Solid Start To The Year Amidst COVID-19
Crisis
- First quarter revenues of $191.6
million, up 31.1% year-over-year
- IFRS Diluted EPS of $0.35 for
the first quarter
- Non-IFRS Diluted EPS of $0.64
for the first quarter
LUXEMBOURG, May 14, 2020 /PRNewswire/ -- Globant (NYSE:
GLOB), a digitally native technology services
company, today announced results for the three months ended
March 31, 2020.
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 2020 Financial Highlights
- Revenues rose to $191.6 million,
representing 31.1% year-over-year growth compared to the first
quarter of 2019.
- IFRS Gross Profit margin was 37.7% compared to 39.3% in the
first quarter of 2019.
- Non-IFRS Adjusted Gross Profit Margin was 39.5% compared to
41.1% in the first quarter of 2019.
- IFRS Profit from Operations Margin was 9.8% compared to 12.6%
in the first quarter of 2019.
- Non-IFRS Adjusted Profit from Operations Margin was 15.6%
compared to 16.9% in the first quarter of 2019.
- IFRS Diluted EPS was $0.35
compared to $0.32 in the first
quarter of 2019.
- Non-IFRS Adjusted Diluted EPS was $0.64 compared to $0.50 in the first quarter of 2019.
Cash and Other Metrics for the Quarter ended March 31, 2020
- Cash and cash equivalents and Short-term investments totaled
$134.2 million as of March 31, 2020, an increase of $51.7 million, from $82.5
million as of December 31,
2019. During the first quarter of 2020, we drew an
additional $75 million from our
credit facility, totaling $125.7
million as of March 31,
2020.
- Globant completed the first quarter with 12,538 Globers, 11,755
of whom were technology, design and innovation professionals.
- The geographic revenue breakdown for the first quarter was as
follows: 74.5% from North America
(top country: US), 19.5% from Latin
America and others (top country: Argentina) and 6.0% from Europe (top country: Spain).
- In terms of currencies, 86.8% of Globant's revenues for the
first quarter were denominated in US dollars.
- During the twelve months ended March 31,
2020, Globant served a total of 876 customers and continued
to increase its wallet share, having 112 accounts with more than
$1 million of annual revenues,
compared to 91 for the same period one year ago.
- Globant's top customer, top five customers and top ten
customers represented 11.7%, 29.1% and 41.0% of first quarter
revenues, respectively.
"We are all living uncertain times as we go through the COVID-19
pandemic, and I am proud that at Globant we have continued taking
good care of our employees, partnering with our customers and
vendors, and assisting the communities where we operate," said
Martín Migoya, Globant's CEO and co-founder. "Our rapid
response to the crisis has enabled us to reinforce our relations
with our customers, as we help them prepare and transform for the
new future. This crisis is presenting new challenges and a more
uncertain scenario, though we do not yet know the full extent of
the impact that the spread of the COVID-19 pandemic may have on the
global economy and therefore on our business, we are confident that
as a pure digital player we are extremely well positioned to help
companies reinvent themselves and move further into their digital
and cognitive transformation."
"Despite this uncertain situation, our strong differentiators
enabled us to have a great performance in the first quarter where
we delivered revenues and adjusted diluted earnings per share above
our expectations. Revenues for the quarter amounted to $191.6 million dollars, a new record for our
company which represented an outstanding 31.1% year over year
growth, and with minimal impact from COVID-19," Migoya added.
"Once again we completed a very successful first quarter.
Revenues grew more than 30%, our adjusted net income margin was
12.7% and net hirings were very strong. We continue to focus on
executing with excellence in this challenging environment,"
explained Juan Urthiague, Globant's CFO.
2020 Second Quarter Outlook
Based on current market conditions, Globant is providing the
following estimates for the second quarter of 2020:
- Second quarter 2020 Revenues are estimated to be at least
$179 million.
- Second quarter 2020 Non-IFRS Adjusted Profit from Operations
Margin is estimated to be in the range of 12.5%-14.5%.
- Second quarter 2020 Non-IFRS Adjusted Diluted EPS is estimated
to be at least $0.47 (assuming an
average of 38.2 million diluted shares outstanding during the
second quarter).
Due to the uncertainty related to the potential impacts of
COVID-19 on the Company's full year financial results, Globant is
not providing a full year 2020 financial outlook at this time.
Conference Call and Webcast
Martín Migoya and Juan Urthiague will discuss the first
quarter 2020 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 12,500 employees and we are present in 16
countries working for companies like Google, Rockwell Automation,
Electronic Arts and Santander, among others.
We were named a Worldwide Leader of Digital Strategy Consulting
Services by IDC MarketScape report. We were also featured as a
business case study at Harvard,
MIT, and Stanford. We are a member of the Cybersecurity Tech
Accord.
