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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________________
FORM 10-Q
_________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                      TO                     
COMMISSION FILE NUMBER 001-33089
_________________________________________________________
EXLSERVICE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
_________________________________________________________
Delaware 82-0572194
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
320 Park Avenue,29th Floor, 
New York,New York10022
(Address of principal executive offices) (Zip code)
(212) 277-7100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:Trading symbol(s)Name of Each Exchange on Which Registered:
Common Stock, par value $0.001 per share EXLSNASDAQ
Securities registered pursuant to Section 12(g) of the Act:
None
________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.   Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files).   Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer  Accelerated filer 
Non-accelerated filer  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  

As of July 27, 2021, there were 33,174,613 shares of the registrant’s common stock outstanding, par value $0.001 per share.



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PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXLSERVICE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per share amounts)
As of
June 30, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$150,211 $218,530 
Short-term investments144,533 184,286 
Restricted cash5,065 4,690 
Accounts receivable, net182,111 147,635 
Prepaid expenses12,060 11,344 
Advance income tax, net13,567 5,684 
Other current assets33,615 37,109 
Total current assets541,162 609,278 
Property and equipment, net86,511 92,875 
Operating lease right-of-use assets83,280 91,918 
Restricted cash2,260 2,299 
Deferred tax assets, net24,132 7,749 
Intangible assets, net52,853 59,594 
Goodwill348,747 349,088 
Other assets27,472 32,099 
Investment in equity affiliate2,929 2,957 
Total assets$1,169,346 $1,247,857 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$3,877 $6,992 
Current portion of long-term borrowings15,000 25,000 
Deferred revenue12,017 32,649 
Accrued employee costs70,496 67,645 
Accrued expenses and other current liabilities76,424 66,410 
Current portion of operating lease liabilities18,039 18,894 
Income taxes payable, net11,256 3,488 
Total current liabilities207,109 221,078 
Long-term borrowings, less current portion139,432 201,961 
Operating lease liabilities, less current portion76,518 84,874 
Income taxes payable1,790 1,790 
Deferred tax liabilities, net902 847 
Other non-current liabilities15,581 18,135 
Total liabilities441,332 528,685 
Commitments and contingencies (Refer to Note 24)
Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued
  
ExlService Holdings, Inc. Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized, 39,283,853 shares issued and 33,249,709 shares outstanding as of June 30, 2021 and 38,968,052 shares issued and 33,559,434 shares outstanding as of December 31, 2020
39 39 
Additional paid-in capital439,051 420,976 
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Retained earnings701,331 641,379 
Accumulated other comprehensive loss(86,745)(74,984)
Total including shares held in treasury1,053,676 987,410 
Less: 6,034,144 shares as of June 30, 2021 and 5,408,618 shares as of December 31, 2020, held in treasury, at cost
(325,662)(268,238)
Stockholders’ equity728,014 719,172 
Total equity728,014 719,172 
Total liabilities and stockholders’ equity $1,169,346 $1,247,857 
See accompanying notes to unaudited consolidated financial statements.
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EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except share and per share amounts)

Three months ended June 30,Six months ended June 30,
2021202020212020
Revenues, net$275,064 $222,473 $536,479 $468,463 
Cost of revenues(1)
170,701 158,401 329,522 321,057 
Gross profit(1)
104,363 64,072 206,957 147,406 
Operating expenses:
General and administrative expenses36,499 28,750 67,202 57,691 
Selling and marketing expenses19,724 13,051 37,959 27,507 
Depreciation and amortization expense12,310 12,405 24,411 24,855 
Total operating expenses68,533 54,206 129,572 110,053 
Income from operations35,830 9,866 77,385 37,353 
Foreign exchange gain, net1,353 1,359 1,787 2,736 
Interest expense(2,520)(2,883)(4,994)(5,955)
Other income, net2,215 4,225 3,625 6,754 
Income before income tax expense and earnings from equity affiliates36,878 12,567 77,803 40,888 
Income tax expense8,865 4,072 17,823 9,927 
Income before earnings from equity affiliates28,013 8,495 59,980 30,961 
Gain / (loss) from equity-method investment8 (66)(28)(121)
Net income attributable to ExlService Holdings, Inc. stockholders$28,021 $8,429 $59,952 $30,840 
Earnings per share attributable to ExlService Holdings, Inc. stockholders:
Basic$0.83 $0.24 $1.78 $0.90 
Diluted$0.81 $0.24 $1.75 $0.89 
Weighted-average number of shares used in computing earnings per share attributable to ExlService Holdings Inc. stockholders:
Basic33,571,074 34,486,20233,652,146 34,443,884
Diluted34,389,768 34,597,68834,353,593 34,659,146

(1) Exclusive of depreciation and amortization expense.



