Virtusa's revenue grows 26% to $42.5 million

Virtusa's revenue increased 26% year-over-year and 5.5% sequentially, to $42.5 million in the third quarter of fiscal 2008.

Virtusa reported third quarter income from operations of $5.9 million, or 13.8% of revenue, an increase of 44% compared to $4.1 million for the third quarter of fiscal 2007.

Net income for the third quarter of fiscal 2008 was $5.3 million or $0.21 per diluted share, compared to $8.7 million or $0.47 per diluted share, for the third quarter of fiscal 2007. The year-over-year decrease in net income of $3.4 million is primarily due to a one-time income tax benefit of $5 million in the prior year quarter caused by the reversal of the Company's deferred tax valuation allowance.

Earnings per share for the third quarter of fiscal 2008 reflects the lack of the one-time income tax benefit and a 34% year-over-year increase in diluted shares outstanding primarily due to the successful completion of the Company's initial public offering.

Virtusa's Chairman and CEO, Kris Canekeratne, said, "We are pleased with our financial results in the third quarter. We saw ongoing strength within our largest clients as well as ramp up of newer clients which we believe will help fuel the long term growth of the Company. Our ability to increase IT productivity and improve time-to-market through our differentiated platforming approach is resonating well within the marketplace", he said.

The Company ended the third quarter of fiscal 2008 with $107.6 million of cash and cash equivalents, short-term investments and long-term investments, which is an increase of $7.4 million from the prior quarter, due primarily to higher net income and improved collection of receivables.