IGATE Q4 profit up 14.8% at $38 mn

Company optimistic of deal pipeline, growth outlook

IGATE, a Nasdaq-listed information technology services company, on Tuesday reported net profit of $38 million for the quarter ended December 31, growth of 14.6 per cent over the corresponding period a year ago. While the company’s revenue rose 10.7 per cent on a year-on-year basis, it added nine clients during the quarter.

North America which accounted for 78.8 per cent of Igate's overall revenues in Q4 grew 10.5 per cent year-on-year growth. During the quarter, Igate added nine clients which took the total number of active clients at the end of the quarter to 281.

Ashok Vemuri, president and CEO of Igate said that 2015 looking as a better year for the company with a healthy order pipeline and deal conversion. "As we enter 2015, our deal pipeline is much healthier as compared to what we saw in 2014 with US continuing to be strongest market for us," Vemuri said.

"However, we are seeing a shift the way technology is consumed today with a higher amunt of discretionary budget going towards newer technologies like digital," he added.

In the quarter, the company's operating margin fell by around 250 basis points primarily because of the cross currency impact as well as a one-time legal settlement charge of $4.6 million.

For the full year, the company reported revenue of $1268.2 million, an increase of 10.2 per cent over the previous year while the net profit declined by over 15 per cent primarily because of a one-time debt refinancing charge the company incurred in the third quarter. The operating margin for the full year stood at 21.8 per cent.

"We are satisfied with the cash flow position of the company and the de-leveraging of the balance sheet during the year. In addition, we induced the conversion of the 8 per cent Series B preferred stock on November 4, 2014, which will be value accretive going forward and will also improve our credit rating," said Sujit Sircar, CFO, Igate. "However, we continue to see foreign exchange volatility that needs to be monitored and observed carefully," he added.

For the full year, Igate added 29 new clients. On the hiring front, the company added 3,751 people on net basis in 2014, an increase of 13 per cent over the previous year. It also reiterated that its hiring model for hire-for-growth would continue in the coming year.