Globant Reports 2024 Third Quarter Financial Results
Strong, Broad Based Results
-- Third quarter revenues of $614.7 million, up 12.7% year-over-year
-- IFRS Diluted EPS of $0.98 for the third quarter
-- Non-IFRS Adjusted Diluted EPS of $1.63 for the third quarter
LUXEMBOURG, Nov. 14, 2024 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native company focused on reinventing businesses through innovative technology solutions, today announced results for the three and nine months ended September 30, 2024.
Please see highlights below. Note that reconciliations between IFRS and Non-IFRS financial measures are disclosed at the end of this press release.
Third Quarter 2024 Financial Highlights
-- Revenues rose to $614.7 million, representing 12.7% year-over-year
growth.
-- IFRS Gross Profit Margin was 36.2% compared to 36.4% in the third
quarter of 2023.
-- Non-IFRS Adjusted Gross Profit Margin was 38.5% compared to 38.2% in the
third quarter of 2023.
-- IFRS Profit from Operations Margin was 10.6% compared to 9.7% in the
third quarter of 2023.
-- Non-IFRS Adjusted Profit from Operations Margin was 15.6% compared to
15.3% in the third quarter of 2023.
-- IFRS Diluted EPS was $0.98 compared to $0.98 in the third quarter of
2023.
-- Non-IFRS Adjusted Diluted EPS was $1.63 compared to $1.48 in the third
quarter of 2023.
Nine months ended September 30, 2024 Financial Highlights
-- Revenues rose to $1,773.2 million, representing 17.0% year-over-year
growth.
-- IFRS Gross Profit Margin was 35.8% compared to 36.1% in the first nine
months of 2023.
-- Non-IFRS Adjusted Gross Profit Margin was 38.2% compared to 38.2% in the
first nine months of 2023.
-- IFRS Profit from Operations Margin was 9.4% compared to 9.5% in the
first nine months of 2023.
-- Non-IFRS Adjusted Profit from Operations Margin was 15.2% compared to
15.1% in the first nine months of 2023.
-- IFRS Diluted EPS was $2.88 compared to $2.68 in the first nine months of
2023.
-- Non-IFRS Adjusted Diluted EPS was $4.67 compared to $4.12 in the first
nine months of 2023.
Other Metrics as of and for the quarter ended September 30, 2024
-- Cash and cash equivalents and Short-term investments were $213.5 million
as of September 30, 2024, a decrease of $109.8 million from $323.3
million as of December 31, 2023, driven mainly by the expansion into new
geographies and a number of M&A earnout payments. As of September 30,
2024, we had a total amount of $165 million drawn from our credit
facility.
-- Globant completed the third quarter of 2024 with 29,998 Globers, 27,927
of whom were technology, design and innovation professionals.
-- The geographic revenue breakdown for the third quarter of 2024 was as
follows: 55.7% from North America (top country: US), 21.8% from Latin
America (top country: Argentina), 17.6% from Europe (top country: Spain)
and 4.9% from New Markets(1) (top country: Saudi Arabia).
-- Globant's top customer, top five customers and top ten customers for the
third quarter of 2024 represented 9.1%, 21.0% and 30.1% of revenues,
respectively.
-- During the twelve months ended September 30, 2024, Globant served a
total of 969 customers (with revenues over $100,000 in the last twelve
months) and continued to increase its wallet share, with 331 accounts
generating more than $1 million of annual revenues, compared to 305 for
the same period one year ago.
-- In terms of currencies, 66.6% of Globant's revenues for the third
quarter of 2024 were denominated in US dollars.
"As we reflect on another remarkable quarter, I am thrilled to share that Globant continues on a trajectory of strong growth, solidifying our role as an industry leader. The level of demand we are witnessing across verticals and markets fuels our optimism for continued expansion in 2024. Our strategic investments in AI have lead to year-to-date AI-related initiatives increasing by 120% compared to the same period last year, enhancing our capabilities and driving productivity gains that translate into unique client experiences. With a strong pipeline and a commitment to redefining industries through our Studios, we are well-positioned to lead in this new era of digital innovation," said Martín Migoya, Globant's CEO and co-founder.
"As we conclude this quarter, I am pleased to report that Globant has achieved another quarter of record revenues, at $614.7 million, reflecting strong sequential growth driven by our top client and several key accounts. This performance aligns with our guidance and showcases our ability to enhance profitability while maintaining a prudent balance sheet. Our healthy margins are a reflection to our focus on profitability, while we see early recovery signs in specific verticals that previously faced headwinds. We are confident in our ability to sustain this momentum and build on our strong performance as we approach 2025," explained Juan Urthiague, Globant's CFO.
2024 Fourth Quarter and Full Year Outlook
Based on current market conditions, Globant is providing the following estimates for the fourth quarter and the full year of 2024:
-- Fourth quarter 2024 Revenues are estimated to be in the range of $642.0
million to $648.0 million, or 10.6% to 11.6% year-over-year growth.
-- Fourth quarter 2024 Non-IFRS Adjusted Profit from Operations Margin is
estimated to be in the range of 15.0% to 16.0%.
