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Genpact Reports Third Quarter 2024 Results

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Total Revenue of $1.21 billion, Up 7% (7% constant currency)1

Diluted EPS of $0.74, Up 16%; Adjusted Diluted EPS2 of $0.85, Up 12%

NEW YORK, Nov. 7, 2024 /PRNewswire/ — Genpact Limited (NYSE: G), a global professional services and solutions firm delivering outcomes that shape the future, today announced financial results for the third quarter ended September 30, 2024.

“We delivered strong results again this quarter, with accelerating revenue growth, driven primarily by client trust in our ability to innovate across Data, Tech and AI. As a result, we are increasing guidance with 6% revenue growth now expected in 2024, up from 2% in the prior year with continued discipline driving adjusted EPS growth faster than revenue for the fourth year in a row,” said Balkrishan “BK” Kalra, Genpact’s President and CEO. “Our recent AI Day was another important milestone, bringing together more than 100 clients and partners to demonstrate our unique combination of data, domain, and advanced technologies, including AI. Moving forward, we will build on this strong foundation, leveraging gen AI and other advanced technologies to drive superior value for clients.”

Key Financial Highlights – Third Quarter 2024

Total revenue was $1.21 billion, up 7% year-over-year, both on an as reported and constant currency basis.1Data-Tech-AI revenue was $569 million, up 9% year-over-year, both on an as reported and constant currency basis,1 representing 47% of total revenue.3Digital Operations revenue was $642 million, up 5% year-over-year, both on an as reported and constant currency basis,1 representing 53% of total revenue.3Gross profit was $431 million, up 7% year-over-year, with a corresponding margin of 35.6%.Net income was $133 million, up 13% year-over-year, with a corresponding margin of 11%.Income from operations was $182 million, up 10% year-over-year, with a corresponding margin of 15%.Adjusted income from operations was $213 million, up 9% year-over-year, with a corresponding margin of 17.6%.4Diluted earnings per share was $0.74, up 16% year-over-year.Adjusted diluted earnings per share2 was $0.85, up 12% year-over-year.Cash flow from operations was $228 million, up from $162 million in the third quarter of 2023.Genpact repurchased approximately 1.9 million common shares during the quarter for total consideration of approximately $75 million at an average price per share of $38.72.

Outlook

Genpact’s outlook for the fourth quarter of 2024 is as follows:

Total revenue in the range of $1.222 billion to $1.233 billion, representing year-over-year growth of approximately 6.6% to 7.6% as reported, or 5.8% to 6.8% on a constant currency basis.1Digital Operations revenue growth of approximately 5.4% year-over-year and Data-Tech-AI revenue growth of approximately 9.0% year-over-year at the midpoint of the range, as reported.Digital Operations revenue growth of approximately 4.0% year-over-year and Data-Tech-AI revenue growth of approximately 9.0% year-over-year at the midpoint of the range, on a constant currency basis.1Gross margin of approximately 35.6%.Adjusted income from operations margin5 of approximately 17.6%.Genpact’s updated outlook for the full year 2024 is as follows:Total revenue in the range of $4.740 billion to $4.751 billion, representing year-over-year growth of approximately 5.9% to 6.1% as reported, or 6.0% to 6.2% on a constant currency basis,1 up from the prior guidance of approximately 4.0% to 5.0% as reported.Digital Operations revenue growth of approximately 5.9% year-over-year and Data-Tech-AI revenue growth of approximately 6.2% year-over-year at the midpoint of the range, as reported, up from the previous midpoints of 5.2% and 3.8%, respectively.Digital Operations revenue growth of approximately 6.0% year-over-year and Data-Tech-AI revenue growth of approximately 6.2% year-over-year at the midpoint of the range, on a constant currency basis,1 up from the previous midpoints of 5.5% and 3.9%, respectively.Gross margin of approximately 35.4%, up from 35.3%.Adjusted income from operations margin5 of approximately 17.1%, up from 17.0%.Adjusted diluted EPS6 in the range of $3.23 to $3.24, up from the prior range of $3.14 to $3.18.

 

1

Revenue growth on a constant currency basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates adjusted for hedging gains/losses in such period.

2

Adjusted diluted earnings per share is a non-GAAP measure. A reconciliation of GAAP diluted earnings per share to adjusted diluted earnings per share is attached to this release.

3

Genpact updated the classification of certain service revenues from Digital Operations to Data-Tech-AI in the quarter ended March 31, 2024 to more accurately reflect the nature of, and mode of delivery for, the services provided, which have evolved over time. As a result, the revenue from Digital Operations and Data-Tech-AI for the third quarter of 2023 originally reported was $636 million and $500 million, respectively, which is $612 million and $523 million, respectively, in accordance with the updated classification.

4

Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. Reconciliations of each of GAAP income from operations and GAAP net income to adjusted income from operations and GAAP income from operations margin and GAAP net income margin to adjusted income from operations margin are attached to this release.

5

Adjusted income from operations margin is a non-GAAP measure. A reconciliation of the outlook for each of GAAP income from operations margin and GAAP net income margin to adjusted income from operations margin is attached to this release.

6

Adjusted diluted earnings per share is a non-GAAP measure. A reconciliation of the outlook for GAAP diluted earnings per share to adjusted diluted earnings per share is attached to this release.

