Strong, Broad Based Results
Third quarter revenues of $614.7 million, up 12.7% year-over-yearIFRS Diluted EPS of $0.98 for the third quarter Non-IFRS Adjusted Diluted EPS of $1.63 for the third quarter
LUXEMBOURG, Nov. 14, 2024 /PRNewswire/ — Globant (NYSE: GLOB), a digitally native company focused on reinventing businesses through innovative technology solutions, today announced results for the three and nine months ended September 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.
Third Quarter 2024 Financial Highlights
Revenues rose to $614.7 million, representing 12.7% year-over-year growth.IFRS Gross Profit Margin was 36.2% compared to 36.4% in the third quarter of 2023.Non-IFRS Adjusted Gross Profit Margin was 38.5% compared to 38.2% in the third quarter of 2023.IFRS Profit from Operations Margin was 10.6% compared to 9.7% in the third quarter of 2023.Non-IFRS Adjusted Profit from Operations Margin was 15.6% compared to 15.3% in the third quarter of 2023.IFRS Diluted EPS was $0.98 compared to $0.98 in the third quarter of 2023.Non-IFRS Adjusted Diluted EPS was $1.63 compared to $1.48 in the third quarter of 2023.
Nine months ended September 30, 2024 Financial Highlights
Revenues rose to $1,773.2 million, representing 17.0% year-over-year growth.IFRS Gross Profit Margin was 35.8% compared to 36.1% in the first nine months of 2023.Non-IFRS Adjusted Gross Profit Margin was 38.2% compared to 38.2% in the first nine months of 2023.IFRS Profit from Operations Margin was 9.4% compared to 9.5% in the first nine months of 2023.Non-IFRS Adjusted Profit from Operations Margin was 15.2% compared to 15.1% in the first nine months of 2023.IFRS Diluted EPS was $2.88 compared to $2.68 in the first nine months of 2023.Non-IFRS Adjusted Diluted EPS was $4.67 compared to $4.12 in the first nine months of 2023.
Other Metrics as of and for the quarter ended September 30, 2024
Cash and cash equivalents and Short-term investments were $213.5 million as of September 30, 2024, a decrease of $109.8 million from $323.3 million as of December 31, 2023, driven mainly by the expansion into new geographies and a number of M&A earnout payments. As of September 30, 2024, we had a total amount of $165 million drawn from our credit facility.Globant completed the third quarter of 2024 with 29,998 Globers, 27,927 of whom were technology, design and innovation professionals.The geographic revenue breakdown for the third quarter of 2024 was as follows: 55.7% from North America (top country: US), 21.8% from Latin America (top country: Argentina), 17.6% from Europe (top country: Spain) and 4.9% from New Markets1 (top country: Saudi Arabia).Globant’s top customer, top five customers and top ten customers for the third quarter of 2024 represented 9.1%, 21.0% and 30.1% of revenues, respectively.During the twelve months ended September 30, 2024, Globant served a total of 969 customers (with revenues over $100,000 in the last twelve months) and continued to increase its wallet share, with 331 accounts generating more than $1 million of annual revenues, compared to 305 for the same period one year ago.In terms of currencies, 66.6% of Globant’s revenues for the third quarter of 2024 were denominated in US dollars.
“As we reflect on another remarkable quarter, I am thrilled to share that Globant continues on a trajectory of strong growth, solidifying our role as an industry leader. The level of demand we are witnessing across verticals and markets fuels our optimism for continued expansion in 2024. Our strategic investments in AI have lead to year-to-date AI-related initiatives increasing by 120% compared to the same period last year, enhancing our capabilities and driving productivity gains that translate into unique client experiences. With a strong pipeline and a commitment to redefining industries through our Studios, we are well-positioned to lead in this new era of digital innovation,” said Martín Migoya, Globant’s CEO and co-founder.
“As we conclude this quarter, I am pleased to report that Globant has achieved another quarter of record revenues, at $614.7 million, reflecting strong sequential growth driven by our top client and several key accounts. This performance aligns with our guidance and showcases our ability to enhance profitability while maintaining a prudent balance sheet. Our healthy margins are a reflection to our focus on profitability, while we see early recovery signs in specific verticals that previously faced headwinds. We are confident in our ability to sustain this momentum and build on our strong performance as we approach 2025,” explained Juan Urthiague, Globant’s CFO.
