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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 March 31, 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 $.01 per share, outstanding as of April 19, 2010 was
55,286,358.









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iGATE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2010

TABLE OF CONTENTS



|                              |  |                                                                                                      |  |     
|----------------------------- |  | ---------------------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                                      |  | Page
|PART I. FINANCIAL INFORMATION |  | 3                                                                                                   
|                              |  |                                                                                                     
|Item 1.                       |  | Financial Statements:                                                                                |  |     
|                              |  |                                                                                                     
|                              |  | Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2010 and 2009      |  | 3   
|                              |  |                                                                                                     
|                              |  | Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31,
2009                    |  | 4   
|                              |  |                                                                                                     
|                              |  | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 
31, 2010 and 2009 |  | 5   
|                              |  |                                                                                                     
|                              |  | Notes to Condensed Consolidated Financial Statements                                                |  | 6   
|                              |  |                                                                                                     
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations                |  | 15  
|                              |  |                                                                                                     
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                           |  | 19  
|                              |  |                                                                                                     
|Item 4.                       |  | Controls and Procedures                                                                              |  | 20  
|                              | 
|PART II. OTHER INFORMATION    |  | 21                                                                                                  
|                              |  |                                                                                                     
|Item 1A.                      |  | Risk Factors                                                                                         |  | 21  
|                              |  |                                                                                                     
|Item 6.                       |  | Exhibits                                                                                             |  | 21  
|                              | 
|SIGNATURES                    |  | 22                                                                                                  



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 EndedMarch 31, |       
|                                                              |  | 2010                        |        | 2009 |  
|Revenues                                                      |  | $                           | 57,890 |      | $ | 44,809 |  
|Cost of revenues (exclusive of depreciation and amortization) |  |                             | 34,678 |      |   | 28,719 |  
|                                                              |  |                             |        |      |   |        |  
|Gross margin                                                  |  |                             | 23,212 |      |   | 16,090 |  
|Selling, general and administrative                           |  |                             | 10,005 |      |   | 8,586  |  
|Depreciation and amortization                                 |  |                             | 2,222  |      |   | 1,903  |  
|                                                              |  |                             |        |      |   |        |  
|Income from operations                                        |  |                             | 10,985 |      |   | 5,601  |  
|Other income (expense), net                                   |  |                             | 832    |      |   | (753   | )
|                                                              |  |                             |        |      |   |        |  
|Income before income taxes                                    |  |                             | 11,817 |      |   | 4,848  |  
|Income tax expense (benefit)                                  |  |                             | 203    |      |   | (153   | )
|                                                              |  |                             |        |      |   |        |  
|Net income                                                    |  | $                           | 11,614 |      | $ | 5,001  |  
|                                                              |  |                             |        |      |   |        |  
|Distributed earnings per share:                               |  |                             |        |      |   |        |  
|Common stock                                                  |  | $                           | 0.11   |      | $ | 0.09   |  
|Unvested restricted stock                                     |  |                             | 0.11   |      |   | 0.09   |  
|Basic earnings per share                                      |  |                             |        |      |   |        |  
|Common stock                                                  |  | $                           | 0.21   |      | $ | 0.09   |  
|Unvested restricted stock                                     |  |                             | 0.21   |      |   | 0.09   |  
|Diluted earnings per share                                    |  | $                           | 0.20   |      | $ | 0.09   |  
|                                                              |  |                             |        |      |   |        |  

See accompanying notes.



3



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iGATE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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



