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Virtusa Corp  (NASDAQ:VRTU)
Q1 2020 Earnings Call
Aug. 08, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon and welcome to the Virtusa Corporation, First Quarter Fiscal 2020 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to William Maina, Investor Relations. Please go ahead.

William Maina -- Investor Relations

Thank you and welcome to Virtusa's first quarter fiscal year 2020 earnings conference call where we'll be discussing our financial results for Virtusa's first quarter ended June 30, 2019. On the call with me are Kris Canekeratne, our Chairman and Chief Executive Officer; and Ranjan Kalia, Executive Vice President and Chief Financial Officer.

Certain statements made on this call that are not based on historical information are forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

During this call, we may make, express or imply forward-looking statements relating to among other things Virtusa's expectations and assumptions concerning management's forecast of financial performance; the growth of Virtusa's business; the ability of Virtusa's clients to realize benefits from the use of Virtusa's IT services and management's plans, objectives and strategies.

These statements are neither promises nor guarantees and are subject to a variety of risks and uncertainties, many of which are beyond Virtusa's control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Virtusa undertakes no obligation to update or revise the information disclosed during this call whether as a result of new information, future events or circumstances or otherwise. Other statements on this call also include certain non-GAAP financial information as defined by the SEC. We present constant currency revenue to provide a framework for assessing how our revenue performed, during the effect of foreign currency rate fluctuations.

We provide non-GAAP adjusted operating income, non-GAAP adjusted net income and non-GAAP earnings per share, which we believe provide insight into the operational performance of our business.

Reconciliations of non-GAAP to GAAP measures are included in today's earnings press release and data sheet, which can be found on the Investor Relations page of our website.

We also present a reconciliation of cash, cash equivalents, short-term and long-term investments that we believe provides insight into our total cash position and overall liquidity. Please note that a supplemental data presentation to our fiscal fourth quarter results has also been posted to our Investor Relations website. For additional disclosures regarding these and other risk factors faced by Virtusa, please see the disclosures contained in Virtusa's public filings with the Securities and Exchange Commission and in our earnings press release.

With that, I'd like to turn the call over to Kris.

Kris Canekertane -- Chairman and Chief Executive Officer

Thank you, Will. Good evening, everyone, and thank you for joining us today. Overall, our fiscal first quarter results were in line with our expectations. Total revenue was $319 million, representing 2.6% sequential decline and 6.3% year-over-year growth.

Non-GAAP EPS was $0.41. Our first quarter top line performance reflects continued momentum with our digital engineering and transformation solutions and services across our entire business. From a profitability perspective, our Q1 non-GAAP operating margin and EPS results tracked in line with our guidance.

Now, before discussing the demand environment and some of our recent accomplishments, I would like to address our updated fiscal 2020 guidance. In July, we learned that one of our European banking clients is reducing their second half spend and accelerating some of their programs with us to offshore.

Our partnership with this client remains strong and diversified across multiple lines of business and our pipeline of new business with them is robust in anticipation of resumed spending growth starting in calendar Q1 2020.

Additionally, as many of you already know, roughly 11% of our revenue is denominated in the UK pound, which has continued to slip versus the dollar largely due to Brexit uncertainty. Considering these two factors, we have reduced our fiscal 2020 revenue guidance and we are accelerating some of our cost containment programs to partially offset the impact on our profitability.

Notwithstanding this one client, our core business is growing in line with our long term expectations, and we continue to see good business momentum across all our industry groups and the majority of our client portfolio. This includes our largest client which is expected to resume sequential growth in the second quarter, as we previously discussed.

Underpinning this momentum is strong demand across all industries for digital and cloud transformation services to areas where Virtusa has strong competencies and is a proven leader. The engine driving our success is our Digital Transformation Studio, a unique platform which delivers deep digital engineering and industry expertise. We are client-specific and integrated agile scrum teams through our proprietary processes, gamified continuous integration, continuous deployment tool sets, adapters and accelerators.

Our digital transformation studio sets us apart in our ability to deliver effective digital and cloud transformation initiatives faster, better and more cost effectively.

I would like to now dig a little deeper into the current demand environment and the types of engagements Virtusa is winning. As we discussed previously, digital transformation or DT and cloud transformation or CT continue to get more strategic attention and budget as clients across industries seek to utilize these technologies to compete more effectively while reducing business as usual costs.

