Globant Reports 2021 Third Quarter Financial Results
Strong Performance On All Fronts
  • Third quarter revenues of $341.8 million, up 65.0% year-over-year
  • IFRS Diluted EPS of $0.60 for the third quarter
  • Non-IFRS Diluted EPS of $0.98 for the third quarter

LUXEMBOURG, Nov. 18, 2021 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three and nine months ended September 30, 2021.

Please see highlights below, including certain Non-IFRS measures. Note that reconciliations between Non-IFRS financial measures and IFRS operating results are disclosed at the end of this press release.

Third Quarter 2021 Financial Highlights

  • Revenues rose to $341.8 million, representing 65.0% year-over-year growth.
  • IFRS Gross Profit Margin was 38.5% compared to 37.1% in the third quarter of 2020.
  • Non-IFRS Adjusted Gross Profit Margin was 39.8% compared to 39.0% in the third quarter of 2020.
  • IFRS Profit from Operations Margin was 11.6% compared to 11.2% in the third quarter of 2020.
  • Non-IFRS Adjusted Profit from Operations Margin was 16.5% compared to 15.3% in the third quarter of 2020.
  • IFRS Diluted EPS was $0.60 compared to $0.30 in the third quarter of 2020.
  • Non-IFRS Adjusted Diluted EPS was $0.98 compared to $0.56 in the third quarter of 2020.

Nine months ended September 30, 2021 Financial Highlights

  • Revenues rose to $917.3 million, representing 57.7% year-over-year growth.
  • IFRS Gross Profit Margin was 38.2% compared to 37.0% in the first nine months of 2020.
  • Non-IFRS Adjusted Gross Profit Margin was 39.6% compared to 38.9% in the first nine months of 2020.
  • IFRS Profit from Operations Margin was 11.0% compared to 9.7% in the first nine months of 2020.
  • Non-IFRS Adjusted Profit from Operations Margin was 16.4% compared to 14.8% in the first nine months of 2020.
  • IFRS Diluted EPS was $1.60 compared to $0.90 in the first nine months of 2020.
  • Non-IFRS Adjusted Diluted EPS was $2.69 compared to $1.60 in the first nine months of 2020.

Other Metrics as of and for the quarter ended September 30, 2021

  • Cash and cash equivalents and Short-term investments were $482.6 million as of September 30, 2021, an increase of $184.4 million from $298.2 million as of December 31, 2020. As of September 30, 2021, our credit facility was fully undrawn.
  • Globant completed the third quarter of 2021 with 21,849 Globers, 20,573 of whom were technology, design and innovation professionals.
  • The geographic revenue breakdown for the third quarter of 2021 was as follows: 65.2% from North America (top country: US), 22.0% from Latin America and others (top country: Argentina), 11.1% from Europe (top country: Spain) and 1.7% from Asia (top country: India).
  • In terms of currencies, 74.8% of Globant's revenues for the third quarter of 2021 were denominated in US dollars.
  • During the twelve months ended September 30, 2021, Globant served 1,018 customers and continued to increase its wallet share, having 162 accounts generating more than $1 million of annual revenues, compared to 118 for the same period one year ago.
  • Globant's top customer, top five customers and top ten customers for the third quarter of 2021 represented 11.5%, 27.6% and 39.7% of revenues, respectively.

"According to IDC, digital transformation spending is expected to reach $6.3 trillion between 2022 and 2024. As a leader in this growing space, we continue to innovate. We recently announced new digital Studios, such as the Metaverse studio, and intend to continue expanding our capabilities, including our new Reinvention Studios focused on disruptive industries. We expect to close this year with over 56% annual revenue growth, the highest in our history as a publicly-traded company." said Martín Migoya, Globant's CEO and co-founder.

"Globant reported another quarter of robust revenue growth, up 65% year over year. Margins also improved, driven by our strong pricing power and SG&A efficiencies. Hiring remained solid in Q3, with the net addition of 2,223 IT professionals. We also provided robust Q4 guidance, implying a material increase in full year 2021 revenue, margin and EPS expectations. We continue to witness a demand environment stronger than ever before, and our robust pipeline makes us believe we can deliver elevated levels of growth in the coming years," explained Juan Urthiague, Globant's CFO.

