Globant Reports 2018 Full Year and Fourth Quarter Financial Results
Robust Revenue Growth and Solid Financial Performance

LUXEMBOURG, Feb. 14, 2019 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three and twelve months ended December 31, 2018.

Globant Logo.

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 2018 highlights

  • Revenues increased to a record $140.1 million, representing 21.4% year-over-year growth.
  • Non-IFRS Adjusted Gross Profit was $58.4 million (41.7% Non-IFRS Adjusted Gross Profit Margin), an increase of $13.4 million compared to $45.0 million (39.0% Non-IFRS Adjusted Gross Profit Margin) for the fourth quarter of 2017.
  • Non-IFRS Adjusted Net Income was $18.5 million (13.2% Non-IFRS Adjusted Net Income Margin), an increase of $4.4 million compared to $14.1 million (12.2% Non-IFRS Adjusted Net Income Margin) for the fourth quarter of 2017.
  • Non-IFRS Adjusted Diluted EPS was $0.50 per share (based on an average of 36.9 million diluted shares), an increase of $0.11 compared to $0.39 per share (based on an average of 36.3 million diluted shares) for the fourth quarter of 2017.

Full year ended December 31, 2018 highlights

  • Revenues increased to $522.3 million, representing 26.3% year-over-year growth.
  • Non-IFRS Adjusted Gross Profit was $212.0 million (40.6% Non-IFRS Adjusted Gross Profit Margin), an increase of $51.7 million compared to $160.3 million (38.8% Non-IFRS Adjusted Gross Profit Margin) for the full year 2017.
  • Non-IFRS Adjusted Net Income was $63.7 million (12.2% Non-IFRS Adjusted Net Income Margin), an increase of $17.6 million, compared to $46.1 million (11.1% Non-IFRS Adjusted Net Income Margin) for the full year 2017.
  • Non-IFRS Adjusted Diluted EPS was $1.74 per share (based on an average of 36.7 million diluted shares), an increase of $0.46 compared to $1.28 (based on an average of 36.1 million diluted shares) for the full year 2017.

"2018 was another very successful year for our company. Our full year revenues for 2018 amounted to $522.3 million, representing a 26.3% year-over-year growth. At the same time, revenues for the fourth quarter of 2018 amounted to $140.1 million, a new record for the company and an increase of 21.4% compared to the same period in 2017," said Martín Migoya, Globant's CEO and co-founder.

"Our constant expansion is mainly driven by our unique focus as a pure play in the digital and cognitive arena, which makes us the best partner to help organizations transform their businesses. We do this with a comprehensive approach that goes from evolving their culture, creating digital products and bringing digital and cognitive to the back office, to creating a full digital native culture for them. Our ultimate goal is to help evolve the entire technology organization to the next level", explained Martín Migoya. "Looking into 2019, we continue to have strong demand from companies looking to achieve digital and cognitive transformations as new users and requirements arise. We believe that our market approach with our Studios, our Agile Pods and our 50-Squared model positions us as a leader in this arena," added Martín Migoya.

"I am very satisfied with our overall results for the fourth quarter and full year 2018. During this year we continued to deliver strong revenue growth and significantly improved our profitability and cash generation", explained Juan Urthiague, Globant's CFO.

Globant completed the fourth quarter with 8,384 Globers, 7,821 of whom were technology, design and innovation professionals. The geographic revenues breakdown for the fourth quarter was as follows: 77.4% from North America (top country: US), 13.5% from Latin America and others (top country: Argentina) and 9.1% from Europe (top country: Spain). 85.6% of Globant's revenues for the fourth quarter was denominated in US dollars, and the remaining 14.4% was denominated in other currencies, including Euros, GB pounds and other Latin American currencies.

During the last twelve months ended December 31, 2018, Globant served 373 customers, 90 of which accounted for more than $1 million of Globant's revenues. Globant's top customer, top five customers and top ten customers represented 10.9%, 30.9% and 42.7% of fourth quarter revenues, respectively.

Cash and bank balances and Investments as of December 31, 2018 increased to $87.0 million from $60.7 million as of December 31, 2017. Current assets amounted to $214.0 million, accounting for 48.5% of total assets for the same period. Finally, as of December 31, 2018, 36.0 million common shares were issued and outstanding.

2019 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 2019:

  • First quarter 2019 Revenues are estimated to be between $144-$146 million, implying 21.1% year-over-year growth at the midpoint of the range.
  • First quarter 2019 Non-IFRS Adjusted Diluted EPS is estimated to be in the range of $0.45-$0.49 (assuming an average of 37.1 million diluted shares outstanding during the first quarter).
  • Fiscal year 2019 Revenues are estimated to be in the range of $635-$645 million, implying 22.5% year-over-year revenues growth at the midpoint of the range.
  • Fiscal year 2019 Non-IFRS Adjusted Diluted EPS is estimated to be in the range of $2.10-$2.20 (assuming an average of 37.4 million diluted shares outstanding during 2019). 

