SAN FRANCISCO, Nov. 16, 2017 /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,
2017.
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 2017 highlights
- Revenue increased to a record $109.7
million, representing 33.2% year-over-year growth.
- Non-IFRS Adjusted Gross Profit was $42.8
million (39.0% Non-IFRS Adjusted Gross Profit Margin), an
increase of $8.6 million compared to
$34.2 million for the third quarter
of 2016 (41.5% Non-IFRS Adjusted Gross Profit Margin).
- Non-IFRS Adjusted Net Income was $12.5
million (11.4% Non-IFRS Adjusted Net Income Margin),
compared to a profit of $10.5 million
for the third quarter of 2016 (12.8% Non-IFRS Adjusted Net Income
Margin).
- Non-IFRS Adjusted Diluted EPS was $0.34 per share (based on an average of 36.3
million diluted shares), compared to Non-IFRS Adjusted Diluted EPS
of $0.30 for the third quarter of
2016 (based on an average of 35.5 million diluted shares).
Nine months ended September 30,
2017 highlights
- Revenue for the period increased to $298.0 million, representing 26.5% year-over-year
growth.
- Non-IFRS Adjusted Gross Profit was $115.3 million (38.7% Non-IFRS Adjusted Gross
Profit Margin), an increase of $14.0
million compared to $101.3
million (43.0% Non-IFRS Adjusted Gross Profit Margin) in the
first nine months of 2016.
- Non-IFRS Adjusted Net Income was $31.8
million (10.7% Non-IFRS Adjusted Net Income Margin), an
increase of $2.7 million, compared to
a profit of $29.1 million (12.4%
Non-IFRS Adjusted Net Income Margin) in the first nine months of
2016.
- Non-IFRS Adjusted Diluted EPS was $0.88 per share (based on an average of 36.1
million diluted shares during the first nine months of the 2017),
an increase of $0.06 compared to
Non-IFRS Adjusted Diluted EPS of $0.82 for the first nine months of 2016 (based on
an average of 35.3 million diluted shares during the first nine
months of the 2016).
"We are very pleased with our third quarter performance. Our
revenues increased to a record $109.7
million, representing solid 33.2% year-over-year growth, and
we continue to experience strong momentum in our business" said
Martín Migoya, Globant's CEO and co-founder.
"We continue to have strong demand from companies looking to
achieve digital transformations. Moreover, we expect to see a
significant opportunity coming from artificial intelligence, which
has the potential to impact all businesses and industries. We
believe that our expertise and Studio model positions us as a
leader in this area and makes us an ideal partner for companies
facing these transformations," added Martín Migoya.
"Q3 was another quarter of robust and solid revenue growth as
the demand for our service offerings continues to expand and the
relationship with our strategic accounts across different verticals
remains strong. In terms of operating performance, we expect to
continue executing on our strategy to keep gross margins stable,
diversify our talent base and maintain disciplined spending on our
SG&A so that we can expand our operating leverage", explained
Alejandro Scannapieco, Globant's
CFO.
Globant completed the third quarter with 6,397 Globers, 5,925 of
whom were IT professionals. The geographic revenue breakdown for
the third quarter was as follows: 79.1% from North America (top country: US), 13.3% from
Latin America and others (top
country: Chile) and 7.6% from
Europe (top country: Spain). 85.4% of Globant's revenue for the
third quarter was denominated in US dollars, and the remaining
14.6% was denominated in other currencies, including GB pounds,
Euros and other Latin American currencies.
During the last 12 months ended September
30, 2017, Globant served 346 customers, 78 of which
accounted for more than $1 million of
Globant's revenues. Globant's top customer, top 5 customers and top
10 customers represented 10.3%, 26.8% and 40.7% of third quarter
revenues, respectively.
Cash and cash equivalents and investments as of September 30, 2017 decreased to $44.1 million from $59.9
million as of December 31,
2016. Current assets as of September
30, 2017 amounted to $141.9
million, accounting for 40.6% of total assets. Finally, as
of September 30, 2017, 35.1 million
common shares were issued and outstanding.
