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Sapient reported the following financial results for the fourth quarter ended December 31, 2009.

The service revenues of the Company stood at $183.5 million compared to $164.7 million in the fourth quarter of 2008, which marks an increase of 11%. Sequentially, service revenues were up 11% to $17.9 million against $165.5 million in the third quarter of 2009. On a constant currency basis, revenues increased 8% over the prior year’s quarter and increased 10% sequentially.

GAAP income from operations decreased down from the $26.0 million reported in the fourth quarter of 2008 to $19.2 million for fourth quarter of 2009. Non-GAAP income from operations was $24.8 million, or 13.5% of service revenues. This compared to non-GAAP income from operations of $27.9 million, or 16.9% of service revenues, in the fourth quarter of 2008. GAAP diluted net income per share was $0.51, compared to $0.20 in the fourth quarter of 2008

During the quarter, the company released its valuation allowance on U.S. deferred tax assets, resulting in a tax benefit of $58.3 million, as well as recorded a provision of $3.4 million related to realignment of its international tax structure, resulting in a net tax benefit in the quarter of $54.8 million, or $0.40 per share. Non-GAAP diluted net income per share was $0.11, compared to $0.21 in the fourth quarter of 2008.

“We finished the year strongly and are very proud of our accomplishments given the difficult economic conditions last year,” said Sapient President and Chief Executive Officer Alan J. Herrick in a prepared statement. “As we look to 2010, we believe we are well positioned to grow our business and improve our operating performance as we help our clients succeed.”

Added Karandeep Singh, managing director of Sapient Corporation Private Limited, a subsidiary of Sapient Corporation Inc, in India commented, “With more than 4,000 of Sapient’s global employees in India, our scale and experience here support Sapient in delivering great results. In the fourth quarter, we attracted several hundred people to join Sapient India for the ability to build careers and to be active participants in solving client’s business problems.  We plan to continue to scale our global delivery operations and shared services in India to support Sapient’s overall business growth in 2010.” 

The company generated cash from operations of $21.0 million in the fourth quarter of 2009, compared to $36.7 million of cash in the fourth quarter of 2008. As of December 31, 2009, the company had cash, cash equivalents and marketable securities of $215.8 million.

The company also announced that its Board of Directors has declared a special dividend in the amount of $0.35 per share payable on March 15, 2010 to shareholders of record at the close of business on March 1, 2010.

“We are pleased that we are able to return excess capital to shareholders based on our solid financial position and confidence in our performance outlook,” continued Herrick.

For the first quarter ending March 31, 2010, service revenues are expected to be in the range of $177 million to $181 million as Sapient's outlook for the year 2010.