-- Fourth quarter 2024 Non-IFRS Adjusted Diluted EPS is estimated to be in
the range of $1.71 to $1.75 (assuming an average of 44.7 million diluted
shares outstanding during the fourth quarter).
-- Fiscal year 2024 Revenues are estimated to be in the range of $2,415.0
million to $2,421.0 million, implying a 15.2% to 15.5% year-over-year
revenue growth.
-- Fiscal year 2024 Non-IFRS Adjusted Profit from Operations Margin is
estimated to be in the range of 15.0% to 15.5%.
-- Fiscal year 2024 Non-IFRS Adjusted Diluted EPS is estimated to be in the
range of $6.37 to $6.43 (assuming an average of 44.5 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 third quarter 2024 results in a video conference call today beginning at 4:30pm ET.
Video conference call access information is:
https://more.globant.com/F3Q24EarningsCall
Webcast http://investors.globant.com/
About Globant (NYSE:GLOB)
At Globant, we create the digitally-native products that people love. We bridge the gap between businesses and consumers through technology and creativity, leveraging our expertise in AI. We dare to digitally transform organizations and strive to delight their customers.
We have more than 29,900 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 IFRS Accounting Standards 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, 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 condensed interim consolidated statements of financial position as of September 30, 2024 and December 31, 2023 and its condensed interim consolidated statements of comprehensive income for the three and nine months ended September 30, 2024 and 2023, prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting".
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.
Condensed Interim Consolidated Statements of Comprehensive Income
(In thousands of U.S. dollars, except per share amounts, unaudited)
Nine Months Ended Three Months Ended
September 30, September 30, September 30, September 30,
2024 2023 2024 2023
Revenues 1,773,206 1,515,234 614,667 545,282
Cost of revenues (1,139,161) (967,794) (392,392) (346,980)
Gross profit 634,045 547,440 222,275 198,302
Selling, general and administrative expenses (460,877) (390,064) (154,178) (142,531)
Net impairment losses on financial assets (8,994) (13,979) (3,667) (2,621)
Other operating income and expenses, net 2,738 614 777
Profit from operations 166,912 144,011 65,207 53,150
Finance income 3,876 3,500 1,349 1,324
Finance expense (20,536) (15,063) (7,034) (5,661)
Other financial results, net 7,341 11,473 1,735 3,044
Financial results, net (9,319) (90) (3,950) (1,293)
Share of results of investment in associates 161 185 105 170
Other income and expenses, net 6,142 4,075 (4,464) 2,774
Profit before income tax 163,896 148,181 56,898 54,801
Income tax (34,401) (31,067) (11,357) (10,978)
Net income for the period 129,495 117,114 45,541 43,823
Other comprehensive income, net of income tax effects
Items that may be reclassified subsequently to profit and loss:
- Exchange differences on translating foreign operations (20,458) (28,761) 22,555 (30,013)
- Net change in fair value on financial assets measured at FVOCI 1,019 (2,316) 15
- Gains and losses on cash flow hedges (12,768) 117 365 (3,762)
Total comprehensive income for the period 97,288 86,154 68,461 10,063
Net income attributable to:
Owners of the Company 127,324 116,405 43,606 42,993
Non-controlling interest 2,171 709 1,935 830
Net income for the period 129,495 117,114 45,541 43,823
Total comprehensive income for the period attributable to:
Owners of the Company 94,864 85,278 64,266 10,251
Non-controlling interest 2,424 876 4,195 (188)
Total comprehensive income for the period 97,288 86,154 68,461 10,063
Earnings per share
Basic 2.94 2.74 1.00 1.01
Diluted 2.88 2.68 0.98 0.98
Weighted average of outstanding shares (in thousands)
Basic 43,248 42,474 43,419 42,696
Diluted 44,271 43,442 44,442 43,664
Globant S.A.
