Globant Reports 2022 First Quarter Financial Results

Solid Start To The Year

First quarter revenues of $401.4 million, up 48.6% year-over-year 
IFRS Diluted EPS of $0.86 for the first quarter 
Non-IFRS Diluted EPS of $1.19 for the first quarter

LUXEMBOURG, May 19, 2022 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three months ended March 31, 2022.

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.

First Quarter 2022 Financial Highlights

  • Revenues rose to $401.4 million, representing 48.6% year-over-year growth.
  • IFRS Gross Profit Margin was 38.0% compared to 38.2% in the first quarter of 2021.
  • Non-IFRS Adjusted Gross Profit Margin was 39.5% compared to 39.6% in the first quarter of 2021.
  • IFRS Profit from Operations Margin was 12.6% compared to 11.2% in the first quarter of 2021.
  • Non-IFRS Adjusted Profit from Operations Margin was 16.8% compared to 16.6% in the first quarter of 2021.
  • IFRS Diluted EPS was $0.86 compared to $0.53 in the first quarter of 2021.
  • Non-IFRS Adjusted Diluted EPS was $1.19 compared to $0.83 in the first quarter of 2021.

Other Metrics as of and for the quarter ended March 31, 2022

  • Cash and cash equivalents and Short-term investments were $370.1 million as of March 31, 2022, a decrease of $90.3 million from $460.4 million as of December 31, 2021, driven by seasonal impacts of tax and bonus payments, and a number of M&A earnouts. As of March 31, 2022, our credit facility was fully undrawn.
  • Globant completed the first quarter of 2022 with 24,504 Globers, 23,158 of whom were technology, design and innovation professionals.
  • The geographic revenue breakdown for the first quarter of 2022 was as follows: 63.1% from North America (top country: US), 23.5% from Latin America (top country: Chile), 11.1% from EMEA (top country: Spain) and 2.3% from Asia and Oceania (top country: India).
  • In terms of currencies, 80.6% of Globant's revenues for the first quarter of 2022 were denominated in US dollars.
  • During the twelve months ended March 31, 2022, Globant served 1,195 customers and continued to increase its wallet share, with 206 accounts generating more than $1 million of annual revenues, compared to 139 for the same period one year ago.
  • Globant's top customer, top five customers and top ten customers for the first quarter of 2022 represented 11.0%, 28.0% and 38.6% of revenues, respectively.

"This has been another outstanding quarter for our company's growth, based on the sustained demand for digital transformation. Organizations are eager to leverage new technologies and touch points to deliver superb experiences, and we have enhanced our capabilities to scale and identify new trends like AI, Augmented Reality, the Metaverse, and Blockchain," said Martín Migoya. "We are now seeing a significant trend regarding low-code and no-code software. The concept of making software development easier through AI will guide organizational strategies moving forward. Our acquisition of GeneXus together with our platforms Augoor and MagnifAI, will be key to address this vision in the future."

"We are pleased with our strong financial results for the first quarter of 2022. Q1 revenues reached $401.4 million, an increase of 48.6% from $270.2 million in Q1 2021. This increase reflects robust demand for our services across all geographies. In addition to our organic growth, we are also very satisfied with the performance from our acquisitions. We are confident in our ability to continue driving strong growth, and delivering unparalleled value for our clients," explained Juan Urthiague, Globant's CFO.

2022 Second Quarter and Full Year Outlook

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

  • Second quarter 2022 Revenues are estimated to be at least $425.5 million, or 39.4% year-over-year growth. This expected growth includes a negative FX impact of 2.5 percentage points.
  • Second quarter 2022 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 16%-17%.
  • Second quarter 2022 Non-IFRS Adjusted Diluted EPS is estimated to be at least $1.20 (assuming an average of 42.8 million diluted shares outstanding during the second quarter).
  • Fiscal year 2022 Revenues are estimated to be at least $1,768 million, or 36.3% year-over-year growth. This expected revenue growth includes a negative FX impact of 2.0 percentage points.
  • 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 $4.94 (assuming an average of 42.9 million diluted shares outstanding during 2022).

Conference Call and Webcast 
Martín Migoya and Juan Urthiague will discuss the first quarter 2022 results in a video conference call today beginning at 4:30pm ET.

Video conference call access information is: 
https://more.globant.com/F1Q22EarningsCall 
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 24,500 employees and we are present in 19 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, 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 March 31, 2022 and December 31, 2021 and its condensed interim consolidated statement of comprehensive income for the three months ended March 31, 2022 and 2021, 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, 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)


Three Months Ended


March 31,
2022


March 31,
2021





Revenues

401,378


270,170

Cost of revenues

(248,967)


(166,973)

Gross profit

152,411


103,197





Selling, general and administrative expenses

(101,638)


(71,891)

Net impairment losses on financial assets

(37)


(1,099)

Other operating income and expenses, net


11

Profit from operations

50,736


30,218





Finance income

290


323

Finance expense

(4,029)


(2,612)

Other financial results, net

438


871

Financial results, net

(3,301)


(1,418)





Other income and expenses, net

874


38

Profit before income tax

48,309


28,838





Income tax

(11,502)


(7,171)

Net income for the period

36,807


21,667





- Exchange differences on translating foreign operations

(2,435)


(1,724)

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

(1)


- Gains and losses on cash flow hedges

133


170

Total comprehensive income for the period

34,504


20,113





Net income attributable to:




