Outsourcing Leader Luxoft Finishes Fiscal Year Strong with 53 Percent Revenue Growth

US & Global Expansion, High Employee Retention Rate, and Doubled European Client List Punctuate Momentum

Luxoft, Russia’s largest provider of high-end IT outsourcing services to clients such as Boeing, Deutsche Bank, IBM, UBS, T-Mobile and Dell, today announced strong performance for its 2006 Fiscal Year ending March 31, 2007.

Strong Fiscal Performance

On the financial front, Luxoft again posted aggressive growth with revenues up 53 percent over the previous year based exclusively on organic growth. Total earnings came in at $69M USD up from $45M USD for the previous fiscal year. Luxoft is estimating revenues to reach $108 M USD in FY 2007 from organic growth and continues looking for strategic acquisitions.

North American & Global Expansion

Over the past four quarters, Luxoft added eighteen new clients with multi-year contracts to its roster, several of them coming from the Fortune 500 list, including UBS and T-Mobile.

Luxoft also expanded its global reach and talent pool growing to 2,200 employees worldwide.

A European Surge

During the past fiscal year, Luxoft’s European client base doubled, accounting for 47 percent of the company’s total revenues with more than 25 percent of that growth coming from the financial services sector.

Luxoft expects Europe’s revenue share to continue to rise as European companies further capitalize on the benefits of nearshore delivery for complex IT Outsourcing engagements.

With continuing focus on efficiency and ease of communications for US clients, Luxoft strengthened its North American on-site capabilities by growing its US organization to 150 people. In addition, to meet the nearshore needs of US clients, Luxoft opened an office in Vancouver, British Columbia specializing in rapid software development enabled by the Agile methodology.

On a global resource front, Luxoft opened a delivery location in Odessa, Ukraine providing development expertise in embedded software and hardware systems, micro processing, and real-time computing. Luxoft also tripled its UK operations to accommodate rapid growth in its nearshore European business.

Key Growth Drivers & CRM Success Draws Market Attention

Luxoft’s industry knowledge, nearshore footprint, efficiency in complex outsourcing engagements, and strong employee retention rates were all major drivers of company growth. In addition, the growing recognition of Russia as a key destination for high-end IT outsourcing worked as a supporting factor.

In FY 2006 Luxoft blew away industry standard retention rates by achieving 94 percent employee retention. In comparison, India’s IT-services sector attrition rate has run as high as 30 percent and China’s outsourcing industry attrition is estimated at 23 percent (Sources: NASSCOM-Hewitt and Hewitt studies.)

As a demonstration of Luxoft’s deep vertical industry knowledge, more then a third of Luxoft’s global business this year came from the financial services sector. Financial clients, which include several of the top US and European banks among others, enjoy Luxoft’s high level of domain expertise.

At CeBIT in March ‘07, Luxoft announced that the award winning CRM system they developed for Deutsche Bank will continue to be expanded and enhanced by the joint Deutsche Bank/Luxoft team. Deutsche Bank plans to market this solution to other companies as well, a strong testament to the value that Luxoft brings its clients.

Futhermore, the company was able to capitalize on a growing demand for product engineering and embedded systems design and programming by leveraging its specialized knowledge and experienced talent pool in these areas.

Award Winning Work

Finally, Luxoft’s commitment to delivering excellence in complex outsourcing engagements led to a number of prestigious industry and influencer recognitions in FY 06.

In addition to taking the #1 IT Outsourcing Product Engineering vendor spot in the 2006 Black Book of Outsourcing, Luxoft won the Financial Outsourcing Project of the Year from the National Ou