OREANDA-NEWS. Syntel, Inc., a global provider of digital transformation, information technology and knowledge process services to Global 2000 companies, today announced financial results for the second quarter, ended June 30, 2016.

Second Quarter Financial Highlights

Syntel's revenue for the second quarter increased three percent to $246 million from $239.8 million in the prior-year period, and two percent from $241.4 million in the first quarter of 2016.  During the second quarter, Banking and Financial Services accounted for 48.9 percent of total revenue, with Retail, Logistics and Telecom at 16.9 percent, Healthcare and Life Sciences at 16.3 percent, Insurance at 13.1 percent, and Manufacturing at 4.8 percent.

The Company's gross margin was 37 percent in the second quarter, compared to 38 percent in the prior-year period and 37.2 percent in the first quarter of 2016.  Selling, General and Administrative (SG&A) expenses were 7.4 percent of revenue in the second quarter, compared to 9.1 percent in the prior-year period and 12.3 percent in the previous quarter.

The second quarter income from operations was 29.6 percent of revenue as compared to 28.9 percent in the prior-year period and 24.9 percent in the first quarter. The sequential rise in operating margin during the second quarter primarily reflects the favorable impact of currency-related balance sheet translations, which was partially offset by immigration expenses and offshore wage increases.

Net income for the second quarter was $58.8 million or $0.70 per diluted share, compared to $60.6 million or $0.72 per diluted share in the prior-year period and net income of $53.1 million or $0.63 in the first quarter of 2016.

During Q2, Syntel spent $5.7 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $1.1 billion. The Company ended the quarter with 23,773 employees globally.

Operational Highlights

"I was pleased to see sequential improvement in the insurance segment as we focused on converting our pipelines,” said Syntel CEO and President Nitin Rakesh.  "Parts of this segment are still recovering; however, we continue to anticipate improving growth for insurance later this year. While we made steady progress this quarter, we are seeing added uncertainty which is contributing to volatility in customer spending. We are adjusting our outlook to reflect this."

"Our customers across every industry are investing in transformation to gain competitive advantage, but they continue to struggle with high costs and latencies inherent in aging systems and applications that are prevalent across Global 2000 organizations," said Rakesh.

"Syntel’s digital modernization solution powered by our SyntBots recursive automation platform offers a robust combination of technology and services to help our customers execute and fund their strategic initiatives, thereby mitigating impediments to growth and business agility."