Technology

Globant Reports 2024 Second Quarter Financial Results

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Growth Outlook Remains Strong, Executing on Profitability

Second quarter revenues of $587.5 million, up 18.1% year-over-yearIFRS Diluted EPS of $0.87 for the second quarter Non-IFRS Adjusted Diluted EPS of $1.51 for the second quarter

LUXEMBOURG, Aug. 15, 2024 /PRNewswire/ — Globant (NYSE: GLOB), a digitally native company focused on reinventing businesses through innovative technology solutions, today announced results for the three and six months ended June 30, 2024.

Please see highlights below. Note that reconciliations between IFRS and Non-IFRS financial measures are disclosed at the end of this press release.

Second Quarter 2024 Financial Highlights

Revenues rose to $587.5 million, representing 18.1% year-over-year growth.IFRS Gross Profit Margin was 35.7% compared to 36.3% in the second quarter of 2023.Non-IFRS Adjusted Gross Profit Margin was 38.1% compared to 38.3% in the second quarter of 2023.IFRS Profit from Operations Margin was 9.2% compared to 9.4% in the second quarter of 2023.Non-IFRS Adjusted Profit from Operations Margin was 15.1% compared to 15.0% in the second quarter of 2023.IFRS Diluted EPS was $0.87 compared to $0.85 in the second quarter of 2023.Non-IFRS Adjusted Diluted EPS was $1.51 compared to $1.36 in the second quarter of 2023.

Six months ended June 30, 2024 Financial Highlights

Revenues rose to $1,158.5 million, representing 19.4% year-over-year growth.IFRS Gross Profit Margin was 35.5% compared to 36.0% in the first six months of 2023.Non-IFRS Adjusted Gross Profit Margin was 38.0% compared to 38.2% in the first six months of 2023.IFRS Profit from Operations Margin was 8.8% compared to 9.4% in the first six months of 2023.Non-IFRS Adjusted Profit from Operations Margin was 15.0% compared to 15.0% in the first six months of 2023.IFRS Diluted EPS was $1.89 compared to $1.70 in the first six months of 2023.Non-IFRS Adjusted Diluted EPS was $3.04 compared to $2.64 in the first six months of 2023.

Other Metrics as of and for the quarter ended June 30, 2024

Cash and cash equivalents and Short-term investments were $180.4 million as of June 30, 2024, a decrease of $142.9 million from $323.3 million as of December 31, 2023, driven mainly by payments of bonuses, investments in our platform business, partial repayment of our credit facility and a number of M&A earnout payments. As of June 30, 2024, we had a total amount of $125 million drawn from our credit facility.Globant completed the second quarter of 2024 with 29,112 Globers, 27,133 of whom were technology, design and innovation professionals.The geographic revenue breakdown for the second quarter of 2024 was as follows: 56.3% from North America (top country: US), 23.0% from Latin America (top country: Argentina), 16.9% from Europe (top country: Spain) and 3.8% from New Markets1 (top country: Saudi Arabia).Globant’s top customer, top five customers and top ten customers for the second quarter of 2024 represented 8.3%, 21.0% and 30.3% of revenues, respectively.During the twelve months ended June 30, 2024, Globant served a total of 958 customers (with revenues over $100,000 in the last twelve months) and continued to increase its wallet share, with 329 accounts generating more than $1 million of annual revenues, compared to 283 for the same period one year ago.In terms of currencies, 67.1% of Globant’s revenues for the second quarter of 2024 were denominated in US dollars.

“As we celebrate our tenth anniversary as a public company, Globant remains steadfast in its commitment to long-term growth and industry leadership. Our recent quarterly results demonstrate robust revenue growth and strong performance across all regions and verticals, particularly in media, sports, and entertainment. Our AI-related revenues have significantly grown by nearly 130% in the first half of 2024, underscoring our pivotal role in the ongoing AI revolution. With the unveiling of our AI agents, which enhance the software development life cycle, and the introduction of the Globant GUT Network at the Cannes Lions International Festival of Creativity, we are poised to meet the growing demands for AI-based solutions across the global economy. Our entrepreneurial and innovative mindset continues to drive us forward, fostering lasting client relationships and delivering exceptional shareholder returns,” said Martín Migoya, Globant’s CEO and co-founder. “As we look ahead, we are optimistic about our record-high pipeline and the transformative potential of generative AI to shape the future of our industry.”

“We are very proud of the results today, which reflect our strong execution. This quarter, we achieved revenues of $587.5 million, up 18.1% year-over-year, driven by a broad-based performance. Our ability to maintain high profitability, despite the challenging economic environment, is a reflection of our operational efficiency. As we look ahead, we are maintaining a strong growth outlook for the remainder of the year. This is supported by our continued expansion across different regions and our investments in broadening our service offering. Additionally, the increase in AI-related revenues is translating into tangible revenue growth for Globant. We remain encouraged by the opportunities ahead for the company, and are committed to delivering industry leading growth and profitability,” explained Juan Urthiague, Globant’s CFO.

