Virtusa (VRTU) 10-Q 9 Feb 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2016	Feb. 06, 2017
Document and Entity Information
Entity Registrant Name	VIRTUSA CORP
Entity Central Index Key	1,207,074
Document Type	10-Q
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		29,957,522
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Mar. 31, 2016
Current assets:
Cash and cash equivalents	$ 133,878	$ 148,986
Short-term investments	80,731	53,917
Accounts receivable, net of allowance of $1,631 and $1,046 at December 31, 2016 and March 31, 2016, respectively	117,926	138,530
Unbilled accounts receivable	71,127	58,063
Prepaid expenses	32,576	12,094
Restricted cash	220	93,921
Other current assets	24,392	23,268
Total current assets	460,850	528,779
Property and equipment, net of accumulated depreciation of $53,339 and $42,722 at December 31, 2016 and March 31, 2016, respectively	114,569	116,282
Investments accounted for using equity method	1,671	2,869
Long-term investments	22,547	28,817
Deferred income taxes	19,636	15,890
Goodwill	204,762	200,424
Intangible assets, net	59,110	66,846
Other long-term assets	9,365	20,105
Total assets	892,510	980,012
Current liabilities:
Accounts payable	30,701	27,452
Accrued employee compensation and benefits	41,260	53,897
Deferred revenue	10,872	5,971
Accrued expenses and other	26,971	42,763
Current portion of long-term debt	8,870	8,881
Income taxes payable	2,880	2,300
Total current liabilities	121,554	141,264
Deferred income taxes	25,215	16,121
Long-term debt, less current portion	178,939	185,633
Long-term liabilities	8,791	9,039
Total liabilities	334,499	352,057
Commitments and contingencies
Stockholders' equity:
Undesignated preferred stock, $0.01 par value: Authorized 5,000,000 shares at December 31, 2016 and March 31, 2016; zero shares issued and outstanding at December 31, 2016 and March 31, 2016
Common stock, $0.01 par value: Authorized 120,000,000 shares at December 31, 2016 and March 31, 2016; issued 31,584,691 and 31,287,074 shares at December 31, 2016 and March 31, 2016, respectively; outstanding 29,727,988 and 29,430,371 shares at December 31, 2016 and March 31, 2016, respectively	316	313
Treasury stock, 1,856,703 common shares, at cost, at December 31, 2016 and March 31, 2016, respectively	(9,652)	(9,652)
Additional paid-in capital	301,237	297,621
Retained earnings	230,263	228,870
Accumulated other comprehensive loss	(46,831)	(42,139)
Total Virtusa stockholders' equity	475,333	475,013
Noncontrolling interest in subsidiaries	82,678	152,942
Total equity	558,011	627,955
Total liabilities, undesignated preferred stock and stockholders' equity	$ 892,510	$ 980,012

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Mar. 31, 2016
Consolidated Balance Sheets
Accounts receivable, allowance (in dollars)	$ 1,631	$ 1,046
Property and equipment, accumulated depreciation (in dollars)	$ 53,339	$ 42,722
Undesignated preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Undesignated preferred stock, Authorized shares	5,000,000	5,000,000
Undesignated preferred stock, shares issued	0	0
Undesignated preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, Authorized shares	120,000,000	120,000,000
Common stock, Issued shares	31,584,691	31,287,074
Common stock, Outstanding shares	29,727,988	29,430,371
Treasury stock, common shares	1,856,703	1,856,703

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Income
Revenue	$ 217,209	$ 150,603	$ 632,769	$ 428,449
Costs of revenue	154,847	96,908	460,776	277,770
Gross profit	62,362	53,695	171,993	150,679
Operating expenses:
Selling, general and administrative expenses	55,904	39,561	163,846	110,879
Income from operations	6,458	14,134	8,147	39,800
Other income (expense):
Interest income (expense)	(899)	1,319	(2,607)	4,246
Foreign currency transaction (losses) gains	(1,252)	201	(2,802)	395
Other, net	(180)	133	371	232
Total other income (expense)	(2,331)	1,653	(5,038)	4,873
Income before income tax expense	4,127	15,787	3,109	44,673
Income tax expense (benefit)	(1,414)	4,474	(1,378)	12,161
Net income	5,541	11,313	4,487	32,512
Less: net income attributable to noncontrolling interests, net of tax	1,106		3,094
Net income attributable to Virtusa common stockholders	$ 4,435	$ 11,313	$ 1,393	$ 32,512
Net income per share of common stock:
Basic earnings per share (in dollars per share)	$ 0.15	$ 0.39	$ 0.05	$ 1.11
Diluted earnings per share (in dollars per share)	$ 0.15	$ 0.38	$ 0.05	$ 1.08

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 5,541	$ 11,313	$ 4,487	$ 32,512
Other comprehensive income (loss):
Foreign currency translation adjustments	(8,876)	(3,184)	(12,079)	(9,993)
Pension plan adjustment	42	59	358	189
Unrealized gain (loss) on available-for-sale securities, net of tax	49	(99)	(115)	(85)
Unrealized gain (loss) on effective cash flow hedges, net of tax	145	1,419	4,734	(1,978)
Other comprehensive income (loss)	(8,640)	(1,805)	(7,102)	(11,867)
Comprehensive income (loss)	(3,099)	9,508	(2,615)	20,645
Less: comprehensive income (loss) attributable to noncontrolling interest, net of tax	(856)		684
Comprehensive income (loss) attributable to Virtusa common stockholders	$ (2,243)	$ 9,508	$ (3,299)	$ 20,645

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 4,487	$ 32,512
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	19,185	11,862
Share-based compensation expense	17,023	10,317
Provision for doubtful accounts	702	204
(Gain) loss on sale of property and equipment	(388)	4
Foreign currency transaction losses (gains), net	2,802	(395)
Amortization of discounts and premiums on investments	807	535
Amortization of debt issuance cost	847
Deferred income taxes, net	454
Excess tax benefits (expense) from stock option exercises	593	(2,886)
Net change in operating assets and liabilities:
Accounts receivable and unbilled receivable	(3,669)	(10,095)
Prepaid expenses and other current assets	(4,422)	(4,806)
Other long-term assets	10,753	(135)
Accounts payable	7,356	1,836
Accrued employee compensation and benefits	(15,907)	(2,190)
Accrued expenses and other current liabilities	1,033	1,738
Income taxes payable	(14,593)	2,154
Other long-term liabilities	(5,459)	233
Net cash provided by operating activities	21,604	40,888
Cash flows from investing activities:
Proceeds from sale of property and equipment	2,536	13
Purchase of short-term investments	(100,131)	(29,261)
Proceeds from sale or maturity of short-term investments	99,888	68,311
Purchase of long-term investments	(28,984)	(22,215)
Proceeds from sale of long-term investments	7,116	9,200
Decrease (increase) in restricted cash	92,651	(23,748)
Business acquisition, net of cash acquired	(3,460)	(37,167)
Purchase of property and equipment	(10,947)	(10,314)
Net cash provided by (used in) investing activities	58,669	(45,181)
Cash flows from financing activities:
Proceeds from exercise of common stock options	816	1,087
Proceeds from exercise of subsidiary stock options	357
Payment of debt	(7,500)
Payment of contingent consideration related to acquisition	(830)	(352)
Acquisition of noncontrolling interest	(89,147)
Payment of other noncontrolling interest	(50)
Proceeds from subsidiary stock sale	7,236
Principal payments on capital lease obligation	(118)	(87)
Excess tax (expense) benefits from stock option exercises	(593)	2,886
Net cash (used in) provided by financing activities	(89,829)	3,534
Effect of exchange rate changes on cash and cash equivalents	(5,552)	(4,301)
Net decrease in cash and cash equivalents	(15,108)	(5,060)
Cash and cash equivalents, beginning of period	148,986	124,802
Cash and cash equivalents, end of period	$ 133,878	$ 119,742

Nature of the Business

Nature of the Business	9 Months Ended
	Dec. 31, 2016
Nature of the Business
Nature of the Business	(1) Nature of the Business Virtusa Corporation (the “Company”, “Virtusa”, “we”, “us” or “our”) is a global information technology services provider. Using an enhanced global delivery model, we provide end-to-end information technology (“IT”) services to Global 2000 companies. These services include IT and business consulting, digital enablement services, user experience (“UX”) design, development of IT applications, maintenance and support services, systems integration, infrastructure and managed services. Our services leverage our distinctive consulting approach and unique platforming methodology to transform our clients’ businesses through the innovative use of technology and domain knowledge to solve critical business problems. Our services enable our clients to accelerate business outcomes by consolidating, rationalizing and modernizing our clients’ core customer-facing processes into one or more core systems. We deliver cost-effective solutions through a global delivery model, applying advanced methods such as Agile, an industry standard technique designed to accelerate application development. We also use our consulting methodology, which we refer to as Accelerated Solution Design (“ASD”), which is a collaborative decision-making and design process performed with the client, to ensure our solutions meet the client’s specifications and requirements. We have built targeted solutions that enable our clients to reduce their IT operations cost, while simultaneously increasing their ability to accelerate business growth in existing and new market segments. We further differentiate ourselves by enabling our clients to expand their addressable market through our millennial offerings and to improve the efficiencies of operating their business through our industry leading transformational solutions. Headquartered in Massachusetts, we have offices in the United States, Canada, the United Kingdom, the Netherlands, Germany, Switzerland, Sweden, Austria, the United Arab Emirates, Hong Kong, Japan, Australia and New Zealand, with global delivery centers in India, Sri Lanka, Hungary, Singapore and Malaysia, as well as near shore delivery centers in the United States.

