Globant Reports 2021 Fourth Quarter and Full Year Financial Results

Strong End to the Year and Robust Outlook

  • Fourth quarter revenues of $379.8 million, up 63.3% year-over-year
  • IFRS Diluted EPS of $0.68 for the fourth quarter
  • Non-IFRS Diluted EPS of $1.07 for the fourth quarter
  • Full year 2021 revenues of $1,297.1 million, up 59.3% year-over-year
  • IFRS Diluted EPS of $2.28 for the full year
  • Non-IFRS Diluted EPS of $3.76 for the full year

NEW YORK, Feb. 17, 2022 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three months and year ended December 31, 2021.

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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.

Fourth Quarter 2021 Financial Highlights

  • Revenues rose to $379.8 million, representing 63.3% year-over-year growth.
  • IFRS Gross Profit Margin was 38.0% compared to 38.2% in the fourth quarter of 2020.
  • Non-IFRS Adjusted Gross Profit Margin was 39.4% compared to 39.6% in the fourth quarter of 2020.
  • IFRS Profit from Operations Margin was 11.5% compared to 11.7% in the fourth quarter of 2020.
  • Non-IFRS Adjusted Profit from Operations Margin was 16.7% compared to 16.3% in the fourth quarter of 2020.
  • IFRS Diluted EPS was $0.68 compared to $0.46 in the fourth quarter of 2020.
  • Non-IFRS Adjusted Diluted EPS was $1.07 compared to $0.68 in the fourth quarter of 2020.

Full year ended December 31, 2021 Financial Highlights

  • Revenues rose to $1,297.1 million, representing 59.3% year-over-year growth.
  • IFRS Gross Profit Margin was 38.2% compared to 37.4% for the full year 2020.
  • Non-IFRS Adjusted Gross Profit Margin was 39.5% compared to 39.1% for the full year 2020.
  • IFRS Profit from Operations Margin was 11.1% compared to 10.3% for the full year 2020.
  • Non-IFRS Adjusted Profit from Operations Margin was 16.5% compared to 15.2% for the full year 2020.
  • IFRS Diluted EPS was $2.28 compared to $1.37 for the full year 2020.
  • Non-IFRS Adjusted Diluted EPS was $3.76 compared to $2.28 for the full year 2020.

Other Metrics as of and for the quarter ended December 31, 2021

  • Cash and cash equivalents and Short-term investments were $460.4 million as of December 31, 2021, an increase of $162.2 million from $298.2 million as of December 31, 2020. As of December 31, 2021, our credit facility was fully undrawn.
  • Globant completed the fourth quarter of 2021 with 23,526 Globers, 22,167 of whom were technology, design and innovation professionals.
  • The geographic revenue breakdown for the fourth quarter of 2021 was as follows: 63.9% from North America (top country: US), 23.5% from Latin America and others (top country: Chile), 10.7% from Europe (top country: Spain) and 1.9% from Asia (top country: India).
  • In terms of currencies, 73.4% of Globant's revenues for the fourth quarter of 2021 were denominated in US dollars.
  • During the twelve months ended December 31, 2021, Globant served 1,138 customers and continued to increase its wallet share, having 185 accounts generating more than $1 million of annual revenues, compared to 129 for the same period one year ago.
  • Globant's top customer, top five customers and top ten customers for the fourth quarter of 2021 represented 11.0%, 26.8% and 37.6% of revenues, respectively.

"2021 was one of our most transformative years ever. We became a billion-dollar-revenue company for the first time." said Martín Migoya. "We aim to be the partner-of-choice for our clients, and to help them bridge the gap between the innovation opportunities and actionable transformation. We are executing this strategy through the pillars of growth that I laid out in 2021: our geographic expansion, our reinvention studios and our growing platforms."

"We are delighted to end 2021 with very strong fourth quarter top and bottom line beats. Our business was robust throughout the year, with 2021 revenues up 59.3% year over year, our strongest growth, by far, since we became a public company. 2021 Adjusted Diluted EPS growth was even stronger at 65.1% year over year, as our robust gross margins and SGA efficiencies boosted operating margins. We also had a great year hiring strong talent across the globe. The demand environment and our pipeline remain strong, helping us provide very strong first quarter and full year 2022 guidance, and giving us confidence that Globant can maintain industry leading growth trends in the coming years," explained Juan Urthiague, Globant's CFO.

