Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 27, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | EXLS | |
Entity Registrant Name | ExlService Holdings, Inc. | |
Entity Central Index Key | 1297989 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,299,371 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $151,319 | $176,499 |
Short-term investments | 14,330 | 11,577 |
Restricted cash | 2,774 | 1,395 |
Accounts receivable, net | 89,323 | 80,244 |
Prepaid expenses | 9,875 | 5,783 |
Deferred tax assets, net | 4,921 | 4,455 |
Advance income tax, net | 9,305 | 9,905 |
Other current assets | 13,241 | 12,533 |
Total current assets | 295,088 | 302,391 |
Fixed assets, net | 47,467 | 45,369 |
Restricted cash | 3,367 | 3,258 |
Deferred tax assets, net | 8,288 | 11,985 |
Intangible assets, net | 60,085 | 46,979 |
Goodwill | 172,097 | 139,599 |
Other assets | 24,626 | 23,975 |
Total assets | 611,018 | 573,556 |
Current liabilities: | ||
Accounts payable | 5,510 | 4,663 |
Short-term borrowings | 5,000 | |
Deferred revenue | 13,246 | 7,690 |
Accrued employee cost | 21,021 | 37,606 |
Accrued expenses and other current liabilities | 39,386 | 40,206 |
Current portion of capital lease obligations | 743 | 803 |
Total current liabilities | 84,906 | 90,968 |
Long term borrowings | 75,000 | 50,000 |
Capital lease obligations, less current portion | 424 | 560 |
Non-current liabilities | 13,727 | 12,870 |
Total liabilities | 174,057 | 154,398 |
Commitments and contingencies (See Note 16) | ||
Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 100,000,000 shares authorized, 34,605,579 shares issued and 33,294,828 shares outstanding as of March 31, 2015 and 34,203,352 shares issued and 32,905,467 shares outstanding as of December 31, 2014 | 35 | 34 |
Additional paid-in-capital | 239,311 | 233,173 |
Retained earnings | 278,991 | 269,424 |
Accumulated other comprehensive loss | -53,015 | -55,509 |
Total stockholders' equity including shares held in treasury | 465,322 | 447,122 |
Less: 1,310,751 shares as of March 31, 2015 and 1,297,885 shares as of December 31, 2014, held in treasury, at cost | -28,361 | -27,964 |
Total stockholders' equity | 436,961 | 419,158 |
Total liabilities and stockholders' equity | $611,018 | $573,556 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 34,605,579 | 34,203,352 |
Common stock, shares outstanding | 33,294,828 | 32,905,467 |
Treasury stock, shares | 1,310,751 | 1,297,885 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Revenues, net | $143,510 | $121,797 |
Cost of revenues (exclusive of depreciation and amortization) | 93,125 | 74,922 |
Gross profit | 50,385 | 46,875 |
Operating expenses: | ||
General and administrative expenses | 18,621 | 14,800 |
Selling and marketing expenses | 11,243 | 10,232 |
Depreciation and amortization | 7,053 | 6,356 |
Total operating expenses | 36,917 | 31,388 |
Income from operations | 13,468 | 15,487 |
Foreign exchange income / (loss) | 1,134 | -833 |
Other income, net | 1,178 | 958 |
Income before income taxes | 15,780 | 15,612 |
Income tax expense | 6,213 | 4,465 |
Net income | $9,567 | $11,147 |
Earnings per share: | ||
Basic | $0.29 | $0.34 |
Diluted | $0.28 | $0.33 |
Weighted-average number of shares used in computing earnings per share: | ||
Basic | 33,236,259 | 32,523,490 |
Diluted | 34,051,971 | 33,428,544 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income | $9,567 | $11,147 | ||
Other comprehensive income/(loss): | ||||
Unrealized gain on effective cash flow hedges, net of taxes $453 and $1,608 | 1,806 | 5,402 | ||
Foreign currency translation adjustment | 302 | 4,828 | ||
Retirement benefits, net of taxes $6 and $(2), respectively | 151 | -40 | ||
Reclassification adjustments | ||||
Realized loss on cash flow hedges, net of taxes $126 and $496 | 183 | [1] | 1,758 | [1] |
Retirement benefits, net of taxes $3 and $8 | 52 | [2] | 29 | [2] |
Total other comprehensive income | 2,494 | 11,977 | ||
Total comprehensive income | $12,061 | $23,124 | ||
[1] | These are reclassified to net income and are included in the foreign exchange gain/(loss) in the unaudited consolidated statements of income. See Note 7 to the unaudited consolidated financial statements. | |||
[2] | These are reclassified to net income and are included in the computation of net periodic pension costs in the unaudited consolidated statements of income. See Note 10 to the unaudited consolidated financial statements. |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Taxes on unrealized gain on cash flow hedges | $453 | $1,608 |
Taxes on retirement benefits | 6 | -2 |
Taxes on reclassification adjustments of realized loss on cash flow hedges | 126 | 496 |
Taxes on reclassification adjustments of retirement benefits | $3 | $8 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flow (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income | $9,567 | $11,147 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 7,053 | 6,356 |
Stock-based compensation expense | 4,255 | 4,176 |
Unrealized foreign exchange loss | 284 | 1,895 |
Deferred income taxes | 2,804 | 1,863 |
Others, net | -13 | 22 |
Change in operating assets and liabilities: | ||
Restricted cash | -1,477 | -502 |
Accounts receivable | -5,779 | -1,713 |
Prepaid expenses and other current assets | -2,799 | -4,187 |
Accounts payable | -984 | -124 |
Deferred revenue | 3,834 | 902 |
Accrued employee cost | -16,398 | -11,493 |
Accrued expenses and other liabilities | -497 | -985 |
Advance income tax, net | 544 | -1,822 |
Other assets | -257 | -570 |
Net cash provided by operating activities | 137 | 4,965 |
Cash flows from investing activities: | ||
Purchase of fixed assets | -8,845 | -10,679 |
Business acquisition (net of cash acquired) | -44,419 | |
Purchase of short-term investments | -5,995 | -1,005 |
Proceeds from redemption of short-term investments | 3,079 | |
Net cash used for investing activities | -56,180 | -11,684 |
Cash flows from financing activities: | ||
Principal payments on capital lease obligations | -223 | -288 |
Proceeds from long-term borrowings | 25,000 | |
Proceeds from short-term borrowings | 5,000 | |
Payment of debt issuance costs | -50 | |
Acquisition of treasury stock | -397 | -459 |
Proceeds from exercise of stock options | 1,883 | 1,673 |
Net cash provided by financing activities | 31,213 | 926 |
Effect of exchange rate changes on cash and cash equivalents | -350 | 1,420 |
Net decrease in cash and cash equivalents | -25,180 | -4,373 |
Cash and cash equivalents, beginning of period | 176,499 | 148,065 |
Cash and cash equivalents, end of period | $151,319 | $143,692 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation |
Organization | |
ExlService Holdings, Inc. (“ExlService Holdings”) is organized as a corporation under the laws of the state of Delaware. ExlService Holdings, together with its subsidiaries (collectively, the “Company”), is a leading provider of business process solutions that integrate operations management with analytics and business transformation to deliver actionable business insights and long-term business impact. The Company’s clients are located principally in the U.S. and the U.K. | |
Basis of Presentation | |
The unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |
The unaudited interim consolidated financial statements reflect all adjustments (of a normal and recurring nature) that management considers necessary for a fair presentation of such statements for the interim periods presented. The unaudited consolidated statements of income for the interim periods presented are not necessarily indicative of the results for the full year or for any subsequent period. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||
Principles of Consolidation | |||||||||
The accompanying unaudited consolidated financial statements include the financial statements of ExlService Holdings and all of its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||
Use of Estimates | |||||||||
The preparation of the unaudited consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the unaudited consolidated statements of income during the reporting period. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates and assumptions that affect the financial statements include, but are not limited to, allowance for doubtful receivables, service tax receivables, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments, stock-based compensation expense, depreciation and amortization periods, purchase price allocation, recoverability of long-term assets including goodwill and intangibles, and estimates to complete the fixed price contracts. | |||||||||
In accordance with its policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. This review indicated that the actual lives of certain fixed assets were longer than the estimated useful lives used for depreciation purposes in the Company’s financial statements. As a result, effective January 1, 2015, the Company changed its estimates of the useful lives of its certain fixed assets to better reflect the estimated periods during which these assets will remain in service. The effect of change in estimated useful life of assets reduced depreciation expense by $468, increased net income by $281 and increased basic and diluted earnings per share by $0.01, during the three months ended March 31, 2015. | |||||||||
a) | Revenue Recognition | ||||||||
As part of reimbursing the Travelers Indemnity Company (“Travelers”) for certain of their transition related expenses (the “disentanglement costs”), the Company recognized $2,471 of such reimbursements as a reduction of our revenues during the three months ended March 31, 2014, in accordance with Accounting Standards Codification topic 605-50-45, “Revenue Recognition.” The Company did not incur any reimbursements of disentanglement costs during the three months ended March 31, 2015 and also does not anticipate incurring any additional reimbursements of disentanglement costs going forward. | |||||||||
b) | Investments | ||||||||
The Company’s investments consist of time deposits with financial institutions which are valued at cost and approximate fair value. Interest earned on such investments is included in interest income. Investments with original maturities greater than ninety days but less than twelve months are classified as short-term investments. Investments with maturities greater than twelve months from the balance sheet date are classified as long-term investments. | |||||||||
The Company’s investments in open ended mutual funds represent investments in mutual fund scheme wherein the mutual fund issuer has invested these funds in debt and money market instruments of various maturities in India. The Company manages mutual fund investments on a fair value basis in accordance with its documented risk management, investment strategy and information provided to the management. The Company accounts for these investments in accordance with the fair value option under ASC topic 825-10 (“ASC No. 825-10”) and change in fair value is recognized in the income statement. The fair value represents original cost (on the acquisition date) and the net asset value (“NAV”) as quoted, at each reporting period. Gain or loss on the disposal of these investments would be calculated using the weighted average cost of the investments sold or disposed. | |||||||||
Recent Accounting Pronouncements | |||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is not permitted. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company. ASU 2014-09 is effective for the Company in the first quarter of fiscal 2017 using either one of two methods: (i) retrospectively to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the impact of adoption and the implementation approach to be used. | |||||||||
In April 2015, the FASB issued ASU No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (ASU 2015-05”). The amendments add guidance to Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software, which will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The amendments will be effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating the method of adoption and impact this standard will have on its financial statements and related disclosures. | |||||||||
Accrued expenses and other current liabilities | |||||||||
Accrued expenses and other current liabilities consist of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Accrued expenses | $ | 27,500 | $ | 24,451 | |||||
Derivative instruments | 1,349 | 2,385 | |||||||
Client liability account | 2,987 | 9,241 | |||||||
Other current liabilities | 7,550 | 4,129 | |||||||
Accrued expenses and other current liabilities | $ | 39,386 | $ | 40,206 | |||||
Non-current liabilities | |||||||||
Non-current liabilities consist of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Derivative instruments | $ | 398 | $ | 576 | |||||
Unrecognized tax benefits | 4,239 | 2,878 | |||||||
Deferred rent | 6,324 | 5,977 | |||||||
Retirement benefits | 1,544 | 1,544 | |||||||
Other non-current liabilities | 1,222 | 1,895 | |||||||
Non-current liabilities | $ | 13,727 | $ | 12,870 | |||||
Other income | |||||||||
Other income (expense), net consists of the following: | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Interest and dividend income* | $ | 1,402 | $ | 877 | |||||
Interest expense | (283 | ) | (113 | ) | |||||
Others, net | 59 | 194 | |||||||
Other income, net | $ | 1,178 | $ | 958 | |||||
* | Includes unrealized gain of $42 on investments carried under fair value option. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings Per Share | 3. Earnings Per Share | ||||||||
Basic earnings per share is computed by dividing net income to common stockholders by the weighted average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common shares plus the potentially dilutive effect of common stock equivalents issued and outstanding at the reporting date, using the treasury stock method. Stock options, restricted stock and restricted stock units that are anti-dilutive are excluded from the computation of weighted average shares outstanding. | |||||||||
The following table sets forth the computation of basic and diluted earnings per share: | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Numerators: | |||||||||
Net income | $ | 9,567 | $ | 11,147 | |||||
Denominators: | |||||||||
Basic weighted average common shares outstanding | 33,236,259 | 32,523,490 | |||||||
Dilutive effect of share based awards | 815,712 | 905,054 | |||||||
Diluted weighted average common shares outstanding | 34,051,971 | 33,428,544 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.29 | $ | 0.34 | |||||
Diluted | $ | 0.28 | $ | 0.33 | |||||
Weighted average common shares considered anti-dilutive in computing diluted earnings per share | 188,044 | 205,888 |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Segment Information | 4. Segment Information | ||||||||||||||||||||||||
The Company’s business is divided into two reporting segments: Operations Management (previously called Outsourcing Services) and Analytics and Business Transformation (previously called Transformation Services). The Company changed its reporting segment nomenclature in 2014 in order to more accurately reflect the changing nature of its engagements with the clients. For comparability with the prior periods, the business composition of each segment remains unchanged. | |||||||||||||||||||||||||
