LUXEMBOURG, Feb. 14, 2019 /PRNewswire/ -- Globant (NYSE:
GLOB), a digitally native technology services
company, today announced results for the three and twelve
months ended December 31, 2018.
Please see highlights below, including certain Non-IFRS
measures. Note that reconciliations between Non-IFRS financial
measures and IFRS operating results are disclosed at the end of
this press release.
Fourth quarter 2018 highlights
- Revenues increased to a record $140.1
million, representing 21.4% year-over-year growth.
- Non-IFRS Adjusted Gross Profit was $58.4
million (41.7% Non-IFRS Adjusted Gross Profit Margin), an
increase of $13.4 million compared to
$45.0 million (39.0% Non-IFRS
Adjusted Gross Profit Margin) for the fourth quarter of 2017.
- Non-IFRS Adjusted Net Income was $18.5
million (13.2% Non-IFRS Adjusted Net Income Margin), an
increase of $4.4 million compared to
$14.1 million (12.2% Non-IFRS
Adjusted Net Income Margin) for the fourth quarter of 2017.
- Non-IFRS Adjusted Diluted EPS was $0.50 per share (based on an average of 36.9
million diluted shares), an increase of $0.11 compared to $0.39 per share (based on an average of 36.3
million diluted shares) for the fourth quarter of 2017.
Full year ended December 31,
2018 highlights
- Revenues increased to $522.3
million, representing 26.3% year-over-year growth.
- Non-IFRS Adjusted Gross Profit was $212.0 million (40.6% Non-IFRS Adjusted Gross
Profit Margin), an increase of $51.7
million compared to $160.3
million (38.8% Non-IFRS Adjusted Gross Profit Margin) for
the full year 2017.
- Non-IFRS Adjusted Net Income was $63.7 million (12.2% Non-IFRS Adjusted Net
Income Margin), an increase of $17.6 million, compared to $46.1 million (11.1% Non-IFRS Adjusted Net Income
Margin) for the full year 2017.
- Non-IFRS Adjusted Diluted EPS was $1.74 per share (based on an average of 36.7
million diluted shares), an increase of $0.46 compared to $1.28 (based on an average of 36.1 million
diluted shares) for the full year 2017.
"2018 was another very successful year for our company. Our full
year revenues for 2018 amounted to $522.3
million, representing a 26.3% year-over-year growth. At the
same time, revenues for the fourth quarter of 2018 amounted to
$140.1 million, a new record for the
company and an increase of 21.4% compared to the same period in
2017," said Martín Migoya, Globant's CEO and co-founder.
"Our constant expansion is mainly driven by our unique focus as
a pure play in the digital and cognitive arena, which makes us the
best partner to help organizations transform their businesses. We
do this with a comprehensive approach that goes from evolving their
culture, creating digital products and bringing digital and
cognitive to the back office, to creating a full digital native
culture for them. Our ultimate goal is to help evolve the entire
technology organization to the next level", explained Martín
Migoya. "Looking into 2019, we continue to have strong demand from
companies looking to achieve digital and cognitive transformations
as new users and requirements arise. We believe that our market
approach with our Studios, our Agile Pods and our 50-Squared model
positions us as a leader in this arena," added Martín Migoya.
"I am very satisfied with our overall results for the fourth
quarter and full year 2018. During this year we continued to
deliver strong revenue growth and significantly improved our
profitability and cash generation", explained Juan Urthiague,
Globant's CFO.
Globant completed the fourth quarter with
8,384 Globers, 7,821 of whom were technology, design and
innovation professionals. The geographic revenues breakdown for the
fourth quarter was as follows: 77.4% from North America (top country: US), 13.5% from
Latin America and others (top
country: Argentina) and 9.1% from
Europe (top country: Spain). 85.6% of Globant's revenues for the
fourth quarter was denominated in US dollars, and the
remaining 14.4% was denominated in other currencies, including
Euros, GB pounds and other Latin American currencies.
During the last twelve months ended December 31, 2018, Globant served
373 customers, 90 of which accounted for more than
$1 million of Globant's revenues.
Globant's top customer, top five customers and top
ten customers represented 10.9%, 30.9% and 42.7% of
fourth quarter revenues, respectively.
Cash and bank balances and Investments as of December 31, 2018 increased to $87.0 million from $60.7
million as of December 31,
2017. Current assets amounted to $214.0 million, accounting for 48.5% of
total assets for the same period. Finally, as of December 31, 2018, 36.0 million common shares
were issued and outstanding.
