis points related to recently completed acquisitions, driven by acquisitions we completed during the third quarter of 2020. Revenues reflected growing demand from our technology clients for services related to digital content, primarily driven by our largest clients in this segment, and were negatively impacted by 250 basis points due to our exit from certain content-related services. Revenue growth in this segment also reflected the negative impact to our 2020 revenue of the COVID-19 pandemic. Revenues from clients added since September 30, 2020, including those related to acquisitions, were $102 million.


Communications and Media	é	$143M

Technology	é	$134M


Revenues - Geographic Markets

Revenues of $13,730 million by geographic market were as follows for the nine months ended September 30, 2021:


YTD 2021 as compared to YTD 2020			Increase / (Decrease)
(Dollars in millions)	$	%			CC %8
North America			$	766		8.2	7.9
United Kingdom			207			20.8	12.6
Continental Europe			129			10.0	3.8
Europe - Total			336			14.7	7.6
Rest of World			160			19.9	16.4
Total revenues			$	1,262		10.1	8.4

North America continues to be our largest market, representing 73.9% of total revenues and 60.7% of total growth for the nine months ended September 30, 2021. Revenue growth across all regions benefited from our recently completed acquisitions and was also aided by the negative impact on our 2020 revenues of the COVID-19 pandemic. All regions also benefited from favorable foreign currency exchange rate movements. A significant portion of revenue growth in our Continental Europe and Rest of World regions is related to clients, including those from recent acquisitions, in Germany and Australia, respectively.

8 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.


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Cost of Revenues (Exclusive of Depreciation and Amortization Expense)


é			$565M
ê			1.8% as a % of revenue
¡ % of Revenues

Our cost of revenues consists primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, project-related immigration and travel for technical personnel, subcontracting and equipment costs relating to revenues. The decrease in cost of revenues, as a percentage of revenues, was due primarily to savings from the implementation of the delivery cost optimization initiatives of our 2020 Fit for Growth Plan and a significant decrease in travel and entertainment costs as a result of a reduction in travel due to the COVID-19 pandemic as well as the negative impact on our 2020 results from the pandemic and the April 2020 ransomware attack, partially offset by increased subcontractor and compensation costs (net of modestly lower incentive-based compensation accrual rates) as a result of significantly elevated attrition.


SG&A Expenses (Exclusive of Depreciation and Amortization Expense)

SG&A expenses consist primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, immigration, travel, marketing, communications, management, finance, administrative and occupancy costs. The increase, as a percentage of revenues, was due primarily to investments intended to drive and support organic revenue growth, including additions to our sales organization and initiatives to reposition our brand, as well as increased costs as a result of our recently completed acquisitions and costs related to the modernization of our core IT systems, partially offset by a reduction in expenses attributable to the COVID-19 pandemic and the April 2020 ransomware attack.


é			$406M
é			1.3% as a % of revenue
¡ % of Revenues


Depreciation and Amortization Expense

Depreciation and amortization expense increased by 5.7% but remained relatively flat as a percentage of revenue during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. The increase was due to amortization of intangibles from recently completed acquisitions.


Operating Margin and Adjusted Operating Margin9 - Overall

Our 2021 operating margin benefited from savings from the implementation of the delivery cost optimization initiatives of our 2020 Fit for Growth Plan. These benefits were partially offset by investments intended to drive and support organic revenue growth, including additions to our sales organization and initiatives to reposition our brand, as well as the negative impact on margin of our recently completed acquisitions, increased subcontractor and compensation costs (net of modestly lower incentive-based compensation accrual rates) as a result of significantly elevated attrition and costs related to the modernization of our core IT systems. Our 2020 operating margins were adversely impacted by the decline in revenues brought on by the COVID-19 pandemic and the effect of the April 2020 ransomware attack on both revenues and costs. Our 2020 GAAP operating margin was negatively impacted by costs related to our restructuring program that concluded at the end of 2020 and COVID-19 Charges.9

9 Adjusted Income from Operations and Adjusted Operating Margin are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.


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Excluding the impact of applicable designated cash flow hedges, the appreciation of the Indian rupee against the U.S. dollar negatively impacted our operating margin by approximately 15 basis points during the nine months ended September 30, 2021. Each additional 1.0% change in exchange rate between the Indian rupee and the U.S. dollar will have the effect of moving our operating margin by approximately 18 basis points.

We enter into hedges of certain Indian rupee denominated payments in India, which are intended to mitigate the volatility of the changes in the exchange rate between the U.S. dollar and the Indian rupee. During the nine months ended September 30, 2021, the settlement of our cash flow hedges positively impacted our operating margin by approximately 36 basis points as compared to a negative impact of approximately 6 basis points during the nine months ended September 30, 2020.


