EX-99.1 2 tm2124661d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

August 12, 2021

 

Globant Reports 2021 Second Quarter Financial Results

Strong Performance Amid Robust Demand Environment

 

Second quarter revenues of $305.3 million, up 67.1% year-over-year

IFRS Diluted EPS of $0.48 for the second quarter

Non-IFRS Diluted EPS of $0.88 for the second quarter

 

Luxembourg / August 12, 2021 - Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three and six months ended June 30, 2021.

 

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 2021 Financial Highlights

 

•Revenues rose to $305.3 million, representing 67.1% year-over-year growth compared to the second quarter of 2020.
•IFRS Gross Profit margin was 38.0% compared to 36.3% in the second quarter of 2020.
•Non-IFRS Adjusted Gross Profit Margin was 39.3% compared to 38.2% in the second quarter of 2020.
•IFRS Profit from Operations Margin was 10.1% compared to 8.1% in the second quarter of 2020.
•Non-IFRS Adjusted Profit from Operations Margin was 16.2% compared to 13.5% in the second quarter of 2020.
•IFRS Diluted EPS was $0.48 compared to $0.26 in the second quarter of 2020.
•Non-IFRS Adjusted Diluted EPS was $0.88 compared to $0.45 in the second quarter of 2020.

 

Six months ended June 30, 2021 Financial Highlights

 

•Revenues rose to $575.4 million, representing 53.7% year-over-year growth compared to the first six months of 2020.
•IFRS Gross Profit margin was 38.1% compared to 37.0% in the first six months of 2020.
•Non-IFRS Adjusted Gross Profit Margin was 39.4% compared to 38.9% in the first six months of 2020.
•IFRS Profit from Operations Margin was 10.6% compared to 8.9% in the first six months of 2020
•Non-IFRS Adjusted Profit from Operations Margin was 16.4% compared to 14.6% in the first six months of 2020.
•IFRS Diluted EPS was $1.01 compared to $0.60 in the first six months of 2020.
•Non-IFRS Adjusted Diluted EPS was $1.71 compared to $1.04 in the first six months of 2020.

 

 

Other Metrics as of and for the quarter ended June 30, 2021

 

•Cash and cash equivalents and Short-term investments totaled $465.0 million as of June 30, 2021, an increase of $166.8 million from $298.2 million as of December 31, 2020. During the second quarter of 2021, we raised approximately $286.2 million in net proceeds from our equity offering of 1.38 million shares. As of June 30, 2021, our credit facility was fully undrawn.
•Globant completed the second quarter of 2021 with 19,428 Globers, 18,350 of whom were technology, design and innovation professionals.
•The geographic revenue breakdown for the second quarter of 2021 was as follows: 63.8% from North America (top country: US), 21.6% from Latin America and others (top country: Argentina), 13.2% from Europe (top country: Spain) and 1.4% from Asia (top country: Japan).
•In terms of currencies, 76.4% of Globant’s revenues for the second quarter of 2021 were denominated in US dollars.
•During the twelve months ended June 30, 2021, Globant served a total of 941 customers and continued to increase its wallet share, having 154 accounts with more than $1 million of annual revenues, compared to 113 for the same period one year ago.
•Globant’s top customer, top five customers and top ten customers for the second quarter of 2021 represented 10.3%, 26.4% and 39.8% of revenues, respectively.

 

“Organizations continue to face the need to adapt to new demands. According to the IDC, the number of companies that embrace a digital transformation strategy is up 43% since 2019. This continues to present a unique opportunity to us, as we help our clients seek reinvention and create their way forward”, said Martín Migoya. “As a reflection of our vision, we have seen an amazing expansion during the first half of the year and it's the first time Globant's revenues have surpassed $1 billion over the last twelve months. We will continue working to scale our dream of reinventing this industry.”

 

“In the second quarter, we recorded a robust 67.1% year over year revenue growth, with strong margins, leading to both top and bottom line beats. In addition, we accelerated our hiring in Q2, with IT professionals up 58.6% year over year and 12.7% quarter over quarter. Our revenues, adj. EPS and IT headcount, all recorded the strongest year over year growth since we became a public company. We also materially raised our full-year guidance. As we exit the COVID-19 pandemic, we are witnessing a demand environment stronger than before the pandemic. Moreover, our robust pipeline makes us believe we can deliver strong and elevated levels of growth for the foreseeable future,” explained Juan Urthiague, Globant’s CFO.

 

2021 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 2021:

 

•Third quarter 2021 Revenues are estimated to be at least $325 million, or 56.8% year over year growth.
•Third quarter 2021 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15.5%-17%.