For more information, please 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, 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 non financial assets, acquisition-related charges and
COVID-19 related expenses. 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 condensed interim consolidated
statement of financial position as of March
31, 2020, its audited consolidated statement of financial
position as of December 31, 2019 and
its unaudited condensed interim consolidated statement of
comprehensive income for the three months ended March 31, 2020 and 2019, prepared in accordance
with IFRS as 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,
acquisition-related charges and COVID-19 related expenses. 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: the impact and duration of the COVID-19
pandemic; 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 and any other risk factors we include in subsequent
reports on Form 6-K.
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.
Condensed Interim Consolidated
Statement of Comprehensive Income
(In thousands of U.S.
dollars, except per share amounts, unaudited)
|
Three months
ended
|
|
March
31,
2020
|
|
March
31,
2019
|
|
|
|
|
Revenues
|
191,572
|
|
146,151
|
Cost of
revenues
|
(119,369)
|
|
(88,727)
|
Gross
profit
|
72,203
|
|
57,424
|
|
|
|
|
Selling, general and
administrative expenses
|
(51,872)
|
|
(38,632)
|
Net impairment losses
on financial assets
|
(1,617)
|
|
(436)
|
Profit from
operations
|
18,714
|
|
18,356
|
|
|
|
|
Finance
income
|
256
|
|
170
|
Finance
expense
|
(2,455)
|
|
(1,068)
|
Other financial
results, net
|
2,717
|
|
(1,913)
|
|
|
|
|
Other income,
net
|
16
|
|
(19)
|
Profit before
income tax
|
19,248
|
|
15,526
|
|
|
|
|
Income tax
|
(6,078)
|
|
(3,427)
|
Net income for the
period
|
13,170
|
|
12,099
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
- Exchange
differences on translating foreign operations
|
(2,104)
|
|
(616)
|
- Net change in fair
value on financial assets measured at FVOCI
|
(114)
|
|
35
|
- Gains and losses on
cash flow hedges
|
(2,069)
|
|
(882)
|
Total
comprehensive income for the period
|
8,883
|
|
10,636
|
|
|
|
|
Net income
attributable to:
|
|
|
|
Owners of the
Company
|
13,170
|
|
12,099
|
Net income for the
period
|
13,170
|
|
12,099
|
|
|
|
|
Total
comprehensive income for the period attributable to:
|
|
|
|
Owners of the
Company
|
8,883
|
|
10,636
|
Total
comprehensive income for the period
|
8,883
|
|
10,636
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
Basic
|
0.36
|
|
0.33
|
Diluted
|
0.35
|
|
0.32
|
|
|
|
|
Weighted average
of outstanding shares (in thousands)
|
|
|
|
Basic
|
37,008
|
|
36,205
|
Diluted
|
38,093
|
|
37,320
|
Globant S.A.
Condensed Interim Consolidated
Statements of Financial Position as of March
31, 2020 and December 31,
2019
(In thousands of U.S. dollars,
unaudited)
|
March
31,
2020
|
|
December
31,
2019
|
ASSETS
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
132,641
|
|
62,721
|
Short-term
investments
|
1,520
|
|
19,780
|
Trade
receivables
|
167,418
|
|
156,676
|
Other
assets
|
12,296
|
|
13,439
|
Other
receivables
|
19,772
|
|
19,308
|
Other financial
assets
|
3,266
|
|
4,527
|
Total current
assets
|
336,913
|
|
276,451
|
|
|
|
|
Non-current
assets
|
|
|
|
Investments
|
-
|
|
418
|
Other
assets
|
6,958
|
|
7,796
|
Receivables
|
20,411
|
|
8,810
|
Deferred tax
assets
|
23,762
|
|
26,868
|
Investment in
associates
|
3,776
|
|
3,776
|
Other financial
assets
|
1,883
|
|
1,683
|
Property and
equipment
|
88,900
|
|
87,533
|
Intangible
assets
|
27,826
|
|
27,110
|
Right-of-use
asset
|
73,024
|
|
58,781
|
Goodwill
|
187,978
|
|
188,538
|
Total non-current
assets
|
434,518
|
|
411,313
|
TOTAL
ASSETS
|
771,431
|
|
687,764
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Trade
payables
|
30,166
|
|
31,487
|
Payroll and social
security taxes payable
|
53,182
|
|
72,252
|
Borrowings
|
495
|
|
1,198
|
Other financial
liabilities
|
10,903
|
|
8,937
|
Lease
liabilities
|
19,728
|
|
19,439
|
Tax
liabilities
|
7,762
|
|
7,898
|
Income tax
payable
|
8,384
|
|
4,612
|
Other
liabilities
|
1,029
|
|
368
|
Total current
liabilities
|
131,649
|
|
146,191
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Trade
payables
|
6,753
|
|
5,500
|
Borrowings
|
125,169
|
|
50,188
|
Other financial
liabilities
|
813
|
|
1,617
|
Lease
liabilities
|
49,149
|
|
41,924
|
Deferred tax
liabilities
|
795
|
|
1,028
|
Provisions for
contingencies
|
3,363
|
|
2,602
|
Total non-current
liabilities
|
186,042
|
|
102,859
|
TOTAL
LIABILITIES
|
317,691
|
|
249,050
|
|
|
|
|
Capital and
reserves
|
|
|
|
Issued
capital
|
44,439
|
|
44,356
|
Additional paid-in
capital
|
163,597
|
|
157,537
|
Other
reserves
|
(6,844)
|
|
(2,557)
|
Retained
earnings
|
252,548
|
|
239,378
|
Total
equity
|
453,740
|
|
438,714
|
TOTAL EQUITY AND
LIABILITIES
|
771,431
|
|
687,764
|
Globant S.A.
