SAN FRANCISCO, May 18, 2017 /PRNewswire/ -- Globant (NYSE:
GLOB), a digitally-native technology services company focused on
creating digital journeys, today announced results for the
three months ended March 31,
2017.
First quarter 2017 highlights
- Revenue increased to a record $88.7
million, representing 21.0% year-over-year growth.
- Non-IFRS Adjusted Gross Profit was $34.6
million (39.0% Non-IFRS Adjusted Gross Profit Margin), an
increase of $1.6 million
compared to $33.0 million for the
first quarter of 2016 (45.0% Non-IFRS Adjusted Gross Profit
Margin).
- Non-IFRS Adjusted Net Income was $9.7
million (11.0% Non-IFRS Adjusted Net Income Margin), an
increase of $1.3 million, or 15.7%,
compared to a profit of $8.4 million
for the first quarter of 2016 (11.5% Non-IFRS Adjusted Net Income
Margin).
- Non-IFRS Adjusted Diluted EPS was $0.27 per share (based on an average of 35.6
million average diluted shares), an increase of $0.03 compared to Non-IFRS Adjusted Diluted EPS
of $0.24 for the first quarter of
2016 (based on an average of 35.2 million average diluted
shares).
Reconciliations between Non-IFRS financial measures and IFRS
operating results are included at the end of this press
release.
"Q1 resulted in another strong set of financial results. Our
revenues for the quarter amounted to $88.7
million, representing a robust 21.0% year-over-year growth.
Our 50 squared initiative continues to perform according to our
expectations. Our European operations expanded aggressively
compared to Q1 2016 and with the recent acquisition of Ratio, we
are creating a new hub in Seattle
to complement our operations in the
United States. This quarter we added a number of high
potential accounts in the financial industry and the media and
entertainment industry, among others," said Martín Migoya,
Globant's CEO and co-founder.
"During Q1, we continue to see a strong demand coming from
companies looking to achieve digital transformations. Organizations
keep searching for ways to create the optimal digital journey for
their customers through emerging technologies, such as artificial
intelligence. Our Studio model continues to be a key driver to hold
a leadership position, making us an ideal partner when facing these
transformations," added Martín Migoya.
"Q1 was another quarter of revenue growth above 20% and, more
importantly, one where demand for our services continued to expand.
This translated into an aggressive +224 net headcount increase
during the quarter. Political and macroeconomic uncertainty in our
target markets has diminished and we are optimistic for the rest of
the year. Regarding margins, we experienced some FX headwinds
during Q1 as many of the currencies of the countries where we
operate appreciated against the USD. We will continue diversifying
our talent base across the regions, managing carefully our SG&A
while investing in training for the long term," explained
Alejandro Scannapieco, Globant's
CFO.
Globant completed the quarter with 5,855 Globers, 5,421 of whom
were IT professionals. The geographic revenue breakdown for the
first quarter was as follows: 78.9% from North America (top country: US), 11.2% from
Europe (top country: Spain) and 9.9% from Latin America and others (top country:
Chile). 88.6% of Globant's revenue
for the first quarter was denominated in US dollars, and the
remaining 11.4% was denominated in other currencies, including GB
pounds, Euros and other Latin American currencies.
During the 12 months ended March 31,
2017, Globant served 336 customers, 67 of which accounted
for more than $1 million of Globant's
revenues. Globant's top customer, top 5 customers and top 10
customers represented 9.7%, 31.1% and 43.7% of first quarter
revenues, respectively.
Cash and cash equivalents and investments as of March 31, 2017 decreased to $41.2 million from $59.9
million as of December 31,
2016, while borrowings amounted to $0.2 million. Current assets as of March 31, 2017 amounted to $130.2 million, accounting for 43.4% of total
assets. Finally, as of March 31,
2017, 34.7 million common shares were issued and
outstanding.
2017 Full Year and Second Quarter Outlook
Based on current market conditions, Globant is providing the
following estimates for the full year and the second quarter of
2017:
- Fiscal year 2017 revenue is estimated to be between
$386.0-$394.0 million, implying 20.8%
year-over-year growth at the midpoint of the range.
- Fiscal year 2017 Non-IFRS diluted EPS is estimated to be in the
range of $1.22-$1.30 (assuming an
average of 35.8 million diluted shares outstanding during
2017).
- Second quarter revenue is estimated to be in the range of
$95.0-$97.0 million.
- Second quarter Non-IFRS diluted EPS is estimated to be in the
range of $0.26-$0.28 (assuming an
average of 35.7 million diluted shares outstanding during the
second quarter).
