| Business Combination, Goodwill and Intangible Assets | 9 Months Ended |
| Sep. 30, 2022 |
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| Business Combination | Business Combinations, Goodwill and Intangible Assets Clairvoyant AI Inc. On December 16, 2021, the Company, through its wholly owned subsidiary ExlService.com, LLC (“Buyer”), completed the acquisition of Clairvoyant, a Delaware corporation, pursuant to an equity securities purchase agreement dated December 16, 2021 (the “Purchase Agreement”). The Company purchased 100% of the issued and outstanding equity securities in Clairvoyant. Clairvoyant is a global technology consulting and services company that helps organizations in their business transformation by maximizing the value of data through actionable insights. It provides data engineering, analytics, machine learning, product engineering, and cloud-based solutions. The acquisition strengthens the Company’s capabilities by adding additional expertise in data engineering and cloud enablement, further supporting its clients in insurance, healthcare, banking and financial services, and retail. The aggregate purchase consideration payable was $90,325, including cash and cash equivalents acquired, debt, other post-closing adjustments and contingent consideration. The base purchase consideration payable at closing of the acquisition (the “Closing”) was $80,080, excluding cash and cash equivalents acquired, debt and estimated other post-closing adjustments. As of September 30, 2022 and December 31, 2021, of the total purchase consideration, the Company has paid $78,984 and $76,831, respectively, net of cash and cash equivalents acquired. The Purchase Agreement also allows sellers the ability to earn up to $20,000 of contingent consideration, based on the achievement of certain performance goals by Clairvoyant during the 2022 and 2023 calendar years. The contingent consideration had an estimated fair value of $10,000 and $9,000, as of September 30, 2022 and December 31, 2021, respectively, and has been presented as contingent consideration under “Accrued expenses and other current liabilities” and “Other non-current liabilities,” as applicable, in the consolidated balance sheets. Changes in the fair value of contingent consideration were recognized in the unaudited consolidated statements of income and presented as a part of “Other income, net.” A portion of the purchase consideration otherwise payable was placed into escrow as security for the post-closing working capital adjustments and the indemnification obligations under the Purchase Agreement. To finance the acquisition at the Closing, the Company utilized its revolving Credit Facility in the amount of $75,000 and paid the balance with available cash on hand. The Company accounted for the business combination using the acquisition method of accounting. Pursuant to the Company’s business combinations accounting policy, the aggregate purchase consideration for Clairvoyant was allocated to identifiable net tangible and intangible assets based upon their fair values. The excess of the estimated purchase consideration over fair value of identifiable net tangible and intangible assets was recorded as goodwill. In order to allocate the consideration transferred for Clairvoyant, the fair values of all identifiable assets and liabilities must be established. For accounting and financial reporting purposes, fair value is defined under ASC No. 820, Fair Value Measurement and Disclosure , as the price that would be received upon sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. Use of different estimates and judgments could yield different results. The tables below presents the fair value of the consideration exchanged and the allocation of purchase consideration to the major classes of assets and liabilities of Clairvoyant as of December 16, 2021: Assets: Cash and cash equivalents $ 5,598 Accounts receivable, net 8,709 Other current assets 360 Property and equipment, net 398 Intangible assets, net Customer relationships 31,600 Developed technology 2,070 Trade names and trademarks 300 Non-compete agreements 300 Other assets 217 Total assets $ 49,552 Liabilities: Accounts payable $ (1,199) Accrued expenses and other current liabilities (4,873) Deferred tax liabilities (9,383) Other non-current liabilities (1,226) Total liabilities (16,681) Net assets acquired 32,871 Goodwill 57,454 Total purchase consideration* $ 90,325 * Includes contingent consideration of $9,000 recognized at fair value as of the date of acquisition . During the three and nine months ended September 30, 2022, the Company recognized measurement period adjustments, which led to increase in goodwill in an amount of $nil and $2,229, respectively. These adjustments primarily relate to an increase in income tax liabilities of $988 included under “other non-current liabilities” and post-closing purchase adjustments. The fair values of customer relationships were determined by using an “income approach,” specifically the Multi-Period Excess Earnings Method. The customer relationship assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 7 years. The fair values of the developed technology intangible assets were determined by using the “cost approach,” specifically the replacement cost method. The technology assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 3 years. The goodwill recognized represents the acquired capabilities, operating synergies and other benefits expected to result from combining the acquired operations with the Company’s existing operations. The amount of goodwill recognized from Clairvoyant’s acquisition is not deductible for tax purposes. The goodwill has been assigned to the Company’s Analytics reportable segment based upon the Company’s assessment of nature of services rendered by Clairvoyant. Acquisition-related costs are being expensed as incurred and are included in general and administrative expenses in the unaudited consolidated statements of income. The Company recognized acquisition-related costs of $nil and $134 during the three and nine months ended September 30, 2022, respectively, and $761 during the year ended December 31, 2021. