Transfer Pricing Benchmarking:
2021 North American IT Services
Table of Contents
I. Introduction
II. Description of the Benchmark
A. Industry Identification
B. Selection of Tested Period
C. Quantitative Screen
D. Qualitative Screen
E. Summary of Screening
F. Profit-Level Indicators for Accepted Companies
1. Markup on Total Costs
2. Return on Assets
3. Berry Ratio
III. Supplemental Data
A. Accepted Company Descriptions
B. Quantitative Rejection Reasons by Company
C. Qualitative Rejection Reasons by Company
Abbreviations
Acronym | Definition |
|---|---|
BR | Berry ratio |
CPM | Comparable profits method |
MUTC | Markup on total costs |
NAICS | North American Industry Classification System |
NPI | Net profit indicator |
OECD | Organization for Economic Cooperation and Development |
OM | Operating margin |
PLI | Profit-level indicator |
R&D | Research and development |
ROA | Return on assets |
SEC | Securities and Exchange Commission |
SIC | Standard industrial classification |
TNMM | Transactional net margin method |
I. Introduction
This document serves as a North American transfer pricing benchmarking analysis to benchmark the IT services function under the application of the comparable profits method/transactional net margin method (TNMM). The purpose of this document is to provide a public benchmarking resource to tax practitioners and tax academics in order to closely study the returns that a routine tested party may merit in certain intercompany transactions.
This benchmark is meant to serve as a secondary resource or a starting point for tax practitioners for transfer pricing purposes. This document is not intended to be used for an off-the-shelf benchmark for transfer pricing documentation purposes. This document is not intended to be used in and of itself as a component for transfer pricing setting or transfer pricing documentation purposes (that is, IRC section 6662 documentation, OECD local file documentation, or any jurisdiction-specific transfer pricing documentation requirements). Should tax practitioners or authorities use this article for any nonacademic purposes, the author and Tax Notes cannot be held liable for any penalties or adjustments from tax authorities as this article’s intentions are of a purely academic nature.
Practitioners using this article should carefully review the facts and circumstances of the intercompany transaction that they are comparing against in order to determine which companies are most comparable to their tested party based on an in-depth functional analysis. This benchmark aims to identify a set of companies that could potentially be comparable to a tested party performing routine functions, owning routine assets, and assuming routine risks. The individual companies within this benchmark should be closely scrutinized to determine whether or not they are truly comparable to any intercompany transactions that might be compared against this benchmark.
The information contained in this document is based on a review of publicly available information including but not limited to company websites, publicly filed financials (for example, Form 10-K), and industry classifications for companies. The summary of financials and determinations of which companies to include within this benchmark were subject to the interpretation of the author. Any practitioner wishing to use datapoints or conclusions from this document should review their accuracy as the author does not take responsibility for the accuracy of information provided within this document or any misinterpretation of financial statements that were reviewed in compiling this document.
II. Description of the Benchmark
This benchmark is intended to provide a potential range of remuneration in return for the provision of IT services in an intercompany context under the use of the CPM/TNMM. More specifically, this benchmark seeks to identify companies that perform a broad range of functions including but not limited to:
network maintenance;
application development;
cloud and network security services;
IT consulting;
business process automation through IT; and
general IT assistance services.
This benchmark assumes the use of the CPM/TNMM to estimate the arm’s-length remuneration for IT services.
A. Industry Identification
This benchmark is focused on North American companies. In order to identify the right companies to potentially consider within this benchmark, it is necessary to consider the potential industries that may contain companies performing functions similar to those covered under this benchmark. Many practitioners make those selections with standard industrial classification (SIC) or North American Industry Classification System (NAICS) codes. However, the author has chosen to rely upon the industry classification of companies from investment analysts for the following reasons:
reliance upon SIC or NAICS codes can oftentimes be too broad, including companies that are not at all comparable to the intercompany transaction at hand;
the author wishes to take an approach that can be easily repeated by practitioners who may not have access to databases that provide SIC or NAICS information by company; and
as investment analysts’ jobs are to study a handful of companies in detail, they may be well placed to determine an appropriate industry classification from which to start.
As such, this benchmark reviewed companies in the following industry classifications1:
Information Technology — IT Services — Data Processing and Outsourcing; and
Information Technology — IT Services — IT Consulting and Other Services
This selection of these industry criteria yielded 140 companies for consideration.