The Company provides various types of business process solutions utilizing operations management, analytics and technology. These services are provided in an integrated manner to clients in various industries. The chief operating decision maker (“CODM”) generally reviews financial information at the consolidated statement of income level disaggregated by our two segments, but does not review any information except for revenues and cost of revenues of these individual segments. Therefore, the Company does not allocate or evaluate operating expenses, interest expense or income, capital expenditures, and income taxes to its reporting segments. Consequently, it is not practical to show assets, capital expenditures, depreciation or amortization by segment. The recent acquisition of RPM Direct, LLC and RPM Data Solutions, LLC (collectively, “RPM”) by the Company’s subsidiary ExlService.com, LLC (“ExlService.com”) is classified within the Analytics and Business Transformation segment. | |||||||||||||||||||||||||
Revenues and cost of revenues for each of the three months ended March 31, 2015 and 2014 for the Company’s Operations Management and Analytics and Business Transformation segments, respectively, are as follows: | |||||||||||||||||||||||||
Three months ended March 31, 2015 | Three months ended March 31, 2014 | ||||||||||||||||||||||||
Operations | Analytics and | Total | Operations | Analytics and | Total | ||||||||||||||||||||
Management | Business | Management | Business | ||||||||||||||||||||||
Transformation | Transformation | ||||||||||||||||||||||||
Revenues, net | $ | 110,661 | $ | 32,849 | $ | 143,510 | $ | 100,091 | $ | 21,706 | $ | 121,797 | |||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 70,466 | 22,659 | 93,125 | 58,899 | 16,023 | 74,922 | |||||||||||||||||||
Gross profit | $ | 40,195 | $ | 10,190 | $ | 50,385 | $ | 41,192 | $ | 5,683 | $ | 46,875 | |||||||||||||
Operating expenses | 36,917 | 31,388 | |||||||||||||||||||||||
Other income | 2,312 | 125 | |||||||||||||||||||||||
Income tax expense | 6,213 | 4,465 | |||||||||||||||||||||||
Net income | $ | 9,567 | $ | 11,147 | |||||||||||||||||||||
Business_Combinations_Goodwill
Business Combinations, Goodwill and Intangible Assets | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Business Combinations [Abstract] | |||||||||||||
Business Combinations, Goodwill and Intangible Assets | 5. Business Combinations, Goodwill and Intangible Assets | ||||||||||||
a) | Overland Holdings, Inc. | ||||||||||||
On October 24, 2014, ExlService.com acquired all of the outstanding shares of Overland Holdings, Inc. (“Overland”) pursuant to a Plan of Merger (the “Merger”). | |||||||||||||
The aggregate consideration for Overland’s acquisition was $65,940 (the “Merger Consideration”), which included working capital adjustments of $12,940. The Merger Consideration was paid with existing cash on hand. A portion of the Merger Consideration otherwise payable in the Merger was placed into escrow as security for post-closing working capital adjustments and the indemnification obligations under the Merger Agreement. | |||||||||||||
Overland, now a subsidiary of the Company is a leader in underwriting support services for Property & Casualty (“P&C”) insurers. It leverages proprietary workflow and automation technology, alongside transaction-based-pricing models to offer Business-Process-as-a-Service (“BPaaS”) solutions. Overland’s longstanding client relationships, experienced leadership team and technology-enabled services will enhance the Company’s market leading position in Operations Management to P&C insurers and also strengthens the Company’s onshore delivery capabilities. Overland’s technology and data directly connects and interfaces with its clients providing an integrated Operations Management solution. The acquisition presents an opportunity to leverage the Company’s analytics capabilities to enable Overland’s clients to increase the effectiveness of their underwriting. Accordingly, the Company paid a premium for the acquisition which is being reflected in the goodwill recognized from the purchase price allocation of the total consideration paid by the Company. | |||||||||||||
During the three months ended March 31, 2015, the Company finalized its purchase price allocation for the acquisition, which is as follows: | |||||||||||||
Amount | |||||||||||||
(In thousands) | |||||||||||||
Net tangible assets | $ | 18,873 | |||||||||||
Identifiable intangible assets: | |||||||||||||
Customer relationships | 12,200 | ||||||||||||
Developed Technology | 4,800 | ||||||||||||
Trade Names & Trademarks | 1,400 | ||||||||||||
Goodwill | 28,667 | ||||||||||||
Total purchase price* | $ | 65,940 | |||||||||||
* | Includes amount of $4,550 deposited in escrow accounts in connection with the acquisition. | ||||||||||||
The customer relationships, trade names and trademarks and developed technology from the Overland acquisition are being amortized over a useful life of twelve, ten years and five years, respectively. | |||||||||||||
The Company’s results of operations for the three months ended March 31, 2015 includes $16,873 of revenues from Overland. It is not practicable to disclose the net earnings of Overland in particular, because management does not allocate or evaluate operating expenses and income taxes to its domestic entities. | |||||||||||||
The amount of goodwill recognized from the Overland acquisition is deductible for tax purposes. | |||||||||||||
b) | RPM Direct LLC and RPM Data Solutions, LLC | ||||||||||||
On March 20, 2015 ExlService.com completed its acquisition of RPM Direct LLC and RPM Data Solutions, LLC (each a “Target Company” and together the “Target Companies” or “RPM”), pursuant to a Securities Purchase Agreement dated February 23, 2015 (the “Purchase Agreement”). Under the terms of the Purchase Agreement ExlService.com acquired all of the issued and outstanding limited liability company membership interests of the Target Companies (the “Securities”) from the security holders of each of the Target Companies. | |||||||||||||
The initial purchase consideration consisted of $47,000 in cash, subject to adjustment based on the closing date final working capital amount and shortfall in financial performance of the Target Companies for 2014, if any, contingent cash consideration of up to $23,000, as described below, and 122,131 restricted shares of common stock of the Company. | |||||||||||||
The purchase agreement allows sellers the ability to earn up to an additional $23,000 (the “earn-out”) based on the achievement of certain performance goals by the Target Companies during the 2015 and 2016 calendar years. The earn-out has an estimated fair value of $2,844. As noted above, the Company issued 122,131 restricted shares of common stock with an aggregate fair value of $4,150 to certain key members of the Target Companies, each of whom have accepted employment positions with the Company upon consummation of the combination. The Company also granted 113,302 restricted stock units with an aggregate fair value of $3,850 to certain employees of Target Companies, who have also accepted employment with the Company. The fair value of these grants will be recognized as compensation expense over the vesting period. | |||||||||||||
RPM, now as a subsidiary of the Company, specializes in analyzing large consumer data sets to segment populations, predict response rates, forecast customer lifetime value and design targeted, multi-channel marketing campaigns. RPM has focused on the insurance industry, including P&C, life and health, since its inception in 2001. RPM maintains its own database and supports data on over 250 million consumers and 120 million U.S. households. The quantity and combination of data attributes managed by RPM drives optimal, data-driven decision-making and enables it to build models that analyze prospects individually. RPM employs proprietary predictive analytics and domain-specific pattern recognition algorithms to deliver results through a flexible, on-demand service model. Accordingly, the Company paid a premium for the acquisition which is being reflected in the goodwill recognized from the purchase price allocation of the total consideration paid by the Company. | |||||||||||||
The Company made a preliminary allocation of the purchase price to the net tangible and intangible assets based on their fair values as mentioned below: | |||||||||||||
Amount | |||||||||||||
(In thousands) | |||||||||||||
Net tangible assets | $ | 2,419 | |||||||||||
Identifiable intangible assets: | |||||||||||||
Customer Relationship | 12,063 | ||||||||||||
Trade Names | 1,231 | ||||||||||||
Developed Technology | 1,249 | ||||||||||||
Non-Compete Agreements | 609 | ||||||||||||
Goodwill | 32,280 | ||||||||||||
Total purchase price* | $ | 49,851 | |||||||||||
* | Includes amount of $4,125 deposited in escrow accounts in connection with the acquisition. | ||||||||||||
The customer relationships from the RPM acquisition are being amortized over the weighted average useful life of 5.7 years. Similarly, trade names, developed technology and non-compete agreements are being amortized over a useful life of five years each. | |||||||||||||
Under ASC topic 805, “Business Combinations,” the preliminary allocation of the purchase price to the tangible and intangible assets and liabilities acquired may change up to a period of one year from the date of the acquisition. Accordingly, the Company may adjust the amounts recorded as of March 31, 2015 to reflect any revised valuations of the assets acquired or liabilities assumed. The Company’s purchase accounting as of March 31, 2015 was incomplete due to final adjustments to the fair value of tangible assets, intangible assets and liabilities assumed as of the acquisition date. | |||||||||||||
During the three months ended March 31, 2015 the Company recognized $303 of acquisition related costs. Such amounts are included in general and administrative expenses in the consolidated statements of income. The Company’s results of operations for the three months ended March 31, 2015 includes $1,191 of revenues of RPM since March 20, 2015, the date on which the acquisition was consummated. It is not practicable to disclose the net earnings since management does not allocate or evaluate operating expenses and income taxes to its domestic entities. | |||||||||||||
The amount of goodwill recognized from the RPM acquisition is deductible for tax purposes. | |||||||||||||
Goodwill | |||||||||||||
The following table sets forth details of the Company’s goodwill balance as of March 31, 2015: | |||||||||||||
Operations | Analytics and | Total | |||||||||||
Management | Business | ||||||||||||
Transformation | |||||||||||||
Balance at January 1, 2014 | $ | 90,622 | $ | 16,785 | $ | 107,407 | |||||||
Goodwill arising from Blue Slate acquisition | — | 4,554 | $ | 4,554 | |||||||||
Goodwill arising from Overland acquisition | 28,667 | — | $ | 28,667 | |||||||||
Currency translation adjustments | (529 | ) | — | (529 | ) | ||||||||
Allocation on sale of a business unit (1) | (500 | ) | — | (500 | ) | ||||||||
Balance at December 31, 2014 | $ | 118,260 | $ | 21,339 | $ | 139,599 | |||||||
Goodwill arising from RPM acquisition | — | 32,280 | 32,280 | ||||||||||
Currency translation adjustments | 218 | — | 218 | ||||||||||
Balance at March 31, 2015 | $ | 118,478 | $ | 53,619 | $ | 172,097 | |||||||
-1 | Relates to the sale of a business unit (acquired with the OPI acquisition) during the year ended December 31, 2014. The net loss recognized from the sale of this business unit was $149 and was included under “other income/ (expense)” in the consolidated statements of income included in the company’s annual report on Form 10-K for the year ended December 31, 2014. | ||||||||||||
Intangible Assets | |||||||||||||
Information regarding the Company’s intangible assets is as follows: | |||||||||||||
As of March 31, 2015 | |||||||||||||
Gross | Accumulated | Net Carrying | |||||||||||
Carrying Amount | Amortization | Amount | |||||||||||
Customer relationships | $ | 63,670 | $ | (18,292 | ) | $ | 45,378 | ||||||
Leasehold benefits | 2,952 | (2,074 | ) | 878 | |||||||||
Developed technology | 12,063 | (2,851 | ) | 9,212 | |||||||||
Non-compete agreements | 1,974 | (1,330 | ) | 644 | |||||||||
Trade names and trademarks | 6,221 | (2,248 | ) | 3,973 | |||||||||
$ | 86,880 | $ | (26,795 | ) | $ | 60,085 | |||||||
As of December 31, 2014 | |||||||||||||
Gross | Accumulated | Net Carrying | |||||||||||
Carrying Amount | Amortization | Amount | |||||||||||
Customer relationships | $ | 51,598 | $ | (16,836 | ) | $ | 34,762 | ||||||
Leasehold benefits | 2,927 | (2,004 | ) | 923 | |||||||||
Developed technology | 10,814 | (2,402 | ) | 8,412 | |||||||||
Non-compete agreements | 1,365 | (1,323 | ) | 42 | |||||||||
Trade names and trademarks | 4,990 | (2,150 | ) | 2,840 | |||||||||
$ | 71,694 | $ | (24,715 | ) | $ | 46,979 | |||||||
Amortization expense for the three months ended March 31, 2015 and 2014 was $2,059 and $1,536, respectively. The weighted average life of intangible assets was 8.9 years for customer relationships, 8.0 years for leasehold benefits, 6.5 years for developed technology, 4.9 years for non-compete agreements and 6.8 years for trade names and trademarks excluding indefinite life trade names and trademarks. The Company had $900 of indefinite life trade names and trademarks as of March 31, 2015 and December 31, 2014. | |||||||||||||
2016 | $ | 10,633 | |||||||||||
2017 | $ | 10,629 | |||||||||||
2018 | $ | 10,501 | |||||||||||
2019 | $ | 10,405 | |||||||||||
2020 | $ | 8,395 |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | 6. Fair Value Measurements | ||||||||||||||||
Assets and Liabilities Measured at Fair Value | |||||||||||||||||
The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2015 and December 31, 2014. The table excludes short-term investments, accounts receivable, accounts payable and accrued expenses for which fair values approximate their carrying amounts. | |||||||||||||||||
As of March 31, 2015 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money market and mutual funds* | $ | 103,424 | $ | — | $ | — | $ | 103,424 | |||||||||
Derivative financial instruments | — | 5,864 | — | 5,864 | |||||||||||||
Total | $ | 103,424 | $ | 5,864 | $ | — | $ | 109,288 | |||||||||
Liabilities | |||||||||||||||||
Derivative financial instruments | $ | — | $ | 1,747 | $ | — | $ | 1,747 | |||||||||
Total | $ | — | $ | 1,747 | $ | — | $ | 1,747 | |||||||||
As of December 31, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money market and mutual funds | $ | 127,347 | $ | — | $ | — | $ | 127,347 | |||||||||
Derivative financial instruments | — | 4,579 | — | 4,579 | |||||||||||||
Total | $ | 127,347 | $ | 4,579 | $ | — | $ | 131,926 | |||||||||
Liabilities | |||||||||||||||||
Derivative financial instruments | — | 2,961 | — | $ | 2,961 | ||||||||||||
Total | $ | — | $ | 2,961 | $ | — | $ | 2,961 | |||||||||
* | Includes investments carried on fair value option under ASC 825 of $4,844. | ||||||||||||||||
Derivative Financial Instruments: The Company’s derivative financial instruments consist of foreign currency forward exchange contracts. Fair values for derivative financial instruments are based on independent sources including highly rated financial institutions and are classified as Level 2. See Note 7 for further details on Derivatives and Hedge Accounting. |
Derivatives_and_Hedge_Accounti
Derivatives and Hedge Accounting | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||
Derivatives and Hedge Accounting | 7. Derivatives and Hedge Accounting | ||||||||||||||||||||||||||||