Segment Operating Profit

Segment operating profit and operating margin percentage were as follows:

Across all our business segments, operating margins benefited from savings from the implementation of the delivery cost optimization initiatives of our 2020 Fit for Growth Plan, the decrease in travel and entertainment costs due to COVID-19 related reductions in travel and the negative impact on our 2020 results of the COVID-19 pandemic and the April 2020 ransomware attack. In 2021, segment operating margins were negatively impacted by increased subcontractor and compensation costs as a result of significantly elevated attrition.

Total segment operating profit and margin were as follows for the nine months ended September 30:


(Dollars in millions)	2021		% of Revenues	2020		% of Revenues	Increase / (Decrease)
Total segment operating profit	$	4,181	30.5	$	3,573	28.7	$	608
Less: unallocated costs	2,087			1,924			163
Income from operations	$	2,094	15.3	$	1,649	13.2	$	445

The increase of $163 million in unallocated costs for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 was primarily due to increased costs as a result of our recently completed acquisitions and costs related to initiatives to reposition our brand and the modernization of our core IT systems. Unallocated costs in 2020 included restructuring costs and costs related to the April 2020 ransomware attack.


Other Income (Expense), Net

The following table sets forth total other income (expense), net for the nine months ended September 30:


(in millions)	2021		2020		Increase/ Decrease
Foreign currency exchange (losses)	$	(26)	$	(51)	$	25
Gains (losses) on foreign exchange forward contracts not designated as hedging instruments	7		(54)		61
Foreign currency exchange gains (losses), net	(19)		(105)		86
Interest income	23		105		(82)
Interest expense	(7)		(21)		14
Other, net	(1)		1		(2)
Total other income (expense), net	$	(4)	$	(20)	$	16

The foreign currency exchange gains and losses were primarily attributed to the remeasurement of the Indian rupee denominated net monetary assets and liabilities in our U.S. dollar functional currency India subsidiaries and, to a lesser extent, the remeasurement of other net monetary assets and liabilities denominated in currencies other than the functional currencies of


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our subsidiaries. The gains and losses on foreign exchange forward contracts not designated as hedging instruments related to the realized and unrealized gains and losses on contracts entered into to offset foreign currency exposure to non-U.S. dollar denominated net monetary assets and liabilities. The decrease in interest income of $82 million was primarily attributable to lower invested balances in India, which generate higher yields. Our invested balances in India are lower in 2021 as a result of our repatriation of cash from India in the fourth quarter of 2020.


Provision for Income Taxes


ê			$21M

¡ Effective Income Tax Rate ê 8.5%

The effective tax rate decreased primarily as a result of our decision in the third quarter of 2020 to reverse our indefinite reinvestment assertion on Indian earnings accumulated in prior years which resulted in a $140 million Tax on Accumulated Indian Earnings recorded as income tax expense in the third quarter of 2020, the discrete benefit in 2021 of the settlement of the IRS examination for tax years 2012 through 2016 as described in Note 8 to our unaudited consolidated financial statements and lower non-deductible foreign currency exchange losses in our unaudited consolidated statement of operations in 2021.


Net Income

The increase in net income was driven by higher income from operations, lower foreign currency exchange losses and a lower provision for income taxes stemming primarily from the Q3 2020 Tax on Accumulated Indian Earnings, partially offset by lower interest income.


é			$485M

¡ % of Revenues

Non-GAAP Financial Measures

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the nine months ended September 30:


(Dollars in millions, except per share amounts)	2021		% of Revenues	2020		% of Revenues
GAAP income from operations and operating margin	$	2,094	15.3	$	1,649	13.2
Class Action Settlement Loss (1)	20		0.1	—		—
Realignment charges (2)	—		—	40		0.3
2020 Fit for Growth plan restructuring charges (3)	—		—	137		1.1
COVID-19 Charges (4)	—		—	52		0.5


Adjusted Income from Operations and Adjusted Operating Margin	$	2,114	15.4	$	1,878	15.1

GAAP diluted EPS	$	2.96		$	1.98
Effect of above adjustments, pre-tax	0.04			0.42
Non-operating foreign currency exchange (gains) losses, pre-tax (5)	0.03			0.19
Tax effect of above adjustments (6)	(0.01)			(0.10)
Tax on Accumulated Indian Earnings (7)	—			0.26
Adjusted Diluted EPS	$	3.02		$	2.75

(1)During the three months ended September 30, 2020, we recorded a Class Action Settlement Loss in "Selling, general and administrative expenses" in our unaudited consolidated financial statements. See Note 12 to our unaudited consolidated financial statements for additional information.