B. Selection of Tested Period
This benchmark focuses on examining multi-year data in order to smooth out year-over-year fluctuations in company financial results that may otherwise remove potentially comparable companies from our benchmark. Specifically, this benchmark focuses on the three most recent years of publicly available financials for all companies, as of September 18.
C. Quantitative Screen
In order to narrow down the scope of companies for review, the author applies several quantitative screens that are intended to remove companies from this benchmark that might have functions, assets, or risks that would be significantly different from those of a tested party performing the service covered by this benchmark. As such, the following quantitative screens were applied:
Publicly available information. In order to determine the potential appropriateness of a company, publicly available information is necessary. For instance, companies not publishing recent financial information may no longer be operable. Therefore, companies without publicly available information were excluded.
Sufficient recent financial results. For the purposes of this benchmark, we choose to only include companies that have financial data available for at least two of the past three years. This is to ensure that companies are still active and have a sufficient history of operations.
Consistent operating losses. Companies were excluded if they reported operating losses in each of the past three fiscal years. This is intended to exclude companies that may be on the brink of bankruptcy and can potentially be an indication of a company that is either in a startup phase of their activities or one that bears nonroutine risks, both of which would not be comparable to a routine tested party. The author acknowledges that this may not be the correct approach for every company in question and that this potentially causes an upward bias in the profit-level indicator/net profit indicator results of this benchmark.
Average revenue threshold. In order to exclude companies that could be considered start-up companies or those with operations significantly different from those of a routine tested party, companies were excluded if they reported three-year average revenues of less than $10 million.
Research and development/revenue ratio. A routine tested party providing IT services would not be expected to undertake significant R&D activities as this could indicate the development of significant intellectual property or different business activities altogether. Therefore, companies were excluded if they reported a ratio of R&D/revenue of greater than 3 percent in the most recent fiscal year.
Table 1 summarizes the quantitative screens applied and the number of companies affected by each quantitative screen.
Quantitative Screen | Companies Affected |
|---|---|
Publicly available information | 35 |
Sufficient recent financial results | 7 |
Consistent operating losses | 32 |
Average revenue threshold | 27 |
R&D/revenue ratio | 20 |
After applying the quantitative screens, 71 companies were left. A total of 69 companies were eliminated by the quantitative screens, some for multiple reasons.
D. Qualitative Screen
For the remaining 71 companies, the author performed an in-depth review in order to assess the comparability of the companies for inclusion within the benchmark. Specifically, the author reviewed company websites, company business descriptions, and the most recent SEC Form 10-K2 to assess whether or not the companies under review performed functions, owned assets, and bore risks that could be considered as comparable with a tested party performing IT services under a hypothetical intercompany transaction.
As such, the following qualitative screens were applied:
Different functions. The company reviewed was determined to be not comparable for the purposes of this benchmark as it primarily performs functions that were considered as not comparable to the benchmark at hand. For example, companies performing asset management or transportation management functions would be rejected as they would not be comparable for the purposes of an IT services benchmark.
Different risks. The company reviewed was determined to be not comparable for the purposes of this benchmark as it bears risks that were considered as not comparable to the benchmark at hand. For example, companies performing significant hedging activities would be rejected as they would not be comparable for the purposes of an IT services benchmark.
Different assets. The company reviewed was determined to be not comparable for the purposes of this benchmark as it owns assets that were considered as not comparable to the benchmark at hand. For example, companies with significant IP or uncharacteristic tangible assets would be rejected as they would not be comparable for the purposes of an IT services benchmark.
Subsidiary. The company reviewed was determined to be a subsidiary of another company. In theory, the subsidiary’s results may itself be influenced by transfer pricing. This would make it difficult to determine the appropriateness of such subsidiary’s financial results as they could be considered as not arm’s length and not independent of a related party.
Different products. The company reviewed was determined to be not comparable for the purposes of this benchmark as its products would be considered as being too different from the products in an IT services benchmark. This is particularly relevant in distribution and manufacturing benchmarks in which, for example, companies may have similar functions, assets, and risks, however, the industries in which companies operate are significantly different (for example, pharmaceutical product distribution versus IT product distribution).
Different geographical markets. The company reviewed was considered to have a significant amount of operations in a non-North American market. Companies operating primarily in other jurisdictions may have non-comparable levels of profitability and as such were determined to be not comparable for the purposes of a North American benchmark.
Table 2 summarizes the qualitative screens applied and the number of companies affected by each qualitative screen.
