Why This Russian IT Solutions Firm Is Up 180 Percent Since IPO In 2013 In Spite Of The Geo-Political Risks

Luxoft Holding Inc LXFT, an IT solutions firm that finds its origins in Russia, listed on the New York Stock Exchange in June 2013. Since then, troubles in Russia and Crimea notwithstanding, the company' shares are up by almost 180 percent.
Roman Yakushkin, chief financial officer of Luxoft, was on CNBC Tuesday to explain why the geo-political risks in Russia doesn't affect his company.

Not Affected By Geo-Political Risk

"I can say that we have very special business model, which helped us a lot coping with those issues," Yakushkin said. "Like, first of all if you look at our client base, we have very limited exposure to Russian clients, to Euros, like only 7 percent of revenues come from Russian clients and in Ruble it's only 5 percent and the majority of our clients are in North America or in Western Europe."

He continued, "Our 3 largest geographies are U.S., U.K. and Germany and that constitutes roughly 90-91 percent of our revenues. So, our exposure to geo-political risks in Russia and U.K. is very limited. Secondly, we have recently increased significantly our presence in Eastern Europe and if you look at our Romania, Poland, Bulgaria, so those 3 [are the cases] are booming."

Moving Headquarters

Yakushkin added, "Last but not the least in 2013, we started global initiative, which we call ‘Luxoft: Global Upgrade' which consist of the 5 pillars like global culture, global management, global delivery and what we did, we basically moved our headquarters to Switzerland to reduce our exposure. We transferred, reallocated some people from Russia, Ukraine to Poland to the U.K. to the U.S."