TMCnet News

Globant Reports 2020 Second Quarter Financial Results
[August 13, 2020]

Globant Reports 2020 Second Quarter Financial Results


Strong Performance Amidst Turbulent Macro

  • Second quarter revenues of $182.7 million, up 16.0% year-over-year
  • IFRS Diluted EPS of $0.26 for the second quarter 
  • Non-IFRS Diluted EPS of $0.51 for the second quarter

LUXEMBOURG, Aug. 13, 2020 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three and six months ended June 30, 2020.

Globant new logo

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 2020 Financial Highlights

  • Revenues rose to $182.7 million, representing 16.0% year-over-year growth compared to the second quarter of 2019.
  • IFRS Gross Profit margin was 36.3% compared to 38.5% in the second quarter of 2019.
  • Non-IFRS Adjusted Gross Profit Margin was 38.2% compared to 40.2% in the second quarter of 2019.
  • IFRS Profit from Operations Margin was 8.1% compared to 12.3% in the second quarter of 2019.
  • Non-IFRS Adjusted Profit from Operations Margin was 13.5% compared to 16.4% in the second quarter of 2019.
  • IFRS Diluted EPS was $0.26 compared to $0.36 in the second quarter of 2019.
  • Non-IFRS Adjusted Diluted EPS was $0.51 compared to $0.53 in the second quarter of 2019.

Six months ended June 30, 2020 highlights

  • Revenue rose to $374.3 million, representing 23.2% year-over-year growth compared to the first six months of 2019.
  • IFRS Gross Profit margin was 37.0% compared to 38.9% in the first six months of 2019.
  • Non-IFRS Adjusted Gross Profit Margin was 38.9% compared to 40.6% in the first six months of 2019.
  • IFRS Profit from Operations Margin was 8.9% compared to 12.4% in the first six months of 2019.
  • Non-IFRS Adjusted Profit from Operations Margin was 14.6% compared to 16.7% in the first six months of 2019.
  • IFRS Diluted EPS was $0.60, compared to $0.68 in the first six months of 2019.
  • Non-IFRS Adjusted Diluted EPS was $1.15, compared to $1.02 in the first six months of 2019.

Cash and Other Metrics for the Quarter ended June 30, 2020

  • Cash and cash equivalents and Short-term investments totaled $404.1 million as of June 30, 2020, an increase of $321.6 million, from $82.5 million as of December 31, 2019. During the second quarter of 2020, we raised approximately $301 million in net proceeds from our equity offering of 2.3 million shares, and we also repaid $50 million under our credit facility. As of June 30, 2020, we had a total amount of $75 million drawn from our credit facility.
  • Globant completed the second quarter with 12,333 Globers, 11,573 of whom were technology, design and innovation professionals.
  • The geographic revenue breakdown for the second quarter was as follows: 72.8% from North America (top country: US), 20.8% from Latin America and others (top country: Argentina) and 6.4% from Europe (top country: Spain).
  • In terms of currencies, 87.0% of Globant's revenues for the second quarter were denominated in US dollars.
  • During the twelve months ended June 30, 2020, Globant served a total of 805 customers and continued to increase its wallet share, having 113 accounts with more than $1 million of annual revenues, compared to 97 for the same period one year ago.
  • Globant's top customer, top five customers and top ten customers represented 10.7%, 31.9% and 44.9% of second quarter revenues, respectively.

"As we start the second half of 2020, we are seeing ourselves emerge into a new world. The pandemic has already changed many aspects of our lives and I am proud of how our company continues to accompany our employees, vendors, communities and customers to evolve," said Martín Migoya, Globant CEO and co-founder. "The pandemic has sparked the need for digital transformation across many industries and regions. Organizations need to reinvent themselves in order to address new consumer needs, so this presents a unique opportunity for us. As a leader in digital and cognitive transformation we know we can be the best partners to support our clients in their journeys. We will continue to invest in our global expansion and in our expertise around the latest trends to reinforce our positioning as a pure digital player."

"We have achieved solid results while navigating a challenging environment. We delivered revenues and adjusted diluted earnings per share above our expectations. Organic recovery looks strong for the third quarter and we are very enthusiastic with gA's acquisition," explained Juan Urthiague, Globant's CFO.

2020 Third quarter Outlook

Based on current market conditions, Globant is providing the following estimates for the third quarter of 2020:

  • Third quarter 2020 Revenues are estimated to be at least $203 million, or 18.5% year over year growth.
  • Third quarter 2020 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 13.5%-15.5%.
  • Third quarter 2020 Non-IFRS Adjusted Diluted EPS is estimated to be at least $0.58 (assuming an average of 40.9 million diluted shares outstanding during the third quarter).

