PR Newswire | Nov 18, 2021 04:16PM EST

11/18 15:15 CST

Globant Reports 2021 Third Quarter Financial ResultsStrong Performance On All Fronts LUXEMBOURG, Nov. 18, 2021

* Third quarter revenues of $341.8 million, up 65.0% year-over-year * IFRS Diluted EPS of $0.60 for the third quarter * Non-IFRS Diluted EPS of $0.98 for the third quarter

LUXEMBOURG, Nov. 18, 2021 /PRNewswire/ -- Globant (NYSE: GLOB), adigitally native technology services company, today announced results for the three and nine months ended September 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.

Third Quarter 2021 Financial Highlights

* Revenues rose to $341.8 million, representing 65.0% year-over-year growth. * IFRS Gross Profit Margin was 38.5% compared to 37.1% in the third quarter of 2020. * Non-IFRS Adjusted Gross Profit Margin was 39.8% compared to 39.0% in the third quarter of 2020. * IFRS Profit from Operations Margin was 11.6% compared to 11.2% in the third quarter of 2020. * Non-IFRS Adjusted Profit from Operations Margin was 16.5% compared to 15.3% in the third quarter of 2020. * IFRS Diluted EPS was $0.60 compared to $0.30 in the third quarter of 2020. * Non-IFRS Adjusted Diluted EPS was $0.98 compared to $0.56 in the third quarter of 2020.

Nine months ended September 30, 2021 Financial Highlights

* Revenues rose to $917.3 million, representing 57.7% year-over-year growth. * IFRS Gross Profit Margin was 38.2% compared to 37.0% in the first nine months of 2020. * Non-IFRS Adjusted Gross Profit Margin was 39.6% compared to 38.9% in the first nine months of 2020. * IFRS Profit from Operations Margin was 11.0% compared to 9.7% in the first nine months of 2020. * Non-IFRS Adjusted Profit from Operations Margin was 16.4% compared to 14.8% in the first nine months of 2020. * IFRS Diluted EPS was $1.60 compared to $0.90 in the first nine months of 2020. * Non-IFRS Adjusted Diluted EPS was $2.69 compared to $1.60 in the first nine months of 2020.

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

* Cash and cash equivalents and Short-term investments were $482.6 million as of September 30, 2021, an increase of $184.4 million from $298.2 million as of December 31, 2020. As of September 30, 2021, our credit facility was fully undrawn. * Globant completed the third quarter of 2021 with 21,849 Globers, 20,573 of whom were technology, design and innovation professionals. * The geographic revenue breakdown for the third quarter of 2021 was as follows: 65.2% from North America (top country: US), 22.0% from Latin America and others (top country: Argentina), 11.1% from Europe (top country: Spain) and 1.7% from Asia (top country: India). * In terms of currencies, 74.8% of Globant's revenues for the third quarter of 2021 were denominated in US dollars. * During the twelve months ended September 30, 2021, Globant served 1,018 customers and continued to increase its wallet share, having 162 accounts generating more than $1 million of annual revenues, compared to 118 for the same period one year ago. * Globant's top customer, top five customers and top ten customers for the third quarter of 2021 represented 11.5%, 27.6% and 39.7% of revenues, respectively.

"According to IDC, digital transformation spending is expected to reach $6.3 trillion between 2022 and 2024. As a leader in this growing space, we continue to innovate. We recently announced new digital Studios, such as the Metaverse studio, and intend to continue expanding our capabilities, including our new Reinvention Studios focused on disruptive industries. We expect to close this year with over 56% annual revenue growth, the highest in our history as a publicly-traded company." said Martn Migoya, Globant's CEO and co-founder.

"Globant reported another quarter of robust revenue growth, up 65% year over year. Margins also improved, driven by our strong pricing power and SG&A efficiencies. Hiring remained solid in Q3, with the net addition of 2,223 IT professionals. We also provided robust Q4 guidance, implying a material increase in full year 2021 revenue, margin and EPS expectations. We continue to witness a demand environment stronger than ever before, and our robust pipeline makes us believe we can deliver elevated levels of growth in the coming years," explained Juan Urthiague, Globant's CFO.

