CEE-based software developer Luxoft saw Q2 revenues of $178m, up 20.3% yr/yr in dollar terms, 21.5% increase on a constant-currency basis.
Adjusted Earnings before interest, taxes, depreciation and amortization (EBITDA) was $29.6 million and EBITDA margin was 16.6%, compared to $27.2 million and 18.4%, respectively, in the year-ago quarter.
"This has been a good start to the new financial year for us. We opened it by posting strong growth for the first quarter. For the remainder of the year we look forward to executing the initiatives we embarked on during the first five months," said Dmitry Loschinin, Luxoft’s CEO and President. "We expect that this year will be transformational for Luxoft, when we expand into new verticals and geographies and solidify our existing core verticals and global sales efforts. We believe that the short-term uncertainty driven by Brexit will spur us to make changes that will increase the resilience of our business and help us capitalize on numerous opportunities resulting from the migration of enterprise operations globally and massive regulatory changes around the world.”
The core verticals continued to produce annual growth with financial services posting 18.2% growth and 32.8% growth outside of the top two accounts. Automotive and transport vertical posted 74.0% growth, while 183% growth has been generated outside of its top account. Telecom vertical posted 15.8% growth, and travel and aviation posted 10.7% growth.
The core revenue generating geographies experienced double and triple digit growth during the past quarter, as compared to the same period a year ago: revenues generated in Germany increased 46.9%, revenues generated in the UK increased 15.5%, revenues generated in Switzerland increased 152.6%, and revenues from other European countries increased 68.3%. As of June 30, 2016, the total number of employees was 11,322, revenue per billable engineer has increased to $75,498, while attrition stood at 10.9%, continuing to remain in the historical range.
The Company is reiterating its original revenue and EPS guidance for the financial year ending March 31, 2017: revenue is expected to be at least $781 million, an increase of at least 20.0% year over year
"We are pleased with the results our company generated in the first quarter. Despite the slowdown across our top three clients, we posted solid year-over-year growth, nearly all of which was organic, driven by significant demand from three of our core verticals - automotive, telecom and financial services,” stated Roman Yakushkin, Chief Financial Officer. "We expect our pricing power to continue to increase as we advance higher along the value chain providing premium services and end-to-end solutions to our customers. We continue to generate ample amounts of free cash flow and remain virtually debt-free, allowing us to pursue more tuck-in acquisitions in line with our current M&A strategy."