Executing on Growth and Increasing Guidance
- First quarter revenues of $472.4
million, up 17.7% year-over-year
- IFRS Diluted EPS of $0.84 for
the first quarter
- Non-IFRS Diluted EPS of $1.28 for the
first quarter
LUXEMBOURG, May 18, 2023
/PRNewswire/ -- Globant (NYSE: GLOB), a digitally native
technology services company, today announced results for the
three months ended March 31,
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.
First Quarter 2023 Financial Highlights
- Revenues rose to $472.4 million,
representing 17.7% year-over-year growth.
- IFRS Gross Profit Margin was 35.6% compared to 38.0% in the
first quarter of 2022.
- Non-IFRS Adjusted Gross Profit Margin was 38.2% compared to
39.5% in the first quarter of 2022.
- IFRS Profit from Operations Margin was 9.4% compared to 12.6%
in the first quarter of 2022.
- Non-IFRS Adjusted Profit from Operations Margin was 15.1%
compared to 16.8% in the first quarter of 2022.
- IFRS Diluted EPS was $0.84
compared to $0.86 in the
first quarter of 2022.
- Non-IFRS Adjusted Diluted EPS was $1.28 compared to $1.19 in the first quarter of 2022.
Other Metrics as of and for the quarter ended March 31, 2023
- Cash and cash equivalents and Short-term investments were
$284.8 million as of March 31, 2023, a decrease of $56.1 million from $340.9
million as of December 31,
2022, driven mainly by payments of bonuses, investments in
our platform business and inorganic expansion initiatives. As of
March 31, 2023, our credit facility
was fully undrawn.
- Globant completed the first quarter of 2023 with 26,288
Globers, 24,496 of whom were technology, design and innovation
professionals.
- The geographic revenue breakdown for the first quarter of 2023
was as follows: 61.4% from North
America (top country: US), 21.8% from Latin America (top country: Argentina), 13.4% from EMEA (top country:
Spain) and 3.4% from Asia and Oceania (top country: India).
- Globant's top customer, top five customers and top ten
customers for the first quarter of 2023 represented 9.4%, 24.5% and
34.8% of revenues, respectively.
- During the twelve months ended March 31,
2023, Globant served a total of 1,342 customers (with
revenues over $10,000 in the last
twelve months) and continued to increase its wallet share, with 276
accounts generating more than $1
million of annual revenues, compared to 206 for the same
period one year ago.
- In terms of currencies, 74.8% of Globant's revenues for the
first quarter of 2023 were denominated in US dollars.
"As we celebrate our 20th anniversary, we delivered a robust Q1
2023 performance, executing on all of our strategic growth pillars.
We continue to thrive at supporting organizations in every stage,
whether they are looking to enhance their user experience, or if
they are seeking greater efficiency and productivity. Our recently
launched studios keep expanding on this approach: our Create
Studio will be key to deliver a full funnel digital marketing
strategy to reach audiences, while our Commerce Studio will
help our clients create the best commerce-enabled experiences,"
said Martín Migoya, Globant's CEO and Co-founder. "Also, AI
continues to be a strong pillar for our company and our Globers.
We've consolidated our AI-focused offering into our
MINDS program to better service clients, and we are applying
generative AI in our signature platforms MagnifAI and Augoor, to
increase time-to-value and shorter production cycles for our
clients, helping them unleash their full technology potential. Our
unique positioning will enable us to continue delivering leading
value for our clients over the long term."
"Globant achieved industry-leading growth in the first quarter
of 2023, with a 17.7% year-over-year revenue increase while meeting
adjusted operating profit margin guidance. The company has also
successfully executed M&A initiatives to expand its presence in
the U.S. and Europe. Early-year
trends indicate confidence in sequential growth for the second
quarter of 2023, as well as a positive outlook for the rest of the
year. Globant remains dedicated to revolutionizing businesses with
digital transformation and cutting-edge AI advancements. Q1 results
reveal strong growth and healthy profitability. The company's
strong balance sheet management and undrawn credit facility ensure
sufficient funding for short-term growth plans," explained Juan
Urthiague, Globant's CFO.