Unaudited Interim Financial Inf

Unaudited Interim Financial Information	9 Months Ended
	Dec. 31, 2016
Unaudited Interim Financial Information
Unaudited Interim Financial Information	(2) Unaudited Interim Financial Information Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles and Article 10 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, and should be read in conjunction with the Company’s audited consolidated financial statements (and notes thereto) for the fiscal year ended March 31, 2016 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 27, 2016. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation of the accompanying unaudited consolidated financial statements have been included, and all material adjustments are of a normal and recurring nature. Operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire fiscal year. Principles of Consolidation The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Virtusa Corporation and all of its subsidiaries that are directly or indirectly more than 50% owned or controlled. When the Company does not have a controlling interest in an entity, but exerts a significant influence on the entity, the Company applies the equity method of accounting. The consolidated financial statements reflect the accounts of the Company and its direct and indirect subsidiaries, Virtusa Consulting Services Private Limited, Virtusa Software Services Private Limited, Virtusa Technologies (India) Private Limited, Polaris Consulting & Services Limited and Optimus Global Services Limited, each organized and located in India; Virtusa (Private) Limited, organized and located in Sri Lanka; Virtusa UK Limited and Polaris Consulting & Services Limited, each organized and located in the United Kingdom; Virtusa Securities Corporation, a Massachusetts securities corporation; Apparatus, Inc. organized and located in Indiana; Virtusa International, B.V. and Polaris Software Lab B.V., each organized and located in the Netherlands; Virtusa Hungary Kft. and Polaris Consulting & Services, Kft., each organized and located in Hungary; Virtusa Germany GmbH and Polaris Software Lab GmbH, each organized and located in Germany; Virtusa Switzerland GmbH and Polaris Consulting & Services SA, each organized and located in Switzerland; Virtusa Singapore Private Limited and Polaris Consulting & Services Pte Limited, each organized and located in Singapore; Virtusa Malaysia Private Limited and Polaris Consulting & Services, SND BHD, each organized and located in Malaysia; Virtusa Austria GmbH, organized and located in Austria; Virtusa Philippines Inc., organized and located in the Philippines; Virtusa Sweden AB organized and located in Sweden; Virtusa Canada, Inc. and Polaris Consulting & Services Inc, each organized and located in Canada; Polaris Consulting & Services Ireland Limited, organized and located in Ireland; Polaris Consulting & Services Japan K.K., organized and located in Japan; Polaris Consulting & Services Pty Ltd., organized and located in Australia; Polaris Consulting & Services FZ-LLC, organized and located in the United Arab Emirates; Polaris Software Lab (Shanghai) Limited, organized and located in China. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including the recoverability of tangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management reevaluates these estimates on an ongoing basis. The most significant estimates relate to the recognition of revenue and profits based on the percentage of completion method of accounting for fixed price contracts, share based compensation, income taxes, including reserves for uncertain tax positions, deferred taxes and liabilities, intangible assets, contingent consideration and valuation of financial instruments, including derivative contracts and investments. Management bases its estimates on historical experience and on various other factors and assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated financial statements. Fair Value of Financial Instruments At December 31, 2016 and March 31, 2016, the carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, unbilled accounts receivable, restricted cash, accounts payable, accrued employee compensation and benefits and other accrued expenses and long-term debt, approximate their fair values due to the nature of the items. See Note 5 of the notes to our financial statements for a discussion of the fair value of the Company’s other financial instruments. Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2018. Early application is permitted but not before periods beginning on or after January 1, 2017. In March, April and May 2016, the FASB issued updates to the new revenue standard to clarify the implementation guidance on principal versus agent considerations for reporting revenue gross versus net, identifying performance obligations, accounting for licenses of intellectual property, transition, contract modifications, collectability, non-cash consideration and presentation of sales and other similar taxes with the same effective date. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. In January 2016, the FASB issued an update (ASU 2016-01) to the standard on financial instruments. The update significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The update also amends certain disclosure requirements. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Upon adoption, entities will be required to make a cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective. However, the specific guidance on equity securities without readily determinable fair value will apply prospectively to all equity investments that exist as of the date of adoption. Early adoption of certain sections of this update is permitted. The Company is currently evaluating the effect the new standard will have on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued as update (ASU 2016-02) to the standard on leases to increase transparency and comparability among organizations. The new standard replaces the existing guidance on leases and requires the lessee to recognize a right-of-use asset and a lease liability for all leases with lease terms equal to or greater than twelve months. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize total lease expense on a straight-line basis. For public business entities this standard is effective for the annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption of this new standard is permitted. Entities will be required to use a modified retrospective transition which provides for certain practical expedients. The Company is currently evaluating the effect the new standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued an update (ASU 2016-05) to the standard on derivatives and hedging on the effect of derivative contract novations on existing hedge accounting relationships. As it relates to derivative instruments, novation refers to replacing one of the parties to a derivative instrument with a new party, which may occur for a variety of reasons such as: financial institution mergers, intercompany transactions, an entity exiting a particular derivatives business or relationship, or because of laws or regulatory requirements. The update clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require designation of that hedge accounting relationship provided that all other hedge accounting criteria continue to be met. The update is effective for fiscal years, and interim periods within those fiscal years, beginning on or after January 1, 2017. Upon adoption, the entities can choose to apply on either a prospective basis or a modified retrospective basis. Early adoption of this update is permitted. The adoption of this guidance is not expected to have a material impact on the consolidated financial statements. In March 2016, the FASB issued an update (ASU 2016-09) to the standard on Compensation—Stock Compensation, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. Upon adoption, entities will be required to apply a modified retrospective, prospective or retrospective transition method depending on the specific section of the guidance being adopted. The Company is currently evaluating the effect the update will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Measurement of Credit Losses on Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments. This standard update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of this new standard will have on its consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This update is intended to reduce diversity in practice in how certain cash receipts and payments are classified in the statement of cash flows. This standard update addresses eight specific cash flow issues, including debt prepayment or extinguishment costs, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, and distributions from certain equity method investees. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires application using a retrospective transition method. The adoption of this guidance is not expected to have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, an update to the standard on income taxes. This new standard requires the recognition of current and deferred income taxes when an intra-entity transfer of assets other than inventory occurs. The update is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2017. Early adoption is permitted in the first interim period. Upon adoption, the entities will be required to use a modified retrospective transition approach. The adoption of this guidance is not expected to have a material impact on the consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (Topic 230), which is intended to reduce diversity in practice on how changes in restricted cash are classified and presented in the statement of cash flows. This ASU requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The amendments in this Update should be applied using a retrospective transition method to each period presented.

Earnings per Share

Earnings per Share	9 Months Ended
	Dec. 31, 2016
Earnings per Share
Earnings per Share	(3) Earnings per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period, and diluted earnings per share is computed by including the dilutive impact of common stock equivalents outstanding for the period in the denominator. Common stock equivalents include shares issuable upon the exercise of outstanding stock options, stock appreciation rights, issuance of shares on exercise or vesting of restricted stock units, unvested restricted stock awards, net of shares assumed to have been purchased with the proceeds, using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share for the periods set forth below: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Numerators: Net income available to Virtusa common stockholders $ $ $ $ Denominators: Weighted average common shares outstanding Dilutive effect of employee stock options and unvested restricted stock Dilutive effect of stock appreciation rights — Weighted average shares-diluted Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ During the three months ended December 31, 2016 and 2015, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase 649,414 and 25,702 shares of common stock, respectively, were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive. During the nine months ended December 31, 2016, and 2015, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase 466,936 and 10,413 shares of common stock, respectively, were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive.

Investment Securities

Investment Securities	9 Months Ended
	Dec. 31, 2016
Investment Securities
Investment Securities	(4) Investment Securities At December 31, 2016 and March 31, 2016, all of the Company’s investment securities were classified as available-for-sale and were carried on its balance sheet at their fair market value. A fair market value hierarchy based on three levels of inputs was used to measure each security (See Note 5 of the notes to our financial statements for a discussion of the fair value of the Company’s other financial instruments.). The following is a summary of investment securities at December 31, 2016: Amortized Gross Gross Fair Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current ) Preference shares: Current — — Non-current — ) Agency and short-term notes: Current — ) Non-current — ) Mutual funds: Current — Commercial paper: Current — — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $ The following is a summary of investment securities at March 31, 2016: Amortized Gross Gross Fair Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current ) Preference shares: Non-current — — Agency and short-term notes: Current — Non-current ) Mutual funds: Current ) Depository receipts: Current — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $ The Company evaluates investments with unrealized losses to determine if the losses are other than temporary. The Company has determined that the gross unrealized losses at December 31, 2016 and March 31, 2016 are temporary. In making this determination, the Company considered the financial condition, credit ratings and near-term prospects of the issuers, the underlying collateral of the investments, and the magnitude of the losses as compared to the cost and the length of time the investments have been in an unrealized loss position. Additionally, while the Company classifies the securities as available for sale, the Company does not currently intend to sell such investments and it is more likely than not the Company will not be required to sell such investments prior to the recovery of their carrying value. Proceeds from sales of available-for-sale investment securities and the gross gains and losses that have been included in earnings as a result of those sales were as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Proceeds from sales of available-for-sale investment securities $ $ $ $ Gross gains $ $ — $ $ Gross losses — — — — Net realized gains on sales of available-for-sale investment securities $ $ — $ $

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Dec. 31, 2016
Fair Value of Financial Instruments
Fair Value of Financial Instruments	(5) Fair Value of Financial Instruments The Company uses a framework for measuring fair value under U.S. generally accepted accounting principles and enhanced disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company’s financial assets and liabilities reflected in the consolidated financial statements at carrying value include marketable securities and other financial instruments which approximate fair value. Fair value for marketable securities is determined using a market approach based on quoted market prices at period end in active markets. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ $ — $ Available-for-sales securities—non-current — — Foreign currency derivative contracts — — Interest Rate Swap Contracts — — Total assets $ — $ $ — $ Liabilities: Foreign currency derivative contracts $ — $ $ — Interest Rate Swap Contracts — — — — Total liabilities $ — $ $ — $ The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2016: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ $ — $ Available-for-sales securities—non-current — — Foreign currency derivative contracts — — Total assets $ — $ $ — $ Liabilities: Foreign currency derivative contracts $ — $ $ — Contingent consideration — — Total liabilities $ — $ $ $ The Company determines the fair value of the contingent consideration related to acquisitions based on the probability of attaining certain revenue and profit margin targets using an appropriate discount rate to present value the liability. The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities at December 31, 2016. Level 3 Balance at April 1, 2016 $ Contingent consideration recognized in earnings Payments made during the period ) Balance at December 31, 2016 $ —

Derivative Financial Instrument

Derivative Financial Instruments	9 Months Ended
	Dec. 31, 2016
Derivative Financial Instruments
Derivative Financial Instruments	(6) Derivative Financial Instruments The Company uses derivative instruments to manage selected foreign currency and interest rate exposures. The Company evaluates its foreign exchange policy on an ongoing basis to assess its ability to address foreign exchange exposures on its consolidated balance sheets, statements of income and consolidated statement of cash flows from all foreign currencies, including most significantly the U.K. pound sterling, the euro, Indian rupee and Sri Lankan rupee. The Company enters into hedging programs with highly rated financial institutions in accordance with its foreign exchange policy (as approved by the Company’s audit committee and board of directors) which permits hedging of material, known foreign currency exposures. There is no margin required, no cash collateral posted or received by us related to our foreign exchange forward contracts. Currently, the Company maintains four hedging programs, each with varying contract types, duration and purposes. The Company’s “Cash Flow Program” is designed to mitigate the impact of volatility in the U.S. dollar equivalent of the Company’s Indian rupee denominated expenses over a rolling 24-month period. The Cash Flow Program transactions currently meet the criteria for hedge accounting as cash flow hedges. In addition, as part of the Polaris acquisition, the Company has assumed a cash flow program designed to mitigate the impact of the volatility of the translation of Polaris U.S. dollar denominated revenue into Indian rupees over a rolling 18 month period (“Polaris Cash Flow Program”). These cash flow hedges meet the criteria for hedge accounting as cash flow hedges. The Company’s “Balance Sheet Program” involves the use of 30-day derivative instruments designed to mitigate the monthly impact of foreign exchange gains/losses on certain balances and payments. The Company’s “Economic Hedge Program” involves the purchase of derivative instruments with maturities of up to 92 days, and is designed to mitigate the impact of foreign exchange on the U.K. pound sterling, the euro and the Swedish krona denominated revenue and costs with respect to the quarter for which such instruments are purchased. The Balance Sheet Program and the Economic Hedge Program are treated as economic hedges as these programs do not meet the criteria for hedge accounting and all gains and losses are recognized in consolidated statement of income under the same line item as the underlying exposure being hedged. The Company is exposed to credit losses in the event of non-performance by the counterparties on its financial instruments. All counterparties currently have investment grade credit ratings. The Company anticipates that these counterparties will be able to fully satisfy their obligations under the contracts. The Company has derivative contracts with three counterparties as of December 31, 2016. The Company’s agreements with its counterparties contain provisions pursuant to which the Company could be declared in default of its derivative obligations. As of December 31, 2016, the Company had not posted any collateral related to these agreements. If the Company had breached any of these provisions as of December 31, 2016, it could have been required to settle its obligations under these agreements at amounts which approximate the December 31, 2016 fair values reflected in the table below. During the three months ended December 31, 2016, the Company was not in default of any of its derivative obligations. ASC 815, “ Derivative and Hedging ” requires that all derivatives be recognized on the balance sheet at fair value. The Company evaluates all of its derivatives based on market observable inputs, including both forward and spot prices for currencies. Any significant change in the forward or spot prices for hedged currencies would have a significant impact on the value of the Company’s derivatives. Changes in fair value of the designated cash flow hedges for the Company’s Cash Flow Program as well as the Polaris Cash Flow Program are recorded as a component of accumulated other comprehensive income (loss) (“AOCI”), net of tax, until the forecasted hedged transactions occur and are then recognized in the consolidated statement of income in the same line item as the item being hedged. The Company evaluates hedge effectiveness at the time a contract is entered into, as well as on an ongoing basis. If, and when, all or part of a hedge relationship is discontinued because the forecasted transaction is deemed probable of not occurring by the end of the originally specified period or within an additional two-month period of time thereafter, the contract, or the relative amount of the contract, is deemed “ineffective” and any related derivative amounts recorded in equity are reclassified to earnings. There were no gains (losses) that were reclassified from AOCI into earnings as a result of forecasted transactions that were considered probable of not occurring for the nine months ended December 31, 2016 and 2015. Changes in the fair value of the derivatives purchased under the Balance Sheet Program are reflected in the Company’s consolidated statement of income and are included in foreign currency transaction gains (losses) for each period. Changes in the fair value of the derivatives purchased under the Economic Hedge Program are also reflected in the Company’s consolidated statement of income and are included in the same line item as the underlying exposure being hedged for each period. The U.S. dollar notional value of all outstanding foreign currency derivative contracts was $169,112 and $266,706 at December 31, 2016 and March 31, 2016, respectively. Unrealized net gains related to these contracts which are expected to be reclassified from AOCI to earnings during the next 12 months were $10,699 at December 31, 2016. At December 31, 2016, the maximum outstanding term of any derivative instrument was 18 months. On July 26, 2016, the Company entered into two 12-month forward starting interest rate swap transactions and on July 28, 2016, the Company entered into a third 12-month forward starting interest rate swap transaction to mitigate Company’s interest rate risk on 50% of Company’s variable rate debt (collectively, “The Interest Rate Swap Agreements”). The Company’s objective is to limit the variability of cash flows associated with changes in LIBOR interest rate payments due on the Credit Agreement by using pay-fixed, receive-variable interest rate swaps to offset the future variable rate interest payments. The Company will recognize these transactions in accordance with ASC 815 “Derivatives and Hedging,” and have designated the swaps as cash flow hedges. The Interest Rate Swap Agreements have an effective date of July 31, 2017 and a maturity date of July 31, 2020. The swaps have an aggregate beginning notional amount of $93,800 and hedge approximately 50% of the Company’s forecasted outstanding debt balance as of July 31, 2017. The notional amount of the swaps amortizes over the three swap periods corresponding to the quarterly principle payments on the term loan. The Interest Rate Swap agreements require the Company to make monthly fixed interest rate payments based on the amortized notional amount at a blended weighted average rate of 1.025% and the Company will receive 1-month LIBOR on the same notional amounts. The counterparties to the Interest Rate Swap Agreements could demand an early termination of the 2016 Swap Agreements if the Company is in default under the Credit Agreement, or any agreement that amends or replaces the Credit Agreement in which the counterparty is a member, and the Company is unable to cure the default. An event of default under the Credit Agreement includes customary events of default and failure to comply with financial covenants, including a maximum consolidated leverage ratio commencing on December 31, 2016, of not more than 3.25 to 1.00 for the first year of the Credit Agreement, of not more than 3.00 to 1.00 for the second year of the Credit Agreement, and 2.75 to 1.00 thereafter, each as determined for the four consecutive quarter period ending on each fiscal quarter and a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00. As of December 31, 2016, the Company was in compliance with these covenants. The unrealized gain associated with the 2015 Swap Agreement was $1,723 as of December 31, 2016, which represents the estimated amount that the Company would receive from the counterparties in the event of an early termination. The following table sets forth the fair value of derivative instruments included in the consolidated balance sheets at December 31, 2016 and March 31, 2016: Derivatives designated as hedging instruments December 31, 2016 March 31, 2016 Foreign currency exchange contracts: Other current assets $ $ Other long-term assets $ $ Accrued expenses and other $ $ Long-term liabilities $ $ December 31, 2016 March 31, 2016 Interest rate swap contracts: Other long-term assets $ $ — The following tables set forth the effect of the Company’s foreign currency exchange contracts on the consolidated financial statements of the Company for the three and nine months ended December 31, 2016 and 2015: Amount of Gain or (Loss) Recognized in AOCI on Derivative Derivatives Designated as Cash Flow Three Months Ended December 31, Nine Months Ended December 31, Hedging Relationships 2016 2015 2016 2015 Foreign currency exchange contracts $ $ $ $ ) Interest rate swaps $ $ — $ $ — Location of Gain Reclassified Amount of Gain or (Loss) Reclassified from AOCI into Income from AOCI into Income (Effective Three Months Ended December 31, Nine Months Ended December 31, Portion) 2016 2015 2016 2015 Revenue $ $ — $ $ — Costs of revenue $ $ ) $ $ Operating expenses $ $ ) $ $ Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not Designated Location of Gain or (Loss) Three Months Ended Nine Months Ended as Hedging Instrument Recognized in Income on Derivatives 2016 2015 2016 2015 Foreign currency exchange contracts Foreign currency transaction gains (losses) $ — $ $ ) $ ) Revenue $ ) $ $ ) $ Costs of revenue $ ) $ ) $ ) $ ) Selling, general and administrative expenses $ ) $ ) $ ) $ )

