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Globant Reports 2016 First Quarter Financial Results
Record Revenues and Robust Operating Performance

SAN FRANCISCO, May 9, 2016 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally-native technology services company focused on creating digital journeys, today announced results for the three months ended March 31, 2016.

Globant Logo.

First Quarter 2016 Highlights

  • Revenue for the first quarter amounted to $73.3 million, representing a 34.5% year-over-year growth.
  • Non-IFRS Adjusted Gross Profit for the first quarter was $33.0 million (45.0% Non-IFRS Adjusted Gross Profit Margin), an increase of $12.0 million compared to $21.0 million (and an increase of 650 basis points compared to 38.5% Non-IFRS Adjusted Gross Profit Margin) in 2015. 
  • Non-IFRS Adjusted Net Income for the first quarter was $8.4 million (11.5% Non-IFRS Adjusted Net Income Margin), an increase of $0.9 million, or 12.0%, compared to a profit of $7.5 million for the first quarter of 2015.
  • Non-IFRS Adjusted Diluted EPS for the first quarter was $0.24 per share (based on 35.2 million average diluted shares for the quarter), an increase of $0.02 compared to Non-IFRS Adjusted Diluted Profit per Share of $0.22 for the first quarter of 2015.

Reconciliations between Non-IFRS / adjusted financial measures and IFRS operating results are included at the end of this press release.

"I am very pleased with our first quarter results. Our revenues for the quarter amounted to $73.3 million, representing an outstanding 34.5% year on year growth. This solid growth in revenue was driven by both our top 10 and our non top 10 accounts, which increased by 35.6% and 33.5% respectively, compared to the first quarter of 2015," explained Martín Migoya, Globant's CEO and co-founder.

Migoya added: "Globant continues to benefit from the strong market demand for digital services. Companies are embarking on company-wide digital transformations and we are being selected as a strategic partner to help them walk this important path. As our service offering expands with more practices around our Studios and the consolidation of Services over Platforms, we are reinforcing our position as a pure play on digital services, with strong capabilities in emerging technologies. We are in the right place to help our customers create digital journeys in a timely and innovative manner". 

"Q1 2016 represented a breakthrough in our operating performance, with significant improvements in both our gross and operating margins, driven by the long-awaited normalization of the Argentine Foreign Exchange market. The current margins show the strength of our operation,"  explained Alejandro Scannapieco, Globant's CFO.

Globant completed the quarter with 5,285 Globers, 4,847 of whom were IT professionals. The geographic revenue breakdown for the first quarter was as follows: 82.2% from North America (top country: U.S.), 10.8% from Latin America and others (top country: Chile) and 7.0% from Europe (top country: Spain). 92.2% of Globant's revenue for the first quarter was denominated in U.S. dollars and G.B. pounds and the remaining 7.8% was in other currencies.

During the 12 months ended March 31, 2016, Globant served 359 customers, 54 of which accounted for more than $1 million of Globant's revenues.  Globant's top customer, top 5 customers and top 10 customers represented 11.6%, 36.4% and 48.4% of the first quarter revenues, respectively.

Cash and cash equivalents and investments as of March 31, 2016 increased to $69.2 million from $62.4 million as of December 31, 2015, while borrowings amounted to $0.5 million. Current assets amounted as of March 31, 2016 amounted to $131.3 million, accounting for 56.3% of total assets. Finally, as of March 31, 2015 there were 34.2 million common shares issued and outstanding.

2016 Second Quarter and Full Year Outlook

Based on current market conditions, Globant is providing the following estimates for the second quarter and for the full year 2016:

  • Second quarter revenue is estimated to be between $76 - $78 million
  • Second quarter Non-IFRS diluted EPS is estimated to be in the range of $0.25 - $0.29 (assuming 35.3 million average diluted shares outstanding for the quarter).
  • Fiscal year 2016 revenue is estimated to be between $309- $315 million
  • Fiscal year 2016 Non-IFRS diluted EPS is estimated to be in the range of $1.12 - $1.20 (assuming 35.8 million average diluted shares outstanding for the full year).

Conference Call and Webcast

Martín Migoya and Alejandro Scannapieco will discuss the three-month 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 information and in our investor relations website after the call.

About Globant

Globant (NYSE: GLOB) is a digitally native technology services company. We dream and build digital journeys that matter to millions of users. We are the place where engineering, design, and innovation meet scale. Today, Globant has more than 5,200 professionals in 12 countries working for companies like Google, eBay Classifieds Group, JWT, EA and Coca-Cola, among others, has been recognized as one of the Top 10 Most Innovative Companies in South America by FastCompany, was included in the 2010 Cool Vendor in Business Process Services Report by Gartner, and has been featured in case studies at Harvard, MIT and Stanford.  For more information visit www.globant.com.

Non-IFRS Financial Information

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, acquisition related expenses and impairments of tax credits. Because the company's reported 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 financial statements, which are prepared according to IAS 34.

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, 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, the level of attrition of our IT professionals; the pricing structures we use for our client contracts; 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 the 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 the final prospectus for our initial public offering and other documents 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.

