HiSoft – HSFT – Solid Growth and Earnings; Raises Full-Year Guidance

HiSoft Technology International Limited (NASDAQ: HSFT), a leading China-based provider of outsourced information technology and research and development services headquartered in Dalian, China, announced its unaudited financial results for the second quarter of 2012 ended June 30, 2012.

HSFT – Highlights

HSFT – Second Quarter 2012 as compared to Second Quarter 2011

• Net revenues were US$71.8 million, up 41.1%
• Gross profit was US$25.6 million, up 42.7%
• Diluted net income per ADS1 was US$0.20, compared to US$0.12
• Non-GAAP2 diluted net income per ADS was US$0.30, compared to US$0.18
• Total employees as of June 30, 2012 was 7,814, compared to 6,410

“We are pleased to report a solid increase in revenue while maintaining a healthy improvement in our margins in the second quarter 2012,” said HiSoft Chief Executive Officer Tiak Koon Loh. “This sound performance testifies to our strong market position and disciplined execution in our growth strategies.” “In the second quarter, our CPS revenue grew by 157% and our Greater China business continued to lead as a growth driver recording a 109% year-over-year increase in revenue. We are also pleased to see positive results reflected in our BFSI revenue which grew 67% year-over-year, contributing 31% of our total revenue. Our domestic BFSI practice remains especially robust,” he said.

Loh concluded, “While our underlying operating performance is solid, we cannot ignore weaker economic conditions in much of the world which may moderate our growth. Despite macro-economic uncertainties, we believe our sturdy foundation of domain expertise, global presence, wide range of service lines and talented human resource pool will enable us to drive the delivery of quality services and deliver sustainable growth.”

HSFT – Second Quarter 2012 Financial Results

Net Revenues

Net revenues were US$71.8 million for the second quarter of 2012, an increase of 41.1% from US$50.9 million for the corresponding period in 2011. The strong year-over-year growth in net revenues was driven by strong demand across all service lines and key geographic markets.

Gross Profit and Gross Margin

Gross profit was US$25.6 million for the second quarter of 2012, an increase of 42.7% from US$18.0 million for the corresponding period in 2011. During the second quarter of 2012, gross margin was 35.7% compared to 35.3% for the corresponding period in 2011. The improvement in gross margin was primarily due to increased sales in higher value-added services.

About HiSoft Technology International Limited – HSFT

HiSoft Technology International Limited (HSFT) is a leading China-based provider of outsourced information technology and research and development services headquartered in Dalian, China. HiSoft provides its services to leading companies around the world through a combination of onshore and offshore delivery capabilities. HiSoft leverages its skilled technology specialists and client-centric delivery centers to offer customers reliable and high-quality technology solutions.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.