 

Third Quarter 2024 Earnings Call

Genpact’s management will host a conference call on November 7, 2024, at 5:00PM ET to discuss the company’s performance for the third quarter ended September 30, 2024. Participants are encouraged to register here to receive a dial-in number and unique PIN for seamless access. It is recommended to join 10 minutes before the call starts, although registration and dial-in will be available at any time.  A live webcast will be available on the Genpact Investor Relations website. For those unable to attend the live call, an archived replay and transcript will be available on the website shortly after the call.

About Genpact

Genpact (NYSE: G) is a global professional services and solutions firm delivering outcomes that shape the future. Our 125,000+ people across 30+ countries are driven by our innate curiosity, entrepreneurial agility, and desire to create lasting value for clients. Powered by our purpose – the relentless pursuit of a world that works better for people – we serve and transform leading enterprises, including the Fortune Global 500, with our deep business and industry knowledge, digital operations services, and expertise in data, technology, and AI.

Safe Harbor

This press release contains certain statements concerning our future growth prospects, including our outlook for 2024, financial results 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 other factors that could cause actual results to differ materially from those in such forward-looking statements. These risks, uncertainties, and other factors include but are not limited to macroeconomic uncertainty and general economic conditions, any deterioration in the global economic environment and its impact on our clients, our ability to manage our CEO transition and retain senior management, technological innovation, including AI technology and future uses of generative AI and large language models, and our ability to invest in new technologies and adapt to industry developments at sufficient speed and scale, our ability to develop and successfully execute our business strategies, our ability to effectively price our services and maintain pricing and employee utilization rates, general inflationary pressures and our ability to share increased costs with our clients, wage increases in locations in which we have operations, our ability to attract and retain skilled professionals, our ability to protect our and our clients’ data from security incidents or cyberattacks, the economic and other impacts of geopolitical conflicts and any related sanctions and other measures that have been or may be implemented or imposed in response thereto, as well as any potential expansion or escalation of existing conflicts or economic disruption beyond their current scope, a slowdown in the economies and sectors in which our clients operate, a slowdown in the sectors in which we operate, the risks and uncertainties arising from our past and future acquisitions or divestitures, our ability to convert bookings to revenues, our ability to manage growth, factors which may impact our cost advantage, changes in tax rates and tax legislation and other laws and regulations, our ability to effectively execute our tax planning strategies, risks and uncertainties regarding fluctuations in our earnings, foreign currency fluctuations, political, economic or business conditions in countries in which we operate, as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission, including Genpact’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. These filings are available at www.sec.gov. Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. Although Genpact believes 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. Genpact undertakes no obligation to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.

Contacts

Investors

Tyra Whelton

 +1 (908) 418-2995

tyra.whelton@genpact.com

Media

Siya Belliappa

 +1 (718) 561-9843

siya.belliappa@genpact.com

 

GENPACT LIMITED AND ITS SUBSIDIARIES

 

Consolidated Balance Sheets

(Unaudited)

 (In thousands, except per share data and share count)

As of December 31,
2023

As of September 30,
2024

Assets

Current assets

Cash and cash equivalents

$                          583,670

$                     1,022,647

Accounts receivable, net of allowance for credit losses of $18,278

and $14,833 as of December 31, 2023 and September 30, 2024,

respectively

1,116,273

1,214,098

Prepaid expenses and other current assets

191,566

164,064

Total current assets

$                   1,891,509

$               2,400,809

Property, plant and equipment, net

189,803

207,592

Operating lease right-of-use assets

186,167

185,666

Deferred tax assets

298,921

288,773

Intangible assets, net

53,028

33,337

Goodwill

1,683,782

1,683,053

Contract cost assets

202,543

200,440

Other assets, net of allowance for credit losses of $4,096 and $6,440 as of

December 31, 2023 and September 30, 2024, respectively

299,960

325,990

Total assets

$                   4,805,713

$                5,325,660

Liabilities and equity

Current liabilities

Short-term borrowings

$                            10,000

Current portion of long-term debt

432,242

426,069

Accounts payable

27,739

18,513

Income taxes payable

38,458

52,793

Accrued expenses and other current liabilities

759,180

747,489

Operating leases liability

50,313

49,865

Total current liabilities

$                    1,317,932

$                 1,294,729

Long-term debt, less current portion

824,720

1,201,439

Operating leases liability

168,015

162,004

Deferred tax liabilities

11,706

11,577

Other liabilities

234,948

261,218

Total liabilities

$                    2,557,321

$                2,930,967

Shareholders’ equity

Preferred shares, $0.01 par value, 250,000,000 authorized, none issued

Common shares, $0.01 par value, 500,000,000 authorized, 179,494,132

and 176,347,167 issued and outstanding as of December 31, 2023 and

September 30, 2024, respectively

1,789

1,758

Additional paid-in capital

1,883,944

1,922,042

Retained earnings

1,085,209

1,207,387

Accumulated other comprehensive income (loss)

(722,550)

(736,494)

Total equity

$                  2,248,392

$                2,394,693

Total liabilities and equity

$                   4,805,713

$                5,325,660

 

GENPACT LIMITED AND ITS SUBSIDIARIES

 

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data and share count)

 