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. The acquisition did not materially impact the Company’s financial position, results of operations or cash flows, and therefore, the Company has not provided supplemental pro forma results. Inbound Media Group, LLC On June 10, 2022, the Company, through its wholly owned subsidiary ExlService.com, LLC, entered into an Asset Purchase Agreement to acquire certain assets of Inbound, a Wyoming limited liability company, which is a digital marketing business focused primarily on lead generation in the insurance space, for cash consideration of $1,469 and contingent consideration with an estimated fair value of $1,439 as of the date of acquisition based on the achievement of certain performance goals by Inbound during the 2022 to 2024 calendar years. The Company accounted for this business combination using the acquisition method of accounting. Goodwill and intangible assets of $1,992 and $916, respectively, were recognized by the Company as a result of this transaction. The goodwill recognized for this business is deductible for income tax purposes. The acquisition strengthens the Company’s capabilities in digital direct-to-consumer marketing by adding performance marketing, lead generation and customer engagement capabilities to its suite of end-to-end marketing solutions, proprietary data sets and robust consumer analytics. The results of operations of the acquired business and the fair value of the net assets acquired are included in the Company’s consolidated financial statements with effect from the date of the acquisition. The acquisition did not materially impact the Company’s financial position, results of operations or cash flows, and therefore, the Company has not provided unaudited supplemental pro forma results. Goodwill The following table sets forth details of changes in goodwill by reportable segment of the Company: Insurance Healthcare Emerging Business Analytics Total Balance as of January 1, 2022 $ 50,428 $ 21,942 $ 49,020 $ 282,512 $ 403,902 Acquisition — — — 1,992 1,992 Measurement period adjustments — — — 2,229 2,229 Currency translation adjustments (654) (57) (1,630) (1) (2,342) Balance as of September 30, 2022 $ 49,774 $ 21,885 $ 47,390 $ 286,732 $ 405,781 As of September 30, 2022, the Company performed an assessment to determine whether events or circumstances exist that may lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company considered current and forecasted economic and market conditions and qualitative factors, such as the Company’s performance during nine months of the current fiscal year, business forecasts for the remainder of the year, stock price movements, generation and availability of cash and expansion plans. The Company reviewed key assumptions, including revisions of projected future revenues for reporting units against the results of the annual impairment test performed during the fourth quarter of 2021. The Company did not identify any triggers or indications of potential impairment for its reporting units as of September 30, 2022. There can be no assurances that goodwill will not be impaired in future periods. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. These estimates and judgements may not be within the control of the Company and accordingly it is reasonably possible that the judgments and estimates described above could change in future periods. The duration of market volatility is highly uncertain and, as such, the impact on cash flows, long-term debt-free net cash flow growth rate in the terminal year and discount rates are subject to significant judgments and may cause variability in the Company’s assessment of existence of any impairment. The Company continues to monitor significant changes in key assumptions that could result in future period impairment charges. The recoverability of goodwill is dependent upon the continued growth of cash flows from the Company’s business activities. This growth is based on business forecasts and improvement in profitability of its reporting units. The Company continues to maintain its focus on cultivating long-term client relationships as well as attracting new clients. Intangible Assets Information regarding the Company’s intangible assets is set forth below: As of September 30, 2022 Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 99,146 $ (36,999) $ 62,147 Developed technology 24,759 (19,539) 5,220 Trade names and trademarks 1,700 (1,230) 470 Non-compete agreements 336 (65) 271 $ 125,941 $ (57,833) $ 68,108 Indefinite-lived intangible assets: Trade names and trademarks $ 900 $ — $ 900 Total intangible assets $ 126,841 $ (57,833) $ 69,008 As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Finite-lived intangible assets: Customer relationships $ 103,016 $ (33,018) $ 69,998 Developed technology 25,040 (15,850) 9,190 Trade names and trademarks 1,700 (1,006) 694 Non-compete agreements 300 — 300 $ 130,056 $ (49,874) $ 80,182 Indefinite-lived intangible assets: Trade names and trademarks $ 900 $ — $ 900 Total intangible assets $ 130,956 $ (49,874) $ 81,082 The amortization expense recognized in the unaudited consolidated statements of income was as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Amortization expense $ 4,243 $ 3,022 $ 12,875 $ 9,780 The remaining weighted average life of intangible assets is as follows: (in years) Customer relationships 5.7 Developed technology 1.5 Trade names and trademarks (Finite lived) 1.7 Non-compete agreements 3.0 Estimated future amortization expense related to finite-lived intangible assets as of September 30, 2022 was as follows: 2022 (October 1 - December 31) $ 4,228 2023 14,634 2024 12,123 2025 10,686 2026 10,357 2027 and thereafter 16,080 Total $ 68,108 |
