Virtusa (VRTU) 10-Q 8 Feb 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2018	Feb. 05, 2019
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, 2018
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		29,920,680
Document Fiscal Year Focus	2,019
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Current assets:
Cash and cash equivalents	$ 210,579	$ 194,897
Short-term investments	41,641	45,900
Accounts receivable, net of allowance of $2,627 and $3,328 at December 31, 2018 and March 31, 2018, respectively	153,467	151,455
Unbilled accounts receivable	94,111	103,829
Prepaid expenses	39,522	31,724
Restricted cash	413	301
Other current assets	26,978	21,229
Total current assets	566,711	549,335
Property and equipment, net	124,917	121,565
Investments accounted for using equity method	1,455	1,588
Long-term investments	862	4,140
Deferred income taxes	24,220	31,528
Goodwill	281,353	297,251
Intangible assets, net	92,326	96,001
Other long-term assets	22,201	11,772
Total assets	1,114,045	1,113,180
Current liabilities:
Accounts payable	40,195	29,541
Accrued employee compensation and benefits	59,922	71,500
Deferred revenue	6,120	7,908
Accrued expenses and other	121,083	91,306
Current portion of long-term debt	11,407	11,407
Income taxes payable	2,109	5,038
Total current liabilities	240,836	216,700
Deferred income taxes	18,326	21,341
Long-term debt, less current portion	311,672	288,227
Long-term liabilities	30,353	43,833
Total liabilities	601,187	570,101
Commitments and contingencies
Series A Convertible Preferred Stock: par value $0.01 per share, 108,000 shares authorized, 108,000 shares issued and outstanding at December 31, 2018 and March 31, 2018; redemption amount and liquidation preference of $108,000 at December 31, 2018 and March 31, 2018	107,120	106,996
Redeemable noncontrolling interest	24,924
Stockholders' equity:
Undesignated preferred stock, $0.01 par value; Authorized 5,000,000 shares at December 31, 2018 and March 31, 2018; zero shares issued and outstanding at December 31, 2018 and March 31, 2018, respectively
Common stock, $0.01 par value; Authorized 120,000,000 shares at December 31, 2018 and March 31, 2018; issued 32,781,374 and 32,469,092 shares at December 31, 2018 and March 31, 2018, respectively; outstanding 29,901,375 and 29,589,093 shares at December 31, 2018 and March 31, 2018, respectively	328	325
Treasury stock, 2,879,999 common shares, at cost, at December 31, 2018 and March 31, 2018	(39,652)	(39,652)
Additional paid-in capital	237,887	260,612
Retained earnings	243,006	238,019
Accumulated other comprehensive loss	(60,755)	(40,681)
Total Virtusa stockholders’ equity	380,814	418,623
Noncontrolling interest in subsidiaries		17,460
Total Stockholders' equity	380,814	436,083
Total liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity	$ 1,114,045	$ 1,113,180

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Consolidated Balance Sheets
Accounts receivable, allowance (in dollars)	$ 2,627	$ 3,328
Series A convertible preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series A convertible preferred stock, shares authorized	108,000	108,000
Series A convertible preferred stock, shares issued	108,000	108,000
Series A convertible preferred stock, shares outstanding	108,000	108,000
Series A convertible preferred stock, redemption amount	$ 108,000	$ 108,000
Series A convertible preferred stock, liquidation preference	$ 108,000	$ 108,000
Undesignated preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Undesignated preferred stock, shares authorized	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, shares authorized	120,000,000	120,000,000
Common stock, shares issued	32,781,374	32,469,092
Common stock, shares outstanding	29,901,375	29,589,093
Treasury stock, common shares	2,879,999	2,879,999

Consolidated Statements of Inco

Consolidated Statements of Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Income (Loss)
Revenue	$ 314,681	$ 263,809	$ 920,232	$ 739,328
Costs of revenue	221,461	183,420	654,288	528,103
Gross profit	93,220	80,389	265,944	211,225
Operating expenses:
Selling, general and administrative expenses	73,935	66,726	218,716	181,213
Income from operations	19,285	13,663	47,228	30,012
Other income (expense):
Interest income	634	1,080	1,988	3,012
Interest expense	(4,597)	(1,305)	(13,365)	(4,376)
Foreign currency transaction gains (losses), net	8,319	2,576	(11,794)	1,019
Other, net	(444)	492	998	1,376
Total other income (expense)	3,912	2,843	(22,173)	1,031
Income before income tax expense	23,197	16,506	25,055	31,043
Income tax expense	10,400	24,427	15,863	26,725
Net income (loss)	12,797	(7,921)	9,192	4,318
Less: net income attributable to noncontrolling interests, net of tax	221	2,134	1,407	5,947
Net income (loss) available to Virtusa stockholders	12,576	(10,055)	7,785	(1,629)
Less: Series A Convertible Preferred Stock dividends and accretion	1,087	1,087	3,262	2,875
Net income (loss) available to Virtusa common stockholders	$ 11,489	$ (11,142)	$ 4,523	$ (4,504)
Basic earnings (loss) per share available to Virtusa common stockholders (in dollars per share)	$ 0.38	$ (0.38)	$ 0.15	$ (0.15)
Diluted earnings (loss) per share available to Virtusa common stockholders (in dollars per share)	$ 0.37	$ (0.38)	$ 0.15	$ (0.15)

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 12,797	$ (7,921)	$ 9,192	$ 4,318
Other comprehensive income (loss):
Foreign currency translation adjustment	(2,477)	4,641	(20,201)	9,068
Pension plan adjustment	73	31	(23)	123
Unrealized gain (loss) on available-for-sale securities, net of tax	263	8	(51)	212
Unrealized gain (loss) on effective cash flow hedges, net of tax	6,067	(106)	(1,072)	(8,314)
Other Comprehensive Income (Loss)	3,926	4,574	(21,347)	1,089
Comprehensive income (loss)	16,723	(3,347)	(12,155)	5,407
Less: comprehensive income attributable to noncontrolling interest, net of tax	669	3,930	134	7,238
Comprehensive income (loss) available to Virtusa stockholders	$ 16,054	$ (7,277)	$ (12,289)	$ (1,831)

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total Virtusa Stockholders’ Equity	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income	Non-controlling interest	Redeemable Noncontrolling Interest	Total
Balance at Mar. 31, 2017	$ 497,032	$ 318	$ (9,652)	$ 305,387	$ 240,728	$ (39,749)	$ 87,984		$ 585,016
Balance (in shares) at Mar. 31, 2017		31,762,214	(1,856,703)
Increase (Decrease) in Stockholders' Equity
Proceeds from the exercise of stock options	1,629	$ 1		1,628					1,629
Proceeds from the exercise of stock options (in shares)		117,094
Proceeds from the exercise of subsidiary stock options	142			142					142
Restricted stock awards vested		$ 1		(1)
Restricted stock awards vested (in shares)		94,831
Restricted stock awards withheld for tax	(1,416)			(1,416)					(1,416)
Repurchase of common stock	(27,319)		$ (27,319)						(27,319)
Repurchase of common stock (in shares)			(947,706)
Share-based compensation	4,731			4,731					4,731
Subsidiary share based compensation	57			57					57
Series A Convertible Preferred Stock dividends and accretion	(701)				(701)				(701)
Other comprehensive income (loss)	(379)					(379)	273		(106)
Net income (loss)	3,658				3,658
Net income (loss)							989
Net income (loss)									4,647
Balance at Jun. 30, 2017	477,434	$ 320	$ (36,971)	310,528	243,685	(40,128)	89,246		566,680
Balance (in shares) at Jun. 30, 2017		31,974,139	(2,804,409)
Balance at Mar. 31, 2017	497,032	$ 318	$ (9,652)	305,387	240,728	(39,749)	87,984		585,016
Balance (in shares) at Mar. 31, 2017		31,762,214	(1,856,703)
Increase (Decrease) in Stockholders' Equity
Net income (loss)									(1,629)
Net income (loss)									5,947
Balance at Dec. 31, 2017	483,606	$ 322	$ (39,652)	326,663	236,224	(39,951)	95,222		578,828
Balance (in shares) at Dec. 31, 2017		32,223,386	(2,879,999)
Balance at Jun. 30, 2017	477,434	$ 320	$ (36,971)	310,528	243,685	(40,128)	89,246		566,680
Balance (in shares) at Jun. 30, 2017		31,974,139	(2,804,409)
Increase (Decrease) in Stockholders' Equity
Proceeds from the exercise of stock options	1,088	$ 1		1,087					1,088
Proceeds from the exercise of stock options (in shares)		90,555
Proceeds from the exercise of subsidiary stock options	54			54					54
Restricted stock awards vested		$ 1		(1)
Restricted stock awards vested (in shares)		86,399
Restricted stock awards withheld for tax	(1,015)			(1,015)					(1,015)
Repurchase of common stock	(2,681)		$ (2,681)						(2,681)
Repurchase of common stock (in shares)			(75,590)
Share-based compensation	6,090			6,090					6,090
Subsidiary share based compensation	52			52					52
Series A Convertible Preferred Stock dividends and accretion	(1,087)				(1,087)				(1,087)
Other comprehensive income (loss)	(2,600)					(2,600)	(779)		(3,379)
Net income (loss)	4,768				4,768
Net income (loss)							2,824
Net income (loss)									7,592
Balance at Sep. 30, 2017	482,103	$ 322	$ (39,652)	316,795	247,366	(42,728)	91,291		573,394
Balance (in shares) at Sep. 30, 2017		32,151,093	(2,879,999)
Increase (Decrease) in Stockholders' Equity
Proceeds from the exercise of stock options	632			632					632
Proceeds from the exercise of stock options (in shares)		54,474
Proceeds from the exercise of subsidiary stock options	440			440					440
Restricted stock awards vested (in shares)		17,819
Restricted stock awards withheld for tax	(322)			(322)					(322)
Share-based compensation	9,091			9,091					9,091
Subsidiary share based compensation	27			27					27
Series A Convertible Preferred Stock dividends and accretion	(1,087)				(1,087)				(1,087)
Other comprehensive income (loss)	2,777					2,777	1,797		4,574
Net income (loss)	(10,055)				(10,055)				(10,055)
Net income (loss)							2,134		2,134
Net income (loss)									(7,921)
Balance at Dec. 31, 2017	483,606	$ 322	$ (39,652)	326,663	236,224	(39,951)	95,222		578,828
Balance (in shares) at Dec. 31, 2017		32,223,386	(2,879,999)
Balance at Mar. 31, 2018	418,623	$ 325	$ (39,652)	260,612	238,019	(40,681)	17,460		$ 436,083
Balance (in shares) at Mar. 31, 2018		32,469,092	(2,879,999)						29,589,093
Increase (Decrease) in Stockholders' Equity
Proceeds from the exercise of stock options	294			294					$ 294
Proceeds from the exercise of stock options (in shares)		33,173
Proceeds from the exercise of subsidiary stock options	196			196					196
Restricted stock awards vested		$ 1		(1)
Restricted stock awards vested (in shares)		95,432
Restricted stock awards withheld for tax	(2,450)			(2,450)					(2,450)
Share-based compensation	7,908			7,908					7,908
Subsidiary share based compensation	30			30					30
Cumulative effect of adopting ASC Topic 606, net of tax	464				464				464
Series A Convertible Preferred Stock dividends and accretion	(1,087)				(1,087)				(1,087)
Other comprehensive income (loss)	(13,060)					(13,060)	(1,466)		(14,526)
Net income (loss)	(6,296)				(6,296)
Net income (loss)							731
Net income (loss)									(5,565)
Balance at Jun. 30, 2018	404,622	$ 326	$ (39,652)	266,589	231,100	(53,741)	16,725		421,347
Balance (in shares) at Jun. 30, 2018		32,597,697	(2,879,999)
Balance at Mar. 31, 2018	418,623	$ 325	$ (39,652)	260,612	238,019	(40,681)	17,460		$ 436,083
Balance (in shares) at Mar. 31, 2018		32,469,092	(2,879,999)						29,589,093
Increase (Decrease) in Stockholders' Equity
Payment of redeemable noncontrolling interest related to Polaris									$ 30,387
Net income (loss)									7,785
Net income (loss)									1,407
Balance at Dec. 31, 2018	380,814	$ 328	$ (39,652)	237,887	243,006	(60,755)		$ 24,924	$ 380,814
Balance (in shares) at Dec. 31, 2018		32,781,374	(2,879,999)						29,901,375
Balance at Jun. 30, 2018	404,622	$ 326	$ (39,652)	266,589	231,100	(53,741)	16,725		$ 421,347
Balance (in shares) at Jun. 30, 2018		32,597,697	(2,879,999)
Increase (Decrease) in Stockholders' Equity
Proceeds from the exercise of stock options	134			134					134
Proceeds from the exercise of stock options (in shares)		9,918
Proceeds from the exercise of subsidiary stock options	64			64				3	64
Restricted stock awards vested		$ 2		(2)
Restricted stock awards vested (in shares)		162,090
Restricted stock awards withheld for tax	(5,152)			(5,152)					(5,152)
Share-based compensation	8,022			8,022					8,022
Reclassification of previously recognized stock compensation related to liabilities classified awards for Polaris to liabilities	(617)			(617)					(617)
Payment of redeemable noncontrolling interest related to Polaris								(28,395)
Foreign currency translation on redeemable noncontrolling interest								(2,045)
Series A Convertible Preferred Stock dividends and accretion	(1,088)				(1,088)				(1,088)
Other comprehensive income (loss)	(10,492)					(10,492)		(255)	(10,492)
Net income (loss)	1,505				1,505			456
Net income (loss)									1,505
Balance at Sep. 30, 2018	359,156	$ 328	$ (39,652)	231,196	231,517	(64,233)	275	24,614	359,431
Balance (in shares) at Sep. 30, 2018		32,769,705	(2,879,999)
Increase (Decrease) in Stockholders' Equity
Adjustments of redeemable noncontrolling interest to redemption value	(37,842)			(37,842)			(16,450)	54,850	(54,292)
Proceeds from the exercise of subsidiary stock options								50
Restricted stock awards vested (in shares)		11,669
Restricted stock awards withheld for tax	(226)			(226)					(226)
Share-based compensation	6,993			6,993					6,993
Subsidiary share based compensation	6			6					6
Other	(115)			(115)			(290)		(405)
Payment of redeemable noncontrolling interest related to Polaris								(1,992)
Foreign currency translation on redeemable noncontrolling interest								995
Series A Convertible Preferred Stock dividends and accretion	(1,087)				(1,087)				(1,087)
Other comprehensive income (loss)	3,478					3,478		448	3,478
Net income (loss)	12,576				12,576			206	12,576
Net income (loss)							$ 15		221
Net income (loss)									12,591
Balance at Dec. 31, 2018	380,814	$ 328	$ (39,652)	237,887	$ 243,006	$ (60,755)		24,924	$ 380,814
Balance (in shares) at Dec. 31, 2018		32,781,374	(2,879,999)						29,901,375
Increase (Decrease) in Stockholders' Equity
Adjustments of redeemable noncontrolling interest to redemption value	$ 33			$ 33				$ 603	$ 33