Three months ended September 30,

Nine months ended September 30,

2023

2024

2023

2024

Net revenues

$               1,135,792

$              1,210,949

$              3,330,635

$              3,518,398

Cost of revenue

732,962

779,511

2,167,524

2,274,104

Gross profit

$              402,830

$              431,438

$             1,163,111

$          1,244,294

Operating expenses:

Selling, general and administrative expenses

229,731

243,315

675,642

717,988

Amortization of acquired intangible assets

7,497

6,495

24,009

19,980

Other operating (income) expense, net

(91)

(22)

(4,665)

(5,561)

Income from operations

$               165,693

$              181,650

$              468,125

$               511,887

Foreign exchange gains, net

2,975

1,133

3,698

4,424

Interest income (expense), net

(13,255)

(12,387)

(35,020)

(36,167)

Other income (expense), net

(508)

5,091

6,947

14,128

Income before income tax expense

$               154,905

$               175,487

$              443,750

$              494,272

Income tax expense

37,312

42,669

103,804

122,517

Net income

$               117,593

$              132,818

$             339,946

$               371,755

Earnings per common share

Basic

$                      0.65

$                       0.75

$                       1.86

$                       2.07

Diluted

$                      0.64

$                       0.74

$                       1.83

$                      2.06

Weighted average number of common shares used in
computing earnings per common share

Basic

181,399,897

177,595,400

182,808,518

179,221,213

Diluted

183,801,791

179,714,223

185,737,729

180,854,682

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Nine months ended September 30,

2023

2024

Operating activities

Net income

$                 339,946

$                   371,755

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

54,410

51,830

Amortization of debt issuance costs

1,473

1,749

Amortization of acquired intangible assets

24,009

19,980

Loss on the sale of the business classified as held for sale

802

Allowance for credit losses

5,081

12,395

Unrealized gain (loss) on revaluation of foreign currency assets/liabilities

1,283

(7,909)

Stock-based compensation expense

63,850

47,276

Deferred tax (benefit) expense

(7,092)

14,509

Others, net

1,512

386

Change in operating assets and liabilities:

    Increase in accounts receivable

(73,400)

(95,790)

    Increase in prepaid expenses, other current assets, contract cost assets, operating lease
    right-of-use assets and other assets

(110,227)

(5,752)

    Decrease in accounts payable

(9,196)

(8,021)

    Decrease in accrued expenses, other current liabilities, operating lease liabilities and other liabilities

(80,694)

(5,056)

    Increase in income taxes payable

87,149

14,825

Net cash provided by operating activities

$               298,906

$                 412,177

Investing activities

Purchase of property, plant and equipment

(37,330)

(63,049)

Payment for internally generated intangible assets (including intangibles under development)

(2,569)

(1,787)

Proceeds from sale of property, plant and equipment

21

128

Payment for business acquisitions, net of cash acquired

(682)

Payment for divestiture of business

(19,510)

Net cash used for investing activities

$               (60,070)

$                (64,708)

Financing activities

Repayment of finance lease obligations

(9,168)

(8,238)

Payment of debt issuance and refinancing costs

(4,123)

Proceeds of long-term debt

400,000

Repayment of long-term debt

(19,875)

(26,500)

Proceeds from short-term borrowings

148,000

50,000

Repayment of short-term borrowings

(244,000)

(60,000)

Proceeds from issuance of common shares under stock-based compensation plans

34,638

12,170

Payment for net settlement of stock-based awards

(19,687)

(21,307)

Payment of earn-out consideration

(2,399)

Dividend paid

(75,230)

(81,768)

Payment for stock repurchased and retired (including expenses related to stock repurchase)

(150,548)

(167,656)

Net cash (used for) provided by financing activities

$             (338,269)

$                  92,578

Net (decrease) increase in cash and cash equivalents

(99,433)

440,047

Effect of exchange rate changes

(6,328)

(1,070)

Cash and cash equivalents at the beginning of the period

646,765

583,670

Cash and cash equivalents at the end of the period

$                541,004

$             1,022,647

Supplementary information

Cash paid during the period for interest

$                     31,551

$                    39,180

Cash paid during the period for income taxes, net of refund

$                  123,395

$                    77,983

 

Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following non-GAAP financial measures:

Adjusted income from operations;Adjusted income from operations margin;Adjusted diluted earnings per share; andRevenue growth on a constant currency basis.

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.

During the second quarter of 2022, Genpact approved a plan to divest a business that was no longer deemed strategic. Given the specialized nature of this business, we anticipated completing a transaction within twelve months after the end of the second quarter of 2022, and therefore, we classified the revenues and expenses related to this business as held for sale with effect from April 1, 2022. During the first quarter of 2023, the Company consummated this transaction and recorded a loss on the sale of the business.  During the second quarter of 2023, the Company terminated a lease for office property which was fully impaired as part of a restructuring in the second quarter of 2022 and recorded a gain on such lease termination as restructuring income in the second quarter of 2023. Genpact’s management believes that excluding the loss on the sale of, and the revenues and expenses associated with, the business previously designated as held for sale and the gain on the lease termination in calculating its non-GAAP financial measures provides useful information to both management and investors regarding the Company’s financial performance and underlying business trends. 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, and certain gains 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 and impairment 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.