Virtually every major business today understands that becoming digital first and leveraging efficiencies and economics of cloud technology are essential pathways to continued business viability.

Accordingly, we believe that demand for DT and CT will only grow in the years ahead and that we are perfectly positioned to benefit from this growth. More specifically, we are seeing increasing client spend on digital and cloud transformation engagements, that include the decomposition of monolithic IT architectures into more nimble and integrated API and micro services architectures, DevOps modernization and data and application migrations to the cloud.

Digital transformation initiatives driven by regulatory and compliance requirements are also behind growing levels of demand, as is interest in intelligent automation technologies that directly contribute to our clients' business as usual, cost reduction efforts.

In the banking and financial services sector, cloud transformations are a significant driver of IT spend for many of our clients, including investments in cloud native application development, application and data migration and infrastructure.

For example, Virtusa has been selected by a leading U.S. multinational, financial services company for a large scale cloud transformation engagement. We have been test with evaluating our client's entire application portfolio of over 1,400 applications for cloud suitability and migration planning.

This engagement also has the potential for multiple downstream projects, including application refactoring, application sunsetting initiatives and further cloud migration opportunities. In another example, after a very competitive pursuit, Virtusa was selected by an European banking client to implement a large cloud transformation.

We were selected because of our industry leading CT offering and the unparalleled speed and cost benefits of our digital transformation studio. This strategic program commenced in our second quarter and represents the first phase of a multi-year engagement.

I mentioned before that regulatory compliance requirements are also driving increased demand for our services, including digital transformation. European and global banks, for example, are increasing their spend with us on regulatory compliance initiatives that enable them to become compliant with the forthcoming PSD2 directive deadline. We believe that less than one half of all European and global banks have become PSD2 complaint to date, and the banks that are already compliant are looking to monetize their early investments by developing API gateways with fee based usage models for customers and partners.

We were recently selected by a joint venture of large banks in Europe and the Middle East as an example to help them monetize their PSD 2 investments by launching an open banking platform which enables them to accelerate their journey to compliance by providing cutting edge digital services to their customers.

As we shared, demand for digital and cloud transmissions extend beyond the banking and financial services industry and is helping to drive our strong results in our communications and technology industry verticals, as well as with our healthcare clients.

Increased cloud adoption, including the cloudification of critical business operations and core business applications is becoming increasingly universal among C&T companies. In the telecom industry, virtualized networks and the emergence of 5G wireless are driving demand for digital engineering partners like Virtusa that have proven expertise in emerging communications and network technologies.

Health care clients are increasingly adopting cloud strategies, including a mix of public cloud platforms and open source cloud applications to expand their addressable markets and lower their maintenance and infrastructure expenses. Life sciences plans are focusing on digital transformation initiatives ranging from rationalizing applications to migrating to cloud native architectures.

For example, Virtusa was recently engaged by a global healthcare company specializing in dialysis devices and renal disorders to transform their entire renal care business. We are currently providing our client with a roadmap for building a HIPAA compliant platform which will support device to cloud connectivity, and we are developing the capabilities for our client to manage devices remotely.

In conclusion, I'm pleased with our first quarter results versus guidance, and we remain excited about the long term growth opportunity ahead of us.

While we are clearly disappointed with the change in direction at one of our European banking clients, it is important that we work closely and support them in their cost savings objectives. Continue to build on the great credibility and execution excellence we are known for and strategically position ourselves for strong future potential.

This is similar in nature to a few prior examples where we have weathered account specific downturns, strategically strengthened our position during those times and significantly expanded our future revenue and wallet share. We view the impacts of this planned spend reduction and unfavorable effects on our expected 2020 results as short term factors and we have a clear plan in place to partially offset the impact on our profitability for this fiscal year.

Our long term strategy remains on track. Demand is robust and our plan portfolio is as strong as it has ever been. Deep digital transformation continues to be a significant part of our client's agenda in all industries, which fits squarely with our core competency. Through our digital and cloud transformation solutions, we are able to help our clients better engage with their end customers, establish significant competitive advantages, and concurrently realize the significant cost reduction and efficiency improvement benefits of DT and CT executed through our industry leading digital transformation studio.

Excluding the impact of this one client, the momentum in our underlying business is strong and in line with our aspiration of above industry annual growth. The pipeline activity and the velocity in our digital lines of business gives us confidence that our strategy is working and will deliver strong results in the future.