Qualitative Screen | Companies Eliminated |
|---|---|
Different functions | 53 |
Different risks | 0 |
Different assets | 1 |
Subsidiary | 2 |
Different products | 0 |
Different geographical markets | 1 |
After the qualitative screen, 14 companies were accepted and deemed as appropriate for the IT services benchmark.
E. Summary of Screening
Step | Companies Remaining After the Screen |
|---|---|
Industry identification | 140 |
Quantitative screen | 71 |
Qualitative screen | 14 |
F. Profit-Level Indicators for Accepted Companies
1. Markup on Total Costs
Company | MUTC |
|---|---|
CGI Inc. | 18.3% |
Cognizant Technology Solutions Corp. | 16.3% |
Computer Task Group Inc. | 2.6% |
DXC Technology Co. | -2.2% |
ExlService Holdings Inc. | 13% |
Genpact Ltd. | 14.3% |
Globant SA | 12% |
Information Analysis Inc. | 3.1% |
Information Services Group Inc. | 3.9% |
Infosys Ltd. | 32.8% |
Innodata Inc. | 2.1% |
Perficient Inc. | 12.6% |
Unisys Corp. | 4.5% |
Wipro Ltd. | 24% |
Company | MUTC |
|---|---|
Maximum | 32.8% |
Upper Quartile | 15.8% |
Median | 12.3% |
Average | 11.2% |
Lower Quartile | 3.3% |
Minimum | -2.2% |
2. Return on Assets
Company | ROA |
|---|---|
CGI Inc. | 13.4% |
Cognizant Technology Solutions Corp. | 14.1% |
Computer Task Group Inc. | 5.5% |
DXC Technology Co. | -1.6% |
ExlService Holdings Inc. | 9.1% |
Genpact Ltd. | 9.9% |
Globant SA | 8.8% |
Information Analysis Inc. | 13.4% |
Information Services Group Inc. | 4% |
Infosys Ltd. | 24.7% |
Innodata Inc. | 2.2% |
Perficient Inc. | 9.6% |
Unisys Corp. | 3.3% |
Wipro Ltd. | 14.7% |
Company | ROA |
|---|---|
Maximum | 24.7% |
Upper Quartile | 13.4% |
Median | 9.3% |
Average | 9.4% |
Lower Quartile | 4.4% |
Minimum | -1.6% |
3. Berry Ratio
Company | BR |
|---|---|
CGI Inc. | 3.18 |
Cognizant Technology Solutions Corp. | 1.64 |
Computer Task Group Inc. | 1.13 |
DXC Technology Co. | 0.9 |
ExlService Holdings Inc. | 1.49 |
Genpact Ltd. | 1.56 |
Globant SA | 1.4 |
Information Analysis Inc. | 1.23 |
Information Services Group Inc. | 1.1 |
Infosys Ltd. | 3.42 |
Innodata Inc. | 1.06 |
Perficient Inc. | 1.42 |
Unisys Corp. | 1.22 |
Wipro Ltd. | 2.58 |
Company | BR |
|---|---|
Maximum | 3.42 |
Upper Quartile | 1.62 |
Median | 1.41 |
Average | 1.67 |
Lower Quartile | 1.16 |
Minimum | 0.9 |
III. Supplemental Data
A. Accepted Company Descriptions
Table 10 contains the business descriptions of the companies that were accepted and deemed as appropriate for the IT services benchmark.