Genpact’s management provides information about revenues on a constant currency basis so that the revenues may be viewed without the impact of foreign currency exchange rate fluctuations compared to prior fiscal periods, thereby facilitating period-to-period comparisons of the Company’s true business performance. Revenue growth on a constant currency basis is calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates adjusted for hedging gains/losses in such period.

Accordingly, Genpact believes that the presentation of adjusted income from operations, adjusted income from operations margin, adjusted diluted earnings per share and revenue growth on a constant currency basis, 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 and adjusted income from operations margin 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 and amortization and impairment of acquired intangible assets. Management compensates for this limitation by providing specific information on the GAAP amounts excluded from adjusted income from operations and adjusted income from operations margin.

The following tables show the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures for the three months and nine months ended September 30, 2023 and 2024:

Reconciliation of Net Income/Margin to Adjusted Income from Operations/Margin

(In thousands)

Three months ended
September 30,

Nine months ended
September 30,

2023

2024

2023

2024

Net income

$        117,593

$        132,818

$       339,946

$        371,755

Foreign exchange (gains), net

(2,975)

(1,133)

(3,698)

(4,424)

Interest (income) expense, net

13,255

12,387

35,020

36,167

Income tax expense

37,312

42,669

103,804

122,517

Stock-based compensation expense

22,314

19,726

63,850

47,276

Amortization and impairment of acquired intangible assets

7,495

6,494

23,895

19,963

Restructuring (income) expense

(4,874)

Operating loss from the business classified as held for sale

1,201

Loss on the sale of the business classified as held for sale

802

Adjusted income from operations

$     194,994

$      212,961

$     559,946

$     593,254

Net income margin

10.4 %

11.0 %

10.2 %

10.6 %

Adjusted income from operations margin

17.2 %

17.6 %

16.8 %

16.9 %

 

Reconciliation of Income from Operations/Margin to Adjusted Income from Operations/Margin

(In thousands)

Three months ended
September 30,

Nine months ended
September 30,

2023

2024

2023

2024

Income from operations

$        165,693

$        181,650

$       468,125

$        511,887

Stock-based compensation expense

22,314

19,726

63,850

47,276

Amortization and impairment of acquired intangible assets

7,495

6,494

23,895

19,963

Other income (expense), net

(508)

5,091

6,947

14,128

Restructuring (income) expense

(4,874)

Operating loss from the business classified as held for sale

1,201

Loss on the sale of the business classified as held for sale

802

Adjusted income from operations

$     194,994

$      212,961

$     559,946

$     593,254

Income from operations margin

14.6 %

15.0 %

14.1 %

14.5 %

Adjusted income from operations margin

17.2 %

17.6 %

16.8 %

16.9 %

 

Reconciliation of Diluted EPS to Adjusted Diluted EPS7

(Per share data) 

Three months ended
September 30,

Nine months ended
September 30,

2023

2024

2023

2024

Diluted EPS

$      0.64

$      0.74

$       1.83

$      2.06

Stock-based compensation expense

0.12

0.11

0.34

0.26

Amortization and impairment of acquired intangible assets

0.04

0.04

0.13

0.11

Restructuring (income) expense

(0.03)

Operating loss from the business classified as held for sale

0.01

Loss on the sale of the business classified as held for sale

Tax impact on stock-based compensation expense

(0.03)

(0.02)

(0.10)

(0.03)

Tax impact on amortization and impairment of acquired intangible assets

(0.01)

(0.01)

(0.03)

(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 loss on the sale of the business classified as held for sale

Adjusted diluted EPS

$      0.76

$      0.85

$       2.16

$       2.37

7

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

 

The following tables show the reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures for the year ending December 31, 2024:

Reconciliation of Outlook for Net Income Margin to Adjusted Income from Operations Margin8

Year ending December 31, 2024

Net income margin

10.6 %

Estimated interest (income) expense, net

1.1 %

Estimated income tax expense

3.4 %

Foreign exchange (gains), net

(0.1) %

Estimated stock-based compensation expense

1.4 %

Estimated amortization and impairment of acquired intangible assets

0.6 %

Adjusted income from operations margin

17.1 %

 

Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from

Operations Margin8

Year ending December 31, 2024

Income from operations margin

14.6 %

Estimated stock-based compensation expense

1.4 %

Estimated amortization and impairment of acquired intangible assets

0.6 %

Estimated other income (expense), net

0.5 %

Adjusted income from operations margin

17.1 %

 

Reconciliation of Outlook for Diluted EPS to Adjusted Diluted EPS8

(Per share data)

Year ending December 31, 2024

Lower

Upper

Diluted EPS

$               2.80

$                2.81

Estimated stock-based compensation expense

0.38

0.38

Estimated amortization and impairment of acquired intangible assets

0.15

0.15

Estimated tax impact on stock-based compensation expense

(0.05)

(0.05)

Estimated tax impact on amortization and impairment of acquired intangible assets

(0.04)

(0.04)

Adjusted diluted EPS

$                3.23

$                3.24

8

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

 

The following tables show the reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures for the quarter ending December 31, 2024:

Reconciliation of Outlook for Net Income Margin to Adjusted Income from Operations Margin9

