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Published: 2023-08-17 16:15:37 ET
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EX-99.1 2 tm2324069d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

August 17, 2023

 

Globant Reports 2023 Second Quarter Financial Results

Strong Half-Year Performance, Positive Outlook Ahead

 

 ·Second quarter revenues of $497.5 million, up 15.9% year-over-year
 ·IFRS Diluted EPS of $0.85 for the second quarter
 ·Non-IFRS Adjusted Diluted EPS of $1.36 for the second quarter

 

LUXEMBOURG / August 17, 2023 - Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three and six months ended June 30, 2023.

 

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.

 

Second Quarter 2023 Financial Highlights

 

 ·Revenues rose to $497.5 million, representing 15.9% year-over-year growth.
 ·IFRS Gross Profit Margin was 36.3% compared to 37.6% in the second quarter of 2022.
 ·Non-IFRS Adjusted Gross Profit Margin was 38.3% compared to 39.1% in the second quarter of 2022.
 ·IFRS Profit from Operations Margin was 9.4% compared to 11.4% in the second quarter of 2022.
 ·Non-IFRS Adjusted Profit from Operations Margin was 15.0% compared to 16.1% in the second quarter of 2022.
 ·IFRS Diluted EPS was $0.85 compared to $0.87 in the second quarter of 2022.
 ·Non-IFRS Adjusted Diluted EPS was $1.36 compared to $1.22 in the second quarter of 2022.

 

Six months ended June 30, 2023 Financial Highlights

 

 ·Revenues rose to $970.0 million, representing 16.8% year-over-year growth.
 ·IFRS Gross Profit Margin was 36.0% compared to 37.8% in the first six months of 2022.
 ·Non-IFRS Adjusted Gross Profit Margin was 38.2% compared to 39.3% in the first six months of 2022.
 ·IFRS Profit from Operations Margin was 9.4% compared to 12.0% in the first six months of 2022.
 ·Non-IFRS Adjusted Profit from Operations Margin was 15.0% compared to 16.5% in the first six months of 2022.
 ·IFRS Diluted EPS was $1.70 compared to $1.72 in the first six months of 2022.
 ·Non-IFRS Adjusted Diluted EPS was $2.64 compared to $2.41 in the first six months of 2022.

 

 

 

 

Other Metrics as of and for the quarter ended June 30, 2023

 

 ·Cash and cash equivalents and Short-term investments were $270.8 million as of June 30, 2023, a decrease of $70.1 million from $340.9 million as of December 31, 2022, driven mainly by payments of taxes, investments in our platform business and inorganic expansion initiatives. As of June 30, 2023, our credit facility was fully undrawn.
 ·Globant completed the second quarter of 2023 with 25,947 Globers, 24,163 of whom were technology, design and innovation professionals.
 ·The geographic revenue breakdown for the second quarter of 2023 was as follows: 60.6% from North America (top country: US), 22.0% from Latin America (top country: Argentina), 14.1% from EMEA (top country: Spain) and 3.3% from Asia and Oceania (top country: India).
 ·Globant’s top customer, top five customers and top ten customers for the second quarter of 2023 represented 8.8%, 23.7% and 33.3% of revenues, respectively.
 ·During the twelve months ended June 30, 2023, Globant served a total of 1,388 customers (with revenues over $10,000 in the last twelve months) and continued to increase its wallet share, with 283 accounts generating more than $1 million of annual revenues, compared to 233 for the same period one year ago.
 ·In terms of currencies, 73.9% of Globant’s revenues for the second quarter of 2023 were denominated in US dollars.

 

“We are happy to deliver another great quarter. At Globant, our vision is to provide the best AI and digital transformations in the world, and we will continue to do so with a strong focus on reinventing our technology professional services industry. We are seeing strong sequential growth into the second half of the year, providing us with encouraging signs as we start thinking about 2024”, said Martín Migoya, Globant’s CEO and Co-founder. “In the AI space, we continue to expand our services in order to meet the increasing demand. In early June, IDC named us as a leader in AI in the IDC MarketScape, validation of our strong expertise. Beyond that, the evolution of platforms like GeneXus, Augoor, Sportian, MAIDA and Waasabi are key real-life solutions that can be scaled globally.”