Company | Description |
|---|---|
CGI Inc. | CGI Inc., together with its subsidiaries, provides IT and business process services in Canada; Western, Southern, Central, and Eastern Europe; Australia; Scandinavia; Finland, Poland, and Baltics; the United States; the United Kingdom; and the Asia Pacific. Its services include the management of IT and business outsourcing, systems integration and consulting, and software solutions selling activities. The company also offers application development and integration and maintenance, testing, portfolio management, and modernization services; business consulting; and a suite of business process services designed to address the needs of specific industries, as well as IT infrastructure services. It serves clients operating in government, financial services, health, utility, communication, oil and gas, manufacturing, insurance, retail and consumer service, transportation, and post and logistics sectors. The company was formerly known as CGI Group Inc. and changed its name to CGI Inc. in January 2019. CGI Inc. was founded in 1976 and is headquartered in Montreal. |
Cognizant Technology Solutions Corp. | Cognizant Technology Solutions Corp., a professional services company, provides consulting and technology and outsourcing services in North America, Europe, and internationally. The company operates through four segments: financial services; healthcare; products and resources; and communications, media, and technology. It offers customer experience enhancement, robotic process automation, analytics, and AI services in areas such as digital lending, fraud detection, and next generation payments; and enhanced compliance, integrated health management, claims investigative services, and patient experience, as well as services that drive operational improvements in areas such as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. The company also provides solutions to manufacturers, retailers, and travel and hospitality companies, as well as companies providing logistics, energy, and utility services; and cloud, interactive, and Internet of Things (IoT) services to information, media and entertainment, and communications and technology companies. Cognizant Technology Solutions Corp. was founded in 1994 and is headquartered in Teaneck, New Jersey. |
Computer Task Group Inc. | Computer Task Group Inc., together with its subsidiaries, provides information and technology services in North America, South America, Western Europe, and India. It provides business process transformation solutions, which include strategic advisory, data strategy, digital workplace, enterprise platforms, information disclosure, and regulatory and compliance services; technology transformation solutions, such as application development, automation, cloud, data management, enterprise platform implementation, and testing services; and operations transformation solutions consisting of application support, IT operations support, cloud, and infrastructure. The company provides IT and other staffing services, including managed staffing, staff augmentation, and volume staffing services. It serves financial services, healthcare, manufacturing, and energy industries, as well as technology service providers. Computer Task Group Inc. was incorporated in 1966 and is headquartered in Amherst, New York. |
DXC Technology Co. | DXC Technology Co., together with its subsidiaries, provides IT services and solutions primarily in North America, Europe, Asia, and Australia. It operates in two segments: Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment offers a portfolio of analytics services and extensive partner ecosystem that help its customers to gain rapid insights, automate operations, and accelerate their digital transformation journeys; and software engineering and solutions that enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business. It also uses various technologies and methods to accelerate the creation, modernization, delivery, and maintenance of secure applications allowing customers to innovate faster while reducing risk, time to market, and total cost of ownership. In addition, this segment offers business process services, which include integration and optimization of front and back office processes and agile process automation. The GIS segment adapts legacy apps to cloud, migrate the right workloads, and securely manage their multi-cloud environments; and offers security solutions help predict attacks, proactively respond to threats, and ensure compliance, as well as to protect data, applications, and infrastructure. It also provides IT outsourcing services support infrastructure, applications, and workplace IT operations, including hardware, software, physical/virtual end-user devices, collaboration tools, and IT support services. In addition, this segment offers workplace and mobility services to fit its customer's employee, business, and IT needs from intelligent collaboration; and modern device management, digital support services, IoT, and mobility services. The company has a strategic collaboration with Microsoft. DXC Technology Co. was founded in 1959 and is headquartered in Tysons, Virginia. |
ExlService Holdings Inc. | ExlService Holdings Inc. provides operations management and analytics services in the United States, the United Kingdom, and internationally. The company offers business process management (BPM) services to the insurance industry in the areas of claims processing, subrogation, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business processing, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer services. It also provides BPM services related to the care management, utilization management, disease management, payment integrity, revenue optimization, and customer engagement for the healthcare industry; BPM services related to business processes in corporate and leisure travel, such as reservations, customer service, fulfillment, and finance and accounting; and finance and accounting BPM services, including financial planning and analysis, strategic finance, decision support, regulatory reporting, and compliance services. In addition, the company offers BPM services for banking and financial services industry comprising residential mortgage lending, retail banking and credit cards, commercial banking, and investment management; BPM services related to enhancing operating models, enhancing customer experience, reducing costs, shortening turnaround time, and simplifying compliance for clients; and industry-specific digital transformational services. Further, it provides predictive and prescriptive analytics in the areas of customer acquisition and life cycle management, risk underwriting and pricing, operational effectiveness, credit and operational risk monitoring and governance, payment integrity and care management, and data management. The company was founded in 1999 and is headquartered in New York. |