2021 Fourth Quarter Outlook

Based on current market conditions, Globant is providing the following estimates for the fourth quarter of 2021:

  • Fourth quarter 2021 Revenues are estimated to be at least $359 million, or 54.3% year over year growth.
  • Fourth quarter 2021 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 16%-17%.
  • Fourth quarter 2021 Non-IFRS Adjusted Diluted EPS is estimated to be at least $1.01 (assuming an average of 42.9 million diluted shares outstanding during the fourth quarter).

Conference Call and Webcast
Martín Migoya and Juan Urthiague will discuss the third quarter 2021 results in a video conference call today beginning at 4:30pm ET.

Video conference call access information is:
https://more.globant.com/F3Q21EarningsCall
Webcast http://investors.globant.com/

About Globant (NYSE:GLOB)
We are a digitally native company that helps organizations reinvent themselves to create a way forward and unleash their potential. We are the place where innovation, design and engineering meet scale.

We have more than 21,800 employees and we are present in 18 countries working for companies like Google, Rockwell Automation, Electronic Arts and Santander, among others.

We were named a Worldwide Leader in CX Improvement by IDC MarketScape report. We were also featured as a business case study at Harvard, MIT and Stanford. We are a member of the Cybersecurity Tech Accord.

For more information, please visit www.globant.com

Non-IFRS Financial Measures

While the financial figures included in this press release have been computed in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting" nor a financial statement as defined by International Accounting Standards 1 "Presentation of Financial Statements". The financial information in this press release has not been audited.

Globant provides non-IFRS financial measures in addition to reported IFRS results prepared in accordance with IFRS. Management believes these measures help illustrate underlying trends in the company's business and uses the non-IFRS financial 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 measures that exclude share-based compensation expense, depreciation and amortization, impairment of non-financial assets, acquisition-related charges, COVID-19 related expenses and the related effect on income taxes of the pre-tax adjustments. 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, should be considered together with its condensed interim consolidated statements of financial position as of September 30, 2021 and December 31, 2020 and its condensed interim consolidated statement of comprehensive income for the three and nine months ended September 30, 2021 and 2020, prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting.

Globant is not providing a quantitative reconciliation of forward-looking Non-IFRS Adjusted Profit from Operations Margin or Non-IFRS Adjusted Diluted EPS to the most directly comparable IFRS measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, share-based compensation expense, impairment of assets, acquisition-related charges COVID-19 related expenses and the tax effect of non-IFRS adjustments. These items are uncertain, depend on various factors, and could have a material impact on IFRS reported results for the guidance period.

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. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "will," "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 our future financial and operating performance, including our outlook and guidance, and our strategies, priorities and business plans. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could impact our actual results include: the impact and duration of the COVID-19 pandemic; our ability to maintain current resource utilization rates and productivity levels; our ability to manage attrition and attract and retain highly-skilled IT professionals; our ability to accurately price our client contracts; our ability to achieve our anticipated growth; our ability to effectively manage our rapid growth; our ability to retain our senior management team and other key employees; our ability to continue to innovate and remain at the forefront of emerging technologies and related market trends; our ability to retain our business relationships and client contracts; our ability to manage the impact of global adverse economic conditions; our ability to manage uncertainty concerning the instability in the current economic, political and social environment in Latin America; and other factors discussed under the heading "Risk Factors" in our most recent Form 20-F filed with the U.S. Securities and Exchange Commission and any other risk factors we include in subsequent reports on Form 6-K.

Because of these uncertainties, you should not make any investment decisions based on our 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 Comprehensive Income

(In thousands of U.S. dollars, except per share amounts, unaudited)








Nine months ended


Three months ended



September 30, 2021


September 30, 2020


September 30, 2021


September 30, 2020










Revenues


917,261



581,503



341,834



207,223


Cost of revenues


(566,591)



(366,089)



(210,342)



(130,253)


Gross profit


350,670



215,414



131,492



76,970











Selling, general and administrative expenses


(243,366)



(155,250)



(89,269)



(53,796)


Net impairment losses on financial assets


(6,516)



(3,525)



(2,513)



19


Other operating income


11








Profit from operations


100,799



56,639



39,710



23,193











Finance income


474



1,377



144



670


Finance expense


(8,502)



(7,439)



(2,559)



(2,333)


Other financial results, net


(2,831)



2,172



(2,176)



(1,452)


Financial results, net


(10,859)



