Virtusa’s FY17 revenues up 43% to $ 858.7 m

Virtusa Corporation, a global business consulting and IT outsourcing company that accelerates business outcomes for its clients, reported consolidated financial results for the fourth quarter and fiscal year ended 31 March 2017.

Revenue for the fourth quarter of fiscal 2017 was $226.0 million, an increase of 4.0% sequentially and 31.5% year-over-year. On a constant currency basis, (1) fourth quarter revenue increased 4.1% sequentially and 34.7% year-over-year. 

Virtusa reported GAAP income from operations of $10.2 million for the fourth quarter of fiscal 2017, an increase from $6.5 million for the third quarter of fiscal 2017 and $5.5 million for the fourth quarter of fiscal 2016. Fourth quarter fiscal 2017 GAAP income from operations includes approximately $0.5 million of restructuring charges related to certain cost savings initiatives.

On a GAAP basis, net income attributable to common shareholders was $10.5 million for the fourth quarter of fiscal 2017, or $0.34 per diluted share, compared to$4.4 million, or $0.15 per diluted share, for the third quarter of fiscal 2017, and $12.3 million, or $0.41 per diluted share, for the fourth quarter of fiscal 2016. Fourth quarter fiscal 2017 GAAP net income includes the impact of the aforementioned restructuring charges related to certain cost savings initiatives, net of tax.

The company ended fiscal year 2017with $237.0 million of cash, cash equivalents, and short-term and long-term investments (2). Cash flow from operations was $0.6 million for the fourth quarter and $22.2 million for the fiscal year 2017.

Virtusa Chairman and CEO Kris Canekeratne stated, “We made excellent progress against our FY 2017 strategic goals. Most notably, we are pleased with the integration of Polaris and our ability to greatly expand our addressable market in BFSI, Communications and Technology and Media and Information. We are very pleased with the number of leading enterprises that rely on Virtusa for their most strategic end-to-end digital transformation programs. Looking to fiscal 2018, we will intensify our digital offerings and strengthen our leadership position in this rapidly growing area. We are delighted that Vikram S. Pandit joined our board and the strategic value he brings. Additionally, we are enthusiastic about leveraging Orogen’s and Atairos’ network to advance our growth strategy by bringing our digital offerings to enterprises in their network.”

Chief Financial Officer Ranjan Kalia said, “We delivered strong sequential revenue growth and operating margin accretion in the fourth quarter. Our Q4 non-GAAP EPS was below the midpoint of our guidance range primarily due to a shift forward of certain expenses in our cost of sales. Looking to fiscal 2018, we expect to deliver above-industry revenue growth as well as continued margin accretion even after absorbing INR headwinds of approximately 45 basis points. Additionally, due to the recently completed strategic investment by the Orogen group, we have strengthened our balance sheet by increasing our net cash position and expect to return capital to shareholders through our share buyback program.”

Virtusa management provided the following current financial guidance:

First quarter fiscal 2018 revenue is expected to be in the range of $222.5 to $227.5 million. GAAP diluted EPS is expected to be in the range of $0.07 to $0.13. Non-GAAP diluted EPS is expected to be in the range of $0.24 to $0.30.

Fiscal year 2018 revenue is expected to be in the range of $920.0 to $950.0 million. GAAP diluted EPS is expected to be in the range of $0.81 to $1.07. Non-GAAP diluted EPS is expected to be in the range of $1.42 to $1.66.