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net income	$ 9,192	$ 4,318
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,696	20,711
Share-based compensation expense	24,104	20,048
Provision (recovery) for doubtful accounts	(549)	1,025
Gain on disposal of property and equipment	(115)	(40)
Impairment of investment	885
Foreign currency transaction losses (gains), net	11,794	(1,019)
Amortization of discounts and premiums on investments	84	258
Amortization of debt issuance cost	819	847
Deferred income taxes, net	(6,225)	5,219
Net changes in operating assets and liabilities
Accounts receivable and unbilled receivable	4,780	(6,754)
Prepaid expenses and other current assets	(7,729)	(3,860)
Other long-term assets	(11,702)	(2,760)
Accounts payable	12,014	(352)
Accrued employee compensation and benefits	(9,041)	2,167
Accrued expenses and other current liabilities	13,135	6,855
Income taxes payable	2,975	(4,300)
Other long-term liabilities	3,705	11,818
Net cash provided by operating activities	69,822	54,181
Cash flows from investing activities:
Proceeds from sale of property and equipment	568	217
Purchase of short-term investments	(84,185)	(88,033)
Proceeds from sale or maturity of short-term investments	88,204	118,614
Purchase of long-term investments		(16,772)
Proceeds from sale or maturity of long-term investments		1,606
Business acquisitions, net of cash acquired	(1,919)	(600)
Purchase of property and equipment	(24,715)	(11,242)
Net cash (used in) provided by investing activities	(22,047)	3,790
Cash flows from financing activities:
Proceeds from revolving credit facility	32,000	25,000
Payment of debt	(9,375)	(81,000)
Payment of other noncontrolling interest	(373)
Payments of withholding taxes related to net share settlements of restricted stock	(7,828)	(2,753)
Series A Convertible Preferred Stock proceeds, net of issuance costs of $1,154		106,846
Repurchase of common stock		(30,000)
Principal payments on capital lease obligation	(65)	(161)
Payment of contingent consideration related to acquisitions	(100)
Payment of redeemable noncontrolling interest related to Polaris	(30,387)
Payment of dividend on Series A Convertible Preferred Stock	(3,138)	(2,081)
Net cash (used in) provided by financing activities	(18,307)	19,838
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(13,530)	4,123
Net increase in cash and cash equivalents and restricted cash	15,938	81,932
Cash, cash equivalents and restricted cash, beginning of period	195,236	145,086
Cash, cash equivalents and restricted cash, end of period	211,174	227,018
Parent
Cash flows from financing activities:
Proceeds from exercise of common stock options	428	3,351
Subsidiaries
Cash flows from financing activities:
Proceeds from exercise of common stock options	$ 531	$ 636

Consolidated Statements of Ca_2

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Mar. 31, 2018
Balance sheet classification
Cash and cash equivalents		$ 210,579	$ 194,897
Restricted cash in current assets		413	301
Restricted cash in other long-term assets		$ 182	$ 38
Restricted cash in other long-term assets, balance sheet location		us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent
Total restricted cash		$ 595	$ 339
Total cash, cash equivalents and restricted cash	$ 227,018	$ 211,174	$ 195,236
Series A Convertible Preferred Stock
Issuance costs	$ 1,154

Nature of the Business

Nature of the Business	9 Months Ended
	Dec. 31, 2018
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 provider of digital engineering and information technology (“IT”) outsourcing services that accelerate business outcomes for our clients. We support Forbes Global 2000 clients across large, consumer facing industries like banking, financial services, insurance, healthcare, communications, and media and entertainment, as these clients seek to improve their business performance through accelerating revenue growth, delivering compelling consumer experiences, improving operational efficiencies, and lowering overall IT costs. We provide services across the entire spectrum of the IT services lifecycle, from strategy and consulting to technology and user experience (“UX”) design, development of IT applications, systems integration, testing and business assurance, and maintenance and support services, including infrastructure and managed services. We help our clients solve critical business problems by leveraging a combination of our distinctive consulting approach, unique platforming methodology, and deep domain and technology expertise. Our services enable our clients to accelerate business outcomes by consolidating, rationalizing and modernizing their core customer-facing processes into one or more core systems. We deliver cost-effective solutions through a global delivery model, applying advanced delivery 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. Our industry leading business transformational solutions combine deep domain expertise with our strengths in software engineering and business consulting to support our clients’ business-imperative initiatives across business growth and IT operations. 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, 2018
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, 2018 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 25, 2018. 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. For those majority-owned subsidiaries that are not 100% owned by the Company, the interests of the minority owners are accounted for as noncontrolling interests. 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 reported period. Management re-evaluates 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, 2018 and March 31, 2018, 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, 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 consolidated financial statements for a discussion of the fair value of the Company’s other financial instruments. Recent accounting pronouncements Recently Adopted Accounting Pronouncements Unless otherwise discussed below, the adoption of new accounting standards did not have an impact on the consolidated financial statements. In May 2014, the FASB issued an Accounting Standard Update (“ASU” ) No. 2014-09, Revenue from Contracts with Customers (“Accounting Standard Codification (“ASC”) Topic 606”) as well as other clarifications and technical guidance related to this new revenue standard, including ASC Topic 340-40, Other Assets and Deferred Costs — Contracts with Customers (“ASC 340-40”). ASC Topic 606 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. 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 modified retrospective method. The Company adopted the standard effective April 1, 2018 using the modified retrospective method applied to those contracts which were not completed as of that date. Upon adoption of ASC Topic 606 on April 1, 2018, the Company recorded a net increase to opening retained earnings of approximately $464, after a tax impact of $142. The impact of adoption primarily relates to the longer period of amortization for costs to fulfill a contract compared to the amortization period prior to adoption. The following table summarizes the cumulative effect of adopting ASC Topic 606 using the modified retrospective method of adoption as of April 1, 2018: Balance as of ASC Topic 606 Balance as of March 31, 2018 Adjustments April 1, 2018 Balance Sheet : Assets Other current assets $ 21,229 $ (62) $ 21,167 Deferred income taxes 31,528 (142) 31,386 Other long-term assets 11,772 668 12,440 Stockholders’ equity Retained earnings $ 238,019 $ 464 $ 238,483 See Note 8 “Revenues” in the consolidated financial statements for additional information regarding revenues. 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. The Company adopted this guidance on April 1, 2018. The adoption of this guidance did not have a material impact on the consolidated financial statements, therefore, the Company did not record any cumulative adjustments to the opening retained earnings in 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. The Company adopted the standard effective April 1, 2018 using the retrospective method. As a result of the adoption, the Company restated its consolidated statement of cash flows for all of the prior periods presented. The following table summarizes the impact of this standard on the Company’s consolidated cash flows for the nine months ended December 31, 2017: As Reported Restated Effect Cash flows from investing activities: Increase in restricted cash $ (119) $ — $ 119 Net cash provided by investing activities 3,671 3,790 119 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 4,120 4,123 3 Net increase in cash, cash equivalents and restricted cash 81,810 81,932 122 Cash, cash equivalents and restricted cash, beginning of period 144,908 145,086 178 Cash, cash equivalents and restricted cash, end of period $ 226,718 $ 227,018 $ 300 In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715), “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”, a guidance on presentation of net periodic pension cost and net periodic postretirement benefit cost. The new standard requires that an employer disaggregate the service costs components of net benefit cost. The employer is required to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component, such as in other income and expense. The guidance is effective for fiscal years beginning after December 15, 2017. The Company adopted this guidance effective April 1, 2018. Upon adoption, the Company presented the service cost component in costs of revenue and selling, general and administrative expenses. The other components of net periodic pension cost are presented within other (income) expense in the Consolidated Statements of Income (Loss). The adoption of this guidance did not have a material impact on the consolidated financial statements, therefore, the Company did not retrospectively change the presentation of the financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. The new standard is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. The guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted but no earlier than an entity’s adoption date of Topic 606. The Company early adopted this guidance effective April 1, 2018. The adoption of this guidance did not have an impact on the consolidated financial statements. New Accounting Pronouncements Unless otherwise discussed below, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements. In February 2016, the FASB issued an update (ASU 2016-02) to the standard on leases to increase transparency and comparability among organizations. The FASB subsequently issued ASU 2018-10, ASU 2018-11 in July 2018 and ASU 2018-20 in December 2018, which provide clarifications and improvements to this new standard. ASU 2018-11 also provides the optional transition method which allows companies to apply the new lease standard at the adoption date instead of at the earliest comparative period presented. 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 has developed a transition plan, which includes evaluating its population of leased assets to assess the impact of the ASU on its lease portfolio, and designing and implementing new processes and controls. The Company is currently planning to elect the package of practical expedients which permits the Company to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. While the Company continues to assess the potential impact of this ASU, it does anticipate this ASU will have a material impact on its consolidated balance sheets primarily due to recognizing a right-to-use-asset and a lease liability for operating leases. 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 February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this Update also require certain disclosures about stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The Company is currently evaluating the effect of this new standard will have on its consolidated financial statements and related disclosures.

Earnings (Loss) per Share

Earnings (Loss) per Share	9 Months Ended
	Dec. 31, 2018
Earnings (Loss) per Share
Earnings (Loss) per Share	(3) Earnings (Loss) per Share Basic earnings (loss) per share available to Virtusa common stockholders (“EPS”) is computed by dividing net income (loss), less any dividends and accretion of issuance cost on the Series A Convertible Preferred Stock by the weighted average number of shares of common stock outstanding for the period. In computing diluted EPS, the Company adjusts the numerator used in the basic EPS computation, subject to anti-dilution requirements, to add back the dividends (declared or cumulative undeclared) applicable to the Series A Convertible Preferred Stock. Such add-back would also include any adjustments to equity in the period to accrete the Series A Convertible Preferred Stock to its redemption price. The Company adjusts the denominator used in the basic EPS computation, subject to anti-dilution requirements, to include the dilution from potential shares resulting from the issuance of restricted stock units, unvested restricted stock and stock options along with the conversion of the Series A Convertible Preferred Stock to common stock. The following table sets forth the computation of basic and diluted EPS for the periods set forth below: The components of basic earnings (loss) per share are as follows: Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Numerators: Net income (loss) available to Virtusa stockholders $ 12,576 $ (10,055) $ 7,785 $ (1,629) Less: Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 3,262 2,875 Net income (loss) available to Virtusa common stockholders $ 11,489 $ (11,142) $ 4,523 $ (4,504) Denominators: Basic weighted average common shares outstanding 29,893,220 29,295,730 29,764,507 29,387,977 Basic earnings (loss) per share available to Virtusa common stockholders $ 0.38 $ (0.38) $ 0.15 $ (0.15) The components of diluted earnings (loss) per share are as follows: Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Numerators: Net income (loss) available to Virtusa common stockholders $ 11,489 $ (11,142) $ 4,523 $ (4,504) Add : Series A Convertible Preferred Stock dividends and accretion 1,087 — — — Net income (loss) available to Virtusa common stockholders and assumed conversion $ 12,576 $ (11,142) $ 4,523 $ (4,504) Denominators: Basic weighted average common shares outstanding 29,893,220 29,295,730 29,764,507 29,387,977 Dilutive effect of Series A Convertible Preferred Stock if converted 3,000,000 — — — Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units 768,508 — 833,607 — Weighted average shares—diluted 33,661,728 29,295,730 30,598,114 29,387,977 Diluted earnings (loss) per share available to Virtusa common stockholders $ 0.37 $ (0.38) $ 0.15 $ (0.15) During the three months ended December 31, 2018 and 2017, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase, 20,617 and 1,366,212 shares of common stock, respectively, were excluded from the calculations of diluted earnings (loss) per share as their effect would have been anti-dilutive. For the three months ended December 31, 2018 and 2017, the weighted average shares of Series A Convertible Preferred Stock of 0 and 3,000,000, respectively, were excluded from the diluted earnings (loss) per share as their effect would have been anti-dilutive using the if-converted method. During the nine months ended December 31, 2018 and 2017, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase, 13,745 and 1,598,783 shares of common stock, respectively, were excluded from the calculations of diluted earnings (loss) per share as their effect would have been anti-dilutive. For the nine months ended December 31, 2018 and 2017, the weighted average shares of Series A Convertible Preferred Stock of 3,000,000 and 2,637,363, respectively, were excluded from the diluted earnings (loss) per share as their effect would have been anti-dilutive using the if-converted method.

Investment Securities

Investment Securities	9 Months Ended
	Dec. 31, 2018
Investment Securities
Investment Securities	(4) Investment Securities At December 31, 2018 and March 31, 2018, all of the Company’s investment securities were classified as available-for-sale securities and equity securities. These 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 consolidated 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, 2018: Gross Gross Other-than temporary Amortized Unrealized Unrealized impairment Cost Gains Losses recognized in earnings Fair Value Available-for-sale securities: Corporate bonds: Current $ 8,800 $ — $ (21) $ — $ 8,779 Preference shares: 1,599 — — (885) 714 Time Deposits: Current 18,109 — — — 18,109 Equity securities: Mutual funds: Current 14,564 189 — — 14,753 Equity Shares/ Options: Non-current 7 141 — — 148 Total available-for-sale securities and equity securities $ 43,079 $ 330 $ (21) $ (885) $ 42,503 The following is a summary of investment securities at March 31, 2018: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-sale securities: Corporate bonds: Current $ 25,397 $ — $ (126) $ 25,271 Non-current 2,293 — (22) 2,271 Preference shares: Non-current 1,726 — (70) 1,656 Agency and short-term notes: Current 800 — (1) 799 Mutual funds: Current 1,540 11 — 1,551 Equity Shares/ Options: Non-current 15 198 — 213 Time deposits: Current 18,279 — — 18,279 Total available-for-sale securities $ 50,050 $ 209 $ (219) $ 50,040 The Company evaluates investments with unrealized losses to determine if the losses are other than 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 that the Company will not be required to sell such investments prior to the recovery of their carrying value. During the three months ending December 31, 2018, the issuer of the Company’s investment in preference shares began showing signs of financial distress. This included down-grades to its credit rating and a decrease in trading activity and market pricing for this security. Due to the uncertainty in recovering the amortized cost of this security, the Company has determined the unrealized losses are other-than-temporary and recorded the impairment in earnings. The Company has determined that other unrealized losses at December 31, 2018 and March 31, 2018 are temporary. The following is a summary of other-than-temporary impairment unrealized losses recognized during the three months ended December 31, 2018: Three Months Ended December 31, 2018 Unrealized losses recognized in other comprehensive loss as of September 30, 2018 $ 242 Add: unrealized losses recognized 643 Less: Other-than-temporary impairment recognized in earnings (885) Unrealized losses in other comprehensive loss as of December 31, 2018 $ — Proceeds from sales of available-for-sale investment securities and equity 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 December 31, December 31, 2018 2017 2018 2017 Proceeds from sales or maturities of available-for-sale $ 27,633 $ 57,391 $ 88,204 $ 120,220 Gross gains $ 253 $ 241 $ 639 $ 916 Gross losses — (36) (32) (127) Net realized gains on sales of available-for-sale investment $ 253 $ 205 $ 607 $ 789

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Dec. 31, 2018
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, 2018: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ 26,888 — $ 26,888 Equity securities—current — 14,753 — 14,753 Available-for-sales securities—non-current — 714 — 714 Equity securities—non-current — 148 — 148 Derivative financial instruments: Foreign currency derivative contracts — 3,774 — 3,774 Interest Rate Swap Contracts — 1,779 — 1,779 Total assets $ — $ 48,056 $ — $ 48,056 Liabilities: Foreign currency derivative contracts — 1,439 $ — 1,439 Interest Rate Swap Contracts — 2,333 — 2,333 Total liabilities $ — $ 3,772 $ — $ 3,772 The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2018: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ 45,900 — $ 45,900 Available-for-sales securities—non-current — 4,140 — 4,140 Foreign currency derivative contracts — 2,122 — 2,122 Interest Rate Swap Contracts — 2,486 — 2,486 Total assets $ — $ 54,648 $ — $ 54,648 Liabilities: Foreign currency derivative contracts $ — 1,023 $ — 1,023 Interest Rate Swap Contracts — — — — Contingent consideration — — 100 100 Total liabilities $ — $ 1,023 $ 100 $ 1,123