| Goodwill and Intangible Assets | Business Combinations, Goodwill and Intangible Assets Clairvoyant AI Inc. On December 16, 2021, the Company, through its wholly owned subsidiary ExlService.com, LLC (“Buyer”), completed the acquisition of Clairvoyant, a Delaware corporation, pursuant to an equity securities purchase agreement dated December 16, 2021 (the “Purchase Agreement”). The Company purchased 100% of the issued and outstanding equity securities in Clairvoyant. Clairvoyant is a global technology consulting and services company that helps organizations in their business transformation by maximizing the value of data through actionable insights. It provides data engineering, analytics, machine learning, product engineering, and cloud-based solutions. The acquisition strengthens the Company’s capabilities by adding additional expertise in data engineering and cloud enablement, further supporting its clients in insurance, healthcare, banking and financial services, and retail. The aggregate purchase consideration payable was $90,325, including cash and cash equivalents acquired, debt, other post-closing adjustments and contingent consideration. The base purchase consideration payable at closing of the acquisition (the “Closing”) was $80,080, excluding cash and cash equivalents acquired, debt and estimated other post-closing adjustments. As of September 30, 2022 and December 31, 2021, of the total purchase consideration, the Company has paid $78,984 and $76,831, respectively, net of cash and cash equivalents acquired. The Purchase Agreement also allows sellers the ability to earn up to $20,000 of contingent consideration, based on the achievement of certain performance goals by Clairvoyant during the 2022 and 2023 calendar years. The contingent consideration had an estimated fair value of $10,000 and $9,000, as of September 30, 2022 and December 31, 2021, respectively, and has been presented as contingent consideration under “Accrued expenses and other current liabilities” and “Other non-current liabilities,” as applicable, in the consolidated balance sheets. Changes in the fair value of contingent consideration were recognized in the unaudited consolidated statements of income and presented as a part of “Other income, net.” A portion of the purchase consideration otherwise payable was placed into escrow as security for the post-closing working capital adjustments and the indemnification obligations under the Purchase Agreement. To finance the acquisition at the Closing, the Company utilized its revolving Credit Facility in the amount of $75,000 and paid the balance with available cash on hand. The Company accounted for the business combination using the acquisition method of accounting. Pursuant to the Company’s business combinations accounting policy, the aggregate purchase consideration for Clairvoyant was allocated to identifiable net tangible and intangible assets based upon their fair values. The excess of the estimated purchase consideration over fair value of identifiable net tangible and intangible assets was recorded as goodwill. In order to allocate the consideration transferred for Clairvoyant, the fair values of all identifiable assets and liabilities must be established. For accounting and financial reporting purposes, fair value is defined under ASC No. 820, Fair Value Measurement and Disclosure , as the price that would be received upon sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. Use of different estimates and judgments could yield different results. The tables below presents the fair value of the consideration exchanged and the allocation of purchase consideration to the major classes of assets and liabilities of Clairvoyant as of December 16, 2021: Assets: Cash and cash equivalents $ 5,598 Accounts receivable, net 8,709 Other current assets 360 Property and equipment, net 398 Intangible assets, net Customer relationships 31,600 Developed technology 2,070 Trade names and trademarks 300 Non-compete agreements 300 Other assets 217 Total assets $ 49,552 Liabilities: Accounts payable $ (1,199) Accrued expenses and other current liabilities (4,873) Deferred tax liabilities (9,383) Other non-current liabilities (1,226) Total liabilities (16,681) Net assets acquired 32,871 Goodwill 57,454 Total purchase consideration* $ 90,325 * Includes contingent consideration of $9,000 recognized at fair value as of the date of acquisition . During the three and nine months ended September 30, 2022, the Company recognized measurement period adjustments, which led to increase in goodwill in an amount of $nil and $2,229, respectively. These adjustments primarily relate to an increase in income tax liabilities of $988 included under “other non-current liabilities” and post-closing purchase adjustments. The fair values of customer relationships were determined by using an “income approach,” specifically the Multi-Period Excess Earnings Method. The customer relationship assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 7 years. The fair values of the developed technology intangible assets were determined by using the “cost approach,” specifically the replacement cost method. The technology assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 3 years. The goodwill recognized represents the acquired capabilities, operating synergies and other benefits expected to result from combining the acquired operations with the Company’s existing operations. The amount of goodwill recognized from Clairvoyant’s acquisition is not deductible for tax purposes. The goodwill has been assigned to the Company’s Analytics reportable segment based upon the Company’s assessment of nature of services rendered by Clairvoyant. Acquisition-related costs are being expensed as incurred and are included in general and administrative expenses in the unaudited consolidated statements of income. The Company recognized acquisition-related costs of $nil and $134 during the three and nine months ended September 30, 2022, respectively, and $761 during the year ended December 31, 2021. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidated financial statements with effect from the date of the acquisition. The acquisition did not materially impact the Company’s financial position, results of operations or cash flows, and therefore, the Company has not provided supplemental pro forma results. Inbound Media Group, LLC On June 10, 2022, the Company, through its wholly owned subsidiary ExlService.com, LLC, entered into an Asset Purchase Agreement to acquire certain assets of Inbound, a Wyoming limited liability company, which is a digital marketing business focused primarily on lead generation in the insurance space, for cash consideration of $1,469 and contingent consideration with an estimated fair value of $1,439 as of the date of acquisition based on the achievement of certain performance goals by Inbound during the 2022 to 2024 calendar years. The Company accounted for this business combination using the acquisition method of accounting. Goodwill and intangible assets of $1,992 and $916, respectively, were recognized by the Company as a result of this transaction. The goodwill recognized for this business is deductible for income tax purposes. The acquisition strengthens the Company’s capabilities in digital direct-to-consumer marketing by adding performance marketing, lead generation and customer engagement capabilities to its suite of end-to-end marketing solutions, proprietary data sets and robust consumer analytics. The results of operations of the acquired business and the fair value of the net assets acquired are included in the Company’s consolidated financial statements with effect from the date of the acquisition. The acquisition did not materially impact the Company’s financial position, results of operations or cash flows, and therefore, the Company has not provided unaudited supplemental pro forma results. Goodwill The following table sets forth details of changes in goodwill by reportable segment of the Company: Insurance Healthcare Emerging Business Analytics Total Balance as of January 1, 2022 $ 50,428 $ 21,942 $ 49,020 $ 282,512 $ 403,902 Acquisition — — — 1,992 1,992 Measurement period adjustments — — — 2,229 2,229 Currency translation adjustments (654) (57) (1,630) (1) (2,342) Balance as of September 30, 2022 $ 49,774 $ 21,885 $ 47,390 $ 286,732 $ 405,781 As of September 30, 2022, the Company performed an assessment to determine whether events or circumstances exist that may lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company considered current and forecasted economic and market conditions and qualitative factors, such as the Company’s performance during nine months of the current fiscal year, business forecasts for the remainder of the year, stock price movements, generation and availability of cash and expansion plans. The Company reviewed key assumptions, including revisions of projected future revenues for reporting units against the results of the annual impairment test performed during the fourth quarter of 2021. The Company did not identify any triggers or indications of potential impairment for its reporting units as of September 30, 2022. There can be no assurances that goodwill will not be impaired in future periods. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. These estimates and judgements may not be within the control of the Company and accordingly it is reasonably possible that the judgments and estimates described above could change in future periods. The duration of market volatility is highly uncertain and, as such, the impact on cash flows, long-term debt-free net cash flow growth rate in the terminal year and discount rates are subject to significant judgments and may cause variability in the Company’s assessment of existence of any impairment. The Company continues to monitor significant changes in key assumptions that could result in future period impairment charges. The recoverability of goodwill is dependent upon the continued growth of cash flows from the Company’s business activities. This growth is based on business forecasts and improvement in profitability of its reporting units. The Company continues to maintain its focus on cultivating long-term client relationships as well as attracting new clients. Intangible Assets Information regarding the Company’s intangible assets is set forth below: As of September 30, 2022 Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 99,146 $ (36,999) $ 62,147 Developed technology 24,759 (19,539) 5,220 Trade names and trademarks 1,700 (1,230) 470 Non-compete agreements 336 (65) 271 $ 125,941 $ (57,833) $ 68,108 Indefinite-lived intangible assets: Trade names and trademarks $ 900 $ — $ 900 Total intangible assets $ 126,841 $ (57,833) $ 69,008 As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Finite-lived intangible assets: Customer relationships $ 103,016 $ (33,018) $ 69,998 Developed technology 25,040 (15,850) 9,190 Trade names and trademarks 1,700 (1,006) 694 Non-compete agreements 300 — 300 $ 130,056 $ (49,874) $ 80,182 Indefinite-lived intangible assets: Trade names and trademarks $ 900 $ — $ 900 Total intangible assets $ 130,956 $ (49,874) $ 81,082 The amortization expense recognized in the unaudited consolidated statements of income was as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Amortization expense $ 4,243 $ 3,022 $ 12,875 $ 9,780 The remaining weighted average life of intangible assets is as follows: (in years) Customer relationships 5.7 Developed technology 1.5 Trade names and trademarks (Finite lived) 1.7 Non-compete agreements 3.0 Estimated future amortization expense related to finite-lived intangible assets as of September 30, 2022 was as follows: 2022 (October 1 - December 31) $ 4,228 2023 14,634 2024 12,123 2025 10,686 2026 10,357 2027 and thereafter 16,080 Total $ 68,108 |