Supplemental Non-IFRS
Financial Information
(In thousands of U.S. dollars,
unaudited)
|
Three months
ended
|
|
March 31,
2020
|
|
March 31,
2019
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
Gross
Profit
|
72,203
|
|
57,424
|
Depreciation and
amortization expense
|
2,290
|
|
1,227
|
Share-based
compensation expense
|
1,121
|
|
1,443
|
Adjusted gross
profit
|
75,614
|
|
60,094
|
Adjusted gross
profit margin
|
39.5%
|
|
41.1%
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
Selling, general and
administrative expenses
|
(51,872)
|
|
(38,632)
|
Depreciation and
amortization expense
|
4,894
|
|
4,419
|
Share-based
compensation expense
|
5,158
|
|
2,977
|
Acquisition-related
charges (a)
|
2,758
|
|
1,832
|
Adjusted selling,
general and administrative expenses
|
(39,062)
|
|
(29,404)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
(20.4)%
|
|
(20.1)%
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
Profit from
Operations
|
18,714
|
|
18,356
|
Share-based
compensation expense
|
6,279
|
|
4,420
|
Acquisition-related
charges (a)
|
3,162
|
|
1,946
|
COVID-19-related
expenses (b)
|
1,716
|
|
-
|
Adjusted Profit
from Operations
|
29,871
|
|
24,722
|
Adjusted Profit
from Operations margin
|
15.6%
|
|
16.9%
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
Net income for the
period
|
13,170
|
|
12,099
|
Share-based
compensation expense
|
6,279
|
|
4,420
|
Acquisition-related
charges (a)
|
3,217
|
|
2,017
|
COVID-19-related
expenses (b)
|
1,716
|
|
-
|
Adjusted Net
income
|
24,382
|
|
18,536
|
Adjusted Net
income margin
|
12.7%
|
|
12.7%
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
Adjusted Net
income
|
24,382
|
|
18,536
|
Diluted
shares
|
38,093
|
|
37,320
|
Adjusted Diluted
EPS
|
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 condensed interim
consolidated statements of 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) COVID-19 related expenses include, when applicable, bad debt
provision related to the effect of COVID-19 on our customers
businesses, donations and other expenses directly attributable to
the pandemic that are both incremental to charges incurred prior to
the outbreak and not expected to recur once the crisis has subsided
and operations return to normal and clearly separable from normal
operations.
Globant S.A.
Schedule of Supplemental Information
(unaudited)
Metrics
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
|
|
|
|
|
|
Total
Employees
|
9,259
|
9,905
|
11,283
|
11,855
|
12,538
|
IT
Professionals
|
8,609
|
9,215
|
10,462
|
11,021
|
11,755
|
|
|
|
|
|
|
North America
Revenues %
|
73.7
|
75.2
|
77.1
|
75.0
|
74.5
|
Latin America and
Others Revenues %
|
17.0
|
16.1
|
17.0
|
20.0
|
19.5
|
Europe Revenues
%
|
9.3
|
8.7
|
5.9
|
5.0
|
6.0
|
|
|
|
|
|
|
USD Revenues
%
|
83.3
|
88.7
|
86.3
|
86.7
|
86.8
|
Other Currencies
Revenues %
|
16.7
|
11.3
|
13.7
|
13.3
|
13.2
|
|
|
|
|
|
|
Top Customer
%
|
10.5
|
10.4
|
11.9
|
11.7
|
11.7
|
Top 5 Customers
%
|
28.9
|
27.2
|
26.1
|
27.0
|
29.1
|
Top 10 Customers
%
|
40.8
|
41.0
|
38.6
|
38.5
|
41.0
|
|
|
|
|
|
|
Customers Served
(Last Twelve Months)
|
472
|
585
|
744
|
822
|
876
|
Customers with
>$1M in Revenues (Last Twelve Months)
|
91
|
97
|
104
|
107
|
112
|
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