Conference Call and Webcast
Martín Migoya and Alejandro
Scannapieco will discuss the Q1 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
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 5,855 professionals in 12 countries
working for companies like Google, 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 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, with its unaudited interim consolidated
statement of financial position as of March
31, 2017 and December 31, 2016
and its unaudited interim consolidated statement of profit or loss
and other comprehensive income for the three-month periods ended
March 31, 2017 and 2016, prepared in
accordance with IAS 34.
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
|
|
|
|
March 31,
2017
|
|
March 31,
2016
|
|
|
|
|
|
|
Revenues
|
|
|
88,742
|
|
73,326
|
Cost of
revenues
|
|
|
(55,494)
|
|
(41,358)
|
Gross
profit
|
|
|
33,248
|
|
31,968
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
(23,895)
|
|
(17,769)
|
Profit from
operations
|
|
|
9,353
|
|
14,199
|
|
|
|
|
|
|
Finance
income
|
|
|
2,085
|
|
6,886
|
Finance
expense
|
|
|
(2,135)
|
|
(7,447)
|
Finance expense,
net
|
|
|
(50)
|
|
(561)
|
|
|
|
|
|
|
Other income,
net
|
|
|
1,728
|
|
3
|
Profit before
income tax
|
|
|
11,031
|
|
13,641
|
|
|
|
|
|
|
Income tax
|
|
|
(2,175)
|
|
(5,725)
|
Net income for the
period
|
|
|
8,856
|
|
7,916
|
|
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
|
- Exchange
differences on translating foreign operations
|
|
|
160
|
|
409
|
- Net fair value loss
on available-for-sale financial assets
|
|
|
7
|
|
928
|
Total
comprehensive income for the period
|
|
|
9,023
|
|
9,253
|
|
|
|
|
|
|
Net income
attributable to:
|
|
|
|
|
|
Owners of the
Company
|
|
|
8,867
|
|
7,940
|
Non-controlling
interest
|
|
|
(11)
|
|
(24)
|
Net income for the
period
|
|
|
8,856
|
|
7,916
|
|
|
|
|
|
|
Total
comprehensive income for the period attributable to:
|
|
|
|
|
|
Owners of the
Company
|
|
|
9,034
|
|
9,277
|
Non-controlling
interest
|
|
|
(11)
|
|
(24)
|
Total
comprehensive income for the period
|
|
|
9,023
|
|
9,253
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
Basic
|
|
|
0.26
|
|
0.23
|
Diluted
|
|
|
0.25
|
|
0.23
|
Weighted average
of outstanding shares (in thousands)
|
|
|
|
|
|
Basic
|
|
|
34,682
|
|
34,223
|
Diluted
|
|
|
35,583
|
|
35,151
|
|
|
|
|
|
|
Globant
S.A.
|
Condensed Interim
Consolidated Statement of Financial Position
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
29,439
|
|
50,532
|
Investments
|
|
|
11,777
|
|
9,355
|
Trade
receivables
|
|
|
68,381
|
|
54,170
|
Other
receivables
|
|
|
19,747
|
|
18,869
|
Other financial
assets
|
|
|
900
|
|
900
|
Total current
assets
|
|
|
130,244
|
|
133,826
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Other
receivables
|
|
|
33,075
|
|
27,465
|
Deferred tax
assets
|
|
|
8,336
|
|
7,691
|
Investment in
associates
|
|
|
1,550
|
|
800
|
Other financial
assets
|
|
|
455
|
|
319
|
Property and
equipment
|
|
|
37,443
|
|
35,676
|
Intangible
assets
|
|
|
13,590
|
|
13,791
|
Goodwill
|
|
|
75,483
|
|
65,180
|
Total non-current
assets
|
|
|
169,932
|
|
150,922
|
TOTAL
ASSETS
|
|
|
300,176
|
|
284,748
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade
payables
|
|
|
6,351
|
|
5,603
|
Payroll and social
security taxes payable
|
|
|
32,245
|
|
30,328
|
Borrowings
|
|
|
160
|
|
217
|
Other financial
liabilities
|
|
|
17,050
|
|
12,602
|
Tax
liabilities
|
|
|
5,675
|
|
6,249
|
Total current
liabilities
|
|
|
61,481
|
|
54,999
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
Other financial
liabilities
|
|
|
16,779
|
|
19,224
|
Other
liabilities
|
|
|
20
|
|
20
|
Provisions for
contingencies
|
|
|
1,071
|
|
1,945
|
Total non-current
liabilities
|
|
|
17,870
|
|
21,189
|
TOTAL
LIABILITIES
|
|
|
79,351
|
|
76,188
|
|
|
|
|
|
|
Capital and
reserves
|
|
|
|
|
|
Issued and paid-in
capital
|
|
|
41,671
|
|
41,576
|
Additional paid-in
capital
|
|
|
65,937
|
|
62,790
|
Other
reserves
|
|
|
(794)
|
|
(961)
|
Retained
earnings
|
|
|
113,986
|
|
105,119
|
Total equity
attributable to owners of the Company
|
|
|
220,800
|
|
208,524
|
Non-controlling
interests
|
|
|
25
|
|
36
|
Total
equity
|
|
|
220,825
|
|
208,560
|
TOTAL EQUITY AND
LIABILITIES
|
|
|
300,176
|
|
284,748
|
|
|
|
|
|
|
Globant
S.A.
