Thursday, 14 November 2013 00:00
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Virtusa Corporation, a global business consulting and IT outsourcing company that combines innovation, technology leadership and industry solutions to transform the customer experience, yesterday reported consolidated financial results for the second quarter of fiscal year 2014, ended 30 September, 2013.
Revenue for the second quarter of fiscal 2014 was $ 94.3 million, an increase of 17% year-over-year and 4% sequentially in both reported and constant currency (1).
Virtusa reported income from operations of $ 9.8 million for the second quarter of fiscal 2014, an increase of 9% compared to $ 8.9 million for the first quarter of fiscal 2014, and an increase of 32% compared to $ 7.4 million for the second quarter of fiscal 2013.
Net income for the second quarter of fiscal 2014 was $ 7.5 million, or $ 0.28 per diluted share, compared to $ 7.5 million, or $ 0.29 per diluted share, for the first quarter of fiscal 2014, and an increase compared to $ 5.8 million, or $ 0.23 per diluted share, for the second quarter of fiscal 2013.
Strong revenue growth
Net income for the second quarter of fiscal 2014 included $ 1.0 million of foreign currency transaction losses compared to a gain of $ 0.4 million in the first quarter of fiscal 2014, and a loss of $0.5 million in the second quarter of fiscal 2013.
The company ended the second quarter of fiscal 2014 with $ 110.4 million of cash, cash equivalents, and short-term and long-term investments (2). The company generated $ 23.7 million of cash from operating activities during the second quarter of fiscal 2014.
Virtusa Chairman and CEO Kris Canekeratne stated: “We are pleased with our second quarter results. Our strong year-over-year performance continues to be driven by the three components of our growth platform, specifically our leadership position in helping our clients build a millennial experience for their customers and employees, our industry leading transformational solutions, and our IT rationalisation capabilities. We continue to have success extending our differentiation in these areas, and as a result, we are expanding our market opportunity and taking on larger programs.”
Chief Financial Officer Ranjan Kalia said: “During the second quarter, we delivered strong sequential and year-over-year revenue growth. In addition, our efforts to scale the business and leverage our global resources have enabled us to expand our operating profit margins while still investing for growth.”
Kalia added: “For the second half of the fiscal year, we expect our organic sequential revenue growth rates to accelerate from current levels; therefore, we are raising our top-line guidance for the 2014 fiscal year.”
Strategic acquisitions
Virtusa extends its current strength in finance transformation (FT) with the acquisition of OSB Consulting LLC, which closed on 1 November, 2013. OSB is a New Jersey-based consulting firm specialising in the financial services and insurance domains, including SAP finance capabilities. OSB is focused on helping clients automate their finance and accounting processes, reporting capabilities and regulatory compliance.
The addition of OSB will enable Virtusa to take on a more strategic role across several large programs already in place, as well as enable the company to offer a broader set of finance transformation services to existing and new clients.
Under the terms of the asset purchase agreement, Virtusa acquired substantially all of the assets of OSB’s business for approximately $ 7.0 million in cash, as well as up to an additional $6.0 million in earn-out consideration upon OSB’s achievement of certain revenue and profit milestones during calendar years 2013, 2014 and 2015.
Virtusa Chairman and CEO Kris Canekeratne stated: “With this acquisition, we significantly increase our capabilities as we become a full service provider for finance transformation initiatives across our focus industry groups.
“We are already partnering with OSB on several large transformational programs and have seen firsthand the synergies in combining the strengths of both firms. We welcome OSB’s team members to Virtusa.”
