Globoforce profits jump by over 150% as revenues also soar

Irish software company Globoforce is predicting further growth after chalking up record revenues again last year as pretax profits jumped by more than 150 per cent.

Globoforce, which operates employee reward and incentive schemes for some of the world’s biggest companies, recorded a 10 per cent rise in turnover to $343 million (€302 million) from $310 million (€273 million) last year, newly filed accounts show.

Pretax profits jumped by 156 per cent to $9.7 million (€8.5 million) from $3.8 million (€3.3 million) as operating profits climbed 71 per cent to $6.7 million (€5.8 million).

The company, which has reported growth every year since it was founded in 1999, has recorded compound annual growth rate (CAGR) for the last eight years of 21 per cent.

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"This year isn't over yet but our growth rate has expanded and we should hit $500 million in billings this year, which is a huge milestone for the company," said chief executive Eric Mosley.

On fire

He said Globoforce was benefiting from a general recognition that rewarding employees is beneficial to companies in terms of productivity and ultimately, revenues.

"It's great when your market catches on fire," Mr Mosley told The Irish Times.

“We’ve been doing this for 18 years and done very well every year but when you start to see the market come to you so that there is no need for evangelism on our part any more that is very rewarding,” he added.

Globoforce provides a software-as-a-service (Saas) platform that delivers reward programmes on behalf of corporates that wish to recognise employee performance. More than four million employees globally from over 250 companies were live on the Globoforce platform at the end of 2017.

Founded in Dublin by Mr Mosley and Eddie Reynolds, the company's clients include Biogen, Cisco, Eaton, LinkedIn, Procter & Gamble, Symantec, JetBlue Airways, KPMG and Baker Hughes.

Relocated

The company, whose backers include Balderton Capital and Atlas Ventures, previously relocated part of its operations to the US, where it derives the bulk of its revenues.

A breakdown of revenues in the latest accounts how some $220.6 million (€193.9 million) in turnover derived from the US with a further $17.9 million (€15.7 million) coming from Britain.

Staff costs at the company jumped to almost $20 million (€17.5 million) from $16.6 million (€14.5 million) a year over as the number of employees rose.

Globoforce said it had Irish tax losses and R&D losses of $18.9 million (€16.6 million) in 2017, down from $25.3 million (€22.2 million) a year earlier.

The company employs more than 550 people globally, of which 300 are based in Dublin.