Luxoft's Q1 saw its GAAP revenue at $106.3 million, an increase of 23.7% year-over-year and a decrease of 3.9% sequentially. There have been concerns because much of its work is done in Ukraine, but a statement by its CEO in March helped reassure customers. The proportion of its business done in Russia is now below 10% of its total workload, and its US business has jumped to 42% from 36% in the same quarter last year. As part of its response to changing markets, it will relocate its HQ for tax purposes to the UK.
Although the latest quarter is down on the previouel;s one, this reflects seasonality and the year over year results are strong. Most of Luxoft’s verticals experienced strong revenue growth, with Financial services and Automotive and transport delivering the strongest performance: 39% and 73% growth, respectively, on a year-over-year basis. The company exhibited solid performance across all of its core revenue-generating geographies: Revenues generated in the US increased 46%, the U.K. increased 25%, and Germany increased 23% compared to a year ago.
Luxoft finished the financial year with 7,519 employees, of which 6,366 were delivery professionals, who continued to drive average productivity to an annual record of $69,200 per engineer, which represents an increase of 5.4% from $65,650 a year ago. The average delivery headcount increased by 20.1% as compared to the financial year ended March 31, 2013, which is 6.5% slower than the revenue growth for the same period, while employee attrition stood at 9.9% and approached a historical low.
“This has been a very strong year for Luxoft. We have generated superior revenue growth and increased essentially every profitability metric as compared to the previous year. Two new accounts entered our top 10 customer list, as they showed accelerated revenue growth and replaced some of the slower growing accounts. We continue developing our high-potential clients. That account group in the aggregate brought us an average revenue growth well in excess of 100% versus last year,“ said Roman Yakushkin, Chief Financial Officer.
“This year a lot of our operating focus will be on proper execution of the Luxoft: Global Upgrade program, which will prompt some nonrecurring items on the investment and the expense sides, in order to introduce measurable business efficiencies and secure further growth for the years ahead.”
During the financial year 2015 Luxoft plans to introduce a series of changes to bring the Company to a new standard with respect to transparency and operational discipline, in line with other global and multinational corporations. With the approval of the Company’s Board of Directors, the company intends to establish tax residence in the United Kingdom and to cease its place of business and tax residence in Cyprus.