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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2010



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number 000-21755





iGATE
CORPORATION

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|PENNSYLVANIA                                                   |  | 25-1802235                          
|(State or other jurisdiction
of incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               | 
|6528 Kaiser Drive
Fremont, CA                                  |  | 94555                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (510) 896-3015

Securities registered pursuant to Section 12(g) of the Act: None





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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.:



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  | x
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

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

The number of shares of the registrants Common Stock, par value $0.01 per share, outstanding as of June 30, 2010 was
55,557,299.









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iGATE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2010

TABLE OF CONTENTS



|                              |  |                                                                                                        |  |     
|----------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | ----
|                              |  |                                                                                                        |  | Page
|PART I. FINANCIAL INFORMATION |  | 3                                                                                                     
|                              |  |                                                                                                       
|Item 1.                       |  | Financial Statements:                                                                                  |  |     
|                              |  |                                                                                                       
|                              |  | Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2010 and 2009 |  | 3   
|                              |  |                                                                                                       
|                              |  | Condensed Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009                       |  | 4   
|                              |  |                                                                                                       
|                              |  | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009       |  | 5   
|                              |  |                                                                                                       
|                              |  | Notes to Unaudited Condensed Consolidated Financial Statements                                        |  | 6   
|                              |  |                                                                                                       
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                  |  | 18  
|                              |  |                                                                                                       
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                             |  | 23  
|                              |  |                                                                                                       
|Item 4.                       |  | Controls and Procedures                                                                                |  | 24  
|                              | 
|PART II. OTHER INFORMATION    |  | 25                                                                                                    
|                              |  |                                                                                                       
|Item 1A.                      |  | Risk Factors                                                                                           |  | 25  
|                              |  |                                                                                                       
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                            |  | 25  
|                              |  |                                                                                                       
|Item 4.                       |  | (Removed and Reserved)                                                                                 |  | 25  
|                              |  |                                                                                                       
|Item 6.                       |  | Exhibits                                                                                               |  | 25  
|                              | 
|SIGNATURES                    |  | 26                                                                                                    



2



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PART I. FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(unaudited)



|                                                              |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|------------------------------------------------------------- |  | -------------------------- | ------ | ---- | ------------------------ | ------ | ---- |  | ---- | ------- |  | - | ------ | -
|                                                              |  | Three Months EndedJune 30, |        |      | Six Months
EndedJune 30, |       
|                                                              |  | 2010                       |        | 2009 |                          |        | 2010 |  | 2009 |        
|Revenues                                                      |  | $                          | 66,849 |      | $                        | 46,831 |      |  | $    | 124,739 |  | $ | 91,640 |  
|Cost of revenues (exclusive of depreciation and amortization) |  |                            | 41,390 |      |                          | 28,943 |      |  |      | 76,068  |  |   | 57,662 |  
|                                                              |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|Gross margin                                                  |  |                            | 25,459 |      |                          | 17,888 |      |  |      | 48,671  |  |   | 33,978 |  
|Selling, general and administrative                           |  |                            | 11,843 |      |                          | 8,852  |      |  |      | 21,848  |  |   | 17,438 |  
|Depreciation and amortization                                 |  |                            | 2,126  |      |                          | 1,867  |      |  |      | 4,348   |  |   | 3,770  |  
|                                                              |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|Income from operations                                        |  |                            | 11,490 |      |                          | 7,169  |      |  |      | 22,475  |  |   | 12,770 |  
|Other income (expense), net                                   |  |                            | 976    |      |                          | (987   | )    |  |      | 1,808   |  |   | (1,740 | )
|                                                              |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|Income before income taxes                                    |  |                            | 12,466 |      |                          | 6,182  |      |  |      | 24,283  |  |   | 11,030 |  
|Income tax expense (benefit)                                  |  |                            | 1,312  |      |                          | 126    |      |  |      | 1,515   |  |   | (27    | )
|                                                              |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|Net income                                                    |  | $                          | 11,154 |      | $                        | 6,056  |      |  | $    | 22,768  |  | $ | 11,057 |  
|                                                              |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|                                                              |  |                            |        |     
|Distributed earnings per share:                               |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|Common stock                                                  |  | $                          |       |      | $                        |       |      |  | $    | 0.11    |  | $ | 0.11   |  
|Unvested restricted stock                                     |  |                            |       |      |                          |       |      |  |      | 0.11    |  |   | 0.11   |  
|                                                              |  |                            |        |     
|Basic earnings per share:                                     |  |                            |        |      |                          |        |      |  |      |         |  |   |        |  
|Common stock                                                  |  | $                          | 0.20   |      | $                        | 0.11   |      |  | $    | 0.41    |  | $ | 0.20   |  
|Unvested restricted stock                                     |  |                            | 0.20   |      |                          | 0.11   |      |  |      | 0.41    |  |   | 0.20   |  
|                                                              |  |                            |        |     
|Diluted earnings per share                                    |  | $                          | 0.20   |      | $                        | 0.11   |      |  | $    | 0.40    |  | $ | 0.20   |  

See accompanying
notes.



3



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iGATE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)



|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ------------------------- | - | ------- | -
|                                                                                                                                                                                                                                            |  | June 
30,2010(unaudited) |         |   | December 31,2009(audited) |  
|ASSETS                                                                                                                                                                                                                                      |  |                          |         |   |                           |   |         |  
|Current assets:                                                                                                                                                                                                                             |  |                          |         |   |                           |   |         |  
|Cash and cash equivalents                                                                                                                                                                                                                   |  | $                        | 18,854  |   |                           | $ | 29,565  |  
|Short-term investments                                                                                                                                                                                                                      |  |                          | 85,559  |   |                           |   | 67,192  |  
|Accounts receivable, net                                                                                                                                                                                                                    |  |                          | 32,941  |   |                           |   | 24,533  |  
|Unbilled revenues                                                                                                                                                                                                                           |  |                          | 13,613  |   |                           |   | 9,636   |  
|Prepaid expenses and other current assets                                                                                                                                                                                                   |  |                          | 4,702   |   |                           |   | 4,628   |  
|Foreign exchange derivative contracts                                                                                                                                                                                                       |  |                          | 381     |   |                           |   |        |  
|Prepaid income taxes                                                                                                                                                                                                                        |  |                          | 2,247   |   |                           |   | 4,247   |  
|Deferred tax assets                                                                                                                                                                                                                         |  |                          | 1,476   |   |                           |   | 31      |  
|Receivable from Mastech Holdings Inc.                                                                                                                                                                                                       |  |                          | 135     |   |                           |   | 87      |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|Total current assets                                                                                                                                                                                                                        |  |                          | 159,908 |   |                           |   | 139,919 |  
|                                                                                                                                                                                                                                            |  |                         
|Deposits and other assets                                                                                                                                                                                                                   |  |                          | 6,465   |   |                           |   | 4,482   |  
|Property and equipment, net                                                                                                                                                                                                                 |  |                          | 43,250  |   |                           |   | 42,682  |  
|Deferred tax assets                                                                                                                                                                                                                         |  |                          | 9,947   |   |                           |   | 8,474   |  
|Intangible assets, net                                                                                                                                                                                                                      |  |                          | 1,710   |   |                           |   | 2,086   |  
|Goodwill                                                                                                                                                                                                                                    |  |                          | 30,570  |   |                           |   | 30,517  |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|Total assets                                                                                                                                                                                                                                |  | $                        | 251,850 |   |                           | $ | 228,160 |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                                                                        |  |                          |         |   |                           |   |         |  
|Current liabilities:                                                                                                                                                                                                                        |  |                          |         |   |                           |   |         |  
|Accounts payable                                                                                                                                                                                                                            |  | $                        | 2,135   |   |                           | $ | 1,515   |  
|Accrued payroll and related costs                                                                                                                                                                                                           |  |                          | 14,135  |   |                           |   | 14,173  |  
|Other accrued liabilities                                                                                                                                                                                                                   |  |                          | 20,711  |   |                           |   | 18,003  |  
|Foreign exchange derivative contracts                                                                                                                                                                                                       |  |                          |        |   |                           |   | 1,097   |  
|Restructuring reserve                                                                                                                                                                                                                       |  |                          | 56      |   |                           |   | 101     |  
|Deferred revenue                                                                                                                                                                                                                            |  |                          | 865     |   |                           |   | 918     |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|Total current liabilities                                                                                                                                                                                                                   |  |                          | 37,902  |   |                           |   | 35,807  |  
|Other long-term liabilities                                                                                                                                                                                                                 |  |                          | 1,086   |   |                           |   | 1,035   |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|Total liabilities                                                                                                                                                                                                                           |  |                          | 38,988  |   |                           |   | 36,842  |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|                                                                                                                                                                                                                                            |  |                         
|Shareholders equity:                                                                                                                                                                                                                       |  |                          |         |   |                           |   |         |  
|Preferred shares, without par value: 20,000,000 shares authorized, 1 share held in treasury                                                                                                                                                 |  |                          |        |   |                           |   |        |  
|Common shares, par value $0.01 per share:                                                                                                                                                                                                   |  |                          |         |   |                           |   |         |  
|100,000,000 shares authorized, and 56,547,401 and 56,126,209 shares issued as of June 30, 2010 and December 31, 2009,
respectively and 55,557,299 and 55,136,107 shares outstanding as of June 30, 2010 and December 31, 2009, respectively |  |                          | 565     |   |                           |   | 561     |  
|Common shares held in treasury, at cost, 990,102 shares                                                                                                                                                                                     |  |                          | (14,714 | ) |                           |   | (14,714 | )
|Additional paid-in capital                                                                                                                                                                                                                  |  |                          | 183,023 |   |                           |   | 180,278 |  
|Retained earnings                                                                                                                                                                                                                           |  |                          | 54,920  |   |                           |   | 38,228  |  
|Accumulated other comprehensive loss                                                                                                                                                                                                        |  |                          | (10,932 | ) |                           |   | (13,035 | )
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|Total shareholders equity                                                                                                                                                                                                                  |  |                          | 212,862 |   |                           |   | 191,318 |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  
|Total liabilities and shareholders equity                                                                                                                                                                                                  |  | $                        | 251,850 |   |                           | $ | 228,160 |  
|                                                                                                                                                                                                                                            |  |                          |         |   |                           |   |         |  

See accompanying notes.