Derivative Financial Instrument

Derivative Financial Instruments	9 Months Ended
	Dec. 31, 2018
Derivative Financial Instruments
Derivative Financial Instruments	(6) Derivative Financial Instruments 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 and Indian 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. The U.S. dollar notional value of all outstanding foreign currency derivative contracts was $158,881 and $140,347 at December 31, 2018 and March 31, 2018, respectively. Unrealized net gains related to these contracts which are expected to be reclassified from AOCI to earnings during the next 12 months are $1,548 at December 31, 2018. At December 31, 2018, the maximum outstanding term of any derivative instrument was 18 months. The Company also uses interest rate swaps to mitigate the Company’s interest rate risk on the Company’s variable rate debt. 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 (See Note 13 to the consolidated financial statements), by using pay-fixed, receive-variable interest rate swaps to offset the future variable rate interest payments. The Company purchased interest rate swaps in July 2016 with an effective date of July 2017 and in November 2018. The July 2016 interest rate swaps are at a blended weighted average of 1.025% and the Company will receive 1-month LIBOR on the same notional amounts. The November 2018 interest rate swaps were entered into to mitigate the interest rate risk associated with the Credit Agreement executed in February 2018 and subsequent additional borrowings. The November 2018 interest rate swaps are at a fixed rate of 2.85% and are designed to maintain a 50% coverage of our LIBOR debt, therefore the notional amount changes over the life of the swap to retain the 50% coverage target. At December 31, 2018, the total notional amounts of the interest rate swaps were $163,812 with remaining maturity of approximately 4 years. The following table sets forth the fair value of derivative instruments included in the consolidated balance sheets at December 31, 2018 and March 31, 2018: Derivatives designated as hedging instruments December 31, 2018 March 31, 2018 Foreign currency exchange contracts: Other current assets $ 2,987 $ 2,109 Other long-term assets $ 787 $ 13 Accrued expenses and other $ 1,439 $ 1,023 Long-term liabilities $ — $ — December 31, 2018 March 31, 2018 Interest rate swap contracts : Other long-term assets $ 1,779 $ 2,486 Long-term liabilities $ 2,333 $ — The following tables set forth the effect of the Company’s foreign currency exchange contracts and interest rate swap contracts on the consolidated financial statements of the Company for the three and nine months ended December 31, 2018 and 2017: Amount of Gain or (Loss) Recognized in AOCI on Derivatives Derivatives Designated as Three Months Ended December 31, Nine Months Ended December 31, Cash Flow Hedging Relationships 2018 2017 2018 2017 Foreign currency exchange contracts $ 9,398 $ 4,211 $ (2,203) $ 4,811 Interest rate swaps $ (2,776) $ 518 $ (2,310) $ 281 Amount of Gain or (Loss) Reclassified from AOCI into Income Location of Gain or (Loss) Reclassified Three Months Ended December 31, Nine Months Ended December 31, from AOCI into Income 2018 2017 2018 2017 Revenue $ (510) $ 2,334 $ (1,673) $ 7,846 Costs of revenue $ (846) $ 1,432 $ (1,187) $ 5,484 Operating expenses $ (405) $ 750 $ (578) $ 3,060 Interest Expenses $ 288 59 $ 731 93 Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives Three Months Ended Nine Months Ended Derivatives not Designated Location of Gain Or (Loss) December 31, December 31, as Hedging Instruments Recognized in Income on Derivatives 2018 2017 2018 2017 Foreign currency exchange contracts Foreign currency transaction gains (losses) $ — $ — $ — $ — Revenue $ 1,131 $ 216 $ 2,237 $ (120) Costs of revenue $ (784) $ (177) $ (1,537) $ 55 Selling, general and administrative expenses $ (75) $ (94) $ (93) $ (41)

Acquisitions

Acquisitions	9 Months Ended
	Dec. 31, 2018
Acquisitions
Acquisitions	(7) Acquisitions On March 12, 2018, (i) the Company entered into an equity purchase agreement by and among the Company, eTouch Systems Corp. (“eTouch US”) and each of the equity holders of eTouch US to acquire all of the outstanding shares of eTouch US, and (ii) certain of the Company’s Indian subsidiaries entered into a share purchase agreement by and among those Company subsidiaries, eTouch Systems (India) Pvt. Ltd (“eTouch India,” together with eTouch US, “eTouch”) and the equity holders of eTouch India to acquire all of the outstanding shares of eTouch India (together with the acquisition of eTouch US, the “Acquisition”). The Acquisition strengthens our digital engineering capabilities, and establishes a solid base in Silicon Valley. Under the terms of the equity purchase agreement and the share purchase agreement, on March 12, 2018, the Company acquired all of the outstanding shares of eTouch US and eTouch India for approximately $140,000 in cash, subject to certain adjustments, with up to an additional $15,000 set aside for retention bonuses to be paid to eTouch management and key employees, in equal installments on the first and second anniversary of the transaction. The purchase price is being paid in three tranches with $80,000 paid at closing, $42,500 on the 12-month anniversary of the close of the transaction, and $17,500 on the 18-month anniversary of the close of the transaction, subject in each case to certain adjustments. The Company utilized the net cash proceeds of a $70,000 delayed draw term loan funded pursuant to the Credit Agreement (as defined in Note 13 to the consolidated financial statements) and $10,000 of cash on hand to make the payments due at the closing of the Acquisition. The Company paid an amount equal to $66,000 to the equity holders of eTouch US, and an amount equal to $14,000 to the equity holders of eTouch India, which together comprise the first of three tranches of the purchase price to be paid in connection with the closing of the Acquisition. The purchase price is subject to adjustment after the closing in the event the working capital associated with eTouch deviates from a threshold amount and other contractual adjustments. 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. During the nine months ended December 31, 2018, the Company recorded $7,100 as a reduction of goodwill related to updating the fair value assessment of customer relationships and trademark, $1,104 as an increase in goodwill related to a tax liability payable to the equity holders of eTouch US and $126 as an increase in goodwill related to other adjustments. The following are the preliminary fair values of assets and liabilities based on information available as of December 31, 2018 and may be subject to change during the measurement period. A summary of the fair values for eTouch is as follows: Amount Useful Life Consideration Transferred: Cash paid at closing $ 80,000 Fair value of the future payments 57,858 Tax related liability 10,417 Fair value of consideration 148,275 Less: Cash acquired 2,241 Total purchase price, net of cash acquired $ 146,034 Assets and Liabilities: Cash and cash equivalents 2,241 Accounts receivable 15,522 Unbilled receivables 2,986 Prepaid expenses 815 Other current assets 375 Property and equipment 2,798 Other long-term assets 98 Goodwill 79,747 Trademark 900 2 years Customer relationships 53,000 10 - 15 years Accounts payable (3,267) Deferred revenue (852) Accrued expenses and other current liabilities (721) Accrued employee compensation and benefits (4,197) Income taxes payable (250) Deferred income taxes (368) Other long-term liabilities (552) Total purchase price $ 148,275 Acquisition costs are recorded in selling, general and administrative expenses. The primary items that generated goodwill are the value of the acquired assembled workforces and synergies between eTouch and the Company, neither of which qualify as an amortizable intangible asset.

Revenues

Revenues	9 Months Ended
	Dec. 31, 2018
Revenues
Revenues	(8) Revenues Effective April 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”) as amended. The Company adopted the new guidance using the modified retrospective method by recognizing the cumulative effect of adoption as an adjustment to retained earnings as of April 1, 2018. Results for reporting periods beginning after April 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with Revenue Recognition (“Topic 605”). The impact of adoption of the new guidance on the Company’s consolidated financial statements as of April 1, 2018 is presented in Note 2 to the Company’s consolidated financial statements. Revenue recognition The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenues are recognized when control of the promised services is transferred to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company generally recognizes revenue for services over time as the Company’s performance creates or enhances an asset that the customer controls from fixed price contracts related to complex design, development and customization. For these contracts, the Company measures the progress and recognizes revenue using effort-based input methods, as the Company performs, based on actual efforts spent compared to the total expected efforts for the contract. The use of the effort based input method requires significant judgment relative to estimating total efforts, including assumptions relative to the length of time to complete the project and the nature and complexity of the work to be performed. Estimates of total efforts are continuously monitored during the term of the contract and are subject to revision as the contract progresses. When revisions in estimated contract revenue and efforts are determined, such adjustments are recorded in the period in which they are first identified. An input method is used to recognize revenue as the value of services provided to the customer is best represented by the hours expended to deliver those services. The Company generally recognizes revenue for services over time as the customer simultaneously receives and consumes the benefits as the Company performs for fixed-price contracts related to consulting or other IT services. For these contracts, the Company measures the progress and recognizes revenue using effort-based input methods as the Company performs based on actual efforts spent compared to the total expected efforts for the contract. The cumulative impact of any change in estimates of the contract revenue is reflected in the period in which the changes become known. The Company has applied the as-invoiced practical expedient to recognize revenues for services the Company renders to customers on time and material basis contracts. The Company generally recognizes revenue from fixed-price applications management, maintenance, or support engagements over time as customers receive and consume the benefits of such services and have applied the as-invoiced practical expedient to recognize revenue for services the Company renders to customers based on the amount the Company has a right to invoice, which is representative of the value being delivered. Contracts are often modified to account for changes in contract specification and requirements. The Company considers a contract modification when the modification either creates new or changes the existing enforceable rights and obligations. The accounting for modifications involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price. Certain customers may receive discounts, incentive payments or service level credits. A portion of the revenues relating to such arrangements are accounted for as variable consideration when the amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any revenue will not occur. The Company estimates these amounts based on the expected amount to be provided to customers and adjusts revenues recognized. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price may involve judgment and are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available to us. From time to time, the Company may enter into contracts with customers that include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on an expected cost plus a margin approach. The Company’s warranties generally provide a customer with assurance that the related deliverable will function as the parties intended because it complies with agreed-upon specifications and is therefore not considered as an additional performance obligation in the contract. When the Company receives consideration from a customer prior to transferring services to the customer under the terms of a contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as revenue after the Company has transferred control of the services to the customer and all revenue recognition criteria are met. The Company’s payment terms vary by the type and location of its customers. The term between invoicing and when payment is due is not significant. As a practical expedient, the Company does not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is one year or less. The Company reports gross reimbursable “out-of-pocket” expenses incurred as both revenues and cost of revenues. Any tax assessed by a governmental authority that is incurred as a result of a revenue transaction (e.g. sales tax) is excluded from the Company’s assessment of transaction prices. Costs to obtain and fulfill The Company’s costs to obtain contracts are generally expensed as incurred, as the liability is not solely a result of obtaining the contract. The costs to obtain contracts are triggered by multiple conditions such as being contingent on future performance, including continued employment and revenue recognized associated with the contract. The Company’s recurring operating costs for contracts with customers are recognized as expense as incurred. Certain eligible costs incurred in the initial phases of the Company’s application maintenance, business process outsourcing and infrastructure services contracts (i.e. set-up or transition costs) are capitalized when such costs (1) relate directly to the contract, (2) generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future, and (3) are expected to be recovered. These costs are expensed ratably over the estimated life of the customer relationship, including expected renewals. In determining the estimated life of the customer relationship, the Company evaluates the contract term, the expected life of the enhanced assets as well as the rate of technological and industry change. Capitalized amounts are monitored regularly for impairment. Impairment losses are recorded when projected remaining undiscounted operating cash flows are not sufficient to recover the carrying amount of the capitalized costs to fulfill. The following table presents information related to the capitalized costs to fulfill, such as set-up or transition activities, for the nine months ended December 31, 2018: Costs to Fulfill Balance at April 1, 2018 $ 4,278 Costs capitalized 2,155 Amortization expense (1,656) Foreign currency translation adjustments (174) Balance at December 31, 2018 $ 4,603 Costs to fulfill are recorded in “Other current assets” and “Other long-term assets” in the consolidated balance sheets. The following table summarizes the impacts of changes in accounting policies after adoption of ASC 606 on the Company’s consolidated financial statements as of and for the three and nine months ended December 31, 2018: As of December 31, 2018 Impacts of the New As reported Pro-forma Amounts Revenue standard Balance Sheet : Assets Other current assets (1) $ 26,978 $ 26,447 $ 531 Total current assets 531 Deferred income taxes (3) 24,220 24,527 (307) Other long-term assets (1) 22,201 22,244 (43) Total Assets $ 181 Liabilities, Series A Convertible Preferred Stock, Redeemable noncontrolling interest and Stockholders’ equity Deferred revenue (2) 6,120 7,051 (931) Total current liabilities (931) Stockholders’ equity: Retained earnings 243,006 241,894 1,112 Total liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity $ 181 Three Months ended Nine Months ended December 31, 2018 December 31, 2018 Impact from Impact from Pro-forma New Revenue Pro-forma New Revenue As reported Amounts Standard As reported Amounts Standard Revenue (2) $ 314,681 $ 314,017 $ 664 $ 920,232 $ 919,301 $ 931 Costs of revenue (1) 221,461 221,560 (99) 654,288 654,776 (488) Gross profit 93,220 92,457 763 265,944 264,525 1,419 Operating expenses: Selling, general and administrative expenses 73,935 73,935 — 218,716 218,716 — Income from operations 19,285 18,522 763 47,228 45,809 1,419 Other income (expense) 3,912 3,912 - (22,173) (22,173) - Income before income tax expense 23,197 22,434 763 25,055 23,636 1,419 Income tax expense (3) 10,400 10,264 136 15,863 15,556 307 Net income $ 12,797 $ 12,170 $ 627 $ 9,192 8,080 $ 1,112 Less: net income attributable to noncontrolling interests, net of tax 221 221 — 1,407 1,407 — Net income available to Virtusa stockholders $ 12,576 $ 11,949 $ 627 $ 7,785 6,673 $ 1,112 Less: Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 — 3,262 3,262 — Net income available to Virtusa common stockholders 11,489 10,862 627 4,523 3,411 1,112 Basic earnings per share available to Virtusa common stockholders $ 0.38 $ 0.36 $ 0.02 $ 0.15 0.11 $ 0.04 Diluted earnings per share available to Virtusa common stockholders $ 0.37 $ 0.35 $ 0.02 $ 0.15 0.11 $ 0.04 Notes (1) Reflects the impact of a longer period of amortization for costs to fulfill a contract. (2) Reflects the impact of changes in timing of revenue recognition on our software licenses and certain fixed-price application maintenance contracts. (3) Reflects the income tax impact of the above items. Receivables and Contract Balances The Company classifies its right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). The Company presents such receivables in accounts receivable or unbilled accounts receivable, in its consolidated statements of financial position at their net estimated realizable value. Contract assets included in unbilled accounts receivable are recorded when services have been provided but the Company does not have an unconditional right to receive consideration. Contracts assets are primarily related to unbilled amounts on fixed-price contracts utilizing the input method of revenue recognition. The timing between services rendered and timing of payment is less than one year. The Company recognizes an impairment loss when the contract carrying amount is greater than the remaining consideration receivable, less directly related costs to be incurred. The table below shows significant movements during the nine months ended December 31, 2018 in contract assets: Contract Assets Balance at April 1, 2018 $ 15,998 Revenues recognized during the period but not yet billed 92,564 Amounts billed (95,457) Other (507) Balance at December 31, 2018 $ 12,598 Contract liabilities comprise amounts billed to customers for revenues not yet earned. Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods. The table below shows significant movements in the deferred revenue balances during the nine months ended December 31, 2018: Contract Liabilities Balance at April 1, 2018 $ 7,908 Amounts billed but not yet recognized as revenues 5,310 Revenues recognized related to the opening balance of deferred revenue (6,761) Other (337) Balance at December 31, 2018 $ 6,120 Remaining performance obligation ASC 606 requires that the Company discloses the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of December 31, 2018. This disclosure is not required for: (1) (2) (3) (4) Many of the Company’s performance obligations meet one or more of these exemptions. As of December 31, 2018, the aggregate amount of transaction price allocated to remaining performance obligations, other than those meeting the exclusion criteria above, was $50,363 and will be recognized as revenue within 4 years. Disaggregation of Revenue The table below presents disaggregated revenues from the Company’s contracts with customers by geography, industry groups, service offerings and contract-type. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by industry, market and other economic factors. Three Months Ended Nine Months Ended Revenue by geography: December 31, 2018 December 31, 2018 North America $ 224,143 $ 652,076 Europe 65,046 192,175 Rest of World 25,492 75,981 Consolidated revenue $ 314,681 $ 920,232 Three Months Ended Nine Months Ended Revenue by Customer’s Industry Groups December 31, 2018 December 31, 2018 Banking financial services insurance $ 197,329 $ 578,138 Communications and Technology 89,159 257,527 Media & Information and Other 28,193 84,567 Consolidated revenue $ 314,681 $ 920,232 Three Months Ended Nine Months Ended Revenue by service offerings December 31, 2018 December 31, 2018 Application outsourcing $ 165,986 $ 488,584 Consulting 148,695 431,648 Consolidated revenue $ 314,681 $ 920,232 Three Months Ended Nine Months Ended Revenue by contract type December 31, 2018 December 31, 2018 Time-and-materials $ 189,134 $ 552,530 Fixed-price* 125,547 367,702 Consolidated revenue $ 314,681 $ 920,232 * Fixed-price includes both retainer-billing basis and fixed-price progress towards completion

