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Derivative Financial Instruments and Hedging Activities | 6 Months Ended
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Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates. Notional Amount of Derivative Contracts The net notional amounts of the Company’s outstanding derivative instruments were as follows:
| As of
| June 30, 2024 |  | December 31, 2023
| (in thousands)
Derivatives designated as hedging instruments: |  |  |
Foreign exchange contracts |  |  |
Cash flow hedges | $ | 9,549,472 |  |  | $ | 8,783,273 |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange contracts | 808,357 |  |  | — |
Total | $ | 10,357,829 |  |  | $ | 8,783,273 |
Fair Value of Derivative Contracts The fair value of the Company’s outstanding derivative instruments was as follows:
| As of June 30, 2024
| Derivative Assets |  | Derivative Liabilities
| Other current assets |  | Other non-current assets |  | Accrued expenses and other liabilities |  | Other non-current liabilities
| (in thousands)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |
Foreign exchange contracts | $ | 197,119 |  |  | $ | 41,085 |  |  | $ | 26,586 |  |  | $ | 3,176 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |
Foreign exchange contracts | 2,625 |  |  | — |  |  | 2,371 |  |  | — |
Total | $ | 199,744 |  |  | $ | 41,085 |  |  | $ | 28,957 |  |  | $ | 3,176 |
| As of December 31, 2023
| Derivative Assets |  | Derivative Liabilities
| Other current assets |  | Other non-current assets |  | Accrued expenses and other liabilities |  | Other non-current liabilities
| (in thousands)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |
Foreign exchange contracts | $ | 26,416 |  |  | $ | 4,518 |  |  | $ | 140,089 |  |  | $ | 46,575 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |
Foreign exchange contracts | — |  |  | — |  |  | — |  |  | — |
Total | $ | 26,416 |  |  | $ | 4,518 |  |  | $ | 140,089 |  |  | $ | 46,575 |
The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies. As of June 30, 2024, the pre-tax net accumulated gain on our foreign currency cash flow hedges included in AOCI on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $174 million. Master Netting Agreements In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets. The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. No cash collateral was received or posted by the Company as of June 30, 2024 and December 31, 2023. The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:
| As of June 30, 2024
|  |  |  |  |  |  | Gross Amount Not Offset in the Consolidated Balance Sheets |  |
| Gross Amount Recognized in the Consolidated Balance Sheets |  | Gross Amount Offset in the Consolidated Balance Sheets |  | Net Amount Presented in the Consolidated Balance Sheets |  | Financial Instruments |  | Collateral Received and Posted |  | Net Amount
| (in thousands)
Derivative assets | $ | 240,829 |  |  | $ | — |  |  | $ | 240,829 |  |  | $ | (32,133) |  |  | $ | — |  |  | $ | 208,696 |
Derivative liabilities | 32,133 |  |  | — |  |  | 32,133 |  |  | (32,133) |  |  | — |  |  | — |
| As of December 31, 2023
|  |  |  |  |  |  | Gross Amount Not Offset in the Consolidated Balance Sheets |  |
| Gross Amount Recognized in the Consolidated Balance Sheets |  | Gross Amount Offset in the Consolidated Balance Sheets |  | Net Amount Presented in the Consolidated Balance Sheets |  | Financial Instruments |  | Collateral Received and Posted |  | Net Amount
| (in thousands)
Derivative assets | $ | 30,934 |  |  | $ | — |  |  | $ | 30,934 |  |  | $ | (27,246) |  |  | $ | — |  |  | $ | 3,688 |
Derivative liabilities | 186,664 |  |  | — |  |  | 186,664 |  |  | (27,246) |  |  | — |  |  | 159,418 |
Effect of Derivative and Non-Derivative Instruments on Consolidated Financial Statements The pre-tax gains (losses) on the Company’s cash flow hedges and net investment hedges recognized in AOCI were as follows:
| Three Months Ended |  | Six Months Ended
| June 30, 2024 |  | June 30, 2023 |  | June 30, 2024 |  | June 30, 2023
| (in thousands)
Cash flow hedges: |  |  |  |  |  |  |
Foreign exchange contracts (1) |  |  |  |  |  |  |
Amount included in the assessment of effectiveness | $ | 160,544 |  |  | $ | — |  |  | $ | 389,688 |  |  | $ | — |
Net investment hedges: |  |  |  |  |  |  |
Foreign currency-denominated debt | (3,400) |  |  | — |  |  | (3,400) |  |  | — |
Total | $ | 157,144 |  |  | $ | — |  |  | $ | 386,288 |  |  | $ | — |
(1) No amounts were excluded from the assessment of effectiveness. The gains on derivative instruments recognized in the Consolidated Statement of Operations were as follows:
| Three Months Ended
| June 30, 2024
| Revenues |  | Cost of Revenues |  | Interest and other income (expense)
| (in thousands)
Total amounts presented in the Consolidated Statements of Operations | $ | 9,559,310 |  |  | $ | 5,174,143 |  |  | $ | 79,005 |
Gains on derivatives in cash flow hedging relationship |  |  |  |  |
Foreign exchange contracts |  |  |  |  |
Amount of gains reclassified from AOCI | 33,301 |  |  | 73 |  |  | — |
Gains on derivatives not designated as hedging instruments |  |  |  |  |
Foreign exchange contracts | — |  |  | — |  |  | 9,797 |
| Six Months Ended
| June 30, 2024
| Revenues |  | Cost of Revenues |  | Interest and other income (expense)
| (in thousands)
Total amounts presented in the Consolidated Statements of Operations | $ | 18,929,750 |  |  | $ | 10,151,216 |  |  | $ | 234,364 |
Gains on derivatives in cash flow hedging relationship |  |  |  |  |
Foreign exchange contracts |  |  |  |  |
Amount of gains reclassified from AOCI | 22,060 |  |  | 267 |  |  | — |
Gains on derivatives not designated as hedging instruments |  |  |  |  |
Foreign exchange contracts | — |  |  | — |  |  | 14,063 |
No gains or losses on derivative instruments were recognized in the Consolidated Statements of Operations in the three and six months ended June 30, 2023.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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