2022 First Quarter and Full Year Outlook

Based on current market conditions, Globant is providing the following estimates for the first quarter and the full year of 2022:

  • First quarter 2022 Revenues are estimated to be at least $395 million, implying at least 46.2% year-over-year growth.
  • First quarter 2022 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 16%-17%.
  • First quarter 2022 Non-IFRS Adjusted Diluted EPS is estimated to be at least $1.16 (assuming an average of 42.9 million diluted shares outstanding during the first quarter).
  • Fiscal year 2022 Revenues are estimated to be at least $1,751 million, implying at least 35.0% year-over-year revenue growth.
  • Fiscal year 2022 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 16%-17%.
  • Fiscal year 2022 Non-IFRS Adjusted Diluted EPS is estimated to be at least $4.86 (assuming an average of 43.1 million diluted shares outstanding during 2022).

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

Video conference call access information is:
https://more.globant.com/F4Q21EarningsCall
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 23,500 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"), 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 consolidated statements of financial position as of December 31, 2021 and 2020 and its consolidated statement of comprehensive income for the three months and year ended December 31, 2021 and 2020, prepared in accordance with IFRS as issued by IASB.

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.

Consolidated Statement of Comprehensive Income

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








Year ended


Three Months Ended



December 31, 2021


December 31, 2020


December 31, 2021


December 31, 2020










Revenues


1,297,078


814,139


379,817


232,636

Cost of revenues


(802,090)


(509,812)


(235,499)


(143,723)

Gross profit


494,988


304,327


144,318


88,913










Selling, general and administrative expenses


(343,004)


(217,222)


(99,638)


(61,972)

Net impairment losses on financial assets


(7,551)


(3,080)


(1,035)


445

Other operating income and expenses, net



(83)


(11)


(83)

Profit from operations


144,433


83,942


43,634


27,303










Finance income


652


1,920


178


543

Finance expense


(12,708)


(10,430)


(4,206)


(2,991)

Other financial results, net


(3,923)


3,601


(1,092)


1,429

Financial results, net


(15,979)


(4,909)


(5,120)


(1,019)










Share of results of investment in associates


(233)


(622)



(247)










Other income and expenses, net


(3,369)


(1,887)


(482)


1,737

Profit before income tax


124,852


76,524


38,032


27,774










Income tax


(28,497)


(22,307)


(8,901)


(9,085)

Net income for the year


96,355


54,217


29,131


18,689










- Exchange differences on translating foreign operations


(3,733)


(398)


(1,106)


2,141

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


1



19


- Gains and losses on cash flow hedges


11


281


(662)


1,129

Total comprehensive income for the year


92,634


54,100


27,382


21,959










Net income attributable to:









Owners of the Company


96,065


54,217


28,973


18,689

Non-controlling interest


290



158


Net income for the year


96,355


54,217


29,131


18,689










Total comprehensive income for the year attributable to:









Owners of the Company


92,344


54,100


27,224


21,959

Non-controlling interest


290



158


Total comprehensive income for the year


92,634


54,100


27,382


21,959

Earnings per share









Basic


2.35


1.41


0.69


0.47

Diluted


2.28


1.37


0.68


0.46

Weighted average of outstanding shares (in thousands)









Basic


40,940


38,515


41,697


39,713

Diluted


42,076


39,717


42,833


40,914

 

 

Globant S.A.

Consolidated Statements of Financial Position as of December 31, 2021 and December 31, 2020

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



December 31, 2021


December 31, 2020

ASSETS





Current assets





Cash and cash equivalents


427,804


278,939

Investments


32,581


19,284

Trade receivables


300,109


196,020

Other assets


7,855


8,146

Other receivables


49,194


31,633

Other financial assets


2,057


1,577

Total current assets


819,600


535,599






Non-current assets





Trade receivables



5,644

Investments


1,027


615

Other assets


8,583


6,954

Other receivables


24,263


9,629

Deferred tax assets


58,404


41,507

Investment in associates



3,154

Other financial assets


25,233


15,147

Property and equipment


133,571


101,027

Intangible assets


102,016


86,721

Right-of-use asset


144,581


90,010

Goodwill


572,959


392,760

Total non-current assets


1,070,637


753,168

TOTAL ASSETS


1,890,237


1,288,767






LIABILITIES





Current liabilities





Trade payables


63,210


35,266

Payroll and social security taxes payable


184,464


111,881

Borrowings


10,305


907

Other financial liabilities


63,059


19,822

Lease liabilities


25,917


15,358

Tax liabilities


18,071


11,804

Income tax payable


20,318


10,511

Other liabilities


955


81

Total current liabilities


386,299


205,630






Non-current liabilities





Trade payables


6,387


5,240

Borrowings


1,935


25,061

Other financial liabilities


66,932


74,376

Lease liabilities


108,568


72,240

Deferred tax liabilities


1,289


13,698

Income tax payable


877


Contingent liabilities


9,637


12,583

Total non-current liabilities


195,625


203,198

TOTAL LIABILITIES


581,924


408,828






Capital and reserves





Issued capital


50,080


47,861

Additional paid-in capital


872,030


541,157

Other reserves


(6,395)


(2,674)

Retained earnings


389,660


293,595

Total equity attributable to owners of the Company


1,305,375


879,939

Non-controlling interests


2,938


Total equity


1,308,313


879,939

TOTAL EQUITY AND LIABILITIES


1,890,237


1,288,767

 

 

Globant S.A.