Series A Convertible Preferred

Series A Convertible Preferred Stock	9 Months Ended
	Dec. 31, 2018
Series A Convertible Preferred Stock.
Series A Convertible Preferred Stock	(9) Series A Convertible Preferred Stock On May 3, 2017, the Company entered into an investment agreement with The Orogen Group (‘‘Orogen’’) pursuant to which Orogen purchased 108,000 shares of the Company’s newly issued Series A Convertible Preferred Stock, initially convertible into 3,000,000 shares of common stock, for an aggregate purchase price of $108,000 with an initial conversion price of $36.00 (the ‘‘Orogen Preferred Stock Financing’’). Under the terms of the investment, the Series A Convertible Preferred Stock has a 3.875% dividend per annum, payable quarterly in additional shares of common stock and/or cash at the Company’s option. If any shares of Series A Convertible Preferred Stock have not been converted into common stock prior to May 3, 2024, the Company will be required to repurchase such shares at a repurchase price equal to the liquidation preference of the repurchased shares plus the amount of accumulated and unpaid dividends thereon. If the Company fails to effect such repurchase, the dividend rate on the Series A Convertible Preferred Stock will increase by 1% per annum and an additional 1% per annum on each anniversary of May 3, 2024 during the period in which such failure to effect the repurchase is continuing, except that the dividend rate will not increase to more than 6.875% per annum. In connection with the issuance of the Series A Convertible Preferred Stock, the Company incurred direct and incremental expenses of $1,154, including financial advisory fees, closing costs, legal expenses and other offering-related expenses. These issuance costs are recorded as a reduction to the proceeds received from issuance of Series A Convertible Preferred Stock. These direct and incremental expenses reduced the Series A Convertible Preferred Stock, and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date, May 3, 2024. During the three and nine months ended December 31, 2018 and 2017, the Company recorded accretions to the Series A Convertible Preferred Stock related to its issuance cost. Holders of Series A Convertible Preferred Stock are entitled to a cumulative dividend at the rate of 3.875% per annum, payable quarterly in arrears. During the nine months ended December 31, 2018 and 2017, the Company has paid $3,138 and $2,081, respectively, as cash dividend on Series A Convertible Preferred Stock. As of December 31, 2018, the Company had declared and accrued dividends of $686 associated with the Series A Convertible Preferred Stock.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets
Goodwill and Intangible Assets	(10) Goodwill and Intangible Assets Goodwill: The Company has one operating segment. The following are details of the changes in goodwill balance at December 31, 2018: Amount Balance at April 1, 2018 $ 297,251 Preliminary fair value adjustment (5,870) Foreign currency translation adjustments (10,028) Balance at December 31, 2018 $ 281,353 The acquisition costs and goodwill balance deductible for our business acquisitions for tax purposes are $147,216 The acquisition costs and goodwill balance not deductible for tax purposes are $147,041 and relate to the Company’s TradeTech acquisition (closed on January 2, 2014), the Polaris acquisition and the eTouch India acquisition. Intangible Assets: The following are details of the Company’s intangible asset carrying amounts acquired and amortization at December 31, 2018. Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amortizable intangible assets: Customer relationships 12.2 $ 133,484 $ 41,899 $ 91,585 Trademark 2.1 3,693 3,111 582 Technology 5.0 500 341 159 12.0 $ 137,677 $ 45,351 $ 92,326 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, 2018
Income Taxes
Income Taxes	(11) 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 44.8% and 63.3% for the three and nine months ended December 31, 2018, as compared to an effective tax rate of 148.0% and 86.1% for the three and nine months ended December 31, 2017. The Company’s effective tax rate for the three and nine months ended December 31, 2018 was significantly impacted by electing disregarded entity treatment for certain foreign subsidiaries, Global Intangible Low—taxed Income (“GILTI”) provisions and executive compensation limitations enacted in the Tax Cuts and Jobs Act (the “Tax Act”), enacted on December 22, 2017 by the U.S. government. The Company’s reported effective tax rate is also impacted by jurisdictional mix of profits and losses in which the Company operates, foreign 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. During the three and nine months ended December 31, 2018, the Company elected to treat several foreign entities as disregarded entities. The earnings of these subsidiaries will be subject to US taxation as well as local taxation with a corresponding foreign tax credit, at the election of the Company. The election resulted in a deferred tax charge of $6,288 during the nine months ended December 31, 2018. The election also makes available to the Company benefits of foreign tax credits. The Company’s income tax provision for the three and nine months ended December 31, 2018 includes the expected impact of GILTI and executive compensation limitations of the Tax Act impacting our operating results for the Company’s 2019 fiscal year ended March 31, 2019. The Company’s aggregate income tax rate in foreign jurisdictions is comparable to its income tax rate in the United States, as a result of the Tax Act, other than in jurisdictions in which the Company has tax holiday benefits. The Tax Act contains several key tax provisions that have impacted the Company, including the reduction of the corporate income tax rate to 21% effective January 1, 2018. The Tax Act also includes a variety of other changes, such as a deemed repatriation tax on accumulated foreign earnings, a limitation on the tax deductibility of interest expense, acceleration of business asset expensing, and reduction in the amount of executive pay that could qualify as a tax deduction, among others. The lower corporate income tax rate required the Company to remeasure its U.S. deferred tax assets and liabilities as well as reassess the realizability of its deferred tax assets and liabilities. ASC Topic 740, Income Taxes, requires the Company to recognize the effect of the tax law changes in the period of enactment. The Securities and Exchange Commission has issued Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Job Act (“SAB 118”), which allows the Company to record provisional amounts during a measurement period of up to one year after the enactment of the Tax Act to finalize the recording of the related tax impacts. During the fiscal year ended March 31, 2018, the Company recorded a provisional charge of $17,834 for deemed repatriation of unremitted earnings and a provisional charge of $4,890 primarily to remeasure the Company’s opening U.S. deferred tax assets to reflect the lower statutory rate at which they will be realized. The Company has elected to pay the During the three months ended December 31, 2018, the Company made a final assessment of the deemed repatriation tax on unremitted earnings and the remeasurement of the Company’s opening U.S. deferred tax assets to reflect the lower statutory rate by the Tax Act as required by SAB 118. During the three months ended December 31, 2018, the Company recognized a $1,628 reduction to income tax expense related to the deemed repatriation of unremitted earnings as the Company finalized its provisional calculation related to the enactment of the Tax Act. The total impact from the Tax Act was $21,096. At December 31, 2018, the remaining deemed repatriation balance is $14,779, of which $1,139 is included in income tax payable and $13,640 is included in long-term liabilities in the consolidated balance sheet. The U.S. Tax Act subjects a U.S. shareholder to GILTI earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company has elected to provide for GILTI in the year incurred. The Company’s results for the nine months ended December 31, 2018 include the expected impact of GILTI. Given the complexity of the GILTI provisions, and foreign tax credit provisions, the Company continues to evaluate the effects of the GILTI provisions on its results. The Company continues to review the anticipated impacts of the base erosion anti-abuse tax (“BEAT”), and the associated safe harbor on inter-company payments, which is effective for our fiscal year ended March 31, 2019. The Company has not recorded any impact associated with BEAT in the tax rate for the nine months ended December 31, 2018 given the Company’s understanding of current guidance. 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 in a specific jurisdiction. The Company has $19,573 and $1,726 of net deferred tax assets in the United States and the United Kingdom, respectively, at December 31, 2018. The Company has not recorded valuation allowance as management has concluded it is more likely than not to be utilized before expiration. The Company expects sufficient taxable income in future periods related to the impact of the GILTI and the election to treat several foreign entities as disregarded entities. The Company’s Indian subsidiaries operate several development centers in areas designated a special economic zone, or SEZ, under the SEZ Act of 2005. In particular, the Company was approved as an SEZ Co-developer and has built a campus on a 6.3 acre parcel of land in Hyderabad, India that has been designated as an SEZ. As an 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 other units at various stages of tax holiday benefit. 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, 2018, the Company believes it had fulfilled its hiring and investment commitments and is eligible for tax holiday through March 2019. At December 31, 2018, the Company believes it is eligible for continued benefits for the entire 12-year tax holiday. Due to the geographical scope of the Company’s operations, the Company is subject to tax examinations in various jurisdictions. The Company’s ongoing assessments of the more-likely-than-not outcomes of these examinations and related tax positions require judgment and can increase or decrease the Company’s effective tax rate, as well as impact the Company’s operating results. The specific timing of when the resolution of each tax position will be reached is uncertain. The Company does not believe that the outcome of any ongoing examination will have a material effect on its consolidated financial statements within the next twelve months. The Company’s major taxing jurisdictions include the United States, the United Kingdom, India and Sri Lanka. In the United States, the Company remains subject to examination for all tax years ended after March 31, 2014. In the foreign jurisdictions, the Company generally remains subject to examination for tax years ended after March 31, 2005. The Company has been under income tax examination in India, the U.K. and the United States. The Company is currently appealing assessments in India for fiscal years ended March 31, 2005 through 2014. In the United Kingdom, the Company is currently under examination for transfer pricing matters for the years ended March 2014 to March 2017. In the United States, the IRS has initiated an examination of fiscal years ended March 31, 2015 to March 31, 2017. Unrecognized tax benefits represent uncertain tax positions for which the Company has established reserves. At December 31, 2018 and March 31, 2018, the total liability for unrecognized tax benefits was $7,013 and $7,544, respectively. 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, 2018 and 2017, the unrecognized tax benefits decreased by $531 and $107, respectively. The decrease in unrecognized tax benefits in the nine months period ending December 31, 2018 was predominantly due to foreign currency movements and the settlement of a prior period position offset by increases for incremental interest accrued on existing uncertain tax positions. 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 indefinitely reinvested. The Company does not provide for U.S. income taxes on foreign currency translation or applicable withholding tax until a distribution is declared. At December 31, 2018, the Company had approximately $188,183 of cash, cash equivalents, short-term 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. 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, 2018
Concentration of Revenue and Assets
Concentration of Revenue and Assets	(12) 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 December 31, December 31, 2018 2017 2018 2017 Customer revenue: United States of America $ 213,542 $ 162,549 $ 623,224 $ 453,013 United Kingdom 52,248 49,598 154,813 139,612 Rest of World 48,891 51,662 142,195 146,703 Consolidated revenue $ 314,681 $ 263,809 $ 920,232 $ 739,328 December 31, March 31, 2018 2018 Long-lived assets, net of accumulated depreciation and amortization: United States of America $ 211,828 $ 213,024 India 262,320 276,512 Rest of World 24,448 25,281 Consolidated long-lived assets, net $ 498,596 $ 514,817 Revenue from significant clients as a percentage of the Company’s consolidated revenue was as follows: Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Customer 1 18.0 % 20.0 % 17.7 % 19.2 %

Debt

Debt	9 Months Ended
	Dec. 31, 2018
Debt
Debt	(13) Debt On February 6, 2018, the Company entered into a credit agreement (the “Credit Agreement”) dated as of February 6, 2018, by and among the Company, its guarantor subsidiaries party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint book runners and lead arrangers. The Credit Agreement replaced the prior $300,000 credit agreement with J.P. Morgan Securities and Merrill Lynch, Pierce, Fenner & Smith Incorporated and provides for a $200,000 revolving credit facility and a $250,000 term loan and delayed-draw term loan. On August 14, 2018, the Company drew down $32,000 from the credit facility to finance the Polaris Consulting & Services Limited (“Polaris”) delisting open offer. The Company is required under the terms of the Credit Agreement to make quarterly principal payments on the term loan. For the fiscal year ending March 31, 2019, the Company is required to make principal payments of $3,125 per quarter. The Credit Agreement includes customary maximum debt to EBITDA and minimum fixed charge coverage covenants. The term of the Credit Agreement is five years ending February 6, 2023. At December 31, 2018, the interest rates on the term loan and line of credit were 5.03% and 4.95%, respectively. At December 31, 2018, the Company was in compliance with its debt covenants and has provided a quarterly certification to its lenders to that effect. The Company believes that it currently meets all conditions set forth in the Credit Agreement to borrow thereunder and it is not aware of any conditions that would prevent it from borrowing part or all of the remaining available capacity under the existing revolving credit facility at December 31, 2018 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, 2018 March 31, 2018 Notes outstanding under the revolving credit facility $ — $ — Term loan- current maturities 12,500 12,500 Less: deferred financing costs, current (1,093) (1,093) Total $ 11,407 $ 11,407 Long-term debt, less current portion The following summarizes our long-term debt balance as of: December 31, 2018 March 31, 2018 Term loan $ 240,625 $ 250,000 Borrowings under revolving credit facility 87,000 55,000 Less: Current maturities (12,500) (12,500) Deferred financing costs, long-term (3,453) (4,273) Total $ 311,672 $ 288,227 In July 2016 and November 2018, the Company entered into interest rate swap transactions to mitigate Company’s interest rate risk on Company’s variable rate debt (See Note 6 to the consolidated financial statements). 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, 2018, $18,453 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, 2018. No amounts were due as of December 31, 2018, 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.

Redeemable noncontrolling inter

Redeemable noncontrolling interest	9 Months Ended
	Dec. 31, 2018
Redeemable noncontrolling interest
Redeemable noncontrolling interest	(14) Redeemable noncontrolling interest In connection with the Company’s Indian Subsidiary, Virtusa Consulting Services Private Limited (“Virtusa India”) delisting offer of Polaris and subsequent stock exchange approvals, effective August 1, 2018, the Polaris common shares were delisted in accordance with SEBI Delisting Regulations. For a period of one year following the date of delisting, Virtusa India will, in compliance with SEBI Delisting Regulations, permit the public shareholders of Polaris to tender their shares for sale to Virtusa India at the exit price of INR 480 per share. In connection with the Polaris delisting offer, during the nine months ended December 31, 2018, Virtusa India purchased 4,436,342 shares, or approximately 4.3% of Polaris common stock from shareholders for an aggregate purchase price of approximately $30,387. As of December 31, 2018, the Polaris common stock held by noncontrolling interest shareholders was 3,450,896 or approximately 3.34% of Polaris’ basic shares of common stock outstanding. In accordance with ASC 480, Distinguishing Liabilities from Equity, the Company has recorded the fair value of these shares as well as comprehensive income attributable to noncontrolling interest totaling $24,924 and presented this in the mezzanine section of the consolidated balance sheet as redeemable noncontrolling interest. As of December 31, 2018, the Company had approximately $857 of Polaris stock options at fair value that were reclassified to current liabilities related to a deemed cash settlement modification resulting from the delisting offer.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	9 Months Ended
	Dec. 31, 2018
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss	(15) 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, 2018 and 2017: Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Investment securities Beginning balance $ (225) $ 220 $ 69 $ 57 Other comprehensive income (loss) (OCI) before reclassifications net of tax of $0, $38, $(52) and $138 (8) 29 (176) 229 Reclassifications from OCI to other income, net of tax of $0, $(18), $12 and $(33) 271 (21) 125 (17) Less : Noncontrolling interests, net of tax $(5), $(5), $7 and $(27) (8) (10) 12 (51) Comprehensive income (loss) on investment securities, net of tax of $(5), $15, $(33) and $78 255 (2) (39) 161 Closing balance $ 30 $ 218 $ 30 $ 218 Currency translation adjustments Beginning balance $ (57,318) $ (46,135) $ (41,207) $ (50,415) OCI before reclassifications (2,477) 4,641 (20,201) 9,068 Less: Noncontrolling interests (396) (1,943) 1,217 (2,090) Comprehensive income (loss) on currency translation adjustments (2,873) 2,698 (18,984) 6,978 Closing balance $ (60,191) $ (43,437) $ (60,191) $ (43,437) Cash flow hedges Beginning balance $ (5,179) $ 4,274 $ 1,881 $ 11,789 OCI before reclassifications net of tax of $1,608, $1,263, $(1,582), and $1,671 5,014 3,467 (2,931) 3,421 Reclassifications from OCI to —Revenue, net of tax of $178, $(808), $586 and $(2,714) 332 (1,526) 1,087 (5,132) —Costs of revenue, net of tax of $214, $(129), $303 and $(1,289) 632 (1,303) 884 (4,195) —Selling, general and administrative expenses, net of tax of $102, $(53), $147 and $(719) 303 (697) 431 (2,341) — Interest expenses, net of tax of $(74), $(12), $(188) and $(26) (214) (47) (543) (67) Less: Noncontrolling interests, net of tax $(23), $83, $17 and $450 (44) 157 35 850 Comprehensive loss on cash flow hedges, net of tax of $2,005, $344, $(717) and $(2,627) 6,023 51 (1,037) (7,464) Closing balance $ 844 $ 4,325 $ 844 $ 4,325 Benefit plans Beginning balance $ (1,511) $ (1,088) $ (1,424) $ (1,180) OCI before reclassifications net of tax of $0, $0, $348 and $0 3 — (349) — Reclassifications from OCI for prior service credit (cost) to: —Costs of revenue, net of tax of $0 for all periods — 2 — 6 —Selling, general and administrative expenses, net of tax of $0 for all periods — — — 1 Other income (expense), net of tax of $0 for all periods 14 42 Reclassifications from net actuarial gain (loss) amortization to: —Costs of revenue, net of tax of $0 for all periods — 26 — 82 —Selling, general and administrative expenses, net of tax of $0 for all periods — 12 — 36 Other income (expense), net of tax of $0 for all periods 36 (9) 113 (2) Other adjustments 20 — 171 — Less: Noncontrolling interests, net of tax $0 for all periods — — 9 — Comprehensive income (loss) on benefit plans, net of tax of $0, $0, $348 and $0 73 31 (14) 123 Closing balance (1,438) $ (1,057) (1,438) $ (1,057) Accumulated other comprehensive loss $ (60,755) $ (39,951) $ (60,755) $ (39,951)