2024 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 2024:

Third quarter 2024 Revenues are estimated to be in the range of $611.0 million to $617.0 million, or 12.1% to 13.2% year-over-year growth.Third quarter 2024 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15.0% to 16.0%.Third quarter 2024 Non-IFRS Adjusted Diluted EPS is estimated to be in the range of $1.60 to $1.64 (assuming an average of 44.4 million diluted shares outstanding during the third quarter).Fiscal year 2024 Revenues are estimated to be in the range of $2,407.0 million to $2,421.0 million, implying a 14.8% to 15.5% year-over-year revenue growth.Fiscal year 2024 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15.0% to 15.5%.Fiscal year 2024 Non-IFRS Adjusted Diluted EPS is estimated to be in the range of $6.30 to $6.50 (assuming an average of 44.3 million diluted shares outstanding during 2024).

Conference Call and Webcast
Martin Migoya, Globant’s CEO and co-founder, Juan Urthiague, Globant’s CFO, Patricia Pomies, Globant’s COO, and Diego Tártara, Globant’s  CTO, will discuss the second quarter 2024 results in a video conference call today beginning at 4:30pm ET.

Video conference call access information is:
https://more.globant.com/F2Q24EarningsCall
Webcast http://investors.globant.com/ 

About Globant (NYSE:GLOB)
At Globant, we create the digitally-native products that people love. We bridge the gap between businesses and consumers through technology and creativity, leveraging our expertise in AI. We dare to digitally transform organizations and strive to delight their customers.

We have more than 29,100 employees and we are present in more than 30 countries across 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, 2024 and December 31, 2023 and its condensed interim consolidated statements of comprehensive income for the three and six months ended June 30, 2024 and 2023, 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, 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, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Revenues

1,158,539

969,952

587,461

497,531

Cost of revenues

(746,769)

(620,814)

(377,912)

(316,690)

Gross profit

411,770

349,138

209,549

180,841

Selling, general and administrative expenses

(306,699)

(247,533)

(154,585)

(128,176)

Net impairment losses on financial assets

(5,327)

(11,358)

(3,162)

(6,641)

Other operating income and expenses, net

1,961

614

1,961

614

Profit from operations

101,705

90,861

53,763

46,638

46638

Finance income

2,527

2,176

1,402

941

Finance expense

(13,502)

(9,402)

(6,233)

(5,230)

Other financial results, net

5,606

8,429

532

4,667

Financial results, net

(5,369)

1,203

(4,299)

378

Share of results of investment in associates

56

15

70

(41)

Other income and expenses, net

10,606

1,301

595

(186)

Profit before income tax

106,998

93,380

50,129

46,789

Income tax

(23,044)

(20,089)

(10,104)

(9,883)

Net income for the period

83,954

73,291

40,025

36,906

Other comprehensive income, net of income tax effects

Items that may be reclassified subsequently to profit and loss:

– Exchange differences on translating foreign operations

(43,013)

1,252

(24,405)

(1,489)

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

1,019

(2,331)

894

(2,356)

– Gains and losses on cash flow hedges

(13,133)

3,879

(4,378)

(327)

Total comprehensive income for the period

28,827

76,091

12,136

32,734

Net income attributable to:

Owners of the Company

83,718

73,412

38,658

36,993

Non-controlling interest

236

(121)

1,367

(87)

Net income for the period

83,954

73,291

40,025

36,906

Total comprehensive income for the period attributable to:

Owners of the Company

30,598

75,027

11,589

32,898

Non-controlling interest

(1,771)

1,064

547

(164)

Total comprehensive income for the period

28,827

76,091

12,136

32,734

Earnings per share

Basic

1.94

1.73

0.89

0.87

Diluted

1.89

1.70

0.87

0.85

Weighted average of outstanding shares (in thousands)

Basic

43,172

42,362

43,244

42,426

Diluted

44,220

43,309

44,292

43,373

 

Globant S.A.
Condensed Interim Consolidated Statements of Financial Position as of June 30, 2024 and December 31, 2023
(In thousands of U.S. dollars, unaudited)

June 30, 2024

December 31, 2023

ASSETS

Current assets

Cash and cash equivalents

157,629

307,223

Investments

22,736

16,070

Trade receivables

578,819

499,283

Other assets

25,312

31,753

Other receivables

64,745

54,786

Other financial assets

4,338

15,418

Total current assets

853,579

924,533

Non-current assets

Investments

2,115

1,833

Other assets

4,973

4,088

Other receivables

26,243

26,475

Deferred tax assets

59,763

60,777

Investment in associates

1,482

1,426

Other financial assets

37,008

34,864

Property and equipment

151,873

162,736

Intangible assets

284,518

285,661

Right-of-use assets

120,676

119,400

Goodwill

1,076,761

1,105,073

Total non-current assets

1,765,412

1,802,333

TOTAL ASSETS

2,618,991

2,726,866

LIABILITIES

Current liabilities

Trade payables

101,251

124,545

Payroll and social security taxes payable

191,950

221,843

Borrowings

125,605

156,916

Other financial liabilities

67,659

68,750

Lease liabilities

31,809

47,852

Tax liabilities

25,797

33,229

Income tax payable

5,565

11,287

Other liabilities

1,611

896

Total current liabilities

551,247

665,318

Non-current liabilities

Trade payables

3,173

2,981

Borrowings

1,777

2,191

Other financial liabilities

91,070

135,238

Lease liabilities

84,205

70,884

Deferred tax liabilities

19,861

21,098

Income tax payable

4,372

Payroll and social security taxes payable

3,470

5,139

Provisions for contingencies

20,718

28,336

Total non-current liabilities

228,646

265,867

TOTAL LIABILITIES

779,893

931,185

Capital and reserves

Issued capital

52,039

51,705

Additional paid-in capital

1,041,459

1,022,918

Other reserves

(95,168)