Due to the ongoing uncertainty related to the potential impacts of COVID-19 on the Company's full year financial results, Globant is not providing a full year 2020 financial outlook at this time.

Conference Call and Webcast

Martín Migoya and Juan Urthiague will discuss the second quarter 2020 results in a conference call today beginning at 4:30pm ET.

Conference call access information is:
US & Canada +1 (888) 346-2877
International +1 (412) 902-4257
Webcast http://investors.globant.com/

About Globant (NYSE:GLOB)

We are a digitally native company where innovation, design and engineering meet scale. We use the latest technologies in the digital and cognitive field to empower organizations in every aspect.

We have more than 12,300 employees and we are present in 16 countries working for companies like Google, Rockwell Automation, Electronic Arts and Santander, among others.

We were named a Worldwide Leader of Digital Strategy Consulting Services 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, impairment of non financial assets, acquisition-related charges and COVID-19 related expenses. 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 condensed interim consolidated statement of financial position as of June 30, 2020, its audited consolidated statement of financial position as of December 31, 2019 and its unaudited condensed interim consolidated statement of comprehensive income for the three and six months ended June 30, 2020 and 2019, prepared in accordance with IFRS as issued by IASB.

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 COVID-19 related expenses. 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)














Six months ended


Three months ended


June 30, 2020

June 30, 2019


June 30, 2020

June 30, 2019







Revenues

374,280

303,685


182,708

157,534

Cost of revenues

(235,836)

(185,616)


(116,467)

(96,889)

Gross profit

138,444

118,069


66,241

60,645







Selling, general and administrative expenses

(101,454)

(79,192)


(49,582)

(40,560)

Net impairment losses on account receivables

(3,544)

(1,075)


(1,927)

(639)

Profit from operations

33,446

37,802


14,732

19,446







Finance income

707

265


451

95

Finance expense

(5,106)

(2,335)


(2,651)

(1,267)

Other financial results, net

3,624

(3,284)


907

(1,371)







Share of results of investment in associates

(82)


(82)







Other income (expense), net

43

8


27

27

Profit before income tax

32,632

32,456


13,384

16,930







Income tax

(9,443)

(6,972)


(3,365)

(3,545)

Net income for the period

23,189

25,484


10,019

13,385







Other comprehensive income, net of income tax effects






Items that may be reclassified subsequently to profit and loss:






- Exchange differences on translating foreign operations

(1,537)

(159)


567

457

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

(23)

27


91

(8)

- Gains and losses on cash flow hedges

(834)

433


1,235

1,315

Total comprehensive income for the period

20,795

25,785


11,912

15,149







Net income attributable to:






Owners of the Company

23,189

25,484


10,019

13,385

Net income for the period

23,189

25,484


10,019

13,385







Total comprehensive income for the period attributable to:






Owners of the Company

20,795

25,785


11,912

15,149

Total comprehensive income for the period

20,795

25,785


11,912

15,149







Earnings per share






Basic

0.62

0.70


0.27

0.37

Diluted

0.60

0.68


0.26

0.36

Weighted average of outstanding shares (in thousands)






Basic

37,347

36,361


37,686

36,516

Diluted

38,420

37,467


38,759

37,622


 

 




Globant S.A.

Condensed Interim Consolidated Statements of Financial Position as of June 30, 2020 and December 31, 2019

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





June 30, 2020

December 31, 2019

ASSETS



Current assets



Cash and cash equivalents

356,869

62,721

Investments

47,205

19,780

Trade receivables

169,969

156,676

Other assets

9,294

13,439

Other receivables

20,620

19,308

Other financial assets

4,797

4,527

Total current assets

608,754

276,451




Non-current assets



Investments

418

Other assets

7,513

7,796

Receivables

19,416

8,810

Deferred tax assets

26,875

26,868

Investment in associates

3,694

3,776

Other financial assets

3,809

1,683

Property and equipment

87,749

87,533

Intangible assets

30,078

27,110

Right-of-use assets

70,216

58,781

Goodwill

187,925

188,538

Total non-current assets

437,275

411,313

TOTAL ASSETS

1,046,029

687,764




LIABILITIES



Current liabilities



Trade payables

22,680

31,487

Payroll and social security taxes payable

67,000

72,252

Borrowings

1,691

1,198

Other financial liabilities

5,865

8,937

Lease liabilities

20,755

19,439

Tax liabilities

6,927

7,898

Income tax payable

5,731

4,612

Other liabilities

39

368

Total current liabilities

130,688

146,191




Non-current liabilities



Trade payables

7,396

5,500

Borrowings

75,121

50,188

Other financial liabilities

1,305

1,617

Lease liabilities

48,670

41,924

Deferred tax liabilities

1,223

1,028

Provisions for contingencies

3,368

2,602

Total non-current liabilities

137,083

102,859

TOTAL LIABILITIES

267,771

249,050




Capital and reserves



Issued capital

47,505

44,356

Additional paid-in capital

473,137

157,537

Other reserves

(4,951)

(2,557)

Retained earnings

262,567

239,378

Total equity attributable to owners of the Company

778,258

438,714

TOTAL EQUITY AND LIABILITIES

1,046,029

687,764




 

 

Globant S.A.

