IT Staffing Report: July 25, 2013

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IGate revenue up 6%, cites positive signs

IGate Corp. (NASD: IGTE) second-quarter revenue rose 5.7 percent year over year to $283.3 million. The Fremont, Calif.-based firm booked more than $600 million in orders, including three multi-year contracts valued at $100 million or more apiece.

The three contracts included a multi-year integrated technology and operations deal worth $200 million from a financial services firm in Europe; a $100 million, multi-year contract with a European telecom provider; and another $100 million, multi-year deal with a global insurance firm.

“We are seeing more positive signs related to offshore IT services spending and stability in the overall business environment, with clients spending to their budgets,” said CEO Gerhard Watzinger.

Watzinger took over the CEO from Phaneesh Murthy in May. Murthy was released from the company after an internal investigation over an employee claim of sexual harassment.

Second-quarter gross margin at iGate improved to 37.9 percent from 37.4 percent in the year-ago quarter.

“I am happy with the margin growth seen in the quarter as we absorbed our annual wage hikes which were offset largely by operational efficiencies and to an extent the depreciation of the Indian Rupee,” said CFO Sujit Sircar.

Net income rose 137.0 percent on a year-over-year basis in the second quarter to almost $30.0 million. Net income includes $3 million attributable to the forfeiture of vested stock options.

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