Exhibit 99.1

Virtusa Announces Second Quarter Fiscal 2019 Consolidated Financial Results

· Second quarter fiscal 2019 revenue of $305.5 million increased 1.8% sequentially and 23.1% year-over-year.

· Second quarter fiscal 2019 GAAP diluted EPS of $0.01. Non-GAAP diluted EPS of $0.54, up 54.3% year-over-year.

· Second quarter fiscal 2019 GAAP operating income of $14.0 million. Non-GAAP operating income of $29.0 million, up 46.5% year-over-year.

· Second quarter fiscal 2019 operating cash flow of $40.0 million, representing 13.1% of revenue.

Southborough, MA — (November 8, 2018) Virtusa Corporation (NASDAQ GS: VRTU), a global provider of digital engineering and IT outsourcing services that accelerate business outcomes for its clients, today reported consolidated financial results for the second quarter fiscal 2019, ended September 30, 2018.

Second Quarter Fiscal 2019 Consolidated Financial Results

Revenue for the second quarter of fiscal 2019 was $305.5 million, an increase of 1.8% sequentially and 23.1% year-over-year. On a constant currency basis, (1) second quarter revenue increased 2.5% sequentially and 23.4% year-over-year.

Virtusa reported GAAP income from operations of $14.0 million for the second quarter of fiscal 2019, compared to $13.9 million for the first quarter of fiscal 2019 and $10.3 million for the second quarter of fiscal 2018.

GAAP net income available to common shareholders for the second quarter of fiscal 2019 was $0.4 million, or $0.01 per diluted share, compared to GAAP net loss of $7.4 million, or ($0.25) per diluted share, for the first quarter of fiscal 2019, and GAAP net income of $3.7 million, or $0.12 per diluted share, for the second quarter of fiscal 2018. Second quarter fiscal 2019 GAAP net loss includes $4.2 million of net unrealized foreign exchange losses on an after-tax basis, which were not included in the Company’s prior guidance.

Non-GAAP Results*:

Non-GAAP income from operations was $29.0 million for the second quarter of fiscal 2019, compared with $27.5 million for the first quarter of fiscal 2019 and $19.8 million for the second quarter of fiscal 2018.

Non-GAAP net income was $18.2 million, or $0.54 per diluted share, for the second quarter of fiscal 2019, compared to $16.8 million, or $0.50 per diluted share, for the first quarter of fiscal 2019, and $11.4 million, or $0.35 per diluted share, for the second quarter of fiscal 2018.

*Please refer to the Non-GAAP Financial Information section of this press release for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures.

Balance Sheet and Cash Flow

The Company ended the second quarter of fiscal 2019 with $232.5 million of cash, cash equivalents and investments (2). Cash provided by operating activities was $40.0 million for the second quarter of fiscal 2019.

Management Commentary

Kris Canekeratne, Virtusa’s Chairman and CEO, stated, “We delivered another solid quarter driven by our differentiated value proposition and excellence in execution and service delivery. Virtusa continues to strengthen its position as a preferred partner enabling end-to-end digital transformation to many of the world’s leading companies. Our above-industry growth and continued momentum give us confidence in our strategy and long-term opportunities.”

Ranjan Kalia, Chief Financial Officer, said, “Our fiscal second quarter results are highlighted by double-digit year-over-year organic revenue growth, significant margin accretion, and non-GAAP EPS growth of 54%. As contemplated in our prior guidance, growth resumed at our largest client in the fiscal second quarter. Also, the recently completed eTouch acquisition continues to perform well. We are maintaining the midpoint of our fiscal 2019 guidance, which continues to reflect above-industry revenue growth on an organic basis even after absorbing an incremental $4 million of forecasted currency headwinds in the second half.”

Financial Outlook

Virtusa management provided the following current financial guidance:

· Third quarter fiscal 2019 revenue is expected to be in the range of $308 to $316 million. GAAP diluted EPS is expected to be in the range of $0.12 to $0.16. Non-GAAP diluted EPS is expected to be in the range of $0.56 to $0.62.

· Fiscal year 2019 revenue is expected to be in the range of $1,241 to $1,259 million. GAAP diluted EPS is expected to be in the range of $0.09 to $0.17. Non-GAAP diluted EPS is expected to be in the range of $2.19 to $2.31.