2023 Second Quarter and Full Year Outlook
Based on current market conditions, Globant is providing the
following estimates for the second quarter and the full year of
2023:
- Second quarter 2023 Revenues are estimated to be at least
$496.0 million, or 15.5%
year-over-year growth.
- Second quarter 2023 Non-IFRS Adjusted Profit from Operations
Margin is estimated to be in the range of 15-16%.
- Second quarter 2023 Non-IFRS Adjusted Diluted EPS is estimated
to be at least $1.33 (assuming an
average of 43.4 million diluted shares outstanding during the
second quarter).
- Fiscal year 2023 Revenues are estimated to be at least
$2,074.0 million, implying at least
16.5% year-over-year revenue growth. This expected growth includes
a neutral FX outlook.
- Fiscal year 2023 Non-IFRS Adjusted Profit from Operations
Margin is estimated to be in the range of 15%-17%.
- Fiscal year 2023 Non-IFRS Adjusted Diluted EPS is estimated to
be at least $5.71 (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 first quarter 2023 results in a video conference
call today beginning at 4:30pm
ET.
Video conference call access information is:
https://more.globant.com/F1Q23EarningsCall
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 26,000 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"), 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 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 March 31, 2023 and December 31, 2022 and its condensed interim
consolidated statement of comprehensive income for the three months
ended March 31, 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)
|
Three Months
Ended
|
|
March 31,
2023
|
|
March 31,
2022
|
|
|
|
|
Revenues
|
472,421
|
|
401,378
|
Cost of
revenues
|
(304,124)
|
|
(248,967)
|
Gross
profit
|
168,297
|
|
152,411
|
|
|
|
|
Selling, general and
administrative expenses
|
(119,357)
|
|
(101,638)
|
Net impairment losses
on financial assets
|
(4,717)
|
|
(37)
|
Profit from
operations
|
44,223
|
|
50,736
|
|
|
|
|
Finance
income
|
1,235
|
|
290
|
Finance
expense
|
(4,172)
|
|
(4,029)
|
Other financial
results, net
|
3,762
|
|
438
|
Financial results,
net
|
825
|
|
(3,301)
|
|
|
|
|
Share of results of
investment in associates
|
56
|
|
—
|
Other income and
expenses, net
|
1,487
|
|
874
|
Profit before income
tax
|
46,591
|
|
48,309
|
|
|
|
|
Income tax
|
(10,206)
|
|
(11,502)
|
Net income for the
period
|
36,385
|
|
36,807
|
|
|
|
|
Other comprehensive
income, net of income tax effects
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
- Exchange differences
on translating foreign operations
|
2,741
|
|
(2,435)
|
- Net change in fair
value on financial assets measured at FVOCI
|
25
|
|
(1)
|
- Gains and losses on
cash flow hedges
|
4,206
|
|
133
|
Total comprehensive
income for the period
|
43,357
|
|
34,504
|
|
|
|
|
Net income
attributable to:
|
|
|
|
Owners of the
Company
|
36,419
|
|
36,623
|
Non-controlling
interest
|
(34)
|
|
184
|
Net income for the
period
|
36,385
|
|
36,807
|
|
|
|
|
Total comprehensive
income for the period attributable to:
|
|
|
|
Owners of the
Company
|
42,129
|
|
34,320
|
Non-controlling
interest
|
1,228
|
|
184
|
Total comprehensive
income for the period
|
43,357
|
|
34,504
|
Earnings per
share
|
|
|
|
Basic
|
0.86
|
|
0.88
|
Diluted
|
0.84
|
|
0.86
|
Weighted average of
outstanding shares (in thousands)
|
|
|
|
Basic
|
42,297
|
|
41,748
|
Diluted
|
43,237
|
|
42,741
|
Globant S.A.
