Virtusa posts record 4Q and full year financial results

Virtusa Corporation, a global business consulting and IT outsourcing company, this week reported record fourth quarter and full year financial results for the year ended 31 March 2013.

Revenue for the fourth quarter of fiscal 2013 was $89.9 million, an increase of 4% sequentially and 21% year-over-year in reported currency. On a constant currency basis, fourth quarter revenue increased 5% sequentially and 22% year-over-year.

Virtusa reported income from operations of $9.4 million for the fourth quarter of fiscal 2013, an increase compared to $9.1 million for the third quarter of fiscal 2013, and an increase compared to $7.1 million for the fourth quarter of fiscal 2012.

Net income for the fourth quarter of fiscal 2013 was $9.1 million, or $0.35 per diluted share, an increase compared to $7.4 million, or $0.29 per diluted share, for the third quarter of fiscal 2013, and an increase compared to $5.8 million, or $0.23 per diluted share, for the fourth quarter of fiscal 2012.

For the fiscal year ended 31 March 2013, revenue increased 20% in both reported and constant currency, to a record $333.2 million, compared to $277.8 million for the fiscal year ended 31 March 2012.

Virtusa reported income from operations of $32.9 million for fiscal year 2013, an increase of 37% compared to $23.9 million for fiscal year 2012.

Net income for fiscal year 2013 was $28.4 million, or $1.11 per diluted share, an increase compared to $20.0 million, or $0.79 per diluted share, for fiscal year 2012.

The company ended fiscal year 2013 with $95.0 million of cash, cash equivalents, and short-term and long-term investments. Cash generated from operations was $22.0 million for fiscal year 2013.

Kris Canekeratne, Virtusa’s Chairman and CEO, stated: “The fourth quarter capped off a strong fiscal year 2013 for Virtusa. Our industry leading growth was driven by our ability to provide thought leadership at the intersection of business and technology in the industries we serve. Our leadership position in Millennial Enablement, regulatory and compliance services, transformational solutions and IT rationalisation has been at the core of winning larger engagements and expanding client relationships.”

Ranjan Kalia, Chief Financial Officer, said: “We are pleased with our results for the full fiscal year 2013 which delivered on our promise of above market revenue growth and significant operating margin expansion. Our full fiscal year 2014 guidance calls for continued revenue momentum along with meaningful earnings per share growth.”

Virtusa management provided the following current financial guidance:

First quarter fiscal year 2014 revenue is expected to be in the range of $89.5 to $91.5 million, with diluted EPS of $0.26 to $0.30.

Fiscal year 2014 revenue is expected to be in the range of $376.0 to $392.0 million, with diluted EPS of $1.22 to $1.38.

The company’s first quarter and fiscal year 2014 diluted EPS estimates assume an average share count of approximately 26.1 million and 26.2 million respectively, (assuming no further exercises of stock-based awards) and assume a stock price of $22.79, which was derived from the average closing price of the company’s stock over the five trading days ended on 7 May 2013. Deviations from this stock price may cause actual EPS to vary based on share dilution from Virtusa’s stock options and stock appreciation rights.