 

“It is with great pride that we report our industry-leading growth, boasting a solid 15.9% year-over-year revenue increase, amounting to an impressive $497.5 million. We have raised our guidance for the year, a testament to our unwavering commitment to delivering excellent results in the current environment. Moreover, our adjusted operating profit margin met guidance expectations, and our strategic execution of M&A initiatives has effectively expanded our presence in the European market. As anticipated, our underlying leading-indicators remain strong, and we feel encouraged by the short term revenue growth momentum in our business. We are firmly on track for continued success, and we are genuinely excited about the boundless opportunities that lie ahead,” explained Juan Urthiague, Globant’s CFO.

 

2023 Third Quarter and Full Year Outlook

 

Based on current market conditions, Globant is providing the following estimates for the third quarter and the full year of 2023:

 

 ·Third quarter 2023 Revenues are estimated to be at least $545.0 million, or 18.8% year-over-year growth.
 ·Third quarter 2023 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15-16.5%.
 ·Third quarter 2023 Non-IFRS Adjusted Diluted EPS is estimated to be at least $1.46 (assuming an average of 43.5 million diluted shares outstanding during the third quarter).
 ·Fiscal year 2023 Revenues are estimated to be at least $2,094.0 million, implying at least 17.6% year-over-year revenue growth.

 

 

 

 

 ·Fiscal year 2023 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15%-16.5%.
 ·Fiscal year 2023 Non-IFRS Adjusted Diluted EPS is estimated to be at least $5.72 (assuming an average of 43.4 million diluted shares outstanding during 2023).

 

Conference Call and Webcast

 

Martin Migoya, Globant’s CEO & co-founder, Juan Urthiague - CFO, Patricia Pomies - COO, and Diego Tártara - CTO, will discuss the second quarter 2023 results in a video conference call today beginning at 4:30pm ET.

 

Video conference call access information is:

https://more.globant.com/F2Q23EarningsCall

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 25,900 employees and we are present in more than 25 countries in 5 continents working for companies like Google, 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”) applicable to interim periods, 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, 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 June 30, 2023 and December 31, 2022 and its condensed interim consolidated statement of comprehensive income for the three and six months ended June 30, 2023 and 2022, 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: 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 Statements of Comprehensive Income

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

 

   Six Months Ended   Three months ended 
   June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022 
Revenues   969,952    830,635    497,531    429,257 
Cost of revenues   (620,814)   (516,937)   (316,690)   (267,970)
Gross profit   349,138    313,698    180,841    161,287 
                     
Selling, general and administrative expenses   (247,533)   (213,316)   (128,176)   (111,678)
Net impairment losses on financial assets   (11,358)   (744)   (6,641)   (707)
Other operating income and expenses, net   614    —    614    — 
Profit from operations   90,861    99,638    46,638    48,902 
                     
Finance income   2,176    624    941    334 
Finance expense   (9,402)   (7,352)   (5,230)   (3,323)
Other financial results, net   8,429    1,256    4,667    818 
Financial results, net   1,203    (5,472)   378    (2,171)
                     
Share of results of investment in associates   15    —    (41)   — 
Other income and expenses, net   1,301    2,074    (186)   1,200 
Profit before income tax   93,380    96,240    46,789    47,931 
                     
Income tax   (20,089)   (22,279)   (9,883)   (10,777)
Net income for the period   73,291    73,961    36,906    37,154 
                     
Other comprehensive income, net of income tax effects                    
Items that may be reclassified subsequently to profit and loss:                    
- Exchange differences on translating foreign operations   1,252    (23,114)   (1,489)   (20,679)
- Net change in fair value on financial assets measured at FVOCI   (2,331)   (2,092)   (2,356)   (2,091)
- Gains and losses on cash flow hedges   3,879    (4,211)   (327)   (4,344)
Total comprehensive income for the period   76,091    44,544    32,734    10,040 
                     
