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Luxoft Holding, Inc Reports Results for Three Months and Financial Year Ended March 31, 2015Luxoft 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 full financial year and for the three months ended March 31, 2015. Highlights - Financial Year Ended March 31, 2015
Highlights - Three Months Ended March 31, 2015
Revenue for the full financial year ended March 31, 2015 increased to $520.5 million, up 30.7% from $398.3 million a year ago. Operating income was $79.6 million, an increase of 35.0% year over year from $59.0 million last year. US GAAP net income was $63.1 million, or $1.91 per diluted share, compared to $51.2 million and $1.59 per diluted share a year ago. Non-GAAP net income was $75.4 million, or $2.28 per diluted share, compared to $56.1 million and $1.74 per diluted share a year ago. Foreign exchange loss on the income statement contributed to the reduction of the Company's EPS for the year ended March 31, 2015 by $0.22. 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 three months ended March 31, 2015 increased to $137.4 million, up 29.3% from $106.3 million for the same period a year ago, and decreased 5.8% sequentially. This reflects the normal seasonality of the business. Adjusted EBITDA was $19.8 million with corresponding margins of 14.4%, as compared to $16.2 million and 15.2%, respectively, in the year ago quarter, and $35.6 million and 24.4% sequentially. US GAAP net income was $9.0 million, or $0.27 per diluted share, compared to $10.4 million and $0.32 per diluted share for the same period a year ago, and $23.9 million and $0.73 sequentially. Non-GAAP net income was $15.1 million, or $0.46 per diluted share, compared to $11.8 million and $0.36 per diluted share for the same period a year ago, and $26.6 million and $0.81 sequentially. "We are pleased to announce that Luxoft reported another strong year of growth and excellent operational performance," said Dmitry Loschinin, President and Chief Executive Officer. "We were able to tackle numerous challenges created by geopolitical and macro conditions and successfully executed on all planned corporate initiatives as well as promises given to the market throughout the year. We have made a series of significant steps towards becoming a truly global enterprise, now with over 9,000 employees and spanning North America, Europe, Asia, Africa and Australia. We have enhanced our portfolio of solutions, expertise and clients - organically and via value-added acquisitions - at a record pace in the Company's history. Our agility has helped us make necessary adaptive changes throughout the year to become an even stronger company to continue to deliver premier-quality services to our clients and solid results to our shareholders." Five of Luxoft's six verticals experienced solid revenue growth, with Financial services, Automotive and transport and Energy delivering the strongest performance: 45.0%, 28.2% and 22.0% growth, respectively, on a year-over-year basis. Excluding a one-off significant project with Glonass, which has ended, Automotive and transport vertical grew 45.1% year over year. The company also exhibited solid performance across all of its core revenue-generating geographies: revenues generated in the U.S. increased 22.5%, the U.K. revenues increased 44.1%, and German revenues increased 30.4% compared to a year ago. Luxoft finished the financial year with 9,183 employees, of which 7,849 were delivery professionals, who continued to drive average productivity to an annual record of $73.7 thousand per engineer, which represents an increase of 7% vs. last year. The average delivery headcount increased by 22.6% as compared to the financial year ended March 31, 2014, which is 8.1% slower than the revenue growth for the same period. Employee attrition stood at 10.5%, which management believes is the lowest in the industry. The effective tax rate for the full financial year ended March 31, 2014 was 13.5%. In February 2015 Luxoft purchased Excelian Limited, a privately held U.K.-based systems integrator and technology consulting company specializing in trading and risk management software for the financial services and commodities markets. Excelian's expertise includes implementation of financial software platforms from industry-leading providers such as Murex, OpenLink, and Calypso. As a result, the Company's results for the year ended March 31, 2015 include 40 days of financial performance of Excelian Limited. "This year our Company continued to generate superior revenue growth and solid profitability in constant and reporting currency terms. Our annual growth in operating income and adjusted EBITDA outpaced the top line growth. We have expanded the list of our High Potential Accounts with accounts of at least one year old posting on average over 80% growth in revenues on year over year basis," said Roman Yakushkin, Chief Financial Officer. "We are building up Luxoft to become a next generation provider in our core domains. Our increased focus on combining end-to-end services and solutions continues to generate demand for non-commoditized value-added services, which is being reflected in our productivity metrics. We believe Luxoft is on a path of steady growth in the new financial year 2016 and look forward to delivering another year of strong performance." Outlook for the Financial Year Ending March 31, 2016:
Conference Call Information: Luxoft Holding, Inc will host a conference call on May 14, 2015 at 8:00 a.m. EDT to discuss its financial results for the three months and financial year ended March 31, 2015. To access the conference call, please dial 877-407-8293 (for U.S. callers) or 201-689-8349 (for international callers). A live webcast of the conference call will also be available during the call and can be accessed at https://event.webcasts.com/starthere.jsp?ei=1062320. 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#13607831. The replay will be available from two hours as of the end of the call and up to 11:59 p.m. EDT on May 21, 2015. 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 24 dedicated delivery centers worldwide. It has over 9,000 employees across 27 offices in 15 countries in North America, Mexico, Western and Eastern Europe, Asia Pacific, and South Africa. 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 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, or actual increases to our effective tax rate which we may experience from time to time; 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; 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 Form 20-F for the year ended March 31, 2014 and other documents filed with or furnished to 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.
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