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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 SEPTEMBER 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 October 29, 2021, there were 33,302,912 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
September 30, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$114,581 $218,530 
Short-term investments169,739 184,286 
Restricted cash6,810 4,690 
Accounts receivable, net192,170 147,635 
Prepaid expenses9,553 11,344 
Advance income tax, net19,099 5,684 
Other current assets33,223 37,109 
Total current assets545,175 609,278 
Property and equipment, net83,905 92,875 
Operating lease right-of-use assets81,324 91,918 
Restricted cash2,302 2,299 
Deferred tax assets, net26,747 7,749 
Intangible assets, net49,807 59,594 
Goodwill348,699 349,088 
Other assets27,154 32,099 
Investment in equity affiliate2,957 2,957 
Total assets$1,168,070 $1,247,857 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$2,881 $6,992 
Current portion of long-term borrowings15,000 25,000 
Deferred revenue11,866 32,649 
Accrued employee costs95,833 67,645 
Accrued expenses and other current liabilities67,926 66,410 
Current portion of operating lease liabilities18,340 18,894 
Income taxes payable, net11,080 3,488 
Total current liabilities222,926 221,078 
Long-term borrowings, less current portion170,000 201,961 
Operating lease liabilities, less current portion73,939 84,874 
Income taxes payable1,790 1,790 
Deferred tax liabilities, net901 847 
Other non-current liabilities13,529 18,135 
Total liabilities483,085 528,685 
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, 39,312,225 shares issued and 33,343,895 shares outstanding as of September 30, 2021 and 38,968,052 shares issued and 33,559,434 shares outstanding as of December 31, 2020
39 39 
Additional paid-in capital385,917 420,976 
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Retained earnings727,838 641,379 
Accumulated other comprehensive loss(92,257)(74,984)
Total including shares held in treasury1,021,537 987,410 
Less: 5,968,330 shares as of September 30, 2021 and 5,408,618 shares as of December 31, 2020, held in treasury, at cost
(336,552)(268,238)
Stockholders’ equity684,985 719,172 
Total equity684,985 719,172 
Total liabilities and stockholders’ equity $1,168,070 $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 September 30,Nine months ended September 30,
2021202020212020
Revenues, net$290,325 $241,018 $826,804 $709,481 
Cost of revenues(1)
177,743 152,087 507,265 473,144 
Gross profit(1)
112,582 88,931 319,539 236,337 
Operating expenses:
General and administrative expenses36,167 26,810 103,369 84,501 
Selling and marketing expenses21,672 15,290 59,631 42,797 
Depreciation and amortization expense12,305 12,425 36,716 37,280 
Total operating expenses70,144 54,525 199,716 164,578 
Income from operations42,438 34,406 119,823 71,759 
Foreign exchange gain, net1,171 716 2,958 3,452 
Interest expense(1,810)(2,628)(6,804)(8,583)
Other income, net1,721 2,485 5,346 9,239 
Loss on settlement of convertible notes(12,845) (12,845) 
Income before income tax expense and earnings from equity affiliates30,675 34,979 108,478 75,867 
Income tax expense4,196 8,490 22,019 18,416 
Income before earnings from equity affiliates26,479 26,489 86,459 57,451 
Gain / (loss) from equity-method investment28 (71) (193)
Net income attributable to ExlService Holdings, Inc. stockholders$26,507 $26,418 $86,459 $57,258 
Earnings per share attributable to ExlService Holdings, Inc. stockholders:
Basic$0.79 $0.77 $2.57 $1.66 
Diluted$0.77 $0.76 $2.52 $1.65 
Weighted-average number of shares used in computing earnings per share attributable to ExlService Holdings Inc. stockholders:
Basic33,449,311 34,327,47733,583,791 34,404,798
Diluted34,305,893 34,536,04934,336,950 34,617,830

(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 September 30,Nine months ended September 30,
2021202020212020
Net income$26,507 $26,418 $86,459 $57,258 
 Other comprehensive income/(loss):
Unrealized gain/(loss) on cash flow hedges261 12,165 (42)5,040 
Loss on net investment hedges  (1,134) 
Foreign currency translation gain/(loss)(3,789)11,315 (10,475)(7,983)
Reclassification adjustments
(Gain)/loss on cash flow hedges(1)
(2,150)435 (7,845)633 
Retirement benefits(2)
178 98 533 296 
Income tax effects relating to above(3)
(12)(4,956)1,690 1,689 
  Total other comprehensive income/(loss)$(5,512)$19,057 $(17,273)$(325)
Total comprehensive income$20,995 $45,475 $69,186 $56,933 