 

 

•Third quarter 2021 Non-IFRS Adjusted Diluted EPS is estimated to be at least $0.92 (assuming an average of 42.7 million diluted shares outstanding during the third quarter).
•Fiscal year 2021 Revenues are estimated to be at least $1,236 million, or 51.8% year over year growth.
•Fiscal year 2021 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15.5%-17%.
•Fiscal year 2021 Non-IFRS Adjusted Diluted EPS is estimated to be at least $3.58 (assuming an average of 42.0 million diluted shares outstanding during 2021).

 

 

Conference Call and Webcast

 

Martín Migoya and Juan Urthiague will discuss the second quarter 2021 results in a video conference call today beginning at 4:30pm ET.

 

Video conference call access information is:

https://more.globant.com/F2Q21EarningsCall

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 19,400 employees and we are present in 18 countries working for companies like Google, Rockwell Automation, 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, impairment of non-financial assets, acquisition-related charges, COVID-19 related expenses 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, 2021 and December 31, 2020 and its condensed interim consolidated statement of comprehensive income for the three and six months ended June 30, 2021 and 2020, 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 COVID-19 related expenses 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: 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, 2021   June 30, 2020   June 30, 2021   June 30, 2020 
Revenues   575,427    374,280    305,257    182,708 
Cost of revenues   (356,249)   (235,836)   (189,276)   (116,467)
Gross profit   219,178    138,444    115,981    66,241 
                     
Selling, general and administrative expenses   (154,097)   (101,454)   (82,206)   (49,582)
Net impairment losses on financial assets   (4,003)   (3,544)   (2,904)   (1,927)
Other operating income   11    —    —    — 
Profit from operations   61,089    33,446    30,871    14,732 
                     
Finance income   330    707    7    451 
Finance expense   (5,943)   (5,106)   (3,331)   (2,651)
Other financial results, net   (655)   3,624    (1,526)   907 
Financial results, net   (6,268)   (775)   (4,850)   (1,293)
                     
Share of results of investment in associates   (233)   (82)   (233)   (82)
                     
Other income and expenses, net   (443)   43    (481)   27 
Profit before income tax   54,145    32,632    25,307    13,384 
                     
Income tax   (12,531)   (9,443)   (5,360)   (3,365)
Net income for the period   41,614    23,189    19,947    10,019 
                     
- Exchange differences on translating foreign operations   (2,438)   (1,537)   (714)   567 
- Net change in fair value on financial assets measured at FVOCI   —    (23)   —    91 
- Gains and losses on cash flow hedges   96    (834)   (74)   1,235 
Total comprehensive income for the period   39,272    20,795    19,159    11,912 
                     
Net income attributable to:                    
Owners of the Company   41,614    23,189    19,947    10,019 
Net income for the period   41,614    23,189    19,947    10,019 
                     
Total comprehensive income for the period attributable to:                    
Owners of the Company   39,272    20,795    19,159    11,912 
Total comprehensive income for the period   39,272    20,795    19,159    11,912 
Earnings per share                    
Basic   1.03    0.62    0.49    0.27 
Diluted   1.01    0.60    0.48    0.26 
Weighted average of outstanding shares (in thousands)                    
Basic   40,212    37,347    40,522    37,686 
Diluted   41,354    38,420    41,664    38,759 

 

 

Globant S.A.

Condensed Interim Consolidated Statements of Financial Position as of June 30, 2021 and December 31, 2020

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

 

   June 30, 2021   December 31, 2020 
ASSETS          
Current assets          
Cash and cash equivalents   431,373    278,939 
Investments   33,673    19,284 
Trade receivables   281,422    196,020 
Other assets   7,097    8,146 
Other receivables   58,485    31,633 
Other financial assets   2,265    1,577 
Total current assets   814,315    535,599 
           
Non-current assets          
Trade Receivables   —    5,644 
Investments   823    615 
Other assets   5,429    6,954 
Other Receivables   12,874    9,629 
Deferred tax assets   42,906    41,507 
Investment in associates   —    3,154 
Other financial assets   26,233    15,147 
Property and equipment   108,388    101,027 
Intangible assets   89,082    86,721 
Right-of-use assets   97,899    90,010 
Goodwill   450,946    392,760 
Total non-current assets   834,580    753,168 
TOTAL ASSETS   1,648,895    1,288,767 
           
LIABILITIES          
Current liabilities          
Trade payables   42,135    35,266 
Payroll and social security taxes payable   121,114    111,881 
Borrowings   250    907 
Other financial liabilities   47,103    19,822 
Lease liabilities   8,950    15,358 
Tax liabilities   14,383    11,804 
Income tax payable   10,199    10,511 
Other liabilities   472    81 
Total current liabilities   244,606    205,630 
           
Non-current liabilities          
Trade payables   4,528    5,240 
Borrowings   902    25,061 
Other financial liabilities   51,151    74,376 
Lease liabilities   84,333    72,240 
Deferred tax liabilities   8,337    13,698 
Provisions for contingencies   21,529    12,583 
Total non-current liabilities   170,780    203,198 
TOTAL LIABILITIES   415,386    408,828 
           
Capital and reserves          
Issued capital   49,856    47,861 
Additional paid-in capital   853,460    541,157 
Other reserves   (5,016)   (2,674)
Retained earnings   335,209    293,595 
Total equity attributable to owners of the Company   1,233,509    879,939 
TOTAL EQUITY AND LIABILITIES   1,648,895    1,288,767 

 

 

Globant S.A.