Condensed Interim Consolidated
Statements of Financial Position as of March
31, 2023 and December 31, 2022
(In thousands
of U.S. dollars, unaudited)
|
|
March 31,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
254,025
|
|
292,457
|
Investments
|
|
30,819
|
|
48,408
|
Trade
receivables
|
|
451,635
|
|
425,422
|
Other assets
|
|
14,660
|
|
15,197
|
Other
receivables
|
|
74,487
|
|
70,212
|
Other financial
assets
|
|
11,838
|
|
6,529
|
Total current
assets
|
|
837,464
|
|
858,225
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Investments
|
|
1,513
|
|
1,513
|
Other assets
|
|
6,093
|
|
10,657
|
Other
receivables
|
|
16,628
|
|
16,316
|
Deferred tax
assets
|
|
53,088
|
|
46,574
|
Investment in
associates
|
|
1,393
|
|
1,337
|
Other financial
assets
|
|
34,632
|
|
34,978
|
Property and
equipment
|
|
162,393
|
|
161,733
|
Intangible
assets
|
|
187,866
|
|
181,612
|
Right-of-use
assets
|
|
139,893
|
|
147,311
|
Goodwill
|
|
745,268
|
|
739,204
|
Total non-current
assets
|
|
1,348,767
|
|
1,341,235
|
TOTAL
ASSETS
|
|
2,186,231
|
|
2,199,460
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade
payables
|
|
76,060
|
|
88,648
|
Payroll and social
security taxes payable
|
|
200,580
|
|
203,819
|
Borrowings
|
|
754
|
|
2,838
|
Other financial
liabilities
|
|
32,644
|
|
59,316
|
Lease
liabilities
|
|
37,638
|
|
37,681
|
Tax
liabilities
|
|
21,507
|
|
23,454
|
Income tax
payable
|
|
11,048
|
|
11,276
|
Other
liabilities
|
|
1,532
|
|
808
|
Total current
liabilities
|
|
381,763
|
|
427,840
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
Trade
payables
|
|
3,234
|
|
5,445
|
Borrowings
|
|
54
|
|
861
|
Other financial
liabilities
|
|
54,328
|
|
82,222
|
Lease
liabilities
|
|
92,438
|
|
97,457
|
Deferred tax
liabilities
|
|
5,353
|
|
11,291
|
Income tax
payable
|
|
10,993
|
|
—
|
Payroll and social
security taxes payable
|
|
3,145
|
|
4,316
|
Provisions for
contingencies
|
|
12,184
|
|
13,615
|
Total non-current
liabilities
|
|
181,729
|
|
215,207
|
TOTAL
LIABILITIES
|
|
563,492
|
|
643,047
|
|
|
|
|
|
Capital and
reserves
|
|
|
|
|
Issued
capital
|
|
50,797
|
|
50,724
|
Additional paid-in
capital
|
|
974,690
|
|
950,520
|
Other
reserves
|
|
(25,270)
|
|
(32,242)
|
Retained
earnings
|
|
574,970
|
|
538,551
|
Total equity
attributable to owners of the Company
|
|
1,575,187
|
|
1,507,553
|
Non-controlling
interests
|
|
47,552
|
|
48,860
|
Total
equity
|
|
1,622,739
|
|
1,556,413
|
TOTAL EQUITY AND
LIABILITIES
|
|
2,186,231
|
|
2,199,460
|
Globant S.A.
Selected Cash Flow Data
(In
thousands of U.S. dollars, unaudited)
|
|
Three months
ended
|
|
|
March 31,
2023
|
|
March 31,
2022
|
Net Income for the
period
|
|
36,385
|
|
36,807
|
Non-cash adjustments,
taxes and others
|
|
46,218
|
|
39,806
|
Changes in working
capital
|
|
(48,776)
|
|
(99,276)
|
Cash flows from
operating activities
|
|
33,827
|
|
(22,663)
|
Capital
expenditures
|
|
(35,610)
|
|
(22,673)
|
Cash flows from
investing activities
|
|
(46,880)
|
|
(51,148)
|
Cash flows from
financing activities
|
|
(25,960)
|
|
(13,492)
|
Net decrease in cash
& cash equivalents
|
|
(39,013)
|
|
(87,303)
|
Globant S.A.