2024 Fourth Quarter and Full Year Outlook
Based on current market conditions, Globant is providing the following estimates for the fourth quarter and the full year of 2024:
Fourth quarter 2024 Revenues are estimated to be in the range of $642.0 million to $648.0 million, or 10.6% to 11.6% year-over-year growth.Fourth quarter 2024 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15.0% to 16.0%.Fourth quarter 2024 Non-IFRS Adjusted Diluted EPS is estimated to be in the range of $1.71 to $1.75 (assuming an average of 44.7 million diluted shares outstanding during the fourth quarter).Fiscal year 2024 Revenues are estimated to be in the range of $2,415.0 million to $2,421.0 million, implying a 15.2% 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 $6.37 to $6.43 (assuming an average of 44.5 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 third quarter 2024 results in a video conference call today beginning at 4:30pm ET.
Video conference call access information is:
https://more.globant.com/F3Q24EarningsCall
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 29,900 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 IFRS Accounting Standards 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 September 30, 2024 and December 31, 2023 and its condensed interim consolidated statements of comprehensive income for the three and nine months ended September 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)
Nine Months Ended
Three Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Revenues
1,773,206
1,515,234
614,667
545,282
Cost of revenues
(1,139,161)
(967,794)
(392,392)
(346,980)
Gross profit
634,045
547,440
222,275
198,302
Selling, general and administrative expenses
(460,877)
(390,064)
(154,178)
(142,531)
Net impairment losses on financial assets
(8,994)
(13,979)
(3,667)
(2,621)
Other operating income and expenses, net
2,738
614
777
—
Profit from operations
166,912
144,011
65,207
53,150
Finance income
3,876
3,500
1,349
1,324
Finance expense
(20,536)
(15,063)
(7,034)
(5,661)
Other financial results, net
7,341
11,473
1,735
3,044
Financial results, net
(9,319)
(90)
(3,950)
(1,293)
Share of results of investment in associates
161
185
105
170
Other income and expenses, net
6,142
4,075
(4,464)
2,774
Profit before income tax
163,896
148,181
56,898
54,801
Income tax
(34,401)
(31,067)
(11,357)
(10,978)
Net income for the period
129,495
117,114
45,541
43,823
Other comprehensive income, net of income tax effects
Items that may be reclassified subsequently to profit and loss:
– Exchange differences on translating foreign operations
(20,458)
(28,761)
22,555
(30,013)
– Net change in fair value on financial assets measured at FVOCI
1,019
(2,316)
—
15
– Gains and losses on cash flow hedges
(12,768)
117
365
(3,762)
Total comprehensive income for the period
97,288
86,154
68,461
10,063
Net income attributable to:
Owners of the Company
127,324
116,405
43,606
42,993
Non-controlling interest
2,171
709
1,935
830
Net income for the period
129,495
117,114
45,541
43,823
Total comprehensive income for the period attributable to:
Owners of the Company
94,864
85,278
64,266
10,251
Non-controlling interest
2,424
876
4,195
(188)
Total comprehensive income for the period
97,288
86,154
68,461
10,063
Earnings per share
Basic
2.94
2.74
1.00
1.01
Diluted
2.88
2.68
0.98
0.98
Weighted average of outstanding shares (in thousands)
Basic
43,248
42,474
43,419
42,696
Diluted
44,271
43,442
44,442
43,664
Globant S.A.
Condensed Interim Consolidated Statements of Financial Position as of September 30, 2024 and December 31, 2023
(In thousands of U.S. dollars, unaudited)
September 30, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
199,031
307,223
Investments
14,425
16,070
Trade receivables
631,632
499,283
Other assets
24,033
31,753
Other receivables
60,417
54,786
Other financial assets
3,795
15,418
Total current assets
933,333
924,533
Non-current assets
Investments
2,212
1,833
Other assets
6,358
4,088
Other receivables
28,634
26,475
Deferred tax assets
67,528
60,777
Investment in associates
1,587
1,426
Other financial assets
37,010
34,864
Property and equipment
152,440
162,736
Intangible assets
286,161
285,661
Right-of-use assets
124,159
119,400
Goodwill
1,259,622
1,105,073
Total non-current assets
1,965,711
1,802,333
TOTAL ASSETS
2,899,044
2,726,866
LIABILITIES
Current liabilities
Trade payables
102,202
124,545
Payroll and social security taxes payable
225,193
221,843
Borrowings
186,284
156,916
Other financial liabilities
105,473
68,750
Lease liabilities
29,744
47,852
Tax liabilities
25,858
33,229
Income tax payable
11,043
11,287
Other liabilities
465
896
Total current liabilities
686,262
665,318
Non-current liabilities
Trade payables
2,627
2,981
Borrowings
1,220
2,191
Other financial liabilities
117,132
135,238
Lease liabilities
90,421
70,884
Deferred tax liabilities
18,381
21,098
Income tax payable
6,526
—
Payroll and social security taxes payable
5,050
5,139
Provisions for contingencies
17,367
28,336
Total non-current liabilities
258,724
265,867
TOTAL LIABILITIES
944,986
931,185
Capital and reserves
Issued capital
52,286
51,705
Additional paid-in capital
1,087,711
1,022,918
Other reserves
(74,508)
(42,048)
Retained earnings
824,413
697,089
Total equity attributable to owners of the Company
1,889,902
1,729,664
Non-controlling interests
64,156
66,017
Total equity
1,954,058
1,795,681
TOTAL EQUITY AND LIABILITIES
2,899,044
2,726,866
Globant S.A.