(1)These are reclassified to net income and are included in cost of revenues and 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 September 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 June 30, 202139,283,853 $39 $439,051 $701,331 $(86,745)(6,034,144)$(325,662)$728,014 
Stock issued against stock-based compensation plans28,372 — 536 — — — — 536 
Stock-based compensation— — 10,894 — — — — 10,894 
Acquisition of treasury stock— — — — — (244,580)(28,196)(28,196)
Issuance of treasury stock— — 19,436 — — 310,394 17,306 36,742 
Settlement of convertible notes— — (84,000)— — — — (84,000)
Other comprehensive loss— — — — (5,512)— — (5,512)
Net income— — — 26,507 — — — 26,507 
Balance as of September 30, 202139,312,225 $39 $385,917 $727,838 $(92,257)(5,968,330)$(336,552)$684,985 


Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Equity
SharesAmountSharesAmount
Balance as of June 30, 202038,818,365 $39 $404,704 $582,743 $(104,274)(4,497,779)$(202,284)$680,928 
Stock issued against stock-based compensation plans22,525 — 85 — — — — 85 
Stock-based compensation— — 8,346 — — — — 8,346 
Acquisition of treasury stock— — — — — (389,575)(24,906)(24,906)
Other comprehensive income— — — — 19,057 — — 19,057 
Net income— — — 26,418 — — — 26,418 
Balance as of September 30, 202038,840,890 $39 $413,135 $609,161 $(85,217)(4,887,354)$(227,190)$709,928 
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EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
For the nine months ended September 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 plans344,173 — 709 — — — — 709 
Stock-based compensation— — 28,796 — — — — 28,796 
Acquisition of treasury stock— — — — — (870,106)(85,620)(85,620)
Issuance of treasury stock— — 19,436 — — 310,394 17,306 36,742 
Settlement of convertible notes— — (84,000)— — — — (84,000)
Other comprehensive loss— — — — (17,273)— — (17,273)
Net income— — — 86,459 — — — 86,459 
Balance as of September 30, 202139,312,225 $39 $385,917 $727,838 $(92,257)(5,968,330)$(336,552)$684,985 


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 plans360,236 — 1,045 — — — — 1,045 
Stock-based compensation— — 20,850 — — — — 20,850 
Acquisition of treasury stock— — — — — (591,941)(38,901)(38,901)
Other comprehensive loss— — — — (325)— — (325)
Net income— — — 57,258 — — — 57,258 
Balance as of September 30, 202038,840,890 $39 $413,135 $609,161 $(85,217)(4,887,354)$(227,190)$709,928 


See accompanying notes to unaudited consolidated financial statements.
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EXLSERVICE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Nine months ended September 30,
20212020
Cash flows from operating activities:
Net income$86,459 $57,258 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense37,159 37,249 
Stock-based compensation expense28,796 20,850 
Amortization of operating lease right-of-use assets20,012 20,484 
Unrealized (gain) / loss on short term investments5,987 (4,807)
Unrealized foreign exchange gain, net(3,799)(484)
Deferred income tax benefit(17,374)(1,572)
Allowance / (reversal) for expected credit losses(405)353 
Loss on settlement of convertible notes12,845  
Loss from equity-method investment 193 
Amortization of non-cash interest expense related to convertible notes1,795 1,943 
Others, net590 (935)
Change in operating assets and liabilities:
Accounts receivable(44,871)16,078 
Prepaid expenses and other current assets3,033 1,797 
Advance income tax, net(5,685)7,001 
Other assets2,485 3,096 
Accounts payable(2,333)(490)
Deferred revenue (21,196)295 
Accrued employee costs26,664 (11,854)
Accrued expenses and other liabilities3,254 (361)
Operating lease liabilities(19,654)(19,780)
Net cash provided by operating activities113,762 126,314 
Cash flows from investing activities:
Purchases of property and equipment(29,026)(34,614)
Proceeds from sale of property and equipment825 624 
Investment in equity affiliate (700)
Purchase of investments(76,500)(57,965)
Proceeds from redemption of investments83,183 103,718 
Net cash (used for)/provided by investing activities(21,518)11,063 
Cash flows from financing activities:
Principal payments of finance lease liabilities(157)(180)
Proceeds from borrowings225,000 110,000 
Repayments of borrowings(329,000)(120,393)
Acquisition of treasury stock(85,620)(38,901)
Proceeds from exercise of stock options710 1,045 
Net cash used for financing activities(189,067)(48,429)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(5,003)20 
Net (decrease)/increase in cash, cash equivalents and restricted cash(101,826)88,968 
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$123,693 $216,012 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest$5,833 $4,627 
Income taxes, net of refunds$31,087 $11,434 
Supplemental disclosure of non-cash investing and financing activities:
Settlement of portion of convertible notes through issuance of treasury stock$36,742 $ 
Assets acquired under finance lease$79 $90 
See accompanying notes to unaudited consolidated financial statements.
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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 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”), is a global analytics and digital solutions company that partners with clients to improve business outcomes and unlock growth. Bringing together deep domain expertise with robust data, powerful analytics, cloud, and AI, the Company creates agile, scalable solutions and executes complex operations for the world’s leading corporations in industries including insurance, healthcare, banking and financial services, media, and retail, among others. 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)
September 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 September 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, Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“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.


