SAN FRANCISCO, Feb. 15, 2018 /PRNewswire/ -- Globant (NYSE:
GLOB), a digitally-native technology services company focused on
creating digital journeys, today announced results for the
three and twelve months ended December 31,
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.
Fourth quarter 2017 highlights
- Revenue increased to a record $115.4
million, representing 32.3% year-over-year growth.
- Non-IFRS Adjusted Gross Profit was $45.0
million (39.0% Non-IFRS Adjusted Gross Profit Margin), an
increase of $9.6 million compared to
$35.4 million for the fourth quarter
of 2016 (40.5% Non-IFRS Adjusted Gross Profit Margin).
- Non-IFRS Adjusted Net Income was $14.1
million (12.2% Non-IFRS Adjusted Net Income Margin),
compared to a profit of $9.5 million
for the fourth quarter of 2016 (10.9% Non-IFRS Adjusted Net Income
Margin).
- Non-IFRS Adjusted Diluted EPS was $0.39 per share (based on an average of 36.3
million diluted shares), compared to Non-IFRS Adjusted Diluted EPS
of $0.27 for the fourth quarter of
2016 (based on an average of 35.6 million diluted shares).
Full year ended December 31,
2017 highlights
- Revenue for the period increased to $413.4 million, representing 28.1% year-over-year
growth.
- Non-IFRS Adjusted Gross Profit was $160.3 million (38.8% Non-IFRS Adjusted Gross
Profit Margin), an increase of $23.6
million compared to $136.7
million (42.3% Non-IFRS Adjusted Gross Profit Margin) for
the full year 2016.
- Non-IFRS Adjusted Net Income was $46.1
million (11.1% Non-IFRS Adjusted Net Income Margin), an
increase of $7.3 million, compared to
a profit of $38.8 million (12.0%
Non-IFRS Adjusted Net Income Margin) for the full year 2016.
- Non-IFRS Adjusted Diluted EPS was $1.28 per share (based on an average of 36.1
million diluted shares during the full year 2017), an increase of
$0.19 compared to Non-IFRS Adjusted
Diluted EPS of $1.09 for the full
year 2016 (based on an average of 35.4 million diluted shares
during the full year 2016).
"I am very pleased with our 2017 performance. Our revenues for
the year increased to $413.4 million,
a robust 28.1% year-over-year growth. This strong growth was driven
by substantial and expanding demand from organizations looking to
digitally transform their businesses. As this trend continues
growing, it leverages the power of technologies like Artificial
Intelligence and others like IoT, UX and more to enable an
Augmented Intelligence approach. Our Studios have proven to be one
of the most effective ways to address these trends and engage with
our accounts. On the vertical front, Financial Services and Media
& Entertainment industries had outstanding performances," said
Martín Migoya, Globant's CEO and co-founder.
"Looking forward to 2018, we continue to have strong demand from
companies looking to achieve digital transformations. We believe
that our market approach with our Studios and our 50-Squared model
positions us as a leader in this area and makes us an ideal partner
for companies facing these transformations," added Martín
Migoya.
"I am very satisfied with our overall results for the fourth
quarter and full year 2017. Q4 was another strong period of
revenue, closing at $115.4 million,
representing 32.3% growth compared to the fourth quarter of 2016.
Our 50-Squared strategy continues to yield positive results, and we
now have nine accounts over $10
million in annual revenues, compared to six accounts for the
same period last year. Regarding profitability, we will continue to
manage costs carefully in order to keep our gross margins within a
stable range while, at the same time, we continue to execute our
diversification strategy. We also expect to maintain our focus on
dilution of our Adjusted SG&A to keep improving our operating
leverage. Finally, hirings during Q4 were also very strong, a
positive signal as we enter 2018", explained Alejandro Scannapieco, Globant's CFO.
Globant completed the fourth quarter with 6,753 Globers, 6,279
of whom were IT professionals. The geographic revenue breakdown for
the fourth quarter was as follows: 78.6% from North America (top country: US), 14.6% from
Latin America and others (top
country: Argentina) and 6.8% from
Europe (top country: Spain). 82.5% of Globant's revenue for the
fourth quarter was denominated in US dollars, and the remaining
17.5% was denominated in other currencies, including Euros, GB
pounds and other Latin American currencies.
