Globant Reports 2015 Third Quarter Results
Solid Revenue Growth, Robust EPS

SAN FRANCISCO, Nov. 5, 2015 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally-native technology services company focused on creating digital journeys , today announced results for the three and nine months ended September 30, 2015.

Globant Logo

Third Quarter 2015 Highlights

  • Revenue for the third quarter amounted to $67.1 million, representing 29.2% year-over-year growth. Revenue for the first nine months of the year was $182.2 million, representing 26.1% year-over-year growth
  • Non-IFRS Adjusted Gross Profit for the third quarter was $26.2 million (39.0% Non-IFRS Adjusted Gross Profit Margin), an increase of 30bps compared to the second quarter of 2015 and a decrease of 200bps compared to the third quarter of 2014.
  • Non-IFRS Adjusted Net Income for the third quarter was $9.1 million (13.6% Non-IFRS Adjusted Net Income Margin), an increase of $0.8 million, or 9.4%, compared to a profit of $8.4 million for the third quarter of 2014.
  • Non-IFRS Adjusted Diluted EPS for the third quarter was $0.26 per share (based on 35.1 million average diluted shares for the quarter), an increase of $0.01 compared to Non-IFRS Adjusted Diluted Profit per Share of $0.25 for the third quarter of 2014.

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

"I am thrilled to announce another solid quarter in terms of business performance and financial results, with robust growth in both existing and new accounts. Nowadays, users are demanding businesses to offer personalized experiences that generate value for them. As a result, companies are compelled to create what we call Digital Journeys, a sequence of smart, relevant and context aware interactions, integrated with the core business to provide a seamless journey across the different touch points with users. Globant has mastered the ability of building these digital journeys through our Studios, our Agile Pods Methodology and the brand new Services over Platforms offering." explained Martin Migoya, Globant's CEO and co-founder. "Under our Services over Platforms umbrella, we offer a wide variety of products that can help build Digital Journeys in an agile and innovative way. As opposed to the traditional Software as a Service ("SaaS") approach in which the products are static, we know that each company has specific characteristic, so on top of our products we offer services to adapt, expand and make them fit their particular goals. A clear example of a Services over Platforms product is our Digital Journey Mobile Platform, which combines social media, gaming strategies, mobile technologies and Big Data to augment the end users' experiences before, during & after a touch point with the consumer."

Martin Migoya added: "Market demand remains solid. Our revenue increased 29.2% during this quarter compared to the third quarter of 2014, with revenues from our top customer almost doubling compared to a year ago. For the first time in Globant's history, we have one customer accounting for more than $20 million in annual revenues, a good reflection of our ability to cultivate our key accounts"

"Q3 has been another strong quarter for us. Once more, we delivered robust top line growth and solid EPS, as we have done consistently since our IPO last year. Business momentum combined with a good level of net additions position us on the right path to achieve our full year targets." explained Alejandro Scannapieco, Globant's CFO.

Globant completed the quarter with 4,724 Globers, 4,327 of whom were IT professionals.  The geographic revenue breakdown for the third quarter was as follows: 84.1% from North America (top country: U.S.), 11.5% from Latin America and others (top country: Chile) and 4.4% from Europe (top country: U.K.). 93.3% of Globant's revenue for the third quarter was denominated in U.S. dollars and the remaining 6.7% was in other currencies.

During the 12 months preceding September 30, 2015, Globant served 343 customers; 47 of which accounted for more than $1 million of Globant's revenues.  Globant's top customer, top 5 customers and top 10 customers represented 13.4%, 33.2% and 45.9% of the third quarter revenues, respectively.

Cash and investments as of September 30, 2015 amounted to $73.6 million from $62.2 million as of December 31, 2014 while borrowings decreased to $0.8  million compared to $1.3  million as of December 31, 2014. Current assets amounted to $139.0 million, accounting for 66.6% of total assets. As of September 30, 2015 there were $34.1 million common shares issued and outstanding.

Fourth Quarter and 2015 Full Year Outlook

Based on current market conditions, Globant is providing the following estimates for the fourth quarter and for the full year 2015:

  • Fourth quarter revenue is estimated to be between $68 - $70 million.
  • Fourth quarter Non-IFRS diluted EPS is estimated to be in the range of $0.21 - $0.25 (assuming 35.3 million average diluted shares outstanding for the quarter).
  • Fiscal year 2015 revenue is estimated to be between $250 - $252 million
  • Fiscal year 2015 Non-IFRS diluted EPS is estimated to be in the range of $0.93 - $0.97 (assuming 35.0 million average diluted shares outstanding for the full year).

Conference Call and Webcast

Martin 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 4,500 professionals in 9 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. 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)




Nine months ended


Three months ended






September 30, 2015


September 30, 2014


September 30, 2015


September 30, 2014















Revenues 



182,233


144,488


67,117


51,959



Cost of revenues 



(115,481)


(87,333)


(42,474)


(31,596)



Gross profit



66,752


57,155


24,643


20,363















Selling, general and administrative expenses 



(52,123)


(41,436)


(18,705)


(15,103)



Impairment of tax credits, net



1,820


(821)


-


(40)



Profit from operations



16,449


14,898


5,938


5,220















Gain on transactions with bonds 



13,331


10,023


4,980


5,244



Finance income



10,308


8,077


3,808


2,992



Finance expense



(8,518)


(9,725)


(3,415)


(3,263)



Finance expense, net



1,790


(1,648)


393


(271)















Other income and expenses, net



(11)


(50)


(8)


(23)



Profit before income tax



31,559


23,223


11,303


10,170















Income tax



(8,251)


(6,108)


(3,073)