(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 did not have a material 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, FASB issued 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 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 Business Process Management (“BPM”) industry and is a provider of operations management and analytics services.
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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
September 30, 2021
(In thousands, except share and per share amounts)

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 September 30, 2021 and 2020, respectively, for each of the reportable segments, are as follows:
Three months ended September 30, 2021
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$98,008 $27,341 $44,513 $120,463 $290,325 
Cost of revenues(1)
61,490 17,057 23,660 75,536 177,743 
Gross profit(1)
$36,518 $10,284 $20,853 $44,927 $112,582 
Operating expenses70,144 
Loss on settlement of convertible notes, foreign exchange gain, interest expense and other income, net(11,763)
Income tax expense4,196 
Gain from equity-method investment28 
Net income$26,507 

(1) Exclusive of depreciation and amortization expense.
Three months ended September 30, 2020
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$87,830 $25,112 $37,577 $90,499 $241,018 
Cost of revenues(1)
56,831 17,993 20,792 56,471 152,087 
Gross profit(1)
$30,999 $7,119 $16,785 $34,028 $88,931 
Operating expenses54,525 
Foreign exchange gain, interest expense and other income, net573 
Income tax expense8,490 
Loss from equity-method investment71 
Net income$26,418 

(1) Exclusive of depreciation and amortization expense.

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

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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
September 30, 2021
(In thousands, except share and per share amounts)
Nine months ended September 30, 2021
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$283,887 $85,856 $122,871 $334,190 $826,804 
Cost of revenues(1)
176,942 52,133 66,850 211,340 507,265 
Gross profit(1)
$106,945 $33,723 $56,021 $122,850 $319,539 
Operating expenses199,716 
Loss on settlement of convertible notes, foreign exchange gain, interest expense and other income, net(11,345)
Income tax expense22,019 
Gain / (loss) from equity-method investment 
Net income$86,459 

(1) Exclusive of depreciation and amortization expense.

Nine months ended September 30, 2020
InsuranceHealthcareEmerging BusinessAnalyticsTotal
Revenues, net$252,851 $77,119 $114,902 $264,609 $709,481 
Cost of revenues(1)
174,909 57,226 68,689 172,320 473,144 
Gross profit(1)
$77,942 $19,893 $46,213 $92,289 $236,337 
Operating expenses164,578 
Foreign exchange gain, interest expense and other income, net4,108 
Income tax expense18,416 
Loss from equity-method investment193 
Net income$57,258 

(1) Exclusive of depreciation and amortization expense.

Revenues, net by service type, were as follows:
Three months ended September 30,Nine months ended September 30,
2021202020212020
BPM and related services(1)
$169,862 $150,519 $492,614 $444,872 
Analytics services120,463 90,499 334,190 264,609 
Revenues, net$290,325 $241,018 $826,804 $709,481 

(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.
The Company attributes the revenues to regions based upon the location of its customers.

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EXLSERVICE HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
September 30, 2021
(In thousands, except share and per share amounts)
 Three months ended September 30,Nine months ended September 30,
 2021202020212020
Revenues, net
United States$249,726 $203,928 $709,382 $600,840 
Non-United States
United Kingdom27,433 22,903 78,359 65,011 
Rest of World13,166 14,187 39,063 43,630 
Total Non-United States40,599 37,090 117,422