|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                                                                                                              |  | March 
31,2010(unaudited) |         |   | December 31,2009 |  
|ASSETS                                                                                                                                                                                                                                        |  |                           |         |   |                  |   |         |  
|Current assets:                                                                                                                                                                                                                               |  |                           |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                                                                                                                     |  | $                         | 18,511  |   |                  | $ | 29,565  |  
|Short-term investments                                                                                                                                                                                                                        |  |                           | 81,800  |   |                  |   | 67,192  |  
|Accounts receivable, net                                                                                                                                                                                                                      |  |                           | 27,844  |   |                  |   | 24,533  |  
|Unbilled revenues                                                                                                                                                                                                                             |  |                           | 12,803  |   |                  |   | 9,636   |  
|Prepaid expenses and other current assets                                                                                                                                                                                                     |  |                           | 4,094   |   |                  |   | 4,628   |  
|Foreign exchange derivative contracts                                                                                                                                                                                                         |  |                           | 1,415   |   |                  |   |        |  
|Prepaid income taxes                                                                                                                                                                                                                          |  |                           | 3,704   |   |                  |   | 4,247   |  
|Deferred tax assets                                                                                                                                                                                                                           |  |                           | 35      |   |                  |   | 31      |  
|Receivable from Mastech Holdings Inc.                                                                                                                                                                                                         |  |                           | 134     |   |                  |   | 87      |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|Total current assets                                                                                                                                                                                                                          |  |                           | 150,340 |   |                  |   | 139,919 |  
|Deposits and other assets                                                                                                                                                                                                                     |  |                           | 4,846   |   |                  |   | 4,482   |  
|Property and equipment, net                                                                                                                                                                                                                   |  |                           | 43,173  |   |                  |   | 42,682  |  
|Deferred tax assets                                                                                                                                                                                                                           |  |                           | 10,304  |   |                  |   | 8,474   |  
|Intangible assets, net                                                                                                                                                                                                                        |  |                           | 1,965   |   |                  |   | 2,086   |  
|Goodwill                                                                                                                                                                                                                                      |  |                           | 31,606  |   |                  |   | 30,517  |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|Total assets                                                                                                                                                                                                                                  |  | $                         | 242,234 |   |                  | $ | 228,160 |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                                                                          |  |                           |         |   |                  |   |         |  
|Current liabilities:                                                                                                                                                                                                                          |  |                           |         |   |                  |   |         |  
|Accounts payable                                                                                                                                                                                                                              |  | $                         | 2,412   |   |                  | $ | 1,515   |  
|Accrued payroll and related costs                                                                                                                                                                                                             |  |                           | 11,947  |   |                  |   | 14,173  |  
|Other accrued liabilities                                                                                                                                                                                                                     |  |                           | 18,298  |   |                  |   | 18,003  |  
|Foreign exchange derivative contracts                                                                                                                                                                                                         |  |                           |        |   |                  |   | 1,097   |  
|Restructuring reserve                                                                                                                                                                                                                         |  |                           | 75      |   |                  |   | 101     |  
|Deferred revenue                                                                                                                                                                                                                              |  |                           | 509     |   |                  |   | 918     |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|Total current liabilities                                                                                                                                                                                                                     |  |                           | 33,241  |   |                  |   | 35,807  |  
|Other long-term liabilities                                                                                                                                                                                                                   |  |                           | 1,126   |   |                  |   | 1,035   |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|Total liabilities                                                                                                                                                                                                                             |  |                           | 34,367  |   |                  |   | 36,842  |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|Commitments (Note 13)                                                                                                                                                                                                                         |  |                           |         |   |                  |   |         |  
|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 56,268,784 and 56,126,209 shares issued as of March 31, 2010 and December 31, 2009,
respectively and 55,278,682 and 55,136,107 shares outstanding as of March 31, 2010 and December 31, 2009, respectively |  |                           | 563     |   |                  |   | 561     |  
|Common shares held in treasury, at cost, 990,102 shares                                                                                                                                                                                       |  |                           | (14,714 | ) |                  |   | (14,714 | )
|Additional paid-in capital                                                                                                                                                                                                                    |  |                           | 181,816 |   |                  |   | 180,278 |  
|Retained earnings                                                                                                                                                                                                                             |  |                           | 43,766  |   |                  |   | 38,228  |  
|Accumulated other comprehensive loss                                                                                                                                                                                                          |  |                           | (3,564  | ) |                  |   | (13,035 | )
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|Total shareholders equity                                                                                                                                                                                                                    |  |                           | 207,867 |   |                  |   | 191,318 |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                                                                                                                                                                    |  | $                         | 242,234 |   |                  | $ | 228,160 |  
|                                                                                                                                                                                                                                              |  |                           |         |   |                  |   |         |  

See accompanying notes.



4



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iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)



|                                                                              |  |                              |         |   |      |   |         |  
|----------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                              |  | Three Months endedMarch 
31, |        
|                                                                              |  | 2010                         |         |   | 2009 |  
|Cash Flows From Operating Activities:                                         |  |                              |         |   |      |   |         |  
|Net income                                                                    |  | $                            | 11,614  |   |      | $ | 5,001   |  
|Adjustments to reconcile net income to cash provided by operating activities: |  |                              |         |   |      |   |         |  
|Depreciation and amortization                                                 |  |                              | 2,222   |   |      |   | 1,903   |  
|Stock based compensation                                                      |  |                              | 1,199   |   |      |   | 1,308   |  
|Realized gain on investments                                                  |  |                              | (436    | ) |      |   | (517    | )
|Provision for doubtful debts                                                  |  |                              | 5       |   |      |   | 202     |  
|Deferred income taxes                                                         |  |                              | (1,493  | ) |      |   | (795    | )
|Gain on sale of fixed assets                                                  |  |                              | (1,118  | ) |      |   | (2      | )
|Gain on sale of investments in affiliate                                      |  |                              | (568    | ) |      |   |        |  
|Deferred rent                                                                 |  |                              | 62      |   |      |   | 7       |  
|Working capital items:                                                        |  |                              |         |   |      |   |         |  
|Accounts receivables and unbilled receivables                                 |  |                              | (6,240  | ) |      |   | 3,457   |  
|Prepaid and other assets                                                      |  |                              | 605     |   |      |   | 972     |  
|Accounts payable                                                              |  |                              | 181     |   |      |   | (389    | )
|Accrued and other liabilities                                                 |  |                              | (1,792  | ) |      |   | (2,447  | )
|Deferred revenue                                                              |  |                              | (421    | ) |      |   | 46      |  
|Restructuring reserve                                                         |  |                              | (26     | ) |      |   | (97     | )
|                                                                              |  |                              |         |   |      |   |         |  
|Net cash flows provided by operating activities                               |  |                              | 3,794   |   |      |   | 8,649   |  
|                                                                              |  |                              |         |   |      |   |         |  
|Cash Flows From Investing Activities:                                         |  |                              |         |   |      |   |         |  
|Purchase of property and equipment                                            |  |                              | (1,924  | ) |      |   | (2,381  | )
|Sale of property and equipment                                                |  |                              | 2,829   |   |      |   |        |  
|Purchase of investments                                                       |  |                              | (25,795 | ) |      |   | (21,521 | )
|Sale of investments                                                           |  |                              | 14,459  |   |      |   | 7,931   |  
|Payments for lease deposits                                                   |  |                              | (217    | ) |      |   | (262    | )
|Proceeds from sale of investments in affiliates                               |  |                              | 568     |   |      |   |        |  
|                                                                              |  |                              |         |   |      |   |         |  
|Net cash flows used in investing activities                                   |  |                              | (10,080 | ) |      |   | (16,233 | )
|Cash Flows From Financing Activities:                                         |  |                              |         |   |      |   |         |  
|Payments on capital leases                                                    |  |                              | (46     | ) |      |   | (42     | )
|Dividends paid                                                                |  |                              | (6,076  | ) |      |   | (5,960  | )
|Purchase of iGS stock and stock option settlement                             |  |                              | (10     | ) |      |   | (38     | )
|Net proceeds from exercise of stock options                                   |  |                              | 306     |   |      |   | 55      |  
|Tax benefits related to stock option exercises                                |  |                              | 34      |   |      |   | 3       |  
|                                                                              |  |                              |         |   |      |   |         |  
|Net cash flows used in by financing activities                                |  |                              | (5,792  | ) |      |   | (5,982  | )
|                                                                              |  |                              |         |   |      |   |         |  
|Effect of currency translation                                                |  |                              | 1,024   |   |      |   | (1,183  | )
|                                                                              |  |                              |         |   |      |   |         |  
|Net change in cash and cash equivalents                                       |  |                              | (11,054 | ) |      |   | (14,749 | )
|Cash and cash equivalents, beginning of period                                |  |                              | 29,565  |   |      |   | 30,878  |  
|                                                                              |  |                              |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                      |  | $                            | 18,511  |   |      | $ | 16,129  |  
|                                                                              |  |                              |         |   |      |   |         |  