See accompanying notes to unaudited consolidated financial statements.
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EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (UNAUDITED)
(In thousands)
Three months ended June 30,Six months ended June 30,
2021202020212020
Net income$28,021 $8,429 $59,952 $30,840 
 Other comprehensive income/(loss):
Unrealized gain/(loss) on cash flow hedges(871)7,721 (303)(7,125)
Loss on net investment hedges(1,134) (1,134) 
Foreign currency translation gain/(loss)(4,775)2,273 (6,686)(19,298)
Reclassification adjustments
(Gain)/loss on cash flow hedges(1)
(2,866)1,127 (5,695)198 
Retirement benefits(2)
176 97 355 198 
Income tax effects relating to above(3)
1,478 (2,388)1,702 6,645 
  Total other comprehensive income/(loss)$(7,992)$8,830 $(11,761)$(19,382)
Total comprehensive income/(loss)$20,029 $17,259 $48,191 $11,458 


(1)These are reclassified to net income and are included either in cost of revenues or operating expenses, as applicable in the unaudited consolidated statements of income. Refer to Note 16 - Derivatives and Hedge Accounting to the unaudited consolidated financial statements.

(2)These are reclassified to net income and are included in other income, net in the unaudited consolidated statements of income. Refer to Note 19 - Employee Benefit Plans to the unaudited consolidated financial statements.

(3)These are income tax effects recognized on cash flow hedges, retirement benefits and foreign currency translation gains/(losses). Refer to Note 21 - Income Taxes to the unaudited consolidated financial statements.








See accompanying notes to unaudited consolidated financial statements.
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EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
For the three months ended June 30, 2021 and 2020
(In thousands, except share and per share amounts)


Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Equity
SharesAmountSharesAmount
Balance as of March 31, 202139,273,989 $39 $428,882 $673,310 $(78,753)(5,747,100)$(297,253)$726,225 
Stock issued against stock-based compensation plans9,864 — 99 — — — — 99 
Stock-based compensation— — 10,070 — — — — 10,070 
Acquisition of treasury stock— — — — — (287,044)(28,409)(28,409)
Other comprehensive loss— — — — (7,992)— — (7,992)
Net income— — — 28,021 — — — 28,021 
Balance as of June 30, 202139,283,853 $39 $439,051 $701,331 $(86,745)(6,034,144)$(325,662)$728,014 


Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Equity
SharesAmountSharesAmount
Balance as of March 31, 202038,813,775 $39 $396,939 $574,314 $(113,104)(4,497,779)$(202,284)$655,904 
Stock issued against stock-based compensation plans4,590 — 39 — — — — 39 
Stock-based compensation— — 7,726 — — — — 7,726 
Other comprehensive income— — — — 8,830 — — 8,830 
Net income— — — 8,429 — — — 8,429 
Balance as of June 30, 202038,818,365 $39 $404,704 $582,743 $(104,274)(4,497,779)$(202,284)$680,928 
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EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
For the six months ended June 30, 2021 and 2020
(In thousands, except share and per share amounts)

Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Equity
SharesAmountSharesAmount
Balance as of January 1, 202138,968,052 $39 $420,976 $641,379 $(74,984)(5,408,618)$(268,238)$719,172 
Stock issued against stock-based compensation plans315,801 — 173 — — — — 173 
Stock-based compensation— — 17,902 — — — — 17,902 
Acquisition of treasury stock— — — — — (625,526)(57,424)(57,424)
Other comprehensive loss— — — — (11,761)— — (11,761)
Net income— — — 59,952 — — — 59,952 
Balance as of June 30, 202139,283,853 $39 $439,051 $701,331 $(86,745)(6,034,144)$(325,662)$728,014 


Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Equity
SharesAmountSharesAmount
Balance as of January 1, 202038,480,654 $39 $391,240 $551,903 $(84,892)(4,295,413)$(188,289)$670,001 
Stock issued against stock-based compensation plans337,711 — 960 — — — — 960 
Stock-based compensation— — 12,504 — — — — 12,504 
Acquisition of treasury stock— — — — — (202,366)(13,995)(13,995)
Other comprehensive loss— — — — (19,382)— — (19,382)
Net income— — — 30,840 — — — 30,840 
Balance as of June 30, 202038,818,365 $39 $404,704 $582,743 $(104,274)(4,497,779)$(202,284)$680,928 