Now, I'd like to turn the call over to Ranjan who will provide more details on our results as well as our second quarter and fiscal year 2020 guidance. Ranjan?

Ranjan Kalia -- Chief Financial Officer

Thanks Kris, and good evening to everyone. Let me start by summarizing the results of our fiscal first quarter 2020. I will then provide our current guidance for both fiscal second quarter and fiscal year ending March 31st, 2020, before opening the call for questions. Revenue for fiscal first quarter was $319 million, above the midpoint of our guidance and representing 2.6% sequential decline in reported currency and 2.3% decline in constant currency.

Year over year, our first quarter revenue increased 6.3% in reported currency and 7.3% in constant currency. Our year-over-year revenue growth was driven by strong growth in our communication and technology industry group.

Gross margin in the first quarter was 26.4%, primarily reflecting higher on-site effort from the large transformation healthcare deal we announced on our last earnings call. GAAP operating income for the first quarter was $13.4 million, compared with $23 million in the prior quarter and $13.9 million in the year ago period.

GAAP operating income was above the midpoint of our expectation, reflecting our top line results and stronger SG&A leverage. First quarter other expense was $2.7 million, this includes $1.2 million of net foreign exchange gain and $3.9 million of net interest and other expense.

Net interest and other expense includes $4.9 million of interest expense and $1 million of interest and other income. GAAP earnings per share was $0.15 in the first quarter. This compares to $0.24 in the prior quarter and a loss of $0.25 per share in the year ago period.

Now, turning to a non-GAAP results. Non-GAAP operating income was $24.2 million in the first quarter, compared to $34 million in the prior quarter and $27.5 million in the year ago period. First quarter non-GAAP operating margin was 7.6%, slightly above the midpoint of our expectation, primarily due to our revenue performance and SG&A leverage.

Non-GAAP earnings per share was $0.41 in the first quarter, $0.01 above the midpoint of our prior guidance. This is compared to $0.46 in the prior quarter and $0.50 in the year ago period. Turning to the balance sheet, ending cash at June 30th, 2019 was $208.3 million inclusive of cash and cash equivalents, short term and long term investments.

Cash provided by operating activities was $2.2 million in the first quarter. Our DSO for the first quarter was 75 days, an improvement of one day sequentially and four days from the year ago period.

Now, I will turn to a more detailed discussion of our first quarter revenue performance by industry group. Revenue across our industry groups was as follows. BFSI revenue decreased 4.4% sequentially and increased 70 basis points year-over-year, representing 60% of revenue. Our Q1 sequential change in BFSI primarily reflects a decline in revenue from our largest client, which we discussed on our last earnings call.

Excluding our largest client, the revenue from our banking portfolio grew approximately 2% sequentially. Communication and technology revenue increased 1% sequentially and 25.9% year over year, representing 32% of revenue.

C&T results were above our expectations reflecting strong growth with our technology and healthcare clients. Media information and other, revenue declined 3.2% quarter-over-quarter and 13.1% [Phonetic] year-over-year representing the remaining 8% of revenue. M&I performance was slightly better than our expectations. With respect to our geographical performance, our year over year growth was led by North America up 9.9% and rest of world up 7.6%, partially offset by Europe which declined 5.5% in reported currency and 1.1% in constant currency.

I will now provide our current guidance for fiscal second quarter and year ending March 31st, 2020. Revenue in second quarter of 2020 is expected to be in the range of $323 million to $331 million. Non GAAP diluted earnings per share in the second quarter of 2020 is expected to be in the range of $0.49 to $0.55. Our Q2 fiscal 2020 non-GAAP EPS guidance anticipates an average share count of approximately $34 million.

For the fiscal year ending March 31st, 2020 we expect revenue to be in the range of $1.32 billion to $1.354 billion. Non-GAAP diluted EPS for fiscal year 2020 is expected to be in the range of $2.45 to $2.65. Our guidance excludes $24 million of stock compensation expense and $16.1 million of acquisition related charges.

For fiscal year 2020 non-GAAP EPS anticipates an average share count of approximately $34.1 million. Our current GAAP and non-GAAP guidance is based on a set of assumptions that can be found on our data sheet located in the Investor Relations section of our website. When we spoke with you in May, we mentioned that our fiscal '20 revenue visibility was consistent with prior year, with slightly better backlog and qualified pipeline.

