Luxoft Holding Reports Financial Results

Luxoft Holding, Inc. (NYSE: LXFT) released earnings for the first quarter of 2018, revealing troublesome trends and softening its guidance for the year.

The company maintained momentum in their telecom and automotive sectors, 157.1% and 38% growth respectively, but faced “additional headwinds” such as seasonal weakness as well as softer growth with two major customers. Luxoft reported a non-GAAP diluted EPS $0.50 compared to year prior’s $0.62, as well as a lower EBITDA of $26.4 million compared to $29.6 million last year. The bright side however is that revenue had grown a considerable 17.5% to $209.2 million for the first quarter, but that has not helped as Luxoft’s stock slid 35% before slightly regaining steam by midday.

“We posted a top line growth for the quarter below 20%, impacted by the expected deceleration in the top two accounts. Additional headwinds came from seasonal weakness, decision making slowdown in the financial services vertical, and softer growth within two large M&A-related customers, affected by their internal reorganizations. Despite of that, outside of the top two accounts the business posted a strong annual growth in excess of 55%,” said Dmitry Loschinin, CEO and President, “…Financial year 2018 is a pivotal year for our company, with a lot of moving parts, some challenges, yet really exciting changes and business opportunities.”

However, due to the subpar performance at the start of their fiscal year, the company has also lowered its guidance, dropping expected revenue to $920 million from previously prophesized $943 and revising the adjusted EBITDA margin to 15.5% – 16.5% from 17.0% – 19.0%.

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