 

 

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,
2016


March 31,
2015







Revenues



73,326


54,512

Cost of revenues



(41,358)


(34,614)

Gross profit



31,968


19,898







Selling, general and administrative expenses



(17,769)


(15,457)

Impairment of tax credits, net



-


1,820

Profit from operations



14,199


6,261







Gain on transactions with bonds



-


3,984

Finance income



6,886


2,557

Finance expense



(7,447)


(2,736)

Finance expense, net



(561)


(179)







Other income and expenses, net



3


(3)

Profit before income tax



13,641


10,063







Income tax



(5,725)


(2,558)

Net income for the period



7,916


7,505







Other comprehensive loss net of income tax






Items that may be reclassified subsequently to profit and loss:






- Exchange differences on translating foreign operations



409


(604)

- Net fair value gain on available-for-sale financial assets



928


-

Total comprehensive income for the period



9,253


6,901







Net income attributable to:






Owners of the Company



7,940


7,505

Non-controlling interest



(24)


-

Net income for the period



7,916


7,505







Total comprehensive income for the period attributable to:






Owners of the Company



9,277


6,901

Non-controlling interest



(24)


-

Total comprehensive income for the period



9,253


6,901













Earnings per share 






Basic



0.23


0.22

Diluted



0.23


0.22

Weighted average of outstanding shares (in thousands)






Basic



34,223


33,621

Diluted



35,151


34,481

 

 

Globant S.A.
Condensed Interim Consolidated Statement of Financial Position
(In thousands of U.S. dollars, unaudited)










Mar 31, 2016


Dec 31, 2015

ASSETS






Current assets






Cash and cash equivalents



32,723


36,720

Investments



36,478


25,660

Trade receivables



45,914


45,952

Other receivables



15,328


18,570

Other financial assets



900


900

Total current assets



131,343


127,802







Non-current assets






Other receivables



24,038


20,122

Deferred tax assets



6,953


7,983

Investment in associates



800


300

Other financial assets



1,221


1,221

Property and equipment



28,718


25,720

Intangible assets



7,314


7,209

Goodwill



32,714


32,532

Total non-current assets



101,758


95,087

TOTAL ASSETS



233,101


222,889







LIABILITIES






Current liabilities






Trade payables



3,235


4,436

Payroll and social security taxes payable



23,506


25,551

Borrowings



253


280

Other financial liabilities



5,770


6,240

Tax liabilities



15,190


10,225

Other liabilities



11


9

Total current liabilities



47,965


46,741







Non-current liabilities






Borrowings



206


268

Other financial liabilities



15,100


15,045

Other liabilities



20


-

Provisions for contingencies



712


650

Total non-current liabilities



16,038


15,963

TOTAL LIABILITIES



64,003


62,704







Capital and reserves






Issued and paid-in capital



41,082


41,050

Additional paid-in capital



51,482


51,854

Other reserves



(675)


(2,012)

Retained earnings



77,183


69,243

Total equity attributable to owners of the Company



169,072


160,135

Non-controlling interests



26


50

Total equity



169,098


160,185

TOTAL EQUITY AND LIABILITIES



233,101


222,889

 

 

Supplemental Non-IFRS Financial Information
(In thousands of U.S. dollars, unaudited)








Three months ended




March 31,
2016


March 31,
2015







Reconciliation of adjusted gross profit






Gross Profit



31,968


19,898

Adjustments






Depreciation and amortization expense



914


1,107

Share-based compensation expense



144


5

Adjusted gross profit



33,026


21,010

Adjusted gross profit margin



45.0%


38.5%







Reconciliation of selling, general and administrative expenses



Selling, general and administrative expenses



-17,769


-15,457

Adjustments






Depreciation and amortization expense



1,334


1,195

Share-based compensation expense



351


9

Adjusted selling, general and administrative expenses


-16,084


-14,253

Adjusted selling, general and administrative expenses as % of revenues

-21.9%


-26.1%







Reconciliation of Adjusted Profit from Operations






Operating Profit



14,199


6,261

Adjustments






Impairment of tax credits, net of recoveries



-


-1,820

Share-based compensation expense



495


14

Adjusted Profit from Operations



14,694


4,455

Adjusted Operating Profit margin



20.0%


8.2%







Reconciliation of Net income (loss) for the period






Net income for the period



7,916


7,505

Adjustments






Share-based compensation expense



495


14

Adjusted Net income



8,411


7,519

Adjusted Net income margin



11.5%


13.8%







Calculation of Adjusted Diluted EPS






Adjusted Net income



8,411


7,519

Diluted shares



35,151


34,481

Adjusted Diluted EPS



0.24


0.22

 

 

Globant S.A.
Schedule of Supplemental Information











Metric

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016











Total Employees

3,332

3,371

3,567

3,775

4,040

4,512

4,724

5,041

5,285

IT Professionals

3,000

3,050

3,217

3,424

3,694

4,121

4,327

4,613

4,847











North America Revenue %

79.9

81.1

82.3

83.1

84.1

85.2

84.1

81.7

82.2

Latin America and Others Revenue %

13.0

13.0

11.9

12.0

10.1

9.7

11.5

12.2

10.8

Europe Revenue %

7.1

6.0

5.8

4.9

5.8

5.1

4.4

6.0

7.0











USD Revenue %

88.9

91.8

93.5

94.6

95.0

94.6

93.3

90.8

91.9

GBP Revenue %

1.3

0.8

0.6

0.7

1.0

0.8

1.4

2.4

0.4

Other Currencies Revenue %

9.8

7.4

5.9

4.8

4.0

4.6

5.3

6.8

7.8











Top Customer %

7.1

10.1

8.8

8.8

10.2

12.3

13.4

12.7

11.6

Top 5 Customers %

25.4

29.0

29.2

28.9

30.8

32.8

33.2

34.4

36.4

Top 10 Customers %

39.8

44.8

46.2

44.8

47.8

47.7

45.9

46.4

48.4











LTM Customers Served

266

278

299

296

292

344

343

344

359

LTM Customers with >$1M in Revenue

42

42

45

46

43

43

47

51

49

 

Investor Relations Contact:
Juan Urthiague, Globant
investors@globant.com
(877) 215-5230

Media Contact:
Wanda Weigert, Globant
pr@globant.com
(877) 215-5230

Logo - http://photos.prnewswire.com/prnh/20120802/MX50844LOGO

SOURCE Globant


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