In accordance with US GAAP, Virtusa applies the if-converted method to its convertible preferred shares when reporting its fiscal year 2019 results. The if-converted method is used to calculate the share impact of convertible securities. Under this method, only when the convertible securities are considered dilutive are they then included in the computation of weighted average shares outstanding in reported results and full year guidance.

· Second quarter GAAP Income per share was calculated by including the impact of dividends and accretion on the convertible preferred shares in net income available to common stockholders and excluding the impact of the convertible preferred shares from the weighted average shares. Second quarter non-GAAP EPS was calculated by excluding the impact of dividends and accretion on the convertible preferred shares from net income available to common stockholders and including the impact of the convertible preferred shares in

the weighted average shares outstanding as these shares were dilutive on a non-GAAP basis.

· GAAP EPS guidance was calculated under the assumption that these convertible preferred shares will be anti-dilutive in fiscal 2019. Thus, in determining full fiscal year 2019 GAAP EPS guidance, dividends and accretion on the convertible preferred shares are deducted from net income available to common stockholders and the convertible preferred shares have been excluded from weighted average shares outstanding.

· Non-GAAP EPS guidance was calculated under the assumption that these convertible preferred shares will be dilutive in fiscal year 2019. Thus, in determining full fiscal year 2019 non-GAAP EPS guidance, dividends and accretion on the convertible preferred shares are excluded from net income available to common stockholders and the impact of the convertible preferred shares are included in the weighted average shares outstanding.

The Company’s third quarter and fiscal year 2019 diluted GAAP EPS estimates are both based on average share counts of approximately 30.7 million (assuming no further exercises of stock-based awards). The Company’s third quarter and fiscal year 2019 diluted Non-GAAP EPS estimates are both based on average share counts of approximately 33.7 million (assuming no further exercises of stock-based awards). GAAP and Non-GAAP average share counts assume a stock price of $48.67, which was derived from the average closing price of the Company’s stock over the five trading days ended on November 5, 2018. Deviations from this stock price may cause actual diluted EPS to vary based on share dilution from Virtusa’s stock options.

Conference Call and Webcast

Virtusa will host a conference call today, November 8, 2018 at 5:00 p.m. Eastern Time to discuss the Company’s second quarter fiscal 2019 financial results, current financial guidance, and other corporate developments. To access this call, please dial 866-548-4713 (domestic) or 323-794-2597 (international). The passcode is 6886046. A replay of this conference call will be available through November 15, 2018 at 844-512-2921 (domestic) or 412-317-6671 (international). The replay passcode is 6886046. A live webcast of this conference call will be available on the “Investors” page of the Company’s website (www.virtusa.com), and a replay will be archived on the website as well.

About Virtusa

Virtusa Corporation (NASDAQ GS: VRTU) is a global provider of Digital Business Transformation, Digital Engineering, and Information Technology (IT) outsourcing services that accelerate our clients’ journey to their Digital Future. Virtusa serves Global 2000 companies in Banking, Financial Services, Insurance, Healthcare, Telecommunications, Media, Entertainment, Travel, Manufacturing, and Technology industries.

Using a combination of digital strategy, digital engineering, business implementation, and IT platform modernization services, Virtusa helps clients execute successful end-to-end digital business transformation initiatives.

Virtusa engages its clients to re-imagine their business models and develop strategies to defend and grow their business by introducing innovative products and services, developing distinctive digital consumer experiences, creating operational efficiency using digital labor, developing operational and IT platforms for the future, and rationalizing and modernizing their existing IT applications infrastructure. As a result, its clients are simultaneously able to drive business growth through digital-first customer experiences, while also consolidating and modernizing their IT application infrastructure to support digital business transformation.

Holding a proven record of success across industries, Virtusa readily understands its clients’ business challenges and uses its domain expertise to deliver innovative applications of technology to address its clients’ critical business challenges. Examples include building the world’s largest property & casualty claims modernization program; one of the largest corporate customer portals for a premier global bank; an order to cash implementation for a multinational telecommunications provider; and digital transformation initiatives for media and banking companies.

Founded in 1996 and headquartered in Massachusetts, Virtusa has operations in North America, Europe, and Asia.

Virtusa, Accelerating Business Outcomes, BPM Test Drive and Productization are registered trademarks of Virtusa Corporation. All other company and brand names may be trademarks or service marks of their respective holders.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial measures as defined by Regulation G by the Securities and Exchange Commission. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures should be read in conjunction with Virtusa’s financial statements prepared in accordance with GAAP.

