[November 11, 2014]

Luxoft Holding, Inc Reports Results for Three and Six Months Ended September 30, 2014

Luxoft Holding, Inc (NYSE:LXFT), a leading provider of software development services and innovative IT solutions to a global client base, today announced results for the three and six months ended September 30, 2014.

Highlights - Three Months Ended September 30, 2014

• US GAAP revenue amounted to $125.1 million, an increase of 28.0% year over year and 11.4% sequentially
• Earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for stock based compensation, acquisition related costs and change in fair value of contingent consideration was $24.4 million; EBITDA margin was 19.5%, compared to $19.5 million and 19.9% in the year-ago quarter and $19.1 million and 17.0% sequentially
• Operating income margin on a US GAAP basis was 16.5%, compared to 15.6% in the year-ago quarter and 12.5% sequentially
• Diluted earnings per share (EPS) on a US GAAP basis was $0.54, compared to $0.40 in the year-ago quarter and $0.38 sequentially
• Diluted EPS on a non-GAAP basis was $0.58, compared to $0.47 in the year-ago quarter, and $0.45 sequentially

Highlights - Six Months Ended September 30, 2014

• US GAAP revenue amounted to $237.4 million, an increase of 30.9% year over year
• Adjusted EBITDA was $43.4 million and EBITDA margin was 18.3% compared to $33.8 million and 18.6% year over year
• US GAAP operating income increased to $34.7 million or 32.4% year over year
• Diluted EPS on a US GAAP basis was $0.92, compared to $0.73 in the first half of last year
• Diluted EPS on a non-GAAP basis was $1.03, compared to $0.84 in the first half of last year

Revenue for the three months ended September 30, 2014 increased to $125.1 million, up 28.1% from $97.7 million for the same period a year ago and 11.4% sequentially. Adjusted EBITDA was $24.4 million and corresponding margins of 19.5%, as compared to $19.5 million and 19.9% respectively in the year-ago quarter and $19.1 million and 17.0% sequentially. US GAAP net income was $17.6 million, or $0.54 per diluted share, compared to $13.3 million and $0.40 per diluted share for the same period a year ago and $12.6 million and $0.38 sequentially. Non-GAAP net income was $19.0 million, or $0.58 per diluted share, compared to $15.5 million and $0.47 per diluted share for the same period a year ago and $14.6 million and $0.45 sequentially. Reconciliations between non-GAAP financial measures and US GAAP operating results and diluted EPS are included at the end of this release.

Revenue for the six months ended September 30, 2014 increased to $237.4 million, up 30.9% from $181.4 million for the same period a year ago. Operating income was $34.7 million, an increase of 32.4% year over year from $26.2 million in the first half of last year. US GAAP net income was $30.2 million, or $0.92 per diluted share, compared to $23.1 million and $0.73 per diluted share for the same period a year ago. Non-GAAP net income was $33.7 million, or $1.03 per diluted share, compared to $26.7 million and $0.84 per diluted share for the same period a year ago.

"We are proud to bring another quarter of strong performance to our shareholders. Luxoft significantly advanced its operating and financial growth, expanded into vital vertical subdomains and new geographies, and enhanced its competitive advantage in certain segments," said Dmitry Loschinin, President and Chief Executive Officer. "We continue to make progress in our key business lines, helping clients address challenges in risk, regulatory, transactional banking, HMI, connected car, embedded development, cloud and other areas. Starting September we solidified delivery capabilities by establishing our Latin American presence, now offering convenience of nearshore services to customers in North America. Finally, in October we acquired Radius, a rapidly growing U.S.-based specialty provider in the Internet of Things area (IoT). We view IoT as a powerful global trend beginning to span across numerous business domains. Radius has a solid customer base consisting of Fortune 500 companies and we believe there are good synergies and cross-selling opportunities to be realized as a result of this transaction."

For the six months ending September 30, 2014, financial services, automotive and transport and energy were the strongest performers, delivering 55.0%, 16.4% and 39.7% of revenue growth compared to the six months of last year respectively. Key revenue generating geographies continued to grow: revenues generated in the U.S. increased 28.3%, in the U.K. increased 38.4% and in Germany increased 37.3%, compared to the first six months of last year. Growth of revenues continued to outpace growth in delivery headcount. The company generated approximately 3% increase in revenue per delivery employee¹. During the last quarter the total headcount crossed 8,000 employees to reach 8,166 as of September 30, 2014, while maintaining low attrition.

"Our company continued to enjoy strong demand for its services and solutions from large enterprises around the globe, while creating productivity gains and maintaining one of the highest revenue levels per engineer among our peers, "- said Roman Yakushkin, Chief Financial Officer. "Luxoft's ongoing investments into R&D, as well as the acquisitions made during this year, create a solid foundation for our growth within IT-intensive industries, where technology is a key differentiator. Our top ten account list now has two new names versus the first six months of last year and one new name as compared to the previous quarter. Over the past quarter we organically added three high potential accounts, all of which are outside of the financial services vertical. As a result of this solid dynamic coupled with the state of our current pipeline of business and the overall demand environment, we are increasing our annual guidance for both, revenue growth and earnings per share."