During the year ended December 31,
2017, Globant served 356 customers, 82 of which accounted
for more than $1 million of Globant's
revenues. Globant's top customer, top five customers and top ten
customers represented 10.4%, 28.5% and 43.2% of fourth quarter
revenues, respectively.
Cash and cash equivalents and investments as of December 31, 2017 increased to $60.7 million from $59.9
million as of December 31,
2016. Current assets as of December
31, 2017 amounted to $156.1
million, accounting for 43.0% of total assets. Finally, as
of December 31, 2017, 35.2 million
common shares were issued and outstanding.
2018 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
2018:
- First quarter 2018 Revenue is estimated to be between
$113-$115
million, implying 28.5% year-over-year growth at the
midpoint of the range.
- First quarter 2018 Non-IFRS Adjusted Diluted EPS is estimated
to be in the range of $0.31-$0.35
(assuming an average of 36.4 million diluted shares outstanding
during the first quarter).
- Fiscal year 2018 Revenue is estimated to be in the range of
$495-$505
million, implying 20.9% year-over-year revenue growth at the
midpoint of the range.
- Fiscal year 2018 Non-IFRS Adjusted Diluted EPS is estimated to
be in the range of $1.52-$1.62 (assuming an average of 36.7 million
diluted shares outstanding during 2018).
Conference Call and Webcast
Martín Migoya and
Alejandro Scannapieco will discuss
the Q4 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 6,700 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 has 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, depreciation and amortization,
impairment of tax credits and acquisition-related charges. 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 December 31, 2017 and December 31, 2016 and its unaudited interim
consolidated statement of profit or loss and other comprehensive
income for the three and twelve month periods ended December 31, 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, impairment of tax
credits and acquisition-related charges. 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
|
|
Year
ended
|
|
December
31, 2017
|
|
December
31, 2016
|
|
December
31, 2017
|
|
December
31, 2016
|
|
|
|
|
|
|
|
|
Revenues
|
115,433
|
|
87,254
|
|
413,439
|
|
322,856
|
Cost of
revenues
|
(72,114)
|
|
(53,201)
|
|
(262,584)
|
|
(191,395)
|
Gross
profit
|
43,319
|
|
34,053
|
|
150,855
|
|
131,461
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(29,090)
|
|
(22,891)
|
|
(110,895)
|
|
(81,889)
|
Impairment of tax
credits
|
-
|
|
-
|
|
(1,586)
|
|
-
|
Profit from
operations
|
14,229
|
|
11,162
|
|
38,374
|
|
49,572
|
|
|
|
|
|
|
|
|
Finance
income
|
2,774
|
|
2,711
|
|
7,956
|
|
16,215
|
Finance (expense)
gain, net
|
(3,657)
|
|
(3,913)
|
|
(11,064)
|
|
(19,227)
|
Finance expense,
net
|
(883)
|
|
(1,202)
|
|
(3,108)
|
|
(3,012)
|
|
|
|
|
|
|
|
|
Other income,
net
|
1,579
|
|
2,576
|
|
3,989
|
|
3,629
|
Profit before
income tax
|
14,925
|
|
12,536
|
|
39,255
|
|
50,189
|
|
|
|
|
|
|
|
|
Income tax
|
(2,694)
|
|
(3,056)
|
|
(8,081)
|
|
(14,327)
|
Net income for the
period
|
12,231
|
|
9,480
|
|
31,174
|
|
35,862
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
|
|
|
- Exchange
differences on translating foreign operations
|
(469)
|
|
(12)
|
|
(265)
|
|
1,103
|
- Net fair value loss
on available-for-sale financial assets
|
-
|
|
(7)
|
|
(27)
|
|
(52)
|
Total
comprehensive income for the period
|
11,762
|
|
9,461
|
|
30,882
|
|
36,913
|
|
|
|
|
|
|
|
|
Net income
attributable to:
|
|
|
|
|
|
|
|
Owners of the
Company
|
12,254
|
|
10,321
|
|
31,250
|
|
35,876
|
Non-controlling
interest
|
(23)
|
|
4
|
|
(76)
|
|
(14)
|
Net income for the
period
|
12,231
|
|
10,325
|
|
31,174
|
|
35,862
|
|
|
|
|
|
|
|
|
Total
comprehensive income for the period attributable to:
|
|
|
|
|
|
|
|
Owners of the
Company
|
11,785
|
|
10,302
|
|
30,958
|
|
36,927
|
Non-controlling
interest
|
(23)
|
|
4
|
|
(76)
|
|
(14)
|
Total
comprehensive income for the period
|
11,762
|
|
10,306
|
|
30,882
|
|
36,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
0.35
|
|
0.27
|
|
0.89
|
|
1.04
|
Diluted
|
0.34
|
|
0.27
|
|
0.86
|
|
1.01
|
|
|
|
|
|
|
|
|
Weighted average
of outstanding shares (in thousands)
|
|
|
|
|
|
|
|
Basic
|
35,172
|
|
34,601
|
|
34,919
|
|
34,402
|
Diluted
|
36,349
|
|
35,612
|
|
36,096
|
|
35,413
|
Globant S.A.
