Globant Reports 2018 First Quarter Financial Results
Globant Reports 2018 First Quarter Financial Results
Growth Journey Continues With Robust Operating Performance
LUXEMBOURG, May 10, 2018 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three months ended March 31, 2018.
http://mma.prnewswire.com/media/460822/globant_logo.jpg
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 2018 highlights
-- Revenues increased to a record $119.7 million, representing 34.9%
year-over-year growth.
-- Non-IFRS Adjusted Gross Profit was $46.8 million (39.1% Non-IFRS
Adjusted Gross Profit Margin), an increase of $12.2 million compared to
$34.6 million for the first quarter of 2017 (39.0% Non-IFRS Adjusted
Gross Profit Margin).
-- Non-IFRS Adjusted Net Income was $13.9 million (11.6% Non-IFRS Adjusted
Net Income Margin), compared to a profit of $8.9 million for the first
quarter of 2017 (10.0% Non-IFRS Adjusted Net Income Margin).
-- Non-IFRS Adjusted Diluted EPS was $0.38 per share (based on an average
of 36.5 million diluted shares), compared to Non-IFRS Adjusted Diluted
EPS of $0.25 for the first quarter of 2017 (based on an average of 35.6
million diluted shares).
"I am very pleased with our first quarter results. Our revenues for the quarter amounted to $119.7 million, representing an outstanding 34.9% year-over-year growth. This solid growth in revenue was driven by both our top 10 and our non-top 10 accounts, which increased by 37.3% and 33.0% respectively, compared to the first quarter of 2017," explained Martín Migoya, Globant's CEO and co-founder.
"We believe that most organizations are facing significant changes in user expectations and, in order to address this shift, many companies are modifying their business model to align with the new digital and cognitive paradigm. These organizations want a partner that can help them embrace this transformation with the latest technologies and merge engineering, innovation and design at scale. We believe that our market approach with our Studios and our 50-Squared model positions us as a leader in this area and makes us an ideal partner for companies facing these transformations," added Martín Migoya.
"During this quarter we continued to deliver strong revenue growth and solid EPS. We believe that our solid business momentum positions us to achieve our full year targets. We will continue to focus on diversifying our talent base across the regions, managing our SG&A carefully while investing in cutting-edge technologies and training for the long term," explained Alejandro Scannapieco, Globant's CFO.
Globant completed the first quarter with 6,940 Globers, 6,462 of whom were technology, design and innovation professionals. The geographic revenue breakdown for the first quarter was as follows: 78.6% from North America (top country: US), 13.8% from Latin America and others (top country: Argentina) and 7.6% from Europe (top country: Spain). 85.5% of Globant's revenue for the first quarter was denominated in US dollars, and the remaining 14.5% was denominated in other currencies, including Euros, GB pounds and other Latin American currencies.
During the last twelve months ended March 31, 2018, Globant served 348 customers, 89 of which accounted for more than $1 million of Globant's revenues. Globant's top customer, top five customers and top ten customers represented 11.1%, 31.3% and 44.5% of first quarter revenues, respectively.
Cash and cash equivalents and investments as of March 31, 2018 amounted to $45.0 million, while current assets amounted to $156.3 million, accounting for 43.3% of total assets for the same period. Finally, as of March 31, 2018, 35.7 million common shares were issued and outstanding.
2018 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 2018:
-- Second quarter 2018 Revenues are estimated to be between $124-$126
million, implying 25.5% year-over-year growth at the midpoint of the
range.
-- Second quarter 2018 Non-IFRS Adjusted Diluted EPS is estimated to be in
the range of $0.36-$0.40 (assuming an average of 36.9 million diluted
shares outstanding during the second quarter).
-- Fiscal year 2018 Revenues are estimated to be in the range of $502-$510
million, implying 22.4% year-over-year revenue growth at the midpoint of
the range.
-- Fiscal year 2018 Non-IFRS Adjusted Diluted EPS is estimated to be in the
range of $1.56-$1.64 (assuming an average of 37.0 million diluted shares
outstanding during 2018).