The Company uses derivative instruments and hedging transactions to mitigate exposure to foreign currency fluctuation risks associated with forecasted transactions denominated in certain foreign currencies and to minimize earnings and cash flow volatility associated with changes in foreign currency exchange rates. The Company’s derivative financial instruments are largely forward foreign exchange contracts that are designated effective and that qualify as cash flow hedges under ASC topic 815, “Derivatives and hedging” (ASC No. 815). The Company also uses derivatives consisting of foreign currency exchange contracts not designated as hedging instruments under ASC No. 815 to hedge intercompany balances and other monetary assets or liabilities denominated in currencies other than the Company’s functional currency (“fair value hedges”). The Company’s primary exchange rate exposure is with the Indian Rupee, the U.K. pound sterling and the Philippine peso. The Company also has exposure in Czech koruna and other local currencies in which it operates. | |||||||||||||||||||||||||||||
The Company had outstanding foreign exchange contracts totaling $282,577 and GBP 13,256 as of March 31, 2015 and totaling $276,018 and GBP 10,889 as of December 31, 2014. The Company estimates that approximately $1,004 of net derivative gains included in accumulated other comprehensive loss (“AOCI”) could be reclassified into earnings within the next twelve months based on exchange rates prevailing as of March 31, 2015. As of March 31, 2015, the maximum outstanding term of derivative instruments that hedge forecasted transactions was forty-five months. | |||||||||||||||||||||||||||||
The Company evaluates the hedge effectiveness at the time a contract is entered into as well as on an ongoing basis. If during this time a contract is deemed ineffective, the change in the fair value is recorded in the unaudited consolidated statements of income and is included in foreign exchange loss. For hedging positions that are discontinued because the forecasted transaction is not expected to occur by the end of the originally specified period, any related derivative amounts recorded in equity are reclassified to earnings. No significant amounts of gains or losses were reclassified from AOCI into earnings during the three months ended March 31, 2015 and 2014. | |||||||||||||||||||||||||||||
The following tables set forth the fair value of the foreign currency exchange contracts and their location on the unaudited consolidated financial statements: | |||||||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Other current assets: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 2,324 | $ | 1,243 | |||||||||||||||||||||||||
Other assets: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 3,437 | $ | 3,193 | |||||||||||||||||||||||||
Accrued expenses and other current liabilities: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 1,320 | $ | 2,385 | |||||||||||||||||||||||||
Other non-current liabilities: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 398 | $ | 576 | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Other current assets: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 103 | $ | 143 | |||||||||||||||||||||||||
Accrued expenses and other current liabilities: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 29 | $ | — | |||||||||||||||||||||||||
The following tables set forth the effect of foreign currency exchange contracts on the unaudited consolidated statements of income for the three months ended March 31, 2015 and 2014: | |||||||||||||||||||||||||||||
Derivatives in Cash Flow | Amount of Gain/ | Location of Gain/(Loss) | Amount of Gain/ | Location of Gain/(Loss) | Amount of Gain/ | ||||||||||||||||||||||||
Hedging Relationships | (Loss) Recognized in | Reclassified from | (Loss) Reclassified from | Recognized in Income | (Loss) Recognized in | ||||||||||||||||||||||||
AOCI on | AOCI into Income | AOCI into Income | on Derivative | Income on Derivative | |||||||||||||||||||||||||
Derivative | (Effective Portion) | (Effective Portion) | (Ineffective Portion and | (Ineffective Portion and | |||||||||||||||||||||||||
(Effective Portion) | Amount Excluded from | Amount Excluded from | |||||||||||||||||||||||||||
Effectiveness Testing) | Effectiveness Testing) | ||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Foreign exchange contracts | $ | 2,259 | $ | 7,010 | Foreign exchange loss | $ | (309 | ) | $ | (2,254 | ) | Foreign exchange loss | $ | — | $ | — | |||||||||||||
Derivatives not designated as Hedging Instruments | Location of Gain or (Loss) | Amount of Gain/(Loss) | |||||||||||||||||||||||||||
Recognized in Income on | |||||||||||||||||||||||||||||
Derivatives | |||||||||||||||||||||||||||||
Recognized in Income on Derivatives | 2015 | 2014 | |||||||||||||||||||||||||||
Foreign exchange contracts | Foreign exchange loss | $ | 2,096 | $ | 2,714 |
Fixed_Assets
Fixed Assets | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Fixed Assets | 8. Fixed Assets | ||||||||
Fixed assets consist of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Owned Assets: | |||||||||
Network equipment, computers and software | $ | 88,238 | $ | 83,140 | |||||
Buildings | 1,273 | 1,262 | |||||||
Land | 833 | 826 | |||||||
Leasehold improvements | 27,943 | 26,416 | |||||||
Office furniture and equipment | 12,902 | 12,218 | |||||||
Motor vehicles | 535 | 542 | |||||||
Capital work in progress | 2,637 | 3,029 | |||||||
134,361 | 127,433 | ||||||||
Less: Accumulated depreciation and amortization | (87,701 | ) | (82,947 | ) | |||||
$ | 46,660 | $ | 44,486 | ||||||
Assets under capital leases: | |||||||||
Leasehold improvements | $ | 956 | $ | 961 | |||||
Office furniture and equipment | 194 | 219 | |||||||
Motor vehicles | 888 | 848 | |||||||
2,038 | 2,028 | ||||||||
Less: Accumulated depreciation and amortization | (1,231 | ) | (1,145 | ) | |||||
$ | 807 | $ | 883 | ||||||
Fixed assets, net | $ | 47,467 | $ | 45,369 | |||||
Depreciation and amortization expense excluding amortization of acquisition-related intangibles for the three months ended March 31, 2015 and 2014 was $4,994 and $4,820, respectively. | |||||||||
Capital work in progress represents advances paid toward acquisitions of fixed assets and the cost of fixed assets not yet ready to be placed in service. |
Capital_Structure
Capital Structure | 3 Months Ended |
Mar. 31, 2015 | |
Text Block [Abstract] | |
Capital Structure | 9. Capital Structure |
The Company has one class of common stock outstanding. | |
During the three months ended March 31, 2015 and 2014, the Company acquired 12,866 and 18,256 shares of common stock, respectively, from employees in connection with withholding tax payments related to the vesting of restricted stock for a total consideration of $397 and $459, respectively. The weighted average purchase price of $30.83 and $25.14, respectively, was the average of the high and low price of the Company’s common stock on the Nasdaq Global Select Market on the trading day prior to the vesting date of the shares of restricted stock. The shares acquired are held as treasury stock. | |
Repurchased shares have been recorded as treasury shares and will be held until the Company’s board of directors designates that these shares be retired or used for other purposes. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | 10. Borrowings |
On October 24, 2014, the Company entered into a credit agreement (the “Credit Agreement”) with certain lenders and JPMorgan Chase Bank, N.A., as Administrative Agent. The Credit Agreement provides for a $50,000 revolving credit facility (the “Credit Facility”), including a letter of credit sub-facility, for a period of five years. The Company had an option to increase the commitments under the Credit Facility by up to an additional $50,000, subject to certain approvals and conditions as set forth in the Credit Agreement. On February 23, 2015, the Company exercised its option to increase credit commitments by another $50,000 upon the same terms and conditions which were available in the Credit Agreement The credit facility has a maturity date of October 24, 2019 and is voluntarily prepayable from time to time without premium or penalty. | |
Borrowings under the Credit Facility may be used for working capital, general corporate purposes and for acquisitions. The Company has borrowed $80,000 under the Credit Facility as on March 31, 2015. For the additional borrowing of $30,000 during the three months ended March 31, 2015, the Company incurred $50 as debt issuance costs, which are deferred and amortized as an adjustment to interest expense over the term of the Credit Facility on a straight line basis. | |
Borrowings under the Credit Facility bear interest at a rate equal to the specified prime rate (alternate base rate) or adjusted LIBO rate, plus, an applicable margin. The applicable margin is tied to the Company’s leverage ratio and ranges from 0.25% to 0.75% per annum with respect to loans (“ABR Loans”) pegged to the specified prime rate, and 1.25% to 1.75% per annum on loans (“Eurodollar Loans”) pegged to the adjusted LIBO rate (such applicable margin, the “Applicable Rate”). The revolving credit commitments under the Credit Agreement are subject to a commitment fee. The commitment fee is also tied to the Company’s leverage ratio, and ranges from 0.20% to 0.30% per annum on the average daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving loans and letter of credit obligations. The Credit Facility carried an interest rate of 1.56% per annum during the three months ended March 31, 2015. | |
The obligations under the Credit Agreement are secured by all or substantially all of the assets of the Company and its material domestic subsidiaries. The Credit Agreement contains certain covenants including a restriction on indebtedness of the Company. |
Employee_Benefit_Plans
Employee Benefit Plans | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||
Employee Benefit Plans | 11. Employee Benefit Plans | ||||||||
The Company’s Gratuity Plans in India and the Philippines provide a lump-sum payment to its vested employees upon retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities with regard to the Gratuity Plans are determined by actuarial valuation using the projected unit credit method. Current service costs for the Gratuity Plans are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans are recognized and amortized over the remaining period of service of the employees. | |||||||||
Net gratuity cost includes the following components: | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Service cost | $ | 423 | $ | 378 | |||||
Interest cost | 142 | 139 | |||||||
Expected return on plan assets | (100 | ) | (43 | ) | |||||
Actuarial loss | 55 | 37 | |||||||
Net gratuity cost | $ | 520 | $ | 511 | |||||
The Gratuity Plans in India are partially funded and are managed and administered by Life Insurance Corporation of India and HDFC Standard Life Insurance Company. They calculate the annual contribution required to be made by the Company and manage the Gratuity Plans, including any required payouts. Fund managers manage these funds on a cash accumulation basis and declare interest retrospectively on March 31 of each year. The Company estimated a return of approximately 9% on these Gratuity Plans for the year ended March 31, 2015 and 2014, respectively. | |||||||||
Plan assets at January 1, 2015 | $ | 4,752 | |||||||
Actual return | 109 | ||||||||
Benefits paid | (197 | ) | |||||||
Effect of exchange rate changes | 41 | ||||||||
Plan assets at March 31, 2015 | $ | 4,705 | |||||||
The Company maintains the Exl Service 401(k) Plan (the “401(k) Plan”) under Section 401(k) of the Internal Revenue Code of 1986 (the “Code”), covering all eligible employees, as defined. The Company may make discretionary contributions of up to a maximum of 3% of employee compensation within certain limits. The Company has made provisions for contributions to the 401(k) Plan amounting to $768 and $503 during the three month periods ended March 31, 2015 and March 31, 2014, respectively. | |||||||||
During the three month periods ended March 31, 2015 and 2014, the Company contributed the following amounts to various defined contribution plans on behalf of its employees in India, the Philippines, Romania, Bulgaria and the Czech Republic: | |||||||||
Three months ended March 31, 2015 | $ | 1,465 | |||||||
Three months ended March 31, 2014 | $ | 1,398 |
Leases
Leases | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Leases [Abstract] | |||||
Leases | 12. Leases | ||||
The Company finances its use of certain leasehold improvements, furniture, fixtures, office equipment and motor vehicles under various lease arrangements provided by financial institutions. Future minimum lease payments under these capital leases as of March 31, 2015 are as follows: | |||||
Year ending March 31, | |||||
2016 | $ | 825 | |||
2017 | 291 | ||||
2018 | 132 | ||||
2019 | 52 | ||||
Total minimum lease payments | 1,300 | ||||
Less: amount representing interest | 133 | ||||
Present value of minimum lease payments | 1,167 | ||||
Less: current portion | 743 | ||||
Long term capital lease obligation | $ | 424 | |||
The Company conducts its operations using facilities leased under non-cancelable operating lease agreements that expire at various dates. Future minimum lease payments under non-cancelable agreements expiring after March 31, 2015 are set forth below: | |||||
Year ending March 31, | |||||
2016 | $ | 10,768 | |||
2017 | 6,704 | ||||
2018 | 4,743 | ||||
2019 | 2,889 | ||||
2020 | 1,688 | ||||
2021 and thereafter | 334 | ||||
$ | 27,126 | ||||
The operating leases are subject to renewal periodically and have scheduled rent increases. The Company accounts for scheduled rent on such leases on a straight line basis over the non-cancelable lease period determined under ASC Topic 840 Lease Accounting (“ASC No. 840”). Rent expense under both cancelable and non-cancelable operating leases was $4,985 and $4,481 for the three months ended March 31, 2015 and 2014, respectively. Deferred rent as of March 31, 2015 and December 31, 2014 was $6,921 and $6,544, respectively, and is included under “Accrued expenses and other current liabilities” and “Non-current liabilities” in the consolidated balance sheets. |
Income_Taxes
Income Taxes | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Income Tax Disclosure [Abstract] | |||||
Income Taxes | 13. Income Taxes | ||||
The Company determines the tax provision for interim periods using an estimate of its annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment. | |||||
The Company recorded income tax expense of $6,213 and $4,465 for the three months ended March 31, 2015 and 2014, respectively. The effective tax rate increased from 28.6% during the three months ended March 31, 2014 to 39.4% during the three months ended March 31, 2015. The increase in effective tax rate was primarily due to immaterial errors related to prior years (individually as well as when aggregated) which was recorded during the three months ended March 31, 2015, and resulted in an increase in income tax expense of approximately $1,800 (including $1,285 related to the taxability of certain foreign income in those prior years for which the Company recorded a reserve for an unrecognized tax benefit). In accordance with ASC Topic 250, Accounting Changes and Error Corrections, the Company evaluated the effects of the errors on its financial statements for those prior years and the expected full year financial results for the year ending December 31, 2015 and concluded that the results of operations for these periods are not materially misstated. In reaching its conclusion, the Company considered qualitative and quantitative factors. The effective tax rate further increased due to the expiration of tax holiday in one of the Company’s operating centres registered with the Philippine Economic Zone Authority (“PEZA”). | |||||
