iGate net up 17 percent in third quarter

iGate Corporation Wednesday reported a net income of $37.3 million for the third quarter (July-September) of this calendar year (2014), registering 17 percent year-on-year (YoY) growth over the like period a year ago at $31.9 million.

The US-based tech firm, headed by former Infosys executive Ashok Vemuri, posted revenue of $322.8 million during the quarter under review (Q3) as against $293.4 million, an increase of 10 percent YoY, and 3.5 percent sequentially from $311.7 million in second quarter (April-June) of this year.

Net income in second quarter (Q2) was $3.1 million after a one-time charge of $51.8 million towards debt payments.

Operating margin, however, was 17.2 percent YoY lower at $68.8 million as against $78.4 million in the same period year ago and $70 million quarter ago (sequentially) under adjusted Ebitda (earnings before income tax, depreciation and amortisation).

"Our gross margin for third quarter declined to 35.3 percent from 41.4 percent in like period year ago and 36.6 percent quarter ago sequentially," the company said in a statement here, where it has its main software development centre.

The company had 34,455 employees with a net addition of 1,713 people during the quarter ending Sep 30.

Through its corporate university, the company is building market-ready talent capital and emerging technology solutions to strengthen its competitive position.

"We are able to sustain our broad-based growth both sequentially and year on year. Our clients are responding positively to the changes we have implemented," iGate chief executive Ashok Vemuri said in the statement.

iGate is the only IT services firm to be listed in Fortune 100 fastest-growing companies in the US, validating its go-to-market strategy.

"Our industry utility solutions, reference data management solution for the financial sector and the long term care solution for healthcare sector continue to find significant market traction," Vemuri added.

The company has also lowered its debt burden by $126 million during the quarter to improve its leverage.

"Although we had margin headwinds due to investments in some of our transformational client engagements, we expanded client coverage and hiring for growth," chief financial officer Sujit Sircar said on the occasion.

For the first nine months (Jan-September), though revenue increased 10 percent YoY to $936.7 million from $851.6 million, net income declined 25.4 percent YoY to $72 million from $96.6 million.