2017 Fourth Quarter and Full Year Outlook
Based on current market conditions, Globant is providing the
following estimates for the fourth quarter and the full year of
2017:
- Fourth quarter Revenue is estimated to be between $108-$110 million, implying 24.9% year-over-year
growth at the midpoint of the range.
- Fourth quarter 2017 Non-IFRS Adjusted Diluted EPS is estimated
to be in the range of $0.38-$0.40
(assuming an average of 36.5 million diluted shares outstanding
during the fourth quarter).
- Fiscal year 2017 Revenue is estimated to be in the range of
$406-$408 million, implying 26.1%
year-over-year revenue growth at the midpoint of the range.
- Fiscal year 2017 Non-IFRS Adjusted Diluted EPS is estimated to
be in the range of $1.25-$1.29
(assuming an average of 36.2 million diluted shares outstanding
during 2017).
Conference Call and Webcast
Martín Migoya and Alejandro
Scannapieco will discuss the Q3 2017 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 (NYSE: GLOB)
We are a digitally native technology services company. We are
passionate about building the new way of being digital. We want to
help our clients emotionally connect with consumers and employees,
leveraging the power of artificial intelligence for business
optimization. We are the place where engineering, design, and
innovation meet scale.
Globant has more than 6,300 professionals in 12 countries
working for companies like Google, Linkedin, BBVA, EA and Coca
Cola, among others.
We were named a Worldwide Leader of Digital Strategy Consulting
Services by IDC MarketScape report (2016 and 2017).
We were also featured as a business case study at Harvard, MIT and
Stanford.
For more information, visit www.globant.com
Non-IFRS Financial Information
The financial information in this press release has been
prepared consistently with International Accounting Standards 34,
"Interim Financial Reporting". The financial information 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 and depreciation and amortization.
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
unaudited interim consolidated statement of financial position as
of September 30, 2017 and
December 31, 2016 and its unaudited
interim consolidated statement of profit or loss and other
comprehensive income for the three and nine month periods ended
September 30, 2017 and 2016, prepared
in accordance with IAS 34.
Globant is not providing a quantitative reconciliation of
forward-looking 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 and impairment of tax
credits. 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, 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 Form 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).
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
|
|
Nine months
ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
109,675
|
|
82,350
|
|
298,006
|
|
235,602
|
Cost of
revenues
|
|
(69,733)
|
|
(49,673)
|
|
(190,470)
|
|
(138,194)
|
Gross
profit
|
|
39,942
|
|
32,677
|
|
107,536
|
|
97,408
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(28,782)
|
|
(20,910)
|
|
(81,805)
|
|
(58,998)
|
Impairment of tax
credits
|
|
-
|
|
-
|
|
(1,586)
|
|
-
|
Profit from
operations
|
|
11,160
|
|
11,767
|
|
24,145
|
|
38,410
|
|
|
|
|
|
|
|
|
|
Finance
income
|
|
1,060
|
|
2,415
|
|
5,182
|
|
13,504
|
Finance (expense)
gain, net
|
|
(1,971)
|
|
(2,181)
|
|
(7,407)
|
|
(15,314)
|
Finance expense,
net
|
|
(911)
|
|
234
|
|
(2,225)
|
|
(1,810)
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
2
|
|
399
|
|
2,410
|
|
1,053
|
Profit before
income tax
|
|
10,251
|
|
12,400
|
|
24,330
|
|
37,653
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
(2,262)
|
|
(2,872)
|
|
(5,387)
|
|
(11,271)
|
Net income for the
period
|
|
7,989
|
|
9,528
|
|
18,943
|
|
26,382
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
|
|
|
|
- Exchange
differences on translating foreign operations
|
|
282
|
|
(36)
|
|
204
|
|
1,115
|
- Net fair value loss
on available-for-sale financial assets
|
|
(32)
|
|
(25)
|
|
(27)
|
|
(45)
|
Total
comprehensive income for the period
|
|
8,239
|
|
9,467
|
|
19,120
|
|
27,452
|
|
|
|
|
|
|
|
|
|
Net income
attributable to:
|
|
|
|
|
|
|
|
|
Owners of the
Company
|
|
8,009
|
|
9,537
|
|
18,996
|
|
26,400
|
Non-controlling
interest
|
|
(20)
|
|
(9)
|
|
(53)
|
|
(18)
|
Net income for the
period
|
|
7,989
|
|
9,528
|
|
18,943
|
|
26,382
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income for the period attributable to:
|
|
|
|
|
|
|
|
|
Owners of the
Company
|
|
8,259
|
|
9,476
|
|
19,173
|
|
27,470
|
Non-controlling
interest
|
|
(20)
|
|
(9)
|
|
(53)
|
|
(18)
|
Total
comprehensive income for the period
|
|
8,239
|
|
9,467
|
|
19,120
|
|
27,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
0.23
|
|
0.28
|
|
0.54
|
|
0.77
|
Diluted
|
|
0.22
|
|
0.27
|
|
0.53
|
|
0.75
|
|
|
|
|
|
|
|
|
|
Weighted average
of outstanding shares (in thousands)
|
|
|
|
|
|
|
|
|
Basic
|
|
35,020
|
|
34,464
|
|
34,833
|
|
34,335
|
Diluted
|
|
36,254
|
|
35,457
|
|
36,067
|
|
35,328
|
Globant
S.A.
