Globant Reports 2019 First Quarter Financial Results

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.

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 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,       March 31,
                                                                           2019         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, December 31,
                                                                       2019          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

View original content:http://www.prnewswire.com/news-releases/globant-reports-2019-first-quarter-financial-results-300847665.html

SOURCE Globant