Owners of the Company

36,623


21,667

Non-controlling interest

184


Net income for the period

36,807


21,667





Total comprehensive income for the period attributable to:




Owners of the Company

34,320


20,113

Non-controlling interest

184


Total comprehensive income for the period

34,504


20,113

Earnings per share




Basic

0.88


0.54

Diluted

0.86


0.53

Weighted average of outstanding shares (in thousands)




Basic

41,748


39,899

Diluted

42,741


41,157

 

 

Globant S.A. 
Condensed Interim Consolidated Statements of Financial Position as of March 31, 2022 and December 31, 2021 
(In thousands of U.S. dollars, unaudited)



March 31, 2022


December 31, 2021

ASSETS





Current assets





Cash and cash equivalents


340,757


427,804

Investments


29,310


32,581

Trade receivables


348,376


300,109

Other assets


7,956


7,855

Other receivables


63,181


49,194

Other financial assets


3,396


2,057

Total current assets


792,976


819,600






Non-current assets





Investments


1,226


1,027

Other assets


8,769


8,583

Other receivables


20,522


24,263

Deferred tax assets


49,677


58,404

Investment in associates


500


Other financial assets


26,037


25,233

Property and equipment


130,528


133,571

Intangible assets


106,563


102,016

Right-of-use assets


154,720


144,581

Goodwill


571,045


572,959

Total non-current assets


1,069,587


1,070,637

TOTAL ASSETS


1,862,563


1,890,237






LIABILITIES





Current liabilities





Trade payables


51,945


63,210

Payroll and social security taxes payable


158,368


184,464

Borrowings


9,578


10,305

Other financial liabilities


61,611


63,059

Lease liabilities


29,762


25,917

Tax liabilities


16,672


18,071

Income tax payable


16,599


20,318

Other liabilities


301


955

Total current liabilities


344,836


386,299






Non-current liabilities





Trade payables


5,265


6,387

Borrowings


1,789


1,935

Other financial liabilities


25,899


66,932

Lease liabilities


117,434


108,568

Deferred tax liabilities


1,312


1,289

Income tax payable


4,728


877

Payroll and social security taxes payable


1,453


Provisions for contingencies


10,731


9,637

Total non-current liabilities


168,611


195,625

TOTAL LIABILITIES


513,447


581,924






Capital and reserves





Issued capital


50,120


50,080

Additional paid-in capital


879,223


872,030

Other reserves


(8,698)


(6,395)

Retained earnings


426,283


389,660

Total equity attributable to owners of the Company


1,346,928


1,305,375

Non-controlling interests


2,188


2,938

Total equity


1,349,116


1,308,313

TOTAL EQUITY AND LIABILITIES


1,862,563


1,890,237

 

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


Three Months Ended


March 31,
2022


March 31,
2021





Reconciliation of adjusted gross profit




Gross Profit

152,411


103,197

Depreciation and amortization expense

5,218


2,801

Share-based compensation expense - Equity settled

800


1,015

Adjusted gross profit

158,429


107,013

Adjusted gross profit margin

39.5%


39.6%





Reconciliation of selling, general and administrative expenses




Selling, general and administrative expenses

(101,638)


(71,891)

Depreciation and amortization expense

14,155


9,838

Share-based compensation expense - Equity settled

10,361


7,682

Acquisition-related charges (a)

2,477


2,634

Adjusted selling, general and administrative expenses

(74,645)


(51,737)

Adjusted selling, general and administrative expenses as % of revenues

(18.6)%


(19.1)%





Reconciliation of Adjusted Profit from Operations




Profit from Operations

50,736


30,218

Share-based compensation expense - Equity settled

11,161


8,697

Acquisition-related charges (a)

5,640


6,074

Impairment of assets


(11)

Adjusted Profit from Operations

67,537


44,978

Adjusted Profit from Operations margin

16.8 %


16.6 %





Reconciliation of Net income for the period




Net income for the period

36,623


21,667

Share-based compensation expense - Equity settled

11,161


8,697

Acquisition-related charges (a)

6,309


6,653

Impairment of assets


(11)

Tax effect of non-IFRS adjustments

(3,293)


(2,759)

Adjusted Net income

50,800


34,247

Adjusted Net income margin

12.7%


12.7%





Calculation of Adjusted Diluted EPS




Adjusted Net income

50,800


34,247

Diluted shares

42,741


41,157

Adjusted Diluted EPS

1.19


0.83

(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.

Globant S.A. 
Schedule of Supplemental Information (unaudited)

Metrics

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022







Total Employees

17,267

19,428

21,849

23,526

24,504

IT Professionals

16,284

18,350

20,573

22,167

23,158







North America Revenues %

63.1

63.9

65.2

63.9

63.1

Latin America  Revenues %

23.6

20.6

21.6

23.1

23.5

EMEA Revenues %

12.1

13.2

11.1

10.7

11.1

Asia and Oceania Revenues %

1.2

2.3

2.1

2.3

2.3







USD Revenues %

77.7

76.4

74.8

73.4

80.6

Other Currencies Revenues %

22.3

23.6

25.2

26.6

19.4







Top Customer %

10.5

10.3

11.5

11.0

11.0

Top 5 Customers %

28.4

26.4

27.6

26.8

28.0

Top 10 Customers %

41.0

39.8

39.7

37.6

38.6







Customers Served (Last Twelve Months)

860

941

1,018

1,138

1,195

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

139

154

162

185

206







 

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

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

SOURCE Globant