Genpact (G) risk factors, FY2024 10-K

Risks Related to our Business and Operations

1. 01ability to develop, deploy, or use AI technologies in our own operations or our client offerings. Failure to keep pace with this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm
2. 02Our success largely depends on our ability to develop and achieve our business strategies, and our results of operations and financial condition may suffer if we are unable to continually develop and successfully execute our business strategies
3. 03We may fail to attract and retain enough qualified employees to support our business, especially our advanced technology solutions
4. 04We face legal, operational, reputational and financial risks from any failure to safeguard our systems and protect client, Genpact or employee data from security incidents or cyberattacks
5. 05Our profitability will suffer if we are not able to price appropriately, effectively utilize new technologies, maintain employee and asset utilization levels and control our costs
6. 06Our results of operations could be adversely affected by economic and geopolitical conditions and the effects of these conditions on our and our clients’ businesses and levels of business activity
7. 07A substantial portion of our assets, employees and operations is located in India and we are subject to regulatory, economic, social and political uncertainties in India
8. 08Changes in our tax rates or tax provisions, adverse tax audits and other proceedings, or changes in tax laws or their interpretation or enforcement could have an adverse effect on our business, results of operations, effective tax rate and financial condition
9. 09resulting from GloBE in 2024, but its impact overall to date has not been material. However, there can be no assurance that the impact of the GloBE rules on our effective tax rate will not become material in the future
10. 10Our industry is highly competitive, and we may not be able to compete effectively
11. 11Wage increases in the countries where we operate may reduce our profit margin
12. 12Our success depends in part on our retention of key members of our senior leadership team
13. 13Our business depends on generating and maintaining ongoing, profitable client demand for our services and solutions, and a significant reduction in such demand or an inability to respond to or compete in the rapidly evolving technological environment could materially affect our results of operations
14. 14We enter into long-term contracts and fixed-price contracts with our clients. Our failure to price these contracts correctly may negatively affect our profitability
15. 15Our partnerships, alliances and relationships with third-party suppliers and contractors and other third parties with whom we do business expose us to a variety of risks that could have a material adverse effect on our business
16. 16fines, injunctions, civil penalties and criminal prosecutions, any of which could significantly and adversely affect our business
17. 17Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
18. 18We may be subject to claims and lawsuits for substantial damages, including by our clients arising out of disruptions to their businesses or our inadequate performance of services
19. 19Under our MSAs with our clients, our liability for breach of our obligations is generally limited to actual damages suffered by the client and is typically capped at an agreed amount. These limitations and caps on liability may be unenforceable or otherwise may not protect us from liability for damages
20. 20Recent and future legislation and executive action in the United States and other jurisdictions could significantly affect the ability or willingness of our clients and prospective clients to utilize our services
21. 21for transferring personal data outside of the EU may be challenged and require further rulemaking by the applicable legal bodies
22. 22Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violations of these laws and regulations could harm our business
23. 23Our revenues are highly dependent on clients located in North America and Europe, as well as on clients that operate in certain industries
24. 24We are implementing a new enterprise resource planning system, and challenges with the planning or implementation of the system may impact our internal controls over financial reporting, business and operations
25. 25Our results of operations and share price could be adversely affected if we are unable to maintain effective internal controls
26. 26We may face difficulties in providing end-to-end business solutions or delivering complex, large or unique projects for our clients that could cause clients to discontinue their work with us, which in turn could harm our business and our reputation
27. 27Currency exchange rate fluctuations in various currencies in which we do business, especially the Indian rupee, the euro and the U.S. dollar, could have a material adverse effect on our business, results of operations and financial condition
28. 28Restrictions on entry or work visas may affect our ability to compete for and provide services to clients, which could have a material adverse effect on our business and financial results
29. 29We may be unable to service our debt or obtain additional financing on competitive terms or at all
30. 30We often face a long selling cycle to secure a new Digital Operations contract as well as long implementation periods that require significant resource commitments, which result in a long lead time before we receive revenues from new relationships
31. 31We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to those estimates and assumptions could adversely affect our financial results
32. 32Our operating results may experience significant fluctuations
33. 33If we are unable to collect our receivables, our results of operations, financial condition and cash flows could be adversely affected
34. 34Some of our contracts contain provisions which, if triggered, could result in lower future revenues and have a material adverse effect on our business, results of operations and financial condition
35. 35our client’s competitors using the same personnel. These restrictions may hamper our ability to compete for and provide services to other clients in the same industry, which may inhibit growth and result in lower future revenues and profitability
36. 36Our business could be materially and adversely affected if we do not protect our intellectual property or if our services are found to infringe on the intellectual property of others
37. 37We may face difficulties as we expand our operations into countries in which we have no prior operating experience
38. 38Terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence
39. 39If more stringent labor laws become applicable to us or if a significant number of our employees unionize, our profitability may be adversely affected
40. 40We may engage in strategic transactions that could create risks
41. 41Bermuda recently enacted new tax legislation that will impose a corporate income tax on certain Bermuda companies. Any new tax liability in Bermuda or another jurisdiction based on our incorporation in Bermuda could have a material adverse effect on our business, results of operations and financial condition
42. 42current law, the Bermuda Government recently passed a new law titled the Corporate Income Tax Act, 2023 (the "CIT Act"), which imposes a 15% minimum corporate income tax rate and expressly supersedes the written assurance we received under the EUTP
43. 43Economic substance requirements in Bermuda could adversely affect us
44. 44We may not be able to realize the entire book value of goodwill and other intangible assets from acquisitions

Risks Related to our Shares

1. 45The issuance of additional common shares by us or the sale of our common shares by our employees could dilute our shareholders’ ownership interest in the Company and could significantly reduce the market price of our common shares
2. 46Sales of a substantial number of our common shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common shares
3. 47There can be no assurance that we will continue to declare and pay dividends on our common shares, and future determinations to pay dividends will be at the discretion of our board of directors
4. 48We are organized under the laws of Bermuda, and Bermuda law differs from the laws in effect in the United States and may afford less protection to shareholders
5. 49The market price for our common shares has been and may continue to be volatile
6. 50You may be unable to effect service of process or enforce judgments obtained in the United States or Bermuda against us or our assets in the jurisdictions in which we or our executive officers operate