Supplemental Non-IFRS Financial Information

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






Twelve Months Ended


Three months ended


December 31, 2021


December 31, 2020


December 31, 2021


December 31, 2020









Reconciliation of adjusted gross profit








Gross Profit

494,988


304,327


144,318


88,913

Depreciation and amortization expense

14,122


9,759


4,640


2,430

Share-based compensation expense

3,568


4,109


744


690

Adjusted gross profit

512,678


318,195


149,702


92,033

Adjusted gross profit margin

39.5 %


39.1  %


39.4 %


39.6 %









Reconciliation of selling, general and administrative expenses








Selling, general and administrative expenses

(343,004)


(217,222)


(99,638)


(61,972)

Depreciation and amortization expense

48,796


22,691


13,670


7,232

Share-based compensation expense

35,831


20,519


11,419


4,516

Acquisition-related charges (a)

12,860


10,096


3,482


3,969

COVID-19-related charges (b)


(613)



Adjusted selling, general and administrative expenses

(245,517)


(164,529)


(71,067)


(46,255)

Adjusted selling, general and administrative expenses as % of revenues

(18.9) %


(20.2) %


(18.7) %


(19.9)  %









Reconciliation of Adjusted Profit from Operations








Profit from Operations

144,433


83,942


43,634


27,303

Share-based compensation expense

39,399


24,628


12,163


5,206

Impairment of tax credits


(8)



Acquisition-related charges (a)

28,271


12,754


7,807


5,451

COVID-19-related charges (b)

2,228


2,582



(169)

Impairment of assets


83


11


83

Adjusted Profit from Operations

214,331


123,981


63,615


37,874

Adjusted Profit from Operations margin

16.5 %


15.2 %


16.7 %


16.3 %









Reconciliation of Net income for the period








Net income for the period

96,065


54,217


28,973


18,689

Share-based compensation expense

39,399


24,628


12,163


5,206

Impairment of tax credits


(8)



Acquisition-related charges (a)

35,465


15,796


9,067


4,733

COVID-19-related charges (b)

2,228


2,582



(169)

Impairment of assets


83


11


83

Tax effect of non-IFRS adjustments (c)

(14,748)


(6,712)


(4,412)


(898)

Adjusted Net income

158,409


90,586


45,802


27,644

Adjusted Net income margin

12.2 %


11.1 %


12.1 %


11.9 %









Calculation of Adjusted Diluted EPS








Adjusted Net income

158,409


90,586


45,802


27,644

Diluted shares

42,076


39,717


42,833


40,914

Adjusted Diluted EPS

3.76


2.28


1.07


0.68

 

(a)  Acquisition-related charges include, when applicable, amortization of purchased intangible assets included in depreciation and amortization expense line on our 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 Q4 of 2021 reflects the tax impact of non-IFRS adjustments. Non-IFRS adjusted net income and adjusted diluted EPS for Q4 2020, previously presented were recast to conform to the current presentation.

 

Globant S.A.

Schedule of Supplemental Information (unaudited)

Metrics

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021







Total Employees

16,251

17,267

19,428

21,849

23,526

IT Professionals

15,290

16,284

18,350

20,573

22,167







North America Revenues %

65.9

63.1

63.8

65.2

63.9

Latin America and Others Revenues %

24.3

23.6

21.6

22.0

23.5

Europe Revenues %

9.8

12.0

13.2

11.1

10.7

Asia Revenues %


1.3

1.4

1.7

1.9







USD Revenues %

85.8

77.7

76.4

74.8

73.4

Other Currencies Revenues %

14.2

22.3

23.6

25.2

26.6







Top Customer %

10.7

10.5

10.3

11.5

11.0

Top 5 Customers %

30.0

28.4

26.4

27.6

26.8

Top 10 Customers %

42.9

41.0

39.8

39.7

37.6







Customers Served (Last Twelve Months)

798

860

941

1,018

1,138

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

129

139

154

162

185







 

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