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genpact on it Genpact Q2 2026 Earnings August 6 , 2026
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This presentation contains “forward-looking” statements as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements contained herein that are not historical facts are considered forward-looking statements and can be identified by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “may,” “opportunity,” "plan,” “seek,” “should,” “will,” “would” or similar express ions and the negatives of those terms. These statements, which are not guarantees of performance or results, include those related to our future growth prospects, our bus iness plans, our outlook for 2026, the expansion of our addressable market, the impact of AI on our business and our clients, and other forward -looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and othe r factors that could cause actual results to differ materially from those in such forward-looking statements. The uncertainties and other factors that may cause our actual future results to be materially different from those expressed in our forward-looking statements are discussed in more detail in our filings with the U.S. Securities and Exchange Commission, including our most recent annual report on Form 10-K, available at www.sec.gov. We may from time to time make additional written and oral forward -looking statements, including statements contained in our filings with the SEC and our reports to shareholders. Although we believe that these forward -looking statements are based on reasonable assumptions, you are cautioned not to put undue reliance on these forward-looking statements, which reflect management's current analysis of future events and should not be relied upon as representing management's expectations or beliefs as of any date subsequent to the time they are made. We undertake no obligation to update any forward-looking statements that may be made from time to time by or on behalf of Genpact. This presentation also contains certain non-GAAP financial measures, including adjusted diluted earnings per share, adjusted net income, adjusted income from operations, and adjusted income from operations margin. We believe these non-GAAP financial measures can provide useful supplemental information to investors regarding financial and business trends relating to our financial condition and results of operations when read in conjunctio n with our reported results. These non- GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Reconciliations of these non -GAAP financial measures to the most directly comparable GAAP financial measures are available in the appendix to this presentation and in our earnings release dated August 6, 2026. Disclaimers All growth comparisons in this presentation relate to the corresponding prior year period unless otherwise noted. Numbers may not foot due to rounding. See Appendix for reconciliations of non-GAAP measures.
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C o m p a n y O v e r v i e w 3 Q 2 ’ 2 6 R e s u l t s 16 H i g h l i g h t s 18 O u t l o o k 19 T r e n d s 20 A p p e n d i x 26 2 Agenda
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Genpact The AGENTIC OPERATIONS company. Where applied AI meets context-rich process intelligence. We help the world's leading enterprises run and transform their mission-critical operations.
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without PROCESS INTELLIGENCE There is no ARTIFICIAL INTELLIGENCE “The next era of enterprise value will be created at the last mile. As models converge, differentiation moves downstream to context and how work actually gets done. That's why the real gap in enterprise AI isn't insight - it's action. A tool without context can't close the loop or own outcomes. Durable differentiation comes from re-engineering end-to-end processes, building data and AI capabilities, and operating at scale with agentic operations. The last mile is where process intelligence lives and where intelligence turns into outcomes.” 4 Balkrishan “BK” Kalra, Genpact President & CEO
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1997-2005 Started in General Electric to run mission critical operations with Lean Six Sigma discipline. Built global delivery network for finance, accounting, supply chain, and risk operations. 2005-2010 Spun out from GE in 2005 with IPO in 2007. During the Global Financial Crisis, became the trusted operator for complex, regulated processes at scale. 2010-2015 Rapid global expansion. Launched the patented Smart Enterprise Processes, codifying operating IP into a data- driven approach for transformation. 2015-2023 Introduced Lean Digital, fusing Six Sigma principles & digital technologies. Layered data, digital engineering, and AI on process context to drive operational transformation. The Transformation YearsThe Foundation Years 5 Built on trust, context, and experience…
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…to become the Agentic Operations company 2025 TODAY Over $5B+ in net revenues and growing. Advanced Technology Solutions net revenue growth of at least 25% for 2026. A leader in Agentic Operations, setting the standard for AI-led transformation. 800+ global clients. 25% of the Fortune Global 500. Introduced GenpactNext strategy to become a leader in Advanced Technology Solutions, built on the strength of Core Business Services. Launched Genpact Accounts Payable Suite, our first Agentic Solution. The Pivot: Agentic & Advanced Technology 6 2024 Hard reset with pivot to advanced technology built on process intelligence. Harnessed platform partner ecosystem to bring GenAI pilots to live production.