Unaudited Interim Financial I_2

Unaudited Interim Financial Information (Policies)	9 Months Ended
	Dec. 31, 2018
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, 2018 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on May 25, 2018. 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. For those majority-owned subsidiaries that are not 100% owned by the Company, the interests of the minority owners are accounted for as noncontrolling interests.
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 reported period. Management re-evaluates 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, 2018 and March 31, 2018, 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, 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 consolidated financial statements for a discussion of the fair value of the Company’s other financial instruments.
Recent accounting pronouncements	Recent accounting pronouncements Recently Adopted Accounting Pronouncements Unless otherwise discussed below, the adoption of new accounting standards did not have an impact on the consolidated financial statements. In May 2014, the FASB issued an Accounting Standard Update (“ASU” ) No. 2014-09, Revenue from Contracts with Customers (“Accounting Standard Codification (“ASC”) Topic 606”) as well as other clarifications and technical guidance related to this new revenue standard, including ASC Topic 340-40, Other Assets and Deferred Costs — Contracts with Customers (“ASC 340-40”). ASC Topic 606 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. 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 modified retrospective method. The Company adopted the standard effective April 1, 2018 using the modified retrospective method applied to those contracts which were not completed as of that date. Upon adoption of ASC Topic 606 on April 1, 2018, the Company recorded a net increase to opening retained earnings of approximately $464, after a tax impact of $142. The impact of adoption primarily relates to the longer period of amortization for costs to fulfill a contract compared to the amortization period prior to adoption. The following table summarizes the cumulative effect of adopting ASC Topic 606 using the modified retrospective method of adoption as of April 1, 2018: Balance as of ASC Topic 606 Balance as of March 31, 2018 Adjustments April 1, 2018 Balance Sheet : Assets Other current assets $ 21,229 $ (62) $ 21,167 Deferred income taxes 31,528 (142) 31,386 Other long-term assets 11,772 668 12,440 Stockholders’ equity Retained earnings $ 238,019 $ 464 $ 238,483 See Note 8 “Revenues” in the consolidated financial statements for additional information regarding revenues. 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. The Company adopted this guidance on April 1, 2018. The adoption of this guidance did not have a material impact on the consolidated financial statements, therefore, the Company did not record any cumulative adjustments to the opening retained earnings in 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. The Company adopted the standard effective April 1, 2018 using the retrospective method. As a result of the adoption, the Company restated its consolidated statement of cash flows for all of the prior periods presented. The following table summarizes the impact of this standard on the Company’s consolidated cash flows for the nine months ended December 31, 2017: As Reported Restated Effect Cash flows from investing activities: Increase in restricted cash $ (119) $ — $ 119 Net cash provided by investing activities 3,671 3,790 119 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 4,120 4,123 3 Net increase in cash, cash equivalents and restricted cash 81,810 81,932 122 Cash, cash equivalents and restricted cash, beginning of period 144,908 145,086 178 Cash, cash equivalents and restricted cash, end of period $ 226,718 $ 227,018 $ 300 In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715), “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”, a guidance on presentation of net periodic pension cost and net periodic postretirement benefit cost. The new standard requires that an employer disaggregate the service costs components of net benefit cost. The employer is required to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component, such as in other income and expense. The guidance is effective for fiscal years beginning after December 15, 2017. The Company adopted this guidance effective April 1, 2018. Upon adoption, the Company presented the service cost component in costs of revenue and selling, general and administrative expenses. The other components of net periodic pension cost are presented within other (income) expense in the Consolidated Statements of Income (Loss). The adoption of this guidance did not have a material impact on the consolidated financial statements, therefore, the Company did not retrospectively change the presentation of the financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. The new standard is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. The guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted but no earlier than an entity’s adoption date of Topic 606. The Company early adopted this guidance effective April 1, 2018. The adoption of this guidance did not have an impact on the consolidated financial statements. New Accounting Pronouncements Unless otherwise discussed below, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements. In February 2016, the FASB issued an update (ASU 2016-02) to the standard on leases to increase transparency and comparability among organizations. The FASB subsequently issued ASU 2018-10, ASU 2018-11 in July 2018 and ASU 2018-20 in December 2018, which provide clarifications and improvements to this new standard. ASU 2018-11 also provides the optional transition method which allows companies to apply the new lease standard at the adoption date instead of at the earliest comparative period presented. 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 has developed a transition plan, which includes evaluating its population of leased assets to assess the impact of the ASU on its lease portfolio, and designing and implementing new processes and controls. The Company is currently planning to elect the package of practical expedients which permits the Company to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. While the Company continues to assess the potential impact of this ASU, it does anticipate this ASU will have a material impact on its consolidated balance sheets primarily due to recognizing a right-to-use-asset and a lease liability for operating leases. 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 February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this Update also require certain disclosures about stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The Company is currently evaluating the effect of this new standard will have on its consolidated financial statements and related disclosures.

Unaudited Interim Financial I_3

Unaudited Interim Financial Information (Tables)	9 Months Ended
	Dec. 31, 2018
Recent accounting pronouncements
Summary of cumulative effect of adopting ASC Topic 606 using the modified retrospective method	Balance as of ASC Topic 606 Balance as of March 31, 2018 Adjustments April 1, 2018 Balance Sheet : Assets Other current assets $ 21,229 $ (62) $ 21,167 Deferred income taxes 31,528 (142) 31,386 Other long-term assets 11,772 668 12,440 Stockholders’ equity Retained earnings $ 238,019 $ 464 $ 238,483
ASU 2016-18
Recent accounting pronouncements
Summary of impact of accounting standard adoption	As Reported Restated Effect Cash flows from investing activities: Increase in restricted cash $ (119) $ — $ 119 Net cash provided by investing activities 3,671 3,790 119 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 4,120 4,123 3 Net increase in cash, cash equivalents and restricted cash 81,810 81,932 122 Cash, cash equivalents and restricted cash, beginning of period 144,908 145,086 178 Cash, cash equivalents and restricted cash, end of period $ 226,718 $ 227,018 $ 300

Earnings (Loss) per Share (Tabl

Earnings (Loss) per Share (Tables)	9 Months Ended
	Dec. 31, 2018
Earnings (Loss) per Share
Schedule of components of basic earnings (loss) per share	Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Numerators: Net income (loss) available to Virtusa stockholders $ 12,576 $ (10,055) $ 7,785 $ (1,629) Less: Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 3,262 2,875 Net income (loss) available to Virtusa common stockholders $ 11,489 $ (11,142) $ 4,523 $ (4,504) Denominators: Basic weighted average common shares outstanding 29,893,220 29,295,730 29,764,507 29,387,977 Basic earnings (loss) per share available to Virtusa common stockholders $ 0.38 $ (0.38) $ 0.15 $ (0.15)
Schedule of components of diluted earnings (loss) per share	Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Numerators: Net income (loss) available to Virtusa common stockholders $ 11,489 $ (11,142) $ 4,523 $ (4,504) Add : Series A Convertible Preferred Stock dividends and accretion 1,087 — — — Net income (loss) available to Virtusa common stockholders and assumed conversion $ 12,576 $ (11,142) $ 4,523 $ (4,504) Denominators: Basic weighted average common shares outstanding 29,893,220 29,295,730 29,764,507 29,387,977 Dilutive effect of Series A Convertible Preferred Stock if converted 3,000,000 — — — Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units 768,508 — 833,607 — Weighted average shares—diluted 33,661,728 29,295,730 30,598,114 29,387,977 Diluted earnings (loss) per share available to Virtusa common stockholders $ 0.37 $ (0.38) $ 0.15 $ (0.15)

Investment Securities (Tables)

Investment Securities (Tables)	9 Months Ended
	Dec. 31, 2018
Investment Securities
Summary of investment securities	The following is a summary of investment securities at December 31, 2018: Gross Gross Other-than temporary Amortized Unrealized Unrealized impairment Cost Gains Losses recognized in earnings Fair Value Available-for-sale securities: Corporate bonds: Current $ 8,800 $ — $ (21) $ — $ 8,779 Preference shares: 1,599 — — (885) 714 Time Deposits: Current 18,109 — — — 18,109 Equity securities: Mutual funds: Current 14,564 189 — — 14,753 Equity Shares/ Options: Non-current 7 141 — — 148 Total available-for-sale securities and equity securities $ 43,079 $ 330 $ (21) $ (885) $ 42,503 The following is a summary of investment securities at March 31, 2018: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-sale securities: Corporate bonds: Current $ 25,397 $ — $ (126) $ 25,271 Non-current 2,293 — (22) 2,271 Preference shares: Non-current 1,726 — (70) 1,656 Agency and short-term notes: Current 800 — (1) 799 Mutual funds: Current 1,540 11 — 1,551 Equity Shares/ Options: Non-current 15 198 — 213 Time deposits: Current 18,279 — — 18,279 Total available-for-sale securities $ 50,050 $ 209 $ (219) $ 50,040
Summary of other-than-temporary impairment unrealized losses recognized	Three Months Ended December 31, 2018 Unrealized losses recognized in other comprehensive loss as of September 30, 2018 $ 242 Add: unrealized losses recognized 643 Less: Other-than-temporary impairment recognized in earnings (885) Unrealized losses in other comprehensive loss as of December 31, 2018 $ —
Schedule of proceeds from sales of available-for-sale investment securities and equity securities and gross gains and losses included in earnings as a result	Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Proceeds from sales or maturities of available-for-sale $ 27,633 $ 57,391 $ 88,204 $ 120,220 Gross gains $ 253 $ 241 $ 639 $ 916 Gross losses — (36) (32) (127) Net realized gains on sales of available-for-sale investment $ 253 $ 205 $ 607 $ 789

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Dec. 31, 2018
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, 2018: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ 26,888 — $ 26,888 Equity securities—current — 14,753 — 14,753 Available-for-sales securities—non-current — 714 — 714 Equity securities—non-current — 148 — 148 Derivative financial instruments: Foreign currency derivative contracts — 3,774 — 3,774 Interest Rate Swap Contracts — 1,779 — 1,779 Total assets $ — $ 48,056 $ — $ 48,056 Liabilities: Foreign currency derivative contracts — 1,439 $ — 1,439 Interest Rate Swap Contracts — 2,333 — 2,333 Total liabilities $ — $ 3,772 $ — $ 3,772 The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2018: Level 1 Level 2 Level 3 Total Assets: Investments: Available-for-sales securities—current $ — $ 45,900 — $ 45,900 Available-for-sales securities—non-current — 4,140 — 4,140 Foreign currency derivative contracts — 2,122 — 2,122 Interest Rate Swap Contracts — 2,486 — 2,486 Total assets $ — $ 54,648 $ — $ 54,648 Liabilities: Foreign currency derivative contracts $ — 1,023 $ — 1,023 Interest Rate Swap Contracts — — — — Contingent consideration — — 100 100 Total liabilities $ — $ 1,023 $ 100 $ 1,123

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	9 Months Ended
	Dec. 31, 2018
Derivative Financial Instruments
Schedule of fair value of derivative instruments included in the consolidated balance sheets	Derivatives designated as hedging instruments December 31, 2018 March 31, 2018 Foreign currency exchange contracts: Other current assets $ 2,987 $ 2,109 Other long-term assets $ 787 $ 13 Accrued expenses and other $ 1,439 $ 1,023 Long-term liabilities $ — $ — December 31, 2018 March 31, 2018 Interest rate swap contracts : Other long-term assets $ 1,779 $ 2,486 Long-term liabilities $ 2,333 $ —
Schedule of effect of the Company’s foreign currency exchange and interest rate swap contracts on the consolidated financial statements	Amount of Gain or (Loss) Recognized in AOCI on Derivatives Derivatives Designated as Three Months Ended December 31, Nine Months Ended December 31, Cash Flow Hedging Relationships 2018 2017 2018 2017 Foreign currency exchange contracts $ 9,398 $ 4,211 $ (2,203) $ 4,811 Interest rate swaps $ (2,776) $ 518 $ (2,310) $ 281 Amount of Gain or (Loss) Reclassified from AOCI into Income Location of Gain or (Loss) Reclassified Three Months Ended December 31, Nine Months Ended December 31, from AOCI into Income 2018 2017 2018 2017 Revenue $ (510) $ 2,334 $ (1,673) $ 7,846 Costs of revenue $ (846) $ 1,432 $ (1,187) $ 5,484 Operating expenses $ (405) $ 750 $ (578) $ 3,060 Interest Expenses $ 288 59 $ 731 93 Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives Three Months Ended Nine Months Ended Derivatives not Designated Location of Gain Or (Loss) December 31, December 31, as Hedging Instruments Recognized in Income on Derivatives 2018 2017 2018 2017 Foreign currency exchange contracts Foreign currency transaction gains (losses) $ — $ — $ — $ — Revenue $ 1,131 $ 216 $ 2,237 $ (120) Costs of revenue $ (784) $ (177) $ (1,537) $ 55 Selling, general and administrative expenses $ (75) $ (94) $ (93) $ (41)

Acquisitions (Tables)

Acquisitions (Tables)	9 Months Ended
	Dec. 31, 2018
eTouch
Acquisitions
Summary of the purchase price allocation	Amount Useful Life Consideration Transferred: Cash paid at closing $ 80,000 Fair value of the future payments 57,858 Tax related liability 10,417 Fair value of consideration 148,275 Less: Cash acquired 2,241 Total purchase price, net of cash acquired $ 146,034 Assets and Liabilities: Cash and cash equivalents 2,241 Accounts receivable 15,522 Unbilled receivables 2,986 Prepaid expenses 815 Other current assets 375 Property and equipment 2,798 Other long-term assets 98 Goodwill 79,747 Trademark 900 2 years Customer relationships 53,000 10 - 15 years Accounts payable (3,267) Deferred revenue (852) Accrued expenses and other current liabilities (721) Accrued employee compensation and benefits (4,197) Income taxes payable (250) Deferred income taxes (368) Other long-term liabilities (552) Total purchase price $ 148,275

