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IGate Q1 revenue dips 19% as clients suffer

IGate Q1 revenue dips 19% as clients suffer
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First Published: Wed, Apr 22 2009. 12 52 PM IST
Updated: Wed, Apr 22 2009. 12 52 PM IST
New Delhi: Software firm iGate on Wednesday reported a 19.42% decline in its revenue at $44.8 million in the first quarter of 2009.
The Nasdaq-listed firm had a revenue of $55.6 million in the March quarter of FY’08, it said in a statement.
“Our revenue and net income were down...(as) a large part of our business comes from the financial services -- the sector worst hit by recession... (also) most of our revenues come from the US -- which is also hit by recession,” iGate Corporation CEO Phaneesh Murthy said.
Net income from continuing operations was at $5 million, compared to $6.4 million in the same period last fiscal, the integrated technology and operations firm said.
During the quarter, the company added five new customers. As of March 2009, the company had 6,492 employees, the statement added.
“While we are engaged actively in several conversations with both clients and prospects, slow decision making has impacted closures,” Murthy said.
During the March quarter, the company’s operating margin rose to 12.5% of the revenue, from 9.9% in the same period last year.
“We faced a challenging first quarter which negatively impacted revenue. Despite the revenue decline, we increased our operating margin through a persistent focus on cost discipline. The weak global economy and global currency fluctuations continue to be a cause of concern going forward,“ iGate Corp CFO Sujit Sircar said.
Shares of iGate closed with a gain of 13.67% at $3.41 on the Nasdaq.
iGate freezes hiring till Q3 CY’09
The software firm also said today, it has put a freeze on hiring till the third quarter of the current calendar year, when it expects a bounce-back in the global economy.
“We have frozen hiring. We will not hire till the economic condition improves which we expect to happen in the third quarter of the current calendar year,” iGate CEO Phaneesh Murthy said.
Besides, Murthy is optimistic that the offshoring companies would see some kind of recovery from the third quarter of 2009.
“(The) third quarter of the calendar year, I believe, will start seeing some kind of recovery for offshore companies,” he said.
As of March 2009, iGate has 6,492 employees, a net reduction of 74 employees as compared to the same period last year.
“The company has not laid-off any employee and will not lay-off either. We have a total employee strength of a little over 6,000 and out of that 1,200 are on the bench,” Murthy said, adding, the reduction in headcount during the quarter was mainly because of attrition.
“We are cutting down on wasteful expenditure... We are focusing on non-traditional areas like travel, power and paper consumption, for streamlining our costs to beat the recession,” Murthy said.
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First Published: Wed, Apr 22 2009. 12 52 PM IST
More Topics: Company Results | Igate | Layoffs | Banks | Recession |