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Expanding TAM AI is dramatically opening new work and spend pools, even as it compresses some legacy services spend with automation. Capturing the opportunity Focused investments in agentic, data & AI, and partner ecosystems are unlocking new sources of demand and higher-value new workflows. TAM Prior AI Era ~10× with Agentic Operations Investing strategically to capture EXPANDING TAM 7 TAM estimates derived from Gartner, HFS, Everest, other third party market research, and internal estimates. The time is right AI is redrawing markets. Enterprises are moving to autonomous workflows that do the work, not just support it. AI is now a mandate for every function, widening buying decisions across the organization. We are uniquely positioned Genpact sits at the intersection of process, technology, and execution. Decades running mission-critical operations give us the domain depth, process data, and trusted client relationships required to deploy AI at scale and deliver outcomes. We are building a new Genpact We are targeting our investments to build high- quality, durable revenue that compounds and is difficult to replicate. We are focusing our resources on accelerating the flywheel toward Agentic Operations and transitioning away from work not aligned with that strategy.
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In the operation In the context In the outcomes We are on it because we are in it.
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A NEW GENPACT is taking shape 01 Doubling down with investments focused on accelerating the flywheel for Agentic Operations 02 Building high-quality, durable revenue that compounds 03 Driving structurally richer margin profile 04 Opening up daylight between Genpact and the market around us 9
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Software & Tools Only No domain context Needs skilled operators Can't scale alone AI + Context Context rich process intelligence AI that clients trust Outcomes, not just tools Services Only Slow to scale High cost, lower margin Limited tech leverage AGENTIC OPERATIONS The ideal mix Technology creates possibilities. Operations create outcomes. Together they deliver VALUE. Genpact’s Agentic Operations delivers differentiated value to clients Outcomes embedded in delivery New levers to unlock ROI Scalable automation Built-in auditability + governance 10
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Advanced Technology Solutions T h e C o r e Today Human-processed, human-validated Machine-processed, human-validated T h e F l y w h e e l A g e n t i c O p e r a t i o n s The future Expert operators Clear domains & industries Last mile knowledge Decades of client trust Agentic Operations Context rich process intelligence D i g i t a l T e c h n o l o g i e s A d v i s o r y A g e n t i c S o l u t i o n sD a t a & A I T h e F l y w h e e l P o w e r i n g The foundation for our future Agentic Operations moves clients to an AI-based future AI + Context: The collaborative model between agents and human experts that compounds • Domain-specific agents (Genpact IP + custom agents) autonomously execute tasks and reengineer processes • Last-mile experts validate exceptions, train and advance models, and reinforce learnings • Clear roles, skills, and governance underpinned by responsible AI • Annual recurring revenue models not tied to headcount 11
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A d v a n c e d T e c h n o l o g y S o l u t i o n s i s A C C E L E R A T I N G e v e n f a s t e r a n d i s H I G H E R V A L U E 12 The flywheel is expanding capabilities and capturing growing TAM [1] 2x revenue / headcount refers to Advanced Technology Solutions revenue per headcount being at least twice the overall company average [2] 2x revenue growth rate refers to Advanced Technology Solutions revenue growth on a year-over-year basis of at least twice the overall company revenue growth 2x 2x 70% 70% Revenue / headcount1 Revenue growth rate2 Annuitized revenue Non-FTE revenue 2023 2024 2025 2026E $985M $1,029M $1,204M At least 25% YoY At least 25% YoY +3% YoY +5% YoY +17% YoY May ’26 At least 20% Feb ’26 High- teens Jun ‘25 Mid- teens Advanced Technology Solutions Revenue
