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Globant Reports 2024 First Quarter Financial Results

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Globant (NYSE: GLOB) has released its financial results for Q1 2024, reporting revenues of $571.1 million, a 20.9% year-over-year increase. IFRS diluted EPS was $1.02, and Non-IFRS adjusted diluted EPS was $1.53. While the IFRS gross profit margin slightly decreased to 35.4%, the Non-IFRS adjusted gross profit margin stood at 38.0%. The company experienced robust geographic growth, with significant contributions from North America and Latin America.

Cash and cash equivalents decreased by $85.8 million, primarily due to credit facility repayment and M&A payments. The company projects strong growth for Q2 and the full year, with estimated Q2 revenues between $585-$589 million and annual revenues between $2,405-$2,440 million.

Positive
  • Q1 2024 revenues reached $571.1 million, up 20.9% YoY.
  • IFRS diluted EPS rose to $1.02 from $0.84 YoY.
  • Non-IFRS adjusted diluted EPS increased to $1.53 from $1.28 YoY.
  • Revenues from North America accounted for 56.0%, showing strong regional performance.
  • The company served 955 customers, with 318 generating over $1 million in annual revenues.
Negative
  • IFRS gross profit margin decreased slightly to 35.4% from 35.6% YoY.
  • Non-IFRS adjusted gross profit margin dipped to 38.0% from 38.2% YoY.
  • Cash and cash equivalents decreased by $85.8 million due to credit facility repayment and M&A payments.
  • IFRS profit from operations margin fell to 8.4% from 9.4% YoY.
  • Non-IFRS adjusted profit from operations margin slightly decreased to 15.0% from 15.1% YoY.

Globant's first-quarter financial results for 2024 indicate a strong performance, with revenues of $571.1 million, marking a remarkable 20.9% year-over-year growth. This robust revenue growth exceeds the previous guidance and aligns well with the company's optimistic outlook for the year.

Examining the EPS (Earnings Per Share), the IFRS Diluted EPS stands at $1.02, up from $0.84 in Q1 2023. The Non-IFRS Adjusted Diluted EPS is even more impressive at $1.53, compared to $1.28 last year. This indicates strong profitability, despite slight declines in profit margins.

However, it's important to note that both the Gross Profit Margin and Profit from Operations Margin show marginal declines. The IFRS Gross Profit Margin decreased slightly from 35.6% to 35.4%, while the IFRS Profit from Operations Margin fell from 9.4% to 8.4%. Despite these minor declines, the overall financial health remains solid.

Globant's cash and cash equivalents dropped to $237.5 million, primarily due to the partial repayment of its credit facility and several M&A earnout payments. Although this represents a significant decrease from $323.3 million at the end of 2023, it's not unusual given the company's ongoing investments and growth strategies.

The geographic revenue breakdown shows a diversified revenue stream, with significant contributions from North America (56.0%) and a strong presence in Latin America, Europe and new markets. This diversified revenue base can help mitigate risks associated with market-specific downturns.

For retail investors, the forward-looking estimates are promising, with expected Q2 2024 revenues in the range of $585.0 million to $589.0 million and a full-year revenue guidance of $2,405.0 million to $2,440.0 million. These projections imply a steady growth trajectory, reinforcing the company's solid execution and strategic focus.

Globant's sustained growth in Q1 2024 can be attributed to its strong position in the digital transformation market, driven by secular technology trends such as AI. The company reported serving 955 customers over the past year, with a notable increase in high-value accounts generating over $1 million annually. This indicates a deepening of client relationships and a successful expansion of wallet share.

The geographic revenue breakdown underscores Globant's successful global expansion strategy. North America remains the largest revenue contributor at 56.0%, showcasing the company's strong foothold in a key market. The company's ability to drive growth across different regions (Latin America, Europe and new markets) highlights its adaptability and global appeal.

Investors should pay attention to the company's strategic use of AI and innovation, which is expected to drive mid-teen top-line growth in 2024. This aligns with broader market trends where digital and AI-driven solutions are increasingly sought after by businesses aiming to enhance efficiency and customer experience.

While the slight dip in profit margins might seem concerning, it's essential to view it in the context of the company's aggressive growth and investment strategies. These investments are likely to yield long-term benefits, positioning Globant for sustained success in an increasingly digital world.

For retail investors, understanding Globant's strategic focus on AI and its robust pipeline of projects can offer insights into the company's growth potential. Despite some fluctuations in margins, the overall outlook remains positive, driven by strong market demand and successful client engagements.

Executing on Growth Initiatives

  • First quarter revenues of $571.1 million, up 20.9% year-over-year
  • IFRS Diluted EPS of $1.02 for the first quarter
  • Non-IFRS Adjusted Diluted EPS of $1.53 for the first quarter

LUXEMBOURG, May 16, 2024 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native company focused on reinventing businesses through innovative technology solutions, today announced results for the three months ended March 31, 2024.

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.