Condensed Interim
Consolidated Statement of Financial Position
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
|
|
September 30,
2017
|
|
December 31, 2016
|
ASSETS
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
35,285
|
|
50,532
|
Investments
|
|
8,827
|
|
9,355
|
Trade
receivables
|
|
82,781
|
|
54,170
|
Other
receivables
|
|
14,129
|
|
18,869
|
Other financial
assets
|
|
900
|
|
900
|
Total current
assets
|
|
141,922
|
|
133,826
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Other
receivables
|
|
33,745
|
|
27,465
|
Deferred tax
assets
|
|
11,120
|
|
7,691
|
Investment in
associates
|
|
1,550
|
|
800
|
Other financial
assets
|
|
555
|
|
319
|
Property and
equipment
|
|
42,787
|
|
35,676
|
Intangible
assets
|
|
14,944
|
|
13,791
|
Goodwill
|
|
102,930
|
|
65,180
|
Total non-current
assets
|
|
207,631
|
|
150,922
|
TOTAL
ASSETS
|
|
349,553
|
|
284,748
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade
payables
|
|
9,532
|
|
5,603
|
Payroll and social
security taxes payable
|
|
35,553
|
|
30,328
|
Borrowings
|
|
10,579
|
|
217
|
Other financial
liabilities
|
|
17,981
|
|
12,602
|
Tax
liabilities
|
|
4,436
|
|
6,249
|
Total current
liabilities
|
|
78,081
|
|
54,999
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
Other financial
liabilities
|
|
21,500
|
|
19,224
|
Other
liabilities
|
|
20
|
|
20
|
Provisions for
contingencies
|
|
1,207
|
|
1,945
|
Total non-current
liabilities
|
|
22,727
|
|
21,189
|
TOTAL
LIABILITIES
|
|
100,808
|
|
76,188
|
|
|
|
|
|
Capital and
reserves
|
|
|
|
|
Issued and paid-in
capital
|
|
42,171
|
|
41,576
|
Additional paid-in
capital
|
|
83,260
|
|
62,790
|
Other
reserves
|
|
(784)
|
|
(961)
|
Retained
earnings
|
|
124,115
|
|
105,119
|
Total equity
attributable to owners of the Company
|
|
248,762
|
|
208,524
|
Non-controlling
interests
|
|
(17)
|
|
36
|
Total
equity
|
|
248,745
|
|
208,560
|
TOTAL EQUITY AND
LIABILITIES
|
|
349,553
|
|
284,748
|
|
|
|
|
|
Globant
S.A.