Supplemental Non-IFRS Financial
Information
(In thousands of U.S. dollars,
unaudited)
|
Three Months
Ended
|
|
March 31,
2023
|
|
March 31,
2022
|
|
|
|
|
Reconciliation of
adjusted gross profit
|
|
|
|
Gross Profit
|
168,297
|
|
152,411
|
Depreciation and
amortization expense
|
6,432
|
|
5,218
|
Share-based
compensation expense - Equity settled
|
5,590
|
|
800
|
Adjusted gross
profit
|
180,319
|
|
158,429
|
Adjusted gross
profit margin
|
38.2 %
|
|
39.5 %
|
|
|
|
|
Reconciliation of
selling, general and administrative expenses
|
|
|
|
Selling, general and
administrative expenses
|
(119,357)
|
|
(101,638)
|
Depreciation and
amortization expense
|
19,779
|
|
14,155
|
Share-based
compensation expense - Equity settled
|
11,130
|
|
10,361
|
Acquisition-related
charges (a)
|
4,548
|
|
2,477
|
Adjusted selling,
general and administrative expenses
|
(83,900)
|
|
(74,645)
|
Adjusted selling,
general and administrative expenses as % of revenues
|
(17.8) %
|
|
(18.6) %
|
|
|
|
|
Reconciliation of
Adjusted Profit from Operations
|
|
|
|
Profit from
Operations
|
44,223
|
|
50,736
|
Share-based
compensation expense - Equity settled
|
16,720
|
|
11,161
|
Acquisition-related
charges (a)
|
10,415
|
|
5,640
|
Adjusted Profit from
Operations
|
71,358
|
|
67,537
|
Adjusted Profit from
Operations margin
|
15.1 %
|
|
16.8 %
|
|
|
|
|
Reconciliation of
Net income for the period
|
|
|
|
Net income for the
period
|
36,419
|
|
36,623
|
Share-based
compensation expense - Equity settled
|
16,720
|
|
11,161
|
Acquisition-related
charges (a)
|
9,872
|
|
6,309
|
Tax effect of non-IFRS
adjustments
|
(7,607)
|
|
(3,293)
|
Adjusted Net
income
|
55,404
|
|
50,800
|
Adjusted Net income
margin
|
11.7 %
|
|
12.7 %
|
|
|
|
|
Calculation of
Adjusted Diluted EPS
|
|
|
|
Adjusted Net
income
|
55,404
|
|
50,800
|
Diluted
shares
|
43,237
|
|
42,741
|
Adjusted Diluted
EPS
|
1.28
|
|
1.19
|
(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
|
Q1
2022
|
Q2
2022
|
Q3
2022
|
Q4
2022
|
Q1
2023
|
|
|
|
|
|
|
Total
Employees
|
24,504
|
25,924
|
26,541
|
27,122
|
26,288
|
IT
Professionals
|
23,158
|
24,410
|
24,922
|
25,331
|
24,496
|
|
|
|
|
|
|
North America Revenues
%
|
64.1
|
64.5
|
64.9
|
61.7
|
61.4
|
Latin America Revenues
%
|
23.5
|
23.8
|
21.9
|
22.7
|
21.8
|
EMEA Revenues
%
|
10.1
|
9.7
|
10.0
|
11.9
|
13.4
|
Asia and Oceania
Revenues %
|
2.3
|
2.0
|
3.2
|
3.7
|
3.4
|
|
|
|
|
|
|
USD Revenues
%
|
80.6
|
79.0
|
81.2
|
77.5
|
74.8
|
Other Currencies
Revenues %
|
19.4
|
21.0
|
18.8
|
22.5
|
25.2
|
|
|
|
|
|
|
Top Customer
%
|
11.0
|
10.5
|
10.7
|
10.8
|
9.4
|
Top 5 Customers
%
|
28.0
|
25.7
|
24.7
|
25.1
|
24.5
|
Top 10 Customers
%
|
38.6
|
36.7
|
34.5
|
34.3
|
34.8
|
|
|
|
|
|
|
Customers Served (Last
Twelve Months)*
|
982
|
1,043
|
1,114
|
1,249
|
1,342
|
Customers with >$1M
in Revenues (Last Twelve Months)
|
206
|
233
|
255
|
259
|
276
|
|
|
|
|
|
|
(*) 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
View original
content:https://www.prnewswire.com/news-releases/globant-reports-2023-first-quarter-financial-results-301828873.html
SOURCE Globant