Globant Reports Record Annual Revenues and EPS for 2014
Globant Presents 2014 Fourth Quarter and Full Year Results

SAN FRANCISCO, Feb. 11, 2015 /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 months and the full year ended December 31, 2014.

Globant Logo

Full Year 2014 Highlights

  • Revenue for the full year increased to $199.6 million, the company's highest annual revenue to date, representing 26.1% year-over-year growth.
  • Non-IFRS Adjusted Gross Profit for the full year was $81.8 million (41.0% Non-IFRS Adjusted Gross Profit Margin), an increase of $19.7 million compared to $62.1 million (and an increase of 170 basis points compared to 39.2% Non-IFRS Adjusted Gross Profit Margin) in 2013.
  • Non-IFRS Adjusted Net Income for the full year was $25.9 million (13.0% Non-IFRS Adjusted Net Income Margin), an increase of $11.3 million compared to $14.6 million (9.2% Non-IFRS Adjusted Net Income Margin) in 2013, representing 77.7% year-over-year growth.
  • Non-IFRS Adjusted Diluted EPS for the full year was $0.81 per share (based on 31.9 million average diluted shares for the year), an increase of $0.30 compared to $0.51 per share in 2013.

Fourth Quarter 2014 Highlights

  • Revenue for the fourth quarter increased to $55.1 million, another quarterly record for the company, representing 19.2% year-over-year growth.
  • Non-IFRS Adjusted Gross Profit for the fourth quarter was $21.9 million (39.7% Non-IFRS Adjusted Gross Profit Margin), an increase of $3.8 million compared to $18.1 million (and an increase of 50 basis points compared to 39.2% Non-IFRS Adjusted Gross Profit) for the fourth quarter of 2013.
  • Non-IFRS Adjusted Net Income for the fourth quarter was $8.1 million (14.8% Non-IFRS Adjusted Net Income Margin), an increase of $11.7 million compared to a loss of $3.6 million for the fourth quarter of 2013.
  • Non-IFRS Adjusted Diluted EPS for the fourth quarter was $0.24 per share (based on 34.3 million average diluted shares for the quarter), an increase of $0.36 compared to Non-IFRS Adjusted Diluted Loss per Share of $0.12 for the fourth quarter of 2013.

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

"We are thrilled to end 2014 with record annual and quarterly revenues, which show how much value we are delivering for our customers. During the last months of 2014, we continued reinforcing our position as a leader in the creation of innovative software products, bringing in new logos to our portfolio and working on disruptive projects such as the development together with Google of Project ARA's marketplace," described Martin Migoya, Globant CEO and co-founder. "We continued our geographic expansion, opening more development centers in Mexico City, Mexico, Lima, Peru and Mar del Plata, Argentina. These new centers have allowed us to add more talent into our team. Our Studios model continues to blossom and deliver the best solutions for consumer-oriented initiatives involving emerging technologies."     

"We are also very pleased with our robust financial performance. During 2014, we delivered record revenues and earnings and significantly improved our gross and operating margins," explained Alejandro Scannapieco, Globant's CFO.

Globant finished the quarter with 3,775 Globers, of which 3,424 were IT professionals.  Geographic revenue breakdown for the full year was as follows: 81.7% from North America (top country: U.S.), 12.4% from Latin America and others (top country: Chile) and 5.9% from Europe (top country: U.K.). 92.4% of Globant's revenue for the full year was denominated in U.S. dollars, with 0.8% in British pounds and 6.8% in other currencies.

Globant ended 2014 with 296 customers served during the last 12 months. Of these, 46 were customers with revenues of more than $1 million during that period.  Globant's top customer represented 8.7% of annual revenues, the top 5 customers represented 27.8% of annual revenues and the top 10 customers represented 43.9% of annual revenues.

Cash and investments as of December 31, 2014 increased to $62.2 million, and borrowings decreased to $1.3 million compared to $11.8 million as of December 31, 2013.  Total shares outstanding as of December 31, 2014 were 33,603,900 common shares.

First Quarter and 2015 Full Year Outlook

The Company is providing the following guidance:

  • First quarter revenue is estimated to be between $51-$53 million,
  • First quarter Non-IFRS diluted EPS is estimated to be in the range of $0.14 - $0.18 (assuming 34.5 million average diluted shares outstanding for the quarter).
  • Fiscal year 2015 revenue is estimated to be between $237 - $245 million.
  • Fiscal year 2015 Non-IFRS diluted EPS is estimated to be in the range of $0.85 - $0.93 (assuming 34.8 million average diluted shares outstanding for the full year).

