Financial results for nine months FY'16 – Luxoft Holding, Inc.
Luxoft Holdings, Inc. have released the financial results for first three quarters of 2015. The results for three and nine months ended December 31, 2015 are once again very positive, marked by respective 24.5% and 35.3% revenue growth in constant currency.
As part of the Luxoft group, Excelian are pleased to see these positive results. Since the acquisition back in February 2015, Excelian has become a strong brand within the Luxoft group and as a result of the positive integration which has taken place, Excelian is now emerging as an even more powerful player in the Financial Services domain. With Excelian’s expertise and consulting capabilities combined with Luxoft’s domain-focused software engineering services, Excelian are now able to compete successfully amongst the leading global technology services and consulting powerhouses.
Highlights – Nine Months Ended December 31, 2015:
US GAAP revenue amounted to $481.5 million, an increase of 25.7% year over year
US GAAP revenue on the constant currency basis amounted to $518.4 million, an increase of 35.3% year over year
Adjusted EBITDA was $96.9 million and EBITDA margin was 20.1%, compared to $79.0 million and 20.6% for the same period last year
Diluted EPS on a US GAAP basis was $1.62, compared to $1.64 in the nine months of last year
Diluted EPS on a non-GAAP basis was $2.16, compared to $1.82 in the nine months of last year
High Potential Account group generated revenues in access of $110 million, an increase of over 170% year over year
Top customer client concentration decreased 9.9% year over year
Productivity per engineer reached $77,208, an increase of 3.6% vs. the same period a year ago
“Our company has delivered another quarter of strong organic growth and profitability, fully in line with our expectations. We are witnessing a paradigm shift in the way information technology industry operates and IT services are being consumed,” said Dmitry Loschinin, CEO and President of Luxoft. He added: “We believe that the offerings that we have in each domain of our expertise are extremely relevant for demand of today’s clients. That is the main reason our pipeline remains resilient and supports strong financial and operating performance of Luxoft each quarter. While customer concentration with our top client has decreased by 6% on the sequential basis and about 10% year over year, our second largest client and many other top 10 accounts delivered outstanding performance. One of our new automotive High Potential Accounts (HPAs) has been developing very well and entered top 10 list as of the end of this quarter. Our HPA group as a whole delivered 177% year over year growth for the past nine months and is on track to deliver at least 25% of our annual top line at the end of this financial year. Over the past three months we added two new HPAs, one of which is a premier U.S.-based computer data storage provider and hard disk drive manufacturers in the world. The other is an Asian multinational conglomerate operating in telecom space, among others. Furthermore, Luxoft went through another stage of expansion: we forged new partnerships with QNX, expanded our geographic presence in Germany and Poland, and opened new locations in Sweden and Luxembourg. We are pleased with the progress of the financial year 2016 and look forward to realizing new opportunities that lie ahead in 2017 and beyond.”
Virtually all of Luxoft’s key verticals delivered strong performance during the course of the year with Automotive and Transport, Technology and Financial Services delivering most robust annual growth of 39%, 36% and 29%, respectively. For the same period, the Company generated historically steady revenue growth across its core geographies: revenues generated in the U.K. increased 50.5%, Swiss revenues increased 93.9%, and German revenues increased 34.6% compared to the year-ago quarter. Luxoft finished the first nine months of this financial year with 10,589 employees, of which 8,818 were delivery professionals, who continued to drive average productivity during this period to another record – in excess of $77,200 per engineer or 3.6% annual growth. Attrition remained at the historically normal level of 10.3%. The effective tax rate for the nine months ended December 31, 2015 was 14.5%, in line with 14%-15% expected range for current fiscal year.
“We are excited to present a set of solid financial results to our shareholders. Luxoft continues to make strides for expansion and constant improvements in our offerings, expertise, management, engineering delivery and geographical footprint. As has been the case during the challenging years of 2008-2009 and 2012, Luxoft continues to deliver double-digit organic growth on a cumulative basis, despite expected quarterly volatility and material foreign currency headwinds. Our offerings and solutions successfully resonate through economic cycles with the needs of clients globally and we hope it will continue. Growth in the Automotive & Transport vertical over the past quarter, which amounted to 13.9% of the firm’s revenue as of December 31, 2015, up from 10.6% last quarter, is a highlight of Luxoft’s quarterly performance. This quarter we also made a series of improvements on the balance sheet front, which resulted in higher levels of operating and free cash flows and improved days sales outstanding (DSO) dynamic. I am especially glad to highlight that our staff growth continues to down-pace revenue growth, while delivering another solid hike in productivity by 3.6% to cross $77,000 in revenue per engineer,” said Roman Yakushkin, Chief Financial Officer.
Furthermore, Luxoft has published the “Outlook for the Year Ending March 31, 2016”, which includes information about possible or assumed future results of our business and financial condition, as well as the results of operations, liquidity, plans and objectives. It states that the Company is increasing its original revenue and EPS guidance for the financial year ending March 31, 2016:
Revenue is expected to reach at least $645.5 million, an increase of at least 24.0% year over year. In constant currency terms the management increase guidance to 28% year over year, up from previous 26%.
EBITDA margin adjusted for stock-based compensation is expected to be in the range of 17.0% - 19.0%.
Fully diluted EPS is expected to reach at least $2.05 on a US GAAP basis; fully diluted EPS is expected to reach at least $2.60 on a non-GAAP basis.
EPS is based on an estimated weighted average of 34,159,416 diluted shares.
The management expects to end the financial year with the effective tax rate between 14.3% and 15%