Virtusa Beats on Both Top and Bottom Lines

Virtusa (Nasdaq: VRTU  ) reported earnings on Jan. 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Virtusa beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded significantly.

Gross margins dropped, operating margins increased, net margins expanded.

Revenue details
Virtusa chalked up revenue of $86.5 million. The eight analysts polled by S&P Capital IQ expected revenue of $85.6 million on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $72.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.29. The eight earnings estimates compiled by S&P Capital IQ predicted $0.28 per share. GAAP EPS of $0.29 for Q3 were 32% higher than the prior-year quarter's $0.22 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.6%, 30 basis points worse than the prior-year quarter. Operating margin was 10.6%, 150 basis points better than the prior-year quarter. Net margin was 8.6%, 90 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $88.8 million. On the bottom line, the average EPS estimate is $0.32.

Next year's average estimate for revenue is $331.0 million. The average EPS estimate is $1.07.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 102 members out of 107 rating the stock outperform, and five members rating it underperform. Among 37 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 37 give Virtusa a green thumbs-up, and give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Virtusa is buy, with an average price target of $22.67.

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