2019 First Quarter and Full Year Outlook
Based on current market conditions, Globant is providing the
following estimates for the first quarter and the full year of
2019:
- First quarter 2019 Revenues are estimated to be between
$144-$146
million, implying 21.1% year-over-year growth at the
midpoint of the range.
- First quarter 2019 Non-IFRS Adjusted Diluted EPS is estimated
to be in the range of $0.45-$0.49
(assuming an average of 37.1 million diluted shares outstanding
during the first quarter).
- Fiscal year 2019 Revenues are estimated to be in the range of
$635-$645
million, implying 22.5% year-over-year revenues growth at
the midpoint of the range.
- Fiscal year 2019 Non-IFRS Adjusted Diluted EPS is estimated to
be in the range of $2.10-$2.20 (assuming an average of 37.4 million
diluted shares outstanding during 2019).
Conference Call and Webcast
Martín Migoya and Juan Urthiague will discuss the Q4 2018
results in a conference call today beginning at 4:30pm ET.
Conference call access information is:
US +1 (888) 346-2877
International +1 (412) 902-4257
Webcast http://investors.globant.com/
Additionally, a replay will be available via the same dial-in
number and on our investor relations website after the call.
About Globant (NYSE: GLOB)
We are a digitally native technology services company where
innovation, design and engineering meet scale. We use some of the
latest technologies in the digital and cognitive field to empower
organizations in every aspect.
We have more than 8,300 professionals and we are present in
14 countries working for companies like Google, LinkedIn,
BBVA, EA and Coca Cola, among others.
We were named a Worldwide Leader of Digital Strategy Consulting
Services by IDC MarketScape report (2016 and 2017). We were also
featured as a business case study at Harvard, MIT, and
Stanford.
For more information, visit www.globant.com
Non-IFRS Financial Information
The financial information in this press release has been
prepared consistently with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB"). The interim financial information
included in this announcement has been also prepared in accordance
with IFRS applicable to interim periods, however this announcement
does not contain sufficient information to constitute an interim
financial report as defined in International Accounting Standards
34, "Interim Financial Reporting". The financial information in
this press release has not been audited.
Globant provides non-IFRS financial measures to complement
reported IFRS results, in accordance with IAS 34 "Interim Financial
Reporting". Management believes these measures help illustrate
underlying trends in the company's business and uses the measures
to establish budgets and operational goals, communicated internally
and externally, for managing the company's business and evaluating
its performance. The company anticipates that it will continue to
report both IFRS and certain non-IFRS financial measures in its
financial results, including non-IFRS results that exclude
share-based compensation expense, depreciation and amortization,
impairment of assets, expenses related to our June 2018 secondary share offering and
acquisition-related charges. Because the company's non-IFRS
financial measures are not calculated according to IFRS, these
measures are not comparable to IFRS and may not necessarily be
comparable to similarly described non-IFRS measures reported by
other companies within the company's industry. Consequently,
Globant's non-IFRS financial measures should not be evaluated in
isolation or supplant comparable IFRS measures, but, rather, should
be considered together with its unaudited interim consolidated
statement of financial position as of December 31, 2018 and December 31, 2017 and its unaudited interim
consolidated statement of profit or loss and other comprehensive
income for the three and twelve months ended December 31, 2018 and 2017, prepared in
accordance with IAS 34.
Globant is not providing a quantitative reconciliation of
forward-looking Non-IFRS Adjusted Diluted EPS to the most directly
comparable IFRS measure because it is unable to predict with
reasonable certainty the ultimate outcome of certain significant
items without unreasonable effort. These items include, but are not
limited to, share-based compensation expense, impairment of assets,
expenses related to our June 2018
secondary share offering and acquisition-related charges. These
items are uncertain, depend on various factors, and could have a
material impact on IFRS reported results for the guidance
period.