The following table summarizes the activity related to the gross unrecognized tax benefits from January 1, 2015 through March 31, 2015: | |||||
Balance as of January 1, 2015 | $ | 2,761 | |||
Increases related to prior year tax positions | 1,239 | ||||
Decreases related to prior year tax positions | — | ||||
Increases related to current year tax positions | — | ||||
Decreases related to current year tax positions | — | ||||
Effect of exchange rate changes | 15 | ||||
Balance as of March 31, 2015 | $ | 4,015 | |||
The unrecognized tax benefits as of March 31, 2015 of $4,015, if recognized, would impact the effective tax rate. | |||||
During the three months ended March 31, 2015 and 2014, the Company has recognized interest of $99 and $55 respectively, which are included in the income tax expense in the unaudited consolidated statements of income. As of March 31, 2015 and December 31, 2014, the Company has accrued approximately $1,224 and $1,117, respectively, in interest relating to unrecognized tax benefits. | |||||
The unrecognized tax benefits may increase or decrease in the next twelve months depending on the Company’s tax position. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Stock-Based Compensation | 14. Stock-Based Compensation | ||||||||||||||||
The following costs related to the Company’s stock-based compensation plan are included in the unaudited consolidated statements of income: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Cost of revenue | $ | 1,103 | $ | 1,013 | |||||||||||||
General and administrative expenses | 1,483 | 1,514 | |||||||||||||||
Selling and marketing expenses | 1,669 | 1,649 | |||||||||||||||
Total | $ | 4,255 | $ | 4,176 | |||||||||||||
Stock Options | |||||||||||||||||
Stock option activity under the Company’s stock plans is shown below: | |||||||||||||||||
Number of | Weighted- | Aggregate | Weighted- | ||||||||||||||
Options | Average Exercise | Intrinsic Value | Average | ||||||||||||||
Price | Remaining | ||||||||||||||||
Contractual Life | |||||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2014 | 1,433,179 | $ | 16.23 | $ | 17,889 | 4.47 | |||||||||||
Granted | — | — | — | — | |||||||||||||
Exercised | (122,202 | ) | 15.42 | ||||||||||||||
Forfeited | (2,730 | ) | 24.77 | ||||||||||||||
Outstanding at March 31, 2015 | 1,308,247 | $ | 16.29 | $ | 27,361 | 4.17 | |||||||||||
Vested and exercisable at March 31, 2015 | 1,216,856 | $ | 15.67 | $ | 26,195 | 4.01 | |||||||||||
Available for grant at March 31, 2015 | 621,225 | ||||||||||||||||
The unrecognized compensation cost for unvested options as of March 31, 2015 is $577 which is expected to be expensed over a weighted average period of 0.8 years. The Company did not grant any options during the three months ended March 31, 2015. The weighted-average fair value of options granted during the three months ended March 31, 2014 $9.77. The total grant date fair value of options vested during the three months ended March 31, 2015 and 2014 was $1,126 and $1,192 respectively. | |||||||||||||||||
Restricted Stock and Restricted Stock Units | |||||||||||||||||
Restricted stock and restricted stock unit activity under the Company’s stock plans is shown below: | |||||||||||||||||
Restricted Stock | Restricted Stock Units | ||||||||||||||||
Number | Weighted-Average | Number | Weighted-Average | ||||||||||||||
Intrinsic Value | Intrinsic Value | ||||||||||||||||
Outstanding at December 31, 2014* | 46,950 | $ | 29.29 | 1,189,691 | $ | 26.54 | |||||||||||
Granted | 122,131 | 35.91 | 448,228 | 34.98 | |||||||||||||
Vested | — | — | (288,041 | ) | 25.01 | ||||||||||||
Forfeited | — | — | (29,133 | ) | 26.46 | ||||||||||||
Outstanding at March 31, 2015* | 169,081 | $ | 34.07 | 1,320,745 | $ | 29.74 | |||||||||||
* | Excludes 136,016 and 128,000 vested restricted stock units as of March 31, 2015 and December 31, 2014, respectively, for which the underlying common stock is yet to be issued. | ||||||||||||||||
As of March 31, 2015, unrecognized compensation cost of $40,382 is expected to be expensed over a weighted average period of 3.17 years. | |||||||||||||||||
Performance Based Stock Awards | |||||||||||||||||
Performance restricted stock unit (the “PRSU’s”) activity under the Company’s stock plans is shown below: | |||||||||||||||||
Revenue Based PRSU’s | Market Condition Based PRSU’s | ||||||||||||||||
Number | Weighted Avg | Number | Weighted Avg | ||||||||||||||
Intrinsic Value | Intrinsic Value | ||||||||||||||||
Outstanding at Dec 31, 2014 | 47,725 | $ | 25.63 | 47,725 | $ | 33.6 | |||||||||||
Granted | 62,788 | 34.75 | 62,787 | 54.63 | |||||||||||||
Vested | — | — | — | — | |||||||||||||
Forfeited | (1,250 | ) | 25.63 | (1,250 | ) | 33.6 | |||||||||||
Outstanding at March 31, 2015 | 109,263 | $ | 30.87 | 109,262 | $ | 45.68 | |||||||||||
As of March 31, 2015, unrecognized compensation cost of $7,283 is expected to be expensed over a weighted average period of 2.51 years. |
Geographical_Information
Geographical Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Text Block [Abstract] | |||||||||
Geographical Information | 15. Geographical Information | ||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Revenues, net | |||||||||
United States | $ | 111,865 | $ | 90,413 | |||||
United Kingdom | 25,835 | 23,421 | |||||||
Rest of World | 5,810 | 7,963 | |||||||
$ | 143,510 | $ | 121,797 | ||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Fixed assets, net | |||||||||
India | $ | 26,625 | $ | 24,186 | |||||
United States | 9,531 | 8,293 | |||||||
Philippines | 10,824 | 12,391 | |||||||
Rest of World | 487 | 499 | |||||||
$ | 47,467 | $ | 45,369 | ||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies |
Fixed Asset Commitments | |
As of March 31, 2015, the Company had committed to spend approximately $7,937 under agreements to purchase fixed assets. This amount is net of capital advances paid in respect of these purchases. | |
Other Commitments | |
Certain units of the Company’s Indian subsidiaries were established as 100% Export-Oriented units or under the Software Technology Parks of India (“STPI”) 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. The Company has 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. The Company’s management believes, however, that these units have in the past satisfied and will continue to satisfy the required conditions. | |
The Company’s operations centers in the Philippines are registered with the Philippine Economic Zone Authority (“PEZA”). The registration provides the Company with certain fiscal incentives on the import of capital goods and requires Exl Philippines to meet certain performance and investment criteria. The Company’s management believes that these centers have in the past satisfied and will continue to satisfy the required criteria. | |
Contingencies | |
U.S. and Indian transfer pricing regulations require that any international transaction involving associated enterprises be at an arm’s length price. Accordingly, the Company determines the appropriate pricing for the international transactions among its associated enterprises on the basis of a detailed functional and economic analysis involving benchmarking against transactions among entities that are not under common control. The tax authorities have jurisdiction to review this arrangement and in the event that they determine that the transfer price applied was not appropriate, the Company may incur increased tax liability, including accrued interest and penalties. The Company is currently involved in disputes with the Indian tax authorities over the application of some of its transfer pricing policies for some of its subsidiaries. Further, the Company and its U.S. subsidiary, ExlService.com LLC are engaged in tax litigation with the income-tax authorities in India on the issue of permanent establishment. | |
The aggregate disputed amount demanded by Indian tax authorities from the Company related to its transfer pricing issues for various years ranging from tax years 2003 to 2011 and its permanent establishment issues ranging from tax years 2003 to 2011 as of March 31, 2015 and December 31, 2014 is $20,208 and $22,866, respectively, of which the Company has already made payments or provided bank guarantees to the extent of $15,425 and $14,666, respectively. Amounts paid as deposits in respect of such assessments aggregating to $13,305 and $12,564 as of March 31, 2015 and December 31, 2014, respectively, are included in “Other assets” and amounts deposited for bank guarantees aggregating to $2,120 and $2,102 as of March 31, 2015 and December 31, 2014, respectively, are included in “Restricted cash” in the non-current assets section of the Company’s unaudited consolidated balance sheet as of March 31, 2015 and consolidated balance sheet as of December 31, 2014. | |
Based on advice from its Indian tax advisors, the facts underlying the Company’s position and its experience with these types of assessments, the Company believes that the probability that it will ultimately be found liable for these assessments is remote and accordingly has not accrued any amount with respect to these matters in its consolidated financial statements. The Company does not expect any impact from these assessments on its future income tax expense. It is possible that the Company might receive similar orders or assessments from tax authorities for subsequent years. Accordingly even if these disputes are resolved, the Indian tax authorities may still serve additional orders or assessments. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Policies) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||||
The unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |||||||||||||
The unaudited interim consolidated financial statements reflect all adjustments (of a normal and recurring nature) that management considers necessary for a fair presentation of such statements for the interim periods presented. The unaudited consolidated statements of income for the interim periods presented are not necessarily indicative of the results for the full year or for any subsequent period. | |||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||
The accompanying unaudited consolidated financial statements include the financial statements of ExlService Holdings and all of its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||
The preparation of the unaudited consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the unaudited consolidated statements of income during the reporting period. Although these estimates are based on management’s best assessment of the current business environment, actual results may be different from those estimates. The significant estimates and assumptions that affect the financial statements include, but are not limited to, allowance for doubtful receivables, service tax receivables, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments, stock-based compensation expense, depreciation and amortization periods, purchase price allocation, recoverability of long-term assets including goodwill and intangibles, and estimates to complete the fixed price contracts. | |||||||||||||
In accordance with its policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. This review indicated that the actual lives of certain fixed assets were longer than the estimated useful lives used for depreciation purposes in the Company’s financial statements. As a result, effective January 1, 2015, the Company changed its estimates of the useful lives of its certain fixed assets to better reflect the estimated periods during which these assets will remain in service. The effect of change in estimated useful life of assets reduced depreciation expense by $468, increased net income by $281 and increased basic and diluted earnings per share by $0.01, during the three months ended March 31, 2015. | |||||||||||||
Revenue Recognition | a) | Revenue Recognition | |||||||||||
As part of reimbursing the Travelers Indemnity Company (“Travelers”) for certain of their transition related expenses (the “disentanglement costs”), the Company recognized $2,471 of such reimbursements as a reduction of our revenues during the three months ended March 31, 2014, in accordance with Accounting Standards Codification topic 605-50-45, “Revenue Recognition.” The Company did not incur any reimbursements of disentanglement costs during the three months ended March 31, 2015 and also does not anticipate incurring any additional reimbursements of disentanglement costs going forward. | |||||||||||||
Investments | b) | Investments | |||||||||||
The Company’s investments consist of time deposits with financial institutions which are valued at cost and approximate fair value. Interest earned on such investments is included in interest income. Investments with original maturities greater than ninety days but less than twelve months are classified as short-term investments. Investments with maturities greater than twelve months from the balance sheet date are classified as long-term investments. | |||||||||||||
The Company’s investments in open ended mutual funds represent investments in mutual fund scheme wherein the mutual fund issuer has invested these funds in debt and money market instruments of various maturities in India. The Company manages mutual fund investments on a fair value basis in accordance with its documented risk management, investment strategy and information provided to the management. The Company accounts for these investments in accordance with the fair value option under ASC topic 825-10 (“ASC No. 825-10”) and change in fair value is recognized in the income statement. The fair value represents original cost (on the acquisition date) and the net asset value (“NAV”) as quoted, at each reporting period. Gain or loss on the disposal of these investments would be calculated using the weighted average cost of the investments sold or disposed. | |||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is not permitted. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company. ASU 2014-09 is effective for the Company in the first quarter of fiscal 2017 using either one of two methods: (i) retrospectively to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the impact of adoption and the implementation approach to be used. | |||||||||||||
In April 2015, the FASB issued ASU No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (ASU 2015-05”). The amendments add guidance to Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software, which will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The amendments will be effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating the method of adoption and impact this standard will have on its financial statements and related disclosures. | |||||||||||||
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | ||||||||||||
Accrued expenses and other current liabilities consist of the following: | |||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Accrued expenses | $ | 27,500 | $ | 24,451 | |||||||||
Derivative instruments | 1,349 | 2,385 | |||||||||||
Client liability account | 2,987 | 9,241 | |||||||||||
Other current liabilities | 7,550 | 4,129 | |||||||||||
Accrued expenses and other current liabilities | $ | 39,386 | $ | 40,206 | |||||||||
Non-current liabilities | Non-current liabilities | ||||||||||||
Non-current liabilities consist of the following: | |||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Derivative instruments | $ | 398 | $ | 576 | |||||||||
Unrecognized tax benefits | 4,239 | 2,878 | |||||||||||
Deferred rent | 6,324 | 5,977 | |||||||||||