First Quarter 2024 Financial Highlights

  • Revenues rose to $571.1 million, representing 20.9% year-over-year growth.
  • IFRS Gross Profit Margin was 35.4% compared to 35.6% in the first quarter of 2023.
  • Non-IFRS Adjusted Gross Profit Margin was 38.0% compared to 38.2% in the first quarter of 2023.
  • IFRS Profit from Operations Margin was 8.4% compared to 9.4% in the first quarter of 2023.
  • Non-IFRS Adjusted Profit from Operations Margin was 15.0% compared to 15.1% in the first quarter of 2023.
  • IFRS Diluted EPS was $1.02 compared to $0.84 in the first quarter of 2023.
  • Non-IFRS Adjusted Diluted EPS was $1.53 compared to $1.28 in the first quarter of 2023.

Other Metrics as of and for the quarter ended March 31, 2024

  • Cash and cash equivalents and Short-term investments were $237.5 million as of March 31, 2024, a decrease of $85.8 million from $323.3 million as of December 31, 2023, driven mainly by the partial repayment of our credit facility and a number of M&A earnout payments. As of March 31, 2024, we had a total amount of $105 million drawn from our credit facility.
  • Globant completed the first quarter of 2024 with 28,991 Globers, 26,933 of whom were technology, design and innovation professionals.
  • The geographic revenue breakdown for the first quarter of 2024 was as follows: 56.0% from North America (top country: US), 22.9% from Latin America (top country: Argentina), 17.2% from Europe (top country: Spain) and 3.9% from New Markets1 (top country: Saudi Arabia).
  • Globant's top customer, top five customers and top ten customers for the first quarter of 2024 represented 8.3%, 21.8% and 30.1% of revenues, respectively.
  • During the twelve months ended March 31, 2024, Globant served a total of 955 customers (with revenues over $100,000 in the last twelve months) and continued to increase its wallet share, with 318 accounts generating more than $1 million of annual revenues, compared to 276 for the same period one year ago.
  • In terms of currencies, 68.4% of Globant's revenues for the first quarter of 2024 were denominated in US dollars.

"As an industry leader, Globant is confident in its resilience and growth plans as we provide guidance for a strong 2024. Our clear strategy, unique value proposition and authentic partnerships are the foundation of our differentiated offering. With a focus on innovative technology, our studio networks are poised to deliver mid-teen top-line growth in 2024. We continue to reinvent the industry, creating attractive products that touch the lives of millions and drive the digital economy of tomorrow," said Martín Migoya, Globant's CEO and co-founder. "Our global presence, AI expertise, industry specialization and geographic scale enable us for success as we drive loyalty through seamless and satisfying customer experiences."

"Our first-quarter revenues of $571.1 million, a remarkable 20.9% year-over-year growth, exceeded our guidance and positioned us well for the year ahead. We continue to see secular technology trends, driven by AI, and remain highly optimistic about our growth prospects. The strength of our pipeline and the positive momentum in recent bookings reinforce our confidence in the future. Across all geographic segments, we experienced robust growth, a testament to our solid execution and strategic focus. With a robust balance sheet and ample funding options, we are well-positioned to drive growth and make strategic investments. Looking ahead, we are fully confident in our ability to deliver another year of industry-leading growth, and we are excited about the opportunities that lie ahead," explained Juan Urthiague, Globant's CFO.

2024 Second Quarter and Full Year Outlook

Based on current market conditions, Globant is providing the following estimates for the second quarter and the full year of 2024:

  • Second quarter 2024 Revenues are estimated to be in the range of $585.0 million to $589.0 million, or 17.6% to 18.4% year-over-year growth.
  • Second quarter 2024 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 14.5% - 15.5%.
  • Second quarter 2024 Non-IFRS Adjusted Diluted EPS is estimated to be in the range of $1.47 to $1.52 (assuming an average of 44.2 million diluted shares outstanding during the second quarter).
  • Fiscal year 2024 Revenues are estimated to be in the range of $2,405.0 million to $2,440.0 million, implying a 14.7% to 16.4% year-over-year revenue growth.
  • Fiscal year 2024 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 14.5% - 15.5%.
  • Fiscal year 2024 Non-IFRS Adjusted Diluted EPS is estimated to be in the range of $6.20 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 first quarter 2024 results in a video conference call today beginning at 4:30pm ET.

Video conference call access information is:
https://more.globant.com/F1Q24EarningsCall
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 28,900 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 International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), 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 March 31, 2024 and December 31, 2023 and its condensed interim consolidated statements of comprehensive income for the three months ended March 31, 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)


Three Months Ended


March 31, 2024


March 31, 2023





Revenues

571,078


472,421

Cost of revenues

(368,857)


(304,124)

Gross profit

202,221


168,297





Selling, general and administrative expenses

(152,114)


(119,357)

Net impairment losses on financial assets

(2,165)


(4,717)

Profit from operations

47,942


44,223





Finance income

1,125


1,235

Finance expense

(7,269)


(4,172)

Other financial results, net

5,074


3,762

Financial results, net

(1,070)


825





Share of results of investment in associates

(14)


56

Other income and expenses, net

10,011


1,487

Profit before income tax

56,869


46,591





Income tax

(12,940)