Forward Looking Statements
In addition to historical information, this release contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements include information
about possible or assumed future results of our business and
financial condition, as well as the results of operations, Non-IFRS
results of operations and Non-IFRS earnings per share, liquidity,
plans and objectives. In some cases, you can identify
forward-looking statements by terminology such as "believe," "may,"
"estimate," "continue," "anticipate," "intend," "should," "plan,"
"expect," "predict," "potential," or the negative of these terms or
other similar expressions. These statements include, but are not
limited to, statements regarding our future financial and operating
performance, including our outlook and guidance, and our
strategies, priorities and business plans. Our expectations and
beliefs regarding these matters may not materialize, and actual
results in future periods are subject to risks and uncertainties
that could cause actual results to differ materially from those
projected. Factors that could impact our actual results include:
our ability to maintain current resource utilization rates and
productivity levels; our ability to manage attrition and attract
and retain highly-skilled IT professionals; our ability to
accurately price our client contracts; our ability to achieve our
anticipated growth; our ability to effectively manage our rapid
growth; our ability to retain our senior management team and other
key employees; our ability to continue to innovate and remain at
the forefront of emerging technologies and related market trends;
our ability to retain our business relationships and client
contracts; our ability to manage the impact of global adverse
economic conditions; our ability to manage uncertainty concerning
the instability in the current economic, political and social
environment in Argentina; and
other factors discussed under the heading "Risk Factors" in our
most recent Form 20-F filed with the U.S. Securities and Exchange
Commission.
Because of these uncertainties, you should not make any
investment decision based on our estimates and forward-looking
statements. Except as required by law, we undertake no
obligation to publicly update any forward-looking statements for
any reason after the date of this press release whether as a result
of new information, future events or otherwise.
These risks and uncertainties include those discussed or
identified in the filings with the Luxembourg Stock Market
Authority for the Financial Markets (Commission de Surveillance
du Secteur Financier).
Globant
S.A.
|
Consolidated
Statement of Profit or Loss and Other Comprehensive
Income
|
(In thousands of
U.S. dollars, except per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
Year
ended
|
|
Three months
ended
|
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
|
|
|
|
|
Revenues
|
522,310
|
|
413,439
|
|
140,138
|
|
115,433
|
Cost of
revenues
|
(318,554)
|
|
(263,171)
|
|
(83,797)
|
|
(72,701)
|
Gross
profit
|
203,756
|
|
150,268
|
|
56,341
|
|
42,732
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(133,186)
|
|
(110,813)
|
|
(35,539)
|
|
(28,905)
|
Net impairment losses
on financial assets
|
(3,469)
|
|
(1,581)
|
|
(2,575)
|
|
(98)
|
Other operating
(expenses) income, net
|
(306)
|
|
(4,708)
|
|
(306)
|
|
(4,708)
|
Profit from
operations
|
66,795
|
|
33,166
|
|
17,921
|
|
9,021
|
|
|
|
|
|
|
|
|
Finance
income
|
11,418
|
|
7,956
|
|
1,643
|
|
2,774
|
Finance
expense
|
(16,969)
|
|
(11,036)
|
|
(3,154)
|
|
(3,629)
|
Finance expense,
net
|
(5,551)
|
|
(3,080)
|
|
(1,511)
|
|
(855)
|
|
|
|
|
|
|
|
|
Other income,
net
|
6,220
|
|
8,458
|
|
(1,374)
|
|
6,048
|
Profit before
income tax
|
67,464
|
|
38,544
|
|
15,036
|
|
14,214
|
|
|
|
|
|
|
|
|
Income tax
|
(15,868)
|
|
(8,081)
|
|
(3,527)
|
|
(2,694)
|
Net income for the
period
|
51,596
|
|
30,463
|
|
11,509
|
|
11,520
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
|
|
|
- Exchange
differences on translating foreign operations
|
(871)
|
|
(265)
|
|
451
|
|
(469)
|
- Net change in fair
value on financial assets measured at FVOCI
|
(12)
|
|
(27)
|
|
(5)
|
|
-
|
Total
comprehensive income for the period
|
50,713
|
|
30,171
|
|
11,955
|
|
11,051
|
|
|
|
|
|
|
|
|
Net income
attributable to:
|
|
|
|
|
|
|
|
Owners of the
Company
|
51,677
|
|
30,539
|
|
11,509
|
|
11,543
|
Non-controlling
interest
|
(81)
|
|
(76)
|
|
-
|
|
(23)
|
Net income for the
period
|
51,596
|
|
30,463
|
|
11,509
|
|
11,520
|
|
|
|
|
|
|
|
|
Total
comprehensive income for the period attributable to:
|
|
|
|
|
|
|
|
Owners of the
Company
|
50,794
|
|
30,247
|
|
11,955
|
|
11,074
|
Non-controlling
interest
|
(81)
|
|
(76)
|
|
-
|
|
(23)
|
Total
comprehensive income for the period
|
50,713
|
|
30,171
|
|
11,955
|
|
11,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
1.44
|
|
0.87
|
|
0.32
|
|
0.33
|
Diluted
|
1.41
|
|
0.84
|
|
0.31
|
|
0.32
|
|
|
|
|
|
|
|
|
Weighted average
of outstanding shares (in thousands)
|
|
|
|
|
|
|
|
Basic
|
35,746
|
|
34,919
|
|
35,961
|
|
35,172
|
Diluted
|
36,685
|
|
36,094
|
|
36,899
|
|
36,349
|
Globant
S.A.
