Virtusa Corporation , a global business consulting and IT outsourcing company that combines innovation, technology leadership and industry solutions to transform the customer experience, today reported consolidated financial results for the first quarter fiscal year 2016, ended June 30, 2015.
First Quarter Fiscal 2016 Consolidated Financial Results
Revenue for the first quarter of fiscal 2016 was $134.8 million, an increase of 7% sequentially and 20% year-over-year, including contribution from the acquisition of Apparatus, Inc. which closed on April 1, 2015. On a constant currency basis,(1) first quarter revenue increased 7% sequentially and 22% year-over-year.
Virtusa reported GAAP income from operations of $12.4 million for the first quarter of fiscal 2016, compared to $14.5 million for the fourth quarter of fiscal 2015, and an increase compared to $11.2 million for the first quarter of fiscal 2015.
On a GAAP basis, net income for the first quarter of fiscal 2016 was $10.1 million, or $0.34 per diluted share, compared to $11.6 million, or $0.39 per diluted share, for the fourth quarter of fiscal 2015, and an increase from $9.0 million, or $0.31 per diluted share, for the first quarter of fiscal 2015.
Non GAAP Results:
Non-GAAP income from operations, which excludes stock-based compensation expense and acquisition related expenses, was $18.2 million for the first quarter of fiscal 2016, compared to $19.2 million for the fourth quarter of fiscal 2015, and an increase compared to $14.0 million for the first quarter of fiscal 2015.
Non-GAAP net income, which excludes stock-based compensation expense, acquisition related expenses, and foreign currency transaction gains and losses, each net of tax, for the first quarter of fiscal 2016 was $14.4 million, or $0.48 per diluted share, compared to $ 15.1 million, or $0.51 per diluted share, for the fourth quarter of fiscal 2015, and compared to $11.1 million, or $0.38 per diluted share, for the first quarter of fiscal 2015.
Balance Sheet and Cash Flow
The Company ended the first quarter of fiscal 2016 with $200.7 million of cash, cash equivalents, and short-term and long-term investments.(2) During the June quarter Virtusa invested $33.4 million of cash to complete the acquisition of Apparatus, Inc.
Acquisition of Agora Group
On July 28, 2015, Virtusa acquired the business of Agora Group, Inc., an IT consulting organization headquartered in Atlanta, Georgia, USA, focused on implementing and integrating business process management (BPM) solutions on leading BPM suites. Agora Group employs approximately 60 experienced practitioners with deep knowledge in BPM-related solutions.
Under the terms of the asset purchase agreement, Virtusa acquired Agora Group, Inc.’s business for approximately $7.5 million in cash (net of working capital adjustments). Virtusa has also agreed to issue an aggregate of up to $2.89 million in restricted stock awards from Virtusa’s stock option and incentive plan, not to exceed 77,067 shares, to certain Agora employees. The restricted stock awards will vest annually over a four year period.
Kris Canekeratne, Virtusa’s Chairman and CEO, stated, “The first quarter was a strong start to fiscal year 2016. Our growth continues to be driven by our differentiated value proposition, which enables our clients to improve operating efficiencies and reduce costs through our industry-leading solutions. Simultaneously, we help clients reimagine their business and expand their addressable market through our transformational digital solutions.”
Ranjan Kalia, Chief Financial Officer, said, “We are pleased with our first quarter results, and believe we are well positioned to achieve our fiscal year 2016 outlook. Mr. Kalia added, “The Apparatus integration remains on track with initial success generating synergy revenue opportunities within the Virtusa client base.”