UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of May 2020

Commission File Number 001-36535

 

GLOBANT S.A.

(Translation of registrant's name into English)

 

  37A Avenue J.F. Kennedy

L-1855, Luxembourg

Tel: + 352 20 30 15 96  

 (Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

x Form 20-F          ¨ Form 40-F

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

       

 

 

 

 

GLOBANT S.A.

FORM 6-K

 

Globant S.A. (the “Company”) is furnishing under the cover of Form 6-K the following:

 

Earnings Release

 

Exhibit 99.1

Press release, dated May 14, 2020, entitled “Globant Reports 2020 First Quarter Financial Results ⸺ Solid Start To The Year Amidst COVID-19 Crisis.”

 

Risk Factor

 

The extent to which the coronavirus (“COVID-19”) outbreak and measures taken in response thereto impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict.

 

The global impact of the COVID-19 outbreak and related government actions taken to reduce the spread of the virus have been weighing on the macroeconomic environment, and have significantly increased economic uncertainty and reduced economic activity. The outbreak has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place or total lock-down orders and business limitations and shutdowns. Governments around the globe have taken steps to mitigate some of the more severe economic effects of the virus, but there can be no assurance that such steps will be effective or achieve their desired results in a timely fashion.

 

We have taken numerous actions to protect our employees and our business following the spread of COVID-19 (including restricting employee travel, developing social distancing plans for our employees and cancelling physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities or as we determine are in the best interests of our employees, customers and business partners. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or will otherwise be satisfactory to government authorities.

 

The extent to which the COVID-19 outbreak impacts our business, results of operations and financial condition in the longer term will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions broadly resume.

 

There are no comparable recent events that provide guidance as to the effect the spread of COVID-19 may have on our business, and, as a result, the ultimate impact of the outbreak is highly uncertain and subject to change. We do not yet know the full extent of the impact on our business or the global economy as a whole. However, the effects could have a material impact on our results of operations and heighten many of our known risks described in the “Risk Factors” section of our Annual Report on Form 20-F for the year ended December 31, 2019.

 

Incorporation by Reference

 

The risk factor above, and the unaudited condensed interim consolidated statement of comprehensive income, unaudited condensed interim consolidated statement of financial position, unaudited supplemental non-IFRS financial information and unaudited schedule of supplemental information contained in the press release attached as Exhibit 99.1 to this report on Form 6-K are hereby incorporated by reference into the Company’s registration statements on Form F-3 (File No. 333-225731) and on Form S-8 (File Nos. 333-201602, 333-211835 and 333-232022), to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.

 

 

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  GLOBANT S.A.  
         
         
  By: /s/ JUAN URTHIAGUE  
    Name: Juan Urthiague  
    Title: Chief Financial Officer  
         
Date: May 14, 2020        

 

 

 

Exhibit 99.1

 

May 14, 2020

 

 

Globant Reports 2020 First Quarter Financial Results

Solid Start To The Year Amidst COVID-19 Crisis

 

 

First quarter revenues of $191.6 million, up 31.1% year-over-year

IFRS Diluted EPS of $0.35 for the first quarter

Non-IFRS Diluted EPS of $0.64 for the first quarter

 

Luxembourg / May 14, 2020 - Globant (NYSE: GLOB), a digitally native technology services company, today announced results for the three months ended March 31, 2020.

 

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 2020 Financial Highlights

 

Revenues rose to $191.6 million, representing 31.1% year-over-year growth compared to the first quarter of 2019.
IFRS Gross Profit margin was 37.7% compared to 39.3% in the first quarter of 2019.
Non-IFRS Adjusted Gross Profit Margin was 39.5% compared to 41.1% in the first quarter of 2019.
IFRS Profit from Operations Margin was 9.8% compared to 12.6% in the first quarter of 2019.
Non-IFRS Adjusted Profit from Operations Margin was 15.6% compared to 16.9% in the first quarter of 2019.
IFRS Diluted EPS was $0.35 compared to $0.32 in the first quarter of 2019.
Non-IFRS Adjusted Diluted EPS was $0.64 compared to $0.50 in the first quarter of 2019.

 

Cash and Other Metrics for the Quarter ended March 31, 2020

 

Cash and cash equivalents and Short-term investments totaled $134.2 million as of March 31, 2020, an increase of $51.7 million, from $82.5 million as of December 31, 2019. During the first quarter of 2020, we drew an additional $75 million from our credit facility, totaling $125.7 million as of March 31, 2020.
Globant completed the first quarter with 12,538 Globers, 11,755 of whom were technology, design and innovation professionals.
The geographic revenue breakdown for the first quarter was as follows: 74.5% from North America (top country: US), 19.5% from Latin America and others (top country: Argentina) and 6.0% from Europe (top country: Spain).
In terms of currencies, 86.8% of Globant’s revenues for the first quarter were denominated in US dollars.
During the twelve months ended March 31, 2020, Globant served a total of 876 customers and continued to increase its wallet share, having 112 accounts with more than $1 million of annual revenues, compared to 91 for the same period one year ago.
Globant’s top customer, top five customers and top ten customers represented 11.7%, 29.1% and 41.0% of first quarter revenues, respectively.