See accompanying notes



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iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2010 AND 2009

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 the 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 months ended March 31, 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 three months ended March 2010 (in thousands):



|                                    |  |        |       
|----------------------------------- |  | ------ | ------
|                                    |  | Amount
|Goodwill as of December 31, 2009    |  | $      | 30,517
|Foreign currency translation effect |  |        | 1,089 
|                                    |  |        |       
|Goodwill as of March 31, 2010       |  | $      | 31,606
|                                    |  |        |       

Intangible assets comprised of customer relationships,
the changes in the carrying value during for the three months ended March 31, 2010 (in thousands):



|                                          |  |        |       |  
|----------------------------------------- |  | ------ | ----- | -
|                                          |  | Amount |      
|Intangible assets as of December 31, 2009 |  | $      | 2,086 |  
|Foreign currency translation effect       |  |        | 72    |  
|Amortization                              |  |        | (193  | )
|                                          |  |        |       |  
|Intangible assets as of March 31, 2010    |  | $      | 1,965 |  
|                                          |  |        |       |  



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iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



Amortization expenses related to identifiable intangible assets was $0.2 million and
$0.3 million for the three months period ended March 31, 2010 and 2009, respectively. Future estimated annual amortization is as follows (in thousands):



|                  |  |   |      
|----------------- |  | - | -----
|Remainder of 2010 |  | $ | 593  
|2011              |  |   | 790  
|2012              |  |   | 582  
|                  |  |   |      
|                  |  | $ | 1,965
|                  |  |   |      

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 EndedMarch 31, |       
|                                           |  | 2010                        |        |   | 2009 |  
|Current provision:                         |  |                             |        |   |      |   |      |  
|Federal                                    |  | $                           | 31     |   |      | $ |     |  
|State                                      |  |                             | 13     |   |      |   | 18   |  
|Foreign                                    |  |                             | 1,646  |   |      |   | 446  |  
|                                           |  |                             |        |   |      |   |      |  
|Total current provision                    |  |                             | 1,690  |   |      |   | 464  |  
|                                           |  |                             |        |   |      |   |      |  
|Deferred benefit:                          |  |                             |        |   |      |   |      |  
|Federal                                    |  |                             |       |   |      |   | (12  | )
|State                                      |  |                             |       |   |      |   | (2   | )
|Foreign                                    |  |                             | (1,487 | ) |      |   | (603 | )
|                                           |  |                             |        |   |      |   |      |  
|Total deferred benefit                     |  |                             | (1,487 | ) |      |   | (617 | )
|                                           |  |                             |        |   |      |   |      |  
|Total provision (benefit) for income taxes |  | $                           | 203    |   |      | $ | (153 | )
|                                           |  |                             |        |   |      |   |      |  