Condensed Interim Consolidated
Statement of Financial Position
(In thousands of U.S.
dollars, unaudited)
|
December
31, 2017
|
|
December
31, 2016
|
ASSETS
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
52,525
|
|
50,532
|
Investments
|
8,147
|
|
9,355
|
Trade
receivables
|
80,078
|
|
54,170
|
Other
receivables
|
14,469
|
|
18,869
|
Other financial
assets
|
873
|
|
900
|
Total current
assets
|
156,092
|
|
133,826
|
|
|
|
|
Non-current
assets
|
|
|
|
Other
receivables
|
31,736
|
|
27,465
|
Deferred tax
assets
|
15,459
|
|
7,691
|
Investment in
associates
|
1,550
|
|
800
|
Other financial
assets
|
555
|
|
319
|
Property and
equipment
|
43,879
|
|
35,676
|
Intangible
assets
|
11,497
|
|
13,791
|
Goodwill
|
102,033
|
|
65,180
|
Total non-current
assets
|
206,709
|
|
150,922
|
TOTAL
ASSETS
|
362,801
|
|
284,748
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Trade
payables
|
12,244
|
|
5,603
|
Payroll and social
security taxes payable
|
41,068
|
|
30,328
|
Borrowings
|
6,011
|
|
217
|
Other financial
liabilities
|
10,664
|
|
12,602
|
Tax
liabilities
|
7,034
|
|
6,249
|
Other
liabilities
|
20
|
|
-
|
Total current
liabilities
|
77,041
|
|
54,999
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Other financial
liabilities
|
20,322
|
|
19,224
|
Other
liabilities
|
-
|
|
20
|
Provisions for
contingencies
|
1,179
|
|
1,945
|
Total non-current
liabilities
|
21,501
|
|
21,189
|
TOTAL
LIABILITIES
|
98,542
|
|
76,188
|
|
|
|
|
Capital and
reserves
|
|
|
|
Issued and paid-in
capital
|
42,271
|
|
41,576
|
Additional paid-in
capital
|
86,912
|
|
62,790
|
Other
reserves
|
(1,253)
|
|
(961)
|
Retained
earnings
|
136,369
|
|
105,119
|
Total equity
attributable to owners of the Company
|
264,299
|
|
208,524
|
Non-controlling
interests
|
(40)
|
|
36
|
Total
equity
|
264,259
|
|
208,560
|
TOTAL EQUITY AND
LIABILITIES
|
362,801
|
|
284,748
|
|
|
|
|
Globant S.A.