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Agentic Solutions: AI offerings built with Genpact IP that run mission-critical business processes at enterprise scale. Revenue is recurring and not linked to headcount. 13 Agentic Solutions Custom agent development and deployment are included in Data & AI, not Agentic Solutions (both a subset of Advanced Technology Solutions). 50%, 3%, 300 bps are calculated on cumulative Agentic TCV from inception through Q2'26. Agentic Total Contract Value (TCV) Applying advanced tech to mission critical operations drives wallet share and TAM expansion 100% Non-FTE commercial constructs, building strong annuitized, recurring revenue streams >50% Cumulative contract value from new clients >3% Net revenue growth from rotation clients >300 bps Gross margin expansion from rotation clients2025 2026E $0 2024 >$200M On track to exceed $1B
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2023 2024 2025 2026E Net Revenue YoY Gross Margin Expansion YoY Adj. Diluted EPS YoY Our results speak for themselves 14 W h y w e a r e w i n n i n g m o r e Peers include ACN, CAP, CTSH, EXLS, HCL, IBM, INFY, TCS, & Wipro. 2026E figures reflect C2026 estimates from FactSet as of 31 Jul 2026. Peer organic growth derived from explicit company remarks on inorganic growth contributions for material acquisitions. Adjusted diluted EPS is a non-GAAP financial measure. Peer results set forth above are based on financial metrics that may be calculated differently from how we calculate such metrics. These measures may not be directly comparable. Owning the process = our structural advantage • Decades running mission-critical operations at enterprise scale • Our operator know-how is the process intelligence required to make AI work Exponential power of big and small • Big enough to invest, deliver globally, and matter to an enterprise • Small enough to understand nuance, move quickly, and make every client count Aligned leadership + clear Agentic Operations strategy • Optimal mix of experienced tech and operations leaders • Aligned and focused on applying advanced tech to mission- critical operations – and scaling with discipline Bias for speed • Able and willing to disrupt our old playbooks • Moving from ideas to production to scale quickly 2.4% 6.5% 6.6% 2.3% 3.2% 4.0% 4.4% 2.9% 4.1% 5.4% at least 7% flat 40 bps 60 bps 20 bps 10 bps flat flat +50 bps 8.8% 10.1% 11.3% 6.6% 6.5% 6.5% 5.5% Genpact Peers Peers (Organic) At least 12%
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15 Opening daylight. From our peers to a new category. Figures reflect results through Q2’26 Separating from our peers A new Genpact O u t p e r f o r m i n g o n m e t r i c s t h a t m a t t e r A g e n t i c O p e r a t i o n s i s a f u n d a m e n t a l l y d i f f e r e n t b u s i n e s s The flywheel is firing This is not the company you knew Record bookings, backlog, and pipeline. Process intelligence opening new buying centers. Advanced Technology Solutions mix accelerating across revenue, bookings, and pipeline. Intentional disruption with aligned leaders + clear strategy. Advanced Technology Solutions net revenue growing rapidly, projected at 25% YoY. Driving meaningful value for clients beyond productivity. The shift is structural Entering an entirely new market 13 consecutive quarters of YoY gross margin expansion. Revenue decoupling from headcount. Double-digit annual adjusted EPS growth YoY while investing aggressively. Agentic Operations redefines where we compete. TAM expands by an order of magnitude. A new category with durable, differentiated, recurring revenue. Agentic momentum is real and accretive Agentic Operations is the new Genpact On track to deliver over $1B in Agentic TCV for 2026. Revenue and margin accretive. Multi-year, recurring revenue streams. AI Agents + humans, working together. LLM-agnostic, enterprise- grade. Outcome-driven, non-FTE-led.
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Q2 2026 Results
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Total Net Revenues $1.343B +7.1% YoY Gross Profit $490M 36.5% GM%, +60 bps YoY Net Income $146M +9.8% YoY Adjusted Income from Operations1 $234M 17.4% AOI%, +10 bps YoY Diluted EPS $0.86 +14.7% YoY Adj. Diluted EPS1 $1.00 +13.6% YoY 17 Q2’26 Key Financial Results [1] Adjusted income from operations, adjusted income from operations margin, and adjusted diluted EPS are non-GAAP financial measures. See appendix for reconciliations to GAAP figures. [2] Operating cash flow growth in Q2’26 reflects timing of collections as well as prepayments received in 2025. Financial Services Operating Cash Flow2 $350M +3.3% YoY $72M -59.2% YoY Consumer & Healthcare Share Repurchases $469M +9.5% YoY $50M +66.7% YoY High Tech & Manufacturing Dividends $524M +7.6% YoY $32M +6.7% YoY R e v e n u e D i s a g g r e g a t i o n S e g m e n t N e t R e v e n u e s C a s h F l o w Advanced Technology Solutions $363M +24.1% YoY Core Business Services $980M +1.9% YoY