(2,380)



Net income for the period



23,308


17,115


8,230


7,790















Other comprehensive loss net of income tax












Items that may be reclassified subsequently to profit and loss:












- Exchange differences on translating foreign operations



(1,296)


(172)


(867)


(376)



Total comprehensive income for the period



22,012


16,943


7,363


7,414















Net income attributable to:












Owners of the Company



23,308


17,058


8,230


7,785



Non-controlling interest



-


57


-


5



Net income for the period



23,308


17,115


8,230


7,790















Total comprehensive income for the period attributable to:












Owners of the Company



22,012


16,886


7,363


7,409



Non-controlling interest



-


57


-


5



Total comprehensive income for the period



22,012


16,943


7,363


7,414



























Earnings per share 












Basic



0.69


0.57


0.24


0.24



Diluted



0.67


0.55


0.23


0.23



Weighted average of outstanding shares (in thousands)












Basic



33,887


30,099


34,080


32,294



Diluted



34,950


31,177


35,143


33,372



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
















Sept 30, 2015


Dec 31, 2014



ASSETS






Current assets






Cash and cash equivalents 



29,715


34,195

Restricted cash



107



Investments



43,761


27,984

Trade receivables



44,418


40,056

Other receivables 



21,009


14,253

Total current assets



139,010


116,488







Non-current assets






Other receivables 



2,375


916

Deferred tax assets



5,902


4,881

Other financial assets



1,800


-

Investment in associates



750


750

Property and equipment



22,503


19,213

Intangible assets



6,518


6,105

Goodwill



29,796


12,772

Total non-current assets



69,644


44,637

TOTAL ASSETS



208,654


161,125







LIABILITIES






Current liabilities






Trade payables 



5,080


5,673

Payroll and social security taxes payable



26,157


20,967

Borrowings



368


513

Other financial liabilities



4,885


1,045

Tax liabilities



5,930


3,446

Other liabilities 



96


173

Total current liabilities



42,516


31,817







Non-current liabilities






Borrowings



409


772

Other financial liabilities



8,516


263

Provisions for contingencies



979


794

Total non-current liabilities



9,904


1,829

TOTAL LIABILITIES



52,420


33,646







Capital and reserves






Issued and paid-in capital



40,967


40,324

Additional paid-in capital



56,376


50,276

Foreign currency translation reserve



(2,007)


(711)

Retained earnings



60,898


37,590

Total equity



156,234


127,479

TOTAL EQUITY AND LIABILITIES



208,654


161,125

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




Nine months ended


Three months ended




September 30, 2015


September 30, 2014


September 30, 2015


September 30, 2014











Reconciliation of adjusted gross profit










Gross Profit



66,752


57,155


24,643


20,363

Adjustments










D&A



3,347


2,651


1,073


949

Share Based Compensation



517


35


445


1

Adjusted gross profit



70,616


59,841


26,161


21,313

Adjusted gross profit margin



38.8%


41.4%


39.0%


41.0%











Reconciliation of selling, general and
administrative expenses







Selling, general and administrative expenses


-52,123


-41,436


-18,705


-15,103

Adjustments










M&A Expenses



337







D&A



3,769


3,048


1,297


1,114

Share Based Compensation



1,146


582


471


569

Adjusted selling, general and administrative expenses

-46,871


-37,806


-16,937


-13,420

Adjusted selling, general and administrative expenses as % of revenues

-25.7%


-26.2%


-25.2%


-25.8%











Reconciliation of Adjusted Profit from Operations









Operating Profit



16,449


14,898


5,938


5,220

Adjustments










M&A Expenses



337







Impairment of tax credits



-1,820


821


-


40

Share Based Compensation



1,663


617


916


570

Adjusted Profit from Operations



16,629


16,336


6,854


5,830

Adjusted Operating Profit margin



9.1%


11.3%


10.2%


11.2%











Reconciliation of Net income (loss) for the period









Net income for the period



23,308


17,115


8,230


7,790

Adjustments










M&A Expenses



337







Share Based Compensation



1,663


617


916


570

Adjusted Net income 



25,308


17,732


9,146


8,360

Adjusted Net income margin



13.9%


12.3%


13.6%


16.1%











Calculation of Adjusted Diluted EPS










Adjusted Net income 



25,308


17,732


9,146


8,360

Diluted shares



34,950


31,177


35,143


33,372

Adjusted Diluted EPS



0.72


0.57


0.26


0.25

Globant S.A.
Schedule of Supplemental Information

Metric

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015









Total Employees

3,332

3,371

3,567

3,775

4,040

4,512

4,724

IT Professionals

3,000

3,050

3,217

3,424

3,694

4,121

4,327









North America Revenue %

79.9

81.1

82.3

83.1

84.1

85.2

84.1

Latin America and Others Revenue % 

13.0

13.0

11.9

12.0

10.1

9.7

11.5

Europe Revenue %

7.1

6.0

5.8

4.9

5.8

5.1

4.4









USD Revenue %

88.9

91.8

93.5

94.6

95.0

94.6

93.3

GBP Revenue %

1.3

0.8

0.6

0.7

1.0

0.8

1.4

Other Currencies Revenue %

9.8

7.4

5.9

4.8

4.0

4.6

5.3









Top Customer %

7.1

10.1

8.8

8.8

10.2

12.3

13.4

Top 5 Customers %

25.4

29.0

29.2

28.9

30.8

32.8

33.2

Top 10 Customers %

39.8

44.8

46.2

44.8

47.8

47.7

45.9









LTM Customers Served

266

278

299

296

292

344

343

LTM Customers with >$1M in Revenue

42

42

45

46

43

43

47

 

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