(3,890)



(4,591)



(3,115)











Share of results of investment in associates


(233)



(375)





(293)











Other (expense)  income, net


(2,887)



(3,624)



(2,444)



(3,667)


Profit before income tax


86,820



48,750



32,675



16,118











Income tax


(19,596)



(13,222)



(7,065)



(3,779)


Net income for the period


67,224



35,528



25,610



12,339











- Exchange differences on translating foreign operations


(2,627)



(2,539)



(189)



(1,002)


- Net change in fair value on financial assets measured at FVOCI


(18)





(18)



23


- Gains and losses on cash flow hedges


673



(848)



577



(14)


Total comprehensive income for the period


65,252



32,141



25,980



11,346











Net income attributable to:









Owners of the Company


67,092



35,528



25,478



12,339


Non-controlling interest


132





132




Net income for the period


67,224



35,528



25,610



12,339











Total comprehensive income for the period attributable to:









Owners of the Company


65,120



32,141



25,848



11,346


Non-controlling interest


132





132




Total comprehensive income for the period


65,252



32,141



25,980



11,346


Earnings per share









Basic


1.65



0.93



0.61



0.31


Diluted


1.60



0.90



0.60



0.30


Weighted average of outstanding shares (in thousands)









Basic


40,688



38,113



41,625



39,629


Diluted


41,872



39,314



42,809



40,830


 


Globant S.A.

Condensed Interim Consolidated Statements of Financial Position as of September 30, 2021 and December 31, 2020

(In thousands of U.S. dollars, unaudited)








September 30, 2021


December 31, 2020

ASSETS





Current assets





Cash and cash equivalents


399,726



278,939


Investments


82,879



19,284


Trade receivables


294,356



196,020


Other assets


7,018



8,146


Other receivables


53,061



31,633


Other financial assets


2,922



1,577


Total current assets


839,962



535,599







Non-current assets





Trade Receivables




5,644


Investments


1,027



615


Other assets


5,351



6,954


Other Receivables


22,832



9,629


Deferred tax assets


53,907



41,507


Investment in associates




3,154


Other financial assets


23,166



15,147


Property and equipment


115,853



101,027


Intangible assets


96,943



86,721


Right-of-use assets


122,043



90,010


Goodwill


495,633



392,760


Total non-current assets


936,755



753,168


TOTAL ASSETS


1,776,717



1,288,767







LIABILITIES





Current liabilities





Trade payables


64,119



35,266


Payroll and social security taxes payable


150,112



111,881


Borrowings


524



907


Other financial liabilities


63,160



19,822


Lease liabilities


19,606



15,358


Tax liabilities


12,247



11,804


Income tax payable


13,517



10,511


Other liabilities


4,010



81


Total current liabilities


327,295



205,630







Non-current liabilities





Trade payables


4,637



5,240


Borrowings


2,103



25,061


Other financial liabilities


53,513



74,376


Lease liabilities


97,466



72,240


Deferred tax liabilities


8,711



13,698


Income tax payable


3,961




Provisions for contingencies


14,529



12,583


Total non-current liabilities


184,920



203,198


TOTAL LIABILITIES


512,215



408,828







Capital and reserves





Issued capital


50,003



47,861


Additional paid-in capital


855,678



541,157


Other reserves


(4,646)



(2,674)


Retained earnings


360,687



293,595


Total equity attributable to owners of the Company


1,261,722



879,939


Non-controlling interests


2,780




Total equity


1,264,502



879,939


TOTAL EQUITY AND LIABILITIES


1,776,717



1,288,767


 

Globant S.A.

Supplemental Non-IFRS Financial Information

(In thousands of U.S. dollars, unaudited)






Nine months ended


Three months ended


September 30, 2021


September 30, 2020


September 30, 2021


September 30, 2020









Reconciliation of adjusted gross profit








Gross Profit

350,670



215,414



131,492



76,970


Depreciation and amortization expense

9,482



7,329



3,599



2,690


Share-based compensation expense

2,824



3,419



994



1,091


Adjusted gross profit

362,976



226,162



136,085



80,751


Adjusted gross profit margin

39.6

%


38.9

%


39.8

%


39.0

%









Reconciliation of selling, general and administrative expenses








Selling, general and administrative expenses

(243,366)



(155,250)



(89,269)



(53,796)