Acquisitions

Acquisitions	9 Months Ended
	Dec. 31, 2016
Acquisitions
Acquisitions	(7) Acquisitions On March 3, 2016, pursuant to a share purchase agreement (the “SPA”), dated as of November 5, 2015, by and among Virtusa Consulting Services Private Limited (“Virtusa India”), a subsidiary of the Company, Polaris Consulting & Services Limited (“Polaris”) and the Promoter Sellers named therein, as amended, the Company completed the purchase of 53,133,127 shares, or approximately 51.7% of the fully-diluted capitalization of Polaris from certain Polaris shareholders for approximately $168,257 (Indian rupees 11,391,365) in cash (the “Polaris SPA Transaction”). In addition, on April 6, 2016, Virtusa India completed an unconditional mandatory open offer with successful tender to purchase an additional 26% of the fully diluted outstanding shares of Polaris common stock from Polaris’ public shareholders. The mandatory open offer was conducted in accordance with requirements of the Securities and Exchange Board of India (“SEBI”) and the applicable Indian rules on takeovers. Virtusa India purchased 26,719,942 shares of Polaris common stock for an aggregate purchase price of approximately $89,147 (Indian rupees 5,935,260). Pursuant to the mandatory open offer, during the fiscal year ended March 31, 2016, the Company transferred $89,220 into an escrow account in accordance with the India takeover rules, which is recorded as restricted cash at March 31, 2016, and the mandatory open offer closed on April 6, 2016. On April 6, 2016, the restricted cash was released from the escrow account and used for settlement for the mandatory open offer. Upon the closing of the mandatory offering, Virtusa’s ownership interest in Polaris increased from approximately 51.7% to 77.7% of Polaris’ fully diluted shares of common stock outstanding, and from approximately 52.9% to 78.8% of Polaris’ basic shares of common stock outstanding. Under applicable Indian rules on takeovers, Virtusa India was required to sell within one year of the settlement of the unconditional mandatory offer its shares of common stock in Polaris in excess of 75% of the basic outstanding shares of common stock of Polaris. In order to comply with the applicable Indian rules on takeovers, during the three months ended December 31, 2016, the Company sold 3.7% of its shares of Polaris common stock through a public offering. The sale offer closed on December 14, 2016, and the Company received approximately $7,645 in proceeds, net of $188 in brokerage fees and taxes. In addition to these costs, the Company incurred additional costs of $409 towards professional and legal fees and expense. The Company’s ownership interest in Polaris prior to the sale offer was 78.6% of the outstanding shares of common stock, and upon the closing of the sale offer, the Company’s ownership interest decreased from 78.6% to 74.9% of Polaris’ basic shares of common stock outstanding. In accordance with ASC 810-10, changes in a parent’s ownership, while retaining its financial controlling interest are accounted for as equity transactions. Under the purchase method of accounting, assets acquired and liabilities assumed are recorded at their estimated fair values. The Company may continue to adjust the preliminary estimated fair values after obtaining more information regarding asset valuations, liabilities assumed, and revision of preliminary estimates. The following is based on information available at December 31, 2016 and may be subject to change during the measurement period. During the nine months ended December 31, 2016, the Company recorded $4,354 and $9,386 to goodwill related to noncontrolling interest and deferred tax liabilities respectively; and $4,624 and $317 as a reduction of goodwill related to fair value adjustment related to certain assets and certain accruals respectively. During the nine months ended December 31, 2016, the impact to the consolidated statements of income (loss) was not material. Amount Useful Life Consideration Transferred: Cash paid at closing $ Less: Cash acquired ) Total purchase price, net of cash acquired $ Acquisition-related costs $ Assets and liabilities Cash and cash equivalents $ Accounts receivable and unbilled receivable Short term investments Other current assets Property and equipment Long term investments Long term assets Goodwill Customer relationships 10 - 15 years Trademark 2 years Accounts Payable ) Deferred revenue ) Accrued expenses and other current liabilities ) Deferred income taxes ) Long term liabilities ) Noncontrolling interest ) Total purchase price Less: Cash acquired ) Total purchase price, net of cash acquired $ Acquisition costs are recorded in selling, general and administrative expenses. Noncontrolling interest for the minority shares outstanding was recorded at fair value, based on the Polaris common stock closing stock price on the date of acquisition and the fair value of vested Polaris stock options exercisable for Polaris common stock were valued based on the Black-Scholes option pricing model. The assets of Polaris acquired, and liabilities assumed by the Company, include net assets of $300 related to a business unit that was sold to a third party on July 8, 2016. To finance the Polaris SPA Transaction, on February 25, 2016, the Company drew down the full $200,000 of the term loan. See Note 11 of the notes to our financial statements included herein for a detail description of our debt.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Dec. 31, 2016
Goodwill and Intangible Assets
Goodwill and Intangible Assets	(8) Goodwill and Intangible Assets Goodwill: The Company has one operating segment. The following are details of the changes in goodwill balance at December 31, 2016: Amount Balance at April 1, 2016 $ Preliminary purchase price adjustment Foreign currency translation adjustments ) Balance at December 31, 2016 $ The acquisition costs and goodwill balance deductible for our business acquisitions for tax purposes are $74,073. The acquisition costs and goodwill balance not deductible for tax purposes are $142,577 and relate to the Company’s TradeTech acquisition (closed on January 2, 2014) and the Polaris acquisition. The Company performed the annual assessment of its goodwill during the fourth quarter of the fiscal year ended March 31, 2016 and determined that the estimated fair value of the Company’s reporting unit exceeded its carrying value and therefore goodwill was not impaired. The Company will continue to complete goodwill impairment assessments at least annually during the fourth quarter of each ensuing fiscal year. The Company will continue to evaluate whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets, including intangible assets, may warrant revision or that the carrying value of these assets may be impaired. Any write-downs are treated as permanent reductions in the carrying amount of the assets. Intangible Assets: The following are details of the Company’s intangible asset carrying amounts acquired and amortization at December 31, 2016. Weighted Average Gross Carrying Accumulated Net Carrying Amortizable intangible assets: Customer relationships $ $ $ Trademark Technology $ $ $ The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized.

Income Taxes

Income Taxes	9 Months Ended
	Dec. 31, 2016
Income Taxes
Income Taxes	(9) Income Taxes The Company applies an estimated annual effective tax rate to its year-to-date operating results to determine the interim provision (benefit) for income tax expense. The Company’s effective tax rate was (34.3)% and (44.3)% for the three and nine months ended December 31, 2016, as compared to an effective tax rate of 28.3% and 27.2% for the three and nine months ended December 31, 2015. The Company’s reported effective tax rate is impacted by jurisdictional mix of profits and losses in which the Company operates, statutory tax rates in effect, unusual or infrequent discrete items requiring a provision during the period and certain exemptions or tax holidays applicable to the Company. The Company created two export oriented units in India; one in Bangalore during the fiscal year ended March 31, 2011 and a second unit in Hyderabad (Special Economic Zone or “SEZ”) during the fiscal year ended March 31, 2010 for which no income tax exemptions were availed. The Company’s Indian subsidiaries also operate two development centers in areas designated as a SEZ, under the SEZ Act of 2005. In particular, the Company was approved as a SEZ Co-developer and has built a campus on a 6.3 acre parcel of land in Hyderabad, India that has been designated as a SEZ. As a SEZ Co-developer, the Company is entitled to certain tax benefits for any consecutive period of 10 years during the 15 year period starting in fiscal year 2008. The Company has elected to claim SEZ Co-developer income tax benefits starting in fiscal year ended March 31, 2013. In addition, the Company has leased facilities in SEZ designated locations in Hyderabad and Chennai, India. The Company’s profits from the Hyderabad and Chennai SEZ operations are eligible for certain income tax exemptions for a period of up to 15 years beginning in fiscal March 31, 2009. In the fiscal year ended March 31, 2014, the Company leased two facilities in SEZ designated locations, in Bangalore and Pune, India, each of which is eligible for tax holidays for up to 15 years beginning in the fiscal year ended March 31, 2014. During the fiscal year ended March 31, 2016, the Company expanded its facilities in Hyderabad to create a third export oriented unit and received approval for SEZ benefits for a period up to 15 years. The Company’s India profits ineligible for SEZ benefits are subject to corporate income tax at the current rate of 34.6%. Based on the latest changes in tax laws, book profits of SEZ units are subject to Indian Minimum Alternative Tax (“MAT”), commencing April 1, 2011, which will continue to negatively impact the Company’s cash flows. In addition, the Company’s Sri Lankan subsidiary, Virtusa (Private) Limited, is operating under a 12-year income tax holiday arrangement that is set to expire on March 31, 2019 and required Virtusa (Private) Limited to retain certain job creation and investment criteria through the expiration of the holiday period. During the fiscal year ended March 31, 2016, the Company believed it has fulfilled its hiring and investment commitments and is eligible for tax holiday through March 2019. The current agreement provides income tax exemption for all export business income. On September 30, 2015, the Company received confirmation for the Board of Investments that it has satisfied investment criteria through March 31, 2015 and is eligible for holiday benefits. At December 31, 2016, the Company believes it is eligible for continued benefits for the entire 12 year tax holiday. The Company’s effective income tax rate is based on the composition of estimated income in different jurisdictions, including those where the Company is enjoying tax holidays, for the applicable fiscal year and adjustments, if any, in the applicable quarterly periods, for unrecognized tax benefits for uncertain income tax positions or other discrete items required to be reported during interim periods. The Company’s aggregate income tax rate in foreign jurisdictions is lower than its income tax rate in the United States due primarily to lower rates generally in jurisdictions in which the Company operates and applicable tax holiday benefits of the Company, obtained primarily in India and Sri Lanka. A valuation allowance is required if, based on available evidence, it is more likely than not, that all or some portion of the asset will not be realized due to the inability of the Company to generate sufficient taxable income. Net income in the United States has decreased during the nine months ended December 31, 2016 compared with the nine months ended December 31, 2015. The Company has a significant deferred tax asset in the United States at December 31, 2016. We continue to monitor all positive and negative evidence related to this asset. At December 31, 2016, the Company determined that a specific valuation allowance was not required. Unrecognized tax benefits represent uncertain tax positions for which the Company has established reserves. At December 31, 2016 and March 31, 2016, the total liability for unrecognized tax benefits was $6,576 and $6,693. Unrecognized tax benefits may be adjusted upon the closing of the statute of limitations for income tax returns filed in various jurisdictions. During the nine months ended December 31, 2016, the unrecognized tax benefits decreased by $117 and increased by $100 during the nine months ended December 31, 2015. The decrease in unrecognized tax benefits in the nine months period ending December 31, 2016, was predominantly due to release of a prior period US tax position, offset by increases for incremental interest accrued on existing uncertain tax positions. The increase in unrecognized tax benefits in the nine months period ending December 31, 2015, was predominantly due to increases for incremental interest accrued on existing uncertain tax positions and a prior period tax position in a foreign jurisdiction. Undistributed Earnings of Foreign Subsidiaries A substantial amount of the Company’s income before provision for income tax is from operations earned in its Indian and Sri Lankan subsidiaries and is subject to tax holiday. The Company intends to use accumulated and future earnings of foreign subsidiaries to expand operations outside the United States and, accordingly, undistributed income is considered to be indefinitely reinvested. The Company does not provide for U.S. income taxes on foreign earnings. At December 31, 2016, the Company had $360,220 of unremitted earnings from foreign subsidiaries and approximately $144,676 of cash, short-term investments and long-term investments that would otherwise be available for potential distribution, if not indefinitely reinvested. If required, such cash and investments could be repatriated to the United States. However, under current law, any repatriation would be subject to United States federal income tax less applicable foreign tax credits. Due to the various methods by which such earnings could be repatriated in the future, the amount of taxes attributable to the undistributed earnings is not practicably determinable.