Net income attributable to:                    
Owners of the Company   73,412    73,715    36,993    37,092 
Non-controlling interest   (121)   246    (87)   62 
Net income for the period   73,291    73,961    36,906    37,154 
                     
Total comprehensive income for the period attributable to:                    
Owners of the Company   75,027    44,298    32,898    9,978 
Non-controlling interest   1,064    246    (164)   62 
Total comprehensive income for the period   76,091    44,544    32,734    10,040 
Earnings per share                    
Basic   1.73    1.76    0.87    0.89 
Diluted   1.70    1.72    0.85    0.87 
Weighted average of outstanding shares (in thousands)                    
Basic   42,362    41,788    42,426    41,829 
Diluted   43,309    42,737    43,373    42,778 

 

 

 

 

Globant S.A.

Condensed Interim Consolidated Statements of Financial Position as of June 30, 2023 and December 31, 2022

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

 

   June 30, 2023   December 31, 2022 
ASSETS          
Current assets          
Cash and cash equivalents   240,863    292,457 
Investments   29,906    48,408 
Trade receivables   488,052    424,810 
Other assets   14,848    15,197 
Other receivables   60,619    70,212 
Other financial assets   10,608    6,529 
Total current assets   844,896    857,613 
           
Non-current assets          
Investments   1,836    1,513 
Other assets   3,445    10,657 
Other receivables   21,457    16,316 
Deferred tax assets   52,132    46,807 
Investment in associates   1,352    1,337 
Other financial assets   31,217    34,978 
Property and equipment   161,371    161,733 
Intangible assets   200,449    182,572 
Right-of-use assets   131,125    147,311 
Goodwill   799,598    734,952 
Total non-current assets   1,403,982    1,338,176 
TOTAL ASSETS   2,248,878    2,195,789 
           
LIABILITIES          
Current liabilities          
Trade payables   84,048    89,397 
Payroll and social security taxes payable   171,619    203,819 
Borrowings   294    2,838 
Other financial liabilities   60,716    59,316 
Lease liabilities   39,273    37,681 
Tax liabilities   22,925    23,454 
Income tax payable   14,717    11,276 
Other liabilities   1,353    808 
Total current liabilities   394,945    428,589 
           
Non-current liabilities          
Trade payables   4,178    5,445 
Borrowings   54    861 
Other financial liabilities   60,506    78,055 
Lease liabilities   86,033    97,457 
Deferred tax liabilities   5,070    11,291 
Income tax payable   2,342    — 
Payroll and social security taxes payable   2,848    4,316 
Provisions for contingencies   12,708    13,615 
Total non-current liabilities   173,739    211,040 
TOTAL LIABILITIES   568,684    639,629 
           
Capital and reserves          
Issued capital   51,040    50,724 
Additional paid-in capital   1,000,316    950,520 
Other reserves   (30,627)   (32,242)
Retained earnings   611,963    538,551 
Total equity attributable to owners of the Company   1,632,692    1,507,553 
Non-controlling interests   47,502    48,607 
Total equity   1,680,194    1,556,160 
TOTAL EQUITY AND LIABILITIES   2,248,878    2,195,789 

 

 

 

 

Globant S.A.

Selected Cash Flow Data

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

 

   Three months ended 
   June 30, 2023   June 30, 2022 
Net Income for the period   36,906    37,154 
Non-cash adjustments, taxes and others   61,928    37,899 
Changes in working capital   (62,092)   (30,074)
Cash flows from operating activities   36,742    44,979 
Capital expenditures   (27,822)   (27,783)
Cash flows from investing activities   (35,510)   (51,465)
Cash flows from financing activities   (13,608)   (9,753)
Net decrease in cash & cash equivalents   (12,376)   (16,239)

 

 

 

 

Globant S.A.