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18 Q2’26 Highlights 24.1% YoY Advanced Technology Solutions now represents 27% of total net revenues.Advanced Technology Solutions On track to exceed $1B Continued rapid momentum in Q2. 2026 Agentic TCV on track to exceed $1B.Agentic Total Contract Value (TCV) >50% Reflecting our strategic shift to fixed fee, consumption, and outcome-based models.% of Non-FTE revenue Expanded +60 bps YOY 13 consecutive quarters of YoY gross margin expansion.Gross Margin % Genpact in the news The $18 trillion opportunity: how four enterprise debts will make or break your AI future (link) Genpact Launches Banking Analyst Suite, Agentic AI for Regulated Banking Operations (link) Agentic Deductions Solution introduced to recover lost revenue for consumer goods companies (link) Recognized as Market Leader in Data Modernization and AI by HFS Research (link) Named Rising Star in ISG Provider LensTM Databricks Ecosystem Report for AI/ML and Managed Data Optimization (link) For more updates, visit the Genpact Newsroom T H O U G H T L E A D E R S H I P S O L U T I O N S R E C O G N I T I O N S O T H E R
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19 Outlook Adjusted income from operations margin and adjusted diluted EPS are non-GAAP measures. Reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP measures for the periods presented are included in the appendix. Q3’26 FY26 Revenue Growth 6 to 7% YoY At least 7% YoY Core Business Services Flat to slightly down YoY Expected to grow YoY Advanced Technology Solutions At least 25% YoY At least 25% YoY Gross Margin 36.6%, +20 bps YoY 36.5%, +50 bps YoY Adjusted Operating Income Margin 17.8%, +10 bps YoY 17.7%, +25 bps YoY Adjusted Diluted EPS $1.04 to $1.05, +7% to +8% YoY At least 12% YoY FY26 • Total revenue growth includes nearly -2 pts of impact from the transition from work not aligned with our Agentic Operations strategy. • Advanced Technology Solutions revenue growth is now expected to accelerate to at least 25% YoY for FY26. • Core Business Services revenue is still expected to grow in 2026 despite roughly -2 points of impact from the transition noted above. • For 2026, the impact of the transition is concentrated in the second half of the year.
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20Adjusted diluted earnings per share is a non-GAAP financial measure. 2026E figures reflect Genpact guidance as of Q2’26 earnings. See appendix for reconciliations to GAAP figures. 2026E net revenue growth includes about -2 points of impact from the transition away from work not aligned with our Agentic Operations strategy. Financial Performance Trends H e a l t h y d e m a n d a n d f o c u s e d e x e c u t i o n d r i v e s t r o n g t o p a n d b o t t o m- l i n e g r o w t h Quarterly trends Annual trends Q2’25 Q3’25 Q4’25 Q1’26 Q2’26 2023 2024 2025 2026E Net Revenue ($ & YoY) $1,254M $1,291M $1,319M $1,296M $1,343M $4,477M $4,767M $5,080M At least 7% Adjusted diluted EPS ($ & YoY) $0.88 $0.97 $0.97 $0.98 $1.00 $2.98 $3.28 $3.65 At least 12% 6.6% 6.6% 5.6% 6.7% 7.1% 11.4% 14.1% 6.6% 16.7% 13.6% 2.4% 6.5% 6.6% At least 7% 8.8% 10.1% 11.3% At least 12%
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21 Revenue Performance Trends A d v a n c e d T e c h n o l o g y S o l u t i o n s m o m e n t u m i s g r o w i n g , n o w r e p r e s e n t i n g 2 7 % o f t o t a l r e v e n u e Advanced Technology Solutions Core Business Services Advanced Technology Solutions % of Total Revenue Q2’25 Q3’25 Q4’25 Q1’26 Q2’26 2026E Q2’25 Q3’25 Q4’25 Q1’26 Q2’26 2026E YoY% 17.3% 20.0% 15.0% 24.3% 24.1% >25% 3.8% 3.0% 2.9% 1.4% 1.9% Expected to grow Q2’26 Advanced Technology Solutions net revenues increased 24.1% YoY, demonstrating the significant momentum powered by our flywheel. Core Business Services net revenues grew 1.9% YoY, as we continue to see strong demand for our mission-critical operations capabilities. 2026 We now expect Advanced Technology Solutions net revenue growth to exceed 25% YoY for the full year with accelerating momentum. We still expect Core Business Services net revenues to grow YoY, including roughly -2 pts of impact as we transition away from work not aligned with our Agentic Operations strategy. $293M $311M $323M $345M $363M 23.3% 24.1% 24.5% 26.6% 27.0% $0 $0 $0 $0 $0 $0 $0 $0 At least 25% YoY $962M $980M $996M $951M $980M Expected to grow