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iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)



|                                                                              |  |                           |         |   |      |   |         |  
|----------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------- | -
|                                                                              |  | Six Months endedJune 
30, |        
|                                                                              |  | 2010                      |         |   | 2009 |  
|Cash Flows From Operating Activities:                                         |  |                           |         |   |      |   |         |  
|Net income                                                                    |  | $                         | 22,768  |   |      | $ | 11,057  |  
|Adjustments to reconcile net income to cash provided by operating activities: |  |                           |         |   |      |   |         |  
|Depreciation and amortization                                                 |  |                           | 4,348   |   |      |   | 3,770   |  
|Stock based compensation                                                      |  |                           | 2,999   |   |      |   | 2,517   |  
|Realized gain on investments                                                  |  |                           | (1,130  | ) |      |   | (1,191  | )
|Provision for doubtful debts                                                  |  |                           | (34     | ) |      |   | 252     |  
|Deferred income taxes                                                         |  |                           | (2,937  | ) |      |   | (1,397  | )
|Gain on sale of fixed assets                                                  |  |                           | (1,137  | ) |      |   | (2      | )
|Gain on sale of investments in affiliate                                      |  |                           | (568    | ) |      |   |        |  
|Deferred rent                                                                 |  |                           | 77      |   |      |   | 55      |  
|Working capital items:                                                        |  |                           |         |   |      |   |         |  
|Accounts receivable and unbilled revenue                                      |  |                           | (12,979 | ) |      |   | 4,823   |  
|Prepaid and other assets                                                      |  |                           | (129    | ) |      |   | 1,264   |  
|Accounts payable                                                              |  |                           | 33      |   |      |   | (937    | )
|Accrued and other liabilities                                                 |  |                           | 5,019   |   |      |   | (304    | )
|Deferred revenue                                                              |  |                           | (41     | ) |      |   | 189     |  
|Restructuring reserve                                                         |  |                           | (45     | ) |      |   | (271    | )
|                                                                              |  |                           |         |   |      |   |         |  
|Net cash flows provided by operating activities                               |  |                           | 16,244  |   |      |   | 19,825  |  
|                                                                              |  |                           |         |   |      |   |         |  
|                                                                              |  |                          
|Cash Flows From Investing Activities:                                         |  |                           |         |   |      |   |         |  
|Purchase of property and equipment                                            |  |                           | (5,437  | ) |      |   | (5,207  | )
|Sale of property and equipment                                                |  |                           | 2,896   |   |      |   | 12      |  
|Purchase of investments                                                       |  |                           | (44,025 | ) |      |   | (35,017 | )
|Sale of investments                                                           |  |                           | 25,158  |   |      |   | 20,135  |  
|Receipts from (payments for) lease deposits                                   |  |                           | 181     |   |      |   | (218    | )
|Proceeds from sale of investments in affiliates                               |  |                           | 568     |   |      |   |        |  
|                                                                              |  |                           |         |   |      |   |         |  
|Net cash flows used in investing activities                                   |  |                           | (20,659 | ) |      |   | (20,295 | )
|                                                                              |  |                           |         |   |      |   |         |  
|                                                                              |  |                          
|Cash Flows From Financing Activities:                                         |  |                           |         |   |      |   |         |  
|Payments on capital leases                                                    |  |                           | (94     | ) |      |   | (84     | )
|Dividends paid                                                                |  |                           | (6,076  | ) |      |   | (5,960  | )
|Purchase of subsidiarys stock                                                |  |                           | (22     | ) |      |   | (54     | )
|Net proceeds from exercise of stock options                                   |  |                           | 323     |   |      |   | 240     |  
|Payment of withholding taxes related to restricted stock                      |  |                           | (865    | ) |      |   |        |  
|Tax benefits related to stock option exercises                                |  |                           | 288     |   |      |   | 165     |  
|                                                                              |  |                           |         |   |      |   |         |  
|Net cash flows used in financing activities                                   |  |                           | (6,446  | ) |      |   | (5,693  | )
|                                                                              |  |                           |         |   |      |   |         |  
|Effect of currency translation                                                |  |                           | 150     |   |      |   | (451    | )
|                                                                              |  |                           |         |   |      |   |         |  
|                                                                              |  |                          
|Net change in cash and cash equivalents                                       |  |                           | (10,711 | ) |      |   | (6,614  | )
|Cash and cash equivalents, beginning of period                                |  |                           | 29,565  |   |      |   | 30,878  |  
|                                                                              |  |                           |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                      |  | $                         | 18,854  |   |      | $ | 24,264  |  
|                                                                              |  |                           |         |   |      |   |         |  

See accompanying notes



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2010 AND 2009

(Amounts in thousands)

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of iGATE Corporation (iGATE or the Company)
have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial information and applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all
of the information and disclosures required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normally recurring adjustments) considered necessary
for a fair presentation have been included.

The accompanying balance sheet and financial information as of December 31,
2009 is derived from audited financial statements but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. The results of operations for the three and six
months ended June 30, 2010 are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Companys audited financial statements and notes thereto
included in its Annual Report on Form 10-K for the year ended December 31, 2009.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany accounts and
transactions have been eliminated.

Use of Estimates

Preparing financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. Interim results are not necessarily indicative of results for a full year.

2. Goodwill and Intangible Assets

The changes in the carrying value of goodwill for the six months ended June 30, 2010 (in thousands):



|                                    |  |        |       
|----------------------------------- |  | ------ | ------
|                                    |  | Amount
|                                    | 
|Goodwill as of December 31, 2009    |  | $      | 30,517
|Foreign currency translation effect |  |        | 53    
|                                    |  |        |       
|Goodwill as of June 30, 2010        |  | $      | 30,570
|                                    |  |        |       

Intangible assets relate to customer relationships.
The changes in the carrying value during for the six months ended June 30, 2010 (in thousands):



|                                          |  |        |       |  
|----------------------------------------- |  | ------ | ----- | -
|                                          |  | Amount |      
|                                          | 
|Intangible assets as of December 31, 2009 |  | $      | 2,086 |  
|Foreign currency translation effect       |  |        | 10    |  
|Amortization                              |  |        | (386  | )
|                                          |  |        |       |  
|Intangible assets as of June 30, 2010     |  | $      | 1,710 |  
|                                          |  |        |       |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



Amortization expenses related to identifiable intangible assets was $0.4 million and
$0.5 million for the six months ended June 30, 2010 and 2009, respectively. Future estimated annual amortization is as follows (in thousands):



|                  |  |        |      
|----------------- |  | ------ | -----
|                  |  | Amount
|Remainder of 2010 |  | $      | 382  
|2011              |  |        | 764  
|2012              |  |        | 564  
|                  |  |        |      
|                  |  | $      | 1,710
|                  |  |        |      

3. Income Taxes

The provision (benefit) for income taxes, as shown in the accompanying Condensed Consolidated Financial Statements, consists of the
following (in thousands):



|                                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|------------------------------------------ |  | --------------------------- | ------ | - | ------------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                           |  | Three Months EndedJune 
30, |        |   | Six Months EndedJune 
30, |  
|                                           |  | 2010                        |        |   | 2009                      |   |       | 2010 |  |   | 2009   |  
|Current provision :                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Federal                                    |  | $                           | 864    |   |                           | $ |      |      |  | $ | 895    |   |  | $ |       |  
|State                                      |  |                             | 100    |   |                           |   | 44    |      |  |   | 113    |   |  |   | 62     |  
|Foreign                                    |  |                             | 1,779  |   |                           |   | 999   |      |  |   | 3,425  |   |  |   | 1,445  |  
|                                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Total current provision                    |  |                             | 2,743  |   |                           |   | 1,043 |      |  |   | 4,433  |   |  |   | 1,507  |  
|                                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Deferred benefit :                         |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Federal                                    |  |                             |       |   |                           |   |      |      |  |   |       |   |  |   | (12    | )
|State                                      |  |                             |       |   |                           |   |      |      |  |   |       |   |  |   | (2     | )
|Foreign                                    |  |                             | (1,431 | ) |                           |   | (917  | )    |  |   | (2,918 | ) |  |   | (1,520 | )
|                                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Total deferred benefit                     |  |                             | (1,431 | ) |                           |   | (917  | )    |  |   | (2,918 | ) |  |   | (1,534 | )
|                                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Total provision (benefit) for income taxes |  | $                           | 1,312  |   |                           | $ | 126   |      |  | $ | 1,515  |   |  | $ | (27    | )
|                                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  