Revenues (Tables)

Revenues (Tables)	9 Months Ended
	Dec. 31, 2018
Revenues
Schedule of capitalized costs to fulfill	Costs to Fulfill Balance at April 1, 2018 $ 4,278 Costs capitalized 2,155 Amortization expense (1,656) Foreign currency translation adjustments (174) Balance at December 31, 2018 $ 4,603
Schedule of significant movements in contract assets and deferred revenue balances	The table below shows significant movements during the nine months ended December 31, 2018 in contract assets: Contract Assets Balance at April 1, 2018 $ 15,998 Revenues recognized during the period but not yet billed 92,564 Amounts billed (95,457) Other (507) Balance at December 31, 2018 $ 12,598 Contract liabilities comprise amounts billed to customers for revenues not yet earned. Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods. The table below shows significant movements in the deferred revenue balances during the nine months ended December 31, 2018: Contract Liabilities Balance at April 1, 2018 $ 7,908 Amounts billed but not yet recognized as revenues 5,310 Revenues recognized related to the opening balance of deferred revenue (6,761) Other (337) Balance at December 31, 2018 $ 6,120
Schedule of disaggregation of revenue	Three Months Ended Nine Months Ended Revenue by geography: December 31, 2018 December 31, 2018 North America $ 224,143 $ 652,076 Europe 65,046 192,175 Rest of World 25,492 75,981 Consolidated revenue $ 314,681 $ 920,232 Three Months Ended Nine Months Ended Revenue by Customer’s Industry Groups December 31, 2018 December 31, 2018 Banking financial services insurance $ 197,329 $ 578,138 Communications and Technology 89,159 257,527 Media & Information and Other 28,193 84,567 Consolidated revenue $ 314,681 $ 920,232 Three Months Ended Nine Months Ended Revenue by service offerings December 31, 2018 December 31, 2018 Application outsourcing $ 165,986 $ 488,584 Consulting 148,695 431,648 Consolidated revenue $ 314,681 $ 920,232 Three Months Ended Nine Months Ended Revenue by contract type December 31, 2018 December 31, 2018 Time-and-materials $ 189,134 $ 552,530 Fixed-price* 125,547 367,702 Consolidated revenue $ 314,681 $ 920,232
ASU 2014-09
Revenues
Summary of impact of changes in accounting policies after adoption of ASC 606	As of December 31, 2018 Impacts of the New As reported Pro-forma Amounts Revenue standard Balance Sheet : Assets Other current assets (1) $ 26,978 $ 26,447 $ 531 Total current assets 531 Deferred income taxes (3) 24,220 24,527 (307) Other long-term assets (1) 22,201 22,244 (43) Total Assets $ 181 Liabilities, Series A Convertible Preferred Stock, Redeemable noncontrolling interest and Stockholders’ equity Deferred revenue (2) 6,120 7,051 (931) Total current liabilities (931) Stockholders’ equity: Retained earnings 243,006 241,894 1,112 Total liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity $ 181 Three Months ended Nine Months ended December 31, 2018 December 31, 2018 Impact from Impact from Pro-forma New Revenue Pro-forma New Revenue As reported Amounts Standard As reported Amounts Standard Revenue (2) $ 314,681 $ 314,017 $ 664 $ 920,232 $ 919,301 $ 931 Costs of revenue (1) 221,461 221,560 (99) 654,288 654,776 (488) Gross profit 93,220 92,457 763 265,944 264,525 1,419 Operating expenses: Selling, general and administrative expenses 73,935 73,935 — 218,716 218,716 — Income from operations 19,285 18,522 763 47,228 45,809 1,419 Other income (expense) 3,912 3,912 - (22,173) (22,173) - Income before income tax expense 23,197 22,434 763 25,055 23,636 1,419 Income tax expense (3) 10,400 10,264 136 15,863 15,556 307 Net income $ 12,797 $ 12,170 $ 627 $ 9,192 8,080 $ 1,112 Less: net income attributable to noncontrolling interests, net of tax 221 221 — 1,407 1,407 — Net income available to Virtusa stockholders $ 12,576 $ 11,949 $ 627 $ 7,785 6,673 $ 1,112 Less: Series A Convertible Preferred Stock dividends and accretion 1,087 1,087 — 3,262 3,262 — Net income available to Virtusa common stockholders 11,489 10,862 627 4,523 3,411 1,112 Basic earnings per share available to Virtusa common stockholders $ 0.38 $ 0.36 $ 0.02 $ 0.15 0.11 $ 0.04 Diluted earnings per share available to Virtusa common stockholders $ 0.37 $ 0.35 $ 0.02 $ 0.15 0.11 $ 0.04 Notes (1) Reflects the impact of a longer period of amortization for costs to fulfill a contract. (2) Reflects the impact of changes in timing of revenue recognition on our software licenses and certain fixed-price application maintenance contracts. (3) Reflects the income tax impact of the above items.

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets
Schedule of changes in goodwill	Amount Balance at April 1, 2018 $ 297,251 Preliminary fair value adjustment (5,870) Foreign currency translation adjustments (10,028) Balance at December 31, 2018 $ 281,353
Schedule of 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, 2018. Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amortizable intangible assets: Customer relationships 12.2 $ 133,484 $ 41,899 $ 91,585 Trademark 2.1 3,693 3,111 582 Technology 5.0 500 341 159 12.0 $ 137,677 $ 45,351 $ 92,326

Concentration of Revenue and _2

Concentration of Revenue and Assets (Tables)	9 Months Ended
	Dec. 31, 2018
Concentration of Revenue and Assets
Schedule of revenue attributed to geographic areas based on location of the client	Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Customer revenue: United States of America $ 213,542 $ 162,549 $ 623,224 $ 453,013 United Kingdom 52,248 49,598 154,813 139,612 Rest of World 48,891 51,662 142,195 146,703 Consolidated revenue $ 314,681 $ 263,809 $ 920,232 $ 739,328
Schedule of long-lived assets, net of accumulated depreciation and amortization, attributed to geographic areas based on location of assets	December 31, March 31, 2018 2018 Long-lived assets, net of accumulated depreciation and amortization: United States of America $ 211,828 $ 213,024 India 262,320 276,512 Rest of World 24,448 25,281 Consolidated long-lived assets, net $ 498,596 $ 514,817
Schedule of revenue from significant clients as a percentage of Company's consolidated revenue	Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Customer 1 18.0 % 20.0 % 17.7 % 19.2 %

Debt (Tables)

Debt (Tables)	9 Months Ended
	Dec. 31, 2018
Debt
Summary of short-term debt balances	December 31, 2018 March 31, 2018 Notes outstanding under the revolving credit facility $ — $ — Term loan- current maturities 12,500 12,500 Less: deferred financing costs, current (1,093) (1,093) Total $ 11,407 $ 11,407
Summary of long-term debt balances	December 31, 2018 March 31, 2018 Term loan $ 240,625 $ 250,000 Borrowings under revolving credit facility 87,000 55,000 Less: Current maturities (12,500) (12,500) Deferred financing costs, long-term (3,453) (4,273) Total $ 311,672 $ 288,227

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)	9 Months Ended
	Dec. 31, 2018
Accumulated Other Comprehensive Loss
Schedule of changes in accumulated other comprehensive loss by component	Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 Investment securities Beginning balance $ (225) $ 220 $ 69 $ 57 Other comprehensive income (loss) (OCI) before reclassifications net of tax of $0, $38, $(52) and $138 (8) 29 (176) 229 Reclassifications from OCI to other income, net of tax of $0, $(18), $12 and $(33) 271 (21) 125 (17) Less : Noncontrolling interests, net of tax $(5), $(5), $7 and $(27) (8) (10) 12 (51) Comprehensive income (loss) on investment securities, net of tax of $(5), $15, $(33) and $78 255 (2) (39) 161 Closing balance $ 30 $ 218 $ 30 $ 218 Currency translation adjustments Beginning balance $ (57,318) $ (46,135) $ (41,207) $ (50,415) OCI before reclassifications (2,477) 4,641 (20,201) 9,068 Less: Noncontrolling interests (396) (1,943) 1,217 (2,090) Comprehensive income (loss) on currency translation adjustments (2,873) 2,698 (18,984) 6,978 Closing balance $ (60,191) $ (43,437) $ (60,191) $ (43,437) Cash flow hedges Beginning balance $ (5,179) $ 4,274 $ 1,881 $ 11,789 OCI before reclassifications net of tax of $1,608, $1,263, $(1,582), and $1,671 5,014 3,467 (2,931) 3,421 Reclassifications from OCI to —Revenue, net of tax of $178, $(808), $586 and $(2,714) 332 (1,526) 1,087 (5,132) —Costs of revenue, net of tax of $214, $(129), $303 and $(1,289) 632 (1,303) 884 (4,195) —Selling, general and administrative expenses, net of tax of $102, $(53), $147 and $(719) 303 (697) 431 (2,341) — Interest expenses, net of tax of $(74), $(12), $(188) and $(26) (214) (47) (543) (67) Less: Noncontrolling interests, net of tax $(23), $83, $17 and $450 (44) 157 35 850 Comprehensive loss on cash flow hedges, net of tax of $2,005, $344, $(717) and $(2,627) 6,023 51 (1,037) (7,464) Closing balance $ 844 $ 4,325 $ 844 $ 4,325 Benefit plans Beginning balance $ (1,511) $ (1,088) $ (1,424) $ (1,180) OCI before reclassifications net of tax of $0, $0, $348 and $0 3 — (349) — Reclassifications from OCI for prior service credit (cost) to: —Costs of revenue, net of tax of $0 for all periods — 2 — 6 —Selling, general and administrative expenses, net of tax of $0 for all periods — — — 1 Other income (expense), net of tax of $0 for all periods 14 42 Reclassifications from net actuarial gain (loss) amortization to: —Costs of revenue, net of tax of $0 for all periods — 26 — 82 —Selling, general and administrative expenses, net of tax of $0 for all periods — 12 — 36 Other income (expense), net of tax of $0 for all periods 36 (9) 113 (2) Other adjustments 20 — 171 — Less: Noncontrolling interests, net of tax $0 for all periods — — 9 — Comprehensive income (loss) on benefit plans, net of tax of $0, $0, $348 and $0 73 31 (14) 123 Closing balance (1,438) $ (1,057) (1,438) $ (1,057) Accumulated other comprehensive loss $ (60,755) $ (39,951) $ (60,755) $ (39,951)

Unaudited Interim Financial I_4

Unaudited Interim Financial Information - ASC Topic 606 (Details) - USD ($) $ in Thousands	Apr. 01, 2018	Jun. 30, 2018	Dec. 31, 2018	Mar. 31, 2018
Recent accounting pronouncements
Net increase to opening retained earnings, after tax		$ 464
Assets
Other current assets	$ 21,167		$ 26,978	$ 21,229
Deferred income taxes	31,386		24,220	31,528
Other long-term assets	12,440		22,201	11,772
Stockholders' equity
Retained earnings	238,483		243,006	$ 238,019
ASU 2014-09
Recent accounting pronouncements
Net increase to opening retained earnings, after tax	464
Tax impact on opening retained earnings	142
ASU 2014-09 | Impact from New Revenue Standard, ASC Topic 606
Assets
Other current assets	(62)		531
Deferred income taxes	(142)		(307)
Other long-term assets	668		(43)
Stockholders' equity
Retained earnings	$ 464		$ 1,112

Unaudited Interim Financial I_5

Unaudited Interim Financial Information - Restricted Cash (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from investing activities:
Net cash provided by investing activities	$ (22,047)	$ 3,790
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(13,530)	4,123
Net increase in cash, cash equivalents and restricted cash	15,938	81,932
Cash, cash equivalents and restricted cash, beginning of period	195,236	145,086
Cash, cash equivalents and restricted cash, end of period	$ 211,174	227,018
ASU 2016-18 | As Reported
Cash flows from investing activities:
Increase in restricted cash		(119)
Net cash provided by investing activities		3,671
Effect of exchange rate changes on cash, cash equivalents and restricted cash		4,120
Net increase in cash, cash equivalents and restricted cash		81,810
Cash, cash equivalents and restricted cash, beginning of period		144,908
Cash, cash equivalents and restricted cash, end of period		226,718
ASU 2016-18 | Effect
Cash flows from investing activities:
Increase in restricted cash		119
Net cash provided by investing activities		119
Effect of exchange rate changes on cash, cash equivalents and restricted cash		3
Net increase in cash, cash equivalents and restricted cash		122
Cash, cash equivalents and restricted cash, beginning of period		178
Cash, cash equivalents and restricted cash, end of period		$ 300

Earnings (Loss) per Share - Bas

Earnings (Loss) per Share - Basic earnings (loss) per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Numerator:
Net income (loss) available to Virtusa stockholders	$ 12,576	$ (10,055)	$ 7,785	$ (1,629)
Less: Series A Convertible Preferred Stock dividends and accretion	1,087	1,087	3,262	2,875
Net income (loss) available to Virtusa common stockholders	$ 11,489	$ (11,142)	$ 4,523	$ (4,504)
Denominator:
Basic weighted average common shares outstanding (in shares)	29,893,220	29,295,730	29,764,507	29,387,977
Basic earnings (loss) per share available to Virtusa common stockholders (in dollars per share)	$ 0.38	$ (0.38)	$ 0.15	$ (0.15)

Earnings (Loss) per Share - Dil

Earnings (Loss) per Share - Diluted earnings (loss) per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Numerator:
Net income (loss) available to Virtusa common stockholders	$ 11,489	$ (11,142)	$ 4,523	$ (4,504)
Add: Series A Convertible Preferred Stock dividends and accretion	1,087
Net income (loss) available to Virtusa common stockholders and assumed conversion	$ 12,576	$ (11,142)	$ 4,523	$ (4,504)
Denominator:
Basic weighted average common shares outstanding (in shares)	29,893,220	29,295,730	29,764,507	29,387,977
Dilutive effect of Series A Convertible Preferred Stock if converted	3,000,000
Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units (in shares)	768,508		833,607
Weighted average shares-diluted (in shares)	33,661,728	29,295,730	30,598,114	29,387,977
Diluted earnings (loss) per share available to Virtusa common stockholders (in dollars per share)	$ 0.37	$ (0.38)	$ 0.15	$ (0.15)

Earnings (Loss) per Share - Ant

Earnings (Loss) per Share - Anti-dilutive securities (Details) - shares	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Employee stock options and unvested restricted stock awards and restricted stock units
Anti-dilutive securities
Shares excluded from computation of earnings (loss) per share	20,617	1,366,212	13,745	1,598,783
Series A Convertible Preferred Stock
Anti-dilutive securities
Shares excluded from computation of earnings (loss) per share	0	3,000,000	3,000,000	2,637,363

Investment Securities (Details)

