Fourth quarter revenues of $184.3
million, up 31.5% year-over-year
IFRS Diluted EPS
of $0.35 for the fourth
quarter
Non-IFRS Diluted EPS of $0.64 for the fourth quarter
LUXEMBOURG, Feb. 20, 2020 /PRNewswire/ -- Globant (NYSE:
GLOB), a digitally native technology services
company, today announced results for three months and year
ended December 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.
Fourth quarter 2019 highlights
- Revenues rose to $184.3 million,
representing 31.5% year-over-year growth compared to the fourth
quarter of 2018.
- IFRS Gross Profit margin was 37.9% compared to 40.2% in the
fourth quarter of 2018.
- Non-IFRS Adjusted Gross Profit Margin was 39.9% compared to
41.7% in the fourth quarter of 2018.
- IFRS Profit from Operations Margin was 10.9% compared to 12.8%
in the fourth quarter of 2018.
- Non-IFRS Adjusted Profit from Operations Margin was 16.5%
compared to 16.7% in the fourth quarter of 2018.
- IFRS Diluted EPS was $0.35
compared to $0.31 in the fourth
quarter of 2018.
- Non-IFRS Adjusted Diluted EPS was $0.64 compared to $0.50 in the fourth quarter of 2018.
Full year ended December 31,
2019 highlights
- Revenues rose to $659.3 million,
representing 26.2% year-over-year growth.
- IFRS Gross Profit margin was 38.5% compared to 39.0% for the
full year 2018.
- Non-IFRS Adjusted Gross Profit Margin was 40.4% compared to
40.6% for the full year 2018.
- IFRS Profit from Operations Margin was 12.2% compared to 12.8%
for the full year 2018.
- Non-IFRS Adjusted Profit from Operations Margin was 17.0%
compared to 16.1% for the full year 2018.
- IFRS Diluted EPS was $1.43
compared to $1.41 for the full year
2018.
- Non-IFRS Adjusted Diluted EPS was $2.29 compared to $1.74 for the full year 2018.
"2019 was another very successful year for our company. Our full
year revenues for 2019 amounted to $659.3
million, representing 26.2% year-over-year growth. It is our
5th year since we are a public company with growth above 26%. At
the same time, revenues for the fourth quarter of 2019 amounted to
$184.3 million, a new record for the
company and an outstanding increase of 31.5% compared to the fourth
quarter of 2018," said Martín Migoya, Globant's CEO and
co-founder.
"With Gartner's estimate of 3.9 trillion
dollars to be spent on IT alone in 2020, we continue to see
an enormous opportunity for growth, since we are a unique player in
the field delivering digital and cognitive transformations. We have
a strong focus on innovation, on building an agile culture and
applying AI to everything we do," Migoya added. "On top of that,
with our Be Kind initiative, we are deepening our commitment to
being a sustainable organization, conscious about generating
positive impact for all our stakeholders as we grow. Within Be
Kind, we have set specific goals to fight climate change and to
work even harder on diversity, inclusion and cultural wellness.
These goals will focus us as we continue to expand."
"I am very satisfied with our overall results for the fourth
quarter and full year 2019. During this year we continued our
growth journey while at the same time significantly improving our
profitability. Finally, hirings continue to be strong, combined
with further decrease in attrition levels, a positive signal
towards the beginning of 2020" explained Juan Urthiague, Globant's
CFO.
Globant completed the fourth quarter with
11,855 Globers, 11,021 of whom were technology, design
and innovation professionals. The geographic revenue breakdown for
the fourth quarter was as follows: 75.0% from North America (top country: US), 20.0% from
Latin America and others (top
country: Argentina) and 5.1% from
Europe (top country: Spain). In terms of currencies, 86.7% of
Globant's revenues for the fourth quarter was denominated in US
dollars.
During the year ended December 31,
2019, Globant served a total of 822 customers and
continued to increase its wallet share, having 107 accounts with
more than $1 million of annual
revenues, 26 accounts over $5 million
and 14 accounts above $10 million.
Globant's top customer, top five customers and top ten customers
represented 11.7%, 27.0% and 38.5% of fourth quarter revenues,
respectively.
Cash and bank balances and Investments as of December 31, 2019 amounted to $82.5 million, while borrowings amounted to
$51.4 million. Finally, as of
December 31, 2019, 37.0 million
common shares were issued and outstanding.
2020 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
2020:
- First quarter 2020 Revenues are estimated to be at least
$188 million, implying at least 28.6%
year-over-year growth.
- First quarter 2020 Non-IFRS Adjusted Profit from Operations
Margin is estimated to be in the range of 16%-17%.