2021 Fourth Quarter Outlook

Based on current market conditions, Globant is providing the following estimates for the fourth quarter of 2021:

* Fourth quarter 2021 Revenues are estimated to be at least $359 million, or 54.3% year over year growth. * Fourth quarter 2021 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 16%-17%. * Fourth quarter 2021 Non-IFRS Adjusted Diluted EPS is estimated to be at least $1.01 (assuming an average of 42.9 million diluted shares outstanding during the fourth quarter).

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

Video conference call access information is: https://more.globant.com/F3Q21EarningsCallWebcast 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 21,800 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 September 30, 2021 and December 31, 2020 and its condensed interim consolidated statement of comprehensive income for the three and nine months ended September 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)



Nine months ended Three months ended

September September September September 30, 2021 30, 2020 30, 2021 30, 2020



Revenues 917,261 581,503 341,834 207,223

Cost of revenues (566,591)(366,089)(210,342)(130,253)

Gross profit 350,670 215,414 131,492 76,970



Selling, general and administrative expenses (243,366)(155,250)(89,269) (53,796)

Net impairment losses on financial assets (6,516) (3,525) (2,513) 19

Other operating income 11 - - -

Profit from operations 100,799 56,639 39,710 23,193



Finance income 474 1,377 144 670

Finance expense (8,502) (7,439) (2,559) (2,333)

Other financial results, net (2,831) 2,172 (2,176) (1,452)

Financial results, net (10,859) (3,890) (4,591) (3,115)



Share of results of investment in associates (233) (375) - (293)



Other (expense) income, net (2,887) (3,624) (2,444) (3,667)

Profit before income tax 86,820 48,750 32,675 16,118



Income tax (19,596) (13,222) (7,065) (3,779)

Net income for the period 67,224 35,528 25,610 12,339



- Exchange differences on translating foreign operations (2,627) (2,539) (189) (1,002)

- Net change in fair value on financial assets measured at FVOCI(18) - (18) 23

- Gains and losses on cash flow hedges 673 (848) 577 (14)

Total comprehensive income for the period 65,252 32,141 25,980 11,346



Net income attributable to:

Owners of the Company 67,092 35,528 25,478 12,339

Non-controlling interest 132 - 132 -

Net income for the period 67,224 35,528 25,610 12,339



Total comprehensive income for the period attributable to:

Owners of the Company 65,120 32,141 25,848 11,346

Non-controlling interest 132 - 132 -

Total comprehensive income for the period 65,252 32,141 25,980 11,346

Earnings per share

Basic 1.65 0.93 0.61 0.31

Diluted 1.60 0.90 0.60 0.30

Weighted average of outstanding shares (in thousands)

Basic 40,688 38,113 41,625 39,629

Diluted 41,872 39,314 42,809 40,830

Globant S.A.

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

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



September December 30, 2021 31, 2020

ASSETS

Current assets

Cash and cash equivalents 399,726 278,939

Investments 82,879 19,284

Trade receivables 294,356 196,020

Other assets 7,018 8,146

Other receivables 53,061 31,633

Other financial assets 2,922 1,577

Total current assets 839,962 535,599



Non-current assets

Trade Receivables - 5,644

Investments 1,027 615

Other assets 5,351 6,954

Other Receivables 22,832 9,629

Deferred tax assets 53,907 41,507

Investment in associates - 3,154

Other financial assets 23,166 15,147

Property and equipment 115,853 101,027

Intangible assets 96,943 86,721

Right-of-use assets 122,043 90,010

Goodwill 495,633 392,760

Total non-current assets 936,755 753,168

TOTAL ASSETS 1,776,717 1,288,767



LIABILITIES

Current liabilities

Trade payables 64,119 35,266

Payroll and social security taxes payable 150,112 111,881

Borrowings 524 907

Other financial liabilities 63,160 19,822

Lease liabilities 19,606 15,358

Tax liabilities 12,247 11,804

Income tax payable 13,517 10,511

Other liabilities 4,010 81

Total current liabilities 327,295 205,630



Non-current liabilities

Trade payables 4,637 5,240

Borrowings 2,103 25,061

Other financial liabilities 53,513 74,376

Lease liabilities 97,466 72,240

Deferred tax liabilities 8,711 13,698

Income tax payable 3,961 -

Provisions for contingencies 14,529 12,583

Total non-current liabilities 184,920 203,198

TOTAL LIABILITIES 512,215 408,828



Capital and reserves

Issued capital 50,003 47,861

Additional paid-in capital 855,678 541,157

Other reserves (4,646) (2,674)

Retained earnings 360,687 293,595

Total equity attributable to owners of the Company1,261,722 879,939

Non-controlling interests 2,780 -

Total equity 1,264,502 879,939

TOTAL EQUITY AND LIABILITIES 1,776,717 1,288,767

Globant S.A.