Conference Call and Webcast
Martín Migoya and Alejandro Scannapieco will discuss the Q1 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 6,900 professionals in 12 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 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 tax credits 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 March 31, 2018 and December 31, 2017 and its unaudited interim consolidated statement of profit or loss and other comprehensive income for the three months ended March 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 tax credits 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: the persistence and intensification of competition in the IT industry; the future growth of spending in IT services outsourcing generally, application outsourcing and custom application development and offshore development services; the level of growth of demand for our services from our clients; the level of increase in revenues from our new clients; the resource utilization rates and productivity levels and the level of attrition of our IT professionals; the pricing structures we use for our client contracts; the general economic and business conditions in the locations in which we operate; the levels of our concentration of revenues by vertical, geography, by client and by type of contract in the future; the continuity of tax incentives available for software companies with operations in Argentina; Argentina's regulations on proceeds from the export of services; our expectation that we will be able to integrate and manage the companies we acquire and that our acquisitions will yield the benefits we envision; the demands we expect our rapid growth to place on our management and infrastructure; the sufficiency of our current cash, cash flow from operations, and lines of credit to meet our anticipated cash needs; the high proportion of our cost of services comprised of personnel salaries; and other factors discussed under the heading "Risk Factors" in our most recent Form 20-F filed with the Securities and Exchange Commission.
These forward-looking statements involve various risks and uncertainties. Although the registrant believes that its expectations expressed in these forward-looking statements are reasonable, its expectations may turn out to be incorrect. The registrant's actual results could be materially different from its expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed might not occur, and the registrant's future results and its performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these 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.
Condensed Interim 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, 2018 March 31, 2017
-------------- --------------
Revenues 119,712 88,742
Cost of revenues (74,543) (55,494)
------- -------
Gross profit 45,169 33,248
Selling, general and
administrative expenses (31,199) (24,255)
Net impairment (losses)
gain on financial assets (11) 360
--- ---
Profit from operations 13,959 9,353
Finance income 2,353 2,085
Finance (expense) gain, net (3,244) (2,135)
------ ------
Finance expense, net (891) (50)
---- ---
Other income, net 14 1,728
--- -----
Profit before income tax 13,082 11,031
------ ------
Income tax (2,941) (2,175)
------ ------
Net income for the period 10,141 8,856
------ -----
Other comprehensive income, net of income tax
effects
Items that may be reclassified subsequently to
profit and loss:
-Exchange differences on
translating foreign
operations 171 160
- Net fair value loss on
available-for-sale
financial assets (6) 7
--- ---
Total comprehensive income
for the period 10,306 9,023
------ -----
Net income attributable to:
Owners of the Company 10,170 8,867
Non-controlling interest (29) (11)
--- ---
Net income for the period 10,141 8,856
------ -----
Total comprehensive income for the period
attributable to:
Owners of the Company 10,335 9,034
Non-controlling interest (29) (11)
--- ---
Total comprehensive income
for the period 10,306 9,023
------ -----
Earnings per share
Basic 0.29 0.26
Diluted 0.28 0.25
Weighted average of outstanding shares (in
thousands)
Basic 35,430 34,682
Diluted 36,547 35,583
Globant S.A.
Condensed Interim Consolidated Statement of Financial Position
(In thousands of U.S. dollars, unaudited)
March 31, 2018 December 31, 2017
-------------- -----------------
ASSETS
Current assets
--------------
Cash and cash
equivalents 35,589 52,525
Investments 9,450 8,147
Trade
receivables 91,324 80,078
Other
receivables 19,130 14,357
Other financial
assets 800 873
Total current
assets 156,293 155,980
------- -------
Non-current assets
------------------
Other
receivables 32,663 31,736
Deferred tax
assets 15,247 13,186
Investment in
associates 1,550 1,550
Other financial
assets 555 555
Property and
equipment 43,764 43,879
Intangible
assets 11,863 11,365
Goodwill 98,743 98,926
Total non-
current assets 204,385 201,197
------- -------
TOTAL ASSETS 360,678 357,177
======= =======
LIABILITIES
Current liabilities
-------------------
Trade payables 7,182 11,640
Payroll and
social
security taxes
payable 36,999 40,472
Borrowings 6,007 6,011
Other financial
liabilities 7,818 10,664
Tax liabilities 7,068 5,253
Other
liabilities 138 20
Total current
liabilities 65,212 74,060
------ ------
Non-current liabilities
-----------------------
Other financial
liabilities 12,735 18,574
Provisions for
contingencies 1,358 1,179
Total non-
current
liabilities 14,093 19,753
------ ------
TOTAL
LIABILITIES 79,305 93,813
------ ------
Capital and reserves
Issued and
paid-in
capital 42,852 42,271
Additional
paid-in
capital 93,849 86,728
Other reserves (1,088) (1,253)
Retained
earnings 145,828 135,658
------- -------
Total equity
attributable
to owners of
the Company 281,441 263,404
Non-
controlling
interests (68) (40)
Total equity 281,373 263,364
TOTAL EQUITY
AND
LIABILITIES 360,678 357,177
======= =======
Globant S.A.
