LUXEMBOURG, May 9, 2019 /PRNewswire/ -- Globant (NYSE:
GLOB), a digitally native technology services
company, today announced results for the three months ended
March 31, 2019.
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.
First quarter 2019 highlights
- Revenues increased to a record $146.2
million, representing 22.1% year-over-year growth (or 25.5%
on a constant currency basis).
- Non-IFRS Adjusted Gross Profit was $60.1
million (41.1% Non-IFRS Adjusted Gross Profit Margin), an
increase of $13.3 million compared to
$46.8 million (39.1% Non-IFRS
Adjusted Gross Profit Margin) for the first quarter of 2018.
- Non-IFRS Adjusted Net Income was $18.5
million (12.7% Non-IFRS Adjusted Net Income Margin), an
increase of $4.6 million compared to
$13.9 million (11.6% Non-IFRS
Adjusted Net Income Margin) for the first quarter of 2018.
- Non-IFRS Adjusted Diluted EPS was $0.50 per share (based on an average of 37.3
million diluted shares), an increase of $0.12 compared to $0.38 per share (based on an average of 36.5
million diluted shares) for the first quarter of 2018.
"I am thrilled to announce another solid quarter in terms of
business performance and financial results. Our first quarter
revenues for 2019 amounted to a record of $146.2 million, representing a 22.1%
year-over-year growth," said Martín Migoya, Globant's CEO and
co-founder.
"We continue to experience strong demand coming from
organizations looking to transform their businesses. Today, it's
not just a matter of rethinking how companies connect to their
users, it's also about reshaping organizations, including their
internal processes, departments and overall vision", explained
Martín Migoya. "At Globant, we are extremely well positioned as a
leader to deliver these digital and cognitive transformations as we
are organized around new paradigms. A whole podular and autonomous
company structure pushes innovation, entrepreneurship and agility
to drive efficiency to our customers during their digital and
cognitive evolution."
"I am very pleased with the results we achieved during the start
of the year. Once again, we continued to deliver solid revenue
growth and robust EPS, as we have done consistently since our IPO.
Business momentum combined with a record level of net additions
position us on the right path to achieve our full year targets,"
explained Juan Urthiague, Globant's CFO.
Globant completed the first quarter with
9,259 Globers, 8,609 of whom were technology, design and
innovation professionals. The geographic revenue breakdown for the
first quarter was as follows: 72.3% from North America (top country: US), 17.0%
from Latin America and others (top
country: Argentina) and 10.7% from
Europe (top country: Spain). 83.3% of Globant's revenues for the
first quarter was denominated in US dollars, and the remaining
16.7% was denominated in other currencies, including Euros, GB
pounds and other Latin American currencies.
During the last twelve months ended March 31, 2019, Globant served
472 customers, 91 of which accounted for more than
$1 million of Globant's revenues.
Globant's top customer, top five customers and top
ten customers represented 10.5%, 28.9% and 40.8% of
first quarter revenues, respectively.
Cash and bank balances and Investments as of March 31, 2019 decreased to $46.7 million from $86.2 million as of December 31, 2018. Current assets amounted to
$204.6 million, accounting for
39.6% of total assets for the same period. Finally, as of
March 31, 2019, 36.3 million
common shares were issued and outstanding.
2019 Second Quarter and Full Year Outlook
Based on current market conditions, Globant is providing the
following estimates for the second quarter and the full year of
2019:
- Second quarter 2019 Revenues are estimated to be between
$156-$158
million, implying 22.8% year-over-year growth at the
midpoint of the range.
- Second quarter 2019 Non-IFRS Adjusted Diluted EPS is estimated
to be in the range of $0.50-$0.54
(assuming an average of 37.5 million diluted shares outstanding
during the second quarter).
- Fiscal year 2019 Revenues are estimated to be in the range of
$638-$646
million, implying 22.9% year-over-year revenue growth at the
midpoint of the range.
- Fiscal year 2019 Non-IFRS Adjusted Diluted EPS is estimated to
be in the range of $2.13-$2.21 (assuming an average of 37.5 million
diluted shares outstanding during 2019).
Conference Call and Webcast
Martín Migoya and Juan Urthiague will discuss the Q1 2019
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 company where innovation, design and
engineering meet scale. We use the latest technologies in the
digital and cognitive field to empower organizations in every
aspect.
We have more than 9,200 professionals and we are present in 17
countries working for companies like Google, Southwest Airlines, EA
and BBVA, 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. We are a member of the
Cybersecurity Tech Accord (2019).