Supplemental Non-IFRS Financial Information

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

   Six months ended   Three months ended 
   June 30, 2021   June 30, 2020   June 30, 2021   June 30, 2020 
Reconciliation of adjusted gross profit                    
Gross Profit   219,178    138,444    115,981    66,241 
Depreciation and amortization expense   5,883    4,639    3,082    2,349 
Share-based compensation expense   1,830    2,328    815    1,207 
Adjusted gross profit   226,891    145,411    119,878    69,797 
Adjusted gross profit margin   39.4%   38.9%   39.3%   38.2%
                     
Reconciliation of selling, general and administrative expenses                    
Selling, general and administrative expenses   (154,097)   (101,454)   (82,206)   (49,582)
Depreciation and amortization expense   21,745    9,897    11,907    5,003 
Share-based compensation expense   15,791    10,485    8,109    5,327 
Acquisition-related charges (a)   6,596    4,248    3,962    1,490 
Adjusted selling, general and administrative expenses   (109,965)   (76,824)   (58,228)   (37,762)
Adjusted selling, general and administrative expenses as % of revenues   (19.1)%   (20.5)%   (19.1)%   (20.7)%
                     
Reconciliation of Adjusted Profit from Operations                    
Profit from Operations   61,089    33,446    30,871    14,732 
Share-based compensation expense   17,621    12,813    8,924    6,534 
Acquisition-related charges (a)   13,473    5,040    7,399    1,878 
COVID-19-related charges (b)   2,228    3,185    2,228    1,469 
Impairment of assets   (11)   —    —    — 
Adjusted Profit from Operations   94,400    54,484    49,422    24,613 
Adjusted Profit from Operations margin   16.4%   14.6%   16.2%   13.5%
                     
Reconciliation of Net income for the period                    
Net income for the period   41,614    23,189    19,947    10,019 
Share-based compensation expense   17,621    12,813    8,924    6,534 
Acquisition-related charges (a)   16,202    5,143    9,549    1,926 
COVID-19-related charges (b)   2,228    3,185    2,228    1,469 
Impairment of assets   (11)   —    —    — 
Tax effect of non-IFRS adjustments (c)   (6,928)   (4,415)   (4,169)   (2,482)
Adjusted Net income   70,726    39,915    36,479    17,466 
Adjusted Net income margin   12.3%   10.7%   12.0%   9.6%
                     
Calculation of Adjusted Diluted EPS                    
Adjusted Net income   70,726    39,915    36,479    17,466 
Diluted shares   41,354    38,420    41,664    38,759 
Adjusted Diluted EPS   1.71    1.04    0.88    0.45 

 

(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 charges 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. Moreover, these charges also include rent concessions that we were granted due to the pandemic environment.

 

(c)Non-IFRS Adjusted net income and adjusted Diluted EPS for Q2 of 2020 reflects the tax impact of non-IFRS adjustments. Non-IFRS Adjusted net income and adjusted Diluted EPS for Q2 2020, previously presented were recast to conform to the current presentation.

 

 

Globant S.A.

Schedule of Supplemental Information (unaudited)

 

Metrics  Q2 2020   Q3 2020   Q4 2020   Q1 2021   Q2 2021 
Total Employees   12,333    14,340    16,251    17,267    19,428 
IT Professionals   11,573    13,436    15,290    16,284    18,350 
                          
North America Revenues %   72.8    70.0    65.9    63.1    63.8 
Latin America and Others Revenues %   20.8    22.4    24.3    23.6    21.6 
Europe Revenues %   6.4    7.6    9.8    12.0    13.2 
Asia Revenues %                  1.3    1.4 
                          
USD Revenues %   87.0    84.5    85.8    77.7    76.4 
Other Currencies Revenues %   13.0    15.5    14.2    22.3    23.6 
                          
Top Customer %   10.7    10.8    10.7    10.5    10.3 
Top 5 Customers %   31.9    32.2    30.0    28.4    26.4 
Top 10 Customers %   44.9    45.0    42.9    41.0    39.8 
                          
Customers Served (Last Twelve Months)   805    893    798    860    941 
Customers with >$1M in Revenues (Last Twelve Months)   113    118    129    139    154 

 

Investor Relations Contact:

Amit Singh, Globant

investors@globant.com

+1 (877) 215-5230

 

Media Contact:

Wanda Weigert, Globant

pr@globant.com

+1 (877) 215-5230

Source: Globant