- Q2 revenue of $239.8M, up 5% from year-ago quarter and 9% sequentially
- Q2 EPS of $0.72 per diluted share, up 2% from year-ago quarter, and 51% sequentially
- Q2 cash & short term investments of $929.7M
- Global Headcount of 23,006 on June 30, 2015, down 5% versus prior year
TROY, Mich., July 23, 2015 (GLOBE NEWSWIRE) -- Syntel, Inc. (Nasdaq:SYNT), a global provider of digital transformation, information technology and knowledge process services to Global 2000 companies, today announced financial results for the second quarter, ended June 30, 2015.
Second Quarter Financial Highlights
Syntel's revenue for the second quarter rose to $239.8 million from $228.2 million in the prior-year period and $220.6 million in the first quarter of 2015. During the second quarter, Banking and Financial Services accounted for 48.3 percent of total revenue, with Retail, Logistics and Telecom at 16.6 percent, Healthcare and Life Sciences at 16.4 percent, Insurance at 14.6 percent, and Manufacturing at 4.1 percent.
The Company's gross margin was 38 percent in the second quarter, compared to 39.2 percent in the prior-year period and 35.7 percent in the first quarter of 2015. Selling, General and Administrative (SG&A) expenses were 9.1 percent of revenue in the second quarter, compared to 11.5 percent in the prior-year period and 16 percent in the previous quarter.
The second quarter income from operations was 28.9 percent of revenue as compared to 27.7 percent in the prior-year period and 19.7 percent in the first quarter. The sequential rise in operating margin during the second quarter primarily reflects higher revenue and utilization and the impact of currency-related balance sheet translations.
Net income for the second quarter was $60.6 million or $0.72 per diluted share, compared to $59.3 million or $0.71 per diluted share in the prior-year period and net income of $40 million or $0.48 per diluted share in the first quarter of 2015.
During Q2, Syntel spent $5.7 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $929.7 million. The Company ended the quarter with 23,006 employees globally.
"We executed well during the second quarter, regaining momentum across many of our industry groups," said Syntel CEO and President Nitin Rakesh. "Digital initiatives remained a high priority this quarter as customers sought to build competitive advantage and these projects started to ramp."
"Strong execution is evident in our Healthcare and Life Sciences industry group, which grew both sequentially and year on year despite some difficult year ago comparisons," said Rakesh. "I am pleased to see positive early returns on the investments we've made to broaden our capabilities in the payer and provider segments."
"Our ability to provide innovative solutions in response to rapid changes in our customers' businesses has been critical in strengthening these relationships and driving our growth. We remain committed to providing high-value solutions that address our clients' most pressing needs and look forward to supporting their long-term success."
Based on current visibility levels and an exchange rate assumption of 63.50 Indian rupees to the dollar, the Company currently expects 2015 revenue of $985 million to $1,005 million and EPS in the range of $2.70 to $2.85.
Syntel to Host Conference Call
Syntel will discuss its second quarter 2015 results today on a conference call at 10:00 a.m. (EDT). To listen to the call, please dial (877) 837-3915 in the U.S./Canada or (973) 638-3495 internationally. The call will also be broadcast live via the Internet at Syntel's web site: investor.syntelinc.com. Please access the site at least 15 minutes prior to the call to register and download any necessary software. A replay will be available until July 30, 2015 by dialing (855) 859-2056 and entering "71931291." International callers may dial (404) 537-3406 and enter the same pass code.
Syntel (Nasdaq:SYNT) is a global provider of digital transformation, information technology and knowledge process services to Global 2000 companies. Syntel's mission is to create new opportunities for clients by harnessing our passion, talent and innovation. We combine technology expertise, industry knowledge and a global delivery model to drive business value creation. Syntel's "Customer for Life" philosophy drives our relentless focus to build long-term, collaborative client partnerships. To learn more, visit us at: www.syntelinc.com
Safe Harbor Provision
This news release may include forward-looking statements, including those with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 or from other factors not currently anticipated.
|SYNTEL, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME|
|(IN THOUSANDS, EXCEPT PER SHARE DATA)|
|THREE MONTHS ENDED||SIX MONTHS ENDED|
|JUNE 30,||JUNE 30,|
|Net revenues||$ 239,797||$ 228,250||$ 460,396||$ 447,773|
|Cost of revenues||148,704||138,702||290,489||262,202|
|Selling, general and administrative expenses||21,728||26,321||57,110||58,542|
|Income from operations||69,365||63,227||112,797||127,029|
|Other income , net||9,887||12,175||19,225||23,960|
|Income before provision for income taxes||79,252||75,402||132,022||150,989|
|Income tax expense||18,673||16,118||31,422||33,557|
|Net income||$ 60,579||$ 59,284||$ 100,600||$ 117,432|
|Other Comprehensive Income|
|Foreign currency translation adjustments||$ (16,546)||$ (7,004)||$ (5,920)||$ 17,843|
|Gains on derivatives:|
|Gains arising during period on net investment hedges||--||--||--||724|
|Unrealized gains on securities:|
|Unrealized holding gains arising during period||2,413||2,889||5,178||5,272|
|Reclassification adjustment for gains included in net income||(1,712)||(1,541)||(2,905)||(3,054)|
|Defined benefit pension plans:|
|Net Profit (Loss) arising during period||--||(1)||--||--|
|Amortization of prior service cost included in net periodic pension cost||34||9||59||10|
|Other comprehensive income (Loss), before tax||(15,811)||(5,648)||(3,588)||20,795|
|Income tax benefit (expenses) related to Other Comprehensive Income (loss)||(547)||327||(1,033)||74|
|Other comprehensive income (Loss), net of tax||(16,358)||(5,321)||(4,621)||20,869|
|Comprehensive Income||$ 44,221||$ 53,963||$ 95,979||$ 138,301|
|EARNINGS PER SHARE:|
|Basic||$ 0.72||$ 0.71||$ 1.20||$ 1.40|
|Diluted||$ 0.72||$ 0.71||$ 1.20||$ 1.40|
|Weighted average common shares outstanding:|
|SYNTEL, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|June 30,||December 31,|
|Cash and cash equivalents||$ 489,883||$ 197,708|
|Short term investments||439,816||669,353|
|Accounts receivable, net of allowance for doubtful accounts of $632 at June 30, 2015 and $703 at December 31, 2014, respectively||115,543||111,993|
|Revenue earned in excess of billings||33,702||27,493|
|Deferred income taxes and other current assets||63,275||56,930|
|Total current assets||1,142,219||1,063,477|
|Property and equipment||218,971||210,206|
|Less accumulated depreciation and amortization||108,167||101,155|
|Property and equipment, net||110,804||109,051|
|Non current Term Deposits with Banks||90||105|
|Deferred income taxes and other non current assets||64,847||50,476|
|TOTAL ASSETS||$ 1,318,866||$ 1,224,015|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Accrued payroll and related costs||$ 49,016||$ 60,765|
|Income taxes payable||30,050||23,781|
|Accounts payable and other current liabilities||38,406||33,573|
|Loans and borrowings||134,475||8,852|
|Total current liabilities||254,866||130,237|
|Other non current liabilities||16,482||16,198|
|Non Current loans and borrowings||--||129,750|
|Total shareholders' equity||1,047,518||947,830|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$ 1,318,866||$ 1,224,015|