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



|                                                           |  |                                  |        |   |                                  |       |   |  |   |        |   |  |       |   
|---------------------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | ----- | - |  | - | ------ | - |  | ----- | --
|                                                           |  | Three Months EndedMarch 31, 2010 |        |   | Three Months EndedMarch 31, 2009 |      
|Income taxes computed at the federal statutory rate        |  | $                                | 4,136  |   |                                  | 35.0  | % |  | $ | 1,648  |   |  | 34.0  | % 
|State income taxes, net of federal tax benefit             |  |                                  | 9      |   |                                  | 0.1   |   |  |   | 11     |   |  | 0.2   |   
|Benefit for untaxed foreign income, subject to tax holiday |  |                                  | (3,380 | ) |                                  | (28.6 | ) |  |   | (2,238 | ) |  | (46.1 | ) 
|Foreign taxes (benefit) at other than U.S. statutory rate  |  |                                  | (115   | ) |                                  | (1.0  | ) |  |   | 186    |   |  | 3.8   |   
|Tax (benefit) on losses                                    |  |                                  | (368   | ) |                                  | (3.1  | ) |  |   | 247    |   |  | 5.1   |   
|Othernet                                                  |  |                                  | (79    | ) |                                  | (0.7  | ) |  |   | (7     | ) |  | (0.2  | ) 
|                                                           |  |                                  |        |   |                                  |       |   |  |   |        |   |  |       |   
|                                                           |  | $                                | 203    |   |                                  | 1.7   | % |  | $ | (153   | ) |  | (3.2  | )%
|                                                           |  |                                  |        |   |                                  |       |   |  |   |        |   |  |       |   

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, Chennai, Hyderabad and Noida. For the three
months ended March 31, 2010 and 2009, the tax holiday and the foreign taxes resulted in income tax benefits of $2.6 million and $2.1 million 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.



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iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



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 months ended March 31, 2010, the tax holiday and the foreign taxes resulted in income tax benefits of $0.9 million, when calculated at the
statutory US rate.

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.

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



|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|------------------------------------------------------ |  | --------------------------- | ----- | ---- | - | ------ |  | - | ----- |  | - | ------
|                                                       |  | Three Months EndedMarch 31,
|                                                       |  | 2010                        |       | 2009
|Net income from operations                             |  |                             |       |      | $ | 11,614 |  |   |       |  | $ | 5,001 
|Less: Dividends paid on                                |  |                             |       |      |   |        |  |   |       |  |   |       
|Common stock                                           |  | $                           | 6,076 |      |   |        |  | $ | 4,945 |  |   |       
|Unvested restricted stock                              |  |                             | 60    |      |   | 6,136  |  |   | 56    |  |   | 5,001 
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|Undistributed Income                                   |  |                             |       |      | $ | 5,478  |  |   |       |  | $ |      
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|Basic and diluted allocation of undistributed income : |  |                             |       |      |   |        |  |   |       |  |   |       
|Common stock                                           |  |                             |       |      | $ | 5,426  |  |   |       |  | $ |      
|Unvested restricted stock                              |  |                             |       |      |   | 52     |  |   |       |  |   |      
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|                                                       |  |                             |       |      | $ | 5,478  |  |   |       |  | $ |      
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|Weighted average shares outstanding:                   |  |                             |       |      |   |        |  |   |       |  |   |       
|Common stock                                           |  |                             |       |      |   | 55,234 |  |   |       |  |   | 54,184
|Unvested restricted stock                              |  |                             |       |      |   | 527    |  |   |       |  |   | 655   
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|                                                       |  |                             |       |      |   | 55,761 |  |   |       |  |   | 54,839
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|Weighted average common stock outstanding              |  |                             |       |      |   | 55,234 |  |   |       |  |   | 54,184
|Dilutive effect of stock options outstanding           |  |                             |       |      |   | 1,488  |  |   |       |  |   | 955   
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       
|Dilutive weighted average shares outstanding           |  |                             |       |      |   | 56,722 |  |   |       |  |   | 55,139
|                                                       |  |                             |       |      |   |        |  |   |       |  |   |       

Distributed earnings per share have been restricted to
the amount of net income for the quarter ended March 31, 2009. 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 1.0 million shares for the three months ended March 31, 2010 and 2009, respectively. These options were excluded from the computation of diluted earnings per share under the treasury stock method.



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



5. Short Term Investments

The components of the Companys short term investments as of March 31, 2010 and March 31, 2009 are as follows:



|                          |               |                         |                 |  |   |            |   |  |   |       
|------------------------- | ------------- | ----------------------- | --------------- |  | - | ---------- | - |  | - | ------
|                          |               | As of March 31, 2010   
|                          | CarryingValue |                         | Unrealized Loss |  |   | Fair Value
|Short term investments:   |               |                         |                 |  |   |            |   |  |   |       
|Money market mutual funds |               | $                       | 81,832          |  | $ | (32        | ) |  | $ | 81,800
|                          |               |                         |                 |  |   |            |   |  |   |       
|                          |               | $                       | 81,832          |  | $ | (32        | ) |  | $ | 81,800
|                          |               |                         |                 |  |   |            |   |  |   |       
|                          |              
|                          |               | As of December 31, 2009
|                          | CarryingValue |                         | Unrealized Loss |  |   | Fair Value
|Short term investments:   |               |                         |                 |  |   |            |   |  |   |       
|Money market mutual funds |               | $                       | 67,579          |  | $ | (387       | ) |  | $ | 67,192
|                          |               |                         |                 |  |   |            |   |  |   |       
|                          |               | $                       | 67,579          |  | $ | (387       | ) |  | $ | 67,192
|                          |               |                         |                 |  |   |            |   |  |   |       