The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for
income taxes were as follows:



|                                                           |  |                                  |        |   |                                  |       |   |  |   |        |   |  |       |  
|---------------------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | ----- | - |  | - | ------ | - |  | ----- | -
|                                                           |  | Three Months EndedJune 
30, 2010 |        |   | Three Months EndedJune 
30, 2009 |      
|Income taxes computed at the federal statutory rate        |  | $                                | 4,363  |   |                                  | 35.0  | % |  | $ | 2,102  |   |  | 34.0  | %
|State income taxes, net of federal tax benefit             |  |                                  | 66     |   |                                  | 0.5   |   |  |   | 29     |   |  | 0.5   |  
|Benefit for untaxed foreign income, subject to tax holiday |  |                                  | (4,127 | ) |                                  | (33.1 | ) |  |   | (1,984 | ) |  | (32.1 | )
|Foreign taxes at other than U.S. statutory rate            |  |                                  | (79    | ) |                                  | (0.6  | ) |  |   | (205   | ) |  | (3.3  | )
|Unbenefited tax losses                                     |  |                                  | 702    |   |                                  | 5.6   |   |  |   | 170    |   |  | 2.7   |  
|Othernet                                                  |  |                                  | 387    |   |                                  | 3.1   |   |  |   | 14     |   |  | 0.2   |  
|                                                           |  |                                  |        |   |                                  |       |   |  |   |        |   |  |       |  
|                                                           |  | $                                | 1,312  |   |                                  | 10.5  | % |  | $ | 126    |   |  | 2.0   | %
|                                                           |  |                                  |        |   |                                  |       |   |  |   |        |   |  |       |  



7



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



|                                                           |  |                                |        |   |                                |       |   |  |   |        |   |  |       |   
|---------------------------------------------------------- |  | ------------------------------ | ------ | - | ------------------------------ | ----- | - |  | - | ------ | - |  | ----- | --
|                                                           |  | Six Months EndedJune 
30, 2010 |        |   | Six Months EndedJune 
30, 2009 |      
|Income taxes computed at the federal statutory rate        |  | $                              | 8,499  |   |                                | 35.0  | % |  | $ | 3,750  |   |  | 34.0  | % 
|State income taxes, net of federal tax benefit             |  |                                | 75     |   |                                | 0.3   |   |  |   | 40     |   |  | 0.4   |   
|Benefit for untaxed foreign income, subject to tax holiday |  |                                | (7,507 | ) |                                | (31.0 | ) |  |   | (4,222 | ) |  | (38.3 | ) 
|Foreign taxes at other than U.S. statutory rate            |  |                                | (194   | ) |                                | (0.8  | ) |  |   | (19    | ) |  | (0.2  | ) 
|Unbenefited tax losses                                     |  |                                | 334    |   |                                | 1.4   |   |  |   | 417    |   |  | 3.8   |   
|Othernet                                                  |  |                                | 308    |   |                                | 1.3   |   |  |   | 7      |   |  | 0.1   |   
|                                                           |  |                                |        |   |                                |       |   |  |   |        |   |  |       |   
|                                                           |  | $                              | 1,515  |   |                                | 6.2   | % |  | $ | (27    | ) |  | (0.2  | )%
|                                                           |  |                                |        |   |                                |       |   |  |   |        |   |  |       |   

Under the Indian Income Tax Act, 1961, our subsidiary iGATE Global Solutions Ltd. (iGS) is
eligible to claim a tax holiday for ten consecutive assessment years on profits derived from the export of software services from divisions registered under the Software Technology Parks at Bangalore and Noida. For the three and six months ended
June 30, 2010, the tax holiday benefits were $3.1 million and $5.6 million, respectively, as compared to $2.0 million and $4.2 million for the three and six months ended June 30, 2009, respectively, when calculated at the statutory US
rate. The majority of the remaining benefits will extend through March 2011. Non-operating income, such as interest income and capital gains income along with operating income to the extent of expiry of tax holiday is not included in the tax
holiday, and has been considered as part of our income tax provision.

In 2009, iGS set up units in Chennai and Hyderabad
Special Economic Zone (SEZ). Under the Indian Income Tax Act, 1961, iGS is eligible to claim income tax holiday of 100% for the initial five consecutive assessment years followed by 50% for the subsequent ten consecutive assessment years
on the profits derived from the export of software services from the divisions registered under the SEZ. For the three and six months ended June 30, 2010, the tax holiday resulted in income tax benefits of $1.0 million and $1.9 million,
respectively, when calculated at the US statutory rates.

4. Earnings Per Share

The Company computes earnings per share in accordance with ASC Topic 260, Earnings per shareand ASC Topic 260-10-45
Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. Basic earnings per share for the two classes of stock (common stock and unvested restricted stock) is calculated by dividing
net income by the weighted average number of shares of common stock and unvested restricted stock outstanding. Diluted earnings per share is computed using the weighted average number of common stock and unvested restricted stock plus the
potentially dilutive effect of common stock equivalents



8



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



Earnings per share for the common stock and the unvested restricted stock under the two
class method are presented below (dollars and shares in thousands, except per share data):



|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|------------------------------------------------------ |  | -------------------------- | ------ | ------------------------ | - | ------ |  | ---- | ------ |  | - | ------
|                                                       |  | Three Months EndedJune 30, |        | Six Months
EndedJune 30,
|                                                       |  | 2010                       |        | 2009                     |   | 2010   |  | 2009
|Net income                                             |  | $                          | 11,154 |                          | $ | 6,056  |  | $    | 22,768 |  | $ | 11,057
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|Less: Dividends paid on                                |  |                            |        |                          |   |        |  |      |        |  |   |       
|Common stock                                           |  |                            |       |                          |   |       |  |      | 6,076  |  |   | 5,894 
|Unvested restricted stock                              |  |                            |       |                          |   |       |  |      | 60     |  |   | 66    
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|                                                       |  |                            |       |                          |   |       |  |      | 6,136  |  |   | 5,960 
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|Undistributed Income                                   |  | $                          | 11,154 |                          | $ | 6,056  |  | $    | 16,632 |  | $ | 5,097 
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|Basic and diluted allocation of undistributed income : |  |                            |        |                          |   |        |  |      |        |  |   |       
|Common stock                                           |  | $                          | 11,082 |                          | $ | 5,989  |  | $    | 16,497 |  | $ | 5,040 
|Unvested restricted stock                              |  |                            | 72     |                          |   | 67     |  |      | 135    |  |   | 57    
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|                                                       |  | $                          | 11,154 |                          | $ | 6,056  |  | $    | 16,632 |  | $ | 5,097 
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|Weighted average shares outstanding:                   |  |                            |        |                          |   |        |  |      |        |  |   |       
|Common stock                                           |  |                            | 55,447 |                          |   | 54,264 |  |      | 55,234 |  |   | 54,224
|Unvested restricted stock                              |  |                            | 363    |                          |   | 611    |  |      | 455    |  |   | 611   
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|                                                       |  |                            | 55,810 |                          |   | 54,875 |  |      | 55,689 |  |   | 54,835
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|Weighted average common stock outstanding              |  |                            | 55,447 |                          |   | 54,264 |  |      | 55,234 |  |   | 54,224
|Dilutive effect of stock options outstanding           |  |                            | 1,670  |                          |   | 1,175  |  |      | 1,707  |  |   | 1,066 
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       
|Dilutive weighted average shares outstanding           |  |                            | 57,117 |                          |   | 55,439 |  |      | 56,941 |  |   | 55,290
|                                                       |  |                            |        |                          |   |        |  |      |        |  |   |       

The number of outstanding options to purchase common
shares for which the option exercise prices exceeded the average market price of the common shares aggregated 0.3 million and 0.7 million shares for the three months ended June 30, 2010 and 2009, respectively. The number of
outstanding options to purchase common shares for which the option exercise prices exceeded the average market price of the common shares aggregated 0.4 million and 0.8 million shares for the six months ended June 30, 2010 and 2009,
respectively. These options were excluded from the computation of diluted earnings per share under the treasury stock method.

5. Short
Term Investments



|                          |               |                         |                |  |   |           |   |  |   |       
|------------------------- | ------------- | ----------------------- | -------------- |  | - | --------- | - |  | - | ------
|                          |               | As of June 30, 2010    
|                          | CarryingValue |                         | UnrealizedGain |  |   | FairValue
|Money market mutual funds |               | $                       | 85,300         |  | $ | 259       |   |  | $ | 85,559
|                          |               |                         |                |  |   |           |   |  |   |       
|                          |              
|                          |               | As of December 31, 2009
|                          | CarryingValue |                         | UnrealizedLoss |  |   | FairValue
|Money market mutual funds |               | $                       | 67,579         |  | $ | (387      | ) |  | $ | 67,192
|                          |               |                         |                |  |   |           |   |  |   |       



9



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



6. Comprehensive Income

The components of comprehensive income (loss), net of tax, were as follows:



|                                                           |  |                             |        |   |                           |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------- |  | --------------------------- | ------ | - | ------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                           |  | Three Months EndedJune 
30, |        |   | Six Months EndedJune 
30, |  
|                                                           |  | 2010                        |        |   | 2009                      |   |        | 2010 |  |   | 2009   |  
|Net income                                                 |  | $                           | 11,154 |   |                           | $ | 6,056  |      |  | $ | 22,768 |   |  | $ | 11,057 |  
|Unrealized gain (loss) on investments                      |  |                             | 290    |   |                           |   | (1     | )    |  |   | 646    |   |  |   | (616   | )
|Unrecognized actuarial (loss) gain on defined benefit plan |  |                             | (9     | ) |                           |   | (126   | )    |  |   | 84     |   |  |   | (120   | )
|Change in fair value of derivative contracts               |  |                             | (976   | ) |                           |   | 4,756  |      |  |   | 1,649  |   |  |   | 4,553  |  
|Foreign currency translation                               |  |                             | (6,673 | ) |                           |   | 7,890  |      |  |   | (276   | ) |  |   | 2,158  |  
|                                                           |  |                             |        |   |                           |   |        |      |  |   |        |   |  |   |        |  
|Comprehensive income                                       |  | $                           | 3,786  |   |                           | $ | 18,575 |      |  | $ | 24,871 |   |  | $ | 17,032 |  
|                                                           |  |                             |        |   |                           |   |        |      |  |   |        |   |  |   |        |  

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss was as follows (in thousands):



|                                                                |  |              |         |   |                  |   |         |  
|--------------------------------------------------------------- |  | ------------ | ------- | - | ---------------- | - | ------- | -
|                                                                |  | As of        |        
|                                                                |  | June 30,2010 |         |   | December 31,2009 |  
|Unrealized gain (loss) on investment                            |  | $            | 259     |   |                  | $ | (387    | )
|Actuarial gain (loss) relating to defined benefit plan          |  |              | 39      |   |                  |   | (45     | )
|Unrealized gain (loss) on foreign exchange derivative contracts |  |              | 332     |   |                  |   | (1,317  | )
|Loss on foreign currency translation                            |  |              | (11,562 | ) |                  |   | (11,286 | )
|                                                                |  |              |         |   |                  |   |         |  
|                                                                |  | $            | (10,932 | ) |                  | $ | (13,035 | )
|                                                                |  |              |         |   |                  |   |         |  

7. Derivative Instruments and Hedging Activities

As part of the Companys on-going business operations, certain assets and forecasted transactions are exposed to foreign currency
risks due to fluctuations in exchange rate between the Rupee, CAD and USD. The objective for holding derivatives is to eliminate or reduce the impact of these exposures.

