Revenue during the quarter surged 44.23 percent to $217.21 million from $150.60 million in the previous year period. Gross margin for the quarter contracted 694 basis points over the previous year period to 28.71 percent. Total expenses were 97.03 percent of quarterly revenues, up from 90.62 percent for the same period last year. That has resulted in a contraction of 641 basis points in operating margin to 2.97 percent.

Operating income for the quarter was $6.46 million, compared with $14.13 million in the previous year period.

However, the adjusted operating income for the quarter stood at $16.32 million compared to $20.74 million in the prior year period. At the same time, adjusted operating margin contracted 626 basis points in the quarter to 7.51 percent from 13.77 percent in the last year period.

Kris Canekeratne, Virtusa's chairman and chief executive officer, stated, "We are pleased with our third quarter results. We see continuing client demand across our industry groups and geographies for our Digital Transformation and Innovation and Operational Excellence solutions. Our differentiated solution strategy and deep domain expertise are enabling us to win in the market, and position us well for sustained growth."

For fiscal year 2017, Virtusa Corporation forecasts revenue to be in the range of $856.80 million to $861.80 million. The company expects diluted earnings per share to be in the range of $0.36 to $0.40. The company expects diluted earnings per share to be in the range of $1.24 to $1.28 on adjusted basis.

For the fourth-quarter 2017, Virtusa Corporation forecasts revenue to be in the range of $224 million to $229 million. The company expects diluted earnings per share to be in the range of $0.31 to $0.35. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.43 to $0.47.

Cash flow from investing activities was $58.67 million for the nine month period as against cash outgo of $45.18 million in the last year period. It has incurred net capital expenditure of $8.41 million on net basis during the nine month period, down 18.35 percent or $1.89 million from year ago period.

The company has spent $89.83 million cash to carry out financing activities during the nine month period as against cash inflow of $3.53 million in the last year period.

Cash and cash equivalents stood at $133.88 million as on Dec. 31, 2016, up 11.81 percent or $14.14 million from $119.74 million on Dec. 31, 2015.

Working capital increases
Virtusa Corporation has recorded an increase in the working capital over the last year. It stood at $339.30 million as at Dec. 31, 2016, up 23.05 percent or $63.56 million from $275.73 million on Dec. 31, 2015. Current ratio was at 3.79 as on Dec. 31, 2016, down from 4.65 on Dec. 31, 2015.

Days sales outstanding went down to 66 days for the quarter compared with 72 days for the same period last year.

At the same time, days payable outstanding went up to 12 days for the quarter from 11 for the same period last year.