Concentration of Revenue and As

Concentration of Revenue and Assets	9 Months Ended
	Dec. 31, 2016
Concentration of Revenue and Assets
Concentration of Revenue and Assets	(10) Concentration of Revenue and Assets Total revenue is attributed to geographic areas based on the location of the client. Long-lived assets represent property, plant and equipment, intangible assets and goodwill, net of accumulated depreciation and amortization, and are attributed to geographic area based on their location. Geographic information is summarized as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Client revenue: North America $ $ $ $ Europe Rest of world Consolidated revenue $ $ $ $ December 31, March 31, Long-lived assets, net of accumulated depreciation and amortization: North America $ $ Asia Europe and others Consolidated long-lived assets, net $ $ Revenue from significant clients as a percentage of the Company’s consolidated revenue was as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Customer 1 % % % %

Debt

Debt	9 Months Ended
	Dec. 31, 2016
Debt
Debt	(11) Debt On February 25, 2016, in connection with the Polaris SPA Transaction, the Company entered into a credit agreement (the “Credit Agreement”) dated as of February 25, 2016, by and among the Company, its guarantor subsidiaries a party thereto, the lenders a party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint book runners and lead arrangers. The Credit Agreement replaced the Company’s existing $25,000 credit agreement with JP Morgan Chase Bank, N.A. and provides for a $100,000 revolving credit facility and a $200,000 delayed-draw term loan (together, the “Credit Facility”). To finance the Polaris SPA Transaction, on February 25, 2016, the Company drew down the full $200,000 of the term loan. Interest under these facilities accrues at a rate per annum of LIBOR plus 2.75%, subject to step-downs based on the Company’s ratio of debt to adjusted earnings before interest, taxes, depreciation, amortization, and stock compensation expense (“EBITDA”). The Company is required under the terms of the Credit Agreement to make quarterly principle payments on the term loan. For the fiscal year ending March 31, 2017, the Company is required to make principle payments of $2,500 per quarter. The Credit Agreement includes customary minimum cash, maximum debt to EBITDA and minimum fixed charge coverage covenants. The term of the Credit Agreement is five years ending February 24, 2021. At December 31, 2016, the interest rate on the Credit Facility was 3.27% and there were no borrowings under the revolving credit facility. The Credit Agreement has financial covenants that require that the Company maintain a Total Leverage Ratio, commencing on December 31, 2016, of not more than 3.25 to 1.00 for the first year of the Credit Facility, of not more than 3.00 to 1.00 for the second year of the Credit Facility, and 2.75 to 1.00 thereafter, each as determined for the four consecutive quarter period ending on each fiscal quarter (the “Reference Period”). In addition, for a period, expected to be at least one year from the completion of the Company’s closing of the Polaris SPA Transaction, until the occurrence of certain events described in the Credit Agreement, at any time when the Total Leverage Ratio exceeds 1.50 to 1.00 as of the last day of a quarter, the Company must maintain at least $30,000 in unrestricted cash, cash equivalents and certain permitted investments under the Credit Facility held in bank deposits in the U.S., and $20,000 in unrestricted cash and certain permitted investments under the Credit Facility and long-term securities investments held in accordance with the Company’s current investment policy. The financial covenants also require that the Company maintain a Fixed Charge Coverage Ratio, commencing on December 31, 2016, of not less than 1.25 to 1.00, as of the last day of any Reference Period. For purposes of these covenants, “Total Leverage Ratio” means, as of the last day of any fiscal quarter, the ratio of Funded Debt to Adjusted EBITDA for the reference period ended on such date. “Funded Debt” refers generally to total indebtedness to third-parties for borrowed money, capital leases, deferred purchase price and earn-out obligations and related guarantees and “Adjusted EBITDA” is defined as consolidated net income plus (a) (i) GAAP depreciation and amortization, (ii) non-cash equity-based compensation expenses, (iii) fees and expenses incurred during such period in connection with the Credit Facility and loans made thereunder, (iv) fees and expenses incurred during such period in connection with any permitted acquisition, (v) one-time regulatory charges, (vi) other extraordinary and non-recurring losses or expenses, and (vii) all other non-cash charges, expenses and losses for such period, minus (b) (i) extraordinary or non-recurring income or gains for such period, and (ii) any cash payments made during such period in respect of non-cash charges, expenses or losses described in clauses (a)(ii), (a)(v) and (a)(vi) above taken in a prior period, subject to other adjustments and certain caps and limits on adjustments. The Fixed Charge Coverage Ratio is calculated under the Credit Agreement generally as the ratio of Adjusted EBITDA, excluding capital expenditures made during such period (to the extent not financed with indebtedness (other than Revolving Loans), an issuance of equity interests or capital contributions, or proceeds of asset sales, the proceeds of casualty insurance used to replace or restore assets), to fixed charges (regularly scheduled consolidated interest expense paid in cash, regularly scheduled amortization payments on indebtedness in cash, income taxes paid in cash and the interest component of capital lease obligation payments), on a consolidated basis. The Credit Facility is secured by substantially all of the Company’s assets, including all intellectual property and all securities in domestic subsidiaries (other than certain domestic subsidiaries where the material assets of such subsidiaries are equity in foreign subsidiaries), subject to customary exceptions and exclusions from the collateral. All obligations under the Credit Agreement are unconditionally guaranteed by substantially all of the Company’s material direct and indirect domestic subsidiaries, with certain exceptions. These guarantees are secured by substantially all of the present and future property and assets of the guarantors, with certain exclusions. At December 31, 2016, we are in compliance with our debt covenants and have provided a quarterly certification to our lenders to that effect. We believe that we currently meet all conditions set forth in the Credit Agreement to borrow thereunder and we are not aware of any conditions that would prevent us from borrowing part or all of the remaining available capacity under the revolving credit facility at December 31, 2016 and through the date of this filing. Current portion of long-term debt The following summarizes our short-term debt balances as of: December 31, 2016 March 31, 2016 Notes outstanding under the revolving credit facility $ — $ — Term loan- current maturities Less: deferred financing costs — current ) ) Total $ $ Long-term debt, less current portion The following summarizes our long-term debt balance as of: December 31, 2016 March 31, 2016 Term loan $ $ Less: Current maturities ) ) Deferred financing costs, long-term ) ) Total $ $ In accordance with the recently adopted FASB ASU 2015-03, the Company has presented debt issuance costs in the balance sheet as a direct deduction from the carrying value of that debt liability. On July 26, 2016, the Company entered into two 12-month forward starting interest rate swap transactions and on July 28, 2016, the Company entered into a third 12-month forward starting interest rate swap transaction to mitigate Company’s interest rate risk on 50% of Company’s variable rate debt (collectively, “The Interest Rate Swap Agreements”). The Company’s objective is to limit the variability of cash flows associated with changes in LIBOR interest rate payments due on the Credit Agreement by using pay-fixed, receive-variable interest rate swaps to offset the future variable rate interest payments. The Company will recognize these transactions in accordance with ASC 815 “Derivatives and Hedging,” and have designated the swaps as cash flow hedges. The three Interest Rate Swap Agreements have an effective date of July 31, 2017 and a maturity date of July 31, 2020. The swaps have an aggregate beginning notional amount of $93,800 and hedge approximately 50% of our forecasted outstanding debt balance as of July 31, 2017. The notional amount of the swaps amortizes over the three swap periods corresponding to the quarterly principle payments on the term loan. The Interest Rate Swap Agreements require the Company to make monthly fixed interest rate payments based on the amortized notional amount at a blended weighted average rate of 1.025% and the Company will receive 1-month LIBOR on the same notional amounts. The unrealized gain associated with the 2015 Swap Agreement was $1,723 at December 31, 2016, which represents the estimated amount that the Company would receive from the counterparties in the event of an early termination. Beginning in fiscal 2009, the Company’s U.K. subsidiary entered into an agreement with an unrelated financial institution to sell, without recourse or continuing involvement, certain of its European-based accounts receivable balances from one client to such third party financial institution. During the nine months ended December 31, 2016, $16,426 of receivables were sold under the terms of the financing agreement. Fees paid pursuant to this agreement were immaterial during the three and nine months ended December 31, 2016. No amounts were due as of December 31, 2016, but the Company may elect to use this program again in future periods. However, the Company cannot provide any assurances that this or any other financing facilities will be available or utilized in the future.

Pensions and post-retirement be

Pensions and post-retirement benefits	9 Months Ended
	Dec. 31, 2016
Pensions and post-retirement benefits
Pensions and post-retirement benefits	(12) Pensions and post-retirement benefits The Company has noncontributory defined benefit plans covering its employees in India and Sri Lanka as mandated by the Indian and Sri Lankan governments. The following tables provide information regarding pension expense recognized: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Components of net periodic pension cost Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization past service cost Amortization of actuarial loss Net periodic pension cost $ $ $ The Company expects to contribute approximately $1,863 in cash to the gratuity plans during the fiscal year ending March 31, 2017. During the nine months ended December 31, 2016, the Company made cash contributions of $1,224 towards the plans for the fiscal year 2017.

