Results for Three Months and Full Financial Year Ended March 31, 2016 – Luxoft Holding, Inc.
Luxoft Holding, Inc announced results for the three months and a full financial year ended March 31, 2016. Revenue for the full financial year ended March 31, 2016 increased to $650.8 million, up 25.0% from $520.5 million a year ago.
Highlights – Three Months Ended March 31, 2016
US GAAP revenue amounted to $169.2 million, an increase of 23.2% year over year and an increase of 24.1% year over year on a constant currency basis
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $26.5 million and EBITDA margin was 15.7%, compared to $19.8 million and 14.4% in the year-ago quarter
Diluted EPS on a US GAAP basis was $0.43, compared to $0.27 in the year-ago quarter
Diluted EPS on a non-GAAP basis was $0.56, compared to $0.46 in the year-ago quarter
Highlights – Financial Year Ended March 31, 2016
US GAAP revenue amounted to $650.8 million, an increase of 25.0% year over year and an increase of 31.5% on a constant currency basis
Adjusted EBITDA was $123.5 million, an increase of 25.0% year over year
Cash flow from operating activities amounted to $105.4 million, or 16.2% of revenue, and an increase of 38.2% year over year
Free cash flow amounted to $80.1 million, or 12.3% of revenue, and an increase of 34.7% year over year
Diluted earnings per share (EPS) on a US GAAP basis was $2.06, compared to $1.91 last year
Diluted EPS on a non-GAAP basis was $2.72, compared to $2.28 last year
Employee productivity increased by 3.7% to $76,400 per delivery engineer
Revenue for the three months ended March 31, 2016 increased to $169.2 million, up 23.2% from $137.4 million for the same period a year ago, and decreased 1.6% sequentially, reflecting the normal seasonality of the business. Adjusted EBITDA was $26.5 million with corresponding margins of 15.7%, as compared to $19.8 million and 14.4%, respectively, in the year ago quarter. US GAAP net income was $14.6 million, or $0.43 per diluted share, compared to $9.0 million and $0.27 per diluted share for the same period a year ago, and $18.0 million and $0.52 sequentially. Non-GAAP net income was $18.8 million, or $0.56 per diluted share, compared to $15.1 million and $0.46 per diluted share for the same period a year ago, and $24.8 million and $0.72 sequentially.
Revenue for the full financial year ended March 31, 2016 increased to $650.8 million, up 25.0% from $520.5 million a year ago. US GAAP net income was $70.3 million, or $2.06 per diluted share, compared to $63.1 million and $1.91 per diluted share a year ago. Non-GAAP net income was $92.9 million, or $2.72 per diluted share, compared to $75.4 million and $2.28 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. The Company’s balance sheet remains strong, supported by operating cash flows increase of 38.2% year over year, free cash flow increase to 12.3% of revenue, and absence of long-term debt.
“We are pleased to report that our business has been experiencing strong momentum on the business and operational fronts”, said Dmitry Loschinin, Luxoft’s CEO and President. “We have posted a solid increase in revenues and earnings, while decreasing client concentration and rebalancing sources of our revenue growth from the top customer to other prominent high potential accounts. During the past year we enhanced our vertical offerings, expanded our centers of expertise, and added premium services, including advisory, platform architecture selection, packaged software services, and technology consulting. We continue to expand our global footprint and augment our strong presence in various regions of the E.U. with additional delivery centers to ensure timely and effective services to the clients around the globe. Based on our current outlook for the business for the next 18-24 months, we are excited at the possibility to cross $1 billion in revenues for the year ending March 31, 2018.”
Five of Luxoft’s six verticals experienced revenue growth, with Automotive and Transport, Financial Services, and Technology delivering the strongest performance: 37.1%, 28.5% and 21.6% growth, respectively, on a year over year basis. The company also exhibited solid performance across all of its core revenue-generating geographies: revenues generated in Switzerland increased 117.5%, the U.K. revenues increased 39.8%, and German revenues increased 33.4%, as compared to last financial year. The company finished the year with 11,087 employees, of which 9,239 were delivery professionals, who continued to drive average productivity to $76,400 per engineer, which represents an annual increase of 3.7%. The average delivery headcount increased by 20.7% as compared to the financial year ended March 31, 2015, which is 4.3% slower than the revenue growth for the same period. Employee attrition stood at 10.3%. The effective tax rate for the full financial year ended March 31, 2016 was 14.7%.
“This is our 16th consecutive year of strong revenue growth and profitability. We are encouraged by the performance of the business underpinned by an increasing demand for our services and solutions from a global customer base. Key themes revolve around regulatory and compliance and standardization in the financial sector and various disruptive technology-related themes in the automotive, embedded development and telecom sectors,” stated Roman Yakushkin, Chief Financial Officer. “Our company continues to consistently increase quality of its balance sheet, including maintaining virtually no debt, and excellent free cash flow generation capabilities. That positions us well for future M&A activity, ongoing investments into R&D, and other factors to secure recurring long-term growth for the company for years to come. ”
Outlook for the Financial Year Ending March 31, 2017
Revenue is expected to be at least $780.9 million, an increase of at least 20.0% year over year, of which at least 15% growth to be organic
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 34,144,982 diluted shares
Conference Call Information
A conference call will be conducted with the members of Luxoft’s senior management at 8:00 a.m. EDT on Friday, May 13, 2016 to review the financial and operational performance of the company for the above-mentioned periods.
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://services.choruscall.com/links/lxft160513. 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# 13635345. 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 27, 2016. The replay will also be available at Luxoft’s Investor Relations portal for 14 days following the call.
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Luxoft Holding, Inc (NYSE: LXFT) 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 28 dedicated delivery centres worldwide. It has over 10,500 employees across 32 offices in 17 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 visithttp://www.luxoft.com