The Company enters into forward foreign exchange contracts to mitigate the risk of changes in foreign exchange rates on inter-company
transactions and forecasted transactions denominated in foreign currencies. Contracts are designated as cash flow hedges if they satisfy the criteria for hedge accounting under ASC Topic 815 Accounting for Derivative Instruments and Hedging
Activities The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects
earnings. The ineffective portion of the gain or loss of hedging instruments are recognized in the earnings of each period and are included in other income (expense), net.

The Company documents all relationships between hedging instruments including the risk management objectives and strategy for each
hedge transaction. In addition, formal assessment is done for effectiveness testing both at the inception of the hedge and on a quarterly basis. If it is determined that a derivative or a portion thereof is not highly effective as a hedge, or if a
derivative ceases to be a highly effective hedge, the Company will prospectively discontinue hedge accounting with respect to that derivative.

In all situations in which hedge accounting is discontinued and the derivative is retained, the derivative is continued to be carried at
its fair value on the balance sheet and any subsequent change in its fair value is recognized in the consolidated statement of income.



10



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



The following table presents information related to foreign currency contracts held:

OUTSTANDING HEDGE TRANSACTIONS AS OF JUNE 30, 2010 (in thousands)



|                              |  |                      |  |                                 |  |        |        |                                           |   |      |  
|----------------------------- |  | -------------------- |  | ------------------------------- |  | ------ | ------ | ----------------------------------------- | - | ---- | -
|                              |  | Maturity Date Ranges |  | Strike PriceAt Rupee RateRanges |  | Amount |        | Net UnrealizedGains (Losses)June 30, 2010 |  
|FORWARD CONTRACTS USD         |  |                      |  |                                 |  |        |        |                                           |   |      |  
|From:                         |  | 31-Jul-10            |  | 49.98                           |  |        |        |                                           |   |      |  
|To:                           |  | 31-Aug-10            |  | 50.20                           |  |        |        |                                           |   |      |  
|Subtotal                      |  |                      |  |                                 |  | $      | 2,000  |                                           | $ | 146  |  
|                              |  |                      |  |                                
|CURRENCY OPTION CONTRACTS USD |  |                      |  |                                 |  |        |        |                                           |   |      |  
|From:                         |  | 26-Jul-10            |  | 40.08                           |  |        |        |                                           |   |      |  
|To:                           |  | 30-Jun-11            |  | 52.36                           |  |        |        |                                           |   |      |  
|Subtotal                      |  |                      |  |                                 |  | $      | 61,350 |                                           |   | (249 | )
|                              |  |                      |  |                                
|CURRENCY OPTION CONTRACTS CAD |  |                      |  |                                 |  |        |        |                                           |   |      |  
|From:                         |  | 28-Jul-10            |  | 44.25                           |  |        |        |                                           |   |      |  
|To:                           |  | 27-Jun-11            |  | 45.70                           |  |        |        |                                           |   |      |  
|Subtotal                      |  |                      |  |                                 |  | $      | 33,390 |                                           |   | 435  |  
|                              |  |                      |  |                                 |  |        |        |                                           |   |      |  
|                              |  |                      |  |                                 |  |        |        |                                           | $ | 332  |  
|                              |  |                      |  |                                 |  |        |        |                                           |   |      |  

The forward contracts as of June 30, 2010 will all mature by August 31, 2010. As each contract
matures, USDs are sold at each contracted strike price and equivalent Indian Rupees received. The outstanding contracts meet the qualifying criteria to receive hedge accounting and have been deemed to be effective. As a result, the Company has
recorded accumulated other comprehensive gain of $0.1 million and $0.2 million as of June 30, 2010 and December 31, 2009, respectively.

The option contracts as of June 30, 2010 will all mature by June 30, 2011. As each contract matures, the Company will sell USDs
and CADs at each contracted strike price depending upon prevailing Rupee exchange rates. The outstanding contracts meet the qualifying criteria to receive hedge accounting and have been deemed to be effective. As a result, the Company has recorded
accumulated other comprehensive gain of $0.2 million and accumulated other comprehensive loss of $1.5 million as of June 30, 2010 and December 31, 2009, respectively. The unamortized premium on options of $0.05 million and $0.2 million is
disclosed as part of derivative asset and net of derivative liability as of June 30, 2010 and December, 31, 2009, respectively in the consolidated balance sheet.

The estimated net amount of existing gains as of June 30, 2010 that is expected to be reclassified from accumulated other
comprehensive income into earnings within next 12 months is $0.3 million.



11



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



The effect of Derivative Instruments on the Condensed Consolidated Statements of
Income for the three months ended June 30, 2010 (in thousands):



|                                |  |                                                     |     |                                                                     |                          |                                                                  |                                                                      |      |                                                              |  |                                                                   |  |  
|------------------------------- |  | --------------------------------------------------- | --- | ------------------------------------------------------------------- | ------------------------ | ---------------------------------------------------------------- | -------------------------------------------------------------------- | ---- | ------------------------------------------------------------ |  | ----------------------------------------------------------------- |  | -
|Derivatives as per ASC Topic815 |  | Amount 
ofGain/(Loss)recognized in OCIon Derivative |     | Location of
Gain/(Loss)reclassified fromAccumulated OCI
into Income |                          | Amount of Gain/(Loss)reclassified fromAccumulated OCIinto
Income |                                                                      |      | Location of
Gain/(Loss)
reclassified in
Income on
Derivative |  | Amount of Gain /(Loss)Reclassified fromAccumulated OCIinto
Income
|                                |  | (Effective Portion)                                 |     | (Effective Portion)                                                 |                          |                                                                  | (Ineffective Portion and amount excluded
from effectiveness testing)
|                                |  | June 30, 2010                                       |     | June 30, 2010                                                       |                          |                                                                  | June 30, 2010                                                       
|                                |  |                                                     |     |                                                                     |                         
|Foreign Exchange Contracts      |  | $                                                   | 332 |                                                                     | Other Income/ (expenses) |                                                                  | $                                                                    | (257 | )                                                            |  | Other Income/ (expenses)                                          |  | 

The effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the six months ended June 30,
2010 (in thousands):



|                                |  |                                                    |     |                                                                    |                          |                                                                  |                                                                     |        |                                                              |  |                                                                   |  |  
|------------------------------- |  | -------------------------------------------------- | --- | ------------------------------------------------------------------ | ------------------------ | ---------------------------------------------------------------- | ------------------------------------------------------------------- | ------ | ------------------------------------------------------------ |  | ----------------------------------------------------------------- |  | -
|Derivatives as per ASC Topic815 |  | Amount
ofGain/(Loss)recognized in OCIon Derivative |     | Location of
Gain/(Loss)reclassified fromAccumulated OCI intoIncome |                          | Amount 
ofGain/(Loss)reclassified fromAccumulated OCIinto Income |                                                                     |        | Location of
Gain/(Loss)
reclassified in
Income on
Derivative |  | Amount of Gain
/(Loss)Reclassified fromAccumulated OCIinto Income
|                                |  | (Effective Portion)                                |     | (Effective Portion)                                                |                          |                                                                  | (Ineffective Portion and amount excluded fromeffectiveness testing)
|                                |  | June 30, 2010                                      |     | June 30, 2010                                                      |                          |                                                                  | June 30, 2010                                                      
|                                |  |                                                    |     |                                                                    |                         
|Foreign Exchange Contracts      |  | $                                                  | 332 |                                                                    | Other Income/ (expenses) |                                                                  | $                                                                   | (1,015 | )                                                            |  | Other Income/ (expenses)                                          |  | 



12



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



Information on the location and amounts of derivative fair values in the Condensed
Consolidated Balance Sheets (in thousands):



|                                                                        |  |                        |  |                   |     |                        |                     |           |   |      
|----------------------------------------------------------------------- |  | ---------------------- |  | ----------------- | --- | ---------------------- | ------------------- | --------- | - | -----
|                                                                        |  | June 30, 2010          |  | December 31, 2009
|                                                                        |  | Balance Sheet
Location |  | FairValue         |     | Balance Sheet
Location |                     | FairValue
|Derivatives designated as hedging instruments under ASC Topic 815       |  |                        |  |                   |     |                        |                     |           |   |      
|                                                                        |  |                        |  |                  
|Foreign Exchange Contracts                                              |  | Current Assets         |  | $                 | 332 |                        | Current Liabilities |           | $ | 1,317
|                                                                        |  |                        |  |                   |     |                        |                     |           |   |      
|                                                                        |  |                        |  |                  
|Total Derivatives designated as hedging instruments under ASC Topic 815 |  |                        |  | $                 | 332 |                        |                     |           | $ | 1,317
|                                                                        |  |                        |  |                   |     |                        |                     |           |   |      

8. Fair Value Measurements

ASC Topic 820Fair Value Measurements establishes a three-tier value hierarchy, which prioritizes the inputs used in
the valuation methodologies in measuring fair value:

Level 1  Observable inputs that reflect quoted prices (unadjusted)
for identical assets or liabilities in active markets.