Virtusa believes the following financial measures will provide additional insights to measure the operational performance of the business.

· Virtusa presents constant currency revenue growth rates to provide insights into, and a framework for assessing, how Virtusa’s revenue performed excluding the effect of foreign currency rate fluctuations (see footnote 1).

· Virtusa presents a reconciliation of its cash and cash equivalents to total cash, cash equivalents, short term and long term investments which Virtusa

believes provides insight into its cash position and overall liquidity (see footnote 2).

· Virtusa also presents the following consolidated statements of income (loss) measures that exclude, when applicable, stock-based compensation expense, acquisition related charges, restructuring charges, foreign currency transaction gains and losses, non-recurring third party financing costs, the tax impact of dividends received from foreign subsidiaries, the initial impact of our election to treat certain subsidiaries as disregarded entities for US tax purposes, and the impact from the U.S. government enacted comprehensive tax legislation (“Tax Act”) to provide further insights into the comparison of Virtusa’s operating results among the periods:

· Non-GAAP income from operations: income from operations, as reported on Virtusa’s consolidated statements of income (loss), excluding stock-based compensation expense, acquisition related charges and restructuring charges.

· Non-GAAP operating margin: non-GAAP income from operations as a percentage of reported revenues.

· Non-GAAP net income available to Virtusa common stockholders: net income (loss) available to Virtusa common stockholders, as reported on our consolidated statements of income (loss), excluding stock-based compensation, acquisition related charges, restructuring charges, foreign currency transaction gains and losses, non-recurring third party financing costs, the tax impact of the above items, the initial impact of our election to treat certain subsidiaries as disregarded entities for US tax purposes, the tax impact of dividends received from foreign subsidiaries, and the impact from the Tax Act.

· Non-GAAP diluted earnings per share: diluted earnings (loss) per share, as reported on Virtusa’s consolidated statements of income (loss) available to Virtusa common stockholders, excluding stock-based compensation, acquisition related charges, restructuring charges, foreign currency transaction gains and losses, non-recurring third party financing costs, the tax impact of the above items, the initial impact of our election to treat certain subsidiaries as disregarded entities for US tax purposes, the tax impact of dividends received from foreign subsidiaries, and the impact from the Tax Act. Non-GAAP diluted earnings per share is also subject to dilutive and anti-dilutive requirements of the if-converted method related to our Series A Convertible Preferred Stock that could result in a difference between GAAP to non-GAAP diluted weighted average shares outstanding.

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the three and six months ended September 30, 2018:

	(in thousands, except per share amounts)
	Three Months Ended September 30,						Six Months Ended September 30,
	2018			2017			2018			2017
GAAP income from operations	$	14,019		$	10,279		$	27,943		$	16,349
Add: Stock-based compensation expense	9,124			6,142			17,062			10,930
Add: Acquisition-related charges and restructuring charges(a)	5,829			3,351			11,495			5,860
Non-GAAP income from operations	$	28,972		$	19,772		$	56,500		$	33,139

GAAP operating margin	4.6		%	4.1		%	4.6		%	3.4		%
Effect of above adjustments to income from operations	4.9		%	3.9		%	4.7		%	3.6		%
Non-GAAP operating margin	9.5		%	8.0		%	9.3		%	7.0		%

GAAP net income (loss) available to Virtusa common stockholders	$	417		$	3,681		$	(6,966	)	$	6,638
Add: Stock-based compensation expense	9,124			6,142			17,062			10,930
Add: Acquisition-related charges and restructuring charges(a)	6,300			3,351			12,427			5,860
Add: Foreign currency transaction losses, net(b)	9,355			1,480			20,113			1,557
Tax adjustments (c)	(8,126		)	(4,066		)	(9,943		)	(6,588		)
Noncontrolling interest, net of taxes (d)	50			(313		)	177			(679		)
Non-GAAP net income available to Virtusa common stockholders	$	17,120		$	10,275		$	32,870		$	17,718