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22 Margin Trends S t r u c t u r a l m a r g i n i m p r o v e m e n t e n a b l e s s i g n i f i c a n t i n v e s t m e n t s Quarterly trends Annual trends Q2’25 Q3’25 Q4’25 Q1’26 Q2’26 2023 2024 2025 2026E Gross Margin (% & YoY bps) YoY (bps) +50 bps +70 bps +90 bps +110 bps +60 bps -10bps +40bps +60bps +50bps Adjusted Operating Income Margin (% & YoY bps) YoY (bps) +50 bps +10 bps -10 bps Flat +10 bps +60bps Flat +40bps +25bps Adjusted income from operations and adjusted income from operations margin are non-GAAP financial measures. 2026E figures reflect Genpact guidance as of Q2’26 earnings. YoY % margin changes rounded to nearest 10 basis points. See appendix for reconciliations to GAAP figures. 35.9% 36.4% 36.6% 36.4% 36.5% 17.3% 17.7% 17.6% 17.3% 17.4% 35.1% 35.5% 36.0% 36.5% 17.0% 17.1% 17.5% 17.7%
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23 Revenue vs Headcount Growth S h o w i n g e a r l y s i g n s o f r e v e n u e g r o w t h d e c o u p l i n g f r o m h e a d c o u n t Productivity index is defined as (1+ TTM revenue YoY%) / (1+ TTM Avg headcount YoY). Q2’25 Q3’25 Q4’25 Q1’26 Q2’26 Net Revenue $ $1,254M $1,291M $1,319M $1,296M $1,343M Average Headcount 146,900 146,800 147,400 145,500 143,100 6.6% 6.6% 5.6% 6.7% 7.1% 9.9% 6.8% 5.4% 1.8% -2.6% 0.98 0.99 0.99 1.00 1.04 0.97 0.98 0.99 1.00 1.01 1.02 1.03 1.04 -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Net Revenue Growth YoY Average Headcount Growth YoY Productivity Index (TTM)
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We are changing our business in ways that matter – durable, high-quality revenue that compounds with richer margins. A new Genpact is taking shape in a fundamentally different category. Our flywheel is firing, and we are doubling down to accelerate even more. AI is a force multiplier, and we are investing to capture the expanding TAM. A new Genpact. The Agentic Operations company. We are just getting started. 24
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Appendix
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To supplement the consolidated financial statements presented in accordance with GAAP, this presentation includes the following non-GAAP financial measures: • Adjusted income from operations; • Adjusted income from operations margin; • Adjusted net income; and • Adjusted diluted earnings per share. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Accordingly, these non-GAAP financial measures, the financial statements prepared in accordance with GAAP and the reconciliations of Genpact's GAAP financial statements to such non-GAAP financial measures should be carefully evaluated. Given Genpact's acquisitions of varying scale and size, and the difficulty in predicting expenses relating to acquisitions and the amortization of acquired intangibles thereof, since July 2012 Genpact's management has used financial statements that exclude all acquisition-related expenses and amortization of acquired intangibles for its internal management reporting, budgeting and decision-making purposes, including comparing Genpact's operating results to those of its competitors. For the same reasons, since April 2016, Genpact's management has excluded the impairment of acquired intangible assets from the financial statements it uses for internal management purposes. Acquisition-related expenses are excluded in the period in which an acquisition is consummated. Genpact's management also uses financial statements that exclude stock-based compensation expense. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting ASC 718 "Compensation-Stock Compensation," Genpact's management believes that providing non-GAAP financial measures that exclude such expenses allows investors to make additional comparisons between Genpact's operating results and those of other companies. Additionally, in its calculations of non-GAAP financial measures, Genpact's management has adjusted foreign exchange gains and losses, interest income and expense and income tax expenses from GAAP net income, and other income and expenses from GAAP income from operations, because management believes that the Company's results after taking into account these adjustments more accurately reflect the Company's ongoing operations. In its calculations of adjusted diluted earnings per share, Genpact's management adds back stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses and the related tax impact of such adjustments from GAAP diluted earnings per share. For the purpose of calculating adjusted diluted earnings per share, the combined current and deferred tax effect is determined by multiplying each pre-tax adjustment by the applicable statutory income tax rate. In addition, in connection with (i) certain 2022 restructuring measures that involved a focused reduction in the Company’s workforce in 2022, a non-strategic business divestiture in the first quarter of 2023 and a lease impairment charge in the second quarter of 2023 as well as (ii) an intercompany transfer of certain intellectual property rights in the fourth quarter of 2023 that resulted in a non-recurring tax benefit, for the period ended December 31, 2023, the Company also excluded such restructuring charges, the loss on the sale of a business previously classified as held for sale, the revenues and expenses associated with such business, the gain on the lease termination, the non-recurring tax benefit on the transfer of intellectual property rights and the tax impacts of these items from its calculation of non-GAAP measures for such period. See the Company’s filings with the SEC for the period ended December 31, 2023 for additional information on such adjustments. Accordingly, Genpact believes that the presentation of adjusted income from operations, adjusted income from operations margin, adjusted net income and adjusted diluted earnings per share, when read in conjunction with the Company's reported results, can provide useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations. A limitation of using adjusted income from operations, adjusted income from operations margin and adjusted net income versus income from operations, income from operations margin, net income and net income margin calculated in accordance with GAAP is that these non-GAAP financial measures exclude certain recurring costs and certain other charges, namely stock-based compensation expense, amortization of acquired intangible assets, foreign exchange (gains)/ loses, net, interest (income) expense, net and income tax expense. Management compensates for this limitation by providing specific information on the GAAP amounts excluded from these non-GAAP financial measures. 27 Non-GAAP Financial Measures
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Non-GAAP financial measures and reconciliations (In thousands) 2023 2024 2025 Net income $ 631,255 $ 513,670 $ 552,494 Foreign exchange (gains) losses, net (4,274) (2,937) (7,390) Interest (income) expense, net 47,935 47,214 49,597 Income tax expense / (benefit) (29,031) 163,150 177,653 Stock-based compensation expense 88,576 66,383 89,616 Amortization and impairment of acquired intangible assets 31,348 26,456 24,288 Restructuring (income) expense (4,874) - - Operating loss from the business classified as held for sale 1,201 - - Loss on the sale of business classified as held for sale 802 - - Acquisition-related expenses - - 1,310 Adjusted income from operations $ 762,938 $ 813,936 $ 887,568 Net income margin 14.1% 10.8% 10.9% Adjusted income from operations margin 17.0% 17.1% 17.5% 28 [1] Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. Reconciliation of Net Income / Margin to Adjusted Income from Operations / Margin1
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(In thousands) 2025 2026 Q2 Q3 Q4 FY Q1 Q2 Net income $ 132,716 $ 145,831 $ 143,094 $ 552,494 $ 147,992 $ 145,737 Foreign exchange (gains) losses, net (376) (3,678) (2,047) (7,390) (7,302) (2,109) Interest (income) expense, net 13,485 12,785 11,881 49,597 11,602 15,147 Income tax expense / (benefit) 44,022 43,521 45,740 177,653 46,002 45,146 Stock-based compensation expense 21,798 22,221 25,561 89,616 22,273 26,359 Amortization and impairment of acquired intangible assets 4,315 8,227 7,428 24,288 3,111 3,278 Acquisition-related expenses 1,310 - - 1,310 - - Adjusted income from operations $ 217,270 $ 228,907 $ 231,657 $ 887,568 $ 223,678 $ 233,558 Net income margin 10.6% 11.3% 10.8% 10.8% 11.4% 10.8% Adjusted income from operations margin 17.3% 17.7% 17.6% 17.6% 17.3% 17.4% [1] Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. 29 Non-GAAP financial measures and reconciliations Reconciliation of Net Income / Margin to Adjusted Income from Operations / Margin1
