Luxoft’s Strong Start As A Public Company Reflects Growing Interest In Tech Services In Eastern Europe
Posted by Charles Green on November 19, 2013
Central and Eastern Europe (CEE) continues to garner interest from services buyers. Earlier this year, I wrote a report called “A New Dawn For Tech Services In Central And Eastern Europe” that highlighted how the region will become increasingly attractive to companies, as the skills and capabilities to be found there will be ever more important for the next generation of technology engagements. Such engagements will focus on developing software that will empower customers, partners, and employees with context-rich apps, helping them take action in their moment of need — what Forrester calls "systems of engagement."
- Revenues of $181.4 million for six months to September 30, 2013 (up 25% year-over-year).
- Second-quarter revenues of $97.7 million compared with $74.1 million for the same period a year earlier.
- Increased guidance for fiscal year 2014 to $384 million.
- A focused industry approach has enabled Luxoft to develop its domain expertise. Financial services dominate its revenues (at 57% of the total), with travel, hi-tech, automotive and transport, and telecom predominantly comprising the rest. As a result, Luxoft has been able to develop its domain expertise and in turn invest in IP and solutions highly targeted at these specific industries — for example, it recently announced at Telematics Munich the development of its AllView solution for automotive OEMs.
- Domain expertise, investments in IP, and a strong talent pool result in differentiation. Luxoft has been able to make such industry investments because it has scaled back to focus on a few industries where more and more of the business value is coming from software-based products and services. This focused industry approach, its investments in IP and solutions, and its recruiting of the cream of the crop of IT skills in CEE have resulted in a potent mix that allow it to differentiate from its peers. It provides a strong basis for long-term future growth in the changing technology services ecosystem. As additional evidence of this, Luxoft's results also indicate that it has started to decouple headcount from revenue and its revenue per employee remains high (currently $68,000 per delivery employee on an annualized basis).