Globant Reports 2023 Fourth Quarter and Full Year Financial Results
Solid Finish to the Year and Positive Outlook Ahead
-- Fourth quarter revenues of $580.7 million, up 18.3% year-over-year
-- IFRS Diluted EPS of $0.96 for the fourth quarter
-- Non-IFRS Adjusted Diluted EPS of $1.62 for the fourth quarter
-- Full year 2023 revenues of $2,095.9 million, up 17.7% year-over-year
-- IFRS Diluted EPS of $3.64 for the full year
-- Non-IFRS Adjusted Diluted EPS of $5.74 for the full year
LUXEMBOURG, Feb. 15, 2024 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native company focused on reinventing businesses through innovative technology solutions, today announced results for the three months and year ended December 31, 2023.
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 2023 Financial Highlights
-- Revenues rose to $580.7 million, representing 18.3% year-over-year
growth.
-- IFRS Gross Profit Margin was 35.9% compared to 37.4% in the fourth
quarter of 2022.
-- Non-IFRS Adjusted Gross Profit Margin was 38.0% compared to 39.0% in the
fourth quarter of 2022.
-- IFRS Profit from Operations Margin was 9.5% compared to 11.2% in the
fourth quarter of 2022.
-- Non-IFRS Adjusted Profit from Operations Margin was 15.3% compared to
16.1% in the fourth quarter of 2022.
-- IFRS Diluted EPS was $0.96 compared to $0.91 in the fourth quarter of
2022.
-- Non-IFRS Adjusted Diluted EPS was $1.62 compared to $1.40 in the fourth
quarter of 2022.
Full Year ended December 31, 2023 Financial Highlights
-- Revenues rose to $2,095.9 million, representing 17.7% year-over-year
growth.
-- IFRS Gross Profit Margin was 36.1% compared to 37.6% for the full year
2022.
-- Non-IFRS Adjusted Gross Profit Margin was 38.1% compared to 39.2% for
the full year 2022.
-- IFRS Profit from Operations Margin was 9.5% compared to 11.6% for the
full year 2022.
-- Non-IFRS Adjusted Profit from Operations Margin was 15.2% compared to
16.3% for the full year 2022.
-- IFRS Diluted EPS was $3.64 compared to $3.47 for the full year 2022.
-- Non-IFRS Adjusted Diluted EPS was $5.74 compared to $5.08 for the full
year 2022.
Other Metrics as of and for the quarter ended December 31, 2023
-- Cash and cash equivalents and Short-term investments were $323.3 million
as of December 31, 2023, a decrease of $17.6 million from $340.9 million
as of December 31, 2022, driven mainly by investments in our platform
business, expansion to new geographies, the addition of new studios and
acquisitions. As of December 31, 2023, we had a total amount of $155
million drawn from our credit facility.
-- Globant completed the fourth quarter of 2023 with 29,150 Globers, 27,116
of whom were technology, design and innovation professionals.
-- The geographic revenue breakdown for the fourth quarter of 2023 was as
follows: 57.4% from North America (top country: US), 22.9% from Latin
America (top country: Argentina), 17.2% from EMEA (top country: Spain)
and 2.5% from Asia and Oceania (top country: Japan).
-- Globant's top customer, top five customers and top ten customers for the
fourth quarter of 2023 represented 8.2%, 21.4% and 30.8% of revenues,
respectively.
-- During the twelve months ended December 31, 2023, Globant served a total
of 1,610 customers (with revenues over $10,000 in the last twelve
months) and continued to increase its wallet share, with 311 accounts
generating more than $1 million of annual revenues, compared to 259 for
the same period one year ago.
-- In terms of currencies, 68.6% of Globant's revenues for the fourth
quarter of 2023 were denominated in US dollars.
