What happened
Shares of IT service provider Luxoft Holding Inc. (LXFT) rose sharply on Friday following the company's fiscal second-quarter report. Luxoft beat expectations for earnings and produced double-digit revenue growth, enough good news to send the stock about 15% higher by noon EST.
So what
Luxoft produced second-quarter revenue of $228 million, up 16.1% year over year and in line with the average analyst estimate. Revenue from the automotive and transport industry soared 76% year over year, while revenue from the financial services industry, Luxoft's largest industry vertical, rose just 4.9%.
Image source: Luxoft Holding Inc.
The company also reduced its dependence on its two largest customers, bringing the percentage of revenue from these customers to 35.4%, down about 10 percentage points year over year. Outside these two top accounts, Luxoft produced revenue growth of 37.5% year over year.
Non-GAAP earnings per share came in at $0.82, down from $0.83 in the prior-year period but $0.05 better than analysts were expecting. GAAP EPS was $0.54, up from $0.48 in the prior-year period.
Luxoft CEO and President Dmitry Loschinin commented on the company's outlook: "We continue to place strategic emphasis on accelerating our shift to digital innovation as demand for complex digital and cloud-based deployments remain strong. Looking ahead, we are confident that our overall strategy is aligned with the long-term trends across each of our verticals as we look to become an increasingly critical strategic partner for our customers."
Now what
Luxoft expects to produce full-year revenue of at least $920 million, up at least 17.1% compared to the previous year. Adjusted EBITDA margin is expected between 15.5% and 16.5%, while non-GAAP EPS is expected to be at least $2.85. Luxoft's fiscal year ends in March.
While the bottom line moved in the wrong direction on an adjusted basis, the company still beat expectations. This, along with double-digit revenue growth and solid full-year guidance, led investors to push up the stock on Friday.