Restructuring

Restructuring	9 Months Ended
	Dec. 31, 2016
Restructuring
Restructuring	(13) Restructuring During the three months ending December 31, 2016, the Company implemented certain cost saving and restructuring initiatives related to a workforce reduction. During the three months ended December 31, 2016, the Company incurred $1,888, primarily related to one-time termination benefits, which have been included in selling, general and administrative expenses in the consolidated statements of income. The Company expects to incur additional restructuring costs of approximately $800 in the three months ended March 31, 2017. The Company expects to complete these initiatives by March 31, 2017. The following table summarizes the restructuring charges during the period ending December 31, 2016 December 31, 2016 Balance at April 1, 2016 $ — Provisions Cash Payments ) Balance at December 31, 2016 $

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	9 Months Ended
	Dec. 31, 2016
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss	(14) Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive income (loss) by component were as follows for the three and nine months ended December 31, 2016 and 2015: Three Months Ended Nine Months Ended Accumulated Other Comprehensive Income (Loss) 2016 2015 2016 2015 Investment securities Beginning balance $ ) $ ) $ $ ) Other comprehensive income (loss) (OCI) before reclassifications net of tax of $83, $0, $48 and $0 ) ) ) Reclassifications from OCI to other income, net of tax of $0, $0, $3 and $0 — ) (Less) : Noncontrolling interests, net of tax ) — ) — Comprehensive income (loss) on investment securities, net of tax of $83, $0, $51 and $0 ) ) ) Closing Balance $ ) $ ) $ ) $ ) Currency Translation Adjustments Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications ) ) ) ) (Less): Noncontrolling interests, net of tax — — Comprehensive income (loss) on currency translation adjustment ) ) Closing Balance $ ) $ ) $ ) $ ) Cash Flow Hedges Beginning balance $ $ ) $ $ OCI before reclassifications net of tax of $1,176, $(488), $3,577 and $657 ) Reclassifications from OCI to - Revenue, net of tax of $(322), $0, $(834) and $0 ) — ) — - Costs of revenue, net of tax of $(340), $(52), $(620) and $(16) ) ) ) ) - Selling, general and administrative expenses, net of tax of $(198), $(32), $(382) and $(14) ) ) ) ) (Less): Noncontrolling interests, net of tax — — Comprehensive income (loss) on cash flow hedges, net of tax of $316, $(572), $1,741 and $627 ) Closing Balance $ $ $ $ Benefit plans Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications net of tax of $0 for all periods $ — $ — $ $ — Reclassifications from OCI for prior service credit (cost) to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods — — Reclassifications from OCI for net actuarial gain (loss) amortization to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods Other adjustments ) (Less): Noncontrolling interests, net of tax ) — ) — Comprehensive income (loss) on benefit plans, net of tax of $0 for all periods Closing Balance $ ) $ ) $ ) $ ) Accumulated other comprehensive loss at December 31, 2016 $ ) $ ) $ ) $ )

Subsequent Events

Subsequent Events	9 Months Ended
	Dec. 31, 2016
Subsequent Events
Subsequent Events	(15) Subsequent Events On January 10, 2017, the Company purchased multiple foreign currency forward contracts designed to hedge fluctuation in the U.K. pound sterling (“GBP”) against the U.S. dollar, the Swedish Krona (“SEK”) against the U.S. dollar and the Euro against the U.S. dollar, each of which will expire on various dates during the period ending March 31, 2017. The GBP contracts have an aggregate notional amount of approximately £9,244 (approximately $11,252), the SEK contracts have an aggregate notional amount of approximately SEK 8,585 (approximately $958) and the Euro contracts have an aggregate notional amount of approximately EUR 553 (approximately $584). The weighted average U.S. dollar settlement rate associated with the GBP contracts is $1.217, the weighted average U.S dollar settlement rate associated with the SEK contracts is approximately $0.112, and the weighted average U.S. dollar settlement rate associated with the Euro contracts is approximately $1.055. On January 11, 2017, the Company’s majority owned subsidiary, Polaris purchased multiple foreign currency forward contracts designed to hedge fluctuation in the Indian rupee against the U.S. dollar. The U.S dollar contracts have an aggregate notional amount of approximately 286,155 Indian rupees (approximately $4,000) and have an average settlement rate of 71.539 Indian rupees. These contracts will expire at various dates during the 15 month period ending on March 28, 2018.

Unaudited Interim Financial I22

Unaudited Interim Financial Information (Policies)	9 Months Ended
	Dec. 31, 2016
Unaudited Interim Financial Information
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles and Article 10 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, and should be read in conjunction with the Company’s audited consolidated financial statements (and notes thereto) for the fiscal year ended March 31, 2016 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 27, 2016. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation of the accompanying unaudited consolidated financial statements have been included, and all material adjustments are of a normal and recurring nature. Operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire fiscal year.
Principles of Consolidation	Principles of Consolidation The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Virtusa Corporation and all of its subsidiaries that are directly or indirectly more than 50% owned or controlled. When the Company does not have a controlling interest in an entity, but exerts a significant influence on the entity, the Company applies the equity method of accounting. The consolidated financial statements reflect the accounts of the Company and its direct and indirect subsidiaries, Virtusa Consulting Services Private Limited, Virtusa Software Services Private Limited, Virtusa Technologies (India) Private Limited, Polaris Consulting & Services Limited and Optimus Global Services Limited, each organized and located in India; Virtusa (Private) Limited, organized and located in Sri Lanka; Virtusa UK Limited and Polaris Consulting & Services Limited, each organized and located in the United Kingdom; Virtusa Securities Corporation, a Massachusetts securities corporation; Apparatus, Inc. organized and located in Indiana; Virtusa International, B.V. and Polaris Software Lab B.V., each organized and located in the Netherlands; Virtusa Hungary Kft. and Polaris Consulting & Services, Kft., each organized and located in Hungary; Virtusa Germany GmbH and Polaris Software Lab GmbH, each organized and located in Germany; Virtusa Switzerland GmbH and Polaris Consulting & Services SA, each organized and located in Switzerland; Virtusa Singapore Private Limited and Polaris Consulting & Services Pte Limited, each organized and located in Singapore; Virtusa Malaysia Private Limited and Polaris Consulting & Services, SND BHD, each organized and located in Malaysia; Virtusa Austria GmbH, organized and located in Austria; Virtusa Philippines Inc., organized and located in the Philippines; Virtusa Sweden AB organized and located in Sweden; Virtusa Canada, Inc. and Polaris Consulting & Services Inc, each organized and located in Canada; Polaris Consulting & Services Ireland Limited, organized and located in Ireland; Polaris Consulting & Services Japan K.K., organized and located in Japan; Polaris Consulting & Services Pty Ltd., organized and located in Australia; Polaris Consulting & Services FZ-LLC, organized and located in the United Arab Emirates; Polaris Software Lab (Shanghai) Limited, organized and located in China. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including the recoverability of tangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management reevaluates these estimates on an ongoing basis. The most significant estimates relate to the recognition of revenue and profits based on the percentage of completion method of accounting for fixed price contracts, share based compensation, income taxes, including reserves for uncertain tax positions, deferred taxes and liabilities, intangible assets, contingent consideration and valuation of financial instruments, including derivative contracts and investments. Management bases its estimates on historical experience and on various other factors and assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated financial statements.
Fair Value of Financial Instruments	Fair Value of Financial Instruments At December 31, 2016 and March 31, 2016, the carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, unbilled accounts receivable, restricted cash, accounts payable, accrued employee compensation and benefits and other accrued expenses and long-term debt, approximate their fair values due to the nature of the items. See Note 5 of the notes to our financial statements for a discussion of the fair value of the Company’s other financial instruments.
Recent accounting pronouncements	Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2018. Early application is permitted but not before periods beginning on or after January 1, 2017. In March, April and May 2016, the FASB issued updates to the new revenue standard to clarify the implementation guidance on principal versus agent considerations for reporting revenue gross versus net, identifying performance obligations, accounting for licenses of intellectual property, transition, contract modifications, collectability, non-cash consideration and presentation of sales and other similar taxes with the same effective date. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. In January 2016, the FASB issued an update (ASU 2016-01) to the standard on financial instruments. The update significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The update also amends certain disclosure requirements. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Upon adoption, entities will be required to make a cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective. However, the specific guidance on equity securities without readily determinable fair value will apply prospectively to all equity investments that exist as of the date of adoption. Early adoption of certain sections of this update is permitted. The Company is currently evaluating the effect the new standard will have on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued as update (ASU 2016-02) to the standard on leases to increase transparency and comparability among organizations. The new standard replaces the existing guidance on leases and requires the lessee to recognize a right-of-use asset and a lease liability for all leases with lease terms equal to or greater than twelve months. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize total lease expense on a straight-line basis. For public business entities this standard is effective for the annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption of this new standard is permitted. Entities will be required to use a modified retrospective transition which provides for certain practical expedients. The Company is currently evaluating the effect the new standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued an update (ASU 2016-05) to the standard on derivatives and hedging on the effect of derivative contract novations on existing hedge accounting relationships. As it relates to derivative instruments, novation refers to replacing one of the parties to a derivative instrument with a new party, which may occur for a variety of reasons such as: financial institution mergers, intercompany transactions, an entity exiting a particular derivatives business or relationship, or because of laws or regulatory requirements. The update clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require designation of that hedge accounting relationship provided that all other hedge accounting criteria continue to be met. The update is effective for fiscal years, and interim periods within those fiscal years, beginning on or after January 1, 2017. Upon adoption, the entities can choose to apply on either a prospective basis or a modified retrospective basis. Early adoption of this update is permitted. The adoption of this guidance is not expected to have a material impact on the consolidated financial statements. In March 2016, the FASB issued an update (ASU 2016-09) to the standard on Compensation—Stock Compensation, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. Upon adoption, entities will be required to apply a modified retrospective, prospective or retrospective transition method depending on the specific section of the guidance being adopted. The Company is currently evaluating the effect the update will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Measurement of Credit Losses on Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments. This standard update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of this new standard will have on its consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This update is intended to reduce diversity in practice in how certain cash receipts and payments are classified in the statement of cash flows. This standard update addresses eight specific cash flow issues, including debt prepayment or extinguishment costs, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, and distributions from certain equity method investees. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires application using a retrospective transition method. The adoption of this guidance is not expected to have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, an update to the standard on income taxes. This new standard requires the recognition of current and deferred income taxes when an intra-entity transfer of assets other than inventory occurs. The update is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2017. Early adoption is permitted in the first interim period. Upon adoption, the entities will be required to use a modified retrospective transition approach. The adoption of this guidance is not expected to have a material impact on the consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (Topic 230), which is intended to reduce diversity in practice on how changes in restricted cash are classified and presented in the statement of cash flows. This ASU requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The amendments in this Update should be applied using a retrospective transition method to each period presented.

Earnings per Share (Tables)

Earnings per Share (Tables)	9 Months Ended
	Dec. 31, 2016
Earnings per Share
Schedule of computation of basic and diluted earnings per share	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Numerators: Net income available to Virtusa common stockholders $ $ $ $ Denominators: Weighted average common shares outstanding Dilutive effect of employee stock options and unvested restricted stock Dilutive effect of stock appreciation rights — Weighted average shares-diluted Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $

Investment Securities (Tables)

Investment Securities (Tables)	9 Months Ended
	Dec. 31, 2016
Investment Securities
Schedule of investment securities	The following is a summary of investment securities at December 31, 2016: Amortized Gross Gross Fair Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current ) Preference shares: Current — — Non-current — ) Agency and short-term notes: Current — ) Non-current — ) Mutual funds: Current — Commercial paper: Current — — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $ The following is a summary of investment securities at March 31, 2016: Amortized Gross Gross Fair Available-for-sale securities: Corporate bonds: Current $ $ $ ) $ Non-current ) Preference shares: Non-current — — Agency and short-term notes: Current — Non-current ) Mutual funds: Current ) Depository receipts: Current — Time deposits: Current — — Total available-for-sale securities $ $ $ ) $
Schedule of proceeds from sales of available-for-sale investment securities and the gross gains and losses that have been included in earnings	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Proceeds from sales of available-for-sale investment securities $ $ $ $ Gross gains $ $ — $ $ Gross losses — — — — Net realized gains on sales of available-for-sale investment securities $ $ — $ $

Fair Value of Financial Instr25

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Dec. 31, 2016
Fair Value of Financial Instruments
Schedule of financial assets and liabilities measured at fair value on a recurring basis	The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ $ — $ Available-for-sales securities—non-current — — Foreign currency derivative contracts — — Interest Rate Swap Contracts — — Total assets $ — $ $ — $ Liabilities: Foreign currency derivative contracts $ — $ $ — Interest Rate Swap Contracts — — — — Total liabilities $ — $ $ — $ The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2016: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ $ — $ Available-for-sales securities—non-current — — Foreign currency derivative contracts — — Total assets $ — $ $ — $ Liabilities: Foreign currency derivative contracts $ — $ $ — Contingent consideration — — Total liabilities $ — $ $ $
Schedule of changes in fair value of the Company's Level 3 financial liabilities	Level 3 Balance at April 1, 2016 $ Contingent consideration recognized in earnings Payments made during the period ) Balance at December 31, 2016 $ —