"Our journey of two decades has been marked by resilience, innovation and a commitment to delivering exceptional results. As we reflect on our achievements from the fourth quarter and full year of 2023, we are very proud of the progress we have made as a company. Throughout the year, we expanded into new markets, forged valuable relationships with top-notch new clients and diversified our service offering. Our dedication to being a trusted end-to-end partner has enabled us to craft multiple solutions and continuously expand the breadth of our services, platforms and capabilities. With a global footprint in five continents and a focus on AI and generative AI capabilities, we are well-positioned for future growth," said Martín Migoya, Globant's CEO and co-founder. "Our recent acquisitions of GUT and Iteris further strengthen our creative and digital capabilities. As we enter 2024, we remain optimistic about the growth potential of our total addressable market and our ability to deliver industry-leading results."
"Our strong results in 2023 reflect the strength inherent in our culture, the agility of our business model and the transformative impact of our work. We achieved a milestone of $2.1 billion in revenue, representing a remarkable 17.7% year-over-year growth, while capturing a significant market share and validating our value proposition. Our focus on profitability and operational efficiency resulted in solid financial health, as we maintained strong margins and generated meaningful profitability. With a robust financial position and significant free cash flow generation, we are strategically positioned to foster expansion and strengthen our strategic investments. We are grateful for the trust and support of our clients, shareholders and the entire Globant team as we continue our journey of growth and success," explained Juan Urthiague, Globant's CFO.
2024 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 2024:
-- First quarter 2024 Revenues are estimated to be at least $570.0 million,
or 20.7% year-over-year growth.
-- First quarter 2024 Non-IFRS Adjusted Profit from Operations Margin is
estimated to be in the range of 15-16%.
-- First quarter 2024 Non-IFRS Adjusted Diluted EPS is estimated to be at
least $1.53 (assuming an average of 44.1 million diluted shares
outstanding during the first quarter).
-- Fiscal year 2024 Revenues are estimated to be at least $2,435.0 million,
implying at least 16.2% year-over-year revenue growth.
-- Fiscal year 2024 Non-IFRS Adjusted Profit from Operations Margin is
estimated to be in the range of 15%-16%.
-- Fiscal year 2024 Non-IFRS Adjusted Diluted EPS is estimated to be at
least $6.50 (assuming an average of 44.3 million diluted shares
outstanding during 2024).
Conference Call and Webcast
Martin Migoya, Globant's CEO and co-founder, Juan Urthiague, Globant's CFO, Patricia Pomies, Globant's COO, and Diego Tártara, Globant's CTO, will discuss the fourth quarter 2023 results in a video conference call today beginning at 4:30pm ET.
Video conference call access information is:
https://more.globant.com/F4Q23EarningsCall
Webcast http://investors.globant.com/
About Globant (NYSE:GLOB)
We are a digitally native company that helps organizations reinvent themselves to create a way forward and unleash their potential. We are the place where innovation, design and engineering meet scale.
We have more than 29,000 employees and we are present in more than 30 countries across 5 continents working for companies like Google, Electronic Arts and Santander, among others.
We were named a Worldwide Leader in CX Improvement 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"), 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, acquisition-related charges, and the related effect on income taxes of the pre-tax adjustments. 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 consolidated statements of financial position as of December 31, 2023 and December 31, 2022 and its consolidated statements of comprehensive income for the three months and years ended December 31, 2023 and 2022, prepared in accordance with IFRS as issued by the 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, acquisition-related charges, and the tax effect of non-IFRS adjustments. 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 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.