Supplemental Non-IFRS Financial Information

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



Nine months ended Three months ended

September September September September 30, 2021 30, 2020 30, 2021 30, 2020



Reconciliation of adjusted gross profit

Gross Profit 350,670 215,414 131,492 76,970

Depreciation and amortization expense 9,482 7,329 3,599 2,690

Share-based compensation expense 2,824 3,419 994 1,091

Adjusted gross profit 362,976 226,162 136,085 80,751

Adjusted gross profit margin 39.6 %38.9 %39.8 %39.0 %



Reconciliation of selling, general and administrative expenses

Selling, general and administrative expenses (243,366) (155,250) (89,269) (53,796)

Depreciation and amortization expense 35,126 15,459 13,381 5,562

Share-based compensation expense 24,412 16,003 8,621 5,518

Acquisition-related charges ^(a) 9,378 6,127 2,782 1,879

COVID-19-related charges (b) - (613) - (613)

Adjusted selling, general and administrative expenses (174,450) (118,274) (64,485) (41,450)

Adjusted selling, general and administrative expenses as % of (19.0) %(20.3) %(18.9) %(20.0) %revenues



Reconciliation of Adjusted Profit from Operations

Profit from Operations 100,799 56,639 39,710 23,193

Share-based compensation expense 27,236 19,422 9,615 6,609

Impairment of tax credits - (8) - (8)

Acquisition-related charges ^(a) 20,464 7,303 6,991 2,263

COVID-19-related charges ^(b) 2,228 2,751 - (434)

Impairment of assets (11) - - -

Adjusted Profit from Operations 150,716 86,107 56,316 31,623

Adjusted Profit from Operations margin 16.4 %14.8 %16.5 %15.3 %



Reconciliation of Net income for the period

Net income for the period 67,092 35,528 25,478 12,339

Share-based compensation expense 27,236 19,422 9,615 6,609

Impairment of tax credits - (8) - (8)

Acquisition-related charges^ (a) 26,398 11,063 10,196 5,920

COVID-19-related charges ^(b) 2,228 2,751 - (434)

Impairment of assets (11) - - -

Tax effect of non-IFRS adjustments ^(c) (10,336) (5,814) (3,408) (1,399)

Adjusted Net income 112,607 62,942 41,881 23,027

Adjusted Net income margin 12.3 %10.8 %12.3 %11.1 %



Calculation of Adjusted Diluted EPS

Adjusted Net income 112,607 62,942 41,881 23,027

Diluted shares 41,872 39,314 42,809 40,830

Adjusted Diluted EPS 2.69 1.60 0.98 0.56

(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 Q3 of 2020 reflects the tax impact of non-IFRS adjustments. Non-IFRS adjusted net income and adjusted diluted EPS for Q3 2020, previously presented were recast to conform to the current presentation.

Globant S.A.

Schedule of Supplemental Information (unaudited)



Metrics Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021



Total Employees 14,34016,25117,26719,42821,849

IT Professionals 13,43615,29016,28418,35020,573



North America Revenues % 70.0 65.9 63.1 63.8 65.2

Latin America and Others Revenues % 22.4 24.3 23.6 21.6 22.0

Europe Revenues % 7.6 9.8 12.0 13.2 11.1

Asia Revenues % 1.3 1.4 1.7



USD Revenues % 84.5 85.8 77.7 76.4 74.8

Other Currencies Revenues % 15.5 14.2 22.3 23.6 25.2



Top Customer % 10.8 10.7 10.5 10.3 11.5

Top 5 Customers % 32.2 30.0 28.4 26.4 27.6

Top 10 Customers % 45.0 42.9 41.0 39.8 39.7



Customers Served (Last Twelve Months) 893 798 860 941 1,018

Customers with >$1M in Revenues (Last 118 129 139 154 162 Twelve Months)



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

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SOURCE Globant