6. Comprehensive Income (Loss)

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



|                                                 |  |                             |        |      |   |        |  
|------------------------------------------------ |  | --------------------------- | ------ | ---- | - | ------ | -
|                                                 |  | Three Months EndedMarch 31, |       
|                                                 |  | 2010                        |        | 2009 |  
|Net income                                       |  | $                           | 11,614 |      | $ | 5,001  |  
|Unrealized gain (loss) on investments            |  |                             | 356    |      |   | (566   | )
|Unrecognized actuarial gain on pension liability |  |                             | 93     |      |   | 6      |  
|Change in fair value of cash flow hedges         |  |                             | 2,625  |      |   | (181   | )
|Foreign currency translation                     |  |                             | 6,397  |      |   | (5,803 | )
|                                                 |  |                             |        |      |   |        |  
|Comprehensive income (loss)                      |  | $                           | 21,085 |      | $ | (1,543 | )
|                                                 |  |                             |        |      |   |        |  

Accumulated Other Comprehensive Loss

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



|                                                                |  |           |        |   |              |   |         |  
|--------------------------------------------------------------- |  | --------- | ------ | - | ------------ | - | ------- | -
|                                                                |  | As of     |       
|                                                                |  | March 31, |        |   | December 31, |  
|                                                                |  | 2010      |        |   | 2009         |  
|Loss on foreign currency translation adjustment                 |  | $         | (4,889 | ) |              | $ | (11,286 | )
|Unrealized gain (loss) on foreign exchange derivative contracts |  |           | 1,308  |   |              |   | (1,317  | )
|Unrealized loss on investment                                   |  |           | (31    | ) |              |   | (387    | )
|Actuarial gain (loss) relating to defined benefit plan          |  |           | 48     |   |              |   | (45     | )
|                                                                |  |           |        |   |              |   |         |  
|                                                                |  | $         | (3,564 | ) |              | $ | (13,035 | )
|                                                                |  |           |        |   |              |   |         |  



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



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.

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

OUTSTANDING HEDGE TRANSACTIONS ON MARCH 31, 2010 (in thousands)



|                              |  |                      |  |                                 |  |        |        |                                    |   |      
|----------------------------- |  | -------------------- |  | ------------------------------- |  | ------ | ------ | ---------------------------------- | - | -----
|                              |  | Maturity Date Ranges |  | Strike PriceAt Rupee RateRanges |  | Amount |        | Net UnrealizedGainsMarch 
31, 2010
|FORWARD CONTRACTS USD         |  |                      |  |                                 |  |        |        |                                    |   |      
|From:                         |  | 30-Apr-2010          |  | 42.40                           |  |        |        |                                    |   |      
|To:                           |  | 31-Aug-2010          |  | 50.20                           |  |        |        |                                    |   |      
|Subtotal                      |  |                      |  |                                 |  | $      | 4,500  |                                    | $ | 385  
|CURRENCY OPTION CONTRACTS USD |  |                      |  |                                 |  |        |        |                                    |   |      
|From:                         |  | 21-Apr-2010          |  | 40.02                           |  |        |        |                                    |   |      
|To:                           |  | 30-June-2011         |  | 52.36                           |  |        |        |                                    |   |      
|Subtotal                      |  |                      |  |                                 |  |        | 59,250 |                                    |   | 774  
|CURRENCY OPTION CONTRACTS CAD |  |                      |  |                                 |  |        |        |                                    |   |      
|From:                         |  | 28-Apr-2010          |  | 44.25                           |  |        |        |                                    |   |      
|To:                           |  | 30-Mar-2011          |  | 45.00                           |  |        |        |                                    |   |      
|Subtotal                      |  |                      |  |                                 |  | $      | 29,027 |                                    |   | 149  
|                              |  |                      |  |                                 |  |        |        |                                    |   |      
|                              |  |                      |  |                                 |  |        |        |                                    | $ | 1,308
|                              |  |                      |  |                                 |  |        |        |                                    |   |      

The forward contracts as of March 31, 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 $0.4 million and $0.2 million as on March 31, 2010 and December 31, 2009, respectively.



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iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



The option contracts as of March 31, 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 $0.9 million and other comprehensive loss of $1.5 million as on March 31, 2010 and December 31, 2009, respectively. The unamortized premium on options
amounted to $0.1 million and $0.2 million as of March 31, 2010 and December 31, 2009, respectively, and it is disclosed as derivative asset and net of derivative liability as of March 31, 2009 and December, 31, 2009, respectively in
the consolidated balance sheet.

The estimated net amount of existing gains as on March 31, 2010 that is expected to be
reclassified from accumulated other comprehensive income into earnings within next 12 months is $1.3 million.