Retirement benefits | 1,544 | 1,544 | |||||||||||
Other non-current liabilities | 1,222 | 1,895 | |||||||||||
Non-current liabilities | $ | 13,727 | $ | 12,870 | |||||||||
Other income | Other income | ||||||||||||
Other income (expense), net consists of the following: | |||||||||||||
Three months ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Interest and dividend income* | $ | 1,402 | $ | 877 | |||||||||
Interest expense | (283 | ) | (113 | ) | |||||||||
Others, net | 59 | 194 | |||||||||||
Other income, net | $ | 1,178 | $ | 958 | |||||||||
* | Includes unrealized gain of $42 on investments carried under fair value option. | ||||||||||||
Business Combinations, Goodwill and Intangible Assets | a) | Overland Holdings, Inc. | |||||||||||
On October 24, 2014, ExlService.com acquired all of the outstanding shares of Overland Holdings, Inc. (“Overland”) pursuant to a Plan of Merger (the “Merger”). | |||||||||||||
The aggregate consideration for Overland’s acquisition was $65,940 (the “Merger Consideration”), which included working capital adjustments of $12,940. The Merger Consideration was paid with existing cash on hand. A portion of the Merger Consideration otherwise payable in the Merger was placed into escrow as security for post-closing working capital adjustments and the indemnification obligations under the Merger Agreement. | |||||||||||||
Overland, now a subsidiary of the Company is a leader in underwriting support services for Property & Casualty (“P&C”) insurers. It leverages proprietary workflow and automation technology, alongside transaction-based-pricing models to offer Business-Process-as-a-Service (“BPaaS”) solutions. Overland’s longstanding client relationships, experienced leadership team and technology-enabled services will enhance the Company’s market leading position in Operations Management to P&C insurers and also strengthens the Company’s onshore delivery capabilities. Overland’s technology and data directly connects and interfaces with its clients providing an integrated Operations Management solution. The acquisition presents an opportunity to leverage the Company’s analytics capabilities to enable Overland’s clients to increase the effectiveness of their underwriting. Accordingly, the Company paid a premium for the acquisition which is being reflected in the goodwill recognized from the purchase price allocation of the total consideration paid by the Company. | |||||||||||||
During the three months ended March 31, 2015, the Company finalized its purchase price allocation for the acquisition, which is as follows: | |||||||||||||
Amount | |||||||||||||
(In thousands) | |||||||||||||
Net tangible assets | $ | 18,873 | |||||||||||
Identifiable intangible assets: | |||||||||||||
Customer relationships | 12,200 | ||||||||||||
Developed Technology | 4,800 | ||||||||||||
Trade Names & Trademarks | 1,400 | ||||||||||||
Goodwill | 28,667 | ||||||||||||
Total purchase price* | $ | 65,940 | |||||||||||
* | Includes amount of $4,550 deposited in escrow accounts in connection with the acquisition. | ||||||||||||
The customer relationships, trade names and trademarks and developed technology from the Overland acquisition are being amortized over a useful life of twelve, ten years and five years, respectively. | |||||||||||||
The Company’s results of operations for the three months ended March 31, 2015 includes $16,873 of revenues from Overland. It is not practicable to disclose the net earnings of Overland in particular, because management does not allocate or evaluate operating expenses and income taxes to its domestic entities. | |||||||||||||
The amount of goodwill recognized from the Overland acquisition is deductible for tax purposes. | |||||||||||||
b) | RPM Direct LLC and RPM Data Solutions, LLC | ||||||||||||
On March 20, 2015 ExlService.com completed its acquisition of RPM Direct LLC and RPM Data Solutions, LLC (each a “Target Company” and together the “Target Companies” or “RPM”), pursuant to a Securities Purchase Agreement dated February 23, 2015 (the “Purchase Agreement”). Under the terms of the Purchase Agreement ExlService.com acquired all of the issued and outstanding limited liability company membership interests of the Target Companies (the “Securities”) from the security holders of each of the Target Companies. | |||||||||||||
The initial purchase consideration consisted of $47,000 in cash, subject to adjustment based on the closing date final working capital amount and shortfall in financial performance of the Target Companies for 2014, if any, contingent cash consideration of up to $23,000, as described below, and 122,131 restricted shares of common stock of the Company. | |||||||||||||
The purchase agreement allows sellers the ability to earn up to an additional $23,000 (the “earn-out”) based on the achievement of certain performance goals by the Target Companies during the 2015 and 2016 calendar years. The earn-out has an estimated fair value of $2,844. As noted above, the Company issued 122,131 restricted shares of common stock with an aggregate fair value of $4,150 to certain key members of the Target Companies, each of whom have accepted employment positions with the Company upon consummation of the combination. The Company also granted 113,302 restricted stock units with an aggregate fair value of $3,850 to certain employees of Target Companies, who have also accepted employment with the Company. The fair value of these grants will be recognized as compensation expense over the vesting period. | |||||||||||||
RPM, now as a subsidiary of the Company, specializes in analyzing large consumer data sets to segment populations, predict response rates, forecast customer lifetime value and design targeted, multi-channel marketing campaigns. RPM has focused on the insurance industry, including P&C, life and health, since its inception in 2001. RPM maintains its own database and supports data on over 250 million consumers and 120 million U.S. households. The quantity and combination of data attributes managed by RPM drives optimal, data-driven decision-making and enables it to build models that analyze prospects individually. RPM employs proprietary predictive analytics and domain-specific pattern recognition algorithms to deliver results through a flexible, on-demand service model. Accordingly, the Company paid a premium for the acquisition which is being reflected in the goodwill recognized from the purchase price allocation of the total consideration paid by the Company. | |||||||||||||
The Company made a preliminary allocation of the purchase price to the net tangible and intangible assets based on their fair values as mentioned below: | |||||||||||||
Amount | |||||||||||||
(In thousands) | |||||||||||||
Net tangible assets | $ | 2,419 | |||||||||||
Identifiable intangible assets: | |||||||||||||
Customer Relationship | 12,063 | ||||||||||||
Trade Names | 1,231 | ||||||||||||
Developed Technology | 1,249 | ||||||||||||
Non-Compete Agreements | 609 | ||||||||||||
Goodwill | 32,280 | ||||||||||||
Total purchase price* | $ | 49,851 | |||||||||||
* | Includes amount of $4,125 deposited in escrow accounts in connection with the acquisition. | ||||||||||||
The customer relationships from the RPM acquisition are being amortized over the weighted average useful life of 5.7 years. Similarly, trade names, developed technology and non-compete agreements are being amortized over a useful life of five years each. | |||||||||||||
Under ASC topic 805, “Business Combinations,” the preliminary allocation of the purchase price to the tangible and intangible assets and liabilities acquired may change up to a period of one year from the date of the acquisition. Accordingly, the Company may adjust the amounts recorded as of March 31, 2015 to reflect any revised valuations of the assets acquired or liabilities assumed. The Company’s purchase accounting as of March 31, 2015 was incomplete due to final adjustments to the fair value of tangible assets, intangible assets and liabilities assumed as of the acquisition date. | |||||||||||||
During the three months ended March 31, 2015 the Company recognized $303 of acquisition related costs. Such amounts are included in general and administrative expenses in the consolidated statements of income. The Company’s results of operations for the three months ended March 31, 2015 includes $1,191 of revenues of RPM since March 20, 2015, the date on which the acquisition was consummated. It is not practicable to disclose the net earnings since management does not allocate or evaluate operating expenses and income taxes to its domestic entities. | |||||||||||||
The amount of goodwill recognized from the RPM acquisition is deductible for tax purposes. | |||||||||||||
Goodwill | |||||||||||||
The following table sets forth details of the Company’s goodwill balance as of March 31, 2015: | |||||||||||||
Operations | Analytics and | Total | |||||||||||
Management | Business | ||||||||||||
Transformation | |||||||||||||
Balance at January 1, 2014 | $ | 90,622 | $ | 16,785 | $ | 107,407 | |||||||
Goodwill arising from Blue Slate acquisition | — | 4,554 | $ | 4,554 | |||||||||
Goodwill arising from Overland acquisition | 28,667 | — | $ | 28,667 | |||||||||
Currency translation adjustments | (529 | ) | — | (529 | ) | ||||||||
Allocation on sale of a business unit (1) | (500 | ) | — | (500 | ) | ||||||||
Balance at December 31, 2014 | $ | 118,260 | $ | 21,339 | $ | 139,599 | |||||||
Goodwill arising from RPM acquisition | — | 32,280 | 32,280 | ||||||||||
Currency translation adjustments | 218 | — | 218 | ||||||||||
Balance at March 31, 2015 | $ | 118,478 | $ | 53,619 | $ | 172,097 | |||||||
-1 | Relates to the sale of a business unit (acquired with the OPI acquisition) during the year ended December 31, 2014. The net loss recognized from the sale of this business unit was $149 and was included under “other income/ (expense)” in the consolidated statements of income included in the company’s annual report on Form 10-K for the year ended December 31, 2014. | ||||||||||||
Intangible Assets | |||||||||||||
Information regarding the Company’s intangible assets is as follows: | |||||||||||||
As of March 31, 2015 | |||||||||||||
Gross | Accumulated | Net Carrying | |||||||||||
Carrying Amount | Amortization | Amount | |||||||||||
Customer relationships | $ | 63,670 | $ | (18,292 | ) | $ | 45,378 | ||||||
Leasehold benefits | 2,952 | (2,074 | ) | 878 | |||||||||
Developed technology | 12,063 | (2,851 | ) | 9,212 | |||||||||
Non-compete agreements | 1,974 | (1,330 | ) | 644 | |||||||||
Trade names and trademarks | 6,221 | (2,248 | ) | 3,973 | |||||||||
$ | 86,880 | $ | (26,795 | ) | $ | 60,085 | |||||||
As of December 31, 2014 | |||||||||||||
Gross | Accumulated | Net Carrying | |||||||||||
Carrying Amount | Amortization | Amount | |||||||||||
Customer relationships | $ | 51,598 | $ | (16,836 | ) | $ | 34,762 | ||||||
Leasehold benefits | 2,927 | (2,004 | ) | 923 | |||||||||
Developed technology | 10,814 | (2,402 | ) | 8,412 | |||||||||
Non-compete agreements | 1,365 | (1,323 | ) | 42 | |||||||||
Trade names and trademarks | 4,990 | (2,150 | ) | 2,840 | |||||||||
$ | 71,694 | $ | (24,715 | ) | $ | 46,979 | |||||||
Amortization expense for the three months ended March 31, 2015 and 2014 was $2,059 and $1,536, respectively. The weighted average life of intangible assets was 8.9 years for customer relationships, 8.0 years for leasehold benefits, 6.5 years for developed technology, 4.9 years for non-compete agreements and 6.8 years for trade names and trademarks excluding indefinite life trade names and trademarks. The Company had $900 of indefinite life trade names and trademarks as of March 31, 2015 and December 31, 2014. | |||||||||||||
2016 | $ | 10,633 | |||||||||||
2017 | $ | 10,629 | |||||||||||
2018 | $ | 10,501 | |||||||||||
2019 | $ | 10,405 | |||||||||||
2020 | $ | 8,395 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Accrued expenses | $ | 27,500 | $ | 24,451 | |||||
Derivative instruments | 1,349 | 2,385 | |||||||
Client liability account | 2,987 | 9,241 | |||||||
Other current liabilities | 7,550 | 4,129 | |||||||
Accrued expenses and other current liabilities | $ | 39,386 | $ | 40,206 | |||||
Summary of Non-current Liabilities | Non-current liabilities consist of the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Derivative instruments | $ | 398 | $ | 576 | |||||
Unrecognized tax benefits | 4,239 | 2,878 | |||||||
Deferred rent | 6,324 | 5,977 | |||||||
Retirement benefits | 1,544 | 1,544 | |||||||
Other non-current liabilities | 1,222 | 1,895 | |||||||
Non-current liabilities | $ | 13,727 | $ | 12,870 | |||||
Summary of Other Income (Expense), Net | Other income (expense), net consists of the following: | ||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Interest and dividend income* | $ | 1,402 | $ | 877 | |||||
Interest expense | (283 | ) | (113 | ) | |||||
Others, net | 59 | 194 | |||||||
Other income, net | $ | 1,178 | $ | 958 | |||||
* | Includes unrealized gain of $42 on investments carried under fair value option. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: | ||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Numerators: | |||||||||
Net income | $ | 9,567 | $ | 11,147 | |||||
Denominators: | |||||||||
Basic weighted average common shares outstanding | 33,236,259 | 32,523,490 | |||||||
Dilutive effect of share based awards | 815,712 | 905,054 | |||||||
Diluted weighted average common shares outstanding | 34,051,971 | 33,428,544 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.29 | $ | 0.34 | |||||
Diluted | $ | 0.28 | $ | 0.33 | |||||
Weighted average common shares considered anti-dilutive in computing diluted earnings per share | 188,044 | 205,888 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Revenues and Cost of Revenues for Company's Operations Management and Analytics and Business Transformation Segments | Revenues and cost of revenues for each of the three months ended March 31, 2015 and 2014 for the Company’s Operations Management and Analytics and Business Transformation segments, respectively, are as follows: | ||||||||||||||||||||||||
Three months ended March 31, 2015 | Three months ended March 31, 2014 | ||||||||||||||||||||||||
Operations | Analytics and | Total | Operations | Analytics and | Total | ||||||||||||||||||||
Management | Business | Management | Business | ||||||||||||||||||||||
Transformation | Transformation | ||||||||||||||||||||||||
Revenues, net | $ | 110,661 | $ | 32,849 | $ | 143,510 | $ | 100,091 | $ | 21,706 | $ | 121,797 | |||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 70,466 | 22,659 | 93,125 | 58,899 | 16,023 | 74,922 | |||||||||||||||||||
Gross profit | $ | 40,195 | $ | 10,190 | $ | 50,385 | $ | 41,192 | $ | 5,683 | $ | 46,875 | |||||||||||||
Operating expenses | 36,917 | 31,388 | |||||||||||||||||||||||
Other income | 2,312 | 125 | |||||||||||||||||||||||
Income tax expense | 6,213 | 4,465 | |||||||||||||||||||||||
Net income | $ | 9,567 | $ | 11,147 | |||||||||||||||||||||
Business_Combinations_Goodwill1
Business Combinations, Goodwill and Intangible Assets (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Summary of Company's Goodwill | The following table sets forth details of the Company’s goodwill balance as of March 31, 2015: | ||||||||||||
Operations | Analytics and | Total | |||||||||||
Management | Business | ||||||||||||
Transformation | |||||||||||||
Balance at January 1, 2014 | $ | 90,622 | $ | 16,785 | $ | 107,407 | |||||||
Goodwill arising from Blue Slate acquisition | — | 4,554 | $ | 4,554 | |||||||||
Goodwill arising from Overland acquisition | 28,667 | — | $ | 28,667 | |||||||||