However, as Chris discussed, in early July, one of our European banking clients informed us of spend reductions, which will impact this year's renewal revenue with this account. Keeping this trend in mind, we have also decided to risk adjust our FY '20 pipeline conversions for this client.

Additionally, this client is accelerating their drive to offshore more work with us, which will also have an impact on a FY '20 revenue from this account. All of these factors are impacting current year revenue with this client by approximately $37 million.

In addition, since we last provided guidance, the UK pound has continued to slide versus the Dollar, which has created an incremental $7 million or 60 basis points headwind to our FY '20 revenue growth. Our European banking account revenue change and FX are impacting our FY '20 revenue guidance by approximately $44 million, which is partially being offset by incremental growth at our top ten clients.

As a result of these factors, we have adjusted the midpoint of fiscal '20 revenue guidance by $39 million. As expected, the large healthcare transformation deal we mentioned in our fiscal Q4 '19 call was consummated during the first quarter.

In addition, when adjusted for the impact of one European banking client discussed earlier, all our industry verticals continue to grow in line or slightly better than our prior expectations on a constant currency basis. At the midpoint of our fiscal Q2 guidance, revenue is expected to increase approximately 2.5% sequentially.

As previously discussed, revenue from our largest client is expected to resume sequential growth in Q2. Sequential non-GAAP operating margin accretion is expected to resume in fiscal Q2 in line with our prior outlook.

For FY '20 at the midpoint of our guidance range, we now expect revenue growth of 7.4% in reported currency, an 8.1% in constant currency. In addition, we now expect 60 basis points of non-GAAP operating margin accretion in FY '20 versus 100 basis points previously. This reflects 70 basis points of margin impact from lower client revenue, 20 basis points of margin impact from incremental FX headwinds, partially offset by accelerating the cost containment programs we initiated at the start of this year.

Our non-GAAP effective tax rate is expected to be 30% for fiscal 2020 versus 31.2% previously. As a reminder, this does not include any BEAT tax impact as we are contemplating a reorganization of our Indian legal entities.

Our current non-GAAP guidance anticipates $18.5 million of interest expense.

Lastly, we are expecting healthy non-GAAP EPS growth of 20% in FY '20. Before closing, as you probably noticed in our earnings press release, our Board of Directors has authorized a new $30 million share repurchase program.

We plan to opportunistically repurchase our stock using our existing credit facility as well as cash on hand while maintaining ample liquidity to support our growth strategies. In conclusion, our first quarter results exceeded the midpoint of our prior guidance.

Aside from the revenue impact of one client, our business continues to grow largely in line with our expectations.

We have accelerated plans to calibrate our cost structure to enable us to deliver year-over-year margin expansion, and our new share purchase program will contribute incremental EPS accretion. The underlying growth drivers of our business remains solid and we are well positioned to deliver revenue growth and margin expansion in FY'20 and beyond.

Operator, you may now begin the Q&A session.

Questions and Answers:

Operator

We will now begin the question-and-answer session. [Operator Instruction]. And our first question comes from Joseph Foresi of Cantor Fitzgerald. Please go ahead.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Hi. Maybe we could just talk about the European financial client first. It's fairly unusual I guess to see budgets opened during the middle of the year. Maybe you could just give us some more color as to why those cuts were being made, to what portion of the business those cuts are being made, and what gives you confidence that the spending will resume?

Kris Canekertane -- Chairman and Chief Executive Officer

Hi, Joe, this is Kris. So as we said earlier, we learnt in July, early July that one of our banking and financial services clients in Europe have decided to reduce their spend on IT. A large part of this is driven by their desire and objective of becoming a leader in cost income ratio in the banking sector.

Now, as a result of our goals and objectives, we have decided to delay the start of some programs, calendar Q1 2020, not renewing certain programs and accelerating some of our programs to offshore. Not withstanding, our pipeline continues to grow although start dates have been pushed to calendar Q1 2020.

Having said this, we have an excellent track record with this client, and it is critically important that we support their second half CY calendar year 2019 cost objective and strategically position ourselves for future growth.