Derivative Financial Instrume26

Derivative Financial Instruments (Tables)	9 Months Ended
	Dec. 31, 2016
Derivative Financial Instruments
Schedule of fair value of derivative instruments included in the consolidated balance sheets	December 31, 2016 March 31, 2016 Foreign currency exchange contracts: Other current assets $ $ Other long-term assets $ $ Accrued expenses and other $ $ Long-term liabilities $ $ December 31, 2016 March 31, 2016 Interest rate swap contracts: Other long-term assets $ $ —
Schedule of effect of the Company's foreign currency exchange contracts on the consolidated financial statements	Amount of Gain or (Loss) Recognized in AOCI on Derivative Derivatives Designated as Cash Flow Three Months Ended December 31, Nine Months Ended December 31, Hedging Relationships 2016 2015 2016 2015 Foreign currency exchange contracts $ $ $ $ ) Interest rate swaps $ $ — $ $ — Location of Gain Reclassified Amount of Gain or (Loss) Reclassified from AOCI into Income from AOCI into Income (Effective Three Months Ended December 31, Nine Months Ended December 31, Portion) 2016 2015 2016 2015 Revenue $ $ — $ $ — Costs of revenue $ $ ) $ $ Operating expenses $ $ ) $ $ Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not Designated Location of Gain or (Loss) Three Months Ended Nine Months Ended as Hedging Instrument Recognized in Income on Derivatives 2016 2015 2016 2015 Foreign currency exchange contracts Foreign currency transaction gains (losses) $ — $ $ ) $ ) Revenue $ ) $ $ ) $ Costs of revenue $ ) $ ) $ ) $ ) Selling, general and administrative expenses $ ) $ ) $ ) $ )

Acquisitions (Tables)

Acquisitions (Tables)	9 Months Ended
	Dec. 31, 2016
Polaris
Acquisitions
Summary of the purchase price allocation	Amount Useful Life Consideration Transferred: Cash paid at closing $ Less: Cash acquired ) Total purchase price, net of cash acquired $ Acquisition-related costs $ Assets and liabilities Cash and cash equivalents $ Accounts receivable and unbilled receivable Short term investments Other current assets Property and equipment Long term investments Long term assets Goodwill Customer relationships 10 - 15 years Trademark 2 years Accounts Payable ) Deferred revenue ) Accrued expenses and other current liabilities ) Deferred income taxes ) Long term liabilities ) Noncontrolling interest ) Total purchase price Less: Cash acquired ) Total purchase price, net of cash acquired $

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Dec. 31, 2016
Goodwill and Intangible Assets
Schedule of changes in goodwill	Amount Balance at April 1, 2016 $ Preliminary purchase price adjustment Foreign currency translation adjustments ) Balance at December 31, 2016 $
Schedule of Company's intangible asset carrying amounts acquired and amortization	The following are details of the Company’s intangible asset carrying amounts acquired and amortization at December 31, 2016. Weighted Average Gross Carrying Accumulated Net Carrying Amortizable intangible assets: Customer relationships $ $ $ Trademark Technology $ $ $

Concentration of Revenue and 29

Concentration of Revenue and Assets (Tables)	9 Months Ended
	Dec. 31, 2016
Concentration of Revenue and Assets
Schedule of revenue attributed to geographic areas based on location of the client	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Client revenue: North America $ $ $ $ Europe Rest of world Consolidated revenue $ $ $ $
Schedule of long-lived assets, net of accumulated depreciation and amortization attributed to geographic areas based on location of assets	December 31, March 31, Long-lived assets, net of accumulated depreciation and amortization: North America $ $ Asia Europe and others Consolidated long-lived assets, net $ $
Schedule of revenue from significant clients as a percentage of Company's consolidated revenue	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Customer 1 % % % %

Debt (Tables)

Debt (Tables)	9 Months Ended
	Dec. 31, 2016
Debt
Summary of short-term debt	December 31, 2016 March 31, 2016 Notes outstanding under the revolving credit facility $ — $ — Term loan- current maturities Less: deferred financing costs — current ) ) Total $ $
Summary of long-term debt	December 31, 2016 March 31, 2016 Term loan $ $ Less: Current maturities ) ) Deferred financing costs, long-term ) ) Total $ $

Pensions and post-retirement 31

Pensions and post-retirement benefits (Tables)	9 Months Ended
	Dec. 31, 2016
Pensions and post-retirement benefits
Schedule of pension expense recognized	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Components of net periodic pension cost Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization past service cost Amortization of actuarial loss Net periodic pension cost $ $ $

Restructuring (Tables)

Restructuring (Tables)	9 Months Ended
	Dec. 31, 2016
Restructuring
Summary of restructuring charges	December 31, 2016 Balance at April 1, 2016 $ — Provisions Cash Payments ) Balance at December 31, 2016 $

Accumulated Other Comprehensi33

Accumulated Other Comprehensive Loss (Tables)	9 Months Ended
	Dec. 31, 2016
Accumulated Other Comprehensive Loss
Schedule of changes in accumulated other comprehensive income (loss) by component	Three Months Ended Nine Months Ended Accumulated Other Comprehensive Income (Loss) 2016 2015 2016 2015 Investment securities Beginning balance $ ) $ ) $ $ ) Other comprehensive income (loss) (OCI) before reclassifications net of tax of $83, $0, $48 and $0 ) ) ) Reclassifications from OCI to other income, net of tax of $0, $0, $3 and $0 — ) (Less) : Noncontrolling interests, net of tax ) — ) — Comprehensive income (loss) on investment securities, net of tax of $83, $0, $51 and $0 ) ) ) Closing Balance $ ) $ ) $ ) $ ) Currency Translation Adjustments Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications ) ) ) ) (Less): Noncontrolling interests, net of tax — — Comprehensive income (loss) on currency translation adjustment ) ) Closing Balance $ ) $ ) $ ) $ ) Cash Flow Hedges Beginning balance $ $ ) $ $ OCI before reclassifications net of tax of $1,176, $(488), $3,577 and $657 ) Reclassifications from OCI to - Revenue, net of tax of $(322), $0, $(834) and $0 ) — ) — - Costs of revenue, net of tax of $(340), $(52), $(620) and $(16) ) ) ) ) - Selling, general and administrative expenses, net of tax of $(198), $(32), $(382) and $(14) ) ) ) ) (Less): Noncontrolling interests, net of tax — — Comprehensive income (loss) on cash flow hedges, net of tax of $316, $(572), $1,741 and $627 ) Closing Balance $ $ $ $ Benefit plans Beginning balance $ ) $ ) $ ) $ ) OCI before reclassifications net of tax of $0 for all periods $ — $ — $ $ — Reclassifications from OCI for prior service credit (cost) to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods — — Reclassifications from OCI for net actuarial gain (loss) amortization to: - Costs of revenue, net of tax of $0 for all periods - Selling, general and administrative expenses, net of tax of $0 for all periods Other adjustments ) (Less): Noncontrolling interests, net of tax ) — ) — Comprehensive income (loss) on benefit plans, net of tax of $0 for all periods Closing Balance $ ) $ ) $ ) $ ) Accumulated other comprehensive loss at December 31, 2016 $ ) $ ) $ ) $ )

Earnings per Share (Details)

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Numerators:
Net income available to Virtusa common stockholders	$ 4,435	$ 11,313	$ 1,393	$ 32,512
Denominators:
Weighted average common shares outstanding (in shares)	29,704,526	29,287,968	29,602,331	29,191,578
Dilutive effect of employee stock options and unvested restricted stock (in shares)	447,064	775,801	519,414	808,640
Dilutive effect of stock appreciation rights (in shares)		1,174	7,633	2,462
Weighted average shares-diluted (in shares)	30,151,590	30,064,943	30,129,378	30,002,680
Basic earnings per share (in dollars per share)	$ 0.15	$ 0.39	$ 0.05	$ 1.11
Diluted earnings per share (in dollars per share)	$ 0.15	$ 0.38	$ 0.05	$ 1.08
Unvested restricted stock awards and unvested restricted stock units issuable and options excluded from the calculations of diluted earnings per share (in shares)	649,414	25,702	466,936	10,413

Investment Securities (Details)

Investment Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Mar. 31, 2016
Investment Securities
Amortized Cost	$ 103,336		$ 103,336		$ 82,712
Gross Unrealized Gains	247		247		130
Gross Unrealized Losses	(305)		(305)		(108)
Fair Value	103,278		103,278		82,734
Proceeds from sales of available-for-sale investment securities and the gross gains and losses
Proceeds from sales of available-for-sale investment securities	24,249	$ 42,906	107,004	$ 77,511
Gross gains	107		850	1
Net realized gains on sales of available-for-sale investment securities	107		850	$ 1
Corporate bonds | Current
Investment Securities
Amortized Cost	37,352		37,352		26,662
Gross Unrealized Gains	4		4		7
Gross Unrealized Losses	(56)		(56)		(10)
Fair Value	37,300		37,300		26,659
Corporate bonds | Non-current
Investment Securities
Amortized Cost	19,442		19,442		22,187
Gross Unrealized Gains	4		4		45
Gross Unrealized Losses	(95)		(95)		(64)
Fair Value	19,351		19,351		22,168
Preference shares | Current
Investment Securities
Amortized Cost	1,558		1,558
Fair Value	1,558		1,558
Preference shares | Non-current
Investment Securities
Amortized Cost	1,744		1,744		4,149
Gross Unrealized Losses	(148)		(148)
Fair Value	1,596		1,596		4,149
Agency and short-term notes | Current
Investment Securities
Amortized Cost	1,022		1,022		1,000
Gross Unrealized Gains					1
Gross Unrealized Losses	(2)		(2)
Fair Value	1,020		1,020		1,001
Agency and short-term notes | Non-current
Investment Securities
Amortized Cost	1,604		1,604		2,500
Gross Unrealized Gains					1
Gross Unrealized Losses	(4)		(4)		(1)
Fair Value	1,600		1,600		2,500
Mutual funds | Current
Investment Securities
Amortized Cost	21,892		21,892		17,309
Gross Unrealized Gains	239		239		9
Gross Unrealized Losses					(33)
Fair Value	22,131		22,131		17,285
Commercial paper | Current
Investment Securities
Amortized Cost	2,987		2,987
Fair Value	2,987		2,987
Depository receipts | Current
Investment Securities
Amortized Cost					414
Gross Unrealized Gains					67
Fair Value					481
Time deposits | Current
Investment Securities
Amortized Cost	15,735		15,735		8,491
Fair Value	$ 15,735		$ 15,735		$ 8,491

Fair Value of Financial Instr36

Fair Value of Financial Instruments - Financial assets and liabilities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Mar. 31, 2016
Level 3
Liabilities:
Total liabilities		$ 839
Recurring
Investments:
Available-for-sales securities-current	$ 80,731	53,917
Available-for-sales securities-non-current	22,547	28,817
Foreign currency derivative contracts	10,875	5,694
Interest Rate Swap Contracts	1,723
Total assets	115,876	88,428
Liabilities:
Foreign currency derivative contracts	50	560
Contingent consideration		839
Total liabilities	50	1,399
Recurring | Level 2
Investments:
Available-for-sales securities-current	80,731	53,917
Available-for-sales securities-non-current	22,547	28,817
Foreign currency derivative contracts	10,875	5,694
Interest Rate Swap Contracts	1,723
Total assets	115,876	88,428
Liabilities:
Foreign currency derivative contracts	50	560
Total liabilities	$ 50	560
Recurring | Level 3
Liabilities:
Contingent consideration		839
Total liabilities		$ 839

Fair Value of Financial Instr37

Fair Value of Financial Instruments - Level 3 financial liabilities (Details) - Level 3 $ in Thousands	9 Months Ended
	Dec. 31, 2016USD ($)
Changes in fair value of the Company's Level 3 financial liabilities
Balance at the beginning of the period	$ 839
Contingent consideration recognized in earnings	33
Payments made during the period	$ (872)