The
effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the quarter ended March 31, 2010 (in thousands):



|                                                          |  |                                                    |       |                                                                    |                         |                                                                  |                                                                                    |      |                                                          |  |                                                                  |  |   |  
|--------------------------------------------------------- |  | -------------------------------------------------- | ----- | ------------------------------------------------------------------ | ----------------------- | ---------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ---- | -------------------------------------------------------- |  | ---------------------------------------------------------------- |  | - | -
|Derivatives inASC Topic 815 CashFlow
HedgingRelationships |  | Amount ofGain/(Loss)recognized in OCIon Derivative |       | Location of Gain/(Loss)reclassified fromAccumulated OCIinto Income |                         | Amount of Gain/(Loss)reclassified fromAccumulated OCIinto Income |                                                                                    |      | Location ofGain/(Loss)reclassified inIncome onDerivative |  | Amount of Gain/(Loss)Reclassified fromAccumulatedOCI into
Income
|                                                          |  | (Effective Portion)March 31, 2010                  |       | (Effective Portion)March 31,
2010                                  |                         |                                                                  | (Ineffective Portion and amountexcluded from effectiveness 
testing)March 31, 2010
|Foreign ExchangeContracts                                 |  | $                                                  | 1,308 |                                                                    | Other Income/(expenses) |                                                                  | $                                                                                  | (758 | )                                                        |  | Other Income/(expenses)                                          |  | $ | 

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



|                                                                        |  |                        |  |            |      
|----------------------------------------------------------------------- |  | ---------------------- |  | ---------- | -----
|                                                                        |  | March 31, 2010        
|Derivatives designated as hedging instruments under ASC Topic 815       |  | Balance Sheet Location |  | Fair Value
|Foreign Exchange Contracts                                              |  | Current Assets         |  | $          | 1,415
|                                                                        |  |                        |  |            |      
|Total Derivatives designated as hedging instruments under ASC Topic 815 |  |                        |  | $          | 1,415
|                                                                        |  |                        |  |            |      

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 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 are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets.



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



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



|                                      |  |                                                   |        |                                                |   |                               |  |   |       |  |   |  
|------------------------------------- |  | ------------------------------------------------- | ------ | ---------------------------------------------- | - | ----------------------------- |  | - | ----- |  | - | -
|Description                           |  | March 31,2010                                     |        | 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             |  | $                                                 | 81,800 |                                                | $ | 81,800                        |  | $ |      |  | $ | 
|Foreign currency derivative contracts |  |                                                   | 1,415  |                                                |   |                              |  |   | 1,415 |  |   | 
|                                      |  |                                                   |        |                                                |   |                               |  |   |       |  |   |  
|Total assets                          |  | $                                                 | 83,215 |                                                | $ | 81,800                        |  | $ | 1,415 |  | $ | 
|                                      |  |                                                   |        |                                                |   |                               |  |   |       |  |   |  

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 three months
ended March 31, 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 is 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.

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 March 31, 2010 and 2009 was $0.6 million and $0.5 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.



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iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



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 (in thousands):



|                                      |  |                              |     |   |      |   |     |  
|------------------------------------- |  | ---------------------------- | --- | - | ---- | - | --- | -
|                                      |  | Three Months EndedMarch 
31, |    
|                                      |  | 2010                         |     |   | 2009 |  
|Net periodic plan cost                |  |                              |     |   |      |   |     |  
|Service cost                          |  | $                            | 215 |   |      | $ | 175 |  
|Interest cost                         |  |                              | 52  |   |      |   | 22  |  
|Expected return on plan asset         |  |                              | (54 | ) |      |   | (23 | )
|Recognized net actuarial gain         |  |                              | 5   |   |      |   | (1  | )
|                                      |  |                              |     |   |      |   |     |  
|Net periodic plan cost for the period |  | $                            | 218 |   |      | $ | 173 |  
|                                      |  |                              |     |   |      |   |     |  

10. Share-based compensation

During the three months ended March 31, 2010 and 2009, the Company granted 184,238 and 6,000 options, respectively. During the three
months ended March 31, 2010 and 2009, the Company granted 245,733 and 60,750 stock awards, respectively.

The dividends
paid on unvested restricted stock awards are charged to compensation cost. The Company recorded $0.06 million and $0.07 million as compensation cost for dividends paid on shares of unvested restricted stock for the three months period ended
March 31, 2010 and 2009, respectively.

Share-based compensation expense recorded in income from operations during the
three months ended March 31, 2010 and 2009 (in thousands):



|                                            |  |                             |       |      |   |      
|------------------------------------------- |  | --------------------------- | ----- | ---- | - | -----
|                                            |  | Three Months EndedMarch 31,
|                                            |  | 2010                        |       | 2009
|Share-based compensation recorded in        |  |                             |       |      |   |      
|Cost of revenues                            |  | $                           | 444   |      | $ | 606  
|Selling, general and administrative expense |  |                             | 815   |      |   | 775  
|                                            |  |                             |       |      |   |      
|Total share-based compensation expense      |  | $                           | 1,259 |      | $ | 1,381
|                                            |  |                             |       |      |   |      

During the three months ended March 31, 2010 and
2009, the Company issued 0.14 million and 0.03 million shares, respectively upon exercise of stock options and awards.