Consolidated Statements of Comprehensive Income
(In thousands of U.S. dollars, except per share amounts, unaudited)
Twelve Months Ended Three Months Ended
December 31, December 31, December 31, December 31,
2023 2022 2023 2022
Revenues 2,095,939 1,780,243 580,705 490,724
Cost of revenues (1,340,178) (1,110,848) (372,384) (307,204)
Gross profit 755,761 669,395 208,321 183,520
Selling, general and administrative expenses (537,075) (456,324) (147,011) (123,800)
Net impairment losses on financial assets (18,808) (6,364) (4,829) (4,541)
Other operating income and expenses, net (916) (1,530)
Profit from operations 198,962 206,707 54,951 55,179
Finance income 4,777 2,832 1,277 1,366
Finance expense (23,753) (16,552) (8,690) (5,142)
Other financial results, net 11,342 173 (131) 1,310
Financial results, net (7,634) (13,547) (7,544) (2,466)
Share of results of investment in associates 89 119 (96) 94
Other income and expenses, net 6,602 (395) 2,527 (2,414)
Profit before income tax 198,019 192,884 49,838 50,393
Income tax (39,511) (43,405) (8,444) (10,975)
Net income for the period 158,508 149,479 41,394 39,418
Other comprehensive income, net of income tax effects
Items that may be reclassified subsequently to profit and loss:
- Exchange differences on translating foreign operations (16,721) (21,770) 12,040 20,044
- Net change in fair value on financial assets measured at FVOCI 119 (107) 2,435 1,978
- Gains and losses on cash flow hedges 9,327 (3,171) 9,210 3,047
Total comprehensive income for the period 151,233 124,431 65,079 64,487
Net income attributable to:
Owners of the Company 158,538 148,891 42,133 39,185
Non-controlling interest (30) 588 (739) 233
Net income for the period 158,508 149,479 41,394 39,418
Total comprehensive income for the period attributable to:
Owners of the Company 148,732 123,044 63,454 63,455
Non-controlling interest 2,501 1,387 1,625 1,032
Total comprehensive income for the period 151,233 124,431 65,079 64,487
Earnings per share
Basic 3.72 3.55 0.98 0.93
Diluted 3.64 3.47 0.96 0.91
Weighted average of outstanding shares (in thousands)
Basic 42,601 41,929 42,976 42,153
Diluted 43,594 42,855 43,970 43,079
Globant S.A.
Consolidated Statements of Financial Position as of December 31, 2023 and December 31, 2022
(In thousands of U.S. dollars, unaudited)
December 31, 2023 December 31, 2022
ASSETS
Current assets
---
Cash and cash equivalents 307,223 292,457
Investments 16,070 48,408
Trade receivables 499,283 424,810
Other assets 31,753 15,197
Other receivables 54,786 70,212
Other financial assets 15,418 6,529
Total current assets 924,533 857,613
Non-current assets
---
Investments 1,833 1,513
Other assets 4,088 10,657
Other receivables 26,475 21,141
Deferred tax assets 60,777 41,982
Investment in associates 1,426 1,337
Other financial assets 34,864 34,978
Property and equipment 162,736 161,733
Intangible assets 235,540 182,572
Right-of-use assets 119,400 147,311
Goodwill 1,163,683 734,952
Total non-current assets 1,810,822 1,338,176
TOTAL ASSETS 2,735,355 2,195,789
LIABILITIES
Current liabilities
---
Trade payables 124,545 89,397
Payroll and social security taxes payable 221,843 203,819
Borrowings 156,916 2,838
Other financial liabilities 81,504 59,316
Lease liabilities 47,852 37,681
Tax liabilities 33,229 23,454
Income tax payable 11,287 11,276
Other liabilities 896 808
Total current liabilities 678,072 428,589
Non-current liabilities
---
Trade payables 2,981 5,445
Borrowings 2,191 861
Other financial liabilities 163,318 78,055
Lease liabilities 70,884 97,457
Deferred tax liabilities 9,706 11,291
Payroll and social security taxes payable 5,139 4,316
Provisions for contingencies 16,448 13,615
Total non-current liabilities 270,667 211,040
TOTAL LIABILITIES 948,739 639,629
Capital and reserves
Issued capital 51,705 50,724
Additional paid-in capital 1,022,918 950,520
Other reserves (42,048) (32,242)
Retained earnings 697,089 538,551
Total equity attributable to owners of the Company 1,729,664 1,507,553
Non-controlling interests 56,952 48,607
Total equity 1,786,616 1,556,160
TOTAL EQUITY AND LIABILITIES 2,735,355 2,195,789
Globant S.A.