Derivative Financial Instrume38

Derivative Financial Instruments - Derivatives (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2016USD ($)itemcontract	Dec. 31, 2015USD ($)	Mar. 31, 2016USD ($)
Derivative Financial Instruments
Number of parties under derivative | contract	3
Foreign currency exchange contract
Derivative Financial Instruments
Number of hedging programs maintained | item	4
Derivatives designated as hedging instrument | Foreign currency exchange contract
Derivative Financial Instruments
Period hedged by Cash Flow Program	24 months
Additional period after which the contract is deemed ineffective	2 months
Maximum outstanding term of derivative instruments	18 months
U.S. dollar notional value	$ 169,112		$ 266,706
Unrealized net gains related to derivative instruments expected to be reclassified from AOCI into earnings during the next 12 months	10,699
Derivatives designated as hedging instrument | Foreign currency exchange contract | Cash flow hedges | Reclassification out of accumulated other comprehensive income
Derivative Financial Instruments
Unrealized net gains related to derivative instruments expected to be reclassified from AOCI into earnings during the next 12 months	$ 0	$ 0
Derivatives not designated as hedging instrument | Foreign currency exchange contract
Derivative Financial Instruments
Maturity period of Balance Sheet Program derivatives	30 days
Maximum outstanding term of derivative instruments	92 days
Polaris | Derivatives designated as hedging instrument | Foreign currency exchange contract
Derivative Financial Instruments
Period hedged by Cash Flow Program	18 months

Derivative Financial Instrume39

Derivative Financial Instruments - Interest rate swaps (Details) $ in Thousands	Jul. 28, 2016contract	Jul. 26, 2016contract	Feb. 25, 2016	Dec. 31, 2016USD ($)
Forward starting interest rate swaps
Interest rate cash flow hedges
Number of derivative contracts | contract	1	2
Derivative, term of contract	12 months	12 months
Percentage of variable debt	50.00%	50.00%
Unrealized gain on derivative | $				$ 1,723
JPM | Credit facility
Interest rate cash flow hedges
First year maximum leverage ratio			325.00%
Second year maximum leverage ratio			300.00%
Maximum leverage ratio for four consecutive quarter ending on each fiscal quarter			275.00%
Minimum fixed charge coverage ratio as of last day of any reference period			125.00%

Derivative Financial Instrume40

Derivative Financial Instruments - Interest rate swaps at effective date (Details) - Forward starting interest rate swaps $ in Thousands	Jul. 31, 2017USD ($)contract	Jul. 28, 2016contract	Jul. 26, 2016contract
Interest rate cash flow hedges
Number of derivative contracts		1	2
Percentage of variable debt		50.00%	50.00%
Forecast
Interest rate cash flow hedges
Number of derivative contracts	3
Aggregate notional amount | $	$ 93,800
Percentage of variable debt	50.00%
Amortized notional amount at a blended weighted average rate	1.025%

Derivative Financial Instrume41

Derivative Financial Instruments - Foreign currency exchange contracts designated as hedging instruments (Details) - Derivatives designated as hedging instrument - Foreign currency exchange contract - USD ($) $ in Thousands	Dec. 31, 2016	Mar. 31, 2016
Foreign currency exchange and interest rate swap contracts
Other current assets	$ 9,748	$ 3,706
Other long-term assets	1,127	1,988
Accrued expenses and other	46	278
Long-term liabilities	$ 4	$ 282

Derivative Financial Instrume42

Derivative Financial Instruments - Interest rate swap contracts designated as hedging instruments (Details) $ in Thousands	Dec. 31, 2016USD ($)
Derivatives designated as hedging instrument | Forward starting interest rate swaps
Foreign currency exchange and interest rate swap contracts
Other long-term assets	$ 1,723

Derivative Financial Instrume43

Derivative Financial Instruments - Effect of foreign currency exchange contracts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Revenue
Derivative Financial Instruments
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	$ 932		$ 2,409
Costs of revenue
Derivative Financial Instruments
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	1,505	$ (47)	2,877	$ 283
Operating expenses
Derivative Financial Instruments
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	877	(31)	1,722	140
Derivatives designated as hedging instrument | Foreign currency exchange contract
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in AOCI on Derivative (Effective Portion)	1,947	1,913	11,807	(2,182)
Derivatives designated as hedging instrument | Forward starting interest rate swaps
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in AOCI on Derivative (Effective Portion)	1,826		1,723
Derivatives not designated as hedging instrument | Foreign currency exchange contract | Foreign currency transaction gains (losses)
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in Income on Derivatives		127	(180)	(915)
Derivatives not designated as hedging instrument | Foreign currency exchange contract | Revenue
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in Income on Derivatives	(94)	455	(10)	185
Derivatives not designated as hedging instrument | Foreign currency exchange contract | Costs of revenue
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in Income on Derivatives	(11)	(254)	(50)	(129)
Derivatives not designated as hedging instrument | Foreign currency exchange contract | Selling, general and administrative expenses
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in Income on Derivatives	$ (42)	$ (46)	$ (55)	$ (35)

Acquisitions - Polaris (Details

Acquisitions - Polaris (Details) ₨ in Thousands, $ in Thousands	Dec. 14, 2016USD ($)	Dec. 13, 2016	Apr. 06, 2016INR (₨)shares	Apr. 06, 2016USD ($)shares	Apr. 05, 2016	Mar. 03, 2016INR (₨)shares	Mar. 03, 2016USD ($)shares	Dec. 31, 2016	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Mar. 31, 2016USD ($)
Consideration Transferred:
Total purchase price, net of cash acquired									$ 3,460	$ 37,167
Polaris | Public Offering
Acquisitions
Ownership interest prior to the sale offer (as a percent)		78.60%
Ownership interest of basic shares (as a percent)	74.90%	78.60%
Ownership interest sold through open offer (as a percent)								3.70%
Proceeds from issuance of common stock	$ 7,645
Brokerage fees and taxes	188
Professional and legal fees and expense	$ 409
Virtusa Consulting Services Private Limited | Polaris
Acquisitions
Total consideration			₨ 5,935,260	$ 89,147
Ownership interest of diluted shares (as a percent)			77.70%	77.70%	51.70%
Ownership interest of basic shares (as a percent)			78.80%	78.80%	52.90%
Period to sell			1 year	1 year
Stock ownership percentage threshold			75.00%	75.00%
Increase in goodwill resulting from changes in noncontrolling interest									4,354
Increase in goodwill resulting from changes in deferred tax liabilities									9,386
Decrease in goodwill resulting from changes related to certain assets									4,624
Decrease in goodwill resulting from changes related to certain accruals									$ 317
Consideration Transferred:
Cash paid at closing							$ 168,257
Less: Cash acquired							(40,782)
Total purchase price, net of cash acquired							127,475
Acquisition-related costs							$ 9,813
Virtusa Consulting Services Private Limited | Polaris | Certain Polaris Shareholders
Acquisitions
Number of shares purchased | shares						53,133,127	53,133,127
Shares acquired (as a percent)						51.70%	51.70%
Consideration Transferred:
Cash paid at closing						₨ 11,391,365	$ 168,257
Virtusa Consulting Services Private Limited | Polaris | Polaris Public Shareholders
Acquisitions
Number of shares purchased | shares			26,719,942	26,719,942
Shares acquired (as a percent)			26.00%	26.00%
Escrow deposit											$ 89,220

Acquisitions - Polaris - Assets

Acquisitions - Polaris - Assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands	Mar. 03, 2016	Dec. 31, 2016	Mar. 31, 2016
Assets and liabilities
Goodwill		$ 204,762	$ 200,424
Virtusa Consulting Services Private Limited | Polaris
Assets and liabilities
Cash and cash equivalents	$ 40,782
Accounts receivable and unbilled receivable	71,844
Short term investments	17,695
Other current assets	13,912
Property and equipment	79,091
Long term investments	8,396
Long term assets	12,500
Goodwill	129,542
Accounts Payable	(42,676)
Deferred revenue	(5,117)
Accrued expenses and other current liabilities	(12,062)
Deferred income taxes	(21,683)
Long term liabilities	(7,340)
Noncontrolling interest	(152,027)
Total purchase price	168,257
Less: Cash acquired	(40,782)
Total purchase price, net of cash acquired	127,475
Customer relationships | Virtusa Consulting Services Private Limited | Polaris
Assets and liabilities
Intangibles assets	33,000
Trademark | Virtusa Consulting Services Private Limited | Polaris
Assets and liabilities
Intangibles assets	$ 2,400

Acquisitions - Polaris - Asse46

Acquisitions - Polaris - Assets acquired and liabilities assumed, useful life (Details)	1 Months Ended	9 Months Ended
	Mar. 31, 2016	Dec. 31, 2016
Acquisitions
Weighted Average Useful Life		10 years 3 months 18 days
Customer relationships
Acquisitions
Weighted Average Useful Life		10 years 9 months 18 days
Customer relationships | Virtusa Consulting Services Private Limited | Polaris | Minimum
Acquisitions
Weighted Average Useful Life	10 years
Customer relationships | Virtusa Consulting Services Private Limited | Polaris | Maximum
Acquisitions
Weighted Average Useful Life	15 years
Trademark
Acquisitions
Weighted Average Useful Life		2 years 1 month 6 days
Trademark | Virtusa Consulting Services Private Limited | Polaris
Acquisitions
Weighted Average Useful Life	2 years

Acquisitions - Polaris - Line o

Acquisitions - Polaris - Line of credit agreement (Details) - Virtusa Consulting Services Private Limited - Polaris - USD ($) $ in Thousands	Feb. 25, 2016	Mar. 03, 2016
Held for sale | Net assets acquired from Polaris, held for sale
Acquisitions
Net assets acquired		$ 300
Delayed-draw term loan | JPM
Acquisitions
Drawdown of loan facility	$ 200,000

Goodwill and Intangible Asset48

Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2016USD ($)segment
Goodwill:
Number of operating segments | segment	1
Changes in goodwill
Balance at the beginning of the period	$ 200,424
Preliminary purchase price adjustment	8,797
Foreign currency translation adjustments	(4,459)
Balance at the end of the period	204,762
Acquisition costs and goodwill deductible for tax purposes	74,073
Trade Tech and Polaris
Changes in goodwill
Acquisition costs and goodwill not deductible for tax purposes	$ 142,577

Goodwill and Intangible Asset49

Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2016	Mar. 31, 2016
Intangible Assets
Weighted Average Useful Life	10 years 3 months 18 days
Gross Carrying Amount	$ 83,811
Accumulated Amortization	24,701
Net Carrying Amount	$ 59,110	$ 66,846
Customer relationships
Intangible Assets
Weighted Average Useful Life	10 years 9 months 18 days
Gross Carrying Amount	$ 80,466
Accumulated Amortization	23,427
Net Carrying Amount	$ 57,039
Trademark
Intangible Assets
Weighted Average Useful Life	2 years 1 month 6 days
Gross Carrying Amount	$ 2,845
Accumulated Amortization	1,146
Net Carrying Amount	$ 1,699
Technology
Intangible Assets
Weighted Average Useful Life	5 years
Gross Carrying Amount	$ 500
Accumulated Amortization	128
Net Carrying Amount	$ 372

Income Taxes (Details)

Income Taxes (Details) $ in Thousands	Mar. 31, 2014facility	Dec. 31, 2016USD ($)a	Dec. 31, 2015	Dec. 31, 2016USD ($)aitem	Dec. 31, 2015USD ($)	Mar. 31, 2016USD ($)	Mar. 31, 2014	Mar. 31, 2011subsidiary	Mar. 31, 2010subsidiary	Mar. 31, 2009	Mar. 31, 2011subsidiary
Income Taxes
Effective tax rate (as a percent)		(34.30%)	28.30%	(44.30%)	27.20%
Total liability for unrecognized tax benefits which would impact the annual effective rate, if realized		$ 6,576		$ 6,576		$ 6,693
Increase (decrease) in unrecognized tax benefits				(117)	$ 100
Unremitted earnings from foreign subsidiaries		360,220		360,220
Cash, short-term investments and long-term investments available for distribution if not indefinitely reinvested		$ 144,676		$ 144,676
Hyderabad
Income Taxes
Number of export oriented units created | subsidiary									1
Bangalore
Income Taxes
Number of export oriented units created | subsidiary								1
India
Income Taxes
Number of export oriented units created | subsidiary											2
India | Indian operations in areas designated as a SEZ
Income Taxes
Number of development centers operated | item				2
India | Indian operations in areas designated as a SEZ | Hyderabad
Income Taxes
Parcel of land (in acres) | a		6.3		6.3
Consecutive period of income tax exemption				10 years
Income tax benefits total eligibility period				15 years
India | Indian operations in areas designated as a SEZ | Bangalore and Pune
Income Taxes
Number of facilities | facility	2
India | Virtusa Consulting Services Private Limited
Income Taxes
Current corporate income tax rate				34.60%
Sri Lanka | Virtusa (Private) Limited
Income Taxes
Income tax exemption period				12 years
Maximum | India | Indian operations in areas designated as a SEZ | Hyderabad
Income Taxes
Income tax exemption period						15 years
Maximum | India | Indian operations in areas designated as a SEZ | Bangalore
Income Taxes
Income tax exemption period							15 years
Maximum | India | Indian operations in areas designated as a SEZ | Pune
Income Taxes
Income tax exemption period							15 years
Maximum | India | Indian operations in areas designated as a SEZ | Hyderabad and Chennai
Income Taxes
Income tax exemption period										15 years

