Virtusa 4Q revenue up 10 percent to $ 111 m

Virtusa Corporation, a global business consulting and IT outsourcing company, reported consolidated financial results for the fourth quarter and full fiscal year 2014, ended March 31, 2014.

Revenue for the fourth quarter of fiscal 2014 was $111.1 million, an increase of 10% sequentially and 24% year-on-year in reported currency. On a constant currency basis, fourth quarter revenue increased 9% sequentially and 22% year-over-year.

Virtusa reported income from operations of $12.5 million for the fourth quarter of fiscal 2014, an increase compared to $11.2 million for the third quarter of 2014, and an increase compared to $9.4 million for the fourth quarter of 2013.

Net income for the fourth quarter of fiscal 2014 was $10.0 million, or $0.35 per diluted share, compared to $9.3 million, or $0.35 per diluted share, for the third quarter of 2014, and compared to $9.1 million, or $0.35 per diluted share, for the fourth quarter of 2013.

For the year ended March 31, 2014, revenue increased 19% in reported and constant currency, to a record $396.9 million, compared to $333.2 million for the year ended March 31, 2013. Virtusa reported an income of $42.4 million from operations for 2014, an increase of 29% compared to $32.9 million for 2013.

Net income for fiscal year 2014 was $34.4 million, or $1.27 per diluted share, an increase compared to $28.4 million or $1.11 per diluted share, for 2013.

The company ended fiscal year 2014 with $200.7 million of cash, cash equivalents, and short-term and long-term investments. Cash generated from operations was $9.4 million for the fourth quarter and $48.9 million for 2014.

Virtusa's Chairman and CEO, Kris Canekeratne said, "We are pleased with our fourth quarter and full fiscal year results, which reinforce that our strategic initiatives designed to differentiate our value proposition, grow our existing client base, expand geographically and enhance our service delivery are paying off."

"By addressing the duality clients face by helping them innovate new solutions and transforming their operating costs, the market opportunity for Virtusa continues to grow," he said.

"As we look to fiscal year 2015, our objectives are aligned with the success we have been having and are optimistic about our growth trajectory," Canekeratne said.

Chief Financial Officer, Ranjan Kalia said, "During the quarter, our revenue grew faster than the industry, as we had meaningful increases across our top 10 and non-top 10 client portfolios."

"We are also pleased with the progress we are making to extend our presence internationally."

"There has been a mixed shift towards international revenue, and we believe this diversification will continue to be a growth driver," he said.

"Consistent with previous fiscal years, we expect operating margin expansion in fiscal year 2015 as we drive significant top line growth," Kalia said.

The company's first quarter and fiscal year 2015 diluted EPS estimates assume an average share count of approximately 29.4 million (assuming no further exercises of stock-based awards) and assume a stock price of $33.38, which was derived from the average closing price of the company's stock over the five trading days ending on May 9, 2014.

Deviations from this stock price may cause actual EPS to vary based on share dilution from Virtusa's stock options and stock appreciation rights.