Quarter ending December 31, 2024

Net income margin

10.7 %

Estimated interest (income) expense, net

1.3 %

Estimated income tax expense

3.3 %

Estimated stock-based compensation expense

1.7 %

Estimated amortization and impairment of acquired intangible assets

0.5 %

Adjusted income from operations margin

17.6 %

 

Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from

Operations Margin9

Quarter ending December 31, 2024

Income from operations margin

14.9 %

Estimated stock-based compensation expense

1.7 %

Estimated amortization and impairment of acquired intangible assets

0.5 %

Estimated other income (expense), net

0.4 %

Adjusted income from operations margin

17.6 %

9

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

 

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Two Schools, One Vision: XCL World Academy and XCL American Academy to Merge

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SINGAPORE, Nov. 8, 2024 /PRNewswire/ — XCL Education Group today announced the merger of XCL American Academy into XCL World Academy in August 2025, creating a single, unified campus dedicated to providing an exceptional learning environment that fosters diversity, academic excellence, and personal growth for all students.

This will bring together the strengths of both schools, their innovative learning spaces, and experienced educators. Students will benefit from an enriched learning environment that seamlessly integrates the best of both worlds: the renowned IB program, along with the strong academic foundation provided by the American AERO standards.

“Following careful consideration and extensive consultation, we have made the strategic decision to merge XCL American Academy into XCL World Academy, to create an even stronger and cohesive learning environment for our students,” said Gilles Mahe, CEO of XCL Education Group. “This merger will allow us to better leverage our facilities and resources, for all our students.”

XCL also announced the launch of the new Innovation Hub earlier this year. The state-of-the-art multi-level building is purpose-designed to enhance the learning environment with the latest technology and specialized labs for students. The Innovation Hub is designed to be environmentally friendly and with sustainability at the forefront of design. The building includes clean air filtration in all learning spaces and home to a digital multimedia lab, specialist labs, and a multi-use esports arena.

“The $80 million investment in the Innovation Hub and other facilities at our campus in Singapore is a testament to our commitment to providing our students with the best possible learning environment,” said Mahe. “These facilities will provide our students with the opportunity to learn and grow in a world-class setting.”

“We are confident that this merger will deliver the best possible outcomes for every XCL student in Singapore,” said Mahe. “We look forward to welcoming all of our students to the unified campus in August 2025.”

About XCL Education Group
XCL Education is one of the largest, fastest growing K-12 education platforms in Southeast Asia. Headquartered in Singapore, it serves over 20,000 students across 17 K-12 campuses and 45 Preschools in Malaysia, Singapore, Thailand, and Vietnam.  XCL Education aspires to be a trusted and respected future-focused family of schools, fostering curiosity, excellence, and creating life-shaping impact on our students, staff, and communities we serve.  To learn more, visit XCL Education.  

About XCL World Academy
XCL World Academy is a premium international school in Singapore, offering a rigorous academic program for students aged 2 to 18 years. The school is authorized to offer the International Baccalaureate (IB) Primary Years Programme (PYP), Middle Years Programme (MYP), and Diploma Programme (DP). XCL World Academy is committed to providing a holistic education that develops students’ intellectual, social, emotional, and physical well-being.

About XCL American Academy
XCL American Academy is an international school in Singapore, offering high-quality, rigorous, and accessible American education for children aged 4 – 14 years.

 

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Sabre Corporation Announces Exchange Offers by Sabre GLBL Inc. for Certain Senior Secured Debt Securities

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SOUTHLAKE, Texas, Nov. 7, 2024 /PRNewswire/ — Sabre Corporation (“Sabre”) today announced that Sabre GLBL Inc. (“Sabre GLBL”), a wholly-owned subsidiary of Sabre, has commenced exchange offers (each, an “Exchange Offer” and together, the “Exchange Offers”) to exchange certain of its outstanding 11.250% Senior Secured Notes due 2027 (the “December 2027 Notes”) and 8.625% Senior Secured Notes due 2027 (the “June 2027 Notes” and, together with the December 2027 Notes, the “Existing Notes” and each of them a “series” of Existing Notes) for up to $500 million (as such amount may be amended by Sabre GLBL in its sole discretion, the “Maximum Exchange Amount”) in aggregate principal amount of Sabre GLBL’s new 10.750% Senior Secured Notes due 2029 (the “New Notes” and together with the Existing Notes, the “Securities”), upon the terms and subject to the conditions described in the confidential offering circular, dated as of November 7, 2024, for the Exchange Offers (as it may be amended or supplemented, the “Offering Circular”). The primary purpose of the Exchange Offers is to improve the Company’s maturity profile by extending the maturity date of the indebtedness represented by the Existing Notes from 2027 to 2029.

The aggregate principal amount of New Notes to be issued pursuant to the Exchange Offers is subject to a minimum principal amount of $250 million (the “New Notes Issuance Minimum”).

In addition, the principal amount of each series of Existing Notes that is accepted pursuant to the Exchange Offers will be subject to the “Acceptance Priority Level” (in numerical priority order), as set forth in the table below and as further described in the Offering Circular.