Condensed Interim Consolidated Statements of Financial Position as of September 30, 2024 and December 31, 2023
(In thousands of U.S. dollars, unaudited)
September 30, 2024 December 31, 2023
ASSETS
Current assets
---
Cash and cash equivalents 199,031 307,223
Investments 14,425 16,070
Trade receivables 631,632 499,283
Other assets 24,033 31,753
Other receivables 60,417 54,786
Other financial assets 3,795 15,418
Total current assets 933,333 924,533
Non-current assets
---
Investments 2,212 1,833
Other assets 6,358 4,088
Other receivables 28,634 26,475
Deferred tax assets 67,528 60,777
Investment in associates 1,587 1,426
Other financial assets 37,010 34,864
Property and equipment 152,440 162,736
Intangible assets 286,161 285,661
Right-of-use assets 124,159 119,400
Goodwill 1,259,622 1,105,073
Total non-current assets 1,965,711 1,802,333
TOTAL ASSETS 2,899,044 2,726,866
LIABILITIES
Current liabilities
---
Trade payables 102,202 124,545
Payroll and social security taxes payable 225,193 221,843
Borrowings 186,284 156,916
Other financial liabilities 105,473 68,750
Lease liabilities 29,744 47,852
Tax liabilities 25,858 33,229
Income tax payable 11,043 11,287
Other liabilities 465 896
Total current liabilities 686,262 665,318
Non-current liabilities
---
Trade payables 2,627 2,981
Borrowings 1,220 2,191
Other financial liabilities 117,132 135,238
Lease liabilities 90,421 70,884
Deferred tax liabilities 18,381 21,098
Income tax payable 6,526
Payroll and social security taxes payable 5,050 5,139
Provisions for contingencies 17,367 28,336
Total non-current liabilities 258,724 265,867
TOTAL LIABILITIES 944,986 931,185
Capital and reserves
Issued capital 52,286 51,705
Additional paid-in capital 1,087,711 1,022,918
Other reserves (74,508) (42,048)
Retained earnings 824,413 697,089
Total equity attributable to owners of the Company 1,889,902 1,729,664
Non-controlling interests 64,156 66,017
Total equity 1,954,058 1,795,681
TOTAL EQUITY AND LIABILITIES 2,899,044 2,726,866
Globant S.A.
Selected Cash Flow Data
(In thousands of U.S. dollars, unaudited)
Three Months Ended
September 30, September 30,
2024 2023
Net Income for the period 45,541 43,823
Non-cash adjustments, taxes and others 76,819 53,723
Changes in working capital (31,823) (10,141)
Cash flows from operating activities 90,537 87,405
Capital expenditures (20,810) (26,758)
Cash flows from investing activities (89,596) (140,663)
Cash flows from financing activities 41,044 7,931
Net increase/decrease in cash & cash equivalents 41,985 (45,327)
Globant S.A.
Supplemental Non-IFRS Financial Information
(In thousands of U.S. dollars, unaudited)
Nine Months Ended
Three Months Ended
September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Reconciliation of adjusted gross profit
Gross profit 634,045 547,440 222,275 198,302
Depreciation and amortization expense 25,415 20,612 9,457 7,579
Share-based compensation expense - Equity settled 18,010 10,976 5,109 2,198
Adjusted gross profit 677,470 579,028 236,841 208,079
Adjusted gross profit margin 38.2 % 38.2 % 38.5 % 38.2 %
Reconciliation of selling, general and administrative expenses
Selling, general and administrative expenses (460,877) (390,064) (154,178) (142,531)
Depreciation and amortization expense 74,751 61,501 24,244 21,012
Share-based compensation expense - Equity settled 42,722 41,442 16,008 16,447
Acquisition-related charges (a) 17,230 14,488 1,646 5,370
Adjusted selling, general and administrative expenses (326,174) (272,633) (112,280) (99,702)
Adjusted selling, general and administrative expenses as % of revenues (18.4) % (18.0) % (18.3) % (18.3) %
Reconciliation of adjusted profit from operations
Profit from operations 166,912 144,011 65,207 53,150
Share-based compensation expense - Equity settled 60,732 52,418 21,117 18,645
Acquisition-related charges (a) 42,668 32,577 9,788 11,435
Adjusted profit from operations 270,312 229,006 96,112 83,230
Adjusted profit from operations margin 15.2 % 15.1 % 15.6 % 15.3 %
Reconciliation of net income for the period
Net income for the period 127,324 116,405 43,606 42,993
Share-based compensation expense - Equity settled 60,618 52,377 21,192 18,628
Acquisition-related charges (a) 41,334 30,639 14,954 9,878
Tax effect of non-IFRS adjustments (22,516) (20,380) (7,399) (6,720)
Adjusted net income 206,760 179,041 72,353 64,779
Adjusted net income margin 11.7 % 11.8 % 11.8 % 11.9 %
Calculation of adjusted diluted EPS
Adjusted net income 206,760 179,041 72,353 64,779
Diluted shares 44,271 43,442 44,442 43,664
Adjusted diluted EPS 4.67 4.12 1.63 1.48
(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, 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 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024
Total Employees 27,505 29,150 28,991 29,112 29,998
IT Professionals 25,575 27,116 26,933 27,133 27,927
North America Revenues % 58.9 57.4 56.0 56.3 55.7
Latin America Revenues % 21.6 22.9 22.9 23.0 21.8
Europe Revenues % 15.9 15.8 17.2 16.9 17.6
New Markets Revenues % 3.6 3.9 3.9 3.8 4.9
USD Revenues % 72.5 68.6 68.4 67.1 66.6
Other Currencies Revenues % 27.5 31.4 31.6 32.9 33.4
Top Customer % 8.7 8.2 8.3 8.3 9.1
Top 5 Customers % 22.5 21.4 21.8 21.0 21.0
Top 10 Customers % 32.2 30.8 30.1 30.3 30.1
Customers Served (Last Twelve Months)* 889 930 955 958 969
Customers with >$1M in Revenues (Last Twelve Months) 305 311 318 329 331
(*) Represents customers with more than $100,000 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
(1)Represents Asia, Oceania and the Middle East.
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