|
Consolidated
Statement of Financial Position
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
December
|
|
December
|
ASSETS
|
31,
2018
|
|
31,
2017
|
Current
assets
|
|
|
|
Cash and bank
balances
|
78,384
|
|
52,525
|
Investments
|
8,635
|
|
8,147
|
Trade
receivables
|
110,898
|
|
80,078
|
Other
receivables
|
15,567
|
|
14,357
|
Other financial
assets
|
550
|
|
873
|
Total current
assets
|
214,034
|
|
155,980
|
|
|
|
|
Non-current
assets
|
|
|
|
Investments
|
527
|
|
-
|
Other
receivables
|
34,197
|
|
31,736
|
Deferred tax
assets
|
16,916
|
|
13,186
|
Investment in
associates
|
4,000
|
|
1,550
|
Other financial
assets
|
345
|
|
555
|
Property and
equipment
|
51,460
|
|
43,879
|
Intangible
assets
|
11,778
|
|
11,365
|
Goodwill
|
107,890
|
|
98,926
|
Total non-current
assets
|
227,113
|
|
201,197
|
TOTAL
ASSETS
|
441,147
|
|
357,177
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Trade
payables
|
17,578
|
|
11,640
|
Payroll and social
security taxes payable
|
59,313
|
|
40,472
|
Borrowings
|
-
|
|
6,011
|
Other financial
liabilities
|
8,858
|
|
10,664
|
Tax
liabilities
|
7,625
|
|
5,253
|
Other
liabilities
|
43
|
|
20
|
Total current
liabilities
|
93,417
|
|
74,060
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Other financial
liabilities
|
6,952
|
|
18,574
|
Provisions for
contingencies
|
2,862
|
|
1,179
|
Total non-current
liabilities
|
9,814
|
|
19,753
|
TOTAL
LIABILITIES
|
103,231
|
|
93,813
|
|
|
|
|
Capital and
reserves
|
|
|
|
Issued
capital
|
43,158
|
|
42,271
|
Additional paid-in
capital
|
109,559
|
|
86,728
|
Other
reserves
|
(2,136)
|
|
(1,253)
|
Retained
earnings
|
187,335
|
|
135,658
|
Total equity
attributable to owners of the Company
|
337,916
|
|
263,404
|
Non-controlling
interests
|
-
|
|
(40)
|
Total
equity
|
337,916
|
|
263,364
|
TOTAL EQUITY AND
LIABILITIES
|
441,147
|
|
357,177
|
|
|
|
|
Globant
S.A.
|
Supplemental
Non-IFRS Financial Information
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
|
|
|
|
Year
ended
|
|
Three months
ended
|
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
|
|
|
|
Gross
Profit
|
203,756
|
|
150,268
|
|
56,341
|
|
42,732
|
Depreciation and
amortization expense
|
4,022
|
|
4,339
|
|
967
|
|
1,071
|
Share-based
compensation expense
|
4,248
|
|
5,666
|
|
1,095
|
|
1,165
|
Adjusted gross
profit
|
212,026
|
|
160,273
|
|
58,403
|
|
44,968
|
Adjusted gross
profit margin
|
40.6%
|
|
38.8%
|
|
41.7%
|
|
39.0%
|
|
|
|
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(133,186)
|
|
(110,813)
|
|
(35,539)
|
|
(28,905)
|
Depreciation and
amortization expense
|
16,521
|
|
11,789
|
|
4,638
|
|
3,304
|
Share-based
compensation expense
|
8,665
|
|
8,798
|
|
2,327
|
|
2,032
|
Acquisition-related
charges (a)
|
3,516
|
|
1,131
|
|
1,543
|
|
546
|
Adjusted selling,
general and administrative expenses
|
(104,484)
|
|
(89,095)
|
|
(27,031)
|
|
(23,023)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
(20.0)%
|
|
(21.5)%
|
|
(19.3)%
|
|
(19.9)%
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
|
|
|
|
Operating
Profit
|
66,795
|
|
33,166
|
|
17,921
|
|
9,021
|
Share-based
compensation expense
|
12,913
|
|
14,464
|
|
3,422
|
|
3,197
|
Acquisition-related
charges (a)
|
4,273
|
|
7,523
|
|
1,733
|
|
5,643
|
Impairment of assets
(b)
|
354
|
|
1,586
|