Investment Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Total available-for-sale and equity securities
Amortized Cost	$ 43,079		$ 43,079
Gross Unrealized Gains	330		330
Gross Unrealized Losses	(21)		(21)
Other-than temporary impairment recognized in earnings	(885)		(885)
Fair Value	42,503		42,503
Available-for-sale securities (prior guidance)
Amortized Cost					$ 50,050
Gross Unrealized Gains					209
Gross Unrealized Losses					(219)
Fair Value					50,040
Other-than-temporary impairment losses recognized
Unrealized losses recognized in other comprehensive loss at beginning	242
Add: unrealized losses recognized	643
Less: Other than temporary impairment recognized in earnings	(885)		(885)
Proceeds from sales of available-for-sale investment securities and the gross gains and losses
Proceeds from sales or maturities of available-for-sale investment securities and equity securities	27,633	$ 57,391	88,204	$ 120,220
Gross gains	253	241	639	916
Gross losses		(36)	(32)	(127)
Net realized gains on sales of available-for-sale investment securities and equity securities	253	$ 205	607	$ 789
Corporate bonds | Current
Available-for-sale securities
Amortized Cost	8,800		8,800
Gross Unrealized Losses	(21)		(21)
Fair Value	8,779		8,779
Available-for-sale securities (prior guidance)
Amortized Cost					25,397
Gross Unrealized Losses					(126)
Fair Value					25,271
Corporate bonds | Noncurrent
Available-for-sale securities (prior guidance)
Amortized Cost					2,293
Gross Unrealized Losses					(22)
Fair Value					2,271
Preference shares | Noncurrent
Available-for-sale securities
Amortized Cost	1,599		1,599
Other-than temporary impairment recognized in earnings			(885)
Fair Value	714		714
Available-for-sale securities (prior guidance)
Amortized Cost					1,726
Gross Unrealized Losses					(70)
Fair Value					1,656
Agency and short-term notes | Current
Available-for-sale securities (prior guidance)
Amortized Cost					800
Gross Unrealized Losses					(1)
Fair Value					799
Time Deposits | Current
Available-for-sale securities
Amortized Cost	18,109		18,109
Fair Value	18,109		18,109
Available-for-sale securities (prior guidance)
Amortized Cost					18,279
Fair Value					18,279
Mutual funds | Current
Equity securities
Amortized Cost	14,564		14,564
Gross Unrealized Gains	189		189
Fair Value	14,753		14,753
Available-for-sale securities (prior guidance)
Amortized Cost					1,540
Gross Unrealized Gains					11
Fair Value					1,551
Equity Shares/ Options | Noncurrent
Equity securities
Amortized Cost	7		7
Gross Unrealized Gains	141		141
Fair Value	$ 148		$ 148
Available-for-sale securities (prior guidance)
Amortized Cost					15
Gross Unrealized Gains					198
Fair Value					$ 213

Fair Value of Financial Instr_3

Fair Value of Financial Instruments - Financial assets and liabilities measured at fair value on a recurring basis (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Investments:
Available-for-sales securities - current	$ 26,888
Equity securities - current	14,753
Available-for-sales securities - non-current	714
Equity securities - non-current	148
Available-for-sales securities—current (prior guidance)		$ 45,900
Available-for-sales securities—non-current (prior guidance)		4,140
Derivative financial instruments:
Foreign currency derivative contracts	3,774	2,122
Interest Rate Swap Contracts	1,779	2,486
Total assets	48,056	54,648
Liabilities:
Foreign currency derivative contracts	1,439	1,023
Interest Rate Swap Contracts	2,333
Contingent consideration		100
Total liabilities	3,772	1,123
Fair Value Inputs Level2
Investments:
Available-for-sales securities - current	26,888
Equity securities - current	14,753
Available-for-sales securities - non-current	714
Equity securities - non-current	148
Available-for-sales securities—current (prior guidance)		45,900
Available-for-sales securities—non-current (prior guidance)		4,140
Derivative financial instruments:
Foreign currency derivative contracts	3,774	2,122
Interest Rate Swap Contracts	1,779	2,486
Total assets	48,056	54,648
Liabilities:
Foreign currency derivative contracts	1,439	1,023
Interest Rate Swap Contracts	2,333
Total liabilities	$ 3,772	1,023
Fair Value Inputs Level3
Liabilities:
Contingent consideration		100
Total liabilities		$ 100

Derivative Financial Instrume_3

Derivative Financial Instruments - Foreign Currency Derivatives (Details) - Foreign currency exchange contracts - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2018	Mar. 31, 2018
Derivative Financial Instruments
Notional value of outstanding contracts	$ 158,881	$ 140,347
Unrealized net gains related to derivative instruments expected to be reclassified from AOCI into earnings during the next 12 months	$ 1,548
Maximum [Member]
Derivative Financial Instruments
Outstanding term of derivative instruments	18 months

Derivative Financial Instrume_4

Derivative Financial Instruments - Interest rate swaps (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2018USD ($)
Interest rate swaps
Interest rate cash flow hedges
Notional value of outstanding contracts	$ 163,812
Outstanding term of derivative instruments	4 years
2016 interest rate swaps | 1-month LIBOR
Interest rate cash flow hedges
Blended weighted average rate	1.025%
2018 interest rate swaps
Interest rate cash flow hedges
fixed interest rate	2.85%
Percentage of coverage target retain	50.00%
2018 interest rate swaps | LIBOR
Interest rate cash flow hedges
Percentage of coverage on debt	50.00%

Derivative Financial Instrume_5

Derivative Financial Instruments - Fair Value (Details) - Designated As Hedging Instrument - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Foreign currency exchange contracts
Foreign currency exchange and interest rate swap contracts
Other current assets	$ 2,987	$ 2,109
Other long-term assets	787	13
Accrued expenses and other	1,439	1,023
Interest rate swaps
Foreign currency exchange and interest rate swap contracts
Other long-term assets	1,779	$ 2,486
Long-term liabilities	$ 2,333

Derivative Financial Instrume_6

Derivative Financial Instruments - Effect of foreign currency exchange and interest rate swap contracts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Designated As Hedging Instrument | Cash flow hedges | Revenue
Derivative Financial Instruments
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss)	$ (510)	$ 2,334	$ (1,673)	$ 7,846
Designated As Hedging Instrument | Cash flow hedges | Cost of revenue.
Derivative Financial Instruments
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss)	(846)	1,432	(1,187)	5,484
Designated As Hedging Instrument | Cash flow hedges | Operating Expense
Derivative Financial Instruments
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss)	(405)	750	(578)	3,060
Designated As Hedging Instrument | Cash flow hedges | Interest expenses
Derivative Financial Instruments
Amount of Gain or (Loss) Reclassified from AOCI into Income (loss)	288	59	731	93
Designated As Hedging Instrument | Cash flow hedges | Foreign currency exchange contracts
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in AOCI on Derivatives	9,398	4,211	(2,203)	4,811
Designated As Hedging Instrument | Cash flow hedges | Interest rate swaps
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in AOCI on Derivatives	(2,776)	518	(2,310)	281
Nondesignated | Foreign currency exchange contracts | Revenue
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives	1,131	216	2,237	(120)
Nondesignated | Foreign currency exchange contracts | Cost of revenue.
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives	(784)	(177)	(1,537)	55
Nondesignated | Foreign currency exchange contracts | Selling, general and administrative expenses
Derivative Financial Instruments
Amount of Gain or (Loss) Recognized in Income (loss) on Derivatives	$ (75)	$ (94)	$ (93)	$ (41)

Acquisitions - eTouch - Transac

Acquisitions - eTouch - Transaction details (Details) $ in Thousands	Sep. 12, 2019USD ($)	Mar. 12, 2019USD ($)	Mar. 12, 2018USD ($)tranche	Dec. 31, 2018USD ($)
Acquisitions
Increase (reduction) in goodwill related to fair value assessment				$ (5,870)
Tax liability payable
Acquisitions
Increase (reduction) in goodwill related to fair value assessment				1,104
Customer relationships and trademark
Acquisitions
Increase (reduction) in goodwill related to fair value assessment				(7,100)
Other adjustments
Acquisitions
Increase (reduction) in goodwill related to fair value assessment				$ 126
eTouch
Acquisitions
Cash purchase price			$ 140,000
Maximum additional amount set aside for retention bonuses			$ 15,000
Number of tranches for payment of purchase price | tranche			3
Cash payments for acquisition			$ 80,000
Consideration paid at closing, from cash on hand			10,000
eTouch | Scenario Forecast
Acquisitions
Cash payments for acquisition	$ 17,500	$ 42,500
eTouch | Term loan and delayed-draw term loan | Credit Agreement | JPM
Acquisitions
Consideration paid at closing, from cash proceeds under credit agreement			70,000
eTouch US
Acquisitions
Cash payments for acquisition			66,000
eTouch India
Acquisitions
Cash payments for acquisition			$ 14,000

Acquisitions - eTouch - Purchas

Acquisitions - eTouch - Purchase price allocation (Details) - USD ($) $ in Thousands	Mar. 12, 2018	Dec. 31, 2018	Mar. 31, 2018
Assets and Liabilities:
Goodwill		$ 281,353	$ 297,251
Weighted Average Useful Life		12 years
Trademarks
Assets and Liabilities:
Weighted Average Useful Life		2 years 1 month 6 days
Customer relationships
Assets and Liabilities:
Weighted Average Useful Life		12 years 2 months 12 days
eTouch
Consideration Transferred:
Cash paid at closing	$ 80,000
Fair value of the future payments	57,858
Tax related liability	10,417
Fair value of consideration	148,275
Less: Cash acquired	2,241
Total purchase price, net of cash acquired	146,034
Assets and Liabilities:
Cash and cash equivalents	2,241
Accounts receivable	15,522
Unbilled receivables	2,986
Prepaid expenses	815
Other current assets	375
Property and equipment	2,798
Other long-term assets	98
Goodwill	79,747
Accounts payable	(3,267)
Deferred revenue	(852)
Accrued expenses and other current liabilities	(721)
Accrued employee compensation and benefits	(4,197)
Income taxes payable	(250)
Deferred income taxes	(368)
Other long-term liabilities	(552)
Total purchase price	148,275
eTouch | Trademarks
Assets and Liabilities:
Intangible assets	$ 900
Weighted Average Useful Life	2 years
eTouch | Customer relationships
Assets and Liabilities:
Intangible assets	$ 53,000
eTouch | Customer relationships | Minimum [Member]
Assets and Liabilities:
Weighted Average Useful Life	10 years
eTouch | Customer relationships | Maximum [Member]
Assets and Liabilities:
Weighted Average Useful Life	15 years

Revenues - Capitalized costs (D

Revenues - Capitalized costs (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2018USD ($)
Capitalized costs to fulfill
Balance at the beginning of the period	$ 4,278
Costs capitalized	2,155
Amortization expense	(1,656)
Foreign currency translation adjustments	(174)
Balance at the end of the period	$ 4,603

Revenues - Impacts of changes i

Revenues - Impacts of changes in accounting policies after adoption of ASC 606 on the Company’s consolidated financial statements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Apr. 01, 2018	Mar. 31, 2018
Assets
Other current assets	$ 26,978		$ 26,978		$ 21,167	$ 21,229
Total current assets	566,711		566,711			549,335
Deferred income taxes	24,220		24,220		31,386	31,528
Other long-term assets	22,201		22,201		12,440	11,772
Total assets	1,114,045		1,114,045			1,113,180
Liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity
Deferred revenue	6,120		6,120			7,908
Total current liabilities	240,836		240,836			216,700
Stockholders' equity:
Retained earnings	243,006		243,006		238,483	238,019
Total liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity	1,114,045		1,114,045			$ 1,113,180
Consolidated Statements of Income
Revenue	314,681		920,232
Costs of revenue	221,461	$ 183,420	654,288	$ 528,103
Gross profit	93,220	80,389	265,944	211,225
Operating expenses:
Selling, general and administrative expenses	73,935	66,726	218,716	181,213
Income from operations	19,285	13,663	47,228	30,012
Other income (expense)	3,912	2,843	(22,173)	1,031
Income before income tax expense	23,197	16,506	25,055	31,043
Income tax expense	10,400	24,427	15,863	26,725
Net income (loss)	12,797	(7,921)	9,192	4,318
Less: net income attributable to noncontrolling interests, net of tax	221	2,134	1,407	5,947
Net income (loss) available to Virtusa stockholders	12,576	(10,055)	7,785	(1,629)
Less: Series A Convertible Preferred Stock dividends and accretion	1,087	1,087	3,262	2,875
Net income (loss) available to Virtusa common stockholders	$ 11,489	$ (11,142)	$ 4,523	$ (4,504)
Basic earnings per share available to Virtusa common stockholders (in dollars per share)	$ 0.38	$ (0.38)	$ 0.15	$ (0.15)
Diluted earnings per share available to Virtusa common stockholders (in dollars per share)	$ 0.37	$ (0.38)	$ 0.15	$ (0.15)
Pro-forma Amounts | ASU 2014-09
Assets
Other current assets	$ 26,447		$ 26,447
Deferred income taxes	24,527		24,527
Other long-term assets	22,244		22,244
Liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity
Deferred revenue	7,051		7,051
Stockholders' equity:
Retained earnings	241,894		241,894
Consolidated Statements of Income
Revenue	314,017		919,301
Costs of revenue	221,560		654,776
Gross profit	92,457		264,525
Operating expenses:
Selling, general and administrative expenses	73,935		218,716
Income from operations	18,522		45,809
Other income (expense)	3,912		(22,173)
Income before income tax expense	22,434		23,636
Income tax expense	10,264		15,556
Net income (loss)	12,170		8,080
Less: net income attributable to noncontrolling interests, net of tax	221		1,407
Net income (loss) available to Virtusa stockholders	11,949		6,673
Less: Series A Convertible Preferred Stock dividends and accretion	1,087		3,262
Net income (loss) available to Virtusa common stockholders	$ 10,862		$ 3,411
Basic earnings per share available to Virtusa common stockholders (in dollars per share)	$ 0.36		$ 0.11
Diluted earnings per share available to Virtusa common stockholders (in dollars per share)	$ 0.35		$ 0.11
Impact from New Revenue Standard, ASC Topic 606 | ASU 2014-09
Assets
Other current assets	$ 531		$ 531		(62)
Total current assets	531		531
Deferred income taxes	(307)		(307)		(142)
Other long-term assets	(43)		(43)		668
Total assets	181		181
Liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity
Deferred revenue	(931)		(931)
Total current liabilities	(931)		(931)
Stockholders' equity:
Retained earnings	1,112		1,112		$ 464
Total liabilities, Series A convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity	181		181
Consolidated Statements of Income
Revenue	664		931
Costs of revenue	(99)		(488)
Gross profit	763		1,419
Operating expenses:
Income from operations	763		1,419
Income before income tax expense	763		1,419
Income tax expense	136		307
Net income (loss)	627		1,112
Net income (loss) available to Virtusa stockholders	627		1,112
Net income (loss) available to Virtusa common stockholders	$ 627		$ 1,112
Basic earnings per share available to Virtusa common stockholders (in dollars per share)	$ 0.02		$ 0.04
Diluted earnings per share available to Virtusa common stockholders (in dollars per share)	$ 0.02		$ 0.04

Revenues - Receivable and Contr

Revenues - Receivable and Contract Balances (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2018USD ($)
Significant movements in contract assets
Balance at the beginning of the period	$ 15,998
Revenues recognized during the period but not yet billed	92,564
Amounts billed	(95,457)
Other	(507)
Balance at the end of the period	12,598
Significant movements in deferred revenue balances
Balance at the beginning of the period	7,908
Amounts billed but not yet recognized as revenues	5,310
Revenues recognized related to the opening balance of deferred revenue	(6,761)
Other	(337)
Balance at the end of the period	6,120
Aggregate amount of transaction price allocated to remaining performance obligations	$ 50,363

Revenues - Remaining performanc

Revenues - Remaining performance obligation (Details)	Dec. 31, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-12-31
Remaining performance obligation, expected period of recognition	4 years

Revenues - Disaggregation of Re

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2018
Disaggregation of Revenue
Consolidated revenue	$ 314,681	$ 920,232
Time-and-materials
Disaggregation of Revenue
Consolidated revenue	189,134	552,530
Fixed-price
Disaggregation of Revenue
Consolidated revenue	125,547	367,702
Application outsourcing
Disaggregation of Revenue
Consolidated revenue	165,986	488,584
Consulting
Disaggregation of Revenue
Consolidated revenue	148,695	431,648
Banking financial services insurance
Disaggregation of Revenue
Consolidated revenue	197,329	578,138
Communications and Technology
Disaggregation of Revenue
Consolidated revenue	89,159	257,527
Media & Information and Other
Disaggregation of Revenue
Consolidated revenue	28,193	84,567
North America
Disaggregation of Revenue
Consolidated revenue	224,143	652,076
Europe
Disaggregation of Revenue
Consolidated revenue	65,046	192,175
Rest Of World
Disaggregation of Revenue
Consolidated revenue	$ 25,492	$ 75,981

