GlobantInvestors

SAN FRANCISCO, Nov. 14, 2016 /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, 2016.

Third quarter 2016 highlights

• Revenue increased to a record $82.4 million, representing 22.7% year-over-year growth.
• Non-IFRS Adjusted Gross Profit was $34.2 million (41.5% Non-IFRS Adjusted Gross Profit Margin), an increase of $8.0 million compared to $26.2 million (and an increase of 250 basis points compared to 39.0% Non-IFRS Adjusted Gross Profit Margin) in 2015.
• Non-IFRS Adjusted Net Income was $10.5 million (12.8% Non-IFRS Adjusted Net Income Margin), an increase of $1.4 million, or 15.4%, compared to a profit of $9.1 million for the third quarter of 2015.
• Non-IFRS Adjusted Diluted EPS was $0.30 per share (based on an average of 35.5 million average diluted shares during the third quarter), an increase of $0.04 compared to Non-IFRS Adjusted Diluted EPS of $0.26 for the third quarter of 2015.

Nine months ended September 30, 2016 highlights

• Revenue for the period increased to $235.6 million, representing 29.3% year-over-year growth.
• Non-IFRS Adjusted Gross Profit was $101.3 million (43.0% Non-IFRS Adjusted Gross Profit Margin), an increase of $30.7 million compared to $70.6 million (and an increase of 420 basis points compared to 38.8% Non-IFRS Adjusted Gross Profit Margin) in 2015.
• Non-IFRS Adjusted Net Income was $29.1 million (12.4% Non-IFRS Adjusted Net Income Margin), an increase of $3.8 million, or 15.0%, compared to a profit of $25.3 million for the first nine months of 2015.
• Non-IFRS Adjusted Diluted EPS was $0.82 per share (based on an average of 35.3 million diluted shares during the first nine months of the 2016), an increase of $0.10 compared to Non-IFRS Adjusted Diluted EPS of $0.72 for the first nine months of 2015.

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

"Third quarter 2016 was another robust quarter for Globant. Our revenues reached a new quarterly record of $82.4 million, with an implied 22.7% year-over-year growth," said Martín Migoya, Globant's CEO and co-founder. "Traditional companies keep on investing heavily in digital transformation projects as they face increased competition from digitally native companies. To address this trend, we continuously work to evolve our Digital Journeys process, based on two pillars: Stay Relevant and Build to Discover. With this approach we are able to create the most innovative experiences and products by simultaneously learning and adapting from consumer and market behaviour. We believe that our positioning as a pure play in digital services gives us the required skillset to successfully partner with organizations facing digital transformation challenges."

"On top of that, to reinforce our positioning as one of the leaders in the digital services space, we are glad to announce the acquisition of L4, a leading digital services company that creates innovative and meaningful experiences to engage people across every screen. L4 is a US-based organization with headquarters in Seattle, focused on ideating, designing and developing robust digital products and complex software, with a strong focus on innovation and quality assurance. The company has a team of 65 professionals, including some of the best mobile and media minds in the industry. Today, they work for a wide list of recognized brands, such as Sesame Workshop, Chicago Public Media and Sony Pictures Television. This acquisition enables us to expand our US footprint and to bring experienced professionals to the team. We found in L4 a group of people that share our same passion for building the best experiences for our customers, so we are really excited to have them on board", Migoya added. 

"I am delighted with our financial performance for this quarter. Both our revenue growth and our gross, operating and net income margins continue to be very healthy. Growth is evenly spread among our customer base, with top 10 accounts increasing over 25% year over year, and not top 10 accounts growing above 20%," explained Alejandro Scannapieco, Globant's CFO.

Globant completed the quarter with 5,421 Globers, 4,983 of whom were IT professionals. The geographic revenue breakdown for the third quarter was as follows: 81.4% from North America (top country: US), 9.4% from Latin America and others (top country: Chile) and 9.2% from Europe (top country: UK). 89.7% of Globant's revenue for the third quarter was denominated in US dollars, and the remaining 10.3% was denominated in other currencies.

During the 12 months ended September 30, 2016, Globant served 354 customers, 61 of which accounted for more than $1 million of Globant's revenues.  Globant's top customer, top 5 customers and top 10 customers represented 10.4%, 33.9% and 46.8% of third quarter revenues, respectively.

Cash and cash equivalents and investments as of September 30, 2016 decreased to $54.5 million from $62.4 million as of December 31, 2015, while borrowings amounted to $0.3 million. Current assets as of September 30, 2016 amounted to $130.2 million, accounting for 49.6% of total assets. Finally, as of September 30, 2016, 34.5 million common shares were issued and outstanding.

2016 Fourth Quarter and Full Year Outlook

Based on current market conditions, Globant is providing the following estimates for the fourth quarter and for the full year 2016:

• Fourth quarter revenue is estimated to be in the range of $84.5-$86.5 million.
• Fourth quarter Non-IFRS diluted EPS is estimated to be in the range of $0.30-$0.33 (assuming an average of 35.7 million diluted shares outstanding during the fourth quarter).
• Fiscal year 2016 revenue is estimated to be between $320.0-$322.0 million
• Fiscal year 2016 Non-IFRS diluted EPS is estimated to be in the range of $1.12-$1.15 (assuming an average of 35.4 million average diluted shares outstanding during 2016).

Conference Call and Webcast

Martín Migoya and Alejandro Scannapieco will discuss the three and nine-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 number and on our investor relations website after the call.

About Globant

Globant (NYSE: GLOB) is a digitally native technology services company that creates digital journeys for its customers, which impact millions of consumers. Globant is the place where engineering, design, and innovation meet scale. Globant has more than 5,420 professionals in 12 countries working for companies like Google, LinkedIn, JWT, EA and Coca Cola, among others. Globant was named a Worldwide Leader of Digital Strategy Consulting Services by IDC MarketScape Report (2016), and its client work has been featured as business case studies at Harvard University, Massachusetts Institute of Technology and Stanford University.  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") and as adopted by the European Union. 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 numbers in this press release have 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, acquisition related expenses and impairments of tax credits. 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, with its unaudited interim consolidated statement of financial position as of September 30, 2016 and December 31, 2015 and its unaudited interim consolidated statement of profit or loss and other comprehensive income for the nine-month and three-month periods ended September 30, 2016 and 2015, prepared in accordance with IAS.

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: 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 and the level of attrition of our IT professionals; the pricing structures we use for our client contracts; the 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 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 our most recent 20-F 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.

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).

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

Media Contact:
Ivette Almeida, Paragon PR
Geena De Rose, Paragon PR
globant@paragonpr.com
(877) 215-5230

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SOURCE Globant