Genpact Ltd. | Genpact Ltd. provides business process outsourcing and IT services in North and Latin America, India, rest of Asia, and Europe. It operates in three segments: banking, capital markets, and insurance; consumer goods, retail, life sciences, and healthcare; and high tech, manufacturing, and services. The company's finance and accounting services include accounts payable, such as document management, invoice processing, approval and resolution management, and travel and expense processing; invoice-to-cash services, including customer master data management, credit and contract management, fulfillment, billing, collections, and dispute management services; record-to-report services comprising accounting, treasury, tax, product cost accounting, and closing and reporting services; financial planning and analysis consisting of budgeting, forecasting, and business performance reporting; and enterprise risk and compliance services, including operational risks and controls. It also provides supply chain design, planning, inventory optimization, transportation and logistics management, and after-sales services; sourcing and procurement services comprising direct and indirect strategic sourcing, category management, spend analytics, procurement operation, master data management, and other procurement and supply chain advisory services; and sales and commercial services in the lead-to-quote, quote-to-order, and customer service areas. In addition, the company offers IT services, which include end-user computing support, infrastructure management, application production support, and database management services; and transformation services that include digital solutions, consulting services, and analytics services and solutions. It serves banking, capital market, insurance, consumer goods, retail, life science, healthcare, high tech, and manufacturing and service industries. Genpact Ltd. was founded in 1997 and is based in Hamilton, Bermuda. |
Globant SA | Globant SA operates as a technology services company worldwide. The company offers transformational programs, return on investment and cost efficiency, new revenue streams, e-mission, sustainability today, up with climate, organizational design, leadership mindset and organizational upskilling, cultural strategy, talent journeys, change management, delivery management, agile consultancy, management consulting, user experience, visual and service design, industrial design, strategic architecture consulting, platforms evolution, and augmented composable services. It also provides e-payments, content management systems, future commerce, e-learning, accessibility, web, native and hybrid applications, cross-compiled data strategy, insights, data as a product, data platforms, machine learning operations, blockchain, IoT experience and consultancy, platform, hardware integration, intelligent automation, process mining, smart farming, image diagnosis, healthcare interoperability, genomics data processing, telemedicine and medical digital tech, patient journey, R&D, and precision medicine services. In addition, the company offers digital marketing, conversational interface, gaming, OTT, Cloud Operations Studio, Salesforce Studio, cybersecurity, and enterprise applications services; product strategy, management, and delivery services; and agile, automation, load and performance, AI, game, mobile, data testing, accessibility, media and OTT, and conversational interfaces testing services, as well as services over platforms. It serves medium to large-sized companies operating in media and entertainment, professional services, technology and telecommunications, travel and hospitality, healthcare, banks, financial services and insurance, consumer, retail, and manufacturing industries. The company was formerly known as IT Outsourcing SL and changed its name to Globant SA in December 2012. Globant SA was founded in 2003 and is based in Luxembourg. |
Information Analysis Inc. | Information Analysis Inc. develops and markets computer applications software systems, programming services, and related software products and automation systems in the United States. The company offers legacy software migration and modernization and data analytics services; and develops web-based and mobile device solutions, including dynamic electronic forms development and conversion. It also sells third-party software licenses, as well as provides implementation and training and support and maintenance services. The company was founded in 1979 and is headquartered in Fairfax, Virginia. |
Information Services Group Inc. | Information Services Group Inc., together with its subsidiaries, operates as a technology research and advisory company in the Americas, Europe, and the Asia Pacific. The company offers digital transformation services, including automation, cloud, and data analytics; sourcing advisory; managed governance and risk; network carrier; technology strategy and operations design; change management; and market intelligence and technology research and analysis services. It supports private and public sector organizations to transform and optimize their operational environments. The company also provides ISG Digital, a client solution platform that helps clients developing technology, transformation, sourcing, and digital solutions; and ISG Enterprise, a client solution platform that helps clients manage change and optimize operations in areas comprising finance, human resource, and Procure2Pay. In addition, it offers ISG GovernX, a software platform that provides insights from market and performance data and automates the management of third-party supplier relationships that comprise contract and project lifecycles and risk management. The company serves private sector clients operating in the manufacturing, banking and financial services, insurance, health sciences, energy and utilities, and consumer services industries; and public sector clients, including state and local governments, airport and transit authorities, and national and provincial government units. Information Services Group Inc. was founded in 2006 and is headquartered in Stamford, Connecticut. |
Infosys Ltd. | Infosys Ltd., together with its subsidiaries, provides consulting, technology, outsourcing, and next-generation digital services in North America, Europe, India, and internationally. It provides application development and management, independent validation, product engineering and management, infrastructure management, enterprise application management, and support and integration services. The company's products and platforms include Finacle, a core banking solution; Edge suite of products; Infosys Nia, an artificial intelligence platform; Infosys McCamish, an insurance platform; Wingspan, a customizable learning platform; Stater mortgage servicing platform; Panaya automation suite; and Skava, an e-commerce suite. The company serves clients in the financial services and insurance, life sciences and healthcare, manufacturing, retail, consumer packaged goods and logistics, hi-tech, communications, telecom OEM, media, energy, utilities, resources, services, and other industries. It has collaboration agreements with Rolls-Royce, BP PLC, Newmont Corp., RXR Realty, Majesco Ltd., and Centre for Accessibility Australia. The company was formerly known as Infosys Technologies Ltd. and changed its name to Infosys Ltd. in June 2011. Infosys Ltd. was incorporated in 1981 and is headquartered in Bengaluru, India. |
