May 18, 2017

Despite soaring revenues, Virtusa profits drop 73%

PHOTO/Matt VOLPINI
Kris Canekeratne, Chairman and CEO, Virtusa Corp.

Virtusa Corp.'s GAAP net income fell by $32.9 million for the entire 2017 fiscal year, as the company increased its revenue by 43 percent.

The Westborough-based technology company brought in $858.7 million in revenue in its 2017 fiscal year, which ended March 31, according to a Tuesday press release. In 2016, it brought in $600.3 million in revenue.

GAAP net income attributable to common shareholders was $11.9 million, compared to $44.8 million last year.

Virtusa reported fourth quarter revenue of $226 million, a 31.5-percent year-over-year increase over the $172 million it generated in the fourth quarter of 2016. Net income attributable to stockholders for that period was $10.5 million, compared to $12.3 million the year before.

The company expects to deliver above-industry revenue growth going forward, according to a statement from CFO Ranjan Kalia. Fiscal year 2018 revenue is expected to range between $920 million and $950 million, and GAAP diluted earnings per share is expected to be between $0.81 and $1.07.

First quarter revenue is projected to range between $222.5 million and $227.5 million, with GAAP diluted earnings per share between $0.07 and $0.13.

"Looking to fiscal 2018, we will intensify our digital offerings and strengthen our leadership position in this rapidly growing area," Chairman and CEO Kris Canekeratne said in a statement.

The company recently completed a $108-million strategic equity investment from The Orogen Group, which allowed Virtusa to strengthen its balance sheet by increasing its net cash position, Kalia said. The company expects to return capital to shareholders through its share buyback program.

Virtusa's stock fell to $27.64 at 10:30 a.m. Tuesday, after closing the day before at $32.40. The company has yet to recover from the drop and sat at $26.30 at 9:30 a.m. Thursday.

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