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(In thousands) Year ended December 31, 2023 2024 2025 Income from operations $ 630,857 $ 702,061 $ 750,207 Loss related to business held for sale 1,201 - - Impairment loss on asset forming part of business held for sale 802 - - Amortization and impairment of acquired intangible assets 31,348 26,456 24,288 Acquisition related expenses - - 1,310 Restructuring (income) expense (4,874) - - Stock-based compensation expense 88,576 66383 89616 Other income (expense), net 15,028 19036 22,147 Adjusted income from operations $ 762,938 $ 813,936 $ 887,568 Income from operations margin 14.1% 14.7% 14.8% Adjusted income from operations margin 17.0% 17.1% 17.5% [1] Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. 30 Non-GAAP financial measures and reconciliations Reconciliation of Income from Operations / Margin to Adjusted Income from Operations / Margin1
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(In thousands) 2025 2026 Q2 Q3 Q4 FY Q1 Q2 Income from operations $ 179,402 $ 191,642 $ 195,461 $ 750,207 $ 198,583 $ 192,942 Amortization of acquired intangible assets 4,315 8,227 7,428 24,288 3,111 3,278 Acquisition related expenses 1310 1,310 - - Stock-based compensation expense 21,798 22,221 25,561 89,616 22,273 26,359 Other income (expense), net 10,445 6,817 3,207 22,147 (289) 10,979 Adjusted income from operations $ 217,270 $ 228,907 $ 231,657 $ 887,568 $ 223,678 $ 233,558 Income from operations margin 14.3% 14.8% 14.8% 14.8% 15.3% 14.4% Adjusted income from operations margin 17.3% 17.7% 17.6% 17.5% 17.3% 17.4% [1] Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. 31 Non-GAAP financial measures and reconciliations Reconciliation of Income from Operations / Margin to Adjusted Income from Operations / Margin1
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(In thousands) Year ended December 31, 2023 2024 2025 Net income $ 631,255 $ 513,670 $ 552,494 Stock-based compensation expense 88,576 66,383 89,616 Amortization and impairment of acquired intangible assets 31,348 26,456 24,288 Acquisition related expenses - - 1,310 Restructuring (income) expense (4,874) - - Operating loss from business classified as held for sale 1,201 - - Loss on the sale of business classified as held for sale 802 - - Tax impact on stock-based compensation expense (19,312) (8,997) (16,487) Tax impact on amortization of acquired intangible assets (8099) (6,580) (5,865) Tax impact on restructuring (income) expense 1,224 - - Tax impact included on impairment charges on asset held for sale (160) - - Tax impact on operating loss from the business classified as held for sale (300) - - Tax benefit on intra-entity transfer of intellectual property (169,945) - - Adjusted net income $ 551,715 $ 590,932 $ 645,356 Adjusted net income margin 12.3% 12.4% 12.7% 32 [1] Adjusted net income and adjusted net income margin are non-GAAP measures. Non-GAAP financial measures and reconciliations Reconciliation of Net Income to Adjusted Net Income / Margin1
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(In thousands) 2025 2026 Q2 Q3 Q4 FY Q1 Q2 Net income $ 132,716 $ 145,831 $ 143,094 $ 552,494 $ 147,992 $ 145,737 Stock-based compensation expense 21,798 22,221 25,561 89,616 22,273 26,359 Amortization of acquired intangible assets 4,315 8,227 7,428 24,288 3,111 3,278 Acquisition related expenses 1,310 - - 1,310 - - Tax impact on stock-based compensation expense (3,867) (4,002) (4,540) (16,487) (3,560) (3,680) Tax impact on amortization of acquired intangible assets (1,066) (2,054) (1,678) (5,865) (756) (799) Adjusted net income $ 155,206 $ 170,223 $ 169,864 $ 645,356 $ 169,060 $ 170,895 Adjusted net income margin 12.4% 13.2% 12.9% 12.7% 13.0% 12.7% 33 [1] Adjusted net income and adjusted net income margin are non-GAAP measures. Non-GAAP financial measures and reconciliations Reconciliation of Net Income to Adjusted Net Income / Margin1