Depreciation and amortization expense

35,126



15,459



13,381



5,562


Share-based compensation expense

24,412



16,003



8,621



5,518


Acquisition-related charges (a)

9,378



6,127



2,782



1,879


COVID-19-related charges (b)



(613)





(613)


Adjusted selling, general and administrative expenses

(174,450)



(118,274)



(64,485)



(41,450)


Adjusted selling, general and administrative expenses as % of revenues

(19.0)

%


(20.3)

%


(18.9)

%


(20.0)

%









Reconciliation of Adjusted Profit from Operations








Profit from Operations

100,799



56,639



39,710



23,193


Share-based compensation expense

27,236



19,422



9,615



6,609


Impairment of tax credits



(8)





(8)


Acquisition-related charges (a)

20,464



7,303



6,991



2,263


COVID-19-related charges (b)

2,228



2,751





(434)


Impairment of assets

(11)








Adjusted Profit from Operations

150,716



86,107



56,316



31,623


Adjusted Profit from Operations margin

16.4

%


14.8

%


16.5

%


15.3

%









Reconciliation of Net income for the period








Net income for the period

67,092



35,528



25,478



12,339


Share-based compensation expense

27,236



19,422



9,615



6,609


Impairment of tax credits



(8)





(8)


Acquisition-related charges (a)

26,398



11,063



10,196



5,920


COVID-19-related charges (b)

2,228



2,751





(434)


Impairment of assets

(11)








Tax effect of non-IFRS adjustments (c)

(10,336)



(5,814)



(3,408)



(1,399)


Adjusted Net income

112,607



62,942



41,881



23,027


Adjusted Net income margin

12.3

%


10.8

%


12.3

%


11.1

%









Calculation of Adjusted Diluted EPS








Adjusted Net income

112,607



62,942



41,881



23,027


Diluted shares

41,872



39,314



42,809



40,830


Adjusted Diluted EPS

2.69



1.60



0.98



0.56


 

(a)  Acquisition-related charges include, when applicable, amortization of purchased intangible assets included in depreciation and amortization expense line on our condensed interim consolidated statements of comprehensive income, external deal costs, acquisition-related retention bonuses, integration costs, changes in the fair value of contingent consideration liabilities, charges for impairment of acquired intangible assets and other acquisition-related costs. We cannot provide acquisition-related charges on a forward-looking basis without unreasonable effort as such charges may fluctuate based on the timing, size, and complexity of future acquisitions as well as other uncertainty inherent in mergers and acquisitions.

(b)  COVID-19 related charges include, when applicable, bad debt provision related to the effect of COVID-19 on our customers businesses, donations and other expenses directly attributable to the pandemic that are both incremental to charges incurred prior to the outbreak and not expected to recur once the crisis has subsided and operations return to normal and clearly separable from normal operations. Moreover, these charges also include rent concessions that we were granted due to the pandemic environment.

(c)  Non-IFRS adjusted net income and adjusted diluted EPS for Q3 of 2020 reflects the tax impact of non-IFRS adjustments. Non-IFRS adjusted net income and adjusted diluted EPS for Q3 2020, previously presented were recast to conform to the current presentation.

 

Globant S.A.

Schedule of Supplemental Information (unaudited)







Metrics

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021







Total Employees

14,340


16,251


17,267


19,428


21,849


IT Professionals

13,436


15,290


16,284


18,350


20,573








North America Revenues %

70.0


65.9


63.1


63.8


65.2


Latin America and Others Revenues %

22.4


24.3


23.6


21.6


22.0


Europe Revenues %

7.6


9.8


12.0


13.2


11.1


Asia Revenues %



1.3


1.4


1.7








USD Revenues %

84.5


85.8


77.7


76.4


74.8


Other Currencies Revenues %

15.5


14.2


22.3


23.6


25.2








Top Customer %

10.8


10.7


10.5


10.3


11.5


Top 5 Customers %

32.2


30.0


28.4


26.4


27.6


Top 10 Customers %

45.0


42.9


41.0


39.8


39.7








Customers Served (Last Twelve Months)

893


798


860


941


1,018


Customers with >$1M in Revenues (Last Twelve Months)

118


129


139


154


162








Investor Relations Contact:
Amit Singh, Globant
investors@globant.com
+1 (877) 215-5230

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

SOURCE Globant