Conference Call and Webcast

Martin Migoya and Alejandro Scannapieco will discuss the three-month and full year 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 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 12 years, Globant has grown into a company with more than 3750 professionals working for customers like Google, Linkedin, JWT, EA and Coca-Cola, among others, has become the first software company from Latin America to do an IPO in the US, 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 as case study 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.
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

     

Dec 31, 2014

 

Dec 31, 2013

 

Dec 31, 2014

 

Dec 31, 2013

                   

Revenues 

   

199,605

 

158,324

 

55,117

 

46,235

Cost of revenues 

   

(121,693)

 

(99,603)

 

(34,360)

 

(29,330)

Gross profit

   

77,912

 

58,721

 

20,757

 

16,905

                   

Selling, general and administrative expenses 

   

(57,288)

 

(54,841)

 

(15,852)

 

(16,103)

Impairment of tax credits, net

   

1,505

 

(9,579)

 

2,326

 

(9,579)

Profit (Loss) from operations

   

22,129

 

(5,699)

 

7,231

 

(8,777)

                   

Gain on transactions with bonds 

   

12,629

 

29,577

 

2,606

 

8,758

Finance income

   

10,269

 

4,435

 

2,192

 

4,178

Finance expense

   

(11,213)

 

(10,040)

 

(1,488)

 

(6,009)

Finance expense, net

   

(944)

 

(5,605)

 

704

 

(1,831)

                   

Other income and expenses, net

   

380

 

1,505

 

430

 

(198)

Profit (Loss) before income tax

   

34,194

 

19,778

 

10,971

 

(2,048)

                   

Income tax

   

(8,931)

 

(6,009)

 

(2,823)

 

(1,794)

Net income (Loss) for the year / period

   

25,263

 

13,769

 

8,148

 

(3,842)

                   

Other comprehensive loss net of income tax

                 

Items that may be reclassified subsequently to profit and loss:

                 

- Exchange differences on translating foreign operations

   

(433)

 

(269)

 

(261)

 

7

Total comprehensive income (loss) for the year / period

   

24,830

 

13,500

 

7,887

 

(3,835)

                   

Net income (Loss) attributable to:

                 

Owners of the Company

   

25,201

 

13,900

 

8,143

 

(3,711)

Non-controlling interest

   

62

 

(131)

 

5

 

(131)

Net income (Loss) for the year / period

   

25,263

 

13,769

 

8,148

 

(3,842)

                   

Total comprehensive income (loss) for the year / period attributable to:

                 

Owners of the Company

   

24,768

 

13,631

 

7,882

 

(3,704)

Non-controlling interest

   

62

 

(131)

 

5

 

(131)

Total comprehensive income (loss) for the year / period

   

24,830

 

13,500

 

7,887

 

(3,835)

                   
                   

Earnings per share 

                 

Basic

   

0.81

 

0.50

 

0.24

 

-0.13

Diluted

   

0.79

 

0.48

 

0.24

 

-0.13

Weighted average of outstanding shares (in thousands)

                 

Basic

   

30,926

 

27,891

 

33,374

 

28,245

Diluted

   

31,867

 

28,884

 

34,315

 

29,139

 

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

           
     

Dec 31, 2014

 

Dec 31, 2013

   

ASSETS

         

Current assets

         

Cash and cash equivalents 

   

34,195

 

17,051

Investments

   

27,984

 

9,634

Trade receivables

   

40,056

 

34,418

Other receivables 

   

14,228

 

6,346

Total current assets

   

116,463

 

67,449

           

Non-current assets

         

Other receivables 

   

916

 

5,987

Deferred tax assets

   

4,881

 

3,117

Investment in associates

   

774

 

-

Other financial assets

   

-

 

1,284

Property and equipment

   

19,213

 

14,723

Intangible assets

   

6,105

 

6,141

Goodwill

   

12,772

 

13,046

Total non-current assets

   

44,661

 

44,298

TOTAL ASSETS

   

161,124

 

111,747

           

LIABILITIES

         

Current liabilities

         

Trade payables 

   

5,673

 

8,016

Payroll and social security taxes payable

   

20,967

 

17,823

Borrowings

   

513

 