Innodata Inc. | Innodata Inc. operates as a global data engineering company in the United States, the United Kingdom, the Netherlands, Canada, and internationally. The company operates through three segments: digital data solutions (DDS), Synodex, and Agility. The DDS segment offers a range of solutions and platforms for solving data challenges that companies face when they seek to obtain the benefits of artificial intelligence systems and analytics platforms, including data annotation, data transformation, data curation, and intelligent automation. This segment also provides services for clients in the information industry that relate to content operations and product development. The Synodex segment offers an intelligent data platform that transforms medical records into useable digital data with its proprietary data models or client data models. The Agility segment provides an intelligent data platform that provides marketing communications and public relations professionals to target and distribute content to journalists and social media influencers; and to monitor and analyze global news channels, such as print, web, radio, and TV, as well as and social media channels. It serves banking, insurance, financial services, technology, digital retailing, and information/media sectors through its professional staff, senior management, and direct sales personnel. The company was formerly known as Innodata Isogen Inc. and changed its name to Innodata Inc. in June 2012. Innodata Inc. was founded in 1988 and is headquartered in Ridgefield Park, New Jersey. |
Perficient Inc. | Perficient Inc. provides digital consultancy services and solutions in the United States. The company offers solutions in the digital and technology strategy, management consulting, and organizational change management areas; and data and intelligence solutions in the areas of analytics, artificial intelligence and machine learning, big data, business intelligence, and custom product portfolio. It also provides blockchain, cloud, commerce, corporate performance management, customer relationship management, content management systems, CX platforms, custom application development, DevOps, enterprise resource planning, integration and APIs, intelligent automation, IoT, mobile, portals and collaboration, supply chain, product information management, and order management solutions and services. In addition, the company offers analytics, content architecture, conversion rate optimization, creative design, email marketing, journey sciences, paid media and search, marketing automation research, SEO, and social media services; product development services, as well as a suite of proprietary products; and optimized global delivery solutions. It serves the healthcare, financial services, retail and consumer goods, manufacturing, automotive and transportation, electronics and computer hardware, telecommunications, business services, and energy and utilities markets, as well as leisure, media, and entertainment markets. Perficient Inc. was founded in 1997 and is headquartered in St. Louis. |
Unisys Corp. | Unisys Corp. operates as an IT services company worldwide. It operates in two segments: services and technology. The services segment offers cloud and infrastructure services, application services, and business process outsourcing services. Its solutions include Unisys InteliServe, a service solution that transforms traditional service desk into an intelligent, user-centric experience aligned with the needs of the modern digital workplace; Unisys CloudForte, a comprehensive managed service offering to help accelerate the secure move of data and applications to the cloud; and Unisys Security Solutions, a portfolio that includes managed security services, security consulting services, the Unisys Incident Response Ecosystem subscription service, and the TrustCheck cyber risk management solution. The technology segment designs and develops software, and hardware and other related products. Its products include Unisys ClearPath Forward, a software operating environment for high-intensity enterprise computing; and Unisys Stealth security software, which enables trusted identities to access micro-segmented critical assets and safely communicate through secure and encrypted channels. This segment also provides industry solutions, which help law enforcement agencies solve crime; social services case workers assist families; travel and transportation companies manage freight and distribution; and financial institutions deliver omnichannel banking. The company serves customers in the government, financial services, and commercial markets through direct sales force, distributors, resellers, and alliance partners. Unisys Corp. was founded in 1886 and is based in Blue Bell, Pennsylvania. |
Wipro Ltd. | Wipro Ltd. operates as an IT, consulting, and business process services company worldwide. It operates through three segments: IT services, IT products, and India state-run enterprise services (ISRE). The IT services segment offers IT and IT-enabled services, including digital strategy advisory, customer-centric design, technology consulting, IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, infrastructure, analytics, business process, R&D, and hardware and software design services to enterprises. It serves customers in various industry sectors, such as healthcare and medical devices, consumer goods and life sciences, retail, transportation and services, communications, media and information services, technology products and platforms, banking, financial services and insurance, manufacturing, hi-tech, energy, and utilities. The IT products segment provides a range of third-party IT products comprising enterprise platforms, networking solutions, software and data storage products, contact center infrastructure, enterprise security, IT optimization technologies, video solutions, and end-user computing solutions. It serves enterprises in various industries primarily in the India market, which comprise the government, defense, IT and IT-enabled services, telecommunications, manufacturing, utilities, education, and financial services sectors. The ISRE segment offers IT services to entities and/or departments owned or controlled by the government of India and/or various Indian state governments. Wipro Ltd. has a collaboration agreement with FEV Europe GmbH to develop and market software defined vehicles. The company was incorporated in 1945 and is based in Bengaluru, India. |
B. Quantitative Rejection Reasons by Company
Table 11 contains the list of companies that were rejected during the quantitative screening and the applicable thresholds that caused them to be rejected.