Supplemental Non-IFRS Financial
Information
(In thousands of U.S. dollars,
unaudited)
|
Three months
ended
|
|
Year
ended
|
|
December
31, 2017
|
|
December
31, 2016
|
|
December
31, 2017
|
|
December
31, 2016
|
|
|
|
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
|
|
|
|
Gross
Profit
|
43,319
|
|
34,053
|
|
150,855
|
|
131,461
|
Depreciation and
amortization expense
|
484
|
|
1,092
|
|
3,752
|
|
4,281
|
Share-based
compensation expense
|
1,165
|
|
206
|
|
5,666
|
|
917
|
Adjusted gross
profit
|
44,968
|
|
35,351
|
|
160,273
|
|
136,659
|
Adjusted gross
profit margin
|
39.0%
|
|
40.5%
|
|
38.8%
|
|
42.3%
|
|
|
|
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(29,090)
|
|
(22,891)
|
|
(110,895)
|
|
(81,889)
|
Depreciation and
amortization expense
|
3,891
|
|
2,101
|
|
12,376
|
|
6,637
|
Share-based
compensation expense
|
2,032
|
|
661
|
|
8,798
|
|
2,703
|
Acquisition-related
charges (a)
|
46
|
|
284
|
|
631
|
|
556
|
Adjusted selling,
general and administrative expenses
|
(23,121)
|
|
(19,845)
|
|
(89,090)
|
|
(71,993)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
(20.0)%
|
|
(22.7)%
|
|
(21.5)%
|
|
(22.3)%
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
|
|
|
|
Operating
Profit
|
14,229
|
|
11,162
|
|
38,374
|
|
49,572
|
Share-based
compensation expense
|
3,197
|
|
867
|
|
14,464
|
|
3,620
|
Impairment of tax
credits
|
-
|
|
-
|
|
1,586
|
|
-
|
Acquisition-related
charges (a)
|
435
|
|
585
|
|
2,315
|
|
1,478
|
Adjusted Profit
from Operations
|
17,861
|
|
12,614
|
|
56,739
|
|
54,670
|
Adjusted Profit
from Operations margin
|
15.5%
|
|
14.5%
|
|
13.7%
|
|
16.9%
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
|
|
|
|
Net income for the
period
|
12,231
|
|
9,480
|
|
31,174
|
|
35,862
|
Share-based
compensation expense
|
3,197
|
|
867
|
|
14,464
|
|
3,620
|
Impairment of tax
credits
|
-
|
|
-
|
|
1,586
|
|
-
|
US settlement
agreement, net
|
-
|
|
845
|
|
-
|
|
845
|
Acquisition-related
charges (a)
|
(1,298)
|
|
(1,703)
|
|
(1,158)
|
|
(1,556)
|
Adjusted Net
income
|
14,130
|
|
9,489
|
|
46,066
|
|
38,771
|
Adjusted Net
income margin
|
12.2%
|
|
10.9%
|
|
11.1%
|
|
12.0%
|
|
|
|
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
|
|
|
|
Adjusted Net
income
|
14,130
|
|
9,489
|
|
46,066
|
|
38,771
|
Diluted
shares
|
36,349
|
|
35,612
|
|
36,096
|
|
35,413
|
Adjusted Diluted
EPS
|
0.39
|
|
0.27
|
|
1.28
|
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
(a) Acquisition-related charges include,
when applicable, amortization of purchased intangible assets
included in the depreciation and amortization expense line on our
consolidated statements of operations, 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
|
Q4
2016
|
Q1
2017
|
Q2
2017
|
Q3
2017
|
Q4
2017
|
|
|
|
|
|
|
Total
Employees
|
5,631
|
5,855
|
6,223
|
6,397
|
6,753
|
IT
Professionals
|
5,219
|
5,421
|
5,772
|
5,925
|
6,279
|
|
|
|
|
|
|
North America Revenue
%
|
78.9
|
78.9
|
78.5
|
79.1
|
78.6
|
Latin America and
Others Revenue %
|
9.6
|
9.9
|
9.2
|
13.3
|
14.6
|
Europe Revenue
%
|
11.5
|
11.2
|
12.3
|
7.6
|
6.8
|
|
|
|
|
|
|
USD Revenue
%
|
88.0
|
88.6
|
87.6
|
85.4
|
82.5
|
Other Currencies
Revenue %
|
12.0
|
11.4
|
12.4
|
14.6
|
17.5
|
|
|
|
|
|
|
Top Customer
%
|
9.4
|
9.7
|
10.1
|
10.3
|
10.4
|
Top 5 Customers
%
|
33.3
|
31.1
|
31.6
|
26.8
|
28.5
|
Top 10 Customers
%
|
45.8
|
43.7
|
43.9
|
40.7
|
43.2
|
|
|
|
|
|
|
Customers Served
(Last Twelve Months)
|
340
|
336
|
331
|
346
|
356
|
Customers with
>$1M in Revenue (Last Twelve Months)
|
60
|
67
|
76
|
78
|
82
|
Investor Relations Contact:
Paula Conde, Globant
investors@globant.com
(877) 215-5230
Media Contact:
Wanda Weigert, Globant
pr@globant.com
(877) 215-5230
Source: Globant
View original
content:http://www.prnewswire.com/news-releases/globant-reports-2017-full-year-and-fourth-quarter-financial-results-300599577.html
SOURCE Globant