The following table summarizes certain terms of the Exchange Offers:

CUSIP No./ ISIN

Title of
Security

Principal
Amount
Outstanding

Acceptance
Priority
Level(1)

Exchange
Consideration(2)

Early Exchange
Premium(2)(3)

Total Exchange
Consideration(1)(2)(3)

CUSIP: 78573NAH5 (144A);
U86043AF0 (Reg. S) / ISIN:
US78573NAH52 (144A);
USU86043AF04 (Reg. S)           

11.250%
Senior
Secured Notes
due 2027

$555,000,000

1

$1,000.00 principal
amount of New Notes

$82.50 principal
amount of New
Notes

$1,082.50 principal
amount of New Notes

CUSIP: 78573NAJ1 (144A);
U86043AG8 (Reg. S) / ISIN:
US78573NAJ19 (144A);
USU86043AG86 (Reg. S)

8.625%
Senior
Secured Notes
due 2027

$903,077,000

2

$930.00 principal
amount of New Notes

$82.50 principal
amount of New
Notes

$1,012.50 principal
amount of New Notes

(1)   Acceptance of the Existing Notes is subject to the Acceptance Priority Level as described below.

(2)   For each $1,000 principal amount of Existing Notes.

(3)   Includes Early Exchange Premium.

If the aggregate principal amount of Existing Notes validly tendered on or before the Early Exchange Date (as defined below) constitutes a principal amount of Existing Notes that, if accepted by the Company, would result in issuing New Notes having an aggregate principal amount equal to or in excess of the Maximum Exchange Amount, the Company will not accept any Existing Notes tendered for exchange after the Early Exchange Date (even if they are of Acceptance Priority Level 1).  If acceptance of all validly tendered Existing Notes of a series on the Early Exchange Date or the Expiration Date (as defined below), as applicable, would result in the Company issuing New Notes having an aggregate principal amount in excess of the Maximum Exchange Amount, the tendered Existing Notes of such series will be accepted on a pro rata basis as described in the Offering Circular. On each settlement date, Existing Notes of a series having a higher Acceptance Priority Level will be accepted for exchange before any Existing Notes of a series having a lower Acceptance Priority Level. For the avoidance of doubt, if the Exchange Offers are not fully subscribed as of the Early Exchange Date, subject to the terms and conditions of the Exchange Offers, all existing Notes tendered at or prior to the Early Exchange Date will be accepted for exchange in priority to all Existing Notes tendered after the Early Exchange Date even if such Existing Notes tendered after the Early Exchange Date have a higher Acceptance Priority Level than the Existing Notes tendered at or prior to the Early Exchange Date.

The New Notes will mature on November 15, 2029 and will bear interest at a rate per annum equal to 10.750%. The New Notes will first be redeemable, at Sabre GLBL’s option, starting on November 15, 2026, at 105.375% of their outstanding principal amount, plus accrued interest, and under certain other circumstances described in the Offering Circular.

The New Notes and the guarantees thereof will be senior secured indebtedness and will rank equal in right of payment with all of the existing and future senior secured indebtedness of Sabre GLBL and the guarantors. The New Notes will initially be jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings Corporation (“Sabre Holdings”) and all of Sabre GLBL’s current and future restricted subsidiaries that are borrowers under or guarantee Sabre GLBL’s senior secured credit facilities under certain of its existing credit agreements or certain other secured indebtedness. The New Notes and the guarantees thereof will be secured, subject to permitted liens, by a first-priority security interest in substantially all present and hereinafter acquired assets of Sabre GLBL and each of the guarantors (other than certain excluded assets). The New Notes will be guaranteed by the same parties and on the same basis, and secured by the same assets and on the same basis, as the Existing Notes. In addition, the covenants in the indenture for the New Notes will be substantially the same as the covenants applicable to the Existing Notes.

The Exchange Offers will expire at 5:00 p.m., New York City time, on December 9, 2024, unless extended (such date and time, as it may be extended, the “Expiration Date”), unless earlier terminated. Tenders of Existing Notes may be withdrawn from the Exchange Offers at or prior to, but not after, 5:00 p.m., New York City time, on November 21, 2024, unless extended (such date and time, as it may be extended, the “Withdrawal Deadline”). Eligible Holders (as defined below) must validly tender their Existing Notes at or prior to 5:00 p.m., New York City time, on November 21, 2024, unless extended (such date and time, as it may be extended, the “Early Exchange Date”), to be eligible to receive the Total Exchange Consideration (as set forth above), which includes the Early Exchange Premium (as set forth above) for such Existing Notes. Eligible Holders tendering Existing Notes after the Early Exchange Date and on or before the Expiration Date will only be eligible to receive the Exchange Consideration (as set forth above), which will equal the Total Exchange Consideration for such series of Existing Notes less the applicable Early Exchange Premium.