Supplemental Non-IFRS Financial Information
(In thousands of U.S. dollars, unaudited)
Three months ended
------------------
March 31, 2018 March 31, 2017
-------------- --------------
Reconciliation of adjusted gross profit
Gross Profit 45,169 33,248
Depreciation and
amortization
expense 993 1,102
Share-based
compensation
expense 661 278
--- ---
Adjusted gross
profit 46,823 34,628
------ ------
Adjusted gross
profit margin 39.1% 39.0%
---- ----
Reconciliation of selling, general and
administrative expenses
Selling, general
and administrative
expenses (31,199) (24,255)
Depreciation and
amortization
expense 3,512 2,596
Share-based
compensation
expense 2,208 599
Acquisition-
related charges
(a) 558 287
--- ---
Adjusted selling,
general and
administrative
expenses (24,921) (20,773)
------- -------
Adjusted selling,
general and
administrative
expenses as % of
revenues (20.8)% (23.4)%
------ ------
Reconciliation of Adjusted Profit from
Operations
Operating Profit 13,959 9,353
Share-based
compensation
expense 2,869 877
Acquisition-
related charges
(a) 750 665
Adjusted Profit
from Operations 17,578 10,895
------ ------
Adjusted Profit
from Operations
margin 14.7% 12.3%
---- ----
Reconciliation of Net income for the period
Net income for the
period 10,141 8,856
Share-based
compensation
expense 2,869 877
Acquisition-
related charges
(a) 882 (837)
Adjusted Net income 13,892 8,896
------ -----
Adjusted Net income
margin 11.6% 10.0%
---- ----
Calculation of Adjusted Diluted EPS
Adjusted Net income 13,892 8,896
Diluted shares 36,547 35,583
------ ------
Adjusted Diluted
EPS 0.38 0.25
---- ----
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.
Globant S.A.
Schedule of Supplemental Information (unaudited)
Metrics Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
======= ======= ======= ======= ======= =======
Total Employees 5,855 6,223 6,397 6,753 6,940
IT Professionals 5,421 5,772 5,925 6,279 6,462
North America
Revenue % 78.9 78.5 79.1 78.6 78.6
Latin America and
Others Revenue % 9.9 9.2 13.3 14.6 13.8
Europe Revenue % 11.2 12.3 7.6 6.8 7.6
USD Revenue % 88.6 87.6 85.4 82.5 85.5
Other Currencies
Revenue % 11.4 12.4 14.6 17.5 14.5
Top Customer % 9.7 10.1 10.3 10.4 11.1
Top 5 Customers % 31.1 31.6 26.8 28.5 31.3
Top 10 Customers % 43.7 43.9 40.7 43.2 44.5
Customers Served
(Last Twelve
Months) 336 331 346 356 348
Customers with >$1M
in Revenue (Last
Twelve Months) 67 76 78 82 89
Investor Relations Contact:
Paula Conde, Globant
investors@globant.com
(877) 215-5230
Media Contact:
Wanda Weigert, Globant
pr@globant.com
(877) 215-5230
Logo - http://mma.prnewswire.com/media/460822/globant_logo.jpg
View original content:http://www.prnewswire.com/news-releases/globant-reports-2018-first-quarter-financial-results-300646559.html
SOURCE Globant
