Syntel Reports Third Quarter 2013 Financial Results
- Q3 revenue of $209.9M, up 13% from year-ago quarter, and 4% sequentially
- Q3 EPS of $1.42 per diluted share, up 15% from year-ago quarter, and 25% sequentially
- Q3 cash & short term investments of $579M
- Global Headcount of 22,936 on September 30, 2013, up 14% from year-ago quarter
TROY, Mich., Oct. 17, 2013 (GLOBE NEWSWIRE) -- Syntel, Inc. (Nasdaq:SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) firm, today announced financial results for the third quarter, ended September 30, 2013.
Third Quarter Financial Highlights
Syntel's revenue for the third quarter increased 13 percent to $209.9 million from $186.4 million in the prior-year period, and increased four percent sequentially from $202.5 million in the second quarter of 2013. During the third quarter, Applications Outsourcing accounted for 77 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 15 percent, e-Business contributing seven percent and TeamSourcing at one percent.
The Company's gross margin was 46.6 percent in the third quarter, compared to 45.5 percent in the prior-year period and 41.3 percent in the second quarter of 2013. Selling, General and Administrative (SG&A) expenses were 11 percent of revenue in the third quarter, compared to 15.6 percent in the prior-year period and 9.4 percent in the previous quarter.
The third quarter income from operations was 35.6 percent of revenue as compared to 29.9 percent in the prior-year period and 31.9 percent in the second quarter. The sequential rise in operating margin during the third quarter reflects the impact of the depreciation in the Indian rupee, lower visa and immigration-related expenses and an ongoing focus on operational efficiency.
Net income for the third quarter was $59.4 million or $1.42 per diluted share, compared to $51.5 million or $1.23 per diluted share in the prior-year period and net income of $47.5 million or $1.14 per diluted share in the second quarter of 2013.
During Q3, Syntel spent $4.3 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $579 million. The Company also added 70 net employees, ending the quarter with 22,936 employees globally.
"We made solid progress on our strategic initiatives during the third quarter and built on the successes we have seen year-to-date," said Syntel CEO and President Prashant Ranade. "We are strengthening our customer relationships by investing in the technology areas that are relevant to our clients."
"Our responsiveness to our customers' needs and our flexibility in supporting their goals in a changing environment are key tenets of our company," said Ranade. "Our domain expertise and innovative approach to addressing their business challenges contributes to our mutual success."
"We continue to see healthy demand for our services and feel well-positioned in the markets we serve. Our pipelines reflect our enhanced competitive standing and our willingness to take a long-term view of our client relationships. This long-term focus fortifies our relationships and generates opportunities that will help sustain our growth for years to come."
Based on current visibility levels and an exchange rate assumption of 61 Indian Rupees to the dollar, the Company currently expects 2013 revenue of $810 to $815 million and EPS in the range of $4.90 to $5.00.
Syntel to Host Conference Call
Syntel will discuss its third quarter 2013 results today on a conference call at 10:00 a.m. (EDT). To listen to the call, please dial (877) 837-3915 in the US/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 October 24, 2013 by dialing (855) 859-2056 and entering "85630017". International callers may dial (404) 537-3406 and enter the same passcode.