Currency translation adjustments | (529 | ) | — | (529 | ) | ||||||||
Allocation on sale of a business unit (1) | (500 | ) | — | (500 | ) | ||||||||
Balance at December 31, 2014 | $ | 118,260 | $ | 21,339 | $ | 139,599 | |||||||
Goodwill arising from RPM acquisition | — | 32,280 | 32,280 | ||||||||||
Currency translation adjustments | 218 | — | 218 | ||||||||||
Balance at March 31, 2015 | $ | 118,478 | $ | 53,619 | $ | 172,097 | |||||||
-1 | Relates to the sale of a business unit (acquired with the OPI acquisition) during the year ended December 31, 2014. The net loss recognized from the sale of this business unit was $149 and was included under “other income/ (expense)” in the consolidated statements of income included in the company’s annual report on Form 10-K for the year ended December 31, 2014. | ||||||||||||
Summary of Company's Intangible Assets | Information regarding the Company’s intangible assets is as follows: | ||||||||||||
As of March 31, 2015 | |||||||||||||
Gross | Accumulated | Net Carrying | |||||||||||
Carrying Amount | Amortization | Amount | |||||||||||
Customer relationships | $ | 63,670 | $ | (18,292 | ) | $ | 45,378 | ||||||
Leasehold benefits | 2,952 | (2,074 | ) | 878 | |||||||||
Developed technology | 12,063 | (2,851 | ) | 9,212 | |||||||||
Non-compete agreements | 1,974 | (1,330 | ) | 644 | |||||||||
Trade names and trademarks | 6,221 | (2,248 | ) | 3,973 | |||||||||
$ | 86,880 | $ | (26,795 | ) | $ | 60,085 | |||||||
As of December 31, 2014 | |||||||||||||
Gross | Accumulated | Net Carrying | |||||||||||
Carrying Amount | Amortization | Amount | |||||||||||
Customer relationships | $ | 51,598 | $ | (16,836 | ) | $ | 34,762 | ||||||
Leasehold benefits | 2,927 | (2,004 | ) | 923 | |||||||||
Developed technology | 10,814 | (2,402 | ) | 8,412 | |||||||||
Non-compete agreements | 1,365 | (1,323 | ) | 42 | |||||||||
Trade names and trademarks | 4,990 | (2,150 | ) | 2,840 | |||||||||
$ | 71,694 | $ | (24,715 | ) | $ | 46,979 | |||||||
Estimated Amortization of Intangible Assets | |||||||||||||
2016 | $ | 10,633 | |||||||||||
2017 | $ | 10,629 | |||||||||||
2018 | $ | 10,501 | |||||||||||
2019 | $ | 10,405 | |||||||||||
2020 | $ | 8,395 | |||||||||||
RPM Direct LLC and RPM Data Solutions LLC [Member] | |||||||||||||
Summary of Purchase Price Allocation for Acquisitions | The Company made a preliminary allocation of the purchase price to the net tangible and intangible assets based on their fair values as mentioned below: | ||||||||||||
Amount | |||||||||||||
(In thousands) | |||||||||||||
Net tangible assets | $ | 2,419 | |||||||||||
Identifiable intangible assets: | |||||||||||||
Customer Relationship | 12,063 | ||||||||||||
Trade Names | 1,231 | ||||||||||||
Developed Technology | 1,249 | ||||||||||||
Non-Compete Agreements | 609 | ||||||||||||
Goodwill | 32,280 | ||||||||||||
Total purchase price* | $ | 49,851 | |||||||||||
* | Includes amount of $4,125 deposited in escrow accounts in connection with the acquisition. | ||||||||||||
Overland Solutions Inc [Member] | |||||||||||||
Summary of Purchase Price Allocation for Acquisitions | During the three months ended March 31, 2015, the Company finalized its purchase price allocation for the acquisition, which is as follows: | ||||||||||||
Amount | |||||||||||||
(In thousands) | |||||||||||||
Net tangible assets | $ | 18,873 | |||||||||||
Identifiable intangible assets: | |||||||||||||
Customer relationships | 12,200 | ||||||||||||
Developed Technology | 4,800 | ||||||||||||
Trade Names & Trademarks | 1,400 | ||||||||||||
Goodwill | 28,667 | ||||||||||||
Total purchase price* | $ | 65,940 | |||||||||||
* | Includes amount of $4,550 deposited in escrow accounts in connection with the acquisition. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Assets and Liabilities Measured at Fair Value | The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2015 and December 31, 2014. The table excludes short-term investments, accounts receivable, accounts payable and accrued expenses for which fair values approximate their carrying amounts. | ||||||||||||||||
As of March 31, 2015 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money market and mutual funds* | $ | 103,424 | $ | — | $ | — | $ | 103,424 | |||||||||
Derivative financial instruments | — | 5,864 | — | 5,864 | |||||||||||||
Total | $ | 103,424 | $ | 5,864 | $ | — | $ | 109,288 | |||||||||
Liabilities | |||||||||||||||||
Derivative financial instruments | $ | — | $ | 1,747 | $ | — | $ | 1,747 | |||||||||
Total | $ | — | $ | 1,747 | $ | — | $ | 1,747 | |||||||||
As of December 31, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Money market and mutual funds | $ | 127,347 | $ | — | $ | — | $ | 127,347 | |||||||||
Derivative financial instruments | — | 4,579 | — | 4,579 | |||||||||||||
Total | $ | 127,347 | $ | 4,579 | $ | — | $ | 131,926 | |||||||||
Liabilities | |||||||||||||||||
Derivative financial instruments | — | 2,961 | — | $ | 2,961 | ||||||||||||
Total | $ | — | $ | 2,961 | $ | — | $ | 2,961 | |||||||||
* | Includes investments carried on fair value option under ASC 825 of $4,844. |
Derivatives_and_Hedge_Accounti1
Derivatives and Hedge Accounting (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||
Summary of Fair Value of Foreign Currency Exchange Contracts | The following tables set forth the fair value of the foreign currency exchange contracts and their location on the unaudited consolidated financial statements: | ||||||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Other current assets: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 2,324 | $ | 1,243 | |||||||||||||||||||||||||
Other assets: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 3,437 | $ | 3,193 | |||||||||||||||||||||||||
Accrued expenses and other current liabilities: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 1,320 | $ | 2,385 | |||||||||||||||||||||||||
Other non-current liabilities: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 398 | $ | 576 | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Other current assets: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 103 | $ | 143 | |||||||||||||||||||||||||
Accrued expenses and other current liabilities: | |||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | 29 | $ | — | |||||||||||||||||||||||||
Summary of Effect of Foreign Currency Exchange Contracts on Consolidated Statements of Income | The following tables set forth the effect of foreign currency exchange contracts on the unaudited consolidated statements of income for the three months ended March 31, 2015 and 2014: | ||||||||||||||||||||||||||||
Derivatives in Cash Flow | Amount of Gain/ | Location of Gain/(Loss) | Amount of Gain/ | Location of Gain/(Loss) | Amount of Gain/ | ||||||||||||||||||||||||
Hedging Relationships | (Loss) Recognized in | Reclassified from | (Loss) Reclassified from | Recognized in Income | (Loss) Recognized in | ||||||||||||||||||||||||
AOCI on | AOCI into Income | AOCI into Income | on Derivative | Income on Derivative | |||||||||||||||||||||||||
Derivative | (Effective Portion) | (Effective Portion) | (Ineffective Portion and | (Ineffective Portion and | |||||||||||||||||||||||||
(Effective Portion) | Amount Excluded from | Amount Excluded from | |||||||||||||||||||||||||||
Effectiveness Testing) | Effectiveness Testing) | ||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Foreign exchange contracts | $ | 2,259 | $ | 7,010 | Foreign exchange loss | $ | (309 | ) | $ | (2,254 | ) | Foreign exchange loss | $ | — | $ | — | |||||||||||||
Derivatives not designated as Hedging Instruments | Location of Gain or (Loss) | Amount of Gain/(Loss) | |||||||||||||||||||||||||||
Recognized in Income on | |||||||||||||||||||||||||||||
Derivatives | |||||||||||||||||||||||||||||
Recognized in Income on Derivatives | 2015 | 2014 | |||||||||||||||||||||||||||
Foreign exchange contracts | Foreign exchange loss | $ | 2,096 | $ | 2,714 |
Fixed_Assets_Tables
Fixed Assets (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Fixed Assets | Fixed assets consist of the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Owned Assets: | |||||||||
Network equipment, computers and software | $ | 88,238 | $ | 83,140 | |||||
Buildings | 1,273 | 1,262 | |||||||
Land | 833 | 826 | |||||||
Leasehold improvements | 27,943 | 26,416 | |||||||
Office furniture and equipment | 12,902 | 12,218 | |||||||
Motor vehicles | 535 | 542 | |||||||
Capital work in progress | 2,637 | 3,029 | |||||||
134,361 | 127,433 | ||||||||
Less: Accumulated depreciation and amortization | (87,701 | ) | (82,947 | ) | |||||
$ | 46,660 | $ | 44,486 | ||||||
Assets under capital leases: | |||||||||
Leasehold improvements | $ | 956 | $ | 961 | |||||
Office furniture and equipment | 194 | 219 | |||||||
Motor vehicles | 888 | 848 | |||||||
2,038 | 2,028 | ||||||||
Less: Accumulated depreciation and amortization | (1,231 | ) | (1,145 | ) | |||||
$ | 807 | $ | 883 | ||||||
Fixed assets, net | $ | 47,467 | $ | 45,369 | |||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||
Net Gratuity Cost | Net gratuity cost includes the following components: | ||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Service cost | $ | 423 | $ | 378 | |||||
Interest cost | 142 | 139 | |||||||
Expected return on plan assets | (100 | ) | (43 | ) | |||||
Actuarial loss | 55 | 37 | |||||||
Net gratuity cost | $ | 520 | $ | 511 | |||||
Change in Plan Assets | Plan assets at January 1, 2015 | $ | 4,752 | ||||||
Actual return | 109 | ||||||||
Benefits paid | (197 | ) | |||||||
Effect of exchange rate changes | 41 | ||||||||
Plan assets at March 31, 2015 | $ | 4,705 | |||||||
Contribution to Various Defined Contribution Plans | During the three month periods ended March 31, 2015 and 2014, the Company contributed the following amounts to various defined contribution plans on behalf of its employees in India, the Philippines, Romania, Bulgaria and the Czech Republic: | ||||||||
Three months ended March 31, 2015 | $ | 1,465 | |||||||
Three months ended March 31, 2014 | $ | 1,398 |
Leases_Tables
Leases (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Leases [Abstract] | |||||
Future Minimum Lease Payments under Capital Leases | Future minimum lease payments under these capital leases as of March 31, 2015 are as follows: | ||||
Year ending March 31, | |||||
2016 | $ | 825 | |||
2017 | 291 | ||||
2018 | 132 | ||||
2019 | 52 | ||||
Total minimum lease payments | 1,300 | ||||
Less: amount representing interest | 133 | ||||
Present value of minimum lease payments | 1,167 | ||||
Less: current portion | 743 | ||||
Long term capital lease obligation | $ | 424 | |||
Future Minimum Lease Payments under Non-Cancelable Operating Lease Agreements Expiring After March 31, 2015 | Future minimum lease payments under non-cancelable agreements expiring after March 31, 2015 are set forth below: | ||||
Year ending March 31, | |||||
2016 | $ | 10,768 | |||
2017 | 6,704 | ||||
2018 | 4,743 | ||||
2019 | 2,889 | ||||
2020 | 1,688 | ||||
2021 and thereafter | 334 | ||||
$ | 27,126 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Income Tax Disclosure [Abstract] | |||||
Summary of Activity Related to Gross Unrecognized Tax Benefits | The following table summarizes the activity related to the gross unrecognized tax benefits from January 1, 2015 through March 31, 2015: | ||||
Balance as of January 1, 2015 | $ | 2,761 | |||
Increases related to prior year tax positions | 1,239 | ||||
Decreases related to prior year tax positions | — | ||||
Increases related to current year tax positions | — | ||||
Decreases related to current year tax positions | — | ||||
Effect of exchange rate changes | 15 | ||||
Balance as of March 31, 2015 | $ | 4,015 | |||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Costs Related to Company's Stock-Based Compensation Plan | The following costs related to the Company’s stock-based compensation plan are included in the unaudited consolidated statements of income: | ||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Cost of revenue | $ | 1,103 | $ | 1,013 | |||||||||||||
General and administrative expenses | 1,483 | 1,514 | |||||||||||||||
Selling and marketing expenses | 1,669 | 1,649 | |||||||||||||||
Total | $ | 4,255 | $ | 4,176 | |||||||||||||
Stock Based Compensation Stock Option Activity | Stock option activity under the Company’s stock plans is shown below: | ||||||||||||||||
Number of | Weighted- | Aggregate | Weighted- | ||||||||||||||
Options | Average Exercise | Intrinsic Value | Average | ||||||||||||||
Price | Remaining | ||||||||||||||||
Contractual Life | |||||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2014 | 1,433,179 | $ | 16.23 | $ | 17,889 | 4.47 | |||||||||||
Granted | — | — | — | — | |||||||||||||
Exercised | (122,202 | ) | 15.42 | ||||||||||||||
Forfeited | (2,730 | ) | 24.77 | ||||||||||||||
Outstanding at March 31, 2015 | 1,308,247 | $ | 16.29 | $ | 27,361 | 4.17 | |||||||||||
Vested and exercisable at March 31, 2015 | 1,216,856 | $ | 15.67 | $ | 26,195 | 4.01 | |||||||||||
Available for grant at March 31, 2015 | 621,225 | ||||||||||||||||
Restricted Stock Units [Member] | |||||||||||||||||
Restricted Stock Activity Under Company's Stock Plans | Restricted stock and restricted stock unit activity under the Company’s stock plans is shown below: | ||||||||||||||||
Restricted Stock | Restricted Stock Units | ||||||||||||||||
Number | Weighted-Average | Number | Weighted-Average | ||||||||||||||
Intrinsic Value | Intrinsic Value | ||||||||||||||||
Outstanding at December 31, 2014* | 46,950 | $ | 29.29 | 1,189,691 | $ | 26.54 | |||||||||||
Granted | 122,131 | 35.91 | 448,228 | 34.98 | |||||||||||||
Vested | — | — | (288,041 | ) | 25.01 | ||||||||||||
Forfeited | — | — | (29,133 | ) | 26.46 | ||||||||||||
Outstanding at March 31, 2015* | 169,081 | $ | 34.07 | 1,320,745 | $ | 29.74 | |||||||||||
* | Excludes 136,016 and 128,000 vested restricted stock units as of March 31, 2015 and December 31, 2014, respectively, for which the underlying common stock is yet to be issued. | ||||||||||||||||
Performance Based Stock Awards [Member] | |||||||||||||||||
Restricted Stock Activity Under Company's Stock Plans | Performance restricted stock unit (the “PRSU’s”) activity under the Company’s stock plans is shown below: | ||||||||||||||||
Revenue Based PRSU’s | Market Condition Based PRSU’s | ||||||||||||||||
Number | Weighted Avg | Number | Weighted Avg | ||||||||||||||
Intrinsic Value | Intrinsic Value | ||||||||||||||||
Outstanding at Dec 31, 2014 | 47,725 | $ | 25.63 | 47,725 | $ | 33.6 | |||||||||||
Granted | 62,788 | 34.75 | 62,787 | 54.63 | |||||||||||||
Vested | — | — | — | — | |||||||||||||
Forfeited | (1,250 | ) | 25.63 | (1,250 | ) | 33.6 | |||||||||||
Outstanding at March 31, 2015 | 109,263 | $ | 30.87 | 109,262 | $ | 45.68 | |||||||||||
Geographical_Information_Table
Geographical Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Text Block [Abstract] | |||||||||
Revenues Based on Geographical Information | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Revenues, net | |||||||||
United States | $ | 111,865 | $ | 90,413 | |||||
United Kingdom | 25,835 | 23,421 | |||||||
Rest of World | 5,810 | 7,963 | |||||||
$ | 143,510 | $ | 121,797 | ||||||
Fixed Assets, Net Based on Geographical Information | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Revenues, net | |||||||||
United States | $ | 111,865 | $ | 90,413 | |||||
United Kingdom | 25,835 | 23,421 | |||||||
Rest of World | 5,810 | 7,963 | |||||||
$ | 143,510 | $ | 121,797 | ||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Fixed assets, net | |||||||||
India | $ | 26,625 | $ | 24,186 | |||||
United States | 9,531 | 8,293 | |||||||
Philippines | 10,824 | 12,391 | |||||||