Conference Call and Webcast

Martín Migoya and Juan Urthiague will discuss the Q4 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 8,300 professionals and we are present in 14 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 Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The interim financial information included in this announcement has been also prepared in accordance with IFRS applicable to interim periods, however 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, expenses related to our June 2018 secondary share offering 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 December 31, 2018 and December 31, 2017 and its unaudited interim consolidated statement of profit or loss and other comprehensive income for the three and twelve months ended December 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 assets, expenses related to our June 2018 secondary share offering 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 Argentina; 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 decision 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)

               
 

Year ended

 

Three months ended

 

December 31, 2018

 

December 31, 2017

 

December 31, 2018

 

December 31, 2017

               

Revenues 

522,310

 

413,439

 

140,138

 

115,433

Cost of revenues 

(318,554)

 

(263,171)

 

(83,797)

 

(72,701)

Gross profit

203,756

 

150,268

 

56,341

 

42,732

               

Selling, general and administrative expenses

(133,186)

 

(110,813)

 

(35,539)

 

(28,905)

Net impairment losses on financial assets

(3,469)

 

(1,581)

 

(2,575)

 

(98)

Other operating (expenses) income, net

(306)

 

(4,708)

 

(306)

 

(4,708)

Profit from operations

66,795

 

33,166

 

17,921

 

9,021

               

Finance income

11,418

 

7,956

 

1,643

 

2,774

Finance expense

(16,969)

 

(11,036)

 

(3,154)

 

(3,629)

Finance expense, net

(5,551)

 

(3,080)

 

(1,511)

 

(855)

               

Other income, net

6,220

 

8,458

 

(1,374)

 

6,048

Profit before income tax

67,464

 

38,544

 

15,036

 

14,214

               

Income tax

(15,868)

 

(8,081)

 

(3,527)

 

(2,694)

Net income for the period

51,596

 

30,463

 

11,509

 

11,520

               

Other comprehensive income, net of income tax effects

             

Items that may be reclassified subsequently to profit and loss:

             

- Exchange differences on translating foreign operations

(871)

 

(265)

 

451

 

(469)

- Net change in fair value on financial assets measured at FVOCI

(12)

 

(27)

 

(5)

 

-

Total comprehensive income for the period

50,713

 

30,171

 

11,955

 

11,051

               

Net income attributable to:

             

Owners of the Company

51,677

 

30,539

 

11,509

 

11,543

Non-controlling interest

(81)

 

(76)

 

-

 

(23)

Net income for the period

51,596

 

30,463

 

11,509

 

11,520

               

Total comprehensive income for the period attributable to:

             

Owners of the Company

50,794

 

30,247

 

11,955

 

11,074

Non-controlling interest

(81)

 

(76)

 

-

 

(23)

Total comprehensive income for the period

50,713

 

30,171

 

11,955

 

11,051

               
               

Earnings per share 

             

Basic

1.44

 

0.87

 

0.32

 

0.33

Diluted

1.41

 

0.84

 

0.31

 

0.32

               

Weighted average of outstanding shares (in thousands)

             

Basic

35,746

 

34,919

 

35,961

 

35,172

Diluted

36,685

 

36,094

 

36,899

 

36,349

 

 

Globant S.A.

Consolidated Statement of Financial Position

(In thousands of U.S. dollars, unaudited)

       
 

December

 

December

ASSETS

31, 2018

 

31, 2017

Current assets

     

Cash and bank balances

78,384

 

52,525

Investments

8,635

 

8,147

Trade receivables

110,898

 

80,078

Other receivables 

15,567

 

14,357

Other financial assets

550

 

873

Total current assets

214,034

 

155,980

       

Non-current assets

     

Investments

527

 

-

Other receivables 

34,197

 

31,736

Deferred tax assets

16,916

 

13,186

Investment in associates

4,000

 

1,550

Other financial assets

345

 

555

Property and equipment

51,460

 

43,879

Intangible assets

11,778

 

11,365

Goodwill

107,890

 

98,926

Total non-current assets

227,113

 

201,197

TOTAL ASSETS

441,147

 

357,177

       

LIABILITIES

     

Current liabilities

     

Trade payables 

17,578

 

11,640

Payroll and social security taxes payable

59,313

 

40,472

Borrowings

-

 

6,011

Other financial liabilities

8,858

 

10,664

Tax liabilities

7,625

 

5,253

Other liabilities 

43

 

20

Total current liabilities

93,417

 

74,060

       

Non-current liabilities

     

Other financial liabilities

6,952

 

18,574

Provisions for contingencies

2,862

 

1,179

Total non-current liabilities

9,814

 

19,753

TOTAL LIABILITIES

103,231

 

93,813

       

Capital and reserves

     

Issued capital

43,158

 

42,271

Additional paid-in capital

109,559

 

86,728

Other reserves

(2,136)

 

(1,253)

Retained earnings

187,335

 

135,658

Total equity attributable to owners of the Company

337,916

 

263,404

Non-controlling interests

-

 

(40)

Total equity

337,916

 

263,364

TOTAL EQUITY AND LIABILITIES

441,147

 

357,177

       

 

 

Globant S.A.