1,048

Other financial liabilities

   

1,045

 

6,023

Tax liabilities

   

3,445

 

5,190

Other liabilities 

   

173

 

24

Total current liabilities

   

31,816

 

38,124

           

Non-current liabilities

         

Borrowings

   

772

 

10,747

Other financial liabilities

   

263

 

2,740

Provisions for contingencies

   

794

 

271

Total non-current liabilities

   

1,829

 

13,758

TOTAL LIABILITIES

   

33,645

 

51,882

           

Capital and reserves

         

Issued and paid-in capital

   

40,324

 

34,794

Additional paid-in capital

   

50,276

 

12,468

Foreign currency translation reserve

   

(711)

 

(278)

Retained earnings

   

37,590

 

12,389

Total equity attributable to owners of the Company

   

127,479

 

59,373

Non-controlling interests

   

-

 

492

Total equity

   

127,479

 

59,865

TOTAL EQUITY AND LIABILITIES

   

161,124

 

111,747

           

 

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

                   
     

Year ended

 

Three months ended

     

Dec 31, 2014

 

Dec 31, 2013

 

Dec 31, 2014

 

Dec 31, 2013

                   

Reconciliation of adjusted gross profit

                 

Gross Profit

   

77,912

 

58,721

 

20,757

 

16,905

Adjustments

                 

D&A

   

3,813

 

3,215

 

1,162

 

1,093

Share Based Compensation

   

35

 

190

 

-

 

117

Adjusted gross profit

   

81,760

 

62,126

 

21,919

 

18,115

Adjusted gross profit margin

   

41.0%

 

39.2%

 

39.8%

 

39.2%

                   

Reconciliation of selling, general and administrative expenses

               

Selling, general and administrative expenses

   

-57,288

 

-54,841

 

-15,852

 

-16,103

Adjustments

                 

D&A

   

4,221

 

3,941

 

1,173

 

915

Share Based Compensation

   

582

 

603

 

-

 

152

Adjusted selling, general and administrative expenses

   

-52,485

 

-50,297

 

-14,679

 

-15,036

Adjusted selling, general and administrative expenses as % of revenues

-26.3%

 

-31.8%

 

-26.6%

 

-32.5%

                   

Reconciliation of Adjusted Profit from Operations

                 

Operating Profit

   

22,129

 

-5,699

 

7,231

 

-8,777

Adjustments

                 

Impairment of tax credits

   

-1,505

 

9,579

 

-2,326

 

9,579

Share Based Compensation

   

617

 

793

 

-

 

269

Adjusted Profit from Operations

   

21,241

 

4,673

 

4,905

 

1,071

Adjusted Operating Profit margin

   

10.6%

 

3.0%

 

8.9%

 

2.3%

                   

Reconciliation of Net income (loss) for the year / period

                 

Net income (loss) for the year / period

   

25,263

 

13,769

 

8,148

 

-3,842

Adjustments

                 

Share Based Compensation

   

617

 

793

 

-

 

269

Adjusted Net income (loss)

   

25,880

 

14,562

 

8,148

 

-3,573

Adjusted Net income (loss) margin

   

13.0%

 

9.2%

 

14.8%

 

-7.7%

 

Globant S.A.
Schedule of Supplemental Information

         

Metric

Q1 2014

Q2 2014

Q3 2014

Q4 2014

         

Total Employees

3,332

3,371

3,567

3,775

IT Professionals

3,000

3,050

3,217

3,424

         

North America Revenue %

79.9

81.1

82.3

83.1

Latin America Revenue %

13.0

13.0

11.9

12.0

Europe Revenue %

7.1

6.0

5.8

4.9

         

USD Revenue %

88.9

91.8

93.5

94.6

GBP Revenue %

1.3

0.8

0.6

0.7

Other Currencies Revenue %

9.8

7.4

5.9

4.8

         

Top Customer %

7.1

10.1

8.8

8.8

Top 5 Customers %

25.4

29.0

29.2

28.9

Top 10 Customers %

39.8

44.8

46.2

44.8

         

LTM Customers Served

266

278

299

296

LTM Customers with >$1 million in Revenue

42

42

45

46

Investor Relations Contact:
Juan Urthiague, Globant
investors@globant.com 
+1-877-215-5230

Media Contact:
Wanda Weigert, Globant
press@globant.com 
+1-877-215-5230

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SOURCE Globant