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 ended June 30, 2016.
Highlights – Three Months Ended June 30, 2016
- US GAAP revenue amounted to $178.0 million, an increase of 20.3% year over year on a reporting-currency basis and 21.5% increase on a constant-currency basis.
- Adjusted Earnings before interest, taxes, depreciation and amortization (EBITDA) was $29.6 million and EBITDA margin was 16.6%, compared to $27.2 million and 18.4%, respectively, in the year-ago quarter.
- Non-GAAP Net Income amounted to $21.0 million, an increase of 1.9% year over year.
- Diluted earnings per share (EPS) on a US GAAP basis was $0.42, compared to $0.43 in the year-ago quarter.
- Diluted EPS on a non-GAAP basis was $0.62, compared to $0.61 in the year-ago quarter.
Revenue for the three months ended June 30, 2016, increased to $178.0 million, up 20.3% from $148.1 million for the same period a year ago in the reporting currency and up 21.5% for the same period a year ago in constant currency. Adjusted EBITDA was $29.6 million and corresponding EBITDA margin was 16.6%, as compared to $27.2 million and 18.4%, respectively, in the year-ago quarter. US GAAP net income was $14.1 million, or $0.42 per diluted share, compared to $14.6 million and $0.43 per diluted share for the same period a year ago. Non-GAAP Net Income was $21.0 million, or $0.62 per diluted share, compared to $20.6 million and $0.61 per diluted share for the same period 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.
“This has been a good start to the new financial year for us. We opened it by posting strong growth for the first quarter. For the remainder of the year we look forward to executing the initiatives we embarked on during the first five months,” said Dmitry Loschinin, Luxoft’s CEO and President. “We expect that this year will be transformational for Luxoft, when we expand into new verticals and geographies and solidify our existing core verticals and global sales efforts. We believe that the short-term uncertainty driven by Brexit will spur us to make changes that will increase the resilience of our business and help us capitalize on numerous opportunities resulting from the migration of enterprise operations globally and massive regulatory changes around the world.”
The Company’s core verticals continued to produce healthy annual growth with financial services posting 18.2% growth and 32.8% growth outside of the top 2 accounts. Automotive and transport vertical posted 74.0% growth, while 183% growth has been generated outside of its top 1 account. Telecom vertical posted 15.8% growth, and travel and aviation posted 10.7% growth. The core revenue generating geographies experienced double and triple digit growth during the past quarter, as compared to the same period a year ago: revenues generated in Germany increased 46.9%, revenues generated in the U.K. increased 15.5%, revenues generated in Switzerland increased 152.6%, and revenues from other European countries increased 68.3%. Top 1 client concentration has decreased by 6.3% and top 3 client concentration has decreased by 2.8% on year over year basis. As of June 30, 2016, the total number of employees was 11,322, revenue per billable engineer has increased to $75,498, while attrition stood at 10.9%, continuing to remain in the historical range.
Outlook for The Year Ending March 31, 2017:
The Company is reiterating its original revenue and EPS guidance for the financial year ending March 31, 2017:
- Revenue is expected to be at least $781 million, an increase of at least 20.0% year over year
- Adjusted EBITDA margin is expected to be in the range of 17.0% – 19.0%
- Diluted EPS is expected to be at least $2.10 on a US GAAP basis and at least $2.85 on a non-GAAP basis
- EPS is based on an estimated weighted average of 33,866,995 diluted shares
“We are pleased with the results our company generated in the first quarter. Despite the slowdown across our top three clients, we posted solid year-over-year growth, nearly all of which was organic, driven by significant demand from three of our core verticals – automotive, telecom and financial services,” stated Roman Yakushkin, Chief Financial Officer. “We expect our pricing power to continue to increase as we advance higher along the value chain providing premium services and end-to-end solutions to our customers. We continue to generate ample amounts of free cash flow and remain virtually debt-free, allowing us to pursue more tuck-in acquisitions in line with our current M&A strategy.”
Conference Call Information:
Luxoft Holding, Inc will host a conference call on August 12, 2016, at 8:00 a.m. EDT to discuss its financial results for the three months ended June 30, 2016.
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 http://edge.media-server.com/m/p/ttwcwqdb. 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.
If you are unable to join our live event, a replay will be available by dialing 877-660-6853 (for domestic U.S. callers) or 201-612-7415 (for international callers) and entering the conference ID# 13641723. The replay will be available from two hours as of the end of the call and up to 11:59 p.m. EDT on August 26, 2016. The replay will also be available at Luxoft’s Investor Relations portal for 14 days following the call.