GAAP diluted earnings (loss) per share (f)	$	0.01		$	0.12		$	(0.23	)	$	0.22
Effect of stock-based compensation expense (g)	0.27			0.19			0.51			0.35
Effect of acquisition-related charges and restructuring charges(a) (g)	0.19			0.10			0.37			0.18
Effect of foreign currency transaction losses(b) (g)	0.28			0.05			0.60			0.05
Effect of tax adjustments (c) (g)	(0.24		)	(0.13		)	(0.30		)	(0.21		)
Effect of noncontrolling interest (d) (g)	—			(0.01		)	—			(0.02		)
Effect on dividend on Series A Convertible Preferred Stock (f) (g)	0.03			0.03			0.06			0.03
Effect of change in dilutive shares for non-GAAP (f)	—			—			0.03			—
Non-GAAP diluted earnings per share (e) (g)	$	0.54		$	0.35		$	1.04		$	0.60

(a) Acquisition-related charges include, when applicable, amortization of purchased intangibles, external deal costs, transaction-related professional fees, acquisition-related retention bonuses, changes in the fair value of contingent consideration liabilities, accreted interest related to deferred acquisition payments, charges for impairment of acquired intangible assets and other acquisition-related costs including integration expenses consisting of outside professional and consulting services and direct and incremental travel costs. Restructuring charges, when applicable, include termination benefits, as well as certain professional fees related to the restructuring. The following table provides the details of the acquisition-related charges and restructuring charges:

	Three Months Ended September 30,				Six Months Ended September 30,
	2018		2017		2018		2017
Amortization of intangible assets	$	2,994	$	2,594	$	5,770	$	5,103
Acquisition & integration costs	$	2,835	$	—	$	5,725	$	—
Restructuring charges	$	—	$	757	$	—	$	757
Acquisition-related charges included in costs of revenue and operating expense	$	5,829	$	3,351	$	11,495	$	5,860
Accreted interest related to deferred acquisition payments	$	471	$	—	$	932	$	—
Total acquisition-related charges and restructuring charges	$	6,300	$	3,351	$	12,427	$	5,860

(b) Foreign currency transaction gains and losses are inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes.

(c) Tax adjustments reflect the tax effect of the non-GAAP adjustments using the tax rates at which these adjustments are expected to be realized for the respective periods, excluding the initial impact of our election to treat certain subsidiaries as disregarded entities for U.S. tax purposes. Tax adjustments also assumes application of foreign tax credit benefits in the United States.

(d) Noncontrolling interest represents the minority shareholders interest of Polaris.

(e) Non-GAAP diluted earnings per share is subject to rounding.

(f) During the three and six months ended September 30, 2018, the weighted average shares outstanding of Series A Convertible Preferred Stock of 3,000,000 were excluded from the calculations of GAAP diluted earnings per share as their effect would have been anti-dilutive using the if-converted method.

During the three and six months ended September 30, 2017, the weighted average shares outstanding of Series A Convertible Preferred Stock of 3,000,000 and 2,456,044, respectively, were excluded from the calculations of GAAP diluted earnings per share as their effect would have been anti-dilutive using the if-converted method.

The following table provides the non-GAAP net income available to Virtusa common stockholders and non-GAAP dilutive weighted average shares outstanding using if-converted method to calculate the non-GAAP diluted earnings per share for the three and six months ended September 30, 2018 and 2017:

	Three Months Ended September 30,				Six Months Ended September 30,
	2018		2017		2018		2017
Non-GAAP net income available to Virtusa common stockholders	$	17,120	$	10,275	$	32,870	$	17,718
Add: Dividends and accretion on Series A Convertible Preferred Stock	$	1,088	$	1,087	$	2,175	$	1,087
Non-GAAP net income available to Virtusa common stockholders and assumed conversion	$	18,208	$	11,362	$	35,045	$	18,805

GAAP dilutive weighted average shares outstanding	30,627,044		29,820,581		29,700,151		30,035,865
Add:Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units	—		—		866,156		—
Add:Series A Convertible Preferred Stock as converted	3,000,000		3,000,000		3,000,000		1,500,000
Non-GAAP dilutive weighted average shares outstanding	33,627,044		32,820,581		33,566,307		31,535,865

(g) To the extent the Series A Convertible Preferred Stock is dilutive using the if-converted method, the Series A Convertible Preferred Stock is included in the weighted average shares outstanding to determine non-GAAP diluted earnings per share.