See accompanying notes to unaudited consolidated financial statements.
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EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Six months ended June 30,
20212020
Cash flows from operating activities:
Net income$59,952 $30,840 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense24,734 24,806 
Stock-based compensation expense17,902 12,504 
Amortization of operating lease right-of-use assets13,632 13,703 
Unrealized loss / (gain) on short term investments6,777 (2,842)
Unrealized foreign exchange gain, net(2,634)(3,378)
Deferred income tax benefit(14,737)(663)
Allowance for expected credit losses(390)389 
Loss from equity-method investment28 121 
Amortization of non-cash interest expense related to convertible senior notes1,364 1,289 
Others, net144 (1,204)
Change in operating assets and liabilities:
Accounts receivable(34,152)12,380 
Prepaid expenses and other current assets189 (906)
Advance income tax, net39 4,446 
Other assets1,589 3,046 
Accounts payable(2,458)1,943 
Deferred revenue (20,832)3,066 
Accrued employee costs3,833 (23,497)
Accrued expenses and other liabilities12,290 (4,305)
Operating lease liabilities(13,327)(12,831)
Net cash provided by operating activities53,943 58,907 
Cash flows from investing activities:
Purchases of property and equipment(19,903)(22,351)
Proceeds from sale of property and equipment527 300 
Investment in equity affiliate (700)
Purchase of investments(32,987)(49,027)
Proceeds from redemption of investments64,031 72,844 
Net cash provided by investing activities11,668 1,066 
Cash flows from financing activities:
Principal payments of finance lease liabilities(107)(124)
Proceeds from borrowings25,000 110,000 
Repayments of borrowings(99,000)(110,210)
Acquisition of treasury stock(57,424)(13,995)
Proceeds from exercise of stock options174 960 
Net cash used for financing activities(131,357)(13,369)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2,237)(2,873)
Net (decrease)/increase in cash, cash equivalents and restricted cash(67,983)43,731 
Cash, cash equivalents and restricted cash at the beginning of the period225,519 127,044 
Cash, cash equivalents and restricted cash at the end of the period$157,536 $170,775 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest$3,599 $4,224 
Income taxes, net of refunds$18,710 $4,861 
Supplemental disclosure of non-cash investing and financing activities:
Assets acquired under finance lease$50 $75 

See accompanying notes to unaudited consolidated financial statements.
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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
(In thousands, except share and per share amounts)
1. 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 and affiliates (collectively, the “Company”), operates in the Business Process Management (“BPM”) industry providing operations management services and analytics services that helps its clients build and grow sustainable businesses. By orchestrating its domain expertise, data, analytics and digital technology, the Company looks deeper to design and manage agile, customer-centric operating models to improve global operations, drive profitability, enhance customer satisfaction, increase data-driven insights, and manage risk and compliance. The Company’s clients are located principally in the United States of America (“U.S.”) and the United Kingdom (“U.K.”).
2. Summary of Significant Accounting Policies
(a) Basis of Preparation and Principles of Consolidation

The unaudited consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. 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 U.S. 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, 2020.

The unaudited 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.
    
The accompanying unaudited consolidated financial statements include the financial statements of ExlService Holdings and all of its subsidiaries. The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing consolidated financial statements.

Accounting policies of the respective individual subsidiary and associate are aligned wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under U.S. GAAP.

The Company’s investments in equity affiliates are initially recorded at cost and any excess purchase consideration paid over proportionate share of the fair value of the net assets of the investee at the acquisition date is recognized as goodwill. The proportionate share of net income or loss of the investee after its acquisition is recognized in the unaudited consolidated statements of income.

(b) Use of Estimates

The preparation of the unaudited consolidated financial statements in conformity with U.S. 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 unaudited consolidated financial statements include, but are not limited to, allowance for expected credit losses, the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, and variable consideration in a customer contract, expected recoverability from customers with contingent fee arrangements,
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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
June 30, 2021
(In thousands, except share and per share amounts)
estimated costs to complete fixed price contracts, recoverability of dues from statutory authorities, assets and obligations related to employee benefit plans, deferred tax valuation allowances, income-tax uncertainties and other contingencies, valuation of derivative financial instruments, assumptions used to calculate stock-based compensation expense, assumptions used to determine the incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, lease term to calculate amortization of ROU, depreciation and amortization periods, purchase price allocation and recoverability of long-lived assets, goodwill and intangibles.