Series A Convertible Preferre_2

Series A Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	May 03, 2017	Dec. 31, 2018	Dec. 31, 2017
Series A Convertible Preferred Stock
Cash dividends paid		$ 3,138	$ 2,081
Series A Convertible Preferred Stock
Series A Convertible Preferred Stock
Direct and incremental expenses incurred	$ 1,154
Declared and accrued dividends		686
Cash dividends paid		$ 3,138	$ 2,081
Series A Convertible Preferred Stock | After May 3, 2024
Series A Convertible Preferred Stock
Increase in preference dividend rate, per annum upon failure to repurchase (as a percent)		1.00%
Additional increase in preference dividend rate, per annum on each anniversary of the date that the Company is required to effect such repurchase (as a percent)		1.00%
Series A Convertible Preferred Stock | After May 3, 2024 | Maximum [Member]
Series A Convertible Preferred Stock
Dividend rate (as a percent)		6.875%
Series A Convertible Preferred Stock | Orogen
Series A Convertible Preferred Stock
Sale of convertible preferred stock (in shares)	108,000
Shares issuable upon conversion (in shares)	3,000,000
Aggregate purchase price	$ 108,000
Conversion price (in dollars per share)	$ 36
Dividend rate (as a percent)	3.875%

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2018USD ($)segment
Goodwill and Intangible Assets
Number of operating segments | segment	1
Changes in goodwill
Balance at the beginning of the period	$ 297,251
Preliminary fair value adjustment	(5,870)
Foreign currency translation adjustments	(10,028)
Balance at the end of the period	281,353
Acquisition costs and goodwill deductible for tax purposes	147,216
Acquisition costs and goodwill not deductible for tax purposes	$ 147,041

Goodwill and Intangible Asset_3

Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2018	Mar. 31, 2018
Intangible Assets
Weighted Average Useful Life	12 years
Gross Carrying Amount	$ 137,677
Accumulated Amortization	45,351
Net Carrying Amount	$ 92,326	$ 96,001
Customer relationships
Intangible Assets
Weighted Average Useful Life	12 years 2 months 12 days
Gross Carrying Amount	$ 133,484
Accumulated Amortization	41,899
Net Carrying Amount	$ 91,585
Trademarks
Intangible Assets
Weighted Average Useful Life	2 years 1 month 6 days
Gross Carrying Amount	$ 3,693
Accumulated Amortization	3,111
Net Carrying Amount	$ 582
Technology
Intangible Assets
Weighted Average Useful Life	5 years
Gross Carrying Amount	$ 500
Accumulated Amortization	341
Net Carrying Amount	$ 159

Income Taxes - Tax Act (Details

Income Taxes - Tax Act (Details) $ in Thousands	Jan. 01, 2018	Jul. 31, 2018USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017	Dec. 31, 2018USD ($)	Dec. 31, 2017	Mar. 31, 2018USD ($)installment
Income Taxes
Effective tax (benefit) rate (as a percent)			44.80%	148.00%	63.30%	86.10%
Deferred tax charge for disregarded entity election					$ 6,288
Statutory tax rate (as a percent)	21.00%
Effect of Tax Cuts and Jobs Act
Provisional charge for deemed repatriation of unremitted earnings							$ 17,834
Provisional charge for remeasurement of deferred tax assets							$ 4,890
Number of installments to pay deemed repatriation tax on unremitted earnings | installment							8
Payment for deemed repatriation		$ 1,427
Reduction in income tax expense			$ (1,628)
Total impact from the Tax Act			21,096
Deemed repatriation included in income taxes payable			1,139		1,139
Deemed repatriation included in long-term liabilities			13,640		13,640
Deemed repatriation liability			14,779		14,779
United States of America
Effect of Tax Cuts and Jobs Act
Deferred tax asset			19,573		19,573
United Kingdom
Effect of Tax Cuts and Jobs Act
Deferred tax asset			$ 1,726		$ 1,726

Income Taxes - Income tax holid

Income Taxes - Income tax holiday (Details)	9 Months Ended
	Dec. 31, 2018a
Indian Operations In Special Economic Zone | Hyderabad, India
Income Taxes
Parcel of land (in acres)	6.3
Consecutive period of income tax exemption	10 years
Income tax benefits total eligibility period	15 years
Virtusa Private Limited | L [K]
Income Taxes
Income tax exemption period	12 years

Income Taxes - Unrecognized tax

Income Taxes - Unrecognized tax benefits and other (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Income Taxes
Total liability for unrecognized tax benefits	$ 7,013		$ 7,544
Decrease in unrecognized tax benefits	531	$ 107
Cash, cash equivalents, short-term investments and long-term investments available for distribution if not indefinitely reinvested	$ 188,183

Concentration of Revenue and _3

Concentration of Revenue and Assets - Geographic concentration (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Concentration of Revenue and Assets
Revenue	$ 314,681	$ 263,809	$ 920,232	$ 739,328
Long-lived assets, net	498,596		498,596		$ 514,817
United States of America
Concentration of Revenue and Assets
Revenue	213,542	162,549	623,224	453,013
Long-lived assets, net	211,828		211,828		213,024
United Kingdom
Concentration of Revenue and Assets
Revenue	52,248	49,598	154,813	139,612
India
Concentration of Revenue and Assets
Long-lived assets, net	262,320		262,320		276,512
Rest Of World
Concentration of Revenue and Assets
Revenue	48,891	$ 51,662	142,195	$ 146,703
Long-lived assets, net	$ 24,448		$ 24,448		$ 25,281

Concentration of Revenue and _4

Concentration of Revenue and Assets - Revenue percentage (Details)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Customer Concentration Risk | Sales Revenue Net [Member] | Customer One [Member]
Concentration of Revenue and Assets
Revenue from significant clients as a percentage of consolidated revenue	18.00%	20.00%	17.70%	19.20%

Debt - Credit Agreement (Detail

Debt - Credit Agreement (Details) - USD ($) $ in Thousands	Aug. 14, 2018	Feb. 06, 2018	Dec. 31, 2018	Dec. 31, 2017	Feb. 05, 2018
Debt
Amount drawn down on credit facility			$ 32,000	$ 25,000
Credit Agreement | JPM
Debt
Term of credit facility		5 years
Credit Agreement | JPM | Revolving credit facility
Debt
Maximum borrowing capacity under the credit agreement			$ 200,000
Amount drawn down on credit facility	$ 32,000
Interest rate (as a percent)			4.95%
Credit Agreement | JPM | Term loan and delayed-draw term loan
Debt
Maximum borrowing capacity under the credit agreement			$ 250,000
Required principal payments per quarter			$ 3,125
Frequency of required principal payments			quarterly
Interest rate (as a percent)			5.03%
Prior Credit Agreement | JPM
Debt
Maximum borrowing capacity under the credit agreement					$ 300,000

Debt - Current portion of long-

Debt - Current portion of long-term debt (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Current portion of long-term debt
Total	$ 11,407	$ 11,407
JPM
Current portion of long-term debt
Term loan - current maturities	12,500	12,500
Less: deferred financing costs, current	(1,093)	(1,093)
Total	$ 11,407	$ 11,407

Debt - Long-term debt, less cur

Debt - Long-term debt, less current portion (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Less:
Total	$ 311,672	$ 288,227
JPM
Less:
Current maturities	(12,500)	(12,500)
Deferred financing costs, long-term	(3,453)	(4,273)
Total	311,672	288,227
Term loan and delayed-draw term loan | JPM
Long-term debt, less current portion
Term loan and borrowings under revolving credit facility	240,625	250,000
Revolving credit facility | JPM
Long-term debt, less current portion
Term loan and borrowings under revolving credit facility	$ 87,000	$ 55,000

Debt - Sale of accounts receiva

Debt - Sale of accounts receivable (Details) - U.K. Subsidiary $ in Thousands	9 Months Ended
	Dec. 31, 2018USD ($)
Debt
Receivables sold under the terms of the financing agreement	$ 18,453
Amounts due related to a financing agreement to sell certain accounts receivable balances	$ 0

Redeemable noncontrolling int_2

Redeemable noncontrolling interest (Details) $ in Thousands	Aug. 01, 2018₨ / shares	Dec. 31, 2018USD ($)shares
Redeemable noncontrolling interest
Aggregate purchase price of shares of delisted entity		$ 30,387
Virtusa India Private Limited | Polaris
Redeemable noncontrolling interest
Shares held by noncontrolling interest shareholders of delisted entity (as a percent)		3.34%
Virtusa India Private Limited | Polaris
Redeemable noncontrolling interest
Period for public shareholders to tender shares after delisting	1 year
Exit price in delisting of subsidiary (in INR per share) | ₨ / shares	₨ 480
Number of shares purchased from stockholders of delisted subsidiary | shares		4,436,342
Shares purchased from stockholders of delisted subsidiary (as a percent)		4.30%
Aggregate purchase price of shares of delisted entity		$ 30,387
Number of shares held by noncontrolling interest shareholders of delisted entity | shares		3,450,896
Fair value of the redeemable noncontrolling interest		$ 24,924
Stock options reclassified to current liabilities for deemed cash settlement resulting from the delisting offer		$ 857

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Changes in the components of accumulated other comprehensive income (loss)
Balance	$ 359,431	$ 573,394	$ 436,083	$ 585,016
Reclassifications from OCI to:
Other income	444	(492)	(998)	(1,376)
Revenue	(314,681)	(263,809)	(920,232)	(739,328)
Costs of revenue	221,461	183,420	654,288	528,103
Selling, general and administrative expenses	73,935	66,726	218,716	181,213
Interest expense	4,597	1,305	13,365	4,376
Other income (expense), net of tax	(3,912)	(2,843)	22,173	(1,031)
Balance	380,814	578,828	380,814	578,828
Investment securities, including noncontrolling interests
Changes in the components of accumulated other comprehensive income (loss)
OCI before reclassifications net of tax	(8)	29	(176)	229
Other Comprehensive Income (Loss), Tax
OCI before reclassifications, Tax	0	38	(52)	138
Investment securities, including noncontrolling interests | Other income (expense)
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	0	(18)	12	(33)
Investment securities, including noncontrolling interests | Reclassification Out Of Accumulated Other Comprehensive Income
Reclassifications from OCI to:
Other income	271	(21)	125	(17)
Investment securities, noncontrolling interests
Reclassifications from OCI to:
Less : Noncontrolling interests, net of tax	(8)	(10)	12	(51)
Other Comprehensive Income (Loss), Tax
Noncontrolling interests, Tax	(5)	(5)	7	(27)
Accumulated Net Unrealized Investment Gain Loss [Member]
Changes in the components of accumulated other comprehensive income (loss)
Balance	(225)	220	69	57
Reclassifications from OCI to:
Comprehensive income (loss)	255	(2)	(39)	161
Balance	30	218	30	218
Other Comprehensive Income (Loss), Tax
Comprehensive income (loss), Tax	(5)	15	(33)	78
Currency Translation Adjustments, including noncontrolling interests
Changes in the components of accumulated other comprehensive income (loss)
OCI before reclassifications net of tax	(2,477)	4,641	(20,201)	9,068
Foreign currency translation noncontrolling interests
Reclassifications from OCI to:
Less : Noncontrolling interests, net of tax	(396)	(1,943)	1,217	(2,090)
Accumulated Translation Adjustment [Member]
Changes in the components of accumulated other comprehensive income (loss)
Balance	(57,318)	(46,135)	(41,207)	(50,415)
Reclassifications from OCI to:
Comprehensive income (loss)	(2,873)	2,698	(18,984)	6,978
Balance	(60,191)	(43,437)	(60,191)	(43,437)
Cash Flow Hedges, including noncontrolling interests
Changes in the components of accumulated other comprehensive income (loss)
OCI before reclassifications net of tax	5,014	3,467	(2,931)	3,421
Other Comprehensive Income (Loss), Tax
OCI before reclassifications, Tax	1,608	1,263	(1,582)	1,671
Cash Flow Hedges, including noncontrolling interests | Revenue
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	178	(808)	586	(2,714)
Cash Flow Hedges, including noncontrolling interests | Cost of revenue.
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	214	(129)	303	(1,289)
Cash Flow Hedges, including noncontrolling interests | Selling, general and administrative expenses
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	102	(53)	147	(719)
Cash Flow Hedges, including noncontrolling interests | Interest expenses
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	(74)	(12)	(188)	(26)
Cash Flow Hedges, including noncontrolling interests | Reclassification Out Of Accumulated Other Comprehensive Income
Reclassifications from OCI to:
Revenue	332	(1,526)	1,087	(5,132)
Costs of revenue	632	(1,303)	884	(4,195)
Selling, general and administrative expenses	303	(697)	431	(2,341)
Interest expense	(214)	(47)	(543)	(67)
Cash Flow Hedges, noncontrolling interests
Reclassifications from OCI to:
Less : Noncontrolling interests, net of tax	(44)	157	35	850
Other Comprehensive Income (Loss), Tax
Noncontrolling interests, Tax	(23)	83	17	450
Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges
Changes in the components of accumulated other comprehensive income (loss)
Balance	(5,179)	4,274	1,881	11,789
Reclassifications from OCI to:
Comprehensive income (loss)	6,023	51	(1,037)	(7,464)
Balance	844	4,325	844	4,325
Other Comprehensive Income (Loss), Tax
Comprehensive income (loss), Tax	2,005	344	(717)	(2,627)
Benefit plans, including noncontrolling interests
Changes in the components of accumulated other comprehensive income (loss)
OCI before reclassifications net of tax	3		(349)
Reclassifications from OCI to:
Other adjustments	20		171
Other Comprehensive Income (Loss), Tax
OCI before reclassifications, Tax	0	0	348	0
Benefit plans, prior service credit (cost), including noncontrolling interests | Cost of revenue.
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	0	0	0	0
Benefit plans, prior service credit (cost), including noncontrolling interests | Selling, general and administrative expenses
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	0	0	0	0
Benefit plans, prior service credit (cost), including noncontrolling interests | Other income (expense)
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	0	0	0	0
Benefit plans, prior service credit (cost), including noncontrolling interests | Reclassification Out Of Accumulated Other Comprehensive Income
Reclassifications from OCI to:
Costs of revenue		2		6
Selling, general and administrative expenses				1
Other income (expense), net of tax	14		42
Benefit plans, net actuarial gain (loss), including noncontrolling interest | Cost of revenue.
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	0	0	0	0
Benefit plans, net actuarial gain (loss), including noncontrolling interest | Selling, general and administrative expenses
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	0	0	0	0
Benefit plans, net actuarial gain (loss), including noncontrolling interest | Other income (expense)
Other Comprehensive Income (Loss), Tax
Reclassifications from OCI, Tax	0	0	0	0
Benefit plans, net actuarial gain (loss), including noncontrolling interest | Reclassification Out Of Accumulated Other Comprehensive Income
Reclassifications from OCI to:
Costs of revenue		26		82
Selling, general and administrative expenses		12		36
Other income (expense), net of tax	36	(9)	113	(2)
Benefit plans, noncontrolling interests
Reclassifications from OCI to:
Less : Noncontrolling interests, net of tax			9
Other Comprehensive Income (Loss), Tax
Noncontrolling interests, Tax	0	0	0	0
Accumulated Defined Benefit Plans Adjustment [Member]
Changes in the components of accumulated other comprehensive income (loss)
Balance	(1,511)	(1,088)	(1,424)	(1,180)
Reclassifications from OCI to:
Comprehensive income (loss)	73	31	(14)	123
Balance	(1,438)	(1,057)	(1,438)	(1,057)
Other Comprehensive Income (Loss), Tax
Comprehensive income (loss), Tax	0	0	348	0
Accumulated Other Comprehensive Income
Changes in the components of accumulated other comprehensive income (loss)
Balance	(64,233)	(42,728)	(40,681)	(39,749)
Reclassifications from OCI to:
Balance	$ (60,755)	$ (39,951)	$ (60,755)	$ (39,951)