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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