(2)As part of the realignment program, during the nine months ended September 30, 2020, we incurred employee retention costs and professional fees. See Note 4 to our unaudited consolidated financial statements for additional information.


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(3)As part of our 2020 Fit for Growth plan, during the nine months ended September 30, 2020, we incurred certain employee separation, employee retention, facility exit costs and other charges. See Note 4 to our unaudited consolidated financial statements for additional information.

(4)During the nine months ended September 30, 2020, we incurred costs in response to the COVID-19 pandemic including a one-time bonus to our employees at the designation of associate and below in both India and the Philippines, certain costs to enable our employees to work remotely and costs to provide medical staff and extra cleaning services for our facilities. Most of the costs related to the pandemic are reported in "Cost of revenues" in our unaudited consolidated statements of operations.

(6)Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income:


(in millions)	Nine Months Ended September 30,
	2021		2020
Non-GAAP income tax benefit (expense) related to:
Class Action Settlement Loss	$	6	$	—
Realignment charges	—		10
2020 Fit for Growth Plan restructuring charges	—		36
COVID-19 Charges	—		14
Foreign currency exchange gains and losses	(3)		(3)

(7)During the three months ended September 30, 2020, we reversed our indefinite reinvestment assertion on Indian earnings accumulated in prior years and recorded $140 million in income tax expense.


Liquidity and Capital Resources

Our cash generated from operations has historically been our primary source of liquidity to fund operations and investments to grow our business. In addition, as of September 30, 2021, we had cash, cash equivalents and short-term investments of $2,413 million and available capacity under our credit facilities of approximately $1,925 million.

The following table provides a summary of our cash flows for the nine months ended September 30:


(in millions)	2021		2020		Increase / Decrease
Net cash provided by (used in):
Operating activities	$	1,670	$	2,401	$	(731)
Investing activities	(1,666)		(1,189)		(477)
Financing activities	(1,007)		617		(1,624)

Operating activities

The decrease in cash provided by operating activities for the nine months ended September 30, 2021 compared to the same period in 2020 was primarily driven by the deferrals of certain tax payments due to COVID-19 pandemic regulatory relief in 2020, a portion of which was remitted in 2021, and higher incentive-based compensation payouts in 2021.

We monitor turnover, aging and the collection of accounts receivable by client. Our DSO calculation includes receivables, net of allowance for doubtful accounts, and contract assets, reduced by the uncollected portion of our deferred revenue. Our DSO was 72 days as of both September 30, 2021 and September 30, 2020, and 70 days as of December 31, 2020.

Investing activities

The increase in net cash used in investing activities for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 was primarily driven by net purchases of investments in 2021 as compared to net sales in 2020, partially offset by lower payments for acquisitions and capital expenditures.


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Financing activities

The cash used in financing activities for the nine months ended September 30, 2021 was primarily driven by repurchases of common stock. The cash provided by financing activities for the nine months ended September 30, 2020 was primarily a result of our borrowing against the revolving credit facility, partially offset by repurchases of common stock.

We have a Credit Agreement providing for a $750 million Term Loan and a $1,750 million unsecured revolving credit facility, which are due to mature in November 2023. We are required under the Credit Agreement to make scheduled quarterly principal payments on the Term Loan. As of September 30, 2021, we had no outstanding balance on our revolving credit facility. See Note 7 to our unaudited consolidated financial statements.

In February 2021, our India subsidiary renewed its one-year 13 billion Indian rupee ($175 million at the September 30, 2021 exchange rate) working capital facility, which requires us to repay any balances drawn down within 90 days from the date of disbursement. There is a 1.0% prepayment penalty applicable to payments made within 30 days after disbursement. This working capital facility contains affirmative and negative covenants and may be renewed annually in February. As of September 30, 2021, we have not borrowed funds under this facility.



			Share Repurchases

			Dividend payments

During the nine months ended September 30, 2021, we returned $1,071 million to our stockholders, including shares purchased in connection with our stock-based compensation plans. We review our capital return plan on an ongoing basis, considering the potential impacts of COVID-19 pandemic, our financial performance and liquidity position, investments required to execute our strategic plans and initiatives, acquisition opportunities, the economic outlook, regulatory changes and other relevant factors. As these factors may change over time, the actual amounts expended on stock repurchase activity, dividends, and acquisitions, if any, during any particular period cannot be predicted and may fluctuate from time to time.

Other Liquidity and Capital Resources Information

We seek to ensure that our worldwide cash is available in the locations in which it is needed. As part of our ongoing liquidity assessments, we regularly monitor the mix of our domestic and international cash flows and cash balances. We evaluate on an ongoing basis what portion of the non-U.S. cash, cash equivalents and short-term investments is needed locally to execute our strategic plans and what amount is available for repatriation back to the United States.