Level 2  Includes other inputs that are directly or indirectly
observable in the marketplace.

Level 3  Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. In accordance with ASC Topic 820, the Company measures cash equivalents, short term investments, non convertible debentures and foreign currency derivative contracts at fair value. Cash equivalents and
short term investments are primarily classified within Level 1 or Level 2. This is because the cash equivalents and short term investments are valued primarily using quoted market prices or alternative pricing sources and models utilizing market
observable inputs. The foreign currency derivative contracts and non convertible debentures are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets or
alternative pricing sources and models utilizing market observable inputs.



13



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



Assets and liabilities measured at fair value are summarized below (in thousands):



|                                      |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|------------------------------------- |  | ---------------------------------------------------- | ------ | ---------------------------------------------- | - | ------------------------------- |  | - | ----- |  | - | -
|Description                           |  | June 
30,2010                                        |        | Fair value measurement at reporting date using
|                                      |  | Quoted Prices in
Active Markets
for Identical
Assets |        | Significant
Other
Observable
Inputs            |   | Significant
Unobservable
Inputs
|                                      |  | (Level 1)                                            |        | (Level 2)                                      |   | (Level 3)                      
|Assets                                |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Short term investments:               |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Money market mutual funds             |  | $                                                    | 85,559 |                                                | $ | 85,559                          |  | $ |      |  | $ | 
|Foreign currency derivative contracts |  |                                                      | 381    |                                                |   |                                |  |   | 381   |  |   | 
|Non convertible debentures            |  |                                                      | 3,230  |                                                |   |                                |  |   | 3,230 |  |   | 
|                                      |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Total assets                          |  | $                                                    | 89,170 |                                                | $ | 85,559                          |  | $ | 3,611 |  | $ | 
|                                      |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|                                      |  |                                                     
|Description                           |  | December 31,2009                                     |        | Fair value measurement at reporting date using
|                                      |  | Quoted Prices inActive Marketsfor IdenticalAssets    |        | SignificantOtherObservableInputs               |   | SignificantUnobservableInputs  
|                                      |  | (Level 1)                                            |        | (Level 2)                                      |   | (Level 3)                      
|Assets                                |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Short term investments:               |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Money market mutual funds             |  | $                                                    | 67,192 |                                                | $ | 67,192                          |  | $ |      |  | $ | 
|                                      |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Total assets                          |  | $                                                    | 67,192 |                                                | $ | 67,192                          |  | $ |      |  | $ | 
|                                      |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Liabilities                           |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Other current liabilities             |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Foreign currency derivative contracts |  | $                                                    | 1,097  |                                                | $ |                                |  | $ | 1,097 |  | $ | 
|                                      |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  
|Total liabilities                     |  | $                                                    | 1,097  |                                                | $ |                                |  | $ | 1,097 |  | $ | 
|                                      |  |                                                      |        |                                                |   |                                 |  |   |       |  |   |  

ASC Topic 820, Fair Value
Measurements provides additional guidance on estimating fair value when the volume and level of transaction activity for an asset or liability have significantly decreased in relation to normal market activity for the asset or liability.
The ASC Topic 820 also provides additional guidance on circumstances that may indicate that a transaction is not orderly. The application of ASC Topic 820 did not have a significant impact on earnings or the financial position for the six months
ended June 30, 2010.

In January 2010, the Financial Accounting Standards Board (FASB) issued ASU No. 2010-06,
Fair Value Measurements and Disclosures. The amendments in this ASU apply to all entities that are required to make disclosure about the recurring and nonrecurring fair value measurements. An entity is required to disclose the
amounts of significant amount of transfers in, out and valuation techniques of level 1, level 2 and level 3 fair value measurements and describe the reasons for the transfers; and also present separately the information about the purchases, sales,
issuance and settlements in significant unobservable inputs in level 3 on gross basis. The guidance provided in this ASU is effective for the first reporting period (including interim periods) beginning after issuance. The Company adopted this ASU
and noted that it did not have any impact on its consolidated financial statements.



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



9. Employee Benefits

Defined Contribution Plan

The Companys eligible employees in India participate in the Employees Provident Fund (the Provident Fund), which
is a defined contribution plan. The employee and the Company make monthly contributions of a specified percentage of salary to the Provident Fund, which is administered by the prescribed authority in India. The aggregate contributions along with
interest thereon are paid at retirement, death, incapacitation or termination of employment. The Companys contribution to the Provident Fund for the three months ended June 30, 2010 and 2009 was $0.6 million and $0.4 million,
respectively. The Companys contribution for the six months ended June 30, 2010 and 2009 it was $1.2 million and $0.9 million, respectively.

401(k) Plan

Eligible
United States employees of the Company participate in an employee retirement savings plan (the Plan) under Section 401(k) of the United States Internal Revenue Code. The Plan allows for employees to defer a portion of their annual
earnings on a pre-tax basis through voluntary contributions to the Plan. The Plan does not provide for any Company matching.

Defined
Benefit Plan

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees in India.
The plan provides a lump sum payment to the vested employees at retirement, death, incapacitation or termination of employment subject to specified period of service, of an amount based on the respective employees salary and the tenure of
employment. Liabilities with regard to the plan are determined by actuarial valuation. The contributions are made to the Company administered trust and managed by a third party fund manager.

The following table sets forth the net periodic cost recognized by the Company in respect of such plan.



|                                      |  |                             |     |   |                           |   |     |      |  |   |      |   |  |   |     |  
|------------------------------------- |  | --------------------------- | --- | - | ------------------------- | - | --- | ---- |  | - | ---- | - |  | - | --- | -
|                                      |  | Three Months EndedJune 
30, |     |   | Six Months EndedJune 
30, |  
|                                      |  | 2010                        |     |   | 2009                      |   |     | 2010 |  |   | 2009 |  
|Net periodic plan cost                |  |                             |     |   |                           |   |     |      |  |   |      |   |  |   |     |  
|Service cost                          |  | $                           | 289 |   |                           | $ | 413 |      |  | $ | 504  |   |  | $ | 588 |  
|Interest cost                         |  |                             | 51  |   |                           |   | 40  |      |  |   | 103  |   |  |   | 62  |  
|Expected return on plan asset         |  |                             | (54 | ) |                           |   | (53 | )    |  |   | (108 | ) |  |   | (76 | )
|Recognized net actuarial (gain) loss  |  |                             | (11 | ) |                           |   | 2   |      |  |   | (6   | ) |  |   | 1   |  
|                                      |  |                             |     |   |                           |   |     |      |  |   |      |   |  |   |     |  
|Net periodic plan cost for the period |  | $                           | 275 |   |                           | $ | 402 |      |  | $ | 493  |   |  | $ | 575 |  
|                                      |  |                             |     |   |                           |   |     |      |  |   |      |   |  |   |     |  

10. Share-based compensation

During the three and six months ended June 30, 2010, the Company granted 295,000 and 479,238 stock options, respectively and 5,000
and 250,733 restricted stock awards, respectively. During the three and six months ended June 30, 2009, the Company granted nil and 6,000 stock options, respectively, and nil and 60,750 restricted stock awards, respectively.

The dividends paid on unvested restricted stock awards are charged to compensation cost. For the six months ended June 30, 2010 and
2009, the Company recorded $0.06 million and $0.07 million, respectively, as compensation cost for dividends paid on shares of unvested restricted stock.



15



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



Share-based compensation expense recorded in income from operations during the three and
six months ended June 30, 2010 and 2009 (in thousands):



|                                             |  |                             |       |                          |   |       |  |      |       |  |   |      
|-------------------------------------------- |  | --------------------------- | ----- | ------------------------ | - | ----- |  | ---- | ----- |  | - | -----
|                                             |  | Three Months EndedJune 
30, |       | Six Months EndedJune 30,
|                                             |  | 2010                        |       | 2009                     |   | 2010  |  | 2009
|Share-based compensation recorded in         |  |                             |       |                          |   |       |  |      |       |  |   |      
|Cost of revenues                            |  | $                           | 415   |                          | $ | 512   |  | $    | 859   |  | $ | 1,118
|Selling, general and administrative expense |  |                             | 1,385 |                          |   | 698   |  |      | 2,200 |  |   | 1,473
|                                             |  |                             |       |                          |   |       |  |      |       |  |   |      
|Total share-based compensation expense       |  | $                           | 1,800 |                          | $ | 1,210 |  | $    | 3,059 |  | $ | 2,591
|                                             |  |                             |       |                          |   |       |  |      |       |  |   |      

During the three months ended June 30, 2010 and
2009, the Company issued 0.4 million and 0.23 million shares, respectively upon exercise of stock options and awards. During the six months ended June 30, 2010 and 2009, the Company issued 0.5 million and 0.3 million shares,
respectively upon exercise of stock options and awards.