Rest of World | 487 | 499 | |||||||
$ | 47,467 | $ | 45,369 | ||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Accounting Policies [Line Items] | ||
Reduction in revenues related to reimbursement of transition related costs | $0 | $2,471,000 |
Investments maturity period | Investments with original maturities greater than ninety days but less than twelve months are classified as short-term investments. Investments with maturities greater than twelve months from the balance sheet date are classified as long-term investments. | |
Service Life [Member] | ||
Accounting Policies [Line Items] | ||
Reduction in depreciation expense due to effect of change in estimated useful life of assets | 468,000 | |
Increase in net income due to effect of change in estimated useful life of assets | $281,000 | |
Increase in basic and diluted earnings per share due to effect of change in estimated useful life of assets | $0.01 | |
Effect of change in accounting estimate description | The effect of change in estimated useful life of assets reduced depreciation expense by $468, increased net income by [$281] and increased basic and diluted earnings per share by $0.01, during the three months ended March 31, 2015. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Summary of Accrued Expenses and Other Current Liabilities (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Accrued expenses | $27,500 | $24,451 |
Derivative instruments | 1,349 | 2,385 |
Client liability account | 2,987 | 9,241 |
Other current liabilities | 7,550 | 4,129 |
Accrued expenses and other current liabilities | $39,386 | $40,206 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Summary of Non-current Liabilities (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Summary of non-current liabilities | ||
Derivative instruments | $398 | $576 |
Unrecognized tax benefits | 4,239 | 2,878 |
Deferred rent | 6,324 | 5,977 |
Retirement benefits | 1,544 | 1,544 |
Other non-current liabilities | 1,222 | 1,895 |
Non-current liabilities | $13,727 | $12,870 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Summary of Other Income (Expense), Net (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Other Nonoperating Income (Expense) [Abstract] | ||
Interest and dividend income | $1,402 | $877 |
Interest expense | -283 | -113 |
Others, net | 59 | 194 |
Other income, net | $1,178 | $958 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Summary of Other Income (Expense), Net (Parenthetical) (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Other Nonoperating Income (Expense) [Abstract] | |
Unrealized gain on investments | $42 |
Earnings_Per_Share_Computation
Earnings Per Share - Computation of Basic and Diluted Earnings per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Numerators: | ||
Net income | $9,567 | $11,147 |
Denominators: | ||
Basic weighted average common shares outstanding | 33,236,259 | 32,523,490 |
Dilutive effect of share based awards | 815,712 | 905,054 |
Diluted weighted average common shares outstanding | 34,051,971 | 33,428,544 |
Earnings per share: | ||
Basic | $0.29 | $0.34 |
Diluted | $0.28 | $0.33 |
Weighted average common shares considered anti-dilutive in computing diluted earnings per share | 188,044 | 205,888 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment_Information_Revenues_a
Segment Information - Revenues and Cost of Revenues for Company's Operations Management and Analytics and Business Transformation Segments (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues and cost of revenues for Company's operations management and analytics and business transformation segments [Line Items] | ||
Revenues, net | $143,510 | $121,797 |
Cost of revenues (exclusive of depreciation and amortization) | 93,125 | 74,922 |
Gross profit | 50,385 | 46,875 |
Operating expenses | 36,917 | 31,388 |
Other income | 2,312 | 125 |
Income tax expense | 6,213 | 4,465 |
Net income | 9,567 | 11,147 |
Operations Management [Member] | ||
Revenues and cost of revenues for Company's operations management and analytics and business transformation segments [Line Items] | ||
Revenues, net | 110,661 | 100,091 |
Cost of revenues (exclusive of depreciation and amortization) | 70,466 | 58,899 |
Gross profit | 40,195 | 41,192 |
Analytics and Business Transformation [Member] | ||
Revenues and cost of revenues for Company's operations management and analytics and business transformation segments [Line Items] | ||
Revenues, net | 32,849 | 21,706 |
Cost of revenues (exclusive of depreciation and amortization) | 22,659 | 16,023 |
Gross profit | $10,190 | $5,683 |
Business_Combinations_Goodwill2
Business Combinations, Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Oct. 24, 2014 | Mar. 20, 2015 | Dec. 31, 2014 |
Customer | |||||
Business Acquisition [Line Items] | |||||
Revenues | $143,510 | $121,797 | |||
Amortization expense | 2,059 | 1,536 | |||
Indefinite lived trade names and trademarks | 900 | 900 | |||
United States [Member] | |||||
Business Acquisition [Line Items] | |||||
Revenues | 111,865 | 90,413 | |||
Overland Solutions Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, Agreement date | 24-Oct-14 | ||||
Business acquisition, cash consideration | 65,940 | ||||
Working capital adjustments included in business acquisitions cash consideration | 12,940 | ||||
Revenues | 16,873 | ||||
RPM Direct LLC and RPM Data Solutions LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, Agreement date | 20-Mar-15 | ||||
Business acquisition, cash consideration | 47,000 | ||||
Revenues | 1,191 | ||||
Fair value of earn-out payment | 2,844 | ||||
Business acquisition, Number of restricted shares of common stock issued | 122,131 | ||||
Business acquisition, aggregate fair value amount of restricted shares of common stock | 4,150 | ||||
Aggregate fair value of restricted stock units granted | 3,850 | ||||
Restricted stock units granted | 113,302 | ||||
Number of consumers | 250,000,000 | ||||
Acquisition related costs | 303 | ||||
RPM Direct LLC and RPM Data Solutions LLC [Member] | United States [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of consumers | 120,000,000 | ||||
RPM Direct LLC and RPM Data Solutions LLC [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Earn out consideration payable | $23,000 | ||||
Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Weighted average life of intangible assets | 8 years 10 months 24 days | ||||
Customer Relationships [Member] | Overland Solutions Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful life | 12 years | ||||
Customer Relationships [Member] | RPM Direct LLC and RPM Data Solutions LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful life | 5 years 8 months 12 days | ||||
Leasehold Benefits [Member] | |||||
Business Acquisition [Line Items] | |||||
Weighted average life of intangible assets | 8 years | ||||
Developed Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Weighted average life of intangible assets | 6 years 6 months | ||||
Developed Technology [Member] | Overland Solutions Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful life | 5 years | ||||
Developed Technology [Member] | RPM Direct LLC and RPM Data Solutions LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful life | 5 years | ||||
Non-compete Agreements [Member] | |||||
Business Acquisition [Line Items] | |||||
Weighted average life of intangible assets | 4 years 10 months 24 days | ||||
Non-compete Agreements [Member] | RPM Direct LLC and RPM Data Solutions LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful life | 5 years | ||||
Trade Names and Trademarks [Member] | |||||
Business Acquisition [Line Items] | |||||
Weighted average life of intangible assets | 6 years 9 months 18 days | ||||
Trade Names and Trademarks [Member] | Overland Solutions Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful life | 10 years | ||||
Trade Names [Member] | RPM Direct LLC and RPM Data Solutions LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful life | 5 years |
Business_Combinations_Goodwill3
Business Combinations, Goodwill and Intangible Assets - Summary of Purchase Price Allocation for Acquisitions (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 20, 2015 |
In Thousands, unless otherwise specified | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Goodwill | $172,097 | $139,599 | $107,407 | |
RPM Direct LLC and RPM Data Solutions LLC [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Net tangible assets | 2,419 | |||
Goodwill | 32,280 | |||
Total purchase price | 49,851 | |||
RPM Direct LLC and RPM Data Solutions LLC [Member] | Customer Relationships [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Identifiable intangible assets | 12,063 | |||
RPM Direct LLC and RPM Data Solutions LLC [Member] | Trade Names [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Identifiable intangible assets | 1,231 | |||
RPM Direct LLC and RPM Data Solutions LLC [Member] | Developed Technology [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Identifiable intangible assets | 1,249 | |||
RPM Direct LLC and RPM Data Solutions LLC [Member] | Non-compete Agreements [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Identifiable intangible assets | 609 | |||
Overland Solutions Inc [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Net tangible assets | 18,873 | |||
Goodwill | 28,667 | |||
Total purchase price | 65,940 | |||
Overland Solutions Inc [Member] | Customer Relationships [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Identifiable intangible assets | 12,200 | |||
Overland Solutions Inc [Member] | Developed Technology [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Identifiable intangible assets | 4,800 | |||
Overland Solutions Inc [Member] | Trade Names and Trademarks [Member] | ||||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||||
Identifiable intangible assets | $1,400 |
Business_Combinations_Goodwill4
Business Combinations, Goodwill and Intangible Assets - Summary of Purchase Price Allocation for Acquisitions (Parenthetical) (Detail) (USD $) | Mar. 20, 2015 | Mar. 31, 2015 |
In Thousands, unless otherwise specified | ||
RPM Direct LLC and RPM Data Solutions LLC [Member] | ||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||
Deposit in escrow accounts in connection with acquisition | $4,125 | |
Overland Solutions Inc [Member] | ||
Schedule Of Business Combination Purchase Price Allocation [Line Items] | ||
Deposit in escrow accounts in connection with acquisition | $4,550 |
Business_Combinations_Goodwill5
Business Combinations, Goodwill and Intangible Assets - Summary of Company's Goodwill (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 20, 2015 | Dec. 31, 2013 |
Goodwill [Line Items] | ||||
Beginning Balance | $139,599 | $107,407 | ||
Currency translation adjustments | 218 | -529 | ||
Allocation on sale of a business unit | -500 | |||
Ending Balance | 172,097 | 139,599 | ||
Blue Slate Solutions [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill arising from acquisition | 4,554 | |||
Overland Solutions Inc [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill arising from acquisition | 28,667 | |||
Ending Balance | 28,667 | |||
RPM Direct LLC and RPM Data Solutions LLC [Member] | ||||
Goodwill [Line Items] | ||||
Beginning Balance | 32,280 | |||
Goodwill arising from acquisition | 32,280 | |||
Ending Balance | 32,280 | |||
Operations Management [Member] | ||||
Goodwill [Line Items] | ||||
Beginning Balance | 118,260 | 90,622 | ||
Currency translation adjustments | 218 | -529 | ||
Allocation on sale of a business unit | -500 | |||
Ending Balance | 118,478 | 118,260 | ||
Operations Management [Member] | Overland Solutions Inc [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill arising from acquisition | 28,667 | |||
Analytics and Business Transformation [Member] | ||||
Goodwill [Line Items] | ||||
Beginning Balance | 16,785 | |||
Ending Balance | 53,619 | 21,339 | 16,785 | |
Analytics and Business Transformation [Member] | Blue Slate Solutions [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill arising from acquisition | 4,554 | |||
Analytics and Business Transformation [Member] | RPM Direct LLC and RPM Data Solutions LLC [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill arising from acquisition | $32,280 |
Business_Combinations_Goodwill6
Business Combinations, Goodwill and Intangible Assets - Summary of Company's Goodwill (Parenthetical) (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Net loss recognized from the sale of business unit | $149 |
Business_Combinations_Goodwill7
Business Combinations, Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $86,880 | $71,694 |
Accumulated Amortization | -26,795 | -24,715 |
Net Carrying Amount | 60,085 | 46,979 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 63,670 | 51,598 |
Accumulated Amortization | -18,292 | -16,836 |
Net Carrying Amount | 45,378 | 34,762 |
Leasehold Benefits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,952 | 2,927 |
Accumulated Amortization | -2,074 | -2,004 |
Net Carrying Amount | 878 | 923 |
Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12,063 | 10,814 |
Accumulated Amortization | -2,851 | -2,402 |
Net Carrying Amount | 9,212 | 8,412 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,974 | 1,365 |
Accumulated Amortization | -1,330 | -1,323 |
Net Carrying Amount | 644 | 42 |
Trade Names and Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,221 | 4,990 |
Accumulated Amortization | -2,248 | -2,150 |
Net Carrying Amount | $3,973 | $2,840 |
Business_Combinations_Goodwill8
Business Combinations, Goodwill and Intangible Assets - Estimated Amortization of Intangible Assets (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2016 | $10,633 |
2017 | 10,629 |
2018 | 10,501 |
2019 | 10,405 |
2020 | $8,395 |
Fair_Value_Measurements_Assets
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Detail) (Fair Value, Measurements, Recurring [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Money market and mutual funds | $103,424 | $127,347 |
Derivative financial instruments | 5,864 | 4,579 |
Total | 109,288 | 131,926 |
Liabilities | ||
Derivative financial instruments | 1,747 | 2,961 |
Total | 1,747 | 2,961 |
Level 1 [Member] | ||
Assets | ||
Money market and mutual funds | 103,424 | 127,347 |
Total | 103,424 | 127,347 |
Level 2 [Member] | ||
Assets | ||
Derivative financial instruments | 5,864 | 4,579 |
Total | 5,864 | 4,579 |
Liabilities | ||
Derivative financial instruments | 1,747 | 2,961 |
Total | $1,747 | $2,961 |
Fair_Value_Measurements_Assets1
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Parenthetical) (Detail) (Fair Value, Measurements, Recurring [Member], USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Fair Value, Measurements, Recurring [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of investments | $4,844 |
Derivatives_and_Hedge_Accounti2
Derivatives and Hedge Accounting - Additional Information (Detail) | 3 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | Foreign Currency Exchange Contracts [Member] | Foreign Currency Exchange Contracts [Member] | Foreign Currency Exchange Contracts [Member] | Foreign Currency Exchange Contracts [Member] | |
USD ($) | GBP (£) | USD ($) | GBP (£) | |||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Foreign exchange contracts outstanding | $282,577,000 | £ 13,256,000 | $276,018,000 | £ 10,889,000 | ||
Net derivative gains which could be reclassified into earnings within the next 12 months | 1,004,000 | |||||
Maximum outstanding term of cash flow hedges | 45 months | |||||
Gain/(Losses) that reclassified from AOCI into earning for discontinued hedging transactions | $0 | $0 |
Derivatives_and_Hedge_Accounti3