We expect our operating cash flows, cash and short-term investment balances, together with our available capacity under our revolving credit facilities, to be sufficient to meet our operating requirements and service our debt for the next twelve months. Our ability to expand and grow our business in accordance with current plans, make acquisitions, meet our long-term capital requirements beyond a twelve-month period and execute our capital return plan will depend on many factors, including the rate, if any, at which our cash flow increases, our ability and willingness to pay for acquisitions with capital stock and the availability of public and private debt and equity financing. We cannot be certain that additional financing, if required, will be available on terms and conditions acceptable to us, if at all.


Commitments and Contingencies

See Note 12 to our unaudited consolidated financial statements.


Off-Balance Sheet Arrangements

Other than our foreign exchange forward and option contracts, there were no off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons in the nine months ended September 30, 2021 that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities,


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including the recoverability of tangible and intangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. On an ongoing basis, we evaluate our estimates. The most significant estimates relate to the recognition of revenue and profits, including the application of the cost-to-cost method of measuring progress to completion for certain fixed-price contracts, income taxes, business combinations, valuation of goodwill and other long-lived assets and contingencies. We base our estimates on historical experience, current trends and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual amounts may differ from the estimates used in the preparation of the accompanying unaudited consolidated financial statements. For a discussion of our critical accounting estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020. Our significant accounting policies are described in Note 1 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.


Recently Adopted and New Accounting Pronouncements

There have been no changes in the information provided in our Annual Report on Form 10-K for the year ended December 31, 2020.


Forward Looking Statements

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Exchange Act) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believe,” “expect,” “may,” “could,” “would,” “plan,” “intend,” “estimate,” “predict,” “potential,” “continue,” “should” or “anticipate” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing.

Such forward-looking statements may be included in various filings made by us with the SEC, in press releases or in oral statements made by or with the approval of one of our authorized executive officers. These forward-looking statements, such as statements regarding our anticipated future revenues or operating margin, earnings, capital expenditures, impacts to our business, financial results and financial condition as a result of the COVID-19 pandemic, the competitive marketplace for talent, anticipated effective income tax rate and income tax expense, liquidity, access to capital, capital return plan, investment strategies, cost management, realignment program, 2020 Fit for Growth Plan, plans and objectives, including those related to our digital practice areas, investment in our business, potential acquisitions, industry trends, client behaviors and trends, the outcome of and costs associated with regulatory and litigation matters, the appropriateness of the accrual related to the India Defined Contribution Obligation and other statements regarding matters that are not historical facts, are based on our current expectations, estimates and projections, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Actual results, performance, achievements and outcomes could differ materially from the results expressed in, or anticipated or implied by, these forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including:

economic and political conditions globally and in particular in the markets in which our clients and operations are concentrated;
the continuing impact of the COVID-19 pandemic, or other future pandemics, on our business, results of operations, liquidity and financial condition;
our ability to attract, train and retain skilled employees, including highly skilled technical personnel to satisfy client demand and senior management to lead our business globally;
challenges related to growing our business organically as well as inorganically through acquisitions, and our ability to achieve our targeted growth rates;
our ability to achieve our profitability goals and capital return strategy;
our ability to successfully execute on the investments outlined in our 2020 Fit for Growth Plan and achieve the anticipated benefits from the plan;
our ability to meet specified service levels or milestones required by certain of our contracts;
intense and evolving competition and significant technological advances that our service offerings must keep pace with in the rapidly changing markets we compete in;
legal, reputation and financial risks if we fail to protect client and/or our data from security breaches and/or cyber attacks;


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the effectiveness of our risk management, business continuity and disaster recovery plans and the potential that our global delivery capabilities could be impacted;
restrictions on visas, in particular in the United States, United Kingdom and EU, or immigration more generally or increased costs of such visas or the wages we are required to pay associates on visas, which may affect our ability to compete for and provide services to our clients;
risks related to anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing, both of which could impair our ability to serve our clients;
risks and costs related to complying with numerous and evolving legal and regulatory requirements to which we are subject in the many jurisdictions in which we operate;
potential changes in tax laws, or in their interpretation or enforcement, failure by us to adapt our corporate structure and intercompany arrangements to achieve global tax efficiencies or adverse outcomes of tax audits, investigations or proceedings;
potential exposure to litigation and legal claims in the conduct of our business; and
the factors set forth in "Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020.

You are advised to consult any further disclosures we make on related subjects in the reports we file with the SEC, including this report in the section titled “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part I, Item 1. Business” in our Annual Report on Form 10-K for the year ended December 31, 2020. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Previous: Item 1. Consolidated Financial Statements (Unaudited). · Next: Item 3. Quantitative and Qualitative Disclosures about Market Risk.