As of June 30, 2021, the extent to which the global Coronavirus Disease 2019 pandemic (“COVID-19”) will ultimately impact the Company's business depends on numerous dynamic factors, which the Company still cannot reliably predict. As a result, many of the Company's estimates and assumptions herein required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve with respect to COVID-19, the Company’s estimates may materially change in future periods. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements.

(c) Recent Accounting Pronouncements    

In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and London Inter-Bank Offered Rate (“LIBOR”). The ASU provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and are effective upon issuance for all entities through December 31, 2022. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In August 2020, FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU removes separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature and hence most of the instruments will be accounted for as a single model (either debt or equity). The ASU also states that entities must apply the if-converted method to all convertible instruments for calculation of diluted EPS and the treasury stock method is no longer available. An entity can use either a full or modified retrospective approach to adopt the ASU’s guidance. The ASU is effective for fiscal years beginning after December 15, 2021 and may be early adopted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this ASU on its consolidated financial statements.

(d) Recently Adopted Accounting Pronouncements

In December 2019, FASB issued ASU No. 2019-12, Income Taxes Simplifying the Accounting for Income Taxes. This ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company adopted this ASU on January 1, 2021. The adoption of this ASU has a minimal impact on the Company’s unaudited consolidated financial statements.

In October 2020, FASB issued ASU No. 2020-10, Codification Improvements, to provide guidance for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements. The amendments in this ASU improve the consistency of the ASC by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the disclosure section of the ASC. The Company adopted this ASU on January 1, 2021. The adoption of this ASU did not have a material impact on the Company’s unaudited consolidated financial statements.

In January 2021, Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of Topic 848 to include derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment (commonly referred to as the discounting transition). This ASU extends some of Topic 848’s optional expedients and exceptions for contract modifications and hedge accounting to derivative instruments impacted by discounting transition as a result of the discontinuation of the use of LIBOR as a benchmark interest rate due to reference rate reform. This ASU is effective immediately for all entities with the option to be applied retrospectively as of any date from the beginning of an interim period
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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
June 30, 2021
(In thousands, except share and per share amounts)
that includes or is subsequent to March 12, 2020, and prospectively to any new contract modifications made on or after January 7, 2021 through December 31, 2022. The adoption of this ASU did not have a material impact on the Company’s unaudited consolidated financial statements.
3. Segment and Geographical Information

The Company operates in the BPM industry and is a provider of operations management and analytics services.

The Company manages and reports financial information through its four strategic business units: Insurance, Healthcare, Analytics and Emerging Business. These business units develop client-specific solutions, build capabilities, maintain a unified go-to-market approach and are integrally responsible for service delivery, customer satisfaction, growth and profitability.

The chief operating decision maker (“CODM”) generally reviews financial information such as revenues, cost of revenues and gross profit, disaggregated by the operating segments to allocate an overall budget among the operating segments.

The Company does not allocate and therefore the CODM does not evaluate, certain operating expenses, interest expense or income taxes by segment. Many of the Company’s assets are shared by multiple operating segments. The Company manages these assets on a total Company basis, not by operating segment, and therefore asset information and capital expenditures by operating segment are not presented.

Revenues and cost of revenues for the three months ended June 30, 2021 and 2020, respectively, for each of the reportable segments, are as follows:
Three months ended June 30, 2021
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$94,719 $28,250 $40,690 $111,405 $275,064 
Cost of revenues(1)
59,359 17,685 22,346 71,311 170,701 
Gross profit(1)
$35,360 $10,565 $18,344 $40,094 $104,363 
Operating expenses68,533 
Foreign exchange gain, interest expense and other income, net1,048 
Income tax expense8,865 
Gain from equity-method investment8 
Net income$28,021 

(1) Exclusive of depreciation and amortization expense.
Three months ended June 30, 2020
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$81,281 $24,978 $34,535 $81,679 $222,473 
Cost of revenues(1)
59,113 19,640 22,416 57,232 158,401 
Gross profit(1)
$22,168 $5,338 $12,119 $24,447 $64,072 
Operating expenses54,206 
Foreign exchange gain, interest expense and other income, net2,701 
Income tax expense4,072 
Loss from equity-method investment66 
Net income$8,429 

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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
June 30, 2021
(In thousands, except share and per share amounts)
(1) Exclusive of depreciation and amortization expense.

