Globant S.A. Q3 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Globant Q3 2020 Earnings Summary

  • Revenue: $207.2 million, up 20.9% YoY and 13.4% QoQ, beating guidance. Constant currency growth YoY was 21.9%.
  • Adjusted Gross Profit: $80.8 million with a 39% margin, down slightly from 40.6% margin in Q3 2019 due to COVID-19 related lower utilization, but up 80bps QoQ.
  • Adjusted Operating Income: $31.6 million or 15.3% of revenues, compared to $30.9 million or 18.1% in Q3 2019. Improved 180bps QoQ.
  • Adjusted Net Income: $24.4 million, 11.8% margin vs. 13.7% last year. Adjusted EPS of $0.60, slightly down from $0.62 in Q3 2019.
  • Free Cash Flow: $21.6 million with ~90% conversion from adjusted net income.
  • Employee Count: 14,340 globally. Strong net IT professional additions with 1,863 added in Q3 including 1,100 from gA acquisition. Organic net additions: 717.
  • Attrition: 12.6% over last 12 months, improved from 14.1% YoY. Normalized attrition (excluding gA): 13.4%.
  • Major Customer Performance: Disney remains top client at 10.8% of revenue, grew 10.2% YoY and 14.8% QoQ. Top 5 and top 10 customers grew 49.3% and 41.1% YoY.

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Operator: Good day, and welcome to the Globant Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask question. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Paula Conde, Investor Relations Officer. Please go ahead. Paula Conde: Thank you, Operator, and thanks everyone for joining us today on our call to review our third quarter 2020 financial results. By now, you should have received a copy of the earnings release. If you have not, a copy is available on our Web site, investors.globant.com. Our speakers today are Martín Migoya, Co-Founder and Chief Executive Officer; Juan Urthiague, Chief Financial Officer; and Patricia Pomies, Chief Delivery and People Officer. Before we begin, I would like to remind you that some of the comments on our call today may be deemed forward-looking statements. This includes our business and financial outlook and the answers to some of your questions. Such statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. Please note that we follow IFRS accounting rules in our financial statements. During our call today, we will report non-IFRS or adjusted measures, which is how we track performance internally and the easiest way to compare Globant to our peers in the industry. You will find a

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