Footnotes

(1) To determine sequential revenue change in constant currency for the Company’s second quarter of fiscal 2019, revenue from entities reporting in U.K. Pounds (GBP), Euros, and Swedish Krona (SEK) were converted into U.S. dollars at the average exchange rates in effect for the three months ended June 30, 2018, rather than the actual exchange rate in effect for the three months ended September 30, 2018. To determine year-over-year revenue change in constant currency for the Company’s second quarter of fiscal 2019, revenue from entities reporting in U.K. Pounds (GBP), Euros, and Swedish Krona (SEK) were converted into U.S. dollars at the average exchange rates in effect for the three months ended September 30, 2017, rather than the actual exchange rate in effect for the three months ended September 30, 2018. The average exchange rates for the three months ended September 30, 2017, June 30, 2018, and September 30, 2018 are presented in the following table:

	Average U.S. Dollar Exchange Rate
	For the Three Months Ended
	September 30, 2017	June 30, 2018	September 30, 2018
GBP	1.31	1.35	1.30
Euro	1.18	1.19	1.16
SEK	0.12	0.11	0.11

(2) The Company considers the total measure of cash, cash equivalents, short-term and long-term investments to be an important indicator of the Company’s overall liquidity. All of the Company’s investments are classified as either equity or available-for-sale securities, including the Company’s long-term investments which consist of fixed income securities, including government agency bonds and municipal and corporate bonds, which meet the credit rating and diversification requirements of the Company’s investment policy as approved by the Company’s audit committee and board of directors.

(3) Earnings per share amounts for each quarter may not necessarily total to the yearly earnings per share due to the weighting of shares outstanding on a quarterly and year to date basis.

(4) On March 3, 2016 Virtusa acquired a majority interest in Polaris. In accordance with US GAAP, Polaris financial results for the quarter ending September 30, 2018 and assets and liabilities as of that date have been consolidated in full into Virtusa’s financial statements. Net assets attributable to ownership in Polaris by minority shareholders (Non-controlling Interest) in our Consolidated Balance Sheets was $24.6 million at September 30, 2018. Profit attributable to minority shareholders (Non-controlling Interest) in the Consolidated Statements of Income was $0.5 million on a GAAP basis and $0.4 million on a non-GAAP basis for the quarter ending September 30, 2018.

Forward-Looking Statements

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding, management’s forecast of financial performance, the growth of our business and management’s plans, objectives, and strategies. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “see,” “seeks,” “estimates,” “will,” “should,” “may,” “confident,” “positions,” “look forward to,” and variations of such words or words of similar meaning and the use of future dates. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, and our growth rate, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that these plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: currency exchange rate fluctuations of the Indian and Sri Lankan rupee, the U.S. dollar, the U.K pound sterling, the Swedish krona, and the euro; the international nature of our business; restrictions on immigration or changes in immigration laws; inability of Virtusa to service the debt incurred by Virtusa to acquire Polaris and the delisting process or to maintain compliance with certain financial covenants under the loan facility; Virtusa’s ability to integrate the operations of, and achieve expected synergies and operating efficiencies in connection with, acquired businesses, including eTouch; unanticipated acquisition related costs and negative effects on Virtusa’s reported results of operations from previous acquisitions; the inability to pay cash dividends on the convertible preferred stock in connection with the Orogen convertible preferred stock financing, thus increasing the dilutive impact of the financing; the inability of Virtusa to redeem the convertible preferred stock at maturity, if there has been no conversion event prior to maturity; Virtusa’s dependence on a limited number of clients as well as clients located principally in the United States and United Kingdom and in concentrated industries; Virtusa’s ability to hire and retain enough sufficiently trained IT professionals to support its operations; Virtusa’s ability to expand its business or effectively manage growth; Virtusa’s ability to sustain profitability or maintain profitable engagements; increasing competition in the IT services outsourcing industry; Virtusa’s ability to attract and retain clients and meet their expectations; quarterly fluctuations in Virtusa’s earnings; client terminations or contracting delays, or delays in revenue recognition in any reporting period; Virtusa’s ability to successfully manage its billing and utilization rates and its targeted on-site to offshore delivery mix; technological innovation; Virtusa’s ability to effectively manage its facility, infrastructure and capacity needs; regulatory, legislative and judicial developments in Virtusa’s operations areas and Virtusa’s ability to comply with changing or complex laws and maintain effective internal controls to

ensure ongoing compliance; the loss of any key member of Virtusa’s senior management team, political or economic instability in India or Sri Lanka; any reduction or withdrawal of tax benefits provided to Virtusa by the governments of India and Sri Lanka, or new legislation by such governments which could be harmful to Virtusa; wage inflation and increases in government mandated benefits in India and Sri Lanka; telecommunications or technology disruptions; worldwide economic and business conditions; and the volatility of the market price of Virtusa’s common stock. For additional disclosure regarding these and other risks faced by Virtusa, see the disclosure contained in Virtusa’s public filings with the Securities and Exchange Commission, including Virtusa’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission.

