Virtusa reports $ 217 m revenue in 3Q

Virtusa Corporation for the third quarter ended 31 December 2016 has reported revenue of $ 217.2 million, an increase of 3.4% sequentially and 44.2% year-over-year.  

On a constant currency basis, third quarter revenue increased 4.2% sequentially and 48.6% year-over-year.

Virtusa reported GAAP income from operations of $ 6.5 million for the third quarter of fiscal 2017, compared to $ 3.5 million for the second quarter of fiscal 2017 and $ 14.1 million for the third quarter of fiscal 2016. The third quarter fiscal 2017 GAAP income from operations includes $ 1.9 million of restructuring charges related to certain cost saving initiatives.

On a GAAP basis, net income for the third quarter of fiscal 2017 was $ 4.4 million or $ 0.15 per diluted share, compared to $ 3.2 million or $ 0.11 per diluted share for the second quarter of fiscal 2017 and $ 11.3 million or $0.38 per diluted share for the third quarter of fiscal 2016. The third quarter fiscal 2017 GAAP net income includes the impact of the aforementioned restructuring charges related to certain cost saving initiatives, net of tax.

Virtusa is a global business consulting and IT outsourcing company that combines innovation, technology leadership and industry solutions to enhance business performance, accelerate time-to-market, increase productivity and improve customer experience.

The company ended the third quarter of fiscal 2017 with $ 237.2 million of cash, cash equivalents and short-term and long-term investments. Cash flow from operations was $ 13.5 million for the third quarter of fiscal 2017.

Virtusa’s Chairman and CEO Kris Canekeratne stated: “We are pleased with our third quarter results. We see continuing client demand across our industry groups and geographies for our Digital Transformation and Innovation and Operational Excellence solutions. Our differentiated solution strategy and deep domain expertise are enabling us to win in the market, and position us well for sustained growth.”

​​Chief Financial Officer Ranjan Kalia said: “During the third quarter we delivered solid revenue growth across all industry groups and geographies. We expect this trend will continue into the fourth quarter, leading to our fourth quarter sequential revenue growth guidance of 4% at the midpoint. In addition, our Q4 fiscal 2017 guidance calls for a strong non-GAAP operating margin accretion driven by top-line growth and SG&A leverage. The midpoint of our fiscal 2017 non-GAAP EPS guidance is reduced by $ 0.04 primarily due to a change in our effective tax rate assumption.”

Virtusa said fourth quarter fiscal 2017 revenue is expected to be in the range of $ 224-$ 229 million. GAAP diluted EPS is expected to be in the range of $ 0.31-$ 0.35. Non-GAAP diluted EPS is expected to be in the range of $ 0.43-$ 0.47.

Fiscal year 2017 revenue is expected to be in the range of $ 856.8-$ 861.8 million. GAAP diluted EPS is expected to be in the range of $ 0.36-$ 0.40. Non-GAAP diluted EPS is expected to be in the range of $ 1.24-$ 1.28.