Selected Cash Flow Data
(In thousands of U.S. dollars, unaudited)
Three Months Ended
September 30, 2024
September 30, 2023
Net Income for the period
45,541
43,823
Non-cash adjustments, taxes and others
76,819
53,723
Changes in working capital
(31,823)
(10,141)
Cash flows from operating activities
90,537
87,405
Capital expenditures
(20,810)
(26,758)
Cash flows from investing activities
(89,596)
(140,663)
Cash flows from financing activities
41,044
7,931
Net increase/decrease in cash & cash equivalents
41,985
(45,327)
Globant S.A.
Supplemental Non-IFRS Financial Information
(In thousands of U.S. dollars, unaudited)
Nine Months Ended
Three Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Reconciliation of adjusted gross profit
Gross profit
634,045
547,440
222,275
198,302
Depreciation and amortization expense
25,415
20,612
9,457
7,579
Share-based compensation expense – Equity settled
18,010
10,976
5,109
2,198
Adjusted gross profit
677,470
579,028
236,841
208,079
Adjusted gross profit margin
38.2 %
38.2 %
38.5 %
38.2 %
Reconciliation of selling, general and administrative expenses
Selling, general and administrative expenses
(460,877)
(390,064)
(154,178)
(142,531)
Depreciation and amortization expense
74,751
61,501
24,244
21,012
Share-based compensation expense – Equity settled
42,722
41,442
16,008
16,447
Acquisition-related charges (a)
17,230
14,488
1,646
5,370
Adjusted selling, general and administrative expenses
(326,174)
(272,633)
(112,280)
(99,702)
Adjusted selling, general and administrative expenses as % of revenues
(18.4) %
(18.0) %
(18.3) %
(18.3) %
Reconciliation of adjusted profit from operations
Profit from operations
166,912
144,011
65,207
53,150
Share-based compensation expense – Equity settled
60,732
52,418
21,117
18,645
Acquisition-related charges (a)
42,668
32,577
9,788
11,435
Adjusted profit from operations
270,312
229,006
96,112
83,230
Adjusted profit from operations margin
15.2 %
15.1 %
15.6 %
15.3 %
Reconciliation of net income for the period
Net income for the period
127,324
116,405
43,606
42,993
Share-based compensation expense – Equity settled
60,618
52,377
21,192
18,628
Acquisition-related charges (a)
41,334
30,639
14,954
9,878
Tax effect of non-IFRS adjustments
(22,516)
(20,380)
(7,399)
(6,720)
Adjusted net income
206,760
179,041
72,353
64,779
Adjusted net income margin
11.7 %
11.8 %
11.8 %
11.9 %
Calculation of adjusted diluted EPS
Adjusted net income
206,760
179,041
72,353
64,779
Diluted shares
44,271
43,442
44,442
43,664
Adjusted diluted EPS
4.67
4.12
1.63
1.48
(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
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Total Employees
27,505
29,150
28,991
29,112
29,998
IT Professionals
25,575
27,116
26,933
27,133
27,927
North America Revenues %
58.9
57.4
56.0
56.3
55.7
Latin America Revenues %
21.6
22.9
22.9
23.0
21.8
Europe Revenues %
15.9
15.8
17.2
16.9
17.6
New Markets Revenues %
3.6
3.9
3.9
3.8
4.9
USD Revenues %
72.5
68.6
68.4
67.1
66.6
Other Currencies Revenues %
27.5
31.4
31.6
32.9
33.4
Top Customer %
8.7
8.2
8.3
8.3
9.1
Top 5 Customers %
22.5
21.4
21.8
21.0
21.0
Top 10 Customers %
32.2
30.8
30.1
30.3
30.1
Customers Served (Last Twelve Months)*
889
930
955
958
969
Customers with >$1M in Revenues (Last Twelve Months)
305
311
318
329
331
(*) 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
1Represents Asia, Oceania and the Middle East.
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