Selected Cash Flow Data
(In thousands of U.S. dollars, unaudited)
Three Months Ended
December 31, 2023 December 31, 2022
Net Income for the period 41,394 39,418
Non-cash adjustments, taxes and others 56,119 50,219
Changes in working capital 63,389 9,553
Cash flows from operating activities 160,902 99,190
Capital expenditures (36,323) (14,903)
Cash flows from investing activities (141,829) (71,272)
Cash flows from financing activities 90,336 (31,059)
Net decrease in cash & cash equivalents 109,409 (3,141)
Globant S.A.
Supplemental Non-IFRS Financial Information
(In thousands of U.S. dollars, unaudited)
Twelve Months Ended Three Months Ended
December December December December
31, 2023 31, 2022 31, 2023 31, 2022
Reconciliation of adjusted gross profit
Gross Profit 755,761 669,395 208,321 183,520
Depreciation and amortization expense 28,597 23,312 7,985 6,555
Share-based compensation expense - Equity settled 15,155 4,917 4,179 1,497
Adjusted gross profit 799,513 697,624 220,485 191,572
Adjusted gross profit margin 38.1 % 39.2 % 38.0 % 39.0 %
Reconciliation of selling, general and administrative expenses
Selling, general and administrative expenses (537,075) (456,324) (147,011) (123,800)
Depreciation and amortization expense 85,584 62,822 24,083 17,959
Share-based compensation expense - Equity settled 57,016 50,296 15,574 13,035
Acquisition-related charges (a) 21,092 13,612 6,604 4,611
Adjusted selling, general and administrative expenses (373,383) (329,594) (100,750) (88,195)
Adjusted selling, general and administrative expenses as % of revenues (17.8) % (18.5) % (17.3) % (18.0) %
Reconciliation of Adjusted Profit from Operations
Profit from Operations 198,962 206,707 54,951 55,179
Share-based compensation expense - Equity settled 72,171 55,213 19,753 14,532
Acquisition-related charges (a) 46,993 27,456 14,416 9,268
Adjusted Profit from Operations 318,126 289,376 89,120 78,979
Adjusted Profit from Operations margin 15.2 % 16.3 % 15.3 % 16.1 %
Reconciliation of Net income for the period
Net income for the period 158,538 148,891 42,133 39,185
Share-based compensation expense - Equity settled 72,099 55,213 19,722 14,532
Acquisition-related charges (a) 48,205 28,765 17,566 10,856
Tax effect of non-IFRS adjustments (28,724) (15,146) (8,344) (4,437)
Adjusted Net income 250,118 217,723 71,077 60,136
Adjusted Net income margin 11.9 % 12.2 % 12.2 % 12.3 %
Calculation of Adjusted Diluted EPS
Adjusted Net income 250,118 217,723 71,077 60,136
Diluted shares 43,594 42,855 43,970 43,079
Adjusted Diluted EPS 5.74 5.08 1.62 1.40
(a) Acquisition-related charges include, when applicable, amortization of purchased intangible assets included in depreciation and amortization expense line on our consolidated statements of comprehensive income, interest charges on acquisition-related indebtedness, 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 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023
Total Employees 27,122 26,288 25,947 27,505 29,150
IT Professionals 25,331 24,496 24,163 25,575 27,116
North America Revenues % 61.7 61.4 60.6 58.9 57.4
Latin America Revenues % 22.7 21.8 22.0 21.6 22.9
EMEA Revenues % 11.9 13.4 14.1 16.5 17.2
Asia and Oceania Revenues % 3.7 3.4 3.3 3.0 2.5
USD Revenues % 77.5 74.8 73.9 72.5 68.6
Other Currencies Revenues % 22.5 25.2 26.1 27.5 31.4
Top Customer % 10.8 9.4 8.8 8.7 8.2
Top 5 Customers % 25.1 24.5 23.7 22.5 21.4
Top 10 Customers % 34.3 34.8 33.3 32.2 30.8
Customers Served (Last Twelve Months)* 1,249 1,342 1,388 1,544 1,610
Customers with >$1M in Revenues (Last Twelve Months) 259 276 283 305 311
(*) Represents customers with more than $10,000 in revenues in the last twelve months.
Investor Relations Contact:
Arturo Langa, 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