- First quarter 2020 Non-IFRS Adjusted Diluted EPS is estimated
to be at least $0.62 (assuming an
average of 38.2 million diluted shares outstanding during the first
quarter).
- Fiscal year 2020 Revenues are estimated to be at least
$810 million, implying at least 22.9%
year-over-year revenue growth.
- Fiscal year 2020 Non-IFRS Adjusted Profit from Operations
Margin is estimated to be in the range of 16.5%-17.5%.
- Fiscal year 2020 Non-IFRS Adjusted Diluted EPS is estimated to
be at least $2.74 (assuming an
average of 38.5 million diluted shares outstanding during
2020).
Conference Call and Webcast
Martín Migoya and Juan Urthiague will discuss the full year
and fourth quarter 2019 results in a conference call today
beginning at 4:30pm ET.
Conference call access information is:
US & Canada +1 (888)
346-2877
International +1 (412) 902-4257
Webcast http://investors.globant.com/
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 11,800 employees 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 Measures
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 for the
fourth quarter and applicable to financial statements for the full
year, this announcement does not contain sufficient information to
constitute an interim financial report as defined in International
Accounting Standards 34, "Interim Financial Reporting" nor a
financial statement as defined by International Accounting
Standards 1 "Presentation of Financial Statements". The financial
information in this press release has not been audited.
Globant provides non-IFRS financial measures in addition to
reported IFRS results prepared in accordance with IFRS. Management
believes these measures help illustrate underlying trends in the
company's business and uses the non-IFRS financial 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 measures that exclude
share-based compensation expense, depreciation and amortization,
impairment of assets 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
consolidated statement of financial position as of December 31, 2019 and December 31, 2018 and its unaudited consolidated
statement of profit or loss and other comprehensive income for the
three years ended December 31, 2019,
prepared in accordance with IFRS issued by IASB.
Globant is not providing a quantitative reconciliation of
forward-looking Non-IFRS Adjusted Profit from Operations Margin or
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. In some cases, you can
identify forward-looking statements by terminology such as
"believe," "may," "will," "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.
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,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Revenues
|
659,325
|
|
522,310
|
|
184,306
|
|
140,138
|
Cost of
revenues
|
(405,164)
|
|
(318,554)
|
|
(114,501)
|
|
(83,797)
|
Gross
profit
|
254,161
|
|
203,756
|
|
69,805
|
|
56,341
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(172,478)
|
|
(133,187)
|
|
(50,195)
|
|
(35,540)
|
Net impairment losses
on financial assets
|
(228)
|
|
(3,469)
|
|
388
|
|
(2,575)
|
Other operating
expense, net
|
(720)
|
|
(306)
|
|
-
|
|
(306)
|
Profit from
operations
|
80,735
|
|
66,794
|
|
19,998
|
|
17,920
|
|
|
|
|
|
|
|
|
Gains on transactions
with bonds
|
1,569
|
|
-
|
|
1,569
|
|
-
|
|
|
|
|
|
|
|
|
Finance
income
|
13,643
|
|
11,418
|
|
4,246
|
|
1,643
|
Finance
expense
|
(26,801)
|
|
(16,968)
|
|
(8,525)
|
|
(3,153)
|
Finance expense,
net
|
(13,158)
|
|
(5,550)
|
|
(4,279)
|
|
(1,510)
|
|
|
|
|
|
|
|
|
Share of results of
investment in associates
|
(224)
|
|
-
|
|
(41)
|
|
-
|
|
|
|
|
|
|
|
|
Other income,
net
|
110
|
|
6,220
|
|
75
|
|
(1,374)
|
Profit before
income tax
|
69,032
|
|
67,464
|
|
17,322
|
|
15,036
|
|
|
|
|
|
|
|
|
Income tax
|
(15,017)
|
|
(15,868)
|
|
(3,869)
|
|
(3,527)
|
Net income for the
period
|
54,015
|
|
51,596
|
|
13,453
|
|
11,509
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
|
|
|
- Exchange
differences on translating foreign operations
|
(400)
|
|
(871)
|
|
558
|
|
451
|
- Net change in fair
value on financial assets measured at FVOCI
|
(373)
|
|
(12)
|
|
(1)
|
|
(5)
|
- Gains and losses on
cash flow hedges
|
352
|
|
-
|
|
586
|
|
-
|
Total
comprehensive income for the period
|
53,594
|
|
50,713
|
|
14,596
|
|
11,955
|
|
|
|
|
|
|
|
|
Net income
attributable to:
|
|
|
|
|
|
|
|
Owners of the
Company
|
54,015
|
|
51,677
|
|
13,453
|
|
11,509
|
Non-controlling
interest
|
-
|
|
(81)
|
|
-
|
|
-
|
Net income for the
period
|
54,015
|
|
51,596
|
|
13,453
|
|
11,509
|
|
|
|
|
|
|
|
|
Total
comprehensive income for the period attributable to:
|
|
|
|
|
|
|
|
Owners of the
Company
|
53,594
|
|
50,794
|
|
14,596
|
|
11,955
|
Non-controlling
interest
|
-
|
|
(81)
|
|
-
|
|
-
|
Total
comprehensive income for the period
|
53,594
|
|
50,713
|
|
14,596
|
|
11,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
1.48
|
|
1.45
|
|
0.36
|
|
0.32
|
Diluted
|
1.43
|
|
1.41
|
|
0.35
|
|
0.31
|
|
|
|
|
|
|
|
|
Weighted average
of outstanding shares (in thousands)
|
|
|
|
|
|
|
|
Basic
|
36,586
|
|
35,746
|
|
36,897
|
|
35,961
|
Diluted
|
37,674
|
|
36,685
|
|
37,985
|
|
36,899
|
Globant S.A.