Outlook for the Year Ending March 31, 2015:

The Company is providing the following guidance for the financial year:

• Revenue is expected to be at least $510.0 million, an increase of at least 28.0% year over year, at least 25% of which is expected to be organic. These figures are revised from the previous guidance of at least $486.0 million and 22.0%, respectively.
• Adjusted EBITDA margin is expected to be unchanged, in the range of 17.0% - 19.0%
• Diluted EPS is expected to be at least $1.82 on a US GAAP basis and at least $2.00 on a non-GAAP basis, revised from previous guidance of at least $1.80 and $1.95, respectively
• EPS is based on an estimated weighted average of 32,867,041 diluted shares

On November 11, 2014 our Board of Directors adopted the Luxoft Holding, Inc 2014 Incentive Compensation Plan (the "Plan"), subject to approval by our shareholders. The Plan allows Luxoft's Compensation Committee to grant stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash-based awards to our employees, directors and consultants. Up to 2.3 million of the Company's Class A ordinary shares may be issued under the Plan, subject to adjustment for certain changes in our share capital. Over 50% of each award to be granted under the Plan is expected to be tied to the corporate performance metrics, with all awards vesting over a five-year period. The Company intends to submit the Plan for approval to its shareholders on or about November 14, 2014. If the Plan is approved by the shareholders, the Company's select eligible personnel worldwide will be able to participate in the Plan starting on January 1, 2015.

Conference Call Information:

Luxoft Holding, Inc will host a conference call on November 12, 2014 at 8:00 a.m. EST to discuss its financial results for the three and six months ended September 30, 2014. To participate in the conference call please dial 877-407-8293 (for domestic U.S. callers) or 201-689-8349 (for international callers). A live webcast will also be available during the call and can be accessed at https://event.webcasts.com/starthere.jsp?ei=1045909. Participants, please access the website at least 10 minutes prior to the call to register and follow the instructions provided on the website to download and install the necessary applications. An archived recording of the conference call will be available for a limited time by dialing one of the following numbers: 877-660-6853 (for U.S. callers) or 201-612-7415 (for international callers) and entering the conference ID# 418801. The replay will be available from two hours as of the end of the call and up to 11:59 p.m. EST on November 20, 2014. The replay details will also be available at Luxoft's Investor Relations section during the same time period.

About Luxoft:

Luxoft Holding, Inc (NYSE:LXFT US) is a leading provider of software development services and innovative IT solutions to a global client base consisting primarily of large multinational corporations. Luxoft's software development services consist of core and mission critical custom software development and support, product engineering and testing, and technology consulting. Luxoft's solutions are based on its proprietary products and platforms that directly impact its clients' business outcomes and efficiently deliver continuous innovation. The Company develops its solutions and delivers its services from 18 dedicated delivery centers worldwide. It has over 8,100 employees across 22 offices in 14 countries in the North America, Mexico, Western and Eastern Europe, and Asia Pacific. Luxoft is incorporated in Tortola, British Virgin Islands, has its operating headquarters office in Zug, Switzerland and is listed on the New York Stock Exchange. For more information, please visit http://www.luxoft.com.

Non-GAAP Financial Measures:

To supplement our financial results presented in accordance with US GAAP, this press release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: earnings before interest, tax, depreciation and amortization (EBITDA); adjusted EBITDA; non-GAAP net income; and non-GAAP diluted Earnings per share (EPS). Non-GAAP net income and non-GAAP EPS exclude stock-based compensation expense, amortization of fair value adjustments to intangible assets and impairment thereof and other acquisitions related costs, that may include changes in the fair value of contingent consideration liabilities. Non-GAAP diluted EPS are calculated as non-GAAP net income divided by weighted average number of diluted shares. We provide these non-GAAP financial measures because we believe that they present a better measure of our core business and management uses them internally to evaluate our ongoing performance. Accordingly, we believe that these non-GAAP measures are useful to investors in enhancing their understanding of our operating performance. These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable US GAAP measures. The non-GAAP results and a full reconciliation between US GAAP and non-GAAP results are provided in the accompanying tables at the end of this press release.

Forward-Looking Statements:

In addition to historical information, this release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include information about possible or assumed future results of our business and financial condition, as well as the results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," or the negative of these terms or other similar expressions. These statements include, but are not limited to, statements regarding: the persistence and intensification of competition in the IT industry; the future growth of spending in IT services outsourcing generally and in each of our industry verticals, application outsourcing and custom application development and offshore research and development services; the level of growth of demand for our services from our clients; the level of increase in revenues from our new clients; seasonal trends and the budget and work cycles of our clients; general economic and business conditions in our locations, including geopolitical instability and social, economic or political uncertainties, particularly in Russia and Ukraine, and any potential sanctions, restrictions or responses to such conditions imposed by some of the locations in which we operate; the levels of our concentration of revenues by vertical, geography, by client and by type of contract in the future; the expected timing of the increase in our corporate tax rate; our expectations with respect to the proportion of our fixed price contracts; our expectation that we will be able to integrate and manage the companies we acquire and that our acquisitions will yield the benefits we envision; the demands we expect our rapid growth to place on our management and infrastructure; the sufficiency of our current cash, cash flow from operations, and lines of credit to meet our anticipated cash needs; the high proportion of our cost of services comprised of personnel salaries; our plans to introduce new products for commercial resale and licensing in addition to providing services; our anticipated joint venture with one of our clients; IBS Group Holding Limited and its subsidiaries divesting all or a portion of its ownership interest in us; and our continued financial relationship with IBS Group Holding limited and its subsidiaries including expectations for the provision and purchase of services and purchase and lease of equipment; and other factors discussed under the heading "Risk Factors" in the Annual Report on the Form 20-F for the year ended March 31, 2014 and other documents filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this press release whether as a result of new information, future events or otherwise. Except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this press release whether as a result of new information, future events or otherwise.

¹ The calculation is based on the annualized revenue for the first six months of the financial year ending March 31, 2015.

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