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

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SOURCE Globant