Virtusa (VRTU) Tops Q3 EPS by 2c, Revenues Miss; Offers Q4 & FY20 EPS Outlook Above Consensus

Virtusa (NASDAQ: VRTU) reported Q3 EPS of $0.78, $0.02 better than the analyst estimate of $0.76. Revenue for the quarter came in at $335.1 million versus the consensus estimate of $336.77 million.

• Third quarter fiscal 2020 revenue of $335.1 million increased 2.0% sequentially and 6.5% year-over-year.
• Third quarter fiscal 2020 GAAP diluted EPS of $0.38. Non-GAAP diluted EPS of $0.78.
• Third quarter fiscal 2020 GAAP operating income of $30.4 million. Non-GAAP operating income of $40.5 million.
• Cash provided by operating activities of $50.7 million, representing 15.1% of revenue.

Management Commentary

Kris Canekeratne, Virtusa’s Chairman and CEO, stated, “Virtusa’s competitive advantages, market position and performance remain strong. Demand for Digital and Cloud Transformation is expanding rapidly across the globe. We will continue to capitalize on this trend and expect to deliver greater than industry growth over the long term. We are winning some of the largest and most strategic Transformation engagements because of our end-to-end digital engineering and deep domain expertise, understanding of emerging technologies, and our commitment to delivery excellence. Together, these form the foundation of our competitive advantage and are largely responsible for our recognition as the Transformation market leader.”

Ranjan Kalia, Chief Financial Officer, said, “In the fiscal third quarter we generated 170 basis points of year-over-year non-GAAP operating margin accretion, non-GAAP EPS above the midpoint of our guidance, and strong operating cash flow. We expect strong 25% non-GAAP EPS growth for the full fiscal year 2020 supported by top-line growth in line with our prior expectations at the midpoint, margin expansion, significant tax benefits, and our share buyback program.”

GUIDANCE:

Virtusa sees Q4 2020 EPS of $0.90-$0.96, versus the consensus of $0.87. Virtusa sees Q4 2020 revenue of $353.4-361.4 million, versus the consensus of $356.15 million.

Virtusa sees FY2020 EPS of $2.63-$2.69, versus the consensus of $2.58. Virtusa sees FY2020 revenue of $1.336-1.344 billion, versus the consensus of $1.34 billion.

For earnings history and earnings-related data on Virtusa (VRTU) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Hydrofarm Holdings Group, Inc. (HYFM) Misses Q2 EPS by 134c
• Optimum Communications gets NYSE non-compliance notice over stock price