|
306
|
|
-
|
Adjusted Profit
from Operations
|
84,335
|
|
56,739
|
|
23,382
|
|
17,861
|
Adjusted Profit
from Operations margin
|
16.1%
|
|
13.7%
|
|
16.7%
|
|
15.5%
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
|
|
|
|
Net income for the
period
|
51,596
|
|
30,463
|
|
11,509
|
|
11,520
|
Share-based
compensation expense
|
12,913
|
|
14,464
|
|
3,422
|
|
3,197
|
Acquisition-related
charges (a)
|
(2,177)
|
|
(447)
|
|
2,459
|
|
(587)
|
Impairment of assets
(b)
|
1,154
|
|
1,586
|
|
1,106
|
|
-
|
Expenses related to
secondary share offering (c)
|
251
|
|
-
|
|
-
|
|
-
|
Adjusted Net
income
|
63,737
|
|
46,066
|
|
18,496
|
|
14,130
|
Adjusted Net
income margin
|
12.2%
|
|
11.1%
|
|
13.2%
|
|
12.2%
|
|
|
|
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
|
|
|
|
Adjusted Net
income
|
63,737
|
|
46,066
|
|
18,496
|
|
14,130
|
Diluted
shares
|
36,685
|
|
36,094
|
|
36,899
|
|
36,349
|
Adjusted Diluted
EPS
|
1.74
|
|
1.28
|
|
0.50
|
|
0.39
|
|
|
|
|
|
|
|
|
Notes:
(a) Acquisition-related charges include, when applicable,
amortization of purchased intangible assets included in the
depreciation and amortization expense line on our consolidated
statements of operations, external deal costs, acquisition-related
retention bonuses, integration costs, changes in the fair value of
contingent consideration liabilities, charges for impairment of
acquired intangible assets and other acquisition-related costs. We
cannot provide acquisition-related charges on a forward-looking
basis without unreasonable effort as such charges may fluctuate
based on the timing, size, and complexity of future acquisitions as
well as other uncertainty inherent in mergers and acquisitions.
(b) Impairment of assets includes, when applicable,
charges for impairment of intangible assets, charges for impairment
of investments in associates and charges for impairment of tax
credits, net of recoveries.
(c) Expenses related to our June 2018 secondary share
offering include expenses related to the secondary offering in the
United States of our common shares held by WPP Luxembourg Gamma
Three S.àr.l.
Globant
S.A.
|
Schedule of
Supplemental Information (unaudited)
|
|
|
|
|
|
|
Metrics
|
Q4
2017
|
Q1
2018
|
Q2
2018
|
Q3
2018
|
Q4
2018
|
|
|
|
|
|
|
Total
Employees
|
6,753
|
6,940
|
7,279
|
7,807
|
8,384
|
IT
Professionals
|
6,279
|
6,462
|
6,775
|
7,285
|
7,821
|
|
|
|
|
|
|
North America
Revenues %
|
78.6
|
78.6
|
78.4
|
77.5
|
77.4
|
Latin America and
Others Revenues %
|
14.6
|
13.8
|
13.1
|
12.5
|
13.5
|
Europe Revenues
%
|
6.8
|
7.6
|
8.5
|
10.0
|
9.1
|
|
|
|
|
|
|
USD Revenues
%
|
82.5
|
85.5
|
86.4
|
85.1
|
85.6
|
Other Currencies
Revenues %
|
17.5
|
14.5
|
13.6
|
14.9
|
14.4
|
|
|
|
|
|
|
Top Customer
%
|
10.4
|
11.1
|
11.1
|
11.9
|
10.9
|
Top 5 Customers
%
|
28.5
|
31.3
|
32.5
|
33.4
|
30.9
|
Top 10 Customers
%
|
43.2
|
44.5
|
44.6
|
45.8
|
42.7
|
|
|
|
|
|
|
Customers Served
(Last Twelve Months)
|
356
|
348
|
355
|
344
|
373
|
Customers with
>$1M in Revenues (Last Twelve Months)
|
82
|
89
|
92
|
90
|
90
|
Investor Relations Contact:
Paula Conde, Globant
investors@globant.com
(877) 215-5230
Media Contact:
Wanda Weigert, Globant
pr@globant.com
(877) 215-5230
Source: Globant
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SOURCE Globant