11. Other income (expense), net

Components of other income (expense) for the three months ended March 31, 2010 and 2009 (in thousands):



|                             |  |                             |        |   |      |   |        |  
|---------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                             |  | Three Months EndedMarch 31, |       
|                             |  | 2010                        |        |   | 2009 |  
|Investment income            |  | $                           | 471    |   |      | $ | 911    |  
|Interest expense             |  |                             | (19    | ) |      |   | (17    | )
|Foreign exchange loss        |  |                             | (1,321 | ) |      |   | (1,777 | )
|Gain on sale of fixed assets |  |                             | 1,118  |   |      |   | 2      |  
|Other                        |  |                             | 583    |   |      |   | 128    |  
|                             |  |                             |        |   |      |   |        |  
|Other income (expense), net  |  | $                           | 832    |   |      | $ | (753   | )
|                             |  |                             |        |   |      |   |        |  



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

MARCH 31, 2010 AND 2009



12. Concentration of revenues

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



|                         |  |                             |   |  |      |  
|------------------------ |  | --------------------------- | - |  | ---- | -
|                         |  | Three Months EndedMarch 31, |  
|                         |  | 2010                        |   |  | 2009 |  
|Royal Bank of Canada     |  | 33                          | % |  | 23   | %
|General Electric Company |  | 20                          | % |  | 24   | %

13. Commitments

Capital commitments

As of March 31, 2010, the Company has open purchase orders totaling $1.8 million to purchase property and equipment.

Bank guarantees

As of March 31, 2010, performance guarantees provided by banks on behalf of iGS to customs aggregated to $0.5 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 or SEZ under the SEZ 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.

iGS, a subsidiary of the Company, has entered into a service agreement with a
customer that provides the customer the option to take an equity stake in iGS for up to 7% of iGSs outstanding voting shares at fair market value. The customer may purchase iGS shares solely at their discretion and must notify iGS of their
intention to purchase within thirty days of the purchase.

14. 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.

15. 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.



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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 7,357 employees as of March 31,
2010.



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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
33% and 23% of revenues for the three months ended March 31, 2010 and March 31, 2009, respectively. Our second largest customer, General Electric Company (GE), accounted for approximately 20% and 24% of revenues for the three
months ended March 31, 2010 and 2009, respectively. iGATE is a Global Preferred Partner of RBC and GE.

Reportable
Financial Segments

The Companys Chief Executive Officer who is the chief decision making officer 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 polices 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 discuss 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 from Operations for
the Three Months Ended March 31, 2010 as Compared to the Three Months Ended March 31, 2009:

Revenues for the
three months ended March 31, 2010 were $57.9 million, an increase of $13.1 million or 29.2%, as compared to $44.8 million for the three months ended March 31, 2009. Our revenue increase for the periods presented is directly attributable to
a combination of new customer wins, increased business with our recurring customers and favorable movement in currency markets. There was an increase in average billable headcount from 6,130 for the three months ended March 31, 2009 to 6,705
for the three months ended March 31, 2010. Revenues increased due to the favorable movement in currency markets by 8.9% and increased volume by 22.0% which was partly reduced by the decreased average blended realization rate by 1.7% for the
three months ended March 31, 2010 as compared to the three months ended March 31, 2009. Our top five customers accounted for 72.7% and 68.2% of the revenue for the three months ended March 31, 2010 and 2009, respectively.

The gross margin as a percentage of revenues (gross margin percentage) was 40.1% for the three months March 31, 2010, as
compared to 35.9% for the three months ended March 31, 2009. Increase in gross margin percentage was primarily on account of improved utilization and strengthening of other currencies against the US Dollar. The utilization rate increased to
84.9% for the three months ended March 31, 2010 as compared to 81.3% for the three months ended March 31, 2009. The gross margin increased due to favorable impact of the strengthening of other currencies against the US Dollar by
approximately 3.0% of revenues.

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 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.



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S,G&A costs for the three months ended March 31, 2010 were $10.0 million or 17.3%
of revenues, as compared to $8.6 million or 19.2% of revenues for the three months ended March 31, 2009. Our net employee costs increased approximately by $1.0 million in the first quarter of 2010 as compared to the first quarter of 2009,
comprised mainly of increased salaries and performance bonus by $0.5 million, travel related expenses by $0.2 million and recruitment expenses $0.1 million. Our net corporate and facilities costs increased by $0.4 million mainly due to an increase
in rental expense by $0.3 million.

Depreciation and amortization cost for the three months ended March 31, 2010 was $2.2
million or 3.8% of revenue, as compared to $1.9 million or 4.2% of revenue for the three months ended March 31, 2009 representing an increase of $0.3 million. The increase in depreciation cost is due to the additions of fixed assets made since
the first quarter of 2009.

Operating income percentage was 19.0% for the three months ended March 31, 2010 as compared
to 12.5% for the three months ended March 31, 2009. The increase in operating income percentage was mainly due to an increase in gross margins.

Our investment income for the three months ended March 31, 2010 totaled $0.5 million as compared to $0.9 million for the three
months ended March 31, 2009. The decrease in the investment income is mainly due to the downward trend in the interest rates.