Supplemental Non-IFRS Financial Information

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








Six months ended


Three months ended


June 30, 2020

June 30, 2019


June 30, 2020

June 30, 2019







Reconciliation of adjusted gross profit






Gross Profit

138,444

118,069


66,241

60,645

Depreciation and amortization expense

4,639

2,920


2,349

1,693

Share-based compensation expense

2,328

2,453


1,207

1,010

Adjusted gross profit

145,411

123,442


69,797

63,348

Adjusted gross profit margin

38.9 %

40.6 %


38.2 %

40.2 %







Reconciliation of selling, general and administrative expenses






Selling, general and administrative expenses

(101,454)

(79,192)


(49,582)

(40,560)

Depreciation and amortization expense

9,897

8,527


5,003

4,108

Share-based compensation expense

10,485

6,834


5,327

3,857

Acquisition-related charges (a)

4,248

3,165


1,490

1,333

Adjusted selling, general and administrative expenses

(76,824)

(60,666)


(37,762)

(31,262)

Adjusted selling, general and administrative expenses as % of revenues

(20.5)%

(20.0)%


(20.7)%

(19.8)%







Reconciliation of Adjusted Profit from Operations






Profit from Operations

33,446

37,802


14,732

19,446

Share-based compensation expense

12,813

9,287


6,534

4,867

Acquisition-related charges (a)

5,040

3,534


1,878

1,588

COVID-19-related expenses (b)

3,185


1,469

Adjusted Profit from Operations

54,484

50,623


24,613

25,901

Adjusted Profit from Operations margin

14.6 %

16.7 %


13.5 %

16.4 %







Reconciliation of Net income for the period






Net income for the period

23,189

25,484


10,019

13,385

Share-based compensation expense

12,813

9,287


6,534

4,867

Acquisition-related charges (a)

5,143

3,631


1,926

1,614

COVID-19-related expenses (b)

3,185


1,469

Adjusted Net income

44,330

38,402


19,948

19,866

Adjusted Net income margin

11.8 %

12.6 %


10.9 %

12.6 %







Calculation of Adjusted Diluted EPS






Adjusted Net income

44,330

38,402


19,948

19,866

Diluted shares

38,420

37,467


38,759

37,622

Adjusted Diluted EPS

1.15

1.02


0.51

0.53

(a)  Acquisition-related charges include, when applicable, amortization of purchased intangible assets included in depreciation and amortization expense line on our condensed interim 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.

(b)  COVID-19 related expenses include, when applicable, bad debt provision related to the effect of COVID-19 on our customers' businesses, donations and other expenses directly attributable to the pandemic that are both incremental to charges incurred prior to the outbreak and not expected to recur once the crisis has subsided and operations return to normal and clearly separable from normal operations.

   

Globant S.A.

Schedule of Supplemental Information (unaudited)













Metrics

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020







Total Employees

9,905

11,283

11,855

12,538

12,333

IT Professionals

9,215

10,462

11,021

11,755

11,573







North America Revenues %

75.2

77.1

75.0

74.5

72.8

Latin America and Others Revenues %

16.1

17.0

20.0

19.5

20.8

Europe Revenues %

8.7

5.9

5.0

6.0

6.4







USD Revenues %

88.7

86.3

86.7

86.8

87.0

Other Currencies Revenues %

11.3

13.7

13.3

13.2

13.0







Top Customer %

10.4

11.9

11.7

11.7

10.7

Top 5 Customers %

27.2

26.1

27.0

29.1

31.9

Top 10 Customers %

41.0

38.6

38.5

41.0

44.9







Customers Served (Last Twelve Months)

585

744

822

876

805

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

97

104

107

112

113


 

Investor Relations Contact:
Paula Conde & Amit Singh, Globant
investors@globant.com
+1 (877) 215-5230

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

Cision View original content:http://www.prnewswire.com/news-releases/globant-reports-2020-second-quarter-financial-results-301112072.html

SOURCE Globant


[ Back To TMCnet.com's Homepage ]