Company | Publicly Available Information | Sufficient Recent Financial Results | Consistent Operating Losses | Average Revenue Threshold | R&D/Revenue Ratio |
|---|---|---|---|---|---|
6D Global Technologies Inc. | X |
|
|
|
|
Allin Corp. | X |
|
|
|
|
Alternet Systems Inc. | X |
| X | X |
|
Amdocs Ltd. |
|
|
|
| X |
AppTech Corp. |
|
| X | X | X |
Atlas Technology Group Inc. | X |
| X | X | X |
Averox Inc. | X |
|
| X |
|
Bell Industries Inc. | X |
| X |
|
|
Blueone Card Inc. | X |
|
|
|
|
Bm Technologies Inc. |
| X |
| X |
|
Brightstar Information Tech Group Inc. | X |
|
|
|
|
Cantaloupe Inc. |
|
| X |
|
|
China Crescent Enterprises Inc. | X |
|
|
|
|
Clean Vision Corp. | X |
|
|
|
|
CLPS Inc. |
|
|
|
| X |
CMTSU Liquidation Inc. | X |
|
|
|
|
CoroWare Inc. | X |
|
| X |
|
Crypto Co. |
|
|
| X |
|
CSG Systems International Inc. |
|
|
|
| X |
CSP Inc. |
|
| X |
| X |
DataLogic International Inc. | X |
|
|
|
|
Digitiliti Inc. | X |
| X | X | X |
DynTek Inc. | X |
| X |
|
|
Ealixir Inc. | X |
|
|
|
|
Emtec Inc. | X |
|
|
|
|
Enherent Corp. | X |
|
|
|
|
Excel Corp. | X |
|
|
|
|
Fintech Select Ltd. |
|
|
| X |
|
Flywire Corp. |
|
|
|
| X |
GBT Technologies Inc. |
|
| X | X |
|
Geeks On Call Holdings Inc. | X |
|
|
|
|
Glimpse Group Inc. | X |
|
|
|
|
Greenbox POS | X |
|
|
|
|
Grid Dynamics Holdings Inc. |
|
|
|
| X |
Helios and Matheson Analytics Inc. | X |
| X | X | X |
Infinite Group Inc. |
|
|
| X |
|
Inpixon |
|
| X | X | X |
InterCloud Systems Inc. | X |
| X |
|
|
International Business Machines Corp. |
|
|
|
| X |
International Card Establishment Inc. | X |
| X | X |
|
Jack Henry & Associates Inc. |
|
|
|
| X |
Kuboo Inc. | X |
|
|
|
|
Lattice Inc. | X |
| X | X | X |
LiveRamp Holdings Inc. |
|
| X |
| X |
Marqeta Inc. | X |
|
|
|
|
MoneyOnMobile Inc. | X |
| X | X |
|
nDivision Inc. |
|
| X | X |
|
OLB Group Inc. |
|
| X | X |
|
OMNIQ Corp. |
|
| X |
| X |
OneLink Corp. | X |
|
|
|
|
PagSeguro Digital Ltd. |
|
| X |
|
|
Paymentus Holdings Inc. |
|
|
|
| X |
Payoneer Global Inc. | X |
|
|
|
|
Prism Technologies Group Inc. | X | X | X | X |
|
Rego Payment Architectures Inc. |
|
| X | X |
|
Research Solutions Inc. |
|
| X |
| X |
RevoluGROUP Canada Inc. |
|
| X | X |
|
Rocketfuel Blockchain Inc. |
| X | X | X |
|
Santeon Group Inc. | X |
|
| X |
|
ServiceSource International Inc. |
|
| X |
|
|
Spectral Capital Corp. |
| X | X | X |
|
Square Inc. |
|
|
|
| X |
Taoping Inc. |
|
|
|
| X |
Technology Solutions Co. | X |
| X |
|
|
TSR Inc. |
|
| X |
|
|
Universal Power Industry Corp. | X | X |
| X |
|
Usio Inc. |
|
| X |
|
|
Visium Technologies Inc. |
| X | X | X |
|
Zoompass Holdings Inc. |
| X | X | X |
|
C. Qualitative Rejection Reasons by Company
Table 12 contains the list of companies that were rejected during the qualitative screening and the applicable reason that caused them to be rejected.