For more information, visit www.globant.com
Non-IFRS Financial Information
While the financial figures included in this press release have
been computed in accordance with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB") applicable to interim periods, 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 and acquisition-related charges. Constant
currency revenue growth is defined as revenues for a given period
restated at the comparative period's average foreign currency
exchange rates measured against the comparative period's reported
revenues. This measure does not include any other macroeconomic
effects such as local currency inflation effects. 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 March 31, 2019 and December 31, 2018 and its unaudited interim
consolidated statement of profit or loss and other comprehensive
income for the three months ended March 31,
2019 and 2018, 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
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 Latin America; 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 decisions 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)
|
|
|
|
|
|
Three months
ended
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
|
|
Revenues
|
146,151
|
|
119,712
|
Cost of
revenues
|
(88,727)
|
|
(74,543)
|
Gross
profit
|
57,424
|
|
45,169
|
|
|
|
|
Selling, general and
administrative expenses
|
(38,632)
|
|
(31,199)
|
Net impairment losses
on financial assets
|
(436)
|
|
(11)
|
Profit from
operations
|
18,356
|
|
13,959
|
|
|
|
|
Finance
income
|
891
|
|
2,353
|
Finance
expense
|
(3,702)
|
|
(3,244)
|
Finance expense,
net
|
(2,811)
|
|
(891)
|
|
|
|
|
Other income,
net
|
(19)
|
|
14
|
Profit before
income tax
|
15,526
|
|
13,082
|
|
|
|
|
Income tax
|
(3,427)
|
|
(2,941)
|
Net income for the
period
|
12,099
|
|
10,141
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
- Exchange
differences on translating foreign operations
|
(616)
|
|
171
|
- Net change in fair
value on financial assets measured at FVOCI
|
35
|
|
(6)
|
- Gains and losses on
cash flow hedges
|
(882)
|
|
-
|
Total
comprehensive income for the period
|
10,636
|
|
10,306
|
|
|
|
|
Net income
attributable to:
|
|
|
|
Owners of the
Company
|
12,099
|
|
10,170
|
Non-controlling
interest
|
-
|
|
(29)
|
Net income for the
period
|
12,099
|
|
10,141
|
|
|
|
|
Total
comprehensive income for the period attributable to:
|
|
|
|
Owners of the
Company
|
10,636
|
|
10,335
|
Non-controlling
interest
|
-
|
|
(29)
|
Total
comprehensive income for the period
|
10,636
|
|
10,306
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
Basic
|
0.33
|
|
0.29
|
Diluted
|
0.32
|
|
0.28
|
|
|
|
|
Weighted average
of outstanding shares (in thousands)
|
|
|
|
Basic
|
36,205
|
|
35,429
|
Diluted
|
37,320
|
|
36,549
|
Globant
S.A.
|
Consolidated
Statement of Financial Position
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
March 31,
2019
|
|
December 31,
2018
|
ASSETS
|
|
Current
assets
|
|
|
|
Cash and bank
balances
|
42,201
|
|
77,606
|
Investments
|
4,526
|
|
8,635
|
Trade
receivables
|
141,474
|
|
110,898
|
Other
receivables
|
15,707
|
|
15,341
|
Other financial
assets
|
738
|
|
550
|
Total current
assets
|
204,646
|
|
213,030
|
|
|
|
|
Non-current
assets
|
|
|
|
Investments
|
524
|
|
527
|
Other
receivables
|
35,400
|
|
34,197
|
Deferred tax
assets
|
19,609
|
|
16,916
|
Investment in
associates
|
4,000
|
|
4,000
|
Other financial
assets
|
2,145
|
|
345
|
Property and
equipment
|
51,151
|
|
51,460
|
Intangible
assets
|
11,466
|
|
11,778
|
Right-of-use
asset
|
44,100
|
|
-
|
Goodwill
|
144,011
|
|
104,846
|
Total non-current
assets
|
312,406
|
|
224,069
|
TOTAL
ASSETS
|
517,052
|
|
437,099
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Trade
payables
|
21,788
|
|
17,578
|
Payroll and social
security taxes payable
|
64,701
|
|
58,535
|
Borrowings
|
618
|
|
-
|
Other financial
liabilities
|
6,157
|
|
9,347
|
Lease
liabilities
|
15,356
|
|
-
|
Tax
liabilities
|
12,623
|
|
7,399
|
Other
liabilities
|
84
|
|
44
|
Total current
liabilities
|
121,327
|
|
92,903
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Other financial
liabilities
|
1,066
|
|
3,418
|
Lease
liabilities
|
30,921
|
|
-
|
Provisions for
contingencies
|
2,689
|
|
2,862
|
Total non-current
liabilities
|
34,676
|
|
6,280
|
TOTAL
LIABILITIES
|
156,003
|
|
99,183
|
|
|
|
|
Capital and
reserves
|
|
|
|
Issued
capital
|
43,598
|
|
43,158
|
Additional paid-in
capital
|
123,588
|
|
109,559
|
Other
reserves
|
(3,599)
|
|
(2,136)
|
Retained
earnings
|
197,462
|
|
187,335
|
Total equity
attributable to owners of the Company
|
361,049
|
|
337,916
|
TOTAL EQUITY AND
LIABILITIES
|
517,052
|
|
437,099
|
Globant
S.A.