 

 

 

 

“We are all living uncertain times as we go through the COVID-19 pandemic, and I am proud that at Globant we have continued taking good care of our employees, partnering with our customers and vendors, and assisting the communities where we operate,” said Martín Migoya, Globant’s CEO and co-founder. “Our rapid response to the crisis has enabled us to reinforce our relations with our customers, as we help them prepare and transform for the new future. This crisis is presenting new challenges and a more uncertain scenario, though we do not yet know the full extent of the impact that the spread of the COVID-19 pandemic may have on the global economy and therefore on our business, we are confident that as a pure digital player we are extremely well positioned to help companies reinvent themselves and move further into their digital and cognitive transformation.”

 

“Despite this uncertain situation, our strong differentiators enabled us to have a great performance in the first quarter where we delivered revenues and adjusted diluted earnings per share above our expectations. Revenues for the quarter amounted to $191.6 million dollars, a new record for our company which represented an outstanding 31.1% year over year growth, and with minimal impact from COVID-19,” Migoya added.

 

"Once again we completed a very successful first quarter. Revenues grew more than 30%, our adjusted net income margin was 12.7% and net hirings were very strong. We continue to focus on executing with excellence in this challenging environment,” explained Juan Urthiague, Globant’s CFO.

 

2020 Second Quarter Outlook

 

Based on current market conditions, Globant is providing the following estimates for the second quarter of 2020:

 

Second quarter 2020 Revenues are estimated to be at least $179 million.
Second quarter 2020 Non-IFRS Adjusted Profit from Operations Margin is estimated to be in the range of 12.5%-14.5%.
Second quarter 2020 Non-IFRS Adjusted Diluted EPS is estimated to be at least $0.47 (assuming an average of 38.2 million diluted shares outstanding during the second quarter).

 

Due to the uncertainty related to the potential impacts of COVID-19 on the Company's full year financial results, Globant is not providing a full year 2020 financial outlook at this time.

 

 

 

 

Conference Call and Webcast

 

Martín Migoya and Juan Urthiague will discuss the first quarter 2020 results in a conference call today beginning at 4:30pm ET.

 

Conference call access information is:

US & Canada +1 (888) 346-2877

International +1 (412) 902-4257

Webcast http://investors.globant.com/

 

About Globant (NYSE:GLOB)

 

We are a digitally native company where innovation, design and engineering meet scale. We use the latest technologies in the digital and cognitive field to empower organizations in every aspect.

 

We have more than 12,500 employees and we are present in 16 countries working for companies like Google, Rockwell Automation, Electronic Arts and Santander, among others.

We were named a Worldwide Leader of Digital Strategy Consulting Services 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 and COVID-19 related expenses. 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 unaudited condensed interim consolidated statement of financial position as of March 31, 2020, its audited consolidated statement of financial position as of December 31, 2019 and its unaudited condensed interim consolidated statement of comprehensive income for the three months ended March 31, 2020 and 2019, prepared in accordance with IFRS as issued by 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 COVID-19 related expenses. 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 resuls 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)

 

   Three months ended 
   March 31, 2020   March 31, 2019 
         
Revenues   191,572    146,151 
Cost of revenues   (119,369)   (88,727)
Gross profit   72,203    57,424 
           
Selling, general and administrative expenses   (51,872)   (38,632)
Net impairment losses on financial assets   (1,617)   (436)
Profit from operations   18,714    18,356 
           
Finance income   256    170 
Finance expense   (2,455)   (1,068)
Other financial results, net   2,717    (1,913)
           
Other income, net   16    (19)
Profit before income tax   19,248    15,526 
           
Income tax   (6,078)   (3,427)
Net income for the period   13,170    12,099 
           
Other comprehensive income, net of income tax effects          
Items that may be reclassified subsequently to profit and loss:          
- Exchange differences on translating foreign operations   (2,104)   (616)
- Net change in fair value on financial assets measured at FVOCI   (114)   35 
- Gains and losses on cash flow hedges   (2,069)   (882)
Total comprehensive income for the period   8,883    10,636 
           
Net income attributable to:          
Owners of the Company   13,170    12,099 
Net income for the period   13,170    12,099 
           
Total comprehensive income for the period attributable to:          
Owners of the Company   8,883    10,636 
Total comprehensive income for the period   8,883    10,636 
           
           
Earnings per share          
Basic   0.36    0.33 
Diluted   0.35    0.32 
           
Weighted average of outstanding shares (in thousands)          
Basic   37,008    36,205 
Diluted   38,093    37,320 

 

 

 

 

Globant S.A.