Supplemental Non-IFRS Financial Information

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

 

   Six Months Ended   Three months ended 
   June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022 
Reconciliation of adjusted gross profit                    
Gross Profit   349,138    313,698    180,841    161,287 
Depreciation and amortization expense   13,033    10,800    6,601    5,582 
Share-based compensation expense - Equity settled   8,778    1,914    3,188    1,114 
Adjusted gross profit   370,949    326,412    190,630    167,983 
Adjusted gross profit margin   38.2%   39.3%   38.3%   39.1%
                     
Reconciliation of selling, general and administrative expenses                    
Selling, general and administrative expenses   (247,533)   (213,316)   (128,176)   (111,678)
Depreciation and amortization expense   40,489    28,933    20,710    14,778 
Share-based compensation expense - Equity settled   24,995    23,477    13,865    13,116 
Acquisition-related charges (a)   9,118    5,710    4,570    3,233 
Adjusted selling, general and administrative expenses   (172,931)   (155,196)   (89,031)   (80,551)
Adjusted selling, general and administrative expenses as % of revenues   (17.8)%   (18.7)%   (17.9)%   (18.8)%
                     
Reconciliation of Adjusted Profit from Operations                    
Profit from Operations   90,861    99,638    46,638    48,902 
Share-based compensation expense - Equity settled   33,773    25,391    17,053    14,230 
Acquisition-related charges (a)   21,142    11,715    10,727    6,075 
Adjusted Profit from Operations   145,776    136,744    74,418    69,207 
Adjusted Profit from Operations margin   15.0%   16.5%   15.0%   16.1%
                     
Reconciliation of Net income for the period                    
Net income for the period   73,412    73,715    36,993    37,092 
Share-based compensation expense - Equity settled   33,749    25,391    17,029    14,230 
Acquisition-related charges (a)   20,761    10,598    10,889    4,289 
Tax effect of non-IFRS adjustments   (13,660)   (6,767)   (6,053)   (3,474)
Adjusted Net income   114,262    102,937    58,858    52,137 
Adjusted Net income margin   11.8%   12.4%   11.8%   12.1%
                     
Calculation of Adjusted Diluted EPS                    
Adjusted Net income   114,262    102,937    58,858    52,137 
Diluted shares   43,309    42,737    43,373    42,778 
Adjusted Diluted EPS   2.64    2.41    1.36    1.22 

 

(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  Q2 2022   Q3 2022   Q4 2022   Q1 2023   Q2 2023 
Total Employees   25,924    26,541    27,122    26,288    25,947 
IT Professionals   24,410    24,922    25,331    24,496    24,163 
                          
North America Revenues %   64.5    64.9    61.7    61.4    60.6 
Latin America Revenues %   23.8    21.9    22.7    21.8    22.0 
EMEA Revenues %   9.7    10.0    11.9    13.4    14.1 
Asia and Oceania Revenues %   2.0    3.2    3.7    3.4    3.3 
                          
USD Revenues %   79.0    81.2    77.5    74.8    73.9 
Other Currencies Revenues %   21.0    18.8    22.5    25.2    26.1 
                          
Top Customer %   10.5    10.7    10.8    9.4    8.8 
Top 5 Customers %   25.7    24.7    25.1    24.5    23.7 
Top 10 Customers %   36.7    34.5    34.3    34.8    33.3 
                          
Customers Served (Last Twelve Months)*   1,043    1,114    1,249    1,342    1,388 
Customers with >$1M in Revenues (Last Twelve Months)   233    255    259    276    283 

 

(*) Represents customers with more than $10,000 in revenues in the last twelve months.

 

Investor Relations Contact:

Arturo Langa, Globant

investors@globant.com

+1 (877) 215-5230

 

Media Contact:

Wanda Weigert, Globant

pr@globant.com

+1 (877) 215-5230

Source: Globant