Reports Fourth Quarter and Full Year 2008 Financial Results
Syntel, Inc. (NASDAQ: SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) firm, today announced financial results for the fourth quarter and full year, ended December 31, 2008.
Fourth Quarter Financial Highlights
Syntel's total revenue for the fourth quarter increased 11 percent to $104.7 million (Rs.516 crore), compared to $94.0 million (Rs.463 crore) in the prior-year period. The Company's gross margin was 48.3 percent in the fourth quarter, compared to 39.4 percent in the prior-year period (890 bps increase).
Syntel's income from operations expanded to 28.9 percent in the fourth quarter, compared to 16.6 percent in the prior-year period (1230 bps increase) .
Net income for the fourth quarter was $26.7 million (Rs.132 crore) or $0.64 per diluted share, compared to $15.9 million (Rs.78 crore) or $0.39 per diluted share in the prior-year period.
During the fourth quarter, Syntel added 8 new clients and one new "Hunting Licenses" or preferred partnership agreements, bringing the total number to 93 strategic relationships.
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Full Year Financial Highlights
Syntel's total revenue for 2008 increased 22 percent to $410.4 million (Rs.2,022 crore), compared to $337.7 million (Rs.1,664 crore) in 2007. The Company's operating margins expanded to 24.0 percent for 2008, compared to 18.8 percent in 2007 (520 bps increase).
Net income for the year was $86.7 million (Rs.427 crore) or $2.10 per diluted share, compared to $62.9 million (Rs.310 crore) or $1.52 per diluted share in 2007.
Syntel has added 34 new clients during the year and ended 2008 with 12,363 employees globally.
Operational Highlights
“Given the difficult environment, Syntel is pleased with our overall financial performance for the year 2008. As anticipated, the effects of a difficult global economic environment continue to impact our business. A weak economy, increasing pricing pressure, delays in spending decisions and political uncertainty have reduced our visibility to top-line acceleration at this point in time. Our initial revenue guidance is reflective of the current business environment,” said Keshav R Murugesh, Syntel’s President and Chief Operating Officer.
“Improved flexibility on the staffing side of our business will allow us to better manage operating costs and earnings without impacting top line opportunities. That being said, we will continue to invest for the future as we believe that when the economy recovers and customer confidence returns, the adoption of globalized services will re-accelerate.”
Syntel has invested close to $37M (Rs. 182 crore) in 2008 and has plan to invest approx. $35Mn (Rs.172 crore) in 2009 as it makes progress on construction of its SEZ campus in Pune and Chennai. Phase 1 with 2,300 seats in Pune is ready and operational and Phase 1 of our new Chennai campus having built up space of 6,50,000 sq.ft. will be ready by Q3 of 2009.
2009 Guidance
Based on current visibility levels and an exchange rate assumption of 48.7 rupees to the dollar, the Company is providing initial 2009 guidance of $385 (Rs.1875 crore) to $425 (Rs.2070 crore) million and EPS in the range of $1.66 to $2.08.
About Syntel
Syntel (NASDAQ: SYNT) is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. The Company is driven by its mission to create new opportunities for clients by harnessing the passion, talent and innovation of Syntel employees worldwide. Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. Recently named one of the "50 Best Managed Global Outsourcing Vendors" by The Black Book of Outsourcing, Syntel has over 12,300 employees worldwide, is assessed at SEI CMMi Level 5, and is ISO 27001 and ISO 9001:2000 certified. To learn more, visit us at: www.syntelinc.com.