11. Other income (expense), net

Components of other income (expense) for the three and six months ended June 30, 2010 and 2009 (in thousands):



|                                         |  |                             |     |   |                          |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------------- |  | --------------------------- | --- | - | ------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                         |  | Three Months EndedJune 
30, |     |   | Six Months
EndedJune 30, |  
|                                         |  | 2010                        |     |   | 2009                     |   |        | 2010 |  |   | 2009   |  
|Investment income                        |  | $                           | 722 |   |                          | $ | 915    |      |  | $ | 1,193  |   |  | $ | 1,826  |  
|Interest expense                         |  |                             | (14 | ) |                          |   | (16    | )    |  |   | (33    | ) |  |   | (33    | )
|Foreign exchange gain (loss), net        |  |                             | 243 |   |                          |   | (2,001 | )    |  |   | (1,078 | ) |  |   | (3,778 | )
|Gain on sale of fixed assets             |  |                             | 19  |   |                          |   |       |      |  |   | 1,137  |   |  |   |       |  
|Gain on sale of investments in affiliate |  |                             |    |   |                          |   |       |      |  |   | 568    |   |  |   |       |  
|Other                                    |  |                             | 6   |   |                          |   | 115    |      |  |   | 21     |   |  |   | 245    |  
|                                         |  |                             |     |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Other income (expense), net              |  | $                           | 976 |   |                          | $ | (987   | )    |  | $ | 1,808  |   |  | $ | (1,740 | )
|                                         |  |                             |     |   |                          |   |        |      |  |   |        |   |  |   |        |  

12. Concentration of revenues

The following is a concentration of iGATE revenues greater than 10% by customer for the periods shown:



|                         |  |                             |   |  |                           |   |  |      |   |  |      |  
|------------------------ |  | --------------------------- | - |  | ------------------------- | - |  | ---- | - |  | ---- | -
|                         |  | Three Months EndedJune 
30, |   |  | Six Months EndedJune 
30, |  
|                         |  | 2010                        |   |  | 2009                      |   |  | 2010 |   |  | 2009 |  
|Royal Bank of Canada     |  | 36                          | % |  | 26                        | % |  | 35   | % |  | 24   | %
|General Electric Company |  | 20                          | % |  | 24                        | % |  | 20   | % |  | 24   | %



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010 AND 2009

(Amounts in thousands)



13. Commitments

Capital commitments

As of June 30, 2010, the Company has open purchase orders totaling $ 5.6 million to purchase property and equipment.

Bank guarantees

As of June 30, 2010, guarantees provided by banks on behalf of iGS to customs authorities aggregated to $0.4 million. These
guarantees have a remaining expiry term of approximately one to two years.

Other commitments

The Companys business process delivery centers in India are 100% Export Oriented units or Software Technology Parks of India units
(STPI) under the STPI guidelines issued by the Government of India. These units are exempted from customs, central excise duties, and levies on imported and indigenous capital goods, stores, and spares. The Company has executed legal
undertakings to pay custom duty, central excise duty, levies, and liquidated damages payable, if any, in respect of imported and indigenous capital goods, stores, and spares consumed duty free, in the event that certain terms and conditions are not
fulfilled.

The Company has entered into a service agreement with a customer that provides a customer the option, exercisable
at any time by providing 60 days notice to the Company to acquire an equity stake of up to 7% of the outstanding voting shares at fair market value. The fair market value is the volume weighted average trading price of the Companys
shares on the NASDAQ National Market for the five consecutive trading days immediately before the date on which the customer delivers its notice under the option. The option does not restrict the customer in any way from buying the Company shares in
the open market.

14. Recently Issued Accounting Pronouncements

In October 2009, the FASB issued ASU No. 2009-13 Revenue recognitionMultiple deliverable revenue
arrangements. The ASU provides amendments to the criteria in Revenue recognitionmultiple element arrangements for separating consideration in multiple element arrangements. The amendments in this ASU establish a selling
price hierarchy for determining the selling price of a deliverable. Further, the term fair value in the revenue guidance will be replaced with selling price to clarify that the allocation of revenue is based on entity-specific
assumptions rather than assumptions of a market place participant. The amendments in this ASU will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company is currently evaluating this ASU.

15. Subsequent Events

The Company has evaluated subsequent events through the date of filing the financial statements and no events have occurred from the
balance sheet date that would impact the Consolidated Financial Statements.



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##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Some of the statements in this Form 10-Q contain statements that are not historical facts and that constitute forward-looking
statements within the meaning of such term under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include our financial growth and liquidity projections as well as statements concerning our plans,
strategies, intentions and beliefs concerning our business, cash flows, costs and the markets in which we operate. Without limiting the foregoing, the words believes, anticipates, plans, expects and
similar expressions are intended to identify certain forward-looking statements. These forward-looking statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change.
There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. While we cannot predict all of the risks and uncertainties, they include, but are not limited to, our ability to predict our
financial performance, the level of market demand for our services, the highly-competitive market for the types of services that we offer, the impact of competitive factors on profit margins, market conditions that could cause our customers to
reduce their spending for our services, our ability to create, acquire and build new businesses and grow our existing businesses, our ability to attract and retain qualified personnel, our ability to reduce costs and conserve cash, currency
fluctuations and market conditions in India and elsewhere around the world, political and military tensions in India and Southern Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are
described in more detail in our filings with the Securities and Exchange Commission, including our Form 10-K (Form 10-K) for the year ended December 31, 2009.

Unless otherwise indicated or the context otherwise requires, all references in this report to iGATE, the
Company, us, our, or we are to iGATE Corporation, a Pennsylvania corporation, and its consolidated subsidiaries. iGATE Corporation, formerly named iGATE Capital Corporation, through its operating
subsidiaries, is a worldwide provider of Information Technology (IT) and IT enabled operations offshore outsourcing services to large and medium-sized organizations. These services include client/server design and development,
conversion/migration services, offshore outsourcing, enterprise resource planning (ERP) package implementation and integration services, software development and applications maintenance outsourcing.

Website Access to SEC Reports

The Companys website is http://www.igate.com. The Companys Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, current
reports on Form 8-K and any amendments to these reports are available free of charge on the Investors page of the Companys website as soon as reasonably practicable after the reports are filed electronically with the Securities and Exchange
Commission.

Business Overview

We are a worldwide outsourcing provider of IT and IT-enabled operations solutions and services. We believe our innovative approach of
integrating IT and IT-enabled operations and our ability to leverage a global delivery model provide our clients with clearly differentiated and demonstrated business value. We target large and medium-sized organizations across a diverse set of
industries, including financial services, insurance, manufacturing, media and healthcare.

Our service offerings include IT
and IT-enabled operations offshore outsourcing solutions and services to large and medium-sized organizations using an offshore/onsite model. These services include client/server design and development, conversion/migration services, offshore
outsourcing, enterprise resource planning (ERP) package implementation and integration services, software development and applications maintenance outsourcing. We also offer Integrated Technology and Operations (iTOPS)
solutions that integrate IT outsourcing and IT-enabled operations offshore outsourcing solutions and services seamlessly.

IT
services that we deliver using our offshore centers include software application development and maintenance, implementation and support of enterprise applications, package evaluation and implementation, re-engineering, data warehousing, business
intelligence, analytics, data management and integration, software testing and IT infrastructure management services. We believe that we deliver high quality solutions to our clients at a substantial savings by using our global pool of highly
talented people.

IT-enabled operations offshore outsourcing solutions and services offered include business process
outsourcing, transaction processing services and call center services. The call center services are offered to clients in several industries and are not industry specific. The transaction processing services offered are focused on the mortgage
banking, financial services, insurance and capital market industries, except for the delivery of finance and accounting functions such as accounts payable which can be performed for clients across all industries.

A majority of our clients have headquarters in North America and operate internationally. iGATE has 8,158 employees as of June 30,
2010.



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##### Table of Contents

iGATE markets its service offerings to large and medium-sized organizations. Certain
contracts are based upon a fixed price with payment based upon deliverables and/or project milestones reached. Certain contracts are time-and-materials based where contract payments are based on the number of consultant hours worked on the project.
Certain contracts with no stated deliverables have a designated workforce and are based on fixed periodic payments. Some process outsourcing contracts provide pricing per transaction. Customers typically have the right to cancel contracts with
minimal notice. Contracts with deliverables or project milestones can provide for certain penalties if the deliverables or project milestones are not met within contract timelines.

iGATE services customers in a wide range of industries. Our largest customer is Royal Bank of Canada which accounted for approximately
35% and 24% of revenues for the six months ended June 30, 2010 and 2009, respectively. Our second largest customer, General Electric Company (GE), accounted for approximately 20% and 24% of revenues for the six months ended
June 30, 2010 and 2009, respectively. iGATE is a Global Preferred Partner of GE.

Reportable Financial Segments

The Companys Chief Executive Officer who is the chief operating decision making officer (CODM)
reviews the operations of the Company on consolidated basis. As a result of this, the Company is operating as a single reportable segment.

Critical Accounting Policies

Our critical accounting policies are described in the summary of significant accounting policies as discussed in Note 1 of our Form 10-K.

Recently Issued Accounting Pronouncements

The following paragraph discusses recently issued accounting pronouncements.

In October 2009, the FASB issued ASU No. 2009-13 Revenue recognitionMultiple deliverable revenue
arrangements . The ASU provides amendments to the criteria in Revenue recognitionmultiple element arrangements for separating consideration in multiple element arrangements. The amendments in this ASU establish a selling
price hierarchy for determining the selling price of a deliverable. Further, the term fair value in the revenue guidance will be replaced with selling price to clarify that the allocation of revenue is based on entity-specific
assumptions rather than assumptions of a market place participant. The amendments in this ASU will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company is currently evaluating this ASU.