Ranjan Kalia -- Chief Financial Officer

Joe, just -- you know, and internal checks, we believe show us that there's a little bit of a mix spending issue. I think the fully -- on a full year bases, their budgets are probably locked, their budgets are accelerating year over year, but it was a mixed spending issue, first half versus second half. So they're really trying to rebalance their spending patterns first half versus second half. And that's impacting our second half revenue with them.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Okay. And then secondly, just as far as, you know, the resources and I guess I'll ask this kind of two ways resources and visibility. From a resources perspective, are you going to hold those resources, and that's why you're taken so many basis point impact to margins, and then redeploy them or try to use them as efficiently until that business comes back?

And then secondly, you know, we held a call a couple of months ago and we talked about there being fairly high visibility. But since the beginning of the year, we heard about a large client. And clearly, you're right about that. That large client has come back. But now we're hearing about a European client. So maybe we could just get an update on where you stand from a visibility standpoint and what you're going to do with those resources.

Thanks.

Kris Canekertane -- Chairman and Chief Executive Officer

So Joe in terms of resources, you know, it'll be a combination of the two. Some will be redeployed and, you know, some we will have to look at further actions than that and that's really what is impacting the margins. In fact, we believe some of the margins will also relate into severance type of expenditures that are already being absorbed in the margin impact.

So in this case, we don't believe all of it will be absorbed back into growth in the business, partially some will be absorbed, some may not be absorbed. In terms of revenue visibility, we have tried to address it in our prepared remarks. When we look at the revenue visibility at the beginning of the year -- the backlog, the pipeline, what we have really -- the backlog pretty much stays as it is that we have with this client.

The only piece that the backlog getting impacted is really by the offshoring element. The big piece that is really impacted is really the renewal, which we always account for as a very high percentage of renewal rate, because that's really been our historical past practice, and that continues to hold true with all our client base, except for -- in this client. So we've readjusted the renewal revenue for this client, because we really significantly readjusted the renewal revenue, we still get prudent to actually adjust the pipeline for this year.

And Joe, this is Kris. So outside of this one client, the rest of our business is growing approximately 5% sequentially and above industry growth year-over-year, in line with our long term growth aspirations.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Thank you.

Ranjan Kalia -- Chief Financial Officer

And Joe, even in this client, what we have seen actually the new pipeline injection still continues. So that hasn't been held back. We're just -- we feel like the patent right now is a little bit of readjustment of first half spending versus second half spending.

So it might not be that prudent for us to use the historical conversion ratios that we use on pipeline for this account, so that's really we've adjusted it.

We believe lot of that pipeline will translate back into revenue when they resume spending which is now being talked about in this calendar '20.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Thank you.

Operator

[Operator Instruction] And our next question will come from Maggie Nolan of William Blair. Please go ahead.

Maggie Nolan -- William Blair -- Analyst

Hi. A follow up on that large client conversation, the large banking client. How much of the impact is related to some of the work being moved offshore? And it sounds like that's an accelerated rate. So was this something that you had expected to do with them over time?

And it's just hitting all at once, and how long was that previous expectation? I'm trying to get an understanding of how much of this work is still kind of recurring in the next year, but it's just now happening from offshore.

Kris Canekertane -- Chairman and Chief Executive Officer

Yes. Hi, Maggie, it's Kris. So once again, they are basically delaying the start of some of their programs to calendar Q1, 2020, not renewing certain programs and accelerating some of our programs to offshore. Those are the three drivers. On accelerating the offshoring program, that's approximately about an 11% shift from onshore to offshore, and clearly, because they have been on a fairly aggressive spend pattern, in and around transformation in the first half of the year, and they have elected to basically cut back on their second half cost. They are essentially doing all of these three things simultaneously.

Now, they're very confident and as Ranjan said earlier, the pipeline with our large client in Europe is growing fairly significantly. However, we expect that much of that conversion will only contribute starting in calendar Q1 '20.

Maggie Nolan -- William Blair -- Analyst

Okay. And then good color on kind of the rest of the business. I'm wondering if you could get a little more granular, you know, what is the expectation for financial services growth outside of that large client? And how is the traction there continuing?

And then is there an effort to diversify within the financial services and potentially decrease some of this client concentration or decrease exposure to banking, whatever the efforts may be? Any color there would be great. Thank you.

