Virtusa Corporation, a global business consulting and IT outsourcing company that combines innovation, technology leadership and industry solutions to transform the customer experience, reported consolidated financial results for the second quarter fiscal 2017, ended 30 September 2016.
Revenue for the second quarter of fiscal 2017 was $210.1 million, an increase of 2.2% sequentially and 46.9% year-over-year. On a constant currency basis, second quarter revenue increased 3.2% sequentially and 49.4% year-over-year.
Virtusa reported GAAP income from operations of $3.5million for the second quarter of fiscal 2017, compared to loss from operations of $1.8 million for the first quarter of fiscal 2017 and income from operations of $13.3 million for the second quarter of fiscal 2016.
On a GAAP basis, net income for the second quarter of fiscal 2017 was $3.2 million, or $0.11 per diluted share, compared to net loss of $ 6.3 million, or $ 0.21 per diluted share, for the first quarter of fiscal 2017, and net income of $11.1 million, or $0.37 per diluted share, for the second quarter of fiscal 2016.
The company ended the second quarter of fiscal 2017 with $227.3 million of cash, cash equivalents, and short-term and long-term investments. Cash flow from operations was $25.2million for the second quarter of fiscal 2017.
Virtusa’s Chairman and CEO Kris Canekeratne stated: “We are pleased with our second quarter results, which include strong growth in our BFSI and M&I industry groups. While market conditions remain challenging, we continue to see healthy demand for our solutions. This is reflected in our pipeline, which is expanding across all verticals and solution areas.”
Chief Financial Officer Ranjan Kalia said: “During the second quarter, we delivered revenue above the mid-point of our guidance range and reported solid sequential improvement in our DSO which helped drive strong cash flow in the quarter. The midpoint of our fiscal year 2017 revenue guidance remains unchanged despite higher than expected foreign currency headwinds and third quarter furloughs. Our revised EPS guidance reflects the impact of higher onsite effort and contractor resourcing related to digital transformation programs, as well as currency headwinds.”
Virtusa management provided the following current financial guidance:
Third quarter fiscal 2017 revenue is expected to be in the range of $214.5 to $219.5 million. Non-GAAP diluted EPS is expected to be in the range of $0.34 to $0.38. GAAP diluted EPS is expected to be in the range of $0.17 to $0.21.
Fiscal year 2017 revenue is expected to be in the range of $ 854 to $ 866 million. Non-GAAP diluted EPS is expected to be in the range of $1.26 to $1.34. GAAP diluted EPS is expected to be in the range of $0.40to $0.48.
Virtusa anticipates a restructuring charge in the in the second half of fiscal 2017 of approximately $1.5 to $2.0 million related to certain expense savings initiatives. This charge is not reflected in the current GAAP EPS guidance as the timing of this restructuring will impact the amount incurred in the third and fourth quarters. Additionally, this charge will not impact reported non-GAAP EPS.