Results of Operations for the Three Months
Ended June 30, 2010 as Compared to the Three Months Ended June 30, 2009:

Revenues for the three months ended
June 30, 2010 were $66.8 million, an increase of $20.0 million, or 42.7%, as compared to $46.8 million for the three months ended June 30, 2009. Our revenue increase for the periods presented is directly attributable to a combination of
increased business with our recurring customers, favorable movement in currency markets and new customer wins. There was an increase in average billable headcount from 5,922 for the three months ended June 30, 2009 to 7,432 for the three months
ended June 30, 2010. Revenues increased due to the favorable movement in currency markets by 5.4%, increased volume by 32.9% and increased average blended realization rate by 4.4% for the three months ended June 30, 2010 as compared to the
three months ended June 30, 2009. Our top five customers accounted for 72.5% and 70.0% of the revenue for the three months ended June 30, 2010 and 2009, respectively.

The gross margin as a percentage of sales (gross margin percentage) was 38.1% for the three months ended June 30, 2010,
as compared to 38.2% for the three months ended June 30, 2009.

Selling, general and administrative expenses
(S,G&A) include all costs that are not directly associated with revenue-generating activities. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include selling, marketing and
administrative salaries and related employee benefits, travel, recruiting and training costs. Corporate costs include costs such as legal, accounting and outside consulting fees. Facilities costs primarily include rent and communications costs.

S,G&A costs for the three months ended June 30, 2010 were $11.8 million or 17.7% of revenues, as compared to $8.9
million or 18.9% of revenues for the three months ended June 30, 2009. Our net employee cost increased by $2.3 million for the three months ended June 30, 2010, as compared to three months ended June 30, 2009, mainly due to an
increase in salaries, bonus and benefits of $1.5 million, recruitment expense of $0.5 million, and travel expense and related costs of $0.3 million. Our net corporate cost increased by $0.5 million for the three months ended June 30, 2010 due
to increase in outside professional services, legal costs, marketing, accounting, insurance and administrative charges. Our net facilities costs increased by $0.2 million for the three months ended June 30, 2010, mainly due to increase in
rental and communication related expenses. The increase in S,G&A cost includes an unfavorable movement of the US Dollar against other currencies amounting to $0.4 million.



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##### Table of Contents

Depreciation and amortization costs for the three months ended June 30, 2010 were $2.1
million or 3.2% of revenues, as compared to $1.9 million or 4.0% of revenues for the three months ended June 30, 2009.

Operating income was 17.2% of revenue for the three months ended June 30, 2010 and 15.3% of revenue for the three months ended
June 30, 2009. This increase was primarily due to the increased revenue and operational efficiency.

Our investment
income for the three months ended June 30, 2010 totaled $0.7 million as compared to $0.9 million for the three months ended June 30, 2009. In 2010, our investments have been primarily in a dividend yielding money market mutual fund. The
Net Asset Value of the units tends to decrease on payment of the dividends leading to a loss on redemption of the units which has been compensated by the dividend income. In 2009, the investments were primarily in a high yield interest bearing fixed
income securities.

Other income is primarily comprised of the favorable foreign currency movements resulting in the reduction
of the realized loss on our hedges amounting to $0.3 million for the three months ended June 30, 2010 as compared to $2.5 million for the three months ended June 30, 2009.

Our income tax provision was $1.3 million and $0.1 million at an effective rate of 10.5% and 2.0% for the three months ended
June 30, 2010 and 2009, respectively. Several items caused variations from our statutory tax rate to the effective rate. iGS is eligible to claim a tax holiday on the majority of its operating income through March 31, 2011. Federal income
taxes, calculated at the U.S. statutory rate, totaled $4.4 million and $2.1 million for the three months ended June 30, 2010 and 2009, respectively. The Federal income taxes and the effective tax rate increased mainly due to higher income in
USA.

Taxable income for determining the income tax provision of iGS includes non operating income, such as interest income
and capital gains income and operating income of two units for which the tax holiday has expired. The tax holiday has resulted in a benefit of $4.1 million and $2.0 million for the three months ended June 30, 2010 and 2009, respectively. Due to
the tax rate variation in the foreign countries as compared to the US tax rate, our foreign operations resulted in a tax benefit of $0.1 million and $0.2 million for the three months ended June 30, 2010 and 2009, respectively.

Other variations typically arise because certain expenses or benefits recorded in our financial statements are either limited or
disallowed when calculating our income tax provision. Certain expenses such as meals and entertainment are limited for income tax purposes. Carry forward of NOLs will offset taxable income. The impact of the limited or disallowed items and benefit
of losses discussed above was $1.1 million and $0.2 million for the three months ended June 30, 2010 and 2009, respectively.

Results of Operations for the Six Months Ended June 30, 2010 as Compared to the Six Months Ended June 30, 2009:

Revenues for the six months ended June 30, 2010 were $124.7 million, an increase of $33.1 million, or 36.1%, as compared to
$91.6 million for the six months ended June 30, 2009. Our revenue increase for the periods presented is directly attributable to a combination of increased business with our recurring customers, favorable movement in currency markets and new
customer wins. There was an increase in average billable headcount from 6,026 for the six months ended June 30, 2009 to 7,069 for the six months ended June 30, 2010. Revenues increased due to the favorable movement in currency markets by
6.8%, increased volume by 27.5% and increased average blended realization rate by 1.8% for the six months ended June 30, 2010 as compared to the six months ended June 30, 2009. Our top five customers accounted for 72.6% and 69.1% of the
revenue for the six months ended June 30, 2010 and 2009, respectively.

The gross margin as a percentage of sales
(gross margin percentage) was 39.0% for the six months ended June 30, 2010, as compared to 37.1% for the six months ended June 30, 2009. The increase in gross margin percentage was primarily on account of favorable movement of the US
Dollar against other currencies.

Selling, general and administrative expenses (S,G&A) include all costs that
are not directly associated with revenue-generating activities. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include selling, marketing and administrative salaries and related employee benefits,
travel, recruiting and training costs. Corporate costs include costs such as legal, accounting and outside consulting fees. Facilities costs primarily include rent and communications costs.

S,G&A costs for the six months ended June 30, 2010 were $21.8 million or 17.5% of revenues, as compared to $17.4 million or 19.0% of
revenues for the six months ended June 30, 2009. Our net employee cost increased by $3.3 million for the six months ended June 30, 2010, as compared to six months ended June 30, 2009, mainly due to increase in salaries, bonus and benefits by $2.0
million , recruitment expense of $0.6 million, and travel and related costs of $0.6 million. Our net corporate cost increased by $0.7 million for the six months ended June 30, 2010 due to increase in outside professional services, legal, accounting
and administrative charges which was partly offset by a decrease in provision for doubtful debts. Our net facilities costs increased by $0.4 million for the six months ended June 30, 2010, mainly due to the increase in rental expense. The increase
in S,G&A cost includes an unfavorable movement of the US Dollar against other currencies amounting to $1.0 million.



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Depreciation and amortization costs for the six months ended June 30, 2010 were $4.3 million
or 3.5% of revenues, as compared to $3.8 million or 4.1% of revenues for the six months ended June 30, 2009.

Operating income
was 18.0% of revenue for the six months ended June 30, 2010 and 13.9% of revenue for the six months ended June 30, 2009. This increase was due primarily to the increase in revenues and increased operational efficiency.

Our investment income for the six months ended June 30, 2010 totaled $1.2 million as compared to $1.8 million for the six months
ended June 30, 2009. In 2010, our investments have been primarily in a dividend yielding money market mutual fund. The Net Asset Value of the units tends to decrease on the payment of the dividends leading to a loss on redemption of the units
which has been compensated by the dividend income. In 2009, the investments were primarily in a high yield interest bearing fixed income securities.

Other income is primarily comprised of the favorable foreign currency movements resulting in the reduction of the realized loss on our
hedges to $1.0 million for the six months ended June 30, 2010 as compared to $4.7 million for the six months ended June 30, 2009. The unfavorable foreign currency loss related to our intercompany debt in India and the remeasurement of the
current assets denominated in the foreign currency, amounting to $0.1 million for the six months ended June 30, 2010 as compared to the favourable foreign currency gain of $1.0 million for the six months ended June 30, 2009.

We recognized gain on sale of fixed assets of $1.1 million and gain on sale of investment in affiliate of $0.6 million during the six
months ended June 30, 2010

Our income tax provision was $1.5 million and tax benefit of $0.03 million at an effective
rate of 6.2% and 0.2% for the six months ended June 30, 2010 and 2009, respectively. Several items caused variations from our statutory tax rate to the effective rate. iGS is eligible to claim a tax holiday on the majority of its operating
income through March 31, 2011. Federal income taxes, calculated at the U.S. statutory rate, totaled $8.5 million and $3.8 million for the six months ended June 30, 2010 and 2009, respectively. The Federal income taxes and the effective tax
rate increased mainly due to higher income in USA.

Taxable income for determining the income tax provision of iGS includes
non operating income, such as interest income and capital gains income and operating income of two units for which the tax holiday has expired. The tax holiday resulted in a benefit of $7.5 million and $4.2 million for the six months ended
June 30, 2010 and 2009, respectively. Due to the tax rate variation in the foreign countries as compared to the US tax rate, our foreign operations resulted in a tax benefit of $0.2 million and $0.02 million for the six months ended June 30,
2010 and 2009, respectively.

Other variations typically arise because certain expenses or benefits recorded in our financial
statements are either limited or disallowed when calculating our income tax provision. Certain expenses such as meals and entertainment are limited for income tax purposes. Carry forward of NOLs will offset taxable income. The impact of the limited
or disallowed items and benefit of losses discussed above was $0.6 million and $0.4 million for the six months ended June 30, 2010 and 2009, respectively.