Concentration of Revenue and 51

Concentration of Revenue and Assets - Geographic concentration (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Mar. 31, 2016
Concentration of Revenue and Assets
Consolidated revenue	$ 217,209	$ 150,603	$ 632,769	$ 428,449
Consolidated long-lived assets, net	378,441		378,441		$ 383,552
North America
Concentration of Revenue and Assets
Consolidated revenue	140,597	105,601	410,711	303,923
Consolidated long-lived assets, net	92,231		92,231		96,031
Europe
Concentration of Revenue and Assets
Consolidated revenue	48,679	34,308	142,245	96,715
Rest of world
Concentration of Revenue and Assets
Consolidated revenue	27,933	$ 10,694	79,813	$ 27,811
Asia
Concentration of Revenue and Assets
Consolidated long-lived assets, net	270,093		270,093		268,636
Europe and others
Concentration of Revenue and Assets
Consolidated long-lived assets, net	$ 16,117		$ 16,117		$ 18,885

Concentration of Revenue and 52

Concentration of Revenue and Assets - Revenue percentage (Details)	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Sales revenue | Customer 1
Concentration of Revenue and Assets
Revenue from significant clients as a percentage of consolidated revenue	16.60%	1.50%	16.30%	1.70%

Debt - General information (Det

Debt - General information (Details) $ in Thousands	Jul. 31, 2017USD ($)contract	Jul. 28, 2016contract	Jul. 26, 2016contract	Feb. 25, 2016USD ($)	Dec. 31, 2016USD ($)	Feb. 24, 2016USD ($)
Forward starting interest rate swaps
Debt
Derivative, term of contract		12 months	12 months
Percentage of variable debt		50.00%	50.00%
Number of derivative instruments held | contract		1	2
Unrealized gain on derivative					$ 1,723
Forward starting interest rate swaps | Forecast
Debt
Derivative, term of contract	3 years
Percentage of variable debt	50.00%
Number of derivative instruments held | contract	3
Aggregate notional amount	$ 93,800
Amortized notional amount at a blended weighted average rate	1.025%
Virtusa Consulting Services Private Limited | JPM | Polaris
Debt
Maximum borrowing capacity under the credit agreement						$ 25,000
U.K. Subsidiary
Debt
Receivables sold under the terms of the financing agreement					16,426
Amounts due related to a financing agreement to sell certain accounts receivable balances					$ 0
Senior secured debt financing | JPM
Debt
First year maximum leverage ratio				325.00%
Second year maximum leverage ratio				300.00%
Maximum leverage ratio for four consecutive quarter ending on each fiscal quarter				275.00%
Threshold period to maintain unrestricted cash				1 year
Minimum total leverage ratio limit to maintain unrestricted cash deposit				150.00%
Minimum unrestricted cash to maintain as deposit in U.S. bank on exceeding leverage ratio				$ 30,000
Minimum unrestricted cash and certain permitted investments to maintain				$ 20,000
Minimum fixed charge coverage ratio as of last day of any reference period				125.00%
Senior secured debt financing | JPM | Polaris
Debt
Term of credit facility				5 years
Senior secured debt financing | LIBOR | JPM | Polaris
Debt
Interest rate added to the base rate (as a percent)				2.75%
Interest rate (as a percentage)					3.27%
Revolving credit facility | JPM | Polaris
Debt
Amount outstanding under the credit facility					$ 0
Revolving credit facility | Virtusa Consulting Services Private Limited | JPM | Polaris
Debt
Maximum borrowing capacity under the credit agreement				$ 100,000
Delayed-draw term loan | JPM | Polaris
Debt
Drew down during the period				200,000
Principal repayment per quarter				2,500
Delayed-draw term loan | Virtusa Consulting Services Private Limited | JPM | Polaris
Debt
Maximum borrowing capacity under the credit agreement				$ 200,000

Debt - Current portion of long-

Debt - Current portion of long-term debt (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Mar. 31, 2016
Current portion of long-term debt
Total	$ 8,870	$ 8,881
JPM
Current portion of long-term debt
Less: deferred financing costs - current	(1,130)	(1,119)
Total	8,870	8,881
Delayed-draw term loan | JPM
Current portion of long-term debt
Term loan - current maturities	$ 10,000	$ 10,000

Debt - Long-term debt, less cur

Debt - Long-term debt, less current portion (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Mar. 31, 2016
Long-term debt, less current portion
Total	$ 178,939	$ 185,633
JPM
Long-term debt, less current portion
Deferred financing costs, long-term	(3,561)	(4,367)
Total	178,939	185,633
Delayed-draw term loan | JPM
Long-term debt, less current portion
Term Loan	192,500	200,000
Current maturities	$ (10,000)	$ (10,000)

Pensions and post-retirement 56

Pensions and post-retirement benefits (Details) - Pension benefits - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Components of net periodic pension cost
Service cost	$ 325	$ 186	$ 990	$ 554
Interest cost	133	73	416	209
Expected return on plan assets	(155)	(79)	(459)	(243)
Amortization past service cost	2	2	7	7
Amortization of actuarial loss	40	37	122	115
Net periodic pension cost	$ 345	$ 219	1,076	$ 642
Expected cash contributions to the plans in current fiscal period			1,863
Pension contributions for the current fiscal year			$ 1,224

Restructuring (Details)

Restructuring (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2016	Mar. 31, 2017
Restructuring
Restructuring costs incurred	$ 1,888
Additional restructuring costs expected to be incurred		$ 800
Restructuring charges
Provisions	1,888
Cash Payments	(170)
Balance at end of period	$ 1,718

Accumulated Other Comprehensi58

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Changes in accumulated other comprehensive income (loss)
Balance			$ 627,955
Reclassifications from OCI to:
Revenue	$ 217,209	$ 150,603	632,769	$ 428,449
Costs of revenue	(154,847)	(96,908)	(460,776)	(277,770)
(Less) : Noncontrolling interests, net of tax	856		(684)
Other comprehensive income (loss)	(8,640)	(1,805)	(7,102)	(11,867)
Balance	558,011		558,011
Accumulated other comprehensive loss.
Reclassifications from OCI to:
Balance	(46,831)	(45,995)	(46,831)	(45,995)
Investment securities.
Changes in accumulated other comprehensive income (loss)
Balance	(122)	(4)	23	(18)
Other comprehensive income (loss) (OCI) before reclassifications net of tax	47	(99)	(125)	(84)
Reclassifications from OCI to:
(Less) : Noncontrolling interests, net of tax	(36)		(18)
Other comprehensive income (loss)	12	(99)	(133)	(85)
Balance	(110)	(103)	(110)	(103)
Other Comprehensive Income (Loss), Tax
OCI before reclassification, tax	83	0	48	0
OCI, Available-for-sale Securities, Tax	83	0	51	0
Investment securities. | Reclassification out of accumulated other comprehensive income
Reclassifications from OCI to:
Other Income	1		10	(1)
Other Comprehensive Income (Loss), Tax
OCI, Reclassification Adjustment from AOCI for Sale of Securities, Tax	0	0	3	0
Currency translation adjustments
Changes in accumulated other comprehensive income (loss)
Balance	(48,220)	(42,374)	(45,211)	(35,565)
Other comprehensive income (loss) (OCI) before reclassifications net of tax	(8,876)	(3,184)	(12,079)	(9,993)
Reclassifications from OCI to:
(Less) : Noncontrolling interests, net of tax	1,964		2,158
Other comprehensive income (loss)	(6,912)		(9,921)
Balance	(55,132)	(45,558)	(55,132)	(45,558)
Cash flow hedges
Changes in accumulated other comprehensive income (loss)
Balance	8,811	(1,010)	3,934	2,387
Other comprehensive income (loss) (OCI) before reclassifications net of tax	2,598	1,425	9,956	(1,525)
Reclassifications from OCI to:
(Less) : Noncontrolling interests, net of tax	43		331
Other comprehensive income (loss)	188	1,419	5,065	(1,978)
Balance	8,999	409	8,999	409
Other Comprehensive Income (Loss), Tax
OCI before reclassification, tax	1,176	(488)	3,577	657
Comprehensive income (loss), Tax	316	(572)	1,741	627
Cash flow hedges | Reclassification out of accumulated other comprehensive income
Reclassifications from OCI to:
Revenue	(609)		(1,575)
Costs of revenue	(1,165)	(5)	(2,257)	(299)
Selling, General and Administrative Expense	(679)	(1)	(1,390)	(154)
Cash flow hedges | Reclassification out of accumulated other comprehensive income | Revenue
Other Comprehensive Income (Loss), Tax
OCI, Reclassification Adjustment from AOCI on Derivatives, Tax	(322)	0	(834)	0
Cash flow hedges | Reclassification out of accumulated other comprehensive income | Costs of revenue
Other Comprehensive Income (Loss), Tax
OCI, Reclassification Adjustment from AOCI on Derivatives, Tax	(340)	(52)	(620)	(16)
Cash flow hedges | Reclassification out of accumulated other comprehensive income | Selling, general and administrative expenses
Other Comprehensive Income (Loss), Tax
OCI, Reclassification Adjustment from AOCI on Derivatives, Tax	(198)	(32)	(382)	(14)
Benefit plans
Changes in accumulated other comprehensive income (loss)
Balance	(621)	(802)	(885)	(932)
Other comprehensive income (loss) (OCI) before reclassifications net of tax			247
Reclassifications from OCI to:
Other adjustments		20	(18)	68
(Less) : Noncontrolling interests, net of tax	(9)		(61)
Other comprehensive income (loss)	33	59	297	189
Balance	(588)	(743)	(588)	(743)
Other Comprehensive Income (Loss), Tax
OCI before reclassification, tax	0	0	0	0
Comprehensive income (loss), Tax	0	0	0	0
Benefit plans, prior service credit (cost) | Reclassification out of accumulated other comprehensive income
Reclassifications from OCI to:
Costs of revenue	2	2	6	6
Selling, General and Administrative Expense			1	1
Benefit plans, prior service credit (cost) | Reclassification out of accumulated other comprehensive income | Costs of revenue
Other Comprehensive Income (Loss), Tax
OCI, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), Tax	0	0	0	0
Benefit plans, prior service credit (cost) | Reclassification out of accumulated other comprehensive income | Selling, general and administrative expenses
Other Comprehensive Income (Loss), Tax
OCI, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), Tax	0	0	0	0
Benefit plans, net actuarial gain (loss) | Reclassification out of accumulated other comprehensive income
Reclassifications from OCI to:
Costs of revenue	25	28	77	80
Selling, General and Administrative Expense	15	9	45	34
Benefit plans, net actuarial gain (loss) | Reclassification out of accumulated other comprehensive income | Costs of revenue
Other Comprehensive Income (Loss), Tax
OCI, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), Tax	0	0	0	0
Benefit plans, net actuarial gain (loss) | Reclassification out of accumulated other comprehensive income | Selling, general and administrative expenses
Other Comprehensive Income (Loss), Tax
OCI, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), Tax	$ 0	$ 0	$ 0	$ 0

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Events. - Derivatives designated as hedging instrument - Foreign currency forward contracts € in Thousands, ₨ in Thousands, £ in Thousands, SEK in Thousands, $ in Thousands	Jan. 11, 2017INR (₨)	Jan. 11, 2017USD ($)	Jan. 10, 2017GBP (£)	Jan. 10, 2017SEK	Jan. 10, 2017EUR (€)	Jan. 10, 2017USD ($)
Polaris
Subsequent Events
Foreign currency forward contracts expiration period	15 months
U.S. Dollar and U.K. Pound Sterling Forward Contract
Subsequent Events
Aggregate notional amount			£ 9,244			$ 11,252
Weighted average settlement rate			1.217	1.217	1.217	1.217
U.S. dollar and Swedish Krona ("SEK") Forward Contract
Subsequent Events
Aggregate notional amount				SEK 8,585		$ 958
Weighted average settlement rate			0.112	0.112	0.112	0.112
U.S. Dollar and Euro Forward Contract
Subsequent Events
Aggregate notional amount					€ 553	$ 584
Weighted average settlement rate			1.055	1.055	1.055	1.055
U S Dollar And Indian Rupee Forward Contract | Polaris
Subsequent Events
Aggregate notional amount	₨ 286,155	$ 4,000
Weighted average settlement rate	71.539	71.539