Supplemental Non-IFRS Financial Information

(In thousands of U.S. dollars, unaudited)

               
 

Year ended

 

Three months ended

 

December 31, 2018

 

December 31, 2017

 

December 31, 2018

 

December 31, 2017

               

Reconciliation of adjusted gross profit

             

Gross Profit

203,756

 

150,268

 

56,341

 

42,732

Depreciation and amortization expense

4,022

 

4,339

 

967

 

1,071

Share-based compensation expense

4,248

 

5,666

 

1,095

 

1,165

Adjusted gross profit

212,026

 

160,273

 

58,403

 

44,968

Adjusted gross profit margin

40.6%

 

38.8%

 

41.7%

 

39.0%

               

Reconciliation of selling, general and administrative expenses

             

Selling, general and administrative expenses

(133,186)

 

(110,813)

 

(35,539)

 

(28,905)

Depreciation and amortization expense

16,521

 

11,789

 

4,638

 

3,304

Share-based compensation expense

8,665

 

8,798

 

2,327

 

2,032

Acquisition-related charges (a)

3,516

 

1,131

 

1,543

 

546

Adjusted selling, general and administrative expenses

(104,484)

 

(89,095)

 

(27,031)

 

(23,023)

Adjusted selling, general and administrative expenses as % of revenues

(20.0)%

 

(21.5)%

 

(19.3)%

 

(19.9)%

               

Reconciliation of Adjusted Profit from Operations

             

Operating Profit

66,795

 

33,166

 

17,921

 

9,021

Share-based compensation expense

12,913

 

14,464

 

3,422

 

3,197

Acquisition-related charges (a)

4,273

 

7,523

 

1,733

 

5,643

Impairment of assets (b)

354

 

1,586

 

306

 

-

Adjusted Profit from Operations

84,335

 

56,739

 

23,382

 

17,861

Adjusted Profit from Operations margin

16.1%

 

13.7%

 

16.7%

 

15.5%

               

Reconciliation of Net income for the period

             

Net income for the period

51,596

 

30,463

 

11,509

 

11,520

Share-based compensation expense

12,913

 

14,464

 

3,422

 

3,197

Acquisition-related charges (a)

(2,177)

 

(447)

 

2,459

 

(587)

Impairment of assets (b)

1,154

 

1,586

 

1,106

 

-

Expenses related to secondary share offering (c)

251

 

-

 

-

 

-

Adjusted Net income 

63,737

 

46,066

 

18,496

 

14,130

Adjusted Net income margin

12.2%

 

11.1%

 

13.2%

 

12.2%

               

Calculation of Adjusted Diluted EPS

             

Adjusted Net income 

63,737

 

46,066

 

18,496

 

14,130

Diluted shares

36,685

 

36,094

 

36,899

 

36,349

Adjusted Diluted EPS

1.74

 

1.28

 

0.50

 

0.39

               

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.

(b)  Impairment of assets includes, when applicable, charges for impairment of intangible assets, charges for impairment of investments in associates and charges for impairment of tax credits, net of recoveries.

(c)  Expenses related to our June 2018 secondary share offering include expenses related to the secondary offering in the United States of our common shares held by WPP Luxembourg Gamma Three S.àr.l.


 

Globant S.A.

Schedule of Supplemental Information (unaudited)

           

Metrics

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Q4 2018

           

Total Employees

6,753

6,940

7,279

7,807

8,384

IT Professionals

6,279

6,462

6,775

7,285

7,821

           

North America Revenues %

78.6

78.6

78.4

77.5

77.4

Latin America and Others Revenues % 

14.6

13.8

13.1

12.5

13.5

Europe Revenues %

6.8

7.6

8.5

10.0

9.1

           

USD Revenues %

82.5

85.5

86.4

85.1

85.6

Other Currencies Revenues %

17.5

14.5

13.6

14.9

14.4

           

Top Customer %

10.4

11.1

11.1

11.9

10.9

Top 5 Customers %

28.5

31.3

32.5

33.4

30.9

Top 10 Customers %

43.2

44.5

44.6

45.8

42.7

           

Customers Served (Last Twelve Months)

356

348

355

344

373

Customers with >$1M in Revenues (Last Twelve Months)

82

89

92

90

90

 

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

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

Source: Globant

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SOURCE Globant