Other expense is primarily comprised of realized loss on our hedges amounting to $0.8 million for the three months ended March 31,
2010 as compared to $2.2 million for the three months ended March 31, 2009. The decrease in hedge loss is due to favorable currency movements. For the three months ended March 31, 2010, we recognized $0.6 million of unfavorable foreign
currency loss related to our intercompany debt in India as compared to a favorable foreign currency gain of $0.4 million for the three months ended March 31, 2009. As of March 31, 2010, all of our outstanding forward contracts met the
qualifying criteria to receive hedge accounting. 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 three months ended March 31, 2010

Federal income taxes, calculated at the U.S. statutory rate, totaled $4.1 million and $1.6 million for the three months ended
March 31, 2010 and 2009, respectively. State income taxes, which totaled $0.01 million and $0.01 million for the three months ended March 31, 2010 and 2009, respectively, were calculated using a blended statutory rate, and are net of
federal income tax benefit. Our income tax provision was $0.2 million and a benefit of $0.15 million at an effective rate of 1.7% and 3.2% for the three months ended March 31, 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. 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 one of its units for which
the tax holiday has expired. The tax holiday and foreign tax benefit at other than U.S. Statutory tax rates have resulted in a benefit of $3.5 million and $2.1 million for the three months ended March 31, 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. Carryforward of NOLs will offset taxable income. The impact of the limited or disallowed items and benefit
of losses discussed above was a benefit of $0.45 million and a provision of $0.24 million for the three months ended March 31, 2010 and 2009, respectively.

Liquidity and Capital Resources

Cash from Operations

Cash provided by operating activities was $3.8 million for the three months period ended March 31, 2010. Factors contributing to our
cash provided by operating activities were net income of $11.6 million for the period, significant non cash items of approximately $2.0 million, offset by changes in working capital amounting to $(7.7) million. These non cash items principally
comprised of depreciation and amortization of $2.2 million, stock based compensation expense of $1.2 million, which was offset by an increase in deferred tax of $1.5 million.

Major changes in working capital were an increase in accounts and unbilled receivables of $6.2 million, decrease of prepaid and other
advances of $0.6 million and a decrease in accrued and other liabilities of $1.8 million. The increase in accounts receivable was mainly due to an increase in revenue and an increase in day sales outstanding from 54 days at the end of 2009 to 58
days as of March 31, 2010.

Cash provided by operating activities was $8.6 million for the three months period ended
March 31, 2009. Primary factors were income from operations of $5.0 million for the period, plus significant non cash items of approximately $2.6 million. These non cash items included depreciation and amortization of $1.9 million, stock based
compensation expense of $1.3 million, bad debts of $0.2 million which were offset by deferred taxes of $0.8 million.



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The net effect on the Companys working capital items for the three months period ended
March 31, 2009 was a positive $1.5 million. Major changes in working capital were a decrease in prepaid and other current assets of $1.0 million and a decrease in accounts and unbilled receivables of $3.5 million which was offset by a decrease
in accounts payable and accrued and other liabilities of $2.8 million and decrease in restructuring reserve of $0.1 million. The decrease in accounts receivable was mainly due to a decrease in revenues and which was further affected by an increase
in day sales outstanding from 65 days at the end of 2008 to 68 days as of March 31, 2009.

Investing Activities

Cash used in investing activities for the three months period ended March 31, 2010 was $10.1 million, as compared
to $16.2 million in 2009.

During the three months period ended March 31, 2010, we sold one of the office buildings
located in Bangalore, India for a consideration of $2.8 million, which offsets the capital expenditure of $1.9 million. Our capital expenditures was $2.4 million for the three months period ended March 31, 2009.

We sold available for sale securities, primarily mutual funds, for proceeds of $14.5 million for the three months ended March 31,
2010 as compared to $7.9 million for the three months period ended March 31, 2009. We made the investments in available for sale securities amounting to $25.8 million for the three months ended March 31, 2010 as compared to $21.5 million
for the three months period ended March 31, 2009

Financing Activities

Cash used by financing activities was $5.8 million and $6.0 million for the three month period ended March 31, 2010 and 2009,
respectively. Sources of cash related to stock option exercises were $0.3 million and $0.06 million in 2010 and 2009, respectively. During the first quarter of 2010 and 2009, our Board of Directors approved annual cash dividends of $0.11 per share.
The total amount of dividends paid was $6.1 million and $6.0 million in 2010 and 2009, respectively.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.



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|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 March 31, 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 ofMarch 31, 2010 |   | Valuation given X% increasein Rupee / USD rate | 
|                       |  | (10%)                                          |        | (5%)                          |   | (2%)                                           |  | (1%) |        |  | 1% |        | 2% |   |       | 5% |   |        | 10% |  
|Rupee to U.S. Rate     |  |                                                | 40.410 |                               |   | 42.655                                         |  |      | 44.002 |  |    | 44.451 |    |   | 44.90 |    |   | 45.349 |     |   | 45.798 |   |  |   | 47.145 |   |  |   | 49.390 |  
|Derivative Instruments |  | $                                              | 11.8   |                               | $ | 6.3                                            |  | $    | 3.2    |  | $  | 2.3    |    | $ | 1.3   |    | $ | 0.4    |     | $ | (0.5   | ) |  | $ | (3.2   | ) |  | $ | (7.2   | )

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 a the latest study by Gartner Inc., an IT research and advisory company, the Global IT Services industry
with worldwide IT spending forecast to total $821 billion in 2010, a 5.7 % increase from 2009 revenue of nearly $777 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 four 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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|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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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 6. | EXHIBITS
|------- | --------



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



|     |  |                                                                                                                                                                          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Form of non-qualified stock option agreement 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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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 April 2010.



|               |  |                                     
|-------------- |  | ------------------------------------
|               |  | iGATE CORPORATION                   
|               | 
|April 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 non-qualified stock option agreement 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.



23