Liquidity and Capital Resources

Cash from Operations

Cash provided by operations was $16.2 million for the six months ended June 30, 2010. Factors contributing to our cash provided by
operations were income from operations of $22.8 million for the period and an increase of accrued and other liabilities of $5.0 million offset by an increase in prepaid and other assets $0.1 million, increase in accounts receivable and unbilled
receivables of $13.0 million. During the period, significant non-cash items totaled $4.5 million and included depreciation and amortization costs of $4.3 million and stock based compensation expense of $3.0 million offset by deferred income taxes of
$2.9 million.

Cash provided by operations was $19.8 million for the six months ended June 30, 2009. Factors contributing
to our cash provided by operations were income from operations of $11.1 million; a decrease of prepaid and other assets of $1.3 million and a decrease of accounts receivable and unbilled receivables of $4.8 million and an increase of deferred
revenue of $0.2 million offset by a decrease of accounts payable of $0.9 million, a decrease of accrued and other current liabilities of $0.3 million and decrease of restructuring reserve of $0.3 million. Significant non-cash items during the six
months ended June 30, 2009 totaled $5.2 million and included depreciation and amortization costs of $3.8 million, stock based compensation expense of $2.5 million, provision for bad and doubtful debt of $0.3 million, offset by deferred income
taxes of $1.4 million.



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Investing Activities

Cash used in investing activities for the six months ended June 30, 2010 was $20.7 million, as compared to cash used in investing
activities of $20.3 million for the six months ended June 30, 2009.

During the six months ended June 30, 2010, we
sold one of the office buildings located in Bangalore, India for a consideration of $2.8 million and incurred the capital expenditure of $5.4 million. Our capital expenditures was $5.2 million for the six months ended June 30, 2009.

We have increased our investment portfolios and other investments by $16.7 million and $14.9 million for the six month periods ended
June 30, 2010 and 2009, respectively.

Financing Activities

Cash used by financing activities for the six months ended June 30, 2010 was $6.4 million, as compared to $5.7 million for the six
months ended June 30, 2009. Dividends paid amounted to $6.1 million and $6.0 million for the six month periods ended June 30, 2010 and 2009, respectively.

The Companys cash and cash equivalents as of June 30, 2010 was $18.9 million. The Company believes that cash generated from
operations and its current cash reserves are adequate to meet the Companys reasonably foreseeable operating liquidity requirements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.



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##### Table of Contents

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Market Risk Factors

Market risk factors associated with our business are discussed in Item 7A in our Annual Report on Form 10-K for the year ended
December 31, 2009. There have been no material changes from the market risk factors previously disclosed in the Companys Form 10-K.

Effect of Hypothetical Currency Rate Fluctuations

Our primary net foreign currency exposure is the Rupee. The fair value of foreign exchange contracts is subject to changes in foreign
currency exchange rates.

As of June 30, 2010, the potential gain or loss in the fair value of iGS outstanding foreign
currency contracts assuming hypothetical 10%, 5%, 2% and 1% fluctuations in currency rates would be approximately:



|                       |  |                                                |        |                              |   |                                                |  |      |        |  |    |        |  |    |        |  |    |        |   |     |   |        |   |  |   |        |   |  |   |        |  
|---------------------- |  | ---------------------------------------------- | ------ | ---------------------------- | - | ---------------------------------------------- |  | ---- | ------ |  | -- | ------ |  | -- | ------ |  | -- | ------ | - | --- | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                       |  | Valuation given X% decreaseIn Rupee /
USD rate |        | Fair Valueas ofJune 30, 2010 |   | Valuation given X% increasein Rupee /
USD rate | 
|                       |  | (10%)                                          |        | (5%)                         |   | (2%)                                           |  | (1%) |        |  | 1% |        |  | 2% |        |  | 5% |        |   | 10% |  
|Rupee to U.S. Rate     |  |                                                | 41.801 |                              |   | 44.123                                         |  |      | 45.516 |  |    | 45.981 |  |    | 46.445 |  |    | 46.909 |   |     |   | 47.374 |   |  |   | 48.767 |   |  |   | 51.090 |  
|Derivative Instruments |  | $                                              | 11.1   |                              | $ | 5.4                                            |  | $    | 2.3    |  | $  | 1.3    |  | $  | 0.3    |  | $  | (0.6   | ) |     | $ | (1.6   | ) |  | $ | (4.3   | ) |  | $ | (8.5   | )

Seasonality

Our operations are generally not affected by seasonal fluctuations. However, our consultants billable hours are affected
by national holidays and vacation policies, which vary by country and by operating company.

Economic Trends and Outlook

According to the latest report by Gartner Inc., an IT research and advisory company, the Global IT Services industry
with worldwide IT spending revised its forecast to total $786 billion in 2010, a 2.9 % increase from 2009 revenue of nearly $763 billion.

With a global economic recovery widely anticipated, modest growth in IT spending is expected. The industry is aggressively pursuing
innovations that it expects to stimulate demand beyond such modest growth. A majority of our business comes from the United States and Canada. The situation has improved now with quarter on quarter revenue growth in the last five quarters. We
believe that our business model is somewhat diversified, both geographically and operationallywe serve both IT and IT enabled solutions. We believe our strategy of a global delivery model positions us well to provide a greater breadth of
services in catering to market needs and opportunities.



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##### Table of Contents

|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the
reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and
communicated to the Companys management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the
participation of Company management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to the Securities Exchange
Act of 1934 (Exchange Act) Rules 13a-15(b) and 15d-15(b). Based upon, and as of the date of this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companys disclosure controls and procedures
were effective. The results of managements assessment were reviewed with the Companys Audit Committee.

The
certification required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits 31.1 and 31.2, respectively, to this quarterly report on Form 10-Q.



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##### Table of Contents

PART II. OTHER INFORMATION



|ITEM 1A. | RISK FACTORS
|-------- | ------------

Other than
the risk factor set forth below, there are no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009.

Industry consolidation may cause us to lose key relationships and intensify competition.

Acquisitions or other consolidating transactions within our industry could harm us in a number of ways, including the loss of customers if
competitors consolidate with our current or potential customers, or our current competitors become stronger, or new competitors emerge from consolidations. Any of these events could put us at a competitive disadvantage, which could cause us to lose
customers, revenue and market share. Consolidation in our industry, or in related industries, could force us to expend greater resources to meet new or additional competitive threats, which could also harm our operating results.



|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

The Company granted shares of restricted common stock that allow statutory tax withholding obligations incurred upon vesting of those
shares to be satisfied by forfeiting a portion of those shares to the Company. The following table shows the shares acquired by the Company upon forfeiture of restricted shares during the quarter ended June 30, 2010.



|                 |  |                                           |  |                                       |       |                                                                                        |   |                                                                                                                   |  
|---------------- |  | ----------------------------------------- |  | ------------------------------------- | ----- | -------------------------------------------------------------------------------------- | - | ----------------------------------------------------------------------------------------------------------------- | -
|Period           |  | Total Number ofShares (or Units)Purchased |  | Average Price PaidPer Share (or Unit) |       | Total Number ofShares (or Units)Purchased as Partof PubliclyAnnounced
Plansor Programs |   | Maximum Number(or ApproximateDollar Value) ofShares (or Units) thatMay Yet
BePurchased Under thePlans or Programs
|April 1-30, 2010 |  | 71,679                                    |  | $                                     | 12.05 |                                                                                        |  |                                                                                                                   | 
|May 1-31, 2010   |  |                                          |  |                                       |      |                                                                                        |  |                                                                                                                   | 
|June 1-30, 2010  |  |                                          |  |                                       |      |                                                                                        |  |                                                                                                                   | 
|Total            |  | 71,679                                    |  | $                                     | 12.05 |                                                                                        |  |                                                                                                                   | 



|ITEM 4. | (REMOVED AND RESERVED)
|------- | ----------------------



|ITEM 6. | EXHIBITS
|------- | --------



|(a) | Exhibits
|--- | --------



|     |  |                                                                                                                                                                          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Form of performance share award agreement is filed herewith.                                                                                                             
|     | 
|10.2 |  | Performance Share Award Agreement by and between the company and Phaneesh Murthy dated March 30, 2010 is filed herewith.                                                 
|     | 
|10.3 |  | Performance Share Award Agreement by and between the company and Phaneesh Murthy dated March 30, 2010 is filed herewith.                                                 
|     | 
|31.1 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed herewith.                                                
|     | 
|31.2 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer is filed herewith.                                                
|     | 
|32.1 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed
herewith. 
|     | 
|32.2 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Chief Financial Officer is filed
herewith.



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 28th day of July 2010.



|              |  |  |  |                                                     
|------------- |  |  |  | ----------------------------------------------------
|              |  |  |  | iGATE CORPORATION                                   
|              |  | 
|July 28, 2010 |  |  |  | /S/    PHANEESH
MURTHY                              
|              |  |  |  | Phaneesh Murthy
Chief Executive Officer and Director
|              |  | 
|              |  |  |  | /S/    SUJIT
SIRCAR                                 
|              |  |  |  | Sujit Sircar
Chief Financial Officer                



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EXHIBIT INDEX



|     |  |                                                                                                                                                                         
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Form of performance share award agreement is filed herewith.                                                                                                            
|     | 
|10.2 |  | Performance Share Award Agreement by and between the company and Phaneesh Murthy dated March 30, 2010 is filed herewith.                                                
|     | 
|10.3 |  | Performance Share Award Agreement by and between the company and Phaneesh Murthy dated March 30, 2010 is filed herewith.                                                
|     | 
|31.1 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed herewith.                                               
|     | 
|31.2 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer is filed herewith.                                               
|     | 
|32.1 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed herewith.
|     | 
|32.2 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer is filed herewith.



27