Supplemental
Non-IFRS Financial Information
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
|
|
|
|
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
39,942
|
|
32,677
|
|
107,536
|
|
97,408
|
Depreciation and
amortization expense
|
|
1,069
|
|
1,260
|
|
3,268
|
|
3,189
|
Share-based
compensation expense
|
|
1,771
|
|
263
|
|
4,501
|
|
711
|
Adjusted gross
profit
|
|
42,782
|
|
34,200
|
|
115,305
|
|
101,308
|
Adjusted gross
profit margin
|
|
39.0%
|
|
41.5%
|
|
38.7%
|
|
43.0%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(28,782)
|
|
(20,910)
|
|
(81,805)
|
|
(58,998)
|
Depreciation and
amortization expense
|
|
3,004
|
|
1,769
|
|
8,485
|
|
4,536
|
Share-based
compensation expense
|
|
2,738
|
|
756
|
|
6,766
|
|
2,042
|
Adjusted selling,
general and administrative expenses
|
|
(23,040)
|
|
(18,385)
|
|
(66,554)
|
|
(52,420)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
|
(21.0)%
|
|
(22.3)%
|
|
(22.3)%
|
|
(22.2)%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
11,160
|
|
11,767
|
|
24,145
|
|
38,410
|
Impairment of tax
credits
|
|
-
|
|
-
|
|
1,586
|
|
-
|
Share-based
compensation expense
|
|
4,509
|
|
1,019
|
|
11,267
|
|
2,753
|
Adjusted Profit
from Operations
|
|
15,669
|
|
12,786
|
|
36,998
|
|
41,163
|
Adjusted Profit
from Operations margin
|
|
14.3%
|
|
15.5%
|
|
12.4%
|
|
17.5%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
|
|
|
|
|
Net income for the
period
|
|
7,989
|
|
9,528
|
|
18,943
|
|
26,382
|
Impairment of tax
credits
|
|
-
|
|
-
|
|
1,586
|
|
-
|
Share-based
compensation expense
|
|
4,509
|
|
1,019
|
|
11,267
|
|
2,753
|
Adjusted Net
income
|
|
12,498
|
|
10,547
|
|
31,796
|
|
29,135
|
Adjusted Net
income margin
|
|
11.4%
|
|
12.8%
|
|
10.7%
|
|
12.4%
|
|
|
|
|
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
|
|
|
|
|
Adjusted Net
income
|
|
12,498
|
|
10,547
|
|
31,796
|
|
29,135
|
Diluted
shares
|
|
36,254
|
|
35,457
|
|
36,067
|
|
35,328
|
Adjusted Diluted
EPS
|
|
0.34
|
|
0.30
|
|
0.88
|
|
0.82
|
Globant
S.A.
Schedule of
Supplemental Information (unaudited)
|
|
|
|
|
|
|
Metrics
|
Q3
2016
|
Q4
2016
|
Q1
2017
|
Q2
2017
|
Q3
2017
|
|
|
|
|
|
|
Total
Employees
|
5,421
|
5,631
|
5,855
|
6,223
|
6,397
|
IT
Professionals
|
4,983
|
5,219
|
5,421
|
5,772
|
5,925
|
|
|
|
|
|
|
North America Revenue
%
|
81.4
|
78.9
|
78.9
|
78.5
|
79.1
|
Latin America and
Others Revenue %
|
9.4
|
9.6
|
9.9
|
9.2
|
13.3
|
Europe Revenue
%
|
9.2
|
11.5
|
11.2
|
12.3
|
7.6
|
|
|
|
|
|
|
USD Revenue
%
|
89.7
|
88.0
|
88.6
|
87.6
|
85.4
|
Other Currencies
Revenue %
|
10.3
|
12.0
|
11.4
|
12.4
|
14.6
|
|
|
|
|
|
|
Top Customer
%
|
10.4
|
9.4
|
9.7
|
10.1
|
10.3
|
Top 5 Customers
%
|
33.9
|
33.3
|
31.1
|
31.6
|
26.8
|
Top 10 Customers
%
|
46.8
|
45.8
|
43.7
|
43.9
|
40.7
|
|
|
|
|
|
|
Customers Served
(Last Twelve Months)
|
354
|
340
|
336
|
331
|
346
|
Customers with
>$1M in Revenue (Last Twelve Months)
|
61
|
60
|
67
|
76
|
78
|
Investor Relations Contact:
Paula Conde, Globant
investors@globant.com
(877) 215-5230
Media Contact:
Wanda Weigert, Globant
pr@globant.com
(877) 215-5230
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SOURCE Globant