In addition to the Total Exchange Consideration or Exchange Consideration (as described in the table above), as applicable, Eligible Holders whose Existing Notes are accepted for exchange will be paid the accrued and unpaid interest, if any, on the Existing Notes to, but not including, the early settlement date, which is expected to be November 25, 2024, unless extended (such date and time, as it may be extended, the “Early Settlement Date”) on such Existing Notes; provided, however, that since any New Notes issued on the final settlement date, which is expected to be December 11, 2024, unless extended (such date and time, as it may be extended, the “Final Settlement Date”) will be issued with accrued interest from the Early Settlement Date up to, but not including, the Final Settlement Date, the amount of such accrued interest on any such New Notes will be deducted, from the cash payable as accrued interest on the Existing Notes exchanged on the Final Settlement Date, provided further that such net amount will not be below zero. For the avoidance of doubt, Eligible Holders (as defined below) who validly tender Existing Notes of a series after the Early Exchange Date but on or before the Expiration Date, will not receive accrued and unpaid interest, if any, on such Existing Notes from the Early Settlement Date through the Final Settlement Date. In addition, Eligible Holders of the December 2027 Notes whose tenders are settled after December 1, 2024 and before December 15, 2024 will be deemed to have consented to giving up any claim to the interest payment due on December 15 in respect of the December 2027 Notes that they might otherwise have as a result of the related interest payment record date of December 1, 2024, and will receive only the accrued interest described above. Interest on the New Notes will accrue from (and including) the Early Settlement Date. Interest on the New Notes will accrue from (and including) the Early Settlement Date.

Sabre GLBL’s obligation to accept for exchange the Existing Notes validly tendered and not validly withdrawn in each Exchange Offer is subject to the satisfaction or waiver of certain conditions as described in the Offering Circular, including the New Notes Issuance Minimum. Such conditions may be waived by Sabre GLBL in its sole discretion, subject to applicable law. Any waiver of a condition by Sabre GLBL will not constitute a waiver of any other condition. For avoidance of doubt, the Exchange Offer in respect of the December 2027 Notes is not conditioned on the Exchange Offer in respect of the June 2027 Notes, or vice versa. Sabre GLBL reserves the right to extend, amend or terminate any Exchange Offer for any reason or for no reason. In addition, Sabre GLBL reserves the right to increase, decrease or otherwise change the Maximum Exchange Amount in its sole discretion without extending the Early Exchange Date or the Withdrawal Deadline or otherwise reinstating withdrawal rights, subject to compliance with applicable law and the terms of outstanding indebtedness. Sabre GLBL will not receive any cash proceeds from the Exchange Offers and will not incur additional indebtedness in excess of the aggregate principal amount of Existing Notes that are exchanged in the Exchange Offers. 

Concurrently with the Exchange Offers, Sabre GLBL is offering lenders under its senior secured term loans (the “Old Term Loans”) to exchange up to approximately $375 million of their Old Term Loans for the same amount of new senior secured term loans maturing in November 2029 (the “New Term Loans”). Except for the extended maturity and new pricing terms of the New Term Loans, we expect that the New Term Loans will have substantially similar terms as the Old Term Loans. The consummation of each term loan exchange is conditioned on participation from at least $50 million in principal amount per tranche of the New Term Loans.

The consummation of each Exchange Offer is not subject to, or conditioned upon, the consummation of such term loan exchanges. The consummation of such term loan exchanges is not subject to, or conditioned upon, the consummation of any Exchange Offer. The proposed term loan exchanges are subject to market conditions and there can be no assurance that any or all of them will in fact be consummated in the manner described herein or at all.

The Exchange Offers are being made only to holders of Existing Notes that have certified, by submitting an instruction to the clearing system, that they are either (i) “qualified institutional buyers” as defined in Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) are located outside the United States and are not “U.S. persons” as defined in Rule 902 under the Securities Act (such holders, “Eligible Holders”). Only Eligible Holders are authorized to receive or review the Offering Circular or to participate in the Exchange Offers. Non U.S.-persons may also be subject to additional eligibility criteria.

Information Relating to the Exchange Offers

The complete terms and conditions of the Exchange Offers are set forth in the Offering Circular.  The Offering Circular contains important information and Eligible Holders are encouraged to read it in its entirety.  The Offering Circular will only be distributed to Eligible Holders who complete and return an eligibility form confirming that they are either a “qualified institutional buyer” under Rule 144A or not a “U.S. person” under Regulation S under the Securities Act for purposes of applicable securities laws.  Holders of Existing Notes who desire to complete an eligibility form should either visit www.dfking.com/sabre or request instructions by sending an e-mail to sabre@dfking.com or by calling D.F. King & Co., Inc., the information and exchange agent for the Exchange Offers, at (toll-free) (800) 848-3374 (toll-free) or (banks and brokers) (212) 269-5550.

None of Sabre, Sabre Holdings, Sabre GLBL, their affiliates, their respective boards of directors and stockholders, the Exchange Agent or Computershare Trust Company, N.A., as trustee for the Existing Notes and New Notes, are making any recommendation as to whether holders should tender any Existing Notes in response to the Exchange Offers. Holders must make their own decision as to whether to tender any of their Existing Notes, and, if so, the principal amount of Existing Notes to tender.

This press release is for informational purposes only and is neither an offer to buy nor a solicitation of an offer to sell any of the New Notes or any other securities. The Exchange Offers are not being made to holders of Existing Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. The Exchange Offers are only being made pursuant to the Offering Circular. Eligible Holders are strongly encouraged to read the Offering Circular carefully because it will contain important information.

The New Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.  The New Notes have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the Offering Circular.