Condensed Interim Consolidated Statements of Financial Position as of March 31, 2020 and December 31, 2019

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

 

  March 31, 2020   December 31, 2019 
ASSETS        
Current assets        
Cash and cash equivalents   132,641    62,721 
Short-term investments   1,520    19,780 
Trade receivables   167,418    156,676 
Other assets   12,296    13,439 
Other receivables   19,772    19,308 
Other financial assets   3,266    4,527 
Total current assets   336,913    276,451 
           
Non-current assets          
Investments   -    418 
Other assets   6,958    7,796 
Receivables   20,411    8,810 
Deferred tax assets   23,762    26,868 
Investment in associates   3,776    3,776 
Other financial assets   1,883    1,683 
Property and equipment   88,900    87,533 
Intangible assets   27,826    27,110 
Right-of-use asset   73,024    58,781 
Goodwill   187,978    188,538 
Total non-current assets   434,518    411,313 
TOTAL ASSETS   771,431    687,764 
           
LIABILITIES          
Current liabilities          
Trade payables   30,166    31,487 
Payroll and social security taxes payable   53,182    72,252 
Borrowings   495    1,198 
Other financial liabilities   10,903    8,937 
Lease liabilities   19,728    19,439 
Tax liabilities   7,762    7,898 
Income tax payable   8,384    4,612 
Other liabilities   1,029    368 
Total current liabilities   131,649    146,191 
           
Non-current liabilities          
Trade payables   6,753    5,500 
Borrowings   125,169    50,188 
Other financial liabilities   813    1,617 
Lease liabilities   49,149    41,924 
Deferred tax liabilities   795    1,028 
Provisions for contingencies   3,363    2,602 
Total non-current liabilities   186,042    102,859 
TOTAL LIABILITIES   317,691    249,050 
           
Capital and reserves          
Issued capital   44,439    44,356 
Additional paid-in capital   163,597    157,537 
Other reserves   (6,844)   (2,557)
Retained earnings   252,548    239,378 
Total equity   453,740    438,714 
TOTAL EQUITY AND LIABILITIES   771,431    687,764 
           

 

 

 

 

Globant S.A.

Supplemental Non-IFRS Financial Information

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

 

   Three months ended 
   March 31, 2020   March 31, 2019 
Reconciliation of adjusted gross profit        
Gross Profit   72,203    57,424 
Depreciation and amortization expense   2,290    1,227 
Share-based compensation expense   1,121    1,443 
Adjusted gross profit   75,614    60,094 
Adjusted gross profit margin   39.5%   41.1%
           
Reconciliation of selling, general and administrative expenses          
Selling, general and administrative expenses   (51,872)   (38,632)
Depreciation and amortization expense   4,894    4,419 
Share-based compensation expense   5,158    2,977 
Acquisition-related charges (a)   2,758    1,832 
Adjusted selling, general and administrative expenses   (39,062)   (29,404)
Adjusted selling, general and administrative expenses as % of revenues   (20.4)%   (20.1)%
           
Reconciliation of Adjusted Profit from Operations          
Profit from Operations   18,714    18,356 
Share-based compensation expense   6,279    4,420 
Acquisition-related charges (a)   3,162    1,946 
COVID-19-related expenses (b)   1,716    - 
Adjusted Profit from Operations   29,871    24,722 
Adjusted Profit from Operations margin   15.6%   16.9%
           
Reconciliation of Net income for the period          
Net income for the period   13,170    12,099 
Share-based compensation expense   6,279    4,420 
Acquisition-related charges (a)   3,217    2,017 
COVID-19-related expenses (b)   1,716    - 
Adjusted Net income   24,382    18,536 
Adjusted Net income margin   12.7%   12.7%
           
Calculation of Adjusted Diluted EPS          
Adjusted Net income   24,382    18,536 
Diluted shares   38,093    37,320 
Adjusted Diluted EPS   0.64    0.50 

 

(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 expenses 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.

 

 

 

 

Globant S.A.

Schedule of Supplemental Information (unaudited)

                     
Metrics  Q1 2019   Q2 2019   Q3 2019   Q4 2019   Q1 2020 
                     
Total Employees   9,259    9,905    11,283    11,855    12,538 
IT Professionals   8,609    9,215    10,462    11,021    11,755 
                          
North America Revenues %   73.7    75.2    77.1    75.0    74.5 
Latin America and Others Revenues %   17.0    16.1    17.0    20.0    19.5 
Europe Revenues %   9.3    8.7    5.9    5.0    6.0 
                          
USD Revenues %   83.3    88.7    86.3    86.7    86.8 
Other Currencies Revenues %   16.7    11.3    13.7    13.3    13.2 
                          
Top Customer %   10.5    10.4    11.9    11.7    11.7 
Top 5 Customers %   28.9    27.2    26.1    27.0    29.1 
Top 10 Customers %   40.8    41.0    38.6    38.5    41.0 
                          
Customers Served (Last Twelve Months)   472    585    744    822    876 
Customers with >$1M in Revenues (Last Twelve Months)   91    97    104    107    112 

 

 

 

Investor Relations Contact:

Paula Conde & Amit Singh, Globant

investors@globant.com

+1 (877) 215-5230

 

Media Contact:

Wanda Weigert, Globant

pr@globant.com

+1 (877) 215-5230

 

Source: Globant