Company | Different Function | Different Risks | Different Assets | Subsidiary | Different Products | Different Geographical Markets |
|---|---|---|---|---|---|---|
Accenture PLC | X |
|
|
|
|
|
Affirm Holdings Inc. | X |
|
|
|
|
|
ALJ Regional Holdings Inc. | X |
|
|
|
|
|
Alliance Data Systems Corp. | X |
|
|
|
|
|
Automatic Data Processing Inc. |
|
| X |
|
|
|
Broadridge Financial Solutions Inc. | X |
|
|
|
|
|
Cass Information Systems | X |
|
|
|
|
|
Computer Services Inc. | X |
|
|
|
|
|
Concentrix Corp. | X |
|
|
|
|
|
Conduent Inc. | X |
|
|
|
|
|
DecisionPoint Systems Inc. | X |
|
|
|
|
|
Dlocal Ltd. | X |
|
|
|
|
|
Endava PLC |
|
|
|
|
| X |
EPAM Systems Inc. | X |
|
|
|
|
|
Euronet Worldwide Inc. | X |
|
|
|
|
|
Evertec Inc. | X |
|
|
|
|
|
EVO Payments Inc. | X |
|
|
|
|
|
Exela Technologies Inc. | X |
|
|
|
|
|
Fidelity National Information Services Inc. | X |
|
|
|
|
|
Fiserv Inc. | X |
|
|
|
|
|
FleetCor Technologies Inc. | X |
|
|
|
|
|
Formula Systems (1985) Ltd. |
|
|
| X |
|
|
Fujitsu Ltd. | X |
|
|
|
|
|
Gartner Inc. | X |
|
|
|
|
|
Global Blue Group Holding Ltd. | X |
|
|
|
|
|
Global Payments Inc. | X |
|
|
|
|
|
GreenSky Inc. | X |
|
|
|
|
|
i3 Verticals LLC | X |
|
|
|
|
|
IBEX Ltd. |
|
|
| X |
|
|
International Money Express Inc. | X |
|
|
|
|
|
Mastercard Inc. | X |
|
|
|
|
|
Maximus Inc. | X |
|
|
|
|
|
Moneygram International Inc. | X |
|
|
|
|
|
Net 1 UEPS Technologies Inc. | X |
|
|
|
|
|
Paya Holdings Inc. | X |
|
|
|
|
|
Paychex Inc. | X |
|
|
|
|
|
Paypal Holdings Inc. | X |
|
|
|
|
|
Paysafe Ltd. | X |
|
|
|
|
|
PaySign Inc. | X |
|
|
|
|
|
PFSweb Inc. | X |
|
|
|
|
|
Priority Technology Holdings Inc. | X |
|
|
|
|
|
Qiwi PLC | X |
|
|
|
|
|
Repay Holdings Corp. | X |
|
|
|
|
|
Sabre Corp. | X |
|
|
|
|
|
Shift4 Payments Inc. | X |
|
|
|
|
|
StarTek Inc. | X |
|
|
|
|
|
Steel Connect Inc. | X |
|
|
|
|
|
StoneCo Ltd. | X |
|
|
|
|
|
Taskus Inc. | X |
|
|
|
|
|
The Hackett Group Inc. | X |
|
|
|
|
|
TTEC Holdings Inc. | X |
|
|
|
|
|
Verra Mobility Corp. | X |
|
|
|
|
|
Visa Inc. | X |
|
|
|
|
|
Western Union Co. | X |
|
|
|
|
|
WEX Inc. | X |
|
|
|
|
|
WidePoint Corp. | X |
|
|
|
|
|
WNS (Holdings) Ltd. | X |
|
|
|
|
|