(42,048)

Retained earnings

780,807

697,089

Total equity attributable to owners of the Company

1,779,137

1,729,664

Non-controlling interests

59,961

66,017

Total equity

1,839,098

1,795,681

TOTAL EQUITY AND LIABILITIES

2,618,991

2,726,866

 

Globant S.A.
Selected Cash Flow Data
(In thousands of U.S. dollars, unaudited)

Three Months Ended

June 30, 2024

June 30, 2023

Net Income for the period

40,025

36,906

Non-cash adjustments, taxes and others

41,788

61,928

Changes in working capital

(71,646)

(62,444)

Cash flows from operating activities

10,167

36,390

Capital expenditures

(38,155)

(27,822)

Cash flows from investing activities

(60,656)

(35,510)

Cash flows from financing activities

(17,514)

(13,256)

Net decrease in cash & cash equivalents

(68,003)

(12,376)

 

Globant S.A.
Supplemental Non-IFRS Financial Information
(In thousands of U.S. dollars, unaudited)

Six Months Ended

Three Months Ended

June 30,
2024

June 30,
2023

June 30,
2024

June 30,
2023

Reconciliation of adjusted gross profit

Gross profit

411,770

349,138

209,549

180,841

Depreciation and amortization expense

15,958

13,033

8,525

6,601

Share-based compensation expense – Equity settled

12,901

8,778

5,759

3,188

Adjusted gross profit

440,629

370,949

223,833

190,630

Adjusted gross profit margin

38.0 %

38.2 %

38.1 %

38.3 %

Reconciliation of selling, general and administrative expenses

Selling, general and administrative expenses

(306,699)

(247,533)

(154,585)

(128,176)

Depreciation and amortization expense

50,507

40,489

25,442

20,710

Share-based compensation expense – Equity settled

26,714

24,995

14,399

13,865

Acquisition-related charges (a)

15,584

9,118

5,986

4,570

Adjusted selling, general and administrative expenses

(213,894)

(172,931)

(108,758)

(89,031)

Adjusted selling, general and administrative expenses as % of revenues

(18.5) %

(17.8) %

(18.5) %

(17.9) %

Reconciliation of adjusted profit from operations

Profit from operations

101,705

90,861

53,763

46,638

Share-based compensation expense – Equity settled

39,615

33,773

20,158

17,053

Acquisition-related charges (a)

32,880

21,142

14,736

10,727

Adjusted profit from operations

174,200

145,776

88,657

74,418

Adjusted profit from operations margin

15.0 %

15.0 %

15.1 %

15.0 %

Reconciliation of net income for the period

Net income for the period

83,718

73,412

38,658

36,993

Share-based compensation expense – Equity settled

39,425

33,749

20,077

17,029

Acquisition-related charges (a)

26,380

20,761

16,440

10,889

Tax effect of non-IFRS adjustments

(15,117)

(13,660)

(8,313)

(6,053)

Adjusted net income

134,406

114,262

66,862

58,858

Adjusted net income margin

11.6 %

11.8 %

11.4 %

11.8 %

Calculation of adjusted diluted EPS

Adjusted net income

134,406

114,262

66,862

58,858

Diluted shares

44,220

43,309

44,292

43,373

Adjusted diluted EPS

3.04

2.64

1.51

1.36

(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, interest charges on acquisition-related indebtedness, external deal costs, acquisition-related retention bonuses, integration costs, changes in the fair value of contingent consideration liabilities, 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 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Total Employees

25,947

27,505

29,150

28,991

29,112

IT Professionals

24,163

25,575

27,116

26,933

27,133

North America Revenues %

60.6

58.9

57.4

56.0

56.3

Latin America Revenues %

22.0

21.6

22.9

22.9

23.0

Europe Revenues %

13.8

15.9

15.8

17.2

16.9

New Markets Revenues %

3.6

3.6

3.9

3.9

3.8

USD Revenues %

73.9

72.5

68.6

68.4

67.1

Other Currencies Revenues %

26.1

27.5

31.4

31.6

32.9

Top Customer %

8.8

8.7

8.2

8.3

8.3

Top 5 Customers %

23.7

22.5

21.4

21.8

21.0

Top 10 Customers %

33.3

32.2

30.8

30.1

30.3

Customers Served (Last Twelve Months)*

835

889

930

955

958

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

283

305

311

318

329

(*) Represents customers with more than $100,000 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

1 Represents Asia, Oceania and the Middle East.

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SOURCE Globant

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