Consolidated Statement of Financial
Position
(In thousands of U.S. dollars,
unaudited)
|
December
31,
2019
|
|
December
31,
2018
|
ASSETS
|
|
Current
assets
|
|
|
|
Cash and bank
balances
|
62,721
|
|
77,606
|
Investments
|
19,780
|
|
8,635
|
Trade
receivables
|
156,676
|
|
110,898
|
Other
assets
|
13,439
|
|
-
|
Other
receivables
|
19,308
|
|
15,341
|
Other financial
assets
|
4,527
|
|
550
|
Total current
assets
|
276,451
|
|
213,030
|
|
|
|
|
Non-current
assets
|
|
|
|
Investments
|
418
|
|
527
|
Other
assets
|
7,796
|
|
-
|
Other
receivables
|
8,810
|
|
34,197
|
Deferred tax
assets
|
26,868
|
|
16,916
|
Investment in
associates
|
3,776
|
|
4,000
|
Other financial
assets
|
1,683
|
|
345
|
Property and
equipment
|
87,533
|
|
51,460
|
Intangible
assets
|
27,110
|
|
11,778
|
Right-of-use
asset
|
58,781
|
|
-
|
Goodwill
|
188,538
|
|
104,846
|
Total non-current
assets
|
411,313
|
|
224,069
|
TOTAL
ASSETS
|
687,764
|
|
437,099
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Trade
payables
|
31,487
|
|
17,578
|
Payroll and social
security taxes payable
|
72,252
|
|
58,535
|
Borrowings
|
1,198
|
|
-
|
Other financial
liabilities
|
8,937
|
|
9,347
|
Lease
liabilities
|
19,439
|
|
-
|
Tax
liabilities
|
12,510
|
|
7,399
|
Other
liabilities
|
368
|
|
44
|
Total current
liabilities
|
146,191
|
|
92,903
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Trade
payables
|
5,500
|
|
-
|
Borrowings
|
50,188
|
|
-
|
Other financial
liabilities
|
1,617
|
|
3,418
|
Lease
liabilities
|
41,924
|
|
-
|
Other
liabilities
|
1,028
|
|
-
|
Provisions for
contingencies
|
2,602
|
|
2,862
|
Total non-current
liabilities
|
102,859
|
|
6,280
|
TOTAL
LIABILITIES
|
249,050
|
|
99,183
|
|
|
|
|
Capital and
reserves
|
|
|
|
Issued
capital
|
44,356
|
|
43,158
|
Additional paid-in
capital
|
157,537
|
|
109,559
|
Other
reserves
|
(2,557)
|
|
(2,136)
|
Retained
earnings
|
239,378
|
|
187,335
|
Total
equity
|
438,714
|
|
337,916
|
TOTAL EQUITY AND
LIABILITIES
|
687,764
|
|
437,099
|
Globant S.A.