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[1] Due to rounding, the numbers in this table may not add up precisely to the totals provided. [2] Adjusted diluted earnings per share is a non-GAAP measure. (Per share data) 2023 2024 2025 Diluted EPS $ 3.41 $ 2.85 $ 3.13 Stock-based compensation expense 0.48 0.37 0.51 Amortization and impairment of acquired intangible assets 0.17 0.15 0.14 Restructuring (income) expense (0.03) - - Operating loss from the business classified as held for sale 0.01 - - Impairment charge on assets classified as held for sale - - - Loss on the sale of business classified as held for sale - - - Acquisition-related expenses - - 0.01 Tax impact on stock-based compensation expense (0.10) (0.05) (0.09) Tax impact on amortization and impairment of acquired intangible assets (0.04) (0.04) (0.03) Tax impact on restructuring (income) expense 0.01 - - Tax impact on operating loss from the business classified as held for sale - - - Tax impact on impairment charge on assets classified as held for sale - - - Tax benefit on intercompany transfer of intellectual property rights (0.92) - - Adjusted diluted EPS $ 2.98 $ 3.28 $ 3.65 34 Non-GAAP financial measures and reconciliations Reconciliation of Diluted EPS to Adjusted Diluted EPS1,2
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(Per share data) 2025 2026 Q2 Q3 Q4 FY Q1 Q2 Diluted EPS $ 0.75 $ 0.83 $ 0.82 $ 3.13 $ 0.86 $ 0.86 Stock-based compensation expense 0.12 0.13 0.15 0.51 0.13 0.15 Amortization of acquired intangible assets 0.02 0.05 0.04 0.14 0.02 0.02 Acquisition-related expenses 0.01 - - 0.01 - - Tax impact on stock-based compensation expense (0.02) (0.02) (0.03) (0.09) (0.02) (0.02) Tax impact on amortization and impairment of acquired intangible assets (0.01) (0.01) (0.01) (0.09) - - Adjusted diluted EPS $ 0.88 $ 0.97 $ 0.97 $ 3.65 $ 0.98 $ 1.00 [1] Due to rounding, the numbers in this table may not add up precisely to the totals provided. [2] Adjusted diluted earnings per share is a non-GAAP measure. 35 Non-GAAP financial measures and reconciliations Reconciliation of Diluted EPS to Adjusted Diluted EPS1,2
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Year ending December 31, 2026 Net income margin 11.1% Estimated interest (income) expense, net 1.0% Estimated income tax expense 3.5% Estimated stock-based compensation expense 1.9% Estimated amortization of acquired intangible assets 0.2% Estimated foreign exchange (gain)/loss (0.2)% Adjusted income from operations margin 17.7% Quarter ending September 30, 2026 Net income margin 11.0% Estimated interest (income) expense, net 1.1% Estimated income tax expense 3.5% Estimated stock-based compensation expense 2.0% Estimated amortization of acquired intangible assets 0.2% Estimated foreign exchange (gain)/loss 0.0% Adjusted income from operations margin 17.8% [1] Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. 36 Non-GAAP financial measures and reconciliations Reconciliation of Outlook for Net Income Margin to Adjusted Income from Operations Margin1
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Year ending December 31, 2026 Income from operations margin 15.2% Estimated stock-based compensation expense 1.9% Estimated amortization of acquired intangible assets 0.2% Estimated other income (expense), net 0.3% Adjusted income from operations margin 17.7% Quarter ending September 30, 2026 Income from operations margin 15.3% Estimated stock-based compensation expense 2.0% Estimated amortization of acquired intangible assets 0.2% Estimated other income (expense), net 0.3% Adjusted income from operations margin 17.8% [1] Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. 37 Non-GAAP financial measures and reconciliations Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from Operations Margin1
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Year ending December 31, 2026 Diluted EPS $ 3.51 Estimated stock-based compensation expense 0.60 Estimated amortization of acquired intangible assets 0.08 Estimated tax impact on stock-based compensation expense (0.09) Estimated tax impact on amortization of acquired intangible assets (0.02) Adjusted diluted EPS $ 4.09 Quarter ending September 30, 2026 Lower Upper Diluted EPS $ 0.89 $ 0.90 Estimated stock-based compensation expense 0.16 0.16 Estimated amortization of acquired intangible assets 0.02 0.02 Estimated tax impact on stock-based compensation expense (0.02) (0.02) Estimated tax impact on amortization of acquired intangible assets (0.00) (0.00) Adjusted diluted EPS $ 1.04 $ 1.05 [1] Due to rounding, the numbers in this table may not add up precisely to the totals provided. [2] Adjusted diluted earnings per share is a non-GAAP measure. 38 Non-GAAP financial measures and reconciliations Reconciliation of Outlook for Diluted EPS to Adjusted Diluted EPS1,2