(10,206)

Net income for the period

43,929


36,385





Other comprehensive income, net of income tax effects




Items that may be reclassified subsequently to profit and loss:




- Exchange differences on translating foreign operations

(18,608)


2,741

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

125


25

- Gains and losses on cash flow hedges

(8,755)


4,206

Total comprehensive income for the period

16,691


43,357





Net income attributable to:




Owners of the Company

45,060


36,419

Non-controlling interest

(1,131)


(34)

Net income for the period

43,929


36,385





Total comprehensive income for the period attributable to:




Owners of the Company

19,009


42,129

Non-controlling interest

(2,318)


1,228

Total comprehensive income for the period

16,691


43,357

Earnings per share




Basic

1.05


0.86

Diluted

1.02


0.84

Weighted average of outstanding shares (in thousands)




Basic

43,103


42,297

Diluted

44,071


43,237

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



March 31, 2024


December 31, 2023

ASSETS





Current assets





Cash and cash equivalents


225,622


307,223

Investments


11,879


16,070

Trade receivables


561,363


499,283

Other assets


28,617


31,753

Other receivables


64,193


54,786

Other financial assets


6,067


15,418

Total current assets


897,741


924,533






Non-current assets





Investments


1,981


1,833

Other assets


3,614


4,088

Other receivables


23,525


26,475

Deferred tax assets


63,703


60,777

Investment in associates


1,412


1,426

Other financial assets


35,213


34,864

Property and equipment


154,684


162,736

Intangible assets


266,000


274,382

Right-of-use assets


120,640


119,400

Goodwill


1,105,279


1,120,724

Total non-current assets


1,776,051


1,806,705

TOTAL ASSETS


2,673,792


2,731,238






LIABILITIES





Current liabilities





Trade payables


106,169


124,545

Payroll and social security taxes payable


235,810


221,843

Borrowings


106,159


156,916

Other financial liabilities


102,860


80,370

Lease liabilities


38,123


47,852

Tax liabilities


22,231


33,229

Income tax payable


20,488


11,287

Other liabilities


312


896

Total current liabilities


632,152


676,938






Non-current liabilities





Trade payables


2,797


2,981

Borrowings


1,795


2,191

Other financial liabilities


100,369


137,382

Lease liabilities


79,009


70,884

Deferred tax liabilities


18,932


21,098

Income tax payable


4,725


—

Payroll and social security taxes payable


6,542


5,139

Provisions for contingencies


16,656


16,448

Total non-current liabilities


230,825


256,123

TOTAL LIABILITIES


862,977


933,061






Capital and reserves





Issued capital


51,778


51,705

Additional paid-in capital


1,018,792


1,022,918

Other reserves


(68,099)


(42,048)

Retained earnings


742,149


697,089

Total equity attributable to owners of the Company


1,744,620


1,729,664

Non-controlling interests


66,195


68,513

Total equity


1,810,815


1,798,177

TOTAL EQUITY AND LIABILITIES


2,673,792


2,731,238

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



Three Months Ended



March 31, 2024


March 31, 2023

Net Income for the period


43,929


36,385

Non-cash adjustments, taxes and others


54,902


46,218

Changes in working capital


(88,131)


(48,776)

Cash flows from operating activities


10,700


33,827

Capital expenditures


(15,537)


(35,610)

Cash flows from investing activities


(16,920)


(46,880)

Cash flows from financing activities


(75,326)


(25,960)

Net decrease in cash & cash equivalents


(81,546)


(39,013)

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


Three Months Ended


March 31, 2024


March 31, 2023





Reconciliation of adjusted gross profit




Gross Profit

202,221


168,297

Depreciation and amortization expense

7,433


6,432

Share-based compensation expense - Equity settled

7,142


5,590

Adjusted gross profit

216,796


180,319

Adjusted gross profit margin

38.0 %


38.2 %





Reconciliation of selling, general and administrative expenses



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FAQ

What were Globant's Q1 2024 revenues?

Globant's Q1 2024 revenues were $571.1 million, a 20.9% year-over-year increase.

What was Globant's IFRS diluted EPS for Q1 2024?

Globant's IFRS diluted EPS for Q1 2024 was $1.02.

What is the Non-IFRS adjusted diluted EPS for GLOB in Q1 2024?

The Non-IFRS adjusted diluted EPS for GLOB in Q1 2024 was $1.53.

How much did Globant's cash and cash equivalents change in Q1 2024?

Globant's cash and cash equivalents decreased by $85.8 million in Q1 2024.

What is Globant's revenue guidance for Q2 2024?

Globant estimates its Q2 2024 revenues to be between $585.0 million and $589.0 million.

How many customers generated over $1 million in annual revenues for Globant?

318 customers generated over $1 million in annual revenues for Globant.

What percentage of Globant's Q1 2024 revenue came from North America?

56.0% of Globant's Q1 2024 revenue came from North America.

What is the full-year 2024 revenue outlook for Globant?

Globant's full-year 2024 revenue is estimated to be between $2,405.0 million and $2,440.0 million.

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