Supplemental Non-IFRS Financial
Information
(In thousands of U.S. dollars,
unaudited)
|
Year
ended
|
|
Three months
ended
|
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
|
|
|
|
Gross
Profit
|
254,161
|
|
203,756
|
|
69,805
|
|
56,341
|
Depreciation and
amortization expense
|
7,350
|
|
4,022
|
|
2,369
|
|
967
|
Share-based
compensation expense
|
4,976
|
|
4,248
|
|
1,309
|
|
1,095
|
Adjusted gross
profit
|
266,487
|
|
212,026
|
|
73,483
|
|
58,403
|
Adjusted gross
profit margin
|
40.4%
|
|
40.6%
|
|
39.9%
|
|
41.7%
|
|
|
|
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(172,478)
|
|
(133,187)
|
|
(50,195)
|
|
(35,540)
|
Depreciation and
amortization expense
|
16,905
|
|
16,521
|
|
4,393
|
|
4,638
|
Share-based
compensation expense
|
14,912
|
|
8,665
|
|
4,541
|
|
2,327
|
Acquisition-related
charges (a)
|
9,571
|
|
3,516
|
|
4,121
|
|
1,543
|
Adjusted selling,
general and administrative expenses
|
(131,090)
|
|
(104,485)
|
|
(37,140)
|
|
(27,032)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
(19.9)%
|
|
(20.0)%
|
|
(20.2)%
|
|
(19.3)%
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
|
|
|
|
Profit from
Operations
|
80,735
|
|
66,794
|
|
19,998
|
|
17,920
|
Share-based
compensation expense
|
19,888
|
|
12,913
|
|
5,850
|
|
3,422
|
Acquisition-related
charges (a)
|
10,695
|
|
4,273
|
|
4,631
|
|
1,733
|
Impairment of assets
(b)
|
673
|
|
354
|
|
(47)
|
|
306
|
Adjusted Profit
from Operations
|
111,991
|
|
84,334
|
|
30,432
|
|
23,381
|
Adjusted Profit
from Operations margin
|
17.0%
|
|
16.1%
|
|
16.5%
|
|
16.7%
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
|
|
|
|
Net income for the
period
|
54,015
|
|
51,596
|
|
13,453
|
|
11,509
|
Share-based
compensation expense
|
19,888
|
|
12,913
|
|
5,850
|
|
3,422
|
Acquisition-related
charges (a)
|
11,518
|
|
(2,177)
|
|
4,970
|
|
2,459
|
Impairment of assets
(b)
|
673
|
|
1,154
|
|
(47)
|
|
1,106
|
Expenses related to
secondary share offering (c)
|
-
|
|
251
|
|
-
|
|
-
|
Adjusted Net
income
|
86,094
|
|
63,737
|
|
24,226
|
|
18,496
|
Adjusted Net
income margin
|
13.1%
|
|
12.2%
|
|
13.1%
|
|
13.2%
|
|
|
|
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
|
|
|
|
Adjusted Net
income
|
86,094
|
|
63,737
|
|
24,226
|
|
18,496
|
Diluted
shares
|
37,674
|
|
36,685
|
|
37,985
|
|
36,899
|
Adjusted Diluted
EPS
|
2.29
|
|
1.74
|
|
0.64
|
|
0.50
|
(a) Acquisition-related charges include, when applicable,
amortization of purchased intangible assets included in
depreciation and amortization expense line on our consolidated
statements of profit or loss and other comprehensive income,
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 include, 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 secondary share offering include
expenses related to the secondary offering in the United States of
our common shares held WPP Luxembourg Gamma Three S.àr.l.
("WPP").
Globant S.A.
Schedule of Supplemental Information
(unaudited)
Metrics
|
Q4
2018
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
|
|
|
|
|
|
Total
Employees
|
8,384
|
9,259
|
9,905
|
11,283
|
11,855
|
IT
Professionals
|
7,821
|
8,609
|
9,215
|
10,462
|
11,021
|
|
|
|
|
|
|
North America
Revenues %
|
77.4
|
73.7
|
75.2
|
77.1
|
75.0
|
Latin America and
Others Revenues %
|
13.5
|
17.0
|
16.1
|
17.0
|
20.0
|
Europe Revenues
%
|
9.1
|
9.3
|
8.7
|
5.9
|
5.1
|
|
|
|
|
|
|
USD Revenues
%
|
85.6
|
83.3
|
88.7
|
86.3
|
86.7
|
Other Currencies
Revenues %
|
14.4
|
16.7
|
11.3
|
13.7
|
13.3
|
|
|
|
|
|
|
Top Customer
%
|
10.9
|
10.5
|
10.4
|
11.9
|
11.7
|
Top 5 Customers
%
|
30.9
|
28.9
|
27.2
|
26.1
|
27.0
|
Top 10 Customers
%
|
42.7
|
40.8
|
41.0
|
38.6
|
38.5
|
|
|
|
|
|
|
Customers Served
(Last Twelve Months)
|
373
|
472
|
585
|
744
|
822
|
Customers with
>$1M in Revenues (Last Twelve Months)
|
90
|
91
|
97
|
104
|
107
|
Investor Relations Contact:
Paula Conde & Amit Singh, Globant
investors@globant.com
+1 (877) 215-5230
Media Contact:
Wanda Weigert, Globant
pr@globant.com
+1 (877) 215-5230
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SOURCE Globant