Forward-Looking Statements

Certain statements herein are forward-looking statements about trends, future events, uncertainties and our plans and expectations of what may happen in the future. Any statements that are not historical or current facts are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as “guidance,” “outlook,” “target,” “expect, ” “anticipate,” “on track,” “continue,” “believe,” “momentum,” “position,” “continue,” “progress,” “confident,” “trend,” “plan,” “recurring,” “trajectory,” “pipeline,” “opportunity,” “potential,” “positioned,” “benefit,” “goal,” “confident,” “indicate,” “optimistic,” “will,” “forecast,” “strategy,” “estimate,” “project,” “may,” “should,” “would,” “intend,” or the negative of these terms, where applicable, or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Sabre’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. The potential risks and uncertainties include, among others, our ability to realize the anticipated benefits of the Exchange Offers and the proposed term loan exchange transaction and the risk that the Exchange Offers and the proposed term loan exchange transaction may not be consummated, financial condition and credit ratings, as well as on the travel industry and consumer spending more broadly, the effect of remote working arrangements on our operations and the speed and extent of the recovery across the broader travel ecosystem, dependency on transaction volumes in the global travel industry, particularly air travel transaction volumes, the timing, implementation and effects of our growth strategies and technology transformation, the completion and effects of travel platforms, exposure to pricing pressure in the Travel Solutions business, changes affecting travel supplier customers, maintenance of the integrity of our systems and infrastructure and the effect of any security incidents, our ability to recruit, train and retain employees, competition in the travel distribution industry and solutions industry, failure to adapt to technological advancements, implementation of software solutions, implementation and effects of new, amended or renewed agreements and strategic partnerships, dependence on establishing, maintaining and renewing contracts with customers and other counterparties and collecting amounts due to us under these agreements, dependence on relationships with travel buyers, the ability to achieve our cost savings and efficiency goals and the effects of these goals, our collection, processing, storage, use and transmission of personal data and risks associated with PCI compliance, the effects of cost savings initiatives, the effects of new legislation or regulations or the failure to comply with regulations or other legal requirements, use of third-party distributor partners, the financial and business results and effects of acquisitions and divestitures of businesses or business operations, reliance on the value of our brands, reliance on third parties to provide information technology services and the effects of these services, the effects of any litigation, regulatory reviews and investigations, adverse global and regional economic and political conditions, risks related to global conflicts, risks arising from global operations, risks related to our significant amount of indebtedness, including increases in interest rates and our ability to refinance our debt, and tax-related matters.

More information about potential risks and uncertainties that could affect our business and results of operations is included in the “Risk Factors” and “Forward-Looking Statements” sections of Sabre Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on October 31, 2024 and Sabre Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 15, 2024, as well as other risks and uncertainties specified in the “Risk Factors” section of the Offering Circular. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Unless required by law, Sabre undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

About Sabre

Sabre Corporation is a software and technology company that takes on the biggest opportunities and solves the most complex challenges in travel. The Company connects travel suppliers and buyers around the globe and across the ecosystem through innovative products and next-generation technology solutions. Sabre harnesses speed, scale and insights to build tomorrow’s technology today – empowering airlines, hoteliers, agencies and other partners to retail, distribute and fulfill travel worldwide. Headquartered in Southlake, Texas, USA, Sabre serves customers in more than 160 countries around the world.

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Shinsegae spreads Christmas magic to the world with a new global landmark ‘Shinsegae Square’

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SEOUL, South Korea, Nov. 8, 2024 /PRNewswire/ — “Heritage meets digital technology, Shinsegae paves its way to become an iconic landmark of Seoul, alluring customers from all around the world.”

Twinkling lights and glamorous moving images on the screen, Shinsegae Department Store, Korea’s first department store since 1963, presents a new landmark of Seoul in Myeong-dong which is located in the center of the capital and brings in the highest population of tourists.

Shinsegae Department Store has been an absolute favourite amongst millions of global customers along with Harrods(UK) and Isetan(Japan), taking the chart of No.1 leading position in the Korean department store industry by far.

Last year, Shinsegae Department Store in Myeong-dong has been visited by over 6 million customers from different countries, making the spot a ‘must-visit-place’ for Christmas season.

For the past 10 years, Shinsegae has delivered hopes and excitements to its onlookers visiting the place, wishing the best Christmas and New Year’s Eve for everyone.

With a size of three basketball courts(1292.3㎡), Shinsegae’s mega-sized digital signage is now recreated as ‘Shinsegae Square’ and presents an overwhelming beauty with the visuals from the screen.

This year, Shinsegae is showcasing a short film called ‘Pursuit of Christmas Moments’ to give the experience of joy and magical moments to the audience, elevating thrills for Christmas and New Year’s Eve.

The film depicts a story of Shinsegae Department Store being transformed into a magical Christmas castle along with fancy dinner parties inside and amusement parks embellished with glittering lights in the night sky, which will leave unforgettable memories for the visitors.

On the 31st of December, Shinsegae Square district will be presented as the spot to celebrate New Year’s Eve as it will exhibit diverse K-culture contents and media artworks.

Harmoniously permeated with historical buildings nearby, the audience will be fascinated by magnificent and breath-taking sceneries with feasts of colorful lights that Shinsegae Square sheds.

“Shinsegae Department Store now presents ‘Shinsegae Square’ where visual beauty and cutting-edge technologies are met to make the most cherishable memories to those visiting Seoul,” Shinsegae said.

“Rebranded as the iconic cultural hub with its K-culture contents and media artworks, Shinsegae Square will proceed to become the ultimate ‘lifestyle destination’, nowhere to be compared in Seoul.”

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