|
Supplemental
Non-IFRS Financial Information
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
Three months
ended
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
Gross
Profit
|
57,424
|
|
45,169
|
Depreciation and
amortization expense
|
1,227
|
|
993
|
Share-based
compensation expense
|
1,443
|
|
661
|
Adjusted gross
profit
|
60,094
|
|
46,823
|
Adjusted gross
profit margin
|
41.1%
|
|
39.1%
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
Selling, general and
administrative expenses
|
(38,632)
|
|
(31,199)
|
Depreciation and
amortization expense
|
4,419
|
|
3,512
|
Share-based
compensation expense
|
2,977
|
|
2,208
|
Acquisition-related
charges (a)
|
1,832
|
|
558
|
Adjusted selling,
general and administrative expenses
|
(29,404)
|
|
(24,921)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
(20.1)%
|
|
(20.8)%
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
Profit from
Operations
|
18,356
|
|
13,959
|
Share-based
compensation expense
|
4,420
|
|
2,869
|
Acquisition-related
charges (a)
|
1,946
|
|
750
|
Adjusted Profit
from Operations
|
24,722
|
|
17,578
|
Adjusted Profit
from Operations margin
|
16.9%
|
|
14.7%
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
Net income for the
period
|
12,099
|
|
10,141
|
Share-based
compensation expense
|
4,420
|
|
2,869
|
Acquisition-related
charges (a)
|
2,017
|
|
882
|
Adjusted Net
income
|
18,536
|
|
13,892
|
Adjusted Net
income margin
|
12.7%
|
|
11.6%
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
Adjusted Net
income
|
18,536
|
|
13,892
|
Diluted
shares
|
37,320
|
|
36,549
|
Adjusted Diluted
EPS
|
0.50
|
|
0.38
|
(a) Acquisition-related charges include, when applicable,
amortization of purchased intangible assets included in
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.
Reconciliation of revenue growth at constant currency to revenue
growth as reported under IFRS is presented in the table below:
|
Three months
ended
March 31, 2019
|
Revenue growth at
constant currency (1)
|
25.5%
|
Foreign exchange
rates impact
|
(3.4)%
|
Revenue growth as
reported
|
22.1%
|
(1) Constant currency revenue growth is defined as
revenues for a given period restated at the comparative period's
average foreign currency exchange rates measured against the
comparative period's reported revenues. This measure does not
include any other macroeconomic effects such as local currency
inflation effects.
Globant
S.A.
|
Schedule of
Supplemental Information (unaudited)
|
|
|
|
|
|
|
Metrics
|
Q1
2018
|
Q2
2018
|
Q3
2018
|
Q4
2018
|
Q1
2019
|
|
|
|
|
|
|
Total
Employees
|
6,940
|
7,279
|
7,807
|
8,384
|
9,259
|
IT
Professionals
|
6,462
|
6,775
|
7,285
|
7,821
|
8,609
|
|
|
|
|
|
|
North America
Revenues %
|
78.6
|
78.4
|
77.5
|
77.4
|
72.3
|
Latin America and
Others Revenues %
|
13.8
|
13.1
|
12.5
|
13.5
|
17.0
|
Europe Revenues
%
|
7.6
|
8.5
|
10.0
|
9.1
|
10.7
|
|
|
|
|
|
|
USD Revenues
%
|
85.5
|
86.4
|
85.1
|
85.6
|
83.3
|
Other Currencies
Revenues %
|
14.5
|
13.6
|
14.9
|
14.4
|
16.7
|
|
|
|
|
|
|
Top Customer
%
|
11.1
|
11.1
|
11.9
|
10.9
|
10.5
|
Top 5 Customers
%
|
31.3
|
32.5
|
33.4
|
30.9
|
28.9
|
Top 10 Customers
%
|
44.5
|
44.6
|
45.8
|
42.7
|
40.8
|
|
|
|
|
|
|
Customers Served
(Last Twelve Months)
|
348
|
355
|
344
|
373
|
472
|
Customers with
>$1M in Revenues (Last Twelve Months)
|
89
|
92
|
90
|
90
|
91
|
Investor Relations Contact:
Paula Conde, Globant
investors@globant.com
(877) 215-5230
Media Contact:
Wanda Weigert, Globant
pr@globant.com
(877) 215-5230
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SOURCE Globant