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Luxoft Holding, Inc Reports Results for Three Months and Financial Year Ended March 31, 2014LONDON --(Business Wire)-- 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 months and the full financial year ended March 31, 2014. Highlights - Financial Year Ended March 31, 2014
Highlights - Three Months Ended March 31, 2014
Revenue for the full financial year ended March 31, 2014 increased to $398.3 million, up 26.6% from $314.6 million a year ago. Operating income was $59.0 million, an increase of 36.9% year over year from $43.1 million last year. US GAAP net income was $51.2 million, or $1.59 per diluted share, compared to $37.5 million and $1.24 per diluted share a year ago. Non-GAAP net income was $56.1 million, or $1.74 per diluted share, compared to $44.3 million and $1.46 per diluted share a year ago. 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, 2014 increased to $106.3 million, up 23.7% from $85.9 million for the same period a year ago, and decreased 3.9% sequentially. This reflects the normal seasonality of the business. Adjusted EBITDA was $16.2 million with corresponding margins of 15.2%, as compared to $15.6 million and 18.2%, respectively, in the year ago quarter, and $22.7 million and 20.5% sequentially. US GAAP net income was $10.4 million, or $0.32 per diluted share, compared to $10.8 million and $0.35 per diluted share for the same period a year ago, and $17.7 million and $0.54 sequentially. Non-GAAP net income was $11.8 million, or $0.36 per diluted share, compared to $12.4 million and $0.40 per diluted share for the same period a year ago, and $17.7 million and $0.54 sequentially. "The past year has been a record one for Luxoft in many respects: We significantly advanced our solutions, measurably increased the list of our high-potential accounts, and grew our global delivery model to expand further within the U.S. and the EU countries," said Dmitry Loschinin, President and Chief Executive Officer. "2014 was a year of robust growth. It opened a new chapter in the history of our company and propelled us to another level of the transformation to become a truly global enterprise. We have achieved many important milestones, delivered strong performance to our shareholders and superior services to our clients. We confidently enter our second year as a public company and continue working to position the company for further growth and wins ahead." Most of Luxoft's verticals experienced strong revenue growth, with Financial services and Automotive and transport delivering the strongest performance: 39% and 73% growth, respectively, on a year-over-year basis. The company exhibited solid performance across all of its core revenue-generating geographies: Revenues generated in the U.S. increased 46%, the U.K. increased 25%, and Germany increased 23% compared to a year ago. Luxoft finished the financial year with 7,519 employees, of which 6,366 were delivery professionals, who continued to drive average productivity to an annual record of $69,200 per engineer, which represents an increase of 5.4% from $65,650 a year ago. The average delivery headcount increased by 20.1% as compared to the financial year ended March 31, 2013, which is 6.5% slower than the revenue growth for the same period, while employee attrition stood at 9.9% and approached a historical low. "This has been a very strong year for Luxoft. We have generated superior revenue growth and increased essentially every profitability metric as compared to the previous year. Two new accounts entered our top 10 customer list, as they showed accelerated revenue growth and replaced some of the slower growing accounts. We continue developing our high-potential clients. That account group in the aggregate brought us an average revenue growth well in excess of 100% versus last year," said Roman Yakushkin, Chief Financial Officer. "The combination of our competitive industry-focused offerings, quality of our services and overall robust demand environment allows us to forecast the same solid organic top line growth as we started with last year. This year a lot of our operating focus will be on proper execution of Luxoft: Global Upgrade program, which will prompt some nonrecurring items on the investment and the expense sides, in order to introduce measurable business efficiencies and secure further growth for the years ahead." Outlook for the First Quarter and Financial Year Ending March 31, 2015: The Company is providing the following guidance for the three months ending June 30, 2015:
The Company is providing the following guidance for the financial year ending March 31, 2015:
During the financial year 2015 Luxoft plans to introduce a series of changes to bring the Company to a new standard with respect to transparency and operational discipline, in line with other global and multinational corporations. With the approval of the Company's Board of Directors, the Company intends to establish tax residence in the United Kingdom and to cease its place of business and tax residence in Cyprus. Further, Luxoft Holding has recently launched a multi-year Global Upgrade program to implement another level of globalization across the enterprise and accelerate its expansion in the EU, the U.K., the U.S., Asia Pacific and North America. Conference Call Information: Luxoft Holding, Inc will host a conference call on May 15, 2014 at 8:00 a.m. EST to discuss its financial results for the three months and financial year ended March 31, 2014. 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=1033892. 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#13580785. The replay will be available from two hours as of the end of the call and up to 11:59 p.m. EST on May 29, 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 15 dedicated delivery centers worldwide. It has over 7500 employees across 20 offices in 13 countries in North America, Western ad Eastern Europe, and Asia Pacific. Luxoft is incorporated in Tortola, British Virgin Islands, has an 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, such as 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 consideration of further 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 final prospectus for our initial public offering, the final prospectus for our secondary offering 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.
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