Globant Reports Second Quarter Financial Results - Record Quarterly Revenue

 

 

SAN FRANCISCO, Aug. 14, 2014 /PRNewswire/ -- Globant (NYSE: GLOB), a new-breed technology services provider focused on delivering innovative software solutions by leveraging emerging technologies and trends, today announced results for the three and six months ending June 30, 2014.

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Highlights

  • Revenue for the second quarter was $49.4 million, a record for the company, representing 32.2% year-over-year growth
  • Revenue for the first half of the year was $92.5 million, representing 29.0% year-over-year growth
  • IFRS Gross Profit for the second quarter was $20.0 million (40.5% IFRS Gross Profit Margin) and Non-IFRS Adjusted Gross Profit for the second quarter was $20.9 million (42.3% Non-IFRS Adjusted Gross Profit Margin)
  • IFRS Profit for the second quarter was $5.9 million (11.9% IFRS Profit Margin) and Non-IFRS Adjusted Profit for the quarter was $5.9 million (12.0% Non-IFRS Adjusted Profit Margin)
  • IFRS Diluted EPS and Non-IFRS Adjusted Diluted EPS for the second quarter was $0.20 per share (assuming 29.9 million average diluted shares for the quarter)

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

"I am excited with our record results in the second quarter.  They show our ability to scale on our business model, which integrates innovation, design and engineering for our clients under one roof," explained Martin Migoya, CEO of Globant.  "We are thrilled with our new status as a public company.  This is a huge milestone for us and, at the same time, we believe it's just one more step in our journey, one like many others that will advance our goal of becoming the best company creating innovative software products. Being a public company will open up more opportunities to continue building a better organization each day for our clients, our Globers and all of our stakeholders.  I am certain that we will continue disrupting the services marketplace with our offerings and that we have the right internal and external support for this endeavor."

"With the IPO behind us and with a stronger balance sheet in place, we will continue to focus on further growing our business", said Alejandro Scannapieco, Globant's CFO.  Globant finished the quarter with 3,371 Globers, of which 3,050 were IT professionals. Geographic revenue breakdown for the six months ended June 30, 2014 was as follows: 81% from North America (U.S. top country), 13% from Latin America (Chile top country) and 6% from Europe (U.K. top country).  90% of Globant's revenue for the second quarter was denominated in U.S. dollars, with 1% in British pounds and 9% in other currencies.

Full Year and 3Q Outlook

For the third quarter of 2014, Globant estimates revenue to be between $49 - $51 million.  Non-IFRS Adjusted Profit Margin for the quarter is estimated to be between 13% - 14%, with Non-IFRS Adjusted Diluted EPS in the range of $0.18 - $0.22 (assuming 33.3 million average diluted shares outstanding for the quarter).

For the full year 2014, Globant estimates revenue to be between $195 - $198 million.  Non-IFRS Adjusted Profit Margin for the year is estimated to be between 11% - 12%, with Non-IFRS Adjusted Diluted EPS in the range of $0.66 - $0.74 (assuming 31.9 million average diluted shares outstanding for the full year).

Conference Call and Webcast

Martin Migoya and Alejandro Scannapieco will discuss the three and six month results in a conference call today beginning at 4:30pm ET.

Conference call access information is:
US +1 (877) 870-4263
International +1 (412) 317-0790
Webcast http://investors.globant.com/index.php?s=19&item=6

Additionally, a webcast 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 new-breed technology services provider focused on delivering innovative software solutions by leveraging emerging technologies and trends.  Globant combines the engineering and technical rigor of IT services providers with the creative approach and culture of digital agencies. Customers select Globant as the place where engineering, design and innovation meet scale.  In only 11 years, Globant has grown into a company with more than 3,300 professionals working for companies like Google, Linkedin, 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. 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, amortization of purchased intangible assets, and provisions resulting from changes in valuation allowances. 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 consolidated financial statements, which are prepared according to IFRS.

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)

 

   

Six months ended

 

Three months ended

   

June 30, 2014

 

June 30, 2013

 

June 30, 2014

 

June 30, 2013

                 

Revenues 

 

92,529

 

71,722

 

49,404

 

37,371

Cost of revenues

 

(55,737)

 

(45,587)

 

(29,378)

 

(23,511)

Gross profit

 

36,792

 

26,135

 

20,026

 

13,860

                 

Selling, general and administrative expenses

 

(26,333)

 

(24,834)

 

(13,392)

 

(13,267)

Impairment of tax credits

 

(781)

 

-

 

(365)

 

-

Profit from operations

 

9,678

 

1,301

 

6,269

 

593

                 

Gain on transactions with bonds

 

4,779

 

11,294

 

2,173

 

8,187

Finance income

 

5,085

 

123

 

569

 

-

Finance expense

 

(6,462)

 

(2,227)

 

(1,004)

 

(1,365)

Finance expense, net

 

(1,377)

 

(2,104)

 

(435)

 

(1,365)

                 

Other income and expenses, net

 

(27)

 

-

 

6

 

-

Profit before income tax

 

13,053

 

10,491

 

8,013

 

7,415

                 

Income tax

 

(3,728)

 

(2,497)

 

(2,112)

 

(1,810)

Profit for the period

 

9,325

 

7,994

 

5,901

 

5,605

                 

Other comprehensive loss net of income tax

               

Items that may be reclassified subsequently to profit and loss:

               

- Exchange differences on translating foreign operations

 

204

 

(69)

 

50

 

(138)

Total comprehensive income for the period

 

9,529

 

7,925

 

5,951

 

5,467

                 

Profit attributable to:

               

Owners of the Company

 

9,273

 

7,994

 

 

5,901

 

5,605

Non-controlling interest

 