Derivatives and Hedge Accounting - Summary of Fair Value of Foreign Currency Exchange Contracts (Detail) (Foreign Currency Exchange Contracts [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Derivatives Designated as Hedging Instruments [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, Asset | $2,324 | $1,243 |
Derivatives Designated as Hedging Instruments [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, Asset | 3,437 | 3,193 |
Derivatives Designated as Hedging Instruments [Member] | Accrued Expenses and Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, Liability | 1,320 | 2,385 |
Derivatives Designated as Hedging Instruments [Member] | Other Non Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, Liability | 398 | 576 |
Derivatives not Designated as Hedging Instruments [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, Asset | 103 | 143 |
Derivatives not Designated as Hedging Instruments [Member] | Accrued Expenses and Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts, Liability | $29 |
Derivatives_and_Hedge_Accounti4
Derivatives and Hedge Accounting - Summary of Effect of Foreign Currency Exchange Contracts on Consolidated Statements of Income (Detail) (Foreign Currency Exchange Contracts [Member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivatives Designated as Hedging Instruments [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | $2,259 | $7,010 |
Foreign Exchange Income/Loss [Member] | Derivatives not Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in Income on Derivatives | 2,096 | 2,714 |
Foreign Exchange Income/Loss [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/ (Loss) Reclassified from AOCI into Income (Effective Portion) | -309 | -2,254 |
Amount of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | $0 | $0 |
Fixed_Assets_Schedule_of_Fixed
Fixed Assets - Schedule of Fixed Assets (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Owned Assets: | ||
Owned Assets, Gross | $134,361 | $127,433 |
Less: Accumulated depreciation and amortization | -87,701 | -82,947 |
Owned Assets, net | 46,660 | 44,486 |
Assets under capital leases: | ||
Capital leased assets, Gross | 2,038 | 2,028 |
Less: Accumulated depreciation and amortization | -1,231 | -1,145 |
Assets under capital leases, net | 807 | 883 |
Fixed assets, net | 47,467 | 45,369 |
Network Equipment, Computers and Software [Member] | ||
Owned Assets: | ||
Owned Assets, Gross | 88,238 | 83,140 |
Buildings [Member] | ||
Owned Assets: | ||
Owned Assets, Gross | 1,273 | 1,262 |
Land [Member] | ||
Owned Assets: | ||
Owned Assets, Gross | 833 | 826 |
Leasehold Improvements [Member] | ||
Owned Assets: | ||
Owned Assets, Gross | 27,943 | 26,416 |
Assets under capital leases: | ||
Capital leased assets, Gross | 956 | 961 |
Office Furniture and Equipment [Member] | ||
Owned Assets: | ||
Owned Assets, Gross | 12,902 | 12,218 |
Assets under capital leases: | ||
Capital leased assets, Gross | 194 | 219 |
Motor Vehicles [Member] | ||
Owned Assets: | ||
Owned Assets, Gross | 535 | 542 |
Assets under capital leases: | ||
Capital leased assets, Gross | 888 | 848 |
Capital Work in Progress [Member] | ||
Owned Assets: | ||
Owned Assets, Gross | $2,637 | $3,029 |
Fixed_Assets_Additional_Inform
Fixed Assets - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $4,994 | $4,820 |
Capital_Structure_Additional_I
Capital Structure - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
ClassOfCommonStock | ||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Class of common stock outstanding | 1 | |
Acquisition of restricted stock from employees in connection with withholding tax payments | 12,866 | 18,256 |
Withholding tax payments related to the vesting of restricted stock for total consideration | $397 | $459 |
Weighted average purchase price per share prior to the vesting date | $30.83 | $25.14 |
Borrowings_Additional_Informat
Borrowings - Additional Information (Detail) (Revolving Credit Facility [Member], USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Feb. 23, 2015 | Oct. 24, 2014 |
Debt Instrument [Line Items] | |||
Revolving credit facility | $80,000 | $50,000 | |
Option to increase additional credit facility | 50,000 | 50,000 | |
Credit facility expiration date | 24-Oct-19 | ||
Debt issuance costs | 50 | ||
Additional borrowing during period | $30,000 | ||
Interest rate during the period | 1.56% | ||
Debt instrument, interest rate terms | Borrowings under the Credit Facility bear interest at a rate equal to the specified prime rate (alternate base rate) or adjusted LIBO rate, plus, an applicable margin. The applicable margin is tied to the Companybs leverage ratio and ranges from 0.25% to 0.75% per annum with respect to loans (bABR Loansb) pegged to the specified prime rate, and 1.25% to 1.75% per annum on loans (bEurodollar Loansb) pegged to the adjusted LIBO rate (such applicable margin, the bApplicable Rateb). The revolving credit commitments under the Credit Agreement are subject to a commitment fee. The commitment fee is also tied to the Companybs leverage ratio, and ranges from 0.20% to 0.30% per annum on the average daily amount by which the aggregate revolving commitments exceed the sum of outstanding revolving loans and letter of credit obligations. The Credit Facility carried an interest rate of 1.56% per annum during the three months ended March 31, 2015. | ||
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage range | 0.20% | ||
Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage range | 0.30% | ||
ABR Loans [Member] | |||
Debt Instrument [Line Items] | |||
Applicable interest rate on loans pegged to specified prime rate, minimum | 0.25% | ||
Applicable interest rate on loans pegged to specified prime rate, maximum | 0.75% | ||
Eurodollar [Member] | |||
Debt Instrument [Line Items] | |||
Applicable interest rate on loans pegged to LIBO rate (Applicable Rate), minimum | 1.25% | ||
Applicable interest rate on loans pegged to LIBO rate (Applicable Rate), maximum | 1.75% |
Employee_Benefit_Plans_Net_Gra
Employee Benefit Plans - Net Gratuity Cost (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||
Service cost | $423 | $378 |
Interest cost | 142 | 139 |
Expected return on plan assets | -100 | -43 |
Actuarial loss | 55 | 37 |
Net gratuity cost | $520 | $511 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||||
Percentage of actual return on the gratuity plans | 9.00% | 9.00% | ||
Percentage of discretionary contributions towards 401(k) Plan, Maximum | 3.00% | 3.00% | ||
Company's contribution to the 401(k) Plan | $768 | $503 |
Employee_Benefit_Plans_Change_
Employee Benefit Plans - Change in Plan Assets (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Compensation and Retirement Disclosure [Abstract] | |
Plan assets at January 1, 2015 | $4,752 |
Actual return | 109 |
Benefits paid | -197 |
Effect of exchange rate changes | 41 |
Plan assets at March 31, 2015 | $4,705 |
Employee_Benefit_Plans_Contrib
Employee Benefit Plans - Contribution to Various Defined Contribution Plans (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||
Contribution to various defined contribution plans | $1,465 | $1,398 |
Leases_Future_Minimum_Lease_Pa
Leases - Future Minimum Lease Payments under Capital Leases (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Leases [Abstract] | ||
2016 | $825 | |
2017 | 291 | |
2018 | 132 | |
2019 | 52 | |
Total minimum lease payments | 1,300 | |
Less: amount representing interest | 133 | |
Present value of minimum lease payments | 1,167 | |
Less: current portion | 743 | 803 |
Long term capital lease obligation | 424 | 560 |
Present value of minimum lease payments | $1,167 |
Leases_Future_Minimum_Lease_Pa1
Leases - Future Minimum Lease Payments under Non-Cancelable Operating Lease Agreements Expiring After March 31, 2015 (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
2016 | $10,768 |
2017 | 6,704 |
2018 | 4,743 |
2019 | 2,889 |
2020 | 1,688 |
2021 and thereafter | 334 |
Total operating lease payments | $27,126 |
Leases_Additional_Information_
Leases - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Leases [Abstract] | |||
Rent expense under both cancelable and non-cancelable operating leases | $4,985 | $4,481 | |
Deferred rent | $6,921 | $6,544 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | |||
Effective tax rates | 39.40% | 28.60% | |
Income tax expense | $6,213 | $4,465 | |
Increase in income tax expense | 1,800 | ||
Increases in unrecognized tax benefit related to taxability of income by certain foreign income | 1,285 | ||
Unrecognized tax benefits | 4,015 | 2,761 | |
Recognized interest and penalties | 99 | 55 | |
Accrued interest on unrecognized tax benefits | $1,224 | $1,117 |
Income_Taxes_Summary_of_Activi
Income Taxes - Summary of Activity Related to Gross Unrecognized Tax Benefits (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Income Tax Disclosure [Abstract] | |
Balance as of January 1, 2015 | $2,761 |
Increases related to prior year tax positions | 1,239 |
Decreases related to prior year tax positions | 0 |
Increases related to current year tax positions | 0 |
Decreases related to current year tax positions | 0 |
Effect of exchange rate changes | 15 |
Balance as of March 31, 2015 | $4,015 |
StockBased_Compensation_Costs_
Stock-Based Compensation - Costs Related to Company's Stock-Based Compensation Plan (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | $4,255 | $4,176 |
Cost of Revenue [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | 1,103 | 1,013 |
General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | 1,483 | 1,514 |
Selling and Marketing Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expenses | $1,669 | $1,649 |
StockBased_Compensation_Stock_
Stock-Based Compensation - Stock Based Compensation Stock Option Activity (Detail) (Stock Option [Member], USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Outstanding, Beginning Balance | 1,433,179 | |
Number of Options, Granted | 0 | |
Number of Options, Exercised | -122,202 | |
Number of Options, Forfeited | -2,730 | |
Number of Options, Outstanding, Ending Balance | 1,308,247 | 1,433,179 |
Number of Options, Vested and exercisable at March 31, 2015 | 1,216,856 | |
Number of Options, Available for grant at March 31, 2015 | 621,225 | |
Weighted-Average Exercise Price, Outstanding, Beginning Balance | $16.23 | |
Weighted-Average Exercise Price, Granted | $0 | |
Weighted-Average Exercise Price, Exercised | $15.42 | |
Weighted-Average Exercise Price, Forfeited | $24.77 | |
Weighted-Average Exercise Price, Outstanding, Ending Balance | $16.29 | $16.23 |
Weighted Average Exercise Price, Vested and exercisable | $15.67 | |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $17,889 | |
Aggregate Intrinsic Value, Outstanding, Ending Balance | 27,361 | 17,889 |
Aggregate Intrinsic Value, Vested and exercisable at March 31, 2015 | $26,195 | |
Weighted-Average Remaining Contractual Life (Years), Outstanding | 4 years 2 months 1 day | 4 years 5 months 19 days |
Weighted-Average Remaining Contractual Life (Years), Vested and exercisable at March 31, 2015 | 4 years 4 days |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost for unvested options | $577 | |
Expected weighted average period | 9 months 18 days | |
Weighted-average fair value of options granted | $9.77 | |
Total grant date fair value of options vested | 1,126 | 1,192 |
Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost for unvested Stock Units | 40,382 | |
Expected expensed over a weighted average period | 3 years 2 months 1 day | |
Performance Based Stock Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost for unvested Stock Units | $7,283 | |
Expected expensed over a weighted average period | 2 years 6 months 4 days |
StockBased_Compensation_Restri
Stock-Based Compensation - Restricted Stock Activity Under Company's Stock Plans (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number, Outstanding, Beginning Balance | 1,189,691 |
Number, Granted | 448,228 |
Number, Vested | -288,041 |
Number, Forfeited | -29,133 |
Number, Outstanding, Ending Balance | 1,320,745 |
Weighted-Average Intrinsic Value, Outstanding, Beginning Balance | $26.54 |
Weighted-Average Intrinsic Value, Granted | $34.98 |
Weighted-Average Intrinsic Value, Vested | $25.01 |
Weighted-Average Intrinsic Value, Forfeited | $26.46 |
Weighted-Average Intrinsic Value, Outstanding, Ending Balance | $29.74 |
Revenue Based Performance Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number, Outstanding, Beginning Balance | 47,725 |
Number, Granted | 62,788 |
Number, Forfeited | -1,250 |
Number, Outstanding, Ending Balance | 109,263 |
Weighted-Average Intrinsic Value, Outstanding, Beginning Balance | $25.63 |
Weighted-Average Intrinsic Value, Granted | $34.75 |
Weighted-Average Intrinsic Value, Forfeited | $25.63 |
Weighted-Average Intrinsic Value, Outstanding, Ending Balance | $30.87 |
Market Condition Based Performance Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number, Outstanding, Beginning Balance | 47,725 |
Number, Granted | 62,787 |
Number, Forfeited | -1,250 |
Number, Outstanding, Ending Balance | 109,262 |
Weighted-Average Intrinsic Value, Outstanding, Beginning Balance | $33.60 |
Weighted-Average Intrinsic Value, Granted | $54.63 |
Weighted-Average Intrinsic Value, Forfeited | $33.60 |
Weighted-Average Intrinsic Value, Outstanding, Ending Balance | $45.68 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number, Outstanding, Beginning Balance | 46,950 |
Number, Granted | 122,131 |
Number, Outstanding, Ending Balance | 169,081 |
Weighted-Average Intrinsic Value, Outstanding, Beginning Balance | $29.29 |
Weighted-Average Intrinsic Value, Granted | $35.91 |
Weighted-Average Intrinsic Value, Outstanding, Ending Balance | $34.07 |
StockBased_Compensation_Restri1
Stock-Based Compensation - Restricted Stock Activity Under Company's Stock Plans (Parenthetical) (Detail) (Restricted Stock Units [Member]) | Mar. 31, 2015 | Dec. 31, 2014 |
Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units vested for which underlying common stock to be issued | 136,016 | 128,000 |
Geographical_Information_Reven
Geographical Information - Revenues Based on Geographical Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues, net | ||
Revenues, net | $143,510 | $121,797 |
United States [Member] | ||
Revenues, net | ||
Revenues, net | 111,865 | 90,413 |
United Kingdom [Member] | ||
Revenues, net | ||
Revenues, net | 25,835 | 23,421 |
Rest of World [Member] | ||
Revenues, net | ||
Revenues, net | $5,810 | $7,963 |
Geographical_Information_Fixed
Geographical Information - Fixed Assets, Net Based on Geographical Information (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fixed assets, net | ||
Total Fixed assets | $47,467 | $45,369 |
India [Member] | ||
Fixed assets, net | ||
Total Fixed assets | 26,625 | 24,186 |
United States [Member] | ||
Fixed assets, net | ||
Total Fixed assets | 9,531 | 8,293 |
Philippines [Member] | ||
Fixed assets, net | ||
Total Fixed assets | 10,824 | 12,391 |
Rest of World [Member] | ||
Fixed assets, net | ||
Total Fixed assets | $487 | $499 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase commitments, net of advances | $7,937 | |
Export-Oriented units established percentage | 100.00% | |
Transfer pricing issues starting period | 2003 | |
Transfer pricing issues ending period | 2011 | |
Permanent establishment issues starting period | 2003 | |
Permanent establishment issues ending period | 2011 | |
Aggregate disputed amount | 20,208 | 22,866 |
Deposited or Bank guarantees provided | 15,425 | 14,666 |
Amounts paid as deposits in respect of contingencies | 13,305 | 12,564 |
Bank guarantees issued | $2,120 | $2,102 |