Virtusa Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, unaudited)

	September 30, 2018		March 31, 2018
Assets:
Cash and cash equivalents	$	176,981	$	194,897
Short-term investments	54,108		45,900
Accounts receivable, net	162,497		151,455
Unbilled accounts receivable	96,605		103,829
Prepaid expenses	33,865		31,724
Restricted cash	1,298		301
Other current assets	19,221		21,229
Total current assets	544,575		549,335

Property and equipment, net	120,264		121,565
Investments accounted for using equity method	1,398		1,588
Long-term investments	1,410		4,140
Deferred income taxes	38,310		31,528
Goodwill	275,002		297,251
Intangible assets, net	94,212		96,001
Other long-term assets	15,728		11,772
Total assets	$	1,090,899	$	1,113,180

Liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity
Accounts payable	$	27,717	$	29,541
Accrued employee compensation and benefits	62,925		71,500
Deferred revenue	6,175		7,908
Accrued expenses and other	109,677		91,306
Current portion of long-term debt	11,407		11,407
Income taxes payable	5,034		5,038
Total current liabilities	222,935		216,700
Deferred income taxes	17,462		21,341
Long-term debt, less current portion	314,524		288,227
Long-term liabilities	44,854		43,833
Total liabilities	599,775		570,101

Series A convertible preferred stock	107,079		106,996
Redeemable noncontrolling interest	24,614		—

Stockholders’ equity	359,156		418,623
Noncontrolling interest	275		17,460
Stockholders’ equity	359,431		436,083
Total liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity	$	1,090,899	$	1,113,180

Virtusa Corporation and Subsidiaries

Consolidated Statements of Income (Loss)

(In thousands except share and per share amounts, unaudited)

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2018			2017			2018			2017

Revenue	$	305,520		$	248,174		$	605,551		$	475,519
Costs of revenue	216,346			178,404			432,827			344,683
Gross profit	89,174			69,770			172,724			130,836
Total operating expenses	75,155			59,491			144,781			114,487

Income from operations	14,019			10,279			27,943			16,349

Other income (expense):
Interest income	589			928			1,353			1,932
Interest expense	(4,514		)	(1,413		)	(8,768		)	(3,071		)
Foreign currency transaction losses, net	(9,355		)	(1,480		)	(20,113		)	(1,557		)
Other, net	819			778			1,443			884
Total other expense	(12,461		)	(1,187		)	(26,085		)	(1,812		)

Income before income tax (benefit) expense	1,558			9,092			1,858			14,537
Income tax (benefit) expense	(402		)	1,500			5,463			2,298
Net income (loss)	1,960			7,592			(3,605		)	12,239
Less: net income attributable to noncontrolling interests, net of tax	455			2,824			1,186			3,813
Net income (loss) available to Virtusa stockholders	1,505			$	4,768		$	(4,791	)	$	8,426
Less: Series A convertible preferred stock dividends and accretion	1,088			1,087			2,175			1,788
Net income (loss) available to Virtusa common stockholders	417			$	3,681		(6,966		)	$	6,638


Basic earnings (loss) per share available to Virtusa common stockholders	$	0.01		$	0.13		$	(0.23	)	$	0.23
Diluted earnings (loss) per share available to Virtusa common stockholders	$	0.01		$	0.12		$	(0.23	)	$	0.22
Weighted average number of common shares outstanding:
Basic	29,767,276			29,216,600			29,700,151			29,434,101
Diluted	30,627,044			29,820,581			29,700,151			30,035,865

Virtusa Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands, unaudited)

