Globant Reports 2022 Fourth Quarter and Full Year Financial Results

Strong Revenue Growth and Solid Profitability

• Fourth quarter revenues of $490.7 million, up 29.2% year-over-year
• IFRS Diluted EPS of $0.91 for the fourth quarter
• Non-IFRS Diluted EPS of $1.40 for the fourth quarter
• Full year 2022 revenues of $1,780.2 million, up 37.3% year-over-year
• IFRS Diluted EPS of $3.47 for the full year
• Non-IFRS Diluted EPS of $5.08 for the full year

LUXEMBOURG, Feb. 16, 2023 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three months and year ended December 31, 2022.

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.

Fourth Quarter 2022 Financial Highlights

• Revenues rose to $490.7 million, representing 29.2% year-over-year growth.
• IFRS Gross Profit Margin was 37.4% compared to 38.0% in the fourth quarter of 2021.
• Non-IFRS Adjusted Gross Profit Margin was 39.0% compared to 39.4% in the fourth quarter of 2021.
• IFRS Profit from Operations Margin was 11.2% compared to 11.5% in the fourth quarter of 2021.
• Non-IFRS Adjusted Profit from Operations Margin was 16.1% compared to 16.7% in the fourth quarter of 2021.
• IFRS Diluted EPS was $0.91 compared to $0.68 in the fourth quarter of 2021.
• Non-IFRS Adjusted Diluted EPS was $1.40 compared to $1.07 in the fourth quarter of 2021.

Full Year ended December 31, 2022 Financial Highlights

• Revenues rose to $1,780.2 million, representing 37.3% year-over-year growth.
• IFRS Gross Profit Margin was 37.6% compared to 38.2% for the full year 2021.
• Non-IFRS Adjusted Gross Profit Margin was 39.2% compared to 39.5% for the full year 2021.
• IFRS Profit from Operations Margin was 11.6% compared to 11.1% for the full year 2021.
• Non-IFRS Adjusted Profit from Operations Margin was 16.3% compared to 16.5% for the full year 2021.
• IFRS Diluted EPS was $3.47 compared to $2.28 for the full year 2021.
• Non-IFRS Adjusted Diluted EPS was $5.08 compared to $3.76 for the full year 2021.

Other Metrics as of and for the quarter ended December 31, 2022

• Cash and cash equivalents and Short-term investments were $340.9 million as of December 31, 2022, a decrease of $119.5 million from $460.4 million as of December 31, 2021, driven mainly by acquisitions, investments in our platform business and organic expansion initiatives. As of December 31, 2022, our credit facility was fully undrawn.
• Globant completed the fourth quarter of 2022 with 27,122 Globers, 25,331 of whom were technology, design and innovation professionals.
• The geographic revenue breakdown for the fourth quarter of 2022 was as follows: 61.7% from North America (top country: US), 22.7% from Latin America (top country: Argentina), 11.9% from EMEA (top country: Spain) and 3.7% from Asia and Oceania (top country: India).
• Globant's top customer, top five customers and top ten customers for the fourth quarter of 2022 represented 10.8%, 25.1% and 34.3% of revenues, respectively.
• During the twelve months ended December 31, 2022, Globant served a total of 1,249 customers (with revenues over $10,000 in the last twelve months) and continued to increase its wallet share, with 259 accounts generating more than $1 million of annual revenues, compared to 185 for the same period one year ago.
• In terms of currencies, 77.5% of Globant's revenues for the fourth quarter of 2022 were denominated in US dollars.

"2022 was our best year ever in terms of sales, geographic presence and brand growth. 2023 marks the 20th anniversary of Globant, and we continue to see a sizable opportunity to expand our business in the coming years, with analysts like IDC forecasting that digital transformation spending will reach $3.4 trillion in 2026," said Martín Migoya, Globant's CEO and Co-founder. "At the same time, there is a broad expansion of trends like AI which will have great impact on businesses. Given our focus on AI over the past several years, we are ready to lead the way in this new era and empower organizations to reinvent themselves for the future."

"We are extremely proud of the results we delivered today. We ended 2022 with 37.3% year-over-year revenue growth, the second highest revenue growth rate since becoming a publicly listed company, while delivering another strong year of profitability and cash generation. Adjusted Operating Margins for 2022 stood at 16.3%, relatively unchanged on an annual basis, and we delivered Adjusted Diluted EPS of 5.08, representing 35.1% year-over-year growth. We strongly believe that the mid- and long-term demand for digital transformation remains intact. We see technology continuing to be at the center of every company's strategy," explained Juan Urthiague, Globant's CFO.

2023 First Quarter and Full Year Outlook

Based on current market conditions, Globant is providing the following estimates for the first quarter and the full year of 2023:

• First quarter 2023 Revenues are estimated to be at least $470.0 million, or 17.1% year-over-year growth.
• First quarter 2023 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15-16%.
• First quarter 2023 Non-IFRS Adjusted Diluted EPS is estimated to be at least $1.27 (assuming an average of 43.2 million diluted shares outstanding during the first quarter).
• Fiscal year 2023 Revenues are estimated to be at least $2,065 million, implying at least 16.0% year-over-year revenue growth. This expected growth includes a neutral FX outlook.
• Fiscal year 2023 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 15%-17%.
• Fiscal year 2023 Non-IFRS Adjusted Diluted EPS is estimated to be at least $5.70 (assuming an average of 43.4 million diluted shares outstanding during 2023).

Conference Call and Webcast

Martín Migoya and Juan Urthiague will discuss the fourth quarter 2022 results in a video conference call today beginning at 4:30pm ET.

Video conference call access information is:
https://more.globant.com/F4Q22EarningsCall

Webcast https://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 27,000 employees and we are present in more than 25 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"), 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 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 consolidated statements of financial position as of December 31, 2022 and 2021 and its consolidated statement of comprehensive income for the three months and years ended December 31, 2022 and 2021, prepared in accordance with IFRS as issued by the IASB.

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, 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.
Consolidated Statements of Comprehensive Income
(In thousands of U.S. dollars, except per share amounts, unaudited)

Globant S.A.
Consolidated Statements of Financial Position as of December 31, 2022 and December 31, 2021
(In thousands of U.S. dollars, unaudited)

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

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

(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, 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.

Globant S.A.
Schedule of Supplemental Information (unaudited)

(*) Represents customers with more than $10,000 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

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SOURCE Globant