Ranjan Kalia -- Chief Financial Officer

So Maggie like Kris alluded if, you know, when we look at our business we look at the impact that the business had with regards to our largest client, earlier in Q1 and then, you know that as you can see in the data sheet that we provided, we called for that client would start to really resume spending. And in fact, our Q1 expectations that there would be actuals would actually a little bit better than the expectations that we had for the Q1 client.

And then this largest client, and they're really starting to show sequential growth rate in Q2. And then we have this other European client issue. Now if I bucket those two, if I look at the growth of Virtusa as a Company, ex the large client or ex this one European client, it really in both those cases really shows a double digit, low double digit growth.

If I look at the Company growth, combining these two events, then we're really talking almost a mid teens growth for the Company, for the rest of the business. So strong growth that we have across the business that we talk and especially, you know, when we look at our C&T business, when we look at inside the healthcare segment of the business, that has all grown very rapidly.

Maggie Nolan -- William Blair -- Analyst

Thank you.

Operator

Our next question comes from Puneet Jain of JP Morgan. Please go ahead.

Puneet Jain -- JP Morgan Chase -- Analyst

Yeah, hi. Thanks for taking my question. So it seems like the impact that this European client was not related to Brexit. So can you talk about the extent you have stress-tested your guidance for various Brexit scenarios?

Kris Canekertane -- Chairman and Chief Executive Officer

Puneet, that's a great question, this is Kris. We are not certain whether this was Brexit related or not. What we are seeing in general is that there are certain banking and financial services clients in Europe that are spending ahead of Brexit uncertainty and preparing themselves for fairly large transformational programs to operate better in a post Brexit world.

And I'm sure, conversely, there are some banking clients that may be more focused just in the UK. That may be looking at the Brexit uncertainty and waiting until the dust settles to determine their direction and course, right?

So we are seeing across the board in Europe, a tale of two cities, when it comes to Brexit impact. As a matter of fact, we very recently won a very competitive large engagement for another European bank who is specifically investing in systems separation and cloudification to essentially operate in a post-Brexit environment, right? So we're basically seeing both sides of this.

Puneet Jain -- JP Morgan Chase -- Analyst

Got it. And how should we think about margin expansion potential beyond this year? Just surprised by the margin guidance given you also had benefits from restructuring you did last year. So --

Kris Canekertane -- Chairman and Chief Executive Officer

Yes.

Puneet Jain -- JP Morgan Chase -- Analyst

Was there any underlying change in operations delivery that's hurting margins this year?

Kris Canekertane -- Chairman and Chief Executive Officer

No. I think like I provided earlier in the prepared remarks, Puneet if you look at it, a 70 basis points of impact is really happening in the margin impact because of the revenue impact that's happening, $37 million worth of revenue impact that's just from this one client in the back half that we have.

Another 20 basis points is FX. Now that is being netted by cost containment program. I mean, if you run the math you'll probably see that the cost containment programs are really about adding about 50 basis points in the back half.

And those are the cost containment programs we will always really continue to run, really preparing ourselves for the following year. So, I mean, you've seen us come out and really talk about significant cost containment programs that we are announcing for the following year. We comment out usually in the Q3 time. The reason why we are able to do that is because we are always working on this.

What did we do in this case? We significantly accelerated that. Yes, we could not cover the whole 100 basis points impact, or all of the 90 basis points, the 70 basis points of the revenue and the 20 basis points of FX, we couldn't do that, all of it. But we were able to partially reduce the impact by 50 basis points only because we have had a lot of these programs that are always in play at Virtusa.

And we believe those will continue to be in play for Virtusa, and nothing really changes for us, for our long term objective, which is continuing to be an above industry growth rate revenue Company and continue to deliver margins 100 basis points to 150 basis points.

Puneet Jain -- JP Morgan Chase -- Analyst

Got it. Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Kris Canekeratne, for any closing remarks.

Kris Canekertane -- Chairman and Chief Executive Officer

Thank you. I would like to take this opportunity to thank our global team members for their dedication and hard work. Thank you for joining us on this call. And I look forward to updating you on our Q2 earnings call. Thank you.

Operator

[Operator Closing Remarks]

Duration: 41 minutes

Call participants:

William Maina -- Investor Relations

Kris Canekertane -- Chairman and Chief Executive Officer

Ranjan Kalia -- Chief Financial Officer

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Maggie Nolan -- William Blair -- Analyst

Puneet Jain -- JP Morgan Chase -- Analyst

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