	Six Months Ended
	September 30,
	2018			2017
Cash flows from operating activities:
Net income (loss)	$	(3,605	)	$	12,239
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	14,593			13,646
Share-based compensation expense	17,062			10,930
Provision (recovery) for doubtful accounts	(236		)	723
Gain on disposal of property and equipment	(159		)	(49		)
Foreign currency transaction losses, net	20,113			1,557
Amortization of discounts and premiums on investments	76			185
Amortization of debt issuance cost	546			565
Deferred income taxes, net	(6,522		)	—
Net changes in operating assets and liabilities:
Accounts receivable and unbilled receivable	(1,975		)	(4,492		)
Prepaid expenses and other current assets	(11,238		)	(4,450		)
Other long-term assets	(4,009		)	(815		)
Accounts payable	232			740
Accrued employee compensation and benefits	(5,834		)	(579		)
Accrued expenses and other current liabilities	11,179			4,712
Income taxes payable	3,133			(3,586		)
Other long-term liabilities	(73		)	(1,494		)
Net cash provided by operating activities	33,283			29,832
Cash flows from investing activities:
Proceeds from sale of property and equipment	451			180
Purchase of short-term investments	(68,803		)	(50,549		)
Proceeds from sale or maturity of short-term investments	60,571			62,829
Purchase of long-term investments	—			(12,273		)
Business acquisition, net of cash acquired	(34		)	(600		)
Purchase of property and equipment	(18,875		)	(8,195		)
Net cash used in investing activities	(26,690		)	(8,608		)
Cash flows from financing activities:
Proceeds from exercise of common stock options	428			2,717
Proceeds from exercise of subsidiary stock options	326			196
Proceeds from revolving credit facility	32,000			—
Payment of debt	(6,250		)	(81,000		)
Payments of withholding taxes related to net share settlements of restricted stock	(7,602		)	(2,431		)
Series A convertible preferred stock proceeds, net of issuance costs of $1,154	—			106,846
Repurchase of common stock	—			(30,000		)
Principal payments on capital lease obligation	(43		)	(124		)
Payment of contingent consideration related to acquisition	(100		)	—
Payment of redeemable noncontrolling interest	(28,396		)	—
Payment of dividend on Series A convertible preferred stock	(2,092		)	(1,035		)
Net cash used in financing activities	(11,729		)	(4,831		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(11,694		)	1,753
Net (decrease) increase in cash, cash equivalents and restricted cash	(16,830		)	18,146
Cash, cash equivalents and restricted cash, beginning of period	195,236			145,086
Cash, cash equivalents and restricted cash, end of period	$	178,406		$	163,232

Supplemental Non-GAAP Financial Information as of September 30, 2018 and 2017

Reconciliation from cash, cash equivalents and restricted cash to total cash and cash equivalents, short-term investments and long-term investments:

Cash, cash equivalents and restricted cash, end of period	$	178,406		$	163,232
Less : Restricted cash	1,425			975
Total Cash and cash equivalents end of period	176,981			162,257

Short-term investments	54,108			76,662
Long-term investments	1,410			15,120
Total short-term and long-term investments, end of period	55,518			91,782

Total cash and cash equivalents, short-term and long-term investments	$	232,499		254,039

Virtusa Corporation and Subsidiaries

Reconciliation of Non-GAAP Guidance**

	Three months ending						Fiscal Year ending
	December 31, 2018						March 31, 2019
	Low			High			Low			High

GAAP diluted earnings per share	$	0.12		$	0.16		$	0.09		$	0.17

Effect of stock-based compensation expense	0.22			0.22			0.93			0.93
Effect of acquisition-related charges and restructuring charges	0.21			0.21			0.76			0.76
Effect of foreign currency transaction (gains) losses	0.00			0.00			0.60			0.60
Effect of change in dilutive shares for non-GAAP	(0.01		)	(0.01		)	(0.01		)	(0.01		)
Effect of tax impact from Tax Act	0.00			0.00			0.00			0.00
Effect of tax adjustments	(0.01		)	0.02			(0.30		)	(0.26		)
Effect of noncontrolling interest	(0.00		)	(0.00		)	0.00			0.00
Effect on dividend on Series A Convertible Preferred Stock	0.03			0.03			0.13			0.13
Non-GAAP diluted earnings per share#	$	0.56		$	0.62		$	2.19		$	2.31

Weighted average diluted shares outstanding
- GAAP	30.7			30.7			30.7			30.7
- Non-GAAP	33.7			33.7			33.7			33.7

** EPS impact is subject to rounding

# To the extent the Series A Convertible Preferred Stock is dilutive using the if-converted method, the Series A Convertible Preferred Stock is included in the weighted average shares outstanding to determine non-GAAP diluted earnings per share for each of the non-GAAP adjustments

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Greenough

Amy Legere, (617) 275-6517

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Investor Contact:

ICR

William Maina, 646-277-1236

william.maina@icrinc.com