|
Supplemental
Non-IFRS Financial Information
|
(In thousands of
U.S. dollars, unaudited)
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
March 31,
2017
|
|
March 31,
2016
|
|
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
|
|
Gross
Profit
|
|
|
33,248
|
|
31,968
|
Depreciation and
amortization expense
|
|
|
1,102
|
|
914
|
Share-based
compensation expense
|
|
|
278
|
|
144
|
Adjusted gross
profit
|
|
|
34,628
|
|
33,026
|
Adjusted gross
profit margin
|
|
|
39.0%
|
|
45.0%
|
|
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
(23,895)
|
|
(17,769)
|
Depreciation and
amortization expense
|
|
|
2,596
|
|
1,334
|
Share-based
compensation expense
|
|
|
599
|
|
351
|
Adjusted selling,
general and administrative expenses
|
|
|
(20,700)
|
|
(16,084)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
|
|
(23.3)%
|
|
(21.9)%
|
|
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
|
|
Operating
Profit
|
|
|
9,353
|
|
14,199
|
Share-based
compensation expense
|
|
|
877
|
|
495
|
Adjusted Profit
from Operations
|
|
|
10,230
|
|
14,694
|
Adjusted Profit
from Operations margin
|
|
|
11.5%
|
|
20.0%
|
|
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
|
|
Net income for the
period
|
|
|
8,856
|
|
7,916
|
Share-based
compensation expense
|
|
|
877
|
|
495
|
Adjusted Net
income
|
|
|
9,733
|
|
8,411
|
Adjusted Net
income margin
|
|
|
11.0%
|
|
11.5%
|
|
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
|
|
Adjusted Net
income
|
|
|
9,733
|
|
8,411
|
Diluted
shares
|
|
|
35,583
|
|
35,151
|
Adjusted Diluted
EPS
|
|
|
0.27
|
|
0.24
|
|
|
|
|
|
|
Globant
S.A.
|
Schedule of
Supplemental Information (unaudited)
|
|
|
|
|
|
|
Metric
|
Q1
2016
|
Q2
2016
|
Q3
2016
|
Q4
2016
|
Q1
2017
|
|
|
|
|
|
|
Total
Employees
|
5,285
|
5,380
|
5,421
|
5,631
|
5,855
|
IT
Professionals
|
4,847
|
4,932
|
4,983
|
5,219
|
5,421
|
|
|
|
|
|
|
North America Revenue
%
|
82.2
|
81.1
|
81.4
|
78.9
|
78.9
|
Latin America and
Others Revenue %
|
10.8
|
10.7
|
9.4
|
9.6
|
9.9
|
Europe Revenue
%
|
7.0
|
8.2
|
9.2
|
11.5
|
11.2
|
|
|
|
|
|
|
USD Revenue
%
|
91.9
|
90.9
|
89.7
|
88.0
|
88.6
|
Other Currencies
Revenue %
|
8.1
|
9.1
|
10.3
|
12.0
|
11.4
|
|
|
|
|
|
|
Top Customer
%
|
11.6
|
10.0
|
10.4
|
9.4
|
9.7
|
Top 5 Customers
%
|
36.4
|
34.2
|
33.9
|
33.3
|
31.1
|
Top 10 Customers
%
|
48.4
|
46.4
|
46.8
|
45.8
|
43.7
|
|
|
|
|
|
|
Customers Served
(Last Twelve Months)
|
359
|
366
|
354
|
340
|
336
|
Customers with
>$1M in Revenue (Last Twelve Months)
|
49
|
57
|
61
|
60
|
67
|
|
|
|
|
|
|
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