52

 

-

 

-

 

-

Profit for the period

 

9,325

 

7,994

 

 

5,901

 

5,605

                 

Total comprehensive income for the period attributable to:

               

Owners of the Company

 

9,477

 

7,925

 

 

5,951

 

5,467

Non-controlling interest

 

52

 

-

 

-

 

-

Total comprehensive income for the period

 

9,529

 

7,925

 

5,951

 

5,467

                 

Earnings per share

               

Basic

 

0.32

 

0.29

 

0.20

 

0.20

Diluted

 

0.31

 

0.27

 

0.20

 

0.19

Weighted average of outstanding shares (in thousands)

               

Basic

 

28,995

 

27,749

 

28,995

 

27,818

Diluted

 

29,945

 

29,788

 

29,945

 

29,857

 

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

 

   

June 30, 2014

 

December 31, 2013

         

ASSETS

Current assets

       

Cash and cash equivalents 

 

9,827

 

17,051

Restricted cash equivalent

 

388

 

-

Investments

 

12,319

 

9,634

Trade receivables

 

37,594

 

34,418

Other receivables 

 

7,551

 

6,346

Total current assets

 

67,679

 

67,449

         

Non-current assets

       

Other receivables 

 

6,955

 

5,987

Deferred tax assets

 

3,029

 

3,117

Investment in associates

 

450

 

-

Other financial assets

 

942

 

1,284

Property and equipment

 

15,399

 

14,723

Intangible assets

 

5,548

 

6,141

Goodwill

 

13,172

 

13,046

Total non-current assets

 

45,495

 

44,298

TOTAL ASSETS

 

113,174

 

111,747

         

LIABILITIES

       

Current liabilities

       

Trade payables 

 

4,846

 

8,016

Payroll and social security taxes payable

 

18,608

 

17,823

Borrowings

 

10,152

 

1,048

Other financial liabilities

 

2,961

 

6,023

Tax liabilities

 

3,477

 

5,190

Other liabilities 

 

128

 

24

Total current liabilities

 

40,172

 

38,124

         

Non-current liabilities

       

Borrowings

 

788

 

10,747

Other financial liabilities

 

2,297

 

2,740

Other liabilities 

 

111

 

-

Provisions for contingencies

 

365

 

271

Total non-current liabilities

 

3,561

 

13,758

TOTAL LIABILITIES

 

43,733

 

51,882

         

Capital and reserves

       

Issued and paid-in capital

 

34,794

 

34,794

Additional paid-in capital

 

12,515

 

12,468

Foreign currency translation reserve

 

(74)

 

(278)

Retained earnings

 

21,662

 

12,389

Total equity attributable to owners of the Company

 

68,897

 

59,373

Non-controlling interests

 

544

 

492

Total equity

 

69,441

 

59,865

TOTAL EQUITY AND LIABILITIES

 

113,174

 

111,747

 

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

   

Six months ended June 30,

 

Three months ended June 30,

   

2014

 

2013

 

2014

 

2013

                 

Reconciliation of adjusted gross profit

               

Gross Profit

 

$     36,792

 

$     26,135

 

$     20,026

 

$     13,860

Adjustments

               

 Depreciation and amortization expense

 

1,704

 

1,259

 

849

 

578

 Share-based compensation expense

 

34

 

41

 

30

 

8

Adjusted gross profit

 

$     38,530

 

$     27,435

 

$     20,905

 

$     14,446

Adjusted gross profit margin

 

41.6%

 

38.3%

 

42.3%

 

38.7%

                 

Reconciliation of adjusted gross profit margin

               

Gross Profit margin

 

39.8%

 

36.4%

 

40.5%

 

37.1%

Adjustments

               

 Depreciation and amortization expense as % of revenues

 

1.8%

 

1.8%

 

1.7%

 

1.5%

 Share-based compensation expense as % of revenues

 

0.0%

 

0.1%

 

0.1%

 

0.0%

Adjusted gross profit margin

 

41.6%

 

38.3%

 

42.3%

 

38.7%

                 

Reconciliation of selling, general and administrative expenses

             

Selling, general and administrative expenses

 

$    (26,333)

 

$    (24,834)

 

$    (13,392)

 

$    (13,267)

Adjustments

               

 Depreciation and amortization expense

 

1,934

 

2,053

 

996

 

1,105

 Share-based compensation expense

 

13

 

61

 

9

 

12

Adjusted selling, general and administrative expenses

 

$    (24,386)

 

$    (22,720)

 

$    (12,387)

 

$    (12,150)

Adjusted selling, general and administrative expenses as % of revenues

(26.4)%

 

(31.7)%

 

(25.1)%

 

(32.5)%

                 

Reconciliation of Adjusted Profit from Operations

               

Profit from Operations

 

$       9,678

 

$       1,301

 

$       6,269

 

$         593

Adjustments

               

 Impairment of Tax Credits

 

781

 

-

 

365

 

-

 Share-based compensation expense

 

47

 

102

 

39

 

20

Adjusted Profit from Operations

 

$     10,506

 

$       1,403

 

$       6,673

 

$         613

Adjusted Profit from Operations Margin

 

11.4%

 

2.0%

 

13.5%

 

1.6%

                 

Reconciliation of profit for the period

               

Profit for the period

 

$       9,325

 

$       7,994

 

$       5,901

 

$       5,605

Adjustments

               

 Share-based compensation expense

 

47

 

102

 

39

 

20

Adjusted profit for the period

 

$       9,372

 

$       8,096

 

$       5,940

 

$       5,625

Adjusted profit for the period as % of revenues

 

10.1%

 

11.3%

 

12.0%

 

15.1%

 

 

 

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

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

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SOURCE Globant