Revenues and cost of revenues for the six months ended June 30, 2021 and 2020, respectively, for each of the reportable
segments, are as follows:

Six months ended June 30, 2021
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$185,879 $58,515 $78,358 $213,727 $536,479 
Cost of revenues(1)
115,452 35,076 43,190 135,804 329,522 
Gross profit(1)
$70,427 $23,439 $35,168 $77,923 $206,957 
Operating expenses129,572 
Foreign exchange gain, interest expense and other income, net418 
Income tax expense17,823 
Loss from equity-method investment28 
Net income$59,952 


(1) Exclusive of depreciation and amortization expense.

Six months ended June 30, 2020
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$165,020 $52,007 $77,326 $174,110 $468,463 
Cost of revenues(1)
118,078 39,233 47,898 115,848 321,057 
Gross profit(1)
$46,942 $12,774 $29,428 $58,262 $147,406 
Operating expenses110,053 
Foreign exchange gain, interest expense and other income, net3,535 
Income tax expense9,927 
Loss from equity-method investment121 
Net income$30,840 


(1) Exclusive of depreciation and amortization expense.

Revenues, net by service type, were as follows:
Three months ended June 30,Six months ended June 30,
2021202020212020
BPM and related services(1)
$163,659 $140,794 $322,752 $294,353 
Analytics services111,405 81,679 213,727 174,110 
Revenues, net$275,064 $222,473 $536,479 $468,463 

(1) BPM and related services include revenues of the Company's Insurance, Healthcare and Emerging Business reportable segments. Refer to the reportable segment disclosure above.
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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
June 30, 2021
(In thousands, except share and per share amounts)
The Company attributes the revenues to regions based upon the location of its customers.
 Three months ended June 30,Six months ended June 30,
 2021202020212020
Revenues, net
United States$235,288 $189,032 $459,656 $396,912 
Non-United States
United Kingdom26,175 18,830 50,926 42,108 
Rest of World13,601 14,611 25,897 29,443 
Total Non-United States39,776 33,441 76,823 71,551 
Revenues, net$275,064 $222,473 $536,479 $468,463 

Long-lived assets by geographic area, which consist of property and equipment, net and operating lease right-of-use assets were as follows:
As of
June 30, 2021December 31, 2020
Long-lived assets
India$87,234 $97,261 
United States46,965 46,659 
Philippines25,635 29,434 
Rest of World9,957 11,439 
Long-lived assets$169,791 $184,793 


4. Revenues, net

Refer to Note 3 - Segment and Geographical Information to the unaudited consolidated financial statements for revenues disaggregated by reportable segments and geography.

Contract balances
The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:
As of
June 30, 2021December 31, 2020
Accounts receivable, net$182,111 $147,635 
Contract assets$3,547 $4,437 
Contract liabilities
Deferred revenue (consideration received in advance)$10,503 $30,450 
Consideration received for process transition activities$1,966 $2,774 

Accounts receivable includes $89,237 and $63,995 as of June 30, 2021 and December 31, 2020, respectively, representing unbilled receivables. The Company has accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers and considers no significant performance risk associated with its unbilled receivables.

Contract assets represent upfront payments such as deal signing discounts or deal signing bonuses made to customers. These costs are amortized over the expected period of the benefit and are recorded as an adjustment to transaction price and
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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
June 30, 2021
(In thousands, except share and per share amounts)
reduced from revenues. The Company’s assessment did not indicate any impairment losses on its contract assets for the periods presented.

Contract liabilities represent that portion of deferred revenue for which payments have been received in advance from customers. The Company also defers revenues attributable to certain process transition activities for which costs have been capitalized by the Company as contract fulfillment costs. Consideration received from customers, if any, relating to such transition activities are classified under contract liabilities and are included within “Deferred revenues” and “Other non-current liabilities” in the unaudited consolidated balance sheets. The revenues are recognized as (or when) the performance obligation is fulfilled under the contract with customer.

Revenue recognized during the three and six months ended June 30, 2021 and 2020, which was included in the contract liabilities balance at the beginning of the respective periods:

Three months ended June 30,Six months ended June 30,
2021202020